Sanderson and Sanderson

[2016] FamCA 1126

FAMILY COURT OF AUSTRALIA

SANDERSON & SANDERSON [2016] FamCA 1126

FAMILY LAW – PRACTICE AND PROCEDURE – application for restraint

APPLICANT: Mr Sanderson

RESPONDENT:	Ms Sanderson
INDEPENDENT CHILDREN’S LAWYER	Ms Ferreira

FILE NUMBER: NCC 1455 of 2015

DATE DELIVERED: 9 December 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Gill J

HEARING DATE: 9 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd

SOLICITOR FOR THE APPLICANT: Carson & Associates

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT:	Barkus Doolan
SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:	Legal Aid NSW, Gosford

Orders

1. The husband’s application for restraint is refused.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sanderson & Sanderson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: NCC 1455 of 2015

Mr Sanderson

Applicant

And

Ms Sanderson

Respondent

EX-TEMPORE REASONS FOR JUDGMENT

1. This matter involves an Application for the restraint of the solicitors for the husband in these proceedings.  Those solicitors have at some stages provided legal services to the company which is the centre of the current proceedings.  That company, Company A, is a company of which both the husband and wife are shareholders and directors. 

2. Company A appears at this early stage of the proceedings to potentially constitute the most significant item of property in the marriage.  It is the source of ongoing payments to each of the parties and appears to have been the source of much of the parties’ wealth. 

3. The wife seeks to restrain the husband’s solicitor from continuing to act in the family law proceedings and identifies three reasons that a restraint ought be given. 

4. These are firstly, that there has been a breach of a duty of confidentiality, secondly, that there has been a breach of fiduciary duty and thirdly, that there has been unfair conduct in the blending of accounts for advice given to the company for company purposes and advice given to the husband for family law purposes. 

5. Dealing firstly with the issue of the blending of the accounts - this does not appear to disclose a relevant conflict of interest such as to result in the necessity to restrain the solicitors from appearing for the husband in the family law proceedings.  It may subsequently be a matter that involves adjustment of property interests if it is made out at the final hearing of the matter, but is not a matter that requires restraint.

6. Secondly, as to the duty of confidentiality, for reasons that have emerged in the exchange with Mr Batey of counsel it appears that the complaint made is that there is a duty of confidentiality such that the dealings of the husband’s solicitor with the company are not matters that should be brought to his attention even though he is a director of that company.  It was posed in argument that an example of such a duty of confidentiality could be the wife’s consultation with the company to seek information, being a consultation that she wished to be kept confidential.  It was, however, conceded that even such approaches to the company will be matters for which the company did not owe a duty of confidentiality such as to mean that the company could withhold that information from the husband.  Absent such a duty of confidentiality on the company and failure to identify a corresponding duty of confidentiality on the part of the solicitors for the company, no clash in the duties of confidentiality appears to arise.

7. As to the third matter - this was ultimately the assertion of a potential breach of fiduciary duty on the part of the husband’s solicitors in their acting for the company.  This involved a hypothetical assertion that they may be in possession of information from the husband that they were required to use in respect of the company but are unable to do so without breaching their duty to the husband.  Mr Batey, in his carefully argued submissions, conceded that at present that was a matter for suspicion only.  Absent further information about the scope of retainer of the solicitors in respect of the advice that they have given to the company, it remains no more than a mere suspicion at this point and not enough to justify a restraint of those solicitors from appearing for the husband on the basis of a conflict of interest.  I should note that in any event, the company is not as yet a party to the litigation.  Much of the case law which deals with restraint in relation to conflict deals with restraint because of a solicitor’s interaction with multiple parties within the litigation.  Given that I am at present unable to see a relevant conflict of interest in respect of the advice given to the company and that even if there were, it is unclear whether, given the company is not a party to the litigation, the appropriate remedy would be a restraint of the solicitors of the husband from continuing to act for the husband, I refuse to grant the restraint sought.

I certify that the preceding seven (7) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 9 December 2016.

Associate: 

Date:  23 December 2016