[2022] 2 MLRA 110

Court of Appeal, Putrajaya
Yaacob Md Sam, S Nantha Balan, Darryl Goon Siew Chye JJCA
[Civil Appeal No: W-01(A)-304-05-2018]
27 October 2021


Darryl Goon Siew Chye JCA:

[1] On 3 November 2016, the respondent, the Malaysian Bar, wrote to the appellant, the Ketua Pengarah Hasil Dalam Negeri. By this letter, the appellant was informed that the respondent had received complaints from its members. The complaints were that the appellant had been carrying out raids on law firms to conduct audits on their clients' accounts and insisting on having sight of accounting books and records pertaining to these accounts.

[2] In its letter, the respondent expressed its objections and its view that the documents and information sought by the appellant were protected by solicitor-client privilege and may not be made available to the appellant.

[3] On 7 December 2016, the appellant replied. The appellant maintained that the audits complained of were necessary to ensure "tax compliance" by taxpayers. The Appellant maintained that the audits were not in breach of any solicitor-client privilege by reason of s 142(5) of the Income Tax Act 1967 ("ITA") which overrides the provisions of Chapter IX of Part III of the Evidence Act 1950 ("EA") and the Legal Profession Act 1976 ("LPA"). Accordingly, it was maintained that the actions of the appellant complained of were not in breach of any solicitor-client privilege.

[4] In light of the divergent views of the parties and their disagreement as to whether the law relating to solicitor-client privilege was being ignored and under threat by the appellant's actions complained of, the respondent brought the matter to Court seeking several declarations on the issue.

[5] On 2 April 2018, the High Court ruled in favour of the respondent and made the declarations sought. In essence the learned High Court Judge (as His Lordship then was) held that s 142(5) of the ITA did not override s 126 of the EA. Thus, the privilege provided under s 126 of the EA precluded the appellant from insisting on documents or information in respect of or relating to the clients' accounts of advocates and solicitors. The appellant appealed.

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