VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
CIVIL DIVISION
BUILDING AND PROPERTY LIST	
vcat reference No. BP359/2017	
CATCHWORDS	
Practice and procedure; application by fourth joined party for a declaration that it would not prejudice the administration of justice if a solicitor working for the law firm on the record for the fourth joined party, Clyde & Co, were to give evidence in circumstances where he is a material witness; cross application by first respondent for an injunction restraining the fourth joined party to continue to retain Clyde & Co on the record.	

APPLICANTs	Owners Corporation PS623721, R & S Knowles Super Admin Pty Ltd (ACN: 124 224 086), Pauline Maragaret Cubitt, Marie Dianne Taylor, Chirstopher Mrakas, Alexander Tolias, Christina T Tolias, Ashely Dale Pty Ltd (ACN: 069 922 121), Adrian Jarvis, Lisa Jarvis, Anthony Eggington, Bernadette Eggington, Phuong Thi Thanh Nguyen, Dat Quang Pham, Christopher Brown, Ann Riad, Steven McCulloch, Annette McCulloch, Michelle Field, 30 Willansby Street Pty Ltd ACN 126 967 388, Harry Kechris, Andrianna Kechris, Kerrie Jane Mott	
FIRST RESPONDENT	Shangri- La Construction Pty Ltd (ACN:130 534 244)	
SECOND RESPONDENT	Nicholson Wright Pty Ltd (ACN: 072 393 741)	
THIRD RESPONDENT	Mr Jim Tsaganas	
FOURTH RESPONDENT	Simsco Consulting Pty Ltd (ACN: 099 646 750)	
FIFTH RESPONDENT	Peter Simenko	
SIXTH RESPONDENT	The Silver Arc Pty. Ltd. (ACN 124 207 423)	
SEVENTH RESPONDENT	Total Seal Waterproofing (VIC) Pty Ltd (ACN 138 827 175)	
EIGHTH RESPONDENT	Hurricane Metal Roofing Pty Ltd (ACN 138 827 175)	

NINTH RESPONDENT	Mohammad Pacha t/as K & P Rendering Texture Finishing	
TENTH RESPONDENT 	Hamzaie Hafizullah t/as K & P Rendering Texture Finishing	
first joined party	Haiying Jiang 	
second joined party	CMM Group Pty Ltd (ACN: 142 132 358) 	
third joined party	Insurance Australia Limited (ACN: 000 016 722) (struck out by order made 10 June 2021) t/as WFI 	
fourth joined party	Arch Underwriting at Lloyd's (Australia) Pty Ltd (ACN 139 250 605)	
WHERE HELD	Melbourne	
BEFORE	Member C. Edquist	
HEARING TYPE	Hearing	
DATE OF HEARING	14 July 2021	
DATE OF ORDER and written reasons	27 July 2021	
CITATION	Owners Corporation PS623721 v Shangri- La Construction Pty Ltd (Injunction application) [2021] VCAT 828	

Order
1	The fourth joined party is enjoined from further retaining Clyde and Co as its solicitors on the record in this proceeding. 
2	The first respondent has leave to make an application for its costs of and incidental to its injunction application within 90 days.
3	Liberty to apply.

Member C Edquist			

APPEARANCES:		
For Applicants	Mr Benjamin Reid of Counsel, instructed by 
Mr Jonathan Mills, solicitor	
For First Respondent	Dr Michael Wolff of Counsel instructed by Mr Daniel Prior, solicitor	
For Fourth Joined Party	Mr P Murdoch QC with Mr Daniel Briggs of Counsel, instructed by Mr Marcus O’Brien, solicitor	

Reasons
1	By an order made on 14 July 2021, the fourth joined party Arch Underwriting at Lloyds Australia Pty Ltd (Arch) obtained an order permitting it to file and serve a witness statement of Steven Mark Donley in this proceeding, BP359/2017 (the Proceeding). 
2	Because Mr Donley is a solicitor employed by the firm of solicitors on the record in this Proceeding for the fourth joined party, Clyde & Co, issues arise as to whether Mr Donley’s role in the further conduct of litigation must be curtailed in some way alternatively, whether Clyde & Co must go off the record altogether. Arch has made an application for a determination that it would not prejudice the administration of justice if Mr Donley were to give evidence in circumstances where he is a material witness, provided particular steps are taken to circumscribe the manner in which Mr Donley participated further in the hearing (Arch’s witness application). The first respondent Shangri-La Construction Pty Ltd (Shangri-La) has made a cross application for an injunction which has the effect of preventing Clyde & Co from further acting on the record for Arch in the Proceeding (Shangri-La’s injunction application).
Background to the proceeding
3	In the Proceeding, the applicants (an owners corporation and a number of individual owners) seek damages from Shangri-La and nine other respondents for damages regarding alleged defects in a major residential development at 26-30 Willansby Avenue, Brighton, Victoria. Shangri-La is a contractor which entered into a major domestic building contract which involves design and construction obligations. The other respondents are contractors or consultants. They include the building surveyor, a fire engineer and the architect. Four joined parties have been brought into the proceeding. Two of these are contractors. The other two are insurers. Arch is one of the insurers.
4	The Proceeding has aptly been described by Arch “a complex building and construction dispute.” Particulars of loss and damage recently filed by the applicants indicate that they are seeking damages in excess of $11 million in respect of “fixed costs”. On top of this figure, the cost of alternative accommodation while rectification works are carried out is alleged to run at a cost of at least $81,673 a month. Interest on the award is also sought. The parties have exchanged pleadings. They raise issues of contribution and apportionment between respondents and the joined parties. Between them, the parties will be calling up to 11 experts. A Scott Schedule has been prepared which runs for over 100 pages. 
The hearing so far
5	The Proceeding was fixed for a hearing of 25 days duration, beginning on 7 June 2021. Prior to the commencement of the hearing, it was ordered that each Friday would be a lay day. As it happens, on several of the lay days interlocutory applications have been made.
6	The hearing started as scheduled. There was a site inspection soon after the start. The hearing continued throughout June and on a number of days in July. 
7	On Monday, 5 July 2021 Arch flagged its intention to make an application to file and serve a witness statement of Mr Donley.
