Marlow Properties Pty Ltd v McDonald
[2007] QDC 65
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- Unreported Judgment
- Marlow Properties Pty Ltd v McDonald[2007] QDC 65
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Marlow Properties Pty Ltd v McDonald[2007] QDC 65
Marlow Properties Pty Ltd v McDonald[2007] QDC 65
DISTRICT COURT OF QUEENSLAND
CITATION: | Marlow Properties Pty Ltd v McDonald & Anor [2007] QDC 065 |
PARTIES: | MARLOW PROPERTIES PTY LTD ACN 104 862 311 as trustee for The Marlow Family Trust Plaintiff V KEITH JOHN MCDONALD and LOLA GERTRUDE MCDONALD Defendants |
FILE NO/S: | D1201/2005 |
DIVISION: | Civil |
PROCEEDING: | Applications |
ORIGINATING COURT: | District Court of Queensland, Maroochydore |
DELIVERED ON: | 18 April 2007 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 26 March 2007 |
JUDGE: | Alan Wilson SC, DCJ |
ORDER: | 1 That the contents of an envelope sealed by order of the Court on 26 March 2007 be returned to the defendants; 2 the defendants’ application for further and better disclosure by the plaintiff is dismissed; 3 the plaintiff’s application for disclosure of documents for which privilege has been claimed by the defendants is also dismissed; and 4 the defendants’ application for an injunction restraining the plaintiff’s solicitors from acting in this matter is also dismissed. |
CATCHWORDS: | PRACTICE AND PROCEDURE – DISCLOSURE – CLAIM OF PRIVILEGE – whether claim of privilege properly made LEGAL REPRESENTATIVES – RESTRAINING SOLICITORS FROM ACTING – whether plaintiff’s solicitors should be restrained from acting for plaintiff – nature of discretion – relevant factors Uniform Civil Procedure Rules, rr 223, 443, 444 Cases considered: Australian Commercial Research & Development Pty Ltd v Hampson [1991] 1 Qd R 508 Grant v Downs (1976) 135 CLR 674 Grimwade v Meagher [1995] 1 VR 446 Kallinicos v Hunt & Ors [2005] NSWSC 1181 Millhouse IAG Pty Ltd v Environautics Pty Ltd [2000] QDC 196 Nye v State of New South Wales [2002] NSWSC 1267 Potts v Jones Mitchell & Anor [2004] QSC 048 Tricontinental Corporation v Holding Redlich, unreported (Supreme Court of Victoria, Mandie J, 22 December 1994) |
COUNSEL: | M Steele for plaintiff A H Sinclair for defendants |
SOLICITORS: | Sykes Pearson Miller for plaintiff Kent Law Firm for defendants |
- [1]This action involves a claim by the plaintiff for damages for fraudulent misrepresentation and/or negligent misstatement, arising out of a contract for the sale of a commercial property owned by the defendants. The critical matter in dispute concerns allegations that the defendants represented to the plaintiff that an option to renew, contained in a lease over the property, had not been exercised by the tenant – when, the plaintiff now alleges, it had been. The defendant denies it made that representation.
- [2]Each party has sought interlocutory relief. The plaintiff seeks disclosure of documents which the defendants claim are privileged; the defendants seek further and better disclosure from the plaintiff and, also, an injunction restraining its lawyers from acting for it. The plaintiff’s amended application filed 22 February 2007 also sought an order that the defendants deliver an amended defence but that has been done, pursuant to an order made, by consent, by Dodds DCJ on 2 March 2007.
Defendant’s Application for Further and Better Disclosure by the Plaintiff
- [3]The plaintiff’s list of documents was delivered in December 2006. On 1 March 2007 the defendants’ solicitor wrote suggesting more documents should be disclosed. On 20 March 2007 the defendants served a notice under r 444 alleging the plaintiff had not complied with its disclosure obligations and nominating 4 pm on Friday, 23 March 2007 as the time for compliance. Notwithstanding that deadline, the defendants filed this application on 22 March 2007.
- [4]It does not appear, however, that Ch 11 Pt 8 of the UCPR applies to an application for further and better disclosure: r 443. But, even if that view is incorrect, this is a case in which the court would nevertheless entertain the application because it appears that an issue between the parties will not be resolved by any other means[1].
- [5]The duty of disclosure extends to each document in the possession or under the control of a party, which is directly relevant to an allegation in issue in the pleadings. On the morning of the hearing of these applications the plaintiff’s solicitor filed an affidavit conclusively establishing that his client’s disclosure complied with the rule.
- [6]It was argued in the alternative, for the defendants, that the circumstances warranted an order under r 223(2). An order of this kind would require the plaintiff to file and serve an affidavit stating that a specified document (or class of documents) does not exist or has never existed, or touching the circumstances in which a specified document (or class of documents) ceased to exist or passed out of the possession or control of the first party. Under r 223(4), however, orders of that kind may only be made if there are special circumstances and the interests of justice require it, or if it appears there is an objective likelihood that the duty to disclose has not been complied with, or a specified document or class of documents exists or existed and has passed out of the possession or control of a party.
- [7]Notwithstanding the best efforts of Counsel for the defendants, none of these things have been satisfactorily established. It is possible some relevant documents might be in the hands of non-parties, but disclosure of them lies via another remedy. This application is, then, dismissed.
