Kirana Emas Sdn Bhd v Tung Kok Sing (WA-22NCC-692-09/2023)

This is a trial heard on 04-04-2025. Oral submissions by counsel were held before me on 14-07-2025 and on 10-09-2025.On conclusion of submissions, I allowed the plaintiff’s claim for a refund of RM 250,000 paid to the defendant under a Share Sale Agreement dated 25-10-2017 [ “SSA”].

I ordered a refund for non-fulfilment of Conditions Precedent by the defendant under the SSA with interest and costs. [See SSA in B1 pages 12 - 40].

Under the SSA, the plaintiff had bought the defendant’s 15,000 shares (“the said Shares”) in a company called Tiara View Housing Development Sdn Bhd (“Tiara View”) for RM 4 million. The RM 250,000 was paid to the defendant as a deposit upon signing of the SSA.

I also dismissed the defendant’s Counterclaim to keep the deposit of RM 250,000 and for damages for breach of contract of RM 3,750,000, interest and costs. [See IP page 33 paragraph 51].

I awarded costs of RM 50,000 to the plaintiff subject to allocatur.

An appeal was filed by the defendant on 09-10-2025 to the Court of Appeal against my judgment. Another appeal was filed by the defendant on 09-10-2025 to the Court of Appeal against my dismissal of the defendant’s Counterclaim. These are my Grounds of Judgment.

The plaintiff is a company with a registered and business address in Selangor.

The defendant is an individual and a shareholder of Tiara View holding the said Shares. The defendant is also a director of Tiara View. Tiara View applied to develop a mixed development project

By a letter dated 07-04-2015, the Terengganu State Government granted to Tiara View an approval to develop a mixed development project on a piece of land known as “Parcel N3” at Muara Utara Area, Kuala Terengganu City Centre (KTCC). [See-i. Letter from Unit Perancangan Ekonomi Negeri, Pejabat Setiausaha Kerajaan Terengganu dated 07-04-2015 B1 page 41; and ii. Development Agreement dated 10-10-2016 between Tiara View and Kerajaan Terengganu B1, Pages 163 – 200.] Premium payable by Tiara View for land

The approval was subject to, inter-alia, Tiara View applying for the land from the Kuala Terengganu Land Administrator. [See B1 page 41 paragraph 2.2].

The land was applied for and on 29-03-2018 a sum of RM 38,343,139.23 [“Premium”] was imposed by the Kuala Terengganu Land Office on Tiara View being payment for the alienation of the piece of land. [“Alienation Application”] [See letter from Kuala Terengganu Land Administrator/Land Office to Tiara View dated 29-03-2018, B1 page 207].

By the SSA dated 25-10-2017, the defendant agreed to sell and the plaintiff agreed to purchase the said Shares with the purchase price of RM 4,000,000.00. [See B1, Page 12 – 40]. Conditions precedent

It is not disputed that the SSA is a conditional agreement whereby the parties are required to fulfil the conditions precedent as stated in Clause 2.1 of the SSA [“Conditions Precedent”] within six (6) months from the date of the SSA or any other extended time mutually agreed by the parties. [See B1, Page 17]. Payment of deposit

The plaintiff paid the defendant via the defendant’s solicitors Messrs Keh Yen, Ng & Partners (“the defendant’s solicitors”) RM 250,000.00, which is known as “Cash 1” (“the said Cash 1”) under Clause 3.3.1 of the SSA. 1st EOT Request

On 16-03-2018, the defendant via the defendant’s solicitors, requested for a three-month extension of time to procure a new Development Order and to fulfil the Conditions Precedent, (“the 1st EOT Request”). [See the defendant’s solicitor’s letter dated 16-03- 2018 [Bundle B1, Page 206]].

The plaintiff agreed to grant extension of time to 23-07-2018. [See the plaintiff’s solicitors, Messrs Steven Tai, Wong & Partners letter dated 05-04-2018 B1, Page 211]. 2nd EOT Request

On 20-07-2018, the defendant again via the defendant’s solicitors requested for a 2nd extension of time of three months for the fulfilment of the Conditions Precedent (“the 2nd EOT Request”), to procure the new Development Order and to fulfil the Conditions Precedent. [Refer: the defendant’s solicitor’s letter dated 20-07- 2018 [Bundle B1, Page 216]].

