Solve Legal Pty Ltd v All is 1 Pty Ltd (t/as Banga Legal)

1. [1]

   PAYNE JA: On 7 April 2026, this Court heard, on a concurrent basis, an application for leave to appeal and an appeal from a decision of McGrath J: All is 1 Pty Ltd t/as Banga Legal v Townsend [2025] NSWSC 953. At the conclusion of the oral hearing the Court made the following orders:

   1. (1)

      Leave to appeal granted.

   2. (2)

      Appellant to file a Notice of Appeal in the form of the draft Notice of Appeal within 7 days.

   3. (3)

      Appeal allowed.

   4. (4)

      Set aside the orders of 21 August 2025 and in their place order:

   5. (5)

      The First and Second Respondents pay the Appellant’s costs of the application for leave to appeal and the appeal.

   6. (6)

      Reasons reserved.

2. [2]

   These are my reasons for joining in the making of those orders.

Relevant facts

1. [3]

   The appellant, Solve Legal Pty Ltd (“Solve Legal”), is an incorporated law firm. The first respondent, All is 1 Pty Ltd, is a law firm trading as Banga Legal (“Banga Legal”), and the second respondent, Mr Samir Banga, is the principal solicitor of that firm. The third respondent, Ms Jessica Townsend, is a former employee of Banga Legal.

2. [4]

   Between about December 2021 and August 2022 a Mr Cameron Shamsabad was employed by Banga Legal as a consultant solicitor. The terms of the “Consultant Agreement”, signed by Mr Shamsabad on 3 January 2022, contained confidentiality provisions which included a restraint on the use of confidential information and on disclosure of that information that extended after the term of the contract concluded. The agreement provided that :

3. [5]

   On 8 August 2022, Mr Shamsabad commenced work as a solicitor at Solve Legal.

4. [6]

   Between October 2022 and 29 January 2025, after Mr Shamsabad had left Banga Legal, Ms Townsend worked for Banga Legal, initially as a volunteer, then as a solicitor on contract until 5 December 2024, and then in a permanent position from 6 December 2024 until 29 January 2025.

5. [7]

   In February 2023, Mr Banga assigned Ms Townsend to act for him in a “sensitive private matter” where she was responsible for briefing counsel and for court appearances. It is alleged that, in the course of acting for Mr Banga, Ms Townsend disclosed details of the matter to people she should not have, including to “current employees of Banga Legal”. Ms Townsend was dismissed by Banga Legal on 29 January 2025.

6. [8]

   In about March 2024, Mr Shamsabad communicated to Solve Legal’s principal, Mr Kyle Kutasi, that he had been contacted by Ms Townsend who wanted to obtain employment law advice regarding her work with Banga Legal. About Mr Shamsabad acting for Ms Townsend, Mr Kutasi replied, “go for it”. Mr Shamsabad thereafter worked at Solve Legal as a solicitor for Ms Townsend.

7. [9]

   Ms Townsend commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2) under the provisions of the Fair Work Act 2009 (Cth) where she challenges the circumstances of her termination from Banga Legal.

8. [10]

   On 28 March 2025, Banga Legal and Mr Banga commenced proceedings by summons in the Supreme Court of New South Wales, Equity Division, against Ms Townsend. A statement of claim was filed on 21 May 2025. Banga Legal and Mr Banga allege that Ms Townsend disclosed to other members of staff confidential information about Mr Banga acquired in the course of her role at Banga Legal, and that she committed various other acts of misconduct. Banga Legal and Mr Banga seek to restrain Ms Townsend from disclosing confidential information in breach of alleged contractual and fiduciary duties owed to Banga Legal.

9. [11]

   On 5 April 2025, Banga Legal and Mr Banga filed an amended summons in the Equity Division seeking relief including “orders restraining Ms Townsend from using or disclosing their confidential information, compelling its return and disclosure, suppressing certain information, and making declarations, awarding damages, and other relief.”

10. [12]

    On 29 April 2025, the legal representatives for Banga Legal and Mr Banga sent an email requesting both Mr Shamsabad and Mr Kutasi immediately cease acting for Ms Townsend based on an alleged “conflict of interest”. Mr Kutasi, on the same date, sent a letter in response denying any conflict and stating they would continue to act for Ms Townsend. On 11 July 2025, Banga Legal and Mr Banga filed a motion to restrain Solve Legal from acting for Ms Townsend was filed against Ms Townsend. Solve Legal was neither party to the motion, nor to the proceedings.

11. [13]

    On 12 July 2025, Mr Shamsabad resigned from Solve Legal. He commenced a period of parental leave before joining the New South Wales Bar. He no longer acts for Ms Townsend.

