Federal Court of Australia

Puxty v Monarch Advisory Group Pty Ltd [2022] FCA 153

ORDERS

THE COURT ORDERS THAT:

1.    Time in which to seek leave to appeal is extended.

2.    Leave to appeal is refused.

3.    Unless a party applies within 7 days for a different order as to costs, the applicant pay the respondent’s costs.

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

REASONS FOR JUDGMENT

THAWLEY J:

INTRODUCTION

1    Mr Brett James Puxty applied for an extension of time and leave to appeal from orders made by the primary judge on 16 July 2021, dismissing an interlocutory application: Monarch Advisory Group Pty Ltd v Puxty (No 2) [2021] FCA 801 (“Monarch (No 2)”). The parties filed written submissions in respect of Mr Puxty’s application for an extension of time and leave to appeal and consented to the application being determined on the papers.

2    On 21 January 2022, the Court made orders extending the time in which to seek leave to appeal and dismissing the application for leave to appeal. Reasons for making those orders were published. Those orders were entered the same day.

3    Shortly before a case management hearing on 3 February 2022, it became apparent that the reasons for judgment contained a factual error about one aspect of the submissions advanced on behalf of Mr Puxty. The Court took the preliminary view that it was in the interests of justice for the orders to be set aside and the reasons revoked and raised the issue at the case management hearing. The reasons for this view were, in summary:

(1)    first, if the orders were not set aside, it would work an unfairness to Mr Puxty by leaving one aspect of his case for leave to appeal inadequately addressed in circumstances where there was no right of appeal from the dismissal of the application for leave to appeal;

(2)    secondly, the factual error about the submissions advanced for Mr Puxty would have worked an unfairness on Mr Puxty’s legal representatives by suggesting that they had persisted with a submission, which should have been abandoned, when in fact they had not persisted with it.

4    Mr Puxty consented to the course proposed by the Court. The respondent neither consented to nor opposed that course being taken. The Court made an order under r 39.05(c) of the Federal Court Rules 2011 (Cth) setting aside the orders made on 21 January 2022 and an order revoking the reasons. Rule 39.05(c) permits any interlocutory order to be set aside after it has been entered. The orders extending time and refusing leave to appeal were interlocutory within the meaning of that rule.

5    The balance of these reasons addresses Mr Puxty’s interlocutory application for an extension of time in which to seek leave to appeal from the primary judge’s decision.

6    The decision the subject of Mr Puxty’s application was an interlocutory decision made by the primary judge, dismissing an application made by the respondents (Mr Puxty, Mr Francis Coggan and Odyssey Advisory Services Pty Ltd) for an order “removing and or barring” Monarch’s lawyers, Madison Marcus Law Firm Pty Ltd, from acting for the applicant (Monarch Advisory Group Pty Ltd) in the proceeding. The grounds for that application included:

    first, the asserted risk of misuse of confidential information said to have been provided by Mr Puxty to Madison Marcus when that firm was retained to act for him and Monarch; and

    secondly, to protect the due administration of justice by preserving the integrity of the judicial process in circumstances where it was alleged that Madison Marcus had previously acted for Mr Puxty and that it owed Mr Puxty an obligation of loyalty.

7    For the reasons which follow:

(1)    Mr Puxty’s application to extend time to apply for leave to appeal should be granted; and

(2)    Mr Puxty’s application for leave to appeal should be refused.

BACKGROUND

8    The background is set out in Monarch Advisory Group Pty Ltd v Puxty [2021] FCA 341 (Monarch (No 1)) at [2] to [14] and Monarch (No 2) at [3] to [35].

9    In truncated form it is as follows. Mr Puxty was employed by WiZDOM Advisory as a senior financial advisor and, before that, by AON Hewitt Australia. Mr Coggan was a senior “paraplanner” (a person who prepares Statement of Advice documents, financial modelling and other financial planning documents) employed by WiZDOM. Ms Coulter was the sole director of Monarch, which operated a financial planning business. Various directors of Madison Marcus were also directors of Consolidated Corporate Pty Ltd. These included Mr Qutami and Mr Shamieh. Consolidated acquired 50% of the shares in Monarch on 13 March 2018. In about mid 2018 Ms Coulter and Mr Puxty discussed opening a Monarch branch in Newcastle and expanding the business.

