Juwanas Sdn Bhd v Ong Ah Nya @ Ong Ah Tuan (P-02(NCVC)(W)-482-03/2018)

ONG AH NYA @ ONG AH TUAN

ONG HONG GIAP ……….…..RESPONDEN-RESPONDEN (DALAM MAHKAMAH TINGGI PULAU PINANG GUAMAN No: PA-22NCVC-28-02/2016

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ONG AH NYA @ ONG AH TUAN

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LOH SWEE CHIM ONG HONG GIAP …….PLAINTIF-PLAINTIF DAN JUWANAS SDN BHD (No Syarikat: 404827-K) ……….DEFENDAN) _________________________________________________________ 2 CORAM: Nallini Pathmanathan, JCA Dr. Badariah Sahamid, JCA Zabariah Mohd Yusof, JCA JUDGMENT [1] The appeal is against the decision of the learned High Court Judge in ordering the appellant (defendant in the High Court) to refund RM963,635.00 allegedly being an amount that had been overpaid by the respondents (plaintiffs in the High Court) pursuant to 4 Sales and Purchase Agreements dated 23.11.2012 executed between the appellant and the respondents. The appellant is also appealing against the dismissal of the appellant’s counterclaim. [2] After hearing submissions from both parties and perusing through the written submissions and appeal records, we unanimously allowed the appeal with costs, and allowed the counterclaim of the appellant. We set aside the decision of the High Court dated 23.2.2018. [3] Herein below are our grounds. Parties will be referred to as they were, in the High Court. The Claim: [4] The claim by the plaintiffs against the defendant is for RM963,635.00 allegedly being the loss caused to the plaintiffs as a result of the option given by the defendant to the plaintiffs pursuant to a Sale 3 and Purchase Agreement dated 21.3.2011 executed between the 1st and the 2nd plaintiffs and the defendant. [5] The defendant, in turn counterclaimed against the plaintiffs seeking for the following reliefs: “43. Dengan ini, Defendan menuntut untuk: a) Satu deklarasi bahawa terdapat satu kontrak yang sah dan berkuatkuasa berkenaan: i) Plot 15 tersebut di antara Plaintif Ketiga dan Defendan melalui Perjanjian Jual Beli bertarikh 23.11.2012; ii) Plot 16 tersebut di antara Plaintif Pertama dan Plaintiff Keempat dan Defendan melalui Perjanjian Jual Beli bertarikh 23.11.2012; iii) Plot 31 tersebut di antara Plaintif Kelima dan Plaintiff Keenam dan Defendan melalui Perjanjian Jual Beli bertarikh 23.11.2012; dan iv) Plot 32 tersebut di antara Plaintif Kedua dan Plaintiff Ketujuh dan Defendan melalui Perjanjian Jual Beli bertarikh 23.11.2012.” The Facts: [6] The 1st and the 2nd plaintiffs were the registered proprietors of a piece of land known as Lot 967, Mukim 14, Daerah Seberang Perai Selatan, Pulau Pinang held under Geran No. H.S. (D) 22295 (Lot 967). 4 [7] The 3rd - 7th plaintiffs are the nominees for either the 1st plaintiff or the 2nd plaintiff. [8] The defendant is a property developer and involved in the business of purchasing and developing lands for purposes of housing development. [9] The defendant entered into a Sale & Purchase Agreement dated 21.3.2011 (pgs. 12-25 CABD) with the 1st and 2nd plaintiffs to purchase Lot 967 from them for RM14,102,550.00 (Land Agreement). The terms and conditions are as set out therein. [10] After the execution of the Land Agreement, the defendant proceeded with the development on Lot 967, including the subdivision of the same and obtaining approval of its development plans including the layout plan in respect of its proposed housing development on Lot 967. [11] The defendant developed Lot 967 as a housing project known as Orchard Villa 2 consisting of bungalow units (the said housing project). [12]

(i) Plot 15 - a corner lot and measures 8702 sq. ft.

