1. The events forming the basis for the complaint are set out above. The evidence reviewed in the hearing if accepted is reasonably likely to establish the following:
   • (a) The applicant had been a client of the Firm to the extent of having given instructions for incorporation of the company. He had a continuing relationship with the Firm as an officer of the company, having given instructions on behalf of the company relating to miscellaneous company matters. He had a continuing experience and expectation up to the events of early October 2005 that his instructions would be accepted by the Firm.
   • (b) At the time of the matters complained of P1's client was the company.
   • (c) P1 gave advice to a group of directors of the company to the exclusion of the applicant commencing in about February 2005.
   • (d) On 10 October 2005, at a time when a dispute had arisen between the applicant and the incoming directors, P1 issued two advices. One of these was used by the incoming directors to the disadvantage of the applicant. The giving of two advices is unexplained. The evidence raises issues regarding P1's motivation in issuing two advices.
   • (e) It was the Firm that employed P1 that had omitted the notice from the Agreement. P1 drafted an amendment to the document and supplied it to a group of directors, knowing that a dispute had arisen. It was not offered to the applicant who had submitted his resignation.
   • (f) When requested to do so P1 refused to give information to the applicant in spite of his status within the company and his immediate protests.
   • (g) After the applicant commenced proceedings against the company and the incoming directors, P2 acted for those parties in spite of submissions to the contrary.
   • (h) The restraint proceedings before the Master while being successful in result did not result in a finding that there was no conflict. Remarks of Master Harper at paragraph 20 of his judgment were to the contrary.
   • (i) P2 in the conduct of that litigation did not discover documentation within the control of the parties for whom he was acting.
   • (j) A substantial issue in the proceedings brought by the applicant was the effect of the omission of the transfer notice from the agreement and its use and non-use by the directors in their respective resignations. This had been drafted by the Firm.
   • (k) P2 maintained a claim for privilege which was abandoned immediately prior to the hearing.
   • (l) P2 caused significant delay in progress of the applicant's claim towards hearing.
   • (m) P2 failed to respond to correspondence from the applicant's solicitors regarding discovery between 6 July 2010 and 17 May 2011.
2. The Tribunal notes the reason given by the respondent for dismissing the complaint was a lack of evidence establishing the matters complained of. More evidence is available to the Tribunal than was available to the respondent.

1. The respondent filed written submissions prior to the hearing, and amplified these at the hearing. A number of references were made to the judgment of Master Harper already referred to. Master Harper had referred to principles stated by Brereton J in the NSW Supreme Court in Kallinicos v Hunt [2005] NSWSC 1181. The submissions explained that:

... the (respondent) was not satisfied on the material then before it that (P1), apart from having no personal knowledge of the Applicant, could be deemed to have had sufficient "knowledge of such things as the personalities and reactions of participants" nor "knowledge of the firm of the vulnerabilities and strengths" of the Applicant which could be used against him in the underlying action.

1. At the hearing the respondent submitted that the issue involved was not of conflict of interest, but an issue of who had retained P1 and provided instructions to him. The incoming directors had provided the instructions presumably on behalf of the company and they were the conduit to the company. It was up to the company to inform the applicant of the substance of the advice that had been given. The written submissions indicated that the respondent assumed that board approval had not been given for P1 to release that information to the applicant. Those submissions recognised that the client was the company but submitted that P1 was entitled to take instructions from one group of directors on the assumption that they represented the board. This presumably was unchanged in the presence of the assertive protests of the applicant, since in paragraph 55 the submissions put:

... it makes no difference to the thrust of the above submissions if (the firm) having initially acted for the company rather than the directors, subsequently also concurrently acted for the directors or individual directors in the period 5 September 2005 to 3 November 2005 when the applicant resigned as director.

1. Submissions were also made in relation to the rather compendious ground directed at P2 that there was continuing conflict prior to and after the commencement of the SC proceedings, deliberate delay in prosecution of the SC proceedings and failure to give proper discovery. The Tribunal has some difficulty understanding the written submissions which appear to be based on absence of notice to the practitioners. As has been referred to above, this issue does not seem to have been included in the Director's categorisation of issues in his letter referring the applicant's complaint, but was clearly raised by the applicant in his original letter of 23 April 2011 and in later correspondence which was referred to the practitioners for comment. The SC proceedings were not completed until late in 2012, and it was not until then that the extent of this area of complaint became better known to the applicant as more documents became available. It was the subject of evidence and submission during the hearing. The written submissions had been prepared before the hearing. It is the complaint which is at issue, not the Director's summary of it, and it was the letter of complaint which was referred by the Director to the practitioners for comment.
2. Considerably more documentation was available to the Tribunal than was before the respondent. Counsel for the respondent conceded at the hearing that the Tribunal in these proceedings was not confined to the material that had been available to the respondent.
3. In oral submissions the respondent suggested that the complainant had not established that the defendants had control over the documents produced by the accountant on subpoena. There was substantial evidence to the contrary.

