Redden and Pennington
[2017] FCCA 194
•16 February 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| REDDEN & PENNINGTON | [2017] FCCA 194 |
| Catchwords: FAMILY LAW – Parenting proceedings – application to restrain firm of solicitors from acting for one party – parties previously engaged in acrimonious and lengthy proceedings in the Family Court regarding property and children – proceedings finalised in early 2013 by judgment – wife recommences children’s proceedings in late 2015 – wife’s former solicitor has joined firm which husband’s solicitor has also joined – does wife’s former solicitor have confidential information relevant to wife – what is risk of prejudice to wife inherent jurisdiction of the court to manage its processes – interests of the administration of justice – matters to be considered. |
| Legislation: Family Law Act 1975, ss.4(1)(e), 11F, 114(1), 117(1), 117(2) Federal Circuit Court Rules 2001, rr.1.05(2), 21.02(2) |
| Cases cited: Kalinicos v Hunt (2005) 64 NSWLR 561 Osferatu & Osferatu [2015] FAmCAFC 177 Mintel International v Mintel (Aust) (2000) 181 ALR 78 Mallesons Stephen Jacques v KPMG Peat Marwick (1990) 4 WAR 357 Grant v Downs (1976) 135 CLR 674 Baker v Campbell (1983) 153 CLR 52 Carindale Country Club Estate v Astill (1993) 42 FCR 307 Mintel International v Mintel (Aust) (2000) 181 ALR 78 Magro & Magro (1989) FLC 92-005 Mancini v Mancini [1999] NSWSC 800 Prince Jeffri Bolkiah v KPMG (A Firm) [1999] 2 AC 222 Naczek & Dowler [2011] FamCA 179 D & J Constructions Pty Ltd v Head & Ors trading as Clayton Utz (1987) 9 NSWLR 119 Thevenaz & Thevenaz (1986) FLC 91-749 Kossatz & Kossatz (1993) FLC 92,386 In re A firm of Solicitors [1991] 1 QB 959 McMillan & McMillan (2000) FLC 93,048 Holborrow v McDonald Rudder [2002] WASC 265 |
| Applicant: | MS REDDEN |
| Respondent: | MR PENNINGTON |
| File Number: | ADC 1511 of 2011 |
| Judgment of: | Judge Brown |
| Hearing date: | 31 January 2017 |
| Date of Last Submission: | 31 January 2017 |
| Delivered at: | Adelaide |
| Delivered on: | 16 February 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Dickson |
| Solicitors for the Applicant: | Jacqui Ion Lawyers Pty Ltd |
| Counsel for the Respondent: | Mr Hemsley |
| Solicitors for the Respondent: | Norman Waterhouse Lawyers |
ORDERS
The application filed 9 August 2016 be dismissed.
The wife pay the husband’s costs fixed in the sum of $2,000.00.
Further consideration of this matter is adjourned to 28 March 2017 at 9:30am.
IT IS NOTED that publication of this judgment under the pseudonym Redden & Pennington is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 1511 of 2011
| MS REDDEN |
Applicant
And
| MR PENNINGTON |
Respondent
REASONS FOR JUDGMENT
Introduction
Like everything else, in this day and age, members of the legal profession are in a state of flux and constant change. Careers are advanced and opportunities sought. Partnerships are formed and dissolved. Over time, junior members of the profession become seasoned veterans of it. Older members seek well deserved retirement and pass their practices on to others.
In this way, the legal profession renews and refreshes itself. The practice of family law is no different. Against this background of shifting loyalties and changing legal identities, the interests and sensibilities of family law clients must be managed. Necessarily, given the inherent stresses of family law litigation, this must be approached sensitively but also realistically.
Ms Redden “the wife” and Mr Pennington “the husband” are the parents of three children – X, born (omitted) 2002; and twins, Y and Z, born (omitted) 2005. The parties married on (omitted) 1993 and finally separated, on 4 February 2011.
On 21 April 2011, the wife first commenced proceedings, in the Federal Magistrates Court (as this court was then known), at Adelaide, seeking final orders in respect of arrangements for the parenting of the three children and the division of the parties’ marital property.
The application in question indicated that it had been prepared by Jane Elizabeth Royle Fox, then of the law firm Robinson & Mason Pty Ltd of Pirie Street, Adelaide. It is common ground that Ms Janine Mason was the principal partner of this firm and Ms Fox was her employee.
The husband responded to this application on 27 May 2011. His response indicated that it had been prepared by Timothy Stephen Adey of the law firm Adey Lawyers of Gawler Place, Adelaide. Again, it is common ground that Mr Adey and his wife, Ms Nia Adey were the principal partners of this firm.
Ms Mason has sold her practice to another firm of solicitors, Norman Waterhouse, which practices at Pirie Street, Adelaide. As chance would have it, at a different time, Mr and Ms Adey also sold their practice to the same firm, Norman Waterhouse.
Ms Mason has a son, also a legal practitioner, Mr Christopher Mason. Mr Mason was a law clerk at Robinson & Mason. He is now a solicitor in the employ of Norman Waterhouse. I do not know what direct involvement he has ever had with Ms Redden.
Both Mr Adey and Ms Mason continue to have a professional relationship with Norman Waterhouse. Accordingly, individuals or entities, relating to each of the parties, in previous family law litigation, are now encompassed within the same firm.
The wife is now represented by another solicitor, Ms Jacqui Ion, who practices in Kent Town. Ms Fox is currently an employed solicitor of Ms Ion. Ms Redden has commenced a fresh round of proceedings against the husband in respect of parenting issues utilising Ms Ion’s firm. The husband has consulted Mr Adey at Norman Waterhouse in respect of this application.
Against this background, Ms Redden wishes the court to restrain Mr Adey from acting on the husband’s behalf in the more recent proceedings. These reasons for judgment are directed at resolving this complex and emotive issue, so far as the parties are concerned.
