1. Dato’ Ong Jyh Jong v Valencia Development Sdn. Bhd. (22-68-2009)

DATO‟ ONG JYH JONG

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LIM HONG TAT …. PLAINTIFFS AND VALENCIA DEVELOPMENT SDN. BHD. .… DEFENDANT GROUNDS OF JUDGMENT (After full trial) 2 BACKGROUND FACTS [1] The present case is relatively an uncomplicated case. Though laced with a number of technical issues, the present case is simply a claim for specific performance by the Plaintiffs against the Defendant in enforcing an alleged agreement or agreements which the Plaintiffs claim to have been entered into with the Defendant. [2] All the Plaintiffs collectively are prospective purchasers to the Defendant‟s residential development in Sungai Buluh also known as “Valencia Development”. This development was later named as the SOHO Residences consisting of 28 units of 3 storey terrace houses. It was these residences which the Plaintiffs were interested in purchasing (“properties”). [3] The Defendant is a private limited company incorporated in Malaysia under the Companies Act 1953 which undertook the residential development project in building and selling the properties. [4] Originally there were ten Plaintiffs initiating this civil suit against the Defendant, however later the 6th, 7th, 9th and 10th Plaintiffs had 3 withdrawn their suit and hence, the trial of this action is only with regards to the 1st Defendant (Dato” Ong Jyh Jong), 2nd Defendant (Goh Ching Chee), 3rd Defendant (Ho Chai Yoong), 4th Defendant (Go Lee Bin), 5th Defendant (Lily Neo) and 8th Defendant (Lee Kong Foo). All the six Plaintiffs who have proceeded with this action shall hereinafter in this judgment be referred as “the Plaintiffs”. [5] In pursuit of their interest to purchase, the Plaintiffs (except the 3rd Plaintiff) have each issued the Appointment Letters (“1st Appointment Letters”) on different dates in 2006 to the Defendant vide their Appointment as Solicitors Letters addressed to Swan & Partners (“Swan”). However, the 2nd and 3rd Plaintiffs have later authorised Swan to act on their behalf vide their Purchase Application Form. (See pages 1 to 12 and 97 to 98 of Bundle B1 for the relevant 1st Appointment Letters and Purchase Application Forms). [6] These 1st Appointment Letters all echo similar terms across all the properties and parties involved. The salient terms of the 1st Appointment Letters are reproduced here: 4 “I/We wish (in the present case, the Plaintiffs) however, to irrevocably appoint and authorise you (in the present case, Swan) as my/our solicitors to:- a) grant to the Developer (in the present case, the Defendant) an Option valid until August 2006 (“Option Period”) to accept my/our irrevocable offer to purchase the said Property from the Developer at the selling price not exceeding RM546,840 (“Option”) on the terms and conditions as discussed and explained by you to me/us; b) grant to the Developer an automatic extension period of three (3) months from the date of expiry of the Option Period (“Extension Option Period); c) accept from me/us an earnest deposit of RM30,000.00 only (“Earnest Deposit”) as stakeholders to be placed in an interest bearing deposit with a financial institution of your choice to the credit of my/our account pending the exercise of the Option by the Developer; 5 d) pay the Earnest Deposit together with the accrued interest to the Developer if and when the Developer exercises the Option and accepts my/our offer to purchase the said Property” [7] A plain reading of the terms above would easily reveal that the Option (“1st Option”) given by the Plaintiffs to the Defendant to exercise an option/election to sell if so the Defendant indeed opted to accept the Plaintiff‟s offer. [8] From the outset, it must be noted that the configuration of the Options in this case is verily peculiar and different to the masses of Options which had reached the Courts for determination. The 1st Options in the present case rather than granting the purchaser an option/election to purchase instead grant the vendor an option/election to sell. [9] Swan on different dates in 2006 after the 1st Appointment Letters were issued, has issued options the 1st Options on behalf of the 6 Plaintiffs confirming that Swan acts for the interested purchasers (the Plaintiffs), that the Plaintiffs vide Swan grants to the Defendant options/election to sell, and also that the Earnest Deposit of RM30,000.00 (“sum”) has been paid to Swan as stakeholders. The letters all similarly read (see pages 13 – 15 and 16 – 18, 183 – 185, 186 – 188, and 189 – 191 of Bundle B1 for the 1st Options): “We act for (insert relevant Plaintiff) who are interested in purchasing (insert relevant property) comprised in the housing development in Valencia, Sungai Buloh. We are pleased to inform that an earnest deposit of Ringgit Malaysia Thirty Thousand (RM30,000.00) only … has been deposited by our client with us stakeholders.” [10] However, as far as the payment goes, there is only proof of payment of the RM30,000.00 sum to the Swan as stakeholder. It remains undisputed that there is no proof that the RM30, 000.00 sum held by Swan was consequently paid with interest accrued to the Defendant. 7 [11] The salient terms and conditions of the 1st Options issued by the Plaintiffs to the Defendant are: “We act for (insert relevant Plaintiff) who is interested in purchasing a unit of SOHO RESIDENCES… We are pleased to inform you that…with instructions…to irrevocably grant you an option to accept our client’s offer to purchase…upon the terms and subject to the conditions set out hereunder 1) This Option may be exercised by you (in the present case, the Defendant)… 2) The Option may be exercised by you issuing to us (in the present case, Swan) for our client (in the present case, the Plaintiffs) in writing hereinafter referred to as “the Notice of Exercise of Option”… 8 [12] Furthermore, it must be noted that the Plaintiffs has owned up and acknowledged all the representations made by Swan in the 1st Options. The Plaintiffs has never shown or expressed any disagreements against the representations of the 1st Options, particularly to the representation that Swan acts for the Plaintiffs. [13] After the expiry of the 1st Option, on 8.6.2007, the Defendant issued a letter to Swan informing of the expiration and enquired of the Plaintiffs would issue a fresh Option if they were still interested to purchase the properties. (See page 21 of Bundle B1). [14] The Plaintiffs in turn, acknowledged as well as admitted the 1st Option‟s expiration and consequently issued fresh appointment letters (on different dates around September 2007) authorising Swan to act as their solicitors and to grant the Defendant a fresh Option (“2nd Appointment Letters”). The terms and content of the 2nd Appointment Letters are similar to the 1st Appointment Letters. (See pages 22 – 25, 28 – 31, and 34 – 39 of Bundle B1 for the 2nd Appointment Letters). 