Back
2022 MarsdenLR 532
COURT OF APPEAL PUTRAJAYA
TECHREW SDN BHD – Appellant
Versus
NURHAMIZAH HAMZAH & ORS – Respondent
[Civil Appeal No: J-02(NCVC)(W)-712-06-2020]
Solicitors owe a dual duty of care in professional negligence; effective communication and diligence in managing client affairs are critical, failure of which can lead to liability.
Headnote:(A) Evidence Act 1950 – Professional negligence of solicitors – The appellant claimed RM5.85 million from the respondents for negligence resulting in a struck-out appeal – The learned Judicial Commissioner found the 1st respondent liable for communication failures but awarded nominal damages of RM50,000 due to inability to prove loss – The 2nd and 3rd respondents' claims were dismissed for lack of negligence in not attending to appeal proceedings, with the appellant later wishing for a higher claim contingent on a previous settlement agreement for RM2.85 million with MAB. (Paras 5, 15, 35, 64)
(B) Negligence – Duty of care – The court established that solicitors owe a dual duty in contract and tort, especially in professional negligence cases where a breach of standard of care was highlighted and the standard was not met by the respondents, creating liability. (Paras 42, 44)
Facts of the case: The appellant engaged various legal counsel for defense in a suit where RM5.85 million was awarded against them. Failing to appeal properly led to communication lapses attributed to negligence by the 1st respondent and a lack of action from the 2nd and 3rd respondents. (Paras 4-6, 19)
Findings of Court: The court held that the 1st respondent did not communicate effectively which led to the struck-out appeal, while the 2nd and 3rd respondents failed to uphold their duty of care towards the appellant. (Paras 29-32)
Issues: The primary issues revolved around the liability of solicitors in negligence and whether the appellant had indeed suffered a tangible loss due to their inaction. (Paras 34-37)
Ratio Decidendi: The court reiterated the need for solicitors to maintain clear communication and diligently attend to client proceedings to avoid liability in negligence cases. (Paras 30, 41)
Result: The appeal was allowed, reversing the lower court’s decision, awarding RM2.85 million in damages against all respondents and ordering costs. (Paras 64)
JUDGMENT
Introduction
[1] This is an appeal by the appellant against the decision of the learned Judicial Commissioner ("Learned JC"), in respect of the followings:
(i) Dissatisfied with the nominal damages awarded against the 1st respondent; and
(ii) Dismissing the appellant's claim against the 2nd and 3rd respondent. Whilst the 1st respondent by way of cross-appeal seeking leave to vary the learned JC's decision that she had to bear costs of the 2nd and 3rd respondents.
[2] We heard the appeal and after giving our most anxious and meticulous consideration on the submissions from the appellant's counsel as well as the counsel for the respondents and after careful perusal of the Record of Appeal, we are satisfied that there are merits in the appeal warranting appellate intervention. Hence, we unanimously allowed the appeal. The following are our grounds in arriving at the decision.
Background Facts
[3] The appellant is a company incorporated in Malaysia. The 1st respondentis an advocate & solicitor of the High Court of Malaya, practising as a soleproprietor. The 2nd and 3rd respondents, are also advocates and solicitors, who were partners of a legal firm, named in the title of the action.
[4] The appellant's claim in the Court below, against the respondents, is, for, inter alia, damages in the amount of RM5.85 million for professional negligence inthe handling of the legal proceedings between Miracle Assets Builder Sdn Bhd("MAB") and the appellant ("MAB suit").
[5] In the MAB Suit, MAB was the main contractor in a construction project. Ithad appointed the appellant as one of the sub-contractors. MAB had institutedan action against the appellant in December, 2017 for liquidated ascertaineddamages in the amount of RM5.85 million for late completion of the works ("LAD"). At the material time, the solicitors for MAB were the firm of Messrs Clarence Edwin Law Offices, of which Datuk Clarence Edwin ("PW2") and Mr Paramanandan ("Mr Param") are the partners.
[6] The appellant appointed the 1st respondent to defend the MAB suit, and she accordingly entered an appearance and filed the defence. However, on 17 April 2018, MAB was successful in its application to strike out the appellant's defence on the ground that it is a mere denial and did not disclose a reasonable defence. As a result, the judgment in the sum of RM5.85 million was entered against the appellant.
[7] The appellant then lodged an appeal on 30 April 2018. A notice dated 8 May 2018 was sent by the Court of Appeal to the 1st respondent, informing her that she had to file the Record of Appeal within 90 days of the decision which was being appealed against. The appeal was fixed for case management on 18 July 2018.
[8] Meanwhile, the appellant terminated the services of the 1st respondent via a letter dated 2 June 2018 [Exhibited at p 57 of the Common Bundle of Documents ("CBD")] and requested her to immediately forward all the documents to the 2nd and 3rd respondent's law firm, whom it claimed to have appointed as its new solicitors.
[9] On 6 June 2018, after the appellant had appointed the 2nd and 3rd Respondent's law firm as its solicitors under a Warrant to Act (Exhibited at p 50 of the CBD), the law firm sent to the 1st respondent, letters dated 6 June 2018 (Exhibited at p 64 of the CBD) and 12 June 2018 (Exhibited at p 13 of the Respondents' Additional Bundle of Document, regarding the taking over of the conduct of the matter, to which there was no response whatsoever. However, no Notice of Change of Solicitors was filed in the Court of Appeal, and as such, the 1st respondent remained on record as the appellant's solicitor.
[10] Nevertheless, on 18 July 2018, the 2nd respondent appeared before the Deputy Registrar of the Court of Appeal for case management. Since the date for filing of the Record of Appeal had already lapsed, the Deputy Registrar of the Court of Appeal gave the appellant until 27 July 2018 to file a Notice of Motion for extension of time to file
