Da Land Sdn. Bhd v Ong Koh Hou @ Won Kok Fong (BA-22NCVC-396-07/2017)

There are two suits before this Court.

The First is Suit No: BA-22NCVC-396-07/2017. This is the Vendor’s suit i.e., as the Plaintiff in the Original Suit and as the Defendant in the Counter Claim. The Vendor’s suit claims the following, namely:

Declaration that the Sale and Purchase Agreement between the parties has been validly terminated, void and unenforceable; 3

(ii) Declaration that the Supplementary Agreements 1 and 2 entered into between the parties are void and unenforceable;

(iii) The consequential orders set out in prayers (3), (4),

and (7), Para 29 of the Statement of Claim;

(iv) Forfeiture of the Deposit of RM23 million;

Costs and damages

The Second is Suit No: BA-22NCVC-88-02/2017. This is the Purchaser’s suit i.e., as the Defendant in the Original suit and as the Plaintiff in the Counter Claim. There is a Counter Claim by the Purchaser for Specific Enforcement and additional claims against the guarantors (PW1) and (PW2). The Purchaser’s suit claims Specific Performance and in the alternatives Damages. [B] THE ESSENTIAL FACTS

Case as Vendor/Plaintiff (in original action) and as Defendant (in counter claim)

The Vendor/ Plaintiff (in the original suit) had legally terminated the Sale and Purchase Agreement (SPA) executed between the Plaintiff (in the original suit) and the Defendant (in the original suit) dated 1 October 2015 when the Defendant/Purchaser(in the original suit) has failed to pay the remaining balance purchase within the completion date as stipulated under the (SPA); 4

However, the Defendant/Purchaser (in the original suit) has failed to seek for an extension of time to pay the balance purchase price and in view of, there was no written agreement or otherwise concluded between the Plaintiff and the Defendant to extend time to pay the balance purchase price;

The First Supplemental Agreement dated 3 November 2015 and the Second Supplemental Agreement dated 29 September 2016 are void, illegal and of no effect and are not connected to compromise lawful consideration to the SPA. The SPA are also in breach of the Moneylender’s Act 1951. The reasons are as follows: - Both the Supplemental Agreements are connected with various money lending transaction given by the Defendant/Purchaser (in the original suit) to the Plaintiff/Vendor (in the original suit) and/ or various third party companies and does not relates to and/ or in lawful consideration to the SPA; and - During the enforcement of the SPA, the Defendant/Purchaser (in the original suit) had put improper pressure to the Plaintiff/Vendor (in the original suit) to agree to perform the undated Supplemental Agreements so as the sum of money owed by various third party companies 5 would be deducted from the SPA purchase consideration.

The Plaintiff/Vendor (in the original suit) had only received RM23 million from the Defendant/Purchaser (in the original suit) as a Deposit;

The RM23 million paid as a Deposit stand forfeited according to Clause 2.1(d) of SPA;

The Guarantee Letter executed by the Second and Third Defendant (in the counter claim) is not enforceable as the SPA has been legally terminated;

The Second and the Third Defendants (in the counter claim) did not caused and loss or damages to the Plaintiff (in the counter claim).

Case as Defendant/Purchaser (in original action) and as Plaintiff (in counter claim) Ong Koh Hou referred to as ONG; DA Land Sdn. Bhd. referred to as DA Land; Chew Ruenn Hing referred to as Ruenn Hing; Chew Ruenn How referred to as Ruenn How.

ONG, the Defendant in the first action, entered into a Sale and Purchase Agreement dated 1 October 2015 with DA Land Sdn. Bhd. (the SPA) to purchase from DA Land 6 three pieces of land at the total purchase price of RM84 million. Subsequently, the parties entered into Supplemental Agreement dated 3 November 2015 and Second Supplemental Agreement dated 29 September 2016 (the Supplemental Agreements);

In SAHC Civil Suit No: BA-22NCVC-396-07/2017 (the first action) DA Land seeks inter alia a Declaration that the SPA has been terminated and that the Supplemental Agreements are not valid and/ or void and not enforceable. The first action was commenced by way of an originating summons. Later, it was converted into a writ action. In SAHC Civil Suit No: BA-22NCVC-88-02/2017 (the second action), ONG claims for Specific Performance of the SPA and/or damages in addition and/or in lieu thereof and other relief;

It is ONG’s case that DA Land had received a total sum of RM61 million in respect of the SPA, including RM25.5 million and RM10 million respectively under the

ONG gave notice to terminate on 4 October 2016 that required DA Land to refund RM61 million to him. The SPA and Supplemental Agreements all confirm that a total sum of RM61 million was received by DA Land from ONG 7 towards the purchase price. ONG will rely on Section 91 and 92 of the Evidence Act 1950;

On a proper construction of the SPA and the attendant circumstances, time was not the essence in this case;

Here, ONG gave notice of termination under Section 4.2 of the Second Schedule of the SPA that required DA Land to refund the RM61 million received by it within 10 days. DA Land did not do that. Therefore, under Section 4.2 ONG became entitled to complete the agreement. Since time was at large, the termination dated 11 November 2016 by DA Land was ineffective;

The termination by DA Land, even if it is good (which is denied), imposes upon DA Land to disgorge the RM61 which it has received;

ONG also contends that the DA Land’s plea that of the RM25.5 million which was paid by ONG by way of Deposits, only RM23 million was received by it as pleaded in para 2 of DA Land’s amended defence is inadmissible in law to contradict the term of the Supplemental Agreements by reasons of section 91 and section 92 of the Evidence Act 1950;

Also, DA Land is estopped from raising the matters now inserted by DA Land in its pleaded case; 8

ONG denies that the Supplemental Agreements are a Money lending Transaction. ONG also denies that he brought improper pressure to bear upon the directors of DA Land to execute any of the agreements, including the Supplemental Agreements. The SPA and the Supplemental Agreements are the product of a voluntary and conscious act of Ruenn Hing and Ruenn How on behalf of DA Land uninfluenced by any improper pressure;

Ruenn Hing is a qualified lawyer. He knew or should have known the nature and purport of the documents he was executing. It does not lie in his mouth to now say otherwise;

Because on the indoor management rule, DA Land is bound by the acts of its directors in relation to the SPA and the Supplemental Agreements;

It is common ground between the parties that Ruenn Hing and Ruenn How executed a guarantee in ONG’s favour under the terms of which Ruenn Hing and Ruenn How guaranteed the refund of the Deposits and all monies paid by ONG to DA Land together with RM8.4 million as agreed liquidated damages;

Ruenn Hing, Ruenn How and DA Land now contend that the guarantee is not enforceable because there has been 9 no breach of the SPA on the part of DA Land and that the plea that the guarantee is not binding is of no avail to

The other plea taken by the guarantors Ruenn Hing and Ruenn How namely that the Supplemental Agreements are not money lending transactions are not admissible because of the doctrine of estoppels and section 92 of the Evidence Act 1950 (where applicable). [C] THE AGREED FACTS

In Bundle (G), the following are the agreed facts by both the solicitors of the respective parties, namely:

The Plaintiff/Vendor (by original suit) is a private limited company registered under the laws of Malaysia with the registered address at No. 26-A, Lorong Angsa, Taman Berkeley, Klang, 41150 Selangor Darul Ehsan and a business address at Plaza Pelangi Astana PJU 6, Persiaran Surian, Petaling Jaya 47800 Selangor;

The Defendant/Purchaser (by original suit) is an individual with an address at No. 6, Jalan Raja Arfah 1, Kawasan Perusahaan Segambut, 51200 Kuala Lumpur;

At all material times, the directors and shareholders of the First Defendant (by counter claim) / Plaintiff (by original 10 suit) are the Second and Third Defendants (by counter claim);

The Plaintiff (by counter claim) and the Second and Third (by counter claim) / have known each other for about 9 years and were involved in business dealings with one another previously;

The Plaintiff (by original action) and the Defendant (by original action) entered into Sale and Purchase Agreement dated 1 October 2015 (the SPA) wherein the Plaintiff (by original action) agreed to sell to the Defendant (by original action) the following lands: No. Title No. Lot No.

