Buckley & Buckley
[2022] FedCFamC2F 577
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Buckley & Buckley [2022] FedCFamC2F 577
File number(s): NCC 1238 of 2021 Judgment of: JUDGE BETTS Date of judgment: 7 April 2022 Catchwords: FAMILY LAW – Property proceedings – interim hearing – where the wife has been running the family business since late 2020 – where the husband was seeking that the business be transferred to him – where the husband’s solicitor filed an affidavit in respect of conversations he had with previous employees of the business in relation to the wife – where the wife now seeks that the husband’s solicitor be restrained from continuing to act for him in the proceedings pursuant to rule 27 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) – where the court must deal with the discrete issue of the restraint before any substantive issues. Legislation: Evidence Act 1995
Family Law Act 1975 (Cth), Pt VIII
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Revised Professional Conduct and Practice Rules 1995
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW)
Cases cited: Abdou & Ahmed [2018] FamCA 396
Apostilides v R (1984) 154 CLR 563
Chapman v Rogers; ex parte Chapman [1984] 1 Qd R 542 at 545
Dyers v R [2002] HCA 45
Giannarelli v Wraith (1988) 165 CLR 543
Holborow and Ors v Macdonald Rudder [2002] WASC 265
Kallinicos v Hunt (2005) 64 NSWLR
Kennon & Anor & Public Trustee of the Australian Capital Territory [2008] FamCA 919
Kooky Garments Ltd v Charlton [1994] 1 NZLR 587
Mitchell v Burrell [2008] NSWSC 772
Scallan v Scallan [2001] NSWSC 1078
Swinfen v Lord Chelmsford [1860] 5 H & M 890 at 921; [1860] EngR 838; 157 ER 1436 at 1499
Westpac Banking Corporation v Newey [2013] NSWSC 533
Division: Division 2 Family Law Number of paragraphs: 90 Date of last submission/s: 6 April 2022 Date of hearing: 6 April 2022 Place: Newcastle Solicitor for the Applicant: Byrnes Lawyers Counsel for the Respondent: Mr Bithrey Solicitor for the Respondent: Stevens Family Law & Mediation ORDERS
NCC 1238 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR BUCKLEY
Applicant
AND: MS BUCKLEY
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
7 APRIL 2022
THE COURT ORDERS THAT:
1.The Wife’s application to restrain Mr Byrnes from continuing to act for the Husband in these proceedings is dismissed.
2.The Husband’s costs of and incidental to 6 April 2022 be reserved.
3.All outstanding interim matters remain listed for hearing on 8 June 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Buckley & Buckley has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS
These reasons for judgment were delivered orally. They have been corrected from the transcript in order to make them easier to read.
OVERVIEW
These are rather bitter property settlement proceedings arising out of the breakdown of a marriage between husband and wife. The proceedings are before the Court pursuant to the provisions of Part VIII of the Family Law Act. The parties have made many allegations and counter-allegations and in the course of the litigation the Court has made various injunctions and other orders, particularly in relation to the ongoing management of a business conducted by the parties known as Company C, which is associated with a corporate entity and a family trust.
The husband has effectively been out of that business since late 2020, and the wife has been conducting it alone. Various orders have been made for the wife to pay the husband an ongoing wage from the business, as well as injunctive relief being ordered against the husband to prevent him from contacting customers and suppliers of Company C.
The proceedings had come before me most recently on 25 January 2022 in respect of further interim applications being brought by the parties. On that day, the Court set the matter down for interim hearing on 6 April 2022. Orders were made for the wife to file updated material by 21 February, the husband to do so by 21 March, and the wife having the opportunity to file any material in reply by 28 March.
When the matter came before me yesterday for interim hearing, it had originally been anticipated that the debate would be a substantive one, namely in relation to the amendment or variation of previous injunctions. The husband in particular was effectively seeking orders for the business to be transferred to him, failing which he was going to seek an order for an interim property division by way of payment of his legal fees. There were numerous other applications and counter-applications that I do not propose to further refer to at this time.
The proceedings were effectively de-railed to some extent because, the day before the hearing, the wife indicated through her solicitors that she was now seeking that Mr Byrnes, the solicitor for the husband, be restrained from continuing to act for him.
