In the matter of The Consortium Centre Pty Limited

[2012] NSWSC 898

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of The Consortium Centre Pty Limited [2012] NSWSC 898
Hearing dates:	19, 20 and 25 July 2012
Decision date:	10 August 2012
Jurisdiction:	Equity Division - Corporations List
Before:	Black J
Decision:	Interlocutory Process dated 2 March 2012 dismissed. Parties to be heard as to costs.
Catchwords:	LEGAL PRACTITIONERS - Application to restrain solicitor from acting in proceedings - Jurisdiction to restrain from acting - Inherent jurisdiction of Supreme Court to restrain legal practitioners from acting - Justice and the appearance of justice - Whether a fair minded and reasonably informed member of the public would conclude that the proper administration of justice requires that a solicitor be prevented from acting.
Legislation Cited:	- Corporations Act 2001 (Cth) ss 233, 459A
Cases Cited:	- Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 - Bowen v Stott [2004] WASC 94 - Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 - D & J Constructions Pty Limited v Head (1987) 9 NSWLR 118 - Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 - Holborow v Macdonald Rudder [2002] WASC 265 - Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 - Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 - Mitchell v Burell [2008] NSWSC 772 - Mitchell v Pattern Holdings Pty Ltd [2000] NSWSC 1015 - Re Wombat Securities Pty Ltd [2011] NSWSC 1940 - TJ Board & Sons Pty Ltd v Castello [2008] VSC 91 - UTi (Aust) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219 - Woodgate v Leonard [2007] NSWSC 495
Category:	Principal judgment
Parties:	The Consortium Centre Pty Limited (Plaintiff) Robert Anthony Keogh (First Defendant) Rewardweb Pty Limited (Second Defendant) Promotion Marketing Pty Limited (Third Defendant) Urma Pty Limited (Fourth Defendant) Course Logistics Services Pty Limited (Fifth Defendant) Robert Anthony Keogh (Applicant) Robinson Legal Pty Limited (First Respondent) Andrew Robinson (Second Respondent) Dominique Robinson (Third Respondent) Julie Briscoe (Fourth Respondent)
Representation:	Counsel: J. Ireland QC (First Defendant/Applicant) D.R. Pritchard SC (Respondents) Solicitors: D.C. Balog & Co (First Defendant/Applicant) Robinson Legal (Respondents)
File Number(s):	11/268286

Judgment

1. By Interlocutory Process dated 2 March 2012, the Defendant in these proceedings, Robert Anthony Keogh, sought orders that Robinson Legal Pty Limited, Mr Andrew Robinson, Ms Dominique Robinson and Ms Julie Briscoe be restrained from acting further on behalf of the Plaintiff, The Consortium Centre Pty Limited ("TCC") in these proceedings ("proceedings"). Mr Keogh's application was subsequently narrowed in submissions to restraining the individual solicitors from acting, and ultimately, to restraining Ms Briscoe from acting when it became clear that there was no suggestion that Mr Robinson or Ms Robinson would take up conduct of the proceedings if Ms Briscoe was not permitted to do so.

1. Robinson Legal is an incorporated legal partnership; its shareholders are Ms Robinson and Ms Briscoe and its directors are Ms Robinson, Mr David Rydon and Ms Briscoe. Ms Robinson is the sister of Mr Maurel, who holds shares in TCC through a family company and is one of its directors. Mr Robinson is a consultant to Robinson Legal. Mr Robinson and Ms Robinson do not have carriage of the proceedings or direct involvement in them. Ms Briscoe is the solicitor on the record for TCC in these proceedings. Ms Hudap has the primary carriage of the proceedings. She has been a solicitor with the firm of Robinson Legal for nearly 8 years (Briscoe [162]-[163], T163). It might be added, although it is not necessary for the purposes of this decision, that TCC is also represented by Senior and Junior Counsel in the proceedings and there is no question as to their independence.

