Court dismisses fraud claim against advocate, ruling formal appearance for opponent does not preclude later representation.

[*110] 1980 April 17

(PIKIS, P.D.C.)

IN THE DISTRICT COURT OP LARNACA

Antonis Georghiou Mouzouris and Another,

Plaintiffs,

v.

Andreas L. Haviaras,

Defendant.

(Action No. 1452/78).

Advocates - Advocate and client - Liability of advocate to client for fraud and negligence - Moral estoppel - Formal appearance of advocate on behalf of opponent - Whether it precludes him from acting for the other party - Rule 11 of the Advocates Conduct and Etiquette Rules, 1966.

Plaintiffs in person.

M. Vassiliou, on behalf of G. Mitsides, for the Defendant.

JUDGMENT

The following judgment was delivered by:-

PIKIS, P.D.C.: The plaintiffs, a couple of [*111] Xylophagou, were parties to litigation involving both or either of them and a certain Loutfik Chopurian referred to as the Armenian in these proceedings. It appears they handled the litigation personally harbouring, in the words of plaintiff 1, Mr. Antonis Mouzouris, a deep suspicion against advocates of the Cyprus Bar whom he accused collectively of dishonesty. It is common ground that at some stage the plaintiffs or either of them had recourse to the defendant, an advocate of Nicosia, for advice in circumstances and for purposes that are the subject of dispute.

It is the case for the plaintiffs haphazardly defined in the statement, of claim that the defendant is guilty of fraudulent conduct and seek to recover (a) an amount of £60 paid to the defendant for his services, (b) and amount of £70 that plaintiffs are liable to pay for the dismissal of Actions 248/78 and 793/78, (c) an amount of £250, the expense necessary for instituting fresh actions apparently grounded on the same facts as the aforementioned two actions and lastly (d) an amount of £380 and any additional sum that the Court may order the defendant to pay by way of damages.

In the body of the statement of claim they accuse the defendant of cheating them and maintain that he agreed to represent them although acting for their opponent, his motive being to carry out, in their words “espionage” on the part of their adversary. One is led to infer from their ill defined averments that defendant, in the course [*112] of perpetrating his fraudulent plan to aid their adversary, he allowed them to appear unrepresented in one or more actions resulting in the dismissal of their cases, causing them damage as earlier stated.

The defendant denied in his defence every suggestion of fraudulent conduct and the various charges of the plaintiffs. In his contention plaintiff 2 applied to him for advice and his sole agreement with her was to investigate their case for which he charged her £60. Before analysing the evidence I propose to examine the legal implications of the case for plaintiffs, particularly the liability in law of an advocate to his client for fraud and negligence.

Liability of an Advocate to his Client for Negligence and Fraud.

The profession of an advocate is an old and honourable one closely associated throughout the ages with the administration of justice and the protection of citizen’s rights under the law. In England wherefrom our legal system mainly originates the legal profession is divided into two branches: solicitors and barristers. The former are primarily concerned with the preliminary stages of litigation and the latter with the final stages of litigation including appearance before the Courts for airing the case before the Courts of the land. The dichotomy between the two branches of the legal profession in England is not as absolute as it appears at first sight for there are areas where both are competent to operate notably with regard to [*113] the settlement of pleadings and cases where solicitors are allowed to appear in Court.

It is well settled that a solicitor is bound by a term implied in the contract of retainer to show proper care and skill in the handling of his client’s case and may be liable in damages if his services fall below the expected standard. Also he is liable in tort under the principle formulated by the House of Lords in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. (1963) 2 All

