SCVG and the Estate of KLD (Deceased)

[2021] FedCFamC1F 8

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

SCVG and the Estate of KLD (Deceased) [2021] FedCFamC1F 8

File number(s):

SYC 4380 of 2008
SYC 5956 of 2016

Judgment of:

GILL J

Date of judgment:

2 September 2021

Catchwords:

FAMILY LAW – INJUNCTIONS – Application to restrain counsel – Restraint in relation to confidential information or the administration of justice – Whether tutor-reader relationship invites an implication as to the sharing of confidential information between barristers – Whether a relevantly informed reasonable person would anticipate a misuse of confidential information in the circumstances – Application dismissed.

FAMILY LAW – PRACTICE AND PROCEDURE – Application to subpoena counsel to testify in relation to alleged misuse of confidential information – Whether subpoena amounts to a “fishing” expedition – Leave to issue subpoena refused.

FAMILY LAW – PRACTICE AND PROCEDURE – Registrar – Review of decision – Whether a financial statement should be ordered in preparation for conciliation conference – Orders made in accordance with Registrar’s orders.  

Legislation:

Family Law Rules 2004 (Cth) r 10.12

Cases cited:

Baumann and Ors & Rushbrooke and Anor [2016] FamCA 905

Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 228 FCR 252

Dyer v Chrysanthou(No 2) (Injunction) [2021] FCA 641

Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475

Nash v Timbercorp Finance Pty Ltd (2019) 137 ACSR 189

Sent v John Fairfax Publication Pty Ltd [2002] VSC 429

Division:

Division 1 First Instance

Number of paragraphs:

38

Date of hearing:

23 August 2021

Place:

Canberra

Solicitor for the Applicant:

Self-representing

Counsel for the Respondent:

Dr Barnett

Solicitor for the Respondent:

Macphillamy’s

ORDERS

SYC 4380 of 2008
SYC 5956 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR SCVG

Applicant

AND:

ESTATE OF MS KLD

Respondent

ORDER MADE BY:	GILL J
DATE OF ORDER:	2 SEPTEMBER 2021

THE COURT ORDERS THAT:

1.On review of the judgment of Registrar Chayna of 19 July 2021, orders are made in accordance with the orders made by Registrar Chayna of 19 July 2021, as follows:

Conciliation Conference

(a)The parties and lawyers on the record attend a Conciliation Conference with a Registrar at 10 am on 19 October 2021.

(b)At least 14 days prior to the Conciliation Conference each party must pay the Conciliation Conference fee in equal shares or obtain an exemption from payment of the fee.

(c)By 12 October 2021 each party is to provide to each other party and to the court a statement of their current proposal for settlement.

(d)It is noted that in the event that the parties fail to comply with the directions for the preparation for the Conciliation Conference, the Conference may be vacated and a further Conference date not be appointed until a Registrar is satisfied that the matter is ready to proceed.

Costs and Miscellaneous

(e)That prior to the Conciliation Conference, each party’s lawyer must give to the Court and each other party written notice of:-

(i)The party’s actual costs, both paid and owing up to and including the Conciliation Conference;

(ii)The estimated future costs of the party up to and including each future court event;

(iii)Any anticipated expenses paid or payable to an expert witness and/or Counsel fees and

(iv)In all financial cases, the written notice must specify the source of funds for the costs paid or to be paid.

(f)The parties file and serve a position paper no later than 4 pm by 5 October 2021.

(g)That the requirement to file a Financial Questionnaire or Balance Sheet be dispensed with.

2.The applicant’s Applications in a Case filed on 27 July 2021 and 16 August 2021 are dismissed and the leave sought therein is otherwise refused.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

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

REASONS FOR JUDGMENT

GILL J

1. The applicant filed Applications in a Case on 27 July and 16 August 2021 seeking orders in relation to three matters. First, the applicant seeks leave to apply for an order which would restrain Mr SS and Mr TT from acting as counsel for the respondent in these proceedings.  Second, the applicant seeks leave to issue subpoenas directing Mr SS, Mr TT and Mr UU to testify.  Third, the applicant seeks judicial review of orders made by Registrar Chayna on 19 July 2021.

