Radin, Michael v Commonwealth Bank of Australia

[1997] FCA 172

NOT FOR GENERAL DISTRIBUTION
                 NO QUESTION OF PRINCIPLE

IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION                 )

No NG 437 of 1996
         BETWEEN:

MICHAEL RADIN
  Applicant

AND:

COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)
  Respondent

CORAM:Lindgren J

PLACE:Sydney

DATE:17 March 1997

REASONS FOR JUDGMENT
  (ex tempore)
INTRODUCTION
There is before the Court a motion brought by the applicant by notice of motion filed in Court by leave this morning.  The notice of motion seeks the following relief.

"1.The Notice of Motion be returned instanter.

2.An order that the 1st Respondent be restrained from continuing to retain Mr John Sackar QC as its Counsel in the proceedings.

3.An order that Mr John Sackar, QC be joined as a party to the proceedings for the purposes of the orders sought in this Notice of Motion.

4.An order that Mr John Sackar QC be restrained from continuing to appear for the 1st Respondent in the proceedings."

The motion is supported by an affidavit of Michael Radin, the applicant, sworn today, 17 March ("Mr Radin's affidavit"). 
Today is currently fixed as the first day of the hearing of that proceeding and of certain associated proceedings NG 984 and 985 of 1995.  In NG 984 of 1995, Mr Radin's mother, Vladimirka Radin, and in NG 985 of 1995 his former wife, Judith Radin, also seek relief against the respondent ("the Bank").  The orders sought in the notice of motion wrongly refer to the Bank as "the first respondent": the Bank is the only respondent.   The hearing of the three proceedings was to commence last Monday, 10 March but I ordered that the first week be vacated.  I delivered reasons for the partial vacation last Tuesday 11 March.  I incorporate those Reasons for Judgment in these present Reasons in order to save repeating the account of the background facts.

I made the first order in the notice of motion this morning and argument has proceeded in relation to order number 3.  A question was raised as to whether I should hear the motion in so far as to orders 2 and 4.   It is said that evidence might emerge in relation to orders 2 and 4 which would create a situation in which I would or might be disqualified from hearing the trial.  However, counsel for Mr Radin made it clear that my reading of the affidavit and documentary evidence relied upon by Mr Radin for the purposes of orders 1 and 3 would not be said to support a submission that I should disqualify myself.

BACKGROUND TO PRESENT MOTION - PROCEEDING NO 2498 OF 1990 IN THE EQUITY DIVISION OF THE SUPREME COURT OF NEW SOUTH WALES
In order to understand the background to the present motion, it is necessary to go back a little in history to a proceeding in the Equity Division of the Supreme Court of New South Wales, number 2498 of 1990, between Adrian Kalinic as plaintiff and Josiph Drvodelic as defendant ("the Equity proceeding").  Without any discourtesy I shall refer to them as "Adrian" and "Josiph".

In his affidavit in support of the motion, Mr Radin says that he was the solicitor for Adrian in the Equity proceeding and that Josiph was her former de facto husband.  That proceeding was resolved by the making of certain orders by consent on 3 July 1990, but Josiph subsequently moved for an order setting aside the consent orders, in the course of which he made serious allegations against Mr Radin.

It is not necessary for me to go into much detail.  According to Josiph's affidavit, he was faced with a demand for payment of a sum in the order of $1 million and he consulted Mr Radin saying that he did not want to lose his assets.  The asset of major concern appears to have been a house at 30 Seaforth Crescent, Seaforth ("the Property").  Josiph alleged that Mr Radin made a suggestion as a result of which a sham arrangement was entered into between Josiph and Adrian.  According to Josiph, the objective was to procure the making of an order pursuant to the De Facto Relationships Act 1984
(NSW) for an adjustment of interests in the Property, so that instead of Josiph being the sole owner, it would be owned by him and Adrian equally.  That result was achieved in the form of the consent orders to which I have already referred.

