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Home > Judgments > 2013 archive

Duncan v Duncan [2013] EWCA Civ 1407

Appeal by wife against an order setting aside an order in financial remedy proceedings on the basis of counsel's conflict of interest. Appeal allowed, order set aside and original order restored.

This case concerned a second appeal flowing from financial proceedings heard in 2011. On the day prior to the final hearing counsel instructed by the wife realised that he had previously acted for the husband in financial proceedings in relation to his divorce from his first wife.  Counsel alerted the solicitors on both sides that day and the district judge on the morning of the hearing. The wife confirmed that she wanted counsel to continue to represent her.  The husband, who was also represented by counsel, consented to this.

The husband appealed following the judgment of the district judge. Her Honour Judge Moir allowed the appeal and questioned whether the husband had given "fully informed consent" finding that some of the issues upon which he had been cross-examined had led to an "inescapable conflict of interest".  Counsel was absolved from deliberately misleading any party but the judge said "It is the perception of fairness as well as the substance of fairness which is at the heart of this appeal." The wife appealed.

Macur LJ gave the leading judgment in the Court of Appeal. She considered the relevant facts to be as follows: i) counsel for the wife had appeared for the husband 5 years earlier; ii) the assets in the second dispute involved assets subject to dispute in the first case; iii) counsel for the wife made an immediate disclosure of his previous association with the husband; iv) the husband was represented by counsel; v) counsel for the husband gave an unequivocal assurance that the husband consented and this was not in dispute; vi) no objections were raised during the hearing that any of the cross-examination was unfair; vii) no objection was raised during the two months between the conclusion of the hearing and the hand down of judgment; and viii) the husband was patently aggrieved as to the outcome of the proceedings.

The Court considered the case of Prince Jefri Bolkiah v KPMG (A firm) [1999] 2 AC 222, the leading authority on the points of principle which arose in this case. They were as follows: 1) Counsel is not absolutely precluded from acting in litigation against a former client. 2) Counsel may be restricted from acting, if necessary, to avoid significant risk of disclosure or misuse of confidential information belonging to the former client. 3) The court's right of intervention is based not on the avoidance of perception of possible impropriety but on the protection of confidential information. 4) Counsel has no obligation to defend and advance the interest of a former client. 5) Counsel has a duty to preserve the confidentiality of information imparted by a former client. 6) Counsel's duty of confidentiality is unqualified.  The court, if asked, will intervene unless satisfied that there is no risk of inadvertent or accidental disclosure to those with adverse interest. 7) Obviously counsel cannot act for or against the same client in the same case.

These points of principle are reflected in paragraph 603D to F of the Bar Council Code of Conduct. 

Macur LJ said:

"When analysed, the complaint of the husband is not that information obtained from the previous case was misused but that certain cross-examination took him by surprise and undermined the case which had previously been presented on his behalf by [Counsel]." 

She found that the fact that counsel had skeleton arguments from the previous proceedings had no evidential weight as there was no opportunity for him to use any of them in the advancement of his client's case.  She said:

"In my view, the husband's appeal was patently opportunistic." 

The appeal was allowed and the Order of the District Judge was restored.

Summary by Andrea Watts, barrister, 1 King's Bench Walk
_______________________

Case No. B6/2012/2563
Neutral Citation Number: [2013] EWCA Civ 1407

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand,London WC2A 2LL
Date: Wednesday, 9 October 2013

B e f o r e:

LADY JUSTICE MACUR

LORD JUSTICE RYDER

LORD JUSTICE SULLIVAN
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Between:

JULIA DUNCAN Appellant

v

STEPHEN DUNCAN Respondent
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DAR Transcript of the Stenograph Notes of  WordWave International Limited
A Merrill Communications Company
165 Fleet Street  London EC4A 2DY
Tel No: 020 7404 1400 Fax No: 020 7404 1424
(Official Shorthand Writers to the Court)

- - - - - - - - - - - - - - - - - - - - -

Ms C Jones (instructed by Richard Goudie & Co) appeared on behalf of the Appellant
Mr C Knox
(instructed by Hindle Campbell) appeared on behalf of the Respondent
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J U D G M E N T
LADY JUSTICE MACUR:

1. This is a second appeal with permission of the single judge.

2. The wife appeals against the order of Her Honour Judge Moir made on 12 November 2012, in which she set aside the order of District Judge Morgan MBE in a financial dispute resolution hearing made on 19 April 2011, remitted the same for rehearing and ordered costs against the wife, this on an appeal from the husband.  The judge did so, having identified a procedural irregularity and did not address the merits or otherwise of the substantive order.

