BERYL and BERYL

[2020] FCWA 116

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: BERYL and BERYL [2020] FCWA 116

CORAM: SUTHERLAND CJ

HEARD: 29 JUNE 2020

DELIVERED : 8 JULY 2020

FILE NO/S: PTW 4145 of 2019

BETWEEN: MR BERYL

Applicant

AND

MRS BERYL

Respondent

Catchwords:

FAMILY LAW - LEGAL PRACTITIONERS - Where the applicant seeks an order that the respondent's solicitors be restrained from acting for her - Whether solicitor who has previously chaired a mediation between the parties was in possession of confidential information that is or may be relevant to the matter before the Court - Inherent jurisdiction of the Court over its officers and to control its processes - Application dismissed - Case turns on its own facts

Legislation:

Family Law Act 1975 (Cth)
Legal Profession Act 2008 (WA)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Mr Berry SC
Respondent	:	Mr Penglis SC & Ms Nadilo

Solicitors:

Applicant	:	Law Firm 1
Respondent	:	Law Firm 2

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

Billington & Billington (No 2) [2008] FamCA 409

Kallinicos v Hunt (2005) 64 NSWLR 561

Mancini v Mancini [1999] NSWSC 800

McMillan and McMillan (2000) FLC 93-048

Osferatu & Osferatu (2015) FLC 93-666

Prince Jefri Bolkiah v KPMG (A Firm) [1992] 2 AC 222

Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWCA 354

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Beryl & Beryl has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

SUTHERLAND CJ:

Introduction

1[Mr Beryl] (the “husband”) and [Mrs Beryl] (the “wife”) are involved in parenting and financial proceedings in this Court. On 2 June 2020, the husband applied[1] for an injunction restraining the wife’s lawyers, [Law Firm 2], from further acting for her in the proceedings. The wife opposes[2] that application. The application arises in what can only be described as very unusual circumstances.

What are the relevant background facts?

[1] Husband’s Form 2 application in a case filed 2 June 2020, supported by the husband’s affidavit filed 28 May 2020.

[2] Wife’s Form 2A response filed 10 June 2020; supported by the wife’s affidavit filed on 10 June 2020, the affidavit of X filed on 10 June 2020, the affidavit of Y filed on 10 June 2020, and the affidavit of X filed on 26 June 2020.

2The husband commenced family law proceedings in June 2019. He has at all times been represented by [Law Firm 1].

3In September 2019, the wife instructed [Z] of Law Firm 2 to act on her behalf in relation to the family law proceedings, family violence restraining order proceedings and a child support dispute. By that stage, the wife had already been represented by two other family law firms.

4At the time [they] commenced acting for the wife, Z was the sole Legal Practitioner Director of Law Firm 2. Pursuant to s 105(2) and (3) of the Legal Profession Act 2008 (WA), Z was accordingly “responsible for the management of the legal services” provided by Law Firm 2 and “must ensure that appropriate management systems are implemented and maintained to enable the provision of legal services” by Law Firm 2.

5On 11 October 2019 the wife, through her solicitor, proposed that the parties attend mediation in relation to parenting issues with [Y], a lawyer and mediator, “given [their] experiences as independent children’s lawyer and FDR practitioner”. The husband agreed and mediation was arranged to take place in December 2019.[3]

[3] Husband’s affidavit, [6] – [9].

6Prior to the mediation taking place, each of the husband and the wife signed a mediation agreement (“the Agreement”) provided to them by Y.[4] The terms of the Agreement signed by the husband and the wife were identical, and I set same out in full below:

[4] Affidavit of X filed 25 June 2020: annexures A & B.

Dispute Resolution Mediation

Mediation Agreement

This is a mediation to assist people to reach an agreement about a matter that they have not yet been able to resolve.

1.I will do my best to use this mediation as a genuine attempt to reach agreement.

2.I understand it is very important that we all feel we can talk freely in this mediation. As a result of this, I agree that:

a)What is said at this mediation will always be private and confidential.

b)I will not disclose to anyone, anything said or done during the mediation, or any information that I receive during the mediation except:

·any party may discuss the contents of any agreement reached or proposal made at the mediation with any person who is likely to be directly affected by that agreement or proposal if it takes effect; and

·information may be disclosed which all parties agree may be disclosed; and

·the written record of any agreement reached at the mediation may be disclosed for the purpose of having orders made in accordance with that agreement.

c)Evidence of anything said or done in the mediation cannot be given in any legal or other proceedings at any time.

