Process Minerals International Pty Ltd v Coleman Bros Pty Ltd
[2012] WASC 178
•29 MAY 2012
PROCESS MINERALS INTERNATIONAL PTY LTD -v- COLEMAN BROS PTY LTD [2012] WASC 178
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 178 | |
| 29/05/2012 | |||
| Case No: | CIV:1849/2012 | 17 MAY 2012 | |
| Coram: | HALL J | 17/05/12 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application for interlocutory injunction dismissed | ||
| B | |||
| PDF Version |
| Parties: | PROCESS MINERALS INTERNATIONAL PTY LTD COLEMAN BROS PTY LTD |
Catchwords: | Interlocutory injunction Restraint of party from retaining solicitors who formerly acted for the other party Whether solicitors in possession of confidential information Whether that information relevant to proceedings pending between the parties Whether serious question to be tried established Turns on own facts |
Legislation: | Nil |
Case References: | Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 Mallesons Stephen Jaques v KPMG Peat Marwick (1991) 4 WAR 357 Newman v Phillips Fox (1999) 21 WAR 309 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 22 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
COLEMAN BROS PTY LTD
Respondent
Catchwords:
Interlocutory injunction - Restraint of party from retaining solicitors who formerly acted for the other party - Whether solicitors in possession of confidential information - Whether that information relevant to proceedings pending between the parties - Whether serious question to be tried established - Turns on own facts
Legislation:
Nil
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Result:
Application for interlocutory injunction dismissed
Category: B
Representation:
Counsel:
Applicant : Mr M L Bennett & Ms C L Donald
Respondent : Mr P D Quinlan SC
Solicitors:
Applicant : Bennett & Co
Respondent : Lavan Legal
Case(s) referred to in judgment(s):
Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57
Mallesons Stephen Jaques v KPMG Peat Marwick (1991) 4 WAR 357
Newman v Phillips Fox (1999) 21 WAR 309
Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 22
(Page 3)
- HALL J:
Introduction
1 By writ of summons filed on 15 May 2012 the applicant has commenced proceedings seeking a permanent injunction restraining the respondent from retaining Lavan Legal, a firm of solicitors, to act on its behalf in proceedings presently pending in the State Administrative Tribunal (SAT). On 16 May 2012 the applicant filed a Chamber summons seeking an interlocutory injunction to the same effect until trial or further order.
2 On 17 May 2012 I heard the application for an interlocutory injunction. The matter was heard urgently as the SAT proceedings were listed for a directions hearing the following day. At the conclusion of the hearing I refused the application and gave short reasons for that decision. I indicated that more detailed reasons would be published in due course.
3 Given that Lavan Legal had already been retained by the respondent, had appeared for the respondent in the SAT, and that a hearing of significant preliminary issues was set down in the SAT for the following day, it was plain that if an interlocutory injunction were to be granted it would likely be finally determinative of whether Lavan Legal could continue to act for the respondent. I took that into account in making my decision.
4 The issues to be determined in this case were, first, whether Lavan Legal was in possession of confidential information of the applicant arising from a former professional relationship of lawyer and client. Secondly, whether that information was relevant to a matter in which Lavan Legal was now acting for another party with an interest adverse to that of the applicant.
Background
5 The relevant facts can be briefly stated. In 2008 Lavan Legal acted for the applicant in respect of the use of leased land on Great Northern Highway, Port Hedland. The applicant sought approval from the Town of Port Hedland for the construction of a caretaker's residence on the land. Lavan Legal provided advice in that regard and acted for the applicant in challenging a decision of the Town of Port Hedland to refuse planning approval.
6 The dispute with the Town of Port Hedland was settled. The result was that approval, subject to conditions, was given and the caretaker's
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- residence was built. Some time later, the applicant sought planning approval to build workers' accommodation facilities on the same land. As a consequence it says it became aware that land owned by the respondent on the opposite side of Great Northern Highway was being used to store dangerous goods pursuant to two licences that were issued under the Dangerous Goods Safety Act 2004 (WA) on 7 December 2010.
7 The applicant then commenced proceedings in the SAT seeking to challenge the decisions to issue the dangerous goods licences to the respondent. The applications were filed in the SAT on 28 March 2012. The ground upon which review of the decisions is sought is that the decision-maker is said to have failed to take into account a relevant consideration, namely the proximity of the caretaker's residence on the applicant's property and to the area on which the dangerous goods were to be stored. This failure is said to be critical because the proximity of the residence represented an unacceptable risk of harm to occupants.
8 In respect of the SAT proceedings the applicant is not and has never been represented by Lavan Legal; rather, they are represented by Bennett & Co, who also represent them in this court. At some time following the filing of the SAT applications, Lavan Legal was retained to act for the respondent. The issue of whether a conflict of interest existed was raised by the applicant's present solicitors and Lavan Legal formed the view that there was no such conflict. There were exchanges of emails and correspondence in this regard with the applicant's solicitors, who took a different view. That finally resulted in the commencement of these proceedings.
The duty of confidentiality
9 It is not suggested that Lavan Legal owes any continuing duty of loyalty to the applicant; rather, the application is based on the need to protect confidential information. There is no doubt that a lawyer is ordinarily under a duty not to communicate to others the confidential information of a former client. The duty to respect confidentiality protects the rights of clients to seek and retain legal advice without fear that information provided to a lawyer can be later used to their prejudice: see Newman v Phillips Fox (1999) 21 WAR 309.
10 The test to be applied in determining whether there is a basis for restraining a firm of lawyers from acting against a former client due to conflict with the continuing duty of confidentiality was expressed in the following terms by Ipp J in Mallesons Stephen Jaques v KPMG Peat Marwick (1991) 4 WAR 357:
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- I conclude that if by a solicitor acting for a new client there is a real and sensible possibility that his interest in advancing the case of the new client might conflict with his duty to keep information given to him by the former client confidential or to refrain from using that information to the detriment of the former client, then an injunction will lie (362).
- See also Newman [60] - [63].
11 In Newman, Steytler J (as he then was) also accepted what was said by Lord Millett in Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 22. In particular, his Lordship said:
Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so, there is no risk that the information will come into the possession of those now acting for the other party (237).
The present application
12 The applicant relies on those statements of principle and submits that by reason of having formerly acted for the applicant, Lavan Legal is in possession of confidential information. The applicant says that this information may be relevant in the SAT proceedings. It is said to follow from this that the respondent bears the burden of showing that there is no risk that the information will be used in breach of the duty to maintain its confidence.
13 The respondent submits that there is no risk that confidential information will be disclosed or misused. It is said that there is no issue in the SAT proceedings as to the ownership, location or approved use of the caretaker's residence. The approval by the Town of Port Hedland to build the residence is said to be an accepted fact in the SAT proceedings. Furthermore, it is said that there will be no issue raised as to the validity of the planning approval.
14 In order to confirm this position the respondent and its solicitors Lavan Legal tendered written undertakings to this court that the planning approval will not be challenged in the SAT proceedings. On behalf of Lavan Legal an undertaking was also given that a freedom of information application to the Town of Port Hedland will be withdrawn. The relevance of this is that an application under the Freedom of Information Act was made to the Town of Port Hedland to obtain documents relating to the planning approval. The reason given for that application was to
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- establish relevant background facts, not to challenge the planning decision. It is said to be consistent with the approval not being in issue that the Freedom of Information Act application will not be pursued.
15 It is necessary to assess the reality of any risk to a breach of the duty of confidentiality in light of those undertakings. It is important in considering whether a risk exists to take into account the matters in issue in the SAT. It is not enough to show that the land of the applicant is close to that of the respondent and that the use of the applicant's land may be an issue, it must be evident that the confidential information possessed by Lavan Legal is potentially relevant in the SAT proceedings. If it is, then questions as to whether the respondent has met the burden referred to in Bolkiah would arise.
16 I have carefully read the affidavits in this matter. In particular, I refer to the affidavit of Simon James Rushton sworn on 16 May 2012 filed on behalf of the applicant. Mr Rushton is General Manager - Commercial of the Mineral Resources Ltd group of companies, which includes the applicant. At par 17 Mr Rushton states:
The action that Lavan Legal acted on our behalf, being to challenge the Town of Port Hedland's decision to refuse PMI's application for approval for the construction of a caretaker's residence, is a directly relevant issue in the proceedings between the plaintiff and the defendant in SAT, namely whether the defendant's conduct in storing ammonia nitrate in close proximity to the plaintiff's caretaker residence thereby puts at risk the staff of the plaintiff. It is this basis upon which the plaintiff applies to review the decision under the Dangerous Goods Safety Act that gave permission to the defendant to store ammonia nitrate on the defendant's site.
17 In my view it does not follow that because the proximity of the caretaker's residence to the respondent's explosives store is relevant, the preceding events that led to the residence being built in that location will also be relevant. Indeed, in light of the undertakings, it is clear that the challenge to the original planning decision that led to approval being granted for the building of the residence is not relevant to the matter presently in issue in the SAT.
18 I refer also to what Mr Rushton goes on to say at par 19. He states:
I verily believe that in the course of giving instructions to Lavan Legal during the negotiations and settlement with the Town of Port Hedland in respect of lot 842 (in which Wellard Properties Pty Ltd was the client of Lavan Legal) and the subsequent appeal to the SAT of the Town of Port Hedland's decision relating to the construction of the caretaker's dwelling on lot 842 (in which PMI was the client of Lavan Legal) it is likely that
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- Lavan Legal gained knowledge of confidential information that would be adverse to the interests of the plaintiff if revealed to the defendant and utilised in the conduct of the proceedings in the State Administrative Tribunal.
19 This statement is vague and contains nothing upon which any conclusion that Lavan Legal has information relevant to the SAT proceedings could be based. It is not possible to draw any conclusion from a statement in an affidavit to the effect that relevant information is 'likely' to have been obtained by a former solicitor, no such information or the nature of it having been identified in that affidavit. The statement is conclusionary and provides no evidence as to the nature or content of any information provided.
20 That being so, I am unable on the available evidence to reach a conclusion that Lavan Legal is in possession of confidential information of the applicant which is or may be relevant in the SAT proceedings. As such, the burden does not shift to the respondent or its solicitors to show that there is no risk of confidential information being misused. I am not satisfied that the applicant has established that there is a serious question to be tried and this application must therefore be refused: Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57, 82 [65] (Gummow & Hayne JJ).
21 It is strictly unnecessary for me to consider the balance of convenience. I would only note that if there was a risk of misuse of confidential information, it would rarely be the case that the balance of convenience would justify not granting an injunction. The potential adverse consequences of a breach of duty would weigh heavily in the balance in that regard.
22 For those reasons, the application was dismissed.
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