10    Ms Coulter had a number of discussions with Mr Puxty in connection with him becoming an employee of Monarch. Mr Kardum, the Group General Manager of Madison Marcus at the relevant time, was also involved in some communications. He was not a lawyer and is no longer employed by Madison Marcus.

11    Mr Puxty says that, in the context of the negotiations for him to become an employee, he disclosed confidential information about his business activities to Ms Coulter and Mr Kardum: Monarch (No 2) at [21].

12    Mr Puxty and Mr Coggan entered into an employment agreement with Monarch on about 20 December 2018. Mr Puxty and Mr Coggan resigned from their employment with Monarch on about 17 January 2020. Odyssey (the third respondent) was incorporated by Mr Puxty in about September 2019 and now operates a financial services business.

13    Monarch commenced proceedings against Mr Puxty, Mr Coggan and Odyssey on 27 August 2020. Monarch alleges that:

(1)    Mr Puxty and Mr Coggan breached various provisions of their respective employment agreements including, among others, in relation to restraint of trade and confidentiality;

(2)    Mr Puxty and Mr Coggan breached their fiduciary duties owed to Monarch and contravened s 182(1) and s 183(1) of the Corporations Act 2001 (Cth);

(3)    Odyssey was involved in the alleged breaches by Mr Puxty and Mr Coggan set out in (2) above;

(4)    the respondents made representations to clients of Monarch which were not true and, in doing so, they engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law being Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL); and

(5)    the respondents engaged in conduct which wrongly suggested a connection with the services provided by Monarch and which amounted to passing off.

14    Monarch seeks as against:

(1)    Mr Puxty and Mr Coggan, damages for breach of their respective employment agreements, pursuant to s 1317H of the Corporations Act for breach of their statutory duties and an account of profits and or equitable compensation;

(2)    Odyssey, damages pursuant to s 1317H of the Corporations Act for its involvement in Mr Puxty’s and Mr Coggan’s contraventions of s 181(1) and s 182(1) of the Corporations Act; and

(3)    the respondents, damages pursuant to s 236 of the ACL and or for passing off.

15    Mr Puxty has filed a cross-claim in which he alleges that Monarch has breached the “Termination Agreement” (as defined), failed to repay a loan of $30,000 and has made representations which were not true and which were deceptive or likely to mislead within the meaning of s 31 of the ACL and on which he relied, and in respect of each of which Mr Puxty seeks damages.

EXTENSION OF TIME

16    Mr Puxty was 24 minutes out of time in filing his application for leave to appeal.

17    The explanation for this delay was that Mr Puxty’s solicitor erroneously thought that the deadline for filing the application was 5.00pm when it was in fact 4.30pm. Monarch did not oppose an extension of time being granted, but opposed the application for leave to appeal. It is appropriate in the circumstances to extend time within which to seek leave to appeal.

LEAVE TO APPEAL

18    The next question is whether leave to appeal should be granted. Leave is required because the primary judge’s decision was interlocutory: s 24(1A) of the Federal Court of Australia Act 1976 (Cth). As was stated in Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 at 398-399 (Sheppard, Burchett and Heerey JJ), the question of whether leave to appeal should be granted turns principally on whether:

(1)    the decision giving rise to the orders from which Mr Puxty wishes to appeal is attended with sufficient doubt to warrant its being reconsidered by a Full Court;

(2)    substantial injustice would result if leave were refused.

19    As was also stated in Décor at 399, these two issues are interrelated:

[T]he sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments. They bear upon each other, so that the degree of doubt which is sufficient in one case may be different from that required in another. Ultimately, a discretion must be exercised on what may be a fine balancing of considerations.

20    The draft notice of appeal sets out 14 proposed grounds of appeal. They are as follows:

Grounds of application

1.    The Court erred in refusing the applicant (Puxty) an opportunity to address the Court in relation to the [sic] Ms Coulter’s refusal to testify in the hearing and the inference to be drawn as a result of that refusal.

2.     The Court erred on [sic] relying on the affidavit evidence of Ms Coulter in circumstances where the affidavit was not read and there was no evidence of Ms Coulter before the Court.

