What is the case about?
This was an interlocutory application brought by the applicant seeking orders to restrain a Law firm from continuing to act as solicitor on the record for the respondent, Owners Corporation, in substantive proceedings in which he seeks orders for the appointment of an administrator or, in the alternative, a return of levies and for damages.
The firm had previously provided discrete advice in 2020 regarding a skylight issue at Unit 17, the Owners Corporation engaged the law firm for advice regarding the benefit principle and cost apportionment for the proposed works in February 2024.
Between February and July 2024, the law firm provided advice which addressed how to approach the works and how the benefit principle might apply. The evidence discloses an Owners Corporation actively engaging with its solicitors and providing instructions.
Following two unsuccessful postal ballots, the Owners Corporation sought further advice from the law firm and, on 11 October 2024, the law firm provided that advice responding to a list of questions from the Owners Corporation set out in a document titled ‘Questions for Law Firm.’ This letter outlined possible next steps and concluded with a warning that if necessary motions could not be passed, the Owners Corporation might need to seek administrator appointment to facilitate works completion.
The Applicant took issue with the advice provided by the law firm.
The Tribunal said “Nonetheless, the power to restrain a solicitor is exceptional and exercised with caution. As recognized in Kallinicos v Hunt [2005] NSWSC 1181 the Tribunal should not lightly deprive a party of the lawyer of their choice.”
In Premier Capital (China) Ltd v Sandhurst Trustees Ltd [2012] VSC 611, Pagone J emphasised at [4] that particular circumstances of any given case would affect the application of the rule:
…It is not sufficient to restrain a solicitor from acting in a proceeding that the solicitor may be a witness in the proceeding nor, in either case, was it sufficient to restrain the solicitor from acting that the solicitor’s legal advice on a matter in a dispute was called into question or challenged in the proceeding. In both cases, and in the other cases to which I was referred, it was the particular and specific nature of the solicitor’s position which required the conclusion in those cases.
The Tribunal found that “For present purposes, the line would be crossed when the solicitor has a personal stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees for acting. However, for the reasons outlined above, I do not consider [the Law firm] has a personal stake in defending the Owners Corporation such as that it should be restrained from acting.”
Lessons to be learned
Often a self represented lot owner will attack other parties other than the Owners Corporation. This includes managers, chairpersons, committees and sometimes the lawyer. However, invariably such applications other than as against the Owners Corporation will fail because in most cases a lot owner does not have a direct claim against other parties. The reason for this is that manager’s, chairpersons, committees and lawyers are usually acting on the instructions of or on behalf of the Owners Corporation rather than individually.
Need assistance?
For expert assistance and advice concerning Owners Corporation disputes please contact Phillip Leaman, head of our Owners Corporations team at Tisher Liner FC Law.
Disclaimer
The above does not constitute legal advice but is information which may be of general interest. Tisher Liner FC Law will not be held liable or responsible for any claim, which is made as a result of any person relying upon the information contained in this publication.