(i) Plot 15 Land Area 8702 sq.ft. x RM65.00 = RM 565,630.00 Built Up Area 7224 sq.ft. x RM80.00 = RM 577,920.00 RM1,143,550.00 9

(i) Plot 15 - RM1,353,000.00

(i) Relying on Ms Goh Siong Yean (SD2) of Messrs. Syarikat Lim Kiam Hoon alleged representation to them to sign the 10 SPAs first and later meet the defendant to adjust the purchase price accordingly;

(i) Plot 15 - RM210,520.00

(i) The 1st & 2nd plaintiffs were given the 1st option to purchase bungalows constructed by the defendant on Lot 967 upon the layout plan for the development being approved;

(v) RM65.00 per sq. ft. for land area and RM80.00 per sq. ft. for built up area was never meant to be the calculation for the bungalows to be sold to the plaintiffs pursuant to the said Option. It was an adjustment mechanism included in the said Option to adjust the standard bungalow lot price from RM1,260.000.00, if the subdivided and approved standard plots were slightly bigger or smaller than the estimated standard size of 7350 sq. ft. for land area and 7224 sq. ft. for built up area. [31] The defendant contends that the plots chosen by the 1st & 2nd plaintiffs or their nominees did not conform with the said Option as they were not standard plots measuring approximately 7350 sq. ft. for land area and 7224 sq. ft. for built up area but instead were bigger and/or corner units and/or units facing the clubhouse which were premium plots. [32] Consequently, as the plots which the 1st and 2nd plaintiffs or their nominees had chosen were not within the option clause, they were no longer entitled to rely on it. The defendant contends that it had no obligation to sell Plot 15, Plot 16, Plot 31 & Plot 32 to the 1st & 2nd plaintiffs or their nominees pursuant to the said Option. 13 [33] Despite the defendant not having any obligation to sell Plots 15, 16, 31 and 32 to the plaintiffs, the defendant agreed to sell the same to the 1st & 2nd plaintiffs or their nominees at the defendant’s launching price less RM200,000.00 (which is independent from the said Option which the 1st & 2nd plaintiffs had failed to exercise). The reason why the discount was given, even though the plaintiffs were no longer entitled to rely on the option, was because the plaintiffs were purchasing in bulk (namely more than one unit). The defendant gave the plaintiffs a RM200,000.00 discount from its launch price for Plot 15, 16, 31 and 32 as a discount for bulk purchase. The plaintiffs had accepted this when they signed the SPAs dated 23.11.2012. The plaintiffs also paid the 10% deposit based on the SPAs for Plot 15, Plot 16, Plot 31 and Plot 32 and subsequently paid all the progressive payments as set out in the SPAs without any protest or reservation. [34] The defendant contends that the plaintiffs had entered into the SPAs voluntarily and not under any alleged representation by SD 2 or SD 1. [35] The defendant completed the development of Lot 967 and vacant possession of Lot 15, Lot 16, Lot 31 & Lot 32 had been delivered to the plaintiffs. [36] The plaintiffs had also received compensation for late delivery of the properties purchased by them. [37] As such, it is the defendant’s case that the plaintiffs are bound by the terms of the SPAs dated 23.11.2012 in respect of Plot 15, Plot 16, Plot 31 & Plot 32 including the respective purchase price set out therein. 14 [38] Pursuant to Clause 12(1) of the SPAs dated 23.11.2012, adjustments of the purchase price (as set out in the SPAs dated 23.11.2012 after the SPAs have been executed) are only allowed if the area shown in the Layout Plan in the 1st Schedule of the SPAs are different from the Final Document of Title when issued. The plaintiffs in our case, do not claim any such discrepancy and neither is there any evidence of any such discrepancy. As such, Clause 12 is not applicable in our case and the plaintiffs are contractually not entitled to any adjustment of the price set out in the respective SPAs dated 23.11.2012. [39] There was absolutely no mistake by either party with regard to the SPAs dated 23.11.2012 for Plot 15, Plot 16, Plot 31 and Plot 32. The plaintiffs knew very well the purchase price which was stated in the SPAs which they proceeded to sign. [40] The claim by the plaintiffs for refund of RM963,635.00 is totally baseless and without merit and therefore should be dismissed and the defendant’s counterclaim as set out in paragraph 43(a)(i)-(iv) of the Counterclaim should be allowed. The findings of the learned High Court Judge: [41] The learned High Court Judge held that the plaintiffs had exercised the said Option when the 1st and the 2nd plaintiffs had purchased Plot 15,16, 31 and 32 vide SPAs dated 23.11.2012 (Para 8 of the grounds of judgment). [42] The learned trial Judge relied on the testimony of SP 1 in interpreting the said Option clause. SP 1 was the solicitor who 15 represented the 1st and the 2nd plaintiffs in the Land Agreement dated 21.3.2011. The learned trial Judge relied on the following evidence of SP 1 who states in his evidence as to how the purchase price ought to have been calculated based on the option: “…The option denotes the method which the purchase price of each bungalow shall be calculated. These are two limbs to the ascertainment of the purchase price. …… The first limb states that at the purchase price of RM1,260,000.00 per unit, calculated at RM65.00 per sq. ft. on land area and RM80.00 on build up area. Or The 2nd limb, RM200,000.00 below the Purchasers (The Defendant in this case) launching