Antony & Joyce
[2020] FamCA 150
•13 March 2020
FAMILY COURT OF AUSTRALIA
| ANTONY & JOYCE | [2020] FamCA 150 |
| FAMILY LAW – LEGAL PRACTITIONERS – conflict of interest – orders made restraining the wife from retaining the firm of solicitors engaged or any Directors or employees of that entity to continue to act and represent the wife in the proceedings pending before this Court. |
| Osferatu & Osferatu (2015) FLC 93-666 Sellers & Burns & Anor (2019) 59 Fam LR 593 Kallinicos v Hunt (2005) 64 NSWLR 561 McMillan& McMillan (2000) FLC 93-048 Billington & Billington [2008] FamCA 409 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905 |
| APPLICANT: | Mr Antony |
| RESPONDENT: | Ms Joyce |
| FILE NUMBER: | CSC | 947 | of | 2019 |
| DATE DELIVERED: | 13 March 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Townsville |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 28 February 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr J Trevino |
| SOLICITOR FOR THE APPLICANT: | Reaston Drummond Law |
| COUNSEL FOR THE RESPONDENT: |
| SOLICITOR FOR THE RESPONDENT: | WGC Lawyers |
Orders
That the wife be restrained from retaining the firm WGC Lawyers or any Directors or employees of that entity, to continue to act and represent the wife in the proceedings pending before this Court.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Antony & Joyce has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: CSC 947 of 2019
| Mr Antony |
Applicant
And
| Ms Joyce |
Respondent
REASONS FOR JUDGMENT
Introduction
Although further pending applications filed by the wife Ms Joyce require determination, these Reasons refer to an application by the husband Mr Antony contained within his amended Response filed 20 February 2020 that:
“The wife be restrained from instructing WGC Lawyers in relation to these or any related proceedings.”
On 28 February 2020, the Court made interim parenting orders in respect of parenting arrangements for the parties’ son X aged eight years. Substantive property proceedings are on foot, and the wife also asks the Court to determine her pending applications filed 9 December 2019 for spousal maintenance, interim costs orders and interim property orders. However, the importance of determining the application for restraining the wife’s currently retained solicitors before allowing them to continue to act for the wife, is obvious.
Mr Lago, the solicitor advocate for the wife, in very detailed and considered written submissions set out at paragraphs 1 to 4 the “relevant law”, with which Mr Trevino of Counsel for the husband did not seriously contest. In addition to those authorities, I refer to and rely upon the statements of principle as are conveniently set out in Osferatu & Osferatu (2015) FLC 93-666 at [20] – [41] recently referred to with approval by the Full Court in Sellers & Burns & Anor (2019) 59 Fam LR 593.
In Osferatu (supra) at [20], the Full Court said:
“There are three established categories on the basis of which solicitors may be restrained from acting against their client or former client. They are: breach of confidence, breach of fiduciary duty and the inherent jurisdiction of a court over its officers and to control its process. Each category has its own principles which guide its operation. The third category may be involved in conjunction with either of the first two so there is clearly an overlap; nonetheless, the basis for the exercise of the jurisdiction in each is different (Kallinicos v Hunt (2005) 64 NSWLR 561).”
In Kallinicos v Hunt (supra) Brereton J summarised the relevant principles at [76]:
“…
However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice...
The test to be applied in this inherent jurisdiction is whether a fairminded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
The jurisdiction is to be regarded as exceptional and is to be exercised with caution.
Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause.
The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.”
(Citations ommitted)
In this case, the husband asserts that at the time the wife retained the firm WGC Lawyers, he was still a client of the firm in relation to a matter affecting his farm property, which is the major asset in the pool of property identified for alteration of interests.
Furthermore, and more generally, he asserts that inherent jurisdiction of the Court over its officers and to control its processes in and of the administration of justice compel the restraint including the appearance of justice.
I accept that the authorities adopted and summarised in McMillan& McMillan (2000) FLC 93-048 require the husband in this case to:
“…give evidence that he has provided confidential information to the solicitor… The client does not have to divulge the content of that information.” At [87].
When considering how appropriate weight must be given “to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause (see Billington & Billington (No. 2) [2008] FamCA 409, this must be balanced against the competing interests of the client which were described by Lord Millett in Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at [236] as follows:
“It is of overriding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest.”
When considering Lord Millett’s judgment, Goldberg J in PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905 at [50] – [51] said inter alia:
“50. It is apparent from Lord Millett’s judgment that there are three stages
which need to be considered:
·whether the firm is in possession of information which is confidential to the former client;
·whether that information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client;
·whether there is any risk that the information will come into the possession of those persons in the firm working for the other party.
