Allison v Tuna Tasmania Pty Ltd
[2012] TASSC 36
•8 June 2012
[2012] TASSC 36
COURT: SUPREME COURT OF TASMANIA
CITATION: Allison v Tuna Tasmania Pty Ltd [2012] TASSC 36
PARTIES: ALLISON, Paul Francis
v
TUNA TASMANIA PTY LTD (ACN 066 778 985)
FARRER, John Frederick
FARRER, Sharon Tina
LAWRENCES MOTORS PTY LTD (ACN 050 492 745) AS TRUSTEE OF THE FARRER SUPERANNUATION FUND AND AS TRUSTEE FOR THE FARRER SUPERANNUATION FUND (No 2)
HAVENFLASH PTY LTD (ACN 065 284 862) AS TRUSTEE OF THE FARRER FAMILY TRUST
FILE NO/S: 95/2003
JUDGMENT
APPEALED FROM: Allison v Tuna Tasmania Pty Ltd [2011] TASSC 52
DELIVERED ON: 8 June 2012
DELIVERED AT: Hobart
HEARING DATE: 31 January 2012
JUDGMENT OF: Evans J
CATCHWORDS:
Professions and Trades – Lawyers – Duties and liabilities – Duties to court – Other matters – Court's inherent jurisdiction to restrain a lawyer from acting in a proceeding.
Grimwade v Meagher [1995] 1 VR 446; Kallinicos v Hunt (2005) 64 NSWLR 561, applied.
REPRESENTATION:
Counsel:
Plaintiff and
John P Murphy (Barrister): A J H Morris QC
Defendants: D J Gunson SC
Solicitors:
Plaintiff: In person
Defendants: Gunson Williams
Judgment Number: [2012] TASSC 36
Number of paragraphs: 37
Serial No 36/2012
File No 95/2003
PAUL FRANCIS ALLISON v TUNA TASMANIA PTY LTD (ACN 066 778 985), JOHN FREDERICK FARRER, SHARON TINA FARRER, LAWRENCES MOTORS PTY LTD (ACN 050 492 745) AS TRUSTEE OF THE FARRER SUPERANNUATION FUND AND AS TRUSTEE FOR THE FARRER SUPERANNUATION FUND (No 2) and HAVENFLASH PTY LTD (ACN 065 284 862) AS TRUSTEE OF THE FARRER FAMILY TRUST
REASONS FOR JUDGMENT EVANS J
8 June 2012
This is an appeal against an order made by Holt AsJ in Allison v Tuna Tasmania Pty Ltd [2011] TASSC 52, that John Murphy is to provide no further legal services, paid or unpaid, direct or indirect, in connection with this action.
Mr Murphy was the plaintiff's lawyer. The appellants, the plaintiff and Mr Murphy, have appealed against the order and the decision that underpins it on grounds that, save for a ground that challenges the width of the order, challenge findings of fact and the inferences drawn by the associate justice. This is somewhat surprising as the hearing before the associate justice, to a substantial degree, proceeded on the basis that the facts were not in dispute. The opening and closing submissions of each counsel to the associate justice do not indicate any significant dispute about the facts. The focus of the submissions was on the applicable law. As to the conduct of Mr Murphy that was the subject of the hearing, Mr Morris QC, counsel for the plaintiff and Mr Murphy, said: "It was wrong … it was egregiously wrong, it was seriously wrong, and Mr Murphy readily concedes that he was stupid …". At a later point in his opening, he described Mr Murphy's conduct as "entirely inexcusable". In his closing submissions, Mr Morris QC made comments to the same effect.
The impugned conduct of Mr Murphy was that as the barrister of the plaintiff he knowingly attended a pre-arranged meeting with one of the defendants, John Farrer, with the purpose of settling the action, and he did so without first obtaining the consent of Mr Farrer's solicitor.
In par[7] of his reasons for decision, the associate justice said:
"The circumstances giving rise to the application, so far as are conceded by the plaintiff and Mr Murphy, are as follows:
●On 22 July this year Mr Murphy attended a pre-arranged luncheon meeting with one of the defendants, John Farrer, at the Southern Cross Motel in Brisbane.
●The plaintiff's claim in the action is based on conversations which he alleges he had with Mr Farrer and so Mr Farrer is likely to be an important witness in the case.
●The meeting had been arranged and conducted without the consent of the defendants' lawyer.
● Mr Murphy and Mr Farrer were the only persons present at the meeting.
