Kyriackou v Commonwealth Bank of Australia

[2009] VSCA 241

SUPREME COURT OF VICTORIA
COURT OF APPEAL

No 3825 of 2008

MICHAEL KYRIACKOU
	Appellant
v
COMMONWEALTH BANK OF AUSTRALIA	Respondent

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JUDGES:	NEAVE and MANDIE JJA, BYRNE AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	12 October 2009
DATE OF JUDGMENT:	23 October 2009
MEDIUM NEUTRAL CITATION:	[2009] VSCA 241
JUDGMENT APPEALED FROM:	[2008] VSC 146 (Judd J)

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LEGAL PRACTITIONERS - Appeal by defendant from dismissal of application to restrain solicitors from acting for plaintiff in main proceeding - Whether employee of solicitors obtained confidential information in capacity as employee of defendant's former solicitors - Whether breach of duty of loyalty owed to defendant - Effect of removal of employee from acting in main proceeding on  behalf of plaintiff  - Whether solicitors should be restrained from acting - Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J K Arthur with Mr S P Matters	Pinto Law Pty Ltd
For the Respondent	Dr C L Pannam QC with Mr S Hay	Gadens Lawyers

NEAVE JA
MANDIE JA
BYRNE AJA:

1. This appeal arises incidentally out of Supreme Court proceeding number 5496 of 2005 in which the appellant (or ‘Mr Kyriackou’) is the defendant and the respondent, Commonwealth Bank of Australia (or ‘the Bank’), is the plaintiff (‘the main proceeding’).  Mr Kyriackou applied by summons dated 12 December 2007 for an injunction to restrain the firm of Gadens Lawyers (‘Gadens’) from continuing to act as solicitors for the Bank in the main proceeding.  That application was dismissed by a judge in the Trial Division and, from that dismissal, this appeal is brought.

Background facts

1. The main proceeding was commenced by writ filed by Gadens on behalf of the Bank on 7 April 2005.  The Bank sought recovery of a debt alleged to be owing pursuant to a loan agreement and mortgage relating to a home loan facility and to a ‘streamline’ facility that the appellant had with the Bank.  Gadens have acted for the Bank throughout and a solicitor employed by Gadens, one Lana Collaris, had the conduct of the matter until she left the firm’s employment in late August 2007.

1. Mr Kyriackou filed a defence and counterclaim in the main proceeding.  The counterclaim sought damages in respect of an allegedly improper or negligent mortgagee’s sale.  Extending over a period in excess of two years, various interlocutory steps, which are unnecessary to detail, occurred in the main proceeding until, on 18 July 2007, the Bank entered judgment against Mr Kyriackou in default of defence.  His defence and counterclaim had been struck out following an order of Master Daly made on 18 June 2007 providing for this to occur if certain costs of the Bank were not paid by 16 July 2007. 

1. On 21 September 2007, Mr Kyriackou filed a summons returnable on 19 October 2007 seeking to set aside the default judgment.

1. Prior to 30 January 2006, Annette Leigh Gaber (‘Gaber’) was a solicitor employed by the firm of Rothwell Lawyers (‘Rothwells’), a firm that acted for Mr Kyriackou in a number of proceedings.  As a consequence, in the course of her employment by Rothwells, Gaber had some involvement with Mr Kyriackou.  The degree of that involvement was one of the issues dealt with in the decision under appeal.  On 30 January 2006, Gaber commenced employment with Gadens.  Initially she played no part in the conduct of the main proceeding.

1. It was only after Lana Collaris left her employment with Gadens that Gaber was given the conduct of this proceeding on behalf of the Bank.  This occurred on or about 27 August 2007 at a time when default judgment had already been entered against the appellant. 

1. On 18 October 2007, Gaber swore an affidavit on behalf of the Bank in opposition to Mr Kyriackou’s application to set aside the default judgment.  It was this event that apparently brought to the notice of Mr Kyriackou the fact that Gaber, a former employee of his solicitors, Rothwells, was now acting against him.  As a result, on 19 October 2007, Mr Kyriackou raised before the Senior Master his objection to Gadens continuing to act for the Bank in the main proceeding.  Mr Kyriackou’s application to set aside the default judgment was adjourned to 22 November 2007 and adjourned again, on that date, to 12 December 2007.

