Lin v Zhou

[2023] NSWSC 886

Supreme Court

New South Wales

Medium Neutral Citation:

Lin v Zhou [2023] NSWSC 886

Hearing dates:

20 July 2023

Date of orders:

31 July 2023

Decision date:

31 July 2023

Jurisdiction:

Equity

Before:

Henry J

Decision:

(1)   Dismiss the Amended Summons filed on 20 July 2023.

(2)   Unless a party makes an application for a different costs order within 14 days, the plaintiffs are to pay the defendants’ costs of the proceedings on the ordinary basis as agreed or assessed.

Catchwords:

OCCUPATIONS — legal practitioners — solicitors — whether solicitors should be restrained from acting for plaintiffs’ former clients in proceedings in the District Court of New South Wales concerning the provision of migration and visa services — where solicitors had acted for and had dealings with first plaintiff — where no existing retainer between solicitors and plaintiffs — where first plaintiff advised that solicitors could not act for him and he should seek separate legal representation — whether plaintiffs disclosed confidential information to solicitors — where no solicitor-client relationship or expectation of confidentiality existed at relevant times — where information not confidential — solicitors not restrained

Legislation Cited:

Evidence Act 1995 (NSW)

Cases Cited:

Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244

Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181

Macquarie Bank Ltd v Myer [1994] 1 VR 350

Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475

Porter v Dyer (2022) 402 ALR 659; [2022] FCAFC 116

Ward v Westpac Banking Corp Ltd [2022] NSWSC 66

Category:

Principal judgment

Parties:

Shao Hua Lin (First Plaintiff)
Auslink Professional Group Pty Ltd (Second Plaintiff)
Ying Zhang (Third Plaintiff)
Ren Zhou (First Defendant)
Ren Zhou Group Pty Ltd trading as Ren Zhou Lawyers (Second Defendant)
Xin Sun (Third Defendant)

Representation:

Counsel:
A Hopkins (Defendants)

Solicitors:
Westlink Legal Pty Ltd (Plaintiffs)
Ren Zhou Lawyers (Defendants)

File Number(s):

2023/00196730

Publication restriction:

Nil

JUDGMENT

1. By Summons filed on 20 June 2023 as amended on 20 July 2023, the plaintiffs, Shao Hua Lin, Auslink Professional Group Pty Ltd (Auslink) and Ying Zhang, seek an order that the defendants, Ren Zhou, Ren Zhou Group Pty Ltd trading as Ren Zhou Lawyers (Ren Zhou Lawyers) and Xin Sun, be restrained from acting for the plaintiffs in proceedings in the District Court of New South Wales, 2022/00304069 (District Court Proceedings).

2. The plaintiffs in these proceedings are the defendants in the District Court Proceedings. Xinyi Xia and Xiao Liu are the plaintiffs in the District Court Proceedings.

3. The first defendant, Mr Zhou, is the principal solicitor of the second defendant, Ren Zhou Lawyers, an incorporated legal practice, and is the solicitor on the record for the plaintiffs in the District Court Proceedings. The third defendant, Mr Sun, is a solicitor and migration agent employed by Ren Zhou Lawyers. He acted for Ms Xia and Mr Liu in circumstances described below.

4. For convenience, in these reasons, I refer to: Mr Lin, Auslink and Ms Zhang together as the Applicants; Mr Zhou, Ren Zhou Lawyers and Mr Sun together as the Lawyers; and Ms Xia and Mr Liu together as the DC Plaintiffs.

5. The Lawyers oppose the restraining order sought in the Amended Summons. The Amended Summons also seeks a suppression order in relation to the affidavits filed on behalf of the Applicants (including exhibits and annexures) which was not pressed by the Applicants at the hearing.

6. The DC Plaintiffs are not parties to these proceedings and did not appear at the hearing of the Applicants’ Summons. When asked about their position, the Court was informed by Counsel for the Lawyers that the DC Plaintiffs were aware of the application and supported the Lawyers’ opposition to the relief sought. Thus, the hearing proceeded on the basis that the DC Plaintiffs did not wish to be heard or joined to the application.