8	That application was determined on 14 July 2021 when an order was made granting Arch leave to file and serve a witness statement of Mr Donley in a form which had been proposed.
9	Arch’s witness application and Shangri-La’s injunction application were heard by me on 14 July and 15 July 2021. Mr Peter Murdoch QC with Mr Daniel Briggs of Counsel appeared for Arch, and Dr Michael Wolff of Counsel appeared for Shangri-La.
10	The hearing came to an abrupt halt on 15 July 2021 when I reserved my decision on these applications. In the short term the reason for the halt was that it was inappropriate to continue with the hearing in circumstances where the future role of Clyde & Co was under question. This meant that the Tribunal had to vacate previously scheduled sitting days on 26, 27 and 28 July. After that point, it would not have been possible to continue with the hearing in any event because Shangri-La’s director, Mr Obaid Naqebullah - who was anticipated to have been the next witness to be called -was not going to be available for good personal reasons until the middle of August. Then another factor came into operation. Not unexpectedly, at least one of the barristers was not available because of pre-commitments until late in October. For this reason, the further hearing of the proceeding was postponed until 3 November 2021.
Arch’s involvement in the proceeding 
11	Arch was brought into the Proceeding by the first respondent Shangri-La Construction Pty Ltd (Shangri-La).  The background to the dispute between Shangri-La and Arch has been spelt out in the Tribunal’s recent decision concerning an application made by Arch for security for costs against Shangri-La. It is convenient to set out some of the introductory paragraphs in that decision.
5	Arch issued a professional indemnity policy for the policy year 6 June 2016 -6 June 2017 to Shangri-La. In April or May 2017 Shangri-La notified a claim to Arch under the policy in respect of the applicant’s claim against Shangri-La. (The parties refer to different dates of notification in their respective pleadings). By letter dated 18 July 2017 Clyde & Co wrote to Shangri-La advising that they have been instructed to act on behalf of Arch. Shangri-La contends that in that letter, Clyde & Co advised that they have been instructed “that Arch will grant indemnity to you under the Contract of Insurance in respect of the claim made by the claimants in the proceeding subject to a specific reservation of rights”. Arch admits that Clyde & co-sent the letter of 18 July 2017 and relies on the full wording and effect of the letter.
6	Shangri-La also alleges that Clyde & Co wrote to it confirming in indemnification on 6 February 2019. Arch admits the letter was sent, but denies that the letter confirmed any confirmation of indemnification. 
7	Shangri-La also alleges that Clyde & Co wrote to it on 13 September 2019. This letter gave an updated assessment of Shangri-La’s entitlement to cover, but contained “a first partial denial of indemnification”. Arch admits that Clyde & co-sent the letter of 13 September 2019, but relies on the full wording and effect of the letter. 
8	Shangri-La also alleges that by letter dated 10 October 2019, Arch through its solicitors, Clyde & Co, advised Shangri-La that there was only partial coverage of the claims made against it in the proceeding and that there ought to be an apportionment of amounts for which Shangri-La might be found liable, and defence costs. Arch admits Clyde & Co sent that letter but relies on its full wording and effect. 
12	In its pleading against Arch, Shangri-La contends that Arch is, as a matter of construction of the policy, obligated to indemnify it. Shangri-La also makes claims asserting that Arch made an election to indemnify it and is now is estopped from denying indemnity. In addition, it makes a claim that Arch has acted unconscionably.
The role of Clyde & Co
13	At a point in 2017, Clyde & Co went on the record in the Proceeding for Shangri-La, but on instruction from Arch. The precise basis upon which this occurred remains to be examined in this Proceeding, for reasons which will become apparent. On 11 June 2020 Arch either withdrew or denied indemnity. Precisely what happened is also an issue in the Proceeding. What is clear is that Clyde & Co ceased acting for Shangri-La after 11 June 2020.
14	Shangri-La did not immediately bring Arch into the Proceeding after 11 June 2020. The explanation put forward by Shangri-La’s director Mr Obaid Naquebullah is that the company wished to pursue the available complaints process to its conclusion. A two-stage complaints process was available to Shangri-La as the insured. In brief, stage 1 involved making a complaint to Arch itself. If Shangri-La was not satisfied with the way in which the complaint had been dealt with, Shangri-La could elevate the complaint to Lloyds Corporation UK (Lloyds). Shangri-La did take the complaint to Lloyds. Ultimately, a complaints officer at Lloyds upheld Arch’s decision regarding indemnity. 
15	At a directions hearing at the Tribunal on 8 April 2021, Shangri-La obtained orders joining Arch to the Proceeding.
16	Clyde & Co went on the record for Arch in April 2021.Apparently no complaint was made at that time by Shangri-La about this. I was informed by Dr Wolff that no objection was taken at the time because it was not apprehended by Shangri-La that anyone from Clyde & Co would be giving evidence in the case. From this I gather that it did not appear to have occurred to Shangri-La’s legal advisers that Shangri-La might, in any event, have had a right to object to Clyde & Co acting by reason of a continuing duty of loyalty. 
Observations about a solicitor’s continuing duty of loyalty
17	The continued existence of such a duty was considered by Brooking JA in Spincode Pty Ltd v Look Software Pty Ltd and Ors. In that case, his Honour considered the circumstances in which a solicitor may change sides in litigation. He traced the cases on the point back to the decision of Lord Eldon in 1815 in Cholmondeley v. Clinton,  but noted that the basis of the decision was not clear. At [26], he remarked  “The Lord Chancellor's brief reasons say nothing about confidential information.”
18	A 1999 decision of the House of Lords, Prince Bolkiah v KPMG (Bolkiah) established that in England, after a retainer between a solicitor and their client had been terminated, the only basis upon which the former client could prevent the solicitor from acting for another was on the basis of the need to protect confidential information. Lord Millet expressed the principal in these terms: 
The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence.
19	Brooking JA noted, at [37] of his judgment, that the House of Lords in Bolkiah had “disposed of the question whether a basis could be found for restraining a solicitor from acting against the former client other than the protection of confidential information without discussing it at any length”. He went on to say, at [38]:
There is a good deal of authority for the view that a solicitor, as an officer of the court, may be prevented from acting against a former client even though a likelihood of danger of misuse of confidential information is not shown.
