FEDERAL COURT OF AUSTRALIA

Finch v The Heat Group Pty Ltd (No 2) [2016] FCA 791

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PAGONE J:

1    A number of matters were listed for hearing on 30 May 2016 in connection with two proceedings by Ms Jo-Anne Finch in relation to orders by Jessup J made 4 March 2016 and 20 April 2016. The first proceeding concerned orders made on 4 March 2016 by Jessup J which included the transfer of a proceeding to the Federal Circuit Court of Australia: Finch v The Heat Group Pty Ltd (No 5) [2016] FCA 191. On 18 March 2016 Ms Finch commenced proceeding numbered VID 243 of 2016 for leave to appeal those orders. The second proceeding concerned orders made on 20 April 2016 by his Honour for costs in favour of the respondents: Finch v The Heat Group Pty Ltd (No 6) [2016] FCA 390. On 11 May 2016 Ms Finch commenced proceeding numbered VID 457 of 2016 for leave to appeal the costs orders and for leave to make that application out of time. Both the 18 March 2016 and the 11 May 2016 proceedings by Ms Finch came to be listed for hearing on 30 May 2016, but were adjourned on the application of Ms Finch. The first proceeding had been listed on 13 May 2016 for hearing on 30 May 2016 but the second came to be listed to be heard on that date on 25 May 2016. The adjournment was granted for the reasons given orally on 30 May 2016 being, substantially, the acceptance of her submission that it was desirable that the two proceedings be heard together but that she had not had sufficient time to prepare for a hearing on her second proceeding between 25 May 2016 (when she was informed by email on a Wednesday that it was listed to be heard on the following Monday) and 30 May 2016 (when the proceeding was listed to be heard with her first proceeding).

2    A number of other matters came to be considered and decided on 30 May 2016 including two separate applications by Ms Finch for my recusal and an application by the respondents for subpoenas to be set aside. Those applications were decided and reasons were given orally in open Court on 30 May 2016. There remained for consideration, however, an interlocutory application made by Ms Finch to restrain the legal practitioners of the respondents from continuing to act against her in proceedings which she had brought against the respondents challenging the orders of Jessup J. The application to restrain the respondents’ legal practitioners from acting against her was also heard on 30 May 2016 and Mr Goubran of counsel appeared for the legal practitioners who Ms Finch sought to restrain. My decision on the restraint application was reserved and is given with these reasons.

3    The application by Ms Finch to restrain the respondents’ legal practitioners from acting against her was first made by her in an interlocutory application dated 3 May 2016 in proceeding VID 243 of 2016 seeking interlocuto, including other orders, that:

1    Minter Ellison lawyers be restrained from acting in the proceedings.

2    Mr. Marc Felman of counsel, be restrained from acting in the proceedings.

[…]

The restraint application in VID 243 of 2016 was made by Ms Finch at a time before she had commenced her second proceeding, namely that numbered VID 457 of 2016, for leave to appeal the costs orders. However, the basis upon which Ms Finch sought the restraint of the respondents’ legal practitioners in VID 243 of 2016, if successful, would apply both to VID 243 of 2016 (the application for leave to appeal orders of Jessup J made on 4 March 2016) and to VID 457 of 2016 (the application for leave to appeal the cost orders of Jessup J made on 20 April 2016).

4    The interlocutory application which had been made by Ms Finch on 3 May 2016 to restrain Minter Ellison and Mr Felman from acting for their clients against her had been supported by an affidavit by Ms Finch dated 3 May 2016. The affidavit referred to a chronology which was filed with the affidavit. The chronology set out the factual events during the litigation which were relied upon by Ms Finch in her restraint application. Ms Finch swore in her affidavit that the events, material and facts detailed in the chronology were true and correct to the best of her knowledge and on the material available to her at the time of swearing her affidavit.

