New South Wales Supreme Court CITATION : Wily v Terra Cresta Business Solutions Pty Ltd (in liq) [2009] NSWSC 1324 HEARING DATE(S) : 16 November 2009, and subsequent submissions JUDGMENT DATE : 1 December 2009 JURISDICTION : Equity Corporations List JUDGMENT OF : Austin J DECISION : Application for referral for pro bono assistance denied CATCHWORDS : LEGAL AID - Supreme Court's pro bono assistance scheme - requirement for "special reasons" if a referral has been made in the preceding period of 3 years - held no special reasons shown LEGISLATION CITED : Uniform Civil Procedure Rules, 7.36 Andrew Hugh Jenner Wily, as liquidator of Business Australia Capital Finance Pty Ltd and Business Australia Capital Mortgage Pty Ltd (Plaintiff) PARTIES : Terra Cresta Business Solutions Pty Ltd (in liq)(Defendant) Owen James Salmon (Applicant)(ex parte application, in person) FILE NUMBER(S) : SC 3493/08 SOLICITORS : Nil IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST AUSTIN J TUESDAY 1 DECEMBER 2009 3493/08 ANDREW HUGH JENNER WILY IN HIS CAPACITY AS LIQUIDATOR OF BUSINESS AUSTRALIA CAPITAL PTY LTD & BUSINESS AUSTRALIA CAPITAL FINANCE PTY LTD V TERRA CRESTA BUSINESS SOLUTIONS PTY LTD (IN LIQ); APPLICANT OWEN JAMES SALMON JUDGMENT (IN CHAMBERS) 1 HIS HONOUR: Proceedings No 4200 of 2006 are proceedings brought by Mr Wily as liquidator of two companies, Business Australia Capital Mortgage Pty Ltd ("BACM") and Business Australia Capital Finance Pty Ltd ("BACF"), to challenge the validity of charges created by those companies in favour of the first defendant, Terra Cresta Business Solutions Pty Ltd ("Terra Cresta") on 18 March 2005. The second defendants, Richard Albarran and Geoffrey McDonald, were appointed receivers and managers pursuant to those charges. Mr Wily claimed that those appointments were invalid. 2 The proceedings have been before the court on numerous occasions. On 18 August 2008 Young CJ in Eq made orders including an order under SCR 66A, on the application of Owen James Salmon, for pro bono legal assistance. On 19 August 2008 his Honour made an order dismissing the proceedings, except for determination of an outstanding issue concerning the amount covered by an equitable lien in favour of the receivers and managers with respect to the BACF charge. That issue has been set down for hearing before Rein J on 16-18 December 2009. There is an amount of $735,019.02 held in court pending determination of that issue. 3 On 9 November 2009, Mr Salmon applied by notice of motion in proceedings No 4200 of 2006 for the court to provide further pro bono legal assistance to him for the following purposes: (1) to investigate the actions of the liquidators and receivers and managers (and their representatives) in this matter; (2) to return all funds taken by these parties back for the benefit of creditors; (3) to prosecute those persons found guilty of misconduct; and (4) to set aside the liquidation of Terra Cresta Business Solutions. 4 The application came before Palmer J on 9 November 2009. I have read the transcript of the hearing before his Honour. Mr Salmon appeared without legal representation, Mr GK Burton SC appeared for the receivers and managers, Ms PA Horwath appeared for the liquidator, and Mr P Sortouris appeared for Terra Cresta in liquidation. Mr Burton applied to strike out on Mr Salmon's application on the grounds that he lacked standing because he is an undischarged bankrupt, and that the application was based on scandalous material. 5 After receiving and considering submissions, Palmer J said the court should concentrate on sorting out whether Mr Salmon's complaints would affect the matter set down for hearing by Rein J. To that end, he said (T 15): "The first step is for Mr Salmon to particularise the complaints that you seek to make against the receivers and the liquidator and Mr Brown and anyone else. Once the court can see exactly what you are saying it is easier to see how those complaints could impact or not impact upon any other issue. Mr Salmon, if you can provide a detailed list of complaints against each of the persons that you wish to complain about by 4 p.m. on Friday of this week the matter should be listed before the Duty Judge next week, that is, your motion. I won't make any orders about whether it is the appropriate proceeding or not. I will put aside that technicality for the time being." 