7. In support of the restraining order, the Applicants relied on an affidavit affirmed by Mr Lin. The Lawyers relied on an affidavit affirmed by Mr Zhou.

8. Mr Lin and Mr Zhou were both cross-examined. As will appear, there is some conflict as to their evidence about what was said when they met on 19 and 23 May 2022. For reasons which I will come to, I prefer the evidence of Mr Zhou to that given by Mr Lin.

Summary of evidence and findings of fact

Parties and relationships

9. Mr Lin is married to Ms Zhang and is the sole director of Auslink. According to Mr Lin, Auslink is a business that assists people to migrate to Australia and provides services in all aspects of a visa application, including assistance with finding investments or sponsorships in Australia.

10. Mr Lin deposes that the DC Plaintiffs became clients of Auslink in 2015 pursuant to a service agreement relating to the provision of assistance for their immigration application. In accordance with that agreement, the DC Plaintiffs transferred a total of $210,000 to Auslink by way of a number of instalment payments. Mr Lin says that their migration application did not progress for reasons which form part of the dispute in the District Court Proceedings.

11. Mr Lin has known Mr Zhou for about 20 years. They met through Mr Lin’s sister who worked at Ren Zhou Lawyers from early 2002 to late 2004 and who has remained friends with Mr Zhou. Mr Zhou attended Mr Lin’s wedding in Shanghai in December 2004. There is a dispute as to the circumstances in which Mr Zhou was invited and his status at the wedding which is unnecessary to resolve on this application.

12. It is not in dispute that Ren Zhou Lawyers had acted for Mr Lin in the past. It is also agreed that Mr Lin has had other dealings with Mr Zhou at Ren Zhou Lawyers. In summary, the evidence establishes the following:

1. in 2002, Ren Zhou Lawyers acted for Mr Lin in his review before the Migration Review Tribunal. Mr Mack Chen, a migration agent employed by Ren Zhou Lawyers, worked on Mr Lin’s matter; Mr Zhou was not personally involved in it;

2. Ren Zhou Lawyers had acted for Mr Lin on two other matters, being a conveyancing matter and a commercial dispute. Ms Zhang (the solicitor acting for the Applicants in these proceedings) acted for Mr Lin on those matters while she was an employed solicitor at Ren Zhou Lawyers; Mr Zhou did not undertake any legal work in relation to those matters. It is not clear when those matters were conducted but it seems that Ren Zhou Lawyers was no longer acting for Mr Lin in relation to those matters by April 2022, when Ms Zhang left Ren Zhou Lawyers to establish her own firm;

3. on occasion, Mr Lin called Mr Zhou, referred legal matters to Ren Zhou Lawyers and spoke to Mr Zhou about getting legal advice. As described by Mr Lin in cross-examination, these discussions did not relate to Mr Lin or his company affairs, rather, in respect of Mr Lin’s friends, Mr Zhou may have given some advice (at no cost to Mr Lin) or referred Mr Lin to another solicitor in the practice;

4. Mr Zhou has not provided Mr Lin with any advice in relation to immigration or migration matters involving the Applicants or Auslink’s clients;

5. prior to May 2022, Mr Lin had not told Mr Zhou that the Auslink business was concerned with immigration; and

6. Ren Zhou Lawyers had not acted for Auslink or Ms Zhang in any capacity.

13. The issues on this application arise out of dealings between Mr Lin, Mr Zhou and Mr Sun in May 2022.

Letter of 3 May 2022

14. On 3 May 2022, Mr Lin received a letter from Mr Sun which was on Ren Zhou Lawyers’ letterhead. The letter is not in evidence but it is agreed that it identified that Mr Sun was going to act for the DC Plaintiffs in their immigration application and it requested Mr Lin to transfer his file to Ren Zhou Lawyers.

15. In cross-examination, Mr Lin accepted that he became aware that Ren Zhou Lawyers was acting for his “former clients” (namely, the DC Plaintiffs) when he received the 3 May letter and that the letter made demands of him, including for the return of the DC Plaintiffs' file to Ren Zhou Lawyers.

16. On 18 May 2022, Mr Lin called Mr Zhou and asked to meet with him as Mr Lin had received the letter from Ren Zhou Lawyers. Mr Zhou agreed to meet Mr Lin the following day.