1. Mr Keogh, Mr Robinson, Ms Robinson and Ms Briscoe each swore affidavits and were cross-examined in the proceedings. It has not been necessary for me to form a view as to the credit of any of the witnesses to determine this application, which can readily be determined by reference to the documentary evidence and the objective facts. In particular, it is not necessary for me to form a view, and I have not formed a view, as to the submission put by Robinson Legal that the present application had been filed by Mr Keogh in an attempt to avoid, or at least delay, filing a Defence and evidence in the proceedings, which have in any event now been filed.

The relevant jurisdiction

1. In this case, by contrast with, for example, D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 and Cleveland Investments Global Ltd v Evans [2010] NSWSC 567, there is no suggestion that a solicitor has "change[d] sides"; to the contrary, Robinson Legal has represented TCC in the underlying dispute since it arose and acted for TCC in the proceedings since their commencement. Mr Keogh's criticism of Robinson Legal is not that there is a conflict between its interest and TCC; indeed, Mr Keogh's complaint appears to be that Robinson Legal's interests are too closely aligned with those of TCC, by family and commercial relationships.

1. The jurisdiction invoked by Mr Keogh to restrain Ms Briscoe from acting in these proceedings is the Court's inherent power to restrain a legal practitioner from representing a party in a particular case to ensure justice and the appearance of justice. In Mitchell v Pattern Holdings Pty Ltd [2000] NSWSC 1015 at [34], Bergin J referred to the Court's power to restrain a legal practitioner from representing a party in a particular case to ensure justice and the appearance of justice, as an incident of its inherent jurisdiction (at [34]). Common examples include where there is a potential that the legal practitioner might be a witness; where the subject of the litigation involves an evaluation of his or her conduct and where the efficacy of documents he or she prepared is in issue (Holborow v Macdonald Rudder [2002] WASC 265 at [23]); or where the solicitor has a direct pecuniary interest in the outcome of the case (Bowen v Stott [2004] WASC 94).

1. In Holborow v Macdonald Rudder above at [30] EM Heenan J noted that:

"It seems to me that if it can be demonstrated that there is a risk that a practitioner will disregard his overriding duty to the court that this will usually, if not always, require action by the court to avoid such a risk by preventing the practitioner from acting even if the relief is sought by an opposing party in the litigation. But these principles do not render counsel or solicitors generally examinable at the suit of their client's opponents. The duty of the legal practitioner is not to his client's opponent and he is not answerable to his client's opponent. His duty is to the court and he is certainly answerable to the court and to his or her professional and disciplinary bodies."

1. In Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 at [76], Brereton J noted that:

"The court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v Pattern Holdings; Spincode; Holborow; Williamson v Nilant; Bowen v Stott; Law Society v Holt]. Prince Jefri does not address this jurisdiction at all. Belan v Casey and British American Tobacco are not to be read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications appears to acknowledge its continued existence.

The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Holborow; Bowen v Stott; Asia Pacific Telecommunications].

The jurisdiction is to be regarded as exceptional and is to be exercised with caution [Black v Taylor; Grimwade v Meagher; Bowen v Stott].

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 [Black v Taylor; Grimwade v Meagher; Williamson v Nilant; Bowen v Stott].

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 [Black v Taylor ; Bowen v Stott]."

1. In Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 at [26], Young J also referred to the Court's inherent power to restrain solicitors from acting in a particular case having regard to the interests of the administration of justice and emphasised that the Court's jurisdiction was exceptional and was to be exercised with appropriate caution and due weight should be given to the public interest in a litigant not being deprived of the solicitor of its choice without due cause.

1. In Mitchell v Burell [2008] NSWSC 772 at [3], Brereton J summarised the principles applicable to this jurisdiction as follows:

"The jurisdiction invoked is that discussed in Kallinicos v Hunt [above]. As was said in that case (at [76]) the Court has always had inherent jurisdiction to restrain solicitors from acting in a particular case as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice. The test to be applied is whether a fair minded, reasonably informed member of the public - a concept substantially equivalent to the reasonably informed lay observer used in the context of applications for disqualification of judicial officers for apprehended bias - would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in order to protect the integrity of the judicial process and the due administration of justice, including the appearance of justice. The jurisdiction is an exceptional one and is to be exercised with caution, and due weight must be given to the public interest in a litigant not being deprived of the lawyer of his or her choice. Particularly in this respect, the timing of the application may be relevant, in that the cost, inconvenience or impracticability of requiring lawyers to cease to act when proceedings are well advanced may provide strong reason for refusing to grant relief."

