Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd & Anor [2005] WASC 255

Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd & Anor [2005] WASC 255 | Case summary | Zoe

[230]

125 In my view, none of the matters raised on behalf of RMD militate against a finding that Van der Meers owed Anderson Formrite an obligation of confidentiality. As I have indicated above, the courts have had some difficulty in identifying a test to be applied in determining whether the circumstances import an obligation of confidence. The best that could be achieved was to identify an objective test as to whether the circumstances are such that any reasonable person would have realised that the information being provided was being provided in confidence: Duchess of Argyll v Duke of Argyll at 330. However, there is a wealth of cases in which specific relationships have been found to give rise to a duty of confidentiality. The nature of these relationships is a useful guide to determining whether relationships of a similar kind can also be said to create a duty of confidentiality. A duty of confidentiality has been imposed on medical practitioners, solicitors, accountants, bankers, management and agricultural consultants and employees. It is difficult to see why an engineer providing professional advice would be excluded from such a list. However, the more general descriptions are, in my view, of greater assistance. A person who receives information in a commercial context or who gives information on a businesslike basis is highly likely to be under a duty to preserve the confidentiality of such information: Coco v AN Clarke at 48. A duty of confidentiality has also been said to apply to "professional men": Parry Jones v Law Society. Having considered these authorities and the nature and purpose of Van der Meers' engagement by Anderson Formrite, I am satisfied that a professional engineer who accepts an engagement to provide expert engineering advice to another is under a duty of confidentiality which equity will enforce if there is a real and sensible risk of confidentiality being breached. In this case, there will be no difficulty in concluding that such a risk exists because information has already been passed to RMD. It is also apparent that Anderson Formrite has in no way authorised or consented to Van der Meers passing information to RMD.

[300]

(i) the right of a solicitor to act for any client and the right of all members of the community to retain a solicitor of their own choice;

(ii) the right of a client to the maintenance of all confidential information obtained by the solicitor during the course of the retainer, which right continues until the client expressly or impliedly consents to the discharge of the obligation of confidence;

(iii) that as a general rule it is necessary to identify and establish that some confidential information was provided but the degree of particularity of the confidential information must depend upon all the circumstances: see Bricheno v Thorp (1833) 2 Cr and M 183[1833] EngR 139; , 149 ER 725. Often it cannot be identified for fear of disclosure. In considering this factor it must be borne in mind that a solicitor makes notes, forms views and opinions of clients and observes things that the client may have forgotten or overlooked. In some cases the circumstances of the retainer and the nature of the legal work will be sufficient to establish the nature of the confidential information. In this regard the relationship between the solicitor and client may be such that the solicitor learns a great deal about his client, his strengths, his weaknesses, his honesty or lack thereof, his reaction to crisis, pressure or tension, his attitude to litigation and settling cases and his tactics. These are factors which I would call the "getting to know you" factors. The overall opinion formed by a solicitor of his client as a result of his contact may in the circumstances amount to confidential information that should not be disclosed or used against the client.

(iv) That a solicitor must, consistent with his retainer, act in the best interests of his client which means not only exercising skill but also putting at his client's disposal all relevant knowledge and if a solicitor is in a position where he is unable to reveal all his knowledge to a client he should not act for him. See Spector v Ageda (1973) 1 Ch 30 at p48. This must be especially the position where the solicitor has acted for two clients in relation to one transaction and then thereafter acts for one against the other in relation to matters arising out of the same transaction."

[308]

185 Frankland River Olive Company Ltd v Charters Securities Pty Ltd (Receiver and Manager Appointed) & Anor [2004] WASC 88 is another example of a case where the preservation of confidentiality was not at the heart of the order made. The first defendant Chartered Securities Pty Ltd owned land on which a vineyard was located. The plaintiff Frankland River Olive Company Ltd was the lessee of the land. The land was originally leased to Southern Wine Corporation Ltd. This company held a restricted security dealer's licence, which allowed it to carry on a securities business as a responsible entity of a managed investment scheme, known then as Southern Wine Managed Investment scheme. In the Scheme, Southern Wine Corporation entered into a licence and management agreement with investors who were called growers. The prospectus which issued in relation to the scheme, and which led growers to invest funds, revealed that Mr Bennett was one of four directors and chairman of Southern Wine Corporation. Bennett & Co were the solicitors for Southern Wine Corporation. Chartered Securities owned the land. It was indebted to the Commonwealth Bank. A loan was arranged to allow the first defendant to purchase the land. The loan was secured by a mortgage to the bank and a guarantee by Woodzone Nominees Pty Ltd, the second defendant. Chartered Securities defaulted under the loan agreement with the Commonwealth Bank and the Bank appointed receivers to the assets and undertakings of the first defendant. The plaintiff began negotiating with the bank's receivers to pay out the debt owed by the first defendant. Woodzone then competed with the plaintiff for the favours of the Commonwealth Bank but it was Woodzone who succeeded in its dealings with the bank and paid out the debt which was then owing to the bank by the first defendant. As a result, by subrogation, Woodzone took over the Commonwealth Bank's rights under its security document. Woodzone then appointed its own receiver who made demand on the plaintiff for payment of outstanding rent. Bennett & Co commenced to act for Woodzone. Ultimately a writ was issued and the plaintiff sought an urgent injunction preventing the first defendant from interfering with the plaintiff's possession of the land.

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Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd & Anor [2005] WASC 255 (17 November 2005)

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Cases Cited (22)