Royston and Royston
[2010] FMCAfam 9
•12 January 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROYSTON & ROYSTON | [2010] FMCAfam 9 |
| FAMILY LAW – Legal practitioners – conflict of interest. |
| Family Law Act 1975 (Cth), ss.75, 79 |
| Gitane & Velacruz (No. 2) [2007] FamCA 635 Rakusen v Ellis Munday and Clarke (1912) 1 CH 831 Thevenaz and Thevanaz (1986) FLC 91-748 MacDonald Estate v. Martin [1990] 3 S.C.R. 1235 (Canada) Yunghanns & Ors v ELFIC Unrep. Supreme Court of Victoria, 3 July 1998 |
| Applicant: | MS ROYSTON |
| Respondent: | MR ROYSTON |
| File Number: | LNC 455 of 2009 |
| Judgment of: | Roberts FM |
| Hearing date: | 18 December 2009 |
| Date of Last Submission: | 18 December 2009 |
| Delivered at: | Launceston |
| Delivered on: | 12 January 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr P McVeity |
| Solicitors for the Applicant: | McVeity & Associates |
| Counsel for the Respondent: | Mr M Brett |
| Solicitors for the Respondent: | Bartletts |
ORDERS
That Bartletts, Barristers, Solicitors & Conveyancers of Burnie in Tasmania and Christopher John Bartlett, principal of that firm, be and are hereby restrained from acting further for the Respondent husband in these proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Royston & Royston is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT LAUNCESTON |
LNC 455 of 2009
| MS ROYSTON |
Applicant
And
| MR ROYSTON |
Respondent
REASONS FOR JUDGMENT
The applicant is MS ROYSTON (“the wife”) and the respondent is MR ROYSTON (“the husband”).
The wife seeks injunctive orders to restrain Bartletts, a firm of lawyers (“the law firm”) and the principal of that firm, Mr Christopher Bartlett (“the husband’s solicitor”), from continuing to act for the husband in relation to an application for property settlement that she filed on
21 July 2009.
When the wife filed her property settlement application, she also filed an affidavit which said at paragraph 5:
I have been obliged to bring this application as (the husband) has to date instructed our family solicitor, (the law firm)…… which, in my view, constitutes a conflict of interest as we both have had a long standing relationship with (the law firm). I have been unable to commence any negotiations with (the husband) or his legal representative. If (the law firm) go on the record as acting for (the husband) then I have instructed my solicitor to file an interim application restraining (the law firm) from acting on his behalf.
The husband’s solicitor continued to act for the husband and on
7 October 2009 the wife filed an amended application seeking the injunctive relief to which I have already referred.
The matter was heard on 18 December 2009. There was no cross-examination at that hearing
The applicable law
The Court clearly has discretion to grant the relief sought by the wife if it is found to be justified in the circumstances.
It is also clear that English cases decided in the early part of the last century took a narrower approach than is now accepted in family law in Australia. Dessau J summarised the two different approaches in paragraph 10 of Gitane & Velacruz (No. 2)[1], when she said:
Traditionally, there were two lines of authority in cases about a solicitor’s conflict of interest, one following Rakusen v Ellis Munday and Clarke (1912) 1 CH 831, the other following Thevenaz and Thevenaz (1986) FLC 91-748. Rakusen provided for a narrow approach, whereby the court would only intervene to restrain a solicitor if convinced that real mischief and real prejudice would follow if the solicitor were allowed to continue to act. Frederico J’s decision in Thevenaz encapsulated the broader approach, with a restraint where the risks were “more theoretical than practical”, emphasising that it was of the utmost importance that justice should not only be done but should also appear to be done.
[1] [2007] FamCA 635
The clear acceptance of the wider approach in Australian family law matters as adopted by Frederico J in Thevenaz can be seen from the decision of the Full Court of the Family Court of Australia in McMillan and McMillan.[2] In that case the Full Court[3] approved a passage from a minority judgment of Cory J of the Supreme Court of Canada in MacDonald Estate v. Martin.[4] Part of that passage reads as follows:
Lawyers are an integral and vitally important part of our system of justice. It is they who prepare and put their clients' cases before courts and tribunals. In preparing for the hearing of a contentious matter, a client will often be required to reveal to the lawyer retained highly confidential information. The client's most secret devices and desires, the client's most frightening fears will often, of necessity, be revealed. The client must be secure in the knowledge that the lawyer will neither disclose nor take advantage of these revelations.