6 Later his Honour decided that the matter was more appropriate to be listed before the Corporations Judge than the Duty Judge, and so it came before me on Monday 16 November, in the Monday Corporations List. Mr Burton SC appeared for the receivers, Ms Horvath appeared for the liquidator and Mr Salmon appeared in person. There was no appearance for Terra Cresta in liquidation or its liquidator. At that stage the transcript of the hearing before Palmer J. had not become available. 7 Mr Salmon tendered his affidavit of 13 November 2009. The affidavit simply asserted that the information contained in an attached 19 page document was to the best of his knowledge true, and had been prepared at the "request of Justice Palmer on 9 November 2009". The attached 19 page document made miscellaneous allegations against various named people of blackmail, fraud, perjury, false reports, threats and intimidation, attempted bribery, manipulation, rigged voting and illegal committees. After hearing the submissions of the parties, I decided that the affidavit ought not to be permitted to be read in its present form in proceeding No 4200 of 2006, and that the notice of motion should be dismissed. My ex tempore judgment, a copy of which has been placed on the file, referred to the importance of not allowing the application to interfere with the hearing before Rein J, and to the seriousness of allegations made in the affidavit, which had not annexed or exhibited any documentary support for those allegations. 8 Since I needed time to consider the court's power with respect to pro bono legal assistance, I stood the matter down in Monday's list, excusing parties other than Mr Salmon from attending on the later occasion. Over the luncheon adjournment I located and considered UCPR 7.36, which is partly as follows: (1) If satisfied that it is in the interests of the administration of justice, the court may, by order, refer a litigant to the registrar for referral to a barrister or solicitor on the Pro Bono Panel for legal assistance. (2) For the purposes of subrule (1), the court may take into account: (a) the means of the litigant, and (b) the capacity of the litigant to obtain legal assistance outside the scheme, and (c) the nature and complexity of the proceedings, and (d) any other matter that the court considers appropriate. (2A) The court may not refer a litigant for assistance under this rule if the litigant has obtained assistance under a previous referral at any time during the immediately preceding period of 3 years unless the court is satisfied that there are special reasons that justify a further referral. (3) The power to refer may be exercised in the absence of the public and without any attendance by or on behalf of any person. 9 When I returned to the matter later in the day, with only Mr Salmon in attendance, the following exchange occurred (T 10): His Honour : I found the rule [referring to UCPR 7.36] and although it is not my function to give you or anyone else legal advice I am going to give you a photocopy. If you want an order for pro bono assistance then you need to provide evidence that is directed towards the matters that the rule speaks about. One of the things it speaks about is that an order of this kind should not be made if an order has already been made in the previous three years unless there are special reasons." Mr Salmon : And there was, which is what I had already been through last week. 10 Mr Salmon said that previously somebody had been appointed by the court, who did not do anything or lodge anything and then stepped aside. I asked him whether he had addressed that matter in any appropriate form of evidence, and emphasised that under the rule the court would not make another order for assistance unless there were special reasons. I also referred to the grounds for making an order, and said I would need to have evidence of those matters. I specifically referred to paras 7.36(2)(a)-(c) and (2A). As well as giving him a copy of the rule, I read out subpara (2A). 11 In answer to Mr Salmon's question (how could he make an application without any help to do it) I said to him: "You read the rule and you set out facts that relate to each of the matters that have to be established under the rule." 12 I told him that I would be prepared to consider his application in chambers without any further attendance by him, that I would waive the filing fee on his fresh notice of motion, that it seemed to me that the application should be brought in the winding up file for Terra Cresta, No 3493 of 2008, and that in light of subrule (3) I considered it unnecessary to serve the application on anyone. I said to him: "You need, I think, to provide an affidavit - that is a sworn affidavit in which you state as simply and directly as you can what you say about the matters in that rule in order to show me why it is you think I can make an order under that rule." I concluded: "If you send that affidavit to my chambers I can deal with the matter in chambers. I do not mean to hold out any hope or expectation on your part but, if you persuade me that those grounds are satisfied, then I might be prepared to make that order." 