Is there a conflict of interest where a lawyer had witnessed the execution of an agreement and subsequently acted in a matter which breaches the said agreement?

SYED AHMAD IMDADZ SAID ABAS v. IMEJ MUHIBAH SDN BHD; MAJLIS PEGUAM MALAYSIA (INTERVENER) [2021] 1 LNS 477

• Syed Ahmad Imdadz B Said Abas is an advocate and solicitor practising as a sole proprietor in Ipoh, Perak (“Lawyer”).

• Imej Muhibah Sdn Bhd (“Developer”) had complained to the Advocates & Solicitors Disciplinary Board (“DB”) that the Lawyer is suspected of having acted in conflict of interest and having conspired to defraud it.

• The Developer had entered into a Joint-Venture Agreement (“JVA”) with Pintar Asiamas Sdn Bhd (“Landowner”) who was the landowner of a piece of land in Perak (“Said Land”) to develop the Said Land into a housing scheme.

• The Lawyer had witnessed the execution of the JVA by the Landowner as well as the power of attorney given by the Landowner to the Developer (“PA”).

• It subsequently came to the knowledge of the Developer that during the pendency of the JVA, the Landowner who was obliged not to sell the Said Land to any third party, had entered into a sale and purchase agreement (“SPA”) to sell the Said Land to a third party.

• The SPA was prepared by the Lawyer and the Lawyer had witnessed the execution of the SPA by both the Landowner and the third party.

• The Lawyer denied it acted for any party to the JVA and asserted that he was not privy to the terms and conditions of the JVA and his role was merely to witness and attest the execution of the JVA and PA by the Landowner. Given this limited role, there is no misconduct on his part.

• In reply, the Developer asserted that in any event, in drawing up the SPA, the Lawyer would have become apprised of the terms of the JVA and would be aware that both the JVA and the SPA were to do with the Said Land.

• The Disciplinary Committee (“DC”) at a hearing conducted found the Lawyer guilty of misconduct which amounts to grave impropriety, that is to say, had gross disregard of his client’s interest and his conduct is unbefitting of an advocate and solicitor which brings the legal profession into disrepute.

• The DC recommended that the Lawyer be suspended from practice for 2 years.

• The Lawyer appealed to the High Court.

• The High Court dismissed the appeal in part where it agreed with the finding of liability of the DC. There were evidence to show that the Lawyer’s involvement went beyond that of mere attestation or witnessing of the JVA and PA.

• Therefore, the Lawyer had acted in conflict of interest and the attempt to cover up the same is conduct unbefitting that of an advocate and solicitor.

• However, the court was of the view that the DB ought to have notified the Lawyer of its intention to impose a punishment or penalty that is likely to be adverse against him and given him a reasonable opportunity to be heard to defend himself against the proposed punishment.

• Therefore, the order of punishment of the DB is set aside with the matter to be remitted back to the DB for the DB to give the Lawyer a reasonable opportunity to be heard before it makes an order that is likely to be adverse against the Lawyer.