Bowen v Stott - [2004] WASC 94

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BOWEN -v- STOTT [2004] WASC 94

CORAM: HASLUCK J

HEARD: 7 MAY 2004

DELIVERED : 7 MAY 2004

FILE NO/S: CIV 2300 of 2000

BETWEEN: SHEENA COLE BOWEN
Plaintiff
AND
PAUL STOTT
Defendant

FILE NO/S :CIV 2301 of 2000

BETWEEN :SHEENA COLE BOWEN
Plaintiff
AND
LIN VAN COPPENHAGEN
Defendant

Catchwords:

Legal practitioners - Court's practice and procedure - Inherent power to control legal practitioners to protect administration of justice - Legal practitioners involved in settlement negotiations - Likelihood that the practitioners in question would be required to give evidence - Orders made restraining the legal practitioners from continuing to act in the proceedings

Legislation:

Nil

Result:

Application allowed

Category: B

Representation:

CIV 2300 of 2000

Counsel:

Plaintiff: Mr K C Staffa
Defendant: Mr P W van der Zanden

Solicitors:

Plaintiff: Staffa Lawyers
Defendant: Minter Ellison

CIV 2301 of 2000

Counsel:

Plaintiff: Mr K C Staffa
Defendant: Mr C S Gough

Solicitors:

Plaintiff: Staffa Lawyers
Defendant: Minter Ellison

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

Clay v Karlson & Anor [1997] 17 WAR 493
Grimwade v Meagher, Hegland, Morgan, Lidgett, Reid & Bellheath Pty Ltd [1995] 1 VR 446
Holborow v Macdonald Rudder [2002] WASC 265
Kooky Garments Ltd v Charlton [1994] 1 NZLR 587
Newman v Phillips Fox (a firm) (1999) 21 WAR 309
Williamson v Nilant [2002] WASC 225

Case(s) also cited:

Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307
Chapman v Rogers, Ex Parte Chapman [1984] 1 QdR 542
David Lee & Co (Lincoln) Ltd & Supasave Retail Ltd v Coward Chance (a firm) [1991] Ch 259
Davies v Clough (1837) 8 Sim 262; (1837) 59 ER 105
Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737
Freehauf Finance Pty Ltd v Feez Ruthning [1991] 1 QdR 558
Macquarie Bank Ltd v Myer [1994] VR 350
Miles v Hughes, unreported; SCt of WA; Library No 11 November 1998
Murray v Macquarie Bank Ltd (1991) 33 FCR 46
Oceanic Life Ltd v HIH Casualty & General Insurance Ltd [1999] NSWSC 292
Pittorino v Meynert [2001] WASC 245
Scallan v Scallan [2001] NSWSC 1078

HASLUCK J:

Introduction

Sheena Cole Bowen is the plaintiff in two discrete but related actions which arise out of an incident at her place of employment in mid 2000. Pursuant to a chamber summons 18 February 2004, the plaintiff brought on for hearing in each case an application that the defendants be restrained from engaging any solicitor associated with the law firm Minter Ellison from acting for the defendants and that Minter Ellison be removed from the record as solicitors for the defendants. An order was sought also that the defendants be restrained from engaging Anthony Joseph Power as counsel.
Alternatively, orders were sought that the affidavit of Anthony Joseph Power sworn 10 November 2003 and the affidavit of Craig Stuart Gough sworn 19 November 2003 be removed from the court file and the defendants be restrained from relying upon such affidavits in support of their applications for leave to amend their statements of defence and for summary judgment. Mr Gough is a solicitor associated with Minter Ellison.
I note in passing that I was required to deal only with the two applications for restraining orders. The ruling in regard to those applications was likely to have an effect upon the defendants' applications for leave to amend and for summary judgment. However, those applications were left to be determined at a later stage. I recognised that the approach of the parties to the applications in question might be affected by the ruling made in respect of the plaintiff's application to restrain.
Let me now turn to the background to the matters in issue.