3. The issues in this second appeal were those below, namely the involvement of counsel in the recent proceedings on behalf of the wife, having previously been involved in financial dispute resolution proceedings on behalf of the husband in relation to his first marriage some five years previously.

4. The relevant facts are to be found in the judgment and skeleton arguments filed on behalf of the appellant and respondent and are not in dispute.

5. Mr Richardson was counsel instructed by the wife.  On the day prior to the hearing listed before District  Judge Morgan he was alerted to the fact that he had previously represented the husband in financial proceedings arising from his first marriage.  He disclosed this fact to his solicitors.  The husband's solicitors were informed.  The wife wished him to continue representing her.  The husband, who is represented by Mrs Howey of counsel, consented to him doing so.  

6. The district judge was informed and proceeded to hear the case over 10 and 11 February 2011.  Judgment was handed down on 19 April 2011.  Application for permission to appeal was lodged on 5 July 2011.

7. In dealing with the first appeal, Her Honour Judge Moir queried whether the husband gave "fully informed consent" and went on to say "he states that he did not fully appreciate the issues to which he was going to be challenged and cross examined by Mr Richardson".

8. She went on to determine:

"I am satisfied that the consent must be informed consent.  It raises the question how a lay person consents to a course of action where he does not understand fully the implications of so doing."

9. The judge subsequently described the husband's position on the morning of the hearing as "invidious".  He was faced with the prospect of delay and lacked "understanding or appreciation as exactly to what he was consenting".

10. Her Honour Judge Moir gave three examples of the issues upon which Mr Richardson had cross examined the husband which led her to consider that there was an "inescapable conflict of interest".  The first, that a different case had been put by Mr Richardson in cross examination of the first wife, on instruction from the husband, than appeared to be being put by Mr Richardson in cross examination of the husband on instruction from the second wife relating to the husband's actual physical contribution to building works.

11. Next, that Mr Richardson criticised the husband for failing to disclose his pension benefits when demonstrably he had constructive knowledge of those benefits, as indicated in his previous skeleton argument prepared on behalf of the husband.

12. Finally, that Mr Richardson had challenged the husband upon making threats to his ex mother in law.

13. Thereafter the judge absolved Mr Richardson from deliberately misleading any party in the case but went on to say:

"It is the perception of fairness as well as the substance of fairness which is at the heart of this appeal."

14. She went on to quote from the speech of Lord Millett in the case of Prince Jefri Bolkiah v KPMG (A firm) [1999] 2 A.C 222 p.234, paragraph H in these terms:

"  . . .  a fiduciary cannot act at the same time both for and against the same client, and his firm is in no better position.  A man cannot without the consent of both clients act for one client whilst his partner is acting for another in the opposite interest.  His disqualification has nothing to do with the confidentiality of client information.  It is based on the inescapable conflict of interest which is inherent in the situation."

15. Both parties in the court below referred extensively, at least by citation, to authority touching upon fiduciary relationship, bias and conflict of interest by virtue of actual constructive knowledge of confidential material which may wittingly or unwittingly be deployed against a previous client.  The same authorities have been referred to before this Court in the skeleton argument of Miss Jones appearing on behalf of the wife and Mr Knox appearing on behalf of the husband.  I regret that I consider the majority are irrelevant or by cherrypicking phrases out of context have been misapplied and the factual waters have been muddied in the case.

