Commissioner for Consumer Protection v Robinson
[2012] WASC 105
•3 APRIL 2012
COMMISSIONER FOR CONSUMER PROTECTION -v- ROBINSON [2012] WASC 105
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 105 | |
| Case No: | CIV:2932/2011 | 22 FEBRUARY 2012 | |
| Coram: | MASTER SANDERSON | 3/04/12 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | COMMISSIONER FOR CONSUMER PROTECTION HAYDN ROSS ROBINSON PHILLIP EDWYN GERALD DOUGLAS LINDA JANE LYONS |
Catchwords: | Solicitor and client Application to restrain solicitor acting in proceedings Turns on own facts |
Legislation: | Associations Incorporation Act 1987 (WA) Fair Trading Act 1987 (WA), pt vii, s 47(1) Legal Profession Conduct Rules (2010) (WA), r 42 |
Case References: | Boardman v Phipps [1967] 2 AC 46 Clay v Karlson (1997) 17 WAR 493 Commissioner for Corporate Affairs v Harvey [1980] VR 669 Keppie v Law Society of the Australian Capital Territory (1983) 65 FLR 147 Newman v Phillips Fox [1999] WASC 171; (1999) 21 WAR 309 Pegrum v Fatharly (1996) 14 WAR 92 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
HAYDN ROSS ROBINSON
First Defendant
PHILLIP EDWYN GERALD DOUGLAS
Second Defendant
LINDA JANE LYONS
Third Defendant
Catchwords:
Solicitor and client - Application to restrain solicitor acting in proceedings - Turns on own facts
Legislation:
Associations Incorporation Act 1987 (WA)
Fair Trading Act 1987 (WA), pt vii, s 47(1)
Legal Profession Conduct Rules (2010) (WA), r 42
(Page 2)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr C P Shanahan SC
First Defendant : Mr D R Williams QC
Second Defendant : Mr D R Williams QC
Third Defendant : Mr D R Williams QC
Solicitors:
Plaintiff : Department of Commerce
First Defendant : Haydn Robinson
Second Defendant : Haydn Robinson
Third Defendant : Haydn Robinson
Case(s) referred to in judgment(s):
Boardman v Phipps [1967] 2 AC 46
Clay v Karlson (1997) 17 WAR 493
Commissioner for Corporate Affairs v Harvey [1980] VR 669
Keppie v Law Society of the Australian Capital Territory (1983) 65 FLR 147
Newman v Phillips Fox [1999] WASC 171; (1999) 21 WAR 309
Pegrum v Fatharly (1996) 14 WAR 92
(Page 3)
1 MASTER SANDERSON: By originating summons issued 11 October 2011, the plaintiff seeks a declaration the first defendant (Mr Robinson), a certified legal practitioner, has a conflict of interest in acting and continuing to act as the legal representative of Mr Douglas and Ms Lyons (the first and second defendants) in Supreme Court action CIV 3003 of 2010 (the primary action). The plaintiff also seeks an injunction against Mr Robinson continuing to act in the primary proceedings and seeks a stay of the primary proceedings pending determination of this question.
2 It is appropriate to begin by outlining the issues in the primary proceedings. In that action, the Commissioner for Consumer Protection is proceeding against Mr Douglas and Ms Lyons under pt vii of the Fair Trading Act 1987 (WA) (the Act) in respect of the transfer to Mr Douglas and Ms Lyons of property; namely, 8-12 Bannister Street, Fremantle (the Bannister Street property). The Bannister Street property is located in the heart of Fremantle and was previously owned by the Fremantle RSL Club (WYOLA) Incorporated, an incorporated association under the Act. The primary allegation is the Bannister Street property was sold to Mr Douglas and Ms Lyons at a significant undervalue.
3 As yet, no substantial progress has been made in the primary action. On 21 January 2011, the Commissioner filed a statement of claim. On 7 June 2011, Mr Douglas and Ms Lyons filed a substituted defence. That is as far as the action has proceeded. The nature of the dispute between the parties as ascertained from these pleadings is central to the issue in this application.
4 The statement of claim is lengthy, running to 35 pages and 68 paragraphs. The essence of the dispute is relatively straightforward.
