Kalenik v Apostolidis [2005] VSC 27

Supreme Court of Victoria|2005-02-18|Before: Hansen J

Legal practitioners - Solicitor - Acted for opposite party to defendant in other litigation settled by confidential terms - Now acting for plaintiff against defendant - Solicitor never acted for defendant - Alleged to possess confidential information concerning defendant from first case - Whether solicitor should be restrained from acting.

Application by the defendant to restrain the plaintiff from continuing to retain as her solicitors Messrs Leo Dimos & Associates (Dimos).

The defendant, John Ioannis Apostolidis (who I will refer to as the defendant or John), has never retained Dimos to act for him.

The defendant has a brother, Kiriakos (Ken) Apostolidis (who I will refer to as Ken). Dimos acted for Ken as plaintiff in a Commercial List proceeding 2101 of 2001. I shall refer to this as the partnership proceeding. The present defendant (John) was the defendant in the partnership proceeding. The partnership proceeding was compromised by a Deed made on 12 May 2003.

The present proceeding was commenced as long ago as 13 November 2000. The plaintiff, Zorica Kalenic, claimed in the statement of claim endorsed on the writ that from in or about May 1993 until on or about 11 March 2000 she and the defendant had lived together in a de facto relationship within the meaning of Part IX of the Property Law Act 1958 (the Act) and sought orders under that Part adjusting in her favour the interest of the defendant in his property.

The plaintiff filed a second further amended statement of claim on 14 January 2004. The statement of claim refers to property of the parties, and in particular to certain property and corporations in which the defendant is alleged to have an interest. The corporations are DSK Holdings Pty Ltd (DSK Holdings), Azura Pty Ltd (Azura) and Yarrabee Investments Pty Ltd (Yarrabee), each of which is alleged to have been owned or controlled by the defendant. It is alleged that DSK Holdings conducted furniture businesses known as Janni's Furniture and Bedding, and Central Furniture, at Oakleigh. There is reference to a furniture business conducted by DSK Holdings at Dandenong called Leather Lounges Direct. There is also reference to the defendant having acquired an interest in Imex Nominees Pty Ltd (Imex), and an interest in a furniture business and/or factory in Malaysia. It is alleged that during the relationship the plaintiff made financial and non-financial contributions to the acquisition, conservation and improvement of the defendant's property including the furniture businesses and to the financial resources of the defendant and the corporations owned and controlled by him including the furniture businesses operated by him or on his behalf by DSK Holdings, Imex and Yarrabee, and land holdings owned and managed by him or on his behalf by Azura and DSK Holdings. Particulars of the contributions are included in the pleading. They refer to advances of money, to work as a homemaker, and to assisting the defendant in his business activities, including working in the businesses. In summary, the plaintiff seeks relief to the effect that the parties hold their respective interests in the property in equal shares or otherwise as the Court deems appropriate.

In a defence filed in March 2004 it is alleged that although the parties were in "a relationship of a boyfriend and a girlfriend" they were not in a de facto relationship within the meaning of the Act. Then, while admitting to owning the majority of the shares in DSK Holdings, to owning shares in Azura, to owning all the shares in Yarrabee, and to having acquired property during the time that the plaintiff resided with the defendant, the defence essentially denied the plaintiff's alleged contributions. It alleged, in the alternative, that any contributions she made were more than compensated for by contributions of the defendant to the plaintiff. The defence concludes with a counterclaim that the plaintiff remove a caveat lodged on certain property of the defendant.

On 19 February 2004 the plaintiff's then solicitors filed and served a notice that they had ceased to act for her in the proceeding. On the same day the defendant's then solicitors received a letter from Dimos advising that that firm was instructed by the plaintiff to take over the conduct of the case on her behalf. Dimos has acted for the plaintiff since then.

In June 2004 the defendant instructed David Tonkin & Associates (Tonkin) to act for him in the proceeding.

On 19 August 2004 Tonkin filed the present summons to restrain Dimos from acting.

The defendant did not swear an affidavit in support of the application. The only affidavit in support is that of the defendant's solicitor David Keith Tonkin. The significance of the defendant not having sworn an affidavit is that in deposing as to the defendant's views and instructions, and as to past matters, Tonkin's affidavit is hearsay. It also meant that the defendant could not be cross-examined as to the merits of the application.

