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2021 MarsdenLR 1546
HIGH COURT SABAH & SARAWAK SANDAKAN
GREENERY DEVELOPMENT (S) SDN BHD V.NORBERT CHIN & CO
[Civil Appeal No: SDK-12B-1-4-2021]
An oral agreement for legal fees must be supported by credible evidence to be enforceable. The absence of documentation or acknowledgment weakens the claim.
Headnote:(A) Contracts Act 1950 – Section 2(e) – Legal fees claim – Plaintiff's claim for RM80,000.00 legal fees based on an alleged promise, dismissed by appellate court due to insufficient evidence of an enforceable agreement – The trial court erred in finding the agreement existed based solely on plaintiff's testimony without corroborative evidence. (Paras 9, 16, 37)
(B) Evidence – Burden of proof – The burden lies on the plaintiff to prove the existence of the alleged oral agreement on a balance of probabilities – Testimonies of plaintiff's witnesses deemed unconvincing and lacking corroboration; cross-examination raised significant doubt on the claim. (Paras 16, 18, 20)
Facts of the case: The dispute arose over the plaintiff’s claim for RM80,000.00 in legal fees stated to have been agreed upon but not substantiated by formal documentation or mutual acknowledgment, with additional claims for RM20,000.00 in kind dismissed for lack of evidence. (Paras 4, 6).
Findings of Court: The appellate court found the Sessions Court had erred in its judgment by not adequately weighing the evidence provided, which was insufficient to establish the existence of a binding agreement for legal fees. (Paras 37).
Issues: The primary question was the existence and terms of an alleged oral agreement on legal fees and the adequacy of evidence provided by the plaintiff to support this claim. (Paras 9, 16)
Ratio Decidendi: The court emphasized that an alleged agreement must be supported by credible evidence, and in this case, the lack of formal acknowledgment from the defendant undermined the plaintiff's claim. (Paras 37)
Result: Appeal allowed, judgment of the Sessions Court set aside.
JUDGMENT
Introduction
The Appeal
[1] This is an appeal by the defendant against the decision of the Sessions Court in allowing the plaintiff's claim after a full trial in the sum of RM80,000.00 with interests of 5% per annum from the date of the writ until full and final settlement and costs of RM5,825.00.
The Parties
[2] The parties herein shall be referred to as they were in the Court below, ie the plaintiff (the respondent) and the defendant (the appellant).
[3] The defendant was the client of the plaintiff, a legal firm, the latter having taken over the conduct of the suit No S22-19-2007 ("the 2007 Suit") from another legal firm vide a Notice of Change of Solicitors dated 15 January 2016.
The Dispute
[4] The dispute concerned the payment of alleged fixed or agreed legal fees due from the defendant to the plaintiff in the 2007 Suit. The plaintiff claimed that the defendant, through its director and shareholder, one Lue Sue Seng (DW1) had agreed and promised to pay legal fees in the sum of RM80,000.00 and late payment of legal fees in kind to the value of RM20,000.00.
[5] Subsequently, the defendant engaged its current solicitors to take over the conduct of the 2007 Suit from the plaintiff. The plaintiff averred that in reliance of the defendant's promise to pay its legal fees, it had agreed to the Notice of Change of Solicitors vide a letter dated 18 December 2017.
[6] However, subsequently and despite demands from the plaintiff, the defendant refused, neglected and or failed to pay the said sum of RM80,000.00 as legal fees and RM20,000.00 payment in kind. By this action, the plaintiff claimed for a total sum of RM100,000.00, statutory interests and costs.
The Decision Of The Sessions Court
[7] The Sessions Court accepted the plaintiff's evidence that the defendant through DW1 had promised to pay the sum of RM80,000.00 as agreed legal fees. In so doing, the Court relied on the Notice Bill dated 15 January 2016 (exh PD(1)) issued by the plaintiff to the defendant for the sum of RM80,000.00 and the letter from the defendant's solicitors dated 14 December 2017 in which the said solicitors had inter alia stated that "our mutual clients will settle all outstanding bills with your office".
[8] The Sessions Court, however, did not allow the plaintiff's claim for the RM20,000.00 payment in kind, on the ground that the plaintiff had not led any evidence to prove the claim. There was no cross-appeal by the plaintiff against this part of the Sessions Court's judgment.
This Court's Decision
[9] It must first be amplified that the issue before this Court is not how much legal fees were due to the plaintiff for the work it had done on behalf of the defendant in the 2007 Suit. In other words, the present action is not a taxation proceedings as between the solicitor and his client. The plaintiff's claim is simply that there was a promise, or an agreement between the plaintiff and defendant that the defendant was to pay RM80,000.00 as legal fees to the plaintiff. The present action is therefore, purely a contractual claim. PW3 himself alluded to this fact when he answered in cross-examination (Q/A 7, NOP):
"Q: I put it to you that this claim by the plaintiff is based on the agreed legal fees and not a claim for the alleged work done. Do you agree?
A: I disagree because we the plaintiff put up the fees for work done and whereby the defendant can discharge us anytime but with the payment of the legal fees agreed."
[Emphasis Added]
[10] It is relevant to reproduce the following averments by the plaintiff in its Amended Statement of Claim on the alleged agreement:
"4. During the negotiation between Lue Sue Seng for and on behalf of the defendant and the plaintiff, the defendant had agreed and promised to pay the plaintiff the sum of Ringgit Malaysia Eighty Thousand (RM80,000.00) legal fees to continue to pursue the said Suit (hereinafter referred to as "the Legal Fees").
5. As the defendant had no money to pay for the Legal Fees at that mate