5 The club came into existence on 15 May 1947. Under its constitution, it was intended the club would 'promote and foster goodwill, social intercourse, cultural and social activities among members of the Club'. It was particularly directed at persons who had seen active service in the armed forces. Mr Douglas was a member of the club between about 1980 and August of 2002. For a time, he was treasurer of the club and served as a member of the committee of management between October 1991 and August 2002. Ms Lyons is Mr Douglas' wife. No allegations are made directly against her. When the property, the subject matter of the action, was transferred from the club, it was transferred into the joint names of Mr Douglas and Ms Lyons. That appears to be the reason why she is party to the primary action.
(Page 4)
6 In May of 1985, the club leased the Bannister Street property to Mr Douglas. That lease contained a right of first refusal. The club agreed if it wished to sell the Bannister Street property, it would give notice to that effect to Mr Douglas and specify the proposed sale price. Mr Douglas had 14 days to decide whether he would purchase the property at the proposed price. If he failed to so do, the club was at liberty to sell the Bannister Street property to whomsoever they chose. In 1987, the club renewed the lease on much the same terms and conditions with the right of first refusal in favour of Mr Douglas being retained.
7 On 5 July 1992, the committee of the club resolved to grant a new lease to Mr Douglas. I will come back to the terms of this resolution later in these reasons. Mr Douglas was a member of the management committee and, indeed, the treasurer of the club at the date this resolution was carried. He took no part in the discussion which led to the resolution. He was, however, directed to prepare a formal lease for execution by the parties.
8 At this time, the president of the club was Lindsay Oxwell and the vice-president was Rodney Mitchell. Both of these gentlemen are now deceased. On 6 September 1992, Mr Douglas presented a lease to Mr Oxwell and Mr Mitchell who signed it on behalf of the club. The 1992 lease had a right of first refusal which was in significantly different terms from that found in the 1985 lease and the extension thereof.
9 (During the course of the hearing, there was an argument as to whether the clause in the 1992 lease was an option to purchase or a right of first refusal. In my view, it makes no difference how it is described. The clause speaks for itself. Apart from acknowledging there was such a dispute, I propose to say nothing more on this issue.)
10 In the 1992 lease, if the club resolved to sell the Bannister Street property, they were obliged to offer it to Mr Douglas at a price of $300,000. That purchase price was to be adjusted in line with the Consumer Price Index. So, whereas under the 1985 lease the club could offer the Bannister Street property to Mr Douglas at a price of their choosing, under the 1992 lease if they decided to sell, they had to offer the Bannister Street property to Mr Douglas and the price was fixed in accordance with the provisions of the lease. So, the club locked themselves into a sale price adjusted only for inflation.
(Page 5)
11 The 1992 lease was to run until 2 January 1996. In fact, there were four extensions of the lease, so the term would have expired in December 2012.
12 In December of 2009, the club decided to sell the Bannister Street property. In accordance with the provisions of the then extant lease, it was offered to Mr Douglas. Mr Douglas accepted the offer and on 23 December 2009 he and Ms Lyons presented a completed contract for sale of land by offer and acceptance for execution by the club as vendor. The purchase price was $470,000 plus GST. After some negotiation, the purchase price was adjusted to $479,730 and sale of the property was completed in March of 2010.
13 The Commissioner alleges as at the date of sale the real value of the Bannister Street property was between $2 million and $2.5 million.
14 The statement of claim makes a raft of allegations against Mr Douglas. It is alleged that at all times after 5 July 1992, Mr Douglas knew the execution of the 1992 lease had not been authorised by the committee in accordance with the club's constitution. This claim is based upon what was actually resolved at the club's committee meeting held on 5 July 1992. What the minutes record is the following:
[T]he President asked Mr P Douglas and Mr J Gordon to leave the room while a letter from the Bannister Street Craftworks for a new lease was being discussed.
The letter stated the pitfalls of sub-leasing and the amount of maintenance that was required for the Bannister Street building and asked for a ten (10) year lease.
After a long discussion it was agreed to offer Phil Douglas a 10 year lease with an option of a further 10 years.
Phil is to have a new lease made up with conditions and CPI agreement the same as the last lease and have it ready for signing as soon as possible.
