FEDERAL COURT OF AUSTRALIA Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 PRACTICE AND PROCEDURE – inherent jurisdiction – officers and processes of the court – restraining legal practitioners from acting – test to be applied – relevant considerations Bahonko v Nurses Board of Victoria (No 2) [2007] FCA 351 referred to Black v Taylor [1993] 3 NZLR 403 cited Bowen v Stott [2004] WASC 94 cited Carindale Country Club Estate Pty Ltd v Astill & Ors (1993) 42 FCR 307 cited Freeman v Chicago Musical Instrument Co 689 F2d 715 (1982) cited Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 cited Grimwade v Meagher & Ors [1995] 1 VR 446 cited Holborow v MacDonald Rudder [2002] WASC 265 cited Kallinicos v Hunt (2005) 64 NSWLR 561 cited Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 cited Spincode Pty Ltd v Look Software Pty Ltd & Ors (2001) 4 VR 501 cited STANISLAWA BAHONKO v NURSES BOARD OF VICTORIA AND MINISTER FOR HEALTH BRONWYN PIKE VID 855 OF 2006 MIDDLETON J 5 APRIL 2007 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 855 OF 2006 BETWEEN: STANISLAWA BAHONKO Applicant AND: NURSES BOARD OF VICTORIA First Respondent MINISTER FOR HEALTH BRONWYN PIKE Second Respondent JUDGE: MIDDLETON J DATE: 5 APRIL 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Application has been made by the applicant to restrain Ms Dominque Saunders and Russell Kennedy (a firm) from acting on behalf of the first respondent in these proceedings. The form of order has not been precisely articulated by the applicant, but I will proceed on the basis that an order is sought that the firm Russell Kennedy and Ms Saunders be restrained from acting as solicitors for the first respondent in these proceedings. The background to these proceedings and the role of each of Ms Saunders and Russell Kennedy have been set out in my judgment delivered on 14 March 2007: see Bahonko v Nurses Board of Victoria (No 2) [2007] FCA 351. Essentially, Russell Kennedy are the solicitors on the record representing the first respondent, and Ms Saunders is a solicitor in the employ of Russell Kennedy and has been involved in these proceedings. Other relevant circumstances are referred to later in these reasons. 2 The Court's jurisdiction to restrain a legal practitioner from acting in proceedings is an exceptional one and discretionary. It must be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the legal practitioner of its choice without due or good cause: Grimwade v Meagher & Ors [1995] 1 VR 446 at 452; Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 at [35] and [51]. The cost, inconvenience or impracticality of requiring a legal practitioner to cease to act may provide a reason for refusing to grant relief: Geelong School [2006] FCA 1404 at [51]; Kallinicos v Hunt (2005) 64 NSWLR 561; Black v Taylor [1993] 3 NZLR 403 and Bowen v Stott [2004] WASC 94. 3 The Court must be careful not to intervene unless it is absolutely required in the circumstances of the case. Further, the Court should be mindful that sometimes applications for restraining legal practitioners may be misused or quite inappropriately pursued by a party to proceedings. In Freeman v Chicago Musical Instrument Co 689 F2d 715 (1982), the Court observed at 722: We do not mean to infer that motions to disqualify counsel may not be legitimate, for there obviously are situations where they are both legitimate and necessary; nonetheless, such motions should be viewed with extreme caution for they can be misused as techniques of harassment. 4 Justice Young in Geelong School [2006] FCA 1404 recently set out the relevant legal principles to be applied when considering whether to restrain a legal practitioner from acting for a particular party to litigation, there being three possible grounds for so restraining a legal practitioner: (a) the danger of misuse of confidential information: Geelong School [2006] FCA 1404 at [24]; (b) breach of a fiduciary duty of loyalty not to act against a client or against a former client in the same matter or a closely related matter: Geelong School [2006] FCA 1404 at [24]; and (c) the inherent jurisdiction of the court to control the conduct of legal practitioners as officers of the court: Geelong School [2006] FCA 1404 at [24], [32] and [33]. 5 In relation to both Ms Saunders and Russell Kennedy, the determination of the questions of whether there is a danger of misuse of confidential information and whether there is a breach of any fiduciary duty can be readily dealt with by me. It would appear that the applicant is concerned that Ms Saunders was a member of the Public Interest Law Clearing House ('PILCH') in 2004 when PILCH refused to assist the applicant to bring proceedings against the first respondent, and in the process of considering the applicant's request to PILCH Ms Saunders obtained "confidential documents" from the applicant. 