Artek Productions Pty Ltd v The World of Adams Platform Pty Ltd
[2011] VSC 240
•24 June 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 8940 2007
| ARTEK PRODUCTIONS PTY LTD (ACN 097 524 742) AND OTHERS (according to the schedule attached) | Plaintiffs |
| v | |
| THE WORLD OF ADAMS PLATFORM PTY LTD (ACN 080 816 217) AND OTHERS (according to the schedule attached) | Defendants |
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JUDGE: | ZAMMIT AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16 May 2011 | |
DATE OF JUDGMENT: | 24 June 2011 | |
CASE MAY BE CITED AS: | Artek Productions Pty Ltd and ors v The World of Adams Platform Pty Ltd and ors | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 240 | |
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LEGAL PRACTITIONERS – Solicitors – Application to restrain solicitors from acting – Inherent jurisdiction –Whether some risk of misuse of confidential information – Whether solicitor likely to be a material witness – Whether solicitor has personal interest in outcome of litigation – Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Bevan-John | Mr J Dimitropoulos, Lawyer and Consultant |
| For the Second and Fourth Defendants | Mr J Pennell | Stephen Zelek, Solicitor |
HER HONOUR:
Introduction
By summons dated 12 July 2010 the second defendant, Intellectual Property and Business Strategies Pty Ltd, and fourth defendant, Roger Neil Velik (“the defendants”), sought orders, including an order for a prohibitory injunction, to restrain the plaintiff’s solicitors, Mr John Dimitropoulos, from further acting on the plaintiff’s behalf in this proceeding.
The defendants also seek an order for leave to serve a counterclaim against the plaintiffs in this proceeding. As at the date of this hearing no other matter sought in the plaintiffs’ summons dated 12 July 2010 has been determined. Accordingly, the defendants’ reference to the counterclaim is at this stage a proposed counterclaim.
The defendants rely upon the affidavits of Roger Neil Velik dated 12 July 2010 and 12 May 2011 and in support of this application. The plaintiffs rely upon the affidavits of John Dimitropoulos sworn 28 July 2010 and 13 May 2011, and John Tatoulis sworn 13 May 2011.
The claim
The plaintiffs’ claim arises out of the commercial rights concerning the Adams Platform technology (“the technology”).
The plaintiffs’ claim is based upon their entitlement pursuant to a deed executed by the parties dated 22 December 2000(“the Deed”). Pursuant to the Deed, rights to the technology were transferred to World Adams Platform Pty Ltd (“WAP”), the first defendant.
The parties to the Deed are as follows:
Tasios Ioannides (first plaintiff),
Eleftheria Ioannides (second plaintiff),
Adam Leslie Clark (sixth defendant),
The Facility Pty Ltd,
Kitaron Productions Pty Ltd,
Wise the Software Pty Ltd,
The Facility Productions Pty Ltd,
The Net Vision Broadcasting Services Pty Ltd,
Dial Up TV Pty Ltd,
Chief Holdings Ltd and
The World of Adams Platform Pty Ltd, Adam 12 Holdings Pty Ltd (the first defendant).
The plaintiffs allege that pursuant to the terms of the Deed, WAP and the other parties to the deed agreed to pay the second and third plaintiffs an amount (15% of net revenue monies) received by WAP derived from the granting of broadcasting licences utilising the technology up to a ceiling amount of $10m. The plaintiffs allege that WAP received monies from the granting of broadcasting licences and that pursuant to the Deed, the sum of $644,775.55 became due and payable to the second and third plaintiffs or their nominees, Artek Production Pty Ltd (the first plaintiff) in respect of the period 1 January 2003 to 31 March 2004.[1]
[1]Statement of claim at [9].
Paragraph 9 of the statement of claim alleges that on 27 August 2004 the accountant for WAP, Paul Warburton, advised the plaintiffs’ solicitors by letter of the sum payable in respect of the said period. The particulars state that on 30 August 2004 Paul Warburton admitted to the plaintiffs’ solicitor, John Dimitropoulos in a telephone conversation that $644,775.55 was due and payable.