17. Mr Zhou gives evidence, which I accept, that he was unaware that the 3 May letter had been sent by Mr Sun to Mr Lin and he did not know what the letter sought from Mr Lin prior to his discussions with Mr Lin on 18 and 19 May.

Meeting of 19 May 2022

18. Mr Lin and Mr Zhou met on 19 May 2022 at the offices of Ren Zhou Lawyers. Mr Zhou deposes to a conversation at that meeting in words to the following effect:

Lin:   I received a letter from [Ren Zhou Lawyers]. It was signed by a lawyer named Xin Sun. Do you know this person?

Zhou:    Yes, he has been working with [Ren Zhou Lawyers] on a causal [sic] basis since March.

Lin:    Well, this letter asked me to transfer the clients’ documents to [Ren Zhou Lawyers].

Zhou:    You can just hand the documents over to Mr Sun.

Lin:    I had not submitted anything to the immigration authority yet. If he requests money to be refunded then what should I do?

Zhou:    I could not give you any advice. You see [Ren Zhou Lawyers] has now been retained by Mr Sun’s clients. We cannot act for you.

Lin:    Can you do something?

Zhou:    As I have just said, nothing I can do for you. I suggest you seek legal advice elsewhere. But from my personal opinion, I think if there are disputes, it would be better for both parties to settle it instead of litigating it. You know I had good relationship with your sister. If this matter goes to the court, I will feel embarrassed next time I see your sister. I wish this would not happen.

Lin:    But my client also hired someone to take the IELTS test.

Zhou:    I don't know the details of this matter and you should find a lawyer or raise this with Mr Sun directly if you want to represent yourself. As I have said, if the client decides to sue, I will feel embarrassed before your sister. If you do not want to retain a lawyer to help you, you may wish to speak to Mr Sun yourself. I think Mr Sun will attend the office next Monday.

Lin:    Ok I will come to your office then.

19. In cross-examination, Mr Zhou gave evidence as to what was discussed at the 19 May meeting which was consistent with his affidavit evidence. He said that he read the 3 May letter to Mr Lin and said to Mr Lin that he could transfer the documents to Mr Sun to which Mr Lin replied that he could not transfer them. Mr Lin then tried to seek legal advice from Mr Zhou and Mr Zhou said he could not help him. Mr Zhou also gave evidence in cross-examination that Mr Lin did not express any concern that the DC Plaintiffs would sue him but he did mention the false International English Language Testing System (IELTS) test and that, once Mr Lin said that he could not transfer the file to Ren Zhou Lawyers, there was a prospect of a dispute and Mr Zhou said that he could do nothing for Mr Lin.

20. Mr Zhou’s evidence was not directly challenged by Mr Lin; Mr Lin did not set out what was discussed during the 19 May meeting in his affidavit. Nor did Mr Lin give oral evidence in chief about that matter although he denied propositions put to him in cross-examination that were consistent with Mr Zhou’s evidence, for example, he said “no” when it was put to him that Mr Zhou told him that he could not give him any advice and recommended that he contact another lawyer.

21. In my view, Mr Zhou’s evidence about what was discussed at the 19 May meeting was inherently plausible and, in the absence of any evidence in chief given by Mr Lin, I am not persuaded that there is any good reason to reject Mr Zhou’s evidence.

22. More generally, I did not find Mr Lin to be a wholly reliable or satisfactory witness. During cross-examination, Mr Lin cavilled with propositions that were put to him on the basis of his own evidence. In cross-examination, Mr Lin gave evidence that he was only concerned that he may be sued after meeting with Mr Zhou on 19 May (T31.14–5) whereas his affidavit evidence indicates that he held that concern when he received the 3 May letter (at [22]). He also came across as evasive and as trying to give evidence to suit his case, such as when he said that he did not want to transfer the file because “there were no documents” (T32.31) despite his own evidence in chief referring to “sensitive issues” and the “IELTS test”. The reliability of Mr Lin’s evidence was also undermined by his evidence relating to the IELTS test (in relation to which he was given a certificate under s 128 of the Evidence Act 1995 (NSW)) which indicated, in my view, that he was prepared to be dishonest in return for commercial gain. His claim that he thought that Mr Zhou was acting for him was also undermined by his evidence in cross-examination that he was aware that Ren Zhou Lawyers was acting for the DC Plaintiffs when he received the 3 May letter and that Mr Zhou and Mr Sun were acting for them at the 23 May meeting.