6 The only evidential basis of the applicant's complaint derives from [25] of her affidavit affirmed on 31 October 2006: Mrs D. Saunders was on PILCH in 2004 and PILCH refused to assist me against the [first respondent] and instead collected many confidential documents from me which then were liked [sic] to Mrs Saunders. I have circumstantial evidence of that. 7 Without going into the relationship between PILCH, Ms Saunders and Russell Kennedy, there is simply no evidence to suggest that either Ms Saunders or Russell Kennedy was provided with confidential information of the applicant. 8 In any event, the alleged confidential information is not described, and therefore this Court cannot determine whether there could be any risk or danger that it may be used to the detriment of the applicant in this proceeding. The authorities are clear that the confidential information must be identified to such an extent that the claim of confidentiality can be assessed by the Court: see Spincode Pty Ltd v Look Software Pty Ltd & Ors (2001) 4 VR 501 at [22]; Carindale Country Club Estate Pty Ltd v Astill & Ors (1993) 42 FCR 307 at 314; Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [65] to [68]. 9 In these circumstances, I cannot be satisfied that there is any danger of misuse of confidential information by either Ms Saunders or Russell Kennedy. 10 As to there being any breach of a fiduciary duty of loyalty there is simply no material to support such a contention against Ms Saunders or Russell Kennedy. Whatever may be the ambit of the concept of the fiduciary duty of loyalty, no relationship that may have been said to exist, between the applicant on the one hand and Ms Saunders and Russell Kennedy on the other, gives rise to any fiduciary duty of loyalty. 11 I now turn to consider the issue of the Court's inherent jurisdiction to restrain legal practitioners from acting in a particular case as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice, where such a course is required in the interests of justice: Geelong School [2006] FCA 1404 at [24], [32] and [33]. The crucial question is whether, on the evidence before the Court, a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that the legal practitioner be restrained from acting for its client in the proceedings: Geelong School [2006] FCA 1404 at [35]. 12 I deal first with the position of Ms Saunders. Serious criminal allegations have been made against Ms Saunders by the applicant. They are denied by Ms Saunders. For the purposes of this application I do not regard it as necessary or appropriate to rehearse in these reasons the details or merits of the allegations. I have, however, come to the view that there is a real likelihood that in these proceedings, assuming the matter proceeds to trial, the conduct of Ms Saunders will require evaluation and assessment and she may well feel compelled to justify or defend her conduct. 13 In Holborow v MacDonald Rudder [2002] WASC 265 at [23], Heenan J said that the power to exercise supervisory jurisdiction over legal practitioners had been invoked in cases where the subject matter of the litigation was likely to involve an evaluation of the conduct of the legal practitioner. In Bowen v Stott [2004] WASC 94 at [53] and [55], Hasluck J said that it may be appropriate to invoke this power in cases where the legal practitioner may feel compelled to justify or defend his or her conduct in representing a client, or where the practitioner's credibility is at stake as a potential witness. 14 I have not reached the conclusion that there is a real likelihood that the conduct of Ms Saunders will require evaluation in these proceeding just because the applicant has made a number of serious allegations against Ms Saunders. Ms Saunders herself is acutely aware of the seriousness of the allegations themselves and that the allegations necessarily involve an evaluation of her conduct. In the course of an application made on Ms Saunders' behalf that Ms Saunders be excused from cross-examination on the basis of the privilege against self-incrimination, counsel for Ms Saunders stated that the application to remove Ms Saunders from acting in these proceedings was based upon, and inextricably linked with, the very allegations of criminal conduct alleged against her, and that it was clear from the material before the Court that the applicant intended to pursue these criminal charges. It is apparent from the nature of the allegations made by the applicant that they go beyond the context of the hearing to remove Ms Saunders, and extend to matters that are likely to be raised in the proceedings themselves. In fact, specific reference is made to Ms Saunders' past conduct, going back, it seems, to 2003. 