ACN 092 675 164 Pty Ltd v Suckling
[2018] VSC 620
•19 October 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2017 00146
| IN THE MATTER OF ACN 092 675 164 PTY LTD (IN LIQUIDATION) (ACN 092 675 164) (FORMERLY KNOWN AS NATIONAL BUILDERS GROUP PTY LTD) ACN 092 675 164 PTY LTD (IN LIQUIDATION) (FORMERLY KNOWN AS NATIONAL BUILDERS GROUP PTY LTD) | First Plaintiff |
| RICHARD TRYGVE ROHRT IN HIS CAPACITY AS LIQUIDATOR OF ACN 092 675 164 PTY LTD (IN LIQUIDATION) (FORMERLY KNOWN AS NATIONAL BUILDERS GROUP PTY LTD) | Second Plaintiff |
| v | |
| MATTHEW SUCKLING IN HIS CAPACITY AS EXECUTOR OF THE DECEASED ESTATE OF BARRY SUCKLING | First Defendant |
| ROBERT CANTAMAGLIA | Second Defendant |
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JUDGE: | RIORDAN J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 October 2018 |
DATE OF RULING: | 19 October 2018 |
CASE MAY BE CITED AS: | ACN 092 675 164 Pty Ltd v Suckling |
MEDIUM NEUTRAL CITATION: | [2018] VSC 620 |
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LEGAL PRACTITIONERS — Application to restrain solicitor from acting against former corporate client — Whether solicitor should be restrained in the interests of the administration of justice — Whether there is a continuing duty of loyalty that prevents a solicitor acting against former clients in the same or related matter — Whether there is a difference in substance between relief sought on the administration of justice ground and the duty of loyalty ground — Relevance of the possibility that a solicitor may be a witness considered.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | D H Denton QC with J J Rudd | Nerlich Lawyers |
| For the First Defendant | A P Rodbard-Bean | GZP Legal |
| For the Second Defendant | No appearance | - |
HIS HONOUR:
By summons dated 1 August 2018, the plaintiffs apply for an order that, pursuant to the inherent jurisdiction of this Court, the first defendant’s solicitors, GPZ Legal, and a partner at that firm, Nick Galatas, be restrained from acting for the first defendant in this proceeding.
For the reasons given below, I consider that GZP Legal and Mr Galatas should not be restrained from continuing to act for the first defendant in this proceeding.
The proceeding
The second plaintiff (‘the Liquidator’) is the liquidator of the first plaintiff (‘the Company’), which was placed into liquidation on 21 March 2012.
The first defendant is the executor of the deceased estate of Barry Suckling, who was a director of the Company at all material times prior to the liquidation. The second defendant was a director of the Company from 13 July 2009 to 19 December 2011.
By originating process filed on 16 June 2017, the plaintiffs seek declarations and orders pursuant to s 588M(2) of the Corporations Act 2001 (Cth) that the defendants each pay to the Liquidator an amount equal to the debts incurred by the Company after it allegedly became insolvent.
By their amended statement of claim filed 21 September 2018, the plaintiffs allege as follows:
(a) The Company was insolvent from 31 May 2011.
(b) There were reasonable grounds to suspect that the Company was insolvent from that date, on the basis of the following assertions contained in an Expert Solvency Report of Mr Laurence Fitzgerald dated 29 August 2018:
(a)The Company did not have sufficient liquid (current) assets available to meet debt due and payable at the same time.
(b)The Company had a liquidity ratio below 1.0.
(c)The Company had increasing overdue Commonwealth and State tax and statutory obligations.
(d)The Company had increasing overdue debts to trade creditors, with 35% of such debts outstanding for 60 days or more as at 31 May 2011 and the proportion ever increasing until the Relation Back Day.
(e)The Company was receiving formal demands from creditors from 24 August 2011 for payment of outstanding debts incurred between November 2010 and late 2011.
(f)The Company was making rounded payments to 3 major trading creditors from 8 June 2011.
(c) Alternatively, the Company was insolvent from 22 July 2011 when it entered into a contract to purchase a property at 218–220 Albert Road, South Melbourne for $9,625,458, which required a deposit of $2,192,631 to be paid over four tranches up to 19 October 2011; and the balance of $7,432,827 to be paid on 1 December 2011.
(d) There were reasonable grounds to suspect that the Company was insolvent on 22 July 2011 in the circumstances described in sub-paragraph (b) above; and it did not have the capacity to secure finance to enable the completion of the real estate contract.
During these periods of alleged insolvency the Company incurred debts and suffered loss of $6,044,870.84 and $5,227,186.59, respectively.
By his defence dated 8 September 2017, the first defendant:
(a)denies that the Company was insolvent on 22 July 2011;
(b)alleges that Barry Suckling acted in good faith and had no reasonable grounds for suspecting that the Company was insolvent and that he relied on advice and information provided by the Company’s financial controller and its accountants, Preda Chartered Accounting;
(c)denies that there were reasonable grounds to suspect that the Company became insolvent by entering into the real estate contract; and
(d)denies that the Company incurred unsecured debts in the sum of $7,397,874.87 at a time when it was insolvent.
By his defence dated 8 September 2017, the second defendant makes similar denials to the first defendant. In addition, he pleads that he was not an active participant in the management of the company in the relevant period.
Background facts to the application
By creditor’s statutory demand dated 5 October 2011, ARN Broadcasting Pty Ltd (‘ARN’) demanded payment from the Company of $93,705.33.
By creditor’s statutory demand dated 6 October 2011, Double T Radio Pty Ltd (‘Double T’) demanded from the Company payment of the sum of $123,114.35.
By creditor’s statutory demand dated 10 October 2011, Austereo Pty Ltd (‘Austereo’) demanded from the Company payment of the sum of $122,716.46.
On 12 October 2011, the Company retained GPZ Legal to act on its behalf with respect to the three statutory demands.
On 17 October 2011, Mr Galatas of GPZ attended a meeting with Mr Suckling and other Company representatives in relation to the statutory demands. In particular, the plaintiff relies upon the following notes, purportedly made by Mr Galatas at that meeting:
(a)‘not trading whilst insolvent’;
(b)[apparently in reference to ARN and Austereo] ‘will only miss out if we go under’.