Our judicial system could not operate if this were not the case. It cannot function properly if doubt or suspicion exists in the mind of the public that the confidential information disclosed by a client to a lawyer might be revealed.
[2] (2000) FLC 93-048
[3] Finn, Kay and Moore JJ
[4] [1990] 3 S.C.R. 1235
At paragraph 64 of McMillan the Full Court clearly recognised that there are “particular sensitivities” in family law matters.
The potential conflicts of interest
Counsel for the husband, Mr Brett, correctly submitted that in this matter there are four instances where conflicts of interest are alleged. I detail them below.
The husband's workers compensation claim
In 1994 or 1995 the husband instructed the husband’s solicitor in relation to injuries that he suffered at work. The husband’s solicitor, in his first affidavit, describes that as “a traditional common law action in respect of which the husband sought damages for past, present and future losses” and he conceded that the wife came to his office on occasions and provided him with information. In my opinion, it does not matter whether the wife attended every attendance by the husband at the husband’s solicitor's office, as claimed by the wife, or whether it was only “from time to time” as stated by the husband’s solicitor. What is clearly accepted by both the wife and the husband’s solicitor is that she attended his office on a number of occasions and provided him with information.
It was the wife's evidence that she was asked to provide to the husband’s solicitor intimate details of her marriage to the husband and this is referred to further below.
Counsel for the husband submitted that as no solicitor/client relationship existed between the husband’s solicitor and the wife in those circumstances, any claim to confidentiality reposes in the husband as the client, and not in the wife as a witness.
Advice given to the wife about possible claim against the husband’s employer
In her affidavit filed 7 October 2009 the wife says:
(The husband’s solicitor) and I had discussed the possibility that I would make a claim against (the husband)’s employer for the pain and suffering I had endured and the care arrangements I had put in place for (the husband) as a result of his accident. I supplied him with personal information and details.
In response to that in his affidavit filed 18 November 2009 the husband’s solicitor said:
I acknowledge that I may have orally given advice to (the wife) to the effect that she had no rights or cause of action against the husband's employer at a meeting(s) at which (the husband) was present.
In a later affidavit the husband’s solicitor said:
Reflecting on this issue, (the wife) may have asked me whether she had a claim or right of action against (the husband's) employer and my response could only have been that she had no claim or right of action because there did not exist any right of action that could have been pursued for her, whether for workers compensation or damages at that time as the law then stood.
Counsel for the husband submitted that no confidential information had been provided.
The wife’s own workers compensation action
In her affidavit filed 7 October 2009 the wife said that the husband’s solicitor represented her in a workers compensation matter that she had in or about 2003. In his affidavit filed 18 November 2009, the husband’s solicitor said:
In or about 2002 I gave (the wife) some brief advice about unpaid weekly workers compensation payments from her employer, a local hospital. The dispute was resolved by an exchange of letters with the insurer in or about November 2002. The insurer …… paid the legal costs and the arrears of weekly payments of compensation. Whilst providing the advice to (the wife), I did not receive any confidential information bearing on the issues in the Application by (her) for a property settlement. The file relating to her workers compensation is still held in storage.
In his affidavit filed 17 December 2009 the husband’s solicitor said:
3. I have checked the documents relating to (the wife)’s workers compensation matter. ……
4. My records show the advice given to (the wife) was brief. Her injury was a physical injury, not one involving stress or other matters affecting her mental state as she might now wish to assert.
Counsel for the husband conceded that a solicitor/client relationship had existed between the husband’s solicitor and the wife in relation to that matter.
The wife’s wish to have contact with a grandchild
The wife stated in her first affidavit that she had provided information to, and received legal advice from an employee of the law firm “in relation to a contact dispute I had regarding a grandchild of mine”.
In response, the husband’s solicitor deposed that he had had no involvement in the receipt of those instructions or the giving of any advice. He stated that the employee had since left his employment and he had not spoken to her about the advice given. He added:
In respect of the information on the file that is still held by my office in storage, my firm did not receive any confidential information bearing on the issues in the Application by (the wife) for a property settlement.
Counsel for the husband conceded that a solicitor/client relationship had existed between the law firm and the wife in relation to that matter also.
Discussion
Counsel for the wife submitted that the principles espoused in authorities such as Thevenaz, McMillan and Gitane make it very clear that neither the husband’s solicitor nor the law firm can continue acting for the husband in this matter.
