Qing Yanyun v B&G Tropical Sdn. Bhd. (WA-22NCvC-720-11/2020)

1.

2.

3.

4.

5.

WANG TAO … PLAINTIF-PLAINTIF DAN B&G TROPICAL SDN. BHD. (NO. SYARIKAT: 893323-T) … DEFENDAN

The Plaintiff in this case sought a Declaration from the Court to annul two agreements i.e. a Sale and Purchase Agreement (SPA) 19/03/2025 14:22:07 WA-22NCvC-720-11/2020 Kand. 173 and a Deferred Payment Plan Agreement (DPP) entered with the Defendant a licensed Developer for the purchase of property developed by the Defendant.

The Defendant in turn counter claimed against the Plaintiffs for the breach of these two agreements.

The case went to a full trial wherein the Plaintiff and Defendant adduced oral, as well as documentary evidence contained in the Bundle of Documents filed in Court. The parties also filed agreed statement of facts and issues to be tried in order to define the precise dispute in this case. Brief facts

The facts put in a nutshell is that the Plaintiffs had entered into the SPA for the purchase of the residential apartments being developed by the Defendant in Seri Kembangan, Selangor known as “Tropical Villa” (“the properties”).

The Plaintiffs faced difficulties in making full payments as agreed under the SPA for the purchase of the properties, when their loan applications for the payment of the balance sum was rejected by the local Banks. As a result, the Plaintiffs faced a risk of the sums of monies already paid in cash being forfeited.

It was then the parties entered into the DPP extending the period of payment as specified in the SPA by way of monthly instalments in the extended period of time.

The Plaintiffs failed to pay the instalments under the DPP after making a number of payments. The Plaintiff are now seeking to annul both the SPA and the DPP whereas the Defendant are seeking to enforce either the SPA or the DPP. The issue

The crux of the issue in this case is determining the validity of the DPP which would in turn would determine the validity of the SPA. The validity of the DPP

The legal burden of proving the DPP rests upon the Plaintiffs as stipulated under the Evidence Act 1950. The relevant provisions are reproduced here:

Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person.

A desires a court to give judgment that B shall be punished for a crime which A says B has committed. A must prove that B has committed the crime. Section 102 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.

A sues B for land of which B is in possession, and which, as A asserts, was left to A by the will of C, B's father. If no evidence were given on either side, B would be entitled to his possession. Therefore, the burden of proof is on A.

A sues B for money due on a bond. The execution of the bond is admitted, but B says that it was obtained by fraud, which A denies. If no evidence were given on either side, A would succeed as the bond is not disputed and the fraud is not proved. Therefore, the burden of proof is on B. Section 103 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.

A prosecutes B for theft and wishes the court to believe that B admitted the theft to C. A must prove the admission.

B wishes the court to believe that at the time in question he was elsewhere. He must prove it.

The Plaintiffs’ challenge of the DPP is two prongs. The first is that the DPP is invalid because it was entered by way of misrepresentation and coercion/force and secondly that it is a cloaked money lending agreement. i)

Misrepresentation is defined in section 18 of the Contracts Act 1950 as follows: "Misrepresentation" includes-

the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

any breach of duty which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him; and

causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.

The evidence in this case is clear the Plaintiffs had no direct contact with the Defendant but the Plaintiffs only dealt with the agent appointed by the Defendant to market the sale of the project in China.

It is the contention of the Plaintiffs that they were misrepresented that they could get a Bank loan to purchase the properties and this induced them to enter into the SPA

However, there was no clear evidence led by the Plaintiffs to identify the person or persons making this misrepresentation nor such a person was called to testify in Court.

The Court also invoked an adverse inference against the Plaintiffs in the non-calling of the relevant witnesses to prove misrepresentation as is provided under section 114 of the Evidence Act 1950 as follows: The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. The court may presume:-

that evidence which could be and is not produced would if produced be unfavourable to the person who withholds it;

In this case it is to be noted that the Court disallowed any reference to a person called Dong Chang who had apparently made the misrepresentation to the Plaintiffs. This person’s name was not mentioned in the Plaintiff’s Statement of Claim. It is a trite principle of law that a party is bound by its own pleadings. Evidence can only be led if the facts are pleaded.

The Plaintiff’s contention that this person’s name was mentioned in the Reply to the Defense does not rectify the defects in the Statement of Claim filed by the Plaintiffs.

The Rules of Court 2012 provides that all relevant facts must be pleaded in the Statement of Claim and if the cause of action is Misrepresentation it must be particularized:

Subject to the provisions of this rule and rules 10, 11 and 12, every pleading shall contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement shall be as brief as the nature of the case admits. Order 18 Rule 12

Particulars of pleading (O. 18 r. 12)

Subject to paragraph (2), every pleading shall contain the necessary particulars of any claim, defence or other matter pleaded including, without prejudice to the generality of the foregoing words-

particulars of any misrepresentation, fraud, breach of trust, wilful default or undue influence on which the party pleading relies; and

where a party pleading alleges any condition of the mind of any person, whether any disorder or disability of mind or any malice, fraudulent intention or other condition of mind except knowledge, particulars of the facts on which the party relies.

In particularising misrepresentation, it is important to state the details of the representations made as well as when and where the representations were made. Just making a general reference is not sufficient.

The Court rules that the Plaintiffs have failed to discharge the burden of proof to prove any misrepresentations with regards to obtaining Bank loans and therefore failed to prove the invalidity of the DPP on the grounds of misrepresentation. ii)

The Plaintiff contended that they were coerced and under duress to enter into the DPP as they faced the risk of whatever they had paid to be forfeited as provided under the SPA. There were lengthy questionings as to how much each of the Plaintiffs had paid to trigger the forfeiture clause.

In the Court’s view whether the sums paid would be forfeited is not relevant to the issue at hand. The real issue is whether the Plaintiffs had no choice but to sigh the DPP and were under duress or coerced into signing?

Coercion is defined under the Contracts Act 1950 "Coercion" is the committing, or threatening to commit any act forbidden by the Penal Code, or the unlawful detaining or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Explanation - It is immaterial whether the Penal Code is or is not in force in the place where the coercion is employed. ILLUSTRATION A, on board an English ship on the high seas, causes B to enter into an agreement by an act amounting to criminal intimidation under the Penal Code. A afterwards sues B for breach of contract at Taiping.

The main element of coercion is that there must be a threat and this threat caused the person threatened to enter into the agreement.

In this case the Plaintiffs have led no evidence to prove that the Defendant had actually threatened to forfeit the monies they have paid. The actions of the Defendant on the contrary shows that they have intended to assist the Plaintiffs in fulfilling the terms of the SPA and that’s why the DPP was suggested.

The Plaintiffs had a choice to reject the DPP but their conduct of paying the sums under the DPP for at least 2 years and enjoying the use of the properties showed that they had consented to the DPP. Consent is defined in Contracts Act 1950 as: Two or more persons are said to consent when they agree upon the same thing in the same sense.

Conduct is a relevant fact to consider in determining the intentions in entering the DPP. Section 8 (2) of the Evidence Act 1950 states:

The conduct of any party, or of any agent to any party, to any suit or proceeding in reference to that suit or proceeding, or in reference to any fact in issue therein or relevant thereto, and the conduct of any person an offence against whom is the subject of any proceeding, is relevant if the conduct influences or is influenced by any fact in issue or relevant fact, and whether it was previous or subsequent thereto. Explanation 1 - The word "conduct" in this section does not include statements unless those statements accompany and explain acts other than statements; but this explanation is not to affect the relevancy of statements under any other section of this Act. Explanation 2 - When the conduct of any person is relevant any statement made to him or in his presence and hearing which affects his conduct is relevant

A is tried for the murder of B. The facts that A murdered C, that B knew that A had murdered C and that B had tried to extort money from A by threatening to make his knowledge public are relevant.

A sues B upon a bond for the payment of money. B denies the making of the bond. The fact that at the time when the bond was alleged to be made B required money for a particular purpose is relevant.

A is tried for the murder of B by poison. The fact that before the death of B, A procured poison similar to that which was administered to B is relevant.

The question is whether a certain document is the will of A. The facts that not long before the date of the alleged will A made inquiry into matters to which the provisions of the alleged will relate, that he consulted lawyers in reference to making the will and that he caused drafts of other wills to be prepared of which he did not approve are relevant.

A is accused of a crime. The facts that either before or at the time of or after the alleged crime A provided evidence which would tend to give to the facts of the case an appearance favourable to himself, or that he destroyed or concealed evidence or prevented the presence or procured the absence of persons who might have been witnesses or suborned persons to give false evidence respecting it are relevant.

The question is whether A robbed B. The facts that after B was robbed, C said in A's presence: "The police are coming to look for the man who robbed B" and that immediately afterwards A ran away are relevant.

The question is whether A owes B RM10,000. The facts that A asked C to lend him money, and that D said to C in A's presence and hearing: "I advise you not to trust A for he owes B RM10,000," and that A went away without making any answer are relevant facts.

The question is whether A committed a crime. The fact that A absconded after receiving a letter warning him that inquiry was being made for the criminal and the contents of the letter are relevant.

A is accused of a crime. The facts that after the commission of the alleged crime he absconded, or was in possession of property or the proceeds of property acquired by the crime, or attempted to conceal things which were or might have been used in committing it are relevant.

The question is whether A was ravished. The facts that shortly after the alleged rape she made a complaint relating to the crime, the circumstances under which and the terms in which the complaint was made are relevant. The fact that without making a complaint she said that she had been ravished is not relevant as conduct under this section, though it may be relevant-

as a dying declaration under section 32(1)(a); or

(ii) as corroborative evidence under section 157.

The question is whether A was robbed. The fact that soon after the alleged robbery he made a complaint relating to the offence, the circumstances under which and the terms in which the complaint was made are relevant. The fact that he said he had been robbed without making any complaint is not relevant as conduct under this section, though it may be relevant-

as a dying declaration under section 32(1)(a); or

(ii) as corroborative evidence under section 157.

In this case the Plaintiff have again failed to discharge the burden of proof to prove duress or coercion and the contrary had consented to the DPP.

(iii) Is the DPP a moneylending agreement?

The Defendant contends that the DPP is a moneylending agreement and as the Defendant do not have a moneylending licence the DPP is illegal and unlawful therefore rendering it to be void.

The basis of the Plaintiff’s contention that the DPP is a moneylending agreement is that administrative charges are imposed under the DPP. These administrative charges are actually disguised interest rates.

The Defendant have explained in their testimony the need to impose the administrative charge to defray the additional cost of maintaining personnel to monitor the Plaintiff’s account for an extended period of time until full payment.

The Court accepts this explanation as reasonable and believable as the DPP is an added facility only given to the Plaintiffs. This would naturally involve additional expenditure to the Defendant and as it is a facility provided to the benefit of the Plaintiffs they have to pay the administrative charges.

In short, the Court dismisses the Plaintiff’s contention that the DPP is an interest bearing loan. It is rather a facility provided to the Plaintiffs to assist them to pay the full purchase price under the SPA.

In conclusion the Court rules that the Plaintiffs have failed to prove that they executed the DPP under misrepresentation or duress nor has the Plaintiff proven that the DPP is an interest-based loan. Whether SPA/DPP unlawful for flouting the housing laws?

Unlawful agreements are void under section 24 of the Contracts Act 1950 which provides that : The consideration or object of an agreement is lawful, unless-

it is forbidden by a law;

it is of such a nature that, if permitted, it would defeat any law;

it is fraudulent;

it involves or implies injury to the person or property of another; or

the court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.

The main reason forwarded by the Plaintiffs against the lawfulness of the SPA is that it has flouted the provisions of the Housing Development (Control and Licensing) Act 1966 (“the Housing Act”) and Regulation 11 of the Housing Development (Control and Licensing Regulations 1989 (“to be collectively referred to as the Housing laws”).

The Plaintiffs contend that as the SPA is governed by the Housing laws the SPA must strictly comply with the prescribed contract as well as the mode of payment under the Housing laws. Any variations to the payment terms must be with the approval of the Controller of Housing. In this case there was no such approval given.

The Court takes note of the various Federal Court cases with regards the Housing laws which have ruled on the need to safeguard the interest of the house buyers. The Court agrees and accepts that housing contracts are special social contracts governed by Statute and therefore should be construed strictly in accordance with the Statute.

The Defendant on the other hand contend that the DPP’s are private settlement agreements between the Plaintiffs and the Defendant in line with section 64 of the Contracts Act 1950 and therefore are out of the ambit of the Housing laws. The Defendant further contend that the Housing laws do not oust the provisions of the Contracts Act 1950 which allows for settlement agreements.

In determining the issue at hand, it is pertinent to look at both the Housing laws as well as the Contracts Act 1950. The legislative intents of both the laws need to be given effect to.

It is clear from the Housing Act the intention of the law is 2 prongs. The first is to regulate and license the housing developer and second is to protect the purchaser. This clear from the preamble to the Act where it is stated “An Act to provide for the control and licensing of the business of housing development in *Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith.

The two (2) authorities empowered to enforce the Act are the Minister and the Controller appointed by the Minister. In the Court’s view the Minister and the Controller are only mandated to act on information or complaint. This is clear from the reading of the provisions of the Act.

As an illustration section 10 states as follows:

Either on his own volition or upon being directed by the Minister under subsection (2), the Controller or an Inspector may from time to time under conditions of secrecy investigate the commission of any offence under this Act or investigate into the affairs of or into the accounting or other records of any housing developer.

The Minister may direct the Controller or an Inspector to make an investigation under subsection (1)-

if he has reason to believe that the housing developer in question is carrying on his business in a manner detrimental to his purchaser; or has assets insufficient to meet his liabilities or is contravening any of the provisions of this Act; or

if an application for such an investigation is made to him, and every such application shall be supported by not less than five purchasers and accompanied with such evidence and such security as the Minister may require for the purpose of satisfying himself that the application is made in good faith, and of paying the costs of such an investigation.

Similarly, the Regulation relied upon by the Plaintiffs the relevant provisions states as follows:

Where the Controller is satisfied that owing to special circumstances or hardship or necessity compliance with any of the provisions in the contract of sale is impracticable or unnecessary, he may, by a certificate in writing, waive or modify such provisions: Provided that no such waiver or modification shall be approved if such application is made after the expiry of the time stipulated for the handing over of vacant possession under the contract of sale or after the validity of any extension of time, if any, granted by the Controller. In the Court’s view the Controller can only know of the special circumstances or hardship if he is informed of such circumstance or hardship.

It is clear therefore the provisions of the Housing laws are enabled only on the information or complaint of any party to the either the Minister or the Controller. The Housing laws however do not require or mandate that every dispute or complaint must be notified to the Minister or the Controller.

From the evidence in this case it is clear that neither the developer nor the purchaser in this case had approached the authorities to resolve the dispute between them. The parties therefore had a choice to resolve the dispute themselves and one option was the

The Court rules that the provisions of section 64 of the Contracts Act 1950 are applicable in this case. the provision provides a follows: Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit.

A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer bound to perform the promise.

A owes B RM5,000. A pays to B, and B accepts, in satisfaction of the whole debt, RM2,000 paid at the time and place at which the RM5,000 were payable. The whole debt is discharged.

A owes B RM5,000. C pays to B RM1,000 and B accepts them, in satisfaction of his claim on A. This payment is a discharge of the whole claim.

A owes B under a contract, a sum of money, the amount of which has not been ascertained. A, without ascertaining the amount, gives to B, and B, in satisfaction thereof, accepts the sum of RM2,000. This is a discharge of the whole debt, whatever may be its amount.

A owes B RM2,000, and is also indebted to other creditors. A makes an arrangement with his creditors, including B, to pay them a composition of fifty cents in the dollar upon their respective demands. Payment to B of RM1,000 is a discharge of B's demand.

By way of the DPP the Defendant had dispensed with the payment terms in the SPA and instead replaced them with the terms in the DPP. The Defendant is entitled to do extend the time for the payment of the purchase price.

In short, he Court rules that the SPA and DPP are lawful. Approbation and reprobation

The Plaintiffs are also bound by the principles of approbation and reprobation which prohibits them from relying on the agreements when it suits them and discarding them when in breach.

In the Court’s view the filing of this claim is dishonest in order to avoid paying the full purchase price for the properties after taking possession and enjoying the use of the properties.

Based on the factors above the Court rules both the SPA and DPP are enforceable contracts, the terms of which have been breached by the Plaintiffs themselves. It is trite law that the Plaintiffs cannot come to Court with dirty hands, which they have in this case, to avoid paying the full purchase price of the properties they have bought and enjoyed the use of.

In the upshot the Plaintiffs claim against the Defendant is dismissed whereas the Defendant’s counter claim for the payment of the balance purchase payment under the SPA is allowed. This balance purchase payment is to be paid within 6 months from the date of judgement failing which the ownership of the properties will revert to the Defendant.

The Plaintiff are also directed to pay the cost of proceeding in the sum of RM100,000 within 1 month from the date of judgement. Dated: 19.3.2025 sgd DATO’ HAJI AKHTAR BIN TAHIR Judge High Court of Malaya, Kuala Lumpur PARTIES For the Plaintiff: Nama Peguamcara: Sharon - Shakila Gabriel A. Raja Rajesvari Tetuan N. Saraswathy Devi No. 47, Jalan Sultan Ismail, 50250 Kuala Lumpur. For the Defendant: Nama Peguamcara: Nur Atiqah Binti Ahmad Ariff / Viola Decruz Tetuan VL Decruz & Co. Unit 50-11-6, 11th Floor, Wisma UOA Damansara, No. 50 Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur.