Clayton & Clayton
[2023] FedCFamC2F 1375
•6 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Clayton & Clayton [2023] FedCFamC2F 1375
File number: SYC 8412 of 2019 Judgment of: JUDGE LIOUMIS Date of judgment: 6 September 2023 Catchwords: FAMILY LAW – LEGAL PRACTITIONERS – Where the wife seeks orders restraining the husband’s solicitors from continuing to act for him – Where there was inadvertent disclosure to the husband’s solicitors of confidential and privileged communication between the wife and her solicitors – Where the husband’s solicitors failed to provide disclosure to the wife’s solicitors of the inadvertent disclosure – Where the husband’s solicitors failed to comply with rule 31 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) Legislation: Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) r 31 Cases cited: Grattan & Grattan and Anor (No. 3) [2014] FamCA 839
Osferatu & Osferatu (2015) 53 Fam LR 433
Porter v Dyer [2022] FCAFC 116
Division: Division 2 Family Law Number of paragraphs: 33 Date of hearing: 6 September 2023 Place: Sydney Counsel for the Applicant: Mr Roberts of Counsel Solicitor for the Applicant: Dimocks Family Lawyers Counsel for the Respondent: Mr Livingstone of Counsel Solicitor for the Respondent: Barkus Doolan Winning Counsel for the Independent Children's Lawyer: Ms Dalrymple of Counsel as agent Solicitor for the Independent Children's Lawyer: Farah Lawyers, Solicitors & Barristers ORDERS
SYC 8412 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CLAYTON
Applicant
AND: MR CLAYTON
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
JUDGE LIOUMIS
DATE OF ORDER:
6 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.KK Lawyers by its solicitors and employees be restrained from acting for the Respondent Father, Mr Clayton.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
INTRODUCTION
These are settled reasons for judgment that were delivered orally on 6 September 2023. Grammatical and literal errors have been corrected from the transcript for comprehension and legal references have been included.
The preliminary issue before me is the application by the wife for injunctive relief restraining the husband’s solicitor from continuing to act. At the commencement of these proceedings, I asked for submissions in relation to this issue only.
EVIDENCE
The evidence that the wife relies on is:
(a)Her Case Outline filed 4 September 2023;[1]
(b)Application in a Proceeding filed 3 August 2023 and sealed on 14 August 2023;[2] and
(c)The affidavit of the wife filed 3 August 2023, together with the annexures. Principally, I was taken to only the aspects of the affidavit that dealt with the application.
[1] The words “filed 4 September 2023” were added to this sentence when settling the reasons into written form.
[2] The words “filed 3 August 2023 and sealed on 14 August 2023” were added to this sentence when settling the reasons into written form.
The husband relies on:
(a)His Case Outline filed 4 September 2023;[3]
(b)His Response to the interim application filed 21 August 2023;[4]
(c)His affidavit filed 21 August 2023; and
(d)The affidavit of the husband filed 2 September 2023.
[3] The words “filed 4 September 2023” were added to this sentence when settling the reasons into written form.
[4] The words “filed 21 August 2023” were added to this sentence when settling the reasons into written form.
The parties were represented and made before me oral submissions. I also had the benefit of their comprehensive written submissions in their Case Outlines.
The application that I am dealing with relates to order 1 of the application of the wife sealed 14 August 2023.[5] That is, an application that KK Lawyers by its solicitors and employees be restrained from acting for the father, Mr Clayton.
[5] The word “filed” was replaced with the word “sealed” in this sentence when settling the reasons into written form for consistency with the prior description of the document in this judgment.
In this application, although the Independent Children’s Lawyer was present, they did not take part in these proceedings.
BACKGROUND
There can be no doubt that in this matter, we have a very extensive and very complicated history. There are significant allegations against each party.
Focusing on the relevant background to the wife’s application, I find as follows:
(a)That in mid-2023, the wife became aware, following discussions with the New South Wales Police, that the husband’s phone contained 175 screenshots of her diary and calendar.
(b)On 26 July 2023, the wife’s solicitor wrote to the husband’s solicitor to ask if they were privy to correspondence between the wife and her solicitors.
(c)On 2 August 2023, the husband’s solicitor wrote to the wife’s solicitor in reply as follows:[6]
2. We do acknowledge that our client had in the past, sent screenshots of your client’s email to and from your firm to our [Ms L]. However, all the necessary steps, in strict compliance with the Rules were taken, in good conscience and observing the principals [sic] of ethics, namely:
a) That material was deleted as soon as possible upon becoming aware of it being communication between you and your client;
b) That material was not saved or disseminated in any way whatsoever;
c) The sender of the material, being our client, [Mr Clayton], was informed of the inappropriateness of the disclosure, was told explicitly and definitely not to access nor disseminate any such material to our firm or to [Ms L] or to anyone else.
