FEDERAL COURT OF AUSTRALIA
Li v Wu [2012] FCA 164
Citation: Li v Wu [2012] FCA 164 Parties: YU XIN LI v TAO WU File number(s): ACD 54 of 2011 Judge: JAGOT J Date of judgment: 2 March 2012 Catchwords: PRACTICE AND PROCEDURE – application by respondent to restrain applicant’s solicitor from acting as the applicant’s legal representative – where respondent was former client of solicitor – whether confidential information relating to respondent communicated to solicitor – whether restraint necessary to ensure the administration of justice – application dismissed Cases cited: Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307; [1993] FCA 218
Geelong School Supplies Pty Ltd v Dean (2006) 237 ALR 612; [2006] FCA 1404
Ismail-Zai v State of Western Australia (2007) 34 WAR 379; [2007] WASCA 150
Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181
Yunghanns v Elfic Ltd (formerly known as Elders Finance & Investment Co Ltd) (unreported, Supreme Court of Victoria, Gillard J, 3 July 1998)Date of hearing: 22 February 2012 Place: Sydney via video link to Canberra Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 25 Counsel for the Applicant: Mr I Neil SC and Mr B Katekar Solicitor for the Applicant: Goodman Law Counsel for the Respondent: Mr S Hausfield Solicitor for the Respondent: Johannessen Legal & Migration
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 54 of 2011
BETWEEN: YU XIN LI
Applicant
AND: TAO WU
Respondent
JUDGE:
JAGOT J
DATE OF ORDER:
2 MARCH 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Paragraph 1 of the interlocutory application filed on 23 November 2011 be dismissed.
2.The respondent (Tao Wu) pay the applicant’s (Yu Xin Li) costs of and in connection with paragraph 1 of the interlocutory application, as agreed or taxed.
3.The balance of the interlocutory application and the proceeding be adjourned for directions on 13 March 2012.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 54 of 2011
BETWEEN: YU XIN LI
Applicant
AND: TAO WU
Respondent
JUDGE:
JAGOT J
DATE:
2 MARCH 2012
PLACE:
SYDNEY VIA VIDEO LINK TO CANBERRA
REASONS FOR JUDGMENT
THE INTERLOCUTORY APPLICATION
By an interlocutory application filed on 23 November 2011 the respondent, Tao (also known as Tom) Wu, seeks to restrain a solicitor, Steven Gavagna, and any solicitor from his firm Goodman Law, from acting as legal representative for the applicant (Yu Xin Li).
The interlocutory application also sought orders for security for costs. Mr Li has agreed to pay security for costs. The parties requested that paragraphs 2, 3 and 4 of the interlocutory application be adjourned to a convenient date, in anticipation of the filing of proposed consent orders to be made in chambers. Orders will be made to that effect.
RELEVANT PRINCIPLES
The principles applicable to the application to restrain a solicitor from…
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- AGLC
- Li v Wu [2012] FCA 164
- Case
- [2012] FCA 164
- Decision Date
CaseChat Overview and Summary
The primary legal issues that the court had to decide were whether there was a real possibility that confidential information had been disclosed to Mr Gavagna or his firm, and if so, whether this necessitated the restraint of Mr Gavagna and his firm to ensure the proper administration of justice. The court also considered whether there was a delay in bringing the application that would prejudice Mr Li.
The court found that there was no evidence to suggest that any confidential information had been communicated to Mr Gavagna or his firm. The court held that even if such information had been shared, a reasonable observer would not conclude that there was a real possibility of it being used to the detriment of Mr Wu. The court also dismissed the argument that the restraint was necessary to protect the administration of justice, finding that the power of attorney, which had been withdrawn, was insufficient to establish this ground. The court concluded that neither ground was made out and dismissed the application. The court further found that any delay in bringing the application did not prejudice Mr Li.
The orders of the court were that the application for an injunction be dismissed, with the respondent to pay the applicant's costs. The balance of the interlocutory application and the proceeding were adjourned for directions.
Orders
Orders of the court
1. Paragraph 1 of the interlocutory application filed on 23 November 2011 be dismissed.
2. The respondent (Tao Wu) pay the applicant’s (Yu Xin Li) costs of and in connection with paragraph 1 of the interlocutory application, as agreed or taxed.
3. The balance of the interlocutory application and the proceeding be adjourned for directions on 13 March 2012.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
In conclusion, a reasonable observer, aware of the relevant facts, would not think that there was a real, as opposed to a theoretical possibility that confidential information given to Mr Gavagna or his firm by Mr Wu might be used by Mr Gavagna or his firm to advance the interests of Mr Li to the detriment of Mr Wu. Mere assertion, such as set out in correspondence from Mr Wu’s solicitor to Mr Gavagna and otherwise, does not make it so. Administration of justice ground This aspect of the case is also weak. Insofar as the case relied on the power of attorney, the facts are, first, it no longer exists and, second, it was never exercised. These facts are sufficient to found the conclusion that the power of attorney is not a sufficient foundation for the making of the order sought. If it is necessary to go further, I note that I accept the submissions for Mr Li that the mere fact that Mr Gavagna held a power of attorney for Mr Wu did not mean he was subject to fiduciary obligations to Mr Wu in all circumstances. If and when any circumstance arose calling for consideration of exercise of the power of attorney, then Mr Gavagna would have been subject to fiduciary obligations. There is no evidence of any such circumstance arising before the withdrawal of the power of attorney. Otherwise, the basis for the claim that the protection of the administration of justice requires that Mr Gavagna and his firm be restrained from acting for Mr Li against Mr Wu remains unclear. Insofar as it relied on the alleged confidential information, it must be rejected. Otherwise, it amounted to the now withdrawn power of attorney and the fact that Mr Gavagna and his firm had previously carried out legal work for Mr Wu and associated companies. I am unable to see how anything in all of the circumstances would cause a fair-minded, reasonably informed member of the public to conclude that the proper administration of justice requires that Mr Gavagna and his firm should be prevented from acting for Mr Li, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. Given these conclusions it is not necessary to consider the issue of delay and prejudice to Mr Li. If necessary to say so, I do not consider the delay can be measured from March 2011 (when Mr Wu’s solicitors put Mr Gavagna on notice of the alleged issues of concern, albeit without identifying any confidential information despite being asked to do so). It seems to me the relevant delay is between 30 September 2011 and 23 November 2011, which is not particularly lengthy. If I had found for Mr Wu on either ground, the discretionary considerations would not have persuaded me to decline relief. However, as I have found against Mr Wu on both bases, it follows that the interlocutory application, insofar as it sought an injunction, should be dismissed with costs.