On his motion to set aside those consent orders, Josiph alleged that it had been agreed orally that Adrian would transfer back to him, Josiph, the interest in the Property which was to be vested in her as a result of the orders.  There is annexed to Mr Radin's affidavit a copy of an affidavit dated 25 September 1991 of Josiph which was sworn in support of that motion, and a copy of an affidavit of Mr Radin sworn 10 February 1992, in support of Adrian's opposition to the motion, in which he (Mr Radin) denied any impropriety.

On Josiph's motion to set aside, Mr Radin on behalf of his client, Adrian, briefed Mr J R Sackar QC and Mr M Cashion of counsel to oppose the motion.  According to Mr Radin's affidavit he had two conferences with Mr Sackar in the course of which certain conversations took place.  The first conversation attributed by Mr Radin to Mr Sackar is as follows:

"There are serious allegations made against you.  If those allegations are proven it may very well go to your fitness to continue to practice as a Solicitor and your professional standing.  You don't want this going before the Court as it may well end up before the Law Society.  In my view you must keep this away from the Law Society.  I recommend the matter be settled."

According to Mr Radin's affidavit, he replied, informing Mr Sackar that he had already received "a complaint from the Law Society filed in the Legal Professional Disciplinary Tribunal setting out the various complaints against [him]."  He said that he did not want to have any more complaints made against him.  He says that he did not show Mr Sackar "the complaint" but gave him "some detail of the complaints which had been made against [him]" and described the nature of the allegations as follows:

"One of the complaints is that I have overcharged.  Another is that I wilfully contradicted the clients instructions, another is unethical conduct, a further complaint refers to breaches under the Workers' Compensation Act 1987.  Also there is a complaint regarding failure to properly account."

Mr Radin's affidavit goes on to refer to the fact that Mr John Coombs QC was briefed to appear for Josiph on the motion.  The affidavit says that Mr Sackar QC had meetings with Mr Coombs QC, in particular on 18 June 1992 when the motion for an order setting aside was itself settled.  According to Mr Radin's affidavit, during that day Mr Sackar said to him:

"I have just been speaking to Coombs.  I don't think we should run this matter.  Coombs has got a lot of very serious stuff on you.  If it's true then you can come in for very severe criticism.  It's a matter of who is believed.  I suggest that this matter be settled." (underlining supplied)

The statement "It's a matter of who is believed" refers to a conflict between Mr Radin and Josiph.  According to the
affidavit, Mr Radin responded by asking what sort of things Mr Coombs was referring to, and Mr Sackar replied:

"I have just spoken to Coombs and Drvodelic is going to make some further very serious allegations against you.  I can't say much more at the moment about it." 

I infer from this that Mr Coombs informed Mr Sackar that Josiph was going to make some further allegations which had not previously surfaced against Mr Radin in relation to the dispute with Adrian and the alleged sham transaction.

In the course of time, a receiver was appointed to Mr Radin's practice and Mr Radin was struck off the roll of solicitors by order of Spender J in proceeding SC11854 of 1994 in the Supreme Court of New South Wales.  There is an appeal pending (CA40546 of 1995) against the striking off order.  

It is common ground that the allegations made by Josiph against Mr Radin in connection with Josiph's motion in the Equity proceeding have never formed part of the grounds of complaint relied on by the Law Society before the Legal Profession Disciplinary Tribunal or before Spender J.

BACKGROUND TO THE PRESENT MOTION - RECENT EVENTS
The foregoing brief account enables me to come forward to the present proceeding.  On 14 February 1997 Mr Radin's solicitors, Milicevic Solicitors, wrote to the solicitors for the Bank, Abbott Tout.  They referred to the allegations which had been made by Josiph in the Equity proceeding.  They asserted that Mr Sackar, QC who is briefed as senior counsel for the Bank, was "privy to confidential information provided to him by Mr Radin."  (It may be noted in passing that what has emerged as the critical issue is the information which was conveyed to Mr Sackar by Mr Coombs.)  In their letter, Milicevic Solicitors expressed the view that a conflict of interest existed and they objected to Mr Sackar QC's appearing for the Bank.

Milicevic again wrote to Abbott Tout on 18 February 1997, purporting to give an outline of the matters which Mr Radin claimed he had "covered" with Mr Sackar in conference "pertaining to his Law Society matter".  However, what followed was simply a list of the nine grounds of complaint copied verbatim from the Law Society's amended consolidated complaint against Mr Radin.  To be contrasted with this is the account in Mr Radin's affidavit (to which I referred earlier) of what he says he told Mr Sackar.  The letter asserted that Mr Sackar's client in the present proceeding, the Bank, would be placed in a position of advantage, vis-a-vis, Mr Radin.

Abbott Tout replied on 19 February advising that they had consulted with both Mr Sackar, QC and with Mr Cashion who, it will be recalled, has been Mr Sackar's junior in the Equity proceeding.  The letter asserted that neither Mr Sackar or Mr Cashion believed that the matters referred to in the letter
had been discussed in conference.

By a letter to Mr P G Hely QC, a senior member of the Bar Council, dated 4 March 1997, Mr Sackar sought a ruling.  Mr Hely, by letter dated 4 March 1997 to Mr Sackar, referred to Bar Rules 103 to 107 as reinforcing the general law obligation of a barrister not to use or disclose information imparted in confidence for a purpose other than that for which the information was originally supplied.  Mr Hely's ruling was that on the basis of the facts as disclosed in Mr Sackar's letter, Mr Sackar was not obliged in terms of Rule 107 or any other Rule of the New South Wales Bar Association to return the brief.  Mr Hely concluded by stating that if Mr Radin wished to dispute the facts as had been recounted by Mr Sackar, or otherwise to assert that Mr Sackar was in some way precluded from acting against Mr Radin, Mr Radin's remedy (if any) was to be found in resort to the court rather than by way of complaint to the Bar Association.  Of course Mr Hely was, as his letter makes clear, confined to dealing with the matter on the basis of Mr Sackar's version of the facts and without having Mr Radin's version before him.

On Thursday 6 March 1997 the Bar Association wrote to Milicevic Solicitors.  The letter was faxed to them on that date.  The letter referred to previous correspondence and enclosed a copy of Mr Sackar's letter of 4 March to Mr Hely and Mr Hely's ruling dated 4 March.  
It should be noted that the striking off of Mr Radin as a solicitor features in the current proceeding.  One element of Mr Radin's claim is that his being struck off and the collapse of his practice arose from the conduct of the Bank for which the Bank is liable to pay him damages.  One element in his claim is that he would not have been struck off by reason only of these aspects of his conduct on which Spender J relied over and above trust account defaults (on which his Honour also relied).

REASONING
The Court's power to add a party is found in O 6 r 8 of the Federal Court Rules which is, relevantly, as follows:

"8(1)Where a person who is not a party -

(a)ought to have been joined as a party; or

(b)is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon,

the Court, on application by him or by any party or of its own motion, may order that he be added as a party and make orders for the further conduct of the proceeding".

The Bank is the respondent to the motion and it opposes the making of order 3 (the order that Mr Sackar be joined as second respondent for the purpose only of the injunctive relief specified in paras 2 and 4 of the notice of motion).  There are, broadly, three grounds of opposition.  First it is said that there has been delay by the applicant in the bringing of the motion.  I think that this is correct and that the delay is not explained.  It is a discretionary factor which goes against Mr Radin but I would not dismiss the motion on the ground of delay without more.  However, there is more. It is necessary to appreciate the circumstances surrounding the delay.

Mr Sackar QC appeared for the Bank on 26 February 1997, 6 March 1997, 10 March 1997 and 11 March 1997 in connection with interlocutory steps in the current proceeding.  On some of those occasions Mr Sackar cross examined Mr Radin.  At no time was the present motion foreshadowed.

