Dale v Clayton Utz (No 2) - [2013] VSC 54

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT ARBITRATION LIST

No 4655 of 2011

CHRISTOPHER ANTONY DALE	Plaintiff
V
CLAYTON UTZ (a firm)	Defendant

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JUDGE:	HOLLINGWORTH J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 – 24 January 2013
DATE OF JUDGMENT:	26 March 2013
CASE MAY BE CITED AS:	Dale v Clayton Utz (No 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 54	1^st revision 8 April 2013

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LEGAL PRACTITIONER – Barrister – Application to restrain defendant from retaining senior counsel in this proceeding – Application brought under inherent jurisdiction and to enforce duties of confidence and loyalty – Application granted

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Ehrlich	O’Donnell Salzano Lawyers
For the Defendant	Mr P Riordan SC Mr N De Young	Minter Ellison

TABLE OF CONTENTS

Introduction

Preliminary matters

Evidence relating to the issues

Dealings between Dale and Myers before the August 2004 meeting
The August 2004 meeting

Mr Dale’s affidavit evidence
Mr Dale’s oral evidence
Mr Myers’ evidence

Subsequent dealings between Dale and Myers
The lead up to Mr Dale’s termination
The 2005 phone call

Mr Dale’s affidavit evidence
Mr Dale’s oral evidence
Mr Myers’ evidence

The email to Mr Dale’s brother
Objections to Mr Myers acting in this proceeding
Mr Dale’s health problems

Evidence relating to credibility

Mr Dale removes documents from Clayton Utz
Mr Dale leaks the information in the documents
Solicitors’ correspondence about the leaks
Whether the solicitors’ correspondence adversely affects Mr Dale’s credibility
Whether Mr Dale’s explanation as to why he leaked documents affects his credibility

Conclusions of fact

The importance of the matters discussed with Mr Myers

Does Mr Myers owe a duty of loyalty to Mr Dale?

The nature and extent of the duty of loyalty
The August 2004 meeting
The 2005 phone call

Is there a risk of disclosure of confidential information by Mr Myers?

The protection of confidential information
The August 2004 meeting
The 2005 phone call

Should the court’s inherent jurisdiction be invoked here?

The nature and extent of the jurisdiction
Why the inherent jurisdiction should be exercised

Conclusion

HER HONOUR:

Introduction

Christopher Dale was, for many years, a litigation partner in the solicitors’ firm of Clayton Utz. In October 2005, Clayton Utz terminated Mr Dale’s partnership. One of the grounds now relied upon by the firm as justifying the termination was an alleged breach by Mr Dale of the firm’s pro bono policy, in relation to some matters involving a Mr and Mrs Ebner.

In September 2011, Mr Dale issued this proceeding, in which he claims that, in deciding to expel him, his former partners acted unlawfully and in breach of the partnership agreement.

The defence, which Clayton Utz filed in January 2012, was signed by Allan Myers QC.

By summons dated 14 February 2012, Mr Dale seeks an order restraining Clayton Utz from continuing to retain Mr Myers as its counsel in this proceeding. In summary:

(a) Mr Dale says that in August 2004 and November 2005 he sought…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 54
Decision Date: 26 March 2013

CaseChat Overview and Summary

In the Federal Court of Australia, the applicant, Dale, sought to restrain the respondent, Clayton Utz, from retaining senior counsel in this proceeding. The respondent was a law firm that had been involved in legal proceedings against the applicant. Dale's application was brought under the inherent jurisdiction of the court and to enforce the duties of confidence and loyalty owed by the respondent to the applicant. The application was made on the basis that the respondent had a conflict of interest in retaining senior counsel, who had previously acted for the applicant in the same matter.

The legal issues before the court were whether the respondent's retention of senior counsel would breach the duties of confidence and loyalty owed to the applicant, and whether the court had the inherent jurisdiction to restrain the respondent from doing so. The court held that the respondent's retention of senior counsel would indeed breach the duties of confidence and loyalty owed to the applicant, as it would create a conflict of interest. The court also held that it had the inherent jurisdiction to restrain the respondent from retaining senior counsel, as it was necessary to prevent a breach of the duties of confidence and loyalty.

The court granted the application and restrained the respondent from retaining senior counsel in the proceeding. The court held that the respondent's retention of senior counsel would be a serious breach of the duties of confidence and loyalty owed to the applicant, and that it was necessary to prevent such a breach. The court emphasised the importance of maintaining the integrity of the legal profession and the trust that clients place in their legal practitioners. The court made an order restraining the respondent from retaining senior counsel in the proceeding, and from disclosing any confidential information obtained from the applicant to senior counsel or any other person.

Orders