Fowler and Liddle & Anor
[2012] FamCA 450
•15 June 2012
FAMILY COURT OF AUSTRALIA
| FOWLER & LIDDLE AND ANOR | [2012] FamCA 450 |
| FAMILY LAW - INJUNCTION – Application to restrain solicitor and his firm acting for the wife in substantive proceedings – Solicitor previously acted for husband in various litigious matters including criminal proceedings, child support and property proceedings in relation to his previous marriage and conveyancing matters – Delay in raising the issue determined not a preclusion to grant of relief – Application granted. FAMILY LAW - COSTS – Application for costs by both parties in event successful in these proceedings – Balancing all relevant s 117(2A) of the Family Law Act 1975 (Cth) considerations, determination that no order for costs be made. |
| Family Law Act 1975 (Cth) |
| Billington & Billington (No. 2) [2008] FamCA 409 Gagliano (1989) FLC 92-012 Griffis (1991) FLC 92-233 Karapataki & Karapataki [2011] FMCAfam 6 Kossatz (1993) FLC 92-386 In the marriage of Magro (1989) FLC 92-005 McGillivray v Mitchell (1998) FLC 92-818 McMillan & McMillan [2000] FamCA 1046, (2000) FLC 93-048, 26 Fam LR 653 Mills v Day Dawn Block Gold Mining Company Limited; In re Marsland (1882) QLJ 62 Penfold v Penfold (1980) 144 CLR 311, (1980) FLC 90-800 Pond & Thurga (No. 2) [2007] FamCA 587 Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831 Stewart [2000] FamCA 1039 Thevenaz (1986) FLC 91-748 Vasik v Vasik [2007] FamCA 671, 38 Fam LR 262 |
| APPLICANT: | Mr Fowler |
| RESPONDENT: | Ms Liddle |
| THE SOLICITOR | Mr C |
| FILE NUMBER: | NCC | 3033 | of | 2010 |
| DATE DELIVERED: | 15 June 2012 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Collier J |
| HEARING DATE: | 12 June 2012 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Kevin Byrnes Byrnes & Cox Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Rhys O'Brien |
| SOLICITOR FOR THE RESPONDENT: | Mr C C Law Firm |
Orders
That Mr C and C Law Firm be and are hereby restrained from continuing to act for Ms Liddle in the proceedings between the said Ms Liddle and Mr Fowler.
That there be no order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fowler & Liddle and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: NCC 3033 of 2010
| Mr Fowler |
Applicant Husband
And
| Ms Liddle |
Respondent Wife
And
| Mr C |
The Solicitor
REASONS FOR JUDGMENT
Introduction
Mr Fowler (“the husband”), by his Application in a Case filed 1 June 2012, seeks orders restraining the wife’s solicitor, Mr C (“the solicitor”), and his firm, C Law Firm (“the firm”), from continuing to act for the wife.
It is the husband’s case that the solicitor acted for him in respect of a number of litigious matters and thus, relying on a weight of authority from decided cases, the solicitor and his firm should not continue to act for the wife in proceedings against the husband.
The Response to the Application in a Case filed by the solicitor on 12 June 2012 is that for a number of reasons, to which I will return later in these reasons for Judgment, the husband has not made out a case requiring him, or the firm, to cease to act on behalf of the wife.
A brief background to the matter is of assistance.
Background
The wife filed an Application for Final Orders in respect of property on 18 March 2011.
On 28 April 2011, the matter was before a Registrar. The issue of the solicitor continuing to act for the wife was not raised.
On 14 June 2011, the husband filed a Response to the wife’s application and an Application in a Case for interlocutory orders. No mention was made of the solicitor ceasing to act for the wife.
On 16 June 2011, the matter was again before a Registrar. The issue of the solicitor continuing to act for the wife was not raised.
On 5 September 2011, the matter was in a Registrar’s duty list and was then transferred to myself for interim relief. I heard and dismissed an application of the husband, which had been filed on the 14 June 2011. No mention was made of the solicitor ceasing to act for the wife.
