Camp and Pace
[2009] FMCAfam 1460
•16 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CAMP & PACE | [2009] FMCAfam 1460 |
| FAMILY LAW – Practice & procedure – solicitor – conflict of interest – potential pecuniary interest in matrimonial property proceedings – proposal for solicitor to acquire for no consideration matrimonial property – interests due administration of justice – solicitor restrained from continuing to act. |
| Legal Profession (Solicitors) Rule 2007, rr.9, 13.4 |
| McMillan & McMillan [2000] FamCA 1046 Chapman v Rogers ex parte Chapman [1984] 1Qd R 54 Tsutomo Yamaji and Caysand; Caysand [1993] FCA 253 Lester & Ors v Lester Ors [2007] SASC 298 Pearlbran & Anor v Win Mezz No. 19 Pty Ltd & Anor [2009] QSC 292 Watkins v Christian [2009] QCA 101 Mitchell v Burrell [2008] NSWSC 772 |
| Lawyers' Professional Responsibility Fourth Edition by Gino Dal Pont, Lawbook Company of Australia |
| Applicant: | MS CAMP |
| Respondent: | MR PACE |
| File Number: | BRC 6284 of 2009 |
| Judgment of: | Demack FM |
| Hearing date: | 10 December 2009 |
| Date of Last Submission: | 10 December 2009 |
| Delivered at: | Brisbane |
| Delivered on: | 16 December 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms Carew |
| Solicitors for the Applicant: | Cassandra Pullos Lawyers |
| Counsel for the Respondent: | Mr L |
| Solicitors for the Respondent: | [J] & Co Lawyers |
ORDERS
Mr J and [J] & Co Lawyers cease to act as the solicitors for the respondent husband herein, and that [J] and Co Lawyers take steps to withdraw as solicitors on the record within fourteen (14) days of today.
That the matter be set down for final hearing for not more than three (3) days commencing at 10.00am on 26 May 2010 in the Federal Magistrates Court of Australia at Brisbane.
That the applicant pay any hearing fee or seek a waiver of the fee no later than 4.00pm on 14 April 2010.
That each party file and serve on each other party no later than 4.00pm on 28 April 2010:
(a)one affidavit setting out any further evidence in chief; and
(b)one affidavit of each witness intended to be relied upon at trial.
That each party file and serve any affidavit strictly in reply only no later than 4.00pm on 5 May 2010.
That each party file and serve on each other party no later than 4.00pm on 20 May 2010, a case outline setting out:
(a)a precise minute of the final orders sought;
(b)a relevant chronology;
(c)a list of affidavits and applications and/or responses (where appropriate) intended to be relied upon at trial;
(d)a list of assets and liabilities that make up the property pool; and
(e)a statement of evidence which they say supports the principles contained in section 79(4) and 75(2) of the Family Law Act 1975.
That no party shall be entitled to rely on any affidavit material not filed and served in accordance with these directions without leave of the Court first had and obtained.
That wife’s costs be reserved.
IT IS NOTED that publication of this judgment under the pseudonym Camp & Pace is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 6284 of 2009
| MS CAMP |
Applicant
And
| MR PACE |
Respondent
REASONS FOR JUDGMENT
This is an application on behalf of the wife in property adjustment proceedings seeking orders, as I would understand it, in the alternative. The order that she primarily seeks is that the husband's current solicitor cease to act or an injunction issue restraining him from acting. I would understand her alternate position to be that the husband's solicitor,
Mr J, not acquire any interest in the practice [P] Solicitors, nor any of the clients or former clients of the said practice.
The parties were married in 1994 and separated on a final basis on 22 November 2008. On 17 July 2009 the wife made an application in this court for final orders with respect to property adjustment. The husband is the respondent to those proceedings. The matter has, thus far, proceeded in the usual course. A conciliation conference was listed. The parties were unable to resolve the matter at conciliation conference and on 10 December 2009 the matter was otherwise before me for what would have been trial directions in the usual course. The day before 10 December, the wife brought an application in a case seeking, in part, the orders which I am presently determining.
On 10 December, other orders were made with consent with respect to the further mechanisms required for the conduct of the proceedings. I advised the parties that I would give them a trial date, although I note that I have not yet done that and I will ask the practitioners to remind me at the conclusion of these reasons to revisit that issue.
