Quek Wan Hong

v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 1

QUEK WAN HONG

v.
ZULKIFLI ZABIDIN & ORS; TOK HOON KIANG & ORS
(THIRD PARTIES)

High Court Malaya, Georgetown

Lim Chong Fong JC
[Civil Suit No: 22NCVC-835-12/2012]
30 August 2016

Case(s) referred to:

Aik Ming Sdn Bhd & Ors v. Chang Ching Chuen & Ors & Another Appeal [1995]
1 MLRA 546; [1995] 2 MLJ 770; [1995] 3 CLJ 639; [1995] 3 AMR 2375 (refd)
Anthony Ting Chio Pang v. Wong Bing Seng [1997] 2 MLRH 720; [1997] 2 CLJ
831 (refd)
Leong Sing v. Perusahaan Kuari (Melaka Pindah) Sdn Bhd & Another Case
[1996] 3 MLRH 140; [1997] 5 MLJ 657; [1997] 1 CLJ 307 (refd)
Maelstrom Resources Sdn Bhd & Anor v. Shearn Delamore & Co & Another Case
[2006] 3 MLRH 560; [2007] 1 CLJ 50 (refd)
Mayland Lending Sdn Bhd v. Rossmaizati Mohamad & Anor [2014] 6 MLRH
395; [2015] 7 MLJ 216; [2014] 4 AMR 436 (refd)
Ngan Siong Hing v. RHB Bank Bhd [2014] 2 MLRA 528; [2014] 2 MLJ 449;
[2014] 3 CLJ 984 (refd)
Tan Suan Sim v. Chang Fook Shen [1980] 1 MLRA 638; [1980] 1 MLJ 66 (refd)
Toh Theam Hock v. Kemajuan Perwira Management Corporation Sdn Bhd [1987]
1 MLRA 166; [1988] 1 MLJ 116; [1987] CLJ Rep 400 (refd)
Yong & Co v. Wee Hood Teck Development Corporation [1984] 1 MLRA 165;
[1984] 2 MLJ 39; [1984] 1 CLJ 251 (refd)

Legislation referred to:

Evidence Act 1950, ss 101, 102, 103
Partnership Act 1961, ss 7, 11, 12, 13, 14, 16, 19(2), 38(1)

Other(s) referred to:

Jackson & Powell, Professional Negligence, 5th edn

Counsel:
For the plaintiff: Tan Bak Lee (Amirah Abdullah with him); M/s Tan Bak Lee &
Co
For the 1st & 3rd defendants: Norazali Nordin (Syahidah Hanum Mohd Ghazali
with him); M/s Rahimi Tan & Co
For the 2nd defendant: Nathan Narayanasamy; M/s Kumar Jaspal Quah &
Aishah
For the second third party: V Amareson; M/s Amereson & Meera

[Dismissed the application.]

 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 2 Parties) [2016] MLRHU 882

JUDGMENT

Lim Chong Fong JC:

Introduction

[1] This is an action brought by a disgruntled client against the firm of

solicitors employed by him over a land conveyancing transaction.

[2] The Plaintiff is an individual and a businessman. He basically speaks only

the Hokkien dialect.

[3] The Defendants are advocates and solicitors. They formerly practiced as a
partnership in Messrs. How Zul & Low and are now practicing as a
partnership in Messrs Kumar Jaspal Quah & Aishah.

[4] The Plaintiff employed the firm of Messrs How Zul & Low to undertake
the conveyancing transaction of a piece of real property held under Geran
Mukim No. 3556, Lot No. 382, Bkt Bt Puteh, Mukim Sungai Pasir, Daerah
Kuala Muda, Negeri Kedah ('Land').

[5] In this action, the Plaintiff in essence sued the Defendants for breach of
contractual duty and negligence in respect of the non transfer of the Land
purchased by the Plaintiff to his name.

[6] As the result of the action, the First and Third Defendants brought in the
First to Third Third Parties who were connected with the aforesaid Land
transaction to indemnify them as third party in the action.

Preliminary

[7] The trial of the action including the third party proceedings took 6 days on
18 December 2015, 26 January 2016, 12, 13, 21 and 22 April 2016. The First
Third Party is a bankrupt and neither he nor the Director General of
Insolvency was present at the trial whereas the Third Third Party has passed
away and the personal representative that represented his estate was also
absent at the trial.

[8] The trial documents were marked as bundles A to K which also comprised
of documentary evidence collated in bundles B, C, D, K, L and N. By consent
of the parties, all the documentary evidence carry status B which meant that
their authenticity were undisputed. In addition, exhs P1 (a) to (c), TP2, TP3
and D4 were admitted in evidence during the course of the trial.

[9] The following people testified at the trial:

(i) Dato' Quek Wan Hong ('PW1' and hereinafter 'Dato' Quek'), the
Plaintiff himself;
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 3

(ii) Low Hock Lee ('PW2' and hereinafter 'Low'), the Second Third
Party himself who is a close friend of PW1;

(iii) Zulkifli Zabidin ('DW1' and hereinafter 'Zul'), the First Defendant;

(iv) Rinagasamy a/l Pitchay ('DW2' and hereinafter 'Rinagasamy'),

formerly a clerk of Messrs How Zul & Low;

(v) How Chee Hong ('DW3' and hereinafter 'How'), the Second
Defendant himself.

[10] After the close of the trial, the parties filed their written submissions in
chief as well as their written submissions in reply. Oral clarification with
counsel was held on 21 and 29 July 2016. At the clarification, the First and
Third Defendants withdrew their third party claim against the First Third
Party.

Common Background Facts

[11] The registered owners of the Land at all material times were Ang Soh
Lee, Ang Soh Bee, Ang Soh Mee, Ung@Ang Soh Fong and Ung Soh Lee.

[12] By a power of attorney dated 6 March 2007, these registered owners

appointed Ang Soh Bee as their lawful attorney to act in their names and on
their behalf in all matters pertaining to the Land.

[13] By a written sale and purchase agreement dated 10 April 2007 made
between Ang Soh Bee and Lee Beng Choo (the Third Third Party), Ang Soh
Bee sold the Land to Lee Beng Choo at the price of RM720,000. The deposit
of RM80,000 was to be paid upon the execution of the agreement and the
balance of the purchase price was to be paid within three months from the date
thereof with a further extension of one month if the purchaser is unable to
settle the balance. Upon payment of the full purchase price within the
stipulated time, the memorandum of transfer of registration of the Land would
be presented to the land office.

