Guna Selvi Metal (M) Sdn. Bhd. v 1. ) Facilipack Industries Sdn. Bhd. (dalam Likudasi) (BA-22NCvC-23-01/2022)

FACILIPACK INDUSTRIES SDN BHD (No. Syarikat: 937749-A) (Dalam Likuidasi) (Jabatan Insolvensi Malaysia, Pejabat Negeri Pulau Pinang Bertindak sebagai Pelikuidasi bagi

HENG JI KENG (No. K/P: 471010-01-5435) (Dari Ferrier Hodgson MH Sdn Bhd [459993-W] bertindak sebagai Penerima dan Pengurus bagi harta FACILIPACK INDUSTRIES SDN BHD mengikut kuasa dalam Perjanjian Debentur bertarikh 23-12-2013; Perjanjian Debentur Tambahan bertarikh 22-12-2016; dan Perjanjian Debentur Spesifik bertarikh 22-12-2016)

ANDREW HENG (No. K/P: 750225-71-5051) (Dari Ferrier Hodgson MH Sdn Bhd [459993-W] bertindak sebagai Penerima dan Pengurus bagi harta FACILIPACK INDUSTRIES SDN BHD mengikut kuasa dalam Perjanjian Debentur bertarikh 23-12-2013; Perjanjian Debentur Tambahan bertarikh 22-12-2016; dan 18/10/2023 21:38:13 BA-22NCvC-23-01/2022 Kand. 61 S/N CiJtbnVQhk641PA5/hofvg Perjanjian Debentur Spesifik bertarikh 22-12-2016) − DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] The Plaintiff’s claims against the Defendants are for the return of the earnest deposit in the sum of RM90,000.00 made by the Plaintiff that had been forfeited by the Second and Third Defendants and other reliefs. The trials are held on 18 & 19 January 2023. [2] The Second and Third Defendants’ counterclaim against the Plaintiff is that the Second and Third Defendants are entitled to forfeit the earnest deposit and to terminate the contract. [3] On 16-3-2023, I allowed the Plaintiff’s claims with costs (subject to allocator fee) and dismissed the counterclaim. [4] The Second and Third Defendants appeal to the Court of Appeal. [5] In fact, the Second and Third Defendants have yet to file the notice of appeal. Based on the letter dated 27-7-2023 to this Court, the learned counsel of the Second and Third Defendants stated – “3. Kami ingin memaklumkan kepada pihak Mahkamah Yang Mulia ini bahawa pihak kami telah memfailkan Notis Usul bagi Kebenaran untuk Merayu kepada Mahkamah rayuan S/N CiJtbnVQhk641PA5/hofvg pada 14-4-2023 melalui Mahkamah Rayuan, Permohonan Sivil No.: B-08-96-04/2023 (“Usul Kebenaran Merayu”).

Usul Kebenaran Merayu tersebut juga telah ditetapkan untuk Pendengaran pada 27-7-2023 tetapi telah ditangguhkan oleh kerana pihak kami masih belum dibekalkan dengan Alasan Penghakiman daripada Mahkamah Yang Mulia ini.

Dalam hal ini, Mahkamah Rayuan telah menetapkan suatu tarikh baru untuk Pengurusan Kes pada 4-10-2023 dan pendengaran pada 18-10-2023.”. [6] Hence, the grounds of judgment is ready for the Second and Third Defendants. Background facts [7] The Plaintiff is a company incorporated in Malaysia under the Companies Act 1965. The nature of business is business in all kinds of scrap metal (see page 1 of the Common Bundle/B). [8] The First Defendant is Facilipack Industries Sdn Bhd that has been wound up by the High Court at Georgetown, Penang on 11-12-2019. [9] On 22-3-2021, the High Court at Georgetown, Penang has allowed the Plaintiff take the legal action against the First Defendant and/or Jabatan Insolvensi Malaysia, Cawangan Pulau Pinang as the liquidator for the First Defendant. S/N CiJtbnVQhk641PA5/hofvg [10] The Plaintiff has obtained an Order and filed in Default of Defence against the First Defendant dated 21-4-2022. [11] In the statement of claim, the Plaintiff describe the Second and Third Defendants as follows: “(ii) Defendan Kedua dan Ketiga dilantik sebagai Penerima dan Pengurus

4.

Plaintif memplidkan bahawa melalui Perlantikan tersebut, Defendan Kedua dan Defendan Ketiga merupakan agen kepada Defendan Pertama maka Defendan Pertama dan/atau Defendan Kedua dan/atau Defendan Ketiga bertanggungjawab dan/atau bertanggungan ke atas kesemua tindakan terhadap satu sama lain di bawah prinsip “Principal and Agent”.”. S/N CiJtbnVQhk641PA5/hofvg [12] Meanwhile, in the Second and Third Defendants’ written submission, the Second and Third Defendants are described as follows: “18. The 2nd Defendant who is Heng Ji Keng (NRIC No.: 471010- 01-5435) and the 3rd Defendant who is Andrew Heng (NRIC No.: 750225-71-5051) are Malaysian Citizens and the directors of the company Ferrier Hodgson MH Sdn Bhd (Company No.: 459793-W) … .”.

