Brock and Brock
[2009] FMCAfam 101
•6 February 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BROCK & BROCK | [2009] FMCAfam 101 |
| FAMILY LAW – Interim application – whether the Independent Children’s Lawyer should be discharged – alleged conflict of interest. |
| Family Law Act 1975 (Cth) ss.68L, 68LA |
| W & M & Anor (2006) FamCA 512 Lloyd (2000) FLC 93-045 T & L (2000) FLC 93-056 In the marriage of McMillan (2000) FamCA 1046 D & J Constructions Pty Ltd and Head (1987) 9 NSWLR 118 In the marriage of Thevenaz (1986) FLC 91-748 Mihailides & Mihailides (Carter J, 6 October 2006, unreported) Stewart (Lindenmayer J, 17 April 1997, unreported) |
| Applicant: | MS BROCK |
| Respondent: | MR BROCK |
| File Number: | MLC 4041 of 2008 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | 5 February 2009 |
| Date of Last Submission: | 5 February 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 6 February 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr D. Crabtree |
| Solicitors for the Applicant: | Lampe Family Lawyers |
| Counsel for the Respondent: | Mr I.N. Brewer |
| Solicitors for the Respondent: | Quintessential Lawyers |
| Counsel for the Independent Children’s Lawyer: | Mr P. O’Connell |
| Solicitors for the Independent Children’s Lawyer: | Susan Ruffin |
ORDERS
That Susan Ruffin, Solicitor be restrained from further acting in the matter.
Victoria Legal Aid, as a matter of urgency, be requested to appoint a solicitor as replacement of the Independent Children’s Lawyer.
That all interim applications be otherwise dismissed.
The parties be granted leave to file their respective trial documents no later than 3.00 pm Friday, 13 February 2009.
IT IS NOTED that publication of this judgment under the pseudonym Brock & Brock is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 4041 of 2008
| MS BROCK |
Applicant
And
| MR BROCK |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
Introduction
In May 2008, Ms Brock filed an application for parenting orders in relation to the two children of her marriage to Mr Brock. In these reasons, for the sake of simplicity, they will be referred to as the wife and the husband respectively.
Those proceedings are listed for a trial in 10 days time on 16 February 2009.
The application I am asked to determine was an application in a case filed by the husband on 4 February 2009. That application sought orders restraining Ms Susan Ruffin, who pursuant to orders made earlier in these proceedings, was appointed as the Independent Children’s Lawyer by Victoria Legal Aid in this matter from acting.
Ms Ruffin will be hereafter be referred to as the Independent Children’s Lawyer (“the ICL”).
Given the proximity of the trial date and the nature of the application, the matter was listed urgently and heard on 5 February 2009. Mr Brewer appeared for the husband, Mr Crabtree for the wife and Mr O'Connell for the ICL.
Give the interlocutory nature of the application, the matter proceeded by way of submissions on the papers and no party took issue with the approach.
At the conclusion of the hearing the decision was reserved overnight to today, 6 February 2009.
The application
The application sought the following orders:
“1.That the matter be heard on an urgent basis.
2.That the Independent Children’s Lawyer, Susan Ruffin, be restrained by injunction from further participating in these proceedings and Victoria Legal Aid be requested to transfer the appointment to a new Independent Children’s Lawyer.
3.Such other orders as this honourable Court deems appropriate.”
The application was supported by:
·an affidavit of the husband sworn 3 February 2009; and
·an affidavit of Bernadette Hughes, the husband's solicitor, sworn 4 February 2009.
The wife filed no material in relation to the application. The wife's position was that she neither supported, nor opposed the husband's application.
Counsel for the ICL sought leave to file without objection:
·an affidavit of Anthony Rosenhain, an employed solicitor at the ICL’s offices, sworn 4 February 2009; and
·an affidavit of Ms Ruffin, the ICL, sworn 4 February 2009.
Counsel for the ICL informed the Court that his client opposed the husband's application.
Background
By way of background to this particular application, the husband and the wife commenced a relationship in 2000 and were married in February 2003. They separated in April 2007.
There are two children of the marriage, [X] who is 8 and [Y] who is 6 (“the children”).
Following separation the children lived in a shared care arrangement until April 2008 when the wife moved from [L] to [E].
The substantive proceedings for parenting orders for the children were commenced by the wife in early May 2008 and had a first Court date on 14 May 2008.
There have been a number of interim hearings where the parenting orders were made including, directions for trial on 16 February 2009, the appointment of the ICL and the preparation of a family report. However, it is the events immediately prior to the commencement of the proceedings that are important for this application.
Material relied on
I now turn to the material relied on by the parties in the context of this application. Relevantly for present purposes, the husband deposed in his affidavit at paras [2]-[3] about the background to this application and his concerns as follows:
“2.During these proceedings I have become aware that Susan Ruffin of Susan Ruffin Solicitors has been appointed as the Independent Children’s Lawyer in this matter.
3.Prior to these proceedings commencing I sought legal assistance from Ms Ruffin’s office. I spoke to a gentleman at her officer on the telephone. I did not get his name. I discussed with him the issue of the children and my obligations in relation to them. I advised him of the details of my situation and in particular that I requested his advice over the telephone with respect to over holding the children. I was advised I was able to over hold the children and I did so on his advice. I attempted to have an appointment with his office, however he advised me that the primary solicitor was overseas and they did not have time to take on an urgent case. I therefore sought alternative representation.
…
6.I raised this issue with my solicitor who advise me on the implications of conflict of interest with respect to legal representation. I am concerned that the appointment of the Independent Children’s Lawyer has been advised of details of this matter and the advice received as fundamental in my initial decision in relation to the children.”
The ICL deposed to her involvement in these proceedings as follows:
“1.I was appointed Independent Children’s Lawyer in this matter on Thursday, 4 December 2008.
2.On 8 December 2008, I wrote to the Husband and Wife’s respective solicitors advising of my appointment and requesting a copy of documents. Annexed hereto and marked “SJR1” is a true copy of my letters dated 8 December 2008.
3.On 10 December 2008, I received letters and copy of documents from each of the parties solicitors. Annexed hereto and marked “SJR2” is a true copy of letters received by me on 10 December 2008.
4.On 11 December 2008, I wrote to the parties solicitors confirming receipt of documents and asking specific questions about the children and their schooling and living arrangements. Annexed hereto and marked “SJR3” is a true copy of my letters dated 11 December 2008.
5.As I had not received any reply to my letter of 11 December 2008 from wither of the parties solicitors, I wrote to them both on 14 February 2009 requested replied as a matter of urgency.
6.On 14 [January] 2009, the husband’s solicitor telephoned this office and advised that she had not received our letter of 11 December 2008. My assistant forwarded a copy of the said letter to the husband’s by facsimile during same afternoon.
7.On 22 January 2009, my assistant telephoned the parties solicitors and requested they reply to my letter of 11 December 2008.
8.On 28 January 2009, I forwarded letters to the parties solicitors by facsimile as I had still not received replies to my letter of 11 December 2008.
9.On 28 January 2009, the Husband telephoned this office and arranged an appointment for me to meet the children on Friday 30, January 2009.
10.On 30 January 2009, the Husband’s solicitor Ms Hughes, telephoned me and for the first time, raised the possibility of there being a conflict of interest. I received a matter from Ms Hughes later that day detailing her instructions.”
The ICL responded to the matters raised in the husband's affidavit at paragraph [11] of her affidavit which provided that:
“11.I have read the Affidavit of the Husband Mr Brock, sworn on 3 February 2009 and in response I say as follows:
(a)That I was overseas from 1 May 2008 until 2 June 2008 and in my absence, my firm was professionally staffed and managed by Anthony Richard Rosenhain, employee solicitor.
(b)I have spoken to each of the staff members and none of them can recall the Husband telephoning this office.
(c)A search of this office has shown that we do not have any written record of any person at this office having spoken to the husband prior to 29 January 2009.
(d)My staff members have told me that during my absence, numerous people telephoned seeking appointments with myself and/or Mr Rosenhain. However, as the firm was extremely busy, new callers were advised that I was overseas until June 2008, we were unable to assist in any urgent matters and could not accept new clients until my return. Callers for whom time was of the essence, were advised to contact other solicitors or the local community legal service.
(e)It is my firm’s practice not to give legal advice over the telephone other than to existing clients.”