Geran 124341 25032 15.44 hectares

Geran 54446 18057 0.6215 hectares

Geran 62373 15751 10,805 hectares

The purchase price of the lands is RM84,000,000-00 (the Purchase Price) and subject to the terms and conditions set out in the SPA therein;

The Plaintiff (by original action) and the Defendant (by original action) entered into a Supplemental Agreement dated 3 November 2015 (the First Supplemental Agreement); 11

The Plaintiff (by original action) and the Defendant (by original action) entered into a further Supplemental Agreement dated 29 September 2016 (Second

On 4 October 2016, the Defendant (by original action) through his previous solicitors and pursuant to clause 4.2 of the Second Schedule of the Sale and Purchase Agreement, informed the Plaintiff (by original action) of the Defendant’s (by original action) intention to terminate the Sale and Purchase Agreement and that all monies paid to be returned to the Defendant (Notice of

On 11 November 2016, the Plaintiff (by original action) responded inter alia, that it has never received RM61,000,000-00 as alleged by the Defendant (by original action), and the Sale and Purchase Agreement was terminated due to the Defendant’s failure to pay the balance Purchase Price on or before the completion date;

On 16 December 2016, the Defendant (by original action), through his solicitors, responded to the Plaintiff’s (by original action) letter dated 11 November 2016 and gave notice to proceed with the completion of the Sale and Purchase Agreement pursuant to clause 4.2 of the Second Schedule of the Sale and Purchase Agreement; 12

On 3 January 2017, the Plaintiff (by original action), through its solicitors, responded to the aforesaid letter dated 16 December 2016 of the Defendant’s (by original action) solicitors and reiterated its position that the SPA was terminated due to the Defendant’s breach and the Plaintiff further stated that it has never received RM61,000,000-00 as alleged by the Defendant (by original action);

The Second and Third Defendant (by counter claim) has executed a Letter of guarantee in favour of the Defendant (by original action) to guarantee the performance of the [D] ISSUES TO BE TRIED AND DETERMINATION

Having heard the evidence and upon scrutinized the documents before me, there are several issues for this court determination and can be concluded as below:

Whether the Sale and Purchase Agreement dated 1 October 2015 was lawfully terminated by DA Land (Plaintiff/Vendor) and entitled for such relieve;

Whether the Supplemental Agreements 1 and 2 are void, illegal and of no effect as not connected to compromise lawful consideration and in breach of the Moneylender’s Act 1951?? Whether evidence of money lending in respect of the SA is admissible? 13

Whether the SA 1 and 2 were the product of duress or illegitimate pressure??;

Whether the Deposit amounting to RM23 million paid by the Defendant (in the original suit) can be forfeited by the Plaintiff (in the original suit)??Whether evidence that only RM23 million was paid is admissible? For the purpose of this judgments, I shall categorise each of the above issues separately according to its merit and justification. FIRST ISSUE Whether the Sale and Purchase Agreement dated 1 October 2015 was lawfully terminated by DA Land (Plaintiff/Vendor) and entitled for such relieve;

Before any decision is made on this issue, the question here is who is in breach of the contract? Was it the Plaintiff/Vendor or the Defendant/Purchaser? In the Plaintiff/Vendor’s case, according to the Vendor, on 4 October2016, the Defendant/ Purchaser through its previous solicitors issued a letter stating the his intention to terminate the SPA and demanded for the return of RM61,000,000.00 from the Plaintiff/Vendor within 10 days from the date of receipt of the letter. This was done pursuant to clause 4.1 of the second schedule of the SPA that states as follows: 14 “…..notwithstanding anything contained in this Agreement but subject to Section 5 & 6 herein, the parties hereto agree that the Purchaser(s) shall not be entitled to complete this Agreement before 30.9.2016 (“Cooling-Off Period”). After the expiry of the Cooling-Off Period, the Purchaser(s) shall notify the Vendor(s) in writing (“the said Notice”) of its intention to proceed or otherwise with this Agreement……”

The Plaintiff/Vendor did not return the said sum within the stipulated time due to a disagreement on the sum demanded by the Defendant/Purchaser and accordingly by way of clause 4.2 of the second schedule of the SPA, the notice of termination was automatically revoked at the expiry of the 10 days period. The said clause states as follows: “……in the event the Purchaser(s) elect(s) to terminate this Agreement, the Vendor(s) shall within ten (10) days of the said Notice of termination refund to the Purchaser(s) the Deposit and all monies paid by the Purchaser(s) failing which the Purchaser(s) shall be absolutely entitled to proceed with the completion of this Agreement and the said Notice of termination shall be deemed automatically revoked invalid and of no effect…. ”

Following the automatic revocation of the notice of termination, the Defendant/Purchaser was then bound to pay the balance purchase price on or before the completion 15 date i.e. 31 October 2016 as stated in section 8 of the First Schedule of the SPA. However, the Defendant/Purchaser failed to pay the balance purchase price within the completion date and the Defendant/Purchaser further failed to seek an extension of time as stipulated under clause 2(c) of the SPA. The said section provides that: “if the Purchaser(s) shall fail to pay the Balance Purchase Price on the expiry of the Completion Date, the Vendor(s) shall grant to the Purchaser(s) an extension of time (hereinafter referred to as “the Extended Completion Date’’ as stated in Section 9 of the First Schedule hereto on the conditions, if any, to be mutually agreed between the parties hereto).”

Based on the Defendant’s/ Purchaser’s conduct to terminate the SPA at the first place, it’s failure to pay the balance purchase price within the completion date as per the SPA, its failure to request for an extension of time to pay the balance purchase price and its failure to provide its previous solicitors with the necessary instructions towards the compliance of the SPA, it is the Plaintiff’s/ Vendor’s contention these were evidences of the Defendant’s/Purchaser’s true intention of not wanting to proceed with the It is also part of the Vendor’s/Plaintiff’s case that the Defendant/ Purchaser’s had elected to seek a refund of the monies paid by him and therefore did not intend to complete the purchase of the subject property. 16

Before I could proceed on any further, it is best to view Clause 12.1 SPA which reads as follow: “…Time wherever mentioned herein shall be the essence of this Agreement…” Counsel for the Defendant/Purchaser’s had submitted that whether time is of the essence in a contract is a matter of interpretation of the contract and the surrounding circumstances. Even if there is a clause in a contract that makes time of the essence, the court is entitled to hold that, on a proper construction of the whole contract, time is not of the essence. The learned counsel for the Defendant/Purchaser is submitting that there are 2 main reasons why time is not the essence under the Sale and Purchase Agreement namely:

The Sale and Purchase Agreement contains a provision for the extension of time; and

The existence of the Supplementary Agreements 1 and 2, which took the form of part payments of the Purchase Price under the Sale and Purchase Agreement. In support, the learned counsel rely on the decision of the Indian Supreme Court in Hind Construction Contractors v. State of Maharashtra AIR 1979 SC 720 which was applied by the Federal Court in Berjaya Times Squares Sdn. Bhd. v M Concept 17 Sdn. Bhd (2010) 1MLJ 597 (FC), Zulkefli FCJ delivering the judgment of the Federal Court held that: ‘……………..It will be clear from the aforesaid statement of law that even where the parties have expressly provided that time is of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental: for instance, if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week the work undertaken remains unfinished on the expiry of the time provided in the contract such clauses would be…………………., it is a useful guide to construction that a stipulation as to time must be read along with other provisions of the contract to determine if time is truly of the essence of the contract. Further, a clause providing for the payment of a sum whether as a fine, a penalty or as liquidated damages calculated on a daily basis for the period that the work undertaken remains unfinished on the expiry of the time provided in the contract would, in the absence of a contrary intention to be gathered from the contract, point to time not being of the essence.” In the above case, the Respondent had entered into a contract with the appellant property developer to purchase a commercial shop lot in a project helmed by the appellant. The appellant was late in delivering vacant possession to the respondent. One of the central issues before the court was whether time was of the essence of the contract. The Federal Court held that despite there being an express 18 provision as to time being of the essence, on a proper construction of the contract with a fuller appreciation of the surrounding circumstances, time was no longer of the essence between the parties. In arriving at this conclusion, the court highlighted the inclusion of the other clauses in the contract allowing an extension of time for performance and for assessing liquidated damages upon late performance. This was buttressed by the conduct of the Respondent in making continued payments and negotiating the terms of delivery, even beyond the stipulated date for delivery. In support, the learned counsel is referring to clauses 2.1(c) and (d) of the SPA read as follows: “….(c) If the Purchaser(s) shall fail to pay the Balance Purchase Price on the expiry of the Completion Date, the Vendor(s) shall grant to the Purchaser(s) an extension of time (hereinafter referred to as “the Extended Completion Date”) as stated in Section 9 of the First Schedule hereto on the conditions, if any, to be mutually agreed between the parties hereto.

