2012 WAIRC 00291
Alleged non observance of Union Rules

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PRESIDENT

CITATION : 2012 WAIRC 00291

CORAM
: THE HONOURABLE J H SMITH, ACTING PRESIDENT

HEARD
:
WEDNESDAY, 4 APRIL 2012

DELIVERED : THURSDAY, 10 MAY 2012

FILE NO. : PRES 3 OF 2011

BETWEEN
:
ROBERT MCJANNETT
Applicant

AND

CONSTRUCTION FORESTRY MINING AND ENERGY UNION OF WORKERS
Respondent

Catchwords : Industrial Law (WA) - application pursuant to s 66 of the Industrial Relations Act 1979 (WA) - alleged breaches of union rules -interlocutory application for orders to restrain respondent's solicitors from representing the respondent on grounds of conflict of interest - Supreme Court inherent supervisory jurisdiction to protect administration of justice considered - no jurisdiction for the Commission to entertain the application - in any event not satisfied that a conflict of interest arises at this point in the proceedings
Legislation : Industrial Relations Act 1979 (WA) s 27(1), s 31(1)(c)(iv), s 66, s 66(2);
Legal Profession Act 2008 (WA) s 148(1)(b), s 577, s 578, s 579;
Legal Profession Conduct Rules 2010 (WA) r 15, r 16, r 42;
Western Australian Barristers' Rules r 95.
Result : Interlocutory application dismissed


Representation:
Counsel:
APPLICANT : IN PERSON
RESPONDENT : MR T J DIXON AND WITH HIM MS S HOLMES
Solicitors:
APPLICANT : IN PERSON
RESPONDENT : SLATER & GORDON

Case(s) referred to in reasons:
Black v Taylor [1993] 3 NZLR 403
Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307
Comcare v John Holland Rail Pty Ltd [2011] FCA 622; (2011) 283 ALR 111
Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299
D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118
Downs-Stoney v Derbarl Yerrigan Health Service [2004] WAIRC 11100; (2004) 84 WAIG 2612
Fordham v Legal Practitioners' Complaints Committee (1997) 18 WAR 467
Grassby v The Queen (1989) 168 CLR 1
Grimwade v Meagher [1995] 1 VR 446
Holborow v MacDonald Rudder [2002] WASC 265
Ismail-Zai v The State of Western Australia [2007] WASCA 150
Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561
Mcjannett v Reynolds, Secretary, The Construction Forestry Mining and Energy Union of Workers [2009] WAIRC 1282; (2009) 89 WAIG 2395
McVeigh v Linen House Pty Ltd [1999] VSCA 138; [1999] 3 VR 394
Murcia & Associates (a firm) v Grey [2001] WASCA 240; (2001) WAR 209
Newman v Phillips Fox (a firm) [1999] WASC 171; (1999) 21 WAR 309
Rakusen v Ellis Munday & Clarke [1912] 1 Ch 831
Re Vandervell’s Trusts (No 2); White v Vandervell Trustees Ltd [1974] Ch 269; [1974] 1 All ER 47
Rowe v Transport Workers’ Union of Australia (1998) 160 ALR 66, 82; (1998) 90 FCR 95
Stacey v Civil Service Association of Western Australia (Incorporated) [2007] WAIRC 00568; (2007) 87 WAIG 1229
Thompson v Reynolds [2009] WAIRC 00024; (2009) 184 IR 186; (2009) 89 WAIG 287
Wan v McDonald (1992) 33 FCR 491
Case(s) also cited:
Belan v Casey [2002] NSWSC 58 (4 February 2002)
Bowen v Stott [2004] WASC 94 (7 May 2004)
British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 (20 February 2004)
Clay v Karlson (1997) 17 WAR 493
Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 (I June 2010)
Colonial Portfolio Services Ltd v Nissen (2000) 35 ACSR 673; [2000] NSWSC 1047
Orr v Ford (1989) 167 CLR 316
Prince Jefri Bolkiah v KPMG (a firm) [1998] UKHL 52; [1999] 2 AC 222
Re Holmes; re Electric Power Co Ltd (1877) 25 WR 603
South Black Water Coal Ltd v McCullough Robertson [1997] QSC 77
Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248; (2001) 4 VR 501
Surfing Hardware International Holdings v William McCausland (No. 3) [2007] NSWIRComm 64
Vakauta v Kelly (1989) 167 CLR 568

Reasons for Decision
Background
1 The substantive application is made by Robert Mcjannett (the applicant) pursuant to s 66 of the Industrial Relations Act 1979 (WA) (the Act). In the substantive application the applicant applies for orders to be made under s 66(2) of the Act on grounds that the Construction Forestry Mining and Energy Union of Workers (the respondent) has not observed the rules of the union. In a further amended statement of particulars filed on 16 February 2012, the applicant provides what he says are 47 separate breaches of the rules of the respondent which he describes as charges.
2 Since the filing of the substantive application two interlocutory applications have been filed:
(a) On 2 April 2012, the respondent filed an application to summarily dismiss the substantive application. The application to dismiss is listed for hearing on 13 and 14 June 2012.
