Hurley v McDonald's Australia Ltd

The applicant's complaints 57 The applicant's complaints are as to: · perceptions concerning the possible state of knowledge of the former associate in connection with this case; · the conduct of Baker & McKenzie in recruiting him as an employee; and · that firm's subsequent conduct in its dealings with the applicant's solicitors concerning the matter.

Perceptions concerning the former associate's knowledge 58 Mr Hampson's argument was primarily that an observer would note that the associate robed in court and entered and left with me, inferring from those facts that a close association existed. Further, with some knowledge of the possible duties of an associate, such as those suggested in the two curricula vitae, it might be inferred that he would have confidential information concerning my attitude to this case. I repeat that, as I observed in the course of argument throughout this case, I have frequently raised with the parties my views, tentative or otherwise, as to its merits and as to the problems inherent in it. I doubt very much whether there is any thought, other than the most transient which has not been so ventilated. It is said that the mere fact of frequent and extensive disclosure to the parties does not eliminate the possibility that there are other thoughts which have not been so disclosed. That is at least theoretically possible. In practical terms, however, it is a little difficult to identify what those thoughts might be. This, in turn, makes it difficult to identify ways of negativing any perception of unfairness as an alternative remedy to abandoning the trial. I would expect, however, that the fair-minded observer would take into account the frequent expression of such perceptions in deciding whether or not it was likely that the associate was privy to information not known to both parties. 59 The relationship between associate and Judge is routinely described as being one of confidence. There are, I believe, substantial reasons why a Judge would expect an associate to maintain confidentiality concerning knowledge derived during his or her employment. The associate may have knowledge of the Judge's personal affairs, of relationships between Judges in the same court and of the Judge's views concerning individual practitioners, other Judges, public issues (including political issues) and other sensitive matters which, if they became public, might embarrass the Judge or detract from the capacity to fulfil his or her functions. It might also be embarrassing if knowledge of particular idiosyncrasies were to be disclosed. Disclosure of a preliminary view which was not reflected in a final decision might have a similar effect. Quite apart from such considerations, it is generally inappropriate for an associate to have close contact, other than such as is necessary in performing his or her duties, with the legal advisers for either side in pending litigation in which the Judge is involved for the same reason as a Judge avoids such contact. This is because close association might lead to a perception that the Judge himself is associated with those advisers, thus running the risk of creating a perception of bias. 60 Another area of confidentiality concerns proceedings which, by their nature require confidentiality, at least until judgment, and sometimes thereafter. Examples are orders authorizing the use of surveillance devices and telephone intercepts. Temporary confidentiality might be necessary in connection with ex parte injunctive relief, particularly "Mareva" injunctions and "Anton Piller" orders. In addition, evidence is sometimes provided on a confidential basis, either pursuant to statute or because of commercial sensitivity. Decisions may also be commercially sensitive. Premature knowledge of the content of such a decision may confer an unfair commercial benefit. 61 The applicant, however, does not point to any such matters, but rather to a concern that the associate may possess information concerning my views about this case which, if disclosed to the respondent, may offer, or may have offered an unfair advantage. Although this proposition has superficial appeal, its logic is somewhat difficult to articulate. Any communication by Judge or associate with one party or one party's legal advisers concerning pending proceedings is habitually considered to be potentially dangerous. I suspect, however, that the root cause of this perception is not a fear that confidential information will be disclosed, but a fear of perceived bias on the part of the Judge. Where the associate is no longer employed by the Judge, such contact can provide no reasonable basis for perceived bias. 62 Part of the applicant's submission is that any disclosure may assist, or have assisted the respondent in settlement negotiations. If one side has secret insight into any view formed by the Judge as to the case, it will be better equipped to predict the likely outcome and may adjust its settlement proposals accordingly. The true value of such advantage may vary, depending upon the stage at which the view in question was formed, the strength with which it was held, the reliability, or perceived reliability of the associate's report and whether or not the Judge's view is susceptible of upset on appeal. The benefit could only be assessed by comparison with the likely outcome, had the information not been disclosed. Would the matter have proceeded to judgment, and with what result? Would it have been settled anyway and on what terms? These matters might be easy to resolve in some cases and difficult in others. No Judge would want an employee or former employee to disclose such information, but again, the reason is probably a desire to avoid a perception of bias rather than a concern about fairness in the settlement process. Many factors will affect perceptions of fairness during negotiations, including the competence of, and the degree of preparation achieved by the lawyers, and their views concerning the case. A competent, well-prepared lawyer would be unlikely to change his or her approach to a case on the basis of an unverifiable assertion by a former associate who was clearly acting in a disloyal and secretive way and was therefore probably unreliable. It is likely that the fair-minded observer would share this view. 63 In any event, the settlement process is not an integral part of a fair trial. Although negotiations are almost invariably conducted in tandem with the trial, any unfairness experienced in those negotiations cannot logically affect the perceived fairness of the trial itself, provided that the impartiality of the Judge is not brought into question. It is no part of the trial Judge's function to ensure that negotiations are "fair". 