● The meeting lasted for about 20 minutes.
●Early in the conversation Mr Murphy gave an example of a case in which, as counsel, he had exposed a police officer for lying under oath.
●Mr Murphy said that he had a particular interest in and was a teacher of the area of law the subject of the litigation.
●Mr Murphy referred to related litigation in which he had been successful in maintaining a caveat over one of the assets in dispute in the action.
●Mr Murphy said that he estimated that the plaintiff might recover as much as $25m in the litigation and that Mr Farrer, his wife and the trustees of their superannuation funds would be liable to pay.
●Mr Murphy said that the plaintiff had two very reputable and independent witnesses.
● Mr Murphy said that the defendants were extremely likely to be held liable.
●Mr Murphy said that he could persuade the plaintiff to settle for $2m inclusive of costs, which settlement would be achieved by exchanging a notice of discontinuance with payment of that sum.
● Mr Farrer asked Mr Murphy to put the proposal in writing to his lawyer."
Ground (a) of the notice of appeal contends that the associate justice erred in finding that the meeting in question occurred without the consent of the defendants' solicitors when there was no evidence to that effect.
The evidence before the associate justice included a letter from Mr Murphy to Mr Williams of Gunson Williams, the defendants' solicitors, dated 31 July 2011, which opens as follows:
"I am writing in response to your questions about my meeting with your Mr Farrer on 22 July 2011.
Mr Lou Menniti is a friend of mine, and client, of about 10 years standing. He has known my client, Paul Allison, for at least that long. He has known since the beginning that I represent Mr Allison in the Tuna Tasmania matter, because it was he who suggested to Mr Allison that he should retain me. I have known for a year or so that Mr Menniti knows Mr Farrer.
Mr Allison instructed me some time ago, that he would settle provided it was on terms that he considered satisfactory. He gave me an indicative amount. I did not have instructions to settle without first obtaining his specific agreement to any terms I might negotiate. Mr Menniti did not, and does not, know of my instructions from Mr Allison but he has been involved in serious litigation on a number of occasions and knows the merits of compromise.
Some time prior to 22 July – perhaps a week or more – Mr Menniti phoned me and said that Mr Farrer would be flying to Brisbane on 22 July. He said that Mr Farrer had agreed to meet me and suggested that I should take the opportunity to drive down to Brisbane to meet Mr Farrer in an attempt settle [sic] the Tuna Tasmania matter.
After giving the matter some thought, I decided to try. In making my decision, I was aware that Mr Farrer had agreed to the meeting at Mr Menniti's urging without any input from me. I thought it was blindingly obvious that Mr Farrer would report our meeting to you, if he had not already alerted you in advance, which I thought he very likely had.
For some reason you seem to be interested in timings, so I will address that issue along with the actual conversation."
Then follows a very detailed explanation of what occurred and was said at the meeting, together with estimates of relevant times. Mr Murphy says that the meeting concluded with Mr Farrer asking Mr Murphy to put the offer that had been made in writing to Mr Williams, and Mr Murphy saying to Mr Farrer that he would do so. The last paragraph in the letter is:
"Finally, I should say that my meeting with Mr Farrer was as a result of poor judgment. I apologise for any inconvenience caused."
The interlocutory application of the defendants' that resulted in the order that is the subject of this appeal was issued on 2 August 2011, within two days of Mr Murphy's letter. An affidavit of John Farrer was filed in support of the interlocutory application. The affidavit was sworn on 8 August 2011. In it, Mr Farrer does not address the assertion made by Mr Murphy in his letter of 31 July 2011 that it was highly likely that Mr Farrer had alerted Mr Williams to the meeting in advance of its occurrence. All that Mr Farrer says with reference to this aspect of the matter is contained in par6 of his affidavit which is as follows:
"6 Mr Murphy did not suggest that I should speak with my solicitors Messrs Gunson Williams before he spoke to me."
There is no suggestion that Mr Murphy and Mr Farrer spoke before the meeting on Friday, 22 July 2011. This paragraph can only be directed to the proposition, which is not in dispute, that at that meeting, Mr Murphy did not suggest to Mr Farrer that before they spoke he should speak to his solicitors.
Mr Murphy responded to Mr Farrer's affidavit in an affidavit sworn on 5 September 2011. Paragraphs [17] and [18] of Mr Murphy's affidavit are as follows:
"17 As to paragraph 6:
(a) I didn't suggest that John Farrer should contact his solicitors;
(b) He had known about the meeting for some days;
(c) From what I knew about him through Lou Menniti, I just assumed that he had spoken to his solicitors.