3.I agree that when I use the words “anything said or done” and “information that I receive” I am including:

a)anything said or done whilst anyone at the mediation is talking about the dispute;

b)the willingness of anyone at the mediation to consider any settlement proposal; or

c)any information prepared for the mediation.

4.I will not seek to require the mediator [Y] (“the mediator”) or anyone employed by [Y’s law firm] to give evidence in any legal proceedings of anything whatsoever concerning this dispute.

5.I understand that in some situations the mediator may be required or authorised to disclose things said or done, or information received, during the mediation. Some of the reasons are:

a)to protect the life or health of any person or to protect property;

b)where each of the parties agree that it should happen;

c)where the party from whom the information was received agrees to its disclosure;

d)that it relates to some illegal act or to improper conduct by a lawyer or other professional person; or

e)to obey a court order of (sic) other law.

7There was no evidence before the court that Y also signed the Agreement. However, the parties proceeded on the basis that that each of the husband and the wife expressly agreed to the contractual obligations of confidence in respect of the mediation, as set out in the Agreement. The wife asserted and the husband did not dispute[5] that Y was also bound by obligations of confidence with respect to the mediation, certainly in equity and also probably in contract.[6]

[5] Indeed, the husband’s case relied on the assertion that Y owed obligations of confidence to the husband.

[6] Although neither counsel for the husband nor the wife addressed the issue at all in their respective submissions, Y, as a family dispute resolution practitioner, may in the context of the mediation that took place between the parties, also be subject to the confidentiality requirements of s 10H of the Family Law Act 1975 (Cth).

8The mediation took place on 9 December 2019 at Law Firm B’s office.

9The husband’s evidence in relation to the mediation was as follows:

9.I attended the mediation, together with my solicitor [W]. [Mrs Beryl] was present, together with her solicitors [Z] and [T].

10.The mediation was chaired by [Y]. [Y] conducted the mediation in joint conferences, by shuttle and in breakout sessions.

11.During the mediation, we discussed:

11.1 parenting matters;

11.2the family violence restraining orders, which were then in existence.

[Mrs Beryl] and I reached agreement in respect of parenting arrangements for our children, upon our relocation to Perth and signed a minute of consent orders at mediation (the Minute).[7]

[7] Husband’s affidavit filed 28 May 2020.

10In addition, the husband also gave evidence that the parties reached agreement at the mediation that: (1) the wife would discharge the interim family violence restraining order against the husband; and (2) the parties would attend a further mediation session in 2020. Orders in the terms of the consent Minute were subsequently made by me on 10 December 2019.

11The husband also gave evidence about the personal connection between Y and […] X, who is a solicitor employed at Law Firm 2, as follows:

35.[Y]’s relationship with [X] was not disclosed to me or [Law Firm 1] when [Law Firm 2] proposed that [Y] be appointed as mediator.

36.Had the relationship been disclosed, I would objected to [Y’s] appointment, as I would have been concerned about [Y’s] independence.

37.My solicitor was informed [of the personal connection between X and Y] on the day of the mediation, when they were introduced at [Law Firm 2’s] office…[8]

[8] Husband’s affidavit filed 28 May 2020.

12There was no suggestion that at the time of the mediation, X had any involvement with the [Beryl] matter. There was also no evidence to suggest that the husband took any objection to the mediation proceeding with Y either on the day or subsequently in light of the knowledge of the personal connection. On the contrary, on 24 January 2020, the husband’s solicitors wrote to Law Firm 2 proposing that a further mediation session with Y be held in April 2020. Accordingly, I am not satisfied that at the relevant times the husband had any real concerns about the personal relationship between Y and X.

13[Due to personal circumstances, Z took a leave of absence from Law Firm 2 commencing on 18 May 2020 for a period of three months]. Although the specific details were not in evidence, it was clear that at some stage prior to 18 May 2020, arrangements were made for Y to be appointed as the sole Legal Practitioner Director of Law Firm 2 for the period of Z’s [absence].

14Also in February 2020, X commenced assisting on the wife’s file, on the basis that X would have the usual conduct of the file during the period of Z’s [absence].[9]

[9] Although he referred to the matter in his affidavit, the husband did not raise any specific objection to X assisting on the wife’s file, or maintain it was a basis for seeking that Law Firm 2 be restrained from continuing to act for the wife.

