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Claunch v One Hundred Sands Ltd [2022] FJHC 171; HBC 50 of 2019 (6 April 2022)

IN THE HIGH COURT OF FIJI AT SUVA

CIVIL JURISDICTION

Civil Action No. 50 of 2019

BETWEEN

LARRY CLAUNCH of 12900 Beck Road, Dallas, Oregon 97338,

United States of America as Director and Shareholder of

One Hundred Sands Limited.

PLAINITFF

AND

ONE HUNDRED SANDS LIMITED a Private Limited Company incorporated

under the Laws of the Republic of Fiji of Aliz Pacific, Level 8,

BSP Life Centre, 3 Scott Street, Suva, Fiji.

FIRST DEFENDANT

AND

TIMOTHY MANNING of 19-21 Como Street, Takapuna, Auckland,

New Zealand as Director and Share Holder of

One Hundred Sands Limited.

SECOND DEFENDANT

Counsel : Mr. Haniff F. for the Plaintiff-Respondent

Mr. Nand A. for the Defendants-Applicants

Date of Hearing : 11^th March 2022

Date of Ruling : 06^th April 2022

RULING

(On the application for Leave to Appeal)

[1] The defendants-applicants (the defendants) filed the summons on 21^st June 2021 seeking the following orders:

1. That Messrs Haniff Tuitoga Lawyers being the Barristers and Solicitors on record for the plaintiff be removed from appearing and / or acting any further for the plaintiff in Civil Action No. 50 of 2019 forthwith.
2. That Haniff Tuitoga Lawyers are in conflict of interest and are to be recused from acting any further in the action against One Hundred Sands Limited.
3. That the costs of this application be paid by the plaintiffs on indemnity basis.
4. Such further and other orders as the court deems just and fit.

[2] The learned counsel for the defendants relied on Rule 1.2 and Rule 1.5 of the Rules of Professional Conduct and Practice in support of the application.

Rule 1.2 – A party shall not act for more than one party in the same matter without the prior consent of all parties.

Rule 1.5 – Where a practitioner has received information from or on behalf of a client, a practitioner shall not thereafter act for another client in circumstances where the practitioner’s receipt of such information may result in detriment to the first mentioned client.

[3] After hearing the parties the court made order striking out the summons for recusal and the plaintiff has now sought leave to appeal the said order of this court to the Court of Appeal on the following grounds:

(a) In failing to interpret rule 1.2 of the Rules of Professional Conduct and Practice as mentioned in Legal Practitioners Act 2009 as no consent has been obtained the Solicitors for the Plaintiff to institute actions against the Defendants;
(b) In failing to interpret rule 1.5 of the Rules of Professional Conduct and Practice as mentioned in Legal Practitioners Act 2009 that the burden of proof is on the Practitioner to show that it does not have in possession of any information from its previous client which may be detrimental to the former client.
(c) In stating at Paragraph 4 that the burden was on Defendants to show that the information in possession of the Plaintiff is detriment to Defendant which is wrong in Fact and law.
(d) In failing to differentiate the case of R. C. Manubhai & Co Ltd v Herbert Constructions Company (Fiji) Ltd [2014] FJCA 175 from the case at hand;
(e) In failing to note that the former Solicitor is acting against the company and siding with one shareholder against the other shareholder in the same company and is fully aware of the company operations and affairs;
(f) No evidence has been adduced by the Plaintiff Solicitor that it no longer acts for the company and is not providing any legal opinions on any of the affairs of the company;

[4] In the decisions cited below the law on leave to appeal interlocutory orders has been discussed at length.

In Kelton Investment Ltd & Tapoo Ltd v Civil Aviation Authority of Fiji and Motibhai & Company Limited Civil Appeal No. ABU 0034 of 1995 the Court of Appeal observed as follows;

The Courts have thrown their weight against appeals from interlocutory orders or decisions for very good reasons and hence leave to appeal are not readily given. Having read the affidavits filed and considered the submissions made I am not persuaded that this application should be treated as an exception. In my view the intended appeal would have minimal or no prospect of success if leave were granted. I am also of the view that the Applicants will not suffer an irreparable harm if stay is not granted.

In the case of Ex parte Bucknell [1936] HCA 67; (56 CLR 221 at page 224) it was held:

At the same time it must be remembered that the prima facie presumption is against appeals from interlocutory orders, and, therefore, an application for leave to appeal under section 35(1)(a) should not be granted as of course without consideration of the nature and circumstances of the particular case. It would be unwise to attempt an exhaustive statement of the considerations which should be regarded as a justification for granting leave to appeal in the case of an interlocutory order, but it is desirable that, without doing this, an indication should be given of the matters which the court regards as relevant upon an application for leave to appeal from an interlocutory judgment.