Background to the proceedings
At the outset of the initial proceedings, the wife’s position was that the children should live mainly with her and the parties assets be divided 60/40 percent in her favour. The husband sought a week about equal time regime for the care of the children and an equal division of property. The respective financial statements filed, at this stage, indicated that neither party could be regarded as being a person of unusual wealth. Both were employed, as (occupations omitted) in the (omitted) industry.
The case was allocated to the docket of FM Cole (as his Honour then was). At an early stage, it became apparent to all concerned that the parties’ relationship with one another was extremely difficult. In July 2011, Family Consultant Ms T wrote as follows, in an advice to court:
“Both parties spent much of the conference being argumentative with each other. It was difficult at times for the family consultant to keep them focussed on the issues at hand. … This matter will continue to be a difficult one for some time. Neither party is prepared to concede very much and both seem more intent on having their analysis of any given situation involving the children being accepted as the ‘right’ one than they are in actually looking at what is best for the children.”[1]
[1] See Family Consultant brief advice to court dated 22 July 2011
Ms T’s view was prescient. The various documents, filed by each of the parties in the period since, now occupy six files and two cardboard boxes. Needless to say, the parties continue to have great difficulty agreeing about anything. In this context, the effluxion of time seems to have had little emolliating effect.
On 12 December 2011, Cole FM appointed an independent children’s lawyer to safeguard the interests of the children concerned. The parties instructed Ms R to prepare a family assessment report which did not recommend an equal time regime.
On 13 February 2012, Cole FM transferred the proceedings to the Family Court on the basis that the matter was estimated, by the parties’ lawyers, to need between five and six days to accommodate a final hearing. At the time, this was beyond the capacity of the Federal Magistrates Court to accommodate.
As a consequence, the parties’ competing applications were listed before Dawe J, for a five day trial, on 18 June 2012. On 21 June 2012, after three full days of evidence, the parties reached an agreement, in respect of children’s issues. However the property aspect of the proceedings continued, being adjourned for completion to 15 & 16 August 2012. Dawe J delivered judgment, in respect of the property proceedings, on 1 March 2013.
The consent order, made on 21 June 2012, in respect of the children, envisaged, X, Z and Y living with their mother and spending five nights per fortnight with their father. The parties were conferred with equal shared parental responsibility for the children.
In the period, up to judgment, each of the parties filed numerous documents which indicated they were prepared by Ms Fox so far as the wife was concerned; and by Mr Adey, so far as the husband was concerned. For the trial, each party retained counsel, in the wife’s case, Ms Dickson; and in the husband’s case, Mr McQuade.
On 12 November 2012, following the completion of the trial, but prior to judgment, the wife filed a fresh address for service, which indicated that her address for service was David Burrell & Co, solicitors of Walkerville. The notice of address for service was prepared by Ms Fox. I assume that Ms Fox had changed her employment from Robinson & Mason and Ms Redden’s file had moved with her.
Her Honour’s judgment of 1 March 2013 envisaged the wife transferring her interest, in the former matrimonial home at Property T, to the husband, in consideration of receiving a sum slightly in excess of $500,000.00. The sum was to be paid within thirty days. Failing payment, the property was to be sold.
There was no lessening of tension, between the parties, following the delivery of the property judgment by Dawe J. On 20 May 2013, Ms Redden felt compelled to issue an application seeking enforcement of the property orders by way of having an agent appointed to effect the sale of the former matrimonial home and a registrar of the court appointed to execute all necessary documents.
At the time, it was her position that the husband was being recalcitrant in respect of his obligations under the relevant orders and was behaving aggressively towards her. She consulted Ms Fox, at Mr Burrell’s office to prepare the necessary application and affidavit on her behalf.
Ultimately, the issue was resolved by way of a further consent order, which was made on 5 June 2013 by Dawe J. Mr Adey appeared on Mr Pennington’s behalf in respect of the agreement reached regarding the required mechanisms to effect the sale of the property concerned. However, it was not necessary for Mr Adey to file any documents.
The next event of any legal moment, so far as the filing of legal proceedings between the parties is concerned, occurred on 29 January 2014, when the wife applied to dissolve the marriage between the parties. This application was dealt with on its first return date, in the husband’s absence. It was not opposed. The divorce between the parties became effective on 18 April 2014.
The current proceedings
The wife commenced the current round of proceedings on 14 December 2015. On my calculations, this is approximately three and a half years after the parenting proceedings between the parties, had been concluded by the consent order made by Dawe J.
In her application, Ms Redden sought to have sole parental responsibility for the children, conferred on her and for the father’s time, with the children to be reduced to four nights per fortnight. Significantly, she also sought injunctions restraining the father from attending at the children’s respective schools and at their sporting and extracurricular activities.
The wife deposed a lengthy affidavit in support of her application. Both the initiating application and the wife’s affidavit indicated that they had been prepared by Ms Ion. Apparently (but I may be mistaken) this was before Ms Fox had commenced her employment with her firm.
In her affidavit, Ms Redden alleged that Mr Pennington had been behaving in an erratic and aggressive manner, which was injurious to the children’s psychological wellbeing. In particular, she alleged that the husband had been behaving in an intrusive and inappropriate manner, at the children’s sporting events and had been banned from school sporting events, at (omitted) Primary and from attending at X’s (hobby omitted).
The application was made returnable on 7 March 2016. It was served on the husband personally on 20 January 2016. On the first return date, the wife was represented by her previous barrister, Ms Dickson; whilst the husband appeared in person.
By 7 March 2016, Mr Pennington had not formally responded to the application. In these circumstances, no substantive orders were made. Rather, the proceedings were adjourned to 6 April 2016, for interim hearing, and, in the meantime, Mr Pennington was directed to file answering documents.