Mr Byrnes vigorously opposed any such order. Given that, obviously, this was a matter that had to be determined before any substantive issues could be dealt with, the Court effectively conducted a discrete hearing on this issue rather than dealing with the substantive applications. Those applications were adjourned to 8 June 2022.
I indicated to the parties that I would give reasons and orders in relation to the restraint application as soon as I could.
MATERIAL RELIED UPON
I have spent quite some time considering the matter overnight as well as today. I would specifically record my gratitude to both Mr Bithrey and Mr Byrnes for their helpful submissions, including taking me to what authorities they were able to locate.
In arriving at a decision, I have had regard to the matters that were submitted to me yesterday by each of the legal representatives. This has also included a consideration of the material referred to by the parties.
In particular, Mr Bithrey for the wife relied upon:
·the husband’s affidavit of 21 March 2022 in respect of the substantive interim issues;
·the affidavit of Mr Byrnes of 21 March 2022, which is the impugned affidavit that effectively gives rise to this restraint application;
·as well as rule 27 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) (“the 2015 Solicitors’ Rules”).
Mr Byrnes relied upon:
·the husband’s affidavit of 21 January 2022, particularly paragraphs 118 to 122;
·the wife’s affidavit of 21 February 2022, and particular paragraph 56;
·two (2) letters that his office had sent to the wife’s solicitors, the first being on 12 August 2021 (exhibit 1), the second on 5 April 2022 (exhibit 2).
Each of the legal representatives referred me to various authorities, and I will deal with these shortly.
RESTRAINT APPLICATION – THE WIFE’S ARGUMENT
I turn then to the argument advanced by Mr Bithrey on behalf of the wife.
As I indicated earlier, there are numerous allegations and counter-allegations in this case. One of the issues that has been raised, seemingly by each of the parties against the other party, is that the other is guilty of “running down” the business.
The husband’s affidavit of 21 March 2022 at paragraphs 97 through to 115 set out various allegations by him which go to this issue. They are set out under the heading “My concerns about the operation of the business”. What follows in those paragraphs is a number of significant allegations about the wife’s alleged mismanagement of the business, one particular complaint being:
a very significant turnover of employees, with a number of trusted and longstanding staff members leaving. I have had discussions with a number of those staff members. A common complaint is the manner in which the applicant has treated them.
His affidavit goes on to refer to certain specific employees who he says left the employment of Company C essentially because of the behaviour of the wife, which he says was abusive and unreasonable. He gives evidence, in particular, of one of the long-term supposedly important employees having been told by the wife to “do as you are fucking told, otherwise you can fuck off”, as a result of which he left the employment of the business and subsequently brought an application for damages of some sort for unfair dismissal. He says that this application was successful, although the evidence is fairly vague about the detail of that, if not non-existent.
The husband specifically refers to four (4) employees who he says left Company C in early August 2021. He does not give particular details as to why those employees apparently left, but, given the content of his affidavit generally, the only reasonable inference is that they left because of the wife’s abusive behaviour or mismanagement of the business. He merely names the staff and does not give any particulars as to the circumstances of why they left, but, as I indicate, the only inference is that which I have already set out.
In support of that proposition, and perhaps by way of further corroboration of what the husband said, Mr Byrnes swore and filed the affidavit of 21 March 2022, which has effectively given rise to the present application.
Mr Byrnes’ affidavit sets out what he says were his own discussions with three (3) of those four (4) employees who left in August 2021. Mr Byrnes deposes that he spoke to them on 10 August 2021, and he sets out the essence of what each of them said to him about the wife’s management of the business.
In a nutshell, he says that Mr D, who had recently left the business, told him that the wife was:
running the joint into the ground. If Mr D [the husband] ever takes over again, he is going to have to fix up heaps of problems. She is a man-hater and it’s become a really bad place to work. It was so much different when Mr D was there – he’s a top bloke. Now everyone is miserable.
Mr Byrnes says that another employee, Mr E, said to him on the same day by telephone words to the effect of:
So Ms Buckley [the wife] was verbally abusive. I didn’t like her attitude and I didn’t see that I had much of a future there anymore. I wanted to jump ship before it all fell over. We had been getting product from other companies and I couldn’t see how we could be making money doing that.
