Ogilvie & Farnam
[2024] FedCFamC2F 793
•24 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Ogilvie & Farnam [2024] FedCFamC2F 793
File number(s): ADC 6132 of 2020 Judgment of: JUDGE MCGINN Date of judgment: 24 June 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application to restrain a solicitor from acting – Solicitor’s overriding duty to the Court – Where the wife objects to the solicitor for the husband from further acting for the husband – where the solicitor for the husband is the “intimate partner” of the husband – injunction granted Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021
Cases cited: Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491
Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612
Coppola v Nobile [2012] SASC 42
Holborow v Rudder [2002] WASC 265
Kallinacos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181
Mitchell v Burell [2008] NSWSC 772
Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475
Myers v Elman [1940] AC 282
Osferatu & Osferatu [2015] FamCAFC 177; (2015) FLC 93-666
Otta International Pty Ltd v Asia Pacific Carbon Pte Ltd [2015] NSWSC 1818
Pickard and Brown- Jones [2014] FCWA 12
Porter v Dyer [2022] FCAFC 116; (2022) 402 ALR 659
Scallan v Scallan [2001] NSWSC 1078
Sellers & Burns & Anor [2019] FamCAFC 113;
Venter & Venter (No 6) [2024] FedCFamC1F 94
[2010] FMCA 777 (unreported)
[2010] FMCA 783 (unreported)
Division: Division 2 Family Law Number of paragraphs: 127 Date of hearing: 17 June 2024 Counsel for the Applicant: Mr V Solicitor for the Applicant: U Lawyers Counsel for the Respondent: Mr T Solicitor for the Respondent: Firm AB ORDERS
ADC 6132 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS FARNAM
Applicant
AND: MR OGILVIE
Respondent
ORDER MADE BY:
JUDGE MCGINN
DATE OF ORDER:
24 JUNE 2024
IT IS ORDERED:
1.That the husband be restrained and an injunction be granted restraining him from engaging the services of the law firm Firm AB to act on his behalf in these proceedings.
2.That there be an extension of time to 21 September 2024 for the filing of documents required pursuant to order 8 of 9 April 2024 and order 10 of 30 May 2024.
3.That there be liberty for 10 days from the date of these orders to either party to seek to relist this matter in relation to the question of costs in relation to paragraph 2a of the Application in a Proceeding sealed 27 May 2024 and paragraph 3a of the Response to an Application in a Proceeding sealed 29 May 2024 upon written request to the associate to Judge McGinn.
4.That failing receipt of any request for the relisting of this matter in relation to the question of costs pursuant to order 3 that the said Application in a Proceeding and the said Response do otherwise stand dismissed.
5.That order 8 of 9 April 2024 and order 10 of 30 May 2024 as to the documents referred to in the order 9 of 9 April 2024 to be filed no later than 90 days before trial be varied to the effect that such documents be filed on or by 4:00 pm 21 September 2024.
6.That order 6 of the order of 30 May 2024 be varied in that “Judge McGinn” substituted for “Judge Parker” in that order.
7.That the matter remain listed for trial hearing on 3 December 2024 such trial to take place before Judge McGinn.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE McGINN:
Before the Court is the wife’s application by her Application in a Proceeding sealed 27 May 2024, paragraph 2a ,whereby she seeks that the husband be restrained with injunction from engaging the services of law Firm AB to act on his behalf in the within proceedings.
Firm AB were the husband’s solicitors in these proceedings having filed a Notice of Acting on 27 March 2024. They continue to be the husband’s solicitors. Following the reservation of this judgment, on 19 June 2024 a Notice of Address for Service for the husband was filed by another firm of solicitors. Despite that, this matter remained unresolved between the parties and it remains my view that orders should be made so that there is clarity about Firm AB not further acting for the husband in this matter.
The application is brought as the wife says that on 9 April 2024 she learnt that a partner at Firm AB was the partner (in a personal sense) of the husband in these proceedings.
That partner shall be referred to as “Ms P” in these proceedings.
The description of the husband’s personal relationship with Ms P as each being to the other an “intimate partner” is not denied in the present application.
The applicant wife’s written submission and the respondent’s written submission make it clear that this matter falls to be considered as an exercise of the Court’s inherent jurisdiction to restrain a solicitor from acting for a party in a particular case as an incident of its inherent jurisdiction.
No argument was put that this Court lacks this aspect of jurisdiction.
The legal test to be applied in this matter is:
[W]hether 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.[1]
[1]Kallinacos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181, [76]; Osferatu & Osferatu [2015] FamCAFC 177; (2015) FLC 93-666, [20]; Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593, [96-98]; Coppola v Nobile [2012] SASC 42, [22].
Despite written submissions to the contrary, it was submitted in oral submissions on behalf of the respondent husband that the test set out above has been modified with the use of the word “might” in place of the word “would” appearing in the passage cited above.
