Federal Court denies law firm’s RM400,000 fee claim from seized assets

 

The Federal Court said lawyers are not entitled to be paid fees from seized property under an anti-money laundering law. (Reuters pic)

PETALING JAYA: The Federal Court has dismissed a law firm’s appeal to have its legal fees paid out of from “illegal” assets seized from a client by the government under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Amla).

In a majority decision, Chief Justice of Sabah and Sarawak Abdul Rahman Sebli and Justice Hasnah Hashim ruled that Wan Shahrizal, Hari & Co was not entitled to recover RM398,722 in fees from assets seized from its client, Amar Asyraf Zolkepli.

Justice Mary Lim dissented.

“Unquestionably, the RM398,722 is money owing to the appellant (the law firm) by Amar, which he is at liberty to pay using any property at his disposal but not from the seized property, which we reiterate is illegal property,” Rahman said in a written judgment released last week.

“Illegal property does not become legal property by using it to pay legal fees.”

He said the court would be setting a “dangerous precedent” if a law firm acting for a client in forfeiture proceedings were “as a matter of right entitled to be paid its legal fees using the proceeds of an unlawful activity”.

“That will be as good as returning the seized property to the person (from whom it is seized) and allowing him the benefits of his crime.”

Under the law, he said, the burden fell upon a claimant to show that he was a bona fide party with a “legitimate legal interest” in seized property.

He said the apex court found no such evidence “save for the bills charged to Amar as legal fees, which merely shows that Amar owes that sum of money to the (law firm)”.

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The court also rejected the law firm’s contention that a lawyer, by virtue of his position as an officer of the court, was a bona fide third party.

“(That) is a fascinating (proposition) and has far-reaching consequences. It suggests that a lawyer is entitled to be paid his legal fees using property seized as a matter of right.

“Effectively, this will, as against lawyers, (be) a major impediment to the government’s effort to combat money laundering, as illegal money seized under the Act could then be cleansed by using it to pay for lawyers’ fees.”

Amar was investigated in June 2016 for offences under the Penal Code and Computer Crimes Act 1997.

Those investigations revealed that he was in possession of a computer software which enabled access to the immigration department’s “MYIMM” system without need for a password or fingerprint.

Amar had provided the software to a syndicate which used it to unlawfully approve employment passes, for which he was paid RM1,000 for every approval.

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The authorities seized from him assets comprising almost RM554,000 held in bank accounts, an apartment in Batu Caves, Selangor, and a car.

The law firm’s claim to be paid its legal fees out of the seized assets was initially allowed by the Temerloh High Court, which said he had a constitutional right to legal representation, and the law firm had successfully proven that it was appointed to represent him.

The firm had also produced documentary evidence in the form of bills issued to Amar for the sum claimed, which the High Court judge said was sufficient to establish its claim to be paid from the seized assets.

The High Court’s decision was, however, overturned by the Court of Appeal. - FMT