KASSOS & SHARMAN

[2012] FamCA 233

FAMILY COURT OF AUSTRALIA

KASSOS & SHARMAN [2012] FamCA 233

FAMILY LAW - PRACTICE AND PROCEDURE – application by the wife seeking orders that the husband’s solicitors be restrained from further acting in the proceedings – where the husband’s current solicitors acted for the wife in previous proceedings between the wife and her former husband – where the Court was satisfied that confidential information may be prejudicial or have the risk of being a disadvantage to the wife in the current proceedings – where the Court held that the prejudice or disadvantage to the wife outweighed the impact that such an order would have upon the husband – orders that the husband’s solicitors be restrained from further acting for the husband in the proceedings.

FAMILY LAW - COSTS – application by the wife seeking orders that the husband pay the costs of her solicitor and counsel’s attendance at the hearing – consideration of the s 117(2A) factors – whether the circumstances justify the making of an order for costs – where the wife has been wholly successful in her application – orders that the husband pay the wife’s costs.

Family Law Act 1975 (Cth) s 117

McMillan and McMillan (2000) FLC 93-048

APPLICANT: Ms Kassos

RESPONDENT: Mr Sharman

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: DNC 131 of 2011

DATE DELIVERED: 10 April 2012

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 10 April 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Livesy QC

SOLICITOR FOR THE APPLICANT: Norman Waterhouse

COUNSEL FOR THE RESPONDENT: Mr Black

SOLICITOR FOR THE RESPONDENT: Cecil Black Family Lawyers

Orders

1. The husband is restrained and an injunction is granted restraining him from engaging or continuing to engage:

   (1.1)Mr Cecil Black or Cecil Black Family Lawyers as his legal representative in these proceedings;

   (1.2)Any counsel instructed by Mr Cecil Black in these proceedings including Mr Tom Kirk, SC and Mr Michael Fellows.

2. Within twenty-one [21] days from today the husband pay the wife’s costs of solicitor and counsel’s attendance before the Honourable Justice Dawe today such costs to be agreed or in default of agreement as assessed by a Registrar of this Court.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kassos & Sharman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: DNC 131 of 2011

Ms Kassos

Applicant

And

Mr Sharman

Respondent

EX-TEMPORE REASONS FOR JUDGMENT

1. Before me this morning is an Application in a Case filed by the wife in the proceedings on 19 March 2012.  The Application seeks an order that the husband be restrained from engaging or continuing to engage Mr Cecil Black or Cecil Black Family Lawyers, as his legal representative in these proceedings and any counsel instructed by Mr Black in these proceedings, including Mr Kirk SC and Michael Fellows and that the husband pay the wife’s costs.

2. In support of that Application, the wife has filed an Affidavit which sets out the basis upon which she seeks that Mr Black and counsel no longer act for the husband.

3. It is not in dispute that in a period around 2003 to 2005, Mr Black’s firm of solicitors acted for the wife in previous proceedings between the wife and her former husband in relation to property settlement and children’s issues.  As a result of these proceedings consent orders were made.

4. Nor is it in dispute that subsequent to acting for the wife, Mr Black’s firm sued the wife for unpaid fees and recovered the same from the wife.

5. However, what is in dispute is, whether this is a situation in which the well known principles apply which would require Mr Black, his firm and counsel be restrained from acting for the husband in this matter due to any risk to the wife of prejudice.

6. It is true that the proceedings have been on foot in the court since 2011.  It would appear that prior to the proceedings there was some correspondence between the various solicitors, in which Mr Black was then acting for the husband and corresponding with the present solicitors for the wife.

7. What is also clear is that the wife, in her affidavit, asserts that she did not connect the name of her husband’s current solicitors with the circumstances in which she formerly instructed that firm of solicitors when Ms Bowen was an employee of that firm.

8. The Affidavit of the wife sets out the background to the matter and, in particular, sets out the significance of the appearance of Ms Bowen in the Family Court proceedings in March of this year, when the wife became aware of the connection between Ms Bowen and the husband’s current solicitors, Mr Black.

9. There is a dispute about the application of the law to these facts and whether the delay has been unacceptable to the extent that the discretion should not be exercised as would normally be the case.

10. Counsel have referred me to various authorities, but significantly, in my view, is the accepted authority of McMillan and McMillan (2000) FLC 93-048, which sets out the tests to be applied and has most frequently been applied in this jurisdiction. I will summarise the decision as indicating that the public policy is that justice must be seen to be done and where there is an expectation of maintaining confidential information, the public confidence in the legal system requires that confidentiality must also be recognised as a significant factor.

