NSW’s latest spin on Spincode’s duty of loyalty

In Cleveland Investments Global Ltd v Evans [2010] NSWSC 567, Justice Ward reviewed the authorities spinning off Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248; (2001) 4 VR 501, in which Justice of Appeal Brooking set out his views in relation to the ‘duty of loyalty’ as a grounds for restraining solicitors from acting.  Her Honour reviewed the authorities in considerable detail (so that the judgment is a useful repository of the state of the law up there in NSW), and concluded:

’51 Here, the applicant for an order restraining a solicitor from continuing to act against his former client is unable to identify any particular confidential information of which there is a danger of misuse in the current situation. However, there is a reasonable basis for the apprehension by Ficaro that it is not aware of all that has relevantly passed between Mr Evans and Mr Oliveri (or his firm) during the period in which Mr Oliveri was the solicitor on the record for Ficaro.

52 It seems to me that the fair-minded reasonably informed member of the public would have an expectation that a legal practitioner who has been retained by a company, and received instructions from a company director on the retainer of the company and for the benefit of the company, in relation to a claim made against the company (being a claim which related in part to what the company director himself was said to have done) should not be seen thereafter to act for that company director in prosecuting that very same claim against the company in the same set of proceedings. To the extent that such a member of the public were to be informed that the solicitor in question has resisted (or maintains a right to resist) the provision to the company of documents or information obtained from the company director while he was acting for the company, I think this would only strengthen the perception that justice was not being seen to be done if the retainer of that solicitor were to continue.

53 In the exercise of the court’s inherent jurisdiction over its officers and in the due administration of justice, I am persuaded that Mr Oliveri and his firm should be restrained from continuing to act for the defendant in these proceedings.’

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