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2024 MarsdenLR 98
HIGH COURT MALAYA KUALA LUMPUR
MUHAMMAD ZAHIR SANJAY ABDULLAH – Appellant
Versus
MENTARI DHUHA SDN BHD; MAJLIS PEGUAM MALAYSIA (INTERVENER) – Respondent
[Originating Summons No: WA-17D-26-07-2022]
An advocate's failure to return stakeholder funds constitutes professional misconduct under the Legal Profession Act, proven beyond reasonable doubt.
Headnote:(A) Legal Profession Act 1976 - Sections 93(c), 93(o), 99(1), 103A, 103B(4)(a), 103D(2), 103D(3) - Misconduct of an advocate and solicitor - Appellant struck off the Roll of Advocates and Solicitors for breaching duty as stakeholder and misappropriating RM380,000.00 held for client - Appellant failed to return funds despite no contract being signed, citing unproven defamation as justification - Disciplinary Committee and Board affirmed findings of misconduct. (Paras 12, 14, 30, 54)
(B) Appeal - Principles for appellate intervention in disciplinary matters - The court should not interfere unless there is a clear error in principle or material fact overlooked - Appellant's arguments lacked merit as the misconduct was established beyond reasonable doubt. (Paras 16, 18)
Facts of the case:
The appellant, an advocate, held RM380,000.00 as a stakeholder for a cleaning services contract but failed to return it after the contract was not executed, citing defamation as a reason.
Findings of Court:
The appellant was found guilty of professional misconduct for not returning the funds, which he was obligated to do under the terms of the stakeholder agreement.
Issues: Whether the finding of misappropriation was within the scope of the complaint and whether the appellant's actions constituted professional misconduct.
Ratio Decidendi: The court held that the appellant's failure to return the funds constituted a breach of professional duty, and the claim of defamation did not justify withholding the money.
Result: Appeal dismissed.
JUDGMENT
Introduction
[1] This is an appeal by the appellant, an advocate and solicitor, against the order of the Advocates & Solicitors Disciplinary Board ("DB") dated 28 May 2022 which had affirmed the recommendation of the Disciplinary Committee ("DC") on both the finding of misconduct and of punishment, namely, striking off the appellant from the Roll of Advocates and Solicitors.
[2] The appellant in its written submissions raised the following grounds of appeal:
(i) The complaint by the applicant was not misappropriation or misuse of the RM380,000.00;
(ii) misappropriation or misuse of the RM380,000.00 held as a stakeholder was not proven beyond a reasonable doubt;
(iii) the appellant was justified in not releasing the monies on the instructions of his client, Big Blue Capital (M) Sdn Bhd unless an apology is tendered by the respondent for allegedly defaming him and his client;
(iv) It was not necessary to prove by evidence that monies were still in his account as the DC never asked for such proof and the DC unfairly drew adverse inference on the failure to produce such proof when no request for such proof was ever made; and
(v) The DB, ought to have given the appellant a right to appear before the DB to make its case.
[3] On 29 January 2024, I dismissed the appeal. This judgment contains the reasons for my decision.
The Background Facts
[4] At material times the appellant was an advocate and solicitor practising under the name and style of Messrs Muhammad Zahir. The appellant was the solicitor representing Big Blue Capital (M) Sdn Bhd. The respondent, Mentari Dhuha Sdn Bhd, and Big Blue Capital (M) Sdn Bhd had entered into an agreement for the succouring of a cleaning services contract in favour of the respondent. For this purpose, the respondent was required to deposit a commitment fee of RM380,000.00 with Messrs Muhammad Zahir as a stakeholder. The role of the appellant was stated in the following terms in a letter dated 15 March 2018 by Messrs Muhammad Zahir signed by the appellant to the respondent:
CLEANING SERVICES CONTRACT
We refer to the above where we act for Big Blue Capital (M) Sdn Bhd.
We have been informed by our client that you have agreed with our client in the following terms:
(1) .....
(2) .....
(3) .....
(4) You are required to make a commitment fee to our client of RM380,000.00 due to our client's permission granted to you to enter into an agreement with the owners of the designated premises, which is to be deposited into our client's account, the details of which are as follows:...
(5) In the event no Letter of Contract and/or Letter of Award is signed between your company and SURIA KLCC in the expiry of three (3) months, we shall refund the commitment fees of RM380,000.00 to you; and
(6)
We expect the commitment fees to be placed with us by Thursday, 15 March 2018
[Emphasis Added]
[5] When no contract was procured between the respondent and Suria KLCC according to the stipulated time of three months, the respondent asked for the return of the commitment fees held by the appellant. Subsequently, demands were made for the return of the monies. However, the appellant gave conflicting reasons for the non-return of the monies. He first said that he was in the midst of returning the money. Then said that his client had instructed him not to return the monies until an apology is tendered by the respondent for alleged defamatory statements made against it, its director, and the appellant. In a letter dated 1 October 2018, legal action for defamation in the amount of RM10,000,000.00 was threatened against the respondent.
[6] It is important to observe that at the time the DB confirmed the recommendations of the DC on 28 May 2022 the RM380,000.00 was not returned to the respondent and neither was any defamation suit filed by the appellant, Big Blue Capital (M) Sdn Bhd or its director.
[7] In view of the failure to return the monies, the respondent was forced to resort to the Sessions Court to recover th