51. The burden of establishing the first two propositions is upon the former client but the burden of establishing the third proposition moves to the firm proposing to act once the first two propositions are satisfied.”
Again at [35] in Osferatu (supra) the Court said:
“A balancing of the nature of the information against a consideration of the person to whom the information was given, when the information was given, the relevance of that information to the current proceedings, the risk of disclosure and any proposed protective measures is required before any determination can be made as to whether any relief is required and, if so, what is the appropriate relief.”
Noting that, of course, no testing of any evidence relied upon has been undertaken in the setting of this interlocutory application, I now set out the contextual history.
Contextual history
The following history is relevant:
a)The parties married in 2013 after a period of cohabitation. At the time of cohabitation, as now, the husband was the registered legal owner of a grazing property known by the name of “B Property” (“the farm”), comprising 8000 hectares on which around 1400 head of livestock are run;
b)The husband says the parties separated under the one roof in September 2018, before the wife and the parties’ child X left the farm in September 2019, which the wife claims is the date of final separation;
c)The husband had retained the firm WGC Lawyers (through one of its Directors Ms Saunders) since 2018 (although a letter of 27 November 2019 says 2015), to act on his behalf in respect of a dispute relating to the acquisition of part of the farm by a local authority for road purposes. The husband says, and I accept, that WGC Lawyers continued to hold his retainer (the husband being the sole legal owner of the farm) until he requested WGC Lawyers to release their file to another firm of lawyers, on 12 December 2019. The husband says he decided to seek other solicitors to deal with that commercial matter for him as he was concerned that if he attended the offices of WGC Lawyers, he might have come into contact with the wife. Despite concerns expressed by the husband about the time it took WGC Lawyers to provide him with “his” file, I accept that a USB containing (I infer) his file was provided to the husband on 20 January 2020;
d)I accept that the husband had, in 2012, retained WGC Lawyers (or its predecessor in practice) when he required legal representation in a matter where he was appointed as Trustee for Mr C – a person under some legal disability who was entitled to receive funds as a result of some entitlement. The husband says (at paragraphs 30 to 34 of his Affidavit) that the wife’s sister Ms D had asked him to be Trustee for Mr C, who is her son.
Due to his involvement in Ms D’s legal proceedings, the husband says that he provided “information about myself including my personal details, history, experience and qualifications” to demonstrate he was a fit and proper person to be a Trustee for Ms D’s child. The person at WGC Lawyers who attended to the matter was a Mr Greg Par. The husband says he does not know what other details Ms D may have given the solicitors about him. He alleges the wife and her sister Ms D “do not get on”. The wife also asserts that the firm WGC Lawyers had acted for her in other legal matters before the current family law proceedings began;
e)In late August/early September 2019, the husband asked Ms Saunders if WGC Lawyers would act for him in his family law matter. This enquiry occurred at a time when the husband says the parties were separated under the one roof;
f)The husband says, and I accept, Ms Saunders and/or another person at WGC Lawyers, after this initial enquiry, told the husband that:
i)The firm “may have a conflict” as she had met the wife through the husband’s involvement with the firm but she would raise the issue at a Directors meeting (I note that the firm is a corporate entity and, as such, the Directors are akin to “partners” of a firm);
ii)Ms Saunders subsequently informed the husband that she had spoken to the other Directors “and they thought it best not to act in the family law matter”;
iii)It is apparent, at least by 1 September 2019, the wife had similar advice from a “fellow director of WGC”, who the wife in her email of 1 September 2019 to Ms Saunders “indicated that on matters of family law it is a conflict of interest”. On 3 September 2019 Ms Saunders responded by email to the wife addressed to the farm email address (which I infer both the husband and wife had access to), in the following terms inter alia:
“… in any event I don’t think it appropriate for me to comment given that you’ve mentioned you have a lawyer acting for you and we have a conflict of interest acting in any family law matter” (my underlining)
It seems at least at 1 September 2019, the wife had received advice from a lawyer other than WGC Lawyers. The lawyer is not identified.
iv)Consistent with the position expressed by Ms Saunders as to the “conflict of interest”, on 1 September 2019 Ms Saunders sent two separate emails to the husband recommending other Cairns law firms to him – one of which is the firm now acting for him. Importantly, the husband says on 11 September 2019 he received a communication from WGC Lawyers on his commercial matter;
v)On 22 September 2019, the wife sent to persons, including Ms Saunders, an email which the husband, with some justification, was extremely upset about. The email is contained at pages 12 and 13 of “[H1]”, and speaks for itself. On 24 September 2019 (at 11.18am) Ms Saunders responded to the email, in the following terms:
“We are not acting for you or [Mr Antony] in relation to any family law matters. As such, I don’t think it’s appropriate for us to be involved in or privy to the matters mentioned in your email”.
