1. Lim Kien Seng v 1. Lim Kai Hee (D-24NCC-193-2010)

1.

LIM KIAN PEET …PLAINTIF-PLAINTIF

1.

2.

3.

LIM PENG YAN …DEFENDAN-DEFENDAN DI HADAPAN YA KHADIJAH BINTI IDRIS PESURUHJAYA KEHAKIMAN 2 GROUNDS OF JUDGMENT Introduction [1] The former solicitor for the plaintiffs filed two sets of Bills of Costs on solicitor and client basis. The said bills were taxed by the learned Senior Assistant Registrar (SAR). Both the former solicitor and the Plaintiff appealed to Judge in Chambers against the decision of the learned SAR. Aggrieved by the decision of this court, the plaintiffs appealed. Background [2] In 2005, the plaintiffs Lim Kien Seng and Lim Kien Peet (“Former Clients”) engaged the legal services of Tetuan K. Mano & Associates (“Former Solicitor”) to act for them in this action and several other legal proceedings initiated by Lim Kien Seng and Lim Kien Peet or against them by various third parties. The legal proceedings relate to a family dispute in relation to the individual and commercial interests of the Lim Family. Via an undated Letter of Undertaking (“LoU”), the Former 3 Clients undertake and guarantee the payment of the Former Solicitors’ legal fees and costs. The LoU will be discussed shortly. [3] On 16 June 2010, the Former Solicitor filed on behalf of the Former Clients Saman Pemula D-24NCC-193 Tahun 2010 (“2010 Originating Summons”) seeking the following relief –

that the Defendants be restrained from breaching the Consent Order dated 3 September 2009;

that the Defendants as Shareholder / Directors be restrained from dissipating the assets of Lim Yee Teck Realty Sdn Bhd in any manner whatsoever until the commencement of the members Voluntarily Winding Up of Lim Yee Teck Realty Sdn Bhd pursuant to the Court Order dated 3 September 2009; and

that the Defendants do strictly comply with the terms of paragraph (ii) of the Court Order dated 3 September 2009. [4] On 17 June 2010 the former solicitors filed an ex-parte application (enclosure 4) to seek interim injunction pending disposal of the 2010 Originating Summons. The said application was fixed for hearing on 15 July 2010. Upon the request of the Former Solicitors, the said 4 application was fixed for hearing on 22 June 2010. However, when the said application came up for hearing on 22 June 2010, the same was withdrawn. [5] The 2010 Originating Summons was fixed for case management on 1 July 2010 and was postponed to 22 July 2010 to enable the plaintiff to serve the said summons on the defendants. However there were no record what transpired on 22 July 2010. On 15 July 2010, the former solicitors requested another date to enable them to file an application for substituted service. On 29 July 2010, on the instruction of the Former Clients, the Former Solicitors withdrew the 2010 Originating Summons. Thus, the said Originating Summons was struck out. [6] In 2011 the Former Clients terminated the services of the Former Solicitor. The Former Solicitor then serve its invoices for the legal services rendered. As no payment were made the Former Solicitor filed an originating summons WA-17D-47-11/2016 (“2016 Originating Summons”) and obtained an order on 19 June 2017 for the Bill of Cost to be taxed on solicitor and client basis. In July 2017 the Former Solicitor filed the following – 5

Notice of Taxation (enclosure 6) and Bill of Cost (enclosure 7) in respect of Lim Kien Seng; and

Notice of Taxation (enclosure 8) and Bill of Cost (enclosure 9) in respect of Lim Kien Peet. The items and the amount stated in both the Bill of Cost are identical. As to the quantum, the getting-up fees and out of pocket expenses claimed in each of the said bill is RM 50,000.00 and RM 20,367.00 respectively. [7] The Former Clients were directed by the learned SAR to served the marked copy of the Bill of Costs informing their objections by 9 August 2017. The Former Client did not comply with such direction. At the hearing before the learned SAR, the Former Solicitor raised a preliminary objection and argued that since there is no objection from the Former Clients, the Bills of Costs ought to be allowed in full. Based on the Grounds of the learned SAR (attached as Annexure 1 to the Former Solicitor’s written submission enclosure 15) the preliminary objection was dismissed as the learned SAR was of the view that the Former Solicitor was not prejudiced and the learned Registrar proceeded to conduct the taxation on the basis that the whole Bill of Costs is disputed. 6 [8] Both the Bills of Costs was taxed by the learned SAR who awarded the following costs –

getting up fee of RM 10,000.00 for each client;

total cost for disbursement (item 1 – 29) RM 2,195.00;

total Bill of Costs is subject to GST 6%;

costs of RM 6,000.00; and

interest of 5% to be calculated from the date of withdrawal of the OS. The Former Clients and Former Solicitor appealed against the order of the learned SAR. [9] For the Former Clients, the following Notices of Appeal was filed –

enclosure 10 filed by the administrator of Lim Kian Peet’s estate; and

enclosure 11 filed by Lim Kian Seng. In both enclosures 10 and 11, the appeal is stated as against the following – 7

getting up fee of RM 10,000.00;

cost for disbursement RM 2,195.00;

costs of RM 6,000.00;

GST of 6% on RM 10,000.00 which is RM 600.00;

interest of 5% from 29 July 2010 until date of settlement; and

allocator fee on RM 6,000.00 which is RM 240.00. [10] The Former Solicitor’s Notices of Appeal are as in enclosures 12 and 13. In both the notices, the appeal is stated as against the following –

failure by the learned SAR to make a ruling in respect of the Former Clients’ or their solicitor’s failure to serve a marked copy of the Bill of Costs as directed by the court on 2 August

failure by the learned SAR to award the full costs due to the failure by the Former Clients or their solicitor to serve the marked copy;

failed to award getting-up fees in the sum RM 50,000.00; 8

failed to consider the items which were agreed and not disputed by both parties, namely, 7, 8, 13, 14, 38 – 80 the total of which is RM 793.00; and

failed to consider that for items 1, 2, 4, 5, 16, 17, 30 – 37, 81 and 82 only the quantum is disputed. [11] Having heard the parties submissions, I made the following order –

enclosure 10 which is the appeal filed by the administrator of Lim Kian Peet’s estate is allowed;

enclosure 12 which is the appeal by Former Solicitor concerning the administrator of Lim Kian Peet’s estate is dismissed;

enclosure 11 which is the appeal filed by Lim Kien Seng is dismissed; and

enclosure 13 which is the Former Solicitor’s appeal concerning Lim Kien Seng is allowed on the following terms –

getting-up fees of RM 50,000.00 and out of pocket expenses of RM 15,149.00 is awarded;