15 The Commissioner alleges this resolution did not authorise the club or anyone on behalf of the club, entering into a lease with Mr Douglas with a first right of refusal in significantly different terms from those which appeared in the 1985 lease.
16 Other allegations against Mr Douglas are that he breached fiduciary and statutory duties, that he engaged in unconscionable conduct and he engaged in misleading and deceptive conduct. Some additional facts are
(Page 6)
- pleaded to support these claims, but it is the circumstances in which the 1992 lease was entered into which is at the heart of the dispute.
17 Returning, then, to the circumstances of the execution of the 1992 lease. Mr Douglas says in July 1992 he instructed Mr Robinson to prepare a lease 'for me': see par 24 of the affidavit of Phillip Edwyn Gerald Douglas sworn 22 December 2011. Mr Robinson was instructed by Mr Douglas and was acting for Mr Douglas and Mr Douglas alone. He was not instructed on behalf of the club. The minutes to which I have already referred do not indicate the mechanism by which the lease was to be prepared. In normal circumstances, it might be expected a lessor would instruct its solicitors to prepare a lease which would then be forwarded to the lessee. After some negotiation, the lease would be entered into and the costs of preparing the lease would be paid by the lessee.
18 On Mr Douglas' evidence, that was not what happened in this case. After the matter had been discussed by the management committee in his absence, he was told a new lease would be granted and he should arrange for its preparation. In other words, the lessee would produce the lease. While this might be unusual, there is no reason either in law or practice why this could not be done. There is nothing in the evidence to suggest the management committee intended to instruct solicitors in relation to the lease.
19 A draft lease was provided by Mr Robinson to Mr Douglas about the end of August 1992. Mr Douglas met Mr Oxwell a day or so after receiving the draft lease. He handed Mr Oxwell a copy and asked him (Mr Oxwell) to read it and let him know if any changes were required. Mr Oxwell spoke to Mr Douglas a day or so later. Mr Oxwell said the draft lease was generally fine, but the club would not grant Mr Douglas an option to purchase, but would only grant a first right of refusal if the club decided to sell the Bannister Street property. Mr Oxwell said the draft had to be amended to reflect that position.
20 A copy of the draft lease appears as annexure PEGD 13 to Mr Douglas' affidavit. Section 13 is headed 'Option to Purchase' and it is a true option to purchase. It allows Mr Douglas at any time during the term of the lease to purchase the property for an amount of $300,000 plus CPI adjustments. In the 1985 lease, the option to purchase only arose if the club decided to sell. So, the new clause was a significant departure from the earlier lease. Mr Oxwell clearly appreciated the nature of the change and, accordingly, requested the draft be amended.
(Page 7)
21 Mr Douglas referred the matter back to Mr Robinson with instructions to amend the draft. This was done and the amended draft became the 1992 lease. The heading in the 1992 lease is still 'Option to Purchase'. But the amendment has been made, so the option will only arise if the club decides to sell. The clause itself is a hybrid - falling somewhere between the right of first refusal in the 1985 lease and the option to purchase in the draft lease.
22 Mr Douglas says he was advised by Mr Robinson to register the lease to protect his (Mr Douglas') interests. A problem arose because the club was unable to find the certificate of title. To protect Mr Douglas' position while a search for the title was conducted, a caveat in favour of Mr Douglas was lodged over the Bannister Street property. Mr Robinson advised concerning the caveat, prepared the caveat and arranged for it to be lodged.
23 In early January 1993, the title for the Bannister Street property was located. It was given by Mr Douglas to Mr Robinson so registration of the lease could be completed. Registration of the lease required a standard form declaration to identify the persons who had executed the lease. This is a requirement of the Office of Titles which provides a proforma for the guidance of those lodging such declarations. Mr Robinson was instructed by Mr Douglas to prepare the declaration. A copy of that declaration appears as annexure PEGD 16 to Mr Douglas' affidavit. Clause 5 of the statutory declaration is in the following terms:
The Committee of Management resolved for the Club to affix its seal to the lease of the land comprised in Certificate of Title volume 1133 Folio 56 to Phillip Edwyn Gerald Douglas of 40 Hampton Road, Fremantle being the subject of the deed of lease between the Club and the said Phillip Edwyn Gerald Douglas made on the 9th day of September 1992 and stamped the 8th day of October 1992.
