Plaintiffs v Defendants

LEGAL PRACTITIONERS - injunction to restrain counsel from acting - jurisdiction and principles - no risk of disclosure of confidential information - no breach of duty of loyalty - not necessary to protect integrity of administration of justice - injunction refused.

1 This litigation concerns a property development project being conducted by a unit trust. The plaintiffs are the trustee company and the investors. The defendants are the promoters and the builder and their associated companies. The plaintiffs claim the return of properties and units they say were wrongly obtained, and an accounting for profits they say were wrongly taken, by the defendants.

2 One of the defendant promoters, Michael Artusa, and his company, "A" Team Diamond Headquarters Pty Ltd, contends the plaintiffs' solicitors and counsel actually acted for them in the period leading up to the commencement of the action. He says these lawyers received confidential information which they may misuse in the litigation. He and his company wish to sue the solicitors over various aspects of the advice allegedly given to them during this period.

3 Accordingly, Mr Artusa and A Team seek these two orders:

• an injunction restraining the plaintiffs from continuing to use their current solicitors and counsel

• an order giving them leave to join those solicitors as defendants to their counterclaim

4 When the matter first came on for hearing, only the application for the injunction was listed. During argument, it became clear this application was so bound up with the joinder application that both applications had to be heard together, which is what happened. I gave leave to the solicitors to be separately represented in the joinder application. The defendants other than Mr Artusa and A Team announced they did not oppose and did not want to be heard on that application.

5 A joinder application usually raises everyday procedural issues. The application in this case exposed the potential tension between two important principles: being able to choose your own solicitor and avoiding multiplicity of legal proceedings.

6 This is how the tension arises. If I were to grant leave to join the solicitors as defendants by counterclaim, the plaintiffs would probably have to get new solicitors. I will explain the legal reasons later. In any event, the plaintiffs said they would not want them to continue as they would be too distracted. Thus, in effect, their choice of solicitor - a right of some importance - would be defeated. If I were to refuse leave to join, Mr Artusa and A Team would be forced to issue a separate proceeding against the solicitors - which is their undeniable right - but this would lead to a multiplication of proceedings. The joinder application requires me to resolve these and other issues.

7 Because Kempsons would probably cease acting for the plaintiffs if leave to join were to be granted, I would not - to that extent - have to determine the injunction application. It is therefore convenient to deal with the application for leave to join Kempsons first. The injunction application in respect of the plaintiffs' counsel will have to be determined in any event.

8 Before going further, let me describe the litigation in more detail.

9 The trustee company is Main-Road Property Group Pty Ltd, the first plaintiff. The investors are some 17 in number and are the second to eighteenth plaintiffs. The promoters are Mr Artusa and Gino Pelligra and their associated companies who, with another member Mr Pelligra's family, are the defendants. Mr Pelligra is also the builder. Mr Artusa, through one of his companies, is also the project manager. The plaintiffs' solicitors are Kempsons Lawyers, a small firm of which one of the partners, Michael Beswick, has responsibility for the case.

10 The plaintiffs' statement of claim[1] alleges the promoters induced the investors to join the project by representing that the promoters would put their own money into it, which they did not do. It is alleged the promoters misused their early control of Main-Road to obtain units in the trust and ownership of the project properties without payment or entitlement. And it is alleged the promoters, without telling the investors, agreed to share the profits of building and managing the project.

11 The litigation has an unusual feature that is central to Mr Artusa's application. It was he who brought most of the investors together. They were his associates from other areas of business. He says he felt a sense of personal obligation towards them. Therefore he told the investors what he and Mr Pelligra had done, admitted his own wrongdoing and closely cooperated with the investors and their solicitors and counsel in the preparation of the legal proceeding. He even provided a comprehensive witness statement and commented extensively on senior counsel's advice. He (and his wife) also signed a deed making important admissions and a transfer of A Team's interest in the project properties back to Main-Road. Meanwhile he continued to manage the project.

12 I have recounted these facts in a manner that is favourable to Mr Artusa. The plaintiffs strongly criticise his credit and his conduct generally. For reasons that will become clear, it is neither necessary nor desirable for me to deal with those criticisms here.

13 The cooperative relationship between Mr Artusa and the investors broke down after he and A Team were served with the writ in this proceeding naming them as defendants. He now seeks leave to amend his defence and counterclaim in two significant respects.