The parties themselves were also directed to attend a family dispute resolution conference, pursuant to section 11F of the Family Law Act 1975, primarily to see if it was possible for them to reach some agreement to resolve the issue of how the husband could attend at the children’s extramural activities without conflict and disputation.
Mr Pennington did not attend the child dispute conference. Nor did he file any responding documents. In addition, he did not appear at court on 6 April 2016. In all these circumstances, Ms Redden sought that her application be finalised on an undefended basis.
Pursuant to the provisions of rule 13.03B of the Federal Circuit Court Rules 2001, the court has authority to give judgment, if it is satisfied that a party has failed to take a necessary step in the proceedings concerned or has not defended them with due diligence.
In the circumstances of this case, at that stage, I was persuaded that I should exercise my discretion to enter a summary judgment in Ms Redden’s favour. I reached this conclusion primarily because Mr Pennington had been present in court when the order for him to file material had been made and the case adjourned. He had not attended the conference. The formal order in question indicated that it had been sent to Mr Pennington’s home address.
No explanation had been proffered in respect of the missed conference. The order had not been returned undelivered or unclaimed. Given the size of the court file before me, it seemed a reasonable inference that Mr Pennington had some familiarity with the court’s processes and had decided, for reasons unclear to me, to withdraw from the proceedings commenced by his former wife.
Ms Redden sought her costs of the proceedings. An order for costs was made in her favour in the sum of $3,754.00 plus $800.00 in disbursements. I was persuaded that it was appropriate to make such an order in the circumstances prevailing at the time.
From the wife’s perspective, the husband did not abide by the orders made by the court on 6 April 2016. Accordingly, on 2 June 2016, she filed a contravention application alleging various breaches of the order relating to the husband’s involvement or lack thereof in the extracurricular activities of the children.
On 23 June 2016 the husband filed an application, in which he sought the reinstatement of the earlier orders of 21 June 2012. In his supporting affidavit, he asserted that he had believed that he could attend the family dispute resolution conference, scheduled on 7 March 2016, by telephone and so had not personally attended at court in the mistaken belief the court would telephone him.
He also asserted that he had misunderstood the court’s order in respect of the requirement for him to file answering documents and the adjourned date. In support of his assertion that he had misunderstood his obligations, he asserted that his father had been very ill of late, which had added a significant level of stress to his life, which may have resulted in him becoming confused.
He refuted any suggestion that he had previously misbehaved at any of the children’s sporting events and was anything other than a well-motivated and interested parent. Mr Pennington’s application and supporting affidavit were prepared by Mr Adey, who is described as special counsel, at Norman Waterhouse.
The wife filed a further contravention application on 25 July 2016, alleging further contraventions of the ex-parte orders of April 2016, which the husband had applied to set aside. Again, the contraventions related to the children’s extramural activities, particularly Y’s attendance at (hobby omitted) and matters relating to Z’s (hobby omitted).
Yet more alleged contraventions were filed, by Ms Redden, on 6 October 2016. Again, the subject matter of the alleged contraventions related to the children’s extracurricular activities. On 19 September 2016, Mr Adey filed a notice of intention to withdraw from the proceedings.
However, for reasons which are unclear to me, he has not followed through with that intention. Rather he has filed a fresh notice of acting. In the meantime, the parties have been ad idem that, before anything is done about the substantive applications, the issue of Mr Adey’s ongoing involvement in the case needs to be resolved.
The wife’s case for Mr Adey to be restrained from acting
In her application, filed on 9 August 2016, Ms Redden seeks the following orders:
“That the husband be restrained and an injunction granted restraining him from instructing Norman Waterhouse Lawyers as his solicitors in any matter between the mother and father including but not limited to the current proceedings.
That Norman Waterhouse Lawyers be restrained and an injunction granted restraining the firm from representing the father in any matter between the mother and the father including but not limited to the current proceedings.
That the father pay the costs of and incidental to the application on an indemnity costs basis.”
The wife’s concedes that Ms Fox was her principle solicitor, between 3 June 2010 and the end of October 2012, whilst Ms Fox was employed by Ms Mason. However, it is her position that, during this period, Ms Mason undertook work on her file on many occasions, particularly when Ms Fox was away from the office due to illness, leave or other commitments. As such, it is Ms Redden’s position that Ms Mason had a good understanding of her matter. In addition, Ms Redden asserts that Ms Fox informed her, from time to time, that she had consulted Ms Mason about her file and sought guidance from her (Ms Mason) about it.
Ms Redden has attached to her affidavit of 9 August 2016 copies of correspondence, relating to her file, whilst she retained Robinson & Mason, which ostensibly originated with Ms Mason rather than from Ms Fox. Much of this correspondence has been subject to redaction, so I am unable to determine its content. It also includes routine matters such as a letter to Adey’s enclosing subpoenae for service which Ms Mason has signed on Ms Fox’s behalf; other non-contentious correspondence relating to subpoenae and the cost of witnesses.
In her affidavit, Ms Redden deposes as follows:
“… the litigation between the father and I (sic) was protracted and I was frequently in contact with Robinson & Mason. During such time, in addition to the confidential information that I imparted to the firm, as a result of their dealings with me, I consider that both Ms Fox and Ms Mason gained significant insight into my personality, my strengths and weaknesses as well as very personal information.”[2]
[2] See wife’s affidavit filed 9 August 2016 at paragraph 30
As indicated earlier, Ms Fox left Ms Mason’s employ in October of 2012, following the compromise of the children’s proceedings but prior to judgment being delivered in the property aspect of the case. During this period, it is Ms Redden’s case that she consulted Ms Mason exclusively in respect of her concerns that Mr Pennington was in breach of the children’s orders.