15On 9 April 2020, Law Firm 1 wrote to Law Firm 2 enquiring as to what arrangements would be put in place for the management of the wife’s file during Z’s [absence]. Z responded by email the same day as follows:

[Redacted]. My client is satisfied with [the arrangements during my absence] and there won’t be any increase in cost as a result of it, however, I do not think the balance is something we need to go through.

16At the interim hearing, the wife’s counsel appropriately conceded that Z’s email response to Law Firm 1 was not helpful. The husband’s counsel also appropriately conceded that there was no suggestion that Z had attempted to deliberately mislead the husband as to the arrangements for Y to be the sole Legal Practitioner Director of Law Firm 2 during the period of his [absence]. Rather it effectively appeared that Z had simply not turned [their] mind to the issue.

17Y commenced at Law Firm 2 on 4 May 2020. On that date, Y directed that they be restricted from being able to access the electronic file in relation to the Beryl matter, and this occurred on the same day.[10] Y seemingly took this action as a matter of course, and not in response to any complaint by the husband.

[10] Affidavit of X filed 10 June 2020, [4(a)].

18Law Firm 1 subsequently made enquiries directly with the Legal Practice Board, and on 19 May 2020 were informed by the Board that Y had taken over as the sole Legal Practitioner Director of Law Firm 2 for the period of Z’s [absence].

19On 20 May 2020, Law Firm 1 wrote to Law Firm 2 raising concerns about the appointment of Y and sought that:

… as [Y] was the mediator between our respective clients, there is clearly a conflict if your firm continues to act. If you have a contrary view, then we invite you to put it.

Considering the ongoing dispute which has upcoming Court dates and you are representing your client in proceedings relating to a restraining order that has a Hearing in early June, please confirm within seven days that you will cease acting, failing which we will make an urgent Application to the Family Court and you should treat this email as conferral.

20On 21 May 2020 X, on behalf of Law Firm 2, wrote to Law Firm A in response. The letter stated:[11]

You are indeed correct that [Y] is Legal Practitioner Director (“LPD”) of [Law Firm 2] for a limited period expected to conclude in mid-August 2020, upon our [Z’s] return.

I thank you for bringing it to my attention that we have not formally notified you and your client of this issue. I have reviewed the file and can see no written confirmation was sent which I accept should have been done earlier.

However, we do not agree that the conflict issue you have identified requires us ceasing to represent [Mrs Beryl].

In particular, [Y’s] role in this matter was limited in scope to a Mediator for chairing a mediation in December 2019, not as a lawyer for either of the parties. [Y] has professional obligations as a mediator; quite aside from [their] professional obligations as LPD, to not disclose confidential information obtained during the course of a Mediation Conference. [Y’s] role as LPD of this firm does not alter or undermine [their] previous obligations and the confidentiality of the mediation as set out in the mediation agreement.

In addition, [Y’s] personal connection to this Firm and the writer was disclosed prior to [Y’s] appointment as a mediator for this matter, and no objection was taken at that time, or indeed when the writer commenced working on this file.

[Y] is not involved in representing [Mrs Beryl] and in any event [Y’s] access to the electronic file in this matter was restricted in advance of receiving your letter.

[11] Husband’s affidavit filed 28 May 2020 at [23]

21The letter went on to state:[12]

Notwithstanding the fact that there has been no previous suggestion of any risk that [Y] may disclose any confidential information that [they] may have arising from the Mediation, and that [Y] is not involved in this matter in any way aside from any administrative requirements as part of [Y’s] role as LPD (which will not require [Y’s] access to the substantive files) I have arranged for [Y] to sign the enclosed Undertaking to address any concerns as to any potential or perceived conflict of interest that your client may hold.

In our view, there is no conflict of interest at present nor is there any risk of there being such a conflict, given the circumstances and the actions taken subsequently, and the Undertaking now provided.

The Undertaking is provided as is. It is up to your client as to what he wishes to do with the document. It will not be sought to be filed by us.

In the circumstances, we intend to continue taking instructions from and representing [Mrs Beryl].

[12] Wife’s affidavit filed 10 June 2020 at [13(l)].

