Sheehan v Australian Municipal, Administrative, Clerical and Services Union
[2014] FCCA 211
•31 January 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SHEEHAN v AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL & SERVICES UNION & ORS | [2014] FCCA 211 |
| Catchwords: PRACTICE & PROCEEDURE – Proceedings – Interlocutory proceedings. PRACTICE & PROCEDURE – Legal representation – solicitors – former client – confidentiality – conflict of interest. PRACTICE & PROCEDURE – Federal Circuit Court of Australia – implied powers. |
| Legislation: Privacy Act 1988 (Cth) |
| Bluechip Development Corporation (Gladstone) Pty Ltd v Sunstruct & Ors (No.2) [2013] FCCA 1898 Flint v Richard Busuttil and Co Pty Ltd [2013] FCAFC 131 PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905 Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 |
| Applicant: | BRENDEN SHEEHAN |
| First Respondent: | AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION AND OTHERS |
| Second Respondent: | AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION QUEENSLAND (SERVICES AND NORTHERN ADMINISTRATIVE) BRANCH, TRADING AS THE SERVICES UNION (ABN 86 351 665 653) |
| Third Respondent: | DAVID SMITH |
| Fourth Respondent: | JENNIFER THOMAS |
| Fifth Respondent: | NEIL HENDERSON |
| Sixth Respondent: | CARY POLLOCK |
| File Number: | BRG 695 of 2013 |
| Judgment of: | Judge Burnett |
| Hearing date: | 31 January 2014 |
| Date of Last Submission: | 31 January 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 31 January 2014 |
REPRESENTATION
The Applicant appeared on his own behalf.
Counsel for the Respondents: Mr E. White
Solicitors for the Respondents: Hall Payne Lawyers
ORDERS
That the Application in a Case filed on 11 December 2013 be dismissed.
That costs be reserved.
| FEDERAL CIRCUIT COURT AT BRISBANE |
BRG 695 of 2013
| BRENDEN SHEEHAN |
Applicant
And
| AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION |
First Respondent
AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION QUEENSLAND (SERVICES AND NORTHERN ADMINISTRATIVE) BRANCH, TRADING AS THE SERVICES UNION (ABN 86 351 665 653)
Second Respondent
DAVID SMITH
Third Respondent
JENNIFER THOMAS
Fourth Respondent
NEIL HENDERSON
Fifth Respondent
CARY POLLOCK
Sixth Respondent
REASONS FOR JUDGMENT
(Ex tempore)
In this interlocutory application, the applicant, who is also the applicant in the principal application, seeks four orders:
“1. That Hall Payne Lawyers are disqualified from representing each or any of the respondents in the proceedings.
2. That the Affidavit of Luke Timothy Forsyth of 24 September 2013 and the Supplementary Affidavit of Luke Timothy Forsyth of 29 September 2013 be struck out of the proceedings.
3. That the Affidavit of Jennifer Thomas 24 September 2013 be struck out of the proceedings.
4. That an order for discovery is made under section 45(1) of the Federal Circuit Court of Australia Act 1999 for discovery of the records described in the application attached to the affidavit of Brenden Leslie Sheehan and marked Annexure ‘BLS 1.’”
At the outset, the applicant advised that he would not pursue order 4, and so it is unnecessary for me to make further comment about that matter. Concerning the balance of the application, it is useful to have some understanding of the background.
The applicant, in his principal application, seeks relief against the first respondent in respect of a claim alleging dismissal in contravention of a general protection. The applicant was employed by the first respondent as an organiser until he was terminated in 2012 following an incident of alleged workplace misconduct that followed the publication of a letter which the respondent is said to have been involved in the production and distribution of, either wholly or in part. The applicant contends that he was dismissed principally because of his disability, which is now in evidence.
Affidavits have been filed in the proceeding, including affidavits the subject of this application today, addressing both the principal application and an interlocutory application which was heard in September 2013. Some of those affidavits form the basis for proposed orders two and three. The affidavit addressed in proposed order three is in part relied upon by the respondent in response to the applicant’s claim.
However, it does, in part, also address matters which were raised in an interlocutory application which was determined last year when the applicant sought orders of an interim nature principally directed to his prospective reinstatement. Those matters are addressed in a judgment that I delivered on 30 September 2013. Against that background, the affidavit does contain some of the features of an interim affidavit. That is, it includes some material which is hearsay, concerning which the source of the hearsay information and the basis for its belief is disclosed.
Although the application itself seeks for the whole of the affidavit to be struck out, in debate this morning it became apparent that the applicant’s concerns relate to statements made at paragraph 73 of the affidavit, which are in these terms:
“On Friday 20 September 2013 I caused Kim Johansson to enquire with Vision Super as to whether the applicant was receiving income protection benefits. Kim Johansson told me [Jennifer Thomas] and I believe to be true that:
a) They have spoken with Marie Lamana from Vision Super and that Marie Lamana stated that:
i) the applicant had supplied medical information that established his entitlement to income protection benefits; and
ii) the applicant was currently receiving a benefit in the order 75% of the salary he had received when he was employed by the ASU.”
The applicant contends that this information is false. He alleges that Ms Thomas swore the affidavit falsely, on the basis that there was either no evidence to support her assertion or, alternatively, that Ms Johansson had provided her with false information. It seems plain from the material that there is a basis for some complaint by the applicant about the matters expressed in paragraph 73. The matters giving rise to those statements appear to have followed from a transcript of a telephone call between an officer of the respondent, who I understand to be Ms Johansson, and an officer from Vision Super.
Their conversation was recorded and transcribed. It is now an annexure to the affidavit of the applicant filed 12 December 2013. It is obvious from a review of the transcript that the officer of Vision Super did not state that the applicant had supplied medical information that established his entitlement to income protection benefits. At best it can be seen from the transcript that all that was revealed was that the applicant was to be assessed, and that benefits were being paid.
Furthermore, it is apparent from the transcript that the officer at Vision Super did not say to Ms Johansson that the applicant was currently receiving a benefit in the order of 75 per cent of the salary he had received when in the employ of the first respondent. To that end I accept that there are some inaccuracies apparent in paragraph 73. However, I think that the inaccuracies can fairly be explained because it was not grossly inaccurate to state that the applicant had supplied medical information, in the sense that it is apparent from the transcript that the applicant was, or ought to be, the subject of subject to medical assessment, and that the purpose of any such assessment was to establish his entitlement to income protection benefits.
Furthermore, it is not at all unreasonable to expect that, knowing the applicant was in receipt of benefits, the level of benefit was 75 per cent of salary, as that is a regular level of benefit provided by income protection insurance policies. That is a matter, I believe, of common knowledge, and it is readily open to be inferred that Ms Johansson’s statement to Ms Thomas really only constitutes a summation by her based upon her beliefs following the telephone conversation she had with the officer at Vision Super.
They were conclusions which are not borne out by the facts but were not unreasonable having regard to the level of officer involved in the conversation. To that end, I am not inclined to the view that a mischievous or intentionally dishonest message was passed up the chain by Ms Johansson to Ms Thomas.
It was further contended on the part of the applicant that, in any event, the information was obtained unlawfully in breach of the Privacy Act 1988 (Cth). So much was acknowledged by the insurers in a letter that they wrote to the applicant, dated 10 October 2013. They made this concession:
“Vision Super acknowledges that the disclosures outlined above at paragraph 2(a)(i) and (ii) occurred in contravention of its obligations under the Privacy Act and its own policy but notes that such contravention was inadvertent and not deliberate. Vision Super takes its obligations under the Privacy Act very seriously and sincerely apologises for, and regrets, any distress this has caused you.”
While that matter would not of itself satisfy the question of admissibility, the applicant broadly accepts the statements that have been made as true. To that end, he has made disclosures himself. For instance, in his complaint to the Legal Services Commission concerning these matters, he says that he has disclosed sensitive health details regarding his medical diagnosis of a bipolar disorder to other persons. Furthermore, he has acknowledged in open court that he suffers a psychiatric disorder of that nature and that he is presently in receipt of disability benefits provided for under the policy.
The purpose of paragraph 73 was initially to address the interlocutory relief sought by the applicant for reinstatement. Further, the probable basis for its terms would suggest that the remarks are more matters of conclusion than they are statements of fact. The information is essentially correct and is now a matter of public record. It must also be noted that the terms of paragraph 73 would not be of any assistance to the respondent at trial because of their inadmissible form, and are therefore now of limited utility.
Those factors lead me to conclude that there really is no basis to exclude paragraph 73 from the evidence. There is, of course, nothing else in the affidavit of Ms Thomas which can be identified as being truly objectionable, and on that basis the application to strike out Ms Thomas’ affidavit is dismissed.
I now turn to the proposed orders one and two. I think that these can be dealt with together by addressing first the issue raised by order one, which seeks the disqualification of the respondent’s lawyers.
Mr Forsyth, the person the subject of the proposed order two, is a principal of Hall Payne Lawyers (the solicitors for the respondents). Although he is a principal of that firm, he does not have the carriage of this action. He and the applicant have known each other socially and in other respects over some time, and it is quite plain from the material that there is some history between them. That is not to suggest that there is an adverse history, but the fact is that there are significant historical and other links joining these two persons.
That reality is unsurprising given that they are both active in the labour movement. Mr Forsyth’s only professional association with the applicant is that he once drafted the wills of the applicant and his wife. This occurred many years ago, and the applicant now concedes that he can, at best, only be described as a former client of the firm. Notwithstanding that, he contends that the firm should be disqualified from acting because of the significant interaction between them. That, in his submission, gives rise to matters of confidence.
It is important to note that the only occasion of a professional relationship between the applicant and Hall Payne Lawyers was when he had his will drafted by them some years ago. While it is entirely possible that there have been other personal interactions between the applicant and the firm or its staff, those relations have not ever been of a professional nature. That includes the events of 8 June 2013, when there was a discussion between the applicant and Mr Forsyth at a barbeque.
While all the witnesses disagree on the subject of the conversation, I do not need to make findings on that issue to resolve the point of confidentiality or privilege. I shall approach this matter by accepting the applicant’s case at its highest. In that regard, the applicant said that on the occasion of 8 June 2013 he attended a housewarming function at the home of a friend who was a lawyer for a trade union. He said that as he entered the function he saw Mr Charles Massy of Hall Payne on the upper deck of the house.
He says that he acknowledged him with a wave but did not approach him, as he was aware that Hall Payne Lawyers were likely to be engaged by the first respondent, and he did not wish to cause prejudice to either himself or Mr Massy in respect of this matter. He says for that reason he did not speak to Mr Massy during the function or after. He says that during the function he encountered Mr Forsyth in the smoking area below the deck on which the function was being held.
He said that Mr Forsyth said hello to him, and that he responded in the usual cordial manner. He said that he then immediately informed Mr Forsyth that he did not believe it was appropriate for them to converse as he was about to commence litigation against the first respondent and believed that Mr Forsyth’s firm might be called to act on its behalf. He said that in those circumstances he did not wish to have any form of discussion with him whatsoever.
He says that he also told him that he was avoiding contact with Mr Massy for the same reason, and that it was not intended as a personal slight toward either he or Mr Massy. He says that Mr Forsyth stated that he was completely unaware of the matters relating to his employment and said words to the effect of, “Oh, I don't know anything about that.” The applicant says that he accepted Mr Forsyth’s representations at face value and relied upon them to be true.
He says that he subsequently became aware that the representation was untrue – I note that these are the matters are now in contention – and that discussions had been held between Hall Payne Lawyers and the first respondent regarding matters pertaining to his employment. He asserts that Mr Forsyth, as a principal of the firm, would have been aware or likely to have become aware of the matter. He says in his statement – and the chronology of this is not plain – that Mr Forsyth then stated that due to their previous relationship he would not be involved in any way with the matter, should Hall Payne Lawyers be engaged to act.
He says that he asked Mr Forsyth if that would definitely be the case, and that he was assured that he would have no involvement in the matter. He says that he accepted Mr Forsyth’s representations and relied upon them to be true. He said that based upon his acceptance of Mr Forsyth’s representations he then held a general discussion with him, during which he disclosed sensitive health details regarding his medical diagnosis of bipolar disorder.
He also says that in the course of the discussion with Mr Forsyth, he disclosed that, for therapeutic purposes, he was writing poetry under the nom de plume “Archie Butterfly,” and told him that he intended to publish his works on a YouTube website under that name. He says he also disclosed details of the circumstances of his termination and received assurances that the details of their discussion would not be conveyed to other persons or become part of any legal action in which Hall Payne Lawyers might represent the first respondent.
The applicant said that at no stage did Mr Forsyth seek to terminate their discussions or advise him that it would not be appropriate for these matters to be discussed. He says that because he is not legally qualified he expected that if there were any ethical or professional issues that might arise he would have been informed of them by Mr Forsyth. He says that he held further discussions of a general nature with Mr Forsyth throughout the balance of the evening and bid him farewell at the end of the function. He has had no further contact with Mr Forsyth since.