13 Mr Salmon subsequently sent me a form of notice of motion dated 18 November 2009 seeking the following orders "in the interests of justice": "1. To provide assistance under SCR Part 66A to provide a referral to a barrister or solicitor from the pro bono panel. 2. To investigate the actions of the liquidators and receivers and managers (and their representatives) in this matter (both s 536 and/or s 423 of the Corporations Act 2001 if they are both required). 3. To ask the court for a Hall v Poolman action against the relevant parties should misconduct in this matter be found (for both BA companies and Terra Cresta). 4. To prosecute those persons found guilty of misconduct. 5. To set aside the liquidation of Terra Cresta Business Solutions should misconduct be uncovered per order 2. 6. To set aside action against Terra Cresta Business Solutions Pty Ltd and return it to its prior status should misconduct per order 2 be proven. 7. To remove the liquidators of the BA group should misconduct be proven." 14 I should make it clear at once that I would not make any orders other than Order 1 on the application as presently constituted. I made it clear to Mr Salmon on 16 November that the application I had in mind, for which I would waive the filing fee, was an application for pro bono legal assistance under rule 7.36 and no other relief. Apart from anything else, an application for the other relief listed in the notice of motion would need to be served on the persons concerned and would no doubt be resisted. 15 The application was supported by an affidavit affirmed by Mr Salmon on 18 November 2009. Paras 4-37 of the affidavit purport to address the grounds for making an order for referral for pro bono assistance. This is the only part of the affidavit that addresses the matter raised by subrule (2A) is para 3. It is in the following terms: "I believe I have not obtained assistance under s 66A previously. I state that pro bono assistance was previously requested and someone appointed (August 2008) but the person appointed has stepped aside without lodging anything with the court. See Appendix A." 16 Appendix A is an e-mail to Mr Salmon from a member of the bar dated 12 October 2009 headed "Supreme Court pro bono reference". It says, amongst other things: "As discussed, I am unable to give you further assistance in this matter and intend to request the Supreme Court to release me from the pro bono reference". 17 Mr Salmon's evidence falls well short of establishing "special reasons" for a further referral under sub rule (2A), as it does not begin to explain why the previous referral came to an end. After receiving his affidavit, I decided I should approach the Registrar to find out if there was any information on the court's file that would provide such an explanation. In addition to a copy of counsel's e-mail to Mr Salmon of 12 October 2009, the Registrar's file contains a letter from counsel to the Senior Deputy Registrar dated 13 October 2009, which says that there had been some communications with Mr Salmon since the referral but counsel had concluded that she could not assist him further. Counsel recorded that Mr Salmon had asked for the papers to be forwarded to another barrister. She said that she had done so, and requested a formal release from the referral. The other barrister was not identified, and has not been referred to by Mr Salmon in his affidavit. 18 Mr Salmon has now had ample opportunity to satisfy the court that there are special reasons for a further referral, having regard to subrule (2A). He has failed to do so. His notice of motion is therefore dismissed. 19 On 19 November 2009 my associate received a letter from the solicitors acting for the liquidator of Terra Cresta, saying that due to an administrative oversight in their office, there was no appearance on their client's behalf before me on 16 November, and inquiring as to whether the transcript of my reasons on 16 November 2009 could be made available. I have decided to instruct my associate to provide those solicitors with a copy of my ex tempore reasons for judgment delivered on 16 November 2009, and a copy of the present reasons for judgment delivered in chambers. ********** 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.