Michael Smith Real Estate Pty Ltd t/as Raine & Horne Marrickville v Chmait

[2021] NSWSC 1160

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Michael Smith Real Estate Pty Ltd t/as Raine & Horne Marrickville v Chmait [2021] NSWSC 1160

Hearing dates:

27 August 2021

Date of orders:

15 September 2021

Decision date:

15 September 2021

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1.   Order that Lisa Sue Jemmeson and Jemmeson Fisher Pty Ltd t/as Jemmeson Fisher be removed from the Court record as the legal representative for, and solicitor on the record for, the plaintiff in proceeding 2020/00308896.

2.   Order that Lisa Sue Jemmeson and Jemmeson Fisher Pty Ltd t/as Jemmeson Fisher, GA Sirtes SC and P Moorhouse of Counsel be restrained from acting as the legal representatives for the plaintiff in proceeding 2020/00308896 (other than to represent the plaintiff in any ongoing settlement discussions).

3.   Note the undertaking by the plaintiff and its current legal representatives that all copies of the 30 June 2020 Letter in the possession, custody or control of the plaintiff, Jemmeson Fisher, GA Sirtes SC and P Moorhouse of Counsel be destroyed.

4.   Order that the plaintiff and its directors be restrained from discussing the contents of the 30 June 2020 Letter to any new legal representatives retained to act in proceeding 2020/00308896.

5.   Order the plaintiff to pay the defendant’s costs of the notice of motion filed on 8 June 2021.

6.   List the matter for directions for the ongoing conduct of the proceeding before the Registrar on 16 September 2021.

Catchwords:

OCCUPATIONS — Legal practitioners — Legal professional privilege — Inadvertent discovery and inspection of document — Application for removal

Legislation Cited:

Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW), r 31

Cases Cited:

Cleveland Investments Global Ltd v Evans [2010] NSWSC 567

DC Payments Pty Ltd v Next Payments Pty Ltd (2016) 51 VR 151; [2016] VSC 315

Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 228 FCR 252; [2014] FCA 1065

Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641

El-Cheikh v Miraki [2017] NSWSC 1765

English & American Insurance Co Ltd v Herbert Smith [1988] FSR 232

Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46

GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266

Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002) HCA 54

GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

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

Kingston v State Fire Commission (1998) 8 Tas R 152

Li v Jin Lian Group Pty Ltd [2018] NSWSC 479

Manly Council v Byrne [2004] NSWCA 123

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

NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838

Sent v John Fairfax Publication Pty Ltd [2002] VSC 429

Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419; [2000] SASC 273

Category:

Procedural rulings

Parties:

Michael Smith Real Estate Pty Ltd t/as Raine & Horne Marrickville (Plaintiff)
Youssef Chmait (Defendant)

Representation:

Counsel:
Mr P Moorehouse (Plaintiff/Respondent)
Mr I Latham (Defendant/Applicant)

Solicitors:
JemmesonFisher (Plaintiff)
Burke & Mangam Lawyers (Defendant)

File Number(s):

2020/00308896

Publication restriction:

Nil

Judgment

1. HER HONOUR: Before me for hearing on 27 August 2021 was an application, by notice of motion filed on 8 June 2021, brought by the defendant (Mr Youseff Jimmy Chmait) seeking, in essence, that the legal representatives of the plaintiff (Michael Smith Real Estate Pty Ltd t/as Raine & Horne Marrickville) be restrained from acting for the plaintiff in the substantive proceeding (which involves a restraint of trade or non‑competition dispute).

2. The defendant’s complaint relates to the plaintiff having obtained, and provided to its lawyers, a copy of legal advice obtained by the defendant (the 30 June 2020 Letter), in circumstances to which I will refer below. The position of the plaintiff, in summary, is that the defendant’s complaint is adequately dealt with by the provision by the plaintiff (and its legal representatives) of undertakings that have been proffered on a without admissions basis (to which I will refer in due course) in relation to the 30 June 2020 Letter.

3. I heard the application on 27 August 2021 and, when I reserved my judgment, I referred the parties to court annexed mediation on 8 September 2021 (but indicated that I did not propose to defer publishing my judgment for long). As I have not been advised that the matter has resolved at mediation, I now publish my reasons for the orders that I will make in effect granting the defendant the relief sought on the notice of motion.

Background

4. It is not disputed that Mr Chmait worked for the plaintiff for a period of time up until 8 July 2020 as a property salesperson; nor that Mr Chmait resigned from that employment on 8 July 2020, with immediate effect. Mr Chmait’s evidence (which does not appear to be disputed) is that he has not attended the plaintiff’s office since 8 July 2020 and that he did not access the plaintiff’s Wi-Fi network after that day (and has never had remote desktop access).

5. On or around 9 July 2020, Mr Chmait commenced employment with DW & Co Pty Ltd t/as Hudson McHugh (an entity that the plaintiff contends is a rival real estate agency).

6. The plaintiff commenced the present proceeding on 28 October 2020 and the matter has proceeded by way of pleadings. In its statement of claim, the plaintiff alleges that Mr Chmait: retained and failed to return after the conclusion of his employment, a list of clients and properties that is the plaintiff's confidential information; worked for Hudson McHugh in breach of a non-competition restraint in his employment contract; solicited or accepted instructions from clients with whom he or the plaintiff had dealings during his employment with the plaintiff, in breach of a non-solicitation restraint in his employment contract and/or by using the plaintiff's confidential information; and diverted for himself, or for the Hudson McHugh business, opportunities to sell properties that he was aware of as a result of his employment with the plaintiff, in breach of contractual, equitable and statutory duties owed by him to the plaintiff.

7. A defence was filed on 12 January 2021.

8. On 10 February 2021, orders were made that provided for disclosure by the defendant, and that set a timetable for any application for preliminary discovery against the entity that operates the Hudson McHugh business. (Those steps have not yet been completed in light of the present application.)

9. As noted above, by notice of motion filed on 8 June 2021 Mr Chmait seeks orders including that the plaintiff’s legal representatives (both solicitors and counsel) be restrained from acting for the plaintiff in the proceeding (and for the removal from the Court file of the 30 June 2020 Letter in respect of which legal professional privilege is claimed (that Letter being sent from Burkemangan Pty Ltd t/as Burke & Mangan Lawyers, Mr Chmait’s solicitors on the present application, to Mr Chmait) and for the destruction of all copies of the said Letter in the possession, custody or control of the plaintiff’s legal representatives.

10. The plaintiff characterises the relief that is here sought as falling within two categories: first, the Confidentiality Orders (for the destruction of the Letter and that the plaintiff and its directors be restrained from discussing the contents or providing a copy of the 30 June 2020 Letter to any legal representatives that appear on the record in the present proceeding) (prayers 5 and 6); and, second, the Removal Orders (to restrain the plaintiff's lawyers and barristers from continuing to act in the proceeding) (prayers 3 and 4).

