Buick and Boesten and Ors
[2013] FamCA 208
•5 April 2013
FAMILY COURT OF AUSTRALIA
| BUICK & BOESTEN AND ORS | [2013] FamCA 208 |
| FAMILY LAW – LEGAL PRACTITIONERS – conflicts of interest – application by the husband seeking that the wife’s solicitors be restrained from acting – where the wife’s solicitors had acted for the husband’s company in 1995 – where the wife’s solicitor has commenced defamation proceedings in a personal capacity against the husband in another jurisdiction – where it was found that the husband impliedly waived his right to complain about the solicitor acting by permitting the solicitors to act for the wife for an extended period of time – where it was held that the defamation proceedings would not impact upon the wife’s solicitors’ role in these family law proceedings – application dismissed. |
| Family Law Act 1975 (Cth) |
| AON Risk Services Australia Ltd v Australian National University (2009) HCA 27 Justice D A Ipp “Lawyers Duties to the Court” (1998) 114 Law Quarterly Review 63 |
| APPLICANT: | Mr Buick |
| RESPONDENT: | Ms Boesten |
| INTERVENER NO. 1: | Mr A & Associates |
| INTERVENER NO. 2: | Mr A |
| FILE NUMBER: | ADC | 3045 | Of | 2010 |
| DATE DELIVERED: | 5 April 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 22 November 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Pyke, QC |
| SOLICITOR FOR THE APPLICANT: | Martin Robinson Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Heinrich |
| SOLICITOR FOR THE RESPONDENT: | Mr A & Associates |
| COUNSEL FOR THE INTERVENERS: | Mr Roberts |
| SOLICITOR FOR THE INTERVENERS: | Mr A & Associates |
Orders
The husband’s Amended Application in a Case filed on 14 November 2012 is dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Buick & Boesten & Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 3045 of 2010
| Mr Buick |
Applicant
And
| Ms Boesten |
Respondent
| Mr A & Associates |
Intervener No. 1
And
| Mr A |
Intervener No. 2
REASONS FOR JUDGMENT
Introduction
By Application in a Case the husband Mr Buick (“the husband”) sought orders that the wife’s solicitors be restrained from acting for her. By an amended Application in a Case filed in November 2012 the husband sought orders against the solicitor and the firm and the company through which the solicitor practised, preventing them from continuing to act for the wife in these proceedings.
The wife Ms Boesten (“the wife”) opposed these orders. The solicitor and the company through which he practised also opposed the orders sought by the husband.
The hearing
At the hearing before me on 22 November 2012 the husband was represented by Ms Pyke, QC, the wife by Mr Heinrich and the second and third Respondents (the solicitor and the solicitor’s company) represented by Mr Roberts.
Relevant background
The husband filed an Initiating Application in the Federal Magistrates Court of Australia in August 2010. In that document he referred to the parties’ marriage in September 1991 and final date of separation on 14 September 2009. There are four children of the marriage. In that Initiating Application the husband sought detailed orders for settlement of property.
On 14 October 2010 the wife filed a response to the Initiating Application seeking orders in relation to the parties’ property, superannuation, spouse maintenance and a binding Child Support Agreement. The wife also sought interim orders.
At the time the response to the Initiating Application was filed, the wife’s solicitors, the 3rd Respondent, Mr A, was the solicitor for the wife.
Thereafter there were numerous interim applications filed by each of the parties.
In September 2011 the settlement of property proceedings were listed for trial before Federal Magistrate Lindsay on 9 February 2012. Five days were allocated.
On 20 December 2011 the matter was transferred to the Family Court of Australia.
By Application in a Case filed on 2 April 2012, the husband sought, inter alia, that:
The firm of [Mr A & Associates], its principals, directors, associates and employees be restrained and an injunction be granted restraining the said firm from acting for the wife in these proceedings.
In the affidavit filed in support of the application, the husband referred to correspondence of 15 March 2012 between the solicitors in which the husband put the wife’s solicitors on notice that they were claiming that the solicitor was in a position of conflict and set out the grounds at that time.
The affidavit referred to the interaction between the husband and the solicitor Mr A (“the solicitor”) commencing from “in or about 1995”. He referred to the solicitor acting for “my company [B Pty Ltd]” and to the interaction between the husband and the solicitor obtaining home loans for himself and referring clients to the husband. The affidavit also refers to the personal interaction between the solicitor and the husband.
