[1927] EACA 45

### ORIGINAL CIVIL.

#### Before PICKERING, J.

## In the matter of THE RULES OF COURT (LEGAL PRACTITIONERS (No. 3 of 1926)

#### $and$

# In the matter of MR. A. AN ADVOCATE of the Supreme Court. C. C. $175/1927$ .

### Champertous agreements.

Held: - That for an advocate of this Colony entering into a cham-<br>pertous agreement constitutes professional misconduct within the Legal Practitioners Rules, 1926.

ORDER.-Early in 1926 one F. P. Dumasia wished to sue the British East Africa Corporation and on the 15th February he entered into an agreement with Mr. A, an advocate practising in the Courts of this Colony which was reduced to writing in the following form. "I hereby engage Mr. A in connexion with a dispute regarding shamba shamba [sic] at Sagala Voi, now in the name of Habib Nanji. A sum of one thousand shillings will be paid out of the monies recovered from B. E. A. Corporation. A sum of Sh. 100 has been paid on the 5th November for petty A sum of Sh. 300 (three hundred shillings) is payable for $\quad\text{work.}$ actual expenses in any event. You have now to pay me Sh. 245 only." The document was signed by both the parties to the agreement. It is clear that under the arrangement made, in return for a promise to render professional service. Mr. A acquired an interest in the subject matter of the litigation; and for that reason the agreement both under our local rules and at common law was void and unenforceable. As was pointed out by Lord Campbell, C. J., in the course of his judgment in the case of Simpson v. Lamb, the Statutes of Westminster restrained the purchase of property in suit particularly by persons concerned in the administration of justice, and the English Courts have repeatedly declared that no attorney may be permitted to purchase anything in litigation, of which litigation he has the management; because such a purchase is against the policy of the law.

In this application the Court has been moved to suspend Mr. A or strike his name off the roll of advocates on the ground that by entering into the agreement referred to he was guilty of professional misconduct. In reply to the argument put forward on behalf of the Attorney General Mr. A has contended that the promising of professional services in exchange for an interest in the subject matter of the suit does not constitute maintenance

and champerty. I am unable to distinguish between the purchase of an interest by undertaking the conduct of a suit and a similar purchase by undertaking to pay necessary disbursements. In the case of Earle v. Hopwood (9 C. B. (N. S.) 570) Earle, C. J.. said "The contract would have been directly in violation of the laws against maintenance if the stipulation had been that the plaintiff, as attorney in the suit, in consideration of his advancing the funds necessary for carrying on the litigation should receive a portion of the proceeds or property to be recovered." In the case before me Mr. Dumasia provided the monies necessary for the payment of out-of-pocket expenses whilst Mr. A undertook the conduct of the suit. In return for that undertaking he acquired one thousand shillings out of any amount recovered. It was not suggested before me that this sum had been agreed upon as representing reasonable remuneration to Mr. A; and I feel unable to accept the suggestion that liberality was the motive which caused him to arrange these terms. In my opinion he maintained this suit in return for a portion of the proceeds. The agreement is silent as to payment for work done. Lord Coke wrote "First to maintain to have part of the land, or anything in plea or suit; and this is called Cambipartia, champerty." In my opinion Mr. A entered into a champertous agreement. I do not read the document as declaring that Mr. A's fee for professional services has been fixed at Sh. 1,000 and restricting his right for payment to recourse against a named fund. Such an agreement though probably void under Ruels of Court No. 2 of 1916. Rule 4 $(a)$ , would not necessarily be champertous.

It has further been suggested that entering into a champertous agreement does not constitute misconduct within the Legal Practitioners Rules No. 3 of 1926. Although no reported case has been cited to that effect I have no doubt but that the Attorney General is right in contending that champerty by a practising advocate should be regarded as misconduct. Maintenance and champerty are indictable offences at common law. The Statutes of Westminster extended the prohibition of champerty to all persons, and by the Statute 33 Ed. 1 Cap. 3 three years imprisonment with fine was inflicted on those who "shall be attained of such emprises." In the course of his judgment in the case of Wademan v. The Duchess of Rutland the Lord Chancellor speaking of maintenance said "In the first book you open upon the subject (one naturally looks into Hawkins) it is stated to be either in pais or by prosecuting suits. Maintenance in pais is punishable by indictment. Maintenance by prosecuting suits, without distinguishing what suits, is punishable by an action by the party grieved also; and that is an action at common law. Statutes prohibiting particular species of maintenance add penalties; but it is laid down as a fundamental authority that maintenance is not malum prohibitum but malum in se; that parties shall not by their countenance aid the prosecution of suits

of any kind, which every person must bring upon his own bottom and at his own expense." Numerous passages could be cited from later judgments where champerty has been referred to by Judges as "wholly illegal and contrary to public policy" and an. " offence."

Finally Mr. A submitted that since the English laws of maintenance and champerty are not of force as specific laws in India, and further because the Indian Contract Act which has been applied to this Colony does not specifically refer to champerty in section which purports to declare what dealings are against public policy, he had reasonably come to the conclusion that the agreement of the 15th February could not in this country constitute misconduct. Upon this point I accept his assurances of good faith and recognize that in the absence of a reported decision the question raised by the Attorney General was not wholly free from doubt. The Indian Contract Act is however a codifying act only and does not purport to be an exhaustive statement of the subjects with which its compilers dealt. The act must in this Colony be read along with the older English Statutes of general application and the common law.

In the circumstances I am of opinion that upon this application it is unnecessary to do more than to declare that for an advocate of this Colony, entering into a champertous agreement constitutes professional misconduct within the Legal Practitioners Rules, 1926.

There will be no order.