A legal firm must be disqualified from representation if its partners are potential witnesses or have a direct pecuniary interest in the case to ensure the integrity of the legal process.

Wong Chee Lin J:

[1] This is an application by the Defendants for an order disqualifying the legal firm of Lee & Lim from acting for the 1st to 5th Plaintiffs. I have allowed the application. The 3rd to 5th Plaintiffs have appealed against my decision. These are the full reasons for my decision.

Background Facts

[2] The Plaintiffs entered into a Sale and Purchase Agreement dated 24 February 2016 with the Defendant in respect of a piece of land known as Geran Mukim 102, Lot 343, Tempat Sungai Gadih, Mukim Kerling, Daerah Hulu Selangor ("Land 1") for a purported price of RM1.5 million.

[3] The Plaintiffs were the purported purchasers and the Defendant was the purported vendor.

[4] The Plaintiffs alleged that the Defendant had breached the terms of the Sale and Purchase Agreement which was terminated. The Plaintiffs are claiming the sum of RM3 million as liquidated ascertained damages from the Defendant.

[5] The Defendant in his defence and Counterclaim claimed that the Sale and Purchase Agreement in respect of Land 1 was a sham which was meant or intended to be "security" only and not for the purposes of any actual sale and purchase. The Defendant and 2 other parties in the Counterclaim counterclaimed that 4 other Sale and Purchase Agreements are also similarly sham agreements and sought for all those agreements to be declared null and void.

[6] One of the purchasers and the 4th Plaintiff is Mr Lim Kien Huat. He is the main partner of the legal firm of Lee & Lim which acted for the Plaintiffs. It is alleged that the sham Sale and Purchase Agreements were drafted and prepared based on his instructions.

[7] The Defendant has applied for the disqualification of the legal firm of Lee & Lim from acting for the Plaintiffs. They do so on the basis that Lim Kien Huat has a pecuniary interest in the action and is a partner of Lee & Lim. Furthermore, another partner of Lee & Lim, Hasniza purported to have witnessed the execution of the Sale and Purchase Agreements. This fact is disputed as is the fact whether she had ever explained the real effect of the Sale and Purchase Agreements to the Defendant. The Plaintiffs do not dispute that the 2 partners of Lee & Lim are potential material witnesses in the action if it proceeds to trial. They merely say that another legal assistant Tang Keen Cheong is handling the case and not Mr Lim or Hasniza so the firm of Lee & Lim can continue to act.

Findings Of The Court

[8]Rules 3, 4, 5, 27(a) and/or 28(a) of the Legal Profession (Practice and Etiquette) Rules 1978 provides that:

"3. Advocate and solicitor not to accept brief if embarrassed.

(a) An advocate and solicitor shall not accept a brief if he is or would be embarrassed.

(b) An embarrassment arises-

(i) where the advocate and solicitor finds he is in possession of confidential information as a result of having previously advised another person in regard to the same matter;

(ii) where there is some personal relationship between him and a party or a witness in the proceedings.

4. No advocate and solicitor to accept brief if professional conduct likely to be impugned.

No advocate and solicitor shall accept a brief in a case where he knows or has reason to believe that his own professional conduct is likely to be impugned.

5. No advocate and solicitor to accept brief if difficult to maintain professional independence.

(a) No advocate and solicitor shall accept a brief if such acceptance renders or would render it difficult for him to maintain his professional independence or is incompatible with the best interest of the administration of justice.

...

27. Advocate and solicitor not to appear where pecuniarily interested.

(a) An advocate and solicitor shall not appear in any matter in which he is directly pecuniarily interested.

...

28. Advocate and solicitor not to appear in a case where he is a witness.

(a) An advocate and solicitor shall not appear in Court or in chambers in any case in which he has reason to believe that he will be a witness in respect of a mater