In this context, she instructed Ms Mason to write to Mr Adey about her concerns that the husband behaved aggressively towards her in the presence of the children. Ms Mason indicated that it was her client’s intention to commence contravention proceedings against the husband. These did not eventuate.
The last piece of correspondence emanating from Ms Mason to Ms Redden, in respect of her family law file, is dated 1 November 2012. Around this time, Ms Mason ceased to practice as the principal of Robinson & Mason and moved to Norman Waterhouse, where she was described as a senior consultant.
As indicated above, Ms Fox, as an employee of Burrell & Co, was the solicitor on the record when Dawe J delivered the property judgment. In addition, it was Ms Fox, who was instructed by Ms Redden to institute the enforcement proceedings in respect of the issues relating to the transfer of the former matrimonial home.
It is Ms Redden’s assertion that Ms Mason worked extensively with her, in her matrimonial proceedings against Mr Pennington, not only when Ms Fox was her principal solicitor but afterwards. As Mr Adey and Ms Mason are now both employed by Norman Waterhouse, it is her view that there is a clear conflict of interest in Mr Adey being able to act for Mr Pennington in the current proceedings. In support of this assertion, Ms Redden asserts as follows:
“In addition, as set out above, Ms Mason also has a broader knowledge of my personality, strengths and weaknesses which are also relevant to the conduct of any litigation and/or negotiations.
As such, Ms Mason is in possession of confidential information that is directly relevant to the current proceedings.
Ms Mason now of Norman Waterhouse has personally communicated as my solicitor with Mr Adey on behalf of Adey Lawyers as the father’s solicitor. The father now seeks to be represented by Norman Waterhouse.”[3]
[3] See wife’s affidavit filed 9 August 2016 at [67] – [69]
The husband’s case for Mr Adey to continue to be retained
In his response filed on 17 November 2016, the husband seeks the dismissal of the wife’s application to restrain Mr Adey from acting for him and an order that the wife pay his costs of the application. It is his position that he has full confidence in Mr Adey and wishes him to act on his behalf.
It is further his position that it is now many years since Ms Redden was in a professional relationship with Ms Mason and, as a consequence, it is not possible that Ms Mason retains any confidential information which is relevant to the current proceedings.
In the course of correspondence passing between Ms Ion and Norman Waterhouse, Mr Adey has asserted that he has not discussed any matter to do with Ms Redden with Ms Mason and, in any event, Mr Adey is of the view that the earlier proceedings have historical significance only and no direct bearing on the current proceedings.
Notwithstanding this assertion, Ms Mason has provided an undertaking to the court, dated 9 November 2016, in the following terms:
“I undertake not to discuss any aspect of Ms Redden’s family law matters, including but not limited to historical and current proceedings in relation to the same, at any time with the applicant’s solicitor, Mr Timothy Stephen Adey, or any other person in the employ of Norman Waterhouse.”[4]
[4] See Undertaking of Ms Janine Mason filed 10 November 2016
It is the husband’s assertion that this undertaking, when considered in the context of the matter generally, should assuage the wife’s personal concerns and not offend the sensibilities of any reasonable and well-informed bystander.
The legal principles applicable
The practice and procedure of this court are principally governed by the Federal Circuit Court Rules 2001. Pursuant to Rule 1.05(2), if those rules are insufficient the court is authorised to apply the Family Law Rules2004, as necessary, in any matter coming before it.
In the context of these proceedings, it is appropriate that this court apply rule 8.03 of the Family Law Rules 2004, which reads as follows:
“A lawyer acting for a party in a case must not act in the case for any other party who has a conflicting interest.”
Pursuant to section 114(1) of the Family Law Act 1975, the court is authorised to make any injunction, which it considers proper, in respect of proceedings before it, which relate to a matrimonial cause. I am satisfied that the parties’ current competing applications falls within the rubric of matrimonial cause.[5]
[5] See definition of matrimonial cause contained in section 4(1)(e) of the Family Law Act 1975
Accordingly, it is clear that the court has jurisdiction to grant an injunction of the kind sought by Ms Redden. In general terms, the authority to make such an injunction arises in any one of the following situations:
·a solicitor acting for one party holds confidential information, relating to the other party, creating competing fiduciary obligations in the solicitor, which are irreconcilable;
·the court has jurisdiction to protect the confidences of a former client of a solicitor, provided prior to the termination of the solicitor’s retainer, in circumstances where the solicitor concerned has been retained, by another person, for subsequent litigation involving the former client;
·the court has authority to restrain a solicitor from acting in a particular case, as an incident of its inherent jurisdiction to control its processes and provide oversight of its officers, in aid of the administration of justice.[6]
[6] See Kalinicos v Hunt (2005) 64 NSWLR 561 at 582 [76] per Brereton J
The first two situations are directed to remedying specific forms of prejudice to an individual arising from his or her relationship with a legal practitioner. The third situation is more nebulous and turns on perceptions of what is proper in legal relationships. In Osferatu & Osferatu the Full Court indicated that this third category may be involved, in conjunction, with the other two, leading to some possible level of overlap.[7]
[7] Osferatu & Osferatu [2015] FAmCAFC 177 at [20]
Ms Redden has not identified, with precision, any confidential material, which she asserts Ms Mason holds, which is therefore possibly accessible by Mr Adey, either directly or inadvertently and which may cause her potential prejudice. It is however her case that Ms Mason holds such information and also has some knowledge of her psychological makeup and other relevant aspects of her temperament, which are likely to give Mr Adey some level of forensic advantage, over her, in these proceedings.
In these circumstances, she invokes the inherent jurisdiction of the court to control the overall integrity of proceedings coming before it. Essentially, it is her position that it is not in the interests of justice that any perception should arise that a solicitor has previously acted for one party is now acting, even indirectly, for another party against that former client.