In Dunstan v Simmie & Co Pty Ltd 1978 VR 649 at 670 it was held:

“....although the discretion to grant leave cannot be fettered, leave is only likely to be given in a case where the determination of the primary issue puts an end to the action or at least to a clearly defined issue or where, to use the language of the Full Court in Darrel Lea (Vic.) Pty Ltd v Union Assurance Society of Australia Ltd., [1969] VicRp 50; (1969) V.R. 401, substantial injustice would result from allowing the order, which it is sought to impugn, to stand.”

The learned counsel in this regard cited the decision in Niemann v. Electronic Industries Ltd. [1978] VicRp 44; [1978] V.R. 431 at page 441 where Supreme Court of Victoria (Full Court) held as follows:

".....leave should only be granted to appeal from an interlocutory judgment or order, in cases where substantial injustice is done by the judgment or order itself. If the order was correct then it follows that substantial injustice could not follow. If the order is seen to be clearly wrong, this is not alone sufficient. It must be shown, in addition, to affect a substantial injustice by its operation.

It appears to me that greater emphasis is therefore must be on the issue of substantial injustice directly consequent on the order. Accordingly if the effect of the order is to change substantive rights, or finally to put an end to the action, so as to effect a substantial injustice if the order was wrong, it may be more easily seen that leave to appeal should be given.

In the case of Khan v Suva City Council [2011] FJHC 272; HBC406.2008 (13th May 2011) the following observations were made in regard to applications for leave to appeal;

It is trite law that leave will not generally be granted from an interlocutory order unless the Court sees that substantial injustice will be done to the applicant.

Further in an application for leave to appeal, it is incumbent on the applicant to show that the intended appeal will have some realistic prospect of succeeding.

[5] Having the above principles in mind I will now consider the grounds of appeal relied on by the plaintiff in seeking leave to appeal the order of this court.

[6] The first ground of appeal is that the solicitors of the defendants has failed to obtain the consent of the plaintiff to appear for the defendants in breach of rule 1.2 of the Rules of Professional Conduct and Practice. In rule 1.2 of the Rules of Professional Conduct and Practice as mentioned in Legal Practitioners Act 2009 provides that a solicitor cannot appear for more than one party in the same matter without prior consent. In the present case the defendant’s solicitors represented the plaintiff to withdraw a different matter that was before the Supreme Court.

[7] I will now consider the second and third grounds of appeal is that the court failed to interpret rule 1.5 of the Professional Conduct and Practice as mentioned in Legal Practitioners Act 2009 that the burden is on the practitioner to show that it doe does not have in possession of any information from its previous client which may be detrimental to the former client. Rule 1.5 does not deal with burden of proof. It is a universally accepted principle of law that he who asserts must prove. In this matter it is the defendant who instructed Haniff Tuitoga Lawyers to withdraw the matter before the Supreme Court and as I stated in my ruling the plaintiff did not instruct Haniff Tuitiga Lawyers in his personal capacity but in representative capacity on behalf of the defendants. Whether the instruction given to Haniff Tuitiga Lawyers were detrimental to him or not is within the personal knowledge of the plaintiff. Therefore, the burden is on the plaintiff to show court that the instructions given to Haniff Tuitiga Lawyers were detrimental to him.

[8] In my ruling I cited the following paragraph from R.C Manubhai & Co. Ltd v Herbert Construction Company (Fiji) Ltd [2014] FJCA 175; ABU0002.2010 (29 May 2014);

I also had occasion to reflect on the Judicial thinking reflected in World Medical Manufacturing Corp v. Phillips Ormonde and Fitz Patrick Lawyers (a firm) [2000] VSC 196.

In that case Gillard J had suggested that, when a court is determining whether a lawyer should be able to act against a former client, the following questions should be asked:

[i] Is the former supplier of services whether it be a solicitor, accountant or a patent attorney or some other person providing services, in possession of information provided by the former client which is confidential and which the former client has not consented to disclosure?
[ii] Is or may the information be relevant to the new matter in which the interest of the other client is or may be adverse to his own?
[iii] If the answers to the first two issues are yes, then is there a risk which is real and not merely fanciful nor theoretical that there will be disclosure?
[iv] If there is that risk then the evidential burden which is heavy, rests upon the provider of the services to establish that there is no risk of disclosure and this may be established in exceptional cases by the provision of a 'Chinese wall' but this is rarely of sufficient protection.
[v] Should a permanent injunction be granted?

[9] However, the ruling of this court is not totally based on the above decision of the court of appeal. They were only guide lines to assist the court in deciding whether the solicitor should recuse himself from appearing for a client and these guidelines are not based on facts.

[10] The last ground of appeal is also based on the knowledge of the solicitor about the affairs of the company. As I said earlier the plaintiff being a shareholder and also a director has not mentioned any facts which he disclosed to the solicitor when he retained the solicitor only to discontinue the proceedings before the Supreme Court.

[11] For the above reasons I see no merit in this application for leave to appeal.

ORDERS

(1) The application for leave to appeal is refused.
(2) There will be no order for costs.

Lyone Seneviratne

JUDGE

06^th April 2022.