At paragraph 12 of the statement of claim the plaintiffs allege that on 25 February 2005 in proceeding 2004 No. 8433 in the Supreme Court of Victoria, Mr Justice Kaye gave judgment against WAP in respect of the matters set out in paragraphs 7 to 11 of the statement of claim for the sum of $644,735.55 together with costs and interest pursuant to the Supreme Court Act 1985 in the sum of $27,133.55 and that the judgment remains unsatisfied. The defendants do not admit paragraph 12 of the statement of claim.
There was no material put before the Court in relation to paragraph 12 of the statement of claim. It was agreed by the parties that the judgment stands.
Following the Deed, WAP entered into an agreement with Media Work Communications Pty Ltd (“MWC”) for sales and marketing of the technology. MWC was controlled by the fourth, fifth and sixth defendants. The plaintiffs claim that pursuant to terms of the Deed (clause 8), WAP continued to have obligations to the plaintiffs even if it had disposed of its interest in the technology. The plaintiffs make claims against the defendants, including claims for breach of trust, conspiracy and breaches of the Corporations Act.
By way of the proposed counterclaim the second and fourth defendants claim that in or about the middle of 2000 the second and third plaintiffs and the sixth defendant made representations to the fourth defendant about the technology, and what it could do, the marketability of the technology and business opportunities relating to the technology.[2] The second and fourth defendants allege that the representations made by the second and third plaintiffs and the sixth defendant were not accurate and that the second and third plaintiffs and sixth defendant engaged in misleading and deceptive conduct.
[2]Affidavit of Roger Neil Velik sworn 13 May 2011, Exhibit RV9 at [6].
Mr Velik deposes to the following.[3]
[3]Affidavit of Roger Neil Velik sworn 13 May 2011 at [9].
9.Also, during the period from in or about the middle of 2000 leading up to the signing of the Deed dated 22 December 2000 the subject of the statement of claim (the statement of claim deed), I became aware of and understood, the following matters from words then said to me in that regard by the sixth defendant, the second plaintiff and the third plaintiff:
(a)as part of the close business relationship between the Sixth Defendant on the one hand, and the second plaintiff and the Third Plaintiff on the other, deposed to in paragraph 28 of the RV 12 July affidavit, the sixth defendant, the Second Plaintiff and the Third Plaintiff had entered into business dealings with each other, which involved companies that they owned jointly,
(b)the said companies which they so jointly owned included the following companies which I observe became parties to the statement of claim deed … :
(i)Facility Productions Pty Ltd (ACN 006 875 830) (“Facility”);
(ii)Kitaron and Productions Pty Ltd (ACN 006 573 164) (“Kitaron”);
(iii)Wiser Software Pty Ltd (ACN 063 433 170) (“Wiser”);
(iv)The Facility Productions Pty Ltd (ACN 063 610 944) (“Facility Productions”);
(v)Net Vision Broadcasting Services Pty Ltd (ACN 082 130 023) (“Net Vision”); and
(vi)Dial Up TV Pty Ltd (ACN 086 840 140) (“Dial Up TV”);
(c)under the said business dealings with the Sixth Defendant, the Second Plaintiff and the Third Plaintiff, they held the back-up copy of the Adams Platform technology on a CD ROM through a company called Chief Holdings Limited based in Cyprus (Chief) which they jointly controlled and which I observed also became party to the Statement of Claim Deed;
(d)Chief held a licence of the Adams Platform technology from the Sixth Defendant and gave Chief access to the said back-up copy of the Adams Platform technology, and also the worldwide rights for broadcasting over telephony using the Adams Platform technology;
(e)Chief on-licensed rights for broadcasting over telephony using the Adams Platform technology to a company that the sixth defendant, the Second Plaintiff and the Third Plaintiff jointly owned, being Net Vision;
10.Also during the period leading up to the signing of the statement of claim deed, I observed that the backup copies of the Adams Platform technology, the licence and on‑licensing of rights deposed to respectively in sub‑paragraphs (c), (d) and (e) of paragraph 9 above, are the subject of items 4 and 7 in the statement of claim deed.
…..
