Brennan v McGuire [2008] ACTSC 119 (7 November 2008)

Last Updated: 11 November 2008

ROBERT GEORGE BRENNAN v GLENYS FREYA MCGUIRE

[2008] ACTSC 119 (7 November 2008)

SOLICITORS – conversation between defendant and solicitor before action – no retainer – solicitor later instructed by plaintiff – whether conflict of duty – whether solicitor in possession of confidential information material to proceedings – domestic relationships proceedings – no conflict established – application to disqualify solicitor dismissed

Domestic Relationships Act 1994

Legal Profession (Solicitors) Rules 2007, rr 2, 3

Lawyers’ Professional Responsibility by Professor GE Dal Pont, Thomson Lawbook Co., 3rd edition, 2006, ch 8

Carindale Country Club Estate Pty Ltd v Astill [1993] FCA 218; (1993) 42 FCR 307

D & J Constructions Pty Ltd v Head (t/as Clayton Utz) (1987) 9 NSWLR 118

In the Marriage of Magro (1989) 93 FLR 365

Rigg v Sheridan [2008] NSWCA 79

No. SC 790 of 2007

Judge: Master Harper

Supreme Court of the ACT

Date: 7 November 2008

IN THE SUPREME COURT OF THE )

) No. SC 790 of 2007

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ROBERT GEORGE BRENNAN

Plaintiff

AND: GLENYS FREYA MCGUIRE

Defendant

ORDER

Judge: Master Harper

Date: 7 November 2008

Place: Canberra

THE COURT ORDERS THAT:

The defendant’s application of 28 October 2008 be dismissed.

1. This is an application by the defendant for an order restraining the plaintiff’s solicitor form continuing to act for the plaintiff.

2. The application is based on a telephone conversation between the defendant and the solicitor, Mr RTJ Friesen, a partner in the firm Watts McCray McGuinness Eley Lawyers.

3. The substantive proceedings were instituted by Mr Friesen on behalf of the plaintiff on 12 November 2007, seeking an adjustment of interests in property under the Domestic Relationships Act 1994. It is asserted in the statement of claim that the plaintiff and defendant lived together in a domestic relationship as defined in that Act from July 1981 until 6 December 2006.

4. The defendant’s evidence about the conversation is set out in her affidavit in support of the present application as follows:

. . .

2. On 2 February 2007, Mr Friesen was briefed by me on the matter the subject of the Proceedings, and in particular the assets which are the subject of the property settlement in the Proceedings, with a view to retaining him to act for me.

3. I decided subsequently not to retain Mr Friesen.

5. In a letter to the ACT Law Society complaining about Mr Friesen’s professional behaviour in August 2008, the defendant said that she had been recommended by Mr JA Buxton of Dibbs Abbott Stillman to Mr Friesen. She telephoned Mr Friesen, who was unavailable but returned her call within an hour. She said that the telephone conversation lasted about twenty minutes, and that she provided him with “the details of my matter”. At the conclusion of the call, Mr Friesen invited her “to make an appointment to progress the matter”. She later decided not to engage his services. On 31 August 2007, Mr Friesen advised her that he had been retained by the present plaintiff and instructed to commence proceedings.
6. The defendant was served with the originating claim in December 2007, and delivered a defence in January 2008 through Michael Conley Lawyers, a Sydney firm of solicitors. Both parties filed financial statements during March. The defendant filed a notice during June 2008 that she was now acting in person. On 8 October 2008 she filed an application for further and better particulars, and on 28 October 2008 she filed the present application.
7. On 17 February 2008, the defendant, although she had solicitors on the record by that date, wrote to Mr Friesen. Her letter included the following:

By way of introduction you will recall our phone call early in 2007, on recommendation from a friend, John Buxton, in which I briefed you with a view to retaining you to act on my behalf in my ACT Domestic Relationships Matter with Rob Brennan.

I note that since that time, you have taken instructions to act for Rob Brennan in this matter and that you have failed to disqualify yourself from doing so on the grounds of a perceived or actual conflict of interest. I reserve my right to further explore this failure in due course.

