Jing Li v Jin Lian Group Pty Ltd

Relevant principles

1. The relevant principles are not in dispute.
2. The Court's jurisdiction to restrain a legal practitioner from acting in proceedings is an exceptional one and discretionary. The jurisdiction must be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the legal practitioner of his or her choice without due or good cause: Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 at [2] (Middleton J), citing Grimwade v Meagher [1995] 1 VR 446 at 452; Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 at [35] and [51].
3. The Court must also be mindful that sometimes such applications may be misused or quite inappropriately pursued by a party to proceedings: Bahonko v Nurses Board of Victoria (No 3) at [3].
4. Following a detailed review of the authorities in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181, Brereton J summarised the position as follows at [76] (omitting full case citations): 76 The foregoing authorities establish the following:- • During the subsistence of a retainer, where the court's intervention to restrain a solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court's jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting for clients with competing interests [Prince Jefri Bolkiah]. • Once the retainer is at an end, however, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) [Prince Jefri Bolkiah]. • After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention, such duty having come to an end with the retainer [Prince Jefri Bolkiah; Belan v Casey; Photocure ASA; British American Tobacco Australia Services Ltd; Asia Pacific Telecommunications Ltd; contra Spincode Pty Ltd; McVeigh; Sent]. • However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v Pattern Holdings; Spincode Pty Ltd; Holborow; Williamson v Nilant; Bowen v Stott; Law Society v Holt]. Prince Jefri Bolkiah does not address this jurisdiction at all. Belan v Casey and British American Tobacco Australia Services Ltd are not to be read as supposing that Prince Jefri Bolkiah excludes it. Asia Pacific Telecommunications Ltd appears to acknowledge its continued existence. • The test to be applied in this 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 [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Holborow; Bowen v Stott; Asia Pacific Telecommunications Ltd]. • The jurisdiction is to be regarded as exceptional and is to be exercised with caution [Black v Taylor; Grimwade v Meagher; Bowen v Stott]. • Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause [Black v Taylor; Grimwade v Meagher; Williamson v Nilant; Bowen v Stott]. • The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief [Black v Taylor; Bowen v Stott].
5. As to the claim of breach of confidence, it is useful to recall some basic principles. The elements of an action for breach of confidence are: first, identification with specificity, and not merely in global terms, of the information claimed to be confidential; second, the information which forms the basis of the confidence must have the quality of confidentiality; third, the confidential information must be disclosed in circumstances which impose on the recipient an obligation to respect the confidentiality of the information; and fourth, there is an actual or threatened misuse of that information by the recipient, without the consent of the plaintiff: Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services & Health (1990) 22 FCR 73 (Smith Kline & French) at 87 (Gummow J), citing Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443. See also Coco v AN Clark (Engineers) Ltd (1969) RPC 41 at 47; Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104 at 117.
6. With respect to the obligation of confidence, it is relevant to enquire whether the information was disclosed or imparted for a limited purpose: Castrol Australia Pty Ltd v EmTech Associates Pty Ltd (1980) 33 ALR 31 at 46; Ackroyds (London) Ltd v Islington Plastics Ltd (1962) RPC 97 at 101 and 104. Where information has been imparted for a limited purpose, the obligation is not to use or disclose that information for any other purpose. The obligation of confidence is imposed where the circumstances show that the recipient knew or ought to have known that the information was imparted for a limited purpose: Smith Kline & French at 95-96; Half Court Tennis Pty Ltd v Seymour (1980) 53 FLR 240 at 255; Coco v AN Clark (Engineers) Ltd at 48; Mense v Milenkovic [1973] VR 784 at 801.
7. One further matter should be mentioned. JLG drew attention to the remarks of Hayne J in Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd [1995] 1 VR 1 at 5 that: Although it is necessary to be acutely conscious of the fact that the court is asked to interfere with the right of a litigant to be represented by the solicitor of the litigant's choice, it is not necessary to conclude that harm is inevitable (or well nigh inevitable) before acting to restrain a possible breach of the duty that a solicitor owes to clients and former clients to keep confidential information given to the solicitor in confidence and not use that information against the interests of the client who gave it to the solicitor. …It is enough to say that I consider that injunction should go if there is a real and sensible possibility of the misuse of confidential information. In Re IPM Group Pty Ltd [2015] NSWSC 240 at [33], Black J, after referring with approval to these remarks in Farrow Mortgage Services v Mendall Properties, went on to observe that the test of a real and sensible possibility of the misuse of confidential information was followed in Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd [2014] FCA 1065 at [34] (Beach J). Mills Oakley and Mr Li did not dispute that this was the appropriate test in the present case.