If the Purchaser(s) shall fail to pay the Balance Purchase Price or any part thereof on the expiry of the Extended Completion Date, the Vendor(s) shall be entitled to forfeit the Deposit to the Vendor(s) as agreed liquidated damages and refund to the Purchaser(s) all monies paid by the Purchaser(s) towards account of the Purchase Price within ten (10) days of such forfeiture thereafter this Agreement shall be rendered null and void and of no effect and neither party hereto shall have any claim whatsoever against the other in respect of the said Property or this Agreement…………...”. 19 By imposing upon the Vendor/Plaintiff an obligation to grant an extension of time on the expiry of the completion date, that is to say 31 October 2016, renders time not of the essence on a proper construction of the SPA. It is not a mere discretion vested in the Vendor/Plaintiff. Once time is not of the essence, the termination by the vendor on the ground that payment of the balance of the purchase price was not made on or before the stipulated date renders that termination unlawful and invalid. To put it another way, although the Defendant/Purchaser was to pay the balance by 31 October 2016, his failure to do so did not amount to a breach of contract because time was not of the essence on a true construction of the SPA. The Plaintiff/Vendor by insisting that failure to make payment by 31 October 2016 committed a breach by treating the contract as at an end.

In concluding this issue, the fact remains that the balance purchase was not paid in full by 31 October 2016.The law is clear that the failure of the buyer to pay the balance purchase price within the stipulated completion date is a fundamental breach. In the Court of Appeal case of in Ching Yik Development Sdn. Bhd. v. Setapak Heights Development Sdn Bhd (1996) 3 MLJ 675 (CA), Gopal Sri Ram JCA delivering the judgment of the court: “…………….In the absence of any special considerations in a contract for the sale of land, the obligation to pay the purchase price is fundamental. Thus, any breach for nonpayment of the purchase price shall go to the root of the agreement thereby 20 rendering the agreement terminated and the deposit forfeited………..” This was affirmed by the Federal Court in the case of Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd (2015) 2 MLJ 441(FC), Azhar Mohamed FCJ delivering judgment of the court ruled that: “………Evidently, as set-out earlier, the defendant only paid the 10% deposit of the purchase price and failed to pay the balance purchase price by the completion date of 21 March 2006. Thereafter, the plaintiff’s solicitors issued the defendant a notice of extension of two months pursuant to Special Condition 3. The defendant did not challenge this notice. The defendant then breached the SPA by failing to pay the balance purchase price by the extended completion date of 21May 2006. In this regard, it is trite that the obligation to pay the purchase price is a fundamental obligation of the SPA. The failure to pay the balance purchase price goes to the root of the SPA thereby rendering the SPA terminated (see Ching Yik Development Sdn Bhd v Setapak Heights Development Sdn Bhd [1996] 3 MLJ 675 [...])

In another Court of Appeal decision, in Corporate Spirit Sdn Bhd v. Chaw Kock Kaw @ Chow Kok Kow (2016) 12 MLJ 130, the court held, in dismissing the Appellant’s counterclaim for Specific Performance that the Respondents were entitled to terminate the Sale and Purchase Agreement upon the failure of the appellant in paying the balance purchase price within the stipulated time. Umi Khalthum JCA held: 21 “……………….[42] We found that the failure of the appellant in paying the balance of the purchase price of the said property in accordance with the SPA tantamount to a fundamental breach of the SPA. The aforesaid failure of the appellant entitled the respondent, as the vendor, to terminate the SPA... [43] The SPA was rightfully terminated as the appellant had failed to fulfill his side of the bargain which was to pay the balance of the purchase price within the time stipulated in cl 4(2) of the SPA and despite several reminders. Moreover, under cl 22 time wherever mentioned in the SPA shall be of the essence of the [44] Although it was provided so in the SPA, the appellant did not seek for any extension of time under cl 5 of the agreement. It was the respondent himself who on his own volition further extended the time for the payment to be made until 8 July 2007. [45] It was clear to us that the respondent was entitled to terminate the SPA in accordance with cl 9 of the SPA as the appellant had failed to pay the balance of the purchase price……………” Testimony Ng Geok Chee (SD1) – Re Examination In 1st Supplementary Agreement page 63 its record that sum of 25.5 million was paid to DA Land. Do you agree? Yes. Did you witness this money go through to your firm accounts? According to the agreement Mr Ong has entitled to proceed, to complete the SPA if DA Land does not pay the 61 million, correct? So did he give you instruction to proceed to 22 complete the SPA? Did he pay the balance purchase price into your banks account? Did you as his lawyer asked for the redemption statement from the b; for the release of the charge? Did you as solicitor asked for an extension of the completion date? As solicitor you suppose to talk all this necessary steps to complete SPA, and if you failed to do this, agree you will be expose to negligence Actually I have advised Mr Ong to complete the sales by getting ready redemption sum but there was no positive action from Mr Ong. So that's why on 9.11 you issued the letter discharging yourself for acting for him (page 17 bundle E)? This letter was in respect of the caveat, where we have no knowledge all. Look at item 1, what is that reference relating to? That is relation to the SPA dated 1.10.2015. And that’s the subject matter of this suit, yes? Yes. So your letter was send relating to the both SPA that’s the 23 subject mal in our suit as well as the withdrawal the private caveat? The letter actually in respect of the caveat. So did you discharge yourself in relation to the SPA? I’ve told Mr Ong that I am not acting for him anymore in the SPA. From the above testimonies, it is clear to my mind the Defendant/ Purchaser was not ready, able and willing to perform the contract at the time. His solicitor (SD1) had confirm that the balance of RM23 million was not deposited into her firm’s account and confirms that she received no instructions from the Defendant/Purchaser to seek an extension or at all and as such she then discharged herself. Testimony Ong Koh Hou (SD2) – Cross Examination So, you did not give any instruction to your lawyer at the time to complete the transaction? Yes. Then you let the completion date past 31.10.2015 without doing anything? That is not so. So did you instruct your lawyer to then complete? At that time I still going negotiation. There were so many suggestion and the both brothers suggested that I take their companies shares. This was in exchange for the so called 61 million? Yes. 24 Is that the negotiation? Yes. So I suggest to you there was no negotiation on extending the completion date? That is not so, I disagree. Anyway in this documents to show that you had taken step to complete the SPA? I’ve forgotten, I also don’t know. Any evidence that the balance purchase price was paid into your lawyer’s stakeholder’s account? You said today that you are ready and willing to complete the sale? Yes. Any evidence before this Court now that the money is in your lawyer stakeholder’s account? I do not have any evidence in the bundle but I already have that said sum. Having cross-examination by the learned counsel of the Plaintiff, it is now clear to my mind that the Defendant/ Purchaser is not willing to complete the SPA. The Defendant/ Purchaser himself agree that there was no evidence of the balance purchase price being paid into the lawyer’s stakeholder account at the material time and now. 25

