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Elisha v Post PNG Ltd [1999] PGNC 40; N1866 (2 June 1999)

Unreported National Court Decisions

N1866

PAPUA NEW G

ign="ign="center">[Nr">[NATIONAL COURT OF JUSTICE]

WS NO. 708 OF 1998
BETWEEN: KELLENEY DAVID ELISHA AND NINE OTHERS
PLAINTIFFS
AND: POST PNG LIMITEDTHREERS
DEFENDANT

Waigani

Los J
1-2 June 1999

LEGAL PRACTIONERS - Solicitor client relationship confidentialacter of relatrelationship higher than former employee of a company - Hence lawyer may not act in a proceeding against former client - court may not interfere unless mischief is anticipated.Counsel

K Po>K Powaseu, for Plaintiffs

K Naru, for Defendants

LOS J: On behalf of the Defendants an objection was raised against Mr Powaseu acting as counsel for the Plaintiffs. It was sued that the counscounsel was at one time employed as lawyer for the First Defendant as such he had:

(1) ـ lawyer tlient relatrelatip and

(2) an inside kide know edgehef the First Defendant’s operations which he might usehe exthat uld prejudice the Defendants case.

LAWY>LAWYER CLIENT RELATIONSHIP

The evidence on this was flimsy. The Managing Directordencedence could give very little assistance. He did not know w Powaseu aseu was other than seeing him on an occasion at temises of Post PNG, and seeing him once in a Post PNG vehicle. To a ion by the Dthe DefenDefendant’s lawyer if he had knoat relationship Mr. Powaseuwaseu had with Post PNG, he answered, “I had no idea”. He hadd to refer to a repo reportolta KPK & Accountants ants about payment of certain fees described as legal costs to show that Mr Powaseu was a lawyer.

Tcond witness Lohia Guba referred to Mr Powaseu as a person rson engaged to give “advice to former Managing Director”.

The evidence by either witness or both have not established a clear solicitor-client relationship. To establish that ronship,ship, I consider that the length and depth of client-solicitor relationship must be proven. The seniority of the lais also important which would help to establish that the counsel had a long relationship toip to the extent that he was almost part o establishment. Only then an obon may make make sense.

INNER KNOWLEDGE OF O OF OPERATION

The evidence by the witnesses had not established that the counsel had a long association as an employee of the First Defendant to the extent he became part of the establishment. The second witness thought that Mr Powaseu was engaged to give advice to Mr Melisha. Beyond nothing further wasr was known.

In response to my question whether any principles of law or precedent was relied on,aru red me to the Prof Professional Conduct Rules 1989. He has relieticularly on s on sect sections 1, 10, and 12. Section 1 define220;clientlient” and “lawyer”:

“client” means any person from whom a lawyer accepts intion;

“lawyer&wyer” means a person who has been admitted to practice as a lawyer uyer under the Act;

Section 10 obliges a lawyer to give total and undivided attention to his client. The section therefore pro eeds to describe certain situations where a lawyer must avoid where conflict of interests may arise. The section says:

0#8220;Conflict of Interest

(1) Subject to the duty ofty lf a lawyer to the court, a lawyer shall give undivided fidelity to hisnt’s interests, unaffected by:

(a) #1660;&##160; an0; any inte interest of the lawyer; or

(b) ;ټ any inty interest rest of any other person; or

(c) &##160; the lawe lawyerRp7;s ptrception of the public interest.

(20;҈ If yer hy interinterest inst in t in a mata matter which:

(a) ҈ may cony conflict with; ob

(b);ټ is ae to,

the interinterests of his client, he shall declidecline tone to represent or shall withdraw from repting clien>

(3)&##160; If a If a lawyelawasr h acor acquires any interest in a mn a matteratter and he:

(a) wishes co ac opt;p> (b)p>(b) &#16s accepted,

inst>instructions from a client, touching on that ma he s

)ټ&##160; decline to rent; or

(b)&#16) d< &160;&#160 #160;&#1ith waw from represepresenting,

that client, unthe client is fully informed in writing of the lawyer’s interest in the matter and thnd the client voluntarily assents in writing tolawyeing or continuingnuing to a to act on his behalf.

(4) ҈ A lawyelawyer or a firm oy lawyers shall not represent or continue to represent conflicting interests in litigation.

(5) yelawr a oirlafyeall oepreoepresenresent or continue to represent two or morr more pare parties in any matters, other than litigation if:

(a) ;ټ tso islikelprejudice the interinterests ests of thof the clie client; ent; and

(b) the clisnt ilyfulfoointhur thure and implications of the conflict; and

(c) ټ &#160 th0; the; the client tariltarily assents in writinthe l or ff lawactincontinuing to act; act; and

(d)&>(d) #160; &#in0; e case of any town iown in which there are two or firmlawyers practicinticing, thg, the client has declined to place his instruction with another firm.

(6) &&#160lashallgivllgive advi advice,vice, othe other thar than the advice to secure the services of another lawyer, to a person who is not his client, where he knhe ints of that person are in conflict with or likely kely to beto be in conflict with the interests represented by him of his client.

(7) & Where a lawyer has acceptccepted instructions from two clients in a matter and a conflict developments between the interests of those client, the lawyer shall immediately inform each of the clients that he has forthwith ceased to act for them and that they each must instruct other lawyers.

(8) Where:

(a) ҈& a lawyelawyer has has represented a client; or

(b) ټ becausecause of a lawyer’s association a law he hd acco a c&#821onfidences,

>

that that lawyelawyer shar shall noll not thereafter use such information against that client’s interest or he bes of any other peer person.rson.

(9) &#If Counsel forms the view view that there is a conflict of interest between his client and his instructing lawyer, he shall advise that it would be in the client’s interest to instruct ar lawnd suvice shall ball be give given eien either in writing to the lawyer or at a conference at which both the lawyer and the client are present.