11.During the periods leading up to the signing of the Statement of Claim Deed, and after the signing of the Statement of Claim Deed, I also became aware of, and understood, the following matters from words then said to me in that regard by the sixth defendant:
(a)Dimitropoulos looked after the Sixth Defendant’s interests in a number of matters that involved the Sixth Defendant’s business dealings;
(b)Dimitropoulos had helped the Sixth Defendant on a number of occasions with advice and guidance relating to things that the Sixth Defendant was doing;
(c)Dimitropoulos acted jointly for the Sixth Defendant, the Second Plaintiff and the Third Plaintiff in relation to joint interests in the Adams Platform Technology;
(d)Dimitropoulos was a relative of the Third Plaintiff;
(e)Dimitropoulos was appointed attorney for Chief.
13.I have also observed that Dimitropoulos signed the Statement of Claim Deed as attorney for the Third Plaintiff, and also as attorney for Chief.
14.Now produced and shown to me and marked “RV 10” are copies of searches that I have procured be carried out for each of the companies from the available public records of the Australian Securities and Investment Commission on 5 May 2011 (“the ASIC Searches”).
15.The ASIC Searches which show, amongst other things:
(a)Dimitropoulos was a director of Facility during the period 26 November 1987 to 28 September 1990 and from 18 August 2010 to currently;
(b)Facility is a 100% shareholder of Facility Productions;
(c)each of Kitaron, Wiser, Facility and Net Vision have registered offices at 24 Harper Street, Northcote VIC 3070 (Northcote Address) during the period from 13 February 2002 to a date in 2005 or 2006, or in the case of Facility to currently;
(d)the address of the Third Plaintiff is the Northcote address;
(e)the address of Dimitropoulos is also the Northcote address.
16.In the above regard, to the best of my knowledge, information and belief, at all relevant times Dimitropoulos has resided at the Northcote address.
17.The Second and Fourth Defendants also intend to cross-examine Dimitropoulos at the trial of this proceeding in relation to, amongst other things, the matters deposed to in paragraph 9, going to, amongst other things:
(a)the interpretation and enforceability of the Statement of Claim Deed;
(b)claims by the Second and Fourth Defendants in the Counterclaim, including in relation to the Second Plaintiff’s Representation.
18.The Second and Fourth Defendants also intend to cross‑examine Dimitropoulos at the trial of this proceeding in relation to, amongst other things, the actual and constructive knowledge of the Second and Third Plaintiffs concerning the Adams Platform Technology Deficiency Claims, in turn, also going to amongst other things:
(a)the interpretation and enforceability of the Statement of Claim Deed;
(b)claims by the Second and Fourth Defendants in the Counterclaim including in relation to the Second Plaintiff’s Representation …
The defendants submit that (a) Mr Dimitroupoulos should be restrained from further acting for the plaintiffs on the basis that: there is a potential for misuse of confidential information through WAP and MWC, the second and fourth defendants’ interests became aligned with the sixth defendant. As solicitor for the sixth defendant or as solicitor for companies in which the sixth defendant was a director, Mr Dimitropoulos would have been privy to confidential information in relation to the technology and as such information that subsequently became confidential to the second and fourth defendants; (b) included in the companies controlled by the plaintiffs and the sixth defendant for which Mr Dimitropoulos acted was Facility Pty Ltd. In addition to acting as its solicitor, Mr Dimitropoulos was a director of Facility during the period 26 November 1987 to 28 September 1990 and from 8 August 2010; (c) as a director of Facility and as a Power of Attorney of Chief it is to be inferred that Mr Dimitropoulos maintains a commercial relationship with the plaintiffs beyond that of solicitor and as such potentially has commercial interests in the outcome of the case; (d) Mr Dimitropoulos will be a material witness in the case and therefore should be restrained from acting in the proceeding. Mr Dimitropoulos will be required by the defendants to give evidence in the proceeding in relation to the following matters:
(i)the interpretation of clause 8 of the Deed (paragraph 9 of the statement of claim);
(ii)enforceability of the Deed in light of the fact that it is the fourth defendant’s position that the plaintiffs have
(a)misrepresented the technology’s function and application and as such disputed the Deed is in fact enforceable;
(b)in breach of the Deed entered into a licence agreement for the use of the technology with John Tatoulis and Media World Pty Ltd. Meetings were conducted between the second plaintiff and the sixth defendant and Mr Dimitropoulos after the execution of the deed. That is, after a time that the plaintiffs had no further rights as to the proportion and marketing of the technology; and
(iii)Mr Dimitropoulos’ his commercial interests with the plaintiffs and particularly his interests in Facility and Chief and to the representations by the plaintiffs and Adam Clark in relation to the technology.
