a
(a) Stellar Walk would be Malaysia’s first Edutainment Mall, specifically designed to attract students and families;
/akn/my/judgment/high-court/2026/5f67db96-bd0d-478e-9604-ed7febe292d7
High Court of Malaysia6 May 2026JA-23NCvC-9-09/2019
The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.
Citations and treatment detected automatically from later judgments and the authorities this decision relies on.
Later cases and laws citing this decision
Not yet cited by a later decision.
Earlier cases and laws this decision relies on
“(1) of the Valuers, Appraisers and Estate Agents Act 1981[Act 242] as they are not licensed under the Act. Their conduct are illegal and hence, they are not protected by the Contract Act 1950 [Act 136].”
“and at p. 709 thereto, James LJ aptly said, “Of course the misrepresentation, if misrepresentation there be, must be a misrepresentation of a matter of fact,....”). [24] Misrepresentation under the Contracts Act 1950 would include:”
“(1) of the Valuers, Appraisers and Estate Agents Act 1981[Act 242] as they are not licensed under the Act. Their conduct are illegal and hence, they are not protected by the Contract Act 1950 [Act 136].”
“/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 They further argue for an adverse inference under section 114(g) of the Evidence Act 1950 [Act 56] be invoked against the Plaintiff because the Plaintiff failed to call Tang, the key person of t”
“party who had been induced to enter into the contract through an innocent misrepresentation, may choose to set aside the contract of his own accord or by seeking the assistance of the court under the Specific Relief Act 1950 (Abdul Razak Datuk Abu Samah v. Shah Alam Properties Sdn Bhd & Anor Appeal [1999] 3 CLJ 231 CA)”
“argue that the representee was not sufficiently diligent in examining the statement simply because the representor did not realise the untruthfulness of the statement (Aaron’s Reefs, Limited v. Twiss [1896] AC 273, at p. 281, HL). [23] It must be borne in mind that the representor’s statement which has affected the min”
“44. In Esso v Mardon [1976] QB 801, Lord Denning in deciding this case had stated as follows: “It seems to me that Hedley Byrne, properly understood, covers this particular proposition: If a man, who has or professes to have special”
“84. In Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and Another Appeal [2017] MLJU 1976, the Federal Court held at paragraphs 75-76 as follows: “[75] Given the key role that Soon played in advising the board of its financial position and of the options available to resolve its cash-flo”
Auto-detected from judgment text; not a substitute for a citator check.
Text
1 IN THE HIGH COURT OF MALAYA IN JOHOR BAHRU IN THE STATE OF JOHOR DARUL TAKZIM MALAYSIA CIVIL SUIT NO. JA-23NCVC-9-09/2019 BETWEEN GOLDFIRE SDN BHD [Company No.: 822145-V] … PLAINTIFF AND
section
1. YAP TEAK FAH (IC No.: 760819-01-6257)
section
2. MIKE LIM SIAW FHUNG (IC No.: 701030-12-5005)
section
3. GREENLAND MALAYSIA REAL ESTATE OPERATOR SDN BHD (Company No.: 1085306-T)
section
4. JYM MARKETING SDN BHD (Company No.: 814076-V)
section
5. PARCO KIDS EDUTAINMENT SDN BHD (Company No.: 1210568-V) … DEFENDANTS GROUNDS OF JUDGEMENT INTRODUCTION
section
1. The Plaintiff’s claim against the Defendants arise from, inter alia, negligence and alleged misrepresentation which induced the Plaintiff to enter into a tenancy and expend tal on renovations. 23/07/2026 22:59:58 JA-23NCvC-9-09/2019 Kand. 234 S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 2
section
2. At the end of the full trial, I dismissed the Plaintiff’s claim and awarded costs of RM10,000.00 to each of the Defendants subject to allocator fees, to be paid by the Plaintiff to each of the Defendants within fourteen (14) days from the date of this Order. I also dismissed the Fifth Defendant’s counter claim with no order as to costs.
section
3. Below are the grounds of my decision. BACKGROUND
section
4. The background facts of this case are gathered from the cause papers and submissions filed by the parties and stated in chronological order.
section
5. In late 2017 and early 2018, the Plaintiff was approached by the First Defendant (“D1”) and the Second Defendant (“D2”) who are directors of Fourth Defendant (“D4”) regarding a tenancy at Stellar Walk. The Plaintiff alleges that the Defendants made the following key representations to induce the tenancy:
a
(a) Stellar Walk would be Malaysia’s first Edutainment Mall, specifically designed to attract students and families;
b
(b) provided a list of numerous confirmed and potential businesses, including a supermarket, a florist, a flying school, and several restaurants, to suggest high foot traffic; and S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 3
c
(c) the Plaintiff was promised a renovation subsidy of RM40.00 per square foot.
section
6. Based on these representations, the Plaintiff agreed to rent unit RT4- GF-01 (approx. 1,922 sq. ft.). On 13.03.2018, the Plaintiff paid a deposit and fees totaling RM42,890.00 to the Fifth Defendant (the landlord of the Stellar Walk premises) (“D5”).
section
7. Following the agreement, the Plaintiff took possession and commenced extensive renovations. The Plaintiff claims to have incurred costs totaling RM609,052.53 for renovations and RM86,477.00 for kitchen equipment and other ancillary costs. The Plaintiff contends these expenses were incurred in reliance on the representations that the mall would be a functional, high-traffic commercial hub.
section
8. The Plaintiff contends that the project failed to materialize as represented citing the following grievances:
a
(a) the building was in poor condition, suffering from water leaks during rain which hindered operations;
b
(b) the promised Edutainment Mall concept and the diverse range of confirmed tenants never materialized, leaving the mall largely vacant; and
c
(c) the promised renovation subsidy was never paid despite the Plaintiff proceeding with works. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 4
section
9. Consequently, the Plaintiff claims against the Defendants jointly and severally for, inter alia, special damages, including—
i
(i) special damages: recovery of the RM42,890.00 deposit, RM609,052.53 in renovation costs, and RM43,587.00 in incidental costs;
subparagraph
(ii) loss of future income: RM8,217,464.00, representing projected profits over a four-year period (calculated at RM5,628.40 per day); and
subparagraph
(iii) interest and costs: interest at 5% per annum from the date of the claim to the date of judgment, and from judgment until full settlement, as well as legal costs.
section
10. The Defendants have filed their respective Defences. Their respective positions and submissions will be dealt with according to the issues identified for determination.
section
11. The matter proceeded to full trial before this Court. The Plaintiff called a total of fifteen (15) witnesses, whereas D1, D2, D4 and the Sixth Defendant ("D6’’) called two (2) witnesses, meanwhile Third Defendant (“D3”) and D5 called one (1) witness each. ISSUE TO BE DETERMINED
section
12. The issues to be determined are as follows:
a
(a) whether the Defendants made actionable misrepresentations S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 that induced the Plaintiff to enter the tenancy agreement;
b
(b) whether the D3 and D5 are liable for representations made by Third Party;
c
(c) whether the Plaintiff has proven the quantum of damages; and
d
(d) whether D5 is entitled to its counter claim for arrears. ANALYSIS AND COURT’S FINDINGS
a
(a) Whether the Defendants made actionable misrepresentations that induced the Plaintiff to enter the tenancy agreement
section
13. The central issue before this Court is whether the Defendants, or any of them, made actionable misrepresentations that induced the Plaintiff to enter into a commercial tenancy agreement for unit RT4- GF-01 at the Stellar Walk development. Plaintiff’s version
section
14. The Plaintiff through its Managing Director of the Plaintiff, PW3, testified that he was contacted by D1 in late 2017. When he attended a ceremony at Stellar Walk in January 2018, he met D1, D2, and Tom Tang.