Background

The pleadings in Bowen v Stott, being CIV 2300 of 2000, reveal that as at July 2000 the plaintiff was employed in an administrative or secretarial role at Jardine Life Consultants Pty Ltd described in the pleadings as JLC. Her superiors included Lin Van Coppenhagan and Paul Stott.
On 7 July 2000 the plaintiff tendered her resignation to JLC and as a consequence was required to complete an exit interview form. It seems that the contents of that form led to Mr Van Coppenhagan publishing a letter to JLC and to the defendant dated 4 August 2000 in which certain observations were made about the plaintiff's performance as an employee. The plaintiff took exception to these observations. On or about 4 August 2000, Mr Stott published to JLC a letter concerning the plaintiff which was thought to be objectionable also.
In due course the plaintiff commenced proceedings against Mr Van Coppenhagan and Mr Stott alleging that she had been defamed by the letters in question and sought relief by way of damages. She alleged that the statements complained of were made maliciously.
Mr Stott denied liability on various grounds, including the plea that the publication was made on an occasion of qualified privilege. The pleadings in the related action of Bowen v Coppenhagan, being CIV 2301 of 2000, raise issues of the same kind.

Events before the trial date

The two actions were eventually listed for trial for three days commencing 28 January 2003. It was common ground at the hearing before me that prior to the commencement of the trial, discussions took place between the legal representatives of the various parties with a view to settling the action.
At that time the solicitor on the record for the plaintiff in each case was Mr Kevin Staffa and counsel briefed by Mr Staffa to represent the plaintiff at trial was Mr Bates. The solicitors on the record for the defendants in each case were Minter Ellison. It seems that Mr Gough was the solicitor at Minter Ellison having the conduct of the matter. Minter Ellison had briefed Mr Power to appear at the trial as counsel for the defendants.
I understand that the settlement negotiations were conducted essentially by Mr Power and by Mr Bates with the plaintiff being in attendance at the relevant premises, albeit not directly involved in the discussions that took place between Mr Power and Mr Bates. However, it appears that, during the course of the negotiations, Mr Bates acted on instructions obtained from the plaintiff directly.
I will come to the details of these negotiations in a moment when I turn to certain affidavits. However, first, it will be useful to complete my summary of the background to the present dispute.
It appears from the application for leave to amend that the defendants now contend that as a consequence of the negotiations the plaintiff's claims were compromised with the result that the relevant causes of action have been discharged.
The minute of proposed pleading asserts that in a meeting at Francis Burt Chambers on 23 January 2003 between Mr Power and Mr Bates, the latter offered to compromise the actions on the basis that the plaintiff be paid $5000 as a contribution towards her legal costs in the action, the defendant in each action provide the plaintiff with a written apology, the documents about which the plaintiff complained in the actions be held by an independent person for seven years and only be accessed with notice to the plaintiff or, alternatively, they be destroyed and the defendant in each case undertake not to make any publication of the documents.
The minute asserts that this offer was accepted subject to the plaintiff agreeing to sign a deed of settlement. It is said that at a further meeting between Mr Power and Mr Bates on or about 23 January 2003, Mr Bates handed to Mr Power a document which arguably reflected the tenor of the discussions to that point. He allegedly said words to the effect that the plaintiff would compromise the actions on the basis outlined in that document and would execute the proposed deed of settlement.

Events after the trial date

The trial did not proceed. There were then various exchanges between the parties and their legal representatives. However, in the event, it seems that the arrangements that had been under discussion were not carried into effect and a deed of settlement was not executed.
The principal area of disagreement concerned the form of the apologies. This led eventually to Mr Staffa seeking to have the matter relisted for trial upon the basis that no concluded settlement had been effected. The stance adopted by the defendants, as indicated by their applications for leave to amend and summary judgment, was that the plaintiff in each case was bound by a settlement agreement.
Mr Power and Mr Gough have now filed affidavits in support of the applications for leave to amend and summary judgment. The affidavits in question are those I mentioned earlier, being the affidavit of Anthony Joseph Power sworn 10 November 2003 and the affidavit of Craig Stuart Gough sworn 19 November 2003.
There is also a further affidavit of Craig Stuart Gough sworn 9 January 2004 which details matters bearing upon the progress of the settlement negotiations. It is clear that the defendants intend to rely upon that affidavit also. It is equally clear that Mr Staffa on behalf of the plaintiff is opposed to any use being made of this further affidavit, albeit that there is no specific mention of the affidavit in question in his application. However, for the reasons that were put before me at this hearing, I propose to proceed upon the basis that Mr Staffa on behalf of the plaintiff is seeking to exclude all three affidavits relied upon by the defendants.
I note in passing that there was no affidavit filed by either of the defendants to the effect that instructions were given by them that led to a settlement of the kind outlined in the minute of proposed amendment to the defence. The defendants rely entirely upon the affidavits of their legal advisers in seeking to substantiate the alleged settlement.
On the plaintiff's side, an affidavit was filed on behalf of the plaintiff in which she referred to a difference of opinion as to the form of the apologies and asserted that a settlement was not effected.

