McKay and Forrest
[2018] FCCA 2287
•21 August 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MCKAY & FORREST | [2018] FCCA 2287 |
| Catchwords: FAMILY LAW – Solicitor for Respondent changes firms – she is employed by Applicant’s former employer – the same firm acted for father and sister in Part IV Proceedings – alleged confidential information – alleged familiarity – alleged conflict – injunction sought – application dismissed. |
| Legislation: Family Law Act 1975 (Cth), s.90SS |
| Cases cited: Osferatu & Osferatu [2015] FamCAFC 177 Karapataki& Karapataki [2011] FMCAfam 6 McMillan & McMillan [2000] FLC 93-048 Spincode Pty Ltd v Look Software Pty Ltd & Ors (2001) 4 VR 501 Gillam v Gillam [2017] FCCA 64 Wilmer v Golding (No.2) [2017] FamCAFC 213, (2017) FLC 93 A13 Dalton & Dalton [2017] FamCAFC 78, (2017) FLC 93-773 |
| Applicant: | MR MCKAY |
| Respondent: | MS FORREST |
| File Number: | MLC 1960 of 2018 |
| Judgment of: | Judge Curtain |
| Hearing dates: | 5 April 2018 & 13 June 2018 |
| Date of Last Submission: | 14 May 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 21 August 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Chislett |
| Solicitors for the Applicant: |
| Counsel for the Respondent: | Ms Swann |
| Solicitors for the Respondent: | Mills Oakley |
ORDERS
That Order 20 sought in the Applicant’s Further Amended Application filed 29 March 2018 be dismissed.
That Ms R, her servants and agents being members of, employees of or servants of the firm known as Mills Oakley Lawyers be and are hereby restrained from accessing physically, electronically or otherwise, the file or any part of the file of Ms F without first obtaining an order from this Court whilst these proceedings are still on foot.
Liberty be reserved to the Applicant and the Respondent to seek any relevant undertaking in relation to this matter on the interim return date 23rd August, 2018.
IT IS NOTED that publication of this judgment under the pseudonym McKay & Forrest is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 1960 of 2018
| MR MCKAY |
Applicant
And
| MS FORREST |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant Mr McKay and the Respondent Ms Forrest lived in a de facto relationship from 2002, to around April or June, 2016. There are three children from that relationship and on the 24th of February, 2018 the Applicant filed proceedings in this Court seeking relief in relation to parenting and property matters. On the 9th of March 2018 he filed an Amended Application. On the 29th of March 2018 he filed a Further Amended Application where at interim order 20, he sought the following… “that Mills Oakley be prohibited and forthwith injuncted from acting for the de facto wife/mother based on a conflict of interest.”
The Respondent de facto mother opposes such an injunction.
Background
In his affidavit affirmed and filed on the 29th March 2018, the Applicant details that on the 14th March 2018, he received an email from a Ms R, the solicitor acting for the de facto Respondent informing him that she had moved from her then firm, Landers and Rogers, to be employed as a lawyer with Mills Oakley Lawyers and would continue to act for the de facto Respondent. He states at paragraph 6 of the same affidavit… “given I had worked at Mills Oakley from 2011 to 2013 as a senior associate, I was immediately concerned that they were conflicted.” He goes on to say that at 10.37am, he sent an email to Ms R that is set out at Exhibit 5 which says as follows… “Ms R, I worked at Mills Oakley for three years and they are conflicted from acting against me. Kindly confirm by reply email that you will not be acting for Ms Forrest otherwise I’ll take this matter both with the LIV Ethics Committee and Court. .”
At paragraph 8 of the same affidavit the Applicant says that at 11.46am he received an email from Ms R, which he sets out at Exhibit JD6, which says as follows…
“Dear Mr McKay,
I confirm receipt of your email.
There is no conflict in me continuing to act on behalf of Ms Forrest.
I am not in receipt of any confidential information in relation to yourself merely as a result of me now working at Mills Oakley. Indeed, any such information would be held only be Human Resources, and clearly I do not have access to same.
I am content for you to refer this matter to the LIV Ethics Committee if you elect to do so.
Yours faithfully,
Ms R.”
At paragraph 10 of his affidavit referred to earlier, the Applicant says the following… “I am concerned that numerous lawyers and in particular partners of the firm, have intimate knowledge of how I think and approach litigation. I socialise personally and professional with many of the partners and also discussed files, clients and other matters with them during my time at Mills Oakley.”
At paragraph 11 of the same affidavit, he says the following… “in addition Mills Oakley acted for my sister and me in respect of my father’s estate and a Part IV dispute with my step-mother which lasted for several years. Mr T was the partner on that dispute.”
