the high court of mala wi · defendant filed a third party notice against imran waka joining him as...

BETWEEN:

IN THE HIGH COURT OF MALA WI (COMMERCIAL DIVISION)

LILONGWE REGISTRY COMMERCIAL CASE NO. 101 OF 2017

RUKSANA A. WAKA ..... .. ...... .. ........................................ .. l 5tCLAIMANT RAZIA A.WAKA ............... .......... . ..... ..... .......... ... .... 2"ct CLAIMANT

AND

NAZIR AHMED WAKA ......................... . . .... ........... .. DEFENDANT IMRAN WJ\l(.A . ................. ........... . ......................... THIRD J>J\RT):

Coram: Hon. Justice Annabel Mtalimanja

Mr. Wapona Kita, Counsel for the Claimants

Mr. Manuel Theu, Counsel for the Defendant

Mr. Eric Ndhlazi, Court Clerk

Mtalimanja, J

RULING ON APPLICATION TO IIJ\ VE MESSRS LEXON & LORDS CEASE ACTING FOR THE DEFENDANT

1. On 21 si March, 2017, the Claimants commenced these proceedings against

the Defendant seeking, inter alia, a declaration that the Defendant is not a

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partner in the business of Waka Stationery Shop (hereinafter "the Shop"), or

if he is, that the partnership be dissolved and the profits and losses be shared

equally. On 24th March, 2017, Messrs Lex on & Lords (hereinafter "the

Firm"), filed a Notice of Appointment of Legal Practitioner notifying the

Court and the Claimants that they had been appointed as Legal Practitioners

for the Defendant, who was hitherto unrepresented. On 2°d May, 2017, the

Defendant filed a Third Party Notice against Imran Waka joining him as a

Third Party to the proceedings. Messrs G. Nankhuni & Partners are on

record as Legal Practitioners for the Third Party.

2. By his Defence, the Defendant denies the Claimants' claims and contends

that he was and still is the undoubted owner and the one with ultimate

authority over the Shop businesses. Further, by a Counter-claim, the

Defendant claims, inter alia, a declaration that the Claimants were at all

material times his agents in the running of the Shop. He also seeks an order

that the Claimants are jointly liable to give a full and frank account of all

their dealings and transactions in the businesses.

3. This now is an Application by the Claimants, made under 0.10, r.1 of the

Courts (High Court)(Civil Procedure Rules), 2017 (hereinafter "the Rules")

and under the inherent jurisdiction of the Court, for an order requiring the

Firm to cease acting for the Defendant. The Application is premised on the

ground that the Firm once acted for the Shop and is thus conflicted to act for

any party in these proceedings. Both the 1st Claimant and the Defendant

have filed quite lengthy and elaborate Sworn Statements in support of and in

opposition to the Application. Whilst I have read and had recourse to each

and every Sworn Statement, as well as the Skeletal Arguments and

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Submissions filed by the parties in determining this Application, I will not

reproduce the same in their entirety for purposes of brevity.

4. In her Sworn Statement in suppoti of the Application, the 151 Claimant

deposed that she once engaged the Firm to act on behalf of the Shop with

regard to debt collection matters and acquisition of properties. The Firm was

involved in the acquisition of property Title No. 2/358 on behalf of the Shop.

She contends that it is therefore clear that the Firm is deeply conflicted to act

on behalf of the parties in respect of the same subject matter since they acted

for both patties at different times. According to her, the likelihood of the

Firm using information which they obtained from one party against the other

party is real, as such justice will not be seen to have been done by them

representing any of the parties herein, hence the Application.

5. In the Sworn Statement filed in opposition to the Application, Mr. Theu, of

Counsel for the Defendant, deposed that he is the proprietor of the Firm,

who represent the Defendant in these proceedings through him. His Firm

was instructed to represent the Defendant in conducting his Defence and

Counter-claim. He recalls that about 16 years ago, the Shop engaged his

Firm, as a case by case client, without a renewable annual retainer. The Shop

may have engaged his Firm shortly before and after such period, but

intermittently, in the realm of debt collection on specific individual debtor

accounts. The limited instructions from the Shop were largely debt

collection handled by the firm's debt collection section. During the

intermittent instructions, the Shop was assisted by any counsel or member of

the Firm's debt collection support, then available including, Counsel Theu's

ex-partner in the Firm, Counsel Chilenga.