12. [14]

    On 15 August 2025, the motion came before McGrath J in the Applications List.

13. [15]

    The basis of the application was that Mr Shamsabad, a former consultant of Banga Legal, worked at Solve Legal for a period of time after leaving Banga Legal. It was submitted that Mr Shamsabad had obtained “confidential information” about Mr Banga and his wife in the course of his engagement with Banga Legal. Consequently, so the argument went, Mr Shamsabad likely conveyed that confidential information to Solve Legal before he left that firm. Accordingly, Solve Legal should be restrained from continuing to act for Ms Townsend, despite the fact that Mr Shamsabad no longer worked there. His Honour made such orders and published reasons on 21 August 2025.

14. [16]

    On 15 September 2025, Banga Legal and Mr Banga filed an interlocutory application seeking to restrain Solve Legal from acting for Ms Townsend in the Fair Work Act proceedings. On 27 November 2025, Judge McCabe, who was referred to the primary judge’s orders and reasons, made orders dismissing that application: Townsend v All is 1 Pty Ltd [2025] FedCFamC2G 1956.

15. [17]

    On 13 March 2026, the matter came before Meek J in the Equity Division: ALL IS 1 PTY LTD (t/as Banga Legal) v Townsend [2026] NSWSC 224. Meek J there stated that there was a “more fundamental question which arises regarding the parties’ disparate claims, which, in my estimation, ought to be addressed prior to pleading or other case management questions”: at [3]. The orders of the court were as follows:

16. [18]

    I agree with Meek J that every effort should be made by the parties to explore whether there is a single court which is able to address all the existing claims for relief having regard to the apparently common factual substratum of the dispute(s).

Reasons of the primary judge

1. [19]

   The primary judge addressed the fact that Solve Legal was not joined as a party to the proceedings or the motion. His Honour stated: “[i]t is true that Solve Legal is not named as a party to motion”, and also that “[i]t is also the case that where the interests of third parties are affected by an application they should be made party to it, be given notice of it and be heard in respect of it.” His Honour went on, however, to conclude that: “in the present case, there is no injustice to Solve Legal because it was put on notice of the application, appeared at the hearing through their employed solicitor Mr Brozek, led evidence and made submissions opposing it.”

2. [20]

   It is to be noted, at this stage, that Mr Brozek appeared at the hearing and led evidence and made submissions for Ms Townsend, and not for or on behalf of Solve Legal. In written submissions filed on behalf of Ms Townsend it was made clear that:

3. [21]

   His Honour found it was “clear that while engaged as a contractor for Banga Legal, Mr Shamsabad acquired information about the personality, vulnerabilities and litigation strategies of Mr Banga” and that in addition “the social contact that Mr Shamsabad had with Mr Banga and his wife, Ms Gill, means that he also acquired information about her personality and vulnerabilities”.

4. [22]

   His Honour determined the information acquired by Mr Shamsabad was confidential. The content of that allegedly confidential information was identified in an affidavit affirmed by Mr Banga on 28 July 2025:

5. [23]

   His Honour concluded that, as there was no breach of confidence alleged, it was not necessary to determine whether all the elements in the requisite legal test for breach of confidence were satisfied. Instead, his Honour concluded that the consideration undertaken needed to be whether this was a case where the court would restrain its officers from acting in conflict when in possession of confidential information, which his Honour assumed the matters set out in the previous paragraph comprised.

6. [24]

   His Honour found that, as an employee of Solve Legal, Mr Shamsabad had acted for Ms Townsend for a considerable period of time both in the provision of advice and during the proceedings. His Honour concluded that in the circumstances of the proceedings it was likely that both Mr Banga and his wife, Ms Gill, would be witnesses, and that it “appears to be self-evident that the confidential information is likely to have been of potential use by Mr Shamsabad for the benefit of Ms Townsend, giving her a forensic advantage in these proceedings”. His Honour considered it should be inferred that there was a serious risk that “confidential information” would have been used by Mr Shamsabad for the benefit of Ms Townsend while he was acting for her. His Honour went on to conclude that there was “an obvious conflict of interest”. In so concluding his Honour adverted to the fact that Mr Shamsabad also worked alongside Mr Kutasi (the principal of Solve Legal) on the matter. This led his Honour to conclude that the fact that Mr Shamsabad no longer worked for Solve Legal did not alleviate the conflict issue identified.

7. [25]

   His Honour stated that he had given due weight to the fact Ms Townsend should not be deprived of her lawyer of choice and the inconvenience and impracticality of requiring them to cease to act.