22On 21 May 2020, Y provided a written undertaking to Law Firm 1 in the following terms:

I, [Y], c/- [Law Firm 2] in the state of Western Australia, undertake that I will not, during the period of time that I am the Legal Practitioner Director of [Law Firm 2], disclose any information concerning [Mr Beryl or Mrs Beryl] or his or her legal proceedings, that I may possess to any employee or Director of [Law Firm 2].

In this regard, subject to my legal, financial and ethical obligations as the Legal Practitioner Director of [Law Firm 2], I undertake to:

1.not have any involvement with any employee or Director of [Law Firm 2] concerning these proceedings, and which is relevant to [Mr Beryl or Mrs Beryl]; or

2.immediately, upon becoming aware of any breach, or possible breach of this undertaking, report such breach to [Mr Beryl and Mrs Beryl] or their legal representatives.[13]

[13] Affidavit of Y filed on 10 June 2020, annexure A.

23At the interim hearing the husband’s counsel specifically referred to the qualification contained in the Undertaking: that it was subject to Y’s “legal, financial and ethical obligations as the Legal Practitioner Director of [Law Firm 2]”. However, the husband’s counsel did not submit that Y’s obligations of confidentiality may conflict with Y’s obligations as the Legal Practitioner Director: for example, pursuant to sections 105 and 106 in the Legal Profession Act 2008 (WA); and there was no evidence to suggest otherwise. In this regard, I accept the submission made on behalf of the wife that Y’s obligations as Legal Practitioner Director are managerial in nature, and are capable of co-existing (without conflict) alongside the obligations of confidence owed by Y,[14] particularly in light of the waiver by the wife of any obligation on the part of Y to disclose confidential information, a matter to which I return later in these reasons.

[14] During the interim hearing, I asked the wife’s counsel (by way of posing a hypothetical) what would happen if X were to approach Y on the basis [that X] felt no longer felt able to competently discharge [X’s] duties as solicitor with conduct of the file. Senior Counsel’s response, which I accept, is that the extent of Y’s obligation would be to ensure that proper steps were taken to assign conduct of the file to a different solicitor, and that Y could delegate the action required to fulfil that obligation to another member of the firm.

24In summary, Y’s undisputed evidence was that:

a)Y has not had any discussions with the wife or X or anyone else about what was said during the mediation since its conclusion and Y will not do so.

b)X has not discussed the conduct of the Beryl file with Y. The only discussions they have had in relation to the file were that: (1) a potential issue of conflict had been raised by the husband as a result of Y’s role in the mediation and whether Y would be agreeable to giving a written undertaking; (2) on what date did Y request that Y’s access to the file be restricted; and (3) whether Y would prepare and sign an affidavit in relation to the conflict issue.

c)Y has had no involvement in the conduct of the Beryl matter by Law Firm 2 to date and will not do so.

25In summary, X’s undisputed evidence was that:

a)X has not discussed the conduct of the Beryl file with Y and will not do so. The only discussions they have had in relation to the file were that: (1) a potential issue of conflict had been raised by the husband as a result of Y’s role in the mediation and whether Y would be agreeable to giving a written undertaking; (2) on what date did Y request that Y’s access to the file be restricted; and (3) whether Y would prepare and sign an affidavit in relation to the conflict issue.

b)X has not discussed with Y what was said by anyone or what took place at the mediation, and X will not do so.

26In summary, the wife’s undisputed evidence was that:

a)She has not spoken or corresponded with Y since the mediation, except to confirm payment of Y’s invoice.[15]

b)After obtaining independent legal advice from [a barrister], she waived any obligation on the part of Y as the Legal Practitioner Director of Law Firm 2 to disclose to her or anyone else information Y may have obtained arising from Y’s role in the mediation.[16]

c)Law Firm 2 is the third legal practice that she has instructed in relation to family law matters and she does not want yet another change in legal representation.[17]

d)There are some 4,400 discrete documents (excluding accounting and costs records) comprising her file, and she has incurred substantial costs in Law Firm 2 having to familiarise themselves with the file upon assuming conduct of the matter in September 2019, including in relation to the numerous business entities and structures that form part of the asset pool.[18] The wife has since spent $204,519.89 in legal fees.[19]

[15] Wife’s affidavit filed 10 June 2020, [9].

[16] Wife’s affidavit filed 10 June 2020, [10].

[17] Wife’s affidavit filed 10 June 2020, [11].

[18] Ibid.

