Hayes v Doran - [2012] WASC 91

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: HAYES -v- DORAN [2012] WASC 91

CORAM: KENNETH MARTIN J

HEARD: 21 DECEMBER 2011

DELIVERED : 22 DECEMBER 2011

PUBLISHED : 21 MARCH 2012

FILE NO/S: COR 185 of 2011

MATTER :ELEMENTREE GROUP LTD (ADMINISTRATORS APPOINTED)

BETWEEN: COURTNEY HAYES
Plaintiff
AND
GARY PETER DORAN
First Defendant
DERMOTT JOSEPH MCVEIGH
Second Defendant

Catchwords:

Corporations - Conflict of interest - Application to restrain plaintiff from continuing to engage solicitor - Confidentiality of information - Without prejudice privilege - Loyalty principle - Joinder of corporation under deed of company arrangement

Legislation:

Corporations Act 2001 (Cth), s 440D, s 444E(3), s 445D

Result:

Application refused

Category: B

Representation:

Counsel:

Plaintiff:     Mr M L Bennett
First Defendant             :     Ms P E Cahill SC
Second Defendant         :     Ms P E Cahill SC

Solicitors:

Plaintiff:     Bennett & Co
First Defendant             :     Allens Arthur Robinson
Second Defendant         :     Allens Arthur Robinson

Case(s) referred to in judgment(s):

Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307
Fordham v Legal Practitioners' Complaints Committee (1997) 18 WAR 467
Frankland River Olive Co Ltd v Charters Securities Pty Ltd [2004] WASC 88
Grimwade v Meagher [1995] 1 VR 446
Ismail‑Zai v The State of Western Australia [2007] WASCA 150; (2007) 34 WAR 379
Jones v Thompson [2011] WASC 329
Linen House Pty Ltd v Rugs Galore Australia Pty Ltd [1999] VSC 126
Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357
Newman v Phillips Fox (a firm) [1999] WASC 171; (1999) 21 WAR 309
Sydney Land Corporation Pty Ltd v Kalon Pty Ltd (1997) 142 FLR 188