8. [26]

   His Honour’s dispositive reasoning was based on dicta of Stevenson J in In the matter of Edgecliff Car Rentals Pty Ltd (deregistered) [2017] NSWSC 244 to which I will return. His Honour said, when considering the merits of the application:

9. [27]

   It seems, despite the emphasis on the employment relationship in the transcript of argument and the first part of the judgment, that the primary judge decided the case as a species of preventing misuse of confidential client information (as in Edgecliff Car Rentals) rather than as preventing a breach of duty of confidence owed to a prior employer. His Honour concluded:

10. [28]

    On 21 August 2025, the primary judge made the following orders:

Appeal to this Court

1. [29]

   On 24 October 2025, the applicant for leave to appeal to this Court, Solve Legal, filed a ‘White Folder’ including a summons seeking leave to appeal, dated 17 October 2025. The application for leave to appeal was brought under section 101(2)(e) of the Supreme Court Act 1970 (NSW). On the same day, Solve Legal provided a draft Notice of Appeal. The proposed appeal grounds set out in the draft Notice of Appeal are:

Leave to appeal

1. [30]

   As a non-party, Solve Legal requires leave to appeal: Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher and Barnet (2015) 89 NSWLR 110; [2015] NSWCA 85; Coveney v Asbestos Injuries Compensation Fund Ltd [2024] NSWCA 317 at [11].

2. [31]

   Orders, including orders as to costs, have been made affecting the legal interests of Solve Legal without it having been joined as a party to the motion. That matter, in and of itself, is a sufficient basis to grant leave to appeal.

3. [32]

   In addition, there are important questions of principle raised by the application. It is appropriate that this Court should intervene to clarify the legal test and to emphasise the extraordinary nature of the jurisdiction. For these reasons, leave to appeal was granted.

Consideration

1. [33]

   It bears emphasis at the outset that the inherent jurisdiction to prevent a lawyer from acting for a client is an extraordinary one which should be used sparingly: see, for example, the comments of Brereton J in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 at [46], referring to Grimwade v Meagher [1995] 1 VR 446. This is because “[i]t is undoubtedly a serious step to deprive a party of counsel or solicitors of that party’s choice”: Frankland River Olive Company Ltd v Charters Securities Pty Ltd [2004] WASC 88 at [25]-[26].

2. [34]

   It is fundamental to our system of justice that, absent a compelling reason to the contrary, parties be able to choose their own lawyers: R v Khazaal (2006) 167 A Crim R 565; [2006] NSWSC 1353 at [23]-[27]; Hamzy v Commissioner of Corrective Services NSW (2022) 107 NSWLR 544; [2022] NSWCA 16.

3. [35]

   The principle of free choice of legal representative, however, is not unlimited. Both parties approached the cases on the basis that the test was correctly stated by Brereton J in Kallinicos v Hunt, being what a fair minded, reasonably informed member of the public would conclude as to what the proper administration of justice requires. That test has generally been followed, see Porter v Dyer (2022) 402 ALR 659; [2022] FCAFC 116; Técnicas Reunidas SA v Andrew [2018] NSWCA 192; Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641; Malovini v Abdishou [2025] NSWSC 1157; cf Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475 at [39] (per Griffiths J).

4. [36]

   A second matter which bears emphasis in the present case is that the allegedly confidential information possessed by Mr Shamsabad was information about the “personality, vulnerabilities and litigation strategies” of a supervising lawyer and the “personality and vulnerabilities” of the supervising lawyer’s wife. Both species of allegedly “confidential information” were obtained in an employment context as part of the ordinary exchange of information between a lawyer and a supervising lawyer. No client confidential information was involved. It is fundamental to the legal profession that more senior practitioners be involved in the legal training and mentoring, whether formally or informally, of junior lawyers. It would be antithetical to the continued existence of the legal profession if junior lawyers availing themselves of supervision or mentoring opportunities were thereby to be precluded from acting in cases involving a lawyer who has provided training or mentoring. What is particularly striking about the present case is the paucity of evidence about any information which could merit the description “confidential information”.

5. [37]

   The allegedly “confidential information” is set out at [22] above. The observations made by Mr Shamsabad of Mr Banga and his wife in a social setting cannot possibly amount to “confidential information”. It does not warrant protection by an order made in the extraordinary jurisdiction which is invoked. The other allegedly “confidential information”, being essentially discussions about “appropriate litigation strategy in the preparation and execution of legal matters”, including criminal matters, is confidential only in the sense that employees cannot lawfully use it during their employment for their own purposes or disclose it during that employment to a competitor of their employer. This is often called “know-how”, or sometimes “subjective knowledge’”: see Ian Neil, David Chin and Christopher Parkin, The Modern Contract of Employment (3rd ed, 2023, Thomson Reuters) at [8.033]. This category of allegedly “confidential information” rises no higher than subjective “know-how” relating to information that “once learned necessarily remains in the servant’s head and becomes part of his own skill and knowledge applied in the course of his master’s business”: Faccenda Chicken Ltd v Fowler [1987] Ch 117 at 133; Neil, Chin and Parkin at [8.036]. To invoke the extraordinary jurisdiction here engaged to protect against the use of such information is, in effect, to impose a significant restraint of trade on junior lawyers. This would be a deeply troubling outcome that I would strive to avoid.