1. Brereton J also noted at [20] that:

"[The] line is crossed only when the solicitor has a personal stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees for acting, albeit that the relevant stake may not necessarily be financial, but involves the personal or reputational interest of the solicitor, as will be the case if his or her conduct and integrity come under attack and review in the proceedings. The presence of such circumstances will be a strong indication that the interests of justice - which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests - require the lawyer to be restrained from continuing to act."

1. The principles set out by Brereton J in Kallinicos were in turn followed by Ward J in Cleveland Investments Global Ltd v Evans above. Several decisions emphasise the "extraordinary" and "exceptional" nature of the jurisdiction to restrain a solicitor from acting: Woodgate v Leonard [2007] NSWSC 495 at [37]; UTi (Aust) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219 at [52]; TJ Board & Sons Pty Ltd v Castello [2008] VSC 91 at [30].

1. I accept Mr Keogh's submission that these principles are not confined to the obvious cases where a solicitor should not continue to act, such as a case where the solicitor will be a contentious witness or has a direct financial stake in the outcome of the litigation. However, the principle would not be applied to exclude a solicitor from acting unless a fair-minded, reasonably informed member of the public would in fact conclude that there was reason to restrain the practitioner from acting, or need to do so in the interests of the protection of the integrity of the judicial process or the due administration of justice. The exceptional character of the jurisdiction means, in my view, that it is unlikely to be exercised where a solicitor's interest in the subject matter of the litigation is remote and a fair-minded, reasonably informed member of the public would not in fact perceive any threat to the administration of justice arising from that interest.

Factual background

1. TCC undertakes work for clients in respect of promotional offers for products and services and operates its business from a property at Silverwater leased from another entity, MKG Holdings Pty Limited ("MKG") as trustee for the MKG Unit Trust. Mr Keogh was appointed as "managing director" of TCC in 2000 and an entity associated with him, Promotion Marketing Pty Limited ("Promotion Marketing"), as trustee for the Keogh Family Trust, acquired 30% of the issued shares in TCC on 1 July 2003. Interests associated with Mr Bruno Maurel and Mr Ross Gage hold 45% and 25% of the issued shares in TCC respectively. Mr Keogh contends that, between 2003 and November 2010, Promotion Marketing loaned substantial funds to TCC to support its business which have not been repaid.

1. MKG acquired the Silverwater property in late 2003 and leased that property to TCC. The shareholders in MKG are Promotion Marketing (associated with Mr Keogh) (30 shares), Solion Pty Limited (associated with Mr Gage) (25 shares); TD Projects (associated with Ms Robinson and Mr Maurel) (30 shares) and Wernant Pty Limited (associated with Mr Maurel) (15 shares). Ms Robinson in turn holds 5,100 fully paid ordinary shares in TD Projects, Mr Maurel holds 5,000 ordinary shares and Tiger Sports International Pty Limited (associated with a third party, Mr Stewart) holds 100 shares. It follows that, adopting a tracing approach, Ms Robinson has a 15% interest in MKG and in the Silverwater property. Ms Robinson, Mr Maurel, Mr Keogh and Mr Gage are directors of MKG.

1. Allegations relating to Mr Keogh's conduct as managing director of TCC, which relate to the matters in issue in these proceedings, were made at a directors meeting held on 15 November 2010. Mr Robinson advised TCC as to the relevant matters and attended that meeting as its solicitor. Mr Keogh first objected to Robinson Legal's acting for TCC in respect of these matters by letter dated 30 November 2010 from his solicitors to Robinson Legal.

