An agent is not personally liable to third parties for contracts entered into on behalf of their principal; claims must be properly pleaded to establish a cause of action.

Mohd Nazlan Mohd Ghazali J:

Introduction

[1] This was an application (documented in encl 59) by the fourth defendant, in the counterclaim to the main action, to strike out the writ and the statement of claim filed by the plaintiff in the counterclaim under O 18 r 19(1)(a), (b) or (d) of the Rules of 2012 ("the RC 2012").

[2] At the conclusion of the hearing which was conducted via zoom remote communication technology, I allowed the application and provided the principal grounds for the same. This judgment contains the full reasons for my decision.

Key Background Facts

[3] The present suit was initiated by the plaintiff company in the main action against the defendant law firm (for all intents and purposes the plaintiff in the counterclaim). It is essentially a dispute between a client and its solicitors, arising from works said to have been performed by the law firm.

[4] The law firm had billed its client (the first defendant in the counterclaim) a total of RM1,333,288.00 for work done in respect of certain legal proceedings. Even though the first defendant considered it excessive, the sum of RM1,054,000.00 was paid to the solicitors (the plaintiff in the counterclaim) as interim legal fees. The plaintiff was unimpressed, and served a statutory notice to wind-up its client (first defendant in the counterclaim) in accordance with s 281(1)(e) of the Companies Act 1965 for the balance fees of RM283,688.00. This caused SUKSB to dispute the entire fees.

[5] Previously, the first defendant in the counterclaim had also deposited sums of monies with its solicitors. The first was a total of RM9,230,000.00 credited into the latter's client account on 12 January 2012. On 13 July 2012, the solicitors returned a sum of RM8,790,000.00 to the first defendant. However, this did not include the interest on the deposit and the balance of RM440,000.00. The second deposit was on 12 February 2014, which was an amount of RM5,200,000.00. On 16 November 2015, this sum was returned, but did not include the interests accrued thereon.

[6] In total therefore, the first defendant is claiming the interest payments, the part of the sum not returned to it as well as the entire legal fees which it asked to be made subject to taxation, all in the aggregate amount of RM2,288,167.46.

[7] The second defendant in the counterclaim is the receiver & manager of the first defendant company. The sixth defendant, acting through the law firm of the third defendant was retained by the first defendant and the second defendant R&M to claim the said total amount from the plaintiff.

[8] The fourth defendant, also a lawyer, became involved for the purpose of recovering the said total sum from the plaintiff. The fourth defendant was to work with the sixth defendant to recover the said sums from the plaintiff.

[9] Since the fourth defendant knew the plaintiff, the former was instructed to attempt to settle the matter amicably with the plaintiff. A few meetings were held between the fourth defendant and the plaintiff. In the end, the plaintiff agreed to a settlement sum of RM1,575,190.95 to be paid back to the second defendant as the R&M of the first defendant. This settlement sum was paid by way of six cheques which then furnished to the sixth defendant.

[10] The fourth defendant's position is therefore that this was the extent of his involvement, which was all material times acting as an agent of the first defendant.

[11] The plaintiff's grievance, which led to the filing of the counterclaim, is that having furnished those cheques as the result of the representations made by the fourth defendant, for which the said sum of RM1.575 million was to have been subsequently credited into a client's account at the third defendant's law firm (who acted for the first and second defendants) pending taxation assessment or arbitration, the third defendant failed to produced official receipts of the deposits.

[12] However, after further correspondence between the plaintiff and the third defenda