6. [38]

   Finally, the notion underpinning the primary judge’s order that understanding a lawyer’s “appropriate litigation strategy in the preparation and execution of legal matters” necessarily tells a person anything useful about how the lawyer will react as a client cannot be accepted.

7. [39]

   Having sketched this background, I turn to the substance of the appeal.

8. [40]

   The standard of appellate review directs attention to the nature of the decision the subject of the appeal. In accordance with the reasoning of the High Court in GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2023) 280 CLR 442; [2023] HCA 32 at [16]-[23] and Moore (a pseudonym) v The King [2024] HCA 30; (2024) 98 ALJR 1119 at [15], the constrained standard in House v The King (1936) 55 CLR 499; [1936] HCA 40 only applies where there is a range of answers which can permissibly be provided, rather than one unique outcome, as to which the “correctness” standard applies. If the law only tolerates one outcome then the correctness standard applies, even if the answer to the question involves an evaluative process: GLJ at [17] (Kiefel CJ, Gageler and Jagot JJ). The present case involves an evaluative judgment to which the correctness standard applies.

9. [41]

   For completeness, even if House v The King was the appropriate standard of review I would set aside the decision of the primary judge. As I will explain, it was an error of principle to extend dicta contained in Edgecliff Car Rentals, which related to the restraint of a solicitor in possession of confidential information of a client, to support the restraint of a solicitor allegedly in possession of confidential information belonging to a former co-worker.

10. [42]

    Whether a restraint in such a circumstance can ever be justified need not be determined here. The extension of the restraint into an area where no court had yet ventured, without explaining why this extraordinary step was justified, was a further error of principle. If this exceptional jurisdiction is to be expanded in such a significant way, a clear and compelling explanation needs to be provided.

11. [43]

    Finally, it was an error of principle to make orders against Solve Legal without the firm being joined to the motion.

12. [44]

    As explained at [20], the appellant complained in written submissions to the primary judge that no application had been made to join it as a party to the motion and that, accordingly, the proceedings were improperly constituted. No application was made by the respondents to join the appellant. That matter was not addressed by the respondents or the primary judge during the oral submissions but, as I have explained, in his decision the primary judge found that no prejudice was occasioned to the appellant by its failure to be joined. I do not agree.

13. [45]

    The principles applicable to the joinder of parties are well settled, although their application in particular cases may give rise to controversy. A person who is directly affected by the orders sought in a proceeding is a necessary party, and that the obligation to join that person rests upon the plaintiff or applicant or person applying for those orders. Joinder, not notice, is the default position: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870; Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]; Tahmoor Coal Pty Ltd v Visser [2022] NSWCA 35. The test stated by Lord Diplock delivering the advice of the Judicial Committee of the Privy Council in Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 criticising the dichotomy between “legal” and “commercial” interests is this (at 56):

14. [46]

    The joinder of a party directly affected by an order is not, at least not ordinarily, a matter of discretion. It is a matter of obligation upon the party seeking the order. That is why the High Court referred to the position of the non-party Walker Corporation in John Alexander’s Clubs at [153] as depending on “matters of right affecting non-parties which rest on general law principles of natural justice”.

15. [47]

    The appellant was not a party to the proceedings or the motion below. A solicitor from the firm appeared for Ms Townsend (as was recorded by the primary judge in the judgment). The notice of motion was addressed to Ms Townsend alone and not to the appellant.

16. [48]

    The legal rights of the appellant were directly affected by the orders made by the primary judge. This can most clearly be seen in relation to the order for costs. No third-party costs order was sought. Indeed, no application for any costs order against the appellant was ever made or even foreshadowed by the respondents. The appellant is entitled to have the costs order set aside as of right: John Alexander’s Clubs at [131], [136].

17. [49]

    I incline to the view that the appellant is entitled to have all of the orders made by the primary judge set aside on the same basis but as the appellant was content to address the injunction granted on its merits, I will now address the merits of that order.