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6. Counsel further deposed that there has neither been any long term solicitor

and own client relationship with the Shop nor any occasion for substantial

instructions hosting information, confidential or otherwise, even at the

Shop's management level. At all material times and even by 1999, the Firm

neither handled nor were they privy to any information as to have

knowledge of any of the parties' case to prejudice them herein, inclusive of

any information regarding ownership of the business and business

management of the Shop. The Firm neither had substantial debt collection

nor conveyancing and acquisition of properties instructions, to be in a

conflict of interest situation.

7. In further opposition, the Defendant deposed in his Sworn Statement that he

is and has been the sole proprietor of the Shop since 1997. He instructed his

sister, the 1st Claimant, to consult with the Firm to help with debt collection

for the Shop. At no point did the 1st Claimant engage the Firm without

consulting him as the owner of the Shop. It is thus a misrepresentation of

facts to say that Mr. Theu represented the 1 st Claimant personally on

anything connected with the business of the Shop. The 1st Claimant was

involved in dealing with the Firm on his instructions. The property

conveyance instructions were given to the Firm by the 1 st Claimant on his

mandate and the property was ultimately registered in his name in line with

the instructions he had given her.

8. He finally deposed that he consulted the Firm and was comfortable to be

represented by it through Mr. Theu because he knows that at no point has the

Firm ever acted on behalf of the 1st Claimant. The Firm has neither given

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him any document nor information to use in this cause against the Claimants

nor are his instructions to them aided by the Firm in any manner whatsoever.

9. I must state at the outset that the issue for determination in this Application

is not the question of ownership of the Shop.The 151 Claimant's case is that

the Firm should cease acting on behalf of any party in this action since it is

heavily conflicted, and chances are that documents and information which

was supplied to them when they were engaged by one party, will be used by

them in furtherance of the case against the other party.

10.The Firm argues that neither the intermittent debt collection nor an isolated

instruction in the perfection of acquisition of property Title No. Bwaila

2/358 can be an issue to trigger any conflict of interests on the part of the

Firm. The quality of dealings between the 1st Claimant and the Firm and the

extent of information that the Firm may have gained about the Shop is

nowhere near initiating a discussion on conflict of interest, so the argument

goes.

I I .Further, it was argued that in acting for the Shop, the Firm was never seized

of instrnctions relating to any dispute between the 1st Claimant/ Claimants

and the Defendant. There can be no rule that a former client is precluded

from engaging legal counsel if the opposite party in litigation is a former

servant or agent who submitted to the lawyer instructions on his/her former

client's behalf when there has never been a legal representation hitherto to

create new representation currently.

12.1 observe that the Defendant has filed Sworn Statements sworn by himself

and Shiraz Waka to show that he was at all material times the owner and the

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person exercising authority over the business. As indicated, the issue for

determination in this Application is whether the Firm is incapacitated from

acting for the Defendant on account of conflict of interest. The question of

the ownership of the business of the Shop is the core issue in the substantive

action, to be determined at trial.

13. The Malawi Law Society Code of Ethics (hereinafter the "Code"), held to be

binding by the Malawi Supreme Court of Appeal in the case of Jovce Zione

Gomani& Ernest Muza vs Republic, MSCA Civil Appeal No. 05 of 2016

(unreported), provides in Chapter 7 (3) that:

"except with the consent of the client or former client, a lawyer must

not act against a client or former client if the lawyer has confidential

information that could be used to the person's disadvantage in the new

presentation."

14.As observed by Dr. Kapindu J. in the case Republic v Misozi Chanthunya

Criminal Case No. 11 of 2018, Chapter 7(3) of the Code is not an absolute

prohibition against a legal practitioner acting against a former client. The

Rule applies where the lawyer has confidential information that could be

used to the former client' s disadvantage in the new presentation and the

former client has not consented to such new presentation.

15.It is not is dispute that prior to this action, the Firm acted on behalf of the

Shop in debt collection matters and in the acquisition of property Title No.

