FEDERAL COURT OF AUSTRALIA PhotoCure ASA v Queen's University at Kingston [2002] FCA 905 PRACTICE AND PROCEDURE – where patent attorney firm and law firm part of national practice – where law firm sought to act for client in manner potentially adverse to interests of former client of patent attorney firm – where patent attorney firm in possession of former client's confidential information – whether real possibility or risk of misuse of confidential information – efficacy of Chinese walls to protect confidential information – where all reasonable or effective steps taken to ensure no disclosure of confidential information. Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, considered Carindale Country Club Estate Pty Limited v Astill (1993) 42 FCR 307, applied Belan v Casey [2002] NSWSC 58, applied Waiviata Pty Ltd v New Millenium Publications Pty Ltd [2002] FCA 98, referred to Bureau Interprofessionnel Des Vins De Bourgogne v Red Earth Nominees Pty Ltd (t/as Taltarni Vineyards) [2002] FCA 588, applied Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248, considered MacDonald Estate v Martin 77 DLR (4th) 249, referred to D & J Constructions Pty Ltd v Head (t/as Clayton Utz) (1987) 9 NSWLR 118, considered Mallesons Stephen Jaques v KPMG Peat Marwick (1991) 4 WAR 357, referred to Newman v Phillips Fox (1999) 21 WAR 309, distinguished PHOTOCURE ASA v QUEEN'S UNIVERSITY AT KINGSTON V 214 of 2002 GOLDBERG J 22 JULY 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 214 of 2002 BETWEEN: PHOTOCURE ASA [967 598 593] Applicant AND: QUEEN'S UNIVERSITY AT KINGSTON Respondent JUDGE: GOLDBERG J DATE OF ORDER: 22 JULY 2002 WHERE MADE: MELBOURNE UPON Freehills by its counsel undertaking to the Court: A. that it will procure any principal, solicitor, patent attorney or paralegal of Freehills who is involved in acting for or representing Dusa Pharmaceuticals Inc or the respondent or any other party in or in relation to this proceeding or Australian Patent No 624985, to sign an undertaking to the Court and to the applicant in the form annexed as Schedule "A" to this order before so acting or undertaking such representation or within 24 hours of the making of this order, whichever is the later; and B. that it will procure Mr Paul Jones, Mr James Cherry, Ms Joanna Mulrooney and Ms Anne Gsodam to sign an undertaking to the Court and to the applicant in the form annexed as Schedule "B" to this order within 7 days of the date of this order. THE COURT ORDERS THAT: 1. The notice of motion filed by the applicant on 30 May 2002 is dismissed. 2. The applicant pay fifty per cent of the costs of Freehills of and incidental to the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules SCHEDULE A "I, , of , [occupation], undertake to the Federal Court of Australia and to PhotoCure ASA (PhotoCure) as follows: 1 not to discuss, or seek to discuss, with Paul Jones, James Cherry, Anne Gsodam, Joanna Mulrooney, David Opperman, Jennifer Galatas or Gavin Bell, any matter relating to: (a) Federal Court proceeding No V 214 of 2002 (Proceeding); (b) any advice previously provided by Freehills Patent Attorneys (FPA) or Freehills Carter Smith Beadle (FCSB) to PhotoCure in relation to Australian Patent No 624985 (Patent); or (c) any information obtained by FPA or FCSB, from PhotoCure or any person on its behalf in relation to the Patent; 2 not to seek or obtain access to any files or documents, including electronic files and documents, in the possession or custody of FCSB or Freehills relating to advice previously provided to PhotoCure in relation to the Patent; 3 not to work from any floor in the Melbourne office of Freehills on which FCSB is located in connection with the Proceeding; 4 not to store any hard copy documents drafted or obtained by me, or under my control, in relation to the Proceeding, on any floor in the Melbourne office of Freehills on which FCSB is located; 5 to restrict access to all documents created by me or at my direction including those documents stored electronically so as to permit access only to those persons in Freehills undertaking work in relation to the Proceeding. ………………………………… Signed Date:" SCHEDULE B "I, , Patent Attorney, undertake to the Federal Court of Australia and to PhotoCure ASA (PhotoCure) as follows: 1 that I will not seek or obtain access to any files or documents, including electronic files and documents, in the possession or custody of Freehills Carter Smith Beadle (FCSB) or Freehills relating to PhotoCure or Australian Patent No 624985 (Patent). 2 that in the Federal Court Proceeding No V 214 of 2002 (Proceeding) and in relation to the Patent I will not act for or assist Queen's University at Kingston, any entity whose name includes the word "Dusa" or any other party with interests in the Proceeding adverse to those of PhotoCure, without the leave of the Court. 3 that without such leave I will not discuss, or seek to discuss, with Anthony Muratore, Jane Hogan, Rebekah Gay, David Opperman, Jennifer Galatas or Gavin Bell, or any other person involved as a solicitor in the Proceeding, any matter relating to: (a) the Proceeding; (b) any advice previously provided by Freehills Patent Attorneys or FCSB to PhotoCure in relation to the Patent; (c) any information obtained by Freehills Patent Attorneys or FCSB from PhotoCure or any person on its behalf in relation to the Patent. ………………………………… Signed Date:" IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 214 of 2002 BETWEEN: PHOTOCURE ASA [967 598 593] Applicant AND: QUEEN'S UNIVERSITY AT KINGSTON Respondent JUDGE: GOLDBERG J DATE: 22 JULY 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction 1 On 12 April 2002 the applicant ("PhotoCure") filed an application seeking a declaration that Australian Patent No 624985 ("the patent") was invalid and that it be revoked. The proceeding was instituted against the respondent who is the registered proprietor of the patent. The particulars of invalidity filed with the application set out grounds of lack of novelty, lack of inventive step, lack of sufficiency and best method, lack of definition and lack of fair basis. The first directions hearing was set down for 5 June 2002. 2 On 30 May 2002 PhotoCure filed a notice of motion seeking an order restraining the firm of solicitors Freehills "from acting against the interests of the Applicant in or in relation to the proceeding or otherwise in relation to Australian Patent No 624985". PhotoCure's motion seeking to restrain Freehills from acting in the proceeding comes about because the firm through its Sydney office is acting for Dusa Pharmaceuticals Inc ("Dusa"), which is a non‑exclusive licensee of the patent pursuant to a licence agreement dated 11 March 1998. 3 At the directions hearing on 5 June 2002 appearances were announced on behalf of PhotoCure, Freehills and Dusa. At that point of time the application had not been formally served on the respondent, a Canadian company, and PhotoCure had been unable to arrange for service to be accepted on behalf of the respondent. Accordingly, no appearance had been filed for or on behalf of the respondent. 4 The solicitor who appeared for Dusa said that Dusa wished to seek leave to be joined as a respondent in the proceeding but had not yet filed any application to be joined. The hearing was adjourned to 28 June 2002. On 6 June 2002 Dusa filed a motion seeking to be joined as a respondent to the proceeding. 5 On 28 June 2002 I ordered that personal service of the application, statement of claim and particulars of invalidity be deemed to have occurred on 12 April 2002 and ordered the time within which the respondent file and serve any appearance be extended to 19 July 2002. 6 At the hearing on 28 June 2002 counsel for Dusa sought an adjournment of Dusa's application to be joined as a respondent. Its application for joinder had been opposed by PhotoCure, inter alia, having regard to its status as a sub‑licensee of the patent and it therefore wished to take an assignment of the patent in Australia. The motion for joinder was adjourned to a date to be fixed. 7 There was therefore left outstanding PhotoCure's motion seeking an order restraining Freehills from acting against the interests of PhotoCure in or in relation to the proceeding. Although Dusa is not yet a party to the proceeding, it is appropriate to determine the motion as it is apparent from the material filed in Court that Freehills has been retained by Dusa in relation to the patent and the proceeding for some months. Background 8 The field of invention covered by the patent relates to: "the detection and treatment of certain tissue abnormalities (both cancerous and non-malignant) by induced fluorescence and photochemotherapy respectively." Photochemotherapy is a form of treatment which involves the application of a light source within a certain spectrum which photoactivates the tissue in which a photoactivatable drug has been implanted or induced to grow. The specification states: "The patient is given a photo-activatable drug that has some degree of specificity for the tissue being treated. A tissue volume that includes the target tissue is then exposed to photoactivating light so as to destroy the target tissue while causing only mild and reversible damage to the other tissues in the same treatment volume." 9 On or about 30 April 2002 PhotoCure's solicitors became aware that Mr Anthony Muratore from Freehills in Sydney had approached certain doctors to discuss their availability to act as expert witnesses in a matter involving a patent. Mr Muratore was acting for Dusa. Dusa had published a press release on 15 April 2002 in which it stated that it had been notified of the proceeding brought by PhotoCure in Australia. 10 PhotoCure was concerned about Freehills acting for Dusa because in November 1999 a firm of United Kingdom Patent Attorneys, Frank B Dehn & Co, had sought advice from the firm in Victoria then known as Freehills Patent Attorneys on behalf of PhotoCure in relation to issues touching and concerning the patent. Freehills Patent Attorneys in Victoria later became part of Freehills Carter Smith Beadle ("FCSB"). Relationship between the firm of patent attorneys and the firm of solicitors 11 Although FCSB and Freehills are two separate firms they have a number of common partners. In particular, some of the persons who were involved in giving advice to PhotoCure by Freehills Patent Attorneys in Victoria in November 1999 through to May 2000 are described on the Freehills website as being members of the "Freehills intellectual property team". According to the website, all persons listed as members of the FCSB team are listed as being on the "Freehills intellectual property team". This includes Mr Paul Jones and Mr James Cherry who were involved in the advice given to PhotoCure. Mr Muratore is listed on the Freehills website as the practice group leader for "intellectual property/Freehills Carter Smith Beadle (formerly Freehills Patent Attorneys)". According to the Freehills website, the two firms work closely alongside each other on the same matters. 12 Business name and company searches undertaken by PhotoCure's solicitors disclosed the following: (a) Mr Cherry and Mr Greg Noonan are both partners of Freehills and FCSB (and its predecessor Freehills Patent Attorneys); (b) Mr Cherry and Mr Noonan are "persons carrying on business" for Freehills; (c) A business name extract for FCSB shows that Mr Jones, Mr Cherry, Mr Noonan and Illawong Woods Pty Ltd are, inter alia, persons carrying on business for FCSB. The current directors of Illawong Woods Pty Ltd are persons shown as carrying on business for Freehills. 13 The FCSB website which is included in the Freehills website, states, inter alia: "We [FCSB] operate in close association with Freehills, one of Australia's leading law firms. Working together with its expert team of intellectual property lawyers, we can assist you with a full range of intellectual property services. … Our patent attorneys work closely with their colleagues in the associated legal practice of Freehills to provide a seamless transition to legal services, including … conflict resolution and mediation, and intellectual property litigation." 14 There has been a close affiliation between the Victorian Freehills Patent Attorney firm and the Freehills legal firm under their various permutations. There have been similar close affiliations between the Sydney Freehills Patent Attorney firm and the Freehills legal firm under their various permutations. Since the national firm Freehills was established on 1 July 2000 there has been a close affiliation between FCSB and Freehills both within Victoria and also as between Victoria and New South Wales. Since September 2001 the practice management of FCSB and the practice management of the intellectual property law group of Freehills (which was separate prior to that time) have been combined. Mr Muratore became the national practice group head of the combined national group and he and Mr Jones and others formed a management team for the national management group. 15 Mr Muratore described in some detail the organisational structure of FCSB and Freehills and their predecessor firms. It is not necessary to analyse that organisational structure in any detail. It is sufficient for present purposes to understand that the lawyers within Freehills are organised into national practice groups and that until September 2001 the practice management of the two practice groups FCSB and the intellectual property group of Freehills was separate. There is now a close level of co-operation between FCSB and the lawyers in the Freehills intellectual property group. For present purposes I am satisfied that I should treat Freehills, the firm of lawyers, and FCSB, the firm of patent attorneys, as parts of the one firm. The dispute 16 Shortly after PhotoCure's solicitors became aware of Mr Muratore's actions in approaching doctors, they wrote a letter to Freehills dated 6 May 2002, marked for the attention of Mr Muratore, informing them that Mr Jones, "a partner in your integrated patent attorney firm", had provided substantial advice to PhotoCure on the patent. The letter sought Freehills' confirmation that it would not act for any party that took an adverse position in relation to PhotoCure in relation to the patent. The letter noted that it had recently come to PhotoCure's attention that Freehills was presently contacting Australian dermatologists to discuss their retention on behalf of Dusa in a patent matter and referred to this proceeding. 17 On 8 May 2002 the Chief Operating Officer of Freehills responded to PhotoCure's solicitors' letter confirming that Freehills acted for Dusa and had received instructions from it in relation to this proceeding. The letter said that Mr Muratore and the solicitors working with him had had no knowledge that Mr Jones had provided advice of any kind to PhotoCure and that they had no knowledge of any information that might have been provided to Mr Jones by PhotoCure. The letter said that Mr Muratore had a conversation with Mr Jones in which Mr Muratore sought confirmation of the facts in PhotoCure's solicitors' letter and that the conversation could be summarised as follows: "All of this occurred some three years ago. Instructions were received from a London firm of patent attorneys, Frank B Dehn, on behalf of PhotoCure, to give certain advice. They were interested in infringement issues. Certain advice was given. The file then seemed to be taken away from the London firm and our retainer was terminated." The letter stated that Mr Muratore and each of the solicitors working with him was willing to provide affidavits confirming these matters. The Chief Operating Officer said that he had instructed Mr Jones to isolate any files and documents which he may have in relation to any advice which he had provided to PhotoCure and that those documents would remain isolated. 18 Thereafter correspondence passed between PhotoCure's solicitors and Freehills in which PhotoCure rejected Freehills' proposal and asked it to cease acting for Dusa. Freehills refused to do so. Freehills took the view that there was no risk that there had been disclosure of any confidential information which may have been provided by PhotoCure to Mr Jones and it was satisfied that there was no risk of any future disclosure having regard to the manner in which the file had been isolated. 