1. Robinson Legal, through Mr Robinson, subsequently acted for TCC in proceedings between TCC and Promotion Marketing, in which TCC applied to set aside a statutory demand served by Promotion Marketing in respect of a debt that Promotion Marketing claimed was owed to it by TCC. Counsel for Mr Keogh again foreshadowed an objection to the retainer of Robinson Legal when those proceedings were before the Court in January 2011 (T31), but Mr Keogh then took no further steps to pursue that objection. TCC relied on allegations of fraud, breach of fiduciary duty and breach of contract against Mr Keogh to establish an offsetting claim in those proceedings, which significantly overlap with the matters in issue in these proceedings. TCC sought security for costs against Promotion Marketing in those proceedings, that security was not provided and the statutory demand was set aside. Mr Robinson was cross-examined in respect of the security for costs application in those proceedings.

1. Mr Keogh again objected to Robinson Legal's acting for another client in proceedings against him in August 2011 and again took no steps to pursue that objection.

1. These proceedings were commenced by Originating Process served in August 2011 and Robinson Legal has acted for TCC in the proceedings since that date. The proceedings involve allegations concerning transactions between TCC and other entities controlled by Mr Keogh, which TCC contends breached Mr Keogh's duties as a director of TCC. The nature of those allegations has been apparent at least since Mr Maurel's affidavit was filed when the proceedings were commenced.

1. Mr Keogh again objected to Robinson Legal acting in these proceedings by letter dated 18 November 2011. Robinson Legal again declined to withdraw from the proceedings by letter dated 13 December 2011. The Interlocutory Process seeking to restrain Robinson Legal and the individual practitioners from acting was filed some three months later, on 5 March 2012.

Mr Keogh's contentions

1. Mr Keogh contends that Mr and Ms Robinson are:

"too closely connected both in terms of their personal relationship with Mr Maurel and their indirect economic interests in the subject matter of this litigation to escape the critical attention of the fair-minded observer".

That contention was developed by reference to a number of involvements of Robinson Legal and its partners in the matter. I have had regard to whether those matters separately, or cumulatively, warrant the grant of that relief.

1. Mr Keogh initially contended that Robinson Legal acted on the incorporation of MKG, the establishment of the MKG Unit Trust, the purchase of the Silverwater property occupied by TCC and the lease between TCC and MKG. In his affidavit in support of the application, Mr Keogh referred to advice given by Robinson Legal, and by Mr Robinson, Ms Robinson and Ms Briscoe to Mr Keogh and his related companies.

1. The affidavit evidence of the solicitors, supported by searches of Robinson Legal's client file management system, is that the firm only dealt with Mr Keogh or his associated entities in connection with matters in which it acted for MKG and TCC, in his capacity as a director of MKG or the former managing director of TCC, and did not act for him personally. In particular, MKG rather than Mr Keogh retained Robinson Legal in respect of the Silverwater property and Robinson Legal invoiced MKG for professional costs and disbursements in respect of the purchase of the Silverwater property and the relevant lease.

1. Mr Keogh acknowledged in closing submissions that "technically" Robinson Legal had not acted for Mr Keogh or Promotion Marketing. He qualifies that concession by noting that the firm has prepared the shareholders and unitholders agreements that regulate the conduct of the affairs of TCC and MKG to which Mr Keogh is a party. I do not consider that Robinson Legal's involvement, in preparing documents on behalf of TCC and MKG to which Mr Keogh is party, in itself gives rise to any risk of prejudice to the administration of justice in these proceedings. Those documents are not in issue in the proceedings and there is no suggestion that there is any inadequacy in them.

Ms Robinson's position

1. Ms Robinson was admitted as a solicitor in July 1980 and is not acting for TCC in the proceedings. Mr Keogh contends that Ms Robinson is in a position of "conflict and compromise" in connection with the proceedings, since she owes family loyalty to Mr Maurel, TCC is under financial pressure and Robinson Legal is disposed to subsidise its legal costs in connection with the proceedings for the benefit of TCC's shareholders and TCC owes financial obligations in respect of the Silverwater property to MKG. I address these matters below.