18. [50]

    It was common ground that the dispositive reasoning of the primary judge in this case was based on the decision of Stevenson J in Edgecliff Car Rentals at [29]. As I will explain, dicta in that passage in Edgecliff Car Rentals goes too far and should no longer be followed. The primary judge said:

19. [51]

    I would set aside the injunction granted by the primary judge for the following reasons.

20. [52]

    First, and fundamentally, in this passage in Edgecliff Car Rentals Stevenson J was referring to the “confidential information” of clients, not the confidential information of solicitors who are members of the same firm. The jurisdiction to restrain a lawyer from acting for a party is not to be used as a substitute form of restraint of trade. There may, perhaps, be circumstances where the extraordinary jurisdiction to restrain a solicitor from acting is enlivened in relation to confidential information obtained about the practice of the law by another member of the same firm, but in such a case compelling reasons would need to be given. To reason by reference to a restraint based on the “confidential information” of a client, without more, was an error.

21. [53]

    Secondly, in cases where confidential information is said to be the basis of the restraint, there is a need for precise identification of that confidential information: see, for example, Li v Jin Lian Group Pty Ltd [2018] NSWSC 479 at [10] (Gleeson JA) and the authorities cited therein; Porter v Dyer at [75]; Mumbin at [38]. In the present case, I respectfully disagree that much of the information relied upon by the primary judge, such as observations of Mr Banga and Ms Gill in a social setting, merited the description “confidential information”. Information concerning discussions about “appropriate litigation strategy in the preparation and execution of legal matters” including criminal matters is confidential only in the limited sense I have earlier explained. To invoke the extraordinary jurisdiction here engaged to protect against the use of such information is, in effect, to impose a significant restraint of trade on junior lawyers. Such a step should only be taken in a clear and compelling case. The present case is not close to such a case.

22. [54]

    Thirdly, Stevenson J in the dicta at [29] of Edgecliff Car Rentals was referring to the “advantage [the solicitor] might have, having observed [the clients] in their litigious context to which I have referred” (emphasis added). That “litigious context” was that the solicitor had acted for the principals of the companies he was now seeking to act against on hundreds of occasions. That is, the solicitor had an intimate knowledge of the decisions made by the clients he was proposing to act against and how those clients behaved over a long period when faced with litigation challenges. Whilst, in that context, the outcome of Edgecliff Car Rentals may be correct, I am unable to agree with the statement of principle at [29] that the absence of knowledge of specific confidential information “is the very forensic disadvantage on which [they rely] for this application”. It is one thing to know that a solicitor has a great deal of client confidential information, but be unable to pinpoint what may be used, and another to fail to identify any confidential information.

23. [55]

    Edgecliff Car Rentals loosely attributes the proposition that the absence of knowledge of specific confidential information “is the very forensic disadvantage on which [they rely] for this application” to what Ward J said in Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 at [4]. In context, however, Cleveland Investments does not support the proposition that precise identification of relevant confidential information is not required. Her Honour commences at [4] with the following: “In the case of a restraint for the purpose of protection against breach of confidence, the confidential information must be identified” (emphasis added). This is not a promising basis for treating Cleveland Investments as authority for the contrary proposition for which it is cited in Edgecliff Car Rentals. Further, Cleveland Investments was a case where a solicitor had sought to change sides in litigation on the same claim in the same proceedings. Her Honour concluded, unsurprisingly, that this was “something very subversive of the appearance to a reasonable and fair-minded observer that justice is being done” at [8].

24. [56]

    The primary judge also cited Stevenson J’s apparent approval in Edgecliff Car Rentals of the observations of Brooking JA (Ormiston and Chernov JJA agreeing) in Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 at [58] that confidential information may include “knowledge of such things as the personalities and reactions of the participants”. However, in Spincode, lawyers were restrained from acting against a company for whom they had acted on many matters over about a five-year period, and who plainly held confidential information material to the relevant proceeding.

25. [57]

    Finally, neither party could point to a case like the present where it was the allegedly confidential information of a fellow solicitor which was the foundation of a restraint which had been imposed. This is for good reason. The extraordinary jurisdiction here engaged should not be used, absent a compelling reason, to protect against the use of information about senior lawyers gained by junior lawyers as part of the ordinary processes of professional legal training and development. To do so is, in effect, to impose a significant restraint of trade on junior lawyers.

26. [58]

    The primary judge’s conclusion as to what the relevant member of the public “would” conclude cannot be justified and must be set aside.

Conclusion

1. [59]

   The orders as to costs of the motion before the primary judge and the proceedings in this Court follow the event.

2. [60]

   For the foregoing reasons, I joined in the orders made on 7 April 2026.

3. [61]

   KIRK JA: I agree with Payne JA.

4. [62]

   ADAMSON JA: I agree with Payne JA.