De Simone v Archer
[2009] VSC 432
•28 September 2009
IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE
COMMON LAW DIVISION
No. 8879 of 2009
| GIUSEPPE DE SIMONE | Plaintiff |
| and | |
| BRENDAN ARCHER AND OTHERS (ACCORDING TO THE SCHEDULE) | Defendants |
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JUDGE: | DAVIES J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 September 2009 | |
DATE OF JUDGMENT: | 28 September 2009 | |
CASE MAY BE CITED AS: | De Simone v Archer & Ors | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 432 | |
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LEGAL PRACTITIONERS – Solicitor – Application for injunctive relief to prevent solicitor from acting – Whether solicitor had procured or improperly used confidential information –Whether solicitor has a conflict of interest – Whether Court should exercise its inherent jurisdiction to prevent the solicitor from acting.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Guiseppe De Simone (in person) | |
| For the First, Second, Third and Fourth Defendants | Mr. R Gillard QC | Macpherson & Kelley Solicitors |
| For the Fifth, Sixth and Seventh Defendants | Mr. P S Lustig (Solicitor) | Peter S Lustig Barrister and Solicitor |
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HER HONOUR:
The plaintiff, who represented himself, seeks injunctive relief to restrain the first defendant (Mr Archer), a member of the firm of Macpherson & Kelley, and the second defendant (Macpherson & Kelley) from acting for the fourth defendant (ZMB) in Supreme Court proceeding 7608 of 2009 (the Lynpland proceeding) and orders directed to preventing Mr Archer, Macpherson & Kelley and the third defendant (Bevnol) from receiving confidential information from ZMB and other named persons and entities and to preserving the confidentiality of such information as they may have received. The application is supported by the fifth defendant (Management Co) and the sixth and seventh defendants, all represented by Peter Lustig, solicitor.
The background to, and basis of, the application was presented in a highly confusing manner. The plaintiff expressed his claim in terms of obstruction of justice and conflict of interest. There is no foundation on the material presented before me for either claim. The heart of the matter, when the material is distilled, is essentially the plaintiff’s interest in preventing the possibility that ZMB might disclose information to Macpherson & Kelley that may be used by Macpherson & Kelley to the detriment of the plaintiff or the partnership of which his company is a partner.
The plaintiff is not a client, or former client, of Macpherson & Kelley. Macpherson & Kelley act for Bevnol in proceedings in the Victorian Civil and Administrative Tribunal (the VCAT proceeding) brought by Management Co, of which the plaintiff is the sole director. Management Co is suing Bevnol and its directors for breaches of a building contract under which Bevnol agreed to construct units for Management Co on land in Ocean Grove. Bevnol has counterclaimed against Management Co, the plaintiff and two others. The counterclaim includes allegations of misleading and deceptive conduct on the part of the plaintiff with respect to the finance required for the project. The alleged misleading and deceptive conduct is also the subject of criminal charges that have since been laid against the plaintiff, arising out of a complaint by one of Bevnol’s directors to Victoria Police.
The plaintiff has deposed in his affidavit material in this proceeding that Management Co was “the bare nominee” of the Seachange Development Partnership in the dealings with Bevnol that are the subject of the VCAT proceeding.[1] The partners of the Seachange Development Partnership at the relevant time included ZMB and De Simone Nominees Pty Ltd (DSN), a company related to the plaintiff. The plaintiff’s concern is that ZMB may disclose confidential information about, and concerning, the affairs of the Seachange Development Partnership to Macpherson & Kelley when the firm effectively, in the plaintiff’s view, acts against that partnership in the VCAT proceeding. At paragraph 17 of his affidavit the plaintiff deposed:
As [Management Co] was suing Bevnol and being sued by it, the partners in the Seachange Development Partnership met regularly and exchanged strategies and updates in relation to that litigation through the course of the early part of 2007. The partners were aware that any settlement of the Bevnol litigation would directly affect them and they would need to fund it. Each of the partners were aware that they were the effective principals in the litigation and personally liable for the costs thereof.
