Partners in a law firm can be held vicariously liable for the wrongful acts of another partner committed in the ordinary course of business, reinforcing fiduciary duty principles.

Azmi Ariffin JCA:

Introduction

[1] Appeal 2062 - Enclosure 133 dated 28 October 2022 is an appeal filed by the 1st to 4th / Appellants / Defendants against the decision of the Penang High Court (after a full trial) delivered on 30 September 2022 which found the 1st to 3rd Appellants jointly and severally liable together with the 4th Appellant to the Respondent/ Plaintiff in respect of two Sale & Purchase Agreements, prepared by the 4th Appellant as the Solicitor and entered into by the 1st to 3rd Appellants as Vendors and the Respondent as Purchaser to purchase two lots of land (known as Lots 429 and 430). The Court also held the 4th Appellant liable for breach of fiduciary duty towards the Respondent (who was the firm's client in a conveyancing transaction) as the Respondent's Solicitor for the sale and purchase of the two lands. The Court also ordered that the 1st-4th Appellant to return the deposit of RM119,944.74 to the Respondent.

[2] Appeal 2063 - Enclosure 134 dated 28 October 2022 is an appeal filed by the Appellant / Plaintiff against part of the decision of the Penang High Court (after a full trial) delivered on 30 September 2022 which found the 9th Respondent is not vicariously liable, jointly and severally liable with the 4th Defendant (in the High Court ) despite having found the 4th Defendant (Roshidah Binti Osman) liable to the Appellant / Plaintiff. The 4th Defendant was ordered to pay damages of RM976,062.39 damages, a cost of RM50,000.00.

[3] These two (2) appeals are related. Hence, to facilitate the determination of these appeals, we find it more convenient to decide these 2 appeals in a single judgment as they are interrelated.

[4] For ease of reference, parties will be referred to as they were in the High Court .

Brief Backgrounds Facts

[5] The Plaintiff, a company, had, on or about the month of June 2012, appointed the firm of Messrs Roshidah & Faziah (hereinafter referred to as "the Firm") to act for them in a sale & purchase agreement to purchase two (2) plots of land (hereinafter referred to as "Lots 429 and 430") from the 1st to 3rd Defendants in their capacity as administrators of the estate of three (3) deceased persons, namely:

(i) The 1st Defendant, Yeop Bin Darus as the Administrator of the Estate of Hussain Nachain Bt Kader Peechay;

(ii) The 2nd Defendant, Ja'afar Bin Mat as the Administrator of the Estate of Shawtamah Bee Bt Kader Peechay; and

(iii) The 3rd Defendant, Shafie Bin Mat as the Administrator of The Estate of Mariam Bee Bt Kader Peechay.

[6] The 4th Defendant was the Solicitor who prepared the two Sale & Purchase Agreements to purchase Lots 429 and 430. It is to be noted that apart from acting for the Plaintiff as the Purchaser, the 4th Defendant also acted for the 1st to 3rd Defendants as the Vendors in both the said S&P transactions.

[7] The Plaintiff agreed to purchase the said Properties for a sum of RM588,060.00 for Lot 429 and RM611,387.40 for Lots 430 respectively. Both parties entered into two (2) Sale and Purchase Agreement on 16 October 2012 ("the SPAs") prepared by the Fourth Defendant as solicitors for the First to Third Defendants. The Plaintiff paid the 10% deposits for the respective purchase for a sum of RM58,806.00 and RM61,138.74 respectively.

[8] The Plaintiff had only paid the 1st 10% as deposit for both Lots amounting to RM119,994.74. The second tranche of 10% was yet to be paid as the Plaintiff was waiting for the vendors (1st to 3rd Defendants) to comply with the condition stipulated in the SPAs before the payment of the second tranche of 10% of the purchase price becomes due.

[9] However, both Lot 429 and Lot 430 had been sold off to other parties.

[10] The Plaintiff then commenced Civil Suit No: 22NCVC-22-02/2014 against the following groups of persons:

(a) The Vendors

The Plaintiff named the three Vendors as the 1st, 2nd and 3rd Defendants, claiming for specific performance of the SPAs dated and alternatively, for damages in lieu of specific performance if