KENNETH MARTIN J: I am dealing with the defendants' application by interlocutory process in COR 185 of 2011 pursuant to orders made by Master Sanderson on 6 December 2011.
What is sought by the defendants is an interlocutory injunction restraining the plaintiff, Mr Courtney Hayes, from engaging his current solicitors, Bennett & Co, in this matter until judgment is given or further orders are made. The defendants have also sought to be relieved, in the event that the injunction is granted, of any order or obligation to provide an undertaking as to damages. In addition, the defendants seek the joinder of Elementree Group Ltd to the proceedings as third defendant.
The defendants pursue their urgent injunction on terms that 'the plaintiffs have liberty to apply on 48 hours notice to dissolve or vary the order for an injunction'.
On paper, the defendants convey the overwhelming impression that the injunction sought is interlocutory in character. That impression is reinforced by a review of the materials filed on behalf of Mr Doran, the first defendant. His affidavit of 6 December 2011 was entitled 'Affidavit of Gary Peter Doran in Support of Defendants' Interlocutory Process for Interlocutory Injunction and Joinder of Defendant'. Mr Doran's second affidavit of 20 December 2011 was similarly entitled 'in Support of Interlocutory Process for Interlocutory Injunction and Joinder of Defendant'.
It emerged, however, during argument, and then really only out of the reply of senior counsel on behalf of the defendants, that what was actually being sought was a final injunction. No undertaking as to damages was tendered. The defendants' application specifically seeks relief against satisfying that almost universal prerequisite of interlocutory injunctive relief. Ultimately this all led to the defendants' concluding submission that the matter ought to be approached as an application for final injunctive relief against the plaintiff as regards his present solicitors.
Mr Bennett, counsel for Mr Hayes, objected to this course, on the basis that it was too late in the day to consider and deal with the defendants' application as one for final relief. Had the application properly been prepared and presented as one for final relief, he contended, the arguments and the materials adduced would have proceeded from a different premise. That submission must be afforded considerable weight. From the start, this application, in my view, has encountered needless difficulties because it was initially framed as an application for interlocutory relief instead of final relief. In reality, the essential nature of the relief sought is not interlocutory, but final.
Nevertheless, there is some authority that I should assess the application as an application for final relief. So, notwithstanding Mr Bennett's objection, I will proceed to consider the merits of the application, from a perspective of final relief as well. In Newman v Phillips Fox (a firm) [1999] WASC 171; (1999) 21 WAR 309, Steytler J (as he then was) approached a matter in which the solicitors who were sought to be restrained were the defendant party, on the basis of granting final injunctive relief.
In Newman, Steytler J set out the well known tripartite principles governing this kind of application. He said:
The justification for intervention by the court in applications of this kind has traditionally been founded upon one or more of three bases. These are the protection of confidential information, restraint from a breach of fiduciary duties in the context of a conflict of interest and the court's control over the conduct of solicitors as its officers [18].
The notion of confidential information requiring protection is well understood. Steytler J dealt with that at [19].
Likewise, conflict of interest and fiduciary duty are equally well understood. His Honour explained them at [20].
Steytler J then addressed the third essential principle, which I refer to as the loyalty principle. He observed:
In Australia the courts have, on a number of occasions, shown a willingness to intervene upon this third basis. So, for example, in Yunghanns v Elfic Ltd (Unreported, VSC, 3 July 1998) (at 9), Gillard J affirmed that the court had an inherent power to control and deal with members of the legal profession and to ensure that the administration of justice is not brought into disrepute by the conduct of those members [22].
Steytler J, at [23], referred to the decision of Drummond J in Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307, 311 where it was observed that there is a public element in the work of solicitors, because '[a solicitor] … in performing his or her professional function, plays an integral part in the administration of justice'. Drummond J had pointed out that this is one of the reasons for a new emphasis on the special fiduciary position of a solicitor, referring to a number of cases, including Ipp J's decision in Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357, 361.
Where the loyalty principle appears, prima facie, to have been infringed, the solicitor whose loyalty has been impugned bears the onus of refuting the allegation. That is the approach I will take.
The tripartite principle was canvassed by Steytler P, as President of the Court of Appeal, in Ismail‑Zai v The State of Western Australia [2007] WASCA 150; (2007) 34 WAR 379. At [19], his Honour considered whether a duty of loyalty survives termination of a solicitor's retainer. His Honour referred to the competing authorities on that issue and concluded that 'the weight of authority currently supports the proposition that the duty of loyalty does not survive the termination of the retainer' [23].
In Ismail‑Zai, Steytler P rendered further observations about breach of the continuing duty of loyalty, by reference to Fordham v Legal Practitioners' Complaints Committee (1997) 18 WAR 467, a well‑known decision in this jurisdiction. His Honour said:
I find it difficult to envisage circumstances in which a lawyer who acts in the same or a closely-related matter against a former client will neither be in a position in which there is a real risk of a breach of a duty of confidence nor be acting in such a way as to undermine the integrity of the judicial process or the due administration of justice [24].
I mention also his Honour's observations at [25].
The tripartite approach has been used by other judges in this court, including by Pullin J (as he then was) in Frankland River Olive Co Ltd v Charters Securities Pty Ltd [2004] WASC 88. His Honour referred to the tripartite principles and said:
There is no dispute that the court has jurisdiction to exercise authority over its officers: see Newman v Phillips Fox (1999) 21 WAR 309. Nor is it in dispute that where orders are sought against solicitors who are not parties to proceedings, the court has jurisdiction to direct them to cease acting where they are solicitors on the record [25].
Later, Pullin J summarised the principles by reference to Grimwade v Meagher [1995] 1 VR 446:
The question which has to be asked is whether a fair-minded, reasonably informed, member of the public would conclude that the proper administration of justice required that [the solicitor] and [the firm] should be restrained from continuing to act for the second defendant [30].
Pullin J concluded that a fair‑minded, reasonably informed member of the public would find it subversive to the interests of justice on the facts of that case to allow that solicitor to continue to act.
So the applicable tripartite principles are well‑established for applications to restrain solicitors from continuing to act, or to restrain their clients from continuing to engage them. I am dealing with the latter situation where it is the client who is sought to be restrained.

