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[2021] VSC 343
General information, not legal advice.
Supreme Court of Victoria
2021-06-16
SLOSS J
Original judgment source is linked above.
LEGAL PRACTITIONERS - Application by defendants to restrain solicitor from acting for plaintiffs in the proceeding - Where solicitor (sole principal of the firm) was personally involved in some of the business activities the subject of the proceeding and has asserted a financial interest in the subject matter of the proceeding - Where solicitor might be a witness in the proceeding - Where defendants allege the solicitor has made threats to harm the second defendant and his family - Inherent jurisdiction of the Court to restrain solicitor from acting if it is in the interests of justice to do so - Relevant test to be applied - Whether fair-minded, reasonably informed member of the public would conclude that proper administration of justice requires that solicitor be restrained
For the Plaintiffs and Cliffords Lawyers & Migration Agents
1 By summons filed on 30 April 2021, addressed to the plaintiffs and their then solicitor, Cliffords Lawyers & Migration Agents (Cliffords), the defendants seek relief by way of an order restraining the firm 'from acting for, working for, aiding or otherwise assisting any of the plaintiffs in relation to, or otherwise in connection with, this proceeding.'
2 In advance of the hearing, by letter dated 19 May 2021, the defendants' solicitor notified the plaintiffs' solicitor that they were modifying the form of restraint sought, so as to cater for the possible involvement of the principal of Cliffords, Mr Clifford Qwah, as a witness in the proceeding. In their letter, the defendants' solicitors also stated:
Our clients also require a written undertaking from Mr Clifford Qwah, which is signed and dated by him, which confirms his personal adherence to the above restraint. We propose wording to the effect of:
I, Mr Clifford Qwah, undertake not to act for, aid or otherwise assist the plaintiffs of the proceedings, more particularly described in proceedings numbered S ECI 2020 03612, or otherwise in connection with the said proceedings, save that I may participate as a witness in the said proceedings.
3 The defendants' application is not based on any contention that there is a danger that confidential information of the defendants will be misused or that there is any prior solicitor-client relationship that would give rise to a conflict of interest in Cliffords acting for the plaintiffs. Rather, the application is founded solely on the Court's inherent jurisdiction to control the conduct of officers of the Court, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. Importantly, even though Cliffords has now been replaced by Fumens Lawyers as the solicitor on the record, the defendants continue to seek to have the Court restrain both Cliffords and Mr Qwah from assisting any of the plaintiffs in relation to or otherwise in connection with the proceeding.
4 The proceeding in which the application is made concerns claims for breach of contract and declaratory relief sought in relation to the establishment and operation of 'Gong Cha' retail tea store franchises in Victoria. Gong Cha is a tea franchise, selling flavoured iced teas, bubble tea and other things. Gong Cha Australia Pty Ltd (GCA) was the franchisor of a franchise system whereby franchisees were authorised by it, either directly or via an intermediary 'master franchisee', to carry on the business of conducting retail tea stores under the name, brand and style 'Gong Cha' (Gong Cha stores).
5 In essence, the plaintiffs plead that in 2013, GCA invited the defendants to consider accepting appointment as master franchisee, holding exclusive rights in the State of Victoria to conduct Gong Cha stores and/or authorise others to do so. Further, they say that by an agreement made in or about March 2013, the plaintiffs and the defendants, alternatively the plaintiffs and the second defendant (Kyle), entered into a partnership whereby the partners would contribute financial resources, capital, skills and expertise to establish Gong Cha stores in the State of Victoria.
6 The plaintiffs (Jon and Kevin[1]) contend that in or around early 2013, and pursuant to the alleged partnership agreement, the defendants took steps to accept GCA's invitation, in consequence of which the first defendant (MK Trading) entered into an agreement with GCA whereby MK Trading was granted the right, to the exclusion of others, to operate Gong Cha stores within Victoria.
7 During the period from 2013 to 2015, MK Trading established several Gong Cha stores around Melbourne and during 2013 and 2014, Jon and Kevin made various payments to help set up the stores. For present purposes, it is sufficient to note that Jon and Kevin now claim they have an interest in some of the Gong Cha stores pursuant to the alleged partnership agreement, which MK Trading and Kyle deny.
8 The defendants acknowledge that there were ongoing discussions between the parties from about March 2013, and that numerous versions of a draft agreement passed between the parties, but they say those discussions did not amount to the making of a binding partnership agreement, nor did the provision of any funding by the plaintiffs amount to or give rise to a partnership agreement.