On 21 October 2011, Australian Traffic Network Pty Ltd (‘ATN’) filed proceedings in the New South Wales District Court against the Company seeking the recovery of a debt of $207,600 plus interest and costs for advertising services provided.
On 24 October 2011, Mr Galatas attended a meeting with Mr Suckling and Mr Nicholas Giasoumi, who was a registered liquidator. The plaintiffs allege that Mr Galatas’s file note of the meeting recorded a discussion of the financial position of the Company, the three statutory demands and the ATN proceeding. In particular, they rely upon the following file notes:
(a) ‘Bank won't give us money’;
(b) ‘Admin
– all debts frozen
=> Meeting 1 Month
=> Re Arrangement=> Voted on by Creditors’;
(c) ‘Administrators are liable for debts
– so need the cash’;
(d) ‘Can't let them apply for wind up [indistinct] will kill us’;
(e) ‘[ + can we adjourn wind up app- ]’;
(f) ‘(1) Move City Rd
(2) Admin not the best option
(3) I need to delay creditors’.
By email of 24 October 2011 to Mr Galatas and Mr Giasoumi, Mr Strudt, who was company secretary of the Company, said as follows:
I have spoken with Barry Suckling in regards to your meeting with him today at GPZ Legal.
He has advised me that we are able to continue to trade and would be viewed as a solvent company. Is this correct? As I am the Company Secretary and as a Company Officer, I too have some exposure if we are to be found trading insolvent.
By email of 25 October 2011 to Mr Strudt and Mr Giasoumi, Mr Galatas stated:
Yesterday's meeting was not about solvency and we were not asked to consider the question of trading whilst insolvent.
The meeting was about considering the available options to deal with NBG's creditors who are demanding payment of the whole of their debt. Barry was asked to and provided an outline of the company's asset and liability position as well as a summary of its main creditors and debtors. The best way to manage the creditors, having regard to Barry's instructions on the general financial position of the company was considered. I understand your accountant, Preda, has advised you on trading and solvency.
Nicholas and I were of the view that it would be best to seek to deal with each of the Creditor's Statutory Demands rather than enter into Administration.
Seeking to refinance or otherwise obtain additional finance was also discussed.
By a letter dated 25 October 2011 to the solicitors for Austereo, Mr Galatas stated:
Our client intends to pay the debt owing to your client in full. It cannot however pay the debt by the due date under the Creditor's Statutory Demand.
On 28 October 2011, the Company filed originating processes against ARN and Double T, respectively, seeking to set aside their statutory demands.
On 2 November 2011, GPZ Legal filed an originating process on behalf of the Company seeking to set aside the Austereo statutory demand.
By faxed letter of 16 November 2011 to the solicitors for ARN and Double T, GPZ Legal attached a Deed of Release and Settlement executed by the Company in which the Company agreed to pay a total of $216,819.68 (being the total of the sums claimed in the ARN and Double T statutory demands) by instalments of $20,000 per month.
On 21 November 2011, GPZ Legal filed a notice of appearance on behalf of the Company in the ATN proceeding.
By letter dated 1 December 2011 to the solicitors for Austereo, Mr Galatas stated:
Our client is unable to pay the outstanding sum, in full, without further delay, as you require in your letter dated 22 November 2011. If our client is wound up, it is unlikely your client will receive any money…
By email of 7 December 2011 to Mr Suckling, Mr Galatas said with respect to a settlement proposal received from the solicitors for Austereo that:
I think it's fine for your purpose. As I understand it, if your proposed sale falls through the bank will appoint a liquidator so you lose nothing by agreeing to this offer.
By email of 19 December 2011 to the solicitors for Austereo, Mr Galatas attached a Deed of Acknowledgement of Debt, Guarantee and Charge in which the Company acknowledged it was indebted to Austereo for $122,716.46 (being the amount claimed in the statutory demand) and agreed to repay the amount of the debt plus costs of $12,000 and interest by 20 February 2012.
By email of 14 January 2012 to the solicitors for Austero, Mr Galatas stated:
I note that clause 10 of the Deed of Agreement provides that a Withdrawal of Caveat will be provided 7 ‘months’ from receipt of payment. This must be a typographical error and should, I expect, be a reference to 7 days.
I would be grateful if you can confirm that you will provide a Withdrawal of Caveat upon confirming you hold clear funds. This is critical to my client's finance arrangements.
By a letter dated 17 January 2012 to Mr Galatas, the solicitors for Austereo replied as follows:
The reference to seven months is not a typographical error ... It was deliberately included in the deed to cover the not inconsiderable risk which faces our client that your client company could have a liquidator appointed (or possibly Mr Suckling could have a trustee in bankruptcy appointed) within the next six months ...
By letter dated 27 January 2012 to Mr Galatas, the solicitors for ATN enclosed a notice of an order in the District Court of 25 January 2012 that the Company pay ATN $214,971.47, inclusive of costs.
By creditor’s statutory demand dated 7 February 2012, ATN demanded the sum of $215,731.23 from the Company.
By originating process filed on 29 February 2012 by GPZ Legal, the Company sought to set aside the ATN statutory demand.
On 21 March 2012, the Company was placed in liquidation.
In about mid-2013, GPZ Legal handed to the Liquidator its files with respect to its retainer by the Company.
By writ filed in this Court on 29 August 2013, the plaintiffs sought relief for alleged misuse of the Company’s intellectual property. The claim was settled after a mediation and discontinued on 23 March 2016. GPZ Legal acted for Mr Suckling in defending that proceeding.
On 23 and 24 February 2015, Mr Suckling was publicly examined by the Liquidator. GPZ Legal acted for Mr Suckling on that examination.
On 18 August 2017, the plaintiffs filed this proceeding. GPZ Legal has acted for Mr Suckling in defending this proceeding including a mediation.
On 3 February 2018, Mr Suckling died.
On 19 March 2018, pursuant to leave of Judd J given under s 237 of the Corporations Act, GPZ Legal filed an originating process in which the Company claimed damages for breach of contract against the Commonwealth Bank of Australia and breach of duty by Mills Oakley.
By letter dated 29 June 2018, the plaintiffs’ solicitors objected to GPZ Legal continuing to act for the estate of Mr Suckling in this proceeding.