Following the above, the learned counsel for the Defendant/ Purchaser had submitted that in view of Clause 2.1 (c) of the SPA which stipulates that an extension to complete the SPA shall be granted, it was mandatory upon the Plaintiff/ Vendor to extend time for completion. To this extend, it is best to view Clause 2.1(c) SPA as below: “………If the Purchaser(s) shall fail to pay the Balance Purchase Price on the expiry of the Completion Date, the Vendor(s) shall grant to the Purchaser(s) an extension of time (hereinafter referred to as “the Extended Completion Date”) as stated in Section 9 of the First Schedule hereto on the conditions, if any, to be mutually agreed between the parties hereto. Sections 9 of the First Schedule also state that the extended date was to be mutually agree by both parties. Having stated under Clause 12 of the SPA that time is of the essence of the Agreement, it is best to view the case of: Haji Hasnan v. Tan Ah Kian (1963) 29 MLJ 175(CA), Barakbah J.A delivering the judgment of the court: “…….It was contended by the learned counsel for the appellant that as the agreement stipulated that the whole work should be completed within the 30th day of May, 1960, time should therefore be regarded as of the essence of the contract and failure to comply with it would entitle the appellant to repudiate the contract….. ….In my opinion the learned trial Judge considered this point carefully. He referred to the three general principles as to time being the essence of the contract. Firstly, time is of the essence of the contract where the parties expressly stipulate in the 26 contract that it shall be so; secondly, time is of the essence of the contract where it was not originally stated to be so, but has been made so by one party by giving reasonable notice to the other, who has failed to perform the contract with sufficient promptitude; thirdly, time is of the essence of the contract where from the nature of the contract or its subject matter time must be taken to be of the essence of the agreement….. …….The learned trial Judge went on to say in his judgment: "…..Applying the above principles of law to the agreement in this case, I have no hesitation in saying that time was not of the essence of the contract ... The nature of the contract or of its subject matter was such that it would be wrong to draw an inference that time was of the essence, nor is there any evidence of any attendant or surrounding circumstances from which it can be gathered that it was so. If there were any evidence that it was within the contemplation of the parties that the roads were required for a specific purpose and it was imperative that they should be ready by 30th May, 1960, it would be logical to draw an inference in favour of the defendant". With this view of the learned Judge I respectfully agree……..”.

In another case of: Damansara Realty Bhd v. Bangsar Hill Holdings Sdn Bhd & Anor (2011) 6 MLJ 464 (FC), Richard Malanjum CJ (Sabah and Sarawak) delivering the judgment of the court: “….[25] Question two implies that it is a principle of law that in order for time to be of the essence it must be stipulated in a given contract. With respect, such an impression, whether intended or 27 otherwise, is erroneous. On the contrary, it is trite law that a contract need not contain such a term or clause for time to be made of the essence in the same way ‘that a stipulation as to time must be read along with other provisions of the contract to determine if time is truly of the essence of the contract’ (see Berjaya Times Square Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M-Concept Sdn Bhd [2010] 1 MLJ 597; [2010] 1 CLJ 269). Thus, whether or not time had been intended to be of the essence would depend on the conduct and the dealings of the parties. There is no necessity in law that a clause making time of the essence must be expressed in any given contract. Similarly, the fact that there is a clause stating that time is to be of the essence does not ipso facto result in time being of the essence……………..” Having said clearly in the SPA that time is of the essence, is it necessary or pertinent for the Vendor/ Plaintiff to wait for an indeterminate period for the Purchaser to agree to a new date?? Is it that the Plaintiff/DA Land would have to forever grant fresh extensions of time at the Defendant/Mr. ONG’s convenience and availability of funds??? In (SD2)/Defendant’s testimony, it reveals that on 4 October 2016, less than a month to completion, the Defendant/ Purchaser had terminated the SPA and demanded for the return of RM61,000,000.00 within 10 days from the date of the receipt of the letter. In (SD1) testimony, she received no instructions from the Defendant/ Purchaser on the extension of time. Nevertheless, a letter from DA Land dated 11 November 2016 was issued terminating the SPA. Almost five weeks later, on 16 December 2016, a letter is issued by Defendant/ Purchaser’s then solicitors insisting that the SPA is still valid and he stands ready and willing to complete it. On 28 that very date, a without prejudice letter is issued documenting a discussion on a proposal for the Defendant/ Purchaser’s to purchase shares. It is on this without prejudice letter issued almost 7 weeks after completion date of the SPA that the Defendant/ Purchaser’s is placing heavy reliance to say that there were negotiations to extend time. Nevertheless, upon reading the content of this “without prejudice letter”, nothing was mention of discussion on an extension of time.

In (SP1) and (SP2) witness statement, both of them had testified that that they did meet the Defendant/ Purchaser after completion date had passed but that it was not in relation to extending time but was to discuss the return of the Defendant/ Purchaser’s deposit by converting the deposit and injecting further funds into a purchase of shares in DA Land. Both of them said that the Defendant/ Purchaser’s had rejected any suggestions that both (SP1)(SP2) had on investing in DA Land almost straightaway. Both (SP1)(SP2)accounts are borne out and corroborated by the fact that whilst a without letter referring to some negotiations was issued on 26 November 2016 , on the very same day another letter was issued by the same solicitors demanding completion of the SPA. The Defendant/ Purchaser’s own testimony makes it clear that there were no discussions on extending time. The Defendant/Purchaser’s does not at any point positively testify that parties were trying to mutually agree to a new completion date. His testimony is consistent with (SP1) and (SP2) testimony that the negotiations centered on matters other than the extension of time. 29 Testimony Ong Koh Hou (SD2) – Cross Examination It’s your case that you were relying on clause 2.1 (c) to say that... nowhere in the evidence had been showed that you ask for extension of time? Yes. And you say that they must give you an extension of time, did you at any point say I will complete it by a specific date? I do not have any written documents evidence but in fact I have told them about this. Anything in writing? No only verbal. So as far as your concern you don’t have to ask about extension of time? Not yet. Not yet? This is I’m talking after 31.10? Yes I have not asked because we are still negotiating. You negotiating about other things, did you ask an extension of time to complete the sale? Because there are an extension clause in the agreement. Did you asked for an extension of time? I supposed yes. Or you don't know whether you asked? I did ask for extension of time but 1 have forgotten the period that I had asked. 30 Anything in the documents? I do not have anything in writing but we were talking through verbal. Did you say I am complete 14 days, 21 days from now? Set a date? Not say so. So as far as my client were concern no date, they just supposed to wait forever? In fact the both brothers can also propose an extension of time but they did not. They didn’t want the extension of time, it’s for you to ask? But in the agreement is stipulated expressly that they are extension of time. The fact is you didn’t ask and don’t set a date right? I request for extension of time but I have forgotten about the period I’ve asked. In the above testimonies, the Defendant/ Purchaser’s during cross-examination conceded that it was his obligation to request for the extension of time but he was not able to positively assert that he had sought for such extension. Having failed to do so, to my mind, as of 31 October 2016 the Defendant/ Purchaser’s had breached the terms of the SPA, it was at an end and the Vendor/ Plaintiff was entitled to terminate the SPA.In coming to the conclusion, I would refer to: NS Bindra’s, Interpretation of Statutes by MN Rao and Amita Dhanda, Lexis Nexis Butterworth, 10th Edition, at page 403-404 31 stated that: “…………the function of the court is only to expound and not to legislate. The dominant purpose in construing a statute is to ascertain the intent of the legislature, as expressed in the statute, considering it as a whole and in the context. The most fair and rational method for interpreting a statute is by exploring the intention of legislature through the most natural and probable signs which are either the words, the context, the subject matter, the effects and consequences, or the spirit and reason of the law. In the court of law what the legislature intended to be done or not to be done can only be legitimately ascertained from that what it has chosen to enact, either in express words or by reasonable and necessary implication………….it is elementary that the primary duty of a court is to give effect to the intention of the legislature as expressed in the words used by it and no outside consideration can be called In aid to find that intention…………” In relation to this, I would also refer to Section 17A Interpretation Act 1967 as quoted below: “17A Regard to be had to the purpose of the Act In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object............." To conclude on this issue, both situations above would create absurd and unjust results. It therefore can only be sensible that 32 any extension of time must be agreed to mutually by the parties, as provided in Clause 9 in the First Schedule to the SPA. It is my considered view that a plain reading on the terms of the Sale and Purchase Agreement will lead to the conclusion that completion was on 31 October 2016 and upon the Defendant/ Purchaser’s (Mr. ONG) failure to pay the balance purchase price and seek an extension, the time for completion had lapsed and the Vendor/Plaintiff (DA Land) was entitled to terminate the Sale and Purchase Agreement. SECOND ISSUE Whether the Supplemental Agreements are void, illegal and of no effect as not connected to compromise lawful consideration and in breach of the Moneylender’s Act 1951?? Whether evidence of money lending in respect of the SA is admissible?