1. The application to set aside the default judgment remains in limbo (although not formally adjourned further) because, on 12 December 2007, Mr Kyriackou applied for an injunction restraining Gadens from continuing to act for the Bank.  The summons was initially supported by an affidavit of Mr Kyriackou sworn on 13 December 2007 (‘Mr Kyriackou’s first affidavit’).

1. In Mr Kyriackou’s first affidavit he deposed that he first met Gaber in late 2004 when she was employed as a solicitor by Rothwells and that, in January 2005, he was employed as the legal practice manager for the firm of Walter Percival Edwards trading as W P Edwards (‘Edwards’).  The appellant deposed that at about that time Edwards outsourced a number of legal files to Rothwells including three of Mr Kyriackou’s personal matters, namely, the main proceeding, a matter relating to the Bank of Cyprus and a matter relating to the Official Trustee in Bankruptcy.  Mr Kyriackou deposed that from January 2005 to November 2005 ‘Gaber worked on all my cases’, including the main proceeding.  Mr Kyriackou further deposed that ‘[u]nder the circumstances she has knowledge which can be detrimental to me, which can now be imputed to Gadens also having that knowledge’. 

1. Gaber swore an answering affidavit on 18 January 2008 in which she said that she first met Mr Kyriackou in about April 2005 and that she did not recall ever taking instructions from him about a matter that related to him personally.  She said that she had not acted for Mr Kyriackou in any capacity in the main proceeding and indeed, to the best of her recollection, had never acted for him in any capacity in any matter in which he was a party or which involved him personally.  She added that, to the best of her recollection, she did not have any knowledge, privileged or otherwise which she had obtained from him.

1. David Harold Reichenberg[1] is a partner of Gadens and Gaber had the conduct of the main proceeding under his supervision.  On 23 January 2008, Gaber informed Reichenberg that the appellant’s solicitor, Mr Sanna, had informed her that he had inspected a file of Rothwells which had been subpoenaed and found documents containing references to her (Gaber).  On or about the same date Gaber informed Reichenberg that to the best of her knowledge she did not recall receiving any instructions directly from Mr Kyriackou in relation to any of his personal matters, particularly the main proceeding.  She told Reichenberg that she recalled working on matters involving the clients of Edwards and companies with which Mr Kyriackou and Mr Walter Edwards (the principal of Edwards) were associated.

   [1]Mr Reichenberg swore an affidavit in this matter on 26 March 2008 that was in evidence before the primary judge and he was not cross-examined upon it.  The facts stated about Mr Reichenberg’s involvement are derived from that affidavit.

1. Thereupon Reichenberg transferred the care and conduct of the main proceeding to one Natalie Pinto, an associate of Gadens, under his supervision.  Mr Reichenberg deposed that this was done ‘out of an abundance of caution and without any admissions that Ms Gaber did take any instructions from Mr Kyriackou’.

1. Thus, Gaber’s involvement with the main proceeding on behalf of the Bank was for the period commencing on 27 August 2007 (after the default judgment had been entered) and ceasing on 24 January 2008 in the circumstances outlined above.  Further, as Reichenberg deposed, ‘the file [did] not contain any notes of privileged information allegedly divulged to [Gaber] by Mr Kyriackou’ and ‘[Gaber had] not given [him] any privileged information concerning Mr Kyriackou which she allegedly obtained during the course of her employment with [Rothwells]’.

1. Reichenberg also deposed that at some time after her removal from the conduct of the main proceeding Gaber had informed him that she recalled carrying out work on instructions from Ms Tracey Rothwell (‘Ms Rothwell’) on a matter for Mr Kyriackou involving a claim against him for damage to a car park entry barrier and that she had drafted a defence in that matter.

1. On 12 February 2008, Mr Kyriackou swore a second affidavit in which he stated inter alia:

I had numerous conferences with [Gaber], in which she obtained instructions from me in order to enable her to draft the defence and counterclaim in this matter…I can recall that we dealt with the strength of the case of [the Bank] against me, the merits of my defence and counterclaim, the weaknesses of my case, and the likelihood of my succeeding at trial.

and (after exhibiting a copy of the draft defence and counterclaim):

The said document was in reality drafted by [Rothwells.]  I had been told by [Gaber] from [Rothwells] that she was responsible for the preparation of the said document and that she had actually drafted it. … I provided instructions directly to [Gaber].