5    Ms Finch was given leave at the hearing on 30 May 2016 to file an amended interlocutory application to restrain the legal practitioners of the respondents from acting against her. It was that application in VID 243 of 2016 that was heard on 30 May 2016, being proceedings initiated by Ms Finch in the Court’s appellate jurisdiction from the orders made by Jessup J. Her amended application was dated 29 May 2016 and sought orders, including other orders, that:

1    Ms Prpich and any other legal representative from Minter Ellison lawyers, be restrained from acting in the proceeding pursuant to common law, and rules 1.31, 1.32, 1.40, 1.41, of the Federal Court Rules 2011 (Cth).

2    Mr Marc Felman of counsel, be restrained from acting in the proceedings pursuant to common law, and rules 1.31, 1.32, 1.40, 1.41 of the Federal Court Rules 2011 (Cth).

[…]

The amended application was supported by an affidavit by Ms Finch dated 27 May 2016 in much the same terms as her affidavit dated 3 May 2016. The 27 May 2016 affidavit also referred to a chronology which she had filed with the affidavit, and which set out the events during the litigation which were relied upon by Ms Finch in her restraint application. Ms Finch swore in her affidavit that the events, facts and matters, detailed in the chronology were true and correct to the best of her knowledge and on the material available to her at the time of swearing her affidavit. The amended application was also accompanied by an outline of submissions dated 29 May 2016 containing 42 paragraphs in 11 pages.

6    The submissions relied upon by Ms Finch in support of her application to restrain the respondents’ legal practitioners from continuing to act against her were expressed in strong language and alleged, amongst other things, the commission by the legal practitioners of perjury, other criminal conduct, breaches of ethical obligations and duties, an impermissible pecuniary interest in the proceedings in which they represent their clients against her, and other serious departures by legal practitioners of acceptable standards of proper professional behaviour. Paragraphs [6] to [11] of the written submissions filed by Ms Finch on 30 May are sufficient for present purposes to convey the general nature of the allegations made by Ms Finch in support of her application that the legal practitioners chosen by the respondents should be restrained from acting against her on their behalf:

Ms. Prpich’s Involvement (First Instance) – 3 May 2013 to 14 March 2014

6.    Ms. Prpich:

(a)    via sworn in affidavit perjured herself and attested to and exhibited in, three (3) documents as being the true documents relied upon in prior proceedings with the Respondents and the Applicant at the Victorian Civil and Administrative Tribunal (“the VCAT”) in support of an estoppels application;

(b)    the Applicant then, discovering the misleading representation, raised it with Ms. Prpich who denied she had done so on numerous occasions, until such time as the Applicant put forward evidence to substantiate as such, and Ms. Prpich then acknowledged the documents were not the correct documents and the correct documents should be put before the Court, and then filed two (2) out of the three (3) correct documents; however

(c)    maintaining the third document was able to be relied upon as the true document relied upon in the VCAT trial, knowingly pressed on with the application notwithstanding the document, and the main document relied upon, was misleading and deceptive.

Mr. Avallone’s Involvement (Second Instance) – 28 November 2014 to 5 February 2015

7.    Mr. Avallone (notwithstanding the above):

(a)    via sworn in affidavit perjured himself and attested to and exhibited in, the exact same three (3) documents (raised above) as being the true documents relied upon in a trial during prior proceedings with the Respondents and the Applicant at the Victorian Civil and Administrative Tribunal (“the VCAT”) in support of an abuse of process, wasted costs and a security for costs application;

(b)    the Applicant then, discovering the misleading representation for the second time, raised it with Mr. Avallone (via material in response); and

(c)    maintaining the documents were the true documents relied upon in the VCAT trial, knowingly pressed on with the application notwithstanding three (3) documents were misleading and deceptive.

Ms. Prpich’s Involvement (Second Instance) – 5 February 2015 to 20 April 2016

8.    Ms. Prpich:

(a)    then took back over the proceedings and after knowing the three (3) misleading and deceptive documents had been filed and were being relied upon again (as raised above) as they had previously been by her; and

(b)    maintaining the documents were the true documents relied upon in the VCAT trial and pressed on with the application notwithstanding knowing the three (3) documents being relied upon, were misleading and deceptive and therefore an accomplice to the fraudulent activity and having been notified in various affidavits and submissions of the Applicant to that end.

