Crittenden and Collins
[2017] FamCA 716
•15 September 2017
FAMILY COURT OF AUSTRALIA
| CRITTENDEN & COLLINS | [2017] FamCA 716 |
| FAMILY LAW – INJUNCTION – Legal Professional Privilege – Where the wife sought that the husband’s solicitors be restrained from acting for the husband – Where documents were obtained by the husband’s solicitors which were confidential between the wife and her solicitors – Where there is no issue that the documents in question are on their face privileged – Where there is no doubt the husband knew the documents were confidential before providing them to his solicitors – Court ordered that the husband be restrained from instructing the current solicitors during the currency of proceedings – Court ordered that the husband destroy all copies of the documents forthwith and be restrained from using information derived therefrom. |
| Australian Solicitors’ Conduct Rules 2012 Family Law Act 1975 (Cth) |
| Australian Commercial Research & Development Ltd v Hampson [1991] 1 Qd R 508 Baker v Campbell (1983) 153 CLR 52 Celanese Canada v Murray Demolition Corp [2006] SCC 36 Dalton & Dalton [2017] FamCAFC 78 Daniels Corporation International Pty Ltd v ACCC [2002] HCA 49; 213 CLR 543 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd [1995] 1 VR 1 Gillies v Dibbets [2001] QSC 459 GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 H Stanke & Sons Pty Ltd v Von Stanke. Omeara & Ors [2006] SASC 308 Ismail-Zai v Western Australia (2007) 34 WAR 379 Kallinicos v Hunt (2005) 64 NSWLR 561 Kingston v State Fire Commission (1998) 8 Tas R 152 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 McMillan & McMillan (2000) FLC 93-048 Mills v Day Dawn Block Gold Mining Company Limited (1882) 1 QLJ 62 Newman v Phillips Fox (1999) 21 WAR 309 Pott v Jones Mitchell [2004] 2 Qd R 298 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 Zalfen v Gates [2006] WASC 296 |
| APPLICANT: | Ms Crittenden |
| RESPONDENT: | Mr Collins |
| FILE NUMBER: | BRC | 3770 | of | 2014 |
| DATE DELIVERED: | 15 September 2017 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 21 August and 31 August 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Sullivan QC |
| SOLICITOR FOR THE APPLICANT: | Keating Lehn Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr Williams |
| SOLICITOR FOR THE RESPONDENT: | Barry.Nilsson Lawyers |
Orders
The husband is restrained and an injunction hereby issues restraining the husband from instructing or continuing to instruct Barry.Nilsson Lawyers during the currency of proceedings in Family Court of Australia file number BRC 3770 of 2014.
The husband is restrained and an injunction hereby issues restraining the husband from:
(a)Discussing or communicating to any other person the contents of any of the documents referred to in the husband’s affidavit sworn 17 August 2017 at paragraphs 15(b) to 15(d) (herein referred to as “the documents”); and
(b)Making any use for the purpose of the said proceedings of any information derived from the documents.
The husband shall destroy all hard copies and electronic copies of the documents forthwith.
The matter is to be listed for mention before a Registrar for further directions at a date and time to be advised.
In the event that the parties are unable to agree in writing within 21 days of today what costs Order, if any, might be made regarding the costs of and incidental to the said Application:
(a) Each party file within a further 14 days written submissions in respect of that issue; and
(b) Unless either party otherwise therein contends to the contrary, that issue be determined in chambers without the necessity of further appearance by either party.
In the event that the parties reach agreement in writing on the issue of costs, they be at liberty to file jointly, minutes of consent via e-mail to the Associate to Justice Carew.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Crittenden & Collins has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 3770 of 2014
| Ms Crittenden |
Applicant
And
| Mr Collins |
Respondent
REASONS FOR JUDGMENT
The applicant seeks the following order:[1]
[1] The applicant was granted leave to amend the Application in a Case filed 18 July 2017 by seeking a mandatory injunction against the husband requiring him to destroy the documents and restraining him from using the documents. The precise terms of the amendment were to be included in a minute and sent to the husband’s counsel and the court. An amended application in a case was submitted to the court under cover of an email on 23 August 2017 and on 31 August 2017 further submissions were made about the additional paragraphs by Mr Sullivan QC for the wife and Mr Wedgewood for the husband. The amended Application in a Case was marked exhibit 5.
(1)That Barry.Nilsson Lawyers be restrained by injunction from acting for the husband in these proceedings.
