HABER & MANDEL
[2011] FMCAfam 1564
•23 November 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HABER & MANDEL | [2011] FMCAfam 1564 |
| Catchwords: FAMILY LAW – Lawyer – conflict of interest. |
| Grieves & Tully [2011] FamCA 617 Magro v Magro (1989) FLC 92-005 McMillan & McMillan [2000] FamCA 1046 |
| Applicant: | MS HABER |
| Respondent: | MR MANDEL |
| File Number: | BRC 5387 of 2011 |
| Judgment of: | Federal Magistrate Howard |
| Hearing date: | 23 November 2011 |
| Date of Last Submission: | 23 November 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 23 November 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hanlon |
| Solicitors for the Applicant: | Rosen Lawyers |
| Solicitors for the Respondent: | Holloway Jenkins |
ORDERS
That Warren Lance Rosen, the firm Rosen Lawyers of 1/393 Wondall Road, Tingalpa, Queensland, and any employee of that firm, be restrained from acting for the wife in these proceedings and the wife be restrained from continuing to retain the firm known as Rosen Lawyers, or any partner or employee of that firm, as her legal representative.
That Warren Lance Rosen and the firm Rosen Lawyers of 1/393 Wondall Road, Tingalpa, Queensland, be restrained from releasing any information to any person concerning the firm’s previous representation of Mr Mandel in respect of all matters in relation to which Mr Mandel provided instructions to Rosen Lawyers.
That the wife pay the husband’s costs of and incidental to the application fixed in the sum of $8,000.00 with such payment to be offset against the wife’s entitlement at the conclusion of the property proceedings.
That this matter be adjourned for Mention to 9.30 a.m. on 20 February 2012 in the Federal Magistrates Court of Australia at Brisbane.
IT IS NOTED that publication of this judgment under the pseudonym Haber & Mandel is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 5387 of 2011
| MS HABER |
Applicant
And
| MR MANDEL |
Respondent
EX TEMPORE
REASONS FOR JUDGMENT
A.These reasons were delivered ex tempore on 23 November 2011 and have been settled and corrected for grammatical errors and in order to convey the precise intention of the Court.
There are currently on foot property settlement proceedings involving the wife, Ms Haber and the husband, Mr Mandel. The parties in this particular case were married for approximately three years. The relationship began in 2006. At that time, the husband was in the throes of going through a property settlement with his former wife, (his wife prior to Ms Haber). In those earlier property settlement proceedings, the husband, Mr Mandel, was represented by Mr Warren Rosen. In the current case, Mr Rosen is the solicitor acting on behalf of the wife, Ms Haber.
The husband has objected to Mr Rosen continuing to act in the present proceedings. The husband initially attempted to settle the case directly with Mr Rosen. Mr Rosen told the husband he was acting on behalf of the wife. From April 2011 until June or July 2011, attempts were made to settle. The case couldn’t be settled. The husband then went to see another lawyer, namely, Holloway Jenkins. Within a couple of days of seeing those lawyers, Holloway Jenkins wrote to Mr Rosen and objected to him continuing to act on the basis that in earlier property settlement proceedings, some approximately four and a half or five years earlier, Mr Rosen had acted on behalf of the husband, Mr Mandel.
The contention on behalf of Mr Mandel is that Mr Rosen will, therefore, be in possession of confidential information, which could cause prejudice to the husband in the current proceedings. The husband has sworn an affidavit. It was filed on 8 September 2011. I note paragraphs 4, 5, 6, 7, 8, 9 and 10 and 11:-
“4. I am seeking an order restraining Mr Rosen from continuing to act for Ms Haber in these proceedings. I am also seeking an Order that Mr Rosen and Rosen Lawyers be restrained from releasing any information to any person, concerning their previous representation of me in relation to various legal matters.
5. I object to Mr Rosen continuing to act on Ms Haber’s behalf, because he previously represented me in relation to family law proceedings between me and my previous wife, Ms Mandel [my ex wife].
6. On 2 October 2006, I met with Mr Rosen and gave him instructions to act on my behalf in relation to Federal Magistrates Court proceedings regarding property settlement between me and my ex wife.
7. Thereafter Mr Rosen acted for me in relation to the proceedings. He continued to represent me until the proceedings were resolved and the resulting orders were carried into effect. My file with Mr Rosen was finalised in or about June 2007.
8. Whilst he acted for me, Mr Rosen met with me on a number of occasions, took detailed instructions from me, negotiated with my ex wife’s solicitors and represented me at a Conciliation Conference in the Federal Magistrates Court.
9. In the course of acting for me, I provided detailed instructions to Mr Rosen and revealed confidential information to him. Because he acted for me against my ex wife, Mr Rosen has personal knowledge of all aspects of the settlement between me and my ex wife and the legal proceedings between us. I am informed by my solicitors, and verily believe, that such information is relevant to the current proceedings between Ms Haber and I.
10. I fear that if Mr Rosen continues to represent Ms Haber in these proceedings, he may reveal to her information regarding the case he handled for me to assist her in these proceedings or that he may use information he obtained about me, while he acted for me, to my disadvantage.
11. I am also concerned that, through his personal knowledge of me as a client, Mr Rosen is aware that I suffer from depression and anxiety, and knows how these conditions affect me. He knows my strengths and weaknesses. I believe that, if he continues to represent Ms Haber, she will have an unfair advantage in having him represent her in negotiations between the two of us.”
The husband has stated that in the period of time when Mr Rosen was his lawyer that he did reveal confidential information to him. The wife maintained that (in paragraphs 6 and 7 of her affidavit filed 30 September 2011) she was made aware of all these various items and matters – the so-called confidential information. The submission is that the information is no longer confidential. But I do take the view that it really is not possible for the wife to be certain that everything that was told to the solicitor was also told to her.