That affidavit also sets out the circumstances in December 2009 when the solicitor commenced acting for the wife.
In that first affidavit the husband asserts that the solicitor gave him advice concerning his “forthcoming separation”.
In response to that application the wife filed an affidavit. She sets out in that affidavit filed on 26 April 2012 that “in late 2009 the husband and I agreed to separate however we did not formally separate until January 2010…”.
The wife refers to her insistence that the parties obtain legal advice. Paragraph 10 of the affidavit says that the husband made the appointment with the solicitor. Paragraph 10 reads:
The husband agreed to my request that we obtain legal advice and he made an appointment for us to meet with [Mr A] on or about 9 December 2009 to discuss separation issues and property matters (“the 9 December Meeting”).
The wife refers to never having met the solicitor before that meeting.
At paragraphs 12, 13, 14, 15 and 16 of her affidavit the wife says:
12. At some point, unknown to me, but prior to the 9 December Meeting the husband prepared a schedule of liabilities which was presented to [Mr A] and me at the 9 December Meeting.
13. At the 9 December Meeting, [Mr A] told the husband and me that he was not able to advise both of us in respect of the property settlement. He said that he could only represent one of us.
14. The husband said words to the effect “I am not fussed. I do not mind who you represent”.
15. I responded with the words to the effect “Okay I will have him ([Mr A])”. I then said to [Mr A], “You can represent me”.
16. The husband raised no objection to me appointing [Mr A].
Thereafter the wife has been represented by the solicitor.
On 3 May 2012 his Honour Justice Fowler made detailed orders in relation to interim procedural financial matters by consent, including an order dismissing the husband’s application in relation to the wife’s solicitors.
Subsequently, on 7 September 2012 the husband filed another Application in a Case in which he sought, amongst other orders, that the solicitors and any firm, with which he is associated, be restrained from acting for the wife in these proceedings. That Application in a Case was amended by the Application in a Case filed on 14 November 2012.
The solicitors and the company under which he practises, have been named as the second and third respondents. For the purposes of these reasons I shall refer to both the second and third named respondents as “the solicitor”.
Both the wife and the solicitor have filed responses to the amended Application in a Case filed by the husband seeking the dismissal of the husband’s application so far as it relates to the injunctions against the solicitor.
In support of the second application filed by the husband on 7 September 2012 the supporting affidavit of the husband refers to being a defendant in defamation proceedings which had been commenced in the District Court by the solicitor on 13 January 2012. The husband asserted that he was not served with those proceedings until 10 July 2012.
Annexed to the affidavit of the husband filed on 12 October 2012 are documents in relation to the steps taken by the solicitor on behalf of the wife to remove the husband as a director of a company in which the husband had previously represented the interests of the Buick Family Trust.
The wife’s affidavit filed on 26 April 2012 annexes minutes of the meeting of the Buick Family Trust in which it is asserted that on 7 June 2011 the minutes recorded that the husband was to be removed as director “purportedly representing the shareholder group in the company effective immediately” and that the solicitor be appointed as a director in his place “effective immediately”. The minutes also recorded that the solicitor’s firm was to give notice to C Pty Ltd of the appointment of the solicitor as the director to represent the shareholders group in that company.
Counsel however conceded that the company C Pty Ltd had not, at the time of the hearing before me, made any formal decision concerning implementation of this resolution.
Summary of submissions
Ms Pyke, QC acting for the husband referred to the various applications and supporting affidavits. It was submitted by her that the Court should take into account all of the matters which when considered together, would require the Court to find that it was inappropriate for the solicitor to continue to act for the wife in these proceedings.
Reference was made to the letter sent to the solicitor on 15 March 2012 in which the complaints were set out including that the solicitor previously acted for the husband and his company, that the solicitor had given advice to the husband in relation to the proposed separation and that the December 2009 meeting had been a consultation between both the husband and the wife with the solicitor. That letter also referred to the actions taken by the solicitor which were intended to bring about a situation where he would be a director of C Pty Ltd nominated by the Buick Family Trust. The letter noted that this would have brought about a situation in which the husband was the Chief Executive Officer of the company of which the wife’s solicitor was proposing to be a director.
Emphasis was also placed upon the defamation proceedings commenced by the solicitor in his own personal capacity against the husband resulting from comments the husband had made in communication with other parties, and in particular, the failure of the solicitor to serve the husband with the proceedings which had been filed on 13 January 2012, but were not served until 10 July 2012.
