5011/04 SAM PETER CASSANITI v MICHELLE PARAGALLI & 3 ORS
JUDGMENT
1 When this matter first came before me on 16 March 2006, the court file contained a sealed envelope marked:
"Confidential affidavit of John Andriano sworn 15 March 2006, ordered to be filed on 13 March 2006. This envelope not to be opened without consent of Galluzzo Andriano, solicitors, telephone 9726 5700 attention: John Andriano or an order of the court."
2 The affidavit of Mr Andriano contained in the envelope came to be sworn and filed by him as a result of the following order made by Gzell J on 13 March 2006:
"Each of the fourth defendant and John Adriano file in court by no later than 4.00pm on Wednesday 15 March 2006 an affidavit setting forth when any of the said moneys were dispersed or withdrawn from the trust account of John Adriano and by whom the moneys are presently held."
3 This order was later rectified under the slip rule by substituting "Andriano" for "Adriano". The reference to "the said moneys" is a reference to a sum of $131,374.15 in respect of which Campbell J had previously found that there remained in force a binding agreement between the plaintiff and the defendants for its retention pending the resolution of a dispute: see Cassaniti v Paragalli [2006] NSWSC 50 (9 February 2006). When the affidavit of Mr Andriano was filed on 15 March 2006, Gzell J made, upon an ex parte application made by Mr Oakes SC on Mr Andriano's behalf, the confidentiality order that caused it to be placed in the envelope marked in the way to which I have referred.
4 On 16 March 2006, I heard an oral application by the plaintiff for access to Mr Andriano's affidavit. Mr Loewenstein of counsel appeared for the plaintiff. Mr Oakes SC appeared for Mr Andriano and indicated that, because of the view Mr Andriano took of his duties as a solicitor, there was no consent to the making of the order sought. Mr Andriano's position is that he must, consistently with those duties, put before the court all considerations relevant to the making of the order sought. It is to be noted that he was previously the solicitor for the fourth defendant. It was in that capacity that he came to hold relevant moneys and to be subjected to the order of 13 March 2006. The retainer ended shortly before 13 March 2006.
5 When there emerged a possibility that moneys may have been paid out inconsistently with the agreement referred to in the declaration made by Campbell J, orders were made with a view to, first, preventing dissipation of the moneys and, second, discovering their whereabouts. On 9 March 2006, it was ordered that the fourth defendant not deal with or dispose of the sum of $131,374.15 formerly in Mr Andriano's trust account (or property into which it had been converted). On 13 March 2006, it was ordered that Mr Andriano not distribute any of the relevant moneys from his trust account. It was also ordered that he swear and file the affidavit with which I am now concerned.
6 Mr Loewenstein's position, on the plaintiff's behalf, is quite straightforward. Given the agreement found by Campbell J to exist (being an agreement between the plaintiff and the defendants, including the fourth defendant), the plaintiff has an interest in the preservation of the moneys the subject of the agreement. He should therefore have access to Mr Andriano's affidavit in order to obtain information relevant to that matter so that he may protect his position.
7 Mr Oakes, on behalf of Mr Andriano, makes, in essence, four points. I shall outline all four before discussing and dealing with them.
8 First, Mr Oakes referred to s.255(1) of the Legal Profession Act 2004 which says that a law practice must hold trust money deposited in a general trust account of the practice "exclusively for the person on whose behalf it is received" and must disburse the trust money "only in accordance with a direction given by the person". It was, I think, accepted by the plaintiff that the relevant "person" in relation to the relevant moneys in Mr Andriano's trust account is the fourth defendant. On this basis, it was submitted by Mr Oakes that Mr Andriano was under an obligation, because of the Act (and, one imagines, also as a matter of contract and fiduciary duty), to apply the moneys only as directed by the fourth defendant, whatever may have been the rights and wrongs of that from the perspective of any contract to which the fourth defendant was a party. That position, I note, would have changed on 13 March 2006 when the order regarding dealings with the money by Mr Andriano was made: see the penultimate sentence of paragraph [5] above.
9 Second, Mr Oakes referred to rule 2 of the Revised Professional Conduct and Practice Rules 1995 made by the Council of the Law Society of New South Wales under s.57B of the Legal Profession Act 1987 on 24 August 1995. Rule 2 is as follows:
"2.1 A practitioner must not, during, or after termination of, a retainer, disclose to any person, who is not a partner or employee of the practitioner's firm, any information, which is confidential to a client of the practitioner, and acquired by the practitioner during the currency of the retainer, unless:
2.1.1 the client authorises disclosure;
2.1.2 the practitioner is permitted or compelled by law to disclose; or
2.1.3 the practitioner discloses information in circumstances in which the law would probably compel its disclosure, despite a client's claim of legal professional privilege, and for the sole purpose of avoiding the probable commission or concealment of a felony.
2.2 A practitioner's obligation to maintain the confidentiality of a client's affairs is not limited to information which might be protected by legal professional privilege, and is a duty inherent in the fiduciary relationship between the practitioner and the client."
10 As rule 2.2 makes clear, the obligation of confidentiality arising under rule 2.1 is, in effect, an explicit version of the obligation that has its source in the trust and confidence reposed in a solicitor by his or her client. Mr Oakes emphasised that this duty of confidentiality is distinct from the privilege which, at common law or under the Evidence Act 1995, attaches to lawyer-client communications and is a privilege belonging to the client.
11 Third, Mr Oakes referred to the Evidence Act provisions about client legal privilege, particularly s.118. Reference was also made to s.132. Mr Oakes regarded these provisions as directly applicable to the question of access to Mr Andriano's affidavit now before me. The provisions are as follows:
" 118 Legal advice