11. Each party has filed lay and expert evidence going to the issue as to how the 30 June 2020 Letter came to be on the plaintiff’s computer system and evidence as to whether there has been waiver of legal professional privilege. However, there was no cross-examination of any witness on the interlocutory hearing and, broadly speaking, the application proceeded on the hypothesis that the Letter was privileged (but the plaintiff maintains that the circumstances do not warrant the relief sought in terms of the restraint of its legal representatives).

12. As adverted to above, the plaintiff has proffered (as set out in a letter dated 16 August 2021) the following undertakings on a “without admission” basis:

1. The plaintiff shall do all things necessary, including instructing its lawyers, to cause all copies of the Letter dated 30 June 2020 from Burkemangan Pty Ltd t/as Burke & Mangan Lawyers (the 30 June 2020 Letter), whether in hard copy or electronic form, that are held by it, and by its lawyers, Jemmeson Fisher Pty Ltd, and by Greg Sirtes SC and Paul Moorhouse of Counsel, to be deleted or destroyed within 7 days of the date of the undertaking.

2. The plaintiff will not rely on the 30 June 2020 Letter or its contents in these proceedings, including in any cross-examination in these proceedings

13. The plaintiff's legal representatives have also indicated their preparedness to provide their own undertakings to the Court as officers of the Court.

Circumstances in which Letter came into plaintiff’s possession

14. The 30 June 2020 Letter was annexed to an affidavit Gregory Neil Jemmeson that appears to have been served (but not filed) by the plaintiff in relation to a preliminary discovery application. That affidavit is Annexure B to the affidavit sworn 8 June 2021 by Mr Lyndon Burke that was read on the present application. The Letter is on the letterhead of Mr Chmait’s solicitors and, on its face, is for the dominant purpose of providing legal advice to Mr Chmait. It would surely have been apparent to any legal practitioner that (on its face) it was a document that would ordinarily be subject to legal professional privilege.

15. Mr Chmait’s evidence is that the 30 June 2020 Letter was sent by the solicitor for the defendant to his personal Gmail email account on 30 June 2020 (i.e., just over a week before his resignation). Mr Chmait’s evidence is that he used his own personal laptop (Laptop), his personal iPhone, his personal iPad-pro from early 2020 (IPad-pro) and a desktop computer at the plaintiff’s office premises in Marrickville (Chmait Desktop). Mr Chmait says that he accessed the 30 June 2020 Letter on his iPhone and the Laptop; and that he did not access the Letter on, or from, the Chmait Desktop.

16. As noted above, Mr Chmait resigned his employment with the plaintiff on, and with effect from, 8 July 2020 and his evidence is that he has not attended the office of the plaintiff since that day; and did not access the plaintiff’s Wi-Fi network after 8 July 2020;

17. On the morning of 9 July 2020, Tim Bussink accessed the Chmait Desktop. Mr Bussink has deposed that he did so to reset the password on it. Later, during the day of 9 July 2020, Tim Bussink searched the Chmait Desktop.

18. The defendant says that, on 9 July 2020, the 30 June 2020 Letter was downloaded to the Chmait Desktop and that it was viewed later that day. The locations where it was recorded are identified as the Chmait Desktop and/or the shared file server (known as the x drive) in a directory called “Tim”. (The only person with the name Tim at the office of the plaintiff was Tim Bussink.)

19. Mr Chmait’s evidence is that he did not, at any time during his employment, have remote desktop access (Mr Chmait’s affidavit sworn 16 August 2021 at [18]).

20. On 4 May 2021, Gregory Jemmeson, the principal of the plaintiff’s solicitor’s office, deposed that Michael Smith (an employee of the plaintiff) had searched the email accounts and obtained a copy of a written advice (being the 30 June 2020 Letter) provided by the solicitor for the defendant. Mr Jemmeson deposed that:

33.   I am further informed by Michael Smith and believe that he has arranged for a search of Mr Chmait’s email accounts while with the Plaintiff, in order to determine whether there are any emails that would disclose any communications between Mr Chmait and Hudson McHugh prior to Mr Chmait finishing his employment with the plaintiff, however that search did not reveal any such email communication.

34.    The search of Mr Chmait’s email accounts revealed that Mr Chmait received written advice dated 30 June 2020 regarding the enforceability of his post-employment restraints in his Employment Agreement with the Plaintiff. Exhibited at GJ-1 at tab 5 at pages 60-67 is a true copy of that written advice obtained from the search of Mr Chmait’s email account. However, that letter does not disclose on its face whether or not it was provided to Hudson McHugh, and I am informed by Mr Smith and believe that the email search did not otherwise shed light on that question.

21. On 6 May 2021, the defendant’s solicitor wrote to the plaintiff’s solicitor asserting legal professional privilege over the 30 June 2020 Letter.

22. On 14 May 2021, Ms Lisa Jemmeson, a solicitor for the plaintiff, stated that the document had been saved on the computer hard drive, although her client was no longer certain of the original location, and that the plaintiff’s instructions were that the defendant had deliberately left the document on the workplace computer in order that it would be found by the plaintiff. It was asserted that, in so doing, Mr Chmait had intentionally waived privilege or had inadvertently saved the document, giving rise to an implied waiver of the privilege.

23. An expert report commissioned by Mr Chmait shows that the email was received and read on the Laptop but not downloaded or saved to the Laptop. That expert report shows that there were ten connections made from a computer at the plaintiff’s Marrickville office to the Google account of Mr Chmait after 8 July 2020.

24. Mr Bussink, an employee of the plaintiff, deposes that he found the document on 1 October 2020 (at [27]).

Defendant’s submissions

25. The defendant contends that he neither impliedly nor expressly waived legal professional privilege in relation to the 30 June 2020 Letter.

26. Insofar as the plaintiff submits that Mr Chmait either impliedly or expressly waved legal professional privilege in relation to the documents, Mr Chmait says that there is no evidence to suggest that either course was taken by him and that all the evidence is to the contrary. The defendant notes that the sole exception to this is [26] of the affidavit sworn by Mr Paul Signorelli, a director of the plaintiff, on 21 July 2021, in which Mr Signorelli deposes to a conversation with Mr Chmait in the morning of 9 July 2020 in which he says that Mr Chmait said words to the effect “I’ve had advice and been told that the best approach is to do a deal”.

