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[2026] NSWCA 55
appellant. Leave to appeal granted; the Appellant was to file a Notice of Appeal in the form of the draft within 7 days; appeal allowed; the orders of 21 August 2025 set aside and replaced by dismissal of the...
The Court of Appeal set aside an order that had stopped Solve Legal acting for Ms Townsend. The alleged information was about a former supervisor and his wife, not Banga Legal clients. The Court said social observations were not confidential, and discussions about litigation strategy were ordinary professional know-how on the evidence before it. The information had not been identified with the precision required for a restraint. The primary judge had also made orders against Solve Legal without it being joined to the motion, even though the orders directly affected the firm. The Court emphasised that restraining a lawyer is an exceptional step and that parties generally choose their own lawyers.
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2,575 words · generated 08/10/2026
This Court of Appeal decision concerned an attempt to prevent a law firm from acting for a former employee in litigation with her former employer. The central issues were the exceptional jurisdiction to restrain lawyers from acting, the character and identification of alleged confidential information, and the making of orders against a firm that had not been joined to the motion.
3 cited instruments linked from this judgment.
Banga Legal, a law firm, and its principal solicitor, Mr Banga, brought proceedings against Ms Townsend, a former employee. They alleged that she had disclosed confidential information about Mr Banga and committed other misconduct. Their proceedings sought, among other relief, to restrain her from disclosing information said to be protected by contractual and fiduciary duties [10]-[11].
The proposed restraint against Solve Legal arose from the work history of Mr Shamsabad. He had worked as a consultant solicitor for Banga Legal between about December 2021 and August 2022, then joined Solve Legal on 8 August 2022 [4]-[5]. Ms Townsend began working for Banga Legal after Mr Shamsabad had left. In 2024, Mr Shamsabad acted for her in relation to employment law advice and later proceedings [6]-[9].
Banga Legal and Mr Banga alleged that, while at Banga Legal, Mr Shamsabad had obtained confidential information about Mr Banga and his wife, including their personalities, vulnerabilities and litigation strategies. They argued that he might have passed that information to Solve Legal, which had acted for Ms Townsend [15]. Mr Shamsabad left Solve Legal in July 2025 and no longer acted for her [13].
On 11 July 2025, Banga Legal and Mr Banga filed a motion against Ms Townsend seeking to restrain Solve Legal from acting for her. Solve Legal was not a party to either the motion or the proceedings [12]. The primary judge nevertheless restrained Solve Legal from acting or advising Ms Townsend and ordered the firm to pay the applicants’ costs [28].
Solve Legal obtained leave to appeal. The Court of Appeal allowed its appeal, set aside the primary judge’s orders, dismissed the motion and made costs orders in favour of Ms Townsend and Solve Legal [1], [59]-[60]. Payne JA gave the principal reasons, with Kirk JA and Adamson JA agreeing [61]-[62].
The Court began from the importance of a party’s choice of legal representative. The power to restrain a lawyer is “an extraordinary one which should be used sparingly” [33]. Although choice of lawyer is not absolute, the Court said parties should be able to choose their lawyers unless there is a compelling reason to the contrary [34]-[35]. The parties had approached the primary judge’s test as asking what a fair-minded, reasonably informed member of the public would conclude the proper administration of justice required [35].
The evidence about the alleged information was important. Mr Banga’s affidavit referred to social contact between the families, including dinners and an engagement party, and to Mr Shamsabad’s observations of Mr Banga and his wife. It also referred to discussions between Mr Banga and Mr Shamsabad about litigation strategy, such as subpoenas, witnesses, defences and legal points [22].
The Court did not accept that these matters justified the restraint. It said observations made in a social setting could not amount to confidential information of the kind warranting an order under this exceptional jurisdiction [37]. As to the litigation discussions, the Court treated them as know-how or subjective knowledge acquired in the ordinary course of legal work. It relied on the distinction between information protected as confidential and knowledge that, once learned, becomes part of a worker’s skill and knowledge [37]. The Court considered that using the jurisdiction to prevent junior lawyers from using that kind of professional knowledge would, in effect, impose a significant restraint of trade [37], [57].
The Court also rejected the assumed link between understanding a lawyer’s litigation strategy and knowing how that lawyer would react as a client. It said that understanding how a lawyer conducts litigation did not necessarily reveal anything useful about how that lawyer would behave as a client [38].
A further problem was that the information had not been precisely identified as confidential information capable of supporting restraint. The Court stated that precise identification is required when confidential information is relied on [53]. It distinguished between a case where a solicitor is known to possess a substantial body of client confidential information, but the precise information that might be used cannot be pinpointed, and a case where no confidential information is identified at all [54]. It concluded that the latter description better captured the difficulty in this case [53]-[55].
The primary judge’s reliance on Edgecliff Car Rentals was also an error of principle. Payne JA explained that the relevant passage in that case concerned client confidential information, whereas this case concerned information about a former co-worker and his wife [52]. The Court considered that the analogy could not justify extending the jurisdiction without a clear and compelling explanation [41]-[42], [52]. It said the dicta in Edgecliff at [29] went too far and should no longer be followed [50], [54].
Finally, Solve Legal had not been joined. A firm appeared through a solicitor for Ms Townsend, but that did not make the appearance one for Solve Legal [19]-[20], [47]. Because the injunction and costs order directly affected Solve Legal, the Court held that it should have been joined. Joinder, rather than notice alone, was the default where proposed orders directly affect a person’s rights or liabilities [45]-[48]. No costs order against Solve Legal had been sought or foreshadowed, and the firm was entitled to have that order set aside [48].
The judgment restated the established approach that restraining a lawyer from acting is exceptional and must be approached with caution. It relied on authorities including Kallinicos v Hunt and Hamzy v Commissioner of Corrective Services NSW, and emphasised the importance of party choice [33]-[35]. It did not replace the fair-minded, reasonably informed observer formulation accepted by the parties; rather, it applied that approach in circumstances involving alleged information about a former supervising lawyer rather than client information [35]-[38].
On appellate review, the Court held that the correctness standard applied because the decision involved an evaluative judgment for which the law permitted only one outcome. It explained that the House v The King constrained standard applies where there is a range of legally permissible answers, while correctness applies where there is only one legally permissible outcome, even if evaluation is involved [40]. Payne JA added that the result would be the same even if the House standard applied, because the primary judge had made errors of principle [41]-[43].
The judgment gives particular emphasis to the requirement that confidential information relied on for restraint be identified precisely [53]. That requirement was not displaced by the possibility that a party may have difficulty knowing what advantage a solicitor could obtain from information. The Court’s distinction is that uncertainty about the possible use of established client information is not the same as failing to identify confidential information in the first place [54]-[55].
