Abriel v Australian Guarantee Corp [1999] FCA 50 (5 February 1999)

Last Updated: 9 February 1999

FEDERAL COURT OF AUSTRALIA

Abriel v Australian Guarantee Corporation [1999] FCA 50

EVIDENCE - Evidence Act 1995 (Cth) - Federal Court of Australia Act 1976 (Cth) - whether applicants' case bound to fail on the basis that crucial evidence may not be adduced - whether proceeding one in which the making of a settlement agreement is in dispute

PRACTICE AND PROCEDCURE - Federal Court Rules - application to dismiss or permanently stay proceedings - application to strike out proceedings - whether applicant is precluded from adducing certain evidence - relevance of term in mediation agreement preventing a party from disclosing a document given to them "at the mediation" - whether the pleadings disclose the case the applicants wish to advance

Evidence Act 1995 (Cth) ss 131(1), 131(2)(f)

Federal Court of Australia Act 1976 (Cth) s 53B

Federal Court Rules O 4 r 14, O 11 rr 1A, 2, 16, O 20 r 2

Trade Practices Act 1974 (Cth) s 51AA

Contracts Review Act 1980 (NSW)

Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62, referred to

Pritchard v Racecage Pty Ltd (1997) 142 ALR 527, referred to

Deputy Commissioner of Taxation v Chamberlain [1990] FCA 71; (1990) 26 FCR 221, referred to

Commercial Bank of Australia Ltd v Amadio (1983) 157 CLR 447, considered

Crescendo Management Pty Limited v Westpac Banking Corporation (1988) 19 NSWLR 40, referred to

P v P [1994] HCA 20; (1994) 181 CLR 583, followed

Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594, cited

Prestia v Aknar (1996) 40 NSWLR 165, cited

White Industries (Qld) Pty Ltd v Flower & Hart [1998] FCA 806; (1998) 156 ALR 169, cited

RUDOLPH ABRIEL, VERA ABRIEL and PREMIER KNITS PTY LIMITED v AUSTRALIAN GUARANTEE CORPORATION and WESTPAC BANKING CORPORATION

NG 1015 of 1998

BRANSON J

SYDNEY

5 FEBRUARY 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1015 OF 1998

BETWEEN:	RUDOLPH ABRIEL First Applicant VERA ABRIEL Second Applicant PREMIER KNITS PTY LIMITED (ACN 005 879 920) Third Applicant
AND:	AUSTRALIAN GUARANTEE CORPORATION (ACN 000 015 485) First Respondent WESTPAC BANKING CORPORATION (ARBN 007 457 141) Second Respondent
JUDGE:	BRANSON J
DATE OF ORDER:	5 FEBRUARY 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The application for an order that the proceeding be dismissed, or alternatively permanently stayed, be dismissed.

2. The Amended Statement of Claim be wholly struck out.

3. Paragraphs 4 and 5 of the Application be struck out.

4. The applicants have leave to file and serve a further amended statement of claim by no later than 5 March 1999.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1015 OF 1998

BETWEEN:	RUDOLPH ABRIEL First Applicant VERA ABRIEL Second Applicant PREMIER KNITS PTY LIMITED (ACN 005 879 920) Third Applicant
AND:	AUSTRALIAN GUARANTEE CORPORATION (ACN 000 015 485) First Respondent WESTPAC BANKING CORPORATION (ARBN 007 457 141) Second Respondent

JUDGE:	BRANSON J
DATE:	5 FEBRUARY 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Introduction

1 The respondents have moved for an order that this proceeding be dismissed, or alternatively permanently stayed, pursuant to O 20 r 2 of the Federal Court Rules. In the further alternative they have moved for an order that the whole of the Amended Statement of Claim to be struck out pursuant to O 11 r 16 of the Federal Court Rules.

2 O 20 r 2 of the Federal Court Rules provides as follows:

"2(1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding -
(a) no reasonable cause of action is disclosed;
(b) the proceeding is frivolous or vexatious; or
(c) the proceeding is an abuse of the process of the Court,
the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.
(2) The Court may receive evidence on the hearing of an application for an order under sub-rule (1)."

