ENERGISER PROPERTIES SDN.BHD v CHOY KAM LEE beramal dibawah nama gaya K.L.CHOY & CO

Case Significance

Illustrates the principal-agent distinction in a claim for legal fees, holding that a client acting as principal cannot invoke section 183 of the Contracts Act 1950, and that a written acknowledgment of a debt under sections 26(2) and 27 of the Limitation Act 1953 postpones the running of limitation.

This High Court decision concerns a solicitor's recovery of unpaid legal fees, and whether the client's principal-agent argument and a limitation defence could defeat the claim. The respondent, an advocate and solicitor, had rendered litigation services in a large number of suits between 2008 and 2013 involving a co-operative, having been engaged to act at the request of the appellant company, which coordinated and managed the litigation. All letters of appointment, instructions and fee payments passed directly between the appellant and the respondent, without reference to the co-operative. On the conclusion of the suits, the parties agreed that the fees would be settled by the transfer of a property, and a sale and purchase agreement was executed in 2016, but the transfer could not be completed because of Bumiputera restrictions on the property. After a demand went unmet, the respondent sued to recover the fees, and the Sessions Court, after a full trial, allowed the claim; the appellant appealed. The court addressed whether the appellant had acted as principal or merely as agent for the co-operative, and whether it could rely on section 183 of the Contracts Act 1950, which concerns an agent's position where the principal is disclosed. It held that the appellant had consistently conducted itself as principal in all material dealings and could not invoke section 183. On limitation, it held that the subsequent property-settlement agreement amounted to an acknowledgment of the debt in writing within sections 26(2) and 27 of the Limitation Act 1953, so that time ran afresh and the claim was not time-barred, the delay having been induced by the ongoing settlement negotiations. Finding the arguments on estoppel, constructive trust and professional breach without merit, the court dismissed the appeal, holding the appellant liable for the fees, and awarded costs of RM10,000. The judgment is a useful illustration of the principal-agent distinction in a fee claim and of acknowledgment of a debt postponing limitation.