E.R. 575 for professional negligence. (See Midland Bank Trust Co. Ltd. v. Hett, Stubbs and Kemp (1978) 3 All E.R. 571) Inevitably there is

much overlapping between liability in contract and tort, the result being that a solicitor failing to show proper care or failing to exercise the requisite skill in the transaction of his client’s affairs is liable for damages. A barrister holds a special position under the English system of justice where he is simultaneously expected to protect the interests of his client and see that justice is done. It would be impossible to discharge this dual duty unless protection from liability is granted at least with regard to the discharge of that part of his functions where this duality of duty is prominent. Traditionally he was regarded as altogether immune from liability to his client for the discharge of every part of his duties. This position was questioned in the wake of the aftermath of Hedley Byrne (supra) and the House of Lords was called upon twice to consider the bounds of the immunity of a barrister under the English legal system, [*114] notably in the cases of Rondel v. Worsley (1967) 3 All E.R. 993 and Saif Ali v. Sydney Mirchell & Co. (1978) 3 All E.R. 1033. The House of Lords discarded the view that a barrister’s immunity emanates from his inability under the law to sue for his fees, a narrow legalistic notion, and held that his immunity is based on grounds of: public policy, especially the need to rid a barrister from deflections such as a possible liability to his client in the discharge of his all important duties to see that justice is done, that associate him organically with the administration of justice. But his immunity from a suit for negligence is not absolute and it is limited to trial and such pretrial work so intimately connected with the conduct of the cause in Court that it can fairly be said to amount to preliminary decisions affecting the way that the case will be conducted when it comes to a hearing. The House took pains to stress that the immunity of a barrister in this area is an exception to the principle that a professional man who holds out himself as qualified to practise a given profession is under a duty to use reasonable care and skill. Therefore one can validly argue that there is no room for the extension of the area of immunity, the trend being to confine it within its proper limits.

In Cyprus following the Continental tradition on the subject the two branches of the profession are fused into one and an advocate carries out the duties of both a solicitor and a barrister. The rules of etiquette regulate the relationship of advocate and client, and impose exacting [*115] standards; of conduct on advocates. (Advocates Rules of

Etiquette (1966) Official Gazette supplement 3 p. 1327.) The rules are designed to maintain the honourable tradition of

the profession in the continuance of which not onlyindividual litigants but the public at large and society as a whole has a vital interest. Breach of these rules does not give rise to a cause of action but only exposes an advocate to disciplinary punishment. Therefore liability of an advocate to his client must be pegged elsewhere, that is on the general principles of the common law. And inasmuch as an advocate, like every professional man, is under a duty to show proper care and skill in the exercise of his profession an advocate is liable, if his professional services fall short of the requisite standard and likewise he may be liable in contract, for in every agreement engagement of the. services of an advocate, whether oral or written, an implied term should be read therein that an advocate will use proper care and skill in the discharge of the affairs of his client. The same compelling reasons exist in Cyprus as in England for limiting the liability of an advocate to pretrial acts or omissions and acknowledging immunity with regard to acts or omissions in appearing before the Court and such pretrial work fairly regarded as an immediate prelude thereto. Any other approach might compromise an advocate’s duty to the Court to ensure that justice is done.

It is a moot point whether the immunity from liability of a barrister operating within the above [*116] defined sphere is absolute or relative exempting him only from liability for negligence. The ground has not been cleared by any decided case. However it appears to me as a matter of principle that his immunity cannot extend to acts of fraud for no grounds of public policy car, validly be invoked to shield an advocate from fraudulent conduct. It is well settled that fraud vitiates a

judgment or decree and an order founded on fraud is a nullity. (See Shedden v. Patrick (1854): R. v. Saddlers Co. (1863) cited in

Kerr On Fraud and Mistake , 7th edition , p.416.) Indeed it seems that no rule of evidence can be set up to bar the disclosure of fraud and this was decided to be the case with regard to to professional privilege. (See R. v. Cox, 14 Q.B.D. 153; R. v.