3.     The Court erred in relying on the evidence of John De La Hoyde in circumstances where is [sic] affidavit was not read and there was no evidence of Mr De La [Hoyde] before the Court.

4.     The Court erred in failing to consider the inferences to be drawn where Ms Coulter failed to testify.

5.     The Court erred in holding that the evidence of Ms Coulter was unchallenged.

6.     The Court erred in not finding that the only evidence before the Court was the unchallenged evidence of Brett Puxty

7.     The Court erred in finding that the information provided by Brett Puxty to Maddison Marcus was not confidential in its nature and character

8.     The Court erred in concluding that there [was] no basis identified by the applicant, on which it is likely that any solicitor from Madison Marcus will be a potential witness.

9.    The Court erred in concluding that there was no lawyer-client relationship between Mr Puxty and Madison Marcus and in the absence of such a relationship a fair minded reasonably informed member of public would not conclude that the administration of justice required the Court to exercise its inherent jurisdiction to restrain Madison Marcus from acting for Monarch in the case.

10.     The Court erred in finding that a reasonably fair-minded member of the public would not conclude that the solicitors should be prevented from acting for the plaintiff in the interests of protecting the integrity of the judicial process including the appearance of justice.

11.     The Court erred in holding that that there was no relationship between Madison Marcus and Brett Puxty in terms of which Madison Marcus owed Brett Puxty a duty in relation to information which Puxty had provided to Madison Marcus.

12.     The Court erred in holding that there was no identified basis on which Madison Marcus solicitors could be compellable witnesses.

13.     The Court erred in accepting Ms Coulters [sic] evidence that Madison Marcus was not a party to any joint venture.

14.     The Court erred in holding that the third party Consolidated Corporate Pty Ltd received information in its capacity as a commercial participant to proposed agreements and that its officers received information in that capacity.

Grounds 1 to 6

21    In order properly to address proposed grounds 1 to 6, it is necessary to say something further about the conduct of the proceedings before the primary judge. The hearing of the interlocutory application to restrain Madison Marcus from acting commenced on 25 February 2021, together with the hearing of an interlocutory application for security for costs. The respondent read the affidavit of Ms Coulter dated 23 December 2020 and the affidavit of Mr John de la Hoyde sworn 23 December 2020 twice, once in each interlocutory application. Mr Luitingh, who appeared on both applications, instructed by Mr Stols, did not object to the affidavits being read in either application and did not seek to cross-examine either deponent. The relevant part of the transcript, when the affidavits were read in the application to restrain, is as follows:

HER HONOUR:    All right. The affidavit of John De La Hoyde, sworn 23 December 2020, is also read by Monarch Advisory in response to the application to restrain Madison Marcus from acting, and the affidavit of Tatiana Coulter, sworn 23 December 2020, is also read in that application. All right. Mr Luitingh.

MR LUITINGH:    Your Honour - - -

HER HONOUR:    I’m sorry. I should have asked if there was any objection. I assumed there wasn’t because there wasn’t when they were first read [on an interlocutory application for security for costs].

MR LUITINGH:    No, your Honour. No, no, your Honour, they’re - - -

HER HONOUR:    And no cross-examination.

MR LUITINGH:    Well - - -

HER HONOUR:    Don’t wish to apply to cross-examine, I should say.

MR LUITINGH:    Your Honour, I think we can deal with this on the papers, with respect. I think that there is enough in the affidavit of Ms Coulter to – so there will no be no application to cross-examine.

HER HONOUR:    All right. Well, you might start by explaining to me the basis of this application [to retrain Madison Marcus from acting].

22    Submissions then commenced. During the course of argument, counsel for Mr Puxty stated that the allegations his client had made were “not fully adumbrated by evidence” and that the pleading was “inadequate” and sought an adjournment. The primary judge granted an adjournment until 29 March 2021. Her Honour also made orders which included orders for the respondents to file and serve any further evidence on which they relied and a further outline of submissions setting out the precise case they put. Her Honour reserved in relation to the security for costs application. Nothing further needs to be said about that application.

23    Mr Puxty filed and served further evidence on 8 March 2021. Monarch filed two affidavits in reply, namely supplementary affidavits from Ms Coulter and Mr de la Hoyde dated 22 March 2021.

24    At the resumed hearing on 29 March 2021, counsel for Mr Puxty indicated the he sought to read the affidavit of Mr Puxty dated 8 March 2021. Counsel for Monarch stated that there were a number of objections to that affidavit and asked that the affidavits upon which his client might rely be dealt with after the close of Mr Puxty’s case because Monarch might not need to read those affidavits in its case. In this context, Monarch’s counsel indicated he wished to cross-examine Mr Puxty. Counsel for Mr Puxty stated he had no objection to following this course.

25    Extensive objections were argued by the parties and resolved by the primary judge. Mr Puxty was called and cross-examined. At the conclusion of cross-examination, counsel for Monarch stated that, if Mr Puxty’s case was closed, he did not “propose to call any witnesses”. The primary judge clarified with counsel for Monarch whether he meant that he did not wish to read any of the additional affidavits that had been filed. Counsel agreed. The parties then made submissions. In his submissions, counsel for Mr Puxty relied, amongst other things, upon the affidavit of Ms Coulter dated 23 December 2020 which had been read on 25 February 2021. However, he noted during oral submissions that Ms Coulter had “not given [oral] evidence and not given the court the benefit of her candour …”.

26    The parties proceeded at the resumed hearing on the common understanding that Ms Coulter’s affidavit of 23 December 2020 had been read and was in evidence. No application was made by counsel for Mr Puxty to cross-examine Ms Coulter.

27    At the conclusion of argument the primary judge reserved. As noted earlier, her Honour later dismissed the application to restrain Madison Marcus from acting for Monarch.

28    As this background demonstrates, grounds 1 to 6 of the proposed appeal are misconceived in a number of respects:

(1)    First, contrary to ground 2, the affidavit of Ms Coulter dated 23 December 2020 was read on the interlocutory application before the primary judge. As noted below, by the written submissions filed on his behalf on this application, Mr Puxty now accepts that the affidavit was read.

(2)    Secondly, contrary to grounds 1 and 4 Ms Coulter did not “refuse to testify”.

(3)    Thirdly, contrary to ground 5, Ms Coulter’s evidence was unchallenged in the sense that she was not cross-examined.

(4)    Fourthly, contrary to ground 1, the Court did not refuse “an opportunity to address the Court in relation to … Ms Coulter’s refusal to testify in the hearing and the inference to be drawn as a result of that refusal”. The primary judge permitted Mr Puxty’s counsel to make extensive submissions and did not prevent any opportunity, or deny any request by counsel for Mr Puxty, to address the issue identified in ground 1.

(5)    Fifthly, contrary to ground 6:

(a)    Mr Puxty’s evidence was not the only evidence before the Court. The evidence of Ms Coulter and Mr de la Hoyde was also before the Court;

(b)    Mr Puxty’s evidence was not “unchallenged”. Mr Puxty was cross-examined and aspects of his evidence were inconsistent with aspects of Ms Coulter’s affidavit of 23 December 2020.

(6)    Sixthly, contrary to ground 3, the affidavit of Mr John De La Hoyde sworn 23 December 2020 was read on the interlocutory application before the primary judge. As noted below, Mr Puxty now accepts that the affidavit was read.

29    It is difficult to see how Grounds 1 to 6 could properly be advanced. They have no prospect of success. Assessed together with the injustice which would result, leave to appeal on grounds 1 to 6 is refused.

Grounds 7, 9 and 11

30    The primary judge did not accept that Mr Puxty and Madison Marcus were at any time in a lawyer-client relationship. Her Honour stated:

51    There is no evidence of the usual indicia of a lawyer-client relationship. Mr Puxty has not tendered an engagement letter or a tax invoice rendered by Madison Marcus for legal work performed for him in drafting the Puxty Employment Agreement or any other agreement. In cross-examination he confirmed that he never received an engagement letter or tax invoice from Madison Marcus and that at no stage did Mr Qutami or Mr Shamieh provide him with legal advice. Mr Kardum is not a lawyer and so was not able to provide Mr Puxty with legal advice. In any event it is not asserted by Mr Puxty that he did so. Mr Puxty does not otherwise identify who at Madison Marcus acted for him, or the work undertaken on his behalf, beyond a broad assertion that Madison Marcus drafted agreements. He does not say who drafted those agreements, whether he gave instructions on or received advice about them and, if so, when and how he gave those instructions and/or received any advice. The only evidence he gives is that an agreement, which emanated from Madison Marcus, was provided to him by Ms Coulter.