16. For my part I consider the relevant facts on this particular point in this particular case may be distilled in very bald terms:

1)  counsel for wife 2 had previously appeared for husband in a different financial dispute five years earlier;

2)  The assets in the second financial dispute involved assets subject to dispute in the first case;

3)  when he was made aware of it, counsel for wife 2 made immediate disclosure of his previous association with the husband;

4)  the husband was represented by counsel in case 2;

5)  counsel for the husband in case 2 gave an unequivocal assurance to the Court that husband consented to the case proceeding before District Judge Morgan.  The husband does not dispute the fact that he did so consent;

6)  no objections were raised during the hearing that cross examination of the husband was unfair or unfounded upon the evidence filed in case 2. (I consider the trial judge's three examples to be incapable of supporting any implication that counsel for the wife was subconsciously misusing information acquired by him from husband's previous instructions);

7)  apparently no objection was raised in the two months between conclusion of the hearing or hand down of judgment and was only notified one month later.  (We are informed today that Mr Duncan is said to have complained to his previous solicitors about the conduct of the proceedings);

8)  the husband was patently aggrieved as to outcome.

17. The part of Lord Millet's speech in Bolkiah which deals with the law at page 233G to page 237F remains good and is the leading authority on points of principles arising in this and similar cases.  In my view, they amount to this:

1)  counsel is not absolutely precluded from acting in litigation against a former client;

2)  counsel may be restricted from acting, if necessary, to avoid significant risk of disclosure or misuse of confidential information belonging to the former client;

3)  the Court's right of intervention is based not on the avoidance of perception of possible impropriety but on the protection of confidential information;

4)  counsel has no obligation to defend and advance the interest of a former client;

5)  counsel has a duty to preserve the confidentiality of information imparted by a former client;

6)  counsel's duty of confidentiality is unqualified.  The Court, if asked, will intervene unless satisfied that there is no risk of inadvertent or accidental disclosure to those with adverse interest.  This is a matter of perception as well as substance;

7)  obviously counsel cannot act for and against the same client in the same case.  This would produce the inescapable conflict of interest inherent in the situation.

18. These principles are reflected in paragraph 603D to F of the Bar Code of Conduct.  Mr Richardson's reliance on the "cab rank rule" before Her Honour Judge Moir was unnecessary.

19. This is not a case where the Court of first instance was asked to adjudicate upon the representation of the wife in the face of husband's opposition.  The husband was represented by counsel.  In fact, this Court knows, as did Her Honour Judge Moir, the credentials of that counsel in relation to matters of professional ethics.  District Judge Morgan was entitled to assume the same if he was not aware of the fact.

20. When analysed, the complaint of the husband is not that information obtained from the previous case was misused but that certain cross examination took him by surprise and undermined the case which had previously been presented on his behalf by Mr Richardson. 

21. Mr Knox on behalf of Mr Duncan, being asked repeatedly to point out that information which appears to have been misused from the earlier case, was unable to identify the same and again and again merely maintained that Mr Richardson should have disclosed the information that he had, namely skeleton arguments which had been preserved electronically from a previous case.

22. The fact that Mr Richardson discovered skeleton arguments relating to the previous case and neither the husband, his counsel, nor the District Judge knew about their existence is, to my mind, irrelevant.  The skeleton arguments had no evidential weight.  They were based upon instructions from Mr Duncan in the previous case and were pieces of written advocacy.  There was no opportunity for Mr Richardson to use any part of the skeleton arguments in the advancement of his client's case in the second financial disputes resolution and there is no suggestion that did he so. 

23. In my view, the husband's appeal was patently opportunistic. 

24. By way of postscript, if I was against the appellant wife on the substance of this appeal, I would nevertheless have been inclined to interfere with the order for costs made against her in the Court below.  The husband was the author of his own misfortune in consenting to the application proceeding before District Judge Morgan and giving no indication of his dissatisfaction or renewed complaint against Mr Richardson from continuing to act during the course of the proceedings.  The wife bore no responsibility for any perceived or actual procedural irregularity.

25. I would allow this appeal, set aside the order of Her Honour Judge Moir and restore the order of District Judge Morgan.

26. In giving leave, the single judge indicated that bearing in mind the limited assets involved, the parties were to be encouraged to settle their differences by agreement and invited to consider using the Court of Appeal's mediation scheme for family cases.  This does not appear to have been an active consideration for either party.  Regrettably, the consequent costs of this appeal, wherever they lie, will further reduce the already depleted assets of the parties.

27. LORD JUSTICE RYDER:  I agree.  I would add only this for my part: I do not believe that Mr Richardson breached paragraph 603 for the Code of Conduct for the Bar.

28. LORD JUSTICE RYDER:  I agree with both judgments and have nothing to add.  So the appeal is allowed and the District Judge's order is restored.