If that were so, it would suggest that the test is broader and perhaps more easily satisfied. In any event, I have decided this case on the basis that “would” rather than “might” should be part of the test and in so doing it should be taken that I am satisfied that a fair minded, reasonably informed member of the public not only “might” but “would” be satisfied about the requisite matters.
In Garwood & Shipton (No 8) [2024] FedCFamC1F 208 Tree J noted that as it was not in dispute before him that the test contains the word “might” as opposed to “would” as being the words contained in Kallinacos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 (at 582 [76]) and in Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 (at [39]) as authoritatively adopted by the Full Court of the Federal Court of Australia in Porter v Dyer (2022) 402 ALR 659 (at [113]).
The use of “might” was the preferred formulation of Griffiths J in Mumbin v Northern Territory of Australia (No 1) despite Brereton J in Kallinicos v Hunt using “would” in the relevant test. The Full Court of the Federal Court of Australia’s citation in Porter v Dyer of Griffiths J’s formulation in Mumbin v Northern Territory of Australia (No 1) is to be contrasted with the citation, with approval, of the Full Court of the Family Court of Australia in Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593 (at [97]) of the test as expressed in Kallinicos v Hunt. The difference arising in the discussion of Porter & Dyer as to “might” has been described as “misapprehension” in Venter & Venter (No 6) [2024] FedCFamC1F 94 (Carew J, at [63-68]).
Given that I am applying the stricter test here, I do not need to resolve the different views expressed as to whether the test contains “would” or “might”. If the test were to be found to contain “might” I would still find the test to be satisfied.
The present substantive proceedings before the Court are for financial orders, having been commenced by the wife by her Initiating Application filed 3 March 2023. The Initiating Application of the wife seeks orders for property settlement and the husband’s Amended Response to Initiating Application of 3 April 2024 seeks both property settlement and a lump sum child support order.
Those substantive proceedings are set for trial on 3 December 2024 pursuant to orders made on 30 May 2024. Pursuant to those May 2024 orders the parties, amongst other things, are to file trial affidavit material by 4 September 2024 and are to attend a judicial settlement conference on 9 September 2024.
The parties previously had parenting proceedings pending in the Court but those proceedings were finalised by orders being made with the consent of the parties on 4 July 2022. At the time of the making of those consent orders the husband was represented by the firm of solicitors N Lawyers.
In support of her application the wife relies upon:
(a)her Application in a Proceeding sealed 27 May 2024; and
(b)her Affidavit filed and affirmed 27 May 2024.
In support of her application the wife filed an outline of argument on 30 May 2024.
In that case outline the wife seeks to rely upon at least 9 other documents other than the Application in a Proceeding and her affidavit of 27 May 2024 including affidavits filed prior to the Application.
Rules 5.04, 5.08 and 8.14 are to the effect that in support of an Application in a Proceeding, a party can rely upon an affidavit or affidavits filed in support of that application for the purposes of that application and not otherwise. Rule 5.06(1) permits an applicant to file an affidavit in reply if the respondent seeks orders in a cause of action not referred to in the Application and the orders are opposed.
As to relevance upon the 9 other documents, the first ground is satisfied here in the sense that the respondent husband has sought to file an Amended Response and file a further affidavit within 35 days about matters not comprised by paragraph 2a of the wife’s Application in a Proceeding and seeks indemnity costs, which I consider to be a new cause of action being not the usual order for costs, in relation to paragraph 2 of the Application.
If I be wrong about that, I would in the circumstances that give rise to the claim made pursuant to paragraph 2a, grant leave to the wife to rely upon the two additional affidavits identified in the wife’s case outline (one of herself and one of Ms O) and dispense with the Rules precluding any such reliance exercising the power that I have pursuant to Rule 1.31.
The Application deals with a matter associated with the administration of justice and the material of significance in the latter two affidavits are matters known to the husband and his present lawyers. These factors persuade me in this case that I should exercise my discretion to permit reliance on the further affidavits.
The first of the two additional affidavits filed on behalf of the wife is that of herself filed 30 May 2024. This affidavit outlines the wife’s knowledge as to the involvement of Ms P as a lawyer in events comprising part of the parenting proceedings, having access to documents in the current proceedings and stating her belief that Ms P cannot be objective about the process or outcome of the present proceedings and replying to the husband’s and Ms P’s affidavits filed in support of the husband’s Response.
The wife also caused a second affidavit of Ms O of 31 May 2024 to be filed 31 May 2024.
Ms O is a personal assistant to the principal solicitor at the wife’s solicitors’ law firm.
Ms O’s affidavit is of relevance as it annexes an email from Ms P in her capacity as “Partner, Family Law” at Firm AB to Ms O of 8 April 2024 3.31 pm, claiming that she (Ms P) was assisting with the disclosure on behalf of the respondent husband and that she was finalising an interim order for the wife’s solicitors to review in respect of a hearing in this matter to take place the following day.
The attending to disclosure on behalf of a client is a task which carries with it for the solicitor duties and responsibilities to the Court in which proceedings are conducted.[2]
[2]Myers v Elman [1940] AC 282, 321-2 per Wright LJ; Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 Part 6.1, R 1.04(3); Federal Circuit and Family Court of Australia Act 2021 (Cth) s 191.