19 The correspondence between the solicitors concluded by Freehills offering undertakings by Mr Muratore and any person working on the matter with him that they would not discuss with Mr Jones any matter relating to the revocation proceeding, any advice previously provided by Mr Jones to PhotoCure in relation to the patent, or any matter relating to any information obtained by Mr Jones, whether or not confidential, in relation to PhotoCure or the patent. The form of undertaking provided by Freehills stated that the signatory to it would not seek, or obtain, access to any files held by Mr Jones or FCSB relating to PhotoCure or the patent. The information claimed to be confidential 20 PhotoCure placed before the Court in a confidential exhibit the correspondence, instructions and advice passing between Frank B Dehn & Co and Freehills Patent Attorneys (and later FCSB) in Melbourne in and between November 1999 and May 2000. The exhibit included letters and advice to PhotoCure. The nature of the instructions given to, and the advice given by, Freehills Patent Attorneys and FCSB, and the particular subject matter with which they deal are such as to constitute confidential information (for the reasons to which I shall refer) which it is not appropriate to disclose in these reasons for judgment. The contents of the correspondence and the advice were made available only to counsel for Freehills upon their undertaking not to disclose any of the contents to their client. 21 Counsel for Freehills submitted that there was nothing in the correspondence or the advice which was properly characterised as confidential information or which could not be deduced from information and material in the public domain. I reject that submission. In my opinion, the material contained in the confidential exhibit, namely the correspondence and the advice, is properly characterised as confidential information and is entitled to the usual protection given to information and communications passing between lawyer and client in relation to the seeking and giving of legal advice. Section 200(2) of the Patents Act 1990 (Cth) extends the protection of legal professional privilege to communications between a registered patent attorney and the attorney's client in relation to intellectual property matters. 22 I consider it is appropriate to characterise as confidential the nature of the instructions given by Frank B Dehn & Co to Mr Jones. I consider, at the least, that knowledge of a number of the matters raised in the correspondence and advice would be of advantage to Dusa or any other party whose interests were adverse to PhotoCure in the proceeding if Freehills were to act for them in relation to the general conduct and progress of the proceeding as well as in relation to the assessment of the strength or weakness of PhotoCure's case. 23 There are also technical matters disclosed by Frank B Dehn & Co to Mr Jones which I consider bear upon issues which either will, or may, arise in this proceeding and which will also arise in any infringement proceeding. 24 PhotoCure's solicitors prepared a confidential summary of the confidential information contained in the correspondence included in the PhotoCure file which, on the present state of the evidence, is not in the public domain. I refer, in particular, to the information set out in the first paragraph of the summary. In the light of the evidence that that information is not in the public domain, I am bound to find that the information is confidential to PhotoCure. 25 There are a number of passages in the correspondence between Frank B Dehn & Co and Mr Jones' firm which on their face refer to, and raise, issues which I consider to be confidential to PhotoCure either because they relate to the properties of certain products or because the issues raised relate to, or bear upon, strategies to be considered in relation to the patent and any proceedings in relation to it. I refer for example, to: · the letter dated 9 November 1999, p 2, pars 2, 3 and 4; · the letter dated 17 November 1999, pars 2 and 3; · the letter dated 26 November 1999, par 4; · the letter dated 10 December 1999, pars 1.1, 2.1, 2.2; · the email dated 17 April 2000 which records a conversation with Mr Jones; · the letter to PhotoCure dated 28 April 2000, pars 1.1, 2.1.1; · the letter to PhotoCure dated 19 May 2000, pars 1.1, 2.1. 26 It is sufficient for present purposes to find that this is information which is confidential to PhotoCure and which is relevant to the issues to be raised in the proceeding in relation to the patent. 27 Freehills submitted that although information communicated from Mr Jones to PhotoCure and its patent attorneys may be confidential, it was not relevant to the proceeding as it was Mr Jones' view of the law or his advice on a legal issue. It was said that if Mr Jones' advice on an issue was disclosed to Dusa, it would not matter if Dusa knew that a view had been expressed one way or the other on the topic and that it would not affect the approach that Dusa would take to any issues that arose in the present proceeding. I do not accept this submission. 28 There are issues raised by Freehills Patent Attorneys which, although not confidential from a technical point of view, are confidential in the sense that they deal with issues, tactics and strategies which might arise in the course of this proceeding or subject matter which may be relevant to those issues which might arise. I refer, for example, to par 1 of Freehill's Patent Attorney's letter of 10 December 1999. I consider that these issues are relevant to the manner in which the proceeding might be conducted and knowledge of them would give Dusa a tactical advantage. Persons who have had access to the PhotoCure file 29 Although Mr Jones was the principal person from Freehills Patent Attorneys handling the matter for PhotoCure, it is apparent that other persons were involved. For example, on 21 January 2000 Freehills Patent Attorneys sent a letter to Frank B Dehn & Co responding to a number of issues raised by them. The letter was signed by Mr Cherry for Mr Jones. 30 Freehills led evidence as to the extent to which PhotoCure's file with Freehills Patent Attorneys in Victoria which had been opened by Mr Jones ("the PhotoCure file") was accessible electronically to other persons in Freehills Patent Attorneys, FCSB or Freehills. In summary, the evidence disclosed the following. From November 1999 until March 2001 documents created by Freehills Patent Attorneys in Victoria were not accessible by Freehills Patent Attorneys in Sydney or Freehills in Sydney. They could only be accessed as a result of a specific request, or by a visit to Melbourne, or by a request that a computer link be established. There was no evidence that any of these circumstances had occurred. From March 2001 to August 2001 Freehills introduced a new computer system known as Freehills Integrated Documents Organiser ("FIDO") which allocated access to documents based on location so that, generally, a person located in Sydney would only have access to those documents created within the Sydney office. However, not all documents were transferred from the previous system to FIDO. On 8 May 2002 a search across the Melbourne FIDO system for FIDO documents in relation to the PhotoCure file did not disclose any FIDO documents. On 21 June 2002 a search across the Sydney FIDO system for FIDO documents in relation to the PhotoCure file disclosed that no documents existed in FIDO. The evidence was that no person in Sydney or Melbourne could at any time have accessed any documents in relation to the PhotoCure file through the FIDO computer system. 31 On 8 May 2002 the PhotoCure file was locked in a cupboard and only Mr Jones had access to the key. He did not thereafter provide the key to any person. Since 4 June 2002 the PhotoCure file has been secured so that only one Freehills' person, Mr David Opperman, who is not involved in any way with the current proceeding or application, has access to it. 32 There are a number of persons in the Freehills intellectual property group who are working with Mr Muratore in relation to the Dusa matter. None of them is aware of the nature of any advice that may have been provided by Mr Jones to PhotoCure or of any information that may have been provided to Mr Jones by PhotoCure. None of them has sought any access to the PhotoCure file opened by Mr Jones and they are prepared to give an undertaking to the Court and to PhotoCure that they will not discuss with relevant persons such as Mr Jones, Mr Cherry and Mr Opperman this proceeding, any advice previously provided by Freehills Patent Attorneys or FCSB to PhotoCure in relation to the patent or any information obtained by Freehills Patent Attorneys or FCSB from PhotoCure in relation to the patent. They are also prepared to undertake not to seek, or obtain, any access to any relevant files relating to advice previously provided to PhotoCure. 33 The PhotoCure file showed that Mr Jones received the initial instructions from Frank B Dehn & Co and that Mr Cherry and Dr John Davy were also involved in the file as were others to a very small extent. Dr Davy retired from the Freehills Patent partnership on 31 December 1999 and remained a consultant for a short time thereafter. 34 Mr Jones has practised as a patent attorney since January 1981. From March 1998 to 30 April 2000 he was a partner of the Victorian firm Freehills Patent Attorneys. From 1 May 2000, following the merger of that firm with the national patent attorney firm Carter Smith & Beadle, he became a partner of the national patent attorney firm FCSB. From March 1998 he has worked out of the Melbourne offices of the Victorian firm Freehill Hollingdale & Page and since 1 July 2000 out of the Melbourne offices of the national law firm Freehills. 35 Although Mr Muratore and Mr Jones have had more frequent contact since September 2001 when the national practice groups were formalised, Mr Muratore and Mr Jones are not currently, and have never been, partners of the same patent attorney, law or other firm and are not currently working together, and have not at any previous time worked together to any significant extent, on behalf of any common client. 36 The PhotoCure file was tendered in Court as a confidential exhibit. That file included an FCSB "General File Instruction Sheet: Inproma Entry". That sheet showed that an entry had been made on the Inproma database on 6 March 2002. I was initially concerned that the entry may have recorded an access or reference to the file on 6 March 2002 which had relevance to the present motion. Freehills was given the opportunity to investigate and explain the document and the entry recorded in it. The explanation has no relevance or significance in relation to the issues presently before me and does not disclose that there was any access or reference to the contents of the file on 6 March 2002. The file should have been entered as a matter of course on the Inproma database as a result of a requirement in September 2001 that all FCSB general files be entered on the database in accordance with the instruction sheet. Since September 2001 Mr Jones' secretary had been identifying general files which had not been entered on the data base and in February or early March 2002 she examined the contents of a cupboard in Mr Jones' office, discovered a number of files which included the PhotoCure file and she accordingly filled out the instruction sheet and arranged for another employee to enter the file on the Inproma data base. The retainer of Freehills by Dusa 37 Early in February 2002 Mr Muratore was retained by Dusa to advise it in relation to the patent. 38 On 27 March 2002 FCSB wrote to Frank B Dehn & Co in relation to Australian patent application No 31771/00 entitled "Method of expressing antigens on the surface of antigen presenting cells by photochemical internalisation". The letter stated: "One of my partners has advised that a conflict of interest may arise that could preclude us from continuing to act in respect of the above matter. Therefore, we would recommend that this matter be transferred to another Australian patent attorney before any substantive actions occur on this application. Please advise whether you would like us to recommend another Australian attorney to receive this matter. Otherwise, we look forward to receiving your advice as to where the application should be transferred." The letter was signed by Mr Gary Nock, a partner of FCSB. The patent application referred to in the letter is not related in any way to the patent the subject of the present proceeding. 39 That letter came about in the following circumstances. In March 2002 Ms Rebekah Gay, a solicitor working with Mr Muratore, told Mr Muratore that the conflict searches on the Freehills' conflict system may not include those matters listed on the FCSB database called "Inproma". Mr Muratore had a search undertaken of that database which disclosed that Mr Nock had opened a file which listed PhotoCure as the client. He told Mr Nock that Freehills were doing work for Dusa that may lead to a patent infringement action against PhotoCure and that he did not think it would be wise to continue to act for PhotoCure whilst Mr Muratore was acting for Dusa. 40 In or about April 2002 Mr Muratore was advised by Dusa that PhotoCure had commenced the present proceeding and he was instructed to act in relation to it. When Mr Muratore received PhotoCure's solicitors' letter of 6 May 2002 he telephoned Mr Jones, read the letter to him and asked him whether it meant anything to him. Mr Muratore's version of what occurred varies from Mr Jones' version but in substance the versions do not conflict. According to Mr Muratore, Mr Jones replied that the letter did not mean anything to him. When Mr Muratore asked Mr Jones whether PhotoCure meant anything to him Mr Jones said that there might be a problem and that he would call his secretary and contact Mr Muratore again. Mr Jones called Mr Muratore a short time later and told him that his secretary had looked at the file, that the work had occurred some three years ago and that instructions were received from Frank B Dehn & Co on behalf of PhotoCure to give certain advice concerning infringement issues. Mr Jones told Mr Muratore that generic advice was given and that the retainer was subsequently terminated. 41 According to Mr Jones, when Mr Muratore raised PhotoCure's solicitors' letter with him he did not recall PhotoCure's name. After further discussion he thought he recognised PhotoCure's name. He called his secretary who located the PhotoCure file in a cupboard in Mr Jones' room. Mr Jones said there was no specific reason why the file remained in his cupboard and that it should have been closed. Mr Jones telephoned Mr Muratore and told him that he had located the file and had given advice to Frank B Dehn & Co regarding the circumstances in which an interlocutory injunction might be granted. Mr Muratore asked Mr Jones whether he could remember if he had provided substantial advice and whether Mr Jones thought the file would contain anything that would not be pleaded in a patent action. Mr Jones told Mr Muratore that he did not recall anything on the PhotoCure file having been of a confidential nature. 42 On the following day Mr Jones secured the PhotoCure file without looking at its contents and has not discussed the file or its contents with any other person other than as referred to with Mr Muratore. The PhotoCure file was subsequently produced to the Court and delivered to counsel for Freehills for the purposes of this motion. It is presently in the custody of the Court. 43 Mr Jones had an incomplete recollection of the PhotoCure file and believed that PhotoCure's concern was that some clinical trials for a life‑saving drug of some kind might be impeded by an interlocutory injunction. His recollection was that his advice was directed at the prospect of an injunction being granted during life-saving clinical trials. Mr Jones has not acted, and is not acting, for Dusa. 44 Mr Cherry, a solicitor and registered patent attorney, is a partner in FCSB and Freehills and was a partner in their predecessor firms. He recalled that Mr Jones was the partner responsible for the PhotoCure file and that he signed a letter on behalf of Mr Jones, that he contributed to the drafting of the letter in his capacity as a patent attorney and that he only had a very general recollection of the subject matter of the letter and no specific recollection of the subsequent advice or of the file. He had not discussed the PhotoCure file or any related matter with the solicitors involved in the Dusa matter. 45 Mr Muratore has never seen any of the contents of the PhotoCure file. Prior to the receipt of the letter of 6 May 2002 from PhotoCure's solicitors he was not aware of any work undertaken by Freehills Patent Attorneys or FCSB for PhotoCure. 