LD Family Holdings Pty Ltd & Ors v Iceland Cold Storage Australia Pty Ltd & Ors [2022] VSC 439

(a) the sixth to ninth defendants' solicitors have leave pursuant to r 20.03(3) of the Supreme Court (General Civil Procedure) Rules 2015 ('Rules') to file and serve the solicitors' Notice of Ceasing to Act effective from 3 August 2022 at 4.00pm;

(b) the Notice of Ceasing to Act exhibited to the affidavit of Alexander David Nicol, dated 2 August 2022[1], is deemed filed in this proceeding on 3 August 2022 at 4.00pm.

(c) the Amended Confidential Affidavit of Alexander David Nicol dated 4 August 2022 and the exhibits thereto are to be marked confidential on the Court file pursuant to r 28A.17[2] and not to be accessed without further order of the Court.

(d) Aitken Partners must take all reasonable steps to ensure that all parties are aware of these orders, including:

(i) emailing a copy of these orders to all parties, including the sixth to ninth defendants; and

(ii) posting a copy of these orders to the sixth to ninth defendants.

(e) Ordinary service may be affected on the sixth to ninth defendants at the following addresses:

(i) the sixth defendant: 128 Meridian Drive, South Morang, Victoria, 3752;

(ii) the seventh defendant: gill@ilcs.com.au; 128 Meridian Drive, South Morang, Victoria, 3752;

(iii) the eighth defendant: c/o SN Partners Accountants and Business Advisors, 2a Monomeeth Drive, Mitcham, Victoria, 3132; and

(iv) the ninth defendant: 81 Gateway Boulevard, Epping, Victoria, 3076.

2 The application is supported by affidavits of Mr Nicol made 4 August 2022 (First Nicol affidavit) and 5 August 2022 (Second Nicol affidavit) and an affidavit of service of Mr Nicol made 4 August 2022 (Nicol service affidavit). Aitken Partners relies upon a confidential outline of submissions filed 4 August 2022 (Aitken submissions).

3 The evidence, the subject of the First Nicol affidavit, the Second Nicol Affidavit and the Nicol service affidavit, are subject to claims for confidentiality on the basis that their disclosure would disclose communications subject to legal professional privilege. A confidential schedule to these reasons (provided to Aitken Partners but not the plaintiffs) sets out the relevant communications (Confidential Schedule).

4 On 4 August 2022, Aitken Partners served the summons, the First Nicol affidavit and the Aitken submissions upon the sixth to ninth defendants.[3] By no later than 21 July 2022, the sixth to ninth defendants were on notice about the possibility of Aitken Partners making this application.[4] The Court was informed by Mr Nicol that, on 5 August 2022, Aitken Partners served the Second Nicol affidavit upon the sixth to ninth defendants and he undertook to provide an affidavit of service to that effect.

5 The Court provided the link to this hearing to the seventh defendant, Mr Gill, by sending that link to the email addresses identified in the First Nicol affidavit.[5] Mr Gill did not, nor did anyone on his behalf, or on behalf of the sixth, eighth and ninth defendants, appear at the hearing of the application.

6 Aitken Partners also provided a copy of the summons to the plaintiffs' solicitors. The Court also provided a link to the hearing to the plaintiffs' solicitors. By email dated 5 August 2022 to the Court and Aitken Partners, the plaintiffs solicitors stated that the plaintiffs did not intend to appear at the hearing.

7 The trial in this matter commenced on 14 June 2022. It is listed to re-commence on 22 August 2022.

8 The relevant background is otherwise set out in the First Nicol affidavit and the Second Nicol affidavit and also in the Confidential Schedule.

(1) Where a solicitor ceases to act for a party in a proceeding, unless a notice of change is filed and served under Rule 20.01, the solicitor shall forthwith -

(a) file notice that the solicitor has ceased to act; and

(b) serve a copy on all parties.

(2) A notice under paragraph (1) shall state the address of the party last known to the solicitor.

(3) Except by leave of the Court, a solicitor shall not file a notice under paragraph (1) -

(a) where the address of the party in the notice is outside Victoria;

(b) after a proceeding has been set down for trial; or

(c) within 28 days after a proceeding has been finally determined subject only to an appeal, if any, to the Court of Appeal.

(4) Except by leave of the Court of Appeal, a solicitor shall not file a notice under paragraph (1) where in the proceeding -

(a) a summons for leave to appeal to the Court of Appeal has been filed; or

(b) notice of appeal to the Court of Appeal has been served.