(ii) interest at 8% per annum on the total sum of the getting-up fees and out of pocket expenses 9 RM 65,149.00 from 16 June 2010 until date of settlement;

(iii) 6% GST tax on the total sum RM 65,149.00; and

(iv) Costs of the proceedings RM 8,000.00 to the Former Solicitor. Former Clients’ contentions [12] It is submitted on behalf of the Former Clients that –

the Former Solicitor had filed duplicate bills of costs against the Former Clients separately when in actual fact there is only one joint retainer;

the Former Clients alleged they have no recollection of giving instructions to file the 2010 Originating Summons and the cause papers were not served on the defendants. Based on the particulars stated in items 1 – 29, the timeline for these matters to have taken place is only between 16 June 2010 to 29 July 2010. There is no evidence as to what was the outcome and whether there were any cause papers filed in response by the Defendants in this matter; 10

based on the cause papers, complexity of the issues and authorities the getting-up fees should only be in the region of RM 1,500.00 to RM 3,000.00 only;

items 4, 5, 16 and 17 were grossly inflated and was correctly disallowed. Items 6 and 18 were also grossly inflated and as such it was wrong for the learned SAR to allow such items;

cost of photocopy should not exceed 50 cent per page as provided in Chapter 9.01 (4) (i) of the Rules and Rulings of the Bar Council Malaysia. The former solicitor failed to show special circumstances that warrant a higher charge of RM 1.00 per page as claimed in both Bill of Costs; and

the 5% interest ought to be calculated from the date of filing the 2016 Originating Summons on 21 November 2016 and not from the date the 2010 Originating Summons was withdrawn on 29 July 2010. The former client ought not be held accountable for the delay caused by the former solicitors in taxing their bill of costs. 11 Former Solicitor’s contentions [13] It is submitted by the Former Solicitor that the learned SAR erred in law and in fact in the following circumstances –

failed to take into account the pertinent and crucial LoU between the Former Clients and the Former Solicitor where the former client agreed to pay 15% of the total value of the 1/8 shares which the client gained as a result of the Former Solicitor’s prosecution and defence of the suits. The LoU is not a general but a specific retainer where there is certainty of fees ie 15% of the total value of the 1/8 shares. According to the Former Solicitor, up until 2011, the Former Clients gained no less than RM 80 million each as part of their entitlement and at the time of their termination, they had already accumulated more than RM 80 million worth of assets and monies on behalf of their Former Clients. Therefore the fees due to the former solicitors would be 15% of RM 80 million which is RM 12 million. Thus the total value in the bill of costs at RM 70,367.00, the former solicitors were within their rights to claim the full amount in accordance with 12 the agreement which is RM 70,367.00 as the legal fees for the services rendered;

failed to consider Order 59 rule 17 of the Rules of Court 2012 (“RoC 2012”) which states all costs incurred shall be presumed to have been reasonably incurred and that all amounts stated are deemed to have been reasonable in amount. It is contended by the Former Solicitor that the said provision places a reverse evidentiary burden on the former client to disprove what has been claimed in the bill of costs. The learned SAR overlooked that the Former Client failed to disprove the Former Solicitors claims in the bill of costs with strict proof. It is further argued by the Former Solicitor that the said Order 59 rule 17 does not create the existence of discretion or empowers the court to exercise such a discretion. Thus the learned SAR was wrong when she said the ultimate discretion of costs is still vested in court to award appropriate amount; 13

considered Order 16 (2) and (4) of the RoC 2012 which is irrelevant as the said provisions relate to party-to-party costs that has been ordered to be taxed on an indemnity basis. Even if the said Order 16 (4) is applicable, the said provision is in favour of the Former Solicitor as the said provision states that all costs shall be allowed and any doubts which the court may have shall be resolved in favour of the receiving party which is the Former Solicitor;

dismissed and reduced the quantum of items that were not disputed by the Former Clients. This is contrary to Order 59 rule 17 (3) of the RoC 2012. As such items 7, 8, 9, 13 and 14 must be allowed in full in accordance with Order 59 rule 17(3) of the same;

rejected items 1, 2, 4, 5, 16, 17, 30 - 37, 81 and 82 and reduced items 3, 6, 15, 18, 22 - 29 when there were no evidence adduced by the Former Clients to disprove the Former Solicitor’s claims. As such it is argued that all out of pocket expenses must be allowed as intended under Order 59 rule 17(3) of the RoC 2012 which is on the basis of 14 solicitor client and not party to party basis adopted by the learned SAR;

awarded getting up fees in the sum of RM 10,000.00 without any authority to justify such sum. Unjustified reliance was placed by the learned SAR on the fact that the 2010 Originating Summons and the application for injunction did not go to full hearing. It is argued the learned SAR failed to consider the skill, specialized knowledge and responsibility and time and labour expended by the solicitor in relation to the 2010 Originating Summons and the application for injunction made pursuant to sections 114, 365, 368A of the Companies Act 1965 to restrain the other Lim family members who were attempting to dissipate the assets within the company to their personal benefit. Failed to consider numerous authorities cited by the Former Solicitor concerning getting-up awards relating to injunction and it is argued that cases on solicitor and client basis dictate that solicitor client cost would be double of party-party costs; and 15

refused to make any decision on the failure of the Former Clients to return the marked copy in accordance with the directions given by the court. Letter of Undertaking [14] The LoU which was jointly signed by the Former Clients is reproduced below – Lim Kien Seng (NRIC No: 540820-10-6183) of No. 7, Jalan Setiakasih Lapan, Bukit Damansara 50490 Kuala Lumpur. Lim Kian Peet (NRIC No: 620314-10-6797) of 2-19-1, Menara Bukit Ceylon No. 2, Jalan Ceylon, 50200 Kuala Lumpur. M/S. K. MANO & ASSOCIATES ADVOCATES & SOLICITORS No. 3A, Jalan Yong Shook Lin, 46050 Petaling Jaya, Selangor Darul Ehsan. Dear Sirs, 16 RE: APPOINTMENT OF YOUR FIRM AS SOLICITORS FOR THE FOLLOWING MATTERS