The authorities indicate that this inherent jurisdiction is to be regarded as exceptional and [as such is] to be exercised with caution. In particular, the court should not overlook the public interest arising from litigants being able to choose the lawyer of their choice, without influence from external factors.[8] The freedom to select a lawyer, without fear of favour, being inherent in the principle of justice being not only done but be seen to be done.
[8] See Kalinicos v Hunt (supra)
The test to be applied, in the application of the inherent jurisdiction concerned, is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice would require 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.
Resolution
The court must consider two discrete but inter-related issues in resolving the parties’ competing applications. Firstly, did Ms Redden release confidential information to Ms Fox and Ms Mason between early 2011 and late 2012, which remains available to Ms Mason and so to Mr Adey, which may, in turn, lead to the firm of Norman Waterhouse possibly breaching its fiduciary duty to Ms Redden, who is a former client of the firm, albeit briefly.
Secondly, does the previous involvement of Norman Waterhouse, with both the applicant and respondent, in the current proceedings before the court, invoke the application of the court’s inherent supervisory jurisdiction over its officers and require the restraint of Mr Adey from acting in the overall interests of justice.
These considerations are discrete and I will approach them as such. However, depending on the circumstances of the case concerned, they have the potential to become interconnected. The first ground has been characterised as being narrow or technical in nature, depending upon the aggrieved person establishing actual prejudice being accorded to him or her, in any subsequent litigation ensuing, involving the legal practitioner sought to be removed.
As such, it is likely to be more amenable to circumstances involving large corporations, which have the potential to be involved in commercially based litigation with a broad range of opponents, on perhaps a constant basis. Such entities are therefore likely to access a broad range of legal services, as will the entities opposed to them.
Necessarily, this has the potential to lead to solicitors and barristers acting for or against entities with which they have previously been involved in earlier litigation. In these circumstances, it has been held that it is necessary to establish a risk of real mischief or prejudice to justify the court’s intervention before a legal practitioner is restrained.[9]
[9] See Mintel International v Mintel (Aust) (2000) 181 ALR 78 at 88 per Heerey J at [44]
The second ground is broader in nature and is likely to be more amenable to family law proceedings which are extremely sensitive in nature and, as a consequence, have the potential to elicit powerful emotional responses from those involved in them. In addition, family law is an area, which invariably involves individuals, who have no or little personal experience of litigation.
In these circumstances, matters of public perception are likely to be more significant in the exercise of a discretionary remedy. As such considerations relating to the appearance of how justice is seen to be done are likely to be germane to the exercise of the discretion.
a)Confidential Information
The relationship between client and solicitor is “one of the most important fiduciary relationships known to the law.”[10] Disclosures made to solicitors, by their clients, are subject to legal professional privilege. It is in the public interest that communications between clients and their solicitor be kept secret, as this encourages clients to “make a full and frank disclosure of the relevant circumstances to the solicitor and, in turn, this has the consequence of “assisting and enhancing the administration of justice”.[11]
[10] See Mallesons Stephen Jacques v KPMG Peat Marwick (1990) 4 WAR 357 at 361
[11] See Grant v Downs (1976) 135 CLR 674 at 685
Deane J in Baker v Campbell[12] identified the principle underlying legal professional privilege as being “that a person should be entitled to seek legal advice without the apprehension of being prejudiced by subsequent disclosures of confidential communications”.
[12] Baker v Campbell (1983) 153 CLR 52 at 115 -116
In Carindale Country Club Estate v Astill[13] Drummond J, in summarising these authorities, said as follows:
“It would be inconsistent for the law to encourage a client to repose confidential information in a solicitor by making those confidences privileged from disclosure without the client’s consent, if the law, on the other hand, were to readily allow the solicitor to act for a new client in a matter adverse to the interests of the old client…”
[13] Carindale Country Club Estate v Astill (1993) 42 FCR 307 at 312
However, there is no general principle that a solicitor is to be forever restrained from acting against a former client, notwithstanding the understandable criticism of lawyers who “change sides”.[14] It is also in the public interest that individuals should be free to retain the solicitor of their preference.
[14] See Mintel International v Mintel (Aust) (2000) 181 ALR 78 at 88 per Heerey J [43]
In Carindale Country Club Drummond J expressed the test to be applied as to whether a solicitor should be restrained from acting against a former client as a consequence of the possible disclosure of information given in confidence in the following terms:
“… the cases all indicate that before a solicitor will be restrained from acting for a new client at the behest of an old client, not only must there be a threat of disclosure of evidence given in confidence, but there must be evidence that such disclosure will be to the former client’s disadvantage.”[15]
[15] See Carindale Country Club Estate v Astill (supra) at 312 - 313
As such, there must be proof of detriment, to the initial client concerned, before the solicitor in question is restrained from acting. In Carindale Country Club it was determined that no such restraint would be applied if the confidential information was remote from the fresh retainer for the new client concerned.
In Mintel Heerey J accepted that it was necessary, for an applicant seeking to restrain a former solicitor from acting, to identify and establish the nature of the confidential information provided. He also accepted that this issue was likely to turn upon the circumstances prevailing, which could include the following:
·the information could not be specified because that, of itself would represent a detrimental disclosure;
·the solicitor concerned may have made notes and observations, which the client concerned had subsequently forgotten;
·during the course of the retainer, the solicitor concerned may have, either directly or even subconsciously, learnt a great deal about the client concerned, particularly in terms of tactics, overall veracity and other potential strengths and weaknesses of his/her character, which may be useful or open to exploitation in subsequent litigation;
·These factors were summarised under the rubric of “getting to know you factors”.
