No.
7588
of
2000
- Application by the defendant to restrain the plaintiff from
continuing to retain as her solicitors Messrs Leo Dimos & Associates
(Dimos).
- The defendant, John Ioannis Apostolidis (who I will refer to as
the defendant or John), has never retained Dimos to act for him.
- The defendant has a brother, Kiriakos (Ken) Apostolidis (who I
will refer to as Ken). Dimos acted for Ken as plaintiff in a Commercial
List
proceeding 2101 of 2001. I shall refer to this as the partnership proceeding.
The present defendant (John) was the defendant
in the partnership proceeding.
The partnership proceeding was compromised by a Deed made on 12 May
2003.
The proceeding
- The present proceeding was commenced as long ago as 13 November
2000. The plaintiff, Zorica Kalenic, claimed in the statement of
claim
endorsed on the writ that from in or about May 1993 until on or about 11 March
2000 she and the defendant had lived together
in a de facto relationship within
the meaning of Part IX of the Property Law Act 1958 (the Act) and sought
orders under that Part adjusting in her favour the interest of the defendant in
his property.
- The plaintiff filed a second further amended statement of claim
on 14 January 2004. The statement of claim refers to property of
the parties,
and in particular to certain property and corporations in which the defendant
is alleged to have an interest. The corporations
are DSK Holdings Pty Ltd (DSK
Holdings), Azura Pty Ltd (Azura) and Yarrabee Investments Pty Ltd (Yarrabee),
each of which is alleged
to have been owned or controlled by the defendant. It
is alleged that DSK Holdings conducted furniture businesses known as Janni's
Furniture and Bedding, and Central Furniture, at Oakleigh. There is reference
to a furniture business conducted by DSK Holdings
at Dandenong called Leather
Lounges Direct. There is also reference to the defendant having acquired an
interest in Imex Nominees
Pty Ltd (Imex), and an interest in a furniture
business and/or factory in Malaysia. It is alleged that during the
relationship the
plaintiff made financial and non-financial contributions to
the acquisition, conservation and improvement of the defendant's property
including the furniture businesses and to the financial resources of the
defendant and the corporations owned and controlled by him
including the
furniture businesses operated by him or on his behalf by DSK Holdings, Imex and
Yarrabee, and land holdings owned and
managed by him or on his behalf by Azura
and DSK Holdings. Particulars of the contributions are included in the
pleading. They
refer to advances of money, to work as a homemaker, and to
assisting the defendant in his business activities, including working
in the
businesses. In summary, the plaintiff seeks relief to the effect that the
parties hold their respective interests in the
property in equal shares or
otherwise as the Court deems appropriate.
- In a defence filed in March 2004 it is alleged that although
the parties were in "a relationship of a boyfriend and a girlfriend"
they were
not in a de facto relationship within the meaning of the Act. Then, while
admitting to owning the majority of the shares
in DSK Holdings, to owning
shares in Azura, to owning all the shares in Yarrabee, and to having acquired
property during the time
that the plaintiff resided with the defendant, the
defence essentially denied the plaintiff's alleged contributions. It alleged,
in the alternative, that any contributions she made were more than compensated
for by contributions of the defendant to the plaintiff.
The defence concludes
with a counterclaim that the plaintiff remove a caveat lodged on certain
property of the defendant.
- On 19 February 2004 the plaintiff's then solicitors filed and
served a notice that they had ceased to act for her in the proceeding.
On the
same day the defendant's then solicitors received a letter from Dimos advising
that that firm was instructed by the plaintiff
to take over the conduct of the
case on her behalf. Dimos has acted for the plaintiff since then.
- In June 2004 the defendant instructed David Tonkin &
Associates (Tonkin) to act for him in the proceeding.
- On 19 August 2004 Tonkin filed the present summons to restrain
Dimos from acting.
The application
- The defendant did not swear an affidavit in support of the
application. The only affidavit in support is that of the defendant's
solicitor David Keith Tonkin. The significance of the defendant not having
sworn an affidavit is that in deposing as to the defendant's
views and
instructions, and as to past matters, Tonkin's affidavit is hearsay. It also
meant that the defendant could not be cross-examined
as to the merits of the
application.