(b) In a directions hearing held on 16 February 2012, the applicant made a submission that the respondent’s solicitors, Slater & Gordon, and the respondent’s barrister, Mr T J Dixon, should not be allowed to represent the respondent, as to do so would raise a conflict of interest. After hearing submissions, leave was granted to counsel to appear at the directions hearing as upon a view of the papers that had been filed by the parties in the proceedings at that time, there did not appear to be any material before me that could properly raise such an issue. On 17 February 2012, the applicant was informed by my associate that if he wished to renew his submission at a directions hearing listed on 4 April 2012, he should give notice to the respondent, through its solicitors, of his intention to do so and file and serve any material in support of his submission in respect of a conflict of interest at least seven days prior to 4 April 2012. On 24 February 2012, the applicant filed an outline of submissions in support of an application to strike out the respondent’s solicitors and counsel for alleged contravention of r 15 and r 16 of the Legal Profession Conduct Rules 2010 (WA). These reasons for decision deal with the disposition of this interlocutory application.
3 The applicant’s written submissions in support of his application for orders to prohibit the respondent’s solicitors from acting are short and state as follows:
1. On 26 August 2009 the respondents [sic] lawyer obstructed the applicant in his due and rightful attempt to inspect the books of the union. This matter was expanded on in the affidavit sworn on 7 September 2009 and filed in the matter of Pres 5 of 2009.
2. At the attempted book inspection outlined in paragraph 1 the applicant was in the company of a bodyguard who witnessed the respondents [sic] lawyer carry out the obstruction.
3. The respondents lawyer has been identified in the charges filed in this matter not least being charge 13 and charge 19 which amounts to a conflict of interest under section 148(1)(b) of the legal profession act 2008 and sections 15 and 16 of the legal profession conduct rules.
4. On 13 February 2012 I sent an email to the associate to the acting President copied to the respondents [sic] lawyer flagging the alleged conflict of interest. Read receipts were received for this email from the recipients.
5. During the hearing brought on by the respondents lawyers on 16 February 2012 the applicant vigorously objected to the presence of Slater & Gordon at the bar table and to their related counsel appearing via video link but this was outrageously ignored and overruled with claims that I had not raised the issue prior to the hearing.
6. It is fair to assume that the respondent is paying Slater & Gordon to represent them out of union members [sic] funds. This constitutes a gross conflict of interest to the members as a union member is the applicant who does not have access to the members [sic] funds. The applicant is acting both as a member and in the interests of the members.
7. The respondent is not compelled in any way whatsoever to hire lawyers to represent themselves against other members. If there were any compelling case to do so then the same argument would apply to the applicant who is also a member.
8. The orders made on 16 February 2012 should not have been made whilst the conflict of interest was continuing at the bar table.
4 The charges relevant to the claim of conflict of interest are said to arise out of charge 13 and charge 19.
(a) Charge 13
5 In the applicant’s amended statement of particulars filed on 16 February 2012, charge 13 is set out as follows:
Breach of rule 33- During the general elections of 2008/09 the union refused to allow the applicant to inspect the books causing the applicant to make application to the Commission to carry out the book inspection. When the applicant was finally granted a book inspection the union instructed their lawyer to obstruct the inspection which he did.
6 On 1 March 2012, pursuant to orders made on 17 February 2012, the respondent sought further and better particulars of the applicant’s further amended particulars of claim filed on 16 February 2012. In respect of charge 13 the respondent sought the following particulars:
Request: in respect of this charge specify the usual particulars of the Charge, including the usual particulars for each of the following:
a. the application made by the applicant to the Commission;
b. the union representative who is alleged to have refused a book inspection;
c. the day in which the alleged refusal was said to have occurred;
d. the lawyer who is alleged to have obstructed the inspection;
e. the manner in which the lawyer is said to have obstructed the inspection;
f. how this Charge is to be reconciled with the facts relied upon in the Applicant's affidavit sworn on 7 September 2009 and filed in Pres 5 of 2009 on 8 September 2009; and
g. how this Charge can be reconciled with the outcomes in:
(i) Mcjannett, in the matter of an application for an inquiry in relation to an election for offices in the Construction, Forestry, Mining and Energy Union, Western Australian Branch (No 2) [2009] FCA 1015 (10 September 2009);
(ii) Mcjannett v Reynolds [2009] WAIRComm 211; (2009) 89 WAIG 633;
(iii) Robert Mcjannett -v- Kevin Reynolds [2009] WAIRComm 1282 (28 October 2009)
7 On 21 March 2012, the applicant provided the following further and better particulars of charge 13, among other charges, as follows:
13.(a) The respondent in this application was the respondent in that application. This is not discovery.
(b) The Secretary represented by lawyer Simon Millman and Peta Arnold.
(c) 26 August 2009 was the day however difficulties in gaining co-operation for the book inspection appeared in the weeks prior to 26 August 2009.
(d) Simon Millman of Slater & Gordon.
(e) Mr. Millman refused to allow inspection of the joining applications for both unions, refused to allow inspection of the financial records for both unions, and refused to allow a proper inspection of the membership roll for both unions.
(f) This charge is not to be reconciled with the facts relied upon in Pres 5 of 2009 other than the contributing evidence that a book inspection had been obstructed on 26 August 2009.
(g) This charge cannot be reconciled with those matters as they were not matters before the full bench and the issue of obstruction of the book inspection was not sent to trial.