Tonkin states that on learning of Dimos' retainer the defendant was unhappy because Dimos had acted for his brother Ken in the partnership proceeding. Tonkin acted for the defendant in that proceeding, which he described as "an acrimonious action". Tonkin stated that the defendant was concerned that the plaintiff (Zorica) had formed an alliance, or at least a friendship, with Ken. In the partnership proceeding Zorica had provided a witness statement to be used in Ken's case.

The defendants to the partnership proceeding were John, DSK Holdings, Azura and Yarrabee. The statement of claim in the partnership proceeding was an exhibit to Tonkin's affidavit. It alleged that in or about 1990 Ken and John agreed to form an equal partnership to conduct trading ventures. In performance of the partnership agreement, among other things, the parties traded under the name Janni's Furniture and Bedding, Central Furniture, and Leather Importers and Manufacturers; John incorporated DSK Holdings to which the business of Janni's Furniture and Bedding was transferred and thereafter DSK Holdings conducted that and the other businesses; John incorporated Azura for the purpose of purchasing land from which the business could be conducted, and Azura acquired land; and John set up a manufacturing plant in Malaysia using assets of DSK Holdings. Imex is also referred to. However, in breach of the agreement and his obligations as a partner, John established the corporations and businesses on an unequal basis, to the disadvantage of Ken. The relief claimed included the following: damages; declarations which included that Ken was entitled to one half of the shares in DSK Holdings and Azura, that Azura held property on trust for Ken and John equally, that Yarrabee held its business on trust for Ken and John equally, and that Ken was entitled to one half of the equity in the Malaysian plant; equitable compensation; accounts and inquiries. Noting the defendants in Ken's claim and that the claim referred to an interest in a factory in Malaysia and in Imex and Janni's Furniture and Bedding, being entities the subject of Zorica's claim, Tonkin stated that:

"Accordingly, the way in which John and others conducted his business through the above entities for the period 1993 to 2000 is a matter which was an important issue in Ken's proceeding and is also an important issue in the present proceeding."

I interpolate that Tonkin did not exhibit the defence or any other document filed in the partnership proceeding. As a result, I do not know what was admitted by the defendant or was otherwise in issue on the pleadings in the partnership proceeding, or what may be ascertained from other documents on the court file.

The partnership proceeding was compromised by a Deed made on 12 May 2003. The deed is a confidential exhibit to Tonkin's affidavit. In recitals to the Deed it is stated that the defendants had denied liability, that the proceeding had been listed for the hearing of a preliminary issue commencing on 8 May 2003 on an estimate of five days, and that the parties had decided to settle Ken's claim. The terms of the settlement are set out in the Deed. Clause 7 is a confidentiality clause; it provided as follows:

"7. The parties agree to keep the following matters confidential to: (a) The parties; (b) To Ken's wife, Anna Apostolidis, and John's partner, Amanda Simpson, upon each of them undertaking to observe clause 7 of this deed; (c) Their professional advisers, save to the extent that their disclosure is required by law:

(i) The contents of this deed;

(ii) ...

(iii) Any matter discussed during the mediation and settlement discussions;

(iv) Any matter the subject of or referred to in the pleadings, any witness statement or any other document filed or served in the proceeding."

I have omitted sub-cl (ii) in accordance with the request of counsel for the defendant as it reflects the nature of the settlement.

The execution of the Deed by Ken and the defendants was witnessed as follows. The witness to Ken's signature was a solicitor, Ian George Hone, who is employed by Dimos and who has the conduct of Zorica's proceeding. Tonkin witnessed the signature of the defendant.

On 31 March 2004 the defendant's then solicitors wrote to Dimos stating that cl 7 of the deed caused Dimos to have a conflict of interest such that it could not act for the plaintiff, and requesting an assurance that Dimos would cease to act failing which an injunction would be sought to restrain the firm from acting.

Dimos replied by facsimile on 5 April 2004. The firm did not intend to cease to act for the plaintiff. There was no reason why the firm should desist from acting simply by reason of cl 7. The letter further stated that the firm had not, and would not, inform the plaintiff of any matters which the Deed required Ken to keep confidential.

Tonkin concluded his affidavit with the following assertions:

(a) In acting for Ken, Dimos must have acquired "knowledge of matters that were clearly relevant to the [proceeding as to the defendant's] involvement in and the general conduct of the businesses ... between 1990 and 2000".

(b) In acting for Zorica, Dimos would be obliged to use "such knowledge" to assist her. Yet they were obligated not to do so by reason of having acted for Ken in the partnership proceeding and cl 7 of the Deed.

