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2023 MarsdenLR 1530
COURT OF APPEAL PUTRAJAYA
MALAYAN BANKING BERHAD – Appellant
Versus
TAN SOEK PHEE & ORS AND ANOTHER APPEAL – Respondent
[Civil Appeal Nos: W-02(NCVC)(W)-2194-10-2018 & W-02(NCVC)(W)-2220-10-2018]
The court established that solicitors' negligence can result in liability for loss of opportunity, requiring proof of actual loss and reasonable prospects of success in the original claim.
Headnote:(A) Professional Negligence - Legal Representation - The Defendants were found professionally negligent for failing to timely file appeal records and prosecute suits, resulting in the Plaintiff's loss of a substantial opportunity to recover debts - The High Court's dismissal of the Plaintiff's claim for loss of chance was overturned, leading to a judgment for RM622,006.00. (Paras 12, 21, 26, 30)
(B) Burden of Proof - In cases of loss of chance, the Plaintiff must demonstrate actual loss and a reasonable prospect of success in the original claim. (Paras 17, 24)
Facts of the case:
The Plaintiff lent money to a company, guaranteed by individuals. Following defaults and negligence by the Defendants in handling the legal recovery, the Plaintiff sought redress for fees paid and damages for lost opportunities. (Paras 5-10)
Findings of Court:
The Court found that the Plaintiff suffered actual loss and had a reasonable prospect of success against the Borrower and Guarantors, reversing the High Court's findings. (Paras 23-30)
Issues: The main issues included whether the Plaintiff suffered actual loss due to the Defendants' negligence and the validity of the High Court's dismissal of the loss of chance claim. (Paras 13, 25)
Ratio Decidendi: The Court ruled that the Plaintiff's opportunity to recover debts was lost due to the Defendants' professional negligence, and the Plaintiff's potential recovery was not negated by the Borrower's insolvency. (Paras 21, 29)
Result: Appeals allowed; judgment for the Plaintiff in the sum of RM622,006.00.
| Table of Content |
|---|
| 1. appeals against high court judgment (Para 1 , 2 , 3) |
| 2. background of loan and legal proceedings (Para 5 , 6 , 7 , 8 , 10) |
| 3. high court findings on negligence (Para 11 , 12 , 13) |
| 4. parties' contentions in appeals (Para 14 , 15 , 16) |
| 5. legal burden of proof in negligence (Para 17 , 19 , 23) |
| 6. court's observations on liability (Para 20 , 21 , 22) |
| 7. damages for loss of opportunity (Para 26 , 27 , 28 , 30) |
Introduction
[1] These are appeals against the trial judgment of the High Court that partially allowed the claim pertaining to solicitor's professional negligence.
[2] The learned High Court Judge on 25 September 2018 adjudged and ordered as follows:
(i) The Defendants are to make payment of the sum of RM127,994.00 to the Plaintiff together with interest on the said amount at 5% per annum from 30 May 2016 until full settlement;
(ii) The Plaintiff's claim for damages for loss of chance is dismissed; and
(iii) No order as to costs.
[3] We have on 10 April 2023 unanimously allowed the Appeal No W-02(NCVC) (W)-2194-10/2018 ("Appeal 2194"). In this regard, we varied the High Court judgment dated 25 September 2018 by allowing and ordering the Defendants to make payment of the Plaintiff's claim for damages for loss of a chance and hence judgment was accordingly entered in the sum of RM622,006.00 to the Plaintiff. However, we dismissed Appeal No W-02(NCVC)(W)-2220 ("Appeal 2220"). There shall be no order as to costs as agreed by the parties.
[4] We now provide the grounds of judgment below and continue to address the parties as Plaintiff and Defendants for convenience.
Background
[5] The Plaintiff gave banking loan facilities to CSPM Technology Sdn Bhd ("Borrower") which have been personally guaranteed by Chin Kwong Wah and Ng Lee Eng ("Guarantors").
[6] By reason of the default of the Borrower and Guarantors in re-paying the loan disbursed by the Plaintiff together with interest accrued, the Appellant instructed the firm Messrs Abd Aziz Chen, Advocates & Solicitors to recover the losses sustained by the Appellant from the Borrower and Guarantors. At all material times, the Defendants are the partners of Messrs Abd Aziz Chen.
[7] Consequently, Messrs Abd Aziz Chen on behalf of the Plaintiff initiated legal proceedings against the Borrower via Kuala Lumpur High Court Suit No D3-22-43-2008 ("Suit 43") and the Guarantors via Penang High Court Suit No 22-121-2002 ("Suit 121"). By reason that Suit 121 was not served upon the Guarantors before the expiration of the writ, Messrs Abd Aziz Chen thereafter re-initiated Penang High Court Suit No 22-162-2004 ("Suit 162") against the Guarantors.
[8] In respect of Suit 162, the suit was dismissed after a full trial. Messrs Abd Aziz Chen appealed to this Court via Civil Appeal No W-02- 2684-10/2011 on behalf of the Plaintiff but the appeal was struck off because of Messrs Abdul Aziz Chen's failure to file the appeal record within the prescribed time. As for Suit 43, the suit was struck off for want of prosecution and Messrs Abd Aziz Chen failed to re-instate the suit within the limitation period.
[9] The Borrower was wound up on 5 November 2015.
[10] As a result, the Plaintiff initiated KL High Court Suit No WA-22NCVC-314-05/2016 ("Suit") against the Defendants premised on professional negligence and claimed the following:
(i) refund of all legal fees amounting to RM127,994.00;
(ii) damages for the loss of a chance/opportunity;
(iii) interest;
(iv) costs on a solicitor and client basis; and
(v) such further and other relief as this Honourable Court deems fit.
In The High Court
[11] After the trial of the Suit, the learned High Court Judge found the Defendants professionally negligent for failure to timeously file the appeal record on the appeal against the trial decision of Suit 43 as well as for failure to prosecute Suit 162 and re-instate the suit within the prescribed limitation period notwithstanding the Plaintiff did not adduce expert evidence on the standard of care of solicitors.
