Wishart and Others v Blieden NO and Others

• Jurisdiction: South Africa
• Judgment Date: 19 September 2014
• Citation: 2020 (3) SA 99 (SCA)

Wishart and Others v Blieden NO and Others
2020 (3) SA 99 (SCA)

2020 (3) SA p99

Citation	2020 (3) SA 99 (SCA)
Case No	659/2013; [2014] ZASCA 120
Court	Supreme Court of Appeal
Judge	Lewis JA, Maya JA, Willis JA, Swain JA and Mocumie AJA
Heard	September 19, 2014
Judgment	September 19, 2014
Counsel	CJ Hartzenberg SC and LE Combrinck for the appellants.; W Trengove SC for the second to fifth respondents.

Flynote : Sleutelwoorde

Attorney — Rights and duties — Duties — Conflict of interest — Former clients — Common-law rule that legal practitioner with confidential information about former client, precluded from acting against such former client — Whether to develop rule to include 'quasi-clients' or 'informal clients' — Circumstances of present case not warranting development of such rule.

Headnote : Kopnota

The appellants were directors of a number of companies in which the Wishart family owned the shareholding through trusts. Mr Badenhorst, an attorney, acting for BHP Billiton Energy Coal South Africa (Pty) Ltd (Billiton), had instructed two counsel, Mr Suttner SC and Mr Eyles, in arbitration proceedings against one such company, Eurocoal (Pty) Ltd (Eurocoal). Mr Badenhorst later acted for other Wishart companies in matters unrelated to Eurocoal. In one (the Avstar matter) counsel was not briefed; in the others (the Colt and Rietfontein matters), Messrs Suttner SC and Eyles were briefed.

Messrs Badenhorst, Suttner and Eyles, however, withdrew from the Colt and Rietfontein matters when it became clear that Mr Wishart would have to give evidence at pending arbitration hearings. This raised a potential conflict of interest because Billiton had proceeded with a liquidation application against Eurocoal, which meant that they would have had to interrogate Mr Wishart at the anticipated enquiry. The Eurocoal inquiry proceeded in 2009, with Messrs Badenhorst, Suttner and Eyles representing Billiton at the interrogation. When Mr Wishart was summoned to give evidence at the interrogation, his legal representative objected to him being interrogated by them on the basis that they had previously acted in the Avstar, Colt and Rietfontein matters. This objection formed the basis of a yet to be decided High Court application for an interdict restraining Messrs Badenhorst, Suttner and Eyles from participating at the enquiry.

In 2011 a similar application was launched in the Avstar matter after its winding-up was ordered and Billiton had obtained the court's sanction for an enquiry into Avstar's affairs in terms of ss 417 and 418 of the Companies Act 61of 1973. The High Court, dismissing the application, found that none of appellants had ever been clients of the lawyers and that such information as they had was not confidential. The present case concerned an appeal against this decision to the Supreme Court of Appeal.

At common law a legal practitioner who has confidential information about a former client is precluded from acting against such a former client. The appellants did not contest the court a quo's finding regarding confidentiality; they argued that they had been 'quasi-clients' or 'informal clients' of the lawyers. To this end they contended for developing the common law so as to protect former quasi-clients from adversarial litigation conducted against them by their former legal representatives.

Held

Even if our courts, as in England, enjoyed an inherent jurisdiction to restrain lawyers from acting when it would be in the interest of the administration

2020 (3) SA p100

of justice, in the present case the appellants were not themselves clients of the lawyers. The lawyers' client was Billiton, not the appellants. At the heart of a client's right to be protected against a former legal representative taking the other side was the possible misuse of confidential information. What the law sought to do in these situations was to protect a former client of a lawyer from being prejudiced by having that representative, in whom trust had been reposed, and who was armed with information about that client, act against them. That was hardly in issue in this matter. The facts simply did not warrant the application of the principles contended for. (See [40], [44], [46] and [48].)

In this matter the appellants were not clients of the lawyers and they had not disclosed any confidential information to the lawyers. There was no possibility, let alone probability, that the lawyers could use their secrets against them. It was accordingly not necessary, in this case, to find that the common law should be extended in the manner suggested by the appellants. The High Court had correctly found that the application for the interdict against the lawyers had to fail, and accordingly the appeal would be dismissed. (See [49] – [51] and [55].)