20	After acknowledging at [52] “that Australian law has diverged from that of England and that the danger of misuse of confidential information is not the sole touchstone for intervention where a solicitor acts against a former client” Brooking JA, at [53], said that the view which commended itself to him “as fair and just” is that “the equitable obligation of ‘loyalty’ is not observed by a solicitor who acts against the former client in the same matter.”
21	Mr Murdoch emphasised, with justification, that Shangri-La’s application to restrain Clyde & Co from acting further in the proceeding is not based on an argument concerning the so-called duty of loyalty. Accordingly, it is not necessary for the Tribunal to consider whether the views of Brooking JA regarding the continuance of a solicitor’s duty of loyalty after the termination of the solicitor’s retainer represents the present law in Victoria. That is an issue to be left for another time.
Relevant interlocutory applications
Shangri-La’s attempt to amend its pleading against Arch
22	Four days before the start of the hearing Shangri-La made an application to amend its amended points of claim against Arch to allege a breach of the duty of utmost good faith. The application was strenuously opposed by Arch on the basis that the application would open up an entirely new claim against it, and would put its state of mind in issue. Accordingly, it would require substantial investigation and if the amendment were to be allowed, Arch would have to seek an adjournment of the hearing. Arch relied heavily on Aon Risk Services v Australia National University. The Tribunal dismissed the application, giving oral reasons at the time.
Shangri-la’s application that Arch produce a memorandum of advice prepared by senior counsel
23	I refer again to the complaint made by Shangri-La against Arch, referred to at [14] above. The complaints officer at Lloyds who determined Shangri-La’s complaint issued his “Final Response” by email dated 1 December 2020. In dismissing the complaint, the complaints officer referred to an opinion from senior counsel which had been obtained by Arch. The complaints officer said: 
In this instance, I am unable to challenge the view provided by senior Counsel and I see no reason why the underwriters should disregard his opinion.
24	Shangri-La took the view that legal professional privilege over the senior counsel’s opinion had been waived, and made an application to the Tribunal for its production. That application was determined in favour of Shangri-La on 28 June 2021. 
25	The production of the senior counsel’s advice has no doubt given Shangri-La an insight into the basis upon which Arch contends that the policy does not apply. I have been informed that the advice was written by Mr Murdoch. However, I have not seen the advice, and I make no further comment about it.
Arch’s application for orders permitting it to add to the Tribunal Book the communications passing between it and Shangri-la
26	In an affidavit sworn on 9 July 2021, Mr Donley deposed that Mr Naquebullah in a proposed witness statement dated 10 June 2021 had “referred, for the first time, to communications between Shangri-La and Clyde & Co that had been until that time confidential and privileged.” Mr Donley went on to depose that on 11 June 2021 he wrote to Shangri-La’s lawyers seeking an acknowledgement that Shangri-La had waived privilege in respect of communications passing between it (and its agents) and Clyde & Co. Mr Donley further deposed that he wrote again, on 18 June 2021, seeking an acknowledgement that Shangri-La had waived privilege in respect of those communications, and followed up on 21 June and 24 June 2021.
27	On 25 June 2021 Arch made an application for a determination that legal professional privilege over the communications had been waived and for an order that the communications could be added to the Tribunal Book.
28	On 2 July 2021, the issue was determined in Arch’s favour, when the Tribunal declared that Shangri-La had waived legal professional privilege over all communications passing between it (and its agents) and Arch (including without limitation its agent Clyde & Co) for the period 18 May 2017 - 24 June 2020. Arch was accordingly at liberty to add the documents containing those communications (“the Documents”) to the Tribunal Book. The Tribunal’s published reasons for its decision on 8 July 2021. 
29	Arch promptly added the Documents to the Tribunal Book and circulated them to the other parties.
Arch’s application to file and serve a witness statement of Steven Mark Donley
30	Once the Tribunal declared that legal professional privilege had been waived over the Documents, Arch gave notice of its desire for Mr Donley, who has been personally involved in many of the communications passing between Shangri-La and Arch, to file and serve a witness statement in respect of his role. It flagged its intention to file and serve a witness statement of Mr Donley on 3 July 2021, that is to say a day after the Tribunal issued its declaration. 
31	The matter was raised before me by Mr Murdoch at the hearing on 5 July 2021, and Arch ultimately made its application on Wednesday, 14 July 2021. 
32	Arch acknowledged that two distinct issues were raised for consideration. The first was whether it ought to be granted leave to file and serve the witness statement in the form of a proposed witness statement attached to the submissions. The second was that, if leave were to be granted, whether it would prejudice the administration of justice if Mr Donley were to give evidence as a material witness. The second issue gave rise to what I have termed above, at [2], “Arch’s witness application”. 
33	After discussion, the position was reached where Shangri-La, while not consenting to the application that Arch be given leave to file and serve a witness statement of Mr Donley, did not oppose it. However, it sought orders regarding the preparation of witness statements in response from Mr Naqebullah, his executive assistant Ms Rita Shaya and Shangri-La’s insurance broker Mr Pang. The relevant orders were made on 14 July 2021.
34	On the afternoon of 14 July 2021 Mr Murdoch began submissions in relation to Arch’s witness application. He continued his submissions on 15 July. Dr Wolff then spoke to Shangri-La’s application for an injunction restraining Clyde and Co from remaining on the record for Arch. Before we turn to the relevant authorities, it is appropriate to discuss the jurisdiction of the Tribunal to deal with these applications.
Jurisdiction of the Tribunal to make an order concerning the future role of Mr Donley or Clyde & Co in the Proceeding
35	In many of the cases in which a court has made an order restraining a solicitor from acting further in an action by reason of the fact that they or the firm for which they work is on the record for a party, the court has referred to its inherent power to regulate the behaviour of officers of the court.