There are just so many aspects to instructions between a client and a solicitor, a myriad of facts, information, background and so on. I am not satisfied that the wife could be aware of everything that was said by Mr Mandel to Mr Rosen when Mr Rosen acted as his lawyer. I have been referred to several cases. I have been referred to one case in particular. The name of the leading case relied upon by the parties is McMillan & McMillan [2000] FamCA 1046. I note there are convenient dot points in the head note relating to matters of principle. And Mr Hanlon, counsel who appears on behalf of the wife has set those out in his written outline as well. I will include here the first two dot points.
“It has been accepted in this Court, at least since the decision of Frederico J. in Thevenaz (1986) FLC 91-748, that the Court “has power to make orders restraining a firm of solicitors from continuing to act for one of the parties to proceedings in this Court, if it is of the view that it would be likely that those solicitors may have confidential information relating to the other party to the proceedings arising out of a former relationship of solicitor and client with that party which may be used to the advantage of the present client or to the disadvantage of the former client in the current proceedings”. See also Magro (1989) FLC 92-005, Gagliano (1989) FLC 92-012, Griffis (1991) FLC 92-233, Kossatz (1993) FLC 92-386, and Stewart (Lindenmayer J., 17 April 1997, unreported).
The narrow or English approach which involves a Court only intervening to restrain a solicitor if it is convinced that real mischief and real prejudice will follow if the solicitor is allowed to continue to act (see Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831, Sogelease Aust. Ltd. v MacDougall and Ors (Wood J., NSW Supreme Court, 17 July 1986, unreported), D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118) not followed. (See also Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd and Others [1995] VicRp 1; [1995] 1 VR 1). It is sufficient if a party swears that he or she has conveyed confidential information to his/her solicitors and he or she believes that information may be used to his/her disadvantage in the proceedings; there only needs to be a theoretical risk of prejudice, there need not be proof of prejudice see: Mills v. Day Dawn Block Gold Mining Company Limited; In re Marsland (1882) QLJ 62 and Thevenaz (1986) FLC 91-748.”
I note that the view of the Court was – it is sufficient if a party swears that he has conveyed confidential information to his solicitor and he believes that information may be used to his disadvantage in the proceedings. The Court went on to accept that there only needs to be a theoretical risk of prejudice. There need not be proof of prejudice. I note further in particular that the Court rejected a narrow English approach, whereby a Court would only intervene to restrain a solicitor if it was convinced that real mischief and real prejudice were to follow. I reiterate that the Court in McMillan & McMillan (supra) rejected that approach.
The situation here is that there is evidence to show that confidential information was conveyed by Mr Mandel to Mr Rosen in the earlier proceedings. Mr Mandel does believe that information may be used to his disadvantage in these current proceedings. I note there only needs to be a theoretical risk of such prejudice. My view is that that alone would be sufficient to convince the Court to make the orders sought by the husband in the response document filed 8 September 2011, the interim orders sought.
I also note the further statement of principle in the case of Grieves & Tully [2011] FamCA 617, a decision of the Family Court at paragraph 77, where references were made to a case called Magro v Magro (1989) FLC 92-005:-
“77. In Magro v Magro (1989) FLC 92-005 the wife’s former solicitor was employed with the firm of solicitors that was acting for the husband. Rouke J applied Thevenaz and granted the wife’s application to restrain the husband’s solicitor from acting. His Honour observed, at 77,191, that:
“...it is reasonable to infer that [the husband’s solicitor], by dint of his lengthy retainer, is in possession of at least some privileged material belonging to the wife which could be put to good use by the husband. This might only consist of impressions of the wife’s personality gained after many hours of confidence, which could be exploited by a skilful advocate presented with those impressions.”
In this particular case before the Court, the facts are that when Mr Rosen acted for Mr Mandel some years ago, those proceedings went through the instruction stage, Court proceedings were commenced and a conciliation conference took place. So there were many opportunities, no doubt, for the husband, Mr Mandel to pass on confidential information to Mr Rosen.
And I note, the aspect referred to in Grieves & Tully (supra) – that impressions of a client’s personality gained after many hours of confidence can be exploited by a skilful advocate who is presented with those impressions. That is a matter the Court should take into account in this case. The question of delay is fully explained by the husband in my view. He was self-acting. It is true Mr Rosen drew the possible conflict to the husband’s attention immediately. At least, he did in his letter, which is exhibited to the wife’s affidavit.
I do note that there’s a telephone note number “DH2”, which does not refer to that point. But that’s not conclusive in my view that it wasn’t raised during the telephone conversation. Mr Rosen did draw it to the attention of Mr Mandel, at least in writing by 6 May 2011. By June or July, it may have been July, approximately the twelfth, when the husband got legal advice, the firm of lawyers immediately raised the objection and that’s why the matter ended up here today because they brought an application – they sought orders in the response, interim orders. I don’t believe that there has been any unexplained delay that would cause prejudice to the wife. I will make orders in terms of paragraphs 1 and 2 in the response document filed 8 September 2011.
My view is that the costs to be awarded should be in excess of the normal scale costs. I do consider on the basis of the material before the Court that the application made by the husband had extremely good prospects of success from the outset. I will, however, make an order – because I want the matter dealt with now. I accept that Ms M says that the indemnity costs were eleven and a half thousand, but I will exercise my discretion to fix the costs in a sum no greater than $8,000 to be paid by the wife. I will fix it in the sum of $8,000. I apprehend from the submission made by Ms M that it would be in excess of the scale in any event.
I will fix it at $8,000 and I will give to the wife 60 days to pay that. So those orders are made paragraphs 1 and 2.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Federal Magistrate Howard
Date: 20 February 2014
3
0