Secretary did not have confidential information of other party
- It is a well-known principle that lawyers must avoid conflicts between duties owed to current and former clients. This principle is enshrined in the overriding duty of confidentiality, which was summarised among other duties by the Full Court (Finn, Ainslie-Wallace & Aldridge JJ) in Osferatu & Osferatu (2015) FLC 93-666 (“Osferatu”) at 80,411:
- 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  NSWSC 1181).
- I am concerned here with a contention that a secretary in the office of the solicitor for the husband may have confidential information, obtained when employed by the wife’s solicitors. The Full Court in Osferatu made reference to another well-known decision, McMillan and McMillan  FamCA 1046; (2000) FLC 93-048 (“McMillan”), which discussed the protection that should be afforded to a client’s confidential information.
- As noted in the summary of argument filed by the wife, McMillan explains that an order for restraint is not limited to solicitors, and may be instigated in the case of law clerks or, as the wife contends, legal secretaries.
- The Full Court in McMillan confirmed (referring to the older decisions of Thevenaz and Thevenaz (1986) FLC 91-748 (“Thevenaz”) and the unreported decision of Stewart (unreported, Family Court of Australia, Lindenmayer J, 17 April 1997) (“Stewart”)) that there was no doubt that the Court has the power to restrain solicitors:
- It has been accepted in this Court, at least since the decision in June 1986 of Frederico J. in Thevenaz (1986) FLC 91-748, that the Court “has power to make orders restraining a firm of solicitors from continuing to act for one of the parties to proceedings in this Court, if it is of the view that it would be likely that those solicitors may have confidential information relating to the other party to the proceedings arising out of a former relationship of solicitor and client with that party which may be used to the advantage of the present client or to the disadvantage of the former client in the current proceedings” (per Lindenmayer J. in the unreported decision of Stewart (17 April 1997)).
- In McMillan the wife appealed against a decision which restrained her solicitors, because a “non-legally qualified law clerk” who was employed by the solicitors for the husband, moved employment to work as a secretary for the solicitors for the wife. The Full Court dismissed the wife’s appeal, and upheld the restraint. It should be noted that in McMillan the husband gave evidence that he had directly given instructions to the clerk on the telephone who also provided him with advice.
- The McMillan judgment reviewed relevant authorities in significant detail (see 87,725 – 87,735). Both McMillan and Oserferatu make reference to the test articulated by Frederico J in Thevenaz in the following passage at 75,447:
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.” (See Legal Profession Law and Practice in Victoria (Gifford) 1980 ed. at p. 356.)
- At 87,733 of their Reasons, the Full Court in McMillan confirmed that as the relevant test, stating the following:
…To the extent that it is necessary in this case for us to express a concluded view … we would support the application in this jurisdiction of the approach of Frederico J. in Thevenaz (following Mills) which was adopted by Mullane J. in Griffis and in Kossatz (and also by Lindenmayer J. in the unreported case of Stewart to which we will shortly refer). We would do so for the reasons related to the sensitive nature of the jurisdiction which were referred to by Bryson J. in D & J Constructions and by Rourke J. in Magro, and indeed also by Wilczek J. in the present case.
- In terms of the degree of proof required to demonstrate confidential information may have been communicated, their Honours referred to views expressed by Mullane J in Griffis & Griffis (1991) FLC 92-233, where his Honour said at 78,601 “[that] the former client be required only to prove a prima facie case as to the confidential material, the disclosure or use of which by the solicitor in the course of the conduct of the current proceedings for the present client would be prejudicial…”. Followed and reformulated another way, the Full Court in McMillan also made reference to the unreported decision in Stewart, and quoted the following passage:
“… 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. Accordingly, I propose to accede to the application of the wife.”
- It is helpful to consider the evidence put forward in McMillan, which can be summarised as follows:
- The husband’s affidavit specifically stated he communicated instructions directly to the law clerk/secretary (“the clerk”) in question;
- The husband’s affidavit stated that he believed the clerk “could make those instructions or information available for the use by the Wife against me…” (at ); and
- The above was corroborated by the solicitor instructed by the husband, and who in turn instructed the clerk.
- The Court concluded, based on this evidence, that they considered it “…sufficient…that the husband has sworn that he had given instructions to [the clerk] as to how he wished his ‘matter to be conducted and the position to be put to the wife’.” (at 87]).
- Particularly relevant to this case, the Court considered whether “access to information” was sufficient to demonstrate a prima facie case of prejudice. The Full Court determined that it was not enough to simply allege access to information:
- It is true that in a number of places in his reasons, Wilczek J. referred to the fact that [the clerk] “had access to information of a confidential nature from the husband”. 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. The husband has sworn that he did convey directly to [the clerk] information which we have accepted comes within the category of confidential information. Accordingly this error on the part of his Honour would make no difference to the outcome of this appeal in the sense that were we to consider that we should re-exercise the discretion vested in his Honour because of this mistake on the part of his Honour, we would also grant the restraining order.
- In Osferatu, the facts of the case were slightly different. The husband appealed against orders which restrained his solicitors from continuing to act for him in proceedings with his wife. A partner of the firm acting for the wife commenced employment with the firm acting for the husband. It is worth noting that it was “common ground that [the partner] did not have any direct dealings with the wife whilst he was a member of the firm instructed by her” (at ).
- In circumstances where the wife “gave evidence that she had never spoken to or provided instructions to [the partner]” (at ), the Full Court made the following findings at 80,412:
- 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.
- In Mancini v Mancini  NSWSC 800 Bryson J said at :
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.
- The Court concluded that the appeal should be dismissed, on the basis that the wife failed to meet the evidential threshold. The Court noted at 80,416:
- 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.
- Returning to the evidence of the wife set out at  of these Reasons, there is no evidence that relevant confidential information had been given to Ms M. It must be recalled that in McMillan, the husband’s evidence was that he given instructions directly to the relevant employee the subject of the restraint. Here, it is not enough that she had access to the wife’s file; direct evidence is required to demonstrate the likelihood of the provision of confidential information to Ms M.
- The evidential threshold required to be met by the wife in this application is set out at  of these Reasons. The wife was required to “identify the nature of the information received or likely to have been received” by Ms M between November 2015 and June 2016. The wife did not provide evidence of such relevant matters.
- The written submissions for the husband submit that it is difficult “…to fathom how confidential information, even if were imparted during the course of an appeal to the opposing practitioner, could have any impact upon the appeal such that the recipient practitioner ought to be restrained from continuing to act in the appeal.” There is force in this submission, but I am mindful of the comments in McMillan where the Full Court noted at  the “particular difficulties and sensitivities which arise in the family law area”.
- In the absence of evidence it should not be inferred that the secretary has confidential information. The wife’s application in relation to the husband’s appeal must fail.