Bwaila 2/358. The Sworn Statements filed by the 1st Claimant and the

Defendant clearly state that the 151 Claimant is the person who instructed the

Firm to act on behalf of the Shop. I observe that the Defendant charges the

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1st Claimant with misrepresenting to the Court that she engaged the Firm in

her personal capacity as owner or partner of the Shop. The Defendant

submits that in stating this, the 1st Claimant is short-circuiting the legal

process and moving the Court to make such a pre-emptive and prejudicial

fact in her favour at this stage of the proceedings.

16. This charge is not borne out by the material before the Court. I observe that

in paragraph 5 of her Sworn Statement the 1 st Claimant states that "I once

engaged Messrs Lexon and Lords to act on behalf of Waka Stationery Shop

with regard to debt collection matters as well as acquisition of properties".

The 1st Claimant does not state in what capacity she so engaged the Firm to

act on behalf of the Shop. I therefore find it misleading for the Defendant to

impute to the 1st Claimant misrepresentation of the facts when the record

shows otherwise.

17.It is not in dispute that Firm acted for the Shop in debt collection and

acquisition of property. It is also not in dispute that it is the 1st Claimant who

instructed the Form to act on behalf of the Shop in these dealings. It is my

firm view that, considering the manner in which the business of the Shop

was being managed between the parti_es, the capacity in which the 1st

Claimant instructed the Firm is in-elevant to the disposition of the question

of whether there is conflict of interest herein.

18.lt is common cause that the parties are brothers and sisters of the same

family. The pleadings show that at the material time, the Defendant was

stationed in Mozambique and the Shop was being operated and managed by

the Claimants and the Third Party here in Malawi. The Defendant states that

the Claimants and the Third party operated the Shop for almost 20 years.

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The 1st Claimant instructed the Firm on behalf of the Shop in the course of

operating and managing the said Shop. Therefore, regardless of who was the

owner of the Shop and whether the 1st Claimant was acting on the

instructions and authority of the Defendant, it is manifest that the 1st

Claimant engaged with the Firm in the debt collection and property

acquisition transactions.

19. This entails dealings between the 1st Claimant on behalf of the Shop and the

Firm in carrying out the instructions for the debt collection and property

acquisition. In my view, the very fact that the 1st Claimant dealt with the

Firm on behalf of the Shop casts a shadow on the impartiality of the Firm to

now represent the Defendant against her (and the 2nd Claimant) in an action

that is intricately premised, inter alia, on the very business she instructed

and dealt with the Firm on.

20.As indicated, in the main action, the Defendant seeks, inter alia, an order

that the Claimants should jointly give a full and frank account of their

dealings and all transactions in the business, as least as way back as the law

can permit. In my view, it is not stretching the imagination and delving into

the realm of speculation to conclude that the debt collection and property

acquisition dealings and transactions form part of the dealings and

transactions that the Claimants have been called upon to account for in the

Counter-claim.

21.The 1st Claimant, being the person who instructed the Firm and responsible

for managing and operating the Shop, received either the proceeds of the

debt collection or the report from that exercise. Now, in the Counter-claim

the Defendant contends that the Claimants and the Third Paiiy used the

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resources and finances from the Defendant's businesses. Looking at this, in

particular the claim for the Claimants to give a full and frank account of

their dealings and transactions in the businesses, it becomes apparent that

thel st Claimant's dealings with the Firm form part of these proceedings. This

is because, in my estimation, the 151 Claimant will also have to account for

the debt collection and the property acquisition dealings and transactions in

responding to the Counter-claim.

22.I thus find that the fact that the 1st Claimant dealt with the Firm in dealings

that are invariably intricately woven into this action brings the question of

conflict of interest on the part of the Firm into the fray.

23. Counsel for the Defendant argued that the l st Claimant does not qualify as a

"former client" to invoke Chapter 7(3) of the Code since she did not deal

with the Firm in her personal capacity. I find this argument untenable.

Whether the 1 st Claimant dealt with the Firm in her personal capacity or

under instructions from the Defendant is ilrelevant to the question of conflict

of interest herein. The fact that the 1 51 Claimant dealt with the Fi1m in

transactions that form part of the dealings she has to account for in the

prosecution of the Counter-claim brings into question whether the Firm was

privy to confidential information that can be used to disadvantage the 1 st

Claimant.

