Baguda (M) Sdn. Bhd. v Brady Technology Sdn. Bhd. (PA-22NCvC-183-08/2019)

Tenancy Agreements executed by both parties. [17] If the Annex Building Agreement and the Tenancy Agreements are void, the defence of limitation will not be available to the Defendant. This is because a void contract does not generate any enforceable right or duty. The Plaintiff prays for the reliefs as endorsed on the Writ and for the Defendant’s counter-claim to be dismissed with costs. D. DEFENDANT’S SUBMISSION [18] The Plaintiff’s claim, being a claim based on contract, is barred by Limitation Act 1953 due to the following reasons: - i. The reliefs relate to the Annex Building Agreement entered on 18-2-2009 and 3 Tenancy Agreements entered on 16 -6-2010, 1-8-2013 and 11-8-2016 respectively. ii. The discovery of the alleged mistake in the year of 2019 cannot defeat the defence of limitation because the alleged mistake could have been “discovered” with reasonable diligence. [19] The Defendant had stated in various draft agreements that the proposed Annex Building was to be 25,000 square feet, it is a fact that various schedules to the Annex Building Agreement the three (3) Tenancy Agreements have figures consistent with 25,000 and the Defendant had been paying rent from August 2018 based on the Annex Building being 25,000 square feet is conclusive evidence that both Plaintiff and Defendant had at all times agreed that the size or built-up area of the Annex Building was to be or was 25,000 square feet only. [20] There is no “mistake” or “misrepresentation” proven in this case: i. The parties voluntarily entered into and signed the Annex Building Agreement, and all subsequent Tenancy Agreements. The Annex Building Agreement and Tenancy Agreements provide an area larger than 25,000 s qft, and the Plaintiff continued to sign 3 of these agreements from the year 2010 to 2016; ii. The alleged agreement to build an annex building of 25,000sqft was only provisional at an early stage of negotiation. It was not final. The possible variation of the size of the Annex Building was communicated to the Plaintiff during negotiation, and no concern was ever raised by the Plaintiff; iii. There is no addition to the Annex Building as planned. The exterior provided in the agreements are exactly the same as the actual Annex Building; iv. The Plaintiff approved the actual size of the Annex Building which is larger than 25,000 sqft in various submission drawings and plans; v. The Annex Building Agreement or Tenancy Agreements do not provide the obligation on the part of the Defendant to construct an exact size, but only an approximate size. [21] Even if there was mistake as to size as alleged, the alleged mistake is not essential in nature: i. Clause 5 of the Annex Building Agreement provides that the size of the Annex Building is not essential to the agreement; ii. The size indicated in the Annex Building Agreement and Tenancy Agreements are mere estimation; ii. Pre-contractual communication between the parties by emails indicates that the size of the Annex Building was not a fundamental matter; iii. Plaintiff takes no effort to find out the size of the Annex Building since the year of 2010 until 2019. During this period, PW-1 has been engaging with the Defendant during tenancy for maintenance of the Annex Building. [22] The entire agreement clause in the Annex Building Agreement prevents the claim of the Plaintiff for repudiation founded on precontractual negotiation and representation. In addition, actions and inactions of the Plaintiff give rise to the application of the doctrine of estoppel preventing the Plaintiff from demanding repudiation of the Contracts: - i. The Annex Building Agreements provide an area larger than 25,000sqft, and the Plaintiff continued to sign another 3 tenancy agreements from the year of 2010 to 2016; ii. The Defendant was allowed to be a tenant on the terms and conditions set out in the Annex Building Agreement and Tenancy Agreements from 2010 to 2019; iii. The Plaintiff signed and approved various submission drawing to construct the Annex Building with a built-up area of 2,901sqm. [23] The tenancy from 2010 to 2019 having been performed, completed and thereby discharged and the Plaintiff cannot declare the agreements void in law. Therefore, the refusal by the Plaintiff to grant further extension is in breach of the promises in the Annex Building Agreement. The Defendant is entitled to the order of specific performance in the circumstances of this case. E. ANALYSIS AND FINDINGS ISSUES [24] The parties submitted 11 issues to be tried. Having perused all the issues, I am of the view that the issues are summarised and to be determined as follows: [a] Whether the Annex Building Agreement dated 18.2.2009 and all the three

Tenancy Agreement dated 16.6.2010, 11 1.8.2013 and 11.8.2016 are void on the ground of mutual mistake or the Defendant’s misrepresentation. [b] Whether the Plaintiff is estopped from contending the Annex Building Agreement and the Tenancy Agreements are void. [c] Whether the option to renew the tenancy for the 3rd option period had been validly exercised by the Defendant giving rise to a tenancy being entered by the Plaintiff and the Defendant from 1.8.2019 until 31.7.2022? [d] Whether the Plaintiff’s action is barred by limitation under Section 6 Limitation Act 1953 or such limitation had been postponed under Section 29 Limitation Act 1953. MUTUAL MISTAKE [25] The core of the Plaintiff's case is that there was a mutual mistake and/or misrepresentation by the Defendant. The Plaintiff's case is that at all material times before and when the Annex Building Agreement was executed, it was agreed that the Annex Building will have a built-up area of 25,000 square feet with the rental fixed at RM 1.50 per square foot. [26] Around February and March 2019, when the negotiation between the parties on the "new rental" for the 3rd option period, the Plaintiff discovered that the actual built-up area of the Annex Building rented to the Defendant was more than 25,000 square feet. The Plaintiff alleged that there was a mutual mistake of the agreed size of 25,000 square feet but not the size as stated in the Annex Building Agreement and in all the Tenancy Agreement. [27] The Defendant on the other hand submitted there was no mutual mistake or misrepresentation on the size of the buildup area stated In the Annex Agreement since the Plaintiff at all material time was aware of it and agreed by signing all the agreements. [28] It was not disputed that the parties have voluntarily entered into and signed the Annex Building Agreement, and all subsequent Tenancy Agreements where it stipulates an area larger than 25,000 square feet. The Plaintiff has continued to sign all the three (3) Tenancy Agreements and has received the agreed rental with build-up area as mentioned in all the agreements. If the build-up area of 25,000 square feet is so fundamental to the Plaintiff as to render all agreements to be void, the Court must be satisfied that the Plaintiff must have intended it to be included in the agreement of which I failed to see the Plaintiff had done so. [29] I observed that the build-up area of 25,000 square feet was only provisional at an early stage of negotiation and it was never made final. The possible variation of the size of the Annex Building was communicated to the Plaintiff during negotiation by the Defendant and no concern was ever raised by the Plaintiff. Pre-contractual communication between the parties by emails indicates that the size of the Annex Building was not a fundamental matter because the Plaintiff takes no effort to verify the size of the Annex Building since the year of 2010 until 2019 which eventually led to the signing of the agreements with the size stated therein. The Plaintiff even approved and signed the actual size of the Annex Building which is larger than 25,000 square feet in various submission drawings and plans. When the intended size of the Annex Building Agreement was exchanged in the draft, no amendment was made by the Plaintiff. In fact, the Plaintiff was the one who prepared all the 3 Tenancy Agreements. Moreover PW-2, the director of the Plaintiff and also a practising lawyer admitted that she was the one who prepare the Tenancy Agreements and admitted her mistake for not giving sufficient attention to the Agreements. With these facts, I am of the considered view that it shows the Plaintiff has knowledge about the size of build-up area as agreed in all the Agreements. This reflects the parties’ intention of the agreed size of the buildup area as stated in the agreements. [30] The law is settled that the Court must not allow a party to take advantage of its own wrong as said by the Federal Court in Ong Thye Peng v. Loo Choo Teng & Ors [2008] 1 CLJ 571; [2008] 4 MLJ 31, Su Wee Lip @ Philip Su v. Hj Lassim Abdul Rahman [2009] 1 MLJ 580. [31] In any event, the law is clear that in every case, the person who signs the document must exercise reasonable care to read and to understand the document prior to signing the same wherein it is reasonable to expect that more care should be exercised if the document is thought to be of an important character than if it is not. [31] A mutual mistake occurs when all the parties to a