On 08-08-2018, the plaintiff rejected the 2nd EOT Request and terminated the SSA and demanded for the refund of the deposit. [Refer: the plaintiff’s solicitors letter dated 08-08-2018 [Bundle B1, Page 217]. Defendant changed stand and refused to refund

Instead of refunding, the defendant on 15-08-2018 alleged – i. The SSA had become unconditional pursuant to the State Government’s approval towards the DO Application vide letter dated 29-03-2018 with reference number [PTK.TR.19/15/2018/0001-(9)]; and ii. The balance consideration of the SSA, i.e. RM 3,750,000.00 was therefore due for payment and in fact, a sum of RM 1,500,000.00 which is known as Cash 2 in Clause 3.3.2 of the Agreement has been long due since 29-06-2018. [See the defendant’s solicitor’s letter dated 15-08-2018 Bundle B1, Page 218]

The plaintiff disputed the defendant’s change of stand and gave another reminder to refund the deposit. [See the plaintiff’s solicitor’s letter dated 21-08-2018 [Bundle B1, Page 219]]

The plaintiff eventually agreed to grant the defendant until 02-02- 2020 to refund. [See the plaintiff’s solicitor’s letters dated 02-10- 2019 and 06-01-2020. [Bundle B1, Pages 222 and 223].

However, despite the extended timeframe, the defendant still failed to fulfil the Conditions Precedent of the SSA by 02-02- 2020 or refund the deposit. Therefore, on 11-02-2020, the plaintiff finally terminated the SSA. [See the plaintiff’s solicitor’s letter dated 11- 02-2020 [Bundle B1, Page 224]. The plaintiff filed a writ against the defendant

The plaintiff filed a writ against the defendant on the ground that under Clauses 2.2 and 2.6 of the SSA, in the event the SSA is terminated due to non-fulfilment of the Conditions Precedent, the defendant is required to refund all payments made by the plaintiff to the defendant, within seven (7) days from the date of termination, i.e. on or before 18-02-2020.

The defendant in defence alleged that the non-fulfilment of the Conditions Precedent was due to the plaintiff’s failure to pay a sum of RM 38,343,139.23 i.e. the Premium to the Kuala Terengganu Land Office being the requisite payment for the Alienation Application. [See DWS paragraphs 5 - 28].

The defendant also alleged that pursuant to Clause 3.5 of the SSA and the doctrine of business efficacy, there was a representation and/or warranty and/or implied term in the SSA that the plaintiff is required to pay the said Premium. [See DWS paragraphs 29 - 42].

The following witnesses testified during the trial for the plaintiff: - i. Chen Hean Tin - PW-1; and ii. Teoh Kok Teong-PW-2

The defendant testified in his own defence – DW-1.

The issues are-i. Whether the Conditions Precedent as stated in Clause 2.1 of the SSA have been fulfilled and/or complied with by the defendant? ii. Whether the plaintiff is entitled to terminate the SSA and a refund of the deposit? iii. Whether the non-fulfilment of the Conditions Precedent was due to the plaintiff’s failure to pay a sum of RM 38,343,139.23 i.e. the Premium to the Kuala Terengganu Land Office being the requisite payment for the Alienation Application? and iv. Whether pursuant to Clause 3.5 of the SSA and the doctrine of business efficacy, there was a representation and/or warranty and/or implied term in the SSA that the plaintiff is required to pay the said Premium?

I will now proceed to consider these four issues. Issue [1] Whether the Conditions Precedent as stated in Clause 2.1 of the SSA have been fulfilled and/or complied with by the defendant? Legal Effect of the non-fulfilment of a condition precedent

It is trite law that the non-fulfilment of a condition precedent will result in the contract being discharged, either automatically or at the election of one of the parties. A contract shall not take effect unless and until the condition precedent is fulfilled. [See Langkawi R&D Academy Sdn Bhd v Ketua Setiausaha, Kementerian Pertahanan Malaysia & Ors [2013] 3 CLJ 1006, CA, and Ideal City Development Sdn. Bhd. v Dynamic Mould Sdn. Bhd. [2003] 3 MLJ 152, CA].

In Langkawi R&D Academy Sdn Bhd v Ketua Setiausaha, Kementerian Pertahanan Malaysia & Ors [2013] 3 CLJ 1006, CA, Abdul Malik Ishak JCA said- [40] A contract is subject to a condition precedent when the contract is not binding unless or until a specified event occurs. Thus, where the condition is precedent, the agreement is not fully binding until the event occurs. The non-fulfilment of a condition precedent will result in the contract being discharged, either automatically or at the election of one of the parties. [41] Delivering one unit of flyable technology demonstrator on or before the scheduled date is a condition precedent which must be fulfilled before any contract is concluded at all. And it was not fulfilled. [Emphasis added]

Further the SSA expressly provides for the effect of a non-fulfilment of the Conditions Precedent: -

2.2 Termination when Condition Precedent not satisfied Subject to any mutual extensions by the Parties hereto, in the event that any of the Conditions Precedent (to the extent that it has not been waived) set out in clause 2.1 is not fulfilled within six (6) months from the date of this Agreement, or such other extension of time as the Parties may mutually agree in writing, all obligations of the Parties under this Agreement shall terminate and no Party shall have any further claim against the other, save for any antecedent breach. Upon the termination as herein described, the Vendor shall refund or cause to be refunded, all monies paid by the Purchaser, within seven (7) days of such termination.

