(ii) The Developer shall do all that may reasonably be required to proceed with the Works. [Emphasis added.] S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 10 [25] It was noteworthy that Counsel for the Appellants did not advance any meaningful challenge to this finding before us. In our view, that was entirely understandable, as the evidence overwhelmingly demonstrated that the First Appellant was in breach of its obligations. [26] Having considered the grounds of judgment of the learned High Court Judge, and the entirety of the evidence adduced at trial, we were satisfied that her Ladyship had committed no error in finding that the First Appellant was in breach of the JV Agreement. Accordingly, the finding of liability against the First Appellant was unanimously affirmed in full. Whether the High Court Judge had erred in finding the Appellants liable for MYR3.5 million damages [27] While we affirmed the learned High Court Judge’s finding on liability against the First Appellant, we were unable to agree with the approach adopted in the quantification of damages, for the following reasons. [28] A perusal of the grounds of judgment indicated that the learned High Court Judge had treated the MYR3.5 million as liquidated ascertained damages. [29] The Appellants argued that the Respondent had never pleaded liquidated damages, liquidated ascertained damages, or section 75 of the Contracts Act 1950 anywhere in its Amended Statement of Claim, and that the Respondent had framed its claim solely as “loss and/or damages” (general damages requiring proof of actual loss) and as “wang jaminan” (guaranteed money). S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 11 [30] We were in agreement with the Appellants, as a perusal of the grounds of judgment of the learned High Court Judge indicated that Her Ladyship had re-characterised the claim as one for liquidated ascertained damages and, as such, had awarded such damages in the amount of MYR3.5 million. In our view, granting a relief on a basis that was never pleaded, contravenes the cardinal rule that parties are bound by their pleadings which is trite law as expounded in the Federal Court cases of RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd [2010] 2 MLJ 188 and Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1. [31] The Respondent’s submission that the Appellants suffered no prejudice from the absence of pleadings was untenable as a case stands or falls on its pleadings. It was stated in Esso Petroleum Co Ltd v Southport Corporation [1956] AC 218 and Pembinaan SPK Sdn Bhd v Jalanan Waja [2014] 2 MLJ 322, that pleadings define the parameters of the dispute, ensure that each party has fair notice of the case it must meet, and bind both the parties and the court. It follows that a court ought not to decide a case on a basis that has not been pleaded, as to do so would occasion serious prejudice and offend the rules of natural justice. In the latter case, it was stated by Mohamad Ariff Yusof JCA in the following passages: [22] To decide on an un-pleaded claim is to deny the opposing party the valuable right to answer the claim by adducing such material facts at the trial as it might find necessary to forward to the court to advance its case against the claim. … [23] In such a situation, a return to the basic governing principles and rules of pleadings in our system of civil litigation will be timely and appropriate. This was also the route adopted by the learned Judicial Commissioner, but, with the utmost respect, his conclusions resulted from a misapplication of these basic principles. The law reports are S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 12 replete with exhortations and reminders by judges on the need for decisions to be grounded on the pleaded case of the litigants, whether plaintiff or defendant. The need to comply with the rules on pleading are generally to be strictly enforced to avoid surprises at the trial and to narrow and define the issues of the parties so that each will know the opposing party's case, to prepare to meet it in advance and to marshal the necessary evidence at trial to establish its claim and answer the defence of the opposing party. The underlying rationale is not only to prevent surprises as seemed to be the reasoning of the High Court, but is much more than just that. [Emphasis added.] [32] More importantly was the fact that the learned High Court Judge had erred in failing to read Clause 1 and Clause 4 of the Guarantee together to properly construe its true nature and effect. [33] Her Ladyship derived the sum of RM3.5 million from the Guarantee executed by the Second Appellant. Under Clause 1 of the Guarantee, the Second Appellant irrevocably and unconditionally guaranteed, as principal debtor, the payment of MYR2.5 million for each of the Owner's Units — totalling MYR7.5 million — in the event that the First Appellant failed to complete construction of those units within five years and secure the requisite Certificate of Completion and Compliance (CCC). [34] Clause 1 of the Guarantee reads: In consideration of the OWNER, at the request of the GUARANTOR, agreeing to enter the JV Agreement with the DEVELOPER upon the terms and conditions therein contained, the GUARANTOR hereby irrevocably and unconditionally guarantees as the principal debtor and not merely as surety to pay to the OWNER on demand the sum of RINGGIT MALAYSIA TWO MILLION AND FIVE HUNDRED THOUSAND (MYR2,500,000) only (GUARANTEED SUM) for each OWNER's Unit (the total GUARANTEED SUM for all of the OWNER's Units shall be sum of RINGGIT MALAYSIA SEVEN MILLION AND FIVE HUNDRED THOUSAND (MYR7,500,000) in the event that the S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 13 construction of each of the OWNER's Unit is not completed by the DEVELOPER (with Certificate of Completion and Compliance issued) within FIVE (5) years from the date hereof in accordance with the terms of the JV Agreement. For avoidance of doubt, the GUARANTEED SUM shall apply singly to each of the OWNER’s Units and the GUARATOR’s liability under this Guarantee shall not exceed the sum of RINGGIT MALAYSIA TWO MILLION AND FIVE HUNDRED (MYR2,500,000) only for each Owner’s Unit. [Emphasis added.] [35] Clause 1 was, in substance, a security mechanism intended to assure performance, and to fix the guarantor’s maximum exposure in the specified contingency. [36] Having adopted the total guaranteed sum of MYR7.5 million as the starting point, the learned High Court Judge proceeded on the footing that this figure represented the Respondent’s prima facie entitlement. The learned High Court Judge then deducted MYR4 million, said to reflect the market value of the Land which had reverted to the Respondent upon termination of the JV Agreement. On this basis, the learned High Court Judge had arrived at a net award of MYR3.5 million, treating the retained value of the Land as a form of offset against the guaranteed sum. [37] With respect, that methodology was difficult to sustain. The Guarantee was, by its nature, a collateral contract furnishing security for performance. It was not, without more, a measure of the Respondent’s actual loss arising from the breach of the JV Agreement. The learned High Court Judge’s approach effectively treated the guaranteed sum as if it were a proxy for damages, and thereafter undertook a form of set-off based on the residual value of the Land. Such an approach risked conflating two distinct legal S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 14 concepts, namely, the contractual liability of a guarantor on the one hand, and the assessment of damages for breach of the JV Agreement on the other. [38] In our view, the proper inquiry ought to have been directed at the loss actually suffered by the Respondent as a result of the non-performance of the JV Agreement, assessed in accordance with established principles governing damages. The reliance on the guaranteed sum, followed by a deduction based on the alleged market value of the Land, did not adequately reflect that inquiry and had, in fact, introduced an element of arbitrariness into the quantification exercise. [39] On that note, it was imperative to refer to Clause 4 of the Guarantee which provided that upon payment of the sums under Clause 1, the Owner’s Units would belong to the First Appellant. Clause 4 reads: The OWNER hereby agrees that upon receipt of the GUARANTEED SUM for each OWNER’s Unit from the GUARANTOR, the Owner’s Unit in which the GUARANTEED SUM is paid for shall belong absolutely to the DEVELOPER and the OWNER shall have no claim or interest whatsoever in respect of the Owner’s Unit. For the avoidance of doubt, nothing herein shall entitle the GUARANTOR to defeat the objective of the JV Agreement by tendering the GUARANTEED SUM to the ONWER for the purpose of securing ownership of the OWNERS Units to the DEVELOPER. Therefore, this GUARANTEE can only be enforced at the instance of the OWNER. [Emphasis added.] [40] The Guarantee must be construed as a whole, not in a piecemeal or fragmented fashion. In our view, Clause 1 and Clause 4 of the Guarantee were plainly intended to operate in tandem as part of a single commercial arrangement. Properly understood, the structure S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 15 of the Guarantee reflected a reciprocal mechanism: the payment of the guaranteed sum was to be matched by the transfer of the Land to the First Appellant. It was, therefore, not a standalone payment obligation, but one embedded within a broader transactional framework. [41] It is a fundamental principle of contractual interpretation that a document must be read as a whole to ascertain the true intention of the parties. A court cannot isolate a single provision and give it effect while ignoring other provisions that qualify, condition, or contextualise it. Rather, the court must strive to give effect to all parts of the contract so that the instrument operates coherently as a unified whole. This principle is firmly embedded in our jurisprudence, as affirmed by several authorities, including the Federal Court cases of Perbadanan Kemajuan Negeri Selangor v Selangor Country Club Sdn Bhd [2017] 2 MLJ 819 and New Straits Times Press (Malaysia) Bhd v Aideah Communication Sdn Bhd [2025] 5 CLJ 661. [42] Several undisputed facts, in our view, were fatal to the Respondent's attempt to rely on Clause 1 of the Guarantee in isolation. First, the Land at all material times remained registered in the Respondent's name. No proprietary interest was ever transferred to the First Appellant. Secondly, the First Appellant never encumbered the Land by way of a charge to secure bridging finance — something one would ordinarily expect in a development of this nature. This strongly indicated that the First Appellant had never treated the Land as its own asset under the JV Agreement. Thirdly, upon termination of the JV Agreement, vacant possession of the Land was restored to the Respondent after the lapse of five years. The Respondent S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 16 thus resumed full control and ownership of the Land in its original, undeveloped condition. [43] In these circumstances, Clause 4 of the Guarantee was incapable of operation. Quite simply, no completed factory units even existed that could have been transferred to the First Appellant. The very foundation upon which Clause 4 rested, namely, the existence of identifiable, completed Owner's Units, was entirely absent. Not a single brick had been laid; not a single certificate had been obtained. The factual substratum necessary to trigger the reciprocal obligation under Clause 4 was therefore wholly missing. Without completed units, there was nothing to transfer, nothing to value, and nothing to which the First Appellant's ownership could attach. The Respondent had instead elected to retake possession of the Land, thereby affirming that the development had come to nought and that the units would never be built. Having chosen to reclaim the Land, the Respondent could not simultaneously insist on a mechanism that presupposed the very units it had implicitly acknowledged would never exist. [44] In our unanimous view, it would be both legally unsustainable and commercially unjust to permit the Respondent to invoke Clause 1 of the Guarantee while disregarding Clause 4. The two clauses are interdependent and must be read together. Where Clause 4 of the Guarantee could not be given effect on the facts, Clause 1 could not be invoked in isolation. [45] We, therefore, held that the invocation of the Guarantee under Clause 1 was contingent upon Clause 4 being capable of operation. On the facts of this case, that condition was not satisfied. The S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 17 Respondent could not claim the benefit of the guaranteed sum without at the same time assuming the corresponding obligation to transfer the Owner's Units — an obligation that, in this case, was impossible of performance. [46] In the premises, it was our view that the learned High Court Judge had erred in relying on the Guarantee as the basis for quantifying damages at MYR3.5 million. By treating it as such, the learned High Court Judge had effectively re-cast the contractual allocation of risk and benefit agreed between the Parties. It is trite that the court’s function is to interpret and give effect to the contract as made, not to improve upon it or to substitute what it considers to be a fairer arrangement. [47] The proper course, in our view, was to order that damages be assessed against the First Appellant in the conventional manner for breach of the JV Agreement. Such an assessment would require the Court to determine the actual loss suffered by the Respondent as a result of the non-performance of the development, including, where appropriate, the loss of use of the Land during the relevant period, any diminution in its value, and any other consequential losses that are properly pleaded and strictly proved. [48] We further noted that such relief was, in fact, expressly pleaded in the alternative. Paragraph 23(b) of the Respondent’s Amended Statement of Claim claimed, in the alternative, for “general damages to be assessed.” The Respondent was, therefore, not prejudiced by this course. It would have the full opportunity to establish its loss at a proper assessment of damages before the High Court. S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 18 Conclusion [49] After a careful and comprehensive consideration of the evidence before this Court, the submissions advanced by the respective parties, and the Grounds of Judgment of the learned High Court Judge, we were unable to agree entirely with the conclusions reached by the learned Judge below. Having scrutinised the record of appeal in its entirety and examined the issues raised with due care, we unanimously came to the view that this appeal possesses merit only in part. Accordingly, we allowed the appeal to that limited extent. [50] We affirmed the finding of liability against the First Appellant but set aside the award of damages in the sum of MYR3.5 million. The question of damages as against the First Appellant was accordingly remitted to the High Court for assessment. In consequence, the appeal of the Second Appellant was allowed in its entirety. [51] As to costs, and with the agreement of the parties, the order of costs in the sum of MYR30,000 made in the High Court against the First Appellant was ordered to stand. There was no order as to costs in this Court in respect of the First Appellant. [52] In relation to the Second Appellant, the order for costs made against him in the High Court was set aside. We instead ordered the Respondent to pay costs of MYR30,000 (subject to allocatur), both here and below, to the Second Appellant. Dated: 11 June 2026 S/N WKvrih9pn0ylGMiYtimwQw 11 June 2026 --------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------- 19 ………….…SIGNED…………… (EVROL MARIETTE PETERS) Judge of the Court of Appeal Malaysia Counsel: For the Appellants – Wang Hok Mun, Ivanpal Singh, Shermaljit Singh and Kesvinder Kaur; Messrs AJ Ariffin Yeo & Harpal. For the Respondent – Muhamad Ilyasa Iqbal bin Abu Bakar, Fatin Naqiyyah binti Suhaimi and Hafizah binti Hanapi; Susan Lee & Co. S/N WKvrih9pn0ylGMiYtimwQw