Chia Seong Pow v Alexma Corporation Sdn Bhd (B-02(NCvC)(W)-556-04/2024)

The appeal is against the decision of the Shah Alam High Court handed down on 18 March 2024, following a staggered trial over 8 days which spanned the period 23 November 2022 to 25 May 2023.

The core issue in the appeal is whether the Respondent company which was the registered proprietor of two parcels of land in Gombak, Selangor, had agreed to sell the subject properties to the Appellant vide an unsigned $ ^{3^{rd}} $ draft sale and purchase agreement ("SPA").

The Appellant had unsuccessfully sued for, inter alia, specific performance of what he asserted was a concluded contract on the terms of the 3rd draft SPA. He also sought damages in addition to, or in lieu of, specific performance.

These two parcels of land held under Geran 121317 and Geran 124653 comprise 7918 and 7905 square meters respectively, and are also described as Lot 101 and Lot 102.

Unless otherwise expressed, the parties will be referred to as they were in the High Court. Salient Facts

In February 2020, the Plaintiff (PW4) was approached by a property agent, one Lee Chin Chye (PW3), who offered to sell the subject lands for RM5,109,510.00 on behalf of the Defendant.

Negotiations ensued, and progressed to the point where the Plaintiff instructed his solicitors, Messrs Lee & Partners, to prepare the SPA.

On 1 June 2020, the 1 $ ^{st} $ draft was sent by Messrs Lee & Partners to the Defendant's solicitors, Messrs Sonni Pillai & Zarina Din, for their perusal, together with an enquiry on caveats on the subject lands.

On 9 June 2020, the Defendant's solicitors replied by email. They made it clear that the deposit of 10% of the purchase price would have to be released according to the terms set out. They mentioned that they would revert with comments (if any) once the purchaser's details were made known.

On the same day, the Plaintiff's solicitors requested their counterpart for comments pending the provision of the purchaser's details. The Defendant's solicitors reverted with track changes on minor amendments on the $ 1^{\mathrm{st}} $ draft SPA.

On 12 June 2020, the Plaintiff's solicitors emailed the $ 2 ^{n d} $ draft SPA to the Defendant's solicitors with details of the Plaintiff, and all the amendments made by them.

The next day, there was a turn of events. The Plaintiff had discovered through a land survey that a large part of Lot 101 - to be specific, 3,119 square meters or 33,572.64 square feet - could not be used due to the steepness or high gradient of the land.

That same day, by WhatsApp, the Plaintiff's solicitors informed their counterpart accordingly and also sent the land survey plan. At the same time, they proposed a revised price of RM30 per square foot which would reduce the purchase price from RM5,109,510.00 to RM4,102,341.00. They asked the Defendant's solicitors to convey the message to the Defendant.

On 16 June 2020, Ms Chloe Lee Sin Ying (PW2) from the legal firm representing the Plaintiff texted Mr Frankie Tan Lyn Seang (DW2) by WhatsApp.

She informed Frankie Tan that their respective clients had agreed on the reduced price.

There followed a series of texts with timestamps.

Chloe Lee requested him to confirm the agreed reduction in the purchase price with the Defendant so as to enable them to proceed immediately (12:21). She asked him to revert the same day (13:14), to which he texted that he would try (13:31).

She had also emailed the Defendant's solicitors for confirmation by their client on the reduced purchase price.

At 15:34, Frankie Tan texted Chloe Lee "Ok proceed." There was no indication that there were any other amendments.

Importantly, that was followed by the Defendant's solicitors' email at 16:08 which states, inter alia: "Please be informed that our client has agreed to the reduction of the purchase price due to the reduction of usable land area. Therefore the reduced price shall be RM4,102,341.00."

Consequently, the Plaintiff's solicitors sent the $ 3^{\mathrm{rd}} $ draft SPA incorporating the reduced total consideration for Lots 101 and 102 to be signed by the Defendant.

However, there was no response from the Defendant or its solicitors, despite the Plaintiff's solicitors' reminder email on 22 June 2020 for the SPA to be signed by the Defendant.

