LSB May 2019_Web

THE 

BULLETIN 

THE LAW SOCIETY OF SA JOURNAL 

VOLUME 41 – ISSUE 4 – MAY 2019 

INSIDE 

Lawyers sitting on boards: 

positives & pitfalls 

Conflicting loyalties: 

the case of Lawyer X 

Stamping out conflicts in 

the finance industry 

CONFLICT OF INTEREST

This issue of The Law Society of South Australia: Bulletin is 

cited as (2019) 41 (4) LSB(SA). ISSN 1038-6777 

CONTENTS 

CONFLICT OF INTEREST 

8 Financial Services Royal Commission 

– Stamping out conflicts in the 

financial services industry – By Cynthia 

Di Blasio 

10 Conflict of interest: The impact 

of digital & legal global practice 

By Deslie Billich 

14 Lawyers sitting on boards: positives 

& pitfalls – By Nicholas Iles 

18 A miscarriage of justice? The case 

of Lawyer X – By Jarrad Napier & 

Raffaele Piccolo 

22 Identifying & avoiding conflicts when 

representing co-accused – By James 

Marcus & Stephen Ranieri 

32 Avoiding conflict of interest when 

encountering former family law clients 

– By Jane Miller & Marwa Shabbar 

34 Conflicts of interest in Wills & 

Estates matters – By Grant Feary 

FEATURES & NEWS 

24 The Arrest of the Dangjin – 

determining a ship’s beneficial 

ownership while held in trust 

By Travis Shuaerd 

26 Can a Legal Opinion not contain an 

opinion? – By Chad Jacobi & Jenny Paglia 

28 Climate change: An existential threat 

to corporations – By Professor Paul Babie 

31 New silk appointment procedure & 

changes to the Public Trustee 

By The Hon. Vickie Chapman MP 

36 Youth Treatment Orders Bill 

highlights ad hoc approach to rightsscrutiny 

of bills – By Dr Sarah Moulds 

& Dr Laura Grenfell 

REGULAR COLUMNS 

4 From the Editor 

5 President’s Message 

6 Dialogue 

33 Members on the Move: Andersons 

Solicitors acquires Rossi Legal 

34 Risk Watch 

39 Wellbeing & Resilience: Breakthrough 

depression research finds personality 

types and food matter 

40 Tax Files: Franking credit reform – 

what lies ahead – By Stephen Heath 

42 Young lawyers: Performance review 

seminar & Premium Breakfast wrap-up 

44 Bookshelf 

45 Gazing in the Gazette 

Executive Members 

President: 

A Nikolovski 

President-Elect: T White 

Vice President: R Sandford 

Vice President: M Frayne SC 

Treasurer: 

F Bell 

Immediate Past President: T Mellor 

Council Member: E Shaw 

Council Member: S Hooper 

Metropolitan Council Members 

T Dibden 

M Tilmouth 

M Janus 

A Lazarevich 

S Hooper 

T Vozzo 

V Gilliland F Bell 

M Mackie 

M Boyle 

M Smith 

E Shaw 

R Shaw 

J Stewart-Rattray 

J Marsh 

Country Members 

S Minney 

(Northern and Western Region) 

P Ryan 

(Central Region) 

J Kyrimis 

(Southern Region) 

Junior Members 

R Piccolo S Dunn 

Ex Officio Members 

The Hon V Chapman, Prof R Sarre, 

Prof M de Zwart, Prof T Leiman 

KEY LAW SOCIETY CONTACTS 

Chief Executive 

Stephen Hodder 

stephen.hodder@lawsocietysa.asn.au 

Executive Officer 

Rosemary Pridmore 

rosemary.pridmore@lawsocietysa.asn.au 

Chief Operations Officer 

Dale Weetman 

dale.weetman@lawsocietysa.asn.au 

Member Services Manager 

Michelle King 

michelle.king@lawsocietysa.asn.au 

Director (Ethics and Practice) 

Rosalind Burke 

rosalind.burke@lawsocietysa.asn.au 

Director (Law Claims) 

Geoff Thomas 

gthomas@lawguard.com.au 

Manager (LAF) 

Annie MacRae 

annie.macrae@lawsocietysa.asn.au 

Programme Manager (CPD) 

Natalie Mackay 

Programme manager (GDLP) 

Desiree Holland 

THE BULLETIN 

Editor 

Michael Esposito 

bulletin@lawsocietysa.asn.au 

Editorial Committee 

A Bradshaw E Olsson 

P Wilkinson S Errington 

T Shueard D Sheldon 

M Young J Arena 

G Hagias 

The Law Society Bulletin is published 

monthly (except January) by: 

The Law Society of South Australia, 

Level 10-11, 178 North Tce, Adelaide 

Ph: (08) 8229 0200 

Fax: (08) 8231 1929 

Email: bulletin@lawsocietysa.asn.au 

All contributions letters and enquiries 

should be directed to 

The Editor, The Law Society Bulletin, 

GPO Box 2066, 

Adelaide 5001. 

Views expressed in the Bulletin 

advertising material included are 

not necessarily endorsed by The 

Law Society of South Australia. 

No responsibility is accepted by the 

Society, Editor, Publisher or Printer for 

accuracy of information or errors or 

omissions. 

PUBLISHER/ADVERTISER 

Boylen 

Level 3, 47 South Terrace, 

Adelaide SA 5000. 

Ph: (08) 8233 9433 Fax: (08) 8212 6484 

Email: admin@boylen.com.au 

Studio Manager: Madelaine Raschella 

Layout: Henry Rivera 

Advertising 

Email: sales@boylen.com.au 

Printer 

Lane Print Group 

101 Mooringe Ave, 

Camden Park SA 5038. 

Ph: (08) 8376 1188

FROM THE EDITOR 

Campaign 

encourages people 

to see a lawyer 

MICHAEL ESPOSITO, EDITOR 

IN THIS ISSUE 

8 

One of the social media banners in the "See a Lawyer" ad campaign 

Some readers may have noticed some target particular demographics based on 

advertisements on Facebook and location, interests, age and other factors 

Instagram encouraging people to see a so as to maximise the effectiveness of the 

lawyer. 

campaign and optimise “conversions” (e.g. 

The Society has launched a campaign direct contact with law firms). 

to emphasise the importance of consulting In addition to the digital campaign, the 

legal expertise for legal problems. 

Society has also commissioned a number of 

Rather than a dour “scare” campaign bus shelter panel ads to be displayed across 

that characterises many of these types of the CBD and suburban Adelaide from 13 

campaigns, the Society has taken a more May to 9 June. Locations of these posters 

light-hearted approach that still conveys a will include Victoria Sq, North Tce, Central 

sober underlying message. 

Markets, Glenelg, Port Adelaide, Goodwood 

One of the videos in the campaign and Modbury among other locations. 

depicts a recently separated man turning to While these posters also aim to draw 

fortune cookies for clues as to whether his attention to the referral service, the 

ex will “get the house”. 

overarching objective is to highlight the 

The fortune cookie is a stand-in for all importance of engaging a legal practitioner 

the different people that are imprudently for a legal issue and persuade the public of 

consulted for legal advice, such as family the importance of getting advice from a 

members, friends, accountants, financial suitably qualified practitioner. 

advisers, or anyone else that is not actually Lawyers of course are keenly aware of 

a lawyer. The key message? If you have a the risks of forgoing legal advice, but there 

legal problem, you should see a legal expert. still appears to be a perception among the 

The digital component of the campaign wider community that seeking legal advice 

also includes search and display advertising for a number of issues is unwarranted and 

on Google and Bing search platforms. too costly. 

Search advertising relates to what 

While cost is certainly an important 

appears on search result pages when users consideration for many people, the simple 

type in certain keywords. The objective fact is that not getting legal advice in the 

is to direct as many people as possible to first instance cane lead to far more costly 

Society’s “See a lawyer” referral webpage, and painful consequences in the longer 

and subsequently result in more queries term. 

directed to the law firms that are on the We encourage anyone who sees the 

referral service. 

adverts on social media to hit “share” and 

The campaign has been designed to spread the message! B 

4 

THE BULLETIN May 2019 

CLEANING UP THE FINANCE SECTOR 

The financial services industry is 

under pressure to stamp out conflicts 

of interest following the Hayne 

Royal Commission 

26 

CAN A LEGAL OPINION NOT CONTAIN 

AN OPINION? 

This seemingly paradoxical question 

was explored in a recent case 

involving a solicitor providing a 

"highly unusual" and "equivocal" 

legal opinion 

28 

CLIMATE CHANGE: AN EXISTENTIAL 

THREAT TO CORPORATIONS 

Professor Paul Babie argues that 

climate change poses an existential 

threat to corporations, and by 

extension fundamental legal 

principles which underpin our society.

PRESIDENT’S MESSAGE 

Urgent measures to address 

Fidelity Fund decline 

AMY NIKOLOVSKI, PRESIDENT, LAW SOCIETY OF SOUTH AUSTRALIA 

As mentioned last year and in previous 

years, the Fidelity Fund is in decline. 

Past-President Mr Tony Rossi (now Judge 

Rossi), wrote a detailed overview of the 

reasons behind the decline and the need for 

action to be taken in his July 2017 President’s 

message. 

Although a pressing issue for some time, 

which was first brought to the attention of 

the former Attorney General John Rau in 

April 2015, disappointingly no action has 

been taken. 

The Fidelity Fund serves an extremely 

important role in maintaining public 

confidence in the profession, by providing 

a mechanism for the public to access 

compensation for the default of incompetent 

or negligent solicitors in circumstances 

that they are not insured or where the 

Professional Indemnity Fund does not apply. 

Pursuant to s57(3) of the Legal Practitioners 

Act 1981, the Society administers the Fidelity 

Fund. The Fund has three main sources of 

income. The first is from a prescribed portion 

of the fees for Practising Certificates paid by 

legal practitioners, the second is a prescribed 

portion of interest from trust accounts 

maintained by legal practitioners and firms 

(via the Special Interest, Combined Trust and 

Statutory Interest Accounts) and the third, 

from investments. Although the Law Society 

administers the Fund, it does not have 

control over its income except for making 

Fuller appointed to judge advocate’s panel 

Barrister Joanna Fuller has been 

appointed as Judge Advocate to serve 

in the Australian Defence Force’s superior 

disciplinary tribunal system. The three-year 

appointment took effect from 7 March. 

Following her appointment to the 

judge advocate’s panel, Judge Advocate 

General, Rear Admiral the Hon. Justice 

M.J. Slattery RANR, appointed SQNLDR 

Fuller as a Defence Force magistrate. 

Ms Fuller, Chair of the Society’s 

Animal Law Committee has practised as 

a barrister for 22 years and has extensive 

investment decisions. It does not set the 

fees or percentages of monies paid into the 

Fund - that is the role of the Government. 

Similarly, the Society does not determine 

expenditure from the Fund. No payment 

may be made from the Fund without the 

authorisation of the Attorney-General. 

The cause of the decline is two-fold: 

1. A substantial decrease in return on 

investments - owing to both market 

conditions and the compounding effect 

of the decreasing principal available for 

investment, and: 

2. The increased cost of the operation 

of the office of the Legal Profession 

Conduct Commissioner compared to the 

cost of the previous Board. 

In 2014, the Fund held $27.9 million. The 

value of the Fund as at 30 June 2018 had 

decreased to $18.3 million. 

Projections indicate that unless urgent 

action is taken the Fund will be completely 

depleted by 2025. 

As a result of no action having been 

taken until now (despite the matter having 

been raised by the Society many times with 

the former Attorney-General over several 

years urging him to do so) the financial 

position of the Fund is far worse than 

might otherwise have been the case and the 

burden on the profession has increased. The 

profession, through a range of measures 

including the reallocation to the Fund 

criminal and family law experience. In 

addition to appearing in complex trials 

in the higher courts of SA and other 

jurisdictions, Ms Fuller has also appeared 

regularly in the ADF’s superior tribunal 

system, and has advised ADF members in 

summary and superior tribunal matters. 

SQNLDR Fuller has conducted the 

Prosecuting Officer/Defencing Officer 

course at the RAAF Edinburgh for several 

years. 

The Society congratulates SQNLDR 

Fuller on her appointment. B 

of monies which have traditionally been 

allocated elsewhere and an increase in 

Practising Certificate Fees, will effectively 

now pay interest on a debt the profession did 

not create. 

We are grateful to the current Attorney- 

General the Hon. Vickie Chapman MP for 

taking action with respect to this issue. 

At the time of publication, it is unknown 

what the increase to Practising Certificate fees 

will be, however the current expectation is 

that there will be an increase for 2019-20 of a 

minimum of $50. 

We are aware this will impact on firms 

and the profession in general, given the 

tight legal market and prevailing economic 

conditions, however the decline must be dealt 

with now to ensure the maintenance of the 

Fund. 

While specific mention is made of 

the increased total cost of the operation 

of the Office of the Legal Profession 

Conduct Commissioner in comparison to 

the previous Board (based on the audited 

published financial statements as per the 

Society’s Annual Reports), no view is taken 

as to the efficiency or expenditure of the 

Commissioner's office. The purpose of this 

article is merely to alert the membership to 

the ongoing decline of the Fidelity Fund, 

the major causes of the decline in financial 

performance of the Fund and the resultant 

financial implications for practitioners. B 

May 2019 THE BULLETIN 

5

DIALOGUE 

A roundup of recent Society 

meetings & conferences 

ROSEMARY PRIDMORE, EXECUTIVE OFFICER 

22-23 MARCH 2019 

Meetings of Law Society Presidents, 

Chief Executives of Constituent 

Bodies of the Law Council of Australia 

(LCA); Chief Executives of Law 

Societies; the Conference of Law 

Societies; and Directors of the Law 

Council 

A 

of Australia 

my Nikolovski (as President and 

also as Society appointed Director 

of the LCA) and Stephen Hodder, Chief 

Executive variously participated in the 

above quarterly meetings which were 

held in Sydney. Key topics of discussion 

included the LCA’s budget, and capitation 

fees; a constitutional review of the 

LCA to be undertaken by Bret Walker 

SC; collection of data relating to the 

diversity of the profession; the need for 

interoperability between platforms of 

providers of electronic conveyancing 

services; a draft report of a national 

profile of the profession; the possibility of 

pursuing a modern salaried lawyers award; 

and an interim report on a review of the 

Australian Solicitors’ Conduct Rules. 

25 MARCH 2019 

Australian Women Lawyers’ Association 

Matters discussed at a meeting 

Amy Nikolovski and Rosemary 

Pridmore, Executive Officer held 

with Kymberley Lawrence, President 

and Jessie MacGillivray, Chair of the 

Policy Sub-Committee of the Women 

Lawyers’ Association (SA) included 

matters presently before the WLA 

(SA); the Society’s survey of Bullying, 

Discrimination and Harassment in the 

profession in South Australia and the work 

being done by Council’s BDH Survey 

Working Group; and the decriminalisation 

of sex work and of abortion. 

27 MARCH 2019 

Board of the Legal Services 

Commission 

At the invitation of the Board of 

the Legal Services Commission (LSC), 

Amy Nikolovski and Stephen Hodder 

attended a meeting of the Board. Matters 

discussed included the role of the LSC’s 

Legal Profession Reference Committee 

(on which the Society is represented); the 

LSC’s funding situation, in the context 

of the upcoming State budget, the 

Society advising its inclusion of a push 

for additional funding in its State Budget 

submission; the LSC’s position in relation 

to the 40% sentencing discount in early 

guilty plea matters; the difficulties being 

experienced in major indictable matters, a 

substantial increase in court appearances 

being expected once cases begin to “come 

through” the system; and the procedures 

in place for membership of LSC Panels. 

4 APRIL 2019 

Joint Rules Advisory Committee 

Law Society representatives Amy 

Nikolovski and Alexander Lazarevich 

(Chair of the Civil Litigation Committee) 

attended a meeting of the Joint Rules 

Advisory Committee. The main focus 

of discussion was a report on pre-action 

protocols, including potential to introduce 

them in various areas of practice, and 

the possibility of costs orders against 

practitioners for non-compliance. The 

JRAC is to develop uniform Rules across 

the Courts, to commence when the 

Electronic Court Management System 

is rolled out in civil matters (which is 

not anticipated to occur until at least 

February 2020). 


Legal Services Council of the Legal 

Profession Uniform Law 

Amy Nikolovski, Stephen Hodder, 

Rosalind Burke (Director Ethics and 

Practice), and Anna Finizio (Policy 

Lawyer) met with the Hon Michael Black 

AC QC (Chair) and Megan Pitt (CEO/ 

Commissioner) of the Legal Services 

Council. The Legal Profession Uniform 

Law (LPUL) will apply in Western Australia 

from 1 July 2020. Issues identified by the 

Society’s Council as impediments to the 

Society’s support for South Australian 

lawyers to be regulated under the LPUL 

were discussed at the meeting. These 

include the cost to the profession of 

participation; costs disclosure thresholds 

and inconsistences in their uniformity 

in States participating in the LPUL; 

proportionality of costs under the LPUL; 

that multi-disciplinary practices are 

permitted under the LPUL; and the degree 

of autonomy that a participating State may 

have in relation to specific practices. 


Her Honour Judge Hribal 

Key matters of discussion at a meeting 

Amy Nikolovski and Stephen Hodder held 

with the Chief Magistrate, Her Honour 

Judge Hribal and Magistrates Kennewell 

and Dixon included consultation by the 

Courts as to services in regional areas in 

the context of an anticipated further cut 

in funding to the Courts Administration 

Authority; a review of the Magistrates 

Court Criminal Scale of Costs, the Society 

soon to be provided with a consultation 

copy of a revised Schedule 1; a review of 

the Magistrates Court Civil Scale of Costs, 

in the context of a likely move to uniform 

Rules across the Courts; and possible 

extension of fast track Rules. 


SALRI Roundtable – Common law of 

forfeiture project 

The Society was represented by 

Marissa Mackie (Chair, Women Lawyers’ 

Committee), Anne Sibree (Deputy 

Chair, Criminal Law Committee) and 

Vanessa Varga (Member, Succession Law 

Committee) at two Roundtables convened 

by the SA Law Reform Commission as 

part of its law reform project to examine 

the scope and operation of the common 

law forfeiture rule in unlawful homicide. B 

6 

THE BULLETIN May 2019

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Financial Services Royal Commission 

– Stamping out Conflicts in the 

Financial Services Industry 

CYNTHIA DI BLASIO, SPECIAL COUNSEL, FISHER JEFFRIES 

The financial services industry has 

come under intense scrutiny in the 

wake of the Royal Commission. 1 The 

Commissioner, the Honourable Kenneth 

Madison Hayne AC QC, makes a number 

of critical recommendations aimed at 

stamping out conflicts of interest. 

Conflicts have the potential to arise in 

any situation where there are competing 

interests, loyalties and/or duties. The 

Commissioner notes that in the financial 

services industry, “the interests of client, 

intermediary and provider of a product or service 

are not only different, they are opposed”, with 

duties to clients and self-interests “pull[ing] 

in opposite directions”. 2 

He identifies six “norms of conduct” 

supporting six general rules. The sixth 

norm, “when acting for another, act in the 

best interests of that other”, and the fourth 

principle, “intermediaries should act only on 

behalf, and in the interests of, the party who pays 

the intermediary” 3 , provide the framework 

for his recommended approach to 

conflicts. His approach is clear: conflicts 

should be removed, rather than managed, 

where reasonably possible. 4 This is aimed 

at restoring trust and confidence in 

Australia’s financial system. 

MORTGAGE BROKERS 

The Commissioner first focuses on 

mortgage brokers. He observes that 

borrowers seek advice from brokers about 

financing their most significant assets and 

in doing so “rightly” want and expect their 

broker’s undivided loyalty. 5 At the same 

time, brokers are channels for distributing 

products of lenders, with lenders seeking 

to “foster relationships” with brokers to 

encourage them to recommend their 

products. 6 There arises the conundrum, 

with brokers potentially or actually faced 

with conflicts between their self-interests 

and the best interests of their clients. 

Evidence before the Commission revealed 

that brokers “too often sought to strike some 

compromise”, rather than pursuing the best 

interests of their clients above all else. 7 

The Commissioner advocates changes 

that he opines will “bring the law into 

line with what consumers expect”, 8 and give 

brokers “the incentive to give borrowers value 

for money... to search out the best deals available” 

thereby requiring them to “look beyond” the 

lenders with which they have established 

relationships. 9 

The Commissioner’s first “essential” 

recommendation aimed at brokers is to 

amend the law to impose a civil penalty 

obligation upon them to act in the best 

interests of intending borrowers in 

connection with home lending. 10 Such an 

express ‘best interests’ duty on brokers is 

not part of the current statutory regime. 11 

Brokers in breach of the recommended 

‘best interests’ obligation could be faced 

with significant civil penalties. The recent 

passing of the Treasury Laws Amendment 

(Strengthening Corporate and Financial Sector 

Penalties) Act 2019 (Cth) signals the advent 

of harsher penalties for a broader range of 

obligations. 

