Abdou & Ahmed - [2018] FamCA 396

FAMILY COURT OF AUSTRALIA

ABDOU & AHMED

[2018] FamCA 396

FAMILY LAW – PRACTICE AND PROCEDURE – Application to restrain a solicitor from further acting in the proceedings – Where the husband’s solicitors are family friends of the husband and wife – Where there is no evidence to suggest the husband’s solicitors have breached their legal or ethical duties – Where the circumstances are not sufficient to disqualify the husband’s solicitors from acting – Wife’s application dismissed.

Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 rr 17, 27

Bosgard & Bosgard [2013]FamCA 308
Grimwade v Meagher & Ors (1995) 1 VR 446
Holborow and Ors v Macdonald Rudder [2002] WASC 265
Kallinicos v Hunt [2005] NSWSC 1181
Kennon v Public Trustee of the Australian Capital Territory [2008] FamCA 919
Mitchell v Burrell [2008] NSWSC 772
Osferatu & Osferatu [2015] FamCAFC 177
Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501
Westpac Banking Corporation v Newey [2013] NSWSC 533

APPLICANT:

Ms Abdou

RESPONDENT:

Mr Ahmed

INDEPENDENT CHILDREN’S LAWYER:

Mr Ng

FILE NUMBER:

PAC

5203

2017

DATE DELIVERED:

1 June 2018

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

21 March 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Wong
SOLICITOR FOR THE APPLICANT:	Veritas Law Firm

COUNSEL FOR THE RESPONDENT:

Ms De Vere

SOLICITOR FOR THE RESPONDENT:

Withstand Lawyers

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:

Mr Ng of Adams & Partners

Orders

That the Wife’s application to restrain the Partners of Withstand Lawyers from acting for the husband in these proceedings be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Abdou & Ahmed has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 5203 of 2017

Ms Abdou

Applicant

And

Mr Ahmed

Respondent

REASONS FOR JUDGMENT

On 21 March 2018 various interlocutory applications were listed for interim hearing in this matter. Various orders were made by consent with the outstanding issue being an order sought by the wife to restrain the husband’s solicitor from further acting in the proceedings.
It was ordered that the matter proceed by way of written submissions as to the discrete issue for determination.

Context

The wife is presently aged 41 and the husband is aged 47.
The parties married in 2001. They separated under the one roof in mid-August 2017 and on 24 September 2017 the husband vacated the former matrimonial home at D Street, Suburb H and moved to his parents’ home nearby.
The wife commenced proceedings by application filed 17 October 2017. An Amended Application was filed by her on 12 March 2018 seeking orders by way of property adjustment and parenting orders in relation to the parties’ two children aged nearly 15 and six.
The husband filed an Amended Response on 20 March 2018 also seeking orders as to property adjustment and parenting.
At the interim hearing on 21 March 2018 the wife relied upon the following documents:
a)her Further Amended Initiating Application filed 12 March 2018;
b)her financial statement filed 12 March 2018;
c)her affidavit filed 12 March 2018; and
d)the affidavit of Ms G, the maternal grandmother, filed 17 January 2018.
The husband relied upon the following documents:
a)his Amended Response filed 20 March 2018;
b)his financial statement filed 20 March 2018;
c)his affidavit filed 20 March 2018;
d)the affidavit of Mr M, Solicitor, filed 19 February 2018;
e)the affidavit of Ms J, Solicitor filed 19 February 2018;
f)the affidavit of Ms K, the paternal grandmother, filed 10 November 2017; and
g)the affidavit of Mr N Ahmed, the paternal grandfather, filed 9 November 2017.
On 21 March 2018 interim orders were made by consent that, in summary, provided:
a)for the children to live with the father and for the younger child only to spend time with the mother under the supervision of a community-based supervision service;
b)that otherwise the mother be permitted to attend the younger child’s school events on occasions where both parents are reasonably expected to attend;
c)that the mother undertake random blood tests for the purposes of CDT testing as to her alleged alcohol addiction;
d)that the father and mother do all things necessary to secure vacant possession of the property at M Street, Suburb H;
e)that pending settlement of the sale of the property at M Street, Suburb H the father pay by way of interim spouse maintenance to the wife the sum of $715.00 per week;
f)that the father continue to pay as they fall due and payable mortgage payments and outgoings in relation to the parties’ real property interests;
g)that the husband continue to operate the business O Pty Ltd in an orderly and proper manner and provide to the wife ongoing disclosure as to the conduct of the business; and
h)that the parties do all necessary things to cause a sale of the property at M Street, Suburb H and the net proceeds of sale to be paid:
i)as to $20,000.00 to the wife’s solicitors to meet the costs of the mother’s supervised time with the children;
ii)in payment of the Chapter 15 single experts fees;
iii)in payment of 50 per cent of the balance to the wife from which monies the wife is to reimburse the husband for any fees paid by him for supervision of her time with the children; and
iv)the balance be held by the husband’s solicitors in trust for the parties subject only to payment of assessed taxation liabilities.

