Pelaburan Hartanah Berhad v Cosmopolitan Avenue Sdn. Bhd. (BA-22NCvC-277-07/2025)

The Defendant filed an application under Enclosure 6 seeking an order to disqualify the Plaintiff's legal firm, Messrs Shearn Delamore & Co, from acting as the Plaintiff's solicitors in this suit. This application was made pursuant to Section 77 of the Legal Profession Act 1976 and/or Rules 3, 4, and 5 of the Legal Profession (Practice and Etiquette) Rules 1978 (LPPER).

The core issue for this Court's determination was whether the firm's prior representation of the Defendant in matters related to the same 22/01/2026 14:44:29 BA-22NCvC-277-07/2025 Kand. 60 S/N wo6C1HUjn02nCc8alIsD8g development project created a conflict of interest or a risk of misuse of confidential information.

After hearing the oral and written submissions of both parties and having read the affidavits filed, I was of the considered view that the application had merit. I find that there is a real risk of a conflict of interest that could prejudice the administration of justice in the case.

Consequently, I allowed the Defendant's application in Enclosure 6 with costs of RM3,000.00, subject to the payment of the allocator fee. The Plaintiff has now filed an appeal to the Court of Appeal, and below are my grounds of judgment.

The Plaintiff is Pelaburan Hartanah Berhad (PHB), a company involved in property investment and the owner of an 18-story office tower known as Block H, Empire City, Damansara Perdana.

The Defendant is Cosmopolitan Avenue Sdn Bhd (CASB), the developer of the Empire City project.

The main action between the parties involves a claim by the Plaintiff for unpaid rental returns under a Master Tenancy Agreement (MTA) amounting to RM16,526,688.22 and the repayment of an RM6,000,000.00 cash advance (Cash Advance Agreement – CAA) for the construction of elevated ramps within the Empire City project. S/N wo6C1HUjn02nCc8alIsD8g

It is undisputed that the Plaintiff's solicitors, Messrs Shearn Delamore & Co, had previously acted for the Defendant in at least three litigation matters and had also handled various Sale and Purchase Agreements regarding the same Empire City development.

The Defendant filed this application because they believe that through these past dealings, the firm has become intimately involved in the project and is in possession of confidential information that could be used against the Defendant in this suit. Enclosure 6 – Application for disqualification

The grounds for the Defendant's application, as set out in their affidavit and submissions, are as follows:

The Plaintiff's solicitors were previously engaged by the Defendant to handle litigation and conveyancing work related to the Empire City project.

The Defendant contended that the firm gained "inside knowledge" and confidential information of the project's building plans and financial arrangements.

As Empire City is an integrated development, any information about the overall project is directly relevant to the dispute over Block H. S/N wo6C1HUjn02nCc8alIsD8g

There is a real risk that such information could be used, whether intentionally or accidentally, to the Plaintiff's advantage.

Acting for the opposing party in a related matter against a former client is a breach of professional ethics and compromises the firm's independence, thereby constituting a conflict of interest.

The Plaintiff strongly opposed the Defendant's application. The grounds of their objection, as gathered from their written submissions and the Affidavit in Reply, are summarized as follows:

The Plaintiff argued that the Defendant failed to identify any specific confidential information that the firm supposedly possesses.

They contended that a mere "vague allegation" of having inside knowledge is not enough to disqualify a legal firm, citing that the onus of proof lies heavily on the applicant. In support of this, the Plaintiff relied on the case of Soon Poh Lean v Joan Margaret Walker & Anor [1984] 1 MLJ 460.

It was the Plaintiff's position that the firm's prior cases involved different blocks (Block M and Block E) and distinct legal issues, meaning there is no connection to the prior work.

The Plaintiff submitted that there is no "real risk" of any information being misused. Since the current dispute is based S/N wo6C1HUjn02nCc8alIsD8g on specific written agreements (the MTA and CAA), the evidence required for trial is documentary and does not rely on any secret knowledge of the overall development.

The Plaintiff argued that the rules on disqualification apply to the individual advocate and solicitor, not the entire firm, unless the exact same person is involved.

The Plaintiff emphasized their right to choose their own legal representation and argued that disqualification would cause unnecessary delay. The Law on Disqualification of Solicitors

In deciding whether to disqualify a legal firm from acting, the Court must balance the right of a party to choose its own solicitors against the need to protect the confidentiality of a former client and maintain public confidence in the administration of justice. The following are the core legal principles and authorities:

According to Soon Poh Lean, the onus of proving that confidential information was conveyed lies on the applicant. The continuing duty of confidentiality

Although the fiduciary relationship between a solicitor and a client ends when the retainer is terminated, the duty to preserve the S/N wo6C1HUjn02nCc8alIsD8g confidentiality of information obtained during that relationship continues. This principle was established in the landmark House of Lords case of Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, which Malaysian courts have consistently followed.

The Court does not require proof that confidential information has been used. Instead, the test is whether there is a "real risk" (not merely a theoretical one) that such information might be disclosed or misused to the detriment of the former client. This was affirmed in RSM Nelson Wheeler v Bank Bumiputra Malaysia Bhd [1998] 1 MLJ 609 and more recently by the Court of Appeal in Dato' Azizan bin Abdul Rahman v Pinerains Sdn Bhd [2021] 8 MLJ 433.

For an inference of a "real risk" to be drawn, there must typically be a sufficient connection between the previous retainer and the current litigation. In Tan Heng Chew & Ors v Tan Kim Hor & Ors [2006] 3 CLJ 481, the Federal Court considered an application to disqualify Messrs Shearn Delamore & Co and emphasized that the Court must be satisfied that the solicitors are in possession of confidential information relevant to the current dispute.