The judgment also limits the use of the Edgecliff Car Rentals reasoning. It holds that the discussion in that case arose in the context of client confidential information and did not justify extending restraint principles to a junior solicitor said to know information about a former co-worker [52]-[57]. The Court did not hold that such a restraint could never be justified. It expressly left that question open, while stating that compelling reasons would be necessary [42], [52].
Separately, the decision reinforces the procedural principle that a person directly affected by orders sought is a necessary party. The applicant for the orders bears the obligation to join that person; notice and an opportunity to make submissions do not ordinarily replace joinder [45]-[48]. The decision applied that principle both to the restraint and to the costs order.
At [33], Payne JA said the inherent jurisdiction to prevent a lawyer acting “is an extraordinary one which should be used sparingly.” In plain English, this power is not a routine way to resolve concerns about a lawyer’s past employment or knowledge. The court treated restraint as a serious intervention requiring a strong justification.
At [34], the Court stated that parties should be able to choose their lawyers absent a compelling reason otherwise. This identifies the interest that a restraint application must confront: it is not only a question of whether information might be useful, but also whether the circumstances justify overriding the client’s choice.
At [37], the Court separated social observations from ordinary litigation knowledge. It said observations of Mr Banga and his wife in a social setting could not amount to confidential information warranting this order. It characterised discussions about litigation strategy as know-how that becomes part of a lawyer’s professional skill and knowledge. The judgment does not say that every discussion about litigation is incapable of protection; its reasoning concerns the material and circumstances before it.
At [53]-[54], the Court explained the identification requirement. A party seeking restraint must identify the confidential information with precision. It is not enough to rely on a general assertion that a former solicitor knows a person’s vulnerabilities or ways of approaching litigation. The Court distinguished a known body of client confidential information whose possible use cannot be specified from a case where no qualifying confidential information has been identified.
At [52], the Court said the jurisdiction should not be used as a substitute restraint of trade. In context, this means that ordinary professional learning acquired through supervision cannot, without compelling justification, be converted into a basis for preventing junior lawyers from acting in future matters involving a former supervisor.
At [45]-[48], the Court explained why Solve Legal’s absence as a party mattered. A person directly affected by an order is ordinarily to be joined. The fact that a solicitor from Solve Legal appeared for Ms Townsend did not mean that Solve Legal itself was a party or was represented in that capacity. The distinction had practical consequences because the injunction and costs order were made against the firm.
The decision is most directly relevant where an application seeks to restrain a law firm or lawyer from acting because a current or former employee is said to have acquired information from a former workplace. It is particularly relevant where the alleged information concerns a supervising lawyer, the lawyer’s personal characteristics, or litigation know-how learned through ordinary professional supervision, rather than confidential information belonging to a client [36]-[38], [52]-[57].
It is also relevant where the moving party describes alleged information in general terms, such as knowledge of a person’s personality, vulnerabilities or likely litigation approach, without identifying particular information said to be confidential [22], [53]-[55]. The judgment cautions against treating inability to specify a supposed forensic advantage as proof that confidential information exists. The Court regarded proof and identification as distinct from speculation about possible use [54]-[55].
The case may also matter where the person or firm targeted by the proposed order has not been joined to the application. If the order would directly restrict that person’s conduct or impose a costs liability, the joinder principle discussed at [45]-[48] is engaged. The Court held that appearing through a lawyer for another party did not cure the failure to join Solve Legal [47]-[48].
The decision does not resolve every possible case involving information about a former colleague. It leaves open whether a restraint might be justified in some such circumstances, while requiring compelling reasons and careful attention to the exceptional nature of the jurisdiction [42], [52]. Its reasoning should therefore be read in connection with the specific evidence, the type of information asserted and the procedural position of the affected person.
The judgment itself does not discuss later judicial treatment of its own decision, and the material provided contains no later cases applying or distinguishing Solve Legal Pty Ltd v All is 1 Pty Ltd. It would therefore be unsupported to state how later courts have treated this precedent.
The judgment does discuss related decisions and describes their role in the reasoning. It applies principles from Kallinicos v Hunt and other restraint authorities concerning the exceptional nature of the jurisdiction and the importance of choice of lawyer [33]-[35]. It also applies authorities on joinder, including News Ltd v Australian Rugby Football League Ltd, Ross v Lane Cove Council, John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd and Tahmoor Coal Pty Ltd v Visser [45]-[48].
The Court disapproved the relevant dicta in Edgecliff Car Rentals at [29], stating that the passage went too far and should no longer be followed [50], [54]. It considered Cleveland Investments Global Ltd v Evans and explained that it did not support dispensing with precise identification of confidential information; Cleveland Investments began from the proposition that confidential information must be identified [55]. It also considered Spincode Pty Ltd v Look Software Pty Ltd in its different factual setting, where lawyers had acted for a company on many matters over about five years and plainly held material client confidential information [56].
The judgment notes two subsequent procedural events in the wider dispute, but neither is described as later treatment of this Court of Appeal decision. The Federal Circuit and Family Court dismissed an application to restrain Solve Legal in the Fair Work Act proceedings on 27 November 2025, having been referred to the primary judge’s orders and reasons [16]. In March 2026, Meek J directed the parties to explore whether one court could address the disputes and temporarily stayed the Supreme Court proceedings [17]-[18]. Those events pre-date the Court of Appeal’s decision date of 16 April 2026 and should not be characterised as later appellate precedent treatment.
The Court expressly left open whether a restraint could ever be justified where the alleged information concerns another lawyer’s practice of law, rather than client confidential information. It said compelling reasons would be needed, but did not define what circumstances would satisfy that requirement [42], [52].
The decision also does not set out an exhaustive boundary between protected confidential information and know-how. It characterises the information in this case as social observation or subjective professional knowledge, and applies that assessment to the evidence before it [37], [53]. It does not determine how the distinction applies to other kinds of workplace information or different contractual arrangements.
The judgment does not decide every question concerning transmission of information within a firm. The primary judge had reasoned that it was too late to “unscramble the egg” because Mr Shamsabad had worked at Solve Legal and acted for Ms Townsend [27]. The Court’s reasons reject the restraint on the evidence and principles in this case, but do not establish a general test for every situation involving alleged internal communication of information [50]-[58].
Finally, the decision does not resolve the substantive allegations between Banga Legal, Mr Banga and Ms Townsend. It concerns the motion to restrain Solve Legal, the appeal from the orders made on that motion, and the procedural and jurisdictional grounds raised in that context [10]-[12], [59]-[60]. The wider proceedings and the parties’ underlying claims are not determined by the appeal disposition.