14 The first is one I have not yet mentioned. In paragraphs 24A - 24F of the proposed amended defence and counterclaim, Mr Artusa contends the plaintiffs are estopped from proceeding against him and A Team because they secured his cooperation by promising not to pursue legal action against them. The parties agree I should proceed on the basis that leave will be granted for an amendment along these lines.

15 The second is the proposed joinder of Kempsons (not the plaintiffs' counsel). In paragraphs 125 - 143, Mr Artusa contends that Kempsons acted for him and A Team in a claim to be brought against Mr Pelligra and his companies, in various ways breached their retainer and their fiduciary duties, wrongly advised him to sign the deed and transfer, gave negligent advice and failed to take proper care of Mr Artusa's interests in other respects and engaged in misleading and deceptive conduct. Mr Artusa and A Team seek an order for compensation or damages and other relief against Kempsons.

16 That is enough description of the existing litigation. It is now time to turn to the application for joinder.

17 Rule 10.03 of the Supreme Court (General Civil Procedure) Rules 2005 allows a defendant to join a non-party as a defendant by counterclaim where the non-party could properly be sued in a separate proceeding.

18 Rule 9.02 allows two or more persons to be joined as defendants. This can be done as of right if some common question of fact or law would arise in the proceeding and the rights claimed arise out of the same transactions (par 9.02(a)). Alternatively it can be done with the leave of the Court (par 9.02(b)).

19 In the present case there are some common questions of fact and law in the existing and the proposed joined proceeding, but the rights claimed by Mr Artusa do not arise out of the same transactions. Therefore he requires leave before Kempsons can be joined.

Principles governing exercise of discretion

20 The joinder discretion is conferred by r 9.02(b) in wide and ample terms,[2] not to be cut down by restrictive interpretation,[3] and is to be exercised, like the general power of amendment,[4] by reference to considerations of procedural convenience, fairness and practicability, on a case by case basis.

21 The joinder rules originated in the procedural reforms brought about by the English Judicature Acts of the nineteenth century. Like the amendment rules,[5] the public policy of avoiding multiplicity of proceedings and promoting finality of litigation lies at their heart. Section 29(2) of the Supreme Court Act 1986 gives effect to the same policy.[6] It requires the Court to "exercise its jurisdiction to secure that, as far as possible, all matters in dispute between the parties are completely and finally determined, and all multiplicity of proceedings ... is avoided." The joinder rules have correctly been described as "a procedural mechanism for giving effect to [that] policy".[7] In the earliest days of the English reforms these rules were described as effectuating "one of the great objects of the Judicature Acts, namely, that, where there is one subject-matter out of which several disputes arise, all parties may be brought before the Court, and all those disputes may be determined at the same time without the delay and expense of several actions and trials."[8] More recently, in Australia, the joinder rules have been described as reflecting "an intention, which now receives more emphasis than in the past, to avoid where reasonably practicable a multiplicity of proceedings."[9] Therefore, when considering whether to allow joinder, one significant consideration is that multiplicity and fragmentation in litigation, which often leads to increased cost and inconvenience, and may lead to inconsistent findings or decisions of fact or law, should, if possible, be avoided.

22 From the terms and structure of the rule as a whole, we can see the discretion in paragraph (b) gives the court power to allow joinder, in appropriate cases, even where no issues of common fact or law arose and where the rights claimed did not arise out of the same transaction. Of course the discretionary barriers to such a course may be insuperable, but this has been left to the judge to determine. So too, on a case by case basis, has been the sufficiency of the connection required between the existing proceeding and the proceeding to be joined, and all the other relevant considerations. Where, however, a common issue of law or fact does arise, so that at least one of the criteria specified in the rule is satisfied, the discretion to allow joinder would more likely be exercised, depending on the other circumstances.[10]

23 On the other hand, the rule makes it equally clear the existence of a common question of fact or law does not require the discretion to be exercised in favour of joinder. The common material may be so minor as to be overborne by what is discrete. The adverse procedural consequences may make it inexpedient to join the claims.[11] For example, it may be unfair to compel a minor party with only a marginal involvement to participate in a large and costly proceeding.[12]

24 The court should take the course most conducive to the just resolution of the dispute between the parties, having regard to the desirability of reducing, as far as practicable, costs and delay in litigation.[13] If joinder will increase costs and delay without a sufficient corresponding benefit, this may be a compelling negative consideration.