The Commissioner also recommends 

that, after a sufficient period of transition, 

brokers should be subject to, and regulated 

by, the law that applies to financial 

advisers, 12 to ensure the consistent 

treatment of advisers. 

His more contentious recommendation 

relates to changing the remuneration 

structure of the mortgage broker industry. 

The Commissioner notes that the basic 

structure of the remuneration of brokers 

is the payment by lenders of value-based 

upfront and trail commissions in respect 

of loans. He says that “it is those elements of 

the structure that drive poor customer outcomes” 13 , 

that they “have no credible rationale based on 

consumer interests” and that “they actually work 

against consumer interests”. 14 This is because, 

with the amount of commission paid 

typically varying with the loan amount, “it 

is an incentive to brokers to have the borrower 

take as large a loan as the borrower can afford, 

regardless of whether the borrower needs to 

borrow, or is wise to borrow, that sum.” 15 Trail 

commissions, in his opinion, are “money for 

nothing”. 16 

The Commissioner observes that 

value-based commissions are a form of 

“conflicted remuneration” 17 , with influence 

lying in favour of the lender. 18 He 

accordingly recommends “steady but 

deliberate movement towards changing the existing 

remuneration arrangements for brokers, so that 

the borrower, not the lender, should pay the 

mortgage broker a fee for acting in connection 

with home lending”. 19 The Commissioner 

advocates change within a two to three 

year period, starting with a prohibition 

within 12 to 18 months on lenders paying 

brokers trail commissions on new loans, 

followed by a prohibition on lenders 

paying brokers other commissions. 20 

Noting competition concerns, the 

Commissioner opines that lenders dealing 

directly with borrowers could be required 

to charge borrowers a fee. 21 Even so, the 

recommendation to change the structure 

of broker remuneration has been met 

with intense criticism from, and lobbying 

by, the mortgage broker industry. It has 

raised concerns regarding competition and 

the ongoing viability of mortgage broker 

businesses. 

8 



FINANCIAL ADVISERS 

Brokers are not alone in coming under 

fire. The Commissioner also focuses 

upon financial advisers. He observes that 

a “sales-driven, commission-based culture” of 

advisers has endured. 22 Adding to this, he 

notes the advent of vertical integration 

of product manufacture with product 

sale and financial advice, which can also 

give rise to conflicts. These factors have 

resulted, at times, in clients’ best interests 

being given insufficient consideration and 

worse still, being cast by the wayside. 

The Commissioner considers that 

efforts to reduce or eliminate conflicts in 

the financial advice industry must begin 

with an examination of whether any of 

the current exceptions to the ban on 

conflicted remuneration remain justified. 23 

He recommends that grandfathering 

provisions 24 for conflicted remuneration 

should be repealed as soon as reasonably 

practicable. 25 

He further opines that acting in the 

best interests of clients requires advisers 

to consider whether taking a step (and if 

so, the particular steps to be taken) is in 

the client’s best interests “in the sense of 

achieving [the best] outcome most efficiently at 

the best available price”. 26 The Commission’s 

case studies revealed, however, that at 

times advisers recommended clients to 

take steps that were not in their best 

interests, but which steps immediately and 

directly benefited the adviser and/or the 

licensee financially. In many such cases, 

clients were advised to invest in “in-house” 

products. 27 In his view, there is a risk in 

such cases that the independent basis of 

advice given will be impaired. 28 

Whilst the Commissioner stops short 

of recommending an enforced separation 

of product and advice, he recommends 

that financial advisers who are not 

independent, impartial and unbiased 29 

be required to give prescribed written 

statements, before providing personal 

advice to retail clients, explaining simply 

and concisely why they are not so. 30 There 

is currently no such statutory obligation. 

The premise of this recommendation is to 

help retail clients more readily understand 

the conflicts that may pervade advice to be 

provided. 31 

WHERE TO NOW? 

The extent to which the 

Commissioner’s recommendations 

are given effect will be revealed in 

time. Whatever the uptake, the Royal 

Commission has put squarely in focus the 

existence of conflicts, their propensity 

to cause harm and the need to approach 

them appropriately. It serves as a salient 

reminder that fundamental general rules 

must always be front of mind: 

• To the extent practicable, avoid or 

eliminate conflicts. 

• In some circumstances, clients can give 

their fully informed consent, but this 

requires “full candour and appropriately 

complete disclosure”. 32 

Ultimately, restoring trust and 

confidence in the financial system requires 

clients’ best interests to be accorded 

paramount importance. B 

Endnotes 

1 Royal Commission into Misconduct in the 

Banking, Superannuation and Financial Services 

Industry. 

2 FSRC, Final Report, vol 1, 2-3. 

3 FSRC, Final Report, vol 1, 9. 







10 Recommendation 1.2; FSRC, Final Report, 

vol 1, 72. 

11 A mortgage that secures obligations under a 

credit contract is not a financial product for the 

purposes of Chapter 7 of the Corporations Act 

2001 (Cth): Corporations Regulations 2001 (Cth) 

reg 7.1.06(1)(f). Making a recommendation or 

stating an opinion about a mortgage is not giving 

financial product advice and thereby not giving 

personal advice to retail clients: Corporations Act 

2001 (Cth) s 766B(1) and (3). 

12 Recommendation 1.5 – Mortgage brokers as 

financial advisers; FSRC, Final Report, vol 1, 82. 

13 FSRC, Final Report, vol 1, 69. See also ASIC 

Report 516, 16 March 2017, 14. 




17 Benefits, because of their nature or 

circumstances in which they are given, could 

reasonably be expected to influence the choice 

of financial product recommended or could 

reasonably be expected to influence the financial 

product advice given to retail clients: Corporations 

Act 2001 (Cth) s 963A. See FSRC, Final Report, 

Glossary. 



20 Recommendation 1.3 – Mortgage broker 

remuneration; FSRC, Final Report, vol 1, 80. 


22 FSRC, Final Report, 122. 


24 Commissions that continue to be paid to 

intermediaries who sold financial products 

prior to the Future of Financial Advice reforms 

that would otherwise be classified as conflicted 

remuneration: FSRC, Final Report, Glossary. 

25 Recommendation 2.4 – Grandfathered 

commissions; FSRC, Final Report, vol 1, 185. 




29 Corporations Act 2001 (Cth) s 923A(5). 

30 Recommendation 2.2 – Disclosure of lack of 

independence; FSRC, Final Report, vol 1, 176. 


32 See O’Reilly v Law Society of New South Wales 

(1988) 24 NSWLR 204, 208. 

May 2019 THE BULLETIN 9


CONFLICT OF INTEREST: 

THE IMPACT OF DIGITAL & 

GLOBAL LEGAL PRACTICE 

DESLIE BILLICH, OFFICE OF THE LEGAL PROFESSION CONDUCT COMMISSIONER 

There are four core principles regarding 

professional integrity that guide legal 

practice: independence, confidentiality, 

avoiding conflicts of interest, and 

maintaining professional integrity and 

conduct. These ethical 1 challenges relate 

to characteristics that are particular to 

legal practice, such as: the solicitor-client 

privilege and relationship, the role of 

lawyers as intermediaries, outsourcing 

legal counsel, and the globalised nature 

of contemporary law firms. The latter 

aspect has serious and palpable impact 

on the practice of the law, especially with 

the heavy reliance on technology. This 

paper is prepared recognising there is no 

international regulatory framework for 

the practice of the law, though you will 

all know you are bound, and regulated by 

the Australian Solicitors Conduct Rules 

(ASCR), as well as the common law. 

While many commercial firms in 

Adelaide, and quite possibly other firms, 

have welcomed globalisation arguing 

it has brought positive development, it 

has also created significant challenges 

for others. Clients are generally more 

sophisticated, increasingly seek specialist 

advice at competitive prices, and one 

could argue that in this economic 

environment, traditional professional 

values are more and more at odds with 

lawyers’ commercial interests and with the 

commercial interests of a highly privileged 

client group. 

In this article I will address conflict of 

interest but in the more general context 

of the practice of the law in a digital and 

global world, and the growing imperative 

that practitioners must become more 

adept at navigating technology, understand 

the impingement on private data, and 

metadata, and how technology, and 

globalisation impacts on how practitioners 2 

in South Australia practice law. You might 

think “none of this impacts me, and how 

I practice law”, but it does, from simple 

advice not to press “reply all” when 

sending emails, to the complex world of 

email tracking and “web bugs”, let alone 

understanding how Artificial Intelligence 

(AI) can result in errors with complex 

disclosure. I will not address conflict 

of interest as it applies to practitioners 

employed as in-house Counsel or 

employed in the public sector. 3 They are 

discrete areas, with their own idiosyncratic 

issues. 

It is a generally accepted principle 

that practitioners should not act for two 

or more clients whose interests may 

potentially conflict. The ASCR do not 

provide a clear definition for conflict of 

interest. I have turned to the international 

sector that addresses corruption, 

and bribery for that definition. The 

Organisation for Economic Cooperation 

and Development (OECD) says: 

“Conflict of interest occurs when an individual 

or a corporation (either private or governmental) 

is in a position to exploit his or their own 

professional or official capacity in some way for 

personal or corporate benefit” 4 

In other words, a conflict of interest 

exists when someone could abuse his or 

her official position for private gain. Every 

conflict of interest requires one party to be 

in a position of trust, and every instance 

of corruption requires both a conflict of 

interest and a breach of that trust. The 

OECD oversees compliance of OECD 

countries with the OECD Convention 

on Combating Bribery of Foreign Public 

Officials in International Business 

Transactions, of which Australia in a 

signatory. Nationally and internationally, 

conflicts of interest are closely associated 

with corruption. For example, it has been 

noted that conflicts of interest “can be 

an indicator, a precursor, or a result of 

corruption”. 5 Conflicts of interest and 

corruption are intertwined as a conflict 

of interest exists where an official could 

abuse his or her position for private gain, 

whereas corruption exists where an official 

does abuse his or her position for private 

gain. The International Bar Association 

(IBA) defines a conflict of interest as 

a situation in which the representation 

of one client will be directly adverse to 

another client; or there is a significant 

risk that the representation of one or 

more clients will be limited by the lawyer’s 

responsibilities to another client, a former 

client, a third person or by the lawyer’s 

personal interests (IBA Rules 2011). 

Moreover, a lawyer must not exercise 

any undue influence intended to benefit 

the lawyer in preference to a client (IBA 

Rules 2011). 

10 


XXX 

The ASCR address conflict of interest 

in three of the Rules: Rule 10 (former 

clients), Rule 11(current clients), and 

Rule 12 (solicitor’s own interest). Put 

simply, the obligation is a practitioner 

shall not assume a position in which a 

client’s interests conflict with those of 

the practitioner, another practitioner in 

the same firm, or another client, unless 

otherwise permitted by law, applicable 

rules of professional conduct, or, if 

permitted, with the client’s authorisation. 

The universally accepted principle of 

what constitutes a conflict of interest is 

under pressure because of: 

• significantly increased demand for 

specialist legal services; 

• the globalisation of commerce and 

global and national legal firms; 

• the increase in size and number of 

sophisticated legal firms with a business 

structure (global fragmentation and 

even fragmentation within firms, as the 

business structure recognises the need 

for a focus on practice groups within 

firms that have a specialisation); and 

• greater mobility within the profession. 

If the above issues are not enough, 

the discernment of a conflict of interest 

is further complicated because the 

nature of legal partnership has changed. 

Firms that once grew from strong 

professional relationships built upon 

personal friendships (as would have 

been the situation in Adelaide for many 

years), and shared visions and common 

experiences have had to institutionalise 

and professionalise management and adapt 

to changes in the business environment in 

which their clients operate. Traditionally, 

legal firms were established on the notion 

that lawyers would likely practice by 

themselves, or in small firms in which 

lawyers were intimately involved in the 

practice, sharing common knowledge and 

experience. In these smaller structures, it 

was important for the partners to know 

each other well, and consequently these 

types of firms demanded a great deal of 

trust. The practitioners also knew their 

clients very well, and in Adelaide and 

cities like Adelaide, legal firms usually 

served the local market, and in some cases 

the national market, and usually went to 

school with or socialised with their clients. 

It was potentially a time where conflicts 

of interest did not play a significant role in 

legal practice. 

While this model still dominates the 

profession in pure numbers, especially 

in South Australia, the market for legal 

services has changed dramatically, and 

there are now economically powerful and 

professionally sophisticated and globalised 

firms. In Adelaide, firms have formed 

business and other types of mergers with 

national and Eastern State firms. This 

change in the practice of the law has been 

driven by the client, and the client’s strong 

demand for what is described as “end to 

end solutions”, resulting in the growth of 

multi-disciplinary practices (MDP). 6 Ethical 

rules that once presented few problems 

for sole practitioners, or small firms now 

fit uncomfortably into the larger legal 

landscape. 7 The landscape has changed, 

no longer do practitioners find themselves 

having attended school with their partners 

or colleagues, and no longer do they know 

their clients well. You might say that this 

is not applicable in Australia, but that is 

clearly not the case. PwC has been strategic 

and vocal, announcing an intention to 

grow the firm’s legal services team, as has 

KPMG, and EY. These organisations say 

the increase in MDPs 8 is a direct response 

to client demand for a full advisory service. 

The landscape will continue to change. 

This increase in global legal firms, and 

MDPs, has resulted in, and requires, 

greater reliance on technology, and a 

growing development of automated 

systems, and artificial intelligence (AI). 

These developments place a more 

nuanced and complex ethical obligation 

on practitioners with respect to all 

professional obligations, including conflict 

of interest. The professional obligations 

remain the same, but how you regulate and 

oversee changes, and how you perform 

due diligence, changes: practitioners must 

keep abreast of what these changes mean 

for their obligations. As practitioners 

you realise and appreciate technology 

and AI helps you perform routine tasks 

faster: whether that is populating a 

standard form contract, comparing or 

contrasting documents, or providing 

disclosure. The use of technology does 

not obviate a practitioner of his or her 

professional and ethical obligations. 



Technology, while assisting practitioners 

with their work, also opens the door for 

the significant possibility of breaches of 

professional obligations, from breach 

of confidentiality, release of private and 

personal information, failure to perform 

appropriate and legal disclosure, conflict 

of interest and undue influence, and the 

list continues. 

Nationally and internationally, conflict 

of interest is regulated in one of two 

ways: practitioners can be prevented 

from acting where conflicts arise, or 

conflicts can be controlled by appropriate 

measures. Australian regulation adopts 

both approaches. So where does that 

leave practitioners, legal firms, and clients 

working in a global environment? Clearly 

the differences in national rules on 

conflict of interest have to be taken into 

account in each individual case of crossborder/country 

practice. Practitioners 

have to be aware of, and comply with, 

the different rules in each country, while 

global law firms have to ensure their entire 

organisation complies with the rules in 

each jurisdiction. These difficulties are 

recognised by international Codes of 

Conduct such as is produced by the IBA, 

and American Bar Association (ABA). 

Across Australia the ASCR apply to 

all practitioners admitted to practice in 

Australia. 

Finally, I want to draw your attention 

to the definition of conflict of interest 

insofar as it relates to the use of 

“influence”. Over the past five years, 

most definitely in the United States, 

there has been an increase in the use 

of email tracking software in the legal 

profession. This should of course cause 

you some concern with respect to your 

ethical obligations. 9 Software developers 

suggest this could provide an advantage 

in settlement negotiations. With this 

software, you could track how many times 

your emailed settlement offers were read 

and therefore know how your offer was 

received: this software would provide you 

with data showing how many times your 

email was opened, sent on, forwarded, and 

also how often opened by other receivers. 

You could then know if your email was 

circulated to a number of people, and 

opened. 

If your email was only opened 

once, and never re-opened, you know 

your opponent is not interested. If it is 

opened on numerous occasions, then 

you know your opponent is interested. 

Is this an advantage? Should you have it? 

What can you do with it? Is data of this 

type discoverable? Is this type of data 

protected by solicitor/client privilege? If 

you have this information, does it change 

your tactics at the negotiation table? 

And if it does change your tactics, is this 

“influence”? 

The use of this type of software is 

not only relevant to issues of conflict of 

interest, it relates to ensuring you maintain 

your clients’ information as confidential, 

issues of solicitor/client privilege, issues 

of due diligence and disclosure. Privacy 

is extremely difficult to achieve with 

the racing ahead of technology, but 

practitioners have a continuing obligation, 

no matter the environment, to comply with 

their ethical obligations, and maintain their 

relationship with their client. The ABA 

in a recent opinion 10 recognised that the 

existence of complex and sophisticated 

software, and cyber threats, has changed 

the landscape in which practitioners work. 

The ABA says given these threats, 

the practitioner must take all reasonable 

steps to ensure they keep their 

ethical obligations, and it is therefore 

unreasonable for a practitioner to always 

rely on unencrypted email. In this context, 

data is rapidly becoming the most 

important commodity in the information 

game. Eventually there will be a way in 

which data will be evaluated, what it is 

worth, and whether breaches, or a lack of 

due diligence, will result in claims against 

you and your partners. It is part of your 

professional responsibility to keep your 

client’s data safe. B 

Endnotes 

1 Sir Gerard Brennan once said that ethics cannot 

be reduced to rules: “Ethics are not what the 

[lawyer] knows he or she should do; ethics 

are what the [lawyer] does. They are not so 

much learned as lived. Ethics are the hallmark 

of a profession, imposing obligations more 

exacting than any imposed by law and incapable 

of adequate enforcement by legal process. If 

ethics were reduced merely to rules, a spiritless 

compliance would soon be replaced by skillful 

evasion.” (Bar Association of Queensland, CLE 

Lectures, 3 May 1992) 

2 I have used the words lawyer and practitioner 

interchangeably throughout the article. 

3 The OECD has a useful resource, entitled 

Managing Conflict of Interest in the Public 

Sector, A Toolkit, 2005. 

4 OECD, 2007, Bribery in Public Procurement: 

Methods, Actors and Counter-Measures, OECD, 

Paris. Obviously this is not confined to conflict 

of interest as it applies to legal practitioners. 

5 Managing Conflicts of Interest, Asian 

Development Bank, Organisation for Economic 

Co-operation and Development, 2008, p xiii. 

6 There is a resurgence of this post the Enron 

disaster. 

7 See the 2016 Report: Australia: State of the 

Legal Market, Melbourne Law School and 

Thomson Reuters. 

8 The MDP structure has the potential to create 

difficulties for lawyers when it comes to 

considering their duty with respect to conflict of 

interest as it is more stringent than for example 

conflict of interest obligations that accountants 

must abide by. 

9 Though there are clearly many other uses- the 

confines of this article do not allow time to 

explore this further. 

10 ABA Standing Committee on Ethics and 

Professional Responsibility, Formal Opinion 

477R, May 22 2017 

12 


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LAWYERS SITTING ON BOARDS: 

POSITIVES & PITFALLS 

NICHOLAS ILES, PRINCIPAL, ILES SELLEY LAWYERS 

Practising lawyers are often asked to sit 

on the Boards of incorporated bodies 

– both companies and associations. The 

practice is probably more prevalent in the 

not for profit sector where the addition of 

a lawyer on the Board might obviate the 

need to seek costly external legal advice. 

Boards of schools and charities will often 

include a lawyer for this very purpose. 

This article focuses on the practising 

lawyer as a member of a Board, not 

those Board members who have retired 

from practice, or who might never 

have practised, but are otherwise legally 

trained. It is the practising lawyer who 

poses the most significant problems, 

with the potential conflict of duty to the 

corporation and professional duty just one 

of a number of issues which need to be 

carefully managed. 

ADVANTAGES OF HAVING A LAWYER ON 

THE BOARD 

The advantages of having a lawyer 

on the Board are obvious. In some cases, 

the incorporated body’s constitution or 

governance protocols will mandate the 

appointment of someone with legal skills. 

Whilst the lawyer’s peculiar attributes 

of problem solving, logical thinking and 

a familiarity with complex commercial 

transactions are undoubted advantages to 

a Board, a key incentive for appointing a 

lawyer to the Board is to obtain a firsthand 

legal perspective on matters before it. 

For the lawyer, a seat on the Board 

presents an opportunity to showcase 

their expertise or simply give back to the 

community. 

