Majlis Daerah Hulu Terengganu v Tenaga Nasional Berhad (T-02(W)-988-05/2017)

1.

MOKHTAR BIN NGAH … RESPONDEN-RESPONDEN [Dalam Mahkamah Tinggi Malaya Di Kuala Terengganu Dalam Negeri Terengganu Guaman Sivil No. 22-41-2001 Antara Majlis Daerah Hulu Terengganu … Perayu Dan 1. Tenaga Nasional Berhad

Mokhtar Bin Ngah … Responden-Responden] 2 CORAM: UMI KALTHUM BINTI ABDUL MAJID, JCA YAACOB BIN MD SAM, JCA SURAYA BINTI OTHMAN, JCA JUDGMENT OF THE COURT INTRODUCTION [1] The Appellant/Plaintiff, Majlis Daerah Hulu Terengganu (“Majlis Daerah”), filed a Suit No. 22-41-2001 (“2001 suit”) against the 1st Respondent, Tenaga Nasional Berhad (“TNB”) and the 2nd Respondent, Mokhtar bin Ngah (“Mokhtar”) in the High Court of Kuala Terengganu to set aside the Consent Judgment order dated 9.4.2000 recorded in Suit No. 25- 08-1999 (“1999 suit”) entered into between Majlis Daerah and TNB. Majlis Daerah in the 1999 suit claimed against TNB a cumulative annual assessment for the period of 1999 till 2004 in respect of TNB’s holding in Kenyir Dam, Terengganu. Majlis Daerah was then represented by their solicitor Dato’ Mokhtar bin Ngah. The 1999 suit resulted in a Consent Judgment being recorded between parties with TNB agreeing to pay RM10,000,000.00 (Ringgit Malaysia ten million) to Majlis Daerah as cumulative annual assessment fees for five consecutive years from 1999 till

