3
By including on the legal team, a person who might be a material witness in the principle case, particularly on the issue of the validity
and/or appropriateness of the settlement agreement that, to his knowledge had been concluded with the fourth respondent, the potential
was created of the corruption of a witness’s testimony.
The Tribunal’s Findings
In a careful analysis of the arguments presented by Ansac as outlined above, the Tribunal found that, although Dingley had participated
briefly in the Botash legal team and may have been exposed to ‘without prejudice information’ in relation to the case
as a result of his employment with fourth respondent, Ansac had failed to provide evidence of more than a possibility of harm. In
the Tribunal’s view ‘the possibility of harm is insufficient to found a case for unfairness in our law’.
At this stage it is opportune to refer to the evidence made available to the Tribunal of the content of the negotiations which had
taken place between fourth respondent and Ansac. This evidence proved to be of considerable importance in that the Tribunal found
that it was incumbent on appellants to prove more than a breach of confidentiality ‘in the air’. The content of the negotiations
had not been disclosed to the Tribunal because Ansac had adopted the approach that it would be ‘incompatible with the preservation
of their confidential, without prejudice status’. According to the Tribunal, during the course of his argument, counsel for
Botash invited Ansac and fourth respondent to permit the Tribunal to have sight of the Commission’s file to ascertain that
the documentation indeed contained material prejudicial to Ansac. Ansac replied that they would ‘leave the matter in our hands’.
However the Tribunal recorded that counsel for Ansac had cautioned the Tribunal against adopting the approach of allowing ‘a
judicial peak’ to take place.
He had argued that, if the Tribunal looked at the documents without hearing oral evidence, this would constitute an irregular procedure.
The documentation could not be analyzed out of the context of the negotiations and in particular the oral exchanges that had taken
place. For these reasons, the Tribunal found ‘given Ansac’s stance we were reluctant to take this ‘judicial peak’
at the documents and we have not done so’. The Tribunal found that although Mr Laljith had made claims in general terms concerning
confidentiality, there was in the Tribunal’s view ‘no revelation of what the substance of these is or even the broadest
hint’. The Tribunal noted that by contrast, Dingley characterized the negotiations as ‘guarded’ and suggested that
he had no awareness of the fact that he ‘is now a repository of Ansac’s secrets which he has unwittingly conveyed to
the rival camp’. On the basis that Ansac had not provided sufficient evidential justification for its application, the Tribunal
dismissed it.
I now turn to deal with the three key arguments which Mr Brassey raised in his effort to persuade this court that the Tribunal had
erred in dismissing the application.
Side switching
Mr Brassey submitted that Botash had assigned a person to the case and placed themselves in a position in which advantage might be
derived from his contributions to the legal team which had been deployed to pursue Botash’s case. Webbers had known of Dingley’s
previous participation to a material extent in the proceedings on behalf of fourth respondent, whose interests as a statutory regulator
were manifestly different to those of Botash.
Mr. Brassey attacked the Tribunal’s finding that a ban on side switching only applied in circumstances where an attorney had
acted for a client and then switched to acting against the client in the same matter. In contrast, he contended that the essential
test in the present dispute was whether there existed so significant an identity, specifically of knowledge, interest and object,
between the parties, Dingley left and the party he joined so as to satisfy a reasonable observer that no prejudice whether actual
or potential might be engendered by the switch. In particular, the question arose as to whether Dingley, by switching sides, compromised
a relationship of trust to the prejudice, whether actual or potential, of Ansac as a party to the litigation.
The essential component of this aspect of Mr Brassey’s argument was a distinction that he sought to draw between the position
of the fourth respondent and that of Botash with regard to their respective positions of litigants in the complaint proceedings.
In this connection he referred to an affidavit filed on behalf of fourth respondent by Mark Worsley who said: ‘It is patently
clear that there is a considerable difference between the interests pursued by the Commission and those pursued by an intervening
party’.
Mr. Brassey suggested that it was precisely because of the special status of fourth respondent that Ansac selected it as target for
its efforts at settlement in the knowledge that it could expect a reception that in its fairness and independence would stand ‘in
marked contrast’ to what might be expected from a commercial litigant such as Botash. Mr. Brassey emphasized the statement
made in the founding affidavit of Mr. Laljith that Ansac had revealed its views and attitudes and candidly dealt with the strengths
and weakness of its case, discussed the motives of Botash openly and elaborated to fourth respondent on a range of potential solutions
to the problem raised by the complaint proceedings.