CONSTRAINTS 

However, the practising lawyer faces a 

number of constraints on what they can 

safely say or do in the Boardroom. More 

importantly, they may be at greater risk 

of a breach of duty to the corporation 

because of the legal skills they bring to the 

Board and the disproportionate influence 

they might have on Board decisions where 

legal considerations are paramount. 

The first and most obvious constraint 

which non-lawyer Board members do 

not share is the lawyer’s overriding duty 

to the Court and the administration of 

justice. Ethically, the lawyer cannot act, 

or omit to act, without regard to those 

duties or, more widely, their professional 

responsibilities as set out in the relevant 

Conduct Rules. Clearly, the lawyer cannot 

encourage, condone or be party to any 

action that might be legally or even morally 

questionable. Nor can he or she be party 

to concealing, from possible regulatory or 

judicial scrutiny, unlawful or inappropriate 

actions on the part of the corporation. 

Whilst that might generally be said of any 

member of the Board, the responsibilities 

of the lawyer as an officer of the Court 

are heavy and likely to be policed as a 

matter of professional standards. 

Indeed, to act otherwise is to defeat 

the whole purpose of appointing a 

lawyer to the Board. In this sense, the 

lawyer should regard the corporation as 

“the client” in ensuring that, by the use 

of their professional skills, it meets its 

legal and ethical obligations in a way 

that avoids the unwanted scrutiny of 

regulators, unwelcome litigation and public 

opprobrium. 

In circumstances where a Board 

member has a duty to act in the best 

interests of the corporation (what the 

Americans call the “duty of loyalty”), a 

potential conflict arises where those 

interests diverge from the ethical 

responsibilities outlined above. 

14 



THE LOSS OF PRIVILEGE 

At a more immediate level, problems 

arise when the lawyer Board member gives 

legal advice to the corporation. Clearly, 

however the lawyer might express their 

opinions, fellow Board members will often 

look to the lawyer to proffer legal advice 

in relation to matters before them. If, in 

doing so, there is no proper lawyer-client 

relationship (as one would not expect 

there to be where the lawyer is acting as 

a Board member), the lawyer cannot be 

said to be acting in a “professional capacity”: 

see Waterford v Commonwealth (1987) 163 

CLR 54 at 95. As such, there will be no 

legal professional privilege in the “advice” 

proffered. 

Clearly, the Board should be told to 

assume that when a lawyer, sitting as a 

Board member, is asked to express a legal 

opinion, that opinion will not be protected 

by legal professional privilege and, as such, 

risks disclosure, be it in legal proceedings 

or by some other coercive process. Where 

the issue is significant enough for the 

Board to require the protection of legal 

professional privilege, it will be necessary 

for either the corporation’s internal Legal 

Counsel (assuming the corporation has 

one) or external lawyers to advise. 

Quite apart from the loss of legal 

professional privilege, a particular problem 

arises where the legal opinion being sought 

from the lawyer Board member involves 

the legitimacy of the actions of the Board. 

In such cases, the lawyer cannot bring to 

the issue the independence of mind that is 

required of a legal practitioner. 

WHERE THE LAWYER’S FIRM IS RETAINED 

It appears to be commonplace that 

where external lawyers are retained, it 

might often be someone from the lawyer 

Board member’s firm. Whilst that might 

address the question of legal professional 

privilege (provided advice is given by 

someone other than the Board member), 

this practice gives rise to another set 

of problems. Clearly, the lawyer Board 

member will need to declare to the 

Board their interest in the retention of 

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that external lawyer insofar as the Board 

member’s firm will be remunerated. 

Whilst that is easy enough, the use of a 

Board member’s firm may raise significant 

questions about the objectivity and 

impartiality of the advice given. To what 

extent will that advice be affected by the 

Board’s objectives as relayed, purposely 

or inadvertently, by the Board member 

to his or her Partners? The temptation to 

tailor the advice to suit those objectives in 

deference to the Board member/Partner’s 

position may be overwhelming. 

Moreover, what if the external lawyers 

are called upon to advise the corporation 

in relation to the duties owed – and 

possibly breached – by Board members? 

A practical example of these kinds 

of problems arose recently in litigation 

involving a corporation of which a lawyer 

was a Board member. That corporation 

was named as a Defendant in Supreme 

Court proceedings. That same lawyer 

accepted instructions in those proceedings 

on behalf of another Defendant. Whilst 

it was open to that lawyer to insist on not 

receiving Board papers, or participating 

in Board deliberations regarding the 

litigation, it is difficult to see how that 

lawyer could discharge their duty of 

loyalty to the corporation when there 

were competing interests as between that 

corporation and the lawyer’s client. In such 

situations, neither the lawyer nor their firm 

should act in the litigation. 

INSURANCE 

Another area of concern is insurance. 

It has been many years since a lawyer’s 

professional indemnity insurance (whether 

under a statutory scheme or by way of 

top-up) would cover the potential liability 

of a lawyer as a Board member. Nor, 

obviously, will the statutory cap apply. 

Clearly, the lawyer Board member will 

be wholly reliant upon the corporation’s 

Directors, & Officers, insurance. However, 

it is very doubtful that that insurance cover 

would ever extend to the provision by a 

lawyer of legal advice to the corporation 

of which he or she is a Board member. 

This particular problem is 

compounded by the fact that there 

may well be a blurred line between the 

contribution of the lawyer as a Board 

member and as a lawyer, given the role 

lawyers are expected to play in Board 

deliberations and the reliance non-lawyer 

Board members may place on their 

opinions. This has the potential to lead to 

unhelpful disputes over D&O cover and 

even invalidate cover for the other nonlawyer 

Board members. 

RISKS TO YOUR PARTNERS AND 

EMPLOYEES 

Where the lawyer Board member is in 

practice with others, whether as a Partner 

or employee, any liability which they face 

as a Board member has the potential to be 

visited upon their Partners or employees, 

again with a loss of insurance cover. This 

is particularly so where the law firm also 

acts for the corporation. 

In a not dissimilar manner, where a 

corporation fails, perhaps due to some 

financial scandal, the reputational damage 

done to individual Board members has 

the potential to impact adversely on the 

partnerships or businesses in which they 

practice. 

THE IMPORTANCE OF DUE DILIGENCE 

These considerations underline 

the importance of due diligence before 

accepting a Board position. Who else is on 

the Board? How skilled is management? 

What does the corporation’s Constitution 

say about managing conflicts? Does 

the corporation have appropriate risk 

management strategies? Does it have 

external lawyers and, if so, who are they? 

What level of D&O cover does the 

corporation have? What are its terms? 

What liabilities does the corporation have 

– to creditors, especially the Australian 

Taxation Office bearing in mind directorial 

liability for unpaid tax? What guarantees 

have existing Board members provided 

– or which an incoming Board member 

might be expected to provide? From the 

firm’s perspective, what conflicts might 

arise between the corporation and the 

firm’s existing or future client base and 

how are such conflicts to be monitored or 

even identified? 

With respect to the last of these issues, 

whilst it might be easy enough to search 

for conflicts at the commencement of a 

Board appointment, how does the lawyer 

Board member know when faced with 

Board decisions that matters before the 

Board do not involve or impact on clients 

of their firm who are represented by other 

Partners or solicitors? 

CONCLUSIONS 

The lawyer’s willingness to take on a 

Board role, even in a not for profit, should 

be tempered by careful consideration of 

what risks their presence poses for the 

corporation, their fellow Board members, 

their practice and themselves. Assuming 

favorable responses to these questions, the 

incoming lawyer Board member would 

do well, as a starting point, to inform 

their Board colleagues, and minute, that 

they will never give legal advice to the 

corporation, to them or to management. 

Whilst invariably the lawyer will bring 

to any Board discussion a knowledge of 

the law and an appreciation of the legal 

issues at stake, the Board should be told 

that if the Board is seeking specific legal 

advice, it must not be from them, but 

from the corporation’s in-house lawyers (if 

they have them) or from external lawyers 

appointed by the corporation, the former 

of whom may, and the latter most certainly 

can, assert legal professional privilege in 

relation to that advice. 

Nicholas Iles is a litigation lawyer. He advises 

and has sat, and continues to sit, on not for profit 

corporations. B 

16 


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Conflicting Loyalties: A Miscarriage of 

Justice? The Case of Lawyer X 

JARRAD NAPIER, SOLICITOR, & RAFFAELE PICCOLO, MEMBER OF THE HUMAN RIGHTS COMMITTEE 

It is trite to observe that the integrity 

of the judicial process “is undermined 

if solicitors or counsel do not possess 

the objectivity and independence which 

their professional responsibilities and 

obligations to the court require of them.” 1 

Nonetheless, the High Court of Australia 

(the HCA) recently had occasion to make 

an unequivocal comment to the same effect: 

EF’s actions in purporting to act as counsel for 

the Convicted Persons while covertly informing 

against them were fundamental and appalling 

breaches of EF’s obligations as counsel to her 

clients and of EF’s duties to the court. 2 

The case before the HCA concerned 

the conduct of Nicola Gobbo (referred 

to above as “EF”, and also known as 

“Lawyer X”), 3 a criminal barrister in 

Victoria acting as a police informer. 

Gobbo acted as a police informer while 

simultaneously purporting to act as 

counsel for persons accused of criminal 

offences (referred to above and hereafter 

as the Convicted Persons). Gobbo 

provided information to Victoria Police 

(and in some cases made statements to the 

Victorian Police) that had the potential to 

undermine the defences of those persons. 

Those persons were later convicted. 

The above circumstances came to 

the attention of the Director of Public 

Prosecutions for Victoria (DPP) in 

early February 2015. Pursuant to the 

obligation of ongoing disclosure, the 

DPP then proposed to disclose the above 

information to the Convicted Persons. 

The Chief Commissioner of Victoria 

Police, and Gobbo, were opposed to this 

proposed disclosure. They respectively 

claimed that the relevant information was 

the subject of public interest immunity, 

and/or that Victoria Police owed Gobbo 

an equitable obligation of confidence. 

On each basis, it was claimed that 

the information was not amenable to 

disclosure. 

The HCA was ultimately asked to 

determine the adequacy of the protection 

available to Gobbo and her children in the 

event that disclosure occurred. The HCA 

was satisfied that the safety of Gobbo and 

her children could adequately be protected 

if Gobbo agreed to enter into a witness 

protection program. Consequently, the 

HCA unanimously revoked special leave 

to appeal. 

The decision to revoke special leave 

to appeal does not bring this saga to 

an end. The HCA was not required to 

answer what, if any effect, the conduct of 

Gobbo had on the cases for the Convicted 

Persons cases for whom she acted. 

We proceed to consider whether 

this conduct gives rise to a “substantial 

miscarriage of justice”, and grounds of 

appeal against conviction. 4 We conclude 

that the conduct of Gobbo caused a 

substantial miscarriage justice. 

PROFESSIONAL OBLIGATIONS 

The HCA observed that Gobbo acted 

contrary to her obligations as counsel to 

the Convicted Persons and her duties to 

the court. In terms of her duties to the 

court, rule 3.1 of the Australian Solicitor 

Conduct Rules (the Rules) provides that 

the paramount duty of a lawyer is to the 

court and the administration of justice. 5 

This duty prevails to the extent of any 

inconsistency with any other duty. 6 In 

respect of the Convicted Persons, she 

may have failed to fulfil her duties to act 

in the best interests of her client, 7 to not 

disclose any information confidential to 

her client, 8 to maintain legal professional 

privilege, 9 to avoid conflicts of interests, 10 

and to uphold her fiduciary duties of 

fidelity and loyalty to her client. 11 To 

that, we note that a lawyer has a duty 

not to engage in conduct that is likely to 

prejudice, or diminish public confidence 

in, the administration of justice, or bring 

the profession into disrepute. 12 As noted 

at the outset, the integrity of the judicial 

process “is undermined if solicitors or 

counsel do not possess the objectivity and 

independence which their professional 

responsibilities and obligations to the 

court require of them.” The conduct of 

Gobbo undermined the integrity of the 

judicial process and the administration 

of justice. She wrongly held herself out 

as independent, and as acting in the best 

interests of her clients when Gobbo 

had no grounds to share any privileged 

information with others. 

18 



APPEAL AGAINST CONVICTION - STATUTORY 

TEST FOR A MISCARRIAGE OF JUSTICE 

We consider the process the Convicted 

Persons will have to undertake to have 

their convictions overturned. The question 

that must be determined is whether “a 

substantial miscarriage of justice has 

actually occurred”. 13 

In Victoria, s 274 of the Criminal 

Procedure Act 2009 (Vic) (CPA) establishes 

a convicted person’s right of appeal. 

The court must allow an appeal against 

conviction if satisfied of one of the 

following: 

• the verdict of the jury is unreasonable 

or cannot be supported having regard 

to the evidence; 14 or 

• as the result of an error or an 

irregularity in, or in relation to, the trial 

there has been a substantial miscarriage 

of justice; or 

• for any other reason there has been a 

substantial miscarriage of justice. 15 

The South Australian provisions are 

expressed in similar terms. 16 

These provisions require the court to 

undergo an examination of the record 

and determine for itself whether on the 

evidence properly before the court, the 

prosecution’s case was proven beyond 

reasonable doubt. 17 Even in the event that 

the grounds are made out, the CPA (and 

the South Australian provisions) allow for 

the appeal to be dismissed if there was no 

‘substantial miscarriage of justice’. 

APPEAL AGAINST CONVICTION - CASE 

LAW ON THE TEST FOR A MISCARRIAGE 

OF JUSTICE 

Lee v The Queen 18 

The New South Wales Crime 

Commission (the Commission) summoned 

the appellants to give evidence. The 

appeal concerned the publication of the 

evidence that the appellants gave before 

the Commission. The Commission 

published the transcripts of the evidence 

of the appellants to the Director of 

Public Prosecutions for New South 

Wales (the Director). The publication 

was made despite a Commissioner having 

prohibited publication of the transcripts. 

The transcripts were published subsequent 

to the appellants being charged with 

a range of firearms, drug, and money 

laundering offences. While the lawyers for 

the appellants knew that the Director had 

possession of the transcripts, they did not 

know that the transcripts were supplied to 

the Director, at the Director’s request, for 

the Director to ascertain any defences the 

appellants might raise. 

On appeal, the appellants claimed that 

there had been a miscarriage of justice by 

reason of the prosecution’s possession and 

possible use of the appellants’ evidence 

given before the Commission. 

The HCA observed: 

This is a case concerning the very nature of 

a criminal trial and its requirements in our 

system of criminal justice. The appellants’ 

trial was altered in a fundamental respect by 

the prosecution having the appellants’ evidence 

before the Commission in its possession. 

The prosecution has a specific role in our 

system of criminal justice, one which entails 

particular responsibilities...It is the prosecution 

which has the responsibility of ensuring its case 

is presented properly and with fairness to the 

accused. It is therefore more to the point that 

the prosecution’s possession of the appellants’ 

evidence before the Commission put at risk 

the prospect of a fair trial, which [relevant 

provision] sought to protect. The prosecution 

should have enquired as to the circumstances in 

which the evidence came into its possession and 

alerted the trial judge to the situation, so that 

steps could be taken to ensure that the trial was 

not affected. 19 

The HCA confirmed that the 

obligation of the prosecution to prove 

their case, unaided by the accused, is 

fundamental to our system of criminal 

justice. 20 

The HCA concluded that “[i]t 

cannot be said that the appellants had 

a trial for which our system of criminal 

justice provides and which [the relevant 

provision] sought to protect. Rather, their 

trial was one where the balance of power 

shifted to the prosecution.” 21 The HCA 

held that a miscarriage of justice had 

occurred, allowed the appeals, and quashed 

the convictions. 

R v Szabo 22 

The appellant was convicted of 

burglary and rape and sentenced to 

imprisonment for seven years. On appeal, 

the appellant relevantly claimed that his 

lawyer was in a relationship with the 

Crown prosecutor, and as such he was 

deprived of truly independent legal advice. 

The appellant’s counsel and the 

prosecutor had been in a de facto 

relationship for a period of 11 months. 

This included living together for a period 

of six months. The relationship had 

concluded before the commencement of 

the trial. On the weekend following the 

trial they occupied the same motel room 

(albeit platonically). They resumed their 

relationship some three months later. 

There was no suggestion of any actual 

disclosure of material by defence counsel 

to the prosecutor. 

De Jersey CJ observed that this case 

was “not a case of actual injustice. The 

Crown case was strong, the defence 

was robust and the trial was regularly 

conducted.” 23 However, justice and proper 

processes must not only be done, they 

must be seen to be done. As his Honour 

observed: 

Litigants see members of the bar conducting 

themselves as officers of the Court, owing a 

special duty to the Court. Just as the Court 

expects fearlessly independent presentation by 

counsel, so the client expects that subject to 

counsel’s supervening duty to the Court, counsel 

will with fearless independence promote the 

client’s cause. 

The circumstances of this case would engender 

reasonable suspicion or apprehension in a fair 

minded, informed observer as to whether defence 

counsel necessarily acted with that fearless 

independence. That is the test, transposed by 

analogy from that applicable to apprehended 

judicial or jury bias. In this case there 



plainly was no “real likelihood” that defence 

counsel did not properly defend his client. 

But notwithstanding the apparently robust 

defence, would a fair minded, informed observer 

nevertheless entertain a reasonable suspicion or 

apprehension that defence counsel may not have 

done so? 

It is counsel’s failure in this unusual case to 

disclose the circumstance of his relationship 

with the prosecutor which I believe warrants 

answering that question “yes”. 24 

Thomas JA formulated the relevant 

test in a slightly different form: 

with knowledge of all relevant circumstances, 

an ordinary fair-minded citizen in the position 

of the appellant would entertain a reasonable 

suspicion that justice had miscarried. Such a 

conclusion however does not necessarily follow 

from the mere fact that the Crown prosecutor 

and defence counsel have an association or 

even a sexual relationship. All relevant 

circumstances have to be considered, including 

the conduct displayed by defence counsel 

which might feed or rebut any suspicion of 

unfairness. 25 

As such, Thomas JA posited that he 

was not aware generally of “any sufficient 

reason to think that by reason of their 

relationship such persons would not each 

do their best on behalf of their respective 

clients.” 26 Nonetheless, Thomas JA held 

that there remained an ethical duty upon 

a lawyer to disclose to his or her client 

the existence of such a relationship with 

opposing counsel, allowing the client 

to decide whether to proceed, or seek 

alternative representation. 27 

For Thomas JA, the more critical 

issue was the failure of defence counsel 

to disclose the relationship to his client, 

and to therefore deprive his client of the 

opportunity to object, where “an ordinary 

fair-minded citizen in the position of the 

appellant with knowledge of all relevant 

circumstances would have at least a 

lingering suspicion that the appellant did 

not have the benefit of fair play.” 28 The 

Court held that a miscarriage of justice 

had occurred on this ground, allowed the 

appeal, and set aside the convictions. 

20 THE BULLETIN May 2019 

DID THE CONDUCT OF GOBBO CAUSE A 

MISCARRIAGE OF JUSTICE? 

The above cases demonstrate the 

following: 

• the prosecution and defence have 

distinct roles in the criminal justice 

system; 

• the role of the prosecution is to prove 

their case, unaided by the accused; 

• unauthorised prosecution knowledge 

of the defence case is incompatible 

with the notion of a fair trial; and 

• opposing counsel should not be in 

such a relationship so as to cause a 

fair minded, informed observer to 

entertain a reasonable suspicion or 

apprehension that defence counsel did 

not properly defend his or her client, 

and if so, such a relationship must 

be disclosed to the defendant before 

trial, so as to allow the defendant the 

opportunity to object. 

The conduct of Gobbo was contrary 

to each of these principles. Gobbo was 

a police informer. While it is not clear 

what information she provided to Victoria 

Police about the Convicted Persons, there 

does not appear to be any doubt that at 

the very least she provided information to 

Victoria Police which had the potential to 

undermine the defences of the Convicted 

Persons. 29 As such, the DPP may have 

obtained knowledge of the accused’s 

case without authorisation. Consequently, 

Gobbo, had blurred the distinctive roles of 

prosecution and defence in a criminal trial, 

and “the balance of power shifted to the 

prosecution.” There is no distinction to be 

made by the fact that Gobbo was liaising 

with the police (an investigating authority) 

rather than the DPP (a prosecuting 

authority). Police and prosecutors are one 

in the same. 30 

The relationship that Gobbo 

maintained with Victoria Police, even in 

a professional sense, should have been 

disclosed to the Convicted Persons, 

regardless of the information provided 

by her to Victoria Police. Justice must be 

done, and must be seen to be done. The 

Convicted Persons were deprived of the 

opportunity to object to Gobbo acting 

as their counsel. Now apprised of such 

information, the Convicted Persons, but 

more relevantly, an ordinary fair-minded 

citizen in their position would have at least 

“a lingering suspicion” that a fair trial did 

not occur. 