Based on the Debenture Agreement dated 23-12-2013, Supplementary Debenture Agreement dated 22-12-2016 dan Specific Debenture Agreement dated 22-12-2016, Export-Import Bank of Malaysia Berhad (No.: 357198-K) had appointed the 2nd and 3rd Defendants jointly and severally as the Receivers and Managers of the 1st Defendant.”. [13] The Plaintiff take the legal action against the First Defendant based on the assets of the First Defendant being the machineries, motor vehicles, office furniture and fittings, raw material and others (after this are refer to as “the Assets”). [14] As the Receivers and Managers of the First Defendant, the Second and Third Defendants were in charge of selling the Assets and the tenders are called and the Second and Third Defendants received tenders from various interested parties including the Plaintiff. [15] On 11-11-2019, the Plaintiff had offered to purchase the Assets for the sum of RM1,500,000.00 from the Second and Third Defendants. The Plaintiff had also paid the 5% earnest deposit in the sum of RM75,000.00. S/N CiJtbnVQhk641PA5/hofvg [16] Four days later, on 15-11-2019, the Second and Third Defendants had issued a letter to the Plaintiff to revise the price. [17] Thereafter, the Plaintiff vide a letter dated 19-11-2019 had revised the price and the new price is offered in the sum of RM1,800,000.00. On 20-11-2019, the Plaintiff had also paid another RM15,000.00 for the differential balance of the earnest deposit. [18] The total 5% earnest deposit in the sum of RM90,000.00 was paid by the Plaintiff into the First Defendant account. [19] On 4-12-2019, the Second and Third Defendants had accepted the revised/new price and then issued a Letter of Offer and Acceptance and the balance of the purchase price is in the sum of RM1,710,000.00 and is to be paid by 6-12-2019. [20] In the process of payment for the balance of the purchase price, that is on 5-12-2019, the Second and Third Defendants’ representatives together with the Plaintiff’s representative (Saravanan and Dinesh) had viewed and inspected the Assets. [21] The Plaintiff had issued a letter dated 5-12-2019 to the Second and Third Defendants notifying them that the Plaintiff can only settle the balance of the purchase price is in the sum of RM1,710,000.00 by 11-12-

S/N CiJtbnVQhk641PA5/hofvg [22] The Second and Third Defendants had waited until 24-12-2019 for the payment of the balance of the purchase price is in the sum of RM1,710,000.00, however the Plaintiff has failed to pay. The Second and Third Defendants then had issued a letter of termination dated 24-12-2019 to the Plaintiff and informed the Plaintiff that the deposit of RM90,000.00 is forfeited due to the non-compliance with the terms of the Letter of Offer and Acceptance. The Issues to be tried [23] The issues to be tried as in Bundle C read −

whether the terms stated in the Letter of Offer and Acceptance according to the Information Memorandum dated 11-10-2019 have been agreed, finalized and binding on both parties?

whether the Second Defendant and/or Third Defendant are entitled to forfeit the entire deposit paid by the Plaintiff amounting to RM90,000.00?

whether the Plaintiff is entitled to the claims prayed for in paragraph 38 of the statement of claim dated 14-1-2022?

whether the Second and Third Defendants are entitled to the counterclaims prayed for in paragraph 27 of the Defence and Counterclaim dated 13-4-2022? S/N CiJtbnVQhk641PA5/hofvg [24] In the trial, the sole witness for the Plaintiff is Vikneswary a/p M Balan, the director of the Plaintiff (see page 3 of the Common Bundle/B). Vikneswary a/p M Balan is the widow of Saravanan a/l Raja (former director of Plaintiff). The sole witness for the Second and Third Defendants is Julian Ng Ju Lian. The decision [25] On 16-3-2023, my decision via eReview as to 4 issues are as follows: No.: Issues: The decision:

1.

whether the terms stated in the Letter of Offer and Acceptance according to the Information Memorandum dated 11-10-2019 have been agreed, finalized and binding on both parties? No 2.

whether the Second Defendant and/or Third Defendant are entitled to forfeit the entire deposit paid by the Plaintiff amounting to RM90,000.00? No S/N CiJtbnVQhk641PA5/hofvg No.: Issues: The decision:

3.

whether the Plaintiff is entitled to the claims prayed for in paragraph 38 of the statement of claim dated 14- 1-2022? Dismiss (Ganti rugi Teladan; Ganti rugi Am untuk ditaksirkan; & alternatif relief)

4.