The husband’s solicitors: Mr M and Ms J

The wife says that she knows personally the two directors of the firm Withstand Lawyers presently acting for the husband, having attended Mr M and Ms J’s wedding in 2015 as a personal friend.
The wife says she was introduced to Mr M by the husband in about 2013 with a friendship developing and Mr M visiting the parties’ home about two or three times a week. The wife asserts that she became close friends of Mr M and his extended family.
The wife further contends that in 2015 following the parties’ purchase of a property at P Street, Suburb F it was proposed that the wife open a skin clinic at the premises. The husband informed her that he had proposed a business arrangement with Mr M for him to open up a law firm in the premises at P Street to which the husband would refer business with the husband to receive a 50 per cent profit from the law firm. The wife asserts that some $80,000.00 was expended in renovating premises for the proposed legal practice but that the premises were subsequently never occupied by Mr M who set up practice elsewhere. The wife contends that the husband refers business to Mr M for which the husband receives a referral fee.
The wife has attended the law practice subsequently set up by Mr M in Suburb R.
At the time of separation the wife, upon hearing that the husband proposed to consult Mr M following the breakdown of the marriage, requested that the husband not do so.
The husband for his part denies any close relationship between the parties and the principals of his solicitors firm, although he concedes a family friendship with Mr M and that his family attended the solicitors’ wedding. He denies the wife’s assertion as to any business arrangement with the solicitor save for an agreement for Mr M to rent the parties’ property for free for six months with the parties to fund renovations on that property. The husband concedes funds for renovations were deposited into the solicitor’s account.
The husband concedes that he provides legal reports from time to time as requested by the solicitor.
Both solicitors have sworn affidavits. Mr M concedes a friendship with the parties and their family including the parties’ attendance at his wedding in 2016 subsequent to which he has not spoken to the wife. He concedes discussions with the husband as to the husband investing in his proposed legal practice and that certain renovations were done to premises that he did not ultimately occupy.

