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Legal Update 4 of 2021

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    Legal Update 4 of 2021

    By jhj admin | Legal Updates | 0 comment | 26 February, 2021 | 0

    Was there a conflict of interest in having the same legal firm represent the Investigation Committee of MIA and MIA at different proceedings?

    Case:

    NG YEE HONG v. MALAYSIAN INSTITUTE OF ACCOUNTANTS [2021] 1 CLJ 666

    Brief Facts:

    • Ng Yee Hong (“Ng”) was a professional accountant and a member of the Malaysian Institute of Accountants (“MIA”).

     

    • He audited the accounts of a corporation known as 1MDB for the financial years 2013 and 2014.

     

    • In respect of this audit, 2 complaints were lodged with the MIA.

     

    • The Investigation Committee (“IC”) of the MIA investigated both complaints and at the conclusion of the investigations, the IC preferred disciplinary charges in respect of both complaints against Ng before the Disciplinary Committee (“DC”) of the MIA pursuant to section 20(1) of the Accountants Act 1967 (“AA”).

     

    • The parties referred to the disciplinary proceedings as NYH-1 and NYH-2.

     

    • The DC made a finding against Ng in NYH-1, which was concluded earlier.

     

    • Ng filed an appeal to the Disciplinary Appeal Board of the MIA (“DAB”), which appeal was still pending.

     

    • Subsequently, Ng applied for dismissal of the charge in NYH-2 before the DC on the ground that the charge under it was the same as the charge in NYH-1.

     

    • The DC dismissed this application (“Said Decision”).

     

    • Dissatisfied with the decision of the DC not to dismiss NYH-2, Ng filed an application for judicial review to quash the Said Decision.

     

    • Mr T Sudhar and Miss Tania Edward of Messrs Steven Thiru & Sudhar Partnership (“STSP”) appeared for the MIA at the judicial review proceedings and represented the IC at the disciplinary hearing before the DC (that is, in NYH-1 and NYH-2).

     

    • Ng filed an application to recuse any lawyer from the firm of STSP from representing the MIA as either solicitor or counsel in the judicial review proceedings. Ng argued that, amongst others, by representing the IC before the DC and at the same time representing the MIA in the judicial review proceedings and DAB, STSP would be ‘engaged pre-emptively with members of the DC and DAB on matters relating to NYH-1 and NYH-2’.

     

    • The High Court found that STSP was not in a position of conflict of interest by representing the MIA in the judicial review proceedings and dismissed the recusal application.

     

    • Hence, Ng appealed to the Court of Appeal.

    COURT OF APPEAL DECISION – APPEAL ALLOWED!

    The Court of Appeal allowed the appeal on the following basis:

     

    • As the IC was the investigator/prosecutor, the objectivity of STSP in defending the charge at the judicial review hearing would be open to question as they represented the IC at the DC hearing.

     

    • In other words, STSP could very well be defending their own earlier advice to the IC at the judicial review proceeding.

     

    • As lawyers are officers of the court, apart from advancing the cause of their client, they have an overriding duty to the cause of justice. It could not be denied that there was an appearance of a conflict of interest.

     

    • Any other law firm appointed to represent the MIA would not have appeared for the IC at the DC hearing. Thus, they would be able to represent the MIA at the judicial review hearing objectively and impartially without being preoccupied with the question whether they had given the correct advice to the IC in respect of the charge in NYH-2.

     

    • The continued representation of the MIA by STSP in the judicial review proceeding would lead to the perception that STSP had placed itself in a position of conflict of interest. It could also, at the same time, demolish the ethical wall between the three disciplinary committees that had been carefully constructed by the AA and the rules made thereunder.
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