23. In contrast, Mr Zhou’s evidence in cross-examination was generally consistent with his affidavit evidence as to what was discussed at the 19 and 23 May meetings. I found his evidence to be inherently plausible having regard to the objective events and note that no submission was advanced by the Applicants’ solicitor that sought to attack his credibility.

24. For these reasons, where there is a conflict, I have preferred Mr Zhou’s evidence to that of Mr Lin.

25. Accordingly, I accept Mr Zhou’s evidence and find that a conversation occurred along the lines of what he deposed to as set out at [18] above. In particular, I accept Mr Zhou’s evidence that he told Mr Lin that he could not give him any advice, that Ren Zhou Lawyers was acting for the DC Plaintiffs, that they could not act for Mr Lin and that Mr Lin should get another lawyer.

26. After the meeting, Mr Zhou called Mr Sun and told him that Mr Lin had approached Mr Zhou personally, Mr Lin would be coming into the office next Monday to talk to Mr Sun and he may raise some issues regarding the clients’ file.

Meeting of 23 May 2022

27. On 23 May 2022, Mr Lin attended Ren Zhou Lawyers’ offices and met with Mr Sun and Mr Zhou. What was said at that meeting is partially in dispute.

28. Mr Lin gives evidence that at the start of the meeting there was a conversation to the following effect:

Zhou:   Do you have something to say, you can say it in front of us.

Lin:   I cannot transfer the documents of our clients to you because sensitive issues. The client instructed me to hire somebody to do the IELTS test for him. I incurred some administrative costs as well. The clients were aware of that. Now I can provide the refund at the amount of $50,000.00.

Zhou:   Mr Liu is liable for his own fraud. But the amount you (Me) provided is too small. Can you return $100,000.00?

29. Mr Lin then says that there was a discussion between he and Mr Zhou during which Mr Lin said $100,000 was too much, Mr Zhou referred to the amount of $85,000, Mr Lin said that amount was “good” and that he could pay some in June and in instalments closer to the end of the year.

30. Mr Lin then deposes to a conversation to the following effect:

Zhou:    You will need to prepare a Deed of Settlement and Release.

Zhou:    I cannot represent you and the plaintiffs at the same time for the Deed. I recommend you find another lawyer to prepare the Deed of Settlement and Release. You can get legal advice from Solicitor Ying Zhang.

Lin:    I will talk to the Solicitor Ying Zhang and ask her to contact with Sun in relation to the time frames for repayment.

Sun:    No problem. I will negotiate with the clients to see whether they accept the settlement amount.

Sun:    Are you sure you have not submitted documents to the Department of Home Affairs?

Lin:    I am sure. Because both language tests and sponsorship had problems.

31. In cross-examination, Mr Lin accepted that at the 23 May meeting he knew that Mr Sun and Mr Zhou were acting for his former clients. He also accepted that he had a discussion with Mr Zhou and Mr Sun about potentially resolving or settling the dispute between his former clients and Auslink, that Mr Zhou had suggested he go and get a lawyer and referred him to Ms Zhang, and that he understood that there would be no deal unless Mr Sun’s clients agreed to what had been discussed when he left the meeting.

32. Mr Zhou’s affidavit evidence of what was discussed at the start of the meeting is as follows:

Lin:    I know you are now representing my client Xiao Liu. I cannot transfer the Liu's files to you. Actually the application was not submitted to the Immigration authority. I can offer a refund in the sum of $50,000.

Zhou:    This is not a reasonable amount. If nothing has been done, I believe Mr Liu could pursue a refund of the full amount paid to you.

Lin:    But we also incurred some administrative costs, such as costs for arranging IELTS test.

Sun:    I do not have such instructions. There is no information suggesting my client has done so.

