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2012 MarsdenLR 480

HIGH COURT MALAYA PULAU PINANG
TANJONG MARINA MANAGEMENT SDN BHD – Appellant
Versus
PENANG PORT SDN BHD – Respondent
[Originating Summons No: 24-672-04 Of 2012]



Legal professionals must avoid conflicts of interest; a partner's dual role as an executive director disqualifies their firm from representing the client to uphold public confidence in the justice system.

Headnote:(A) Legal Profession Act 1976 - Legal Profession (Practice and Etiquette) Rules 1978 - Disqualification of legal representation - Defendant's application to disqualify the law firm due to conflict of interest where a partner is an executive director of the plaintiff company - Court found clear evidence of potential conflict compromising professional independence and integrity of legal representation. (Paras 1, 6, 12-15)

(B) Conflict of interest - Firm representation rules - Rules disallow advocate from representing a party in which they have direct pecuniary interest - Court determined that partners and assistants of the advocate are similarly disqualified. (Paras 6, 12)

Facts of the case:
The defendant applied for the disqualification of the firm of advocates representing the plaintiff on the basis that a partner is also an executive director of the plaintiff and involved in the dispute. (Paras 1-3)

Findings of Court:
The court established a direct conflict of interest and that allowing the firm to represent the plaintiff would compromise perceived impartiality, impacting public confidence in justice. (Paras 6, 12-15)

Issues: Whether the partner's dual role created a disqualifying conflict of interest for the entire firm in representing the plaintiff. (Paras 12-15)

Ratio Decidendi: The court emphasized that permitting the firm to represent the plaintiff would compromise the integrity of the judicial process and the appearance of justice. Inherent jurisdiction allows the court to disqualify representatives to maintain public confidence in legal processes. (Paras 12-15)

Result: The application to disqualify the law firm was granted with costs. (Paras 17)

[1] Enclosure 8 is filed by the defendant to disqualify or forbid the firm of advocates and solicitors, Messrs BH Lawrence & Co from representing the plaintiffin all further proceedings in this action under the inherent jurisdiction of the court.

[2] The principal ground of the defendant is that one of the two partners in the firm of Messrs BH Lawrence & Co namely Mr BH Lawrence is an executive director of the plaintiff who is actively involved in the transactions and the dispute between the plaintiff and the defendant herein. Affidavit in support of this originating summons filed against the defendant and all other affidavits filed in all proceedings herein were affirmed by BH Lawrence as the executive director of the plaintiff. The defendant alleged that the involvement of Messrs BH Lawrence & Co in this action will vividly raise a conflict of interest as the legal firm has the direct pecuniary interest since its partner is an executive director who has pecuniary interest in the plaintiff.

[3] The defendant alleged and submitted that the representation of Messrs BH Lawrence & Co for the plaintiff in this action contravenes rr 3, 4, 5(a), 7(b), 27, 28, 29 and 32 of the Legal Profession (Practice and Etiquette) Rules 1978 ('the LPR') under the Legal Profession Act 1976 ('the LPA ').

[4] The main contention of the plaintiff is, inter alia, the reliance on r 6.04 of the Bar Council Rulings which states that a law firm may act for one of its partners, consultants or legal assistants in respect of a personal claim by or against that partner, consultant or legal assistant and r 6.08 of the same Bar Council Rulings which plaintiff submitted that an advocate and solicitor who is a director of a company can act on behalf of his company.

FINDINGS OF court

[5] The various rules under which the plaintiff is alleged to have contravened are rr 3, 4, 5(a), 7(b), 27, 28, 29 and 32 of the LPR and they are reproduced below for ease of reference:

(a) r 3 (a) provides that an advocate and solicitor shall not accept a brief if he is or would be embarrassed;

(b) r 4 states that no advocate and solicitor shall accept a brief in a case where he knows or has reason to believe that his own professional conduct is likely to be impugned;

(c) r 5(a) states that no advocate and solicitor shall accept a brief if such acceptance renders or would render it difficult for him to maintain his professional independence or is incompatible with the best interest ofthe administration of justice;

(d) r 7(b) provides that no advocate and solicitor may accept the position of an executive director or executive secretary of a company without the express consent of the Bar Council;

(e) r 27(a) states that an advocate and solicitor shall not appear in any matter in which he is directly pecuniary interested;

(f) r 28(a) says that an advocate and solicitor shall not appear in court or in Chambers in any case in which he has reason to believe that he will be a witness in respect of a material and disputed question of fact, and if while appearing in a case it becomes apparent that he will be such a witness, he shall not continue to appear if he can retire without jeopardizing his client's interests;

(g) r 29 provides that except when essential to the ends of justice or as to merely formal matters, an advocate and solicitor appearing in any cause shall not testify in court on behalf of his client only in that cause; and

(h) r 32 expresses that the feeling existing between clients shall not be allowed to influence counsel in their conduct and demeanour towards each other or towards parties and their witnesses in the case.

[6] In so far as all the Rules cited above except for r 7(b), if BH Lawrence were to appear personally for the plaintiff herein when he himself is an executive director of the plaintiff and is directly involved in the whole dispute of the parties in this case, the elements of the direct conflict of interest and the probable embarrassment, the inability to maintain the profe

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