36	I raised this point with the parties, and enquired whether they were satisfied that the Tribunal had jurisdiction to make an order governing the future role of Mr Donley in the Proceeding. Neither party disputed the jurisdiction of the Tribunal in this respect. While Mr Murdoch acknowledged that the parties could not agree to give the Tribunal jurisdiction where none existed under the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act), he referred to a number of cases in which the jurisdiction had been exercised by the Tribunal, and invited the Tribunal to accept that the jurisdiction existed.
Authorities concerning the Tribunal’s jurisdiction
37	As long ago as 2000, in Jasen v Northern Melbourne Institute of Tafe and Ors (Jasen) Deputy President McKenzie determined an application by one of three respondents to restrain a law firm from continuing to act for the other two respondents in respect of an application made by an applicant who brought a complaint under the Equal Opportunity Act 1995. The law firm, had initially acted as solicitors in the proceeding for all three respondents. Shortly after filing a defence on behalf of all the respondents, the law firm terminated its relationship with the third respondent. The third respondent argued that the law firm should be restrained from acting for the other two respondents because of various issues. He argued that if the law firm continued to act, it would have continued possession of confidential information about his defence which could be used to his detriment. Deputy President McKenzie determined that the Tribunal had jurisdiction to make the order sought, and restrained the law firm from further acting. In the course of her decision, the Deputy President referred to the general procedure of the Tribunal set out in Part 4 of the VCAT Act. She referred in particular to: 
•	s 62 -the power of the Tribunal concerning representation of parties;
•	s 80(1)-the power of the Tribunal to give directions in the proceeding and do whatever is necessary for the expeditious or fair hearing and determination of a proceeding; 
•	s 97-the duty of the Tribunal to act fairly in accordance to the substantial merits of the case; 
•	s 98(3) -the power of the Tribunal to regulate its own procedure; and 
•	s123(1)-the power of the Tribunal to grant an injunction in any proceeding if it is just and convenient to do so. 
She said: “in my view, the combined effect of all these provisions is that if the Tribunal considers it necessary in the interest of justice and fairness to make the orders sought… it may make them”.
38	Another Tribunal decision referred to was R & D Rae Developments Pty Ltd v Amberley Corporation Australia Pty Ltd (Rae) in which Senior Member Cremean restrained a law firm from participating further in the matter on behalf of the applicant. For present purposes, the critical passage in the decision is to be found at [17] were the Senior Member said:
It is not correct to say that the Tribunal has “inherent” jurisdiction to disallow a practitioner from appearing but it is does have powers given by s62, above, and it also has the duty to act “fairly” under s97. A duty to act fairly must include at least the appearance of acting fairly. This ensures that it may insist on the “purity of interest in the adversaries” before it as referred to by Marks J in Commissioner for Corporate Affairs v Peter William Harvey [1980] VR 669 at 762. If Mills Oakley Lawyers were to be allowed to act, in my view, that principle would be violated in this case.
The Tribunal should give no countenance to that.
39	With respect, I agree with the Senior Member Cremean’s conclusion in Rae that s 97 of the VCAT Act gives the Tribunal jurisdiction to intervene and prevent a practitioner from further participating in litigation before the Tribunal in the interest of ensuring a fair hearing.
40	In exercising this power under s 97, the Tribunal is not exercising any inherent jurisdiction. Accordingly, it is not usurping the role of the Court to regulate the activities of officers of the Court. This point was expressly recognised by Deputy President McKenzie in Jasen. In making her decision, the Deputy President acknowledged that the Court’s power to make orders restraining solicitors from acting for a party stemmed in part from the Court’s supervisory powers over the Court’s officers, and also acknowledged, of course, that a solicitor is not an officer of the Tribunal. Nonetheless, she concluded that it was “appropriate that similar principles should apply when the Tribunal determines applications to those which apply when a court does.”.
41	For these reasons, I accept that I have jurisdiction to make orders regarding both the future participation of Mr Donley in the proceeding and the future participation of Clyde & Co. I note that there are decisions of the Tribunal other than Jasen and Rae which are consistent with this view, but it is not necessary to discuss them.
42	By way of completeness, I add that it would be very strange if the Tribunal was not able to apply principles relating to the conduct of legal practitioners involved in litigation before it paralleling those of the Supreme Court. This is because there cannot be two systems of jurisprudence operating side-by-side in Victoria. This is the philosophy which underpinned the important decision of Sifris J in Christchurch Grammar School v Bosnich, a case concerned with the jurisdiction of the Tribunal to “make any order it considers fair” under the s109 of the Fair Trading Act 1999. In that case, his Honour said: 
40	In my opinion, although the matter is not free from difficulty, the Tribunal is required, when deciding the merits of a case, to apply the law and not merely be guided by it. Any flexibility relates only to the form of the order and of course, to procedural and evidential matters. If this was not the case absurd results could follow. To the extent that the Supreme Court of Victoria has concurrent jurisdiction different results could follow.
Principles relevant when a solicitor employed by a firm on the record is to give evidence as a material witness
43	Arch contends, with justification, that there is no absolute rule that a solicitor employed by firm on the record in litigation cannot give evidence as a material witness in that litigation. The situation is governed by Rule 27.2 of the Australian Solicitors Conduct Rules (Rule 27.2), which provides:
In a case in which it is known, or becomes apparent, that  a solicitor will be required to give evidence material to the determination of contested issues before the court the solicitor, an associate of the solicitor or a law practice in which the solicitor is a member may act or continue to act for the client unless doing so would prejudice the administration of justice.
44	As the Supreme Court of Queensland remarked in Hempseed v Ward & Anor this rule replaced the old Rule 13.4 of the Legal profession (Solicitors) Rules 2007 (Qld), which (like Rule 13.4 of the similar old rule in Victoria) placed an onus on the solicitor who wished to continue to act to justify the position. The solicitor had to show that “exceptional circumstances” warranted that they continue to act. The court observed, at [36] that under the new rule:
Now the presumption is in favour of continuing to act. There is an onus on the person seeking to restrain the solicitor from continuing to act to show that, if that solicitor does so, their continued acting “would prejudice the administration of justice.
