AWAN TIMUR PALM OIL MILL RESOURCES (PERAK) SDN BHD (No. Syarikat: 576904-H) TETUAN SHAHRIZAL & NASIR

JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… IN THE HIGH COURT OF MALAYA AT JOHOR BAHRU IN THE STATE OF JOHOR DARUL TAKZIM, MALAYSIA ORIGINATING SUMMONS NO: JA-17D-3-06/2020 Dalam perkara Invois bertarikh 1/11/2018 oleh Defendan berkenaan Fee guaman Dan Dalam perkara Seksyen 126, 128, 130, 132 Akta Profesion Undang-Undang 1976 Dan Dalam perkara Aturan 5, Aturan 28, Aturan 94 Kaedah 4 kaedah-Kaedah Mahkamah 2012 Dan Dalam perkara Seksyen 25 Akta Mahkamah Kehakiman, 1964 BETWEEN AWAN TIMUR PALM OIL MILL RESOURCES (PERAK) SDN BHD (No. Syarikat: 576904-H) … PLAINTIFF AND TETUAN SHAHRIZAL & NASIR … DEFENDANT GROUNDS OF JUDGMENT ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 1 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… Introduction [1] This is the Plaintiff’s application (“this Application”), inter alia, for an extension of time to seek an order for the Defendant’s bill of costs to be taxed in accordance with the Legal Profession Act 1976 (“Legal Profession Act”). The background facts [2] The bill of costs was pertaining to legal fees in the amount of MYR323,208.50 that arose from the preparation by the Defendant legal firm of a sale and purchase agreement (“the SPA”) in 2015 (exhibited as K1 to the Defendant’s Affidavit-in-Reply dated 28 July 2020, affirmed by its manager, one Kunalan a/l Palaniappan), between the Plaintiff and Seladang Biru Sdn Bhd (“the Parties”) for a property worth MYR150 million (“the Property”). The instruction by the Plaintiff for the Defendant to prepare the SPA was based on a ‘Warrant to Act’ dated 19 November 2015 (exhibited as K5 to the Defendant’s Affidavit-in-Reply dated 28 July 2020, affirmed by its manager, one Kunalan a/l Palaniappan). [3] A draft SPA was then given to one Darshan Singh, who was then the Plaintiff’s legal adviser. However, the Defendant was informed by Darshan Singh that the transaction had failed, and ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 2 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… as a result thereof, the Parties had decided not to proceed with the SPA. [4] Invoices dated 16 June 2016 and 1 June 2017 (“the Invoices”) for the amount of MYR323,208.50 (exhibited as K6 in the Defendant’s Affidavit-in-Reply dated 28 July 2020, affirmed by its manager, one Kunalan a/l Palaniappan), were issued by the Defendant, that is, six or seven months after the SPA was drafted. Although the Invoices were acknowledged by Darshan Singh (exhibited as K5 to the Defendant’s Affidavit-in-Reply dated 28 July 2020, affirmed by its manager, one Kunalan a/l Palaniappan), the Plaintiff, however, had failed to make any payment towards that amount. [5] On 8 November 2018, the Defendant, served the Plaintiff with a statutory notice dated 1 November 2018 (“the Statutory Notice”) pursuant to section 466(1)(a) of the Companies Act 2016 (“the Companies Act”) for payment of the legal fees, which the Plaintiff had acknowledged on 13 November 2018. The Plaintiff, however, failed to make payment towards that amount, despite the expiry of the 21- day period. As a result thereof, on 16 January 2019, the Defendant had filed a winding-up petition JA-28NCC-21- 01/2019 against the Plaintiff. ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 3 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… [6] On 24 June 2020, the Plaintiff filed this Application, which was dismissed, for the following reasons. Contentions, evaluation, and findings [7] This Application was made pursuant to sections 126 and 128 of the Legal Profession Act. However, before addressing the issues pertaining to those provisions, the preliminary question was whether the Defendant had established a bona fide bill of costs to begin with. Whether the Defendant had established a bona fide bill of costs [8] The relevant provision to scrutinise to determine if there was a bona fide bill of costs, is section 124 of the Legal Profession Act, which reads: Section 124 – No advocate and solicitor to sue for costs until delivery of bill of cost (1) Except as authorised by this Act, no advocate and solicitor shall without the leave of the court commence or maintain any action for the recovery of any costs due for any business done by him until the expiration of one month after he has delivered to the party to be charged therewith, or sent by post to, or left with him at, his office or place of business, dwelling house or last known place of abode, a bill of costs, which bill shall be signed either by the advocate and solicitor, or in the case of a partnership, by any of the partners, either with his own name or with the name or style of the partnership, or by another advocate and solicitor employed by the first-named advocate ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 4 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… and solicitor or the partnership, or be enclosed in or accompanied by a letter, signed in the like manner, referring to the bill. (2) Where a bill is proved to have been delivered in compliance with subsection (1) it shall not be necessary in the first instance for the advocate and solicitor to prove the contents of the bill and it shall be presumed until the contrary is shown to be a bill bona fide complying with this Act. [Emphasis added.] [9] It was clear from the evidence, that the SPA was drafted by the Defendant upon instructions from the Plaintiff. This was evident from the communications between the Plaintiff’s managing director and the Defendant’s solicitor (exhibited as K5 to the Defendant’s Affidavit-in- Reply dated 28 July 2020, affirmed by its manager, one Kunalan a/l Palaniappan), and fortified by the Plaintiff’s attempt to obtain a loan to purchase the Property. [10] The Invoices that were issued by the Defendant to the Plaintiff, were accompanied by the following note: To our professional charges in connection with the preparation of Sale and Purchase Agreement in pursuant upon your instruction dated 19th November 2015 including correspondences, attendances, perusals, telephone calls, examination of documents, inquiries, searches, and all incidental work necessary for carrying out the business entrusted to us. [Emphasis added.] ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 5 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… [11] Reference at this juncture is made to Templer Park Golf & Resort Bhd & Anor v. Tetuan George Varughese [2010] 8 CLJ 754, where it was stated: The defendant's claim stood in law to be bona fide and the plaintiffs' claim that the sum claimed was bona fide disputed was not supported with contemporary objections against the bills and the line of arguments raised by the plaintiffs militated against the relevant provisions of LPA 1976. And in consequence, the plaintiffs' application must be dismissed with direction as they had stated that they were in a position to settle the bills. [12] An invoice delivered by a solicitor to his client becomes a bona fide bill by virtue of the presumption encapsulated in section 124(2) of the Legal Profession Act. A perusal of the documentary evidence adduced by the Defendant indicated that Darshan Singh had acknowledged receipt of the Invoices. The Defendant had, therefore, raised the presumption of a bona fide bill of costs. Whether there were special circumstances to allow this Application [13] Once there is a presumption of a bona fide bill of costs, a client may challenge it, pursuant to section 126 of the Legal Profession Act, which reads Section 126: 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 ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 6 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… 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. (2) The order shall contain such directions and conditions as the court thinks proper, and any party aggrieved by any order of Court may apply by summons in chambers that the same may be amended or varied or set aside. (3) In any case 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. [14] Based on the evidence before this Court, the debt in the form of legal fees was a bona fide bill of costs which was not settled. It was undisputed that the Plaintiff had not sought taxation of the Invoices at any point in time, triggering the application of section 128 of the Legal Profession Act, which reads: Section 128 – Order for taxation of advocate and solicitor’s bill on notice given (1) After the expiration of six months from the delivery of a bill of costs, or after payment of the bill of costs, no order shall be made for taxation of a solicitor's bill of costs, except upon notice to the advocates and solicitors and under special circumstances to be proved to the satisfaction of the Court. (2) No such order for taxation shall in any event be made after the expiry of one year from the delivery of the bill of costs. [Emphasis added.] ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 7 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… [15] Since the Plaintiff had not disputed the bill of costs within the time period prescribed by section 128(1) of the Legal Profession Act, hence this Application was filed to extend time seeking an order for the bill of costs to be taxed. [16] In my view, this Application was bound to fail, as the maximum time period prescribed in section 128(2) of the Legal Profession Act had already expired. The Plaintiff had one year from the date of delivery of the bill of costs to dispute the amount claimed. ‘If the client does not avail himself of this procedure, then his remedy under the Legal Profession Act to challenge the bill is extinguished by section 128(2) of the Legal Profession Act. Taxation outside this period was not permissible.’ per Komathy Suppiah in Tetuan Kang & Kang v. Kirana Studio Sdn Bhd [2015] 1 CLJ 431. [17] By operation of the statutory prohibition in section 128(2) of the Legal Profession Act, therefore, the amount claimed in the Invoices had become final and payable. Hence, it could not be disputed or challenged. [18] In relying on the Court of Appeal case of Tan Tek Sin & Anor v Tetuan Nora Hayati & Associates [2015] 1 CLJ 89, the Plaintiff submitted that there were special circumstances that warranted this Court to allow the ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 8 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… extension of time for an order for the bill of costs to be taxed. In my view, this argument was untenable as the Court could only consider special circumtances before one year of delivery of the bill of costs. Once the one year time period had expired, the Court had no power to consider special circumstances, if any. Furthermore the case of Tan Tek Sin & Anor v Tetuan Nora Hayati & Associates is distinguishable as in that case, the special circumstances were premised on the absence of an itemised bill, unlike the facts of the present case which was based on a bill of costs that was clear and self- explanatory. [19] At this juncture, reference is made to HMJ Shaharom & KS Wee v. Kumpulan Wang Amanah Pencen [2013] 3 CLJ 423, where it was stated by Hamid Sultan Abu Backer J (as he then was): The client has one year from the date of delivery of the bill to tax the bill if he disputes the amount claimed. If the client does not avail himself of this procedure, his remedy under the LPA to challenge the bill is extinguished by s. 128(2) of the LPA. This provision provides that the power to order an assessment shall not be exercisable on an application made by the client after the expiration of twelve months from the delivery of the bill. No taxation outside this period is permissible. [Emphasis added.] ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 9 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… [20] In the same fashion, one year had already expired and the Plaintiff had extinguished its right to challenge the bill of costs. [21] In any event, it was also my opinion that there were no special circumstances to warrant granting the extension of time. The Plaintiff provided a list of reasons for the delay in applying for an order of taxation, including averments that it had not received the Invoices, that the fees were negotiable, that the Defendant had not provided any quotation, that it was not aware of the procedure and law regarding costs, that the Defendant took advantage of the Plaintiff’s ignorance and confusion, and that the draft SPA was part of the Defendant’s bigger scheme of fabrication and forgery. [22] In my view, these averments were spurious and unsubstantiated, and even if they were not, they did not fall within special circumstances under section 128(1) of the Legal Profession Act. Pursuant to the evidence adduced, the Plaintiff was aware that it owed the debt in legal fees, which remained unsettled as the Plaintiff had chosen to ignore it, even after the Defendant had issued the Statutory Notice in November 2018. ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 10 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… [23] The Plaintiff further alleged that the fees were excessive and against the spirit of reasonableness under the Solicitors Remuneration Order 2005 (“Solicitors Remuneration Order”). [24] I found the Plaintiff’s contention bereft of merit as the legal fees owing were pursuant to the preparation of the SPA for the Property which was worth MYR150 million. According to the documents adduced, the original fees charged was MYR609,450 but since the SPA was discontinued, the final fees charged by the Defendant was MYR323,208.50, in accordance with rule 5 of the Sixth Schedule to the Solicitors Remuneration Order, which reads: In a case where a transaction is not completed or not concluded for any reason whatsoever, a fair and reasonable remuneration for the solicitor shall be a fee not exceeding 50% of the applicable scale fee, subject to a minimum fee of RM200. However, if the work required of the solicitor has been fully or substantially performed, the solicitor shall be entitled to charge the full scale fee as his remuneration. [Emphasis added.] [25] Taking into account the value of the Property, the fees imposed were reasonable. An analogy may be drawn to