These circumstances give rise to “a 

substantial miscarriage of justice”, within 

the meaning of s 276 of the CPA, be 

it either “as the result of an error or an 

irregularity in, or in relation to, the trial 

there has been a substantial miscarriage 

of justice” or “for any other reason there 

has been a substantial miscarriage of 

justice.” We say that it is not open to a 

court to rely on the proviso that there 

has been “no substantial miscarriage of 

justice” to dismiss an appeal in a case 

such as this “where error, impropriety or 

unfairness has pervaded and affected the 

trial to an extent where the overall trial 

ceased to be a fair trial according to law.” 31 

On any view, the conduct of Gobbo 

as a police informer was completely 

inappropriate given her role as defence 

counsel and fundamentally altered the trial 

of the Convicted Persons. Her conduct 

deprived the Convicted Persons of their 

legal representation, in a practical sense 

(representation by counsel is essential to 

a fair trial in most cases where a person is 

charged with a serious offence). 32 

Any appeals against conviction by the 

Convicted Persons must be allowed. This 

is not because of some perception that 

innocent persons have been convicted. 

Rather, the appeals must be allowed on 

the simple, but fundamental basis that 

the Convicted Persons did not receive a 

fair trial. This must be so because to do 

otherwise would downplay the vital role of 

lawyers in the administration of criminal 

justice, and moreover seriously weaken 

public confidence in the integrity of the 

curial processes. 33 

Professional obligations are not 

simple niceties of the legal profession. 

Non-observance can have serious 

consequences for clients, lawyers, and the 

administration of justice. In this case, we 

say that the failure of a lawyer to observe 

her professional obligations has led to a 

substantial miscarriage of justice. B


Endnotes 

1 Kooky Garments Ltd v Charlton [1994] 1 NZLR 

587, 590. See also Lyons v Legalese Pty Ltd & Others 

[2016] SASC 160 [55]. 

2 AB (a pseudonym) v CD (a pseudonym); EF (a 

pseudonym) v CD (a pseudonym) [2018] HCA 58 [10]. 

3 AB & EF v CD [2017] VSC 350. 

4 See, eg, Criminal Procedure Act 1921 (SA) s 

158(2) which provides that the Full Court may, 

notwithstanding that it is of the opinion that 

the point raised in an appeal might be decided 

in favour of the appellant, dismiss the appeal if 

it considers that no substantial miscarriage of 

justice has actually occurred. See also Criminal 

Procedure Act 2009 (Vic) s 276(1). 

5 The Australian Solicitors’ Conduct Rules 

incorporating the changes approved by the 

Law Council of Australia in March 2015 and 

April 2015. The Rules were adopted by the Law 

Society of South Australia on 1 July 2015. Legal 

Practitioners Act 1981 (SA) s 70 provides that 

conduct consisting of a contravention of the 

legal professional rules is capable of constituting 

unsatisfactory professional conduct or 

professional misconduct. “legal profession rules” 

means the Law Society’s professional conduct 

rules. 

6 Rule 4(a) of the Legal Profession Uniform Conduct 

(Barristers) Rules 2015 (the Barrister Rules) 

provides that the Rules are made in the belief 

that “barristers owe their paramount duty to the 

administration of justice”. Rule 8(a) provides that 

a barrister must not engage in conduct which is 

“prejudicial to the administration of justice”. 

7 Rule 4.1 of the Rules. Rule 35 of the Barrister 

Rules provides that “A barrister must promote 

and protect fearlessly and by all proper and 

lawful means the client’s best interests to the best 

of the barrister’s skill and diligence, and do so 

without regard to his or her own interest or to 

any consequences to the barrister or to any other 

person.” 

8 Rule 9.1 of the Rules. Rule 114 of the Barrister 

Rules provides that “A barrister must not disclose 

(except as compelled by law) or use in any 

way confidential information obtained by the 

barrister in the course of practice concerning any 

person to whom the barrister owes some duty or 

obligation to keep the information confidential”. 

9 Baker v Campbell (1983) 153 CLR 52, 85. 

10 Rule 12 of the Rules. Rule 101(b) of the Barrister 

Rules provides that a barrister must refuse to 

accept or retain a brief or instructions to appear 

before a court if “the client’s interest in the 

matter or otherwise is or would be in conflict 

with the barrister’s own interest or the interest”. 

11 Hospital Products Ltd v United States Surgical 

Corporation (1984) 156 CLR 41, 96-7; Comit Farm 

Produce P/L v Valamiou & Ors [2009] SADC 19 

[141]. 

12 Rule 5.1 of the Rules. Rule 8(c) of the Barrister 

Rules provides that a barrister must not engage 

in conduct which is “likely to diminish public 

confidence in the legal profession or the 

administration of justice or otherwise bring the 

legal profession into disrepute”. 

See end notes on page 45. 

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Identifying and avoiding conflicts 

when representing co-accused 

JAMES MARCUS, BARRISTER, LEN KING CHAMBERS, & STEPHEN RANIERI, CRIMINAL LAW COMMITTEE 

The representation of co-accused in 

a criminal proceeding has long been 

recognised as one of the most challenging 

aspects of criminal practice. 

The joint criminal trial of two persons charged 

either on the basis that both were jointly 

involved in criminal conduct or on the basis 

that one or other of them is alone guilty of the 

charged criminal offence has long been rightly 

seen as representing one of the most difficult 

facets of the administration of criminal justice. 1 

However, there are also advantages in 

economy and efficiency of representation 

for joint accused and the presentation of 

a joint defence. The aim of this article is 

to highlight broadly selected risks inherent 

in the representation of co-accused by the 

same lawyer, and offer some preliminary 

guidance in managing those risks. 

The genesis of the challenge lies 

predominantly in a legal practitioner’s 

fiduciary duty to act in the best interests of 

their client. Whilst this duty is subordinate 

to the ultimate duty to the court, it is vital 

a client is able to trust their lawyer is there 

to act for them and them only, and to place 

the client’s interests above their own. It is 

the cornerstone of the community’s ability 

to trust the legal profession. As such it is 

vital that legal practitioners are aware of 

precisely what their obligations are in that 

regard. 

The common law continues to 

underpin this duty, 2 however there are a 

number of regulatory schemes which also 

impose obligations upon lawyers to avoid 

conflicts of interest. The key rules and 

guidelines to be aware of are: 

• Australian Solicitor’s Conduct Rules; 

• South Australian Barrister’s Conduct 

Rules; 

• Australian Bar Association Rules; and 


• Legal Services Commission funding 

guidelines. 

Whilst the specifics differ, broadly: 

• All prescribe an obligation to avoid 

conflicts of interest, which clearly could 

include the situation of acting for coaccused. 

It is vital anyone proposing 

to act for two co-accused either 

simultaneously or at different times 

must be aware of these requirements. 

• You must be open and frank with 

the clients about the nature of their 

representation and the possible 

consequences if their interests or 

instructions came into conflict. And, 

• All require that you cease acting for 

both clients in the event of a conflict, 

as you may not use confidential 

information gained while acting for 

your client against another person. 

In the context of a criminal trial, 

it is helpful to recall the underlying 

obligation upon the Crown to prove the 

alleged offence against each accused beyond 

reasonable doubt. The most readily 

obvious area for a conflict to arise is each 

accused is a competent witness for the 

defence, which may include them giving 

evidence against another co-accused – the 

so-called cut-throat defence. 

However there are other factors that 

must be considered which may cause 

clients’ interests to diverge. These can 

be loosely grouped into three categories. 

Differences in the Crown case: differences 

in instructions, and differences in forensic 

decision making. 

DIFFERENCES IN THE CROWN CASE 

BETWEEN CO-ACCUSED 

The Crown case can differ markedly 

between accused in the same case. 

This generally arises from differences 

in admissible evidence or at least the


reliability of that evidence between them, 

especially if one client has participated 

in a record of interview, or has been the 

subject of investigation for longer. This 

is even more so if admissions have been 

made by one and not the other. The 

differences need not be stark, and can 

be as simple as one client being clearly 

identified and the other not. 

Another area to consider is the 

nature of the liability of the parties. Are 

both alleged principals? Or, does the 

prosecution rely on a form of complicity 

such as a joint enterprise or as aiders 

and abettors? This can be particularly 

problematic if the prosecution alleges 

differing roles between the clients, 

especially if alleging liability on the 

basis of an extended joint enterprise or 

intending to make use of evidentiary rules 

such as the co-conspirators rule. 

Furthermore, consideration should also 

be given to any differences in the nature 

or counts of alleged offending between 

clients, or if the prosecution proposes to 

lead discreditable conduct evidence against 

one or both. Careful consideration should 

be given to issues of cross-admissibility 

and the potential prejudice arising from a 

large number of charges, from which an 

application for severance of some or all of 

the client’s matters should follow. 

Differences in instructions between 

co-accused 

The cut-throat defence, where one 

or both of the clients directly implicate 

the other, is most likely to arise in this 

group. However, there are other ways in 

which your client’s instructions can result 

in incompatibility and conflict, some of 

which are not always obvious. 

A possible scenario involves one client 

who wishes to plead guilty to offending, 

especially when any such plea offer is made 

contingent on the discontinuance of the 

charges against the other. It is important 

the power relationship between clients is 

considered to ensure it is a truly voluntary 

decision on the part of the pleading party. 

This again requires careful 

consideration of the interests of both as 

they part ways in the judicial process. If 

one client wishes to proceed to trial, do 

they now intend to blame their former 

co-accused when they are no longer able 

to give evidence in reply? Or, does the 

client proceeding to a plea wish to provide 

confidential information and potentially 

receive the benefit of a letter of comfort, 

the existence and content of which is likely 

not able to be disclosed to the other client. 

Flowing from this are also questions 

of parity of sentence, should it arise that 

both either plead or are found guilty. It 

is important that the principles of parity 

are explained, especially as it may be 

influenced by their respective antecedent 

histories and roles within the offending. 

Lastly there are issues around the fees 

for your professional services. It is vital 

both clients understand your professional 

and ethical obligations apply equally to 

both irrespective of who is paying the bill. 

Differences in forensic decisions taken 

at trial 

The third category is differences in 

forensic decisions that may be taken 

throughout the course of a matter and at 

trial. This can be an area requiring careful 

consideration, as the presentation of a 

joint defence may be of considerable 

benefit to both clients overall. 

One client may be prepared to make 

factual concessions or give evidence on 

matters when the other is not. For example, 

that they were present when the offending 

took place and the issue is self-defence, or 

that drugs were for their own personal use 

and not for sale, when the other client may 

not as they are running an ‘identification 

case’. This will often be heavily influenced 

by the nature of the case against each 

client, but may also be influenced by a 

client’s ability to explain and to give clear 

and cogent evidence in the witness box. 

Another similar consideration is if one 

client should lead good character evidence 

and the other either should not or does 

not, as the absence of the latter may take 

the jury’s attention. 

There are further forensic 

considerations such as the nature of the 

directions, if any, to request the Judge to 

give the jury at the conclusion of the case. 

A number of directions are well known 

‘double-edged swords’ which may be in 

one client’s interests but not the other, 

examples include a lies (Edwards/Zoneff) 

direction, or a use of evidence of belief 

or disbelief on other counts (Markuleski) 

direction. 

These are a selection of matters to 

consider should you be engaged by two 

clients simultaneously, which require 

careful attention to avoid the loss of both 

clients in the event their interests come 

into conflict. 

WHAT TO DO ABOUT POTENTIAL CONFLICTS 

So what can one do to attempt to 

minimise the risk of losing both clients? 

The key piece of advice is to be as 

open and frank as possible with both 

clients about the nature and scope of your 

professional obligations and to ensure 

they are informed that a divergence in 

their interests and instructions make joint 

representation untenable. This provides 

both clients with an early opportunity 

for one of them to obtain alternative 

representation and avoid the risk of 

complications later in the matter. 

Where instructions differ markedly 

between co-accused, and the risks are 

explained to each, it is vitally important 

that written confirmation is provided to 

each outlining your instructions and those 

risks. Written instructions ought to be 

signed by each client, along with disclosure 

of your obligations to them. Confirmation 

of a client’s instructions in writing should 

be the rule, rather than the exception. 

Moreover, the importance of detailed 

and contemporaneous file notes cannot be 

overstated. 

If in doubt advice should be sought 

from senior colleagues or counsel. B 

Endnotes 

1 Bannon v The Queen (1995) 185 CLR 1 at 13 

(Deane J). 

2 See, eg, Giannarelli v Wraith (1988) 165 CLR 543 

at 555-7 (Mason CJ). 


CASE NOTE 

The Arrest of the Dangjin – 

Determining A Ship’s Beneficial 

Ownership While Held In Trust 

TRAVIS SHUEARD, ASSOCIATE, CHARLTON ROWLEY 

The recent Full Federal Court decision 

of Korea Shipping Corporation v Lord 

Energy SA 1 is a decision with respect to 

determining the beneficial ownership of 

a vessel under the surrogate ship arrest 

provisions of section 19 of the Admiralty 

Act 1988 (Cth) (Admiralty Act). It provides 

a useful reminder of the importance of 

ensuring that expert evidence addresses 

the questions which the Court needs to 

consider, particularly in the context of 

cross-border disputes. It also demonstrates 

the limitations in applying the presumption 

that foreign law is the same as the lex fori. 2 

BACKGROUND – THE DANGJIN AND ITS 

ARREST 

On 26 October, 2018, Lord Energy 

SA commenced an action in rem against 

the Korean bulk carrier Dangjin, claiming 

USD$7.5 million against Korea Shipping 

Corporation (KSC). The Dangjin was 

arrested at Newcastle Harbour under the 

surrogate ship provisions of section 19 of 

the Admiralty Act. The dispute between the 

parties arose out of a charterparty dispute 

with another KSC related ship, the DS 

Valentina. 

In order to arrest the Dangjin under 

section 19 of the Admiralty Act, Lord 

Energy SA had to prove that KSC was 

the owner of the Dangjin when the action 

was commenced. 3 KSC argued that Lord 

Energy SA had not proven that KSC had 

ownership of the Dangjin. 

TRUST ARRANGEMENT OF THE DANGJIN 

Prior to the arrest, the Dangjin 

was placed under a trust arrangement 

(governed by the Korean Trust Act) to 

accommodate a loan provided to KSC by 

the Bank. In this arrangement: 

• KSC was the trustor, debtor and the 

secondary beneficiary; 


• IBK Securities Co Ltd was the trustee 

and registered owner; and 

• Nonghyup Bank was the preferred 

beneficiary. 

KSC argued that this arrangement 

meant that KSC could not be properly 

characterised as the beneficial owner of 

the Dangjin for the purposes of section 19 

of the Admiralty Act. 

DETERMINING RIGHTS OF PARTIES TO A 

FOREIGN TRANSACTION 

When determining the rights of 

parties under a foreign transaction, the 

settled position is that the law of Australia 

governs the characterisation of the rights 

of the parties as they are derived from the 

relevant foreign transaction. 4 The existence, 

nature and extent of the rights created by 

that transaction would be governed by the 

foreign law which Australia considered 

most relevant. 5 The Dangjin was a Korean 

flagged vessel and the trust arrangement 

was governed by the Korean Trust Act. 

Accordingly, the parties agreed that the 

correct approach to determining the 

beneficial ownership of the Dangjin was to 

identify KSC’s rights under Korean law in 

respect to the trust arrangement. 6 

In respect to ownership, at least for the 

purposes of section 19 of the Admiralty 

Act, Allsop CJ stated in The Bulk Peace 7 that 

it is necessary to show that the relevant 

person has the right both to make physical 

use of the vessel, and to sell the vessel (as 

well as keeping the proceeds of any sale). 8 

Connotations of “dominance, ultimate 

control, and ultimate title” are taken into 

account. 9 

PRIMARY DECISION 

Both parties had commissioned expert 

reports on Korean law, but these reports 

were deficient and did not adequately 

consider the question of beneficial 

ownership. The reports were only relied 

upon as expressions of each expert’s 

opinions. 10 

Rares J had to rely on his own review 

of the Korean Trust Act and apply the

CASE NOTE 

presumption that the foreign law is the 

same as lex fori. 

Rares J dismissed the application, 

finding that, despite the restructuring, 

KSC beneficially owned the Dangjin. 

Rares J found that KSC could repay 

the loan early. The transaction documents 

contemplated that KSC could make an 

early full repayment to the Bank. The 

Bank and IBK would have to consent to 

early repayment and provide documents 

which would affect a transfer of 

ownership on completion of any sale of 

the ship that KSC might arrange. Once the 

Bank ceased to have a financial interest to 

secure the vessel through the trust (after 

repayment), his Honour reasoned that the 

Bank would be unlikely to stand in KSC’s 

way of transferring ownership. 11 While 

theoretically the Bank might have refused 

an early repayment in full, through the sale 

of the Dangjin or otherwise, his Honour 

was not convinced that this was a likely 

outcome. 12 

His Honour also determined that 

KSC’s interests as a residuary beneficiary 

under the trust were comparable under 

Korean law to that of a mortgagor with 

an equity of redemption under Australian 

law. These rights left KSC free to operate 

the Dangjin as it chose to, including having 

the right to earn income from the vessel’s 

activities. 

KSC appealed the decision to the Full 

Court of the Federal Court. 

APPEAL 

The Full Court allowed the appeal and 

dismissed the arrest warrants. KSC was 

not the beneficial owner of the Dangjin 

for the purposes of section 19 of the 

Admiralty Act. 

The Full Court held that there was 

no evidence to suggest under the trust 

documents that KSC had any ownership 

or proprietary rights while the trust was 

in place. This was contrary to the primary 

judge’s determination – for example, KSC 

was required to gain the Bank’s approval 

to enter any charterparty or dealings with 

the vessel and with the receivables. 13 

Further, it was not appropriate 

for the primary judge to characterise 

KSC’s interest under Korean law as 

equivalent to a mortgagor with an equity 

of redemption under Australian law; 

the trust arrangements suggested under 

Korean law that KSC’s proprietary 

interests in the Dangjin were divested until 

the trust arrangement came to an end. 

Only once the arrangement comes to 

an end were proprietary rights transferred 

to KSC. 

The Full Court determined that 

it would be “a misuse of the relevant 

presumption that foreign law is the same 

as lex fori” 14 to use the presumption in 

circumstances where the evidence is 

contrary to the consequences of applying 

the Australian law in that way. 15 Neither 

expert dealt with the concept of an equity 

of redemption, any clog on the equity of 

redemption or any form of proprietary 

interest which was recognised by Korean 

law from an equivalent principle. 16 Since 

the evidence did not properly consider 

the question of beneficial ownership 

under Korean law, Rares J had effectively 

altered the meaning of the rights afforded 

to KSC under Korean law, rather than 

simply characterising them. 17 Given this, 

Australian law could not characterise 

the trust arrangement under the Korean 

Trust Act as being equivalent to beneficial 

ownership of a mortgagor holding an 

equity of redemption. 18 

CONSEQUENCES 

This decision reinforces the need for 

expert evidence to consider the specific 

issues of a dispute. Appropriate and 

considered expert evidence would have 

allowed the Court to make a determination 

without having to rely on the presumption 

in the face of a complex foreign trust 

arrangement and foreign statute law. 

Practitioners, whether in admiralty 

law or otherwise, should be conscious 

of the need for specificity of evidence 

in cross-border disputes, and be wary of 

the limitations of the presumption of 

foreign law in respect to the lex fori. As 

this dispute demonstrates, inadmissible 

expert evidence can lead to significant 

consequences affecting either side of 

proceedings. B 

Endnotes 

1 [2018] FCAFC 201. 

2 “the law of the country in which an action is 

brought.” 

3 Admiralty Act 1988 (Cth) s 19(b). 

4 Tisand (Pty) Ltd v The Owners of the Ship MV “The 

Cape Moreton” (EX “Freya”) (2005) 143 FCR 43. 

5 Ibid. 

6 Korea Shipping Corporation v Lord Energy SA 

[2018] FCAFC 201, [84]. 

7 Shagang Shipping Co Ltd v Ship “BULK PEACE” 

as surrogate for the Ship “DONG-A-ASTREA” 

(2013) 314 ALR 230. 

8 Ibid [20]. 

9 Ibid. 

10 See Evidence Act 1995 (Cth) s 136. 

11 Lord Energy SA v The Ship “MV Dangjin” [2018] 

FCA 1717 [66]-[67]. 