27. It is noted that Mr Signorelli does not there depose to whether that advice was said to be legal advice, who gave the advice to Mr Chmait and/or the nature of the advice, or who had told Mr Chmait “that the best approach is to do a deal”. (Pausing here, Mr Signorelli is there deposing to what Mr Chmait said to him. It is by no means apparent that Mr Chmait provided any further detail of the above kind. Nevertheless, as I understand it, the significance of this on the defendant’s submission is that the conversation to which Mr Signorelli deposes does not in terms waive privilege in legal advice insofar as it is unclear that reference was there being made to legal advice.)

28. Mr Chmait says that there is no direct evidence of intentional disclosure and that the evidence of both the defendant and the plaintiff’s own expert is to the contrary. It is said that the only evidence the plaintiff’s expert can find of downloading and saving of the 30 June 2020 Letter is on 9 July 2020 (being after the defendant ceased employment with the plaintiff). It is submitted that there is no evidentiary basis for an inference of intentional disclosure of the 30 June 2020 Letter by Mr Chmait; and that there is no suggestion in this case that there is any conduct on his part that makes it unfair to maintain the privilege.

29. Mr Chmait points to the absence of evidence in the plaintiff’s response to the motion as to: first, there being no evidence from Gregory Jemmeson in relation to the matters the subject of the motion (he having not deposed to any other affidavit other than that sworn on 4 May 2021 in the context of the discovery application); and, second, that Michael Smith (the plaintiff’s founding principal) has not deposed to the matters in [33] and [34] of the affidavit of Gregory Jemmeson sworn 4 May 2021.

30. For Mr Chmait it is said that those persons are in the camp of the plaintiff and an adverse inference of the kind discussed in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) is sought that their evidence would not have assisted the plaintiff. It is said that the Court may draw with greater confidence any inference unfavourable to the party who failed to call the witness, if that witness seems to be in a position to cast light on whether that inference should properly be drawn (citing Manly Council v Byrne [2004] NSWCA 123 at [51] per Campbell J (with whom Beazley JA, as Her Excellency then was, and Pearlman AJA agreed).

31. Mr Chmait submits that a fair minded and reasonably informed member of the public would conclude that the proper administration of justice requires that the legal representatives for the plaintiff should be prevented from acting. It is submitted that the knowledge of the contents of the 30 June 2020 Letter is of significant forensic value in cross-examining the defendant (even if the defendant is not expressly cross-examined on the contents of that Letter). While due weight should be given to the public interest in the plaintiff continuing with his own lawyer, it is said that the issue was raised promptly and the proceeding is at a relatively early stage.

32. It is submitted that it must have been immediately apparent to the legal representatives for the plaintiff that the 30 June 2020 Letter was confidential; that they had no reasonable basis to assume that privilege had been waived; and that the appropriate course for the legal representatives for the plaintiff was for them not to use the material and to return, destroy or delete it immediately and to notify the other solicitor or the defendant of the disclosure and the steps taken to prevent inappropriate misuse of the material.

Plaintiff’s submissions

33. Insofar as the defendant seeks a declaration that the 30 June 2020 Letter is confidential and protected by legal professional privilege (prayer 1), the plaintiff says that (in light of the undertakings that have now been proffered) such a declaration has no practical utility and should not be made (citing Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002) HCA 54 at [128] per Gummow and Hayne JJ as authority for the proposition that an interlocutory declaration cannot be made).

34. As to the Confidentiality Orders, the plaintiff contends that these are adequately met by the undertakings that have now been proffered. In particular, it is said that prayer 5 is satisfied by the first undertaking that the plaintiff will give. As to the relief sought in prayer 6, the plaintiff says that this is largely satisfied by the undertakings that the plaintiff will give; in that the plaintiff will not have any copy of the 30 June 2020 Letter to provide to any new lawyers, and the plaintiff and any new lawyers will not rely on the 30 June 2020 Letter or its contents. It is said that, to the extent that prayer 6 goes further and seeks an order that the plaintiff be prevented from discussing the contents of the Letter with any new lawyers, an order will not be made that cannot be enforced other than by the Court “policing” the plaintiff’s discussions with its lawyers.

33. The plaintiff refers by way of example to English & American Insurance Co Ltd v Herbert Smith [1988] FSR 232 (Herbert Smith), where lawyers had inadvertently been provided with papers of Counsel acting for the other side (including instructions to Counsel, Counsel’s opinion, advice given by the solicitors to the clients and witness statements), which those lawyers had then read. (It is noted that there was in that case no application to remove the solicitors from the proceeding.) The plaintiff notes that in that case Browne-Wilkinson VC accepted that orders should be made protecting against the use of the information that had been read but limited the order to overt use of the information. Reference is made by the plaintiff to a passage in the transcript that appears as part of the published reasons (at 240-241) in which the Vice-Chancellor debated with Counsel the precise form of the orders there to be made. The precedential status of such an exchange in published reasons is perhaps an area for interesting academic debate but it might best be understood as shedding light on the intent of the orders that were ultimately made.

34. The Vice-Chancellor in the course of the exchange appeared to accept the submission by the defendants (to which no opposition seems to have been raised by the plaintiff) in that case that a proposed order restraining the communication “to any person (save to solicitors or counsel for the sole purpose of defending this action) [of] any information derived from any document forming part of the bundle” should not be made (though without indication of the reasoning for this) and, insofar as the orders were drafted to restrain “overt” use, indicated that “all you can do is to have an order which is capable of being policed, which must be an order directed towards the outward acts rather than the inward thoughts” (at 240), indicating that his intention was merely to limit the order to a form in which it would be enforceable (at 241). Colloquially (and perhaps using a mixed metaphor), the Vice-Chancellor expressed the opinion that “this rat has bolted” and that there was no way in which the solicitors could now put this out of their mind (at 240).

35. The Vice-Chancellor had earlier in his reasons, in no uncertain terms, emphasised the importance of legal professional privilege as a safeguard of legal rights and the undesirability if the security which is the basis of the freedom to speak with legal advisers as to matters in issue in litigation and otherwise without fear of that subsequently being used against the person were to be “prejudiced by mischances which are of every day occurrence leading to documents which have escaped being used by the other side” (at 239). There is, of course, a dispute in the present case as to whether the access gained by the plaintiff could be characterised as being due to a mischance of everyday occurrence but that is beside the point for present purposes.

36. The plaintiff, having referred to the Herbert Smith decision, goes on to say that the defendant has not provided any submissions in support of the relief set out in prayer 6 (i.e., that the contents of the 30 June 2020 Letter, which has already been read by others, not be disclosed); nor any analysis of the basis on which it may be entitled to such relief. The plaintiff says that to obtain such relief the defendant needs to rely upon an equity arising from the protection of the confidential status of the 30 June 2020 Letter; and that there is no basis on which to conclude that the 30 June 2020 Letter was received by the plaintiff in circumstances giving rise to an obligation of confidence so as to enliven an entitlement to such relief. That said, the plaintiff contends that it is not necessary here to resolve that issue (as I understand it, on the basis that the defendant’s position is protected by the undertakings that have been proffered).

