Conflict of Interest

Conflict of Interest – Case Update

Osferatu & Osferatu [2015] FamCAFC 177 (15 September 2015)

Last Updated: 21 September 2015

FAMILY COURT OF AUSTRALIA

REPRESENTATION

ORDERS

(1) The appeal is allowed.
(2) Paragraph 1 of the Orders made by the Honourable Justice Foster on 12 June 2015 is discharged.
(3) The Court notes the undertakings given to the Court by Mr F on 12 May 2014, Ms V given on 27 May 2015, Mr W given on 27 May 2015 and Ms Q given on 26 May 2015 and, on that basis, paragraphs 3 and 4 of the Application in a Case filed 12 May 2015 are dismissed.
(4) The Respondent is to pay the Appellant’s costs of this appeal as agreed or in default of agreement as assessed. The costs are to be paid within 28 days of agreement or assessment.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Osferatu & Osferatu has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Appeal Number: EA 96 of 2015
File Number: SYC 2318 of 2011

Appellant

And

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Mr Osferatu, who we will refer to as the husband, appeals against an order made by Foster J on 12 June 2015 restraining his solicitors from continuing to act in proceedings between him and Ms Osferatu (“the wife”). The basis for the making of the order was that Mr F, who had been a partner in the firm of the solicitors instructed by the wife, left that firm in February 2012 and started working in the firm of solicitors instructed by the husband on 5 May 2014. He has since become a partner of that firm. It was common ground that Mr F did not have any direct dealings with the wife whilst he was a member of the firm instructed by her.
2. Before turning to the grounds of appeal it is necessary to set out some brief facts of the matter and to discuss the applicable principles.

BACKGROUND

3. On 24 June 2011 the wife instructed her present solicitors, Watts McCray. The parties then engaged in substantial litigation concerning their property and children. Final parenting orders were made by consent on 21 November 2013 and final property orders were made by consent on 29 January 2014. The husband was represented in the litigation that led to both sets of consent orders by Barkus Doolan Family Lawyers (“Barkus Doolan”).
4. On 7 May 2014 Watts McCray wrote to Barkus Doolan referring to the fact that Mr F (who had previously worked at Watts McCray) was now working at Barkus Doolan and saying that, subject to Mr F giving an undertaking as to certain matters, no objection would, at that stage, be taken to Barkus Doolan continuing to act for the husband but, also, reserving the right to object if there were further proceedings.
5. On 12 May 2014 Mr F signed and provided to the wife the following undertaking:

I … undertake to the Family Court of Australia and to Watts McCray and their client, [the wife], that I will not disclose any information that I may be aware of concerning either [the wife] or the proceedings before the Family Court of Australia between [the wife] and [the husband] to any other person. In that regard, I undertake not to:

1. Speak with [the husband] or any person at Barkus Doolan concerning any information I may have concerning [the wife] or her proceedings;
2. Disclose directly or indirectly any information that I may have in my possession or control concerning [the wife] and her proceedings;
3. Have any involvement with the proceedings;
4. View any correspondence files, tax invoices, briefs or emails either sent to Barkus Doolan or received by them, nor be involved in the matter in any manner whatsoever in the future;
5. Convey to any person any information about the affairs of [the wife] which I may have as a result of my employment with Watts McCray.
6. On 13 May 2014 Watts McCray wrote to Barkus Doolan saying:

Our client confirms her position (recorded in our letter of 7 May 2014) that such an Undertaking would only be accepted by her on the basis that – should there be further proceedings as between our clients (howsoever described, and beyond the implementation of the Terms of Settlement as between our respective clients) – our client would then formally object to your firm continuing to act on behalf of [the husband]…