24.As my brother Judge Dr. Kapindu observed in the case of Republic v Misozi

Chanthunya Criminal Case N o. 11 of 2018:

" .. . the Malawi Law Society's Code of Ethics lays down the general

principle that "in each matter, a lawyer's judgment and fidelity to the

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client ' s interests must be free from compromising influences". It is

important that all legal practitioners bear this cardinal principle in

mind in so far as the issue of conflict of interest in concerned and the

risk of disclosure of confidential information held in connection with

one party to an adverse party."

25.Counsel for the Defendant submitted that this Application is premised on

conjecture, that the 1st Claimant is appealing to assumptions and

manifestations of justice by suggesting that there is more information in the

custody of the Firm that could be used to her detriment in this action.

26. The Claimants argue, on the authority of the case of Ngilazi v Chimbende

(trading as Titlwkoze Transport) 10 MLR 354) that the question is not

whether the Firm will, as a matter of fact, use the information which they

obtained from the 1 st Claimant against her in furtherance of the Defendant's

case, but whether the Firm is so connected to the Shop business in its

pattnership dispute as to be unfit to act as legal practitioner for one party

against the other.

27.In my considered view, the question of whether the Firm is conflicted

transcends whether, as a matter of fact, there is indeed information that the

Firm became privy to that can be used to the detriment of the 1st Claimant in

these proceedings. As per Skinner CJ in the Ngilazi case (supra) citing Lord

Hewart C.J in R. v Sussex JJ. , ex p McCarthy (1924) 1 K. B at 259, justice

should not only be done, but must also be seen to be done. Fmther, Skinner

CJ held that applying this principle, a legal practitioner must decline or

cease to act not only where the interests of a client are prejudiced if the legal

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practitioner continues to act for the other client but also where that client's

interests might appear to be prejudiced.

28. Whilst it may well be that the Firm neither has nor became privy to

confidential information through the earlier instructions that can be used to

the detriment of the 1st Claimant, the mere possibility of this being so

smacks of unfairness and invokes the conflict of interest concerns. Applying

the principle that justice must not only be done but also be seen to be done, I

find that it will be inappropriate for the Firm to act for the Defendant.

Allowing the Firm to continue acting of the Defendant will, even to the

objective person, conjure an impression of conflict of interest and

consequently, injustice and unfairness to the 1 si Claimant.

29.In the Chantlzunya case (supra) Dr. Kapindu J, after considering the Ngi/azi

case (supra) and the case of Rusk Mkwapatira v Malawi Broadcasting

Corporation and Eunice Clzipangula Civil Cause No. 2124 of 2007 stated

that a legal practitioner is under an ethical and legal duty to decline or cease

to act, not only where the interests of a former client are prejudiced if the

legal practitioner continues to act for the other client, but also where the

former client's interests might appear to be prejudiced. I concur with this

reasoning and do apply it to this Application.

30.0n the present facts, I find that, even if the Firm does not have any

confidential information that can be used to the detriment of the 151 Claimant

in these proceedings, if the Firm continues to act for the Defendant there will

be, at the least, an appearance of prejudice against her. This flouts Chapter

7(3) of the Code. Thus, in the absence of the consent of the 1st Claimant, the

Firm is under a legal and ethical duty to cease acting for the Defendant in

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these proceedings. In terms of Chapter 3 of the Code, the Firm, as any other

lawyer, has a duty to uphold the standards and reputation of the profession.

To allow the Firm to continue acting for the Defendant will also flout this

principle, as doing so potentially has the effect of bringing the profession

into disrepute by perpetuating conduct that gives an appearance of injustice

and unfairness.

31.I therefore order Messrs Lexon and Lords to cease acting for the Defendant

in these proceedings, forthwith. The Defendant should appoint another Legal

Practitioner to represent him. The Defendant's new Legal Practitioner

should file a Notice of Appointment, in any event within 28 days hereof,

after which the matter will be set down for trial.

Made in Chambers this 101h Day of December, 2018 .

. -0.UJD{ro . talimanja

JUDGE

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the high court of mala wi · defendant filed a third party notice against imran waka joining him as...

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