- Tonkin states that on learning of Dimos' retainer the
defendant was unhappy because Dimos had acted for his brother Ken in the
partnership
proceeding. Tonkin acted for the defendant in that proceeding,
which he described as "an acrimonious action". Tonkin stated that
the
defendant was concerned that the plaintiff (Zorica) had formed an alliance, or
at least a friendship, with Ken. In the partnership
proceeding Zorica had
provided a witness statement to be used in Ken's case.
- The defendants to the partnership proceeding were John, DSK
Holdings, Azura and Yarrabee. The statement of claim in the partnership
proceeding was an exhibit to Tonkin's affidavit. It alleged that in or about
1990 Ken and John agreed to form an equal partnership
to conduct trading
ventures. In performance of the partnership agreement, among other things, the
parties traded under the name
Janni's Furniture and Bedding, Central Furniture,
and Leather Importers and Manufacturers; John incorporated DSK Holdings to
which
the business of Janni's Furniture and Bedding was transferred and
thereafter DSK Holdings conducted that and the other businesses;
John
incorporated Azura for the purpose of purchasing land from which the business
could be conducted, and Azura acquired land;
and John set up a manufacturing
plant in Malaysia using assets of DSK Holdings. Imex is also referred to.
However, in breach of
the agreement and his obligations as a partner, John
established the corporations and businesses on an unequal basis, to the
disadvantage
of Ken. The relief claimed included the following: damages;
declarations which included that Ken was entitled to one half of the
shares in
DSK Holdings and Azura, that Azura held property on trust for Ken and John
equally, that Yarrabee held its business on
trust for Ken and John equally, and
that Ken was entitled to one half of the equity in the Malaysian plant;
equitable compensation;
accounts and inquiries. Noting the defendants in
Ken's claim and that the claim referred to an interest in a factory in Malaysia
and in Imex and Janni's Furniture and Bedding, being entities the subject of
Zorica's claim, Tonkin stated that:
"Accordingly, the way in which John and others conducted his
business through the above entities for the period 1993 to 2000 is a
matter
which was an important issue in Ken's proceeding and is also an important issue
in the present proceeding."
- I interpolate that Tonkin did not exhibit the defence or any
other document filed in the partnership proceeding. As a result, I
do not know
what was admitted by the defendant or was otherwise in issue on the pleadings
in the partnership proceeding, or what
may be ascertained from other documents
on the court file.
- The partnership proceeding was compromised by a Deed made on
12 May 2003. The deed is a confidential exhibit to Tonkin's affidavit.
In
recitals to the Deed it is stated that the defendants had denied liability,
that the proceeding had been listed for the hearing
of a preliminary issue
commencing on 8 May 2003 on an estimate of five days, and that the parties had
decided to settle Ken's claim.
The terms of the settlement are set out in the
Deed. Clause 7 is a confidentiality clause; it provided as
follows:
"7. The parties agree to keep the following matters confidential to:
(a) The parties;
(b) To Ken's wife, Anna Apostolidis, and John's
partner, Amanda Simpson, upon
each of them undertaking to observe clause 7 of this deed;
(c) Their professional advisers,
save
to the extent that their disclosure is required by law:
(i) The contents of this deed;
(ii) ...
(iii) Any matter discussed during the mediation and settlement discussions;
(iv) Any matter the subject of or referred to in the pleadings, any witness
statement or any other document filed or served in the
proceeding."
I have omitted sub-cl (ii) in accordance with the request of counsel for
the defendant as it reflects the nature of the settlement.
- The execution of the Deed by Ken and the defendants was
witnessed as follows. The witness to Ken's signature was a solicitor, Ian
George Hone, who is employed by Dimos and who has the conduct of Zorica's
proceeding. Tonkin witnessed the signature of the defendant.
- On 31 March 2004 the defendant's then solicitors wrote to
Dimos stating that cl 7 of the deed caused Dimos to have a conflict
of
interest such that it could not act for the plaintiff, and requesting an
assurance that Dimos would cease to act failing which
an injunction would be
sought to restrain the firm from acting.
