Industrial Court of New South Wales CITATION: Surfing Hardware International Holdings & Ors v William McCausland and Anor [2006] NSWIRComm 276 APPELLANT Surfing International Holdings Pty Ltd & Ors PARTIES: RESPONDENT William McCausland FILE NUMBER(S): IRC 2876 of 2006 CORAM: Walton J Vice-President; Boland J; Backman J Appeal - Application for leave to appeal - Appeal from decision and orders restraining solicitors from continuing to represent appellant in proceedings under s 106 of the Industrial Relations Act - Stay of proceedings - Principles to be applied in respect of stay applications - Conflict of interest - Solicitors for appellant in possession of respondents' confidential information - Principles to be applied in respect of restraining solicitors from acting in a particular case where there is a conflict of interest - Appellants seeking stay only to the extent of allowing their solicitors to prosecute appeal - Consideration of appellants' prospects of success and balance of convenience - Consideration of undertakings proffered by appellants' solicitors to the Court to maintain confidentiality and observe information barriers erected by the appellants' solicitors between appeal proceedings and proceedings at first instance - Undertakings accepted - Limited stay granted CATCHWORDS: Stay of proceedings - Appeal - Application for leave to appeal - Appeal from decision and orders restraining solicitors from continuing to represent appellant in proceedings under s 106 of the Industrial Relations Act - Principles to be applied in respect of stay applications - Conflict of interest - Solicitors for appellant in possession of respondents' confidential information - Principles to be applied in respect of restraining solicitors from acting in a particular case where there is a conflict of interest - Appellants seeking stay only to the extent of allowing their solicitors to prosecute appeal - Consideration of appellants' prospects of success and balance of convenience - Consideration of undertakings proffered by appellants' solicitors to the Court to maintain confidentiality and observe information barriers erected by the appellants' solicitors between appeal proceedings and proceedings at first instance - Undertakings accepted - Limited stay granted LEGISLATION CITED: Industrial Relations Act 1996 Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550 Belan v Casey [2002] NSWSC 58 Black v Taylor [1993] 3 NZLR 403 Bowen v Stott [2004] WASC 94 British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 Burgess and Others v Mount Thorley Operations Pty Limited (2002) 119 IR 52 CASES CITED: Campbells Cash & Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400 Grimwade v Meagher and Others [1995] 1 VR 446 Kallinicos & Another v Hunt & Others [2005] NSWSC 1181 Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 Transport Industry - Waste Collection and Recycling (State) Award, Re (2000) 102 IR 192 William McCausland v Surfing International Holdings Pty Ltd & Ors [2006] NSWIRComm 261 Williamson & Anor v Nilant [2002] WASC 225 HEARING DATES: 10/08/2006 DATE OF JUDGMENT: 09/01/2006 APPELLANT / APPLICANT ON NOTICE OF MOTION Mr H J Dixon SC Solicitor: Mr I Davis Watson Mangioni Lawyers Pty Limited LEGAL REPRESENTATIVES: RESPONDENT / RESPONDENT ON NOTICE OF MOTION Mr P J Newall of counsel Solicitor: Mr G Dunstan Dunstan Legal Solicitors JUDGMENT: - 23 - INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: Walton J, Vice-President Boland J Backman J Friday, 1 September 2006 Matter No IRC 2876 of 2006 SURFING HARDWARE INTERNATIONAL HOLDINGS PTY LIMITED AND ORS v WILLIAM MCCAUSLAND AND ANOR Application by Surfing Hardware International Holdings Pty Limited for leave to appeal and appeal against a judgment of Justice Marks given on 14 July 2006 in Matter Nos IRC 5174 of 2004 and IRC 4589 of 2005 INTERLOCUTORY JUDGMENT OF THE COURT [2006] NSWIRComm 276 1 In a judgment given extempore on 14 July 2006 (William McCausland v Surfing International Holdings Pty Ltd & Ors [2006] NSWIRComm 261) Marks J ordered that a firm of solicitors, Harmers Workplace Lawyers ("Harmers"), be restrained from continuing to represent the respondents in the proceedings. 2 The basis for his Honour's judgment was that William McCausland had met with a partner and an employed solicitor of Harmers in February 2005 and provided them with certain information in connection with his pending litigation. Mr McCausland subsequently decided to engage another firm of solicitors, Dunstan Legal, and in September 2005 he and a second applicant, Yvonne McCausland, filed a summons for relief under s 106 of the Industrial Relations Act 1996. Until May 2006, Allens Arthur Robinson had acted for the respondents named in the summons, they being Surfing Hardware International Holdings Pty Limited, SHI Holdings Pty Limited, Surf Hardware International Pty Limited, Timothy Bosher and Timothy Ford ("the Surfing Interests"). On 23 May 2006, a notice of change of solicitors was filed by Harmers indicating that firm henceforth acted for the Surfing Interests. Mr McCausland contended that in light of the information he had provided to Harmers, that firm now had a conflict of interest. His Honour agreed. 3 The Surfing Interests subsequently applied for leave to appeal and to appeal the decision of Marks J. These applications were accompanied by an application for urgency. A stay of the decision was also sought. In proceedings on 4 August 2006 in respect of the urgency application and the stay, Mr P Newall of counsel for the McCauslands objected to the appearance of Mr Coleman of counsel for the Surfing Interests because Harmers had instructed Mr Coleman and it was contended that Harmers were restrained from representing the Surfing Interests by virtue of his Honour's orders of 14 July 2006. 