Mr Rosenhain deposed as to his involvement in the background to these matters at paragraph [2] to [6] of his affidavit which set out that:
“2.Whilst the principal of the firm, Susan Ruffin, was overseas from 1 May 2008 until 3 June 2008, I managed the said firm and was the sole solicitor present at the office.
3.I have no record of having ever spoken to the husband, Mr Brock.
4.It is not my practice to give advice over the telephone other than to existing clients.
5.On Thursday, 1 May 2008, I was duty lawyer at the Magistrates’ Court of Victoria, Korumburra and was in attendance there from shortly after 9.00 am until after 4.00 pm. I was not in the office and could not have spoken to the husband by telephone that day.
6.On Friday 2 May 2008, I was at the Magistrates Court of Victoria, Wonthaggi until approximately 12.40 pm and arrived back at my office in time for a 1.00 pm appointment with a client. I had two further appointments and finished seeing clients at approximately 4.15 pm. I recall leaving the office at approximately 4.20 pm. I have no record of having spoken with Mr Brock on this day and further say that there was no opportunity for me to speak with any client on the telephone that day.”
The Law
The ICL was appointed by an order made pursuant to section 68L of the Family Law Act 1975 (“the Act”) which is that Act that governs the application for parenting orders in the substantive proceedings.
The role of the ICL is described in section 68LA as including:
“General nature of role of independent children's lawyer
68LA(2) The independent children's lawyer must:
(a)form an independent view, based on the evidence available to the independent children's lawyer, of what is in the best interests of the child; and
(b)act in relation to the proceedings in what the independent children's lawyer believes to be the best interests of the child.
68LA(3) [Suggested course of action] The independent children's lawyer must, if satisfied that the adoption of a particular course of action is in the best interests of the child, make a submission to the court suggesting the adoption of that course of action.
68LA(4) [The independent lawyer is not the child’s legal representative] The independent children's lawyer:
(a)is not the child's legal representative; and
(b)is not obliged to act on the child's instructions in relation to the proceedings.
Specific duties of independent children's lawyer
68LA(5) The independent children's lawyer must:
(a)act impartially in dealings with the parties to the proceedings; and
(b)ensure that any views expressed by the child in relation to the matters to which the proceedings relate are fully put before the court; and
(c)if a report or other document that relates to the child is to be used in the proceedings:
(i)analyse the report or other document to identify those matters in the report or other document that the independent children's lawyer considers to be the most significant ones for determining what is in the best interests of the child; and
(ii)ensure that those matters are properly drawn to the court's attention; and
(d)endeavour to minimise the trauma to the child associated with the proceedings; and
(e)facilitate an agreed resolution of matters at issue in the proceedings to the extent to which doing so is in the best interests of the child.
More detailed guidelines have been published by the Family Court, setting out the expectations of Independent Children's Lawyer by the Courts. Those guidelines include:
“5. Relationship with the Child
The child has a right to establish a professional relationship with the ICL. In considering any views expressed by the child and the steps to be taken in a matter the ICL is to be aware:
· that each child will have different emotional, cognitive and intellectual developmental levels, family structures, family dynamics, sibling relationships, religious and cultural backgrounds; and
· that children are vulnerable to external pressures when caught in disputes involving their parents.
5.1 Information which should be explained to the child
When the ICL meets the child, s/he should explain to the extent that is appropriate for the child:
· the role of the ICL including the limitations of the role;
· the Court process (including any anticipated interlocutory stages); and
· the other agencies that may be involved and the reasons for their involvement.
The ICL is to ensure that the child is aware that information provided by the child to the ICL in some circumstances may have to be communicated to the Court, the child's parents or other persons or agencies. A strategy should be developed in consultation with any Family Consultant involved in the case and with the child as to the manner in which this is done. The aim is to minimise the potential for any adverse reaction towards the child.
· Despite the inability to guarantee the child a confidential relationship, the ICL should, however, strive to establish a relationship of trust and respect. This is assisted by explaining the role of the ICL, including:
· how the child can have a say and make his/her views known during the process;
· that where a child of sufficient maturity wishes to have a direct representative who will act on the child's instructions, the ICL should inform the child of the possibility of applying to become a party to the proceedings;
· the involvement of any report writer, the nature and purpose of the report, the use to which the report will be put and that all parties will see the report; and
· how the ICL can be contacted by the child.
…
6.2 Meeting the Child
It is expected that the ICL will meet the child unless:
• the child is under school age;
• there are exceptional circumstances, for example where there is an ongoing investigation of sexual abuse allegations and in the particular circumstances there is a risk of systems abuse for the child;
• there are significant practical limitations, for example geographic remoteness.
…
6.5 Case Planning
The ICL is to seek to develop a case plan at the earliest opportunity, where appropriate, in consultation with any Family Consultant or other expert involved in the case.
In the case plan, the ICL should:
· canvass the nature of any reports or examinations of the parties and/or the child;
· develop a strategy for the involvement of the child in any examination/assessment process;
· liaise with any Family Consultant involved in the case, relevant government departments, contact centres, schools and agencies to bring together relevant information to assist the Court in assessing and determining the best interests of the child;
· develop opportunities for the matter to reach an agreed outcome which best promotes the child's best interests;
· provide information, support, and assistance as required for or requested by the child during the process of litigation, whether directly or by way of appropriate referral;
· be vigilant and make every endeavour to minimise systems abuse of the child; and”
It is clear from the Act and Guidelines that the ICL to be an active, independent advocate acting in the children’s best interests.
The Court was referred to a number of authorities during the course of submissions in this matter. The Court also referred Counsel to the decision of the Full Court in W & M & Anor [2006] FamCA 512 at paragraph 33 where it was said:
“33.It is clear that the Court has the power to remove a child representative. See Lloyd and Child Representative (2000) FLC 93-045; Re K (1994) FLC 92-461; and T and L (2000) FLC 93-056. That power is to be exercised in accordance with the proper appreciation of the role of the child representative and, of course, the evidence.
34.In T and L, Chisholm J expressed the view that while an application to remove a child representative is not strictly covered by the principle that the child's best interests must be treated as the paramount consideration, those interests will normally be a matter of great and probably overwhelming importance. While a child representative should be removed if there are proper reasons for doing so, it would be quite wrong for a Court to remove such a representative merely because a litigant has taken the view that the representative is acting contrary to that litigant's position or, from that litigant's point of view, contrary to the child's best interests.”
In Lloyd (2000) FLC 93-045 at pages 87-686 to 87-687, at paragraphs [7]-[10] it was said:
“7. There is no doubt that the Court has the power to discharge an order for separate representation. In the case of Re K (1994) FLC 92-461 the Full Court of the Family Court of Australia expressly approved of the following statement made by Hannan J in Pagliarella and Pagliarella (1993) FLC 92-400 at 80,105:
``It was not submitted that the Court did not have the power to discharge a separate representative and I have no doubt that such a power exists. Section 65 (now section 68L) of the Act empowers the Court to make an order for separate representation of a child and although it may request a Legal Aid body to arrange the representation... the appointment is by order of the Court and the power of appointment would carry with it the power to discharge the person appointed pursuant to the order, if proper cause is shown that it is appropriate or desirable that the person appointed as the separate representative should be removed.''
8. The role of the separate representative is relatively well settled. In P and P (1995) FLC 92-615 at 82,156-82,157 the Full Court said as follows:
``The role of the Separate Representative
In this regard, we think it worth saying something more about the role of a separate representative in a case such as this. In Bennett and Bennett (1991) FLC 92-191, particularly at pp 78,258-78,259, the Full Court discussed the proper role and function of a separate representative and in Re K (1994) FLC 92-461 it set out guidelines as to the circumstances in which a separate representative was to be appointed, which normally would include cases of this nature if one of the parties, such as the Public Advocate, was not fulfilling such a role. In a helpful submission prepared on behalf of the separate representative in this case by Ms Ryan of the Legal Aid Commission of NSW, the position of a separate representative was summarised as follows:
`The separate representative ought:—
1. Act in an independent and unfettered way in the best interests of the child.
2. Act impartially, but if thought appropriate, make submissions suggesting the adoption by the Court of a particular course of action if he or she considers that the adoption of such a course is in the best interests of the child.
3. Inform the Court by proper means of the children's wishes in relation to any matter in the proceedings. In this regard the separate representative is not bound to make submissions on the instructions of a child or otherwise but is bound to bring the child's expressed wishes to the attention of the Court.
4. Arrange for the collation of expert evidence and otherwise ensure that all evidence relevant to the welfare of the child is before the Court.