(c) In the circumstances there was a real possibility that the interest of Dimos in advancing the plaintiff's case would conflict with their duty to keep "that information" confidential, and to refrain from using it to the defendant's detriment.

Affidavits in opposition

Affidavits in opposition to the application were sworn by Hone and the plaintiff. I summarise their evidence commencing with Hone.

Hone said that the Deed had not been disclosed to the plaintiff, indeed the copy obtained in Ken's proceeding has been treated as confidential and not inspected by himself or any member of staff at Dimos or the plaintiff's counsel. He and the firm were aware of their obligations to hold confidential any information acquired in acting for Ken and which the firm was required to hold confidential. He was not aware of any such information he possessed and which might be of assistance to the plaintiff in this proceeding. He further stated that he was not employed by Dimos at the time of the mediation (presumably being the mediation referred to in cl 7 of the Deed) in the partnership proceeding and save for the outcome was not aware in any detail of what transpired during it, adding that the person who had conducted the mediation on behalf of Dimos was no longer employed by the firm. In particular, he was not aware of any confidential matter relating to the defendant's involvement in and the general conduct of the business referred to in Tonkin's affidavit. He was not aware of any information which he or Dimos acquired in the course of acting for Ken which was not already known to the plaintiff from sources other than himself or Dimos. Further, the plaintiff had given Dimos a written release from any obligation it might otherwise have to disclose to her or use for her benefit any information gleaned in the course of the partnership proceeding and which the firm was obliged not to use.

Hone said that at 25 March 2004 the professional costs and disbursements incurred by Dimos while acting for the plaintiff in the present proceeding were approximately $14,000, although that did not include substantial time spent by the principal of the firm. Since then significant further costs had been incurred, the costs having built up while the defendant delayed in commencing the present application.

I now refer to the plaintiff's affidavit. Dimos was her solicitor of choice. She wished Dimos to act for her in the proceeding rather than that she be forced to obtain legal advice and representation elsewhere. She had not seen the Deed.

The plaintiff then deposed to her knowledge of the defendant's business activities and of the partnership proceeding. As to the former, she was "well familiar with the manner in which the defendant and others conducted the relevant businesses for the period 1993 to 2000". During that period they had lived together as man and wife, "sharing a house and our lives". The defendant did not seek to hide his business affairs from her and she "worked in and assisted in managing the various businesses from 1993 to 2000". During their relationship the defendant's "financial affairs, the businesses and their history were common topics of conversation not simply between the defendant and I but also between myself and members of his family". The businesses expanded and were the focus of their lives. From the discussions with the defendant, his family members and others over that period she was "well familiar with the history and conduct of the businesses prior to 1993". She then referred, by way of example, to being aware, from these sources, of a series of matters concerning the establishment, conduct and organisation of the businesses over the years, referring in doing so to the several corporations and furniture businesses. The defendant either controlled or had a substantial interest in these corporations. She had also met and knew many of the defendant's business associates and suppliers in Australia and overseas. She was "generally aware of sales levels, stock levels and sources, pricing, sales techniques and generally the manner in which the businesses and companies were operated".

As to the matter of the partnership proceeding, the plaintiff said that she was aware of the proceeding, that she was to be called as a witness by Ken and had provided a witness statement, that it settled at trial in around May 2003, and that she was present at and around the Court and Ken's senior barrister's chambers on the days of the trial. She was aware of the negotiations between the parties leading to the settlement and of the facts that the partnership proceeding was settled between all the parties, that the defendant and Ken each gave undertakings to the Court not to contact the other without prior written consent, that the proceeding was struck out by consent, and that the terms of settlement would be required to be kept confidential. In view of the defendant's desire for confidentiality I have omitted reference to further evidence of the plaintiff as to the term of the Deed which states the central obligation of the defendant in settlement of the proceeding. It is sufficient to record that her evidence exactly corresponds with, and bespeaks a knowledge of, the settlement terms in their essence. She was, she said, aware of these matters (that is, the terms) because she was present when counsel communicated offers to Ken, and Ken discussed the final offer with her and members of his family. She was aware of each of the components of the settlement before agreement was reached.