12 Ibid [69]. 

13 Ibid [33]. 

14 Korea Shipping Corporation v Lord Energy SA 

[2018] FCAFC 201, [49]. 

15 Ibid. 

16 Ibid [48]. 

17 Ibid [48]. 

18 Ibid [50]. 


FEATURE 

Can a Legal Opinion not 

contain an opinion? 

CHAD JACOBI, BARRISTER, EDMUND BARTON CHAMBERS AND JENNY PAGLIA, ASSOCIATE, WALLMANS LAWYERS 

uestions like the one in the headline 

Qmight be thought to be absurdist and 

involve the abasement of reason. But 

analysis of them discloses an important 

feature of the professional relationship 

between legal adviser and client. 

Just such a question is raised as a side 

note to the primary issue in ASIC v Lewski; 

ASIC v Wooldridge [2018] HCA 63. 

The primary issue in that case was 

whether company directors had discharged 

their duties imposed upon by them under 

the Corporations Act. The duties were 

relevant to a purported amendment of the 

Constitution of a trustee company, the 

responsible entity of a managed investment 

scheme. The amendment would have had 

the effect of entitling the responsible entity 

(and in turn through other entities to L.) 

to substantial fees in the event of a stock 

market listing. The fees were substantial 

- amounting on the estimate of the High 

Court to be between one third to two 

thirds of the capital to be raised on the 

listing. 

The trial Judge held that the directors 

had breached their duties. 1 The Full Court 

differed. 2 The High Court re-instated the 

decision and orders of the trier of fact. 

The side note - and our question 

- arose from legal advice sought and 

obtained by L. from a solicitor prior to the 

Board meetings approving the amendment. 

The request for advice concerned whether 

the proposed amendment (providing 

for the fees) would require the approval 

by vote of the members. That focussed 

attention on a clause of the Constitution 

concerned with amendment which 

permitted the responsible entity to amend 

the powers, conditions or provisions of 

the Constitution without obtaining the 

members’ consent provided that such 

amendment: 


• shall not be in favour of or result in any 

benefit to the responsible entity; 

• any amendment of the Constitution 

must comply with the Corporations Act. 

The written legal advice (and it is 

important here to understand there were 

also preceding conversations between the 

solicitor and L. 3 ) identified two alternative 

constructions of the provision. Both 

were legal constructions. One would 

apparently require a vote of the members. 

The other would not. The one that would 

not was described by the Federal Court 

as “somewhat tortured” 4 and in our view 

was the one that is unsustainable. The 

choice between them did not depend 

on facts. The advice did not though 

express an opinion as to which was to be 

preferred. Instead the advice was prefaced 

with how the clause “could potentially 

be interpreted” in two competing ways. 

The advice confirmed that it was for the 

directors to decide which interpretation 

they preferred. 5 An instrument of 

amendment was enclosed with the advice 

on the basis that the directors determine 

that member approval is not required. 

That is a legal opinion notably did not 

contain an opinion on the ultimate issue. 

The legal opinion was described for 

these reasons, by the High Court, as 

“highly unusual” and “equivocal”. 6 

Without the benefit of access to the 

entirety of the client’s instructions and the 

advice provided (both written and verbal) 

it is not known whether the instructions 

did seek such a view. With this in mind, on 

one view of the questions asked they did – 

the primary issue was identified in the file 

note of a telephone conversation between 

the client and solicitor as to whether the 

Constitution could be changed without 

members’ approval. 7 A further file note 

records that an instrument of amendment 

was only sought if an amendment to 

the Constitution was permissible. 8 The 

amending instrument was drafted. On the 

other, the written advice that accompanied 

the instrument was prepared on the basis 

that a decision needed to be made, and if 

it were made, then the instrument drafted 

could be used. 9 That left open, at least by 

implication, that either of the alternative 

views was reasonably open, but without 

advice as to which was considered to be 

preferable. 10 

The legal opinion was considered by 

the directors prior to the meeting, and 

by implication they adopted a course 

supported by the construction that did not 

require a vote of the members. 

We do not seek to comment further 

on the specifics of the particular case. In 

particular, L. did not call the solicitor to 

give evidence. It is not known what the 

solicitor would have said. The facts simply 

place our question in a practical context. 

The rationale for any answer to our 

question must start with the instructions. 

While sound conventions inform the 

model or form of an opinion 11 , what 

an opinion must address is substantially 

influenced by the private client in the 

instructions. This follows from the 

contractual nature of the relationship. A 

private client is free, whatever the hazards 

of such an approach, not to obtain legal 

advice on the correct construction of the 

law. A client can identify, but not without 

qualification, what it is they seek advice 

about. 

The critical issue posed by our 

question is that having embarked on a 

request to identify the law, and faced 

with an alternative view, must the lawyer 

express a preferred view? 

For most practical purposes, this 

conundrum would not arise. Almost all

FEATURE 

instructions, expressly if not implicitly, 

seek such a preferred view, and the risks 

inherent in alternative approaches. The 

failure to address those topics would 

lead a client in almost all circumstances 

to identify that the opinion was 

incomplete. However, we consider that it 

is inherent in a request for an advice that 

bears on the fulfilment of directors’ duties 

that a view of the law is identified. 

From the perspective of the client, 

that is necessary for the fulfilment of their 

obligations. An opinion that does not state 

which of multiple legal views is preferred 

does not fulfil that purpose. Reliance from 

the directors’ point of view on advice that 

contains no view leaves them in a position 

where their reliance on an advice may not 

be effective as a step to discharge their 

obligations. That is so because either a key 

element is entirely missing or because it 

diminishes the weight that can be given to 

independent legal advice in assessing the 

reasonableness of their conduct. 

The same emerges considering 

the issue from the perspective of the 

practitioner. Absent a view on the ultimate 

issue, it leaves the practitioner aware of the 

purpose for which the advice will be used 

and its context (in discharging a director’s 

obligation), but aware they can have not 

permitted the client relying on their advice 

to have discharged it. Nor can they have 

satisfied any obligation to warn of the risks 

associated with the alternative views. At 

the very least they are risking a subsequent 

allegation - in the event of misadventure – 

by the client (or criticism by a court) that 

they have not fulfilled their obligation to 

provide comprehensive advice. In those 

circumstances, it would seem, it is not open 

to the client to ask for part of the whole. 

The adviser cannot be left in a position 

where fully aware of the possible use of 

the opinion, alternate views are required 

to be presented without an assessment of 

the preferred view. That position leaves 

them open to an allegation that they have 

not fulfilled their obligations. Nor can 

they be left in a position of preparing an 

instrument which effects the transaction on 

one of the alternative basis without stating 

a preference. Nor should a practitioner, 

we consider, place themselves in such a 

position. 

There is also a further element for 

the practitioner in dealing with a single 

director. The opinion may be provided to 

and relied upon not only by the director 

making the request, but to other directors 

on the Board. They will likely not have the 

same background as to the instructions or 

subsequent discussions. An advisor would 

risk the benefits provided by a final and 

comprehensive advice, if no ultimate view 

is expressly identified in it. 

We think that in almost all 

circumstances the position stated can be 

generalised and is not specific to a request 

relating to directors’ duties. In almost all 

cases of prospective legal advice which 

depend on a view of the law, the same 

general issues emerge. 

It may be that there is a higher 

principle that guides these conceptions. 

First, providing “advice” inherently 

involves the act of giving guidance, 

offering a recommendation or opinion as a 

guide to action or conduct. 

Second, lawyers, and the giving of legal 

advice in particular, form an important 

element of the system of justice. Most 

disputes are not the subject of a judicial 

decision. Lawyers in this real sense are 

providers of justice. Notwithstanding 

that a solicitor’s duty is to the client, in 

practical terms it is hard to avoid that such 

an opinion will be relied upon and used to 

address the respective rights of directors, 

an entity and its members - and govern 

dealings between them. That ought to 

occur on the basis of a preferred view of 

the law. B 

Endnotes 

1 Australian Securities and Investments Commission v 

Australian Property Custodian Holdings Ltd (Receivers 

and Managers appointed) (In liq) (Controllers appointed) 

[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342. 

2 Lewski v Australian Securities and Investments 

Commission [2016] FCAFC 96; (2016) 246 FCR 

200. 

3 The circumstances leading to the final advice 

are set out in Australian Securities and Investments 

Commission v Australian Property Custodian Holdings 

Ltd (Receivers and Managers appointed) (In liq) 

(Controllers appointed) [No 3] (2013) 31 ACLC 13- 

073; [2013] FCA 1342, [79]-[104]. 




[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342, 

[210]. 




[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342, 

[268]. 

6 Australian Securities & Investments Commission v 

Lewski [2018] HCA 63, [78]. 




[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342, 

[71]. 




[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342, 

[73]. 




[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342, 

[270]. 




[No 3] (2013) 31 ACLC 13-073; [2013] FCA 1342, 

[263]-[270]. 

11 For example, see DI Cassidy QC, Drafting Legal 

Opinions (NSW Bar Association, Bar Practice 

Course, 2011) 


CLIMATE CHANGE 

CLIMATE CHANGE: AN EXISTENTIAL 

THREAT TO CORPORATIONS 

PROF PAUL BABIE, UNIVERSITY OF ADELAIDE 

While it certainly fails to provide 

a credible roadmap for averting 

climate catastrophe, the Coalition 

government’s release of the Climate Solutions 

Package 1 might prompt us to ask: can we 

seriously continue to deceive ourselves 

into thinking that climate change presents 

no threat to our survival? The signs of 

impending disaster loom large. In 2016- 

17, ‘Australia [...] endured another intense 

summer, with more than 200 recordbreaking 

extreme weather events driven by 

climate change’; 2 climate change continues 

to exacerbate the Australian drought. 3 

Thinking about these facts might make you 

feel ill: 4 

The rest of the globe is faring no 

better: in the first two months of 2019 

‘[e]xtreme weather has grown more 

frequent. In November wildfires scorched 

California…[while] Chicago was colder 

than parts of Mars.’ 5 And in late 2018, 

the Intergovernmental Panel on Climate 

Change reminded the world that climate 

change is now very close to the point 

of no return, to causing catastrophic 

consequences from which we may never 

recover. Limiting global warming to 1.5°C 

above pre-industrial levels would avoid 

many of the catastrophic consequences. 6 

But is that even achievable? The graphs 

on the opposite page demonstrate visually 

what must be achieved, now, if we are to 

meet the 1.5°C target which will avoid 

climate catastrophe: 7 

The picture is bleak. David Wallace- 

Wells summarises the peril with a stark 

warning: climate change is already, right 

now, ‘…worse, much worse, than you 

think.’ 8 

Through our own actions, over a 

relatively short period of time, we have 

placed our very survival at risk. We have 

created our own existential threat. And it is 

true that when we consider the impending 

catastrophe, we tend to focus on the ways 

in which it will impact human life. This 

is perhaps natural: when presented with 

an existential threat, one tends to worry 

about what that might mean for oneself. 

Or, put another way, we tend to think 


of existential threats as being existential 

because they threaten human existence. But 

in the case of climate change, there may 

be another form of ‘existential’ threat, one 

largely overlooked, but just as real. It is 

hidden in plain sight. 

A largely overlooked op-ed piece 

written by NSW Supreme Court Justice 

François Kunc in the Australian Financial 

Review in 2018 offers the first glimpse. 

Introducing a special issue of the 

Australian Law Journal on climate change 

and law, 9 Justice Kunc wrote that ‘[a]t 

its worst, inadequately mitigated climate 

change could undo our social order and 

the rule of law itself.’ 10 Now I suspect 

that Justice Kunc meant no more than 

that the threat to the rule of law posed 

by climate change was just another way 

of forcing people, you and me, human 

beings, to think about what we are doing 

and perhaps to stop, or slow our climate 

change causing activities. But his claim, 

perhaps unwittingly, uncovers another 

sort of existential threat to another, nonhuman, 

person.


Students and supporters protest for climate change action in front of SA’s Parliament House 

Law, both common and civil, tends 

to recognise two types of person: 

the ‘natural’—you and me—and the 

fictional—those entities, created by law 

and treated as ‘legal’ persons. These legal 

persons are fictitious, of course, but 

persons nonetheless. Examples include 

the ‘Crown’, 11 the ‘environmental person’ 

(such as the Whanganui River in New 

Zealand 12 or the Ganges and Yamuna 

Rivers in India), 13 and perhaps someday 

‘artificial intelligence’. 14 But the bestknown 

legal person is, of course, the 

corporation. 15 And, by threatening the 

rule of law, climate change constitutes an 

existential threat to the corporation. Let 

me explain. 

What is the rule of law? While EP 

Thompson once described it as ‘an 

unqualified human good’, 16 others are 

not so sure. 17 The fact that we most often 

hear about it in the context of economic 

development ought to give us a clue as to 

what it means, for there are good reasons 

why western, neoliberal states push for 

its adoption in developing ones: it makes 

possible the expansion of the neoliberal 

agenda—never-ending growth in markets 

and profits. Seen this way, the rule of 

law makes possible the neoliberal project 

of ‘global economic integration’—the 

concentration of economic and political 

power. 18 And, far from being a fixed, 

determinate, objective norm, the ‘rule 

of law’ is free-floating, indeterminate, 

and subjective; a content-less vessel into 

which can be poured whatever content 

one wishes, for good or ill. 19 And western 

neoliberal values—markets, expansion, 

growth—frequently constitute the content 

poured into it for the developing world, 

so as to benefit neoliberal economic 

integration. 

Yet while it can mean many things to 

many people—largely depending on who 

is filling it with content—most can agree 

that the rule of law probably means, at 

least for some, a secure, stable system of 

law. 20 For the neoliberal west, what is a 

stable, secure, system of law? At the very 

least, it probably means two of those 

things that corporations care most about: 

their own existence—made possible 

through laws which allow for limited 

liability incorporation—and the rules that 

support that existence—especially the 

doctrinal liberal law categories of property, 

contract, tort, and criminal law. Without 

the rule of law, life becomes, in that phrase 

surely known by almost everyone, whether 

they have read Thomas Hobbes or not, 

nasty, brutish, and short. Hobbes describes 

life without the state, what he calls 

Leviathan, and we can call the rule of law: 

In such condition there is no place for 

industry, because the fruit thereof is 

uncertain, and consequently no culture 

of the earth, no navigation nor the use 

of commodities that may be imported 

by sea, no commodious building, no 

instruments of moving and removing 

such things as require much force, no 

knowledge of the face of the earth, 

no account of time, no arts, no letters, 

no society, and which is worst of all, 

continual fear and danger of violent 

death, and the life of man, solitary, 

poor, nasty, brutish, and short. 21 

In other words, without law making 

the corporation possible, making profit 

possible, undisturbed by others, and 

especially by limited liability when 

things go wrong, and a system of laws 

which support that existence, it will die. 

The corporation requires a system of 

laws establishing private property, so 

that it can get on with profit-making 

undisturbed by those who might want to 

take what the corporation thinks belongs 

to it (remember, Jeremy Bentham said: 

‘Property and law are born together, 

and die together. Before laws were made 

there was no property; take away laws, 

and property ceases’ 22 ). The corporation 

depends upon doctrinal categories of law 



to protect its property: tort, to prevent 

others causing injury to the business 

enterprise; contract, to sell what it 

produces to others (especially in those 

enticing new markets in developing 

nations being opened up by the imposition 

of the rule of law); criminal law, to punish 

those who might try to interfere with 

or harm the enterprise. Without all of 

this—the rule of law—the ‘life’ of the 

corporate person simply becomes one 

where whomever has the strength to fend 

off others, survives. Or, put another way, 

without the state, corporate life becomes 

solitary, poor, nasty, brutish, and short. 

Or, succinctly: without the rule of law, 

corporate life ends. 

Climate change, if it threatens the 

rule of law, as Justice Kunc suggests, 

constitutes an existential threat to the 

corporation. One might assume, then, 

that because they are ‘persons’ which 

contribute disproportionately to the 

causes of climate change, 23 corporations 

would care about restraining themselves 

now, before it is too late. A good 

assumption, but the evidence rebuts it. 

Corporations producing fossil fuels, for 

instance, in the face of rising demand, 

‘plan [...] multi-trillion-dollar investments 

to satisfy it.’ 24 The same is true in other 

enterprises: notwithstanding the ‘physical 

threats to many firms [,] [m]ost remain 

blind to the[m], often wilfully so.’ They 

should care, as the loss in value to major 

enterprises due to climate demonstrates. 25 

The Economist reported a climate change 

driven median decrease in enterprise value 

in excess of 3% in the oil and gas sector 

and utilities sector, as well as decreases in 

other sectors. 

This ought to serve as a wake-up call 

for the corporation, not simply to protect 

its bottom-line, but its very existence. If 

climate change threatens the rule of law, 

then it means everything the corporation 

thought was stable and secure—the law 

that allows its very existence, and the 

system of laws that support it (property, 

tort, contract, criminal law)—disappear, 

leaving it with…? Well, yes, leaving it with 

what? That’s the question the corporation 


ought to be asking itself. Just possibly, 

if this existential threat to corporations 

‘…lays bare the seriousness of global 

warming’s effects, the world may even 

get serious about tackling its causes.’ 26 We 

can only hope that the existential threat 

of climate change to a fictitious person 

might produce a beneficial outcome for 

real ones. B 

Endnotes 

1 Australian Government, Department of the 

Environment and Energy, Climate Solutions 

Package (25 February 2019) . 

2 Andrew Stock, Will Steffen, and Martin Rice, 

‘Angry Summer 2016/17: Climate Change Super- 

Charging Extreme Weather’, Climate Council (29 

March 2019) . 

3 Casey Quackenbush, ‘A Harbinger of Things 

to Come’: Farmers in Australia Struggle with 

its Hottest Drought Ever’, TIME (February 21, 

2019) . 

4 ‘2016/17 Angry Summer Infographic’, Climate 

Council . 

5 ‘The truth about big oil and climate change’, 

The Economist (February 9, 2019) . 

6 IPCC, Global Warming of 1.5°C – Summary for 

Policymakers (IPCC, 2018) . 

7 Ibid. 

8 David Wallace-Wells, Uninhabitable Earth 

(Penguin, 2019) 1. 

9 Special Issue: Climate Change and The Law 

(2018) 92(10) Australian Law Journal. 

10 François Kunc, ‘Climate change may pose threat 

to rule of law’, Australian Financial Review (11 

October 2018) . 

11 Ernst H Kantorowicz, The King’s Two Bodies: 

A Study in Medieval Political Theology (Princeton 

University Press, 1957); George Garnett, ‘The 

Origins of the Crown’ in John Hudson (ed), The 

History of English Law: Centenary Essays on ‘Pollock 

and Maitland’ (The British Academy and Oxford 

University Press, 1996) 171-214. 

12 Te Awa Tupua (Whanganui River Claims Settlement) 

Act 2017 (NZ). And see Abigail Hutchison, ‘The 

Whanganui River as a Legal Person’ (2014) 39 

Alternative Law Journal 179; Erin L. O’Donnell 

and Julia Talbot-Jones, ‘Creating legal rights for 

rivers: lessons from Australia, New Zealand, and 

India’ (2018) 23 Ecology and Society 7. 

13 Mohd Salim v State of Uttarakhand & others, 

WPPIL 126/2014 (High Court of Uttarakhand) 

2017 [19]; Lalit Miglani v State of Uttarakhand 

& others, WPPIL 140/2015 (High Court 

of Uttarakhand) 2017 64. And see Erin L 

O’Donnell, ‘At the Intersection of the Sacred 

and the Legal: Rights for Nature in Uttarakhand, 

India’ (2018) 30 Journal of Environmental Law 135. 

14 Caroline Cauffman, ‘Should robots be given 

legal personhood?’, Maastrict European Private 

Law Institute (March 11, 2019) . 

15 Frederick Pollock and Frederic W Maitland, The 

History of English Law before the Time of Edward 

I, Vol I (Cambridge University Press, 2 nd ed, 

1899) 486-526; Salomon v A Salomon & Co Ltd 

[1897] AC 22, 33 (Lord Halsbury); Bank of the 

United States v. Deveaux, 9 US 61 (1809); The Rt 

Hon Lord Cooke of Thorndon, KBE, Turning 

Points of the Common Law (Sweet & Maxwell, 

1997) 1-27. See also Joel Bakan, The Corporation: 

The Pathological Pursuit of Profit and Power (Free 

Press, 2004); Adam Winkler, We the Corporations: 

How American Businesses Won Their Civil Rights 

(Liverlight, 2018); Kent Greenfield, Corporations 

Are People Too (And They Should Act Like It) (Yale 

University Press, 2018). 

