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/akn/my/judgment/court-of-appeal/2019/710c1516-43e2-4081-883f-dc73a3f55f58
Court of Appeal of Malaysia30 May 2019W-02-(A)-1322-07/2017
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“rs & Sole Proprietor) [In the Matter of the High Court of Malaya at Kuala Lumpur (Appellate & Special Powers) Originating Summon No. WA-17D-11/2016 In the matter of Sections 124, 125 and 126 of the Legal Profession Act 1976 And In the matter of invoices for legal fees by Messrs. K. Mano & Associates, Firm of Advocates”
“Court. The OS was brought against the appellants as well as Patent View. [9] The application was opposed on the basis that the respondent’s claim for his fees is time-barred under section 6 of the Limitation Act”
“handled by the respondent have already been completed or disposed of, most of them in October 2010 while the letters of administration was extracted on 11.4.2008. The decisions of Coburn v Colledge [1897] QB 702 and Preston v Nikolaidis [2017] NSWSC 1527 were cited in support. The OS filed in 2016 was thus time barred.”
“been completed or disposed of, most of them in October 2010 while the letters of administration was extracted on 11.4.2008. The decisions of Coburn v Colledge [1897] QB 702 and Preston v Nikolaidis [2017] NSWSC 1527 were cited in support. The OS filed in 2016 was thus time barred. [22] For similar reasons as explained”
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1 IN THE COURT OF APPEAL, MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: W-02(A)-1322-07/2017 BETWEEN
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1. LIM KIEN SENG (IC NO. 540820-10-6183)
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2. PENTADBIR HARTA PUSAKA … APPELLANTS LIM KIAN PEET (Deceased) AND TETUAN K. MANO & ASSOCIATES … RESPONDENT (Suing as Advocates and Solicitors & Sole Proprietor) [In the Matter of the High Court of Malaya at Kuala Lumpur (Appellate & Special Powers) Originating Summon No. WA-17D-11/2016 In the matter of Sections 124, 125 and 126 of the Legal Profession Act 1976 And In the matter of invoices for legal fees by Messrs. K. Mano & Associates, Firm of Advocates and Solicitors at Kuala Lumpur And In the matter of solicitor-clients costs And In the matter of Orders 7, 28, 59 rule 17 and 92 rule 4 of the Rules of Court 2012 2 And In the matter of the inherent jurisdiction of the Court Between Messrs K. Mano & Associates … Applicant (Suing as Advocates and Solicitors & Sole Proprietor) And
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1. Lim Kien Seng (I.C. No. 540820-10-6183)
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2A. Administrator of Lim Kian Peet (Deceased)
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3. Chong Chuan Long (I.C. No.710625-10-5475) Liquidator of Patent View Development Sdn Bhd (Company No. 448647-W) (in Liquidation) … Respondents] CORAM: HAMID SULTAN BIN ABU BACKER, JCA BADARIAH BINTI SAHAMID, JCA MARY LIM THIAM SUAN, JCA JUDGMENT OF THE COURT [1] The respondent, a firm of advocates and solicitors were previously instructed by the appellants. Upon cessation of instruction, the respondent sought an order of Court for a taxation of their fees on a 3 solicitor and client basis pursuant to section 126 of the Legal Profession Act 1976. The order was duly granted. The clients appealed. On appeal, we did not find any error in the reasoning of the learned Judge. Consequently, we dismissed the appeal and affirmed the decision of the High Court. These are our reasons in full. [2] The respondent was retained by a company known as Patent View Development Sdn Bhd [Patent View] to act for the company in legal proceedings instituted by or against various third parties. The letter of appointment was signed by the appellants who were directors of Patent View. The directors themselves also appointed the respondent to represent them in several suits brought against them in their personal capacity. For both appointments, appropriate letters of appointment or undertaking were issued circa 2005 [letters of appointment]. The existence of the letters of appointment is not disputed. [3] By letter dated 22.3.2011, the appellants discharged the respondent with immediate effect. The letter of discharge or termination of services reads as follows: Re: Conduct of matter concerning Lim Yee Teck Realty, Patent View Development, the Estates of Lim Yee Teck and Tan Geok Lan and all other matters concerning and involving the Lim Family The above matter refers. It is regretful that despite us giving you specific instruction to file the committal proceedings against the other shareholders, you have failed to act as instructed and therefore resulting in considerable delay on our part. We therefore have no other alternative but to discharge your firm from acting as our solicitors with immediate effect. 