37. The focus of most of the debate on the present application was on the Removal Orders, which (not surprisingly) are opposed by the plaintiff. The plaintiff says that the fact that the plaintiff's solicitors and Counsel have read the Letter is not a sufficient basis to prevent them from acting. The plaintiff says that, in all of the circumstances (including the undertaking that the plaintiff and its lawyers wish to give the Court), that outcome would be an overreaction to any mischief that remains as a result of the plaintiff's lawyers having read the 30 June 2020 Letter.

38. The plaintiff accepts that the applicable principles are those summarised by Gleeson JA in Li v Jin Lian Group Pty Ltd [2018] NSWSC 479 (Li v Jin Lian Group) at [6]-[9]. In that case, a solicitor who was potentially a material witness had allegedly been provided with the other party’s confidential information (see below). Gleeson JA referred at [9] to Brereton J’s summary of the relevant test in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 at [76] (Kallinicos v Hunt). The plaintiff emphasises (and I accept) that the test is not punitive; and says (and again I accept) that the relevant conceptual lens is the administration of justice.

39. In that regard, the plaintiff submits that the proper administration of justice does not require its lawyers to be removed. In particular, it is said that neither of the two matters relied on by the defendant in support of his application in fact supports the making of the Removal Orders.

40. First, as to the asserted forensic value of the Letter in cross-examination of the defendant , even if the plaintiff cannot put the contents of the 30 June 2020 Letter to the defendant (see the defendant’s submissions at [10]), the plaintiff says that the contents of Letter are benign and the plaintiff disputes that it has significant forensic value.

41. In particular, it is submitted that the 30 June 2020 Letter is of no probative value to the outcome of these proceedings and contains no factual material of any utility. The plaintiff says that the 30 June 2020 Letter is simply a lawyer’s opinion about a restrictive covenant; and that the plaintiff’s case will be won or lost by reference to the Court’s interpretation of the restrictive covenants and whether they are enforceable (having regard to the facts relevant to Mr Chmait’s employment and the plaintiff’s entitlement to protect its goodwill and confidential information by use of such restrictive covenants). The plaintiff maintains that its lawyers will not be assisted by some other lawyer’s opinion of those covenants (particularly as the plaintiffs’ lawyers will undertake to destroy all copies of the 30 June 2020 Letter and not to rely upon it or its contents).

42. Second, as to the defendant’s criticism of the fact that the plaintiff’s lawyers did not immediately return, destroy and delete the 30 June 2020 Letter (see the submissions at [11]), the plaintiff again emphasises that the relevant test is not punitive and says that therefore this conduct does not of itself support the plaintiff's lawyers being removed. The plaintiff points to the evidence that the plaintiff’s solicitor was told from the outset that the plaintiff considered that Mr Chmait had left the 30 June 2020 Letter on his workplace computer for it to find; and says that the defendant’s submission amounts to a contention that the plaintiff's lawyers should have disregarded their instructions as to the provenance of the 30 June 2020 Letter. Further, it is said that it is not clear what difference it makes as to how long the plaintiff's lawyers had the Letter.

43. The plaintiff contends that a fair-minded, reasonably informed member of the public would not conclude that the proper administration of justice requires that the Removal Orders be made in order to protect the integrity of the judicial process. In that regard, the plaintiff says that the following are the relevant factors.

44. First, that the plaintiff will destroy all copies of the 30 June 2020 Letter, and give an undertaking that it will never be mentioned again or figure in any way in the determination of this matter (it is said that it will not be the subject of cross-examination and will not be referred to in any submissions).

45. Second, that the 30 June 2020 Letter does not illuminate anything; rather, it analyses the restrictive covenants and “seems to offer” Mr Chmait some advice. The plaintiff says that nothing in the 30 June 2020 Letter will provide the plaintiff or its lawyers with any assistance in making good the plaintiff's case and it is said that it is for that reason that the plaintiff is content to destroy all copies of the 30 June 2020 Letter and never mention it again (to the extent that this last submission rather suggests that, had the plaintiff thought it was to its forensic advantage, it might have pressed to be able to continue to make use of the Letter, I consider that such a submission would not do any credit to the plaintiff; though perhaps this is not what was there intended and in any event nothing here turns on that).

46. Third, that the plaintiff itself obtained and has read the 30 June 2020 Letter (a fact that will not be altered by an order or undertaking that the plaintiff's current solicitors and Counsel cease acting). It is said that this was the reason why lawyers were not restrained from acting in Kingston v State Fire Commission (1998) 8 Tas R 152 (where Counsel’s brief was inadvertently returned to the solicitors for the opposing party). It is noted that the orders there made were limited to orders that the documents be returned, and that no use be made of them or the information in them.

47. Fourth, the plaintiffs submit that removing its current solicitors and Counsel will not prevent any advantage gained by the plaintiff in any settlement discussions as the plaintiff itself has knowledge of the contents of the Letter. It is said that this was a matter to which Hollingworth J had regard in deciding not to remove the solicitors in GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 at [95] (where discovery and inspection were inadvertently given of hundreds of potentially privileged documents, although it was accepted that the solicitors, as distinct from Counsel, had far more limited knowledge of the contents of the documents – see at [90]-[93]).

48. Fifth, that the plaintiff cannot be criticised for searching Mr Chmait's workplace computer on 1 October 2020, which caused it to find 30 June 2020 Letter (in circumstances where the computer was the plaintiff's property, the plaintiff was considering proceedings against Mr Chmait, and Mr Chmait had “boasted” on social media about making a sale for his new agency on behalf of a vendor he had dealt with while employed by the plaintiff). (Pausing here, there remains, as I understand it, a live dispute as to the circumstances in which – and what – was searched on the Chmait Desktop; and that is a matter for determination at trial. At least on some of the postulated scenarios there might well be a basis for criticism of the plaintiff’s conduct.)

49. Sixth, that the proceeding has been on foot for some time and the plaintiff's solicitors have been on the record for the whole of that time (noting that Mr Moorhouse of Counsel has been briefed since before the proceeding was commenced) and that the cost, inconvenience and impracticality of requiring lawyers to cease acting is a relevant consideration (see Kallinicos v Hunt at [76]).

50. Further, it is said that weight must be given to the exceptional nature of an order restraining lawyers from acting, and the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause (Kallinicos v Hunt at [76]; Li v Jin Lian Group at [7]).