16 E P Thompson, Whigs and Hunters: The Origin of 

the Black Act (1975) 266. 

17 Morton J Horwitz, ‘The Rule of Law: An 

Unqualified Human Good?’ (1977) 86 Yale Law 

Journal 561; Daniel H Cole, ‘“An Unqualified 

Human Good”: E.P. Thompson and the Rule of 

Law’ (2001) 28 Journal of Law and Society 177. 

18 Kerry Rittich, ‘Who’s Afraid of the Critique of 

Adjudication?: Tracing the Discourse of Law in 

Development’ (2000) 22 Cardozo Law Review 929. 

19 Duncan Kennedy, ‘Toward a Critical 

Phenomenology of Judging’ in Allan C 

Hutchinson and Patrick Monahan (eds), The Rule 

of Law: Ideal or Ideology (1987) 141-67, 166-7. 

20 See John V Orth, ‘The Rule of Law’ (2016) 19 

Green Bag 2d 175. 

21 Thomas Hobbes, Leviathan (Penguin Classics, 

2017) XIII.9. 

22 Jeremy Bentham, ‘Principles of the Civil Code’ 

in The Works of Jeremy Bentham (1843), vol 1, pt I, 

ch VIII ‘Of Property’, 309a. 

23 ‘The truth about big oil and climate change’, 

above n 5. 

24 Ibid. And see also ‘ExxonMobil gambles 

on growth’, The Economist (February 9, 

2019) . 

25 ‘Climate change and the threat to companies’, 

The Economist (February 21, 2019) . 

26 Ibid.

FROM THE ATTORNEY-GENERAL 

AG update: New silk 

appointment procedure & 

changes to the Public Trustee 

VICKIE CHAPMAN MP, ATTORNEY-GENERAL OF SA 

Firstly, I would like to take this 

opportunity to congratulate Amy 

Nikolovski in her new position as President 

of the Law Society for 2019. I have already 

met with Amy on several occasions, and I 

look forward to continuing to do so. 

The first five months of 2019 has 

had lot in store in terms of legislative 

reform in the legal sector and I will keep 

you updated over the rest of the year 

on additional reforms that affect South 

Australian lawyers. 

The two major reforms I would like 

to mention in this month’s edition are 

the changes to how the Public Trustee is 

now handling Wills and Estates and the 

reinstatement of Queen’s Counsel. 

There has been a significant change 

that may impact Law Society members 

in terms of how the Public Trustee 

delivers services covering the making of 

Wills and Enduring Powers of Attorney. 

From July 1, the Public Trustee will only 

provide Will and Enduring Power of 

Attorney making services to those South 

Australians with a concession or who are 

subject to protection orders issued by the 

South Australian Civil and Administrative 

Tribunal or administration orders 

appointed by the courts. This will ensure 

the Office of the Public Trustee gets 

back to its core business. This approach 

recognises there are plenty of legally 

trained professionals in our State to do 

this work and we will be moving out of 

the way to give them that opportunity in 

the future. I thank the Law Society for its 

close collaboration with the Office of the 

Public Trustee and my office on coming 

up with a list of other service providers 

and referral options for people who do 

not hold a concession card or who are not 

subject to a SACAT protection order who 

seek to access these services after July 1. 

In a recent survey of Law Society 

members, 70% of you voted to reinstate 

the title of QC. This significant majority 

highlighted strong support for this change. 

Accordingly, in February the Government 

agreed to reinstate the title. The model 

which will be adopted simply seeks to 

provide South Australian lawyers with the 

option of adopting the title which they 

believe will provide them the greatest 

opportunities in the course of their 

practice. The process is a simple one and 

requires those who already have the title 

of SC, to make an application to me. 

Upon the application being made, the 

Governor-in-Council, on the advice of 

the Executive, will issue Letters Patent for 

the appointment and commission of the 

applicant as a QC in and for the State of 

South Australia. These appointments will 

be published in the Government Gazette. 

I am currently collating the applications 

received since this announcement earlier 

this year, of which there are many. 

It’s important to note that any 

existing or future SCs who do not wish 

to nominate for appointment as QCs will 

continue to be known as SCs and will be 

entitled to use the post-nominal “SC” 

and that the order of precedence for SCs 

appointed as QCs will continue to be 

determined in accordance with the date 

and terms of his or her appointment as an 

SC. It’s expected that 95% of SCs in SA 

will convert to the title of QC over the 

coming months. 

I look forward to keeping you all 

updated on things happening in my area as 

Attorney-General in the coming months, 

and as always, my door is always open 

for suggestions and submissions the Law 

Society might have in legal policy in the 

future. B 

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Avoiding conflict of interest when 

encountering former family law clients 

JANE MILLER, PARTNER, TINDALL GASK BENTLEY AND MARWA SHABBAR, LAWYER, WEBSTERS LAWYERS 

In a jurisdiction that deals with the 

breakdown of familial relationships, conflict 

is a term synonymous with the practice 

of family law. But as family lawyers, what 

constitutes a conflict of interest, and what 

are our duties when divided loyalties arise 

between former and current clients? 

GROUNDS & RATIONALE FOR INJUNCTING 

A PRACTITIONER FROM ACTING 

As practitioners we are familiar with 

the obligations of Rules 10, 11 and 12 of 

the Australian Solicitors’ Conduct Rules. 

Rule 8.03 of the Family Law Rules 

2004 adds, “[a] lawyer acting for a party in a 

case must not act in the case for any other party 

who has a conflicting interest”. 

The rationale for restraining a 

practitioner from acting is said to arise 

from: 

• the Court’s implied power to control 

the conduct of its practitioners as 

officers of the court; 

• a fiduciary duty not to act against a 

client or former client in a closely 

related matter; and 

• the danger of misuse of confidential 

information 1 . 

This paper draws upon the second 

and third rationales, namely the test for 

injunctive relief when a practitioner 

or firm is alleged to hold confidential 

information from a former client that is 

relevant to the proceedings in question. 

The Federal Circuit Court noted in 

Edgley (2013) that its authority to restrain 

a practitioner from acting for a client, “… 

may arguably be found in section 114(3) of the 

Family Law Act, or in the power of the court to 

control its own procedure, or in the court’s accrued 

jurisdiction” 2 . 

A decision to restrain a practitioner 

from acting must not be made lightly. 

In Golias & Nasso (2015) the Court 

emphasised there is “…a fine balance of 

considerations between the right of a party to 

choose a legal representative of their choice as 

against maintaining the integrity of the legal 

system”. 3 


A view ensued for many decades that the 

threshold for restraining a practitioner in family 

law matters was lower than in other jurisdictions 

because of particular sensitivities. 4 

However, in Osferatu (2015) 5 the Full 

Court of the Family Court corrected the 

perception that a more lenient approach is 

to be adopted in family law proceedings. 

THE POSITION PRE OSFERATU (2015) 

In the 1986 decision of Thevenaz, 

the Family Court restrained the wife’s 

lawyer from acting as his former partner 

had previously acted for the parties in 

conveyancing transactions. The Court 

found “[i]t is of the utmost importance that 

justice should not only be done but should appear 

to be done…”, even if the risk is merely 

theoretical. 6 

This “mere theoretical risk” approach 

was endorsed by the Full Court in 

McMillan (2000), 7 in which a law clerk from 

the husband’s firm changed employment 

to the wife’s firm. The husband asserted 

that he had provided confidential 

information directly to the law clerk, and 

that this could be used to his detriment. 

The Court applied the two part test 

addressing the confidential information 

and the theoretical risk of prejudice, and 

restrained the wife’s lawyer from acting. 

The Court was not satisfied that the 

low threshold of the McMillan test was 

met in House & Altimas (2012), 8 in which 

the wife’s family lawyer had been jointly 

retained by the parties 14 years prior 

for personal injury claims. The Court 

concluded that justice did not require the 

lawyer to be restrained as the privilege 

of confidential information from the 

previous matter had been waived by the 

joint retainer. 9 

The Court has also been called to 

consider conflict of interest when a 

former client is related to a party to the 

proceedings. In Golias & Nasso (2015), 10 

the Court restrained the wife’s firm from 

acting because it had previously acted for 

the husband’s father. It was found that the 

wife’s firm had confidential information 

as to the father’s financial dealings with 

the couple, and that a reasonable observer 

would conclude that information could be 

used to the husband’s disadvantage. 

THE APPROACH OF THE FULL COURT OF 

THE FAMILY COURT IN OSFERATU (2015) 

When the long held theoretical risk 

test was revisited in Osferatu, the Court 

added to the burden of evidence a 

third consideration, thereby raising the 

threshold in family law matters. 

In Osferatu the husband retained a 

lawyer who was previously a partner at the 

firm representing the wife. The husband’s 

lawyer was retained after he had left the 

wife’s firm. The lawyer did not have any 

dealings with the wife or her matter other 

than from a managerial or occasional 

supervisory role. The lawyer provided an 

undertaking to establish an information 

barrier. The wife sought to restrain the 

lawyer from acting for the husband, which 

was successful in the first instance but was 

later overturned on appeal. 

In reaching its decision the Full Court 

established a “new” test consisting of 

three elements: 

1. Whether the allegedly conflicted firm 

or practitioner is in possession of 

confidential material pertaining to the 

former client. 

2. Whether the confidential material is 

relevant to the new client’s matter and 

could have an adverse effect on the 

interests of the former client. 

3. Whether there is a real risk of misuse of 

the confidential information. Here the 

court will consider the establishment 

and effectiveness of information 

barriers where applicable. 

The burden of proof in relation to the 

first and second element of the test lies 

with the party seeking the injunction. 

However, the burden of proof for 

the third element lies with the practitioner 

or firm seeking to continue acting. To 

discharge this burden the practitioner


must be able to provide evidence of the 

mechanisms they established to ensure 

that there would be no risk of misuse 

of information. The Full Court was not 

satisfied with the information barrier 

established in the decision of Wilmer & 

Golding (2017) 11 , where on appeal the Court 

restrained the practitioner from acting. 

Developing effective information 

barriers may prove to be challenging, 

especially in smaller firms where they are 

harder to implement. 

The Osferatu test was also applied in 

Rollinson & Chase (2017) 12 . In January 2017 

the husband in that case attended a firm 

for a free first interview and purportedly 

provided instructions and confidential 

information about his separation from the 

wife. The firm prepared a file note, but did 

not send a retainer agreement. 

In March 2017 another lawyer from the 

firm wrote to the husband advising that 

the firm was now acting for the wife. The 

husband unsuccessfully sought to restrain 

the firm from continuing. Evidence was 

given about the implementation of an 

effective information barrier, and the Court 

found that the file note contained only 

basic information from the husband. When 

applying the third element of the Osferatu 

test, the Court found that the risk of the 

misuse of that information is “merely fanciful 

or theoretical” 13 . 

DELAY IN SEEKING INJUNCTION 

In the 2017 decision of Dalton 14 the 

Full Court considered the impact of delay 

in bringing an application to restrain a 

lawyer from acting. The husband was 

aware that the wife’s lawyers were likely to 

be in possession of relevant confidential 

material, but delayed seeking injunctive 

relief by approximately seven months. 

Upheld on appeal, the trial Judge 

dismissed the application as the delay was 

a waiver of the husband’s right to seek an 

injunction. The Court considered the legal 

fees incurred by the wife during that delay 

and the disadvantage to her if she had to 

change representation. 

CONCLUSION 

It is critical that practitioners identify 

without delay if there is a real risk for 

confidential information to be misused in 

a matter. 

If the opposing lawyer is conflicted 

using the Osferatu test, then notice by 

correspondence must be provided to 

the other side as soon as possible, and if 

necessary injunctive relief pursued, or risk 

that right as being waived. 

Conversely, if a practitioner identifies 

that they themselves are conflicted, then 

they must consider whether the conflict 

of interest can be satisfactorily managed 

within their professional boundaries, such 

as receiving the former client’s informed 

consent to act, or by implementing an 

effective information barrier. 

However, if satisfactory management 

of the potential conflict is not possible 

then the lawyer’s professional duties 

compel them to cease acting or otherwise 

risk the perils of facing an application for 

injunctive relief in the Family Court. B 

Jane Miller will be practising from Elizabeth 

Evatt Chambers from June 2019 

Endnotes 

1 See Spincode Pty Ltd V Look Software Pty [2001] 

VSCA 248 as applied in Karapataki & Karapavtaki 

[2011] FMCAfam6 at [28]. 

2 Edgley [2013] FCCA 2024 at [80]. 

3 Golias & Nasso [2015] FCCA 1069 at [14]. 

4 In Nettle & Nettle [2011] FMCAfam 414 at [15], 

the Court said, “There are particular sensitivities that 

exist in Family Law litigation and the integrity of the 

justice system, where lawyers as officers of the Court play 

an important and significant role, benefits from litigants 

who become adversaries starting from an equal position”. 

5 Osferatu & Osferatu [2015] FamCAFC 177. 

6 Thevenaz and Thevenaz (1986) FLC 91-748. 

7 McMillan & McMillan [2000] FLC 93-048. 

8 House & Altimas [2012] FamCA 625. 

9 Thevenaz (1986) also contained an argument as to 

a waiver on account of a joint retainer but was 

distinguished from the circumstances in House & 

Altimas (2012) 

10 Golias & Nasso [2015] FCCA 1069. 

11 Wilmer & Golding (No 2) (2017) FLC 93-813. 

12 Rollinson & Chase [2017]FCCA 3119. 

13 Ibid at [36]. 

14 Dalton & Dalton [2017] FamCAFC 78 

MEMBERS ON THE MOVE 

Andersons Solicitors has acquired 

Rossi Legal following the appointment 

of Tony Rossi, principal of Rossi Legal, as a 

Judge of the SA Employment Tribunal. 

Judge Rossi said he was in discussions 

Garry Palasis (left) and Tony Rossi 

with several firms but ultimately decided 

that Andersons was the best fit due to the 

likeminded philosophies shared by both 

firms. 

“Both Andersons Solicitors and Rossi 

Legal prioritise individualised service,” Judge 

Rossi said. “Staff are expected to have 

an intimate knowledge of all aspects of a 

particular area of law.” 

Judge Rossi said that he prided himself 

on the one-to-one service that his firm 

provided, where a client could rely on 

and build a relationship with an individual 

practitioner who could attend to all of the 

client’s needs. 

Andersons Managing Partner Garry 

Palasis, who has had a long-standing 

relationship with Judge Rossi, said: “Our 

firms have very similar philosophies, and I 

feel that culturally we are a good fit for Tony’s 

firm. His people and our people are very 

similar, we cover the same work areas and we 

have similar values.” 

Almost all of Rossi Legal’s staff will 

remain in their roles, taking the total number 

of staff at Andersons Solicitors to 70. 

The merger will take effect from 13 May. 

Precision Legal has moved premises 

and now operates from Level 2, 124 South 

Terrace, Adelaide. All other contact details 

have remained the same.’ 

May 2019 THE BULLETIN 

33

RISK WATCH 

Conflicts of Interest in 

Wills & Estate Matters 

GRANT FEARY, DEPUTY DIRECTOR, LAW CLAIMS 

The risk of conflict of 

interest is pervasive in 

wills & estates matters 

but will sometimes not 

be obvious. Practitioners 

should always give 

sufficient consideration to 

the possibility of conflicts 

arising, even in apparently 

simple situations such as 

“mirror” wills for couples. 

Wills and estates can be fraught with 

conflicts and potential conflicts. 

Practitioners are frequently instructed 

to prepare wills for husbands and wives 

(whether those couples are married or in de 

facto relationships). Often the instructions 

will be for simple “mirror” wills that 

typically leave one partner’s assets of the 

other (surviving) party and then to the 

couple’s children. If the position really is 

as simple as genuine “mirror” wills then 

conflicts might seldom arise. That this 

is the case seems to be recognised in the 

Commentary to the Australian Solicitors’ 

Conduct Rules (ASCR) which provide, in 

part, as follows: 

“non-contentious matters 

A solicitor or law practice can generally act for 

two or more parties in a non-contentious matter 

where those parties have identical interests. Solicitors 

must, however, be alert to those interests diverging. 

In appropriate circumstances, it may be possible 

for the clients themselves to resolve any difference. 

In other circumstances, independent advice may be 

necessary. However, if the interests truly diverge, 

the solicitor cannot continue to act for both parties.” 

(ASCR Commentary to Rule 11) 

Despite this, however, each spouse 

is a separate client and it doesn’t take 

very much deviation from the standard 

“mirror” will situation for potential 

risks of conflicts to arise. Even in the 

simplest situation, it can be difficult 

to ascertain whether the parties have 

considered all their options or whether 

one is acting under the influence of the 

other, without speaking to each client 

individually. If the practitioner does see 

the clients individually, the practitioner 

might be asked to act adversely to the 

interests of the other. This is a clear red 

flag to the ability to continue to act for 

one client, and possibly, depending on the 

circumstances, both. 

Further, either or both members of 

the couple might have been married before 

and either or both might have children 

from previous relationships. Unless there 

is complete equality in the way assets 

are treated and the way the children are 

treated, conflicts are possible. 

The efficacy of a “mirror will” will 

be dependent on one party or the other 

not changing or revoking their side of the 

“mirror”. If it is a matter of trust in an 

ongoing relationship then there may be 

no problem. What happens though if the 

instructions are to seek to make the wills 

irrevocable or otherwise mutually binding? 

The parties will need to consider their 

positions individually. What if, as will most 

certainly be the case, the circumstances 

of the surviving party change, for 

example, entering into a new relationship 

or requiring the liquidation of assets 

to fund a place in an aged care facility? 

What happens with assets acquired by the 

surviving spouse after the death of the 

first spouse? These sorts of complications 

make it necessary for the clients to be 

independently advised. 

There are other possible areas of 

conflict of interest for practitioners in 

wills and estates, being conflicts between 

the client’s interests and the solicitor’s own 

interests, such as, for example, where the 

solicitor acts as executor. This is dealt with 

by Rule 12 of the ASCR. 

The commentary of the ASCR in this 

regard provides the following important 

guidance: 

“Solicitor acting as executor 

Solicitors who prepare wills must not put 

themselves in a position of conflict between 

their fiduciary duty to the testator and their 

personal interest. Inclusion of a provision 

in a will appointing a solicitor as an 

executor and entitling the solicitor 

to an executors’ commission is an 

example of such a potential conflict. 

In these circumstances there is an obligation on 

the solicitor-executor to demonstrate the testator’s 

fully informed consent to the entitlement to an 

executors’ commission (Szmulewicz v Recht 

[2011] VSC 368 at [9] and [44] in relation 

to a financial benefit that would be obtained 

by a solicitor-executor under a clause in a will 

concerning executors commission, where the 

amount was significantly over and above what may 

be appropriate for a lay executor, or what the court 

would award). 

A solicitor who has been appointed 

under a will as both an executor and 

as solicitor to the estate (for which 

the solicitor is entitled to charge 

professional fees) must avoid conflicts 

between the role as an executor and 

the solicitor’s personal interests arising 

from the role as solicitor for the estate. 

The solicitor must carefully and transparently 

delineate between professional work undertaken 

as a solicitor for the estate and work undertaken 

in the role of executor. The fact that a solicitorexecutor 

is entitled under a will to charge for 

professional work as a solicitor does not justify a 

claim against the estate for discharging executorial 

functions calculated by reference to professional costs 

as if those executorial functions were legal services 

34 


RISK WATCH 

(Re Will of Shannon [1977] 1 NSWLR 201 

at [217]). A claim for executors’ commission must 

relate to compensation for ‘pains and troubles’ as 

executor over and above what is compensated for by 

professional fees, to avoid the possibility of “double 

dipping” (Re Will and Estate of Foster (dec’d) 

[2012] VSC 315 at [29]). 

When a will provides for the 

appointment of an executor also as a 

trustee, a fiduciary relationship exists 

between that executor-trustee and the 

beneficiaries. Fully informed consent of the 

beneficiaries is required to be given to payment of 

a negotiated amount of executors’ commission. In 

the case of a solicitor who is an executor-trustee 

this must include full disclosure of any legal fees 

and disbursements charged, the basis for those fees 

and disbursements, disclosure that the beneficiaries 

are entitled to have the court assess the executors’ 

commission and, preferably, that the beneficiaries 

are advised to seek independent legal advice (Walker 

v D’Alessandro [2010] VSC 15, at [30]).” 

(Emphasis added) 

Issues concerning conflict of interest 

are never easy and should never be glossed 

over. 

RISK MANAGEMENT AND ECMS PROBATE APPLICATIONS 

Since late November last year correct. This is good practice and 

applications for the issue of a it is recommended that this occur 

Grant of Probate or Letters of for all ECMS applications so that 

Administration in SA must exclusively the certification provided by the 

be made through the ECMS 

lodging solicitor is based on solid 

(Electronic Court Management foundations. 