The learned counsel for the Defendant/ Purchaser had argued that the Vendor’s case appears to be that the Supplemental Agreement is a money lending transaction based on the previous transaction mentioned earlier. They had submitted that to succeed on a plea of unlawful money lending, a system of money lending business must be established. In support, the counsel is relying on in the case of: Yeep Mooi v. Chu Chin Chua (1981) 1 MLJ 14, Salleh Abas FJ delivering the judgment of the Court: 33 “………..The Ordinance (meaning the Moneylenders Ordinance) is never intended to apply to an individual, or any member of the public who lends money even at interest, unless he does so as a business.(Ngui Mui Khin & Anor v Gillespie Bros & Company Ltd [1980] 2 MLJ 9.” “Thus the crux of the matter is the lending of money by a person, whose business is money lending. This is purely a question of fact (Kirkwood v Gadd [1910] AC 422)…. ……………………….. Her main occupation was one of seamstress.” ……..Although such a person is in law a lender, he is certainly not a moneylender, even though he may repeatedly and frequently deposit money as and whenever he has some to spare.” “As earlier stated, it cannot be otherwise than purely incidental to her main occupation as a seamstress. That brings her within one of the exceptions in paragraph (c) of the definition of moneylender under section 2 of the Ordinance, i.e. "a person ... bona fide carrying on any business not having for its primary object the lending of money in the course of which and for the purposes whereof he lends money is not a moneylender”. We are therefore unable to agree with the decisions of the courts below that the appellant was a moneylender……..”.

In this case the Vendor/Plaintiff has failed to lead evidence that the Defendant/Purchaser carried on the business of money lending. The highest that the vendor’s case comes to is this: that PW 2and companies controlled by them and PW2 and his wife had on occasions borrowed monies from the purchaser. Although PW1 kept repeating that the SA sums related to third party transactions, in truth they all were between companies of which both were directors. The companies concerned are Houz Depot Sdn Bhd, Hype Park City Sdn 34 Bhd, Lakaran Aktif Sdn Bhd and Taisun Industries Sdn Bhd. They are all mentioned in the witness statement of PW1 and PW2. All the transactions referred to consisted of sale and purchase agreements. Several postdated cheques were issued. According to DW2, none of them were met. It was never suggested to DW2 that all or some of these cheques were in fact met. There is not a jot of evidence to show that any interest was paid or collected by DW2 from PW1 and PW2 or their companies. Based on the foregoing, and applying the dictum of Salleh Abas FJ quoted above, the Moneylenders Act does not apply to the Purchaser. The plea of money lending was not taken when Vendor filed its originating summons on 18 January 2017. The only issue raised was one of breach of contract. The plea of money lending was only raised by way of amendment on 25 August 2017 in the purchaser’s suit. As such, the plea of money lending is an afterthought and has not in any event been made out.

In deciding this issue, it is best to look at some salient provisions in the Moneylenders Act 1951: Section 2 “Money lending” means the lending of money at interest, with or without security, by a moneylender to a borrower”. “Moneylender” means any person who carries on or advertises or announces himself or holds himself out in any way as carrying on the business of money lending, whether or not he carries on any other business’ 35 Section 10A Presumption as to the business of Money lending Where in any proceedings against any person, it is alleged that such person is a moneylender, the proof of a single loan at interest made by such person shall raise a presumption that such person is carrying on the business of money lending, until the contrary is proved.” Section 15 Contract by unlicensed moneylender unenforceable No money lending agreement in respect of money lent after the coming into force of this Act by an unlicensed moneylender shall be enforceable. Section 17 Prohibition of compound interest Where the section provides that the imposition of compound interest renders the agreement illegal Section 17a. Interest for secured and unsecured loans “the interest for a secured loan shall not exceed twelve per centum per annum and the interest for an unsecured loan shall not exceed eighteen per centum per annum and that where interest charged is more than that specified, that agreement shall be void and have no effect and shall not be enforceable”. Testimony Ong Koh Hou (SD2) – Cross Examination In this agreement it is stated that you had paid 25.5 million to the Plaintiff? Correct. 36 Did you make payment through cheque? Some through contra some I helped them to settle off their debt. So you confirmed no actual money was paid? So you agree this contra is in relation to the 5 transaction I just referred to you? Yes. In the above testimonies, the Defendant/Purchaser during cross examination had confirmed that no payments were actually made and that the payment referred to in the Supplementary Agreements 1 and 2 were in fact set offs of various loans owed to him and others. When asked whether these loans were the 5 transactions referred to earlier, he agreed. Furthermore, in the testimony of (SP1) and (SP2), both had confirmed that the Defendant/Purchaser was known as a moneylender whom they approached. Even at one time, the Defendant/ Purchaser himself admitted during cross-examination when referred to one of the 5 transactions, that he gave a loan of RM3 million and charged interest of 4% per month. Testimony Ong Koh Hou (SD2) – Cross Examination My question is did you give a loan of 3 million and charged interest of that loan at 4% interest per month, it’s a very-very simple question. Did you? Yes, I agree 37 According to (SP1) (SP2) testified that they entered into at least 5 such money lending transactions personally and through their other companies with the Defendant/Purchaser. These transactions were executed by way of sham SPA. There is written acknowledgment from the Defendant/ Purchaser referencing these SPAS that he was receiving cheques towards payment of interest charges pursuant to 5 different transactions. When these 5 acknowledgments receipt of cheques towards payment of interest and principal were put to the Defendant/Purchaser to explain, he could not do so and repeatedly asserted that the cheques were dishonoured. Somewhat unusually the Vendor under these SPA is making payments to the Purchaser. Again the Defendant/Purchaser could not explain this when it was put to him. (SD1) was asked about 2 SPA which her firm handles. She was asked whether to the best of her recollection that monies in the region of RM1.5 to RM2 million was deposited to her client’s account. She said not that she know of. When suggested that in a normal SPA this money would be lodged into a stakeholder account, she answered yes. Finally, interest was being charged at 3.5 to 4 % per month compounded on a monthly basis – that is 36% to 48% per year. The cumulative effect of all the above evidences which remains unchallenged, to my mind the Defendant/Purchaser is in the business of money lending within the meaning of the Moneylenders Act 1951 cannot be ruled out. That being the case, pursuant to Section 5 of the said Act, the Defendant/Purchaser is required to be licensed in order to carry on the business of money lending. No such licence having been tendered in evidence it must be taken that the Defendant/Purchaser is an unlicensed moneylender. 38

On the face of these 3 documents, the illusion created is that the SPA was executed on 1 October 2015 and then subsequently part payment of RM25.5 million was made on 3 November 2015 and another part payment of RM10 million was made on 29 September

Nevertheless from the Defendant/Purchaser own witness, (SD1), Ng Geok Chee during Re-examination had confirmed that all the 3 Agreement were executed on the same day and that as far as she was aware no actual payment was made. Furthermore, the Defendant/Purchaser has produced no evidence whatsoever to discharge his burden in rebutting the allegation that no monies were paid to DA Land. Testimony Ng Geok Chee (SD1) - Re-examination : Did you witness the signing of the SPA, can you tell the Court when this was? : This agreement was signed on the 20.5.2016. : So the agreement was backdated? : It was on the instruction of both parties that the agreement be dated…of course the instructions came from my clients but it was agreed by the vendors. : And you prepared the Supplementary Agreement 1 and 2 as well? : Correct. : When were both this signed? : The Supplemental Agreement was signed on the same day that is on the 20.5.2016. 39 : Yes, it was the same day as the SPA? : Correct. : Both Supplemental Agreement 1 and 2? : No..no I’m only agreed to the Supplemental Agreement, the 2nd Supplemental Agreement this one I can’t remember exactly when it was signed but if I’m not mistaken it has signed at the same date as well. In respect of payments, (SD1) testified as follows: : Did you witness the giving of the money by way of cheques? : Did you witness the giving of money by cash? : Can I take it that you cannot confirm whether 25.5 million was actually paid? : I cannot confirm. : Referring to the 2nd Supplemental Agreement, was this 10 million paid into your clients account for you to act as stakeholder and release? : Did you witness the handing of the cheques for 10 million to DA Land? : Did you witness the handing of cash to DA Land? 40 : Although you are solicitor in the SPA, you cannot confirm that 10 million payments was actually made? : I can’t confirm.