4 In the result, a notice of change of solicitors was filed indicating that Watson Mangioni Lawyers Pty Limited ("Watson Mangioni") were now acting on the appeal for the Surfing Interests in place of Harmers. On 9 August, Watson Mangioni filed a notice of motion seeking orders that the appeal papers filed on behalf of the Surfing Interests by Harmers, be substituted with the appeal papers annexed to the motion filed by Watson Mangioni on behalf of the Surfing Interests. The substituted appeal papers were substantively in the same terms as those filed by Harmers on behalf of the Surfing Interests including the relief sought, namely: (i) leave to appeal be granted; (ii) an order that the appeal be upheld; (iii) an order that the orders made restraining Harmers Workplace Lawyers from continuing to represent the Appellant, in the Proceedings Below be set aside; (iv) in the alternative an order that the matter be referred back to the Industrial Court of New South Wales constituted by another Judicial Member to determine the issues in the Interlocutory Proceedings below in the manner according to law or in such a way as the Full Bench of the Court sees appropriate; (v) such further or other orders as this Honourable Court determines are necessary; and (vi) that the Respondents pay the Appellants' costs of the Interlocutory Proceedings below and of the appeal. 5 The notice of motion also sought other orders in the following terms: 4. That the Orders of the Honourable Justice Marks made on 14 July 2006 in proceedings no. 5174 of 2004 and proceedings no. 4589 of 2005 that Harmers Workplace Lawyers be restrained from continuing to represent the Applicants (the Respondents in those proceedings) be stayed pending the outcome of the appeal in these proceedings to the extent that they restrain Harmers Workplace Lawyers from acting in these proceedings no 2876 of 2006 and prosecuting the Appellants' Application for Leave to Appeal and Appeal. 5. That the hearing of any Application for Leave to Appeal and Appeal be expedited. 6. Such other Order as this Court sees fit. 7. Costs. 6 On 10 August, there being no substantive objection by the McCauslands, the Full Bench made the necessary orders substituting the appeal papers as sought by the Surfing Interests and proceeded to hear argument in respect of the application for expedition and the stay of the decision of Marks J. 7 This judgment concerns the application for a stay and for expedition. Decision at first instance 8 Marks J summarised the evidence before him in the following terms: 7 Evidence given for the purpose only of these interlocutory proceedings indicates that Mr McClausand (sic) met with Mr Stewart and an employed solicitor, a Mr Richard Lewin, on 27 February 2005. 8 The subject matter of that meeting is deposed to by Mr Dunstan, solicitor, on the basis of information and belief furnished to him by Mr McClausand (sic). No explanation has been given as to why the evidence before the Court has been adduced in this way, and I note the concerns expressed by Senior Counsel appearing for the respondents with respect to the presentation of the evidence in this way. In any event I proceed on the basis that because of certain corroborative evidence to which I shall shortly refer I accept that there was a general discussion between Mr McCausland and Messrs Stewart and Lewin concerning the circumstances which are relevant to s 106 proceedings which were ultimately commenced. 9 It was asserted by Mr Dunstan, on information and belief, that the discussions covered matters such as remuneration and other matters pertaining to the litigation process and what would be involved in connection with the litigation process from the point of view of an applicant. There is more detailed information contained within Mr Dunstan's affidavit but because of the grave concern expressed by Mr McCausland's counsel, which was not objected to by counsel for the respondents, concerning the confidential nature of what was discussed, I shall refrain from describing it in any further detail. 10 There were produced for the purpose of the evidence in the proceedings on a strictly confidential basis the notes taken by Messrs Stewart and Lewin of the interview conducted on 27 February. Again, I shall not describe them in any particularity because of the confidential nature. However, they show extensive discussions over a period, which the Court has been informed would be in excess of one hour, during which a number of matters clearly related to the possibility of unfair contract proceedings being instituted were discussed. 11 There is also evidence of further telephone conversations, one with Mr Lewin on 1 April 2004 and one with Mr Stewart on 3 May 2004, in each case with Mr McCausland. Included in the latter is a reference to the remuneration cap provided for by s108A. In that conversation, I accept that Mr McCausland told Mr Stewart that Harmers were not retained in the proceedings. 12 There is also evidence that on 4 May 2004 Mr McCausland informed Mr Stewart that he was concerned that Harmers might be instructed by the respondents to represent them in these proceedings. Upon this being communicated Mr Stewart contacted Mr Gregory Keith Robertson, Harmers' general counsel, who quarantined Mr Stewart's notes after perusing them and then instituted the creation of information barriers in purported accordance with protocols established by the Law Society of New South Wales. Mr Robertson also ensured that personnel involved in the proceedings would be quarantined and that all solicitors and other staff involved in the proceedings on behalf of the respondents signed undertakings with respect to the disclosure of confidential information. 