On 13 December 2011, the matter was listed for telephone directions before a Registrar. On that occasion, the issue of the solicitor continuing to act for the wife was again not raised.
On 20 January 2012, the matter was before a Registrar for a conciliation conference. During the course of that conference, the then solicitor for the husband raised as an issue whether or not the solicitor for the wife could continue to act for her. That was put on the basis that the solicitor had acted for the husband previously in relation to an assault by the husband on his first wife. The solicitor for the wife asserts, however, that no formal objection was taken at that time.
The matter came before me on 6 March 2012. A number of procedural Orders were made. The issue of the solicitor not being permitted to act for the wife was not raised.
On 5 April 2012, the matter was again before me. A series of procedural Orders were made. The issue of the solicitor not being permitted to act for the wife was not raised.
On 27 April 2012, the solicitor now acting for the husband wrote to the solicitor, making the husband’s position clear that the solicitor, having previously acted for the husband, would be precluded from acting against him in the current proceedings.
For whatever reason, that letter was not responded to in any fashion. A correct copy of that letter is annexure A to the husband’s affidavit sworn 6 June 2012.
On 1 June 2012, the husband’s present solicitor filed an application seeking that the solicitor and the firm be restrained from continuing to act for the wife. By coincidence, the matter was before me on 1 June 2012 in relation to a call over. I then set this present application down for hearing on a date to be fixed, and the date subsequently allocated was 12 June 2012.
On that occasion, I received written submissions from the legal representatives of both sides and heard submissions from them. No cross-examination was required of any deponent.
The parties’ documents
The husband relied upon his Application in a Case filed 1 June 2012.
He relied upon the following affidavits in support:-
b)Affidavit of Mr Kevin Patrick Byrnes sworn 7 June 2012 and e-filed 7 June 2012;
c)Affidavit of Mr Fowler sworn 6 June 2012 and e-filed 7 June 2012;
d)Affidavit of Mr Kevin Patrick Byrnes sworn 31 May 2012 and e-filed 31 May 2012.
An initial objection was taken by Counsel for the wife to the husband relying on more than one affidavit. This objection was not seriously pressed and I allowed the husband to rely on each of the affidavits filed.
The solicitor for the wife relied upon his Response to an Application in a Case filed 12 June 2012 and his affidavit sworn 11 June 2012 and filed 12 June 2012.
The husband’s case
The husband’s case is that the solicitor for the wife has acted for him in the past in relation to a number of matters.
The husband sets out at paragraph 4 of his affidavit that the matters were:-
·one or more conveyancing transactions;
·one or more criminal matters;
·property settlement proceedings in relation to his first wife; and
·child support matters relating to his first wife.
It is the husband’s case that, by reason of so acting on his behalf, the solicitor was provided with confidential information. This, his present solicitor submits, is sufficient to have the solicitor restrained from continuing to act for the wife.
The solicitor’s case
The solicitor very fairly concedes that he did act on behalf of the husband in relation to a number of matters. He agrees that he acted for the husband in respect of an application for dissolution of marriage. This was bought to his attention under cover of a letter from the Legal Services Commissioner, to which I will make further reference later in these reasons for Judgment.
The solicitor says that he acted for the husband in a criminal proceeding in the mid 1990s. He recalls the husband was charged with assault occasioning actual bodily harm, and his first wife was the alleged victim. The solicitor’s recollection is that he acted for the husband in an appeal to the District Court from the Local Court. He delivered a brief to counsel.
It was conceded that, in the current proceedings, the wife will allege violence by the husband towards her.
The solicitor also deposes to having acted for the husband in relation to child support proceedings. He indicates that this was in relation to a variation of child support sought by the husband’s previous wife. He indicates that in that matter instructions were provided to him by the husband and the wife.
The solicitor confirms that he acted for the husband and the wife in a conveyancing matter.