contract misunderstand each other and unconsciously agree on a fundamental aspect of the contract despite it being a mistake. Under mutual mistake, the effect can lead to the contract to become either void or voidable. The reason for this is that there was no consensus ad idem or agreement between the contracting parties concerning the fundamental issue underlying the contract. [32] In Southwind Development Sdn Bhd v. Hass Plantation Sdn Bhd [1995] CLJU 225; [1995] 1 LNS 225; [1996] 5 MLJ 85, the Court held that: “Further, for a mistake to be mutual, it 'must be common to both parties, and it is essential that the parties should have had precisely the same intention on the point on which the document is inaccurate….” [33] The Federal Court in Menta Construction Sdn Bhd v. Lestari Puchong Sdn Bhd [2015] 8 CLJ 1117 state that - "[9]... In common mistake, both parties make the same mistake. Each knows the intention of the other and accepts it, but each is mistaken about some underlying and fundamental fact. The parties, for example, are unaware that the subject matter of their contract has already perished. In mutual mistake, the parties misunderstand each other and are at cross-purposes. [34] In this case It would be absurd if there was a mutual mistake and it was kept going for 10 years and eventually the Plaintiff then just transfer its loss arising from such mistake to the Defendant. For the reasons above I find that the Plaintiff failed to prove that it has a valid cause of action on the ground of “mutual mistake” to constitute all the agreement as void. MISREPRESENTATION [35] There is no general obligation to act in good faith during negotiations of commercial contracts. This is not to suggest that there was lack of good faith on the part of the Defendant. Instead, this is to state the correct threshold to find misrepresentation. The Federal Court in Lai Fee & Anor v. Wong Yu Vee & Ors [2023] 4 CLJ 1; [2023] 3 MLJ 503 held that: The general rule is that mere non-disclosure does not institute misrepresentation, or there is in general no duty on the parties to a contract to disclose material facts to each other, however dishonest such non-disclosure may be in particular circumstances. [36] In Sim Thong Realty Sdn Bhd v. Teh Kim Dar @ Tee Kim [2003] 3 CLJ 227; [2003] 3 MLJ 460; [2003] 4 AMR 460, the Court of Appeal quoted the following regarding the elements of an actionable misrepresentation (at page 465, MLJ): "A misrepresentation may be defined as an unambiguous, false statement of fact which is addressed to the party misled and which materially induces the contract. This definition may be broken down into three distinct elements. The first is that the representation must be an unambiguous statement of fact, the second is that it must be addressed to the party misled and the third is that it must be a material inducement to entry into the contract." [37] In my view the issue of misrepresentation alleged by the Plaintiff does not arise. The Annex Building Agreement and Tenancy Agreements reflected the parties’ intention at all material times. When the intended size of the Annex Building was exchanged in the draft, no amendment was made by the Plaintiff which indicates the Plaintiff had knowledge of the intended size of the built-up area. The actual size was provided in the Submission Drawings and the Plaintiff thereby agreed, signed and approved the Submission Drawings. The Court of Appeal in Juahir Sadikon v. Perbadanan Kemajuan Ekonomi Negeri Johor [1996] 4 CLJ 1 which reaffirms the rule that "he who asserts must prove". If the Plaintiff, who alleges there was a misrepresentation, it must prove such allegation. The onus is on the Plaintiff which I find that the Plaintiff has failed to do so, The Plaintiff is estopped from claiming that Defendant had misled the Plaintiff as such unfounded allegations premised on conjecture cannot hold in light of the evidence. [38] Following the above finding, I hold that all the agreements are valid and binding on parties including the options for renewal of the tenancy. The Defendant’s contention raised by the Defendant on limitation is no longer an issue to be determined by this Court. [39] I therefore dismissed the Plaintiff’s claim and allowed the counterclaim by the Defendant with costs. An Order for damages at paragraph 38 (h) and (i) of the Counter Claim is not allowed. SGD (ROZANA BINTI ALI YUSOFF) Judge High Court of Penang Dated 7th January 2024 Counsels M. Thayalan (Messrs Thayalan & Associates) on behalf of the Plaintiff. Yap Boon Hau, Goh Zhi En & Yeap Chi Cheng (Messrs Mah-Kamariyah & Philip Koh) on behalf of the Defendant.