8. The letter went on to deal with other matters.
9. Mr Friesen has no recollection of the telephone conversation in February 2007, or indeed of any telephone conversation or other contact with the defendant before the commencement of the proceedings. His evidence is that he receives numerous referrals from Mr Buxton. He was employed by Mr Buxton’s firm before moving to his present firm. He says that his firm keeps a record of telephone calls received. The receptionist records the name of the caller, time of call and initials of the person being called. He has annexed to his affidavit a copy of a sheet for early February 2007, on which is recorded a call at 11.30 am from “Glen McGrath” and the telephone number 6295 9630. The initials RF are also recorded. The date is not entirely clear but may well have been Friday 2 February. The telephone number corresponds with a fax number on the defendant’s letterhead, and Mr Friesen accepts that the call was from the defendant, whose name is Glenys McGuire. He accepts that he returned the call and had a conversation with the defendant, either on 2 February or 5 February 2007. This had not triggered any actual memory on his part of the call.
10. Mr Friesen said that he had a standard procedure for dealing with calls from people enquiring about the possibility of retaining the firm. He said that he did not take file notes of such conversations and had no record of how long any particular conversation lasted. His usual practice was to limit the call to “a brief chat to ascertain the nature of the matter, ascertain how they were referred to me and Watts McCray and advise them of our initial conference and chargeout rates”. He said that the information he sought and received over the telephone was general and non-specific. He avoided specifics, his purpose being to promote the firm’s discounted initial conference, and to encourage the caller to come to the office for a proper consultation. In the circumstances Mr Friesen could confidently say that he did not seek or obtain any crucial or confidential information from the defendant as to the circumstances of her case. In the unlikely event that he was given any information outside those usual limits, he had no recollection of it and made no record of it.
11. When he first spoke to the plaintiff in August 2007, he heard nothing which caused him to realise that he had previously had an enquiry from the defendant.
12. The defendant attached to her affidavit a copy of a page from her diary for 2 February 2007 which, she said, was in the nature of a note of the contents of her conversation on that day with Mr Friesen. The page is not easy to read, but I accept that the notes were made on the date in question. There is a reference to what appears to be an internet website address, then the name and address of a firm of solicitors at Campbelltown, and another reference to something which seems quite unrelated to the dispute with the plaintiff. There is a note that the defendant phoned Mr Friesen at 11.30 am and that he returned the call at 1.30 pm. The defendant in her affidavit did not go through the notes in detail, and I cannot be satisfied that they were a contemporaneous note of the contents of the conversation. They may have been matters which the defendant intended to take up with Mr Friesen, or another solicitor depending upon whom she decided to instruct. I accept that they were probably made on the same date as the telephone conversation, but I cannot be satisfied that they set out what was actually discussed during the conversation. To be fair, the notes do not purport to be and were clearly not intended to be a contemporaneous record of a conversation, made in case it might be necessary in the future to establish precisely what had been said. On the contrary, they were notes made for her own purposes by a lay person involved in a domestic relationships dispute and in the course of identifying and selecting a solicitor to whom she could turn for advice about her predicament.
13. All of the evidence on the present application is on affidavit. Neither the defendant nor Mr Friesen was cross-examined. I find that more probably than not the defendant, having been recommended to Mr Friesen by Mr Buxton, telephoned him on the morning of 2 February 2007, and that Mr Friesen returned the call later on the same day. I accept that a conversation took place between the defendant and Mr Friesen, in which she outlined the position in which she found herself, and he recommended that she make an appointment to come and see him and give instructions to his firm.
14. I am not satisfied that the defendant gave any information to Mr Friesen which, by the time he was instructed by the plaintiff, would have been capable of being used to the defendant’s detriment.
15. The defendant’s argument is put on the basis that Mr Friesen has a conflict arising from the fact that she imparted to him information of a confidential nature during their telephone conversation. Such a conflict is often described as a conflict of interest but is in reality more in the nature of a conflict of duty, the conflict being between the duty owed by a solicitor to his client, and his duty to protect the confidentiality of information given to him by a previous client. The concept of a conflict of interest arises where the solicitor personally has an interest which conflicts with the interest of a client or former client. The only interest the solicitor in the present case might be argued to have is an interest arising from the fact that he will earn remuneration for professional work done if he continues to represent the plaintiff. It does not seem to me that that is relevantly an interest in conflict with the interests of the defendant, or with any duty owed by the solicitor to the defendant.
16. There is no question that a court has jurisdiction to disqualify a lawyer from acting against a former client, where it is necessary to do so in order to preserve the solicitor’s duty of confidentially. The applicable principles are set out in Chapter 8 of Lawyers’ Professional Responsibility by Professor GE Dal Pont, Thomson Lawbook Co., 3rd edition, 2006. The factors to be taken into account by a court on an application to disqualify include the interest of the former client in preserving confidentiality; the interest of the general public in the appearance of propriety and in public confidence in the legal system; the current client’s interest in choice of legal representative; and the current client’s interest in speedy and efficient dispute resolution. The main enquiry by a court on such an application should focus on the need to preserve the confidentiality of information communicated in the course of a retainer. A leading statement in this regard is that of Drummond J in Carindale Country Club Estate Pty Ltd v Astill [1993] FCA 218; (1993) 42 FCR 307 at 312:

A solicitor is liable to be restrained from acting for a new client against a former client if a reasonable observer, aware of the relevant facts, would think that there was a real, as opposed to a theoretical, possibility that confidential information given to the solicitor by the former client might be used by the solicitor to advance the interests of a new client to the detriment of the old client.

17. It is hence accepted that a lawyer possessed of relevant confidential information cannot act against a former client.

18. The Legal Profession (Solicitors) Rules 2007 provide in rules 2 and 3 as follows:

2. Confidentiality

2.1 A practitioner must not, during, or after termination of, a retainer, disclose to any person who is not a partner or employee of the practitioner's firm, any information which is confidential to a client of the practitioner and acquired by the practitioner during the currency of the retainer, unless:

(a) the client authorises disclosure;

(b) the practitioner is permitted or compelled by law to disclose;

(c) the practitioner discloses information in circumstances in which the law would probably compel its disclosure, despite a client's claim of legal professional privilege, and for the sole purpose of avoiding the probable commission or concealment of a felony; or

(d) necessary for replying to or defending any charge or complaint as to conduct or professional behaviour brought against the practitioner or his or her partners, associates or employees or to respond to a requirement under sub-Rule 41.2.

2.2 A practitioner's obligation to maintain the confidentiality of a client's affairs is not limited to information which might be protected by legal professional privilege, and is a duty inherent in the fiduciary relationship between the practitioner and client.

3. Acting Against a Former Client

Consistent with the duty which a practitioner has to preserve the confidentiality of a client's affairs, a practitioner must not accept a retainer to act for another person in any action or proceedings against, or in opposition to, the interest of a person:

(a) for whom the practitioner or the firm, of which the practitioner was a partner, has acted previously; and

(b) from whom the practitioner or the practitioner's firm has thereby acquired information confidential to that person and material to the action or proceedings; and

that person might reasonably conclude that there is a real possibility the information will be used to the person's detriment.

19. Some decisions of Australian courts have suggested that the successive client conflict rules apply more strictly in the case of family law litigation. As Bryson J observed in D & J Constructions Pty Ltd v Head (t/as Clayton Utz) (1987) 9 NSWLR 118 at 123:

It seems natural that a particularly careful view would be taken in family law business, as such litigation tends to be about highly confidential facts, and a very wide range of facts and circumstances can conceivably be relevant; the sensitivity which even the most reasonable people feel about such litigation, when they are engaged in it, calls for careful measures to secure not only that justice is done, but also that it is apparent that it is done, an appearance which would not survive any general impression that lawyers can readily change sides.