25 Regard should be had to practical matters and the unfairness or prejudice that joinder may cause to any party,[14] as well as the powers of the court to manage the case so as to address or minimise such consequences,[15] which will include the specific powers in rule 9.04.[16] In some cases "there may be competing considerations of relative inconvenience and relative fairness or unfairness which need to be resolved."[17] The advantages of joinder should be identified and weighed against any disadvantages,[18] having regard not only to the impact on the parties but also to the need to efficiently use the resources of the court.[19]

26 Delay in making an application for joinder is a relevant but not a decisive consideration. Rules of procedure are not ends in themselves. As the amendment cases show, the purpose of such rules is to promote the just and efficient determination of disputes, not the punishment of parties for inadvertence.[20] In cases of delay, there should be a consideration of the explanation and the prejudice, or lack of it, that a party has or will suffer in consequence. For example, if the delay has resulted in a party being no longer able to call a necessary witness in the proceeding to be joined, this may be a reason to refuse joinder.

27 The plaintiffs in the present case went to great lengths to show how weak was Mr Artusa's case against Kempsons. They submitted this was a strong reason to refuse leave. Mr Artusa submitted this was question for trial and not for me on the application for joinder.

28 What is the relevance, if any, of the merits of, or prospects of success of, the claims to be joined?[21] We have seen the amendment rules and the joinder rules have a common purpose - the complete and final determination of controversies and the avoidance of multiplicity of proceedings. I can therefore safely examine the approach adopted in amendment cases. There the question is whether issues may be raised, not whether the claims have merit. If the proposed claims were obviously bad in law or futile, the amendment would not be allowed on this ground alone. But the court would not refuse to allow an amendment because it raised a claim that ought not to succeed, for this will be an issue at trial.[22] In New South Wales these are the principles that apply both in amendment[23] and in joinder cases.[24] This is the approach I will follow here. Therefore, beyond determining whether the claim to be joined is obviously futile or bad in law, I will not consider its merits or prospects of success.

29 I will apply these principles in the consideration of application before me that follows.

30 The plaintiffs oppose the application for joinder on these grounds:

• the claims against Kempsons are not a defence to the claims of the plaintiffs against Mr Artusa and A Team, but legally distinct

• joining the claims against Kempsons would cause increased cost and delay

• joinder would almost certainly result in Kempsons having to cease acting for the plaintiffs in the existing proceeding, so they will have to engage new solicitors, which will increase their costs

• the application for joinder comes after proceedings have been on foot for three years, which is a significant delay

• the claims proposed against Kempsons totally lack merit

32 If we focus on the elements of the causes of action and the relief claimed in the existing proceedings and the proceeding to be joined, the plaintiffs are undoubtedly correct in submitting the claims against Kempsons are distinct. If the firm is found liable for breach of retainer or fiduciary duty, for negligence or for misleading and deceptive conduct, it will be because of its legal relationship with or conduct towards Mr Artusa and A Team. If Mr Artusa and the other defendants are found liable for breach of fiduciary duty, for breach of trust or for misleading and deceptive conduct, it will be because of their distinct legal relationship with and conduct towards the plaintiffs. Mr Artusa's claims against Kempsons therefore have a different legal foundation to the plaintiffs' claims against him.

33 The distinct nature of the claims can be highlighted by comparing the estoppel defence in the existing proceeding and the counterclaim in the proceeding to be joined. In the estoppel defence, Mr Artusa does not contend Kempsons were acting for him; he assumes they were acting for the plaintiffs. In the counterclaim, he contends the opposite. But this is not a reason for refusing leave. Rule 13.07 allows a party to make an inconsistent allegation in the clear alternative, as Mr Artusa has done here, and this rule applies equally to a counterclaim.

34 While Mr Artusa's claims against Kempsons will be legally distinct from the claims brought by the plaintiffs against the defendants, the factual matrix of the former significantly overlaps with that of the latter. The area of overlap encompasses at least the engagement of Kempsons, the disclosures made by Mr Artusa, the making of the witness statement, the commentary given on senior counsel's advice, the signing of the deed and transfers and the participation of the plaintiffs, and Kempsons, in these events.