The Applicable Principles

In Grimwade v Meagher & Ors (1995) 1 VR 446 at 452 the test as to whether a lawyer should be prevented from acting was described in the following terms:
Whether a fair minded reasonably informed member of the public would conclude that the proper administration of justice required that the [lawyer] be … prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of [lawyer] without good cause.
In Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 at [52]-[58], Brooking JA identified three possible grounds for restraining a solicitor or counsel from acting for a particular party to litigation:
a)the danger of misuse of confidential information;
b)a breach of a fiduciary duty of loyalty not to act against a client, or against a former client in the same matter or a closely related matter; and
c)the inherent jurisdiction of the court to control the conduct of solicitors and counsel as officers of the court.
In Holborow and Ors v Macdonald Rudder [2002] WASC 265 at [27] his Honour EM Heenan J said:
27.Concurrently with the obligations to the client will be the practitioner’s obligations to the court which have been described as an “overriding duty” - per Mason J [sic] in Giannarelli v Wraith (1988) 165 CLR 543 at 555, where the Chief Justice cited a passage from the judgement of Pollock CB in Swinfen v Lord Chelmsford (1860) 5 H & M 890 at 921; [1860] EngR 838; 157 ER 1436 at 1499. Mason CJ went on to expound the nature of counsel’s obligation to the court in a manner which is germane in the present case, not only because it identifies the duties owed by a legal practitioner conducting litigation but because it also emphasises how the forensic conduct of litigation must necessarily be left to the discretion of the legal practitioners representing them largely, if not completely, free of simultaneous supervision by the court itself...
…This is why our system of justice as administered by the courts has proceeded on the footing that, in general, the litigant will be represented by a lawyer who, not being the mere agent for the litigant, exercises an independent judgement in the interests of the court.
Heenan J importantly then went on to say:
33.If there are circumstances which are likely to imperil the discharge of these duties to a court by a legal practitioner acting in a cause, whether because of some prior association with one or more of the parties against whom the practitioner is then to act, or because of some conduct by the practitioner, whether arising from associations with the client or a close interest which gives rise to the fair and reasonable perception that the practitioner may not exercise the necessary independent judgement, a court may conclude that the lawyer should be restrained from acting, even for a client who desires to continue his service [citations omitted].
Later in Kallinicos v Hunt [2005] NSWSC 1181 the principles involved in the application to restrain the solicitor from acting for the opposing party were discussed at length by Brereton J and were, relevantly, summarised by him at [76]:
•The court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice.
•The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
•The jurisdiction is to be regarded as exceptional and is to be exercised with caution.
•Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause.
•The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.
In Mitchell v Burrell [2008] NSWSC 772 Brereton J observed, after finding that the solicitor may be a witness and that his evidence might be controversial:
20.That said, I do not accept that the mere circumstance that a solicitor will be a material witness, even on a controversial matter, of itself justifies restraining the solicitor from continuing to act. As Windeyer J pointed out in Scallan v Scallan [2001] NSWSC 1078, it is, for example, not unusual for instructing solicitors in contested probate proceedings to give evidence of facts relevant to instructions for and execution of a Will. Similarly, in contested conveyancing proceedings, it is not unusual for solicitors who have acted on the conveyance to continue to act in the proceedings for specific performance or rescission and to give evidence in those proceedings. Accordingly, despite Rule 19 of The Law Society of New South Wales Professional Conduct and Practice Rules, which imposes a professional obligation (as distinct from a private right), I do not accept that in every case where a solicitor acting for a party is a material witness even on a controversial matter, the Court will restrain the solicitor from continuing to act. Although some observations of Campbell CJ in Chapman v Rogers; ex parte Chapman [1984] 1 Qd R 542, 545, may go somewhat further, the cases indicate – as Campbell CJ did in that case itself – that the line is crossed only 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, albeit that the relevant stake may not necessarily be financial, but involves the personal or reputational interest of the solicitor, as will be the case if his or her conduct and integrity come under attack and review in the proceedings. The presence of such circumstances will be a strong indication that the interests of justice – which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests – require the lawyer to be restrained from continuing to act.
21.The point is illustrated, in Windeyer J's judgment in Scallan (at [10]), by his Honour’s reference to the difference between the case where the (mere) interest of a solicitor is one that arises simply in supporting the success of his or her client (for example, in connection with advice about discovery or the commencement or continuation or abandonment of proceedings), and the case where the solicitor has an interest in the result of an action "additional to his interest in doing his best for a client to have success in an action". Similarly, in Kooky Garments Ltd v Charlton [1994] 1 NZLR 587, Thomas J recognised the distinction between the situation where solicitors were, in effect, called on to defend their own actions or advice on the one hand – in which case it was inappropriate that they act – and other cases (at 589-590):
