Nettle and Nettle
[2011] FMCAfam 414
•20 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NETTLE & NETTLE | [2011] FMCAfam 414 |
| FAMILY LAW – Practice and Procedure – procedural – application by the wife that the husband’s solicitor be restrained from acting for the husband – application granted. |
| Family Law Act 1975, s.60CC |
| McMillan & McMillan (2000) FLC 93-048 Pond & Thurga (No.2) [2007] FamCA 587 Seidler & Seidler [2010] FMCAfam 1394 |
| Applicant: | MS NETTLE |
| Respondent: | MR NETTLE |
| File Number: | BRC 1702 of 2011 |
| Judgment of: | Baumann FM |
| Hearing date: | 20 April 2011 |
| Date of Last Submission: | 20 April 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 20 April 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Evans |
| Solicitors for the Applicant: | Evans & Company Family Lawyers |
| Counsel for the Respondent: | Ms Southwood |
| Solicitors for the Respondent: | Cadogan Lawyers |
ORDERS
That the solicitors for the respondent husband (whether Mr Cadogan trading as Cadogan Lawyers, in its own stead (as the case might be), the entity or person responsible for Cadogan Lawyers) be restrained from acting for the respondent husband.
IT IS NOTED that publication of this judgment under the pseudonym Nettle & Nettle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 1702 of 2011
| MS NETTLE |
Applicant
And
| MR NETTLE |
Respondent
REASONS FOR JUDGMENT
(settled from extempore reasons)
In respect of the application made by the wife in these proceedings, the wife, Ms Nettle, applies for an order of restraining the solicitors for her husband, Mr Nettle, from continuing to act for the husband. In a substantive proceedings filed on 4 March 2011 the wife seeks orders for property settlement and some interim relief for sole use and occupation of the former matrimonial home as well as some injunctive relief relating to a line of credit. The wife’s amended application filed 22 March 2011, sought an order in these terms:
“That the solicitors for the respondent husband (whether Mr Cadogan trading as Cadogan Lawyers, in its own stead (as the case might be), the entity or person responsible for Cadogan Lawyers) be restrained from acting for the respondent husband.”
The respondent husband opposes restraint being granted by the Court. The reasons which follow relate to this application only. It was accepted by the wife that if she was successful in this application then before she could properly move the Court to determine her application for sole use and occupation, the husband would be entitled to secure, if he wished, alternate legal representation.
Facts relating to this application
Similar to other interlocutory proceedings, the Court is not able to determine facts in dispute where both competing versions have not been tested, and that factual matrix is as follows. The wife says that Mr Cadogan, the husband’s solicitor:
a)on or about 25 or 26 May 2009, which was prior to the parties marrying on 13 June 2009, had a conversation with the husband and thereafter on or about 28 May 2009, gave her advice as to:
i)whether the parties should enter into a prenuptial agreement;
ii)how she could protect herself from claims by the husband’s parents particularly if she was investing her entitlement from her prior relationship into the respondent’s residence;
iii)how the ownership of the home should be held or transferred in the new circumstances, in response to the concerns she had; and
iv)new wills.
b)Arranged for another employee of his firm to prepare wills for the parties which were signed in December 2010. Total legal costs, she says, amounted to over $2000, which were paid from the parties’ accounts. This is disputed.
The wife deposes at paragraph 44, 45 and 46 of her affidavits, sworn 15 March 2011 that:
“44. I provided my family background and my reasoning concerning how I wanted my estate to be bequeathed.
45. The solicitor other than Mr Cadogan initially declared that we could not both be seen as a result of a “conflict”. He said that he had identified, however, after waiting in the reception area I was told that they would indeed act for me and I proceeded to give them information about myself, my family history, my testamentary wishes and my views about the respondent husband and my concerns about my children and their entitlements.
46. I gave information confidential to myself which I would not have done if I was forewarned about the current sorry state of affairs.”
The wife says she feels “quite violated” and that “I am concerned about the conflict which has arisen and particularly that the facts that appear to give rise to the conflict appear to be denied by the respondent husband and his solicitor.”