35 This overlapping factual matrix gives rise to a corresponding overlap in the factual and legal issues. In his defence in the existing proceeding, Mr Artusa contends the facts and circumstances give rise to an estoppel preventing the plaintiffs from proceeding against him and A Team. In the proceedings to be joined, Mr Artusa contends that, if these facts and circumstances bring about adverse legal consequences for him, Kempsons, in the proceeding to be joined, should be held responsible. In this way, virtually every significant event in the overlap area gives rise to a question of fact or law placed in issue by the parties in the existing proceeding on the one hand or by Mr Artusa and A Team in the proceeding to be joined on the other. Here are three specific examples:

• The engagement of Kempsons: was this by the plaintiffs alone or by them and/or Mr Artusa?

• The making of the witness statement and giving the commentary on senior counsel's advice: was Mr Artusa induced to give the statement and commentary by the plaintiffs in a way that gives rise to an estoppel or did Kempsons fail properly to protect Mr Artusa's legal interest in relation to these matters?

• The signing of the deed and the transfers: those same questions arise.

36 I therefore conclude that common questions of fact or law arise in the existing proceeding and the proceeding to be joined. The extent of the overlap is so great that it is clearly more expedient for Mr Artusa's claims against Kempsons to be joined in the proceeding in which the plaintiffs make claims against Mr Artusa and the other defendants.

37 The plaintiffs, in submissions adopted by Kempsons, made a strong case based on these considerations. They submitted:

• the proceeding is already complex and has 24 parties

• the professional negligence claim will add further practical and legal complexities

• many parties will have to sit silently by when the issues raised by the proceeding to the joined are dealt with, for they will have no interest in those issues

• joinder will generate a separate set of pleadings, and potentially difficult interlocutory issues

• the increased cost and delay will most greatly disadvantage the plaintiffs

38 There is some force in each of these points, but not enough, on balance, to require leave to be refused.

39 The proceeding is complex and there are a great number of present parties. However, the parties may be grouped into the trustee company and the investors on the one side and the promoters, the builder and their companies on the other side. The complexity and the number of parties reflects the facts and circumstances alleged to have occurred in the building project, including the disclosures made by Mr Artusa. On the view I take, the claims in the proceeding to be joined arise out of many of those facts and circumstances and thus have their origin on the same controversy. I think it would be artificial to divorce those claims from the existing proceeding.

40 The professional negligence and other claims against Kempsons involve some legal issues not currently raised. But issues relating to breach of fiduciary duty and misleading and deceptive conduct are already raised. In these respects, joinder will require no more than the application of a common body of legal principle to a different set of legal relationships, remembering that the incidents of those relationships arise out of a significantly overlapping factual matrix.

41 Joinder will involve some added delay and cost until the proceeding settles down, and perhaps even afterwards. The pleadings in the proceeding to be joined will have to catch up with those in the existing proceeding. There may be interlocutory applications. There will be a new party - Kempsons - who will be represented by its own solicitors and counsel. However, the impact of these influences on the litigation can be minimised with appropriate case and trial management.

42 I have to consider the consequences of refusing leave to join. It is clear Mr Artusa and A Team intend to sue Kempsons. To refuse leave would compel them to issue a separate proceeding. That would bring about a multiplication of proceedings, which is itself undesirable. The two proceedings would consume two streams of forensic and judicial resources, and some relevant witnesses would have to make two court appearances, when joinder would involve only one stream and one appearance.

43 The plaintiffs will suffer the most disadvantage if joinder is allowed, but I do not think it will be great enough to warrant refusing leave. The plaintiffs will not be interested in the claims made against Kempsons in the legal sense, so, at the trial, some standing by on their part is inevitable. But those claims arise in the context of the substantially overlapping factual matrix to which I have already referred, which will operate greatly to reduce the impact of this problem. Kempsons might have to stand by the most, but not likely enough to warrant leave being refused, and the court can reduce the stand by time by excusing them when possible.

44 For these reasons, on balance, I think the advantages of maintaining a single proceeding outweigh the disadvantages of some increased cost and delay.

Kempsons would have to cease acting for the plaintiffs

45 I have already noted that joining Kempsons would almost certainly lead to that firm ceasing to act for the plaintiffs in the litigation. This will deprive the plaintiffs of their right to retain the solicitors of their choice, a right that should suffer no interference without good cause.[25] They would also have to engage new solicitors, which will involve some extra costs. These are disadvantages that weigh significantly against granting leave.