In conclusion of my finding on this issue, I am agreeable with the learned counsel for the Plaintiff in referring to the case of: Ochroid Trading Limited & Anor v. Chua Siok Lui (t/a Vie Import & Export) & Anor (2018) SGCA 5 (“Ochroid Trading"),the Court of Appeal in Singapore refused to allow a company that had engaged in unlicensed money lending to recover a principal sum loaned to a borrower, saying that to do so would ‘make a nonsense' of the purpose of the Moneylenders Act to deter illegal money lending. In a rare sitting of five Judges of Appeal instead of the usual three, Singapore’s highest Court rejected a claim for $10.25 million that the appellant said were investments and if not paid would result in the borrowers being unjustly enriched. The Court found the money to be illegal loans instead and underlined the “strong need to deter illegal money lending due to its status as a serious social menace”.

The brief facts are as follows. The second appellant was the sole director and shareholder of the first appellant. The second respondent and first respondent started a business called VIE Import and Export ("VIE”);

A series of written agreements were entered into between the appellants and respondents which appeared as if the appellants made investments in 41 VIE’s business by way of a joint venture. The appellants were to provide “loans” to VIE for the purchase and resale of specified foods and food-related products overseas;

(ii) It was a term of the agreements that the “loans” were to be repaid with a “profit" on a stipulated date; and

(iii) When VIE failed to repay the principal sums and the stipulated profit under some of the agreements, the appellants sued the respondents.

Among the key factual findings by the trial judge in Ochroid Trading (supra) were that:

both the form and substance of the Agreements indicated that they were loan contracts. The language used between the parties, and their relationship on the whole, were in fact consistent with a lender-borrower relationship. The trial judge found that the parties actually agreed to a “series of extortionate loans which they sought to disguise as being part of a joint venture investment; and

(ii) after determining that the Appellants were lending money to the Respondents under the Agreements, the trial judge then found that they were unlicensed 42 moneylenders under the SG MLA. This was because they did not fall within the exceptions of a "moneylender” under section 2 of the SG MLA, as the sole object of the Appellant’s business was to lend money at a high interest rate; and

(iii) the trial judge also found that the Appellants were carrying on the business of money lending, as there was a system and continuity in the transactions.

The Court of Appeal affirmed the judge’s conclusion that the Appellants were aware of the true nature of the Agreements, which were money lending transactions that the Appellants sought to disguise as bona fide investments in a joint venture. The Court of Appeal found that the conduct of the Appellants, “who persistently lent monies at extortionate rates over a prolonged period of time without any legitimate commercial motivation other than to profit from usury, falls squarely within the mischief targeted by the [SG] MLA.”

On the applicability of the SG MLA to commercial transactions, the

Agreed with the decision of the trial judge who disregarded the principle that it would be inappropriate to apply the SG MLA to commercial transactions between experienced business persons who did 43 not prima facie have the characteristics of money lending. The trial judge was of the view that the principle did not apply when the parties willfully attempt to evade the SG MLA’s application;

(ii) Went further and held that the SG MLA “extends not just to the rogue “loan shark” who preys on the poor and vulnerable, but to anyone who engages in the business of money lending within the meaning of the [SG] MLA without license”; and

(iii) The scheme of the SG MLA, and the requirement for a licence indicates that the Act also serves to regulate transactions which are outside the exceptions within the SG MLA but fall within the mischief sought to be addressed by the SG MLA, as in the present case From the witnesses testimonies, it is my conclusion that it became clear that the Defendant/Purchaser had developed a mechanism of lending money with property held as security against various third parties, including companies of which Derek and Howard were Directors. The Defendant/Purchaser had acknowledged that all the transactions took the form of Sale and Purchase Agreement. It also 44 followed that in each instance the Vendor/ Plaintiff was making payments to the Defendant/Purchaser in the form of postdated cheque issued in the Defendant’s /Purchaser favour. This highly unusual nature of these transactions failed to be explained by the Defendant when questions were put to him during cross-examination. There are documents bearing the Defendant’s signature which clearly state that the transaction listed involve payments of principal sums and their charges of interest. On the issue of post dated cheques, though the Defendant submits that since the cheques were dishonoured, there is no evidence of interest being paid or collected and hence not a moneylender, nevertheless to my mind the Defendant does not explained in any way the nature and purpose of the payments being made via the post dated cheques. The cumulative effect of all the above evidences which remains unchallenged, to my mind the Defendant/Purchaser is in the business of money lending within the meaning of the Moneylenders Act 1951 cannot be ruled out. That being the case, pursuant to Section 5 of the said Act, the Defendant/Purchaser is required to be licensed in order to carry on the business of money lending. No such licence having been tendered in evidence it must be taken that the Defendant/Purchaser is an unlicensed moneylender and that the Supplementary Agreements 1 and 2 are tainted by these illegal activities. THIRD ISSUE Whether the Supplementary Agreements 1 and 2 were the product of Duress or Illegitimate pressure?? 45

The learned counsel for the Defendant/Purchaser had submitted that the plea of Duress should be rejected based on 3 reasons, namely:

Howard and Derek, who are the Directors of DA Land, are experienced businessman. There is a strong presumption that businessman are careful people and would have ordinarily read and understood a documents before signing. Counsel is relying on the Indian Supreme Court case of Grasim Industries Ltd. v. Agarwal Steel (2010) 1 SCC 83 (SC);

Howard and Derek’s failure to make a police report weakens the strength of their plea of duress. The Court of Appeal in Small Medium Enterprise Development Bank Berhad v. Lim Woon Katt (2016) 5 MLJ 220 (CA) is cited in support;

