Legal fees incurred due to wrongful caveat entry are compensable damages under the Land Code (Sarawak), reinforcing the principle of recovery for actual damages sustained.

JUDGMENT

Lee Heng Cheong JCA:

Introduction

[1] This is an appeal by the appellant/plaintiff against the learned High Court Judge's ("the learned HCJ") decision which made no award for damages and no order for costs after the hearing of the appellant's application for assessment of damages based on wrongful entry of caveats against two pieces of land ("the lands") by the respondent/defendant.

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

The Salient Facts

[3] Pursuant to the order of the High Court made on 12 March 2018, removing the defendant's caveat wrongfully lodged on the plaintiff's lands, the plaintiff filed this originating summons for assessment of damages against the defendant which was conducted by the learned HCJ on 23 August 2018.

[4] During the hearing of the plaintiff's assessment of damages, the plaintiff called only one witness namely Mr Goh Yong Meng (PW1) whereas the defendant elected not to call any witness.

[5] It is undisputed that through Mr Goh Yong Meng's (PW1) evidence, the plaintiff only sought to recover the total legal fees and disbursements of RM70,000 incurred by it and paid to its advocates and solicitors, Messrs Jethi & Associates, Miri as damages against the defendant.

Findings Of The High Court

[6] The learned HCJ dismissed the plaintiff's claim for legal fees and disbursements after the hearing of the assessment of damages on two main grounds namely:

(a) that the costs of RM5,000 was previously awarded to the plaintiff when the defendant's caveat was removed by the High Court on 12 March 2018. The assessment of damages was confined to the assessment of the plaintiff's loss and damages and not the claim for legal fees and disbursements incurred by the plaintiff; and

(b) that the plaintiff had not shown that it had sustained any damages due to wrongful caveat lodged by the defendant. There was no evidence to prove that the plaintiff had sustained any damages due to the loss in the value of the lands in question or any evidence of dealings or intention to deal with the lands which were the subject matter of the defendant's caveat earlier, as such the Court made no award for damages and costs of the proceedings.

The Plaintiff's Contentions Before This Court

[7] The plaintiff contended that based on the unchallenged evidence of PW1, the total sum of RM70,000 has been actually incurred by the plaintiff and duly paid to its advocates, Messrs Jethi & Associates as the legal fees and disbursements for the removal of caveat and assessment of damages' applications and that it is both reasonable and foreseeable to allow the plaintiff's claim for the full reimbursement of the sum of RM70,000 against the defendant.

[8] The sum of RM70,000 has actually been incurred by the plaintiff and it is only fair that the defendant be made to pay what is reasonably foreseeable. Further, the High Court had allowed the claim for legal fees and reimbursement on a solicitor-client basis.

[9] The plaintiff further contended that the sum of RM5,000 was ordered by the High Court when the plaintiff's application for removal of the defendant's caveat was allowed by the High Court on 12 March 2018. This sum must be treated differently from the sum of RM70,000 claimed by the plaintiff on a full indemnity basis because the sum of RM5,000 was awarded as costs following the plaintiff's successful application for removal of the defendant's caveat whereas the sum of RM70,000 is claimed on a solicitor-client basis.

The Defendant's Contentions Before This Court

[10] The defendant contended that there is no evidence to prove that the plaintiff has sustained damage based on an acceptable calculation of loss in value in respect of the lands as a result of the wrongful entry of caveats. Furthermore, upon PW1 being cross-examined by the defendant's counsel, to show the evidence in his witness statement and/or the plaintiff's bundle of documents of actual loss of value or damage for the lands as