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Solve Legal Pty Ltd v All is 1 Pty Ltd (t/as Banga Legal) [2026] NSWCA 55
Hearing dates: 7 April 2026
Date of orders: 7 April 2026
Decision date: 16 April 2026
Before: Payne JA at [1];
Kirk JA at [61];
Adamson JA at [62]
Decision: (1) Leave to appeal granted.
(2) Appellant to file a Notice of Appeal in the form of the draft Notice of Appeal within 7 days.
(3) Appeal allowed.
(4) Set aside the orders of 21 August 2025 and in their place order:
(a) The plaintiffs’ Notice of Motion dated 11 July 2025 is dismissed.
(b) The plaintiffs pay Ms Townsend’s costs of the Notice of Motion.
(5) The First and Second Respondents pay the Appellant’s costs of the application for leave to appeal and the appeal.
Catchwords: LEGAL PRACTITIONERS — Solicitors — whether firm should be restrained from acting for a defendant — where firm sought to be restrained from acting when an employed solicitor was formerly employed by plaintiff firm — test for restraint where confidential information relates to principal of prior firm not client information — whether confidential information needs to be identified - inherent jurisdiction to prevent a lawyer from acting is extraordinary and should be used sparingly — importance of supervision and mentoring opportunities to the legal profession — error of principle to extend dicta relating to restraint of a solicitor possessing client confidential information to support restraint of solicitor allegedly possessing confidential information of a former co-worker
APPEAL — whether inherent jurisdiction to protect administration of justice supported restraint in this case
CIVIL PROCEDURE — Parties — where orders made against a non-party to motion — whether orders properly made — no application for costs order made — non-party entitled to have costs order set aside
Legislation Cited: Fair Work Act 2009 (Cth)
Supreme Court Act 1970 (NSW), s 101
Cases Cited: ALL IS 1 PTY LTD (t/as Banga Legal) v Townsend [2026] NSWSC 224
All is 1 Pty Ltd t/as Banga Legal v Townsend [2025] NSWSC 953
Cleveland Investments Global Ltd v Evans [2010] NSWSC 567
Coveney v Asbestos Injuries Compensation Fund Ltd [2024] NSWCA 317
Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641
Faccenda Chicken Ltd v Fowler [1987] Ch 117
Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher and Barnet (2015) 89 NSWLR 110; [2015] NSWCA 85
Frankland River Olive Company Ltd v Charters Securities Pty Ltd [2004] WASC 88
GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2023) 280 CLR 442; [2023] HCA 32
Grimwade v Meagher [1995] 1 VR 446
Hamzy v Commissioner of Corrective Services NSW (2022) 107 NSWLR 544; [2022] NSWCA 16
House v The King (1936) 55 CLR 499; [1936] HCA 40
In the matter of Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181
Li v Jin Lian Group Pty Ltd [2018] NSWSC 479
Malovini v Abdishou [2025] NSWSC 1157
Moore (a pseudonym) v The King (2024) 282 CLR 460; [2024] HCA 30
Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870
Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52
Porter v Dyer (2022) 402 ALR 659; [2022] FCAFC 116
R v Khazaal (2006) 167 A Crim R 565; [2006] NSWSC 1353
Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50
Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248
Tahmoor Coal Pty Ltd v Visser [2022] NSWCA 35
Técnicas Reunidas SA v Andrew [2018] NSWCA 192
Townsend v All is 1 Pty Ltd [2025] FedCFamC2G 1956
Texts Cited: Ian Neil, David Chin and Christopher Parkin, The Modern Contract of Employment (3rd ed, 2023, Lawbook Co)
Category: Principal judgment
Parties: Solve Legal Pty Ltd (Applicant)
All is 1 Pty Ltd t/as Banga Legal (First Respondent)
Samir Banga (Second Respondent)
Jessica Townsend (Third Respondent)
Representation: Counsel:
A Cheshire SC and F Maghami (Applicant)
D E Thomas (First and Second Respondent)
Submitting appearance (Third Respondent)
Solicitors:
Solve Legal Pty Ltd (Applicant)
Azadi Lawyers (First and Second Respondents)
Magna Carta Lawyers (Third Respondent)
File Number(s): 2025/00345099
Publication restriction: None.
[This headnote is not to be read as part of the judgment]
On 28 March 2025, Banga Legal and its principal solicitor Mr Banga (the first and second respondents) commenced proceedings in the Supreme Court against a former employee, Ms Townsend (the third respondent). It was alleged that Ms Townsend disclosed confidential information acquired during her role at Banga Legal and committed other acts of misconduct. Ms Townsend was initially represented by Solve Legal (the applicant) in those proceedings. Those proceedings, which are ongoing, seek to restrain Ms Townsend from disclosing allegedly confidential information.
On 11 July 2025, Banga Legal and Mr Banga filed a motion against Ms Townsend seeking to restrain Solve Legal from acting for Ms Townsend. The basis of restraint was that a former consultant of Banga Legal, Mr Shamsabad, who had for a time worked at Solve Legal and acted for Ms Townsend after leaving Banga Legal, had obtained “confidential information” about Mr Banga and his wife in the course of his engagement with Banga Legal and likely conveyed that “confidential information” to Solve Legal. Solve Legal was not a party to the motion.
On 15 August 2025, the motion came before McGrath J (the primary judge). On 21 August 2025, the primary judge made orders restraining Solve Legal from acting for Ms Townsend in the proceedings and ordering Solve Legal to pay the costs of the motion.
On 7 April 2026, this Court heard a concurrent application for leave to appeal and an appeal from the decision of the primary judge.
The Court (Payne JA, Kirk and Adamson JJA agreeing), in granting leave to appeal, setting aside the orders of the primary judge and in their place dismissing the notice of motion with costs, held:
The inherent jurisdiction of the court to restrain a lawyer from acting in a particular case is an extraordinary one. It is fundamental to our system of justice that, absent a compelling reason to the contrary, parties be able to choose their own lawyers. [33]-[35]
Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181; Grimwade v Meagher [1995] 1 VR 446; Frankland River Olive Company Ltd v Charters Securities Pty Ltd [2004] WASC 88; R v Khazaal (2006) 167 A Crim R 565; [2006] NSWSC 1353; Hamzy v Commissioner of Corrective Services NSW (2022) 107 NSWLR 544; [2022] NSWCA 16 applied.
Confidential Information:
The observations of the second respondent and his wife in a social setting cannot amount to confidential information. Discussions about “litigation strategy in the preparation and execution of legal matters” is confidential only in the sense that employees cannot lawfully use it during their employment for their own purposes or disclose it during that employment to a competitor of their employer. This category of allegedly “confidential information” rises no higher than subjective “know-how”. [36]-[37]
Faccenda Chicken Ltd v Fowler [1987] Ch 117; Ian Neil, David Chin and Christopher Parkin, The Modern Contract of Employment (3rd ed, 2023, Thomson Reuters) applied.