The affidavits

It emerges from what I have said so far that the plaintiff's stance is that the parties did not reach a concluded agreement. If leave to amend is allowed, there will obviously be an issue as to what was the authority of counsel to act in each case on behalf of their respective clients, as a matter bearing upon the question of whether a concluded agreement was arrived at. If the amendment be allowed and the matter proceeds to trial, it will be almost inevitable that the various deponents will be cross-examined about the course of the negotiations. Matters of that kind are mentioned in their affidavits
It is clear to me from the affidavit of the plaintiff that, if the proposed amendments to the statements of defence are allowed, she will assert that there was no agreement as to the form of the apology. She challenges that aspect of the so called settlement. It therefore becomes necessary to look at the matters in issue and the contentious affidavits in greater detail.
Let me commence with the affidavit of Craig Stuart Gough of 9 January 2004. That affidavit is not the first in time but it contains a form of narrative which touches upon events occurring prior to 23 January 2003. Mr Gough begins by saying that on 17 January 2003 he received an email from Mr Bates, the plaintiff's then counsel, in which Mr Bates refers to his forthcoming movements and his availability for pre‑trial talks. Mr Gough says that he responded to the email. He goes on to say that on 21 January 2003 Minter Ellison received a fax from the plaintiff's solicitor Kevin Staffa.
The relevant letter is exhibited to the Gough affidavit. I regard it as being of some importance in this matter. Mr Staffa says in the subject letter that he is conscious that there is some movement towards a meeting to be arranged at a convenient time at which there will be some discussion concerning settlement.
Mr Staffa says to Mr Gough in par 3 of the letter that the terms of an apology must expressly address, retract and apologise for the statements complained of. Nothing short of that would constitute an apology. In Mrs Cole Bowen's view the apology, which had apparently been offered by Mr Van Coppenhagan, did not satisfy these requirements. Thus, two days before the crucial meetings between counsel, the faxed letter foreshadowed that the form of an apology was a matter of importance, to Mr Staffa and to his client.
Mr Gough in his affidavit of 9 January 2004 continues the narrative by saying that the trial of the matter was listed for 28, 29 and 30 January. He recalls that a short time prior to the trial he had a discussion with Mr Bates close to courts 10 and 11 at the Supreme Court, following a court hearing. Mr Gough says that during the discussion Mr Bates and he discussed the possibility of a settlement.
Part of the conversation centred around Mr Staffa's requirement that any apology needed to contain an admission of guilt and a retraction. Mr Gough asserts that he said words to Mr Bates to the effect that his clients would not sign any apology in the terms of those drafted by Mr Staffa, although his clients were likely to sign an apology that apologised to the plaintiff for any hurt that may have been caused to her.
Mr Gough was unable to recall whether Mr Bates said that he had already discussed this matter with the plaintiff, or would discuss it with the plaintiff, but he had a recollection that Mr Bates said that he had or would put the terms of the apology to the plaintiff on the basis that it would be a statement of regret. Mr Gough goes on to exhibit to his affidavit further exchanges between the parties which then occurred, by email and otherwise, which set the scene for the crucial events of 23 January 2003. For present purposes, it is not necessary to traverse the full particularity of those exchanges.
I turn now to the affidavit of Mr Gough of 19 November 2003. In that affidavit, Mr Gough refers to the application for leave to amend and for summary judgment. He says that the basis for seeking leave to amend the statement of defence and applying for summary judgment is that the defendant in each case alleges that the parties to these proceedings have compromised the action. There has been an accord and satisfaction by which the plaintiff's cause of action has been discharged. He goes on to say that Mr Power was previously briefed by the defendants to appear at trial, but a view had been arrived at that Mr Power cannot continue to act as counsel because of a conflict of interest, that is, he may be required as a witness at trial.
In his affidavit sworn 10 November 2003, Mr Power provides some evidence bearing upon the matters in issue. He says that in late December 2002 he was briefed by Mr Gough of Minter Ellison to appear on behalf of the defendants. In each of the actions Sheena Cole Bowen was the plaintiff. He understood the trial was listed for hearing on 28, 29 and 30 January. He goes on to say that on 23 January 2003 he had a number of discussions with Mr Bates as counsel for the plaintiff
Mr Power asserts that during the discussions Mr Bates said that he had met with the plaintiff and had received instructions to compromise the actions along the lines reflected in the defendants' minute of proposed amendment. He says further that following his meeting with Mr Bates he telephoned Mr Craig Gough at Minter Ellison and advised him of his discussion with Mr Bates. Shortly after the conversation, Mr Gough rang to say that Mr Power had instructions to compromise the actions on behalf of the defendants on the terms discussed with Mr Bates, save and except that it was to be a condition of settlement that the parties enter into an appropriate deed. This was to contain a bar to the parties bringing any further proceedings that in any way pertained to the issues the subject of the actions.
Following the receipt of these instructions, Mr Power went and saw Mr Bates who had chambers also at Francis Burt Chambers on the same floor as Mr Power. Mr Power advised Mr Bates that the actions could be compromised on the basis previously discussed and subject to the execution of an appropriate deed containing a bar to further proceedings.
Mr Power goes on to say in his affidavit that he did not precisely recall when, but at some time on or about 23 January 2003, Mr Bates handed him a copy of what appeared to be written instructions to him from the plaintiff which had been signed and dated on that day. He advised that the plaintiff was prepared to compromise the actions on this basis and would execute the deed.
I pause here to say that the document in question is exhibited to the Power affidavit. The document is signed by the plaintiff and sets out some propositions which are generally consistent with the terms of the settlement discussions mentioned earlier.
Mr Power says that he immediately communicated with Mr Gough by telephone and was instructed by Mr Gough to advise Mr Bates that the actions were compromised on the proposed basis. Mr Power advised Mr Bates accordingly shortly thereafter on the same day.
Before leaving the letter signed by the plaintiff, being a letter dated 23 January 2003 on the letterhead of Mr Bates, it will be useful to draw attention to certain features of it. Principal amongst those features is the proposition in par 1 that one of the terms of the proposed settlement is "receipt of apologies from Van Coppenhagan and Stott". That statement does not make clear exactly what the nature of the apologies were to be.
As I indicated in earlier discussion, it seems, that the plaintiff and her adviser, Mr Staffa, were of the view that the form of apology proffered by the defendants, supposedly in discharge of the arrangements made in the course of the settlement negotiations, was not sufficient. This was allegedly because the apology did not include a retraction of the kind that had been foreshadowed by Mr Staffa in the faxed letter dated 21 January 2003.
The affidavit of the plaintiff sworn November 2003 contains her account of the various events I have described, although one has to make allowance for the fact that she was not directly involved in the relevant discussions. I will not traverse the entirety of her affidavit save to note that in par 4(c) she says that she was not informed by Peter Bates that the apologies would be in another form to that which had been proposed by Mr Staffa. She said that Mr Bates did not discuss the form or content of the apologies with her.
The plaintiff's affidavit also contains various exchanges by way of email and otherwise bearing upon the proposed deed and the form of the apologies. The exchanges reveal that eventually there was a breakdown in the relationship between the parties as it became apparent that the defendants were insisting upon a form of apology which was limited to the expression of a degree of regret for any sense of hurt experienced by the plaintiff. Mr Staffa, on behalf of his client, continued to press for an apology which was directed to the words complained of and which amounted, in effect, to a retraction. There was also some discussion about the form of the deed.