Plaintiff’s claim for disclosure of documents for which the defendants claim privilege
- [8]The defendants claim that the first eight documents in Pt 2 of Sch 1 of their list of documents are privileged on the basis of “… legal professional privilege in contemplation of legal proceedings”. That claim has since been expanded to include, for most of the documents, a claim that they were made in the course of giving legal advice. The documents are dated between 16 March and 18 August 2004, 6-12 months before the plaintiff began this action.
- [9]In the list of documents the eight documents are recorded variously as letters, diary notes and a statement of one of the defendants. Mr Richardson, the solicitor who acted for the defendants in the transaction which has given rise to these proceedings, has sworn an affidavit particularising the claim for privilege by reference to the customary grounds. The pleadings, and a welter of correspondence exhibited to various affidavits filed in this matter, make it tolerably clear that the threat of litigation arose very early and was at all material times “likely or reasonably probable”[2]. That alone is sufficient to found a legitimate claim.
- [10]Copies of the disputed documents were provided and placed in a sealed envelope. I was pressed, by Counsel for the defendants, to deal with the privilege claim without recourse to the documents themselves, notwithstanding that is an appropriate course in some cases[3]. Because the claim has also been pressed on the basis the documents were made in the course of giving legal advice it seemed appropriate, nevertheless, to inspect them. I am satisfied in the result that they are documents of that kind and will order that the contents of the envelope be returned to the defendants’ solicitor.
- [11]This application will, then, be dismissed.
Application to restrain plaintiff’s solicitors from representing the plaintiff
- [12]The plaintiff’s present solicitors acted for the tenant at the time the earlier mentioned dispute arose, i.e. around the time of settlement of the contract which has given rise to these proceedings. They also acted for the tenant when there was a transfer of the lease. The plaintiff claims losses referable to the terms of that lease, sought as damages.
- [13]It has been said that the courts should take a cautious approach to allowing a legal practitioner to act in a matter where confidential information has been communicated which is now relevant to litigation, and that information is still available to the solicitor[4]. The submission from the defendants is that there is a discernable risk that “some residual memory may be triggered” in the plaintiff’s solicitors, or one of them might become a necessary witness in respect of the issues central to the present action.
- [14]It was also submitted that the court should restrain legal practitioners from acting if there is a risk that a fair minded, reasonably informed member of the public would conclude that the proper administration of justice required that the lawyer be so prevented[5].
- [15]It is, of course, a serious matter to prevent a party from retaining the legal representative of its choice, particularly upon the application, not of a former client, but of an adverse party[6]. The defendants’ complaint is presented in general terms. It is not suggested the plaintiff has any information confidential to the defendants in its possession. Nor has there been any suggestion that any particular aspect of the litigation to date plainly exposes the plaintiff’s solicitors to the possibility of having to give evidence[7]. The defendants’ concerns and their submission are, then, of a fairly nebulous kind (but, in light of the nature of the action, unsurprising).
- [16]The cases touching applications of this kind were helpfully reviewed by McMurdo J in Potts v Mitchell (supra) at [16]-[21]. I respectfully adopt his Honour’s conclusion at [18] that the court will only intervene when there is a real risk of the use of information which is confidential to the former client, or a real possibility that confidential information has come or will come into the possession of the new client. There is presently no evidence pointing to that conclusion, and nothing about the circumstances of the case suggests that risks of that kind have become palpable.
- [17]McMurdo J went on to consider a third basis for the exercise of the jurisdiction, discussed in the passage in the judgment of Mandie J in Grimwade v Meagher [1995] 1 VR 446, at 452:
In my view it cannot be doubted that this court likewise has an inherent jurisdiction to ensure the due administration of justice and to protect the integrity of the judicial process and as part of that jurisdiction, in an appropriate case, to prevent a member of counsel appearing for a particular party in order that justice should not only be done but manifestly and undoubtedly be seen to be done. The objective test to be applied in the context of this case is whether a fair minded reasonably informed member of the public would conclude that the proper administration of justice required that counsel be so prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause.
- [18]The fair minded, and reasonably informed member of the public here would consider that the critical aspect of this case is the plaintiff’s allegation that the defendant represented to it that the option to renew had not been exercised, when in fact it had been; and, the defendants’ denial that that representation was made. While the tenants’ conduct is an element of that dispute, it remains peripheral to it: it is the conduct of the plaintiff and the defendants and those purporting to represent them at material times which is central.
- [19]In the absence of material suggesting a risk that some breach of confidence or perceptible unfairness could arise as a consequence of the involvement of the plaintiff’s solicitors or any indication previous instructions from the tenant means that events might transpire which have the potential to embarrass the plaintiff’s representatives, the application is misconceived and, for these reasons, should be dismissed.
- [20]The parties may have time to deliver written submissions about costs.
Footnotes
[1]Millhouse IAG Pty Ltd v Environautics Pty Ltd [2000] QDC 196
[2]Nye v State of New South Wales [2002] NSWSC 1267
[3]Grant v Downs (1976) 135 CLR 674, at 689
[4]Australian Commercial Research & Development Pty Ltd v Hampson [1991] 1 Qd R 508, at 515
[5]Potts v Jones Mitchell & Anor [2004] QSC 048
[6]Tricontinental Corporation v Holding Redlich, unreported (Supreme Court of Victoria, Mandie J, 22 December 1994)
[7]See, e.g., Kallinicos v Hunt & Ors [2005] NSWSC 1181