2. I have previously made orders restraining the applicant from making further applications in these proceedings without first seeking the leave of the Court to do so (Orders dated 12 February 2021, Order 8).  This order was made in the context of repeated unsuccessful applications by the applicant to amend his pleadings.  The order is intended to strike a balance between the requirements of case management while ensuring that the applicant’s capacity to bring appropriate applications before the Court is not stifled.

3. This context explains the form of the applications, which in relation to the first and second matter are expressed as a request for the leave of the Court to make the application and issue the subpoena.

4. That context also informs the approach to be taken in dealing with these applications. In light of the leave requirement, I raised with the parties that I considered the appropriate way to consider the applications for leave would be akin to the test for summary dismissal. That would require consideration of whether the applications had no reasonable likelihood of success or were frivolous, vexatious or an abuse of process (Family Law Rules 2004 (Cth) r 10.12 (“the Rules”)).  If either limb of this test were satisfied, leave to proceed with the applications would not be granted.  Both parties agreed that this was the appropriate approach to deal with the leave issue.

5. However, to the extent that the previous order may require leave for the applicant to request judicial review of Registrar Chayna’s orders, such leave should automatically be granted due to the nature of the delegation of powers to registrars.

6. It is convenient to first consider the applications to restrain counsel from acting for the respondent and the request to subpoena the aforenamed barristers to testify before the Court.

   THE RESTRAINT APPLICATION

7. The restraint application arises from the uncontroversial circumstances that Mr UU of counsel previously represented the applicant in the now impugned proceedings in the Federal Circuit Court before Judge Scarlett, such proceedings being challenged on the basis that the judgment was procured by fraud on the part of the late Ms KLD.  Mr UU is now the tutor for junior counsel instructed in these proceedings by the Estate, Mr SS, who is led by Mr TT.  The applicant contends that Mr UU holds relevant confidential information by virtue of that previous representation and, by virtue of his relationship of tutor-reader with Mr SS, should be inferred to have potentially passed that information to Mr SS and thereby onto Mr TT.

8. The parties agreed that the relevant law in relation to the restraint of counsel is that set out by Thawley J in Dyer v Chrysanthou(No 2) (Injunction) [2021] FCA 641 (“Dyer”). Justice Thawley identified two bases for the potential restraint of counsel: firstly, a restraint in respect of holding confidential information and secondly, and potentially overlapping the first, a restraint based upon consideration of the administration of justice (at [2]).

9. As to the confidential information limb, at [74]ff Thawley J adopted what had been said by Nettle J in Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [33] (“Sent”), Beach J in Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 228 FCR 252 at [34] and [35] (“Dealer”), Anderson J in Nash v Timbercorp Finance Pty Ltd (2019) 137 ACSR 189 at [62]–[64] (“Timbercorp”), and Griffiths J in Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 at [38] (“Mumbin”).

10. As relevantly extracted from Timbercorp (Dyer at [76]), the base principle is as follows (citations omitted):

    The court will restrain a legal practitioner from continuing to act for a party if a reasonable person, informed of the relevant facts, might reasonably anticipate a danger of misuse of confidential information of a former client and that there is a real and sensible possibility that the interest of the practitioner in advancing the case might conflict with practitioner’s duty to keep the information confidential, and to refrain from using that information to the detriment of the former client.

11. Again from Timbercorp, and as supported by Mumbin (Dyer at [76]), the test may be applied

    by responding to the following sequence of questions (which are in short-form for the sake of simplicity):

    (a)       What is the relevant information?

    (b)       Is that information confidential?

    (c)       Does the legal practitioner have possession of that information?

    (d)Is the legal practitioner proposing to act “against” the former client in the requisite sense?

    (e)       Is there a real risk that the confidential information will be relevant?

    (f)       Is there no real risk of misuse of the confidential information?

12. It may be observed that the test to be applied is objective and, even where directed to the issue of the potential misuse of confidential information, is grounded in issues pertaining to the administration of justice, although founded ultimately upon contractual obligations and professional conduct rules that bind a legal practitioner as to confidentiality.