46 I have to balance these disadvantages against the undesirable consequences of refusing leave which, in essence, would come from allowing the multiplication and fragmentation of proceedings, and which will also be significant. On balance I come down on the side of joinder. In this case I think I have to give priority to the public interest against the avoidance of multiplicity of proceedings. The plaintiffs can have the solicitors of their choice except Kempsons. I think their case could be carried on quite practicably by other solicitors of their choice, and without significant extra cost, especially because, for reasons I will later give, I will not make an order against the continuation of the plaintiffs' present counsel.

47 My conclusion in this regard is supported by one other significant consideration. Mr Artusa and his company have the right to issue a legal proceeding against Kempsons. This right is not affected by that firm acting for the plaintiffs. They could exercise this right by suing Kempsons in a separate proceeding if necessary. Having formulated their claim against Kempsons in the proposed counterclaim, I think they would do so if leave were to be refused. They could not be stopped from doing so because Kempsons were the plaintiffs' solicitors in the existing proceeding. If they sue Kempsons, it seems to me the firm could no more act for the plaintiffs in the existing proceeding if they were to be sued in a separate proceeding than if they were to be joined as a defendant by counterclaim in the existing proceeding. The same considerations going to the administration of justice would seem to equally apply in both instances.[26] Mr Artusa's right to have his day in court against Kempsons could never be overridden by the plaintiffs' right to retain specific solicitors of their choice. It follows that the plaintiffs' inability to keep Kempsons if leave is granted is not itself a strong reason to refuse to allow joinder.

48 The plaintiffs, supported by Kempsons, submit Mr Artusa and A Team have unacceptably delayed in applying for joinder. They say the delay is in the order of three years. They reckon that delay begins from early 2004 by which time they say Mr Artusa knew he would be sued by the plaintiffs.

49 The existing proceeding was commenced by a writ issued on 20 May 2004. Mr Artusa and A Team were not served until late October or early November of that year. This occurred only after the other defendants served a notice of contribution on them. This notice is dated 29 October 2004. The litigation has been taken up with court delays and interlocutory processes for some time. Not all of this delay has been the fault of the parties. Some time has also been taken up with unsuccessful attempts at mediation. After the last such attempt, some five months before the injunction in respect of Kempsons was sought, Mr Artusa and A Team engaged new solicitors. Their industry is reflected in the interlocutory applications made since.

50 Most recently, the plaintiffs filed and served a further amended statement of claim dated 9 August 2006. Mr Artusa and his company applied for the injunction to restrain the plaintiffs from using Kempsons in the existing proceeding by a summons issued on 10 August 2006. The plaintiffs issued an application for summary judgment of part of their claim on 14 August 2006, and this has not yet been heard. The submissions of the plaintiffs in opposition to injunction sought in respect of Kempsons were dated 11 December 2006. The application by summons to file and serve the amended defence and counterclaim and to join Kempsons as a defendant to that counterclaim was issued by Mr Artusa and his company on 21 December 2006.

51 There was exhaustive examination in argument about the extent to which, and how early, Mr Artusa must have known he would be sued by the plaintiffs. A large volume of affidavit evidence was filed on this subject. There is an evidentiary basis for concluding Mr Artusa must have so known from early 2004. The plaintiffs rely on him seeing and commenting on senior counsel's advice, which condemned his conduct, and seeing a draft of the statement of claim, which named him and A Team as defendants, both of which occurred in about February 2004. The plaintiffs strongly argued I should therefore reckon the delay to be in the order of three years.

52 But equally there is an evidentiary basis for concluding Mr Artusa thought the plaintiffs would not ultimately proceed against him, and only realised they would definitely do so after he was served with the writ. His own evidence under oath is to this precise effect.

53 To uphold the plaintiffs' submission, I would have to reject Mr Artusa's evidence outright, and in this interlocutory application. I am in no position to do so. Much of this controversy relates to strongly contested issues of merit relating to Mr Artusa's estoppel defence and counterclaim against Kempsons, as well as to the substantial attack made by the plaintiffs on Mr Artusa's credit. I can not and will not evaluate these issues, beyond saying Mr Artusa's claims in this regard are not obviously bad in law or futile and Mr Artusa's credit will be the subject of proper consideration at trial.

54 Therefore I will reckon the delay to begin from the date Mr Artusa was served with the writ to the issue of the summons seeking leave to join, a period of about two years.