(2)In the alternative, that the husband be restrained by injunction from instructing or continuing to instruct Barry.Nilsson Lawyers during the currency of proceedings in the Family Court of Australia file number BRC 3770 of 2014.
In addition to the alternate orders in 1 and 2 above:
(3) That the husband:
(a)Not discuss with nor communicate to any other person the contents of any of the documents referred to in the husband’s affidavit sworn 17 August 2017 at paragraphs 15(b) to 15(d) (herein referred to as “the documents”); and
(b)Not make any further use of the documents or any information contained therein or derived therefrom at the Trial or otherwise, including by providing the documents, or information contained therein or derived therefrom, to any solicitors whom he instructs.
(4)That the husband destroy all hard copies and electronic copies of the documents forthwith.
(5)Such further or other order as the Court deems appropriate.
The respondent seeks an order that the application in a case filed 18 July 2017 be dismissed and the applicant pay his costs. The respondent opposes the extent of the restraint sought against him personally in the amendment to the application in a case.
background
The applicant and respondent are wife and husband although separated for some time.
They resolved their property dispute and consented to an order to that effect on 1 May 2014.
The wife commenced proceedings on 5 May 2015 to set aside the property order.
On 27 July 2015 the wife’s daughter Ms B (“Ms B”) was appointed her litigation guardian pursuant to Rule 11.11 of the Federal Circuit Court Rules “in these proceedings”.
The proceedings (“the first proceedings”) were discontinued by Ms B on 8 September 2016, thus her appointment came to an end. In the first proceedings the wife was represented by MCH Legal (“MCH”) and Mr F of counsel.
The wife thereafter retained Keating Lehn Solicitors (“KLS”) to act for her.
On 14 September 2016 KLS informed the husband’s solicitors, Barry.Nilsson Lawyers (“BNL”), by letter that they had received instructions to act for the wife and had been informed that, contrary to the wife’s interests, Ms B had agreed with the husband to discontinue the first proceedings.
In a further letter dated 26 September 2016 KLS made it clear that the first proceedings had been discontinued without reference to the wife and that she intended to pursue her claim to set aside the property order made in 2014 pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”).
The wife again commenced proceedings (“the second proceedings”) by filing an Initiating Application on 26 September 2016. There is no issue about her capacity to conduct litigation on her own behalf.
In further correspondence on 2 November 2016 KLS made it clear that the basis of the wife’s claim remained the same and suggested the parties proceed with a mediation that had previously been agreed to when the first proceedings were still on foot.
On 8 November 2016 BNL informed the wife’s solicitors that they had instructions to seek summary dismissal of the wife’s claim.
Shortly after the discontinuation of the first proceedings Ms B had provided to the husband a number of documents from the first proceedings protected by legal professional privilege.
The husband read the documents and conceded during cross-examination that he knew that the documents were confidential as between the wife and MCH. Although maintaining that he did not understand that the documents were protected by legal professional privilege he clearly understood that communications between client and solicitor were generally confidential and he conceded that he passed the documents on to BNL because he thought they may have given him some forensic advantage. The documents included advice passing between MCH and counsel about the wife’s prospects of success in the first proceedings.
The husband emailed the documents to Ms C, senior associate with BNL under cover of an email dated 9 November 2016 at 1:22am with the subject heading “Further information” and copied also to his daughter, Ms D, which said:
Dear …,
More reading for you.
And a further email dated 9 November 2016 at 1:43am[2] with the subject heading “Fed: [Collins] Family Law Matters” which said:
Dear …,
Even more information!
[2] The particulars of the attachments are redacted in exhibit 4
On 8 March 2017 BNL informed KLS that they were in the process of preparing an application for summary dismissal of the wife’s claim.
The first the wife knew that these confidential documents had been obtained by the husband and BNL was via a letter dated 5 April 2017 from BNL to KLS. The letter said, inter alia:
…
Documents have come into our client’s possession via [Ms B] and subsequently to our firm. The documents are authored by MCH Lawyers and [Mr F] of Counsel.
As the documents might reasonably be apprehended to contain legal advice, we are providing them to your firm in the first instance.
…
It was not until 6 April 2017 that BNL informed KLS that the documents had come into the possession of BNL on 9 November 2016.
On 3 May 2017 BNL enclosed ‘the balance of correspondence’ sent by Ms B to the husband and sent to BNL as follows:
· Email from Ms B to the husband and his sister (Ms D) dated 6 September 2016;
· Email from the husband to KLS dated 14 September 2016;
· Email from Ms B to the husband dated 22 October 2016 and attachments; and
· Email form Ms B to the husband dated 22 October 2016 and attachments.