The plaintiffs’ evidence
The evidence before the Court in opposition to the application is as follows:
1.Mr Dimitropoulos acted for and represented the interests of the second and third plaintiffs in respect of their dealings involving the technology;[4]
[4]Affidavit of John Dimitropoulos sworn 13 May 2011 at [2].
2.Mr Dimitropoulos has from time to time acted as Power of Attorney for the second and third plaintiffs;[5]
[5]Ibid at [3].
3.Mr Dimitropoulos acted for and represented the interests of the second and third plaintiffs in respect of their dealings involving the technology, including their dealings with the sixth defendant;[6]
4.Mr Dimitropoulos has never acted for the sixth defendant as alleged and or implied in paragraphs 38, 39 and 40 of the Velik 12 July affidavit;[7]
5.Mr Dimitropoulos does not believe that he has any conflict which prevents him from continuing to act for the plaintiffs, nor do his clients;[8]
6.Mr Dimitropoulos did not act on behalf of the sixth defendant in respect of any negotiations with John Tatoulis and/or Media World Pty Ltd (MWPL) and he has always acted on behalf of the second and third plaintiffs in respect of their dealings with the sixth defendant and for the plaintiffs in respect of their entitlements under the Deed;[9]
7.in so far as Mr Dimitropoulos may have prepared documents which involved the sixth defendant as a co‑director or shareholder with the second or third plaintiffs or their related companies, he did so upon instructions from the second and third plaintiffs;[10]
8.the third plaintiff is Godmother to Mr Dimitropoulos’ daughter and the second plaintiff is Mr Dimitropoulos’ wife’s uncle;[11]
9.Mr Dimitropoulos has acted for the second and third plaintiffs in respect of the dispute with the defendants which resulted in the execution by the parties of the Deed;[12]
10.Mr Dimitropoulos has “a deep an extensive knowledge of the facts and circumstances relevant to the subject matter of these proceedings and the claims by the plaintiffs against the defendants, including the second and fourth defendants and has acted as solicitor on record from the commencement of the proceedings in 2007”;[13]
11.the second and third plaintiffs reside in Greece. The second plaintiff has travelled back to Australia for the purposes of conferring with Mr Dimitropoulos and counsel and to attend mediation. Substantial costs and expenses have been incurred to date for the purpose of prosecuting this matter and the plaintiffs have suffered prejudice by the actions, claims and delay occasioned by the application by the second and fourth defendants seeking Mr Dimitropoulos’ removal from these proceedings based upon a claim of conflict.
[6]Ibid at [3].
[7]Affidavit of John Dimitropoulos sworn 28 July 2010 at [16].
[8]Ibid at [18].
[9]Affidavit of John Dimitropoulos sworn 13 May 2010 at [7].
[10]Ibid at [8].
[11]Ibid at [8(d)].
[12]Ibid at [10].
[13]Ibid at [11].
The plaintiffs also rely upon an affidavit of John Tatoulis.[14] Mr Tatoulis was at all material times the director of MWPL. MWPL entered into a licence agreement with WAP for the use of the technology. Mr Tatoulis deposes that he is aware in broad terms of the dispute between the plaintiffs and the defendants in this proceeding.[15]
[14]Affidavit of John Tatoulis sworn 13 May 2011.
[15]Ibid at [2] to [4].
Mr Tatoulis has perused a copy of the affidavit of Roger Neil Velik sworn 12 July 2010 and in particular paragraphs 25, 27, 38(d) and 40 where his name and that of MWPL is referred to.
Mr Tatoulis deposes at paragraphs 6 and 7 of his affidavit to the following:
(6)In regard to the matters deposed in paragraph 25 of the Velik affidavit, at all relevant times I retained the legal firm of Marshalls and Dent to advise me and MWPL in respect of formal negotiations with WAP (the formal meetings). My recollection is that those negotiations took place from 2001 and afterwards, although being aware of and having expressed an interest about the technology I had held discussions with both Tassos Ioannides and Adam Clark prior to 2001, however those discussions were simply expressions of interest by me on behalf of MWPL for a licence of the technology.