13 I assume that the information barriers were established for the benefit of the respondents but nevertheless they would have had the effect of erecting a barrier against any confidential information that Mr McCausland gave to Mr Stewart and Mr Lewin. 14 The applicant expressed concern, again through his solicitor, about the content of Harmers' web site. That appears to make reference to the firm's culture having at its heart "…principles of openness and consultation. Unlike many organisations, the primary decision-making body in the firm is the "Full Firm" which meets fortnightly and at which all members of staff actively participate. The decision-making ability of the Full Firm is enhanced by the firm's commitment to openness and consultation. All staff members are permitted access to all information relevant to the management of the firm, including all accounts information." 15 Through his solicitor, Mr Dunstan, the applicant expressed concern that all of the confidential material that he had given to Messrs Stewart and Lewin was therefore open for discussion and dissemination throughout the firm. Mr Robertson in his affidavit was at pains to point out that in reality the openness and consultation was confined to management information and accounts information but would not involve the sharing of detailed information on every file open in the firm. Nevertheless it is a matter about which Mr McCausland expressed concern. 9 At [16]-[19] of his judgment, Marks J summarised the contentions of the parties: 16 In essence, the applicant asserted that Harmers had been given confidential information by Mr McCausland and he had not consented to its disclosure and the firm should be restrained in acting adverse to his interests where that confidential information could, if made known to anyone representing the respondents, be used against his interests. 17 In essence, the respondents submitted that firstly, any confidentiality that did apply to the information given to Messrs Stewart and Lewin will be lost when the applicant filed lengthy affidavit material . 18 Secondly, it was submitted that in any event the information barrier is sufficient to ensure that no confidential information could be disclosed, nor could it be used for interests adverse to Mr McCausland. 19 Thirdly, it was said that there could only have been a limited amount of confidential information furnished during a conference that lasted not much more than one hour. 10 His Honour then referred to what he regarded as the relevant principles, which he said were set out in the judgment of Brereton J in the Supreme Court of New South Wales in Kallinicos & Another v Hunt & Others[2005] NSWSC 1181 at [76]: · Once the retainer is at an end, however, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure). · After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention, such duty having come to an end with the retainer. · However, the Court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over it's officers and to control its process in aid of the administration of justice. · The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. · The jurisdiction is to be regarded as exceptional and is to be exercised with caution. · Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. · The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief. 11 Of these principles, his Honour observed 21 All of these principles must however, in my opinion, be seen in the context of the nature of the solicitor/client relationship and the legal professional privilege which attaches. The solicitor/client relationship requires an obligation of confidence that is at the heart of principles by which legal professional privilege is established. It is the act of communication between solicitor and client as much as the nature of what is communicated that is important in this context… 12 At [23]-[24] Marks J referred to the need to balance the competing interests of the parties: 23 In determining this matter it is necessary to balance the competing interests of the applicant and of the respondents who seek to retain the solicitors of their choice. In this latter regard the evidence is that the respondents were introduced to Harmers by the solicitor with the carriage of the matter after he left Allens and joined another firm. There is no evidence that Harmers had any special or unique features or practised any particular speciality that would dictate that they should be retained by the respondents. Indeed, I infer from the evidence that the respondents had never used the services of that firm previously. This is a matter that I take into account in determining these proceedings in addition to the fact that their involvement in the proceedings has only occurred recently and that involvement has always been over the objection of the applicant through his solicitor. 24 There can be no doubt that confidential information was conveyed by Mr McCausland to Messrs Stewart and Lewin. I accept also that Harmers had put in place information barriers that seek to accord with the guidelines established by the Law Society. 13 This led his Honour to the following conclusions: 28 I am persuaded, on balance, that the interests of justice dictate that the applicant's motion should succeed even allowing for the erection of the information barriers. I have reached this conclusion in conformity with the principles to which I have referred and in particular the inherent jurisdiction referred to by Brereton J in Kallinicos. 29 Accordingly, I order that Messrs Harmers Workplace Lawyers be restrained from continuing to represent the respondents in these proceedings. 