S****tandard of appellate review:
The question of whether to exercise the inherent jurisdiction of the court to prevent a lawyer from acting involves an evaluative judgment to which the correctness standard applies. [40]
GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2023) 280 CLR 442; [2023] HCA 32; Moore (a pseudonym) v The King (2024) 282 CLR 460; [2024] HCA 30 applied; House v The King (1936) 55 CLR 499; [1936] HCA 40 cited.
Orders against a party not joined**:**
It was an error of principle to make orders against Solve Legal without it having been joined to the motion. A person who is directly affected by the orders sought in a proceeding is a necessary party, and the obligation to join that person rests upon the plaintiff or applicant or person applying for those orders. [44]-[49]
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870; Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19; Tahmoor Coal Pty Ltd v Visser [2022] NSWCA 35; Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 applied.
Proper application of the inherent jurisdiction:
In cases where confidential information is said to be the basis of the restraint, there is a need for precise identification of that confidential information. [53]
Li v Jin Lian Group Pty Ltd [2018] NSWSC 479; Porter v Dyer (2022) 402 ALR 659; [2022] FCAFC 116; Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 at [38].
No confidential information had been identified with precision in this case.
The dicta of Stevenson J in In the matter of Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244 at [29] goes too far and should no longer be followed. The statements therein rely on previous authority that affirms the need to identify with specificity confidential information that could form the basis for restraint. In any event, that line of authority emerges from a context in which solicitor-client confidential information is at issue. The court’s jurisdiction to restrain lawyers should not be used as a substituted form of a restraint of trade of junior solicitors. [52], [54]-[56]
In the matter of Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244 at [29] disapproved; Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 considered; Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 considered.
PAYNE JA: On 7 April 2026, this Court heard, on a concurrent basis, an application for leave to appeal and an appeal from a decision of McGrath J: All is 1 Pty Ltd t/as Banga Legal v Townsend [2025] NSWSC 953. At the conclusion of the oral hearing the Court made the following orders:
Leave to appeal granted.
Appellant to file a Notice of Appeal in the form of the draft Notice of Appeal within 7 days.
Appeal allowed.
Set aside the orders of 21 August 2025 and in their place order:
(a) The plaintiffs’ Notice of Motion dated 11 July 2025 is dismissed. (b) The plaintiffs pay Ms Townsend’s costs of the Notice of Motion.
The First and Second Respondents pay the Appellant’s costs of the application for leave to appeal and the appeal.
Reasons reserved.
These are my reasons for joining in the making of those orders.
The appellant, Solve Legal Pty Ltd (“Solve Legal”), is an incorporated law firm. The first respondent, All is 1 Pty Ltd, is a law firm trading as Banga Legal (“Banga Legal”), and the second respondent, Mr Samir Banga, is the principal solicitor of that firm. The third respondent, Ms Jessica Townsend, is a former employee of Banga Legal.
Between about December 2021 and August 2022 a Mr Cameron Shamsabad was employed by Banga Legal as a consultant solicitor. The terms of the “Consultant Agreement”, signed by Mr Shamsabad on 3 January 2022, contained confidentiality provisions which included a restraint on the use of confidential information and on disclosure of that information that extended after the term of the contract concluded. The agreement provided that :
“[8] The ‘confidential information’ included, but was not limited to, ‘all intellectual property and business processes that you learn in Banga Legal’ (cl 1 on page 2) and ‘information contained in a document, or any software that is the property of the employer and which is by its nature confidential to us and/or our business and/or to any of our customers’ (cl 5(a) on page 4).”
On 8 August 2022, Mr Shamsabad commenced work as a solicitor at Solve Legal.
Between October 2022 and 29 January 2025, after Mr Shamsabad had left Banga Legal, Ms Townsend worked for Banga Legal, initially as a volunteer, then as a solicitor on contract until 5 December 2024, and then in a permanent position from 6 December 2024 until 29 January 2025.
In February 2023, Mr Banga assigned Ms Townsend to act for him in a “sensitive private matter” where she was responsible for briefing counsel and for court appearances. It is alleged that, in the course of acting for Mr Banga, Ms Townsend disclosed details of the matter to people she should not have, including to “current employees of Banga Legal”. Ms Townsend was dismissed by Banga Legal on 29 January 2025.
In about March 2024, Mr Shamsabad communicated to Solve Legal’s principal, Mr Kyle Kutasi, that he had been contacted by Ms Townsend who wanted to obtain employment law advice regarding her work with Banga Legal. About Mr Shamsabad acting for Ms Townsend, Mr Kutasi replied, “go for it”. Mr Shamsabad thereafter worked at Solve Legal as a solicitor for Ms Townsend.
Ms Townsend commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2) under the provisions of the Fair Work Act 2009 (Cth) where she challenges the circumstances of her termination from Banga Legal.
On 28 March 2025, Banga Legal and Mr Banga commenced proceedings by summons in the Supreme Court of New South Wales, Equity Division, against Ms Townsend. A statement of claim was filed on 21 May 2025. Banga Legal and Mr Banga allege that Ms Townsend disclosed to other members of staff confidential information about Mr Banga acquired in the course of her role at Banga Legal, and that she committed various other acts of misconduct. Banga Legal and Mr Banga seek to restrain Ms Townsend from disclosing confidential information in breach of alleged contractual and fiduciary duties owed to Banga Legal.
On 5 April 2025, Banga Legal and Mr Banga filed an amended summons in the Equity Division seeking relief including “orders restraining Ms Townsend from using or disclosing their confidential information, compelling its return and disclosure, suppressing certain information, and making declarations, awarding damages, and other relief.”
On 29 April 2025, the legal representatives for Banga Legal and Mr Banga sent an email requesting both Mr Shamsabad and Mr Kutasi immediately cease acting for Ms Townsend based on an alleged “conflict of interest”. Mr Kutasi, on the same date, sent a letter in response denying any conflict and stating they would continue to act for Ms Townsend. On 11 July 2025, Banga Legal and Mr Banga filed a motion against Ms Townsend to restrain Solve Legal from acting for Ms Townsend. Solve Legal was party neither to the motion, nor to the proceedings.
“(1) Directs the parties and legal representatives on or before 4pm on Thursday, 2 April 2026 to confer with a view to establishing a just quick and cheap means of resolving the disputes between them currently in this Court and in the Federal Circuit and Family Court of Australia (Division 2) (Division 2 Court) including establishing whether there is a single court which is able to address all the existing claims for relief having regard to the factual substratum of the disputes.