Under Rules 3, 4, and 5 of the LPPER, a solicitor should not accept a brief if they are likely to be "embarrassed" or if their professional S/N wo6C1HUjn02nCc8alIsD8g independence is compromised due to a conflict of interest or possession of confidential information.

In applying these principles to the present case, I am of the considered view that the Defendant's application has merit.

It is undisputed that Messrs Shearn Delamore & Co had previously acted for the Defendant in litigation and conveyancing matters directly related to the Empire City project.

I find that the firm's previous involvement in the project was not peripheral but "intimate". They handled Sale and Purchase Agreements for various zones and represented the Defendant in litigation that involved the project's building plans. In line with the decision in RSM Nelson Wheeler, I am satisfied that this prior relationship creates a real risk of the misuse of information—even if such misuse were inadvertent.

While the Plaintiff argues that this suit is a "standalone" claim for rent on Block H, the integrated nature of the Empire City development means that "inside knowledge" of the project's overall structure and financial management is inherently relevant. To allow the firm to continue acting against its former client in this context would create an undeniable perception of conflict.

The Plaintiff argued that the burden of proving that confidential information was actually conveyed lies heavily on the Defendant, as S/N wo6C1HUjn02nCc8alIsD8g established in Soon Poh Lean. They further contended that the Defendant failed to particularise the exact information said to be at risk.

While I acknowledge the principle in Soon Poh Lean, I find that where the previous retainer involves the same integrated development project — in this case, Empire City — the Court is entitled to draw a reasonable inference of risk. It is not a requirement of law for the former client to "disclose the secrets" in an affidavit merely to prove their existence, as this would defeat the very purpose of protecting confidentiality.

I also reject the Plaintiff's submission that the LPPER apply only to the individual advocate and solicitor and not to the firm as a whole.

In cases such as the present, where the firm itself had previously acted for the Defendant in multiple matters connected to the same development project, the risk of conflict cannot realistically be confined to a single individual. The Court must look at the substance of the prior engagement rather than its form. Given the undisputed extent of Messrs Shearn Delamore & Co's involvement in the Empire City project, I am satisfied that the perception and risk of conflict extend to the firm as an entity, and not merely to any one solicitor within it.

Accordingly, I am unable to accept the Plaintiff's contention that the prior work involved different blocks and was therefore unrelated. As Empire City is an integrated development, "inside knowledge" regarding the project's overall building plans, financial structures S/N wo6C1HUjn02nCc8alIsD8g and management strategies is inherently relevant. I find that the matters are sufficiently connected to satisfy the test articulated in Tan Heng Chew.

Regarding the Plaintiff's argument that disqualification should apply only to individual solicitors, not the entire firm, I find this distinction untenable in modern law practice. Under Rules 3, 4, and 5 of the LPPER, a solicitor (and by extension, the firm) must avoid situations where their professional independence might be impugned.

In the absence of any evidence showing that the specific solicitors now handling the Plaintiff's case are effectively screened from the firm's prior knowledge of the Defendant's files, the risk of inadvertent disclosure remains.

Following the logic in Prince Jefri Bolkiah, once a relationship of confidence is established in a related matter, the burden shifts to the solicitors to show that there is no risk of disclosure. Given the firm's deep historical involvement with the Defendant on the same project, I find that this burden has not been discharged. In the interest of justice and to uphold the integrity of the legal profession, the firm must be disqualified.

Finally, I must address the concern that applications of this nature are sometimes used as tactical manoeuvres to delay proceedings. In this instance, I am satisfied that the Defendant's application was raised at the appropriate stage and stems from a genuine concern regarding the protection of their confidential interests. While the Court is wary of "litigation tools" used to obstruct a party's choice of S/N wo6C1HUjn02nCc8alIsD8g counsel, it cannot ignore a substantive risk to the integrity of the trial process.

In my view, allowing the firm to remain would risk causing a miscarriage of justice that outweighs any administrative delay caused by the change of solicitors.

I find that the Defendant has successfully proven that there is a real and significant connection between the firm's previous work and this current lawsuit. As the firm now represents the opposing party against its former client in a matter closely related to its earlier work, the perception of conflict is evident and undeniable.

I reiterate, the previous relationship cannot be ignored. Based on the "real risk" test, the law does not require the Defendant to prove that information has already been leaked. The mere existence of a real risk that confidential information could be used, even if accidentally, is enough.

In the interest of justice, the Court must ensure that the legal process is fair and is seen to be fair. As the firm now represents the opposing party against its former client in a matter closely related to its previous work, its professional independence in this case is compromised.

I therefore hold that the balance of justice tilts in favour of the Defendant to prevent potential misuse of the information. S/N wo6C1HUjn02nCc8alIsD8g

For the reasons stated above, the Defendant's application in Enclosure 6 is allowed as follows:

Messrs Shearn Delamore & Co, including all solicitors within the firm, are disqualified and barred from acting for the Plaintiff in this action.

The Plaintiff is to pay costs in the sum of RM3,000.00 to the Defendant, subject to the payment of the allocator fee. Dated this: 20th January 2026 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR S/N wo6C1HUjn02nCc8alIsD8g For the Plaintiff : K. Shanti Mogan together with Teo Tze Jie and Yiew De Quan Messrs Shearn Delamore & Co. For the Defendant : Justin Voon together with Alvin Lai Kok Wing and Cheryl Leong Kit Yee Messrs Justin Voon Chooi & Wing S/N wo6C1HUjn02nCc8alIsD8g