FEDERAL COURT OF AUSTRALIA

Zaghloul v Woodside Energy Limited (No 6) [2017] FCA 1504

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application dated 18 September 2017 be dismissed.

2.    The applicant pay the costs of Ashurst Australia fixed at $10,000 to be paid forthwith.

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

REASONS FOR JUDGMENT

GILMOUR J:

1    The applicant, Dr Zaghloul, seeks to restrain the respondent’s solicitors, Ashurst Australia (Ashurst), and Mr John Blackburn SC from acting or continuing to act for the respondent, in any proceeding in which Dr Zaghloul is a party. I have treated this, relevantly, as referable to this proceeding only. On 14 November 2017, I gave Ashurst leave to appear and be separately represented in opposition to the restraint application. Mr Blackburn did not appear before me at the directions hearing of 14 November 2017. However, at the hearing of the restraint application on 4 December 2017, I was advised by counsel for Ashurst that Mr Blackburn was content to abide by my decision in regard to the application.

2    I have concluded that the application is wholly devoid of merit. Dr Zaghloul has made allegations against both Ashurst and Mr Blackburn which are very serious. Shortly put, he submits that they have engaged in conduct to knowingly mislead the Court both in the respondent’s pleaded defence and in affidavits, as well as failing to bring relevant authorities to the attention of the Court or by selectively quoting from authority.

3    There is not a scintilla of material to support these allegations. The material before me discloses that, at every turn, both Ashurst and Mr Blackburn have displayed high standards of legal competence and integrity.

4    Dr Zaghloul’s submissions betrayed a lack of understanding as to the role played by pleadings and legal argument. Worse, however, some of his submissions misrepresented the position as to what issues had been before the Court earlier in these proceedings as well as the position taken in relation to them by the respondent through its lawyers.

Legal principles

5    The generally applicable principles were not in issue. It is convenient to set out part of what was stated by Pagone J in Finch v The Heat Group Pty Ltd (No 2) [2016] FCA 791 at [9]-[10]:

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 truest 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.

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.

6    I will deal, in turn, with the several submissions exposed by Dr Zaghloul’s written and oral submissions concerning:

(1)    The respondent’s pleaded defence (Defence);

(2)    The interlocutory application; and

(3)    Section 60 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act).

The Defence

7    Dr Zaghloul submits that there are contradictions as between the Defence and the witness statements, contained in what is described as the Meridian Report concerning the following allegations made in his statement of claim that:

(1)    Dr Zaghloul suffered a psychiatric injury, was hospitalised and was prescribed medication; and

(2)    Dr Zaghloul was ‘subjected to shouting; excluded from meetings; had [his] opinion discredited, placed on performance improvement plan with no warning; and was removed from the Technical Authority role with no discussion or agreement; Woodside filed to implement its policies, particularly the performance management policies to rate [his] performance’.

8    As Dr Zaghloul put it, the concern in these denials is that it gives the Court the misleading impression that the allegations are unfounded. He added that ‘the lawyers’ failed to correct the false denial of the psychiatric injury in the Defence even after the respondent accepted liability for the psychiatric injury on 31 January 2013.

9    This submission concerns [39(a)] and [40(b)] of the Defence. These paragraphs respond to paragraphs [39] and [40] of the Statement of Claim, respectively, which provide:

[39]    By reason of the respondent’s failure to administer and apply its policies guidelines, Code of Conduct and policies with care, in good faith and in a fair and non-discriminatory manner the applicant has suffered mental harm and consequential physical injury.

[40]    During the period August 2009 to April 2011 the applicant has been subjected to harassment, intimidation and bullying by the respondent’s employees and by reason of that conduct he has suffered a mental injury with consequential physical injury.

10    Paragraphs [39(a)] and [40(b)] of the Defence are each in the same terms:

[39](a)    does not admit because it does not know whether the Applicant has suffered a mental injury with or without consequential physical injury;

[40](b)    does not admit because it does not know whether the Applicant has suffered a mental injury with or without consequential physical injury.