Factual background

Proceedings were commenced in mid‑2011 (CIV 1664 of 2011) by a Mr Danny Fakhre against Elementree Group Ltd (Elementree). Mr Fakhre was represented by Gadens Lawyers. Elementree was represented by Bennett & Co. The proceedings were commenced on 15 April 2011 and were entered in the CMC List on 19 May 2011. Case management directions on 23 June 2011 programmed the proceedings to argument on a summary judgment application, foreshadowed by the plaintiff.
In essence, Mr Fakhre had lent money to Elementree, by a convertible loan arrangement, whereby Mr Fakhre held the opportunity to convert his $1.3 million loan (which he had then increased by an extra $100,000) into shares in Elementree.
In CIV 1664 of 2011, Mr Fakhre was seeking specific performance of that contractual obligation. He now wanted to convert his debt into shares.
Initially, in CIV 1664 of 2011, Mr Fakhre's proposed conversion to shares was resisted by Elementree. This was on the basis that Mr Fakhre was argued to have agreed to accept more money, essentially $650,000 plus the repayment of his debts, in return for forgoing the right to convert his loan into shares.
Mr Fakhre was seeking to obtain the Elementree shares under an order for specific performance on his summary judgment application, which, if obtained, would see him gain a 53% shareholding in Elementree.
However, by the force of s 440D of the Corporations Act 2001 (Cth), CIV 1664 of 2011 became stayed upon the appointment of Administrators to Elementree on 12 July 2011. The proceedings were then further stayed, by s 444E(3)(a), on the entering of a deed of company arrangement (DOCA) for Elementree on 18 October 2011.

Core arguments of the applicants

Two major arguments in support of this application to inhibit Mr Hayes continuing to engage Bennett & Co emerged during hearing. The first was based upon an expressed concern that some confidential information held by Bennett & Co and obtained whilst acting for Elementree in the now stayed action had, would, or could be used against the interests of Elementree in the present matter. No specific confidential information was however identified.
A second argument emphasised dangers posed, viewed from the eyes of a fair‑minded impartial observer, for the administration of justice, if a solicitor, expected to remain loyal to his or her original client, is assessed to have 'changed sides'.
A large part of the hearing was directed towards the applicants seeking to have Elementree joined as a defendant in the present proceedings. Presumably it was sought to join Elementree as a co‑defendant in order to strengthen the second argument above, which is that Bennett & Co are in breach of a duty of loyalty to Elementree in acting for Mr Hayes in this second action. That line of argument takes what might be labelled as a 'helicopter' view. It assumes that because Bennett & Co have once been (and still are) solicitors on the record for Elementree in the first, but now doubly stayed proceedings, the solicitors cannot appear on what is said by the applicants to be the opposite side of the record, and so, Mr Hayes in retaining these solicitors, is causing an infringement of the loyalty principle.
As to the confidential information argument, I am not persuaded, evaluating at the level of final relief (which is how I will approach it), that there has been a sensible identification of a likely cache of confidential information from the first action that has, could, or will leak to the second action, and there be used to the prejudice of anyone.
This first argument was put very theoretically by the defendants. No tangible information is identified as the confidential information that requires protection by injunction.

Further facts

An affidavit of the plaintiff, Mr Courtney Hayes, sworn in the present action, discloses that although Elementree initially had resisted the allocation of shares on a conversion to equity by Mr Fakhre, the parties had moved closer to agreement by the end of June 2011.
In particular, I refer to correspondence annexed to Mr Hayes' affidavit at about page 223, at CMH32, as well as the supplementary material (that the parties sent overnight) which indicates a degree of belated acquiescence in Mr Fakhre's wish to convert his loan of $1.4 million to shares in Elementree.
On 11 July 2011, Bennett & Co on behalf of Elementree had written to Mr Fakhre's solicitor, Mr Scovell of Gadens Lawyers. The letter contained documents signed by Mr Hayes and other directors of Elementree Group Ltd confirming the implementation of terms proposed, as well as various other documents, including Mr Hayes' resignation as director of Elementree and resolutions of directors. One board resolution was to allot approximately 63 million fully paid ordinary shares on conversion of the $1.3 million loan of Mr Fakhre. At page 239 is a share certificate showing an allocation to Mr Fakhre of those shares on 7 July 2011.
There is a factual question needing to be resolved as to whether the dispute in the first action had ever been finally resolved by settlement. It is not possible on this application, bearing in mind how the evidence was received, for me to resolve that question. It must be resolved at a trial, where witnesses can be cross‑examined.
But a possible resolution in mid‑2011 of the (now stayed) action is contextually significant to this application. It bears upon Mr Hayes' position as a plaintiff in the second action represented by Bennett & Co, who were Elementree's solicitors in CIV 1664 of 2011. Mr Hayes in this second 2011 action seeks to show the charges on which Mr Fakhre relied when appointing the defendants as administrators could not properly have been exercised by Mr Fakhre. This is on the basis that there had been a resolution agreement under which Mr Fakhre would receive a 53% (controlling) shareholding in Elementree, converting his loans to equity. On that basis Mr Fakhre's charges had been satisfied as to the underlying debt, by reason of his swap for equity and so should not have been invoked to appoint the defendants as Elementree's administrators.