30 Whilst I have not received detailed submissions with respect to parallel proceedings commenced by Mr McCausland's wife Yvonne McCausland, I shall proceed on the basis that it would be inappropriate to permit Harmers to continue to represent the respondents in her proceedings having determined that they should not do so in connection with the proceedings instituted by the applicant. 31 The interlocutory applications with respect to both sets of proceedings were heard concurrently. On this basis, therefore, the order that I have made in connection with these proceedings will apply to the proceedings in which Yvonne McCausland is an applicant, being matter number IRC4589 of 2005. 32 The respondents are to pay the applicant's costs in and about these interlocutory proceedings in an amount assessed under the Legal Profession Act in default of agreement. Consideration 14 The usual principles applying to the grant of a stay were conveniently summarised by Wright J in Re Transport Industry - Waste Collection and Recycling (State) Award (2000) 102 IR 192 at [19]: (1) The mere filing of an appeal will not of itself provide a reason or demonstrate an appropriate case nor will it discharge the onus which the applicant bears. (2) A court has an appropriate discretion whether or not to grant the stay and as to the terms that would be fair if a stay be granted. (3) The onus is upon the applicant for a stay to demonstrate a proper basis for a stay that will be fair to all the parties. (4) In the exercise of its discretion all considerations including the balance of convenience and the competing rights of the parties need to be considered and weighed. (5) Where there is a risk that the appeal will prove abortive or nugatory if the stay is not granted then the normal exercise of discretion will result in the grant of a stay. (6) Although, generally speaking, it is inappropriate in relation to an application for a stay to speculate as to the appellant's prospects of success, this does not prevent a court, in the context of considering the specific terms of the stay that will appropriately and fairly adjust the interests of the parties, from making a preliminary assessment as to whether the appellant has an arguable case. 15 As to the observations in paragraph (2) of the extract from the decision in Transport Industry, we also refer to the discussion of principles in Burgess and Others v Mount Thorley Operations Pty Limited (2002) 119 IR 52 at [19] as follows: 19 The principles which govern the exercise of discretion in considering an application for a stay in appeal proceedings have been elucidated in two comparatively recent decisions: Re Transport Industry - Waste Collection and Recycling (State) Award (2000) 102 IR 192 and Campbells Cash & Carry v National Union of Workers, New South Wales Branch (2001) 104 IR 400. The appellant is required to establish or demonstrate a sufficient and proper basis for a stay. The decision as to whether to grant a stay is a discretionary one, to be made by the Court after considering, among other factors, the balance of convenience and the rights of the parties. In certain cases, it may be appropriate to consider (as a very preliminary assessment) whether an appellant has a reasonably arguable ground of appeal or whether there is a serious question to be tried. 16 As to the review of prospects for success in paragraph (6) of the extract of the decision in Transport, we refer to the following observations of Walton J in Campbells Cash & Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400 at [59] - [61]: 59 In my view, the Court of Appeal did not establish, in Cambridge Credit, a rigid or immutable rule or principle against any preliminary consideration of an appellant's prospect for success on appeal, where the appellant seeks a stay of the decision at first instance. Nor did other decisions following Cambridge Credit , such as Green v Brown . For example, the court in Cambridge Credit considered it appropriate that a preliminary assessment be made as to whether an appellant had an arguable case in order for a court to evaluate the specific terms of a stay that would fairly adjust the interests of the parties. 60 Furthermore, the principle against speculating on the prospects for success of an appeal was stated by the court in Cambridge Credit as a 'general principle' which arose because submissions made as to the substance of an appeal in support of an application for a stay were "typically and necessarily attenuated". Thus, the nature and extent of any limitation may vary depending upon the nature of the submissions and the issues raised in support of the application for a stay. 61 It is not appropriate in this decision to speculate upon the entirety of the circumstances which may warrant an examination of the prospects for success of an appeal with respect to an application for a stay. However, it is reasonably clear from the authorities earlier discussed that the Commission may be required to consider the prospects for success of an appeal in certain cases. The Commission may be required to consider such matters where the appeal would in all likelihood be a futility. In this respect, it should be borne in mind that an appeal brought pursuant to s187 of the Act requires the grant of leave for the appeal to proceed (see s188). Furthermore, it may be necessary to consider the prospects of success of the appeal in a preliminary way in order to appropriately consider the balance of convenience or competing rights and interests of the parties in a particular case. 17 The circumstance in which the foregoing principles are to be applied in these proceedings is unusual. The application is to stay his Honour's restraining order only to the extent of allowing Harmers to continue to represent the Surfing Interests on the appeal. 