(2) Directs the parties by their legal representatives to provide a report to Meek J by email to his Associate on or before 4pm on 2 April 2026 as either an agreed plan to address Order 1 above or alternatives or options available to address the objectives of Order 1, such report to address:
(a) whether there is a single court available to address the entirety of the disputes
(b) whether the parties are prepared or not to litigate in such court; and
(c) what options are available to effect transfer of proceedings from either Division 2 or this Court to facilitate the objectives in Order 1 above.
(3) Orders subject to further order that these proceedings be temporarily stayed up to and including 16 April 2026 to enable the parties to undertake the work involved or associated with Orders 1 and 2 above.
(4) Stands the Plaintiff’s Notice of Motion filed on 23 January 2026 and the matter generally over to before Meek J on 16 April 2026 at 9am for further mention…”
The primary judge addressed the fact that Solve Legal was not joined as a party to the proceedings or the motion. His Honour stated: “[i]t is true that Solve Legal is not named as a party to motion”, and also that “[i]t is also the case that where the interests of third parties are affected by an application they should be made party to it, be given notice of it and be heard in respect of it.” His Honour went on, however, to conclude that: “in the present case, there is no injustice to Solve Legal because it was put on notice of the application, appeared at the hearing through their employed solicitor Mr Brozek, led evidence and made submissions opposing it.”
It is to be noted, at this stage, that Mr Brozek appeared at the hearing and led evidence and made submissions for Ms Townsend, and not for or on behalf of Solve Legal. In written submissions filed on behalf of Ms Townsend it was made clear that:
“[4] The motion must fail for the following reasons:
a) First, the motion is procedurally deficient. Notwithstanding the foregoing, the Plaintiffs would need to add Solve Legal as a party to the motion to obtain the order they seek. They have not done so.
…”
His Honour found it was “clear that while engaged as a contractor for Banga Legal, Mr Shamsabad acquired information about the personality, vulnerabilities and litigation strategies of Mr Banga” and that in addition “the social contact that Mr Shamsabad had with Mr Banga and his wife, Ms Gill, means that he also acquired information about her personality and vulnerabilities”.
His Honour determined the information acquired by Mr Shamsabad was confidential. The content of that allegedly confidential information was identified in an affidavit affirmed by Mr Banga on 28 July 2025:
“[12] My wife and I have entertained Mr Shamsabad and his wife at our home for dinner, drinks and to discuss family and other matters. Mr Shamsabad also attended my engagement party. Mr Shams[a]bad was able to observe me and my wife’s personalities including our vulnerableness and reaction[s] to certain matters.
[13] My wife has entertained Mr Shamsabad’s wife.
…
[18] In all matters in which I supervised Mr Shamsabad, especially litigation matters, I often discussed with him appropriate litigation strategy in the preparation and execution of legal matters. We discussed criminal matters and strategy. On one occasion, Mr Shamsabad convinced me that a client was high profile and we should cap his fees. He discussed strategy and essentially requested we obtain advice from counsel on a deferred payment basis. We had conversations about which subpoenas would be issued, which witnesse[s] would be used and defences in law. There were also discussions of potential legal points which would lead to other jurisdictions.
[19] Mr Shamsabad and I worked closely together and he is very much aware through this experience of how I deal with matters. I believe this gives Solve Legal a forensic advantage in these proceedings. I further note that I previously supervised Mr Shamsabad in his capacity as a legal practitioner. He sought my signature on a supervision certificate confirming full-time work despite not working full time. He tried to pressure me to sign, and thereafter created professional tension between us.”
His Honour concluded that, as there was no breach of confidence alleged, it was not necessary to determine whether all the elements in the requisite legal test for breach of confidence were satisfied. Instead, his Honour concluded that the consideration undertaken needed to be whether this was a case where the court would restrain its officers from acting in conflict when in possession of confidential information, which his Honour assumed the matters set out in the previous paragraph comprised.
His Honour found that, as an employee of Solve Legal, Mr Shamsabad had acted for Ms Townsend for a considerable period of time both in the provision of advice and during the proceedings. His Honour concluded that in the circumstances of the proceedings it was likely that both Mr Banga and his wife, Ms Gill, would be witnesses, and that it “appears to be self-evident that the confidential information is likely to have been of potential use by Mr Shamsabad for the benefit of Ms Townsend, giving her a forensic advantage in these proceedings”. His Honour considered it should be inferred that there was a serious risk that “confidential information” would have been used by Mr Shamsabad for the benefit of Ms Townsend while he was acting for her. His Honour went on to conclude that there was “an obvious conflict of interest”. In so concluding his Honour adverted to the fact that Mr Shamsabad also worked alongside Mr Kutasi (the principal of Solve Legal) on the matter. This led his Honour to conclude that the fact that Mr Shamsabad no longer worked for Solve Legal did not alleviate the conflict issue identified.
His Honour stated that he had given due weight to the fact Ms Townsend should not be deprived of her lawyer of choice and the inconvenience and impracticality of requiring them to cease to act.
His Honour’s dispositive reasoning was based on dicta of Stevenson J in In the matter of Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244 to which I will return. His Honour said, when considering the merits of the application:
“[36] … it is clear that while engaged as a contractor for Banga Legal, Mr Shamsabad acquired information about the personality, vulnerabilities and litigation strategies of Mr Banga. In addition, the social contact that Mr Shamsabad had with Mr Banga and his wife, Ms Gill, means that he also acquired information about her personality and vulnerabilities. Applying the reasoning in Edgecliff Car Rentals, I consider that the information acquired by Mr Shamsabad to be confidential to Mr Banga and Ms Gill. To the extent that the confidential information was about Mr Banga ... , it is likely that Mr Shamsabad was bound by the obligation of confidentiality he owed to Banga Legal not to use or disclose it.”
“[43] The real issue is the possession of confidential information by Mr Shamsabad. Having been in possession of the confidential information through its employee, Mr Shamsabad, it is too late to ‘unscramble the egg’ of what parts of the confidential information Mr Shamsabad did or did not impart to other members of Solve Legal (including Mr Kutasi) before he ceased working for it. This is a powerful factor in favour of restraining Solve Legal from acting for Ms Townsend in these proceedings, even though Mr Shamsabad no longer works there. The appearance of justice is important in these circumstances.
[44] In my opinion, a fair-minded, reasonably informed member of the public would conclude that, in these circumstances, the proper administration of justice, in the interests of protecting the integrity of the judicial process and due administration of justice, including the appearance of justice, requires that Solve Legal be prevented from acting for Ms Townsend.”
“(1) Solve Legal Pty Ltd, by its officers, employees and agents, be restrained from acting for the defendant in these proceedings.
