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2025 MarsdenLR 1162
HIGH COURT MALAYA KUALA LUMPUR
PALOH DEVELOPMENT SDN BHD – Appellant
Versus
LEONG WAI HAR & ANOR – Respondent
[Originating Summons No: WA-24NCC-203-04/2024]
The right to counsel of choice is subordinate to the public interest in maintaining the integrity and perception of justice, allowing for disqualification based on prior representation and potential conflicts of interest.
Headnote:(A) Legal Profession (Practice and Etiquette) Rules 1978 - Rules 3, 4, 5, 27, and 28 - Disqualification of counsel - The court has inherent power to disqualify counsel if their continued representation compromises the fairness of justice. The application to disqualify was based on prior representation and potential conflict of interest. (Paras 1, 30, 49, 54)
(B) Right to Counsel - The right to counsel of choice is not absolute and must be balanced against public perception of justice. (Paras 1, 40, 54)
Facts of the case:
The 1st defendant sought to disqualify counsel who had previously represented her and her late husband in a reinstatement application involving their family-owned companies, citing potential conflicts of interest and possession of confidential information. (Paras 3, 5, 24)
Findings of Court:
The application to disqualify was allowed due to the inherent jurisdiction of the court to ensure the integrity of the judicial process. Costs of RM 10,000 were imposed on the disqualified counsel. (Paras 54)
Issues: The main issues were whether the counsel's prior representation created a conflict of interest and whether their continued representation would compromise public confidence in the judicial process. (Paras 1, 40)
Ratio Decidendi: The court ruled that the prior representation and the sharing of confidential information warranted disqualification to maintain public confidence in the administration of justice. (Paras 49, 54)
Result: Application allowed; counsel disqualified.
[Application To Disqualify Counsel And Solicitors]
Introduction
[1] The right to counsel of choice is a right accorded to any litigant before our courts. However, such right must be balanced against the broader interests of justice. The court has an inherent power to bar counsel if a well-informed, fair-minded member of the public would conclude on the facts presented that the proper administration of justice requires the removal of the counsel. The overarching philosophy underlining the removal is that the administration of justice requires an unqualified perception of its fairness in the eyes of the general public.
[2] The above principle has been applied in Ng Yee Hong v. Malaysian Institute of Accountants ; [2021] 1 MLJ 584; [2021] 1 CLJ 666 CA [" Ng Yee Hong "], Vijayalakshmi Devi Nadchatiram v. Saraswathy Devi Nadchatiram ; [2000] 4 AMR 4243 FC [" Vijayalakshmi Devi Nadchatiram "], Black v. Taylor [1993] 3 NZLR 403 New Zealand court of Appeal [" Black v. Taylor "] and Grimwade v. Meagher, Hegland, Morgan, Lidgett, Reid & Bellheath Pty Ltd [1995] 1 VR 446 Supreme court of Victoria ["Grimwade"].
[3] The principle is now invoked by the 1st defendant in an application before me dated 24 September 2024 [Enclosure 18] by the 1st defendant ["D1"] to disqualify Mr Yuean Jin Han and following that Messrs Cheang & Ariff from acting for the plaintiff Paloh Development Sdn Bhd in an Originating Summons ["OS"] [Enclosure 1] and other actions in relation to or arising out from this OS.
[4] D1 had earlier requested Mr Yuean Jin Han and Messrs Cheang & Ariff not to act but the request was rejected.
[5] The disqualification application is premised on the fact that Mr Yuean Jin Han and Messrs Cheang & Ariff had previously acted for D1 and D2 [now deceased] and also the plaintiff Paloh Development Sdn Bhd and a related company Ee Soon Guan Sdn Bhd, at a time when D1 and D2 [now deceased] were directors of both the plaintiff and Ee Soon Guan Sdn Bhd.
[6] The suit in which Mr Yuean Jin Han and Messrs Cheang & Ariff had previously acted is Mahkamah Tinggi Johor Bahru Saman Pemula No. JA-24NCC-17-07-2022 ["JB OS"]. In this JB OS, D1 had sued The Registrar of Companies Commission of Malaysia ("CCM") for reinstatement back on the register of the CCM.
[7] It is the contention of D1 that Mr Yuean Jin Han and Messrs Cheang & Ariff had taken instructions from D1 and D2 [now Deceased] and are privy to confidential facts in respect of their acts or omissions as directors of the plaintiff.
[8] D1 contends that it is now improper for Mr Yuean Jin Han and Messrs Cheang & Ariff to now choose to act for the plaintiff in this OS to sue D1 and D2 [now deceased] to, inter-alia, jointly and severally indemnify the plaintiff for all penalties, fines and/or warrants levied against the plaintiff by CCM and other authorities for their failure to file the plaintiff's annual returns, financial statements and/or directors' report with a backlog from Financial Year End of 1987 to 2023.
[9] After hearing counsel on 27 February 2025, I directed further written submissions to be filed to address some points raised during the hearing and reserved my decision to 4 April 2025.
[10] On 4 April 2025, I had allowed the application with costs of RM 10,000 to be borne by Messrs Cheang & Ariff subject to allocatur. I also gave directions for the OS to be fixed for hearing. It is now fixed for hearing on 28 July 2025.
[11] The plaintiff has appealed to the court of Appeal on 29 April 2025. These are my Grounds of Judgment.
[12] In my Grounds, the plaintiff here will sometimes be referred to as Paloh Development Sdn Bhd if I am also in the same paragraph referring to the related company Ee Soon Guan Sdn Bhd.
[13] This is because in another KLHC OS No WA-24NCC-202-04/2024, a similar disqualification application has been filed to also disqualify Mr Yuean Jin Han and Messrs Cheang & Ariff from acting for the plaintiff there/Ee Soon Guan Sdn Bhd to sue D1 and D2 [now dec