13. It may also be observed here that it is not the case that the applicant's previous counsel Mr UU is to appear in a matter concerning the applicant, or calling on the use of confidential information.  Rather, the claim is founded merely upon the tutor-reader relationship with Mr SS.

14. The respondent challenged the applicant’s ability to satisfy any of the six tests posed in Timbercorp, but focussed in particular both on the issues of whether there was any relevantly identified confidential information and, secondly, any proper basis to infer the misuse of such information.

15. As to the first issue, by his affidavit the applicant identified no such information.  He submitted that the proceedings, the judgment of which was reproduced at Annexure SVG2 of the 27 July and 16 August 2021 affidavits, involved the same underlying issue as at present, being the misrepresentation by Ms KLD of her financial position.  He further submits that he conveyed to Mr UU matters beyond what was conveyed  in the hearing before Judge Scarlett, including information as to the financial practices of Ms KLD’s family (with whose finances Ms KLD’s interests are intimately entwined) and as to the lengths that he would, or would not go to in order to pursue such issues.

16. The challenge (as revealed by the pleadings) brought against the judgment of Judge Scarlett claims a fraud perpetrated upon the court by virtue of a deliberate misrepresentation made by Ms KLD as to the value of assets that she held in three entities, being L Pty Ltd, K Pty Ltd and N Pty Ltd, to which she ascribed nil or nominal value, as opposed to their true worth which are claimed to have exceeded millions of dollars.

17. The claim is predicated upon the applicant’s discovery of the fraud after the event of the proceedings.  That is, whatever the state of knowledge held or instructions given by the applicant, they could not encompass the basis for the relief now brought before the court.

18. Even if the lack of evidence identifying the confidential information was disregarded (and it cannot be as the burden is on the applicant), instructions given at the time cannot traverse the factual matters that have since arisen.  At best they may have formed a context which informs the background of the current fraud claims.  It remains uncertain that such constitutes relevant confidential information.  Absent evidence, it remains unsubstantiated that there is relevant confidential information.

19. However, even if this were to be overlooked and it is assumed that there was such confidential information by virtue of the challenge now being to the very proceedings that Mr UU appeared in, there remains a fatal flaw in the applicant’s case as to the reasonable apprehension of the danger of the misuse of the confidential information.  The applicant’s proposition is based upon the tutor-reader relationship between Mr UU and Mr SS.  It is suggested that implicit in such a relationship is the concept of the sharing or use of information which Mr UU was obliged to keep confidential, such that a reasonable person would both entertain the apprehension of misuse and be affronted by the circumstances.  It was further suggested that the mere retention of Mr SS, in circumstances where he is tutored by counsel who previously acted for the applicant, and where there are many counsel available who are not so tainted, is astounding and would offend the reasonable person test.

20. However, such contentions misapprehend the nature of counsel and of the reader-tutor relationship.  Firstly, the nature of the relationship is one informed by its purpose, such purpose being the proper preparation of readers for the work of counsel.  That is a role that is characterised not only by forensic skill and judgment, but employing such within the ethical framework demanded by the position.  A significant aspect of that ethical framework is the maintenance of confidentiality.  It may be observed then that the reader-tutor relationship is not one that points toward the breach of confidentiality obligations in developing the characteristics of counsel within the reader.

21. Secondly, the relationship does not involve the tutor participating in each case conducted by the reader, as was suggested by the applicant.  There is no obligation on the tutor to read each brief and advise the reader on each brief, as was implicit to the submissions put by the applicant.  Hence, absent such obligations again there is no reason to consider that the fact of the relationship points to the breach of confidentiality obligations.

22. Thirdly, the obligations of a tutor to a reader are explicitly ameliorated where that reader is led by another counsel, such that even where permissions are otherwise required for work to be undertaken, they are not in such a circumstance.  In this instance Mr SS is led by Mr TT, pointing further away from a requirement of close involvement by Mr UU as part of his obligations as tutor.