(b) Charge 19
8 In the applicant’s amended statement of particulars filed on 16 February 2012 charge 19 is set out as follows:
Multiple breaches of rule 3(1)(2)(3)(24)(26) and rule 35(1)(c)(g)(i)- The assistant secretary knowingly and repeatedly committed criminal offences of assault and trespass since 2001 mostly whilst not being in possession of a right of entry and then sought payment of the ensuing legal costs and fines from members funds. The executive committed multiple breaches of the union rules by authorizing the behavior of the assistant secretary and repeatedly authorizing the payment of the enormous costs incurred by the repeated unlawful behavior from members [sic] funds. This is a gross departure of trust and accountability to the members.
9 In respect of charge 19 the respondent sought the following particulars:
Request: in respect of this charge specify the usual particulars of the Charge, including the usual particulars for each of the following:
a. how it is alleged that the assistant secretary was acting under the CFMEUW Rules at the times alleged;
b. the conduct which allegedly constitutes criminal assault since 2001;
c. the conduct which allegedly constitutes criminal trespass since 2001;
d. the manner in which the Assistant Secretary sought payment of the ensuing legal costs and fines from members funds;
e. the members [sic] funds utilized;
f. the manner in which the 'behavior' was authorized by the executive;
g. the 'gross departure of trust' referred to; and
h. any Rule which prevents the CFMEUW from funding an official's criminal prosecution attracted while acting as an officer or employee of the CFMEUW.
10 The applicant in response to the respondent’s request for further and better particulars provided the following further and better particulars of charge 19:
19.(a) The Assistant Secretary was acting in his capacity of Assistant Secretary of both unions. What is done in the name of the Federal union is also done in the name of the State union and vice versa.
(b) The same conduct for which he has been charged and prosecuted numerous times. See criminal record as adduced in App. 31 of 2011.
(c) See (b) above
(d) By pleading to the executive to authorise payment from the union funds and by arranging and participating in the collection of levies from the members.
(e) Payments to Slater & Gordon out of union funds.
(f) The executive failed to curtail the behaviour which itself is a failure of their fiduciary duty toward the union and its members.
(g) The members place their trust in the executive by electing them or moreover show their trust by not mounting election challenges against them. The failure of the executive to stop the behaviour is a gross departure of trust.
(h) Rule 3 and 35. Also the penalties imposed against the Assistant Secretary and paid by the union were against the Assistant Secretary not against the union therefore by adopting to pay the penalties and costs with members funds was removing the deterrent placed upon the Assistant Secretary by the courts and can be said was encouraging recidivism by the Assistant Secretary.
(c) The inspection by the applicant of the respondent’s records in 2009
11 The lawyer whose conduct the applicant says is the subject of an alleged conflict of interest is Mr Simon Millman who is a solicitor employed by the respondent’s solicitors, Slater & Gordon. In the applicant’s submissions he refers to an affidavit sworn by him on 7 September 2009 in PRES 5 of 2009. In the affidavit sworn on 7 September 2009, the applicant sets out what he says occurred when he sought and obtained inspection of records of the respondent on 26 August 2009. In the affidavit he stated as follows:
1. I am the applicant in this case and I am a member of the CFMEU Construction & General Division Western Australian Divisional Branch. This affidavit is in addition to my previous affidavit filed in this case on 9 August 2009.
2. From the evidence I have viewed and adduced previously, and will adduce in this affidavit, I cannot ascertain if I am a member of the CFMEUW.
3. Since July 2008 I have interviewed 91 members of the CFMEU with regard to their membership of both the CFMEU C & G and CFMEUW. On every occasion the members interviewed claimed they were not told or aware they were joining the CFMEUW and believed they were joining the federal union. When shown the schedule attached to the union rules every person interviewed believed they had never seen nor signed an application form like this.
4. I have never been charged a joining fee by the CFMEUW or issued a receipt for same and the 91 other members I interviewed claimed they had also not been charged or receipted.
5. I have never received a union ticket from the CFMEUW and the 91 other members claimed they have never received union tickets from the state union either.
6. On 14 July 2009 I wrote as a member to the State Secretary and requested to inspect the union records under Rule 33. This letter is Annexure 'B' to my first affidavit. This letter clearly describes the records I requested which were mostly records required to be in use and kept under rule 10 of the union rules.
7. There was a good deal of conferral between the intervener and myself regarding the reasons I wanted to see the records and which records I wished to see. Some of this correspondence is included in my first affidavit however attached to this affidavit and marked annexure 'A' is a letter from the intervener dated 14 August 2009 in which it is stated 'Please urgently advise of the relevant years for the material you wish to inspect.'
8. Attached to this affidavit and marked Annexure 'B' is a reply I faxed to the intervener on 18 August 2009 and the successful transmission report I printed out immediately after sending the fax.
9. On Wednesday 26 August 2009 at approximately 9.15am I attended the registered office of the union at 82 Royal St. East Perth in the company of a witness to inspect the records. I was met by Mr. Simon Millman the lawyer for the intervener and led into a side room where Ms. Peta Arnold was waiting. Mr. Millman controlled the meeting and told me there was a sample box of about 200 cards and a copy of the 2008 financial statement for the union. Both of these things were on the table in front of us. I was also told they were going to show me some computer records out the back. I protested and said 'I did not ask to see any computer records.'
10. Referring to the box on the table in front of me, I said to Mr. Millman 'those don't look like records from the CFMEUW' and he replied 'we can't answer any questions, any questions will need to be put in writing and answered at a later stage.' I then proceeded to inspect the box of cards in front of me.