section
15. According to PW3, Tom Tang provided a name card (Exhibit D3) identifying himself as the Commercial Leasing Assistant Director of D3. He represented that Greenland owned the mall and had S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 appointed D1, D2, and the D4 as agents to promote Stellar Walk.
section
16. PW3 informed that D1 and D2 also confirmed that they were appointed as an agent to market Stellar Walk and both of them are Directors of D4. D1 and D2 also confirmed that D3 was the company that appointed them.
section
17. PW3 contends that D1, D2, D4 and D6, acting as agents for the D3 and D5, have made false representations to induce the Plaintiff into the tenancy. Specifically, they represented that Stellar Walk as Malaysia's first Edutainment Mall, specifically designed to attract large student crowds, which they assured would make a Sugar Bun outlet highly profitable.
section
18. PW3 was provided with a list of 24 tenants (e.g., Robotmet, a fresh market, a music school) who had allegedly already agreed to operate at the mall. They also represented that Stellar Walk would be a successful Edutainment Mall filled with specific confirmed tenants.
section
19. Because PW3 was dissatisfied with the building's condition, D1 allegedly promised that a canopy would be built to prevent rain from making floors wet and that tile repairs would be completed.
section
20. PW3 alleged that, relying on the Defendants' representations regarding the prospects of Stellar Walk, it agreed to establish a Sugar Bun outlet there and invest nearly RM1 million in renovations. On 09.02.2018, PW3 received a Letter of Offer (“LOO”) from D5 to lease Unit RTS-GF-O1C. Subsequently, D2, acting on behalf of D4, S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 proposed a larger unit, which was later formalised by D5 through a revised LOO dated 24.02.2018 for Unit RT4-GF.
section
21. PW3 further relied on a letter dated 09.02.2018 from D1, bearing the logos of Greenland, Iskandar Waterfront and D4, which promised a renovation subsidy of RM40.00 per square foot and three (3) months' rent-free period. Pursuant to the revised LOO, PW3 paid a rental deposit of RM42,890.00 on 13.03.2018, although no receipt was issued. PW3 testified that the promised renovation subsidy was never paid by the Defendants.
section
22. Despite the absence of a signed Tenancy Agreement (“TA”), D5 has instructed PW3 on or about 22.05.2018 to commence renovation works on Unit RT4-GF. Prior to the renovations, a joint inspection was conducted by the Plaintiff's representative and Kannan, representing the owner of Stellar Walk, during which defects in the unit were identified and the PW3 requested that they be rectified.
section
23. At D5's request, PW3 also submitted the necessary fitting-out application forms and complied with various fitting-out requirements, notwithstanding that no formal TA had been executed.
section
24. Relying on the Defendants' instructions and representations, PW3 appointed contractors and suppliers to carry out the renovation and fitting-out works, all of which were completed before any TA was signed.
section
25. During the renovation period, PW3 visited Stellar Walk on 30.07.2018 and observed a signboard displaying a list of prospective S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 tenants, reinforcing the Defendants' representations regarding the anticipated occupancy of the development. PW3 was also provided with promotional materials stating that Stellar Walk would be developed into a kangaroo park. However, despite these representations, Stellar Walk has remained an abandoned mall.
section
26. PW3 asserts these representations were the sole inducement for their investment.
section
27. The Plaintiff further contend that D1, D2, D4 and D6 were actively procuring tenants for Stellar Walk and they are paid by D3 or D5 a fee for procuring a Tenant and this is in breach of subsection 22C
subsection
(1) of the Valuers, Appraisers and Estate Agents Act 1981[Act 242] as they are not licensed under the Act. Their conduct are illegal and hence, they are not protected by the Contract Act 1950 [Act 136].
section
28. Therefore, D1, D2, D4 and D6 are liable jointly and severally to the Plaintiff. D3 and D5 as principals are liable for the misrepresentation by Tom Tang who was the Commercial Leasing Assistant Director of D3 who also signed on behalf of D5 as a Commercial Leasing Manager. D3 and D5 had failed to call Tom Tang as a witness to rebut the misrepresentation. Defendants’ version
section
29. The Defendants (collectively and individually) argue that the Plaintiff has failed to prove the essential elements of actionable misrepresentation. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 9
section
30. The primary defence D1, D2, D4 and D6 is that the Plaintiff did not rely on their statements. They highlight that PW3 admitted to conducting independent due diligence which yielded negative results, yet he still made a commercial call to proceed.
section
31. D1, D2, D4 and D6 argue that the representations were true when they were made in early 2018. They produced signed LOO(Exhibits D56–D78) from other potential tenants to prove that those parties had indeed committed to the mall at that time. They contend they cannot be held liable because the mall subsequently failed due to unforeseen commercial circumstances.
section
32. D1, D2, D4 and D6 argue they were merely promotional agents with limited roles and no authority over mall maintenance or the construction of a canopy. Therefore, there is no requirement for them to be licensed under the Act 242.
section
33. D5 argued that its agreement with D6 which expressly prohibited the agent from making promises or misrepresentations.
section
34. D3 denied that Tom Tang was ever their employee or that they were even the landlord of the units, characterizing Tom Tang as a "mystery" until confronted with photographic evidence of him at official ceremonies. They maintain they made no direct representations to the Plaintiff.
section
35. D3 further contend that Tom Tang, who allegedly made the most significant representations, was not their authorized representative. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 They further argue for an adverse inference under section 114(g) of the Evidence Act 1950 [Act 56] be invoked against the Plaintiff because the Plaintiff failed to call Tang, the key person of their claim to testify.
section
36. D3 argues the Plaintiff is bound by its pleadings and that complaints regarding the canopy, road conditions, and leaks were not adequately specified in the Amended Statement of Claim. They contend that any projected profitability was strictly contingent on the Plaintiff actually opening the outlet, which they admittedly never did.
section
37. D3 also argued that they were not the landlord of the premises and were not a party to the LOO. Court’s Analysis and Findings
section
38. To establish actionable misrepresentation, the Plaintiff must prove that the statements were false, material, and that they induced the Plaintiff to enter the contract.
section
39. Section 18 of Act 136 defined “misrepresentation” as follows: “ Misrepresentation includes—
a
(a) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
b
(b) any breach of duty which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him; and S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 11
c
(c) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.”. [Emphasis added]
section
40. Section 19 of Act 136 provides that— “19. (1) When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
subsection
(2) A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.”. [Emphasis added]
section
41. The Plaintiff in the amended Statement of Claim (Enclosure 46), alleged all the Defendants have breached their duty of care and/or caused breach of the contract premised on the negligent misrepresentation.