18On that topic, I note that John Farrer does not depose that, in fact, he had not spoken to his solicitors prior to the meeting as I believe the relevant telephone, fax or email records will show."
If it was an aspect of the defendants' case that, prior to going to the meeting with Mr Murphy, Mr Farrer had not communicated with Mr Williams about doing so, these paragraphs in Mr Murphy's affidavit provided clear notice that the evidence relied upon by the defendants was deficient and did not establish that there had been no such communication. The hearing before the associate justice commenced nine days after the swearing of Mr Murphy's affidavit. If Mr Farrer had not consulted Mr Williams about attending the meeting with Mr Murphy, there was ample time for his evidence before the associate justice to be supplemented with a statement to that effect, or for Mr Williams to file an affidavit to that effect. The onus of proof was on the defendants, and the evidence on this aspect of the matter was solely within the knowledge of Mr Farrer and his solicitors. In the absence of this evidence it was not established that prior to going to the meeting with Mr Murphy, Mr Farrer had not communicated with Mr Williams about doing so.
That Mr Farrer was not cross-examined on his affidavit does not assist the defendants in relation to this deficiency in the evidence. Counsel for the defendants, on the hearing before the associate justice, commended the plaintiff's failure to cross-examine Mr Farrer on the basis that it would have been quite inappropriate to do so, and it would have compounded the damage on the "getting to know your opponent" front.
From the standpoint of Mr Murphy, the above does not change the fundamentals of his ethical breach, that being that he did not seek and obtain the consent of Mr Williams to the meeting. Mr Murphy's breach must be assessed on the basis of his state of knowledge at that time. That Mr Murphy considered it likely that Mr Farrer had notified Mr Williams in advance of the meeting did not justify Mr Murphy's conduct. Mr Murphy had no information to the effect that Mr Williams had consented to the meeting, and he did not ask Mr Farrer whether he had spoken to Mr Williams about the meeting. Mr Murphy was aware that a rule of the Queensland Bar Association required that he not deal directly with an opposing party unless the legal practitioner representing that party had previously consented to the dealing. Mr Murphy had not sought or obtained Mr Williams' consent to the meeting, even though they exchanged emails on 18 and 19 July 2011. His decision not to communicate with Mr Williams about the meeting was deliberate. Mr Murphy knew that it was wrong to go to the meeting, a breach of the rule referred to and a breach of the ethical standards of his profession. He assumed that Mr Farrer would not have legal representation at the meeting. Mr Murphy's objective in attending the meeting was to try to extract a settlement from Mr Farrer. The settlement of the action would have provided Mr Murphy with a significant financial advantage by way of the payment of his fees which he estimated at $70,000 to $80,000. As already mentioned, Mr Morris QC, counsel for the plaintiff and Mr Murphy, acknowledged that what Mr Murphy had done was wrong, egregiously wrong, seriously wrong and entirely inexcusable. In the light of these matters it is surprising that some of the appellants' written submissions challenge the proposition that Mr Murphy's conduct breached his ethical obligations. His breach is plain, as was acknowledged in the course of the hearing before the associate justice.
With regard to consent, the associate justice said:
· Par[7]: "The meeting had been arranged and conducted without the consent of the defendants' lawyer."
· Pars[10] and [11]:
"10 Mr Murphy, who was admitted to the Queensland Bar in 1997, said in a letter to the defendants' lawyer dated 31 July 2011 that he had given some thought as to whether he should attend the meeting. He said:
'I thought it was blindingly obvious that Mr Farrer would report our meeting to you, if he had not already alerted you in advance, which I thought he very likely had.'
11 The propriety of attending the meeting required more detailed consideration. If such consideration had been given, Mr Murphy would have ascertained that his attendance at the meeting would be in breach of professional standards absent the consent of the defendants' lawyer."
· Par[16]: "Mr Murphy attended a meeting with an opposing party without the consent of that party's lawyer in order to attempt to secure a settlement of the action."
There is no question that the meeting was arranged without the consent of the defendants' lawyer. There is also no question that Mr Murphy had not sought or obtained Mr Williams' consent to the meeting. However, any finding in relation to consent must be qualified to reflect the absence of evidence that, as between Mr Williams and Mr Farrer, Mr Williams had not approved Mr Farrer's attendance at the meeting.
