Chong Tin Fon v 1. ) Chan Teck Chong (WA-22NCC-274-06/2021)

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1 DALAM MAHKAMAH TINGGI DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN KUALA LUMPUR GUAMAN NO: WA-22NCC-274-06/2021 ANTARA CHONG TIN FON (NO. K/P: 640822-08-6479) … PLAINTIF

Preamble

Pursuant to the SSA, the plaintiff resigned as a director of the Company on 22 April 2017. [12] However, the defendants did not fully pay the sum of RM15,000,000 to the plaintiff, with the amount of RM10,000,000 remaining unpaid. The Plaintiff’s Shares were also not transferred to the defendants. [13] As a result, the parties commenced various legal actions against each other. [14] To resolve the impasse, a meeting was held in January 2020. The plaintiff claimed the meeting led to the January 2020 Agreement, an oral agreement between the parties that contains the following terms: S/N vrxc8ZTsUqf3N2eAKocvA a. The plaintiff and the defendants agreed to withdraw their respective legal actions; b. The parties agreed to fulfil the terms of the SSA, including payment of the remaining RM10,000,000 to the plaintiff; c. The defendants will make an initial payment of RM80,000, followed by RM30,000, pending the execution of a formal agreement; and d. The defendants will pay for the plaintiff’s taxes over the Motor Vehicle, and will transfer identified properties to the defendants. [15] The defendants on the other hand, referred to negotiations entered into by the parties in June 2020, which resulted in the June 2020 Agreement. The defendants claimed that pursuant to the June 2020 Agreement, the parties had agreed to withdraw the actions they had filed against each other, and agreed that there shall be no further claims between them. The defendants also claimed that payments of amounts due under the SSA were subject to the future financial prospects of the Company. [16] All legal actions between the parties were withdrawn on 15 and 22 June 2020. S/N vrxc8ZTsUqf3N2eAKocvA the court, the court finds that the agreement that binds the parties is the was witnessed by two advocates and solicitors. It contains terms concerning the plaintiff’s agreement to sell the Plaintiff’s Shares, and the consideration of RM15,000,000 for the purchase of the Plaintiff’s Shares. The manner of payment of the sum of RM15,000,000 is also set out in the contract, and as such, the parties are bound by its terms (see Polygram Records Sdn Bhd v Hillary Ang & 4 Ors (collectively known as “The Search”) & anor [1994] 3 CLJ 806 and Syarikat Binaan Utara Jaya v defendants had admitted to paying approximately RM5,000,000 to the Which agreement binds the parties? [17] Having considered both documentary and oral evidence before SSA. [18] The SSA was executed by the plaintiff and the defendants, and SSA. [19] In this regard, the SSA contains all the elements of a concluded Koperasi Serbaguna Sungai Glugor Bhd [2009] 1 CLJ 786). [20] The court also noted that both parties had acted on the SSA. The plaintiff. This is set out in paragraph 7.7 of the amended defence, which states that: “selepas penyempurnaan SSA, pembayaran bahagian-bahagian wang dalam jumlah keseluruhan sebanyak atau sekitar-RM4,989,075.87 RM5,132,090.44 (‘Pembayaran-Pembayaran tersebut’) telah dibuat oleh Syarikat tersebut dan/atau Winfill Construction kepada Plaintif dan/atau S/N vrxc8ZTsUqf3N2eAKocvA penerima namaannya (nominees) dan/atau pemiutang-pemiutangnya dan/atau Pemberi-Pemberi Pinjam tersebut bagi dan untuk pihak Defendan-Defendan …” (emphasis added) [21] Nonetheless, during trial, the 1st defendant denied that the payment was made pursuant to the SSA. The 1st defendant further testified that the SSA did not exist as the Plaintiff’s Shares had not been transferred to the defendants. The 1st defendant’s testimony is inconsistent with and is an obvious departure from the defendants’ pleaded case. As such, guided by the following passage in Saadian bte Karim v Ong Ting Chai [1996] 1 LNS 96, I have treated his testimony with caution: “The deviation of the plaintiff's evidence from her pleadings on the ownership of the premises requires some consideration. It is settled law that vital and decisive issues must be pleaded (see Lee Ah Chor v Southern Bank Bhd [1991] 1 CLJ 667). The ownership of the premises in question in this case is indeed a vital and decisive issue for the plaintiff's case. It was for that reason that she had pleaded in para 7 of the statement of claim that she had rented the premises to the defendant implying that she is the owner of it. The defendant denied this paragraph and alleged that he is the rightful owner of the premises in his statement of defence. The plaintiff abandoned her pleading during the trial and agreed with the case for the defendant on the issue of the ownership of the premises. It amounts to an admission of the defendant's version of this issue thereby rendering that part of S/N vrxc8ZTsUqf3N2eAKocvA the plaintiff pursuant to the SSA is an essential fact pleaded by the defendants. If it had been necessary to depart from the facts as pleaded, an amendment should have been made to the defence. Thus, the 1st defendant’s departure from this pleaded fact during the course of trial, 1st defendant, the court accepted the version of events in the defence that the amount of approximately RM5,000,000 was paid by the defendants to resigned from his position as a director of the Company on 22 April 2017. Shares, although the transfer of the shares was not effected by the mean that the parties knew that the SSA was binding on them. It is on this basis that the court rejected the defendants’ argument that the SSA is not the pleading irrelevant. However, there is another matter that arises from this facet of the case. Where a party, in the course of conducting his case, abandons his pleading, then his case becomes highly suspect (see PR Panikar v Chwee May Kwong [1958] MLJ 136 ). The result is that the whole case of the plaintiff will have to be viewed with caution ...” [22] The payment of approximately RM5,000,000 by the defendants to raises serious questions as to the truth of his testimony. [23] As such, after considering the defence and the testimony of the the plaintiff pursuant to the SSA. [24] The plaintiff had also taken steps to comply with the SSA. He He also executed the relevant forms for the transfer of the Plaintiff’s defendants. [25] The conduct of the parties after the execution of the SSA can only binding on the parties. S/N vrxc8ZTsUqf3N2eAKocvA only in lieu of property in a development project known as D'Ritz Residence at Kuchai Lama (hereinafter referred to as “Property”). The parties hereby agree that the value of the property shall be at the market value to be determined by the developer of the developer of the Property, OR, in the event the Vendor is not agreeable with the value of the Property determined by the developer, the Purchasers shall pay the sum stated in this Clause 2. 1(g) in cash to the Vendor; [26] The defendants’ case is that the SSA is a conditional agreement. The court however finds that clause 2.1(g) of the SSA, which was relied on by the defendants to support their argument, does not impose any condition on the parties. [27] Clause 2.1(g) reads: “2.1 After the execution of this Agreement, the Purchase shall pay to the Vendor the Agreed Consideration in the following manners:- g) Ringgit Malaysia Three Million (RM3,000,000.00) …” [28] The clause states that the defendants shall pay the plaintiff RM3,000,000 in lieu of property in the D'Ritz Residence development (“Project”). The value of the property shall be the market value, unless the plaintiff disagrees with the value, in which event the sum of RM3,000,000 shall be paid to the plaintiff. The defendants contend that this clause is S/N vrxc8ZTsUqf3N2eAKocvA unable to agree. The payment to be made by the defendants to the plaintiff pursuant to clause 2.1(g) is not subject to any condition. The only possible qualification is in relation to the value of the property. In any event, if the parties do not agree on the value of the property, the defendants are defendants, that the SSA is unstamped and is thus inadmissible under section 52(1)(a) of the Stamp Act 1949, will be addressed. The defendants also argued that the original copy of the SSA was not produced by the submissions, had led the court to find this objection to be disingenuous. It is to be noted that the SSA was relied on during the plaintiff’s application for summary judgment, but the defendants did not object to its to payment of stamp duty and penalty for late stamping (see Malayan Banking Bhd v Agencies Service Bureau Sdn Bhd & Ors [1982] CLJ required to pay RM3,000,000 to the plaintiff. [29] As such, the defendants’ argument that the SSA is a conditional agreement and is not binding on the parties cannot stand. [30] As a final point on the SSA, the objection raised by the plaintiff, and the photocopy should not be admitted as evidence. [31] The timing of this objection, raised only during post-trial admissibility at that point. [32] Further, the courts have admitted unstamped instruments, subject (Rep) 217 and Chai Shan Foo v Tai Ooi Cheng [2021] 1 LNS 2706). In Cit International (M) Sdn Bhd v Exquisite Square Sdn Bhd & Ors [2010] 1 LNS 1491, the High Court admitted an unstamped agreement and allowed the plaintiff’s application for summary judgment, holding that contingent upon the status of the development of the Project. The court is S/N vrxc8ZTsUqf3N2eAKocvA the non-stamping of a document does not invalidate the document unless this goes to the root or validity of the document itself. [33] Further, the fact that the original copy of the SSA was not produced by the plaintiff does not affect the admissibility of the SSA, as the SSA has been classified as Part B of the common bundle of documents. [34] Order 34 rule 2(2) of the Rules of Court 2012 (“ROC”) provides: “(2) At a pre-trial case management, the Court may consider any matter including the possibility of settlement of all or any of the issues in the action or proceedings and require the parties to furnish the Court with such information as it thinks fit, and the appropriate orders and directions that should be made to secure the just, expeditious and economical disposal of the action or proceedings, including – …