(7)To the extent of the participation of John Dimitropoulos in any meetings prior to 2001, I always understood that he was acting as a solicitor for Tassos Ioannides and not representing WAP or Adam Clark.
Mr Tatoulis’ evidence is that when formal meetings were held about acquiring a licence for the technology, he retained Bill Marshall of Marshalls and Dent and recalls that WAP was represented by Roger Velik, who was a director of WAP and a practising lawyer, as well as by the firm Kleiger Partners. He also recalls many meetings where one or more or all of Adam Clark, Graham Clark, Linda Clark and the fourth defendant were present with or without Kleiger Partners and including Marshalls and Dent.
In relation to Mr Dimitropoulos’ participation in formal meetings he recalls that Mr Dimitropoulos attended one or more of those meetings and always understood that he did so as solicitor and advised Tassos Ioannides and Eleftheria Ioannides but not in any way represented WAP or Adam Clark.[16]
[16]Affidavit of John Tatoulis sworn 13 May 2011 at [8] and [9].
The application
There was no dispute between the parties as to the general grounds on which a court may restrain a legal practitioner from continuing to act for a party, namely:
(a)where there is a danger of misuse of confidential information;
(b)where there is a breach of fiduciary duty of loyalty not to act against a former client in the same or closely related matter; and
(c)under the Court’s inherent jurisdiction to control the conduct of solicitors and officers of the Court.[17]
[17]TJ Board and Sons Pty Ltd v Castello and ors [2008] VSC 91 at [3].
The defendants’ application is based on the grounds set out in paragraph 22(a) and (c).
In Kallinicos and another v Hunt and ors,[18] Brereton J undertook a detailed examination of the authorities concerning the Court’s supervisory jurisdiction over lawyers. In relation to the inherent jurisdiction his Honour summarised the following principles from the authorities, which were adopted by Her Honour Justice Hollingworth in TJ Board and Sons:[19]
(a)the test to be applied in the inherent jurisdiction is whether a fair minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a lawyer 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;
(b)the jurisdiction is exceptional and is to be exercised with caution;
(c)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; and
(d)the timing of the application may be relevant, in that the cost, inconvenience and impracticality of requiring the lawyers to cease to act may provide a reason for refusing to grant relief.
[18][2005] NSWSC 1181; (205) 64 NSWLR 56 at 582-3.
[19]TJ Board and Sons Pty Ltd v Castello and ors [2008] VSC 91.
The defendants rely upon the Kallinicos decision in support of their application.
Her Honour Justice Hollingworth in TJ Board’s case noted the following in relation to the Kallinicos decision:
Kallinicos v Hunt was also a very different kind of case. In that case, the solicitor had acted on behalf of a partnership company in respect of transactions which were highly contentious in a later litigation. The directors and shareholders of the company were the plaintiff and the defendant. In preventing the solicitor from continuing to represent one set of interests only, Brereton J concluded that not only was the solicitor almost certainly a material witness, but he might well be exposed to a suit and have an interest in how the evidence turned out. He was in a clear position in which his client’s interests, his own interest and his obligation to the Court may well be in conflict. There were serious allegations of wrong doing and the possibility of the solicitor being implicated in improper conduct. That the solicitor was prevented from acting in those circumstances is not surprising.[20]
[20]TJ Board and Sons Pty Ltd v Castello and ors [2008] VSC 91 at [10].
The plaintiffs relied upon a line of cases which considered applications seeking to restrain a solicitor from continuing to act by a non‑client. The Court was taken to the decisions of Bahonko v Nurses Board of Victoria (No 3,)[21] Executive Homes Pty Ltd v First Haven Pty Ltd,[22] and Scanlon v Scanlon.[23] The latter cases considered whether a solicitor should be prevented from acting for a party in litigation where he is to be a material witness. In Executive HomesPty Ltd and Scanlon it is said that the basis for preventing a solicitor from acting for a party in litigation where he is a material witness arises where there is shown to be reasonable likelihood that the solicitor would otherwise breach or be in conflict with his duty to the Court as a witness.[24]
[21][207] FCA 491.