3. We have raised this issue with [Mr K], Senior Ethics Solicitor of Law Society of NSW. He has advised that there has been no breach of any Rule or ethical obligation in this matter.
[6] Exhibit F5.
What is interesting in this letter, and what is of significant concern to me, is that as part of this letter, the solicitors for the husband did not provide the following information:
(a)The dates upon which the husband made the disclosure of the confidential information;
(b)What the confidential information was that was disclosed;
(c)How many times disclosure had occurred;
(d)How much information had been disclosed; and
(e)Why the solicitor for the husband had not, as they were obliged to which I will discuss shortly, advised the solicitor for the wife of the inadvertent disclosure.
It also became clear in written submissions that when the letter refers to the advice that the solicitors for the husband received from the Senior Ethics Solicitor of the Law Society of New South Wales, that that advice was not obtained, sought or received until after the letter from the wife was received.
The husband, in his affidavit filed 2 September 2023, provides evidence that he had access to the wife’s email accounts and she had access to his accounts. He says that the wife inappropriately used his account and that she admitted to accessing his account until 2020. With the greatest respect to those acting for the husband, that misses the relevant point. That is:
(a)That the husband sent the material to his solicitor, and that material is no doubt subject to privilege and is confidential;
(b)That his solicitor read the material; and
(c)That his solicitor did not disclose to the wife’s solicitor that they had received the material.
When I say, “his solicitor,” it must have been read by someone in that firm in order for the decision to have been made that it was an inadvertent disclosure of confidential information and that steps had to be taken. Whether or not that was Ms L is beside the point.
THE LAW
The law in respect of this matter is set out at rule 31 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) (“Australian Solicitors’ Conduct Rules”):
31 Inadvertent disclosure
31.1 Unless otherwise permitted or compelled by law, a solicitor to whom material known or reasonably suspected to be confidential is disclosed by another solicitor, or by some other person and who is aware that the disclosure was inadvertent must not use the material and must—
31.1.1 return, destroy or delete the material (as appropriate) immediately upon becoming aware that disclosure was inadvertent, and
31.1.2 notify the other solicitor or the other person of the disclosure and the steps taken to prevent inappropriate misuse of the material.
31.2 A solicitor who reads part or all of the confidential material before becoming aware of its confidential status must—
31.2.1 not disclose or use the material, unless otherwise permitted or compelled by law,
31.2.2 notify the opposing solicitor or the other person immediately, and
31.2.3 not read any more of the material.
31.3 If a solicitor is instructed by a client to read confidential material received in error, the solicitor must refuse to do so.
The solicitor for the husband has an obligation and, indeed, the legislation is framed in the imperative, that they “must” do the following:
…
31.1.2 notify the other solicitor or the other person of the disclosure and the steps taken to prevent inappropriate misuse of the material.
…
31.2.2 notify the opposing solicitor or the other person immediately…
…
31.3 If a solicitor is instructed by a client to read confidential material received in error, the solicitor must refuse to do so.
This matter has been clearly bitterly contested for a significant period of time. It has involved dispute, multiple court appearances in this Court and in the criminal courts, and lengthy and detailed negotiations both in relation to property and children’s issues.
I find that the solicitor for the husband had an absolute duty to notify the solicitor of the wife immediately upon being made aware of the inadvertent disclosure, to disclose what was disclosed and when, and to advise of the steps that they took in respect of that disclosure. That they failed to do so in accordance with the Australian Solicitors’ Conduct Rules remains inexplicable.
The principles I was taken to are in Osferatu & Osferatu (2015) 53 Fam LR 433 (“Osferatu”) and Porter v Dyer [2022] FCAFC 116 (“Porter v Dyer”). At [25] of Osferatu, the Court said:
a balancing of the nature of the information against a consideration of the person to whom the information was given, when the information was given, the relevance of that information to the current proceedings, the risk of disclosure and any proposed protective measures is required before any determination can be made as to whether any relief is required, and if so, what is the appropriate relief.
When I look at this matter, my task has been made all the more difficult by the failure of the husband’s solicitor to disclose when the information inadvertently was given, what the information was, and why they did not provide any advice to the solicitor for the wife in respect of that disclosure. That information was clearly in the control of the husband’s solicitor and the husband, and they have, I assume, made a calculated decision not to provide that information. The husband says that the Court can be assured that no inappropriate use of the information has or will be made. Unfortunately, I find that it is impossible to make that finding in the face of their lack of disclosure and their lack of adherence to their responsibilities under the Australian Solicitors’ Conduct Rules.