5. Test by cross-examination where appropriate the evidence of the parties and their witnesses.
6. Ensure that the views and attitudes brought to bear on the issues before the Court are drawn from the evidence and not from a personal view or opinion of the case.
7. Minimise the trauma to the child associated with the proceedings.
8. Facilitate an agreed resolution to the proceedings.'
These statements are of general application to all cases and we are in broad agreement with them.''
9. The order being sought by the husband is not a parenting order within the meaning of s 64B and, therefore, does not directly invoke the application of the paramountcy principle set out in s 65E.
10. However, this is a matter in which the ultimate issue is whether or not certain parenting orders ought to be made. It is also a matter relating to the proper representation of the children. In those circumstances, in my opinion, the paramountcy principle is relevant, see CDJ v VAJ (1998) FLC 92-828.”
Holden CJ in Lloyd refers to the factors at para [11] which would lead the Court to consider discharging what was referred to as a separate representative (here the ICL):
“11. Without attempting to be exhaustive, there are certain circumstances, which, in my view, would lead the Court to consider discharging a separate representative. Some of those circumstances are:
(i) if there is evidence that the separate representative had, in any way, acted contrary to the children's interests;
(ii) if there is evidence before the Court that the separate representative had acted incompetently in a professional sense;
(iii) if it is apparent that the separate representative has demonstrated a lack of professional objectivity; or
(iv) if to continue to act would involve a breach of a fiduciary duty or a conflict of interest.”
At paragraph [30] his Honour set out a number of very good reasons, however, why the Court should be slow to discharge the ICL in such proceedings:[1]
“30. There are a number of very good reasons why, in my opinion, the Court should be slow to discharge a child representative on the basis of largely unsubstantiated complaints of one of the parties. Those reasons include:
(i) The best interests of the children have to be borne in mind. Unfortunately these children have been embroiled in the dispute between their parents for a long period of time. For much of that time they have had C as their representative who states that in her belief she has developed a good relationship with the children. That would not be surprising given the period of time that she has been representing them. Given what the children have had to endure to date, by virtue of these proceedings, it does not seem to me to be in their best interests to deprive them of a representative with whom they have built up a good relationship and introduce them to a complete stranger with whom they may or may not develop a similar relationship. In my opinion the Court should not take that step unless there is good reason to do so. No such reason is present in this case.
(ii) The Court should treat allegations of lack of impartiality with caution. To do otherwise would leave every separate representative in the perilous position of facing an application that he or she be discharged because of unfounded allegations or perceptions made by one or other of the parties. There is a need on the part of a child representative to retain his or her impartiality, that is, to be fair to all concerned. However, that does not mean that he or she must take or not take steps in the proceedings simply because one or other of the parties does or does not want her or him to take that step.
It would be an intolerable situation if a party could successfully apply to have a child representative removed simply because that party perceived that the representative was not ``on side'' or that the tide was not running in his or her favour. In my opinion, it is only in cases where actual, rather than perceived or alleged, impartiality has been demonstrated, that consideration ought to be given to removing a child representative.
(iii) There is also a public policy consideration. To date, as I understand it, the fees of the children's representative have been met by Legal Aid. As I indicated earlier in these reasons for judgment, these parties have been arguing in this Court over their children for a period approaching 6½ years. C has been involved in the proceedings for about 4½ of those years and, no doubt by virtue of that fact, has a thorough knowledge of what has gone on between the parties.
Any new solicitor appointed would have to wade through the four volumes of the Court file to acquire the necessary knowledge to adequately represent the children. That, of itself, would involve considerable expense to the Legal Aid Commission, the resources of which are finite. That is not to say that this consideration should prevail where obvious impartiality has been demonstrated to the satisfaction of the Court.”
[1] Lloyd (2000) FLC 93-045
However, that is not the end of the principles that are applicable in this case. There are also the principles applicable where it is sought to restrain a solicitor or firm of solicitors from continuing to act in proceedings and those principles are summarised In theMarriage of McMillan [2000] FamCA 1046 at paragraphs [38] to [57] of the Full Court's decision:
“The restraining order against the wife’s solicitors
38.It has been accepted in this Court, at least since the decision in June 1986 of Frederico J. in Thevenaz (1986) FLC 91-748, that the Court “has power to make orders restraining a firm of solicitors from continuing to act for one of the parties to proceedings in this Court, if it is of the view that it would be likely that those solicitors may have confidential information relating to the other party to the proceedings arising out of a former relationship of solicitor and client with that party which may be used to the advantage of the present client or to the disadvantage of the former client in the current proceedings” (per Lindenmayer J. in the unreported decision of Stewart (17 April 1997)).
39.We will refer shortly to the decision in Thevenaz, to decisions which have followed it, and to the areas of uncertainty which have marked this area of the law. Before doing so, however, we must emphasise that this case is not about a solicitor who has previously acted for the husband, and is now a member of, or employed by, a firm of solicitors acting for the wife. Rather it is about a clerk or secretary who is not legally qualified, but who, according to the husband’s evidence, has been the recipient of instructions from the husband about how he wants his case against the wife conducted, and who now works as a secretary to the wife’s solicitor, with the result that the husband believes that the information which the clerk has could be used against the husband in the proceedings against the wife.
40.Accordingly, it might be said that the authorities concerning the Court’s power to restrain a solicitor from acting for a former client have no relevance to this case. Nevertheless, given the apparent dearth of authority on the exact problem which arises in this case, we see value in commencing our consideration of the problem with a discussion of the principles concerning solicitors acting against former clients in family law matters. These were certainly the principles against the background of which the trial Judge reached his decision in this case.
Authorities concerning restraints on legal practitioners
41.In Thevenaz, Frederico J was prepared (if required) to restrain a solicitor, Mr Dezarnaulds, from acting on behalf of the wife in property settlement proceedings against the husband where that solicitor had previously been in partnership with another solicitor, Mr Halliday, who had handled conveyancing matters for the husband and the wife. In the course of his reasons for judgment, Frederico J. said (at 75,446-75,447):
“The problem, however, is that it is the practitioner's duty to put at his client's disposal, not only his skill but also his relevant knowledge, and if he is not prepared to make that knowledge available, he should not act. (See Spector v. Ageda (1973) 1 Ch. 30.) Mr Dezarnaulds is thus under a duty to make available to his client such information as may appear from the files of the parties formerly kept by Mr Halliday which are in Mr Dezarnaulds’ possession or power.
In the Full Court of Queensland in Mills v. Day Dawn Block Gold Mining Company Ltd.; In re Marsland (1882) Q.L.J. 62 at p. 63 Lilley C.J. said:
“It was the duty of the attorney not to place himself in such a relation as might lead to there being even an unwitting breach of duty. Here they found a man retained by a party who was in direct opposition to the interest of his client, an interest upon which he had previously actually advised, and Mr Mills was therefore entitled to the protection of the court. Upon the main question, whether any confidence had in fact been imparted to Mr Marsland by Mr Mills, there was a conflict of testimony. If they (the judges) were to insist upon actual proof of the existence of such confidence, and to insist upon knowing what it was, and whether it was likely to prejudice a client's interests, they would compel him to strip himself of the protection which the court usually afforded, and the whole mischief he wished to avoid might arise.”
Thus “a practitioner who wishes to cease acting for one party and to continue to act for the other party will be restrained from doing so by the court if there is any evidence that confidential communications have been made to him by the party for whom he is ceasing to act. In such a case the court will not weigh conflicting evidence as to confidence. It will act upon the evidence of the client who swears that he has made the confidential communication”. (See Legal Profession Law and Practice in Victoria (Gifford) 1980 ed. at p. 356.)
I must say that at first sight it appeared to me that in a case of this nature the matter should be resolved by the relevant Law Society. However, although Mr Dezarnaulds is entitled to practise in the Family Court of Australia pursuant to the provisions of Pt VIIIA of the Judiciary Act 1903, he has not sought to argue that the Court lacks power to restrain a solicitor from acting on behalf of a client. Every court has control of its own procedure and it is apparent from the decision in Mills’ case to which I have referred, and from other cases arising in somewhat differing circumstances, that the Court has the power to restrain.
It is my view that in this case Mr Dezarnaulds should not continue to act on behalf of Mrs Thevenaz. It may well be that the risks were he to do so are more theoretical than practical. However, it is asserted and not contradicted that material in the files does relate to confidences exchanged in the course of the former firm previously acting on behalf of both parties and would embarrass the husband. It is of the utmost importance that justice should not only be done but should appear to be done. In the circumstances of the present case, there is a risk which may well be merely theoretical but still exists, that justice might not appear to be done.”