[22][1999] VSC 261.
[23][2001] NSWSC 1078 Windeyer J.
[24]Executive Homes Pty Ltd v First Haven Pty Ltd [1999] VSC 261, Byrne J at [10]-[11] and Scanlon v Scanlon [201] NSWSC 1078, Windeyer J at [7], [8], [10] and [11].
The plaintiffs submit that it is necessary for the applicants to demonstrate that there is a real and sufficient possibility of that breach or conflict arising.[25]
[25]Executive Homes at [11]-[16].
The plaintiffs referred to Scanlon’s case[26] in which His Honour Justice Windeyer said:
The interest of the Court in these matters is that there should not be a conflict of interest arising as a result of the representation. Usually a restraining order is sought by a former client to prevent the client’s former solicitor from acting in proceedings against that client, or in proceedings where confidential information of the former client might be used or divulged. The conflict said to arise in the present case is a conflict between the duty to the client and the duty to the Court. In most such cases, what would be involved would be some personal interest of the lawyer in the litigation. For instance, there are cases where a particular result would be likely to result in a claim in negligence against a solicitor which might be thought to influence the frankness of the solicitor as a witness in the conduct of the action, perhaps giving rise to an apprehension as to incomplete disclosure of documents and the like. … Nevertheless I proceed on the basis that the true argument was that there was some risk of conflict between the duty of the solicitor to the Court and the duty of the solicitor to the client. That supposed conflict really assumes that a solicitor might give tailored or biased evidence or even false evidence to assist a client or to support the solicitor’s actions so as to negative negligence, but the same conflict could perhaps be said to arise where a solicitor advises a client on discovery. It is, I think, apparently that the conflicts would only arise if the solicitor was to have an interest in the result of an action, additional to his interest in doing his best for a client to have a success in an action.
[26]Scanlon v Scanlon at [8] and [10].
Potential misuse of confidential information
The evidence before the Court is that Mr Dimitropoulos acted for the second and third plaintiffs in negotiations leading up to the execution of the Deed by the parties and in subsequent negotiations and/or meetings for the assignment of the technology from WAP to MWPL.
It is asserted by the defendants that Mr Dimitropoulos acted for the sixth defendant in the course of those negotiations and meetings. This is denied by Mr Dimitropoulos. Mr Tatoulis’ evidence is that he did not consider Mr Dimitropoulos was acting for the sixth defendant in any negotiations he was involved in where the sixth defendant and the first and second plaintiffs and Mr Dimitropoulos were present.
The defendants are unable to point to any objective evidence that Mr Dimitropoulos acted for the sixth defendant in any capacity.
I am satisfied on the evidence before me that Mr Dimitropoulos did not act on behalf of the sixth defendant.
The defendants submit that through WAP and MWC their interests became aligned with the sixth defendant. As solicitor for Mr Clark or as the solicitor for the companies in which Mr Clark was the director, Mr Dimitropoulos would have been privy to confidential information in relation to the technology and as such information that subsequently became confidential to the second and fourth defendants. The defendants submit that there is the potential for misuse of confidential information by Mr Dimitropoulos by acting for the plaintiffs by reason of his close association and duty to Adam Clark, the sixth defendant and impliedly to the defendants.
The defendants’ rely upon a number of ASIC searches to demonstrate that Mr Dimitropoulos has a close business relationship with the second and third plaintiffs and the sixth defendant.
The information contained in the ASIC searches does no more than suggest that the second and third plaintiffs and sixth defendant appear to have had some in common business dealings. In relation to the Facility Pty Ltd the only connection to Mr Dimitropoulos is the registered address of three of the companies which appears to be his business address and the fact that he has been a director of the Facility Pty Ltd since 18 August 2010 and that the sixth defendant was a director of the same company from 16 November 1999 to 17 February 2004.
I am satisfied that Mr Dimitropoulos has not been retained by the sixth defendant in relation to matters pertaining to the current litigation. I am not satisfied that the information disclosed in the ASIC searches demonstrates a sufficiently close association between Mr Dimitropoulos and Mr Clark and therefore impliedly the defendants.