price, whichever is lower, to be erected on land area (Plot) measuring approximately 7350 sq. ft. with build up area per unit measuring 7224 sq. ft. ……. ….using the above formula and taking for example Plot 32, the property in question has a land area of 7571 sq, ft, and build up area of 7224 sq. ft. by using the formula in the option (1st limb), it can be ascertained that the purchase price would be RM1,070,035.00-(RM65.00 x 7571 = RM492,115.00 (land); and RM80.00 x 7224 = RM577,920.00 (building). Total RM1,070,035.00. ……. The option gives to the plaintiffs the choice to adopt whichever limb in the option would result in a lower price (whichever is lower) and the 1st limb would obviously be the chosen price.” [43] The learned trial Judge held that from the evidence of SP 1 who was involved in the Land Agreement dated 23.11.2011, the plaintiffs were 16 given the election to apply whichever limb in the said Option (para 34 of the grounds). [44] The learned trial Judge also held that: “Plaintif-plaintif telah menandatangani PJB bertarikh 23.11.2012 atas representasi SD 2.” “Sekiranya benar SD 2 peguam yang mewakili Plaintif-Plaintif, persoalan di sini, kenapa SD 2 sebagai seorang peguam Plaintif-Plaintif membiarkan Plaintif-Plaintif tandatangani PJB tersebut sedangkan harga belian pada masa itu masih dipertikaikan.” “SD 2 sebagai seorang peguam yang mempunyai tugas dan kepakaran undang-undang seharusnya menghalang Plaintif-Plaintif daripada tandatangani PJB bertarikh 23.11.2012 tersebut kerana SD 2 semestinya tahu akan kesan-kesan undang-undang dengan menandatangani perjanjian tersebut.” “Fakta yang Plaintif-Plaintif telah tandatangani PJB bertarikh 23.11.2012 tersebut membuktikan yang Plaintif-Plaintif mempercayai dan bergantung sepenuhnya kepada beliau sebagai seorang peguam walaupun sebenarnya daripada keterangan yang dikemukakan, SD 2 adalah peguam untuk Defendan.” “SD 2 mengambil semua arahan-arahan daripada Defendan bagi tranksaksi untuk perjanjian bertarikh 23.11.2012. Plaintif-Plaintif tidak memberi apa-apa arahan kepada SD 2 dan SD 2 tidak mengambil apa-apa arahan daripada Plaintif-Plaintif.” 17 “Jadi saya dapati walaupun SD 2 bertindak untuk Defendan, beliau juga ada memberi nasihat guamannya kepada Plaintif-Plaintif yang menyebabkan Plaintif-Plaintif telah menaruh kepercayaan kepada beliau lalu menandatangani perjanjian bertarikh 23.11.2012 walaupun masih terdapat pertikaian tentang harga belian.” “Jadi saya dapati PJB bertarikh 23.11.2012 yang ditandatangani oleh Plaintif-Plaintif dan Defendan adalah dilaksanakan dalam satu kesilapan dengan representasi yang salah.” The learned trial Judge made a finding of fact that the SPAs dated 23.11.2012 was executed by mistake pursuant to a misrepresentation by SD 2. [45] The learned trial Judge relied on the exception in proviso (c) to section 92 of the Evidence Act 1950. Her Ladyship referred to the case of Tan Swee Hoe Ltd v Ali Hassan Bros [1980] 2 MLJ which held that an oral agreement could exist collaterally with a written agreement and that the oral agreement could be enforced even if there was a written agreement (refer to para 68 of the grounds). Her Ladyship went on to hold: “69. Didalam kes semasa ini, apa yang ada adalah satu perjanjian bertulis yang mengikat dan berkuatkuasa. Jadi, Mahkamah ini berpendapat bahawa perjanjian bertulis bertarikh 21.3.2011 adalah mengikat Plaintif-Plaintif dan Defendan sebagai satu kolateral bagi Opsyen tersebut dengan PJB bertarikh 23.11.2012 antara Plaintif-Plaintif dan Defendan.” The learned trial Judge held that the Land Agreement dated 21.3.2011 binds the plaintiffs and the defendant as collateral for the said 18 Option with the SPAs dated 23.11.2012 between the plaintiffs and the defendant. [46] The learned trial Judge ordered the refund of RM963,635.00 which was allegedly overpaid by the plaintiffs and the defendant were obliged to pay such amount as set out in the respective SPAs dated 23.11.2012 duly executed by them and awarded costs of RM80,000.00. The counterclaim of the defendant was dismissed accordingly. OUR DECISION: [47] A summary of the memorandum of appeal discloses that the main issues revolve around the following : i) The construction of the said Option; ii) The representation issue by SD 2; iii) Whether there is a collateral contract. The construction of the said Option: [48] The learned trial Judge held that the said Option has been exercised by the plaintiffs. In determining whether there is any error on the part of the learned trial Judge in coming to such decision, it all distills down to what is the correct construction to be accorded to the said Option clause in the Land Agreement dated 21.3.2011. [49] It is trite law that that an option clause must be strictly construed, both as to time and the manner for its exercise (see Far East Holding & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and 19 other appeals [2018] 1 MLJ 1 at page 35). The English Court of Appeal in Holwell Securities Ltd v Hughes [1974] 1 AER, emphasized the importance of complying strictly with the conditions which relates to options when it held that: “It is a truism of the law relating to options that the grantee must comply strictly with the conditions stipulated for exercise: See Hare v Nicoll” In Hare v Nicoll [1966] 1 AER 286 the English Court of Appeal held that: “The defendant was not in breach of the option agreement, and accordingly the plaintiff was not entitled to damages, for the following reasons:

(i) An option to purchase or re-purchase must be exercised strictly in accordance with the conditions stipulated, and cl. 2 of the agreement prescribed two dates, one for notifying intention to repurchase and the other payment of the purchase price by June 1, 1963, and in the present case there had not been compliance with the condition for payment by the date.

(i) Land area - RM 65.00 per sq. ft.

Hence it appears to be an afterthought. In any event, it was denied by SD 1 that such representation was ever made. In addition, nowhere in the said Option does it state that the said Option would lapse upon payment of the final instalment. It is to be noted that the 1st and the 2nd plaintiffs had the advice of their solicitors (SP1) at all material times. SP 1 claimed to have accompanied the plaintiffs to meet the defendant’s directors to discuss the price after the plaintiffs had signed the SPAs dated 23.11.2012. The plaintiffs could have checked with SP 1 on the alleged statement by Mr. Ng if ever such statement was made. The 2nd plaintiff (SP 2) confirmed that he never checked with SP 1 about the alleged statement by Mr. Ng. This crucial evidence was never considered by the learned trial Judge. [70] Therefore, the reasons (namely, the alleged representation by SD 1 and SD 2) as to why the plaintiffs signed the SPAs dated 23.11.2012 is without merits. The learned trial Judge erred in law and fact when Her Ladyship found that the SPAs were executed by the plaintiffs premised on misrepresentation by the defendant. Therefore, it appears that the plaintiffs had executed the SPAs dated 23.11.2012 voluntarily and agreed to the terms, which included the purchase price as stipulated. [71] The plaintiffs after having signed the SPAs dated 23.11.2012 paid the deposit and the purchase price in cash without any protest, received vacant possession and also claimed for LAD for late delivery of the units, cannot now sue the developer for a refund of the purchase price that was 30 paid. This act of the plaintiffs amounts to approbating and reprobating which is not allowed in law. In the Court of Appeal case of Tetuan Theselim Mohd Sahal & Co & Ors v Tan Boon Huat & Anor [2017] 6 CLJ 368 , it was held that: “[22] In our view the plaintiffs were approbating and reprobating in adopting such an approach. The law does not permit this In Vershures Creameries Ltd v Hull and Netherlands Steamship Co Ltd [1921] 2 KB 608, Scrutton LJ elucidated the principle as follows(at p.612): The doctrine of election is not however confined to instruments. A person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that that is valid, and then turn around and say it is void for the purposes of securing some other advantage. That is to approbate and reprobate the transaction.” After executing the SPAs and accepting vacant possession of the bungalows, it is no longer open to the plaintiffs to object to the price as set out in the SPAs dated 23.11.2012 and seek for a refund of the alleged overpayment. By signing the SPAs the plaintiffs had agreed to be bound by the terms of the agreement including the purchase price which they had voluntarily paid in full without any reservation. They are now estopped from alleging that they are not bound by the purchase price as set out in the 4 SPAs dated 23.11.2012 (See Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Berhad (1995) 3 MLJ 331) [72] It is pertinent to note the reason for the inclusion of the said Option clause in the Land Agreement. This was explained by SD 1 where he said 31 that the defendant agreed to give the said Option as the defendant had paid a higher price for Lot 967 (namely RM37 per sq. ft.) as compared to the prevailing market price at the material time which was about RM29 per sq. ft. to RM30 per sq. ft. (Page 308 RR Jilid 2(1) Bahagian B). The plaintiffs contend that the said Option was given to the 1st and the 2nd plaintiffs in consideration of the longer period of payment of the balance purchase price. There appears to be a conflicting oral evidence as to the reason for the said Option. However, it is immaterial, given that what is relevant and material is whether the terms of the said Option were complied with by the 1st and the 2nd plaintiffs. [73] The SPAs in respect of Plot 15, Plot 16, Plot 31 & Plot 32 were all dated 23.11.2012 and stamped on 26.11.2012. It was only one year later, that the plaintiffs through their