Coomera Resort Pty Ltd v Bond [1995] QSC 339

. - 2tr11 Sc 9SfJs; -AJ. State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION DOWSETT J No 1321 of 1994 COOMERA RESORT PTY LTD ACN O5 0 911 1 5 6 and PAUL LEVINSON BOND BRISBANE .. DATE 29/11/95 JUDGMENT 1 l REVISED COPIES iSSUED I 1 State Re~crnnq Bureau IDate :l~' I · l?lI Plaintiff Defendant 4th Floor, The Law Courts, George Street, Brisbane. Q. 4000 Te/e(Jhone: (07) 227 4360. Facsimile: (07) 227 5532 -- 1 of 7 -- 291195 D.2 Turn 1 sdh (Dowsett J) HIS HONOUR: The applicant before me, Paul Levinson Bond, is the third defendant in proceedings presently pending in the Court in which the plaintiff is Coomera Resort Pty Ltd which is one of the respondents to the present application, or at least appears to oppose it. The proceedings in that action involve, among other issues, a claim by the plaintiff that the third defendant used the fourth defendant, Land Base Holdings Limited, for the purpose of deriving a secret commission in breach of a duty owed by the third defendant to the plaintiff. I need not presently say anything more about those proceedings. There have been previous proceedings in the Federal Court, not involving the transaction in issue in the current proceedings, but involving some of the same parties. That was an action in which a company called Sanwa Homes Inc and another company called Sanwa Homes Australia Pty Ltd sued a number of parties, including the present applicant/third defendant and a firm of solicitors Primrose, Couper, Cronin, Rudkin for damages and other relief. That action has been struck out as the result of an order for security for costs which was not complied with by the applicants. The order for security was obtained by Primrose, Couper, Cronin, Rudkin on whose behalf at that time the firm Clayton Utz was acting. Clayton Utz are the solicitors for the plaintiff in the present action in this Court. In the course of acting for Primrose, Couper, Cronin, Rudkin in the Federal Court proceedings, they received certain files - a quite substantial number of files it would seem - which were 2 JUDGMENT 10 20 30 40 50 60 -- 2 of 7 -- 291195 D.2 Turn 1 sdh (Dowsett J) presumably relevant or thought to be possibly relevant to the proceedings in that Court. The evidence indicates that the files were in the possession of Clayton Utz for an extended period of time, but the evidence also indicates that only minimal reference was had to those files and that no reference to the contents of the files was had by anybody who is presently concerned with the prosecution of the action in this Court. The present applicant/third defendant seeks to restrain Clayton Utz from continuing to act in this action. He says that they have had access to information which was confidential information derived by Primrose, Couper, Cronin, Rudkin in their capacity as his solicitor, for the purpose of giving him advice. He says that since they have become privy to that information, he has a fear that they will misuse that information for the purpose of advancing the cause of the plaintiff in the present proceedings at his expense. For present purposes, I am willing to assume that such a claim would be one which the Court might entertain and, as a matter of discretion, use as a base for prohibiting a solicitor from continuing to act in these proceedings. However, there are two obstacles which stand in the way of the applicant's success in this application. The first is his allegation that Primrose, Couper, Cronin, Rudkin acted for him. He certainly asserts as much, and he asserts that the documents which were provided to Clayton Utz contained documents which were his. It seems that Primrose, Couper, Cronin, Rudkin challenge that assertion because they have 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 7 -- 291195 D.2 Turn 1 sdh (Dowsett J) refused to give him access to the documents but, in any event, I was not persuaded by his evidence that such firm was acting on his behalf. He seemed to have considerable difficulty in distinguishing between retainers on behalf of his various companies and himself, but, even if that is not a fair criticism, the only conversations or dealings between them to which I have been taken in the course of the argument were when the applicant dealt with Mr Rudkin of Primrose, Couper, Cronin, Rudkin in the latter's capacity as both a director and solicitor for the Sanwa companies. He seemed, in evidence, to be very enthusiastic about asserting the relationship of solicitor and client, but I was by no means persuaded that the relationship existed or, at least, that it existed