Tuesday, June 5, 2012

Solicitor not permitted to cease to act - Investec Bank (Australia) Limited v Mann & Anor [2012] VSC 81

I am attending a Commercial Court seminar tomorrow (6 June 2012) at Monash University Law Chambers on the matter of Investec Bank (Australia) Limited v Mann & Anor [2012] VSC 81. I thought I'd give a brief summary by way of background to bring both myself and my audience up to speed.

Investec was an application before Pagone J for leave to file and serve a notice of solicitor ceasing to act. The trial was listed for 13 March 2012 and it was set down on 9 December 2011. The defendants' solicitor applied for leave to file and serve their notice on 2 March 2012, 11 days before the trial.

The evidence of the defendant's solicitor in support of the application was to the effect that a request for funds was made on 2 March 2012 and the defendants said that they could not provide the funding.

Pagone J held that there were 'special circumstances which render it expedient to retain the solicitor on record', particularly the lateness of the request for funding and the inconvenience to the parties and the Court (at [8]):
8 This is a case where in my view there are “special circumstances which render it expedient to retain the solicitor on the record.” The application was made almost three months after the date was fixed for trial and only eleven days before the trial was due to commence. Madgwicks left their requirement that its clients put them in funds for the trial until 2 March 2012. No explanation was given for the delay (or timing) in imposing or insisting upon funds or for the delay (or timing) in making the application for leave. It is incumbent on solicitors making such applications for leave to satisfy the Court that it is proper and appropriate that leave should be granted. Applications of this kind are likely to be unopposed and that circumstance, coupled with the practitioner’s duty to the Court and to uphold the law, makes it incumbent upon them to be full and frank with the Court asked to grant leave. The removal, or absence, of legal practitioners close to trial is sometimes used as a reason for an adjournment of the hearing with inconvenience to the Court, the other parties and to other litigants. Practitioners ought to guard against the possibility of the Court finding itself with unrepresented litigants close to the hearing date. No evidence was given by Madgwicks of having taken any steps to avoid the inexpedient consequences to the Court, to the plaintiff and to the plaintiff’s solicitors which would arise if the leave Madgwicks seeks were to be granted. Nor, for that matter, have Madgwicks given evidence of any steps to prevent the situation of the defendants finding themselves close to the hearing date without legal representation or having to conduct the trial unrepresented after many months of all concerned knowing of the trial date. The inconvenience to the Court and the additional inconvenience and costs to the plaintiff and its solicitors, that would be occasioned by granting leave at so late a stage, could not be compensated by costs orders and outweigh any burden to Madgwicks of not granting them leave. The requirement in r 20.03(3) of seeking leave is imposed upon legal practitioners for the proper administration of justice. It enables the Court’s work to be performed efficiently and with the confidence of the assistance of practitioners it provides a protection to former clients and serves to protect the position of adversaries.
Pagone J held that the effect of this meant that the solicitors would not necessarily have to conduct the trial for the defendants, but would be required to offer such assistance as the court may require (at [9]):
9 The role Madgwicks may hereafter be required to perform upon my refusal to grant leave is another matter. Their continued role should, as far as possible, be limited to the purpose of the rule requiring leave as explained in Plenty v Gladwin as concerned with the record of the Court and with service of documents. They may be required to continue to receive documents from the plaintiff’s solicitors. It may require Madgwicks to continue to convey to the defendants any documents served for them at Madgwicks. Their status as officers of the Court may conceivably also require them to offer such assistance as the Court may require during the conduct of the trial. Madgwicks may not be required to conduct the trial on behalf of their former clients without funding but may need to give such other assistance as may be required by the Court to lessen or eliminate the adverse impact upon the Court’s record or upon the orderly service of documents upon the defendants as the Court may direct. It is conceivable that greater duties may also arise but they should not be considered in the abstract and without hearing submissions from Madgwicks and others affected.
The decision in Investec has serious implications for litigation legal practitioners as it would appear to require a legal practice to continue working for a client in circumstances where there is no funding available or likely to be available.  With that in mind, I am looking forward to the commentary on Investec from the Bench, Senior Counsel and the Victorian Legal Services Commissioner at the seminar tomorrow night.

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