On the other hand, counsel for the husband submitted that the wife seeks to draw a link between matters that have no relevance to the matter currently before this Court. He referred me to paragraph 56 of McMillan and to the quoted passage from an unreported 1997 decision of Stewart, where Lindenmayer J had said:
All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that that information may be used against her, or at least to her disadvantage, in these current proceedings.
Counsel for the husband emphasised the words “not unreasonably” in that passage and submitted that it is not reasonable for the wife to believe that any information provided by her to the husband’s solicitor or the law firm could be used to her disadvantage in these proceedings.
Some Australian legal professional bodies suggest to their members that a cautious approach should be adopted when the interests of former clients are involved, especially in family law matters. For example, the Law Institute of Victoria website states:
In the family law context, lawyers must be sensitive to the common law's lowered threshold for finding a conflict of interest. The Courts do not ask whether there is an actual conflict established … but whether there is a perceived conflict.
This is a much easier test to satisfy, so where family law is involved, a firm will be more easily prevented from acting in a later matter.
It also states:
For the purpose of finding a conflict, confidential information does not need to be cold hard facts. Intangible information about a client is sometimes enough.
In relation to the “intangible information” that a lawyer may know about a former client, Duncan Holmes[5] suggested the following in a recent presentation entitled “Family Lawyers & Conflict of Interest”: [6]
I would speculate that even knowing the attributes or “personality” of a former client could be construed as a breach of confidential information, if one was then to attempt to act for his/her spouse. Think about it, for a moment. For example, what if you know nothing more than that the former client is an anxious or a nervous type of person, possibly unable to cope with stress. Would it make you more likely to want to cross examine him? Would you think it in your new client’s interests to take the matter to trial? And so, the breadth of the concept of confidential information really knows no significant boundary.
[5] Partner in charge of the Family Law Division of Slade Manwaring, Solicitors, Sydney.
[6] November 2009 release of “Sound Education in Family Law” by Television Education Network. Emphasis by Duncan Holmes.
While that may initially appear to stretch the boundaries of what is generally accepted as “confidential information”, I note that Duncan Holmes went on to quote from an unreported decision of Gillard J in the Supreme Court of Victoria as follows:
… the relationship between solicitor and client may be such that the solicitor learns a great deal about his client, his strengths, his weaknesses, his honesty or lack thereof, his reaction to crisis, pressure or tension, his attitude to litigation and settling cases and his tactics. These are factors which I would call the “getting to know you” factors. The overall opinion formed by a solicitor of his client as a result of his contact may in the circumstances amount to confidential information that should not be disclosed or used against the client.[7]
[7] Yunghanns & Ors v ELFIC (unreported, 3 July 1998) referred to on the Law Institute of Victoria website under “Ethics”.
Conclusion
Taken individually, each of the four areas of potential conflict of interest referred to between paragraphs 11 and 23 above provides sufficient grounds for the wife to properly object to the husband’s solicitors acting for him in relation to her application for a property settlement. The provisions of sections 79 and 75of the Family Law Act 1975 (“the Act”) are wide ranging in scope and it is clear to me that the husband's solicitors could very easily have acquired confidential information from the wife, particularly in light of the broad scope of that term, as referred to above. Clearly, that now places the husband’s lawyer and the law firm in positions of conflict in relation to the wife’s application currently before the Court.
By way of example, I refer to what the wife said in paragraph 3 of her affidavit filed on 27 November 2009:
… I provided details to (the husband’s solicitor) of the impact that my husband's injuries had on me and our marriage. We talked about these matters on a few occasions. I remember these conversations well as I was embarrassed. We spoke about the impact (my husband's) injury had on our sexual relationship, the extra burden I had to bear because (my husband) was addicted to methadone and the extra responsibilities I had to take on at home as (my husband) was unable to look after himself and spent a majority of his time sleeping. We spoke of the emotional impact (my husband's) injury had on me. I believe I provided him with a lot of personal information about not only our marriage but also about myself.
The husband’s solicitor specifically referred to that paragraph in his affidavit filed 17 December 2009 but did not deny that such information had been provided to him. I therefore accept that it was provided to him, and it is very clear, for example, that much of what the wife says in that particular paragraph relates directly to subsection 79(4) contributions that she may claim to have made.
I also note that cumulatively the four areas of potential conflict of interest provide strong grounds for the wife to object to the husband’s solicitor or the law firm continuing to act for him.
Given what I have said above, it is inevitable that the husband’s solicitors must cease acting for him without delay. I therefore propose to make an injunctive order of the type sought by the wife.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date: