Dominion Park Sdn. Bhd. v Gabungan Koperasi Perumahan Malaysia Berhad (BA-24NCvC-133-01/2022)

KERAJAAN NEGERI SELANGOR … DEFENDAN-DEFENDAN JUDGMENT Introduction [1] All forms of commercial ventures are subject to the attendant risks inherent in business dealings. These perils are augmented when a deal or joint-venture agreement is made provisional upon the fulfilment of other conditions. The present case before this Court amply illustrates these points. [2] Despite having signed a valid joint-venture agreement with the First Defendant some 14 years ago and having spent a total of RM19,704,338- 77 (as at 31 August, 2020) and the tenure of the leasehold land having been reduced to 66 years, the Plaintiff is still unable to proceed with the development of the Land. This is due to, as the Plaintiff claims, “total silence” on part of the Second Defendant to sign a tripartite agreement. To the Plaintiff, silence is unquestionably not golden and the Plaintiff is before this Court “to seek justice”. The Overriding Issue [3] The principal issue in this present matter is whether the Second Defendant ought to be compelled to enter into a tripartite agreement with both the Plaintiff and the First Defendant on terms as spelled out in the prayers in the Originating Summons. The Parties and the Background Facts [4] The Plaintiff, Dominion Park Sdn Bhd, is a private limited company involved in the business of housing development. [5] The First Defendant, Gabungan Koperasi Perumahan Malaysia Bhd, as the name suggests, is a cooperative registered under the Cooperative Act 1993. [6] The Second Defendant is the State Government of Selangor. [7] In the year 1987, the Second Defendant had approved to be alienated a piece of land to the First Defendant. The objective was for the First and Second Defendants to jointly develop the land in a housing project. [8] A master title was henceforth issued with conditions attached, one of these conditions being that the land is to be developed jointly with the Second Defendant. Due to financial constraints, the First Defendant was unable to proceed with this housing development project. [9] The genesis of the present suit can be traced to a Joint-Venture Agreement signed between the Plaintiff and the First Defendant on 8 September, 2005, in which the development rights over the Land were given to the Plaintiff. A pertinent term of the Joint-Venture Agreement is that as consideration, the First Defendant is to be paid a sum of RM16,500,000. [10] It is evident that the Second Defendant was not a party to this Joint-Venture Agreement. [11] Equally crucial is the fact that when the Second Defendant became aware of the above Joint-Venture Agreement between the Plaintiff and the First Defendant, in a letter dated 21 February, 2008 to the First Defendant, the Second Defendant through the State’s Economic Planning Unit (“UPEN”) informed the First Defendant that the Second Defendant had considered and agreed to the following, namely, that:

the Second Defendant shall be consulted and approval should be obtained prior to any development and distribution of profits of the Land;

the Second Defendant shall be entitled to 50% of the returns obtained by the First Defendant or value equivalent to the current premium value of the Land, whichever higher; and

the First Defendant, developer and the Second Defendant shall enter into a tripartite agreement. [12] The aforesaid decision of the Second Defendant was reaffirmed in another letter from UPEN dated 23 September, 2008. [13] Following the above, a draft of the tripartite agreement was sent by the First Defendant to the Second Defendant, first, in July 2008 and again in May 2015 for the latter’s comments and review. [14] In November 2015 and in January, 2016, the Second Defendant informed the First Defendant that the draft of the tripartite agreement was being considered. [15] The First Defendant had also in letters addressed to the Chief Minister of the State of Selangor on 19 and 25 October, 2016 appealed for the entitlement of the Second Defendant be reduced to 25%. [16] From 2017 to 2022, the Plaintiff wrote numerous appeal letters to both UPEN and the Chief Minister, enquiring on the status and urging the Second Defendant to expedite their review and decision relating to the tripartite agreement. Finally, on 24 January, 2022, the Plaintiff received a letter from the solicitors for the First Defendant informing the Plaintiff that UPEN was still reviewing the draft tripartite agreement. [17] However, in August of 2021, the First Defendant had intimated to the Plaintiff that the Second Defendant had expressed the view that the consideration for the land to be paid by the Plaintiff must be based on the current market value. The original consideration sum was RM16,500,000. The Second Defendant also agreed that the tenure of the lease be extended to 99 years. [18] The Plaintiff replied saying that they disagree to the change in the terms. [19] With the issue pertaining to the tripartite agreement unresolved, this land development project cannot proceed as the local council will not approve the building plans as long as the tripartite agreement is not signed. Coupled with the continued losses and damage suffered by the Plaintiff, it has filed this present Originating Summons seeking: 1) a declaration that the profit-sharing ratio between the First Defendant and the Second Defendant to the consideration in the sum of RM16,500,000-00 (“Consideration”) pursuant to the Agreement dated 8.9.2005 signed between the Plaintiff, First Defendant and Ciptaan Laksana Sdn Bhd shall be based on the Second Defendant’s letter dated 21.2.2008, which is as follows (“Entitlement Ratio”)

the First and Second Defendants shall split the Consideration in the ratio of 50%:50%; or

the First Defendant shall pay the Second Defendant the value equivalent to the current premium value of the land held under H.S. (D) 18629, PT 11475, Mukim of Ulu Kelang, District of Gombak (“the Land”) - whichever is higher; 2) a declaration that any tripartite agreement to be entered into between the Plaintiff, First Defendant and Second Defendants herein shall reflect the Entitlement Ratio between the First and Second Defendants; 3) an order that the tenure of the lease for the Land be extended by the Second Defendant to 99 years at no cost to the Plaintiff; 4) damages to be assessed by this Honourable Court and awarded to the Plaintiff, to be borne equally by the First and Second Defendants with interests at the rate of 4% per annum from the date of the order determining the damages until full payment of damages; 5) costs of this Originating Summons to be borne equally by the Defendants; and 6) parties be given the liberty to apply for any consequential orders for compliance of the orders granted herein. The Contention by the Parties [20] The crux of the Plaintiff’s case is that it has suffered grave injustice as a result of the inaction or reluctance on the part of the Second Defendant to proceed in signing a tripartite agreement based on terms that they have initially agreed to in principal. [21] The core grounds in support of the reliefs sought by the Plaintiff are that (i) the deadlock between the First and Second Defendants concerning their entitlements has put the spanner in the works re the tripartite agreement; (ii) the development project has been stalled with the resulting losses and damage suffered by the Plaintiff; (iii) the delay has also resulted in the reduction in the leasehold tenure; and (iv) the Plaintiff’s expenses and financial commitments continue to escalate. [22] The Plaintiff referred this Court to Setiausaha Kerajaan Negeri Sembilan Darul Khusus & Anor v NS Water Konsortium Sdn Bhd & Ors [2021] AMEJ 0010; [2021] 4 CLJ 397; [2021] 3 MLJ 302; [2021] 2 MLRA

[23] The First Defendant raised the following preliminary issues, namely, that:

the reliefs claimed in this action are mandamus in nature and the Plaintiff should have commenced this suit under paragraph 1 of the Schedule to the Courts of Judicature Act 1964 by a prerogative writ with leave of Court under Order 53 rule 3(1) of the Rules of Court 2012;

alternatively, there are substantial disputes of facts which should have been commenced by way of writ;

the Second Defendant was not joined as a party in an earlier Suit 20 and as such, the Court Orders should not be enforced against the Second Defendant;

the Plaintiff’s claim against the Defendants is a regurgitation of the earlier Suit 20 which constitutes a multiplicity of proceedings;

the Plaintiff did not state the written law or rules which gives the Court power to enforce its Judgment; and

the Plaintiff is a Judgment Creditor of the First Defendant and has no standing to sue the Second Defendant. [24] The reference to an earlier Suit 20 is explained in para [41] below. [25] In response to the mandamus point, the Plaintiff cited the cases of Saw Shiuo Shyong @ Sonny Saw v Pengarah Tanah dan Galian Wilayah Persekutuan Kuala Lumpur & Ors [2021] AMEJ 2187; [2021] LNS 2566; [2021] MLJU 2866; [2021] MLRHU 2424, Koon Hoi Chow v Pretam Singh [1972] CLJU 56; [1972] 1 MLJ 180B; [1972] 1 MLRH 497, Chan Mun Poy v Director-General of Telecommunications & Anor [1981] CLJU 97; [1981] 2 MLJ 293; [1981] 1 MLRH 678, Tan Sri Haji Othman Saat v Mohamed bin Ismail [ 1982] CLJU 2; [1982] 2 MLJ 177; [1982] MLRA 496, Datuk Syed Kechik bin Syed Mohamed v Government of Malaysia ][1978] CLJU 44; [1979] 2 MLJ 101; [1978] 1 MLRA 504, AKB Airconditioning & Electrical Sdn Bhd v Hew Foo Oon [2002] AMEJ 0038; [2002] CLJU 26; [2002] 5 MLJ 391; [2002] 5 MLRH 119 and Jarom Angkut Sdn Bhd v Ketua Pengarah Jabatan Pengangkutan Jalan Malaysia [2021] AMEJ 2029; [2022] 2 CLJ 941; [2021] MLJU 2702; [2021] MLRHU 2220. [26] The Second Defendant raised 3 main grounds. [27] The first relates to the Intitulement in the Originating Summons. [28] As the Court of Appeal has allowed the amendment, this ground has been rendered academic. [29] The second ground was couched by the Second Defendant in the following terms: “Sama ada Defendan Kedua adalah tertakluk kepada terma-terma penetapan kadar perkongsian keuntungan berdasarkan kepada Perjanjian bertarikh 8.9.2005 yang ditandatangani antara Plaintif, Defedan Pertama dan Ciptaan Laksana Sdn. Bhd pada kadar balasan dalam RM16,500,000-00” [30] The Second Defendant argued that: Defendan Kedua selanjutnya menghujahkan bahawa relif pertama dan kedua yang dipohon oleh Plaintif adalah berhubung dengan suatu perintah deklarasi ke atas pihak Defendan Pertama dan Defendan Kedua ke atas Perjanjian Tiga Pihak yang masih belum ditandatangani lagi. [31] The Second Defendant relied on section 29 of the Government Proceedings Act 1956 and YKK (Malaysia) Sdn Bhd v Pengarah Tanah dan Galian Johor [2021] AMR 457; [2021] 8 CLJ 179; [2021] MLJU 1206; [2021] 5 MLRA 476 and underscored the fact that since it was not a party to the Joint-Venture Agreement between the Plaintiff and the First Defendant, it is not bound by any of the terms or conditions in the said Joint-Venture Agreement. It was argued by the Second Defendant that it had not agreed to the consideration sum of RM16,500,000 as stated in the Joint-Venture Agreement. [32] Reliance was made to the case of Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 AMR 3533; [1997] 1 CLJ 625; [1996] 3 MLJ 327; [1996] 2 MLRA 188 for the proposition that “An agreement to make an agreement does not result in a contract” and Bank Islam Malaysia Bhd v Lim Kok Hoe & Anor and Other Appeals [2009] 6 CLJ 22 where it was said that the Court should not rewrite the terms of a contract between the parties that it deems to be fair or equitable. [33] The third ground was again framed in the form of a question, that is, whether: Mahkamah Yang Mulia ini mempunyai bidangkuasa untuk memberikan tempoh pajakan tanah sehingga 99 tahun tanpa sebarang kos kepada Plaintif? [34] On this third ground, the Second Defendant referred this Court to section 76 and 90A(5) of the National Land Code. [35] Section 76 of the National land Code provides as follow: The alienation of State land under this Act shall consist of its disposal by the State Authority— (a) for a term not exceeding ninety-nine years; and section 90A reads as follows: Extension of land alienated for a term of years

The proprietor of any land alienated for a term of years may apply to the State Authority for the term to be extended.

The application shall be made before the expiry of the term specified in the document of title.

Upon receiving any application referred to in subsection (1), the Land Administrator shall endorse, or cause to be endorsed, a note on the register document of title to the land to which the note relates.

The State Authority shall not entertain any such application unless the State Authority is satisfied with respect to every person or body having a registered interest in the land, either that he has consented to the application or that his consent ought in the circumstances of the case to be dispensed with.

The approval or rejection of an application under subsection (1) shall be at the discretion of the State Authority, and such approval if given, may be subject to —

payment of premium as may be determined by the State

other charges as may be prescribed. ……. [36] Accordingly, it was the Second Defendant’s submission that when the above provisions are read together with the section 25 of the Courts of Judicature Act 1964, the answer to the question posed is in the negative. The Decision of this Court [37] On the grounds raised by the First Defendant, this Court is of the considered view that the reliefs sought are not mandamus in nature and thus do not fall under the scope of judicial review. The Plaintiff is thus entitled to rely on Orde 15 rule 6 of the Rules of Court 2012. [38] This Court is also of the view that the commencement of this action by Originating Summons instead of Writ is not fatal. [39] It is also a finding by this Court that Enclosure 1 is not filed to enforce any High Court Judgment, Court of Appeal Order or Federal Court Order. In addition, the Plaintiff is not seeking the reliefs in its capacity as a “Judgment Creditor”. This Court agrees with the Plaintiff’s contention that what the Plaintiff has sought to do is merely relying on the Court orders as a basis to support the declaratory reliefs sought for in Enclosure 1. [40] The decisive feature in this Suit are the following vital facts. [41] First, that the Joint-Venture Agreement between the Plaintiff and the First Defendant was a valid and binding contract is not in dispute. In fact, the parties have litigated over this Joint-Venture Agreement in Suit No: BA-22NCVC-20-01/2017) (“Suit 20”), with an attempt by the First Defendant to have the contract declared as incapable of being performed (on the ground of frustration) proven unsuccessful and a counterclaim by the Plaintiff against the First Defendant for specific performance of the Joint-Venture Agreement proven successful in both the High Court and the Court of Appeal (with leave denied by the Federal Court). [42] Second, this land development project can only be “effectually” carried with the “cooperation” or “consent” by the Second Defendant. The heart of problem (at least to the Plaintiff) is that the Second Defendant was never a party to the Joint-Venture Agreement signed between the Plaintiff and the First Defendant and at the risk of repetition, this joint-venture project can only be successfully or effectively carried out upon the signing of a tripartite agreement by the Plaintiff, the First Defendant and the Second Defendant. [43] Hence, the Plaintiff is before this Court (again) – despite having succeeded in Suit 20 in its counterclaim – because it has suffered losses and damage over these years. [44] Third, this Court is of the considered view that obligations and liability of the First Defendant towards the Plaintiff, if any, is incontestable and the judgment of the High Court in Suit 20 is testimony to this fact. However, as to how the Plaintiff may or will be able to “realise” the fruits of its litigation in Suit 20 is another and challenging aspect. The fact of the matter is that the challenge presented is enormous. A stalemate will remain as long as the Second Defendant refuses to sign a tripartite agreement to carry the matter forward. [45] In short, this Originating Summons application is for this Court to not just compel the Second Defendant to be a party to a tripartite agreement, it goes further in seeking this Court to require the Second Defendant to agree to terms that the Second Defendant has not conclusively agreed to. Henceforth, we are confronted with the single significant poser of whether the Second Defendant is bound under the law to sign a tripartite agreement with the Plaintiff and the First Defendant on terms that it had not agreed to. [46] As much as this Court sympathises with the predicament faced by the Plaintiff, it is of the considered view that the Second Defendant is not obligated in law to sign a tripartite agreement with the Plaintiff and the First Defendant on terms that it had never agreed. At most, any “agreement” was only conditional in nature. [47] This Court is reminded of the apposite remark by Arifin Zakaria FCJ (as His Lordship then was) in Minister of Finance, Government of Sabah v Petrojasa Sdn Bhd [2008] 5 AMR 1; [2008] 5 CLJ 321; [2008] 4 MLJ 641; [2008] 1 MLRA 705 that “a court should not fold its arms and watch in despair” when a party is before it “seeking justice”. Unfortunately, this is not a case of this Court folding its arm and rebuffing the Plaintiff. As noted, the reliefs sought by the Plaintiff in the instant case to compel the Second Defendant to sign a tripartite agreement on terms that they have never agreed to will be against the most basic tenets of contract law. [48] In all likelihood, when the Plaintiff signed the Joint-Venture Agreement with the First Defendant, it must have been aware of all the associated risks. [49] This Court is conscious of the fact that the First Defendant has no intention nor the desire for the joint-venture project to proceed (as evident from Suit 20 which it had filed (and lost) and is gleeful at the fact that the Second Defendant has not to date agreed to be a party in any tripartite agreement unless the terms set out by the Second Defendant are agreed upon. [50] It is left for the Plaintiff to weigh its options and pursue whatever reliefs it is entitled to under the Joint-Venture Agreement against the First Defendant. [51] The application in Enclosure 1 is dismissed with costs. [52] The Plaintiff to pay costs of RM10,000 to the First Defendant, subject to allocator, and costs of RM10,000 to the Second Defendant. Dated: 29 February, 2024 sgd [CHOONG YEOW CHOY] Judicial Commissioner High Court of Malaya Shah Alam Counsel: Ho Zhi Yee for the Plaintiff (Messrs. Wong Kian Kheong) Evangeline Yii for the First Defendant (Messrs. Kanesalingam & Co.) Khairul Nizam Abu Bakar for the Second Defendant (Pejabat Penasihat Undang-Undang Negeri Selangor)