©The
Star Online (Used by permission)
by Nicholas Chang Chen Seng
WHO does a solicitor represent?
It is not untypical for only one
solicitor to act in a transaction for the sale and purchase of
property. But who does the solicitor act for? The buyer or the seller
or, both? Parties to such transactions may often be confused as to who
the sole solicitor acts for. However, it is not this issue that we are
examining in this article.
Instead, we would be looking into
these: If the solicitor acts only for one party, say, the buyer, does
he owe a duty of care to the seller? Indeed, does he owe a duty of care
to any other person affected by the transaction?
Any duty owing to a non–client?
This interesting question was
thoroughly considered in the recent Federal Court case of Pushpaleela
a/p R Selvarajah & Anor v Rajamani d/o Meyappa Chettiar and other
appeals, 2019 (Rajamani’s case).
A simplified synopsis of answers by
the Federal Court to the question would be:
> A solicitor does not owe a duty
of care to a non–client save for instances of disappointed
beneficiaries under a will.
An example of the latter would be the
negligence of a solicitor in preparing a will instructed to confer a
property to an intended beneficiary, and the negligence of the
solicitor deprived the intended beneficiary of the intended benefit.
> A solicitor does not owe a duty of care to a person not known or foreseen by him related to the transaction. This was the crux of Rajamani’s case.
In that case, a fraudster represented herself as the owner of a land, sold the land and engaged a solicitor to act for her in the sale. The solicitor did not know of the fraud.
Clearly, as well, the real owner did not engage the solicitor for the transaction, as she was unaware of the sale.
In this case, a solicitor for the fraudster did not owe a duty of care to the real owner, because she was the fraudster’s solicitor and not the real owner’s solicitor and also the solicitor had no knowledge whatsoever of the real owner’s existence.
> However, a solicitor may owe a duty to a counter party to a transaction if (a) he has voluntarily assumed a duty to such a party and (b) the reliance by that counter party was reasonable.
An example of this is where a solicitor represents to a counter party to a property sale agreement, who has elected not to retain the services of a solicitor to represent him, that he, the said solicitor, is personally acquainted with the seller and assures the buyer that the seller is in fact who he is and is the actual owner of the land being sold, then in this unique set of facts, the solicitor might be found to owe a duty of care to that non–client.
What is the extent of the duty?
On the assumption that a duty of care can be established, the next step is to ascertain the extent of that duty.
In layman’s terms this means, in the eyes of the law, the degree of attention, prudence or caution expected from the solicitor when performing his duty.
In a recent Federal Court decision of John Lee Tsun Vui, 2017, it was held that the standard expected of a solicitor would be what is expected of a reasonably competent solicitor having regard to the standards normally adopted in the profession.
The test is not what a perfect solicitor would do but one of a reasonable solicitor.
To borrow the words of another Court of Appeal decision in Ngan Siong Hin v RHB Bank Bhd, 2014 the test is to evaluate the conduct of the solicitor based on the practice in “vogue” at that material time.
Perfect vision on hindsight is not the test. For instance, if tomorrow, physical verification of a person becomes available online, one cannot use such technological advancement to determine an issue that happened today.
It’s also material to consider that the existence of red flags or facts that might only invite a perfect solicitor to pursue the matter further does not mean that that will be the standard expected of a reasonable solicitor or, for that matter, the standard expected by the law.
What to do?
A prudent consumer should always consider retaining separate independent legal representation and to pay the appropriate fees to ensure his interest is preserved by a proper and competent professional. After all, as the old English adage goes: “When you pay peanuts, you get monkeys.”
Nicholas Chang Chen Seng, a lawyer practising at Messrs Amir, Lim & Partners is a member of the Conveyancing Practice Committee, Bar Council, Malaysia.