MORALES & MORALES
[2015] FamCA 781
•26 August 2015
FAMILY COURT OF AUSTRALIA
| MORALES & MORALES | [2015] FamCA 781 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Legal representation – whether conflict of interest – 4th year law student daughter of husband’s counsel undertaking work experience at the wife’s solicitors’ firm – apprehended bias – husband’s counsel restrained from appearing for the husband at the trial. |
D & J Constructions Proprietary Limited & Head and Others (1987) 9 NSWLR 118
Forrester & Alstone (2015) FCCA 1152
In the Marriage of Thevenaz (1986) FLC 91-748
In the Marriage of McMillan (2000) FLC 93-048
Kallinicos & Hunt (2005) 64 NSWLR 561
Vincenzo & Vincenzo 2014 FamCA 46
Vulkar & Anor & Dunwell & Anor (2013) FLC 93-558
Westpac Banking Corporation & Newey (2013) NSWSC 533
| APPLICANT: | Ms Morales |
| RESPONDENT: | Mr Morales |
| INDEPENDENT CHILDREN’S LAWYER: | Ms Dowler |
| FILE NUMBER: | MLC | 10069 | of | 2014 |
| DATE DELIVERED: | 26 August 2015 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thornton J |
| HEARING DATE: | 26 August 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr D. Mort |
| SOLICITOR FOR THE APPLICANT: | Nicholes Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Stoikovska |
| SOLICITOR FOR THE RESPONDENT: | Cahill & Rowe Family Law |
Orders
The husband, by himself, his servants and/or his agents be and is hereby restrained by injunction from instructing or briefing, or in any manner engaging or taking advice from Mr Darren Mort of counsel in relation to these proceedings.
Costs of this day be reserved to trial.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Morales & Morales has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 10069 of 2014
| Ms Morales |
Applicant
And
| Mr Morales |
Respondent
And
| Independent Children’s Lawyer |
EX TEMPORE REASONS FOR JUDGMENT
An urgent Application in a Case is brought by the wife who is the respondent in a substantive parenting and property proceeding fixed for trial on 1 September 2015. The application is for the husband to be restrained from engaging counsel for the husband, Mr Darren Mort, as counsel to appear in the trial. The application is opposed by the husband who seeks to continue to engage Mr Mort for the trial. Mr Mort is in an invidious position because he has an obligation to appear and would need to have “just” reason to now withdraw from acting once he has been briefed. Mr Mort was briefed on 14 August 2015.
The parties filed material today when the matter was listed urgently for mention. The matter proceeded by way of submissions and the applicant wife relied on the following:
·affidavit of the wife sworn today;
·affidavit of the solicitor for the wife, Anna Parker, sworn today;
·Application in a Case filed today; and
·written submissions filed today.
The respondent husband relied upon the following:
·affidavit of the solicitor for the husband, Carolyn Taylor, sworn today.
The parties were not aware until today that the trial will be delayed by one day to commence on 2 September 2015, because of my unavailability on 1 September 2015.
The trial has had procedural hearings in this Court which were not before me. The matter was listed by Bennett J for an eight-day trial before me and Ms Sweet of counsel has appeared and been involved in representing the husband in previous hearings. I was informed by her at the first mention of the trial before me on 18 August, at the conclusion of the hearing, that she would be appearing with Mr Darren Mort in the trial. On the affidavit material of the wife before me, this was the first indication that Mr Mort would be involved in the trial.
As it transpires, unfortunately, Mr Mort’s daughter, who is a fourth-year law student, had commenced a two-week work experience placement with the solicitors for the wife on a day before that mention hearing. Mr. Mort’s daughter is aged 22 and lives with her parents. On 19 August 2015, the solicitors for the wife wrote to the solicitors for the husband raising concerns about a perceived conflict of interest, alleging that the daughter of counsel for the husband had been exposed to confidential information regarding the wife’s case.
The letter – annexure AKP1 to Ms Parker’s affidavit – raised the following matter and it reads:
Mr Mort’s daughter, [Ms] Mort, is currently completing a two week work experience placement with our office. During this placement, she has been exposed to confidential information relevant to our client’s case. Given the size of our office, it is not possible to construct an effective Chinese Wall or to ensure that [Ms Mort] will not be further exposed to confidential information during the preparation of our client’s case for final hearing.
