Plaintiffs v Defendants

Plaintiffs v Defendants - [2015] VSC 612 - VSC 2015 case summary — Zoe

[15]

1 The IB Protocol does not comply with the Guidelines

Article 7 of the Guidelines states:

(a) Contact between personnel involved in the current matter and screened persons should be appropriately limited to ensure that the passage of information or documents between those involved in the current matter and screened persons does not take place.

(b) The law practice should consider whether it is appropriate for such personnel to have contact with the client in other matters during the current matter.

1.1 Article 7(a) of the Guidelines

The IB Protocol does not comply with article 7(a) of the Guidelines because it does not establish an appropriate regime to ensure that future contact between Ms Moore and personnel working on the Coinmach matter will be "appropriately limited".

To date, contact between Ms Moore and other personnel working on the Coinmach matter has not been appropriately limited. To the contrary, Ms Moore and Mr Grieve continue to sit next to each other in Piper Alderman's Sydney office, and on the same floor as other personnel working on the matter, approximately 20-25 metres away.

Nothing in the proposed IB Protocol prevents Ms Moore from continuing to work in close proximity to personnel working on the Coinmach matter. Instead, article 2(iii) of the IB Protocol simply requires that personnel working on the matter must not talk about the matter with Ms Moore, or to others while Ms Moore is present "or in hearing proximity".

These measures do not constitute "appropriate limits" on contact between Ms Moore and other personnel working on the Coinmach matter. This is because they cannot prevent inadvertent communications between colleagues working on the same floor of the same office over the lifespan of a matter that is likely to take at least 1-2 years to resolve.

....

Please send us a revised version of the proposed IB Protocol and an outline of the measures Piper Alderman intends to implement to ensure that contact between persons involved in the Coinmach matter and Ms Moore is appropriately limited.

If Piper Alderman cannot or does not intend to comply with article 7(a) aspect of the Guidelines, it will be unable to satisfy paragraphs 86(b) and 89(b) of the Judgment.

Our clients reserve all of their rights in this respect.

[17]

With regard to the information barrier protocol implemented by our client, we disagree with your view that it does not comply with the Guidelines. As you have rightly observed, Article 7 requires that contact between personnel involved be appropriately limited. Significantly, that relates to contact between personnel involved in the current matter and "screened persons". You will note that the definition of "screened person" in the Guidelines means a person who possesses confidential information from one retainer which is relevant to another, current retainer.

As you know, in his judgment, His Honour concluded at [85] that the allegedly confidential information will never be relevant to legal and factual issues in this case and that "... there only remains a theoretical possibility that at some point confidential information could have relevance to an issue related to enforcement ...".

The application of Guideline 7 must be considered in light of the judgment. Given the theoretical risk which might only possibly arise in the future, what has been proposed by our client is more than adequate. There could only be a breach if Ms Moore deliberately or inadvertently disclosed something relevant to the facts and issues in the current proceeding. It goes without saying that Ms Moore would not deliberately breach an undertaking to the court. It is inconceivable that she would inadvertently do so, in circumstances where she has been subjected to a very personal attack on her credibility regarding confidential information to which she may have possibly been exposed. Further the court has found that none of the information in relation to which confidentiality is claimed is relevant to the facts and issues in the case.

It follows that any risk of breach is adequately protected and has been for a long time. Notwithstanding that, again with a view to avoiding unnecessary costs, Mr Gordon Grieve is prepared to move offices, so that he will be positioned six offices away from Ms Moore. Mr Grieve already uses separate administrative support to that used by Ms Moore.

Piper Alderman will be moving to new offices in two months or so and physical separation of the kind proposed above will be maintained in the new offices premises.

[73]

Below, we set out further details of the confidential and privileged information to which Ms Moore was and is privy, and to which your clients are not entitled. In referring to this confidential and privileged material, we do not intend, and are not instructed or authorised, to waive any privilege.

Further, we identify and apply the correct legal standard.

This additional information, and a correct application of the law, establishes that Ms Moore, and potentially Piper Alderman, are in a position of conflict and should have no further involvement in the matter.

If you do not take steps to remedy this conflict of interest as a matter of urgency, our client will have no option but to seek the removal of Ms Moore, and your firm, from this matter in order to protect its confidential and privileged information.

1 Relevant work undertaken by Ms Moore at HSF

Your 23 January 2015 letter requests further particulars of the relevant confidential and privileged information acquired by Ms Moore during her work at Herbert Smith Freehills.