I note that the Applicant filed a further affidavit on the 25th April 2018, affirmed the 24th April 2018, wherein he provides greater details about that firm’s role and his role in relation to the Part IV proceedings.
The Respondent’s solicitor Ms R swore and filed an affidavit on the 3rd April 2018 which, ignoring the formal parts, says as follows:
“1. I am Solicitor and Special Counsel in the Family Law Group at Mills Oakley Lawyers and have the care and control of this matter on behalf of the Respondent mother, Ms Forrest, under the supervision of Ms S, Partner.
2. I have acted on behalf of Ms Forrest since 2016 when she first instructed me to do so. At that time I was employed by Lander & Rogers Lawyers. I commenced employment with Mills Oakley Lawyers on the 13th March 2018 and thereafter immediately advised the father of same.
3. I say that there is no conflict in me or Mills Oakley continuing to represent Ms Forrest and the fact that Mr McKay was a previous employee of Mills Oakley Lawyers does not amount to either a real or genuinely perceived conflict. Nor is there any potential for me to become appraised of any confidential information to Mr McKay, or his approach to litigation, merely by virtue of the fact that he used to be employed by my current employer. I am not in receipt of any confidential information in relation to Mr McKay and there is no prospect that I will ever be in receipt of any such information relevant to these proceedings.
4. The only information that I am in receipt of is that which is contained in Mr McKay’s affidavit, namely that he was previously employed by Mills Oakley and that his employment was terminated following his resignation from the firm. That employment and the circumstances surrounding his departure from Mills Oakley are not relevant to either parenting or property matters in dispute between my client and he and are of no consequence to these proceedings. In any event, I have no knowledge as to why Mr McKay left Mills Oakley Lawyers and as such information is held by Human Resources and not accessible to myself, there is no prospect that I will become aware of it.
5. Mr McKay has not identified any potential confidential information that I may be appraised of other than that I might be aware of how he approaches litigation. I depose that I have no knowledge of same other than my observations of the father having acted for Ms Forrest for some time now, and would not discuss any client’s case with any fellow employee other than my personal assistant and managing partner as a matter of practice. I have not discussed this matter with any of the persons referred to at Paragraph 10 of the father’s affidavit sworn 29th March 2018 other than Ms S.
6. I am content to undertake to Mr McKay that I will not discuss this matter with any Partner or employee of Ms Oakley other than my personal assistant, Ms C or my team Partner, Ms S. I have already arranged for all electronic records in relation to this matter to be locked and accessible only to myself, Ms C and Ms S. There are no electronic records in respect of the Part IV dispute and I do not that there is no record of Mr McKay ever having been a client of Mills Oakley in our client or matter lists as maintained in Affinity (our practice management and accounting software programme).
7. I confirm that Mr D and Mr J, the other partners in the Family Law Group have also offered to undertake to Mr McKay that they will not discuss any aspect of Ms Forrest’s matter with me but that that offer has not been replied to.”
Material Relied Upon
A.Applicant
(a) Further Amended Initiating Application filed 29th March 2018;
(b) Affidavits of Mr McKay:
I.Affirmed the 29th of March 2018 and filed 29th March 2018;
II.Affirmed the 24th of April 2018 and filed 25th April 2018.
III.Applicant’s written submissions filed the 25th April 2018;
IV.Applicant’s written submissions in reply filed the 14th May 2018
(and for completeness, I also read his Affidavits filed 8 March 2018, and 5 April 2018).
B. Respondent
(a) Affidavit of Ms R sworn and filed the 3rd April 2018;
(b) Respondent’s written submissions filed the 3rd May 2018.
Notwithstanding the Respondent has not filed an Amended or Further Amended Response, it is clear that she opposes the orders sought by the Applicant and to avoid further delay and expense, I ask them to file that document as soon as possible.
This is an alleged conflict of interest dispute in relation to the firm, Mills Oakley Lawyers. Dealing with this matter has been delayed because whilst I was researching this topic, it came to my attention that my Deputy Associate had previously been employed by Mills Oakley Lawyers for some four months as a Principal Assistant to Mr J and Ms B in 2017.
In those circumstances, I have isolated her from this matter and advised both parties of her involvement with that firm and whether they had any objection to my dealing with this matter further. Although it took over two weeks to receive a reply from both parties, there was no objection.
Applicant’s Allegations
In the submissions of the Applicant dated the 24th April, 2018 at paragraphs [2] and [3], they set out the following allegations: firstly, “that between 2011 and 2013, the applicant was employed as a Senior Associate solicitor at Mills Oakley. He had a close personal relationship with the equity partners in the family law team at Mills Oakley. He also socialised with and engaged professionally with many of the partners who work across a variety of areas of practice;” and secondly, “the applicant was a client of Mills Oakley in a testators family maintenance claim.”