42.Before referring to the decisions of this Court made subsequent to the decision in Thevenaz, there is probably value in our quoting at greater length (than did Frederico J. in Thevenaz) from the main judgment of the Full Court of the Supreme Court of Queensland in Mills v. Day Dawn Block Gold Mining Company Limited; In re Marsland (1882) QLJ 62, being the judgment of Lilley CJ. This is because of the reliance which this Court has placed on the decision in Mills in the development of this Court’s approach to the question of when a solicitor will be restrained from acting against a former client (or a former client of his or her partner or employee). The significant feature of this approach is that for the client to succeed, he or she need only give evidence that he or she has imparted information of a confidential nature to the practitioner in question and that there is at least a theoretical possibility that it could be used against him or her. The relevant passages from the decision of Lilley CJ are (at 62-63):
“... It appeared that Mr. Marsland had been acting as the town agent of the country attorney who had been retained by Mr. Mills, the plaintiff in this case. He was not merely town agent, but seemed to have been active in the investigation of the plaintiff's claim, and proceeded so far in the matter as to give an opinion on it.
...
His Honour did not think for a moment that Mr Marsland would conscientiously do any wrong, but it might happen that in an unguarded moment he might let fall something which would injure the interest of Mr. Mills, and which would amount to a breach, although an unwitting breach of his duty. It was needless, after the numerous cases cited, to review the authorities for the purpose of showing jurisdiction. It rested on this, the court kept a firm control over all its officers, and would restrain them from doing anything inconsistent with their duty to their clients. It was the duty of the attorney not to place himself in such a relation as might lead to there being even an unwitting breach of duty. Here they found a man retained by a party who was in direct opposition to the interest of his client, an interest upon which he had previously actually advised, and Mr. Mills was therefore entitled to the protection of the court. Upon the main question, whether any confidence had in fact been imparted to Mr. Marsland by Mr. Mills, there was a conflict of testimony. If they (the judges) were to insist upon actual proof of the existence of such confidence, and to insist upon knowing what it was, and whether it was likely to prejudice a client's interests, they would compel him to strip himself of the protection which the court usually afforded, and the whole mischief he wished to avoid might arise. As it seemed to him, on the one side the client insisted on oath that he had imparted confidence to Mr. Marsland; and, on the other side, the solicitor said, “I have no confidence.” How could the court decide it? If they took the oath of the attorney against the oath of the client, and refused the protection which the client sought, why, then, the matter might proceed, and the mischief which the client feared might arise, and the court could afford no remedy. In cases of this kind less mischief would accrue through granting the protection sought than in accepting the oath of the attorney against the client. The client's interest should prevail, and the judge should refuse to determine the matter on the conflicting testimony of affidavits.”
43. Shortly after it was given, the decision in Thevenaz was the subject of consideration by Bryson J. in the Equity Division of the Supreme Court of New South Wales in the case of D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118. The facts of that case are not important for present purposes. However, the following passages from his Honour’s judgment, where he preferred the approach of the English Court of Appeal in Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831 over the approach of the Queensland Full Court in Mills (which Frederico J. had of course followed in Thevenaz), but where he explained the decision of Thevenaz in the context of the circumstances of family law litigation, are important to an understanding of the issues which arise in this area (at 122-123):
“In my view the legal basis on which the court should act in restraining solicitors from acting for the opposite side after acting for one party before or during litigation appears from statements in the Court of Appeal of England in Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831. Cozens-Hardy MR said (at 835)
“... we must treat each of these cases, not as a matter of form, not as a matter to be decided on the mere proof of a former acting for a client, but as a matter of substance, before we allow the special jurisdiction over solicitors to be invoked, we must be satisfied that real mischief and real prejudice will in all human probability result if the solicitor is allowed to act.”
Fletcher Moulton LJ clearly stated the need to look at the facts of each case to discern what protection for confidential information is appropriate (see at 839-841). He said (at 841): “As a general rule the Court will not interfere unless there be a case where mischief is rightly anticipated.” Buckley LJ also showed the need to refer to the particular circumstances (at 842). It was submitted that I should not follow this decision because it does not, as the submission was, give sufficient weight to the fact that the knowledge of one partner is available to and should be attributed to all partners. I think that Rakusen’s case points the way I should go, although there was in that case the important element of identity of the former client with the later opponent. The existence of a proved risk of misuse of confidential information appears to me to be very important if the plaintiff is to succeed.
Where confidential information has been communicated by a client to a solicitor and is relevant to litigation in which that client is now engaged and is still available to the solicitor, the court should take a cautious approach to any proposal that it should allow the solicitor to act against that client: the considerations are much the same whether the information was communicated in the course of the litigation itself or in earlier business and whether or not the solicitor is a sole practitioner or is one of a number of partners or was employed by a principal. I would think that the court would not usually undertake attempts to build walls around information in the office of a partnership, even a very large partnership, by accepting undertakings or imposing injunctions as to who should be concerned in the conduct of litigation or as to whether communications should be made among partners or their employees. The new client would have to join in such an arrangement and give up his right to the information held by such parties and staff as held it. Enforcement by the court would be extremely difficult and it is not realistic to place reliance on such arrangements in relation to people with opportunities for daily contact over long periods, as wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control. Here in Sydney and now there is a thriving diverse and talented legal profession and the court need not fear that a litigant who is deprived of the services of one firm will not be able to retain adequate representation.
Cautious conduct by the court is appropriate because the spectacle or the appearance that a lawyer can readily change sides is very subversive of the appearance that justice is being done. The appearance which matters is the appearance presented to a reasonable observer who knows and is prepared to understand the facts. The court should weigh the facts and assess the risks in the eye of reality, theoretical risks should be disregarded and when as here there is no confidential information available and there never was a relationship of solicitor and client with any partner the appearance of the matter is not a basis for the court to assume control over the retainer.
A more rigid rule than that stated in Rakusen’s case has been applied at other times: the Court of Appeal mentioned Irish cases which had been cited to them and counsel cited Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62 to me. However the Court of Appeal was aware of and deliberately did not adopt a more rigid rule and I do not think that I should. It would seem that in deciding the degree of control which it should adopt each court must to some extent interpret its own times and manners and the conduct which it should expect from or even fear from its practitioners. Some ages and some classes of business could well require a more ready apprehension of mischief than the Court of Appeal of England thought appropriate in 1912 or than I think appropriate here and now.
There was recent consideration of the circumstances in which a solicitor would be restrained from acting for a former client by the Family Court of Australia (Frederico J) in In the Marriage of Thevenaz (1986) FLC 91-748; 11 Fam LR 95. That Court took the view that restraint is justified if there is a risk that confidential communications on relevant matters have been made by the party for whom the solicitor has ceased to act, even if the risk may be more theoretical than practical. It seems natural that a particularly careful view would be taken in family law business, as such litigation tends to be about highly confidential facts and a very wide range of facts and circumstances can conceivably be relevant; the sensitivity which even the most reasonable people feel about such litigation when they are engaged in it calls for careful measures to secure not only that justice is done but also that it is apparent that it is done, an appearance which would not survive any general impression that lawyers can readily change sides.”
44.In what appears to be the next reported decision of this Court on this topic, Rourke J. in Magro (1989) FLC 92-005 was prepared to restrain the solicitor for the husband, Mr M, from continuing to act for the husband in property settlement proceedings where a solicitor who had once acted for the wife in those proceedings had now been employed by Mr M’s firm but was in no way involved in the proceedings between the husband and the wife. His Honour appears to have considered that this was a stronger case for the grant of a restraining order than in Thevenaz when he said (at 77,187-77,188):
“... It is abundantly clear that the nexus between Mr D in Thevenaz's case and the husband via Mr D's former partner was far more tenuous than the situation affecting the applicant wife in these proceedings. Mr B is the wife's former solicitor retained by her in the presently pending, and bitterly contested, property proceedings. His professional activities on her behalf were of considerable depth and involved not only 75 pages of written instructions but also further privileged communications conveyed in conference and in the course of numerous telephone attendances. As the wife herself pointed out in a somewhat emotional outburst in the witness box:
“He (i.e. Mr B) knows my whole life and my past history” (or words to that effect).