3 O 11 r 16 of the Federal Court Rules provides as follows:

"16 Where a pleading -

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
(b) has a tendency to cause prejudice, embarrassment or delay in the proceeding; or
(c) is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out."

The pleadings

4 The substantive relief claimed by the Application is as follows:

"1. An order setting aside the deed between the parties dated about April 1998 ("the Deed").

2. An order that the consent orders made in or about April 1998 in Federal Court of Australia proceedings No. G388 [sic] of 1995 be set aside.

3. Further and consequent upon order 2, a declaration that the Deed does not operate as a bar to the applicants' continuing the proceedings No. G388 [sic] of 1995 and having the matter listed for further directions.

4. Damages, including pursuant to the Trade Practices Act (Cth), 1974 (s 82) and the Contracts Review Act (NSW), 1980 (s 7, Sch 1).

5. Further or in the alternative, damages in equity."

5 The crucial paragraphs of the Amended Statement of Claim, dated 24 November 1998, are the following:

"3. By Application and Statement of Claim filed 11 May 1995 the applicants commenced proceedings in the Federal Court of Australia No. G338 of 1995 against the first and second respondents herein (the Federal Court Proceedings).

4. On 31 March 1998 the parties to the Federal Court Proceedings attended a mediation (the Mediation) before Mr Trevor Morling QC in Sydney, New South Wales.

5. At the Mediation the applicants were represented by Mr Levitt, Solicitor and Ms Annabelle Bennett SC.

6. At the Mediation the respondents were represented by Mr Dowdy, Counsel.

7. At the Mediation Mr Dowdy produced to Ms Bennett SC a copy of a letter dated 8 December 1995 from Mr Levitt to Mr Gary Grunstein (the Letter).

8. In producing the Letter as set out in 7 above and in thereafter entering into the Deed, the respondents engaged in conduct in trade or commerce contrary to the provisions of section 51AA of the TPA, and unconscionable under the general law, in that:
(a) the respondents knew prior to the Mediation that the applicants were unable to afford legal representation in prosecuting the Federal Court Proceedings and were reliant on their legal representatives, being Ms Bennett SC and Mr Levitt, continuing to be prepared to act therein without requiring payment or security for payment before the matter was concluded (the applicants' special disadvantage);
(b) the applicants' legal representatives had informed the applicants that they would take the Federal Court Proceedings to trial on the basis referred to in (a);
(c) prior to the Mediation, the respondents stipulated that they would proceed with the Mediation only if Ms Bennett SC represented the applicants thereat;
(d) unbeknown to the applicants at the time, the respondents produced the Letter to Ms Bennett SC at the Mediation and informed her that the Letter had been received from the Law Society of New South Wales as a result of a complaint made by Mr Grunstein, with a view to influencing Ms Bennett SC not to continue to represent the applicants in the Federal Proceedings and to advise the applicants to settle the proceedings on the terms then being offered by the respondents;
(e) the Letter was of no direct relevance to the issues between the parties in the Federal Court Proceedings but was capable of being seen as embarrassing to the applicants' legal representatives;
(f) the Respondents knew that if Ms Bennett SC withdrew, the applicants would in all likelihood be left without legal representation and have no alternative but to settle the Federal Court Proceedings on terms extremely advantageous to the respondents and which did not reflect a genuine compromise of the claims made therein;
(g) following production of the Letter as set out in 7 above, of which production the applicants were at that time unaware, Ms Bennett SC informed the applicants that she would no longer be prepared to continue to act for the applicants in the Federal Court Proceedings on the basis referred to in (a) above; the production of the Letter was a material factor in that withdrawal, and in consequence of the withdrawal of senior counsel, Mr Levitt also withdrew;
(h) the applicants were unable to obtain any alternative representation and were thereby forced to accept the offer of the respondents to settle the matter on terms that did not represent a genuine compromise of the claims made in the Federal Court Proceedings on their merits;
(i) the respondents thereby took advantage of the applicants' special disadvantage.