Since RM2,496,000.00 had been paid by TNB (out of the RM10,000,000.00) on 18.8.1999, a balance of RM7,504,000.00 was left and parties agreed that this balance should be paid in three instalments to Mokhtar’s firm, Messrs Mokhtar Ngah & Co. as solicitors for Majlis Daerah. 3 TNB then paid RM7,504,000.00 to Mokhtar. Mokhtar retained RM3,407,250.00 as his purported legal fees for services rendered in the 1999 suit and paid the balance to Majlis Daerah. It was due to the retention of the RM3,407,250.00 by Mokhtar that Majlis Daerah brought this 2001 suit to set aside the Consent Judgment order and to seek an order for Mokhtar to refund the entire sum of RM3,407,250.00 which Mokhtar had retained. The High Court in suit 2001, after a full trial, dismissed Majlis Daerah’s claim to set aside the Consent Judgment. The High Court however refused to entertain and thus did not make any decision on the claim for the refund of RM3,407,250.00, holding that a civil suit is not the right forum for such a claim and that a matter which involved a dispute as to legal fees should be referred to the Legal Profession Act 1976 (Act 166) (“LPA 1976”). It is from the decision of this 2001 suit by the High Court on 31.1.2011 that this appeal lies. BACKGROUND FACTS [2] The Majlis Daerah is a local government body incorporated under the Local Government Act 1976 (Act 171) (“LGA 1976”). Majlis Daerah’s primary function is to collect assessment fees for holdings defined under the LGA 1976 and to administer the District of Hulu Terengganu. [3] In 1999, Majlis Daerah issued to TNB a valuation list which is a notice of annual assessment for the period of 1999 till 2004 in respect of TNB’s holding in Kenyir Dam, Terengganu. TNB being dissatisfied with the annual valuation, objected to the valuation list pursuant to section 142 of the LGA 1976 on the grounds that the holding for which TNB was rateable was valued 4 beyond its rateable value. Majlis Daerah considered the objection and reduced the annual value of the holding as well as the rate of payment. The reduced rate of assessment against TNB was RM4,992,000.00 per year. TNB being dissatisfied with the revised valuation, appealed to the High Court in Suit No. 25-08-1999 (1999 suit) pursuant to section 145 of the LGA 1976. [4] Mokhtar was appointed by Majlis Daerah to act on their behalf in the High Court in respect of TNB’s appeal (1999 suit). Pending the hearing and disposal of the said appeal, Majlis Daerah alleged that Mokhtar, without the Majlis’s prior approval, entered into a Consent Judgment on 9.4.2000 for the payment of assessment totalling RM10,000,000.00 (Ringgit Malaysia ten million) by TNB to Majlis Daerah. The Consent Judgment also provided for Majlis Daerah to receive RM200,000.00 as agreed costs. [5] The terms of the Consent Judgment stated that the payments to Majlis Daerah are to be made to Mokhtar’s firm, Messrs Mokhtar Ngah & Co. as solicitors for Majlis Daerah. The terms also stated that TNB agreed to pay a total sum of RM10,000,000.00 as agreed assessment and RM200,000.00 as agreed costs. Since RM2,496,000.00 had been paid by TNB (out of the RM10,000,000.00) on 18.8.1999, TNB paid RM7,504,000.00 being the balance assessment unpaid and RM200,000.00 as agreed costs to Messrs Mokhtar Ngah & Co. Mokhtar then forwarded the sum of RM4,351,750.00 to Majlis Daerah on 23.1.2001 and retained RM3,152,250.00 as his professional legal fees. In addition, Mokhtar also retained the sum of RM200,000.00 which was paid to him as party and party costs. Thus, the total amount taken by Mokhtar was RM3,352,250.00. 5 [6] Majlis Daerah then filed a Suit No. 22-41-2001 (suit 2001) against TNB and Mokhtar to set aside the Consent Judgment dated 9.4.2000 on the basis that it was ultra vires the LGA 1976 as Mokhtar did not have the authority from Majlis Daerah to record it. Majlis Daerah also claimed against Mokhtar for the refund of the monies retained by Mokhtar as his purported legal fees. On 31.1.2011, the High Court in Kuala Terengganu heard the present action (suit 2001) and dismissed Majlis Daerah’s claim against TNB and Mokhtar with regard to the setting aside of the Consent Judgment. However, on the refund of the monies deducted as purported legal fees and retained by Mokhtar, the learned High Court Judge declined to decide on the claim, holding that a civil suit is not the right forum for such a claim and that a matter which involved a dispute as to legal fees should be made under the LPA

[7] Majlis Daerah, dissatisfied, appealed against the decision of the High Court dated 31.1.2011. There were essentially two grounds of appeal and they are as follows:

(i) the learned High Court Judge had erred in dismissing the application to set aside the Consent Judgment against Majlis Daerah and Mokhtar on the ground that Mokhtar did not have the authority to enter the Consent Judgment without the prior consent or approval of Majlis Daerah;

(i) 12 ….

(x) Mokhtar wrongfully double charged the District Council and made repeated charges in his bill; and

Mokhtar acted in conflict of interest when he agreed to the Consent Judgment. PARTICULARS …

(v) Mokhtar has also retained a sum of RM55,000.00 that had previously been paid by the District Council as fees;

By the matters aforesaid and the conduct of Tenaga and Mokhtar, the District Council has suffered loss and damage. Accordingly, the District Council prays: …

(C)

As against Mokhtar:- An Order that Mokhtar refunds the entire sum of RM3,407,250.00 to the District Council that he wrongfully appropriated as costs for services allegedly rendered to it in the 1999 proceedings;