11. I quickly flicked through every card in the box to see if there were any obvious differences, and from this discovered 3 variations of the one card. These were as follows- Firstly there were green cards with application details on one side and blank on the other. Secondly there were green cards with the same application details on the front but also had eftpos and credit card payment details on the back. I drew a representation of the front and back of these cards. Third there were green cards with black and white photocopy of the same application format glued down over the original card. I asked Mr. Millman for an explanation about the stuck over cards and he again declined to comment.
12. None of the cards contained the wording in the schedule attached to the union rules. The wording on the schedule is -
THE SCHEDULE
APPLICATION BY CANDIDATE FOR MEMBERSHIP
I ...................................................................................................................
of .................................................................................................................
HEREBY APPLY to become a member of The Construction, Forestry, Mining and Energy Union of Workers, an Organisation of Employees registered under the Industrial Relations Act (WA) 1979.
DATED the ..... day of ................ , 20......
Date of receipt by Secretary: the ..... day of ................ , 20.....
Signature of Secretary ............................................................................................
Signature of Applicant ............................................................................................
Signature of Witness ...............................................................................................
13. I took 6 cards from the box and checked the names against a printout of the 2009 election roll I had in my possession and none of the 6 persons were on the roll. I recorded all the details of these 6 persons in my notes. I asked Mr. Millman and Ms. Arnold if they were going to show me any records from the CFMEUW as at May 2009 and they again declined to comment. I showed them a copy of my July 14 2009 letter to the Secretary and protested that they have not shown me the records of the CFMEUW. Mr. Millman and his associate continued to give no answers.
14. The meeting at this point had gone for 45 minutes when Mr. Millman then pushed the 2008 financial report across the table to me. I told Mr. Millman that I did not request the financial report as it is a public record anyway and I am already aware of its dodgy content. Mr. Millman then invited me to inspect the computer record he mentioned earlier.
15. I was then led to another side room where a computer was running a list of names on an old NT program which was very difficult to navigate. With a lot of assistance from Ms. Arnold I managed to check 3 names over about 10 minutes. One of these names appeared on the 2009 roll whilst the other 2 did not. It was not possible to determine what this list of names was in relation to. It could have been a list of bingo players as much as a list of bona-fide union members.
16. The meeting went for one hour and the union did not produce any records of the nature I requested under rule 33 in my letter of July 14 2009 which are records that are required to be kept under the industrial relations act and under rule 10 of the union rules. It follows from this that there are no records and no members of the CFMEUW. This also corroborates my allegation that a record of a federal union member was used to fraudulently gain transitional registration in the Federal Industrial Commission.
12 The request to inspect records of the respondent was contained in a letter from the applicant to the secretary of the respondent dated 14 July 2009. In that letter the applicant had sought inspection of the following records:
In accordance with rule 33 of the union rules I request you offer up the union books for inspection. This request includes the following-
1. Receipts and banking records from the CFMEUW for the total amount of members, showing payment of joining fees at the date of applying to join in accordance with rule 10 of the union rules.
2. Receipts and banking records for the total number of members showing payment of 1 half yearly contribution at the date of joining in accordance with rule 10 of the union rules.
3. Approved membership applications for the total number of members in accordance with 'the schedule' attached to the union rules and rule 10 of the union rules.
4. The register of members as at or immediately prior to the date of viewing showing all and only bona fide financial members of the CFMEUW in accordance with rule 33 of the union rules.
Kindly advise me in writing within 7 days of receipt of this letter of a convenient time to attend the union office and inspect the books as specified above.
13 The applicant’s request was later clarified in a document annexed as ‘B’ to the affidavit. In the document annexed as ‘B’ the applicant stated the parameters of the request to be as follows:
The materials I wish to inspect are in relation to all members of the CFMEUW as at May 2009. Regardless of joining date
The orders sought in this application
14 In this interlocutory application, the applicant seeks the following orders:
1. Slater & Gordon and their related Counsel be struck off the case and ordered not to participate in any further proceedings either directly or indirectly.
2. The orders made on 16 February 2012 be rescinded.
3. The Respondent ordered to either self represent or arrange counsel that does not have a conflict of interest within the 47 charges filed in this matter and is either acting pro-bono or not remunerated with the use of union members funds.
4. The Respondent ordered to prove the source of remuneration paid to any counsel hired to represent them in this matter since filing the form 1 application.
5. Notwithstanding paragraphs 3 & 4 above the Respondent ordered to give the applicant equal shared access to funds for the purpose of remunerating hired counsel to represent him in this matter.
The respondent’s submissions
15 In an outline of submissions in reply to the applicant’s application filed by the respondent on 28 March 2012, the respondent points out that the written submissions made by the applicant appear to raise two general grounds of objection, namely:
(i) 'The respondent's lawyer has been identified in the charges filed in this matter not least being charge 13 and charge 19 which amounts to a conflict of interest under section 148(1)(b) of the legal profession act 2008 and sections 15 and 16 of the legal profession conduct rules' - based (apparently) on the conduct of a lawyer employed by Slater & Gordon during the Applicant's attendance at the CFMEUW offices for the purpose of inspecting its books pursuant to Rule 33 of the CFMEUW Rules on 26 August 2009 (Applicant’s Submissions at [1]-[3]).