- Dimos replied by facsimile on 5 April 2004. The firm did not
intend to cease to act for the plaintiff. There was no reason why
the firm
should desist from acting simply by reason of cl 7. The letter further
stated that the firm had not, and would not,
inform the plaintiff of any
matters which the Deed required Ken to keep confidential.
- Tonkin concluded his affidavit with the following
assertions:
(a) In acting for Ken, Dimos must have acquired "knowledge of
matters that were clearly relevant to the [proceeding as to the defendant's]
involvement in and the general conduct of the businesses ... between 1990 and
2000".
(b) In acting for Zorica, Dimos would be obliged to use "such knowledge" to
assist her. Yet they were obligated not to do so by
reason of having acted for
Ken in the partnership proceeding and cl 7 of the Deed.
(c) In the circumstances there was a real possibility that the interest of
Dimos in advancing the plaintiff's case would conflict
with their duty to keep
"that information" confidential, and to refrain from using it to the
defendant's detriment.
Affidavits in opposition
- Affidavits in opposition to the application were sworn by Hone
and the plaintiff. I summarise their evidence commencing with
Hone.
- Hone said that the Deed had not been disclosed to the
plaintiff, indeed the copy obtained in Ken's proceeding has been treated as
confidential and not inspected by himself or any member of staff at Dimos or
the plaintiff's counsel. He and the firm were aware
of their obligations to
hold confidential any information acquired in acting for Ken and which the firm
was required to hold confidential.
He was not aware of any such information he
possessed and which might be of assistance to the plaintiff in this proceeding.
He further
stated that he was not employed by Dimos at the time of the
mediation (presumably being the mediation referred to in cl 7 of
the Deed)
in the partnership proceeding and save for the outcome was not aware in any
detail of what transpired during it, adding
that the person who had conducted
the mediation on behalf of Dimos was no longer employed by the firm. In
particular, he was not
aware of any confidential matter relating to the
defendant's involvement in and the general conduct of the business referred to
in
Tonkin's affidavit. He was not aware of any information which he or Dimos
acquired in the course of acting for Ken which was not
already known to the
plaintiff from sources other than himself or Dimos. Further, the plaintiff had
given Dimos a written release
from any obligation it might otherwise have to
disclose to her or use for her benefit any information gleaned in the course of
the
partnership proceeding and which the firm was obliged not to
use.
- Hone said that at 25 March 2004 the professional costs and
disbursements incurred by Dimos while acting for the plaintiff in the
present
proceeding were approximately $14,000, although that did not include
substantial time spent by the principal of the firm.
Since then significant
further costs had been incurred, the costs having built up while the defendant
delayed in commencing the
present application.
- I now refer to the plaintiff's affidavit. Dimos was her
solicitor of choice. She wished Dimos to act for her in the proceeding
rather
than that she be forced to obtain legal advice and representation elsewhere.
She had not seen the Deed.
- The plaintiff then deposed to her knowledge of the defendant's
business activities and of the partnership proceeding. As to the
former, she
was "well familiar with the manner in which the defendant and others conducted
the relevant businesses for the period
1993 to 2000". During that period they
had lived together as man and wife, "sharing a house and our lives". The
defendant did not
seek to hide his business affairs from her and she "worked in
and assisted in managing the various businesses from 1993 to 2000".
During
their relationship the defendant's "financial affairs, the businesses and their
history were common topics of conversation
not simply between the defendant and
I but also between myself and members of his family". The businesses expanded
and were the
focus of their lives. From the discussions with the defendant,
his family members and others over that period she was "well familiar
with the
history and conduct of the businesses prior to 1993". She then referred, by
way of example, to being aware, from these
sources, of a series of matters
concerning the establishment, conduct and organisation of the businesses over
the years, referring
in doing so to the several corporations and furniture
businesses. The defendant either controlled or had a substantial interest
in
these corporations. She had also met and knew many of the defendant's business
associates and suppliers in Australia and overseas.
She was "generally aware
of sales levels, stock levels and sources, pricing, sales techniques and
generally the manner in which
the businesses and companies were operated".