Mr. Felman’s Involvement (First and Second Instance) – 3 May 2013 to 20 April 2016

9.    Mr.Felman:

(a)    after knowing the three (3) misleading and deceptive documents had been filed and were being relied upon again (as raised above) as they had previously been;

(b)    maintaining the documents were the true documents relied upon in the VCAT trial and prepared submissions and made reference to, and relied upon, the three (3) misleading and deceptive documents, even to the point of preparing a schedule referencing these misleading documents to the Applicant’s current Statement of Claim, notwithstanding knowing the three (3) documents being relied upon, were misleading and deceptive, and therefore an accomplice to the fraudulent activity and having been notified in various affidavits and submissions of the Applicant to that end, and also questionable as to whether Mr. Felman settled the abovementioned affidavits.

Ms. Prpich, Mr. Avallone and Mr. Felman, Refusal to Correct Misleading Representations / Step Down – May 2013 to April 2016

10.    Notwithstanding the representatives had until such time as a decision was made upon the applications to take action in relation to the misleading and deceptive documents, during the applications being on foot as raised above, Ms. Prpich, Mr. Avallone and Mr. Felman, as legal representatives and officers of the Court, abandoned their duty and did not:

(a)    abandoned the applications; or

(b)    in the very least withdraw the misleading and deceptive documents and strike through any references to them in the applications; but rather

(c)    continued on with the applications and misleading the Court, including Mr. Felman relying upon the misleading and deceptive documents himself via his submissions, including drafting a schedule specifically referring to the misleading and deceptive documents; and moreover

(d)    did not step down from the proceedings in line with their duty as officers of the Court:

(i)    on the two (2) occasions the fraudulent acts occurred equating to periods in total of over two (2) years, and thus Ms. Prpich and Mr. Felman (being that they did not correct Mr. Avallone’s misrepresentations became accomplices to the fraudulent activity; and/or

(ii)    despite the Applicant’s continuous raising of issues and concerns with their conduct, including specific mentions of restraint equating to a period of over two (2) years, as raised in paragraph 4 above.

11.    Notwithstanding all officers of the Court have a duty, a barrister who realises that there is a conflict of such nature, ought to alert the bench immediately and take the action raised above, otherwise he is, by duty, supposed to withdraw from acting, irrespective of the stage of the proceeding, for the sake of not putting the Court through disrepute, and having unfair advantage against a litigant, and in particular, one in person.

(footnotes omitted)

The relevance of these allegations to the applications by Ms Finch seeking to appeal the orders of Jessup J can be seen from paragraph [12] of her submissions:

On the sworn in affidavits, Jessup J was misled and allowed the proceeding to ensue, and relied upon the schedule prepared by counsel via his submissions when striking out the Applicant’s statement of claim and orders the Applicant pay security for costs, and wasted/lost costs.

(footnotes omitted)

The written and oral submissions by Ms Finch, and the 60 page chronology referred to in her affidavit of 27 May 2016, include these, and other, allegations and claims of a serious kind against the legal practitioners retained by the respondents to act on their behalf.

7    In Dealer Support Services Pty Ltd (ACN 008 607 403) v Motor Trades Association of Victoria Ltd (ACN 008 643 561) (2014) 318 ALR 507, Beach J at [33] identified three potential bases that might justify the exercise of the Court’s jurisdiction to enjoin a solicitor from acting against a former client or to enjoin a new client from retaining such a solicitor. The restraint application by Ms Finch is not to enjoin her former solicitors from acting against her, and there may be more than three potential bases for the exercise of such jurisdiction, but one of the bases considered by his Honour in Dealer arises from the Court’s broader inherent supervisory jurisdiction to ensure the due administration of justice to protect the integrity of the judicial process: see Dealer at [37] and the cases cited therein.