18 In making a preliminary assessment as to whether the Surfing Interests have an arguable case for the stay they seek, it is necessary to first consider the basis upon which Marks J made his orders. His Honour appears to have determined, "on balance", to make the restraining order against Harmers principally on the basis of the following considerations: (1) That the information barriers put in place by Harmers only "seek" to accord with the guidelines established by the Law Society. There would appear to be some implication in this finding that there might have been some risk of disclosure although his Honour does not expressly say so. (2) Harmers had no special or unique features or practised any particular speciality that would dictate that they should be retained by the Surfing Interests. (3) Harmers had only recently become involved in the proceedings and had not previously acted for the Surfing Interests. (4) The solicitor/client relationship requires an obligation of confidence that is at the heart of principles by which legal professional privilege is established. It is the act of communication between solicitor and client as much as the nature of what is communicated that is important in this context. (5) The Court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over it's officers and to control its process in aid of the administration of justice. (6) The test to be applied in the Court's inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice. 19 The following considerations are pertinent to Surfing Interests' prospects for success on appeal: (1) Harmers appear not to have been retained by either of the McCauslands. There appears to be no contract or agreement made by them with the firm. There also appeared to be no fees charged for one conference and two subsequent telephone conferences between Mr McCausland and two solicitors of the firm. (2) After that initial contact with Harmers, the firm put in place extensive measures to protect that confidential information. Marks J found that Harmers had put in place information barriers that seek to accord with the guidelines established by the Law Society. It is unclear how his Honour dealt with undertakings or arrangements in that respect in balancing the respective interests in the proceedings. (3) As senior counsel for the Surfing Interests submitted, there is a public interest in a litigant not being deprived of a choice of legal representative without good cause: Black v Taylor [1993] 3 NZLR 403; Grimwade v Meagher and Others [1995] 1 VR 446; Williamson & Anor v Nilant [2002] WASC 225; Bowen v Stott [2004] WASC 94. That public interest consideration is of even greater significance where a potential client has a discussion with a firm and subsequently decides not to retain that firm. There are, of course, countervailing considerations raised by the respondent, but authorities would suggest that a sound basis must exist to deprive another party of a choice in circumstances where effective steps have been taken to protect confidentiality. (4) A central issue here is the preservation of confidential information. The overriding test is whether there is a real, and not fanciful or theoretical, risk of disclosure: see Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 at 237 per Lord Millett ; Belan v Casey [2002] NSWSC 58 at [21]; British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 at [114]; Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550 at [34]). Marks J did not make an express finding that such a risk existed, although that is not to say the risk did not exist and that some other aspect of his judgment may not point to his consideration in that respect. 20 The foregoing considerations tend to support a conclusion that the Surfing Interests have some prospect for success and, it may be concluded, have an arguable case. 21 A further consideration is that during the course of the hearing on the stay application, senior counsel for the Surfing Interests was requested by the Full Bench to provide the terms of any undertakings that might be proffered to the Court by Harmers as a condition of any stay that the Court might grant. Those draft undertakings were subsequently provided in a letter to the Vice-President's Associate on 17 August 2006 from Watson Mangioni. On 25 August, Dunstan Legal for the McCauslands, filed submissions in response to the undertakings, and on 28 August, Watson Mangioni for the Surfing Interests filed a reply to the response. We will deal with the issues raised in the response and reply later in this judgment. 22 The proffered undertakings were in the following terms: Harmers Workplace Lawyers, of Level 28, 31 Market Street, Sydney NSW 2000 will undertake to the Industrial Court of New South Wales as a condition of the stay sought in Order 4 of the Notice of Motion filed on 9 August 2006 (Order 3 in the Draft Minute of Proposed Orders handed to the Court on 10 August 2006) as follows: 1. that only the following principals or solicitors will, without further leave of the Court, have the conduct of the Application for Leave to Appeal and Appeal in proceedings no 2876 of 2006, namely Mr Gregory Robertson and Mr Brad Buffoni; 2. to procure undertakings from Mr Robertson and Mr Buffoni in the form set out in Schedules "A1" and "A2" to this undertaking; 3. to procure undertakings from any staff employed by the firm who are not legal practitioners working under the direction and control of Mr Robertson and Mr Buffoni in respect of proceedings in proceedings no 2876 of 2006 in the form set out in Schedule "B" to this undertaking; 4. to procure from the principal and solicitor who have had conduct of proceedings in proceedings nos 5174 of 2004 and 4589 of 2005, namely Shana Schreier-Joffe and Mr Hamish Black in the form set out in Schedules "C1" and "C2" to this undertaking; and 5. to procure from the principal who met with Mr McCausland and who spoke to him by telephone in February and May 2004, namely Mr David Stewart, in the form set out in Schedule "D" to this undertaking. * ………………………………………. Senior Partner … August 2006 * Note: Mr Richard Lewin, who also met and spoke with Mr McCausland in February and April 2004, is no longer employed by Harmers Workplace Lawyers. 