Solicitors owe a continuous duty of care and liability extends to all partners in a firm for contract and negligence claims against clients, affirming the need for diligence in protecting client interests.

Raja Ahmad Mohzanuddin Shah J:

Preliminary

[1] "Law is order, and good law is good order."— Aristotle.

[2] In light of the above quote, the law is the most fundamental foundation of society, without which no society can function. As one aspect of achieving this, clients always need solicitors to protect and defend their interests, whether it is for their organisations or personal matters. Ultimately, one cannot exist without the other.

[3] The dispute before me arises from the above rationale. It emerges from an earlier relationship between the plaintiff as a financial institution ("hereinafter called the Bank") and the defendants ("hereinafter called the Solicitors/Legal Firm") who were partners in a law firm retained by the Bank to represent it and once served on the Bank's panel of lawyers.

[4] There are now allegations by the Bank that the Solicitors breached their contract and/or professional duties to it as well as negligently failed to protect the Bank's interests, which was the very purpose for which the Bank appointed the Legal Firm.

[5] To that end, the Bank seeks the following relief against the solicitors in this action:

(a) damages in the sum of RM526,383.09;

(b) damages to be assessed by the court;

(c) interest on the damages awarded at 5% per annum from 4 April 2018 or from the date of the writ herein or the date of judgment or such date as the court deems fit until the date of full settlement;

(d) general damages; and

(e) costs.

[6] As expected, the Solicitors vigorously resisted these allegations.

An Overview Of The Facts Of The Case

[7] As for the facts of the case, I must admit that they are not rather straightforward facts that led to the allegations by the Bank. Nevertheless, the parties' conduct in preparing the agreed facts is exemplary. In this regard, both parties have agreed on extensive facts during the Pre-Trial Case Management process.

[8] The following facts, on which I am heavily relying in making my decision, are reproduced with their agreement.

[9] The Bank is a licensed banking institution incorporated in Malaysia under the Financial Services Act 2013 .

[10] The Solicitors were at all material times partners at the firm of advocates and solicitors known as Messrs Lua & Mansor with offices in Petaling Jaya, Selangor and Kota Bharu, Kelantan.

[11] In 1996, the Bank granted Sparrows & Arrows Sdn Bhd ("Sparrows") a term loan facility of RM1,200,000.00 (the "Facility") evidenced by inter alia, the following:

(a) the Bank's letter of offer dated 17 October 1996; and

(b) a Loan Agreement cum Assignment dated 23 April 1997 both of which were prepared by the firm of advocates and solicitors known as Messrs Kassim Tadin Wai & Co.

[12] The Facility was secured by inter alia, the following:

(a) a joint and several guarantee by Chew Nee Hee ("CNH") and Ling Yun Yoke ("LYY") (the "Guarantors"); and

(b) an assignment over the property known as Unit No B-05-G, Ground Floor, Block B, Megan Avenue II held under strata title registered as Geran 37731/M1-B/1/64, Lot No 144, s 44, Daerah Kuala Lumpur, Bandar Kuala Lumpur (the "Megan Property").

[13] On 7 April 2003, the strata title to the Megan Property was issued and registered in the name of AAB Avenue Sdn Bhd, the developer of the Megan Property (the "Developer").

[14] Sparrows defaulted in its obligations under the Facility.

[15] On 16 February 2006, the Bank instructed the Legal Firm to:

(a) file action against Sparrows and the Guarantors to recover the sums due under the Facility; and

(b) "KIV"the foreclosure proceedings on the Megan Property as the Bank was "in the midst of perfecting