On 29 June 2020, the Plaintiff's solicitors emailed the Defendant's solicitors' proposing that there be one SPA for each of the two subject lands, while all other terms remained the same. There were two draft agreements sent to the Defendant's solicitors which will collectively be referred to as the $ 4^{\mathrm{th}} $ draft SPA.

On 1 July 2020, the Plaintiff proposed that his wife be added as a purchaser. To that end, a $ 5^{\mathrm{th}} $ draft SPA was sent by his solicitors to the Defendant's solicitors.

The Defendant's solicitors did not respond to the proposed changes vide the $ 4^{th} $ or $ 5^{th} $ drafts.

Subsequently, the Plaintiff sent reminders relating to the execution of the $ 3 ^{rd} $ draft SPA, including an email from Messrs Lee & Partners dated 13 August 2020 which stated that the Plaintiff had paid the 10% deposit to his solicitors as stakeholders.

The Plaintiff's solicitors' ultimatum of 18 September 2020 by email was to no avail.

It was thus the Plaintiff filed his action on 4 January 2021 for, inter alia, specific performance and damages on the back of the $ 3^{rd} $ draft SPA for Lot 101 and Lot 102. The Competing Contentions and the High Court's Findings

The crux of the Plaintiff's claim for specific performance and/or damages was that - although the Defendant had evinced an intention not to be bound by the concluded contract which incorporated the reduced purchase price of RM4,102,341.00 - he was ready, able and willing to perform his part of the bargain, more so as he had paid the requisite 10% deposit to his solicitors as stakeholders.

In the main, the Defendant raised three defences.

First, it argued that the property agent Lee Chin Chye (PW3) was never authorised to sell Lots 101 and 102. Koong Foo Seong (DW1), the Defendant's sole director, gave evidence that his company had never appointed PW3 to put the subject lands on the market.

The Defendant's argument did not find favour with the learned trial judge ("LTJ") who found that the Defendant had in fact appointed PW3 as its agent.

We need hardly add that the ensuing exchange of draft agreements between the parties' respective solicitors militates against the Defendant's assertion that PW3 was never vested with authority to offer the subject lands for sale to the Plaintiff.

Second, while the Defendant could scarcely deny the appointment of Messrs Sonni Pillai & Zarina Din to act on its behalf in respect of the sale documentation - in view of the various emails and WhatsApp messages adduced at the trial - the Defendant argued that it had never authorised its solicitors to accept any offers for the subject lands.

The Defendant relied on its letter dated 24 February 2020 seemingly signed by Koong, which the Plaintiff contends was cunningly backdated.

Koong in J6 of his witness statement averred: "Saya mengarahkan secara nyata bahawa Tetuan Sonni Pillai & Zarina Din tidak berkuasa menerima sebarang tawaran harga pembelian daripada Plaintif tanpa persetujuan saya terlebih dahulu. Perkara ini terkandung didalam surat Defendan bertarikh 24-2-2020 yang dikeluarkan kepada Sonni Pillai & Zarina Din dan terdapat di MS 43 Ikatan Dokumen Bersama."

Koong, however, buckled under extensive cross-examination on his purported letter. When it was put to him that the letter " (a)dalah tidak benar. Fictitious, Adalah tidak benar dan tarikhnya telah dibelakangkan kepada 24/02/2020," he answered "Saya tidak pasti" which was the same answer he gave when it was put to him that the letter was created after the Defendant was informed that the Plaintiff would take legal action.

When Koong was cross-examined as to whether he had signed the letter, he asked for the question to be repeated and later went on to say: "Saya sudah lupa." When pressed, Koong answered: "Saya hanya boleh baca perkataan-perkataan yang simple, yang mudah sahaja."

Koong's credibility was not salvaged in re-examination, considering he also admitted: "Saya tidak boleh ingat siapa yang menaip surat ini sebab saya tidak tahu mengenai ini."

The LTJ observed: "Remark saya macam ini. Saksi ini sentiasa menjawab tidak pasti."

Although the LTJ did not make an express finding on the letter dated 24 February 2020 - which was clearly intended to negate or undermine the Defendant's solicitors' "Ok proceed" text at 15:34 and their subsequent confirmatory email at 16:08 - His Lordship held: "Selepas menimbangkan keterangan yang dikemukakan saya berpuas hati dan mendapati tetuan Sonni Pillai mempunyai kuasa untuk mewakili Defendan bagi berbincang dan memasuki perjanjian dengan Plaintiff"

The $ 1^{\mathrm{st}} $ and $ 2^{\mathrm{nd}} $ defences were accordingly rejected by the LTJ, in respect of which the supporting evidence was solid.

Further, there was no cross-appeal.

That brings us to the $ 3^{rd} $ or remaining defence raised which found favour with the LTJ.

As indicated at the outset, it is the core issue in the appeal before us.

The LTJ accepted the defence that there was no concluded contract, mainly because the $ 3^{\mathrm{rd}} $ draft SPA was not signed, and there were further proposed changes through the $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ drafts.

In so concluding, the LTJ rejected the Plaintiff's contention that the $ ^{3rd} $ draft had become a valid and binding contract since all material terms had been agreed upon, as evidenced by the exchange of WhatsApp messages and emails. Analysis of the High Court's Findings

We are mindful that a court sitting in an appellate capacity should be slow to disturb the findings of a trial judge to whom the responsibility of evaluating the credibility of a witness has been entrusted. The trial judge has the audio-visual advantage of evaluating the witnesses, whereas an appellate court looks at the cold print of the appeal records. See Tengku Dato' Ibrahim Petra Tengku Indra Petra Perdana Bhd & Anor Appeal [2018] 2 CLJ 641 where the Federal Court cited the decision of the House of Lords in Henderson v. Foxworth Investments Ltd and Another [2014] 1 WLR 2600 with approval.

In Rasidin bin Partorjo v Frederick Kiai [1976] 2 MLJ 214, the Federal Court has made it clear that an appellate court "starts with the working presumption that the decision appealed against is right in every respect."

The exception arises when a trial judge is plainly wrong, such as when the decision is premised on an error of law or insufficient appreciation of the evidence.

The law in this respect is well settled and has been expressed by the Federal Court in, among other cases, Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67; [2020] 10 CLJ 1 and Gan Yook Chin & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1.

With all that said by the apex court for guidance, while reviewing the judgment, we formed the view that the LTJ fell into error when he held: “[35] Berdasarkan keadaan di dalam kes ini saya berpuas hati deraf ketiga perjanjian tersebut tidak mempunyai terma-terma yang jelas telah dipersetuju oleh kedua-dua pihak Dari keterangan yang dikemukakan saya dapati tidak terdapat persetujuan muktamad di antara kedua-dua pihak tentang syarat utama kontrak iaitu harga tanah yang dikatakan hendak dijual oleh Defendan kepada Plaintif. Keterangan yang dikemukakan Plaintif bahawa terdapat rundingan, pertukaran surat menyurat di antara pihak pihak terdapat beberapa deraf perjanjian jual beli telah disediakan oleh peguam Plaintif tidak membuktikan terma perjanjian telah dimuktamad dan dipersetujui oleh kedua-dua pihak.”

The LTJ's decision that the terms of the $ 3^{\mathrm{rd}} $ draft SPA were not yet finalised and lacked clear terms which had been agreed is plainly wrong, both on facts and in law.

The parties had in fact agreed on all the essential terms in the 2nd draft but clearly and unequivocally agreed to revise the purchase price in the 3rd draft.

With the $ 3^{\mathrm{rd}} $ draft having been finalised and agreed upon, the parties had reached consensus ad idem on the essential elements of a concluded sale and purchase of land agreement. For all intents and purposes, they had struck a bargain recognised in the eyes of the law as a concluded contract.

They had agreed on the three Ps: parties, property, and purchase price. The identity of the vendor and the purchaser were not in doubt. The properties had been identified and described with sufficient particularity. The reduced purchase price had been settled and agreed upon.

