JUDGMENT

Syed Agil Barakbah FJ:

This is an appeal against the decision of Mohd. Yusoff J in the High Court, Kuching, delivered on 7 June 1983 giving judgment for the respondents/plaintiffs for loss of money lent and awarding damages in the sum of RM136,898.12 made up of RM66,900 being principal sum lent plus interest at O.8% per mensem as from 30 September 1977, interest on RM66,900 at O.8% per mensem from 1 October 1977, and from date of judgment to date of settlement and costs.

The appellants are a firm of Advocates and Solicitors having their registered office in Kuching and the respondents are a finance corporation having their registered office in the same town.

The respondents' claim in the Court below was for damages for loss and expenses caused by the negligence and breach of contract of the appellants as the respondents' solicitors/advocates in failing to act in accordance with the assurance given by the appellants to the respondents in a letter dated 15 August 1966 (AB12).

Facts

It is common ground that during the latter part of 1966, Penghulu Francis Umpau (the Purchaser) wanted to build a dwelling house and decided to buy two lots of land Nos. 1244 and 1248 Block 10 Kuching Town Land District (the said land) from M/s. Ong Construction Company (the Developers). The respondents agreed to lend him a sum of RM70,000 for the purpose on condition that the said land would be charged to them. At the respondents' request the appellants prepared an agreement relating to the proposed loan in which the respondents were referred to as the Financier, the Developers and the Purchaser were parties. The agreement was executed on 25 July 1966 and contained inter alia the following express terms:

2. The Developers shall build on the said land a dwelling house according to the drawing and plan prepared by the Purchaser...

3. The price of the said land and the completed dwelling house shall be RM62,000, payment of which shall be in accordance with the Schedule of Payment as hereinafter stated.

4. The Financier shall lend the Purchaser a sum of RM70,000 (Dollars Seventy thousand only) of which a sum of RM62,000 shall be assigned by the Purchaser to the Developers and the Financier shall release the same to the Developers' bankers the Bian Chiang Bank Ltd. from time to time according to the said Schedule of Payment. The said loan shall bear an interest of 0.8% per mensem and repayable by the Purchaser within 20 years that is to say on or before 25 July 1986.

5. As soon as the Developers shall have obtained the issue documents of title to the said land the Developers shall execute a memorandum of transfer of the said land to the Purchaser and simultaneous therewith the Purchaser shall execute a memorandum of charge on the said land in favour of the Financier as security for the repayment of the said loan of RM70,000 and for the said interest thereon. For bringing into effect of the above, the Financier shall secure for the Developers a discharge of charge created by the Developers in favour of Bian Chiang Bank Ltd. Provided that the moneys payable under the Schedule of Payment shall be paid to the said Bian Chiang Bank Ltd. as creditors of the Developers.

Thereafter the appellants had the agreement registered in the Registrar-General Registry at Kuching on 15 August 1966 and wrote to the respondents enclosing a registered copy of the same. The letter and the agreement are the documents referred to at the trial and are therefore of vital importance in deciding the central issue involved. The letter (AB12) states as follows:

Loan to Penghulu Francis Umpau

Re: Agreement dated 25 July 1966

We enclose herewith a copy of agreement duly registered for your file. According to the agreement a sum of RM10,000 is payable to Messrs. Bian Chiang Bank Ltd. by you to the credit of Messrs. Ong Construction Co. and this sum shall constitute as an advance of the loan of RM70,000 to the Penghulu.

As soon as the issue document of title is ready we will prepare a memorandum