section
42. In this regard, I refer to the Court of Appeal decision in the case of Balakrishnan Devarai & Anor V Admiral Cove Development Sdn. Bhd. [2010] 7 CLJ 152, where Abdul Malik Ishak JCA has explained the definition of misrepresentation as follows: “[17] It is quite common that in the course of the formation of a contract, one party may make representation to another party. Thus, a representation is a statement by one party (the representor) to the other party (the representee) which relates to an affirmation, a denial, a description of a S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 12 certain fact, present or as to the future. And if the representation is untrue it is termed as a misrepresentation. [18] Put in another way, a misrepresentation must be a false statement of existing fact which is normally made prior to, or during the preliminary stages of a contract and is made with the intention of and has the effect of inducing the party to whom it is made to enter into the contract with the representor. [19] Of course, it is always incumbent upon the representee, in order to obtain relief under the doctrine of misrepresentation, to prove to the court the actionability of the misrepresentation. And for a misrepresentation to be actionable, that misrepresentation must be a false statement of fact which induces the representee to enter into the contract It must not be forgotten that the misrepresentation must be material in nature in that a reasonable man would be influenced by it. [20] According to the case of Amison v. Smith [1889] 41 Ch. D 348, a statement made by a representor which induced the representee to enter into a contract with him is considered a misrepresentation if it was false or conveyed a false impression to the representee (per Cotton LJ at p. thereof). [21] The motive of the representor, or his state of mind, is immaterial in determining whether or not his statement is a misrepresentation, although the state of mind is looked at in ascertaining whether a misrepresentation is fraudulent or not. According to Jessel MR in Smith v. Chadwick [1881-82] 20 Ch. D 27, at p. 44, CA, that whatever his motive, the representor is liable upon his false statement, and “he cannot be allowed to escape merely because he had good intentions, and did not intend to defraud”. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 [22] Neither can the representor argue that the representee was not sufficiently diligent in examining the statement simply because the representor did not realise the untruthfulness of the statement (Aaron’s Reefs, Limited v. Twiss [1896] AC 273, at p. 281, HL). [23] It must be borne in mind that the representor’s statement which has affected the mind of the representee and has induced him to make the contract in question, must be a statement of fact, either existing or past (Eaglesfield v. Marquis of Londonderry [1876-77] 4 Ch. D 693, and at p. 709 thereto, James LJ aptly said, “Of course the misrepresentation, if misrepresentation there be, must be a misrepresentation of a matter of fact,....”). [24] Misrepresentation under the Contracts Act 1950 would include:
a
(a) the positive assertion in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true (s. 18(a) of the Contracts Act 1950 );
b
(b) any breach of duty which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him (s 18(b) of the Contracts Act 1950); and
c
(c) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement (s. 18(c) of the Contracts Act 1950). [25] It is quite apparent that misrepresentation as defined in the Contracts Act 1950 covers situations of innocent misrepresentation as understood in common law. The difference between misrepresentation and fraud is this. In fraud, the person making the representation does not himself believe in S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 its truth. In misrepresentation, the representor may believe the representation to be true. [26] By virtue of s. 19(1) of the Contracts Act 1950, a contract entered into by a party either through innocent or fraudulent misrepresentation is voidable at the option of the party whose consent was so obtained. Thus, the innocent party who had been induced to enter into the contract through an innocent misrepresentation, may choose to set aside the contract of his own accord or by seeking the assistance of the court under the Specific Relief Act 1950 (Abdul Razak Datuk Abu Samah v. Shah Alam Properties Sdn Bhd & Anor Appeal [1999] 3 CLJ 231 CA). [27] To trigger an inducement, two essential elements are necessary. Firstly, the representee must in fact rely on the representor’s statement in the contract concerned. Secondly, the representor at the time of entering the contract, must have the intention, or at least realise, that the statement will, or probably will, be relied upon by the representee. [28] Thus, both the representee’s reliance on a misstatement and the representor’s intention to induce are material in cases of misrepresentation. The court would infer that the representor intended to induce by looking at the circumstances in which the representation was made. In William Smith v. David Chadwick, John Oldfield Chadwick, Ebenezer Adamson, And Edwin Collier [1883-84] 9 App. Cas. 187, at p. 190, HL, the Earl of Selborne LC had this to say: the intention which the law justly imputes to every man to produce those consequences which are the natural result of his acts.... [29] In I.B.Coaks, C.J. Bunyon, F.E. Watson, W. Cadge, E. K. Harvey, C. Bailey, And J. Cross v. J.F. Boswell and Others [1886] 11 App. Cas. 232, at p. 236, the House of Lords observed through Earl of Selborne that: S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 15 A man is presumed to intend the necessary or natural consequences of his own words and acts; and the evidentia rei would therefore be sufficient without other proof of intention. [30] A representation is said to be material if by its nature, it displays a tendency to induce the representee to enter into the contract. In Smith v. Chadwick [188182] 20 Ch. D 27, at p. 44, CA, Jessel MR aptly said that the representation was: of such a nature as would induce a person to enter into the contract, or would tend to induce him to do so, [31] All the representee has to prove is that he was, in fact, induced to enter into the contract by the representor.“. [Emphasis added]
section
43. I further refer to the another Court of Appeal decision in Abdul Razak Datuk Abu Samah v Shah Alam Properties Sdn. Bhd. & Another Appeal [1999] 3 CLJ 231 where Gopal Sri Ram JCA (as he then was) has stated as follows: “Misrepresentations in turn are of three types, depending upon the state of mind of the maker. That state of mind may be fraudulent, negligent or innocent, in the sense that it is truly free of any blameworthiness or inadvertence. The existence of a particular state of mind on the part of the representor determines, in the absence of acquiescence, the range of remedies available to the representee. Fraudulent or negligent misrepresentation renders a contract voidable at the instance of the representee. See, Contracts Act 1950, s. 19(1). The representee is therefore entitled to apply to a court for a decree of rescission from a court and also to an award of damages. See, Archer v. Brown [1985] 1 QB 401. Damages are available in addition to rescission because an S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 action for fraudulent misrepresentation is grounded upon the tort of deceit, and in the case of negligent misrepresentation upon the tort of negligence.”. [Emphasis added]
section
44. In Esso v Mardon [1976] QB 801, Lord Denning in deciding this case had stated as follows: “It seems to me that Hedley Byrne, properly understood, covers this particular proposition: If a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another be it advice, information or opinion - with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable. If he negligently gives unsound advice or misleading information or expresses an erroneous opinion, and thereby induces the other aide into a contract with him, he is liable in damages. This proposition is in line with what I said in Candler v. Crane Christmas & Co. (1951) 2 King’s Bench at pages 179-180, which was approved by the majority of the Privy Council in Mutual Life & Citizens Assurance Limited v. Evatt (1971) Appeal Cases 793. And the Judges of the Commonwealth have shown themselves quite ready to apply Hedley Byrne between contracting parties; see in Canada Sealand v. Ocean Cement (1973) 33 Dominion Law Reports (3rd) 625 and New Zealand Capital Motors v. Beecham (1975) 1 New Zealand Law Reports 576.”. [Emphasis added]
section
45. Based on the authorities above, the Plaintiff must prove that D1, D2, D4 and D6 held themselves out as authorised agents of the D3 and/or D5 in procuring tenants for Stellar Walk and, in that capacity, represented that Stellar Walk would become a successful Edutainment Mall with a strong tenant mix and profitable business prospects. These representations were made with the intention of inducing the Plaintiff to enter into the proposed tenancy and PW3 S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 17 has agreed to take up the unit in reliance on those representations.
section
46. The Plaintiff’s case is founded primarily upon the alleged oral representations made by the Defendants and/or their representatives, which the Plaintiff contends had induced it to enter into the tenancy agreement.
section
47. PW3, being the Managing Director of the Plaintiff, was the principal witness relied upon by the Plaintiff to establish the alleged inducement. According to PW3, D1 first approached him towards the end of 2017, which subsequently led to a meeting where Stellar Walk was presented as a highly promising and profitable Edutainment Mall.