The Current Law
The Applicant argues that the principles in this area are “well settled”. Although not referred to in their submissions, the case of Osferatu & Osferatu [2015] FamCAFC 177 (‘Osferatu’) in my view is the current leading case in this area that clearly binds me.
At page four of the case, under the heading “Applicable Law” the Full Court of the Family Court of Australia says as follows:
20.There are three established categories on the basis of which solicitors may be restrained from acting against their client or former client. They are: breach of confidence, breach of fiduciary duty and the inherent jurisdiction of a court over its officers and to control its process. Each category has its own principles which guide its operation. The third category may be involved in conjunction with either of the first two so there is clearly an overlap; nonetheless, the basis for the exercise of the jurisdiction in each is different (Kallinicos v Hunt [2005] NSWSC 1181).
21.The case before the trial judge was only concerned with the first category: the risk of the misuse of confidential information and we thus confine ourselves to it.
22.The manner in which a client’s confidential information is to be protected in family law proceedings was clearly explained by the Full Court in McMillan and McMillan (2000) FLC 93-048 where the Full Court extensively reviewed existing authorities in the Family Court and in many other courts. The following statement of Frederico J in Thevenez v Thevenez (1986) FLC 91-748 at 75,447 was expressly adopted by the court:
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”. (Reference omitted).
23.The following passage from Thevenez was also expressly adopted by the Full Court in McMillan:
It is my view that in this case [the lawyer] should not continue to act on behalf of [the wife]. 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 should appear to be done. In the circumstances of the present case, there is a risk which may well be merely theoretical but still exists, that justice might not appear to be done.
24.In an unreported decision of Stewart & Stewart (unreported, Family Court of Australia, Lindenmayer J, 17 April 1997) Lindenmayer J 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…
25.Of that passage the Full Court in McMillan said at [87]:
In other words, the client need only give evidence that he has provided confidential information to the solicitor (or in this case, the law clerk/secretary). The client does not have to divulge the content of that information. (See Mills and also Lindenmayer J in Stewart.) In the present case, we consider it sufficient, as we said earlier, that the husband has sworn that he had given instructions to Mr Pitts as to how he wished his “matter to be conducted and the position to be put to the wife”. It is obvious that such matters would come within the description of “confidential information”.
26.It is, however, important to recognise that McMillan, as were Thevenez and Stewart, was a case where the applicant was seeking to restrain a solicitor or a clerk to whom they had recently, and directly, given instructions from acting, or the firm to which they had moved, from acting, in those proceedings. Because the applicants in those cases had given instructions to the solicitor about the very matter in issue, it follows easily that there would be a finding that the solicitor who had moved was in possession of confidential information which is or may be relevant to that matter. It is for that very reason that the passage of Lindenmayer J in Stewart commenced with the words “All that is necessary is that …”. His Honour was simply saying that, in such circumstances, the burden borne by the applicant was discharged by such evidence. Nothing that appears in Stewart, Thevenez or McMillan obviates the need for an applicant seeking such relief from discharging his/her burden of proof by adducing cogent and persuasive evidence. This is particularly so where, as here, the circumstances differ from McMillan. In this case Mr Marhinin had never taken instructions from the wife.
27.In Mancini v Mancini [1999] NSWSC 800 Bryson J said at [7]:
It is of importance to observe that information generally is not protected; the protection available relates to confidential information, and is available to the person entitled to the confidence. No circumstances were put forward in which Mrs Mancini herself is entitled to the protection of the law against the use of any particular information by Mr Mancini or by the lawyers whom he has chosen to retain. It is not possible to address in any clear way and to come to a decision on protection of any alleged confidential information without identifying what the confidential information is in a sufficiently specific way to enable it to be identified. Without doing that it is not possible to come to a conclusion on whether the information truly is confidential, to consider and appraise the circumstances in which it came into existence and was communicated, to come to any conclusion about whether protection is appropriate, or to make any enforceable order. A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.
(My underlining for emphasis)
28.The need for this proof is obvious. In Billington & Billington (No 2) [2008] FamCA 409 Coleman J said at [43]:
As the authorities make clear, the jurisdiction to grant relief of this kind "is to be exercised with caution". The court understands caution to be exercisable in relation to the totality of the evidence, and the matters relevant to the exercise of the jurisdiction, and not to be referrable only to the interests of the party seeking the relief. Relevant in that context is the need to give appropriate weight to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. Also relevant in this context is the cost and inconvenience of requiring the wife to retain new lawyers. Quite apart from the work required to be undertaken by solicitors familiar with the case to adequately represent the wife's interests before the Full Court, realistically, were new solicitors now to be instructed, a far greater level of reading and preparation would be required, and at greatly increased expense to the wife.