4 [4] By letter dated 4.4.2011, the appellants’ new solicitors, Culaz & Associates, informed the respondent that he had received instructions from the appellants to continue handling the “matters involving Lim Kien Seng, Lim Kian Peet and Patent View Development Sdn Bhd”: “… In order to expedite our representation, we enclose herewith our first Notice of Change of Solicitors for Suit No. D7-26-9-2006. In the meantime, we would appreciate if you could let us have a list of pending matters and dates both in the High Court and the Court of Appeal to enable us to cross refer with our clients’ records. As regards to your balance of fees and costs, we have been instructed by our clients to request from you the final account of fees paid to date and the balance payable for their verification.” [emphasis added] [5] At the time of termination, there were outstanding legal fees which the respondent claimed the appellants had agreed to pay under the letters of appointment. On 19.10.2011, the respondent issued a Summary of Bills. Upon receipt of the same, the appellants vide their new solicitors, Messrs. Culaz & Associates requested the respondent to provide detailed bills on the work undertaken on behalf of the appellants and/or the same to be taxed. [6] The respondent duly complied vide letter dated 16.3.2012, providing pro forma invoices for their legal fees, costs and expenses incurred as solicitor and counsel for the legal work done till the date of termination of services. 5 [7] The appellants disputed both the principle and the quantum of costs charged by the respondent vide their new solicitors’ letter dated 2.4.2012. In that same letter, the appellants sought the respondent’s consent to have the bill taxed under section 126(3) of the Legal Profession Act 1976. Under section 126(3), consent negates the necessity of obtaining an order of Court for the purpose of taxation conducted by the Registrar of the High Court, and this is specifically mentioned in the appellants’ solicitors’ letter. [8] On 21.11.2016, the respondent filed before the High Court by way of an Originating Summons, the subject matter in the present appeal, seeking an order under sections 124, 125 and 126 of the Legal Profession Act 1976 that his bill of costs be taxed on a solicitor and client basis for the cases listed therein [OS], at the behest of the appellants. The list comprised a total of 38 cases undertaken by the respondent for and on behalf of Patent View at the High Court and the Magistrates’ Court. The OS was brought against the appellants as well as Patent View. [9] The application was opposed on the basis that the respondent’s claim for his fees is time-barred under section 6 of the Limitation Act
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1953. Relying on the High Court decision of Abbas & Ngan v Affin Bank Berhad [2010] 1 LNS 1082, the appellants had argued at the High Court that looking at the respondent’s proposed bill of costs, the conclusion date for each case handled was stated. The last date being 23.10.2010. Since limitation runs 6 years from the date of cause of action, that 6 year period must run from the last concluded date of 23.10.2010 in which case, limitation set in on 22.10.2016. As the OS 6 was filed on 21.11.2016, the respondent’s application was said to be statute barred and must be dismissed. [10] The High Court disagreed. The appeal before us is only brought by the directors of Patent View; Patent View itself which has since gone into liquidation did not appeal. This complaint, that the OS is time-barred is maintained in the appeal before us, in fact, it forms the appellants’ primary ground of appeal. [11] The learned Judge did not find the claim statute barred under section 6 of the Limitation Act 1953. According to the learned Judge, the underlying relationship between the respondent and the appellants was contractual, governed by the two letters issued by the appellants in 2005, appointing the respondent as the Company’s and also as their solicitors. [12] In the first letter of appointment sent in 2005, the appellants, as directors of Patent View signed off on the following contents: Re: Legal Fees and Costs due to yourselves for representing Patent View Development Sdn Bhd (the Company) We the undersigned Directors hereby refer to the above matter. We hereby confirm our meeting between your Mr. K. Mano and Mr. James Culaz and us as Directors of the Company that the Company undertakes and guarantees the payments of your legal fees, disbursements and costs with regard to your firm representing the Company in all legal proceedings wherein the Company is involved including Kuala Lumpur High Court Civil Suit No. D3- 26-5-2002 wherein the Company is named as the 5th Respondent. It was further agreed between your Mr. K Mano and Mr. James Culaz and ourselves as Directors that the Legal Fees and Costs to be paid to your firm M/S K. Mano & Associates shall be equivalent to twenty per cent (20%) of the total value of the assets of the Company and the same shall be paid by the 7 Company upon the disposal of the aforesaid matters and/or the disposal of the assets of the Company whichever is the earlier (hereinafter referred to as “the said Fees”) notwithstanding, the predetermination of the services of your firm by ourselves. In the event the Company is unable to pay the said outstanding fees due and owed to your firm than in such event we as the Directors hereby jointly and severally, and expressly undertake and guarantee the payment of the said Fees to your firm upon discharge and disposal of the matters and/or the assets of the Company whichever is the earlier. [13] In the second letter also sent circa 2005, the same appellants wrote as follows: RE: APPOINTMENT OF YOUR FIRM AS SOLICITORS FOR THE FOLLOWING MATTERS
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1. ESTATES OF LEE YEE TECK & TAN GEOK LIAN
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2. KUALA LUMPUR HIGH COURT SUIT NO. D4-22-4600-98
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3. KUALA LUMPUR HIGH COURT SUIT NO. D3-22-1995-98
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4. KUALA LUMPUR HIGH COURT SUIT NO. S4-22-852-05
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5. KUALA LUMPUR HIGH COURT SUIT NO. S6-22-853-05 KUALA LUMPUR HIGH COURT SUIT NO. D8-24-219-05
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(B) PETITIONS IN RESPECT OF LIM YEE TECK REALTY SDN
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1. BHD KUALA LUMPUR HIGH ORIGINATING PETITION NO. D2- 26-37-05
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2. KUALA LUMPUR HIGH COURT WINDING UP PETITION NO. D2-28-420-05
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(C) KUALA LUMPUR HIGH COURT ORIGINATING PETITION NO. D3-26-5-02
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(D) 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 disbursements and out of pocket expenses. 8 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 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 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. This undertaking shall be binding on our successors in title, nominee(s), heirs and/or assigns and/or next of kin. [14] Since the appeal is brought by the appellants and not by Patent View, it is the second letter of appointment which would be most relevant, although the earlier letter of appointment is by no means irrelevant or would be disregarded. [15] The learned Judge distinguished the facts in Abbas & Ngan [supra], finding that there was only one bill issued at the time of completion of services rendered by the solicitor in that case as compared to the present case where it was unclear if all the works had been completed. Amongst the reasons for that conclusion was the appellants’ own letter dated 4.4.2011 which “clearly shows that the solicitors have been appointed to ‘continue handling the aforesaid matters’”; a request from the appellants for a list of pending matters and dates of cases in the High Court and the Court of Appeal; the terms of the letter of undertaking of 2005 where the respondent was instructed to deal with “matters related to the issues but not specifically set out”; the Notice of Change of Solicitors for Originating Petition No. D7-26-9-2006 9 which indicated to the learned Judge that “some of the cases have not been concluded”. [16] Further, unlike the decision in Abbas & Ngan [supra], there is termination as opposed to simple completion of services rendered; and the appellants had agreed that there were payments of some professional fees still pending. [17] Applying the Federal Court decision in Nasri v Mesah [1971] 1 MLJ 32, the High Court held that for purposes of limitation, in claims founded in contract, time runs from the breach. According to the learned Judge, the contractual arrangement between the parties is that the respondent was to be paid his legal fees upon the disposal of the legal matters identified, including other matters related to the issues. Under the terms of the 2005 letters of appointment, that would be “upon disposal of the legal matters and/or the disposal of the company assets, whichever is earlier”. [18] The learned Judge found that with the termination of the respondent’s services, the cause of action accrued from the breach of contract, namely the termination of the contract without full payment of the respondent’s professional fees. [19] We fully agree with the reasoning of the learned Judge. The underlying relationship between the parties is necessarily contractual for the rendering of professional legal services. The decision of the Federal Court in Gurubarchan Singh Bagawan Singh & Ors v Vellasamy 10 Pennusamy & Other Appeals [2015] 1 CLJ 741 in fact fortifies this reasoning. [20] In the present appeal, the two letters of appointment issued by the appellants in 2005 clearly confirm this understanding with the appellants standing as guarantors to the promise to pay for the legal fees, disbursements and costs incurred in representing not only Patent View but also the appellants themselves who were sued in their personal capacities in the legal proceedings that were identified. More pertinent is the promise to pay and a guarantee of payment of such fees and costs upon disposal of all aforesaid matters including other matters related to the issues but not specifically set out and/or upon the extraction of the Letters of Administration [under the second letter of appointment]; and upon the disposal of the aforesaid matters and/or disposal of the assets of Patent View, whichever is earlier [under the first letter of appointment]. In both cases, this promise and guarantee stands notwithstanding the predetermination of the respondent’s services by the appellants. [21] Before us, learned counsel for the appellants contended that all 31 matters handled by the respondent have already been completed or disposed of, most of them in October 2010 while the letters of administration was extracted on 11.4.2008. The decisions of Coburn v Colledge [1897] QB 702 and Preston v Nikolaidis [2017] NSWSC 1527 were cited in support. The OS filed in 2016 was thus time barred. [22] For similar reasons as explained by the learned Judge when distinguishing with the decision in Abbas & Ngan [supra], the reasoning 11 of which we agree, the same may be said about the cases relied on by the appellants. Like the circumstances in Abbas & Ngan [supra], the solicitor’s tasks in Coburn v Colledge had been completed after which the solicitor billed his client. In Preston v Nikolaidis, there was no request for the bill to be taxed nor was there any taxation regime pursuant to specific legislation under consideration. That was a case where the client, Preston took an anticipatory move of seeking a declaration that the solicitor’s entitlement to costs for services rendered was extinguished by the operation of sections 14 and 63 of the Limitation Act 1969. These cases, with respect are not of assistance. [23] In the present appeal, the learned Judge found that there was no evidence as to the status of either the disposal of the matters or the disposal of other matters related to the issues in the identified legal proceedings, the appellants’ assertion that time had set in simply could not hold. In fact, there is evidence to the contrary showing that there were not only matters pending but that the respondent was instructed to act for the appellants in far more matters than those originally listed in the letter of appointment. [24] From Culaz & Associates’ letter dated 4.4.2011, it is clear that the appellants’ own new solicitors, Culaz & Associates acknowledged that the matters that the respondent was instructed to represent the appellants and handle on their behalf were still pending or not completed. In that same letter, it was plainly stated that the “first Notice of Change of Solicitors for Suit No: D7-26-9-2006”, pointing very clearly to the first of more to come of such Notices of Change of Solicitors. Such Notices would not be required if the matters had already been 12 concluded or disposed of, as per terms of the letters of appointment. Seeking a list of pending cases and dates at the High Court and the Court of Appeal so that the new solicitors could take over and cross refer with the appellants further confirm this conclusion. [25] On the matter of payment of his fees and costs, Culaz & Associates also informed the respondent in that same letter that “…we have been instructed by our clients to request from you the final account of fees paid to date and the balance payable for their verification”. The issue of time bar was not raised, not until the OS was filed, lending credence to the argument that it is more in the nature of an afterthought. [26] We find the reasoning of the learned Judge justified and well-grounded on facts, much of which emanated from the appellants themselves. There is, therefore, no basis to intervene in this appeal. [27] In any event, we agree with learned counsel for the respondent’s argument that since the parties had agreed that the legal fees and costs to be paid to the respondent “shall be the 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”, such fees and costs will be obviously dependent on the disposal of the assets of the parents’ estate. There is no evidence of such disposal. [28] It was further argued by the respondent that time bar cannot operate in view of section 26 of the Limitation Act 1953, relying on the decision of the English Court of Appeal in Phillips & Co v Bath 13 Housing Co-Op Ltd [2013] 2 All ER 475 in this regard. In this case, the solicitor sent his bills to his client who responded with shock at the amount charged by the