Tottle Christensen v Westgold Resources NL

[2003] WASCA 224

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE FULL COURT (WA)

CITATION:   TOTTLE CHRISTENSEN -v- WESTGOLD RESOURCES NL [2003] WASCA 224

CORAM:   MALCOLM CJ

MURRAY J
ANDERSON J

HEARD:   13 MARCH 2003

DELIVERED          :   13 MARCH 2003

PUBLISHED           :  23 SEPTEMBER 2003

FILE NO/S:   FUL 169 of 2002

BETWEEN:   TOTTLE CHRISTENSEN

Appellant

AND

WESTGOLD RESOURCES NL
Respondent

Catchwords:

Legal practitioners - Application for order restraining solicitors from acting - Alleged conflict of duty and interest - Confidential documents lost without disclosure of contents - Inherent jurisdiction of Court - Grounds for exercise

Legislation:

Nil

Result:

Appeal allowed
Cross-appeal dismissed

Category:    A

Representation:

Counsel:

Appellant:     Mr M J McCusker QC & Dr J J Edelman

Respondent:     Mr A N Siopis SC & Mr C A Ryder

Solicitors:

Appellant:     Tottle Christensen

Respondent:     Corrs Chambers Westgarth

Case(s) referred to in judgment(s):

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199

Grimwade v Meagher [1995] 1 VR 446

Case(s) also cited:

Attorney-General v Guardian Newspapers (No 2) [1990] 1 AC 109

Black v Taylor [1993] 3 NZLR 403

Carl Zeiss Stiftung v Herbert Smith & Co (No 2) [1969] 2 Ch 276

Clay v Karlson (1997) 17 WAR 493

Fountain Selected Meat (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397

G v Day [1982] 1 NSWLR 24

Geveran Trading Co Ltd v Skjevesland [2002] 1 All Er 1

Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41

Islam v Duncan [2000] NTCA 3, 134 NTR 12

Kooky Garments Ltd v Charlton [1994] 1 NZLR 587

Martin v Gray [1990] 3 SCR 1235

Moorgate Tobacco Co Ltd v Phillip Morris Ltd (No 2) (1984) 156 CLR 414

NMFM Property Pty Ltd v Citibank (No 11) (2001) 109 FCR 77

Pilmer v The Duke Group Ltd (2001) 207 CLR 165

Schering Chemicals Ltd v Falkman Ltd [1982] QB 1

Speed Seal Products Ltd v Paddington [1985] 1 WLR 1327

Spincode Pty Ltd v Look Software Pty Ltd [2002] 4 VR 501

State of Western Australia v Ward on behalf of Miriuwung Gajerrong Peoples (1997) 76 FCR 492

Westgold Resources NL v St Barbara Mines NL [2003] WASC 29

1. JUDGMENT OF THE COURT:    This was an appeal against an injunction which restrained the appellant from acting for a defendant, St Barbara Mines Ltd (St Barbara), in an action brought by the respondent (Westgold).  The injunction was issued until further order, with liberty to apply to vary or discharge the injunction.  Such an application was made to the Judge who made the original order.  His Honour discharged the injunction on the basis that the grounds for the grant of the injunction were no longer operative.  However, that order was stayed, pending the determination of the appeal against the grant of the injunction. 

2. On the hearing, the appeal was allowed, a cross-appeal dismissed, the respondent's application for the injunction was dismissed and the injunction was discharged.  We made an order that the respondent pay the appellant's costs of the appeal and reserved, to be dealt with on written submissions, the making of any special orders as to costs.  Such submissions were provided and these are our reasons for the substantive orders made on the hearing of the appeal and finally in relation to the question of costs.

3. The application for the injunction was grounded upon the proposition that a Mr Blackman, a partner in the appellant firm, had received information and privileged communications confidential to Westgold, an occurrence which ought to prevent the appellant from acting for St Barbara, whose interests in the litigation were adverse to Westgold.  The conflict of duty and interest potentially inherent in that situation is obvious.  The application was brought in the inherent jurisdiction of the Court to control the conduct of members of the legal profession in their role as officers of the court, to ensure the preservation of public confidence in the integrity and fairness of the administration of justice.

4. Such a jurisdiction clearly exists.  Counsel for the parties before us made no contrary submission, although they hotly debated the parameters of the jurisdiction.  In our opinion, there can sensibly be no closed list of circumstances which will justify the exercise of what, on any view, must be regarded as an exceptional jurisdiction and power.  Ordinarily, litigants are entitled to solicitors and counsel of their choice and it is only in a clear case that the Court would make an order which would interfere with that right.

5. On the other hand, it seems to us that the power is not so limited as the appellant suggested, when Senior Counsel submitted that Westgold's application would fail once it was appreciated that the Court had no power to grant an interlocutory injunction, except in protection or assertion of some legal or equitable right which the Court had jurisdiction to vindicate by a final judgment:  Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199. That case was concerned with an effort by a litigant to obtain interlocutory relief beyond the relief which might be obtained by the litigant by way of final judgment. The order made in this case was clearly not an interlocutory order of that character.