- As to the matter of the partnership proceeding, the plaintiff
said that she was aware of the proceeding, that she was to be called
as a
witness by Ken and had provided a witness statement, that it settled at trial
in around May 2003, and that she was present at
and around the Court and Ken's
senior barrister's chambers on the days of the trial. She was aware of the
negotiations between the
parties leading to the settlement and of the facts
that the partnership proceeding was settled between all the parties, that the
defendant and Ken each gave undertakings to the Court not to contact the other
without prior written consent, that the proceeding
was struck out by consent,
and that the terms of settlement would be required to be kept confidential. In
view of the defendant's
desire for confidentiality I have omitted reference to
further evidence of the plaintiff as to the term of the Deed which states
the
central obligation of the defendant in settlement of the proceeding. It is
sufficient to record that her evidence exactly corresponds
with, and bespeaks a
knowledge of, the settlement terms in their essence. She was, she said, aware
of these matters (that is, the
terms) because she was present when counsel
communicated offers to Ken, and Ken discussed the final offer with her and
members of
his family. She was aware of each of the components of the
settlement before agreement was reached.
- The plaintiff concluded her affidavit with the following
statement. She had instructed her previous solicitors and counsel with
her
knowledge of the defendant's financial affairs, and her pleading was based on
that knowledge. She believed that she was already
aware of any matter that
might be known to Dimos as a result of Dimos having acted for Ken in the
partnership proceeding. However,
if they held other confidential information
she had agreed that they were not required by her retainer to make use of it on
her behalf.
She believed too that she was aware of every matter referred to in
Tonkin's affidavit.
Conduct of the hearing
- Counsel addressed submissions on the basis of the affidavit
evidence. No deponent was cross-examined.
The defendant's submissions
- The defendant's submissions proceeded on the following
lines.
- They commenced with a reference to Dimos' fiduciary obligation
to Ken. The relationship of solicitor and client between Dimos and
Ken in the
partnership proceeding imposed on Dimos an obligation not to disclose
information which Dimos received from Ken in confidence.
While ordinarily a
client might authorise disclosure of such information, cl 7 of the Deed
precluded Ken from doing so in relation
to information that fell within the
categories in sub-paras (i)-(iv) in cl 7. Thus, Ken cannot authorise
Dimos to disclose
any confidences in these categories to Zorica, or waive the
duty of Dimos to keep confidential Ken's communications to Dimos. It
appears
from an answer to interrogatory that the plaintiff will call Ken as a witness
in her case, when Dimos is her solicitor.
- The next step in the submission was to refer to the following
principle stated by Nettle J in Sent and Prime Life Corporation Ltd v
John Fairfax Publication Pty Ltd and Hills[1] as a basis for the injunction:
Authority establishes that the court will restrain a legal
practitioner continuing to act for a party to litigation if a reasonable
person
informed of the facts might reasonably anticipate a danger of misuse of
confidential information of a former client and that
there is a real and
sensible possibility that the interest of the practitioner in advancing the
case in the litigation might conflict
with [the] practitioner's duty to keep
the information confidential, and to refrain from using that information to the
detriment
of the former client[2].
- It was submitted that the matters before the Court in Zorica's
case overlapped substantially with the matters that were before the
Court in
the partnership proceeding. Dimos should be restrained from acting in the
present case because there is a real and sensible
possibility that the matters
"that were the subject of Ken's proceeding and which are the subject of the
Deed are now in issue in
the present case and even if not in issue will be
examined during the course of the trial".
- As to this submission I interpolate that, as mentioned
earlier, as a result of the paucity of information provided, I do not know
what
actually was in issue, or admitted, in the partnership proceeding.
Furthermore, the information sought to be protected was not
identified
otherwise than in those general or global terms or the terms set out above at
[18]. The submission was characterised
by an all round lack of clarity and
precision.
- Counsel for the defendant acknowledged the obvious
requirement, stated by Drummond J in Carindale Country Club Estate Pty
Ltd v Astill[3], that allegedly
confidential information be identified with precision and not merely in global
terms. This derives at least from
the need to express an injunction in clear
terms and, generally, the need to avoid the risk of injustice as a result of a
court acting
on an imprecise assertion of confidential information.