51. Insofar as the defendant’s submissions (at [3]) include a summary of what it is said the evidence will show (the relevance of which the plaintiff cavils at in any event), the plaintiff says that the summary is selective and that aspects of it are incomplete.

52. In particular, it is said that: (a) there is a reference to the expert evidence that the 30 June 2020 Letter was downloaded to Mr Chmait's workplace computer on 9 July 2020, but no reference to the accompanying evidence from the plaintiff's expert that one alternative given for that occurring was that a download had occurred between 1 and 8 July 2020; (b) there is reference to [33] and [34] of the affidavit of Gregory Jemmeson sworn 4 May 2021, without reference to the fact that those paragraphs, and their incorrect reference to the 30 June 2020 Letter being revealed by a search of Mr Chmait's email accounts, has been corrected both in correspondence to the defendant's solicitors before the notice of motion was filed, and in the evidence in this proceeding (referring in particular to the plaintiff’s evidence as to the circumstances in which it obtained the 30 June 2020 Letter on 1 October 2020); (c) the reference to the opinion of the defendant’s expert (Mr McKemmish) that there were 10 connections made from a computer at the plaintiff's office premises after 8 July 2020, but no reference to the fact that the plaintiff’s expert (Mr O’Kane) considers that Mr McKemmish’s opinion proceeds on a flawed premise as to what can be deduced from the Google location histories; noting that Mr McKemmish’s further report in reply does not make clear whether he maintains his opinion as to what can be deduced from the Google logs; and (d) the reference to the evidence of Mr Bussink, an employee of the plaintiff, that he found the 30 June 2020 Letter on 1 October 2020, but no reference to the corroborative evidence of the plaintiff's directors^, or to their evidence that they, and as far as they are aware anyone associated with the plaintiff, had no knowledge of the 30 June 2020 Letter prior to that date.

53. Insofar as it is suggested that Mr Smith, the plaintiff’s director, has not deposed to the matters in [33] and [34] of the Gregory Jemmeson affidavit (which are concerned with how the plaintiff obtained the 30 June 2020 Letter) (see the defendant’s submissions at [7]), it is said that this ignores that Mr Smith has given evidence of his knowledge of how the plaintiff obtained the 30 June 2020 Letter on 1 October 2020 and that he was not aware of it prior to that date.

Determination

56. In Kallinicos v Hunt Brereton J, as his Honour then was, reviewed the authorities in this area (at [74]-[75]) in the context of an application by a former client to restrain his former solicitor from acting on behalf of the defendants in proceedings, not on the basis that the solicitor was in possession of confidential information of his that was at risk of disclosure but on the basis that there was a likelihood of the solicitor being a material witness and having a perceived interest in the outcome of the proceedings (see at [1]).

57. His Honour contrasted (at [76]) the position where an application was made during the subsistence of a client’s retainer that the solicitor be restrained from acting for another (the foundation of the court’s jurisdiction there being the fiduciary obligation of a solicitor and the inescapable conflict of duty inherent in the situation of acting for clients with competing interests) and the position where the client’s retainer is at an end (where the court’s jurisdiction is based on the protection of the confidences of the former client). Neither, obviously, is the case here (where Mr Chmait has at no stage been a client of the plaintiff’s solicitors). However, his Honour went on (at [76]) to say:

•   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 Pty Ltd; 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 Australia Services Ltd are not to be read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications Ltd 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 Ltd].

•   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 Ni/ant; 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].

58. His Honour there concluded (at [95]) that although the prima facie right of a party to be represented by the lawyer of his or her own choice was an important one, in that case that right should succumb to the higher interests of the administration of justice and that the relevant discretionary considerations did not significantly weigh against that result.

59. As the plaintiff has noted, those principles have been applied in a number of cases, including Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 where I restrained a solicitor from continuing to act against his former client event though the former client was unable to identify any particular confidential information of which there was a danger of misuse. I did so for the reason set out at [52], namely that:

It seems to me that the fair-minded reasonably informed member of the public would have an expectation that a legal practitioner who has been retained by a company, and received instructions from a company director on the retainer of the company and for the benefit of the company, in relation to a claim made against the company (being a claim which related in part to what the company director himself was said to have done) should not be seen thereafter to act for that company director in prosecuting that very same claim against the company in the same set of proceedings. To the extent that such a member of the public were to be informed that the solicitor in question has resisted (or maintains a right to resist) the provision to the company of documents or information obtained from the company director while he was acting for the company, I think this would only strengthen the perception that justice was not being seen to be done if the retainer of that solicitor were to continue.

60. More recently, in Li v Jin Lian Group, where a solicitor was potentially a material witness and had allegedly been provided with confidential information of the other party, Gleeson JA summarised the principles applicable to the Court’s jurisdiction to restrain a legal practitioner from acting (at [7]-[8]) as follows:

7.   The Court’s jurisdiction to restrain a legal practitioner from acting in proceedings is an exceptional one and discretionary. The jurisdiction must be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the legal practitioner of his or her choice without due or good cause: Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 at [2] (Middleton J), citing Grimwade v Meagher [1995] 1 VR 446 at 452 ; Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 at [35] and [51].

8.   The Court must also be mindful that sometimes such applications may be misused or quite inappropriately pursued by a party to proceedings: Bahonko v Nurses Board of Victoria (No 3) at [3].

61. His Honour there noted (at [9]) what had been said by Brereton J (at [76]) in Kallinicos v Hunt.

62. In Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641 (Dyer v Chrysanthou), Thawley J considered, in the context of an application to restrain a barrister from acting in defamation proceedings, the summary of principles in Kallinicos v Hunt and observed (at [138]) that there was a difference between the expression of the test by Brereton J as being whether a reasonably informed member of the public “would” conclude that the proper administration of justice required that a legal practitioner be prevented from acting and the formulation of the test by Griffiths J in Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 as being whether such a member of the public “might” so conclude (observing that the latter formulation of the test conforms or coheres more closely with the test for apprehended bias).

63. Nettle J, then sitting in the Victorian Supreme Court and Beach J considered the test in Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 (Sent v John Fairfax) at [113] and Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 228 FCR 252; [2014] FCA 1065 at [94], respectively. Their Honours each adopted the formulation “would conclude”; and I consider with respect that the weight of authority requires an assessment that in all the circumstances a fair-minded, reasonably informed member of the public would reach the requisite conclusion.

64. As the defendant here notes, the test was described in El-Cheikh v Miraki [2017] NSWSC 1765 at [20] by McDougall J as follows:

Would that hypothetical (and, it may be, non-existent) person conclude, in all the circumstances of the case, that the public interests relating to the protection of the integrity of judicial process and the due administration of justice, including very importantly the requirement that justice must always be seen to be done, necessitate that a particular practitioner be restrained from acting or from continuing to act.