(A)

(B)

(C)

(D) ESTATES OF LIMIT YEE TECK & TAN GEOK LIAN

KUALA LUMPUR HIGH COURT SUIT NO. D4-22-4600-98 2. KUALA LUMPUR HIGH COURT SUIT NO. D3-22-1995-98 3. KUALA LUMPUR HIGH COURT SUIT NO. S4-22-852-05 4. KUALA LUMPUR HIGH COURT SUIT NO. S6-22-853-05 5. KUALA LUMPUR HIGH COURT SUIT NO. D8-24-219-05 PETITIONS IN RESPECT OF LIM YEE TECK REALTY SDN. BHD. NO. D2-26-37-05 PETITION NO. D2-28-420-05 KUALA LUMPUR HIGH COURT ORIGINATING PETITION NO. D3-26-5-02 KUALA LUMPUR HIGH COURT WINDING UP PETITION NO. D2-28-309-05 We the abovenamed and undersigned hereby confirm as per our meeting that we undertake and guarantee the payment of all Legal Fees and Costs due and owed to your firm Messrs K. Mano & Associates of No. 3A, Jalan Yong Shook Lin, 46050 Petaling Jaya, Selangor particulars whereof are set out hereinafter for representing us in the aforesaid legal proceedings and the said Fees shall be inclusive of all Consultation charges for the said matters but excluding disbursement and out of pocket expenses. We hereby further confirm that it is hereby expressly agreed between us that the Legal Fees and Costs to be paid to your firm shall be a sum equivalent to fifteen per cent (15%) of the total value of our collective individual entitlement of 1/8 shares as beneficiaries from the estate of our late father Lim Yee Teck and late mother Tan Geok Lan (hereinafter referred to as the said Fees). We further undertake and guarantee the payment of the said Fees upon disposal of all the aforesaid matters including other matters related to the issues but not specifically set out and/or upon the extraction of the Letters of Administration notwithstanding, the predetermination of the services of your firm by ourselves. 17 This undertaking shall be binding on our successors-in-title, nominee(s), heirs and/or assigns and/or next-of-kin. Dated this day of 2005 Sgd ____________________________ Signed by Lim Kien Seng (NRIC No: 540820-10-6183) (Beneficiary of the estate of Lim Yee Teck and Tan Geok Lan Sgd ____________________________ Signed by Lim Kien Peet (NRIC No: 620314-10-6797) (Beneficiary of the estate of Lim Yee Teck and Tan Geok Lan [15] The above letter evidence the joint appointment made by the Former Clients for the Former Solicitor to be their legal representative in all the matters listed in the Letter of Undertaking and that it was agreed that the “Legal Fees and Costs to be paid to your firm shall be a sum equivalent to fifteen per cent (15%) of the total value of our collective individual entitlement of 1/8 shares as beneficiaries from the estate of our late father Lim Yee Teck and late mother Tan Geok Lan”. [16] As stated above the Former Solicitor filed two identical Bills of Costs, namely enclosure 7 in respect of Lim Kien Seng and enclosure 9 in respect of Lim Kien Seng. It is the Former Solicitor’s contentions that they are entitled to filed two separate bill of costs in respect of Lim Kian Peet and Lim Kian Seng respectively. On the issue of duplicity raised by 18 the Former Clients, the Former Solicitor argued the Former Client is estopped from raising the said issue as the said issue have already been decided by the learned Judge in the Saman Pemula Ex-Parte 47/2016 and therefore res judicata. [17] In Farlim Properties Sdn Bhd v Goh Keat Poh & Ors (And Other Appeals) [2003] 4 CLJ 505 the Court of Appeal held – 6(1) When the plea of res judicata is raised it is necessary to identify with precision the issue that was decided in the earlier proceedings. In Tong Lee Hwa & Anor v. Lee Yoke San [1979] 1 MLJ 24, [1981] 1 MLJ 54 Chang Min Tat FC held that to constitute a res judicata, the earlier judgment must, in terms of the Privy Council decision in Kok Hoong v. Leong Cheong Kweng Mines Ltd [1964] MLJ 49 ‘necessarily and with precision’ determine the point in issue. [18] My perusal of the judgement of the learned High Court Judge reported in Tetuan K Mano & Associates (suing as a firm and sole proprietor) v Lim Kien Seng & Ors [2018] 7 MLJ 581 shows the issue in relation to the duplicity of the Bill of Costs was not raised, ventilated and adjudged. Based on the said judgment the issues that were raised and ventilated were (a) the Former Solicitor’s claim for fees was time barred under section 6 of the Limitation Act 1953 and (b) the said application was time barred under section 126 of the Legal Profession Act 1976 (“LPA 1976”). It is the finding of the learned High Court Judge that the 19 Former Clients breached the contract as the Former Clients has failed to pay the legal bills at the date the services of the Former Solicitor was terminated. It was also held that the application of the Former Solicitor for an order for the bill of costs to be taxed on a solicitor and client basis pursuant to section 126 of the LPA 1976 was not time barred under both the Limitation Act and LPA 1976 and the Former Solicitor’s application was allowed. Thus in so far as the issue of limitation is concerned the doctrine of res judicata applies and the Former Clients are estopped from re-litigating the said issue. However with regards to the Bills of Costs, there was no order made by the learned High Court Judge for the two Bill of Costs attached to the 2016 Originating Summons to be taxed individually. [19] I am of the view the undertaking by the Former Clients to pay the legal fees a sum equivalent to fifteen per cent (15%) of the total value of the Former Clients’ collective individual entitlement of 1/8 shares does not mean the Former Solicitor is to tax the Former Clients individually and separately. As such there is duplicity in claim and the filing of 2 sets of bill of costs is an abuse of the process of the court. Thus there should only be one set of bill of costs to be taxed. As the appeal of this nature is by way of re-hearing, for purpose of the taxation I proceeded to hear submissions in relation to enclosure 7 which concerned Lim Kian Seng. 20 Having considered the submissions of both parties I allowed the appeal by the Former Solicitor as in enclosure 13 on the terms which is stated in the paragraphs below in relation to getting-up fees and out of pocket expenses. Thus the appeal by Lim Kian Seng as in enclosure 11 was accordingly dismissed. It is noted the Former Solicitor did not appeal against the decision on duplicity. [20] As it is my considered opinion there should, at the outset be only one bill of cost and I chose to tax the Bill of Costs enclosure 7 in respect of Lim Kian Seng, the Bill of Cost in respect of the estate of Lim Kian Peet was dismissed and the appeal filed by the Former Solicitor as in enclosure 12 was accordingly dismissed. It should follow suit that the appeal by the administrator of Lim Kian Peet as in enclosure 10 should be dismissed. As such I have erred when I allowed the said appeal in enclosure 10. This will be a point of appeal to be raised by the parties at the Court of Appeal. Getting-up fees [21] The total bill of costs presented by the Former Solicitor is RM 50,000.00 for getting-up fees and RM 20,367.00 for out of pocket expenses. Thus the total sum of the Bill of Costs is RM 70,367.00. In 21 the Former Solicitor’s written submission dated 6 January 2018 (enclosure 15) it is argued at paragraph 16 and 17 as follows –

Up until 2011, the former solicitors instruct that the client gained no less than RM80million each as part of their entitlement. Former solicitors instruct that at the time of their termination, they had already accumulated more than RM80million worth of assets and monies on behalf of their former client. Hence, the fees due to the former solicitors would be 15% of RM80million which is RM12million.

It is submitted that with the total value in the bill of costs at RM70,367.00, the former solicitors were within their rights to claim the full amount in accordance with the agreement. Therefore, the learned SAR should have awarded RM70,367.00 as the legal fees for the services rendered.

the complexity of the OS without considering the background of all other related disputes as the Former Solicitor is entitled to costs in other suits; 22

the affidavit in support of the OS even though consists of 221 pages, only 9 pages (12 paragraphs) contain the averments of the deponent whereas the other pages consists of exhibits. The exhibits were available to the Former Solicitor as the Former Solicitor had represented the Former Clients in the other suits. The said affidavit was also used to support the ex-parte application for injunction. The said affidavit did not raise complicated issues but merely seeking injunction for the compliance of the Consent Order. Thus there is no extra work required in filing the ex-parte application; and

notice of EGM which was to be held on 17 June 2010 was received on 13 June 2010, however the OS was filed on 16 June 2010. No real urgency of the matter being heard by the court as the cause papers were not served on the defendants to prevent the EGM. The ex-parte application for injunction was filed on 17 June 2010 and fixed for hearing on 22 June 2010. On the said hearing date the ex-parte application was withdrawn by the Former Solicitor. 23 The law [23] The relevant provision in the RoC 2012 in relation to solicitor-client costs is Order 59 rule 17 which states as follows –

Costs payable to a solicitor by his own client (O. 59 r. 17)

This Rule is in amplification and not in derogation of the procedure set out in the Legal Profession Act 1976.

On the determination of a solicitor's bill to his own client (except a bill with respect to non-contentious business and a bill payable pursuant s. 5 of the Legal Aid Act 1971), all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred.

For the purpose of paragraph (1), all costs incurred with the express or implied approval of the client shall be conclusively presumed to have been reasonably incurred and, where the amount thereof has been expressly or impliedly approved by the client, to have been reasonable in amount.

In paragraph (3), references to the client shall be construed

if the client at the material time a mentally disordered person within the meaning of the Mental Health Act 2001 and was represented by a person acting as litigation representative, as references to that person acting, where necessary, with the authority of the Court; and 24

if the client was at the material time a minor and represented by a person acting as litigation representative, as references to that person. [24] In respect of Order 59 rule 17 (3) of the RoC 2012, it is the Former Solicitor contentions that based on the said provision, all costs incurred shall be presumed to have been reasonably incurred and that all amounts stated are deemed to have been reasonable in amount. Thus it is argued on behalf of the Former Solicitor that the said Order 59 rule 17 (3) creates and places a reverse evidentiary burden on the former client to disprove what has been claimed in the bill of costs. In this respect the Former Solicitor concede they have no authorities to support their interpretation of the said Order 59 rule 17 (3). [25] It is to be noted Order 59 rule 17 (3) relates to costs that was incurred with the express or implied approval of the client. As the said costs were expressly or impliedly approved by the client, it is to be conclusively presumed that the said costs have been reasonably incurred. However there is no evidence adduced by the Former Solicitor to show the costs which falls in this category. I am of the view in order to invoke the conclusive presumption under the said rule, the Former Solicitor must first prove the relevant costs that was expressly or impliedly approved by the Former Client. Essentially the LoU is in 25 respect of the fees to be paid to the Former Solicitor to be calculated based on the formula stated therein. Although the LoU make reference to costs, it is only in general without any specific details of the costs which the client has agreed expressly or impliedly to be incurred. Likewise, there is no mention of any amount (of costs) which is expressly or impliedly agreed. It is my view, in the absence of such specific agreement, the general rule that only costs which is of a reasonable amount and that have been reasonably incurred applies. Thus Order 59 rule 17 (2) is applicable. [26] In Alex Ting Kuang Kuo v Credit Corporation (M) Sdn Bhd [2012] 9 CLJ, the court explained solicitor and client costs as follows – [11] Solicitor-client costs, in essence, are based on indemnity basis. The solicitor-client costs are not based on what costs or fees the solicitor has agreed with the client. If the solicitor has agreed with the client a certain fees (actual costs), they are contractual and have nothing to do with taxation on solicitor-client basis. Taxing registrar must note this distinction. For example, contract may provide that the costs of litigation between the parties will be based on solicitor-client costs. This just means it must be taxed on indemnity basis and not on what the solicitor has agreed with the fees for his clients. For example, where it is related to default judgment, the getting-up fees will only be nominal and not what the solicitor has agreed with the clients. Even if there is a contract between the parties to assess costs on solicitor-client basis, the ultimate discretion of costs is still vested in court 26

that solicitor and client cost would be double of party to party costs; and

the element of inflation and the value of money must be factored in (Union Insurance Malaysia Sdn Bhd (supra); Giga Engineering & Construction Sdn Bhd. v Yip Chee Seng & Sons Sdn Bhd & Ors [2013] 10 MLJ 805; [2014] 1 LNS 677). [29] The Former Solicitor cited the following cases relating to injunction –

Welltrade Middle East Ltd & Anor v PJ Wakelin & Ors [1984] 1 MLJ lxiv where getting-up fees of $ 22,000.00 (party to party basis) awarded by the registrar was affirmed by the judge. Taking into account inflation and the change in value of money it is submitted that over 33 years the amount would be no less than $ 100,000.00; and

AV Asia Sdn Bhd v Measat Broadcast Network Systems Sdn Bhd [2014] 2 MLRA 421; [2014] 1 CLJ 821 where the 28 Federal Court awarded party to party costs of RM 100,000.00 upon dismissal of the appeal on injunctive relief. Thus it is argued by the Former Solicitor that costs on solicitor and client basis would be RM 200,000.00. [30] In the instant case, it is argued by the Former Solicitor the appropriate solicitor and client costs ought not have been below RM 50,000.00 and the Former Solicitor is claiming such amount for its getting up fees. It would appear that the Former Solicitor has waived its right to claim RM 12 million which is said to be in accordance with the LoU. This to my mind is wise as the Former Solicitor would have to prove its contention that the value of 1/8 shares of the Former Clients shares is worth RM 80 million if the Former Solicitor insists on pursuing the RM 12 million claim. However there is no credible evidence to support the contentions that the value of 1/8 shares of the Former Clients shares is worth RM 80 million. The LoU provides a formula upon which the fees is intended to be calculated. Thus the burden is on the Former Solicitor to prove the value of 1/8 shares of the Former Clients which is said to be worth RM 80 million. It is apparent the formula is dependent on some elements which is not definite and certain. Thus to say there is a certain fees agreed is not quite correct. However the issue of proving the value of the said 1/8 shares is not relevant as the 29 Former Solicitor is claiming a sum which is not based on the formula. Instead the Former Solicitor cited authorities to support its claim in respect of the getting-up fees. [31] Having considered the facts and the argument of both parties, I am of the view RM 50,000.00 is the appropriate getting-up fees. I say so for the following reasons –

In the case Alex Ting Kuang Kuo the court states as follows – From the above note, as a general rule, it can be said that solicitor-client costs cannot exceed double the party to party costs, and the actual legal costs will only arise if there is an agreement as to fees between solicitors and client. If there is no such agreement then the solicitor will have to eat the 'humble pie' the court decides which will be based on the appropriate solicitor-client costs and not the actual legal costs the solicitor could have claimed.

Articles which discuss solicitor-client costs as a barometer relies on party to party costs to ascertain solicitor-client costs… Thus the approach of considering costs awarded on party to party basis in connection with injunctive relief for purpose of determining solicitor and client costs is prudent. 30

When determining getting-up fees on party to party basis, the merits of each case will have to be taken into consideration. On this point reference is made to the reminder made by the learned Judge in Union Insurance Malaysia Sdn Bhd v Chan You Young [2003] 3 MLJ 484; [2003] 7 CLJ 50 at page 79: One of the most difficult and unenviable tasks in taxation of costs is to determine a figure for getting up and it is only appropriate for all those involved in such a task to be reminded of the sage advice of Justice Donaldson in Property and Reversionary Investment Corporation Ltd v Secretary of State for the Environment [1975] 2 All ER 436 where his Lordship adviced at p 443: Each case will always have to be considered on its merits… . … various figures will no doubt come to mind. They can be tested relative to the remuneration generally accepted, or previously held to be fair and reasonable in comparable transaction, due allowance being made for all distinctions … .… in the end it is a value judgment, based on discretion and experience. We have had to make a value judgment. Our figure may not be the right figure, and indeed such a figure probably does not exist, but we hope that it will be a right figure — one which is reasonable in all the circumstances. (Emphasis added.) [32] Thus it is important to bear in mind the appropriate party to party costs that could have been granted in the instant case must be based on 31 the facts and circumstances of this instant case. The facts to be considered is as follows –

the 2010 Originating Summons was filed seeking the reliefs as stated in paragraph 3 above. Based on the reliefs sought, the subject matter essentially relate to the provisions in the Companies Act 1956 and injunctive relief;

in support of the 2010 Originating Summons, an affidavit jointly affirmed by both Lim Kian Seng and Lim Kian Peet on 16 June 2010 was filed. Thus the Former Clients contentions that there are unaware and have no recollection of giving instructions to file the 2010 Originating Summons is mala fide. The grounds to justify an interim injunction includes, among others, to prevent dissipation of the assets of the family owned company Lim Yee Teck Realty Sdn Bhd (Lim Teck Realty) in any manner whatsoever until the commencement of the member voluntary wind-up of Lim Yee Teck Realty pursuant to the Consent Order dated 3 September 2009 recorded by the Former Clients and the defendants in Originating Petition No: D7-26-9-2006 which is 32 an oppressive petition under section 181 of the Companies Act 1965 filed by the Former Clients against the defendants;

the Former Solicitor filed, on behalf of the Former Clients, a certificate of urgency dated 16 June 2010 applying for the 2010 Originating Summons to be heard on urgent basis in view of the impending Extraordinary General Meeting to dispose of the assets of Lim Yee Teck Realty Sdn Bhd by declaring interim dividend;

on the same date an ex-parte summons in chambers was filed on behalf of the Former Clients seeking for an interim injunction to restrain the defendants from dealing in any manner whatsoever any of the assets of Lim Yee Teck Realty until the commencement of the member voluntary wind-up of Lim Yee Teck Realty pursuant to the Consent Order dated 3 September 2009 and from putting into effect any resolution for the payment of interim dividends by way of distribution of the shares registered under Lim Yee Teck Realty in a company known as TAPHS Group Berhad. The resolution for purpose of declaring interim dividends was scheduled to be tabled at an Extraordinary General Meeting 33 scheduled to be held on 18 June 2010, the notice of which was received by the Former Clients;

in support of the ex-parte summons, an affidavit affirmed by the Former Clients were filed. The affidavit filed is substantially identical to the affidavit filed to support the 2010

on 22 June 2010 when the ex-parte summons in chambers came up for hearing the Former Solicitor informed the court that parties had amicably resolved the matter and the plaintiff withdrew the said summons which was struck out accordingly. The court was also informed that the Originating Summons will be discontinued in due course. On 29 July 2010 the Originating Summons was withdrawn by the plaintiff and duly struck out by the court. Based on record, there is no indication that the Originating Summons was served on the defendants. [33] Considering the cause papers of the 2010 Originating Summons and the ex parte summons, there is no doubt to my mind that the Former Solicitor had to carry out the necessary research in relation to the legal 34 issues arising from what transpired. The legal issues substantially concern provisions under the Companies Act 1965 in particular dissipation of the assets of Lim Yee Teck Realty in light of the terms of the Consent Order (in particular the agreement by the parties to voluntarily wound up Lim Teck Realty in the event the parties failed to enter into a settlement agreement) and the legal basis for the injunctive relief sought. Although the issue may not be complex, this does not mean the preparation of the 2010 Originating Summons and the affidavits thereto does not require research. The law may be well in place but applying the relevant law to the facts of the case would require critical analysis. For all the reasons stated above the amount RM 1,500.00 to RM 3,000.00 submitted by the Former Clients is unduly low and unreasonable as it does not do justice to the effort and preparatory works carried out by the Former Solicitor. [34] It is noted the learned SAR emphasize that although the affidavit supporting the 2010 Originating Summons and the ex-parte application has 221 pages, only 9 pages consists the Former Clients averment and the rest of the pages consist exhibits. It appears the learned SAR ignored the significance of the exhibits. In this respect reference is made to Order 59 rule 16 (1) (c) of the RoC 2012 where the court is required to have regards to the number and importance of documents 35 however brief, prepared or perused. It is a known fact that litigants would normally rely on, among others, documentary evidence to support their case. As in the instant case, the documentary evidence relied upon by the Former Clients’ to build up their case was referred to in their affidavits and produced and marked as Exhibit “A” – Exhibit “E”. Undoubtedly the said exhibits would have to be perused to determine its significance and relevancy for purpose of filing the cause papers. The fact that the cause papers were not served on the defendants and that the ex-parte summons and the 2010 Originating Summons did not go for hearing and trial as both the summons were eventually withdrawn cannot diminish the research, works and preparation carried out by the Former Solicitor in relation to the 2010 Originating Summons. [35] The Former Solicitor cited the case AV Asia Sdn Bhd where party to party costs of RM 100,000.00 was awarded. It must be borne in mind that the said case originates from the High Court, then to the Court of Appeal and eventually the Federal Court. The issue in that case relate to a provision in a mutual non-disclosure agreement entered by the parties where it was provided that monetary damages would not be sufficient to compensate unauthorized disclosure of confidential information and that injunctive relief would be appropriate. It was alleged by the appellant that the respondent had breached the 36 confidentiality provision by divulging confidential information disclosed to it by the appellant for its own commercial purpose. The appellant’s application for injunctive relief to restrain the respondents from relying or using the confidential information was dismissed by the High Court on the ground that damages is an adequate remedy for the plaintiff. The Court of Appeal affirmed the said decision. Leave was granted to appeal to the Federal Court in respect of, inter alia, the question whether the said provision in the mutual non-disclosure agreement disentitled the High Court from concluding that damages was an adequate remedy for purpose of interim injunctive relief. The question was answered in the negative as it was held by the Federal Court that such provision did not fetter the jurisdiction and discretion of a court of law to decide whether to grant an injunctive relief. Unlike in this instant case, the application for injunctive relief in AV Asia Sdn Bhd (supra) was heard by the court where argument for and against it were advanced at the High Court, Court of Appeal and Federal Court. Contrary to the Former Solicitor’s argument (that there were no issues of complexity, difficulty or novelty in the AV Asia Sdn Bhd case ), the fact that leave was granted to appeal to the Federal Court shows the case involves new issues of law that are of general public importance (see the case Union Insurance Malaysia Sdn Bhd (supra)). 37 [36] The Former Solicitor also cited the case of Tuan Hj. Ishak Bin Ismail v. Leong Hup Holdings Bhd & others [1997] 1 MLJ 623; [1997] 1 CLJ 463, where it concerned an appeal against a decision of the High Court striking out the statement of claim under Order 18 r 19 (1) (a), (b) and (c) of the Rules of High Court 1980 (“RHC 1980”). It was emphasised by the Former Solicitor that although the appeal was utterly devoid of new or difficult issues as it relates to a striking out action where a search in the CLJ would reveal not less than 525 cases on striking out under 0 18 r 19(1) of the RHC 1980, the Court of Appeal ordered a sum of RM 100,000.00 for getting up. It is noted the Former Solicitor did not disclose that the ten respondents named in the case of Tuan Hj. Ishak Bin Ismail (supra) were represented by a separate set of solicitors but relied on the same legal grounds to strike out the oppression petition filed by the plaintiff. Oral arguments were heard and the High Court dismissed the respondents’ application. However the respondents’ appeal was allowed by the Court of Appeal. There were six appeals registered representing different group of respondents. On the question of costs, each of the respondent argued they are entitled to be paid separate set of costs. It was argued by the petitioner that there should be one getting-up fee to be shared by all the respondents. It was held by the court that costs are always a matter of discretion and how the discretion is exercised depends on the facts of the case. The court took 38 into consideration that substantial submission was only made by one particular counsel with other counsel playing only a supportive role and held that it would be iniquitous for the court to permit the same measure of fees for getting-up to all the counsels. This was what the court said – The appeals were confined to one issue only: Did the petition on its face disclose a cause of action? Once again the substantial submission was made by Encik Abraham [for the first respondent]. Encik Y.M. Siew [for the second, third and fifth respondent] and Encik Augustine Poh [for the fourth respondent] adopted his submission and elaborated upon it. Encik Ghazi Ishak [for the eighth and ninth respondent] was of some assistance to us as to the non-involvement of the eighth and ninth respondents in the dispute. Encik Teh [for the sixth respondent] and Encik Jaswinder Singh [for the seventh respondent] merely adopted the submissions of the other three and did not address us at all. It should be immediately apparent that it would be iniquitous for us to permit the same measure of fees for getting-up and advocacy to all Counsel in each of the six appeals. With the greatest respect to all concerned, much of what was said after Encik Abraham completed his address was only a repetition of the same legal principles with different cadences. Our attention was directed to the passage at theSupreme Court Practice 1995 Vol. 1 para. 63/3/2 which is the equivalent of our O. 59 r. 3, and the relevant statements in Ritter v. Godfrey [1920] KB 47, Donald Campbell and Company Ltd. v. Pollak [1927] AC 732 at p. 821 and Lim Heng Hoo V. Tan Hock Hai & Ors [1973] 1 LNS 79. 39 We must confess we did not find these cases particularly helpful. Costs are always a matter of discretion (see r. 96 of the Court of Appeal Rules 1994), and how a discretion is exercised must be governed by the facts of each case. (emphasis added) [37] Exercising its discretion, the court then awarded getting-up fees of RM 100,000.00 for the first respondent, RM 40,000.00 for the second, third and fifth respondent, RM 25,000.00 for the fourth respondent, RM 10,000.00 for the sixth respondent, RM 10,000.00 for the seventh respondent and RM 25,000.00 for the eighth and nine respondent. Thus the facts in the case of Tuan Hj. Ishak Bin Ismail can be distinguished from the instant case where there were no oral submissions made by parties as the 2010 Originating Summons was not served on the defendants and was subsequently withdrawn and struck out. It must also be noted that the getting-up fees awarded among counsels varies, depending on, inter alia, the participation of the solicitors at the hearing in court. [38] Considering the issues which are not complex but fairly difficult, the research and works involved in preparing the cause papers I would say the party to party costs in the instant case would be in the range of 15,000.00 to 20,000.00. As it is trite that party to party costs will be less 40 than solicitor-client costs in respect of getting-up fees and that it cannot be more than doubled party to party cost and considering the inflation element, it is my considered view the reasonable getting up fees here is RM 50,000.00. Out of pocket expenses [39] It was argued by the Former Solicitor that since the Former Clients did not comply with the learned SAR’s direction to return the marked copy of the Bill of Costs within the time as directed, the full costs ought to be granted to the Former Solicitor. On this issue, I refer to Order 2 rule 3 of the RoC 2012 which states –

Preliminary objection for non-compliance of rules not allowed (O. r. 3) A Court or Judge shall not allow any preliminary objection by any party to any cause or matter or proceedings only on the ground of non-compliance of any provision of these Rules unless the Court or Judge is of the opinion that such non-compliance has occasioned a substantial miscarriage of justice or occasioned prejudice that cannot be cured either by amendment or an appropriate order for costs or both. [40] Based on the facts, the failure by the Former Clients to return a marked copy within the time stipulated did not caused substantial 41 miscarriage of justice on the part of the Former Solicitor. As pointed out by the learned SAR, the written submissions prepared by the parties for the hearing before her were in relation to quantum and damages and the parties were given the opportunity to submit and reply. This is because the Former Clients eventually returned a marked copy of the Bills of Costs albeit out of time. [41] The Former Solicitor submitted for those items which were not marked, the said items ought to be allowed in total. The items that were not marked by the Former Clients are items 7 – 14, 19 – 21, 38 – 80 and 83 – 84. As the Former Clients did not object to the said items indicating their acceptance that the said costs are reasonably incurred and of reasonable amount, those items ought to be allowed in full. Thus the learned SAR erred when she disallowed in full the said items. I therefore set aside the learned SAR disallowing the undisputed items and allowed in full the costs incurred in items 7 – 14, 19 – 21, 38 – 80 and 83 – 84. [42] The items disputed on principle and quantum are items 1 – 6, 15 – 18, 22 -37 and 81 – 82 which are discussed below. 42

items 1 – 3

1.

16.6.2010

Menyediakan Saman Pemula bertarikh 16.6.2010 (7 folio) 00 2.

16.6.2010

Salinan bertaip Saman Pemula bertarikh 16.6.2010 (7 folio) 00 3.

16.6.2010 4 salinan karbon Saman Pemula bertarikh 16.6.2010 (4 salinan x 7 folio x RM4.00)

112.00 It was explained by the Former Solicitor that item 1 was the handwritten text of the 2010 Originating Summons prepared by the solicitor and handed to the typist for it to be typed. Item 2 and 3 were the typed and carbon copy of the Originating Summons. I allowed the said items both on principle and quantum (at RM 4.00 for each folio – see Order 59 RoC 2012, Appendix B 1, item 74).

items 4 -6

4.

16.6.2010 Menyediakan Afidavit Sokongan oleh Lim Kien Seng dan Lim Kian Peet bertarikh 16.6.2010 (221 folio)

884.00 5.

16.6.2010 Salinan bertaip Afidavit Sokongan oleh Lim

Kien Seng dan Lim Kian Peet bertarikh 16.6.2010 (221 folio) 00 6.

16.6.2010 2 salinan karbon Afidavit Sokongan oleh Lim Kien Seng dan Lim Kian Peet bertarikh 16.6.2010 (2 salinan x 221 folio x RM4.00) 1,768.00 43 As stated above the affidavit in support consist of 221 pages out of which only 9 pages of the Bahasa Melayu text and 8 pages of the English text were averments by the deponent and the rest of the pages were exhibits. For item 4, I agree with the Former Clients argument that the exhibits should not be included as the preparation is only in respect of the said affidavit. Thus I allowed 17 folios at RM 4 for each folio which gives a total of RM 68. For item 5 and 6 I allowed in full the said costs.

Items 15 - 18

15.

17.6.2010 4 salinan karbon Saman Dalam Kamar Ex Parte bertarikh 17.6.2010 (4 salinan x 7 folio x RM4.00)

112.00 16.

17.6.2010 Menyediakan Afidavit Sokongan oleh Lim

Kien Seng dan Lim Kian Peet bertarikh 16.6.2010 (221 folio) 00 17.

17.6.2010 Salinan bertaip Afidavit Sokongan oleh Lim

Kien Seng dan Lim Kian Peet bertarikh 16.6.2010 (221 folio) 00 18.

17.6.2010 2 salinan karbon Afidavit Sokongan oleh Lim Kien Seng dan Lim Kian Peet bertarikh 16.6.2010 (2 salinan x 221 folio x RM4.00) 1,768.00 I allowed items 15 – 18 as those documents were inevitably necessary for purpose of the summons in chambers. The 4 copies of the said 44 summons were copies for the court, both the plaintiff and defendant and file copy.

Items 22 - 29

22.

22.6.2010 Menghadiri dalam Mahkamah untuk pendengaran dan bicara Saman Dalam Kamar Ex Parte pada 22.6.2010 di Mahkamah Tinggi Kuala Lumpur 1,000.00 23.

22.6.2010 Perbelanjaan perjalanan peguam ke Mahkamah Tinggi Kuala Lumpur dan balik bagi maksud menghadiri perbicaraan 250.00 24.

1.7.2010 Menghadiri dalam Mahkamah untuk pendengaran dan bicara Saman Pemula bertarikh 16.6.2010 1,000.00 25.

1.7.2010 Perbelanjaan perjalanan peguam ke Mahkamah Tinggi Kuala Lumpur dan balik bagi maksud menghadiri perbicaraan 250.00 26.

22.7.2010 Menghadiri dalam Mahkamah untuk pendengaran dan bicara Saman Pemula bertarikh 16.6.2010 1,000.00 27.

22.7.2010 Perbelanjaan perjalanan peguam ke Mahkamah Tinggi Kuala Lumpur dan balik bagi maksud menghadiri perbicaraan 250.00 28.

29.7.2010 Menghadiri dalam Mahkamah untuk pendengaran dan bicara Saman Pemula bertarikh 16.6.2010 1,000.00 29.

29.7.2010 Perbelanjaan perjalanan peguam ke Mahkamah Tinggi Kuala Lumpur dan balik bagi maksud menghadiri perbicaraan 250.00 Items 26 and 27 were disallowed as the record shows there was no sitting on 22 July 2010. On principle, items 22 and 24 is allowed as the 45 Former Solicitor attended court on the said dates. It is argued by the Former Clients that pursuant to item 32 (a) (i) or (b) (i) Order 59 Part V RHC 1980 the costs allowable or the hearing or trial is between RM 30 – RM 150 per day. The RHC 1980 was repealed by the RoC 2012 and there is no similar item 32 Order 59 Part V RHC 1980 in RoC 2012. The Former Solicitor appears to find support in item 32 (a) (ii) or (b) (ii) Order 59 Part V (where the maximum sum allowed is RM 500) as there is no counsel briefed in this matter. It is further argued by the Former Solicitor that the sum RM 1,000.00 is reasonable as lawyers generally charged RM 2,000 – RM 3,000 for per attendance or appearance made in court. Taking into account the sum allowable under the repealed RHC 1980 which reflect the economic position at that point in time and the current economic position I am of the view the sum of RM 700 for each attendance is reasonable. Consequentially items 23 and 25 for travelling expenses are allowed in full. Item 28 is disallowed as the record shows the Former Solicitor did not attend court on 29 July 2010 but one S Sumathi which the Former Solicitor said was a legal assistant attended and as such cost was incurred. I thus allowed item 29 in full. 46

Items 30 - 37 KOS DALAM CADANGAN

Menyediakan bil kos dan notis penetapan (11 helai x 4 folio x RM4.00)

176.00 31.

Salinan bertaip bil kos dan notis penetapan untuk memfailkan (44 folio x RM4.00) 00 32. 4 salinan Karbon Bil Kos dan Notis

Penetapan (4 salinan x 44 folio x RM4.00) 00 33. Bertaip Bil Kos dan Notis Penetapan untuk pemfailan (44 folio x

RM4.00) 00 34. Karbon Bil Kos dan Notis Penetapan untuk menyampaikan kepada Plaintif-Plaintif 176.00 35. Salinan bagi penandaan (MARKING COPY) oleh Defendan 176.00 36.

Salinan untuk Pejabat (Office Copy) 00 37.

176.00 I allowed items 30 – 32 as those documents were necessary for purpose of the Notice of Taxation and Bill of Costs. Item 33 is disallowed as the Former Solicitor withdrew the said claim. For item 34 the Former Solicitor explained the unsealed copy was for the purpose of serving the said copy to the client. I disallowed item 34 as service of the unsealed copy of the documents on the client is not necessary. 47

Items 81 – 82

Menghadiri bagi pendengaran Bil Kos (RM1,000.00 x 4 kali) 4,000.00 82. Perbelanjaan perjalanan bagi pendengaran Bil Kos (RM250.00 x 4 kali) 1,000.00 In respect of item 81, the record shows there were attendances before the learned SAR in relation to the Bills of Costs – 2 August 2017, 19 September 2017, 3 October 2017 and 31 October 2017. I allowed costs of RM 700 for each attendance and item 82 allowed in full. [43] Premised on the above, the award for the getting up fees is RM 50,000.00 and the total out of pocket expenses is RM 15,149.00. [44] In respect of item 83, the Former Solicitor prayed for interest to run from 16 June 2010 at a rate of 8% per annum on the total amount of getting-up fees and out of pocket expenses RM 65,149.00 from the date the Originating Summons was filed ie 16 June 2010 until the date of realization. The Former Clients argued interest ought to be at 5% and it should run from the date the 2016 Originating Summons filed for an order that the Bills of Costs to be taxed on solicitor and client basis 48 which is 21 November 2016. Based on authorities cited (United Malayan Banking Corp v. Syarikat Perumahan Luas Sdn Bhd (supra); Siew Kuen Williams v Yong Siew In [1984] 1 MLJ 95; [1984] 1 CLJ 41) in the case of solicitor and client bill the obligation to pay becomes due the moment the solicitor is engaged. [45] In this instant case the Former Solicitor was engaged in 2005. However the Former Solicitor is claiming for interest to run from the date the 2010 Originating Summons was filed on 16 June 2010. I am of the view the Former Clients are not prejudiced as the interest is to run at a much later date which is about 5 years after they appointed the Former Solicitor. As to the rate, based on section 11 of the Civil Law Act 1956 and United Malayan Banking Corp v. Syarikat Perumahan Luas Sdn Bhd (supra) the 8% interest prayed by the Former Solicitor is reasonable to compensate the Former Solicitor for being kept out of his money by the Former Clients who breached the terms of the LoU when it failed to pay the fees at the time the services of the Former Solicitor was terminated in 2011. Thus it is ordered that interest to run from 16 June 2010 at 8% per annum on the total amount of getting-up fees and out of pocket expenses RM 65,149.00 until the date of realization. 49 [46] Items 84 in respect of goods and services tax at the rate of 6% on the total costs was not objected to and allowed accordingly. [47] Costs of the proceedings in the sum of RM 8,000.00 is awarded to the Former Solicitor. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION) DATED 28 JUNE 2019 Counsel: Plaintiff/Applicant : David Soosay and together with Sonia Deva Doss of Messrs Culaz & Associates (Former Clients Solicitor) Defendants/Respondents : Shailender Bhar and together with K. Manoharan of Messrs K. Mano & Associates (Former Solicitors)