7. Barkus Doolan made no response.
8. Watts McCray reiterated their position in a letter of 4 August 2014 and sought a confirmation that the husband would retain other legal representation in the event that further proceedings in the Family Court would be instituted. Barkus Doolan again made no response to this letter.
9. On 7 October 2014 Barkus Doolan advised Watts McCray that they had ceased to act for the husband.
10. On 3 February 2015 the husband on his own behalf filed an Application in a Case seeking the following orders:
    1. This matter be relisted before his Honour Justice Le Poer Trench forthwith
    2. That [Mr U] immediately replace [Ms GG] as the Court appointed family therapist to the [Osferatu] family
    3. That [the child E] immediately resume contact with the Applicant and [the child B] on the following staged basis,
       • Immediately for one hour twice a week, for four weeks.
       • Thereafter in accordance with the existing Courts [sic] Orders.
    4. That the Respondent deliver [S] and [E] to the home of their [grandmother] at [Property Y] or to her ‘Respite Centre’ for a minimum of 30 minutes at least once per month commencing immediately.
    5. That the Respondent unblock the Applicants [sic] mobile telephone number on [E’s] mobile telephone and leave it unblocked.
    6. That the Respondent deliver [E’s] mobile phone to the Court.
    7. That the Respondent pay the Applicant’s costs of this application.
11. On 19 February 2015, in the context of the husband’s application filed on 3 February 2015, the wife wrote to the husband by email saying:

I do not wish for you to be prejudiced with your legal representation and appreciate how rusty you are in an unfamiliar environment so I have no issue in your previous law firm … representing you going forward.

12. Notwithstanding that communication the husband continued to act for himself.
13. On 9 March 2015 Watts McCray wrote to the husband, repeating the wife’s objection to Barkus Doolan acting for the husband.
14. On 27 March 2015 the husband filed an Initiating Application seeking only Order 2 from his Application in a Case filed on 3 February 2015 (that the family therapist be changed) and costs.
15. On 20 April 2015 the wife filed a response to the Initiating Application in which she sought that the husband’s Initiating Application be dismissed as well as variations to the existing parenting and child support orders.
16. On 1 May 2015 Barkus Doolan filed and served a Notice of Address for Service and started to act for the husband again.
17. On 4 May 2015 an Amended Application in a Case was filed by Barkus Doolan on behalf of the husband, which again sought a change of family therapist and certain parenting and child support orders were also sought.
18. On 12 May 2015 the wife filed an Application in a Case seeking orders restraining the husband from retaining Barkus Doolan and restraining that firm from acting on behalf of the husband.
19. On 12 June 2015 Foster J granted the restraint against the husband and from that restraint the husband now appeals.

APPLICABLE LAW

20. There are three established categories on the basis of which solicitors may be restrained from acting against their client or former client. They are: breach of confidence, breach of fiduciary duty and the inherent jurisdiction of a court over its officers and to control its process. Each category has its own principles which guide its operation. The third category may be involved in conjunction with either of the first two so there is clearly an overlap; nonetheless, the basis for the exercise of the jurisdiction in each is different (Kallinicos v Hunt [2005] NSWSC 1181).
21. The case before the trial judge was only concerned with the first category: the risk of the misuse of confidential information and we thus confine ourselves to it.
22. The manner in which a client’s confidential information is to be protected in family law proceedings was clearly explained by the Full Court in McMillan and McMillan [2000] FamCA 1046; (2000) FLC 93-048 where the Full Court extensively reviewed existing authorities in the Family Court and in many other courts. The following statement of Frederico J in Thevenaz v Thevenaz (1986) FLC 91-748 at 75,447 was expressly adopted by the court:

Thus “a practitioner who wishes to cease acting for one party and to continue to act for the other party will be restrained from doing so by the court if there is any evidence that confidential communications have been made to him by the party for whom he is ceasing to act. In such a case the court will not weigh conflicting evidence as to confidence. It will act upon the evidence of the client who swears that he has made the confidential communication”. (Reference omitted).