1. Later in his second affidavit Mr Kyriackou deposed:

I am concerned that [the Bank] may have had an unfair advantage in prosecuting its claim due to the knowledge that [Gaber] had of other cases that she had been acting in on my behalf and in particular the matter of Kyriackou v Official Receiver (hereafter called the sequestration proceeding).

…

I am not precisely sure of when [Gaber] became responsible for the care and conduct of the sequestration proceeding, but I can recall that we had a number of conferences discussing whether to join a third party to the sequestration proceeding…

…

I have deposed as to the circumstances of the sequestration proceeding because [Gaber] would have been well aware that [my solicitors] frequently did not meet court deadlines and there was a history of non-compliance and default judgments being entered that occurred in particular in my matters.  She thus would have known that if she prosecuted the claim of [the Bank], in an expeditious matter we would not be able to cope and that she would undoubtedly be successful in obtaining a default judgment against me, especially as she was aware through her dealings with me, that I did not have much funds with which to defend the case.

1. Gaber swore a further affidavit on 26 March 2008.  She deposed that, to the best of her recollection, she had not assisted with the preparation of the defence and counterclaim in the main proceeding, had not told Mr Kyriackou that she had and, indeed, had not seen the document before it had been exhibited to his second affidavit and that she had had no other involvement with the proceeding.  She said that she did not recall ever having any conferences with Mr Kyriackou in relation to the main proceeding or about any other matters that related to him personally.  In her affidavit, Gaber then dealt in detail with Mr Kyriackou’s allegations and with all of her alleged other involvements with him.

1. An affidavit in opposition sworn by Tracey Pauline Rothwell was procured and filed by Gadens.  Ms Rothwell in substance deposed that Gaber had had no involvement in the main proceeding and she also deposed as to Gaber’s involvement or lack thereof in the other proceedings with which Mr Kyriackou had been associated.

1. Mr Kyriackou’s application for an injunction against Gadens was heard over three days in April 2008.  Mr Kyriackou, Gaber and Ms Rothwell were all cross-examined.  In particular, counsel for Mr Kyriackou conducted extensive cross-examination of Gaber and Ms Rothwell with the benefit of access to all of the relevant files of Rothwells involving Mr Kyriackou and also with access to the records of  Rothwells recording the time spent on these matters and by whom.  Various files and records of Rothwells were put in evidence.  Submissions were made on behalf of the appellant and on behalf of the Bank.  Gadens itself was not a party, nor represented.

1. On 9 May 2008, his Honour handed down reasons for judgment, dismissing Mr Kyriackou’s application.

Reasons for judgment

1. His Honour recorded that Mr Kyriackou’s primary complaint was that Gaber became acquainted with confidential information about his defence in the main proceeding when employed by Rothwells.  The confidential information was said to include details of his financial affairs and litigation strategies.  The affidavit material did not disclose with any particularity the information said to have come to her knowledge but the appellant submitted that there was a sufficient description thereof having regard to his right to protect his confidential and sensitive information.  His Honour recorded that the second ground of the application was that Gaber, having acted on Mr Kyriackou’s behalf in the main proceeding and in various other matters, some of which were said to be related in some way to the main proceeding, owed him a duty of loyalty which  Gaber or Gadens would breach if Gadens continued to act.  His Honour recorded that, finally, Mr Kyriackou submitted that the conduct of Gaber, Ms Rothwell and Gadens was so offensive to the notions of fairness and justice that the Court should exercise its overriding jurisdiction to control the behaviour of its officers by restraining Gadens from continuing to act for the Bank in the main proceeding. 

1. As to the applicable legal principles, his Honour said:

The grounds upon which a solicitor may be restrained from acting for a party were helpfully summarised by Whelan J in Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202. In that case Whelan J accepted the correctness of the tests laid down by Brooking JA in Spincode Pty Ltd v Look Software Pty Ltd & Ors (2001) 4 VR 501, as discussed and applied by Nettle J in Sent and Anor v John Fairfax Publications Pty Ltd and Anor [2002] VSC 429. The grounds are summarised by Whelan J in the following terms:

‘(1) The Court will restrain a legal practitioner from continuing to act for a party to litigation if a reasonable person informed of the facts might reasonably anticipate danger of misuse of confidential information of a former client, and that there is a real and sensible possibility that the interest of the practitioner in advancing the case in litigation might conflict with the practitioner's duty to keep the information confidential and to refrain from using that information to the detriment of the former client.