The winding up proceedings

1. On 23 January 2018 Mr Li commenced these proceedings seeking to wind up JLG on the grounds of insolvency, relying upon the failure to comply with a statutory demand dated 22 December 2017: Corporations Act 2001 (Cth) (Corporations Act), ss 459P and 459Q. The statutory demand claimed a debt owed by JLG to Mr Li in the amount of $1,600,000. The affidavit of debt of Mr Li affirmed 22 December 2017 deposed that the debt was due and payable pursuant to a loan agreement dated 17 December 2013 between Mr Li and JLG (the December 2013 agreement).
2. The notice of appearance filed by JLG states that it opposes the winding up application on five grounds. Significantly, none of the grounds relied upon relate to the solvency of JLG.
3. Grounds 1, 2 and 3 raise what might be described as technical objections to the statutory demand issued by Mr Li. It is common ground that no application to set aside the statutory demand was made by JLG. It is unnecessary to refer to the detail of these grounds, nor whether s 459S of the Corporations Act might preclude reliance upon those grounds, without leave of the Court, on the basis that JLG could have applied to set aside the statutory demand: s 459S(1)(a).
4. Grounds 4 and 5 are related and contend that Mr Li is not a creditor of JLG (ground 4) or JLG does not owe the whole of the debt to Mr Li (ground 5).
5. Ground 4 relies upon the contention that by deed of assignment of debt dated 30 June 2016 (the June 2016 deed) between Norwest, JLG, and Mr Botao Hong (Mr Hong), Norwest (and Mr Li who executed the deed on behalf of Norwest) acknowledged that Norwest was the creditor which was owed monies pursuant to the December 2013 agreement relied upon by Mr Li in the statutory demand. JLG contends that Mr Li (and Norwest) are estopped from denying this position.
6. JLG's evidence in opposition to the winding up application includes the defence and amended defences of Norwest verified by Mr Li and filed in separate proceedings brought by Erectus Pty Ltd and Mr Hong against, among others, Norwest in the Supreme Court in 2017 (2017/141329) (the Hong proceedings). Those defences contain admissions by Norwest that:

• Mr Hong, Norwest and JLG entered into a tripartite agreement entitled "Deed of Assignment" on 1 July 2016;
• as of the date of the deed of assignment, JLG was indebted to Norwest in the sum of $1,000,000 plus interest;
• the relevant terms of the deed of assignment are: 21. On 1 July 2016, the second plaintiff [Hong], the first defendant [Norwest] and JLG entered into a tripartite agreement entitled "Deed of Assignment". 22. As of the date of the Deed of Assignment, JLG was indebted to the first defendant [Norwest] in the sum of $1,000,000.00 plus interest. 23. The relevant terms of the Deed of Assignment are: (a) JLG is to pay the Outstanding Principal to the second plaintiff [Hong] on or before 17 December 2016; (b) the first defendant [Norwest] is to pay interest on the Outstanding Principal on the Settlement Date of Unit BP06; (c) the first defendant [Norwest] will remain liable for transferring Unit BP06 to the second plaintiff [Hong] in accordance with the Deed of Loan; and (d) upon payment by JLG to the second plaintiff [Hong] in accordance with the deed of assignment, the first defendant [Norwest] will forgive the equivalent amount of the debt owed by JLG to the first defendant [Norwest]. (Emphasis added in JLG's submissions)

