1. ) Wong Yong Fook v Country Garden Pacificview Sdn. Bhd. (JA-12ANCvC-60-06/2022)

WONG HONG HWA …….PERAYU-PERAYU COUNTRY GARDEN PACIFICVIEW SDN BHD …RESPONDEN Disatukan dan didengar bersama dengan

WONG HONG HWA …….. PERAYU-PERAYU COUNTRY GARDEN PACIFICVIEW SDN BHD RESPONDEN 04/06/2023 09:43:34

WONG HONG HWA …PERAYU-PERAYU COUNTRY GARDEN PACIFICVIEW SDN BHD …RESPONDEN [Dalam Perkara Mahkamah Sesyen Di Johor Bahru Dalam Negeri Johor Darul Takzim Guaman Sivil No. JA-B52NCvC-106-12/2021 Antara Country Garden Pacificview Sdn Bhd …………Plaintif

Wong Yong Fook

Wong Hong Hwa …Defendan-Defendan] GROUNDS OF JUDGMENT Introduction [1] For ease of reference, parties will be referred to as they were in the proceedings before the Sessions Court. [2] As a brief background of facts, vide a sale and purchase agreement (“SPA”) dated 30.7.2018, the Defendants purchased a parcel unit in a housing project known as Laman Damai Satu, Forest City in Johor Bahru which was developed and sold by the Plaintiff, a licensed housing developer. The purchase price of the unit is RM596,155.00 (“purchase price”). [3] Clause 5 of the SPA requires the Defendants to pay the purchase price by instalments at the time and in the manner prescribed in the Third Schedule. [4] According to the Plaintiff, the Defendants only paid RM29,807.75 despite admitting to receive all progress billings sent by the Plaintiff until the vacant possession of the unit was ready to be delivered. [5] On 31.10.2019, the Plaintiff issued the notice of delivery of vacant possession of the unit together with the statement of delivery of vacant possession for the outstanding purchase price and late charges of RM547,021.78 (as at 31.10.2019) to the Defendants. [6] Due to failure of the Defendants to pay the outstanding purchase price and late charges, on 7.12.2021, the Plaintiff filed a writ and statement of claim at the Johor Bahru Sessions Court against the Defendants for the following reliefs:

Suatu Perintah pelaksanaan spesifik:-

Perjanjian Jual Beli bertarikh 30.7.2018 di antara Plaintif dan Defendan-Defendan untuk pembelian suatu Parcel No. F-04-04 di “Laman Damai Satu, Forest City” di bawah H.S. (D) 565172 PTD 4973, Mukim Tanjung Kupang, Daerah Johor Bahru, Negeri Johor Bahru, untuk Harga Jual Beli berjumlah RM596,155.00 (“Harga Jual Beli”) oleh Defendan-Defendan (“Perjanjian Jual Beli”); dan

(ii) Defendan-Defendan serta merta membayar (i) jumlah Harga Jual Beli tertunggak menurut Klausa 5 (1) Perjanjian Jual Beli tersebut dan caj pembayaran lewat (late payment charges) menurut Klausa 10

Perjanjian Jual Beli tersebut sebanyak RM647,902.65 (setakat 20.10.2021) dan (ii) sebarang caj pembayaran lewat lanjut sebanyak 10% setahun atas jumlah Harga Jual Beli tertunggak tersebut dari tarikh akhir pembayaran Harga Jual Beli tertunggak dikira dari hari ke hari (calculated from day to day) sehingga pembayaran penuh dan muktamad, kepada Plaintif;

Sekiranya Defendan-Defendan gagal mematuhi Perintah pelaksanaan spesifik seperti dalam perenggan 16 (a) di atas, Plaintif adalah bebas untuk memulakan tindakan pelaksanaan untuk mendapatkan balik (i) jumlah Harga Jual Beli tertunggak menurut Klausa 5 (1) Perjanjian Jual Beli tersebut dan caj pembayaran lewat (late payment charges) menurut Klausa 10 (1) Perjanjian Jual Beli tersebut sebanyak RM647,902.65 (setakat 20.10.2021) dan (ii) sebarang caj pembayaran lewat lanjut sebanyak 10% setahun atas jumlah Harga Jual Beli tertunggak tersebut dari tarikh akhir pembayaran Harga Jual Beli tertunggak dikira dari hari ke hari (calculated from day to day) sehingga pembayaran penuh dan muktamad, terhadap Defendan-Defendan;