However, it is his (the solicitor’s) case that, in the absence of some indication of the confidential information he may have received in so acting, an order ought not be made restraining him. Further, he relies upon the delay on the part of the husband in seeking to restrain him from acting, as a reason for refusing to grant relief sought by the husband.
The law to be applied
I have been referred to a number of decided authorities by the legal representatives of the husband and the solicitor.
The Full Court of the Family Court of Australia dealt with the issue of restraining a lawyer from acting in the decision of McMillan & McMillan[1]. In the course of their Judgment, their Honours made reference to a substantial number of reported cases, both in the Family Court, and generally.
[1] [2000] FamCA 1046, (2000) FLC 93-048, 26 Fam LR 653
So far as matters in the Family Court were concerned, their Honours made reference to Thevenaz[2], Magro[3], Gagliano[4], Griffis[5], Kossatz[6] and the unreported decision of Stewart[7]. From paragraph 41 of their Honours Judgment, they examined the authorities. Their Honours contrasted the authorities referred to with the line of authority that may be described as the narrow approach. Their Honours made reference to cases such as Rakusen v Ellis, Munday & Clarke[8]. Their Honours said that the narrow approach involved a Court only intervening to restrain a solicitor if it were convinced that real mischief and real prejudice would follow if the solicitor were allowed to continue to act. Their Honours found that this test was not appropriate for proceedings in the Family Court.
[2] (1986) FLC 91-748
[3] (1989) FLC 92-005
[4] (1989) FLC 92-012
[5] (1991) FLC 92-233
[6] (1993) FLC 92-386
[7] [2000] FamCA 1039
[8] [1912] 1 Ch 831
Their Honours made reference to the test as proposed in Mills v Day Dawn Block Gold Mining Company Limited; In re Marsland[9], which found that it was the duty of the attorney not to place himself in such a relationship as might lead to there being even an unwitting breach of duty.
[9] (1882) QLJ 62
Their Honours of the Full Court, at paragraph 56 of their Judgment, made reference to the decision of Lindenmayer J in Stewart (supra). Lindenmayer J said, and this was cited with approval by their Honours of the Full Court, “(a)ll that is necessary is that the (wife) swears that (she) has conveyed confidential information to the solicitors and that (she) believes, not unreasonably, that that information may be used against (her), or at least to her disadvantage, in these current proceedings.”
Further, their Honours found that there need be only a theoretical risk of prejudice rather than proof of actual prejudice.
I am satisfied that this is the test to be applied in determining whether or not to restrain a solicitor from continuing to act.
In written submissions to me, the solicitor for the husband made reference to the decision of a Federal Magistrate in Karapataki & Karapataki[10]. The test that the learned Federal Magistrate distilled was as follows (at paragraph 45):-
[10] [2011] FMCAfam 6
(a)The party seeking the restraint (“the complaint”) must:
i)raise a prima facie case that he or she has provided confidential information to the legal practitioner; and
ii)demonstrate that there at least [is] a theoretical possibility that the confidential information could be used to the advantage of the other party, or, alternatively, to the disadvantage of the complainant.
(b)In order to meet the two requirements in (a) above, the complainant need do no more than depose to the fact that he or she –
i)has conveyed confidential information to the legal practitioner; and
ii)believes, not unreasonably, that the confidential information may be used against him or her, or to his or her disadvantage, in the current proceedings.
Her Honour, Justice Carter as she then was, in the matter of Vasik v Vasik[11] found that, in reliance on the decided authorities, in order to succeed the Applicant need only give evidence that he or she has conveyed information of a confidential nature to the practitioner in question and that there is at least a theoretical possibility that it could be used against him.
[11] [2007] FamCA 671, 38 Fam LR 262
I am satisfied that Her Honour’s decision clearly sets out the applicable test.
Counsel for the solicitor made reference to Billington & Billington (No. 2)[12]. In that case, Coleman J summarised comments made by O’Ryan J in Pond & Thurga (No. 2)[13]. Coleman J adopted the following comments:-
i.the Court’s jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is not real risk of disclosure);
ii.that the exercise of the Court’s jurisdiction to restrain its officers from acting in matters is to be regarded as exceptional and is to be exercised with caution;
iii.due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause; and
iv.the timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.
