Law firm fails to strike out suit by its founder Zaid Ibrahim

 

A law firm failed in its bid to strike out its founder Zaid Ibrahim’s lawsuit that sought to stop it from using his name.

The High Court in Kuala Lumpur this afternoon denied the striking-out application by Messrs Zaid Ibrahim & Co against the suit by the former de facto law minister.

Judge Ahmad Bache made the decision, which was issued via email to the parties involved.

In a copy of the ruling made available to the media, the judge ruled that the legal action is not something that is suitable to be decided summarily via a striking-out application.

He noted that the law firm’s ground, which was that the suit was filed out of time, is a question of fact that needs to be decided via full hearing of the main suit.

“This is not a fit and proper case to dispose summarily based on pleadings and affidavit evidence alone.

"Hence, a trial should be conducted whereby witnesses will be called to give via voice evidence. They can be examined, cross-examined, and re-examined,” Ahmad said. He then fixed Aug 17 for further case management of the suit.

According to the written ruling, the judge also dismissed Zaid's application for an injunction to restrain the law firm from using his name, pending the disposal of the main suit.

Ahmad noted that an injunction is not appropriate at this stage as the issue, linked to the goodwill of the legal firm's name, can only be fully decided through the hearing of the main suit.

Later today, via a media statement, Zaid Ibrahim & Co lauded the court's decision to dismiss Zaid's injunction application and allow the firm to continue using the current name, pending the disposal of the main suit.

"We have never disputed the plaintiff's right to set up his own law firm with his own name under a different style. We maintain our position that the plaintiff's action against our right to use the name 'Zaid Ibrahim & Co' is without merit or basis in fact and in law," the firm said.

On Nov 18 last year, Zaid filed the suit against the law firm he founded in 1987.

On Oct 28 last year, it was reported that Zaid, who was former Kelantan DAP chief, would be returning to the legal firm he founded 34 years ago, where he was then to assume the post of chairperson, effective Nov 1.

After having been with the firm for 21 years, the plaintiff left in March 2008 to assume the post of minister of legal affairs and judicial reform. He held the ministership until September the same year.

Zaid claimed that after taking up the legal firm’s chairperson post on Nov 1 last year, the firm suddenly, on Nov 9, served him a notice of termination from all posts in the firm with immediate effect.

“The termination was based on what was termed as 'unauthorised acts', which the plaintiff was alleged to have done unilaterally, the precise nature of which were not specified.

“The plaintiff avers and will contend that the purported termination of his positions as chairperson and as an equity partner of the firm was wrongful and he reserves his rights to seek appropriate relief against the defendant,” alleged the suit’s statement of claim.

The plaintiff claimed that the defendant’s use of his personal name as the name of the law firm would amount to misrepresentation.

Former de facto law minister Zaid Ibrahim

Zaid claimed that the use of his personal name by the firm would lead the public to believe the services provided by the firm were actually provided by him and/or the defendant was economically related to the plaintiff.

“By reason of the defendant’s wrongful use of the plaintiff’s name as the name of its law practice, the plaintiff has been deprived of the use of his own name, which he had used to set up the defendant’s firm in the first place,” the statement says.

The plaintiff also claimed that the firm is wrongfully utilising his name in its name as it would amount to a breach of Bar Council Ruling No 2.01.

“The plaintiff had been terminated from the firm with immediate effect from Nov 9, 2020. As such, the plaintiff was and is no longer a partner or a member of the defendant’s firm.

“With the termination of the plaintiff, the partnership was effectively dissolved and the defendant continued in its practice thereafter as a newly constituted firm without the plaintiff.

“In the premises, the defendant is not entitled, as a matter of law, or professional requirements, to use the plaintiff’s name as the name of its practice that is currently functioning,” Zaid argued.

However, through a statement of defence filed on Dec 2 last year, the law firm contended that the plaintiff was statutorily time-barred from filing the suit.

Zaid Ibrahim & Co claimed that this is due to Zaid only instituting the suit in November last year, which was 12 years after he allegedly inked an agreement with the firm to relinquish all his interests, rights and assets in the firm.

“Neither the execution of the said 2008 agreement nor its performance has ever been questioned or challenged by the plaintiff until the institution of this suit in November 2020,” the law firm claimed.

“For 12 years, from 2008 to September 2020, the plaintiff never asserted any claim or interest in the equity, goodwill, name or any part of the business of the firm.

“The plaintiff’s action herein filed on Nov 18, 2020, is therefore time-barred by the doctrine of limitation pursuant to Section 6 of the Limitation Act 1953. The defendant shall forthwith apply to have this action struck out by reason of limitation,” the law firm alleged.

Section 6 of the Limitation Act states that generally, legal action shall only be filed within six years from the date that a cause of action accrued over a contract.

The law firm also claimed, among others, that Zaid never asserted any claim or interest in the firm’s name even during his tenure as its consultant from July 2018 until October last year.

The firm contended that after March 2008, Zaid was never offered the position of being its equity partner, and no equity in the firm was ever offered to him. It claimed that the plaintiff held the position of partner without equity. - Mkini