[1]The Deed of Partnership is an exhibit to the affidavit of Peter Simon Lustig sworn 18 September 2009 in the Lynpland proceeding. Clause 3 provides:
The partners acknowledge that a Manager must be appointed as manager and agent of the Partnership and all administrative and management functions of the Partnership will be performed by [Management Co] as nominee for the Partnership in accordance with and subject to any directions issued by the Partnership.
The schedule lists Management Co as the partnership manager.
Two members of the Seachange Development Partnership, ZMB and DSN, are defendants in the Lynpland proceeding, which was commenced in 2009 in the New South Wales Supreme Court. The statement of claim, in short compass, sues on an alleged joint venture agreement for the development of the land in Ocean Grove. This joint venture has been described by the plaintiff in this proceeding as the “Seachange Management Partnership” which became reconstituted as the “Seachange Development Partnership”. It is unnecessary for the purposes of this proceeding to determine whether the relationship was actually one of partners or that of a joint venture. It is the commonality of identity of “partners” that is of significance to the plaintiff’s application. ZMB initially engaged NSW solicitors to act on its behalf but once the proceedings were transferred to Victoria under the cross vesting legislation in June 2009, ZMB sought representation from local solicitors and in July 2009, ZMB asked Macpherson & Kelley to act on its behalf. Mr Archer has deposed that he reviewed the statement of claim in the Lynpland proceeding before agreeing to act and that upon reading the statement of claim he determined that Macpherson & Kelley could act for ZMB in the Lynpland proceeding. On 14 August 2009 he had an appearance entered.
The plaintiff seeks the injunctive relief on three bases:
(a)that Mr Archer and Macpherson & Kelley are in a position of conflict, acting for ZMB in the Lynpland proceeding and effectively against ZMB as a partner of the Seachange development partnership as represented by Management Co in the VCAT proceeding;
(b)that Mr Archer and Macpherson & Kelley have knowingly procured from ZMB information that ZMB has a duty to the Seachange Development Partnership to keep confidential;
(c)that Mr Archer and Macpherson & Kelley have used or seek to use that confidential information for the improper motive of benefiting Bevnol in the VCAT proceeding.
It is appropriate to deal first with the grounds of knowing procurement of confidential information and improper use of that information. These are very serious allegations that are wholly unsubstantiated. The plaintiff had no proper basis for making them and Mr Lustig had no proper basis for supporting them. The material relied on by the plaintiff does not justify the contentions as the plaintiff has not shown that Macpherson & Kelley has obtained any confidential information from ZMB, let alone knowing procurement of information that ZMB has some duty to keep confidential. The contention that Macpherson & Kelley has such information was based on two documents that are in the possession of Macpherson & Kelley. Those documents were produced in court. There is no basis for the contention that either document is, or contains, confidential information. The first document is an affidavit that the plaintiff filed in proceedings before the Court of Appeal, the contents of which the plaintiff accepts are not confidential. The second document is an exhibit to an affidavit that Mr Archer obtained from a court file and exhibited to an affidavit in the VCAT proceeding in October 2008. The plaintiff’s case rested on a letter dated 27 August 2009 from an executive principal at Macpherson & Kelley to Mr Lustig, who wrote that Mr Archer had informed him that at the time of inspection of the relevant Supreme Court file “all exhibits to the affidavits filed and served in those proceedings were sealed and accordingly [Mr Archer] was unable to access those exhibits”. But Mr Archer had deposed in his affidavit as to the source of that exhibit. The letter does not justify a conclusion that Macpherson & Kelley obtained the exhibit in breach of confidence.
There is no evidence before me of any disclosure of confidential information by ZMB to Macpherson & Kelley. In Mancini v Mancini,[2] Bryson J stated:
A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.[3]
The onus is on the person who asserts the confidentiality to identify definable relevant information, the confidentiality of which the person seeks to preserve. The plaintiff has not done so.
[2][1999] NSWSC 800 (Unreported, Bryson J, 6 August 1999).
[3]Ibid [7].