The hearing on 26 February was of a motion by Mr Radin for a vacation of the hearing dates.  The hearing on 6, 10 and 11 March was of a second application by Mr Radin for vacation of the hearing dates.  I refused those applications.  Mr Radin applied to the Duty Judge, Tamberlin J, last Thursday 13 March for leave to appeal from the latter decision and leave was refused.  The notice of motion presently before the Court was served by facsimile as late as about 8.50 am this morning.  While it is true, as Mr McVay of counsel for Mr Radin says, that he and his instructing solicitor have been busily occupied seeking a vacation of the hearing dates, it remains astonishing that although Abbott Tout had advised Mr Radin's solicitors on 19 February of the stance which was being taken in relation to Mr Sackar, and although the New South Wales Bar
Association advised by facsimile on 6 March of Mr Hely's ruling, there was no attempt to file a notice of motion until the commencement of the hearing this morning, 17 March.  The delay accompanied by these circumstances militates against an exercise of discretion in favour of Mr Radin.

The second ground relied upon by the Bank is that there is no common issue between the facts alleged against Mr Sackar and those alleged in the proceeding itself.  The third ground is that it would be futile to join Mr Sackar because, on the existing evidence, the motion for the injunctive relief against him would be doomed to fail.  I find it convenient to deal with these two grounds together. 

There are in evidence Bar Rules 103-107.  Relevantly, Bar Rule 103 is as follows:

"A barrister must not disclose (except as compelled by law) or use in any way in the course of practice confidential information obtained by the barrister concerning any person ... "

Bar Rule 107 is as follows:

"A barrister who has accepted a brief must return the brief as soon as possible after the barrister becomes aware that the barrister has information confidential to a person other than the client which may, as a real possibility, be helpful to the client's case or to the advancement of the client's interests, being information which the barrister is prohibited from disclosing or using by Rules 103, 104 or 106, [Rules 104 and 106 are not presently relevant] unless the person entitled to the
confidentiality consents to the barrister disclosing or using the information as the barrister thinks fit."

It is clear on the basis of Mr Radin's affidavit that in the course of the Equity proceeding, Mr Sackar QC obtained information which was confidential.  It seems that there is nothing in the first conversation to which I referred which might support, even arguably, the case for joining Mr Sackar since what Mr Radin told Mr Sackar of the complaints made by the Law Society has, no doubt, been far exceeded by the detail of the Law Society's complaints which has long since been in the public domain as a result of the proceeding before Spender J.

The information which seems to me to be critical is that which was conveyed by Mr Coombs.  I turn to paragraph 15 of Mr Radin's affidavit in which the conversation with Mr Coombs is referred to.  It will be recalled that according to the affidavit Mr Sackar QC obtained information from Mr Coombs about some further very serious allegations which were going to be made against Mr Michael Radin in relation to the Adrian/Josiph dispute.  There may be a question under the general law as to the identity of the person to whom Mr Sackar had an obligation to keep confidential whatever it was that Mr Coombs told him.  This has not been the subject of any detailed argument before me.  It is clear that Mr Sackar came by the information in the course of, and by reason of, his appearing for Adrian in opposition to Josiph's motion.  It is at least arguable that the duty which was undoubtedly incumbent on Mr Sackar to keep confidential that which he was told by Mr Coombs and to use it only for the purpose of serving the interests of his client, Adrian, in the Equity proceeding, was a duty owed to Adrian and not to her solicitor, Mr Radin.  There is no evidence before me that Adrian objects to Mr Sackar's using in the current proceeding whatever information was conveyed to him by Mr Coombs.  Be this as it may, the parties have argued the matter by reference to the Bar Rules to which I have referred.  Those Rules speak of "confidential information obtained by [a] barrister concerning any person" (underlining supplied).  Mr Sackar obtained confidential information "concerning" Mr Radin.

I have concluded that it is not shown, by the evidence before me, that there will be any breach of any general law duty or any contravention of the Bar Rules by Mr Sackar's continuing to represent the Bank.  The particular transaction and litigation between Adrian and Josiph did not form part of the Law Society proceeding for striking off.  It does not feature at all in the pleadings or particulars in the present case.  It has not been suggested that it is referred to in any affidavit filed in this proceeding or that any documents relating to it have been discovered by either party in this proceeding.  Mr Marshall of counsel who appears for the Bank on the present motion (and as junior to Mr Sackar QC on the substantive proceeding), has said that the Bank will not be
relying upon the matter at all.  I take it from this that Mr Sackar, who, of course, is not represented at present (not being a respondent to the motion), will not be cross-examining in relation to the transaction.

It was put by Mr McVay, in effect, that Mr Sackar would have an obligation to his present client, the Bank, to use whatever information he obtained in the course of the Equity proceeding, but in my view this is not so.  Although it is theoretically possible, no doubt, for Mr Sackar to make use of confidential information which he has obtained, I do not think that it is shown that there is a "real possibility" that he may do so, even subconsciously, in the course of the current proceeding.  It may be that what Mr Coombs told Mr Sackar convinced him that Josiph's version of events on the Adrian/Josiph matter was likely to be accepted by the Court hearing Josiph's motion to set aside.  It may be that what Mr Coombs told Mr Sackar caused him to have a low opinion of Mr Radin as a practising solicitor.  But these matters do not create a situation in which the information "may, as a real possibility, be helpful to the [Bank's] case or to the advancement of the [Bank's] interests."

There are some similarities between the facts of the present case and those of Complete Technology Pty Limited v Toshiba (Australia) Pty Limited (1994) 53 FCR 125 (Hill J) but there are also differences. In that case, Hill J said (at 135):

"Should a situation arise where it appears that use is to be made of witness statements [filed in either of two earlier proceedings], then consideration can be given to whether injunctive relief should, in the absence of leave of the Court, be granted.  At the moment there is not the slightest shred of evidence to suggest that any person proposes to use the witness statements."

Subject to the making of the necessary adaptations, these observations are applicable to the circumstances of the present motion.

Accordingly, I accept the Bank's submission that on the basis of the evidence before me, it would be futile to permit the joinder of Mr Sackar.

CONCLUSION
It seems to me that for all the foregoing reasons the appropriate exercise of discretion on the motion is to dismiss it with costs.

[There followed discussion as to whether it was appropriate that the motion be dismissed in relation to Orders (2) and (4) which had not been pressed or debated.  His Honour said that he had included paras (2) and (4) in the dismissal only because they were rendered otiose by the dismissal of the motion to join Mr Sackar.  His Honour said that he had not intended to decide finally and on the merits, the issues raised by paras (2) and (4), and, in particular, had not intended that Mr Radin be precluded from commencing a separate proceeding against the Bank and Mr Sackar seeking the relief specified in paras (2) and (4).

Subsequently, both counsel seemed to agree that since Mr Radin had not moved on paras (2) and (4), the appropriate course was not to dismiss the motion in so far as it related to those paragraphs.

Mr McVay of counsel also asked that it be noted that he had not intended to submit, and believed that he had not submitted, that Mr Sackar would be under a duty to the Bank to use for its benefit in this proceeding any useful confidential information acquired from Mr Coombs.  Rather, he said that he had intended to submit, and believed that he had submitted, that Mr Sackar would in fact use or be likely to use such information in the interests of the Bank subconsciously.]

I revoke the order dismissing the motion in so far as it relates to paras 2 and 4.  Accordingly, the order of the Court becomes an order that the motion be dismissed in so far as it seeks the relief referred to in para (3) of the notice of motion filed on 17 March 1997, with costs.

I certify that this and the preceding 15 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated:19 March 1997

Heard:          17 March 1997

Place:          Sydney

Decision:       17 March 1997

Appearances:     Mr G J McVay of counsel instructed by Milicevic, solicitors, appeared for the applicant (in the proceeding and on the motion).

Mr J E Marshall and Mr R S Hollo of counsel instructed by Abbott Tout, solicitors, appeared for the respondent (in the proceeding and on the motion).