(ii) A 'conflict of interest to the members as a union member is the applicant who does not have access to the members [sic] funds.' (Applicant’s Submissions at [6])
16 When the application to strike out the respondent’s solicitors was heard, the applicant particularised what he contends was conduct amounting to obstruction on 26 August 2009 as not being allowed to see:
(i) any financial records other than what was published in the union magazine and annual report;
(ii) joining cards, except for the random sample; or
(iii) the membership roll of the respondent and its federal body, the Construction, Forestry, Mining and Energy Union, other than to view records on an old NT computer.
17 The respondent in their written submissions points out that in charge 13 there is an allegation of obstruction levelled against the solicitor, Mr Millman. The respondent says this allegation should be rejected at the outset based on the applicant’s own evidence. This matter was litigated in PRES 5 of 2009 as is made clear in the applicant’s affidavit. The respondent contends that this charge should fail as an abuse of process for that reason alone. At the highest the evidence in the affidavit is that Mr Millman refused to answer certain questions which the respondent says cannot amount to obstruction of any right conferred by r 33 of the rules of the union. Rule 33 – Inspection of Books simply says:
The Books and Register of Members of the Union shall be open for inspection at the registered office by any financial member of the Union at all reasonable times during business hours.
18 On 31 August 2009, some five days after the inspection, a directions hearing was held before Ritter AP in PRES 5 of 2009. Mr Millman appeared for the CFMEUW and Mr Mcjannett appeared in person. Mr Mcjannett variously submitted:
(i) 'Yes, I inspected some records which weren’t records of the CFMEUW and I came to that inference and I texted to a colleague ..': at T8
(ii) 'I'm entitled to draw a conclusion from what I inspected last Wednesday morning, your Honour, and I'm entitled to convey that to my colleagues': at T9
19 The respondent points out that nowhere in the transcript of the hearing on 31 August 2009 did the applicant:
(a) Object to Mr Millman appearing in the proceedings;
(b) Refer to any obstruction or the like; or
(c) Suggest that anything other than ‘an inspection had occurred’.
20 The applicant’s affidavit was dealt with by Ritter AP in Mcjannett v Reynolds [2009] WAIRC 1282; (2009) 89 WAIG 2395 (PRES 5 of 2009). There was no complaint that he was not shown records. Rather, he relied on the fact that, as he was unable to see any records which complied with the union rules, they therefore did not exist and his conclusion that there were no members was to be accepted. After hearing from the parties, PRES 5 of 2009 was summarily dismissed pursuant to s 27(1) of the Act.
21 As the respondent points out in its written submissions, and the applicant concedes, the basis of the argument that a conflict arises in respect of charge 13 is that a solicitor who is on the record would be a material witness in the proceedings.
Jurisdiction to make the orders sought by the applicant
22 The first order proposed by the applicant would, if made, provide injunctive relief against a third party, Slater & Gordon.
23 The common law jurisdiction of a court to restrain solicitors and barristers from acting was considered in Ismail-Zai v The State of Western Australia [2007] WASCA 150. In that matter Steytler J observed that there are three grounds that can form the basis of the intervention by the Supreme Court to restrain lawyers from acting for parties [19]. These are:
(a) Where it is necessary to ensure the protection of confidential information provided by a former client to the lawyer in the course of the lawyer/client relationship: Rakusen v Ellis Munday & Clarke [1912] 1 Ch 831, D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118, Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307.
(b) Where the court, acting under its inherent supervisory jurisdiction over its officers, considers it is necessary to do so in order to ensure the due administration of justice: Black v Taylor [1993] 3 NZLR 403, Grimwade v Meagher [1995] 1 VR 446, Newman v Phillips Fox (a firm) [1999] WASC 171; (1999) 21 WAR 309 [21] – [25], Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561, 571 – 582.
(c) Where it is necessary to prevent a breach of a supposed fiduciary duty of loyalty owed by a lawyer to a former client: Wan v McDonald (1992) 33 FCR 491, 512 – 513; Fordham v Legal Practitioners' Complaints Committee (1997) 18 WAR 467, 489 – 490, McVeigh v Linen House Pty Ltd [1999] VSCA 138; [1999] 3 VR 394.
24 Of importance to the facts of this matter, Steytler J in Ismail-Zai also observed that the three categories touch upon the circumstances in which a lawyer may not act against a former client [19]. In this matter, however, such circumstances do not arise as the applicant is not a former client of the respondent’s solicitors. Nor could it be said that any relationship arises between the applicant as a member of the respondent so as to create any relationship of client between the applicant and the respondent’s solicitors as the respondent is a separate corporate and juristic entity from its members: Rowe v Transport Workers’ Union of Australia (1998) 160 ALR 66, 82; (1998) 90 FCR 95, 113, see also the discussion in Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 as to the circumstances where a union as a corporate body can be a party to the actions of its members.
25 Subsequent to Steytler J considering the principles at common law that govern the making of restraint orders against lawyers, the Legal Profession Act 2008 (WA) came into effect and the Legal Practice Board made the Legal Profession Conduct Rules pursuant to s 577, s 578 and s 579 of the Legal Profession Act which enable legal profession rules to be made for among other matters, the standards of conduct expected of Australian legal practitioners to whom the rules apply. Rule 42 of the Legal Profession Conduct Rules now embodies with modification some conduct that comes within the second ground discussed in paragraph [23](b) of these reasons. Rule 42 of the Legal Profession Conduct Rules provides:
(1) A practitioner must not act for a client in the hearing of a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence centrally material to the determination of contested issues before the court.