9 The defendants contend that after November 2015, the parties moved into a dispute phase. On 18 December 2015, the plaintiffs (Jon and Kevin) and Mr Qwah (Kevin's business partner) sent Kyle an email demanding a meeting with him to resolve the dispute.[2] They sent a further email to Kyle on 2 January 2016 wherein they asserted they were a 50% owner of the Springvale store and that they were his partners. Kyle deposes that the store manager of the Springvale store informed him that in early January 2016, Jon, Kevin and Mr Qwah attended at the Springvale store and forced the customers to leave and then changed the locks, asserting that they were the owners of the business.
10 Thereafter, correspondence ensued between their respective solicitors. On 15 September 2020, Jon and Kevin commenced this proceeding seeking relief against MK Trading and Kyle.
11 The defendants rely on four affidavits in support of their application:
(a) Affidavit of Kyle Lam affirmed on 30 April 2021;
(b) Affidavit of Yin Lam affirmed on 30 April 2021;
(c) Affidavit of Wai Sing Au sworn on 23 April 2021; and
(d) Affidavit of Aleksandar Kovaceski sworn on 20 May 2021.
12 The plaintiffs, through their then solicitor, Cliffords, filed an affidavit of Meng Meng Ng affirmed on 20 May 2021.
13 The alleged involvement of Mr Qwah is set out in the affidavit material filed by or on behalf of the defendants. No affidavit material has been filed by Mr Qwah in response to those allegations, and counsel for the plaintiffs (and Cliffords) did not seek to cross-examine any of the deponents of the affidavits relied on by the defendants.
15 Kyle deposes that in or about August 2013, Kevin told him that Mr Qwah was providing money to Kevin to fund the payments to establish the Gong Cha stores[5] and that he would share any profit made from the stores with Mr Qwah 50/50.[6] During 2013 and 2014, Mr Qwah started coming to meetings between Jon, Kevin and Kyle.[7] Mr Qwah made recommendations about how to set up the stores[8] and he liaised with the landlord of a store in Box Hill to try to arrange a lease to open a Gong Cha store.[9]
16 In May 2015, Mr Qwah, together with Jon and Kevin, requested weekly profit and loss reports and other information for the Gong Cha stores.[10]
17 By late 2015, a dispute had arisen between Jon, Kevin, Mr Qwah and Kyle as to the ownership of the Gong Cha stores. Kyle deposes that Mr Qwah (together with Jon and Kevin) asserted on numerous occasions that he was a part owner of the stores, and a partner with Kyle (and Jon and Kevin) in the operation of the stores.[11]
18 In 2016, a series of meetings occurred between Kyle, Kyle's father Yin Lam (Yin)[12], and Jon, Kevin and Mr Qwah. Kyle has deposed that at a meeting in the first half of 2016 held at the offices of Ty Sam, an accountant, and in the context of the now existing dispute, Mr Qwah asserted he was a partner in the business, and said words to the effect that Kyle's family will be harmed if Kyle did not co-operate.[13] Yin has also deposed that Mr Qwah made threats at the meeting.[14]
19 Yin has deposed that in about June or July 2016, he met Mr Qwah at Crown Casino by chance, and on that occasion, Mr Qwah said to Yin words to the effect that if Yin did not sort out the situation, Mr Qwah will kill Yin's whole family.[15] Yin has deposed that he reported the threat to the police but he no longer has a copy of the report.[16]
20 Yin has deposed that further threats or threatening remarks were made by Mr Qwah in about October or November 2016, when Yin met Mr Qwah at Chadstone Shopping Centre, and again in about early 2017, at Stalactites Restaurant in Melbourne when he met Mr Qwah for the last time. On the latter occasion, Yin recorded the meeting, which was mainly held in Cantonese (with some English used). Yin has deposed that Mr Qwah was aware that Yin was recording their meeting and said words to the effect: "I don't care if you're recording me."[17] An English translation of the voice recording appears as exhibit AA-01 to the affidavit of Wai Sing Au, a NAATI Certified accredited interpreter and translator between Cantonese and English, sworn on 23 April 2021.
21 Against that background, the writ and statement of claim were filed on 16 September 2020 by the plaintiffs' then solicitor, Cliffords. The contact details recorded on those documents for the solicitor handling the matter were 'nick@cliffords.com.au', whom counsel for the plaintiffs has confirmed is a reference to Mr Nick Zheng. Counsel informed the Court that Mr Zheng left that firm in October 2020 or thereabouts and now works as a solicitor at Fumens Lawyers.
22 The defendants' defence was filed on 20 November 2020.
23 On 24 February 2021, the defendants' solicitor sent a letter to Cliffords demanding that Cliffords cease acting for the plaintiffs immediately.[18] The letter set out the basis for the demand, namely that Mr Qwah had asserted a financial interest in the subject matter of the proceeding, that Mr Qwah had made threats of harm to Kyle and Yin, that Mr Qwah would be a material witness in the proceeding, and that Cliffords' continuing to act would be prejudicial to the administration of justice.[19]
24 On 2 March 2021, Cliffords responded, denying that any threats had been made.[20] On 3 March 2021, the defendants' solicitor requested confirmation that Cliffords would withdraw as solicitor.[21] On 10 March 2021, Cliffords confirmed that they would provide a detailed response to the 24 February 2021 letter that week.[22] On 18 March 2021, no response having been provided, the defendants' solicitor requested a response from Cliffords.[23] The same day, Cliffords apologised for not responding, and confirmed they would revert shortly.[24] On 9 April 2021, the defendants' solicitor sent a further request that Cliffords confirm they would withdraw as solicitor for the plaintiffs.[25] On 12 April 2021, Cliffords confirmed they would not withdraw as solicitor for the plaintiffs.[26]
25 Following Cliffords' refusal to withdraw, on 30 April 2021 the defendants filed the present application.
26 On 17 May 2021 Ms Dina Ng, a solicitor of Cliffords, notified the defendants by email that the plaintiffs have elected to change solicitors, and a notice of change of solicitor would shortly be filed and served. In that email, Cliffords also stated 'for the avoidance of doubt, all allegations on Clifford Qwah is strenuously denied.'[27]
27 On 19 May 2021, the defendants' solicitor wrote to Cliffords seeking confirmation that the plaintiffs have engaged alternative legal representation, and notifying them of the minor amendment sought to paragraph 1 of their summons concerning the carve out to enable Mr Qwah to participate as a witness in the proceeding. As noted above, the defendants' solicitor also informed Cliffords that their clients would require a signed written undertaking from Mr Qwah to confirm his personal adherence to the restraint sought.
28 On 20 May 2021, Ms Ng affirmed an affidavit to which she exhibits relevant correspondence passing between the legal representatives of the parties. In the final paragraph of her affidavit, Ms Ng states:[28]
29 On 21 May 2021, Fumens Lawyers filed a notice of change of solicitor, notifying that they were now acting on behalf of the plaintiffs 'in lieu of' Cliffords.[29] As noted earlier, Mr Nick Zheng, formerly a solicitor with Cliffords, is now working as a solicitor with Fumens Lawyers. Mr Zheng was the instructing solicitor for the plaintiffs at the hearing of the defendants' application.
30 On 21 May 2021, the defendants and the plaintiffs each filed an outline of submissions.
31 The hearing of the defendants' application took place as an 'in person' hearing on 24 May 2021.[30] At the outset, senior counsel for the respective parties formally tendered the affidavit material relied on and adopted their written outlines. Thereafter, they addressed the Court with brief oral submissions.
Summary of submissions made on behalf of the defendants
32 Senior counsel for the defendants, Mr Evans QC, commenced by confirming that notwithstanding the plaintiffs had elected to change solicitor and had filed a notice recording the change, the defendants continue to seek an order restraining Cliffords in the terms set out in their summons and as amended by recent correspondence.[31] He said the notice of change of solicitor amounts to partial satisfaction of what is sought and is not considered sufficient by the defendants, and as Cliffords is an unincorporated legal practice (whose sole principal is Mr Qwah), they seek to restrain Cliffords and Mr Qwah from 'assisting' in the proceeding particularly in circumstances where Mr Qwah has declined to provide the undertaking sought.
Restraint of solicitor from acting to protect the administration of justice
33 Counsel confirmed that the defendants rely solely on the administration of justice ground for the relief they seek. They observe that the Court has inherent jurisdiction to restrain solicitors from acting in a particular case as an incident of its inherent jurisdiction over officers of the Court and to control its process in aid of the administration of justice.