11. In the case of McMillan and McMillan (supra) the Full Court of the Family Court adopted the comments of Mullane J in the earlier decision of Griffis and Griffis (1991) FLC 92-233 and said that:

    …the client need only provide “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.” (at 87,739)

12. The wife has indicated in her Affidavit that she instructed Mr Black’s firm of lawyers.  Indeed, Mr Black appeared on one occasion for her in the Family Court and has signed documents in those previous proceedings on her behalf.  The clear implication, therefore, is that confidential information would have been provided by the wife to Mr Black or his employed solicitor and, as such, the confidential information can be assumed to relate to matters of finance and children’s issues.

13. I accept that therefore, the circumstances set out are sufficient to bring about the presumption that confidential information may be prejudicial to, or have the risk of being a disadvantage to the wife in these proceedings.

14. What is significant also is that the concept of the law must not only be done but the principles must be applied so that justice is seen to be done, to maintain the parties’ confidence in the proceedings.

15. I am therefore satisfied that the law establishes in this case, a sufficient connection between Mr Black’s firm, formerly acting for the wife in matrimonial proceedings and the risk that there might be to that confidence being a disadvantage to the wife, or prejudicial to the wife in these proceedings.

16. The other issue is the question of unacceptable delay and prejudice to the husband.  The unacceptable delay is asserted due to the time which passed from Mr Black commencing to act for the husband and the wife bringing these proceedings.

17. It is also of note in this matter, that Mr Black did not advise the wife’s solicitors nor the wife, that he had in fact previously acted for the wife in matrimonial proceedings.  That puts the delay of the wife in context.

18. The issue is whether the wife must have remembered or did in fact remember.  I accept on the evidence that there is clear indication that the name of Cecil Black and the firm of Cecil Black Family Lawyers was, indeed, known to the wife at an early stage of these current proceedings.  However, I also accept the explanation of the wife that it wasn’t until she saw Ms Bowen that she was reminded of the connection between Mr Black and her previous proceedings against her former husband.

19. In what is also of significance in this matter however, is the delay and the implication that the delay has also been, to a certain extent, caused by the wife’s lack of knowledge of her rights in relation to an objection to a solicitor who has formerly acted for her in matrimonial matters.

20. I am satisfied that although a delay in many cases would be considered to be a significant factor in exercising the discretion, in this case, I am not satisfied that the delay and the circumstances surrounding it, are such as to bring about the dismissal of the wife’s Application.

21. The other factor which is necessary to be weighed when exercising the discretion is the impact that the order might have upon the husband and the prejudice that he might suffer.  The husband has had work done for him.  It will be necessary for him to instruct other solicitors.  Therefore he will incur some costs for the other solicitors to make themselves familiar with the work that has been done to date.

22. However, that needs to be weighed in the balance when considering the Court’s discretion to exercise the principles as set out in McMillan.

23. I am satisfied that the disclosure of confidential information which would be brought about even in proceedings which resulted in consent orders between the wife and her former husband, are such that establish the prima facie case that it would be prejudicial to the wife and could not be, such that it is necessary to make the order as sought by the wife.

24. The wife makes an application for costs against the husband and requests some comment in relation to the indemnity of the husband’s costs by his current solicitors who must cease to act.

25. Section 117 of the Family Law Act 1975 (Cth) sets out the basis upon which the court can make orders. On the face of it, the proceedings, although between the husband and the wife, take on much more of an unusual aspect because the proceedings relate to a solicitor ceasing to act for one of the parties. The provisions of section 117 (2A) highlight the matters which must be considered when making an order for costs in all proceedings.

26. In this case, the wife has been wholly successful in the application. The Court is required to take into account, the financial circumstances of the parties and other factors set out in section 117. But in this particular case, the matter which has been before the court is an application in a case filed together with an affidavit setting out the explanation for the orders sought.

27. There is no dispute that at one time Mr Black acted for the wife and then sued the wife for costs, being proceedings in which Mr Black had acted for the wife against her former husband as a result of breakdown of an earlier marriage.  Nonetheless, the husband has seen fit to oppose the application and to bring the matter before the court for argument.

28. The Application in a Case, in itself, was filed fairly promptly after the wife became aware of the circumstances.

29. In the circumstances however, I am not disposed to order that the husband pay all of the wife’s costs of and in relation to the application.  The bringing of the application was perhaps necessary to call upon the Court’s jurisdiction.

30. The Court is unable to enquire as to the confidential instructions given by the husband to Mr Black and therefore is not in a position to make any order in relation to the solicitor indemnifying the husband in relation to costs.

31. But weighing all of the factors in section 117 and taking into account the provisions in the Family Law Rules 2004, I am satisfied that it is just and equitable for the husband to pay the wife’s costs of the solicitor and counsel’s attendance at the hearing before me today. Otherwise the costs are to be borne by each party.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 10 April 2012.

Associate: 

Date:  18 April 2012