In solicitor negligence claims, establishing the prospect of success in the underlying action is crucial; failure to do so is a misdirection.

Introduction

[1] This is an appeal against the trial judgment of the High Court allowing the claim on solicitor's professional negligence.

[2] The learned High Court Judge ordered payment of RM6,300,000.00, general damages of RM50,000.00, exemplary damages of RM50,000.00 with interest at 5% per annum on the judgment sums from the date of judgment until full settlement and costs of RM20,000.00.

[3] On 23 November 2022, we unanimously allowed the appeal and set aside the order of the High Court with costs of RM30,000.00 here and below subject to allocatur.

Background

[4] The Respondent, a local authority constituted pursuant to the Local Government Act 1976 was embroiled in civil litigation in Kuala Lumpur High Court Case No 22NCVC-1205-1205-12/2011 ("Case") brought by Syarikat Liam Beng Brothers Sdn Bhd ("SLBB") against the Respondent.

[5] The subject matter of the Case is trespass on SLBB's land by the Respondent and three other entities wherein SLBB sought general damages of RM5,455,000.00, special damages of RM202,000.00, exemplary damages of RM1,020,750.00 with an interest of 5% from January 2010 till full settlement and costs of RM20,000.00.

[6] As a result, the Respondent appointed Messrs. Suresh Thanabalasingam, a firm of advocates and solicitors wherein the Appellant was then a partner of the firm to represent and defend the Respondent. The Appellant is the solicitor in charge of the Case.

[7] The Respondent was on 30 September 2014 informed by SLBB's solicitors that SLBB had on 4 July 2014 obtained judgment against the Respondent in respect of the Case.

[8] After conducting a Court file search, the Respondent discovered that SLBB had in fact initially on 31 July 2013 obtained an interlocutory default judgment for non-compliance with the High Court's Unless Order dated 29 April 2013 to file a list of witnesses and witness statements for purposes of trial. The Appellant did not attend Court proceedings on 31 July 2013.

[9] As a result, SLBB proceeded to have its damages suffered assessed before the Deputy Registrar of the High Court on 4 July 2014 in which the Appellant also did not attend the Court proceedings. Hence, SLBB accordingly obtained final judgment against the Respondent.

[10] The Respondent subsequently on 20 November 2014 and 17 March 2015 paid SLBB as ordered in the final judgment.

[11] As a result, the Respondent commenced Kuala Lumpur High Court Suit No BA-21NCVC-46-06/2016 ("Suit") against the Appellant.

In The High Court

[12] The Respondent in the Suit contended that the Appellant is negligent in its conduct of duties as the Respondent's solicitor particularly in not complying with the Unless Order issued by the High Court. This is indisputable according to the Respondent.

[13] However, the Appellant rebutted that its appointment by the Respondent to take conduct of the case is on a pro-bono basis because the Respondent was aware that the Respondent has no defence against SLBB in the case. There is also no formal letter of appointment of the Appellant by the Respondent. That notwithstanding, the Respondent never relied on the Appellant's advice because the Appellant dealt with the Respondent's legal department at all material times. There was close liaison and updating of the Respondent's legal department by the Appellant. It was made clear that the Respondent did not intend to call witnesses in defence of the case. As to his failure to attend the High Court hearing on 31 July 2013, the Appellant stated that Messrs. Suresh Thanabalasingam was not notified of that new date.

[14] Be that as it may, the Appellant also contended that the Respondent entered into a joint venture with a de