6. Whatever might be the ambit of the inherent jurisdiction of the Court, in our opinion it must encompass those cases where the representation of a litigant by solicitor and/or counsel may be seen objectively to involve a real risk of actual or apparent conflict of interest – the risk of conflict between a duty owed to the client of the solicitor or counsel and a duty owed to some other interest to be served in the litigation.  Alternatively, there must, we think, viewed objectively, be seen to be a real need for an order preventing a solicitor or counsel from acting to imperil the due administration of justice and to protect the integrity of the judicial process.  In both respects, the test adopted by the Court will, we think, be an objective one – the matter will be viewed from the perspective of a fair-minded, reasonably well-informed, disinterested bystander. 

7. It is unnecessary for present purposes to refer to the authorities, most of which simply present examples of the exercise of the jurisdiction in particular factual circumstances.  We were attracted to the general formulation of the nature of the jurisdiction, in line with what we have written, by Mandie J in Grimwade v Meagher [1995] 1 VR 446 at 455. We note, however, that the facts of that case were quite unlike those asserted by the respondent here.

8. There is no dispute between the parties as to the relevant facts.  A man named Smith was at one time a director of Westgold.  He was centrally involved in having Westgold sue St Barbara and a man named Woss for misleading conduct in relation to the sale by Mr Woss of some shares in St Barbara to Westgold.

9. Later, Mr Smith ceased to be a director of Westgold.  He was sued by Westgold and instructed Mr Blackman of the firm Clayton Utz to act for him.  When Smith left the employment with Westgold, he retained in his possession copies of documents, including privileged communications, which were the property of Westgold and related to the action against St Barbara.

10. Mr Smith approached Mr Woss who was, of course, a defendant in Westgold's action against St Barbara, and discussed with him the prospects of giving him the documents he had retained.  Woss was interested.  He instructed solicitors to seek the documents from Smith.  Those solicitors wrote to Mr Blackman and asked that Smith produce the documents.

11. Mr Blackman asked for the documents and Mr Smith gave them to him.  Blackman did not read the documents before they were lost.  They have not been found, despite what may be accepted to be rigorous search.  After they were lost, relying upon Mr Smith's oral instructions, Mr Blackman advised Mr Smith that as the documents were created in his capacity as a director of Westgold, they remained the property of that company and could not therefore be voluntarily provided to Mr Woss by Mr Smith in his private capacity.  Subsequently, as we have seen, Mr Blackman left Clayton Utz and joined the appellant, the solicitors for St Barbara.

12. In our opinion, having regard to the test for the exercise of this Court's jurisdiction to make an order of the kind under appeal, those facts do not give rise to a ground upon which the order made can be sustained.  Hence our decision to allow the appeal and dismiss the cross-appeal, which relied upon an assertion that Blackman owed Westgold a fiduciary duty or duty of confidence which was not discharged, without the informed consent of Westgold, when it was found that the documents had been lost and their contents had not, at any time, been disclosed to Mr Blackman.  In our view, it is unnecessary to consider whether Blackman might, in the circumstances, have owed a fiduciary duty to Westgold.  It remains the case that there was no evidence that the duty of confidentiality was breached or could ever be breached.  There was simply no ground upon which the order made could be sustained. 

13. As to costs, the appellant seeks the costs of the appeal and the cross-appeal on an indemnity basis, without regard to the limits provided by the scale.  It argues that in view of the unchallenged evidence of Mr Blackman, Westgold ought to have known that it had no prospect of success.  Its resistance to the appeal was unreasonable, it is asserted.  The making of such an order is a matter of discretionary judgment, but it is an exceptional order.  Ordinarily, costs will be taxed on a party and party basis, subject to the limits provided.  We can see no impropriety or other ground for making the special order sought in this case. 

14. The respondent succeeded at first instance.  Although the order made was subsequently set aside, that order was in its turn stayed, pending the determination of the appeal which the appellant had by then already instituted.  In our opinion there are arguments available to Westgold which it was entitled to put on the hearing of the appeal.  This was not a case where, from the point of view of that party, the matter was so clear that to avoid a special order for costs it was obliged to concede the appeal, particularly when the matter was one to be determined by the consideration of the proper discretionary judgment of the Court.  We would not add to the order we made that the respondent should pay the appellant's costs of the appeal and cross-appeal to be taxed, except to add the certificate for second counsel which was sought.

15. As to the costs of the application at first instance, we think that the appropriate orders are those sought by the appellant.  The order that the appellant pay the respondent's costs of the application should be set aside and there should be liberty to apply to a single Judge reserved to the defendant, St Barbara, for the costs of that application.