The basis for the application brought by the wife requires some background facts being placed on the record.
The wife is in her early 60s, as is the husband. The husband is a legal practitioner in the state of Queensland and has acted as a solicitor in [H], the town where the parties had been living. He had a firm in his own name, [P] Solicitor. Its work was predominantly Legal Aid crime and it is said that about 95 per cent of the worked on files came from Legal Aid and were criminal law matters. During the latter part of the relationship, the wife was the practice manager for [P] Solicitor.
The firm employed a minimal number of staff, including professional staff. Its annual turnover was over $300,000 but less than $400,000. The particulars for the husband post separation have included that he has required surgery on his back, which meant that he was unable to work from a time in September this year through a time in early November this year. During that time the firm got in a locum. The firm's turnover is not high and Mr Pace formed the view that the firm had difficulty in affording a locum on any long-term basis. Mr Pace, it would seem, through correspondence, was also finding the matrimonial property adjustment proceedings emotionally stressful.
In late October 2009, Mr Pace receives, he says wholly unsolicited, an offer to be the principal legal officer for the [A] Legal Service (“[A]”) in [M]. He formed the view that he would like to take that work and to leave [H] and move to [M].
What then to do with [P] Solicitor. The firm was housed in a piece of real property, which is matrimonial property. The firm was paying rent to the parties. The level of rent paid did not cover the mortgage payments on that piece of real property. The piece of real property is not zoned commercial. The parties were paying above, it would seem, what the property would receive for domestic purposes. It would appear that some alterations would be required to the property for it to be able to be zoned as commercial property. There is a shortfall on a weekly basis between what [P] Solicitor was paying for the property and the mortgage. That shortfall is a matrimonial debt.
Because the legal practice is predominantly files owned by Legal Aid Queensland, because also the firm merely took space which was owned by the parties and there is, as I understand it, no formal lease in place, and because the firm otherwise, in the view of the husband, had no particular assets, the husband formed the view that any value that should be ascribed to [P] Solicitors was minimal at best. The husband formed the view that he could, it would seem, walk away from the practice, but that it would be preferable if somebody took over the practice to some extent.
On 15 October 2009 the wife's solicitor wrote to the husband's solicitor. Within that letter, the following was said:
If it is indeed the fact that the practice is “experiencing serious financial difficulty" - - -
Those words being in quotes.
- - - as referred to in paragraph 11 of your client's affidavit, and that your client is "presently experiencing what I consider to be a serious financial difficulty, and unless I gain the relief that I seek in this application then I expect to be forced to close my business and cease trading as [P] Solicitor in the not too distant future" then it is our client's view that the practice should be immediately placed on the market for sale by whatever means conveniently available or that consideration be given to closing the practice and selling the work in progress to another lawyer in [H] who might be interested in buying the files.
On the next day the husband's solicitor wrote to the wife's solicitor and said, in part:
It is absolutely absurd that your client should state that our client's practice should be immediately sold.
And later on he said in that same fax:
Our client is taking perfectly sensible and justifiable steps to ensure that his legal practice remains operating through this difficult time. It is a temporary situation that will be fully remedied on the sale of the properties and our client resuming work. It seems that your client is intent on causing our client unnecessary financial hardship, which he finds both malicious and distasteful.
Those letters were written and exchanged before the husband received his offer of work for [A] in [M]. They were also received at a time when the husband, because of his back surgery, was unable to work. It is clear from what happened later that the husband had then formed the view that he needed to dispose of the practice.
On 24 November 2009 the solicitors for the wife asked the husband to provide, as a matter of urgency, details as to whether or not he had sold his practice, seeking a copy of the contract and the details of sale and if the practice had not been sold, advice as to how the husband intended to deal with the practice and raised the issue of the rental to be paid for the business premises and the like.
On 24 November 2009 the solicitor for the husband wrote back to the solicitor for the wife. He said, in part:
We confirm that our client has not sold his practice nor has he sold his files as they are not his to sell.