34 Adopting the 'objective test' applied by Mandie J in Grimwade v Meagher,[32] where the court was dealing with an application for an order restraining counsel from acting, the defendants submit that the jurisdiction is enlivened 'if a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and appearance of justice.'[33]
35 In the present case, however, the defendants go further and contend that '[i]n this context, "acting" can properly be seen to include "assisting", even if the solicitor is not formally "on the record".'[34] Counsel acknowledged that they had not been able to locate any authorities directly on point but they submitted such an approach is consonant with the notion of 'proper protection of the integrity of the judicial process and appearance of justice'.
36 The defendants submit that the present case is 'a clear case' where the evidence before the Court demonstrates that Cliffords should be restrained from acting as solicitor for the plaintiffs in order to protect the administration of justice, for the following reasons.[35]
Mr Qwah is likely to be called as a witness in the proceeding
37 First, they contend it is likely that Mr Qwah (who is the sole principal of Cliffords) will be a material witness in the proceeding. This is so notwithstanding that the plaintiffs do not plead that Mr Qwah was a partner in the Gong Cha stores. The evidence is that Mr Qwah attended numerous meetings with Jon, Kevin and Kyle in respect to the establishment of the Gong Cha stores. He was directly involved in the negotiation of a lease for a Gong Cha store in Box Hill, and he was party to numerous pieces of written correspondence at material times. Mr Qwah was also personally and directly involved in the making of demands and in the changing of locks at the Springvale store in early 2016.
Mr Qwah has asserted a personal financial interest in the business conducting the Gong Cha stores the subject of the proceeding
38 Secondly, even though the plaintiffs do not plead that Mr Qwah was a partner in the Gong Cha stores, the defendants contend that Mr Qwah has asserted on numerous occasions, and in correspondence, that he is a part owner of the Gong Cha stores, and a partner of Kyle (and Jon and Kevin) - not merely that he has some business relationship with Kevin. They submit it is clear that he maintains he has a material personal financial interest in the business conducting the Gong Cha stores the subject of the proceeding.
39 The third matter raised by the defendants is that Mr Qwah has made verbal threats of harm to Kyle, Kyle's father Yin, and their family, in connection with the subject matter of the proceeding. Each of Kyle and Yin, have deposed to the serious nature of those threats and of a concern for their health and well-being engendered by the making of those threats. Counsel for the defendants submitted that in circumstances where (a) no responsive material from Mr Qwah has been filed addressing those serious allegations, (b) the only response that is before the Court is a 'denial' conveyed through an affidavit of an employee solicitor of Mr Qwah's firm on information and belief, and (c) no request for cross-examination of Kyle or Yin has been made, the Court's jurisdiction to restrain Mr Qwah from having any involvement in the proceeding beyond that of a witness should be enlivened. In particular, counsel submitted that Mr Qwah's conduct in this respect is appalling and completely at odds with his duty as an officer of the Court. Further, they submitted that the Court can have no confidence whatsoever in Mr Qwah's ability to maintain his professional integrity and impartiality in the conduct of these proceedings on behalf of the plaintiffs.
40 Counsel for the defendants submit that the inherent power of the Court does extend to permit the Court to grant all of the relief that is being sought. They contend that the evidence before the Court, which is uncontested, gives rise to a reasonable apprehension that Mr Qwah will continue to have some role in the proceeding notwithstanding that Fumens Lawyers are now the solicitors on the record. That is because Mr Qwah continues to assert he has a material personal financial interest in the business and his conduct, particularly in making threats directed to Kyle and Yin and their family, is sufficiently serious to warrant the Court intervening to restrain him. Further, counsel observed that in circumstances where the plaintiffs have chosen to instruct a new solicitor, Mr Qwah should have no problem in giving an undertaking in the terms sought unless he does propose to participate, give advice and take an active role in the conduct of the proceeding. Counsel contended that the fact that Mr Qwah has not seen fit to give the undertaking sought suggests that the Court can have no confidence that Mr Qwah will not assist in the conduct of the file, or exert influence over the way in which the file is conducted, whether direct or indirect, thus enlivening the need for the Court to make an order restraining him from doing so.
Summary of submissions made on behalf of the plaintiffs
41 Senior counsel for the plaintiffs, Mr Williams QC, commenced by informing the Court that while they also represent Cliffords on the hearing of the application, it is the interests of the plaintiffs that are paramount in the proceeding.
42 Mr Williams QC noted that the defendants' application presupposes that there is some assistance that Mr Qwah could offer to the plaintiffs. He said (words to the effect of) 'let us accept that it is likely Mr Qwah could offer some assistance', then that assistance would include the usual handover from one solicitor to another. To do more than a mere physical handover of the files, he submitted, would be to 'assist' in contravention of the form of restraint sought by the defendants. He accepted that given Mr Zheng's past involvement in the matter, Mr Zheng is the natural choice to take over the handover of the file and that would ameliorate any concern in that regard.