10 In Investec Bank (Australia) Ltd v Peter Kenneth Mann & Anor,[6] Pagone J set out the applicable principles:

1. As a matter of general principle a solicitor ought not to be required to act for a party where the party has ceased to provide funding. Rule 20.03 gives effect to that general principle by providing an unfettered ability for a solicitor to file a notice of ceasing to act except in the circumstances identified in r 20.03(3) when leave of the Court is required. The practice commentary to r 20.03 contains the general observation that a 'solicitor who acts for a party and is unable to get instructions or funding is entitled to cease to act and to file a notice to that effect.'[7] Authority for that proposition is said to be found in Blue Cross Properties (Toorak) Pty Ltd v Mackie & Staff Pty Ltd[8] but in that case his Honour was not dealing with an application for leave and, indeed, held that solicitors were required to comply with orders of the Court 'even if they have no funding'.[9] His Honour said (omitting footnotes):

Parties are required to comply with orders of the Court. It is not a matter of choice whether or not the steps set out in an interlocutory order are observed. If an order cannot be complied with for some good reason then application should be made to the Court for variation of the order. At the very least, the consent of the other parties to the variation, such as an extension of time, should first be sought. Here, Elite's solicitors did not advise the other parties that it would not be filing any expert report or that they would not be attending the mediation. If solicitors cannot obtain instructions or funding from the client then they are entitled to file a notice that they have ceased to act. But whilst they remain the solicitors on the record they are, in my opinion, required to comply with the orders of the Court even if they have no funding. Thus, Elite's solicitor should have attended the mediation, given that he had not applied for any exemption from attendance and had not even advised the other parties that he would not be attending. On the contrary, he had participated in making the arrangements for the mediation.[10]

His Honour's reasons make clear that a lack of funding does not absolve a solicitor from an obligation to comply with court orders made in respect of a proceeding in which the solicitor continued to be on record. Nor was his Honour dealing with one of the situations where leave might be needed.

1. The purpose of the rule requiring leave before a solicitor may file a notice of ceasing to act for a party was described in the context of the High Court Rules in Plenty v Gladwin[11]where the Court explained:

The purpose of the rule is quite different. Its concern is with the record of the Court and with the service of documents. It comes into play when, rightly or wrongly, a solicitor has ceased to act and the party has not given notice of change of solicitor or notice of intention to act in person. The solicitor may then take steps to have his name removed from the record. The first step is by applying to the Court or a Justice for an order declaring that the solicitor has ceased to be the solicitor acting for the party in the proceeding. As we have noted the Court has a discretion whether or not to make the order, but unless there are special circumstances which render it expedient to retain the solicitor on the record the order will generally be made as a matter of course upon proof that the solicitor has in fact ceased to act for the party and that no steps have been taken to take the solicitor's name off the record. Order 7, r 7(4) makes it plain that an order made under the rule does not affect the rights or liabilities of a solicitor and a party as between themselves.[12]

As the passage makes clear, the Court has a discretion in deciding whether to grant leave. Generally leave will be given upon proof that the solicitor 'has in fact ceased to act for the party and that no steps have been taken to take the solicitor's name off the record' but leave may not be granted if there are special circumstances which render it expedient to retain the solicitor on the record.

...

1. Solicitors seeking the exercise of the Court's discretion to grant leave carry the burden of satisfying the Court that leave should be granted in all of the circumstances which are particular to the case in which they make the application. Solicitors making such applications must be particularly mindful of their duties to the Court, the administration of justice, to their client (or former client) and to opposing or other litigants and to their legal advisers. Usually the only possible controverter to such an application will be the solicitors' own (former) client, and often the application will be unopposed and untested although the inconvenience that may be caused in granting leave may be substantial. It has been held that such applications need not be served upon the other party to the proceedings but only upon the party for whom the solicitors act.[13] However, that the impact of granting leave upon the Court and upon other parties to a proceeding may be a relevant factor in whether to grant leave. That may be seen from the terms of r 20.03(3)(a) itself because of the requirement for leave where 'the address of the party in the notice is outside Victoria'. A consequence of giving leave in such cases will be to deny to an opposing party the convenience of service of documents upon the solicitor where the solicitor's (former) client is outside Victoria. In this case the address of one defendant is Kingscliff New South Wales. In this case the plaintiff was present at the hearing of Madgwicks' summons because of a concern that the hearing date might be vacated if leave was granted. In those circumstances I gave the plaintiff's counsel leave to appear to assist the Court.

11 In Bodycorp Repairers Pty Ltd v Anuniziato Enzo Maisano (aka Michael Bazzano and Michael Mason) (No 2),[14] Elliott J said:

1. The issue before me has arisen by reason of an application made urgently, pursuant to rule 20.03, by Oakley Thompson for leave to cease to act, by reason of not being put in funds. An affidavit was filed and served in support of that application by Mr Broadbent on behalf of Oakley Thompson. That affidavit sets out in some considerable detail the history of Oakley Thompson attempting to have itself put in funds. The affidavit also sets out the continued negotiations that occurred between Oakley Thompson and the first defendant, and others related to the first defendant, in order to put Oakley Thompson into funds for the purposes of conducting the defence of the first defendant.
2. Counsel for the plaintiff referred to Investec Bank (Australia) Limited v Mann.[15] In my view the facts as set out in Mr Broadbent's affidavit demonstrate that this case is clearly distinguishable from the facts referred to in the decision of Investec Bank v Mann, at least for 2 reasons. First, in that case the solicitors concerned, Madgwicks, were dilatory in relation to putting the issue of costs before their client for the purpose of being in funds for the trial. The matter was only raised very late. Secondly, the client for whom they acted at the time was out of the jurisdiction. Therefore it was necessary, so his Honour found, for there to be an address for service within the jurisdiction.
3. In my view Oakley Thompson has not been dilatory. Further, the first defendant in this case is within the jurisdiction and readily could have provided an address for service if the application for leave had proceeded. More particularly, the solicitors in filing a notice of ceasing to act, if they had filed one, could have readily provided an address for service. Moreover, in Justice Pagone's decision in Investec Bank v Mann, his Honour said as follows:[16] 'It has been held that such applications need not be served upon the other party to the proceedings but only upon the party for whom the solicitors act.' Reference was then made to the English decision of Re Creehouse Limited.[17]
4. Prior to the application for leave coming on for hearing, the plaintiff was given notice of the application. The reason that notice was given to the plaintiff was because the court suggested that be done. This was because an order was made on 24 April 2013 requiring security for costs. Those costs were referable to attendance by a solicitor and counsel for the first defendant at trial. The security was ordered to be provided by the plaintiff before trial and, at the time the application for leave was notified, had in fact been provided by the plaintiff. In those circumstances, the court was of the view that it was appropriate that notice be given to the plaintiff.
5. That said, the mere fact that notice was given to the plaintiff did not require it to attend. It was a matter for the plaintiff whether or not it needed to attend. In the circumstances where the application was never made, and therefore the position of the first defendant was not known, I cannot be certain one way or the other as to whether or not leave would have been granted to the plaintiff to be heard if it sought such leave on the application.

12 Aitken Partners require leave pursuant to r 20.03(3)(b) to file notice that they have ceased to act for the sixth to ninth defendants in this proceeding as it is after the proceeding has been set down for trial. The trial commenced on 14 June 2022. It will re-commence on 22 August 2022 on an estimated duration of a maximum of eight days.

13 I am satisfied, in all of the circumstances, that it is appropriate and just for the Court to grant leave to Aitken Partners to file a notice that they have ceased to act for the sixth to ninth defendants.

14 First, Aitken Partners has provided adequate notice to the sixth to ninth defendants of this application.[18]

15 Secondly, the summons, the First Nicol affidavit, the Second Nicol affidavit and the Aitken submissions have been served on the sixth to ninth defendants and they have not appeared at the hearing of the application today.

16 Thirdly, the sixth to ninth defendants are within the jurisdiction of the Court and have an address for service within it.[19]

17 Fourthly, in my view, Aitken Partners have not been dilatory. I refer to the circumstances set out in the Confidential Schedule.

18 Fifthly, I accept the submissions of Aitken Partners set out in the Aitken submissions at [4]-[9].

19 Finally, there are no special circumstances which render it expedient to retain Aitken Partners on the record for the sixth to ninth defendants.

(a) Pursuant to r 20.03(3)(b) of the Rules, Aitken Partners has leave to file a notice that they have ceased to act for the sixth to ninth defendants in this proceeding.

(b) Pursuant to s 28A.06 of the Rules the affidavits of Alexander David Nicol, sworn 4 August 2022 and 5 August 2022, the exhibits thereto, the submissions of Aitken Partners dated 4 August 2022 and the Confidential Schedule to these reasons are confidential and are not to be accessed without further order of the Court.

(c) By 4.00pm on 6 August 2022, Aitken Partners must:

(i) email a copy of the order made by the Court this day to the parties in this proceeding, including to the seventh defendant, at his email address at gill@ilcs.com.au; and

(ii) post a copy of the order made by the Court this day to the sixth to ninth defendants to the addresses for those persons stated in the notices of appearance filed on their behalf.

21 I will hear from Aitken Partners on the precise form of the order.

CONFIDENTIAL SCHEDULE TO THE REASONS OF JUSTICE ATTIWILL GIVEN ON 5 AUGUST 2022 (REVISED ON 9 AUGUST 2022).

THIS DOCUMENT IS SUBJECT TO CONFIDENTIALITY ORDERS MADE BY JUSTICE ATTIWILL ON 5 AUGUST 2022 (AMENDED ON 8 AUGUST 2022).

[THE CONFIDENTIAL SCHEDULE IS 4 PAGES AND HAS BEEN REDACTED IN THIS VERSION**]**

[1] This date is incorrect. It should be 4 August 2022. The affidavit was re-sworn. See Reasons, [2].

[2] This is the incorrect rule. The correct rule is r 28A.06.

[6] [2012] VSC 81.

[7] Neil Williams, Civil Procedure Victoria, I 20.03.0 at Vol 1, 3253.

[8] [2007] VSC 304.

[9] Ibid [16] (Habersberger J).

[10] Ibid.

[11] [1986] HCA 55; (1986) 60 ALJR 665.

[12] Ibid 666 (Wilson, Brennan, Deane and Dawson JJ); Re Falgat Constructions Pty Ltd [1996] HCA 16; (1996) 70 ALJR 609, 610 (Kirby J).

[13] Re Creehouse Ltd [1982] All ER 659.

[14] [2013] VSC 235.

[15] [2012] VSC 81.

[17] [1982] 3 All ER 659.

[19] First Nicol affidavit, [27]-[30] and draft notice of ceasing to act.