(2) The danger of misuse of confidential information is not the sole touchstone for curial intervention where a solicitor acts against a former client. There is also an independent equitable obligation of loyalty which forbids a solicitor acting against a former client in the same or a closely related matter. Intervention may also be justified on this ground in the exercise of a Court's supervisory jurisdiction over its own officers.

(3) There is an overriding jurisdiction to intervene so as to protect the due administration of justice arising where a reasonable informed member of the public would conclude that solicitors should be prevented from acting’.

1. On the appeal, this statement of the applicable legal principles was not challenged.

1. His Honour said that the primary ground relied upon by Mr Kyriackou was that he had numerous conferences with Gaber and gave her detailed instructions in relation to his defence and counterclaim against the Bank.  His Honour noted the generality of Mr Kyriackou’s description of that which he said had been conveyed to Gaber but noted Mr Kyriackou’s submission that this description was sufficient, having regard to Mr Kyriackou’s right to protect his confidential information.  In that regard, his Honour referred to relevant authorities.[2]

   [2]Independent Management Resources Pty Ltd v Brown [1987] VR 605, 609 (Marks J); Sent v John Fairfax Publications Pty Ltd [2002] VSC 429 (Nettle J); Yunghanns v Elfic Pty Ltd (Supreme Court of Victoria, Gillard J, 3 July 1998, unreported).

1. His Honour said that Mr Kyriackou selectively revealed documents from the files as part of his evidence and exposed additional information and documents from the files in the course of cross-examination.  His Honour said that:

… [Mr Kyriackou] was selective in his disclosure of material from files while seeking to maintain an overriding claim to the confidentiality [thereof].  I am persuaded that if there was evidence in any of the files to support his case, [Mr Kyriackou] would have produced it.

…

… I am of the opinion that if [Mr Kyriackou] had anything more to disclose about the content of the alleged confidential communications with Ms Gaber or the numerous conferences that he claims to have had with her, he would have disclosed it.  Instead, he chose to make very general allegations that he had numerous conferences, refraining from giving detail purportedly in order to maintain confidentiality.  I regard his approach to his case as a device to avoid exposing the absence of evidence.

1. After extracting passages of cross-examination of Mr Kyriackou and referring to the evidence of Gaber and Rothwell, his Honour concluded:

In my view, [Mr Kyriackou’s] case that Ms Gaber acquired confidential information in relation to [Mr Kyriackou’s] defence and counterclaim in the main proceeding does not rise above mere assertion by him and is against the weight of the evidence given by Ms Gaber and Ms Rothwell. [Mr Kyriackou’s] application fails on the first ground.

1. His Honour then turned to the second ground relating to the ‘independent equitable obligation of loyalty’ that ‘forbids a solicitor acting against a former client in the same or a closely related matter’.[3]  His Honour said that the existence and extent of the duty of loyalty depended upon a consideration of the relationship between the main proceeding and the other matters in which Gaber may have acted while employed by Rothwells.  His Honour said that the first matter was the file maintained by Rothwells in the main proceeding and he noted that counsel for Mr Kyriackou had not contended that Gaber had seen that file or worked on it while at Rothwells and that there was no evidence that she did.

   [3]Citing Spincode Pty Ltd v Look SoftwarePty Ltd (2001) 4 VR 501, [25]-[53] (Brooking JA); Sent v John Fairfax Publications Pty Ltd [2002] VSC 429, [98]-[110].

1. His Honour then referred to the other matters that counsel for Mr Kyriackou had submitted were closely related to the main proceeding, namely, the sequestration proceeding (sometimes referred to as Kyriackou v Official Receiver), a proceeding against Mr Kyriackou brought by Shield Mercantile Pty Ltd and a discovery application against the Bank of Cyprus.  After analysing the evidence in relation to those matters, his Honour said:

In any event, I am not satisfied that the Shield Mercantile, Kyriackou v Official Receiver or the Bank of Cyprus matters are sufficiently related, if related at all, to the main proceeding so as to support the allegation that, by her limited involvement in the main proceeding while employed by Gadens or her continued employment by that firm, she (and thus Gadens) breached or threatened to breach a duty of loyalty to [Mr Kyriackou].  Ms Gaber no longer has any involvement in the main proceeding at Gadens.

