Ravech v Amerena
[2000] VSC 483
•21 November 2000
| SUPREME COURT OF VICTORIA | |
| PRACTICE COURT | Not Restricted |
No. 7161 of 2000
| JONATHAN GRAHAM RAVECH | Plaintiff |
| v. | |
| JOSEPH ANTHONY AMERENA | Defendant |
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JUDGE: | BEACH, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 14 NOVEMBER 2000 | |
DATE OF JUDGMENT: | 21 NOVEMBER 2000 | |
CASE MAY BE CITED AS: | RAVECH v. AMERENA | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 483 | |
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CATCHWORDS: Legal Practitioner – Conflict of interest – Application to restrain solicitor acting in litigation against former client – Application refused.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr. I.D. Martindale | Fetter Gdanski |
| For the Defendant | Mr. J.D. Mattin | Sam Abrahams |
HIS HONOUR:
This is the return of a summons filed on behalf of the defendant Joseph Anthony Amerena whereby the defendant seeks an order that the firm of solicitors Fetter Gdanski be restrained from continuing to act for the plaintiff in relation to this proceeding.
The background to the application may be summarised as follows.
The plaintiff's son Mark Ian Ravech is a solicitor.
In either late 1994 or early 1995 he commenced employment with Oakley Thompson & Co. and remained with that firm until he commenced employment with Fetter Gdanski in August 1999.
The plaintiff is a pharmacist. In August 1995 he and the defendant agreed to become partners in a retail pharmacy business at 36 Edwardes Street, Reservoir and a photographic processing and retail store at 32A Edwardes Street, Reservoir.
The plaintiff instructed his son to prepare an appropriate partnership agreement. At that time the only contact Mr. Ravech junior had with the defendant was through his father. In the circumstances I do not consider it can be said that Mr. Ravech junior acted on behalf of the defendant so far as the preparation of the partnership agreement was concerned.
However, at about that same time he did act for the defendant in relation to the purchase of another pharmacy business at 273 Spring Street, Reservoir.
In 1998 Mr. Ravech acted for the plaintiff, the defendant, a company called Artillah Pty. Ltd. and two other persons in relation to a guarantee facility agreement they were to enter into with Fauldings, a supplier of stock to pharmacies. However, the evidence is that on that occasion the defendant obtained independent legal advice concerning the guarantee from his present solicitor Mr. Zelman Abrahams.
Finally in this connection Mr. Ravech acted for the plaintiff and the defendant in relation to a lease of business premises.
By May 2000 the relationship between the plaintiff and the defendant had deteriorated to such an extent that the plaintiff determined to terminate the partnership.
On 4 July 2000 the plaintiff caused a notice of his intention to terminate the partnership to be served on the defendant. At about that same time he instructed his son who had then moved to Fetter Gdanski to act for him.
There were then negotiations between Fetter Gdanski and the defendant's solicitor Mr. Abrahams with respect to the termination of the partnership. However, agreement was unable to be reached by the parties and on 12 October 2000 the plaintiff caused the writ in this proceeding whereby he sought (inter alia) a declaration that the partnership was dissolved on 4 July 2000 and that a receiver and manager be appointed for the purpose of winding up the partnership, to be filed in the Court.
The proceeding came before me in the Practice Court on 20 October.
By consent of the parties I ordered (inter alia) that a receiver and manager be appointed for the purpose of winding up the business of the firm of Ravech & Amerena.
The most recent authority of this Court relating to conflict of interest is the decision of the Court of Appeal in McVeigh and Another v. Linen House Pty. Ltd. and Others[1]. At p.398 Batt, J.A. said:
"The authorities establish that a court will restrain a solicitor from acting for a litigant not only in order to prevent disclosure of confidences of a client or former client, but also to ensure that the solicitor's duty of loyalty to the former client is respected, notwithstanding termination of the retainer, and to uphold as a matter of public policy the special relationship of solicitor and client. Thus in Wan v. McDonald (1992) 33 FCR 491 at 512-13 Burchett J. said:
'The emphasis in the judgments was placed on the solicitor's duty to safeguard confidential information of his client, but there are at least two other aspects of the problem to which attention has more recently been drawn: a solicitor's duty of loyalty, which cannot be treated as extinguished by the mere termination of the period of his retainer, and the important consideration of public policy which gives a special quality to the relationship of solicitor and client that the law will not generally permit to be stained by the appearance of disloyalty.