solicitors, Messrs Danny C.N. Sivaguru & Associates, issued the Notice of Demand dated 28.11.2014 to which the Defendant’s previous solicitor, Messrs Lim Beng Long & Associates replied vide letter dated 20.12.2014 stating as follows: “3) Clause 1(b) Third Schedule of the Land Agreement refers to the standard plot with land area (Plot) measuring approximately 7350 sq. ft. with build up area measuring 7224 sq. ft. The purchase price per unit for the standard plot is agreed to be RM1,260,000.00 or RM200,000.00 below our client’s launching price, whichever is lower. The purchase price will be adjusted at RM65.00 per sq ft on land area and RM80.00 per sq ft on build up area if there are variations to the land area and build up area of the standard plot; 4) But instead the standard plot, your clients and their nominee(s) selected the premium plots with a much larger land 32 areas (corner plots)(Plots 15, 16 and 31) and the plot facing the club house (plot 32); 5) Your client Ong Ah Hai had through a letter dated 11.10.2012 asked our clients to sell Plots 15, 16, 31 and 32 at the respective sale price of RM1,143,550.00, RM1,102,210.00, RM1,138,870.00 and RM1,070,035.00. But after being reminded of the matters stated in paragraph (3) and (4) above, your clients had agreed to purchase the premium plots at the purchase price as stated in the Sale and Purchase Agreements dated 23.11.2012 for plots 15 (RM1,353,800.00), 16 (RM1,350,000.00), 31 (RM1,398.500.00) and 32 (RM1,316,000.00), which are already at substantial discounts from our clients’ launching price. 6) If your clients had disagreed with the purchase price as stated in the Sale and Purchase Agreements for plots 15, 16, 31 and 32, they would not have executed the Sale and Purchase Agreements. If your clients really disagreed with the purchase price as stated in the Sale and Purchase Agreements, they could have easily asked for the purchase price to be amended before they signed the agreements. But here, your clients agreed to the matters raised in paragraphs (3) & (4) above, and signed the sale and purchase agreements, and both parties had acted on the sale and purchase agreements. 7) Your clients’ attempts to review the purchase price is clearly an afterthoughts. Our clients never told your clients that they would look into and adjust the purchase price as stated in the sale and purchase agreements for plots 15, 16, 31 and 32. Your clients signed the sale and purchase agreements with full knowledge that the purchase price as stated in the sale and purchase agreements for plots 15, 16, 31 and 32 are agreed by both parties and are final.” 33 The answers given in the reply by the defendant’s solicitors shows the consistent stand of the defendant throughout as to the interpretation of the said Option. [74] The learned trial Judge in her findings said that there was a mistake on the part of the plaintiffs in signing the SPAs. Her basis for saying so, is purely on the misrepresentation aspect. However, we found that based on the factual matrix, both parties were fully aware of the purchase prices of the respective plots and conditions of the SPAs dated 23.11.2012 when they were executed. The learned trial Judge erred when she found that there was mistake when it is not the pleaded case of the plaintiffs. Whether there is a collateral contract: [75] The learned trial Judge held that: “…..perjanjian bertulis bertarikh 21.3.2011 adalah mengikat Plaintif-Plaintif dan Defendan sebagai satu kolateral bagi Opsyen tersebut dengan PJB bertarikh 23.11.2012 antara Plaintif-Plaintif dan Defendan.” Although the learned trial Judge cited the case of Tan Swee Hoe Ltd v Ali Hassan Bros which held that an oral agreement could exist collaterally with a written agreement and that the oral agreement could be enforced even if there was a written agreement, subsequently Her Ladyship held that the Land Agreement dated 21.3.2011 was collateral to the SPAs dated 23.11.2012. 34 It is to be noted that Tan Swee Hoe Ltd v Ali Hassan Bros was referring to a collateral oral agreement whereas in our case the learned trial Judge held that a written agreement as collateral to another written agreement. Therefore, we do not see how Tan Swee Hoe Ltd v Ali Hassan Bros is applicable to our present facts. [76] In this respect the plaintiffs sought to rely on section 92 of the Evidence Act 1950, with particular reference to the exception in proviso

