N6331
 
                                        PAPUA NEW GUINEA 	
[IN THE NATIONAL COURT OF JUSTICE] 

  OS (COMM) NO. 824 OF 2015

BETWEEN: 

INDEPENDENT STATE OF PAPUA NEW GUINEA
Plaintiff

AND:
INDEPENDENT TIMBERS & STEVEDORING LIMITED
Defendant

Waigani: Hartshorn J.
2016: 11th February, 12 & 16th  May

Application to disqualify a firm of Lawyers from acting for the plaintiff

Cases cited: 

Aerato Security Services Pty Ltd v. MVIL [1998] PNGLR 232 
British American Tobacco (PNG) Ltd v. TST 4 Mile Ltd (2011) N4589
Dealer Support Services Pty Ltd v. Motor Trades Association of Australia Ltd [2014] FCA 1065
John Bangkok v. Ray Sena (2006) N3037
Kallinicos & Anor v. Hunt & Anor [2005] NSWSC 1181
Mark Foys Pty Ltd v. TVSN (Pacific) Ltd [2000] FCA 1506
National Mutual Holdings Pty Ltd v. Sentry Corporation [1989] FCA 203
Pangia Constructions Pty Ltd v. PNGBC [1996] PNGLR 1
Prince Jefri Bolkiah KPMG (A firm) [1998] UKHL 52; [1999] 2 AC 222 

Counsel:

Mr. E.G. Andersen, for the Plaintiff 
Mr. P. Kuman, for the Defendant

16th May, 2016:

1.     HARTSHORN, J:  This is a decision on an application that seeks the disqualification of Gadens Lawyers (Gadens) from acting for the plaintiff, the (State), in this matter. The State opposes the application.

2.   The application is made on the ground that Gadens has a conflict of interest. The defendant (ITSL) relies upon s. 155 (4) Constitution in its notice of motion for the jurisdictional basis of its application. As no issue was taken by the State as to ITSL’s reliance upon s. 155 (4) Constitution, I do not consider this issue further.

Background

3.   In May 2011, the State, ITSL and others entered into a Project Agreement for a proposed development project called the Trans-Papua Highway. In August 2014 ITSL purportedly issued a notice of arbitration claiming amongst others that the State did not meet its obligations under the Project Agreement and that this has resulted in ITSL suffering damages exceeding USD$400 million to date and USD$1.4 billion in total. The State denies the allegations of default or breach of the Project Agreement. The State has commenced this proceeding seeking declaratory relief to the effect that the Project Agreement is inoperative and unenforceable and that ITSL is not entitled to commence and prosecute arbitration proceedings against the State under the Project Agreement. Consequential orders are also sought.

This application

4.   ITSL contends that Gadens should be disqualified from acting for the State as:

a)	Gadens are conflicted in acting against ITSL as the firms of lawyers 	of Gadens in Papua New Guinea (Gadens PNG) and in Brisbane 	(Gadens Brisbane) have previously acted for ITSL in this matter and 	have information which is adverse to the interests of ITSL;

b)	There is a real likelihood of mischief happening if Gadens are not 	disqualified or prevented from continuing to act for the State in this 	proceeding;

c)	This is necessary to preserve the confidentiality of information given 	to Gadens by ITSL, when Gadens was acting for ITSL;

d)	Gadens PNG is not separate and distinct from Gadens Brisbane;

e)	The work undertaken by Gadens PNG and Gadens Brisbane for ITSL 	involved the Project Agreement, the subject of this proceeding;

f)	Gadens PNG has breached its duty of confidentiality that it owes to 	ITSL by disclosing information to the law firm Young & Williams 	without ITSL’s consent or waiver.