46 Ms Gay and Ms Jane Hogan work in the intellectual property group at Freehills with Mr Muratore. Neither of them has had any contact with Mr Jones or Mr Cherry in relation to the PhotoCure file or any other file. Neither of them is aware of any of the advice that may have been provided by Mr Jones to PhotoCure or any of the information that may have been provided to Mr Jones by PhotoCure. Relevant legal principles 47 The principles upon which the jurisdiction to grant an injunction restraining the solicitor from acting against a party in a proceeding vary depending upon whether the person seeking to restrain the solicitor from acting in the proceeding is a present client or a former client of the firm of solicitors. The distinction between the two situations was clearly drawn by the House of Lords in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 ("Bolkiah"). Lord Millett, with whom the other Law Lords agreed, drew a clear distinction between the basis of the court's jurisdiction to intervene on behalf of an existing client and the basis of the court's jurisdiction to intervene on behalf of a former client. The jurisdiction where the court's intervention is sought by an existing client is predicated upon the existence of a conflict of interest. Lord Millett said at 234‑235: "… a fiduciary cannot act at the same time both for and against the same client, and his firm is in no better position. A man cannot without the consent of both clients act for one client while his partner is acting for another in the opposite interests. His disqualification has nothing to do with the confidentiality of client information. It is based on the inescapable conflict of interest which is inherent in this situation." 48 Where a former client is involved the jurisdiction is rather based upon the protection of confidential information. Lord Millett said at 235: "Where the court's intervention is sought by a former client, however, the position is entirely different. The court's jurisdiction cannot be based on any conflict of interest, real or perceived, for there is none. The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence. Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one. The former may readily be inferred; the latter will often be obvious. I do not think that it is necessary to introduce any presumptions, rebuttable or otherwise, in relation to these two matters. But given the basis on which the jurisdiction is exercised, there is no cause to impute or attribute the knowledge of one partner to his fellow partners. Whether a particular individual is in possession of confidential information is a question of fact which must be proved or inferred from the circumstances of the case. In this respect also we ought not in my opinion to follow the jurisprudence of the United States." 49 The duty of the solicitor of a former client is to preserve the confidentiality attendant upon the former relationship. Lord Millett made it clear that a former client of a solicitor will not be granted injunctive relief restraining that solicitor from acting against the former client "if there is no risk of the disclosure or misuse of confidential information" (at 236). Lord Millett went on to say at 236: "This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest." Lord Millett was concerned to avoid the use of expressions such as "appreciable risk" or an "acceptable risk". His Lordship continued at 237: "I prefer simply to say that the court should intervene unless it is satisfied that there is no risk of disclosure. It goes without saying that the risk must be a real one, and not merely fanciful or theoretical. But it need not be substantial." 50 It is apparent from Lord Millett's judgment that there are three stages which need to be considered: · whether the firm is in possession of information which is confidential to the former client; · whether that information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client; · whether there is any risk that the information will come into the possession of those persons in the firm working for the other party. 51 The burden of establishing the first two propositions is upon the former client but the burden of establishing the third proposition moves to the firm proposing to act once the first two propositions are satisfied. Lord Millett identified the evidentiary process at 237: "Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so there is no risk that the information will come into the possession of those now acting for the other party. There is no rule of law that Chinese walls or other arrangements of a similar kind are insufficient to eliminate the risk. But the starting point must be that, unless special measures are taken, information moves within a firm. In MacDonald Estate v Martin 77 D.L.R. (4th) 249, 269 Sopinka J. said that the court should restrain the firm from acting for the second client 'unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur.' With the substitution of the word 'effective' for the words 'all reasonable' I would respectfully adopt that formulation." 52 PhotoCure focused particular attention on the passage in Bolkiah referred to in par [49] which emphasised the importance to the administration of justice that a solicitor should not act in any way that might appear to put confidential information at risk of coming into the hands of someone with an adverse interest. This emphasis on the relevance of the administration of justice is also found in Carindale Country Club Estate Pty Limited v Astill (1993) 42 FCR 307. Drummond J said at 311: "The reason for this new emphasis on the special fiduciary position of a solicitor, where a question arises as to his freedom to act against the interests of a former client who has given him confidential information, is twofold. First, there is a public element in the work that a solicitor does in that he is an officer of the court and, in performing his professional function, he plays an integral part in the administration of justice. In this regard, he is unlike a private fiduciary. In Wan v McDonald at 513, Burchett J said, in the present context: 'But there are at least two other aspects of the problem to which attention has more recently been drawn; a solicitor's duty of loyalty, which cannot be treated as extinguished by the mere termination of the period of his retainer, and the important consideration of public policy which gives a special quality to the relationship of solicitor and client that the law will not generally permit to be stained by the appearance of disloyalty.' In Murray v Macquarie Bank Ltd(supra), Spender J said (at 49): 'It is important that the legal profession conduct its business in such a way as to maintain and enhance public confidence in it and in the administration of justice ... The integrity of the legal profession and the perception of that integrity by the public is in large measure a consequence of the fidelity which a legal practitioner shows to his client and conduct which has a tendency to jeopardise that perception of faithful commitment to the interests of the client should be prevented.' In an oft quoted passage, Bryson J in D & J Constructions Pty Ltd v Head (t/a Clayton Utz)(1987) 9 NSWLR 118 at 124-125 said: 'Where confidential information has been communicated by a client to a solicitor and is relevant to litigation in which the client is now engaged and still available to the solicitor, the Court should take a cautious approach to any proposal that it should allow the solicitor to act against that client. … Cautious conduct by the Court is appropriate because the spectacle or the appearance that a lawyer can readily change sides is very subversive of the appearance that justice is being done.' In MacDonald Estate v Martin(supra) Sopinka J, in rejecting the Rakusentest, said (at 266): 'Nevertheless it is evident from this review of authorities that the clear trend is in favour of a stricter test. This trend is the product of a strong policy in favour of ensuring not only that there be no actual conflict, but that there be no appearance of conflict.'" 53 It appears clear from the decision in Bolkiah that so far as a former client is concerned the jurisdiction to intervene is founded on the existence of confidential information and not on the existence of a conflict of interest. That basis for the jurisdiction has been accepted in a number of cases in Australia: Belan v Casey [2002] NSWSC 58 and the cases cited at [18]; Waiviata Pty Ltd v New Millenium Publications Pty Ltd [2002] FCA 98; Bureau Interprofessionnel Des Vins De Bourgogne v Red Earth Nominees Pty Ltd (t/as Taltarni Vineyards) [2002] FCA 588. 54 A divergent view was taken by Brooking JA in Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248. At [52] Brooking JA said: "I think it must be accepted that Australian law has diverged from that of England and that the danger of misuse of confidential information is not the sole touchstone for intervention where a solicitor acts against a former client. That danger can and usually will warrant intervention, but it is not the only ground. There are two other possible bases for an interdict. In the first place, it may be said to be a breach of duty for a solicitor to take up the cudgels against a former client in the same or a closely related matter." The second basis for an interdict referred to was the Court's jurisdiction over solicitors as officers of the Court. Brooking J concluded that the injunction granted by the trial judge against the solicitor should be confirmed on the three bases to which he had referred, namely the danger of misuse of confidential information, the breach of a fiduciary's duty of loyalty and the desirability of restraining the solicitors as officers of the Court. The other two members of the Victorian Court of Appeal rested their decision on the misuse of confidential information. 55 The view of Brooking J does not appear to be consistent with the reasoning of Lord Millett in Bolkiah. This was the view taken by Young CJ in Eq in Belan v Casey (supra) at [21]: "In my view, the overwhelming weight of authority is to the effect that where the applicant to restrain a solicitor is a former client, the sole consideration is whether there is a real risk of disclosure of confidential information and one does not delve into matters of conflict of interest or conflict of duty. In other situations this delving may well be material." 56 Notwithstanding the emphasis placed by PhotoCure on the importance of public confidence in the proper administration of justice, I consider that the authorities to which I have referred take the view that public confidence is maintained where a former solicitor is able to establish that there is no real risk that confidential information of a former client will come into the possession of, or be used by, persons in the firm acting for another party whose interests are adverse to the former client. 57 Even if the basis of loyalty to the client or supervision by the Court of solicitors as officers of the Court is relevant, there is no room for the operation of those principles in the present circumstances as none of the persons who were involved in the receipt of instructions from, and the giving of advice to, PhotoCure between November 1999 and May 2000 are involved in acting for Dusa in relation to the present proceeding. 58 I have been troubled by the matter because an initial reaction to the issue raised is that it is inappropriate for a firm of solicitors to act against a former client in circumstances where the subject of the retainer is the same subject‑matter as the retainer by the former client and also where the firm was acting for the former client in another matter at the time it was retained by the other party. As Lord Millett said in Bolkiah perceptions are as important as substance particularly where the administration of justice is concerned. 59 In D & J Constructions Pty Ltd v Head (t/as Clayton Utz) (1987) 9 NSWLR 118 ("D & J Constructions"), Bryson J said at 122‑123: "Where confidential information has been communicated by a client to a solicitor and is relevant to litigation in which the client is now engaged and is still available to the solicitor, the court should take a cautious approach to any proposal that it should allow the solicitor to act against that client: the considerations are much the same whether the information was communicated in the course of the litigation itself or in earlier business and whether or not the solicitor is a sole practitioner or is one of a number of partners or was employed by a principal. I would think that the court would not usually undertake attempts to build walls around information in the office of a partnership, even a very large partnership, by accepting undertakings or imposing injunctions as to who should be concerned in the conduct of litigation or as to whether communications should be made amongst partners or their employees. The new client would have to join in such an arrangement and give up his right to the information held by such parties and staff as held it. Enforcement by the court would be extremely difficult and it is not realistic to place reliance on such arrangements in relation to people with opportunities for daily contact over long periods, as wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control. Here in Sydney and now there is a thriving diverse and talented legal profession and the court need not fear that a litigant who is deprived of the services of one firm will not be able to retain adequate representation. Cautious conduct by the court is appropriate because the spectacle or the appearance that a lawyer can readily change sides is very subversive of the appearance that justice is being done. The appearance which matters is the appearance presented to a reasonable observer who knows and is prepared to understand the facts. The court should weigh the facts and assess the risks in the eye of reality, theoretical risks should be disregarded and when as here there is no confidential information available and there never was a relationship of solicitor and client with any partner the appearance of the matter is not a basis for the court to assume control over the retainer." This passage was adopted by Ipp J in Mallesons Stephen Jaques v KPMG Peat Marwick (1991) 4 WAR 357 at 373 and Drummond J in Carindale Country Club Estate Pty Limited v Astill (supra) at 117. 60 I agree with Bryson J that the spectacle that a lawyer can readily change sides is subversive of the appearance that justice is being done but as against that I have to balance the application of relevant principles which accept that a lawyer, in certain circumstances, can change sides and act against a former client where the lawyer is able to establish that there is not a real risk of misuse of confidential information. 61 D & J Constructions was decided fifteen years ago and since that time the nature of legal practice has changed. The courts are now more prepared to accept the concept of "Chinese walls" and the quarantining of information within an organisation as Lord Millett recognised in Bolkiah, Steytler J accepted in Newman v Phillips Fox (1999) 21 WAR 309 and Ryan J accepted in Bureau Interprofessionnel Des Vins De Bourgogne v Red Earth Nominees Pty Ltd (t/as Taltarni Vineyards) (supra). Findings 62 PhotoCure's case, based on the principles to which I have referred, and accepting that Freehills, or at least FCSB with whom the intellectual property team is integrated, is in the possession of confidential information which is relevant to the present proceeding was put in the following way: "The present case is a striking example of one in which there can be no real confidence that highly relevant and confidential information of an old client in the possession of the solicitors and subject to legal professional privilege has not and will not find its way into the hands of those in the firm who are bound to act in the interest of the new client. To allow the solicitors to continue acting in those circumstances for the new client at the expense of the old would seriously diminish public confidence in the administration of justice." 63 Freehills submitted that I should resolve the issue by asking whether there was a real and sensible possibility or risk of misuse of confidential information. 