Mr Byrnes also deposes that he spoke to Mr F, who told him words to the effect of:
I resigned last Thursday. Ms Buckley speaks to you like you’re a piece of crap. It’s become a complete shit-fight there. I was so depressed going to work. I had no information in relation to a number of jobs even though I’d been the foreman for the last five and a-half years. The day I resigned, three other blokes quit by the time I got home. It was nothing like that when Mr D was here. The business has gone backwards at a rate of knots. There is a real toxic environment. I left because of the crap I had to put up with.
Mr Bithrey specifically refers me to rule 27 of the 2015 Solicitors’ Rules. It would be fair to say that he very much hangs his hat on this rule, which is in the following terms:
27 Solicitor as material witness in client’s case
27.1In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the Court, the solicitor may not appear as advocate for the client in the hearing.
27.2 In a case in which it is known, or becomes apparent, that a solicitor will be required to give evidence material to the determination of contested issues before the Court the solicitor, an associate of the solicitor or a law practice of which the solicitor is a member may act or continue to act for the client unless doing so would prejudice the administration of justice.
Mr Bithrey contends that the affidavit of Mr Byrnes is corroborative, or attempts to be corroborative, of the husband’s allegations as to the wife running down the business, particularly by her alleged mistreatment of employees. This in turn is evidence in support of the husband’s application that in the interim he should be taking the business back over as he seeks.
Mr Bithrey submits that rule 27.1 is absolute in its terms, and that Mr Byrnes would appear to be plainly in breach of it in conducting the interim hearing himself in circumstances where his own affidavit deposing to these conversations is in evidence.
But the relief sought by the wife goes further than this. She seeks that Mr Byrnes be restrained from continuing to represent the husband generally. In that sense, rule 27.2 is obviously clearly engaged, and on one view, it is the more significant of the two rules for present purposes.
Mr Bithrey contends that Mr Byrnes is in the uncomfortable - if not impossible - position whereby:
·he is giving evidence on behalf of his client; and
·can on the one hand be called to provide notes of the phone calls in question;
·while on the other hand being entitled to claim privilege in respect of such notes on the basis that he has prepared them as part of running the husband’s case as his legal representative.
Mr Bithrey contends that this is the mischief – or at least one of the mischiefs – sought to be avoided by rule 27, particularly rule 27.2.
RESTRAINT APPLICATION - THE HUSBAND’S ARGUMENT
In response, Mr Byrnes contends that the application to restrain him was brought simply for the purposes of prolonging or delaying the hearing of the substantive application proper. He contends that the restraint application has no merit.
He says that the wife’s solicitors have been on notice as to Mr Byrnes’ conversations with these employees ever since he sent them his letter of 12 August 2021, in which he set out what they had allegedly told him. He also points to the fact that such material was repeated in the husband’s affidavit from January 2022, wherein the husband simply deposed that Mr Byrnes had told him the content of the conversations with those former employees.
Mr Byrnes observes – correctly – that on 25 January 2022 the wife’s then counsel, Mr Duane, submitted that it was entirely inappropriate that this “second-hand hearsay” be included in the husband’s affidavit. Mr Byrnes says that it was on this basis that he decided to file his own affidavit deposing directly to what the employees told him, rather than seeking to give that evidence through the husband.
Mr Byrnes also points to the distinct absence of any contrary direct evidence called on behalf of the wife. In particular, there is no evidence from any of the three (3) employees (or ex-employees) in question who Mr Byrnes spoke to denying that such conversations took place, or otherwise casting into question the reliability of what Mr Byrnes has deposed to in terms of their conversations.
In terms of a response by the wife to Mr Byrnes’ affidavit, the high water mark appears in paragraph 56 of her affidavit of 21 February 2022. She says there that Mr F in fact contacted her about coming back to work for Company C, and that Mr E did so as well.
She says that Mr F ultimately obtained employment elsewhere, but did send her a message to the effect of:
Thanks for everything, but I’ve got another job. I hope everything goes well for you.
As for Mr E, she says that he has in fact returned to work for Company C where he has commenced working in the products crew.
By inference, the wife is suggesting that things cannot have been as bad as even Mr F or Mr E have told Mr Byrnes because each of them was willing to go back to work for her, and Mr E in fact did so. But it is notable that there is not a specific denial of those conversations with Mr Byrnes, and that is the point which Mr Byrnes raises in saying that there is no contrary evidence. He also makes the submission – which has some force – that the wife has had plenty of time to obtain such an affidavit from any of these gentlemen if they were going to contest the content of the conversations in question with Mr Byrnes.