whether the Second and Third Defendants are entitled to the counterclaims prayed for in paragraph 27 of the Defence and Counterclaim dated 13-4- 2022? Dismiss [26] The judgment is as follows: “KEPUTUSAN BICARA PENUH [1] Tuntutan Plaintif (Plf) terhadap Defendan-Defendan ialah untuk mendapatkan semula jumlah deposit sebanyak RM90,000.00 sahaja yang dibayar oleh Plaintif kepada Defendan Pertama (D1) bagi pembelian aset milik D1 yang terdiri daripada machineries, motor vehicles, office furniture, fittings dan aset lain (selepas ini disebut “Aset tersebut”) secara lelongan. S/N CiJtbnVQhk641PA5/hofvg [2] Pembelian Aset tersebut ialah melalui tender di mana Plaintif memplidkan terdapat tender asal dan tender baharu. [3] Plaintif telah menerima Surat Tawaran dan Penerimaan daripada Ferrier Hodgson MH Sdn Bhd dan terdapat terma mengenai “as is where is” basis. [4] Plaintif memplidkan bahawa hasil pemeriksaan Plaintif terdapat perbezaan pada maklumat Aset tersebut dan Plaintif menghendaki Defendan Kedua (D2) dan Defendan Ketiga (D3) menjelaskan mengenai perkara ini agar pemuktamadan terma dalam Surat Tawaran dan Penerimaan dapat dilaksanakan. [5] Plaintif memplidkan bahawa Defendan-Defendan telah gagal, ingkar, cuai dan/atau enggan memberikan penjelasan kepada Plaintif berkenaan dengan Aset tersebut dan dengan itu Plaintif tidak menandatangani Surat Tawaran dan Penerimaan. [6] Tindakan D2 dan D3 yang mengeluarkan surat penamatan tawaran dan pelucuthakan jumlah deposit sebanyak RM90,000.00 menjadi punca pemfailan tuntutan ini terhadap Defendan-Defendan. [7] Dalam pembelaan, Defendan-Defendan menafikan tuntutan Plaintif dan Defendan-Defendan menuntut balas untuk melucut hak “earnest deposit”, ganti rugi am dan kos. S/N CiJtbnVQhk641PA5/hofvg Analisa Keterangan Lisan dan Dokumentar selepas Bicara Penuh & dapatan Mahkamah [8] Dalam perbicaraan, Mahkamah ini telah mendengar keterangan saksi-saksi Plaintif dan Defendan-Defendan. [9] Keterangan satu-satunya saksi Plaintif iaitu pengarah Plaintif di mana pengarah Plaintif terdahulu yang juga mendiang suami Saksi Plaintif adalah jelas mengenai kemungkiran oleh Defendan-Defendan. Berdasarkan dokumen yang dikemukakan di hadapan Mahkamah ini jelas menunjukkan bahawa jumlah deposit RM90,000.00 itu tidak berhak dilucuthakan oleh D1 dan/atau D2 dan/atau D3. [10] Mahkamah dengan ini membenarkan tuntutan Plaintif seperti berikut: a) deklarasi bahawa D1 dan/atau D2 dan/atau D3 tidak berhak untuk melucuthakan jumlah deposit sebanyak RM90,000.00 sahaja yang dibayar oleh Plaintif. b) D1 dan/atau D2 dan/atau D3 secara bersesama memulangkan jumlah deposit sebanyak RM90,000.00 sahaja kepada Plaintif dalam masa 30 hari dari tarikh penghakiman ini. S/N CiJtbnVQhk641PA5/hofvg c) faedah sebanyak 5% setahun ke atas jumlah RM90,000.00 dari tarikh pemfailan writ saman sehingga tarikh penyelesaian penuh. d) kos sebanyak RM15,000.00 (tertakluk kepada fi alokatur) dibayar oleh D1 dan/atau D2 dan/atau D3 secara bersesama kepada Plaintif. [11] Bagi tuntutan balas pula, Mahkamah mendapati Defendan-Defendan gagal membuktikan tuntutan balas dan dengan itu tuntutan balas ini ditolak.”. [27] The Second and Third Defendants dissatisfied with the judgment appeal. Findings of The Court [28] The learned counsel for Second and Third Defendants denied that Vikneswary a/p M Balan is the manager of the Plaintiff’s company since 2012. [29] As submit by the learned counsel for the Plaintiff in its written submission after the full trial, that upon the death of Vikneswary a/p M Balan’s husband (Mr Saravanan, the sole director of the Plaintiff), Vikneswary a/p M Balan was the practising director cums manager of the Plaintiff’s company. Upon the issuance of the letter of administration, Vikneswary a/p M Balan was appointed as the new director of the Plaintiff’s company until now. Vikneswary a/p M Balan is involved in the sale and purchase of the Assets and she has personal knowledge of the S/N CiJtbnVQhk641PA5/hofvg facts and also access to the necessary documents/records pertaining to this suit. [30] This Court disagree with the learned counsel for the Second and Third Defendants pertaining to the credibility of Vikneswary a/p M Balan. Vikneswary a/p M Balan has testified that the business of Plaintiff is a family business and Vikneswary a/p M Balan is helping her late husband in the business. Vikneswary a/p M Balan’s late husband is the sole shareholder of the Plaintiff. [31] The date of appointment of Vikneswary a/p M Balan as the director of the Plaintiff is on 8-2-2022 that is less than a month after the Plaintiff filed its writs of summon and statement of claim (dated 14-1-2022). [32] The learned counsel for the Second and Third Defendants had disputed and denied that Vikneswary a/p M Balan as the director of the Plaintiff. The reason is because she was never involved in the sale and purchase of the Assets nor was she dealing and/or in communication with the Second and Third Defendants and/or their representatives. [33] The arguments by the learned counsel for the Second and Third Defendants are unjustifiable. Eventhough Vikneswary a/p M Balan is the sole witness for the Plaintiff and she firmly wants the return of RM90,000.00 from the Second and Third Defendants. The sum claims is based on the amount that was clearly paid by the Plaintiff (by her late husband) into the First Defendant’s account. The documents produced by the Plaintiff through Vikneswary a/p M Balan are the proof of the payments. S/N CiJtbnVQhk641PA5/hofvg [34] Since the Plaintiff has failed to buy/purchase the Assets and the Assets already sold to the other third party, therefore the sum of RM90,000.00 can be forfeited by the Second and Third Defendants? This Court disagree. [35] The learned counsel for the Plaintiff also dispute and object to the Second and Third Defendants’ sole witness that is Julian Ng as Julian Ng is just a representative for the Second and Third Defendants (Receivers & Managers). Julian Ng is not the appointed Receivers & Managers. The Second and Third Defendant are not called as the Defendants’ witnesses. [36] Julian Ng as the sole witness for the Second and Third Defendants (Receivers & Managers) has testified pertaining to his knowledge of the communications and negotiations with regards to the sale and purchase of the Assets.