64 PhotoCure relied upon a number of circumstances and matters to support its submission that there was a risk that the confidential information had come or would come into the possession of the partners and employees of Freehills now acting for Dusa: · the integration between FCSB and Freehills; · the involvement of Mr Jones, Dr Davy and Mr Cherry in the retainer by PhotoCure; · the file disclosed that Mr Jones had discussions about a matter involving PhotoCure with unnamed solicitors; · Freehills refused to answer questions asked in PhotoCure's solicitors' letter of 16 May 2002; · Mr Jones' recollection of the extent of the advice he gave was poor. Freehills' letter of 8 May 2002 to PhotoCure's solicitors recorded a conversation between Mr Jones and Mr Muratore in which Mr Jones referred to PhotoCure being interested in infringement issues. In his affidavit Mr Jones told Mr Muratore that he did not recall anything on the file being of a confidential nature and that he did not think that his advice had gone to the validity of the patent. PhotoCure contrasted this evidence with the contents of the confidential file; · Mr Cherry had an imperfect recollection of his involvement in the file and the drafting of a letter which he signed; · it was said that common experience is that persons within legal firms discuss matters with which they are dealing as a matter of common interest. 65 I accept that the integration between FCSB and Freehills, and in particular their intellectual property group is such that for present purposes I should treat FCSB as part of Freehills for the purpose of the application of relevant principles. However, I do not consider that there is a real risk of disclosure of the confidential information for the reasons to which PhotoCure has referred. Mr Jones and Mr Cherry are not involved, and have never been involved, in the retainer of Freehills by Dusa and Dr Davy left the firm over two years ago. Mr Wayne Condon had a fleeting connection with the PhotoCure file but left Freehills some time ago. 66 I am satisfied on the material placed before me that there is no risk that there has been disclosure by Messrs Jones and Cherry and Dr Davey of any material relating to PhotoCure to any of the persons presently acting for Dusa and that there is no likelihood of that occurring in the future. I am not satisfied that Mr Jones had discussions with unnamed solicitors with the consequence that there is a risk of disclosure to the persons presently acting for Dusa. 67 The failure or refusal of Freehills to answer the questions put to the firm by PhotoCure's solicitors in their letter of 16 May 2002 has now been cured by the material placed before the Court. I accept that there have been errors in recollection of Messrs Jones and Cherry but those errors of recollection are not such as to indicate a real risk that there has been, or will be, a dissemination of confidential information pertaining to PhotoCure to the persons now acting for Dusa. 68 Counsel for PhotoCure was critical of Mr Jones' apparent understanding of the nature of confidential information as he disclosed to Mr Muratore the fact that he had given advice to Frank B Dehn & Co "regarding the circumstances in which an interlocutory injunction might be granted". Such advice and the seeking of it was privileged information and entitled to a cloak of confidentiality. Nevertheless the evidence does not establish that Mr Jones made any further disclosure to anyone else at Freehills Patent Attorneys or FCSB or Freehills other than to those persons shown by the PhotoCure file to have been involved in the receipt of instructions and the preparation of advice. 69 Mr Jones also said in his affidavit that he told Mr Muratore that he did not recall anything on the PhotoCure file having been of a confidential nature. This was not a correct recollection, particularly because the subject‑matter of the file was the seeking and giving of advice on patent issues. However Mr Jones' statement must be considered in context. The PhotoCure file had not been active for around two years and he had not refreshed his memory by reference to the file other than to ask his secretary to read to him what he understood to be the opening paragraph of the last letter on the file. Mr Jones acknowledged in his affidavit that his recollection of the file was very incomplete and might be inaccurate. Against this background, his recollection was that nobody else worked with him on the file whether from the patent attorney firm in Victoria or New South Wales or from Freehills in Victoria or New South Wales. Again an examination of the PhotoCure file shows that this recollection does not accord with the facts. 70 It does not follow from Mr Jones' imperfect recollection of the contents of a file, over two years old, that there is a likelihood that he discussed with, or disclosed to, any person, other than those identified in the file, any of the contents of the file. The computer systems in place at relevant times make it improbable that there was any access to PhotoCure's file from any person in the Sydney firms of patent attorneys and solicitors. 71 It is relevant in this context that the original personnel dealing with the PhotoCure retainer in 1999/2000 came from the Melbourne office and the persons now acting for Dusa in relation to the patent come from the Sydney office. Although there is obviously communication and particular information technology connections between the firms in Melbourne and Sydney the evidence established that there has not been any contact between Sydney and Melbourne in relation to the PhotoCure file. 72 Although it may be common experience that legal practitioners and patent attorneys talk amongst themselves about the nature of the work they are undertaking from time to time it is speculative and theoretical, in the light of the evidence, that there has been dissemination of confidential information relating to PhotoCure to the persons presently acting for Dusa. Mr Jones and his group were located in Melbourne and Mr Muratore and his group are located in Sydney. I do not consider that there is a real likelihood of there having occurred a casual comment by Mr Jones or anyone else who worked on the PhotoCure file which was communicated to anyone in Mr Muratore's group who will be acting for Dusa. 73 PhotoCure submitted that confidential material may have already been disclosed and therefore might be available in some way that could never be traced to the disadvantage of PhotoCure. It was also submitted that inadvertent disclosure of such confidential material might occur hereafter and that the difficulty which Freehills and its deponents had in identifying relevant confidential material showed that I could not be confident that in the future there might not be inadvertent disclosure. 74 Although there were inconsistencies in Freehills' evidence as to the nature of the confidential information imparted by PhotoCure to Freehills, and indeed whether what was imparted was confidential, I am not satisfied that there is a real risk of future disclosure of any of the information which is confidential to PhotoCure to anyone at Freehills or FCSB who may be acting for Dusa. Although that risk is theoretically possible, I do not consider it to be a real risk from a practical point of view. The dissemination of the confidential information between November 1999 and May 2000 was to a limited group of persons in Melbourne who did not have regular contact with the people who will be in Mr Muratore's team in Sydney acting for Dusa. There is also substantial protection from disclosure to those persons in the future available from the undertaking which have been proffered. 75 The undertaking proffered is in the following terms: "I, , Solicitor, undertake to the Federal Court and to PhotoCure ASA (PhotoCure) as follows: 1 not to discuss, or seek to discuss, with Paul Jones, James Cherry, Anne Gsodam, Joanna Mulrooney, David Opperman, Jennifer Galatas or Gavin Bell, any matter relating to: (a) Federal Court proceeding No. V214 of 2002 (Proceeding); (b) any advice previously provided by Freehills Patent Attorneys (FPA) or Freehills Carter Smith Beadle (FCSB) to PhotoCure in relation to Australian Patent No. 624985 (Patent); or (c) any information obtained by FPA or FCSB, from PhotoCure or any person on its behalf in relation to the Patent; 2 not to seek or obtain access to any files or documents, including electronic files and documents, in the possession or custody of FCSB or Freehills relating to advice previously provided to PhotoCure in relation to the Patent; 3 not to work from any floor in the Melbourne office of Freehills on which FCSB is located in connection with the Proceeding; 4 not to store any hard copy documents drafted or obtained by me, or under my control, in relation to the Proceeding, on any floor in the Melbourne office of Freehills on which FCSB is located; 5 to restrict access to all documents created by me or at my direction and stored electronically so as to permit access only to those persons in Freehills undertaking work in relation to the Proceeding. ………………………………… Signed Date:" The persons nominated in par 1 of the undertaking are persons, presently principals of, or employed by, Freehills and FCSB in Melbourne, who have had contact with the PhotoCure file. Ms Anne Gsodam is Mr Jones' secretary, Ms Joanna Mulrooney was Dr Davy's secretary. Mr David Opperman is a partner in Freehills' litigation section in Melbourne, Ms Jennifer Galatas is a solicitor in the Freehills' litigation section in Melbourne who was involved in the transmission of the PhotoCure file from Freehills to counsel acting for Freehills on the motion and Mr Gavin Bell is Freehills' Chief Operating Officer. 