64 The applicant also submits that there may be a perception that the respondent's conduct of this trial has been affected by the disclosure of information as to some view of the case which I may have. Again, this proposition has some superficial attraction but lacks logical justification. The matters in issue in a trial are divided traditionally into questions of fact and law. It is impossible to see how secret knowledge of a Judge's view of a legal question could offer any real advantage, save possibly to encourage greater research designed to persuade him or her to a contrary view. In any case, a decision based on a question of law is readily scrutinized on appeal and corrected if wrong. There would be no point in adjusting the conduct of the trial to accommodate such a view, save perhaps to "play up to" it. I doubt whether anybody really believes that such tactics are effective. 65 As to questions of fact it is, in theory, possible that a decision to call or not to call a witness or witnesses on a particular issue might be influenced by information as to the Judge's view of earlier witnesses or other evidence dealing with that issue. However the only outcome would be that further admissible evidence would be either led or not led. Of course, in acting upon such information, the legal advisers would again have to consider the reliability of the information. I find it hard to believe that any competent lawyer would base such decisions upon information as to a view previously expressed by the Judge to an associate. Again, I would expect a fair-minded observer to take account of these matters. 66 In any event, I cannot see how a party's decision to call or not to call a witness could affect the fairness, or perceived fairness of the trial, given that fairness involves notice of the issues and an opportunity to call relevant evidence. The argument assumes a proprietary interest in tactical advantages derived from decisions made by the other side, so that if a Judge discloses an attitude which provokes a reconsideration of such decisions, the other side can legitimately complain of unfairness because the other party will have an opportunity to remedy a perceived weakness or exploit a perceived strength. The fallacy of this proposition is demonstrated by the fact that if the view in question were disclosed in court, there could be no complaint, provided it did not create a perception of bias. This would be so regardless of whether the other side also had the opportunity again to address the issue. For example, if a Judge told the defendant, during its case, that evidence was lacking on a particular issue, the defendant might be able to call such evidence, but the plaintiff's knowledge of the Judge's view and of the remedial steps taken by the defendant would not enable it to take any steps in response unless it was entitled to re-open its case. Thus it cannot be assumed that the secrecy of the communication will necessarily deprive the other side of the capacity to address the same issue. 67 If the applicant has evidence which she wishes she had led, having regard to the present state of the case, and if it were arguable that the respondent's evidence on that issue had been affected by secret knowledge of my state of mind, one would expect the relevant area to have been identified. It was said in argument that the applicant is not in a position to know. It is worth repeating that the applicant has known the contents of the respondent's case in some detail since before the commencement of the trial. If there had been any significant change in direction, it would have been readily apparent. The applicant has made no attempt to identify any such change in direction. If no such change is apparent, then it is difficult to see why a fair-minded person should suspect that the respondent has derived any helpful information from the former associate. Again I observe that the real risk of a communication with one side is the possible perception of bias, and that is not presently alleged. 68 So far, I have said little about the effect upon the fair-minded observer of knowledge that a former associate would be expected, both by the Judge and by members of the profession, to maintain confidentiality in connection with information derived in the course of his or her employment. There is nothing about such an expectation which is peculiar to the legal profession. Indeed, not infrequently, the newspapers report examples of employees, particularly in government agencies, being dismissed because they have improperly disclosed information derived by them in the course of their employment. It is, I believe, well known that many employees are subject to such restrictions, legal or moral. Further, as Mr Salgo points out in his affidavit, it would not be a particularly good basis for an on-going relationship of employer and employee that the employee was known to have betrayed the confidence of a former employer. This is particularly so when the employer is a firm of solicitors. Again, such matters would be apparent to a fair-minded observer. 69 On occasions, the applicant's case came close to suggesting that Baker & McKenzie had entered into negotiations with the former associate and had employed him with the conscious intention of gaining benefit from his alleged knowledge. For reasons which I have given, it is very unlikely that any firm of solicitors, behaving reasonably, would expect to derive any substantial benefit from such knowledge. Conduct of Baker & McKenzie in recruiting the former associate 70 It is submitted on behalf of the applicant that she, or any other fair-minded observer would be justified in drawing a relevant suspicion from the circumstances surrounding the former associate's employment. In part this appears to be based upon Mr Roche's opinion that the interviewing process was other than that normally followed by Baker & McKenzie in recruiting staff. To some extent this opinion may be attributable to the incorrect assumption that Mr Moses was the partner responsible for staff recruitment when he was, in fact, an employee. Mr Roche asserts that the suspicion is also based upon the interviews which took place between Mr Salgo and the former associate on one occasion and the former associate and three other partners on a second occasion. It was urged that this utilization of resources was unusual in the case of a graduate solicitor. Mr Roche was apparently suggesting that the employment of a junior solicitor would not normally have been treated as a matter of such seriousness. If Mr Salgo or anybody else were involved in a plot to exploit any confidential information which the former associate might bring with him, it would surely have been advisable to limit those with knowledge of the plan to the smallest number possible. Further, Mr Salgo asserts, and there is no challenge to it, that the employment procedure identified by Mr Roche is not normally adopted in the Litigation Department of Baker & McKenzie. 