5.   The State contends that Gadens PNG should not be disqualified from acting for it as;

a)	Gadens PNG and Gadens Brisbane are completely separate law firms 	in different jurisdictions and are only associated by use of the same 	brand name, “Gadens”;

b)	The question whether a lawyer should be disqualified from acting for 	a former client is not whether there may be a possible conflict of 	interest but rather the relevance of any confidential information in 	respect of the former client held by the lawyer and the likelihood of 	real prejudice being suffered by the former client due to that 	information being held;

c)	There is no evidence that Gadens PNG holds confidential information 	of ITSL that is relevant to this proceeding and that would result in real 	prejudice to ITSL;

d)	The issues in this proceeding are narrow and limited to issues 	concerning whether ITSL has submitted to an arbitral jurisdiction in a 	specific clause in the Project Agreement;

e)	Any confidential information held by Gadens PNG in respect of ITSL 	is not relevant to the issues before the court in this proceeding, and so 	there is no real prejudice to ITSL in Gadens PNG continuing to act for 	the State in this proceeding;

f)	There are no exceptional circumstances that would justify Gadens 	PNG being disqualified from acting for the State in this proceeding;

g)	It is not in the public interest for the State to be prevented from 	instructing the lawyers of its choice;

h)	The State would suffer significant prejudice if it is required to brief 	new lawyers to act for it, given the urgency of the issues before the 	court.

The law

6.   ITSL refers to Rule 10(8) Professional Conduct Rules. Although this Rule was not cited in ITSL’s notice of motion no objection was taken to ITSL’s reliance upon it by the State and the State has reproduced it in its submissions upon the law.

7. Rule 10(8) is as follows:

“(8) Where-

(a)	a lawyer has represented a client; or
(b)	because of a lawyer’s association with a law firm he has had access to a client's confidences, that lawyer shall not thereafter use such information against that client’s interest or for the benefits of any other person.”

8.   ITSL cited the decisions of this court in Pangia Constructions Pty Ltd v. PNGBC [1996] PNGLR 1, Aerato Security Services Pty Ltd v. MVIL [1998] PNGLR 232, John Bangkok v. Ray Sena (2006) N3037 and my decision in British American Tobacco (PNG) Ltd v. TST 4 Mile Ltd (2011) N4589.

9.   In BAT v. TST (supra), I stated that in Bangkok v. Sena (supra), Kirriwom J. noted the traditional approach citing Gummow J. in the Australian Federal Court decision of National Mutual Holdings Pty Ltd v. Sentry Corporation [1989] FCA 203 at [60] where His Honour said: 

“Reliance has been placed in Australia upon the decision of the English Court of Appeal in Rakusen v Ellis Munday & Clarke (1912) 1 Ch 831, for the proposition that a solicitor is precluded and will be restrained from acting for an opponent of a former client where the solicitor, as the result of having previously acted for the client, obtained confidential information and it reasonably can be anticipated that in the course of acting for the opponent of the former client, the solicitor may consciously or inadvertently make use of that information in breach of his duty to the former client: Vatousios, “Solicitors Acting Against Former Clients”, (1983) Victoria Law Institute Journal 976.”

10.   I stated that in Bangkok v. Sena (supra), Kirriwom J. ordered the lawyers to cease to act and that in doing so His Honour based his ruling primarily on public interest considerations and the notion that the court can control the conduct of lawyers as officers of the court and hold lawyers to a high standard. I noted however, that Bangkok (supra) did not consider developments in overseas jurisdictions, principally England and Australia that had already occurred.

11.   The following passage from the House of Lord’s opinion in Prince Jefri Bolkiah KPMG (A firm) [1998] UKHL 52; [1999] 2 AC 222 at 235, by Lord Millett, with whom all of their Lordships agreed, was then reproduced:

“Where the court's intervention is sought by a former client, however, the position is entirely different. The court’s jurisdiction cannot be based on any conflict of interest, real or perceived, for there is none. 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.

Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own.”

12.   I also reproduced the following passage from Kallinicos & Anor v. Hunt & Anor [2005] NSWSC 1181:

“[76] The foregoing authorities establish the following:

•	During the subsistence of a retainer, where the court's intervention to restrain the solicitor from acting for another is sought by an existing client of the solicitor, the foundation of the court's jurisdiction is the fiduciary obligation of a solicitor, and the inescapable conflict of duty which is inherent in the situation of acting to clients with competing interests (Prince Jefri).
•	Once the retainer is at an end, however, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) (Prince Jefri).
•	After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention such duty having come to an end with the retainer (Prince Jefri; Belan v. Casey; PhotoCure; British American Tobacco; Asia Pacific Telecommunications; contra Spincode; McVeigh; Sent).
•	However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice (Everingham v. Ontario; Black v. Taylor; Grimwade v. Meagher; Newman v. Phillips Fox; Mitchell v. Pattern Holdings; Spincode; Holborow; Williamson v. Nilant; Bowen v. Stott; Law Society v. Holt). Prince Jefri does not address this jurisdiction at all. Belan v. Casey and British American Tobacco Australia are not to be read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications appears to acknowledge its continued existence.
•	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 ( Everingham v. Ontario; Black v. Taylor; Grimwade v. Meagher; Holborow; Bowen v. Stott; Asia Pacific Telecommunications).
•	The jurisdiction is to be regarded as exceptional and is to be exercised with caution (Black v. Taylor; Grimwade v. Meagher; Bowen v. Stott).
•	Due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause (Black v. Taylor; Grimwade v. Meagher; Williamson v. Nilant; Bowen v. Stott).
•	The timing of the application may be relevant, in that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief (Black v. Taylor; Bowen v. Stott).”

13.   The State cited BAT v. TST (supra), Aerato Security v. MVIL (supra) and Independent Public Business Corporation of Papua New Guinea v. Motor Vehicles Insurance Ltd & Ors (2015) N5982, amongst others, and relied upon Dealer Support Services Pty Ltd v. Motor Trades Association of Australia Ltd [2014] FCA 1065, in which it was noted by the Federal Court of Australia that there is no duty of loyalty which survives the termination of a solicitor’s retainer which can be used as the basis for restraining a solicitor from acting against a former client. The Court stated at [80] – [81]:

“It might be said that a solicitor is acting in a perfectly loyal fashion where he has faithfully discharged his obligations under one retainer for one client, and in relation to a later retainer for a new client involving the same or a related matter, makes sure that there is no risk of any misuse of the first client’s confidential information so that a conflict of duty and duty is avoided. A fortiori if the same firm is acting, but different individual solicitors are acting for the new client from those that acted for the old client.

In summary, broad notions of duty of loyalty are not that helpful. Greater precision is required. And when one uses greater precision, any obligation of loyalty might be quite readily discharged in circumstances such as those set out in the preceding paragraph.”

14.   As to the law on associated firms, the State cited the Federal Court of Australia decision of Mark Foys Pty Ltd v. TVSN (Pacific) Ltd [2000] FCA 1506. In that case, the applicant seeking disqualification was a client of PricewaterhouseCoopers (PWC), an accounting firm, and claimed that PWC Legal, as a separate partnership, but in association with PWC, should be restrained from acting against it. The case was argued on the basis that confidential information held by PWC should be imputed to PWC Legal. This argument was rejected by the Court. At [21], Conti J. stated that:

“The existence of associations between partnerships and companies, whether operating in the same or complimentary fields of endeavour, obviously does not import entitlement, without more, to access by one partnership or company to the confidential information of another. Promotional expressions attributable to PWC Legal such as “Working with specialists in PricewaterhouseCoopers, we provide our clients with complete, integrated solutions, from planning through to implementation and review”, and others…., do not evidence conclusions as to legal entitlement or access to confidential information belonging to another PricewaterhouseCoopers organisational entity having the custody of such information.”

15.    The State submits that the facts in the Mark Foyes case (supra) are analogous to those in this instance, as the relationship between Gadens PNG and Gadens Brisbane is one of association only.