[14] Around or after the execution of the aforesaid sale and purchase
agreement, Zul met Tok Hoon Kiang (the First Third Party) at the opening of
the Bukit Mertajam branch of Messrs How Zul & Low at Perda. Tok Hoon
Kiang told Zul that he would introduce his friend Low to Zul. This was
because Tok Hoon Kiang knew the owner of the Land and a friend of Low (ie
Dato' Quek) was interested to purchase that Land. Subsequently, Tok Hoon
Kiang also separately introduced Lee Beng Choo to Zul.

[15] Thereafter, there was a meeting held amongst Tok Hoon Kiang, Low and
Zul to introduce Low to Zul. Subsequently at another meeting, Low and Dato'
Quek together met Zul to discuss about the conveyancing of the Land.

[16] On 29 May 2007, Dato' Quek issued two cheques of RM 50,000 totaling
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 4 Parties) [2016] MLRHU 882

RM 100,000 payable to Lee Beng Choo for the purchase of the Land that were
deposited directly into Lee Beng Choo's bank account.

[17] In the meantime, Zul prepared the sale and purchase agreement of the
Land to be executed between Lee Beng Choo and Dato' Quek. This sale and
purchase agreement was then executed on 6 July 2007. It was not
contemporaneously executed by both of them but Zul attested to their
execution. It was stated therein that the purchase price of the Land is
RM2,510,000. The deposit is RM500,000 wherein RM100,000 had been duly
paid by the purchaser prior to the execution of the agreement and the balance
RM400,000 to be payable upon the execution of the agreement which the
vendor thereby acknowledged receipt. The balance of the purchase price
would be released to the vendor within fourteen days from the date of
presentation of the memorandum of transfer. The completion date would be
six months from the date of the agreement. Messrs How Zul & Low is the
purchaser's solicitors whereas the vendor has decided not to engage any
solicitor to act on the vendor's behalf despite having been advised to engage
such professional service.

[18] Simultaneous with the execution of the aforesaid sale and purchase
agreement, Dato' Quek issued several cheques totaling to RM410,000 payable
to Messrs How Zul & Low for the remainder of the deposit. Subsequently
Messrs How Zul & Low issued a cheque of RM367,000 to Lee Beng Choo and
another cheque of RM33,000 to the stamp office for the payment of stamp
duty at the request of Tok Hoon Kiang from the monies paid by Dato' Quek.
The cheques were all collected by Lee Beng Choo except the cheque payable
to the stamp office which was collected by Tok Hoon Kiang.

[19] Pending the completion of the sale and purchase agreement of the Land
between Dato Quek and Lee Beng Choo, there was no private caveat entered
on the Land.

[20] Upon Zul's request made to Tok Hoon Kiang for the delivery of the issue
document of title of the Land for purposes of the completion of the aforesaid
sale and purchase agreement, Tok Hoon Kiang informed Zul that Lee Beng
Choo was willing to give a RM200,000 discount on the purchase price of the
Land if Dato' Quek is willing to pay him early. Zul accordingly informed Low
about it.

[21] Dato' Quek agreed to the aforesaid Lee Beng Choo's offer. The purchase
price of the Land was hence revised to RM1,800,000. Consequently Dato'
Quek issued five cheques dated 1 November 2007 and another five cheques
dated 2 November 2007 totaling to RM1,810,000 payable to Messrs How Zul
& Low.

[22] On 5 November 2007, Zul sent a letter in the letterhead of Messrs How
Zul & Low merged with and now known as Kumar Jaspal Quah & Aishah to
Dato Quek that reads as follows:

"Re: Sale & Purchase Agreement dated 06-07-2007GM 3356 Lot 382
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 5

Tempat Bkt Bt Puteh Daerah Kuala Muda

We refer to the above matter and to the Sale & Purchase Agreement
dated 06 July 2007 signed between you and Lee Beng Choo.

We write to advise that the Vendor has proposed for the sale and
purchase price of RM2.5 million be reduced to RM2.1 million if you
are agreeable to the balance purchase price being settled prior to the
registration of transfer from the name of the Vendor to yours.

Please be advised that this exercise is a very risky one in view of

registration of transfer into your name is not guaranteed despite the
balance purchase price being fully paid and disbursed to the Vendor.

Nevertheless, we leave it to your goodself to decide and in the event

you opt to pay to the Vendor the full purchase price in consideration
of the deduction of the purchase price from the one as per the sale &
purchase agreement, we shall not be held liable for your decision as
such as we strongly advise against it.

Thus, kindly let us have your instructions."

This letter was allegedly posted to Dato' Quek by Rinagasamy vide normal
post but Dato' Quek denied receiving it.

[23] Subsequently, Messrs How Zul & Low issued six cheques totaling to
RM1,810,000 to Lee Beng Choo from the monies paid by Dato' Quek. Three
cheques were collected by Lee Beng Choo on 7 November 2007 and the
remaining three cheques were also collected by Lee Beng Choo on 12
November 2007.

[24] Thereafter Dato' Quek with Low met Zul on several occasions to enquire
on the status of the conveyancing transaction of the Land. Zul informed them
that there were problems with regards to the transfer of the Land.

[25] Eventually Dato' Quek instructed his solicitor, Messrs Tan Bak Lee & Co
to issue a letter of demand upon Messrs How Zul & Low. After several
exchanges of letters, Dato' Quek finally filed this action on 5 December 2012.

Contention Of The Parties

[26] In the main action, the Plaintiff Dato' Quek pursued his claim based on
twin causes of action of breach of contractual duty and negligence against the
Defendants jointly as partners of the firm formerly known as Messrs How Zul
& Low and now Messrs Kumar Jaspal Quah & Aishah. There was in the
original pleading reference to breach of fiduciary obligations too but it has
been confirmed at the clarification on 21 July 2016 that the cause of action of
breach of fiduciary obligations was not pursued.

The particulars of breach/negligence as pleaded were as follows:

 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 6 Parties) [2016] MLRHU 882

"Defendan-Defendan sebagai peguam Plaintif telah gagal membuat

carian hakmilik hartanah dan/atau memastikan bahawa Hartanah
yang dikenali sebagai Geran Mukim No. 3536, Lot No. 382, Bkt Bt
Puteh, Mukim Sungai Pasir, Daerah Kuala Muda, Negeri Kedah
didaftarkan pada setiap masa di atas nama Lee Beng Choo sebagai
Pemilik berdaftar atau amalan-amalan dan/atau garis panduan biasa
(standard practice) dan/atau dan atau langkah berjaga-jaga (duty of
care) di dalam urusan urusan pembelian hartanah."

[27] The Defendants denied the Plaintiff's claim. The First and Third
Defendants pleaded that their firm was instructed by Low as the agent of the
Plaintiff to prepare the sale and purchase agreement of the Land based on
Low's information learnt from Tok Hoon Kiang that the Land was then being
transferred by the registered owner to the seller, Lee Beng Choo. Low knew
that the Land was then registered in the names of nine other persons and not
Lee Beng Choo. This fact was subsequently also confirmed by Tok Hoon
Kiang to Zul, the First Defendant.