solicitor, exclaiming that the amount was much higher than was anticipated or budgeted for. The Court of Appeal held that a solicitor’s claim for his fees was a debt that was not quantified until agreement by the client, assessment through taxation or subject matter of a judgment, that the letter questioning the amount or quantum was actually an acknowledgement of the existence of a debt that prevented time bar from setting in. [29] Given that the OS was filed at the behest of the appellants [the appellants had asked the respondent to have his bills taxed, amounting to an acknowledgment of the debt], it is arguable that the OS is not time barred by reason of this acknowledgment. Time, for the purpose of the Limitation Act 1953 runs only from the date when the appellants asked for detailed bill of costs to be taxed, that is, on 2.4.2012. Under such circumstances and for this added reason, the OS is not time barred. [30] The appellants had also raised their objections under section 126 of the Legal Profession Act 1976 - that the respondent was in any event out of time in applying for the taxation of their bill. This was relied on at the High Court and is also canvassed in this appeal. [31] Under section 126, an advocate and solicitor may apply for the taxation of the bill after the expiration of one calendar month, and within a year from the delivery of the bill of costs. The respondent is said to be well outside these permitted timelines: 14
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126. An order for taxation of costs to be made within 6 months of delivery of bill of costs
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(1) An order for the taxation of a bill delivered by any advocate and solicitor may be obtained by a petition as a matter of course by the party chargeable therewith, or by any person liable to pay the cost either to the party chargeable or to the advocate and solicitor, at any time within six months from the delivery of the bill, or, by the advocate and solicitor after the expiration of one calendar month, and within a year from, the delivery. [32] It was argued by the appellants that since the respondent had delivered the bill to the appellants on 16.3.2012, the application filed on 21.11.2016 was time-barred by virtue of section 126(1). [33] The learned Judge disagreed, reasoning that actually section 126(3) was applicable to the factual matrix of the case and not, section 126(1). Section 126(3) reads:
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(3) In any other cases where an advocate and solicitor and his client consent to taxation of a solicitor’s bill the Registrar may proceed to tax the bill notwithstanding that there is no order therefor. [34] Section 126(1) applies where the parties cannot agree to the amount(s) billed. Where there is consent, section 126(3) provides that the Registrar then just proceeds to tax the bill even though there is no order to that effect. [35] If one were to look back at the appellants’ letter dated 2.4.2012 sent by their new solicitors, it will be readily appreciated that the appellants had sought or requested the respondent for his consent 15 under section 126(3). Since the appellants have themselves agreed to taxation of the bill under section 126(3), we agree with the learned Judge that they are now estopped from resiling from that position, objecting to the respondent’s application by insisting that section 126(1) applies instead and that the OS is time-barred. [36] The Federal Court in Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565 had held that in the context of litigation, if a party by his words or conduct elects to pursue one of two alternative and mutually exclusive courses that were open or available “and thereby leads his opponent to believe that he has abandoned the other, he may, if the circumstances so warrant, be precluded from later changing course.” By its letter dated 2.4.2012, the appellants had sought and the respondent had given its consent to tax the bill under section 126(3). Thus, we agree with the findings of the learned Judge that the appellants were estopped from objecting after having elected to pursue the matter under section 126(3) of the Legal Profession Act 1976. [37] For all the reasons elucidated above, we agree with and affirm the decision reached by Her Ladyship. The appeal is therefore dismissed with costs. Dated: 30th May 2019 (MARY LIM THIAM SUAN) Judge Court of Appeal Malaysia 16 Counsel/Solicitors For the appellants: Sandosh Anandan (Sonia Deva Doss and Marcelle Sinnappa with him) Messrs Culaz & Associates No. 16, 2nd Floor Jalan KP1/1, Kajang Prima 43000 Kajang Selangor For the respondent: Anantha Krishnan (Shailender Bhar and K. Manoharan with him) Messrs K. Mano & Associates B-01-06, Gateway Kiaramas No. 1, Jalan Desa Kiara, Mon’t Kiara 50480 Kuala Lumpur
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