Grounds (b), (d) and (f) of the notice of appeal were argued together. They contend that the associate justice erred in finding that Mr Murphy's primary motive in attending the meeting was to enrich himself, and that Mr Murphy may have intended to repay an anticipated gift of $600,000 from his son from the fruits of the litigation. Ground (b) asserts that: "The associate judge erred in law in finding (if he did) that John Murphy's sole or primary motive in attending the meeting … was to enrich himself". Ground (d) asserts that: "The associate judge erred in law when he concluded that John Murphy … had attended [the meeting] for the primary purpose of enriching himself". The associate justice made no such finding. In pars[15] and [17] of his decision his Honour made findings to the effect that Mr Murphy's fees were only recoverable in the event that the plaintiff was successful in the litigation, and Mr Murphy was in personal financial difficulties. Those findings are unimpeachable. Mr Morris QC, did not submit otherwise.
In written submissions, the appellants criticise some findings contained in par[34] of his Honour's decision which is:
"34 Regarding financial pressures which may have contributed to Mr Murphy's lack of objectivity and the breach of professional standards, there was evidence from Mr Murphy that he expected to receive a gift of $600,000 from his son. Such a gift would reduce financial pressure, but the possibility of it being received is not sufficient to support a conclusion that in future financial considerations will not come into play. As counsel for the defendants pointed out, if the gift eventuates, Mr Murphy may be keen to repay his son from the fruits, if any, of this litigation."
When cross-examined in the course of the hearing before the associate justice, Mr Murphy said that at the time of the meeting in question, and at the time of his evidence he and his wife owed $850,000 to their bank secured against their home, and, as at 22 July 2011, they had not paid the last three monthly mortgage instalments. He also said that he owed $40,000 on credit card debts and so forth, $100,000 to his son and one of his brothers, and $250,000 on a second mortgage over the home. He estimated the value of the home at $1.8 million. He agreed that if the plaintiff's action had settled, he would have recovered fees which he estimated at $70,000 to $80,000, and agreed that this would have been a significant financial advantage. He estimated his total income for the previous financial year at $120,000. In response to the proposition that as at 22 July 2011 he was under considerable financial pressure, he said that he and his wife owed a lot of money, but that he was not subject to any imminent threat. He agreed that things were pretty tough. He attributed the straitened financial circumstances of he and his wife to their having been defrauded by a business partner and said that the cost to them of the fraud and related litigation was about $4.5 million. He said that in June 2011 his son, who was aware of the position, telephoned him out of the blue and said that he expected that by Christmas or, at most, February 2012, he would be "transferring" $600,000 to Mr Murphy and his wife. A little later the associate justice said to Mr Murphy:
"I might have misunderstood your answer but I thought you told Mr Gunson that you only fell into arrears with your mortgage three months earlier. I assume you missed the May, June and July payments, but your son didn't say he'd give you $600,000 until June. So, I'm having trouble following."
Mr Murphy responded that the months of his missed mortgage payments were April, May and June. He did not demur from the proposition that his son was giving him the $600,000.
In par[34] above, the associate justice refers to this anticipated payment as a gift. In written submissions, the appellants challenge the finding that it was a gift on the basis that Mr Murphy initially said that the money was being transferred to him, and that this could mean, for example, that his son would be making a gift, making a loan, or repaying an existing loan. To my mind this quibble is of no consequence whatsoever. In any event, on the evidence before the associate justice, his finding is sound. Mr Murphy did not correct the associate justice's characterisation of the transfer as a gift.
In written submissions, the appellants also criticise the paragraph in question on the basis that it is pure speculation to, in substance, say that it could not be concluded that, in future, financial considerations will not come into play and that Mr Murphy may be keen to repay his son from the fruits, if any, of this litigation. Whilst this is speculation, it is, in the context of this matter, appropriate speculation.
Ground (c) of the notice of appeal contends that the associate justice erred in finding that Mr Murphy lacked objectivity in the relevant sense.
As noted by the associate justice, at par[5] of his decision, the application before him was advanced on the basis that intervention was required for the protection of the integrity of the judicial process in the litigation. At par[17], his Honour characterised the question before him as being whether there was a risk that, due to a lack of objectivity and independence, Mr Murphy would not conduct the case in compliance with his duties to the Court.
