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2024 MarsdenLR 2149
HIGH COURT MALAYA SHAH ALAM
HUAT SIANG HARDWARE SDN BHD – Appellant
Versus
AMIR FAEZAL NORZELA – Respondent
[Civil Appeal No: BA-12BNCVC-49-12/2022]
Solicitors must ensure the Power of Attorney is registered with the land office to avoid professional negligence and protect clients from losses in property transactions.
Headnote:(A) National Land Code - Section 310 - Professional negligence - Appellant claimed against Respondent for professional negligence, misrepresentation, and breach of appointment terms regarding a land transaction - The court found that the Respondent failed to ensure the Power of Attorney was deposited with the land office, leading to the inability to register the Memorandum of Transfer - Appellant suffered losses amounting to RM673,000.00 due to Respondent's failure to exercise the standard of care expected of solicitors. (Paras 30-34)
(B) Standard of Care - The court emphasized that solicitors must ensure the Power of Attorney is deposited with the relevant land office prior to executing agreements and releasing deposits to prevent fraudulent transactions. (Paras 27-29)
Facts of the case:
The Appellant appointed the Respondent for a land purchase, but the Power of Attorney was not registered at the land office, leading to issues in executing the sale and subsequent losses. (Paras 8-21)
Findings of Court:
The Respondent was found to have acted negligently in not ensuring the Power of Attorney was properly registered, which directly impacted the transaction. (Paras 30-34)
Issues: Whether the Respondent exercised the standard of care expected of solicitors in the transaction and whether the Appellant proved professional negligence. (Paras 3-5)
Ratio Decidendi: The court ruled that the Respondent's failure to ensure the Power of Attorney was deposited with the land office constituted a breach of duty, resulting in the Appellant's losses. (Paras 30-34)
Result: The Appellant's claim is allowed for RM528,000.00, with costs awarded. (Paras 36-38)
JUDGMENT
Introduction
[1] Vendors and purchasers of properties place their total trust on the expertise, advice and acts of their conveyancing lawyers to help them complete the tasks of property conveyancing transactions that they are involved in. In this regard, the significance of a conveyancing lawyer's role and responsibilities cannot be overstated. The duties and functions undertaken and discharged by those responsible in such property conveying transactions are indeed onerous.
[2] The present suit/appeal before this Court underscores the above observations and put the spotlight on the professional duties expected of conveyancing lawyers in this country.
The Issues In The Present Suit/Appeal
[3] The overriding issue in the present appeal is whether the learned Sessions Court Judge was correct in dismissing the Appellant's suit initiated against the Respondent based on professional negligence, misrepresentation and breach of the terms of appointment for the sum of RM673,000.00.
[4] In determining this prevailing issue, this Court will have to consider whether a case has been made out against the Respondent for professional negligence, misrepresentation and breach of the terms of appointment on a balance of probabilities.
[5] Foremost is the pivotal issue of whether the Respondent had failed to exercise the standard of care expected of solicitors in the same matter.
The Parties, The Background Facts And The Suit In The Sessions Court
[6] The Appellant in the present appeal, Huat Siang Hardware Sdn Bhd, was the Plaintiff in the Sessions Court .
[7] On the other hand, the Respondent in the present appeal, Amir Faezal Norzela & Chong, a legal firm, was the Defendant in the Sessions Court .
[8] On or around Jun 2018, the Appellant had appointed the Respondent to represent them as its solicitors for the purchase a parcel of freehold land at the purchase price of RM6,600,000.00.
[9] The land in question is registered in the names of 4 individuals, namely, Mohd Rohim Bin Maskor, Ismail @ Haji Ismail Bin Maskor, Siti Rahmah Binti Maskor and Zaiman @ Zainab Binti Maskor.
[10] The Respondent had advised the Appellant that Messrs Malek & Associates was the vendors' solicitors.
[11] On 30 July 2028, in reliance on the Respondent's advice, the Appellant executed a Sale and Purchase Agreement (the terms of which were drafted by the Respondent) and the Memorandum of Transfer (that was prepared by the Respondent).
[12] On the Vendors' part, this Sale and Purchase Agreement and Memorandum of Transfer was executed by Mohd Rohim Bin Maskor for himself and as attorney for Ismail @ Haji Ismail Bin Maskor, Siti Rahmah Binti Maskor and Zaiman @ Zainab Binti Maskor purportedly pursuant to a Power of Attorney dated 25 June 2018.
[13] Although the Power of Attorney was duly registered at the Shah Alam High Court on 25 June 2018 vide Presentation No PA10480/18, it was not registered at the relevant land office notwithstanding that registration of the Power of Attorney at the land office is mandatory under s 310 of the National Land Code .
[14] In reliance on the Respondent's advice as the Appellant's solicitors, the Appellant made the following payments to Messrs Malek & Associates, namely:
1. the sum of RM132,000.00 vide a cheque dated 22 June 2018 being the Earnest Deposit prior to the execution of the Sale and Purchase Agreement; and
2. the sum of RM528,000.00 vide a cheque dated 11 July 2018 being the Balance Deposit upon execution of the said Sale and Purchase Agreement. PA.
Therefore, the total amount paid by the Appellant to Messrs Malek & Associates was RM660,000.00, being 10% of the Purchase Price of the land in question.
[15] On or around February 2019, the Respondent informed the Appellant that the Memorandum of Transfer cannot be executed due to the non-registration of the Power of Attorney at the relevant Land Office. In order to resolve the matter, the Respondent advised the Appellant to "re-execute" the Sale and Purchase Ag
