A claimant must prove the damages suffered in a claim for unliquidated damages, even if liability is admitted or established; summary judgment may only be awarded on liability while damages must be assessed.

Headnote:(A) Companies Act 1965 - Section 218 - Rules of the High Court 1980 - Application for summary judgment - Court determines the procedure when the claim is for unliquidated general damages and liability established - The court held that the burden of proof lies on the claimant to prove the damages suffered to the requisite standard. (Paras 1, 30, 32-34)

(B) Legal practitioners’ responsibilities - A failure to file an affidavit in reply to a claim may result in an admission of liability; however, damages must still be assessed and proven. (Paras 24-29, 30)

Facts of the case:
The plaintiff, a banking company, engaged the defendants to recover outstanding loans and obtained judgments against the debtor. The plaintiff later sued the defendants for negligence in their legal representation, seeking against them damages arising from the judgments.

Findings of Court:
The claim for damages must be substantiated, and the court rectified the proceedings concerning the assessment of damages.

Issues: Whether a summary judgment can be issued in favor of the claimant for unliquidated damages without the need for assessment.

Ratio Decidendi: The court ruled that it is necessary for the claimant to demonstrate actual damages suffered; summary judgment was warranted on liability but a proper assessment of damages is imperative.

Result: Appeal allowed; case remitted to the High Court for damages assessment.

Judgement Key Points

Key Points: - The claim is for unliquidated general damages; liability established; damages to be assessed. (!) (!) - The court held that summary judgment may be entered on liability but damages must be assessed. (!) (!) - The burden of proof lies on the claimant to prove damages to the requisite standard. (!) (!) - Damages cannot be presumed; must be substantiated with specific proof. (!) (!) (!) - Damages assessment occurred before the Deputy Registrar/High Court judge; damages must be quantified with evidence, not assumed. (!) (!) (!) - The Court of Appeal affirmed that damages must be assessed and rejected a pure summary judgment for the full amount where damages are unascertained. (!) (!) - General principle: damages aim to compensate so as to place the claimant in the position if the wrong had not occurred; burden to prove actual loss. (!) (!)

How to determine when summary judgment can be entered for unliquidated damages where liability is established?

What is the proper approach to assessing damages after a summary judgment on liability?

What are the rights of a claimant to prove damages when liability is admitted or established in the context of an O 14 application?

Table of Content
1. factual background of the case and parties (Para 1 , 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
2. factual background establishing the case (Para 17 , 18 , 19 , 20)
3. court of appeal's finding on the claims (Para 21)
4. court's analysis on summary judgment and burden of proof (Para 22 , 31 , 32 , 33)
5. submissions from both parties on liability and damages (Para 23)
6. arguments concerning liability and damages (Para 24 , 25 , 26 , 27 , 28)
7. ruling on liability and assessment of damages (Para 30 , 34)

[1] This is an appeal against the decision of the Court of Appeal dated 25 October 2011 which allowed the respondent's appeal against the decision of the High Court with costs. This Court had on 17 April 2013 granted the appellants leave to appeal on the following question of law:

"Where, in a case where the claim is for unliquidated damages and/or general damages; and

(i) plaintiff applies to enter summary judgment pursuant to O 14 of the Rules of the High 1980; and

(ii) liability is established or admitted by the defendant; and

(iii) unascertained amount/damages is not a debt which is indisputably due whether the Court should only enter interlocutory judgment with such damages to be assessed?"

[2] In this judgment, the appellants will be referred to collectively as the defendants and the respondent as the plaintiff, as they were in the High Court.

The Facts

[3] The plaintiff is a company duly incorporated in Malaysia under the Companies Act 1965 carrying on the business of a bank with its registered address at 27th Floor, Menara Public Bank, 146 Jalan Ampang, 50450 Kuala Lumpur.

[4] The 1st and 2nd defendants were at all material times advocates and solicitors carrying on their practice in partnership under the name and style of Messrs Mohd Ali & Co.

[5] Sometime in May 1986, the plaintiff appointed the defendants to commence legal proceeding to recover outstanding amounts under the overdraft loan facility, fixed loan and trust receipt facility extended to ODA Holdings (M)Development Corporation Sdn Bhd (ODA) pursuant to the plaintiff 's letters of offer dated 7 January 1985 and 26 February 1985, and against Ong Ah Sim @ Ong Swee Hoe and Abdullah bin Ahmad as guarantors for ODA under a Letter of Guarantee dated 8 March 1985.

[6] Pursuant to the instructions of the plaintiff, the defendants then instituted two legal proceedings against ODA and the Guarantors vide Malacca High Court Civil Suit No: 23-121-1986 ("the 121 suit") and Malacca High Court Civil Suit No: 23-122-1986 ("the 122 suit").

[7] On 10 April 1987, the defendants obtained:

(i) Judgment in default of defence against ODA and the Guarantors in the 121 suit for, inter alia, the sum of RM614,690.07 together with interest at the rate of 16.25% per annum till full payment ("the first judgment"); and

(ii) Judgment in default of defence against ODA and the Guarantors in the 122 suit for, inter alia, the sum of RM248,375.60 together with interest at the rate of 14.5% per annum till full payment ("the second judgment").

(Referred to herein as "the judgments")

[8] Nearly 10 years after the judgments were obtained, ie sometime in March 1998, the plaintiff vide letter dated 6 March 1998 instructed the defendants to enforce the judgments against ODA. The letter also enclosed the statement of account with interest calculated up to 28 February 1998, the material part reads:

"Statement of Account

M/s Oda Holdings (Malaysia) Development Sdn Bhd

Malacca High Court CS No 23-121-1986 - for Overdraft facility

Judgment Sum - 614,690-07

Interest from-1-11-86 to 28-2-98 - 1,134,952-78

Less Payments - 850,452-72

_________

899,190-13

Malacca High Court CS No 23-122-1986 - for Fixed Loan Facility

Judgment Sum - 248,375-60

Interest from1-11-86 to 28-2-98 - 323,970-67

Less Payments - 332,182-08

_________

240,164-19 "

[9] The statement of account showed that the said amount included arrears of interest which had accrued on the judgments more than six years after 1 November 1986 (

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2014 MarsdenLR 1828

FEDERAL COURT PUTRAJAYADATUK MOHD ALI HJ ABDUL MAJID & ANOR – AppellantVersusPUBLIC BANK BERHAD – Respondent[Civil Appeal No: 02(i)-24-05-2013(M)]

A claimant must prove the damages suffered in a claim for unliquidated damages, even if liability is admitted or established; summary judgment may only be awarded on liability while damages must be assessed.

How to determine when summary judgment can be entered for unliquidated damages where liability is established?

What is the proper approach to assessing damages after a summary judgment on liability?

What are the rights of a claimant to prove damages when liability is admitted or established in the context of an O 14 application?

Cases Referred (1)

FEDERAL COURT PUTRAJAYA
DATUK MOHD ALI HJ ABDUL MAJID & ANOR – Appellant
Versus
PUBLIC BANK BERHAD – Respondent
[Civil Appeal No: 02(i)-24-05-2013(M)]