(2) Solve Legal Pty Ltd, by its officers, employees and agents, be restrained from advising the defendant in relation to matters that are the subject of these proceedings.
(3) Solve Legal Pty Ltd is to pay the costs of the plaintiffs in relation to the notice of motion filed 11 July 2025.”
“1 The primary judge erred in finding that Mr Shamsabad had acquired information about the personality, vulnerabilities and litigation strategies of the Second Respondent that was confidential to the Second Respondent (or to the First Respondent or the Second Respondent’s wife).
2 The primary judge erred in finding that Mr Shamsabad had acquired information about the personality and vulnerabilities of the Second Respondent’s wife that was confidential to the Second Respondent’s wife (or to the First Respondent or the Second Respondent).
3 The primary judge erred in finding that Mr Shamsabad was bound by an obligation of confidence owed to the First Respondent in respect of any of the information relied upon by the Second Respondent.
4 The primary judge erred in finding that there was a serious risk that Mr Shamsabad would have used confidential information about the Second Respondent and his wife for the forensic benefit of the Third Respondent during the period when he was acting for her.
5 The primary judge erred in finding that there was an obvious conflict of interest in Mr Shamsabad acting for the Third Respondent and in the Appellant continuing to act for the Third Respondent.
6 The primary judge erred and reached a decision that was legally unreasonable in finding that a fair-minded reasonably informed member of the public would conclude that in all the circumstances the proper administration of justice in the interests of protecting the integrity of the judicial process and due administration of justice, including the appearance of justice, required that the Appellant be prevent[ed] from acting for the Third Respondent.
7 The primary judge erred in failing to find that:
a. the information relied upon by the First and Second Respondents was not:
i. identified with sufficient particularity and specificity;
ii. confidential as between the Appellant on the one hand and the First and Second Respondents on the other;
b. the First and Second Respondents had not established that there was a real risk that any confidential information would be relevant or sufficiently relevant to the proceedings between the First and Second Respondents on the one hand and the Third Respondent on the other;
c. there was no real risk of misuse of any confidential information.
8 The primary judge erred in failing adequately or at all to take into account that:
a. the jurisdiction is exceptional and to be exercised with caution;
b. due weight should be given to the public interest in a litigant not being deprived of his or her lawyer of choice;
c. the information relied upon by the First and Second Respondents was not identified with sufficient specificity and particularity;
d. the litigation on which Mr Shamsabad worked for the First Respondent concerned matters for clients of that firm rather than for the firm and the Second Respondent;
e. the information relied upon by the First and Second Respondents was obtained as part of the building up of Mr Shamsabad’s general skill, knowledge and experience as a lawyer through the supervision and assistance of the Second Respondent;
f. Ms Townsend had also worked for the First Respondent and had done so for longer than Mr Shamsabad;
g. Ms Townsend had worked on personal matters for the Second Respondent;
h. Mr Shamsabad no longer worked for the Appellant at the time of the hearing of the application.
9 The primary judge erred in failing to give the Appellant an opportunity and a reasonable opportunity to be heard on the issue of whether it should pay the costs of the First and Second Respondents.
10 The primary judge erred in ordering the Appellant to pay the costs of the First and Second Respondents when:
a. it had not been joined to the proceedings or the application;
b. it had not been given any or any reasonable opportunity to be heard;
c. the First and Second Respondents had not sought such an order;
d. no serious or other neglect, incompetence or misconduct on the part of the Appellant had been alleged by the First and Second Respondents or found;
e. it had not been alleged by the First and Second Respondents or found that any costs had been incurred improperly or without reasonable cause in circumstances for which the Appellant was responsible.”
As a non-party, Solve Legal requires leave to appeal: Fortress Credit Corp**oration *(*Australia) II Pty Ltd v Fletcher and Barnet (2015) 89 NSWLR 110; [2015] NSWCA 85; Coveney v Asbestos Injuries Compensation Fund Ltd [2024] NSWCA 317 at [11].
Orders, including orders as to costs, have been made affecting the legal interests of Solve Legal without it having been joined as a party to the motion. That matter, in and of itself, is a sufficient basis to grant leave to appeal.
In addition, there are important questions of principle raised by the application. It is appropriate that this Court should intervene to clarify the legal test and to emphasise the extraordinary nature of the jurisdiction. For these reasons, leave to appeal was granted.
It bears emphasis at the outset that the inherent jurisdiction to prevent a lawyer from acting for a client is an extraordinary one which should be used sparingly: see, for example, the comments of Brereton J in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 at [46], referring to Grimwade v Meagher [1995] 1 VR 446. This is because “[i]t is undoubtedly a serious step to deprive a party of counsel or solicitors of that party’s choice”: Fran**kland River Olive Company Ltd v Charters Securities Pty Ltd [2004] WASC 88 at [25]-[26].
It is fundamental to our system of justice that, absent a compelling reason to the contrary, parties be able to choose their own lawyers: R v Khazaal (2006) 167 A Crim R 565; [2006] NSWSC 1353 at [23]-[27]; Hamzy v Commissioner of Corrective Services NSW (2022) 107 NSWLR 544; [2022] NSWCA 16.
The principle of free choice of legal representative, however, is not unlimited. Both parties approached the cases on the basis that the test was correctly stated by Brereton J in Kallinicos v Hunt, being what a fair minded, reasonably informed member of the public would conclude as to what the proper administration of justice requires. That test has generally been followed, see Porter v Dyer (2022) 402 ALR 659; [2022] FCAFC 116; Técnicas Reunidas SA v Andrew [2018] NSWCA 192; Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641; Malovini v Abdishou [2025] NSWSC 1157; cf Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 at [39] (per Griffiths J).
A second matter which bears emphasis in the present case is that the allegedly confidential information possessed by Mr Shamsabad was information about the “personality, vulnerabilities and litigation strategies” of a supervising lawyer and the “personality and vulnerabilities” of the supervising lawyer’s wife. Both species of allegedly “confidential information” were obtained in an employment context as part of the ordinary exchange of information between a lawyer and a supervising lawyer. No client confidential information was involved. It is fundamental to the legal profession that more senior practitioners be involved in the legal training and mentoring, whether formally or informally, of junior lawyers. It would be antithetical to the continued existence of the legal profession if junior lawyers availing themselves of supervision or mentoring opportunities were thereby to be precluded from acting in cases involving a lawyer who has provided training or mentoring. What is particularly striking about the present case is the paucity of evidence about any information which could merit the description “confidential information”.