Again, this response was sent to the wife at the farm email address.
g)Notwithstanding these communications by Ms Saunders to the husband (and the wife) as a Director of the firm WGC Lawyers and, in my view, on its behalf, the wife continued to seek to retain the firm as her lawyers in the family law dispute. She gives no explanation why she did so, in these circumstances;
h)Mr Edward Lago is the “Managing Director” of WGC Lawyers and is an accredited family law specialist. He has the conduct of the matter for the wife, assisted by Tamlyn Leahy. The history of his engagement with the wife in this matter can be summarised as follows:
i)Although an appointment was made by the wife to see Mr Lago before 23 September 2019, that day was the day he first received instructions to act for the wife. He, I accept, agreed to be retained by the wife without any knowledge of the email train set out earlier between his fellow Director Ms Saunders and both the husband and the wife. He says that as the Managing Director of WGC Lawyers he chairs the monthly Directors meetings and has “no recollection of Ms Saunders discussing this matter” with him. Mr Lago says, at paragraph 4 of his Affidavit, that:
“Prior to meeting with [Ms Joyce] I was informed by my personal assistant that WGC Lawyers had a current file for [Mr Antony] in relation to a Council matter and that the file was dormant”.
ii)I do not understand what is meant by “dormant” – particularly where the husband deposes to the file being current and in circumstances where Ms Saunders, on 25 September 2019, advised the husband that the firm was still acting on the commercial matter and that he was to contact Mr John Hayward whilst Ms Saunders was on maternity leave;
iii)WGC Lawyers, by letter to the husband’s new family law lawyers of 6 December 2019, took issue with the assertion made by solicitors on 27 November 2019 that WGC Lawyers should cease acting for the wife as they had a conflict of interest. I deal below, to the extent required, with the exchange about “confidential information”, however curiously Mr Lago seems to have adopted a position for the firm that as they now acted for the wife (and clearly intended to do so), the husband should retain other solicitors to deal with the commercial matter and send a “signed authority to Rhiannon Saunders of our office so that the file can be delivered to you”;
i)It is in my view telling, that Mr Lago as the Managing Director of the firm, expressed the position of the firm that he did on 6 December 2019, when on his evidence he did not appear to be aware of:
i)statements made to the husband and the wife by Ms Saunders;
ii)the fact that the commercial file for the husband was still active, in that the firm continued to accept they had a retainer from the husband on the commercial matter and that he knew “nothing about the file”;
iii)the email sent by the wife to his fellow Director on 22 September 2019 and Ms Saunders’ response on 24 September 2019 – the day after he determined there “was nothing that precluded me from acting for [Ms Joyce] in relation to family law matters against [Mr Antony]”
j)I accept that in an endeavour to his fellow employees and Directors to make it clear what his position was on behalf, I infer, of the firm, some time after 27 November 2019 he caused an email to be sent (see paragraph 14 of his Affidavit), in which he states categorically that, inter alia:
“I don’t believe that we could possibly hold any confidential information for [Mr Antony], but in the event that we do it is important that we establish and maintain an information barrier.”
Discussion
In this matter I have no evidence offered by Ms Saunders to contradict any of the evidence which the husband gives as to his exchanges with her. As Mr Lago has not, for the reasons he deposes to in his Affidavit, seen the file or discussed its contents with a fellow Director or employee, I am entitled to accept the assertions of the husband as to information given by him to Ms Saunders (and previously to a Mr Par) that he regards the information as sensitive and confidential. As authority makes clear, he does not have to divulge the particulars of the information.
Although there was a delay in the husband’s position being formally communicated seeking WGC Lawyers to cease acting, I do not regard the circumstances as being a waiver. The husband, on the basis of the statements made by Ms Saunders, was entitled to be surprised when, on or after 26 September 2019, he received a letter from WGC Lawyers indicating they were acting for the wife and making demands for information.