section
48. PW3 testified that D1, D2 and Tom Tang from D3 had represented that the Plaintiff would be able to generate substantial profits by operating a Sugar Bun outlet at Stellar Walk, given the expected influx of students and visitors to the mall. The Plaintiff contends that D1, D2, D4 and D6 had presented themselves as specialised marketing agents possessing knowledge and expertise concerning the development and future prospects of Stellar Walk, thereby assuming a duty to provide accurate and reliable information. It is the Plaintiff’s case that these representations were negligently made as the Defendants had failed to ensure their accuracy.
section
49. PW3 further testified that his mother was present when D1, D2 and Tom Tang from D3 made the alleged representations which persuaded the Plaintiff to commit to taking up a rental unit at Stellar Walk. However, PW3’s mother had since passed away and was S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 therefore unable to testify before the Court. A copy of her death certificate was tendered in evidence and marked as Exhibit P5.
section
50. PW3 identified Tom Tang as a key individual who represented himself as an Assistant Director of D3 and who provided a list of 24 high-profile tenants allegedly committed to operating at Stellar Walk. PW3 acknowledged that he had conducted his own due diligence, which yielded unfavourable findings. Nevertheless, he proceeded with the tenancy after being persuaded by the assurances given by the Defendants and the reputation of Greenland as a Fortune 500 company.
section
51. Based on PW3’s evidence, the Plaintiff submits that sufficient legal proximity existed between the parties as D1, D2, D4 and D6 had held themselves out as persons with specialised knowledge concerning mall occupancy, the Edutainment concept and the potential profitability of Stellar Walk. The Plaintiff contends that by making specific assurances regarding the future success of the mall and certain infrastructure improvements, including the provision of a canopy and rectification of tile defects, the Defendants had voluntarily assumed a duty to ensure that the information provided was accurate and reliable.
section
52. The Plaintiff further submits that D1, D2, D4 and D6 were effectively acting as real estate agents and ought to be held to the standard of care expected of persons in that profession, regardless of whether they were formally licensed. The Plaintiff contends that it was reasonably foreseeable that the failure of Stellar Walk to materialise as represented would result in substantial financial losses. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 19
section
53. The Plaintiff alleges that, contrary to the representations made, Stellar Walk remained in a state of disrepair and the prospective tenants represented to be part of the mall’s tenant mix never commenced operations. Consequently, the Plaintiff claims that it suffered losses arising from its reliance on the alleged negligent misrepresentations, including renovation expenses and other costs incurred in taking up and preparing the premises for business.
section
54. D1, D2, D4 and D6 denied that they owed any duty of care to the Plaintiff. Their position may be summarised as follows:
i
(i) they were merely promotional agents or intermediaries whose role was limited to conveying information between the landlord and prospective tenants. They had no control over the maintenance of Stellar Walk, the condition of common areas, or infrastructure works such as the construction of the canopy;
subparagraph
(ii) they were not registered estate agents and did not possess any specialised professional expertise that would give rise to a professional duty of care;
subparagraph
(iii) there was no contractual relationship between them and the Plaintiff, as the LOO was entered into solely between the Plaintiff and D5; and
subparagraph
(iv) PW3 had admitted that he conducted his own due diligence and market assessment before deciding to proceed with the tenancy despite his own negative findings, thereby breaking the chain of causation and reliance. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 20
section
55. D3 denied liability primarily on the basis that Tom Tang was not its employee or authorised agent. Accordingly, D3 contended that any representations allegedly made by Tom Tang could not be attributed to D3. D3 further maintained that it was neither the landlord nor the contracting party and therefore lacked the necessary legal proximity with the Plaintiff.
section
56. D5, on the other hand, submitted that the Plaintiff’s claim for breach of duty of care was legally unsustainable for the following reasons:
i
(i) the Plaintiff had failed to plead with sufficient particularity the nature and scope of the alleged duty of care owed by D5;
subparagraph
(ii) the Agency Agreement entered into with D6 expressly prohibited the agents from making promises or misrepresentations, and any unauthorised statements made by the agents were outside the scope of their authority and could not bind D5; and
subparagraph
(iii) by accepting possession of the premises and proceeding with renovation works, the Plaintiff had affirmed the tenancy agreement and could not subsequently claim damages based on alleged pre-contractual representations.
section
57. In the present case, DW1 confirmed that discussions concerning the appointment of the leasing agent were conducted with Tom Tang from D3, who initially represented that D3 was the registered owner of Stellar Walk before subsequently informing DW1 that D5 had assumed the role of landlord. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 21
section
58. The Plaintiff’s evidence was that D1 had commenced promoting Stellar Walk to the Plaintiff as early as the end of 2017, with PW3 attending a tenant presentation in January 2018. However, the Managing and Letting Agency Agreement between D5 and D6 (the “Agency Agreement”) was only executed on 01.02.2018. Accordingly, D6 was appointed as the agent of D5 only from that date. At the time the alleged representations were made, D1, D2 and D4 did not have any written agreement with D3, D5 or D6.
section
59. Although DW1 maintained that D4 had been appointed as an agent before the execution of the Agency Agreement, the evidence showed that D1, D2 and D4 were involved in promoting Stellar Walk. The Plaintiff therefore contended that all five Defendants were collectively involved in promoting the development and had jointly made representations which induced the Plaintiff to enter into the tenancy.
section
60. DW1 acknowledged that he had provided the list of prospective tenants to PW3 but maintained that the list was accurate and genuine at the material time. He explained that, as an agent, he was unable to guarantee that every prospective tenant would eventually commence business operations. Nevertheless, he genuinely believed in the success of Stellar Walk, as evidenced by his own decision to rent two units for his music business.
section
61. D1 and D2 did not deny that representations concerning the prospective tenants were made to the Plaintiff. Instead, they sought to justify those representations by relying on several tenancy documents tendered during the trial. Although some of the documents bore only the signatures of the tenants, D1 gave evidence that several S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 22 of the named tenants had in fact commenced operations at Stellar Walk and continued operating until the date of trial in 2023. These tenants included:
i
(i) John Ang (Seafood Restaurant), which commenced operations and remained in operation at the date of trial;
subparagraph
(ii) KS Ink Studio, which remained operational during trial;
subparagraph
(iii) Infinity Optical;
subparagraph
(iv) Robomets;
v
(v) Anythink Trading;
subparagraph
(vi) Prologue Story Sdn Bhd;
subparagraph
(vii) Wellness Life Zone Sdn Bhd;
subparagraph
(viii) Asia City Dance Academy;
subparagraph
(ix) Seventh Rabbit; and
x
(x) Ultra Shine Car Wash & Service Centre.
section
62. The evidence established that the remaining tenants had commenced operations but subsequently ceased trading. This evidence contradicts PW3’s assertion that the prospective tenants represented by the Defendants never commenced operations at Stellar Walk.
section
63. Having considered the evidence, I find that the Plaintiff, through PW3, did not rely solely on the alleged representations made by the Defendants. PW3 took considerable time before deciding to enter into S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 23 the LOO, which demonstrated that he had deliberated on the commercial decision. During cross-examination, PW3 admitted that he was an experienced businessman who had conducted his own due diligence and market assessment before signing the LOO [see page 120, line 14 of the Notes of Proceedings (“NOP”]. Accordingly, I find that the Plaintiff’s decision to proceed with the tenancy was substantially based on its own commercial judgment rather than reliance upon the Defendants’ representations.