65. It is not necessary (nor would it be appropriate) here to delve into the circumstances in which the plaintiff discovered the 30 June 2020 Letter (i.e., whether, as Mr Chmait complains, there was any infringement of Mr Chmait’s privacy or other improper conduct in the search of personal emails on the Chmait Desktop (which the plaintiff emphasises is its property); nor as to whether the 30 June 2020 Letter was in some way downloaded by the plaintiff from Mr Chmait’s personal Laptop or Gmail in some fashion). Those are matters for the trial.

66. The forensic analysis by the respective computer experts postulates various alternatives.

67. The plaintiff’s expert, Mr O’Kane, postulates two alternatives (though he says there may be more) that might explain the “download event” without any Gmail records associated with it (see at [43(ii)] of his report). First, that the download event did occur after someone browsed a Gmail account that may have already been logged in (which in essence is Mr McKemmish’s theory) and that that person then deleted the web history entries for the download account but not the entry of the download (noting that there was no record of Gmail access between 1 July 2020 and 8 July 2020 to any Gmail account, so no evidence that a Gmail account was logged in). Second, that the file had been downloaded by Mr Chmait between 1 July 2020 and 8 July 2020 (after the clearing of the downloaded file history); someone deleted the Letter from the “downloads” directory but the record of the download was not deleted from the web browser; and someone logging into Mr Chmait’s computer account on the Chmait Desktop on 9 July 2020 inspected the “Downloads” history in the web browser, clicked on the file causing it to be downloaded, and then deleted that download entry.

68. The defendant’s expert, Mr McKemmish, considering those two alternatives, expresses the view that the more likely explanation is that a person accessed the Chmait Desktop on 9 July 2020, noticed that Mr Chamit’s Google account was accessible; accessed the Gmail inbox and downloaded the letter of advice attached to the email either to the Downloads folder or the “youseff folder” on the file server from whence it was subsequently moved or copied to the “Tim folder” where it was again accessed (see at [28] of his second report).

69. What is clear from the experts’ reports is that the conclusions are dependent on a number of factual assumptions that would only be able to be tested at a contested hearing. Hence, the observation above that those are matters that must be left to a trial.

70. Moreover (other than what implications this might have for the issue of waiver of legal professional privilege – noting the somewhat surprising and counter-intuitive suggestion by the plaintiff that for some reason Mr Chmait deliberately left this Letter on his computer for the plaintiff to find), it is not clear that anything would turn on the particular circumstances in which the 30 June 2020 Letter came to be in the plaintiff’s possession if (as the plaintiff and its legal representatives have indicated) there is an undertaking not to make use of the Letter or its contents in any way in the proceeding.

71. In that regard, I note that there have been cases (to which I referred in the course of submissions) in which a plaintiff has been unable to rely on information gained improperly from review of another party’s personal documents. For example, see DC Payments Pty Ltd v Next Payments Pty Ltd (2016) 51 VR 151; [2016] VSC 315, a case where the parts of plaintiff’s statement of claim that were based on information received accidentally in confidence from the defendant were struck out, where Vickery J said at [1]:

In litigation founded upon the Plaintiffs’ allegations of breach of confidence, the Defendants allege that the Plaintiffs themselves are in breach of confidence by what is said to be their misuse of a customer list owned by a Defendant, which inadvertently fell into the hands of the Plaintiffs. The alleged misuse on the part of the Plaintiffs occurred when they made use of the Defendants’ confidential information in pleading certain allegations in an amended statement of claim. This conduct has spawned an arguable case where the ancient phrase ‘the pot calling the kettle black’ has a tale to tell.

72. See also Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419; [2000] SASC 273 where the Full Court of the Supreme Court of South Australia struck out the entirety of the plaintiff’s statement of claim in circumstances where documents stored in Mr Sullivan’s briefcase were taken and copied and then returned to the suitcase, and used in the proceedings (see at [71]):

The plaintiffs should not be advantaged by what has occurred. The plaintiffs offered, in lieu of a stay, to amend the statement of claim if the appeal were to succeed. However this would lead to considerable debate as to what part of the statement of claim reflected the documents or their contents. A more effective approach to minimise any unfair advantage is to strike out the entire Statement of Claim. The plaintiffs should be at liberty to deliver a fresh Statement of Claim without either directly or indirectly making use of the confidential documents or their contents. In my view, if these steps are not taken equity will not be done.

73. However, in the present case, the proffering of the undertaking would be likely to address any concerns as to how the information was obtained by the plaintiff; and any other consequence flowing from a later finding of impropriety as to the circumstances in which the plaintiff (and its lawyers) came to be in the possession of the 30 June 2020 Letter would be a matter for trial.

74. What is clear on the evidence before me is that, on its face, the 30 June 2020 Letter was one that would attract legal professional privilege. The fundamental nature of the common law right to legal professional privilege was emphasised by the Court of Appeal in GR Capital Group Pty Ltd v Xinfeng Australia International Investment Pty Ltd [2020] NSWCA 266 and the circumstances in which there may be an implicit waiver of such privilege (considered in that decision) are apt to give rise to considerable debate (on which reasonable minds may differ). Suffice it to note that for present purposes it was accepted by the plaintiff that the application could be determined without a conclusion on the issue as to whether legal professional privilege still reposes in the 30 June 2020 Letter. That is because, as noted above, the plaintiff submits that in all the circumstances a fair-minded, reasonably informed member of the public would not conclude that the proper administration of justice requires that the Removal Orders be made in order to protect the integrity of the judicial process.

75. It is convenient in this context to consider each of the factors that the plaintiff relies on for that conclusion.

76. First, as to the undertaking by the plaintiff for destruction of all copies of the 30 June 2020 Letter and that it will not be used in the proceeding in any way (including in cross-examination), I accept that this is a factor that points against the making of orders restraining the legal representatives from acting. Nevertheless, in a passage referred to by Thawley J in Dyer v Chrysanthou at [99], Nettle J in Sent v John Fairfax (at [89]) made the observation that:

One knows as a matter of experience that when he has advised on documents and transactions, recollections of them, although long faded, may revive in the course of the sort of close and careful study which precedes the trial of an action. And when one has conferred with a client, recollection of things said and done in conference may be revived long after the event when the same or similar things are said or done in another place.