1. In his affidavit of 5 April 2018 in the winding up proceedings, Mr Li deposed that the defences filed by Norwest in the Hong proceedings were in error in stating that the $1,000,000 debt was owed by JLG to Norwest and that the admission in par 22 of the amended defence that JLG owed the $1,000,000 to Norwest was also in error. Mr Li annexed to his affidavit a draft deed of assignment which he said was prepared by Norwest's then solicitor, CMI Legal, in around April 2016, before Mr Hong instructed his own solicitors to prepare an alternative deed of assignment. It is plain that the draft deed of assignment prepared by Mr Li's solicitors in April 2016 is in quite different terms to the deed which was signed by Norwest, JLG and Mr Hong on 30 June 2016.
2. The June 2016 deed is not well drafted. The operative terms of that deed purport to effect what is described as an assignment (which is more accurately a novation) an obligation owed by Norwest to Mr Hong of $399,450, to JLG (cl 1(a)).
3. The winding up proceedings are next listed before the Court on 23 April 2018 with a view to being given a hearing date on that occasion.

A. The potential for Mills Oakley solicitors to be witnesses in the winding up proceedings

1. JLG pointed to two matters in support of its contention that Mills Oakley solicitors were potential witnesses in the winding up proceedings. First, that Mills Oakley had prepared the defence and amended defence of Norwest in the Hong proceedings. According to the submission, there is a "clear potential" for Mills Oakley solicitors and in particular, Mr Ziv Ben-Arie (a partner) and Mr Vlad Vishney (an employed solicitor), to be witnesses in the winding up proceedings on the topic of whether Mr Li's recent assertions concerning error in the defence(s) are true or not.
2. Second, that Mills Oakley drafted an affidavit of Mr Jin of 17 July 2017 in the Hong proceedings, and their evidence would be relevant to the circumstances in which Mr Jin's affidavit omitted reference to the alleged conversation between Mr Li and Mr Jin in June 2016, which preceded the June 2016 deed.

Admissions by Norwest and Mr Li in the Hong proceedings

1. Counsel for JLG outlined two hypotheticals concerning the instructions likely to have been received by Mills Oakley from Mr Li in the Hong proceedings which, according to the submission, meant that Mills Oakley must have an interest in justifying their own conduct in the Hong proceedings; or that Mills Oakley might be exposed to a claim by Norwest or Mr Li for loss arising from negligently preparing the defences in the Hong proceedings; or that Mills Oakley knew that Mr Li's recent affidavit asserting error in the defences filed in the Hong proceedings was incorrect.
2. As to the last matter JLG submitted that this would place the solicitors in an impossible position because they would be subject to conflicting duties to advance their client's case (which was said to be inconsistent with their personal knowledge) and also under a duty to provide their true evidence. Reference was made to the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW), r 10.
3. There are a number of difficulties with JLG's submission. First, in oral argument senior counsel for JLG clarified that it was not submitted that any solicitor from Mills Oakley had engaged in any improper conduct as an officer of the court, either at the time of filing the defences of Norwest in the Hong proceedings, or on this application in filing and reading Mr Li's affidavit of 5 April 2018, which deposed to his asserted error when verifying Norwest's defences in the Hong proceedings. JLG did not submit that any solicitor from Mills Oakley knew that the statements in Mr Li's 5 April 2018 affidavit (that the verified defences filed in the Hong proceedings were in error), was false or otherwise incorrect. Why, in these circumstances, there was a potential for Mills Oakley solicitors to give evidence about the asserted error by Mr Li was not satisfactorily explained.
4. Second, it does not follow that because solicitors from Mills Oakley might be able to give "relevant" evidence (which is a theoretical possibility) concerning the asserted error by Mr Li when verifying the defence of Norwest, that they are likely to give evidence in the winding up proceedings.
5. Third and related to the second matter, counsel for Mr Li informed the Court that he did not intend to call any witnesses from Mills Oakley on the hearing of the winding up proceedings. Senior counsel for JLG responded that the Court's inherent jurisdiction to restrain solicitors from acting in a particular case is not determined by the decision of a party not to adduce evidence from the solicitors acting for the party. So much may be accepted as a general proposition but it is necessary that the Court make a realistic assessment of the potential for solicitors from Mills Oakley to be material witnesses and whether their personal integrity is likely to be put in issue. Speculation at an abstract theoretical level is insufficient: Westpac Banking Corporation v Newey [2013] NSWSC 533 at [22].