Nevertheless, it is recognised that the degree of particularity that a court
will require will depend upon the relevant facts and circumstances in the
particular case. See, for instance, the discussion in
Sent[4]. A factor to be considered is whether a
precise identification of the information, and thereby its open disclosure,
would undermine
if not destroy the confidence sought to be protected.
- Counsel for the defendant contended that the information at
risk of exposure was identified with precision in paragraphs 9
and 15 of
Tonkin's affidavit "because of the terms of the Deed". Paragraph 9 merely
referred to cl 7, stating that it provided
that Ken's professional
advisers will keep confidential the "contents" of sub-paras(i)-(iv). Paragraph
15 stated the assertions
and contentions I have set out at [18] (a) and (b)
above. In other words, the defendant does not actually identify any particular
information which requires protection let alone relate it to a matter in issue
in Zorica's case.
- Counsel made the following further point. Dimos is obliged to
put its knowledge at the plaintiff's disposal. As it is not permitted
or
prepared to do so it should not act; see Spector v Ageda[5] applied in In the Marriage of RA & E
Thevenaz[6].
- Counsel sought to support this submission by in effect
challenging the veracity of the plaintiff's evidence as to her knowledge
of the
business affairs. He sought to do this by reference to her answers to
interrogatories which were, he submitted, in conflict
with the evidence in her
affidavit. Counsel said that at the trial Zorica would be challenged as to the
source of her knowledge
of the matters stated in her affidavit, the inference
being that her present affidavit is untrue. The further inference would seem
to be that at trial she must rely on Ken or Dimos providing information which
the Deed makes confidential. Counsel took me to the
answers in question but
without the plaintiff being cross-examined on the matter it would be unfair to
her and impossible to accede
to the submission. There may be a variety of
reasons why the answers were drafted as they are including reasons that do not
reflect
on the plaintiff's credibility. To be fair to counsel he did not press
an application to cross-examine the plaintiff and put the
submission briefly.
Of course counsel may have been concerned that if he did cross-examine the
plaintiff I might have formed a favourable
view of her in terms of her
possessing an independent knowledge of the relevant business affairs, and thus
unfavourable to the defendant's
application. However counsel cannot have it
both ways. He attacked the correctness of her evidence, thus inviting me not
to accept
it or perhaps to give it little weight, yet he would not
cross-examine.
- Finally, on this part of the submissions, it was submitted
that the plaintiff's release of Dimos from the obligation to use for
her
benefit information which cl 7 made confidential could not be relied upon. It
would be difficult to know or test whether any
alleged knowledge of the
plaintiff came from a non-confidential source.
- Counsel then advanced a second basis upon which the injunction
should be granted. This was on the basis of the general equitable
jurisdiction
referred to by Deane J in Moorgate Tobacco Co Ltd v Philip Morris Ltd [No.
2][7], to grant relief against an actual or
threatened abuse of confidential information, not involving any tort or breach
of contract
or some wider fiduciary duty. Applying that principle, in the
circumstances Dimos has an obligation of confidence directly to John
and should
be restrained from breaching that confidence.
- Counsel then advanced a third basis on which the injunction
should be granted. The Court would grant an injunction as a matter
of public
policy where a fair minded reasonably informed member of the public would
conclude that the proper administration of justice
required that the legal
practitioner be prevented from acting. See Grimwade v Meagher[8], Sent[9]
and Village Roadshow Limited v Blake Dawson Waldron[10].
- Counsel then advanced a fourth basis on which the injunction
should be granted. That is that Dimos may be restrained on the basis
of the
overriding duty to the Court not to appear in a matter in which one has an
actual or potential conflict of interest. For
authority here counsel relied on
the statement of Young CJ in Nangus Pty Ltd v Charles Donovan Pty Ltd[11] as to the Court being concerned for its own
protection. As I observed to counsel however the relevant circumstance in that
case
is not that in the present. There the matter that concerned the Chief
Justice was the one counsel acting for two parties in the
litigation. The
conflict suggested in the present case is of a different kind and arises in
different circumstances. I note that
counsel also referred to Kooky
Garments Ltd v Charlton[12] and
Spincode Pty Ltd v Look Software Pty Ltd[13].