52    On the other hand Ms Coulter’s evidence, which is not challenged, is that Madison Marcus acted for Monarch, not for Mr Puxty, and that Messrs Puxty and Coggan were given an opportunity to consider their employment agreements and sought changes to them before signing them. Nothing in Ms Coulter’s evidence suggests that those changes were sought as a result of any advice provided by Madison Marcus to Messrs Puxty and Coggan.

53    This is not case where a lawyer-client relationship arises despite there being no formal retainer agreement. There is simply no basis on which I could conclude that such a relationship existed between Mr Puxty and Madison Marcus.

31    There is no arguable error in this reasoning. The conclusion that there was no lawyer-client relationship between Mr Puxty and Madison Marcus on the evidence before the Court was not only open but irresistible.

32    The primary judge then turned to the question whether Mr Puxty had provided any confidential information to Madison Marcus. Her Honour observed that Mr Puxty had not identified the relevant confidential information with any precision: Monarch (No 2) at [54]. Her Honour noted that Mr Puxty had pointed to the information which Ms Coulter had sought in an email dated 3 October 2018. This email was in the following terms (errors in original):

Can you please email me an indication of the following:

•    staff to bring over

•    approx salaries

•    how you think the structure should look including Rex getting out at 2024 and needing a succession plan; inc getting Frances in as AR pre Jan 2019 etc

•    how long you think it will be until you/Rex will bring the funds across

•    expected ongoing remuneration

•    when you can: what yours and Rex’s client base that you can bring across, looks like. For example:

•    # of clients, approx demographic; ave time as client of yours

•    would Rex be able to bring across soft copies of SOAs?

•    indication of your expectation of leads from MAG/MM

•    your expectation of leads you can bring to MAG

•    COIs you think you can bring across (high level ie 2 x Accountant; 1 x GI etc)

•    anything else you think would be useful for the plan of attack

High level is fine

This would be helpful so I can present to MM.

Also let me know if you would have time next week for a planning day/half day etc. Understand you will be on holidays which will make it difficult.

33    Her Honour stated at [21]:

On 11 October 2018 Mr Puxty met with Ms Coulter and Mr Kardum over Zoom. Mr Puxty says that they discussed figures for the business venture and that he disclosed confidential information about his business activities using a spreadsheet via a shared screen. In the course of the meeting Mr Kardum said words to the following effect:

Where we have said that we will provide referrals of $1 million we will only need about $644,000 to achieve a value of $6 million in 5 years if a multiple of 3 is used. If the referral value is R1 million we will reach the goal sooner and have an even higher valuation at the 5-year mark.

34    Having referred to the 3 October 2018 email, her Honour stated at [54]:

… Although he has not in fact put that information before the Court, I will proceed on the basis that it was in fact provided. Other information is referred to in the written submission filed on behalf of Mr Puxty but in such broad terms that I am unable to identify it by reference to the evidence relied on by Mr Puxty.

35    Mr Puxty did not identify the confidential information he allegedly disclosed to Madison Marcus, as opposed to identifying that he provided information which he asserted was confidential. It was open to conclude (as the primary judge did) that, in his negotiations with Mr Kardum, he disclosed information about his business activities. Mr Kardum was not a lawyer and was the only person from Madison Marcus with whom Mr Puxty communicated. It is against that background that her Honour stated at [55] that she was unable to conclude that the information had the necessary characteristics to make it confidential. Her Honour’s reasons included:

55    It is then necessary to consider whether the information is confidential. On Mr Puxty’s case the information was provided to Monarch and Madison Marcus. As I have already observed, there is no evidence that the information sought by Ms Coulter in her 3 October 2018 email was in fact provided or, if such information was provided, in what form and to whom. Again, assuming in Mr Puxty’s favour that the information was provided to both Monarch and Madison Marcus, I am unable to conclude that it has the necessary characteristics to make it confidential. As there was no retainer between Mr Puxty and Madison Marcus it could not be said that a duty of confidentiality arose between those parties as a matter of contract or that the information was otherwise provided to Madison Marcus as part of a lawyer-client relationship.