Our client has requested that this firm will take the conduct of his files with the approval of Legal Aid Queensland and utilize the premises at Property F should we require. We confirm that it is our intention to do so. We are presently in discussions with our client concerning this firm taking over [P] Solicitor. There is no consideration for us doing so.
On the next day, 25 November 2009, the wife, through her solicitor, wrote back to the husband's solicitor saying that she did not consent to such a process.
On 27 November 2009, the husband's solicitor wrote back to the wife's solicitor saying that he would not take any further steps unless notice was provided to the wife.
On 7 December 2009, the solicitors for the husband advised the solicitors for the wife by facsimile received at the end of the day:
We confirm that we hold instructions to inform you that our client has entered into formal discussions with this firm regarding this firm taking over our client's legal practice.
At this stage our client proposes that our firm take occupation of the Property F premises at last in the short term. It is proposed that rent be paid in the sum of $300.00 per week, to which will be paid directly to the loan account in respect to the property. Our client will ensure that the balance of the monthly interest payment in respect to the property will be paid and kept up to date.
It is proposed that this firm take whatever steps necessary to have our client's files transferred to this firm, which will become [J] Lawyers and trade under that name.
There will be no consideration paid for the practice however, our client may be agreeable to a nominal figure being placed on the business for the purpose of his family law matter with your client. In any event, and as you know, should the business be proven to be of any value then that value must be included in the property pool for the purpose of determining an equitable outcome to the parties.
On the same day, 7 December 2009, the wife's solicitors wrote back to the husband's solicitors advising that they objected to such a process and that they would be seeking injunctive relief.
On 8 December 2009 the husband's solicitors wrote to the wife's solicitors and said, in part, the following:
As you are aware, it is our client's view that the business [P] Solicitor has little or no value and in any event whatever value the business may hold cannot be excluded from the property pool.
On our client leaving the firm [P] Solicitor, he will retain all debtors and creditors to the practice. Our client in addition, will retain all liabilities including employee entitlements, the overdraft facility amount and any other debt associated to the business. The resulting net position is to be applied to the property pool for the purpose of these proceedings.
The letter also includes this:
As you know, the premises at Property F is presently zoned residential and not commercial. To date, the local authority has not issued any notices, enforcement or otherwise, in respect to the present use of the house. Should the council issue a notice, then we expect that the minimum requirement of the council would be a Material Change of Use Application. This being the case then car parking facilities and disabled access would become significant requirements at significant cost in addition to the cost of the application itself. This firm would undertake not to pursue any legal remedy against our respective clients’ (as Landlords) should the local authority order the commercial use of the house to cease on the basis of nonconformance.
And on the final page of the three page letter, the following paragraph is included:
It is our client's intention to conduct any dealings with this firm in terms of handing over his files to be at arm's length and in a completely transparent manner so as not to cause any prejudice to your client. With this in mind we are hopeful that your client will not require to seek injunctive relief and also that there is no conflict of interest on the part of this firm.
I was told from the bar table when the matter came before me on 10 December 2009 that Mr J was no longer going to be taking over [P] Solicitor, that the files for [P] Solicitor, which are Legal Aid files, would be returned to the local Legal Aid Office for them to deal with as they saw fit. Of course, the orders in the alternative sought by the wife include that Mr J not acquire any of the clients or former clients of the said practice.
It is said on behalf of the wife that the actions of Mr J are such that he may or will become a witness in the matrimonial property proceedings on a material fact. I understand that material fact to be how the asset of the parties, being the firm [P] Solicitors, was disposed of or otherwise dealt with by the husband and by his solicitor.
On behalf of Mr Pace it is said that there is no conflict between his position and his solicitor's involvement in the disposal of the business, that all issues have been resolved by Mr Pace taking a job with [A] in [M], by the Legal Aid files being returned to Legal Aid Queensland and by the real property remaining an asset of the parties.
Both parties were represented by counsel at the interim hearing. Council for the wife produced written submissions, as well as making oral submissions. Council for the husband made oral submissions.
Council for the husband referred me to the matter of McMillan & McMillan [2000] FamCA 1046, a decision of Finn, Kay and Moore JJ. McMillan & McMillan is authority for the proposition 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.
It seems to me that insofar McMillan & McMillan refers to matters which are to do with information of a confidential nature, that case is not relevant to the proceedings before me in respect of that particular proposition.
