Gopal Sri Ram FCJ (delivering judgment of the court)

We refused leave to appeal in this case because the questions that lie at the heart of this matter are really questions of fact. However, there is a point of practice relevant to the conveyancing Bar on which the views of this court may be of assistance. It is for that reason that this judgment is produced, despite the general policy of this court not to give reasons when granting or refusing leave.

The applicant is the purchaser of a piece of property in Johor of which the first and second defendants in the proceedings before the High Court were the vendors. The instant respondent acted as the applicant’s solicitor in the transaction. At the material time, the subject property was charged to Delta Finance Bhd and a sum of RM248,748.92 remained due and payable by the vendors to Delta Finance. Under the terms of the agreement, the vendors were to deliver to the applicant a valid and registrable title free of incumbrances. The only incumbrance in the contemplation of the parties was the charge in favour of Delta Finance. The applicant paid the vendors the deposit stipulated in the agreement. Later, the respondent solicitor released the balance of the purchase price to the vendors’ solicitor. In so doing she acted in accordance with the arrangement between the parties and upon the vendors’ solicitor’s undertaking to utilise the balance of the purchase price to redeem the subject property from Delta Finance. As it happened, the vendors’ solicitor misappropriated the monies and presented a cheque to Delta Finance which was dishonoured. The applicant then brought an action, inter alia, against the respondent for negligence, the substance of the charge being that the respondent ought to have reasonably foreseen that the vendors’ solicitor may misappropriate the balance of the purchase price. She ought not therefore to have made the cheque out in favour of the defalcating solicitor. In the High Court, there was no controversy that the respondent did owe the applicant a duty of care to ensure that the applicant’s interests in the transaction in question were sufficiently protected. What was asserted by the instant respondent was that she had, in all the circumstances of the case, acted with reasonable care. After a careful consideration of the evidence the learned trial judge found for the respondent. Dissatisfied, the applicant appealed to the Court of Appeal.

In support of her case in both courts below, the applicant placed much reliance onEdward Wong Finance Co Ltd v Johnson Stokes & Master [1984] 1 AC 2962009] 4 MLJ 183; [2009] 3 CLJ 751) said this of that case:

[33]Edward Wong Finance Co Ltd v Johnson Stokes & Master (a firm) [1984] 1 AC 296

[34]The provisions of cll 2, 4 and 15 which fall to be considered herein, are not within the purview of consideration by the Privy Council. These contractual provisions are crucial for consideration by this court, especially in relation to the issues of negligence or breach of contractual duty or both. Further, the purchaser herein had already obtained judgment against the vendors. In the circumstances, with the utmost respect, the factual matrix in Edward Wong Finance Co Ltd , is readily distinguishable from the facts before this court.

[35]In Malaysia, as alluded to above, where a solicitor accepted a sum of money in the capacity of the solicitor for his client, so as to utilise it to redeem the property, but had instead absconded with it, the client was ordered to bear the loss: per Wan Hamzah J (later SCJ) in Kuldip Singh & Anor .

[36]The contractual duty of the purchaser’s solicitor is to be found in cll 2, 4 and 15 of the SPA. Clause 15 has been referred to and considered earlier in this judgment.

[38]Read conjunctively, cll 2, 4 and 15 do not impose any contractual obligation or duty on the purchaser’s solicitor to effect payment of the balance purchase price to the chargee directly. It is abundantly clear that the payment of the balance purc