As you are aware, Ms Alice Carter of Counsel will be appearing on behalf of our client at the final hearing. Ms Carter has spoken with the Bar Association’s Ethics Committee who has advised her that it would be a conflict of interest for Mr Mort to appear in this matter at the final hearing.
Our client has been made aware of the circumstances and perceives that a conflict of interest would exist if Mr Mort appeared at the final hearing and that this conflict of interest could be to her detriment.
In the affidavit of the solicitor for the wife, at paragraphs 12 onwards, she does not allege that the law student had disclosed confidential information but that she had been exposed to such information and she deposed that the law student did not sign a confidentiality agreement. At paragraphs 13 to 15 of the affidavit of the solicitors for the wife, the solicitor deposes that:
Whilst working at NFL, [Ms Mort] was exposed to confidential discussions and information relating to our client’s file. This was particularly so from the morning of Monday 17 August 2015 to the afternoon of Tuesday 18 August 2015, before NFL became aware that Mr Mort had been briefed.
There were three solicitors and two personal assistants working on our client’s file during the time [Ms Mort] was at NFL. The solicitors work collaboratively and spent a significant amount of time during the days in question discussing and working on our client’s matter. This work included preparing for the Mention on 18 August 2015, briefing Counsel for the Mention, telephone calls with counsel in relation to the Mention and the matter more generally, telephone calls to our client and other related persons in relation to preparation for trial, open discussion between the solicitors and with the personal assistants as to the contents of those telephone calls, and extensive internal discussions as to strategy and trial preparation.
Whilst working in our office [Ms Mort] was seated in an open area and in close proximity to all three solicitors and the personal assistants working on our client’s file. In particular, the area in which [Ms Mort] was seated was immediately outside the offices of two of the solicitors involved.
The length of the exposure with which I am dealing is only a short period of one and a half days but a period of time when the matter was listed before me and preparation for the trial was taking place. Counsel for the husband argues that the applicant wife is, in fact, a legal practitioner and that her perception of conflict here is “in the clouds” and broad and abstract. Counsel for the husband submitted that the majority of case law related to legal practitioners and that his daughter was engaged only for a two-week internship and not as a legal practitioner.
He referred to three grounds for restraining a party from engaging counsel as:
(1) to safeguard the administration of justice;
(2) to prevent a breach of fiduciary duty; and
(3) where there is a danger of a misuse of confidential information.
He conceded that grounds 1 and 3 were relevant considerations here but not applicable because the Court should take a robust view and that the facts here were “drawing a long bow” because the evidence was insufficient to make out a need for such a restraint to be imposed.
He relied upon the case of Forrester & Alstone (2015) FCCA 1152 where Judge Coker referred to the decision of Vulkar & Anor & Dunwell & Anor (2013) FLC 93-558, adopting the passage from paragraph 22 of Westpac Banking Corporation & Newey [2013] NSWSC 533, which provided:
The law and lawyers would be held in disrepute if judges acceded too readily and too often to such applications. Before doing so, there must be some realistic sense of impropriety about the circumstances; something that sensibly justifies the conclusion that unless an injunction were granted, the integrity of the judicial process would be impaired. The basis for the second defendant’s application existed only in the clouds, at an abstract theoretical level. The facts on which it relied were thin and the speculation on which it depended was unconvincing –
Counsel for the husband relied on that principle.
Counsel for the husband also relied upon the test stated in Kallinicos & Hunt (2005) 64 NSWLR 561 which he referred to as:
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.
He conceded that it is a discretionary matter for the Court to determine, notwithstanding any advice that may have been received from the Law Institute or any other body. There is hearsay evidence from both parties in the material about what advice was given. The Court has power to restrain a party from engaging counsel on the basis of its inherent jurisdiction to control its processes and in aid of the administration of justice. I rely upon the decisions of Kallinicos & Hunt and Vincenzo & Vincenzo 2014 FamCA 46 referred to in the written submissions.
There is no criticism here of Mr Mort or his daughter or their professional integrity. I make no finding that confidential information has been disclosed to Mr Mort and there is no evidence of this. The approach adopted by Frederico J in Thevenaz’s case, which is a case referred to in the written submissions, was endorsed by the Full Court of the Family Court in McMillan’s case. At paragraph 54 of McMillan’s case, after analysing the authorities, the Full Court stated:
The test propounded by Hayne J of “a real and sensible possibility of the misuse of confidential information” does not go as far as, or is not as strict as, the test propounded by Frederico J in Thevenaz of even a theoretical risk of the misuse of the confidential information. To the extent that it is necessary in this case for us to express a concluded view (which it was not for the Full Court in McGillivray v Mitchell) we would support the application in this jurisdiction of the approach of Frederico J in Thevenaz (following Mills) which was adopted by Mullane J in Griffis and in Kossatz (and also by Lindenmayer J in the unreported case of Stewart to which we will shortly refer). We would do so for the reasons related to the sensitive nature of the jurisdiction which was referred to by Bryson J in D & J Constructions and by Rourke J in Magro, and indeed also by Wilczek J in the present case.
Referring to the degree of proof at paragraph 55 of McMillan’s case, the Court approved the principle in that case that the applicant need only prove a prima facie case as to confidential material, the disclosure or use of which by the solicitors in the course of the conduct of that current proceeding would be prejudicial. The subject of that proceeding was Mr Pitts a clerk/secretary. At paragraphs 60 to 61 of McMillan’s case, Finn, Kay and Moore JJ stated:
In our opinion, therefore, were Mr Pitts legally qualified, the case would clearly be covered by the principles contained in Mills, Thevenaz, Griffis, Kossatz and Stewart. The question remains, however, whether it makes any difference that Mr Pitts is not a qualified lawyer, and thus not bound by the duties which a lawyer owes to his client (as discussed by Mullane J in Griffis), being the duty to make all his relevant knowledge available to the client and the duty to preserve the confidentiality of information received from the client.
At paragraph 61, the Full Court stated:
We agree with Wilczek J that it should make no difference that Mr Pitts is not a qualified lawyer.
At paragraph 10 of the written submissions of the applicant, the risk is articulated:
It is submitted that Ms Mort is in possession of confidential information regarding the wife and her case and there is a risk in this case that, in an unguarded moment, Ms Mort may disclose something to her father whilst the trial is being prepared or during the running of the hearing which would injure the wife’s case. It is also possible that information has already been unwittingly provided to Mr Mort, as Mr Mort did not know of the conflict until Tuesday 18 August.
Whilst I accept that the jurisdiction to be exercised here is exceptional and should be exercised with caution, I am satisfied that applying the principles enunciated in McMillan’s case, it is appropriate to grant the wife’s application. It matters not that she is a legal practitioner by occupation. She is legally represented and has a legitimate concern about the prospect of confidential information being inadvertently or having already been revealed.
The test is one of perception and theoretical risk rather than actual evidence of access to confidential information. Justice should not only be done, but appear to be done. A cautious approach should be adopted where counsel may have access to confidential information unwittingly. The Family Law jurisdiction warrants a particularly cautious approach because of the sensitive nature of the evidence and this was also articulated in comments made by Bryson J in D & J Constructions Proprietary Limited & Head and Others (1987) 9 NSWLR 118 which is cited at paragraph 8.4 of the written submissions. At paragraph 123 Bryson J said:
It seems natural that a particularly careful view would be taken in family law business, as such litigation tends to be about highly confidential facts and a very wide range of facts and circumstances can conceivably be relevant; the sensitivity which even the most reasonable people feel about such litigation when they are engaged in it calls for careful measures to secure not only that justice is done but also that it is apparent that it is done...
The applicant has raised this as soon as practicable and as soon as possible. Counsel for the husband was briefed on 14 August and there are now six days to prepare before trial and Ms Sweet, of counsel, has been briefed by the husband at a much earlier stage.
In all the circumstances I am satisfied that it is appropriate to restrain the husband from continuing to engage Mr Mort and to grant the wife’s application.
As far as the costs are concerned I reserve the question of costs in relation to this matter until the conclusion of the trial.
I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 26 August 2015.
Associate:
Date:
0
3
0