Privilege

There are numerous arguments emerging from these allegations. It is impossible to resolve them all at this point. One argument was that correspondence between the parties to the first action, referred to above, was privileged on the basis that it was without prejudice. According to the plaintiff, some passing communications used in the present proceedings by Mr Hayes provide a potent illustration of Bennett & Co's conflict position. This was said to follow because communications made without prejudice (to which Bennett & Co obviously retain access, arising from acting for Elementree in the first action) are being used to advance the case of their present client, Mr Hayes, in the second action and contrary to Elementree's interests in sustaining the present deed of company arrangement, thereby avoiding a liquidation scenario.
I do not accept that argument. It seems to me that, carefully tracing the history of the communications, there are respectable arguments that, in fact, a settlement agreement may have been reached with Mr Fakhre arising from communications now referred to in order to prove an agreement in July 2011. Without prejudice correspondence may legitimately be assessed to prove an existence (or otherwise) of an agreement. In the scheme of things, this argument of the applicants as to breach of confidence presents as of small moment.

Loyalty principle arguments

By reference back to the tripartite principles, and absent any identifiable confidential information shown presently to be at risk, it seems then that it is only a possible infringement of the loyalty principle that will support the relief sought. There has been no sufficient identification of any potential confidential information arising out of the first action that might be used in a way that would embarrass Elementree or its deed administrators, at present. Le Miere J observed recently in Jonesv Thompson [2011] WASC 329, referring to Carindale Country Club v Astill, that '[i]t is a basic requirement that before material will be recognised as having the character of confidential information, the information must be identified with precision and not merely in global terms' [43].
The applicants put various arguments that legal advice provided in the first action by Bennett & Co to Elementree, to which Mr Hayes must have been privy, could now be used against the interests of Elementree by Bennett & Co in the second action whilst acting for Mr Hayes. But bare assertion about hypothetical legal advice being hypothetically used, to the hypothetical disadvantage of Elementree, is too theoretical. It does not meet a reasonable standard of assuredness in terms of confidential information at risk. Moreover, in speculating about the legal professional privilege which may attach to advice given by Bennett & Co to Elementree in that context, it seems that there must be an argument as to a finding of common interest as between Elementree and Mr Hayes as its then managing director at the time, by reason of Mr Hayes properly having access to Elementree's legal advice. It is not necessary to resolve that issue now.
The real question, then, is whether there is any respectable basis now shown to suggest that the loyalty principle has, is, or may be infringed on present facts? For the defendants as applicants, meeting that threshold is not easy on their evidence and is why, I think, so much time was consumed in argument on the issue of a joinder of Elementree as an additional party to the action. In the end that effort did not bear fruit.

Joinder of Elementree

Administrators were appointed to Elementree by Mr Fakhre under his charges, and subsequently, a DOCA has been entered. By operation of s 440D and then s 444E(3)(a) of the Corporations Act, proceedings can only be begun, or continued, against Elementree with the leave of the court, in accordance with such terms as the court may impose.
It is plain that there is no application by the plaintiff seeking leave to join Elementree in accordance with the Corporations Act. The application for Elementree's joinder on behalf of the defendants was predicated upon O 18, rr 6 or 7 of the Rules of the Supreme Court 1971 (WA) (RSC), on the basis that Elementree was a necessary and proper party and should, therefore, be added. But the joinder issue and the leave required of the court to effect joinder seem to me to be too technical an argument to be wasting time over at this point.