- Finally counsel submitted that there had not been any
unreasonable delay in bringing the application, and therefore that the
application
should not be refused on the ground of delay.
The plaintiff's submissions
- At the outset counsel for the plaintiff drew attention to the
fact that counsel for the defendant had directed their attention to
cases in
which the solicitor in question had acted for the defendant applicant. He had
not referred to cases such as the present
in which the solicitor had not acted
for the defendant applicant. There were two such cases, namely
Tricontinental Corporation Ltd v Holding Redlich[14] and Mitchell v Pattern Holdings Pty Ltd[15] in each of which the injunction was refused.
Each case considered whether there was a real and sensible possibility of the
misuse
of alleged confidential information.
- As to the facts, it was submitted that the plaintiff had her
own knowledge independently acquired. Further, the defendant will
have to
disclose and make production of all relevant business documents, thus providing
details of the businesses and their operation.
In addition the parties can
inspect the Court file in the partnership proceeding. In the circumstances,
and having regard to the
failure of the defendant to identify or relevantly
particularise the confidential information needing protection, the defendant
had
not established a real and sensible possibility of the misuse of
confidential information.
- Without overlooking the contents of the written submission of
counsel for the plaintiff, or what they said orally, for present purposes
this
is a sufficient reference to their submission. The written submissions of both
parties, initialled by myself, are on the Court
file.
Conclusion
- There was no difference between counsel as to any matter of
principle. I accept that an injunction may go to restrain a solicitor
from
acting for a party in the several circumstances referred to in the defendant's
submissions. It is however to be noted that
in this case, unlike Sent
for instance, Dimos never acted for the defendant. I have already noted that
counsel for the defendant, doubtless as a result of
oversight, did not draw to
my attention the decisions in Tricontinental and Mitchell which
were apposite in that they were applications where the solicitor in question
had not acted for the relevant party. I have
also referred to the approach
taken as to whether there was a real and sensible possibility of the misuse of
confidential information.
To that approach, which is the first of the
alternative bases for the order in the defendant's submissions, I now
turn.
- The first point to note is that the claims in the present
proceeding and in the partnership proceeding have an entirely different
basis
in law. Whereas the partnership proceeding was a dispute between persons as to
their respective interests in the ownership
of a business or businesses,
Zorica's proceeding is a claim to a share in the interest of the defendant in
property of his including
the business or businesses. The former claim was
based in the contractual or equitable rights between the owners of the business
or businesses, whereas the latter claim is based on or arises out of the
de facto relationship between the plaintiff and the
defendant, and the
claim is made pursuant to the Act. Regrettably counsel for the defendant did
not undertake a close analysis of
the issues in the two proceedings, and he
could not have in the absence of a disclosure of the pleadings and other
documents in the
partnership proceeding, that non-disclosure clearly being
deliberate. And, as I have said, added to that non-disclosure is the related
failure to identify with precision the confidential information requiring
protection. It was said that the conduct of the business
or businesses was an
important subject matter of inquiry in both the partnership proceeding and in
Zorica's case and that Dimos must
have acquired knowledge of relevant matters.
But the fact is that the basis of the claims and the issues in the two
proceedings are
different, and the evidence in Zorica's case will thus have a
different purpose, slant and perspective which must limit the relevance
or
utility of the alleged confidential information.
- As I have observed, the only pleading in the partnership
proceeding that I have seen is the statement of claim. Hence, as I have
said,
I do not know what was in issue or admitted on the pleadings. In other words I
do not know the extent of the denials or admissions
by the defendant.
Furthermore I do not know what may be ascertained on a search of the file in
that proceeding. And, of course,
under the Rules of this Court the file may be
inspected by a person on application. Hence, it is available for inspection by
the
plaintiff. Clause 7 cannot prevent such inspection and the related noting
of information contained in documents on the file. To
that extent the
pleadings and other documents on the file are a matter of record and cannot be
confidential from the plaintiff.
That would not normally extend to witness
statements as they are not normally on the file, but presumably Zorica has
access to her
own witness statement.