On 19 May 2017 KLS called upon BNL to withdraw as the husband’s solicitors.
On 23 May 2017 BNL informed KLS that they would “not consent to withdraw”.
On 23 June 2017 BNL informed KLS by letter authored by Ms C inter alia:
a)Correspondence from KLS to Ms B dated 13 September 2016 had been forwarded to BNL on 23 October 2016 but BNL no longer held either a hard copy or electronic copy;
b)An email from Ms B to KLS dated 14 September 2016 had been copied to BNL on the same date but BNL no longer held either a hard copy or electronic copy;
c)An email from Ms B to the husband dated 22 October 2016 with attachments was forwarded to BNL on 9 November 2016 but BNL no longer held either a hard copy or electronic copy;
d)A second email from Ms B to the husband dated 22 October 2016 with attachments was forwarded to BNL on 9 November 2016 but BNL no longer held either a hard copy or electronic copy;
e)Advice had initially been received from Senior Counsel in writing on 24 January 2017 and subsequent advice in writing on each of 24 March and 1 May 2017;
f)Ms C was the only legal practitioner to have opened and read and/or skimmed the documents;
g)Hard copies of the documents had been provided to Senior Counsel but had not been read or retained by Senior Counsel;
h)Ms C offered an undertaking not to inter alia:
i)Speak with the husband or any other person concerning any information that she may have concerning the wife or the proceedings;
ii)Disclose directly or indirectly any information that she may have in her possession or control concerning the wife or the proceedings;
iii)Have any involvement with the proceedings;
iv)View any correspondence files, tax invoices, briefs or emails either sent to the firm or received by it, nor be involved in the matter in any manner whatsoever in the future;
v)Convey to any person any information about the affairs of the wife which she may have;
And to
vi)Provide mirror undertakings in respect of Ms C and each other solicitor who has or may have dealings in the future with the matter;
i)Conveyed that “all the documents … have been returned and no copies (and no details of the same) retained”.
(emphasis added)
On 26 June 2017 KLS rejected the proffered undertakings as being unsatisfactory and informed BNL that an application was being prepared to have them removed as solicitors for the husband.
On 28 June 2017 BNL responded by letter (authored by Ms C) inter alia that if the wife elects to file an application “that is a matter for her.”
On 4 July 2017 Ms C informed KLS that she was in the process of transferring the file internally and would proffer the undertakings shortly.
On 10 July 2017 BNL informed KLS by letter (authored by Mr G, partner) that he would have future carriage of the matter “together with our [Mr E]” and that undertakings had been sent to the Court for filing.
It became apparent during cross-examination of the husband that he retained copies of the privileged material and that his daughter may also have retained the copies he sent to her.
Ms C conceded during cross-examination that she had not advised the husband to destroy all known copies of the material. It seems no enquiry was made of the husband about whether he still had the documents.
the wife’s argument
It was argued on behalf of the wife that the legal principles applicable to the determination of this matter are informed by and analogous to those arising in the more common factual circumstances involving a solicitor receiving confidential information from a former client and being restrained from thereafter acting for another client whose interests may conflict with the former client. The relevant principles are said to be as follows:
a)A solicitor ought be restrained from acting where there is a risk that the solicitor will disclose the information to a new client or a risk that the solicitor will use the confidential information against the former client;[3]
b)There is no requirement to show a substantial risk of misuse or disclosure. It is sufficient that the risk is real as opposed to fanciful or theoretical;[4]
c)A solicitor may be restrained even if the solicitor does not recall the confidential information that was imparted;[5]
d)The risk of a subconscious use of confidential information is sufficient to restrain a solicitor from acting;[6]
e)The relevant confidential information may include information concerning the manner in which the client conceives the case, the evidence in the case or the strategy for running the case;[7]
f)Proof of the specific content of the confidential information is not necessary;[8]
g)Any delay in the implementation of an information barrier also known as a ‘Chinese wall’ militates against its adequacy.[9]
[3]Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 235-236
[4]Prince Jefri Bolkian (supra) at 236-237; see also Helman J in Gillies v Dibbets [2001] QSC 459
[5]Ismail-Zai v Western Australia (2007) 34 WAR 379 at [27]
[6] Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357; Australian Commercial Research & Development Ltd v Hampson [1991] 1 Qd R 508 at 519; Gillies v Dibbets (supra)
[7]Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd [1995] 1 VR 1 at 8
[8] Mills v Day Dawn Block Gold Mining Company Limited (1882) 1 QLJ 62 at 63; Pott v Jones Mitchell [2004] 2 Qd R 298 at 303
[9]Newman v Phillips Fox (1999) 21 WAR 309 at 325-6; Zalfen v Gates [2006] WASC 296 at [103]
Mr Sullivan QC, for the wife, referred to the ‘inherent’ jurisdiction of this Court to restrain a solicitor from acting when the due administration of justice requires the restraint and that the requisite test is whether “a fair-minded, reasonably informed member of the pubic 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.”[10]
[10]Kallinicos v Hunt (2005) 64 NSWLR 561 at [76] per Brereton J
In addition, reliance was placed upon Rule 31 of the Australian Solicitors’ Conduct Rules which provides:
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 of 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 notify the opposing solicitor or the other person immediately; and
31.2.2 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 refuse to do so.