Ganti rugi sebagai ganti (in lieu of) atau sebagai tambahan (in addition of) kepada Perintah pelaksanaan spesifik seperti dalam perenggan 16

di atas;

Kos dibayar oleh Defendan-Defendan kepada Plaintif; dan

Sebarang perintah dan/atau relif lanjut yang dianggap wajar dan adil oleh Mahkamah Yang Mulia ini [7] On 22.2.2022, the Defendants filed the Statement of Defence and Counter claim wherein the Defendants alleged inter alia that they signed the SPA due to strong insistence from the Plaintiff. The Defendants alleged that the Plaintiff failed to comply with the Housing Development (Control and Licensing) Regulation 1989 (“HDR”) which requires any developer to collect 10% of the purchase price during the signing of the SPA. In the present action, the Defendants averred that they paid less than 10% of the purchase price to the Plaintiff. Further, the Defendants sought that the SPA be declared void and no effect as it contravened regulation 11 of the HDR and s. 24 of the Contract Act 1950 (“CA”) and an order for the deposit paid by them to the Plaintiff be returned. [8] On 28.2.2022, the Plaintiff filed the reply to the Defendants’ statement of defence and counter claim. [9] Not long after, the Defendants filed an application in Enclosure 13 to strike out the Plaintiff’s Statement of Claim while the Plaintiff filed two applications in Enclosures 17 and 19 for a summary judgment and striking out the Defendants’ counter claim, respectively. [10] On 16.6.2022, the Sessions Court Judge (“SCJ”) decided that –

the Defendants’ application in Enclosure 13 to strike out the Plaintiff’s Statement of Claim was dismissed with costs; and

the Plaintiff’s applications in Enclosures 17 and 19 for a summary judgment and striking out the Defendants’ counter claim were allowed with costs. [11] Dissatisfied with the decision, the Defendants filed three separate appeals, namely:

in JA-12ANCvC-59-06/2022 the Defendants appealed against the SCJ’s decision on the dismissal of their application to strike out the Plaintiff’s Statement of Claim;

in JA-12ANCvC-60-06/2022 the Defendants appealed against the SCJ’s decision on the Plaintiff’s application for summary judgment; and

in JA-12ANCvC-61-06/2022 the Defendants appealed against the SCJ’s decision on the striking out the Defendants’ counter claim. [12] On the request of learned counsels for both parties and premised on these appeals related to the same parties and to the same series of events, I allowed them to be heard together. JA-12ANCvC-59-06/2022 [13] I begin with the appeal No. JA-12ANCvC-59-06/2022 wherein Defendants appealed against the SCJ’s decision on the dismissal of their application to strike out the Plaintiff’s Statement of Claim. [14] The Defendants averred that the Plaintiff’s Statement of Claim must be struck out based on the following grounds:

the Plaintiff’s action in collecting the deposit less than 10% of the purchase price was in contravene to subregulations 11(1) and (2) of the HDR. This would render the SPA to be void;

the Plaintiff’s action in collecting the deposit less than 10% of the purchase price would render the SPA to be unenforceable under s. 24(e) of the CA as it contravenes the public policy; and

the Plaintiff’s contravention of regulation 11 of the HDR is an offence punishable under regulation 13 of the HDR. [15] Before this court analyses the Defendants’ grounds for striking out the Plaintiff’s Statement of Claim, it is apt to state the law on the striking out of a statement of claim. It is trite that an application under O. 18 r. 19(1)(b) and or (c) of the Rules of Court 2012 (“ROC”) can be succeeded only when the claim is on the face of it “obviously unsustainable”. O. 18 r. 19(1) of the ROC states– “Striking out pleadings and endorsements (O. 18, r. 19)

19.

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that —

it discloses no reasonable cause of action or defence, as the case may be;

it is scandalous, frivolous or vexatious;

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”. [16] In Abdul Rahim Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2000] 1 MLRA 111, the Court of Appeal held that on an application under O. 18 r. 19(1) the court has only to consider whether the claim discloses a reasonable cause of action. The well-established principle is that the court will not summarily strike out pleadings, except only in plain and obvious cases where the claim or counterclaim is plainly and obviously not sustainable. [17] In Bandar Builders Sdn Bhd & 2 Ors v United Malayan Banking Corporation Bhd [1993] 1 MLRA 611; [1993] 4 CLJ 7, Mohamed Dzaiddin bin Hj Abdullah, SCJ (as he then was) held that – "The principles upon which the Court acts in exercising its power under any of the four limbs of O. 18 r. 19(1) Rules of the High Court are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck v. Wilkinson [1899] 1 QB 86, p. 91), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it "obviously unsustainable" (Attorney-General of Duchy of Lancaster v. L. & N.W. Ry. Co. [1892] 3 Ch. 274, CA). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2 All ER 871, CA.). The authorities further show that if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. 3 (which is in para materia with our O. 33 r. 2 Rules of the High Court) (Hubbuck v. Wilkinson) (supra). The Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.”. [18] The Lordship further explained that – “It has been said that so long as the pleadings disclose some cause of action or raise some question fit to be decided by the Judge, the mere fact that the case is weak and not likely to succeed at the trial is no ground for the pleadings to be struck out (Moore v. Lawson [1915] 31 TLR 418 CA); (Wenlock v. Moloney (supra)).”. [19] The issue before the court now is whether or not the Plaintiff’s claim against the Defendants is plainly and obviously unsustainable. Whether the Plaintiff’s action in collecting the deposit less than 10% of the purchase price would render the SPA to be void [20] The grounds raised by the Defendants for this application revolve around the Plaintiff’s action in collecting the deposit less than 10% of the purchase price. The Defendants averred that this would render the SPA to be void and unenforceable as the action was in contravene to subregulations 11(1) and (2) of the HDR. [21] On this issue, upon perusal the cause papers in these appeals, I find that although the purchase price is RM596,155.00 and the Defendants only paid RM29,807.75, they were given automatic rebate of RM77,000.00 under “the Special Promotional Package” upon the signing of the SPA. Taking the amount paid by the Defendants and the rebate, it is clear that the amount paid by the Defendants is more that 10% of the purchase price. Thus, the Defendants’ averment that the Plaintiff had taken less than 10% of the purchase price is misconceived. [22] In any event, even if the Plaintiff’s action is in contravene to subregulations 11(1) and (2) of the HDR, this does not render the SPA to be void. At this point I find instructive the decision of the Federal Court in PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & Anor and other appeals [2021] 2 CLJ 441; [2021] 2 MLJ 60, where it was held that– [76] Thus, it can be said that the general principle of law flowing from this discussion is as follows. When it concerns social legislation and the stronger side to the transaction has committed an illegal act, the existence of a penal provision does not automatically render the contract void. If that were so, then the legislation would, if it were taken to destroy the contract or to erase the weaker side's right to a remedy, be to defeat the very protective purpose for which it was enacted. Accordingly, in such cases, the weaker party to the transaction will not be deemed to be in pari delicto and shall accordingly be entitled to the appropriate remedy. The natural result of this is that the stronger party will have that illegality construed against them. The result of that exercise depends very much on the facts of a particular case. [23] This principle was echoed by another decision of the Federal Court in Maple Amalgamated Sdn Bhd & Anor v. Bank Pertanian Malaysia Bhd [2021] 8 CLJ 409 where it was decided that – [84] Even in PJD Regency (supra), at para. 76, this court most recently endorsed the principle that even if an agreement was formed on the basis of an illegal act (in that case the collection of booking fees), it would be against sound policy to declare so readily that the agreement is void as that would defeat the purpose of the social legislation in question. In making those observations, this court relied on the judgment of the Privy Council in Kiriri Cotton Co Ltd v. Dewani [1960] 1 All ER 177. [24] In light of the above, undoubtedly the Defendants’ averment on this issue is not tenable. Therefore, it is clear to me that the Defendants failed to establish that the Plaintiff’s claim against them is plainly and obviously unsustainable. On that note, I dismiss the Defendants’ appeal against the SCJ’s decision on the dismissal of their application to strike out the Plaintiff’s Statement of Claim. JA-12ANCvC-60-06/2022 [25] In JA-12ANCvC-60-06/2022 the Defendants appealed against the SCJ’s decision on the Plaintiff’s application for summary judgment. [26] O. 14 r. 1 of the ROC 2012 requires the following preliminary conditions to be met before an application for summary judgment can be made:

the defendant must have entered an appearance;

