King Woolen Mills Ltd (formerly Known As Manchester Outfitters Suiting Division Ltd & Another V M/s Kaplan & Straton Advocates  EKLR
|Civil Appeal 55 of 1993||16 Dec 1993|
Mathew Guy Muli
Court of Appeal at Nairobi
King Woolen Mills Ltd (formerly known as Manchester Outfitters Suiting Division Ltd) & Galot Industries v M/S Kaplan & Straton Advocates
King Woolen Mills Ltd (formerly known as Manchester Outfitters Suiting Division Ltd & another v M/s Kaplan & Straton Advocates  eKLR
King Woolen Mills Ltd (formerly known as Manchester Outfitters Suiting Division Ltd & another v M/s Kaplan & Straton Advocates
Court of Appeal, at Nairobi December 16, 1993
Civil Appeal No 55 of 1993
(Appeal from the ruling and order of the High Court of Kenya at Nairobi
(Mr Justice Shields) dated 25th February, 1993
in HCCC No 279 of 1993)
Advocate/client – conflict of interest - advocate acting for several parties – whether such advocate can proceed to act for one or more of the parties against the other(s) in a suit involving a matter where he/she was their common advocate.
Advocate/client – retainer – nature of - personal to each client - fiduciary relationship between client and advocate - whether there is a fiduciary relationship between two or more clients of a common advocate.
The appellants sort injunction in the superior court to restrain the respondent from acting in a matter involving the appellants and two other defendants on the grounds that the respondent was a common advocate for all the parties in that suit.
The application for injunction was dismissed by the superior court prompting an appeal. It was argued on behalf of the appellant that the respondents having drawn the loan agreement, the debenture, the legal charge as well as the legal opinion on behalf of the lenders and the appellants were disqualified from acting for the lender in any subsequent litigation or dispute arising from the same loan transaction in which the validity of the loan and security documents were challenged.
The question for determination by the Court of Appeal was whether the respondents having accepted to act for both the appellants and the Acceptances in the loan transaction between the appellants and the London Bank and the acceptances, they were in breach of their fiduciary relationship of client and advocate by representing the lenders in any litigation arising from the said loan transaction in which the validity of the loan and security documents were challenged.
1. Once the retainer is established, then the general principle is that an advocate should not accept instructions to act for two or more clients where there is a conflict of interest between those clients.
2. The retainer created a contractual relationship between the advocate and the client irrespective of whether two or more clients are involved. That is to say that the relationship is not tripartite, each client has a separate retainer relationship with the common advocate.
3. The respondents’ advocates having accepted to act for the appellants, the borrowers and the lenders, in putting together the loan transaction had a duty to the borrower and should not subsequently act for the lenders to enforce repayment of the loan because the advocate had obtained relevant knowledge of the borrower’s financial position when acting for him in connection with the original loan transaction: in these circumstances, he would take unfair advantage prejudicial to the borrowers if he so acts for the lenders because of apparent conflict of interest.
4. The fiduciary relationship created by the retainer between client and advocate demands that the knowledge acquired by the advocate while acting for the client be treated as confidential and should not be disclosed to anyone else without that client’s consent. That fiduciary relationship exists even after conclusion of the matter for which the retainer was created. This principle applies equally where an advocate acts for two or more clients in the same transaction or subject matter because the retainer is specific between the individual client and the common advocate.
5. There exists no fiduciary relationship between the two or more clients of the common advocate.
6. Although the common advocate acting for two or more clients will be able to complete the transaction speedily and save expense by engaging one common advocate; this fact alone is for convenience only and does not affect the general principle that he should not so act or divulge the confidential information received without the consent of the client in the retainer.
1. United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd  KLR 898; [1982-88] 1 KAR 639
2. Radusen v Ellis Munday & Clerke  1 Ch 831; [1911-13] All ER Rep 813
3. Solicitors, Re a firm  1 All ER 353;  QB 959
4. Supashare Retail Ltd v Coward Chance (afirm)  1 All ER 668;  3 WLR 1278
No statutes referred.
Orderly on Solicitors 7th edition page 70
Mr Kamau for Appellants
Mr Huram for the Respondents