9. In the circumstances set out above, the applicants in New South Wales executed a deed made in or about April 1998 (the Deed) and, pursuant to the Deed, consented to orders being made in the Federal Court Proceedings disposing of those proceedings and received the payment (the Payment) to be made to them thereunder.

10. The Deed, having been entered into in the circumstances set out in 8 above, was a contract that was unjust within the meaning of the Contracts Review Act 1980 (NSW).

11. Further, the applicants entered into the Deed under the undue influence of Ms Bennett SC, of which undue influence the respondents conspired to create, alternatively had knowledge of, in that:

(a) unbeknown to the applicants at the time, the respondents produced the Letter to Ms Bennett SC at the Mediation and informed her that the Letter had been received from the Law Society of New South Wales as a result of a complaint made by Mr Grunstein, with a view to influencing Ms Bennett SC not to continue to represent the applicants in the Federal Proceedings and to advise the applicants to settle the proceedings on the terms then being offered by the respondents;
(b) the Letter was of no direct relevance to the issues between the parties in the Federal Court Proceedings but was capable of being seen as embarrassing to the applicants' legal representatives;
(c) during the period from the production of the Letter to Ms Bennett SC to the entering into the Deed by the applicants, Ms Bennett SC continued to give legal advice to the applicants concerning the Federal Court Proceedings and the applicants continued to rely on that advice, of which the respondents were well aware;
(d) the legal advice given to the applicants during that period by Ms Bennett SC was that the applicants should accept the terms of settlement then being offered by the respondents (being terms substantially identical to the terms ultimately provided for in the Deed);
(e) unbeknown to the applicants at the time, but to the knowledge of the respondents, at the time of giving that legal advise Ms Bennett SC had a personal interest to avoid the possibility of being embarrassed by the public prosecution of the Letter in the Federal Court Proceedings and to avoid the possibility of being drawn into a complaint stated to have been made by Mr Grunstein to the Law Society of New South Wales (the Personal Interest);
(f) the Personal Interest conflicted with the interests of the applicants;
(g) neither the existence of the Personal Interest nor the circumstances which gave rise to it, being the matters referred to in (a) above, were disclosed to the applicants before they entered into the Deed.

12. The applicants offer to repay the Payment to the respondents."

6 The Amended Statement of Claim is signed by the first and second applicants and by the first applicant on behalf of the third applicant. On 16 December 1998 I gave conditional leave to the third applicant to carry on this proceeding otherwise than by a solicitor (O 4 r 14 of the Federal Court Rules).

Background

7 This background is derived principally from the applicants pleadings in Federal Court Action NG 338 of 1995 in which the parties were the same as the parties in the present proceeding.

8 In early 1994 the respondents required the applicants, as a condition of the first respondent advancing funds to the first applicant, to execute a deed of release in respect of claims which the applicants might have against the respondents. The first and second applicants executed the deed on their own behalves and on behalf of the third applicant.

9 In Action NG 338 of 1995 the applicants pleaded that their solicitor explained the terms of the deed to them but did not advise the applicants "of the import of the contents thereof". The applicants claimed a declaration that the deed was void or in the alternative voidable and unenforceable against them on grounds which included that -

(a) the crucial provision of the deed was contrary to public policy;
(b) the deed was unjust within the meaning of the Contracts Review Act 1980 (NSW);
(c) the deed was unconscionable; and
(d) the deed was procured by duress.

10 The respondents cross claimed against all applicants for monies payable under certain agreements.

11 The proceeding in Action NG 338 of 1995 went to mediation before the Hon. T.R. Morling QC ("Mr Morling"). Although the proceeding did not settle at the mediation conference a deed of settlement ("the Settlement Deed") was subsequently executed. It appears that pursuant to the Settlement Deed the applicants received payment from the respondents of $90,000. On 8 May 1998 Tamberlin J by consent made the following orders:

"1. Judgment be entered in favour of the first and second respondents on the amended statement of claim and the application herein filed on 11 May 1995 be dismissed with no order as to costs.

2. The amended cross claim be dismissed with no order as to costs."

12 In the present proceeding the applicants seek to set aside the consent orders made by Tamberlin J in Action NG 338 of 1995 and the Settlement Deed.