9 [15] For the 2nd time around, the Plaintiffs issued fresh Options around November 2007 (“2nd Options”) confirming that Swan acts for the Plaintiffs and that following the earlier payment of RM30,000.00 sum, the Plaintiffs has paid the Earnest Deposit to Swan as a stakeholder before and pending the Defendant‟s exercise of the 2nd Options. The terms of these 2nd Options are similar to that of the 1st Options. (See pages 40 – 54, 58 – 60, and 196 – 198 of Bundle B1 for the 2nd Options). [16] Similar to the 1st Options, it must be noted that the Plaintiffs had owned up and acknowledged all the representations made by Swan in the 2nd Options. The Plaintiffs had never shown or expressed any disagreements against the representations in the 2nd Options, particularly to the representation that Swan acts for the Plaintiffs. [17] However, against the 2nd Options the Defendant has expressly rejected the 2nd Options. The Defendant vide its letter dated 17.6.2008 has informed Swan that it is unable to accept the Plaintiffs‟ 2nd Options and therein suggested Swan to advise their clients (the 10 Plaintiffs) to withdraw their offers. The main passage of the letter is reproduced below for convenience (see page 64 of Bundle B1): “We write to inform that we are unable to accept your Client’s offer to purchase a unit in the abovementioned Phase… In the circumstances, you may wish to advise your Clients to withdraw their offer to us.” [18] Consequently, Swan has issued letters informing the Plaintiffs of the Defendant‟s rejection and also the refund of the RM30,000.00 held by Swan as stakeholder for the Plaintiffs (“Refund Letters”) (see pages 65, 67, 70, 71, 74, 80, and 86 of Bundle B1 for the Refund Letters). [19] A few months following the refund, the Defendant has invited the Plaintiffs to the pre-launch of the properties in November 2008. Suddenly, after the pre-launch, the Plaintiffs on different dates in December 2008 has fallen back to the 1st Options, and issued cheques of to the amount of 10% of the prices indicated in the 1st Options vide Chur & Associates, the Plaintiffs‟ other solicitors at that point in time. The Defendant has returned all of the cheques sent on 11 the grounds that the cheques are insufficient as they are based on the 1st Options which have already lapsed and were not exercised by the Defendant. Following this refusal by the Defendant is the Plaintiffs‟ cause of action for specific performance to order the Defendant to honour their so-called obligations under the 1st and 2nd Options (“Options”) which the Plaintiff claims to be a binding agreement. PLAINTIFFS‟ CASE [20] The Plaintiffs‟ case is simply that: a. The Plaintiffs are allegedly the receivers of the Options and the option-holders. b. As the alleged option-holders, the Plaintiffs have exercised the 1st Option and alternatively the 2nd Option upon allegedly furnishing valuable consideration (in the RM30,000.00 sum payment) to the Defendant. The payment of the RM30,000.00 12 sum shall be deemed as a deposit or alternatively a booking fee paid to the Defendant. c. Swan is actually the alleged solicitors acting for and/or on behalf of the Defendant and thus holds the RM30, 000.00 sum as stakeholders for the Defendant. d. Upon the Plaintiffs‟ alleged exercise of the Options, the Options now allegedly become binding agreements in which the Defendant must perform upon attaining the Advertisement Permit and Developer‟s License (“APDL”) under the Housing Development (Control and Licensing) Act 1966 and the Housing Development (Control and Licensing) Regulations 1989. e. The Defendant owes the duty to perform their alleged obligations under the alleged agreements to the Plaintiffs. DEFENDANT‟S CASE 13 [21] On the contrary, the Defendant‟s case is simply that: a. The Defendant is allegedly the receivers of the Options and the option-holders. b. As the option-holders, the Defendant has never exercised the Options which were granted by the Plaintiffs. c. The payment of the RM30,000.00 sum was never paid to the Defendant, but instead was only paid to Swan as the Plaintiffs‟ stakeholder. d. The payment of the sum to Swan as the Plaintiffs‟ solicitor cannot in any manner be deemed an exercise of the Options particularly considering that the Plaintiffs are not the option-holders. e. The payment of the sum is not at any material time a deposit or booking fee allegedly paid to the Defendant. The payment of 14 the sum to the Plaintiff‟s own stakeholder is not a valuable consideration furnished to the Defendant. f. Swan is actually the alleged solicitors acting for and/or on behalf of the Plaintiff and thus holds the RM30,000.00 sum as stakeholders for the Plaintiff. g. The Options were never exercised and thus, have never elevated to be Agreements. The attainment of the APDL is never a condition precedent to any contract as there is no contract to begin with. h. The Defendant never owes any duty to perform any obligations as there has never been any conclusion of a binding contract between the parties. [22] Upon the stances of the parties above, the pivotal issues to be determined can be encapsulated in the following issues: 15

Which party is the option-holder as under the Options? i. which party may exercise the Options?