It is obvious that, at least in the application of these principles to particular circumstances, there is likely to be a great difference between cases such as Rakusen and D & J Constructions, on the one hand, and cases, on the other, where the one solicitor, having acted for both parties, seeks to act against one of his former clients, and in the interest of a preferred client, in litigation arising out of the very matter in which he himself acted for both. In my opinion, it could only be in a rare and very special case of this latter kind that a solicitor could properly be permitted to act against his former client, whether or not any real question of the use of confidential information could arise. As Gummow J. said in National Mutual Holdings Pty. Ltd. v. Sentry Group (1989) 22 FCR 209 at 228-229: '(E)ven among fiduciaries, solicitors stand in a special position.' Sir Owen Dixon explained why all professional persons stand, in a sense, in such a position in Jesting Pilate p.192, a passage quoted by Dr. Finn in the paper already cited, when he wrote: 'Unless high standards of conduct are maintained … the trust and confidence of the very community that is to be served is lost and thus the function itself of the profession is frustrated'.' "
[1](1999) 3 V.R. 394
In the present case there is no evidence that on the occasions on which Mr. Ravech acted for the defendant, the defendant divulged or conveyed confidential information to Mr. Ravech. Can it be said then that if Mr. Ravech continues to act for his father, and the evidence is that he will not, that some other member of Fetter Gdanski will, there is the risk that a reasonably informed observer would consider that Mr. Ravech was acting in breach of the duty of loyalty he may have owed to the defendant or that his behaviour would be subversive to the appearance that justice is being done.
Having considered the circumstances surrounding the matter I am of the opinion that the answer to the questions posed are No.
In his affidavit sworn 3 November 2000 Mr. Abrahams has said:
"20.I am informed by the Defendant and verily believe that the Plaintiff at all material times was a non working partner and the Defendant the working partner. A dispute has arisen between them as to the amount which the Defendant is entitled to be paid as proper remuneration for his work during the term of the partnership. Second, there is an issue concerning the true nature of the loan account in the name of the Defendant which I am informed by the Defendant, and verily believe, comprises his drawings in lieu of salary. In addition there are a number of other disputes concerning the division of the partnership assets which are likely to be brought before this Honourable Court by the Receiver who has now been appointed.
21.MR who has had dealings for and on behalf of the Defendant during the past five years may have acquired knowledge of the Defendant's possible demeanour in the witness stand, his financial position and other matters which may be confidential. The Defendant is apprehensive of such matters being used unfairly against him in the conduct of these proceedings. The fact that Mr. Ravech is not a partner in the firm does not assuage these apprehensions and, despite assurances that MR would not be involved in this matter, it appears that he maintains some involvement in the matter."
In relation to the content of paragraph 20 the following matters must be born in mind:
1.Mr. Ravech did not act for the defendant in preparing the partnership agreement but for his father. Further Mr. Ravech did not have any personal contact with the defendant at that time.
2.Mr. Ravech would have no knowledge of any dispute between the plaintiff and the defendant concerning the remuneration now claimed by the defendant or the true nature of the loan account in the name of the defendant other than what his father told him.
3.The receiver has appointed his own solicitors to act for him and to advise him in the conduct of the receivership.
As to the content of paragraph 21, there is no evidence from the defendant himself that the plaintiff has acquired any such knowledge, indeed the inference from what evidence there is in relation to the matter, is that he has not.
The summons filed by the defendant on 3 November is dismissed with costs to be taxed and paid by the defendant.
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