11    Immediately, it may be seen that there was no denial of Dr Zaghloul’s allegation but rather a non-admission. Dr Zaghloul nonetheless submitted that the lawyers knew that he had suffered a mental injury because there was medical evidence, then in existence, to the effect that he had suffered a mental injury. However two observations may be made. First, the allegation is two-fold: mental harm/injury with consequential physical injury. It is by no means clear just what these joint allegations are intended to convey. Second, even assuming that Dr Zaghloul did suffer relevant mental injury, with or without physical injury, the respondent is entitled to contest the fact, or assuming the fact, then the particular characteristics and extent of such alleged injuries. The so-called Meridian Report contains one set of opinions, which the respondent, through its lawyers is entitled to contest. These are matters in issue and which will be the subject of expert medical opinion on both sides and which, no doubt, will be tested at trial.

12    Dr Zaghloul’s submissions are conceptually flawed and provide no basis for the serious allegations directed against Ashurst and Mr Blackburn.

The interlocutory applications

13    Dr Zaghloul submitted that the respondents:

(a)    relied upon s 93K(4)(c) of Workers Compensation and Injury Management (WCIM) Act 1981 (WA) (Compensation Act) as it stood post-October 2011 amendments, and did not inform the Court that the pre-October 2011 applied to his case;

(b)    posited an interpretation of the word ‘within’ that assisted the employer's defence without informing the Court that authorities held that a beneficial construction in favour of the injured worker was to be given in case of ambiguity in the language, and that a worker's common law rights could not be taken away in the absence of clear words expressing Parliament's intent to do so;

(c)    relied upon s 60(2) in the Bankruptcy Act which did not apply to a personal injury claim, and the lawyers did not inform the Court of s 60(4) that applied to his case; and

(d)    deployed the use of a ‘plainly wrong’ argument at first instance and on Appeal contrary to the authorities that held such an argument was inapplicable in a case such as this.

14    He then submitted that had any of these submissions been successful, then the entire proceeding would have been brought to an end ‘by the lawyer’s dishonest and unfair means’.

The 93K(4)(c) submission

15    This relates to two summary judgment applications made by the respondent. The effect of the submission is that in respect to the first application the respondent relied upon s 93K of the Compensation Act as it stood following amendments made to this provision in October 2011. Dr Zaghloul submitted this should never have been advanced by the respondent as the ‘law was clear that it was the pre-2011 legislation which applied’. Then he submitted that the respondent had argued that even if the pre-2011 position prevailed then it was not to be construed in the way Dr Zaghloul submitted.

16    It is instructive to set out the respondent’s written submission in relation to the summary judgment applications as they concerned s 93K as well as part of an affidavit filed on behalf of the respondent.

17    The respondent’s amended outline of submissions dated 22 April 2013 contained the following:

[20]    Section 93K(4) of the Compensation Act (also in Division 2) relevantly provides that:

Damages in respect of an injury can only be awarded if –

(a)    The worker elects, in the manner prescribed in the regulations, to retain the right to seek the damages; and

(b)    The Director registers the election in accordance with the regulations; and

(c)    Court proceedings seeking the damages are commenced after the Director gives the worker written notice that the Director has registered the election; …

[Emphasis in original]

[21]    Section 93K(4)(c) in its present form was inserted into the Compensation Act by the Workers Compensation and Injury Management Amendment Act 2011. The amendment commenced on 1 October 2011.

[22]    Regulation 22 of the Workers Compensation and Injury management Regulations 1982 provides that:

(1)    An election under section 93K(4)(a) of the Act is made by completing an election form in the form of Form 34 in Appendix 1 and lodging it with the Director.

(2)    Unless under sub regulation (3) the Director refuses to register the election, the Director is to –

(a)    register the election in a register kept for that purpose on the day on which the Director receives the election form; and

(b)    complete the relevant section of the election form and give a copy of it to the worker and the employer.

(3)    The Director may refuse to register the election if not satisfied that the worker has been properly advised of the consequences of the election.

[23]    The applicant claims to have suffered mental and physical injury as a result of bullying and harassment by the respondent’s employees. There is no doubt that such an injury would be one in respect of which compensation is payable under the Compensation Act.

[24]    Further, the applicant has made a claim for weekly payments and medical expenses under the Compensation Act in respect of his injuries, that claim has been accepted by the respondent (who is a self-insurer) under the Act and the applicant has been paid compensation up to the Prescribed Amount: see Young Affidavit annexure JEY-6.