Certainly, to some degree, I accept that the parties’ attention was likely to be directed to other matters of personal conflict, being, at least:
a)the wife left the farm with X and an older sibling Y (from an earlier relationship of the mother) on or about 5 September 2019;
b)on 5 September 2019 the wife filed an application for a protection order naming the husband as the respondent, and a temporary order was made on 10 September 2019 in the wife’s favour;
c)on 28 September 2019 an incident that occurred between the husband and the wife resulted in the Police, on behalf of the husband, seeking a protection order in his favour against the wife. The wife has also been formally charged, arising from that incident, with the offences of “assault occasioning bodily harm” and “deprivation of liberty”;
d)the domestic violence proceedings and the criminal proceedings were further mentioned before the State Magistrates Court on 11 November 2019. The firm WGC Lawyers appeared for the wife on that occasion.
Applying the principles earlier set out to the facts as set out in these Reasons, I find that:
a)it is likely the firm WGC Lawyers does hold confidential information given to them by the husband, or about the husband, either during the course of the commercial matter or the earlier matter in 2012;
b)although I accept that in the family law property proceedings the husband will be required to disclose the extent of his negotiations with the local authority over the anticipated resumption as it may affect the value to be attributed to the farm property, the fact that WGC Lawyers holds details of those negotiations and the husband’s attitude or instructions means, in my view, that it could not be lightly dismissed that evidence from Ms Saunders (including her written or oral advice) may become relevant in the family law proceedings;
c)the clear and unequivocal statements made in writing by Ms Saunders to both parties that the firm WGC Lawyers had a “conflict of interest” (although not defined by Ms Saunders), left the husband in the position where he felt compelled to seek other legal representation, at least initially in the family law proceedings;
d)the reasons why the wife, despite similar clear statements from Ms Saunders, continued to seek to retain WGC Lawyers after, I infer, she knew the husband had been told the firm had a “conflict of interest” is not explained by the wife in her Affidavit. I am prepared to accept the evidence of Mr Lago that when he took instructions from the wife on 23 September 2019, he was not aware that a fellow Director of the legal practice had informed the wife the firm had a “conflict of interest”;
e)the actions, when the firm became aware of the husband obtaining solicitors (without perhaps Mr Lago knowing the firm retained was actually one of the firms recommended by Ms Saunders), in directing the husband to take his commercial matter elsewhere, only added fuel to the husband’s disquiet about the firm WGC Lawyers. He, of course, is now suffering the likely financial consequences of bringing a new firm up to date on his commercial matter;
f)a fair minded and reasonably informed member of the public reading the earlier clear statements of Ms Saunders, at least, would conclude, in my view, that the firm WGC Lawyers would, and should, not act for either party;
g)whilst the firm WGC Lawyers has taken instructions and performed some significant work for the wife and that I accept requiring the wife to retain new lawyers will cause some inconveniences and perhaps delay, to a large extent these consequences flow from the wife disregarding the clear statements made by Ms Saunders. Alternatively, if the wife did inform Mr Lago of those earlier statements (and I have no evidence she did), then the consequences flow from the decision made, in my view, against authority, to act for her; and
h)it is not necessary to make any findings about the breach or otherwise of Rule 11 of the Australian Solicitors Conduct Rules, save that I am not satisfied that the circumstances in this case meet the exception prescribed by Rule 11.3.
Conclusion
For the reasons given, I will restrain the wife from retaining the firm WGC Lawyers or any Directors or employees of that entity, from continuing to act and represent the wife in the proceedings pending before the Court.
Family law proceedings are essentially inter party civil proceedings of an adversarial nature. I am invited by the application of the husband to extend the injunction or restraint to “any related proceedings”. The “related proceedings” at this time appear to be criminal proceedings and domestic violence proceedings before the Magistrates Court of Queensland.
In my view, it is a matter for WGC Lawyers to decide whether or not they continue to act for the wife in related proceedings. I am not satisfied this Court has the jurisdiction to restrain the firm from acting for the wife in another court. Of course criminal proceedings are not strictly “inter party” proceedings. It is a matter for the court in which those proceedings are being conducted to decide, if asked to do so, whether or not the firm WGC Lawyers should continue to represent the wife in those proceedings.
In making these statements, I do not make any findings about whether Ms Saunders, as one of the recipients of the wife’s email of 22 September 2019, is likely to be a witness in the “related proceedings”.
I have been informed now, after I had prepared these Reasons, that the proceedings are listed before me on 24 March 2020 by telephone. On that occasion I intend to take further submissions as to a timetable for hearing of the matters still requiring interim determination before the Court.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 13 March 2020.
Associate:
Date: 13 March 2020
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