Solicitors owe a duty of care to beneficiaries, with negligence established when they fail to protect those beneficiaries' interests.

Prelusion

[1] The Plaintiffs are the beneficiaries of the estate of Omar Bin Arshad (Estate). In an earlier case, the Estate ie the beneficiaries were granted RM350K in compensation (the RM350K compensation money).

[2] The 1st Defendant (D1) was the Advocate and Solicitor who had the conduct of the earlier case. The 2nd Defendant (D2) was the firm of solicitors on record for the Plaintiffs in the earlier case. D1 practised law in D2.

[3] Instead of paying the RM350K compensation money to the Estate or to the beneficiaries of the Estate, the Defendants paid RM295K out of the RM350K compensation money to Baharul Azhar Bin Omar (Baharul Azhar), who is one of the beneficiaries of the Estate. Also, the Defendants retained the balance RM55K for themselves, as fees and expenses.

[4] The Plaintiffs sued the Defendants for negligence-for paying RM295K to Baharul Azhar, and retaining RM55K as fees and expenses, without the consent of the beneficiaries.

[5] The Plaintiffs seek RM1 million in general damages, RM200K in aggravated damages and RM300K in exemplary damages.

The Defendants' Defence

[6] In their Defence, the Defendants pleaded that:

(1) they were appointed by Baharul Azhar;

(2) they took instructions from and communicated only with Baharul Azhar;

(3) they owed no duty of care to the Plaintiffs.

The Issues To Be Tried

[7] The agreed issues to be tried are:

(1) Whether the Defendants owed a duty of care to the Plaintiffs;

(2) Whether the Defendants breached that duty of care by paying RM295K out of the RM350K compensation money to Baharul Azhar, and retaining RM55K as legal fees and expenses, without the consent of the other beneficiaries of the Estate;

(3) If the Defendants breached the duty of care, how much damages are they entitled to?

A Few Preliminary Matters

[8] A few preliminaries:

(1) The 2nd and 4th Plaintiffs discontinued their claims before the trial. The 1st Plaintiff (P1) and the 3rd Plaintiff (P3) pursued their claims I will refer to P1 and P3 together as "the Plaintiffs".

(2) I will refer to the 1st Defendant (Zulhazmi Bin Zakaria) as D1, and the 2nd Defendant firm of solicitors (Tetuan Termizi & Co) as D2.

(3) I will refer to D1 and D2 together as D1D2.

[9] The trial took 5 days to finish.

[10] The List Of Witnesses who testified at the trial is set out here:

The Pertinent Facts

[11] The Plaintiffs are two of the 10 beneficiaries of the Estate.

[12] From about 1994, there was a land acquisition exercise involving the Estate's land. There were allegations of wrongdoing related to the acquisition.

[13] In 2007, the Estate filed a suit against the authorities and persons whom the Estate asserted caused loss and harm to the Estate in the land acquisition exercise. The suit was Penang High Court Civil Suit No:22130-2007 (Suit 130).

[14] In the intitulement of Suit 130, the plaintiff was stated as "Harta Pesaka Allahyarham Haji Omar Bin Arshad @ Omar Bin Chat (melalui Hj Baharul Azhar Bin Omar sebagai wakil waris-waris yang sah)".

[15] The firm of solicitors initially on record for the plaintiff in Suit 130 was Tetuan Mohd Zawahid & Co (Tetuan Zawahid). The Advocate and Solicitor practicing in Tetuan Mohd Zawahid & Co who acted for the plaintiff in Suit 130 was D1.

[16] D1 then left Tetuan Zawahid and joined D2. Later, D2 took over the conduct of Suit 130 from Tetuan Zawahid, and D2 had conduct of Suit 130 again.

[17] It suffices for the purpose of this Judgment to say that Suit 130 resulted in the outcome where the Estate was granted the RM350K compensation money. The Court Order for this RM350K compensation sum was recorded in Augus