Mr Hayes seeks to set aside the DOCA under s 445D of the Corporations Act. He also brings an application, pursuant to the court's inherent jurisdiction, to challenge the appointment of the defendants as administrators by attacking Mr Fakhre's charge. There are no pleadings in the second action. There is only an originating process and an affidavit in support. It is plain that the arguments at issue in the second action travel well beyond s 445D, to the very validity of the appointment of the administrators.
In Linen House Pty Ltd v Rugs Galore Australia Pty Ltd [1999] VSC 126, Gillard J considered who was entitled to defend proceedings brought under s 445D to terminate a DOCA. His Honour said:
Clearly, the company has to be a respondent to the proceeding. Who actually has the carriage of the defence of the proceeding will depend upon in the last resort the terms of the deed. If the deed is silent as to who is managing the company then it would appear that the administrator should be the person who conducts the defence. That is not to say that other interested parties may not apply to protect their interest. Clearly, in a suitable case other parties may have an interest [24].
In reaching this conclusion Gillard J referred to Sydney Land Corporation Pty Ltd v Kalon Pty Ltd (1997) 142 FLR 188. In that case, the company had been joined as a respondent and the question was who was entitled to have the carriage of the defence of the proceedings. Santow J concluded that the administrator was entitled to have carriage of the proceedings, rather than the board of directors. Nevertheless, his Honour gave leave to a legal representative to appear on behalf of two directors and other interested parties.
The present action potentially raises numerous issues relevant to the administration of Elementree, the operation of s 445D and the validity of the charges that Mr Fakhre first relied upon to appoint administrators.
Given the existence of all these potential issues, the administrators are, very appropriately, defendant parties in their own right. If they were invalidly appointed, they will be trespassers and are personally exposed accordingly. They will probably be indemnified by their appointor. But they clearly must be parties in their own right.
From that clear position arguments seemed to proceed on the basis that Elementree should have been joined in the first instance by the plaintiff as an extra defendant. But the obvious answer to that is that Elementree could not have been joined without obtaining leave given under s 440D, on the administration commencing, and then under s 444E(3), after the DOCA was entered.
An application for joinder of Elementree by the defendants proceeded by reference to RSC O 18, on papers filed by them, rather than by reference to seeking to show any basis for a grant of leave under s 444E(3).
I assessed the joinder arguments of the defendants to unfold in ad hoc fashion. In the end, I was uncertain whether the defendants' submission was that a joinder of Elementree as a defendant party was still being sought by the applicant, or whether the applicant was now arguing that the plaintiff should be required to effect that result. In any event, it seems of small consequence now. As I see it, the defendants, as proper contradictors and the persons who will most likely be speaking on behalf of Elementree in the action, were it joined by a grant of leave, are present and are active participants in this action. The joinder arguments, in my assessment, are a conceptual diversion. They consumed too much time, I think, because of the defendants' view that if Elementree was joined, an infringement of the loyalty principle would present, almost axiomatically. For the defendants, this would follow because Elementree had once had Bennett & Co acting for it in the first action, but now has Bennett & Co acting against it in the second action. Therefore, the defendants would say, the loyalty principle is clearly infringed and the court should now act of its own volition to remove the conflict by granting an injunction to that end against Mr Hayes.
That reasoning is far too simplistic for my liking. To properly assess whether or not the loyalty principle has or will be infringed, it is necessary to conduct a closer analysis of the content and issues presenting in the first and second actions.