The plaintiff concluded her affidavit with the following statement. She had instructed her previous solicitors and counsel with her knowledge of the defendant's financial affairs, and her pleading was based on that knowledge. She believed that she was already aware of any matter that might be known to Dimos as a result of Dimos having acted for Ken in the partnership proceeding. However, if they held other confidential information she had agreed that they were not required by her retainer to make use of it on her behalf. She believed too that she was aware of every matter referred to in Tonkin's affidavit.

Counsel addressed submissions on the basis of the affidavit evidence. No deponent was cross-examined.

The defendant's submissions proceeded on the following lines.

They commenced with a reference to Dimos' fiduciary obligation to Ken. The relationship of solicitor and client between Dimos and Ken in the partnership proceeding imposed on Dimos an obligation not to disclose information which Dimos received from Ken in confidence. While ordinarily a client might authorise disclosure of such information, cl 7 of the Deed precluded Ken from doing so in relation to information that fell within the categories in sub-paras (i)-(iv) in cl 7. Thus, Ken cannot authorise Dimos to disclose any confidences in these categories to Zorica, or waive the duty of Dimos to keep confidential Ken's communications to Dimos. It appears from an answer to interrogatory that the plaintiff will call Ken as a witness in her case, when Dimos is her solicitor.

The next step in the submission was to refer to the following principle stated by Nettle J in Sent and Prime Life Corporation Ltd v John Fairfax Publication Pty Ltd and Hills[1] as a basis for the injunction:

Authority establishes that the court will restrain a legal practitioner continuing to act for a party to litigation if a reasonable person informed of the facts might reasonably anticipate a danger of misuse of confidential information of a former client and that there is a real and sensible possibility that the interest of the practitioner in advancing the case in the litigation might conflict with [the] practitioner's duty to keep the information confidential, and to refrain from using that information to the detriment of the former client[2].

It was submitted that the matters before the Court in Zorica's case overlapped substantially with the matters that were before the Court in the partnership proceeding. Dimos should be restrained from acting in the present case because there is a real and sensible possibility that the matters "that were the subject of Ken's proceeding and which are the subject of the Deed are now in issue in the present case and even if not in issue will be examined during the course of the trial".

As to this submission I interpolate that, as mentioned earlier, as a result of the paucity of information provided, I do not know what actually was in issue, or admitted, in the partnership proceeding. Furthermore, the information sought to be protected was not identified otherwise than in those general or global terms or the terms set out above at [18]. The submission was characterised by an all round lack of clarity and precision.

Counsel for the defendant acknowledged the obvious requirement, stated by Drummond J in Carindale Country Club Estate Pty Ltd v Astill[3], that allegedly confidential information be identified with precision and not merely in global terms. This derives at least from the need to express an injunction in clear terms and, generally, the need to avoid the risk of injustice as a result of a court acting on an imprecise assertion of confidential information. Nevertheless, it is recognised that the degree of particularity that a court will require will depend upon the relevant facts and circumstances in the particular case. See, for instance, the discussion in Sent[4]. A factor to be considered is whether a precise identification of the information, and thereby its open disclosure, would undermine if not destroy the confidence sought to be protected.

Counsel for the defendant contended that the information at risk of exposure was identified with precision in paragraphs 9 and 15 of Tonkin's affidavit "because of the terms of the Deed". Paragraph 9 merely referred to cl 7, stating that it provided that Ken's professional advisers will keep confidential the "contents" of sub-paras(i)-(iv). Paragraph 15 stated the assertions and contentions I have set out at [18] (a) and (b) above. In other words, the defendant does not actually identify any particular information which requires protection let alone relate it to a matter in issue in Zorica's case.

Counsel made the following further point. Dimos is obliged to put its knowledge at the plaintiff's disposal. As it is not permitted or prepared to do so it should not act; see Spector v Ageda[5] applied in In the Marriage of RA & E Thevenaz[6].

Counsel sought to support this submission by in effect challenging the veracity of the plaintiff's evidence as to her knowledge of the business affairs. He sought to do this by reference to her answers to interrogatories which were, he submitted, in conflict with the evidence in her affidavit. Counsel said that at the trial Zorica would be challenged as to the source of her knowledge of the matters stated in her affidavit, the inference being that her present affidavit is untrue. The further inference would seem to be that at trial she must rely on Ken or Dimos providing information which the Deed makes confidential. Counsel took me to the answers in question but without the plaintiff being cross-examined on the matter it would be unfair to her and impossible to accede to the submission. There may be a variety of reasons why the answers were drafted as they are including reasons that do not reflect on the plaintiff's credibility. To be fair to counsel he did not press an application to cross-examine the plaintiff and put the submission briefly. Of course counsel may have been concerned that if he did cross-examine the plaintiff I might have formed a favourable view of her in terms of her possessing an independent knowledge of the relevant business affairs, and thus unfavourable to the defendant's application. However counsel cannot have it both ways. He attacked the correctness of her evidence, thus inviting me not to accept it or perhaps to give it little weight, yet he would not cross-examine.