The submission ultimately advanced by counsel for [Mr Kyriackou] was that these matters provided Ms Gaber with information about  the assets and liabilities of [Mr Kyriackou] and his strategies in dealing with his affairs.  This submission seems to invoke an obligation to protect confidential information which is not necessarily an element of this ground of complaint.  Such information falls more readily into the “getting to know you” category identified by Gillard J in Yunghanns v Elfic.  I accept that Ms Gaber may have obtained some information about the financial affairs of [Mr Kyriackou] and his approach to litigation from her limited involvement in these matters and her involvement in a few other commercial transactions she undertook on his behalf.  But the significance of that information to the main proceeding is remote to the point where it is difficult to consider how it might compromise her position as solicitor at Gadens or how it might reasonably be argued that Gadens had a duty not to act against [Mr Kyriackou] in the main proceeding.  The relevant knowledge is imprecisely defined information about [Mr Kyriackou’s] assets and liabilities which [he] alleges may translate into a view formed by Ms Gaber that he “did not have much funds with which to defend a case”; and [Mr Kyriackou’s] history of non-compliance with court deadlines.  If Ms Gaber did have that knowledge it was not, in my view, confidential, nor could it constitute the foundation for an allegation of breach of duty of loyalty in the present circumstances.  After all, there is a default judgment in this proceeding.  There was a default judgment entered by Shield Mercantile.  [Mr Kyriackou] himself deposes that he does not have “much funds with which to defend a case”.  There are bankruptcy proceedings on foot. 

In my opinion [Mr Kyriackou] has not established that Ms Gaber (or Gadens) threaten to act in breach of a duty of trust and confidence owed to [Mr Kyriackou].

1. His Honour then turned to the third ground upon which he said that a solicitor may be restrained from acting on behalf of a former client based on ‘the overriding jurisdiction of the court to intervene so as to protect the due administration of justice’.[4]  His Honour referred to various aspects of the conduct of Rothwells, Gaber and Gadens that had been relied on as being so offensive as to justify the intervention of the Court in the exercise of its inherent jurisdiction to supervise its officers.  His Honour said that he was entitled to have regard to all relevant conduct to determine whether ‘a fair-minded, reasonably informed member of the public would conclude’ that Gadens should be prevented from continuing to act for the Bank.  His Honour dealt with each of Mr Kyriackou’s complaints in turn and found that they were all lacking in substance. His Honour further noted that Gaber’s involvement in the main proceeding had ceased and said that, given the short duration of her employment at Rothwells, her limited involvement in the main proceeding while at Gadens and her junior status in that firm, he was satisfied that she could be (and he was told had been), isolated from any involvement in the main proceeding. 

   [4]Citing Grimwade v Meagher [1995] 1 VR 446, 452; Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501, [40], [58].

1. His Honour concluded that a fair-minded, reasonably informed member of the public would not consider the continuing involvement of Gadens as solicitors acting on behalf of the Bank to be offensive to common  notions of fairness and justice or that the administration of justice required the firm to be prevented from acting or that by continuing to act it would bring the legal profession into disrepute.  Accordingly, Mr Kyriackou’s summons was dismissed.

Grounds of appeal

1. The appellant’s notice of appeal (omitting the grounds that have been abandoned by the appellant) raised the following grounds of appeal:

1.The Trial Judge erred in holding that the Appellant did not permit the Respondent to view the files of the Appellant that were subpoenaed from [Rothwells] and drawing an adverse inference from the conduct of the Appellant in relying upon certain portions of the said files.

2.The Trial Judge erred in drawing an adverse inference from the failure of the Appellant to waive legal professional privilege in respect of the conversations and instructions that the Appellant had with [Gaber] of [Rothwells] and/or the files of [Rothwells] in these proceedings.

3.The Trial Judge erred in law in failing to find that the conversations and instructions that the Appellant had with [Gaber] of [Rothwells] pertaining to this proceeding did not give rise to an inference that she was provided with confidential information in these proceedings.