[28] In this respect, the First and Third Defendants contended that both Low
and Tok Hoon Kiang gave to Zul a search conducted on the Land and a copy
of the official receipt of the Land Office that showed the transfer of the Land
from the registered owner to Lee Beng Choo was ongoing. Low specifically
instructed Zul not to lodge a private caveat on the Land because that would
prohibit or slow down the transfer of the Land to Lee Beng Choo.

[29] Before and after the sale and purchase agreement was executed, Zul
advised Dato' Quek of the dangers of making the payment of the balance of
the purchase price in the event the Land could not be registered in his name.
Hence it was provided in the sale and purchase agreement that the balance of
the purchase price should be withheld by Zul as stakeholder pending the
presentation of the memorandum of transfer for registration. However on 6
November 2007, Zul released the balance of payment of the purchase price to
Lee Beng Choo on the specific instruction of Dato' Quek.

[30] The First and Third Defendants also pointed out that Dato' Quek only
took action 4 years after the sale and purchase agreement of the Land was
executed. It plainly showed that Low conspired with Lee Beng Choo and/or
Tok Hoon Kiang to cheat and defraud the firm.

[31] In the circumstances, the First and Third Defendants contended that
Dato' Quek's loss was self inflicted.

[32] As for the Second Defendant, he contended that he had no knowledge of

the entire transaction of the Land whatsoever. In addition, he was not a
partner of the firm as from 30 October 2007.

[33] In the third party action, the First and Third Defendants sought for an
indemnity or contribution of Dato' Quek's claim against them in the main
action from Low because of his conspiracy with Lee Beng Choo and/or Tok
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 7

Hoon Kiang to defraud the firm.

[34] The Second Third Party, Low did not admit the First and Third
Defendants' claim and contended that he only acted as the interpreter of Dato'
Quek at all material times. He further contended that Dato' Quek entered into
the sale and purchase agreement of the Land on the advice of Zul.

Findings Of The Court

[35] As normally done, I will deal with the issues arising from the main action
first and thereafter by those in the third party action.

[36] Generally, it is trite law that a solicitor owes both a contractual and
tortious duty of care to his client. In the federal court case of Yong & Co v.
Wee Hood Teck Development Corporation [1984] 1 MLRA 165; [1984] 2 MLJ
39; [1984] 1 CLJ 251, Syed Agil Barakbah J (later SCJ) held as follows at pp
44 and 45:

"The principle applicable in a case of this nature as rightly applied by

the learned Judge is that while the duty of a solicitor is directly related
to the confines of the retainer, it is the incident of that contractual duty
that he has to consult his client on all questions of doubt which do not
fall within the express or implied discretion left to him. It is also his
duty to keep his client informed to such extent as may be necessary
according to the same criteria. (Midland Bank Trust and Groom v.
Crocker (supra))...

...

The liability of a solicitor may be viewed in two aspects. At common

law the retainer imposes upon him an obligation to be skillful and
careful and for failure to fulfill this obligation he may be made liable in
contract for negligence whether he is acting for reward or gratuitously.
On the other hand, like any other individual, a solicitor is liable for his
wrongful acts and if the circumstances justify the charge, he may be
made liable to his client in tort. (See Halsbury's Laws of England, Third
Edition vol 36 p 96, para 131). He owes a duty not to injure his client
by failing to do that which he had undertaken to do and which his
client has relied on him to do. (Midland Bank Trust Co Ltd (supra))..."

[37] That notwithstanding, it is my view that the extent of the aforesaid duty
owed by the solicitor to the client is dependent on the specific facts and
circumstances of each case and the course of dealing between them.

[38] It is therefore pertinent for me to firstly deal with the personality of the
main characters involved in this Land transaction from my observation of their
testimony in court.

[39] The Plaintiff, Dato' Quek is a seasoned businessman. He claims to be

illiterate and mainly speaks in the Hokkien dialect. He stopped schooling after
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 8 Parties) [2016] MLRHU 882

secondary two. He does not speak English or Bahasa Malaysia although I

think he understands a little of both. He seemingly signed his name in cursive
alphabetical characters as seen in the sale and purchase agreement of this Land
executed by him as well as the payment cheques issued by him. This Land
transaction in issue before me wasn't his first land transaction. He agreed that
he had previously acquired other lands for development.

[40] As for this Land transaction, it was Low who introduced the Land to him.
Low accompanied him in all the meetings and dealings with Zul in respect of
the conveyancing of the Land. It is undisputed that Low was his interpreter.
They are business partners too and I distinctly observed that he kept looking at
Low in the course of cross examination at the trial. It is evident to me that he
primarily acted after close consultation with Low on the Land transaction. At
the trial, he could mostly give general answers only to those questions posed to
him by opposing counsel.

[41] Now as to Low, he is a licensed company secretary but works as an

assistant company secretary at SYS Korporat Sdn Bhd which provides
company secretarial and auditing services. He is a close friend of Dato' Quek
since primary school. They are business partners too and one of their business
ventures in a land deal vide a company known as Kitaran Bumi Maju Sdn Bhd
resulted in litigation. Besides that, Tok Hoon Kiang was also a client of Low
in that he utilized the services of SYS Korporat Sdn Bhd.

[42] It is evident that Low regularly introduced land deals to his business
associates and friends. As for this Land, I am satisfied that he was made aware
of it from Zul as well as Tok Hoon Kiang. He stated that this Land deal was a
good deal by reason that the Land was situated in a good commercial location
in Bukit Mertajam and offered for sale at an attractive price. He initially
wanted it for himself but could not afford to purchase it. He further claimed
that he did not derive any commission or benefit for introducing the Land deal
to Dato' Quek. From the course of conduct, I am also satisfied and find that
Low acted as the agent of Dato' Quek whilst dealing with Zul on matters
relating to the Land transaction particularly during the absence of Dato' Quek.

[43] At the trial, I observed from Low's demeanor that he was canny and
guarded in answering the questions posed to him by opposing counsel and
basically blamed Zul for the whole problem of the Land not getting registered
in Dato' Quek's name notwithstanding that Dato' Quek has paid the entire
purchase price. In his own words, he testified that he had expected Zul to
'filter' through the potential pitfalls in that conveyancing transaction.
Nevertheless, I am satisfied that Low had working knowledge of basic land
conveyancing practices including the entry of private caveat to protect the
buyer's interest.