[12] [2008] FamCA 409
[13] [2007] FamCA 587
Oral submissions
In oral submissions, the solicitor for the husband put to me that the solicitor should not have accepted instructions from the wife knowing, as he did, of his involvement with the husband, as his solicitor on previous occasions. So far as the issue of delay was concerned, it was put to me that the husband was not using this application as a means of delaying the proceedings, such as was referred to by their Honours in McGillivray v Mitchell[14]. Rather, it was put on behalf of the husband that he wished to proceed with the matter as quickly and as expeditiously as possible, as he was being held out of any benefits of the parties’ properties until the matter was heard and determined.
[14] (1998) FLC 92-818
The Counsel for the solicitor put to me that, whilst he conceded the broader test was applicable, the husband nonetheless bore an evidentiary burden to establish a prima facie case that he (the husband) had provided confidential material or information to the solicitor. As I understood it, it was his case that there had to be some identification of what information had been passed. It was put to me, with some force, that it was not the perception of the client, but that of the reasonable man that was involved.
I am satisfied that applying the test that I have found applicable to matters of this type, the establishment of a prima facie case is made out by the Applicant husband swearing that confidential information has been conveyed to the solicitor and that the husband holds a belief that the information may be used against him, or at least to his disadvantage. I am satisfied that the husband has complied with these requirements. His statement at paragraph 5 of his affidavit sworn 6 June 2012 asserts that the husband provided the solicitor with “confidential information in relation to various actions, business practices etc”. At paragraph 15 of that same affidavit, the husband deposes that he has discussed matters of a confidential nature with the solicitor. He asserts that he is most uncomfortable about the solicitor being able to use such information against him.
I do not accept that there is some need at a prima facie level to identify with any precision the confidential material said to be involved, and which forms the basis of this application.
Discussion
In all the circumstances of this case, I have come to the conclusion that the Applicant husband has satisfied me that he is entitled to be concerned that information that he passed to his then solicitor was of a confidential nature, intended to enable his then solicitor to advise and assist him in relation to various matters in which he was involved. I am particularly concerned that some of the material provided by way of instructions, of which I am satisfied amounted to confidential information, dealt with the issue of a serious assault upon his first wife. As it is to be part of the wife’s case in the final hearing of this matter that the husband has physically assaulted her during the course of their marriage, I find that there is a very strong nexus and connection between the type of information that the husband conveyed to the solicitor in respect of the charge against him involving his first wife, and an allegation in the present proceedings that the husband assaulted the wife.
I am satisfied that the husband is entitled to feel that confidential information passed to the solicitor in respect of his first wife may be used to his disadvantage in the present case. I am satisfied that any fair minded observer knowing the details of the matter would be satisfied that the husband was entitled to hold a concern.
Further, there is the matter involving child support. On the scant evidence before me, it is apparent that the husband was seeking to minimise his exposure to child support in respect of the children of his first marriage. The solicitor asserts that in respect of that matter, he took instructions from both husband and the wife. I am again of the view that the husband is entitled to hold a concern that the information conveyed by him to the solicitor in respect of that matter could again become involved and in some way be used in a manner detrimental to him in respect of the proceedings for property settlement between he and the wife.
I am satisfied that, in respect of those two matters particularly, the husband is entitled to hold a real concern as to the manner in which information conveyed by him to the solicitor, being confidential information conveyed by client to solicitor, could be used to his detriment in the present proceedings.
I turn then to the issue of delay.
Delay
I was referred to the decision of the Full Court McGillivray (supra). That case, it was said, was of particular relevance because their Honours of the Full Court had held that it was incumbent for a litigant, holding a genuine concern about a former legal advisor acting against him in later proceedings, must take the point at the earliest possible opportunity. It is clearly the case of the solicitor for the wife in these proceedings that that was not done here.