Preamble

Pursuant to order 34 rule 2(e)(i) of the ROC, the defendants was produced and admitted. [36] With the above, the SSA which was admitted during the course of trial, was duly considered by this court. Agreement [37] As the court has found that the SSA is binding on the parties, the S/N vrxc8ZTsUqf3N2eAKocvA now be considered. The court will consider the specific question of whether these agreements have superseded and replaced the SSA. [38] Both agreements are oral agreements, allegedly made during meetings held between the parties. The plaintiff, who relied on the January 2020 Agreement, claimed that by this agreement, the plaintiff and the defendants had agreed to withdraw their respective legal actions, and to fulfil the terms of the SSA, including payment of the remaining RM10,000,000 to the plaintiff. The defendants had allegedly agreed to make an initial payment of RM80,000, followed by RM30,000, pending the execution of a formal agreement. [39] It must be noted that a written agreement was never executed, and that the parties did not act on the terms of the January 2020 Agreement. [40] The defendants on the other hand relied on the June 2020 Agreement. They claimed that based on this oral agreement, the parties agreed to withdraw actions filed against each other. The actions were withdrawn on 15 and 22 June 2020. [41] Based on the evidence before this court, the court finds that the January 2020 Agreement and the June 2020 Agreement did not supersede the SSA. [42] In relation to the June 2020 Agreement, the court finds that there is insufficient evidence to show when the meeting in which the June 2020 Agreement was allegedly formed, had taken place. The assertion of the defendants on the existence of a meeting in June 2020 is not supported S/N vrxc8ZTsUqf3N2eAKocvA actions were withdrawn in June 2020, to support their claim of the existence of the June 2020 Agreement. This approach suggests that the payments due to the plaintiff, had not been fully complied with by the time defendants claimed that in the June 2020 Agreement, the parties agreed to withdraw their legal actions against each other, and payments to be find it improbable for the plaintiff to have agreed to the withdrawal, without at least reaching some level of commitment from the defendants on the representing the parties in March and April 2020. These letters contain proposals on the withdrawal of the legal actions. This suggests that the actions were withdrawn in June 2020 pursuant to an earlier agreement, than the June 2020 Agreement. The plaintiff claimed that by the January 2020 Agreement, the parties had agreed to withdraw their respective legal actions and the defendants had agreed to pay the remaining claim is an afterthought. [43] Further, the terms of the SSA, in particular, on outstanding the June 2020 Agreement was claimed to have been entered into. The made to the plaintiff are subject to the financial status of the Company. I payment due to him under the SSA. [44] Also in evidence are letters exchanged between solicitors and not the alleged June 2020 Agreement. [45] Based on the above, the court finds the existence of the June 2020 Agreement to be improbable. [46] In relation to the January 2020 Agreement, its terms are clearer RM10,000,000 due to the plaintiff. by any evidence. Rather, the defendants relied on the fact that the legal S/N vrxc8ZTsUqf3N2eAKocvA exchanged in March and April 2020. In these letters, references were made to the proposed withdrawal of the legal actions. The plaintiff’s solicitors also requested for a draft of the settlement agreement due to be executed between the parties. The draft agreement was however not of the view that the SSA had not been superseded by the January 2020 the defendants have breached the terms of the SSA. In particular, the defendants failed to pay the full amount of RM15,000,000 due under [47] Letters between the solicitors of the respective parties had been provided. [48] Although oral agreements have been upheld by the courts (see Achi a/p Suppiah v Devamurthy a/l Suppiah [2010] 8 MLJ 189), the determination of whether or not an oral agreement exists and is binding is highly dependent on the facts before the court. In the case of the January 2020 Agreement, the conduct of the parties in not acting in line with the terms of the agreement and the lack of sufficient documentary evidence on the terms agreed between the parties can only lead to a forgone conclusion that the terms of the oral agreement had not been finalised between the parties. In this regard, the court finds that a concluded agreement had not been formed between the parties. [49] Based on the considerations and findings as set out, the court is Agreement and June 2020 Agreement. The defendants’ breach of the SSA [50] With the finding that the SSA prevails, the court further finds that clauses (1) and (2) of the SSA. S/N vrxc8ZTsUqf3N2eAKocvA [51] The court accepted the admission by the defendants on payment of the amount of RM5,000,000 to the plaintiff. The amount of RM10,000,000 remains outstanding. D. Decision [52] Premised on the finding that the SSA is binding on the parties and that the defendants had breached the SSA, the court allowed the plaintiff’s claim and granted the prayers sought by the plaintiff in the statement of claim, in so far as they reflect the terms of the SSA that had not been complied with. [53] Thus, the defendants were ordered to pay RM10,000,000 to the plaintiff, to pay damages in the value of the Motor Vehicle and to execute the transfer of the Plaintiff’s Shares to the defendants. Learned counsel for the plaintiff confirmed that the plaintiff did not wish to pursue the claims for payment of the plaintiff’s outstanding taxes and the delivery of a property unit at the Circo @ Pantai development. Dated 27 October 2023 - sgd - ADLIN ABDUL MAJID Judge High Court of Malaya Commercial Division (NCC6) Kuala Lumpur S/N vrxc8ZTsUqf3N2eAKocvA Counsel: Plaintiff : Keppy Wong Khai Pun (together with Kelly Wong) Keppy Wong & Assoc Defendants : Selva Mookiah (together with Ungku Ikram Athari) of Messrs Selva Mookiah & Associates S/N vrxc8ZTsUqf3N2eAKocvA