Brezeal v Lam [2008] WSSC 31 (23 May 2008)

IN THE SUPEME COURT OF SAMOA
HELD AT APIA

BETWEEN:

JAKE MICHAEL BREZEAL of Las Vegas, USA.
Plaintiff

AND:

JACK TOAIVA LAM of Los Angeles, USA, Retired.
First Defendant

AND:

COLEEN FABRICIUS MOORS
of Honolulu, Hawaii and
PHOEBE FABRICIUS OLDEHAVER
of Los Angeles, USA, Company Directors.
Second Defendants

Counsel: T R S Toailoa for plaintiff
R Drake for first and second defendants

Ruling: 23 May 2008

RULING OF SAPOLU CJ

Proceedings

[1] These proceedings are concerned with a motion on behalf of the plaintiff to disqualify Mrs. Drake from continuing to act as counsel for the defendants in proceedings concerning a claim by the plaintiff against the defendants.

[2] The plaintiff’s claim arises out of the sale of a property at Matafele, Apia, which belonged to the company E & R Fabricius Ltd of which the second defendants are directors. The only parties to that claim are the plaintiff who appears to be a shareholder of the company, the first defendant who had granted financial accommodation to the company, and the second defendants who are the directors of the company. The company E & R Fabricius Ltd is not a party to that claim.

[3] The plaintiff’s claim was filed together with an ex parte motion for an interim injunction against the defendants which was granted by Vaai J. The defendants then moved to discharge the interim injunction and to strike out the plaintiff’s claim as disclosing no reasonable cause of action. Those motions by the defendants are pending before the Court.

[4] However, in an amended statement of claim for which no leave to file has been granted and in the present motion for disqualification of Mrs. Drake from continuing to act as counsel for the defendants, the company E & R Fabricius Ltd has been added in not only as second plaintiff but also as third defendant.

[5] Counsel for the defendants is right that E & R Fabricius Ltd can not be treated as a party for the purpose of the motion for disqualification. Firstly, E & R Fabricius Ltd is not cited as a party in the claim by the plaintiff; secondly, no leave has been granted to file the plaintiff’s amended statement of claim which cites E & R Fabricius Ltd as a party; and, thirdly, no leave has been granted to join E & R Fabricius Ltd as a plaintiff or defendant. I would, therefore, treat the company E & R Fabricius Ltd as a non-party for the purpose of the motion for disqualification.

[6] The two grounds on which the motion to disqualify is based are: (a) Mrs. Drake is acting for E & R Fabricius Ltd in a separate matter involving the company against another shareholder of the company, and (b) as counsel for the company Mrs. Drake would be in possession of confidential information which would give her an unfair advantage when acting as counsel for the defendants in the proceedings relating to the claim by the plaintiff against the defendants.

[7] Perhaps, it should be mentioned here that the legal profession in Samoa is a dual profession. That is to say, a legal practitioner can be both a barrister and a solicitor. Most Samoan legal practitioners hold that dual status. So is Mrs. Drake.

Jurisdiction

[8] It has been well established in several decisions of this Court that it has inherent jurisdiction to supervise and control its own process and the conduct of those who appear before it, which includes lawyers, in order to preserve public confidence in the integrity of the judicial process and to uphold the right to a fair trial: Apia Quality Meats Ltd v Westfield Holdings Ltd [2006] WSSC 65; Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2004] WSSC 21; Nickel v Westpac Bank (Samoa) Ltd [2003] 35; Agne v Polynesian Airlines Holdings Ltd [1997] WSSC 8. In those decisions of this Court, relevant English, Canadian and New Zealand cases are referred to and applied. In the exercise of its jurisdiction, the Court can intervene by way of an injunction to restrain a barrister or solicitor from acting or continuing to act for a litigant or by way of a declaratory order that a barrister or solicitor should refrain from acting or continuing to act for a litigant.

[9] However, the jurisdiction to disqualify a barrister or solicitor from acting or continuing to act for a litigant is to be exercised with circumspection; Black v Taylor [1993] 3 NZLR 403, 406 per Cooke P.

Grounds for disqualification

[10] As explained in Apia Quality Meats Ltd v Westfield Holdings Ltd [2006] WSSC 65, the usual grounds for invoking the Court’s jurisdiction to intervene to control the conduct of its own proceedings and those who appear before it as barristers and solicitors are conflict of interest, protection of confidential information, and misconduct.

[11] No misconduct is alleged in the motion for disqualification. So that ground is not relevant.

[12] I am not entirely sure from the submissions by counsel for the plaintiff whether reliance is placed on conflict of interest. Perhaps not, but I will refer briefly to conflict of interest just in case. As it would appear from Farrington v Rowe McBride & Partners [1985] NZCA 21; [1985] 1 NZLR 83, 89-90 per Richardson J which is cited at some length in Apia Quality Meats Ltd v Westpac Holdings Ltd, there are two aspects of the conflict rule: conflict of duty and interest, and conflict of duty and duty. The term ‘conflict of interest’ is very often used in a way that embraces both aspects of the conflict rule.

[13] The conflict of duty and interest rule would disqualify a legal representative from acting for a client where his duty to the client conflicts or may conflict with his own personal interest. The conflict of duty and duty rule would disqualify a legal representative from acting for two clients in the same proceedings or transaction where his duty to one client may conflict with his duty to another client.

[14] For the conflict of duty and interest rule to apply in these proceedings, it would have to be shown that Mrs. Drake’s duty to either of the defendants, who are the clients she is representing, conflicts or may conflict with some personal interest of her own. That is not alleged in the motion for disqualification or appear from the material before the Court. So the conflict of duty and interest rule does not apply.

[15] For the conflict of duty and duty rule to apply in these proceedings, it would have to be shown that Mrs. Drake is acting for the first defendant and the second defendants, who are the two clients she is representing, in the same proceedings but her duty to the first defendant may conflict with her duty to the second defendants or vice versa. Obviously, the conflict of duty and duty rule does not apply and it has not been raised on behalf of the plaintiff.

[16] In relation to the duty of confidence which is sometimes expressed as the duty not to disclose confidential information or to preserve the confidentiality of information, I referred in Apia Quality Meats Ltd v Westfield Holdings Ltd [2006] WSSC 65 to the decision of the House of Lords in Prince Jefri Bolkiah v KPMG [1998] UKHL 52; [1999] 2 AC 222 in which a solicitor’s duty of confidence to a former client is discussed. Even though that case was concerned with a solicitor’s duty of confidence to a former client, I think what is said in that case is helpful to the resolution of the issue in this case.

[17] In Prince Jefri Bolkiah v KPMG [1998] UKHL 52; [1999] 2 AC 222, Lord Millet in explaining the distinction between the basis of the Court’s jurisdiction to intervene for the protection of confidential information obtained from a former client and the basis of the Court’s jurisdiction to intervene to prevent a conflict of interest said at pp 234-235:

"On this footing the Court’s intervention is founded not on the avoidance of any perception of possible impropriety but on the protection of confidential information.

My Lords, I would affirm this as the basis of the Courts jurisdiction to intervene on behalf of a former client. It is otherwise where the Court’s intervention is sought by an existing client, for a fiduciary cannot act at the same time both for and against the same client, and his firm is in no better position. A man cannot without the consent of both clients act for one client while his partner is acting for another in the opposite interest. His disqualification has nothing to do with the confidentiality of client information. It is based on the conflict of interest which is inherent in the situation...

Where the Court’s intervention is sought by a former client, however, the position is entirely different. The Court’s jurisdiction cannot be based on any conflict of interest, real or perceived, for there is none. The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence.

Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one. The former may readily be inferred; the latter will often be obvious."

[18] Applying the above passage with the necessary modification to the present proceedings, there are difficulties for the plaintiff. Mrs. Drake has never acted as counsel or solicitor for the plaintiff. So she is not a former counsel or solicitor for the plaintiff. Counsel for the plaintiff submits that the plaintiff is a shareholder of E & R Fabricius Ltd which is represented by Mrs. Drake in separate proceedings against a different shareholder of the company. But a company is a legal entity with a separate existence from its shareholders. So by representing the company in separate proceedings between the company and another of its shareholders, Mrs. Drake is not representing the plaintiff or any of the other company shareholders.

[19] The second difficulty is that it has not been shown that Mrs. Drake in her capacity as solicitor is in possession of any information confidential to the plaintiff and to the disclosure of which the plaintiff has not consented. It is submitted for the plaintiff that Mrs. Drake being counsel for the company in separate proceedings against a different shareholder, a lot of information which is confidential to the company must have come into her possession and knowledge which can be an unfair advantage to the plaintiff if Mrs. Drake is to continue acting for the defendants in the proceedings by the plaintiff against the defendants. This is mere suspicion or speculation. There is no evidence that Mrs. Drake is or may be in possession of information confidential to the company which would constitute an unfair advantage against the plaintiff in his claim against the defendants, if Mrs. Drake is to continue to act for the defendants.

[20] It has also not been shown that the confidential information, if there is any, which the plaintiff is concerned about, is or may be relevant to the plaintiff’s claim against the defendants. It is not possible to assess the relevance of any confidential information unless one knows what that confidential information is.

[21] The jurisdiction to disqualify counsel or a solicitor from acting for a litigant is also not to be exercised lightly but with circumspection. The right of a litigant to be represented by counsel or solicitor of his choice, though not absolute, is also an important value to be considered.

[22] For the foregoing reasons, the plaintiff’s motion for disqualification is dismissed. The question of costs is reserved.

CHIEF JUSTICE

Solicitors
Toa Law
Drake & Co