23 The proposed undertakings to be proffered by individual lawyers and employees of Harmers were appropriate undertakings aimed at ensuring there would be no relevant disclosure of information that might be adverse to the interests of the McCauslands during the appeal proceedings. The undertaking proposed in respect of Mr Buffoni was in the following terms: I, Brad Buffoni, Level 28, Market Street, Sydney NSW 2000, Legal Practitioner, undertake to the Industrial Court of New South Wales: 1. to have no involvement in proceedings nos 5174 of 2004 and 4589 of 2005; 2. that in the conduct of the proceedings in proceedings no 2876 of 2006 I shall not discuss or seek to discuss and shall not disclose any information which came to my knowledge or attention as a result of Mr McCausland meeting or speaking with Mr David Stewart and Mr Richard Lewin of this firm in February, April and May 2004, other than with Mr Gregory Robertson of this firm and any counsel instructed on behalf of the Appellants in the said proceedings; 3. to restrict access within the firm to all documents created by me or under my control (including any such documents stored electronically) in respect of proceedings no 2876 of 2006 and the Notice of Motion filed on 30 June 2006 in proceedings no 5174 of 2004 so as to permit access to them by only Mr Robertson, any counsel briefed on behalf of the Appellants in the said proceedings and any employee of Harmers Workplace Lawyers who has signed an undertaking in the form of Schedule "B". …………………………………………. August 2006 24 Schedule B, referred to by Mr Buffoni, was in the following terms: I, [insert name], an employee of Harmers Workplace Lawyers, Level 28, Market Street, Sydney NSW 2000, undertake to the Industrial Court of New South Wales: 1. that I shall not discuss or seek to discuss any matter concerning the proceedings in proceedings no 2876 of 2006 with anyone but Mr Gregory Robertson and Mr Brad Buffoni and shall not disclose to anyone else any information which comes to my knowledge or attention in respect of those proceedings; 2. to restrict access within the firm to all documents created by me or under my control (including any such documents stored electronically) in respect of proceedings no 2876 of 2006 and the Notice of Motion filed on 30 June 2006 in proceedings no 5174 of 2004 so as to permit access to them by only Mr Robertson, any counsel briefed on behalf of the Appellants in the said proceedings and any employee of Harmers Workplace Lawyers who has signed an undertaking in the form of Schedule "B". …………………………………………. August 2006 25 The undertaking proposed in respect of Mr Robertson, in his role as the firm's Compliance Officer, was in the following terms: I, Gregory Keith Robertson Level 28, Market Street, Sydney NSW 2000, Legal Practitioner, undertake to the Industrial Court of New South Wales: 1. to have no involvement in proceedings nos 5174 of 2004 and 4589 of 2005 other than in my role as Compliance Officer within the meaning of that term in the Information Barrier Guidelines issued by the Law Society of New South Wales; 2. that in the conduct of the proceedings in proceedings no 2876 of 2006 I shall not discuss or seek to discuss and shall not disclose any information which came to my knowledge or attention as a result of Mr McCausland meeting or speaking with Mr David Stewart and Mr Richard Lewin of this firm in February, April and May 2004, other than with Mr Brad Buffoni of this firm and any counsel instructed on behalf of the Appellants in the said proceedings; 3. to restrict access within the firm to all documents created by me or under my control (including any such documents stored electronically) in respect of proceedings no 2876 of 2006 and the Notice of Motion filed on 30 June 2006 in proceedings no 5174 of 2004 so as to permit access to them by only Mr Buffoni, any counsel briefed on behalf of the Appellants in the said proceedings and any employee of Harmers Workplace Lawyers who has signed an undertaking in the form of Schedule "B". …………………………………………. August 2006 26 Ms Schreier-Joffe and Mr Black are the principal and solicitor who have had conduct of proceedings at first instance. Their proposed undertakings were expressed in the following terms: 1. I will not have any involvement in proceedings no 2876 of 2006; 2. I shall not discuss or seek to discuss with any person who has the conduct of proceedings no 2876 of 2006 any matter concerning proceedings nos 5174 of 2004 or 4589 of 2005; 3. I shall not discuss or seek to discuss with Mr David Stewart of this firm or Mr Richard Lewin any matter which came to their knowledge or attention as a result of a meeting with Mr McCausland in February 2004 or telephone conversations between Mr Lewin and Mr McCausland in April 2004 and between Mr Stewart and Mr McCausland in May 2004… 27 Mr Stewart's proposed undertaking was as follows: 1. to have no involvement in proceedings nos 5174 of 2004, 4589 of 2005 and 2876 of 2006; 2. that I will not disclose any information which came to my knowledge or attention as a result of Mr McCausland meeting with Mr Richard Lewin and me in February 2004, or subsequent telephone discussions with Mr McCausland in 2004 with any person other than Mr Gregory Keith Robertson in his role as Compliance Officer within the meaning of that term in the Information Barrier Guidelines issued by the Law Society of New South Wales and any counsel instructed on behalf of the Appellants in the said proceedings if required of me; 3. to restrict access to all documents previously created by me or under my control (including any such documents stored electronically) so as to permit access to them by only those persons named in paragraph 2 above. 