29.These are serious and weighty considerations which must, of course, be balanced against the competing interests of the client which were described by Lord Millett in Prince JefriBolkiah v KPMG (A Firm) [1999] 2 AC 222 at 236 as follows:
…It is of overriding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest.
30. We see no conflict between what was said by the court in McMillan and in Volker and Anor & Dunwell and Anor (2013) FLC 93-558 as it was suggested that there might be in Drover & Glasson and Anor [2014] FamCA 714 (which was a decision referred to by the trial judge). Accordingly, we reject any such suggestion. It is to be recalled that McMillan and Volker were cases dealing with very different circumstances. Merely because a principle is expressed in different words by different courts, often to highlight the exigencies of that particular case, does not mean that the principle itself has been altered.
31. This conveniently leads to the next point. Once the client has discharged the onus of proving that the solicitor is in possession of confidential information which is, or may be relevant to the new matter, that is not the end of the case.
32. The next step involves a consideration of the risk that the relevant confidential information will be disclosed. The risk of disclosure “must be a real one, and not merely fanciful or theoretical. But it need not be substantial”: Prince Jefri at 237.
33.How is this to be determined? It is by the consideration of the risk and of any protective measures taken or proposed by the solicitor or his or her new firm. The evidentiary burden on this issue falls squarely on the lawyer or the firm to which he or she has moved. As Lord Millett said in Prince Jefri at 237-238:
Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so there is no risk that the information will come into the possession of those now acting for the other party. There is no rule of law that Chinese walls or other arrangements of a similar kind are insufficient to eliminate the risk. But the starting point must be that, unless special measures are taken, information moves within a firm. In MacDonald Estate v. Martin, 77 D.L.R. (4th) 249, 269 Sopinka J. said that the court should restrain the firm from acting for the second client “unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur.” With the substitution of the word “effective” for the words “all reasonable” I would respectfully adopt that formulation.
34.We agree with Goldberg J in PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905 where he said at [50] and [51]:
50.It is apparent from Lord Millett's judgment that there are three stages which need to be considered:
• whether the firm is in possession of information which is confidential to the former client;
• whether that information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client;
• whether there is any risk that the information will come into the possession of those persons in the firm working for the other party.
51. The burden of establishing the first two propositions is upon the former client but the burden of establishing the third proposition moves to the firm proposing to act once the first two propositions are satisfied…
35.A balancing of the nature of the information against a consideration of the person to whom the information was given, when the information was given, the relevance of that information to the current proceedings, the risk of disclosure and any proposed protective measures is required before any determination can be made as to whether any relief is required and, if so, what is the appropriate relief.
36.As an example of the application of such considerations we refer to Asia Pacific Telecommunications Ltd v Optus Networks Pty Limited [2007] NSWSC 350.
37.None of this conflicts with what was said in McMillan. At [93] their Honours said:
…We accept that the mere fact of access to confidential information is not the test. Rather the issue is whether the former client actually imparted confidential information to a solicitor (or clerk) who is now employed by the solicitors acting on the other side of the litigation.
38.The risk, and management of the risk, were not issues in McMillan, although the authorities quoted there deal with that aspect of the law in the manner we have described.
39.Before leaving this discussion we wish to refer to the statement in McMillan that even “a theoretical risk of the misuse of the confidential information” is sufficient to found relief. The phase “a theoretical risk” was echoed in Prince Jeffri in the passage quoted earlier. For our part, we find the word “theoretical” unhelpful. There is indeed a continuum of risk from obvious to remote. In Asia Pacific, Bergin J described the risk of disclosure or misuse as “probably real and not fanciful” (at [41]). In Billington Coleman J referred to “any real risk” (at [37]). That phrase was also used by Goldberg J in PhotoCure (at [78]). This is a more meaningful phrase. The consideration should be whether there is a real risk of misuse as opposed to one which is merely fanciful. To the extent that what we have said may be seen to represent a departure from McMillan (which we do not necessarily accept), it is to accord with more recent authority and provides a clearer test.
40.We return finally to Lord Millett in Prince Jefri:
Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one. The former may readily be inferred; the latter will often be obvious. I do not think that it is necessary to introduce any presumptions, rebuttable or otherwise, in relation to these two matters. But given the basis on which the jurisdiction is exercised, there is no cause to impute or attribute the knowledge of one partner to his fellow partners. Whether a particular individual is in possession of confidential information is a question of fact which must be proved or inferred from the circumstances of the case…
(My underlining for emphasis)
41.It follows from the above discussion that the law requires that an applicant seeking to restrain a solicitor from acting must adduce evidence that establishes the confidential information and the risk of the misuse of that information in the circumstances. The weight and persuasiveness of any evidence adduced depends, of course, on the precision of the evidence called, the nature of the confidential information and the nature of the risk of disclosure.
