The court ruled that both claims were time-barred, highlighting the necessity for timely legal actions regarding jointly handled funds.

[1] The Plaintiff's claim against the 1st and 2nd Defendants is for a declaration that the Defendants had breached their fiduciary duties in handling the Plaintiff's Trust Monies and unlawfully retained the sum of RM14,936,742.39 belonging to the Plaintiff.

Factual Matrix

[2] The Plaintiff is a company and owner of 22 storey commercial building known as Menara Merais. Meanwhile, the Defendants are Advocates and Solicitors practicing under the firm Messrs Chris Lai, Yap and Partners ('the firm').

[3] Before the establishment of the firm the Plaintiff and the 1st Defendant had entered into a Consultancy Agreement dated 1 October 2005 wherein the 1st Defendant was appointed as a Legal Consultant for the Plaintiff in managing all the Plaintiff's legal affairs and company debts for a period of 2 years starting from 1 October 2005 until 30 September 2007.

[4] In 2005, the Plaintiff sold off Menara Merais and had engaged the 1st Defendant as Vendor's solicitor in the Sale and Purchase Agreement with Maybank Trustees Berhad (as trustee for AmFirst Property Trust) for a total sum of RM57,000,000.00. From that amount a sum of RM39,480,000.00 was deposited by the Plaintiff in the client's account of the firm ('Trust Monies').

[5] From time to time, the Plaintiff had issued written instructions to the firm to release a certain amount from the Trust Monies to either the Plaintiff itself or various third parties. These written instructions also indicated the Plaintiff's consent for the Defendants to deduct certain amounts towards payment of the firm's legal bills.

[6] The Plaintiff 's case centers around a claim for the sum of RM14,936,742.39 which is the balance sum remaining in the Trust Monies after all payments as instructed by the Plaintiff had been made and this included the Defendant's legal fees.

[7] The Defendants disputes that there was any balance left after all authorized payments had been made. On the contrary the Trust Monies were insufficient to pay the legal fees of the Defendants amounting to RM14,626,174.90. This is the subject of the Defendants counterclaim against the Plaintiff

The Issue

[8] The sole issue determinative of this case is whether the proceeds of the sale of Menara Merais which were placed in the Trust Monies were utilized as authorized.

Decision Of The Court

A. Incompetent Witness

[9] The Plaintiff's case started by the calling of SP1, the Director and majority shareholders of the Plaintiff. SP1's evidence was given before another High Court Judge who recused himself after hearing part of the evidence of SP1. The case was then transferred to this Court for continuation.

[10] SP1 continued with his testimony in this Court. This Court took note of the fact that SP1 was totally unfamiliar with the facts of this claim. This could be observed from the fact that after every question posed to SP2 during cross examination SP1 gave a standard reply that he was in no position to answer the questions as he had no knowledge of the matter at hand as everything was handled by the Accountant. SP1 also due to unfamiliarity of the matter at hand as well as physical weakness was unable to understand the questions posed to him.

[11] The Plaintiff's counsel confirmed that the Accountant would be called as the next witness and similar questions would be posed to her. Observing the answer from this witness as well as his state of health both mental and physical, the Court concluded that the testimony of this witness would be of no assistance to the Court. At this juncture, the Court by applying s 118 of the Evidence Act 1950 decided that SP1 was an incompetent witness and directed his entire ev