15 I again stress that all allegations are denied by Ms Saunders, and that obviously it is not sufficient to simply rely upon allegations of criminal conduct against a legal practitioner as the sole basis for the court making a restraining order. The court will need to determine whether there is a real likelihood of an evaluation of the conduct of the legal practitioner occurring in the proceedings, or whether there is a real likelihood that the legal practitioner will need to justify or defend himself or herself in the proceedings. Without going into all the elements of the allegations made by the applicant against Ms Saunders, the conclusion I have reached is based upon Ms Saunders' own evaluation as evidenced by and in the course of her application before me not to be cross-examined on the basis of the privilege of self-incrimination. Whilst such application by Ms Saunders was made in the context of the applicant's application to restrain Ms Saunders (and Russell Kennedy) from acting, it is obvious that, by the nature of the allegations and the stated intent of the applicant, there is a real likelihood of an evaluation of the conduct of Ms Saunders in the proceedings, and a real likelihood that Ms Saunders will need to justify or defend herself in the proceedings. 16 The need for independence and being personally remote from the subject matter of the dispute requires that Ms Saunders no longer be involved in these proceedings. I am aware that this has the consequence of causing extra cost and inconvenience to the first respondent. However, the undesirability of Ms Saunders being involved in the circumstances of this case outweighs that consideration. In my view, a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires Ms Saunders be restrained from acting in these proceedings. 17 The position in relation to Russell Kennedy is different. Russell Kennedy is a firm of solicitors, and no allegation is made specifically against any of its partners. It may be said that Russell Kennedy has an interest in the litigation because of the allegations made against its employee, Ms Saunders. In this indirect way it could be said that Russell Kennedy in the course of the litigation may need to justify or defend Ms Saunders. In my view, such a possibility is remote. 18 I do not consider that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires Russell Kennedy, as a firm of individual partners, be restrained from acting in this proceeding. The matters alleged by the applicant against Russell Kennedy relate to the issue of the receipt of "confidential documents" and to the applicant's application for an injunction restraining Ms Saunders and Russell Kennedy from acting, but do not relate to the main issues in these proceedings. Of course, the criminal proceedings of the type as threatened by the applicant against Ms Saunders could not be brought against the firm Russell Kennedy, but would need to be brought against individual partners. No such specific proceeding has been identified by the applicant as a possibility or likelihood by reference to any specific partner. This stands in stark contrast to the position of Ms Saunders. 19 As I have said, the jurisdiction to be exercised here is discretionary. The cost, inconvenience and impracticality of requiring legal practitioners to cease to act may provide a reason for refusing relief. There are no direct and relevant allegations of improper conduct on behalf of any individual partners of Russell Kennedy that relate to the issues that will be agitated in these proceedings if or when the matter proceeds to trial. The first respondent, having been deprived of the services of Ms Saunders, should not be deprived of retaining Russell Kennedy in these proceedings which would involve even greater cost and inconvenience to the first respondent. 20 I will make orders in light of these reasons upon hearing from the parties. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate: Dated: 5 April 2007 Counsel for the Applicant: The Applicant appeared in person Counsel for the First Respondent: T Cordiner Solicitor for the First Respondent: Russell Kennedy S Hinchey appeared on behalf of D Saunders Date of Hearing: 28 November 2006 Date of Judgment: 5 April 2007