He complains today that in material subsequently filed, which I will address in due course, Mr Forsyth reveals that there is a website and a YouTube profile dealing with the poetry of Archie Butterfly. As I have noted, even accepting the applicant’s statement at its highest, the statements alleged were clearly made in a social setting. They were uninvited by Mr Forsyth, and they were not caveated by any real observation of professional confidence, nor were they accepted upon such a basis.
Any other dealings between the applicant and Hall Payne Lawyers would have been in his capacity as an officer of the first respondent. As such, the matters discussed would have involved the first respondent’s confidence, and not the applicant’s confidence. The history of such dealings would not give rise to any question of confidence being imparted in respect of any statements made by the applicant in that context.
The relevant principles to be considered are those summarised in the respondent’s submissions at paragraph 11, which pick up the observations of Millett LJ in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, where it was stated that there are three stages which need to be considered:
a)Whether the firm is possession of information which is confidential to the former client;
b)Whether that information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client; and
c)Whether there is any risk that the information will come into the possession of those persons in the firm working for the other party.
The issue here appears to be what constitutes confidential information. That is, the issue arises from that information which may have been imparted during the previous solicitor-client relationship enjoyed between the applicant and Hall Payne Lawyers. In PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905, Goldberg J addressed this issue when considering the relevant legal principles. Commencing at [48], his Honour stated:
“Where a former client is involved the jurisdiction is rather based upon the protection of confidential information. Lord Millett said at 235:
“Where the court’s intervention is sought by a former client, however, the position is entirely different. The court’s jurisdiction cannot be based on any conflict of interest, real or perceived, for there is none. The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence.
Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one. The former may readily be inferred; the latter will often be obvious. I do not think that it is necessary to introduce any presumptions, rebuttable or otherwise, in relation to these two matters. But given the basis on which the jurisdiction is exercised, there is no cause to impute or attribute the knowledge of one partner to his fellow partners. 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. In this respect also we ought not in my opinion to follow the jurisprudence of the United States.””
His Honour continued at [49]:
“The duty of the solicitor of a former client is to preserve the confidentiality attendant upon the former relationship. Lord Millett made it clear that a former client of a solicitor will not be granted injunctive relief restraining that solicitor from acting against the former client “if there is no risk of the disclosure or misuse of confidential information” (at 236) …”
There are other observations throughout his Honour’s judgment which I think are helpful. At [53], his Honour stated:
“It appears clear from the decision in [Prince Jefri Bolkiah v KPMG [1999] 2 AC 222] that so far as a former client is concerned the jurisdiction to intervene is founded on the existence of confidential information and not on the existence of a conflict of interest. That basis for the jurisdiction has been accepted in a number of cases in Australia …”
Further, at [56]:
“... that public confidence is maintained where a former solicitor is able to establish that there is no real risk that confidential information of a former client will come into the possession of, or be used by, persons in the firm acting for another party whose interests are adverse to the former client.”
Looking at the circumstances of this case, the only confidential information which might be disseminated, malevolently or otherwise, by Hall Payne Lawyers is that matter relating to the taking of instructions for wills some years ago. The applicant has utterly failed to satisfy any onus imposed upon him to establish, as is required, that the information is relevant to the matters which are now the subject of this litigation and that the disclosure might be adverse to him.
As Millett LJ noted, the burden is upon him to do so, although it is not a heavy one. It has not been satisfied in this instance. When one looks then to the circumstances of the party on 8 June 2013, it is quite obvious that the conversation which was alleged to have occurred between the applicant and Mr Forsyth, even accepted at its highest, is not one which could be said to have given rise to a solicitor-client relationship. It was a purely social conversation.
In any event, as the facts demonstrate, the matters which were stated by the applicant to Mr Forsyth are now matters of common knowledge. Had they been provided to him on a confidential basis any such confidence would have long since been lost by the applicant having made that information public. Nevertheless, I am not satisfied on the facts that such a relationship can be applied to the events of that day.
Even if I were wrong in that conclusion, the fact remains, as I earlier observed was stated by Goldberg J at [56], that the issue is whether confidential information will be used against the former client by the former solicitors.His Honour expressly identified that principle in the context of what are now referred to as “Chinese walls,” where at [61] he noted:
“The courts are now more prepared to accept the concept of “Chinese walls” and the quarantining of information within an organisation …”
In this case, there is clear evidence from the solicitors for the respondent that Mr Forsyth has and will continue to be quarantined from any involvement in these proceedings. Accordingly, even if I am wrong in my findings and there was indeed a relationship and corresponding disclosure of confidential information, there being no waiver of that confidence, I am satisfied that there are in place adequate measures to ensure that the respondent’s solicitors will not breach the applicant’s confidence.