This affidavit material is important as it establishes that on the day prior to a hearing at this Court on 9 April 2024 Ms P attended to disclosure on behalf of the husband for the purposes of the present property proceedings and was preparing a minute of order for consideration in relation to that hearing and which work is not to be regarded as merely perfunctory.
This involvement goes beyond the provision to counsel of background information at the hearing of 9 April 2024.
It is said in the wife’s case outline that certain facts are uncontroversial. The husband’s written submissions do not appear to dispute that claim. Indeed, the husband’s written submission relies upon paragraph 19 of the wife’s affidavit of 27 May 2024 wherein she says, “I am concerned that [Mr Ogilvie’s] [i.e., the husband’s] legal representation is not independent, both in respect to costs and the advice he receives” as establishing that the wife’s case rises no higher than that and accordingly is insufficient to justify the injunction sought.
The wife by her first affidavit of 27 May 2024 sets out the following chronology of events:
(a)between December 2020 and July 2022 the husband was represented by Ms P of the firm of solicitors N Lawyers;
(b)that firm of solicitors later became Q Lawyers. Ms P was also of those solicitors;
(c)Q Lawyers subsequently ceased to exist but the lawyers at that practice joined the firm of the husband’s present solicitors, Firm AB;
(d)Ms P is represented on the husband solicitor’s website as a partner of that Firm AB;
(e)the wife has no knowledge as to when the personal arrangements between the husband and Ms P commenced;
(f)on 9 April 2024 Ms P attended with the husband at a hearing in this Court and informed the wife’s counsel then appearing for her at that hearing that she was in attendance as the husband’s “partner”. This is understood to be a reference to the personal arrangements that then existed between Ms P and the husband; and
(g)on 14 May 2024 a Mr R who has been a member of each of the firms of the solicitors of which Ms P has been a member or part of and which are referred to above, and continues to be a member of, wrote to this Court saying:
I confirm that I am instructed Counsel on behalf of the husband… In the circumstances and as Counsel who has been involved in the financial aspects of the matter from the start and appeared at the mediation [Mr Ogilvie] would be prejudiced by my inability to appear.
Mr R is not a member in any sense of the husband’s present solicitors’ firm and no order is sought to preclude him personally from acting in this matter.
The mother says consequently in that first affidavit:
(a)that she is “prejudiced” by Firm AB acting for the husband;
(b)she is paying significant costs for independent legal representation and counsel;
(c)that she has a concern that the husband’s legal representation is not independent “both in respect of costs and the advice he receives”;
(d)that Ms P, as the husband’s “intimate partner”, has a vested interest in the outcome of the proceedings;
(e)that as a partner at Firm AB, Ms P may have authority to offer the husband discounted legal fees including a waiver of them;
(f)the wife has an expectation that Ms P is providing instructions to Mr R;
(g)that Ms P and Mr R are “financially associated” persons, presumably meaning financially associated with the husband; and
(h)the wife feels she is at a “significant and obvious disadvantage” as a result of these arrangements.
The wife by her written case outline goes beyond matters set out in the wife’s first affidavit of 27 May 2024 to also to assert:
(a)that from 2014 Ms P was an employee of the firm N Lawyers;
(b)from 2021 Ms P was a partner at N Lawyers;
(c)that Ms P commenced acting for the husband in or about October 2020;
(d)in July 2022 the earlier parenting proceedings between the husband and wife were resolved by way of consent orders;
(e)in late 2022 Ms P commenced a relationship with the husband;
(f)in 2022 N Lawyers became Q Lawyers with Mr R and Ms P as directors of the company that conducted that legal practice;
(g)on 3 March 2023 the wife filed her Initiating Application in respect of the question of property settlement;
(h)thereafter, and before 30 October 2023, Q Lawyers commenced acting for the respondent;
(i)no retainer agreement or other material in respect of the engagement has been disclosed;
(j)Mr R is an independent contractor to Firm AB;
(k)in 2023 Ms P sold her shareholding in S Pty Ltd and commenced employment as a salaried partner at Firm AB;
(l)on 27 March 2024 Firm AB filed a Notice of Acting for the husband in these proceedings; and
(m)on 9 April 2024, and not before, the wife was made aware of the relationship between the husband and Ms P.
The wife’s affidavit says that she is “acutely aware” the husband is in an intimate relationship with Ms P but did not have knowledge of when the relationship commenced although she believes it is “public information” as information has been published on social media. The wife does not say when the material was so published.
The husband in his affidavit of 29 May 2024 asserts that the wife was aware of his relationship with Ms P since at least 14 May 2023. That may be so but that evidence does not satisfy me that the wife was aware or should have been aware that the relationship was that of a “partner”. The use of that term on the 9 April 2024 by Ms P has led the wife to come to understand to mean an “intimate partner”. The disclosure by Ms P on 9 April 2024 constituted an acknowledgement that there was something further and significant about the nature of the relationship between the husband and herself that Ms P felt had to be made conspicuous so as to distinguish that relationship from any mere professional relationship. Ms P’s actions on 9 April 2024 persuade me that that is the date that I should adopt as when the wife became aware of the relevant relationship.
The wife does not assert either through her affidavit or her submissions that Ms P and herself have had an association which has enabled Ms P to have had accessed any type of confidential information that grounds an order precluding the husband’s solicitors from acting as a result of a conflict of interest or a breach of fiduciary duty otherwise owed to her. The husband’s lawyers, past and present, have never acted or sought to act for the wife nor has she sought to have them act for her.
Accordingly, the wife’s complaint in her second affidavit that Ms P has had access to “confidential documents and information” is beside the point. Ms P would only have had access to that material as the husband’s legal practitioner or a friend and/or partner. The wife’s plea in her first affidavit of 27 May 2024 at paragraph 52 of a conflict of interest is not made out. What confidential documents have come to be provided to Ms P have been those provided on the husband’s authority to Ms P, not from the wife.
Rather, the Application appears to be agitated from a reading of the wife’s first affidavit on the basis that the husband has an unfair advantage in having a person with whom he is personally associated acting for him or at least assisting him in a professional capacity in the conduct of the case that is pending in this Court.
The “advantage” which the husband is said to unfairly enjoy is the possibility of the provision of or the provision of a discounting or waiver of his legal fees incurred with Firm AB.
This claim of “advantage” appears to be seized upon by the husband in his written submissions at paragraph 11.
Such “costs advantage” is a matter that would not in and of itself ground the type of order sought here - it may be relevant to the determination of the substantive applications or the question of costs, but that remains to be seen.
The unfair advantage spoken of in the wife’s first affidavit of 27 May 2024 does not appear to be relied upon by her written submission: rather those submissions candidly state that the “underlaying issue” is the perception that the proper administration of justice relies on the perception that Court officers will, above any competing obligation, put their duty to the Court first.
It is open to understand that the wife may express her feelings about Ms P acting in this matter in various ways that do not express the position as succinctly as her written submission does, but it is clear that this basis is what is agitated by her as stipulating that Firm AB should not continue to act further. The husband by his written submission has arrived at the same conclusion.
The husband’s submission is that the wife has failed to specify how the proper administration of justice requires or has required Firm AB not to continue to act for the husband.
It is to be accepted that until the provision of the written submission of the wife on 30 May 2024 the wife’s claim was not articulated in the manner set out at paragraph 22 of the wife’s written submission.
The husband’s reliance on the authority of Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593 at [98] of that judgment is cited to support the proposition that the wife’s statement in her first affidavit of 27 May 2024 that the husband’s legal representation “is not independent, both in respect to costs and the advice he receives” appears to invite the Court to accept that the wife’s claim is so general that it does not amount to a precise enough description of the basis of the application and that there is a lack of evidence that properly grounds the claim.
That submission of the husband in this respect is rejected.
There is sufficient material in the wife’s affidavit of 27 May 2024 to put the husband on notice with sufficient particularity that it is the fact of Ms P being in a personal relationship as a “intimate partner” that causes the application to be brought.
The wife has asserted that the letters passing between her solicitor and the husband’s solicitor/Mr R are “privileged”. It is asserted they are privileged as “[c]orrespondence in family law matter [sic] is privileged unless the correspondence states it is open correspondence” (emphasis in original). That proposition should be rejected. It has no basis in law and no other basis suggested by the evidence in this matter.
The letters comprise a letter of demand on behalf of the wife followed by two letters of enquiry on the husband’s behalf.
The letter of 17 May 2024 of the wife’s solicitors addressed to “[Mr R] [Firm AB]” was a letter that, in the light of Ms P’s affidavit of 28 May 2024, should not have been directed to Mr R as he was not a member of or employee of Firm AB but a member of what can be regarded as his own incorporated legal practice of S Pty Ltd trading as “[S Consulting]”. The letter appears to have been addressed to Mr R on the basis that the wife’s solicitor presumed that as the website of Firm AB said that the team at Q Lawyers, which Mr R and Ms P had operated and at which they had practiced, had joined Firm AB, it is reasonable to assume they each were part of the team.
The letter of 17 May 2024 made reference to Ms P having advised that she had attended at the hearing of 9 April 2024 as partner of the husband and that the wife considered Mr R and Ms P as “financially associated persons”.
Despite not being part of Firm AB, Mr R, on Firm AB letterhead as “Consultant/Family Law [Firm AB]” with a Firm AB email address wrote to the wife’s solicitors on 20 May 2024 and spoke of “his client” and sought the evidential basis for the wife’s claims that he and Ms P were “financially associated persons” with the husband or the property proceedings in the Court. His letter did not seek evidential basis of any claim on account of making it known that Ms P was the husband’s “partner”.
On 21 May 2024 Mr R, on the same letterhead and as “Consultant/Family Law” at Firm AB, reiterated his call for the evidential basis.
To the lay person it would appear that Mr R is holding himself out as a member of Firm AB.
Both letters went unanswered.
Mr R had previously informed the Court by letter on 14 May 2024 that he was “instructed Counsel” (emphasis added) in the matter.
The fact that the letters from Mr R of 17 May 2024 and 21 May 2024 went unanswered does not mean that the inference should be drawn that the wife’s application is bad for want of particulars or that the wife lacked bona fides in respect of her request that Firm AB not act further in the matter. I would not draw that inference in this case.
The wife in her affidavit of 27 May 2024 at paragraphs 19 and 20 sets out her concerns about that relationship between the husband and Ms P are from her perspective. The existence of the relationship of “partner” between Ms P and the husband, known to both the husband and Ms P is sufficient to put them on notice and give them sufficient understanding as to a sufficient basis for the wife’s request and subsequent application.
The requirement for precise identification of obligation that may be breached does not operate as a requirement for a type of pleading as a prerequisite to the present application to succeed but as a means by which the legal practitioner and, if need be, a court can readily understand whether a fiduciary obligation or confidence or the administration of justice is being or likely to be improperly compromised. This requirement is consistent with the notion that if a court is to prevent a practitioner from acting for a party who desires their representation, the court should only proceed to do so with caution given the entitlement of a party to engage a legal practitioner of their choice and the freedom of legal practitioners to act for clients.[3]
[3]Holborow v Rudder [2002] WASC 265, [26]; cited with approval Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593, [98].
It has been accepted that there is no rule that precludes a practitioner spouse from acting for a spouse nor is there any rule that any degree of consanguinity precludes a practitioner from acting for family, friend or associate.
The existence of such a relationship can, however, give rise to the view of a fair minded, reasonably informed member of the public that the proper administration of justice requires that a legal practitioner should be precluded 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.[4]
[4]Kallinacos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181, [76]; Osferatu & Osferatu [2015] FamCAFC 177; (2015) FLC 93-666, [20]; Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593, [96-98].
The applicant wife claims that the decision of the Family Court of Australia in Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612 is not dissimilar to the present case.
In Bosgard the Court, in what the Court described as a clear case the need for caution in the exercise of the power,[5] ordered that the husband’s solicitor immediately cease acting for him in the pending proceedings upon application of the wife in that case.
[5]Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612 (Fowler J), [49].
In Bosgard the husband and his solicitor had been in a relationship for some years and were living together in a de facto relationship at the time of the hearing of the application in May 2013, having lived together from December 2010. In October 2012 the solicitor sent the wife a text message which, in part, was a proclamation of the solicitor’s love for the husband.
In that case the Court found that, given the history of the relationship between the husband and his solicitor, it was “not hard to see” how the priority of duties to a court over duties owed to a client might be reversed and that the solicitor place the love for a partner above the duty owed to the court and that the duty owed to the client might likewise suffer from a lack of objectivity, independence and calm rationality.[6]
[6]Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612, [35 – 36].
However, the Court in that case also found that it was probable that the husband’s solicitor would need to give material evidence at a later stage in the proceedings.[7] The solicitor had a clear and direct stake in the proceedings as a sole creditor and shareholder of the husband in respect of a debt that was potentially a live issue in the proceedings.[8] The solicitor’s interest as a creditor in procuring a favourable result for the client could well conflict with the solicitor’s duty as an advisor to the husband on settlement so as to impede the ability to act independently and so fulfil the solicitor’s duty to the Court to exercise independent judgment in advising clients.[9]
[7]Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612 (Fowler J), [27].
[8]Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612, [41].
[9]Bosgard & Bosgard [2013] FamCA 308; (2014) 49 Fam LR 612, [44].
In that case there existed more than the simple presence of a de facto relationship to justify the making of the order although the reasons for judgment indicate that the existence of a loving de facto relationship would satisfy the criteria (subject to discretionary considerations) of the granting of an injunction precluding a solicitor from acting.
Certain relationships are to be regarded as inevitability having the presence of influence, vulnerability and trust, making the provision of unbiased, objective advice unlikely.
In Otta International Pty Ltd v Asia Pacific Carbon Pte Ltd [2015] NSWSC 1818 the Court refused to give leave for a husband, who was not a legal practitioner, to represent his wife as well as himself in proceedings. In refusing that leave the Court said:
In the present circumstances, irrespective of Mr Kane's relationship with his wife or his other qualities, it would not, in my view, be appropriate to permit him to appear on behalf of Mrs Kane, having regard to the potential conflict which is apparent on the statement of claim. However, in the present case, there is a further matter for consideration.
As the High Court has indicated in cases such as Yerkey v Jones (1939) 63 CLR 649 and the National Australia Bank v Garcia (1998) 194 CLR 395, it is common that the ties of love and affection between wife and husband may incline a spouse to act in a certain way by reason of the relationship, irrespective of the interests of that party. For this reason, it is particularly incumbent on persons who are dealing, as here, with both a husband and a wife to ensure that they do not regard the husband (typically) as the wife's agent. Although these two cases concerned the enforcement by a mortgagee of its rights against wives, who were relevantly volunteers, they are instructive as they illustrate the particular vulnerability associated with spouses and, for historical reasons, wives, in particular. The potential for injustice is, in my view, a fortiori in the case of legal proceedings where, as here, the husband and wife are both defendants and have conflicting interests in the proceedings. For that reason, I would, in any event, refuse leave for Mr Kane to appear on behalf of Mrs Kane.[10]
[10]Otta International Pty Ltd v Asia Pacific Carbon Pte Ltd [2015] NSWSC 1818, [17-18].
In [2010] FMCA 783 the Court (Lucev FM) said at [19]:
In relation to lawyers acting for relatives there is a comparative dearth of authority. One reason for this, at least in modern times, might be that the potential conflict of interest is so obvious that modern lawyers refer matters involving their relatives to independent solicitors. Professor Dal Pont, however, puts the position as follows:
•Especial care should be taken where a lawyer proposes to act in a transaction for herself or himself and a family member or associate. In addition to potentially compromising a lawyer's independent judgment, such a situation is fraught with potential for conflict of interest. The point is well illustrated by Woolley v Ritchie where a solicitor acted on his own behalf and for his de facto spouse in real estate transactions. Upon inquiring, the de facto spouse was told by the solicitor that it was unnecessary for her to seek independent legal advice. Salmon J held that the spouse was not fully informed as to the implications of the transactions, which included the transfer of property and a mortgage in her name to a trust. His Honour held that the solicitor was under a duty to ensure that his de facto spouse was fully informed and freely consented, and the solicitor's conflict stemming from his interest in the transactions requiring securing for the spouse independent legal advice.
•Prudent lawyers will not, therefore, act in transactions in which they are personally interested and that involve their spouses, other family members or business partners, unless the other party is separately represented or advised. The need for independent representation or advice in these cases is heightened by the likelihood that the relative or associate places greater trust in the lawyer than a client lacking that association, and that the lawyer may be less scrupulous in matters of full disclosure. The lawyer may be less inclined to advise the relative or associate of the risks of the deal, and the latter may simply assume without inquiring that the lawyer acts in her or his best interests. [citations omitted]
Those propositions were subsequently accepted by the Federal Magistrates Court of Australia in [2010] FMCA 777.
These passages indicate that the position of spouse or de facto partner, and perhaps of other relationships, can of and in themselves be taken to find that the reasonably informed member of the public would consider that the proper administration of justice requires that a legal practitioner should be precluded 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.
Here, the relationship between the solicitor and the husband is “an intimate partner” relationship. Other aspects as to the conduct of the relationship and the existence of the relationship otherwise being unknown to the wife, are set out in the Ms P’s affidavit of 28 May 2024.
In that affidavit, the relationship between Ms P and the husband is not disputed to be one of “intimate partners” and Ms P sets out features of her relationship with the husband.
The features of the relationship she sets out are:
(a)they do not live together;
(b)they do not combine finances;
(c)they have been in a relationship since late 2022;
(d)they have separate parenting commitments;
(e)they travel together on occasion; and
(f)they dine out together and generally take it in turns to pay the bill.
Ms P has no intention to combine households with the husband.
The features set out are not to be regarded as exhaustive and as set out in Ms P’s affidavit are conspicuously silent on the more personal and emotional aspects of the relationship.
Ms P’s affidavit does not contain information as to when the “intimate partner” relationship with the husband was made known to the wife or how. I find that that occurred on 9 April 2024.
The use of the term “partner” and “intimate” in conjunction with each other permits me to draw the inference (that I do) that a sexual relationship exists or has existed between Ms P and the husband during the period that the litigation over property settlement has been conducted.
It is to be acknowledged that like de facto relationships and marriages, the form and emotional terrain of intimate personal relationships can vary in the intensity of feeling and degree of commitment made and experienced by the parties in that relationship. However, be that as it may, there remains an understanding that such relationships contains essentially elements, not always perfect or unqualified, of love, attraction, sympathy, empathy and trust beyond relatively mere friendship.
The test here is whether a fair minded reasonably informed member of the public would form the necessary conclusion in respect of the administration of justice, including the appearance of justice.
Much has been said and written about how a fair minded and reasonably informed member of the public might be constituted and how they might go about forming a view.
A reasonably informed member of the public might be taken to have an understanding of a lawyer’s duty to represent their client’s interests and to observe their duty to the Court with the latter taking precedence over the former and that, consequently, a lawyer’s personal associations and emotional attachments must not interfere with either of those duties.
In my view a fair minded and reasonably informed member of the public would conclude that the administration of justice and, particularly, the appearance of the administration of justice would not be fulfilled in the present circumstances of Firm AB acting for the husband. Such a member of the public would be of the view that personal relationships of domestic nature, even if in many respects conducted separately, have at their core love, attraction, sympathy, empathy and trust which is likely to colour and temper and detract from, if not skew, the manner in which professional services, in particular advice, might be provided to a client and be something less than independent and objective.
These shortcomings may well, in fact, not be present but that is not the test. The test includes the protection of the appearance of the integrity of the administration of justice and that is what would need to be considered by the reasonably informed member of the public in the circumstances of this case. I am satisfied that that member would consider that the administration of justice is not presently being seen to be served by the present legal representation of the husband.
Insofar as this determination should be regarded as conservative (which it is not intended to be), I accept that in the consideration of this aspect of the matter which may lead to the making of an order of the type sought, the making of which is otherwise to be considered exceptional and made cautiously, room still remains for matters of good practice and prudence to be allowed for and taken into account.[11]
[11]Pickard and Brown- Jones [2014] FCWA 12 (Moncrieff J).
The injunction that is sought is in respect of Firm AB and is not confined to Ms P. Ms P’s evidence is that Firm AB has a staff of over 700. She does not identify how many partners there are.
As referred to above, Ms P is a partner at Firm AB.
Nothing turns upon her membership of that partnership being in a category of partners that are “salaried’ as opposed to “equity”.
There have been cases where injunctive relief of the type sought here has been granted against a particular practitioner but not against the partnership by which they were employed[12] or the rest of the firm of practitioners.[13]
[12]Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 491, [17] – [19]; Scallan v Scallan [2001] NSWSC 1078.
[13]Coppola v Nobile [2012] SASC 42, [35] – [44].
A different view was expressed obiter by Brereton J of the Supreme Court of New South Wales in Mitchell v Burell as follows:
…[M]ost cases point to the view that, in this respect, the law treats a firm of solicitors as a single entity, so that if one partner is disqualified, the firm should not act. In principle, given the incidents of the relationship of partnership (involving utmost good faith and loyalty between the partners), and those of solicitor and client (requiring any partner in a firm to do all in his or her power and use all knowledge and information available to them, including to their partners, to assist the cause of the client), it is difficult to see how, where one partner is disqualified, it could be acceptable for another partner in the same firm to continue to act[14].
[Citations omitted]
[14]Mitchell v Burell[2008] NSWSC 772, [25].
In Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593 the Full Court of the Family Court held that it was not necessary that the solicitor be made a party in order to exercise the power to enjoin him from acting for the husband as sought by the wife in that case.[15] In that case the order appealed from was an order with injunction restraining the husband’s solicitor, and any employee or member of the solicitor’s firm, from further acting for the husband or any other party in the proceedings. The Full Court did so on the basis of the solicitor holding no relevant rights or interest distinct from the party whose solicitor was to be enjoined and, secondly, that the solicitor was on notice of the injunction sought.[16]
[15]Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593, [126].
[16]Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593 [121] – [130].
No evidence has been provided to establish in evidence as to the nature of any information barrier that has been established or would be established and there is no evidence as to the extent others in that firm have been aware of the relevant “intimate relationship” and the manner in which they have been involved in the provision of advice or consideration of advice to the husband.
No undertaking has been proffered as to Ms P now being effectively excluded from the conduct of the matter and, given the correspondence Ms P forwarded to the wife’s solicitors on 8 April 2024 and her actions described in that correspondence and that correspondence’s omission from her affidavit of 28 May 2024, does not for the purpose of the present application enable me to accept that Ms P is merely a support person to the husband or that she would be perceived to be by a fair minded, reasonably informed member of the public.
The husband’s solicitors have taken instructions and are presumed to have given advice as to the answering of the present application. The husband’s Response to an Application in a Proceeding sealed 29 May 2024 in respect of the present application was prepared by Mr R as was the husband’s responding affidavit of 29 May 2024. Ms P’s affidavit of 28 May 2024 was prepared and settled by her. The husband has also filed a Financial Statement on 29 May 2024 marked as having been prepared by him. His written submissions are marked but not signed as having been prepared by a barrister and Mr R as “Counsel and Lawyer for the Respondent”. Each of the documents give the Notice of address for service as that of Firm AB.
This Notice of address appearing on the documents is consistent with that appearing on the Notice of Address for Service for the husband sealed 27 March 2024 for all applications and is taken to be filed on the basis that the lawyer named therein, Firm AB, has general authority to act for the husband.[17]
[17]Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, R 2.25(6).
In the circumstances of this matter, I do not have evidence that persuades me that there should not be a demarcation between the partners at Firm AB or its employees on the one hand and Ms P on the other and that the approach expressed by Brereton J in Mitchell v Burrell cited above, should, with respect, be adopted by me in this case. My view in this regard is fortified by the fact that the matter at the centre of the present application concerns a partner not an employee of the legal firm.[18]
[18]Cf Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491.
I consider that the injunction, if granted, should not be confined to Ms P but rather should apply to Firm AB as sought in the application. Such an injunction would extend vicariously to its servants and agents but not counsel at the independent bar who are, of course, independent of those solicitors.
The determination of the question as to whether to grant the injunction requires the consideration of other matters that also go to the exercise of discretion.
These matters have been identified as prejudice arising from costs, delay, the stage of proceedings and impracticability which, if of a compelling nature,[19] might avoid the making of an order from restraining the solicitors from acting further.
[19]Sellers & Burns & Anor [2019] FamCAFC 113; (2019) 59 Fam LR 593, [162].
This list of factors need not be regarded as exhaustive.
The consideration of these matters is not assisted by the husband’s affidavit of 29 May 2024 that in many respects contains submissions and bold assertions that do not assist the Court’s deliberations as they are assertion to which no weight can be attached.
As part of the Court’s case management processes and as the matter I am asked to now deal with is a matter of practice and procedure, I consider that I am entitled to take into account those documents and orders that relate to the pathway in which this matter has come to be listed for trial including the statement as to costs that have been made by the husband.
The wife became aware of the relevant relationship between the husband and Ms P on 9 April 2024. This application was filed on 27 May 2024 about 7 weeks later. I do not consider that the delay in bringing of the application should preclude the making of the injunction that is now sought.
The property settlement proceedings between the parties have been on foot since 3 March 2023. They are now set for trial at the beginning of December 2024 before me as the primary matter for that day. Affidavits and case outlines for the trial are to be filed by about the 2 September 2024.
That is some 10 weeks away.
There is to be a judicial settlement conference on 9 September 2024. Documents for that conference are to be filed by 7 September 2024 before another Judge of this Court.
That is some 11 weeks away.
The time for filing trial material should be extended to a date after that conference. I consider two weeks shall be sufficient.
There shall be an order further extending the time for the filing of documents provided for in the order 8 of 9 April 2024 and 10 of 30 May 2024 to 21 September 2024.
On 9 April 2024 the parties appear to have taken the Court to the view that this matter would require 3 days of trial hearing time. The length of trial does not indicate complexity nor does the fact that the matter has not been transferred from this Court to another.
Each party has filed a Certificate of Readiness[20] and an undertaking as to disclosure (in the husband’s case that undertaking was certified by Mr R) in early April 2024. Those Certificates were filed in anticipation of the matter being ready to be listed at the hearing on 9 April 2024 for final hearing.
[20]Central Practice Direction, cl 6.49, 6.53.
The most recent Financial Statements filed by each party does not disclose any complexity in their respective financial affairs.
In all the circumstances I do not consider that this matter is of an unusual complexity such that competent legal advisers could not appraise themselves of the facts in this matter and the husband’s instructions so as to be able to conduct the judicial settlement conference and trial as scheduled under existing orders.
The husband’s protest of complexity at paragraph 13 of his affidavit of 29 May 2024 does not convince me otherwise.
The husband has been advised that the process of instructing new lawyers to take over from Firm AB will cost up to $30,000. The basis of that global figure is not set out.
The husband has not filed costs notices in this matter since the commencement of the financial proceedings. However, his Certificate of Readiness of 3 April 2024 sets out costs having been incurred to that date of $32,273.85 and the estimates of counsel’s costs getting up to trial, attending trial and judgment of $26,700, legal fees for trial of $60,000 and disbursement for trial valuations of $20,000. Given the cost of taking the matter to the point of it being ready for listing for trial was about $32,000 and that not all of that work would need to be repeated for a new solicitor to take instructions, including reviewing necessary materials and statements obtained to date, I am of the view that the husband’s statement of anticipated costs of the transfer can only be regarded, with respect to those advising him, as being a generous estimate of such costs.
In any event I would not consider the amount of $30,000 as being sufficient to dissuade me that as a practical matter the injunction should be declined for that reason alone.
I think it can be reasonably anticipated that there are other legal advisors available to assist the husband in the time available prior to the judicial settlement conference and the trial in the proper conduct of each of those aspect of the matter. I have not been provided with evidence to the contrary.
The husband’s claim in his 29 May 2024 affidavit of being denied procedural fairness is not borne out by any evidence and is a jejune assertion which cannot be given any weight.
In considering the matters of cost, delay, the stage of proceedings and impracticability, I am not satisfied that they, considered separately or in cumulation of such a compelling nature as to persuade me that I should not grant the injunction now sought by the wife in respect of the husband’s solicitors.
Since 9 April 2024 it seems there has been further correspondence between the parties and attendance to at least one court hearing. All of that has occurred whilst the present application has been pending and has occurred subject to determination of paragraph 2a of the Application in a Proceeding. In the circumstances the fact of that correspondence and court attendance does not cause me to consider that the injunctive relief sought should not be granted.
In all the circumstances I consider that there should be an order as sought at paragraph 2a of the wife’s Application in a Proceeding.
I will reserve the question of costs and if need be, I will hear the parties separately in relation to the question of costs which can be relisted upon my associate receiving within 10 days a request to relist that matter for argument, failing which the Application in a Proceeding and the Response thereto shall stand dismissed.
I certify that the preceding one hundred and twenty-seven (127) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McGinn. Associate:
Dated: 24 June 2024
0
17
2