In the alternative, an Order that Mokhtar refunds the said sum of RM3,407,250.00 to the District Council after deducting a fair and reasonable amount to be determined by this Honourable Court to represent his costs for acting in the 1999 proceedings.” [Emphasis added] [25] In such circumstances, where a claim for wrongful misappropriation had been specifically pleaded against Mokhtar and counsel for Majlis Daerah had particularised in detail the nature and conduct that amounted to misappropriation and consequently prayed for a refund of the entire sum misappropriated, the learned Judge was wrong to decline to entertain such a claim. The learned Judge’s disinclination to adjudicate was premised on his misconceived notion that a civil suit is a wrong forum for such a claim and that in matters which involved dispute as to legal fees should be brought 14 under the purview of the LPA 1976. In taking this stance, His Lordship had certainly erred and we were in agreement with counsel for Majlis Daerah that the learned Judge had failed to have regard to the fact that the monies that were taken by Mokhtar were statutory revenue and as a solicitor entrusted with the monies by Majlis Daerah, the appropriation by deducting a sum therefrom, for whatever reason, without the consent of Majlis Daerah, was untenable. As such, a civil suit was the correct forum and the court did have jurisdiction to adjudicate on the claim. Monies paid by TNB was statutory money Monies paid into Mokhtar’s firm as stakeholder and Mokhtar held as constructive trustee for Majlis Daerah [26] Majlis Daerah contended that the monies paid by TNB under the Consent Judgment was statutory revenue of a local authority. The monies which were assessment fees charged by Majlis Daerah for TNB’s holding of Kenyir Dam were payable by TNB to Majlis Daerah under section 39 of the LGA 1976 and had to be transmitted in its entirety to the Majlis Daerah’s Fund under section 40 of the same. Mokhtar’s action in arbitrarily appropriating RM3,352,250.00 was in violation of the LGA 1976 and amounted to a breach of trust. Hence on this ground alone, Majlis Daerah’s appeal should be allowed by this court. The cases of Westdeutsche Landesbank Girosentrale v Islington London Borough Council [1995] AC 699 and Paragon Finance Plc v D B Thakerar & Co (a firm) Paragon Finance Plc & Anor v Thimbleby & Co (a firm) [1999] 1 All ER 400 were cited in support. 15 [27] We were in agreement with counsel for Majlis Daerah’s contention that the monies paid by TNB to Mokhtar’s firm under the Consent Judgment were statutory revenue to be transmitted in its entirety into Majlis Daerah’s Fund and that the retention by Mokhtar of RM3,352,250.00 was in violation of the LGA 1976 and amounted to a breach of trust. Further, the monies were paid into Mokhtar’s firm as stakeholder and Mokhtar, as solicitor for the Majlis Daerah, held the monies as a constructive trustee on behalf of Majlis Daerah. The terms of the Consent Order dated 9.4.2000 are as follows: “DALAM MAHKAMAH TINGGI MALAYA DI KUALA TERENGGANU DALAM NEGERI TERENGGANU DARUL IMAN USUL PEMULA NO.25-08-1999 Dalam Perkara Rayuan Oleh Tenaga Nasional Berhad menurut Seksyen 145, Akta Kerajaan Tempatan, 1976. Dan Dalam perkara keputusan Mesyuarat Jawatankuasa Penilaian Majlis Daerah Hulu Terengganu bertarikh 22/7/99 berkenaan dengan Penilaian Nilai Tahunan dan Cukai Taksiran yang dikenakan oleh Majlis Daerah Hulu Terengganu ke atas Lot PT 5068, Mukim Jenagor, Daerah Hulu Terengganu, Terengganu (Stesen Janaelektrik Sultan Mahmud, Tasik Kenyir) Dan Dalam perkara Aturan 8, Kaedah-Kaedah Mahkamah Tinggi, 1980. ANTARA … PEMOHON DAN MAJLIS DAERAH HULU TERENGGANU … RESPONDEN 16 DIHADAPAN YANG ARIF HAKIM DATO’ HAJI ABDUL KADIR BIN SULAIMAN HAKIM, MAHKAMAH TINGGI, KUALA TERENGGANU, PADA 9 HARIBULAN APRIL, 2000 DALAM MAHKAMAH TERBUKA PENGHAKIMAN TINDAKAN INI TELAH DITETAPKAN untuk perbicaraan pada 3hb November, 1999 dengan kehadiran Encik Gurmel Singh Peguamcara bagi pihak Pemohon dan Encik Mokhtar Ngah Peguamcara bagi pihak Responden dan telah ditunda kepada 14hb Februari, 2000 dengan kehadiran Encik Mohamad Illiayas dan Encik Gurmel Singh Peguamcara bagi pihak Pemohon dan Encik Mokhtar Ngah Penguamcara bagi pihak Responden dan ditunda kepada 2hb April, 2000 dengan kehadiran Encik Gurmel Singh Peguamcara bagi pihak Pemohon dan Encik Mokhtar Ngah Peguamcara bagi pihak Responden dan ditunda kepada 9hb April, 2000 dengan kehadiran Encik Gurmel Singh Peguamcara bagi pihak Pemohon dan Encik Mokhtar Ngah Peguamcara bagi pihak Responden. SETELAH MENDENGAR Peguamcara-Peguamcara tersebut ADALAH DENGAN INI DIPERINTAHKAN DENGAN PERSETUJUAN seperti berikut:

Cukai Taksiran Tahunan bagi harta yang dipegang di bawah Lot PT 5068, Mukim Jenagor, Daerah Hulu Terengganu, Terengganu pada kadar RM2,000.000.00 setahun berkuatkuasa dari 1hb Julai, 1999 untuk lima tahun berikutnya sehingga 30hb Jun, 2004 berjumlah RM10,000,000.00 handaklah dibayar oleh Pemohon kepada Responden seperti di dalam Perenggan 2 di bawah.

Setelah mengambil kira RM2,496,000.00 pendahuluan yang telah dibayar oleh Pemohon kepada Responden pada 18hb Ogos, 1999 maka baki yang perlu dibayar oleh Pemohon dari jumlah RM10,000,000.00 di atas adalah RM7,504,000.00. Masa untuk pembayaran baki RM7,504,000.00 tersebut adalah seperti berikut: i) Bayaran Pertama sebanyak RM2,500,000.00 dibuat di dalam tempoh 21 hari dari tarikh perintah ini; ii) Bayaran Kedua sebanyak RM2,500,000.00 dibuat sebelum atau pada 1hb Julai, 2000; dan iii) Bayaran Ketiga sebanyak RM2,504,000.00 dibuat sebelum atau pada 31hb Januari, 2001.

Pemohon membayar sebanyak RM200,000.00 kepada Responden/Peguamcaranya sebagai kos dipersetujui dalam tempoh 7 hari dari tarikh perintah.

Semua pembayaran di atas hendaklah dibayar kepada Tetuan Mokhtar Ngah & Co. sebagai Peguamcara Responden. 17 Bertarikh pada 9haribulan April, 2000. ______________________ Penolong Kanan Pendaftar Mahkamah Tinggi Kuala Terengganu” [Emphasis added] [28] The English translation of the Consent Order is as follows: “IN THE HIGH COURT OF MALAYA AT KUALA TERENGGANU IN THE STATE OF TERENGGANU DARUL IMAN ORIGINATING MOTION NO.25-08-1999 In the matter of the Appeal by Tenaga Nasional Berhad pursuant to Section 145, Local Government Act, 1976. In the matter of the decision of the Meeting of the Valuation Committee of the Hulu Terengganu District Council dated 22/7/99 regarding the Annual Value and Assessment imposed by the Hulu Terengganu District of Hulu Terengganu, Terengganu (Sultan Mahmud Power Station, Tasik Kenyir) In the matter of Order 8, Rules of the High Court, 1980. BETWEEN … APPLICANT HULU TERENGGANU DISTRICT COUNCIL … RESPONDENT BEFORE THE HONOURABLE JUSTICE DATO’ HAJI ABDUL KADIR BIN SULAIMAN JUDGE, HIGH COURT, KUALA TERENGGANU, THIS 9 DAY OF APRIL, 2000 IN OPEN COURT 18 JUDGMENT THIS ACTION HAVING BEEN FIXED for hearing on 3rd November, 1999 in the presence of Mr Gurmel Singh of Counsel for the Applicant and Encik Mokhtar Ngah of Counsel for the Respondent and having been adjourned to 14th February, 2000 in the presence of Encik Mohamad Illiayas and Mr Gurmel Singh of Counsel for the Applicant and Encik Mokhtar Ngah of Counsel for the Respondent and having been adjourned to 2nd April, 2000 in the presence of Mr Gurmel Singh of Counsel for the Applicant and Encik Mokhtar Ngah of Counsel for the Respondent and adjourned to 9th April, 2000 in the presence of Mr Gurmel Singh of Counsel for the Applicant and Encik Mokhtar Ngah of Counsel for the Respondent. UPON HEARING Counsel as aforesaid IT IS HEREBY ORDERED BY CONSENT as follows:

Annual Assessment for the property held under Lot PT 5068, Mukim Jenagor, Daerah Hulu Terengganu, Terengganu at the rate of RM2,000.000.00 per annum with effect from 1st July, 1999 for five consecutive years until 30th June, 2004 amounting to RM10,000,000.00 is to be paid by the Applicant to the Respondent as set out in Paragraph 2 below.

Having taken into account the advance of RM2,496,000.00 which had been paid by the Applicant to the Respondent on 18th August, 1999 thus the remainder that has to be paid by the Applicant from the sum of RM10,000,000.00 above is RM7,504,000.00. The time for payment of the said remainder RM7,504,000.00 is as follows: i) First payment of RM2,500,000.00 to be made within 21 days from the date of this order; ii) Second payment of RM2,500,000.00 to be made by or before 1st July, 2000; and iii) Third Payment of RM2,504,000.00 to be made by or before 31st January, 2001.

The Applicant to pay the sum of RM200,000.00 to the Respondent/its Solicitors as agreed costs within 7 days from the date of this order.

All payments above are to be paid to Messrs Mokhtar Ngah & Co. as Solicitors for the Respondent. Dated the 9th day of April, 2000. ______________________ Senior Assistant Registrar High Court Kuala Terengganu” [Emphasis added] 19 [29] From a perusal of the Consent Order, the term at paragraph 4 is very clear that all payments under the Consent Order are to be paid to Messrs Mokhtar Ngah & Co. as Solicitors for the Respondent. As such, and as stated earlier, Mokhtar as solicitor of the Majlis Daerah held the monies in trust, as stakeholder for Majlis Daerah. Whether Mokhtar has a lien or charging order to the monies retained [30] Mokhtar argued that he has at common law a right or lien over the monies he retained since it was due to his efforts that Majlis Daerah was able to collect the assessment fees due to them through the Consent Judgment that was recorded by him as solicitor for Majlis Daerah with TNB. In this court’s case of Messrs Roland Cheng & Co v. Konkamaju Sdn Bhd [2014] 1 MLJ 894 CA, the court held that at common law a solicitor has a right or lien to retain property in his possession until the full amount of the solicitors taxed costs payable by the client is paid. At paragraph 25 of that case it is stated as follows: “[25] At common law a solicitor has a right or lien to retain property in his possession until he is paid costs due to him in his professional capacity - see para 226 Halsbury’s Laws of England Vol 44 (4th Ed). In the same volume of Halsbury’s Laws of England, at para 229 the following passage is found: A solicitor having a retaining lien over property in his possession is entitled to retain the property as against the client, and all 20 persons claiming through him and having no better right than the client, until the full amount of the solicitors taxed costs payable by the client is paid.” [Emphasis added] [31] On the other hand, Majlis Daerah submitted that the monies retained by Mokhtar are statutory revenue which go into the Local Authority Fund under section 40 of the LGA 1976. Majlis Daerah argued that Mokhtar did not in law have a lien on the monies paid by TNB to Majlis Daerah and even if there was a right or a lien on the monies, Mokhtar did not act in accordance with the law in that he did not apply for a charging order from the court under section 123 of the LPA 1976 to retain the monies pending taxation of his bill under section 126 of the same. [32] Sections 123 and 126 of the LPA 1976 state as follows:

“Advocate and solicitor entitled to charge on property for costs Any court in which an advocate and solicitor has been employed to prosecute or defend any suit, matter or proceeding may at any time declare the advocate and solicitor entitled to a charge on the property recovered or preserved in such suit, matter or proceeding for such advocate and solicitor’s taxed costs in reference to that suit, matter or proceeding, and may make such orders for taxation of the costs and for raising money to pay, or for paying, the costs out of the property as it thinks fair and reasonable, and all conveyance and acts done to defeat, or operating to defeat, that charge shall, except in the case of a conveyance to a bona fide purchaser for value without notice, be void as against to advocate and solicitor. 21 …” “An order for taxation of costs to be made within 6 months of delivery of bill of costs.

(1) An order for the taxation of a bill of costs 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. …” [Emphasis added] [33] Having perused the case of Messrs Roland Cheng (supra) and sections 123 and 126, though we agreed that Mokhtar may have a right or lien over the monies under common law, but Mokhtar had failed to adhere to the statutory provisions of section 123 to apply to the court for a charging order and then subsequently to apply for an order for taxation of costs after delivery of his bill as provided under section 126 of LPA 1976. [34] As such, in this matter we were in agreement with the contention by Majlis Daerah that Mokhtar must obtain a charging order from the court under section 123 pending taxation of his bill under section 126. His right or lien over the monies from the proceeds of the Consent Judgment, whether under common law or statute, in our view was not enforceable unless he had obtained a charging order from the court in which he had acted as solicitor and in our instant case, in the 1999 suit where the Consent Judgment was recorded on 9.4.2000. This court’s case of Zulpadli & Edham v Inai 22 Offshore & Marine Engineering Sdn Bhd (in liquidation) [2011] 4 MLJ 161 is in point where it was held at paragraph 20 as follows: “[20] In effect, s123 of the LPA stipulates that the court to declare an advocate and solicitor entitled to a charge on the property recovered or preserved is the court in which that advocate and solicitor has been employed to prosecute or defend, and in which that property has been recovered or preserved. The court below was not that court. As a matter of fact, there was no such court, as the property (RM12,000,000) was not recovered under any judgment. It comes down to this. The lien of the appellant, if any, be it under common law or statute, could only be enforced by a charging order (see Saw Ching Ho & Anor v Tan Ah Kui [1970] 1 MLJ 104, where Sharma J held that with a charging order under s 89 of the Advocates and Solicitors Ordinance 1947, 'the costs have to be taxed', and Emden v Carte (1881) 19 ChD 311, where it was held by Fry J that it is the duty of the judge, when declaring a solicitor entitled to a charge upon the property recovered or preserved in an action, to limit the order to costs properly incurred in recovering or preserving the property; but see In re Clayton; Collins v Clayton and Reade [1940] 1 Ch 539, where it was held by Moron J that the general principle is to give a solicitor a reward and therefore a wider charge).” [Emphasis added] 23 There was an oral agreement between Majlis Daerah and Mokhtar for Mokhtar to deduct his legal fees from the proceeds of the Consent Judgment [35] Mokhtar submitted that there was an oral agreement between him and the Yang diPetua (YDP) that he can deduct RM3,152,250 from the monies received from TNB as his legal professional fees and that he had notified Majlis Daerah as required under rule 7(a)(iv) and (v) of the Solicitors Accounts Rule 1990. Majlis Daerah