76 In Bolkiah an injunction was granted. Lord Millett was not satisfied that KPMG had discharged the burden of showing that there was no real risk that information in its possession confidential to Prince Jefrimight unwittingly or inadvertently come to the notice of those persons working adversely to his interests. Although Lord Millett expressed the opinion at 239 that: "an effective Chinese wall needs to be an established part of the organisational structure of the firm, not created ad hoc and dependent on the acceptance of evidence sworn for the purpose, by members of staff engaged on the relevant work", he was faced with a substantially different situation than is present in this case. It should be noted that earlier in his reasons, Lord Millett had accepted that there was no rule of law that Chinese walls are insufficient to eliminate the risk of disclosure of confidential information. 77 Of the order of 168 KPMG personnel had worked on the assignment for Prince Jefri between 1996 and 1998, including twelve partners and 81 assistant managers or above and a substantial body of confidential information was involved. In the present case the involvement of Freehills Patent Attorneys, FCSB and Freehills' personnel was much more limited. The facts in Bolkiah are distinguishable from those in the present case. 78 Although the information barrier or Chinese wall created in the present case is an ad hoc arrangement I am satisfied that, taken in conjunction with the other matters to which I have referred, it is effective to ensure that there is no real risk of disclosure of any of PhotoCure's confidential information to Mr Muratore and his team. 79 In this respect I have adopted a similar approach to that of Ryan J in Bureau Interprofessionnel Des Vins De Bourgogne v Red Earth Nominees Pty Ltd (t/as Taltarni Vineyards) (supra) in which the Chinese walls had been erected on an ad hoc basis. Ryan J accepted that there was no principle of law that Chinese walls or arrangements designed to quarantine information to particular persons could never eliminate the risk of disclosure of confidential information and referred to Lord Millet's observation in this respect in Bolkiah in par [51] above. Ryan J also noted the reluctance of courts to assume the efficacy of Chinese walls and information barriers where, without them, the risk is real and referred to MacDonald Estate v Martin 77 DLR (4th) 249 at 269 and D & J Constructions at 122‑123. Notwithstanding that the Chinese walls were erected on an ad hoc basis, Ryan J was satisfied that there was no real risk that any relevant confidential information would come into the hands of those in the firm acting for the applicants. 80 In Newman v Phillips Fox (supra) Steytler J concluded that the Chinese wall proposed by the firm of solicitors was inadequate with the consequence that there was a risk of inadvertent disclosure. Steytler J was particularly concerned with the expected interaction between the persons who had previously acted for the former client and the persons now acting for the other party whose interests were adverse to that former client. That extent of interaction does not exist in the present circumstances particularly having regard to the different cities in which Mr Jones and his team and Mr Muratore and his team work. The facts in the present case are distinguishable from those in Newman v Phillips Fox (supra). 81 I am therefore satisfied that Freehills has discharged the evidentiary burden of establishing that, notwithstanding the fact that Freehills through its association and integration with FCSB is in possession of confidential information of PhotoCure relevant to the present proceeding, there is no real risk that the confidential information will come into the possession of, to the knowledge of, or be used by, those persons in Freehills who will be acting for Dusa in the proceeding if Dusa is given leave to be joined as a party or if, in the events which turn out, Freehills act for the respondent. 82 There is a theoretical risk that the contents of the PhotoCure file may be disclosed to the persons in Mr Muratore's team who are and will be acting for Dusa as they are part of the same integrated organisation and they could seek access to the file within the offices in which the firms carry on their practices. However that theoretical risk is not a real risk or a real possibility having regard to the manner in which the PhotoCure file has been quarantined, the inability of the persons in Mr Muratore's team to access it through their information and recording systems and the undertakings which have been proffered. 83 I am satisfied that notwithstanding the integration and co-operation between FCSB and Freehills and their predecessor firms that there has not been a dissemination of the instructions which were received by Freehills Patent Attorney in Victoria in November 1999 and thereafter or the advice which that firm gave to Frank B Dehn & Co and to PhotoCure thereafter beyond the persons identified in the file to any of the persons who are or may be involved in acting for Dusa against PhotoCure in relation to the patent. 84 Further, I am satisfied that the procedures and safeguards which Freehills have in place and the undertakings which the persons acting for Dusa in a proceeding are prepared to give, are such, in the words of Sopinka J in MacDonald Estate v Martin (supra) at 269 that: "all reasonable measures have been taken to ensure that no disclosure will occur." I also adopt the words of Lord Millet that the steps taken by Freehills and FCSB will be "effective" to ensure that no disclosure will occur. I am satisfied that Freehills have demonstrated that there is no real risk that the confidential information contained in the PhotoCure file will come into the possession of those persons in Freehills now acting for Dusa. 85 Adopting and adapting the observations of Drummond J in Carindale Country Club Estate Pty Limited v Astill (supra), I consider that a reasonable observer, aware of the relevant facts relating to the relationship between Freehills and FCSB, and their predecessor firms, the identity of the persons who were involved in the PhotoCure file, the extent to which it is said that there has not been any disclosure of its contents, the identity of the persons who will be acting for Dusa and the undertakings which have been proffered, would not think there was a real, as opposed to a theoretical, possibility or risk that information confidential to PhotoCure given by it to FCSB's predecessor firm might be used by Freehills to advance the interests of Dusa to the detriment of PhotoCure. 86 Provided Freehills are prepared to undertake to the Court to procure that any solicitor, patent attorney or paralegal person from FCSB or Freehills acting for or in relation to the retainer of Freehills by Dusa in relation to the patent, signs an undertaking in the form to be annexed to the order, the application should be dismissed. 87 The motion will be dismissed. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate: Dated: 22 July 2002 Counsel for the Applicant: R C Macaw QC and A J Ryan Solicitor for the Applicant: Allens Arthur Robinson Counsel for Freehills: A C Archibald QC and S G E McLeish Solicitor for Freehills: Freehills Date of Hearing: 28 June and 8 July 2002 Date of Judgment: 22 July 2002