24 The statutory declaration was prepared by Mr Robinson. It was signed by Mr Oxwell and Mr Mitchell in his office and he witnessed the signatures. It was attached to the lease and Mr Robinson arranged for its registration on the certificate of title.
25 Two further matters of fact ought be mentioned. First, when the lease was renewed after 1992, Mr Robinson did not act on behalf of the club. As I understand the defendants' position, they say this supports the contention Mr Robinson was not, during the negotiations which led to the 1992 lease, acting for the club. He was not their solicitor. Rather, he was acting for Mr Douglas and only for Mr Douglas.
(Page 8)
26 Secondly, Mr Robinson did act on settlement of the sale of the Bannister Street property to Mr Douglas. The club was not separately represented. The offer and acceptance identifies Mr Robinson as the 'representative' of each of the parties. There is no evidence there was any difficulty with the sale, although there was some adjustment to the purchase price. So far as the evidence goes, it suggests Mr Robinson did nothing more than provide the mechanics to facilitate the sale process.
27 It is against that factual background the plaintiff says Mr Robinson has a conflict of interest. At the hearing, counsel for the plaintiff produced a list of eight grounds which he submitted showed a conflict of interest on the part of Mr Robinson sufficient to warrant the making of the orders sought. It is convenient to list these grounds and to deal with each in turn. They are as follows:
AIDE MEMOIRE
ROBINSON'S CONFLICTS OF INTEREST
1. Drawing the purported 1992 Lease
2. Negotiating the terms of the purported 1992 Lease on behalf of his client, Douglas, and advising and representing Douglas in this regard
3. Whether Robinson failed to execute instructions given to him by Douglas as to changes to the draft 1992 Lease
4. Robinson's interest in defending advice given to Douglas in respect of:
4.1 the significance and meaning of the Management Committee's resolution of 5 July 1992, ie. whether it represented a resolution by the Club to grant a lease in the terms of the 1992 Lease and authorise the affixing of the Club's seal;
4.2 the need to register the purported 1992 Lease, and
4.3 the need to seek a caveat over Bannister Street Property
5. Acting as a Commissioner for Affidavits in taking the Statutory Declaration of 29 January 1993 and drawing the Statutory Declaration on Douglas' instructions
6. Acting for Douglas in respect of, at least, the purported 1998 extension of the 1992 Lease
(Page 9)
- 7. Acting as the representative of both (i) the Club and (ii) Douglas and Lyons in the transfer of the Bannister Street Property from the Club to Douglas and Lyons in or about 19 March 2010
8. Advising Douglas and Lyons as to whether Robinson should be called as a witness in the Primary Action. (emphasis in original)
28 Before looking at each of these claims, it is appropriate to consider the law as it relates to injunctions restraining a solicitor from acting for a party. In Newman v Phillips Fox [1999] WASC 171; (1999) 21 WAR 309, Steytler J said (at 314):
The justification for intervention by the court in applications of this kind has traditionally been founded upon one or more of three bases. These are the protection of confidential information, restraint from a breach of fiduciary duties in the context of a conflict of interest and the court's control over the conduct of solicitors as its officers.
29 As I understand the plaintiff's position, there is no suggestion Mr Robinson is in possession of confidential information which he might disclose to the defendants and which would adversely affect the plaintiff in the conduct of the primary action. So, if the plaintiff's application is to succeed, it must either be on a basis Mr Robinson, in continuing to act, will breach fiduciary duties in the context of a conflict of interest, or the situation is such that the court should exercise its control over the conduct of Mr Robinson as an officer of the court.
30 It is not easy to define when a conflict of interest will lead to a solicitor being restrained from acting for a party. It is axiomatic that a solicitor who has acted for one party in an action cannot, after ceasing to act for that party, act for the opposite party. This situation might well be covered by saying there is a risk of disclosure of confidential information. Equally, it may be said it is an aspect of the court regulating the behaviour of its officers.