That Howard and Derek’s evidence is incredible, on the fact of the case and is not to be believed. To decide on this issue, it is best to consider the evidence of (SP1)(SP2) when cross examination by the learned counsel. 46 Testimony Chew Ruenn Hoe (SP1) – Cross examination So your evidence is that Mr. Ong threatened you to sign those two Supplementary Agreements? Yes I put it to you that’s not true? It’s impossible because this is the fact of the matter So when you signed the documents you knew what you were signing (Supplementary Agreement)? I understand what I was signing but I was under the obligation. I was forced to do so. Why were you forced? Because I was on numerous account been threatened by him. He said if we do not compromised on this matter he would send Indian gangster upon us. And we know the tactics of the gangster are very terrible. And I do not want it to be for upon my family neither upon myself So you were frightened, that’s why you signed the two documents, am I correct? I was forced and I was intimidated So you signed it because you were forced and intimidated? Yes. Do you agree with me that there is not one word mentioned in that letter about either money lending or any threats? The entire letter page 115-117? No, Yes under threat I have mentioned that is said under duress at page 116 item 6 the last line of the paragraph. 47 They were irrelevant.? It considered irrelevant, there’s no mention of any gangsters, you agree with me? I do not agree because the fact of the matter is I was forced, under the threat when I was to sign the Supplementary Agreement. From 2015 – 2017 you were still under threat and duress? I was under threat in the year 2016. Whole of 2016 you are under threat? At different times and places I was under threat for at least 5 times. Once was at Viva Mall, twice was at Mr. Ong’s office and 2 more times at the restaurant Between the times you signed the documents and 3rd. January when you saw your solicitor, did you go and lodge your police report? No I did not because I was very afraid Between on each occasion when you were threatened did you go and lodged a police report? I did not because I was very afraid. But you could have if you want to, agree? Yes I agree but I was terribly afraid because the tactics of the gangster would affect my family. Testimony Chew Ruenn Hoe (SP1) – Re examination You give testimony earlier that you afraid when you signed the Supplementary Agreements 1 and 2. Then a question was post to you were you not afraid when you issued a letter on 11 November 2016 when you disputed the sum of RM61 million. Your answer 48 was it did not enter your mind. Why is that the case when you afraid earlier? Because at the point of time my desperation far exceeded my fear. Testimony Chew Ruenn Hing (SP2) – Cross examination look at page 116 Bundle B in para 6. Would you agree with me even as earlier 3rd. January 2017 issue of duress was not relevant as far as you were concern. Not agree When you wrote this letter on 11 November 2016, were you still under duress? Yes There is no letter written in 2016 to my client alleging either money lending or duress, agree? I don’t agree I Suggest to you that this allegation of duress and money lending was afterthought on your part and the part of your brother? I don’t agree Testimony Chew Ruenn Hing (SP2) – Re examination You were also asked yesterday about the fact that you under threat when you signed the Supplementary Agreement 1 and 2 and did you lodged a police report because you were under threat and you answer no. Can you explain?? Because we know how strong Mr Ong with the gangsters. We were worried for the safety of our family and ourselves. We know what they can do to us and as you can see al this, he did not need to worry about the collection through the….. 49 So the sentence you were asked to explain was that “the said agreements were executed under duress for reasons that are irrelevant to the issue at hand”. What was the issue at hand at the point of time? At that time I just want to remove the caveat and let the Court to declare the SPA at end and I want my rights to be determined by the SPA. The above testimony had confirmed that the Defendant’s had threatened to set Indian gangsters against them had they refused to sign the Supplementary Agreements 1 and 2. Both of them had repeatedly stressed that they were continually in fear of the Defendant and his threat to set gangsters on them. To a question as to why they did not lodged a police report, to my mind both the witnesses had given a fair and justifiable reasons in that both of them would fear of the harm which could befall them and their families. Having view their conduct and the testimonies given, to my mind they are witnesses of truth. They have nothing to lie and hide in the interest of justice. Though they have not lodged any police report to that effect, to my mind that would not negate their true story of being forced and was under pressure to sign the Agreements. Nevertheless, that is beside the point. What is more important is that there are ample evidences which lead to a conclusion that both Supplementary Agreements being sham transaction. 50 FOURTH ISSUE Whether the Deposit amounting to RM23 million paid by the Defendant (in the original suit) can be forfeited by the Plaintiff (in the original suit)?? Whether evidence that only RM23 million was paid is admissible?

In the beginning of their submission, the counsel for the Defendant/ Purchaser had quoted Clause 17.1 of the SPA as follow: “17.1 The parties hereto mutually agree and covenant with one another that this Agreement form the entire agreement between the parties with regards to the sale and purchase of the said Property and shall supersede all other previous negotiation and/or agreement. The parties hereto further agree and covenant that any negotiations letters documents agreement and/or instrument whatsoever conducted /executed between the parties prior to the date hereof shall upon the execution hereof automatically expire/terminate and cease to have any force or effect.” According to the learned counsel, this entire agreement clause is also to be read into the Supplementary Agreement 1 and 2 by virtue of clause 3 of each of them. The clause reads: “3. Save and except that the Deposit and the accelerated payment paid by the Purchaser(s) to the Vendor(s) now stands at Ringgit Malaysia Fifty-One Million (RM 51,000,000.00) only and the Balance Purchase Price of the said Property is now Ringgit Malaysia Thirty-Three Million (RM 33,000,000.00) only, all other 51 terms and conditions of the SPA shall remain unchanged and in full force.

In view of the above, the learned counsel had referred the case of: Macronet Sdn Bhd v. RHB Bank Sdn Bhd (2002) 3 MLJ 11 in a passage quoted and applied by the Court of Appeal in Master Strike Sdn Bhd v. Sterling Heights Sdn Bhd

3 MLJ 585.The passage reads as follows: “…………….. The principle on the entire agreement clause in Entrepreneur Pub was followed by Abdul Aziz J (as he then was) in Macronet Sdn Bhd v RHB Bank Sdn Bhd [2002] 3 MLJ 11. There he ruled that the entire agreement-clause precluded variation by oral agreement. At p 25G the learned judge said: ‘……….My opinion is simply this. The entire agreement clause was an agreement between the plaintiffs and the defendants. In agreeing to the clause, the parties must be presumed to have known of the existence of s 92 and of the exceptions in it and to have intended what the clause intended, that is to exclude any attempt to vary the agreement by an oral agreement or statement, which attempt can only be made through the exceptions in s 92. By agreeing, therefore, to the entire agreement clause, the plaintiffs agreed not to resort to any of the exceptions in s 92. They cannot, therefore, be allowed to prove the second precontractual representation or the oral agreement and to rely on them…………”. Applying the above principle to the present case, it is not open to the vendor to now make any assertion that contradicts the terms set out in the SPA and the SA. The plea that a sum less than that stated in the SPA is therefore not admissible. So too, the plea of money 52 lending is not admissible. To conclude, the learned counsel for the Defendant/Purchaser submitted that the Court should not look beyond the four corners of the Supplementary Agreements 1 and 2 by virtue of the entire agreement clause appearing at Clause 17 of the SPA. This clause ousts the operation of the exception set out in Section 92 Evidence Act and relying on the case of Master Strike Sdn. Bhd. (supra). As such, the allegation that the 5 transactions are illegal money lending transactions is an afterthought and the Vendor/Plaintiff (DA Land) should be estopped from raising illegal money lending as a defence.

Before I could proceed to decide further on this issue, it is best to note that the Supplementary Agreements 1 and 2 are incorporated into the SPA and form part of the SPA. Nevertheless the SPA does not contain a severance clause. In the case of: Ling Ing Keat & Ors v. Martina bt Pg Ismail &Ors (2017) 2 MLJ 763 (CA), Abang Iskandar JCA delivering judgment of the court: “……..[25] What is exactly the so-called doctrine of severability in the law of contract? The word severability has its genesis from the Latin word ‘salvatorius' and in the context of severability in the law of contracts, it refers to a provision in a contract which stipulates that in the event that parts of the contract are found to be illegal or otherwise unenforceable, then the remainder of the contract should still apply. As the word suggests it seeks to salvage the rest of the contractual provisions although certain other terms of the same contract are found to be unenforceable. Therefore, the court will need to look at the contract document itself to see whether such provision does exist which would then allow the court to excise the 53 offending provisions so that the rest of the contractual terms continue to operate for the benefits of the contracting parties. ……………………….. [27] The learned trial judge then cited the Federal Court decision in the case of Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd (2010) 1 MLJ 597 where the apex court reiterated the cardinal principle of commercial law that the courts will not rewrite a contract by introducing terms into it just that by so doing, a reasonable interpretation may be made of it. Having this principle at the forefront of his mind, the learned trial judge had concluded on this issue as follows, at p 10 of his grounds of judgment thus: We have to bear in mind that the plaintiffs agreement is for the sale of the whole undivided piece of land. If the court allows specific performance only on 5/6 portions of the said land it would tantamount as rewriting the plaintiffs’ agreement. [28] That being the case, severability could not in law, be justified. The plaintiffs’ agreement was incapable of salvation. With respect, were in agreement with the learned trial judge in his reasoning as well as his finding on the issue of severability. [30] Suffice for us to state here that there was no cogent reason for us to disturb the learned trial judge’s handling of the issue on the severability or otherwise of the plaintiff’s agreement. We endorsed his finding. In fact, as the plaintiff’s agreement was fainted with forged documents, to wit the power of attorney, it is unenforceable in law. In such a circumstance, the doctrine of severability has no application……..” Having said in the above case, I am in agreement that in absence of the severance clause the agreement was rendered unenforceable. The issue of whether payment was made as documented in the Supplementary Agreements 1 and 2 does not solely depend on the 54 challenge to the admissibility. Notwithstanding the written acknowledgments of receipt in the Supplementary Agreements 1 and 2, the Defendant/ Purchaser still bear the evidential burden of proving the actual sums of monies paid to the Vendor pursuant to the Sale and Purchase Agreement. This is clearly stated under Section 103 and 106 of the Evidence Act. The issue is if the Defendant/Purchaser asserted that payment of monies amounting to RM61 million have been paid to DA Land in which it was denied by DA Land for having received the disputed amount, it is my finding that the Defendant has not discharged his burden under Section 103 of the Evidence Act. At the same time, the Defendant had also failed to discharge the evidential burden of his having made the payments. Though the learned counsel had full reliance on the case of Master Strike (supra) and Macronet (supra) nevertheless to my mind both cases can only be applied to proviso’s (b) and (c) of Section 92 Evidence Act and not proviso’s (a) of the same Act. I am more inclined to follow the Federal Court decision in the case of Ganam D/O Rajamany v Sommo S/O Sinnah (1984) 2 MLJ 290 (FC), the Court held that section 92 of the Evidence Act 1950 does not preclude oral evidence to contradict a recital of fact in a written contract. In that case, there was a clause in the agreement that contained an acknowledgement by the vendor of the receipt of the sum of $10,000.00 from the purchaser at the time of the signing of the contract. The vendor denied receipt of the monies meanwhile the purchaser took the position that the monies were paid and received by the vendor’s agent. Further, the purchaser’s solicitor also submitted that the vendor was estopped by sections 91 and 92 to adduce evidence that 55 the $10,000.00 was in fact not paid or received. At the High Court, the learned Judicial Commissioner ruled that the said $10,000.00 that was retained by PW2 on behalf of the vendor. Relying on the acknowledgement in the written contract and sections 91 and 92 of the Evidence Act 1950, the learned Judicial Commissioner said that "it was sufficient for me to come to the conclusion, as I did, that vendor had received the $10,000.00 deposit". The Federal Court did not agree. The Federal Court was of the view that: “…………..it was not sufficient to show that the $10,000.00waspaid to PW2 as agent of the vendor. The learned Judicial Commissioner should have gone further and considered whether or not the defendant had discharged the onus of proving that PW2, as agent, had authority to receive the deposit of $10,000.00 on behalf of the vendor. It is clear from the notes of evidence that the purchaser had made no attempt to discharge this burden…….. …………..Authority for such a proposition may be found in the Privy Council case of Sah Lai Chand v Indarjit (1899 - 1900) 27 IA 93 where it was held that (i) section 91 of the Indian Evidence Act (which is in the same terms with section 92 of our Evidence Act 1950) does not preclude oral evidence to contradict a recital of fact in a written contract and