Consideration

13 As Dixon J pointed out in Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91 "[a] case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court ...". See also Pritchard v Racecage Pty Ltd (1997) 142 ALR 527 at 546.

14 The validity of the principle stated by Wilcox J in Deputy Commissioner of Taxation v Chamberlain [1990] FCA 71; (1990) 26 FCR 221 at 230 that, subject to exceptions not here material, "a court may set aside an order, made by consent and intended to carry out an agreement between the parties, upon any ground on which the agreement itself might be set aside" was not challenged before me.

15 The respondents contend that the proceeding is bound to fail as the applicants are precluded from adducing into evidence material crucial to their pleaded case, including the letter allegedly shown to Ms Bennett SC. Reliance is placed on clauses 16 and 18 of the Agreement to Mediate dated 31 March 1998 signed by the parties, their respective legal representations and Mr Morling ("the Mediation Agreement"), s 131(1) of the Evidence Act 1995 (Cth) ("the Evidence Act") and, by analogy, on s 53B of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act").

16 Clauses 16-18 of the Mediation Agreement are in the following terms:

"16. The parties and the mediator will not disclose to any person not present at the mediation any information or document given to them during the mediation, unless required by law to make such disclosure or unless permitted to do so under Clause 17 or Clause 21.

17. A party may disclose information or documents obtained during the mediation to a person not present at the mediation where that party needs to do so in order to obtain professional advice or where the person is within that party's legitimate field of intimacy. A party disclosing information or documents in these circumstances must inform the professional advisor or any such person that the information or documents are confidential.

18. The parties and the mediator agree that, subject to Clause 21, the following will be privileged and will not be disclosed, tendered as evidence, or be the subject of a subpoena to give evidence or produce documents, in any proceedings relating to the Dispute:

18.1 Any settlement proposal, whether made by a party or by the mediator.
18.2 The willingness of a party to consider such a proposal.
18.3 Any statement made by a party or the mediator during the mediation.
18.4 Any information or document prepared for the mediation.

17 Clause 21 of the Mediation Agreement has no present relevance.

18 Although paragraph 7 of the Amended Statement of Claim pleads that "[a]t the mediation" Mr Dowdy provided to Ms Bennett a copy of a letter dated 8 December 1995 from Mr Levitt to Mr Grunstein, the true case of the applicants, as I understand it, is that the copy letter was produced to Ms Bennett not in the course of the settlement conference before Mr Morling but outside the settlement conference at or about the time of the settlement conference. It cannot, in my view, be said that an argument that clauses 16 and 18 of the Mediation Agreement do not prevent the disclosure of what happened in such a circumstance is doomed to failure. A careful examination of the facts as established by the evidence may prove to be necessary. Plainly the discrepancy between the applicants' pleadings and the case which they wish to advance needs to be rectified. However, I am unable to be satisfied at this early stage of the proceeding that clauses 16 and 18 of the Mediation Agreement have the necessary consequence that the proceeding is bound to fail.

19 Section 131(1) of the Evidence Act provides as follows:

"(1) Evidence is not to be adduced of:

(a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or
(b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute."

20 Section 131(2) contains certain limitations upon the operation of s 131(1). Section 131(2)(f) provides that s 131(1) does not apply if:

"the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue."

21 In my view it is fairly open to be contended that the present proceeding is a proceeding in which the making of an agreement between the parties to settle their earlier dispute is in issue. I am not satisfied that s 131(1) of the Evidence Act has the necessary consequence that this proceeding is bound to fail.

22 Section 53B of the Federal Court Act makes inadmissible in any court evidence of anything said at a conference conducted by a mediator in the course of mediating anything referred to a mediator in accordance with the Federal Court Rules. The submissions of the respondents acknowledged that s 53B of the Federal Court Act has no direct relevance in this case as the dispute between the parties which came before Mr Morling for mediation was not referred to him in accordance with the Federal Court Rules. Reliance was placed on s 53B "by analogy". Little weight can be given to an argument of this character on an application of this kind. In any event, as is mentioned above, the evidence that the applicants apparently wish to lead would appear to fall outside the restrictions on admissibility imposed by s 53B of the Federal Court Act.