Relevant authorities
45	One of the first cases referred to by Arch was Bailey v Richardson. This was a decision of McMillan J in which her Honour had to consider an application for the making of a statutory will under s 21 of the Wills Act 1997. A solicitor appointed by the court to act for the propositus and to ascertain her likely intentions. That solicitor expressed a concern as to what his ethical position would have been had the application been opposed and he was to be cross-examined. The Court indicated that it had jurisdiction to make a determination about his position under the relevant practice rule in force at the time, namely Rule 13.4 of the solicitors Professional Conduct and Practice Rules 2005 (Vic). Arch relies on the case in inviting the Tribunal to make an order determining Mr Donley’s future role in the Proceeding.
46	McMillan J referred, with evident approval, to an “important article” written in 1998 by Ipp J (as he then was) titled ‘Lawyers' Duties to the Court’. Of particular relevance to the present case is the following passage in the article:
But there is a … duty owed by a lawyer to the court (as well as an ethical duty). The duty to the court arises from the court’s concern that it should have the assistance of independent legal representation for the litigating parties. The integrity of the adversarial system is dependent on lawyers acting with perfect good faith, untainted by divided loyalties of any kind. This is central to the preservation of public confidence in the administration of justice.  
47	The legal duty of a solicitor owed to the court to provide independent legal representation for a client in litigation identified by Ipp J in his article has also been referred to by Austin J in Oceanic Life Ltd v HIH Casualty and General Insurance Ltd and by Brereton J in Kallinicos v Hunt(Kallinicos). 
48	Dr Wolff on behalf of Shangri-La drew my attention to the decision of Almond J in Sharp & Anor v Rata International Pty Ltd. That case has a similarity to this case in so far as the plaintiffs were seeking an interlocutory order to restrain a firm of commercial lawyers from acting or continuing to act for on and on behalf of two defendants. The application was made on two bases, namely the Court’s inherent power to restrain the conduct of its officers, and the principle that lawyers owe a fiduciary duty of loyalty to their client. Of relevance to the present proceeding are the following paragraphs in Almond J’s judgment (citations omitted):
12	The principles applicable to the public policy of ensuring the due administration of justice are uncontroversial. In Grimwade v Meagher, Mandie J considered statements of principle in New Zealand, New South Wales, Western Australian and Canadian cases and held that the court has an inherent jurisdiction to ensure the due administration of justice and to protect the integrity of the judicial process and as part of that jurisdiction, in an appropriate case, to prevent a member of counsel appearing for a particular party in order that justice should not only be done but manifestly and undoubtedly be seen to be done.
13	His Honour held that the objective test to be applied in the context of such a case is:
whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice required that counsel be so prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause. 
49	Almond J observed, at [14], that Grimwade v Meagher has been approved in a number of subsequent decisions of the Supreme Court, and that the principle applied equally to solicitors.
50	The test to be applied in a case such as this was put in slightly different terms by Brereton J of the Supreme Court of New South Wales in Kallinicos.   He said at [76]:
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.
51	As I am bound by decisions of the Supreme Court of Victoria, it is relevant to note that the test articulated by Brereton J in Kallinicos was adopted with approval by Judd J in Bufalo Corporation Pty Ltd v Lendlease Primelife Ltd (Bufalo).
52	In the course of his submissions, Mr Murdoch placed great emphasis on a slightly later decision of Brereton J, namely Mitchell v Burell. This was a case in which the applicant sued her nephew and his wife for a declaration that they held their home upon trust for her. The defendants sought an order to restrain the solicitors who acted for the plaintiff from continuing to act for her, invoking the jurisdiction of the court to restrain a solicitor from acting in a particular case as an incident to the inherent jurisdiction over its officers and the control of its processes in aid of the administration of justice. Mr Murdoch repeatedly drew the attention of the Tribunal to the following passage in Brereton J’s judgment:
20	That said, I do not accept that the mere circumstance that a solicitor will be a material witness, even on a controversial matter, of itself justifies restraining the solicitor from continuing to act. As Windeyer J pointed out in Scallan v Scallan [2001] NSWSC 1078, it is, for example, not unusual for instructing solicitors in contested probate proceedings to give evidence of facts relevant to instructions for and execution of a Will. Similarly, in contested conveyancing proceedings, it is not unusual for solicitors who have acted on the conveyance to continue to act in the proceedings for specific performance or rescission and to give evidence in those proceedings. Accordingly,….I do not accept that in every case where a solicitor acting for a party is a material witness even on a controversial matter, the Court will restrain the solicitor from continuing to act…..[T]he line is crossed only when the solicitor has a personal stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees for acting, albeit that the relevant stake may not necessarily be financial, but involves the personal or reputational interest of the solicitor, as will be the case if his or her conduct and integrity come under attack and review in the proceedings. 
53	Brereton J went on to explain, in the same paragraph: 
The presence of such circumstances will be a strong indication that the interests of justice – which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests – require the lawyer to be restrained from continuing to act.
54	Mr Murdoch highlighted Brereton J’s view that even where a solicitor acting for a party was a material witness on a controversial matter the court would not necessarily restrain the solicitor from continuing to act.
55	Dr Wolff argued that the Tribunal should pay heed to the statement of the Court of Appeal in The Queen v Silverstein in which the Court, comprising Kyrou, Kaye and McLeish JJA said, at [118], “It is unarguable that it is most undesirable that a legal practitioner, who might be called as an important witness in a proceeding, should not act, or appear as counsel, in the proceeding.” I understood that Dr Wolff to have gone so far as to suggest that Brereton J’s statement of the law had been superseded. Dr Wolff noted that the Court of Appeal in Silverstein had referred to the New South Wales Court of Appeal decision in Barrak Corporation Pty Ltd v The Kara Group of Companies Pty Ltd (Barrak). In Barrak, Adamson J (with whom Barrett JA and Savkville A-JA agreed, had stated:
It is necessary to emphasise the risk posed to the administration of justice in New South Wales by solicitors remaining on the record when they are, or may be, witnesses in proceedings. 
56	I do not think there is anything in Dr Wolff’s submission that the case law has evolved in this area. In the same paragraph in which Adamson J in Barrak had expressed the view just quoted, she expressly referred to Mitchell v Burrell. In my view, there is no basis to think that the law as articulated by Brereton J in that case has changed.