It is to be noted that this Full Court case reviewed existing authorities in the family law area and in other areas, in relation to the topic of breach of confidence. At paragraph 21, their Honours said they were only concerned with the risk of the misuse of the confidential information.
Applicant’s Arguments
As I understand the Applicant’s arguments, it appears to be put that Mills Oakley Lawyers are in receipt of confidential information from his role as an employee and as a former client of that firm or his sister was the client and he “conducted” the Part IV proceedings during his employment with that firm. It is further alleged at paragraph 8 of the written submissions of the Applicant dated the 24th April 2018… “the familiarity that the solicitors of Mills Oakley have with the Applicant would fall into the category of “getting to know you” factors.”
The Applicant says at paragraphs 5 and 6 of his first affidavit filed the 19th March 2018 that Mills Oakley Lawyers were… “conflicted” because he worked there as a Senior Associate. He went on to say at paragraph 7 that… “I sent to an email to Ms R reminding her that I had worked at Mills Oakley Lawyers for three years and consequently, she was conflicted.”
He goes on to say at paragraph 10 of the same affidavit… “I am concerned that numerous lawyers and in particular partners of the firm have intimate of knowledge of how I think and approach litigation. I socialised personally and professionally with many of the partners and also discussed files, clients and other matters with them during my time at Mills Oakley.”
He said at paragraph 11… “in addition, Mills Oakley acted for my sister and me in respect of my father’s estate and a Part IV dispute with my step-mother which lasted for several years. Mr T was the partner in that dispute”, (“the Part IV proceedings”).
In his second affidavit filed the 25th of April 2018, he provides greater details about the Part IV proceedings:
(a)His sister was the Defendant and he was not a party to the proceedings;
(b)His sister engaged Mills Oakley Lawyers to be the solicitors on the record;
(c)Two members of the firm, a Mr T and a Mr E were the managing partner and manager of “the file” and he reached an agreement with them that he would do… “a large proportion of the heavy lifting” subject to their supervision;
(d)He met with these solicitors… “almost weekly throughout the Part IV proceedings, which Mills Oakley handled for over 12 months”;
(e)During that time, those two solicitors… “gained a full understanding of my approach to litigation, my financial circumstances, my attitude towards my family and children.”
(f)He “discussed” the Part IV proceedings with numerous partners and colleagues within Mills Oakley Lawyers, including two he names seeking their advice on how he should “approach” certain aspects of the Part IV proceedings;
(g)He received specific advice from “certain teams” within Mills Oakley Lawyers, including tax advice and property advice; and
(h)A number of “these people” have left Mills Oakley Lawyers but other solicitors remain there and he names six in particular.
It appears to me that the Applicant’s sister was in fact the client of Mills Oakley Lawyers, which was not disputed in the Applicant’s Reply submissions. At paragraph 5 of his affidavit filed 25th April, 2018 the Applicant says he was not joined as a party to the proceedings.
The Applicant’s written submissions cite the case of Karapataki& Karapataki [2011] FMCAfam 6 (‘Karapataki’) where His Honour summarised “the test”. However, this case must be read:
(a)in the context of its own particular facts where the solicitor had previously acted for both the husband and the wife, had conferred with both about preparation of their wills, ownership of real property and other related matters; and
(b)the law as it then stood in late 2010 and early 2011 was applied.
I note His Honour referred to McMillan & McMillan [2000] FLC 93-048 (‘McMillan’) as a leading authority in this area. I further note that he cited the comments of O’Ryan J in Pond & Thurga (No.2) (2007) FamCA 1046 where it referred to McMillan, and Thevenez v Thevenez (1986) FLC 91-748 (‘Thevenez’). From this His Honour then formulated the test at paragraph 45 of his judgment as follows:
Although the Full Court in McMillan did not (itself) summarise the test to be applied when deciding whether or not to restrain a legal practitioner from acting for a party to litigation on the basis of the confidential information ground, it is clear that its elements are as follows:
(a)The party seeking the restraint ("the complainant") must:
i.raise a prima facie case that he or she has provided confidential information to the legal practitioner; and
ii.demonstrate that there at least a theoretical possibility that the confidential information could be used to the advantage of the other party, or, alternatively, to the disadvantage of the complainant.
