Gugiatti v City of Stirling

Alfred Antonio Gugiatti has brought an action against the City of Stirling (the City) in the Supreme Court of Western Australia. McLeod & Co, a firm of solicitors, acted for Mr Gugiatti in the matter between 1990 and 1994. Denis McLeod, a partner in McLeod & Co, is now a partner in McLeods. McLeods are now acting for the City. Mr Gugiatti seeks to restrain McLeods from acting for the City against him on the ground that Mr McLeod may be a witness in the case and that he may use confidential information which he believes he gave to Mr McLeod during the time McLeod & Co were his solicitor. The City contends that McLeods are not McLeod & Co and that the solicitors who have always acted for the City in relation to Mr Gugiatti, have left their previous firm and have become partners in McLeods. The application was not opposed by McLeods, but by the City, albeit represented by McLeods. The City submits that McLeods are now "in a position akin to having represented the (City) since the commencement of the action". Templeman J held that it has been settled law for nearly a century that the mere fact that a solicitor has acted for a client in a particular matter does not of itself entitle the client to restrain the solicitor from acting against him in the same matter. However, if a solicitor is possessed of information which is confidential to his client, the solicitor cannot be permitted to act against his client unless there is no risk of disclosure. The risk must be real, and not merely fanciful or theoretical: but it need not be substantial. The test was established by the House of Lords in Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 (at 236-7) per Lord Millett. The test was adopted by Steytler J in Newman v Phillips Fox (a firm) (1999) 21 WAR 309 at 322. The court held that it was not for the court to determine the conflict of facts in a case where a client had made out a prima facie case for his protection. The court held that the former client should be required only to prove a prima facie case as to confidential material, the disclosure or use of which by the solicitor in the course of the conduct of the current proceedings for the present client would be prejudicial to the applicant. The court held that, provided the appropriate orders were made and undertakings given, the prospects of Mr Gugiatti's suffering any prejudice as a result of McLeods now acting against him were very remote indeed. The court held that McLeods should not be restrained from acting for the City on the ground that Mr McLeod acted previously for Mr Gugiatti. The court held that it was unlikely that Mr McLeod would be able to give any useful evidence in support of Mr Gugiatti's case. The court held that in the circumstances as they appeared at present, there was no reason to restrain McLeods from acting for the City on the ground that Mr McLeod may be a witness in the proceedings. The court concluded that the application was unsuccessful.