whether the terms stated in the Letter of Offer and Acceptance according to the Information Memorandum dated 11-10-2019 have been agreed, finalized and binding on both parties? Ferrier Hodgson MH Sdn Bhd’s Letter dated 4-12-2019: [37] The main and key document that rely by the Second and Third Defendants is a letter title (refer to Common Bundle/B at pages 49 to 53) – “FACILIPACK INDUSTRIES SDN BHD (Receivers and Managers Appointed) (Company No. 937749-A) (“the Company”) S/N CiJtbnVQhk641PA5/hofvg Assets of the Company (“the Company’s Assets”) located at Solok Sultan Hishamuddin 1, kawasan Perindustrian Selat Klang Utara, 42000 Pelabuhan Klang, Selangor (“the Business Premise”) – Letter of Offer and Acceptance for the Company’s Assets as per the Information Memorandum dated 11 October 2019”. [38] The details about this Letter are –

was signed by the Third Defendant and one Patrick McPhee, for and on behalf of the Second Defendant.

the terms and conditions that are stipulated in the Second and Third Defendants’ letter dated 4-12-2019 are – • Purchaser: Guna Selvi (M) Sdn Bhd. • Purchase Price: RM1,800,000.00 only. • The Assets: Machineries, Motor Vehicles, Office Furniture and fittings, raw materials and other assets. • Location of the Assets: at a third party premise belonging to Majestic Mint (M) Sdn Bhd (“the Landlord”), bearing address Solok Sultan Hishamuddin 1, Kawasan Perindustrian Selat Kelang Utara, 42000 Pelabuhan Klang, Selangor (“the Business Premise”). • Payment Terms of the Purchase Price: The Purchaser is required to provide its acceptance to this Letterr of offer and Acceptance dated 4-12-2019 (“LO”) with the Company for the purchase of the Company’s Assets within two (2) days from the date of LO together with the balance of the offer price amounting to RM1,710,000.00 S/N CiJtbnVQhk641PA5/hofvg in addition to the initial five percent (5%) of the earnest deposit, and will be classified as the full payment amounting to 100% of the offer price. Failure to adhere to this timeframe will result in the forfeiture of the earnest deposit paid.

in the last 2 paragraphs of this Letter stated as follows: “Kindly signify your acceptance of the above terms and conditions by signing on the duplicate of this letter and returning the same to us by 5 December 2019; failing which the offer to acquire the Company Assets shall be deemed to have lapsed. Should you have any queries, please do not hesitate to contact Mr Kumar Jai, Mr Julian Ng, Mr Hairul Azli, Mr Aaron Ching or Mr Tan Po How of this office.”.

the ACCEPTANCE AND CONFIRMATION form is at page 53 and is left blank and unsign.

