Low Hop Bing JCA (delivering judgement of the court)

INTRODUCTION

The two appeals before us are best tabulated as follows:

By consent of the parties herein, these two appeals are heard together.

AGREED FACTS

The first and second defendants (‘the vendors’) were the registered owners of a double storey semi-detached house in Senai, Johor (‘the property’). The property was charged to Delta Finance Berhad (‘Delta Finance’). Vide the SPA, the vendors sold the property to the plaintiff (‘the purchaser’) at a consideration of RM275,000. The completion date was 20 January 1999. The vendors were represented by solicitor Lim Jit Liang, who was then practising as M/s JL Lim & Co (‘the vendors’ solicitor’). The purchaser was represented by the third defendant (‘the purchaser’s solicitor’).

Upon execution of the SPA, through her solicitor, the purchaser paid the deposit sum of RM27,500 to the vendors’ solicitor.

The redemption sum payable to Delta Finance was RM248,748.92, while the balance of the purchase price was RM247,500 (‘the balance purchase price’). The vendors had paid the differential sum of RM1,248.92 to their solicitor.

On 10 December 1998, vide BBMB cheque No 759769, the purchaser paid the balance purchase price to her solicitor. On 14 December 1998, the purchaser’s solicitor paid a sum of RM247,316.49 (after some deductions) vide BBMB cheque No 429422 dated 15 December 1998, made payable to the vendors’ solicitor who had acknowledged receipt thereof on 16 December 1998. The payment was made pursuant to the undertaking by the vendors’ solicitor to redeem the property from Delta Finance.

However, the cheque issued by the vendors’ solicitor for RM248,748.92 towards payment of the redemption sum to Delta Finance was dishonoured. The property was never redeemed. The vendors’ solicitor, who had absconded with the money, could not be located.

To date, the property has not been transferred to the purchaser.

Around July 2000, Delta Finance commenced foreclosure proceedings against the property and obtained an order for sale. The property was subsequently sold by public auction.

On 18 November 2002, the Johor Bahru High Court made the aforesaid orders which are now the subject matters of the two appeals.

RETURN OF RM309,685,51

This is the subject matter in Appeal No 1.

Learned counsel Mr Adi Radlan submitted for the vendors that the learned trial judge had erred in holding that the vendors were vicariouslyliable for the wrongful act of their solicitor who had absconded with the money.

The contention advanced by learned counsel Mr R Jayabalan for the purchaser was that the vendors’ solicitor acting for the vendors in the SPA was their agent when the balance purchase price was forwarded to the vendors’ solicitor and that was as good as having been paid to the vendors themselves, notwithstanding the failure on the part of the vendors’ solicitor to hand over the money to the chargee to redeem the property.

The learned trial judge sustained the purchaser’s contention and held the vendors vicariously liable for their solicitor.

In the light of the decision of the High Court and the respective counsel’s contentions under this head, the questions to be determined are:

(1)On the above agreed facts, is the vendors’ solicitor the agent of the vendors? and

(2)If the answer to question (1) is in the affirmative, are the vendors vicariously liable for their solicitor?

On the capacity of an agent, it is noteworthy that the