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2011 MarsdenLR 3750
HASNAH MOHAMMED HASHIM
HSBC BANK MALAYSIA BHD – Appellant
Versus
HONG LEONG BANK; KUEK LEE NA & ORS (THIRD PARTY) & SOH YOK LAM & ORS (FOURTH THIRD PARTIES) – Respondent
Solicitors owe a duty of care primarily to their clients, not to third parties, and claims against them are subject to limitation periods, which can render them time-barred.
Headnote:(A) Rules of the High Court 1980, Order 18 Rule 19(1)(a)-(d) - Application to strike out Third Party Notice as having no reasonable cause of action and being time barred - Court noted that it is only in plain and obvious cases that an action can be dismissed summarily. (Paras 4-7)
(B) Duty of Care - Solicitors owe a duty of care to their clients but not to third parties - Court stated solicitors may be liable for negligence but only if the duty of care exists; in this case, no client-solicitor relationship was established between the 4th Third Parties and the 1st Third Party. (Paras 18-19)
(C) Limitation Period - The 1st Third Party's claim against the 4th Third Parties was found to be time barred as the claim accrued when the redemption sum was released prior to the issuance of the Third Party Notice. (Paras 20-21)
Facts of the case:
The claim involved damages due to alleged negligence concerning advice on land restrictions related to a loan transaction. The notice against the 4th Third Parties was struck out.
Findings of Court:
The application to strike out was granted as there was no reasonable cause of action, and the claims were time barred.
Issues: Whether the 4th Third Parties owed a duty of care to the 1st Third Party and whether the claim was time barred.
Ratio Decidendi: The court reaffirmed that solicitors owe duties primarily to their clients and not to third parties, and emphasized the importance of establishing a solicitor-client relationship for negligence claims.
Result: Application to strike out allowed.
| Table of Content |
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| 1. claim for damages due to negligence (Para 1 , 2) |
This application vide a Summons in Chambers in Enclosure 53 by the 4th, 5th and 6th of the 4th Third Parties/Applicant for an order under Order 18 Rule 19(1)(a), or (b) or (c) or (d) of the Rules of the High Court 1980 to strike out the Third Party Notice dated 15.1.2009 filed by the 1st Third Party against the 4th Third Parties on the grounds that the 1st Third Party has no reasonable cause of action and that the cause of action is time barred.
The application is supported by Affidavit affirmed by Tay Khim Seng 2.11.2010. The Affidavit in reply affirmed by Kuek Le Na on 13.4.2011.
Facts of the Case
The Third Partys claim against the 4th Third Parties is for damages allegedly suffered as a result of alleged negligence by the 4th Third Parties for failing to advise the 1st Third Party of the restriction of interest placed on the land known as HS (D) 38334 TLO 1845 Township Bandar Maharani, District of Muar, State of Johor together with a double storey bungalow with an address at No. 22, Jalan Timbalan, 84000 Muar, Johor erected thereon (the said Land). Further the Third Party contends that the 4th Third Parties had negligently advised the Plaintiff to disburse the loan to the Defendant for the purposes of refinancing the purchase of the said land by the 1st Third Party.
The presentation of the charge over the said Land in favour of the Plaintiff and the discharge of an earlier discharge in favour of the Defendant, both executed by the Third Party for registration were rejected by the Johor Land Office. The Plaintiff then initiated the claim against the Defendant for the recovery of the loan sum released to the Defendant. The Defendant then filed a Third Party Notice against the 1st Third Party who then filed the Third Party Notice against the 4th Third Party.
The 1st Third Party had purchased the said Land from one Muslim bin Yaser and Joeriah binti Mohamed (the Vendors). Messer Soh Yok Lam acted for the 1st Third Party in the sale and purchase transaction and Messers Hazelin & Associates acted for the Vendors.
The said Land was financed by a loan granted by the Defendant to the 1st Third Party (the Hong Leong Loan) and secured by a charge executed in favour of the Defendant over the said Land. Messer Hazelin & Associates acted for the Defendant in respect of the Loan documentation to secure the Hong Leong Loan.
The Law
It is only in plain and obvious cases that the Court will dismiss an action summarily. In the case of Lee Nyan Choi v. Voon Noon Lee Hun Hoe CJ (Borneo) at page 29 observed that:
"The power to dismiss an action summarily without permitting a party to trial is a drastic power and should be exercised with utmost caution. The power of summary procedure should only be resorted to on plain and obvious cases.".
The Federal Court in Roslan bin Abdullah v. New Zealand Co, Ltd. and in Golden Century Development Sdn. Bhd. v. Ganhoe & Anor (1982) CLJ 106 (Rep); (1982) CLJ 536; referred to the English case, AG of Duchy of Lancaster v. L& NW Railway Co. (1892) 3 Ch 274 and observed that summary procedure:
"... can only be adopted when it can clearly be seen that a claim or answer is on the face of it obviously unsustainable..."
The principle relating to O. 18 r. 19 (1) RHC was considered in Bandar Builder Sdn. Bhd. v. United Malayan Banking Corporation Bhd. (1993) 4 CLJ 7 ; (1993) 3 MLJ 36 , Mohamad Dzaiddin SCJ (as he then was) said at pg 43 that:
"It is only in plain and obvious cases that recourse should be had to summary process under this rule (per Lindley MR in Hubbuck & Sons ltd v. Wilkinson, Heywood & Clark Ltd.) and this summary procedure can only be adopted when it can be clearly seen that a claim or answer can only be adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable."
His Lordship goes on to say that such process:
"... cannot be exercised by a minute examination of the docum