While it was not contended that the disclosure by Ms B to the husband or by the husband to the solicitor was inadvertent it was submitted that the tenor of the rule indicate that BNL should have, at the very least, immediately notified KLS particularly in circumstances where BNL knew that the wife took issue with Ms B’s representation of her as case guardian.
Reliance is placed on Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [11] where the High Court stated that such a rule (referring to Rule 31) should not be necessary and that “In the not too distant past it was understood that acting in this way obviates unnecessary costly interlocutory applications… It is … an example of professional, ethical obligations of legal practitioners supporting the objective of the proper administration of justice.”
[11] (2013) 250 CLR 303 at 65–67
It was submitted that the injunctions restraining BNL from acting should be granted for the following reasons:
a)There is no dispute that the documents in question are subject to client legal privilege;
b)The documents were intentionally provided by the husband to BNL knowing that they were confidential as between the wife and her previous solicitor;
c)The husband conceded that he passed on the documents to BNL as he thought they could provide him with some forensic advantage;
d)The documents were read (at least in part) by Ms C;
e)Ms C had the carriage of the matter at all relevant times and worked on the case with Mr E, partner, at BNL;
f)BNL were on notice as at 14 September 2016 that the wife viewed Ms B as having acted against her interests in discontinuing the first proceedings and that the wife had retained KLS;
g)BNL were on notice as at 26 September 2016 that the wife alleged that the first proceedings had been discontinued without her knowledge;
h)BNL took no steps to inform the wife that they had received the documents until 5 April 2017;
i)Ms C continued to have the carriage of the matter until on or about 3 July 2017;
j)Mr E continues to act in the matter in conjunction with another partner of BNL;
k)The risk of inadvertent disclosure is high;
l)It is too late for any information barrier to be an effective solution.
In relation to the further restraints sought against the husband it was not in contention that the husband should be restrained from discussing or communicating the content of the documents to any other person and that he should destroy the documents. In view of the objection taken to the wording of paragraph 3(b) of the Amended Application in a Case it was proposed that the further restraint be in the following terms:
3(b) [that the husband] Not make any use for the purpose of these proceedings of any information derived from the Documents.
In support of the further injunction against the husband as proposed above, reliance was placed on the wording of the injunctions made in the authorities relied upon by counsel for the wife and in particular Kingston and GT (two cases relied upon by the husband and discussed below).
the husband’s argument
It was conceded by the husband that the documents appear to be prima facie privileged and it was submitted that it was not necessary to determine whether there has been any waiver of privilege.
Mr Williams for the husband argued that as this was not an inadvertent disclosure Rule 31 of the Australian Solicitors Conduct Rules had no application.
It was submitted that the principles applicable to circumstances where an injunction is sought against a solicitor of a former client are not analogous and reliance was place on GT Corporation Pty Ltd v Amare Safety Pty Ltd[12] and a Canadian case referred to therein of Celanese Canada v Murray Demolition Corp[13] wherein relevant factors in deciding whether a solicitor should be restrained from acting included:
a)How the documents came into possession of the client and his lawyers;
b)What the client and the lawyers did upon recognising that the documents were potentially privileged;
c)The extent of review made of the privileged material;
d)The contents of the lawyer-client communication and the degree to which they are prejudicial;
e)The stage of the litigation; and
f)The potential effectiveness of a firewall or other precautionary steps to avoid the mischief.