28 The proposed undertakings to the Court are designed to reinforce information barriers between lawyers and employees of Harmers involved in the appeal and those involved in the proceedings at first instance and to impose strict confidentiality conditions on any lawyer or employee with any knowledge of information imparted to Harmers by Mr McCausland. If the Court decides to seek those undertakings they are in a form that we regard as acceptable for the purpose of the appeal proceedings. 29 A third important consideration in this case is the balance of convenience. The orders made by Marks J will continue to restrain Harmers from acting for the Surfing Interests except in relation to the appeal if we were to grant the stay sought, in which case the undertakings we have referred to will, in themselves, provide an information barrier prohibiting disclosure by lawyers and employees of Harmers engaged on the appeal. 30 If we were to grant the stay as it is framed in the notice of motion we consider we could be satisfied, given the undertakings, that there would be no communication of information prejudicial to the McCauslands flowing from lawyers and employees of Harmers engaged in the appeal proceedings to their counterparts in the proceedings at first instance. Moreover, we note the proposed confidentiality undertakings by other lawyers in Harmers who may possess information imparted by Mr McCausland to Mr Stewart and Mr Lewin. 31 As Bergin J noted in Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd at [36], "Undertakings to the Court would be expected to heighten the consciousness for sensitivity and diligence in ensuring that the information remains confidential." This would be so given that any breach of the undertakings would expose the person to the prospect of contempt proceedings. 32 If we were not to grant the stay there would be no undertakings required of the lawyers and employees of Harmers and they would not be constrained beyond the bounds of the normal rules of confidentiality associated with the solicitor-client relationship that apply after that relationship has come to an end, although we note that Mr and Mrs McCausland appear to never have been clients of Harmers, which injects some degree of uncertainty into the question of Harmers' continuing obligations towards them. If, on the other hand, we were to grant the stay and, as a condition of doing so, require the undertakings that have been proffered, the protection of the confidential information would seem to us to be significantly enhanced. 33 At [12] of his extempore decision Marks J observed that Mr Robertson had: [I]nstituted the creation of information barriers in purported accordance with protocols established by the Law Society of New South Wales. Mr Robertson also ensured that personnel involved in the proceedings would be quarantined and that all solicitors and other staff involved in the proceedings on behalf of the respondents signed undertakings with respect to the disclosure of confidential information. 34 Mr Newall expressed concern that, notwithstanding the steps taken by Mr Robertson, there remained a real risk of the McCausland information being disclosed and referred to two instances where he intimated that may have occurred. What we are principally concerned with here, however, is the risk of information prejudicial to the McCauslands flowing from lawyers and employees of Harmers engaged in the appeal proceedings to their counterparts in the proceedings at first instance. We are satisfied that the proposed undertakings would provide the necessary protection in that regard, if we were to grant the stay on the limited terms proposed by the Surfing Interests. 35 The stay sought would also have the effect of limiting the costs involved. If the Surfing Interests were required to continue with Mangioni Watson or some other firm for the purposes of the appeal, other than Harmers, it would obviously add to the costs. 36 On the question of public policy considerations, Mr Newall submitted that if the stay were to be granted the public view of that would be that the McCauslands had been condemned to have solicitors acting against them who a judge of the Court had held to be in possession of confidential information and which the judge had seen fit to restrain from acting on that basis. 37 Apart from the fact that the correctness of the decision of the judge at first instance granting the restraining order is to be the subject of an appeal, what must be weighed up against the proposition put by Mr Newall is that the Surfing Interests are entitled on the appeal to be represented by the solicitors of their choice unless it can be shown there is a real risk of confidential information in possession of their solicitors being disclosed to the detriment of the McCauslands. In so far as the appeal proceedings are concerned (and having regard to the nature of the appeal proceedings), we are satisfied that risk would be overcome by making the stay order conditional on the undertakings proffered by Harmers and the individual lawyers and employees within that firm. 38 We, therefore, consider the balance of convenience lies with the Surfing Interests. 