55 During this entire period, Kempsons were acting for the plaintiffs and therefore are very familiar with the litigation and how they are being brought into it. I cannot see that Kempsons will suffer any serious disadvantage by reason of the delay. No material witness has become unavailable. No forensic opportunity has been missed or foregone. A very substantial number of affidavits have set out the events in issue from the point of view of the existing parties in great detail. These affidavits operate to record those events. It is therefore unlikely that the memory of any existing witness will be impaired by the delay. The issues in the proceeding to be joined are very clear and well able to be addressed by Kempsons despite the delay.

56 The plaintiffs will not be disadvantaged by the delay beyond the extent I have already considered (see above).

57 Mr Artusa and A Team delayed longer than they should have in making the application for the injunction in respect of Kempsons. There was a further delay in making the joinder application, the need for which appears to have become apparent after the plaintiffs filed their submissions in opposition to the injunction application. But the extent of the delay is not so great, and the consequences of it to the existing parties and Kempsons not So prejudicial, as to warrant the refusal of leave to join.

58 As we have seen, the issue here is whether the claims are so obviously bad in law or futile that leave to join should be refused.

59 I have already noted the lengths gone to by the plaintiffs to show Mr Artusa and A Team have a hopeless case and Mr Artusa is not a witness of credit.

60 The affidavit evidence assembled by the plaintiffs against Mr Artusa is certainly formidable. All the plaintiffs' witnesses have sworn that Mr Artusa's co-operation in formulating the plaintiffs' case against the defendants, including him, was voluntary and informed. They say Kempsons was acting for the plaintiffs, not Mr Artusa and his company, and that Kempsons (and the plaintiffs' counsel) repeatedly warned him to obtain independent legal advice, which he declined to do. Mr Beswick - the solicitor at Kempsons who had the carriage of the matter - gave oral evidence to me to this same effect. There was other oral evidence that Mr Artusa signed a written acknowledgment of these matters.

61 Yet Mr Artusa has sworn affidavits to the opposite effect. His testimony is that Kempsons were acting for him and his company as well as the investors, and were advising at every step along the way about what he should do to advance their mutual interests against Mr Pelligra senior and his companies and family. His affidavits supply a plausible - I say no more than that - factual foundation for both the estoppel defence and the several causes of action pleaded in the proposed counterclaim against Kempsons.

62 There was only limited oral evidence in this interlocutory application. With two extremely limited exceptions, there was no cross-examination of the deponents to the many affidavits. As I have stated, I am in no position to resolve the conflicts in the evidence or to determine Mr Artusa's credit. Despite the force and detail of the submissions made against the prospects of success of the proceeding to be joined, I do not conclude the claims made against Kempsons are obviously bad in law or futile.

63 For these reasons, Mr Artusa and A Team are granted leave under r 9.02(b) of the Rules to join Kempsons as a defendant by counterclaim.

64 The order allowing Kempsons to be joined makes it unnecessary to determine the application for the injunction in respect of that firm. The injunction was also sought to restrain the plaintiffs from retaining or continuing to retain their present three counsel. It is to this outstanding aspect of the injunction that I now turn.

65 The court possesses jurisdiction to restrain a party from engaging lawyers, or to restrain lawyers from acting, whether they be solicitors or barristers, on any one of these three grounds: to prevent the possible disclosure or misuse of confidential information (broadly defined) obtained by them when acting for a former client, to prevent them from acting against a former client when this would be a breach of their fiduciary duty of loyalty and to protect the integrity of the judicial process.[27]

66 As to the disclosure of confidential information, Mr Artusa has not been able to identify any information in this category possessed by the plaintiffs' counsel. The evidence does not establish even that they might have any such information. Neither does the evidence establish the counsel possess knowledge of Mr Artusa's personality or strategic thinking.[28]

67 The plaintiffs and Mr Artusa were extremely open with each other in the period running up to and immediately following the commencement of the existing proceeding. It is no exaggeration to say Mr Artusa bared his soul to the investors he admitted duping. But he did so to them personally. There is nothing confidential in what he told the one counsel he met to give a witness statement or in what the three counsel have been given by Kempsons on behalf of the plaintiffs. There is therefore no foundation for granting an injunction on this basis.

