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Husband Files An Application to Restrain Engagement of Counsel

Naillon & Naillon [2022] FedCFamC2F 140 (18 February 2022)

The husband sought to restrain the wife's solicitors from acting for her in the substantive property settlement proceedings between them and from providing any information confidential to the Respondents to the Applicant or to any solicitors who may accept instructions to represent her.  The wife sought dismissal of the husband's application.  The Court, in adjudicating this dispute, assessed whether or not the Germein Reed file constitutes confidential information. 

Facts:

The husband sought to restrain the wife's solicitors from acting for her in the substantive property settlement proceedings between them and from providing any information confidential to the Respondents to the Applicant or to any solicitors who may accept instructions to represent her. 

The wife sought dismissal of the husband's application.  The wife also sought further orders that the respondents be restrained from instructing their current lawyer or any lawyers from Bambrick Legal in these proceedings or otherwise instructing the same lawyer.  The second, third and fourth respondents sought interim orders to be removed from the proceedings. 

The second respondent's father died in 2004.  Following his death he engaged Germein Reed Lawyers to assist with the administration of his father's estate.  In or about February 2005 the firm changed its name to Germein Reed Mildwaters.  Ms Kylie Mildwaters was instructed to assist with the administration of the estate.  As part of the division of the estate the second respondent inherited an interest in certain lands in the Town E area ("the farm").

The second respondent's father's will was not executed in accordance with the formalities required by section 12 (2) of the Wills Act 1936 (SA).  In order to satisfy that section, special application had to be made to the Supreme Court of South Australia seeking an order that the document be admitted to probate with evidence from anyone who knew about the testamentary intentions of the deceased at the time of signing.  This required Ms Mildwaters to obtain sworn evidence from various witnesses including the second and third respondents.  Ms Mildwaters dealt directly with the second and third respondents in relation to the winding up of the estate.

The estate was not wound up until 2012. Ms Mildwaters remained with the firm until in or about July 2011.  Ms Mildwaters took over the applicant’s family law file in or about October 2019.  Ms Mildwaters filed an application on behalf of the applicant wife seeking property proceedings against the first, second, third and fourth respondents on 15 July 2021.  

Issues:

I. Whether or not the Germein Reed file constitutes confidential information. 

II. Whether or not the second and third respondents have waived the right to any confidentiality by virtue of their delay in bringing these proceedings. 

Applicable law:

Asia Pacific Telecommunications Ltd v Optus Networks Pty Limited [2007] NSWSC 350 - provides that the public interest is predicated on a client knowing that confidential information imparted to a lawyer will not be given to an opposing party unless the law requires its production.
 
B Pty Ltd v K (2008) [2008] FamCAFC 113; 219 FLR 107 - relied upon by the respondents in arguing that the applicant has failed to demonstrate sufficient facts that if proven the law would provide the relief sought.
 
Bransdon and Davis and Gilbert (2007) FLC 93 - 328 - provides that the many authorities on conflict of interest and ethical rules of the various professional associations makes it clear that acting for two parties who are before the Court where there is a potential conflict is fraught with difficulty. 
 
Dalton & Dalton [2017] FamCAFC 78; (2017) FLC 93-773 - provides that it is well settled that the jurisdiction to restrain a solicitor from acting for a client is exceptional and to be exercised with caution, having regard to the totality of the evidence. 
 
Giannarelli v Wraith (1988) 165 CLR 543 - where each of the respondents has signed an agreement to engage with the same solicitor in spite of any potential conflict of interest however the conflict in this matter arises from the solicitor's duty to the court and this is not something that the parties can waive. 
 
Kallinicos v Hunt [2005] NSWSC 1181 - where the parties accept that such jurisdiction is to be regarded as exceptional and exercised with caution and that due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. 
 
Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1 - provides that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. 
 
Osferatu & Osferatu [2015] FamCAFC 177; (2015) FLC 93-666 - provides that 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.

Analysis:

The second respondent asserts that a professional relationship was built between himself, his wife (the third respondent) and Ms Mildwaters.  He says he had numerous face-to-face and telephone conversations with Ms Mildwaters.  The second respondent asserts that during the administration of the estate “Ms Mildwaters took instructions about the farm structure and its operation in great detail, due to the fact that there was a four way partnership between my parents and Ms C Naillon and me”.  Ms Mildwaters denies having substantive conversations about the farm or its operations.

The second respondent obtained the file from Germein Reed which related to the administration of his father's estate (“the Germein Reed file”).  In his evidence the second respondent refers to specific documents from that file which he says constitute confidential information but has not annexed them or otherwise provided them to the applicant.  The applicant sought for those documents to be disclosed due to the fact that that by referring to them in the affidavit the respondent was obliged to provide them and/or that by referring to them he has waived any privilege or confidentially that might otherwise be attached to them.  It was argued that the documents were not confidential because they were on the public record and/or because the information was no longer confidential as the information was within the knowledge of the applicant and could be provided to her solicitor. 

Conclusion:

The Court found that the Germein Reed file constitutes confidential information.  The applicant is restrained and an injunction granted restraining the applicant from instructing Ms Mildwaters and Mildwaters Lawyers from acting for the applicant in these proceedings.  Ms Mildwaters and Mildwaters Lawyers are restrained and an injunction granted restraining Ms Mildwaters and Mildwaters Lawyers from providing any information confidential to the respondents to the applicant or to any solicitors who may accept instructions to represent the applicant in the future.  The first, second, third and fourth respondents are restrained and an injunction is granted restraining them from instructing any of Suzi Cengarle, Bambrick Legal and Bambrick Legal Pty Ltd as their lawyers in these proceedings.  An injunction is granted restraining the first respondent on the one part and the second, third and fourth respondents on the other part from jointly instructing the same lawyer or law practice as their lawyers in these proceedings.

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