[19] Wife’s affidavit filed 10 June 2020, [12]

27I accept that if Law Firm 2 were restrained from acting for the wife, then she would inevitably incur significant additional litigation costs in another solicitor having to familiarise himself/herself with the file.

Discussion and conclusions

28In Osferatu & Osferatu (2015) FLC 93-666 (“Osferatu”), the Full Court observed at [20] that:

[t]here 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] NSWSC 1181).

29The husband’s counsel indicated that the husband would be relying on only two of the three bases identified in Kallinicos v Hunt (2005) 64 NSWLR 561 (“Kallinicos”) in support of the injunction sought by him: (1) breach of confidence; and (2) the inherent jurisdiction of the court over its officers and to control its processes.

Breach of confidence

30In Osferatu, the Full Court provided guidance as to the matters that should be taken into account in determining whether a lawyer should be restrained by injunction from acting against a former client, as follows:

a) The former client has the burden of proving (by adducing cogent and persuasive evidence) that the lawyer against whom the injunction is sought is in possession of confidential information that is or may be relevant to the matter before the court.[20]

b) In discharging that burden, the former client need only give evidence that they have provided to the lawyer confidential information. It is not necessary for the former client to divulge the content of that information.[21] However, it is necessary for the former client to at least identify the confidential information that is said to be possessed by the lawyer in a sufficiently specific way to enable it to be identified.[22] For evidence of confidential information to be “persuasive and cogent [it] should [identify] the nature of the information received or likely to have been received and [how that information is] relevant to the current proceedings”.[23] As Bryson J observed in Mancini v Mancini [1999] NSWSC 800 at [7]:

Without doing that it is not possible to come to a conclusion on whether the information truly is confidential, to consider and appraise the circumstances in which it came into existence and was communicated, to come to any conclusion about whether protection is appropriate, or to make any enforceable order. A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.

(emphasis added).

c) Once the former client has discharged the evidentiary onus, then next step is to consider the risk that the confidential information will be disclosed.[24] In this regard, the risk must be a real risk of misuse as opposed to one which is merely fanciful.[25] The evidentiary burden is now on the lawyer (or their firm) “to show that there is no risk that the information will come into possession of those now acting” against the former client,[26] and “the court should restrain the firm from acting “unless satisfied on the basis of clear and convincing evidence that all [effective] measures have been taken to ensure that no disclosure will occur”.[27]

d) Finally, there must be 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 the 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.”[28] The nature and type of confidential information the lawyer is said to possess is important, as it informs the balancing exercise the court must undertake as between the right of the former client on the one hand to protect their confidences,[29] and the need to give appropriate weight to the public interest in a litigant not being deprived of their lawyer of choice, and the costs and inconvenience that will result if that litigant is required to engage new legal representation.[30]

[20] Osferatu & Osferatu (2015) FLC 93-666, [26].

[21] Osferatu & Osferatu (2015) FLC 93-666, [25] citing McMillan and McMillan (2000) FLC 93-048, [87].

[22] Osferatu & Osferatu (2015) FLC 93-666, [27] citing Mancini v Mancini [1999] NSWSC 800, [7].

[23] Osferatu & Osferatu (2015) FLC 93-666, [48].

[24] Osferatu & Osferatu (2015) FLC 93-666, [32].

[25] Osferatu & Osferatu (2015) FLC 93-666, [39].

[26] Prince Jefri Bolkiah v KPMG (A Firm) [1992] 2 AC 222, 237-238.

[27] Ibid.

[28] Osferatu & Osferatu (2015) FLC 93-666, [35].

[29] In Prince Jefri Bolkiah v KPMG (A Firm) [1992] 2 AC 222, Lord Millett said this (at 236) of the importance of the protection of confidences: “…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.”

[30] Osferatu & Osferatu (2015) FLC 93-666, [28] citing Billington & Billington (No 2) [2008] FamCA 409, [43].

