Rangott v Pilor Pty Ltd [2006] FCA 798

FEDERAL COURT OF AUSTRALIA

Rangott v Pilor Pty Ltd [2006] FCA 798 WILLIAM BALFOUR RANGOTT v PILOR PTY LTD, JANELLE ROCHE, PIA SERVICES PTY LTD, MAYHEM GAMES PTY LTD, FAIRCHROME PTY LTD, MANO MANAGEMENT PTY LTD, MARK & NOORAINI BLUMER, IPAQ PTY LTD, KEN OWEN, SANETH WEERATNE, CRDT PTY LTD AND AAR INVESTMENTS PTY LTD QUD 137 OF 2005 DOWSETT J 20 FEBRUARY 2006 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY QUD 137 OF 2005

BETWEEN: WILLIAM BALFOUR RANGOTT

APPLICANT

AND: PILOR PTY LTD

RESPONDENT

JANELLE ROCHE

SECOND RESPONDENT

PIA SERVICES PTY LTD

THIRD RESPONDENT

MAYHEM GAMES PTY LTD

FOURTH RESPONDENT

FAIRCHROME PTY LTD

FIFTH RESPONDENT

MANO MANAGEMENT PTY LTD

SIXTH RESPONDENT

MARK & NOORAINI BLUMER

SEVENTH RESPONDENT

IPAQ PTY LTD

EIGHTH RESPONDENT

KEN OWEN

NINTH RESPONDENT

SANETH WEERATNE

TENTH RESPONDENT

CRDT PTY LTD

ELEVENTH RESPONDENT

AAR INVESTMENTS PTY LTD

TWELFTH RESPONDENT

JUDGE: DOWSETT J

DATE: 20 FEBRUARY 2006

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 These proceedings have been on foot for some time. I have previously made pointed remarks concerning the way in which they have been conducted. The parties are aware of its history. On 10 January last, the applicant was in substantial default in compliance with a direction as to delivery of a statement of claim. On that day I ordered that the statement of claim be delivered by 20 January, and that in default of so doing, various other orders take effect. I also made orders for costs against the applicant in connection with the conduct of the proceedings to date and ordered that they be paid forthwith. It is not necessary that I say any more about those orders. 2 The applicant is the trustee in bankruptcy of the estate of two former solicitors named Roach. It is difficult to describe the ambit of these proceedings in a few words. The trustee suspects that one or other of the bankrupts has, or may have, disposed of assets in such a way as to put them beyond his legitimate claim. These proceedings are designed to trace the quite complicated path along which assets were allegedly directed so as to have the effect to which I have referred. The matter is no doubt complex. It is understandable that there may have been some difficulty in drafting an appropriate pleading. However that does not explain the totality of the conduct in these proceedings. To date, I have not sought to apportion the blame for the unfortunate course which the proceedings have taken. 3 Today, counsel has sought to appear on behalf of Mr Shiels, a solicitor, who is a major creditor of the bankrupt estates. His name has been mentioned not infrequently throughout the proceedings. Material which he has placed before me today suggests that he has been actively engaged with the solicitors for the applicant in the conduct of these proceedings, at least to the extent of urging appropriate diligence in such conduct. 4 Mr Shiels now seeks to intervene pursuant to O 6 r 17. The purpose of such intervention is to re-open the orders for costs made against the applicant on 10 January, with a view to obtaining an order that the applicant's solicitors be responsible for the payment of such costs. That such an order may be made is said to flow from O 62 r 9. It seems to me, however, that such rule relates only to the question of liability for costs as between solicitor and client, not as between the parties to the litigation themselves, or between one such party and the solicitor for another party. 5 Be that as it may, there are, to my mind, other reasons why such intervention should not be allowed. Rule 17(3) provides that the role of the intervener is: '... solely to assist the court in its task of resolving the issues raised by the parties.' 6 That rule contemplates that the relevant issue or issues is or are extant at the point at which the application for intervention is made. The order for costs made on 10 January was a final order. Whether or not a party to the proceedings may invite the court to revisit it is not to the point. As between the present parties to these proceedings, that issue has been finally determined. No party seeks to re-ventilate it. There has been no appeal. There can be no intervention concerning that matter. I am supported in that view by the decision of Lander J in Wilson v Manna Hill Mining Co Pty Ltd (2004) 51 ACSR 404. His Honour also pointed out the difficulty in making an order for intervention where the relief claimed by the intervening party does not concern all of the existing parties. There is no good reason for dragging them into a fight in which they have no interest. To my mind, therefore, the question of intervention simply does not arise. It is not permissible under the rule. 7 Discretionary considerations also militate against making the order sought. Firstly, consideration of the matters identified sub-rule 17(2) would not result in favourable consideration of this application. It is difficult to see how the proposed intervener could contribute to the efficient disposition of these proceedings. Indeed, to permit him to raise the matters which he seeks to raise would merely complicate an already difficult case. Similarly, r 5 requires that I specify the form of assistance to be given. It is very difficult to see how anything other than hindrance could be derived from the engagement of another party in these proceedings. 