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Ouch! An Application to restrain a legal practitioner / law firm from acting in a family law dispute

As a lawyer or legal practice, being faced with an Application to restrain you from acting for a client in a family law dispute is daunting. Especially when there is a potential that you could lose your fees, costs and outlays. But you should remember, they are not always brought with the best of intention and there may not even be grounds.


That’s why you should always be cautious, know the law and be prepared. But remember, “he who acts for himself has a fool for a client”.


Why not trust us to help you… we have the experience and the history and know exactly how to protect you and/or your practice.


RELEVANT PRINCIPLES


Australian Solicitors Conduct Rules


Rule 10 of the Australian Solicitors Conduct Rules 2012 provides:

10.1 A solicitor and law practice must avoid conflicts between the duties owed to current and former clients, except as permitted by Rule 10.2. 10.2 A solicitor or law practice who or which is in possession of confidential information of a former client where that information might reasonably be concluded to be material to the matter of another client and detrimental to the interests of the former client if disclosed, must not act for the current client in that matter UNLESS: 10.2.1 the former client has given informed written consent to the solicitor or law practice so acting; or 10.2.2 an effective information barrier has been established.

Context 


There exists no absolute rule that a legal practitioner who has acted for a client in a matter must not act against that client in the same or any other matter.[1] Despite this, there are three possible grounds for restraining a legal practitioner from acting for a party to litigation:[2]


(a) First, the inherent jurisdiction or implied power of the court to supervise and control the conduct of legal practitioners as officers of the court (in order to safeguard the due administration of justice (“Ground One – Implied Powers and Inherent Jurisdiction”);


(b) Second, a breach of a supposed fiduciary duty of loyalty not to act against a client, or against a former client, in the same matter or a closely related matter (“Ground Two – Breach of Duty of Loyalty”); and


(c)  Third, the danger of misuse of confidential information (“Ground Three – Breach of Confidence”).


The three bases have evolved for restraining a lawyer from acting for a client. Each basis is different,[3] and has its own principles guiding its operation, although they can in some circumstances overlap. 


Such an Application to restrain a legal practitioner from acting for a party to a proceeding must be made without delay, and the failure thereto to take the point at an early stage can cast doubt on the validity of any subsequent complaint or action to retrain, with this said to be a most important consideration (“Delay”).[4]


Ground One – Implied Powers and Inherent Jurisdiction


In Luthra v Betterley[5] Johnson J described ‘inherent jurisdiction’ as being inaccurate. He suggested this basis for restraint is part of the Family Court’s implied powers which flow from the establishment of the court as ‘a superior court of record’ pursuant to s 21(2) of the Family Law Act 1975 (Cth). Johnson J rejected the term “inherent jurisdiction” because the High Court of Australia had rejected the concept in DJL v The Central Authority[6] where His Honour in that case stated:

… the plurality (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) said as follows (at 240-241): The Family Court is … not a common law court as were the three common law courts at Westminster. Accordingly, it is “unable to draw upon the well of undefined powers” which were available to those courts as part of their ‘inherent jurisdiction’. The Family Court is a statutory court, being a federal court created by the Parliament within the meaning of s 71 of the Constitution. A court exercising jurisdiction or powers conferred by statute “has powers expressly or by implication conferred by the legislation which governs it” and “[t]his is a matter of statutory construction”; it also has “in addition such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred”. It would be inaccurate to use the term “inherent jurisdiction” here and the term should be avoided as an identification of the incidental and necessary power of a statutory court. Kirby J said as follows at page 268: … I agree with the joint reasons that it is desirable, in relation to courts created by statute, that the expression “inherent powers” should not be used.