57	More relevant to the disposition of the present case is the view expressed by Adamson J in Barrak regarding the effect of the new Rule 27.2 of the Solicitor’s Rules, at [49]:
The effect of the amendment is to change the rule from a prohibition qualified where there are "exceptional circumstances justifying the practitioner's continuing retainer by the ... client" (Rule 19) with a qualified permission that allows a solicitor to continue to act for the client unless doing so would prejudice the administration of justice (Rule 27.2). I do not discern any change in the purpose of the provision, which is to protect the administration of justice by circumscribing the circumstances in which a solicitor who is, or may be, required to give evidence in proceedings is permitted to act.
58	Properly understood, there is nothing fundamentally inconsistent between the Court of Appeal’s statement in Silverstein that  “it is most undesirable that a legal practitioner, who might be called as an important witness in a proceeding, should not act, or appear as counsel, in the proceeding.”,  and the test as articulated by Brereton L in Kallinicos and adopted by Judd J in Bufalo. The judges in the Court of Appeal in Silverstein noted that the principle they referred to was reflected in Rule 27.2, which as noted, allows a solicitor to act or continue to act for a client where the solicitor is required to give evidence material to the determination of contested issues before the Tribunal only where doing so would not prejudice the administration of justice. The test applied in Kallinicos and adopted in Bufalo merely assists the Tribunal in identifying when that line has been crossed.
59	Clyde & Co’s present position was foreseeable. Prior to the hearing it seemed clear to me that Clyde &Co would have an ethical problem if anyone from the firm associated with the declining of indemnity to Shangri-La had to give evidence. The risk was so clear that I raised the issue at a directions hearing in May when I was dealing with applications concerning discovery as between Shangri-La and Arch. I highlighted that the rule that a solicitor on the record should not be a material witness was an important one and not a mere technicality. I referred the parties to Judd J’s decision in Bufalo.
60	At that particular hearing, Arch was represented by Mr Briggs. Mr Briggs did not at the time suggest that the concern I had raised was unfounded. Moreover, at a directions hearing shortly afterwards, he informed me that the point was being considered. Again, it was not suggested that my concern was misconceived.
61	Clyde & Co did not go off the record before the hearing started. I take from this that Clyde & Co formed the view that no one from the firm would be required to give evidence.
62	The issue which I foresaw well before the hearing has now manifested itself. Arch has applied for, and has been granted, leave to file and serve a witness statement of Mr Donley. It is now necessary to deal with the implications of that order, given that Mr Donley is clearly a material witness.
Arch’s application
63	Arch recognises both that Mr Donley will be a material witness and that this presents an issue regarding his future involvement in the hearing. However, it contends that the matter is not one which gives rise to such concern about the administration of justice that Clyde & Co must go off the record. Arch contends, instead, that Mr Donley should be the subject of a “witness out of court” order during the time that Mr Naqebullah is giving evidence. Provided this occurs, it is contended that not only can Clyde & Co remain on the record, but Mr Donley can continue to be involved in the hearing as an instructor. Orders to this effect are sought.
Shangri-La’s application
64	As noted, Shangri-La’s cross application is for an injunction which will prevent Clyde and Co from remaining on the record for Arch. As Clyde and Co is not itself a party to the proceeding, the injunction, if granted, must be directed at Arch. 
Discussion
65	As has been established, the relevant test to be applied is that propounded by Brereton J in Kallinicos and adopted with approval by Judd J in Bufalo, namely,
“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 order to protect the integrity of the judicial process and the due administration of justice, including the appearance of justice.” 
66	In my view, a number of issues arise. I deal with them under separate headings.
Mr Donley’s evidence
67	It is clear from Mr Donley’s proposed witness statement that has been filed and served that he will be giving a very substantial amount of evidence. The proposed witness statement goes for 20 pages and includes 137 paragraphs. In most of the paragraphs, exhibits are referred to. The exhibit numbers go from tab 497 through to 590 which suggests that there are 93 exhibits. However, other exhibits are also referred to including tabs 9, 10, 11, 15, 17, 53, 57, 58, 59, 60 and 61, so it is clear that more than 100 exhibits are referred to by Mr Donley. 
68	Mr Donley does not merely explain the provenance of the exhibits, but sometimes makes comments about their nature and import. For instance, at [89] he goes into detail about the substance of a phone call he had with Mr Pang, although he does not recall the exact words that were said during the call. 
69	Another relevant point is that a number of the documents exhibited are file notes. I was taken to a number of these file notes at the hearing by Mr Murdoch. Clearly, a number of the file notes are ambiguous. They do not on their face indicate whose words are being recorded. Sometimes this is clear from the content, but sometimes it is not. It will be necessary for the participants in the ambiguously recorded conversations to give evidence about who said what. It is conceivable that there may be a dispute about whether a particular file note prepared by Mr Donley was in fact accurate. The implication is clear: Mr Donley’s credit may be an issue.
70	The fact that Mr Donley’s credit may be in issue is a matter which, in my view, is determinative of Shangri-La’s application that Clyde & Co be restrained from continuing on the record for Arch. It is established that the administration of justice requires that the Tribunal must be sure that the solicitors advising clients who are litigants before the Tribunal are receiving independent and objective advice. The Tribunal cannot have that assurance in circumstances where the credit of a solicitor who is to be a material witness in the action may be called into question, and that solicitor is employed by the firm on the record.
71	In this regard I refer to Bailey v Richardson, where McMillan J explained, at [188] that “A purpose of Rule 13 [of the solicitors Professional Conduct and Practice Rules 2005 (Vic)] is to prevent a practitioner from being in a position of apparent conflict between the duty to advance the interests of the client and the duty to the court to give impartial evidence.” (Emphasis added).
72	I also refer to Kallinicos, where Brereton J at [70] referred to Bowen v Stott(Bowen.) In that case, Hasluck J of the Supreme Court of Western Australia, granted an injunction at the suit of the plaintiff to restrain a law firm from continuing on the record as solicitor for the defendants. Hasluck J focused on the independence and objectivity of the solicitor, stating, at [53];
The most obvious case in that regard would be a situation in which a solicitor had some direct pecuniary interest in the outcome. It might seem to an independent observer that a solicitor, notwithstanding his best efforts to be impartial and objective, might adjust his evidence in some way to procure a result that suited his interest.