43 In response to an observation from the Court to the effect that, notwithstanding the appointment of Fumens Lawyers, the defendants appear to be concerned that there will be some de facto continuing involvement of Mr Qwah, counsel responded by asking '[w]hy is it that the plaintiffs should be denied that assistance?' He submitted that it is 'overreach' to say that the plaintiffs should be denied any opportunity of advice that Mr Qwah may wish to give, whether on a voluntary or paid basis, and there is nothing to stop that from happening.
44 Mr Williams QC contended that there was nothing about any of the three matters raised by the defendants - Mr Qwah's possible role as a witness, his asserted personal financial interest, and the alleged threats - that would warrant the plaintiffs being denied the assistance Mr Qwah might give them. In that regard, counsel submitted that there are no cases on the administration of justice ground that would support the Court restraining a solicitor from 'assisting' a party where that solicitor has gone off the record. He referred the Court to the recent decision of Moore J in Santin v Sfameni,[36] where a defendant in her capacity as executor of a deceased estate sought to restrain a solicitor, Mr Whelan, from acting for the plaintiffs in circumstances where he had formerly acted for the deceased and was likely to be a material witness in relation to contested matters.
45 In Santin v Sfameni, in making the application, the executor invoked inter alia the due administration of justice ground contending that a reasonable person informed of the facts might reasonably anticipate both a danger of misuse of confidential information of a former client of the solicitor, and that there is a real and sensible possibility that the interest of the practitioner in advancing the case in 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. In refusing the application, his Honour referred to the legal principles applicable to whether a solicitor should be restrained from acting in a proceeding and, in the context of the administration of justice ground, Moore J emphasised the need for a cautionary approach to be adopted by the Court, as follows:[37]
[39] It is well established that the Court's jurisdiction to restrain a solicitor from acting on the administration of justice ground is exceptional and is to be exercised with caution. As Mandie J stated in Tricontinental Corporation Ltd v Holding Redlich (a firm),[38] '[i]t is a serious matter to prevent a party from retaining the legal representative of its choice, particularly upon the application not of a former client but of an adverse party'. In Bahonko v Nurses Board of Victoria (No 3),[39] Middleton J went so far as to state that the 'Court must be careful not to intervene unless it is absolutely required in the circumstances of the case' and that the Court 'should be mindful that sometimes applications for restraining legal practitioners may be misused or quite inappropriately pursued by a party to proceedings'.[40]
[40] As stated by Brereton J in Kallinicos v Hunt,[41] the test to be applied in applying the administration of justice ground:[42]
... 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.
[41] His Honour continued that, in exercising the Court's jurisdiction:[43]
... consideration is to be given to the prima facie right of a party to be represented by the lawyer of its choice, to the inconvenience, cost and disruption which might be occasioned by requiring a party to change lawyers, and to the "exceptional" nature of the jurisdiction.
46 Against the background of those observations, counsel for the plaintiffs submitted that the Court should be very cautious about imposing any restraint on Mr Qwah because to do so would set a dangerous precedent. Mr Williams QC submitted that, in circumstances where Mr Qwah is reasonably closely connected to the events that have taken place and is more likely to be attuned to matters that are relevant to the conduct of the plaintiffs' case than they are themselves, he would likely find offering ideas to them was 'irresistible'. Mr Williams QC contended that if Mr Qwah was to be shut out from providing assistance to the plaintiffs, it would have a chilling effect on his role as a witness and result in the defendants gaining a forensic advantage in the conduct of the case. In essence, counsel submitted that there is difficulty in drawing a bright line between what Mr Qwah might legitimately do in his role as a (potential) witness in the proceeding and the assistance Mr Qwah, being a solicitor, might provide to the plaintiffs in the conduct of the proceeding generally given his business relationship with them. In those circumstances, counsel submitted any restraint of the kind contended for would be difficult to enforce.
47 Mr Williams QC submitted that none of the matters raised by the defendants would warrant the Court requiring anything more than a change of solicitors, a step which the plaintiffs have already implemented. He submitted that any concern or complaint about alleged threats inappropriately made by Mr Qwah should be dealt with in the usual way, by seeking a personal safety intervention order, and not by way of an injunction restraining Mr Qwah from assisting the plaintiffs behind the scenes.