section
64. A representation is actionable only if it was false at the time it was made. The Defendants cannot be held liable merely because the anticipated future success of Stellar Walk did not ultimately materialise due to subsequent circumstances. In my view, D1, D2, D4 and D6 can only be held accountable for the accuracy and truthfulness of the representations at the time they were made. It would be unjust and unreasonable to impose upon the Defendants an obligation to ensure that such representations remained true indefinitely or perpetually where circumstances may subsequently change. This view is consistent with the decision of the Court of Appeal in Balakrishnan Devarai & Anor v Admiral Cove Development Sdn. Bhd. (supra).
section
65. The evidence adduced by D1, D2, D4 and D6 established that the representations made were true at the material time. The Defendants genuinely believed that Stellar Walk would develop into a successful Edutainment Mall with an attractive tenant mix and profitable business prospects. In support of this position, the Defendants tendered signed LOOs (Exhibits D56–D78) from various prospective S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 24 tenants, demonstrating that the list of potential tenants provided to PW3 in 2018 was not fabricated but was based on genuine commitments obtained at that time. D1 further testified that he was sufficiently confident in the project’s prospects that he personally rented two units for his own music school.
section
66. The fact that some prospective tenancies did not ultimately materialise does not, by itself, render the representations false when they were made. A representation regarding a future event is not actionable merely because subsequent events unfold differently from what was anticipated.
section
67. The Plaintiff’s complaints concerning the canopy, road conditions and leaking issues were not specifically pleaded in the Amended Statement of Claim and do not form part of the alleged negligent misrepresentations relied upon by the Plaintiff. It is trite that parties are bound by their pleadings.
section
68. Similarly, the allegation that D1, D2, D4 and D6 were operating as unlicensed real estate agents in breach of Act 242 was not pleaded in the Plaintiff’s case. This issue only arose during cross-examination of D1 and appeared to be an afterthought. Furthermore, the Plaintiff did not seek clarification from D3 or D5 regarding the licensing requirements during the proceedings.
section
69. The Defendants maintained that their roles were limited to promotional activities and marketing of the mall rather than the provision of professional estate agency services. D1 testified that his role was primarily to source commercial tenants and, based on his S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 25 understanding and legal advice received, such promotional activities did not require registration under Act 242.
section
70. I accept the Defendants’ submission that their role was limited to that of promotional agents with restricted authority. The evidence demonstrated that D1, D2, D4 and D6 had no control over the maintenance of Stellar Walk, repairs to common areas or infrastructure works such as the construction of the canopy. Their role was essentially that of intermediaries conveying information between prospective tenants and the landlord. They did not undertake functions requiring specialised professional skills associated with registered estate agency practice.
section
71. In conclusion, I find that the representations made by the Defendants were not false merely because the future success of Stellar Walk did not eventually materialise. The Plaintiff has therefore failed to prove, on a balance of probabilities, that the Defendants made actionable misrepresentations which induced the Plaintiff to enter into the tenancy agreement.
b
(b) Whether the D3 and D5 are liable for representations made by Third Party
section
72. The specific issue before this Court is whether the D3 and D5 can be held legally liable for the alleged misrepresentations made by an individual known as Tom Tang.
section
73. The Plaintiff contends that Tom Tang is not an agent of D3 but acted as a high-ranking employee holding a senior position of Commercial S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 26 Leasing Assistant Director and authorized representative for both corporate entities, inducing the Plaintiff to enter into a commercial tenancy through false promises regarding the Edutainment Mall concept and confirmed occupancy. Hence, Tom Tang has the authority and his representation can be relied upon.
section
74. PW3 unequivocally testified that Tom Tang was an agent of "Greenland" and not specifically D5.
section
75. However, D3 categorically denied that Tom Tang was ever their employee or representative. D5 described Tom Tang’s identity as a "mystery" and argued that the PW3 admitted under cross-examination that Tom Tang acted for "Greenland," not D5.
section
76. DW1 informed that they were dealing with Tom Tang who is the Commercial Leasing Assistant Director and has attended few meetings at Greenland office at 28th Floor of Menara Landmark, Johor Bahru.
section
77. A significant portion of the testimony focused on the identity and authority of Tom Tang, who signed the LOO.
section
78. The Director of the D3 initially testified that he did not know Tom Tang and that Tom Tang was never employed by the company. However, when confronted with photographs showing himself standing next to Tom Tang at official mall ceremonies, DW3 changed his testimony to say he was not sure. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 27
section
79. DW4 testifying for D5 has stated that Tom Tang was never an employee of D5. She claimed he was appointed by Greenland Tebrau Sdn Bhd (a non-party) to sign documents. The Plaintiff’s counsel highlighted that DW4 joined the company only in 2021 and thus had no personal knowledge of the events in 2018.
section
80. I find that PW3’s evidence was inconsistent. During cross examination, PW3 admitted when he referred to "Greenland," he was not referring to the D5. PW3 explicitly confirmed that Tom Tang acted for "Greenland" and not for D5.
section
81. This finding aligns with the testimony of DW4 who clarified that Tom Tang was appointed by Greenland Tebrau Sdn. Bhd. (a non-party) to sign documents and had no formal employment or agency relationship with the D5.
section
82. Without a proven agency relationship, the D3 and D5 would be considered an innocent party to the TA. Under section 180 of Act 136, a principal is only bound by an agent’s acts within their actual authority. If Tom Tang was never their agent, his representations cannot bind them.
section
83. Furthermore, the Plaintiffs failed to call Tom Tang as a witness. The Defendants urge an adverse inference ought to be inferred against the Plaintiffs as it suggests that Tom Tang’s evidence would have been detrimental or fatal to the Plaintiff’s case. This would lead this Court to doubt the Plaintiff's assertions about the exact content and weight of the Edutainment Mall promises. Pursuant to section 114(g) of Act 56, an adverse inference can be drawn against the Plaintiff as S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 28 Tom Tang’s testimony might have been unfavourable to the Plaintiff’s case.
section
84. In Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and Another Appeal [2017] MLJU 1976, the Federal Court held at paragraphs 75-76 as follows: “[75] Given the key role that Soon played in advising the board of its financial position and of the options available to resolve its cash-flow problems, we accept that the learned High Court Judge had little choice but tp draw an adverse inference against the Plaintiff as the onus of establishing plainitff’s case on conspiracy and that the cash flow problem of the plaintiff was a sham, fell upon the plaintiff. [76] The statutory basis for the drawing of an adverse inference is section 114(g) of the Evidence Act 1950 which provides that the Court may presume that the evidence which could be and is not produced would if produced be unfavourable to the person who withholds it. As such, the learned High Court judge was wholly justifies to conclude that if Soon had been called as a wtiness, his evidence would have been detrimental to the plaintiff’s case.”. [Emphasis added]
section
85. Without Tom Tang’s testimony, the Plaintiff failed to establish the very existence of the representations that form the core subject matter of the suit.
c
(c) Whether the Plaintiff has proven the quantum of damages
section
86. The Plaintiff claims special damages for renovation costs (RM393,630.06) and loss of profit for four years (RM8,447,998.00). S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 29
section
87. The Plaintiff argues that they have established their losses on a balance of probabilities, while the Defendants contend that the Plaintiff has failed the legal requirement to strictly prove special damages. Renovation and Fitting Costs
section
88. The Plaintiff has called fifteen (15) witnesses (primarily suppliers and contractors) to confirm that works were performed, equipment was supplied, and payments were received.