1. Mr Keogh contends that, at the time the Silverwater property was acquired in December 2003, he provided financial information to Ms Robinson. In particular, Mr Keogh contends that Ms Robinson became generally aware of the financial resources of Mr Keogh and his family through this transaction. Mr Keogh relies on a document prepared in December 2003 headed "Building Purchase and Development Proposal", which related to the Silverwater property and was provided (at least in large part) to Ms Robinson. That document provides details as to TCC's business, the Silverwater property, the amount of finance required and, in three pages, the assets and liabilities for Messrs Maurel, Keogh and Gage, then the directors of TCC. There is a dispute as to whether those three pages were provided to Ms Robinson, but it is not necessary for me to resolve that dispute. The financial information relating to Mr Keogh contained in the one page relating to him set out, relevantly, the value of his home in 2003, the amount of the mortgage on his home in 2003, the amount of his overdraft facility in 2003 and the value of his motor vehicles and superannuation in 2003. There is no reason to think that any of that information, as at 2003, would have any relevance to the position in 2012; to the contrary, there is every reason to think that, for example, real property values have changed substantially since 2003.

1. In cross-examination, Ms Robinson denied that she received personal financial information from Mr Keogh at the time of entry into the Silverwater transaction (T134). Ms Robinson accepted that she was aware that Mr Keogh was seeking to refinance his existing financial arrangements with St George in connection with borrowings by the investors in MKG from the Commonwealth Bank of Australia in respect of the Silverwater property but did not accept that she was aware of further information as to Mr Keogh's borrowings in that regard (T141, T143-T144). Even if Mr Keogh had provided some information as to the level of his assets and his financial position to Ms Robinson in late 2003 and early 2004, I do not consider that her access to information of the kind to which I have referred above, nearly ten years ago, would provide any useful information as to Mr Keogh's current financial position which could be of advantage to Robinson Legal or TCC in the proceedings.

1. As noted above, Ms Robinson has a family relationship with Mr Maurel. However, the existence of a family connection between Mr Maurel and Ms Robinson would not have prevented her acting in the proceedings: Re Wombat Securities Pty Ltd [2011] NSWSC 194 at [11] per Barrett J.

1. Mr Keogh also contends that:

• Mr and Ms Robinson through the MKG Unit Trust are aligned with Mr Keogh in relation to the property of which TCC is the existing tenant;

• TCC has financial obligations to MKG in respect of the commercial lease of the property which Mr Keogh contends was leased at an above market rental;

• TCC's ability to resist the financial claims made by Mr Keogh "relieves problems which the Robinsons (and Mr Maurel) might otherwise experience in respect of TCC's position as tenant of the Silverwater property". (I should interpolate that, in these proceedings, TCC makes claims against Mr Keogh rather than resisting claims brought by Mr Keogh. I will refer to further proceedings recently commenced by Mr Keogh below).

• Rental from the Silverwater property is essential to the Robinsons, Mr Maurel, Mr Gage and Mr Keogh in fulfilling their loan obligations to the Commonwealth Bank.

1. An ultimate recovery of damages in these proceedings would presumably be of financial benefit to TCC. However, it has not been established that such a recovery is necessary to its ability to pay rental on the MKG property. It was also not established that, if TCC was unable to pay that rental, MKG would not be able to re-lease the property to a third party or that it would have to charge a lower rental if it did so. As I have noted above, Ms Robinson's interest in the Silverwater property is an indirect and minority interest. The amount invested, although not trivial in money terms, could not properly be characterised as material to Ms Robinson given the scale of her and her husband's commercial activities. Any personal stake of Ms Robinson in the proceedings, by reason of any positive impact that a recovery against Mr Keogh will have on TCC or any adverse impact of a costs order against TCC, is in my view remote. There is, in my view, no credible basis for an apprehension that the conduct of these proceedings would be influenced by these matters, a fortiori where Ms Briscoe and Ms Hudap rather than Ms Robinson have the conduct of the proceedings.

