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2011 MarsdenLR 3476
COURT OF APPEAL (PUTRAJAYA)
ZAINUN ALI, FCJ, SULAIMAN DAUD, J, RAMLY ALI, JJCA
Zulpadli bin Mohammad & Ors – Plaintiff
Versus
Bank Pertanian Malaysia Bhd – Defendant
CIVIL APPEAL NO W-01(IM)(NCVC)-545–09 OF 2011
Malik Imtiaz Sarwar (Zulpadli & Edham) for the appellants.
Navamalar Ganesan (Jasbeer Nur & Lee) for the respondent.
A claim for professional negligence requires proof of duty of care, breach, and injury; failure to establish any element results in dismissal, as established by judicial admissions.
Headnote:(A) Rules of the High Court 1980 - Order 18 Rule 19(1)(a) - Professional negligence - Plaintiff sued the appellants for failing in duty of care regarding land transfer approval, resulting in substantial losses - High Court dismissed the appellants' application to strike out the claim, deeming it not baseless - Court found that the appellants did not breach duty of care; loss arose from third-party fraud, not from the appellants' actions, and judicial admissions by the respondent negated its own case. (Paras 2, 5, 12, 15, 17)
(B) Negligence - Establishing claim - A party must establish duty of care, breach, and consequent injury - If any ingredient is lacking, the claim fails. (Paras 19, 20)
(C) Judicial admissions - Previous admissions by the respondent in related litigation preclude it from asserting contrary positions in the current case. (Paras 23, 26)
Facts of the case:
Appellants, as solicitors, were sued for negligence linked to a land transfer for which no prior estate approval was sought, resulting in a substantial alleged loss due to third-party fraud.
Findings of Court:
The court determined the respondent's claims were unfounded, relying on previous judicial admissions demonstrating adherence to legal practices.
Issues: Whether the appellants failed in their duty of care and if the respondent's claim disclosed a reasonable cause of action.
Ratio Decidendi: The court ruled that the loss was not attributable to appellants' negligence but rather third-party fraud, and the respondent's previous admissions undermined its current claims.
Result: Appeal allowed with costs.
Ramly Ali JCA
(delivering judgment of the court)
The present appeal is against the decision of the learned High Court judge dated 15 August 2011 dismissing the appellant’s application to strike out the respondent’s writ and statement of claim under O 18 r 19(1)(a) of the Rules of the High Court 1980 (‘RHC’).
FACTUAL BACKGROUND
The defendants (‘the appellants herein’) were sued as partners of the legal firm of Messrs Zulpadli & Edham. The respondent herein (as the plaintiff at the court below) instituted an action against the appellants for profesional negligence, inter alia, for failing to obtain the approval of the estate land board and/or failing to exercise reasonable care and skill in regard to the same before presenting the memorandum of transfer (‘Form 14A’) dated 18 March 2008 and the charge form (‘Form 16A’) dated 26 June 2008 in respect of two properties known as Geran 53020, Lot No 886; and Geran 53021, Lot No 887, Mukim Ulu Selangor to the land authority for registration. As a result of which the said charge in the land in favour of the respondent was subsequently revoked and cancelled thereby causing losses of RM19,700,000 to the respondent being the amount released to the vendors of the land.
The appellants (‘as the defendants therein’) have filed their statement of defence and counterclaim against the respondent whereby the appellants have pleaded that the respondent has committed a plot and/or conspiracy to injure the appellants. The appellants have pleaded particulars of the alleged conspiracy to sustain claims for general damages, exemplary and aggravated damages, interest and costs. The respondent then filed its reply and defence to the appellant’s counterclaim. The appellants then filed a reply to the respondent’s defence to counterclaim. Subsequently, by the summons in chambers dated 10 June 2011, the appellants applied to strike out the respondent’s writ and statement of claim under O 18 r 19(1)(a) and/or (b) and/or (d) of the RHC 1980, on the ground that the respondent’s claim does not disclose a reasonable cause of actions, scandalous, frivolous and vexatious and an abuse of the process of the court.
On 15 August 2011, the learned High Court judge dismissed the appellants application on the ground, inter alia, that the respondent’s claim does not appear to be hopeless, baseless or obviously unsustainable or doom to fail. The learned judge also found that the respondent has raised questions and issues in terms of the extent of the appellants’ duty of care as solicitors towards their clients, the respondent, in the preparation of the charge documents and advice relating to the matter in question. The judge also found that the appellants have not discharged the burden of showing that the respondent’s claim or cause of action is obviously bad, scandalous, frivolous or vexatious and is an abuse of the process of the court.
The respondent has on 20 May 2008 granted a credit facility to one Magna Iron Sdn Bhd (‘MISB’) for a sum of RM19,700,000 to finance the purchase of the land in question. As security, the said land was charged to the respondent.
On 20 May 2008, the respondent appointed Messrs Zulpadli & Edham (a partnership constituting the appellants) for the preparation and completion of the said financing documents including the charge documents in favour of the respondent.
The parties had entered into a sale and purchase agreement (‘SPA’) on24 January 2008. The transfer of the land to MISB and the respondent’s charge was registered on 23 June 2008. The respondent then released the financing amount of RM19,700,000 to the vendor of the land, USESB.
Soon afterwards, the original directors/shareholders of USESB (original owners) filed an action at the Kuala Lumpur High Court suing the respondent (in the present appeal), MISB, Pendaftar Hak Milik, Pejabat Tanah dan Galian Negeri Selangor and a third party claiming that the transfer and charge transaction was illegal, null and void and perpetrated fraudulently and th