Zhou:    There will be no avail to argue these issues here. If you do not agree to return the full amount, how about refunding $100,000?

Lin:   That is still too much for me. My funds are quite tight now. If you can accept, I could offer a refund of $85,000.

33. Mr Zhou deposes that there were further discussions about a figure for a refund, with Mr Lin proffering $85,000 with an upfront payment of $45,000. The conversation continued as follows:

Zhou:    Mr Sun what do you think?

Sun:    I have to seek my clients’ instructions.

Zhou:    Ok, now Lin if you have any issue with this agreement, you could contact me or Mr Sun. Do you have a lawyer represent you now?

Lin:    Can I instruct Ms Zhang then?

Zhou:    Ms Zhang has already left RZL. You can get legal advice from her.

Lin:    Ok.

Zhou:    Your solicitor will also need to prepare a Deed of Settlement and Release.

Lin:    Ok. I have no problem with this settlement amount. I will talk with Ms Zhang for advice.

Sun:    Ok then, I will seek instructions from client and let you know if my client has any issue with it.

Lin:    Ok.

Sun:    Just to confirm, you have not lodged any application for my clients, correct?

Lin:    Yes.

34. In cross-examination, Mr Zhou gave evidence that Mr Lin said that he knew that they were now representing Mr Liu, that he could not transfer Mr Liu’s file to them and that the application had not been submitted to the immigration authority. Mr Zhou accepted that he did not tell Mr Lin to come to Ren Zhou Lawyers’ offices with his own solicitor or that he might be prejudiced because Mr Zhou was acting for Mr Liu. Mr Zhou said that he attended the 23 May meeting with Mr Sun and Mr Lin on the basis that Mr Lin was acting for himself, and he maintained that it was made clear to Mr Lin that Mr Liu was Mr Sun and Ren Zhou Lawyers’ client.

35. For the reasons outlined above, where there is a conflict as to what was discussed at the 23 May meeting, I prefer Mr Zhou’s evidence to that of Mr Lin. In particular, I accept Mr Zhou’s evidence that Mr Lin stated at the outset of that meeting that he was aware that Ren Zhou Lawyers could not act for him.

36. Mr Lin deposes that, on 29 September 2022, he made a partial payment of $40,000 pursuant to a settlement agreement between himself, Auslink and the DC Plaintiffs.

37. On 12 October 2022, the DC Plaintiffs commenced the District Court Proceedings by Statement of Claim filed that day.

38. In broad terms, the DC Plaintiffs sue the Applicants for misleading and deceptive conduct, deceit, unconscionable conduct and breach of contract, and seek to recover the sum of $213,040 which they say was paid to the Applicants in 2015 in relation to the provision of migration and visa services. The DC Plaintiffs claim that the money was paid in reliance on false representations that the Applicants were qualified and licensed migration agents who would provide migration and visa services, which they say were not provided. In addition, there is a claim for breach of contract arising out of an alleged settlement agreement reached by Mr Liu and Auslink on 23 May 2022.

34. The issue of restraining the Lawyers from acting for the DC Plaintiffs was first raised in the District Court Proceedings by way of a Notice of Motion filed by the Applicants on 19 December 2022, which was before that Court on 27 April 2023. It appears that the Applicants’ Notice of Motion was adjourned and the Applicants filed their Summons in this Court following comments made by the District Court regarding jurisdiction. The District Court Proceedings are listed for directions on 1 August 2023.

Legal principles

40. There was broad agreement as to the legal principles applicable to the question of whether this Court should restrain a solicitor from acting for a client in a particular case.

41. The parties referred to Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 (Kallinicos v Hunt), where Brereton J (as his Honour then was) set out the relevant principles as follows, at [76] (omitting full case citations):

“The foregoing authorities establish the following:

•   During the subsistence of a retainer, where the court’s intervention to restrain a solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court’s jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting for clients with competing interests [Prince Jefri].

•   Once the retainer is at an end, however, the court’s jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) [Prince Jefri].

•   After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court’s intervention, such duty having come to an end with the retainer [Prince Jefri; Belan v Casey; Photocure; British American Tobacco; Asia Pacific Telecommunications; contra Spincode; McVeigh; Sent].

