Arifin Zakaria JCA (delivering judgment of the court):

BACKGROUND

[1]This is an appeal by the first and second appellants (the third and fourth defendants in the court below) against the decision of the learned High Court judge in allowing the plaintiff's claim. We dismissed the appeal, but we reduced the award of damages from RM208,587 to RM172,673. We now give our reasons for our decision.

THE UNDISPUTED FACTS

[2]By a sale and purchase agreement dated the 6 September 1985 ('the SPA'), the respondent/plaintiff agreed to purchase from the first defendant the property referred to as Ground Floor, Lot A, Wisma Shing Yin ('the subject property') at the agreed price of RM170,000. The subject property is erected on the land comprised in the land title known as Country Lease No 215328055 ('the said land'). At the time of the sale transaction, no subsidiary title had been issued in respect of the subject property.

[3]The respondent came to know about the subject property through an advertisement put up by the first defendant in a local newspaper. To finance the purchase, the respondent obtained a loan of RM102,000 from S Y Jie Credit Sdn Bhd ('the credit company'). A loan agreement was entered into on the 6 September 1985 between the respondent and the credit company. The SPA and loan agreement together with the memorandum of charge in escrow were prepared by and executed in the office of thesecond appellant legal firm. The legal fee in respect of the same and stamp duty, amounting to RM2,673 were paid by the respondent to the second appellant. The respondent was given possession of the subject property on the date of the execution of the SPA.

[4]The first appellant was at all material times a registered shareholder (having 204000 shares), director and company secretary of the first defendant. He was also the company secretary of the credit company. The said land was charged to Sabah Bank Berhad under six memoranda of charges which were duly registered with the Land Office on various dates, both before and after the execution of the SPA. Thesaid land, including the subject property, was subsequently foreclosed by Sabah Bank Berhad on 28 May 1993 and was sold to one Datin Rupiah bte Bachee Khan.

[5]The respondent brought this action claiming against the four defendants jointly and severally the sum of RM208,587 (which includes the purchase price and other expenses), damages, statutory interest and costs. The action against the first and second defendants was not proceeded with as the first defendant company had since been deregistered while the second defendant had passed away. At end of the hearing, the learned judge allowed the respondent's claim with interest and costs against the first and second appellants.

THE CASE AGAINST THE FIRST APPELLANT

The respondent claims that he was induced into purchasing the subject property on the representation contained in cl 9 of the SPA which provides:

Warranty of Good Title

9. The Developer hereby warrant that they have a good title to the said unit and that it is free from any trust, caveat, pending action, adverse possession and any other liabilities binding the same and hereby undertake to indemnify the Purchaser the fullest extent of any loss in the event of any breach of the warranty hereby given.

[6]The claim against the first appellant is founded in tort for alleged fraudulent misrepresentation and/or conspiracy with the second defendant to defraud or deceive the respondent. This is contained in para 19 of the further amended statement of claim. In para 6 of the same, the respondent asserts that acting on the faith and truth of the said representations and warranties the respondent made and completed the SPA and paid the full purchase price of the subject property to the first defendant.

THE DEFENCE OF THE FIRST APPELLANT

[7]The first appellant resisted the claim on the ground that as director of the first defendant, a limited company, he is not legally liable either in tort or contract for the act o