(b)In order to meet the two requirements in (a) above, the complainant need do no more than depose to the fact that he or she –
i.has conveyed confidential information to the legal practitioner; and
ii.believes, not unreasonably, that the confidential information may be used against him or her, or to his or her disadvantage, in the current proceedings.
However, I note at paragraph 26 of the Full Court case of OsferatuvOsferatu [2015] FamCAFC 177 where their Honours said the following:
“It is, however, important to recognise that McMillan, as were Thevenez and Stewart, was a case where the applicant was seeking to restrain a solicitor or a clerk to whom they had recently, and directly, given instructions from acting, or the firm to which they had moved, from acting, in those proceedings. Because the applicants in those cases had given instructions to the solicitor about the very matter in issue, it follows easily that there would be a finding that the solicitor who had moved was in possession of confidential information which is or may be relevant to that matter. It is for that very reason that the passage of Lindenmayer J in Stewart commenced with the words “All that is necessary is that …”. His Honour was simply saying that, in such circumstances, the burden borne by the applicant was discharged by such evidence. Nothing that appears in Stewart, Thevenez or McMillan obviates the need for an applicant seeking such relief from discharging his/her burden of proof by adducing cogent and persuasive evidence. This is particularly so where, as here, the circumstances differ from McMillan. In this case Mr F had never taken instructions from the wife.”
In my opinion, it follows that Karapataki can be distinguished on its own particular facts where the solicitor previously acted for both parties and further that the law has clearly developed in this area since late 2010, early 2011.
The Applicant’s submissions also referred to the conduct of solicitors in the case of Spincode Pty Ltd v Look Software Pty Ltd & Ors (2001) 4 VR 501. However, I think this is distinguishable from this dispute given the headnote detailed the following… “a firm of solicitors had acted for a company since its incorporation. They continued to act for the company when disputes arose among the shareholders and also covertly gave advice to two of the shareholders in relation to those disputes. One of those shareholders brought proceedings to wind up the company and the solicitors acted for it in those proceedings. Warren J granted the defendants an injunction restraining the solicitors from acting or continuing to act in the proceedings for the plaintiff. The plaintiff appealed. Held, dismissing the appeal, that the Judge was right to grant the injunction. From the solicitor’s own evidence, this was a clear case where confidential information on many subjects pertaining to the company and relevant to the matters in dispute in the pending litigation had been received by the solicitors from the company.”
In my view, this case has no relevance to the current facts before the Court and is therefore clearly distinguishable and any reference to it is unhelpful.
In relation to these Part IV proceedings and paragraphs 19 and 20 referred to above, the Applicant has the burden of proof to satisfy the Court at a prima facie case exists that Mills Oakley Lawyers are in receipt of confidential information that arose from the Part IV proceedings or his role as an employee solicitor that may be used against the Applicant or at least used to his disadvantage.
The Applicant is very short on detail and there is no evidence directly pointing to any confidential information that is held by the Respondent other than possibly the sister’s file, which I shall deal with. I note from Osferatu that there must be cogent and persuasive evidence that there is confidential information and not just information generally.
In Osferatu, at paragraph 27, Bryson J in the matter of Mancini v Mancini [1999] NSWSC 800 was cited as follows:
“[7] It is of importance to observe that information generally is not protected; the protection available relates to confidential information, and is available to the person entitled to the confidence. No circumstances were put forward in which Mrs Mancini herself is entitled to the protection of the law against the use of any particular information by Mr Mancini or by the lawyers whom he has chosen to retain. It is not possible to address in any clear way and to come to a decision on protection of any alleged confidential information without identifying what the confidential information is in a sufficiently specific way to enable it to be identified. Without doing that it is not possible to come to a conclusion on whether the information truly is confidential, to consider and appraise the circumstances in which it came into existence and was communicated, to come to any conclusion about whether protection is appropriate, or to make any enforceable order. A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.”
(Emphasis added by the Full Court)
Whatever the information is, is there a real risk of misuse in this case? What we do know from the Applicant’s other affidavits and particular, his 60 page affidavit affirmed 22nd February, 2018 and filed the 8th March, 2018 is the following:
(a)His father died on the 2009 (paragraph 31);
(b)His sister and step-mother were executors of his father’s estate where his sister and the Applicant were the sole beneficiaries (paragraph 35);
(c)In 2010 the step-mother commenced the Part IV Application for proceedings essentially seeking the whole of the estate (paragraph 35);
(d)The Applicant continued to work full-time at Mills Oakley Lawyers, care for the children and run the litigation (paragraph 35);
(e)The dispute was settled in November, 2013 where he and his sister retained a property at Property A, which they subsequently renovated and sold (paragraph 42);
(f)He resigned from Mills Oakley Lawyers on the 2013 (paragraph 45); and
(g)In April, 2014 he sold the Property A property and he and his sister each received $236,812.11 in 2014 (paragraph 47).