Mr Bithrey contends that the “defences” raised by Mr Byrnes do not really assist him. He contends that rule 27 is a professional conduct rule, and that once Mr Byrnes gives evidence in a way captured by rule 27 – that is, evidence material to the determination of contested issues before the Court – then the rule is engaged. Mr Bithrey contends that it is irrelevant that Mr Byrnes’ letter had previously advised the wife’s solicitors about those conversations, as the conversations were not at that time in evidence. It is the Court’s duty, he submits, not to “sit idly by” and allow Mr Byrnes to be objectively in breach of rule 27.1 by conducting the interim hearing personally. Nor he submits should the Court permit Mr Byrnes to remain acting in the matter generally given that his evidence is captured by that rule.
In response, Mr Byrnes contends that it is uncontroversial and unremarkable for solicitors to file affidavit material in support of proceedings on behalf of a client, particularly at interim hearings. He contends that his evidence does not fit within the parameters of rule 27, but that even if it does then the Court ought not to make the restraining order sought by the wife, particularly in circumstances where she has been on notice for quite some time as to the content of his conversations with those employees.
THE LAW
I have found this a most interesting case. In order to arrive at a decision it is necessary to some extent to go back to first principles and to ensure that the proper legal context is borne in mind.
Firstly, as Mr Bithrey observed the Federal Circuit and Family Court of Australia Division 2, is a court of law and equity: s 10 (1) of the FCFCOA Act.
The ordinary rules of this court (“the Family Law Rules”) require that evidence be given by affidavit: rule 8.04. It is not a court in which ordinarily we have the potentially unseemly situation (or prospect) of a solicitor getting into a witness box as a witness (to give viva voce evidence) and then returning to the bar table to argue the case. This is obviously something that would be avoided.
That said, a solicitor who swears an affidavit can be cross-examined, which creates that very awkward public situation. However, at interim hearings rule 5.09(2) provides that cross-examination of a deponent is only allowed in “exceptional circumstances”.
There has not been any formal application for cross-examination at this hearing. One would think, given that the wife’s management of the business is very much in question, that cross-examination would be pointless anyway. I say that for this reason - the court is conducting an interim hearing only. It is not possible for the court to decide disputed facts.
The court exercises its discretionary powers under Part VIII of the Family Law Act, and its various injunctive powers as required, in the context of what is inevitably an abridged hearing.
In circumstances where there are disputed facts that cannot ever be resolved at an interim hearing, there is simply no value in the court permitting cross-examination. This is the nature of the interim hearing process.
It is also clear that section 75 of the Evidence Act specifically and expressly provides for parties to be able to give hearsay evidence at these types of hearings as an exception to the rule against hearsay. Section 75 of the Evidence Act provides that:
In an interlocutory proceeding the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.
In his affidavit Mr Byrnes identified the sources (ie. the relevant employees). His evidence is thus clearly admissible as an exception to the rule against hearsay. And, in that sense, there is some truth in the observation that at interlocutory or interim hearings in particular, solicitors sometimes – indeed often – provide affidavits that support their client’s case in one form or another. That is not to say that this court should “turn a blind eye” to rule 27 of the 2015 Solicitors’ Rules. But equally, it is a recognised phenomenon and one which the Legislature has expressly countenanced that hearsay evidence may be provided at an interim hearing, and in the ordinary course of events it will be quite commonplace for a solicitor to give such evidence.
This, of course, is a two-edged sword. Mr Bithrey says that because Mr Byrnes’ evidence is admissible in that form, it creates the mischief that rule 27 seeks to avoid. He contends that the evidence is material to the determination of contested issues before the court.
Very interesting questions arise about the application of rule 27.
At present I am conducting interim proceedings only. Pursuant to rule 8.14 of the Family Law Rules, a party may rely upon an affidavit filed with an application only for the purpose of the application for which it is filed. That is to say, the husband could not rely upon Mr Byrnes’ affidavit at a final hearing. It would be quite improper to enable him to do so. The evidence would at such hearing be plainly inadmissible hearsay. It could not assist the Court. No attempt would be made to rely upon that affidavit.