section
89. The Plaintiff has produced invoices and photograph of the completed renovations to substantiate the claim.
section
90. Despite significant discrepancies between the sum RM609,052.53 pleaded in the Statement of Claim and the RM393,630.06 revised figure mentioned during testimony, I find there is nothing wrong for the Plaintiff to claim a lesser sum as PW3 has explained that the claim was reduced because some invoices were lost due to business closure following the Covid-19 pandemic.
section
91. The fifteen (15) witnesses called by the Plaintiff are mostly contractors and suppliers to prove the RM8.9 million in claimed damages, but their testimony revealed significant evidentiary gaps, amongst others, are as follows:
i
(i) PW1, the electrical contractor confirmed performing work worth RM67,377.00 and testified he was paid in full. However, S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 30 under cross-examination, he admitted that the Statement of Account proving the payment was not in the court bundle;
subparagraph
(ii) PW2, the designer/consultant for the Plaintiff confirmed his work but admitted there was no document before the Court showing he received the RM17,920.00 payment. During cross-examination to clarify whether he was paid by PW3 personally or by the Plaintiff, he replied he was not sure; and
subparagraph
(iii) PW6, a representative for Jubin BMS who testified about tile supplies. He admitted that he had no personal involvement in the project and was testifying based on invoices handled by an ex-colleague. The Defendants argued his testimony was based on inadmissible hearsay.
section
92. I find that Plaintiff failed to produce receipts, bank statements, or cheque butts, or any other documentary evidence to show that payment had in fact been made. The invoices merely evidenced that the goods or services had been invoiced, they did not constitute proof of payment.
section
93. Further, 14 of the 28 suppliers (totaling RM87,035.48) where the Plaintiff failed to call the makers of the invoices to testify, rendering that evidence inadmissible hearsay. Hence, I rule that the fourteen
subsection
(14) items in the revised claim were not supported by witnesses to verify the works that had been carried out, leading to a failure of proof on a balance of probabilities. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 31
section
94. I further find that the larger claims for renovation are hampered by a lack of contemporaneous documentary proof.
section
95. Accordingly, I rule that the Plaintiff’s claim for renovation and fitting costs is dismissed. Loss of Future Income of Profit
section
96. The Plaintiff is claiming loss of profit of RM8,447,998.00 for 4 years from the Defendants (see para 75 pages 31 & 32 of the Plaintiff’s Submission). However, in the Plaintiff’s amended Statement of Claim, the Plaintiff pleaded “Kehilangan pendapatan purata sebanyak RM8,217,464.00” (see para 35 page 73 of the Bundle of Pleadings).
section
97. The law is settled that parties are bound by their respective pleadings and are not at liberty to adduce evidence or advance issues that have not been pleaded. This principle was reiterated by the Federal Court in Iktikar Ahmed Khan v Perwira Affin Bank Bhd. [2018] 1 CLJ 415.
section
98. Further, the Plaintiff’s claim was premised on a projected daily profit of RM5,786.30 calculated based on an estimated monthly revenue after deducting operational expenses namely food, labor, rent, and utilities. They maintain these figures are based on the actual income of their other outlets.
section
99. I observe that the daily profit figure pleaded in the Amended Statement of Claim (RM5,628.40) is at variance with the figure stated in PW3's witness statement (RM5,786.30). Although PW3 S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 32 subsequently sought to explain the discrepancy, the explanation given was not consistent with the Plaintiff’s pleaded case and amounted to a departure from the pleadings.
section
100. Further, I note that that the Plaintiff's shift from claiming "loss of income" to "loss of profit" in their written submissions and it is a departure from their pleadings, which is legally impermissible.
section
101. PW3 informed that the Plaintiff had never operated an outlet in Stellar Walk. As such, the projected figures were based solely on the performance of its existing outlets and not on actual business operations at Stellar Walk.
section
102. PW3 admitted he did not produce financial records or tax statements from his other Sugar Bun outlets to substantiate his projected RM500,000 monthly sales. Therefore, I find the Plaintiff has failed to produce any financial records, accounts or bank statements from their existing outlets to justify the RM500,000.00 monthly projection.
section
103. Hence, the figures provided by the Plaintiff were self-serving projections (e.g., projecting 666 customers per day) and were not supported by financial records from the Plaintiff’s other existing outlets.
section
104. Further, the Plaintiff’s claim for four (4) years’ loss also was inconsistent with the three-year term stipulated in the LOO. During re-examination, PW3 admitted that the four (4) years’ duration was S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 33 a mistake and reduced the claim to three (3) years.
section
105. I find that the claim for loss of profit is particularly problematic as it relies on projections not supported by the actual accounts of the Plaintiff's existing business operations. Consequently, any award for damages must be restricted to sums that have been strictly proven and are not speculative or remote in nature.
section
106. In the circumstances, I rule that the claim for loss of future profit is speculative and too remote. Accordingly, the claim is dismissed. Deposit paid amounted to RM 42,890.00
section
107. The Plaintiff claimed that they had paid a deposit of RM42,890.00 vide a cheque no. 097261 (P9) to D5 and this was generally undisputed and accordingly, the Plaintiff is entitled to recover the sum of RM 42,890.00.
section
108. Although the Plaintiff proved payment of the RM42,890.00 deposit, the claim for its recovery cannot succeed. The Plaintiff's case is primarily founded on negligent misrepresentation, which has not been established. While the Amended Statement of Claim contains a general allegation of breach of contract, it fails to plead any particulars of the alleged breaches. In the absence of a properly pleaded and proven contractual claim, the Plaintiff is not entitled to recover the deposit from D5. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 34 Mitigating Losses
section
109. PW3 testified that the Plaintiff was unable to remove the fixtures and fittings from the rented premises because the owners of Stellar Walk had denied them access to the unit. DW1 likewise testified that, as a tenant of another unit in Stellar Walk, he was also denied access to his premises to remove his belongings.
section
110. I am, however, unable to accept the Plaintiff's explanation for its failure to mitigate its losses. If access to the premises had indeed been denied, the Plaintiff could have taken appropriate legal action against D3 and/or D5 to secure access for the purpose of removing its fixtures, fittings, and equipment. Such steps would have enabled the Plaintiff to preserve or realise the value of those assets.
section
111. Furthermore, there is no evidence that the Plaintiff made any attempt to mitigate its losses by relocating, reusing, or selling the equipment and fittings, such as the fryers, toasters, televisions, and other movable assets, for use at its other outlets or otherwise disposing of them to recover part of its expenditure. The Plaintiff's failure to take any reasonable steps to mitigate its losses cannot be attributed to the Defendants. Any loss arising from that failure must therefore be borne by the Plaintiff itself. Franchise fees and legal costs
section
112. PW3 has testified that as the area franchise holder for Sugar Bun in Johor, the Plaintiff was required to pay an individual franchise fee for S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 35 every new outlet opened. He confirmed the payment was made from the Plaintiff's account.
section
113. PW4, the Deputy General Manager for Sugar Bun (SB Supplies & Logistics Sdn. Bhd.) (the “franchisor”) confirmed that the Plaintiff had entered into the franchise system for Stellar Walk in 2018. He confirmed under cross-examination that the terms of the franchise offer, including the required payments had been complied with. He also verified that while the money was paid, no refund has ever been requested or issued.
section
114. The Defendants contend that while a LOO for franchise (P44A) was produced the actual formal franchise agreement was not in the bundles and tendered in Court. PW3 testified he can't recall if the final agreement was signed, though he presumed he must have signed it if he paid the fee. PW4 admitted during the trial he did not have a copy of the agreement with him at the trial.