[44] As for Zul the First Defendant, he was admitted as an advocate and
solicitor in 1989 primarily in non contentious legal work. He has practiced for
about 18 years when he undertook the conveyancing transaction of the Land
for Dato' Quek. It could fairly be presumed that he had sufficient knowledge
and experience to handle the matter at that time.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 9

[45] Tok Hoon Kiang was an acquaintance Zul first met at his firm's Bukit
Mertajam branch office opening ceremony. On that occasion, Tok Hoon
Kiang informed Zul that he would introduce to Zul both the seller of the Land
and Low who has a friend who was interested to purchase the Land. It is plain
to me that Zul subsequently informed Low of it not as a real estate agent but as
an introducer with the hope to undertake the required conveyancing services
as a lawyer.

[46] I observed Zul to be composed and forthright at the trial from his
demeanor and the manner he answered the questions posed to him by
opposing counsel.

[47] From the evidence adduced at trial, I noticed that there was dearth of
documentary record of the communications between the relevant parties, to
wit: Zul and Dato' Quek/Low on the one side as well as Zul (on behalf of
Dato' Quek) and Lee Beng Choo/Tok Hoon Kiang on the other side. It is
apparent that the course of dealings here were largely through oral
communications.

[48] Notwithstanding that there were some common background facts, it is an

arduous undertaking to determine the truth of the other disputed facts here
based on the oral testimony of witnesses.

[49] In this respect, I have earlier said as follows in Mayland Lending Sdn Bhd
v. Rossmaizati Mohamad & Anor [2014] 6 MLRH 395; [2015] 7 MLJ 216;
[2014] 4 AMR 436 with emphasis added:

"25. It is seen that certain evidence adduced on the factual issues are in
conflict from the testimony of the witnesses of the parties particularly
that between the Plaintiff and First Defendant. The resolution of the
conflict necessarily requires the application of s 101 to 103 of the
Evidence Act 1950, to wit:

101. Burden of Proof

(1) Whoever desires any court to give judgment as to

any legal right or liability, on the existence of facts
which he asserts, must prove that those facts exist.

(2) When a person is bound to prove the existence of

any fact, it is said that the burden of proof lies on that
person.

102. On whom burden of proof lies

The burden of proof in a suit or proceeding lies on

that person who would fail if no evidence at all were
given on either side.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 10 Parties) [2016] MLRHU 882

103. Burden of proof as to particular fact

The burden of proof as to any particular fact lies on

that person who wishes the court to believe in its
existence, unless it is provided by any law that the
proof of that fact shall lie on any particular person."

26. The interpretation and application of these provisions are lucidly

explained by Augustine Paul JC (as he then was) in Tan Kim Khuan v.
Tan Kee Kiat (M) Sdn Bhd [1997] 2 MLRH 326; [1998] 1 MLJ 697;
[1998] 1 CLJ Supp 147; [1998] 1 BLJ 147: " It is settled law that the
burden of proof rests throughout the trial on the party on whom the
burden lies. Where a party on whom the burden of proof lies has
discharged it, then the evidential burden shifts to the other party...
what shifts is the responsibility of adducing evidence to discharge that
burden...When the burden shifts to the other party, it can be
discharged by cross-examination of witnesses of the party on whom
the burden of proof lies or by calling witness or by giving evidence
himself or a combination of the different methods. No adverse
inference can be drawn against that party for failure to give evidence
himself. If he does not adduce any evidence when the burden has
shifted to him, he will fail. If the party whom the burden lies fails to
discharge it, the other party need not call any evidence. In that event,
it will not avail to him to turn around and say that the respondent has
not established his."

27. In this regard, I must add that it is incumbent on the party where
the burden lies to first adduce evidence that is believable to satisfy the
court he has discharged his evidential burden before the burden shifts
to the other party to rebut it by different methods as alluded by his
Lordship. The rebuttal may then either result in the evidence originally
adduced continues to be believable or become discredited. The
evaluation of the evidence for believability and veracity will
principally include the demeanour of the witness as observed by the
Court and testing their testimony for consistency with the pleadings,
testimony of other witnesses and the contemporaneous documentary
evidence. Actions and inactions of the parties at the material time of
the occurrence of the factual events are also duly examined
particularly any explanation to justify them. Ultimately the Court will
critically weigh all the evidence adduced by both parties and make the
determination as to whether the party that bears the burden has proved
the fact in issue on the balance of probabilities."

[50] By adopting the same evaluation criteria here, I firstly find that Low and
consequently Dato' Quek through their close association knew that the Land
was registered in the names of Ang Soh Lee, Ang Soh Bee, Ang Soh Mee,
Ung@Ang Soh Fong and Ung Soh Lee. In addition, there was a power of
attorney dated 6 March 2007 given by them to Ang Soh Bee to deal with the
Land as their lawful attorney. The knowledge was obtained from the
photocopy of the land title and power of attorney that was furnished to Low
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 11

by Zul and Tok Hoon Kiang during their joint introductory meeting of one
another.

[51] Secondly, I find that Low and consequently Dato' Quek knew that by
virtue of the sale and purchase agreement dated 10 April 2007 between Ang
Soh Bee and Lee Beng Choo, the Land has been sold to Lee Beng Choo and
the completion of the sale would be within four months therefrom. The
knowledge was obtained from the photocopy of the sale and purchase
agreement that was also furnished to Low by Zul and Tok Hoon Kiang at the
same introductory meeting.

[52] Thirdly, I find that Dato' Quek, out of sheer zealousness to procure the
Land, paid RM 100,000 to Lee Beng Choo by crediting the payment directly
into Lee Beng Choo's bank account; details of which were given by Tok Hoon
Kiang to Low. Zul was instructed to prepare the sale and purchase agreement
of the Land accordingly.

[53] Fourthly, I find that Zul and also Rinagasamy have explained to Dato'
Quek through Low as interpreter on the inherent risks of entering into the sale
and purchase agreement with Lee Beng Choo by reason that Lee Beng Choo
was not the registered owner of the Land. Nevertheless, Dato' Quek decided to
proceed with the purchase and went on to execute agreement on 6 July 2007.

[54] Fifthly upon my review of the sale and purchase agreement, I find and
hold that sale and purchase agreement of the Land prepared by Zul and
executed by the parties accorded with the intents of Dato' Quek. The
completion date was set to ensure that it is later and sufficiently distant from
the completion date of the sale and purchase agreement between the registered
owners and Lee Beng Choo. Moreover, Zul has safeguarded Dato' Quek's
interest by stipulating that the payment of the remaining of the purchase price
would only be released by the stakeholder to Lee Beng Choo after the
memorandum of transfer of the Land has been presented.

