Industrial Court of New South Wales CITATION: Duchesne v Master Education Services Pty Ltd [2008] NSWIRComm 233 APPLICANTS (RESPONDENTS ON THE MOTION) Dennis Laurence Duchesne PARTIES: Cheryl Karen Duchesne RESPONDENT (APPLICANT ON THE MOTION) Master Education Services Pty Ltd FILE NUMBER(S): IRC 6175 of 2003 CORAM: Boland J President UNFAIR CONTRACT - Interlocutory proceedings - Adjournment of proceedings sought by applicants on the grounds that they had appealed a decision to refuse legal aid - Section 57 of the Legal Aid Commission Act 1979 - Whether appeal or intention to appeal was bona fide - Held appeal not bona fide CATCHWORDS: PRACTICE AND PROCEDURE - Interlocutory proceedings in unfair contract matter - Adjournment of proceedings sought by applicants on the grounds that they had appealed a decision to refuse legal aid - Section 57 of the Legal Aid Commission Act 1979 - Whether appeal or intention to appeal was bona fide - Held appeal not bona fide LEGISLATION CITED: Industrial Relations Act 1996 Legal Aid Commission Act 1979 CASES CITED: Lewis v Spencer [2007] NSWSC 1383 HEARING DATES: 1 December 2008 DATE OF JUDGMENT: 4 December 2008 APPLICANTS (RESPONDENTS ON THE MOTION) Mr S J Burchett of counsel Christopher M Edwards, Solicitors and Accountants (Mr Richard Wilson) LEGAL REPRESENTATIVES: RESPONDENT (APPLICANTS ON THE MOTION) Mr V V Bedrossian of counsel Meehans Solicitors (Mr Paul Meehan) JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: BOLAND J, President Thursday 4 December 2008 Matter No IRC 6175 of 2003 DENNIS LAURENCE DUCHESNE AND ANOTHER v MASTER EDUCATION SERVICES PTY LTD Application under section 106 of the Industrial Relations Act 1996 INTERLOCUTORY JUDGMENT [2008] NSWIRComm 233 1 On 27 October 2003, Dennis Laurence Duchesne and his wife Cheryl Karen Duchesne ("the applicants") filed a summons for relief under s 106 of the Industrial Relations Act 1996. The respondent named was Master Education Services Pty Ltd. 2 Since the filing of the summons the respondent has, on four occasions, filed motions seeking to have the summons dismissed for want of prosecution. It is unnecessary to deal in any detail with the first three motions, each of which was dismissed. The fourth motion was filed on 31 July 2008. It was listed for hearing on 1 December 2008, but at the commencement of the proceedings the applicant sought an adjournment based on the provisions of s 57 of the Legal Aid Commission Act 1979: 57 Adjournment of certain proceedings Where it appears to a court or tribunal, on any information before it: (a) that a party to any proceedings before the court or tribunal: (i) has appealed, in accordance with section 56, to a Legal Aid Review Committee and that the appeal has not been determined, or (ii) intends to appeal, in accordance with section 56, to a Legal Aid Review Committee and that such an appeal is competent, (b) that the appeal or intention to appeal is bona fide and not frivolous or vexatious or otherwise intended to improperly hinder or improperly delay the conduct of the proceedings, and (c) that there are no special circumstances that prevent it from doing so, the court or tribunal shall adjourn the proceedings to such date on such terms and conditions as it thinks fit. Background 3 It is apparent from the material that has been filed in the proceedings that the applicants have had financial difficulties in being able to prosecute their claim in a timely manner. Nonetheless, after much delay, on 21 April 2008 the proceedings were set down for hearing on 18 August 2008 for five days and directions were made for the applicants to comply with the Court's Practice Direction 14. That Direction provides for pre-hearing directions to be made in s 106 matters. Consistent with what had become a feature of the applicants' approach to prosecuting their claims, the applicants defaulted on the directions, causing the respondent to inquire on two occasions regarding the applicants' non-compliance. On 25 July 2008, the respondent's solicitor received a facsimile message from the applicants' solicitor stating that "our clients have applied to the Legal Aid Commission Board for financial assistance and this has just been refused." The respondent had not previously been advised of the applicants' intention to obtain legal aid. 4 On 28 July 2008, the Associate to Staunton J, the trial judge, wrote to the solicitors for the parties noting that consent directions filed in Court on 29 November 2007 had not been complied with and raised her Honour's concerns about whether the matter would be ready to proceed on 18 August 2008. The solicitor for the applicants, Mr Richard Wilson of the firm Christopher M Edwards, Solicitors and Accountants, replied to her Honour indicating that the applicants intended to appeal against the refusal of legal aid and advised that his clients were not ready to proceed on 18 August. 5 On 31 July 2008, Mr Wilson, on behalf of the applicants, filled in a form entitled "Appeal to the Legal Aid Review Committee". The form purported to be an appeal against the decision of 18 July to refuse legal aid. Under the heading "Grounds of Appeal" on the form, Mr Wilson had written: Applicants refer to the telephone conversation between Richard Wilson and John Trusswell. As agreed Applicants will make detailed submissions within 14 days of the date of lodging this appeal. 6 On 1 August 2008, the proceedings were listed before Staunton J at which time her Honour received an undertaking from counsel for the applicants that the applicants' solicitors would notify the Court and the respondent's solicitors immediately upon there being an outcome of the legal aid appeal application. Her Honour also reserved the issue of the Court proceeding with the respondent's motion filed on 31 July 2008 to dismiss for want of prosecution. 