An agent's liability for breach of warranty of authority is strict, regardless of good faith or knowledge of misrepresentation.

Introduction

[1] The 1st to 4th plaintiffs purchased a piece of land from the purported owner. It later transpired that the purported owner was not the true owner of the land but a fraudster who impersonated the true owner. Consequently, the plaintiffs failed to acquire title to the land. The plaintiffs sued the solicitors (the 1st defendant) who were acting for the purported owner for damages for breach of warranty of authority to act and for breach of stakeholders duties. The plaintiffs also sued (i) their own solicitors (the 2nd defendant) for negligence, (ii) the Registrar of Titles and the Selangor State Government (the 3rd and 4th defendants) and its officers (the 5th and 6th defendants) for negligence and breach of statutory duties.

[2] After a full trial of the action, the learned judge allowed the plaintiffs claim and apportioned liability against the defendants as follows:

The 1st defendant - 70%

The 2nd defendant - 10%

The 3rd-6th defendants - 20%

[3] Appeal 146 is by the 1st defendant whilst Appeal 171 is by the 3rd to 6th defendants. In this judgment, the parties shall be referred to as they were in the court below.

The Salient Facts

[4] The background facts in this case have been comprehensively set out in the judgment of the learned judge. We shall set out a brief summary of the salient facts.

[5] Pursuant to a Sale and Purchase Agreement dated 1 June 2012 ("the SPA"), the plaintiffs purchased a piece of agricultural land from a fraudster who claimed to be Soh Chuan Seng, the purported owner for the purchase price of RM2.6 million. The 1st defendant was acting as solicitors for the fraudster whilst the 2nd defendant was acting for the plaintiffs.

[6] Prior to the execution of the SPA, the following events transpired:

i. the 1st defendant had forwarded vide e-mail to the 2nd defendant a "Warrant to Act" dated 9 May 2012 signed by the fraudster;

ii. a land search at the land registry showed that the fraudster was the registered proprietor;

iii. the plaintiffs had deposited the deposit sum of RM700,000.00 ("the Deposit Sum") with the 2nd defendant;

iv. the 2nd defendant forwarded a cheque for the Deposit Sum drawn in favour of the fraudster to the 1st defendant to be held as stakeholders; and

v. on 31 May 2012, the 1st defendant wrote to the 2nd defendant confirming that the original issue document of title ("IDT") was in his possession and that the fraudster did not have an income tax file reference. He also enclosed the SPA and the memorandum of transfer duly executed by the fraudster, certified true copies of the IDT, quit rent receipt and the fraudsters identity card.

[7] On 4 June 2012, the plaintiffs lodged a private caveat over the land. The following day, the 2nd defendant forwarded the executed and stamped copies of the SPA to the 1st defendant. Meanwhile, at the 1st defendants requests, the plaintiffs deposited the sum of RM52,000.00 with the 2nd defendant as part payment of the purchase price. The 2nd defendant would remit the said sum to the Inland Revenue Board to account for real property gains tax on the fraudsters behalf.

[8] On 30 August 2012, the 2nd defendant forwarded the balance purchase price of RM1,848,000.00 to the 1st defendant as stakeholders. The 1st defendant was not going to release the same to the fraudster "unless and until the Transfer is duly presented at the relevant Land Office". On 3 September 2012, the 2nd defendant received the original IDT and related documents from the 1st defendant.

[9] The 2nd defendant was unable to present the transfer documents for registration as there was a caveat lodged over the land by Top Glove Engineering Sdn Bhd ("Top Glove"). However, after Top Gloves caveat was subse