Accordingly, Mr. Brassey submitted that there was a distinct incongruence of interests between Botash and fourth respondent insofar
as the complaint proceedings were concerned. He referred to the conduct of Botash in seeking to prevent a successful settlement of
the complaint between fourth respondent and Ansac. In his view, if both fourth respondent and Botash had been represented by a single
attorney, it was impossible to believe that the attorney would not have felt compelled to withdraw from the matter on the basis of
a conflict of interest.
In support of these arguments, Mr. Brassey cited a series of decisions from the United States of America as support for the general
proposition that an official employed by a regulatory authority will be disqualified from acting on behalf of a party in a suit brought
by or against the authority if: (1) when at the authority whether as a lawyer or otherwise he personally participated in the preparation
or presentation of the suit on behalf of the regulatory authority to a degree that was not merely formal or perfunctory but constituted
a substantial contribution and (2) in circumstances in which there may be prejudice to other parties in litigation or in which such
prejudice appears to exist. See in particular Kessenich v Commodity Futures Trading Commission 221 US App DC 314(DC App, 1982) at [27] – [30].
In Kessenich supra, the applicant lodged a complaint before the Commodity Futures Trading Commission (‘CFTC’) a letter of complaint
was addressed to one Clinton Burr, an attorney employed in the Division of Enforcement of the CFTC. The complaint alleged that there
were certain unlawful activities which had been undertaken in connection with unauthorized transactions in commodity options on Kessenich’s
account with a company called Rosenthal and Company. When no settlement was reached, the complaint was forwarded for adjudication.
During the proceedings the law firm that had previously represented Rosenthal before CFTC was replaced by Rosenthal’s general
counsel, the same Clinton Burr who had previously worked at the CFTC. In finding that Burr should be disqualified from the case,
the court held ‘[O]ur decision rests on consideration beyond the immediate case before us. The integrity, both actual and apparent,
of the agency’s dispute resolution mechanism is essential to the regulatory enforcement scheme created by Congress.’
Mr. Brassey also found support at the other end of the world for his argument; in a decision of the New Zealand Court of Appeal in
Black v Taylor [1993]3 NZLR 403(CA). A solicitor had previously acted for members of family including the deceased plaintiff who brought proceedings
against the estate of the deceased for breach of an alleged contract to leave him by will certain shares. Plaintiff sought an injunction
against the solicitor’s continued representation of the estate on the ground that the solicitor had been privy to confidential
information relevant to the present dispute and hence there existed a conflict of interest. The court found that (at [408]) ‘it
would not be unreasonable for a family member to feel chagrin and concern to find a lawyer who had built up knowledge of that kind
was able consciously or unconsciously to draw on it when acting against that member of the family’. The court found that justice
would not have been seen to be done if when dissension took place within the deceased’s family, the family solicitor was seen
to be acting for one side thereof.
Although these cases are distinguishable on the facts, Mr. Brassey insisted that the principle which was applied in both cases was
applicable to this case, namely as Richardson J had put it in Black supra at 409, there are two key principles to be safeguarded, namely: ‘that knowledge of a client may itself disqualify a practitioner
from acting against that client and that an appearance of impropriety should be avoided’. In the view of Richardson J while
these principles did not impose legal obligations having the force of law, they provided a clear indication of relevant public policy
concerns.
Mr. Brassey sought to apply the principles derived from these cases to contend that, as Dingley had worked on the case for fourth
respondent, he had been privy to Ansac’s thoughts and ideas about the case and he should have been prohibited from putting
this knowledge to the benefit of Ansac’s determined opponent.
Evaluation
As Mr. Trengove, who appeared together with Mr. Chaskalson on behalf of third respondent, submitted, at no stage had Botash, third
respondent or Dingley ever represented Ansac. On the contrary, they have at all times been the adversaries of Ansac. Thus, the cases
cited by the appellants as authority for the argument on side switching are distinguishable from the present dispute. Dingley never
represented Ansac and, if to the extent that there was switching, it was from one adversary of Ansac to another.
Significantly, Ansac accepted that any disclosures to which Dingley may have been privy were disclosures which took place within the
context of settlement negotiations where Ansac understood the risks. It accepted that ‘those members of the Commission who
were exposed to its disclosures could not insulate themselves from what they had learnt and absorbed during the negotiations and
would remain possessed of such knowledge during the further prosecution of the matter’. Whatever was disclosed to the members
of fourth respondent therefore was available to its legal team in the ongoing litigation between the parties. Hence the argument
was made by Mr. Trengove that any question which might be asked by a member of Botash’s legal team could be properly asked
by a member of the legal team representing fourth respondent.