[12] [2007] VSC 123 at [20]
[13] [2006] SCC 36 at [59]
The reference to a ‘firewall’ is effectively interchangeable with the reference in Australia to ‘Chinese walls’ or more recently an ‘information barrier’.[14]
[14]Dalton & Dalton [2017] FamCAFC 78 at [55]
In GT the defendant had inadvertently provided the plaintiff’s solicitor with documents over which they later claimed were protected by client legal privilege. From the hundreds of documents provided by email to the plaintiff’s solicitor he realised that some apparently privileged material had been provided. He nevertheless provided copies of the material to his counsel who read it all. While the two counsel briefed in the matter were restrained from continuing to act the solicitor was not. It was found that he had very little if any knowledge of the content of the documents and certainly not such as to justify the solicitor being restrained from acting when he had been involved in the matter for a considerable period. The parties were left to draft an appropriate injunction or undertaking to prohibit any further use of the privileged material by the plaintiff or its solicitor.
Mr Williams for the husband submitted that it is “no minor matter to restrain a firm of solicitors from acting for a litigant. That is not so much because of the impact on the firm of solicitors involved, but because it deprives a litigant of the solicitor of his/her choice.”[15]
[15]H Stanke & Sons Pty Ltd v Von Stanke, Omeara & Ors [2006] SASC 308 at [81]
Further, that as the husband has knowledge of the content of the documents there can be no real utility in restraining BNL from acting. It was argued that there is some significance that the documents were provided initially to the husband and not to his lawyers.
Reliance was also placed on a decision of Slicer J in the Supreme Court of Tasmania of Kingston v State Fire Commission.[16] That case involved circumstances where a defendant’s brief had been inadvertently returned to the plaintiff’s solicitors who proceeded to read it and copy it. An application to restrain the plaintiff’s solicitor from continuing to act was dismissed and as Slicer J put it:
The problem is that knowledge, once obtained, cannot be erased from the mind. In this case, the respondent has been made aware of the contents of the surveillance video and is doubtless conscious of its significance, irrespective of which solicitor or counsel is retained on the trial. He doubtless is aware in general terms of some of the other material read by his solicitor. … None of those matters can be redressed by preventing his present solicitors from continuing to act. … As Browne-Wilkinson V-C observed, “the rat has bolted”. The remedy sought will be of little advantage to the applicant and will not be granted.
[16] (1998) 8 Tas R 152
The plaintiff, his solicitors and counsel were nevertheless restrained from making any use for the purpose of the action of any information derived from the defendant’s brief and notes or correspondence relating to the brief was required to be delivered to court by the plaintiff and kept under seal until determination of the case.
When the matter was again mentioned before me on 31 August 2017 in relation to the wording of the proposed further injunction against the husband it was submitted that the reference to the word ‘use’ is too broad. It was submitted that as it is impossible for the husband to erase from his memory what he has read in the documents he would be at risk of contravening the proposed restraint even if he unintentionally provided instructions. Further it was submitted that as the husband proposed to consent to an order in terms of paragraph 3(a) and 4 there is no utility in making the further order sought in paragraph 3(b).
discussion
Legal professional privilege (or client legal privilege as it is referred to in the Evidence Act 1995 (Cth)) is a substantive legal right that provides immunity from disclosure of confidential communications between a client and their lawyer. The High Court in Daniels Corporation International Pty Ltd v ACCC[17] said:
[17][2002] HCA 49; 213 CLR 543 at 552 [9-10]
Legal professional privilege
It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the "dominant purpose" test for legal professional privilege was recently adopted by this Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation in place of the "sole purpose" test which had been applied following the decision in Grant v Downs.
Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures …
(footnotes omitted)
The tension between the public policy of ensuring that all relevant information is before a court and enhancing the due administration of justice by enabling full and frank discussion and advice between client and lawyer was noted by Wilson J in Baker v Campbell[18] who said that such immunity encouraged the public to obtain legal advice often resulting in the resolution of dispute or the limiting of issues thus reducing the burden on the court system.
[18] (1983) 153 CLR 52 at 94
In the case before me there is no issue that the documents are on their face privileged. There is also no doubt that the husband knew the documents were confidential and that he provided them to BNL for the purpose of perceived forensic advantage to his case.
As soon as KLS became aware of the situation they acted promptly. The fact the proceedings are well under way and that BNL have acted for the husband for a considerable time is of course a factor that I take into account.
The question arises as to what if anything can to be done to protect the wife’s right to confidentiality given the intentional disclosure of the documents to firstly the husband and secondly to his lawyers in circumstances where the documents have been read by the husband and Ms C.