paragraph 3 of this Letter stated that “Please note the enforceability of the Letter of Offer and Acceptance is subject to the terms and conditions of the Information Memorandum dated 11-10-2019”. S/N CiJtbnVQhk641PA5/hofvg The Information Memorandum FACILIPACK INDUSTRIES SDN BHD (Receivers and Managers Appointed) (Company No. 937749-A) dated 11- 10-2019 [Exhibit D3/Common Bundle-B, at pages 150 to 171]: [39] Exhibit D3 contains the following s terms and conditions: • Section 1.0: Introduction to Information Memorandum • Section 2.0: Purpose and Disclaimer • Section 3.0: Background Information • Section 4.0: Description of the Company’s Assets 4.1 Details of the Company’s Assets 4.1.1 Machineries 4.1.2 Motor Vehicles 4.1.3 Office Furniture and Fittings 4.1.4 Others • Section 5.0: Conditions of Sale • Section 6.0: Mode of Offer and Closing Date • Section 7.0: Contacts • Section 8.0: Offer Form [40] The details about this Information Memorandum (“IM”) are, among others, –

Section 1.0: Introduction to Information Memorandum: • signed by one Patrick McPhee and Lim Litt. • tells about the Second and Third Defendants as the appointed Receivers and Managers of the First Defendant. S/N CiJtbnVQhk641PA5/hofvg • IM is to set out information pertaining to the Company’s Assets. • constained the T&C including the cancellation or suspension of the offers. • although this IM contains information regarding the Company, all intending bidders are hereby put on notice that the R&M are only empowered to sell the Company’s Assets.

Section 2.0: Purpose and Disclaimer • the information shall not be a comprehensive description of the Company or the Company’s Assets. • IM is prepared to assist interested parties in the evaluation of a decision to purchase the Company’s Assets in line with the Expression of Interest (“EOI”) advertisement on an “as is where is” basis.

Section 3.0: Background Information • the Company is principally engaged in manufacturing of plastic disposable food packaging where it the acquired Greatpac Sdn Bhd’s business from Wawasan TKH Holding Bhd on 7th October 2014. • Receivers & Managers understand that the Company has ceased operation since January 2019 and all the Company’s Assets are located in a third party premise which is at Lot 1, Solok Sultan Hishamuddin 1, Kawasan Perindustrian Selat Kelang Utara, 42000 Pelabuhan Klang, Selangor (“Business Premise”). S/N CiJtbnVQhk641PA5/hofvg • Receivers & Managers intend to conduct an EOI exercise to dispose the Company’s Assets on an “as is where is” basis.

Section 4.0: Description of the Company’s Assets • Section 4.0 describe the details of the Company’s Assets. • at paragraph 4.1 it is stated “Kindly be advised that any interested offeror(s) shall conduct their own inspection to ascertain and also determine conditions of the assets.”.

Section 5.0: Conditions of Sale • the salient terms and conditions, among others, are – ➢ the sale is on an “as is where is” basis, whereby the offeror shall be deemed to have made its own necessary inquiries, investigations and due diligence on the Company’s Assets available for sale. ➢ at paragraph 5.12, the payment terms, subject to revision at the absolute discretion of the R&Ms, shall be as follows: − All offers must be accompanied by an earnest deposit of 5% of the offer price to be paid − Upon execution of the LO, balance of the offer price is to be paid in full in addition to the initial 5% of the earnest deposit, and it will be classified as the full payment amounting to 100% of the offer price.

Section 6.0: Mode of Offer and Closing Date • All offers are to be submitted in writing in the prescribed Offer Form provided in Section 8.0 of this IM ... and must reach the R&Ms at the latest by 5.00 p.m. on 11 November 2019 unless extended in writing by the R&Ms. • The earnest money is refundable free of interest to the unsuccessful offerors. If any offeror withdraws its offer for any reason whatsoever before the closing date, the earnest deposit received shall be forfeited by the R&Ms absolutely.

Section 7.0: Contacts • All interested parties may contact Mr Kumar Jai, Mr Julian Ng, Mr Hairul Azli, Mr Aaron Ching or Mr Tan Po How of FHMH for further details and/or to make arrangements to inspect the Company’s Assets ... .”.