(c) to support the argument of the existence of a separate agreement side by side with the main agreement. Section 92 of the Evidence Act 1950 provides that no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting, varying, adding to, or subtracting from its terms except if it falls under any of the exceptions in provisos in para (a), (b), (c), (d), (e ) and (f). The relevant provisos relied upon by the plaintiffs in paragraph (c) which reads: “the existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.” In our case there is no separate oral agreement (which was admitted by the plaintiffs), hence we failed to see how that proviso applies. The plaintiffs submitted that although that proviso states oral agreement, it makes no difference as by analogy it still is a separate agreement that exists side by side with the main agreement, namely the SPAs. We cannot agree with such submission when the proviso is clear that it refers to “oral agreement”. 35 [77] In any event, the scope of the exception in proviso (c) to section 92 of the Evidence Act 1950, is confined to evidence of a condition precedent to the written contract as compared to collateral contracts and warranties. In support of this proposition, the Singapore Court of Appeal in the case of Latham Scott v Credit Suisse First Boston [2000] SGCA 26 had the occasion to adjudicate on a similar provision in their section 94 (c ) of their Evidence Act: “19. It was clear that s 94 (c ) of the Evidence Act did not help Latham in his attempt to admit evidence of the oral guarantee allegedly given by Harvey. Latham’s counsel appeared to think that the scope of s. 94 (c) covers collateral contracts and warranties, when in actual fact it is clearly confined to evidence of a condition precedents and collateral contracts are different legal creatures. Collateral contracts constitute an independent contract from the written agreement. In contrast, the condition precedent to an agreement is one where the parties have agreed that the written contract does not take effect until the fulfilment of a certain condition. It has been pointed out by the editor of Cheshire, Fifoot and Furmston’s Law of Contract, Second Singapore and Malaysian edition, that the applicable exception in s 94 in relation to collateral contracts is s 94 (b). A proper interpretation of s 94 (c ) of the Evidence Act indicates that it is only applicable to condition precedents. In our view, counsel for Latham confused the two concepts.