This feeds into the larger question in this case. The proceedings involve questions, ultimately, as to what would be a just and equitable property division. The conduct of each party vis-à-vis the business, and relevantly for present purposes the argument that the wife has “run it down”, are all matters that will have to be determined at a final hearing on admissible evidence, and upon the testing of such evidence in the normal way.
Mr Bithrey says that that does not really matter because for present purposes the Court has before it an interim application only, and that Mr Byrnes affidavit is admissible on that basis, and logically it was only filed in support of the husband’s application because it was intended to corroborate his interim case.
What jurisdiction then is the Court exercising in considering this application?
Plainly, I am not strictly bound by rule 27 of the 2015 Solicitors’ Conduct Rules. I do not sit as the Legal Services Commissioner. I am not hearing a disciplinary or ethical complaint per se.
The question for the Court is whether it should exercise its inherent jurisdiction to restrain Mr Byrnes from acting for the husband. A leading authority – if not the leading authority – is the decision of Brereton J in Kallinicos v Hunt (2005) 64 NSWLR at page 561.
There his Honour set out the relevant principles at paragraph 76 of the judgment. These are, in a nutshell:
(a)the Court retains an inherent jurisdiction to restrain a solicitor from acting in a particular case as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice;
(b)the test to be applied is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting in the interests of the protection of the integrity of the judicial process and due administration of justice, including the appearance of justice;
(c)the jurisdiction is to be regarded as exceptional and is to be exercised with caution;
(d)due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause;
(e)the timing of the application may be relevant in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.[1]
Put shortly, Brereton J has propounded an objective test for the Court to apply.
Brereton J referred to rule 19 of the Revised Professional Conduct and Practice Rules 1995 (“1995 Solicitor’s Rules”), which was in similar, but not identical, terms to the 2015 Solicitor’s Rules. Rule 19 reads:
(19) Practitioner a material witness in client’s case.
A practitioner must not appear as an advocate and, unless there are exceptional circumstances justifying the practitioner’s continuing retainer by the practitioner’s client, the practitioner must not act, or continue to act, in a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence material to the determination of contested issues before the Court.
His Honour was of the view that the solicitor in that case would be a material witness on issues of substance which were controversial, and in respect of which questions of credibility and integrity – not necessarily his own – were likely to arise.
Brereton J was of the view that a fair-minded, reasonably informed member of the public would conclude that the independent objectivity of the solicitor in that case was compromised by conflicts between his obligations of loyalty to a client, and his role and knowledge as a witness of material facts, as well as a potential personal interest. His Honour said:
Although I do not think that fair-minded and reasonably informed members of the public conceive that legal representatives are entirely impartial, as most would see them as aligned with the parties whom they represent, and while it needs be borne in mind that the alternative to legal representation is self-representation, in which case none of the controls which legal representation imposes on the conduct of litigation would apply, nonetheless, fair-minded and reasonably informed members of the public expect that lawyers will provide advice to their clients and conduct litigation in which they act free of and unaffected by any personal interest in the outcome.
Brereton J did ultimately restrain the party’s legal representative from continuing to act in that case, making the observation that:
It is generally undesirable for a practitioner who is aware that he is likely to be called as a witness other than in relation to formal or non-contentious issues to continue to act. If a practitioner’s credibility is at stake as a witness, his 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.
Mr Byrnes took me to a decision of Faulks J (as his Honour then was) in Kennon & Anor & Public Trustee of the Australian Capital Territory [2008] FamCA 919. In that case, Faulks J was asked to make a similar restraint against a solicitor who represented the Public Trustee in a case in which the husband had seemingly been killed, and where it was suggested that it was possible that the wife and/or her mother had some complicity in the killing. The solicitor in question had allegedly overheard a conversation said to be potentially relevant to the killing (or alleged killing) although there was some dispute between that practitioner and the wife’s practitioner as to exactly what had been said.
The solicitor for the Public Trustee was going to be giving evidence before the Coroner’s Court. In that particular case it was submitted that the solicitor’s involvement as a witness in the case may result in a perception that he would be driven by personal convictions about the wife and/or her mother’s involvement in the husband’s death, that is to say, he would not be independent and impartial and objective in acting on the Trustee’s behalf in representing the husband’s estate in the family law proceedings.