With regard to the applicable law, his Honour had referred to Grimwade v Meagher [1995] 1 VR 446 at 452, and Kallinicos v Hunt (2005) 64 NSWLR 561, at par[76]. What I distil from these authorities is that the court has an inherent jurisdiction to ensure the due administration of justice and to protect the integrity of the judicial process and, as a part of that jurisdiction, to prevent a legal practitioner from acting in a particular case in order that justice should not only be done, but be seen to be done. The test to be applied is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required that the legal practitioner be prevented from acting, in the interests of the protection of the integrity of the judicial process and due administration of justice, including the appearance of justice, giving due weight to the public interest in litigants not being deprived of their choice of legal representation without due cause. The jurisdiction is to be regarded as exceptional and is to be exercised with caution.
A matter which bears on the integrity of judicial proceedings is the objectivity and independence which the court requires of a legal practitioner. In this regard, see the comments of Thomas J in Kooky Garments Ltd v Charlton [1994] 1 NZLR 587, at 589 – 590.
With regard to Mr Murphy's lack of objectivity and independence, the associate justice said as follows in pars[14] to [17] in his reasons for decision:
"Mr Murphy's lack of objectivity and independence
14 Counsel for the plaintiff referred to the fact that it was not specifically put to Mr Murphy in cross-examination that he lacked objectivity. The propositions, which I have relied upon to reach the conclusion which I have, however, were all canvassed with Mr Murphy in cross-examination. In any event, Mr Murphy was represented by senior counsel at the hearing and it was obvious from the nature of the application that his objectivity was in question. He had ample opportunity to put facts before the Court showing that his ability to conduct the case complying with his duties to the Court was not at risk due to any lack of objectivity or independence. It is difficult to envisage any useful purpose which could have been served by asking Mr Murphy for his opinion of his own objectivity and independence. In any event, it is the appearance of lack of objectivity which is just as important as the fact of it.
15 Mr Murphy's fees were only recoverable in the event that the plaintiff was successful in the litigation. He was in personal financial difficulty. He had a social relationship with his client in that he was given hospitality in the form of overnight accommodation on several occasions whilst visiting Hobart.
16 Mr Murphy attended a meeting with an opposing party without the consent of that party's lawyer in order to attempt to secure a settlement of the action. He should have known that the meeting was inappropriate. It had been arranged several days earlier by a mutual acquaintance of the plaintiff, Mr Murphy and Mr Farrer. Mr Murphy did not use the time available to properly investigate and consider the propriety of the proposed meeting. He needed to look no further than the barristers' rules of his own State. He did not do so. He now acknowledges that his conduct was 'egregious'.
17 The facts that a lawyer will not recover fees unless the client is successful, that the lawyer is in financial difficulty and that the lawyer has a social relationship with the client would not, in isolation or cumulatively, be sufficient to justify a conclusion that the lawyer might lack the necessary objectivity and independence to fulfil his or her obligations to the Court. However, here, these features are combined with actual misconduct. The misconduct was a result of Mr Murphy failing to give due attention to the ascertainment of appropriate professional standards. He gave no explanation for this lack of attention. The most likely reason lies in a lack of objectivity and independence and I so find."
In support of this ground, in written submissions the appellants contend that, consistent with Briginshaw v Briginshaw (1938) 60 CLR 336, at 361 – 364, it was not proper for the associate justice to infer that because some kind of misconduct did occur, then Mr Murphy would very likely misconduct himself in some other way at trial. I reject this submission for a number of reasons. Firstly, it fails to recognise the significance of the misconduct that was established, and its magnitude. In the course of the hearing before the associate justice, Mr Morris QC correctly acknowledged that the conduct in question was egregiously wrong, seriously wrong and entirely inexcusable. The misconduct was not relevantly in dispute. Accordingly, consistent with Briginshaw, there was clear and cogent evidence of it. Secondly, his Honour did not, as the submission asserts, infer that it was very likely that Mr Murphy would misconduct himself in some other way at trial. The effect of what his Honour found is that Mr Murphy, by his conduct, had demonstrated that he lacked the necessary objectivity and independence in this particular case. That finding is unassailable. His Honour went on to say in par[24]:
"24 The factors in favour of imposing a restraint in the present circumstances are:
●The integrity of the judicial process and the due administration of justice is largely dependent upon lawyers observing professional standards and duties to the Court.
●Confidence that these standards and duties will be observed is dependent upon the lawyer not participating in proceedings where he or she lacks the necessary objectivity and independence and in some cases where that objectivity and independence, although in fact there, might be doubted.