Plaintiffs’ submissions
In their written submissions, the plaintiffs submitted that GPZ Legal (which includes Mr Galatas) should be restrained from continuing to act on behalf of the first defendant:
(a)to prevent the ongoing risk of misuse of the first plaintiff’s confidential information;
(b)to ensure the due administration of justice; and
(c)to preserve the duty of loyalty owed by a solicitor to a former client.
With respect to the confidential information, it was submitted that GPZ Legal was necessarily privy to confidential information during the period it acted for the Company. Such information is ‘now of direct relevance to the issues in this proceeding; namely, the questions of insolvency, reasonable grounds for any suspicion of insolvency, and reasonable reliance of the [Company’s] directors on third party advisers’.
With respect to the inherent jurisdiction of the Court to regulate the administration of justice, it was submitted that a fair minded, reasonably informed member of the public would conclude that, to preserve the appearance of justice, the proper administration of justice requires that GPZ Legal be enjoined from acting, on the following grounds:
(a)GPZ Legal were acting against their former client in circumstances where they had acted for the Company during the alleged period of insolvency.
(b)The fact that Mr Galatas may potentially be required to produce documents or give evidence is sufficient to compromise the independence and objectivity of GPZ Legal and Mr Galatas.
(c)GPZ Legal is an unsecured creditor of the Company, and has a direct pecuniary interest in the outcome of the proceeding favourable to the plaintiffs.
With respect to GPZ Legal’s duty of loyalty to a former client, the plaintiffs relied on the following facts:
(a)The matters in issue in this proceeding are sufficiently closely related to those in which GPZ Legal and Mr Galatas formerly acted for the Company.
(b)The Liquidator, as an officer of the Court, acts in the best interests of the Company and its creditors, and ought not to be thwarted by the actions of the Company’s former solicitors.
In oral submissions, Mr Denton QC, who appeared for the plaintiffs, did not submit that:
(a)the conversations recorded in GZP Legal’s file notes, referred to at paragraphs [14] and [16] above, were relevant to the issue of insolvency; or
(b)the confidentiality of those conversations between Mr Suckling and Mr Galatas was such that it would prevent Mr Suckling from giving evidence about them or speaking to Mr Galatas about them.
However, he contended as follows:
(a) The conversations may be relevant to whether, at the relevant times, Mr Suckling acted in good faith and had no reasonable grounds of suspecting that the Company was insolvent.
(b) Mr Galatas accepting a retainer to act against the interests of the Company:
(i) was a breach of his duty of loyalty; and
(ii)would cause a fair minded, reasonably informed member of the public to conclude that the proper administration of justice requires that GPZ Legal be enjoined from acting, to preserve the appearance of justice.
In particular, he contended that the Company was prejudiced because the retainer prevented the Company’s lawyers from speaking to Mr Galatas about the relevant conversations. This was, in an unorthodox sense, a ‘misuse’ of the information held by Mr Galatas.
(c) Particularly in circumstances where Mr Sucking is now dead, there is a real likelihood that the Company will call Mr Galatas to give evidence.
With respect to the delay of the plaintiffs in bringing this application, it was submitted that there has been no delay since the documents comprising GZP Legal’s file in respect of the Company were provided by the plaintiffs to their solicitors; and it should be accepted as reasonable that the plaintiffs had not identified the relevant documents at an earlier time. It was further submitted by Mr Denton QC that the great volume of Company documents in the Liquidator’s possession explained the delay (however, there is no evidence as to the quantity of material or that such quantity caused the delay).
First defendant’s submissions
With respect to the allegation that the confidential information will possibly be misused, in its written submissions the first defendant submitted as follows:
(a)The plaintiffs had failed to identify precisely the confidential information that was possessed by GPZ Legal or how it could be potentially misused.
(b)The notes of the meeting of 24 October 2011, and the email the following day, evidence the fact that Mr Galatas did not discuss questions of insolvent trading with Mr Suckling and the Company officers. This is confirmed by Mr Galatas’ affidavit sworn 27 September 2018. The plaintiffs’ submission that something may have been said about the solvency of the Company which is capable of misuse is total speculation.
(c)The failure to call Mr Giasoumi (the registered liquidator), or produce material from his files, permits a Jones v Dunkel[1] inference to be drawn.
(d)If there was a discussion between Mr Galatas and Mr Suckling concerning the Company’s solvency and its officers’ liability, that information could not possibly be misused to the disadvantage of the plaintiffs.
(e)To the extent that there was any privileged conversation, it was a joint privilege between the Company and Mr Suckling and the plaintiffs cannot prevent it being used by Mr Suckling.
(f)The solvency of the Company will be determined by the expert analysis of the books of the Company and not from what occurred when Mr Galatas acted in and about October 2011.
(g)To the extent that any conversation might be relevant to Mr Suckling’s state of mind, he has now died and will not be giving evidence and his state of mind as to solvency is to be assessed objectively. In any event, Mr Galatas has deposed that he has no knowledge of Mr Suckling’s state of mind in October 2011.
[1](1959) 101 CLR 298, 308 (Kitto J), 312 (Menzies J) and 320–321 (Windeyer J).
With respect to the administration of justice, it was submitted that:
(a)There was no realistic possibility that Mr Galatas will be called as a material witness in the proceeding, and he has deposed to having no recollection of the relevant events (which was to be expected in view of the expiration of time).
(b)The solvency of the Company will be determined by expert analysis of the books of account.
With respect to the duty of loyalty, it was submitted as follows:
(a)There was no separate duty of loyalty to a former client, and the decisions of the Victorian Court of Appeal in McVeigh v Linen House Pty Ltd,[2] and Brooking JA in Spincode Pty Ltd v Look Software Pty Ltd[3] (that a solicitor does owe a duty of loyalty to a former client) are inconsistent with the weight of Australian authority and in particular the decisions of the New South Wales Court of Appeal in Cooper v Winter[4] and Maxwell-Smith v S & E Hall Pty Ltd.[5]
(b)Intermediate appellate courts and trial Judges should not depart from decisions of intermediate appellate courts in other jurisdictions of the Commonwealth of Australia unless they are convinced that the interpretation is plainly wrong.[6] This principle applies to non-statutory law.[7]
(c)In the alternative, if the duty of loyalty is applicable, Mr Galatas is not acting against a former client in the same matter and neither are they closely related.