As such, the Defendant cannot rely on Ayer Hitam Tin Dredging Malaysia Bhd v Y.C Chin Enterprises Sdn Bhd [1994] 2 MLJ 754 to assert that there was an absence of intention by the parties to be bound.

It is to be noted that the LTJ found the Defendant 's solicitors had ostensible authority to bind the Defendant. The LTJ referred to Cheng Han Guan v Perumahan Farlim Penang Sdn Bhd & Ors [1994] 1 CLJ 19 where Edgar Joseph Jr SCJ sitting as a High Court judge explained that agency by estoppel arises when a principal acts in such a manner that a third party is led to believe that another person, the agent, has authority to act on the principal's behalf. In spite of holding that the Defendant's solicitors had ostensible authority to bind their client on accepting the reduced purchase price, the LTJ fell into error when he held that the parties had not reached a binding agreement.

To recapitulate, on 16 June 2020, the Defendant's solicitor Frankie Tan had texted his counterpart "Ok proceed" at 15:34, and his firm Messrs Sonni Pillai & Zarina Din itself had emailed its counterpart on 16 June 2020 at 16:08: "Please be informed that our client has agreed to the reduction of the purchase price... Therefore the reduced price shall be RM4,102,341.00."

The description of the document/agreement as a draft for each iteration is only an expression of convenience, and does not negate the irrefutable fact that the essential terms had been negotiated, agreed, and reduced into writing in the $ 3^{\mathrm{rd}} $ draft.

A perusal of the WhatsApp messages and emails passing between the parties' respective solicitors on 16 June 2020 - as narrated earlier - clearly points to a concluded contract.

At that point in time, the parties were no longer uncertain as to whether there were terms which still needed to be agreed upon.

The $ 4^{\mathrm{th}} $ and $ 5^{\mathrm{th}} $ drafts were merely proposals to vary what was already a concluded and binding contract, by splitting the sale of the two lots into one agreement each or by adding an additional purchaser. The Defendant did not respond after having agreed to all material terms, including the reduced purchase price, in the $ 3^{\mathrm{rd}} $ draft SPA.

The factual matrix here is markedly different from that in Kheamhuat Holdings Sdn Bhd v The Indian Association, Penang [2006] 4 MLJ 656. There, among other materially determinative facts, the memorandum of understanding expressly stipulated that there would be no legally binding contract between the parties until the execution of a formal agreement.

In the leading case of Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327, the Federal Court held that where the essential terms have been agreed and embodied in what might be termed an open contract, the parties are bound and need not await the execution of a formal agreement - unless an examination of the correspondence passing between the parties indicates otherwise.

It all depends on the facts.

The outcome may turn one way or the other. The court may find, as it did in Kheamhuat Holdings (supra), that the parties had agreed that they would not be bound and there would be no binding agreement until a formal agreement had been executed.

By contrast, in the appeal before us, the Plaintiff's solicitors had on 16 June 2020 sent the 3rd draft SPA (after incorporating the mutually revised purchase price) to be executed.

Such an act was - if we may be permitted to borrow the words of Gopal Sri Ram JCA (as His Lordship then was) in Charles Grenier (supra) - "to merely formalize the agreement already concluded between the parties."

Prior to that, the $ 2^{n d} $ draft SPA had already incorporated all the minor amendments the Plaintiff sought via his solicitors.

We find further support in Sou Yong v Yuzin bte Abdullah @ Ho Yuzin [2006] 4 MLJ 209, an authority cited for the Appellant, where the Court of Appeal held: "only three things are required to be specified for an arrangement for sale to constitute an open contract, namely the names of the parties, a description of the property, and a statement of the price, all of which are specified in the subject letter in this case. In mentioning 'the terms they considered essential' among the terms that the parties had identified in Charles Grenier, Gopal Sri Ram JCA was merely stating what the parties happened to have identified besides the property and the price and could not have intended to say that for an arrangement to constitute an open contract the parties must also have identified other terms. If that were the law, an open contract can never be determined with certainty to have been established, because there will be no end to terms that may be said to have not been identified. The law must be specific as to the terms that must be identified for the formation of an open contract."