•   However, 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].”

42. These principles have been applied and cited with approval in various cases: see, for example, Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 at [39]; Ward v Westpac Banking Corp Ltd [2022] NSWSC 66 at [14]; and Porter v Dyer (2022) 402 ALR 659; [2022] FCAFC 116 at [113] (Porter v Dyer).

Consideration

43. The Applicants submit that the Court should make an order restraining the Lawyers from acting for the DC Plaintiffs in the District Court Proceedings for the following reasons.

44. First, they say that, having regard to the past solicitor-client relationship and to the friendship between Mr Lin and Mr Zhou, Mr Lin was “as good as a client” when he met with and spoke to Mr Zhou on 19 and 23 May 2022. The Applicants argue that Mr Lin went to those meetings in a manner consistent with a pre-existing relationship of confidence and that Mr Lin sought confidential advice from Mr Zhou on those occasions in his capacity as a trusted friend and a lawyer. Reference was made to the observations of Phillips J in Macquarie Bank Ltd v Myer [1994] 1 VR 350 (also cited in Porter v Dyer at [113]) that a legal practitioner may be restrained from acting in a matter not only where the practitioner has a conflict of interest vis-à-vis a former client but also vis-à-vis a person who is “as good as a client”.

45. Related to this, the Applicants submit that the Court should prefer Mr Lin’s evidence as to what was discussed at the 23 May meeting and should not accept Mr Zhou’s evidence that, on 19 May, he told Mr Lin that he could not act for him. For the reasons set out at [20]–[25] and [35], I do not accept that submission.

46. Second, they say that Mr Zhou did not make it clear that Ren Zhou Lawyers was acting for the DC Plaintiffs and his conduct, in referring to the potential for litigation on 19 May and inviting Mr Lin to a meeting on 23 May, was not consistent with what a reasonable lawyer would do in those circumstances. As was put in oral submissions, Mr Zhou owed a duty to Mr Lin to tell him not to meet with them on 23 May without a solicitor in attendance. They submit that a reasonable lawyer would have said to Mr Lin “don't come to our office, you need to find a lawyer, the matter [has] become complex, we cannot acting [sic] for you”.

47. Third, they say that Mr Lin disclosed confidential and adverse information to Mr Zhou and Mr Sun on 19 and 23 May 2022, with that information being that Mr Lin and Auslink had not submitted anything to the immigration authority and that Mr Lin’s clients had hired a third party to take the IELTS test. It was submitted that this confidential information belonged to Mr Lin, that Mr Zhou and Ren Zhou Lawyers were under a duty not to disclose the information given to them and that Mr Zhou and Ren Zhou Lawyers failed to observe that duty. In support of the latter proposition, the Applicants’ written submissions refer to Ms Zhang, the solicitor acting for the Applicants in the District Court Proceedings, having worked for Ren Zhou Lawyers from 2011 until April 2022 at which time she left to establish her own firm. It was also submitted that it was a “no brainer” that the alleged confidential information could be used in cross-examination against Mr Lin and that a reasonable person informed of the relevant facts might reasonably anticipate a danger of misuse of the confidential information of Mr Lin, a former client.

48. The principles referred to above establish that there are various categories of cases in which this Court may restrain a solicitor from acting.

49. One such category is where a solicitor’s retainer subsists. That is not the position in this case. At the hearing, the Applicants accepted, correctly in my view, that there was no existing retainer between Ren Zhou Lawyers and Mr Lin or Auslink in May 2022.

50. Another category is where a solicitor’s retainer is at an end but the solicitor is restrained to protect the confidences of a former client obtained during the course of that retainer. Again, that does not apply in this case. There is no evidence that Mr Zhou or Ren Zhou Lawyers obtained any confidential information in relation to Mr Lin or Auslink arising out of the previous matters in which Ren Zhou Lawyers was involved.

51. The key question in this case is whether, in the circumstances set out above, a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires the Lawyers to be restrained from acting for the DC Plaintiffs, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. In my view, the answer to that question is no. This is primarily because I do not accept the Applicants’ submission that Mr Lin was “as good as a client” when he met with Mr Zhou on 19 and 23 May 2022 or that Mr Lin imparted information to Mr Zhou on 19 May, or to Mr Sun on 23 May, in circumstances which imposed a duty of confidentiality.