[2][1999] 3 VR 394 (Callaway and Batt JJA).
[3][2001] 4 VR 501 (‘Spincode’).
[4][2013] NSWCA 261 (McColl, Barrett, Ward JJA).
[5](2014) 86 NSWLR 481, 486 [24](Barrett JA).
[6]Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, 492 (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ).
[7]Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 151–2 [135] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).
Further, it was submitted that the application should be refused because the exercise of the jurisdiction to restrain a solicitor from acting is exceptional.[8] The delay in bringing this application is unexplained, in circumstances where the relevant GPZ Legal files were delivered to the Liquidator more than 5 years ago. Moreover, the Liquidator’s belated decision to make the application after completion of the mediation has been taken to forensically disadvantage the estate of the late Mr Suckling which is another ground for refusing relief.[9]
[8]Kallinicos v Hunt (2005) 64 NSWLR 561, 582 [76] (‘Kallinicos’).
[9]Kallinicos 582 [76] (Brereton J); Spincode [60] (Brooking JA); Sent v John Fairfax Publication [2006] VSC 429 [61] (Nettle J) (‘Sent’); Black v Taylor [1993] 3 NZLR 403 (Cooke P, Richardson and McKay JJ).
Legal Principles
On behalf of the plaintiffs, it was contended that there were three bases on which a Court could restrain a lawyer from continuing to act against a former client, being:
(a) to prevent the misuse of confidential information;
(b) to ensure the proper administration of justice; and
(c) to enforce a solicitor’s equitable duty of loyalty.
Protection of confidential information
It is uncontroversial that a Court will restrain a solicitor from acting against a former client if:
(a) a reasonable person informed of the facts might reasonably anticipate a danger of misuse of confidential information of a former client; and
(b) there is a real and sensible possibility that the interest to the practitioner advancing the case in litigation might conflict with the practitioner’s duty to keep the information confidential, and to refrain from using that information to the detriment of the former client.[10]
(‘Confidentiality Ground’)
[10]Sent [33] (Nettle J). Also see Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, 236–237 (Lord Millett); Re a Firm of Solicitors [1992] 1 QB 959, 969 (Parker LJ); Mallesons Stephen & Jaques v KPMG Peat Marwick (1990) 4 WAR 357, 362–3 (Ipp J); Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd [1995] 1 VR 1, 5 (Hayne J); Newman v Phillips Fox (1999) 21 WAR 309, 322–3 [63] (Steytler J); Break Fast Investments Pty Ltd v Rigby Cooke Lawyers [2015] VSC 305 [3] (Bell J); and the discussion in Babcock & Brown DIF III Global v Babcock & Brown International Pty Ltd [2015] VSC 453 [61]–[70] (Riordan J). This formulation is reflected in the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 r 10.2.
Administration of justice
The Court has inherent jurisdiction to restrain solicitors from acting in a particular case as an incident of its inherent jurisdiction over officers of the Court and to control its process in aid of the administration of justice.[11] The juridical basis of this ground is not inter-partes fiduciary or contractual obligations, or a punishment for misconduct, but rather the administration of justice, the public interest and the appearance of propriety of officers of the Court.[12]
(‘Administration of Justice Ground’)
[11]Kallinicos, 582 [76] (Brereton J), adopted most recently in Técnicas Reunidas SA v Andrew [2018] NSWCA 192 [71] (Leeming JA with whom Bathurst CJ and White JA agreed).
[12]Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 228 FCR 252, 276 [96] (Beach J) (‘Dealer Support Services’); Black v Taylor [1993] 3 NZLR 403, 412 (Richardson J) cited with approval in Kallinicos 572–3 [44].
The jurisdiction is enlivened if a fair minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a solicitor be prevented from acting against a former client, in the interests of the protection of the integrity of the judicial process and appearance of justice.[13]
[13]Kallinicos 582 [76]; Dealer Support Services 276 [94].
In determining whether it is necessary to restrain a solicitor from acting against a former client in the interests of justice and to preserve the integrity of the judicial process, the Court will have regard to the following considerations:
(a) The general right of a party to be represented by its choice of lawyer, which is balanced against the overriding principle of protecting the integrity of the judicial process.[14]
[14]Western Australia v Ward (1997) 76 FCR 492, 498 (Hill and Sundberg JJ); Kallinicos 582 [76]; Dealer Support Services 276 [95] .
(b) The jurisdiction does not require that it be established that the restraint is necessary to ensure the protection of confidential information. The administration basis is independent to the protection of confidential information ground.[15] As Black J said in the matter of IPM Group Pty Ltd:
[15]Dealer Support Services 276 [96]; cf PhotoCure ASA v Queen’s University at Kingston (2002) 56 IPR 86 [56], [60] (Goldberg J).
The Court’s power to restrain a solicitor from acting on this basis has independent scope and may be established, notwithstanding that a risk of misuse of confidential information is not established, since it is directed to preserving the administration of justice, the public interest and the appearance of propriety of officers of the Court.[16]
(c) The effect of a delay in bringing the application on the cost, inconvenience and impracticality of requiring lawyers to cease to act.[17]
(d) The jurisdiction is exceptional and is to be exercised with caution.[18]
[16][2015] NSWSC 240 [54].
[17]Kallinicos 582–3 [76]; Bowen v Stott [2004] WASC 94 [58] (Hasluck J); Black v Taylor [1993] 3 NZLR 403, 412 (Richardson J); Sent [60]–[64].
[18]Kallinicos 582 [76]; Dealer Support Services 276 [97].
Duty of loyalty
Whether there is a third ground for restraining a solicitor from acting for a former client based on a duty of loyalty which survives termination of the retainer is controversial.
(‘Duty of Loyalty Ground’)
In McVeigh v Linen House Pty Ltd[19] the Victorian Court of Appeal held that the Court could restrain a solicitor from acting against a former client, not only to prevent disclosure of confidential information and public policy; but also on the basis of the solicitor’s duty of loyalty to the former client, which continued after termination of the retainer. Batt JA (with whom Callaway JA agreed) stated:
The authorities establish that a court will restrain a solicitor from acting for a litigant not only in order to prevent disclosure of confidences of a client or former client, but also to ensure that the solicitor’s duty of loyalty to the former client is respected, notwithstanding termination of the retainer, and to uphold as a matter of public policy the special relationship of solicitor and client.[20]
[19](1999) 3 VR 394 (Callaway and Batt JJA).