Are the Options binding as Agreements? i. To whose benefit did Swan held the sum for as stakeholder? ii. Are the payments of the sum a proof of an exercise of the Options escalating the Options into Agreements? ISSUE (a): WHICH PARTY IS THE OPTION-HOLDER AS UNDER THE OPTIONS? [23] It is noted that the majority of the parties‟ submission is on the payment of the sum and whether the payment of the sum becomes proof of a binding Agreement. [24] This question goes along the assumption that the option-holders are the Plaintiffs, which this Court at this juncture has yet to make a 16 finding over. Thus, the more pertinent question to be determined is which of the parties is/are the option-holder(s) based on the Options. [25] It must be noted that the documents referred by the Plaintiffs as agreements, and by the Defendant as Options are indisputably and ultimately Options. The Plaintiffs‟ case is that these Options have been exercised by the Plaintiffs as the alleged option-holder. In fact, the Plaintiffs themselves have relied on a barrage of authorities in arguing that the conferment of consideration escalates an Option into a binding agreement. Thus, this Court is of the view that it is unnecessary for the Court to delve deeply in defining the documents when all parties have already agreed that the documents are essentially Options. A plain reading of the Options and all other masses of contemporaneous documents would reveal that both parties agree that the documents are indeed Options. The clear designation and stipulation of the Options and Appointment Letters 17 [26] It is unnecessary actually for this Court to go beyond the written terms of the Options to determine the intended option-holder. The words from the 1st and 2nd Appointment Letters and the Options are clear without any shade of ambiguity. Amidst all of the Plaintiffs‟ contentions on the argument that the Plaintiffs are the option-holder, merely because allegedly the Plaintiffs have paid a deposit sum, the clear terms and wordings of the Options and Appointment Letters does not beckon the Court‟s attention to even consider anything else besides the Options and Appointment Letters. The relevant term in the Options is reproduced here: “I/We wish (in the present case, the Plaintiffs) however, to irrevocably appoint and authorise you (in the present case, Swan) as my/our solicitors to:- a) grant to the Developer (in the present case, the Defendant) an Option valid until August 2006 (“Option Period”) to accept my/our irrevocable offer to purchase the said Property from the Developer at the selling price 18 not exceeding RM546,840 (“Option”) on the terms and conditions as discussed and explained by you to me/us; b) grant to the Developer an automatic extension period of three (3) months from the date of expiry of the Option Period (“Extension Option Period); [27] In coherence to the Appointment Letters, the relevant term of the Options are reproduced here: “We act for (insert relevant Plaintiff) who is interested in purchasing a unit of SOHO RESIDENCES… We are pleased to inform you that…with instructions…to irrevocably grant you an option to accept our client’s offer to purchase…upon the terms and subject to the conditions set out hereunder 1) This Option may be exercised by you (in the present case, the Defendant)… 19 2) The Option may be exercised by you issuing to us (in the present case, Swan) for our client (in the present case, the Plaintiffs) in writing hereinafter referred to as “the Notice of Exercise of Option”… [28] There is no room for a single inkling of doubt to the probability of the Defendant‟s case that indeed the option-holder is the Defendant and not the Plaintiffs. The Appointment Letters and the Options clearly show that the movement of the Options is from the Plaintiffs (as grantors) to the Defendant (grantee and option-holder) which the Defendant may later exercise the Options. [29] This Court is guided by the case of Syarikat Binaan Utara Jaya ( A Firm) v Koperasi Serbaguna Sungei Glugor Berhad [2009] 2 AMR 50, Abdul Malik Ishak, JCA from the available authorities had in para 17 of the Court of Appeal‟s judgment, with regard to construction of a contract where the language employed is clear, has made the following propositions: 20 “(a) the Court must give effect to the plain meaning of the words, no matter how distasteful the result may be (The Central Bank of India Ltd. Amritsrar v. The Hartford Fire Insurance Co. Ltd. [1965] AIR Vol. 52, 1288 SC);

where the language in the document is unambiguous and clear, the real nature of the document is to be determine solely by looking at its contents, uninfluenced by any intention of the parties ((Nawab Major Sir) Mohammad Akbar Khan v. Attar Singh and Others [1936] AIR Vol. 23, 171 PC);

when the minds of the parties are expressed in an unambiguous manner, the Court cannot override the declared intention of the parties unequivocally expressed (K. Appukuttam Panicker and Another v. S.K.R.A.K.R Athappa Chettiar and Others [1966] AIR Vol.53, 303 Kerala); and

there is no scope, at all, for drawing upon hypothetical considerations or the supposed intention of the parties when the words contained in the contract are clear and unambiguous (The Union of India v. Kishorilal Gupta and Bros. [1959] AIR Vol. 46, 1362 SC).” 21 Furnishing consideration does not determine or identify the option-holder [30] The Plaintiffs albeit fallible, have attempted to argue that the payment of consideration of a party determines or identifies that party as the option-holder. In attempting so, the Plaintiffs referred to the Federal Court decision in Subramaniam Chettiar & Ors v JC Chang Ltd [1969] 2 MLJ 176 (FC). However, in reading and examining this decision, it is this Court‟s considered view that the preposition given by the Plaintiff is not at all the principle which was upheld in Subramianiam Chettiar‟s case. The Plaintiffs‟ feeble contention hinges on this passage: “If the option is not by deed, therefore, the grantee of the option must give some consideration quite apart from anything which he may have to do should he exercise the option” [31] Respectfully, preposition afforded by the Plaintiffs is an incorrect or a misconceived interpretation of the case which is taken out of the 22 actual context of the decision. The principle in this case does not dictate that the option-holder must be the party who has given valuable consideration. This was not the principle propounded in this case at all. [32] What was really held was only that a grantee must give valuable consideration in order to make the option a binding contract. It does not at all lay down a precedent of a standard or a set configuration that a party giving consideration is automatically the grantee/option holder. [33] This Court is of the considered view that merely being the party furnishing consideration does not automatically assigns that party in the shoes of the grantee/option-holder. It is up to the parties to an option to dictate the terms of the options. And evidently so, the construction of the option is clearly that the Plaintiffs/prospective purchaser granting the Defendant/vendor an option which is an election to sell within a stipulated time. 23 [34] It must be noted that the configuration of the Options in the present case is rather peculiar and different from normal Options. It is already clearly agreed by the parties in the present case that the grantor (the Plaintiff) is the party furnishing the RM30,000.00 sum. The case of Subramaniam Chettiar should be distinguished from the present case. [35] In fact, the case of Subramaniam Chettiar is by far, verily distinguishable with the present case. The illustration which forms the fulcrum of the Federal Court‟s decision in the case referred, is thoroughly different from the present case. The illustration given there was: A (vendor/grantor ie. the Defendant) agrees with B (purchaser/grantee ie the Plaintiffs), upon B paying monies as consideration to A, B is entitled to exercise the option within one month to inform of B‟s election to purchase and inform of B‟s election to A. 24 However, the present case‟s option is indeed different: B (purchaser/grantor) agrees to give A (vendor/grantee) an entitlement of option/election to sell to B within one month time in which B may exercise the option to elect to sell or otherwise. [36] The Subramaniam Chettiar case stipulates that the principle propounded in that case is for a case: “of an option for valuable consideration to purchase, the matter is altogether out of the vendor’s hand” [37] This is a case (Subramaniam Chettiar‟s case) applicable to an option to purchase which is verily different from the present case where the vendor (the Defendant) was granted an option to sell. Thus, it is clear here that the Federal Court decision in Subramaniam Chettiar, is distinguishable and should be distinguished in the present case. Admission of Plaintiffs‟ own witness on the designation of the Option-holder 25 [38] Even the Plaintiffs‟ own witness (PW8, Tan Chur Pin of Chur & Associates) has contradicted the Plaintiffs‟ case and admitted that the option was granted to the Defendant and that the option-holder is indeed the Defendant. PW8 is one of the Plaintiffs‟ own solicitors. The relevant excerpt of PW8‟s admission and contradiction is reproduced below: “Q. Do you agree that based on this letter, an option is granted by Dato’ Ong to the developer? Yes So, do you agree with me, based on your earlier testimony, that the developer would be termed, in commercial terms, the option holder? Yes” The illogicality of an option-holder issuing and receiving an option against himself [39] It is undisputed here that upon the expiration of the 1st Option, the Plaintiffs upon enquiry have issued the 2nd Option. This particular issuance of Options makes no logical or commercial sense if the 26 Court were to accept that the Plaintiffs are the option holders (which this Court does not accept). The rhetorical question then would be „why would an option-holder be asked to issue a fresh option and issued a fresh option to his or her own self?‟ It does not make sense that a person receiving the option is the same person who is granting the option. Hence, this adds to the improbability of the Plaintiff‟s case in this regard. COURT‟S FINDINGS ON ISSUE (a) [40] The option is exercisable when the Defendant exercises the option. Unilaterally paying the deposits to their own solicitor does not actuate the exercise of the Option to any extent. [41] In view of the above, it is this Court‟s considered view that the option holder under the Options is without a doubt is the Defendant. Thus, the only party which would hold the option to exercise the Options is the Defendant and not at any point in time the Plaintiffs. ISSUE (b): ARE THE OPTIONS BINDING AS AGREEMENTS? 27 [42] The parties‟ contentions on the effect of the Options revolve around the question whether or not the Options have been exercised. Particularly on the payment of the RM30, 000.00 sum to Swan. [43] Nonetheless, this Court it must be noted that entailing from the earlier finding that the Defendant is the option holder, from to outset the Plaintiffs can no longer contend that the payment of the sum to Swan is proof of the Plaintiffs‟ exercise of the Options. The Plaintiffs are not the option holder and thus, are not in any position to exercise the Options. [44] Nonetheless, for the sake of completeness, this Court shall still delve into the documents and the submissions of the parties. Specific manner of exercising the Options: absence of proof of exercise [45] Amidst the contentions regarding the payment of the sum being a proof of exercise of the Options, it is more relevant and proper for this 28 Court to examine the documents which entail the relationship of the parties which are the Options. [46] A simple and plain reading of the Options which even the Plaintiffs themselves intend to enforce, would already reveal that there is a specific manner in which the Defendant must adhere to if it intends to exercise the Options. “2) The Option may be exercised by you issuing to us (in the present case, Swan) for our client (in the present case, the Plaintiffs) in writing hereinafter referred to as “the Notice of Exercise of Option”…” [47] The terms of the Options and Appointment Letters are mutually agreed, in full volition of the parties. No party particularly the Plaintiffs, who granted the Options, should be allowed to feign ignorance that they do not understand the Options and its content at the time it was signed. 29 [48] This Court is taken aback by the bold contention of the Plaintiffs in their testimony that they readily admit that they did not read the Options and Appointment Letters when signing the documents. It is a steady stance which is reflected in all of the Plaintiffs‟ witnesses. [49] However, this Court cannot protect and condone such lackadaisical and ignorant attitude towards a signed written document. It would be unbecoming if this Court would allow signatories to excuse themselves from the covenants agreed and contained in a document merely because of their own ignorance to understand and read what they are signing even after affording the opportunity to read understand the covenants. [50] The Appointment Letters and the Options were handed to the Plaintiffs. Albeit if it is a standard operating procedure or not, it does not negate the fact that before the signing of the Appointment Letters and Options, the Plaintiffs are at liberty to read, scrutinize and understand the content of the documents. And upon the same liberty, the Plaintiffs should read and understand the content. Signing 30 the documents indicates agreement and understanding of the Plaintiffs to the contents of the documents. [51] This Court is guided by the decision of Gill J in Subramaniam v Retnam [1966] 1 MLJ 172 referred to by the Defendant: “For my saying so I find support in the following statement of the law. with which I respectfully agree, in the judgment of Wood Ag. C.J., in Ismail bin Savoosah & Ors v Hajee Ismail: “It was argued that the defendant being ignorant of the English language he is to be excused on that account from the performance of his contract, but it is to my mind clear that in the common principles which govern the law of contract, the person who contracts by a written document, whether or not he understands the language in it is written, is bound, in the absence of fraud and misrepresentation, by the terms of that contract,…”(emphasis added) [52] This Court will also refer to two other cases relating to this issue. In the case of Chai Then Song v Malaysia United Finance Bhd [1993] 2 CLJ 640, James Foong J (as he then was) held inter alia: 31 [1] A person who chose to be careless, or not bothered to find out the contents of a document, or who relied completely upon others to complete the same, is responsible for his own actions and he is prevented from denying that the contents of the document do not bind him. [53] James Foong J in Chai Then Song’s case had referred to the House of Lords’ decision in the case of Saunders v Angelia Building Society [1971] AC 1004. At page 642 of his judgment James Foong J had said this: “Now turning to the fundamental point on this issue of the appellant executing on a Deed of Guarantee with relevant parts therein left blank and, where this similarly applies to the Hire Purchase Agreement the learned Magistrate relied on the case of Saunders v. Angelia Building Society [1971] AC 1004. This case is better known as Gallie v. Lee, a House of Lords decision which held that: A person who signs a document parts with it so that it may come into other hands, has a responsibility, that of a normal man of prudence, to take care what he signs, which, if neglected, prevents him from denying his liability under the document according to its tenor.” 32 [54] The Court of Appeal in the case of Wee Lian Construction Sdn Bhd v Ingersoll-Jati Malaysia Sdn Bhd [2010] 4 CLJ 203, Abdul Malik JCA in supporting Low Hop Bing JCA‟s judgment (delivering the judgment of the Court of Appeal) at paragraphs 35, 36 and 37 had said: “[35] The purchase order was signed and accepted by the plaintiff and at the bottom left side of the said purchase order the following caption appeared: We have read and agreed to the sales conditions stated overleaf. [36] That would seal the fate of the plaintiff. In L’Estrange v F. Graucob, Limited [1934] 2 KB 394, at p.403, Scrutton LJ aptly said and which would surely apply to the plaintiff: When a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not. [37] Thus, a person who signs a contractual document is bound by its terms even though he has not read it......” (emphasis added) 33 [55] The Plaintiffs in the present case cannot now come to this Court and assert that they did not read the documents at all, are ignorant of the terms of the documents which are in English language, were misrepresented of the terms of the documents and do not understand the contents the Appointment Letters / Options which were handed to them. Even more so, considering the Plaintiffs‟ backgrounds which are itemised below: 1st Plaintiff - Chief Executive Officer of ABBDA Aviation Corporation (who had previously bought properties from the Defendant). 2nd Plaintiff - the 3rd Plaintiff‟s husband. He retired early to help the 3rd Plaintiff to run their Real Estate Agency. 3rd Plaintiff - Principal of a Real Estate Agency (Both the 2nd and 3rd Plaintffs had also previously bought properties from the Defendant) 4th Plaintiff-Interior Designer and Consultant (Both 4th Plaintiff and her husband had also previously bought properties from the Defendant) 34 5th Plaintiff - Housewife. 5th Plaintiff „s Witness Statement is in English Language and during the trial she gave evidence in English. 8th Plaintiff - Regional Manager of ATNT Worldwide. Note: The Plaintiffs at the trial gave evidence in English Language. [56] Undoubtedly, it can be safely stated that the Plaintiffs are not individuals who lack understanding of the English language and were uneducated. [57] Thus, even at this early juncture the Plaintiffs‟ contention has already indeed failed. The Plaintiffs‟ case wholly rest on the alleged exercise of the Options vide the payment of the sum to Swan. This is clearly not the supposed manner and proof of exercise of the Options as prescribed by the term of the Options reproduced above. Who does Swan act as solicitors for? 35 [58] For the sake of completeness, this Court shall further indulge on the payment of the sum and its real effect on the Options. Ultimately, it matters not to what direction does the stone turns, it still stands that the payment of the sum to Swan is never a proof of exercise of the Options. [59] As the undisputed fact is that Swan holds the sum as a stakeholder, it is pertinent first, to determine who does Swan act for. Only then it is proper to identify whether the payment of the sum is proof of an exercise or otherwise. Documents regarding Swan‟s Appointment [60] Since the relationship of the parties is largely defined based on written documents, it is appropriate to first look into the terms of the documents. a. The Appointment Letters All of the Appointment Letters contain the following passage: 36 “I/We wish (in the present case, the Plaintiffs) however, to irrevocably appoint and authorise you (in the present case, Swan) as my/our solicitors to:-“ b. The Options All of the Options contain the following term: “We act for (insert relevant Plaintiff) who is interested in purchasing a unit of SOHO RESIDENCES… We are pleased to inform you that…with instructions…to irrevocably grant you an option to accept our client’s offer to purchase…upon the terms and subject to the conditions set out hereunder” [61] It must be noted that all of the Options and Appointment Letters were copied to the Plaintiffs. Not even once have any of the Plaintiffs wrote to protest or deny the representation made by Swan. If indeed the Plaintiffs are verily sure that Swan is not their solicitors, then common 37 sense would have it that they should have protested against it. The Plaintiffs cannot now have a change of hearts and turn against their own acknowledgment. [62] This Court is guided by the decision of Federal Court in the case of Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331. The Federal Court in this case had referred to Lord Denning‟s decision in the Amalgamated Investment case which reads: “The width of the doctrine has been summed up by Lord Denning in the Amalgamated Investment case (at p 122) as follows: The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with case. That is why I have not gone through them all in this judgment. It has evolved during the last 150 years in a sequence of separate developments: proprietary estoppel, estoppel by representation of fact, estoppel by acquiescence, and promissory estoppel. At the same time, it has been sought to be limited by a series of maxims: estoppel is only a rule of evidence, estoppel cannot give rise to a cause of action, estoppel cannot do away with the need for consideration, and so 38 forth. All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on the assumption when it would be unfair or unjust to allow him to do so.” (emphasis added) [63] Similarly, the Plaintiffs cannot feign ignorance to the clear terms of the Options and Appointment Letters. See the Subramaniam Chettiar case. Admission by Plaintiffs‟ own witness [64] It is unsurprising at this juncture, that the Plaintiffs‟ own witness would concur with the overwhelmingly probable case of the Defendant and contradict the Plaintiffs‟ case. PW8, the Plaintiffs‟ own solicitor has admitted that Swan was indeed appointed by the Plaintiffs and not the Defendant. The relevant excerpt of the cross-examination is reproduced here (see Notes of Evidence – Day 9 at page 21 to 22): 39 My question is, with reference to page 22, do you agree with me that once again, Swan & Partners is appointed as solicitors for Dato Ong? Yes Do you agree with me that, once again, Dato Ong has instructed Swan & Partners to grant an option to the Defendant? Yes… Can I refer you to page 40? Do you agree that via page 40, an option was granted by Dato Ong to the Defendant? Through their solicitors, Swan & Partners? Yes So similarly at page 43, 46, 49, 52, 55, 58, 61, your answer will be the same? Yes Admission in the Plaintiffs‟ own Witness Statements [65] It is similar across all of the Plaintiffs‟ Witness Statements that the Plaintiffs appointed Swan & Partners as the firm was nominated by the Defendant. 40 [66] It matters not whether or not Swan was nominated by the Defendant. This Court must emphasis here that a nomination is not a compulsory direction to appoint. It is a choice which the Plaintiffs may opt to accept or reject. Ultimately, as admitted by the Plaintiffs, Swan indeed was appointed by the Plaintiffs and not the Defendant. [67] Thus, in consideration of all the above, it is this Court‟s considered view that without an iota of doubt, Swan is indeed the Plaintiffs‟ solicitors and not the Defendant‟s. To whose benefit does Swan hold the sum for as stakeholder? [68] Naturally, entailing from the earlier finding above, it is obvious that the sum held by Swan is for the Plaintiffs and not the Defendant. Thus, in essence there are no payments made from the Plaintiffs to the Defendant. 41 Two stages payment under the Options is a further proof of the Swan‟s role as the Plaintiffs‟ stakeholder [69] In examining the construction of the Options itself, it inevitably supports the contention that indeed, the sum when paid to Swan, it is not paid to the Developer. The Options have demarcated the payment in two stages: [70] The First stage is the payment of the sum (without interest) into an interest bearing account pending the exercise of the option. (See paragraph 2(c) of Options). Here, it is abundantly clear that the initial payment of the sum can be made prior to the exercise of the option. Thus, payment of the sum does not necessarily mean exercise of the Option. Even more so, when the payment is made to the Plaintiffs‟ own solicitor and not the Defendant. [71] The 2nd Stage is the payment of the sum (with accrued interest from the interest bearing account) from Swan to the Developer. (See para 2(d)) upon exercise of the Option. Clearly here, that the payment 42 of the sum must fulfil this 2 stages payment if it were to be any proof of payment to the Defendant. [72] Furthermore, the Plaintiff has only proven the first stage of the process, which is not near proof of exercise of the option by the Defendant. It is clear from a plain reading of the Option that the first payment to the solicitors as stakeholder is not a sum paid to the Developer. Only if the process transcends to the 2nd stage payment, then there is proof that the sum was paid to the Developer-Defendant (the second stage of the payment). [73] The First stage Payment as per the Options denotes that the payment has not yet reached the Developer when paid to the stakeholder. Then, if not the Developer who receives the money when it reached the stakeholder, the logical question would be who would have received the deposit? Logic and common sense would dictate that the payment when received by the stakeholder is still in the possession and control of the Plaintiffs. 43 [74] Thus, in view of all the above, it is this Court‟s considered view that Swan holds the sum paid for the Plaintiff as stakeholders. Thus, the sum was never paid to the Defendant. Is the payment of the sum to Swan (Plaintiffs‟ solicitors) a proof of an exercise of the Options [75] It is already vividly obvious that the payment of the sum is not an exercise of the Options. This is due to the earlier finding that a. Firstly, payment of the sum is not the manner of exercise of the Options as stipulated in the Options; and b. Secondly, the sum ultimately was never paid to the Defendant. [76] Thus, this Court sees it appropriate to only allude briefly to the Plaintiffs‟ contention on the payment of the sum being either a deposit, booking fee or consideration to prove a binding contract. 44 The payment of the sum is not a deposit, a booking fee or consideration furnished to the Defendant. The Plaintiffs cannot refer to inadmissible „without prejudice‟ evidence [77] From the outset of this issue, it must be noted that the Plaintiffs‟ contention on the sum being a deposit or a booking fee heavily relies on inadmissible „without prejudice‟ documents as ruled by this Court on 6.4.2015. These documents are clearly communications between the parties in the view of a settlement of a dispute. The Plaintiffs in their submissions and reply submissions also have not contended against the Court‟s finding on the inadmissibility of these documents. Thus, it is only appropriate that this Court totally and invariably would not consider the Plaintiffs‟ contention in this regard. [78] The Plaintiffs referred to the Federal Court decision in Morello Sdn Bhd v Jaques (International) Sdn Bhd [1995] 1 MLJ 577 (FC) in 45 attempting to argue that the sum is a deposit payment and consequently a proof to a binding contract. [79] It is this Court‟s considered view that albeit the sum is identified as an “Earnest Deposit” it does not negate the earlier facts and finding that this sum was never at any material time paid to the Defendant. Thus, the payment of the sum to Swan is not a deposit. [80] Regarding the Plaintiffs‟ contention on the sum being a booking fee, the Plaintiffs have referred to numerous cases to support their contention that the booking fee paid is proof of a binding agreement. (See Kin Nam Development Sdn Bhd v Khau Daw Yu [1984] 1 MLJ 256; Mary-Ann Arrichiello v Tanglin Studio Pte. Ltd. (1981) 2 MLJ 60; Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327 (FC)) [81] However, again, the Plaintiffs have heavily relied on inadmissible „without prejudice‟ evidences in Bundle B2 in attempting to prove the sum to be booking fees. Thus, the Court cannot to any extent 46 consider this contention as the Plaintiffs cannot prove their assertion. Especially not vide inadmissible evidences. [82] Furthermore, similarly the payment of the sum has never been paid to the Defendant. Thus, even assuming that this Court agrees that the sum is a booking fee (which this Court thoroughly disagrees) the payment has never been made to the Defendant. [83] Thus, in view of all of the above discussions, it is this Court‟s considered view that the payment of the sum to Swan is undoubtedly not a consideration in the form of a deposit and/or booking fee. The Plaintiffs have by and large, failed to prove this contention. [84] Therefore, it is this Court‟s judgment that the Options are not in any manner binding agreements enforceable against the parties. THE PLAINTIFFS‟ CONDUCT IRREVOCABLY ACKNOWLEDGES THE PAYMENT OF THE SUM IS NOT AN EXERCISE OF THE OPTIONS 47 [85] Now, even with the payment of the earnest deposit (First stage payment) in the 1st Option, upon the expiry of the 1st Option, the Plaintiffs also admitted of its expiration and authorised its solicitors to issue the 2nd Option. [86] It is blatantly clear that the payment of the Deposit to the Plaintiff‟s