Faulks J referred to Kallinicos v Hunt. His Honour also referred to a similar provision in the 2007 Legal Profession (Solicitors) Rules, the provision being in much the same terms as rule 19 referred to by Brereton J.
Faulks J noted that the rule was not directly binding on the Court, which observation I have already made in the present case. His Honour went on to say at paragraph 22:
A reasonable and objective observer would be concerned in the ordinary course of events, if a solicitor were to be a witness in a proceeding before the Court and continued to act for the person involved. However, even that must be subject to qualification. For example, if the solicitor were to be called to give evidence that he or she had formerly witnessed a document that had been executed in the proceedings, it would be, in my opinion, absurd to suggest that the solicitor could not thereafter continue to act, notwithstanding that he or she had been a witness in the proceedings. On the other hand, if the solicitor had been a direct witness relating to a primary matter relating to the establishment of the issues in dispute before the Court, it would be a matter of some concern in the administration of justice, adopting the phrase used by his Honour Brereton J, that a primary witness should also be acting for one of the parties and there may be a concern that his or her objectivity would be in question. Again, a matter of circumstances.
Certainly, in that case his Honour did not consider that the concerns raised about the Public Trustee’s solicitor warranted the imposition of a restraint.
In Abdou & Ahmed [2018] FamCA 396, a decision referred to by Mr Byrnes at some length, his Honour Foster J very helpfully reviewed the relevant authorities, particularly in paragraphs 18 through to 32 of his Honour’s judgment.
In that particular case the wife sought the restraint of the husband’s solicitors in circumstances where the solicitor in question had been a mutual friend to both parties. After referring to various authorities, including the decision of Brereton J, his Honour went to make these observations:
20.In Holborow and Ors v Macdonald Rudder [2002] WASC 265 at [27] his Honour EM Heenan J said:
27.Concurrently with the obligations to the client will be the practitioner’s obligations to the Court which have been described as an “overriding duty” – per Mason J in Giannarelli v Wraith (1988) 165 CLR 543 at 555, where the Chief Justice cited a passage from the judgement of Pollock CB in Swinfen v Lord Chelmsford [1860] 5 H & M 890 at 921; [1860] EngR 838; 157 ER 1436 at 1499. Mason CJ went on to expound the nature of counsel’s obligation to the Court in a manner which is germane in the present case, not only because it identifies the duties owed by a legal practitioner conducting litigation but because it also emphasises how the forensic conduct of litigation must necessarily be left to the discretion of the legal practitioners representing them largely, if not completely, free of simultaneous supervision by the Court itself…
…This is why our system of justice as administered by the Courts has proceeded on the footing that, in general, the litigant will be represented by a lawyer who, not being the mere agent for the litigant, exercises an independent judgement in the interests of the Court.
21. Heenan J then importantly then went on to say:
33.If there are circumstances which are likely to imperil the discharge of these duties to a Court by a legal practitioner acting in a cause, whether because of some prior association with one or more of the parties against whom the practitioner is then to act, or because of some conduct by the practitioner, whether arising from associations with the client or a close interest which gives rise to the fair and reasonable perception that the practitioner may not exercise the necessary independent judgement, a Court may conclude that the lawyer should be restrained from acting, even for a client who desires to continue his service [citations omitted].
….
23.In Mitchell v Burrell [2008] NSWSC 772 Brereton J observed, after finding that the solicitor may be a witness and that his evidence might be controversial:
20.That said, I do not accept that the mere circumstance that a solicitor will be a material witness, even on a controversial matter, of itself justifies restraining the solicitor from continuing to act. As Windeyer J pointed out in Scallan v Scallan [2001] NSWSC 1078, it is, for example, not unusual for instructing solicitors in contested probate proceedings to give evidence of facts relevant to instructions for and execution of a will. Similarly, in contested conveyancing proceedings, it is not unusual for solicitors who have acted on the conveyance to continue to act in the proceedings for specific performance or rescission and to give evidence in those proceedings. Accordingly, despite rule 19 of The Law Society of New South Wales Professional Conduct and Practice Rules, which imposes a professional obligation (as distinct from a private right), I do not accept that in every case where a solicitor acting for a party is a material witness even on a controversial matter, the Court will restrain the solicitor from continuing to act. Although some observations of Campbell CJ in Chapman v Rogers; ex parte Chapman [1984] 1 Qd R 542 at 545, may go somewhat further, the cases indicate – as Campbell CJ did in that case itself – that the line is crossed only when the solicitor has a personal stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees for acting, albeit that the relevant stake may not necessarily be financial, but involves the personal or reputational interest of the solicitor, as will be the case if his or her conduct and integrity come under attack and review in the proceedings. The presence of such circumstances will be a strong indication that the interests of justice – which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests – require the lawyer to be restrained from continuing to act.