8 There are further discretionary reasons which also militate against the orders sought. They would result in my conducting an investigation into the circumstances which led to the failure to comply with my orders of 10 January. Counsel for Mr Shiels has, in my view, an unduly sanguine expectation as to what that would involve. The instructions and other communications passing between the applicant and the applicant's solicitors would be closely examined. Mr Shiels' role in that relationship would also have to be examined. This might lead to the disclosure of privileged information which would make it difficult for me to continue to conduct these proceedings. It may also make it difficult for some of the other legal advisers to continue. As Mr Cowen pointed out, certain communications between Mr Shiels and counsel for the applicant have been overheard by others at the bar table in the course of the proceedings. They might be called as witnesses. These matters are really only indicative of the fact that there is no issue between the parties to the action, as presently constituted, in which the intervener has an appropriate interest. 9 No doubt the intervener fears that his interests will be adversely affected if he does not intervene. He says that he is concerned that if the applicant has to pay the orders for costs personally, he may be either unwilling or unable to continue with the administration. The proper remedy in that circumstance would be to seek the appointment of a new trustee. It may be that if Mr Shiels is unhappy with the present state of affairs, he should take that course in any event. If the applicant as trustee is wrongly relying upon a solicitor who is giving incorrect advice, or is not sufficiently competent or diligent, then it is for Mr Shiels to raise that with the applicant. If the evidence is sufficiently convincing, and the applicant refuses to act appropriately, then Mr Shiels' remedy is to seek his removal as trustee. It is not appropriate that the respondents to these proceedings be dragged into this fight. It is not even a fight between the trustee and his solicitor, but a fight which Mr Shiels says the trustee should be having with his solicitor. When put in that way it is quite clear that the application is misconceived. It will be refused. I order that Peter Leonard Shiels pay the costs of Colquhon Murphy, Solicitors of Canberra, of and incidental to the hearing today. 10 Other parties also seek costs. On such an application for joinder, they had a right to be heard. The motion today was addressed only to the solicitors for the applicant. The applicant has indicated that he will abide the order of the Court and seeks no order for costs. A number of the respondents have appeared on the proceedings today in connection with other matters and have inadvertently participated in the debate concerning the intervener application, as they were entitled to do. I should say that a substantial amount of time has been taken on that application. In those circumstances it would be inappropriate to allow Mr Shiels to hide behind the fact that he incorrectly failed to serve existing parties who happen to have attended for other reasons, and therefore performed the function that they were entitled to perform in responding to the motion. I order that Mr Shiels pay the costs of and incidental to the hearing of his motion today of the first, second and third and fifth, eighth and eleventh respondents as those parties are described in the order made on 10 January 2006. 11 In the case of each group, those costs are fixed in the amount of $500. Such costs are to be paid forthwith. 12 The costs of the fifth, eighth, and eleventh respondents of and incidental to today's proceedings will otherwise be reserved. 13 I order that the applicant pay the costs of the first, second, and third respondents of and incidental to today's proceedings to the extent that such costs have been thrown away by the adjournment of the application for interlocutory relief or by any change in the basis upon which such relief is sought, to be taxed on an indemnity basis and paid forthwith.