73	Hasluck J returned to the issue of credit at [57], stating:
The decided cases suggest that if a practitioner's credibility is at stake as a witness, the practitioner's personal integrity may be put in issue and that may constitute a personal interest, inconsistent with the practitioner's duty to the Court or to the client.
Mr Donley is not the only witness at Clyde & Co who could be called
74	Although the credibility issue is determinative of Shangris-La’s application, I consider that there are further reasons why Clyde & Co must go off the record. One of these is that not every file note records a conversation between Mr Donley and a representative of Shangri-La. Some of the conversations recorded are between Mr Donley’s supervising partner, Mr Marcus O’Brien, and a representative of Shangri-La. Other conversations are between a solicitor at Clyde & Co, Ms Casey Williamson and a representative of Shangri-La. Furthermore, one of the file notes relates to a meeting which Mr O’Brien and Ms Williamson had with Mr Naquebullah and Ms Shaya of Shangri-La. 
75	On the face of it, it is curious why Arch has made a forensic decision to call Mr Donley, but not Mr O’Brien nor Ms Williamson. This decision is all the more curious because Dr Wolff has made it clear that Shangri-La will be objecting to the admission into evidence of the file notes relating to conversations involving anyone at Clyde & Co other than Mr Donley. The Tribunal is faced with a situation where Arch has made a forensic decision to call only one solicitor from a team of several lawyers at Clyde & Co working for it on this case. Accordingly, Arch leaves itself open to an assertion that it is “cherry picking” the witnesses. In my view, that is an untenable position in a situation where it is incumbent upon Arch to demonstrate that the giving of evidence by Mr Donley as a material witness is not an affront to the proper administration of justice. The fact that Arch appears to be making a subjective choice about what witnesses it will call raises the issue as to whether Clyde & Co can be seen to be acting in an objective manner. As Mandie J said in Grimwade v Meagher in connection with the inherent jurisdiction of the court to ensure the due administration of justice and to protect the integrity of the judicial process, “justice should not only be done but manifestly and undoubtedly be seen to be done.”
The efficacy of the letters written by Clyde & Co company is an issue
76	As noted above at [10], Shangri-La’s attack on Arch’s position in this litigation is multi-pronged. The first line of attack concerns the construction of the professional indemnity policy in question. Shangri-La contends that on the facts, Arch has to indemnify it under the terms of the policy. No issue arises for Mr Donley or Clyde & Co here.
77	The second line of attack is that the communications between Clyde & Co on Arch’s behalf and Shangri-La have led to one of two situations arising. The first is that, despite an intention on the part of Arch not to unconditionally grant indemnity to Shangri-La, an election to do so has been communicated, and that Arch cannot resile from that election. Alternatively, it is said that the communications between Clyde & Co and Shangri-La and their subsequent actions have led to a situation where an estoppel arises against Arch and that indemnity cannot now be withdrawn.
78	The Tribunal acknowledges that Shangri-La’s argument that an election has been made is robustly rejected by Arch. However, the Tribunal cannot determine the issue without considering the evidence and submissions. It is an issue squarely before the Tribunal. The upshot is that the efficacy of the correspondence drafted by Clyde & Co is in issue. 
79	In my view, this takes the case from the mundane category of cases where a solicitor who has given advice to a client in a potentially litigious situation goes on the record when litigation ensues. As Mr Murdoch submitted at the hearing, this particular scenario arises all the time. 
80	In the present case, the effectiveness of the correspondence to create a situation where Clyde & Co could go on the record and defend the proceeding in the name of Shangri-La, without communicating an election concerning indemnity, is itself an issue in the litigation. This elevates the case out of the category of cases where the solicitor has the usual interest in seeing their client win the case. Clyde & Co now has a material interest in the case because of the clear potential for it to be sued for professional negligence in the event that the correspondence is construed by the Tribunal in a manner which is disadvantageous to Arch. Harking back to the words of Brereton J in Mitchell v Burrell, in the passage at [20] so heavily relied on by Mr Murdoch, this puts Clyde & Co in a position where they have “crossed the line”.
81	It is relevant to quote from Brereton J’s judgement in Mitchell v Burrell, at [21], where he says:
21	The point is illustrated, in Windeyer J's judgment in Scallan (at [10]), by his Honour’s reference to the difference between the case where the (mere) interest of a solicitor is one that arises simply in supporting the success of his or her client (for example, in connection with advice about discovery or the commencement or continuation or abandonment of proceedings), and the case where the solicitor has an interest in the result of an action "additional to his interest in doing his best for a client to have success in an action". Similarly, in Kooky Garments Ltd v Charlton [1994] 1 NZLR 587, Thomas J recognised the distinction between the situation where solicitors were, in effect, called on to defend their own actions or advice on the one hand – in which case it was inappropriate that they act – and other cases…
82	An identical consideration arises in relation to Shangri-La’s contention that an estoppel has arisen. The Tribunal acknowledges that this claim is also robustly resisted, and that Arch contends that a number of the essential elements of estoppel including the making of a material representation and detrimental reliance on such a representation are contested. However, the Tribunal will have to consider all the evidence and submissions before the issue is determined. Again, the efficacy of the correspondence from Clyde & Co to achieve Arch’s objectives will be in issue, as will the actions of Clyde & Co.
The attack on Clyde &Co Role in drafting Mr Naquebullah’s third witness statement
83	In his submissions Mr Murdoch highlighted that Mr Naquebullah in his third witness statement dated 18 June 2021 made what Mr Murdoch described was a scandalous attack on Mr Donley. Specifically, Mr Naquebullah stated:
3	Given the claims that Clyde & Co now make against Shangri-La regarding supervision, I am concerned that my first witness statement was prepared with errors and omissions in the first place and then not corrected.
4	I must also state that when I dealt with Clyde & Co, I was not prepared for dealing with solicitors who may not have my best interests at heart. It never occurred to me that the same people who prepare a statement for me to sign two years ago would now use the same statement today against me. This is my first experience of this.