52. As to the first point, the difficulty with the Applicants’ case is that, in my view, the evidence makes it clear that Mr Lin was aware, at all relevant times, that Ren Zhou Lawyers, Mr Zhou and Mr Sun, were acting for the DC Plaintiffs and not for him or the other Applicants.

53. Mr Lin was aware that Ren Zhou Lawyers was acting for the DC Plaintiffs when he received Mr Sun’s letter on 3 May 2022 that asked for the file in relation to the DC Plaintiffs’ immigration matter.

54. Thus, Mr Lin went to the 19 May meeting knowing that Ren Zhou Lawyers was acting for the DC Plaintiffs. This knowledge is reflected in the statement Mr Lin made at the outset of the 19 May meeting, when Mr Lin said he had received a letter from Ren Zhou Lawyers asking him “to transfer the clients’ documents to [Ren Zhou Lawyers]”. Mr Zhou’s response is consistent with that position; he told Mr Lin, as the person to whom Ren Zhou Lawyers’ request was directed, that he could just hand over the file to Mr Sun. Mr Lin then asked Mr Zhou about what he should do if asked about a refund, having disclosed to Mr Zhou that he had not submitted anything to the immigration authority. Even if I were to assume that Mr Lin hoped to receive some free legal advice from Mr Zhou at that stage, as I have found at [25] above, during their conversation, Mr Zhou made it plain to Mr Lin, on more than one occasion, that Mr Zhou could not provide Mr Lin with advice as Ren Zhou Lawyers acted for the DC Plaintiffs, that Mr Zhou and Ren Zhou Lawyers could not act for or help Mr Lin (or his company), that Mr Lin should get legal advice elsewhere and that, if he wanted to represent himself, he could speak directly to Mr Sun the following Monday.

55. To the extent that the Applicants contend that Mr Zhou met with Mr Lin or acted as his legal advisor during the 19 May meeting because he said “I think if there are disputes, it would be better for both parties to settle it instead of litigating it”, I reject that submission. Leaving to one side that Mr Zhou’s statement was qualified as a matter of personal opinion, his recommendation was of a general nature akin to what Counsel for the plaintiffs described in oral submissions as a “truth universally acknowledged”. I do not accept that such a statement amounted to advice giving rise to a solicitor-client relationship or could be characterised as giving rise to an expectation of any such relationship in the context of Mr Lin’s clear expression otherwise.

56. The position of the Lawyers as the solicitors acting for the DC Plaintiffs was confirmed again on 23 May, when Mr Lin acknowledged that matter at the outset of the meeting. Even putting aside the conflict between Mr Zhou and Mr Lin’s evidence on that issue, the conduct of the parties at that meeting is, in my view, inconsistent with the concept of Mr Lin thinking or being led to expect that Mr Zhou was his lawyer and acting for his interests. Considered objectively, the statement by Mr Lin to Mr Zhou and Mr Sun that he cannot transfer his clients’ documents “to you because [of] sensitive issues” is not a statement made by somebody who believes that they are speaking to their own lawyer in confidence, rather, that statement could be characterised as one made in the context of negotiations. Similarly, it is difficult to accept that Mr Zhou would ask Mr Lin to increase the amount of his proffered refund, or that the meeting would end with Mr Zhou recommending that Mr Lin get legal advice from another lawyer in relation to a Deed of Settlement and Release, if Mr Zhou was acting for Mr Lin.

57. Accordingly, I reject the Applicant’s submission that Mr Zhou did not make it clear that Ren Zhou Lawyers was acting for the DC Plaintiffs or that Mr Lin had a reasonable expectation that Mr Zhou would and did act as his solicitor, whether based on their past association or their discussions on those days.