System) on the CourtSA website. 

Another potential issue arising 

This system provides for the from the electronic probate system 

solicitor lodging the application relates to caveats. If an application for 

(electronically) to, in effect, certify probate is submitted (electronically) 

that the information in the application and the grant is issued quickly there 

(e.g. as to the will and the assets is less time for practitioners who 

disclosed) is true and correct. This hold instructions to challenge the will 

certification replaces the Executor’s propounded in the application to issue 

Oath (sworn by the executor/client) a caveat. When the system first started 

previously used under the old system. the time taken to issue the probate was 

Many practitioners even under the a matter of days. Since then, however, 

new system are having the executor/ that time has increased significantly 

client execute a statutory declaration or and can now be many weeks. This 

provide a document equivalent to the may reduce the issue of time pressure 

Executor’s Oath to the effect that the in relation to the issue of caveats, 

information provided to the solicitor however it is still a matter that should 

as set out in the application is true and be borne in mind. 

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LEGISLATIVE REVIEW 

Youth Treatment Orders Bill highlights ad 

hoc approach to rights-scrutiny of bills 

DR SARAH MOULDS, LECTURER IN LAW, UNIVERSITY OF SA, & DR LAURA GRENFELL, 

ASSOCIATE PROFESSOR IN LAW, UNIVERSITY OF ADELAIDE 

South Australia’s Parliament has no 

formalised parliamentary system of 

rights scrutiny for bills. Instead, it relies 

on a network of subject-specific Standing, 

Select, Sessional and Joint Committees, 

and draws upon an ad hoc system of 

external rights scrutiny, often under taken 

by bodies like the Law Society. While these 

bodies can produce thoughtful, persuasive 

submissions, the impact of such extraparliamentary 

scrutiny can be limited by 

political factors, and particularly by timing. 

This means that the community more 

broadly is often shut out of the law-making 

process or left wondering how best to draw 

Parliament’s attention to a problematic law. 

This ad hoc approach has certain 

practical implications which are illustrated 

by the Controlled Substances (Youth 

Treatment Orders) Amendment Bill 2018, 

introduced in June 2018. This Bill seeks 

to amend the Controlled Substances Act 

1984 (SA) to permit the Youth Court to 

make orders, based on a single opinion, 

compelling a child or young person with 

a drug dependency (“habitually using one 

or more controlled drugs”), who may be a 

danger to themselves or others, to attend 

assessment (assessment order), and then to 

attend treatment (treatment order). 1 Where 

a child or young person fails to comply 

with an assessment or treatment order, 

the Court can make a “detention order”, 

authorising the mandatory detention of 

the child or young person for up to 12 

months for the purpose of compliance 

with the relevant order. 2 In this it imposes 

a criminal sanction for the violation of a 

civil order and thus encroaches on one of 

the most fundamental of our common 

law rights, the right of personal liberty. It 

deprives a child or young person of their 

liberty without any criminal conviction. It 

also impacts on due process rights as the 

child or young person has no right to be 

notified of proceedings or right to make 

submissions. The Bill is silent on whether 

the Youth Court will conduct periodic 

reviews of the ordered detention. 


The policy objective underpinning 

the Youth Treatment Orders Bill is to 

allow parents or guardians who have been 

unable to engage their child in voluntary 

assessment or treatment, to obtain a 

court order to force that assessment 

or treatment to take place. 3 While this 

objective may have a legitimate basis 

in community concern for the welfare 

of children and families experiencing 

substance abuse or drug dependency, the 

measures proposed in the Bill arguably 

fail to take into account the child’s “best 

interests” by imposing treatment (and 

detention) in the absence of, or contra 

to, their consent. The measures thus may 

infringe Australia’s international human 

rights obligations such as those in the 

Convention of the Rights of the Child (CRC) 

which also emphasise that detention 

must be “a last resort” and limited to a 

minimum, necessary period. 4 

All of these features of the Bill - and a 

number of other serious concerns - have 

been outlined by experts and community 

organisations with direct experience 

supporting families and children in these 

circumstances. The extra-parliamentary 

scrutiny has been detailed, robust and 

heartfelt. Some of this extra-parliamentary 

scrutiny has been legal and technical 

while much has been focussed on 

how the parliament could take a more 

proportionate and less rights-infringing 

approach to this important policy 

objective. 

Hansard indicates that the Marshall 

government is reluctant for the Bill to 

be referred to a parliamentary inquiry 

despite a call from the AMA. During a 

failed Greens attempt to refer the Bill, 5 

Minister Wade argued that such a referral 

would lead to the Bill being “sabotaged”. 6 

The government has been sketchy on the 

Bill’s practical details. It has been unable 

to inform the public (or parliament) as 

to how many children are likely to be 

detained and, moreover, where those 

mandatorily treated and detained are 

likely to be held. 7 The government has 

offered no explanation of, or justification 

for the 12-month maximum period, the 

length of which places it out of alignment 

with other Australian jurisdictions. 8 The 

government has not indicated whether it 

will introduce a similar scheme applying to 

adults, which is the case for comparative 

schemes in other Australian jurisdictions, 

none of which apply to youth. Hansard 

indicates that the government has 

proposed some amendments to the effect 

that “the best interests of the child is 

made the paramount consideration”. 9 

Of present concern is that the intraparliamentary 

scrutiny to assist and inform 

parliamentary debate has been completely 

absent. No parliamentary scrutiny report 

offering an independent legal analysis 

of the rights-impact of the Bill has been 

prepared; equally there is no requirement 

that when members introduce a bill it is 

accompanied by a statement assessing 

the Bill’s compatibility with common law 

protections or Australia’s human rights 

obligations (“statement of compatibility”). 

This is a starkly different outcome 

to what would occur to a bill of this 

nature at the federal level, or in other 

states and territories with scrutiny of 

Bills Committee (namely, Victoria, NSW, 

Queensland and the ACT). 10 In other 

Australian jurisdictions, the Bill would have 

been subject to scrutiny by a committee 

looking for: 

• whether the Bill unduly trespasses on 

personal rights and liberties; 

• whether the Bill makes rights, liberties 

or obligations unduly dependent on 

insufficiently defined administrative 

powers; 

• whether the Bill makes rights, liberties 

or obligations unduly dependent upon 

non-reviewable decisions; 

• whether any delegation of legislative 

powers is inappropriate; or 

• whether the exercise of legislative 

power is subject to sufficient 

parliamentary scrutiny. 11

LEGISLATIVE REVIEW 

Against each of these criteria, the 

Youth Treatment Orders Bill raises clear 

concerns in regard to its vagueness, its 

lack of proportionality and its inadequate 

safeguards. In addition, where a 

parliament has a system of statements of 

compatibility, some scrutiny committees 

(in federal parliament and Victorian and 

ACT parliaments) also have a mandate 

to check compliance with Australia’s 

human rights obligations. This is the type 

of information that should have been 

available to all parliamentarians shortly 

after the Youth Treatment Orders Bill was 

introduced, to inform their vote as well 

as their consideration of whether further 

inquiry is needed. Many parliamentarians 

struggle to understand how the CRC’s 

principle of ‘the best interests of the 

child’ should be understood and applied 

and hence the principle is wielded by 

both supporters and critics of mandatory 

detention for drug dependent youth. An 

in-depth analysis of how the Bill impacts 

on rights should be available to the public 

and to expert community organisations 

seeking to draw attention to concerns 

with the Bill and to offer alternative 

policy suggestions. Unfortunately, this 

information is not easily available in South 

Australia. There is no Scrutiny of Bills 

Committee or Human Rights Committee 

to undertake this task of offering a 

technical legal analysis of each bill and its 

rights-impact. 

At a more holistic level, the quality of 

technical scrutiny and policy scrutiny that 

a bill like the Youth Treatment Orders 

Bill receives is entirely dependent on the 

political process. It also depends on the 

ongoing commitment of community 

organisations - some of which may have 

much to lose by raising concerns about a 

bill. The Health Minister has flagged that 

government departments are currently 

preparing a model of care consultation 

paper due to be released at the end of 

2019, after which there will be broad 

consultation with families, children and 

young people and stakeholders. The 

Minister has also indicated that the Bill’s 

implementation would need more than 

two years. 

So far, consultation on the actual Bill 

has been very limited. In early 2018 SA 

Health offered a five-week consultation 

period on the proposed trial of mandatory 

drug treatment and received more than 

30 submissions. 12 Although the Liberal 

party introduced the same bill in 2016 

(as a private member's bill), 13 SA Health’s 

2018 consultation process was based on 

the Victorian legislation and there was 

no mention of the government’s draft 

bill. SA Health’s consultation report did 

not refer to the government’s bill, it did 

not single out for discussion children and 

young people, and the maximum duration 

of the proposed mandatory treatment 

and detention was two weeks, not 12 

months. 14 Roughly half of the submissions 

to SA Health’s consultation articulated 

human rights concerns (for example the 

submission of the Law Society) but these 

concerns were not reflected in the Bill 

introduced into parliament in mid-2018. 

The government argues it has a mandate 

for the Bill because its private members 

bill was introduced before the election. 

In regard to the Bill, the Health Minister 

has said “we want to do this properly” 

but it is unclear why SA Health did not 

include or refer to the 2016 bill in its 2018 

consultation or why the Health Minister 

did not release the Bill as an exposure 

draft so as to allow for proper consultation 

before introducing it into parliament. 

Following the Youth Treatment 

Orders Bill’s introduction, at least a dozen 

organisations like the Law Society made 

detailed submissions focussing on the bill 

provisions but there was no parliamentary 

forum for this engagement and no 

parliamentary report to sum them up. In 

the absence of an intra-parliamentary focal 

point, this extra-parliamentary scrutiny 

of the Bill was scattered to various 

government ministers or communicated 

via media releases. This means that 

this scrutiny information is not easily 

accessible either to all our lawmakers or 

to the broader community. 15 Furthermore, 

while the quality of these submissions is 

generally strong, they do not systematically 

flag provisions which unduly trespass on 

common law rights and liberties and they 

do not offer an in-depth analysis of what 

is meant by the principle of “best interests 

of the child”. 

In order to strengthen our law-making 

process, careful scrutiny of legislative 

provisions needs to take place. It’s not too 

late for the Youth Treatment Orders Bill 

to receive careful parliamentary scrutiny. 

At the time of writing it has not yet been 

introduced in the House of Assembly, and 

so may yet see a successful referral to an 

existing Standing Committee for inquiry 

and report. But when it comes to rightsscrutiny 

of bills, it is time for this State 

to stop flying by the seat of its pants. It’s 

time to get serious about systematic rights 

scrutiny of bills in Parliament. B 


EVENTS 

Endnotes 

1 Controlled Substances (Youth Treatment 

Orders) Amendment Bill 2018 (SA) Clause 7, 

proposed new Part 7A of the Controlled Substances 

Act 1984 (SA) s54A (1) (a) and (b), see also 54B 

and 54C. 

2 Controlled Substances (Youth Treatment 

Orders) Amendment Bill 2018 (SA) Clause 7, 

proposed new Part 7A of the Controlled Substances 

Act 1984 (SA) s54A (1)(c) see also 54B and 54C. 

3 Stephanie Richards, ‘Mandatory drug treatment 

“punitive”: Children’s Commissioner’ InDaily, 

10 July 2018, (online) . 

4 Convention on the Rights of the Child, opened for 

signature 20 November 1989, [1991] ATS 4, 

Article 37(b). 

5 6 December 2018 by Greens MLC Hon Tammy 

Franks. 

6 South Australia, Parliamentary Debates, Legislative 

Council, 6 December 2018, 2466 (Stephen 

Wade). 

7 When introducing the 2016 Bill, the then shadow 

Attorney General Vicki Chapman indicated 

that they would be detained in a youth training 

centre. See South Australia, Parliamentary Debates, 

House of Assembly, 22 September 2016, 6915 

(Vickie Chapman) ‘We certainly do not want to 

hold … children in a training centre any longer 

than we have to to ensure they are treated’. 

Recently, Minister Wade explained this was not 

the case, flagging ‘another facility’ and arguing 

that the bill is designed to be ‘therapeutic’ rather 

than ‘punitive’. Stephanie Richards, ‘Questions 

remain over controversial SA Youth Drug Bill’ 

InDaily,11 April 2019 (online)< https://indaily. 

com.au/news/2019/04/11/questions-remainover-controversial-sa-youth-drug-bill/> 

8 The Minister has stated that most orders 

would be ‘much shorter’ than 12 months: 

Stephanie Richards, ‘Questions remain over 

controversial SA Youth Drug Bill’ InDaily,11 

April 2019 (online)< https://indaily.com.au/ 

news/2019/04/11/questions-remain-overcontroversial-sa-youth-drug-bill/> 

9 South Australia, Parliamentary Debates, Legislative 

Council, 6 December 2018, 2469 (Stephen 

Wade) ; Stephanie Richards, ‘SA Drug Bill Risks 

Another Stolen Generation’ InDaily, 21 March 

2019 (online) 

10 For example, see the detailed scrutiny of the 

Severe Substances Dependence Treatment Bill 

2009 (Vic) performed by Victoria’s Scrutiny of 

Acts and Regulations Committee (SARC): SARC, 

Report No 1 of 2010 (2 February 2010) 20-32. 

This Act was used as the basis of SA Health’s 

2018 consultation which preceded the Youth 

Treatment Orders Bill. 

11 These are the terms of the Senate Standing 

Committee for the Scrutiny of Bills, Standing 

Orders 24, https://www.aph.gov.au/ 

Parliamentary_Business/Chamber_documents/ 

Senate_chamber_documents/standingorders/ 

b00/b05#standing-order_c05-024 These terms 

are similar to those used by the NSW Legislation 

Review Committee and one part of the scrutiny 

mandate of the ACT Justice and Community 

Safety Committee and Victoria’s Scrutiny 

of Acts and Regulations Committee. For a 

summary of the spectrum of rights scrutiny 

committees in Australia, see Grenfell, ‘An 

Australian spectrum of political rights scrutiny: 

‘Continuing to lead by example’? (2015) 26 Public 

Law Review 19. 

12 https://www.sahealth.sa.gov.au/wps/wcm/ 

connect/Public+Content/SA+Health+Internet/ 

About+us/Reviews+and+consultation/ 

SA+Health+Consultation+on+Mandatory 

+Drug+Assessment+and+Treatment/ 

13 Controlled Substances (Youth Treatment Orders) 

Amendment, Bill Number 153, introduced in the 

House of Assembly on 22 September 2016. 

14 SA Health, Consultation Paper – Considering a Model 

for Mandatory Assessment and/or Treatment for Those 

at Extreme and Immediate Risk based on the Victorian 

Severe Substance Dependency Treatment Act 

2010 (January 2018) 4-5. 

15 This problem of a lack of transparency in 

public consultation has been partly addressed 

in Tasmania by the government’s ‘Public 

Submissions Policy’ (dated January 2018). The 

policy requires all government departments 

to routinely publish on websites, within a 

‘reasonable timeframe’, all written submissions 

made in response to broad public consultation 

on major policy matters. 

Pounding the pavement for justice 

On 21 May the South Australian legal 

community will hit the streets once 

again to Walk for Justice – JusticeNet SA’s 

signature fundraising event. 

Now in its 11th year, the Walk for 

Justice raises funds for JusticeNet, so that 

it can continue to help low-income and 

disadvantaged South Australians who 

cannot get assistance elsewhere. 

As well as being an important 

fundraiser, the Walk is also a fun 

celebration of the legal profession’s 

enormous contribution to JusticeNet’s pro 

bono “safety net”. JusticeNet continues 

the proud pro bono tradition of South 

Australia’s legal profession - approximately 

10% of South Australian practitioners 


participate in JusticeNet’s legal services 

every year. 

The Walk for Justice is now a fixture 

on his Excellency the Honourable Hieu 

Van Le AC, the Governor of South 

Australia, will join this year’s Walk for 

Justice and South Australian food legend 

Simon Bryant will be on hand to create a 

free breakfast for walkers. 

Register or make a donation at: 

www.walkforjustice.com.au. 

This year JusticeNet hopes that the 

Walk for Justice will raise $75,000, which 

will help JusticeNet continue to provide 

legal services to those who need it most, 

including disadvantaged South Australians 

facing poverty, risk of homelessness, 

disability and other disadvantage, 

individuals forced to represent themselves 

in court and asylum seekers. Read more 

about the positive impact of JusticeNet’s 

work at: http://www.justicenet.org.au/ 

our-impact. 

The Walk for Justice commences 

at 7.30am on Tuesday 21 May at the 

University of Adelaide Law School plaza 

(North Tce). Walkers will enjoy a 5km 

route through the Botanic Gardens, along 

the River Torrens and culminating with a 

breakfast at the Published Arthouse. 

JusticeNet gratefully acknowledges the 

support of its sponsors, the Law Society 

of SA and College of Law. B

WELLBEING & SUPPORT 

Breakthrough depression research finds 

personality types and food matter 

CAROLINE ZIELINSKI 

New research has found that having a 

particular personality type can make 

you more at risk of developing depression 

– and if you’re a woman, what you eat is 

also a big contributor. 

In a series of studies released in 

February, researchers from around 

the world made significant headway in 

understanding what causes depression, 

how it can be treated and whether there’s 

anything that can be done to prevent it. 

The most recent study, conducted by 

Western Sydney University, has found that 

eating a healthy diet significantly reduces 

symptoms of both depression and anxiety 

for women – but not for men. 

Lead author Dr Joseph First said the 

result was unexpected. 

“One explanation is that because we 

were looking into the effects of diet on 

symptoms of depression in the general 

population, where the rates of depression 

are higher among women, the change was 

much more visible,” he told The New 

Daily. 

“It’s also possible that we don’t 

understand how diet interacts with mental 

health, which could be due to genuine 

biological differences.” 

The study’s key findings, taken 

from data from 16 clinical trials (and 

nearly 46,000 participants) showed that 

improving your diet seemed to reduce 

symptoms of depression in people – 

including those not clinically depressed. 

“The main message is that just 

reducing your junk food and increasing 

your intake of high-nutrient foods is 

enough to boost your mood,” he said. 

Another significant study published 

on Tuesday analysed the DNA of 800,000 

people – of which 250,000 were depressed 

– and found 87 genetic changes and 102 

genes associated with depression. 

The University of Queensland’s 

Maciej Trzaskowski, one of the study’s key 

analysts, said the findings were seminal. 

This is the biggest discovery so far,” 

he said. 

“We can now use this genetic 

information to look at the relationship 

between depression to other behaviours, 

traits and disorders such as neuroticism, 

anxiety, schizophrenia and smoking.” 

Dr Trzaskowski said scientists have for 

years suspected that depression was linked 

to genes (family studies have consistently 

pointed to that) but that no one could 

pinpoint which genes were responsible. 

The study also found that being 

neurotic could lead to depression. 

“Neurotic people tend to worry a lot 

about what’s happening and what’s going 

to happen, and these ways of thinking 

have been linked to depression,” Dr 

Trzaskowski said. 

He believes the study is a breakthrough 

in depression research, which has evolved 

little in the past 50 years. Depression 

is a hard condition to study because its 

symptoms are so varied among sufferers. 

According to the Australian Bureau of 

Statics (ABS), about 4.8 million Australians 

had a mental or behavioural condition 

in the year 2017-18, up from 4 million in 

2014-15. 

Professor of Psychiatry at Deakin 

University Michael Berk told The New 

Daily that both studies were important, 

but that research should now find out 

what the genes do; how they interact with 

each other; and how they interact with the 

other risk factors involved in depression. 

“Depression is very complex, and is 

a combination of genetic vulnerability, 

psychological factors, stress and lifestyle 

factors such as diet, exercise and 

smoking,” he said. 

The healthy diet study was a 

“message of hope”, because it showed 

that improving diet lowered the risk of 

depression. 

“[The paper] says that diet, like 

physical activity and smoking, is a 

modifiable risk factor. We know that if you 

eat a healthy diet, you reduce your chance 

of developing depression by 30 per cent,” 

Professor Berk said. 

To add to the effects of diet on 

depression, a third study, also released 

on Tuesday, has found an association 

between certain types of gut bacteria and 

depression. 

After looking at two sample groups 

of 1000 people, Belgian researchers 

found that two specific groups of 

bacteria, Coprococcus and Dialister, 

were repeatedly depleted in people with 

depression. 

However, the research has a long way 

to go, as most studies involving the gut 

and brain have been on animals. 