Section 8.0: Offer Form • The Offer Form. The chronology after Ferrier Hodgson MH Sdn Bhd’s Letter dated 4-12- 2019 and IM dated 11-10-2019: [41] The documents that are produced during the trials speak about the chronology to the forfeiture of the earnest deposit in the sum of RM90,000.00, namely – S/N CiJtbnVQhk641PA5/hofvg Documents: Dates: Contents: Letter from the Second and Third Defendants to the Plaintiff 24-12-2019 • Plaintiff has failed to comply/breach to the terms and conditions of the sale in respect of the Company’s Assets. • Plaintiff had failed or refused to sign the LO and deliver to the R&Ms the duly executed LO together with the further full payment of the balance offer price, within the deadline set in the LO. • The R&Ms are entitled to terminate the offer and shall proceed to forfeit the initial 5% of the earnest deposit amounting to RM90,000.00 paid by the Plaintiff in respect of the Company’s Assets. Letter from the former counsel of the Plaintiff 26-12-2019 • Plaintiff request for the Certificates of Machines as listed under item 4.1.1 (No. 1 until No. 94) of the Second & Third Defendants’ Letter dated 4-12-

S/N CiJtbnVQhk641PA5/hofvg Documents: Dates: Contents: • Plaintiff had informed the Second & Third Defendant that the balance of purchase price of 95% amounting to RM1,710,000.00 shall only be settled subject to the Second & Third Defendants’ approval of inspection of the Machineries and the Plaintiff estimated time frame of settlement is on or before 10 January 2020. Letter from the former counsel of the Plaintiff 8-1-2020 • a reply Letter to the Second & Third Defendants’ Letter dated 24-12-2019. • Plaintiff’s counsel asked the Second & Third Defendants about the termination of which Contract and forfeited of the earnest deposit. • Plaintiff’s counsel asked for a copy of the binding contract to be given to the Plaintiff’s counsel. S/N CiJtbnVQhk641PA5/hofvg Documents: Dates: Contents: Letter from the Second and Third Defendants’ counsel 24-1-2020 • the Second and Third Defendants refer to the LO dated 4-12-2019. • the Plaintiff has inspected the Company’s Assets several times between 4-12-2019 and 16-12-2019. Therefore, the Plaintiff has accepted the offer by conduct. • the Plaintiff has been given 14 days to fulfill the terms of the Letter but Plaintiff had failed to do so. Therefore, the Second and Third Defendants had forfeited the contract. • the Second and Third Defendants reserves their rights to pursue a claim against the Plaintiff in view of the delay as the Landlord has now threatened to initiate proceedings against the Second and Third Defendants for late delivery of vacant possession. In view S/N CiJtbnVQhk641PA5/hofvg Documents: Dates: Contents: of that, the Second and Third Defendants will hold the Plaintiff liable for any loss suffered due to the delay caused by the Plaintiff. Letter from the former counsel of the Plaintiff 14-3-2020 • Plaintiff had informed the Second and Third Defendants’ counsel that during the joint inspection over the Company’s Assets, the Plaintiff has discovered discrepancies between the details stated in the “Descriptions of the Company’s Assets” with the actual Assets located at the Business Premise. • the Plaintiff required clarification from the Second and Third Defendants on the discrepancies and further demanded the Second and Third Defendants to furnish proof of the ownership of the S/N CiJtbnVQhk641PA5/hofvg Documents: Dates: Contents: Company’s Assets. • the action by the Second and Third Defendants in forfeiting the deposit is unlawful and tantamount to unlawful enrichment. • Plaintiff demand from the Second and Third Defendants to refund the RM90,000.00 or failing which, the Plaintiff shall proceed legal action against the Second and Third Defendants. Letter from the Second and Third Defendants’ counsel 11-6-2020 • the Second and Third Defendants informed the Plaintiff that they do not have the Certificate of Machines and that all Machines were purchased on an “as is where is” basis. • the position taken by the Second and Third Defendants is that the Plaintiff had failed to fulfill the S/N CiJtbnVQhk641PA5/hofvg Documents: Dates: Contents: terms of the LO dated 4-12-2019 and therefore, the Second and Third Defendants are entitled to forfeit the deposit in the sum of RM90,000.00 and terminated the contract. [42] Exhibit No. IDD-4 in the Common Bundle/B at pages 179 to 180 is refer and produce during the trial. Exhibit No. IDD-4 is the Offer Form signed on 11-11-2019 by the late Saravanan A/L Raja with the Offer Price in the sum of RM1.5 million. At page 181, the Maybank Cheque dated 11- 11-2019 is in the name of the First Defendant (R&Ms Appointed) in the sum of RM75,000.00 was paid by the Plaintiff. [43] On 15-11-2019, the R&Ms sent a letter to the Plaintiff (refer to in the Common Bundle/B at pages 183) to inform the Plaintiff about the Second close tender exercise and askingthe Plaintiff to revise the offer price by completing the Offer Form in the IM. [44] On 19-11-2019, the late Saravanan A/L Raja, director of the Plaintiff sent a letter to the R&Ms (refer to in the Common Bundle/B at pages 185 to 186) stated that the Plaintiff had revised the offer price from RM1.5 million to RM1.8 million and together with the letter, the Plaintiff attached the differential payment of 5% earnest deposit amounting to RM15,000.00. So total of the earnest deposit that had been paid by the Plaintiff to the R&Ms is RM90,000.00. S/N CiJtbnVQhk641PA5/hofvg [45] The learned counsel for the Second and Third Defendants submit that there is a legally binding contract between the parties vide the LO; payment of the earnest deposit in the sum of RM90,000.00; Plaintiff had requested for extension of time to pay the balance of the purchase price (RM1,710,000.00); and Plaintiff had showed interest and/or intended to purchase the Assets, are the proof of the existence of active steps taken by the Plaintiff to proceed with the purchase. [46] The case of Usahawan Bersama Teknik Sdn Bhd v. Hyperwave Systems Engineering Sdn Bhd [2021] MLJU 3076 cited by the learned counsel for the Second and Third Defendants, where the High Court held − “[39] It is settled law that the act of acceptance may be either in words or by conduct, or it may be partly by words or partly by conduct ... and Chitty on Contracts, 31st Edition 92012), Vo. 1, paras 2-002, 2-003, and 2-09).”. [47] From the chronology of events and the documents that had been evaluated by this Court, this Court agrees with the learned counsel of the Second and Third Defendants’ submission. The Plaintiff is serious to buy/purchase the Assets, the payments of RM90,000.00 showed that the Plaintiff as the successful bidder had offered to pay the purchase price of RM1,800,000.00 into the First Defendant’s account. S/N CiJtbnVQhk641PA5/hofvg [48] However, the findings of the Court are –

failure of the Plaintiff to fulfil the terms in the LO and the IM pertaining to the deadline of the full payment is not totally at the Plaintiff’s fault.

the Second and Third Defendants had allowed the Plaintiff to inspect the Assets and the Plaintiff had inspected the Assets.

as a result of the inspections, the Plaintiff had found the discrepancies in the serial number of the machines with the details as provided by the Second and Third Defendants (R&Ms).

The Plaintiff had demanded for clarification and/or answers from the Second and Third Defendants (R&Ms) about the discrepancies but the only reply the Second and Third Defendants (R&Ms) are − “The Second and Third Defendants informed the Plaintiff that they do not have the Certificate of Machines and that all Machines were purchased on an “as is where is” basis. The position taken by the Second and Third Defendants is that the Plaintiff had failed to fulfill the terms of the LO dated 4-12-2019 and therefore, the Second and Third Defendants are entitled to forfeit the deposit in the sum of RM90,000.00 and S/N CiJtbnVQhk641PA5/hofvg terminated the contract.”.

the terms that is take it “as is where is basis” should be arbitrarily used by the Second and Third Defendants (R&Ms) against the Plaintiff.

as the nature of the Plaintiff’s business is business in all kinds of scrap metal, the terms “as is where is basis” must be read together with the other evidence that big amount of money is to be paid by the Plaintiff and also the issue on the ownership of the Assets are the material facts to be determined. • as provided in Section 5.0: Conditions of Sale: the salient terms and conditions, among others, are – ➢ the sale is on an “as is where is” basis, whereby the offeror shall be deemed to have made its own necessary inquiries, investigations and due diligence on the Company’s Assets available for sale.