[20]Ibid 398 [23].
It appears to be accepted that the Court of Appeal was identifying three grounds for the jurisdiction to restrain a lawyer from acting for a former client; and in particular recognising the ground based on a duty of loyalty which survives termination of the retainer.[21] In my opinion any doubt that the Court was recognising the Duty of Loyalty Ground is removed by reference to the following authorities relied upon by Batt JA in support of his statement:
[21]Westend Entertainment Centre Pty Ltd v Equity Trustees Ltd [1999] VSC 514 [27] (Mandie J); Dealer Support Services 265 [51]; Ismail Zai v State of Western Australia (2007) 34 WAR 379, 386–7 [19], [21] (Steytler P), which was cited with approval in Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 [42] (Ward J).
(a) In Wan v McDonald,[22] Burchett J said:
[22](1992) 33 FCR 491.
The emphasis in the judgments was placed on the solicitor’s duty to safeguard confidential information of his client. But there are at least two other aspects of the problem to which attention has more recently been drawn; a solicitor’s duty of loyalty, which cannot be treated as extinguished by the mere termination of the period of his retainer, and the important consideration of public policy which gives a special quality to the relationship of solicitor and client that the law will not generally permit to be stained by the appearance of disloyalty. It is obvious that, at least in the application of these principles to particular circumstances, there is likely to be a great difference between cases such as Rakusen and D & J Constructions, on the one hand, and cases, on the other, where the one solicitor, having acted for both parties, seeks to act against one of his former clients, and in the interest of a preferred client, in litigation arising out of the very matter in which he himself acted for both. In my opinion, it could only be in a rare and very special case of this latter kind that a solicitor could properly be permitted to act against his former client, whether or not any real question of the use of confidential information could arise. As Gummow J. said in National Mutual Holdings Pty Ltd v Sentry Corp (1989) 22 FCR 209 at 228-229: ‘[E]ven among fiduciaries, solicitors stand in a special position.’ Sir Owen Dixon explained why all professional persons stand, in a sense, in such a position in Jesting Pilate, p 192, a passage quoted by Dr Finn in the paper already cited, when he wrote: ‘Unless high standards of conduct are maintained …the trust and confidence of the very community that is to be served is lost and thus the function itself of the profession is frustrated.’[23]
[23]Ibid 512–13 (emphasis added).
(b) In Holdsworth v MR Anderson & Associates Pty Ltd,[24] JD Phillips J said with respect to a solicitor who acted for both a vendor and a purchaser:
It is surely part of the contract of retainer that the solicitor will use his best endeavours in the interests of his client and he does not do that by placing his own particular knowledge of events in which he took part as the agent of both at the disposal of one to the exclusion of the other. It is on that basis that I think that (at least in the ordinary case) a Court of equity would restrain the solicitor from acting for either vendor or purchaser in the dispute between them.
[24](Unreported, Supreme Court of Victoria, JD Phillips J, 26 August 1994, BC 9401257) 18.
It would appear that the source of the Duty of Loyalty Ground, as identified by Burchett J, is the solicitor’s fiduciary obligations, whereas JD Phillips J identified it as arising from the contract of retainer.
In Spincode Pty Ltd v Look Software Pty Ltd,[25] Brooking J opined that the duty of loyalty, which survived termination, was an independent ground for the jurisdiction and identified the following three possible sources of the relevant duty:
[25](2001) 4 VR 501.
(a) An equitable obligation of loyalty which forbids the holding of two successive inconsistent engagements.[26]
(b) An equitable obligation of loyalty, which imposed ‘an abiding negative obligation not to act against the former client in the same [or closely related] matter’.[27]
(c) An implied term of the contract of retainer that a solicitor would not act against a client in the dispute in relation to which the solicitor had been retained by it.[28]
[26]Ibid 522 [53].
[27]Ibid.
[28]Ibid 522 [54].
Brooking J preferred the second, being the negative obligation not to act against a former client in the same or closely related matter.[29] However, ‘Brooking JA did not explain how this equitable obligation of “loyalty” differed, if at all, from a fiduciary duty’. [30]
[29]Ibid 522 [53].
[30]GE Dal Pont, Lawyers’ Professional Responsibility (Thomson Reuters, 6th ed, 2017) 281 [8.40].
Spincode was decided on the basis of the Confidential Information Ground; and the observations of Brooking JA were obiter dictum. With respect to the other members of the Court, Ormiston JA said he had not had ‘the luxury of further time to consider [the issue]’;[31] and, although Chernov JA considered that Brooking JA had made a compelling case, he expressed no concluded view.[32]
[31]Spincode 525 [61].
[32]Ibid 526 [63].
Brooking JA’s formulation of the duty of loyalty has been endorsed by numerous decisions in Victoria.[33] However, the preponderance of authority throughout Australia has not adopted the Duty of Loyalty Ground as an independent ground; and it has been squarely rejected by the New South Wales Court of Appeal.[34] Further, in the Federal Court in Dealer Support Services, Beach J argued persuasively that the concept of a residual duty of loyalty, after the termination of a retainer, should be rejected.[35]
[33]Sent [103] (Nettle J); Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd [2002] VSC 324 [14] (Habersberger J); Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81–726 [40] (Byrne J); Wagdy Hanna & Associates Pty Ltd v National Library of Australia (2004) 185 FLR 367, 372–4 [31]–[42] (Higgins CJ); Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd [2006] VSC 152 [40] (Whelan J); Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 [14] (Whelan J); Commonwealth Bank of Australia v Kyriackou [2008] VSC 146 (affd Kyriackou v Commonwealth Bank of Australia [2009] VSCA 241; Connell v Pistorino [2009] VSC 289 [25]–[29] (Byrne J); Dale v Clayton Utz (No 2) [2013] VSC 54 [125] (Hollingworth J); Lee v Korean Society of Victoria Australia Inc [2014] VSC 316 [8]–[10] (Dixon J); Break Fast Investments v Rigby Cooke Lawyers [2015] VSC 305 [2] (Bell J).