Ms Pyke, QC maintained that the solicitor would become privy to information about the husband through his role as the legal representative of the wife in the Family Court proceedings which would not otherwise be available to him. Counsel also referred to the fact that the husband lodged a complaint against the solicitor to the Legal Practitioners Conduct Board which complaint was still under investigation.
Mr Roberts, counsel for the solicitor, divided his submissions into two categories. The first related to the events which took place before the husband’s Initial Application in April 2012. The second related to the defamation action.
In relation to events before April 2012, counsel submitted that the husband had waived his right by failing to challenge the wife when she alleged that in December 2009 the husband agreed to the wife retaining the solicitor. Subsequently there has been considerable delay. Such a delay was claimed to be significant in relation to the exercise of the Court’s discretion.
In relation to the appointment of the solicitor to act as a director for C Pty Ltd (the company which employed the husband) counsel emphasised the fact that at the time of the hearing such an appointment had not been made, nor was it clear that it was likely to happen in the future.
In relation to the defamation action, counsel asserted that the onus was upon the husband to establish that the solicitor’s interest in those proceedings would prevent him from carrying out his duty to the Family Court of Australia in these proceedings between the husband and the wife. It was asserted that any advantage which the solicitor obtained from his knowledge of the Family Court proceeding was not a basis upon which to restrain the solicitor for acting for the wife in these proceedings.
Counsel provided the Court with detailed submissions concerning the law which will be dealt with subsequently.
Counsel for the solicitor submitted that it was not relevant to the Family Court of Australia proceedings between the husband and wife for the solicitor to disclose the commencement of the defamation proceedings in the District Court in January 2012 which were not served on the husband and not made known to the husband until July 2012.
Mr Heinrich, counsel for the wife, adopted the submissions of counsel for the solicitor. Counsel made reference to the significant issue of the delay between the proceedings being first commenced in August 2010 and when the issue was first raised in March 2012. The first application was dismissed by consent.
It was submitted that the wife was “an innocent party”. The Court was asked to note that the defamation action was alleged to have been brought about by the intentional and deliberate acts of the husband sending messages about the solicitor to other persons.
Counsel emphasised the extra legal fees which would be incurred if the wife were required to instruct new solicitors and the substantial prejudice and potential delay which would result.
Counsel for the wife also referred to the fact that the appointment of the solicitor as a director of the company by whom the husband was employed had not yet occurred and maintained that this was therefore irrelevant.
The Law
There was no dispute about the capacity of the Court to exercise its jurisdiction in appropriate cases to make orders restraining a solicitor from acting for a party. Substantial authorities were referred to by counsel.
The Full Court decision of McMillan & McMillan (2000) FLC 93-048 at paragraphs 54 and 56 state:
54.…To the extent that it is necessary in this case for us to express a concluded view … 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.
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, 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 facia 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 patties, 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 of time, 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 Court was also referred to the authorities, in particular, cases dealing with the inconvenience to the party if required to change solicitors (Gagliano & Gagliano (1989) FLC 92-012) and the issue of delay and its impact upon the Court’s discretion In theMarriage of McGillivray & Mitchell (1998) FLC 92-818.
Ms Pyke, QC for the applicant husband relied upon authorities set out in various pages of an article in the Melbourne University Law Review entitled “Conflicts of Duty: The Perennial Lawyers’ Tale – A Comparative Study of the Law in England and Australia”. In that article reference is made, not only to the need to protect confidential information made available to a solicitor who has formally acted on instructions from the other party, but also to the concept of administration of justice and the lawyer’s duty to the Court to act as an officer of the Court in a manner that preserves the public confidence in the administration of justice. The appropriate authorities emphasise the need for the lawyer to be in a position to act with necessary standards of independence from the parties.
At page 132 (and other places earlier in the article) reference is made to the article by Justice D A Ipp “Lawyers Duties to the Court” (1998) 114 Law Quarterly Review 63. At page 132 it is stated:
For instance, a lawyer might have a personal interest in the outcome of the proceedings, or might be likely to be called as a witness, and is consequently unable to give the court the independent and uninvolved assistance expected from officers of the court.
The duty to the court arises from the court’s concern that it should have the assistance of independent legal representation. The integrity of the adversarial system in England and Australia ‘is dependent on lawyers acting with perfect good faith, untainted by divided loyalties of any kind’.