31 In any event, if Mr Robinson is to be prevented from acting under the second of three criteria, it must be established there was between him and the club some fiduciary relationship. Of course, the club is not the plaintiff in the primary action - the action is brought in the name of the Commissioner for Consumer Protection. The Commissioner is, presumably, acting under s 47(1) of the Fair Trading Act. Whether or not the Commissioner can be said to enjoy the same rights flowing from any fiduciary relationship which exists between the club and Mr Robinson was not an issue explored in the submissions. For the purposes of these reasons, I will assume the interests of the Commissioner and the club
(Page 10)
- coincide. It is still necessary to find a fiduciary relationship existed between the club and Mr Robinson.
32 There is then the issue of the court regulating the conduct of its officers. In this case, the plaintiff focussed on the prospect of Mr Robinson being called as a witness in the proceedings. Reference was made to r 42 of the Legal Profession Conduct Rules (2010) (WA) which provides:
Practitioner as material witness in client's case
(1) A practitioner must not act for a client in a hearing of a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence centrally material to the determination of contested issues before the court.
33 This rule reflects longstanding practice as illustrated by the decision of Templeman J in Clay v Karlson (1997) 17 WAR 493. It is therefore necessary to examine the way in which the litigation is likely to be conducted at trial and to determine not only whether Mr Robinson will be a witness, but whether he will be a central witness. On this question, the parties disagree.
34 It was the plaintiff's position that there was a fiduciary relationship between the club and Mr Robinson. It was said this fiduciary relationship arose out of the fact Mr Robinson prepared the 1992 lease. It was conceded there was no evidence of a direct engagement by the club of Mr Robinson. Rather, it was said, the circumstances surrounding the parties entering into the lease and Mr Robinson's role in drafting the lease which was signed by the club without independent advice gave rise to a solicitor/client relationship between Mr Robinson and the club and consequently led to there being a fiduciary relationship.
35 Central to this argument was the decision of the Full Court in Pegrum v Fatharly (1996) 14 WAR 92. To understand the principle drawn from the case, it is necessary to detail the facts. The headnote admirably summarises the important events:
Wilkins and his group of companies wished to borrow a substantial sum of money from the appellants. Ordinarily the loan deed and the securities, which were largely if not entirely for the lender's benefit, would be prepared by the lender's solicitors at the borrower's expense. To save legal costs Wilkins proposed to the male appellant that the respondent, who was retained as solicitor for the Wilkins group, prepare all the documents and the male appellant agreed. It was understood that the respondent would be (and he was) the only solicitor involved in receiving instructions and
(Page 11)
- preparing the documents. Both parties attended on the respondent and gave him information to be put into the documents. At this meeting the respondent sought and obtained the male appellant's confirmation that it was in order for him to prepare the documents. The respondent did prepare the documents and in the loan deed he inserted a clause to the effect that the borrower (Wilkins) would pay the lenders (the appellants) costs of and incidental to the instructions for and the preparation of the deed.
By reason of his knowledge of the affairs of the Wilkins group the respondent at all material times knew that Wilkins and his companies were a bad risk and that the securities given by them were inadequate to secure the loan. He did not warn the appellants about this.
Wilkins was unable to repay the loan and the securities proved to be inadequate in point of value and little of the loan moneys was recovered.
In an action by the appellants against the respondent for damages for professional negligence in failing to give proper advice and for breach of fiduciary duty it was held that the appellants had not proved the respondent had acted for them in the transaction or that he owed them any relevant professional duties.
36 The appeal succeeded. All three judges concluded the respondent in the circumstances of the case was acting as the appellants' solicitor and owed the appellants the relevant fiduciary duties. This fiduciary duty arose as a result of the contractual relationship between solicitor and client. Ipp J (at 95) put the position as follows:
A contractual relationship of solicitor and client will therefore be presumed if it is proved that the relationship of solicitor and client existed de facto between a solicitor and another person. Upon proof of that kind it would not be necessary to prove when, where, by whom or in what particular words the agreement of retainer was made. ... the de facto relationship of solicitor and client has to be a necessary and clear inference from the proved facts before a retainer will be presumed.