the statement of claim must have been served on the defendant; and

the affidavit in support of the application must comply with the requirements of O. 14 r. 2 of the ROC. [27] In National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283, the Federal Court held that if, these conditions are satisfied, the plaintiff will have established a prima facie case and he comes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him. [28] Likewise in Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544, where the Federal Court held that once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues. [29] Now the question before this court is whether the Defendants have succeeded in establishing triable issues. The Defendants’ arguments [30] At the Sessions Court, the Defendants invoked the similar grounds in their application to strike out the Plaintiff’s claim as their arguments to oppose the Plaintiff’s application for summary judgment. [31] To cut is short, I have canvassed these grounds in JA-12ANCvC- 59-06/2022 above. I do not propose to repeat them here. Suffice it to say that based on my reasons adumbrated in that appeal, the Defendants failed to establish any triable issue in their arguments. [32] It has to be noted that by allowing the Plaintiff’s application for summary judgment, it means that the Plaintiff’s claim for specific performance is allowed. On this note, I find instructive of the judgment of Mohtarudin Baki J (as he then was) in Palmerston Holdings Sdn Bhd v. Neo Cheng Soon & Anor [2007] 1 LNS 182 where the Lordship allowed the developer’s claim for specific performance by saying – Dari keseluruhan fakta, saya bersetuju dengan peguam paintif/perayu bahawa apabila defendan-defendan/perayu hanya membayar 10% deposit dan terus berdiam diri adalah jelas ianya merupakan satu 'spekulasi'. Adakah undang-undang apabila keadaan ekonomi merosot, harga apartmen tersebut jatuh, maka defendan-defendan/perayu tidak ingin meneruskan perjanjian. Perbuatan spekulasi seperti ini harus dibendung. Saya tidak fikir undang- undang perlu membantu defendan-defendan/perayu. Mereka seharusnya bertanggungjawab [33] In another case of Palmerston Holdings Sdn Bhd v. Leow Hsueh Huah [2007] 1 LNS 193, the Lordship again echoed the same – Di dalam kes di hadapan saya pembeli (defendan/perayu) hanya membayar deposit 10% dan terus mendiamkan diri tanpa berusaha membatalkan perjanjian. Ini adalah tidak sihat di dalam urusniaga, samada untuk spekulasi atau apa tujuan sekalipun. Defendan/perayu seharusnya bertanggungan di bawah undang-undang perniagaan dan Specific Relief Act 1950 adalah satu dari undang-undang tersebut. [34] As such, a claim for specific performance is the right approach taken by the Plaintiff based on the following –

the subject unit was already completed by the Plaintiff;

the notice for vacant possession was issued to the Defendants;

the Defendants admitted receiving the progress billings from the Plaintiff but refused to pay the latter; and

for the past three years the Defendants never complained about the validity of the SPA and terminated the SPA but waited until the suit was commenced by the Plaintiff to raise this issue. [35] Based on this note, again, I dismiss the Defendants’ appeal. JA-12ANCvC-61-06/2022 [36] In JA-12ANCvC-61-06/2022 the Defendants appealed against the SCJ’s decision on the Plaintiff’s application in striking out their counter claim. Again, the Defendants invoked the similar grounds in their application to strike out the Plaintiff’s claim as their arguments to oppose the Plaintiff’s application for striking out their counter claim. [37] Once more, I do not propose to repeat my reasons in dismissing the Defendants’ arguments. Summarily, the Defendants failed to establish that their counter claim is plainly and obviously sustainable. Therefore, I dismiss the Defendants’ appeal against the SCJ’s decision on the Plaintiff’s application for striking out their counter claim. Dated: 3.6.2023 - SIGNED - (SHAMSULBAHRI BIN HAJI IBRAHIM) Judicial Commissioner, High Court, Johor Bahru Counsels: For the Appellants/Defendants – Raw Kim Hwa; Messrs. C.F.Wong & Co. For the Respondent/Plaintiff - Patricia Jayne Noeb (Ang Jia Hern with her); Messrs. Izad Kazran & Co Cases referred to:  Abdul Rahim Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2000] 1 MLRA 111  Bandar Builders Sdn Bhd & 2 Ors v United Malayan Banking Corporation Bhd [1993] 1 MLRA 611; [1993] 4 CLJ 7  Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544  Maple Amalgamated Sdn Bhd & Anor v. Bank Pertanian Malaysia Bhd [2021] 8 CLJ 409  National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283  Palmerston Holdings Sdn Bhd v. Leow Hsueh Huah [2007] 1 LNS 193  Palmerston Holdings Sdn Bhd v. Neo Cheng Soon & Anor [2007] 1 LNS 182  PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & Anor and other appeals [2021] 2 CLJ 441; [2021] 2 MLJ 60 Legislations referred to:  Rules of Court 2012 - O. 14 r. 1 & O. 18 r. 19(1)(b) and (c)