On page 133 of the same article reference is made to the well known principle that justice must not only be done, “but be manifestly and undoubtedly seen to be done”.
Counsel for the solicitor relied upon various authorities including In the Marriage of McGillivray v Mitchell (1998) (Supra) and In the Marriage of McMillan & McMillan (Supra). I accept that the authority In the Marriage of McGillivray v Mitchell (Supra) establishes that the issue of delay is significant in the Court exercising its jurisdiction. In particular, paragraph 36 of In the Marriage of McGillivray v Mitchell (Supra) states:
It is our opinion that if a family law litigant has a genuine concern about a former legal adviser acting against him or her in later family law litigation, the litigant must take the point at least in correspondence with the other side at the earliest possible opportunity. If he or she does not do so, then he or she is possessed of a weapon which can later be used as a delaying tactic at some point in the proceedings convenient to his or her position. Furthermore a failure to take the point initially must also cast doubt on the bona fides of any later complaint concerning the existence of confidential information in the practitioner in question, and on the bona fides of any alleged apprehension regarding the possible mis-use of such confidential information.
The issue of waiver is significant when the husband was aware from a very early date that the solicitor was acting for the wife.
Counsel for the solicitor relied upon the decision of Naczek & Dowler [2011] FamCAFC 179 where reference is made to the Full Court decision of Holborow & McDonald Rudder [2002] WASC 265 in which emphasis was placed upon the comments of the Judge at first instance. The Full Court of Western Australia said at paragraphs 40 and 41:
40. His Honour went on to say, however, at paragraph 22:
However, in view of the submissions put on behalf of the defendant, it is perhaps necessary to examine them more fully.
It is upon his Honour’s analysis of the relevant cases that the applicant in this case relies. Of particular relevance to this matter in our view are his Honour’s comments, at paragraph 26, where his Honour said:
Consequently, when an application is made to restrain a legal practitioner from acting in a cause for reasons other than the risk of disclosure or misuse of information provided to the practitioner in confidence by the former client, it is of importance to identify precisely what obligation towards the former client or to the court may be breached or imperilled by the practitioner acting in the cause or against the former client. This approach is important because, otherwise, there may imperceptibly develop an expectation that the freedom of a client to engage a legal practitioner of his or her own preference, and the freedom of a legal practitioner to act even against a former client, where such a course does not involve any breach of his fiduciary obligations arising from the earlier retainer, is open to adventitious challenge as a means of harassing an opponent in a cause.
41. Further at paragraphs 28 and 29 his Honour said:
28. 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 judgment, a court may conclude that the lawyer should be restrained from acting, even for a client who desires to continue his service - Clay v Karlson (supra); Wan v McDonald (1992) 33 FCR 491; National Mutual Holdings Pty Ltd v Sentry Corp (1989) 22 FCR 209 and Afkos Industries Pty Ltd v Pullinger Stewart [2001] WASCA 372.
29. From the wider viewpoint, including the perspective of the legal practitioner's duty to the court, it can readily be perceived that this situation justifies intervention by the court because of an actual or sufficiently material threatened conflict of interest by the practitioner, as an officer bearing fiduciary obligations, between his obligations to the court, and his obligations to the client or to some other interest. So it has long been accepted that a legal practitioner, who is likely to be a witness in a case should not act as counsel, or continue to act as counsel if a situation arises where he is unexpectedly required to give evidence. The reason being is that the personal integrity of the practitioner may be put in issue if his credibility is at stake as a witness, and that this will, or may, constitute a personal interest inconsistent with the practitioner's duty to the court or to the client. Other similar conflicts of interest can arise if, for example, the counsel or solicitor had a substantial personal stake in the litigation such as, for example, if he or she were to be a partner in a firm which was a party to the litigation, or a substantial shareholder in a corporation which was a party.
(my emphasis).
Counsel for the solicitor suggested that it was necessary to identify the actual duty which the solicitor was unable to carry out. The authorities however clearly refer to the risk that there would be a perception that the practitioner may not exercise the necessary independent judgment because of the personal interest.
