The court clarified that the absence of an oral agreement and the invalidity of a contingency fee arrangement invalidated the plaintiff's claim for legal fees.

[1] This appeal relates to a decision of the learned Judicial Commissioner (JC) given on 25 September 2014 whereby (i) the plaintiff's claim against the 1st and 2nd defendants was allowed, (ii) the plaintiff's claim against the 3rd defendant was dismissed, and (iii) the 1st defendant's counterclaim against the plaintiff was also dismissed.

[2] This appeal is brought by the 1st and 2nd defendants against the part of the decision in allowing the plaintiff's claim against them. The plaintiff is also cross-appealing against the part of the decision dismissing his claim against the 3rd defendant. In this judgment, the parties shall be referred to as they were in the court below.

The Salient Facts

[3] The plaintiff is an advocate and solicitor. The 2nd and 3rd defendants are directors of the 1st defendant company.

[4] In 2009, the 1st defendant engaged the plaintiff to act as counsel in a Kuala Lumpur High court suit ("the Suit") to seek a mandatory order compelling SSF Construction Sdn Bhd to provide documents for inspection; at all material times the 1st defendant's solicitors M/s Tuan, Mohd Zain & Company was still on record. The professional fees agreed upon was RM50,000.00. On 28 August 2009, a consent order for such inspection and access to the documents was obtained.

[5] The plaintiff continued to act as counsel for the 1st defendant for which the parties entered into another fee agreement. In that capacity, the plaintiff entered into a series of settlement negotiations with SSF's solicitors.

[6] The negotiations between the plaintiff and SFF's solicitors did not appear to bear fruit. Subsequently, the 1st defendant and SFF entered into direct negotiations and settled the matter. Thereafter, the Suit was discontinued on 14 January 2010.

[7] The plaintiff's claim against the 1st defendant is for his legal fees amounting to RM5,560,000.00 which the plaintiff asserts was agreed between the parties to a sum equivalent to 8% of the settlement sum. The 2nd and 3rd defendants are sued as guarantors for the due payment of the fees by the 1st defendant.

[8] By way of counterclaim, the 1st defendant is seeking a declaration to nullify the agreement between the 1st defendant and the plaintiff on the legal fees calculated at 8% of the settlement sum, that the plaintiff is not entitled to enforce the said fee agreement, damages to be assessed, interest and costs.

Findings Of The High court

[9] The findings of the learned JC may be summarised as follows:

a) There were discussions between the parties about the plaintiff's remuneration for his work as counsel in the Suit and in the negotiations with SFF's solicitors;

b) The letter of undertaking dated 12 August 2009 signed by the 2nd defendant in his capacity as a director of the 1st defendant company is binding on the 1st defendant;

c) The letter of undertaking is not a contingency fee arrangement but a guide in the calculation of the plaintiff's fee for his work;

d) The plaintiff failed to prove that there was an oral agreement that the fees payable to the plaintiff was a fixed sum of RM5,560,000.00;

e) The plaintiff had carried out his work and discharged his duties in line with the 2nd defendant's instructions that secured the highest settlement sum the defendants could possibly attain in the negotiation with SFF;

f) The Suit was settled at a sum not lower than RM68,500,000.00 which was made possible by the plaintiff's efforts and negotiation skills;

g) The plaintiff failed to prove that the 2nd and 3rd