23. Fourthly, and perhaps most significantly, the relationship between tutor and reader is not analogous to the relationship between two solicitors within the same law firm.  Whereas there may be good reason to imply the sharing of knowledge within a law firm (absent appropriate mechanisms), there is no analogous implication either for barristers sharing chambers, or for barristers in a tutor-reader relationship.  Barristers in those circumstances function independently, with such independence being a hallmark of the profession.

24. Under those circumstances, absent some other indication, there is no basis upon which an inference reasonably arises as to the risk of the disclosure of confidential information.

25. It should be observed that in this case that there is no other basis on which the applicant suggests that a confidence has been breached.  He relies solely on the tutor-reader relationship.  Where, as here, the relationship does not point to the breach of confidence or to the sharing of confidential information, the lack of some other indicator is fatal to the claim of the applicant.

26. The same reasoning is closely applicable to the second limb, being the administration of justice limb. While the applicant supported his case on the basis of what he termed to be his “understanding” of the nature of the reader-tutor relationship, and while he further supported such on his assertion that the mere use of a barrister who is tutored by his previous counsel were matters that a reasonable person would consider an affront to the administration of justice, the test requires that the reasonable person be adequately informed.  A reasonable person properly informed of the nature of the relationship between tutor and reader would not readily jump to the conclusion that the administration of justice was undermined in the current circumstances.

27. Again the applicant’s case fails, as it lacks any reasonable prospects of success.

    THE SUBPOENA APPLICATION

28. The applicant further sought leave for the issue of subpoenas to Mr UU, Mr SS and Mr TT.  Although the subpoenas were at this stage to require attendance, he offered, orally, an alternative being that relevant documents be produced.  Dependent upon what may ensue from such, the applicant indicated that he would then seek to have the three counsel compelled to provide affidavits regarding their involvement in the case, and to then attend.

29. The applicant reasoned that if there was no sharing of information, there should be no issue with the production of the evidence.

30. However, it is well established that a subpoena may not be used as a fishing expedition to determine whether there is a case to pursue (Baumann and Ors & Rushbrooke and Anor [2016] FamCA 905 at [35]–[39]). Here the applicant has been unable to present evidence suggestive of the breach of confidence, or reasonable apprehension of the risk of breach of the confidence. It is under that circumstance that he seeks to use the compulsion of subpoena, presumably to find out if there might be some evidence of a risk to pursue.

31. Such use of a subpoena is impermissible, and so leave will not be granted.

    REVIEW OF THE REGISTRAR’S 19 JULY 2021 DECISION

32. The applicant seeks the review of order made by Registrar Chayna on 19 July 2021.  Those orders were concerned with the adjournment of a conciliation conference which was scheduled to proceed before Registrar Chayna on that date. 

33. The applicant acknowledged that he had no issue with the adjournment of the conciliation conference, nor the date to which it was adjourned.  What he seeks is that there be an order directing the Estate to file a financial statement in preparation for the conciliation conference.

34. The Rules provide for circumstances where parties are to file a financial statement as part of a conciliation conference process. The applicant sought that, notwithstanding that this is not a property case, that the requirement to file a financial statement be imposed.

35. The reason that the applicant seeks such an order is that he says the financial position of the Estate will inform his approach to possible settlement.  He asserts a factor bearing upon his settlement is whether the payment of a sum by him will go to his daughters as beneficiaries or be consumed in debts of the Estate.  Without such information he asserts that the conciliation conference would be a futile exercise.

36. However, this does not provide sufficient justification to depart from the Rules and impose the burden of the preparation of such, and the disclosure of such information. Such a departure does not conform with the main purpose of the Rules as disclosed by r 1.04.

1. The issue then becomes one of what the appropriate orders are to prepare the matter for a conciliation conference.  Noting that the only contest was in relation to the filing of financial material, it may be accepted that the orders of Registrar Chayna otherwise remain the appropriate orders.  Noting that it is not appropriate to impose an obligation for the preparation and filing of financial material, orders making it clear that no such obligation arises, as those made by Registrar Chayna, should be repeated.

2. Orders will be made in the form of orders made by Registrar Chayna as appropriate to the management of the case to a conciliation conference.

I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

Associate:

Dated:       2 September 2021