56    Accepting Ms Coulter’s evidence that Madison Marcus acted for Monarch in drafting employment agreements, she was, in the absence of an express agreement for her not to do so and of which there is no evidence, entitled to share that information with her lawyers. If she did, then they received the information as the lawyers acting for Monarch and owe no duty to Mr Puxty in relation to it.

57    Mr Puxty may well have considered the information to have been commercial in confidence. Putting to one side whether Mr Puxty made clear that he was providing the information to Monarch on that basis, to the extent that Monarch shared the information with: Mr Kardum, he is not a lawyer, is a former employee of Madison Marcus and appeared to be assisting Monarch to assess the viability of opening a Newcastle office; or Mr Qutami and/or Mr Shamieh, they were directors of Consolidated, a 50% shareholder in Monarch.

36    It should also be noted that, in any event, the information was not shown to be relevant either to the claims made by Monarch or to Mr Puxty’s cross-claim. Her Honour stated:

58    … [E]ven if contrary to the conclusion I have reached Mr Puxty had established that the information was confidential, he has not articulated how the information is relevant to the claims made by Monarch or the allegations he makes in his cross-claim. It is not relied on by Monarch in its claim against the respondents. Nor could it be relevant to Mr Puxty’s cross-claim insofar as he makes claims for breach of s 18 or alternatively s 31 of the ACL which rely on representations allegedly made by Ms Coulter and Mr Kardum. The information he provided to Ms Coulter in response to her 3 October 2018 email has no role to play.

37    Assessed together with the injustice which would result if leave were refused, there is insufficient prospect of grounds 7, 9 and 11 leading to the primary judge’s order being set aside to warrant granting leave to appeal. In particular, there was no identification of confidential information sufficient to warrant making the restraining orders sought by Mr Puxty in the application to the primary judge in the circumstances. The circumstances included that the evidence did not establish that Mr Puxty and Madison Marcus were ever in a lawyer-client relationship or that, whatever the information was, it had some relevance to the claims which would need to be determined in the proceedings.

Grounds 8 and 12

38    The primary judge addressed the question of whether Madison Marcus would be a witness in the proceedings in the following way:

Will Madison Marcus solicitors be compellable witnesses

59    Mr Puxty contends that because members of Madison Marcus will be relevant and compellable witnesses in the proceeding it should be restrained from acting for Monarch. Mr Puxty contended that they will be critical witnesses for the resolution of three issues in dispute: first, the existence and terms of certain agreements which he says were entered into by himself, Monarch and Madison Marcus; secondly, the identity of the clients purchased by Monarch from him; and thirdly, the making of representations about referrals and the funding obligations of Madison Marcus.

60    Mr Puxty does not identify who from Madison Marcus might be a critical witness. The evidence establishes that the only person who was involved in discussions with Mr Puxty from Madison Marcus was Mr Kardum. Indeed, Mr Kardum is also the only person from Madison Marcus who Mr Puxty alleges in his cross-claim made representations to him which were misleading or deceptive and which go to support the claim that Monarch was in breach of s 18 or s 31 of the ACL. In those circumstances, Mr Kardum may be a relevant witness. However, Mr Kardum is not a lawyer and, in any event, is no longer employed by Madison Marcus.

61    Putting Mr Kardum to one side, on the case as pleaded there is no basis on which any lawyer or other individual from Madison Marcus could be said to be a potentially relevant witness. The respondents suggested that Madison Marcus or, more precisely, some of the solicitors in its employ, albeit not identified, would be relevant witnesses because Madison Marcus was a party to a commercial agreement. But there is no pleaded case to that effect or claim made against Madison Marcus.

62    For completeness I also note that at the hearing it was submitted by the respondents that Madison Marcus may be joined as a party to the proceeding. However, that is mere speculation. As at the time of the hearing the pleadings were closed and there was no draft pleading before me seeking to join Madison Marcus or any solicitor from that firm.

39    Nothing in this reasoning is arguably incorrect. Assessed together with the injustice which would result if leave were refused, there is insufficient prospect of grounds 8 or 12 leading to the primary judge’s order being set aside to warrant granting leave to appeal.

Ground 10

40    The primary judge did not arguably err in concluding that Madison Marcus should not be restrained from acting for Monarch. On the evidence which was adduced on the interlocutory application, the primary judge could not properly have made the orders which Mr Puxty and the other respondents had sought.

Grounds 13 and 14

41    Grounds 13 and 14 challenge findings of fact which were open and which, even if not made, could not have led to any different outcome. No intelligible submissions were made as to how those grounds could be made good or lead to a different outcome.

Mr Puxty’s written submissions

42    The written submissions advanced on Mr Puxty’s behalf on this application for leave to appeal diverged in material respects from what was contained in the draft notice of appeal. In particular, inconsistently with Grounds 2, 3 and 6 of the draft notice of appeal, the written submissions at [7.1] expressly acknowledge that the affidavits of Ms Coulter and Mr de la Hoyde dated 23 December 2020 were read on the relevant application before the primary judge.

43    Mr Puxty’s written submissions at [5] described the following as being the “issues in dispute” (footnotes omitted):

5.1    Evidence of Ms Coulter

(a)    Her Honour erred in finding that the evidence of Ms Coulter was not challenged.

(b)    Her Honour erred in in finding that she was entitled to rely on the evidence of Ms Coulter or to attribute any significant weight to her evidence.

5.2    The Alleged role of Consolidated

Her Honour erred in finding that Monarch shared the confidential information with Mr Kardum, Mr Qutami and Mr Shamieh as directors of Consolidated (a 50% shareholder in Monarch and also employees of Madison Marcus).

5.3    The Role of Maddison Marcus

Her Honour found [in Monarch (No 2)] that:

(a)    No confidential information could have been given to [Madison Marcus] in the capacity of Lawyer client relationship: [67]

(b)    [Madison Marcus] was acting in a capacity as lawyer for Ms Coulter: [67]

(c)    That the directors of Consolidated received information in their capacity as officers of a shareholder of Monarch: [67]

(d)    [Madison Marcus] was never involved in any discussions to be part of any business venture: [64]

5.4    Legal Principles - Administration of Justice

(a)    Her [H]onour erred in finding that a lawyer-client relationship and or that confidential information is given in the capacity as lawyers, is a pre­ requisite to invoking the Court’s inherent jurisdiction to remove a practitioner from acting regarding the administration of justice.

(b)    Her [H]onour erred in finding that where no claim is made against [Madison Marcus], and it is not a party to the proceedings the contention that a solicitor should be restrained as being a party to a business structure with the respondent and the applicant, is not a basis for [Madison Marcus’s] removal: [64]

44    It was not stated that grounds of appeal different from those in the draft notice of appeal were sought to be advanced or would be advanced if leave to appeal were granted. Nevertheless, for completeness, the “issues in dispute”, as formulated in the written submissions, are addressed next.

Evidence of Ms Coulter

45    In support of his contention, at paragraph (a) of [5.1] of his submissions, that the primary judge erred in concluding that Ms Coulter’s evidence was unchallenged, Mr Puxty relied on her Honour’s reasons at [52]. It is necessary to refer to both [51] and [52]. These are set out at [30] above.

46    It is tolerably clear that, in stating that Ms Coulter’s evidence was “not challenged”, her Honour was referring to the fact that Ms Coulter was not cross-examined. The context, in particular her Honour’s reasons at [51], make it clear that her Honour was not suggesting that Mr Puxty’s evidence did not challenge Ms Coulter’s evidence.

47    Nor is the contention that her Honour erred in attributing weight to Ms Coulter’s evidence one which is attended with any prospect of success. Counsel for Mr Puxty did not seek to cross-examine Ms Coulter. No detailed or reasoned submission was advanced as to why, in the circumstances, the primary judge should not rely on Ms Coulter’s affidavit. There is no discernible error in the approach adopted by the primary judge to her assessment of the evidence or the weight given to it. Contrary to the submissions advanced for Mr Puxty, there was no misuse of the principles in Brown v Dunn (1893) 6 R 67 or Jones v Dunkel (1959) 101 CLR 298; neither rule required the primary judge to disregard or attribute no weight to the evidence which Monarch had read; a fortiori, in the absence of any request to cross-examine the deponents of the affidavits which were read on the interlocutory application or any clear submission as to why the evidence should be disregarded or attributed no weight.

Role of Consolidated

48    As to the issue identified at [5.2] of Mr Puxty’s submissions:

(1)    Mr Puxty failed to establish that information of a kind which could attract an order restraining Madison Marcus was provided to any person, including Monarch: Monarch (No 2) at [55].

(2)    Contrary to [5.2], the primary judge did not conclude that confidential information was provided by Monarch to Madison Marcus. The primary judge was unable to be satisfied that any such information was provided: Monarch (No 2) at [55]. Her Honour concluded, at [67] (emphasis added), that “even if Monarch did provide Madison Marcus with information which was commercially sensitive or confidential to Mr Puxty, it did so because that firm was acting for it”. This finding was made in the context of concluding that there was no lawyer-client relationship between Mr Puxty and Madison Marcus.

(3)    At [67], her Honour stated:

To the extent that Mr Kardum or members of Consolidated may have received the information or parts of it, that was for commercial reasons, namely as officers of a shareholder in Monarch to assess the viability of Monarch offering employment to Messrs Puxty and Coggan.

This conclusion was open and not shown to have been reached through any arguably erroneous reasoning. In any event, the contended error goes nowhere given that her Honour was unable to conclude that any information which was provided had the necessary characteristics to make it confidential: at [55].

Role of Madison Marcus

49    The “issues” at [5.3] of Mr Puxty’s submissions are a statement of Mr Puxty’s interpretation of [64] and [67] of the primary judge’s reasons and do not identify any asserted error.

Legal principles

50    The primary judge did not state absolute legal propositions in the terms asserted by Mr Puxty at [5.4] of his written submissions.

51    Mr Puxty put his case in various ways. One of those ways was that Madison Marcus should be restrained from acting for Monarch because Madison Marcus had, as his lawyer, come into possession of confidential information belonging to Mr Puxty. That case was addressed. Her Honour concluded that no lawyer-client relationship had been established and her Honour was unable to conclude that any confidential information had been provided. Contrary to paragraph (a) of [5.4] of Mr Puxty’s submissions, the primary judge did not conclude that an applicant for a restraint had to establish, as an invariable “pre-requisite”, that he had earlier been (or was still) in a lawyer-client relationship.

52    Another way in which Mr Puxty put his case – a case which did not necessarily depend upon any lawyer-client relationship between Mr Puxty and Madison Marcus – was addressed by the primary judge in the following paragraphs:

Was Madison Marcus in a joint venture agreement

63    The third basis on which the respondents contended that Madison Marcus should be restrained from acting for Monarch is because it was part of a joint venture or partnership with Monarch. While difficult to follow, the respondents seemed to contend that the issue was whether a solicitor who is engaging in a business structure with a client should be permitted to act if there is a dispute between the client, in this case Monarch, and the party being invited into the dispute, in this case the respondents.

64    This assertion seems to rely on Ms Coulter’s emails (see for example [20(2)], [20(3)] and [20(4)] above) where she referred to Madison Marcus. But, as I have already observed, no claim is made by the respondents against Madison Marcus and it is not a party to the proceeding. Nor does Monarch make any claim against it. Ms Coulter’s evidence, despite her emails, is that Madison Marcus was never involved in any discussions to be a part of any business venture.

65    Thus this contention is not a basis on which Madison Marcus ought to be restrained from acting for Monarch in this proceeding.

53    All that the primary judge concluded at [64] was that the circumstances did not in fact give rise to a situation in which Madison Marcus should be restrained from acting for Monarch. This conclusion must be read in the context of the whole judgment, including that it was not established that any confidential information was in fact provided. Contrary to Mr Puxty’s submission at paragraph (b) of [5.4], the primary judge did not conclude, as a matter of legal principle, “that where no claim is made against [Madison Marcus], and it is not a party to the proceedings the contention that a solicitor should be restrained as being a party to a business structure with the respondent and the applicant, is not a basis for [Madison Marcus’s] removal”.

CONCLUSION

54    There is insufficient prospect of any successful appeal to warrant granting leave to appeal. In reaching this conclusion, I have taken into account that, if the primary judge did err, substantial injustice would arguably result if some confidential information relevant to the proceedings had been disclosed (a matter which was not established before the primary judge).

55    Leave to appeal is refused.

Associate:

Dated:    25 February 2022