Finally, it was contended that the Court in exercise of its inherent jurisdiction ought, in any event, exercise powers to disqualify the solicitors on the basis of the ongoing relationship between the applicant and the first respondent.
I state at the outset that I am satisfied the Court does have implied powers, not inherent powers. That matter has been addressed in Flint v Richard Busuttil and Co Pty Ltd [2013] FCAFC 131, and by me in Bluechip Development Corporation (Gladstone) Pty Ltd v Sunstruct & Ors (No.2) [2013] FCCA 1898.
In that case I made these observations about the Court’s implied powers, which I do not think are materially different to the observations made by the Full Court:
“110. … It is axiomatic that the Federal Court of Australia is a superior court of record: s.5(2) Federal Court of Australia Act 1976 (Cth) and this Court is merely a court of record: s.8(3) Federal Circuit Court of Australia Act 1999 (Cth). Both courts are limited in jurisdiction as Chapter III Courts created by the Commonwealth Parliament. This Court is a court of record, as opposed to the Federal Court, which is a “superior court of record”. It is accepted that the Federal Court, notwithstanding it being declared to be a superior court of record, is a court of limited jurisdiction: Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations for Queensland (1995) 132 ALR 198 at 207.
111. The significance of superior Courts was addressed by Connolly J in Harpur v Ariadne in the context of costs powers. At 526 his Honour noted, referring to English authority, that “the power of superior courts of common law to order security for costs arises from the inherent jurisdiction.” His Honour’s comments were made in the context of state supreme courts and not federal courts.
112. A Chapter III court has no inherent common law jurisdiction. The power to award costs by both this Court and the Federal Court are powers invested by statute. Materially, the powers of both courts to award costs are expressed in similar terms: s.43(1) Federal Court of Australia Act 1976 (Cth); s.79(2) Federal Circuit Court of Australia Act 1999 (Cth). Accordingly, this Court does not rely upon any inherent jurisdiction to invest it with costs powers because it is expressly vested …”
Their Honours in Flint were addressing the slip rule, but were also looking at questions involving the Court’s power to correct clerical mistakes and accidental slips or omissions. They explained the characteristics of superior courts of record created by statute, nothing that there are no inherent powers but that similar powers may be implied. Their Honours noted at [19]:
“Care must always be taken to require that federal courts created under the authority of s.71 of the Constitution take their character and authority from Ch III and the statute that is the source of their power …”
In this case, the source of the power is to be found in the Court’s rules governing the appearance of lawyers. It follows that the Court does have the power to deal with whether or not particular lawyers ought be entitled to appear. In any event, having considered the matter generally, I am still not persuaded that this is a case where the Court ought exercise any power to disqualify the solicitors on the basis that they are in breach of any ethical or other duty by them to the applicant as a former client. It follows that I will not make proposed order one.
So far as the affidavits cited at proposed order two are concerned, their currency only had life because the matters identified in those affidavits appear to relate to a matter which was not alive, at least at the time when the affidavit was filed. It was subsequently brought to life, however, by matters which were addressed in the applicant’s affidavit filed in support of this application. It seems to me unnecessary to deal with the question of whether or not the affidavits ought be struck out. It follows that I will not make proposed order two.
For completeness, I shall make some further observations about today’s adjournment application. At the outset of this interlocutory hearing the applicant applied for and was refused an adjournment. The principal basis for the adjournment was to allow the applicant time to procure legal advice. Relevantly, the respondent had filed two further affidavits one clear business day before the return of the application.
The rules are plain; they require two business days’ notice. I permitted an abridgement for the purpose of the application today, and refused the application for the adjournment, principally because the material contained within the affidavits filed on Tuesday afternoon merely address matters which are raised in the applicant’s material as an annexure, that is, the material which was delivered to Legal Services Commission. It raised, in my view, no new point. Adjourning the matter off to permit the applicant an opportunity to secure further legal advice would have been unnecessary in the circumstances.
The matters that were raised, apart from putting facts in issue, are matters which ought to have been reasonably considered by the applicant in the prospect of appearing for this application today, and he has had time since 4 December 2013 to consider these matters. It was upon that basis that the application for the adjournment was refused.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Burnett
Date: 12 February 2014
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