In Magro & Magro, Rourke J was prepared to restrain a firm of solicitor from acting against a former client because there had previously been a lengthy retainer and therefore it was reasonable to infer that the solicitor in question would be:
“…in possession of some privileged material belonging to the wife which could be put to good use by the husband. This might only consist of impressions of the wife’s personality gained after many hours of confidence, which could be exploited by a skilful advocate presented with those impressions.” [16]
[16] See Magro & Magro (1989) FLC 92-005 at 77,191
In the current case, the parties have each been exposed to the metaphorical blow torch of a trial, involving cross examination. In these circumstances, it seems to me that whatever knowledge Ms Mason has gained of Ms Redden’s personality is likely to be of limited utility in any subsequent proceedings, no matter how skilful Mr Pennington’s advocate may be. As a consequence of their long involvement with one another, both during their relationship and afterwards in their acrimonious litigation, each party is likely to be aware of where the pressure points lie in the other’s personality.
In Osferatu the Full Court applied the following passage of Bryson J arising in Mancini v Mancini:
“It is of importance to observe that information generally is not protected; the protection available relates to confidential information, and is available to the person entitled to the confidence…Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of the information. Without specificity a claim for protection cannot be defended or decided on any fair procedural basis…”[17]
[17] Mancini v Mancini [1999] NSWSC 800 referred to Osferatu (supra) at [27]
Mr Hemsley, counsel for the husband places significant reliance on this passage. He submits that the evidence currently available indicates that it was Ms Fox, rather than Ms Mason, who has primarily been Ms Redden’s legal practitioner and the dispute between the parties, in which Ms Mason had what Mr Hemsley would characterise as a tangential involvement is now long concluded.
That dispute played itself out in the public forum of a relatively long trial before Dawe J, in which both parties were cross examined and finding regarding credibility were made. As such, it is likely to be the case that each party knows a great deal about the other and how he or she reacts and behaves in the metaphorical crucible of contested legal proceedings.
Accordingly, against this background, none of the legal practitioners concerned – Ms Mason, Ms Fox, or Mr Adey is likely to have any tactical advantage in respect of alleged insights gained into the temperament or character of either of the parties, as these have been on public display for a significant period of time.
In this context, Mr Hemsley contends that firstly, Ms Redden has not indicated specifically what actual confidential matters, pertaining to her, remain accessible to Ms Mason and secondly, in the context of the parties’ public and very acrimonious dispute, it is difficult to deduce or even intuit what such material could possibly be, particularly given the effluxion of time since Ms Redden and Ms Mason had a professional relationship together.
In conjunction with these assertions, it would appear to be Mr Hemsley’s position that the so-called getting to know you factors cannot now be determinative, given the extent and public nature of the earlier parenting and property proceedings which concluded approximately four years ago. In short, he asserts that it is fanciful to assert that Ms Mason can provide any conceivable level of advantage to Mr Adey, in all these circumstances because of what she knew of Ms Redden around four years ago.
In this context, the Full Court in Osferatu placed significant reliance in what was said by Lord Millett in Prince Jeffri Bolkiah v KPMG (A Firm)[18] regarding issues of confidentiality, which arose in the context of larger legal entities employing multiple solicitors in varying roles. The Full Court accepted the proposition that the risk that confidential material will be disclosed must be real and not merely fanciful and theoretical. At the same time, such risk need not be substantial.
[18] Prince Jeffri Bolkiah v KPMG (A Firm) [1999] 2 AC 222
As with this matter, in the Prince Jeffri case, the risk concerned arose as a consequence of a legal practitioner moving firms. Lord Millett said as follows:
“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. There is no rule of law that Chinese walls or other arrangements of a similar kind are insufficient to eliminate the risk. But the starting point must be that, unless special measures are taken, information moves within a firm.”[19]
[19] Ibid at 237 - 238
In this context, the Full Court has identified three steps to consider:
·Does the firm (or one of its members) have confidential information relevant to the former client concerned?
·What is that information and is it relevant to the new matter in which the firm is proposing to act?
·Is there a risk that it will come into the possession of the individual at the firm proposing to act for the other party?
In Osferatu the Full Court considered that these considerations needed to be balanced against each other in order to assess the degree of risk of confidential information being disclosed and what were the appropriate protective measures.Significantly the Full Court accepted the proposition of Lord Millett in Prince Jeffri that “whether a particular individual is in possession of confidential information is a question of fact which must be proved or inferred from the circumstances of the case…” This onus lies with the person asserting the existence of confidential material.
In this case, I accept that Ms Redden and Ms Mason did have a professional relationship between early 2011 and late 2012. I also accept that Ms Redden is likely to have confided in Ms Mason, in the absence of Ms Fox from time to time and more so after Ms Fox left her employ which was after the settlement of the first round of children’s proceedings and prior to judgment being delivered in the property proceedings.
However, in my assessment, Ms Redden has not discharged the onus on her of establishing either what is the nature of any confidential material currently held by Ms Mason which may potentially cause her prejudice or, more significantly what is the real risk to her, if this material is utilised particularly in the context of the undertaking which has been proffered by Ms Mason to the court.
In the light of the following factors – Ms Mason’s undertaking; the effluxion of time since the professional relationship between her and Ms Redden concluded; the fact that the initial proceedings have concluded; and the uncertain nature of what has been asserted by the applicant as to what information she provided to Ms Mason which is likely to have currency in the present proceedings; – I am not satisfied that there is any real risk of disclosure of confidential information to Mr Adey from Ms Mason.
In particular, in the light of all these factors and given the public and protracted nature of the litigation between the parties; including the fact of judgment in one aspect of the proceedings; I am not persuaded that there is any merit to the submission made by Ms Redden that Ms Mason is likely to have an understanding of how she functions psychologically and tactically, which she will be able to convey to Mr Adey, even inadvertently.
b)Inherent Jurisdiction of the Court
There is no dispute, between the parties, that the court has an inherent jurisdiction to restrain Mr Adey from acting, if it considers that it is appropriate to do so in the interests of justice. The jurisdiction is discretionary in nature. The discretion arises as an incident of the court’s jurisdiction to restrain solicitors from acting in a particular case, as a consequence of its inherent authority over its officers and to control its process, in aid of the administration of justice.