37 Anderson J dealt with this issue in somewhat more detail. His Honour said (at 102):
When both parties to a transaction consult the same solicitor and together give him the information needed to prepare the documents in which their respective rights and obligations are to be set out and the solicitor accepts responsibility to prepare the documents without any indication that he cannot fully discharge his professional duties to them both there is a strong bias towards finding that the solicitor tacitly agrees to act for both parties and to undertake the usual professional responsibilities to them both: see Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp [1979] 1 Ch 384 (esp) at 396. In the absence of a clear indication by the solicitor that the
(Page 12)
- solicitor does not accept one of the parties as his client it is natural in such a case to assume both are relying on him for professional advice and assistance. This follows from the mere fact that both have consulted him. There may be other circumstances which show that there is no reliance by one or other of the parties on the solicitor, but, if not, reliance should be inferred as a fact. And when a solicitor accepts responsibility to do professional work requiring special knowledge and skill and there is in fact a reliance on him to apply his expert knowledge and skill in the performance of that work, there exist 'the elements which lie at the heart of the ordinary relationship between a solicitor and his client ...'
This does not mean a solicitor whose services are sought by both parties is bound to accept that he is to serve both parties. He can refuse to do so and elect to act for one party only. This requires a very clear statement by the solicitor that this is to be his position. It has even been held that he is duty bound in such a case to positively recommend the other party get another solicitor and take independent advice before entering into the transaction, and, in the event that recommendation is not followed, to give him proper advice as to the risks in signing the documents: see Irvine v Shaw (1992) ANZ Conv R 83.
38 In this case, there is no evidence Mr Robinson, Mr Douglas or the officers of the club turned their mind to the question of whether Mr Robinson was acting for both parties when he drew the lease. However, Mr Robinson must have been aware the club was not separately advised. After all, his discussions were with Mr Douglas and, on the evidence, Mr Douglas alone. He did not negotiate with an officer of the club, nor did he have contact with any other solicitor. There was no joint meeting between Mr Robinson, Mr Douglas and officers of the club - in contrast to the meeting which took place between Mr Fatharly, Mr Pegrum and Mr Wilkins. It is to be remembered the contract of engagement in the Pegrum v Fatharly decision was implied. It was not express. There are other difference between this case and the fact situation in Pegrum v Fatharly. Mr Robinson never sought or obtained the club's confirmation it was in order for him to draw the documentation.
39 However, the fact remains when the draft lease was prepared, it contained the option to purchase which was very much in Mr Douglas' favour. Mr Robinson must have appreciated that was the case. Mr Oxwell did; and that was why he sent the draft back to Mr Douglas. The fixed price provision in the lease remained. That was very much a different proposition from what had been in the 1985 lease. There is no evidence whether the parties realised the implications of this change to their relationship.
(Page 13)
40 That is not the end of the matter. As I have detailed below, Mr Robinson prepared the statutory declaration which was necessary for registration of the lease. Mr Oxwell and Mr Mitchell attended at Mr Robinson's office when the statutory declaration was signed. It contained cl 5 which I have quoted. Given Mr Robinson knew the club was not independently represented, it was surely incumbent upon him to advise Mr Oxwell and Mr Mitchell they should only sign the statutory declaration if they were satisfied cl 5 was correct. In the circumstances, it is arguable there was an implied retainer between Mr Robinson and the club.
41 On balance, then, it seems to me it is arguable there was an implied retainer between Mr Robinson and the club from the moment Mr Robinson was instructed to prepare the lease until the time it was registered. It is arguable there was a fiduciary relationship between Mr Robinson and the club. The question is on the assumption there was such a fiduciary relationship, does that now preclude Mr Robinson acting for the first and second defendants in the primary proceedings?
42 It is one thing to identify a fiduciary relationship. It is another thing to identify the duties arising from the fiduciary relationship and how those duties have been breached. During the course of his submissions, counsel referred to Mr Robinson having a 'conflict of interest', but the use of that phrase does not really take the matter any further. There is no suggestion Mr Robinson was preferring his interests over that of his client. Nor is there any suggestion he was making an unauthorised profit in the Boardman v Phipps [1967] 2 AC 46 sense. What seems to be suggested is in the primary proceedings Mr Robinson may be anxious to protect his position, vis-a-vis the club, rather than giving independent advice to his clients. If I have understood the submissions correctly, this is a matter which relates to the court controlling its officers, rather than any breach of fiduciary duty.