68 As to the breach of the fiduciary duty of loyalty, Mr Artusa has not be able to put forward a plausible argument that the counsel were briefed by Kempsons to advise him and A Team. The evidence in the interlocutory application overwhelmingly supports the conclusion that Kempsons briefed the counsel to advise the plaintiffs alone. The contents of the draft statement of claim and the draft memorandum of advice, as well as other documents drawn by them, are clear beyond argument in this respect. Mr Artusa does not allege in the proceeding to be joined that the counsel acted for him, only that Kempsons acted for him. There is no foundation for granting an injunction on this basis either.

69 As to the protection of the integrity of the judicial process, there is nothing in the continuation of counsel for the plaintiffs that might raise a question in this regard. The evidence does not suggest they possess confidential information belonging to, or at any time acted on behalf of, Mr Artusa or his company. It is almost inconceivable that any of the counsel may have to give evidence about any matter of relevance, let alone about a controversial matter. As I said, only one of the counsel met Mr Artusa.[29] The evidence shows this was to take, on behalf of the plaintiffs, a witness statement that Mr Artusa gave voluntarily after being warned to obtain independent legal advice. Copies of the statement have been fully disclosed between the parties personally for some time. The other two counsel - including senior counsel - have not met Mr Artusa or formed in any other way an individual relationship with him.

70 The case in this respect possesses none of the features that would convince a fair minded reasonably informed member of the public that the administration of justice required counsel to be prevented from acting.[30] There is no basis for an injunction on this third and final ground.

71 For these reasons the application of Mr Artusa and A Team for an injunction restraining the plaintiffs from retaining or continuing to retain their present counsel will be refused.

72 Defendants to a proceeding applied to join the solicitors for the plaintiffs as defendants to a counterclaim. They alleged the solicitors, in the period running up to the commencement of the proceeding, acted for them, not just the plaintiffs. They claimed the solicitors, by their words and actions towards the defendants during this period, breached their retainer and their fiduciary duty, gave negligent advice and engaged in misleading and deceptive conduct. The events from which the defendants' claims against the solicitors arose significantly overlapped with the events from which the plaintiffs' claims against them arose.

73 The defendants also applied for injunctions restraining the plaintiffs from using the solicitors and their present counsel in the proceeding.

74 If the joinder application were to be granted, the plaintiffs would need new solicitors. If it were to be refused, the defendants would have to sue the solicitors in a separate proceeding.

75 The power to join is discretionary and requires a practical balancing of the advantages and disadvantages of joinder, taking into account fairness and prejudice from the point of view of the parties, including the right to choose the lawyer of your choice, and the public interest in the avoidance of the multiplicity of proceedings.

76 I have concluded the defendants will have leave to join the solicitors. The increased cost and delay that may arise should not be significant. No party should be seriously disadvantaged. The plaintiffs have most to lose, because they will have to get new solicitors. This is an important but not a dispositive consideration. Refusing leave to join would force the defendants to issue a separate proceeding, which offends the principle against avoiding multiplicity of proceedings, and would probably lead to the withdrawal of the solicitors in any event.

77 An issue arose as to whether the merits or prospects of the success of a claim to be joined is a relevant consideration in a joinder application. I have decided it is not. If, as here, the claim is not obviously bad in law or futile, joinder should not be refused because the claim should not succeed, as this is an issue for trial.

78 Granting leave to join made it unnecessary to consider the application for an injunction in respect of the solicitors. I have refused the injunction in respect of the plaintiffs' present counsel. They were not briefed on behalf of the defendants, did not receive any information that was confidential to the defendants and their continuance to act for the plaintiffs did not raise any issue about the protection of the administration of justice.

[1] In the form of the further amended statement of claim filed pursuant to the order of Master Kings on 28 July 2006.

[2] John Cooke & Co Pty Ltd v The Commonwealth and the Central Wool Committee [1922] HCA 60; (1921-1922) 31 CLR 394, 411.

[3] Glenwood Management Group Pty Ltd v Mayo (1990) BC 9000705 per Young CJ; followed and the relevant passage set out in Newman & Ors v Hold Pty Ltd [2001] VSC 282, [3] per Mandie J.

[4] See generally Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146, 152-153; Cropper v Smith (1884) 26 Ch D 700, 710; and in the context of applications for joinder, see Toomey v Scolaro's Concrete Constructions Pty Ltd [2001] VSC 96; Commonwealth Bank v Peto (No 2) [2006] FCA 516, [56]; Birtles v Commonwealth [1960] VicRp 39; [1960] VR 247, 250.

[5] See r 36.01(1).