The same Mr B is now in the employ of the husband's solicitor who, recognising the potential duty-interest conflict, has undertaken not to confer with his employee concerning the matter. Mr B, in an affidavit sworn 28 November 1988, has given the Court a reciprocal undertaking. There is no evidence before me of any breach of these undertakings, and I am prepared to assume in favour of both Mr M and Mr B that each is an honourable and respected legal practitioner whose professional integrity is not in question.
Even on these assumptions, if I follow the reasoning of Frederico J. in Thevenaz it is the appearance of justice not being done which is the determinant, and not the probability. If this be the correct principle the injunctive relief sought in the present proceedings is prima facie irresistible.”
45.However, Rourke J. then went on to recognise that Bryson J.’s decision in D & J Constructions and an earlier unreported decision of Wood J. of the New South Wales Supreme Court in Sogelease Aust. Ltd. v MacDougall & Ors (17 July 1986) might complicate the question because both espoused the principle enunciated in Rakusen “that before the Court will intervene by way of injunction to restrain a solicitor from acting, it must be convinced of the existence of a confidence reposed in that solicitor by a former client and of the probability of its being abused”.
46.Ultimately Rourke J. found it unnecessary to resolve the apparent conflict of principle between D & J Constructions and Sogelease on the one hand and Thevenaz on the other. This was because he was satisfied that the conditions for injunctive relief as formulated in Rakusen had been met in the case before him.
47.However in the course of his reasons for judgment, Rourke J. made the following observations concerning the shortcomings of undertakings by members or employees of firms of solicitors not to divulge confidential information, and also concerning the particular difficulties and sensitivities which arise in the family law area (at 77,191):
“If one scrutinises the undertakings individually given by Mr M and Mr B in relation to their future conduct in these proceedings, those undertakings amount to just the sort of artificial “walls around information in the office of a partnership” referred to by Bryson J. in [D & J Constructions]. With the best will in the world, it would be difficult in my view for Mr M not to stumble upon some confidential information possessed by his tight-lipped and ethical employee. A letter from the Law Society of New South Wales addressed to Mr B and marked PRIVATE AND CONFIDENTIAL concerning this very matter has already found its way into Mr M's hands prior to Mr B's seeing it and has been respondent to, not by Mr B, but by his employer.
It is cogently argued by counsel for the husband in reliance upon the Rakusen formulation of principle that no breach of confidence has been demonstrated by the wife. The wife could not, for example, point to any affidavits sworn in the husband's case which contain material emanating from her confidences to Mr B. Nor was the wife able to specify what particular confidence imparted to Mr B endangers her forensically in these proceedings. Counsel for the husband argues from this that the Court cannot be satisfied that “real mischief and real prejudice will in all human probability result if the solicitor is allowed to act” (to employ the words used by Cozens-Hardy M.R. in Rakusen).
The answer to this contention appears to me to lie in the peculiar quality of family law litigation to which reference was made by Bryson J. in D. & J. Constructions Pty. Ltd. Particularly in a proceeding involving the wealth of issues identified above, it is reasonable to infer that Mr B, by dint of his lengthy retainer, is in possession of at least some privileged material belonging to the wife which could be put to good use by the husband. This might only consist of impressions of the wife's personality gained after many hours of confidence, which could be exploited by a skilful advocate presented with those impressions. In these circumstances the appearance of justice will, to borrow Bryson J.'s words, not long "survive any general impression that lawyers can readily change sides". On any objective view of the matter the wife's position in these proceedings has been undermined ever since Mr B entered the employ of those representing her husband. The circumstance that Mr B has retained the photocopy document relating to the proprietary company can only serve to reinforce the wife's perception of prejudice.”
48.Shortly after Rourke J.’s decision in Magro, Renaud J. in Gagliano (1989) FLC 92-012 also carried out a review of the various authorities to which we have already referred, and drew attention to the apparent conflict between Mills and Thevenaz on the one hand and Rakusen on the other. The peculiar facts of Gagliano and her Honour’s ultimate decision do not need to be discussed for present purposes. But what is important is her Honour’s view that in reaching her ultimate decision, she had to weigh the possibility of injustice to the husband in that case if his solicitor was not permitted to continue to act, against what her Honour described as “the real risk of prejudice and apparent injustice to the wife” if those solicitors continued to act.
49.Subsequently in Griffis (1991) FLC 92-233, Mullane J. restrained the wife’s solicitor from further acting for the wife in property settlement proceedings against the husband in circumstances where that solicitor had previously advised both the husband and the wife in connection with their business affairs. In his reasons for judgment, Mullane J. carried out a comprehensive review of a solicitor’s duty to make his relevant knowledge available to his client and to preserve the confidentiality of information received from the client (even after the solicitor/client relationship has ceased). Then in proceeding to discuss the remedies available to a client to prevent the disclosure or use by the solicitor of confidential information, his Honour referred to the two leading decisions in the area, being Mills and Rakusen, and his Honour expressed a preference for the approach in Mills.
50.In his subsequent decision in Kossatz (1993) FLC 92-386, Mullane J. provided the following useful, concise summary of his decision in Griffis and of his reasons for preferring the Mills approach over the Rakusen approach (at 79,987):
“In Griffis and Griffis (1991) FLC 92-233 I referred at length to the law in relation to a solicitor's duty of confidence and to the power of courts to restrain a solicitor from acting in breach of that duty. I there referred to the different approaches adopted by the English Court of Appeal in Rakusen v Ellis, Mundayand Clarke [1912] 1 Ch 831 and the Full Court of the Queensland Supreme Court in Mills v Day Dawn Block Gold Mining Co Ltd [1882] Qld 62. The approach in Rakusen is that the client seeking the injunction must prove a “probability of mischief” - a likelihood of confidential information being disclosed or used to the client's prejudice. The approach in Mills is a stricter approach that a court should restrain an attorney who places himself “in such a relationship as might lead to there being even an unwitting breach of duty”.
I preferred the Mills test in Griffis on the basis that unlike Rakusen it is consistent with the public interest and the subsequent developments in the law as described in the judgment. I also preferred the approach in Mills that the applicant client need not prove the content of the confidence; but only a prima facie case that the information imparted was confidential.”
51.His Honour then went on in Kossatz to refer to developments in the United States and more particularly in Canada and England (at 79,987-79,988):
The decision in Griffis on these two points is also more in line with the way the law has evolved in the United States (see “Conflicts of Interest in the Legal Profession” [1981] 94 Harvard Law Review 1244 espec. 1315 et seq), and in Canada (see Supreme Court of Canada in Martin v MacDonald Estate [Gray] [1991] Western Weekly Reports 705).
In Martin v MacDonald Estate the bench of seven were unanimous in rejecting Rakusen in favour of a stricter approach. The majority adopted an approach that the lawyer would be restrained unless a reasonably informed person would be satisfied that no use of confidential information would occur. The first question was whether the lawyer received confidential information attributable to the solicitor-client relationship and relevant to the matter at hand. The second question was whether there was a risk that such information would be used to the prejudice of the former client.
In answering the first question the majority adopted an even stricter approach than the Mills test of prima facie proof of confidential information. They held that the former client need only prove that the prior solicitor-client relationship is sufficiently related to the retainer from which it is sought to remove the solicitor. The court would then infer confidential information was imparted unless the solicitor established (without revealing the specifics of any confidence) that no information was imparted which could be relevant.
The three Judges in the minority emphasised the public interest in preserving the appearance of justice, fairness and the integrity of the justice system. They held that once the former client establishes a lawyer had a substantial involvement with that client in an ongoing contentious matter, there is an inrebuttable (sic) presumption that his knowledge of the matter, including confidential information, has become knowledge of any new firm to which he moves and any such firm will be restrained from acting against that former client in that matter.
Rakusen has also been considered recently by the English Court of Appeal in In re A Firm of Solicitors [1991] 1 QB 959. All three of the Judges agreed with the rejection by Rakusen of the proposition that there is an absolute rule that “a solicitor who has acted in a particular matter ... cannot act for the opposite party”. The majority (Parker LJ and Sir David Croom-Johnson) held that the principle to be extracted and applied from the judgments in Rakusen is that where a reasonable man with knowledge of the facts would say “If I were in the position of the objector I would be concerned that, however unwittingly or innocently, information gained while the solicitor was acting for me, might be used against me”, the court should intervene (at pp. 969 and 978).
Sir David Croom-Johnson did not concur with Parker LJ in his view (at pp. 969-970) that the court should enforce the English Law Society principle in its “Guide to the Professional Conduct of Solicitors 1990” that “If a solicitor or firm of solicitors has acquired relevant (confidential) knowledge concerning a former client during the course of acting for him, he or it must not accept instructions to act against him”. Sir David Croom-Johnson took the view that such principle was advice on conduct and ethics going beyond the legal requirement (p. 972).
Parker LJ expressly rejected the test enunciated by Cozens-Hardy MR in Rakusen (with whom Fletcher-Moulton LJ agreed) that the court “must be satisfied that real mischief and real prejudice will in all human probability result if the solicitor is allowed to act”. His Lordship also distinguished Rakusen on the basis that the Court of Appeal there allowed the solicitor to continue to act only because of the particular and unusual undertakings there given and would not otherwise have done so (p. 968).
Staughton LJ (dissenting) adopted Rakusen as authority that: “Before the Court will interfere ... there must be some degree of likelihood of mischief that is to say of the confidential information imparted by the former client being used for the benefit of the new client”. His Lordship referred to the alleged duty of a solicitor to make his knowledge available to his new client. He noted that the new client had released the solicitors from such duty. He referred to Moody v Cox and Hatt [1917] 2 Ch 71 and held that it was not authority that such a duty applied in a large partnership to require it to disclose to the new client relevant knowledge possessed by its partners or staff. But it appears that His Lordship was not referred to and did not consider more recent decisions in this area of the law including Spector v Ageda [1973] Ch 30.”
52.Finally, at least for present purposes, Mullane J. in Kossatz repeated his preference for the Mills test (at 79,988-78,989):
“I was not referred to any Australia authority since Griffis and Griffis (1991) FLC 92-233 which placed doubt on the conclusion in Griffis that an Australian Court should not follow Rakusen but should prefer the test in Mills v Day Dawn Block Gold Mining Co Ltd that the court would restrain lawyers “from doing anything inconsistent with their duty to their clients”, and it is “the duty of the attorney not to place himself in such a relationship as might lead to there being even an unwitting breach of duty”. The Canadian and American developments in this area of the law provide more support for the Mills test than for Rakusen and the English Court of Appeal decision in In re A Firm of Solicitors places an interpretation on Rakusen which although not agreeing with the Mills test is much stricter than what had hitherto been the accepted interpretation of Rakusen.”
53.Further support for the view that the Rakusen test should no longer be applied can be found in the decision of Hayne J. in Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd and Others [1995] 1 VR 1, when as a member of the Supreme Court of Victoria, his Honour said (at 4-5):
“What degree of likelihood of mischief resulting from the continued employment of the solicitor must be shown to exist before injunction will go has been a matter of controversy since Rakusen’s case. A number of cases have considered whether it is necessary to go so far as Cozens-Hardy M.R. suggested when he spoke of demonstrating that real mischief and real prejudice “will in all human probability result” or whether it is sufficient to conclude (as Buckley L.J. suggested) that it is “reasonably necessary” to restrain the employment of the solicitor.
In Re a Firm of Solicitors [1992] Q.B. 959, Parker L.J. had no hesitation in rejecting the test propounded by Cozens-Hardy M.R. and, having regard to what had been said not only in Rakusen’s case but also in Re a Solicitor (1987) 131 S.J. 1063 and David Lee & Co. (Lincoln) Ltd. v. Coward Chance (A Firm) [1991] Ch. 259 suggested that the proper approach “is to consider whether a reasonable man informed of the facts might reasonably anticipate such a danger” [scil. a danger of breach of the duty not to communicate confidential information]. A similar approach was adopted by Ipp J. in Mallesons Stephen Jaques v. KPMG Peat Marwick (1990) 4 W.A.R. 357 at 362-3 where his Honour spoke of the test in terms of whether:
...there is a real and sensible possibility that his [the solicitor’s] interest in advancing the case of the new client might conflict with his duty to keep information given to him by the former client confidential, or to refrain from using that information to the detriment of the former client...
(See also Carindale Country Club Estate Pty. Ltd. v. Astill (1993) 115 A.L.R. 112; Fruehauf Finance Corporation Pty. Ltd. v Feez Ruthning [1991] 1 Qd. R. 558.)
The Full Court in Macquarie Bank Ltd. v Myer [1994] 1 V.R. 350 did not find it necessary to determine the division of opinion that may be said to be revealed by the cases that I have mentioned and by other cases in which the point has arisen such as Mills v. Day Dawn Block Gold Mining Co. Ltd. (1882) 1 Q.L.J. 62; In the Marriage of Thevenaz (1986) 86 (sic) Fam. L.R. 10; In the marriage of A & B (1990) 13 Fam. L.R. 798; In the Marriage of Griffis (1991) Aust F.L.C. 78-592 (sic); National Mutual Holdings Pty. Ltd. v. The Sentry Corporation (1989) 22 F.C.R. 209; D. & J. Constructions Pty. Ltd. v. Head (1987) 9 N.S.W.L.R. 118; Wan v. McDonald (1992) 33 F.C.R 491 and Australian Commercial Research and Development Ltd. v. Hampson [1991] 1 Qd. R. 508.
The plaintiff submitted that whether the test to be applied was one of demonstrating that real mischief and real prejudice would in all human probability result if J.M. Smith & Emmerton were allowed to continue to act or some other, lesser test, the firm should be restrained.
In my opinion the weight of authority, especially more recent authority such as the Malleson’s case and Re a Firm of Solicitors, clearly supports the view that the test to be applied in resolving an application of the present kind is not that put forward by Cozens-Hardy M.R. in Rakusen’s case but is a less stringent test. Although it is necessary to be acutely conscious of the fact that the court is asked to interfere with the right of a litigant to be represented by the solicitor of the litigant’s choice, it is not necessary to conclude that harm is inevitable (or well nigh inevitable) before acting to restrain a possible breach of the duty that a solicitor owes to clients and former clients to keep confidential information given to the solicitor in confidence and not use that information against the interests of the client who gave it to the solicitor. For present purposes I do not need to consider whether anything turns on the differences in expression of the test as given by Parker L.J. and Ipp J. It is enough to say that I consider that injunction should go if there is a real and sensible possibility of the misuse of confidential information.”
54.The test propounded by Hayne J. of “a real and sensible possibility of the misuse of confidential information” does not go as far as, or is not as strict as, the test propounded by Frederico J. in Thevenaz of even a theoretical risk of the misuse of the confidential information. To the extent that it is necessary in this case for us to express a concluded view (which it was not for the Full Court in McGillivray v Mitchell) we would support the application in this jurisdiction of the approach of Frederico J. in Thevenaz (following Mills) which was adopted by Mullane J. in Griffis and in Kossatz (and also by Lindenmayer J. in the unreported case of Stewart to which we will shortly refer). We would do so for the reasons related to the sensitive nature of the jurisdiction which were referred to by Bryson J. in D & J Constructions and by Rourke J. in Magro, and indeed also by Wilczek J. in the present case.
55.Before leaving these authorities, reference should also be made to the views expressed by Mullane J. in Griffis as to what degree of proof of the passage of confidential information a former client has to establish in order to have that information protected. His Honour’s view, relying again on Mills and Thevenaz, was that the client need only prove “a prima facie case as to confidential material, the disclosure or use of which by the solicitors in the course of the conduct of the current proceedings for the present client would be prejudicial to the applicant”. His Honour’s reasons were as follows (at 78,600-78,601):
“There was another important point made by the Queensland Full Court in the decision of Mills v Day Dawn Block Gold Mining Co Ltd. As to proof of the confidence, their Honours (at page 63) took the view that where there was a conflict between the solicitor and former client as to whether a confidence had been imparted, if the judges:
“. . . were to insist upon actual proof of the existence of such confidence and to insist upon knowing what it was and whether it was likely to prejudice a client's interests, they would compel him to strip himself of the protection which the court usually afforded and the whole mischief he wished to avoid might arise . . . on the one side the client insisted that he had imparted confidence to Mr Marsland; and on the other side, the solicitor said ‘I have no confidence’. How could the court decide it? If they took the oath of the attorney against the oath of the client and refused the protection which the client sought, why, then, the matter might proceed, and the mischief which the client feared might arise and the court could afford no remedy. In cases of this kind less mischief would accrue through granting the protection sought than in accepting the oath of the attorney against the client. The client's interests should prevail, and the judge should refuse to determine the matter on the conflicting testimony of the affidavits.”
And: “It was not for the judge to determine the conflict of facts but that he should have decided that the client had made out a prima facie case for his protection.”