The Western Australia Full Court of the Supreme Court also referred to the decision of Brereton J in Kallinicos & Anor v Hunt & ors (2005) 64 NSWLR 561 in which reference was made to the Court’s inherent jurisdiction. Paragraph 61 states:
61. The duty to the court arises from the court’s concern that it should have the assistance of independent legal representation for the litigating parties. Preserving the integrity of the administration of justice, and in the appearance as well as the reality of independence, the duty underpins the court’s practical approach to its supervisory discretion: Kallinicos & Anor v Hunt & ors (supra); Fruehauf Finance Corp Pty Ltd v Feez Ruthning [1991] 1 QdR 558; Murray v Macquarie Bank Ltd (1991) 33 FCR 46; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307; Macquarie Bank Ltd v Myer [1994] VR 350; Kooky Garments Limited v Charlton [1994] 1 NZLR 587; Oceanic Life Limited v HIH Casualty and General Insurance Limited [1999] NSWSC 272.”
The relevant authorities refer to exercising caution in matters such as this.
Counsel for the solicitor and counsel for the wife both referred to the High Court decision of AON Risk Services Australia Ltd v Australian National University (2009) HCA 27 which clearly related to the Court’s discretion in applying the principles in a manner which would promote the expeditious resolution of proceedings.
Counsel for the wife also relied upon Naczek & Dowler (Supra) paragraph 62:
62. The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice: Grimwade v Meagher [1995] 1 VR 446; Holborow v MacDonald Rudder [2002] WASC 265; Bowen v Stott [2004] WASC 94; Asia Pacific Telecommunications Limited v Optus Networks Pty Limited [2005] NSWSC 550.
In the judgment of Justice Coleman in Billington & Billington (No 2) his Honour sets out significant authorities and states at paragraphs 35, 38 and 39:
35. In Pond & Thurga (No 2) [2007] FamCA 587 O’Ryan J adopted the principles emerging from the authorities which Brereton J reviewed in Kallinocos & Anor v Hunt & Ors (2005) 64 NSWLR 561. His Honour is instructive for present purposes (at 582 – 583, quoted at par 210 of O’Ryan J’s judgment), and suggests that:-
· During the subsistence of a retainer, where the court's intervention to restrain a solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court's jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting for clients with competing interests (Prince Jefri Bolkiah [v KPMG (a firm) [1992] 1 All ER 517]).
· Once the retainer is at an end, however, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) (Prince Jefri Bolkiah [supra]).
· After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention, such duty having come to an end with the retainer (Prince Jefri Bolkiah [supra]; Belan v Casey [[2002] NSWSC 58]; Photocure [ASA v Queens University at Kingston (2002) 56 IPR 86]; British American Tobacco Australia Services Ltd [v Blanch [2004] NSWSC 70]; Asia Pacific Telecommunications Ltd [v Optus Networks Pty Limited [2005] NSWSC 550] contra Spincode Pty Ltd [v Look Software Pty Ltd [2001] VSCA 248]; McVeigh [v Linen House Pty Ltd [1999] VSCA 138]; Sent [v John Fairfax Publications Pty Limited [2002] VSC 429]).
· However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice (Everingham v Ontario [(1992) 88 DLR (4th) 755]; Black v Taylor [[1993] 3 NZLR 403]; Grimwade v Meagher [[1995] 1 VR 446]; NeW Man v Phillips Fox [[1999] WASC 171]; Mitchell v Pattern Holdings [Pty Ltd] [2000] NSWSC 1015]; Spincode Pty Ltd [supra]; Holborow [v Rudder [2002] WASC 265]; Williamson v Nilant [[2002] WASC 225]; Bowen v Stott [[2004] WASC 94]; Law Society v Holt [[2003] NSWSC 629]). Prince Jefri Bolkiah [supra] does not address this jurisdiction at all. Belan v Casey [supra] and British American Tobacco Australia Services Ltd [supra] are not to be read as supposing Prince Jefri Bolkiah excludes it. Asian Pacific Telecommunications Ltd [supra] appears to acknowledge its continued existence.
· The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice (Everingham v Ontario [supra]; Black v Taylor [supra]; Grimwade v Meagher [supra]; Holborow [supra]; Bowen v Stott [supra]; Asian Pacific Telecommunications Ltd [supra]).
· The jurisdiction is to be regarded as exceptional and is to be exercised with caution (Black v Taylor [supra]; Grimwade v Meagher [supra]; Bowen v Stott [supra]).
· 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 (Black v Taylor [supra]; Grimwade v Meagher [supra]; Williamson v Nilant [supra]; Bowen v Stott [supra]).
· 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 (Black v Taylor [supra]; Bowen v Stott [supra]).