7 On 11 and 12 September 2008, the respondent's solicitors contacted the applicants' solicitors inquiring as to the outcome of the legal aid appeal. On 18 September there was a telephone conversation between Ms Karen Watson, solicitor with the respondent's firm of solicitors, Meehan Solicitors, and Mr Wilson. There was a conflict in the evidence about precisely what was said in the conversation. Ms Watson deposed in her affidavit that Mr Wilson said: I am sending you a letter advising that our client is discontinuing the matter. My client can't get legal aid. 8 Mr Wilson, on the other hand, said that in answer to a question from Ms Watson about legal aid, he replied: Karen we both realize that they wont get the aid so I have advised my client to bite the bullet and accept that reality. You will be getting a letter out to [sic] setting out the basis of the proposal to you. If this is not acceptable to you he will discontinue proceedings and go insolvent. 9 On 23 September 2008, a further telephone conversation took place between Mr Wilson and Ms Watson. Ms Watson deposed that she asked the question whether the applicants had been successful in their legal aid appeal to which Mr Wilson was said to have replied, "They couldn't get legal aid which is not surprising." Ms Watson said that Mr Wilson promised to send a letter confirming that the applicants did not get legal aid "in the next couple of days". Mr Wilson said he put the issue of the applicants obtaining legal aid no higher than "they won't get the aid". 10 On 1 October 2008, the respondent's solicitors wrote to the applicants' solicitors noting that "Richard Wilson has advised us that your client has not obtained legal aid" but that there had been no advice to them in writing in accordance with the undertaking given to the trial judge on 1 August 2008. Immediate advice in writing was sought. On 2 October, Mr Christopher Edwards wrote to Mr Meehan, presumably with a proposal to settle but, appropriately, this proposal was blacked out in the Court's copy. On 3 October, Meehans replied to the settlement proposal (similarly blacked out) and added that in light of the undertaking given by counsel on 1 August, "it would be prudent of you to advise the Court today to avoid any embarrassment to your firm or to [counsel]". 11 On 15 October 2008, Meehans wrote to the trial judge's Associate advising that the applicants' solicitors had informed them that the applicants had not received legal aid and that the applicants would not be proceeding with the matter. Meehans requested the matter be relisted. 12 On 17 October 2008, the applicants' solicitors advised Meehans by facsimile that the applicants "will be filing for voluntary bankruptcy next week." In a letter of 10 November to the applicants' solicitors, Meehans noted that the matter was listed before the Court on 11 November. It was also noted that the applicants' solicitors had advised Meehans that "your client is impecunious and you are attending court with instructions that your client is not proceeding with the matter." The facsimile advised the applicants' solicitors that the respondent would be seeking costs orders against the firm of Christopher M Edwards. 13 In a letter dated 7 November, but which was sent by the applicants' solicitors via facsimile on 10 November 2008, the applicants' solicitors (Mr Edwards) advised Meehans (Ms Watson) that: I have now come to the view to see through the appeal to Legal Aid. I believe discussions you had with my solicitor Richard Wilson basically involved the fact that we would not press on with the Legal Aid application if we could negotiate a settlement. Unfortunately, despite our best efforts on yours and our behalf, this has not been achieved. On Tuesday, therefore, we will be requesting that the matter be put over until the Legal Aid Appeal is determined … 14 In his affidavit of 25 November 2008, Mr Meehan deposed that: At no time has there been any discussion between myself and the Applicants' solicitors (let alone any agreement) to the effect that any discussions or negotiations would mean that the legal aid appeal was being put on hold or not being proceeded with. The first time any such comment was made was in the letter dated 7 November 2008 received … on 10 November 2008. Based on my conversation with Mr Edwards … it was always my belief that the Applicants' appeal or review of the refusal of the initial application for Legal Aid had itself been unsuccessful. Neither Mr Edwards nor anyone else on behalf of the Applicants ever communicated with me, prior to 10 November 2008, in anyway which caused me to doubt this was the case. 15 It was Mr Wilson's evidence that he found the requirements for an appeal against refusal of legal aid to be complicated and so he found it necessary to seek advice including from the officer at the Legal Aid Commission responsible for the file, namely, Mr John Truswell. Mr Wilson said another officer of the Commission, a Mr McDougal, advised him "it was highly unlikely that we would get legal aid from the committee." 16 Mr Wilson said negotiations continued between the parties on a settlement proposal but that this was unsuccessful so it was decided to continue with the legal aid appeal. Mr Wilson said he then provided further information and submissions on the appeal to Mr Truswell on 28 November 2008. Consideration 17 The respondent challenged whether the applicants had in fact appealed or intended to appeal the decision to refuse legal aid, but if they had that the appeal or intention to appeal was not bona fide in that it was frivolous or vexatious or otherwise intended to improperly hinder or improperly delay the conduct of the proceedings. 