Finally, on this part of the submissions, it was submitted that the plaintiff's release of Dimos from the obligation to use for her benefit information which cl 7 made confidential could not be relied upon. It would be difficult to know or test whether any alleged knowledge of the plaintiff came from a non-confidential source.

Counsel then advanced a second basis upon which the injunction should be granted. This was on the basis of the general equitable jurisdiction referred to by Deane J in Moorgate Tobacco Co Ltd v Philip Morris Ltd [No. 2][7], to grant relief against an actual or threatened abuse of confidential information, not involving any tort or breach of contract or some wider fiduciary duty. Applying that principle, in the circumstances Dimos has an obligation of confidence directly to John and should be restrained from breaching that confidence.

Counsel then advanced a third basis on which the injunction should be granted. The Court would grant an injunction as a matter of public policy where a fair minded reasonably informed member of the public would conclude that the proper administration of justice required that the legal practitioner be prevented from acting. See Grimwade v Meagher[8], Sent[9] and Village Roadshow Limited v Blake Dawson Waldron[10].

Counsel then advanced a fourth basis on which the injunction should be granted. That is that Dimos may be restrained on the basis of the overriding duty to the Court not to appear in a matter in which one has an actual or potential conflict of interest. For authority here counsel relied on the statement of Young CJ in Nangus Pty Ltd v Charles Donovan Pty Ltd[11] as to the Court being concerned for its own protection. As I observed to counsel however the relevant circumstance in that case is not that in the present. There the matter that concerned the Chief Justice was the one counsel acting for two parties in the litigation. The conflict suggested in the present case is of a different kind and arises in different circumstances. I note that counsel also referred to Kooky Garments Ltd v Charlton[12] and Spincode Pty Ltd v Look Software Pty Ltd[13].

Finally counsel submitted that there had not been any unreasonable delay in bringing the application, and therefore that the application should not be refused on the ground of delay.

At the outset counsel for the plaintiff drew attention to the fact that counsel for the defendant had directed their attention to cases in which the solicitor in question had acted for the defendant applicant. He had not referred to cases such as the present in which the solicitor had not acted for the defendant applicant. There were two such cases, namely Tricontinental Corporation Ltd v Holding Redlich[14] and Mitchell v Pattern Holdings Pty Ltd[15] in each of which the injunction was refused. Each case considered whether there was a real and sensible possibility of the misuse of alleged confidential information.

As to the facts, it was submitted that the plaintiff had her own knowledge independently acquired. Further, the defendant will have to disclose and make production of all relevant business documents, thus providing details of the businesses and their operation. In addition the parties can inspect the Court file in the partnership proceeding. In the circumstances, and having regard to the failure of the defendant to identify or relevantly particularise the confidential information needing protection, the defendant had not established a real and sensible possibility of the misuse of confidential information.

Without overlooking the contents of the written submission of counsel for the plaintiff, or what they said orally, for present purposes this is a sufficient reference to their submission. The written submissions of both parties, initialled by myself, are on the Court file.

There was no difference between counsel as to any matter of principle. I accept that an injunction may go to restrain a solicitor from acting for a party in the several circumstances referred to in the defendant's submissions. It is however to be noted that in this case, unlike Sent for instance, Dimos never acted for the defendant. I have already noted that counsel for the defendant, doubtless as a result of oversight, did not draw to my attention the decisions in Tricontinental and Mitchell which were apposite in that they were applications where the solicitor in question had not acted for the relevant party. I have also referred to the approach taken as to whether there was a real and sensible possibility of the misuse of confidential information. To that approach, which is the first of the alternative bases for the order in the defendant's submissions, I now turn.