[34]Cooper v Winter [2013] NSWCA 261 [92]–[102] (Ward JA, with whom McColl and Barrett JJA concurred); Maxwell-Smith v S & E Hall Pty Ltd (2014) 86 NSWLR 481, 486–7 [24] (Barrett JA, with whom Beazley P and McColl JA concurred); Re IPM Group Pty Ltd [2015] NSWSC 240 [32] (Black J); Técnicas Reunidis SA v Andrew [2018] NSWCA 192 [36] (Leeming JA, with whom Bathurst CJ and White JA agreed).
[35](2014) 228 FCR 252, 262–275 [40]–[91].
There is one common law (including equity) in Australia. As McHugh J said in Kable v Director of Public Prosecutions (NSW):
Unlike the United States of America where there is a common law of each State, Australia has a unified common law which applies in each State but is not itself the creature of any State. Perhaps the validity of that proposition is not as readily apparent to a State judge bound by the authority of his or her own Full Court or Court of Appeal as it is to a judge of a federal court who must apply the common law.[36]
[36](1996) 189 CLR 51 112; cited with approval in Lipohar v The Queen (1999) 200 CLR 485, 505 [43] (Gaudron, Gummow and Hayne JJ).
It is plainly unsatisfactory for there to be a divergence in the principles to be applied in applications to restrain lawyers acting against former clients between Victoria and the other States of the Commonwealth of Australia, particularly in these days of national legal firms.[37] I would not consider myself bound to follow the obiter of Brooking JA in Spincode in the face of directly conflicting decisions of the New South Wales Court of Appeal. As was observed by the High Court in Farah Constructions v Say-Dee Pty Ltd:
Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong [citing Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ)]. Since there is a common law of Australia rather than of each Australian jurisdiction, the same principle applies in relation to non-statutory law. There has already been an example of a single judge feeling obliged to follow the Court of Appeal despite counsel’s submission that he was obliged not to do so.[38]
[37]As was observed by Beach J in Dealer Support Services (2014) 228 FCR 252, 270 [64]: ‘the Victorian Court of Appeal in Watson v Ebsworth & Ebsworth (2010) 31 VR 123 at [145]–[150] were given the opportunity to fortify the second basis [the Duty of Loyalty Ground], but did not avail themselves of that opportunity’.
[38](2007) 230 CLR 89, 151–2 [135] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).
However, I consider that the Duty of Loyalty Ground was squarely determined by the Victorian Court of Appeal in McVeigh v Linen House Pty Ltd;[39] and, as a trial judge, I am bound to follow that decision.
[39][1999] 3 VR 394 (Callaway and Batt JJA).
Application of the principles
Confidentiality Ground
It was conceded by the plaintiffs, properly in my opinion, that the relevant communications between Mr Suckling and Mr Galatas were able to be provided by Mr Suckling to his solicitors and used for the purpose of defending this proceeding. Accordingly, the information is not subject to the protection provided by the principle governing the restraint of solicitors from acting against former clients. As North J observed, in similar circumstances, in Incentive Dynamics Pty Ltd v Robins:[40]
As the respondents [former directors] have the capacity to provide the information and desire [the solicitors] to utilise it, the information loses its nature as confidential for the purpose of the principle governing the restraint of solicitors from acting against previous clients. The respondents’ ability to provide the same information to [the solicitors] as was previously conveyed on behalf of [the former corporate client] is determinative against the grant of an injunction in respect of that information.
[40](Unreported, Federal Court of Australia, North J, 25 July 1997, BC 9703224).
Administration of Justice Ground
For the following reasons, I have concluded that a fair minded, reasonably informed member of the public would not conclude that the proper administration of justice requires that GPZ Legal or Mr Galatas should be prevented from acting for the estate of Mr Suckling, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice:
(a) There has been an inordinate and unexplained delay in the plaintiffs making this complaint. By the time the plaintiffs made their first complaint on 29 June 2018, approximately five years has expired since GPZ Legal handed to the liquidator its files with respect to its retainer by the Company; and over six years had expired since the Company was placed in liquidation.
(b) During this period, GPZ Legal and Mr Galatas, in particular, have acted for Mr Suckling with respect to:
(i) a claim by the plaintiffs for misuse of the Company’s intellectual property, which was filed in August 2013 and settled, after a mediation, in March 2016;
(ii) the public examination of Mr Suckling over two days in February 2015; and
(iii) the defence of this proceeding, including a mediation, for a period of approximately 10 months.
(c) Mr Suckling has died and his estate will be prejudiced by the fresh solicitors not having the opportunity of taking the instructions directly from Mr Suckling with respect to this proceeding. The death of Mr Suckling enhances the public interest in a litigant not being deprived of his or her lawyer without due cause.
(d) It is accepted by the plaintiffs that there is no allegation that Mr Galatas has any information relevant to insolvency. Further, except for the known facts with respect to the circumstances surrounding the statutory demands in 2011, there is no evidence that he has any information relevant to whether Mr Suckling acted in good faith and had no reasonable grounds of suspecting insolvency. Mr Galatas, in fact, swears that he no such relevant knowledge. The plaintiffs have not led any evidence as to what Mr Giasoumi, who was a registered liquidator, is able to say about conversations at the relevant meetings referred to in [14]–[16] above.
(e) There is no real prejudice to the plaintiffs in permitting GPZ Legal to continue to act for the estate of Mr Suckling. Senior counsel for the plaintiffs submitted that the prejudice was that, although Mr Galatas could not be compelled to assist the plaintiffs in the conduct of this litigation, his retainer by Mr Suckling had meant that Mr Galatas is professionally prohibited from providing assistance. I consider this distinction is more apparent than real. Mr Galatas had both a social and a professional relationship with Mr Suckling, and acted for him or his companies over a long period of time. He gave the eulogy at Mr Suckling’s funeral. I am not prepared to infer that there is any real possibility that Mr Galatas would be prepared to assist the plaintiffs in a claim against Mr Suckling, even if he was no longer acting for the estate.
In the absence of a risk of misuse of confidential information or other real prejudice, I consider that, in the circumstances of this case, a fair-minded, reasonably informed member of the public would be unlikely to conclude that the administration of justice required Mr Galatas not to act for Mr Suckling. In particular:
(a) Mr Suckling was the sole shareholder and, for the most part, the sole director of the Company.
