KONCZ & KONCZ

[2013] FamCA 444

FAMILY COURT OF AUSTRALIA

KONCZ & KONCZ [2013] FamCA 444

FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband sought an order that the wife be ordered to cease to instruct her present solicitors due to a law clerk to whom the husband had provided instructions when the clerk was working with his previous solicitors then commenced to work as a solicitor in the firm instructed by the wife  - Where the former law clerk, now a solicitor, subsequently left the employ of the firm instructed by the wife – Discussion of relevant legal principles and relevant authorities – Where the test is not based upon actual prejudice or actual disclosure but rather potential or inadvertent disclosure – Where the evidence establishes that no disclosure of confidential information has taken place and that there is no real risk of inadvertent disclosure in the future thus there is no basis for enjoining the wife’s solicitors from continuing to act in this matter – Where the husband’s application is dismissed.

Family Law Act 1975 (Cth)

McMillan v McMillan [2000] Fam CA 1046

Stewart (Lindenmayer J,17 April 1997, unreported)

Thevenaz & Thevenaz (1986) FLC 91-748

APPLICANT: Mr Koncz

RESPONDENT: Ms Koncz

FILE NUMBER: WOC 376 of 2012

DATE DELIVERED: 14 June 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 31 May 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Greenaway

SOLICITOR FOR THE APPLICANT: Dom Velcic & Co Pty Ltd Solicitors & Barristers

COUNSEL FOR THE RESPONDENT: Mr Lethbridge SC

SOLICITOR FOR THE RESPONDENT: Rebecca Bailey & Associates

SOLICITOR FOR THE INDEPENDENT

CHILDREN’S LAWYER:

Mr Christaki, Legal Aid NSW

Orders

1. That the husband’s Application in a Case filed 20 May 2013 is hereby dismissed. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Koncz & Koncz has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: WOC 376 of 2012

Mr Koncz

Applicant

And

Ms Koncz

Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

Introduction

1. Mr Koncz (“the husband”) seeks an order that Ms Koncz (“the wife”) be ordered to cease to instruct her present solicitors.  This is because, it is said, that a law clerk to whom he provided instructions when the clerk was working with his previous solicitors then left that firm and commenced to work as a solicitor in the firm instructed by the wife. 

Background

1. In June 2012 the husband retained B Law Firm, to act on his behalf in these proceedings.  On 23 January 2013 B Law Firm filed a Notice of Ceasing to Act. 

2. In June 2012 the Husband met Ms C, then a law clerk employed by B Law Firm.  He says that in July 2012 he occasionally spoke with Ms C by telephone to provide her with instructions in relation to an application and an interim hearing in these proceedings in July 2012. 

3. Between 12 September 2012 and 8 January 2013 a number of emails were received by the husband from Ms C in relation to these proceedings.

4. Most of these emails were Ms C forwarding documents such as affidavits, letters that had been received and making arrangements for copying of documents. 

5. However on 13 September 2012 the husband sent an email addressed to Ms C and to his solicitor with the conduct of the matter (Mr D), as follows:

   Dear [Mr D]

   My responses to the amended initiating applications by the other party that is [the wife], are attached.  Please note my responses and please make sure that my objections are presented to the Court next Tuesday 18^th of September.  If any questions, please let me know.  In the meantime, I have started working on my affidavit in reply to [the wife’s]. 

   Kind regards

   [The husband’s name] (as per original)

6. The husband then attached to that email his responses, notes and letters referred to in those responses.

7. On 14 September Mr D replied, in an email addressed to the husband and to Ms C saying:

   Thanks [the father’s name].  We will read through your responses and look forward to receipt of your further notes.

   Regards, [Mr D] (emphasis added)

8. The reference to “we” could simply be a reference to the firm or it could be a direct reference to the solicitor and Ms C.

9. In August 2012 Ms C was admitted to practice as a solicitor. 

10. On 13 February 2013 Ms C commenced to work with Rebecca Bailey & Associates who are the solicitors for the Wife. 

11. On 9 April 2013 Ms C ceased to be employed by Rebecca Bailey & Associates. 

12. Ms Bailey says that at no time whilst Ms C was employed by her did Ms Bailey or the wife discuss the case with Ms C. 

Principles to be Applied

1. In McMillan v McMillan [2000] Fam CA 1046;(2000) FLC 93-048 the Full Court approved the following statement of Frederico J in Thevenaz & Thevenaz (1986) FLC 91-748 at 75, 446:

   Thus “a practitioner who wishes to cease acting for one party and to continue to act for the other party will be restrained from doing so by the Court if there is any evidence that confidential communications have been made to him by the party for whom he is ceasing to act.  In such a case the Court will not weigh conflicting evidence as to confidence.  It will act upon the evidence of the client who swears that he has made the confidential communication”. (references omitted)

2. His Honour also said:

   It is my view that Mr Dezarnaulds should not continue to act on behalf of Mrs Thevenaz.  It may well be that the risks were he to do so are more theoretical than practical.  However, it is asserted and not contradicted that material in the files does relate to confidences exchanged in the course of the former firm previously acting on behalf of both parties and would embarrass the husband.  It is of the utmost importance that justice should not only be done but appear to be done. In the circumstance of the present case, there is a risk which may well be theoretical but still exists, that justice might not appear to be done.

3. In McMillan v McMillan the Full Court also expressly approved the following statement by Lindenmeyer J in an unreported decision of Stewart (17 April 1997) where his Honour said:

   All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that that information may be used against her or at least to her disadvantage, in these current proceedings.

4. Counsel for the wife submitted that these authorities gave rise to a two step test which required answers to the following two questions:

   (a)      Did Ms C receive confidential information from the husband?

   (b)      Is there or was there a risk that such information would be used?

5. Having regard to the passage just quoted from Stewart the second limb of the two questions proposed by counsel is too restrictive.  The test is not whether the confidential information would be used but rather “may be used”.  The evidence needed to establish the test is evidence of a not unreasonable belief that the information may be used.  This flows from the statement of Frederico J that the test is analogous to justice being seen to be done as well as being done.

6. Counsel for the wife submitted that Ms C had not received confidential information because the evidence did not establish any receipt of such information and because the giving of instructions, of itself, is not the giving of confidential information. 

7. As to the first part of that submission the email exchanges of 13 and 14 September 2012 establish a prima facie case that responses, notes and letters to the wife’s affidavits were provided.  That is sufficient to be described as confidential information. 

8. As to the second the Full Court in McMillan said at [58] in relation to instructions given by a client to his solicitor that “the confidential nature of such instructions is obvious”. Thus, even if the matters conveyed to Ms C could be described as merely instructions they could still be confidential information provided to her. 

9. Accordingly, I do not accept the submission that no confidential information was received by Ms C. 

10. It was submitted by the wife that, as she had not met Ms C there had been no opportunity for Ms C to disseminate any confidential information to the wife.  Secondly, it was submitted that as there had been no discussion between Ms C and Ms Bailey about this matter and no confidential information was disseminated to her. 

11. The evidence of the wife and Ms Bailey is to that effect.  Their evidence was not challenged.  It was, however, submitted by the husband that, as Ms Bailey had initially overlooked receiving an email from Ms C in this matter whilst Ms C was at Law Firm B and had written a letter on 16 May 2013 denying any knowledge of any involvement of Ms C whilst she was at Law Firm B, her evidence was not reliable.  The email received by Ms Bailey was sent from Ms C’s email address but was described as being by the solicitor acting in the matter.  In that case, the oversight is not such as to cause me to reject Ms Bailey’s evidence.

12. The evidence establishes that there was no disclosure of confidential information by Ms C to the wife or Ms Bailey.

13. That is not the end of the matter because the test is not based upon actual prejudice or actual disclosure but rather potential or inadvertent disclosure.  In McMillan at [59] the Court said “there must remain at least that theoretical risk that the confidential information given by the husband to Mr Pitts maybe disclosed, even inadvertently”. 

14. Ms C has not been employed by Rebecca Bailey & Associates since 9 April 2013.  It is therefore unlikely that there will be any disclosure, advertently or inadvertently, by her of any confidential information received by her from the husband.

15. Thus, given that no disclosure of confidential information has taken place and that there is no real risk of inadvertent disclosure in the future there is no basis for enjoining the wife’s solicitors from continuing to act in this matter.  The risk to be guarded against is the disclosure of the husband’s confidential information.  The authorities indicate that it is important that justice be seen to be done as well as being done.  Had Ms C remained at Rebecca Bailey & Associates it would have been appropriate to grant the injunction sought by the husband.  She is not and there was no prior disclosure.

16. The wife states that the parenting proceedings before the Court are complex and that her case occupies at least eleven lever arch folders at her solicitor’s office.  She says that as she does not work the cost to her of instructing new solicitors will be extreme.  The parenting proceedings are listed for hearing on 15 October 2013 for four days.

Conclusion

1. The wife, in these circumstances, should not have to bear the costs of instructing new solicitors.

2. The husband’s Application in a Case filed 20 May 2013 is dismissed.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 14 June 2013.

Associate: 

Date:  13 June 2013