What I have said, of course, does not apply where the advice given is unrelated to liability or the question in dispute. Advising a client to prosecute or defend a claim does not attract these observations. They are restricted to the situation where the acts or omissions of the solicitors are an integral part of the other party's complaint or the client has been sued in circumstances where he or she was acting on the advice of their solicitors and it is effectively that advice which is in issue. In such cases, apart altogether from the position of the client, the Court is not receiving the assistance of counsel who are observably independent. Independence is a function of counsel. The Court is entitled to assume that solicitors and counsel appearing before it possess that independence.
On this issue in Kennon v Public Trustee of the Australian Capital Territory [2008] FamCA 919 Faulks J said:
24.On the other hand, if the solicitor had been a direct witness relating to a primary matter relating to the establishment of the issues in dispute before the Court, it would be a matter of some concern in the administration of justice, adopting the phrase used by his Honour Brereton J, that a primary witness should also be acting for one of the parties and there may be a concern that his or her objectivity would be in question. Again, a matter of circumstances.
The caution to be exercised was referred to by Pembroke J in Westpac Banking Corporation v Newey [2013] NSWSC 533 at [22] said:
The law and lawyers would be held in disrepute if judges acceded too readily and too often to such applications. Before doing so, there must be some realistic sense of impropriety about the circumstances; something that sensibly justifies the conclusion that unless an injunction was granted, the integrity of the judicial process would be impaired.
More recently Fowler J in Bosgard & Bosgard [2013]FamCA 308 (where the solicitor was in a de facto relationship with the litigant husband) said;
29.It is clear that a solicitor owes two duties: one to the client and one to the Court.
…
34.The authorities make it clear that the priority, in any conflict of fulfilment of duties owed by a solicitor, must be the fulfilment by the solicitor of their duty to the Court.
…
38.The Court is never assisted by litigation riding on a wave of the emotions which might be engendered by such events; the reality of the Court’s task is not to punish vice and reward virtue, but to make decisions pursuant to its powers under the Family Law Act (Cth), in this case as to property.
39.The Court is assisted in the administration of justice where the litigants and legal practitioners focus on the issues of importance to that process. It is assisted where there is a focus on objectivity among legal practitioners and a capacity for them to be independent of their clients in the fulfilment of both their duty to the Court and their duty to clients. A lack of such focus and objectivity gives rise to the possibility of the integrity of the justice system being undermined.
40.In considering any relief of the type sought, the Court has to consider the prejudice caused to the parties…
In Osferatu & Osferatu [2015] FamCAFC 177 Full Court succinctly summarised the position as follows:
20.There are three established categories on the basis of which solicitors may be restrained from acting against their client or former client. They are: breach of confidence, breach of fiduciary duty and the inherent jurisdiction of a court over its officers and to control its process. Each category has its own principles which guide its operation. The third category may be involved in conjunction with either of the first two so there is clearly an overlap; nonetheless, the basis for the exercise of the jurisdiction in each is different: (Kallinicos v Hunt [2005] NSWSC 1181).
A solicitor, in addition to the common law position, has obligations under the applicable Professional Conduct Rules.

Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 relevantly provide:
Rule 17:Independence—avoidance of personal bias
17.1A solicitor representing a client in a matter that is before the court must not act as the mere mouthpiece of the client or of the instructing solicitor (if any) and must exercise the forensic judgments called for during the case independently, after the appropriate consideration of the client’s and the instructing solicitor’s instructions where applicable.
Rule 27: Solicitor as material witness in client’s case
27.1In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the court, the solicitor may not appear as advocate for the client in the hearing.
27.2In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the court the solicitor, an associate of the solicitor or a law practice of which the solicitor is a member may act or continue to act for the client unless doing so would prejudice the administration of justice.
It is not readily apparent in the circumstances of this matter that the solicitors fall within any category referred to in Osferatu (supra) such as would require the Court to restrain them from acting for the husband or that the solicitors have breached any of their legal or ethical obligations as to the avoidance of bias or conflict of interest.
There is no submission from the wife that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that the legal practitioners should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
Indeed, as the authorities emphasise, the relief sought by the wife is exceptional and is to be exercised with caution.
The wife may feel offended that friends of both her and the husband choose to act for her husband. Such is not a disqualifying circumstance.
The wife’s application will be dismissed.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 1 June 2018.

Associate:

Date: 1 June 2018