The husband’s solicitor by affidavit sworn on 23 March 2011 says, inter alia that:
a)he had acted for the husband in relation to earlier matrimonial proceedings concluded in 2002 and thereafter in other legal matters;
b)he initially spoke to the husband on the telephone during which he says he told the husband that he “Really can’t see you both because I’m in a conflict of interest if I advise both of you.” The solicitor says the husband said words to the effect, “Okay, I don’t think that really is a problem for us”;
c)on 28 May 2009, Mr Cadogan had a conference with both Mr Nettle and the wife. His diary note (CAC 1) identifies the breath of these discussions. I refer to parts of the diary note below. Mr Cadogan acknowledges that he does not “personally recall the attendance on Mr Nettle and his wife-to-be” and that “it is only by reference to the file note that I have any knowledge at all as to what occurred”;
d)the next contact between the husband and his solicitor appeared to be by telephone on 13 October 2009, when the husband rang the solicitor saying, “He quite just wanted to go ahead with the prenuptial thing.” A letter of that date was sent to the husband confirming that as the parties were then married, a section 90CC financial agreement would be needed “subject to whether your wife would be agreeable to same and we assume that she would be”;
e)on 5 November 2009, an employed solicitor of Cadogan Lawyers saw the husband. His wife was present but she waited outside, when he was informed the lawyer could not see them both.
Although I am prepared to accept that Mr Cadogan has no personal recollection of the conference on 28 May 2009, a combination of the contents of the diary note and the wife’s affidavit compel a finding that the solicitor did on or about 28 May 2009 discuss and advise the husband and the wife about her investing and contributing funds into the husband’s residence; potential disputes with her husbands parents; and how the property should be held.
I am not satisfied that Mr Cadogan, as the wife alleges, was told that “they could act for me”. The wife does not say who told her but it seems the husband was told of the potential conflict by Mr Cadogan and his employed solicitor. There is also no doubt, the husband had been a client of the solicitor for many years.
Principles to be applied in these reasons delivered orally
I do not propose to recite significantly from the well-known authorities. Suffice it to say that in the recent judgment of Seidler [2010] FMCAfam 1394, Willis FM reviewed a number of recent and not so recent cases and authorities which demonstrate, at least since the Full Court decision of McMillan (2000) FLC 93-048 that:
“The broader approach is to be preferred namely that a restraint can be justified “where only a theoretical risk of misuse of the confidential information is shown to exist.”
As O’Ryan J in Patten & Thangathurai(No.2) [2007] FamCA 587 noted at paragraph 213, that:
“…the quite narrow or English approach which requires “real mischief or prejudice case” to follow, in order to justify Court intervention was inappropriate for the Family Law Jurisdiction; and that “All that is necessary is that is that the wife swears that she believes not unreasonably and information may be used against her, or at least to her disadvantage in these current proceedings.”
Now, that last comment adopting the words of Lindenmayer J, in the unreported decision of 17 April 2007 of Stewart.
Conclusion
In my view, it does not matter whether the solicitor, Mr Cadogan, has a recall of the information he received on 28 May 2009 from the wife or not. He rightly identified at that early/initial telephone conversation with his client, the husband, that the conflict of interest could arise. There is no evidence the solicitor conveyed in unambiguous terms or actions to the wife his view about the conflict. He certainly did say that to Mr Nettle.
One can well understand a busy solicitor, when confronted with the parties turning up on 28 May 2009 some two weeks before their marriage, trying to assist them with helpful, pragmatic advice (which seems to be the tenor of what the wife claims she received from Mr Cadogan). That advice, however, was based on what the wife told Mr Cadogan, and in so doing he must be seen to have gathered (not in an inappropriate way) information of a confidential nature, including nuances about the wife’s attitude, feelings, concerns and position.
I cannot be satisfied that the wife was aware when Mr Cadogan had his consultation with her (and the husband), some short time before the marriage, that information disclosed by the wife to Mr Cadogan could not be used, however subtly, if the relationship broke down, and the litigation between them, as in fact has occurred, ensured.
To the extent that the husband may feel he has been disadvantaged by the order I propose to make, that disadvantage stems, it seems to me, from the husband’s insistence on bringing his wife to the consultation on 28 May 2009, despite warnings from the solicitor. Although the wife did not participate in the latter consultation on 5 November 2009, the diary note (CAC11) reveals that the husband initially brought his wife in, despite the letter of 13 October 2009 to him from Cadogan Lawyers that the wife must seek independent advice from a solicitor.
There are particular sensitivities that exist in Family Law litigation and the integrity of the justice system, where lawyers as officers of the Court play an important and significant role, benefits from litigants who become adversaries starting from an equal position. Theoretically, the husband, with Mr Cadogan acting for him, is in a superior position potentially, because of information disclosed by the wife to the solicitor and his firm. In my view the solicitor for the husband and his firm should be restrained from acting for the husband. I will make such an order as sought by the wife.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Baumann FM
Date: 3 May 2011
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