At page 64 they said “If there was any evidence of confidential communication such as there was here the court would not enter upon a judicial enquiry whether it was true or false”. The court would not ask for detailed disclosure where there was evidence of confidence and “[t]he court would not weigh conflicting testimony as to confidence when the client swears he has made confidential communications”.
The point did not arise in Rakusen as it was not in issue that there was a confidence which had been given to the solicitor's partner by Mr Rakusen, and which could be used to the prejudice of Mr Rakusen in proceedings in which the solicitor was acting for Mr Rakusen's former employer.
The Australian courts have not generally followed this aspect of the Mills decision. It has not usually been discussed but in the D and J Constructions case, (at page 124) Bryson J expressed reserve about such an approach.
Generally, instead of accepting a prima facie case as to the confidentiality of information the Australian courts have indulged in weighing conflicting testimony of the solicitor and his confider. The injunction proceedings have thus in many cases been a venue for the solicitor to disclose confidential information of the confider without his consent by way of establishing that such information is not, despite the general damage of its disclosure, such as would cause particular damage by use for, or disclosure to, the new client in the course of conducting litigation against the confider.
Wills, instruction sheets, tax returns, correspondence between solicitors and clients, advices to clients, advices by barristers, and statements taken by solicitors from clients or officers of client companies, have all been placed in evidence in the course of such proceedings so that the proceedings themselves become a mischief of their own in terms of solicitor/client confidences and the public policy considerations behind them. Resort has even been had to conducting proceedings in camera and confidentiality orders made in an attempt to minimise damage and prejudice to the former client from the proceedings themselves e.g. see Mallesons Stephen Jaques v KPMG Peat Marwick (at page 6).
The very nature of the proceedings and the perversity of the courts allowing the hearing of such an application to become the venue for lengthy and detailed evidence by the solicitor of information which he received in confidence, or at least the former client alleges was received in confidence, are matters which strongly support the approach of the Queensland Full Court in the Mills case and of Frederico J in Thevenaz. So do the public policies so often declared by the courts that justice must be seen to be done, and the fact that the duty of confidentiality is based in part on the need for public confidence in legal representation and the legal system.
For these reasons the court should follow the approach in Mills that the former client be required only to prove a prima facie case as to confidential material, the disclosure or use of which by the solicitor in the course of the conduct of the current proceedings for the present client would be prejudicial to the applicant.”
56.Finally in this review of the cases decided to date, we draw attention to the fact that in the unreported decision of Stewart (17 April 1997), Lindenmayer J. quoted at length from the decisions of Mullane J. in Griffis and Kossatz, and went on to accept Mullane J.’s exposition of the law. Lindenmayer J. was also prepared to follow Mills, as this extract from his judgment shows (underlining added):
“I generally agree with and adopt the analysis of the law which fell from Mullane J in those two cases, and I propose to follow it. In the circumstances of this case, it seems to me that the wife does raise a prima facie case that the solicitors have received from her, during the previous retention of them by the husband and wife, confidential information which may, even quite inadvertently, be used to the advantage of the husband or to the disadvantage of the wife in these current proceedings.
As I have said, she claims to have conveyed confidential information to Ms Maria DeDonatis in relation to a number of matters including, it would seem, her marriage difficulties with the husband, and some allegations by him of infidelity by her and, of course, there was also an involvement by the solicitors at that time in the business affairs of the parties, in the sense that they must have received some information about their general business operations and they may well have received information about the sort of work which each of the parties claimed to do in the business.
Now, all of those matters may be of some relevance, ultimately, to the proceedings in this jurisdiction. As I have said, although the essential facts are denied by Ms DeDonatis, on the basis and the decision and the dicta of the Full Court of Queensland in the Mills case, adopted by Mullane J in Griffis, I am of the opinion that it is not appropriate for me, at this point, to enter into any examination of where the truth lies or to attempt to try an issue of fact about those matters. All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that that information may be used against her, or at least to her disadvantage, in these current proceedings. Accordingly, I propose to accede to the application of the wife.”
The present case of a non-legally qualified employee
57.In the present case, had the clerk/secretary in question, Mr Pitts, been an employed solicitor, we would have no hesitation in concluding (having regard particularly to the decision in Magro where the facts were not dissimilar from the present case, and to the test as formulated by Lindenmayer J. in Stewart in the passage which we have just quoted) that it was certainly open to Wilczek J. to grant the restraining order against the wife’s solicitors.”
In the course of that decision the Full Court referred approvingly to comments in the decision of D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 which in turn referred approvingly to the decision In theMarriage of Thevenaz (1986) FLC 91-748 and said:
“…That Court took the view that restraint is justified if there is a risk that confidential communications on relevant matters have been made by the party for whom the solicitor has ceased to act, even if the risk may be more theoretical than practical. It seems natural that a particularly careful view would be taken in family law business, as such litigation tends to be about highly confidential facts and a very wide range of facts and circumstances can conceivably be relevant; the sensitivity which even the most reasonable people feel about such litigation when they are engaged in it calls for careful measures to secure not only that justice is done but also that it is apparent that it is done, an appearance which would not survive any general impression that can readily change sides.”
In McMillan the Court also referred to the unreported decision of Lindenmayer J in Stewart, a decision handed down on 17 April 1997 where His Honour said:
“I am of the opinion that it is not appropriate for me at this point to enter into any examination of where the truth lies or to attempt to try and issue a fact about those matters. All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that that information may be used against her, or at least to her disadvantage in these current proceedings. According, I propose to accede to the application of the wife.”
Submissions
I now turn to submissions made by the parties in this application.
The Independent Children’s Lawyer
As is clear from my earlier comments, the ICL opposed the husband's application.
By reference to the material before the Court in submissions the ICL’s position was there was no relationship between solicitor and client that the husband could point to.
The ICL noted that whilst the husband's position was that there was a telephone call, there was no note of such call, no file, no indication from the husband that the person he spoke to was a solicitor and the husband's own case was he went elsewhere for representation in the substantive proceedings.
The ICL’s position was even if there as a suggestion of a relationship this was not sufficient to warrant her removal.
It was submitted consistent with the authorities extracted above that the husband had not shown bias or prejudice on the ICL’s part or a fear on his part that the ICL would or had taken a negative view of him.
In summary, the ICL’s position was that whilst acknowledging there was a conversation, all the husband had shown was that he had got advice and acted on it and this was not sufficient. The ICL’s position was just speaking to someone was not sufficient to warrant her removal.
While not suggesting there was any mala fides, or delay by the husband in bringing the application nor that the children would be prejudiced, the ICL relied on the absence on the father's case of any suggestion that he feared that the ICL would be biased against him or take a negative view of him as result of that advice or that he acted on it, as determinative of this application.
Finally, the ICL noted, consistent with the authorities that the Court should not be easily disposed to accede to the application, mindful that the appointment was made and funded by Victorian Legal Aid. Here I note the comments of the Court in Lloyd at paragraph [30], FLC 93-045 at pages 87-689 to 87-690 of the CCH report:
“30. There are a number of very good reasons why, in my opinion, the Court should be slow to discharge a child representative on the basis of largely unsubstantiated complaints of one of the parties. Those reasons include:
(i) The best interests of the children have to be borne in mind. Unfortunately these children have been embroiled in the dispute between their parents for a long period of time. For much of that time they have had C as their representative who states that in her belief she has developed a good relationship with the children. That would not be surprising given the period of time that she has been representing them. Given what the children have had to endure to date, by virtue of these proceedings, it does not seem to me to be in their best interests to deprive them of a representative with whom they have built up a good relationship and introduce them to a complete stranger with whom they may or may not develop a similar relationship. In my opinion the Court should not take that step unless there is good reason to do so. No such reason is present in this case.
(ii) The Court should treat allegations of lack of impartiality with caution. To do otherwise would leave every separate representative in the perilous position of facing an application that he or she be discharged because of unfounded allegations or perceptions made by one or other of the parties. There is a need on the part of a child representative to retain his or her impartiality, that is, to be fair to all concerned. However, that does not mean that he or she must take or not take steps in the proceedings simply because one or other of the parties does or does not want her or him to take that step.
It would be an intolerable situation if a party could successfully apply to have a child representative removed simply because that party perceived that the representative was not ``on side'' or that the tide was not running in his or her favour. In my opinion, it is only in cases where actual, rather than perceived or alleged, impartiality has been demonstrated, that consideration ought to be given to removing a child representative.