Perhaps more critical for the defendants is that the potential confidential information said to have been obtained by Mr Dimitropoulos is not identified even at the most general level. As was noted in Carringdale County Club Estate Pty Ltd v Astill,[27] upon which Her Honour Justice Hollingworth relied on in TJ Board and Sons Pty Ltd,[28] the degree of precision demanded in an application such as this should be in the following terms:
It is a basic requirement that the full material will be recognised as having the character of confidential information, the information in question must be identified with precision and not merely in global terms. … The requirement is insisted upon even though it may necessitate disclosing to the Court the very information the confidentiality of which it is sought to preserve by the action. This requirement has its foundation in the need for the Court to be able to frame a clear injunction, should relief against misuse of confidential information be granted.
[27](1993) 42 FCR at 314-315.
[28]Ibid at [51].
In this case, there is no evidence before the Court of the nature of the information which is said to have been obtained by Mr Dimitropoulos.
Apparent commercial interest of Mr Dimitropoulos
The defendants submit that Mr Dimitropoulos has an apparent commercial interest in the outcome of this case on the basis of his commercial relationship with the second and third plaintiffs and potentially the sixth defendant.
The evidence relied upon was Mr Dimitropoulos’ role as a director of the Facility and as the Power of Attorney of Chief. The defendants submit that on the basis of this information it can be inferred that Mr Dimitropoulos maintains a commercial relationship with the plaintiffs beyond that of solicitor and therefore potentially has a potential interest in the outcome of this case. Further, the defendants submit that in addition to acting as solicitor to a number of companies controlled by the plaintiffs and the sixth defendant, including the Facility Pty Ltd, he was also director of the Facility Pty Ltd during the period 26 November 1987 to 28 September 1990 and from 8 August 2010.[29]
[29]Affidavit of Roger Neil Velik sworn 12 May 2010 at [15], Exhibit RV10.
The plaintiffs’ evidence is that for reasons of convenience Mr Dimitropoulos was appointed attorney for Chief and otherwise does not dispute the accuracy of the ASIC searches.[30]
[30]Affidavit of John Dimitropoulos sworn 13 May 2011 at [8].
As noted, I am not satisfied that the ASIC searches demonstrate a sufficiently close business relationship between Mr Dimitropoulos and the plaintiffs and the sixth defendant.
The plaintiffs submit that although there may be a basis for preventing a solicitor from acting for a party in litigation where he is to be a material witness, this arises where there is shown to be a reasonable likelihood that the solicitor would otherwise breach or be in conflict with his duty to the Court as a witness.[31]
[31]Executive Homes Pty Ltd v First Haven Pty Ltd [1999] VSC 261, Byrne J at [10]-[11] and Scanlon v Scanlon [201] NSWSC 1078, Windeyer J at [7], [8], [10] and [11].
The issue of restraint on a solicitor to act if there is a risk of conflict was canvassed by His Honour Justice Byrne in Executive Homes Pty Ltd v First Haven Pty Ltd.[32]
[32][1999] VSC 261.
This is not a case where it can be said that Mr Dimitropoulos has a personal interest in the litigation. As noted by Windeyer J in Scanlon v Scanlon, it has not been suggested how it is that Mr Dimitropoulos’ relationship might be thought to influence his frankness as a solicitor or that there is an apprehension as to incomplete disclosure by him. There is nothing in the material before me to suggest that there is a risk of conflict between Mr Dimitropoulos’ duty as a solicitor to the Court and his duty as a solicitor to the plaintiff.
I am not satisfied that there has arisen or is likely to arise as a result of any relationship Mr Dimitropoulos has with the plaintiffs or possibly the sixth defendant a position of conflict that the Court should restrain him from so acting in this proceeding in the future.
Mr Dimitropoulos as a witness
The defendants submit that Mr Dimitropoulos will be required by them to give evidence in the proceeding in relation to the following matters:
(a)interpretation of cl 8 of the Deed (as set out in paragraph 9 of the claim);
(b)enforceability of the Deed in light of the fact that the plaintiffs have:
(i)misrepresented the technology’s function and application and therefore dispute whether the Deed is enforceable;
(ii)meetings were conducted between the second plaintiff, the sixth defendant and Mr Dimitropoulos after the execution of the Deed. That is after a time that the plaintiffs had no further rights as to the proportion and marketing of the technology.
