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2023 MarsdenLR 1867
HIGH COURT MALAYA KUALA LUMPUR
SALUTICA ALLIED SOLUTIONS SDN BHD – Appellant
Versus
APPLE MALAYSIA SDN BHD – Respondent
[Civil Suit No: WA-22IP-1-01-2022]
The mere familial relationship of counsel with parties does not warrant disqualification unless a compelling conflict of interest is demonstrated.
Headnote:(A) Legal Profession (Practice & Etiquette) Rules, 1978 - Rules 3, 5(a), and 27(a) - Application to disqualify legal representation - Dismissal of the Defendant's Application to bar the Firm from representing the Plaintiff due to lack of conflict of interest - The Plaintiff's choice of legal representation is respected unless compelling reasons are shown. (Paras 5-6, 20-24)
(B) Conflict of Interest - The mere familial relationship of counsel with parties involved does not automatically warrant disqualification - The court must ensure that the representative's independence is maintained for the administration of justice. (Paras 10-12, 19)
(C) Costs - Costs ordered to be paid forthwith due to the nature of the application causing loss of trial dates and unnecessary delay. (Paras 25-32)
Facts of the case:
The Plaintiff claims patent infringement against the Defendant, who counters with a claim for invalidation of the patent, citing lack of novelty and inventive steps. The Defendant sought to disqualify the Plaintiff's counsel based on familial ties and financial interests.
Findings of Court:
The court found no grounds for disqualification of the Firm or its members, emphasizing the importance of the Plaintiff's choice in legal representation and the lack of any direct pecuniary interest in the patent by the Firm.
Issues: The main issues included whether the Firm's representation posed a conflict of interest and the validity of the reasons for disqualification.
Ratio Decidendi: The court ruled that the Defendant failed to demonstrate sufficient grounds for disqualification, affirming that a litigant's choice of counsel should not be interfered with without compelling justification.
Result: Defendant's Application dismissed with costs to be paid forthwith.
| Table of Content |
|---|
| 1. plaintiff's patent infringement claim and defendant's counterclaim. (Para 1 , 2 , 3 , 4) |
| 2. defendant's basis for disqualification of plaintiff's counsel. (Para 5 , 6) |
| 3. inapplicability of rule 3 regarding embarrassment. (Para 7 , 8 , 9 , 10) |
| 4. independence of counsel not compromised. (Para 11 , 12 , 13) |
| 5. rule 27 and the need for direct pecuniary interest. (Para 14 , 15 , 16) |
| 6. defendant's failure to demonstrate grounds for disqualification. (Para 19 , 20) |
| 7. judicial discretion in disqualifying counsel. (Para 21 , 22) |
| 8. court's decision to dismiss the defendant's application. (Para 24) |
| 9. order for costs to be paid forthwith. (Para 25) |
| 10. reasons for ordering costs due to trial disruption. (Para 26 , 27 , 28 , 29 , 30 , 31) |
Introduction
[1] The Plaintiff's claim against the Defendant is that the Defendant has infringed Claims 1 to 15 of its Patent. The Defendant has counterclaimed for an invalidation of Claims 1 to 15 of the Patent on the grounds that the invention is not novel and lacks inventive steps.
[2] The Plaintiff has at all times been represented by a particular legal firm ("the Firm"). One of the members of the team of counsel from the Firm acting for the Plaintiff is Joel Lim ("JL"), an Advocate & Solicitor, who founded the Firm.
[3] Just days before the trial of the action was to take place, the Defendant filed an application ("Defendant's Application"):
(i) to bar all advocates and solicitors practicing in the Firm from appearing or acting for the Plaintiff in this action and in any proceedings arising from this action; and
(ii) to disqualify and discharge the Firm from acting for the Plaintiff in this action and in any proceedings arising from this action.
[4] I dismissed the Defendant's Application with costs to be paid forthwith. This Judgment contains the reasons why.
The Defendant's Application
[5] The basis for the Defendant's Application is placed entirely on JL:
(i) JL is a shareholder and alternate director in a company called "Salutica Berhad" ("Salutica Berhad"), of which the Plaintiff is a wholly-owned subsidiary;
(ii) JL's father is the Senior Executive Director and a shareholder of Salutica Berhad and a director of the Plaintiff;
(iii) JL's brother is the Managing Director, CEO and a shareholder of Salutica Berhad as well as the CEO of the Plaintiff; and
(iv) JL founded the Firm and JL's spouse is also a member of the Firm.
[6] Based on those links, the Plaintiff contends that JL, the Firm and all members of the Firm should be barred/disqualified from any involvement in this action or in any proceedings arising from this action because:
(i) Rules 3, 5(a) and 27(a) of the Legal Profession (Practice & Etiquette) Rules, 1978 ("the Rules") prevent them all from doing so:
(a) JL has a direct pecuniary interest in the Plaintiff by virtue of his shareholding in Salutica Berhad;
(b) JL has a familial relationship with some of the senior officers of Salutica Berhad and the Plaintiff;
(ii) the other partners and legal assistants of the Firm have a close and proximate relationship with JL, report to JL and are compelled to abide by his directions; and
(iii) the disqualification of the Firm is to prevent a conflict of interest and any compromise in the parties' interests.
Rules 3, 5(a) And 27(a) Of The Rules
[7] These rules respectively provide:
"Rule 3. Advocate and solicitor not to accept brief if embarrassed.
(a) An advocate and solicitor shall not accept a brief if he is or would be embarrassed.
(b) An embarrassment arises:
(i) where the advocate and solicitor finds he is in possession of confidential information as a result of having previously advised another person in regard to the same matter;
(ii) where there is some personal relationship between him and a party or a witness in the proceedings.
Rule 5. No advocate and solicitor to accept brief if difficult to maintain professional independence.
(a) No advocate and solicitor shall accept a brief if such acceptance renders or would render it diffi