23. The following passage from Thevenaz was also expressly adopted by the Full Court in McMillan:

It is my view that in this case [the lawyer] should not continue to act on behalf of [the wife]. It may well be that the risks were he to do so are more theoretical than practical. However, it is asserted and not contradicted that material in the files does relate to confidences exchanged in the course of the former firm previously acting on behalf of both parties and would embarrass the husband. It is of the utmost importance that justice should not only be done but should appear to be done. In the circumstances of the present case, there is a risk which may well be merely theoretical but still exists, that justice might not appear to be done.

24. In an unreported decision of Stewart & Stewart (unreported, Family Court of Australia, Lindenmayer J, 17 April 1997) Lindenmayer J said:

… All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that that information may be used against her, or at least to her disadvantage, in these current proceedings…

25. Of that passage the Full Court in McMillan said at [87]:

In other words, the client need only give evidence that he has provided confidential information to the solicitor (or in this case, the law clerk/secretary). The client does not have to divulge the content of that information. (See Mills and also Lindenmayer J in Stewart.) In the present case, we consider it sufficient, as we said earlier, that the husband has sworn that he had given instructions to Mr Pitts as to how he wished his “matter to be conducted and the position to be put to the wife”. It is obvious that such matters would come within the description of “confidential information”.

26. It is, however, important to recognise that McMillan, as were Thevanez and Stewart, was a case where the applicant was seeking to restrain a solicitor or a clerk to whom they had recently, and directly, given instructions from acting, or the firm to which they had moved, from acting, in those proceedings. Because the applicants in those cases had given instructions to the solicitor about the very matter in issue, it follows easily that there would be a finding that the solicitor who had moved was in possession of confidential information which is or may be relevant to that matter. It is for that very reason that the passage of Lindenmayer J in Stewart commenced with the words “All that is necessary is that …”. His Honour was simply saying that, in such circumstances, the burden borne by the applicant was discharged by such evidence. Nothing that appears in Stewart, Thevanez or McMillan obviates the need for an applicant seeking such relief from discharging his/her burden of proof by adducing cogent and persuasive evidence. This is particularly so where, as here, the circumstances differ from McMillan. In this case Mr F had never taken instructions from the wife.
27. In Mancini v Mancini [1999] NSWSC 800 Bryson J said at [7]:

It is of importance to observe that information generally is not protected; the protection available relates to confidential information, and is available to the person entitled to the confidence. No circumstances were put forward in which Mrs Mancini herself is entitled to the protection of the law against the use of any particular information by Mr Mancini or by the lawyers whom he has chosen to retain. It is not possible to address in any clear way and to come to a decision on protection of any alleged confidential information without identifying what the confidential information is in a sufficiently specific way to enable it to be identified. Without doing that it is not possible to come to a conclusion on whether the information truly is confidential, to consider and appraise the circumstances in which it came into existence and was communicated, to come to any conclusion about whether protection is appropriate, or to make any enforceable order. A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.
(Emphasis added)

28. The need for this proof is obvious. In Billington & Billington (No 2) [2008] FamCA 409 Coleman J said at [43]:

As the authorities make clear, the jurisdiction to grant relief of this kind “is to be exercised with caution”. The court understands caution to be exercisable in relation to the totality of the evidence, and the matters relevant to the exercise of the jurisdiction, and not to be referrable only to the interests of the party seeking the relief. Relevant in that context is the need to give appropriate weight to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. Also relevant in this context is the cost and inconvenience of requiring the wife to retain new lawyers. Quite apart from the work required to be undertaken by solicitors familiar with the case to adequately represent the wife’s interests before the Full Court, realistically, were new solicitors now to be instructed, a far greater level of reading and preparation would be required, and at greatly increased expense to the wife.

29. These are serious and weighty considerations which must, of course, be balanced against the competing interests of the client which were described by Lord Millett in Prince Jefri Bolkiah v KPMG (A Firm) [1998] UKHL 52; [1999] 2 AC 222 at 236 as follows:

…It is of overriding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest.