Clearly the side switching cases relied upon by Ansac deal with a lawyer moving from one party/authority to a party which is in an
adversarial or materially different position from that of the former. Thus, in order to utilize the authorities cited in support
of the side switching argument, Ansac is constrained to contend that there is a material structural difference between the respective
positions of the fourth respondent and of Botash. This would then allow for the argument that some form of side switching had taken
place in the present dispute analogous to the facts of the cases cited above.
The motive of Botash in intervening in the complaint proceedings may well be different from that of the statutory regulator established
in terms of the Competition Act to pursue the public interest. I readily accept that Botash is a private institution which has primarily
a private interest at heart and most certainly is not necessarily motivated to act in the public interest
Significantly, Mr. Laljith said the following in his founding affidavit: ‘Botash has no independent cognizable interest in the
outcome of the proceedings. To the extent that it seeks to join with the Commission in the vindication of the public interest, the
Commission is more than capable of discharging that function without Botash’s assistance. To the extent that it seeks, by its
intervention, to bolster the Commission’s efforts in vindicating the public interest, that task can safely be left to the Commission.
What is clear, however, is that there is no prospect of Botash obtaining its own separate relief in the proceedings.’
As Mr. Unterhalter, who appeared together with Mr. Gotz for Botash, contended the fourth respondent seeks relief in the form of a
declaratory order that Ansac’s cartel agreement constitutes a prohibited practice in terms of section 4(1) (b) of the Competition
Act and further seeks the imposition of an administrative penalty. It does not seek an interdict preventing Ansac from continuing
to trade as a cartel in South Africa. Botash however seeks such relief. As Mr. Unterhalter correctly observed, this latter relief
is but a logical extension of that which fourth respondent has pursued to date. The purpose of Botash’s intervention was because
an interdict was not sought although it is competent in terms of section 58(1) (a) (i) of the Competition Act.
Once the relief is viewed with this framework, it follows that the interest of Botash and the fourth respondent in the complaint referral
proceedings are sufficiently complimentary to render the jurisprudence cited by Mr. Brassey in connection with side switching to
be distinguishable from the facts of the present dispute. The facts of this case find no application in the authorities relied upon
by appellants.
Breach of confidentiality
Mr. Brassey submitted that Dingley owed a duty of confidentiality to Ansac flowing from his participation in the settlement negotiations
which were conducted on a ‘without prejudice’ basis.
Ansac’s case on this ground is that Webbers, as lawyers for Botash assigned Dingley to the case and accordingly placed themselves
in a position in which advantage might be derived from his contribution to the legal team in circumstances where he was bound by
statutory and non statutory obligations of ‘utmost’ confidentiality pursuant to which he had become privy to and materially
contributed to the ‘without prejudice’ negotiations in which Ansac made disclosures of a confidential nature. In the
founding affidavit Mr. Laljith describes the basis of the confidential nature of the settlement discussions thus: ‘At the first
settlement meeting, ANSAC stressed that the negotiations were being held in the strictest confidence and without prejudice to its
interests in the complaint proceedings. ANSAC specifically pointed out that the discussions and any documentation created specifically
for purposes of discussing settlement or information provided to the Commission must not be revealed to Botash. The Commission expressly
accepted these stipulations.
These strictures were repeated from time to time in correspondence and at further meetings between ANSAC and the Commission. No one
representing the Commission could have been left in the slightest doubt that the negotiations were not to be divulged without the
consent of ANSAC. Nor could it be doubted that the contents of what was being disclosed could neither be used nor exploited in the
complaint or other litigation.’ This description of events does not appear to be contested by Mr. Worsley who deposed to an
affidavit on behalf of fourth respondent. The Tribunal also appeared to accept that ‘Dingley participated briefly in the Botash
legal team and may have been exposed to without prejudice information in relation to the case as a result of his prior employment
with the Commssion.’ Mr. Brassey submitted that, on this basis, the Tribunal should have found that Dingley was in a position
in which he, whether wittingly or unwittingly, could disclose confidential information without the consent of Ansac. This conclusion
remained true whether the information was indeed confidential when disclosed or whether it retained the status over time. The undertaking
given by fourth respondent covered information which had been provided by Ansac under the umbrella of the undertaking and this remained
true whatever the nature of the information.
Mr Brassey contended that in order to make out a case of disqualification on the basis of confidentiality, all Ansac had to show was:
(1) Information was given either under cover of confidence or that it was in fact confidential; and (2.) Dingley was placed in a
position in which the confidence could be (or might possibly be) imperiled.