4.The Trial Judge made a finding against the weight of the evidence in holding that the Appellant had not provided instructions and had conversations with [Gaber], in these proceedings whilst she was employed by [Rothwells].

5.The Trial Judge failed to take into consideration in deciding whether the Appellant had provided instructions and had conversations with [Gaber], whilst she was employed by [Rothwells] that she refused to deny on oath these matters.

6.The Trial Judge erred in drawing an inference that [Gaber] had not been provided instructions and had conversations with the Appellant in these proceedings whilst she was employed by [Rothwells].

12.The Trial Judge erred in failing to regard the involvement of [Gaber] with the Appellant in this proceeding, whilst she was employed by [Rothwells], as invoking a duty of loyalty that would make it unconscionable for her to continue to act on behalf of the Respondent.

14.The Trial Judge erred in holding that a fair minded reasonably informed member of the public would not find the conduct of Gadens to be so offensive that the Respondent should be restrained from retaining them.

Submissions generally

1. Before specific consideration of each of the grounds relied upon by the appellant, it is appropriate to draw attention to certain general submissions of the parties which to some extent impinged upon all of the issues raised on appeal.

1. The appellant submitted that, as Gaber had taken over the conduct of the main proceeding while at Gadens and had had the carriage of the matter for several months, her knowledge should be attributed to Gadens and, accordingly, the confidential information that she brought with her should be attributed to Gadens.  The appellant submitted that, on the undisputed facts, Gaber had such confidential information, contrary to the findings below.  When pressed to identify that confidential information, however, the appellant was unable to be more specific than to refer to ‘knowledge of a variety of matters’ and to refer to the ‘getting to know you’ matters such as were referred to in Yunghanns v Elfic Pty Ltd.  The appellant submitted that the inference should have been drawn that confidential information had been received from the appellant by Gaber and that it was likely to have been communicated to Gadens.

1. On the other hand, the respondent submitted that this was a ‘facts case’ where the judge had found that Gaber’s involvement at Rothwells with any matter in which the appellant was the client was both very limited and, in the case of the other matters, remote from the issues in the main proceeding.

1. The respondent said that it was never put to Gaber in cross-examination that she had done any work on the file relating to the main proceeding and that Ms Rothwell gave unequivocal evidence that Gaber had not done any such work.  That evidence was supported by the time ledger sheets produced by Rothwells and tendered in evidence.

1. The respondent said that, in relation to the case of damage being caused by the appellant in a car park, in which the only issue was one of quantum, Gaber had drawn the defence but had not herself taken instructions from the appellant.  In any event, the matter was remote from the issues in the main proceeding.

1. In relation to the matters involving the Official Receiver and also the Bank of Cyprus, Gaber’s involvement was again very limited and remote from the issues in the main proceeding, the respondent submitted.

1. The respondent said that, in relation to the Shield Mercantile matter, which was the case of a judgment against the appellant for some $23,000 that had subsequently led to his bankruptcy, Gaber’s involvement was essentially limited to the obtaining of a consent adjournment on one court appearance in the course of which she had spoken to the solicitor on the other side.

1. The respondent said that, in relation to a matter involving a company ‘M K River’, Gaber’s involvement was limited to taking instructions from the appellant for an affidavit by Edwards, who was a director of M K River.  It was suggested below that the appellant was the beneficiary of a trust of which M K River was the trustee but there was no further evidence of this and Gaber’s uncontradicted evidence was that she had no knowledge of the appellant’s personal connection (if any) with M K River.

1. The respondent submitted that the evidence of Gaber’s overall involvement with personal matters of the appellant did not give rise to an inference that she had received any confidential information from the appellant even of a ‘getting to know you’ nature as referred to by Gillard J in Yunghanns v Elfic Pty Ltd. 

1. The appellant’s submissions, both written and oral, did not substantially traverse the above detailed analysis of the evidence made by the respondent.  We are of the view that the respondent’s analysis is supported by the evidence and, at any rate, it was well open to the judge to conclude on the basis of that evidence, as he did, that Gaber’s involvement with the appellant was slight indeed and in matters remote from those arising in the main proceeding.

