A conveyancing solicitor's failure to complete a property transaction due to external vendor issues does not establish professional negligence, especially when the claim is time-barred under limitation laws.

S Nantha Balan JCA:

Introduction

[1] The appellant is an advocate and solicitor. He is a partner in the legal firm of Messrs Azri, Lee Swee Seng & Co ("the firm"). On 9 August 2012, the respondents filed Kuala Lumpur High Court Suit No 22 NCVC-943-08/2012 ("Suit 943") and naming the appellant as the sole defendant. According to the respondents, they intended to purchase a parcel of commercial property in Kuala Lumpur and had engaged the appellant to handle the relevant sale and purchase transaction. The appellant's position is that the respondents had engaged the firm and it was the firm which handled the conveyancing transaction and was responsible/liable for any purported shortcomings/negligence.

[2] Leaving aside the question as to whether the respondents had engaged the appellant or the firm, what is indisputable is that ultimately the sale and purchase transaction did not go through. Indeed, it could not go through. For now, it is important to mention that the intervening events are, first, the winding up of the vendor and secondly, the enforcement of a legal charge over the land, and lastly, the sale of the subject land to a third party at a public auction. The appellant says that he had no control over these events. The respondents disagree. We will come back to this issue in the later part of this judgment. The respondents tried to salvage the transaction by putting in a bid at the auction. However, their bid during the auction was unsuccessful and ultimately they were not able to purchase the land. As such, they claim that they suffered loss and damage. The respondents attribute the loss and damage to the appellant's alleged negligence and mishandling of the conveyancing transaction.

[3] During cross-examination, the 1st respondent said (rather crudely) in reference to the appellant's handling of the sale and purchase transaction that, "He actually screwed up the whole transaction" The respondents therefore sued the appellant for his alleged negligence in respect of the conveyancing transaction.

Suit 943 - The Outcome

[4] In so far as Suit 943 is concerned, on 31 May 2018 the respondents' claim (on liability) was allowed by the learned Judge of the High Court ("the Judge") following the conclusion of a full trial. Thereafter, after undertaking an assessment of damages, the Judge granted damages pursuant to an order dated 23 November 2018.

[5] The Judge allowed damages in the sum of RM300,000.00 being renovation costs and cost of relocation of the respondents' business to a new location. The Judge also awarded interest on the damages at the rate of 5% per annum from the date of the filing of the action until full and final settlement, and costs of RM30,000.00 (subject to allocator).

The Appeals

[6] The appellant was not happy with the outcome on liability and quantum. For their part, the respondents were also not happy with the outcome as the amount that was awarded by the Judge was far less than what they had sought as damages per the Re Amended Statement of Claim.

[7] The appellant appealed via Civil Appeal No W-02(NCVC)(W)-1259-06/2018 ("Appeal No 1259") against the finding of negligence. The respondents appealed via Civil Appeal No W-02(NCVC)(W)-2580-12/2018 ("Appeal No 2580") as to the inadequacy of quantum. The appellant appealed via Civil Appeal No W-02(NCVC)(W)-2603-12/2018 ("Appeal No 2603") against the quantum which was awarded.

[8] On 15 December 2020, we allowed Appeal No 1259 (on liability). Consequently, Appeal No 2580 and Appeal No 2603 were rendered academic and were accordingly dismissed. This judgment explains why we allowed Appeal No 1259. For the sake of convenience and brevity, we shall refer to the parties as per their titles in the High Court. Hence, we shall refer to the appellant as "the defendant" and the respondents as the "plaintiffs".

Background Facts

[9] The 1st plaintiff is Mr Tan Yee Shen. He shall be referred to in the singular as "P1" P1 is also known as "Eason". The reference to Eason in t