(2) In the circumstances provided for in subrule (1) an associate of the practitioner’s law practice may act for the client if —
(a) in the practitioner’s reasonable opinion there are exceptional circumstances that justify the associate acting; and
(b) the client, having been given an opportunity to obtain independent legal advice concerning the issue, consents to the associate acting.
26 This provision contemplates circumstances where a lawyer is called to give evidence irrespective of whether a case involves a former client or not. This rule reflects in part a convention that is applied in Australian courts that requires a barrister to refuse to accept or retain a brief or instructions to appear before a court if the barrister is to be a witness to a substantive matter rather than to give evidence of a limited and incidental procedural matter in a case: Re Vandervell’s Trusts (No 2); White v Vandervell Trustees Ltd [1974] Ch 269, 283 – 284; [1974] 1 All ER 47, 59; recently applied in Comcare v John Holland Rail Pty Ltd [2011] FCA 622; (2011) 283 ALR 111 [98] (Bromberg J). This convention is set out in various barristers’ rules that apply across Australia: see, for example, r 95 of the Western Australian Barristers' Rules.
27 The reason why a legal practitioner who is likely to be a witness should not act as counsel, or continue to act as counsel, is that the personal integrity of the practitioner may be put in issue if his credibility is at stake as a witness, and that this will, or may, constitute a personal interest inconsistent with the practitioner’s duty to the court or to the client: Holborow v MacDonald Rudder [2002] WASC 265 [29].
28 In this matter during oral argument, the applicant stated that a conflict of interest arises in this matter because Mr Millman will be required to give evidence in respect of the matters raised in charge 13, and as a consequence, Slater & Gordon should be prohibited from acting for the respondent in this matter. Although the applicant in his written submissions contended that the conduct complained of is in breach of r 15 and r 16 of the Legal Profession Conduct Rules and s 148(1)(b) of the Legal Profession Act, it is clear that those provisions have no application to the facts of this matter. Only r 42 of the Legal Profession Conduct Rules is relevant and the second basis upon which the Supreme Court can exercise its inherent jurisdiction of the Supreme Court to supervise its officers as lawyers and officers of the court to intervene to prohibit a lawyer from acting.
29 The Commission has no inherent jurisdiction. As an inferior court of record the Commission’s powers are circumscribed by statute. It does, however, have implied powers that arise by necessary implication out of the effect of exercise of a jurisdiction which is expressly conferred: Grassby v The Queen (1989) 168 CLR 1, 16 – 17, considered and applied in Downs-Stoney v Derbarl Yerrigan Health Service [2004] WAIRC 11100; (2004) 84 WAIG 2612 [44] (Smith C). As I observed in Downs-Stoney [51]:
For a power to be implied, it must be necessary for the effective exercise of the jurisdiction. What is 'necessary' requires identifying a power to make orders which are reasonably required or legally ancillary to the accomplishment of the specific remedies provided for in the Act (see Pelechowski v The Registrar, Court of Appeal (1999) 198 CLR 435 at 452; [51] per Gaudron, Gummow and Callinan JJ).
30 In an application made under s 66 of the Act, the President has no power to make any orders against a third party. The President’s only power to restrict a party from being represented by a legal practitioner arises out of s 31(1)(c)(iv) of the Act which provides the Commission with a discretion to allow legal practitioners to appear and be heard where a question of law is raised, or is likely in the opinion of the Commission to be raised, or argued. However, there is no room to imply under s 31(1)(c)(iv) of the Act a power to restrict the appearance of a legal practitioner on grounds of a conflict of interest, as such a power goes beyond what could necessarily be implied into any consideration of whether a question of law arises, or is likely to arise, in a matter before the Commission. In any event, it is clear that leaving aside courts in the federal system, the Supreme Court is the only state court in Western Australia that can exercise a supervisory jurisdiction over legal practitioners. In Murcia & Associates (a firm) v Grey [2001] WASCA 240; (2001) WAR 209, it was found the District Court of Western Australia has no such supervisory jurisdiction. At [15] – [16] Steytler J, with whom Wallwork J agreed [9], said:
[15] [It has] long been assumed that the Supreme Court has an inherent power to discipline lawyers as an adjunct to its powers in respect of their admission (see In re Davis (1947) 75 CLR 409). Solicitors are officers of that court and it has an inherent jurisdiction over them in disciplinary matters. In Sittingbourne and Sheerness Railway Co v Lawson (1886) 2 TLR 605 Lord Esher MR said that 'the summary jurisdiction of the Courts over solicitors [exists] for the maintenance of their character ... and integrity'. Similarly, in Myers v Elman [1940] AC 282 at 319 Lord Wright said that 'the Court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally ... '. In Walsh v Law Society of New South Wales (1999) 198 CLR 73 at 96 McHugh, Kirby and Callinan JJ referred to the 'ancient functions' of the Supreme Court which 'include the maintenance of standards and enforcement of discipline in relation to legal practitioners whom such courts admit to legal practice'. In Clay v Karlson (1997) 17 WAR 493, Templeman J held that the court has, as part of its jurisdiction to supervise the conduct of legal practitioners, power to restrain a solicitor from continuing to act. Similarly, in Davies v Clough (1837) 8 Sim 262 at 267; 59 ER 105 at 106 - 107, to which I referred in Newman v Phillips Fox (1999) 21 WAR 309 at 315, Sir Lancelot Shadwell VC said:
'The cases ... appear to afford this general principle, namely, that all courts may exercise an authority over their own officers as to the propriety of their behaviour: for applications have been repeatedly made to restrain solicitors who had acted on one side, from acting on the other, and those applications have failed or succeeded upon their own particular grounds, but never because the court had no jurisdiction.'