21.The point is illustrated, in Windeyer J’s judgment in Scallan (at [10]), by his Honour’s reference to the difference between the case where the (mere) interest of a solicitor is one that arises simply in supporting the success of his or her client (for example, in connection with advice about discovery or the commencement or continuation or abandonment of proceedings), and the case where the solicitor has an interest in the result of an action “additional to his interest in doing his best for a client to have success in an action”. Similarly, in Kooky Garments Ltd v Charlton [1994] 1 NZLR 587, Thomas J recognised the distinction between the situation where solicitors were, in effect, called on to defend their own actions or advice on the one hand – in which case it was inappropriate that they act – and other cases (at 589-590):
What I have said, of course, does not apply where the evidence given is unrelated to liability or the question in dispute. Advising a client to prosecute or defend a claim does not attract these observations. They are restricted to the situation where the acts or omissions of the solicitors are an integral part of the other party’s complaint, or the client has been sued in circumstances where he or she was acting on the advice of their solicitors and it is effectively that advice which is in issue. In such cases, apart altogether from the position of the client, the Court is not receiving the assistance of counsel who are observably independent. Independence is a function of counsel. The Court is entitled to assume that solicitors and counsel appearing before it possess that independence.
I should add as well, by way of a fuller extract from the above-quoted decision of Campbell CJ in Chapman v Rogers (supra), that his Honour held that where a solicitor’s personal or reputational interests were challenged, then this was:
a strong indication that the interests of justice – which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests – require the lawyer to be restrained from continuing to act.
In Abdou & Ahmed (supra), Foster J also referred to the decision of Pembroke J in Westpac Banking Corporation v Newey [2013] NSWSC 533 at para 22 wherein Pembroke J said:
The law and lawyers would be held in disrepute if judges acceded too readily and too often to such applications. Before doing so, there must be some realistic sense of impropriety about the circumstances; something that sensibly justifies the conclusion that unless an injunction was granted, the integrity of the judicial process would be impaired.
WEIGHING UP THE COMPETING ARGUMENTS & CONCLUSION
In this case Mr Byrnes has given evidence entirely composed of hearsay statements allegedly made to him by employees – or former employees – of the family business. I have already indicated that it will not be possible for me, nor appropriate for me, to even attempt to resolve that factual issue on the hearing of the interim application.
Moreover, the husband has himself given detailed evidence which goes to those issues. In that sense, Mr Byrnes’ evidence might legitimately, but inelegantly, be labelled as some “icing on the cake” rather than the actual cake itself. Mr Byrnes fleshes it out in an entirely hearsay way so as to further buttress the husband’s case.
The evidence set out by the employees in Mr Byrnes’ affidavit is replete with, if not entirely composed of, opinions. Its weight would be almost zero. The affidavit does not go into any detail that would be of any material assistance to the Court.
The only proper course, if such evidence was to be relied upon at a hearing, would be to adduce evidence from the employees themselves, which Mr Byrnes has not done.
Ought Mr Byrnes now, having put that evidence before the Court, be obliged to withdraw from the proceedings altogether? This is, in my view, an extraordinarily long bow, particularly in circumstances where Mr Byrnes himself has offered to withdraw reliance upon the affidavit so as to avoid the argument altogether.
Mr Bithrey refers me to an authority of the High Court of Australia in Dyers v R [2002] HCA 45, specifically referring me to some observations made by Callinan J. This was a case involving an appeal against conviction in the District Court, and it related specifically to the prosecutorial duty to ensure that all proper relevant evidence was either called at trial or at least made available to the defence.
At paragraph 117, Callinan J referred to the High Court decision of Apostilides v R (1984) 154 CLR 563, which I will not set out in detail here. And at paragraph 118 his Honour observed that in the context of evidence that was “material” in a prosecuting context, that the term “material” should not be given any narrow meaning; a witness will not cease to be material merely because he or she is a witness to a relevant circumstantial matter or event. Callinan J effectively said that the Court should take a broad view of “materiality” and that all the available admissible evidence which could reasonably influence a jury on the question of guilt or otherwise of an accused is capable of answering the description “material”.