Mr Brassey submitted that Dingley was under an obligation not to disclose information that had been given to him in confidence. He
was under an obligation to maintain the ethical integrity of the legal system. By his participation in the legal team of Botash,
he was placed in a position in which his memory might be triggered or in which facts learnt by him might be divulged explicitly,
implicitly or by conduct. Accordingly, his participation in the Botash legal team, which was working on the very case in which he
had been exposed to confidential discussions when employed by fourth respondent, had caused an irretrievable infringment of the integrity
of the legal system. For this reason, a strict test should be adopted to protect the issue of confidentiality and thereby serve to
disqualify Webbers from its further participation in any proceedings relating to the litigation between Ansac and Botash. Mr Brassey
sought to rely upon judgements in Prince Jefri Bolkiah v KPMG (a firm) [1999] 1 ALL ER 517 (HL); Martin v Gray [1991] LRC Comm 789 (SC) , cases which will presently be analyzed.
Evaluation
In order to evaluate this leg of Ansac’s case, it is necessary to examine in some detail the evidence employed by appellants
to justify their case and the comparative law cited in support thereof. In his founding affidavit Mr. Laljith describes the basis
of Ansac’s contention that there existed, at the very least, a potential breach of confidential information:
‘Full disclosure of the contents of the negotiations in this affidavit is obviously
incompatible with the preservation of their confidential, without prejudice status.
The best I can do in this affidavit is to give a general summary of the nature of the
negotiations and the path that they took. Directions will at the appropriate time be
sought from this Tribunal on the manner in and extent to which disclosure should
be made. In the negotiations there were two fundamental issues:
first, whether the complaint referral could be settled informally or whether its
validity and enforceability depended on the approval by the Tribunal of a consent
agreement that, at its most extreme, would have to embody a plea of guilty;
secondly, whether ANSAC Corp was a legitimate joint venture or not, and if not-
whether future trading could be regulated by the settlement and, if so, upon what
conditions (such as off shore trading);
what consequences (including trading prohibitions and penalties) might in
addition be appropriate.
On the first issue, Dingley, in common with the rest of the Commission’s team
engaged in a lengthy debate with the ANSAC team on the basis on which the
matter could be settled. In the course of these discussions, the ANSAC team
candidly expressed its own views on the merits, from a legal point of view, of
each of the contending positions. In these discussions Dingley appreciated that
the status of an unconfirmed settlement agreement was a matter of debate and
controversy and was openly made privy to ANSAC’s understanding of the
strengths and weaknesses of each legal standpoint.’
Laljith then attached to his founding affidavit a chronology of negotiations. Briefly the following was recorded:
On 3 October 2001 the chief legal counsel at the Commission informed Ansac
that a sub-committee was appointed to calculate a possible penalty. During
October 2001 the name of Dingley was mentioned as the person who talked to
the Ansac team regarding administrative penalties. On 28 November 2001 a
meeting took place between members of the Commission and legal
representatives of Ansac in which Dingley was present and in which according
to the chronology ‘Dingley advised what could be addressed in the consent
agreement, discussed possible approaches to the calculation of the penalty’.
On 15 January 2002 a further meeting between the Commission and legal
representatives of Ansac took place. The following was recorded ‘discussions
substantially led by Dingley of settlement options.’ On 7 February 2002 it was
recorded ‘Dingley has “marathon session” presenting his ideas and figures to his
superiors.’ Thereafter Dingley left the employ of fourth respondent.
With these facts in mind, it is possible to examine the key comparative cases which were cited by counsel for the parties to this
dispute. In the light of the importance placed upon the decision of the House of Lords in the Prince Jefri case supra, it is necessary to examine this case in some detail and seek to apply the legal principles outlined therein to the key
facts of this dispute. In Prince Jefri, defendants were a firm of accountants employed as auditors of the Brunei Investment Agency established to hold and manage the general
reserve fund of the Government of Brunei and its external assets, as well as to provide the Brunei government with money managing
services. Plaintiff had been chairman of the investment agency until his removal in 1998. Between 1996 and 1998 plaintiff, acting
in his personal capacity, retained defendant to act for him or one of his companies in litigation in which he was then engaged.
In the course of acting for the plaintiff in that litigation, defendant provided extensive litigation support service of a kind usually
undertaken by solicitors. Pursuant to its duties, defendant was entrusted with or required extensive confidential information about
plaintiff’s assets and financial affairs. When plaintiff was dismissed from his position as chairman of the agency, the Brunei
government commenced an investigation into matters pertaining to plaintiff’s conduct. The government sought to retain defendant
to assist in the investigation. Defendant adopted the approach that it could accept the instruction because it had ceased to act
for plaintiff more than two months previously. He was no longer a client. Adhering to a ‘belts and braces’ approach it
created an information barrier around the department which carried out investigation on behalf of the Brunei government. Plaintiff
had not been informed by the defendants of this decision nor had his consent been sought. He obtained an injunction to restrain defendants
from continuing to work on the investigation. The matter finally reached the House of Lords.