contended that there was no such oral agreement. In cross-examination of Mokhtar at Bahagian B Jilid 1/3 Record of Appeal, page 266, Mokhtar who was the 2nd Respondent when questioned on whether there was an agreement reached on the figure RM3.1 million said this: “Q: Where does the figure of RM3.1 million mentioned? Persetujuan adalah secara lisan dan dimaklumkan dan dipersetujui oleh YDP dan disahkan oleh tandatangan beliau dan juga pembayaran ini adalah diatas bil/invois kami seperti mana di E p114/D23. With whom in MDHT did you reach this oral agreement lodged? YDP sendiri, Dato’ Alim bin Muda. The YDP is PW3 Dato’ Alim bin Muda who testified earlier? Benar. His testimony was that there was no such oral agreement. Your comment. Beliau telah menafikan segalanya dan saya percaya di atas nasihat peguamcara terkini.” 24 [36] From the above notes of evidence, Mokhtar had failed to prove that there was an oral agreement between the Yang diPertua (YDP) Dato’ Alim bin Muda (PW3) with Mokhtar in that Mokhtar could deduct RM3,352,250.00 from the monies received from TNB as his legal professional fees. In cross-examination, Mokhtar had agreed that PW3 had in his testimony denied that there was such an oral agreement and explained that it was his belief (Mokhtar) that such denial was due to the advice received by PW3 from its current solicitor. Further, there was no proof either that there was an agreement that Mokhtar could keep the agreed costs of RM200,000.00 since this was not elicited in evidence and neither was there an invoice issued to that effect. Disciplinary Board struck Mokhtar of the Rolls for misconduct. Mokhtar’s appeal to the High Court, Court of Appeal and Federal Court were dismissed and the decision of the Disciplinary Board upheld [37] Mokhtar was struck off the Rolls of the Advocate and Solicitors of the High Court in Malaya due to his misconduct. Majlis Daerah had lodged a complaint with the Disciplinary Board of the Malaysian Bar concerning the misconduct of Mokhtar in retaining Majlis Daerah’s monies without any prior notice or consent. The Disciplinary Board held that he had misconducted himself under section 99 of the LPA 1976 and ordered that he be struck off the Rolls. He appealed against the decision under section 103E of the LPA 1976 and the High Court dismissed his appeal and upheld the decision of the Disciplinary Board. Dissatisfied, he appealed to the Court of Appeal and on 7.4.2015 the Court of Appeal dismissed his appeal and upheld the High Court’s Order which affirmed the decision of the Disciplinary Board to remove 25 him from the Rolls. In this court’s decision of Mokhtar Ngah v Yang Dipertua Majlis Daerah Hulu Terengganu & Anor [2016] 2 MLRA 492 at paragraphs 29, 35 and 36, this court found as follows: “[29] The DC found that the conduct of the appellant “was motivated by self-interest, dishonest in nature and unbefitting of an advocate and solicitor.” Having regard to the seriousness and gravity of the misconduct, the DC recommended that the appellant be struck off the Roll. We have also scrutinised the DC’s report dated 30.11.2012. We note that the DC report is a comprehensive report comprising of eleven pages. There is nothing to indicate that the DC took into account any irrelevant factor or failed to consider any relevant factor in making their findings. We are satisfied that the DC’s decision is based on a proper consideration and evaluation of the oral and documentary evidence and arguments relating to the Impugned Consent Judgment and the legal fees. … [35] The DC’s recommendation to the DB was made after a full and thorough evaluation of the evidence adduced at the DC hearing. The fact remains that the complaint relates to the appellant’s misconduct in misappropriating the substantial sum of RM3,407,250.00 belonging to the respondent. The DC found that the appellant’s act of deducting the monies without any prior notice to the respondent is in violation of r 7(a)(v) of the Solicitors’ Account Rules 1990. More significantly, the DC found that the appellant’s conduct in entering into the Impugned Consent Judgment without first obtaining the respondent’s consent and the act of deducting the said sums without giving prior notice to the respondent was motivated by self-serving interest, dishonest in nature and unbefitting of an advocate and solicitor. Accordingly, we do not think that the argument advanced make out a strong case to warrant curial interference with the sentence imposed. 