(c)Mr Dimitropoulos’ commercial interest with the plaintiffs, his interest in Facility and Chief and to the representations by the plaintiffs and Adam Clark in relation to the technology.
In relation to the interpretation of cl 8 of the Deed, judgment was given upon that allegation by Justice Kaye. There is no need for further evidence in that regard.
In relation to the enforceability of the Deed, the evidence before the Court is that Mr Dimitropoulos did not draft the Deed. Mr Dimitropoulos deposes to the fact that the Deed was drawn by solicitors acting on behalf of the first defendant (of which the fourth defendant was at that time a director), the second defendant and the third defendant. Mr Dimitropoulos goes further and says that it is his belief and recollection that there was input into the drawing of the Deed by the fourth defendant who is a solicitor. The plaintiffs submit therefore that any evidence in relation to the Deed and representations made in relation to the Deed are not matters upon which Mr Dimitropoulos will be able to give evidence. The plaintiffs submit that while Mr Dimitropoulos may have executed the Deed under a Power of Attorney on behalf of the plaintiffs that is as far as his material participation went in relation to the Deed itself.
There is no suggestion by the defendants that Mr Dimitropoulos himself made representations either prior to the Deed being executed or after the Deed was executed. It is not suggested that Mr Dimitropoulos was even a conduit for any information passed from the plaintiffs and/or the sixth defendant to the second and fourth defendants.
On the evidence before me it is difficult to identify a particular material issue which Mr Dimitropoulos may give evidence. The defendants have failed to identify a proper factual basis to require a finding that it is reasonably likely that Mr Dimitropoulos will be called. In any event, even if called I am not satisfied with the material before me that there is a potential conflict of interest between Mr Dimitropoulos’ duty to the Court and duty to the client and/or any conflict he may have at a personal level.
The defendants have failed to demonstrate that there is an issue and a reasonable basis for the Court to come to the conclusion that there is a reasonable apprehension that Mr Dimitropoulos is somehow going to breach his duty to the Court even if called to give evidence. Ultimately the plaintiffs’ counterclaim at this stage is nothing more than assertion. The evidence is yet to be tested. There is no allegation in the proposed counterclaim that Mr Dimitropoulos is somehow a key figure to the dispute.
Other matters
This is not a case of a former client seeking to restrain a solicitor from acting. The plaintiffs have chosen Mr Dimitropoulos to act for them and are entitled to have him act. The longstanding principle that the Court’s jurisdiction to restrain a legal practitioner from acting in proceedings is an exceptional one and discretionary and that it must be exercised with appropriate caution and due weight must be given to public interest and a litigant not being deprived of a legal practitioner of its choice without due or good cause.[33]
[33]Grimwade v Meagher and ors (1995) 1 VR 446 at 452; Geelong School Supplies Pty Ltd v Dean [206] FCA 1404 at 35 and 51.
In addition, in considering the factors in the exercise of the Court’s discretion it is appropriate to consider the cost, inconvenience or impracticality of requiring a legal practitioner to cease to act.[34] Mr Dimitropoulos deposes to the fact that he has deep and extensive knowledge of the facts and circumstances relevant to the subject‑matter of these proceedings and the claims by the plaintiffs against the defendants and has acted as solicitor on the record from the commencement of the proceedings in 2007.
[34]Geelong School Supplies Pty Ltd v Dean [206] FCA 1404 at 51; Kallinikos v Hunt [205] 64 NSWSC 561.
There has clearly been delay in the prosecution of this matter. It would appear that the delay has been occasioned by both parties at different times. However, it is clear that substantial costs and expenses would have been incurred to date for the purpose of prosecuting this matter and that the removal of Mr Dimitropoulos at this stage would cause significant prejudice to the plaintiffs.
Conclusion
In conclusion, I am not satisfied that a fair minded reasonably informed member of the public would conclude that the proper administration of justice requires that Mr Dimitropoulos should be removed 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 application has been brought very late in the proceeding. It is difficult to understand why such an application was not brought sooner. In the circumstances, I dismiss the defendants’ application to restrain Mr Dimitropoulos from acting on behalf of the plaintiffs.
I will hear the parties on costs and how the remainder of the defendants’ summons should be dealt with.
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