Downer, 14 Cox 486; Re Arnott, 60 L.T. 109; Postlethwaite v. Rickman, 35 Ch. 722; R. v. Smith, 11 Cr. App. R. 229, 233 - 234; Williams v. Quebrada Ry. (1895)

2 Ch. 751 .) In my opinion an advocate cannot claim immunity from a legal suit based on fraud for any part of his work. We may note that wide ranging damages may be awarded in an action for frauds including damages for mental and physical suffering. (Shelley v. Paddock (1978) 3 All E.R, 179.)

The facts

Mr. Antonis Mouzouris gave evidence in support of the case for the plaintiffs and the defendant testified in his defence. According to Mr. Mouzouris the defendant approached him and his wife and offered his services to help them find an honest advocate who would defend their rights in Court. Thereafter the plaintiffs had a number of [*117] communications with the defendant at Nicosia and Xylophagou so that defendant would either help them, according to Mr. Mouzouris, secure the services of an honest advocate or perhaps himself undertake their brief.

It is not altogether clear from the evidence of Mr. Mouzouris what is the precise nature of his complaint against the defendant, that is whether the alleged default lay in defendant’s failure to secure the services of another advocate or personal default in handling the brief of the plaintiffs, Another fact that remained obscure is the right of plaintiff 1 to maintain these proceedings for in his evidence it was a brief of plaintiff 2 that was assigned to him. In fact Mr. Mouzouris alleged that their understanding was that defendant would exert his best endeavours for the the promotion of the rights of plaintiff 2 in Action 245/78 where defendant 1 was sued as a co-defendant with a certain Chopurian.

There is total lack of evidence to support the allegations of the plaintiffs that losses allegedly suffered by the plaintiffs referred to in the statement of claim, other than the payment of £60 to the defendant, are directly or indirectly connected with the alleged default of the defendant. Moreover the allegation of plaintiffs that defendant was previously acting for Mr. Chopurian or that defendant accepted a brief from the plaintiffs in order to engage in espionage on behalf of their opponent are not supported by any evidence and they carry their case no further than the realm of suspicion.

The defendant firmly denied charges of impropriety and disputed plaintiffs’ allegations as to the circumstances [*118] under which he was retained. In his contention following formal appearance he made on behalf of Mr. Papaphilippou, the advocate of the aforesaid Chopurian, he was approached by plaintiffs who sought his advice about a case of plaintiff 2. He agreed to see them with a view to investigating her case. A meeting took place at his office at Nicosia and other meetings followed at Xylophagou in the course of which it was disclosed to defendant that plaintiff 2 had a pending suit, namely Action 245/78.

The defendant, having studied the case of plaintiff 2, advised for the withdrawal of Action 245/78 with a view apparently to raising a fresh action. At the same time the plaintiffs were asked to sign a retainer for the engagement of defendant’s services. In defendant’s contention plaintiff 2 ceased thereafter every communication with him and never signed the retainer suggested by defendant. Thus their relationship came to an end. The defendant charged in all £60, including travelling expenses for trips to Xylophagou, a fee that does not appear to be excessive, if defendant’s evidence is accepted, having regard to the criteria listed in regulation 20 of the Rules of Etiquette regulating the fee that may be charged for legal services.

Having given careful consideration to every aspect of the case I accept the evidence of the defendant and dismiss charges of impropriety raised against him. It was not improper on his part to accept a brief from plaintiff 2 or indeed from anyone of the plaintiffs for at no time had he acted in any real sense for their adversary.[*119] Formal appearance on behalf of an opponent, especially when intended to facilitate a fellow advocate, as in this case, does not raise any obstacle to accepting the case of the other party. Rule 11 of the Rules of Etiquette defines the circumstances giving rise to a moral estoppel preventing an advocate from acting for a party. Such estoppel arises either where a client makes disclosure to an advocate relevant to a case, whereupon he cannot act for his opponent without the consent of his former client or where acceptance of an opponent’s case would place the advocate in a moral dilemma.

For all the above reasons the action is dismissed with costs, Ord. 59, r.3 of the Civil Procedure Rules having no application where an advocate is sued as a defendant.

Action dismissed with costs.