(b) Mr Galatas and Mr Suckling became ‘firm friends’ over the many years that Mr Galatas acted for Mr Suckling in his personal capacity and for his related company.
(c) At the time of the relevant retainer by the Company, GPZ Legal would have owed duties to both the Company and Mr Suckling as its alter ego.[41]
In these circumstances a fair-minded member of the public might conclude that any extended duty of loyalty was in reality owed to Mr Suckling.
[41]Macquarie Bank v Myer [1994] 1 VR 350, 359 (JD Phillips J); In re a Firm of Solicitors [1992] 1 QB 959, 976 (Sir David Croom-Johnson).
Mr Galatas may be a witness
Mr Denton QC, for the plaintiffs, contended that there was a real likelihood that Mr Galatas would be called to give evidence. The prospect that a lawyer may be a witness in a proceeding is a relevant consideration on an application for an injunction by a former client.
A convenient starting point is that the Legal Profession Uniform Conduct (Barristers) Rules 2015 provide that a barrister must refuse a brief to appear if ‘the barrister has reasonable grounds to believe that the barrister may, as a real possibility, be a witness in the case’.[42] However, there is no equivalent provision in the Legal Profession Uniform Conduct Solicitors’ Rules 2015.[43]
[42]Rule 101(d).
[43]Rule 27.2 provides: ‘In 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’ (emphasis added).
There are a number of cases where the fact that the solicitor may be required to give evidence has been a significant factor in determination of a restraint application.
In Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd,[44] Whelan J considered an application to restrain a solicitor from acting in the following circumstances:
[44][2006] VSC 152.
(a) The solicitor acted for a corporate trustee with respect to a winding-up application based on a statutory demand for $275,000.
(b) Prior to the trustee being wound up, the solicitor acted for the appointor to substitute the trustee with a new corporate trustee.
(c) The liquidator of the former trustee filed a proceeding against the new trustee asserting a right of exoneration over the trust property with respect to the $275,000 debt, which had been the subject of the statutory demand.
(d) The new trustee defended the proceeding on the basis that the transfer to it of the trust assets was a transaction a reasonable person would have entered into and the former trustee did not become insolvent as a result of the asset transfer.
(e) The solicitor acted on behalf of the new trustee in defending the proceeding.
Whelan J restrained the new trustee from receiving advice from the solicitor in the proceeding on the basis of the Confidential Information Ground, the Administration of Justice Ground and the Duty of Loyalty Ground. [45]
[45]Ibid [33].
Relevantly, Whelan J considered that the Administration of Justice Ground and the Duty of Loyalty Ground were enlivened by the fact that, not only was the solicitor a potential witness, but a challenge to his conduct was a possibility.[46] It is to be noted that Whelan J considered that precisely the same facts that enlivened the Administration of Justice Ground also enlivened the Duty of Loyalty Ground.[47]
[46]Ibid [38].
[47]Ibid [40].
In Kallinicos,[48] Brereton J considered an application to restrain a solicitor from acting for a party in the following circumstances:
[48](2005) 64 NSWLR 561 (Brereton J).
(a) Mr Kallinicos and Mr Hunt were partners who, through various corporate entities, had acquired properties over a number of years.
(b) In 2001 the partnership was dissolved. During 2002, a number of partnership properties were sold and the net proceeds distributed purportedly in accordance with directions of the former partners. The solicitor acted on the sales and was involved in the distribution of the proceeds.
(c) Mr Kallinicos filed proceedings against Mr Hunt and his related companies challenging the authority for the distribution of the net proceeds of the sale of the various properties.
(d) The solicitor acted on behalf of the Mr Hunt interests.
Brereton J restrained the solicitor from further acting for Mr Hunt’s interests on the Administration of Justice Ground. In particular, he found that the solicitor would be a material witness and there was a high degree of probability that his evidence and conduct would come under scrutiny.[49]
[49]Ibid [84]–[86].
In Bowen v Stott,[50] Hasluck J considered an application by a plaintiff that the defendants be restrained from engaging a firm of solicitors and counsel in the following circumstances:
[50][2004] WASC 94.
(a) The firm and counsel had acted for the defendants in a defamation action brought by the plaintiff.
(b) Negotiations between counsel for the parties resulted in the trial of the proceeding not proceeding.
(c) The defendants applied for summary judgment on the basis that negotiations between counsel had resulted in a concluded settlement. The plaintiff denied that there had been a settlement.
After a detailed analysis of the issues, Hasluck J found that each counsel would be challenged in cross-examination about the contentious issues, including whether agreement was reached as to the form of the apology.[51] He granted the injunction on the Administration of Justice Ground. He reasoned that the practitioners would be giving evidence about the critical issue, being whether an oral settlement had been concluded, which would give rise to a conflict of interests that might interfere with the administration of justice.[52]
[51]Ibid [43].
[52]Ibid [65].
Of course, each case must be determined on its own facts, but critically the practitioner in each of the above cases was alleged to be a significant actor in a critical event in the proceeding. In particular:
(a) In Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd, the solicitor acted on the transfer of assets, which was the transaction that was sought to be impugned in the proceeding.
(b) Similarly, in Kallinicos, the solicitor acted on the sales and the distribution of proceeds, which were the subject of the proceeding.
(c) In Bowen v Stott, the barrister had allegedly effected the settlement, the existence of which was the subject of the application.
In my opinion, the role of the solicitor in each of these cases is readily distinguishable from that of Mr Galatas. In particular:
(a) There is no allegation that Mr Galatas participated in the critical issues in this proceeding being the insolvency of the Company, or even Mr Suckling’s beliefs as to its insolvency.
(b) It is not apparent what evidence might be led from Mr Galatas other than the facts established by documents.
(c) It has not been suggested that his conduct might be impugned in the litigation.
In my opinion, the circumstances surrounding this application are similar to those considered by North J in Incentive Dynamics Pty Ltd v Robins.[53] The relevant circumstances were as follows:
[53](Unreported, Federal Court of Australia, North J, 25 July 1997, BC 9703224).