I invited counsel to provide to me, by the close of business last Friday, any further authorities which may be of relevance to the issue of a solicitor taking a pecuniary interest in the proceedings.
Counsel for the wife sent through, by the required timeframe, the following authorities, legal texts and professional rules. They were sent through to counsel for the husband at the same time. I was provided with the Lawyers' Professional Responsibility Fourth Edition by Gino Dal Pont, Lawbook Company of Australia, at page 377 and on. I was provided with rule 13.4 of the Legal Profession (Solicitors) Rule 2007. I was provided with a Full Court of the Supreme Court of Queensland decision Chapman v Rogers ex parte Chapman [1984] 1Qd R 542. I was provided with a decision of a single judge of the Federal Court of Australia Tsutomo Yamaji and Caysand; Caysand [1993] FCA 253. I was provided with a decision by a Master of the Supreme Court of South Australia, Lester & Ors v Lester Ors [2007] SASC 298 and a decision of a single judge of the Supreme Court of Queensland in Pearlbran & Anor v Win Mezz No. 19 Pty Ltd & Anor [2009] QSC 292.
The decision of the Federal Court of Australia was a decision of Drummond J in 1993. That matter referred to whether a solicitor was likely to be an important witness. At paragraph 8, Drummond J stated:
I note that the Supreme Court has disciplinary jurisdiction over practitioners, a jurisdiction over federal practitioners that is possessed, so far as I understand the position, only by the High Court. It is unnecessary for me to examine whether a court with appropriate disciplinary jurisdiction over practitioners may for that reason be in a position to issue a restraint in circumstances like the present against a solicitor on the record for one of the parties.
In that case Drummond J reached the view that in the Federal system he did not have jurisdiction with respect to matters to do with practitioners.
In the decision by Douglas J in July this year of Pearlbran & Anor v Win Mezz No. 19 Pty Ltd & Anor, as a judge of the Supreme Court of Queensland there was never any question that Douglas J had jurisdiction to attend to the questions which were before him.
In the matter of McMillan & McMillan, which is a decision, as I have earlier said, of the Full Court of the Family Court, the Full Court of the Family Court determined that the Court had jurisdiction through its control of its own procedure to restrain solicitors from acting. I cannot see that the basis which McMillan & McMillan used to restrain the solicitor in that matter gave rise to a jurisdiction which would not be open to me if there were reasons to otherwise injunct a solicitor from acting. I am of the view that I have jurisdiction to make the order which is sought.
It seems to me what I need to turn my mind to is whether this is a matter where there is sufficient evidence for me to injunct Mr J from acting. Certainly, Drummond J in the Federal Court in 1993 considered that it would be a matter, as best as I can understand his Honour's decision, for the local Law Society and, indeed, in McMillan & McMillan the court had wondered whether, in fact, it should be a matter for the Law Society before being satisfied, with reference to the other authorities, that there was jurisdiction for the Family Court to act.
I turn to the decision of Pearlbran & Anor v Win Mezz No. 19 Pty Ltd & Anor. For the submission made on behalf of the wife is that the proposed acquisition, which as it would seem clear has not come to pass, creates a direct conflict of interest in that the husband's solicitors have an interest in keeping the value of the practice low for themselves, rather than high for the parties and, further, that Mr J would also be in breach of his duty to the court in that he could not present his client's case as an independent legal practitioner if he has a direct interest in the value to be attributed to an asset to the marriage. It is also said to be the case that Mr J may become a witness in the case, given this proposed acquisition.
It is certainly the case that the Legal Profession (Solicitors) Rule 2007 contains the following two relevant rules. Rule 9:
9.1 A solicitor must not, in any dealings with a client:
9.1.1 allow an interest of the solicitor or an associate of the solicitor to conflict with the client’s interest;
9.1.2 exercise any undue influence intended to dispose the client to benefit the solicitor or an associate in excess of the solicitor’s fair remuneration for the legal services provided to the client.
9.2 A solicitor must not accept instructions to act or continue to act for a person in any matter when the solicitor is, or becomes, aware that the person’s interest in the matter is, or would be, in conflict with the solicitor’s own interest or the interest of an associate.