In Naczek & Dowler, the Full Court of the Family Court described the basis of the duty of legal practitioners to the court, which founds the discretion, in the following terms:
“The duty to the court arises from the court’s concern that it should have the assistance of independent legal representation for the litigating parties. Preserving the integrity of the administration of justice, and in the appearance as well as the reality of independence, the duty underpins the court’s practical approach to its supervisory discretion.”[20]
[20] Naczek & Dowler [2011] FamCA 179 at [61]
In Naczek the test to be applied in this inherent jurisdiction is:
“…whether 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.”[21]
[21] Ibid at [62]
As previously indicated, the jurisdiction is to be regarded as exceptional and, as such, to be exercised with due caution. This is because there is also a significant public interest in litigants being able to have the lawyer of their choice and it has the potential to lead to the perception of unfairness if this choice is too readily abrogated.[22]
[22] Ibid at [63] – [64]
It is the submission of Ms Dickson, counsel for the wife, that no reasonable individual would readily accept the prospect of Ms Mason appearing to have swapped sides after having acted, for the wife, in bitterly contested proceedings, with the appearance that she is now acting for the husband or, at the very least, is closely associated with the husband’s solicitor. Ms Dickson would contend that such a prospect is inimical to the overall interests of justice.
On the other hand, it is Mr Hemsley’s submission that any reasonable person, being informed of all the relevant facts, would not be concerned, as he or she would regard the prospect of any improper conduct as being more theoretical than actual.
In this context, the cases are not always easy to reconcile, with each turning on its own particular circumstances. In my view, in terms of the exercise of the discretion, it is largely a case of the court, to a great extent, attempting to interpret its own time and manners in respect of the conduct it would expect from practitioners appearing before it.[23]
[23] See D & J Constructions Pty Ltd v Head & Ors trading as Clayton Utz (1987) 9 NSWLR 119 at 123
In Thevenaz & Thevenaz, Frederico J restrained a solicitor from acting for a party concerned in family law proceedings, where the solicitor’s firm had acted for both parties in several conveyancing transactions, including the purchase of the former matrimonial home, although the solicitor in question had not actually handled the transactions in question. His Honour said as follows:
“It is of the upmost importance that justice should not only be done but be seen to be done. In the circumstances of the present case, there is a risk which may well be theoretical but still exists, that justice might not appear to be done.”[24]
[24] Thevenaz & Thevenaz (1986) FLC 91-749 at 75,447
This is the nub of the submissions of Ms Dickson. She contends that, in matrimonial litigation, as opposed to commercial or other types of matter, the bar is set particularly high in respect of the court’s obligation to scrutinise the previous involvement of legal practitioners, in earlier proceedings or in other affairs of their previous clients, vis-à-vis the involvement of practitioners in subsequent proceedings involving such a former client.
In this context, Ms Dickson places particular weight on what was said by Bryson J in D & J Constructions Pty Ltd v Head & Ors trading as Clayton Utz.[25]In the case reference was made to Thevenaz following which His Honour said as follows:
“That Court took the view that restraint was justified if there is a risk that confidential communications on relevant matters have been made by the party for whom the solicitor has ceased to act, even if the risk is more theoretical than practical. It seems natural that a particularly careful view would be taken in family law business, as such litigation tends to be about highly confidential facts and a very wide range and circumstances can conceivably be relevant; the sensitivity which even the most reasonable of people feel about such litigation when they are engaged in it calls for careful measures to secure that not only justice is done but also that it is apparent that it is done, an appearance which not survive any general impression that lawyers can readily change sides.”
[25] D & J Constructions Pty Ltd (supra) at 123
In D & J Constructions Bryson J also alluded to the efficacy of Chinese Walls and like measures in the following terms:
“I would think that the court would not usually undertake attempts to build walls around information in the office of a partnership, even a very large partnership, by accepting undertakings or imposing injunctions as to who should be concerned in the conduct of litigation or as to whether communications should be made amongst partners of their employees … Enforcement by the court would be extremely difficult and it is not realistic to place reliance on such arrangements in relation to people with opportunities for daily contact over long periods, as wordless communications can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control.”[26]
[26] Ibid at 123
Ms Dickson places significant emphasis on this passage, asserting that any reasonable person would be well alive to the risk of prejudice arising, to her client, by means of metaphorical nods and winks, even of an involuntary nature, passing between colleagues at any law practice, including Norman Waterhouse.
In Kossatz & Kossatz[27] Mullane J referred to an English authority of the Court of Appeal In re A firm of Solicitors in which the relevant test was expressed as follows:
“… where a reasonable man with knowledge of all the facts would say ‘If I were in the positon of the objector I would be concerned that, however unwittingly of innocently, information gained whilst the solicitor was acting for me, might be used against me’, the court should intervene.”[28]
[27] Kossatz & Kossatz (1993) FLC 92,386 at 79,988
[28] In re A firm of Solicitors [1991] 1 QB 959
In Magro Rourke J approved D & J Constructions by making reference to what he described as the peculiar quality of family law litigation. In the case, Rourke J was concerned with what he characterised as bitterly contested property proceedings. I acknowledge that the circumstances pertaining to the parties in the present proceedings are tense, unhappy and contentious and have been for a significant period of time.
As previously indicated, the applicant wife, in Magro, had conferred with the solicitor sought to be restrained in considerable depth, in other contexts, prior to the property proceedings in question being instituted. That solicitor was, at relevant times, in the employ of the solicitors retained by the husband in the current proceedings but was not directly acting for the husband. In her oral evidence to the court, which was characterised as being emotional in nature, the wife had said of this solicitor “he knows my whole life and my past history.”