[25]    Accordingly Division 2 of the Compensation Act applies to the awarding of damages against the respondent independently of the Act in respect of an injury suffered by the applicant if it was caused by the respondent’s negligence or other tort. Further, Division 2 applies even if the damages resulting from the respondent’s negligence or other tort are sought to be recovered in an action of breach of contract or other action.

[26]    The result is that sections 93C and 93K(4) apply to prevent the Court awarding damages for an injury as defined in the Act unless court proceedings seeking the damages are commenced after the Director gives the worker written notice that the Director has registered the election.

[27]    The requirement for an election to be made before commencing proceedings appears from the plain words of the section.

[28]    That that is the effect of section 93K(4)(c) is confirmed by the parliamentary debate leading to the passage of the provision through the Legislative Council. In the Committee stage a motion was put to remove proposed section 93K(4)(c). In response to a suggestion that proposed section 93K(4)(c) imposed an “artificial constraint” on workers commencing court proceedings, the Minister for Commerce (in charge of the Bill) said (Hansard, Legislative Council, 17 August 2011, pp 5982-5983):

The member’s question was: is there not another artificial constraint in section 93K, which the member described? That is not an artificial constraint or a pointless exercise; it is the whole point of some very significant charges made to this system around 2004. The system was made better about that time and it is working well. That aspect is to introduce the factor of having to make an election and register that election before someone can exercise the option to commence common law court action. That is the whole point. Therefore, it is not a superfluous little detail; it is the whole point of how we have been operating and it is an important point. Although I acknowledge the points that have been made about other reasons why we might seek to amend this particular section, it is such a fundamental part of the current system that I am not prepared to entertain doing away with that aspect of election and registration before taking court action….

[29]    Section 93K(4)(c) in its present form has yet to be judicially considered. However in Austin v St John of God Health Care Inc [2012] WADC 167, Hewitt DR in considering a summary judgment application, in similar circumstances to the present save that I fell to be considered under the section as it stood prior to October 2011, said at [12]-[13]:

[12]     The case advanced by the defendant is that irrespective of whether the pre or post-action version of the Worker’s Compensation and Injury Management Act applies, the plaintiff has failed to satisfy the necessary precondition to be entitled to an award of damages, that the situation cannot be retrospectively cured, and that her action is thereby doomed by virtue of the fact that the court will be precluded from awarding any damages to her.

[13]     There is no doubt that under the current incarnation of s 93K(4)(c), were it to apply, the plaintiff’s case would not be tenable. There is however authority to suggest that a cause of action, vested in a plaintiff, cannot be abrogated, save by the clearest words within the legislation expressing parliament’s intention to do so: Dossett v TKJ Nominees Pty Ltd (2003) 202 ALR 428; (2003) 218 CLR 1. On that authority I conclude that if the plaintiff’s action was sustainable at the time she commenced it, nothing in the amending legislation would have defeated the claim and I therefore intend to restrict my analysis to the Act as it existed when the writ was filed.

[30]    The applicant commenced the proceedings on 27 August 2012. The applicant did not make an election in accordance with section 93K(4)(a) until on or about 25 February 2013: Young Affidavit of [17] and JEY-7.

[31]    Accordingly:

(a)    by reason of section 93K(4)(c) the Court cannot award damages to the applicant in tort or contract for mental or physical injury; and

(b)    to that extent, the applicant’s claim has no reasonable prospects of success and is therefore also an abuse of the process of the Court.

[32]    The respondent seeks summary judgment and an order dismissing those parts of the claim in which the applicant seeks damages in tort and contract for mental and physical injury.

18    Following a decision by the Western Australian Court of Appeal in St John of God Health Care v Austin [2014] WASCA 11, the respondent applied for leave to discontinue the first summary judgment application.

19    It relied upon the affidavit of Mrs Jacqueline Young affirmed on 9 May 2014. Paragraphs 19-31 state:

[19]    On 14 January 2014 the Court of Appeal of the Supreme Court of Western Australia handed down its decision in St John of God Health Care v Austin [2014] WASCA 11 (Austin).

[20]    The decision in Austin considered the effect of section 93K(4)(c) of the Workers Compensation and Injury Management Act 1981 (WA) (Compensation Act) as in force prior to 1 October 2011 when it was amended by the Workers Compensation and Injury Management Amendment Act 2011 (Amendment Act).