31At the outset, I observe that the situation before me is different to the usual run of cases where a party seeks to restrain his/her former solicitor from acting in proceedings that are adverse to that party’s interests. In this case, Y’s relationship with the parties was that of chair of the mediation in which they participated. The parties were in dispute as to whether the husband was a “former client” of Y for the purposes of the Legal Profession Act 2008 (WA) and Part 4 of the Legal Profession Conduct Rules 2010 (WA).[31] However, even if the husband was a former client of Y, I am not satisfied that the husband has discharged the onus of proving (by adducing cogent and persuasive evidence) that Y is in possession of confidential information that is or may be relevant to the matters before the court. In this regard, the high point of the husband’s evidence was that: (1) during the mediation discussions were held in joint conferences, by shuttle and in breakout sessions about parenting matters and the family violence restraining orders which were then in existence; and (2) agreement was reached in relation to both issues. The husband did not give any evidence: (1) of the nature and type of information that was provided to Y during the mediation; or (2) that Y was privy to private discussions between him and his solicitor as to disputed parenting matters; or (3) that Y was privy to offers of settlement that were ultimately not accepted and remain in issue. Given the role of chair of a mediation is markedly different to that of a solicitor taking instructions from his/her client and providing legal advice to his/her client, I am also not satisfied that I can simply infer that Y would have received confidential information relevant to the disputed issues still before the court, in order to fill the lacuna in the husband’s evidence.

[31] And in particular, Rule 13(1).

32Even if I am wrong in this regard, and the husband has discharged the evidentiary burden on him, then I am satisfied that there is no real risk that any confidential information held by Y will come into possession of X or any other solicitor with the conduct of the Beryl file at Law Firm 2. This is because I am also satisfied that effective communication barriers have been established to protect any such confidential information. This includes: (1) the steps taken by Y immediately upon Y’s commencement at Law Firm 2 to restrict their access to the Beryl file; (2) the undisputed evidence of Y and X as set out in paragraphs 24 and 25 above, including their promises, as officers of the court and given on oath, not to discuss anything about the mediation or the conduct of the Beryl file; (3) Y’s Undertaking to the court; (4) the undisputed evidence of the wife that she has waived any obligation on the part of Y as the Legal Practitioner Director of Law Firm 2 to disclose to her or anyone else information Y may have obtained arising from Y’s role as chair of the parties’ mediation; and (5) and the temporary nature of Y’s position at Law Firm 2. Finally, the undoubted facts that the wife wishes to continue to instruct Law Firm 2, and is likely to incur significant additional costs in having to instruct another solicitor in the event that Law Firm 2 are restrained, weigh against the making of an injunction as sought by the husband, in circumstances where the husband’s evidence about any confidential information that Y may possess is so nebulous.

The Court’s inherent jurisdiction

33In Kallinicos, Brereton J discussed the principles applicable to the exercise of the court’s inherent jurisdiction in the following terms (at [76], fourth to seventh bullet points):

·[in addition to the jurisdiction founded on breach fiduciary duty or breach of confidence] 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 fair-minded, 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 omitted)

34I note the comments of Hodgson JA (with whom Spigelman CJ and Campbell JA agreed) in Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWCA 354 (at [48]) to the effect that his Honour doubted whether the inherent jurisdiction would be exercised in many cases, on the basis of confidential information, in circumstances where the court otherwise declined to grant an injunction for breach of confidence.[32] Put simply, his Honour doubted that the inherent jurisdiction should be invoked to have second bite at the proverbial cherry.

[32] Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWCA 354, [48].

35Even so and in the unusual circumstances of this case, I am not satisfied a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that Law Firm 2 should be restrained from continuing to act for the wife. Those circumstances include:

a)The unusual situation in which Y has been appointed as the sole Legal Practitioner Director of Law Firm 2 – that is, as a stop-gap measure during Z’s [absence]. Allied to that is: (1) the concession by the husband that there was no underhanded dealing by Z vis-à-vis Y’s appointment; and (2) the limited timeframe of Y’s appointment.

b)The confidentiality obligations owed by Y to the parties arising out of the mediation (whether contractual or equitable in nature), together with the further measures put in place by Y, Law Firm 2 and the wife as set out in paragraph 32 above, including but not limited to barring Y’s access to the Beryl file and Y having no involvement in the conduct of the file.

c)There being no suggestion of any conflict between the obligations owed by Y as the Legal Practitioner Director of Law Firm 2 (which are managerial in nature) and the obligations of confidence arising out of the mediation, particularly in light of the wavier granted by the wife.

d)The wife’s desire to continue to instruct Law Firm 2 and the significant additional litigation costs she will inevitably incur if she is required to instruct another law firm to act on her behalf.

ORDERS

36I intend to make the following orders:

1.The Form 2 Application of the husband filed 2 June 2020 and the Form 2A Response of the wife filed 10 June 2020 be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

KV
Associate

8 JULY 2020