Nora Hayati Binti Ismayatim v Sam Sau May (W-02(A)-739-04/2017)

MAJLIS PEGUAM MALAYSIA … RESPONDEN-RESPONDEN (Dalam Mahkamah Malaya di Kuala Lumpur Dalam Negeri Wilayah Persekutuan Bahagian Rayuan dan Kuasa-Kuasa Khas Usul Pemula No.: 17D-16-05/2015 Dalam perkara di bawah Seksyen 103(D)(2), Seksyen 103D(4) dan Seksyen 103D(5) Akta Profesion Undang-Undang 1976 Dan Dalam perkara Nora Hayati binti Ismayatim beramal di bawah nama dan gelaran Tetuan Nora Hayati & Associates, No. 16- 1, Jalan 65C, Off Jalan Pahang Barat, Pekeliling Business Centre, 53000 Kuala Lumpur 2 Dan Dalam perkara keputusan Re: DC/13/8289 bertarikh 24-07-2014 oleh Jawatankuasa Tatatertib terhadap Nora Hayati binti Ismayatim Dan Dalam perkara keputusan Lembaga Tatatertib Peguam-Peguam bertarikh 14- 05-2015 Dan Dalam perkara Aduan No. DC/13/8289 yang dibuat oleh Sam Sau May terhadap Nora Hayati binti Ismayatim Antara Nora Hayati binti Ismayatim … Pemohon Dan Sam Sau May … Responden Dan Majlis Peguam Malaysia … Pencelah CORAM: DR. HAJI HAMID SULTAN BIN ABU BACKER, JCA DR. BADARIAH HJ. SAHAMID, JCA YAACOB BIN HJ. MD SAM, JCA 3 JUDGMENT OF THE COURT [1] This is an appeal by the Applicant/Appellant against the decision of the learned High Court Judge dated 23.3.2017 which upheld the decision of the Disciplinary Board dated 14.5.2015 in striking out the Applicant from the Roll of Advocates and Solicitors. Background Facts [2] The narration of the salient facts are derived primarily from the learned Judge’s ‘Grounds of Judgment’. For ease of reference, parties will be referred to as they were in proceedings before the High Court. [3] The Applicant is an advocate and solicitor practising under the name and style of Messrs. Nora Hayati & Associates. [4] On 7.3.2013 the Respondent lodged a complaint against the Applicant for amongst others:

that the Applicant had failed to honour her undertakings to deliver a sum of RM291,060.00 to the Respondent; and/or 4

(ii) that the Applicant had misused the said money. The Disciplinary Committee’s Findings [5] After hearing the Applicant and the Respondent on 29.4.2014, 13.6.2014, 16.6.2014 and 17.6.2014, the Disciplinary Committee (DC) made the following findings:

DC accepted the evidence of the copies of cheques issued by the Applicant in the sum of RM291,060.00 as being reflective of the true amount owing to the Respondent complainant.

(ii) There was sufficient evidence that the Applicant had failed to carry out her fiduciary duty and responsibility in honouring the Client’s Account cheque issued by the Applicant and/ or her firm Nora Hayati & Associates. Therefore DC found that the Applicant had breached her undertakings given on 11.7.2007 and 25.7.2008. As such, DC unanimously found that the Applicant was guilty of conduct unbecoming of an Advocate and Solicitor.

(iii) With regards to the second complaint, DC was unable to come to a proper finding on the same due to a lack of 5 evidence. In all circumstances, based on the documentary and oral evidence given by the Respondent and her husband during DC’s disciplinary hearing, the Respondent had proven that the Applicant owed the Respondent a sum of RM291,060.00. The Disciplinary Committee’s Recommendations [6] Based on the findings abovementioned, DC recommended the following punishments to the Disciplinary Board (DB).

the Applicant to be suspended for a period of no less than 12 months;

(ii) fine of RM5,000.00; and

(iii) an order for restitution of the monies owed to the Respondent in the amount of RM291,060.00 be made by the Applicant, failing which the Applicant be struck off the Rolls. The Disciplinary Board’s Decision [7] After DB had received the DC’s findings and recommendations, on 15.1.2015, DB made the following observations: 6

DB agreed with DC’s findings that the Applicant had breached her Solicitor’s undertakings to pay the Respondent. At all material times, the Applicant had committed a serious misconduct in issuing four (4) separate cheques from her Solicitor’s Clients’ Account respectively on 30.9.2007, 30.1.2008, 30.1.2009 and 31.1.2009, which cheques were subsequently dishonoured.