On the authority of McGillivray (supra), delay may be a reason for not making an order restraining the solicitor. However, to my mind, it is not of itself an absolute bar to success in obtaining a restraining order.
In my view, the case for the husband is a strong one. The types of matters in which he engaged the solicitor’s services were serious. Whilst I accept that it is unnecessary for the husband to prove any actual knowledge on the part of the solicitor, it is clear from his own detailed affidavit that the solicitor does have some recollection of the matters in which he acted for the husband.
To my mind, one of the matters to which that may be relevant is the issue of whether or not the solicitor should or ought to have accepted instructions from the wife at the commencement of the proceedings. I am prepared to find that he must have known that he had previously represented the husband. He should have known, at the time he took instructions from the wife, the type or kind of matters in which he had previously acted for the husband. It appears to me that if he had given the matter thought at the time of his first interview with the wife, he would have come to the conclusion that, having regard to his previous relationship with the husband, i.e., that of solicitor and client, he should not undertake the task of acting for the wife.
However, he asserts that, particularly having regard to McGillivray (supra), the husband ought not have allowed the matter to go as long as it did without raising the issue of his prior involvement.
I accept that the first time that any mention of the solicitor not acting was made in January 2012 before a Registrar. I am satisfied that at that time there was a responsibility upon the solicitor to again consider his position as to whether he should continue to act. I am not satisfied that it is open to him to merely say that the issue of him not acting was not strenuously pursued on behalf of the husband. Rather, I believe that, as a practitioner of many years standing, he ought to have realised that his position in acting for the wife was, at least at that point in time, no longer open to him.
The husband, as asserted by his present solicitor, was endeavouring to have his former solicitors raise the issue of the solicitor acting for the wife. I have no evidence that this was the case. No material is put before me to support this contention.
However, it is clear that the husband was concerned about this aspect of the matter to the point that he contacted the Legal Services Commissioner. The date of his communication with the Legal Services Commissioner is unknown and cannot be gleaned from the material before me. However, it is clear that the husband was objecting to the solicitor continuing to act for the wife.
Subsequent communication by the Legal Services Commissioner to the solicitor did not bring home to the solicitor the realisation that he should not continue to act in the matter.
A letter, to which I have made reference, was written by the husband’s present solicitors. That letter went unanswered. To my mind, that letter was a further opportunity for the solicitor for the wife to realise the difficulty of his position and withdraw from the matter.
Finally, the application, with which I am concerned, was made and once more the solicitor chose, rather than accepting what in my view was the inevitable, to challenge the husband and assert that he ought to be permitted to remain in the matter.
I am aware that Coleman J in Billington (supra), observed that due weight should be given to the public interest in a litigant not being deprived of the lawyer of their choice without due cause, and further, the timing of the application may be relevant in that cost and inconvenience or impracticality requiring a lawyer ceasing to act and that party to retain a new lawyer may provide a reason for refusing to grant relief.
It will be remembered that in Billington (supra) the application for restraint was based on a solicitor in the wife’s firm having previously been employed by the firm acting for the husband and had appeared at a directions hearing on behalf of the husband. His Honour went to pains to dissect the information that may have come into the hands of that solicitor, who was briefed by another solicitor to appear on the mention date.
That is very different from the factual situation in this present case. Here, the solicitor took direct instructions from the client concerning matters of significance. In the course of that being done, the client asserts confidential information was passed.
Whilst I am aware that there will be inconvenience caused to the wife by having to obtain further legal representation, I am not satisfied that the husband has sought to use this application as a device so as to delay or deliberately cause further cost and expense to the wife. It may be seen as unfortunate that this matter was not bought to a head much earlier by the husband taking positive and forceful action to achieve the result he now seeks. However, balanced against that is my view that the solicitor ought at various stages, i.e., at the time of taking initial instructions from the wife, at the time of the conference in January 2012 with the Registrar, upon receipt of the letter from the Legal Services Commissioner, and upon receipt of the letter from the husband’s present solicitors, to have considered his position and formed for himself the intention that he should not continue to act.