The wife argues that permitting the husband’s solicitor to act would be to involve a risk that the lawyer might use information of a confidential nature previously read to advantage their client’s case, and I agree. This could certainly be the case in terms of the positions adopted during negotiations, and knowledge of advice given and the attitude of the wife to that advice would indeed be an advantage.
The wife argues that the matter of Grattan & Grattanand Anor (No. 3) [2014] FamCA 839 states at [36] that:
The power of the Court will be exercised where a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that the legal practitioner be prevented from acting for a client.
That is the step that I will take. But before I do so, I will consider the matter of Porter v Dyer. At [74], the Court said:
Irrespective as to whether the relevant obligation of confidence was legal or equitable, an injunction can run (in equity’s exclusive or auxiliary jurisdiction) if there is a real and sensible possibility of the misuse of confidential information. As the primary judge noted (at PJ [64], [77]), the test for restraining a legal practitioner on the basis of the possible misuse of confidential information may be dissected in a number of ways. Reflecting upon the authorities, his Honour proceeded to apply the relevant test (outlined at PJ [74]–[78]) by responding to the following sequence of questions:
(1) What is the relevant information?
(2) Is that information confidential?
(3) Does the legal practitioner have possession of that information?
(4) Is the legal practitioner proposing to act “against” the former client in the requisite sense?
(5) Is there a real risk that the confidential information will be relevant?
(6) Is there no real risk of misuse of the confidential information?
Turning to the issues as raised in Porter v Dyer:
(a)The husband and his solicitor have not disclosed what information was disclosed, when it was disclosed, or how often it was disclosed. It was within the knowledge of the husband to provide that information.
(b)There can be no doubt that the information contained disputed correspondence, and that contained in the disputed correspondence was correspondence between the wife’s solicitor and the wife. It was properly conceded by counsel acting for the husband that that information would be, in the ordinary course, confidential and privileged.
(c)The legal practitioner possessed that information and the letter to the wife’s solicitors tells us that “that material was deleted as soon as possible upon becoming aware of it being communication between you and your client”.[7]
[7] Exhibit F5.
Interestingly, the letter says:
4. We confirm and assure you that our firm is not in possession of any confidential material, or any other material that can be classified under “inadvertent disclosure”, between your firm and your client nor between your client and the Police.
However, when I turn to the next paragraph of that letter, it is somewhat different when it comes to Ms L, where it says that:
5. …[Ms L] is not [in] possession nor has read of any confidential material, or any other material that can be classified under “inadvertent disclosure”, between your firm and your client nor between your client and the Police.
Why there is a difference, I do not know. Who in the firm saw the correspondence, I do not know. When that correspondence was viewed, I do not know. And how the decision was made that it was confidential and subject to rule 31 of the Australian Solicitors’ Conduct Rules, I do not know. And I do not know because I was not told. The letter at Exhibit F5 is not, in my view, a fulsome or an appropriate letter to send in the current circumstances. It is, in my mind, misleading.
For example, the letter says that the firm received advice from the Senior Ethics Solicitor of the Law Society of New South Wales without nominating a date when that occurred. That date only was only disclosed during submissions in response to my question. It became clear, at that point, that the advice was sought only after the letter from the wife’s solicitor was received.
Thirdly, the letter provides little by way of detailed information, and information which is available to the father and to his legal team is not contained within it.
CONCLUSION
I find that in this matter, having said this a number of times during the course of submissions, it is not the actions of the husband (that is, in holding the information) that is relevant today, but the actions of his solicitor in failing to provide disclosure to the wife’s solicitor of the inadvertent disclosure, which is key to my consideration.
I accept that this matter has had a protracted history and for that reason, I will expedite the final hearing dates to dates early in 2024 before me. I accept that the solicitor for the father has had a long involvement in this matter and has assisted the father through the interim hearings and negotiations. However, I find that the solicitor’s actions in not advising the solicitor for the wife of the inadvertent disclosure is fatal to their application objecting to the wife’s application.
The wife cannot have, nor can the Court, any confidence in the representations made by the solicitor for the husband. The solicitor for the husband continuing to act in this matter will, in my view, impede negotiations and has unnecessarily and irrevocably diminished any trust that the wife would have in any representation made by them. As a consequence, the solicitors for the husband continuing to act in this matter have made negotiations difficult and have undermined the administration of justice in this Court. As such, it is my view that a fair-minded, reasonably informed person would conclude that it is appropriate that the solicitor and the firm be restrained from acting in this matter, and that a fair-minded, reasonably informed person would find it inappropriate for the solicitor for the husband to continue acting in this matter.
In light of those findings, I make the above Order.
Having made those findings and that Order, I now invite you, Mr Livingstone, to leave the bar table with your solicitor.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of Judge Lioumis. Associate:
Dated: 27 October 2023
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