Commission-based lawyer may still qualify as partner, court rules

The Court of Appeal ruled that a lawyer's commission-based remuneration did not automatically disqualify him from being considered a partner under the Partnership Act 1961. (Pexels pic) PUTRAJAYA: The Court of Appeal here has unanimously overturned lower court rulings that absolved a lawyer of liability as a partner in a law firm over RM920,612 in missing property sale proceeds.

Justice Azhahari Kamal Ramli, who led a three-member bench, ruled that a lawyer's commission-based remuneration did not automatically disqualify him from being considered a partner under the Partnership Act 1961.

Justices Ismail Brahim and Dean Wayne Daly were the other members of the panel.

As such, the court allowed Dev Kumar's appeal against earlier rulings by the sessions court and High Court concerning lawyer Puung Kok Peing's status as a partner in Messrs Yuen & Co. It also awarded Dev RM30,000 in costs.

The dispute arose from the 2014 sale of a condominium in Mont Kiara for RM1.5 million.

Dev claimed that he had not received the sale proceeds, including RM900,439 transferred into the law firm's client account on Oct 20, 2014.

Following today's decision, Pung has to pay RM920,612 as judgment sum to Dev.

Yuen Kwong Yai, who was a partner in the firm, was earlier struck off the roll of advocates and solicitors and was convicted in absentia of criminal breach of trust involving a client's money in a separate case. He remains at large.

The central issue in today's judgment was whether Puung could be considered a partner despite being paid commissions for legal files he personally handled, rather than sharing in the firm's profits and losses.

In its decision, the bench considered the Partnership Act's definition of a partnership as a relationship between persons carrying on a business in common with a view to profit.

It found that the Act did not distinguish between salaried, equity and commission partners.

The bench also considered a Bar Council letter dated Dec 26, 2016, concerning Puung's status, as well as the legal effect of internal arrangements within a firm on third parties dealing with it.

Dev was represented by Dinesh Nandrajog and Wong Shu Min, while V Satish, S Joshua and Angeline Nga appeared for Puung.

Manmohan Singh Kang appeared for the Bar Council as amicus curiae or friend of the court.