- It is important not to be diverted by the application into
thinking that Zorica is dependant upon Dimos disclosing the alleged
confidential
information. In addition to being able to inspect the file in the
partnership proceeding, there will be discovery in her proceeding,
by discovery
of documents if not also by interrogatories. In that process of discovery the
defendant will be obliged to disclose
all documents relevant to the issues in
the proceeding. If the defendant's submissions are correct, that discovery
will extend to
documents and interrogatories relating to the conduct and
circumstances of the business or businesses. In other words, there will
be
discovery of information that the defendant is (by this application) seeking to
keep from the plaintiff. There will also be discovery
on other issues such as
the role and contributions of the defendant and the plaintiff. It must be
presumed that the defendant will
comply with his obligations in this regard.
- In addition there is the extensive knowledge of the business
or businesses which the plaintiff possesses in her own right, as stated
in her
affidavit. Not only was she not cross-examined on her affidavit but the
defendant did not swear an affidavit denying her
evidence. Rather, it was said
that she would be challenged at trial, and in that regard her answers to
interrogatories were referred
to. I have regard to that, and to her interest
in her own cause, but the fact remains that except in the manner mentioned her
evidence
was not challenged and the defendant was content to run the case on
the basis of confidential information in the general or global
terms referred
to in cl 7 and Tonkin's affidavit. Having considered all the matters put
to me, I accept the plaintiff's evidence.
- In summary, what is or will be available to the plaintiff is
her own knowledge of the matters referred to in her affidavit, the
information
that has or will be obtained on discovery in her proceeding, and the
information that may be obtained by searching the
file in the partnership
proceeding. All this is available in the prosecution of her claim without
seeking or receiving from the
persons bound by cl 7 information which that
clause requires to be kept confidential.
- In addition, the plaintiff could call Ken to give evidence at
the trial, and cl 7 could not prevent him from giving evidence
of any
relevant matter.
- I turn then to consider sub-paras (i)-(iv) of cl 7. The first
category in sub-para (i) is the contents of the Deed. It seems apparent
from
reading the Deed that what would ordinarily be regarded as confidential is para
(ii) which states the consideration for the
settlement, and that seemed to be
confirmed by counsel who requested that that part of the clause remain
confidential in the sense
of not being stated in this judgment. The terms are
otherwise of a usual nature and do not disclose information that would
ordinarily
need to be regarded as confidential. But the plaintiff has
independent knowledge of the settlement as a result of being present
when it
was discussed. Hence she knew what the settlement was before she retained
Dimos.
- The second category is sub-para (ii) which states the
consideration which the defendant agreed to provide under the settlement.
As
mentioned, the plaintiff was aware of this due to her being present when
settlement was discussed with Ken.
- The third category in sub-para (iii) is any matter discussed
during the mediation and settlement discussions. Hone's evidence confirms
that
there was a mediation but I have no details of it. Hone further states that no
present employee of Dimos attended the mediation.
Then, as to the settlement
discussions the plaintiff was present, and she has deposed to her knowledge.
- The fourth category in sub-para (iv) is any matter in the
pleadings, witness statements or any document on the Court file. This
is
extraordinarily wide, and the somewhat ridiculous nature of the protection is
shown by the following. A search of the Court file
in the partnership
proceeding will disclose the pleadings and other documents on the file. I was
not told that the file was subject
to any restriction in that regard and I
cannot imagine why the file or any particular document on it would not be
available on a
search. The proceeding appears to be a common-place piece of
commercial litigation. The searchable file would not ordinarily include
a
witness statement. Thus while the plaintiff would have her own witness
statement she would not have the witness statement of any
other person. There
was no evidence as to the number of witness statements that had been provided
by the parties, or filed with
the Court, and no evidence as to the content of
any witness statement. This is important if only because the issues in the
proceedings
are different and it is speculation as to the extent to which the
information in any witness statement might materially, for the
purpose of the
plaintiff's proceeding, add to the information available on the file in the
partnership proceeding and which is otherwise
known to the plaintiff.
