TETUAN H T LIM & PARTNERS v 1. ) TEH MENG TECK 2. ) KEK YOKE PENG

Case Significance

Illustrates that a law firm must establish privity and a properly constituted retainer, by express agreement or a pleaded implied relationship, before it can recover fees from persons who merely assisted a client without engaging the firm.

This High Court decision at Johor Bahru concerns a civil appeal from the Sessions Court in a claim by a law firm to recover unpaid legal fees. The firm had been engaged by a client to act in an earlier civil suit concerning a shophouse and a disputed half-share in land, and rendered a bill of costs amounting to RM116,202.35. When the fees went unpaid, the firm sued not only its retaining client but also two further defendants, the respondents in this appeal, who were relatives connected to the underlying property dispute and who had assisted the elderly client in relation to the earlier litigation. The Sessions Court had dismissed the suit against the respondents on the ground that there was no privity of contract between them and the firm, because the Warrant to Act in the earlier suit had been signed only by the retaining client and neither respondent had signed it. On appeal the firm contended that the respondents had, in substance, agreed to be responsible for the fees and had been involved in updating the client on the progress of the litigation, giving rise to a solicitor-client relationship. The central question was whether a solicitor-client relationship, and with it liability for fees, could be established against persons who had not signed the warrant to act, whether by an express retainer, an express assertion by the solicitor to act for them, or an implied relationship arising from the manner in which they assisted. The court reviewed the record of appeal against the Sessions Court's grounds and found no express agreement and no pleading capable of supporting an implied retainer, observing that any such contention would have had to be pleaded. Holding that there was no misdirection by the Sessions Court and that its decision was not plainly wrong so as to justify appellate intervention, the court dismissed the appeal. The judgment is a useful illustration of the requirement of privity and a properly established retainer before a law firm can recover fees from persons who assisted a client but did not themselves engage the firm.