All of the above information has been quite properly disclosed for the purpose of the parties’ property proceedings. What he does not clearly argue is that there is other identified material in relation to these events which is privileged and the risk of it being available to the Respondent to undermine his case.
He puts forward general allegations regarding his role as an employee solicitor and the Part IV proceedings that in my view does not satisfy the Osferatu test.
I note that in his submissions in Reply to the Respondent’s submissions, the Applicant again refers to Karapataki and McMillan and ignores the case of Osferatu which in my view is the current leading case in this area. I note it was referred to in the Respondent’s submissions.
I note further that in their submissions the Respondent details there are no electronic records of the Part IV proceedings and the Applicant is not recorded by Mills Oakley Lawyers as a former client. There appears to be a file in his sister’s name, which the Applicant suggests could be accessed for the purpose of these family law proceedings. I find that proposal somewhat strange given I would not expect it to be accessed without notice to the sister to seek her consent and secondly, notice to the Applicant. To remove doubt on this topic, I shall make an order in relation to this file.
The other complaint made by the Applicant was that Mills Oakley Lawyers gained a full understanding of his approach to litigation… “my financial circumstances and my attitude towards my family and children.”
In his written submission dated the 24th April, 2018 the Applicant argued at paragraph 8 as follows:
“The familiarity that the solicitors of Mills Oakley have with the Applicant would fall into the category of “getting to know you” factors, which as Walters FM observed in Karapataki could be described inelegantly as “confidential information”. These factors can include “personality, weaknesses or strengths, honesty (or perhaps dishonesty), fears and reactions (including reactions to pressure or tension)”. Although those matters were not divulged in the context of a solicitor-client relationship, Mills Oakley’s possession of that familiarity gives rise to the same vice that has resulted in practitioners being restrained in other cases.”
I was not referred to these “other cases” or “getting to know you” factors in detail in the context of Mills Oakley Lawyers and the Applicant, and I will comment subsequently on their relevance, as was applied in Gillam v Gillam [2017] FCCA 64.
The written submissions then went on to cite Walters FM in Karapataki at paragraph 9 where His Honour talks of a former client’s credibility and his or her former legal practitioner. It is not a reference to a firm. His Honour’s comments are in relation to a practitioner and Counsel and their knowledge of the former client.
In my view, the Applicant does not make out a prima facie case that Mills Oakley Lawyers are currently in possession of some or all of these “getting to know you” factors for the following reasons:
(a)The Applicant left the firm nearly five years ago and I infer from the passage of time and erosive effect on the memory of a solicitor’s daily workload, any memories of private discussions about these topics would not be clear or be detailed, if they now exist at all;
(b)Some of the solicitors he then worked with at the firm are no longer employed by that firm;
(c)There is no cogent or persuasive evidence that the remaining solicitors are in possession of these “getting to know you” factors;
(d)It is only… “a general allegation to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.” (paragraph 27 Osferatu referring to Bryson J in Mancini’s case);
(e)It is also alleged that Mills Oakley Lawyers gained a full understanding of his approach to litigation. I have some difficulty with this argument given the passage of time, his lack of evidence about the meaning and effect of this phrase and its relevance to 2018 given his approach to litigation may or may not have changed over time. It cannot be considered as privileged or otherwise confidential knowledge that could lead to harm. One can take judicial notice of the fact that when one deals with a lawyer you soon discover from your dealings with that lawyer about “their approach to litigation.” It could hardly be said to be a secret;
(f)The Applicant alleges that Mills Oakley Lawyers gained a… “full understanding of his financial circumstances.” This is an ambiguous phrase. In family law financial cases, which this is in part, parties have to provide to the Court and the other party a full understanding and disclosure of their financial circumstances. Moreover, whatever discussions he may or may not have had with some Mills Oakley Lawyer’s solicitors they are now historic and are unlikely to have contemporary relevance. Further, this allegation lacks relevant details about any confidential information, or how any such information may be used to benefit the Mother’s case or undermine the Father’s case;
(g)He also alleged that Mills Oakley Lawyers gained a… “full understanding of his attitude towards his family and children.” Again this lacks detail. It must be appreciated that in parenting matters, which is also an issue before this Court in this case, the parties are required to file and serve affidavits which provide details about these matters and in particular, their attitude towards and their role in parenting and caring for children. Further, more often than not, the Court orders a Family Report or other reports such as psychiatric or psychological reports that provide a great detail of information about the party, their attitude to children and their family; and
(h)The Applicant also raised the issues of a close personal relationship with, and of socialising personally and professionally with, many of the partners of Mills Oakley Lawyers. I take judicial notice of the fact that many solicitors and barristers know each other, some very well, from a social or professional context. Their professionalism and duties as lawyers means that this has no measurable negative impact on their day to day professional interaction and their duty to their clients, the law and the courts.