[16] However the supervisory or disciplinary jurisdiction referred to in these cases is that which is part of the inherent jurisdiction of the Supreme Court and it is to that court that solicitors are appointed as officers upon their admission to practice. The District Court does not have a like jurisdiction, although it does have incidental powers which are necessary for the exercise of such jurisdiction as is conferred upon it (see the definition of 'jurisdiction' in s6 of the District Court of Western Australia Act 1969 and Grassby v The Queen (1989) 168 CLR 1 at 16), and those powers are sufficient, at least, to enable it to correct irregularities in, and frauds upon, its own procedure and rules and to prevent abuses of its process (see Mason v Ryan, above, at 340 and Duncan v Lowenthal [1969] VR 180 at 182). It is unnecessary, for present purposes, to explore the full limits of those powers.
31 In any event, for the reasons that follow, even if I was conferred with jurisdiction to make the orders sought by the applicant, I would not be satisfied that at this point in time such an order should be made.
No conflict of interest can be said to arise at this point in time
(a) Charge 13
32 The applicant in further and better particulars filed on 21 March 2012 alleges Mr Millman obstructed an inspection of the respondent’s records by the applicant on 26 August 2009. The inspection of records took place on that date which was during the course of proceedings in PRES 5 of 2009 which had been initiated by the applicant under s 66 of the Act on 29 June 2009. The grounds of PRES 5 of 2009 were set out in schedule 1. In reasons for decision given on 3 December 2009 in PRES 5 of 2009 Ritter AP summarised the allegations made in schedule 1 as follows [24]:
Schedule 1 said that the election had concluded on 19 June 2009. The applicant said that after noticing some possible irregularities in connection with the compilation of the union membership roll, he read the reasons for decision in Thompson v Reynolds. The applicant said he 'formed the opinion that the CFMEUW has no legal basis for existence'. The applicant said the CFMEUW had 'very few and possibly zero bona fide members enrolled in accordance with the union rules'. The schedule said the CFMEUW had not been 'collecting joining applications, joining fees or subscriptions in accordance with the act [sic] and union rules but instead has been attempting to substitute those with members [sic] records from a separate union operating and registered in a separate jurisdiction'. This is clearly a reference to the CFMEU. The schedule said that the evidence adduced in Thompson v Reynolds 'strenuously suggests the CFMEUW has no members but instead has been used as a vehicle to hide or cloak approximately $25 million worth of assets obtained from previous members of now de-registered unions'. The schedule concluded that there was 'no legal basis to conduct elections for officers of the CFMEUW as the union has less than 200 members …'. (That is a reference to s73(12)(a) of the Act which, in combination with s53, obliges the Full Bench to cancel the registration of an organisation with less than 200 members).
33 In a substituted application filed on 8 September 2009, which also relied upon the matters set out in schedule 1, the applicant claimed there was abundant evidence indicating:
(i) there were less than 200 bona fide members of the respondent;
(ii) ballot papers were sent to over 9,000 persons; and
(iii) members on the electoral roll were substituted from another union: PRES 5 of 2009 [23] (Ritter AP).
34 In PRES 5 of 2009 the applicant made submissions about the records he had inspected on 26 August 2009: reasons for decision PRES 5 of 2009 [53](h) and [62]. In particular, he submitted the cards he and his witness had completed were typical of the cards he had inspected on 29 August 2009 [62].
35 In PRES 5 of 2009 the applicant did make a complaint that the respondent had not, as requested, produced the ‘10,005 joining cards of any description’: reasons for decision PRES 5 of 2009 [123]. The applicant’s argument was, however, rejected by Ritter AP who found that [124] – [127]:
[124] I do not accept that the CFMEUW not providing an inspection of all of these cards is a good reason to conduct an inquiry. They provided a sample of application cards. The applicant accepts that these were in the form of the tabled cards which in turn are for all relevant purposes the same as the joint application form. There is no credible evidence that the approximately 10,000 people who were included on the electoral roll did not sign a form or card of the type which I held in Thompson v Reynolds could lead to valid membership. The applicant said I should have called for the production of the 10,005 membership cards in Thompson v Reynolds. There was however no good reason to do so. The CFMEUW admitted its application forms were not in the form of the schedule to the rules and were as per the joint application form or cards. There was no evidence to suggest otherwise. I took into account that admission in making my decision.
[125] Moreover, given my reasons and orders in Thompson v Reynolds it would have been an irregularity if people who had signed a joint application form or card and were financial, were not included on the electoral roll. This is because my reasoning in Thompson v Reynolds made it clear that as valid members they should have been. This point was made by senior counsel for the CFMEUW (T14).
[126] Mention was also made by the applicant of the evidence of non payment of joining fees by 'members' of the CFMEUW. This was a reference to the affidavit of Mr Daley. As to Mr Daley’s evidence that he had not paid a joining fee, this could not have lead [sic] to an irregularity in connection with the election. Mr Daley is only one member and he said he was unfinancial. It can thus be inferred, in the absence of any evidence to the contrary, that he did not receive ballot papers.
[127] Mr Daley also gave hearsay evidence about the non payment of a membership joining fee as being a 'common practice'. This general comment is an insufficient basis upon which to conduct an inquiry. My reasons in Thompson v Reynolds set out that to vote a member needed to be financial, and what was required to have that status. There is no cogent evidence that other than financial members voted in the 2009 CFMEUW election.