As I observed to Mr Bithrey in the course of submissions, the administration of criminal justice must necessarily attract the highest standards given the law’s reluctance (or repugnance even) at seeing the conviction of a person who is innocent or potentially innocent. Indeed, the 2015 Solicitor’s Conduct Rules contain an express duty on a prosecutor, set out in rule 29, which includes disclosing to the opponent as soon as practicable all material available to the prosecutor or of which the prosecutor becomes aware which could constitute evidence relevant to the guilt or innocence of the accused other than material subject to statutory immunity, unless the prosecutor believes on reasonable grounds that such disclosure would seriously threaten the integrity of the administration of justice or the safety of any person.
Put shortly, I consider that the obligations on a prosecutor in a criminal context are not necessarily analogous to these proceedings. That is not to say there may not be some overlap, but I do not consider that criminal law authorities can simply be applied in this way.
To restrain Mr Byrnes from continuing to represent the husband in this high conflict case which has progressed some way through the Court system – fairly bitterly all the way – would be a very serious step, particularly in circumstances where he is willing to and able to retract reliance on an affidavit:
·that is admissible at best only on an interim hearing, where it carries limited, if any, weight in relation to issues that I am unable to make a finding about;
·particularly also in circumstances where that evidence is strictly inadmissible at trial.
I do not consider that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice require that Mr Byrnes be prevented from acting. I do not consider that in the circumstances of this case he has, by reason of that affidavit alone, any personal or relevant personal connection with the case, at least on the state of the evidence at this point in time.
I do not see his personal or reputational interests as being at stake in the way identified in Kooky Garments (supra). For that it is worth, I would add that there is no directly contradictory evidence to that given by Mr Byrnes. If for instance the wife had an affidavit from one of the three employees or ex-employees to the effect that they had been completely taken out of context by Mr Byrnes, or that he had acted in some bullying or otherwise inappropriate way towards them – and I do not suggest for a moment that that is so, I merely give it by way of a hypothetical – then other questions might arise. But that is not the case here.
I do not consider that Mr Byrnes is in a situation where there is a relevant conflict of interest.
In that regard, I accept as a general statement that it is the objectivity of the legal representatives which is of most concern to the Court in the context of the exercise of the Court’s inherent jurisdiction. The issue, in many ways, is really one of conflict of interest. I do not consider that in merely reciting some entirely hearsay statements that Mr Byrnes has in any way crossed the line in that respect.
It is an exceptional jurisdiction that the Court is asked to exercise, and to deprive the husband of Mr Byrnes’ representation at this point in time would be a very serious matter. I do not consider that it is appropriate for me to grant the relief sought by the wife.
Having said those things, and perhaps as much by way of postscript as anything else, it may be the case that in relation to rule 27.1 of the 2015 Solicitor’s Conduct Rules, that if Mr Byrnes relies upon that affidavit he may fall foul of that rule. The 2015 Solicitor’s Conduct Rules and their predecessors are clearly designed to facilitate the efficient administration of justice and to avoid other particular difficulties.
It is not a matter that directly concerns this Court because, as I indicated earlier, it is not my role to sit as the Legal Services Commissioner, nor is this a disciplinary proceeding.
I do not consider that it is appropriate for me to restrain Mr Byrnes from conducting the interim hearing itself in circumstances that I have outlined herein. Having said that, it is entirely a matter for him whether he wishes to take the risk of disciplinary complaints and, given the circumstances that I have set out in these reasons, frankly, I can see no advantage to anyone in Mr Byrnes even relying on that affidavit. He made the offer to retract the affidavit at the outset of the hearing, and his offer was refused, or regarded as an insufficient answer.
I am not going to hear the costs application today, because I think, to be fair, you need to see the written reasons. I will have the reasons taken out. We are all going to be back in Court on 8 June 2022, so I will deal with any costs applications then.
I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 5 May 2022
[1] As to the last point referred to be Brereton J, no real issue arises in this case. The wife has taken objection at the earliest possible opportunity, and I indicated to the parties that no waiver or other related timing issue arose
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