Cases cited

Southern Africa

American Natural Soda Ash Corporation and Another v Botswana Ash (Pty) Ltd and Others [2007] 1 CPLR 1 (CAC): referred to

Meter Systems Holdings Ltd v Venter and Another 1993 (1) SA 409 (W): referred to

Robinson v Van Hulsteyn, Feltham and Ford 1925 AD 12: dictum at 21 applied

Wishart and Others v Blieden NO and Others 2013 (6) SA 59 (KZP): confirmed on appeal.

Australia

Kallinicos and Another v Hunt and Others [2005] NSWSC 1181: considered.

Canada

Gainers Inc v Pocklington 1995 ABCA 177 (CanLII): distinguished

McDonald Estate v Martin [1990] 3 SCR 1235: considered.

England

Halewood International v Addleshaw Booth & Co [2000] PNLR 298: considered

Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 (HL) ([1999] 1 All ER 517): dictum at 235C – E applied

Re a Firm of Solicitors [1992] 1 QB 959 (CA) ([1992] 1 All ER 353): distinguished.

United States

Analytica Incorporated v NPD Research Inc 708 F 2d 1263 (7th Cir 1983): referred to.

Case Information

CJ Hartzenberg SC and LE Combrinck for the appellants.

W Trengove SC for the second to fifth respondents.

An appeal from the KwaZulu-Natal High Court, Pietermaritzburg (reported as Wishart and Others v Blieden NO and Others 2013 (6) SA 59 (KZP) per Gorven J).

2020 (3) SA p101

Order

The appeal is dismissed with costs, including the costs of two counsel where so employed.

Judgment

Lewis JA (Maya JA, Willis JA, Swain JA and Mocumie AJA concurring):

[1] The appellants in this matter argued in the High Court and in this court that we should develop the law in relation to legal practitioners acting against former clients. The High Court (Gorven J in the KwaZulu-Natal High Court, Pietermaritzburg) declined to do so as the facts did not support the application of the principles they contended it should adopt. It dismissed their application for an interdict restraining the respondents from examining them in an insolvency inquiry. The High Court nonetheless gave them leave to appeal to this court.

[2] By the time the appeal was heard the first appellant, Mr Grant Wishart (Wishart), had been sequestrated. The trustees of his estate have elected not to participate in the appeal and abide the decision of this court. Counsel for the appellants argued that Wishart still had a residual interest in pursuing the appeal, a matter to which I shall turn after dealing with the merits of the appeal.

The history

[3] The appellants, Wishart, his father, Mr Malcolm Wishart (Wishart Snr), and Mr Shabier Bhayat, are directors and officers of a number of companies owned by the Wishart family through a number of trusts. I shall refer to each of them by name, or as 'the appellants' collectively. They applied to the High Court for an order restraining the respondents, Mr W Badenhorst, an attorney, Mr John Suttner SC and Mr Alan Eyles, the latter two being advocates practising at the Johannesburg Bar, from interrogating the appellants at an inquiry into the business and affairs of Avstar Aviation (Pty) Ltd (Avstar) in terms of ss 417 and 418 of the Companies Act 61 of 1973. I shall refer to the attorney and counsel collectively as 'the lawyers'.

[4] A retired judge, P Blieden J, was appointed to preside over the inquiry. At the instance of BHP Billiton Energy Coal South Africa Ltd (Billiton) he issued a summons against Wishart to appear at the inquiry and disclose specified documents. Subpoenas were also issued against Wishart Snr and Bhayat. At the commencement of the inquiry on 20 July 2007, an attorney representing the appellants, Mr PJ Schoerie, appeared on behalf of the Wisharts and Bhayat and advised that they refused to be interrogated by Suttner and Eyles since they, and Badenhorst who had instructed them, had previously acted for companies of which they were directors or in which they had interests.

[5] After much discussion Judge Blieden ordered that the inquiry continue: he had not been advised of the precise nature of the appellants' complaints; he was appointed only to see that the inquiry was conducted fairly; privilege was not a factor that he was required to take into account

2020 (3) SA p102

Lewis JA (Maya JA, Willis JA, Swain JA and Mocumie AJA concurring)

and the purpose of the inquiry under ss 417 and 418 was to obtain a full explanation about Avstar's activities, but not to make any finding in that regard.

[6] The order prompted the application to the High Court the following day for an interdict (and other relief that is not now relevant) against the lawyers, restraining them from examining any of the appellants at the inquiry. Judge Blieden was cited as the first respondent, in his capacity as commissioner. Billiton was also cited as a respondent, as was the master of the High Court. Only the lawyers have participated in the appeal against the order of the High Court that they not be so restrained. As I have said, the High Court refused the relief sought.

[7] The appellants were not ever clients of any of the lawyers. But, they argued, they had interests in and were variously directors of...