AJB v AAB

[2017] WASC 249

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   AJB -v- AAB [2017] WASC 249

CORAM:   MASTER SANDERSON

HEARD:   10 AUGUST 2017

DELIVERED          :   10 AUGUST 2017

PUBLISHED           :  24 AUGUST 2017

FILE NO/S:   CIV 1809 of 2017

BETWEEN:   AJB

Plaintiff

AND

AAB
Defendant

Catchwords:

Solicitor/client relationship - Application to stop solicitor acting - Turns on own facts

Legislation:

Nil

Result:

Solicitor restrained from acting

Category:    B

Representation:

Counsel:

Plaintiff:     Mr S F Popperwell

Defendant:     Mr A P Young QC & Mr N H Brown

Solicitors:

Plaintiff:     Haydn Robinson

Defendant:     K & L Gates

Case(s) referred to in judgment(s):

In the Marriage of Griffis (1991) 105 FLR 441

Ismail‑Zai v The State of Western Australia [2007] WASCA 150; (2007) 34 WAR 379

Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222

Sent v John Fairfax Publications Pty Ltd [2002] VSC 429

Yunghanns v Elfic Ltd (Unreported, VSC, 3 July 1998)

1. MASTER SANDERSON:  This was the defendant's application to restrain the plaintiff's solicitor Mr Haydn Ross Robinson from continuing to act on the plaintiff's behalf.  After hearing argument I made orders restraining Mr Robinson from acting.  I will set out the precise form of these orders at the conclusion of these reasons.  The way the case was argued raised a number of important questions in applications such as the present.

2. The relevant background facts can be shortly stated.  They are drawn from two affidavits of Philip Hugh Murray the first affirmed 21 July 2017 and the second affirmed 7 August 2017.  The plaintiff and the defendant were married on 16 May 2003 and are presently husband and wife.  Differences have arisen between the pair and since about May 2016 they have been estranged and separated.  Mr Robinson is the plaintiff's brother‑in‑law.  Mr Robinson's brother is married to the plaintiff's sister.  In the period in or around 2003 to 2015 the defendant and Mr Robinson met and socialised with each other at family events.  From about 2011 until early 2016 Mr Robinson was the family solicitor for the plaintiff and the defendant.  During that period he acted as solicitor in a series of matters.

3. On 28 September 2016 the plaintiff and the defendant entered into an agreement which is described as a Binding Financial Agreement (BFA).  The precise terms of the BFA are not presently relevant.  It is relevant to note that before signing the BFA both the plaintiff and the defendant sought independent legal advice.  Attached to the BFA are two documents entitled 'Certificate of Independent Legal Advice'.  Each is signed by a solicitor who certifies having provided advice to one of the parties and who asserts their independence.

4. The plaintiff has sued the defendant and as I understand the claim relies upon the terms of the BFA to ground her cause of action.  The defendant says the BFA requires the parties to submit the dispute either to arbitration or to the Family Court of Western Australia.  The plaintiff maintains this court has jurisdiction to deal with the matter.  That is a preliminary question yet to be heard.  Furthermore, the plaintiff is seeking summary judgment on her claim.  That application is to await determination of whether or not what might be described as the alternative dispute mechanism in the BFA precludes this court from dealing with the matter.

5. It is against that background the defendant applied to, effectively, prevent Mr Robinson from continuing to act for the plaintiff.  As I mentioned above the evidence in support of the defendant's application was found in two affidavits of Mr Murray.  Mr Murray is senior associate at the firm of solicitors acting for the defendant.  At pars 10 ‑ 35 of his first affidavit Mr Murray set out what he has been told by his client as to the relationship between the plaintiff, the defendant and Mr Robinson.  Objection was taken to this evidence on two grounds.  First it was said the application was final and therefore hearsay evidence was not admissible to support the application.  Second, the hearsay evidence provided by Mr Murray was so imprecise and lacking in detail as not to be sufficient to provide any grounds for the application.

6. The first of these two objections can be disposed of quickly.  This is an application made in the context of the proceedings as a whole.  It is one aspect of the dispute between the parties - although it is separate and stands apart from the normal pre‑hearing disputes which are part and parcel of commercial litigation.  But that does not mean it takes on a final character.  It is clearly 'interlocutory' if that word is given its true meaning.  Accordingly, statements of information and belief are admissible.