[6] Hyde v Grieve (1893) VLR 27, 29.

[7] Tindle v Ansett Transport Industries (Operations) Pty Ltd (1990) 21 NSWLR 492, 496; see also Williams, Civil Procedure Victoria (2000), Volume 2, 6837 (par 380.1).

[8] Montgomery v Foy [1895] 2 QB 321,324; cf Amon v Raphael Tuck and Sons Ltd [1956] 1 QB 357, 378.

[9] News Limited v Australian Rugby Football League [1996] FCA 870; (1996) 64 FCR 410, 524.

[10] Glenwood Management Group Pty Ltd v Mayo (1990) BC 9000705 per Young CJ; followed and the relevant passage set out in Newman & Ors v Hold Pty Ltd [2001] VSC 282, [3] per Mandie J.

[11] Glenwood Management Group Pty Ltd v Mayo (1990) BC 9000705 per Young CJ; followed and the relevant passage set out in Newman & Ors v Hold Pty Ltd [2001] VSC 282, [3] per Mandie J.

[12] Newman v Hold Pty Ltd [2001] VSC 282, [17].

[13] Bishop v Bridgelands Securities (1990) 25 FCR 311, 314.

[14] Ibid.

[15] Dean-Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525; (2002) 55 NSWLR 64, 74.

[16] These include the power to order that there be separate trials, that any claim be excluded, that any party be compensated by an award of costs or be relieved from attending any part of the trial in which they have no interest and that a person made a party cease to be a party on condition that they agree to be bound by the determination of the Court.

[17] Newman v Hold Pty Ltd [2001] VSC 282, [6].

[18] Dean-Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525; (2002) 55 NSWLR 64, 73.

[19] Carter v Commissioner of Taxation [2001] FCA 575; (2001) 109 FCR 215, 221.

[20] Toomey v Scolaro's Concrete Constructions Pty Ltd [2001] VSC 96; Commonwealth Bank v Peto (No 2) [2006] FCA 516, [56]; Birtles v Commonwealth [1960] VicRp 39; [1960] VR 247, 250 (Adam J held overly technical approach to a joinder rule was "out of harmony with the modern concept that litigation is no mere game of chess to be lost by one false move").

[21] I was not taken to a Victorian case deciding this point, and found none myself. In Newman v Hold Pty Ltd [2001] VSC 282, [17] Mandie J mentioned there was a "real question" about the claim against a defendant but decided against joinder because it would be unfair to compel it to participate in a large and costly proceeding when its involvement was marginal.

[22] Commonwealth v Verwayen (1990) 170 CLR 394, 456; Hall V National & General Insurance Co Ltd [1967] VicRp 41; [1967] VR 355, 367; Gimson v Victorian Workcover Authority [1995] VicRp 14; [1995] 1 VR 209, 215

[23] See Abela v Giew (1964) 81 WN (Pt 1) (NSW) 344, 345.

[24] Qantas Airways v AF Little [1981] 2 NSWLR 34, 41 per Glass JA (Samuels JA concurring); cf 56 per Mahoney JA.

[25] Grimwade v Meagher [1995] VicRp 28; [1995] 1 VR 446, 452.

[26] Ibid.

[27] Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248; (2001) 4 VR 501 (I would follow Brooking JA on the continuation of the fiduciary obligation of loyalty); Sent v John Fairfax Publishing Pty Ltd [2002] VSC 429; Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd [2006] VSC 152; Village Roadshow Ltd v Blake Dawson Waldron [2003] VSC 505; Grimwade v Meagher [1995] VicRp 28; [1995] 1 VR 446.

[28] See Yunghanns v Elfic Ltd, Victorian Supreme Court, 3 July 1998, unreported, Gillard J; World Medical Manufacturing Corporation v Phillips Ormonde and Fitzpatrick [2000] VSC 196, [124]; Village Roadshow Ltd v Blake Dawson Waldron [2003] VSC 505, [37].

[29] I do not understand this counsel will cross-examine Mr Artusa. If it is proposed that he do so, this may raise specific issues that will need to be considered. For example, would if be fair to allow counsel to cross examine someone who has, since he voluntarily gave a witness statement to the counsel, fallen out with the side who counsel continues to represent. This issue is not raised in respect of the other two counsel.

[30] Grimwade v Meagher [1995] VicRp 28; [1995] 1 VR 446, 452.