Caruso v Tartaglia [2002] VSC 91

Supreme Court of Victoria|2002-03-14|Before: Byrne J

BARRISTERS and solicitors - whether counsel in possession of confidential information from opposite party - whether counsel lacked necessary objectivity - counsel not disqualified from acting.

This is an application brought by the plaintiff, Michael Caruso, against the defendant, Salvatore Tartaglia, seeking orders that Mr Graeme McEwen, a member of the Victorian Bar, in effect not act for the defendant at the trial of this proceeding.

The proceeding itself is a claim by Mr Caruso for a lost chance of succeeding in certain litigation which was struck out or dismissed for want of prosecution some time ago. The litigation which was then in question was in Proceeding No. 6548 of 1995 brought by Mr Caruso against a Mr Zoccoli and a firm of solicitors, Taifa and Manno. Of the claims against those defendants in the dismissed proceedings I know little other than what I have been told by counsel. It seems that Mr Caruso alleged that a loan was obtained from Mr Zoccoli secured by a transfer of land and that the transaction was handled by Mr Caruso's then solicitors, Taifa and Manno. In some way the transaction went awry and it is suggested that Mr Zoccoli acted fraudulently and further that the solicitors, that is Taifa and Manno, were party to the fraud.

The proceeding against Zoccoli and Taifa and Manno was conducted on behalf of the plaintiff by Mr Tartaglia who is a solicitor. As I have mentioned, it was dismissed for want of prosecution. What is put in this proceeding, No 6886 of 1999 - and again I take this account from what I have been told by counsel, not having looked at the pleadings or any of the material in the actual proceeding itself - what is put against Mr Tartaglia is that he was in breach of his duty to his client Mr Caruso in permitting the 1995 proceeding to be dismissed.

It is not clear what the defence might be. One might suppose that Mr Tartaglia contends that, while the proceeding was struck out or dismissed, this was not due to some default on his part. Presumably he will be contending that any default was a default of his client, Mr Caruso's part, but it is not necessary that I go any further into the proceeding than that.

Mr McEwen was, on 12 February of this year, retained to act as counsel for Mr Tartaglia at the trial of this, the 1999, proceeding which is due to commence this week. The application to remove Mr McEwen is based, first, on an apprehension that he might inappropriately use certain information which he has obtained directly or indirectly from Mr Caruso in circumstances of confidence. The second basis is that it might reasonably be apprehended that Mr McEwen lacks the objectivity that it expected of counsel in the conduct of litigation.

Dealing with the first matter first, the basis for this contention is that Mr McEwen acted for a Mr and Mrs Gangemi in another proceeding, action brought by a company Padds Holdings Pty Ltd against them in proceeding No. 5307 of 1990. This was, as I have been told, a claim by a lender of money and a mortgagee to recover money lent to and possession of land mortgaged by the Gangemis. The borrowed money was apparently used by Mr Caruso and Mr Zoccoli. Mr Caruso was not a party to the 1990 proceeding which was a claim by the lender against the borrowers, and it would seem a counterclaim by the borrowers against the lenders alleging some kind of impropriety. The involvement of Mr Caruso in the 1990 proceeding is not entirely clear. It appears from the material that it might be suggested that he in some way acted improperly in this transaction to the disadvantage of the Gangemis who are apparently his uncle and aunt. In their counterclaim the Gangemis attack the claim of Padds Holdings alleging that, in so acting, their nephew was acting as agent for the lender. Mr Caruso denies he was the agent of Padds Holdings and has sworn an affidavit on its behalf to this effect.

What is said is that, notwithstanding this adverse position, Mr Caruso participated in conferences with Mr Indovino of Kenyons Solicitors who were then acting for the Gangemis. According to Mr Caruso he attended Mr Indovino's office on more than one occasion during the course of the proceedings together with his uncle, Mr Gangemi, to discuss the Gangemi proceeding. He says that during these discussions he revealed to Mr Indovino details of his involvement with Mr Zoccoli and that Mr Indovino was advised of the full history of his dealings with Mr Zoccoli.

It is not suggested in the material that Mr McEwen was involved in these conferences. Mr McEwen however acted for the Gangemis at the trial of this matter which was settled after the third day. The case based on the possibility of improper use of confidential information is predicated upon communications which it is presumed Mr McEwen obtained, possibly from Mr Indovino, which were communicated by Mr Caruso in confidence in one or other of these conferences.

I approach this matter applying the principles which were set out in some detail recently by Mandie J in Grimwade v Meagher[1] and I will not repeat those principles.

Mr Caruso's apprehension that Mr McEwen might be seen as using confidential information is compounded by evidence which I have of an exchange involving him before the Master on 25 February. It is necessary to observe that on that day there was a routine interlocutory application before the Master, Mr McEwen appearing in this case, that is case No. 6886 of 1999, on behalf of Mr Tartaglia. During the course of the application, Mr McEwen made statements to the effect that he had had past dealings with the plaintiff, Mr Caruso, that he did not believe the plaintiff and that the plaintiff was a fraudster. It is not clear that this had anything to do with the application before the Master which concerned the delivery of particulars. It is regrettable that Mr McEwen uttered those words which cannot have had any value on such an application and which, as it turns out, have caused a concern in the camp of Mr Caruso.

To my mind the case based on an apprehension that Mr McEwen might be using material obtained in circumstances of confidence has not been made out. It is necessary as Mandie J pointed out, that some particularity be given as to what this information might be.

I am conscious of the fact that Mr Caruso and those advising him are in the awkward position that the conference with Mr Indovino may well be in issue, that is to say the fact of the conferences may be an issue. Furthermore, they do not know what, if anything, Mr Indovino might say was communicated to him by Mr Caruso which may be adverse to his (Caruso's) interests. And in any event there is the practical consideration which was mentioned to me that it is obviously tactically unadvisable for Mr Caruso to disclose in this application the very matters which he would rather protect by this application.

Nevertheless, for an application of this kind based on the prospect of the use of confidential information to succeed it must be shown, at least to some degree, that there is sufficient apprehension that would enliven the concern of the bystander that counsel was in the possession of confidential information from Mr Caruso and that he might use information of this kind adversely to Mr Caruso. On the material before me I am unable to so conclude.

The second aspect of the case is that Mr McEwen might fail to exercise the required objectivity. This is based on the statement which I have quoted which was said by him in the presence of the Master. As I have mentioned, it is regrettable that the statement was made but I would not conclude that it discloses such a lack of objectivity as to lead to the conclusion that counsel may not fulfil his proper function. It is a statement which was, perhaps, intemperate but which on its own may simply represent the enthusiasm of an advocate acting for a party. It was of course made in the Master's Chambers and as far as I am aware it was made in the presence of the solicitors for the parties, possibly counsel acting for the other party and of course the Master himself.

One of the regrettable aspects of an application of this kind is that, that which may well have been said and forgotten, has now been given the publicity and an emphasis that perhaps it does not deserve. In my view, Mr McEwen's statement, even in the context of the past litigation, and bearing in mind that Mr Caruso, like any litigant approaching a day of trial, is doubtless anxious about what lies ahead of him, falls short of the circumstances which would require the counsel to withdraw. Accordingly the application will be refused.

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Judgment (18 paragraphs)

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