20. In the Marriage of Magro (1989) 93 FLR 365, a case involving contested property proceedings, the wife sought to restrain the husband’s solicitor from acting, on the ground that she had previously retained a lawyer now employed by the firm representing the husband. The wife was unable to prove any breach of confidence, nor was she able to satisfy the Court that any particular confidence imparted to the solicitor endangered her forensically in the proceedings. Nevertheless, Rourke J was prepared to infer that the solicitor, by reason of his retainer over a period of seven months, had come into possession of at least some confidential material belonging to the wife which might be able to be put to use by the husband. Rourke J restrained the husband’s solicitor from continuing to act.
21. Counsel for the plaintiff drew my attention to the decision of the NSW Court of Appeal in Rigg v Sheridan [2008] NSWCA 79, a recent decision which dealt with the principles governing breach of fiduciary duty arising from a dispute within an extended family. The facts in that case were a little removed from those in the present proceedings but the basic principles remain applicable.
22. In the present case, I am satisfied that a point was not reached where a solicitor-client retainer arose between the defendant and the solicitor. That is not necessarily the end of the matter. If a person who is considering giving instructions to a solicitor discloses to the solicitor confidential information in the course of a preliminary discussion which does not culminate in a retainer, but in circumstances where it would be unfair, having regard to the solicitor’s knowledge of the confidential information, for the solicitor to act for an opposing party in the litigation, it seems to me that the Court should intervene to restrain the solicitor from acting for the opposing party, regardless of the fact that no formal retainer had previously come into being. For the purposes of the present application, the question is whether that point was reached.
23. The defendant has not given detailed evidence of precisely what information she provided to the solicitor during the telephone conversation of 2 February 2007. I do not say that in any sense critically of the defendant: I would not expect her to have a precise recollection of what she told the solicitor in a conversation eighteen months ago, and indeed I might be somewhat suspicious of a person who purported to remember in detail such a conversation in the absence of a full contemporaneous note.
24. I accept the solicitor’s assurance on oath that he has no recollection of the conversation, let alone of anything the defendant may have told him in the course of it.
25. The nature of the proceedings is such that both parties are required to be frank with the Court as to their assets and liabilities and other details of their financial circumstances, and as to the history of their relationship. I assume for the purposes of the application that both parties have done so honestly and to the best of their recollection, in the financial statements and other affidavit material before the Court.
26. I am not satisfied that the defendant disclosed to the solicitor in the conversation of 2 February 2007 anything which she has not subsequently been required to disclose, and has not disclosed, to the Court.
27. Indeed, it seems to me more likely than not that anything relevant to the proceedings which she told the solicitor about in the telephone conversation has since then been disclosed by her to the Court, and to the plaintiff, in the financial statement and the affidavit material.
28. Accordingly, it seems to me that there has been no practical disadvantage and that there will not be any practical disadvantage to her in the solicitor acting and continuing to act for the plaintiff.
29. In all of the circumstances, I am of the view that there will be no detriment to public confidence in the legal system in permitting the solicitor to continue acting for the plaintiff.
30. I can well understand the defendant’s subjective reaction to her becoming aware that the solicitor with whom she had had a telephone conversation some months earlier had been instructed by the plaintiff and would be acting for the plaintiff in these proceedings. It is entirely understandable that in the circumstances the defendant made the present application. It would be very difficult to characterise the application, in all of the circumstances, as an unreasonable one. That is in no way the fault of the plaintiff. There is no suggestion that he was aware, or should have been aware, of the fact that the defendant had previously been in contact with the solicitor he later instructed. Nor am I in any way critical of the solicitor, who, I accept, followed his firm’s usual practice in response to a telephone enquiry which might or might not have led to an instruction to act, and which in this case did not.
31. Nevertheless, a solicitor who adopts a practice of not keeping a record of telephone enquiries, conversations and discussions of that kind exposes himself to the risk that an application along the lines of the present one may be made.
32. For those reasons, the application must fail and will be dismissed, but I am not minded to make an order for the costs of the application against the defendant. I refrain from expressing any opinion as to whether or not the plaintiff should be expected to meet his solicitor’s costs and disbursements of the application. That will be a matter for determination, if necessary, in quantifying the costs and disbursements recoverable by the plaintiff’s solicitors from the plaintiff at the conclusion of the matter, as between solicitor and client.
33. My provisional view is that there should be no order as to the costs of the application. I shall give the parties an opportunity to be heard on that issue if they wish to be heard, before making a final decision about it.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 7 November 2008

Counsel for the plaintiff: Mr SH Pilkinton

Solicitors for the plaintiff: Watts McCray McGuinness Eley Lawyers

Defendant: In person

Date of hearing: 31 October 2008

Date of judgment: 7 November 2008