77. That observation points to the difficulty posed by the fact that knowledge of the Letter and its contents must surely remain in the minds of the legal representatives of the plaintiff even though they will no doubt seek consciously not to use that information (a problem of the kind recognised by the “rat has bolted” metaphor in the Herbert Smith decision – perhaps there a Freudian slip). I accept that, the High Court has observed, in the context of whether it would be unfair to order the return of privileged documents, that “no narrow view is likely to be taken of the ability of a party, or the party’s lawyers, to put any knowledge gained [from the disclosure of the privileged documents] to one side”, their Honours there adding that this “must be so in the conduct of complex litigation unless the documents assume particular importance” (see Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46 (Expense Reduction) at [49]). However, here the question is not whether the 30 June 2020 Letter should be returned (the plaintiff is willing for it to be destroyed) and the question is not as to the willingness or ability of the plaintiff’s legal representatives to put such knowledge consciously to one side. The question is whether, having gained such knowledge, and with the potential that it may be of forensic advantage (whether used consciously or not), the test articulated in Kallinicos v Hunt is met.

78. Second, as to the plaintiff’s submission that the 30 June 2020 Letter does not illuminate anything, I accept (having read the Letter for the purposes of the present application) that the contents of the Letter might be described as relatively anodyne. Indeed, and without here wishing to divulge its contents, much the same might be gleaned by reference to a restraint of trade textbook. However, I do not accept that it is confined to such an analysis and, to the extent that it offers at least some advice, I accept that it has the potential to be used to the forensic advantage of the plaintiff. Indeed, it has already been sought to be used to the forensic advantage of the plaintiff to the extent that it was deployed by way of an annexure to the affidavit in support of the preliminary discovery of documents sought by the plaintiff. It also seems to me to point to avenues for cross-examination of Mr Chmait, which might give rise to potential debate at a later date as to whether such cross-examination was permissible in light of the undertakings that have been proffered (the spectre of which would be avoided if the Removal Orders were made at this stage of the proceeding).

79. Third, as to the fact that the plaintiff has itself obtained and has read the 30 June 2020 Letter, I accept that this cannot be altered simply by an order or undertaking that the plaintiff's legal representatives cease acting but I see no reason why it would not be adequately met by such an order coupled with the order sought for no disclosure of the contents of the Letter to any new legal representatives.

80. Fourth, as to the submission that any advantage obtained by the plaintiff in settlement discussions from the knowledge of the advice is not remedied by the removal of its legal representatives as the plaintiff itself has that knowledge, I consider this to be a neutral factor (and one that would be met by orders of the kind referred to in the preceding paragraph).

81. Fifth, as to the submission that the plaintiff was in effect justified in searching the Chmait Desktop, this takes matters no further in my opinion. Whether or not that conduct was warranted is not an issue that can now be determined. The question, rather, is what consequences follow from the fact that the plaintiff has obtained the Letter.

82. Sixth, as to the fact that the proceeding has been on foot for some time, it may be noted that the dispute as to Mr Chmait’s alleged breach of his employment contract only arose (on the plaintiff’s evidence) in early October 2020 (less than a year ago). By contrast, in Kallinicos v Hunt (where an order restraining the solicitor from acting was made) the solicitor had acquired knowledge of the matter over a period of more than two years (see at [92]). Moreover, as was the case in Kallinicos v Hunt, here the proceeding appears to be at a relatively early stage in that the pleadings have closed but the evidence has not been served pending disclosure (which has been deferred in light of the present application – T 30). (I also note that Parker J’s orders of 10 February 2021 that set the timetable for discovery also allowed for amended pleadings to be filed and served after discovery.) Therefore, while I accept that the removal of the legal representatives would occasion some inconvenience and cost, I consider (as did Brereton J in Kallinicos v Hunt) that there is ample time for alternative representation to be sought and that the loss of the plaintiff’s current legal representation has not been shown to be oppressive or unduly disruptive to the just, quick and cheap resolution of the real issues in dispute.

83. As to the weight that must be given to the exceptional nature of an order restraining lawyers from acting, and the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause (to which reference was made in Kallinicos v Hunt at [76]; Li v Jin Lian Group at [7] and numerous other authorities), I am acutely conscious of this. As I made clear in the course of submissions, I regard it as a serious matter to make an order depriving any litigant of legal representatives of that litigant’s own choice and I would not lightly do so in any case.

84. One aspect of the matter which I here note is the emphasis placed by the plaintiff on the proposition (which I unreservedly accept) that the jurisdiction to remove or restrain a legal practitioner is not punitive. That said, the events that transpired after the plaintiff provided the 30 June 2020 Letter do not seem to me to be irrelevant, in the sense that to my mind they provide some response to the complaint as to the inconvenience and disruption that would be occasioned by the legal representatives now being required to cease to act. I say this having regard to the observations made by the High Court in Expense Reduction to the effect that the professional obligations owed by solicitors and their proper conduct are not, or should not be, confined to the relevant conduct rules. At [65]-[66], the High Court in Expense Reduction said:

65.   The position of solicitors who are in receipt of privileged documents has another dimension. Rule 31 of the Australian Solicitors’ Conduct Rules, which were adopted by the Law Council of Australia, deals with the duty of a solicitor to return material, which is known or reasonably suspected to be confidential, where a solicitor is aware that its disclosure was inadvertent. It involves notifying the other solicitor of the disclosures and returning that material. The rule has been adopted in Queensland and South Australia and the Law Society of New South Wales presently proposes to adopt it.

66.   Such a rule should not be necessary. In the not too distant past it was understood that acting in this way obviates unnecessary and costly interlocutory applications. It permits a prompt return to the status quo and thereby avoids complications which may arise in the making of orders for the rectification of the mistake and the return of documents.

[Citations omitted]

85. The plaintiff in the present case points to the instructions that the plaintiff’s solicitor received as to the circumstances in which the 30 June 2020 Letter had been obtained, and suggests in effect that it was not incumbent on the plaintiff’s solicitor to question or doubt those instructions. I have some difficulty with that proposition. It seems to me inherently implausible that a departing employee, who is leaving (on the plaintiff’s case) to take up employment with a competitor, would deliberately leave a letter of advice (on its face privileged) on his or her work computer in the hope or with the intention that the employer might somehow stumble across this at some future time; nor is it obvious what could have been the perceived advantage in so doing. The suggestion in submissions that this ties in somehow to the evidence of a conversation in which Mr Chmait is said to have referred to advice that the best approach was to try to do a deal only deepens the mystery surrounding the plaintiff’s suggestion that the Letter must have been deliberately left for it to be found by the plaintiff. If Mr Chmait was so willing to waive legal professional privilege, one might rhetorically ask why he did not simply hand the Letter to the plaintiff’s officers at the time that he raised the prospect of doing a deal and referred to having been told that that was the best approach. Further, the email of 1 October 2020 from Mr Bussink to the plaintiff’s solicitor attaching the Letter said “[w]e found this letter and thought it might be useful to you”, which must have conveyed to the plaintiff’s solicitor that the plaintiff (at least) thought there was something of use in the contents of the Letter.