39 In reaching those conclusions we have evaluated the submissions filed by the McCauslands' solicitors (not, we note, by counsel) after the provision of the undertakings that it is proposed Harmers, its lawyers and employees will provide to the Court. We propose here to deal with the submissions by those representing the McCauslands in that respect (which are, in particular, said to be in response to the undertakings). In their response, the McCauslands contended that the undertakings would not cure "a reasonable concern that confidentiality may have been breached". However, the submissions, and the somewhat immoderate and inappropriate language used, go well beyond the leave granted in relation to what might be said about the undertakings and represent, to a large extent, submissions that should have been put in the first place. 40 Nevertheless, senior counsel for the Surfing Interests has provided a written reply to the submissions and as we earlier indicated we, therefore, propose to deal with them. 41 The substantive bases of the McCauslands' submission in response were that: (1) The undertakings are prospective only and cannot undo the harm that has already been done by relevant persons already being in possession of confidential information (eg, Ms Schreier-Joffe). (2) There were persons in possession of the information who are no longer, or who have never been with Harmers and have not given undertakings (eg, Mr Cross and Mr Lewin). (3) There has already occurred cross contamination between the "conflict team" at Harmers and the "substantive team" and the McCauslands have no confidence in the proposed undertakings. (4) The adoption by Mr Robertson of the dual roles of compliance officer and instructed solicitor in the conflict proceedings further compromises the effectiveness of his undertaking. 42 It was contended by the McCauslands that Ms Schreier-Joffe, for example, is already in possession of confidential information and the undertaking proffered by her cannot cure that problem. By her undertaking as an officer of the Court, Ms Schreier-Joffe is to have nothing to do with the appeal and will not disclose to those persons involved in the appeal any confidential information. It may be that if, in fact, Ms Schreier-Joffe is in possession of relevant confidential information, that fact may have a significant bearing on the outcome of the appeal. But in light of the proffered undertaking, there is no reason why the possession of confidential information by Ms Schreier-Joffe should be grounds to refuse a stay in the terms sought. 43 We take a similar view in relation to Mr Cross and Mr Lewin. The issue on appeal, if leave is granted, is whether or not Marks J was correct in his decision to restrain Harmers from continuing to represent the Surfing Interests. Whether or not Mr Cross or Mr Lewin possessed the relevant confidential information may be significant issues in the appeal itself but it is not a ground to refuse the stay and thereby prevent Harmers from prosecuting the appeal. We fail to see, for instance, how the fact that confidential information that may be in the possession of Mr Cross has any connection with the propriety of whether or not Harmers should be allowed to conduct the appeal, given that Mr Cross will have no involvement in the appeal and those at Harmers with whom Mr Cross may have had discussions and who may be involved in the appeal, are prepared to give relevant undertakings to the Court, breach of which may attract contempt proceedings. 44 As to the third and fourth bases of the McCauslands' submissions regarding the undertakings, we are satisfied the undertakings proffered will provide adequate protection for the McCauslands' interests in so far as the conduct of the appeal is concerned. 45 In short, we accept the undertakings proffered by Harmers, its lawyers and employees. Because these undertakings require the giving of undertakings by individual persons, we will make any stay orders conditional upon the provision of them in writing in duly executed form. 46 We make the following orders: (1) That the Orders of the Honourable Justice Marks made on 14 July 2006 in Matter No. IRC 5174 of 2004 and Matter No. IRC 4589 of 2005 that Harmers Workplace Lawyers be restrained from continuing to represent the Respondents in those proceedings be stayed pending the outcome of the appeal in these proceedings (Matter No. IRC 2876 of 2006) to the extent that they restrain Harmers Workplace Lawyers from acting in these proceedings and prosecuting the appellants' Application for Leave to Appeal and Appeal. (2) That Order (1) hereof is conditional, and shall only take effect, upon the filing in the Industrial Registry of the signed undertakings in the form proffered by Harmers Workplace Lawyers in the attachments to the letter from Watson Mangioni Lawyers Pty Limited to the Acting President's Associate dated 17 August 2006. (3) The signed undertakings in Order 2 shall be served upon the solicitors for the McCauslands within 24 hours of their filing in the Industrial Registry. (4) Costs are reserved. 47 In light of the orders we have made we consider the Surfing Interests are in no different position to any other litigants seeking to appeal and no basis exists for expedition in that circumstance. We decline to make an order for expedition. The matter is listed for directions before Walton J at 9.45 am on Monday 11 September 2006. _____________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.