18 As to whether the applicants appealed the refusal of legal aid, I accept, albeit with considerable difficulty, that an appeal form was lodged with the Legal Aid Review Committee by the applicants' solicitors. Whilst is it arguable that the lodging of the form did not constitute an appeal within the meaning of s 57 of the Legal Aid Commission Act for the reason that there were no grounds stated on the form, I am prepared to accept Mr Wilson's evidence that he had agreed with the relevant officer of the Commission to provide the grounds at a later time. 19 Those grounds were not provided until some four months later and so it is further arguable that the applicants were out of time: see s 56(2) of the Legal Aid Commission Act. Mr Wilson stated, however, that a Commission officer advised him that the officer would, nevertheless, see that the Committee entertained the appeal. 20 The applicants' solicitors' conduct in filing the appeal was highly irregular, particularly given it took them four months to file their grounds of appeal. Nevertheless, given the purpose of the Legal Aid Commission Act (see Lewis v Spencer [2007] NSWSC 1383 at [13]), I intend to give the applicants the benefit of the doubt that they did appeal the refusal of legal aid or at least they did intend to appeal. 21 That leaves the question of whether the appeal or intention to appeal was bona fide and not frivolous or vexatious or otherwise intended to improperly hinder or improperly delay the conduct of the proceedings. 22 On 1 August 2008, Staunton J was decidedly critical of the parties, especially the applicants, for the delay that had occurred in prosecuting the case. Her Honour made it very clear she required an undertaking from the applicants' solicitors to notify her Chambers "immediately" a decision had been made regarding the legal aid appeal. That undertaking was given on the instructions of Mr Wilson. 23 Notwithstanding the concern expressed by Staunton J at the extraordinary delay that had occurred in the proceedings, and her Honour's obviously strong desire to progress the matter as quickly as possible while at the same time giving the applicants time to appeal regarding legal aid, no grounds in support of the legal aid application were filed until 28 November 2008. In other words, despite it being plainly the case that the Court was anxious to progress the matter given the lengthy delay that hitherto had occurred, the applicants' solicitors did not finalise the appeal so that it was in a state that could be dealt with by the Legal Aid Review Committee until four months after the appeal was lodged. The applicants' solicitors did not, until now, advise the Court of this situation. 24 Mr Wilson believed, at least as early as 18 September 2008, that his clients would not get legal aid. Further, the evidence supports the conclusion that having filed an appeal, albeit devoid of any grounds, the applicants' solicitors, in effect, suspended any further work on finalising the appeal, firstly because Mr Wilson had the view it was highly unlikely any appeal would be successful in any event, secondly, he wished to attempt to reach a settlement with the respondent and thirdly, it would appear that he was hopeful that a decision in a separate application before the Industrial Court involving the respondent might be given prior to Christmas, thereby giving him some indication of the applicants' chances of success. 25 I do not accept Mr Wilson's evidence that the formulation of the appeal grounds was such a complex and difficult task that it took him four months to do so. Mr Wilson was a solicitor of many years' experience. The submission that constituted the grounds in support of the legal aid appeal consisted of three pages and an annexure purportedly showing that the applicants met the necessary means test for receiving legal aid. Nothing about the submission suggests it was a complex task to draft it. That an experienced solicitor would need four months to prepare the submission is, frankly, not credible. When it became clear that no settlement was possible, the applicants' solicitors then took steps to finalise the appeal grounds in order to be in a position to advise the Court on 1 December 2008 that they were still awaiting an appeal decision and that the Court should not proceed to hear the respondent's dismissal motion, which is what occurred. 26 Further still, between August and November 2008 the applicants' solicitors avoided advising, or failed to advise, the respondent's solicitors of the true position regarding the legal aid appeal, that being that the appeal was in a state of suspension with no prospect of any decision being made in respect of the appeal because no grounds had been submitted. The applicants' solicitors sought to leave the respondent's solicitors with the impression that a proper appeal had been filed. 27 I am satisfied on the information before the Court that the intended effect of what was done was to delay the prospect of the Court acting on the outcome of the appeal, either by scheduling trial dates or entertaining the motion by the respondent to dismiss. Such conduct amounted to an abuse by the applicants' solicitors of the Court's process. 28 On this analysis, the appeal, or intention to appeal, was not bona fide because the appeal or intention to appeal was intended to improperly hinder or improperly delay the conduct of the proceedings. I so find. Accordingly, the applicants are not entitled to an adjournment pursuant to s 57 of the Legal Aid Commission Act. 29 The respondent's notice of motion to dismiss the proceedings for want of prosecution will be heard on Thursday, 11 December 2008 at 2.00 pm. ______________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.