(h) the damage which would be done to the solicitor client relationship if a solicitor were permitted to act against a former client in these circumstances: see Oceanic Life Ltd v HIH Casualty & General Insurance Ltd (1999) 10 ANZ Ins Cas 61-438 at 74,978.
58 The defendants' answer was not to query the basic propositions of law put forward by the plaintiff, but to rely on the special circumstances of the present case. They say that the present case depends on facts.
59 First, they say that they never received any information from the plaintiff which was confidential. They further say that even if such information had been received, it would have no relevance to the Mowbray proceedings.
60 The defendants say that it is not everything that is learned within the framework of a relationship which is confidential information or information received in confidence. There must be something about the information which makes it worthy of protection in equity.
61 Information loses its confidential character in various circumstances, some of which have occurred in the instant case. These circumstances include situations where it is read out in a public place.
62 In the Stelzer case, Miss Katzmann SC when making her opening speech mentioned certain parts of the material that the plaintiff wants to protect.
63 In any event, the knowledge that the plaintiff had in its possession particular publications which are in the public domain is not confidential information.
64 There is no evidence that Mr Blanch ever read any of the material in question. The mere fact that you know that a person has certain volumes on his or her shelves is no evidence that the person has any knowledge of what is in those volumes.
65 The defendants have persistently been asking the plaintiff for identification of the alleged confidential information. Even though there has been some identification during the hearing, the defendants are still not clear. It behoves a plaintiff in this type of case to specify precisely the information sought to be protected: Mancini v Mancini [1999] NSWSC 800 and Belan v Casey (supra).
66 Further, the defendants say that it is significant that the present litigation is being heard in the DDT. In that Tribunal there is a sharing of relevant information and, indeed, it is not uncommon for orders to be made that facts established in one case are to be taken as established in every subsequent case unless cause for taking some other course is shown (see Dust Diseases Tribunal Act 1989, ss 25(3) and 25B).
67 The plaintiff notes, however, that it is clear that the DDT may give leave to receive further material on foreseeability issues.
68 Again, every experienced legal practitioner in the DDT was aware that there were thousands of pages written on the relevant topics and all the information was in the giant ambit of knowledge of people who work in the area.
69 The defendants also say that, even if otherwise the Court might be moved to issue an injunction, it should not grant it as by now the defendants have progressed so far in the Mowbray action that it would be unjust to do so.
70 It is clear that, in accordance with authority, particularly the decision in Prince Jefri that in the present circumstances there is an onus on the solicitors to show that there is no risk that they will utilise information imparted in confidence in advancing the cross claim.
71 Before dealing with the core issues in this case, it is necessary to consider the side issue that Hicksons' relationship with the plaintiff was brought about by the intermediary, Allianz.
72 In Groom v Crocker [1939] 1 KB 194, the English Court of Appeal held that where a solicitor is retained by an insurer on behalf of an insured, the solicitor owes the same duty to the insured as if the insured had retained the solicitor save that the insured cannot complain if the solicitor acts in accordance with the insurer's instructions within the insurer's rights under the policy. See also McKenzie v Director-General of Conservation and Natural Resources [2001] VSC 220 at [47]-[50].
73 Accordingly, it makes no difference to Hicksons' duty to BATAS that they were retained through the intermediary of Allianz.
74 However, the same matter comes up in another context. Hicksons appears to consider that its client is Allianz and that they have consistently acted in the interests of Allianz in all matters. It was merely incidental that, in some cases, BATAS was the insured and in others the opponent.
75 This view is of no assistance to the solicitors. If a solicitor acts for two or more persons in the one matter and the solicitor comes to have confidential information relevant to one of them, that solicitor cannot use that information against that client either in favour of the solicitor's other client or for a stranger.
76 I now pass to the core issue.
77 Mr Gleeson took me to a learned article by professor Paul Finn, as his Honour then was, entitled "Fiduciary Law and the Modern Commercial World in Commercial Aspects of Trusts and Fiduciary Obligations" (Clarendon Press, Oxford, 1992). This article pays particular attention to what is called "former client conflict" and "separate matter conflict".
78 Of course, this article was written before Prince Jefri and that must be taken into account when considering the weight of the thinking, but I have found the general analysis extremely useful.
79 "Former client conflict" is where a law firm acts for A in a matter and later acts against A in the same or a related matter. Here, the public interest in maintaining an environment in which uninhibited and secure communication can take place between lawyer and client and other factors mean that the right of the second client to the lawyer of his or her choice will take low priority.
80 "Separate matter conflict" occurs where a lawyer obtains information in the course of acting for client A which is relevant to another matter arising later in which the lawyer acts for client B.
81 Separate matter conflict may involve information received directly from the client, but may also cover information received from third parties while acting for the client.
82 The question was discussed by the English Court of Appeal in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461 and the conclusion reached that the duty of confidentiality extended to material ascertained from sources other than the customer whilst the relation of banker and customer was current.
83 Finn J says at p 33 that "Confidential information obtained in and for the purpose of rendering a particular client service can lawfully be used only for the purposes of that service unless the client consents to the contrary."
84 However, as Finn J also notes at p 33 the core difficulty is working out what information is covered by confidentiality.
85 To take some examples, the fact that the client is accustomed to catch the 5:15 train to Newcastle does not of itself indicate confidential information. However, if the solicitor is told that there are many process servers seeking out the client, the information will attain a confidential character.
86 A distinction needs to be drawn between information that comes to a solicitor by way of know how when retained by a client and information that belongs to the client. Thus, if a lawyer in the course of work for a client ascertains the most efficient system for locating people by working through the electoral roll, that knowledge ordinarily becomes part of the lawyer's know how and may be used by the lawyer on any subsequent occasion.