Scientists hope the research will 

eventually lead to an improvement in 

treatment, and that medication will 

become tailored to each person, potentially 

increasing its efficacy and reducing 

exposure to many unpleasant side effects. 

Lifeline 13 11 14; Beyondblue 

1300 22 4636 

This article was first published on and 

reprinted with permission from The New Daily 

www.thenewdaily.com.au 


TAX FILES 

Franking credit reform: What lies ahead 

STEPHEN HEATH, PARTNER, WALLMANS LAWYERS 

If Labor is successful in the upcoming 

Federal election then reform to the 

tax laws relating to franking credits is 

imminent. 

CURRENT FRANKING CREDIT RULES 

Franking credits are “credits” 

representing income tax paid by a company 

that attach to a dividend paid by that 

company to a shareholder. For example, if 

a company earns $100 of income and pays 

$30 of tax and then distributes the $70 net 

profit to a shareholder as a fully franked 

dividend, the shareholder will receive 

$70 of income plus a $30 franking credit 

representing the tax paid at the corporate 

level. The $30 franking credit is treated 

as both income and a tax credit at the 

shareholder level. So if the shareholder is 

an individual taxpayer with a marginal tax 

rate of 47%, they will have to pay tax of 

$17 on a $70 fully franked dividend. Many 

taxpayers think in terms of the “top up” 

tax being at the rate of 17% when in fact 

the rate is around 24.3% 

That all seems fine – and in fact, Bill 

Shorten and Labor agree that franking 

credits should be able to be used to reduce 

tax payable. But what if the shareholder 

has a marginal tax rate of 0%? Taking 

the example above, if the shareholder’s 

marginal tax rate was 0% instead of 47%, 

the shareholder receives a $30 cash refund 

from the ATO on a fully franked dividend 

of $70. This means that, in the end, no 

income tax has been paid on the original 

profit made by the company. 

Australia, unlike any other developed 

country in the world, allows for a full cash 

refund of excess franking credits. 

HOW SMSFS BENEFIT UNDER THE 

CURRENT RULES 

So who benefits under the current 

system? In short, Self Managed 

Superannuation Funds (SMSFs) which pay 

income stream benefits. 


Photo sourced from Facebook 

The tax rate for a superannuation 

fund is 15% in respect of accumulation 

balances, but is 0% in respect of assets 

supporting income stream benefits. The 

corporate tax rate is, for most entities, 

30%. Therefore, any full franked dividend 

paid by a company to a superannuation 

fund will have franking credits 

representing tax paid at 30% attached to 

it. As superannuation funds pay tax at 

between 0% and 15%, franked dividends 

may then give rise to excess franking 

credits within the fund, which under the 

current laws are fully refundable. 

The current Australian franking credit 

regime and the inclination of Australian 

companies to return the majority of 

their profits to shareholders by way of a 

franked dividend may not be independent 

of one another. ASX listed companies 

have historically favoured high a dividendpayout 

ratio of around 70-80% and a 

dividend yield of around 4%, compared to 

international equities which have favoured 

a lower dividend payout-ratio of 30-40% 

and a dividend yield of under 2%. In any 

case, the end result is that it is a popular 

strategy adopted by SMSFs to invest into 

ASX listed companies due to the sizeable 

dividend yield and ability to make use of 

the accompanying refundable franking 

credits. 

Labor’s policy position is that the 

benefit of franking credit refunds unfairly 

favour wealthier retirees with large 

superannuation balances. Specifically, 

the Labor party points to the following 

statistics: 

• 80% of the benefit from franking 

credit refunds accrue to the wealthiest 

20% of retirees 

• 92% of taxpayers in Australia do not 

receive refunds of excess franking 

credits (2014-15 figures) 

• 90% of franking credit refunds to 

superannuation funds accrue to 

SMSFs and just 10% accrues to APRA 

regulated funds 

• The top 1% of SMSFs receive a cash 

refund of $83,000 (on average) based 

on 2014-15 ATO data. 

• The refund of franking credits 

will soon cost the budget $8 billion 

per year

TAX FILES 

LABOR POLICY 

The Labor policy, “the Pensioner 

Guarantee”, is planned to commence in 

July 2019. Under the Pensioner Guarantee, 

cash refunds for excess franking credits 

will be denied for most taxpayers. 

Franking credit refunds however will 

not be denied for taxpayers who are on 

an Australian Government pension or 

allowance as at 28 March 2018 or who are 

SMSFs which have at least one member 

who is on an Australian Government 

pension or allowance as at 28 March 2018. 

Franking credits will still be able to 

be used to reduce tax but it is the refund 

of unused franking credits which is to be 

removed. 

WHAT LIES AHEAD? 

If Labor is able to implement their 

franking credit reforms, it may be the case 

that SMSFs seek to invest in different asset 

classes such as real estate or international 

equities, rather than ASX-listed companies. 

As Labor has stated that they will not 

modify the current 1/3 rd CGT discount 

for SMSFs, SMSF trustees may seek capital 

appreciation in preference to dividend 

yield. On the other hand, ASX-listed 

companies may alter their dividend policies 

and retain a greater percentage of their 

profits to adapt to the franking reforms 

and remain an attractive investment for 

SMSFs. 

It is also noteworthy that the franking 

credit reforms are only one of many Labor 

policies affecting SMSFs. Such other 

polices include: 

• ‘banning’ new limited recourse 

borrowing arrangements; 

• limiting deductions for tax advice to 

$3000 for individuals, SMSFs, trusts 

and partnerships; and 

• lowering the non-concessional 

contribution cap to $75,000. 

In light of these proposed reforms, 

questions also arise regarding the feasibility 

for many SMSFs to make direct real 

property investments. Under a Labor 

government, retirees with SMSFs may be 

best served by transferring superannuation 

balances into APRA regulated industry 

funds, which have often outperformed 

SMSFs with low account balances. It 

should be noted that the same franking 

credit refund rule will apply to APRA 

regulated superannuation funds. Such 

funds, however, are ordinarily net 

taxpayers due to the mix as between 

accumulation and pension balances. That 

means that internal tax credits to reflect 

full value for franking credits can be 

applied in most APRA regulated funds 

unlike SMSFs which are exclusively paying 

income stream benefits. 

Tax Files is contributed on behalf of the 

South Australian based members of the Taxation 

Committee of the Business Law Section of the 

Law Council of Australia. 

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YOUNG LAWYERS 

facebook.com/YLCSA 

Young lawyers schooled in 

performance review skills 

Chances are you’d struggle to find a 

lawyer who enjoys attending their 

performance review, however, the same 

cannot be said for the Young Lawyers 

Committee’s annual “Performing at your 

Performance Review” Seminar! 

On 26 March a sold-out crowd poured 

into Wallmans Lawyers for the event. 

Guest speakers Rachael Shaw (Partner, 

Shaw & Henderson), Kate Maguire (HR 

Manager, Wallmans Lawyers) and Paul 

Burgess (Director, Burgess Paluch) each 

shared their own varied experiences, and 

provided words of wisdom, warning and 

courage to young practitioners heading 

towards the end of the financial year. 

Attendees were advised that proper 

preparation is essential, and that a 

solid knowledge of their internal 

successes, external successes and KPIs is 

fundamental. The guests also shared advice 

that practitioners should neither undersell 

themselves or over-sell themselves, 

however confidence in one’s performance 

is key. If things don’t go to plan and 

constructive criticism is provided during 

the review, practitioners should avoid 

becoming defensive, and both willingly 

and openly discuss methods of addressing 

issues. Practitioners were reminded that a 

performance review should ideally present 

no surprises, as competent, communicative 

leaders within firms should be raising 

issues if and when they arise. 

Thank you to Georgia Hagias and 

Matt Rismondo for organising the event, 

Kate Walkley and Amelia Garreffa of the 

Law Society for expert support, sponsors 

Burgess Paluch and legalsuper for 

ongoing support, guest speakers for their 

invaluable advice and insight, and host 

Wallmans Lawyers for their hospitality and 

magnificent spread. 

Eggcitement for Young Lawyers’ 

Premium Breakfast 

On 4 April, young lawyers packed 

Borsa Pasta Cucina for the annual 

(sold out) Premium Breakfast, with guest 

speaker, his Honour Judge Stephen 

McEwen. 

The struggle of arriving at an event 

before sunrise was soon alleviated by 

multiple coffees, a mouth-watering 

breakfast crepe and the entertaining yet 

insightful words of Judge McEwen. His 

Honour gave a motivating talk about his 

experiences in progressing from a junior 

lawyer to a Judge of the District Court, 

pausing along the way to provide handy 

hints and practical tips for anyone early 

in their career. His Honour’s tips covered 

everything from the benefits of working 

in regional areas to exercising caution 

when it comes to personal social media 

accounts, and emphasised the importance 

of wellbeing and life outside of work. 

Throughout the continuous bouts of 

laughter, there were moments of complete 

silence and head-nodding when it was 

clear that his Honour’s words resonated 

strongly within the room. Attendees of 

the breakfast appreciated his Honour’s 

willingness to chat and answer questions 

over coffee, at the end of his talk. 

Thank you to Chanel Martin, Bianca 

Geppa and Kate Walkley for coorganising 

the event, Young Lawyers’ 

Committee major sponsor Burgess Paluch 

Legal Recruitment for their ongoing 

support, Judge McEwen for his time and 

words of wisdom, and Borsa Pasta Cucina 

for their enthusiasm in creating a perfect 

breakfast menu. 

42 


SPONSOR’S MESSAGE 

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when you go to make a cup of tea or coffee 

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business when you find yourself or your 

team doing non-chargeable tasks such as 

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business supplies is one way of saving time, 

in turn improving efficiency and ultimately 

the time you can put into your clients’ needs. 

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supplies. 

Anything you need for your office, they 

supply. Take a moment to look around your 

business, almost everything you see, ADS 

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Fully updated and expanded, the second 

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lives of transgender people and disabled people. 

It continues its coverage of contemporary social 

issues such as homelessness, mental illness, and 

Indigenous policing. Each issue is placed in its 

historical, social, and cultural context, and linked 

to local, national, and global debates. 

M Ball & B Carpenter 

2 nd ed, The Federation 

Press 2019 

PB $69.95 

ANNOTATED COMPETITION AND CONSUMER LEGISLATION 

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and the Competition and Consumer Amendment 

(Misuse of Market Power) Act 2017. 

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LexisNexis Butterworths 

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is a large and essential aspect to Australia’s 

economy. 

This fourth edition of Essential Personal 

Property Securities in Australia contains a 

comprehensive background and overview and 

practical registration guide by Craig Wappett. 

The annotated legislation has been extensively 

updated to reflect amendments to the PPSA and 

the developing body of Australian and overseas 

case law. 

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44 


GAZING IN THE GAZETTE 

13 Weiss v The Queen (2005) 224 CLR 300, 314 [35]. 

14 The absence of the expression “substantial 

miscarriage of justice” should not be taken 

to suggest that there will not be a substantial 

miscarriage of justice if an appeal against 

conviction succeeds under sub-s (1)(a) of the 

CPA: Baini v The Queen (2012) 246 CLR 469, 

477-8 [19]. 

15 CPA s 276(1). 

16 Section 158(1)(a)-(c) Criminal Procedure Act 1921 

(SA). 

17 (2005) 224 CLR 300. 

18 (2014) 253 CLR 455. 

19 (2014) 253 CLR 455, 470-1 [43]-[44] (citations 

omitted). 

20 (2014) 253 CLR 455, 471 [45]. 

21 (2014) 253 CLR 455, 471 [46]. 

22 [2000] QCA 194. 

23 [2000] QCA 194 [3]. 

24 [2000] QCA 194 [5]-[7]. 

25 [2000] QCA 194 [60]. 

26 [2000] QCA 194 [61]. 

27 [2000] QCA 194 [61]-[62]. 

28 [2000] QCA 194 [79]. 

29 [2018] HCA 58 [1]. 

30 See, eg, R v Farquharson [2009] VSCA 307 [212]; 

Gould v Director of Public Prosecutions (Cth) [2018] 

NSWCCA 109 [15]. 

31 Wilde v The Queen (1988) 164 CLR 365, 375 

(Deane J) (cited with approval in Lee v The Queen 

(2014) 253 CLR 455, 471-2 [47]). 

32 Dietrich v The Queen (1992) 177 CLR 292, 298. 

33 [2000] QCA 194 [81]. 

3 MAR 2019 – 2 APR 2019 

A MONTHLY REVIEW OF ACTS, APPOINTMENTS, REGULATIONS 

AND RULES COMPILED BY MELLOR OLSSON’S ELIZABETH OLSSON. 

ACTS PROCLAIMED 

Correctional Services (Miscellaneous) Amendment 

Act 2018 (No 28 of 2018) 

Commencement except ss 4; 8; 9: 

25 March 2019 

Gazetted: 7 March 2019, 

Gazette No. 11 of 2019 

Health and Community Services Complaints 

(Miscellaneous) Amendment Act 2018 (No 37 

of 2018) 

Commencement: 18 March 2019 



Police (Drug Testing) Amendment Act 2017 

(No 48 of 2017) 

Commencement: 1 April 2019 



Statutes Amendment (Vehicle Inspections and 

South Eastern Freeway Offences) Act 2017 

(No 54 of 2017) 

Commencement except ss 4; 5; 6; 

9; 11: 1 May 2019 



REGULATIONS PROMULGATED (3 MARCH 2019 – 2 APRIL 2019) 

ACTS ASSENTED TO 

Construction Industry Training Fund (Board) 

Amendment Act 2019, No. 2 of 2019 



APPOINTMENTS 

Legal Services Commission Member: 

from 1 May 2019 until 30 November 2019 

Debra Ann Contala 



South Australian Civil and Administrative 

Tribunal Ordinary Members 

for a term of five years commencing on 31 March 

2019 and expiring on 30 March 2024 - 

John Irving 

Alexander Lazarevich 

David Roland Rupert Parker 



Youth Court of South Australia 

Magistrate 

for a term of 2 years from 19 April 2019 

Oliver Rudolf Gerhard Koehn 



District Court of South Australia Judge 

South Australian Employment Tribunal 

Deputy President 

commencing on 13 May 2019 

Anthony Rossi 



Magistrate 

South Australian Employment Tribunal 

Deputy President 

commencing on 3 April 2019 

Stuart Charles Cole 



Retention of the title ‘Honourable’ 

The Hon Justice Ann Vanstone 



RULES 

Magistrates Court Rules 1992 

Amendment 70 



REGULATION NAME REGULATION NO. DATE GAZETTED 

Public Sector Act 2009 19 of 2019 14 March 2019, Gazette No. 12 of 2019 

Health and Community Services Complaints Act 2004 20 of 2019 14 March 2019, Gazette No. 12 of 2019 

Work Health and Safety Act 2012 21 of 2019 14 March 2019, Gazette No. 12 of 2019 

National Parks and Wildlife Act 1972 22 of 2019 14 March 2019, Gazette No. 12 of 2019 

Police Act 1998 23 of 2019 21 March 2019, Gazette No. 13 of 2019 

Motor Vehicles Act 1959 24 of 2019 21 March 2019, Gazette No. 13 of 2019 

Road Traffic Act 1961 25 of 2019 21 March 2019, Gazette No. 13 of 2019 

Road Traffic Act 1961 26 of 2019 21 March 2019, Gazette No. 13 of 2019 

Opal Mining Act 1995 27 of 2019 21 March 2019, Gazette No. 13 of 2019 

Opal Mining Act 1995 28 of 2019 21 March 2019, Gazette No. 13 of 2019 

Harbors and Navigation Act 1993 29 of 2019 28 March 2019, Gazette No. 14 of 2019 


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NORWOOD SA t. 5067 +61 8 431 80 82 

m. +61 401 712 908 

e. ahi@andrewhillinvestigations.com.au 

Fellow AIPI 

Licensed Investigation Agents 

& Process Servers 

Servicing the Mid North, Yorke & 

Eyre Peninsula`s and Outback of 

South Australia with: 

• Process Serving 

• Property Lockouts 

• Investigations 

• Missing Persons 

OUTBACK BUSINESS SERVICES 

P.O. Box 591, 

PORT AUGUSTA. 5700 

P: 0418 838 807 

info@outbackbusinessservices.com.au 

LITIGATION ASSISTANCE 

FUND 

The Litigation Assistance Fund (LAF) is a 

non-profit charitable trust for which the 

Law Society acts as trustee. Since 1992 

it has provided funding assistance to 

approximately 1,500 civil claimants. 

LAF receives applications for funding 

assistance from solicitors on behalf of 

civil claimants seeking compensation/ 

damages who are unable to meet the 

fees and/or disbursements of prosecuting 

their claim. The applications are 

subjected to a means test and a merits 

test. Two different forms of funding exist – 

Disbursements Only Funding (DOF) and 

Full Funding. 

LAF funds itself by receiving a relatively 

small portion of the monetary proceeds 

(usually damages) achieved by the 

claimants whom it assists. Claimants who 

received DOF funding repay the amount 

received, plus an uplift of 100% on that 

amount. Claimants who received Full 

Funding repay the amount received, plus 

15% of their damages. This ensures LAF’s 

ability to continue to provide assistance 

to claimants. 

LAF recommends considering whether 

applying to LAF is the best course in the 

circumstances of the claim. There may be 

better methods of obtaining funding/ 

representation. For example, all Funding 

Agreements with LAF give LAF certain 

rights including that funding can be 

withdrawn and/or varied. 

For further information, please visit 

the Law Society’s website or contact 

Annie MacRae on 8229 0263. 

LawCare 

The LawCare Counselling 

Service is for members of 

the profession or members 

of their immediate family 

whose lives may be adversely 

affected by personal or 

professional problems. 

If you have a problem, speak 

to the LawCare counsellor Dr 

Jill before it overwhelms you. Dr 

Jill is a medical practitioner 

highly qualified to treat social 

and psychological problems. 

The Law Society is pleased to 

be able to cover the gap 

payments for two consultations 

with Dr Jill per patient per 

financial year. 

All information divulged to the 

LawCare counsellor is totally 

confidential. Participation by 

the legal practitioner or family 

member is voluntary. 

To contact Dr Jill 08 8110 5279 

8am-8pm, 7 days a week 

LawCare is a member service 

made possible by the generous 

support of Arthur J. Gallagher 

Family Law - Melbourne 

Marita Bajinskis 

formerly of 

Howe Martin & Associates 

is a Principal at 

Blackwood Family Lawyers 

in Melbourne 

Marita is an Accredited Family 

Law Specialist and can assist with 

all family law matters including: 

• matrimonial and de facto 

• property settlements 

• superannuation 

• children’s issues 

3/224 Queen Street 

Melbourne VIC 3000 

T: 03 8672 5222 

Marita.Bajinskis@ 

blackwoodfamilylawyers.com.au 

www.blackwoodfamilylawyers.com.au 

CONSULTING 

ACTUARIES 

Brett & Watson 

P TY. LTD. 

For professional actuarial 

advice on 

• economic loss 

• workers compensation 

• all superannuation issues 

Contact 

Geoff Keen or Bruce Watson 

Phone 08 8232 1333 

Fax 08 8232 1324 

Ground Floor 

157 Grenfell Street 

Adelaide SA 5000 

46 THE BULLETIN May 2019

Next Gen Memorial Drive 

A pleasant five minute stroll from North Terrace across the River Torrens footbridge, Next Gen Memorial 

Drive offers you the choice and opportunity to stretch out and live the life you want, each and every day. 

With a fully refurbished gym floor featuring the latest training equipment, brand new tennis courts, and 

now Adelaide’s largest altitude training facility, our members-only club offers an unparalleled range of 

fitness and lifestyle facilities. 

World class gymnasium 

Interactive Stages cycling studio 

Simulated altitude training studio 

Indoor & outdoor swimming pools 

Resort style spa facilities 

Competition tennis & squash courts 

Crèche and children’s facilities 

Fully licensed cafe, bar, & restaurant 

Free wifi & meeting room facilities 

Members-only car parking 

Law Society of SA Offer 

Law Society of South Australia members who join on a 12-month membership by 30 May 2019 will; 

• Pay no admin or joining fees 

• Get a free session in our NEW altitude training studio 

• Choose between 3 x free PT sessions -or- $100 credit to spend in club 

To find out more call Sara on 08-8110-7708 or email sara.volker@nextgenclubs.com.au 

*Conditions apply. Only available to current Law Society of South Australia members on selected membership types. Please enquire 

for full terms and conditions. Offer ends 30/05/2019. 

08-8110-7708 

NEXT GEN MEMORIAL DRIVE 

War Memorial Drive, North Adelaide SA 5006 

sara.volker@nextgenclubs.com.au

LSB May 2019_Web

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