The House of Lords confirmed two fundamental legal propositions in its resolution of the dispute being: (1) there is no absolute rule
of law in England that a solicitor may not act in litigation against a former client; (2) the solicitor may be restrained from so
acting if the restriction is necessary to avoid a significant risk of disclosure or misuse of confidential information which belongs
to the former client (at [526 (d)]). Lord Millett then went on to say:
‘It is in any case difficult to discern any justification in principle for a rule which
exposes a former client without his consent to any avoidable risk, however slight,
that information which he has imparted in confidence in the course of the
fiduciary relationship may come into the possession of the third party and be used
to his disadvantage. Where in addition information in question is not only
confidential but also privileged the case for a strict approach is unanswerable.
Anything less fails to give effect to a policy on which legal professional privilege
is based. It is of overriding importance for the proper administration of justice
that a client should be able to have complete confidence that what he told his
lawyer will remain a secret’ (at 528 c – e). Lord Millett continued:
‘Once a former client has established that the defendant firm is in possession of
information which was imparted to it in confidence and that firm is proposing to
act for another party with an interest adverse to his own in a matter to which
information is or may be relevant, the evidential burden shifts to the defendant
firm to show that even so there is no risk that the information will come into the
possession of those now acting for the other party’ (at 529 d).
On the facts, the court found that the defendant firm had not discharged the heavy burden of showing that there was no risk that information
in their possession which was confidential to plaintiff and which they obtained in the course of a formal client relationship might
unwittingly or inadvertently come to the notice members of defendant firm working for the government of Brunei.
Although this decision did not impose an absolute rule that a solicitor may not act in litigation against the former client, the court
made it clear that, were there any avoidable risk however slight, that if information imparted in confidence in the course of a fiduciary
relationship comes into the possession of a third party which could potentially be used to his disadvantage, the former client must
be protected.
In the present case, Dingley did not act at any time for Ansac. No information was communicated to him pursuant to his having so acted.
Mr Brassey insisted that Dingley had access to information which was confidential and which had only been conveyed to fourth respondent
on the basis of an undertaking of such confidentiality.
Assuming therefore that the relationship between Dingley and Ansac can be rendered equivalent to that of the defendant firm and the
plaintiff in Prince Jefri, the question still arises as to whether the appellant has made any showing with regard to confidentiality of information held by
Dingley which would bring Webber’s within the scope of the approach adopted by the House of Lords in Prince Jefri.
In what amounts to an essential factual determination of the present application, the approach set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 (A) must be considered. Hence, the question arises as to whether the relief should be granted on the basis
of the facts presented by respondent together with the admitted facts in applicant’s affidavit and where it was clear although
not formally admitted, facts that cannot be denied and must therefore be regarded as admitted. Within this context, it is useful
to commence with respondents evidence. Dingley states that he ‘presented the generic model to the first applicant’s representatives
and debated with him the model on a high level, academic basis. It was not necessary for me to have regards to the merits of the
first applicant’s case to do this.’
He further contends that ‘the level of my influence over the development of consensus is pure speculation. It is noteworthy
that to the best of my knowledge and belief the Commission has never adopted my economic model.’ He also says: ‘I have
no reconnection whatsoever of the First Applicant ‘‘revealing its hand’’ during any discussion I had with
its representatives…’ He also did not recall being made a party to Ansac’s ‘confidential strategies and
tactics in relation to their case or to their thoughts and views and any of the relevant documents’.
The question therefore needs to be asked whether Ansac has shown that Dingley was given confidential information, that the information
is still confidential and that the information is relevant to the case.
In its papers, appellants did not set out in anything more than generalization, information which it alleged was confidential. It
argued that it could not do more because this disclosure would further subvert the possibility of it having a fair trial. Without
crafting some approach whereby the Tribunal could have undertaken ‘a judicial peak’ of that which was alleged to be confidential,
it is difficult to see how so drastic a remedy sought by appellant can be granted on the basis of generalized statement. This difficulty
is compounded when Mr. Dingley says in his affidavit:
‘I wish to stress that it was my perception that the Respondents’ representatives
remained guarded at all times during the meetings and discussions. I have no
recollection whatsoever of the First Applicant “revealing its hand” in the sense
suggested, during any discussion that I had with its representatives. If it is being
suggested that I was made party to the Applicants’ confidential strategies and
tactics in relation to their case or to their thoughts and views on any of the
relevant documents, I simply do not remember their representatives ever doing
so. The discussions in which I was involved were about the principles and terms
</