1. Mr Keogh also points out that, under a shareholders and unitholders agreement prepared by Ms Robinson in 2004, Mr Maurel, Mr Gage, Ms Robinson and Mr Keogh are entitled to participate in decisions affecting the ownership, financing and leasing of the Silverwater premises to TCC. Mr Keogh relies on the fact that TCC fell into arrears with rental payments for the Silverwater property in early 2012 and he refers to a meeting of the directors of MKG in July 2012 attended by Mr Maurel, Ms Robinson and Mr Keogh (and Mr Gage by telephone) at which Mr Keogh expressed concerns as to TCC's financial viability. Mr Keogh complains as to the extent to which Ms Robinson had disclosed email correspondence from Mr Maurel in which Mr Maurel had raised the possibility that there should be no review of the rent payable by TCC to MKG for the financial year because of financial pressures on TCC. Ms Robinson has in turn given evidence in respect of those matters. Mr Keogh has also pointed to communications from Mr Maurel to Ms Robinson in relation to dealings between TCC and MKG which were not copied to Mr Keogh. I accept Robinson Legal's submission that there is no impropriety in Ms Robinson and Mr Maurel discussing matters in the absence of Mr Keogh, if they wish to do so; there is no suggestion that MKG has taken any substantive corporate act in respect of those matters without Mr Keogh's involvement.

1. In my view, Ms Robinson's involvement as a director of MKG and the dispute as to the adequacy of the communication between the directors of MKG in respect of this matter also do not give rise to any issue which would lead a fair-minded and reasonably informed member of the public to conclude that Ms Briscoe's conduct of the proceedings for TCC involves a risk of prejudice to the administration of justice. The evidence does not support any credible suggestion that Ms Briscoe's conduct of the proceedings has been or will be influenced by any issues between Mr Keogh and Ms Robinson as directors of MKG, as distinct from the more fundamental issues between TCC as plaintiff and Mr Keogh as defendant in the proceedings.

1. There is also evidence that Robinson Legal would presently be inclined to permit TCC time to pay invoices if it had difficulty with such payment. I do not understand this to be a matter that would give rise to a concern as to the administration of justice.

Mr Robinson's position

1. Mr Robinson was admitted as a solicitor in 1979. Mr Robinson became a part-time consultant solicitor to Robinson Legal in about 1 July 2000 and has, since mid 2011, been pursuing other business interests and winding down his involvement with Robinson Legal. Mr Robinson is not acting for TCC in the proceedings, although he had an involvement with TCC in the earlier proceedings relating to the statutory demand.

1. Mr Keogh contends that Mr Robinson is compromised because he was the "architect" of steps taken in November 2010 in respect of Mr Keogh; what happened at the meeting of directors held on 15 November 2010 is in dispute and Mr Robinson is a potential witness, at least in the new proceedings to which I will refer below; Mr Robinson has had a strong influence in forensic decisions in the present case, with he and his wife having "effectively decided" to resist the current application; and because of Ms Robinson's involvement in the affairs of MKG. I have dealt with Ms Robinson's involvement in the affairs of MKG above.

1. In particular, Mr Keogh relies on the fact that Mr Robinson attended the meeting on 15 November 2010 between the directors of TCC at which, as I noted above, the matters which are the subject of these proceedings were initially raised with Mr Keogh. Mr Keogh also pointed to Mr Robinson's involvement in assisting TCC in preparing for, and in attending, the meeting on 15 November 2010. I do not consider that a solicitor's involvement in assisting his or her client in preparing for a contentious meeting creates any reason why the solicitor should not subsequently act in litigation in which the client seeks to advance the position for which it contended at that meeting. In my view, that involvement has the same character as advice whether to prosecute or defend a claim in that regard: Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 at 589-590; Mitchell v Burell above at [21].

