JUDGMENT
Arziah Mohamed Apandi JC:
Introduction
[1] This appeal spotlights a critical intersection between access to justice and legal ethics, examining whether an investor who funds litigation costs can legitimately contract with lawyers to share successful cases' proceeds. At its heart lies a written undertaking by the Respondent law firm to share 15% of judgment proceeds with the Appellant, who had advanced RM80,000.00 in legal fees to enable litigation that ultimately succeeded. The Sessions Court struck down this arrangement, finding it void for lack of consideration and contrary to professional conduct rules.
[2] The facts unfold against a backdrop where Indah Sebati Sdn Bhd (ISSB) facing financial constraints, required funding to pursue legitimate claims against JKR Terengganu. The Appellant, already an investor in ISSB, stepped forward to fund the litigation by paying the Respondents' legal fees. The Respondents subsequently documented their undertaking to share proceeds in a letter dated 29 September 2017. When the litigation succeeded with a judgment of RM5,130,537.60, the Respondents received their fees but declined to honour their undertaking to the Appellant.
Background Of Claim
[3] Sometime in July or August 2009, JKR Terengganu awarded ISSB a contract for the SKTAI Project. In early 2013, ISSB invited the Appellant to invest RM335,000.00 to help complete the project when it faced financial difficulties. The Appellant invested the money, and in March 2013, an Investment Agreement was signed, giving her rights to 50% of ISSB's profits from the project. ISSB had repaid RM100,000.00 of her investment by January 2014.
[4] Unknown to the Appellant then, JKR Terengganu had terminated ISSB's contract in September 2013. When this was discovered, ISSB wanted to sue JKR but lacked funds for legal fees. The Appellant then referred ISSB to the Respondents' law firm and agreed to pay the initial legal fees of RM80,000.00 for two cases - one against JKR Terengganu and another against KUBB Land Sdn Bhd.