●Mr Murphy, in the present proceedings, has demonstrated that he lacks the objectivity required for there to be confidence that standards and duties will be complied with in future.
●Accordingly, allowing Mr Murphy to continue to act in the proceedings undermines the integrity of the judicial process and the due administration of justice, including the appearance of justice."
As noted in the third dot point above, his Honour found that Mr Murphy, in the present proceedings, has demonstrated that he lacks the objectivity required for there to be confidence that the relevant standards and duties will be complied with in future. That finding is not, as counsel's reference to Briginshaw suggests, a dubious inference, but an inference that flows from Mr Murphy's established misconduct. His misconduct was not, as asserted in the appellants' written submissions, a momentary lapse. Mr Murphy had ample time to consider the course that he embarked upon, and persisted with it, notwithstanding his realisation that it was wrong.
In the appellants' written submissions they contend that, because it was never put to Mr Murphy that he had succumbed to financial pressure, and there was no evidence that he had, it follows that:
(a)Following Browne v Dunn (1893) 6 R 67, it was not open to the associate justice to find, as he did, that Mr Murphy was in a position of conflict on financial grounds on 22 July, or, by inference, would be at a time in the future.
(b)Following Briginshaw it was not open to the associate justice to infer (as he did) that Mr Murphy's alleged misconduct (which was itself not proven), was explained by such a conflict.
In support of this submission, the appellants rely on a concession made by counsel for the defendants, Mr Gunson SC, that the defendants were not suggesting Mr Murphy's continued involvement should be precluded in the interests of the plaintiff, Mr Allison, and that the issue was whether Mr Murphy's continued involvement constituted such a threat to the due administration of justice that injunctive relief should follow. His Honour's findings reflect this concession. His Honour did not find that Mr Murphy was in a position of conflict on financial grounds as between himself and Mr Allison. His Honour referred to the fact that Mr Murphy would not recover fees unless the plaintiff was successful, and the fact that Mr Murphy was in financial difficulty, as part of the factual matrix which justified his conclusion that the most likely reason for Mr Murphy's misconduct lay in his lack of objectivity and independence. It was appropriate that the associate justice should deal with this evidence in this way.
The assertion in (b) of the submission under consideration that it was not open to the associate justice "to infer (as he did) that Mr Murphy's alleged misconduct (which was itself not proven), was explained by such conflict" is simply wrong. Mr Murphy's misconduct was proven, and indeed acknowledged. Moreover, his Honour did not find that Mr Murphy was in a position of conflict on financial grounds as between himself and Mr Allison. I add that the cross-examination of Mr Murphy with regard to his financial difficulties was more than adequate to warrant the associate justice dealing with this evidence in the way in which he did.
Ground (e) of the notice of appeal contends that the associate justice erred in finding that the plaintiff could retain other counsel to replace Mr Murphy.
In his reasons for decision, the associate justice recognised that due weight must be given to the fact that Mr Murphy was the plaintiff's lawyer of choice, and went on to deal with a proposition advanced on behalf of the plaintiff that, if Mr Murphy ceased to act, the plaintiff would not be able to find another lawyer. That proposition is dealt with in the following paragraphs of his Honour's decision:
"29 There is the following evidence in Mr Murphy's affidavit:
'Paul Allison had no money, …
…
Paul Allison has a criminal record from a long time ago, … he can be difficult at times because his bad health affects his moods;
…
From my observations of Paul Allison personally and my dealings with him and the two solicitors who have acted for him, I can say that I am very sure that if I were to cease acting for him, he would not be able to find another lawyer who would act.'
30 However, there is no evidence that any attempt has been made to find another lawyer willing to act for the plaintiff. Mr Murphy said in his letter to the defendants' lawyer of 31 July 2011 that he had told Mr Farrer:
'Mr Allison had 2 very reputable and independent witnesses who would testify as to the formation of the relationship between Mr Allison and Mr Farrer;
I told Mr Farrer that in my opinion, the defendants were extremely likely to be held liable and after that it was only a matter of counting the money (or some words to that effect);
I told him that the amount would be very high, with interest and costs perhaps as much as perhaps $25 million, and that Mr Allison was 'into' the superannuation funds as well as Mr Farrer and the company;'
31 As to the strength of the case Mr Murphy said in his affidavit:
'When Paul Allison first instructed me, I wrote a fairly long opinion on prospects for him;
As a result of that work, I formed a particular view of the relevant legal principles;
…
One of the assets of Tuna Tasmania was (and is) a fishing boat named Cape Cleveland;
Without going into the facts I reasoned that, if I was correct generally, Tuna Tasmania would be holding the Cape Cleveland on trust as to 50% for Paul Allison;
I decided to see in as cheap and rapid a way as possible if the court would agree with my view of the applicable law;
I asked Paul Allison to lodge a caveat on the title of the Cape Cleveland, anticipating that Tuna Tasmania would commence proceedings to have it removed, which the company did.