1. I also do not consider that a solicitor's attending such a meeting will generally prevent his or her acting in the proceedings, at least where what was said at that meeting is not a matter in issue in the proceedings. In this case, Mr Keogh's affidavit affirmed 7 May 2012 in these proceedings does not address the meeting of 15 November 2010 so as to give rise to any need for Mr Robinson to give substantive evidence in the proceedings. Mr Robinson's evidence is that he has been advised by Counsel that he will not be required to give evidence in the proceedings, and that advice is not surprising where that meeting is not in issue in the proceedings. Even if Mr Robinson had been required to give evidence in the proceedings, in Mitchell v Burell, Brereton J did not accept that:

"the mere circumstance that a solicitor will be a material witness, even on a controversial matter, of itself justifies restraining the solicitor from continuing to act".

1. Mr Keogh also identified concerns as to the conduct of the meeting, including an allegation that Mr Robinson's conduct in that meeting was "aggressive" towards him. It appears from Mr Keogh's cross-examination that the reference to "aggression" was as much a reference to the nature of the allegations raised as to Mr Robinson's manner in the course of the meeting. The suggestion that Mr Robinson was "aggressive" in that meeting is denied by Mr Robinson. It is not necessary for me to determine the question whether Mr Robinson was, or was not, "aggressive" in that meeting, since this question does not seem to have any potential relevance to the matters in issue in the proceedings.

1. Mr Keogh also refers to subsequent correspondence between Mr Robinson on the one hand and his solicitors on the other concerning the allegations against him. I do not consider that Mr Robinson's involvement in preparing letters that advance the matters which TCC now advances in the proceedings is an obstacle to Robinson Legal now acting for TCC in the proceedings. It would be commonplace that solicitors would assist their clients in the preparation of letters which advance allegations, prior to the commencement of proceedings, which are later advanced by the clients, represented by the same solicitors, in those proceedings.

1. The basis for relief, so far as it is directed to Mr Robinson's involvement with TCC, is also weakened in circumstances that Mr Robinson is a consultant to, not a partner in, Robinson Legal and Ms Briscoe and Ms Hudap are acting in the proceedings. There are several cases in which, although an employed solicitor has been restrained from continuing to act, the firm by which he or she was employed has been permitted to continue to act: Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491; Mitchell v Burell at [25].

Ms Briscoe's position

1. As I noted above, Ms Briscoe is the solicitor on the record in these proceedings. She is an experienced practitioner. She was admitted as a solicitor in December 1986; joined Robinson Legal in 1998; became a partner of the firm in 2000 and a director of the incorporated firm in November 2005.

1. Mr Keogh contends that Ms Briscoe's position is compromised by the influence of Mr and Ms Robinson, since they are her "senior colleagues" in the firm. Mr Keogh criticises Ms Briscoe's assessment of the question whether Robinson Legal could properly act for TCC in the proceedings by reference to the fact that she was not then aware of, and had no involvement in, any issues as to the lease arrangements between TCC and MKG or any outstanding rent owed by TCC to MKG. I do not regard this as a matter for criticism of Ms Briscoe; indeed, it emphasises her lack of involvement in the commercial issues in respect of MKG on which Mr Keogh relies to challenge her involvement in the proceedings. I also do not accept Mr Keogh's submission that Ms Briscoe did not bring an independent mind to bear on Robinson Legal's decision whether to continue to act in the proceedings or to oppose the present application. I accept Ms Briscoe's evidence that she took the same view as Mr and Ms Robinson, that the firm was entitled to continue to act in the proceedings. I consider that view was correct for the reasons I have set out above.

1. I have not found that Mr and Ms Robinson would necessarily be unable to represent TCC in the proceedings, although they do not seek to do so. I do not consider that their interests are such as to prevent Ms Briscoe from doing so.

Delay

1. In Mitchell v Burell above, Brereton J noted that the timing of an application for the Court to restrain a solicitor from acting may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act when proceedings are well advanced may provide strong reason for refusing to grant relief. There is, as I have noted above, evidence of a lengthy sequence of correspondence in which Mr Keogh has objected to Robinson Legal's acting for TCC in the substantive dispute and Robinson Legal have maintained that they are entitled to continue to act for TCC. Mr Keogh has been aware of the matters which support this application for a long period and has previously objected to Robinson Legal acting in relation to the substantive matters in dispute, then in relation to the statutory demand and then in relation to these proceedings. Mr Keogh's evidence in cross-examination was also that he decided to "wait until the evidence came in" before challenging Robinson Legal's retainer in these proceedings. There has been a two year period between Mr Keogh's first raising these objections and his bringing an application before the Court to restrain Robinson Legal, and ultimately Ms Briscoe, from acting.