The first point to note is that the claims in the present proceeding and in the partnership proceeding have an entirely different basis in law. Whereas the partnership proceeding was a dispute between persons as to their respective interests in the ownership of a business or businesses, Zorica's proceeding is a claim to a share in the interest of the defendant in property of his including the business or businesses. The former claim was based in the contractual or equitable rights between the owners of the business or businesses, whereas the latter claim is based on or arises out of the de facto relationship between the plaintiff and the defendant, and the claim is made pursuant to the Act. Regrettably counsel for the defendant did not undertake a close analysis of the issues in the two proceedings, and he could not have in the absence of a disclosure of the pleadings and other documents in the partnership proceeding, that non-disclosure clearly being deliberate. And, as I have said, added to that non-disclosure is the related failure to identify with precision the confidential information requiring protection. It was said that the conduct of the business or businesses was an important subject matter of inquiry in both the partnership proceeding and in Zorica's case and that Dimos must have acquired knowledge of relevant matters. But the fact is that the basis of the claims and the issues in the two proceedings are different, and the evidence in Zorica's case will thus have a different purpose, slant and perspective which must limit the relevance or utility of the alleged confidential information.

As I have observed, the only pleading in the partnership proceeding that I have seen is the statement of claim. Hence, as I have said, I do not know what was in issue or admitted on the pleadings. In other words I do not know the extent of the denials or admissions by the defendant. Furthermore I do not know what may be ascertained on a search of the file in that proceeding. And, of course, under the Rules of this Court the file may be inspected by a person on application. Hence, it is available for inspection by the plaintiff. Clause 7 cannot prevent such inspection and the related noting of information contained in documents on the file. To that extent the pleadings and other documents on the file are a matter of record and cannot be confidential from the plaintiff. That would not normally extend to witness statements as they are not normally on the file, but presumably Zorica has access to her own witness statement.

It is important not to be diverted by the application into thinking that Zorica is dependant upon Dimos disclosing the alleged confidential information. In addition to being able to inspect the file in the partnership proceeding, there will be discovery in her proceeding, by discovery of documents if not also by interrogatories. In that process of discovery the defendant will be obliged to disclose all documents relevant to the issues in the proceeding. If the defendant's submissions are correct, that discovery will extend to documents and interrogatories relating to the conduct and circumstances of the business or businesses. In other words, there will be discovery of information that the defendant is (by this application) seeking to keep from the plaintiff. There will also be discovery on other issues such as the role and contributions of the defendant and the plaintiff. It must be presumed that the defendant will comply with his obligations in this regard.

In addition there is the extensive knowledge of the business or businesses which the plaintiff possesses in her own right, as stated in her affidavit. Not only was she not cross-examined on her affidavit but the defendant did not swear an affidavit denying her evidence. Rather, it was said that she would be challenged at trial, and in that regard her answers to interrogatories were referred to. I have regard to that, and to her interest in her own cause, but the fact remains that except in the manner mentioned her evidence was not challenged and the defendant was content to run the case on the basis of confidential information in the general or global terms referred to in cl 7 and Tonkin's affidavit. Having considered all the matters put to me, I accept the plaintiff's evidence.

In summary, what is or will be available to the plaintiff is her own knowledge of the matters referred to in her affidavit, the information that has or will be obtained on discovery in her proceeding, and the information that may be obtained by searching the file in the partnership proceeding. All this is available in the prosecution of her claim without seeking or receiving from the persons bound by cl 7 information which that clause requires to be kept confidential.

In addition, the plaintiff could call Ken to give evidence at the trial, and cl 7 could not prevent him from giving evidence of any relevant matter.

I turn then to consider sub-paras (i)-(iv) of cl 7. The first category in sub-para (i) is the contents of the Deed. It seems apparent from reading the Deed that what would ordinarily be regarded as confidential is para (ii) which states the consideration for the settlement, and that seemed to be confirmed by counsel who requested that that part of the clause remain confidential in the sense of not being stated in this judgment. The terms are otherwise of a usual nature and do not disclose information that would ordinarily need to be regarded as confidential. But the plaintiff has independent knowledge of the settlement as a result of being present when it was discussed. Hence she knew what the settlement was before she retained Dimos.

The second category is sub-para (ii) which states the consideration which the defendant agreed to provide under the settlement. As mentioned, the plaintiff was aware of this due to her being present when settlement was discussed with Ken.

The third category in sub-para (iii) is any matter discussed during the mediation and settlement discussions. Hone's evidence confirms that there was a mediation but I have no details of it. Hone further states that no present employee of Dimos attended the mediation. Then, as to the settlement discussions the plaintiff was present, and she has deposed to her knowledge.