(a) The liquidator of a company filed proceedings against former directors alleging that they had caused loans to be made to them (or related entities) while the company was insolvent.
(b) Prior to the liquidation, and during the period the company was alleged to be insolvent, the firm of solicitors had acted on behalf of the company in respect of:
(iv) negotiations with the Australian Taxation Office with respect to unpaid group tax (the firm also acted for the directors);
(v) claims by two employees, who had resigned, for outstanding money;
(vi) a representation by the two employees to a client of the company that the company was insolvent; and
(vii) the sale of the company’s premises.
(c) The same firm of solicitors were now acting for the former directors in their defence of the liquidator’s claim.
(d) The liquidator contended that, although the communications may not be confidential, the firm of solicitors should be restrained because:
(i)the relevant solicitor from the firm may have formed impressions, beliefs, conclusions and observations as to the actors now in dispute, which could be used against his former client, the company; and
(ii) he may be called as a witness by the liquidator.
North J dismissed the application because he found that there was no real and sensible possibility of the misuse of confidential information, and any impressions et cetera which the solicitor may have formed had not been sufficiently particularised.[54] He observed that, although it may be unwise for a solicitor to continue to act where he may be a material witness,[55] it does not follow that the court will restrain the continued engagement.[56]
[54]Ibid, citing Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307, 314 (Drummond J).
[55]Ibid, citing Campbell CJ in Chapman v Rogers; ex parte Chapman [1984] 1 Qd R 542, 545, who said: ‘[F]or the reason that it is desirable to avoid any suggestion of real or apparent conflict between the duty to the court and the obligation to the client, I consider that it is generally unwise for a solicitor, who is not himself appearing as advocate or as instructing solicitor in court but who is aware that it is likely that he will be called as a material witness (other than in relation to formal or non-contentious issues), to continue, either personally or through his firm, to represent the client if this can be reasonably avoided.’
[56]Ibid, citing Yamaji v Westpac Banking Corporation (1993) 42 FCR 431, 432 (Drummond J) who said: ‘I would, for myself, respectfully adopt those comments as words that need to be heeded by legal practitioners. But I find nothing in this decision in Chapman v Rogers to suggest that there is jurisdiction to restrain a solicitor for a party from continuing to act for that party on the basis that it is apparent that he is going to be required as a witness for one side or the other on contentious issues, even though, by so acting, the solicitor may fall short of meeting a proper standard of professional conduct’.
Similarly, the prospect of Mr Galatas giving evidence may mean that it would have been prudent for him not to have accepted this retainer. However, I do not consider that it is a sufficient basis to restrain him from continuing to act, at this time, principally because:
(a) the evidence, which he may be required to give, is unclear, and for that reason I consider there is serious doubt that he will be called;
(b) he is not a critical actor in the proceeding; and
(c) the factors referred to in [68]–[69] above.
Duty of loyalty
Counsel for the plaintiffs submitted that GPZ Legal should be restrained from acting for the estate of Mr Suckling on the Duty of Loyalty Ground for the same reasons as supported the Administration of Justice Ground.
GPZ Legal acted on behalf of the Company with respect to the statutory demands and associated debt claims referred to in [10]–[32] above. In this proceeding GPZ Legal defends a claim brought by the Company against its directors alleging insolvency during the period when GPZ was acting with respect to the statutory demands. This is not the same matter as GPZ acted for the Company, but I proceed on the basis that it is a related matter.
Although the juridical basis of the Duty of Loyalty Ground is undoubtedly different to the Administration of Justice Ground, I am unable to find any case which identifies a fact that would be relevant to one ground but not the other; or any circumstance in which an injunction restraining a solicitor from acting against a former client would be granted on one ground but not the other.[57]
[57]See, eg: Sent [98]–[116] (Nettle J); Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd [2006] VSC 152 [35]–[40] (Whelan J). Regarding the scope of all three Grounds, the learned authors of Dal Pont’s Lawyers’ Professional Responsibility say: ‘Only in cases at the very margin, which will necessarily be exceptional, will the different approaches potentially generate different outcomes. And in these cases it may well be that the court resorts to its inherent, again exceptional, jurisdiction to disqualify a lawyer so as to preserve the appearance of justice [the Administration of Justice Ground]’, GE Dal Pont, Lawyers’ Professional Responsibility (Thomson Reuters, 6th ed, 2017) 283 [8.40].
In Ismail-Zai v The State of Western Australia,[58] Steytler P expressed the opinion that the weight of authority was against the duty of loyalty surviving the termination of a retainer, but added:
In any event it seems to me that there may be little distinction, for any practical purpose, between the question whether there is a breach of a continuing duty of loyalty, on the one hand, and the questions whether there is a real risk of a breach of confidence and whether there is or will be other impropriety of a kind that is likely to undermine the integrity of the judicial process and the due administration of justice (which comprehends the appearance of justice), on the other hand. The cases suggest that there will be a breach of a continuing duty of loyalty if a solicitor acts against a former client in the same or a closely related matter … I find it difficult to envisage circumstances in which a lawyer who acts in the same or a closely-related matter against a former client will neither be in a position in which there is a real risk of a breach of a duty of confidence nor be acting in such a way as to undermine the integrity of the judicial process or the due administration of justice.[59]
[58](2007) 34 WAR 379 (Steytler P, Wheeler JA and EM Heenan AJA).
[59]Ibid388 [24] (emphasis added).
Similarly, Beach J in Dealer Services Support concluded that there was ‘little demonstrated need’ for the Duty of Loyalty Ground because the Confidentiality Ground and the Administration of Justice Ground ‘cover any actual or perceived vice’.[60] He continued:
Indeed, what would justify any disqualification on [the duty of loyalty ground] only, but where the [confidentiality ground and administration ground] did not justify disqualification? Perhaps nothing more than censorious rectitude.’[61]
With respect, I agree with the observations of Steytler P and Beach J.
[60](2014) 228 FCR 252, 273 [83].
[61]Ibid 272–3 [83].
In the circumstances of this case, for the reasons set out in paragraphs [68]–[69], I exercise my discretion against the grant of injunctive relief.[62]
[62]See Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81–726 [51] (Byrne J) and Dealer Support Services 275 [91] (Beach J).
Orders
I dismiss the plaintiffs’ application by summons.
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