An oral agreement for legal fees can be enforceable despite the lack of written documentation under certain provisions of the Legal Profession Act.

[1] The plaintiff, a law firm, brought this action against the defendant for unpaid legal fees and disbursements amounting to RM277,386.80.

Background Facts

[2] Based on the evidence presented in the trial, the relevant facts of this case be summarised as follows:

(i) The plaintiff is a firm of advocates and solicitors practising in the name of Sulaiman & Taye. One of the plaintiff's partners is Mr Sng Eu Kim (PW1).

(ii) The defendant is an engineering company which was incorporated in Malaysia. In the middle of 2010, Mr Yong Yu Ken (DW1), a director of the defendant had met with Mr Cyril Oliver Xavier (PW2), a lawyer, and asked his advise in finding a suitable lawyer to handle the defendant's pending suit against one main contractor and to replace the lawyer from legal firm, Shook Lin & Bok who was then handling the case for the defendant.

(iii) Thereafter, Mr Cyril (PW2) brought DW1 to a legal firm, Messrs Sng & Co and introduced DW1 to Mr Sng (PW1) who was a partner with the firm.

(iv) In the said meeting, PW1 as partner of Sng & Co was retained by the defendant to act for the defendant and to take the conduct of the defendant's pending suit from Shook Lin & Bok which was Kuala Lumpur High Court Civil Suit No. S1-22-689-2005 (suit 689).

(v) In the suit 689, the defendant sued the main contractor Perbadanan Perwira Harta Sdn Bhd (PPHSB) as first defendant and the sole shareholder of PPHSB and Perbadanan Perwira Harta Malaysia (PPHB) as the second defendant, for failing to pay the balance of the costs of piling works in the sum of RM1,082,759.18 and wasted expenditure incurred by the plaintiff in the amount of RM1,921,438, allegedly caused by the delay to the works by the main contractor.

(vi) In the same meeting, when DW1 met with PW1 at the firm Sng & Co, according to PW1 and PW2, a lump sum legal fees were agreed upon by DW1 and PW1 for the amount of RM260,000 excluding service tax of 6%. It was also agreed that the fees to be billed at the conclusion of the suit. However, this oral agreement as to the legal fees was denied by DW1 in his evidence.

(vii) Mr Sng (PW1) left the firm of Sng & Co and joined Messrs Sulaiman & Taye as a partner on or about May 2011. He brought with him the defendant's file to Sulaiman & Taye and thereafter he continued handling the case. DW1 did not object to this and had on several occasions, discussed with PW1 at Sulaiman & Taye pertaining to the said suit 689.

(viii) When PW1 took over the defendant's case from Messrs Shook Lin & Bok, the defendant's suit against PPHB, the second defendant, has been struck out. On appeal to the Court of Appeal, which was handled by PW1, the appeal was allowed and the defendant's suit against the second defendant was reinstated.

(ix) In regards to the said suit 689, on 31 May 2013, after a full trial, judgment was entered by the High Court in favour of the defendant in this case with the following orders:

(a) PPHSB to pay the defendant RM1,082,759.18 for the balance of the cost of piling works done by the defendant.

(b) PPHSB to pay the defendant RM200,000 as general damages for the delayed works caused by PPHSB and for the wasted expenditure.

(c) PPHSB and PPHB's counterclaim for liquidated asscertained damages (LAD) of RM1,101,000 was dismissed.

(d) The defendant's claim against PPHB was dismissed.

(e) PPHSB to pay costs of RM10,000 to the defendant and interest at 5% per annum from the date of judgment to the date of realisation.

(x) Thereafter, the plaintiff issued two invoices to the defendant in this case for payment which are as follows:

(a) An invoice no 0062 dated 18 June 2013 for the sum of RM1,462.80 in regard to the transcript cost paid by Sulaiman & Taye for the notes of proceeding.

(b) An invoice no 0063 dated 3 July 2013 for the amount of RM275,000 for the agreed fees of RM260,000 and 6% service tax.

(xi) The defendant, however, wrote a letter dated 10 July 2013 to the plainti