Analysis of the two actions

In the first action, as I explained, Elementree initially resisted Mr Fakhre's attempts to obtain a 53% controlling shareholding. Then, Mr Hayes was managing director of Elementree. By June and July 2011, however, there were attempts to resolve the convertible loan dispute with Mr Fakhre. One key question is whether or not that dispute was finally resolved, on a basis that Mr Fakhre would receive his 53% shareholding. Bennett & Co, instructed by Mr Hayes (as managing director), acted for Elementree in that dispute with Mr Fakhre. That action was stayed upon the appointment of administrators and with the DOCA.
In the second action, the defendants are deed administrators, albeit first appointed as administrators by Mr Fakhre under the terms of charges securing his loan of $1.3 or $1.4 million. The plaintiff undoubtedly has standing. He seeks to show as plaintiff that Mr Fakhre's charges could not have been used to validly appoint administrators. Mr Hayes also seeks to argue that there were material non‑disclosures surrounding the subsequent DOCA. The provisions of s 445D enable this court to terminate a DOCA for material non‑disclosure.
Assessing these two actions side by side, the issue and applying the loyalty principle, the question is whether a reasonable, neutral bystander assessing the position of Bennett & Co in acting for Mr Hayes in the second action could think that there was a loyalty problem; that is, whether Bennett & Co may be viewed to have, in effect, swapped sides, between the two actions. The assessment needs more than a superficial analysis of appearances on the court record for the parties in each action.
If the present DOCA is ultimately set aside at the plaintiff's behest in the second action, Elementree may be wound up. It is said by the defendants that this would hurt Elementree and is against its interests. But as was pointed out on the argument by Mr Bennett, a liquidation is not necessarily prejudicial to a corporation. Sometimes a winding up may be the only appropriate or fair outcome, particularly as between the interests of rival creditors. Survival of the corporation at all cost is not a general rule.
Bennett & Co are now acting for the plaintiff, who is seeking to have the DOCA set aside. On the defendants' argument, that alone demonstrates an infringement of the loyalty principle. I disagree. There are stronger arguments to the contrary. First, I will assess the opposite scenario.
If Mr Hayes' present solicitors (Bennett & Co) had been engaged to act against him in the second action by representing the present defendants - bearing in mind Mr Hayes had been instructing Bennett & Co in the first action - a reasonable and neutral bystander then could legitimately reach a view that the solicitors had changed sides. That, of course, is not this case.
Second, my present analysis of what has transpired, as between the two actions, is that Mr Fakhre has, via invocation of rights under his charges over Elementree, the appointment of the administrators and the subsequent DOCA, considerably improved upon a prospective 53% control shareholding outcome he had once sought in the first action. He now, in effect, enjoys or is on the verge of obtaining a 100% shareholding in Elementree, on the present DOCA's implementation.
On a principled analysis of the two actions, side by side, that Bennett & Co do not present as having 'changed sides'. Rather, with proper factual insight, a reasonable bystander would, I think, more likely conclude that Bennett & Co still stand on a battlefield aligned to the interests of those, including Mr Hayes, who had throughout 2011 resisted Mr Fakhre's efforts to obtain shareholding control of Elementree.
I also factor into my overall assessment other matters which emerged concerning the ultimate deal struck under the DOCA. By the DOCA, if implemented, the first action will be resolved. Trade creditors will be paid out. But Elementree shareholders like Mr Hayes, who lent money to the company - in expectation, it is said, that their shareholder loans were to be matched 'dollar for dollar' by Mr Fakhre - would, by the DOCA, receive nothing.
It is strategically significant, I think, that a tallying of votes at the creditors' meeting which ultimately accepted the proposed DOCA, saw the weight of Mr Fakhre's votes deliver (by proxy) the acceptance of the proposed DOCA that in implementation will deliver him a 100% shareholding control of Elementree.
So, it can be seen Mr Fakhre will, if the present DOCA is fully implemented, ultimately hold not 53%, but 100%, of the shares in Elementree. It can also be seen that he would achieve this outcome, in essence, via a lateral manoeuvre, having first appointed administrators under charges securing his loans. The plaintiff, rightly or wrongly, now seeks in the second action to prevent Mr Fakhre from gaining a 100% shareholding in Elementree. The current battle still manifests as somewhat akin to the fight for shareholding control of Elementree, when Mr Hayes first instructed Bennett & Co in the first action to resist Mr Fakhre, as managing director of Elementree.
I also factor into consideration that a plaintiff is ordinarily entitled to have solicitors of choice. Here, Mr Hayes' choice is to be respected. I consider, given the history of the two actions and a demonstrable amount of sunken expense associated with preparation of the plaintiff's affidavit in support in the second action, that it would, at this time, deliver a severe tactical blow to the plaintiff, were he to be restrained from continuing to engage Bennett & Co as his solicitors at this point. He would effectively have to start over with new solicitors and counsel and undoubtedly incur waste, delay and expense associated with that. There should be a good reason shown before that obvious, possibly terminal, prejudice is inflicted on the plaintiff.
As well I take into account there is a relatively narrow range of high level corporate litigation expertise available to the plaintiff in Perth capable of providing the same standard of legal representation in a corporations dispute that presents this degree of complexity.
Having said all that, this court would not hesitate to restrain a client or a firm of solicitors from acting in circumstances where there was a demonstrated conflict of interest, a likely disclosure of confidential information, or where the solicitors' loyalty was seriously shown to be in question.
But overall, at this point, none of those potentially disqualifying circumstances present. A proper understanding of the underlying details of the two actions requires a thorough analysis of extensive materials, across two court files. On my analysis, the assessment today is that a neutral and reasonable bystander with such information would not reach a view that the plaintiff's solicitors have, in effect, changed sides.
Elementree is not yet joined as a party to the action. That could happen in the future. But even if it did, on the authorities, it will likely be the administrators who would speak on Elementree's behalf. They are already defendants who are actively engaged.
In the end I am not persuaded that it is appropriate to grant final injunctive relief against the plaintiff. And it was certainly never appropriate to grant interlocutory relief. Therefore, I refuse the application of the defendants.