Westpac v Newey [2013] NSWSC 533

The bank was asking the court to make a declaration about the proper construction of a clause in a Deeds and to rectify the Deed if required.

The borrowers wanted an injunction stopping the solicitors who drafted the Deed (Allens) from acting for the bank, on the basis of “the proper administration of justice”. The partners’ alleged that there was a conflict of interest because Allens had drafted the Deeds in question.

The judge disagreed. His Honour noted the very narrow issue in dispute and that the court would likely determine the construction of the Deed based on what the parties had intended it would mean, and the evidence of this would be in communications between the parties at the time of the drafting. It was not a dispute where there would be any detailed examination of the conduct of the drafting solicitor or attribution of blame on him. Further, there was no suggestion of any other type of conflict of interest, i.e. a financial conflict of interest; or conflict regarding confidential information.

The Judge decided that he did not agree with any of the arguments put forward for the injunction. The partners had also failed to establish any prejudice or loss that would be suffered by them if Allens continued to represent the bank.

His Honour determined that there was no sensible possibility of conflict and no threat to the integrity of the judicial process, stating that a grant of an injunction is discretionary and “must be grounded in pragmatism reflecting the practical commercial reality”, wheras the partners’ application existed “only in the clouds”.

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