The issues

If the pleadings are amended as proposed and the matter proceeds to trial, there will be an evidentiary issue as to whether a settlement was effected, and it seems likely that evidence will be required from Mr Gough and Mr Power in regard to that issue.
Likewise, if the application for summary judgment is progressed as a consequence of the leave to amend being allowed, and further affidavits are filed, there will be an opportunity for the deponents to be cross examined upon their affidavits.
It seems to me that whether at trial, or whether by way of cross examination upon affidavits, it will be almost inevitable that Mr Power and Mr Gough are challenged about the events on the days in question and as to whether a concluded agreement was reached. There will be a contentious issue as to whether agreement was reached as to the form of the apology. Matters of this kind will undoubtedly bring into issue the authority or ostensible authority of counsel to speak on behalf of a client. Nonetheless, it will be necessary to determine exactly what was said and done.

This brings me conveniently now to the principles which bear upon the applications for restraining orders.

Legal principles

Counsel for the plaintiff submitted that there are three recognised grounds for restraining solicitors acting for parties: first, such restraining orders can be made to ensure the protection of confidential information of a former client that is in the possession of the solicitor where that information is or might be relevant to a matter on which that solicitor is instructed by a later client.
Second, the Court may intervene in cases in which the solicitor is in possession of a client's confidential information and is subsequently employed or becomes a partner in a second firm which is acting in proceedings against the solicitor's former client, in circumstances in which that information is or might be relevant to the conduct of those proceedings against the former client and there is a risk that the information will be disclosed to those having the conduct of the proceedings against the former client.
Third, the Court may intervene where restraining the solicitor is in the interests of the Court exercising proper control over the conduct of an officer of the Court.
Counsel submitted on behalf of the plaintiff that the first two grounds were not relied upon in the present case and clearly did not apply to the application. The orders sought were based on the third precept.
There are various decided cases bearing upon the rule in question.
In Clay v Karlson & Anor [1997] 17 WAR 493 Templeman J recognised that the Court has jurisdiction to direct solicitors to cease acting and to take steps to remove themselves from the record within an appropriate time.
In Williamson v Nilant [2002] WASC 225 McKechnie J said that it was well settled that the Court's inherent jurisdiction to preserve the proper administration of justice extends to restraining a legal practitioner from acting in a particular case. The objective test to be applied in the context of such a case is whether a fair minded, reasonably informed member of the public would conclude that the proper administration of justice required that counsel be so prevented from acting, but at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause.
The relevant principles are affirmed and given further expression in Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 and also in a decision of Steytler J in this Court in Newman v Phillips Fox (a firm) (1999) 21 WAR 309. It emerges from the latter case, that the rationale for intervention upon the third ground is a recognition that the integrity of the legal process and of the Court function might be undermined if it were thought that solicitors or counsel did not possess the objectivity and independence which their professional responsibilities and obligations to the Court require of them.
The most obvious case in that regard would be a situation in which a solicitor had some direct pecuniary interest in the outcome. It might seem to an independent observer that a solicitor, notwithstanding his best efforts to be impartial and objective, might adjust his evidence in some way to procure a result that suited his interest. The decided cases suggest also that the same principles apply in circumstances where a solicitor might feel impelled to justify or defend his conduct in representing a client, notwithstanding that the solicitor did not have any specific pecuniary interest in the outcome other than the obtaining of his professional fees.
I feel obliged to say, as I review these principles, that it will be useful also to refer to the submissions of the defendants in the present case. It appears from their submissions dated 23 April 2004 that the defendants do not dispute the Court's inherent jurisdiction to preserve the proper administration of justice. They recognise that there is power to restrain a legal practitioner from acting in a particular case. It is said, however, having regard to Seaman Civil Procedure at par 34.0.5, that the exercise of the power to restrain must be regarded as exceptional.
It is said in par 12 of the defendants' submissions, being a passage which echoes the reasoning in the cases I have mentioned, that it is generally undesirable for a practitioner who is aware that he is likely to be called as a witness in proceedings, other than in relation to formal or non‑contentious issues, to continue to represent his client in those proceedings.
The defendants go on to submit that, if an opposing party asserts that a legal practitioner should be restrained from acting for his opponent, it is necessary for a clear case to be made that the practitioner concerned is in a position where he is fixed with an interest which conflicts with his duty to the Court and that interest is one of such a nature that the solicitor or client may fail in his overriding duty to the Court.
The decided cases suggest that if a practitioner's credibility is at stake as a witness, the practitioner's personal integrity may be put in issue and that may constitute a personal interest, inconsistent with the practitioner's duty to the Court or to the client. See Holborow v Macdonald Rudder [2002] WASC 265.
It appears from the defendants' submissions also that the cost, inconvenience or even the impracticality of a firm ceasing to act may provide a reason for refusing to grant relief. At all times due weight should be given to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause. Grimwade v Meagher, Hegland, Morgan, Lidgett, Reid & Bellheath Pty Ltd [1995] 1 VR 446.