36 There were two issues sought to be raised by the applicant in PRES 5 of 2009. The first was whether the completion of a joint application card resulted in a person becoming a member of the respondent. The second was whether financial members of the respondent were included on the electoral roll. Ritter AP found that the first issue had been squarely determined in Thompson v Reynolds [2009] WAIRC 00024; (2009) 184 IR 186; (2009) 89 WAIG 287. In respect of the second he found that there was no cogent evidence before him in PRES 5 of 2009 to support a finding that other than financial members voted in the election for officers of the respondent in 2009.
37 In this matter the applicant argues that as no issue of obstruction was raised in PRES 5 of 2009, ergo, it cannot be said that charge 13 is an attempt to relitigate an argument. However, the difficulty with seeking to raise the matters referred to in charge 13 at this time, is that such an allegation is not only stale, but if it was to be seriously raised, the allegation should have been properly and squarely pressed in PRES 5 of 2009. As it is apparent from the applicant’s affidavit and the reasons for decision in PRES 5 of 2009 the purpose of the request by the applicant to inspect records in 2009 was to obtain evidence to support his application in PRES 5 of 2009. As that matter was concluded over two years ago, it is difficult to see how there would be any purpose in now seeking compliance with that request. In Stacey v Civil Service Association of Western Australia (Incorporated) [2007] WAIRC 00568; (2007) 87 WAIG 1229 Ritter AP made some important observations at some length about the extent of the role and powers of the President under s 66 of the Act. Of particular significance to this matter he said [272] – [274]:
[272] Section 66(2)(a), (b), (c) and (ca) are about the disallowance or alteration of rules which do not meet the standards set out in s66(2)(a). Section 66(2)(d) allows those parties set out in s66(1) to obtain the interpretation and therefore understand the meaning of a rule. This would generally be for the purpose of ensuring or checking if an organisation was acting in accordance with its rules. It is a similar power to s46 of the Act, with respect to awards. Section 66(2)(e) and (f) are about inquiries into election irregularities. As held by the IAC in Harken v Dornan and Others (1992) 72 WAIG 1727 this is a discrete aspect of the section and contains all of the President’s jurisdiction and powers on the topic of election irregularity. Similarly, although not necessary to express any concluded view in this application, s66(2)(a) would seem to set out all of the bases upon which the President could disallow a rule.
[273] A significant touchstone of the general power under s66(2) is the concept of the 'observance' of an organisation’s rules. This demonstrates in my opinion that a key part of the s66 jurisdiction is, to put it colloquially, to keep an organisation 'on track' – running in accordance with its rules. This also suggests some contemporary connection between a s66 application, any conduct said to give rise to it, and any orders or directions to be made. The parties named in s66(1) can via s66(2) seek the assistance of the President to disallow/alter prohibited rules, to declare the interpretation of rules, inquire into election irregularities and make other orders to assist or require an organisation to observe its rules. The text and context suggests that any corrective orders are limited to those which have some present connection with the activities of the organisation and the observance of its rules.
[274] In my opinion the purpose of s66 is not to correct long ago breaches which now have no relevance to how an organisation is running.
38 Until the respondent’s application to summarily dismiss the applicant’s substantive application is heard and determined, it is difficult to say with any certainty at this point in time that Mr Millman will be called to give evidence or that the procedure contemplated by r 42 of the Legal Profession Conduct Rules could not be properly invoked to enable another lawyer employed by Slater and Gordon to act for the respondent in these proceedings.
39 In any event, at least insofar as the request was to inspect 10,000 cards, it appears that even if the applicant’s claim of obstruction had been raised, the claim would have been unsuccessful as Ritter AP found that there was no good reason for the respondent to produce other than a sample of the cards.
(b) Charge 19
40 The applicant argues that the respondent’s solicitors, Slater & Gordon, have a conflict of interest in acting for the respondent in this matter as they have been paid for legal services out of members’ funds to defend unlawful action taken by the assistant secretary of the respondent. He also says that the respondent should use the services of its own in house lawyers to defend this matter and other applications the applicant has brought against the respondent, as to brief Slater & Gordon at great cost to the respondent’s members raises an issue of accountability and a conflict of interest of sorts (ts 55). Despite the applicant’s vocal opposition to this course of action, these contentions have no merit whatsoever.
41 Pursuant to r 28 of the rules of the respondent the executive is empowered to appoint any person or persons considered necessary to represent the respondent in all proceedings in any court or tribunal. Thus the appointment of solicitors to defend the actions of the respondent in this and other matters brought by the applicant and the actions of any officer of the respondent, where these actions undertaken are on behalf of or authorised by the respondent, is specifically authorised by r 28 of the rules of the respondent.
42 In any event, in the absence of r 28, it is well established that all persons including registered organisations have a right to choose their legal representatives. The applicant has not been a client of Slater & Gordon so no conflict of interest can arise. Nor is he as a member of the respondent entitled to access the funds of the respondent for the purpose of paying an advocate to represent him in proceedings against the respondent.
Conclusion
43 For these reasons the applicant’s application to strike out the respondent’s solicitors and counsel will be dismissed. The respondent’s application for costs in defending this application will be reserved and considered when the respondent’s application to summarily dismiss the substantive application is heard and determined.