[55] Sixthly, I find that Dato' Quek through Low instructed Zul not to lodge a
private caveat on the Land by reason that would hinder the completion of the
sale and purchase agreement of the Land between the registered owners to Lee
Beng Choo which would in turn jeopardize the completion of the sale and
purchase agreement of the Land between Lee Beng Choo and Dato' Quek
since the transactions were 'back to back' transactions. This is to me a sensible
instruction on the probabilities of this case.

[56] Seventhly, I find that Dato' Quek again out of his sheer enthusiasm to
enjoy the further 5% discount on the purchase price offered by Lee Beng Choo
agreed to revise the provision in the sale and purchase agreement to pay Lee
Beng Choo the remaining balance of the purchase price before the presentation
of the memorandum of transfer of the Land. This is notwithstanding Zul's
verbal warning given to him through Low as interpreter. This verbal warning
was followed up with the firm's letter dated 5 November 2007 that was sent to
him by normal post. Dato' Quek's allegation of non receipt of the letter was a
bare denial.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 12 Parties) [2016] MLRHU 882

[57] In making the aforesaid findings, I am more persuaded by the testimony

of Zul as corroborated by Rinagasamy in certain respects over that of Low and
Dato' Quek. In other words, I find Zul truthful and consistent throughout the
trial.

[58] Upon this premise as found, I will now deal with the causes of action and
defences distilled from the pleadings and closing submissions of the parties in
the main action. There are essentially five issues, to wit whether:

(i) the Defendants failed to conduct a land search and warn the
Plaintiff that Lee Beng Choo wasn't the registered owner of the Land
before the Plaintiff executed the sale and purchase agreement on 6
July 2007?;

(ii) the Defendants failed to verify the authenticity of the power of

attorney conferred by the registered owners of the Land to Ang Soh
Bee dated 6 March 2007 and the sale and purchase agreement between
Ang Soh Bee and Lee Beng Choo dated 10 April 2007?;

(iii) the Defendants failed to advise the Plaintiff to lodge a private

caveat to protect the Plaintiff's interest in the Land?;

(iv) the Defendants failed to alert the Plaintiff as to the risk of paying
Lee Beng Choo the full purchase price when he wasn't the registered
owner of the Land?: and

(v) the Defendants wrongly released the balance of the purchase price
knowing that the land office receipt no. 20071212H010 dated 25
September 2007 was forged?

[59] As to the first issue, it seems that Dato' Quek principally relied on the land
registry search done on 4 July 2011. In that search result, Lee Beng Choo
wasn't stated therein as the registered owner at all.

[60] In my view, the reliance on the land registry search per se is inadequate
for me to find liability. The background facts cannot be ignored. I have in
paras 49 and 50 already found that Dato' Quek knew from the documentary
evidence provided to him through Low that Lee Beng Choo wasn't the
registered owner of the Land at the material time when Dato' Quek was about
to purchase the Land. In fact, this has also been admitted by Low as seen from
the following excerpts of his answers under cross examination:

Q: Dan dia bagi satu perjanjian kepada Encik Low?

A: Semasa sign S&P.

Q: Semasa sign S&P di ms 2 hingga 22 (the July 2007 SPA), dia bagi
satu lagi perjanjian di mana ada jual kepada Lee Beng Choo?
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 13

A: Ya.

Q: Yang Arif, pp 2 to 22, Encik Zul had shown an agreement to the

vendor Lee Beng Choo?

A: Yes.

Q: Untuk pengesahan, saya ingin Mr Low sahkan perjanjian yang

diberikan oleh Encik Zul ialah perjanjian di ms 91 hingga 101 Ikatan
yang sama (the April 2007 SPA)?

A: Ya.

Q: Semasa sign, dia beri ms 91 hingga 101 , ya?

A: Ya.

Q: Soalan saya kepada Encik Low, sudah tentu Encik Low ada
memaklumkan fakta ini kepada Encik Quek betul?

A: Ya.

...

Q: I will clarify that. Encik Low, very simple, Encik Low dalam
perenggan 27, perjanjian di ms 2 hingga 22, Encik Low, maklum, tahu
Lee Beng Choo baru saja membeli hartanah tersebut dan pada April
2007 ya?

A: Ya.

Q: Dan Encik Low tahu perjanjian April 2007 belum diselesaikan.

Belum completed?

A: Ya.

Q: Tahu ya. Encik Low tahu Encik Lee Beng Choo belum menjadi
pemilik berdaftar tanah tersebut?

A: Ya, diberitahu.

Q: Diberitahu ya. Dan ini telah diberitahu kepada Encik Quek

sebelum ini?

A: Ya.

[61] In the premises, I find and hold that it did not matter that a land search
wasn't conducted by Zul and accordingly warn Dato Quek of the search results
that would reveal Lee Beng Choo wasn't the registered owner of the Land.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 14 Parties) [2016] MLRHU 882

This is because Dato Quek was already informed through Low that Lee Beng
Choo wasn't the registered owner. He was still waiting to be registered as
owner pursuant to the sale and purchase agreement dated 10 April 2007. The
case of Anthony Ting Chio Pang v. Wong Bing Seng [1997] 2 MLRH 720;
[1997] 2 CLJ 831 relied by the Plaintiff is hence plainly distinguishable on the
facts.

[62] In respect of the second issue, it is clear as a matter of law that Zul wasn't
dutibound to investigate the authenticity of the power of attorney and sale and
purchase agreement. In Ngan Siong Hing v. RHB Bank Bhd [2014] 2 MLRA
528; [2014] 2 MLJ 449; [2014] 3 CLJ 984, the court of appeal by a majority
decision reversed the finding for negligence and breach of retainer against a
solicitor firm for failure, inter alia, to conduct a verification exercise into the
validity of the sale and purchase agreements in issue and to conduct searches
at the Bar Council. In that case Hamid Sultan JCA held as follows:

"[29] ... The duty of care and breach complained of relates to

professional conduct of the appellant. And to determine whether the
appellant had breached the duty, whether in contract or tort, the
opinion of the expert of the profession plays a major role to determine
the issue according to their professional standards or obligations (see
Bolam v. Friern Hospital Management Committee [1957] 1 WLR 582)
(Emphasis added.)

...

[31] The appellant's/defendant's expert in examination in chief had

this to say:

Q4 : I refer to pages 13-14 of Bundle H, which is a Letter of

instructions dated 18 October 2000 issued by the plaintiff to
the firm of M/s Abbas & Ngan. What were the instructions
(in gist) contained in the letter?

A : The law firm was instructed to act for the plaintiff who
had agreed to grant a loan to a borrower by the name of Pneh
Kon San, to partially finance the purchase of 2 units of
apartment by the borrower. The firm was instructed to prepare
the relevant security documents in the standard formats of the
plaintiff. In this case, it involved Facilities Agreements and
Deeds of Assignment, since individual titles to the 2 properties
had not yet been issued. The firm was also requested to make
the necessary searches. I also notice that the plaintiff had
instructed that the lodgment of a private caveat be waived.

Q5 : What do you consider were the necessary searches to be

made in the circumstances of such an assignment?

A : Bearing in mind that this was a matter of preparation of

loan documentation, with the sale & purchase agreement
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 15

already concluded and the letter of offer of loan already issued

by the plaintiff to the borrower, a solicitor acting for the
plaintiff in such circumstances would in the usual
conveyancing practice conduct a land search, and a
bankruptcy search on the borrower.

Q6 : Do you consider it the duty of a solicitor for the plaintiff

in those circumstances to also conduct other searches, such as
a search with the I/C Department, or a company search on
the vendor of the property or on the developer?

A : No, it is not the usual practice to make those searches in

the circumstances, in the absence of specific instructions
requiring the same.

Q7 : Why do you say so?

A : There are a number of reasons. Firstly, the solicitor was

acting for the financier, not the borrower. Neither was he
acting for any party in the sale & purchase. He was, in this
sense, 'one-layer removed'. He was 'to take it from there'. His
duty was to cany on from the sale & purchase. His scope of
responsibilities was related to the preparation of loan
documentation only. He was not required to go back to square
one, and to take care of matters pertaining to the sale &
purchase.

Secondly, a financier's solicitor's duty is legal (rather than

investigative) in nature. He is not required to investigate or
'audit' what has already been done in relation to the sale &
purchase. For example, he is not expected to verify that parties
had executed the sale & purchase agreement with free will, or
that the terms in it accurately reflect what the parties have
agreed upon, or that the deposit or differential sum has really
been paid, etc. In the absence of any reasonable cause for
suspicion, he is entitled to accept what has been done, and to
take it from there.

Thirdly, where another firm is acting in the sale & purchase

('the S & P solicitor'), a financier's solicitor's duty is to
correspond with the S & P solicitor, to obtain documents,
information and confirmations from them. The financier's
solicitor is entitled to rely on the documents, information and
confirmations obtained from the S & P solicitor. He is not
expected to encroach into the sphere of duty of the S & P
solicitor.

I do understand that, in this case, the problem arose because

the S & P solicitor turned out to be a bogus firm. In my view,
this is the crucial difference between this case and other cases
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 16 Parties) [2016] MLRHU 882

involving similar types of loan documentation. But this

precisely points to the fact that it was a case of fraud
perpetrated on both the financier and its solicitor, and not a
case of negligence or breach of contractual duty. The same
things that were done in this case, if done in other cases not
involving a bogus firm, would have satisfied the normal and
acceptable conveyancing practice. The only difference in this
case is that the 'solicitor' handling the sale & purchase was a
bogus firm, and the transaction was bogus. It was a fraudulent
scam.

Q8 : You have said that in those circumstances it was not the

usual practice for a financier's solicitor to conduct those other
searches (unless specifically instructed). Would you however
say that it would have been a good practice for a financier's
solicitor to do so nevertheless?

A : I would not term it a 'good practice'. I would call it

'hindsight practice'. Hindsight is usually perfect. After the
event, one knows what one could easily have done (or could
easily have avoided), so that a fraud would not have been
successful. But that would be a practice by hindsight,
something that cannot be expected of a solicitor. If that is to
be considered a 'good practice', then so will many other things
currently not done in normal conveyancing practice. There
will be an almost endless list of things that can be added as
'good practice' (since different steps are required to detect or
prevent different methods of fraud). If that were to be done,
normal conveyancing practice will become extremely
cumbersome and impractical, because there is no end to the
measures one can take to detect or prevent possible fraud.

It is always easy to say, after the event, that 'it would not have
happened if only he had done that simple thing'. But that is
the benefit of hindsight. It can apply to almost every scenario.
After the event, there is always that simple thing that could
have been done to prevent its occurrence. To expect this kind
of action beforehand is not to maintain an acceptable standard
of practice, but to require an impossible standard of practice
that comes only with the benefit of hindsight.

Q9 : In your experience, did banks and finance companies (in

2000) require I/C searches to be done on their borrowers?

A : No. In most cases, that was not required. The financier

would specifically instruct its solicitor, if it wanted that to be
done. Banks had a 'turn around time' for loan documentation.
I/C searches used to take a long time, and would not meet the
turn around time. In fact, even bankruptcy searches were
sometimes waived at that time (when it was slow in coming).
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 17

Q10 : When the solicitor in the defendant firm relied and

acted on documents forwarded to them by the plaintiff bank
after loan approval was granted by the plaintiff on its
violation, is it the duty of the defendant to do investigative
searches on the Borrower?

A : No, unless there is specific instructions to do so.

Q11 : Please look at pp 133-147 (exh P-4) and pp 148-162 (exh

P-5) of Bundle H, which are the subsale agreements furnished
by the plaintiff to the defendant firm. On the fact of it, was
there another law firm acting in the sale & purchase?

A : Yes. On the face of it, a firm called KY Lee & Associate

(of 1st Floor, No. 4N, Jalan Air Itam, 11400 Penang) was
acting in the sale & purchase.

Q12 : In that situation, ie where there was another firm on

record for the sale & purchase, was it the responsibility of the
plaintiff's solicitor to verify the authenticity of documents,
information and confirmations provided by the S & P
solicitor?

A : No, unless there is something on the face of it that

reasonably gives rise to suspicion. As I have explained earlier,
the financier's solicitor is entitle to rely on the documents,
information and confirmations provided by the S & P
solicitor.

Q13 : When a law firm deals with another firm, must it verify
with the Bar Council whether the other firm really exists?

A : No, that is not normally done at all. An enquiry might be

made in rare cases where there is something on the face of it
that reasonably gives rise to suspicion. Law firms deal with
one another every day. If making an enquiry of this nature is a
requirement or a recommended practice, then over the years
the Bar Council would have been receiving hundreds of
enquiries each day. That is certainly not the case. An enquiry
of this nature can also be 'endless' in a way, or at lease very
cumbersome even on the enquirer, because there are always
many more things that one can enquire apart from the mere
existence of a firm.

Q14 : Are you aware whether the Bar Council was later
alerted to the presence of the bogus firm of KY Lee &
Associates?

A : Yes, the Bar Council was later alerted to it. I was in the
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 18 Parties) [2016] MLRHU 882

Council then. I remember that the Council directed its then

Executive Director to lodge a police report on the matter,
because we believed it was a case of fraud that had affected
many of our members, and a number of banks.

Q15 : Do you agree that both the plaintiff and the defendant in
this case are victims of the scam?

A : Yes.

...

[32] We have read the appeal records and the submissions of the
parties in detail. We are grateful to the learned counsel for the
comprehensive submissions. After much consideration and
deliberation on the submission of the learned counsel for the
respondent we take the view that the appeal must be allowed. Our
reasons, inter alia, are as follows:

(a) ...

(b) To recover the loss the respondent relies on the letter of

instruction dated 18 October 2000 to assert that the loss or
damage was caused by the appellant in particular for failing to
do appropriate search, etc. What is important to note is that
the instruction to do searches is vague and what searches
which must ordinarily be done will largely depend on
conveyancing practice and inconseguence the evidence of the
experts need to be considered to ascertain liability. (Emphasis
added.)

(c) ...

(d) ...

(e) ...

(f) It was strenuously argued by the respondent that the failure

of the appellant solicitor to do a search on the bogus solicitor
was the material cause for the loss in contract as well as in
negligence though it was not the pleaded case or specified in
the instruction. Again this issue is one relating to
conveyancing practice as was in vogue in the year 2000.

(g) In the year 2000 there was no requirement by the Bar

Council to do search on solicitors. The experts who gave
evidence did not say that this is a requirement. The English
conveyancing practice, now in vogue, requires a search to be
done on solicitors to avert conveyancing fraud. For example,
there is heavy reliance by solicitors in England on the explicit
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 19

duties which are prescribed by the Council of Mortgage

Lenders (CML) Handbook (including the duty to check
whether the solicitors for the other side is bogus or not) (see
Lloyds TSB Bank Plc v. Markandan and Uddin (a firm) [2012]
EWCA Civ 65). The English standards cannot be imposed in
Malaysia on a transaction which took place in the year 2000
that too in cases where there is no specific requirement in law
or practice or by way of cliental instruction to do so (see
Nationwide Building Society v. Davisons Solicitors (a firm)
[2002] All ER(D) 141 (Apr)..."

This decision was subsequently affirmed by the federal court in Civil

Appeal no. 02(f)-93-12/2014(A)).

[63] I am bound by the above decision of the court of appeal. Consequently

and since the power of attorney dated 8 March 2007 was prima facie registered
in the high court and the sale and purchase agreement dated 10 April 2007 was
prima facie prepared and attested to by an advocate and solicitor, I find and
hold that the Defendants were not dutibound to conduct searches to verify the
authenticity of those documents.

[64] As to the third issue, I am aware Low testified that he specifically

instructed Zul to lodge a private caveat. However I have in para 54 found the
contrary that Low instructed Zul not to lodge a private caveat instead to
facilitate the quick registration of the transfer of the Land from the registered
owners to Lee Beng Choo. Consequently, I find and hold that the Defendants
were not in dereliction of duty as Zul sensibly obeyed the instruction of Dato'
Quek that was given through his agent Low.

[65] In respect of the fourth issue, it is trite law that a solicitor has the general
duty to alert his client on the foreseeable risk of an action to be taken. Thus in
Maelstrom Resources Sdn Bhd & Anor v. Shearn Delamore & Co & Another Case
[2006] 3 MLRH 560; [2007] 1 CLJ 50, Kang Hwee Gee J (later JCA) held as
follows:

"[55] A solicitor has a duty to warn client of risks he is facing:

1. See Court of Appeal case of Buckland v. Mackesy The

Solicitors' Journal vol 112-1968, p 842:

Harman LJ said that neither professional man could

be proud of his part in the present case. The plaintiff
contended that the solicitor was negligent because he
allowed or advised the plaintiff to exchange contracts
when he knew that the plaintiff had not yet obtained a
mortgage. But there was no duty on a solicitor to
ensure that his client had obtained a mortgage before
exchanging contracts: he fulfilled his duty if he
warned the client of the risk which the client incurred.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 20 Parties) [2016] MLRHU 882

2. See Court of Appeal case, Boyce v. Rendalls [1983] vol 268

Estates Gazette p 269 at p 272:

Secondly, having advised correctly on those

contemplated arrangements, he had then drafted two
grazing agreements and both of them, for the reasons I
have indicated, were effective to bring them within the
proviso to s 2(1) of the 1948 Act. It follows, submitted
Mr Walker, that it cannot be said that Mr Pedrick was
in any way negligent. Mr Price did not seek to say that
that general approach was unsound, but he added this
rider: that, if, in the course of taking instructions, a
professional man like a land agent or a solicitor learns
of facts which reveal to him as a professional man the
existence of obvious risks, then he should do more
than merely advise within the strict limits of his
retainer. He should call attention to and advise upon
the risks. I accept that as a general proposition of
law."

[66] I have however found in para 55 above that Zul actually warned Dato'
Quek of the risk involved; verbally initially and then followed by letter dated 5
November 2007. Therefore I find and hold that the Defendants have
adequately discharged their duty as solicitors.

[67] Furthermore, I am convinced that Dato' Quek went ahead to instruct Zul
to release the payment of the balance of the purchase price regardless by
reason of Dato' Quek's zeal of wanting to enjoy the discount of RM200,000. In
the leading textbook, Jackson & Powell on Professional Negligence 5th Ed., it
is provided as follows at para 10-123:

"Duty to obey client.

The solicitor will be in breach of duty if he does not follow his client's
instructions. Indeed, it is in general the client's privilege, if he so
wishes, to mismanage his affairs. He is entitled to pursue litigation
with little prospect of success, to lend insufficient security, or to enter
an unwise bargain, if he so chooses. The solicitor has a duty to advise
on the legal hazards of the transaction, but no more..."

The cases of Toh Theam Hock v. Kemajuan Perwira Management Corporation

Sdn Bhd [1987] 1 MLRA 166; [1988] 1 MLJ 116; [1987] CLJ Rep 400 and
Tan Suan Sim v. Chang Fook Shen [1980] 1 MLRA 638; [1980] 1 MLJ 66 relied
by the Plaintiff are hence distinguishable on the facts.

[68] As to the fifth issue, Zul has testified that the receipt in question (which
was later discovered to be a forgery) came to his possession only after 20
November 2007. By that time, the discounted balance of the purchase price
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 21

was fully released to Lee Beng Choo. I accept the truthfulness of Zul's
testimony. Be that as it may, the Plaintiff did not put this material issue to Zul
during cross examination and must therefore be precluded from making an
issue of it now; see Aik Ming Sdn Bhd & Ors v. Chang Ching Chuen & Ors &
Another Appeal [1995] 1 MLRA 546; [1995] 2 MLJ 770; [1995] 3 CLJ 639;
[1995] 3 AMR 2375.

[69] In the premises, I find and hold that Messrs How Zul & Low could not be
faulted at all for having released the payment on 7 and 12 November 2007.

[70] By reason that I did not find for Dato' Quek in respect of all the five
aforementioned issues, it follows that Messrs How Zul & Low neither
breached their contractual duty nor were negligent and I so find and hold
accordingly.

[71] That being the case, it is strictly speaking unnecessary to determine

whether How was also liable to Dato' Quek by reason that he has resigned
from the firm of Messrs How Zul & Low at the material time.

[72] Nevertheless for completeness, I will briefly deal with it. Since Messrs
How, Zul & Low had been constituted as a partnership; the relevant laws are
ss 7, 11, 12, 13, 16, 19 and 38 of the Partnership Act 1961 ('Act') which read:

"7. Power of partner to bind firm

Every partners is an agent of the firm and his other partners

for the purpose of the business of the partnership; and the acts
of every partner who does any act for carrying on in the usual
way business of the kind carried on by the firm of which he is
a member bind the firm and his partners, unless the partner so
acting has in fact no authority to act for the firm in the
particular matter, and the person with whom he is dealing
either knows that he has no authority or does not know or
believe him to be a partner.

11. Liability of partners

Every partner in a firm is liable jointly with the other partners

for all debts and obligations of the firm incurred while he is a
partner; and after his death his estate is also severally liable in
a due course of administration for such debts and obligations,
so far as they remain unsatisfied but subject to the prior
payment of his separate debts.

12. Liability of firm for wrongs

Where, by any wrongful act or omission of any partner acting

in the ordinary course of the business of the firm or with the
authority of his co-partners, loss or injury is caused to any
person not being a partner in the firm, or any penalty is
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 22 Parties) [2016] MLRHU 882

incurred, the firm is liable therefor to the same extent as the

partner so acting or omitting to act.

13. Misapplication of money or property received for and in custody

of firm

In the following cases, namely -

(a) where one partner, acting within the scope of his

apparent authority, receives the money or property of
a third person and misapplies it; and

(b) where a firm in the course of its business receives

the money or property of a third person, and the
money or property so received is misapplied by one or
more of the partners while it is in the custody of the
firm, the firm is liable to make good the loss.

14. Liability for wrongs joint and several

Every partner is liable jointly with his co-partners and also

severally for everything for which the firm while he is a
partner therein becomes liable under s 12 or 13.

16. Persons liable by holding out

Every one who by words spoken or written or by conduct

represents himself, or who knowingly suffers himself, to be
represented, as a partner in a particular firm is liable as a
partner to any one who has on the faith of any such
representation given credit to the firm, whether the
representation has or has not been made or communicated to
the person so giving credit by or with the knowledge of the
apparent partner making the representation or suffering it to
be made:

Provided that where, after a partner's death, the partnership

business is continued in the old firm-name, the continued use
of that name or of the deceased partner's name as part thereof
shall not of itself make his executor's or administrator's estate
or effects liable for any partnership debts contracted after his
death.

19. Liability of incoming and outgoing partners

(1) A person who is admitted as a partner into an existing firm

does not thereby become liable to the creditors of the firm for
anything done before he became a partner.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
[2016] MLRHU 882 Parties) pg 23

(2) A partner who retires from a firm does not thereby cease to
be liable for partnership debts or obligations incurred before
his retirement.

(3) A retiring partner may be discharged from any existing

liabilities by an agreement to that effect between himself and
the members of the firm as newly constituted and the
creditors, and this agreement may be either express or inferred
as a fact from the course of dealing between the creditors and
the firm as newly constituted.

38. Rights of persons dealing with firm against apparent members of

firm

(1) Where a person deals with a firm after a change in its

constitution, he is entitled to treat all apparent members of the
old firm as still being members of the firm until he has notice
of the change.

(2) An advertisement in the Federal Gazette as to a firm

whose principal place of business is in Peninsular Malaysia, in
the Sabah Gazette as to a firm whose principal place of
business is in Sabah, and in the Sarawak Gazette as to a firm
whose principal place of business is in Sarawak, shall be
notice as to persons who had not dealings with the firm before
the date of the dissolution or change so advertised.

(3) The estate of a partner who dies or who becomes bankrupt,

or of a partner who, not having been known to the person
dealing with the firm to be a partner, retires from the firm, is
not liable for partnership debts contracted after the date of the
death, bankruptcy, or retirement respectively."

[73] On the facts herein, How resigned from Messrs How Zul & Low on 31
October 2007 as per the Bar Council records. That notwithstanding by virtue
of ss 12, 14 and 19(2) of the Act, he is nevertheless liable for the wrongs
committed by the firm before his retirement; see Leong Sing v. Perusahaan
Kuari (Melaka Pindah) Sdn Bhd & Another Case [1996] 3 MLRH 140; [1997] 5
MLJ 657; [1997] 1 CLJ 307 but not thereafter provided that a notice of his
retirement has been served on Dato' Quek. In this regard, How could not
escape liability notwithstanding that he had no knowledge whatsoever of the
Land transaction whatsoever by reason that his partner Zul involved the firm
in the course of its ordinary business.

[74] However there is no evidence adduced that Dato' Quek has received any
notice of How's retirement pursuant to s 38(1) of the Act. Thus I find and hold
that How would be liable to Dato' Quek if the firm is found liable for breach of
contractual duty or negligence.
 Quek Wan Hong
v. Zulkifli Zabidin & Ors; Tok Hoon Kiang & Ors (Third
pg 24 Parties) [2016] MLRHU 882

[75] Since I have found that the firm isn't liable to Dato' Quek, consequently
the third party action against Low becomes unnecessary and unsustainable.

Conclusion

[76] This is a unique land conveyancing transaction where the client chose not
to heed the advise and warning of his solicitor of the inherent risks of his
intended actions. The client plainly wanted to capitalize on what he perceived
to be an awesome bargain. The land deal was a hazardous one to begin with
and the inherent risks actually eventuated. It seems to me that the solicitor was
appointed merely to attend to the administrative tasks such as the preparation
of the sale and purchase agreement and attestation of the transfer form 14A as
prescribed by the National Land Code.

[77] Notwithstanding that I have found in favour of the Defendants, all is not
lost for the Plaintiff. The Plaintiff should have a viable cause of action against
Lee Beng Choo at all material times, at least for breach of contract and total
failure of consideration and I am surprised that such an action was not
pursued in the first instance since the wrong was principally perpetrated by
him.

[78] Be that as it may and for the foregoing reasons, I dismiss the Plaintiff's
claim with costs of RM 30,000 to the First and Third Defendants collectively
and RM 15,000 to the Second Defendant.

[79] I also dismiss the third party action brought by the First and Third Party
against the Second Third Party with no order as to costs since the Second
Third Party was necessarily brought in due to his involvement with the
Plaintiff in the Land transaction.