[2021] 5 MLRA 704

Court of Appeal, Putrajaya
Mohamad Zabidin Mohd Diah, Vazeer Alam Mydin Meera, Mohd Sofian Abd Razak JJCA
[Civil Appeal No: W-02(NCC)(W)-127-01-2020]
16 April 2021


Mohd Sofian Abd Razak JCA:


[1] This is the appellant/defendant's appeal against the decision of the High Court after a full trial in allowing the respondent/plaintiff's Claim as per prayer (1)(a), (b) and (c), prayer (ii) of para 15 of the Statement of Claim with costs of RM25,000.00 subject to allocatur.

[2] For ease of reference, parties will be referred to as they were in the proceedings before the High Court.

[3] Having considered the appeal records and the submissions of the parties in the appeal, it is our unanimous decision that the appeal is allowed with costs. We now give our reasons for the same.

Background Facts

[4] The plaintiff was the branch partner of the law firm M/s Paul Cheah & Associate ('the Firm') located at Port Klang from 14 July 2006 to 30 June 2008 ('Port Klang Branch'). The defendant, was also a partner in the Firm. Both plaintiff and defendant had entered into a branch Partnership Agreement dated 14 July 2006 ("the Agreement").

[5] Under cl 19.1 of the Agreement, it is stated that "the Law Firm/Principal Owner shall at all material times indemnify the Branch Partner against all losses, damages, actions, negligence suit or any form of legal proceedings taken against the Partnership in respect of or any action arising from the Kuala Lumpur, Subang Jaya, and Klang branches whether by its staff or legal assistants (if any)."

[6] The plaintiff has withdrawn his partnership with the Firm on 30 June 2008 after giving due notice to the defendant as a principal owner of the Firm and also to the Malaysian Bar Council secretariat.

[7] However, without the knowledge of the plaintiff, on 25 January 2011, Public Bank Berhad ('the Bank') sued the Firm at the Kuala Lumpur High Court in Civil Suit No D-22NCC-165-2011 ("Suit No 165") for loss and damages arising from a fraudulent and or negligent act by one Frankie Tan Lyn Seang ('Mr Frankie Tan'), a partner in the Firm's Kuala Lumpur branch ('KL Branch'). The Bank subsequently obtained judgment against the Firm for the sum of RM561,413.02 with interests and costs of RM180,000.00 ('the Judgment Sum'). The plaintiff was not notified, nor added, nor served with cause papers or even called as a witness to the Suit No 165.

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