71 I would expect that in a large firm, there would often be occasions on which a partner would seek to employ a solicitor who had caught his or her eye. The extent to which such a partner can avoid the usual recruiting process will vary from firm to firm and partner to partner. There is something quite artificial about Mr Roche's concern in this area. It is difficult to accept that a fair-minded observer would see such departure from a published practice to be in any way suspicious, given the extended and public dealings between the former associate and the legal advisers on both sides in this case. 72 Finally, it was suggested that Baker & McKenzie's failure to disclose their discussions concerning employment with the former associate, their intention to employ him and the fact of his employment prior to my disclosure of that matter are bases for suspicion. Some people, in the position in which Mr Salgo found himself, would have raised the matter with the solicitors for the applicant before commencing the interview process. That approach, with the benefit of hindsight, has attractions. At least it would have avoided the unpleasantness with which we are now faced. On the other hand, from Mr Salgo's point of view at the time, it may not have appeared necessary or appropriate. His actions may have reflected, to some extent, the nature of his relations with the solicitors for the applicant, his own experience and perceptions of the knowledge acquired by associates of particular cases in the course of their employment, the depth of his own convictions concerning confidentiality and his expectations of others in that regard. After all, no complaint is made of the fact that, from time to time, and indeed on 4 February, the former associate had conversations with legal representatives of one side or the other. Any of those conversations would have provided an opportunity to communicate, intentionally or unintentionally, confidential information. The context of a job interview is inherently no more likely to prompt such disclosure. If anything, as Mr Salgo has suggested, one might expect a candidate for employment to avoid any disclosure of personal impropriety, at least until the potential employer has disclosed unorthodox views as to ethical standards. 73 It was suggested that there might be a perception that the price of obtaining employment was the provision of confidential information or alternatively, that the employment may have been a reward for information previously communicated, either at the interviews or perhaps at some earlier stage, in other words, that Baker & McKenzie had suborned the former associate. One cannot deny the bare possibility of such an occurrence, but that is not a reason to suspect that it occurred. All of these arguments assume that a fair-minded observer would start with the propositions that Baker & McKenzie were anxious to obtain an illicit advantage and that the former associate was desirous of using such information as he had to benefit either that firm or himself. Such assumptions are not consistent with my experience of human nature, nor do I think that they are shared by most fair-minded observers. As was pointed out by Steytler J in Newman (at 320), there is a view that mobility in the legal profession is a good thing. Further, it is in the public interest that the services of solicitors be freely available and that clients have the opportunity to choose their legal advisers. If such a pessimistic view of human morality is justified, then these objectives will be difficult to achieve. Associates, articled clerks and young solicitors expect, and are expected to move within the profession. It is one thing to restrict that movement where there is a reasonable basis for fearing mischief, but that is not a good reason for alleging mischief in the absence of evidence. 74 If the applicant's case is taken at it's highest, an associate could not take employment with any solicitor retained in a case on the Judge's docket at the time of the termination of the associate's employment. It is quite likely that a Judge will say something about a case as soon as he or she has first addressed it. It is true that as the case progresses, those views become firmer and arguably more valuable to either side, but the opportunities to exploit such views diminish. Lengthy trials would also pose a particular problem, as would urgent cases arising towards the end of the associate's employment. An associate would always be faced with the risk that his or her long-term employment arrangements would be disrupted by the Judge's sudden or extended involvement in a trial in which the associate's future employer was acting. 75 With the benefit of hindsight, it may have been advisable to have said something about the proposed appointment before it took place, although the date for commencement of employment may have been a more critical point. My disclosure may have pre-empted any such communication by Baker & McKenzie. They have not said in their material that they had intended to communicate the matter to the solicitors for the applicant, but that does not preclude the possibility that at some stage, Mr Salgo may have realized that there could be some concern on the part of the applicant and taken steps to allay it, perhaps by communicating the arrangements which he then had in mind as subsequently disclosed in the letters of 9 and 14 March. 76 It was suggested by counsel for the applicant that had I not disclosed the matter, then the former associate may have commenced work at Baker & McKenzie and remained there throughout the balance of the trial, without the applicant's becoming aware of it. It seems to me, however, that the intention that he commence work whilst the trial was in progress suggests the absence of any belief on the part of Mr Salgo or anybody else at Baker & McKenzie that there was anything questionable about the appointment. It is true that Baker & McKenzie is a large firm in Sydney and that the applicant's solicitors are based in Brisbane. One cannot assume that they would inevitably have become aware of such employment. However Baker & McKenzie would have been taking a substantial risk in allowing him to start work with them if they had anything to hide. An arrangement such as that which is presently in place would have been more likely to conceal the fact that there had been inappropriate contact between Mr Salgo and the former associate. The informed observer would also take account of such matters. I can see no basis for inferring from the circumstances surrounding the former associate's appointment that it involved anything which might cause disadvantage to the applicant in the course of this trial. Those circumstances cannot, therefore, contribute to any suspicion concerning the fairness of the trial.