McHutchison v Western Research and Development Ltd

REASONS FOR JUDGMENT 1 This proceeding is listed this morning for the hearing of three matters arising on the motion of the respondent. The first is an application for orders to strike out a statement of claim. That motion was originally brought in relation to a statement of claim, in substitution of which the applicant has lodged a minute of proposed amended statement of claim but without curative steps being taken in relation to some or all of the issues raised by the motion. Therefore, the substance of the motion remains to be resolved. 2 The second matter is a motion from the respondent seeking a declaration in relation to issue estoppel. That arises from reasons which I delivered on 8 April 2004 (McHutchison v Western Research and Development Ltd [2004] FCA 419). The question is whether the findings alleged to have been made there give rise to an estoppel as the applicant contends. 3 The third matter concerns costs in relation to a motion to restrain the applicant's former solicitor from acting for the applicant or being involved in any matter connected to the subject matter of this proceeding for reason of conflict of interest. 4 This proceeding was commenced in October 2003. It has not advanced significantly. Partly, that has been occasioned by the change in the applicant's solicitor on the previous occasion. 5 On 8 September 2004 my associate received a notification from the applicant's present solicitors on the record advising that a conflict of interest had arisen and they were no longer able to act for the applicant. Today, bearing yesterday's date, a notice of withdrawal of solicitors has been filed by those solicitors, giving, as is required, the address for service of the applicant. The communication was also copied to the solicitors for the respondent. 6 The relevant rule for withdrawal of a solicitor is that which appears in O 45 r 7 of the Federal Court Rules. Subrule 2 provides that: 'A solicitor shall not file or serve notice of a change under subrule (1) without leave of the Court unless he has, not less than seven days before doing so, served on his former client notice of his intention to file and serve the notice of change.' It is not contended by the applicant's solicitors that such prior service took place here. Indeed, there has not been time for it to take place. 7 The Court is informed from the bar table that the conflict arose and became apparent on 8 September 2004, the date on which my chambers was first advised of the existence of a conflict. 8 The solicitors for the respondent draw attention to the decision of Jacobson J in Bloomsdale Greeting Cards Pty Ltd v Jai Li He [2004] FCA 321. That was a case where his Honour directed the solicitor, who sought leave to withdraw, to file an affidavit so that it could then be considered in relation to the application for leave to file the notice of withdrawal and the question of costs. That was an instance where the applicant's solicitor took no steps to notify the court that he had no instructions, although the matter had been set down five months previously. It was a circumstance where only upon the judge's associate contacting the solicitor, that it became clear that the solicitor was uninstructed. In other words, the solicitor had not assisted the court in any way. 9 I find those circumstances entirely distinguishable from the present circumstances. I see no prima facie reason not to accept what I have been told from the bar table on behalf of the applicant's solicitors, or the fact that their notification, given on 8 September 2004, was given in accordance with the requirements of the law and professional obligations. In the circumstances, I consider that the applicant's solicitors have behaved impeccably and there is no reason to put them to proof of the explanation properly given to the Court. As the applicant's solicitors submitted, if an affidavit were filed it could do nothing more than say that the matters which have arisen are ones in relation to which they have a conflict, and that to proceed further in affidavit form would indeed venture into the prohibited area of the conflict. 10 There is no point in not granting leave, or to require them to provide any limited assistance to the applicant today, because this is a case where there is a conflict. That being the case, they are precluded from acting. I therefore grant leave pursuant to O 45 r 7(2) and accept for filing the notice of withdrawal of the applicant's solicitors, and thank them for their assistance to the Court. 11 As to the manner in which I should deal with the three matters that are before the Court, there is an alternative submission put for the respondent to the effect that I should proceed to decide these matters on the basis of written submissions already filed without oral argument. That is in the context where I had previously emphasised the importance of written submissions in this matter. I accept the submission made for the respondent, that if there is any unfairness to the applicant in so proceeding, that would result from a failure by the applicant to file by the due date of 6 September 2004 any written submissions on those matters, and not from the emergence of the conflict of interest on 8 September 2004. 12 I have received an affidavit of the solicitor and counsel for the respondent in which he states that on 9 September 2004 he received a telephone call from the applicant. In that telephone call the solicitor advised the applicant that he either had to attend the hearing, or that someone should attend on his behalf, and that he should not just not show up. The applicant responded that he had not had a chance to obtain alternative representation. That may be so, nevertheless he has failed to attend the Court in circumstances where he was aware that his solicitor was faced with a conflict which, in all probability, would lead to his withdrawal. Indeed, it had been conveyed to him, in ignorance of the leave requirement, that there would be a withdrawal. I am singularly unimpressed by the applicant's non-appearance today. 13 Nevertheless, I must have in mind how the elements of fairness are to be weighed. I accept the submission made by the respondent, that none of the interlocutory matters which I am asked to deal with ultimately preclude the applicant from asserting his case, even if they were decided against him on the interlocutory applications. If the estoppel issue was to be decided against him, he would nevertheless have the opportunity of arguing the issue found not to be estopped on the hearing of the principal action. If the strike out was adverse to him, he would have the opportunity, conceded by the respondent, of filing a further statement of claim. That means, if he is to find legal representation again, those advisers would have the opportunity of reformulating his case. 14 In all the circumstances therefore, I accept the submission for the respondent that there is not unfairness to the applicant such as would preclude me from proceeding to decide the three matters listed this morning on the basis of written submissions presently before me. I am particularly led to that conclusion by the fact that, if there is an absence of written submission in any of them on behalf of the applicant, it is because of a failure by the applicant, and not because of the late arising on 8 September 2004 of a conflict of interest for his solicitors. Accordingly, I propose to proceed in that way. 15 Upon judgment being delivered in relation to each of those three matters, I will make directions to re-list the proceeding, or to carry it forward expeditiously as possible in the circumstances. 16 In the meantime, a copy of these reasons will be delivered to the applicant, and should the applicant obtain legal representation, notice of that should be given to the Court and those representatives will be heard at the directions hearing which will arise following the delivery of reasons in these three reserved matters. I now reserve each of the three matters for interlocutory judgment. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.