own solicitor is not proof of Defendant‟s exercise upon the Option. It is similarly applicable to 2nd Option, the Defendant at any time has never exercised the Option. It is more sensible and logical that the payment of the deposit was not made to the Defendant but to the Plaintiff‟s own solicitor. If this is not the case, the question would be, why in the face of that payment, would the Plaintiff themselves own up, admit and agree that the 1st Option has expired? Clearly the answer would be that the payments are: a. Not made to the Defendant; b. are not proofs of an exercise to the Option; and 48 c. The Option Holder is the Defendant (who never exercised the Options) [87] Even assuming that the Court agrees that the Plaintiff is the Option Holder (which the Court totally disagrees), it is clear here that the mere act of paying the deposit to Swan and Partners (notwithstanding whether or not they are the Plaintiff‟s solicitors) is not an act proving exercise of the Option. And this fact further plunges the Plaintiffs‟ contention into the burrows of insensibility and improbability as now, they have no proof of exercise of the Option even with their feeble and fallible contention that the Plaintiff is the Option Holder (which the Court disagrees). [88] Many of the issues become moot because of the conduct of the Plaintiffs themselves. It is clear that the conclusion remains the same (that the Option was never exercised) notwithstanding the questions: a. Of who does Swan acts for? 49 Because as discussed above, even the Plaintiffs acknowledge that payment of the deposit to Swan and Partners does not actuate exercise of the Option. b. Of who is the Option Holder? Because in both circumstances that the Plaintiffs or Defendant is the Option Holder, the payment of the Deposit still is not any proof of actuation or exercise of the Option. c. Of to whom were the deposits paid to? Because in both circumstances that the deposit was paid to Swan and Partners on behalf of the Plaintiff or the Defendant, the Plaintiffs still ultimately admit, acknowledge, and agree that the payment is not any proof of an exercise of the Option. [89] The overwhelming conclusion here is that, at no point in time that the Plaintiffs can assert that the payment of the Deposit to any party whosoever, is proof that the Options have been exercised by any of the Parties. It is plain and indeed simple. The Plaintiffs‟ conduct in agreeing to the lapsing of the 1st Option after allegedly paying that 50 deposit, infers that the payment of deposit is never a consideration or a variable in determining the exercise or non-exercise of the Option. [90] And the Plaintiffs should be estopped from contending otherwise. This Court is again guided by the principle propounded in the Federal Court decision in Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331. THE 1ST OPTIONS ARE IMPOSSIBLE TO BE EXERCISED ANYWAYS [91] Section 5(1) of the Housing Development (Control and Licensing) Act 1966 prohibits a developer from carrying or undertaking housing development before a Developer‟s License is obtained. Regulation 5(1) of the Housing Development (Control and Licensing) Regulations 1989 prohibits any advertisement or sale of any housing development prior to obtaining an Advertisement and Sale Permit. Failure to adhere to these provisions tantamount to an offence under Section 18 of the Housing Development (Control and Licensing) Act 1966. 51 [92] The 1st Options are impossible to be exercised anyways. The 1st Options expire within the year 2006 while the APDL was only granted in 2007. There is factually and legally nothing exercisable or enforceable in the First Option. The parties could not legally enter into any sale and purchase agreement during the whole validity period of the 1st Options. Thus, indeed the 1st Options were inherently impossible to be exercised. THERE WAS ONLY A PRICE INCREASE AGAINST THE UNITS‟ PRICE BUT NOT AGAINST THE PLAINTIFFS [93] The parties have also at length submitted and forwarded evidences on the issue of supposed price increase of the units comparative to the supposed indicative prices in the Options. [94] The issue whether or not new prices were informed to the Plaintiffs is irrelevant. The Plaintiffs‟ claim is based on the Options which this Court finds to not be a binding contract. It is even acknowledged and admitted by the Plaintiffs themselves that the 1st Option has expired. The Plaintiff cannot be allowed to use the two Options as a 52 benchmark to an increase of price. Whatever price which was set by the Defendant during the pre-launch or any time after the Options is not any manner relative to the Options which have expired and not exercised by the Defendant. [95] The price increase is merely a mathematical increase to the units and not an increase against the Plaintiffs. Against the Plaintiffs, the increased price is only a new price as in the first place, the Plaintiffs are not even entitled to the initial price in the Options as the Options have lapsed, not a binding contract and were never exercised by the Defendant. COURT‟S DECISION AND DIRECTIONS [96] In light of all of the above findings, it is this Court‟s decision that the Plaintiffs have indeed failed to prove their claim and consequently the totality of their case. [97] This Court hereby dismisses the Plaintiffs‟ case. 53 On the issue of costs [98] Having heard the submission from both counsels for the Plaintiffs and the Defendant, this Court hereby orders the Plaintiffs to pay the Defendant a global sum of RM 120,000.00 in costs. ...................................................... (DATUK AZIMAH BINTI OMAR) Judicial Commissioner High Court Shah Alam Selangor Darul Ehsan Dated the 26th day of June, 2015. For the Plaintiffs - Tetuan Skrine & Co Encik Vijay Raj a/l Balasupramaniam For the Defendant - Tetuan Khaw & Partners