(2005) 64 NSWLR 561
Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146
Source
Original judgment source is linked above.
Catchwords
(2005) 64 NSWLR 561
Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146
Judgment (2 paragraphs)
[1]
Judgment
By a Notice of Motion filed with the leave of the Court on 14 May 2015, the defendants and Mr George Dimitriou, who is the sole director of each of the defendants, seek an order that Mr Damien Allen of Counsel be restrained from appearing in these proceedings as counsel for the plaintiff.
The motion was supported by an affidavit sworn by Mr Dimitriou on 13 May 2015. Mr Allen, who appeared for himself on the motion, opposed the making of the order, and relied upon his own affidavit sworn on 14 May 2015. The motion was heard in the Duty List on 14 May 2015, prior to the commencement of the hearing of the substantive proceedings. After the hearing of the motion, I stated that the motion would be dismissed, and that I would give reasons for my conclusion as soon as was convenient. These are my reasons.
Mr Dimitriou deposed that he was very upset and deeply offended that Mr Allen was acting against the three defendant companies. He said that Mr Allen was effectively acting against him personally, and that it was wrong and unconscionable of him to do so.
In a letter to Mr Allen dated 7 May 2015, Mr Dimitriou stated that Mr Allen had been "my barrister" for over 3 years, providing services for companies associated with Mr Dimitriou and also on personal matters for Mr Dimitriou. Reference was also made to personal lunches and dinners the two had together, and to Mr Allen's attendance at a Christmas party held by the first defendant. Mr Dimitriou deposed that a firm friendship existed between them, from about September 2012 to July 2014, which featured discussion of personal matters.
Mr Dimitriou's letter of 7 May 2015 further referred to advice given by Mr Allen concerning the first defendant's retainer agreements that "form part of the caveatable charge of the properties" the subject of the proceedings. In that regard, it appears that Mr Allen provided a precedent costs agreement, and that such precedent was used by the first defendant, including in relation to a costs agreement dated 16 May 2012. That costs agreement, which is relied upon by the first defendant to support its caveat over the plaintiff's property includes clauses (on page 8) that provide for the grant of charges by clients over their real property to secure debts to the first defendant.
Mr Dimitriou deposed that he regularly recommended to clients (including the plaintiff and his wife) that they retain Mr Allen for their court proceedings and that Mr Dimitriou's office would remain closely involved in such matters. It appears that Mr Dimitriou also provided assistance to Mr Allen in relation to the recovery of some outstanding fees.
Mr Dimitriou further deposed that Mr Allen represented him and his companies in litigation brought in the District Court by Carolyn Rosier, in which a number of serious allegations were made against Mr Dimitriou. In paragraph 18 of his affidavit, he states:
"From about November 2012 to October 2013, I was involved in certain civil litigation involving the Rosiers that was heard in the District Court. I had no hesitation in asking Mr Allen to represent me and my companies in those proceedings. The Rosiers in that matter made a number of scurrilous allegations against me. Mr Allen and I had a number of open and frank discussions concerning these matters which I regard as highly confidential. I would not want him repeating anything of the matters that we discussed to other persons."
In paragraphs 19 and 20 of his affidavit, Mr Dimitriou further states:
"As a consequence of Mr Allen acting for me and the companies and entities associated with me, I also believe that Mr Allen is in possession of copies of a number of documents that I would consider to be highly confidential. I am also concerned that none of that documentation fall into other persons' hands or even that the fact of the existence of that documentation be shared with other third parties.
I am also aware that Mr Allen knows a lot about me personally. I believe that he is aware of my general reluctance to be personally involved in my own litigation matters. I am also keenly aware that he knows that I usually do nothing about taking steps in litigation matters when it involves me or companies or other entities associated with me."
Mr Allen deposed that on 6 May 2015, after receiving the brief in this matter and learning the identity of the caveators, informed the plaintiff that he had previously acted for Mr Dimitriou and had been on friendly terms with him. Mr Allen deposed that on 8 May 2015 he told the plaintiff that he was not aware of having any confidential information of the defendants, or of any other reason why he could not act in the matter, and the plaintiff told him that he wanted him to act in the matter.
Mr Allen deposed that he further considered his position on 13 May 2015 (including having a discussion with a Senior Counsel about it) and confirmed his earlier views that he:
1. held no confidential information of the defendants or Mr Dimitriou; and
2. had never given advice to the defendants or Mr Dimitriou in relation to the current matter or concerning the defendants' or Mr Dimitriou's dealings with the plaintiff.
Mr Allen further concluded that he would never become a material witness in the case.
I allowed Mr Foley, solicitor, who appeared for the applicants on the motion, the opportunity to cross-examine Mr Allen. Mr Foley did not challenge those aspects of Mr Allen's evidence set out in the preceding paragraph. It was not put that Mr Allen possessed any particular information or documents of a confidential nature that could be used to the defendant's disadvantage in these proceedings. The focus of the cross-examination was rather upon aspects of the personal relationship that had existed between Mr Allen and Mr Dimitriou, and the types of information they imparted to each other in the course of that relationship.
It is not in dispute that Mr Allen was retained to provide services to the first defendant in two earlier matters. These were a matter involving a Mr Graham Stevens, and the Rosier matter referred to earlier. Mr Allen also acted for Mr Dimitriou in the Rosier matter. Insofar as the first defendant is concerned, Mr Allen can be seen to be now acting against a former client. Mr Allen has never acted for the second defendant or the third defendant.