58. I also reject the Applicants’ submission that Mr Zhou owed some kind of duty to Mr Lin to advise him not to meet with Mr Sun and Mr Zhou on 23 May 2022 without a lawyer present on the basis that the information disclosed by Mr Lin to Mr Zhou on 19 May made the matter “complex” and Mr Lin’s position might be prejudiced. This is particularly so in circumstances where Mr Zhou clearly told Mr Lin to seek legal advice elsewhere and it was Mr Lin’s choice to meet Mr Sun and Mr Zhou on 23 May without his own lawyer present. As Counsel for the Lawyers submitted, the reason why Mr Lin was concerned that Ren Zhou’s Lawyers’ clients would sue him and why he wanted to try and resolve the matter by offering some refund appear to be fairly obvious to an independent observer, namely, that Mr Lin and Auslink had not submitted any application but had been paid $210,000 in relation to those services.

59. In my view, there are also a number of difficulties with the Applicants’ claim that the Lawyers should be restrained because Mr Lin disclosed confidential information to Mr Zhou on 19 and 23 May 2022.

60. First, the claim of confidentiality was premised on the information having been disclosed for the purposes of Mr Lin obtaining Mr Zhou’s legal advice. For the reasons outlined above, I do not accept that contention. As I have found, there was no solicitor-client relationship between Mr Zhou and Mr Lin when they met on 19 and 23 May 2022 and neither Mr Lin nor Mr Zhou conducted themselves on the basis that they had one.

61. Second, I am not persuaded that the Applicants have established that there was anything inherently confidential about the information imparted to Mr Zhou. As the Lawyers’ submitted, given that Mr Lin and Auslink were retained and paid by the DC Plaintiffs to lodge an immigration application, the information of whether they did or did not lodge that application is not confidential to Mr Lin and Auslink. It is also difficult to see how the information regarding the IELTS test could be of a confidential nature in a context where Mr Lin asserted that his own clients were involved in the false test.

62. Nor is there another aspect of the relationship between Mr Lin and Mr Zhou or of the circumstances in which information was imparted that, in my view, has been shown to have given rise to an expectation on the part of Mr Lin that what he told Mr Zhou would be kept confidential. This is not a case where the information asserted to be confidential by the Applicants was provided to Mr Zhou in response to questions he put to Mr Lin or in circumstances where Mr Zhou was seeking to elicit information from Mr Lin in some unfair way. To the contrary, in my view, a reasonable, independent observer would conclude that Mr Lin voluntarily provided information to Mr Zhou and Mr Sun in the hope that he could resolve matters with them.

63. Third, while accepting that confidential information in this context can have a broad reach and extend to knowledge of matters like clients’ personalities, reactions, litigious character and tendencies, vulnerabilities and strengths (Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244 at [25]–[29] and [36]), the information claimed to be confidential in this case is not of that nature.

64. Fourth, the two aspects of the information claimed by the Applicants to be confidential in this case were included in affidavits that were read as evidence in chief by the Applicants and the Lawyers, to which no claim of confidentiality was made and no objection was taken.

65. The observations of Brereton J (as his Honour then was) in Kallinicos v Hunt referred to above confirm that the jurisdiction of the Court to prevent a legal practitioner from acting is exceptional and should be exercised with caution. For the reasons outlined above, in my view, the hypothetical fair-minded and reasonably well informed member of the public who has considered the circumstances of this case would not conclude that public confidence in the administration of justice and in the integrity of the Court’s processes would be threatened if the Lawyers were not restrained from continuing to act for the DC Plaintiffs, and the Applicants’ claim for relief should be refused.

66. Given the outcome, I see no reason why the usual order that costs follow the event should not apply and I will make an order that the Applicants pay the Lawyers’ costs of these proceedings on an ordinary basis as agreed or assessed. However, at the request of the Lawyers, I have deferred entry of that order in the event that a party wishes to seek a different costs order having considered these reasons. Any party wishing to seek such an order should file brief written submissions and any affidavit in support within 14 days (with a copy emailed to my Chambers) with a view to that issue being dealt with on the papers after the other party has had an opportunity to respond.

67. For these reasons, I make the following orders:

1. Dismiss the Amended Summons filed on 20 July 2023.

2. Unless a party makes an application for a different costs order within 14 days, the plaintiffs are to pay the defendants’ costs of the proceedings on the ordinary basis as agreed or assessed.

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Decision last updated: 31 July 2023