This Court has an implied power to restrain a solicitor from acting in an appropriate case and to control its own process.[19] The Court also has power under s 114 of the Act to restrain the husband from continuing to retain BNL and to make any other necessary injunction.
[19] See s 33 of the Act and McMillan & McMillan (2000) FLC 93-048
It is most unfortunate (to say the least) that BNL delayed in taking appropriate steps immediately upon receipt of the privileged documents. While Rule 31 of the Australian Solicitor Conduct Rules may not strictly apply the intended mischief to be addressed is absolutely clear in my view. The following actions should have been taken by BNL:
a)KLS should have been informed immediately;
b)The documents should all have been provided to KLS with a request as to whether privilege was claimed;
c)The husband should have been advised to destroy the documents in his possession and ensure all copies were destroyed;
d)Ms C should have ceased acting; and
e)The information barrier and undertakings should have been put in place.
It is only then that BNL might have been able to resist the injunction now sought.
I accept the submission made on behalf of the wife that the proposed information barrier is ‘too little too late’. Had such action been taken immediately upon receipt of the documents it may have sufficed but BNL continued to act for the husband for a further six months before even informing the wife of the situation. Ms C and Mr E worked as a team on the matter and while Mr E did not read the documents, Ms C did and the risk of unconscious contamination of the information provided to Mr E and others in the office (including to administration staff) renders the proposal inadequate. I have no confidence that the systems set up in recent times by BNL will achieve what it is intended to achieve. The risk of contamination is still high in my view given the fact that Ms C continued to act for the husband in conjunction with Mr E until July 2017. I note that it is still proposed by the husband that Mr E continue to act for him.
As Ipp J said in Mallesons Stephen Jaques v KPMG Peat Marwick:[20]
… There is, in my view, the real prospect that, even with the best will in the world, that information would colour, at least subconsciously, the approach of the solicitors and influence them in the performance of the tasks I have mentioned….
[20] (1990) 4 WAR 357 at 371
While the ‘rat may have bolted’ (to adopt the quote from Kingston) there is nevertheless utility in making the injunctions sought. While it may be the case that the husband will not be able to forget the content of what he has seen, the fewer persons involved in the proceedings with knowledge or potential knowledge of the content of the documents is still of benefit the wife.
I accept that the restraint sought is one that should be acceded to cautiously and that it will no doubt cause prejudice to the husband. I nevertheless come to the conclusion that a reasonably informed disinterested by-stander would conclude that the proper administration of justice requires that BNL cease to represent the husband and that all possible steps should be taken to protect the wife’s right to confidentiality.
As to the further restraints sought, I note that the husband has indicated his preparedness to consent to an order in terms of 3(a) and 4 above but it is submitted on his behalf that the further proposed restraint serves no utility and places the husband in an invidious position of exposure to contravention proceedings if he even subconsciously used the information he has received.
I reject the submissions made on behalf of the husband. The proposed further restraint extends the protection that should be afforded to the wife. A reference to the term ‘use’ of information is not exceptional. In the context of the more usual circumstances where such an application is made viz. restraining a solicitor from acting for a former client, Lord Millett stated in Prince Jefri Bolkiah v KPMG (a firm):[21]
Whether founded on contract or equity, the duty to preserve confidentiality is unqualified. It is a duty to keep the information confidential, not merely to take all reasonable steps to do so. Moreover, it is not merely a duty not to communicate the information to a third party. It is a duty not to misuse it, that is to say, without the consent of the former client to make any use of it or to cause any use to be made of it by others otherwise than for his benefit. The former client cannot be protected completely from accidental or inadvertent disclosure. But he is entitled to prevent his former solicitor from exposing him to any avoidable risk; and this includes the increased risk of the use of the information to his prejudice arising from the acceptance of instructions to act for another client with an adverse interest in a matter to which the information is or may be relevant.
[21] [1999] 2 AC 222 at 235-236
In Kingston an injunction in similar terms to that proposed was made by the court and was proposed to be made in GT.
If, contrary to the proposed order, the husband makes use of information derived from the documents he may well be at risk of prosecution for contravening the order. However he will only have contravened the order if he intentionally fails to comply with the order or makes no reasonable attempt to comply.[22]
[22] See s 112 AB of the Act
Accordingly, I propose to make an order restraining the husband from retaining BNL in the proceedings and to further restrain the husband as sought. I do not see the need in the circumstances of this case to make the order directly against BNL.
I certify that the preceding Sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 15 September 2017.
Associate:
Date: 14 September 2017
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