(ii) it is settled law that, notwithstanding an admission in a sale deed that the consideration has been received, it is open to the vendor to prove that no consideration has been actually paid. If it was not so, facilities would be afforded for the grossest frauds. In our judgment, the learned Judicial Commissioner was therefore wrong in law to shut out the oral testimony of the plaintiff that she did not in fact receive the $10,000.00 from the defendant at the 56 time of the signing of Ex. P1 or at any time thereafter. Since the plaintiff had expressly denied receiving the $10,000.00 from the defendant and in the absence of any evidence that PW2 paid over the $10,000.00 to the plaintiff, the finding of the learned Judicial Commissioner by way of inference, that the plaintiff had received the deposit of $10,000.00 could not be supported………………” In the Supreme Court case of Lim Kar Bee v. Duofortis Properties (M) Sdn Bhd (1992) 2 MLJ 281(SC), Peh Swee Chin SCJ delivering judgment of the Court: “Is it an illegal purpose? Such evidence of such professed intention to avoid paying estate duty is evidence which tends to contradict or vary the documents prepared and signed, for example, to contradict the sale and purchase agreement of the said land; the agreement purporting to be a bona fide commercial transaction of sale at a fixed price, the receipt of which was acknowledged…………….. …………..Such extrinsic evidence, however, is always admissible to defeat a contract on the ground of illegality even if such extrinsic evidence may vary or contradict the contract. There is no need to look far for the authority for saying so, for our own s 92(a) of the Evidence Act 1950 has seen to it. Although evidence of such intention to avoid paying estate duty, as declared by the witnesses, is highly relevant for the purpose of considering the question of illegality of contract, let us look as we are obliged to at the circumstances in the case, especially the various documents designed and signed, to see whether they could be correlated to such evidence of intention…………..” 57

Having considered the above, I can now conclude that it was the Defendant/Purchaser (Mr. ONG) who had breached the Sale and Purchase Agreement. As such, the Vendor/Plaintiff (DA Land) had properly terminated the Sale and Purchase Agreement. In the finality, DA Land is entitled to forfeit the Deposit paid of RM 23 million. In the case of: Hall v. Burnell (1911) 2 Ch. 551, “………….the deposit paid upon a contract between vendor and purchaser is in the nature of an earnest or guarantee for the fulfillment of the contract as well as a part payment of the purchase-money, and a vendor obtaining rescission owing to default in completion by the purchaser is entitled to the deposit, in the absence of any express stipulation to the contrary in the contract…….” DA Land had suffered substantial damages as result of the Defendant/Purchaser breach of the SPA by failing to complete the same and the continuing trespass and unlawful interference over the 3 parcels of land notwithstanding that the SPA was at an end as of 31 October 2016.DA Land gave evidence that one potential purchaser, Luxueux (M) Sdn Bhd had aborted a purchase of the 3 parcels of land together with another parcel as a result of the Defendant/Purchaser’s action. DA then Land then subsequently had to sell the 3 parcels of land at an undervalue of RM40 million being half the value of the purchase consideration in the SPA. It is important to note that the Defendant/Purchaser did not even challenged this evidence of loss and damage to DA Land. Just comparing the 2 transactions, DA Land has suffered a loss and damage of RM44 million (RM84 million - RM40 million). Taking into 58 account the deposit forfeited of RM 23 million, DA Land has suffered loss and damage of RM17million.

In conclusion to the above, it is my finding as below:

The Defendant/Purchaser had failed to pay the Balance Purchase Price within the Completion Date. It also failed to seek an extension of time for the payment. As time is an essence of the Agreement and the time for completion had lapsed, the Vendor/Plaintiff (DA Land) was entitled to terminate the

Even if the Sale and Purchase Agreement had not lapsed by then and still subsists, the Sale and Purchase Agreement is now void for uncertainty as the parties did not mutually agree to an extension of time. As such an agreement to agree is void for uncertainty;

There is no certainty as to the actual amounts were paid by the Defendant/Purchaser. He has offered no proof of the actual amounts that were allegedly paid pursuant to the SPA and could 59 not rebut that some of the payments were tainted with illegality;

The Supplementary Agreements 1 and 2, which form part of the SPA are sham transactions tainted with illegality (illegal moneylending transactions) and are therefore void;

The absence of a Severance Clause in the Sale and Purchase Agreement renders it similarly tainted with illegality as it is linked to the Supplementary Agreements 1 and 2 ;

As DA Land has not acted in default of the Sale and Purchase Agreement, the Letter of Guarantee is not enforceable against Defendant 2 and Defendant 3 (Howard and Derek) in the Counter Claim.

After hearing the submission by both parties, in the premise, on the balance of probabilities, I allow the Vendor/Plaintiff’s (DA Land) case in suit no. 396-07/2017 and dismissed the counter claim in the same suit. I would also allow the prayers sought by the Plaintiff in the Statement of Claim, as in para 29 (1), (2), (4),

(5), (6), (7), (9) and (11). For para (5) and (7), it should be done within (5) working days from the date of this judgment given. In the alternative I hardly find any merit and justification in the 60 Defendant/Purchaser’s case in suit no. 88-02/2017 and is hereby dismissed with cost RM50,000.00. No order as to damages. Dated 02 March 2018 (DATO’ HJ. MOHAMAD SHARIFF BIN HJ. ABU SAMAH) Judicial Commissioner (NCVC 6) High Court of Malaya Shah Alam, Selangor Darul Ehsan Counsel For the Plaintiff/Vendor (in main suit) and for the Defendant (in Counter Claim): Preetha Pillai, Magita Hari Mogan, Tiang Wen En and Kailash Kalaiarasu (Messrs. Skrine) For the Defendant/Purchaser (in main suit) and for the Plaintiff (in Counter Claim) / Mr. Ong Koh Hou: Datuk Seri Gopal Sri Ram, Lua Ai Siew, Elyazura Md Shaarani with David Yii Hiee Kiet. (Messrs. Soo Thien Ming & Nashrah)