ITSL submission

16.    ITSL submits that the evidence of Mr. Neville John Harsley and Mr. T. Michael Guiffre is of Gadens having a direct conflict of interest in this matter. This evidence is of Gadens PNG and Gadens Brisbane providing legal assistance to ITSL in regard to the Project Agreement and related matters, of Gadens PNG carrying out a detailed due diligence of the project, that various joint-venture companies and related legal entities were set up by Gadens and that project documents were reviewed and advice given upon them. ITSL submits that the evidence is to the effect that Gadens provided substantive assistance to ITSL with regard to the project and on the Project Agreement which is at the heart of this dispute. Further, the evidence of Ms. Royale Thompson notes that ITSL’s files contained, “letters and draft documents from Gadens Brisbane to ITSL and Gadens PNG in 2008-09” which referenced the draft Project Agreement. The evidence also is that the lawyer - client relationship ended in 2013.

17.    ITSL submits that notwithstanding the evidence of Mr. Stephen Charles Massa, the Managing Partner of Gadens PNG, that Gadens PNG and Gadens Brisbane are entirely separate entities and that confidential information held by one office is not shared with the other office, exactly as would be the position if the offices did not share the same brand - there is no evidence of separate legal entities or structures. Further, Gadens markets itself as one firm, an Australian law firm with a significant footprint in the Asia Pacific region with 135 partners and over 1100 staff throughout Australia, PNG and Singapore. Nowhere in its advertising material is Gadens PNG referred to as a distinct and separate entity in law and fact from Gadens Brisbane.

18.   When the considerations in Kallinicos (supra) are considered in the context of this case, ITSL submits that amongst others, Gadens acquired confidential information of ITSL, that although there is no continuing equitable or contractual duty of loyalty owed by Gadens, Rule 10(8) Professional Conduct Rules applies, there is a real likelihood of mischief that is probable and not based on speculation, there are 15 folders of documents that Gadens PNG has from when it acted for ITSL and that clause 27 of the Project Agreement now being challenged, was reviewed and advised upon by Gadens and cannot be read in isolation from the entire Project Agreement. Further this case is exceptional, the State will not be prejudiced if it has to engage other lawyers and ITSL communicated the issue of Gadens having a conflict of interest as soon as it arose.

19.   ITSL also submits that Gadens breached lawyer confidentiality and “Attorney-Client Privilege” by sharing a carton of ITSL’s documents with another law firm without ITSL’s consent or waiver.

State submissions

20.   The State submits that central to the question of whether Gadens PNG should be disqualified from acting for the State in this proceeding is a consideration of the issues in dispute in this proceeding and whether information held by Gadens PNG is relevant to those issues.

21. The issues that are in dispute in the proceeding, submits the State are:

a)	Whether as a matter of interpretation of the words of the Project 	Agreement, clause 27.2 amounts to a submission by the State to the 	arbitral jurisdiction of an ad hoc arbitrator rather than the PNGCDC;

b)	Whether the (undisputed) non-satisfaction of a condition precedent in 	clause 3.2 of the Project Agreement means that the obligation of the 	State to submit to arbitration expressed in clause 27.2 is enlivened or 	not;

c)	Whether or not Mr. Martin Kombri and/or any person on behalf of the 	State took a step in the Arbitration Proceedings in the period between 	21st September and 1st October 2015.

22.  The State submits that the allegations by Mr. Harsley that Gadens was intimately involved in ITSL’s preparations for the project acting on behalf of ITSL and representing its interests from 2007 to 2013 are incorrect. It is only Gadens PNG that has been retained to act for the State in this proceeding and Gadens Brisbane has no involvement in acting for the State in this proceeding at all. Further, Gadens PNG and Gadens Brisbane are not one organisation and are not in a form of partnership. It cannot be imputed therefore that information held by one is held by the other.

23.  It is submitted that the work that Gadens PNG performed for ITSL does not in any way relate to the Project Agreement or its preparation. None of the partners or lawyers of Gadens PNG that are currently involved in acting for the State were involved in the work of Gadens PNG in formally acting for ITSL. Gadens PNG is not aware of the issues upon which Gadens Brisbane acted for ITSL as Gadens PNG does not have access to the files of Gadens Brisbane. Further, even if Gadens Brisbane did hold relevant confidently information of ITSL, that information is not held by Gadens PNG and therefore it has no bearing on whether Gadens PNG should be disqualified from acting for the State in this proceeding. 

24.   As mentioned, the State submits that the facts in the Mark Foyes case (supra) are analogous to those in this instance, as the relationship between Gadens PNG and Gadens Brisbane is one of association only. It does not follow it is submitted, that because Gadens PNG and Gadens Brisbane are associated due to common branding, that information held by Gadens Brisbane is automatically held by Gadens PNG.

25.  The document produced by ITSL in the affidavit of Mr. Harsley in support of ITSL’s application was clearly produced by Gadens Brisbane. This document does not appear in Gadens PNG’s files.

26.   As to the allegation that Gadens PNG has breached “Attorney-Client” privilege by sharing a carton of ITSL related documents with another law firm without ITSL’s consent or waiver, the State submits that Rule 9(3)(e) Professional Conduct Rules is relied upon by Gadens PNG as this Rule sets out an express exception to the normal confidentiality requirement in circumstances where professional misconduct has been alleged.

27.   Further, the State submits that it must be shown that there would be “real prejudice” to ITSL, if Gadens PNG were not disqualified from acting for the State in this proceeding. No such prejudice has been established as there is no information contained in the files of Gadens PNG for ITSL that is relevant to this proceeding.

28.   A fair minded, reasonably informed member of the public would not conclude that the proper administration of justice requires that Gadens PNG should be prevented from acting for the State in this proceeding, there is no evidence of exceptional circumstances such that the jurisdiction to disqualify Gadens PNG should be invoked and that the public interest lies in a litigant not being deprived of the lawyer of their choice, without due cause, no such cause being shown in this instance.

Consideration

29.   As I stated in BAT v. TST (supra) at [17], English and Australian decisions are of persuasive value in this jurisdiction: Schedule 2.12 Constitution. Given the common law jurisdictions and that the practice of law in those countries continues to be similar to ours, I see no reason why the principles identified in Brereton J.’s comprehensive review in Kallinicos (supra) should not apply in our jurisdiction and I respectfully adopt those principles.

30.   Applying those principles; first, as Gadens retainer to act for ITSL is at an end, this court’s jurisdiction is based on the protection of the confidences of ITSL.

31.   As to the protection of ITSL’s confidence’s, pursuant to Prince Jefri (supra), it is incumbent on ITSL to establish that Gadens is in possession of information which is confidential to ITSL and to the disclosure of which ITSL has not consented, and that the information is or may be relevant to the new matter in which the interest of the State is or may be adverse to that of ITSL. 

32.  Given that I am of the view that the law is that once a retainer is at an end, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client: Prince Jefri (supra) and Kallinicos (supra), that it is not in dispute that the retainer of Gadens to act for ITSL is at an end, and that the only ground relied upon in ITSL’s notice of motion is a conflict of interest, the application of ITSL for the disqualification of Gadens must fail. 

33.   I will however continue to consider whether Gadens is in possession of information which is confidential to ITSL, and the disclosure of which ITSL has not consented, and that the information is or may be relevant to the new matter in which the interest of the State is or may be adverse to that of ITSL, such that Gadens should be disqualified as sought by ITSL. 

34.   As to the meaning of “Gadens” for the purposes of this application; ITSL’s application is seeking the disqualification of Gadens Lawyers. ITSL contends that this includes Gadens PNG and Gadens Brisbane. This is because both offices acted for ITSL and both offices are part of one entity. This is confirmed, it is submitted, by Gadens marketing itself as an Australian law firm with a significant footprint in the Asia Pacific Region.

35. The State submits that Gadens PNG is the law firm that has been retained to act for it in this proceeding and not Gadens Brisbane. Gadens Brisbane has no involvement at all in acting for the State in this proceeding. The evidence of the Managing Partner of Gadens PNG, Mr. Massa is that amongst others, Gadens PNG and Gadens Brisbane are completely separate law firms, there are no rights or entitlements to access the other firm’s files and confidential information held by one office is not shared with the other office. It is further submitted that the relationship between the two offices is not a partnership. Only the brand “Gadens” is shared by the offices. 

36.   There is evidence on behalf of ITSL that lawyers from both Gadens PNG and Gadens Brisbane did legal work for ITSL and that there was interaction and cooperation between lawyers in the two offices on some of the work that was being performed for ITSL in or about 2008 and 2009. This evidence is consistent with both offices being in a relationship or association by virtue of them sharing the same brand “Gadens” in their respective jurisdictions. There is no direct evidence that the two offices are in fact one entity. The majority of the evidence of ITSL to the effect that the two offices are one entity is based upon how Gadens is portrayed in its marketing on its website and on how Gadens is described in an international legal directory. To my mind, evidence of how a firm chooses to portray itself in its marketing and how it is described by others cannot be conclusive as to whether two offices are one entity or are two separate partnerships in association by virtue of the same brand name, without more evidence as to the exact nature of the relationship that exists between the two offices. I refer in this regard to the statement of Conti J. at [21] in Mark Foys (supra), referred to earlier.

37.  I am satisfied given the evidence that the status of Gadens PNG and Gadens Brisbane is that they are two separate law firms as deposed to by Mr. Massa. Consequently, it is Gadens PNG only that is the subject of this application.

38.   As to whether ITSL has established that Gadens PNG is in possession of information which is confidential to ITSL, ITSL relies upon the evidence of Messrs Harsley and Guiffre. In Mr. Guiffre’s evidence, he refers in paragraph 5 of an email dated 9th January 2016, to Gadens acquiring confidential information of ITSL. The nature of the confidential information is not stated. Further, from my reading of that paragraph, the reference appears to be to confidential information acquired by Gadens Brisbane. The evidence of Mr. Harsley does not specifically refer to confidential information. Their evidence supports the ground relied upon for this application, that there is a conflict of interest. It is to the effect that Gadens should be disqualified from acting for the State as it previously acted for ITSL and therefore Gadens has a conflict of interest.

39.   I am not satisfied from the evidence given on behalf of ITSL that it has established that Gadens PNG is in possession of confidential information of ITSL. I note also the evidence of Ms. Royale Thompson, who at the request of Gadens PNG, conducted an independent review of files of Gadens PNG that it holds in the name of ITSL and ITSL’s related entities. After reviewing those files, Ms. Thompson gave her opinion in a letter dated 22nd January 2016 to Gadens PNG. In that letter Ms. Thompson states amongst others that:

      “In my opinion, none of the material referred to in the Affidavit of Neville Harsley, shows any confidential information given by ITSL to Gadens Port Moresby or to Erik Andersen, and none of the material is relevant to the issues in the National Court proceedings, concerning the legal effect of Clause 27, whether or not the State has taken a step in the Arbitration proceedings, and whether or not the FLPR executed the Project Agreement.

       In my opinion, there is material in the Gadens files which may be subject to solicitor/client privilege, but none of that material shows any confidential information given by ITS to Gadens Port Moresby or to Erik Andersen, and none of that material is relevant to the issues in the National Court proceedings, concerning the legal effect of Clause 27, whether or not the State has taken a step in the Arbitration Proceedings, and whether or not theFLPR executed the Project Agreement.”

40.   Given this evidence, and that of Mr. Massa that amongst others, Gadens PNG does not hold any ITSL confidential information, the work performed by Gadens PNG for ITSL did not in any way relate to the Project Agreement or its preparation, and that Gadens PNG is not aware whether Gadens Brisbane holds any ITSL confidential information as it does not have access to Gadens Brisbane files, I am not satisfied that ITSL has established that Gadens PNG is in possession of any ITSL confidential information.

41.   In the absence of any other evidence that establishes to my satisfaction that Gadens PNG is in possession of information which is confidential to ITSL, ITSL has failed to establish the first leg of the test enunciated in Prince Jefri (supra). Given this finding, it is not necessary to consider the second leg of that test.

42.   As to the allegation of Mr. Harsley that Gadens PNG, “breached the most fundamental rules governing attorney-client relationship: lawyer confidentiality and attorney-client privilege”, by sharing a carton of documents concerning ITSL with an outside law firm for review without the consent or waiver of ITSL, notwithstanding that it is not necessary to consider this allegation to determine ITSL’s application, I am satisfied that Rule 9(3)(e) Professional Conduct Rules provides an exception to the usual confidentiality requirements in circumstances where it is necessary for replying to or defending amongst others any charge or complaint of unprofessional conduct or professional misconduct. 

43.   Rule 9(3) Professional Conduct Rules is as follows:

“(3)	A lawyer shall not, without the consent of his client, directly or indirectly-
(a)	reveal the clients confidence; or
(b)	use the clients confidence in any way detrimental to the                     interests of that client; or
(c)	 lend or reveal the contents of the papers in any brief,                     advice  or instructions to any person, 
                    except to the extent-
(d)	 required by law, rule of court or court order, provided that                     where there are reasonable grounds for questioning the                     validity of the law, rule or order he shall first take all                     reasonable steps to test the validity of the same; or
(e)	   necessary for replying to or defending any charge or     complaint of criminal or unprofessional conduct or   professional misconduct brought against him or his   partners, associates or employees or to respond to a   requirement under Section 3(d) and (e).”

44.   In this instance, as ITSL has made allegations against Gadens PNG having a conflict of interest, that it should be disqualified, and has threatened to complain to the PNG Law Society, I am satisfied that Gadens PNG could consider that it was facing at least a complaint of unprofessional conduct and that it was entitled to rely upon Rule 9(3) (e) to seek the legal advice that it did.

45. As to whether Gadens PNG should be disqualified pursuant to Rule 10 (8) Professional Conduct Rules, I am not satisfied that there is evidence that Gadens PNG has had access to ITSL’s confidences, that if it had, that it has or is likely to use “such information” against ITSL’s interest or for the “benefits” of any other person.

Inherent jurisdiction

46.   As to whether Gadens PNG should be disqualified pursuant to the inherent jurisdiction of this court, it has not been shown that ITSL will suffer any or real prejudice if Gadens PNG is not disqualified from acting for the State in this proceeding as it has not been established that Gadens PNG is in possession of any ITSL confidential information. No evidence has been given as to why the circumstances of this case in some way makes it exceptional such that Gadens PNG should be disqualified from acting for the State. I am of the view that a fair-minded reasonably informed member of the public would not conclude that the proper administration of justice requires Gadens PNG to be disqualified from acting for the State in this proceeding as amongst others, Gadens PNG ceased acting for ITSL in late 2008 or early 2009, more than two years before the Project Agreement the subject of this proceeding was executed, and as has been stated it has not been established that Gadens PNG holds any ITSL confidential information. Further, due weight should be given to the public interest in a litigant not being deprived of the lawyer of his or her choice without cause. In my view no such cause has been shown in this instance.

47.    I am not satisfied therefore that this court should exercise its inherent jurisdiction to disqualify Gadens PNG from acting for the State in this proceeding.

Orders

48. 

a)	The relief sought in the notice of motion of the defendant filed 12th 	January 2016 is refused;

b)	The plaintiff’s costs of and incidental to the said notice of motion 	shall be paid by the defendant;

c)	Time is abridged.
__________________________________________________
Gadens Lawyers:  Lawyers for the Plaintiff    
Kuman Lawyers:  Lawyers for the Defendant