The standard of appellate review directs attention to the nature of the decision the subject of the appeal. In accordance with the reasoning of the High Court in GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2023) 280 CLR 442; [2023] HCA 32 at [16]-[23] and Moore (a pseudonym) v The King (2024) 282 CLR 460; [2024] HCA 30 at [15], the constrained standard in House v The King (1936) 55 CLR 499; [1936] HCA 40 only applies where there is a range of answers which can permissibly be provided, rather than one unique outcome, as to which the “correctness” standard applies. If the law only tolerates one outcome then the correctness standard applies, even if the answer to the question involves an evaluative process: GLJ at [17] (Kiefel CJ, Gageler and Jagot JJ). The present case involves an evaluative judgment to which the correctness standard applies.
For completeness, even if House v The King was the appropriate standard of review I would set aside the decision of the primary judge. As I will explain, it was an error of principle to extend dicta contained in Edgecliff Car Rentals, which related to the restraint of a solicitor in possession of confidential information of a client, to support the restraint of a solicitor allegedly in possession of confidential information belonging to a former co-worker.
Whether a restraint in such a circumstance can ever be justified need not be determined here. The extension of the restraint into an area where no court had yet ventured, without explaining why this extraordinary step was justified, was a further error of principle. If this exceptional jurisdiction is to be expanded in such a significant way, a clear and compelling explanation needs to be provided.
Finally, it was an error of principle to make orders against Solve Legal without the firm being joined to the motion.
As explained at [20], the appellant complained in written submissions to the primary judge that no application had been made to join it as a party to the motion and that, accordingly, the proceedings were improperly constituted. No application was made by the respondents to join the appellant. That matter was not addressed by the respondents or the primary judge during the oral submissions but, as I have explained, in his decision the primary judge found that no prejudice was occasioned to the appellant by its failure to be joined. I do not agree.
The principles applicable to the joinder of parties are well settled, although their application in particular cases may give rise to controversy. A person who is directly affected by the orders sought in a proceeding is a necessary party, and the obligation to join that person rests upon the plaintiff or applicant or person applying for those orders. Joinder, not notice, is the default position: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870; Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]; Tahmoor Coal Pty Ltd v Visser [2022] NSWCA 35. The test stated by Lord Diplock delivering the advice of the Judicial Committee of the Privy Council in Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 criticising the dichotomy between “legal” and “commercial” interests is this (at 56):
“A better way of expressing the test is: will [a non-party’s] rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?”
The joinder of a party directly affected by an order is not, at least not ordinarily, a matter of discretion. It is a matter of obligation upon the party seeking the order. That is why the High Court referred to the position of the non-party Walker Corporation in John Alexander’s Clubs at [153] as depending on “matters of right affecting non-parties which rest on general law principles of natural justice”.
The appellant was not a party to the proceedings or the motion below. A solicitor from the firm appeared for Ms Townsend (as was recorded by the primary judge in the judgment). The notice of motion was addressed to Ms Townsend alone and not to the appellant.
The legal rights of the appellant were directly affected by the orders made by the primary judge. This can most clearly be seen in relation to the order for costs. No third-party costs order was sought. Indeed, no application for any costs order against the appellant was ever made or even foreshadowed by the respondents. The appellant is entitled to have the costs order set aside as of right: John Alexander*’s Clubs* at [131], [136].
I incline to the view that the appellant is entitled to have all of the orders made by the primary judge set aside on the same basis but as the appellant was content to address the injunction granted on its merits, I will now address the merits of that order.
“[30] Stevenson J in Re Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244 cited with apparent approval at [25] the observations of Brooking JA (with whom Ormiston and Chernov JJA agreed) in Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 at [58] that confidential information may include ‘knowledge of such things as the personalities and reactions of participants’ and the observation of Harper M in Byrne v Production Magic Pty Ltd [2012] ACTSC 6 at [20] that confidential information may involve ‘the knowledge of the…vulnerabilities and strengths of the plaintiff [that] may be of use to those conducting the litigation’. Stevenson J then stated the following at [29]–[30]:
[29] Mr Emmett accepted that neither he, nor Eugene or Angela, could point to any particular information that Mr Brown might have about Eugene’s and Angela’s ‘litigious character and tendencies’ that Mr Brown could use to their disadvantage. However, Mr Emmett submitted, I think correctly, that this highlights, and is not an answer to, the problem. Eugene and Angela cannot know precisely what advantage Mr Brown might have, having observed them in their litigious context to which I have referred. Ward J (as her Honour then was) said (albeit in somewhat different circumstances) in Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 at [4] ‘that is the very forensic disadvantage on which [they rely] for this application’.
[30] I see this as a powerful factor favouring restraint of Mr Brown from further involvement in the proceedings.”
I would set aside the injunction granted by the primary judge for the following reasons.
First, and fundamentally, in this passage in Edgecliff Car Rentals Stevenson J was referring to the “confidential information” of clients, not the confidential information of solicitors who are members of the same firm. The jurisdiction to restrain a lawyer from acting for a party is not to be used as a substitute form of restraint of trade. There may, perhaps, be circumstances where the extraordinary jurisdiction to restrain a solicitor from acting is enlivened in relation to confidential information obtained about the practice of the law by another member of the same firm, but in such a case compelling reasons would need to be given. To reason by reference to a restraint based on the “confidential information” of a client, without more, was an error.
Secondly, in cases where confidential information is said to be the basis of the restraint, there is a need for precise identification of that confidential information: see, for example, Li v Jin Lian Group Pty Ltd [2018] NSWSC 479 at [10] (Gleeson JA) and the authorities cited therein; Porter v Dyer at [75]; Mumbin at [38]. In the present case, I respectfully disagree that much of the information relied upon by the primary judge, such as observations of Mr Banga and Ms Gill in a social setting, merited the description “confidential information”. Information concerning discussions about “appropriate litigation strategy in the preparation and execution of legal matters” including criminal matters is confidential only in the limited sense I have earlier explained. To invoke the extraordinary jurisdiction here engaged to protect against the use of such information is, in effect, to impose a significant restraint of trade on junior lawyers. Such a step should only be taken in a clear and compelling case. The present case is not close to such a case.
Thirdly, Stevenson J in the dicta at [29] of Edgecliff Car Rentals was referring to the “advantage [the solicitor] might have, having observed [the clients] in their litigious context to which I have referred” (emphasis added). That “litigious context” was that the solicitor had acted for the principals of the companies he was now seeking to act against on hundreds of occasions. That is, the solicitor had an intimate knowledge of the decisions made by the clients he was proposing to act against and how those clients behaved over a long period when faced with litigation challenges. Whilst, in that context, the outcome of Edgecliff Car Rentals may be correct, I am unable to agree with the statement of principle at [29] that the absence of knowledge of specific confidential information “is the very forensic disadvantage on which [they rely] for this application”. It is one thing to know that a solicitor has a great deal of client confidential information, but be unable to pinpoint what may be used, and another to fail to identify confidential information.