Before we conclude, we find it necessary to deal with one other matter, viz, the undisclosed sale of the subject lands which formed the subject matter of the dispute, while the trial was ongoing. It was a matter that prompted a further exchange of submissions.

While under cross-examination on 23 May 2023, Koong (DW1) testified that the subject lands still belonged to the Defendant whereas, unbeknownst to the Plaintiff at that time, Lots 101 and 102 had already been sold to a third party NHG Glass Industries Sdn Bhd vide sale and purchase agreements dated 19 August 2022.

The Plaintiff only discovered in March 2025 that the subject lands had been sold, that is, well after the trial. He then filed a Notice of Motion on 7 May 2025. He wanted to adduce evidence of what he described as a surreptitious sale which was evidenced by, among other documentary evidence, the land search result dated 21 March 2025. The application was granted.

The sale brought about consequences in its wake.

The Plaintiff wanted this court to take cognisance of Koong's credibility at the trial. It suffices for us to say Koong's credibility was found wanting by the LTJ as regards allegations that the property agent Lee was not authorised to sell the subject lands to the Plaintiff, and the Defendant's solicitors were not authorised to accept purchase offers for the subject lands. The LTJ had also made adverse remarks about Koong's credibility during the trial. We find no reason to disagree.

More importantly, the sale rendered the decree of specific performance academic. It was a fait accompli. That, however, does not mean that the Plaintiff is without remedy. It will be recalled that the Plaintiff had prayed for damages in addition to or in lieu of specific performance.

Learned counsel for the Plaintiff urged this court to lift the corporate veil of the Defendant company in order to hold Koong, as its sole director and alter ego, personally liable. He was concerned that the Plaintiff might end up with a paper judgment. He highlighted the omnibus prayer in the Statement of Claim for "such further and/or other reliefs." He relied on the decision of the Federal Court in Tan Teck Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1996] 1 MLJ 261. He further urged this court to invoke its inherent jurisdiction to right the wrong that had been done to his client.

Learned counsel for the Plaintiff also cited Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o Pennusamy & Ors (on their behalf and for the 213 sub-purchasers of plots of land known as PN35553, Lot 9108, Mukim Hutan Melintang, Hilir Perak) and other appeals [2015] 1 MLJ 773 where an issue was "whether a Court is entitled to lift the corporate veil of a company in order to do justice despite it not being the pleaded or argued case of the claimants that the company concerned was used as an engine of fraud."

In that case, the Federal Court held that "in some instances, evidence adduced during the hearing can overcome the defects in pleadings as long as the other party is not taken by surprise."

In addition, the Plaintiff sought exemplary damages, which learned counsel for the Defendant submits ought to be visited upon a wrongdoer in limited circumstances.

Learned counsel for the Defendant cited a litany of cases, together with passages reproduced in extenso.

Among them are Tradewinds Properties Sdn Bhd v Zulhkiple Bin A Bakar & Ors [2019] 1 MLJ 421 where the Court of Appeal held that exemplary damages are awarded "to signify disapproval, condemnation or denunciation of the defendant's tortious act or... contumelious disregard for the right of the plaintiff," and Lim Guan Eng v Ruslan Bin Kassim and Another Appeal [2021] 2 MLJ 514 where the Federal Court held that "if the defendant acted with the motive of material gain in the belief that he would be better off financially if he violated the plaintiff's rights than if he did not, then an award of exemplary damages can be considered." The Defendant presumably takes the position that the limited circumstances in which exemplary damages are awarded do not apply here.

As for the issue whether the corporate veil ought to be lifted here, a litany of cases was again cited with various passages reproduced in extenso, including a caveat that a derivative action can only be commenced in the name of the company. We take it that the Defendant opposes the lifting of the corporate veil.

We have given the submissions of the parties our anxious consideration.