5	Re-reading the witness statement again in light of Arch’s refusal of indemnity I can see that a number of paragraphs in the statement are drafted in a way that may actually assist Arch.
84	Mr Murdoch painstakingly took me through the Shangri-La’s pleading to demonstrate that at present, the pleading contains no allegation regarding breach of the duty of utmost good faith. He did this, no doubt, in order to establish the platform for an argument at the hearing that this evidence from Mr Naquebullah cannot be given because it does not relate to an issue arising from the pleading. Accordingly, there would be no basis for Shangri-La to argue that this proceeding fell into the category of cases in which the solicitor on the record giving material evidence had an interest over and above a solicitor’s usual interest in a successful outcome of the case for the client.
85	A critical difficulty for Arch with this submission is that it is inconsistent with the position Arch took in relation to its application for a declaration from the Tribunal that legal professional privilege had been waived over the communications passing between Clyde & Co and Shangri-La. At [45] of the submissions dated 24 June 2021, which were filed in relation to that application, Arch said:
Finally, Mr Naquebullah has given his account of his dealings with Clyde & Co, including the preparation of his first witness statement. In that evidence, Mr Naquebullah makes a series of assertions about the circumstances of the preparation of his evidence and of his own state of mind when doing so. In doing so, Shangri-La has given its version of events. Arch must be allowed to lead evidence of the full circumstances of the preparation of Mr Naquebullah’s evidence.
86	In giving reasons for making the declaration that Arch sought, I accepted this submission. I said:
38	Given that Mr Naquebullah has in a further witness statement foreshadowed that he intends to give evidence about how Clyde & Co prepared his first witness statement, and about his own state of mind when doing so, Arch contends it must be enabled to put its own version of events. 
39	I agree. Basic fairness requires that Arch should be enabled to tender evidence about its version of events. 
87	In my view, it is not legitimate for Arch to argue in relation to one application that the attack on Mr Donley in connection with the preparation of Mr Naquebullah’s first witness statement is relevant, and then in relation to this separate application argue that the attack on Mr Donley cannot be taken into account because it does not presently relate to an issue in the pleading.
88	The attack on Mr Donley is present in Mr Naquebullah’s third witness statement. I acknowledge that it is very likely that an objection will be taken at the hearing to the relevant paragraphs remaining in the witness statement. However, that is a matter for the future. For present purposes, the key point is that the attack has been made, and this takes the case into the category of cases where Clyde & Co has an interest over and above the usual interest of a solicitor in its outcome. 
Preliminary conclusion
89	For these reasons I am disposed to make a determination that the position of Clyde & Co has now become untenable and that an injunction ought to be granted as sought by Shangri-La. However, there are other factors to be taken into account.
Other factors
90	I am mindful that it has repeatedly been said in the authorities that a litigant should not be deprived of the use of their choice of lawyer without good cause. I have taken that into account. In my view, there is no doubt that the administration of justice requires that if necessary I must issue an injunction to restrain Clyde & Co from further acting for Arch if it is otherwise appropriate to do so.
91	This leads me to the next point, which is that that the Tribunal should take into account the cost, inconvenience and practicality of issuing an injunction to restrain a solicitor on the record from continuing to act. In this connection I refer to the judgement of Hasluck J in Bowen  at [58], and to the decision of Judd J in Bufalo. 
92	Mr Murdoch referred to Bufalo as an example of a case in which other factors outweighed the public interest in restraining a solicitor from giving evidence as a material witness in circumstances where the solicitor was on the record. In Bufalo, the plaintiff made an application for an injunction to restrain a partner in a firm of solicitors from continuing to act on behalf of two defendants in the proceeding. The basis of the application was that it was intended to call the solicitor as a witness on behalf of those two defendants. The solicitor was clearly going to be a central witness and Judd J observed, at [4], that there was a “real likelihood, if not inevitability, that he will be subjected to serious allegations about the propriety of his conduct and challenges to his credit.”. His Honour considered that there were strong grounds to support an injunction being issued, but there was a countervailing factor of delay. The proceeding had been on foot since 1999. Judd J considered that it was imperative that the trial be concluded as soon as possible, and found that the administration of justice would be compromised if the trial, which commenced on 11 October 2010, was to be aborted because the two defendants were required to engage a new solicitor. Having considered a range of competing interests, his Honour gave the greatest weight to “the public interest in having this trial proceed to conclusion without interruption”. 
93	If Shangri-La had brought its application for an  injunction to restrain Clyde & Co from continuing on the record for Arch, at a point in the hearing when granting the injunction would have resulted in the adjournment of the hearing, then the Tribunal would have had to weigh in the balance a number of competing interests including those identified by Judd J in Bufalo, such as:
•	the public interest in the orderly disposition of the proceeding without undue delay and a waste of public resources;
•	the public interest in a fair hearing;
•	the public interest in an apparently fair hearing;
•	the private interests of the parties in a fair hearing; and
•	the need for the Tribunal to be assisted by objective legal practitioners.
94	However, the application in the present case is made at a time when for other reasons it has been necessary to adjourn the proceeding from 15 July 2021 until 3 November 2021. Granting the injunction now (if it is appropriate to do so) will not delay the proceeding. In this connection, I note that Mr Murdoch informed the Tribunal that he had been instructed that it would take Arch between 4 to 6 weeks to brief another firm of solicitors on Arch’s panel in place of Clyde & Co. There will accordingly be ample time for a change of law firms to occur without there being a danger of delaying the resumption of the hearing. This means that the issue of the public interest in the orderly disposition of the proceeding without undue delay falls away, and the public and private interests in the hearing being conducted in a manifestly fair way with the Tribunal being assisted by independent legal representation for the parties, become clearly paramount.
Conclusion
95	I find that now that Arch has been granted leave to file a witness statement of a material witness, Mark Steven Donley, who is an employee of Arch’s solicitors on the record, Clyde & Co, the position of Clyde & Co is untenable for the reasons set out above.
96	I will order that Arch is enjoined from further retaining Clyde and Co as its solicitors on the record. 
97	Shangri-La will have leave to make an application for its costs of and incidental to its injunction application within 90 days.
98	There will be liberty to apply.

MEMBER C EDQUIST