30. We see no conflict between what was said by the court in McMillan and in Volker and Anor & Dunwell and Anor (2013) FLC 93-558 as it was suggested that there might be in Drover & Glasson and Anor [2014] FamCA 714 (which was a decision referred to by the trial judge). Accordingly, we reject any such suggestion. It is to be recalled that McMillan and Volker were cases dealing with very different circumstances. Merely because a principle is expressed in different words by different courts, often to highlight the exigencies of that particular case, does not mean that the principle itself has been altered.
31. This conveniently leads to the next point. Once the client has discharged the onus of proving that the solicitor is in possession of confidential information which is, or may be relevant to the new matter, that is not the end of the case.
32. The next step involves a consideration of the risk that the relevant confidential information will be disclosed. The risk of disclosure “must be a real one, and not merely fanciful or theoretical. But it need not be substantial”: Prince Jefri at 237.
33. How is this to be determined? It is by the consideration of the risk and of any protective measures taken or proposed by the solicitor or his or her new firm. The evidentiary burden on this issue falls squarely on the lawyer or the firm to which he or she has moved. As Lord Millett said in Prince Jefri at 237-238:

Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so there is no risk that the information will come into the possession of those now acting for the other party. There is no rule of law that Chinese walls or other arrangements of a similar kind are insufficient to eliminate the risk. But the starting point must be that, unless special measures are taken, information moves within a firm. In MacDonald Estate v. Martin, 77 D.L.R. (4th) 249, 269 Sopinka J. said that the court should restrain the firm from acting for the second client “unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur.” With the substitution of the word “effective” for the words “all reasonable” I would respectfully adopt that formulation.

34. We agree with Goldberg J in PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905 where he said at [50] and [51]:
    50. It is apparent from Lord Millett’s judgment that there are three stages which need to be considered:
        • whether the firm is in possession of information which is confidential to the former client;
        • whether that information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client;
        • whether there is any risk that the information will come into the possession of those persons in the firm working for the other party.
    51. The burden of establishing the first two propositions is upon the former client but the burden of establishing the third proposition moves to the firm proposing to act once the first two propositions are satisfied…
35. A balancing of the nature of the information against a consideration of the person to whom the information was given, when the information was given, the relevance of that information to the current proceedings, the risk of disclosure and any proposed protective measures is required before any determination can be made as to whether any relief is required and, if so, what is the appropriate relief.
36. As an example of the application of such considerations we refer to Asia Pacific Telecommunications Ltd v Optus Networks Pty Limited [2007] NSWSC 350.
37. None of this conflicts with what was said in McMillan. At [93] their Honours said:

…We accept that the mere fact of access to confidential information is not the test. Rather the issue is whether the former client actually imparted confidential information to a solicitor (or clerk) who is now employed by the solicitors acting on the other side of the litigation.

38. The risk, and management of the risk, were not issues in McMillan, although the authorities quoted there deal with that aspect of the law in the manner we have described.
39. Before leaving this discussion we wish to refer to the statement in McMillan that even “a theoretical risk of the misuse of the confidential information” is sufficient to found relief. The phase “a theoretical risk” was echoed in Prince Jeffri in the passage quoted earlier. For our part, we find the word “theoretical” unhelpful. There is indeed a continuum of risk from obvious to remote. In Asia Pacific, Bergin J described the risk of disclosure or misuse as “probably real and not fanciful” (at [41]). In Billington Coleman J referred to “any real risk” (at [37]). That phrase was also used by Goldberg J in PhotoCure (at [78]). This is a more meaningful phrase. The consideration should be whether there is a real risk of misuse as opposed to one which is merely fanciful. To the extent that what we have said may be seen to represent a departure from McMillan (which we do not necessarily accept), it is to accord with more recent authority and provides a clearer test.
40. We return finally to Lord Millett in Prince Jefri:

Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one. The former may readily be inferred; the latter will often be obvious. I do not think that it is necessary to introduce any presumptions, rebuttable or otherwise, in relation to these two matters. But given the basis on which the jurisdiction is exercised, there is no cause to impute or attribute the knowledge of one partner to his fellow partners. Whether a particular individual is in possession of confidential information is a question of fact which must be proved or inferred from the circumstances of the case…
(Emphasis added)

41. It follows from the above discussion that the law requires that an applicant seeking to restrain a solicitor from acting must adduce evidence that establishes the confidential information and the risk of the misuse of that information in the circumstances. The weight and persuasiveness of any evidence adduced depends, of course, on the precision of the evidence called, the nature of the confidential information and the nature of the risk of disclosure.