section
115. D1, D2, D4, and D6 argued that since the outlet never opened, the Plaintiff should have sought a refund of the RM20,000.00 fee from the franchisor, noting that PW4 admitted a mechanism for such refunds exists. Further, D1, D2, D4, and D6 argued they were merely marketing agents and not parties to the franchise arrangement, hence they should not be held liable for these costs.
section
116. PW4 also informed during the cross-examination that the Plaintiff can apply for relocation of the Sugar Bun outlet to a different mall or location despite the Stellar Walk outlet never opening and the S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 36 franchisor would conduct feasibility of the proposed location (see pages 409 to 411 of NOP). However, the Plaintiff had not discussed any new location for the outlet despite the fifteen (15) years active status of the franchise agreement.
section
117. PW4 also informed that at no material time did the franchisor approve or authorise the Plaintiff not to operate the said Sugar Bun outlet. The franchisor never issued any confirmation/consent for the Plaintiff not to operate this Sugar Bun outlet.
section
118. D1, D2, D4, D5 and D6’s positions are that since a mechanism for relocation or refund potentially exists within the franchise system, the Plaintiff should not be allowed to claim this sum as a permanent loss.
section
119. D5 contends that the Plaintiff's claim for renovation and incidental expenses exceeding RM600,000.00 was not supported by sufficient documentary evidence. In particular, the franchise/legal fee receipt exhibited at page 50 of Bundle C2 was the only receipt produced, whereas the remaining amounts claimed were not substantiated by objective evidence.
section
120. D3 argued that there is lack of bank statements to verify that money actually left the company’s account. D3 also argued that regardless of the quantum, they should not be held liable for these fees because they were not the landlord and had no contractual nexus with the Plaintiff or the franchisor. They maintained that any franchise-related expenses were a private commercial risk taken by the Plaintiff. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 37
section
121. I find that PW4 testified that the Plaintiff never sought a refund of the initial franchise fee amounting to RM20,000.00 from the franchisor, despite the existence of a mechanism which allowed for a potential refund. The Plaintiff also failed to take reasonable steps to mitigate its losses, whether by applying for such refund or by relocating the Sugar Bun outlet to another more suitable location.
section
122. The Plaintiff's failure to call the representative of the legal firm to testify regarding the franchise agreement and the receipt issued by the firm has adversely affected the evidential weight of the Plaintiff's claim for the franchise fee and legal costs.
section
123. It is a settled principle of law that a party claiming damages must prove the actual loss suffered and the quantum thereof. The Court cannot award damages merely on the basis of a summary or assertion of the amounts claimed, in the absence of cogent evidence supporting such claims. This principle is affirmed in Popular Industries Ltd v Eastern Garment Manufacturing Sdn. Bhd. [1989] 3 MLJ 360 and Tan Sri Khoo Teck Puat & Anor. v Plenitude Holdings Sdn. Bhd. [1994] 3 MLJ 777
section
124. Accordingly, I disallow the Plaintiff's claim for the franchise fee and legal costs.
e
(e) Whether D5 is entitled to its counter claim for arrears
section
125. D5 has filed a counter claim against the Plaintiff, seeking, among others, the following reliefs arising from a commercial tenancy at the S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 38 Stellar Walk development:
a
(a) outstanding rental of RM 72,651.60 for the period from September 2018 to October 2019, together with continuing monthly rental of RM 5,189.40;
b
(b) outstanding service charges of RM 34,980.40 for the period from September 2018 to October 2019, at RM 2,498.60 per month;
c
(c) the sum of RM462.90 for unpaid electricity and water charges; and
d
(d) liquidated damages of RM 500.00 per day for the Plaintiff’s failure to commence business operations upon the expiry of the Fit Out Period.
section
126. The issues for determination in respect of the counter claim are as follows:
i
(i) whether the LOO constituted a valid and binding agreement between the parties; and
subparagraph
(ii) whether D5 had the requisite locus standi and legal capacity to maintain the counter claim. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 39
section
127. The Plaintiff committed to a tenancy based on the following oral representations:
i
(i) PW3 signed a LOO dated 24.02.2018 for Unit RT4-GF-01, which was signed by Tom Tang for D5;
subparagraph
(ii) PW3 admitted that the Plaintiff was bound by LOO for this unit when he was cross-examined by the D5’s lawyer;
subparagraph
(iii)
preamble
pursuant to the LOO, PW3 paid a RM42,890.00 deposit to D5 on 13.03 2018. They took physical possession of the unit on 22.05.2018 and commenced renovations in May 2018 at the Defendants' insistence;
subparagraph
(iv) PW3 admitted that the tenancy never officially commenced because the mall was never ready or free of defects; and
v
(v) PW3 refused to sign the formal TA or the Directors' Guarantee because the Defendants failed to fulfill promises regarding the canopy, tile repairs, and the occupancy of other tenants and the guarantee requirement had never been previously disclosed or agreed upon; and
subparagraph
(vi) PW3 admitted that the Plaintiff has not paid any rent, service charges, or utilities since taking possession, justifying this by stating the company never received invoices and the mall was unfit for operation.
section
128. PW3 also maintained that the Defendants had failed to fulfil their representations and promises, including constructing the canopy, rectifying defects, completing repair works, and securing the S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 40 promised tenants necessary to establish Stellar Walk as an Edutainment Mall.
section
129. Although D5 subsequently offered three months' rent-free occupation conditional upon the Plaintiff commencing operations by 28.09.2018, PW3's inspections of Stellar Walk in September and October 2018 revealed that the mall remained incomplete, in need of repairs, and unsuitable for business operations.
section
130. PW3 communicated these concerns to the Defendants, requested that the rent-free period be deferred to 01.01.2019 to 31.03.2019 to allow time for repairs and tenant occupancy, and forwarded photographs of the mall's condition. However, D5 did not respond to the request, and the Defendants neither completed the promised repairs nor secured the anticipated tenants. Consequently, PW3 did not execute the TA as the Defendants have misrepresented to the Plaintiff.
section
131. The Plaintiff denies liability for rent, arguing that D5 lacked locus standi as they were not the registered owner of Stellar Walk at the material time and that the tenancy was never fully executed.
section
132. However, PW3 admitted to taking possession of the unit in May 2018 and completing renovations. By accepting possession and renovating, the Plaintiff affirmed the contract, making it binding regardless of the failure to sign the formal TA.
section
133. The Plaintiff occupied the premises for over a year without returning possession or formally terminating the tenancy. Consequently, the S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 41 D5 filed the counter claim for arrears of rent (RM5,189.40/month) and service charges (RM2,498.60/month).
section
134. Based on the evidence presented, my findings are as follows:
i
(i) Validity and binding nature of the Letter of Offer
a
(a) the Plaintiff claims that LOO is not an enforceable contract in the absence of signed TA;
b
(b) however, PW3 during cross examination unequivocally admitted that he was bound by the LOO dated 24.02.2018. He even clarified that the first version was “void” because it referred to a different unit, and he had accepted the second offer for the larger unit RT4-GF-01;
c
(c) D5 relied heavily on clause 16(f) of the Additional Conditions in the LOO, which provides as follows: “Notwithstanding the tenancy agreement has not been signed by both parties herein, all the terms and conditions of this letter shall be binding on the parties upon acceptance of this LOO.”. [Emphasis added]
d
(d) in determining whether the LOO was legally binding, I also considered the conduct of the parties, including the Plaintiff’s payment of the deposit pursuant to the terms of the second LOO, delivery of vacant possession of the shop lot which was admitted by PW3 and also extensive renovations made by the Plaintiff; and S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 42
e
(e) in the circumstances, I find that by accepting the possession of the shop lot and undertaking renovation works, these action had affirmed the contractual relationship between the parties. Accordingly, the LOO became binding regardless of the failure to sign the formal TA.