And at rule 13.4, under the heading Independence - avoidance of personal bias, the rules provide:
13.4 A solicitor must not unless exceptional circumstances warrant otherwise in the solicitor’s considered opinion:
13.4.1 appear for a client at any hearing, or
13.4.2 continue to act for a client,
in a case in which it is known, or becomes apparent, that the solicitor will be required to give evidence material to the determination of contested issues before the court.
I turn now to the decision of Douglas J. In the decision Douglas J had before him a position which it seems to me demonstrates that the solicitor for one of the parties would have a pecuniary interest in the matter which were otherwise the subject of litigation. There were several contentious facts which Douglas J enumerated at paragraph 13, including whether his - that's the solicitor's - control of a particular company, Boshanje Developments, where he was the plaintiff's solicitor seeking to satisfy the defendants of the sufficiency of the nine pre-sale contracts and where Boshanje Developments was the purchaser in at least three of those contracts, was properly a matter for concern by the defendants in respect of the sufficiency of those contracts. It is clear from a reading of the judgment that that is a pecuniary interest.
Douglas J had considered that the conclusions led him to form the view that the solicitor was likely to be a witness on material matters and that his evidence might be controversial, particularly in respect of the role of that development company as purchaser in a significant number of the pre-sale contracts.
Although it was submitted on behalf of that solicitor, or the client for that solicitor, that it was not clear that that solicitor would be required to give evidence as most of the relevant exchanges were in documents, his Honour found that that was not necessarily the case and that that, as I understand it, couldn't be determined at that stage in any event.
Douglas J considered that because of the matters which he'd referred to, that solicitor had a personal or reputational interest in the result additional to his interest in doing his best for his client to succeed in the action. Douglas J considered that any failure by that solicitor to give evidence and to make himself available for cross-examination in that matter in those factual circumstances would also be likely to provoke an argument that adverse inferences should be drawn in respect of his conduct of the plaintiff's case.
Douglas J referred to the matter of Watkins v Christian [2009] QCA 101, a Court of Appeal decision of Queensland, with Justice Muir setting out the relevant principles. Muir J referred to Chapman v Rogers, ex parte Chapman where Campbell CJ said:
…for the reason that it is desirable to avoid any suggestion of real or apparent conflict between the duty to the court and the obligation to the client, I consider that it is generally unwise for a solicitor, who is not himself appearing as advocate or as instructing solicitor in court, but who is aware that it is likely that he will be called as a material witness (other than in relation to formal or non-contentious issues) to continue, either personally or through his firm, to represent the client if this can be reasonably avoided.
Muir J was clear that there was no universal principle that a solicitor could not act in a manner in which it was likely that he or she might be called as a material witness. There is no principle along those lines although as rule 13, which I have earlier placed on the record, shows it would normally be inappropriate for a solicitor to continue to act for a party in litigation if he or she is likely to be a material witness in respect of a contentious matter.
Douglas J distinguished Watkins v Christian in his decision. He formed the view that there was a distinct possibility of a real or apparent conflict between his personal interest and his duty to the court and he referred to a New South Wales Supreme Court decision of Brereton J, the matter of Mitchell v Burrell [2008] NSWSC 772. The interests of justice in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests.
Douglas J went on to expand upon Muir J’s decision in Watkins v Christian and in quoting further or paraphrasing Campbell CJ he says this:
…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.
His Honour goes on to say:
The point is illustrated, in Windeyer Js 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’.
Muir J in Watkins v Christian placed firmly on the record that in that matter he wished to be quite clear that it may well turn out to be that there is a perfectly good explanation for all of the matters raised in that matter and it may well be that the solicitor's conduct will prove to be entirely beyond reproach in every way but the material that is presently available suggests that whatever the outcome might be, there is likely - indeed very likely - to be a robust attack on his credit if he enters the witness box.