23 I am not satisfied that the confidentiality of the mediation by Mr Morling has the result that this proceeding must fail.

24 The substance of the causes of action that the applicants wish to advance in this proceeding, as I understand them, is that although the applicants entered into the Deed of Settlement following the receipt of legal advice of both senior counsel and a solicitor, the execution of the Deed of Settlement is open to challenge on two principal grounds. First, that their consent was, to the knowledge of the respondents, not voluntary by reason of the undue influence placed on them by Ms Bennett, her conduct being the result of action taken by the respondents which was calculated by the respondents to have this effect. Secondly, the respondents unconscientiously took advantage of the position of disadvantage in which the applicants found themselves concerning the obtaining of alternative legal representation, thereby forcing them to accept the respondents' offer.

25 It is not appropriate on this application to give consideration to the evidentiary difficulties which might attend the establishment of the case that the applicants wish to advance in this proceeding. The issues to which consideration is to be given are whether the causes of action which the applicants wish to advance are plainly doomed to failure and, assuming that they are not, whether the Amended Statement of Claim appropriately pleads such causes of action.

26 It may be that properly analysed, the cause of action sought to be pleaded in paragraph 11 of the Amended Statement of Claim should be seen as invoking the doctrine of unconscionable dealing or economic duress and not the closely related doctrine of undue influence (see Commercial Bank of Australia Ltd v Amadio (1983) 157 CLR 447 per Mason J at 461 and per Deane J, with whom Wilson J agreed, at 474; Crescendo Management Pty Limited v Westpac Banking Corporation (1988) 19 NSWLR 40). However, for present purposes I do not consider it necessary to reach a concluded view in this regard. Paragraph 8 of the Amended Statement of Claim is plainly intended to invoke the doctrine of unconscionable dealing.

27 As Deane J pointed out in Amadio's case at 474 "[t]he adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogued". In Pritchard v Racecage Pty Ltd I observed at 546:

"Conclusions as to whether particular conduct should be characterised in equity as unconscionable are based upon careful examination of the facts of each particular case. Such consideration involves, amongst other things, an examination of the precise relationship between the relevant parties, and consideration of their respective capacities and vulnerabilities (if any) in the circumstances in which they were involved the one with the other: Jenyns v Public Curator (Qld) [1953] HCA 2; (1952) 90 CLR 113 at 118-19 and 132-3."

28 In Crescendo Management Pty Limited v Westpac Banking Corporation at 46, McHugh JA, with whom Samuels and Mahoney JJA agreed, said:

"Pressure will be illegitimate if it consists of unlawful threats or unconscionable conduct but the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress."

29 The applicants have by their written submissions identified the factual essence of their case as follows:

"(a) unbeknown to the applicants at the time, the respondents produced the Letter of 8 December 1995 to Ms Bennett SC at the Mediation and informed her that the Letter had been received from the Law Society of New South Wales as a result of a complaint made by Mr Grunstein, with a view to influencing Ms Bennett SC not to continue to represent the applicants in the Federal Proceedings and to advise the applicants to settle the proceedings on the terms then being offered by the respondents;

(b) following the production of the Letter, Ms Bennett SC informed the applicants she was no longer prepared to act for the applicants beyond the Mediation and during the period after the Mediation up to the entering into the Deed of Settlement, Ms Bennett SC gave advice to the applicants to the effect that they should accept the settlement offer;

(c) unbeknown to the applicants at the time, but to the knowledge of the respondents, at the time of Ms Bennett SC giving that advice to the applicants, Ms Bennett SC had a personal interest to avoid the possibility of being embarrassed by the public production of the Letter in the Federal Court Proceedings and to avoid the possibility of being drawn into a complaint stated to have been made by Mr Grunstein to the Law Society of New South Wales."

30 Although, the case that the applicants wish to advance is novel, I am unable to conclude that it is doomed to failure. The application for an order that the proceeding be dismissed or permanently stayed must fail.