7. The second issue raises rather more difficult questions.  It was not by accident the affidavits in support of this application were affirmed by Mr Murray.  The same approach was adopted by the plaintiff in Sent v John Fairfax Publications Pty Ltd [2002] VSC 429. In that case the plaintiffs applied for orders restraining the defendants continuing to retain Mr Jeffrey Sher QC as their counsel for the remainder of the action. The action concerned a claim for damages for defamation. Mr Sher had provided advice to the plaintiff some 13 years before the defamation proceedings were issued about an unrelated matter. Mr Sher filed an affidavit saying he had no recollection of giving the advice or having spoken to the plaintiff.

8. The evidence in support of the application was found in an affidavit sworn by a Mr Warren a solicitor acting for the plaintiffs.  Nettle J dealt with the question of whether such evidence was acceptable.  His Honour said:

   Dealing first with the absence of any sworn evidence from Sent, I accept that the defendants are hampered to a significant extent in having to deal with Sent's evidence in the form of an affidavit sworn by Mr Warren.

   Plainly, they cannot cross-examine Mr Warren with any effect because he has no knowledge of the truth of his instructions.  Thus, they must take Mr Warren's evidence as it is, and confine themselves to criticisms of what they say are its substantive and textual inadequacies.

   I also accept that although it has been held that an application such as this one is interlocutory, so that evidence on the basis of information and belief is admissible, the application is final in effect because, if successful, it will preclude the retainer of Mr Sher for the balance of the proceeding and the court should thus be slow to act on the basis of evidence which lacks the sort of rigour that would be demanded at trial.

   That having been said, however, I think it would be unrealistic to expect the plaintiffs' counsel to expose Sent to cross-examination upon this application in advance of the trial, on matters that may well bear upon the outcome of the trial.

   No doubt it may be said that such a cross-examination would be limited and likely to be controlled by the court.  It may also be that many questions upon the facts on which Mr Sher's advice was taken would be ruled inadmissible.  But it is hard to envisage that cross-examination upon the confidential information disclosed to Mr Sher could be effective if it were not permitted to enter to some extent upon the facts on which the advice was based.

   In large part, the facts and the confidential information may be one in the same and thus an excursus into the facts of the matter would be probable if indeed not inevitable.

   The point can perhaps be demonstrated by reference to the defendants' criticism of the imprecision with which they say Sent has chosen to describe the confidential information which he imparted to Mr Sher.

   It may readily be supposed that if Sent had exposed himself to cross‑examination, he could and would have been permitted to be asked to explain in precise terms what he told Mr Sher during the course of conference.  Questions of that kind would be directly relevant to the scope and quality of the confidence claimed in respect of the instructions and they would be admissible.

   Yet such an exercise would almost certainly deliver to the defendants the very result which the confidentiality of the instructions was designed to protect.

   In my view that should not be permitted to occur.  It makes no sense that Sent should have to expose himself to the prospect of the destruction of the confidence to establish that it once existed, and thus I consider that the method Sent has chosen of giving evidence, in effect through Warren, should not be viewed with disfavour.

   I also consider that it would be a mistake to reason that, because Sent has not gone on oath, the evidence which he has given, in effect through Warren, should be treated as devoid of the sort of credit which an oath would have given it.

   Granted that giving false instructions to Mr Warren might not render Sent liable to conviction for perjury, if Sent gave false instructions to Mr Warren with the intent that they be placed before the court on Mr Warren's oath and acted upon, Sent could well be liable for attempting to pervert the course of justice; as doubtless he has been told [42] ‑ [53].

9. Beyond this statement of principle by Nettle J it is difficult to find judicial pronouncements which deal with the question of evidence and how it is to be established confidential information has been passed on to a solicitor.  In theMarriage of Griffis (1991) 105 FLR 441, Mullane J sitting in the Family Court of Australia put the position as follows:

   There was another important point made by the Queensland Full Court in the decision of Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62. As to proof of the confidence, their Honours, at 63, took the view that where there was a conflict between the solicitor and former client as to whether a confidence had been imparted, if the judges:

   '… were to insist upon actual proof of the existence of such confidence and to insist upon knowing what it was and whether it was likely to prejudice a client's interests, they would compel him to strip himself of the protection which the court usually afforded and the whole mischief he wished to avoid might arise … on the one side the client insisted that he had imparted confidence to Mr Marsland; and on the other side, the solicitor said "I have no confidence".  How could the court decide it?  If they took the oath of the attorney against the oath of the client and refused the protection which the client sought, why, then, the matter might proceed, and the mischief which the client feared might arise and the court could afford no remedy.  In cases of this kind less mischief would accrue through granting the protection sought than in accepting the oath of the attorney against the client.  The client's interests should prevail, and the judge should refuse to determine the matter on the conflicting testimony of the affidavits.'  (450)

   (It is perhaps worth noting that the Mills decision dates from 1882.  But there is no suggestion it has ever been doubted.  The case is not referred to by Nettle J in Sent.)

10. Attached to Mr Murray's second affidavit are a number of invoices rendered by Mr Robinson to the plaintiff and the defendant.  (There is one invoice rendered directly to the defendant.  This is for a very modest amount and is in the scheme of things is of no real significance.)  What these invoices show is that between at least March 2011 up until the parties entered into the BFA Mr Robinson acted on a number of different matters.  The evidence of Mr Murray discloses to an extent the nature of these matters.  They certainly affected the financial position of both parties.  Mr Robinson clearly could not have acted unless he had a good understanding of the business processes of the two parties.  It must be said however that the affidavit does not disclose any single instance of confidential information which might be relevant to the present dispute between the plaintiff and the defendant being disclosed to Mr Robinson.

11. In my view there is no doubt that the way in which the evidence has been put before the court is satisfactory.  That said, it must be acknowledged the defendant has not pointed to any particular aspect of the information passed to Mr Robinson which might be prejudicial to him if Mr Robinson continued to act for the plaintiff.

12. Turning then to the applicable principles in Western Australia.  The leading authority is the decision of the Court of Appeal in Ismail‑Zai v The State of Western Australia [2007] WASCA 150; (2007) 34 WAR 379. The case arose in unusual circumstances. The appellant was tried in the District Court on a charge of aggravated robbery with violence. He was convicted. It was subsequently found that the prosecutor had acted for the appellant some years before as defence counsel. The prosecutor had completely forgotten this had occurred. The issue on appeal was whether having acted for the appellant in the past it was a miscarriage of justice for the prosecutor to act at the appellant's trial.

13. It is tempting to look at this case as being an appeal in a criminal matter and therefore of little relevance in a case such as the present.  But  Steytler P and the other members of the Court of Appeal (Wheeler JA & EM Heenan AJA) examined in some detail the circumstances in which a solicitor should not act for a former client.  The decision shows that all of the relevant authorities were considered.  In my view there is no doubt the principles set out in the decision cover a case such as this.

14. Steytler P began by setting out what he said were three possible grounds for restraining a practitioner continuing to act.  First, it was necessary to ensure the protection of confidential information which has been provided by the client to the lawyer in the course of the lawyer/client relationship.  Second, a court acting under its inherent supervisory jurisdiction may consider that it necessary to restrain a solicitor in order to ensure the due administration of justice.  Third, a restraint will be issued to prevent a breach of a supposed fiduciary duty of loyalty owed by the lawyer to the former client notwithstanding the termination of the retainer.

15. His Honour began by considering the notion of a continuing duty of loyalty.  He noted that there was conflicting authority on the question.  After having cited the authorities one way and the other he concluded:

    In my opinion, the weight of authority currently supports the proposition that the duty of loyalty does not survive the termination of the retainer.  Moreover, some of the cases which support the existence of a continuing duty of loyalty seem, in my respectful opinion, to draw no clear distinction between a fiduciary obligation of that kind, on the one hand, and the court's inherent supervisory jurisdiction to protect the integrity of the judicial process, on the other.  In Wagdy Hanna (at [55]) Higgins CJ referred to conduct which 'would or would appear to be a breach of an obligation of loyalty which breach would be regarded as reprehensible conduct by the … reasonable impartial observer'.  In Gugiatti (at [12]) Templeman J said that 'a solicitor may assume a hostile relationship against a former client if such conduct would not give rise to an apprehension of impropriety in the mind of a reasonable bystander'.

    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:  Fordham at 489 ‑ 490; Spincode at [53] per Brooking JA.  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 [23] ‑ [24].