- In these circumstances, and regarding the submissions overall,
I am not satisfied that there is a real and sensible possibility
of the misuse
of information which cl 7 makes confidential. This is by reason of the
plaintiff's own knowledge of relevant
matters including matters referred to in
cl 7, the public availability of the Court file in the partnership
proceeding, the
difference in the issues in the two proceedings, the lack of
specificity of the alleged confidential information and the failure
to
demonstrate how and in what way it is relevant to the issues in the plaintiff's
proceeding. The lack of specificity means that
it is speculation whether the
information is not within the plaintiff's knowledge anyway. The defendant
chose to run the application
in a way that did not meet her evidence. While
having an onus as applicant[16], the defendant
left the matter in the general terms of cl 7 and the assertions of
Tonkin.
- Nor is it to be overlooked that the present is not a case of a
party seeking to restrain his or her former solicitor from acting
for the
opposite party. The cases referred to above reflect the concern of judges in
that situation. Here, however, Dimos acted
for Ken in the partnership
proceeding but never acted for the defendant. Hence, the obligation of Dimos
not to disclose matters
referred to in cl 7 derives not from having acted
for the defendant but in virtue of having acted for Ken and thus being bound
to
observe Ken's duty of confidentiality. Otherwise Dimos is not and has not been
under a duty or duties to the defendant of the
nature that obtain in or as a
result of the relationship between solicitor and client, and discussed, for
instance, in Spincode. Added to this is the fact that it is a severe
thing to deny to a party the services of the solicitor of her choice,
particularly
when, as Mandie J observed in Tricontinental, it is not on
the application of a former client but of an adverse party.
- In my view the application must fail. In the first place, I
am quite unpersuaded of a real and sensible possibility, whether conscious
or
unconscious, of the misuse of confidential information. The facts do not
warrant the intervention of equity to restrain Dimos
from acting. Nor, in the
absence of the solicitor and client relationship in particular, but having
regard to the circumstances
generally, is the intervention of the Court
warranted on the third or fourth alternative basis on which the injunction was
sought.
While I have regard to those bases, indeed to all that counsel said,
it is not necessary to elaborate upon them. Among other things,
no reasonably
informed member of the public would conclude, and the Court should not, that
the administration of justice required
that Dimos be restrained from
acting.
- I should perhaps add, for the sake of clarity, that this
conclusion does not depend on the plaintiff's release of Dimos referred
to at
[20]. In reaching my conclusion I have found it unnecessary to consider that
matter. That is not because I consider that
it should be disregarded on
account of it being unrealistic and unworkable or that it was not otherwise
properly to be considered
as part of the relevant circumstances, but because
other considerations require the refusal of the application.
- Having regard to these conclusions it is not necessary to
consider the discretionary matter of delay. I should say however that
if I had
otherwise been satisfied as to the merits of the application I would not have
refused the injunction on the ground of delay.
- The application will be dismissed with costs.
[1] [2002] VSC 429 at [33]
[2] See Farrow Mortgage v Mendel Properties
Pty Ltd (1995) 1 VR at p. 5 per Hayne J; Yunghanns v Elfic
Pty Ltd (1998) Butterworth Cases 9803497 per Gillard J; Bolkiah v
KPMG [1998] UKHL 52; [1999] 2 AC 222 especially at 237 in the speech of Millet L; and
World Medical Manufacturing Corporation v Phillips Ormonde &
Fitzpatrick (2000) VSC 196 per Gillard J.
[3] [1993] FCA 218; (1993) 42 FCR 307 at 314-315
[4] At [67]-[69]
[5] [1973] Ch 30
[6] (1986) 11 Fam LR 95
[7] [1984] HCA 73; (1984) 156 CLR 414 at 437-438.
[8] [1995] 1 VR 446.
[9] [2002] VSC 429.
[10] [2003] VSC 505; (2004) Aust. Torts Reports
81-726
[11] [1989] VR 184 at 186.
[12] [1994] 1 NZLR 587 at 590.
[13] [2001] VSCA 248; (2001) 4 VR 501 at 525.
[14] Unreported, Supreme Court of Victoria,
Mandie J, 22 December 1994; BC9400946
[15] [2000] NSWSC 1015.
[16] Mitchell v Pattern Holdings
[2000] NSWSC 1015.
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