subparagraph
(ii) Locus Standi and the capacity of D5
a
(a) the Plaintiff further claims that D5 lacked locus standi to maintain his counter claim, as they had no legal capacity to act as the landlord. The Plaintiff submitted that D5 had only entered into a Sale Purchase Agreement (“SPA”) to purchase the shopping mall (Stellar Walk) from the owners on 01.03.2018. The SPA between the original owners and D5 was subsequently revoked, leaving the D5 as a stranger to the title with no standing to sue for arrears;
b
(b) the Plaintiff also submitted that no agency agreement or other documentary evidence was produced to show that D5 had been authorized to act as a landlord between 2017 and 2020; and
c
(c) in support of its counter claim, D5 relied on a table of charges prepared by a staff member. However, the maker of the document was not called to testify. Consequently, the document constituted hearsay and was therefore inadmissible.
section
135. Although I find that the LOO constituted a binding agreement between the parties, however in the absence of any evidence S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 43 establishing D5’s legal interest in the property or its authority to act as a landlord at the material time, D5 has failed to establish its legal entitlement to enforce the contractual obligations against the Plaintiff.
section
136. Accordingly, I find that notwithstanding the existence of a binding contract, D5's counter claim cannot succeed due to the absence of the requisite legal capacity to maintain the claim. Therefore, D5's counter claim is dismissed, with no order as to costs.
section
137. In determining the issue of costs, I have considered the totality of the evidence adduced before the Court. I have taken into account that the Plaintiff admitted that the LOO was binding upon it and that the Plaintiff had remained in occupation of the premises after taking possession without paying rental and service charges, thereby causing D3 and/or the relevant parties to suffer actual financial loss.
section
138. It is important to emphasise that the dismissal of D5's counter claim was solely due to the failure to adduce evidence establishing D5's legal interest in the property or its authority to act as landlord at the material time. The dismissal was not based on a finding that the contractual obligations between the parties were invalid or unenforceable. Other Issues
section
139. In the present case, I find that although D5 failed to establish that it was the landlord of Stellar Mall at the material time, the Plaintiff had S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 44 admitted the existence of a binding agreement between itself and D5. It is also not disputed by either D3 or D5 that D3 was the original landlord of Stellar Mall.
section
140. Based on the evidence adduced throughout the trial, I find that the deterioration of Stellar Mall and its eventual abandonment were primarily due to the poor condition and inadequate maintenance of the premises. The failure to properly maintain and manage the mall resulted in many tenants, including the Plaintiff, being unable to commence operations or ceasing their businesses at the premises.
section
141. I refer to an email sent by D6 to D3 dated 19.07.2018 (see page 43 of Bundle C1) recorded complaints from tenants regarding the lack of readiness of the mall, including issues such as roof leakages and the incomplete construction of the sky canopy. This is consistent with the evidence of D6, who testified that its role was merely that of an intermediary, conveying complaints from tenants concerning defects or faulty conditions at Stellar Walk to its management, namely D3 and/or D5. Furthermore, clause 4 of the Agency Agreement expressly provides that the responsibility for the maintenance and upkeep of Stellar Walk rests with the owner.
section
142. Further, the photographs at pages 45 to 46 of Bundle C1, which were sent by D1 to D3, evidenced the Plaintiff's complaints regarding the poor condition of the common areas outside the unit, including the dirty surroundings, uncleaned floor tiles, and damaged tiles allegedly caused by the construction of the fabric roof covering. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 45
section
143. In addition, the photographs submitted by the Plaintiff to D5 through its letter dated 02.11.2018 (see pages 80 to 90 of Bundle B1) demonstrated that rectification works at the area outside the unit remained outstanding before the Plaintiff could commence operation of the Sugar Bun outlet.
section
144. I find that the failure of D3 and D5 to properly maintain and manage Stellar Mall contributed to the deterioration of the mall and ultimately resulted in it becoming an abandoned commercial premises.
section
145. I further find that the defects outside the premis rented by the Plaintiff is a common area which shall be maintained by the owner of the mall, namely D5 at that material time.
section
146. Therefore, I am of the considered view that if the Plaintiff commenced an action against D3 and/or D5 for a breach of the terms of the LOO and sought damages arising from such breach, the Plaintiff may have had a sustainable claim.
section
147. However, the Plaintiff elected to pursue its claim based on negligent misrepresentation and did not plead a contractual claim founded on the alleged breach of the LOO.
section
148. It is trite that parties are bound by their pleadings and cannot depart from the case pleaded. Accordingly, as the Plaintiff's claim was not founded on breach of contract and the pleaded cause of action for negligent misrepresentation has not been established, I am constrained to dismiss the Plaintiff's claim in its entirety. S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 46 CONCLUSION
section
149. After careful consideration of the oral and documentary evidence adduced by all parties, together with the written submissions filed before this Court, I arrive at the following findings in respect of the Plaintiff's claim and D5's counter claim:
a
(a) the Plaintiff has failed to establish any actionable misrepresentation. The failure of tenants who had entered into the LOO and TA to commence or continue their businesses was a result of an unsuccessful business venture rather than any fraudulent or negligent act on the part of the Defendants;
b
(b) the Plaintiff's decision to enter into the LOO was made based on its own business judgment after due consideration, rather than solely in reliance on the representations allegedly made by the Defendants;
c
(c) an adverse inference under section 114(g) of Act 56 ought to be drawn against the Plaintiff for its failure to call Tom Tang as a witness. As Tom Tang was the material person alleged to have made the representations relied upon by the Plaintiff, the burden was on the Plaintiff to call him to substantiate and prove the alleged representations; and S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 47
d
(d) in relation to D5's counter claim, D5 has failed to establish its legal capacity or interest as the landlord of the premises at the material time.
section
150. Accordingly, I dismiss the Plaintiff's claim against all Defendants with costs of RM10,000.00 payable to each Defendant, subject to allocator fees. The said costs are to be paid by the Plaintiff within fourteen (14) days from the date of this Order. D5's counter claim against the Plaintiff is dismissed, with no order as to costs. Dated 23 July 2026. Signed by: Sgd. ………………….. Wong Mee Ling Judge High Court of Malaya Johor Bahru Johor Darul Ta’zim. Counsel/Solicitor for the Plaintiff: Dato’ Kuthubul Zaman and Ms. Anis Zaman Messrs. Syarizad, Zaman & Seah Counsel/Solicitor for the First, : Mr. Koh Yew Chong, Mr. Justin Leong Second, Fourth and Sixth and Mr. Izzat Zainal Defendants Messrs Lee & Koh Counsel/Solicitor for the Third : Mr. H. C. Foo Defendant Messrs Low & Partners S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal 48 Counsel/Solicitor for the Fifth : Mr. K. S. Lim Defendant Messrs S.K Song S/N Ho059c4qtkivd7XE6IItA **Note : Serial number will be used to verify the originality of this document via eFILING portal
Wrong text, a broken link, out-of-date content, or a removal request — tell us and we'll check it against the official source.