Douglas J reminds the reader through his decision that there is an absolute discretion by the court in these matters and at the end of the decision in Pearlbran & Anor v Win Mezz No. 19 Pty Ltd & Anor, Douglas J considered that there was reason to injunct the solicitors there from acting. His conclusions are worded thus:
The efficacy of the solicitor's conduct as the plaintiff's solicitor, the effect of his interest in that development company and the potential relevance of his evidence to allegations that the defendants behaved unconscionably are matters in issue in this case which argue against him being observably independent to a fair minded, reasonably informed member of the public. It is necessary, therefore, in my view to prevent him and his firm from continuing to act "in order to protect the integrity of the judicial process and the due administration of justice, including the appearance of justice.
It seems to me in these proceedings the following factors are of particular relevance:
a)The relationship between Mr J and Mr Pace is one of solicitor and client. The fact that Mr Pace is himself a solicitor does not, it seems to me, materially alter the relationship between solicitor and client. Mr Pace has engaged Mr J with respect to his matrimonial property proceedings. He and Mr J have subsequently entered into very real and advanced discussions which would cause them to be involved with each other in a business sense.
b)
The conditions under which they were prepared to involve themselves in a business transaction is said by the wife to have been to her detriment. She also raises that it could have been to Mr Pace's detriment and that it would have been to Mr J's advantage. She points out that Mr J was prepared to take on
Mr Pace's name and says that that would point to some goodwill for which Mr J was paying no consideration. She points out that Mr J was prepared to move into the premises where [P] Solicitor had been operating and that the rent which he was prepared to pay was a lesser rent than what [P] Solicitor was paying and that the landlord is, indeed, the parties to the former matrimonial property proceedings. By Mr J taking over those premises for less rent than what [P] Solicitor was previously paying, increases the burden on the parties. Mr J, presumably on instructions from his client, said that his client would meet that shortfall. The wife would say that that is another indicator of a detriment to the husband.
c)
The husband says in his material that he doesn't perceive a conflict and seeks for his solicitor to remain. With respect, it seems to me that it would be an unusual circumstance for a client to say anything but that. If it was the case that Mr Pace considered there was a conflict between he and Mr J, it would be a matter between he and Mr J for him to cause to have Mr J continue to act for him. It would seem to me that in the letter sent my Mr J on 8 December 2009, which is annexed to the husband's affidavit filed by leave on 10 December 2009, the letter demonstrates an entanglement between the interests of Mr Pace and the litigation between the parties and the interests of Mr J as a prospective purchaser, for no consideration, of the practice of
[P] Solicitor. There are, set out in the letter of December 8 2009, matters which seem to me to clearly demonstrate a conflict of interest between his role acting for the husband and his duty to the court and to his client and I refer in particular to the issue to do with the residential rather than commercial zoning of the property. Further, the fact that the rent would be so much less than what the parties had otherwise paid and the terms upon which he would be prepared to take a lease.
Apart from those issues, I note that it has been said repeatedly that
Mr Pace's practice was 95 per cent Legal Aid clients in criminal law proceedings. Nobody has placed any evidence before me as to what makes up the remaining five per cent and what is to become of those clients and their files, work in progress, any moneys outstanding.
It is also clear before me that the [P] Solicitor practice has an overdraft and there is no contemplation by the solicitor intending, as he then was, to take over the practice to take on any responsibility for the overdraft.
I am also particularly concerned by the paragraph in the letter from
Mr J to Ms P that was written on 7 December which said:
There will be no consideration paid for the practice however, our client may be agreeable to a nominal figure being placed on the business for the purpose of his family law matter with your client. In any event, and as you know, should the business be proven to be of any value then that value must be included in the property pool for the purpose of determining an equitable outcome to the parties.
It would seem to me that it is wholly against the interests of Mr Pace that his place himself in a position where he was prepared for someone, without consideration, to take over his practice prior to it being valued so that the husband, at that stage, does not know what value it is that he is giving away. The husband has a view that the firm has no value. The wife has a view that the firm has some value. It would have, it seems to me, to have been prudent for the solicitor for the husband in the family law proceedings to have been advising his client that prior to disposing of the property for no consideration, that he have it valued. But the person who the husband was disposing of the business to was his family law solicitor.
For all these matters, for all of these reasons, I consider there is a conflict of interest and that that conflict of interest can only be resolved by Mr J being restrained from acting on behalf of Mr Pace.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Demack FM
Associate: E Crutchfield
Date: 22 February 2010
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