2.6 Effect of Termination Upon the termination of this Agreement in accordance with this clause 2.2, this Agreement shall thereafter cease to have any effect and shall become null and void and neither of the Parties shall have any further claims against the other save and except for any antecedent breach. Upon the termination as herein described, the Vendor or the Vendor’s Solicitors (as defined hereinafter) shall refund or cause to be refunded, all monies paid by the Purchaser, within seven (7) days of such termination. [Emphasis added] Application to facts

It is clear from the two letters written by the defendant’s solicitors dated 16-03-2018 [Bundle B1, Page 206] and dated 20-07-2018 [Bundle B1, Page 216] that the Conditions Precedent have not been fulfilled at the time of termination.

In any event the defendant has failed to adduce evidence that he had fulfilled all the Conditions Precedent. Under cross-examination, the defendant had so admitted. I shall just illustrate with some examples- Clause 2.1 (b) of the SSA - No Evidence that it has been fulfilled

The defendant has pleaded and testified that Clause 2.1(b) was fulfilled, i.e. that the defendant had obtained a resolution passed by the board of directors and shareholders of Tiara View consenting to the sale of the Shares. [See paragraph 12 of the Defence and Counterclaim [Bundle IP, Page 20] (2) and Question & Answer No. 6 [WS-SD1, Page 2].

However, during cross-examination, when the defendant was asked to produce a copy of the said resolution, the defendant was unable to do so: - Excerpt from Cross-Examination [Page 84 Notes of Proceeding] Now, 2.1(b) it is for you to procure a resolution, the Director’s Resolution and the Board’s Resolution of Syarikat Tiara View, approving the SSA. Are you able to show us where is the resolution? It’s not. Don’t have the copy uh. Not in the bundle? Not in the bundle. Clause 2.1(c)(iv) of the Agreement - Admission of Non-Fulfilment of the Conditions Precedent

Clause 2.1(c)(iv) of the Agreement provides as follows: - “(iv) the written approval of the State Government for the alienation of Plot 1 (as defined under the Second Development Agreement) in favour of the Company and the issuance of Form 5A in respect of the same.” [See Bundle B1, Page 18]. Pages 71 – 72 Notes of Proceeding During Cross examination of DW-1:- So, I put it to you without a land title being issued under the name title Syarikat Tiara View, the Conditions Precedent Clause 2.1(c)(iv) has not been fulfilled? Yeah. Agree? Agree.

Based on the above, I accept the submissions and evidence set out in the plaintiff’s written submissions at paragraphs 34 to 55.

The Court of Appeal in Yakinline Marketing Sdn Bhd v Mayban Securities Sdn Bhd [2013] 5 MLJ 677, CA, held that conditions precedent must be construed strictly and where such conditions are not fulfilled by the stipulated date, and no further extension is granted, the agreement becomes void and any payment made under it must be refunded [at Page 687]: - “[27] The facts of this case show the existence of a contingent contract within the meaning of the Contracts Act 1950 wherein both parties to the contract had obligations to perform. Provisions relating to conditions precedent to be fulfilled within a given date have to be construed strictly. If the conditions precedent or any of them cannot be performed by the stipulated date, and no extension is given pursuant to the contract if so provided, the contract becomes void. Any deposit given consequently has to be refunded. [Emphasis added] Issue [2] Whether the plaintiff is entitled to terminate the SSA and a refund of the deposit?

Based on the law and facts I have set out above, this issue is answered in the affirmative. Issue [3] Whether the non-fulfilment of the Conditions Precedent was due to the plaintiff’s failure to pay a sum of RM 38,343,139.23 i.e. the Premium to the Kuala Terengganu Land Office being the requisite payment for the Alienation Application?

The evidence shows the plaintiff has no obligation to pay this Premium. It is not a term of the SSA. The premium was payable by Tiara View based on the letter from the Kuala Terengganu Land Administrator/Land Office to Tiara View dated 29-03-2018 in B 1 page 207.