1. The applicant's complaint had a number of aspects. His concern with the Firm and P1 in particular commenced in October 2005 when he returned from overseas. He felt that he had been unfairly dealt with by the Firm and that P1 was going behind his back. He asserts that the conflict continued into the period in which the SC proceedings were being conducted by P2. Because of delay caused by the SC proceedings, and receipt of further information on discovery in those proceedings, there was further correspondence by the applicant with the respondent regarding the complaint in which further information concerning his complaint was provided by the applicant.
2. By the time that the applicant wrote to the respondent on 23 May 2011, the nature of his complaint had been made clear to P1, P2 and the Firm. However, it was not until October 2012 when Foster J ruled in relation to the production of documents in the proceedings which were listed for hearing in about a week's time that it was possible to have access to all relevant material.
3. The Tribunal takes the view that the nature of the complaint is clear and was well defined and understood by the parties at the hearing. It can conveniently be considered as being made up of the components referred to shortly.

The judgment of Master Harper, Byrne v Production Magic Pty Ltd & Ors [2012]ACTSC 6

1. This judgment was much quoted and relied upon by the practitioners in their correspondence with the respondent. In his judgment, His Honour referred to the evidence before him and referred at paragraph 18 to it not being a case in which it was suggested that the applicant had been a client of the firm. That has not been the case in the present proceedings. The applicant in the evidence before the Tribunal certainly claims that he was a client and his claim is supported by evidence which has been referred to. In the course of his judgment Master Harper referred to a number of authorities in Australia which came after an English House of Lords case of Prince Jefri Bolkiah v KPMG [1999] 1All ER 517. The issue in that case has since been referred to rather baldly as 'when can a solicitor change sides'. Prince Bolkiah said that in order to support an injunction to prevent a solicitor acting against a former client, it was necessary to demonstrate that confidentiality was in jeopardy. Later Australian cases referred to by Master Harper would recognise an additional category. Master Harper expressed that category as it had been formulated in previous Australian cases as follows.

.... the test to be applied in the exercise of the inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.

1. His Honour's judgment was against interfering, but in taking that view, he relied on the delay of the applicant in making the application and the advanced stage that the matter had reached at the time of making his decision. Harking back to his previous statement of principle referred to above, he said the following at paragraph 20.

It seems to me that a fair-minded reasonably informed member of the public might very well come to the view that the solicitors for the defendants should not be permitted to represent them in defending litigation commenced by the plaintiff, the former chairman and managing director of the first defendant company prior to the dispute. I think that an ordinary member of the public may well see this as inherently unfair.

1. Master Harper had referred to a judgment of Higgins CJ: Wagdy Hanna &Associates Pty Ltd v National Library of Australia [2004] ACTSC 75; and, Kallinicos v Hunt [2005] NSWSC 1181, a judgment of Brereton J in the New South Wales Supreme Court. These cases referred to the history in Australia of the development of the additional category referred to. There were variations in the degree of support along the way which were referred to by Higgins CJ.
2. One relatively early case which was referred to by Higgins J and supported the additional category was Spincode Pty Ltd v Look Software Pty Ltd (2001) VR 501 which was interesting since its factual basis was similar to the present one.
3. The Tribunal is examining a disciplinary issue that has the same factual basis, but in principle far removed from those issues confronting Master Harper. However his statements of principle that have been referred to are relevant to the question of whether there has been a situation of conflict.

1. This is a significant component of the applicant's complaint. The complaint starts with the actions of P1 commencing in October 2005 and continues into the conduct by P2 of the proceedings commenced by the applicant. This Tribunal does not have to make a 'finding' that there was a conflict at any time; that is the province of the ACAT if there is an application under section 419. It is however necessary to examine the evidence and the legal context to assess whether this ground would support the making of a section 419(3) charge. There appear to be two avenues of commencement of approach to this issue. The first of these is to look at P1's actions referred to above against a finding that the company was his client. The second is to examine his actions on the assumption that the applicant was a former client of the Firm with whom the Firm had continuing dealings by virtue of his role of managing director within the company and providing continuing instructions on behalf of the company to the firm.
2. On the assumption that the company was his client, something that he himself asserted, his duty of fidelity was to the company. The following is taken from Riley Solicitors Manual:

[7075] Conflict when representing entity clients

[7075.5] Entity as the client as compared with multiple representation

Where a lawyer is retained by an entity, it is the artificial legal person of the entity that is the client. It follows that the lawyer owes his or her duties to the entity, including fiduciary duties to that entity as a client. The separate entity status dictates that the lawyer does not ordinarily owe a fiduciary duty to individual officers of the entity.