31 The Amended Statement of Claim, however, does not appropriately plead the case which the applicants wish to advance. Its deficiencies include the following. First there is the issue, discussed above, of whether certain conduct crucial to the applicants case occurred "[a]t the Mediation" as pleaded, or merely at or about the time of the mediation before Mr Morling.

32 Secondly, the Application and the Amended Statement of Claim places reliance on the Contracts Review Act 1980 (NSW) ("the Contracts Review Act"). The third applicant, being a corporation, is not able to maintain a claim under the Contracts Review Act. More importantly, the Contracts Review Act, being legislation of the Parliament of New South Wales, can not be understood as being intended to authorise the making of an order which would set aside, impair or otherwise detract from an order of the Federal Court. If it were intended to have such an operation it would be inconsistent with the Federal Court Act for the purposes of s 109 of the Constitution and invalid (P v P [1994] HCA 20; (1994) 181 CLR 583 per McHugh J at 635). The alleged cause of action based on the Contracts Review Act is doomed to failure and should be struck out.

33 Thirdly, the Application and the Amended Statement of Claim claim damages for the loss of the opportunity to pursue Action NG 338 of 1995 to determination. The applicants accept that such claims are unsustainable.

34 Fourthly, the Amended Statement of Claim does not contain, and contain only, a statement in a summary form of the material facts on which the applicants rely but not the evidence by which those facts are to be proved (O 11 r 2 of the Federal Court Rules). It includes particulars pleaded as material fact (eg par 8(b)), it pleads matters of fact and law which lack materiality (eg pars 8(e) and 11(b)), it contains pleas that lack appropriate precision (eg pars 8(f)), and it fails to provide particulars where particulars are necessary (eg par 11(e) so far as it pleads a personal interest in Ms Bennett to avoid the possibility of being embarrassed).

35 I am not satisfied that the reliance placed by the applicants on s 51AA of the Trade Practices Act 1974 (Cth) ("the TPA") is clearly unsustainable, although ultimately an argument that the alleged conduct of which the applicants complain did not take place "in trade or commerce" may succeed (Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594; Prestia v Aknar (1996) 40 NSWLR 165).

36 In my view the nature and extent of the deficiencies in the Amended Statement of Claim are such that it should be wholly struck out as tending to cause embarrassment or delay in the proceeding (O 11 r 16(b)). Paragraphs 4 and 5 of the Application which claim damages including damages pursuant to the TPA, the Contracts Review Act and in equity will also be struck out. Leave will be granted to the applicants to file and serve a further amended statement of claim.

37 As is mentioned above, the first and second applicants signed the Amended Statement of Claim. O 11 r 1A of the Federal Court Rules provides as follows:

"1A A pleading must -
(a) set out the name of the person who prepared the pleading; and
(b) include a statement by the person that the person prepared the pleading."

The applicants now have the benefit of the legal advice and representation of counsel. It is to be hoped that if the applicants exercise the leave to be given to them to file and serve a further amended statement of claim, their counsel will prepare this pleading for them. In this eventuality it will be important for the applicants to be conscious of the responsibilities of counsel in the preparation of a pleading, and in particular counsel's ethical responsibility in respect of a pleading which includes allegations which reflect adversely on the reputation of individuals. It is an ethical responsibility of counsel not lightly to plead such allegations but to satisfy himself or herself that the clients' instructions provide a proper basis for the making of such allegations (White Industries (Qld) Pty Ltd v Flower & Hart [1998] FCA 806; (1998) 156 ALR 169). Although the first and second applicant appear to believe otherwise, the allegations which they wish to make reflect seriously on the integrity of the legal representatives acting for the respective parties at the time of the mediation before Mr Morling. In particular, it is a serious reflection on the integrity of counsel, and even more on that of senior counsel, that he or she would, whilst acting in a professional capacity, fail to disclose to a client a conflict between his or her own interests and those of the client, and provide advice to a client calculated to advance his or her own interests at the expense of the interests of the client.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Associate:

Dated: 5 February 1999

Counsel for the Applicant:	Mr N. Kidd
Counsel for the Respondent:	Mr P.M. Wood
Solicitor for the Respondent:	Henry Davis York
Date of Hearing:	16 December 1998
Date of Judgment:	5 February 1999