8    The Court has power to restrain legal practitioners from acting against an otherwise unrelated litigant, but it is a power to be exercised in exceptional cases when clearly required for the proper administration of justice to protect the integrity of the judicial process. Grimwade v Meagher [1995] 1 VR 446 was a case in which, like that of Ms Finch, a party in litigation was seeking to restrain the lawyers retained by the opposing party from acting in the proceeding. Mandie J considered the then relevant cases and said at 452:

I would respectfully adopt all of the above quoted statements of principle. In my view it cannot be doubted that this court likewise has an inherent jurisdiction to ensure the due administration of justice and to protect the integrity of the judicial process and as part of that jurisdiction, in an appropriate case, to prevent a member of counsel appearing for a particular party in order that justice should not only be done but manifestly and undoubtedly be seen to be done. The objective test to be applied in the context of this case is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice required that counsel be so prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause.

His Honour ordered in that case that senior counsel be restrained from acting in the proceedings in what his Honour described at 454 as the “unique, extraordinary and highly exceptional circumstances” of the case before him.

9    The test to be applied in determining whether to exercise the extraordinary jurisdiction to restrain legal practitioners from acting on behalf of their clients against a party who was not a previous client is “whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required” that they be restrained: Grimwade v Meagher [1995] 1 VR 446 at 452 (emphasis added); see also Dealer at [37]. It is a high test with a heavy burden imposed upon a party making the application. The jurisdiction has been described as “extraordinary and protective” (Woodgate v Leonard [2007] NSWSC 495, [37]), of an “exceptional nature” (TJ Board & Sons Pty Ltd v Castello [2008] VSC 91, [30]) and to be applied only in a “clear” case (Bransdon v Davis & Gilbert (2007) 212 FLR 28, [70]): see also GE Dal Pont, Lawyers’ Professional Responsibility (Thomson Reuters, 5th Edition) [17.20], p538. There are many reasons for a heavy burden to be satisfied by the party making such an application. One reason is that a court should not make an order that interferes with the relation between the opposing party and that party’s chosen and trusted legal practitioners. Public confidence in the administration of justice depends in part upon litigants being able to choose who they have to represent them and in whom they place their trust and confidence. The proper administration of justice is assisted by trust and confidence existing between litigants and their legal representatives. The legal practitioner plays a crucial role in conveying the client’s case to a court for adjudication and the confidence and trust of the client in the chosen legal practitioner is an essential aspect of that role. An order restraining a legal practitioner from acting for a client interferes with that role, adversely affects the client and may unjustifiably interfere with the proper conduct of the client’s case. It may also have the effect of causing irreparable harm to the client’s case and is apt to undermine the proper administration of justice in all but the clearest cases. To restrain the legal practitioners from acting for a party in continuing proceedings may also confer an unjustifiable forensic advantage upon the party seeking the restraint.

10    The Court’s reluctance to deprive a litigant of his or her chosen legal practitioner is magnified where the question arises in the context of appeal proceedings. Restraining a legal practitioner from continuing to act for a client in appellate proceedings deprives the client of the legal practitioner in the appellate proceeding with the knowledge of the case and of how it was conducted. Preventing the legal practitioner from continuing to act in the appellate proceeding would necessarily expose the client to increased costs and it would deprive the appellate court of the direct assistance of the legal practitioners best placed to assist the Court in the appellate proceedings with questions arising about the trial and of how it was conducted. To restrain a legal practitioner from continuing to act for a client in the appellate jurisdiction of a court is, therefore, apt to impede the proper administration of justice and to harm the integrity of the judicial process rather than to protect it.

11    The inherent jurisdiction to restrain legal practitioners to act for their clients against an otherwise unrelated third party is not a substitute for disciplinary proceedings for wrongdoing by the legal practitioners or a substitute for punishment of the lawyers for the commission of wrongful conduct. It is a jurisdiction which exists to ensure that the integrity of the proceeding is maintained, and the court’s concern when considering whether to exercise that extraordinary jurisdiction is whether it is required for the due and proper administration of justice in a proceeding: Woodgate v Leonard at [37]. For present purposes it is not necessary, and it would be undesirable, to consider whether there is substance in any of the serious allegations which have been made by Ms Finch against the legal practitioners whom she seeks to restrain from acting against her. Some of the allegations could be put to one side on the basis that Ms Finch alleged the commission of crimes and misconduct which have not been established in appropriate proceedings in courts of competent jurisdiction by reference to the laws, standards and burdens relevant to those allegations. However, the point is not whether any of the claims are made out, but whether it is required for the proper administration of justice to preserve the integrity of the judicial process in question that the Court restrain the legal practitioners chosen by the respondents to act on their behalf against Ms Finch in proceedings commenced by her in the appellate jurisdiction of this Court.

12    The fact that the restraint application by Ms Finch is made in this Court’s appellate jurisdiction is relevant to whether the interlocutory orders she seeks should be made. Barrett J explained in Woodgate v Leonard at [37] that the means needed to maintain the integrity of the proceeding will depend on the nature of the proceeding and its likely course. The facts and circumstances of the proceedings in which Ms Finch seeks to restrain the respondents’ legal practitioners are quite different from those in Grimwade v Meagher. That case concerned a trial at first instance, in the context of a long and complex background, with the possibility that the lawyer sought to be restrained might unconsciously use confidential information which had not been available to that lawyer’s client; the current proceedings, in contrast, are in the appellate jurisdiction of the Court, are between the same parties as at first instance, they involve narrow questions, and those sought to be restrained do not have information which is confidential to them as against their clients. A fair-minded and reasonably informed member of the public would not conclude that the proper administration of justice required restraining the respondents’ legal practitioners from continuing to act for their clients against Ms Finch in proceedings in the appellate jurisdiction of the Court on an appeal involving the same parties in which the legal practitioners had previously acted for their clients against the person who had initiated both the proceedings in the appellate jurisdiction of the Court and the application to restrain the legal practitioners from acting for their clients.

13    It is, perhaps, understandable that Ms Finch, an unrepresented and non-legally qualified litigant, might feel aggrieved by the conduct of the legal practitioners who have acted for their clients against her in her litigation with the respondents over a number of years. It is an inevitable consequence of disputes that parties may sometimes feel wronged by the course of conduct in adversarial proceedings and may blame the legal practitioners for the opposing parties as the cause of the wrong. There have also been in this dispute, as the respondents’ legal practitioners conceded, some errors made by them in the past during the course of the proceedings between their clients and Ms Finch which, however, they believe they have sought to correct. It may even be accepted that Ms Finch has a genuinely held subjective belief about the many strongly worded allegations that she has made against the legal practitioners who the respondents have continued to retain to act against her. But it is not necessary to ensure the proper administration of justice, to protect the integrity of the judicial process in question, to restrain the legal practitioners from acting for the respondents who continue to retain them to act for them in her proceedings in the appellate jurisdiction of the Court. A fair-minded reasonably informed member of the public would objectively take into account the nature of the proceedings to be heard, as being in the appellate jurisdiction of the Court, in respect of which Ms Finch seeks to restrain the legal practitioners acting for the respondents. Such an observer would objectively take into consideration that the Court’s inherent jurisdiction to restrain practitioners at the suit of an opposing party is not a substitute for disciplinary, criminal or other proceedings against the legal practitioners but is to protect the integrity of the judicial process which, for present purposes, involves proceedings by Ms Finch in the appellate jurisdiction in relation to orders made by Jessup J. A fair-minded reasonably informed observer would take into account that restraining the legal practitioners from acting for their clients would deny the respondents the right to have their chosen and trusted legal practitioners acting for them and might fundamentally jeopardise the proper conduct of their case against Ms Finch, that it would deprive the Court from having the direct assistance in its appellate jurisdiction of the legal practitioners who are best placed and best informed to assist the Court on behalf of the respondents about the facts and conduct of the proceedings sought to be appealed from, and, potentially, that the restraint sought might confer upon Ms Finch a forensic advantage to which she is not entitled.

14    Accordingly, the interlocutory application to restrain the legal practitioners will be dismissed.

Associate:

Dated:    7 July 2016

SCHEDULE OF PARTIES