Under such circumstances, the arguments raised were not really relevant. It was evident that the alleged verbal guarantee was not a condition precedent and the exception in s 94 (c) of the Evidence Act could not apply to admit oral evidence of the guaranteed bonus. As the judicial commissioner pointed out, the written agreement had already become binding and had been 36 performed as to a large portion of its obligations. The oral agreement could thus not be construed as a condition precedent as the payment of the bonus would not have been paid to Latham prior to the performance of his contract of employment.” [78] In our present appeal, there is no condition precedent involved, hence the exception in proviso (c) to section 92 of the Evidence Act 1950 would not have any application at all. [79] Furthermore, the plaintiffs had never pleaded any collateral contract nor any condition precedent in their claim. It is trite law that parties are bound by their pleadings. [80] It must also be noted that the Land Agreement dated 21.3.2011 between the defendant and the 1st and the 2nd plaintiffs is a separate and distinct agreement with the 4 SPAs dated 23.11.2012. The parties are different in the Land Agreement dated 21.3.2011 and the SPAs dated 23.11.2012. The Land Agreement involved the sale of Lot 967 from the 1st and the 2nd plaintiffs to the defendant whilst the 4 SPAs dated 23.11.2012 involved the purchase of the Plots 15, 16, 31 and 32 by the plaintiffs and/or their nominees from the defendant. Hence the subject matter between the Land Agreement and the SPAs is different. It thus cannot be said that the said Option is condition precedent to the 4 SPAs dated 23.11.2012. Neither can it be termed to be collateral contracts. [81] We are also of the view that the plaintiffs cannot rely on the alleged representation by SD 2 as a collateral contract/condition precedent. The alleged representation was never an agreement by the defendant to any price variations. What was alleged as represented by SD 2 was merely 37 that the plaintiffs refer to the defendants for price adjustments. It was never the plaintiffs’ case that the representation was that the defendant agreed to price reductions/variations. SD 1 of the defendant confirmed that there was no such agreement by the defendant to vary the price, be it before or after the execution of the 4 SPAs dated 23.11.2012. [82] Therefore section 92 exception in proviso (c) of the Evidence Act 1950 has no application to our present facts. Issue on the standard plots: [83] It was in evidence by the witness for the defendant, SD 1 that the option clause refers to the standard bungalow plot with land area measuring approximately 7350 sq. ft. with built up area measuring approximately 7224 sq. ft. The purchase price per unit for a standard plot was agreed at RM1,260,000.00 or RM200,000.00 below the defendant’s launching price, whichever is lower. The rate of RM65.00 per sq. ft. for land area and RM80.00 per sq. ft. for built up area was meant to be the adjustment price in the event the 1st and the 2nd plaintiffs or their nominees complied with the said Option and chose a standard plot. The plots chosen by the 1st and the 2nd plaintiffs or their nominees (namely plot 15, 16, 31 and 32) were not standard plots as envisaged in the said Option clause but were bigger plots and/or corner units and/ or unit facing the clubhouse and were premium plots. [84] The learned trial Judge held that the issue on the standard plots was never pleaded by the defendant, hence the court is precluded from considering such defence. The learned trial Judge held that: 38 “42. …Isu mengenai plot-plot standard ini tidak pernah diplidkan oleh Defendan di dalam pembelaannya. Jadi, isu mengenai dengan plot-plot standard ini tidak dipertimbangkan di dalam prosiding ini.” [85] It is settled law that parties are bound by their pleadings and are not allowed to adduce facts and issues not pleaded. (Veronica Lee Ah Ling & Ors v Maxisegar Sdn Bhd [2009] 6 CLJ 232). The Federal Court in the case of The Chartered Bank v Yong Chan [1974] 1 MLJ 157 had the occasion to set aside the judgment of the learned trial Judge because it was decided premised on an issue not pleaded. This is the general accepted rule. However, there are exceptions to such general rule, namely where there has been no objection by the opposing party when the unpleaded facts or issues were adduced at trial. We found that when the evidence was given by SD 1 on the standard plots, there were no objections raised by the plaintiffs at trial. As such the court is duty bound to consider the evidence. By not objecting, the plaintiffs are deemed to have waived the requirement that the standard plots must be pleaded. There was thus no element of surprise and prejudice. In support of such proposition we refer to the following cases: Boustead Trading [1985] Sdn Bhd v Arab Malaysian Bank Berhad [1995] 3 MLJ 331, Perniagaan Kinabalu (S) Sdn Bhd v Sua Ah Yoke & Ham Jon See [2002] MLJ 601, Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [1998] 1 MLJ 465. In Superintendent of Lands and Surveys v Hamit B Matusin & Anor [1994] 3 CLJ 567, the Supreme Court rationalised why such an approach was taken by the courts in civil cases at page 571: 39 “Generally in civil cases only, both parties can validate any mode of adducing evidence by consent, express or inferred, even when such mode is irregular, for any irregularity is deemed to be waived by such consent. Technical rules of evidence can be to a limited extent, even dispensed with by a Court without