The allegation that Mr Archer and Macpherson & Kelley have used, or seek to use, confidential information for the improper motive of benefiting Bevnol in the VCAT proceeding is without foundation and must be rejected.
The application must fail, insofar as the plaintiff bases his claim for relief upon those allegations.
That leaves the claim for relief based on conflict of interest. The basic proscription is that a lawyer must avoid a conflict of interest between two or more clients and this is reflected in the Law Institute Practice Rules. The justification is the duty of loyalty that a lawyer owes to his or her client to act in that client’s interests and to preserve the confidences of that client. The plaintiff, however, is not the client, past or present, of Macpherson & Kelley. The confidentiality of information that the plaintiff seeks to protect by restraining Macpherson & Kelley from acting for ZMB in the Lynpland proceeding is not information given to the solicitors in a lawyer-client relationship with the plaintiff. Therefore, the claim to restrain Macpherson & Kelley depends on the plaintiff being able to show some duty of confidentiality arising independently of the lawyer-client relationship. In that regard, the Court has inherent jurisdiction to ensure the due administration of justice and to protect the integrity of the judicial process.[4] The Court may exercise that jurisdiction where a fair minded reasonably informed member of the public would conclude that the proper administration of justice requires that the lawyer be prevented from acting, giving due weight to the public interest that litigants should not be deprived of their choice of lawyer without good cause.[5]
[4]Grimwade v Meagher [1995] 1 VR 446; Main-Road Property Group v Pelligra & Sons [2007] VSC 43 (Unreported, Bell J, 1 March 2007).
[5]Grimwade v Meagher [1995] 1 VR 446.
I have concluded that a fair minded reasonably informed member of the public would not conclude that the proper administration of justice requires that Macpherson & Kelley be prevented from acting for ZMB.
First the plaintiff has not shown that Macpherson & Kelley is in possession of any confidential information about the plaintiff or the partnership. The plaintiff has not identified information confidential to him or to the partnership in the possession of Macpherson & Kelley that the firm may use to the plaintiff’s or the partnership’s prejudice.
Secondly, I am not satisfied that there is any real possibility that such information, if possessed by Macpherson & Kelley, would be misused to the detriment of the plaintiff or the partnership. Although there appears to be some commonality in the identity of the entities comprising the Seachange Development Partnership and the Seachange Management Partnership/joint venture, the issues in the Lynpland proceeding on the face of the pleadings do not appear to be related to the issues in the VCAT proceeding. I am not satisfied on the evidence as presented to me that the concerns on the part of the plaintiff about the misuse of confidential information are other than theoretical.
Accordingly, there is in my view no justification on the material before me for restraining Macpherson & Kelley from acting for ZMB in the Lynpland litigation and no justification for the other relief that is sought. The application will be dismissed.
The plaintiff in oral and written submissions raised many other factual and legal matters in support of his application. I have dealt with them in so far as they were matters that, in my view, properly and relevantly bore upon the plaintiff’s entitlement to relief. The submissions that I have not dealt with specifically were without merit to this application.
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SCHEDULE OF PARTIES
| No. 8879 of 2009 | |
| BETWEEN: | |
| GIUSEPPE DE SIMONE | Plaintiff |
| - and - | |
| BRENDAN ARCHER | Firstnamed Defendant |
| MACPHERSON & KELLEY LAWYERS PTY LTD ACN 129 746 470 | Secondnamed Defendant |
| BEVNOL CONSTRUCTIONS & DEVELOPMENTS PTY LTD (ACN 079 170 577) | Thirdnamed Defendant |
| ZMB AUSTALIA PTY LTD (ACN 105 746 067) | Fourthnamed Defendant |
| SEACHANGE MANAGEMENT PTY LTD (ACN 091 443 211) | Fifthnamed Defendant |
| INTERESTING DEVELOPMENTS PTY LTD (ACN 118 923 890) | Sixthnamed Defendant |
| GALAMBOS PTY LTD (ACN 109 844 742) | Seventhnamed Defendant |
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