During trial, the defendant expressly agreed that there is no term in the SSA requiring the plaintiff to pay the said premium: - Page 78 Notes of Proceeding [and not pages 71 - 72 as stated in PWS paragraph 102] Okay, I will take you back to the SSA at page B1/18, or rather B1/ 12- 40 the entire SSA. You agree with me the entire SSA, there is no term in the SSA, that says Plaintiff has to pay premium for alienation of land? It is not stated there, specifically stated there. … Page 83 Notes of Proceeding [and not pages 71 - 72 as stated in PWS paragraph 118] I will just put to the witness this proposition and just move on. Now Mr. Tung, I put it to you that, since you did not request for a clause in the SSA, to be inserted to impose an obligation upon the Plaintiff to pay for the land premium, I put it to you, it is not the intention of parties for the Plaintiff to pay for the land premium, you agree or disagree? Yeah, it is not stated in the Agreement. So, you agree it is not the intention of parties for the Plaintiff to pay the premium? Yeah Issue [4] Whether pursuant to Clause 3.5 of the SSA and the doctrine of business efficacy, there was a representation and/or warranty and/or implied term in the SSA that the plaintiff is required to pay the said Premium?

The wording of Clause 3.5 of the SSA does not support the defendant’s submission it is a representation and/or warranty and/or implied term in the SSA that the plaintiff is required to pay the said Premium.

This argument of the defendant is also contradicted by the clear admission in the two letters written by the defendant’s solicitors dated 16-03-2018 [Bundle B1, Page 206] and dated 20-07-2018 [Bundle B1, Page 216] that the Conditions Precedent have not been fulfilled at the time of termination. Entire Agreement clause

Clause 12 of the SSA [Bundle B1, Page 26] has an "Entire Agreement" clause which provides: -

ENTIRE AGREEMENT This Agreement and the agreements and other documents referred to herein contain the entire agreement of the Parties with respect to its subject matter. It constitutes the only conduct relied on by the Parties (and supersedes all earlier conduct by the Parties.

When an agreement has an ‘entire agreement’ clause, it precludes the reception by the Court of any collateral promise so as to defeat the expressed intention of the parties contained in a contract. It also excludes claims of oral representations when such claims are contrary to expressed covenants in an agreement. [See Bank Perusahaan Kecil & Sederhana Malaysia Berhad v Iskandar Zulkarnain Zainal Abidin [2013] MLJU 1648, CA, at [10]] and Harin Corp Sdn Bhd v Rimbun Tekad Premix (Terengganu) Sdn Bhd [2016] 3 MLJ 782, CA, at [21 - 24]].

The Court of Appeal in Bank Perusahaan Kecil & Sederhana Malaysia Berhad v Iskandar Zulkarnain Zainal Abidin [2013] MLJU 1648, CA, affirmed that an entire agreement clause precludes the reception of any collateral promise or oral representation inconsistent with the written terms [at Pages 5 - 6]: - [10] ...In this respect, it must be borne in mind that our Courts have always recognized an “entire agreement clause” in a contract as serving to preclude the reception by the Court of any collateral promise so as to defeat the expressed intention of the parties contained in a contract (see Macronet Sdn Bhd v. RHB Bank Sdn Bhd [2002] 3 MLJ 11). With respect, in our opinion, the same principle of law should be applied by our Courts so as to exclude claims of oral representations when such claims are contrary to expressed covenants in a hire purchase agreement...”

Issue 4 is answered in the negative.

For the reasons above, I allow the plaintiff’s claim in the Amended Statement of Claim at paragraph 14[a] for a refund of RM 250,000, paragraph 14[b] for interest at 5% p.a. on daily rest from 19-02- 2020 till full payment.

I dismiss the counterclaim.

I award costs of RM 50,000 to the plaintiff subject to allocatur. Dated: 31th October 2025 ……..…(signed)……………. Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) Counsel for plaintiff: Lai Yee Fan and Wong Yin Mei. Fyiona, Lai & Dennis Thong (Kuala Lumpur) Counsel for defendant: Muthu Suppiah and S. Sivashankar. S Muthu Partnerships (Kuala Lumpur) CASES REFERRED TO: 1) Bank Perusahaan Kecil & Sederhana Malaysia Berhad v Iskandar Zulkarnain Zainal Abidin [2013] MLJU 1648, CA. 2) Harin Corp Sdn Bhd v Rimbun Tekad Premix (Terengganu) Sdn Bhd [2016] 3 MLJ 782, CA. 3) Ideal City Development Sdn. Bhd. v Dynamic Mould Sdn. Bhd. [2003] 3 MLJ 152, CA. 4) Langkawi R&D Academy Sdn Bhd v Ketua Setiausaha, Kementerian Pertahanan Malaysia & Ors [2013] 3 CLJ 1006, CA. 5) Macronet Sdn Bhd v. RHB Bank Sdn Bhd [2002] 3 MLJ, 11. 6) Yakinline Marketing Sdn Bhd v Mayban Securities Sdn Bhd [2013]