Case: Australian Securities &amp; Investment Commission v Somerville [2008] NSWSC 788
Outcome: cited
submits that the following factors are also relevant: (a) the state of progression of the proceeding: Knight v Beyond Properties Pty Ltd (No 2) at [25]. (b) the degree to which cost and delay will be minimised by a single trial or by separate trials: Bishop v Bridgelands Securities Ltd at 314; (c) the efficient use of the resources of the parties and the court: Carter v Commissioner of Taxation at [23]; Dean-Willcocks v Air Transit International Pty Ltd at [34]; (d) that it is preferable from a public policy perspective to avoid a multiplicity of hearings: Main-Road Property Group Pty Ltd v Pelligra &amp; Sons Pty Ltd [2007] VSC 43 at [21] ; (e) any relevant public interest in the proceeding: Dean-Willcocks v Air Transit International Pty Ltd at [35]; and (f) the degree of similarity in the transactions alleged in the proceedings this may be a more weighty consideration than the somewhat technical point that the transactions do not form a series: Australian Securities &amp; Investment Commission v Somerville [2008] NSWSC 788 at [42] . SATTVIC'S SUBMISSIONS Limited and unique issues ASIC then submits that when the proceeding reaches the stage that an informed assessment can be made of whether any defendants would be prejudiced by a joint trial, other measures may be sufficient to avoid that prejudice. For example, ASIC says it has become commonplace in large and complex proceedings for trials to be staged in such a manner as to make it unnecessary for all parties to attend at all stages of the trial: Australian Securities &amp; Investment Commission v Somerville [2008] NSWSC 788 at [48] [50], [57]; Dean-Willcocks v Air Transit International Pty Ltd at [70]; Main-Road Property Group Pty Ltd v Pelligra &amp; Sons Pty Ltd at [25]; Jendas Pty Ltd v Jolly [1997] 2 VR 106 at 107. In Australian Securities &amp; Investment Commission v Somerville , Austin J observed that ASIC could, with the Court's encouragement, conduct its case in such a way that the days upon which the eighth defendant in that matter would need to be represented in court would be limited. Cost, delay and the efficient use of the resources of the parties and the Court The various factors which led Austin J of the Supreme Court of New South Wales to recently allow a joinder of defendants by ASIC in Australian Securities &amp; Investment Commission v Somerville are absent in the matter. There, Austin J, granted ASIC leave to join ten defendants in the one action. The first defendant was a Mr Somerville. The second defendant was the incorporated legal practice of which Mr Somerville had become a legal practitioner director. ASIC had contended that Mr Somerville had provided legal advice as a solicitor to each of the eight director defendants to the effect that they should sell the business or assets of a certain company to another purchaser company which each would control. The liability of Mr Somerville and his incorporated legal practice would only have arisen if contraventions by one or more of the other defendants were proved. It was the common participation of Mr Somerville as legal adviser that linked the transactions. Accordingly and most importantly, the cases against each of the eight director defendants were components of ASIC's case against Mr Somerville and his incorporated law firm for involvement in the contraventions by each director. It was, as his Honour found, an important part of ASIC's evidentiary case against Mr Somerville and his incorporated legal practice to show that, in respect of the eight transactions, there was a pattern and similarity devised by Mr Somerville [37]. Accordingly, ASIC and Mr Somerville were common parties to all claims. There was considered to be a likely saving of costs to ASIC and Mr Somerville by one proceeding, constituted with all ten defendants, going to trial. There was likely to have been a very substantial repetition of evidence should there have been a separation of the case against one of the defendants as Mr Somerville would have had to give evidence in the trial of that case as well as the case against the balance of the defendants. It was, accordingly, concluded that as a primary factor in refusing a separation order that the benefits to ASIC and Mr Somerville of a single proceeding in which the evidence of his involvement in the eight transactions was received once and for all was considered as of great significance. In this case, however, the common thread passing through the cases against each of the corporate defendants and indeed the personal defendants is that each of these cases concerns transactions involving Firepower BVI shares. There is, otherwise, no relationship between the corporate defendants nor any between Sattvic and either Mr Ward or Mr Johnston, the sixth and seventh defendants respectively. I am satisfied that it would be inconvenient to Mr Stein, particularly professionally, for the case against him to be tried together with the cases against the other defendants. More importantly, given the already adverse effect of these proceedings upon his reputation I think that the inevitable delay of a trial as against his company, Sattvic, would of itself render an injustice to him. I would expect such delay to be considerable in the circumstances. In my opinion, for these reasons, the motion should be granted with costs. I will invite the parties to bring in a minute of order reflecting these reasons. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate: Dated: 23 March 2009 Counsel for the Applicant: Mr M Pearce SC Solicitor for the Applicant: Blake Dawson Waldron Counsel for the Defendants: Mr M McCusker QC Solicitor for the Defendants: Freehills Date of Hearing: 5 February 2009 Date of Judgment: 23 March 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/250.html