In all the circumstances of the case, I am satisfied that the delay in bringing this matter before the Court should not be considered such as to prevent the injunctive relief sought by the husband being granted. However, it may have some bearing on the issue of the parties’ costs, an issue which I am also being asked to determine.
Accordingly, I propose to grant an injunction that neither the solicitor nor the firm shall continue to act on behalf of the wife in these proceedings.
I turn then to the issue of costs.
Costs
The legal representative for each party has sought that, in the event they are successful, an order for costs ought be made in their favour.
Costs in the Family Court are governed by section 117 of the Family Law Act 1975 (Cth). Subsection (1) makes it clear that the usual course is that each party should bear their own costs. Subsection (2), however, makes it clear that if there are circumstances that justify in so doing, the Court may make an order for costs. In Penfold v Penfold[15], their Honours of the High Court made it clear that the circumstances requiring an order be made need not be exceptional, but they must justify the making of an order.
[15] (1980) 144 CLR 311, (1980) FLC 90-800
Subsection 117(2A) sets out the matters to which I must have regard. The first of those matters is the financial circumstances of the parties (subparagraph (a)). I know very little about the financial circumstances of the parties at this point in time. The husband asserts that the wife has in effect assumed control of the parties’ asset and income stream and that he is without any form of income or support. It is clear from what little I know of the matter, that the wife and her son appear to have control of the business formerly conducted by the husband.
Neither party is in receipt of legal aid (see subparagraph (b)).
These proceedings were not necessitated by the failure of a party to comply with any previous order (see subparagraph (d)).
The question of an offer made in writing is not relevant here (see subparagraph (f)).
To my mind, the most relevant factors, which I will deal with conjointly, are the conduct of the parties to the proceedings (subparagraph (c)), whether any party has been wholly unsuccessful (subparagraph (e)) and such other matters as to the Court seem relevant (subparagraph (o)). It is apparent that the solicitor has been unsuccessful in his attempt to resist the making of an order against him. That of itself may be sufficient to ground an order for costs in favour of the husband.
However, I take into account that the husband did not appear to pursue his claim that the solicitor should cease to act with any vigour until he made a complaint to the Legal Services Commissioner and changed to his present solicitors, who then wrote to the solicitor acting for the wife.
The letter to the Legal Services Commissioner is not before me in evidence. However, from the terms of the letter from the Legal Services Commission to the solicitor, it is clear that this is a matter of concern for the husband, and was certainly so when he made his complaint. It is perhaps unfortunate that the complaint was made against the solicitor for the wife, and not the solicitor then acting for the husband.
I am satisfied that the conduct of the husband, however, in not acting as swiftly as he may have done up to and including the letter of complaint to the Legal Services Commissioner and his change of his own legal representatives, is something that I should take into account on the issue of costs in the solicitor’s favour.
Finally, under the last consideration (subparagraph (o)), I believe that I am entitled to look at the justice of the situation. The solicitor has performed work in preparing his present client’s case. The case is, once this issue of who is to act is disposed of, ready to be allocated a hearing date.
My order restraining the solicitor from continuing to act must inevitably have the effect of requiring the wife to obtain new legal representation. That will undoubtedly involve her in further and additional costs over and above the costs that would have been required had she continued to retain the solicitor.
Balancing all these matters, I have come to the conclusion that, in the circumstances, it would be inappropriate for me to make any order as to costs. That is to say that there will be no award of costs in favour of the husband as against the solicitor and/or the wife, and there will be no award of costs in favour of the solicitor and/or the wife as against the husband.
The orders that I make then are these:-
(1)That Mr C and C Law Firm be and are hereby restrained from continuing to act for Ms Liddle in the proceedings between the said Ms Liddle and Mr Fowler.
(2)That there be no order as to costs.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Collier delivered on 15 June 2012.
Legal Associate:
Date: 15 June 2012
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