(iii) There is also a public policy consideration. To date, as I understand it, the fees of the children's representative have been met by Legal Aid. As I indicated earlier in these reasons for judgment, these parties have been arguing in this Court over their children for a period approaching 6½ years. C has been involved in the proceedings for about 4½ of those years and, no doubt by virtue of that fact, has a thorough knowledge of what has gone on between the parties.
Any new solicitor appointed would have to wade through the four volumes of the Court file to acquire the necessary knowledge to adequately represent the children. That, of itself, would involve considerable expense to the Legal Aid Commission, the resources of which are finite. That is not to say that this consideration should prevail where obvious impartiality has been demonstrated to the satisfaction of the Court.”
The wife
In terms of the submissions made on behalf of the wife, as indicated earlier the wife's position was she neither supported nor opposed the husband's application.
The wife's submissions essentially pointed to the same issues identified by the ICL in submissions to which I have already referred. There was no suggestion that she or the children would be prejudiced. Nor was it suggested that there was any delay in the husband making this application or mala fides about it.
The husband
In relation to the submissions made on behalf of the husband, contrary to the submissions of the ICL, the husband said the nub of this matter turned on the inherent jurisdiction of the Court to restrain legal practitioners from acting, not any alleged partiality or bias of the ICL.
In this matter the Court was asked to draw the inference that advice had been given by someone at the ICL’s offices in the circumstances deposed to where it was not possible to find legal advice was not given by a legal practitioner. It was submitted there was sufficient to find on a prima facie basis, that there was confidential information and the risk that the disclosure of that would be prejudicial. It was submitted that the husband had acted upon this advice and that he deposed to his concern about the ICL acting in these proceedings on that basis.
The husband also relied on the decision in Mihailidis, an unreported decision of Carter J, on 6 October 2006.
In that decision the Court dealt with the power to restrain a solicitor from continuing to act and essayed the approach to be taken at paragraphs [9] to [17] of that decision as follows:
“9.Mr Testart appears on behalf of the wife and he urges me to take the approach sometimes referred to as the Thevenaz approach. That arises from the decision of Frederico J in a case of that name. It is reported in (1986) FLC 91-748. In that case, his Honour was prepared, if required, to restrain a solicitor from acting on behalf of the wife in property settlement proceedings against the husband, where that had previously been in partnership with another solicitor who had in turn handled conveyancing matters for the husband and the wife.
10.In part of his judgment, his Honour referred to the duty of legal practitioners to put at the disposal of their clients not only their skill but all relevant knowledge and to that extant, the solicitor in question was under a duty to make available to his client information which might appear from the files of the parties formerly kept by the other solicitor which were now in the possession or power of the solicitor sought to be restrained.
11.His Honour formed the view that the solicitor should not continue to act on behalf of the wife. He went on to say – and this is the particular part of his judgment which is relied upon by Mr Testart:
“It may well be that the risks were he to do so are more theoretical than practical. However, it is asserted and not contradicted that material in the files does relate to confidences exchanged in the course of the former firm previously acting on behalf of both parties and would embarrass the husband. It is of the utmost importance that justice should not only be done but should appear to be done. In the circumstances of the present case, there is a risk which may well be merely theoretical but still exists, that justice might not appear to be done.”
12.That case was amongst many other cases, both in this country and for that matters elsewhere and also in other courts which were considered by the Full Court of the Family Court of Australia in McMillan (200) FLC93-048. In McMillan, the Full Court referred to the views expressed by Mullane J in Griffis (1991) FLC 92-233 as to the degree of proof of the passage of confidential information a former client had to establish in order to have that information protected. Mullane J relied on Mills v Dawn Day Black Gold Mining Co Ltd [1882] QLJ 62 and also Thevenaz, saying that:
“The client in question need only prove a prima facie case as to confidential material, the disclosure or use of which by the solicitors in the course of the conduct of the current proceedings for the present client would be prejudicial to the applicant.”
13.His Honour’s reasons appear at p 78,600 to 78,601 and is cited in McMillan at par 555. In particular, Mullane J noted that there was yet another important point made in Mills, namely that the Full Court took the view that where there was a conflict between the solicitor and former client as to whether a confidence had been imparted, if the judges -
“…were to insist upon actual proof of the existence of such confidence and to insist upon knowing what it was and whether it was likely to prejudice a client’s interests, they would compel him to strip himself of the protection which the court usually afforded and the whole mischief he wished to avoid might arise.”
14.Accordingly, in cases of that nature, less mischief would accrue through granting the protection sought than in accepting the oath of the attorney against the client. The client’s interests should prevail, and the judge should refuse to determine the matter on the conflicting testimony of the affidavit.
15.That situation does not arise presently, as will shortly be made very clear. In McMillan at par 54, the Full Court supported the application in the family law area of the approach taken by Frederico J in Thevenaz, following Mills, which was in turn adopted by Mullane J in Griffis, and another case of Kossatz (1993) FLC 92-386. That course was also adopted by Lindenmayer J in Stewart, (17 April 1997, unreported). In par 83, the Full Court concluded that, to the extent to which it was necessary in that case, the Mills approach was to be preferred.
16.My view is that approach is also to be preferred in the present case.
17.In par 87 of McMillan, the Full Court adopted what had been said by Mullane J in Griffis, namely that the client need only give evidence that he had provided confidential information and that he need not divulge the content of that information. Proof of prejudice was not required (see par 88). I respectfully agree with that decision and those matters which bind me, in any event.”
Consideration
The Court was not referred to any authority directly on all fours with the facts of this case. However, as I made clear, Counsel in this matter referred to the decisions extracted above.
In my view the difficulty confronting the ICL's position in this matter is made clear from the extract of the authorities set out above.
The ICL’s position concentrated on a concern the husband asserted bias or lack of partiality on her part. However, at paragraph [11] in Lloyd the Court made clear that one of the grounds for the Court to consider discharging the ICL includes:
"If continuing to act would involve a breach of fiduciary duty or a conflict of interest." (emphasis added)
In this case the husband's complaint is just that. Counsel on behalf of the husband submitted to the Court (and it is not disputed) that on
2 May 2008, the husband had a problem and he sought advice from the offices of the ICL. He rang the offices of the ICL, he spoke with a man there. He told them of his concerns about the children and his situation.
He received advice and that advice was that he could over hold the children. In the circumstances, it was submitted, he was entitled to expect the nature of that advice reflected the requisite degree of confidentiality to raise concerns on his part about the ICL acting in this matter. Here the concern of the husband was having got advice and acted on, for justice to be seen to be done there must be concerns about the ICL continuing to act in this matter.What is required, in my view, is that the husband believes, not unreasonably that the information provided to him and once received upon which he acted was confidential and may be used against him.
As is clear from these reasons it was not suggested that the wife would be prejudiced or that the children's best interests would be adversely affected, were the ICL to be restrained from acting.
Ms Hughes, the husband's solicitor, deposed that as solicitor for the husband, as soon as the issue of conflict of interest was raised with her on 30 January 2009 she sought to discuss the issue with the solicitors for the wife and the ICL before making the application which was foreshadowed at the telephone mention on 3 February 2009. That telephone mention had been requested as a result of correspondence provided to the Court by the solicitors for the husband and copied to all parties in this matter.
At that telephone mention the husband was told that if there was an application to be made in relation to this matter, it should be made and it would be listed urgently before the Court given the time constraints of the pending trial.Ms Hughes also deposed that Victorian Legal Aid had advised her that upon notification that the appointment made pursuant to the Court orders needs to be transferred, they were able to do so almost immediately.
Given this, I am satisfied neither prejudice nor delay tells against the husband's application in this matter.
Conclusion
I acknowledge and accept that the Court should be slow to discharge the ICL as alluded to earlier in Lloyd.
Whilst this matter was not without difficulty, the most significant matter, in my view, is that the husband has deposed and asserts that the offices of the ICL, which is a small firm in a country town, provided him with advice, upon which he acted in circumstances where he could reasonably have assumed legal proceedings may be commenced and he was entitled to expect that that advice was confidential. Whilst he could not point to a letter of engagement or file, in my view, what is at stake is that the integrity of the legal process and the legal profession so that all parties involved in litigation may have confidence in the integrity of the legal system and the process.
In my view the justice of this matter does require that the ICL be restrained from acting. I intend to make orders in accordance with the orders sought in the husband's application filed on 4 February 2009 and I ask Counsel to bring in a minute of orders to give effect to these reasons.
I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Associate: Rachelle Lombardo
Date: 6 February 2009
0
4
1