His Honour Chief Justice Cox refused to order the removal of the caveat and his judgment was, with respect, consistent with my view of the law;
I was therefore fortified to advise Paul Allison to commence the substantive litigation.'
32 If it is true that the plaintiff is likely to succeed, that he has reputable and independent witnesses and that the judgment might be for an amount as high as $25m there should be good prospects of the plaintiff obtaining other representation.
33 I am not persuaded that it is likely that disqualifying Mr Murphy will leave the plaintiff without a lawyer."
In their written submissions the appellants contend that it was not for the appellants to persuade the Court that the plaintiff would be left without a lawyer. Rather, there is a presumption that a party should have his lawyer of choice, and it was the defendants who bore the onus of placing evidence before the Court that was sufficient to persuade the Court clearly that the plaintiff would very likely not be left without a lawyer, and that the resulting detriment to him was not sufficiently weighty to require the Court to decline to restrain Mr Murphy, even if the circumstances were otherwise sufficient to allow that step.
This contention overstates the position. As recognised by the associate justice, for the purposes of the Court's discretion, due weight had to be given to the public interest in litigants not being deprived of their choice of legal representation without due cause. This is a different issue from that which was raised by Mr Murphy in his affidavit, that is, that if he ceased to act for the plaintiff, the plaintiff would not be able to find another lawyer who would act for him. That proposition having been advanced in the interests of the plaintiff, it was proper that the associate justice deal with it in the light of all of the evidence. His reasons for rejecting it disclose no error.
Ground (g) of the notice of appeal contends that if it was appropriate to restrain Mr Murphy in the interests of the proper administration of justice, the order made was excessively wide for that purpose. The order is that Mr Murphy is to provide no further legal services, paid or unpaid, direct or indirect, in connection with this action.
In their written submissions the appellants contend that the order is excessively wide as it:
(a) prevents Mr Murphy's knowledge of the matter being transmitted to another lawyer;
(b)would inevitably involve the plaintiff in the very considerable expense of a replacement lawyer getting on top of the matter; and
(c)would deprive Mr Murphy of the fees to which he would be entitled in the event that the plaintiff succeeds.
It is correct that the order prevents Mr Murphy's knowledge of the matter being transmitted to another lawyer, and that the cost of a replacement lawyer getting on top of the matter could be very considerable. However, I do not accept that the order necessarily deprives Mr Murphy of the fees to which he would be entitled if the plaintiff succeeds. This would depend on the terms of his retainer. Mr Murphy described his retainer as a "spec agreement [which] means that when and if he wins he pays my fees". In the ordinary course I would expect Mr Murphy to be entitled to his fees if the plaintiff succeeds.
Mr Gunson SC, says that the defendants do not resist an order that permits Mr Murphy, within proper constraints, passing on to any other legal practitioner any information that he has in relation to the matter.
Mr Murphy has been the plaintiff's primary legal advisor in relation to this action since the proceedings were commenced in 2003. Mr Gunson SC has described the litigation as complex and complicated. Whilst I share the associate justice's view that the interests of the protection of the judicial process and due administration of justice outweigh other factors against imposing a restraint on Mr Murphy, with respect, I am of the view that the order that was imposed goes beyond that which is necessary to preserve those interests. Two factors that influence my view on this aspect of the matter are that when questioned by Mr Williams about the meeting with Mr Farrer, Mr Murphy promptly provided Mr Williams with full details of what had occurred, in his letter dated 31 July 2011 and that, on my reading of Mr Murphy's evidence before the associate justice, he did not prevaricate about the circumstances in which he attended the impugned meeting, and acknowledged the wrongness of what he had done.
I am satisfied that the interests of the protection of the judicial process and due administration of justice will be sufficiently preserved by an order to the effect that Mr Murphy not act as sole or senior counsel for the plaintiff in this action. To this extent, the appeal is allowed and the order that is the subject of appeal is set aside. I will hear the parties on the precise terms of the order that replaces it.
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