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2022 MarsdenLR 1471
HIGH COURT MALAYA JOHOR BAHRU
HONG & FONG – Appellant
Versus
TAN PO LIN & ANOR – Respondent
[Civil Appeal No: JA-12BNCVC-2-01-2021]
The implied solicitor-client relationship and the standard of care in professional negligence require plaintiff proof of negligence and cannot be based solely on the absence of explicit agreement.
Headnote:(A) Evidence Act 1950 – Section 73A(1) – Legal Profession Act 1976 – Standard of care in professional negligence – The plaintiffs claimed against the defendant for negligence in relation to the purchase of encumbered properties, resulting in a payment of RM 261,126.25 to redeem them – Trial court admitted contra notes as evidence. The court distinguished implicit and explicit retainer agreements based on established case law and the conduct between parties – The defendant failed to establish their position regarding the Solicitor-Client relationship and the standard of care – Their evidential burden was inadequately met. (Paras 7, 10-12, 20, 30-39)
Findings of Court:
The court concluded that the defendant acted as solicitor for the plaintiffs and failed to meet the expected standard of care, resulting in the plaintiffs' claim being upheld.
Issues
: Whether the contra notes were admissible and whether the defendant had acted as the plaintiffs' solicitor regarding the Contra Units and met the standard of care.
Ratio Decidendi:
The solicitor-client relationship can arise by implication, and the burden of proof lies on the plaintiff to establish negligence.
Result:
Appeal dismissed with costs.
Introduction
[1] This was an appeal against the decision of the learned Sessions Court Judge ("SCJ") delivered on 21 January 2021, in allowing the respondents' claim against the appellant for, inter alia, a sum of RM 261,126.25. For ease of reference, the appellant and respondents will be referred to respectively as the defendant and plaintiffs.
The Factual Background
[2] The plaintiffs, a married couple, entered into four sale and purchase agreements ("SPAs") for the purchase of four apartment units from one Goodwill Division Sdn Bhd ("Goodwill"). Each plaintiff purchased two units known as Loan Units and Contra Units. The SPAs for the Loan Units were dated March 2013 and March 2016 respectively; whilst the SPAs for the Contra Units were dated June 2013 and March 2016 respectively.
[3] The Loan Units were purchased by the plaintiffs respectively through a bank loan. The Contra Units, however, were a result of an arrangement between the 2nd plaintiff, as the managing director of South Johor Steel Sdn Bhd ("South Johor") and Thong Moi Keong, as the managing director of Goodwill. The Contra Units were offered to the plaintiffs in consideration for supply of steel from South Johor to Goodwill.
[4] The defendant was appointed by Goodwill for all the transactions. The plaintiffs paid legal fees to the defendant for the transactions pertaining to the Loan Units but not for the Contra Units.
[5] In September 2016, vacant possession was granted for the Contra Units, which were then sold by the plaintiffs to third parties. However, it was discovered that the Contra Units were encumbered vide a charge to Sabah Development Bank Berhad ("Sabah Bank"). The plaintiffs had to eventually pay a sum of RM 261,126.25 to redeem the Contra Units from Sabah Bank.
[6] The plaintiffs brought an action against the defendant for professional negligence. The learned SCJ allowed the plaintiffs' claim and as a result thereof, the defendant appealed to this Court ("this Appeal"). This Appeal was dismissed for the following reasons.
Contentions, Evaluation And Findings
Whether The Contra Notes Were Admissible?
[7] At the Sessions Court, the defendant had challenged the contra notes which were relied upon by the plaintiffs to prove their claim. The challenge was mounted on the basis that the contra notes were approved by Thong Moi Keong, who had since passed away
[8] At this juncture, it is important to bear in mind that the learned SCJ had considered s 73A(1) of the Evidence Act 1950 ("Evidence Act"), which deals specifically with documentary evidence in civil cases. The provision reads:
Section 73A- Admissibility of documentary evidence in civil cases, etc.
(1) Notwithstanding anything contained in this Chapter, in any civil proceedings where direct oral evidence of a fact would be admissible, any statement made by a person in a document and tending to establish that fact shall, on production of the original document, be admissible as evidence of that fact if the following conditions are satisfied:
(a) if the maker of the statement either-
(i) had personal knowledge of the matters dealt with by the statement; or
(ii) where the document in question is or forms part of a record purporting to be a continuous record, made the statement (so far as the matters dealt with thereby are not within his personal knowledge) in the performance of a duty to record information supplied to him by a person who had, or might reasonably be supposed to have had, personal knowledge of those matters; and
(b) if the maker of the statement is called as a witness in the proceedings:
Provided that the condition that the maker of the statement shall be called as a witness need not be satisfied if he is dead, or unfit by reason of his bodily or mental condition to attend as a witness, or if he is beyond the seas and it is not reasonably practicable to secure his attendance, or if all reasonable efforts to find him have been made without success.
[Emphasis Added]
[9] Since