such consent also, please see Baerlein v Chartered Mercantile Bank [1895] Ch D 488; similarly with technical rules of procedure. Therefore when such evidence represents a departure from pleading, it should be objected to as when and where it is adduced, and it will be too late when it only objected to later on, as in the final submission at the close of evidence as in the instant appeal. In these circumstances, the party facing such evidence at variance from pleading, by failing to object cannot be said to be taken by surprise, prejudiced, misled or embarrassed. Otherwise, the other side of the coin would be, in the event of such objection raised at the stage of final submission being accepted by the Court, that the party adducing such evidence may face the great risk of being denied leave to amend his pleading in question at that stage. Such evidence when given without any objection by the opposing party will further have the effect of curing the absence of such plea in the relevant pleading, in other words, the effect of overcoming such defect in such pleading. As was stated by Federal Court in Ang Koon Kau & Anor v Lau Piang Ngong [1984] 2 MLJ 277, FC at page 278: Evidence given at the trial can therefore in appropriate circumstances overcome defects in the pleadings where the net result of such evidence is to prevent the other side from being taken by surprise. 40 There is however, at least one important exception to such curing of defect of pleading by evidence departing from such pleading without objection then and there to such evidence. The exception is when such evidence represents a radical departure from the pleading, and is not just a variation, modification or development of what has been alleged in the pleading in question, please see Waghorn v George Wimpey & Co. Ltd [1969] 1 WLR 1764 which gave rise to the proposition, which was approved by Ang Koon Kau & Anor v Lau Piang Ngong, supra, and John Stein & Co. Ltd v O’Hanlon [1965] AC 890”. Hence the learned trial Judge erred when she refused to consider the evidence on the issue of the standard plots, because it was not pleaded. COUNTERCLAIM: [86] The learned trial Judge held that the defendant failed to prove its counterclaim and dismissed he same. [87] The relief sought by the defendant in its counterclaim is only confined to paragraph 43 (a) (i) - (iv), namely for a declaration that the 4 SPAs dated 23.11.2012 are valid and binding in its entirety. [88] Premise as aforesaid, we found that the 4 SPAs dated 23.11.2012 was voluntarily executed by the plaintiffs and thus are binding on the parties. We therefore found that the defendant had proven its 41 counterclaim against the plaintiffs. The learned trial Judge had erred when she dismissed the counterclaim of the defendant. CONCLUSION: [89] Premised as aforesaid, on the construction of said Option clause of the Land Agreement we are of the view that the construction as advanced by the learned trial Judge is clearly erroneous. To give it the meaning proposed by the plaintiffs is to render it untenable. The pleaded case of the plaintiffs is to rely solely on one part of the relevant clause, that is in Clause 1(b) of the 3rd Schedule, namely, RM65.00 per sq. ft. for the land and RM80.00 per sq. ft. for the built up area which is ineffective for the rest of the clause. The clause cannot be read that way. To do so, will result in plots of larger sizes being sold at prices below the lower price stipulated in the clause. It will lead to commercial absurdity. We are of the view that the construction put forward by the defendant is correct, as it adheres to the law on construction of option, namely that they are to be construed strictly and not according to the oral evidence of witnesses. It is the only sensible way to construe the clause. The matter therefore effectively ends there as the entire basis for the plaintiffs’ claim then falls. [90] In any event we went on to consider the issue of misrepresentation. We are not persuaded that there was misrepresentation in law. The facts pleaded by the plaintiffs are insufficient in our view to establish that there were material misrepresentation that was untrue. The statement by the lawyer do not amount to such material misrepresentation. In any event, the plaintiffs had affirmed the SPAs by, inter alia, the payment of full purchase price, by claiming LAD and taken vacant possession of the property. 42 [91] In all these circumstances, we have no option but to allow the appeal with cost and allowed the counterclaim by the defendant in para 43 (a) (i) (ii) (iii) (iv) of the amended defence and amended counterclaim. We allowed cost of RM35,000.00 here and below; RM25,000.00 in the High Court and RM10,000.00 here, subject to allocator and deposit is refunded. The High Court Order is set aside in its entirety. The judgment sum deposited with solicitors for the appellant defendant may be released. [Note: In the midst of preparing this judgment, we found some inaccuracy in the calculation of the total amount claimed by the plaintiffs which is due to inaccuracy in the calculation of the difference in the price between the price in the SPAs dated 23.11.2012 and the said Option price for Plot 15. However that does not affect our decision in this appeal.] Signed by: Zabariah Mohd Yusof Judge of the Court of Appeal Putrajaya Date: 10.12.2018 COUNSEL: Karin Lim Ai Ching, Dominic Pillai, Noor Adzraai bin Noor Azhar for the Appellant [Messrs. Presgrave & Matthews] Danny Navarednam, Norriza Ahmad for the Respondents [Messrs. Danny C.N. Sivaguru & Associates]