1. TCC has incurred substantial costs in the retainer of Robinson Legal in the proceedings and the proceedings have been provisionally set down for final hearing with an estimate of five days commencing on November 2012. I accept that Robinson Legal and, in particular, Ms Hudap have developed a detailed knowledge of the matters in issue in the proceedings and the relevant acts and documents. Mr Robinson's evidence is that he estimates in excess of 50 hours work will be required for new solicitors to take over conduct of the matter and the costs that would be lost by a change of solicitors would be in the order of $25,000 (T126-T128). I accept that estimate which is, in my view, likely to be conservative rather than excessive.

1. The necessary consequence of Mr Keogh's delay in bringing this application, and the fact that it is now determined after TCC's evidence has been filed and not long before the provisional hearing date for the proceedings, is to maximise the disadvantage to TCC of the loss of its solicitors after they had already undertaken the work required to prepare the proceedings for hearing. This observation does not depend on any assumption by TCC or Robinson Legal that Mr Keogh had abandoned his objection, but reflects the fact that TCC was entitled to retain the solicitors of its choice to represent it in the proceedings unless and until Mr Keogh sought, and the Court made, an order changing that position. While I recognise that parties to litigation will need from time to time to reach decisions as to where to devote their resources, the facts that Mr Keogh chose not to bring an application to restrain Robinson Legal from acting for a lengthy period, and to wait to review the substantive evidence before determining whether to do so, are strong discretionary factors tending against the grant of the relief now claimed.

The new proceedings

1. A week before this application was listed for hearing, Mr Keogh filed separate proceedings ("new proceedings") seeking orders under ss 233 and 459A of the Corporations Act 2001 (Cth) that TCC be wound up or alternatively that Mr Maurel and Mr Gage purchase Promotion Marketing's shares in TCC on such terms and at such price as the Court determines, together with judgment in favour of Promotion Marketing against TCC for $788,053 and interest. Mr Keogh's affidavit dated 13 July 2012 in the new proceedings refers to the meeting on 15 November 2010 at which Mr Robinson was present, which, as I have noted above is not in issue in these proceedings.

1. Neither party has applied for the new proceedings to be joined with these proceedings. Such an application would raise issues of case management and the exercise of the Court's discretion, in circumstances that these proceedings have been on foot for some time; a substantial amount of evidence has been filed in them; and the proceedings are provisionally fixed for hearing in November 2012. It is not necessary for me to address the position if the Court were persuaded to join the new proceedings with these proceedings, because no such application has been brought before me.

Conclusion

1. I am satisfied that a fair minded and reasonably informed member of the public would not have an expectation that Ms Briscoe would be unable to act for TCC, because Ms Robinson had a family connection with a shareholder and director of TCC; or because Ms Robinson had a somewhat remote economic interest in TCC's financial position, by reason of an indirect and minority interest in another entity which leased premises to TCC; or because a consultant to the firm, Mr Robinson, had previously represented TCC in respect of the issues in dispute, where there was no suggestion that his advice was in any way improper or in breach of the firm's professional duties or given negligently; or by reason of the other matters to which I have referred above.

1. I am not persuaded that the Court's inherent jurisdiction over its officers or the due administration of justice requires that an order be made restraining Ms Briscoe from acting in the proceedings. As I noted above, the application for relief against Mr Robinson or Ms Robinson was ultimately not pressed, where they do not presently have conduct of the proceedings and there is no suggestion that they will assume conduct of the proceedings.

1. Accordingly, I order that the Interlocutory Process dated 2 March 2012 be dismissed. In the ordinary course, an order would be made that Mr Keogh pay the costs of the proceedings, on the basis that costs should follow the event. However, I will hear the parties as to costs.

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Decision last updated: 21 August 2012