87 The law has for many years been that a lawyer is not prevented from taking as a subsequent client a person who is a competitor of a previous client; see eg Rakusen v Ellis, Munday & Clarke [1912] 1 Ch 831. In order to obtain an injunction something much more must be shown.
88 At this point it is appropriate to analyse Prince Jefri.
89 The basal facts were that in 1996 the plaintiff retained accountants KPMG to provide forensic accounting advice and litigation support in major litigation relating to his financial affairs. For that purpose, KPMG were given access to confidential information.
90 After that litigation was settled, the Government of Brunei retained KPMG to investigate the affairs of an agency of which the plaintiff had been chairman. The plaintiff sought an injunction against KPMG from so acting and was successful in his case in the House of Lords.
91 The leading judgment was delivered by Lord Millett with whom Lords Browne-Wilkinson, Hope, Clyde and Hutton agreed.
92 At p 234, Lord Millett affirmed the proposition that where the plaintiff is a former client, the court's intervention is founded not on the perception of any possible impropriety, but on the protection of confidential information.
93 Where the court's protection is sought by a former client, the plaintiff must show that "(i) the solicitor is in possession of information which is confidential to him and the disclosure of which he has not consented to 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." (p235).
94 "Whether founded on contract or equity, the duty to preserve confidentiality is unqualified. It is a duty to keep the information confidential, not merely to take all reasonable steps to do so. Moreover , it is not merely a duty not to communicate the information to a third party. It is a duty not to misuse it, that is to say, without the consent of the former client to make any use of it or to cause any use to be made of it by others otherwise than for his benefit. The former client cannot be protected completely from accidental or inadvertent disclosure. But he is entitled to prevent his former solicitor from exposing him to any avoidable risk; and this includes the increased risk of the use of the information to his prejudice arising from the acceptance of instructions to act for another client with an adverse interest in a matter to which the information is or may be relevant." (pp 235-6).
95 "… the court should intervene unless it is satisfied that there is no risk of disclosure. It goes without saying that the risk must be a real one, and not merely fanciful or theoretical. But it need not be substantial." (p 237).
96 Mr Gleeson also relied on the short judgement of Lord Hope on p 227 which underlines what Lord Millett said.
97 The basic propositions enunciated in Prince Jefri have been adopted in Australia; see eg Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1, 48. See also Colonial Portfolio Services Pty Ltd v Nissen (2000) 35 ACSR 673 and Pradhan v Eastside Day Surgery Pty Ltd [1999] SASC 256 [51] a decision of the South Australian Full Court (Bleby J with whom Doyle CJ and Prior J agreed).
98 However, in one respect, there has been some substantial disagreement with Prince Jefri. In Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501, Brooking JA thoroughly examined the authorities and reached the conclusion at pp 521-2 that:
"…it must be accepted that Australian law has diverged from that of England and that the danger of misuse of confidential information is not the sole touchstone for intervention where a solicitor acts against a former client."
99 Brooking JA was a member of the Victorian Court of Appeal with Ormiston and Chernov JJA. The former said that he thought that Brooking JA was correct in his analysis, but had not had time to consider the question deeply and noted that there had been little argument on the point. Chernov JA seemed to agree on the confidential information part of the case and remarked that Brooking JA appeared to make a compelling case for his view.
100 Brooking JA's view has been adopted by later cases in Victoria; see eg Sent v Fairfax Publication J Pty Ltd [2002] VSC 429 per Nettle J.
101 I briefly examined the position in Belan v Casey (supra). I there said that, except in Victoria, it seemed to me that there had been full acceptance of Prince Jefri in Australia and that Brooking JA's view was obiter.
102 Mr Gleeson submitted that I should re-examine that view. He suggests that cases such as Parry-Jones v Law Society [1969] 1 Ch 1 and Westgold Resources NL v St Barbara Mines Ltd [2002] WASC 264 show that much more emphasis must be placed on the former solicitor's contractual duty of loyalty, a contractual duty which survives the termination of the retainer, than was done in Prince Jefri.
103 Mr Gleeson further suggests that the cases on corrupt retirement by fiduciaries or corrupt termination of retainers by solicitors clearly show that the propositions put by Lord Millett in Prince Jefri were not intended to be exhaustive.
104 I have done as Mr Gleeson requested. However, I remain of the view I took in Belan v Casey.
105 It may be that there are some exceptional cases where equity will give relief in favour of a former client where there is no confidential information present. However, almost every judge who has recently given a judgment on the matter has recognized that there is still no rule forbidding a lawyer acting against a former client. As Chernov JA points out in Spincode, such a rule would come into play if one adopted a too liberal view as to the basis of the jurisdiction.
106 In PhotoCure ASA v Queen's University at Kingston (2002) 56 IPR 86, Goldberg J in the Federal Court declined to follow Spincode and followed Prince Jefri and Belan v Casey.
107 Few reputable textbooks in equity/confidential information deal with Prince Jefri. The only one that does, Parkinson, states the Prince Jefri rule (see [1026]) and makes no mention of Spincode.
108 I consider that until the NSW Court of Appeal or High Court of Australia decide otherwise, I should continue to adhere to what I said in Belan v Casey subject to the riders in the next two paragraphs.
109 However, for completeness, I should note what was said in argument presented to the High Court (Gaudron and Kirby JJ) on 22 October 1998 on the special leave application from the decision of the Western Australian Full Supreme Court in Fordham v Legal Practititioners' Complaints Committee (1997) 18 WAR 467. That was a disciplinary matter where a solicitor had acted for P and then, later, when she was acting for T who had allegedly kidnapped P, cross examined P on his character from information P had given her.
110 Fordham was argued before Prince Jefri was decided.
111 Kirby J said that whilst counsel was approaching the problem in a context of confidential information, "the heart of the professional wrong is the act of disloyalty".