The orders as to costs of the motion before the primary judge and the proceedings in this Court follow the event.
For the foregoing reasons, I joined in the orders made on 7 April 2026.
KIRK JA: I agree with Payne JA.
ADAMSON JA: I agree with Payne JA.
**********
Coversheet; headnote: Added CLR reference to Moore (a pseudonym) v The King [2024] HCA 30, as the relevant volume has since been published. [12]: Deleted “was filed” from after “for Ms Townsend”; moved “against Ms Townsend” after “motion”; moved “party” to before “neither”. [22]: Replaced “disused” with “discussed”. [26]: Deleted “Legal” from “Mr Banga Legal”; replaced with ellipsis. [29]: Adjusted indents within quote. [37]: Deleted extra single quotation mark from “subjective knowledge”. [37]: Replaced “Thomson Reuters” with “Lawbook Co”. [45]: Deleted “that”. [55]: Added colon before “at [8]”.
Solve Legal Pty Ltd
All is 1 Pty Ltd
(2015) 89 NSWLR 110
(2023) 280 CLR 442
(2022) 107 NSWLR 544
(1936) 55 CLR 499
(2010) 241 CLR 1
(2005) 64 NSWLR 561
(2024) 98 ALJR 1119
(1996) 64 FCR 410
(2022) 402 ALR 659
(2014) 86 NSWLR 34
(2001) 4 VR 501
Leave to appeal granted; the Appellant was to file a Notice of Appeal in the form of the draft within 7 days; appeal allowed; the orders of 21 August 2025 set aside and replaced by dismissal of the plaintiffs’ Notice of Motion, with the plaintiffs to pay Ms Townsend’s motion costs and the First and Second Respondents to pay the Appellant’s costs of the leave application and appeal.
On 12 July 2025, Mr Shamsabad resigned from Solve Legal. He commenced a period of parental leave before joining the New South Wales Bar. He no longer acts for Ms Townsend.
On 15 August 2025, the motion came before McGrath J in the Applications List.
The basis of the application was that Mr Shamsabad, a former consultant of Banga Legal, worked at Solve Legal for a period of time after leaving Banga Legal. It was submitted that Mr Shamsabad had obtained “confidential information” about Mr Banga and his wife in the course of his engagement with Banga Legal. Consequently, so the argument went, Mr Shamsabad likely conveyed that confidential information to Solve Legal before he left that firm. Accordingly, Solve Legal should be restrained from continuing to act for Ms Townsend, despite the fact that Mr Shamsabad no longer worked there. His Honour made such orders and published reasons on 21 August 2025.
On 15 September 2025, Banga Legal and Mr Banga filed an interlocutory application seeking to restrain Solve Legal from acting for Ms Townsend in the Fair Work Act proceedings. On 27 November 2025, Judge McCabe, who was referred to the primary judge’s orders and reasons, made orders dismissing that application: Townsend v All is 1 Pty Ltd [2025] FedCFamC2G 1956.
On 13 March 2026, the matter came before Meek J in the Equity Division: ALL IS 1 PTY LTD (t/as Banga Legal) v Townsend [2026] NSWSC 224. Meek J there stated that there was a “more fundamental question which arises regarding the parties’ disparate claims, which, in my estimation, ought to be addressed prior to pleading or other case management questions”: at [3]. The orders of the court were as follows:
The allegedly “confidential information” is set out at [22] above. The observations made by Mr Shamsabad of Mr Banga and his wife in a social setting cannot possibly amount to “confidential information”. It does not warrant protection by an order made in the extraordinary jurisdiction which is invoked. The other allegedly “confidential information”, being essentially discussions about “appropriate litigation strategy in the preparation and execution of legal matters”, including criminal matters, is confidential only in the sense that employees cannot lawfully use it during their employment for their own purposes or disclose it during that employment to a competitor of their employer. This is often called “know-how”, or sometimes “subjective knowledge”: see Ian Neil, David Chin and Christopher Parkin, The Modern Contract of Employment (3rd ed, 2023, Lawbook Co) at [8.033]. This category of allegedly “confidential information” rises no higher than subjective “know-how” relating to information that “once learned necessarily remains in the servant’s head and becomes part of his own skill and knowledge applied in the course of his master’s business”: Faccenda Chicken Ltd v Fowler [1987] Ch 117 at 133; Neil, Chin and Parkin at [8.036]. To invoke the extraordinary jurisdiction here engaged to protect against the use of such information is, in effect, to impose a significant restraint of trade on junior lawyers. This would be a deeply troubling outcome that I would strive to avoid.
Finally, the notion underpinning the primary judge’s order that understanding a lawyer’s “appropriate litigation strategy in the preparation and execution of legal matters” necessarily tells a person anything useful about how the lawyer will react as a client cannot be accepted.
Having sketched this background, I turn to the substance of the appeal.
Edgecliff Car Rentals loosely attributes the proposition that the absence of knowledge of specific confidential information “is the very forensic disadvantage on which [they rely] for this application” to what Ward J said in Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 at [4]. In context, however, Cleveland Investments does not support the proposition that precise identification of relevant confidential information is not required. Her Honour commences at [4] with the following: “In the case of a restraint for the purpose of protection against breach of confidence, the confidential information must be identified” (emphasis added). This is not a promising basis for treating Cleveland Investments as authority for the contrary proposition for which it is cited in Edgecliff Car Rentals. Further, Cleveland Investments was a case where a solicitor had sought to change sides in litigation on the same claim in the same proceedings. Her Honour concluded, unsurprisingly, that this was “something very subversive of the appearance to a reasonable and fair-minded observer that justice is being done”: at [8].
The primary judge also cited Stevenson J’s apparent approval in Edgecliff Car Rentals of the observations of Brooking JA (Ormiston and Chernov JJA agreeing) in Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 at [58] that confidential information may include “knowledge of such things as the personalities and reactions of the participants”. However, in Spincode, lawyers were restrained from acting against a company for whom they had acted on many matters over about a five-year period, and who plainly held confidential information material to the relevant proceeding.
Finally, neither party could point to a case like the present where it was the allegedly confidential information of a fellow solicitor which was the foundation of a restraint which had been imposed. This is for good reason. The extraordinary jurisdiction here engaged should not be used, absent a compelling reason, to protect against the use of information about senior lawyers gained by junior lawyers as part of the ordinary processes of professional legal training and development. To do so is, in effect, to impose a significant restraint of trade on junior lawyers.
The primary judge’s conclusion as to what the relevant member of the public “would” conclude cannot be justified and must be set aside.