The respective contentions

Against the background of these principles, counsel for the defendants submitted that many of the cases which might be thought to justify the intervention of the court were not truly applicable to the present case. He submitted that in the present case the evidence of Mr Power and Mr Gough is uncontroverted. The only relevant matter in dispute is whether, on the facts before the court, an enforceable compromise was reached. There is no dispute on the evidence as to what took place.
Counsel went on to submit that Mr Gough and Mr Power are witnesses with respect to non‑contentious issues and as such no basis for an injunction arises. In any event, the proceedings are so advanced, counsel argued, that the involvement of Minter Ellison and Mr Power cannot reasonably be avoided and the relief sought by the plaintiff should not be granted.
Counsel for the plaintiff contended that the defendants' view of the matter was not persuasive and should not be accepted. On his submission, Mr Gough and Mr Power, as indicated by the affidavits I have described, were bound to finish up giving evidence in respect of contentious matters. There was a challenge to the proposition that a concluded agreement was arrived at. In particular, there was a dispute about the form of the apology. Mr Staffa emphasised strongly that the defendants were not privy to or directly involved in the negotiations in person and thus, essentially, the evidence on the defendants' side as to what was said and done will depend upon the evidence given by Mr Power and by Mr Gough.
Counsel said further that those practitioners have a conflict in the sense that it might strike an independent observer that they are necessarily compelled to present their evidence in a light which would assert that a settlement was arrived at. It might strike an independent observer that, in dealing with questions put to them in cross examination, the evidence of the defendants' legal advisers was affected by their understandable desire to ensure that the settlement they say was negotiated is upheld, otherwise the events of 23 January might be thought to bear upon their competence.

Findings

I give weight to the consideration emphasised in the defendants' submissions that there will be financial and other consequences if the parties to these proceedings have to obtain assistance from other legal advisers at this advanced stage of the proceedings.
However, notwithstanding the consideration I have just mentioned, in the end, I am of the view that restraining orders of the kind applied for should be made. It seems to me that in the circumstances I have described this case falls within the third basis for intervention I have described.
I accede to the line of argument put to me by counsel for the plaintiff that there is an objective test to be applied. The circumstances might suggest to a fair minded, reasonably informed member of the public that, if evidence is given of the kind which is likely to be given by the legal practitioners involved in the negotiations, a conflict of interest will arise which might interfere with the proper administration of justice. The practitioners might not be able to conduct themselves with proper objectivity. For that reason, I consider that the principles I have described should be applied as a basis for making the orders sought.

Summary

I will make restraining orders of the kind applied for; that is, there will be orders in terms of par 2 and 3 of the chamber summons. I will hear from the parties as to whether any further orders or directions are required.