Grounds 1 and 2

1. The appellant submitted in his written outline that parts of the files of Rothwells that related to work performed for the appellant were the subject of legal professional privilege and that it was not a reasonable inference to be drawn that the appellant’s failure to waive this privilege and produce documents, or further documents, in support of his application was because no such documents existed.  We would understand from the oral submissions that this submission was intended to embrace confidential information in or constituted by these documents, whether strictly privileged or not.

1. We do not accept this submission.  An examination of the transcript shows that his Honour did not draw the suggested inference from any failure to waive privilege.  It was reasonably open to his Honour to draw this inference (as he did) upon the whole of the evidence and having regard to the stance taken by the appellant in his own affidavits and the course taken on his behalf in cross-examination of Gaber and Ms Rothwell.[5]  These grounds are not made out.

   [5]See [9], [15], [24]-[26] above.

Grounds 3, 4, 5 and 6

1. In support of these grounds, the appellant submitted that his evidence on affidavit and under cross-examination that he provided instructions to Gaber in relation to the main proceeding, in particular in relation to his defence and counterclaim, were ‘not categorically contradicted’ by the respondent’s witnesses.  The appellant made reference to the use of phrases by Gaber and Ms Rothwell such as ‘best of her recollection’ and ‘did not recall’ and ‘to the best of [her] knowledge’. 

1. The appellant submitted that where uncontradicted evidence was given that was not inherently implausible or unreliable, that evidence should be accepted.

1. We disagree with the appellant’s characterisation of his evidence as ‘uncontradicted’ or ‘not categorically contradicted’.  On the contrary, his evidence as to Gaber’s involvement was clearly contradicted both by Gaber and, to the extent of her knowledge, by Ms Rothwell.  Upon the whole of the evidence, including the records of Rothwells in evidence, it was open to the judge to prefer the evidence of Gaber and Ms Rothwell to that of the appellant.  The judge had the advantage of seeing and hearing the witnesses but, even without that advantage, we consider, upon a reading of the transcript of the evidence, that his Honour had good grounds for finding as he did.  At any rate, we are unable to accept the submission that he was constrained to accept the appellant’s evidence.

1. These grounds also fail.

Ground 12

1. The appellant submitted that there was a breach by Gaber of her duty or obligation of loyalty to the appellant by acting for the respondent after she had gone to Gadens, as she did, and that that should have resulted in Gadens being restrained from acting further for the respondent.  The appellant accepted that there was here a balancing exercise involved and that, as Gaber had been ‘quarantined’ from the main proceeding after having the conduct of it for a relatively short period, much turned on the degree of her involvement in the appellant’s matters whilst she was at Rothwells.

1. This submission has to be considered in the light of the judge’s findings, which, as we have said, he was entitled to make, that Gaber’s involvement with the appellant while she was at Rothwells was very limited and remote from the issues arising in the main proceeding.  Assuming, only for the sake of the argument, that (despite these findings) Gaber’s duty or obligation of loyalty should have prevented her from having the conduct of the main proceeding on behalf of the respondent, we think that the judge was right in his ultimate conclusion that Gadens should not be prevented from continuing to act on behalf of the respondent in such proceeding in circumstances where Gaber had been quarantined therefrom after a relatively short period and at a time during which judgment in default had been entered and remained in force.

Ground 14

1. In support of this ground the appellant submitted that justice must manifestly and undoubtedly be seen to be done[6] and that, in order for justice to be seen to be done, legal practitioners generally could not ‘change sides’ unless it could be demonstrated that there was not a real risk of misuse of confidential information.[7] 

   [6]Citing Grimwade v Meagher [1995] 1 VR 446, 450.

   [7]Citing Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86, 99.

1. In our view, this submission fails for two reasons.  As the judge found that Gaber had no confidential information of any significance or relevance (as he was entitled to find), there was no risk of any misuse thereof; but even if it is unnecessary that there be a risk of misuse of confidential information in order to invoke this principle, we are of the view that the judge was justified in his conclusion, in the circumstances as found by him, that a fair-minded, reasonably informed member of the public would not consider the continuing involvement of Gadens as solicitors for the Bank to be offensive to common notions of fairness and justice or that the administration of justice required them to be restrained from so acting.

Conclusion

1. For the foregoing reasons, the appeal should be dismissed with costs (including reserved costs).

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