As pointed out by Brereton J in Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 at [32], there has been acceptance in New South Wales of the authority of Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 for the view that, in a case where the retainer is no longer active, the jurisdiction of the court to intervene at the suit of a former client to restrain a solicitor from acting is founded solely on obligations of confidence and is not and cannot be connected with some principle of conflict of interest. That view has subsequently been endorsed by the Court of Appeal (see Cooper v Winter [2013] NSWCA 261 at [96], and Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146; (2014) 86 NSWLR 481 at [24]). In this respect, there is no reason to take any different approach when the legal practitioner is a barrister. In Kallinicos (supra), Brereton J stated (at [35]):
"Prince Jefri Bolkiah holds that a former client who seeks to restrain its former solicitor from acting against it must show (1) that the solicitor is in possession of the former client's confidential information, to the disclosure of which the former client has not consented, and (2) that the information is or may be relevant to the new matter, in which the interests of the solicitor's new client may be adverse to those of the former client. […]"
After a comprehensive review of the authorities, including the Victorian Court of Appeal decision in Spincode Pty Ltd v Look Software Pty Ltd [2001] 4 VR 501, Brereton J stated (at [76]) that the following principles were established:
1. during the subsistence of a retainer, where the court's intervention to restrain a solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court's jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting for clients with competing interests;
2. once the retainer is at an end, however, the court's jurisdiction is not based upon any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure);
3. after termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention, such duty having come to an end with the retainer;
4. however, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in the aid of the administration of justice;
5. the test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice;
6. this jurisdiction is to be regarded as exceptional and is to be exercised with caution;
7. due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause; and
8. the timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief.
In the present case, I am not persuaded that Mr Allen is in possession of any confidential information of the first defendant (or any of the other applicants) that is or may be relevant to the issues in this case which is essentially concerned with the validity of three caveats and whether the caveators would be successful in obtaining interlocutory injunctive relief to protect the interests they claim to have in the plaintiff's land.
Mr Foley, despite being given numerous opportunities to identify or specify any such confidential information, was quite unable to do so. However, Mr Dimitriou's evidence suggests in general terms that Mr Allen is aware of some personal information about Mr Dimitriou and of the nature of some serious allegations that were made against him in the Rosier matter. Nevertheless, I cannot see how such information (even if imparted in circumstances giving rise to obligations of confidence) could be relevant to, or used against the defendants, in these proceedings. Information about a general reluctance on Mr Dimitriou's part to be involved in or participate in litigation could conceivably fall into that category, but I do not think that it has been established that Mr Allen is in possession of confidential information about a general reluctance on Mr Dimitriou's part to be involved in or participate in litigation. The continued existence of any such aversion must be considered questionable in the light of Mr Dimitriou's involvement with the present motion. In any event, however, Mr Allen denied that he was aware of any such aversion and I accept his denial, which was not directly challenged in cross-examination.
Mr Foley suggested (relying upon statements made by Byrne J in Village Roadshow Ltd v Blake Dawson Waldron [2003] VSC 505 at [34]-[39]) that once it is shown that information has been imparted in confidence, an onus was cast on Mr Allen to show that there would be no disclosure of confidential information. However, in the circumstances of this case, where there has been no identification or specification of any information imparted to Mr Allen in confidence, I do not think that Mr Allen had any such onus. Moreover, as mentioned earlier, Mr Allen deposed that in his view he possessed no confidential information of the defendants or Mr Dimitriou, and this evidence was not challenged.
I also do not think that this is an appropriate case to exercise the Court's inherent jurisdiction to restrain a legal practitioner from acting. I do not think that a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires that Mr Allen should not appear for the plaintiff in this case.
Such a person can be taken to be aware that a friendly personal relationship, as well as a professional working relationship, existed until fairly recent times between Mr Allen and Mr Dimitriou, who is closely associated with the defendants. The person can also be taken to be aware that whilst Mr Allen may be in possession of some information personal to Mr Dimitriou, and details of some serious allegations made against Mr Dimitriou in earlier litigation, he is not in possession of information that is or may be relevant to the issues in the present case. The person should also be taken to be aware that counsel such as Mr Allen are independent advocates, obliged to operate in accordance with the Barrister's Rules, which provide, inter alia, for the cab-rank principle, an overriding duty to the Court to act with independence in the interests of the administration of justice, and an obligation to promote the best interests of the client without regard to any consequences to the barrister or to any other person. Finally, the person should be taken to be aware that whilst Mr Allen's precedent may have been relied upon by the first defendant for the charging clause that supports its caveat, the question whether Mr Allen's precedent was good or bad is not of itself an issue in the case.
In the circumstances, there would be no reason to think that Mr Allen, who disclosed to the plaintiff that he had previously acted for Mr Dimitriou and been on friendly terms with him, would be unable to discharge his obligations with independence and objectivity.
The authorities make it clear that the jurisdiction to prevent a legal practitioner from acting is one that must be exercised with caution, and with due regard to the principle that a litigant should not lightly be deprived of the services of a lawyer of their choice.
Mr Foley was not able to articulate how the integrity of the judicial process (including the appearance of justice being done) would be undermined by Mr Allen's involvement, other than by submitting that it would be seen as an undesirable situation of "mate against mate". In my view, whilst a reasonably informed member of the public might think that this situation could cause some personal discomfort, embarrassment or even distress to Mr Dimitriou, that person would not conclude that the proper administration of justice requires that Mr Allen be prevented, against the wishes of the plaintiff, from appearing for the plaintiff.
For the reasons set out above, I decided that the applicants' Notice of Motion should be dismissed. Costs should follow the event.
The Court orders that the Notice of Motion filed on 14 May 2015 be dismissed with costs.
[2]
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Decision last updated: 18 May 2015