(iii) DB also found that the Applicant’s allegations that she had issued the said cheques out of fear, intimidation and that the Respondent is not her client to be not credible; and

(iii) the Applicant’s actions were a very serious act of misconduct involving a large sum of money. [8] Based on the above grounds, DB affirmed DC’s findings on liability. However, DB disagreed with DC’s recommendations on punishment against the Applicant in view of the seriousness of the misconduct of the Applicant. [9] On 14.5.2015, DB had fixed a hearing which was attended by the Applicant and her solicitors. After hearing the Applicant’s submissions, DB affirmed the findings of liability made by DC 7 and ordered restitution in the sum of RM291,060.00 to be paid by the Applicant to the Respondent within one (1) month from the date of the order which fell on 13.6.2015. DB also ordered that the Applicant be struck out from the Roll of Advocates and Solicitors effective within 21 days of the order which fell on 4.6.2015. [10] On 20.5.2015, the Applicant filed Originating Motion to appeal to the High Court against the decision of the DB. The High Court [11] The issues for consideration before the High Court were as follows:

Whether the DB had erred in law in the failure to frame any charge against the Applicant;

(ii) Whether the Applicant had given guarantees instead of undertakings;

(iii) Whether the Applicant not bound by her undertakings as the Respondent is not her client; 8

(iii) Whether there was a lack of consideration by the Applicant when giving the undertakings; and

Whether the DC is bound to mention the standard of proof applied in its findings. Findings and Decision of the High Court [12] The findings and decision of the High Court in respect of the issues raised by the Applicant may be summarised as follows:

There is no requirement under the Legal Profession Act, 1976 or the 1994 Rules which require a charge to be framed against the Applicant. At p. 8 para 12 and 13 of the learned Judge’s ‘Grounds of Judgment’ it was stated: “… The DB and DC was at liberty to proceed with the disciplinary proceedings against the (1st) Respondent without having to specifically frame a formal charge against him provided the procedure adopted was not in breach of any specific provision of the Act and did not result in a denial of natural justice to the (1st) Respondent (See Lembaga Jurutera Malaysia v Leong Pui Kun [2009] 2 MLJ 36; Lau Keen Fai v Lim Ban Kay [2011] 3 CLJ 213). 9 In addition, the Applicant was represented by her counsel before the hearings of the DC and DB and was given the opportunity to explain and exculpate herself.

The Applicant’s undertakings to the Respondent were given in her professional capacity and not in her personal capacity. In this respect the contents of the Applicant’s undertakings support this finding.

Even if the undertakings were given in the Applicant’s personal capacity, the DB’s order should not be disturbed as the Applicant had acted in breach of section 94(3) of the LPA which defines ‘misconduct’ in wide sense beyond misconduct in a professional capacity only.

The words used by the Applicant can clearly be construed as an undertaking and not a guarantee.

Whether or not the Respondent was her client, the Applicant is bound by her undertakings to the Respondent. (Tan Kau Tiah v Tetuan Teh Kim Teh, Salina & Co & Anor [2010] 4 CLJ 914). 10

The Applicant’s undertaking to the Respondent is valid as the terms are clear and unambiguous and there is no requirement for consideration. (See Ng Kian Wan v Choo Keng Hee & Anor [2014] 7 MLJ 41).

The failure of the DC to mention the standard of proof applied in its findings does not justify an inference that the DC had failed to have regard to the same. (See Au Kong Weng v Bar Committee, Pahang [1980] 1 MLRA 475). [13] Based on the aforementioned findings, the learned Judge affirmed the findings and decision of the DB on liability and punishment and dismissed the Applicant’s appeal. Grounds of Appeal [14] The Applicant’s primary grounds of appeal before us may be summarised as follows:

The learned Judge had erred in law and in fact in her failure to consider that DB and DC had erred in their finding that the Applicant owes a fiduciary duty to the Respondent when the DC was unable to determine whether the Respondent is a party to the Sale and Purchase Agreement. 11

The learned Judge had erred in law and fact in her failure to consider that the DB and DC had ordered the Applicant to restitute the sum of RM291,060.00 when they were unable to make a finding that the Respondent is the client of the Applicant.

The learned Judge had erred in law and fact in her failure to consider that the DC and DB had made findings against the Applicant which were not within the terms of complaints made by the Respondent against the Applicant. The complaints of the Respondent was that the Applicant’s breach of fiduciary duty to honour a Client’s account cheque issued by the Applicant and/or her firm Messrs. Nora Hayati & Associates and wrongful misuse of Client’s money. The finding of the DC and DB that the Applicant had breached her undertaking to the Respondent is a matter outside the complaints lodged by the Respondent against the Applicant.

The learned Judge erred in law and fact in her failure to consider that the DB and DC had failed to address its mind to the standard of proof applicable when they made a finding of liability against the Applicant. 12

The learned Judge failed to consider that the DB had erred in law in its failure to accept the recommendations of the DC as well as its failure to give reasons for not accepting the DC’s recommendations on punishment against the Applicant. This was in breach of the mandatory provision of section 103D of the Legal Profession Act 1976. The grounds of decision of the DB dated 15.10.2017 was only furnished to the 2nd Respondent very much later on 29.09.2015.

The learned Judge failed to consider that the DB failed to take into account the principles of proportionality in determining the punishment against the Applicant. OUR DECISION [15] After careful consideration of counsels’ oral and written submissions as well as the Appeal Records, we found no appealable error in the learned Judge’s findings of fact or application of law to warrant appellate intervention. We therefore affirmed the decision of the learned Judge and dismissed this appeal with no order as to costs. We give our reasons below. 13 [16] In this appeal before us, the Applicant had raised similar issues before the learned Judge. Amongst the issues raised was the position of the Applicant vis a vis the Respondent. The contention of the Applicant is that the Respondent, not being a Client of the Applicant means that there cannot be a fiduciary duty owed by the Applicant to the Respondent, as the same can only arise within a solicitor-client relationship. As a corollary, the Applicant who was acting in a personal and not a professional capacity in giving her undertaking to the Respondent cannot be liable for misconduct pursuant to the Legal Profession Act 1976. [17] The learned Judge had perused the content of the undertaking given by the Applicant to the Respondent and agreed with the findings of the DC and the DB that contrary to the contention of the Applicant, the undertaking given was in clear and unambiguous terms given by the Applicant to the Respondent in her capacity as an Advocate and Solicitor and not in her personal capacity. (Exhibit A at p. 54 and 64 of the Applicant’s Affidavit in Support). The content of the 1st undertaking dated 11.7.2007 is reproduced below: “In consideration of the sum of Ringgit Two Hundred and Ninety One Thousand and Sixty (RM291,060.00) due to you from Messrs. Nora Hayati & Associates, I, Nora Hayati bte Ismayatim 14 (NRIC No. A0687008), practicing under the name and style of Nora Hayati & Associates (sic), Advocates & Solicitors of No. 8, First Floor, Jalan Inai, Off Jalan Imbi, 55100 Kuala Lumpur Do Hereby Undertake to honor the said sum to you on or before 30th day of September 2007.” [18] We note also that the DC and the DB had made findings that the Applicant had committed a serious misconduct in issuing four (4) separate cheques from her Solicitor’s Client’s Account respectively on 30.9.2007, 30.1.2008, 30.1.2009 and 31.1.2009 which were subsequently dishonoured. Refer to Core Bundle (tab 11) which shows a cheque dated 30.09.2007 issued for a sum RM291,060.000. The cheque was issued by the Applicant and signed above the words NORA HAYATI & ASSOCIATES, Client’s Account. The cheque was issued to the Respondent as payee. The Applicant has admitted issuing the cheques as exhibited but contended that payment on the said cheques were stopped as no money was due to the Respondent. [19] Both the DC and DB were not persuaded by the submissions of the Applicant that she had issued the four cheques in the mistaken belief that money was owed to the Respondent. DB had also found no truth in the Applicant’s allegations that she had issued the said cheques out of fear and intimidation. Thus, on the evidence there is no doubt that the 15 Applicant owed the Respondent the amount abovementioned and had issued the four cheques to the Respondent pursuant to her undertaking in respect of the same. [20] With regard to the issue raised by the Applicant that the Respondent was not a client, we agree with the finding of the learned Judge that once the Applicant has given his undertaking to the Respondent, she is bound to honour it, irrespective of whether the Respondent was a client. Reference was made to the case of Tan Kau Tiah v Tetuan Kim Teh, Salina & Co & Anor (supra) where the Court of Appeal held that an undertaking made by a solicitor must be honoured. At p. 585, para. 37, Abdul Malik Ishak, JCA had stated: “There is no difference between an undertaking given by a solicitor simpliciter and an undertaking given by a solicitor who holds property as a stakeholder. It is still an undertaking of a solicitor.” [21] In addition, we agree with the view adduced by the intervener, Majlis Peguam Malaysia that the Legal Profession Act 1976 imposes on the members of the Legal Profession a duty to conduct themselves with propriety whether in their professional or personal capacity. Section 94 of the Legal 16 Profession Act 1976 Rules and Orders provides powers of Disciplinary Board to strike off the Roll, suspend for misconduct etc. Section 94(3) of the Legal Profession Act 1976 provides as follows: “[3] For the purpose of this part, “misconduct” means conduct or omission to act in Malaysia or elsewhere by an advocate and solicitor in a professional capacity or otherwise which amounts to grave impropriety and includes…” (Emphasis added) Any other interpretation would clearly be unreasonable as it would create an artificial distinction in that solicitors are mandated to act with propriety in their professional capacity, but could act with impropriety in their personal capacity! [22] Thus, we find no reasons to depart from the concurrent findings of the DC, DB and the High Court in this respect. [23] In respect of the issue raised by the Applicant on the failure of the DB and DC to address their minds to the standard of proof applicable when they made a finding of liability against the Applicant, we are of the considered view that the learned Judge was correct in the finding that the failure to mention the standard 17 of proof would not justify an inference of a failure to have regard to it. The Federal Court in the case of Au Kong Weng v Bar Committee, Pahang [1980] 2 MLJ 90 at p.91 had stated as follows: “It is a question for the committee to decide, first, whether the facts alleged in the charge had been proved beyond reasonable doubt and secondly whether the appellant in relation to those facts, was guilty of such conduct. The absence in the Committee’s determination of any mention of the standard of proof does not justify an inference that it had failed to have regard to it.” [24] The Applicant has also raised the failure of the DB to record the reasons for the rejection of the DC’s recommendations for a punishment that was lesser than that meted out by the DB against the Applicant. Such a failure it was contended contravened section 103D(1) of the Legal Profession Act 1976 which provides as follows: “103D (1) After consideration of the report of the Disciplinary Committee, the Disciplinary Board may make an order affirming or rejecting the finding or recommendation of the Disciplinary Committee and if the Disciplinary Board rejects the finding or 18 recommendation of the Disciplinary Committee, the Disciplinary Board shall record the reasons for the rejection”. [25] We note that while the abovementioned provision mandates the Board to record reasons for rejecting the recommendation of the DC, the provision does not set a specific timeframe to adhere to the said provision. In the DB’s letter dated 15.10.2015 (Exhibit KCY-2), DB had complied with the abovementioned requirement and gave reasons for the greater punishment meted out to the Applicant. The grounds were stated as extracted from the minutes of the meeting on 14 May 2015, the date of DB’s order. The letter abovementioned is reproduced below: Decision: 1. The Board noted that the Respondent had breached his Solicitor’s undertaking to pay the Complainant and issued 4 separate cheques from his Solicitors’ client’s Account which were subsequently dishonoured. The Respondent’s actions are very serious act of misconduct involving a large sum of money. Her attempts at complaining her way out were not credible.

The Board affirmed the DC’s finding of liability but in view of the seriousness of the misconduct committed by the Respondent, disagreed with its recommendation that the 19 Respondent be suspended for a period of no less than 12 months and that a fine of RM5,000.00 be imposed on the Respondents.

Instead, the Board ordered the Respondent to make restitution in the sum of RM291,060.00 to the Complainant to be paid within 1 month from the date of the Order and further ordered that the Respondent be struck off the Roll of Advocates and Solicitors to take effect 21 days from the date of the Order. [26] The DC, DB and learned High Court Judge had made concurrent findings of liability against the Applicant. The DB had exercised its discretion to impose a greater punishment on the Applicant and stated its reasons for the position taken. We find no reasons to depart from the findings of the DC, DB and the High Court. In the case of Gana Muthusamy v Tetuan LM Ong & Co [1998] 3 MLJ 341, at 344, Gopal Sri Ram, JCA (as he then was) had stated as follows: “It is primarily for members of the Bar to decide what amounts to conduct unbecoming of an advocate and solicitor in particular circumstances, according to standards established by members of that honourable profession. Courts must necessarily exercise caution when entertaining an appeal in which the central question is whether particular conduct is unprofessional and cases meriting curial interference will be rare. Otherwise it will be the 20 court and not the profession that will determine the yardstick of professional behaviour.” [27] For all the reasons stated above, we affirmed the decision of the learned Judge and dismissed this appeal with no order as to costs. Deposit to be refunded to the Applicant/Appellant. Dated: 27 September 2019. (DATUK DR. BADARIAH SAHAMID) COURT OF APPEAL PUTRAJAYA 21 For the Appellant: T. Gunaseelan Solicitors for the Appellant: Tetuan Gunaseelan & Associates Peguambela & Peguamcara Unit No. B-2-1, VIVA No. 378, Jalan Ipoh 51200 Kuala Lumpur For the 1st Respondent: Joginder Singh Solicitors for the 1st Respondent: Tetuan Joginder Singh & Co. Peguambela & Peguamcara Tingkat 5, Wisma MLS 31, Jalan Tuanku Abdul Rahman 50100 Kuala Lumpur For the 2nd Respondent: Arthur Wang Ming Way (together with Nurufarhina binti Ab Rahim) Solicitors for the 2nd Respondent: Tetuan Arthur Wang Lian & Associates Peguambela & Peguamcara Unit No. 569-9-10 & 9-11 Kompleks Mutiara, 3 ½ Miles Jalan Ipoh 51200 Kuala Lumpur