the case of Tetuan Putra Gill v. Hijaz Refinery (Pahang) Sdn Bhd & Anor [2009] 7 CLJ 495, where a bill of MYR2,626,960.70 was ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 11 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… considered a reasonable amount for a property worth USD156 million. It was stated by Abdul Wahab Patail J: The value of project, at that time US Dollars 156 million, was not by any means small. It involved skill, labour, specialized knowledge and responsibility on the part of the plaintiff, in particular J.S. Gill whose work judging from the documents prepared, especially the EPCC contract was of high standard. J.S Gill was the sole proprietor of his firm and he shouldered a very heavy responsibility attending to the oil refinery project to the first defendant. It was inconceivable such work was voluntary and philanthropic. Applying the Sixth Schedule to the SRO 1991 to the facts of the case and in particular considering the work done by the plaintiff, the amount of RM2,626,960.70 for which the plaintiff had billed the first defendant was fair and reasonable. … Under s. 126 of the LPA, the first defendant, may, as a matter of course, petition the court at any time within six months from the delivery of the bill of costs for an order to tax the bill of costs delivered by the plaintiff. Section 128(2) provides that no order for taxation shall in any event be made after the expiry of one year from the delivery of the bill of costs. The bill of costs in this case was posted 7 December 1995 and received the next day. The first defendant was at all material time after delivery of the bill of costs represented by solicitors. But the first defendant did not petition the court for an order to tax the bill of costs delivered by the plaintiff. This action was filed on 12 November 1997, nearly two years later. It was too late for the first defendant to dispute the quantum of the bill delivered. [26] The factors to consider in billing for non-contentious work are enumerated in rule 1 of the Sixth Schedule to the Solicitors Remuneration Order, as follows: ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 12 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… Rule 1. The remuneration of a solicitor in respect of non- contentious work for which no provision is made by means of a scale or fixed fee shall be such sum as is fair and reasonable having regard to all the circumstances of the case, and in particular the following circumstances: (a) the importance of the matter to the client; (b) the skill, labour, specialised knowledge and responsibility involved on the part of the solicitor; (c) the complexity of the matter or the difficulty or novelty of the question raised; (d) where money or property is involved, the amount or value thereof; (e) the time expended by the solicitor; (f) the number and importance of the documents prepared or perused by the solicitor; (g) the place and the circumstances under which the services or business or any part thereof are rendered or transacted. [27] In the final analysis, the one year period which had expired amounted to a total prohibition to this Application, and even if this Court were to consider the special cirucumstances relied on by the Plaintiff, my view was there were none. Conclusion [28] In the upshot, therefore, based on the aforesaid reasons, and after careful scrutiny and consideration of all the ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 13 JA-17D-3-06/2020 13 January 2021 ……………………………………………………………………………………………… evidence before this Court, including the written and oral submissions of both parties, this Application was dismissed with costs in the amount of MYR4,000 (subject to allocatur fees). Dated: 13 January 2021 ……..…SIGNED…………. (EVROL MARIETTE PETERS) Judicial Commissioner High Court, Johor Bahru Counsel: For the Plaintiff – YT Pang; Messrs SK Song For the Defendant – Devinder Kaur; Messrs A S Dhaliwal Cases referred to:  HMJ Shaharom & KS Wee v. Kumpulan Wang Amanah Pencen [2013] 3 CLJ 423  Tan Tek Sin & Anor v Tetuan Nora Hayati & Associates [2015] 1 CLJ 89  Templer Park Golf & Resort Bhd & Anor v. Tetuan George Varughese [2010] 8 CLJ 754 ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 14 JA-17D-3-06/2020 13 January 2021 ………………………………………………………………………………………………  Tetuan Kang & Kang v. Kirana Studio Sdn Bhd [2015] 1 CLJ 431  Tetuan Putra Gill v. Hijaz Refinery (Pahang) Sdn Bhd & Anor [2009] 7 CLJ 495 Legislation referred to:  Companies Act 2016, sections 466  Legal Profession Act 1976, sections 124, 126, 128  Solicitors Remuneration Order 2005, Sixth Schedule, rules 1 and 5 ----------------------------------------------------------------------------------------------------------- EVROL MARIETTE PETERS JC 15