The Law Society of New South Wales v Holt [2003] NSWSC 629

New South Wales Supreme Court

CITATION : The Law Society of New South Wales v Holt [2003] NSWSC 629 HEARING DATE(S) : Wednesday 9 July 2003 JUDGMENT DATE : 16 July 2003 JURISDICTION: Common Law JUDGMENT OF : Michael Grove J at 1 DECISION : Motion dismissed

CATCHWORDS : LEGAL PRACTITIONERS - ALLEGED CONFLICT OF INTEREST OF SOLICITOR - FORMER EMPLOYEE OF LAW SOCIETY - APPLICATION BY INVESTIGATOR AND RECEIVER - RESTRAINT FROM ACTING - NEED TO IDENTIFY SUBJECT MATTER OF RISK LEGISLATION CITED : Legal Profession Act 1987 Bolkiah v KPMG 1999 2 AC 222 D & J Constructions v Head & Ors 1987 9 NSWLR 118 CASES CITED : Farrow Mortgage Services v Mendall Properties 1995 1 VR 1 Mitchell v Patent Holdings [2002] NSWSC 1015 National Mutual Holdings v Century Corporation 1989 22 FCR 209 Rakusen v Ellis, Munday and Clarke 1912 1 Ch 831 PARTIES : The Law Society of New South Wales v John Colin Holt FILE NUMBER(S) : SC 10491/02 N. Manousaridis (Plaintiff) COUNSEL : R. Lovas (Defendant/Respondent) R. Stitt QC (Applicant in Motion) A.S. Brown (Plaintiff) SOLICITORS : Chegwidden Solicitors (Defendant/Respondent) B.J. Murdoch (Applicant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MICHAEL GROVE J

Wednesday 16 July 2003

10491/02 - THE LAW SOCIETY OF NEW SOUTH WALES v JOHN COLIN HOLT

JUDGMENT

1 HIS HONOUR: This is a Notice of Motion brought by Jean Sayer (the applicant) who is the recipient of a subpoena issued by the defendant in the proceedings. The motion seeks an order in effect restraining a solicitor who has filed an appearance (and other documents) from acting for that defendant. 2 It is necessary to sketch some background. On 19 December 1996 the applicant was appointed investigator into the affairs of a solicitor, John Colin Holt (the defendant) by the Council of the Law Society of New South Wales (the Society is the plaintiff) pursuant to s55 of the Legal Profession Act 1987. On 19 May 1997 she was appointed receiver of the defendant's property within the meaning of Part 8 of that Act. On 14 and 25 September 1998 she reported to the Council pursuant to s114. 3 On 22 February 2002 the plaintiff issued a statement of claim seeking to recover from the defendant $554,994.54 together with accruing interest. The sum claimed was made up of three elements: the certified costs of investigation; the fees paid to the applicant for her services and expenses in respect of the receivership and, pursuant to s90A, the amount paid out to four claimants against the Solicitors Fidelity Fund in relation to failures to account to them by the defendant. On 15 March 2002 the defendant filed a notice of appearance in the action giving his address for service as care of John Graham Chegwidden of Chegwidden Solicitors stating details of their office and document exchange. On 5 April 2002 a defence was filed signed by Mr Chegwidden and subscribed as "solicitor for the defendant". The defence was verified by an affidavit of the defendant. Inter alia, the defence admitted that the elemental amounts had not been paid to the plaintiff but "that the plaintiff is not entitled to make the claim against him in the amount claimed or at all". No particulars were supplied in respect of that assertion. 4 As noted, the applicant became involved in this litigation (as distinct from her role as investigator and receiver) as the recipient of a subpoena. This issued on 23 July 2002 at the request of Mr Chegwidden as solicitor for the defendant. The applicant has filed a motion seeking to set aside the subpoena. There have also been filed by the plaintiff a motion to set aside a notice to produce and a further motion for summary judgment in respect of the claims relating to the first and second elements in the initiating pleadings (the cost of the investigation and the receivership fees and expenses). 5 None of these motions has yet been dealt with as when the matter was before Hulme J on 14 October 2002 his Honour gave a direction, by consent: "That the challenge to Mr Chegwidden (the defendant's solicitors) retainer be determined before all other issues." 6 On the matter being listed before me it was made clear that the applicant sought that Mr Chegwidden be restrained from acting for the defendant in the proceedings and I gave a further direction for the filing of an appropriate notice of motion. This has been done and it is with that with which I now deal. 7 Mr Stitt, QC appeared for the applicant. Mr Lovas of counsel appeared for the defendant and opposed the order sought. Mr Manousaridis of counsel appeared for the plaintiff and confirmed that the plaintiff did not challenge the retainer and did not wish to be heard on the application. He sought to be, and was, excused on the basis that he would have a right to be heard in the event that any application for costs affecting his client was made.