Case: Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248 ; (2001) 4 VR 501
Outcome: considered
Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248 ; (2001) 4 VR 501 ( 'Spincode' ) at 521-524 [52]-[58], Brooking JA identified three possible grounds for restraining a solicitor or counsel from acting for a particular party to litigation: the danger of misuse of confidential information; a 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; and the inherent jurisdiction of the court to control the conduct of solicitors and counsel as officers of the court. These three grounds represented the orthodox legal position in Australia prior to the decision of the House of Lords in Prince Jefri Bolkiah v KPMG (a firm) [1998] UKHL 52 ; [1999] 2 AC 222 ( 'Bolkiah' ) which held that the duty of loyalty did not survive the termination of the relationship with the client. Brooking JA's analysis in Spincode has been consistently followed and applied in Victoria: see Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 ; Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 ; and Adam 12 Holdings Pty Ltd v Eat &amp; Drink Holdings Pty Ltd [2006] VSC 152. But it has not been followed in New South Wales. Although the Supreme Court of New South Wales has declined to follow Spincode , insofar as Brooking JA held that the equitable obligation of loyalty owed by a solicitor to his or her client survives the termination of the retainer, the decisions in New South Wales do not cast any doubt upon the court's inherent power to restrain solicitors from acting in a particular case having regard to the interests of the administration of justice. Similarly, the court's inherent supervisory jurisdiction over solicitors and counsel was not relevant to the House of Lords decision in Bolkiah . For the purposes of this case, the controversy concerning the duty of loyalty, and whether it extends beyond termination of the retainer, can be put to one side. Counsel for the Dean interests does not contend that his clients were formerly clients of Vogrig or WVL. No question arises of confidential information or its potential misuse. As I have already mentioned, the sole ground for injunctive relief is the third ground identified in Spincode , namely the inherent power of the court to restrain its officers from acting for a particular client in litigation when such a restraint is required by the interests of justice. There is, accordingly, no need for me to consider whether the weight of authority in the Federal Court supports the Victorian approach rather than that adopted in New South Wales: see Wan v McDonald (1992) 33 FCR 491 at 512-513; PhotoCure ASA v Queen's University at Kingston (2002) 56 IPR 86 ( 'PhotoCure' ); Waiviata Pty Ltd v New Millennium Publications Pty Ltd [2002] FCA 98 at [10] ; Bureau Interprofessionnel Des Vins De Bourgogne v Red Earth Nominees Pty Ltd (t/as Taltarni Vineyards) [2002] FCA 588 at [18] ; and Lincoln v Holmesglen Institute of TAFE [1999] FCA 601 ( 'Lincoln' ). In PhotoCure , Goldberg J did not refer to his earlier decision in Lincoln . This is not surprising because there is no conflict between the two decisions. PhotoCure concerned an application by a former client based primarily on the risk of misuse of confidential information. His Honour's discussion of Bolkiah , Belan v Casey and Spincode was directed to the question whether a former client was confined to the ground of misuse of confidential information, or whether the client could also rely upon the ground of breach of a duty of loyalty as suggested by Brooking JA in Spincode . Goldberg J did not express any concluded views concerning the Court's supervisory jurisdiction. At 98 [57], his Honour said that: '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.' His Honour also said at 98 [58] that he was troubled because an initial reaction to the issue was that it was inappropriate for a solicitor to act against a former client where the subject matter of the retainer is the same as the retainer by the former client. In my opinion, nothing in PhotoCure should be read as foreclosing this Court's power to exercise inherent jurisdiction over the conduct of solicitors and counsel in litigation in this Court.