This ground is regarded as exceptional and must be exercised with significant caution[7] and “due weight” must be applied to the public interest when there is deprivation to a litigant being deprived of their lawyer of choice without “good reason”.[8]


In State of Western Australia v Ward and Ors,[9] the Full Court of the Federal Court said:

... the requirements of natural justice do not involve an absolute right to the legal adviser of a party's choice. The instances in which courts have prevented chosen counsel or solicitors from acting have involved misconduct, potential use of confidential information, and a real risk of lack of objectivity and of conflict of interest and duty... The present case is only another example of situations in which the “integrity of the judicial process”, the “interests of justice” and the “need to preserve confidence in the judicial system”, to use some of the notions that lie behind the inherent jurisdiction to exclude counsel or solicitors, may override the public interest that a litigant be able to be represented by the lawyer of its choice. That public interest is “an important value”. ...it is a serious matter to prevent a party from retaining its chosen lawyer…

In Grattan v Grattan (No 3)[10] Cronin J discussed when this ground will be exercised. His Honour stated:

The power of the Court will be exercised where a fair minded reasonably informed member of the public would conclude that the proper administration of justice requires that the legal practitioner be prevented from acting for a client (see Spincode Pty v Look Software [2001] VSCA and Grimwade v Meagher [1995] 1 VR 446). The test involving the fictitional member of the public is an objective test based on what the general public could expect of the administration of justice (op cit Grimwade v Meagher). Whilst litigants should not be deprived of their choice of representation without good cause and the power of the Court should be exercised very cautiously, the public’s interest in the administration of justice must override that right of legal representation. It is not just the administration of justice but also the public’s confidence in the legal profession and if that is seen to be undermined the court should intervene.

The applicable test in relation to this ground is:[11]

“whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting – in the interests of the protection of the integrity of the judicial process and the due administration of justice (including the appearance of justice)"

The jurisdiction or implied incidental power of this ground is usually invoked in circumstances where there is potential that a legal practitioner may become a witness, and where the subject matter of litigation involves questions relating to the legal practitioner's conduct.[12]


In Holborow v Macdonald Rudder[13] and Bowen v Stott[14] it was held that it can be appropriate to invoke the jurisdiction or power where the practitioner might feel impelled to justify or defend his or her conduct in representing a client, or where the legal practitioner's credibility could be at stake. Such cases, however, relate to a practitioner being likely to imperil the discharge of duties to a Court.     

Another limb of this ground includes the misuse of information which does not fall within the global ambit of “confidential information”. That is, where the legal practitioner has learnt a great deal about a client’s personality, weaknesses, or strengths, honesty, dishonesty, fears and reactions and their approach to litigation (referred to as the “Getting to Know You Factors”).[15]


The Getting to Know You Factors are said to be a powerful weapon putting a practitioner, or a duly appointed counsel, in a position of “unfair superiority”.[16] Such matters usually involve a family solicitor or other closely related situation. It relates generally to built up knowledge over time against a party to a proceeding of the kind that has or could be consciously or unconsciously drawn upon.[17]


The Getting to Know You Factors must be seen in the broader context of the inherent jurisdiction or implied power of this ground for the Court to supervise and control a practitioner as an officer of the Court. Heerey J said in Mintel International Group Limited v Mintel (Australia) Pty Ltd[18] as relied on in Karapataki & Karapataki:[19]

Insofar as reliance is placed on the "getting to know you" principle, a moment's consideration of the way that litigation is conducted in Australia shows that this cannot be accepted too literally, especially in relation to counsel. There are many bodies such as Commonwealth and State government entities, banks, insurers, media companies and many others which are constantly engaged in litigation. Counsel retained to act on behalf of such bodies inevitably acquire information, not confidential information in the strict sense, but experience as to the corporate culture of the clients, their internal policies, the way they deal with litigation, tactics, the personalities of important decision-makers and so forth. I do not accept that general experience of that kind would impose what presumably on the respondent's argument would be lifetime restraints on counsel from acting against such a body. Indeed it is a feature of an independent Bar that counsel might appear one day on behalf of such a body and the next day against it. While perhaps strange to observers from countries where the legal profession is organised differently, this freedom enhances the independence of counsel and their capacity to give objective and sometimes unwelcome advice. The cab rank rule works both ways. The driver is obliged to accept the fare, but