By summons filed in the New South Wales Supreme Court on 24 February 2020, the plaintiffs sought an order that the defendant law firm deliver up all of their documents to their new solicitors, HWL Ebsworth.
The plaintiffs consisted of Peter Dyce, aged in his 90s, and a group of six companies owned or controlled by Peter and his children, including David and Devorah, who had been directors of the companies since 1993. The plaintiffs’ combined wealth was estimated to be about $80 million.
The defendant firm had acted for Peter, his father Ivan Dyce, and the companies as their solicitor and primary adviser for more than 50 years. Mr Singer, the director of the defendant, held a power of attorney for each of the companies as well as for Peter himself.
In June 2019, Peter contacted HWL Ebsworth to retain them as his solicitor to, among other things, revoke his power of attorney in favour of Mr Singer and execute a new power of attorney in favour of his son David. Mr Singer refused to relinquish Peter’s documents to HWL Ebsworth, as he held concerns that Peter had lost capacity to act on his own, and was being controlled by David.
Before taking instructions, HWL Ebsworth arranged for Peter to be examined by his treating geriatrician, Dr Chalkley. Dr Chalkley reported that although Peter had “cognitive impairment consistent with a dementia that is of mild to moderate severity”, he did have capacity to give those instructions. During Peter’s meeting with HWL Ebsworth, Peter signed an authority which directed the defendant to release his documents to HWL Ebsworth.
In September 2019, Mr Moloney of HWL Ebsworth sent the authority to Mr Singer seeking the release and delivery of Peter’s documents, including powers of attorney, wills, and superannuation and trust documents. By reply email, Mr Singer stated that he was aware of conflicts within the family, particularly between Peter and David, and refused to comply with the authority on the basis that it was inconsistent with long standing instructions.
On 18 October 2019, whilst Peter was being assessed again at Dr Chalkley’s rooms, David and Devorah, on behalf of the companies of which they were directors (along with Peter), signed authorities directing Mr Singer to deliver up all material relating to the companies to HWL Ebsworth (the 18 October 2019 authorities). After the assessment, Dr Chalkley confirmed he was satisfied that Peter understood the nature and effect of the 18 October 2019 authorities.
HWL Ebsworth subsequently commenced to act for the companies (as well as for Peter), having been instructed by all of the companies’ directors to do so. Mr Moloney attached the six authorities in an email to Mr Singer, directing him to release “all information” in relation to each particular company.
Mr Singer made 12 objections to the companies’ authorities to release, including that they covered release of “information” but not “original documents”, and the directors had not passed a formal resolution.
Mr Moloney then sent Mr Singer a letter, endorsed by the signatures of David and Devorah, which changed the wording to “all material held by the firm on behalf of the companies”. Mr Singer contended that this was still insufficient.
In December 2019, the plaintiffs commenced proceedings against the defendant.
The issue before the court was whether Mr Singer had an obligation to deliver up the companies’ documents to HWL Ebsworth.
The court held that he did. Mr Singer was bound to act in accordance with the instructions of his clients. Mr Singer’s clients were the companies, acting through their agents, the directors.
The court rejected the defendant’s submission that Mr Singer was entitled to retain possession of the companies’ documents because he was not provided with a copy of a formal written resolution authorising him to deliver up the documents to HWL Ebsworth.
The court held that the collective presence of Peter, David and Devorah at Dr Chalkley’s rooms on 18 October 2019 was sufficient to constitute a ‘meeting’. The companies’ request for their documents was reiterated subsequently in a letter from HWL Ebsworth to Mr Singer, which was signed by David and Devorah, as directors of the companies.
The court referred to the decision in MYT Engineering Pty Ltd v Mulcon Pty Ltd, in which Powell JA held that “the intention of the directors of a company may be determined by reference to what they say or do”. In this case, although there had been no formal board meeting or resolution, the intention of the companies’ directors was clear – they wanted to engage HWL Ebsworth as their new solicitors, and they wanted the companies’ documents in Mr Singer’s possession to be delivered to HWL Ebsworth.
The court also rejected the submission that the 18 October 2019 authorities incorrectly sought “information” rather than “documents”. The court found that the “intention was plain from the surrounding circumstances”, and Mr Singer chose not to understand “because he did not want to lose the companies’ business”.
The court accepted that at the time Peter signed the 18 October 2019 authorities, he had the “requisite mental capacity to join in the request on behalf of the companies that Mr Singer return their documents and to instruct new solicitors”.
The court found that Mr Moloney had taken reasonable steps to ascertain that Peter had the capacity. Moreover, “if there was any ambiguity…the correspondence from HWL Ebsworth in November 2019, which was endorsed by the signatures of David and Devorah, was sufficient to remove the ambiguity and communicate to Mr Singer that he was required to deliver up the companies’ documents”.
The court found Mr Moloney to be a “competent and careful solicitor who was well aware of what was required of him as a fiduciary, who was acting for a new client who was old and was losing capacity”. The court noted that Mr Moloney “took care to seek advice from Dr Chalkley at significant times and to ensure that good records were taken of his conferences with Peter, including by arranging for a junior solicitor to be present as a note-taker”.
With respect to Mr Singer, the court found that he “initially presented as a loyal solicitor who had a close relationship with his client and was anxious to protect his client’s interests”. However, in the course of his cross-examination, “it emerged that Mr Singer was anxious to find excuses as to why Peter could not possibly want to change his legal representative… Mr Singer was simply unable to accept that Peter might, of his own free will, want to have a different solicitor manage his affairs and provide him legal advice. This reluctance to accept a change in instructions led Mr Singer to cling to the hypothesis that Peter was mentally incapable or subject to the undue influence of David”.
Furthermore, the court found that Mr Singer’s evidence to be “disingenuous and motivated by his considerable financial interest in retaining the companies as his clients”.
The court ordered the defendant to deliver up the plaintiffs’ documents and to pay their costs.
Meagan Liu is a Law Graduate in the QLS Ethics and Practice Centre. This article has been approved by Grace van Baarle, Solicitor and Manager, QLS Ethics and Practice Centre.
1 Dyce v David Landa Stewart Pty Ltd  NSWSC 590,  (Dyce).
2 (1997) 140 FLR.
3 Dyce (n1) .
4 Ibid .
5 Ibid .
6 Ibid .
7 Ibid .