APPROACH OF THE TRIAL JUDGE

42. After undertaking a consideration of the law the trial judge adopted the approach set out in McMillan. He concluded:
    51. In the circumstances of the solicitor’s role as “Work Director” when a partner in Watts McCray, and his engagement in detailed discussions as to the wife’s case and the wife’s evidence of her concerns that the nature of her instructions to Watts McCray and the advices given to her by that firm may be communicated to the husband’s solicitors through the solicitor, it is readily apparent that the proper administration of justice is clearly indicative of the relief sought by the wife.
43. In doing so he relied on the following evidence of the wife:
    29. I say that by virtue of the employment of [Mr F], formerly of Watts McCray Lawyers, by Barkus Doolan Family Lawyers, [the husband’s] solicitors (and by extension [the husband] himself) have been privy to, and are aware of:

(a) My instructions I have provided to Watts McCray Lawyers from time to time;
(b) The nature of advices received by me from Watts McCray Lawyers from time to time.

THE APPEAL

44. Although the Notice of Appeal contains eight grounds of challenge to his Honour’s orders, the appeal was argued on three broad bases. The first was that the wife had not established that Mr F had received confidential information. The second was that his Honour erred in finding that the wife had not “waived” any objection to Mr F continuing to act for the husband and had failed to give reasons for that finding. Finally, it was argued, that, on the evidence, there was no real risk of disclosure. We shall approach the appeal in the same way.

1. Confidential information being received by Mr F

45. It is immediately apparent from our discussion of the facts in this matter that this case differs significantly from McMillan because the wife gave evidence that she had never spoken to or provided instructions to Mr F. It therefore requires a careful consideration as to whether the wife has discharged the burden of proving that Mr F had received confidential information which is, or may be, relevant to the present proceedings.
46. Other than the evidence of the wife to which we have earlier referred, the only evidence relied on by the wife, if it indeed could be called that, was the following which appears in a letter written by Watts McCray to Barkus Doolan on 7 May 2014 which was annexed to the wife’s affidavit sworn on 12 May 2015:

To our knowledge, [Mr F] did not have any direct dealings with our client, [the wife], during the course of his employment with our firm. However, [Mr F] held responsibilities (including that of “Work Director”, and the responsibilities peculiar to that role in our offices) such that he was in a position to have active knowledge of all files including this matter. Further, [Mr F] was part of regular discussions at meetings involving our professional staff at which our client’s matter was discussed in detail. [Mr F] would, therefore, have been privy to, and aware of:

• Who our client is;
• Matters relating to the parties’ respective positions;
• Our client’s instructions to our firm from time to time; and
• The nature of advices provided to our client.

Further, our client is aware that [Mr F] has (whilst employed by our firm) always had access to our client’s electronic and physical file by virtue of his employment with our firm…

47. Pausing there, we do not see that that evidence is capable of supporting the trial judge’s findings that Mr F engaged “in detailed discussions as to the wife’s case” [51]. This considerably overstates the evidence, even if the letter could be read as asserting that Mr F was, in fact, privy to the client’s instructions and so on.
48. Mr F left Watts McCray in February 2012 (the reference to 2013 in the trial judgment was agreed by the parties to be an error). It is clear that the wife need not, for obvious reasons, divulge in her evidence the confidential information she asserts is held by the solicitor she is trying to restrain. However, for evidence to be persuasive and cogent she should have identified the nature of the information received or likely to have been received by Mr F between 24 June 2011 and February 2012 that was now, or could now be, relevant to the current proceedings. She did not do so. It is not sufficient to say that, as family law proceedings cover a range of matters, any information at all received by Mr F could have been relevant. This was especially so given that three years had passed since he could have received any information and both sets of substantive proceedings (parenting and property) had resolved.
49. We are of the opinion that the trial judge erred in not taking these matters into account. The first challenge to his Honour’s orders is made out.