26 [36] It is trite law that the court takes a very serious view of improper dealings with client’s money such that the severe sanction of striking off the Rolls is justified.” [38] Mokhtar again appealed to the Federal Court under section 103E of the LPA 1976 and on 19.1.2017 the Federal Court dismissed his appeal with costs. The courts took a serious view of Mokhtar’s misconduct and affirmed the decision of the Disciplinary Board which found that Mokhtar’s “act of deducting the monies without any prior notice to the respondent is in violation of rule 7(a)(v) of the Solicitors’ Account Rules 1990” and his conduct “was motivated by self-serving interest, dishonest in nature and unbefitting of an advocate and solicitor” and that “having regard to the seriousness and gravity of the misconduct, the DC recommended that the appellant be struck off the Roll.” The Court of Appeal found that “there is nothing to indicate that the DC took into account any irrelevant factor or failed to consider any relevant factor in making their findings.” In fact, they were satisfied that the “DC’s decision is based on a proper consideration and evaluation of the oral and documentary evidence and arguments relating to the Impugned Consent Judgment and the legal fees” and they felt that the argument advanced by Mokhtar did not “make out a strong case to warrant curial interference with the sentence imposed.” [39] In the upshot, based on the reasons above, we were of the view that the High Court Judge had erred in law in declining to adjudicate on the claim by Majlis Daerah for the refund of the monies retained by Mokhtar. The High Court had the jurisdiction to hear the case and make a decision on it. As such, appellate intervention was warranted and we accordingly allowed the 27 appeal against Mokhtar with no order as to costs. We set aside the order of the High Court dated 31.1.2011 to the extent that the Appellant Majlis Daerah’s claim against Mokhtar in prayer 19(C)(7) of the statement of claim, as amended, for the refund of the sum of RM3,352,250.00 retained by Mokhtar was allowed. The sum of RM5,000.00 as costs to be paid to Mokhtar in the same order was also set aside. Deposit, if any, is refunded. -sgd-Dated: 8th August 2019 (SURAYA OTHMAN) Judge Court of Appeal Malaysia 28 CASE(S) REFERRED TO: 1) Westdeutsche Landesbank Girosentrale v Islington London Borough Council [1995] AC 699; 2) Paragon Finance Plc v D B Thakerar & Co (a firm) Paragon Finance Plc & Anor v Thimbleby & Co (a firm) [1999] 1 ALL ER 400; 3) Messrs Roland Cheng & Co v. Konkamaju Sdn Bhd [2014] 1 MLJ 894 CA; 4) Zulpadli & Edham v Inai Offshore & Marine Engineering Sdn Bhd (in liquidation) [2011] 4 MLJ 161;and 5) Mokhtar Ngah v Yang Dipertua Majlis Daerah Hulu Terengganu & Anor 2 MLRA 492. LEGISLATION REFERRED TO: 1) Sections 39 and 40 of the Local Government Act 1976 (Act 171); 2) Sections 99, 103E, 123 and 126 of the Legal Profession Act 1976 (Act 166); and 3) Rule 7(a)(iv) and (v) of the Solicitors Accounts Rule 1990. COUNSEL: For the Appellant - Dato’ Stanley Isaacs (with him R. Vasanthi and Shara Ann Isaacs) Messrs Isaacs Tan Tingkat 17, Menara Hap Seng Jalan P. Ramlee 50250 Kuala Lumpur For the Respondent - Dato’ Mokhtar Bin Ngah Messrs Mokhtar Ngah & Co No. 17, Tingkat 1 Taman Sri Intan Jalan Sultan Omar 20300 Kuala Terengganu 29