Mr Jin's July 2017 affidavit in the Hong proceedings

1. Mr Jin deposes in his 14 March 2018 affidavit that he does not speak or understand English and that his affidavit was prepared with the assistance of his (Chinese) Mandarin-speaking solicitors. His affidavit addresses the circumstances in which he affirmed an earlier affidavit dated 17 July 2017 in the Hong proceedings. This followed an interview by two solicitors from Mills Oakley, Mr Vishney and Mr Alec Brown, with the assistance of a translator, on 17 July 2017.
2. Senior counsel for JLG pointed to the omission in Mr Jin's July 2017 affidavit of any reference to the conversation between Mr Li and Mr Jin in June 2016, which preceded the June 2016 deed. Counsel for JLG suggested that this omission might be relied upon in the winding up proceedings as affecting Mr Jin's reliability or credit as a witness. It followed, according to the submission, that there is a potential that Mills Oakley's solicitors will give evidence that Mr Jin did not give instructions concerning his alleged conversation with Mr Li in June 2016 when they obtained the July 2017 affidavit.
3. Again, there are difficulties with JLG's submission. First, Mr Jin has not deposed in the winding up proceedings that he told Mills Oakley during the interview on 17 July 2017 of his alleged conversation with Mr Li in June 2016. (I put aside the question of the admissibility of any such evidence.)
4. Second, the submission assumes that, when obtaining Mr Jin's affidavit in July 2017, Mills Oakley's solicitors asked questions of Mr Jin which should have elicited a response from him disclosing the alleged conversation with Mr Li in June 2016. Whether or not that is the case is a matter of speculation.
5. Third, Mr Li has not sought to adduce evidence from Mills Oakley as to what Mr Jin said or did not say during his interview on 17 July 2017.
6. Given the position stated by counsel for Mr Li as to the witnesses to be called at the hearing of the winding up proceedings, this is not a case in which it should be concluded that a solicitor from Mills Oakley is likely to be a witness in such proceedings. Further and in any event, I am not persuaded that the personal integrity of any solicitor from Mills Oakley acting for Norwest in the Hong proceedings is likely to be put in issue in the winding up proceedings.

B. Confidential information

1. JLG relies upon the affidavits of Mr Jin of 14 March 2018 and 5 April 2018 in support of its contention that confidential information was disclosed by Mr Jin to Mills Oakley on two occasions in July 2017, one relating to the Hong proceedings, the other relating to the Golden Stone matter.
2. In response, Mills Oakley and Mr Li relied on affidavits of Ms Tianqi Li affirmed 29 March 2018 (the translator with respect to Mr Jin's 17 July 2017 affidavit in the Hong proceedings), affidavits of Mr Vlad Vishney sworn 4 April 2018 and 9 April 2018, an affidavit of Mr Alec Brown sworn 4 April 2018, and an affidavit from Mr Li affirmed 5 April 2018. (Mr Brown is presently employed by another legal firm.)
3. There was no cross-examination of any of the deponents to the affidavits which were read on the present application.

17 July 2017 interview of Mr Jin

1. In his 14 March 2018 affidavit, Mr Jin addresses the circumstances in which he signed his affidavit dated 17 July 2017 in the Hong proceedings. Mr Jin deposes that:

• he was not asked to tell his story, but was asked questions by Mr Vishney and his colleague regarding his prior dealings with Mr Li, his prior dealings with Mr Hong and the work that he did for him, whether Mr Hong had pursued Mr Jin or JLG for payment of debts owing to him and whether Mr Jin had made any payments to Mr Hong and negotiations and conversations with him about any payment proposal;
• he recalled speaking with Mr Vishney and his colleague about JLG's funding strategies, including his plans for the sale of various assets of JLG, himself and other associated entities, and how he was going about organising for the further development of a "consented" (sic) development in Carlingford.

1. The affidavits of Mr Vishney, Mr Brown and Ms Li, the interpreter, put in issue the assertions in Mr Jin's affidavit concerning the circumstances in which the 17 July 2017 affidavit was obtained, and what (if any) other information was disclosed by Mr Jin to the Mills Oakley solicitors on that occasion. In particular, Mr Vishney disputed that Mr Jin disclosed information about his or JLG's financial position or plans. Mr Vishney deposed that there was never any need or request for Mr Jin to divulge such information and that he did not recall having any such discussion with Mr Jin. While Mr Jin disagreed with Mr Vishney's affidavit evidence, his reply affidavit was in the most general terms. Mr Jin deposed (in par 9.1): Although I did not recall the exact questions put to me by Mr Vlad Vishney at the meeting, I did recall that I divulge (sic) information about [JLG's] and my dealings with Mr Boato Hong and [Mr Lin], and some general background of those dealings.
2. The absence of cross-examination presents a substantial difficulty for JLG where there is competing and conflicting affidavit evidence. Two matters call for particular comment.
3. The first concerns JLG's submission that whilst Mr Jin might have understood that his final affidavit would be deployed in the Hong proceedings, his actual conversation with Mills Oakley must have taken place where it was understood that they would keep such information and knowledge confidential in JLG's interests (particularly where they had not advised Mr Jin to seek independent legal advice). The first part of that submission can be accepted; however the latter part of the submission must be rejected.
4. First, there is a factual dispute as to what Mr Jin disclosed to the Mills Oakley solicitors on 17 July 2017. It is not possible, given the absence of cross-examination, to make a finding in the terms sought by JLG that Mr Jin divulged information about his or JLG's financial position or plans to the Mills Oakley solicitors. I would add that the probabilities are that it is unlikely that Mr Jin disclosed such information to those solicitors, given the circumstances and purpose of the interview and the unchallenged affidavit evidence of Mr Vishney that there was no need or request for Mr Jin to divulge such information.
5. Second, as indicated, it is a basic requirement of an action for breach of confidence that before material be recognised as having the character of confidential information, the information in question must be identified with precision and not merely in global terms: Smith Kline & French at 87; Carindale Country Club Estate v Astill (1993) 42 FCR 307 at 314 (Drummond J) (citing Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) at 443). Even if it be assumed that the factual dispute as to the information disclosed by Mr Jin was resolved in JLG's favour, the required precision or specificity of the information allegedly disclosed is lacking in the evidence adduced by JLG on this application. The information is identified by Mr Jin merely globally as including "[JLG's] funding strategies" and "some general background of those dealings" between Mr Jin, Mr Hong and Mr Li. That also makes it more difficult to be satisfied that the information so described by Mr Jin was (on the present assumption) imparted or received or retained by Mills Oakley in circumstances which give rise to an obligation of confidence: Carindale Country Club Estate v Astill at 314.
6. Third, it needs to be kept in mind that Mills Oakley was interviewing Mr Jin as a witness. He was not a client. On the evidence, Mr Jin volunteered information in answer to the questions asked of him by the Mills Oakley solicitors through the interpreter. There is no evidence that Mr Jin placed any qualification on the use that could be made of such information by the solicitors, unless included in his final affidavit. Nor is there any evidence that Mr Jin told the Mills Oakley solicitors that the information he disclosed was confidential to JLG or himself. Nor was the proposition put to Mr Vishney and Mr Brown in cross-examination, that they understood that any information disclosed by Mr Jin, that was not included in his final affidavit, was disclosed on the basis that it be kept confidential in JLG's interest.
7. The onus lies on JLG to establish with precision the information that possesses a confidential quality which was allegedly disclosed by Mr Jin to the Mills Oakley solicitors on 17 July 2017. JLG has not discharged that onus. Even on the assumption, favourable to JLG, that information of the type described by Mr Jin in his affidavit was disclosed during the witness interview on 17 July 2017, the general nature of the information identified by Mr Jin, and the circumstances in which it was conveyed to Mr Vishney and Mr Brown, would not impress it with a confidential character.
8. The second matter which calls for comment concerns the circumstances of the witness interview with Mr Jin on 17 July 2017. So far as I understand JLG's submissions, no finding is sought that the draft affidavit in final form in the Hong proceedings was not read back to Mr Jin by the translator before he signed the affidavit and that he simply signed where indicated without being told of the actual contents of the final affidavit.
9. However, if it were necessary to make a finding on this issue, I am not persuaded, given the absence of cross-examination, that Mr Jin's July 2017 affidavit was obtained in the circumstances to which he deposes, rather than in the circumstances deposed to by Ms Tianqi Li and Mr Vishney and Mr Brown.

Golden Stone matter

1. The final matter relied upon by JLG is that information was obtained by Mills Oakley on 20 July 2017 when discussing the proposed retainer in relation to the Golden Stone matter, which was said to be clearly confidential and has the capacity to be used against JLG in the current winding up proceedings, either as a matter of fact or in relation to forensic decisions. The proposed retainer concerned a debt claim against JLG by Golden Stone, as well as caveats lodged by Golden Stone against properties owned by JLG, Mr Jin and family members and/or associated entities. The factual basis for this submission is as follows.
2. It is common ground that on 20 July 2017 Mr Jin and his daughter, Carol Jin, attended a meeting at the offices of Mills Oakley with Mr Ziv Ben-Arie and Mr Vishney. Mr Jin deposed that he spoke in Mandarin with his daughter, who then spoke in English to the solicitors.
3. Mr Jin also deposed that he recalled specifically discussing with those solicitors the commercial arrangements that were negotiated and discussed with the representatives of Golden Stone at the time an agreement was entered into between Golden Stone and JLG, the funds that Golden Stone advanced to JLG, payments made to Golden Stone by JLG, negotiations that Mr Jin had with Golden Stone, challenging the loan and caveats lodged by Golden Stone, and potential payment options to release the entirety of the claims.
4. In his affidavit sworn 9 April 2018, Mr Vishney deposed (in par 10) that the discussion at the meeting on 20 July 2017 was of a general nature where Carol Jin described the problems, no documents were provided and no advice was given in the meeting. Mr Vishney deposed that at the conclusion of the meeting, he said words to the following effect: Vishney: We will consider what you have told us and send you our cost agreement and disclosure with an estimate of fees, as well as a request for information and documents. If you wish to proceed with us, please sign and return the paperwork or just simply give us instructions to go ahead and start working on the matters. Carol: Ok.
5. There is no evidence from Carol Jin either disputing Mr Vishney's affidavit evidence, or deposing to the terms of her discussions with the Mills Oakley solicitors when translating her father's statements and those of the Mills Oakley solicitors at the meeting.
6. On 21 July 2017, Mills Oakley sent a legal services costs agreement to Mr Jin. Under the heading "Scope of Our Legal Services", cl 3.2 provided: 3.2 We understand that the scope of the legal services we will provide for this matter is as follows: (a) Meet with you in conference and obtain instructions; (b) Review the loan agreement between Jin Lian Property Group Pty Ltd and Golden Stone Property Group Pty Ltd; (c) Prepare 4 lapsing notices and seek to have served by the Registrar General; (d) Write a letter to Golden Stone Property Group Pty Ltd setting out your position regarding the loan and offering terms of repayment of that loan, plus interest as per your instructions.
7. Also on 21 July 2017, Mr Vishney sent an email to Carol Jin requesting documents in relation to the dispute with Golden Stone including loan agreement, copies of all written correspondence with Golden Stone, and details of each of the properties that have caveats to be removed.
8. On 26 July 2017, Mills Oakley sent an email to Carol Jin following up whether she wished them to proceed. On the same day, Carol Jin responded that her father was still thinking about it. The draft costs agreement was never signed by Mr Jin and Mills Oakley did not hear further from him or his daughter.
9. On 4 September 2017, Mills Oakley sent an account by email in an amount of $1,401.95 in relation to the "development dispute" which was subsequently paid (it seems by JLG) on 14 September 2017. The bill included: attending in conference with Mr Jin and Carol Jin to obtain instructions, meeting on 20 July 2017 and drafting and sending initial email to client requesting information and documents on 21 July 2017.
10. The evidence does not bear out JLG's submission that confidential information was disclosed by Mr Jin to the Mills Oakley solicitors on 20 July 2017. First, there is no challenge to Mr Vishney's affidavit evidence that the discussion on 20 July 2017 was of a general nature, that no documents were provided and that no advice was given at the meeting. Second, there is no evidence from Carol Jin, who acted as translator at this meeting, as to what she said to the Mills Oakley solicitors. Third, no attempt has been made by JLG to identify with any precision what is the information alleged to have been divulged to Mills Oakley on 20 July 2017 (by Carol Jin acting as translator for her father) that possesses a confidential character.
11. This is not a case where the information cannot be identified by JLG for fear of disclosure. JLG does not rely upon solvency as a ground of opposition to the winding up proceedings. Nor is there is any basis in the evidence for finding that the Mills Oakley solicitors made notes, formed views and opinions of Mr Jin and observed things that Mr Jin may have forgotten or overlooked: cf the remarks of Gillard J in Yunghanns v Elfic (VSC, 3 July 1998, Gillard J, unreported), which were cited by Sackar J in Fakhrabadi v Ashrafinia [2011] NSWSC 697 at [30].
12. On the contrary, accepting Mr Jin's explanation in his 5 April 2018 affidavit (par 10) that he had not previously disclosed the Golden Stone matter to his lawyers before 4 April 2018 because he did not know that the information concerning his consultation with Mills Oakley in July 2017 was relevant and important to the winding up proceedings, tends against JLG's contention that the information which Mr Jin disclosed during that meeting possessed a confidential quality. That is, had Mr Jin disclosed confidential information to the Mills Oakley solicitors on 20 July 2017, it could be expected that he would have immediately recalled having done so and drawn this to the attention of his solicitors when he first became aware that Mills Oakley were acting as solicitors for Mr Li. On the evidence, Mr Jin became aware that Mills Oakley was acting for Mr Li, at the latest, on 29 January 2018. That Mr Jin did not do so is telling.
13. For these reasons, JLG has not demonstrated that there a real and sensible possibility of misuse of confidential information by Mills Oakley either with respect to the witness interview with Mr Jin on 17 July 2017, or the meeting in relation to the proposed retainer in the Golden stone matter on 20 July 2017.

Discretionary considerations

1. If it were necessary to determine, there are discretionary considerations that weigh against granting the relief sought by JLG insofar as JLG relies upon the Court's inherent jurisdiction to restrain a solicitor from acting.
2. First, the evidence establishes that Mr Li has established a relationship of trust and confidence in Mills Oakley having used that firm for over a year. Due weight should be given to not depriving Mr Li of his choice of lawyer.
3. Second, the timing of the application is relevant given the cost and inconvenience of requiring Mr Li's existing lawyers to cease to act when the matter is about to be given a hearing date. In this regard, Mr Li gave unchallenged evidence that he has incurred substantial legal fees in preparing the matter and would be greatly disadvantaged if required to engage new lawyers, not only in terms of incurring fees bringing new lawyers up to speed, but also disruption to his business dealings in having to attend meetings and familiarise himself with a new lawyer.
4. Related to this is the delay by JLG in raising its objection. The matter which first prompted JLG, through its solicitors on 9 March 2018, to request Mills Oakley to cease to act was said to be the interview with Mr Jin in July 2017 in relation to the Hong proceedings. But there is no adequate explanation for the delay in raising that matter, given the affidavit evidence of Mr Zhu of 5 March 2018 (the solicitor for JLG), that Mr Jin and the other directors of JLG received the statutory demand on 29 January 2018 (which was signed by Mills Oakley on behalf of Mr Li).

Conclusion and Orders

1. The application by JLG to restrain Mills Oakley from acting as the solicitors for Mr Li should be dismissed. The parties are agreed that costs should be reserved given the indication by senior counsel for Mills Oakley that his client wishes to be heard on the form and nature of any costs order. I will give directions in relation to the filing of short written submissions dealing with that question, which will be determined on the papers.
2. Accordingly, I make the following orders: 1. The interlocutory process filed 15 March 2018 be dismissed. 2. Costs reserved. 3. Direct that the parties file and serve short written submissions (not exceeding three pages) on the question of costs as follows: (a) submissions of Mills Oakley and the plaintiff within seven days and (b) submissions in response by the defendant within a further seven days. The question of costs will be dealt with on the papers.

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DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 April 2018