2. Waiver and reasons

50. The second ground of appeal concerned the trial judge’s treatment of the “waiver” said to be constituted by the wife consenting to the husband’s solicitor acting on the earlier occasions. The trial judge said:
    55. The husband asserts a “waiver” by the wife occasioned by her personal email to the husband. The course of the matter leading to the present application is set out above. The wife’s asserted “waiver” was made in the context of the husband’s first application in a case as to “enforcement”. It was quickly asserted by her solicitors that she continued to maintain her qualified consent to the circumstances where the husband may retain his former solicitors.
    56. Whilst such injunctive relief is to be regarded as exceptional and is to be exercised with caution, the circumstances of this matter are clearly indicative of the relief sought by the wife being granted. The wife has established her entitlement to the relief sought.
51. There were, in fact, two occasions on which the wife consented to the husband’s solicitors acting. The first was when, in May 2014, consequent upon the undertaking being given by Mr F, the wife did not oppose Barkus Doolan continuing to act for the husband. The second is found in the wife’s letter to the husband of 19 February 2015 (albeit her concession to the husband that she would not oppose his solicitors continuing to act for him was countermanded some three weeks later by her solicitors). The evidence, and the trial judge’s reasons, do not disclose what was different about the proceedings then extant in May 2014, as opposed to May 2015, that indicated that the risk of disclosure of any confidential information was mitigated by the undertaking given in 2014 but not by the similar undertaking proffered in May 2015. Absent that evidence, the acceptance of the earlier undertaking is a powerful indication as to an appropriate way to deal with the wife’s concerns.
52. There was no explanation offered by the wife as to why she sent the husband the emailed letter in February 2015. In the context of the lengthy litigation between the parties and the express and detailed correspondence about Mr F acting, we consider the letter to be an indication that any risk of disclosure actually apprehended by the wife was either non-existent or minimal.
53. The wife’s letter in its terms was not referred to by the trial judge. The wife’s solicitors had been at pains to point out that the objection to Barkus Doolan was not theirs, but that of the wife. This adds weight to the importance of the letter. His Honour gave no reasons as to why the email of February 2015 did not carry significant weight. It follows therefore that we are of the opinion that the challenges under this heading, as to his Honour failing to find “waiver” and in failing to give reasons are established.

3. The risk of disclosure of confidential information

54. Finally, to the extent that it is necessary to do so, we find merit in the third challenge asserted by the appellant, that is that the trial judge did not consider whether or not there was a real risk of disclosure of any information by Mr F. This was particularly important given the length of time that Mr F had been absent from Watts McCray before the commencement of any proceedings by the husband. Further, the trial judge did not consider in any way the further proposed undertaking by Mr F in the form previously given. There was consequently no consideration as to whether there was, in the light of the proposed undertaking, a real risk of disclosure or misuse.
55. Further, the trial judge did not refer to evidence given by Ms V, a partner of Barkus Doolan, that Mr F had not disclosed to her directly or indirectly any information that he may have had as a consequence of his membership of Watts McCray. She went on to give undertakings that she would maintain arrangements within the firm which would quarantine Mr F and his staff, including his secretary and administrative assistant, from the proceedings. Arrangements had been made within the firm so as to prevent Mr F advertently, or inadvertently, from gaining access to either the electronic or physical file in relation to the parties.
56. Whilst measures such as this proposed information barrier may not in other cases be a sufficient guard against the risk identified by the appellant’s evidence, they were, in the circumstances of this case, very powerful considerations to be taken into account and his Honour erred in not considering them. The challenge under this heading is made out.
57. It follows that the appeal should be allowed.