86. Moreover, the reaction of the defendant’s solicitors when the fact that the 30 June 2020 Letter was in the possession of the plaintiff first emerged must immediately have dispelled any belief in the plaintiff’s solicitors’ mind that there had been an intentional waiver of legal professional privilege (which of itself should surely at that stage have caused the solicitor to question whether the plaintiff’s belief was well-founded that the Letter had been deliberately left for the plaintiff to find). I do not suggest that the plaintiff’s solicitors should not have acted (assuming that could be done consistently with their professional duties to the client and to the Court) in accordance with instructions received from the client. However, if the suggestion is that a solicitor should take, unquestioningly, at face value a client’s instructions (particularly on an issue as important to the administration of justice as the protection of legal professional privilege) then I have difficulty with that proposition. A solicitor is not the mere mouthpiece or mailbox for the client. In the present case, the plaintiff’s solicitors were faced with a document that appeared clearly to be privileged and confidential. No attempt seems to have been made to ascertain from the defendant or his solicitor whether the disclosure was intentional or inadvertent; and, when the defendant’s solicitors asserted that there had been no intentional waiver, the plaintiff’s solicitors staunchly insisted that the Letter was not privileged and that there had been a waiver.

85. The relevance of that conduct is that, to my mind, to a large extent the fact that the plaintiff is now in the position (some months after the event) where it might face the inconvenience and disruption of having to seek new legal representation is largely of its own making. Had the matter been raised with the defendant’s solicitors at the outset (and preferably before the Letter had been read by the plaintiff’s legal representatives) I would have come to a different conclusion on the present application. However, that did not occur and I consider that the non-disclosure of the receipt of the Letter at the earlier time coupled with the subsequent attempt to make use of it as part of the discovery process does call into question the due administration of justice, including the appearance of justice, if the plaintiff’s present legal representatives continue to be involved in the proceeding.

86. The Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) include that:

31   Inadvertent disclosure

31.1   Unless otherwise permitted or compelled by law, a solicitor to whom material known or reasonably suspected to be confidential is disclosed by another solicitor, or by some other person and who is aware that the disclosure was inadvertent must not use the material and must:

31.1.1   return, destroy or delete the material (as appropriate) immediately upon becoming aware that disclosure was inadvertent, and

31.1.2    notify the other solicitor or the other person of the disclosure and the steps taken to prevent inappropriate misuse of the material.

31.2   A solicitor who reads part or all of the confidential material before becoming aware of its confidential status must:

31.2.1   notify the opposing solicitor or the other person immediately, and

31.2.2   not read any more of the material.

31.3   If a solicitor is instructed by a client to read confidential material received in error, the solicitor must refuse to do so.

89. I accept that the instructions received by the plaintiff’s solicitor preclude a finding of awareness that the disclosure of the Letter was inadvertent. However, a healthy degree of scepticism would surely have caused some doubt in that regard; and should have brought into the forefront of the solicitor’s mind the above conduct rules. Once there was a dispute as to the question of inadvertent disclosure that should have rung alarm bells (rather than provoking the initial response from the plaintiff’s solicitor). Albeit in what I accept were very different circumstances, in NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838 I expressed (at [6]) my firm view that, where there are serious concerns as to aspects of the conduct of officers of the Court, it is incumbent on the Court, not least in the public interest of maintenance of the integrity of the rule of law, to ensure that those concerns be properly aired and addressed. There, the solicitors had become aware, in the course of proceedings, that one party to the proceedings (not their client but a director of their client who was a party in his own right) had secretly put in place a system by which that person could monitor the opposite party’s review of documents in the course of that party’s preparation for the conduct of the proceedings. The fact that the conduct is here of a different ilk does not remove my concern as to the necessity for conduct of officers of the Court to be seen as ethically above reproach.

90. Here, I have concluded, after much consideration, that a fair-minded, reasonably informed member of the public (being made aware that the plaintiff’s legal representatives had been provided with, and had not only read but had sought to deploy to their client’s advantage, a copy of confidential legal advice in relation to the subject matter of the very dispute between the parties – even in the relatively anodyne terms that the 30 June 2020 Letter of advice is) would conclude (notwithstanding the undertakings that have now been proffered) that the proper administration of justice requires that the Removal Orders be made in order to protect the integrity of the judicial process. It is fundamental to the rule of law that there be public confidence in the administration of justice.

91. Accordingly, I will largely make the orders here sought by the defendant, with the following qualifications.

92. First, the outcome of the court ordered court-annexed mediation, as noted on the orders entered in JusticeLink, is that the parties are “still negotiating”. If that be the case, then I see no reason to restrain the plaintiff’s legal representatives from continuing in that role.

93. Second, it is not appropriate in my opinion for the copies of the 30 June 2020 Letter that are in evidence to be removed from the Court file – rather, any such copies of the Letter should be redacted and the unredacted copies placed in a sealed envelope in the Court file; not to be opened without order of the Court. I will arrange for that to be done.

94. Third, I do not make the declaration sought by the defendant in prayer 1 of the summons as it is neither necessary nor appropriate on this interlocutory application.

95. Finally, as to costs, I see no reason why costs of the motion should not follow the event but it is not appropriate to make an order for costs against the plaintiff’s solicitors (in the absence of the proper procedure for such applications here being followed).

Orders

96. For the above reasons, I make the following orders.

1. Order that Lisa Sue Jemmeson and Jemmeson Fisher Pty Ltd t/as Jemmeson Fisher be removed from the Court record as the legal representative for, and solicitor on the record for, the plaintiff in proceeding 2020/00308896.

2. Order that Lisa Sue Jemmeson and Jemmeson Fisher Pty Ltd t/as Jemmeson Fisher, GA Sirtes SC and P Moorhouse of Counsel be restrained from acting as the legal representatives for the plaintiff in proceeding 2020/00308896 (other than to represent the plaintiff in any ongoing settlement discussions).

3. Note the undertaking by the plaintiff and its current legal representatives that all copies of the 30 June 2020 Letter in the possession, custody or control of the plaintiff, Jemmeson Fisher, GA Sirtes SC and P Moorhouse of Counsel be destroyed.

4. Order that the plaintiff and its directors be restrained from discussing the contents of the 30 June 2020 Letter to any new legal representatives retained to act in proceeding 2020/00308896.

5. Order the plaintiff to pay the defendant’s costs of the notice of motion filed on 8 June 2021.

6. List the matter for directions for the ongoing conduct of the proceeding before the Registrar on 16 September 2021.

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Decision last updated: 15 September 2021