1. The Tribunal is not aware of what P1 knew about the company, its constitution, or the relative positions of the directors early in October 2005 when he first had contact with the incoming directors, and indeed whether he had had any involvement with the company or directors prior to that. However, he did have an opportunity to gain this knowledge when he first spoke to GW and he would have gained quite extensive knowledge about the company, its shareholders and directors after undertaking the research that would have been necessary for the October advice which he prepared. It could probably be inferred that he was aware he was acting for only part of the board from his dealings with the applicant. Without explanation that is difficult to reconcile with his later claim that in dealing with those directors he was dealing with the board. It is also difficult without explanation to determine when he became aware that there was conflict between the applicant and the incoming directors. However that dispute probably became apparent no later than at the time that he was asked to advise on the validity of the applicant's resignation on 7 October 2005, and his later unwillingness to deal with the applicant after the applicant's return from overseas. So that, analogously with Spincode, no later than at 7 October 2005, P1 commenced to act for one side in a dispute between directors.
2. On the assumption that the company was P1's client, it would be strongly arguable that it was a breach of his duty to his client to take sides in and foster a dispute among its directors. It would be a matter for the ACAT to infer from the evidence what P1's motivation was in providing advice and drafting documents.
3. Likewise it is likely to be established that the applicant had been a client of the firm for the purposes of incorporation of the company and had then had an ongoing relationship with the firm as a shareholder and managing director of the company. In those circumstances on the principles referred to by Master Harper, for the firm in general, and P1 in particular, to act for the company and the incoming directors to the exclusion of the applicant would arguably be a situation of conflict. This was explicitly recognised by Master Harper in spite of his comments regarding the applicant not having been a client of the Firm.
4. This analysis not only relates to P1's dealing with the applicant, but also P2's prosecution of the defence of the applicant's litigation on behalf of the company and the incoming directors and shareholders.
5. The Tribunal is therefore of the view that this ground would support an application pursuant to section 419(1) to the ACAT for an order of professional misconduct or alternatively unsatisfactory professional conduct, against each practitioner in relation to the applicant's complaint.

1. The evidence indicates that documents identified in the complaint were prepared by P1 on instructions. It is difficult within the evidence to distinguish between documents which were drafts and documents which were final versions. The Tribunal takes the view that this area of the complaint would not support an application for an order under section 419.

1. This is dealt with under the heading 'Conflict of Interest'.

1. This does not seem to form an identifiable ground of complaint and was not dealt with as such by the applicant either in evidence or in submissions.

Delay by P2 in conducting proceedings brought by the applicant, failing to properly discover documents including maintaining an untenable claim for privilege, and supervising the work of P1 the subject of the applicant's complaint

1. The evidence indicates that there was significant delay in producing documents which were in the custody of the company's accountants, and were in fact not produced by the company with support by P2, but on subpoena directed to the company's accountants. During the period of delay, the uncontested evidence is that correspondence from the applicant's solicitors was ignored by P2 as was a direction of the Court.
2. The claim for privilege over documents created while the applicant was a director was maintained for years and was finally abandoned at the eleventh hour and only after application to the Court by the applicant. There is a reasonable probability that the claim for privilege was unfounded and contributed to delay and the cost of the litigation.
3. P2 was a partner in the Firm which employed P1 at the relevant time of the complaint.
4. Evidence relating to this ground has not been controversial and it is the view of the Tribunal that it raises a reasonable likelihood that a finding of either professional misconduct or unsatisfactory professional conduct by the ACAT would be made in respect of it.

1. It is the opinion of the Tribunal that the decision of the respondent should be set aside pursuant to section 416. Applications should be made to the ACAT in respect of each of P1 and P2 seeking orders of professional misconduct or unsatisfactory professional conduct as appropriate arising out of the complaint of the applicant. Those orders should be sought in relation to those components of the complaint which relate to conflict of interest and consequent breach of duty to the applicant in respect of P1 and P2. Those orders should also be sought to those components which relate to P2 acting for the company and incoming directors in the litigation commenced by the applicant, delay in conducting those proceedings; failing to properly discover documents; and, supervising the work of P1. Solicitors should be engaged to commence proceedings, and (preferably senior) counsel engaged to draft the application. All evidence, the transcript of proceedings, and this decision should be referred to counsel for that purpose.

1. The decision made by the respondent on 1 August 2013 to dismiss the applicant's complaint against the practitioners P1 and P2 pursuant to section 412 of the Legal Profession Act 2006 is set aside and the orders which follow substituted.
2. Application be made to the ACAT pursuant to section 419 of the Legal Profession Act for an order of professional misconduct or alternatively unsatisfactory professional conduct against P1 arising out of the complaint made against that practitioner by the applicant.
3. Application be made to the ACAT pursuant to section 419 of the Legal Profession Act for an order of professional misconduct or alternatively unsatisfactory professional conduct against P2 arising out of the complaint made against that practitioner by the applicant.

1. That solicitors be engaged to act for the respondent in the proceedings commenced.
2. That counsel be retained to advise and draft the necessary Tribunal documents.
3. That the evidence in the hearing in these proceedings be considered and the application(s) be drafted in accordance with these Reasons for Decisions.

[3] Transcript of 22 August 2014 at page 6