[21]    If, as the applicant alleges, he was injured in or about April 2011 (see paragraphs 27 and 42 of the SOC and annexures JEY-5 and JEU-7 to my affidavit sworn on 16 April 2013 and filed in the Proceeding), the applicant’s common law right to recover damages may have accrued at that time so that, by reason of paragraph 37(1)(c) of the Interpretation Act 1984 (WA), the applicant may have an accrued right to pursue his claim for common law damages for personal injury in accordance with the Compensation Act as in force at that time: see Barminco Investments Pty Ltd v O’Brien [2006] WASCA 88 at [10]-[35] and [75]-[85], particularly at [32]-[33] and [77]-[78].

[22]    At the time of swearing my affidavit dated 2 May 2014 I was not aware of the decision in Barminco or that, notwithstanding the wording of section 93K(4)(c) of the Compensation Act, the applicant may have an accrued right to pursue his claim for common law damages for personal injury, other than in compliance with the Compensation Act as in force from 1 October 2011.

[23]    Prior to 1 October 2011, section 93K(4) of the Compensation Act provided:

Damages in respect of an injury can only be awarded if –

(a)    the worker elects, in the manner prescribed in the regulations, to retain the right to seek the damages; and

(b)    the director registers the election in accordance with the regulations; and

(c)    court proceedings seeking the damages are commenced within –

(i)    the period of 30 days after the Director gives the worker written notice that the Director has registered the election; or

(ii)    any further time provided for in the regulations to allow for things to be done before court proceedings are commenced; and

(d)    the court is satisfied that the worker’s degree of permanent whole of person impairment is at least 15%.

[24]    Section 93K(4)(c) has since been amended to omit the words “within” and “the period of 30 days”, so that it now simply requires that court proceedings seeking damages “are commenced after the Director gives the worker written notice that the Director has registered the election”.

[25]    The Court of Appeal in Austin held, by a majority, that the word “within” in the section meant “not later than” so that, provided a worker made an election and the Director gave the worker notice of the registration of the election, and the worker commenced proceedings before the end of 30 days after the Director gave notice and before judgment in proceedings commenced by the worker, the section would have been complied with. The majority did not consider the section required a worker to make an election and to have that election registered before commencing proceedings.

[26]    The applicant commenced the current proceeding on 27 August 2012. I refer to my affidavit sworn on 16 April 2013 and filed in the Proceeding. I am aware from the documents annexed to that affidavit at JEY-5 and JEY-7 that the applicant first made a claim under the Compensation Act on 5 December 2012, submitted a Form 34 – Election to Retain Right to Seek Damages dated 9 February 2013 which was received by the Director on 20 February 2013, and that the Director notified the applicant that she had registered his election on 25 February 2013.

[27]    If the majority decision in Austin is correct, and if the applicant does have an accrued right to pursue his claim for common law damages for personal injury in accordance with the Compensation Act as in force prior to 1 October 2011, then the applicant has satisfied section 93K(4)(c), as in force prior to 1 October 2011, because he commenced the current proceeding before the end of 30 days after the Director gave him notice that she had registered his election.

[28]    The respondent however considers:

(a)    firstly, that it is arguable that the right which the applicant had prior to 1 October 2011 was a qualified right to claim common law damages in accordance with and subject to the Compensation Act as in force at that time and that because the applicant did not take any steps to avail himself of that right prior to 1 October 2011 his claim is to be dealt with in accordance with and subject to the Compensation Act as in force after 1 October 2011: see Dossett v TKJ Nominees Pty Ltd (2003) 218 CLR 1 at [30] citing Toolan v Metropolitan Perth Passenger Transport Trust (2001) 25 WAR 1 at 17. If that is right then section 93K(4) of the Compensation Act as in force after 1 October 2011 requires a worker to make an election prior to commencing court proceedings in order for the court to be able to award common law damages for personal injury (other than exemplary or punitive damages). The proposition that the failure to make an election is a mere procedural defect which can somehow be retrospectively cured did not find favour with the Court of Appeal in Austin: [2014] WASCA 11 at [12] and [48]-[50]; and

(b)    in any event, and with respect, that the majority decision in Austin is wrong and the dissenting judgment of Newnes JA is to be preferred for the reasons which his Honour gives. Newnes JA said at [33] that in his opinion:

“the words ‘within the period of 30 days’ clearly mean that the proceedings must be commenced within the 30 day period immediately after the worker is given notice of the registration of his or her election”.

[30]    If the majority decision in Austin is wrong, then even if the applicant is entitled to have his common law damages claim dealt with in accordance with the Compensation Act as in force at the time that he sustained his injury, section 93K(4) of the Act as then in force required a worker to make an election and to have that election registered before commencing proceedings in order for the court to be able to award common law damages for personal injury (other than exemplary or punitive damages).

[31]    The respondent therefore seeks to have the question of which version of the Compensation Act applies and whether the Court can award damages in tort or contract in respect of mental or physical injury suffered by the applicant heard and determined as a separate (preliminary) question pursuant to Rule 30.01 of the FCRs (the proposed separate question).

20    The respondent then made a second application for summary judgment and made written submissions concerning s 93K essentially repeating what had been said by Ms Young in her affidavit.

21    Dr Zaghloul made the following submissions which I have set out without correction:

[27]    The lawyers did not inform the Court that amendment of s 93K(4)(c) of WCIM Act, enacted in October 2011 and replaced the word “within” to “after”, was highly significant to my case. Further, the lawyers emphasised the word “after” in all submissions and affidavits. Had the case been determined on the basis of the word “after”, the entire proceeding would have dissolved to the detriment of the due administration of justice.

[28]    When the significance of the October 2011 amendment of s 93K(4)(c) of WCIM Act came to light, the lawyers disputed that I had an accrued right to have my case determined on the basis of the word “within” in the pre-October 2011 amendment of WCIM Act, or submitted that damages would be denied irrespective of which amendment to be used. Both submissions were contrary to authorities and statute.

[29]    The lawyers’ asserted, without providing any authority, that the registration of the election to seek Common Law damages pursuant to s 93K(4)(c) of WCIM Act was substantiate and not procedural. The weight of authorities was to the contrary. The courts disposed not to treat matters or facts as being substantive unless the intention of Parliament to ascribe that characteristic to them is clearly expressed.

22    These submissions have no substance. As Ms Young’s affidavit makes clear the first interlocutory application was withdrawn following the decision in Austin. She also deposed that she had not previously been aware of the decision of the Court of Appeal in Barminco Investments Pty Ltd v O’Brien [2006] WASCA 88.

23    Ms Young, deposed to what is in her [25]-[31] as set out under [22] above. It cannot be said that these arguments were ‘contrary to authorities and statute’ as Dr Zaghloul would have it. These were tenable arguments. There was nothing remotely misleading about any of them. They were clearly and openly articulated. It was upon these arguments that the respondent sought summary judgment in its favour.

24    In Zaghloul v Woodside Energy Ltd (No 5) [2014] FCA 1042 I dismissed the respondent’s application for summary judgment. I dealt with the complex issues concerning s 93K between [82]-[121] concluding that, the respondents submissions were persuasive. Nonetheless, I was not prepared to conclude that the majority in Austin were clearly wrong and accordingly I followed that judgment.

25    Indeed on appeal, the Full Court observed that whilst the view of Newnes JA in Austin could be criticised in some respects, nonetheless there was much to be said of (his Honour’s) alternative view, but affirmed my conclusion that it could not be said that the majority in Austin was “plainly wrong”: Woodside Petroleum Ltd v Zaghloul [2015] FCAFC 135 at [29] and [40]. As I earlier mentioned, Dr Zaghloul’s submission was that the law in relation to the s 93K issues was clear. That is not so. The position was far from clear. The respondent by its lawyers responsibly applied to discontinue the first interlocutory application following the judgment of the Court of Appeal in Austin. Its lawyers, again, responsibly and professionally advanced arguments in support of the second interlocutory application. They were not, contrary to Dr Zaghloul’s submission, reckless in so doing as being indifferent to the truth or falsity of the pleaded defence. There is no substance to these serious allegations made by Dr Zaghloul.

26    Dr Zaghloul’s submission that the lawyers ought to have raised authorities such as Adco Constructions Pty Ltd v Goudappel [2014] HCA 18 per French CJ, Crennan, Keifel and Keane JJ at [28]-[29]; s 18 of the Interpretation Act 1984 (WA) and Bird v Commonwealth of Australia (1988) 78 ALR 469, does not affect this conclusion.

Section 60 of the Bankruptcy Act

27    It is not entirely clear what is Dr Zaghloul’s submission on this point. His written submissions throw no light on the matter. In oral submissions he said that:

The lawyers put in (section) 62 and I did not know what the Bankruptcy Act ….. I was in Egypt at the time. I was very ill…..I found out that subsection (4) negates the defence.

28    He then submitted in effect that no reasonable person (lawyer) familiar with the Bankruptcy Act and the Legal Profession Conduct Rules 2010 (WA) and the Western Australian Barristers’ Rules would have raised this defence. He then explained that the lawyers had applied for summary judgment based on an assertion that he did not have a claim for damages for personal injury because of s 60(2). He said the applicable section was actually s 116(2)(g)(i).

29    The thrust of the submissions was that a claim for summary judgment based on the fact that he was a Bankrupt was bound to fail because it ignored the fact that his claim was for damages for personal injuries which is an exception under s 60(4) of the Bankruptcy Act.

30    The submissions are without foundation. Moreover they fundamentally misrepresent what actions Ashurst and Mr Blackburn took in respect to the effect under the Bankruptcy Act of Dr Zaghloul’s bankruptcy.

31    I set out, in summary, those actions at [41]-[44] in Zaghloul v Woodside Energy Ltd (No 5):

The applicant’s bankruptcy

[41]    As appears from the Young Affidavit, the applicant became bankrupt on 26 July 2013 by a sequestration order made in the Federal Circuit Court of Australia, Sydney, pursuant to the provisions of the Bankruptcy Act. David J F Lombe and Elizabeth Russell are the joint trustees of the applicant’s bankrupt estate (the Trustees).

[42]    On 7 February 2014, on behalf of the respondent, Ashurst Australia sent a letter to the Trustees notifying them of the Proceeding, referring to s 60 of the Bankruptcy Act and asking that the Trustees elect in writing whether to prosecute or discontinue the Proceeding to the extent that the Proceeding was in respect of claims which did not fall within the exemption in s 60(4) of the Bankruptcy Act.

[43]    On 12 February 2014 Ms Russell notified Ms Young, by email attaching a letter dated 10 February 2014, that pursuant to s 60(2) of the Bankruptcy Act the Trustees elected to discontinue the action. As a result of the Trustees’ election the applicant’s proceeding has been discontinued save to the extent of any claims which fall within the exception in s 60(4) of the Bankruptcy Act, that is, relevantly, save to the extent of any claims in respect of any personal injury or wrong done to the applicant.

[44]    Accordingly the respondent seeks a declaration that by reason of the election made by the Trustees on 10 February 2014, the Proceeding has been discontinued save to the extent of any claims which fall within the exception in s 60(4) of the Bankruptcy Act. I do not consider it necessary to make such a declaration. Nonetheless, there remains a question as to the extent and characterisation of the applicant’s claims for personal injury for the purposes of s 60(4). I will consider this in relation to the claims made for breach of the TPA.

32    Neither Ashurst nor Mr Blackburn attempted to mislead Dr Zaghloul or his counsel. From the outset the exception to the reach of s 60(2) of the Bankruptcy Act found in s 60(4) was the subject of express statements in correspondence from Ashurst as well as submissions put to the Court by Mr Blackburn.

Conclusion and Orders

33    I am well satisfied that a fair minded, reasonably informed member of the public, aware of the content of the pleadings and documents, such as the Meridian Report as well as contentions put by both the parties in the substantive proceedings as amended from time to time, would not conclude that the proper administration of justice required Ashurst and Mr Blackburn to be restrained from acting for the respondent in this proceeding. Dr Zaghloul has signally failed to discharge the heavy burden imposed on him to attract the extraordinary and protective intervention of this Court in the way he seeks.

34    Accordingly, the application will be dismissed.

35    Ashurst sought costs fixed at $10,000. Dr Zaghloul made no responsive submissions. I am satisfied that this account is significantly less than the costs which Ashursts will have incurred. They retained solicitors and counsel to represent them in relation to this application. They provided a considerable volume of relevant documents to assist the Court’s deliberation. The hearing of the application took almost three hours. Counsel prepared a detailed written outline of submissions in opposition to the application. These costs should be paid forthwith.

Associate:

Dated:    22 December 2017