Wishart v The Honourable Mr Justice P Blieden NO and Others

The three appellants (Grant Wishart, Malcolm Wishart and Shabier Bhayat) were directors and officers of various companies in the Wishart family group, including Avstar Aviation (Pty) Ltd which was placed into liquidation. An inquiry into Avstar's affairs was instituted in terms of ss 417 and 418 of the Companies Act 61 of 1973, presided over by retired Judge Blieden. BHP Billiton Energy Coal South Africa Limited (Billiton), represented by attorney Mr Badenhorst and counsel Messrs Suttner SC and Eyles, obtained a summons for the appellants to appear at the inquiry. The appellants objected on the basis that these same lawyers had previously acted for other companies in the Wishart group (Avstar, Colt Mining (Pty) Ltd and Rietspruit Crushers (Pty) Ltd) on unrelated matters. The lawyers had minimal contact with the companies and withdrew when they anticipated a potential conflict. None of the lawyers had ever been in a direct attorney-client relationship with the appellants personally, nor had they received confidential information from the appellants. The appellants nonetheless sought an interdict restraining the lawyers from examining them at the inquiry, claiming they were "quasi-clients" or "informal clients" entitled to protection.

• Whether the common law should be developed to recognize a right for individuals who were never direct clients of a lawyer (but had interests in companies that were clients) to restrain that lawyer from acting against them
• Whether the appellants qualified as 'quasi-clients' or 'informal clients' entitled to the same protection as actual clients
• Whether confidential information is a prerequisite for restraining a lawyer from acting against a former client
• Whether the court has an inherent jurisdiction to restrain lawyers from acting in the interests of the administration of justice, even in the absence of confidential information
• Whether an insolvent (Wishart, who was sequestrated) retains standing to pursue an appeal where the trustees of his estate have elected not to participate

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

The common law does not recognize a right of an individual to restrain a lawyer from acting against him or her where: (1) the individual has never been a client of the lawyer; and (2) the lawyer does not possess confidential information in respect of that individual. The concept of "quasi-client" or "informal client" based on convergence of interests with a corporate client is not recognized in South African law absent circumstances justifying piercing of the corporate veil. The protection afforded to former clients against lawyers acting for opposing parties is predicated on the existence of a prior attorney-client relationship and the possession of confidential information that could be misused. Even if South African law were to develop an inherent jurisdiction to restrain lawyers in the interests of administration of justice (beyond the confidential information requirement), such jurisdiction must be exercised with caution and is not applicable where there was no attorney-client relationship, no confidential information, and countervailing considerations (including the right of parties to choose their legal representatives) weigh heavily against restraint.

The court made several non-binding observations: (1) It reviewed comparative law from England, the United States, Canada and Australia regarding different tests for restraining lawyers, noting the "substantially related" test in the US and the "administration of justice" test in Australia, but did not decide whether to adopt these approaches. (2) The court noted that after termination of the attorney-client relationship, protection against misuse of confidential information would lie in delict, citing Meter Systems Holdings Ltd v Venter 1993 (1) SA 409 (W). (3) The court commented critically on the appellants' conduct, describing the litigation as "vexatious" and stating that the appellants made unfounded allegations of impropriety against the lawyers, casting shadows on their professional conduct without foundation. (4) The court noted that Wishart's objection to being examined in the Avstar inquiry was "cynical" given that he had accepted his counsel's advice two years earlier that there was nothing improper about being examined by the same lawyers in the Eurocoal inquiry. (5) The court observed that the lawyers acted entirely properly by withdrawing from the Colt and Rietspruit matters when they anticipated a potential conflict of interest.

This case is significant in South African law for confirming that the common law protection against lawyers acting for opposing parties is limited to situations involving former direct clients and confidential information. The court declined to develop the common law to recognize "quasi-client" relationships or to adopt a broader "convergence of interests" test. The judgment reinforces the principle in Robinson v Van Hulsteyn Feltham and Ford 1925 AD 12 that the heart of a client's protection against a former legal representative is the possible misuse of confidential information. It also confirms that countervailing considerations - including a client's right to choose legal representation and a lawyer's right to practice - must be weighed against any extension of restraint principles. The case provides guidance on when corporate entities and their shareholders/directors may be treated as separate for conflict of interest purposes, reaffirming the corporate veil principle. It also clarifies the limited standing of insolvents under s 23(6) of the Insolvency Act to pursue matters that affect their estate rather than their status.