The fourth category in sub-para (iv) is any matter in the pleadings, witness statements or any document on the Court file. This is extraordinarily wide, and the somewhat ridiculous nature of the protection is shown by the following. A search of the Court file in the partnership proceeding will disclose the pleadings and other documents on the file. I was not told that the file was subject to any restriction in that regard and I cannot imagine why the file or any particular document on it would not be available on a search. The proceeding appears to be a common-place piece of commercial litigation. The searchable file would not ordinarily include a witness statement. Thus while the plaintiff would have her own witness statement she would not have the witness statement of any other person. There was no evidence as to the number of witness statements that had been provided by the parties, or filed with the Court, and no evidence as to the content of any witness statement. This is important if only because the issues in the proceedings are different and it is speculation as to the extent to which the information in any witness statement might materially, for the purpose of the plaintiff's proceeding, add to the information available on the file in the partnership proceeding and which is otherwise known to the plaintiff.

In these circumstances, and regarding the submissions overall, I am not satisfied that there is a real and sensible possibility of the misuse of information which cl 7 makes confidential. This is by reason of the plaintiff's own knowledge of relevant matters including matters referred to in cl 7, the public availability of the Court file in the partnership proceeding, the difference in the issues in the two proceedings, the lack of specificity of the alleged confidential information and the failure to demonstrate how and in what way it is relevant to the issues in the plaintiff's proceeding. The lack of specificity means that it is speculation whether the information is not within the plaintiff's knowledge anyway. The defendant chose to run the application in a way that did not meet her evidence. While having an onus as applicant[16], the defendant left the matter in the general terms of cl 7 and the assertions of Tonkin.

Nor is it to be overlooked that the present is not a case of a party seeking to restrain his or her former solicitor from acting for the opposite party. The cases referred to above reflect the concern of judges in that situation. Here, however, Dimos acted for Ken in the partnership proceeding but never acted for the defendant. Hence, the obligation of Dimos not to disclose matters referred to in cl 7 derives not from having acted for the defendant but in virtue of having acted for Ken and thus being bound to observe Ken's duty of confidentiality. Otherwise Dimos is not and has not been under a duty or duties to the defendant of the nature that obtain in or as a result of the relationship between solicitor and client, and discussed, for instance, in Spincode. Added to this is the fact that it is a severe thing to deny to a party the services of the solicitor of her choice, particularly when, as Mandie J observed in Tricontinental, it is not on the application of a former client but of an adverse party.

In my view the application must fail. In the first place, I am quite unpersuaded of a real and sensible possibility, whether conscious or unconscious, of the misuse of confidential information. The facts do not warrant the intervention of equity to restrain Dimos from acting. Nor, in the absence of the solicitor and client relationship in particular, but having regard to the circumstances generally, is the intervention of the Court warranted on the third or fourth alternative basis on which the injunction was sought. While I have regard to those bases, indeed to all that counsel said, it is not necessary to elaborate upon them. Among other things, no reasonably informed member of the public would conclude, and the Court should not, that the administration of justice required that Dimos be restrained from acting.

I should perhaps add, for the sake of clarity, that this conclusion does not depend on the plaintiff's release of Dimos referred to at [20]. In reaching my conclusion I have found it unnecessary to consider that matter. That is not because I consider that it should be disregarded on account of it being unrealistic and unworkable or that it was not otherwise properly to be considered as part of the relevant circumstances, but because other considerations require the refusal of the application.

Having regard to these conclusions it is not necessary to consider the discretionary matter of delay. I should say however that if I had otherwise been satisfied as to the merits of the application I would not have refused the injunction on the ground of delay.

The application will be dismissed with costs.

[2] See Farrow Mortgage v Mendel Properties Pty Ltd (1995) 1 VR at p. 5 per Hayne J; Yunghanns v Elfic Pty Ltd (1998) Butterworth Cases 9803497 per Gillard J; Bolkiah v KPMG [1998] UKHL 52; [1999] 2 AC 222 especially at 237 in the speech of Millet L; and World Medical Manufacturing Corporation v Phillips Ormonde & Fitzpatrick (2000) VSC 196 per Gillard J.

[14] Unreported, Supreme Court of Victoria, Mandie J, 22 December 1994; BC9400946

[16] Mitchell v Pattern Holdings [2000] NSWSC 1015.

At a glance

Court

Decision date

Before

Source

Judgment (82 paragraphs)

Parties

Cases Cited (4)