Section 12 requires a lawyer to maintain his independence and warns that this independence may be compromised if his client relates to him in anyway or if he relates to any one in connections with the court. Thtions says –

“Independence.

(1) & A lawyelawyer shall not appear in any Court or in any matter where by re of his connection with the client, whether that connectionction be blood relationship, relationship by matrimony or personal relationshipwill fficur him thim to maio maintainntain his professional independence.

(2) &#1 Lawyer shall not appearppear in any court or in any matter where by reason of:

(a) &#his connection with the Cthe Court or a membereof/p> <ـ blood relatiolstionshipnshipnship; or<; or

(c) tiolahip sy matrimony; o

(60;&##160; nal ronship,

t

the impartial administration of justice mige might apht appear pear to be prejudiced.

Mr Powaseu iosingobjecsubmitted that nothing that that has been produced has proven that heat he has has any conflict of interest or would compromise his independence. nceded to an extent that hhat he had some connection with Post PNG but that no longer existed. lients were aware of i so i so if there was to be any objection, his clients should object to him acting for them.&#16. Strangewever, the objectioection wised by the Defendants in particular Post PNG. He refe referred me tEngliEnglish case to support his argument. The case iRakusen v.s Mund Munday & Clarke [1912] UKLawRpCh 47; (1912) 1 Ch. 831.&831. The factshis case seem to m to raise more questions abouttionshan the fadvs advs advanced to support the objection raised before me. In case tase the members oers of a firm – there weo M &C who, had a habi habit of doing business separately and without any knowledge of each othe other’s clients. An occasion wherex employmployee of a of a company consulted “M” to issue proceedings against that company. “C&#82ot kn abngt thut the consultation, accepted an appointment to act for the company and the fthe firm was named as Solicitors for the cy.&#1he person that consulted M, raised an objection and sought an injunction to restrrestrain tain the firm from acting for the company. The injunction was granted. On appeal however decision reversed.

The appeal court discussed the law against disclosure of secrets by a former employee of a company (or employer). In almost all business there must be persons in confidentelation to the employers.&#rs. The kdge the employees acqs acquire during employment is not at their own disposal. An emp leaves bu220;still till has in his breast secrets which arch are the property of his past employer”. Fletcher Moulton LJ saidage 839:

"The employee is quite free to go into the service of people who may be rive rivals or opponents of his former master0; The law does not say that possession of those secrets shall cripple his work or sterilizrilize it. He may go into employmentequite inconsistent with the employment which he had in the past. All that the law says is: Yoll not disclose o at thet the service of your new employer the secrets that belong to your old employer”.

The Lord justice then compares to thationship between a Solicitor and a client. #160; At p At page 8 said:

“In the first place the degree of the confidential character of the relation between the client and his solicitor and of the communications made by the client tosolicitor is in the eyes ofes of the law the very highest &#1/strike>so high that thet the solicitor is absolutely privi and cannot be made to state what passed between him and his client. To that extent tent the solicitor is made, as it were, a pf his client for the purposurposes of those communications. The secoason is that the Cthe Court is not bound to accept in that the standard of sensibility which it may feel is all that ihat it can enforce on people in general who are in confidential relations ith the other. It cant can fix ndard of t of the behaviour of its own officers which is higher than it would be practicable to exact from persons in other types of confidential relations. I , therefore, that in decn deciding the question of what the action of a solicitor may be, although the Courts does not start fundamentally from a different rule, the decisions it gives may be rent in many cases from them the decisions which it would give were it appealed to in an action between persons who were not in the position of solicitor and client but nevertheless had been in contractual relations involving confidential communications.”

He concludes at page 841:

“As a general rule the Court will not interfere unless there be a case where mischief is rightly anticipated. I do not say that it is necessary to prove that there will be mischief, because that is a thing which you cannot prove, but where there is such a probability of mischief that the Court feels that, in its duty as holding tlance between the high stan standard or behaviour which it requires of its officers and the practical necessities of life, it ought to interfere and say that a solicitor shall not act. Now inpresent case there iere is an absolute absence of any reasonable probability of any mischief whatever.

His conclusion is same as Hardy M R who at page 835 said:

“I do not dfor a moment that the circucircumstances may be such that a solicitor ought not to be allowed to put himself in such a position that, human nature being what it is, he cannot clear his mind from the information which he has confidentially obtained from his former client; but in my view we must treat each of these cases, not as a matter of form, not as a matter to be decided on the mere proof of a former acting for a client, but as a matter of substance, before we allow the special jurisdiction over solicitors to be invoked, we must be satisfied that real mischief and real prejudice will in all human probability result if the solicitor is allowed to act.”

No PNG case had been cited to me on the issue either because there has been none on the point or because the objection was not expected. However judging fre lawyerawyers Rules of Conduct and my understanding of the general principles of ethics, the English case is not far from the point. The party raising an obje tion must produce some evi and establish the relationationship and the nature of the relationship and extent of relationship. acts produced in evideust eust speak for themselves without the court shifting throughrough any flimsy evidence to determine whether any conflict does exist or xist or may occur.

On the evidence before me the rele relationship alleged, the nature of the relationship and the extent of that relationship have not been established to my satisfaction. Instead there are innuendoes and suggestions. Having said of course if M if Mr Powaseu has some personal knowledge of anything arising from the innuendoes and suggestions in the lig the rs Rules of conduct, he may decide to withdraw anaw and his firm may appoint a different lant lawyer to take over the conduct of the case.

On the evidence however the objection cannot be sustained. I therefore dismiswith cosh costs.

Lawyers for Plaintiffs: Lomai & Lomai Attorneys at Law

Lawyers for Defendants: Carter Newell Lawyers



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