in any way relevant for present purposes. The second difficulty with the claim is that the applicant has been singularly unable to point to specific documents which were in the file supplied to Clayton Utz and which he claims relate to the relationship of solicitor and client which he asserts. He says that he is unable to do this because the file has been returned by Clayton Utz to Primrose, Couper, Cronin, Rudkin and the latter firm refuses him access to it. When pressed, counsel for the applicant has done as best he could, I am sure, in saying that the only documents which might be relevant for present purposes are memoranda by Mr Rudkin of advice given by him to Mr Bond and perhaps also instructions given for the purpose of obtaining that advice. I am willing to infer that the solicitor would probably keep such memoranda. 4 JUDGMENT 10 20 30 40 50 60 -- 4 of 7 -- 291195 D.2 Turn 1 sdh (Dowsett J) However, it is necessary, in order to be successful in these proceedings, that the applicant satisfy me on the balance of probabilities that such memoranda were handed over by Primrose, Couper, Cronin, Rudkin to Clayton Utz. The applicant seeks to do this by asserting that Mr Rudkin appears only to have maintained one filing system and that all of these affairs were rolled up together. I simply see no basis for such an inference in the evidence. The only justification is said to be that there is such a memorandum which surfaced in the Federal Court proceedings, apparently having been produced by the solicitors then acting on behalf of Sanwa. The memorandum concerns an approach by Mr Bond and another man called Deane to Mr Rudkin, but its contents suggest that Mr Rudkin was acting not in the capacity of solicitor to Mr Bond, but in his capacity as a director or solicitor of Sanwa. I can see no basis for inferring that Mr Rudkin disclosed to Clayton Utz any memoranda of advices or memoranda of instructions received by him or given by him in connection with any solicitor and client relationship between him and Mr Bond. I should say that there were other documents which the applicant asserted were confidential. However, Mr Fraser, who appears for Clayton Utz, prepared a comprehensive response with respect to virtually all categories of documents which could be identified from the material and, in argument before me today, Mr Douglas QC, who appears for Mr Bond, has accepted those explanations in respect of all categories of documents other than the one to which I have made specific reference, namely memoranda of instructions and advice prepared by Mr Rudkin. 5 JUDGMENT 10 20 30 40 50 60 -- 5 of 7 -- 291195 D.2 Turn 1 sdh (Dowsett J) In those circumstances, it seems clear that the application must fail and the motion is dismissed. HIS HONOUR: The affidavits held by the solicitors for Clayton Utz can be retained by the solicitor subject to the undertaking already given, and the ones on the Court file will be placed in an envelope and sealed and ordered not to be opened other than by order of a Judge. HIS HONOUR: Application is made on behalf of the solicitors Clayton Utz for an order for costs on an indemnity basis. They say, and there may well be substance in this, that the application does not seem to have been properly motivated. Some of the circumstances surrounding the way it has been conducted, it is suggested, would justify the inference that it was being done in such a way as to cause maximum inconvenience and embarrassment to the firm. That may or may not be so, but I am not persuaded that the proceedings were motivated other than by a genuine, if misplaced, perception by Mr Bond that his position was likely to be unfairly compromised by the continued involvement of Clayton Utz in the matter. The possibility of conflict is often a very real one, and the issue has become much more significant in recent years as the result of amalgamation of many of the firms. Conflict and the 6 JUDGMENT 10 20 30 40 50 60 -- 6 of 7 -- 291195 D.2 Turn 1 sdh (Dowsett J) appearance of conflict must be avoided at all costs in litigation and, where there is a reasonable basis for a suspicion, the Court will not look too closely at its motivation. However, in the present case, I have concluded that there is no basis for such suspicion. Nonetheless, I am not willing to penalise the applicant by making other than the usual order for costs. In the circumstances, I will order that the applicant/third defendant pay the costs of the plaintiff and of Clayton Utz of and incidental to those proceedings. The order is to include reserved costs. 7 JUDGMENT 10 20 30 40 50 60 -- 7 of 7 --