In my view, the evidence in this case indicates clearly that it was Ms Fox who was Ms Redden’s principle legal adviser during the course of the first set of proceedings. In this context, it is, I think, significant that Ms Redden followed Ms Fox to Burrell & Co, when she sought to enforce the property orders. As such, in my view, no reasonable by stander would readily conclude that Ms Mason remains in a position to know Ms Redden’s whole life. Certainly not Ms Redden’s life now some four years after she and Ms Mason ceased their professional relationship.
In Magro, the injunction sought was granted. Rourke J said as follows:
“…it is the appearance of justice being done which is the determinant, and not the probability. If this be the correct principle the injunctive relief sought in the present proceedings is prima facie irresistible.”[29]
[29] Magro & Magro (supra) at 77,188
The authorities of Thevenaz, D & J Constructions and Magro, as well as several others, were considered and approved by the Full Court in McMillan & McMillan.[30] In the case, the Full Court dismissed an appeal from the wife, against a decision resulting in her solicitor being restrained from acting on her behalf because an unqualified law clerk, who had previously worked for the husband’s solicitor, had moved to work for her firm of solicitors.
[30] McMillan & McMillan (2000) FLC 93,048 at 87,736 [64]
The Full Court said as follows:
“…when regard is had to that authority concerning the confidential position of a solicitor’s clerk, and to principles relevant to restraint of solicitors acting against former clients in the family law area, to the particular sensitivities in that area of the law (as recognised by Bryson J. in D & J Constructions and by Rourke J. in Magro), and to the need to maintain public confidence in the legal system, we have little hesitation in concluding that it was open to Wilczek J. to restrain the wife’s solicitors from acting in the matter on the basis of their employment of Mr Pitts.”
As was recognised by the Full Court in Osferatu, there is invariably an overlap between issues involving the possible use of confidential information and the inherent jurisdiction of the court to control process, particularly in cases where there are ostensible concerns that it would not be appropriate to permit a legal practitioner to continue to act.
In the current matter, for the reasons already provided, I do not consider that Ms Mason continues to have access to any confidential information relating to Ms Redden. The question which remains is whether a reasonable and independent by-stander, appraised of all relevant facts, would be disturbed at the prospect of Norman Waterhouse continuing to act for Mr Pennington. As Bryson J observed, it is a question of appearances.
In these circumstances, the court is directed to weigh the facts and assess the risks in the eye of reality.[31] In my view, Ms Mason had a limited level of involvement with Ms Redden and has had no involvement with her for a period in excess of four years. She and Mr Adey, at different times, have joined the same legal practice. Ms Redden’s principle advisor has joined another practice.
[31] D & J Constructions Pty Ltd (supra) at 123
It is undoubtedly the case that the parties have a very uneasy relationship with one another which has resulted in an extreme level of mistrust between them. It is to be expected that, as with Ms Redden, Mr Pennington wishes to have his preferred and trusted legal adviser, Mr Adey. In these circumstances, the court has been warned to beware of adventitious challenges to an opponent’s legal representation as a means of harassing that opponent.[32]
[32] See Holborrow v McDonald Rudder [2002] WASC 265
In all these circumstances, I do not consider that any reasonable member of the community would be offended by the prospect of Mr Adey continuing to act for Mr Pennington, particularly in the light of the undertaking proffered by Ms Mason to the court.
As a consequence, I do not consider that the court’s discretion to control its processes, in the interests of justice, is engaged in the current matter. To the contrary, I consider that there is a real risk that such a person may well be offended at the prospect of Mr Adey being restrained on spurious grounds. Accordingly, I have reached the conclusion that the application should be dismissed.
Costs
Pursuant to section 117(1) of the Family Law Act 1975, the ordinary rule, in family law proceedings, is that each party should bear his or her own costs. However, pursuant to section 117(2), if the court is of the opinion that there are circumstances that justify it in so doing, the court may make an order for costs as it considers just.
The power to make an order for costs, arising under section 117(2), is subject to a number of considerations which are delineated in section 117(2A). They include the following:
·the financial circumstances of each of the parties concerned;
·whether any of the parties to the proceedings was in receipt of a grant of legal aid;
·the conduct of the parties to the proceedings generally and in respect of procedural matters specifically;
·whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
·whether any party to the proceedings has been wholly unsuccessful in the relevant matter;
·whether an offer has been made to settle the proceedings, in writing;
·any other matter the court considers relevant.
These proceedings have, from their instigation, been vigorously contested. From the perspective of each of the parties, they have involved matters of high principle. As such, neither has been willing to compromise or draw back. Necessarily, there are perils in pushing these types of issues to their ultimate denouement. Brinkmanship is not without its risks.
I have limited knowledge of the financial circumstances of the parties. As I understand matters, neither is in receipt of legal aid. Ms Redden has been unsuccessful in her application. By necessary implication, she rejected Mr Pennington’s proposal to resolve the proceedings on the basis of the undertaking both proffered and tendered by Ms Mason which I have found to be an objectively reasonable prophylactic to the risk of the proper administration of justice being compromised.
These two factors, in my view, justify an award of costs in the husband’s favour. The court has a wide discretion as to the calculation of costs. Pursuant to Rule 21.02(2) of the Federal Circuit Court Rules 2001:
“In making an order for costs in a proceeding, the Court may:
a) set the amount in costs; or
b) set the method by which the costs are to be calculated; or
c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
d) set a time for payment of costs, which maybe before the proceeding is concluded.”
I propose to allow the husband the sum of $2,000.00 by way of costs.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and twenty-nine (129) paragraphs are a true copy of the reasons for judgment of Judge Brown
Date: 16 February 2017
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