…
38. As the New South Wales authorities, and the decision of the Full Court of this Court in McMillan (2000) FLC 93-048, to which reference will shortly be made, recognise, an important aspect of the jurisdiction to restrain solicitors from acting in a particular case relates to the administration of justice, and the perception of litigants, and the public, that a client’s confidential information remains protected notwithstanding that a solicitor changes his or her employment. Objectively, where there is a risk that confidential information of a client is likely to be communicated to the opposing party, or otherwise misused, it is important that the Court intervene to prevent that happening in order to preserve the integrity of court processes and the perception that this is occurring.
39. On the other hand, as the authorities to which Brereton & O’Ryan JJ referred also recognise, regard has to be had to the impact on a litigant such as the wife in this case, who is entirely innocent in terms of the current dispute but potentially very significantly adversely impacted in financial and other ways if the application is granted.
Discussion
The husband was aware from early 2010 that the solicitor was proposing to act in the Family Law proceedings for the wife. His knowledge and failure to act until the first application was brought clearly bring into play the rules concerning waiver and the significant considerations of delay. The Consent Order dismissing the first application is also noted.
The Court however must consider the information which came to the knowledge of the husband after the dismissal of those proceedings in May 2012. Before that date the solicitor had commenced proceedings in the District Court against the husband, but the husband was not served with these proceedings until months later in July 2012.
The Court accepts that steps were taken by the solicitor to put him in a position of possibly being appointed a director of the company in which the husband is the Chief Executive Officer. However at this time these have not resulted in the actual appointment of the solicitor as a director. Although this has not happened there was no indication from either the wife or the solicitor that there was any proposed change to the application which had been made to the company. If the solicitor becomes a director of the company for which the husband is Chief Executive Officer then the risk of the solicitor being a witness in the proceedings may arise and place the solicitor at risk of being required to cease acting for the wife.
The Court was told that the husband had lodged a complaint with the Legal Practitioners Conduct Board about the solicitor. This is not a ground upon which the Court should restrain the solicitor from acting for the wife. A simple complaint being made to the Legal Practitioners Conduct Board is not evidence of any basis upon which the Court should grant the injunction.
It is significant that when the proceedings were before the Court in April 2012 the solicitor did not inform the husband or the Court that at that time defamation proceedings had been commenced in the District Court by the solicitor in his personal capacity against the husband.
This factor needs to be considered in the context of the alleged delay and the dismissal of the previous litigation.
The defamation proceedings in the District Court are based upon the communications made by the husband to other persons in which accusations are made by the husband about the solicitor which could be interpreted as the solicitor being a cheat, liar and philanderer. The appropriate Court will determine whether the remarks are defamatory. It is in this context that the husband is now seeking to restrain the solicitor (whom he has allegedly defamed) from continuing to act for the wife.
Conclusion
The Court is satisfied that the husband, by permitting the solicitor to act for the wife in the period up until March 2012, impliedly waived his right to complain about the solicitor acting for the wife on the basis that the solicitor may have confidential information, either as a result of communications from the husband or previous interactions with the husband on a professional or social basis.
It becomes necessary to determine whether the proceedings commenced by the solicitor in his personal capacity in the District Court, or being maintained by the solicitor in his personal capacity in the District Court, claiming damages against the husband for defamation, is a factor which falls within the test namely, whether a fair minded, reasonable and informed member of the public would conclude that the proper administration of justice requires that the legal practitioner should be prevented from acting in the interest for the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
That discretion is to be exercised taking into account the impact upon the wife and the disadvantage to her, both in relation to costs and her general right to choose her own lawyer.
In this case the solicitor has a personal interest in pursuing the defamation proceedings in another jurisdiction. It has not been established how this personal interest will prevent the solicitor from carrying out all his duties to this Court in the Family Law proceedings. The husband and this Court were not immediately informed of the proceedings in the other jurisdiction. However the Court does not have any other fact which would convince a fair-minded, reasonable and informed member of the public to conclude that the solicitor’s proceedings in the other jurisdiction would impact upon his role as solicitor for the wife in this jurisdiction.
Whilst there is concern about the delay in informing this Court and the husband about those other proceedings, any such concern is significantly offset by the disadvantage to the wife of substantial costs to her and the interference with her right to choose her legal representative.
The application is therefore dismissed.
I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 5 April 2013.
Associate:
Date: 5 April 2013
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