48 Counsel for the defendants responded by contending that the cumulative operation of all three of the matters relied on by them demonstrates the need for the Court to impose a restraint on Mr Qwah beyond a change of solicitors. They submit that the conduct of Mr Qwah to date is appalling, and the notion that he might continue to provide case concepts or strategies or ideas to the plaintiffs in the running of the case is simply preposterous. The defendants contend that in circumstances where there is a real risk that the conduct of the proceeding may be compromised by his continued involvement, the grant of injunctive relief against Mr Qwah is entirely appropriate.
49 It is well-established that the inherent jurisdiction of the Court includes the ability to control legal practitioners as officers of the Court. Mr Evans QC submitted that the submissions made on behalf of the plaintiffs make clear that the plaintiffs wish to have Mr Qwah continue to assist them by giving legal advice in this matter, notwithstanding the change of solicitor, but his behaviour is such as to raise doubts about his professional independence as an officer of the Court. He submitted that the defendants are concerned that Mr Qwah's continued involvement might be likely to have an effect on the way in which the defendants approach their defence to this proceeding, and accordingly he should not be entitled to perform the role of a solicitor or legal advisor.
50 The plaintiffs rejected the notion that in some way Mr Qwah's continued involvement will have some impact on the way the defendants run their case. Mr Williams QC submitted that the idea that Mr Qwah's involvement behind the scenes might in some way cause the defendants to respond to the proceeding in some different way is irrelevant. Rather, he said, what is being sought is an injunction to restrain private conduct and he submitted it has never been suggested that a witness cannot provide that kind of assistance.
51 The present case is not, as the parties acknowledge, the typical case where a party seeks to restrain a former solicitor from acting.
52 Here, the conduct which gave rise to the defendants' complaint is conduct that was engaged in by Mr Qwah in his personal capacity as a business partner of Kevin, the second plaintiff, which took place several years before his firm was engaged to act as the solicitor for the plaintiffs in this proceeding.
53 Mr Qwah is not a party to the proceeding but both parties acknowledge that there is a possibility that he might be called as a witness to give evidence at the trial because he was personally and financially involved in at least some of the relevant events.
54 When the plaintiffs commenced the proceeding in September 2020, Mr Qwah's firm, Cliffords, was named as the solicitor on the record and Mr Zheng (then a solicitor with Cliffords) was identified as the operator or point of contact. That is the first time Cliffords, and Mr Qwah as the sole principal of the firm, became involved in the role of a solicitor in the proceeding. Once Cliffords became the solicitor on the record, the defendants took steps requesting that Cliffords cease to act. Having sought advice from counsel, the plaintiffs, through Cliffords, initially refused to do so. However, once the defendants filed and served their application and affidavits in support, the plaintiffs notified the defendants and the Court of their election to change solicitors.
55 In the ordinary course, where a solicitor goes off the record following such a request having been made, that would be the end of the matter. In the present case, however, the defendants continue to press both that Cliffords be restrained 'from acting for, working for, aiding or otherwise assisting any of the plaintiffs in relation to, or otherwise in connection with, this proceeding' and that Mr Qwah be required to sign a written undertaking which confirms his personal adherence to the terms of that restraint, failing which he should also be restrained.
56 Therefore, in the present case, the crucial question is whether, on the evidence before the Court, a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that Cliffords and Mr Qwah be restrained in the terms sought. The defendants contend that the restraint sought is necessary because it is clear that unless restrained, Mr Qwah is likely to continue to provide legal advice to the plaintiffs and/or advise them on legal strategy on either a paid or unpaid basis, notwithstanding that his firm is no longer the solicitor on the record. Further, they contend that Mr Qwah should not be permitted to maintain any continued professional involvement, given that the matter is one in which he has asserted a personal financial interest and where his professional independence can be called into question, and where he has earlier made threats of harm to Kyle and his family which may have a bearing on the defendants in the conduct of the case.
57 In Grimwade v Meagher, in dealing with an application made under the Court's inherent jurisdiction for an order restraining counsel from acting, Mandie J stated:[44]
In my view, it cannot be doubted that this court likewise[45] has an inherent jurisdiction to ensure the due administration of justice and to protect the integrity of the judicial process and as part of that jurisdiction, in an appropriate case, to prevent a member of counsel appearing for a party in order that justice should not only be done but manifestly and undoubtedly be seen to be done. The objective test to be applied in the context of this case is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice required that counsel be prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause.
58 His Honour continued, by referring with approval to and adopting what was said by Thomas J in a New Zealand case, Kooky Garments Ltd v Charlton,[46] concerning the role of legal practitioners as officers of the court and their professional responsibility to maintain public confidence in the profession and protect the integrity of the judicial process, as follows:[47]
In such cases, apart altogether from the position of the client, the Court is not receiving the assistance of counsel who are observably independent. Independence is a function of counsel. The Court is entitled to assume that solicitors and counsel appearing before it possess that independence. Solicitors not only owe a duty to their clients to do the best for them but also owe an overriding duty to the Court. The same overriding duty is owed by counsel who have been granted a right of audience to appear in this Court. As part of their professional responsibility, therefore, solicitors and counsel must ensure that they do not appear in a matter in which they have an actual or potential conflict of interest or where, by reason of their relationship with their client, their professional independence can be called in question . . .
In the present case I can do no more than sound a warning. The Court has an inherent jurisdiction to supervise the conduct of counsel in Court, and this includes the ability to intervene where it appears that the conduct of counsel outside of the courtroom may have a bearing on the conduct of the case. (See eg. Re a Solicitor (1987) 131 SJ 1063n; Davies v Clough [1837] EngR 360; (1837) 8 Sim 262; 59 ER 105, Re a firm of Solicitors [1992] 1 All ER 353, and for a recent case in which the perception of a law firm as a single entity was convincingly endorsed, see Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357, per Ipp J, especially at 371-375. . . .) Davies v Clough confirmed the general principle that all Courts may exercise an authority over their own officers as to the propriety of their behaviour. It is part of a Court's duty to safeguard the sacrosanct privacy of the solicitor-client relationship and, in doing so, to maintain public confidence in the legal profession and protect the integrity of the judicial proceeding. (See Freeman v Chicago Musical Instrument Co [1982] USCA7 831; 689 F 2d 715 (1982) at 721.)
I am primarily concerned in this case with the principle of protecting the integrity of the judicial process. That integrity is undermined if solicitors and counsel do not possess the objectivity and independence which their professional responsibilities and obligations to the Court require of them . . .
If, therefore, the solicitors or counsel are in default in this regard, the Courts not only may intervene, but, in all probability, should intervene. I do not overlook the general right of a party to be represented by the solicitor or counsel of their choice. (See Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737, 739.) But that right is not directly in issue in this case, and must, in any event, give way to the overriding principle which I have enunciated.
59 The position as expounded by Mandie J in Grimwade v Meagher continues to be an accurate statement of the relevant principles. Relevantly, for present purposes, it is clear that the Court's inherent jurisdiction is enlivened if a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and appearance of justice.
60 Further, in considering questions of the kind raised on this application, it must be borne in mind, as Young J highlighted in Geelong School Supplies Pty Ltd v Dean,[48] both that the application made is one for a permanent injunction, and that the Court's jurisdiction is an exceptional one, to be exercised with appropriate caution and with due weight being given to the public interest in a litigant not being deprived of the solicitor of its choice without due cause.
61 In the present case, following service of the defendants' application, the plaintiffs' response was to engage Fumens Lawyers as their solicitor in place of Cliffords. With the plaintiffs having chosen Fumens Lawyers to act for them, it is that firm, and no longer Cliffords, that has responsibility for the conduct of the plaintiffs' proceeding before the Court. In light of that election, no occasion arises for the Court to consider whether any inconvenience, cost or disruption is occasioned by the change of solicitor.
62 In my view, in circumstances where the plaintiffs' response to the defendants' application was to engage Fumens Lawyers to replace Cliffords, a fair-minded reasonably informed member of the public would not accept that Cliffords, and in particular Mr Qwah, having gone off the record in the proceeding, could thereafter perform a role in the background so to speak, as a sort of de facto solicitor for the plaintiffs and continue to provide legal advice or advise them on legal strategy.
63 On the material before the Court, and having regard to the submissions made at the hearing, it seems clear that unless restrained from doing so, Mr Qwah proposes to continue to provide legal advice to the plaintiffs or advise them on legal strategy on either a paid or unpaid basis. In my view, were he to do so, there is a real risk that the integrity of the judicial process would be undermined. Further, in circumstances where Mr Qwah has asserted a personal financial interest in the business conducting the Gong Cha stores the subject of the proceeding and is alleged to have made threats to the second defendant and his family, which he denies through his employee solicitor, Mr Qwah does not possess the objectivity and independence which his professional responsibilities as a solicitor and his concurrent obligations to the Court require of him. This affords a sufficient basis for the grant of injunctive relief.
64 In my view, on the material before the Court, a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner in the position of Mr Qwah should be prevented from acting in that de facto role, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. Accordingly, he should be restrained from acting as a solicitor and providing professional services of the kind ordinarily performed by a solicitor for a client in a proceeding. The same position applies in the case of Cliffords, of which Mr Qwah is the sole principal.
65 Given that the Court's jurisdiction is an exceptional one, to be exercised with appropriate caution, any restraint imposed should extend no further than is necessary to supervise the conduct of a solicitor in his capacity as an officer of the Court so as to ensure the due administration of justice and protect the integrity of the judicial process. In my view, the restraint sought by the defendants, insofar as it is formulated in terms of 'working for, aiding or otherwise assisting . . . any of the plaintiffs', is not well-expressed and likely goes beyond what is required to meet that objective. The appropriate form of order is that:
66 As there is a prospect that Mr Qwah may be required to give evidence as a witness in the proceeding, any restraint imposed should not prevent him from performing that role. That is something that the defendants acknowledge, and have sought to cater for in the form of restraint they proposed. Accordingly, it is appropriate that a further order be made to the following effect:
67 Each of the parties made submissions as to costs in their written outlines. In my view, given the response from the plaintiffs, it was necessary for the defendants to proceed with their application, and having done so, they have been successful in obtaining relief of the kind sought. Accordingly, the plaintiffs should be ordered to pay the defendants' costs of the application on the standard basis.
[1] Hereafter I shall refer to the plaintiffs as Jon and Kevin, and to the second defendant as Kyle because that is how the parties refer to themselves. I mean no disrespect in doing so.
[2] Affidavit of Kyle Lam affirmed on 30 April 2021 (Kyle Lam 30.04.21), [19] and exhibit KWHL-1 (KWHL Bundle), 30.
[9] Kyle Lam 30.04.21, [15], [17], KWHL Bundle, 1, 4, 7, 11, 12, 18, 21.
[10] Kyle Lam 30.04.21, [18], KWHL Bundle, 27.
[11] Kyle Lam 30.04.21, [20], [22], [24], [25], [26], [27].
[12] I refer to Yin Lam as Yin because that is how the parties refer to him. I mean no disrespect in doing so.
[14] Affidavit of Yin Lam affirmed on 30 April 2021 (Yin Lam 30.04.21), [8].
[27] Affidavit of Meng Meng Ng affirmed on 20 May 2021 (Meng Meng Ng 20.05.21), exhibit MMN-1.
[29] Notice of Change of Solicitor filed on behalf of the plaintiffs on 21 May 2021.
[30] The hearing was recorded by the Court's transcript provider but as yet no transcript of the proceeding has been made available.
[31] Senior counsel for the plaintiffs, Mr Williams QC informed the Court that he did not require the defendants to file an amended summons.
[32] [1995] VicRp 28; [1995] 1 VR 446, 452.
[38] Tricontinental Corporation Ltd v Holding Redlich (a firm) (Supreme Court of Victoria, Mandie J, 22 December 1994).
[40] [2007] FCA 491, [3].
[41] [2005] NSWSC 1181; (2005) 64 NSWLR 561 ('Kallinicos').
[42] Kallinicos [2005] NSWSC 1181; (2005) 64 NSWLR 561, 582 [76] (citations omitted).
[43] Kallinicos [2005] NSWSC 1181; (2005) 64 NSWLR 561, 586 [92].
[44] [1995] VicRp 28; [1995] 1 VR 446, 452.
[45] In context, 'likewise' is a reference to the position in Canada, as explained by Richardson J of the Court of Appeal of New Zealand in Black v Taylor [1993] 3 NZLR 403, 412 citing with approval a decision of the Full Court of the Ontario Divisional Court in Everingham v Ontario (1992) 88 DLR (4th) 755 at 761-2.
[46] [1994] 1 NZLR 587, 590.
[47] [1995] VicRp 28; [1995] 1 VR 446, 452-3.
[48] [2006] FCA 1404, [35] citing Yunghanns v Elfic Ltd (unreported, Supreme Court of Victoria, Gillard J, 3 July 1998).
Lee & Anor
MK Trading Co Aust Pty Ltd & Anor [2021] VSC 343
(1990) 4 WAR 357
(2005) 64 NSWLR 561