LEAVE TO APPEAL

58. The husband, to the extent that it is necessary, seeks leave to appeal. Section 94AA of the Family Law Act 1975 (Cth) (“the Act”) sets out the circumstances in which leave to appeal is required. By the application of reg 15A of the Family Law Regulations 1984 (Cth) leave is required in respect of an interlocutory decree other than a decree in relation to a child welfare matter. The question therefore is whether an application to restrain a solicitor from acting is an interlocutory decree.
59. As to whether an order is interlocutory or final, is often said that a final judgment is one that finally disposes of the rights of the parties. In Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 Taylor J said at 440-441 (Owen J concurring):

…The order in the present case was made in proceedings preliminary to the bringing of an action and although it deprived the appellant of the benefit of the order of the learned judge of first instance, it did not operate to prevent him from making a further application for an extension of time. No doubt its practical effect was that any further application would have been fruitless unless supported by additional relevant facts but the order made by the Full Court did not of its own force conclude his right to bring an action.

60. In Licul v Corney [1976] HCA 6; (1976) 180 CLR 213 Barwick CJ posed the test at 219 as:

…To be final for this purpose, the order, in my opinion, must of its own force put an end to the action or proceeding between the parties…

61. Gibbs J said at 225:

…The other view which, since Hall v Nominal Defendant …, should, I think, be regarded as established in Australia, depends on the nature of the order made; the test is: Does the judgment or order, as made, finally dispose of the rights of the parties?…

62. In Carr and Anor v Finance Corporation of Australia Limited [1981] HCA 20; (1981) 147 CLR 246 both Gibbs CJ at 248 and Mason J at 256-7 rejected the proposition that one looks to the practical effect of the order as opposed to its legal effect.
63. In McMillan the court considered that the better view was that an order restraining a solicitor from acting was a final order.
64. The order prevents Barkus Doolan from acting at any time in the future. It is not expressed to be subject to further order. It finally disposes of the right of the husband to engage Barkus Doolan as his lawyers. It is a final order and leave is not required.

THE DISPOSITION OF THE APPEAL

65. As the appeal has been allowed the issue arises as to whether the matter should be remitted to a trial judge for reconsideration or re-determined by us. Both parties sought that this court re-exercise the trial judge’s discretion based on the evidence presently before the court. Neither party sought to adduce any further evidence. We will, therefore re-determine the matter.
66. We find the following matters to be persuasive:
    • The failure of the wife to point to any particular type of information disclosed to Watts McCray between 24 June 2011 and February 2012 that would engender a not unreasonable belief that that information may be used against her or to her disadvantage in the current proceedings before the court;
    • That, in previous proceedings not relevantly distinguishable from the present proceedings, the wife agreed to Barkus Doolan acting provided the appropriate undertaking was given by Mr F;
    • The wife agreed in February 2015 to Barkus Doolan continuing to act for the husband;
    • Strong and appropriate measures to quarantine Mr F from having any advertent or inadvertent contact with the proceedings within Barkus Doolan including undertakings to the court from the partners of that firm to maintain those measures were proposed; and
    • Mr F proffered of a similar undertaking to the one given and accepted in 2014.
67. All these matters lead us to the conclusion that the application by the wife (filed 12 May 2015) for a restraint against the husband’s instructing solicitors should be dismissed. As noted above, in re-determining the matter, we have taken into account the undertakings proffered by Mr F and the partners of Barkus Doolan. It is appropriate, therefore, for the court to accept those undertakings which were in writing and in evidence before the trial judge.

COSTS

68. As is usual, we sought the parties’ submissions on the costs of the appeal. Counsel for the respondent accepted that if the appeal succeeded he could not resist an order for costs. That was a sensible concession and we will make that order.

I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, Ainslie-Wallace and Aldridge JJ) delivered on 15 September 2015.

Associate:
Date: 15 September 2015