Further I note in Gillam v Gillam [2017] FCCA 64, the husband sought an injunction to restrain the wife’s former solicitor’s firm from acting where it was said:
(a)The solicitor had previously acted for the husband in setting up business interests and well as in commercial matters related to a subdivision of property;
(b)The solicitor had acted for the husband in relation to civil and other personal legal matters;
(c)The solicitor had been nominated in the husband’s will as an alternate executor to the wife;
(d)The solicitor had accepted appointed as an attorney for the husband in relation to both financial/health matters pursuant to an enduring power of attorney; and
(e)The enduring power of attorney was operative and continued as at the date of filing of the family law proceedings in the court.
Judge Coker considered the “getting to know you” factors where the husband said that when he attended the solicitor they engaged in banter with respect to what they got up to in their youth, matters relating to previous relationships and, noteworthy from the perspective of the husband, details of his business. His Honour said that the perception remained that there is a conflict arising from information provided by the husband to the solicitor in these circumstances. The Applicant in this case provides no such detail of his alleged “getting to know you” factors.
Conclusion
In Wilmer v Golding (No.2) (2017) FLC 93-813, where similar relief was sought, the Honourable Justice Murphy said at paragraph [18], page 77-847 said the following:.. “The principles relevant to an application of this type are well settled. They were discussed comprehensively in Osferatu and, more recently, in Dalton.” I note that their Honours Justices Ryan and Strickland agreed with his Honour’s reasons.
In Dalton v Dalton (2017) FLC 93-773, at paragraph [14] page 77-237, the Honourable Justice Ryan and the Honourable Justice Ainslie-Wallace in a joint judgment said as follows:
“It is well settled that the jurisdiction to restrain a solicitor from acting for a client is exceptional and to be exercised with caution, having regard to the totality of the evidence (Billington & Billington (No 2) [2008] FamCA 409). Due weight is to be given to the public interest in a client not being deprived of their lawyer of choice without due cause. The public interest is also predicated on a client knowing that confidential information imparted to a lawyer will not be given to an opposing party unless the law requires its production. These public interests lie at the heart of the system of justice (Asia Pacific Telecommunications Ltd v Optus Networks Pty Limited [2007] NSWSC 350 at [42]).”
Overall, it is my view that there is no sound ground for an injunction to be made against Ms R or the firm of Mills Oakley Lawyers. I am satisfied there is no clear privileged information that may be used against the Applicant, no breach of fiduciary duty or the need for the Court’s inherent jurisdiction to be exercised.
I note the Respondent submits at paragraphs 28 and 29 of their written submissions the following:
“28. Ms R was not employed at Mills Oakley when the Applicant worked there. The only risk could be that she could access information about the Applicant stored in files held by the firm, or by discussing the Applicant’s traits with her colleagues. The Affidavit sworn and filed by Ms R on 3 April 2018 confirms that she has done neither of those things. Her Affidavit also confirms what had already been conveyed to the Applicant, as set out in his own evidence, that undertakings not to be involved in this litigation have been offered to the Applicant from the family law partners with whom he claims to have had a friendship, being Mr D and Mr J.”
“29. Ms R has deposed that she has no access to any information about the Applicant held by Human Resources at Mills Oakley, which might relate to his previous employment there. Further, there is no file in the Applicant’s name held by the firm, or electronic records in relation to the Part IV claim that he refers to. All electronic records in relation to the Respondent’s family law file have been locked, so that they are only accessible to Ms R, her assistant and managing partner. These measures have been taken in reaction to the Applicant raising an objection to Mills Oakley acting for the Respondent and not because Ms R, or any other solicitor at Mills Oakley concedes that he or she is in possession of confidential information about the Applicant. It is submitted that effective protective measures, to the extent that they might be required for justice to be seen to be done, are in place.”
Further, I reserve the right of the Applicant and Respondent to argue whether undertakings are required in the circumstances of this matter from the members of the firm of Mills Oakley Lawyers (including Ms R) and the style of same (if any).
I am not totally convinced that undertakings are necessary in this case, however given the “open” offer for same in Ms R’s affidavit and given the possible benefit of removing any mistrust or lack of confidence in their future dealings as practitioners, agreed undertakings could remove a potential barrier to these parties resolving their differences before trial.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Curtain
Date: 21 August 2018.
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