43 If consideration is given to the alleged conflicts of interest which are set out in counsel's statement, it is difficult to see how any of the alleged conflicts involve breach of some fiduciary duty. Perhaps the best way to approach the matter is to ask this rhetorical question: what aspect of the fiduciary duty as between the club and Mr Robinson has been breached by the acts referred to in counsel's list? In my view, the answer is, 'None'.
44 I am not satisfied Mr Robinson ought be restrained from acting for the second and third defendants in the primary proceedings because to do so would see him breach some aspect of his fiduciary duty to the club.
(Page 14)
45 There then remains the question of whether in its supervisory jurisdiction the court ought restrain Mr Robinson from acting. As put by counsel, this argument had two aspects. First, as arguably a solicitor acting for the club in negotiations that led to the lease, Mr Robinson had a personal interest in the litigation. A statement of this principle is found in Commissioner for Corporate Affairs v Harvey [1980] VR 669, where Marks J said (at 762):
What is important, however, is that the court sets its face against giving audience to legal representatives who are unable to assure the court of a singular interest. It is the purity of interest in the adversaries before the court that gives what fundamental utility and credence there is in the system.
46 This decision was referred to with approval by Templeman J in Clay v Karlson. His Honour pointed out the 'singular interest' which is referred to by Marks J is the interest of the client. Templeman J also referred to the decision of Keppie v Law Society of the Australian Capital Territory (1983) 65 FLR 147, which is to similar effect. In that case, in their joint judgment, Blackburn CJ, Kelly and Gallop JJ point out if a solicitor is personally involved in the litigation, he is not able to consider his client's case with the detachment which is central to the proper running of an action.
47 In my view, this is not a case where the involvement of Mr Robinson in the drafting of the lease was such as to give rise to an apprehension that, in the primary proceedings, he may not provide proper advice to his clients. The situation may have been different had the Commissioner sued Mr Robinson alleging professional negligence in the drafting of the lease. Then it would have been entirely inappropriate had Mr Robinson continued to act for both himself and for the second and third defendants. In my view, in the circumstances of this case, there is nothing to suggest Mr Robinson will not have purity of interest.
48 The second aspect of the plaintiff's case related to Mr Robinson as a witness. It was submitted there was a real prospect Mr Robinson would be called by the defendants to give evidence on their behalf. He should therefore not act as their solicitor. In his affidavit, Mr Douglas says Mr Robinson advised him to obtain independent legal advice as to whether he (Mr Robinson) would be called as a witness in the proceedings. Mr Douglas says a decision had been made not to call Mr Robinson. With respect, it is very early in the proceedings to determine who and who should not give evidence. That is a decision
(Page 15)
- taken after discovery and when an advice on evidence is prepared. The primary action has a long way to run.
49 Even at this distance, it is somewhat difficult to see why Mr Robinson would be called as a witness. There is no issue about the circumstances in which Mr Robinson was instructed to draft the lease, about the amendment to the draft, nor is there any dispute about the circumstances of the signing of the statutory declaration. The plaintiff could perhaps call Mr Robinson in the primary proceedings and question him about the circumstances that led to the signing of the 1992 lease. It is arguable privilege as between Mr Robinson and Mr Douglas has been waived. It would be unusual for the plaintiff to call Mr Robinson in these circumstances - in fact, it would be a course fraught with danger. So, while it is very early in the piece, it is difficult to see Mr Robinson being called as a witness in these proceedings.
50 Furthermore, the Professional Conduct Rules anticipate a situation arising where a solicitor who is acting does find that he is a material witness. At that point, he should withdraw. There is, then, a continuing obligation on a solicitor to monitor his involvement in the action. The rule does not speak of a solicitor anticipating the possibility of his being called as a witness. No doubt, Mr Robinson will at all times bear in mind his professional responsibility.
51 On balance, then, I am not satisfied there is any basis upon which to restrain Mr Robinson acting for the first and second defendants in the primary proceedings. I am not satisfied Mr Robinson falls foul of any of the three grounds upon which an order could be made. I therefore propose to dismiss the plaintiff's application. I will hear the parties as to the form of orders and as to costs.
0
4
3