We have reviewed the relevant matter files, Ms Moore's timesheets and her email inbox for this purpose. Our review identified a significant volume of confidential and privileged information associated with the Coinmach transaction and bearing upon the conduct of the Coinmach proceedings, to which Ms Moore was privy.

As an example, we have attached a screenshot of Ms Moore's personal email inbox, redacted for confidentiality. The screenshot shows that Ms Moore's "Past Matters" folder included a subfolder entitled "Coinmach BBL". This subfolder contains communications relevant to the work Ms Moore undertook for BBIPL and its subsidiary, Babcock & Brown Australia Pty Limited (BBA), on issues associated with the Coinmach transaction. The screenshot also shows that Ms Moore's "Current Matters" folder included a subfolder entitled "BBIPL".

As stated in our 18 December 2014 letter, Ms Moore billed almost 500 hours in respect of eight separate BBIPL and BBA matters during her employment with HSF.

Some 260 hours of this work was spent working on employee indemnity and related matters that bear upon the conduct of the Coinmach proceedings. Some of this work is recorded in correspondence filed in Ms Moore's subfolder entitled "BBIPL". Other work was saved to the relevant matter workspaces.

In addition to the extensive email correspondence that evidences Ms Moore's significant knowledge of BBIPL's confidential and privileged information, our review revealed that Ms Moore authored numerous drafts of substantive correspondence and legal advice on issues associated with the Coinmach transaction and bearing upon the conduct of the Coinmach proceedings.

You will appreciate the inherent difficulties in describing these confidential and privileged matters in detail. In fact, our client is subject to confidentiality restrictions that preclude it from disclosing to your firm even the general nature of some of the matters associated with the Coinmach proceedings on which Ms Moore worked.

Nevertheless, we set out below some further details of Ms Moore's work that illustrate the relevance and significance of the confidential and privileged information to which Ms Moore is privy. Your clients are not entitled to any of this information.

We reiterate that nothing in this letter should be taken to be a waiver of confidentiality or legal professional privilege over any of the information described herein.

Our client also reserves the right to bring to the Court's attention, on a confidential and ex parte basis if necessary, the details of all of Ms Moore's work at HSF that was associated with the Coinmach transaction and bears upon the conduct of the Coinmach proceedings, and to which your clients are not entitled.

1.1 Work associated with the Coinmach transaction

Our review revealed that Ms Moore performed work for BBIPL and BBA that was associated with the Coinmach transaction and related legal proceedings, including:

[79]

Neither of these has occurred.

2.2 Ms Moore's duty of loyalty to BBIPL also precludes her from acting

Ms Moore is prohibited from acting against BBIPL in the Coinmach proceedings by virtue of her solicitor's duty of loyalty, which survives her departure from HSF and extends beyond the need to safeguard confidential information.

The authorities support the proposition that a court will restrain Ms Moore from acting on behalf of your clients to prevent disclosure of confidences owed to BBIPL, to ensure her duty of loyalty to BBIPL is respected, and to uphold as a matter of public policy the special relationship of solicitor and client, which the law will not generally permit to be "s_tained by the appearance of disloyalty."_

2.3 Ms Moore's present lack of detailed recollection is irrelevant

In your 23 January 2015 letter, you asked that we demonstrate that Ms Moore has retained a "detailed recall" of the information she obtained whilst employed at HSF.

That is not the applicable test. There is no such onus on our client.

In any event, Ms Moore's asserted lack of any present recollection of BBIPL's confidential and privileged information will not be determinative. There remains the very real possibility that her recollection might be refreshed during the course of her work in the Coinmach proceedings. For example, during any future settlement discussions, it is reasonable to assume that Ms Moore's memory will be refreshed as to the conduct of previous negotiations by BBIPL and the terms on which it may be willing to settle.

Further, Ms Moore's assertion that she cannot recall any relevant confidential information is no guard against a subconscious drawing on that information to BBIPL's detriment.

Instead, the correct test is that Ms Moore will be restrained from acting against BBIPL unless there is no real risk of disclosure of the confidential information. The risk does not need to be substantial, simply more than merely fanciful or theoretical.

In the present case, the risk is substantial. There is a real possibility that during the course of these proceedings, Ms Moore will recall relevant confidential and privileged material that is detrimental to BBIPL, or subconsciously draw on that information to BBIPL's detriment, or both.

At a glance

Court

Decision date

Before

Source

Judgment (236 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (3)