We are unable to accede to the Plaintiff's submissions to lift the corporate veil so as to hold Koong, the Defendant's sole director, personally liable for general damages to be assessed and exemplary damages.

Our paramount concern is that Koong was not named as a Defendant in the action. He has a right to be heard on both personal liability and the quantum, if personal liability is to be visited upon him. For now, it is only the Defendant company which is being called upon to answer, for Koong is not a respondent.

Before a person can be punished, he must be afforded a proper opportunity to be heard. The rule finds expression in the legal maxim audi alteram partem (no man shall be condemned unheard). See Broom's Legal Maxims (10th ed) p.65 et seq: "It has long been received that no one is to be condemned, punished, or deprived of his property in any judicial proceeding, unless he has had an opportunity of being heard."

The rule is one of great antiquity, honoured in its observance. In R v. The Chancellor, Masters and Scholars of the University of Cambridge [1723] 88 ER 111, Fortescue J held: "... the objection for want of notice can never be got over. The laws of God and man both give the party an opportunity to make his defence, if he has any... even God himself did not pass sentence upon Adam, before he was called upon to make his defence."

Moreover, the trial was conducted and proceeded on the basis that ownership of Lot 101 and Lot 102 was still vested with the Defendant, and that the primary relief of specific performance was still available at the end of the trial.

Whether or not the corporate veil ought to be lifted, and whether or not there was fraud or some other reason to justify it, was not in issue at the trial.

An appeal cannot be decided on what was not canvassed in the court below, and what has not been set out in the unamended Memorandum of Appeal.

In Pacific Forest Industries Sdn Bhd & Anor v Lin Wen-Chih & Anor [2009] 6 CLJ 430, the Court of Appeal allowed an appeal on the basis of a frustrated contract although that was not pleaded and canvassed in the High Court. The Federal Court in turn allowed the appeal. Zaki Azmi CJ, in delivering the judgment, held: [18] In the instant appeal, the case was pleaded on a breach of contract and the 1st defendant's defence was that the plaintiffs had only ordered one shipment, three shipments short of the terms of the agreement, although the 1st defendant was ready and willing to supply the timber products. The reply contended otherwise. There was nothing mentioned in the pleadings which could be related to frustration. [19] It is trite that in pleading frustration, particulars which give rise to frustration must be provided specifically in the pleadings. The parties in this case had not pleaded or submitted that the contract in question had been frustrated. Thus, the defendants were highly prejudiced when the Court of Appeal decided on the issue of frustration."

As for an award of exemplary damages, it need not be pleaded as against another litigant (see the Court of Appeal's decision in Kerajaan Negeri Selangor v Sagong Bin Tasi & Ors [2005] 6 MLJ 289). Nonetheless, Koong was not a party during the trial and he is not a respondent before us. As against the Defendant company, the issue of exemplary damages may be more appropriately dealt with in separate proceedings, given that the issues were different at the trial.

The Plaintiff's concerns about a paper judgment are not borne out in the absence of supporting evidence. Whether he initiates separate proceedings to recover general and exemplary damages from Koong personally in due course, be it under section 540 of the Companies Act 2016 or otherwise, is not a matter before us and nothing more needs to be said of it. Conclusion

For the reasons given, we find that the High Court was plainly wrong in dismissing the Appellant's action on the basis that the $ 3^{rd} $ draft SPA was not a concluded contract.

The appeal is allowed, and the decision of the High Court is hereby set aside.

As an order for specific performance cannot be granted on the present facts, the High Court is to assess the damages payable to the Appellant by the Respondent.

The Appellant is awarded costs of RM150,000.00 here and below, subject to payment of the allocatur fee. Any costs paid by the Appellant, on account of the order of costs by the High Court, are to be refunded within 14 days from today. Dated the $ 2 6^{th} $ day of February 2026 (Lim Hock Leng) Judge Court of Appeal Malaysia Counsel for the Appellant Brian Ernest Cumming Pn. Ashvinpal Kaur (Messrs Gideon Tan Razali Zaini) Counsel for the Respondent M. Edmund (Messrs Edmund, Saravanan & Babu)