the Plaintiff has made its own necessary inquiries, investigations and due diligence on the Company’s Assets as allowed/permitted by the Second and Third Defendants and in consequence to that, the Second and Third Defendants must provide the Plaintiff with a cogent answer pertaining to the discrepancies and not just said “The Second and Third Defendants informed the Plaintiff that they do not have the Certificate of Machines and that all Machines were purchased S/N CiJtbnVQhk641PA5/hofvg on an “as is where is” basis.”. [49] In order to forfeit the earnest deposit in the sum of RM90,000.00 the Second and Third Defendants should not firmly repeated that all terms and conditions are clearly stated in the IM as well as the LO. The failure to pay the balance of full amount of the purchase price should not be taken literally that the Plaintiff did not comply with the terms of the Letter of Offer. This Court had analyze the circumstances that lead to the forfeiting of the earnest deposit and decides that the Second and Third Defendants must refund the sum of RM90,000.00 only to the Plaintiff. [50] Interestingly, the learned counsel for the Second and Third Defendants reply to the Plaintiff’s written submission submit as follows: “In reply to paragraphs 27 and 28 ..., the 2nd and 3rd Defendants are not obliged to inform the Plaintiff of the sale of the Assets to any third party upon the termination. Further, at all material times, the Plaintiff failed to prove loss of profit and/or any losses incurred due to the termination of the offer and/or the Total Deposit being forfeited ... ”. [51] This Court finds that the Plaintiff also did not concern who is the new buyer/purchaser of the Assets, but this legal action filed by the Plaintiff is to get back the earnest deposit in the sum of RM90,000.00. The payment of RM90,000.00 is not at all been disputed, therefore the argument raised by the learned counsel for the Second and Third Defendants that “the Plaintiff failed to prove loss of profit and/or any losses incurred due to the termination of the offer and/or the Total Deposit being forfeited” is totally misconceived. S/N CiJtbnVQhk641PA5/hofvg [52] The learned counsel for the Plaintiff submits – “[21](e) The vital point of the case is that the Court delivered justice to the Plaintiff/ Respondent and ordered the Defendant/ Appellant to refund/ return the payment made by the Plaintiff/ Respondent. In our case, the plaintiff also had made the deposit but could not go further on the 2nd and 3rd Defendants’ failure. Besides, the assets were sold to a third party. Thus, it will be must proper to refund the Plaintiff’s deposit.”. [53] The earnest deposit of RM90,000.00 by the Second and Third Defendants is a loss suffered by the Plaintiff. The Plaintiff received nothing for the amount where this Court is of the view that this amount is a big sum of money to the Plaintiff where the late Saravanan A/L Raja is the sole shareholder of RM10,000.00. But for the Second and Third Defendants who are the R&Ms for the First Defendant had sold the Assets to another person/third party as in addition receiving the earnest deposit from the Plaintiff. This Court finds that the action of forfeited the earnest deposit is unlawful. [54] The Offer Form that was signed by the Plaintiff with the signature of the late Saravanan A/l Raja and duly completed form for the purchase price of RM1,500,000.00 is tendered before this Court. However, the Offer Form for the new purchase price i.e. the revised price is not before this Court. This Court agrees with the submission by the learned counsel for the Plaintiff as follows: S/N CiJtbnVQhk641PA5/hofvg “22. We agree with the decision in the case of Geller Factoring Sdn Bhd (previously known as Matang Factoring Sdn. Bhd.) v Metalco Industries (M) Sdn Bhd [1995] 2 MLJ 163 (Tab 2 DBOA), which was referred by the 2nd and 3rd Defendants in para 48 of their Defendants’ Submission but we would like to highlight to the judgment again. The true position is that WHERE A CONTRACT HAS BEEN SIGNED BY ONE PARTY ONLY, IT CAN BE ENFORCED WHERE THERE IS EVIDENCE THAT THE OTHER PARTY HAS ELECTED TO BE BOUND”. Unfortunately, not in our case before this honorable court— primarily no formal contract between parties. The 2nd and 3rd Defendant merely issued a Letter of Offer and Acceptance on 4.12.2022 and expected Plaintiff to pay the balance purchase price within two days (by 5.12.2022), but the 1st site visit was held on 5.12.2022 only. Based on the referred case, the 2nd and 3rd Defendant may be able to enforce the terms in the Letter of Offer and Acceptance though it was not signed, provided the Plaintiff has elected to be bound. But, it was proven during the trial that Plaintiff did not portray so. Moreover, the Letter of Offer and Acceptance states that IF THE PLAINTIFF FAILED TO EXECUTE THIS LETTER OF OFFER AND ACCEPTANCE, THIS OFFER should BE DEEMED LAPSED ONLY. Consequently, the Letter of Offer and Acceptance should be treated as lapsed and not terminated as the 2nd and 3rd Defendants have no rights to do so.”. S/N CiJtbnVQhk641PA5/hofvg The counterclaim [55] The Second and Third Defendants’ counterclaim against the Plaintiff are for the following reliefs:

that the 2nd and 3rd Defendants are entitled to forfeit the earnest deposit and terminate the contract.

General Damages to be assessed.

Costs to be borne by the Plaintiff.

Further and/or other relief which this Honourable Court may deem fit and fair in the circumstances of this case. [56] After the full trial, the findings of this Court is that the Second and Third Defendants had failed to prove its counterclaim on balance of probability. The Second and Third Defendants asserts that they can forfeit the earnest deposit but as the reasons indicate by this Court, the earnest deposit in the sum of RM90,000.00 must be refund to the Plaintiff together with 5% interest on the sum of RM90,000.00 from the date of filing the writ until the full settlement. The contract had been terminated and it is the fact that the Company Assets had been sold to other person/third party. [57] This Court did not allow the reliefs for Exemplary Damages and General Damages to be assessed as sought by the Plaintiff and the relief for General Damages to be assessed as sought by the Second and Third Defendants also not to be entertained. S/N CiJtbnVQhk641PA5/hofvg Conclusion [58] In view of the foregoing reasons, I find that the Second and Third Defendants have failed on a balance of probability in demonstrating that they can forfeit the earnest deposit. Accordingly, I allow the Plaintiff’s claims partly and dismiss the Second and Third Defendants’ counterclaim with costs RM15,000.00 (subject to the allocator fee) to be paid to the Plaintiff. Dated: 17 August 2023. RoziBainon ( ROZI BINTI BAINON ) Judicial Commissioner High Court NCvC12 Shah Alam Counsels: For the Plaintiff: Kirubagaran B A/L Baskaran Tetuan B B Kiru & Partner, Puchong, Selangor For the Second and Third Defendants: Sivagamii A/P R. Rajaratnam Tetuan S Ravenesan, Kuala Lumpur