16. His Honour then dealt with the duty of confidence.  His Honour set out the content of that duty with particular reference to the House of Lords' decision in Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222. His Honour noted that a lawyers lack of any particular recollection of an earlier matter will not be determinative. He then said:

    It has been suggested that confidential information might include general knowledge obtained about the former client during the subsistence of the retainer.  In Yunghanns v Elfic Ltd, unreported; SCt of Vic; 3 July 1998, Gillard J went so far as to say (at 10 - 11):

    ' … the relationship between solicitor and client may be such that the solicitor learns a great deal about his client, his strengths, his weaknesses, his honesty or lack thereof, his reaction to crisis, pressure or tension, his attitude to litigation and settling cases and his tactics.  These are factors which I would call the "getting to know you" factors.  The overall opinion formed by a solicitor of his client as a result of his contact may in the circumstances amount to confidential information that should not be disclosed or used against the client.'

    These comments were made in the context of a case where the former client had had a very close relationship with a firm of solicitors spanning some 30 years.  The former client had initially worked as an employee solicitor for the firm for five years and, subsequently, the firm had acted for him in many commercial transactions.  The firm consequently had 'many opportunities to form opinions as to [the former client's] modus operandi in business and legal work' (at 13).  The case was consequently unusual.  If these so-called 'getting to know you' factors, to the extent that they involve knowledge of the client rather than of anything imparted in confidence by the client concerning his or her affairs, can constitute confidential information (a proposition that seems to me, with respect, to be questionable:  see Black at 412 per Richardson J), they will only rarely do so:  Mintel International Group Ltd v Mintel (Australia) Pty Ltd (2000) 181 ALR 78; and see Black at 406 per Cooke P, at 408, 412 per Richardson J.  However, the misuse of information of that kind might be such as to undermine the due administration of justice [28] ‑ [29].

17. Finally, his Honour dealt with the inherent jurisdiction of the court to restrain a solicitor continuing to act if it would undermine the proper administration of justice.  His Honour said:

    There are cases in which it has been said that there is a potential for public confidence in the administration of justice to be undermined if there is an appearance that a lawyer can readily change sides:  D & J Constructions at 123 per Bryson J; Mallesons at 374 per Ipp J; PhotoCure at [60]. In D & J Constructions Bryson J's comments were made in the context of a discussion concerning the protection of confidential information.  The same is true of the comments made by Ipp J in Mallesons.  In PhotoCure, Goldberg J said (at [60]) that, as against this concern, he had 'to balance the application of relevant principles which accept that a lawyer, in certain circumstances, can change sides and act against a former client where the lawyer is able to establish that there is not a real risk of misuse of confidential information' [32].

18. In my view Mr Robinson in this case would have breached his duty of confidence had he continued to act for the plaintiff and it was not in the interests of justice to allow him to do so.  True it is Mr Robinson had not acted for the plaintiff and the defendant for a period of 30 years as was the case in Yunghanns v Elfic Ltd (Unreported, VSC, 3 July 1998). But he had acted for them for some time and in a number of different matters. He must have become aware of the way in which the defendant conducted business. Clearly the relationship was more than just an arms‑length business relationship. The family ties between Mr Robinson and the plaintiff would have seen to that. There is no real evidence as to the extent of these family ties but the fact they occurred at all is a relevant consideration.

1. That leads on to the second point.  Surely a reasonable person looking at the facts of this case would see Mr Robinson on the one hand drawing an agreement between the parties and on the other hand acting for one of the parties when the agreement was allegedly breached.  Further the agreement on its face anticipated any disputes being resolved not in the Supreme Court but in another forum.  It is difficult to imagine an informed member of the public seeing Mr Robinson acting for one party as proper and appropriate.  On that basis I made the following orders:

   (1)The plaintiff is restrained from continuing to retain, or otherwise retaining, Haydn Ross Robinson (Robinson) whether by himself or otherwise in or in relation to this proceeding or its subject matter;

   (2)The plaintiff, her servants and agents are restrained from receiving from Robinson any information that was communicated to Robinson in confidence by the defendant.

2. There is an aphorism which perhaps provides a touchstone to cases such as this.  It is to the effect that if a practitioner has to ask whether he has a conflict of interest he probably does.  He would be well advised not to act in those circumstances.

3. I will give the parties the opportunity to make submissions with respect to costs within seven days of the publication of these reasons.