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2013 MarsdenLR 2458
HIGH COURT MALAYA KUALA LUMPUR
TENAGA NASIONAL BERHAD – Appellant
Versus
TETUAN ARIFF & CO – Respondent
[Civil Suit No: 22NCVC-1162-10-2012]
Solicitors owe a duty of care to clients and failing to act timely can result in loss of legal rights, establishing professional negligence.
Headnote:(A) Electricity Supply Act 1990 - Limitation Act 1953 - Claim for undercharges against consumer - Defendant, a firm of solicitors, was retained to pursue action against consumer for undercharged amount of RM589,668.80 - Action struck out as statute-barred. (Paras 7, 11, 12, 32, 34)
(B) Professional Negligence - Duty of care - Solicitors have a duty to act with reasonable care and skill; failure to advise client on limitation risks is negligent. (Paras 9, 11)
Facts of the case:
Plaintiff, a utility company, sought to recover undercharged electricity fees from consumer but failed to file a suit in time due to defendant's negligence, leading to action being statute-barred. (Paras 1-6)
Findings of Court:
The defendant breached its duty of care by failing to file the claim against the consumer within the limitation period, resulting in damages that are unrecoverable. (Paras 12, 32)
Issues: Whether the plaintiff's claim was statute-barred and if the defendant acted negligently by delaying the filing of the action. (Paras 7, 8, 22)
Ratio Decidendi: The court held that the solicitors' inexcusable delay in filing the action led to the loss of the plaintiff's valuable right to recover the undercharge, establishing liability for professional negligence. (Paras 11, 12, 32)
Result: Plaintiff entitled to nominal damages of RM1,000.00 and costs of RM20,000.00.
| Table of Content |
|---|
| 1. overview of the contractual relationship and claim process. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. professional negligence and duty of care of solicitors. (Para 9 , 10 , 11) |
| 3. breach of duty and evidence of delay by the defendant. (Para 12 , 14 , 16) |
| 4. court's findings on solicitor's breach of duty (Para 13 , 15) |
| 5. establishing recoverable damages in negligence cases. (Para 18) |
[1] The plaintiff is a utility company licensed under the Electricity Supply Act 1990 to supply electricity to the public. The defendant is and was at the material time a firm of advocates and solicitors.
[2] The plaintiffs customer, one EPE Wilson Transformer Sdn Bhd ("EPE"), had by letter dated 3 July 2002 (p 1 of DCB) written to the plaintiff requesting for a reduction in the amount of the bank guarantee furnished as security for payment for power supplied to its premises at Nilai, Negeri Sembilan. Subsequent thereto, as a routine measure, the plaintiffs officers went to EPEs premises on 8 July 2002 and conducted an inspection on the power consumption meter installed thereat. The plaintiff discovered that the meter was faulty and there was an error in the meter reading, which showed a recorded shortage of 66.66% as against EPEs actual usage of electricity. The plaintiffs inspection form confirming this is found at p 2 Bundle A.
[3] The plaintiff then decided that it had to claim for arrears in the undercharged amount from EPE. The plaintiff did a calculation of the correct charges for the period from January 1999 until July 2002 and the shortfall came to RM589,668.80. At a meeting held on 16 January 2003, the plaintiffs District Manager Puan Azlina Bte Abd Rahman (PW3) had explained the aforesaid matter to EPEs representative and a letter of demand dated 16 January 2003 ("LOD") was served on EPE demanding payment of the undercharged amount of RM589,668.80 (see pp 3-5 of Bundle A).
[4] On or about 10 July 2003, the plaintiff had another meeting with EPE, and subsequent thereto, EPE wrote to the plaintiff via letter dated 5 April 2004 appealing for a reduction of the shortfall amount claimed. However, the plaintiff did not reply to that appeal.
[5] The plaintiff then by letter of 17 April 2006 (p 8 Bundle A) instructed and retained the defendant as its solicitors to institute legal proceedings against EPE to recover the shortfall amount. The retainer was accepted by the defendant vide its letter dated 19 April 2006 (pp 9-10 of Bundle A). The defendant took instructions and began drafting the statement of claim. In the interim, vide letter dated 30 November 2006 (p 14 of Bundle A), the plaintiff instructed the defendant to suspend legal proceedings against EPE as the plaintiff was considering an out of court settlement. The plaintiff subsequently vide letter dated 12 Novemebr 2007 (p 15 of Bundle A) instructed the defendant to proceed to file the action against EPE as a settlement could not be reached.
[6] However, only on or about 18 March 2010, did the defendant as solicitors for the plaintiff, file the action against EPE in the Kuala Lumpur High court vide Suit No 22NCC-513-2010 ("the suit") demanding payment of the shortfall sum together with interest and cost.
[7] As events would turn out, upon application by EPE, the suit was struck out by the High court on 2 December 2010 on the grounds that the action was statute barred pursuant to under s 6(1) of the Limitation Act 1953 as the same had not been filed within six years of the issuance of the LOD on 16 January 2003. The High Courts Grounds of Judgment is found at pp 61-67 of Bundle A. The court of Appeal on 9 May 2011 affirmed the High Courts decision and the plaintiffs application for leave to further appeal to the Federal court was denied on 2 August 2011. The orders of the court of Appeal and Federal court are found at pp 78-79 and 121-122 of Bundle A, respectively.
[8] Following the striking out of the suit, the plaintiff instituted this action against the defendant for negligence,
