Ong Kim Beng v Trutz Bernhard Winter (WA-B52NCC-461-07/2021)

The Plaintiff and the Defendant were interested in purchasing the said property. Both of them wanted to operate the 22 stories at Empire Damansara as a hotel. Triton Equity Sdn. Bhd. [5] The Plaintiff and the Defendant therefore set up Triton Equity Sdn. Bhd. (“TESB”), for it to operate as a hotel management company, wherein TESB had a postal address at 21B, Room 2 Jalan USJ 10/1C, 47620 UEP Subang Jaya.

From the incorporation of TESB on or around November 2011 until it was wound up by an order of the High Court of Malaya on 13.12.2018, the Plaintiff and the Defendant are the directors and equal shareholders of TESB for all intents and purposes. In or around 2012, the Plaintiff and the Defendant approached the developer of Empire Damansara, Mammoth Empire Estate Sdn. Bhd. (“Developer”) and proposed as follows: S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 a) The Plaintiff and the Defendant would be in charge of obtaining and / or sourcing for buyers for the 22 stories and the 4 podium stories. b) The Developer was to sell the entire building to the buyers that the Plaintiff and the Defendant found and to give an en bloc discount for the convenience that the Developer derives from not having to source for potential buyers itself.

The Developer was agreeable to the proposal above and sold the entire building to the buyers that the Plaintiff and the Defendant found. The price listed in the Sale and Purchase Agreements for the 22 stories was RM82,618,650.00 (“SPA Price”), but the Developer was willing to sell the entire 22 stories for RM50,600,000.00, without fittings and fixtures.

As such, the “en bloc” discount given by the Developer to TESB was approximately RM23,756,785.00, after first deducting the 10% of the SPA Price as a rebate already agreed to by the Developer, which discount was given in the form of Credit Notes, to be applied as it wished.

TESB applied a portion of the Credit Notes given by the Developer to pay the down payment for the purchase of the 22 stories, which it then collected from the respective buyers, supposedly for the renovation and operational costs of the hotel. The hotel later known as Qliq Hotel. S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 Purchase of the 4 Stories at Empire Damansara [10] In or around 1.2.2012, the Plaintiff and the Defendant had set up 4 companies to purchase 4 stories, out of the 22 stories at Empire Damansara. The companies that were set up and their respective stories are as follows: Company Storey Evening Frontier Sdn Bhd (“EFSB”) A20-01 Omega Delight Sdn Bhd (“ODSB”) A21-01 Retro Summit Sdn Bhd (“RSSB”) A23-01 Joyfill Dream Sdn Bhd (“JDSB”) A23A-01 A23A-02 A23A-05

EFSB, ODSB, RSSB and JDSB are hereinafter collectively referred to as the “4HRF Companies” and stories A20-01, A21-01, A23-01, A23A-01, A23A-02 and A23A-05 are hereinafter collectively referred to as the “4 Hotel Room Floors”. [12] The Plaintiff and the Defendant are the directors and shareholders of EFSB, ODSB, RSSB and JDSB, with the Plaintiff holding 71% and the Defendant holding 29% of the shares in each of these companies based on the proportion of their individual advances when the companies were set up. [13] The 4HRF Companies entered into management agreements with TESB. S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 5

The remaining 18 stories were bought by investors known to the Plaintiff. Along with EFSB, ODSB, RSSB and JDSB, these investors each entered into a management agreement with TESB. [15] The terms of the management agreements between the 4HRF Companies with TESB for the management of the 4 Hotel Room Floors were identical to those entered into between TESB and the other investors. [16] Under the management agreement, TESB was appointed to manage and operate the 22 stories as a hotel (known as the Qliq Hotel), and TESB would pay a guaranteed rental return (“GRR”) to the investors. [17] Qliq Hotel commenced business in or around March 2015. [18] It was agreed between the Plaintiff and the Defendant that TESB would utilize the revenue generated from operating Qliq Hotel to pay the GRR to the investors, as well as for the hotel’s operational costs. Purchase of the 4 Podium Stories at Empire Damansara [19] In or around 2012, the Plaintiff and the Defendant had set up 4 companies to purchase the 4 podium stories for retail at Empire Damansara. [20] The companies that were set up and their respective podium storey are as follows: Company Storey Newforce Capital Sdn Bhd (“NCSB”) LG Citypoint Equity Sdn Bhd (“CESB”) G Citypoint Assets Sdn Bhd (“CASB”) L1 S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 6

NCSB, CESB, CASB and CSSB are hereinafter collectively referred to as “Podium Companies”. The Plaintiff and the Defendant initially held the Podium Companies in equal portions (the Defendant was registered as holding 29%, but had trustees holding the remaining 21% on trust for him) and were the first directors of the Podium Companies, until they sold 10% of the shares in the Podium Companies (taken from the Plaintiff’s and Defendant’s portions equally) to one Francis Chukuemeka Minah (“FCM”) in 2015 and the Defendant sold 6% of the Podium Companies (from his remaining 45% share) to one Ku Kim Huat (“KKH”) in 2016.

FCM and KKH also became directors of the Podium Companies on or around the same time they became shareholders of the same.

On and/or around late 2016, there were differences and disagreements vis-à-vis the management of TESB between the Plaintiff and Defendant.

That led to the Plaintiff and Defendant seeking to work towards a split of the business and management. The purported split was to crystalize and/or come into effect on 1.1.2017. [25] The final objective of the split among other was as follows: Citypoint Strategies Sdn Bhd (“CSSB”) L2 S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 a) The Plaintiff and Defendant were to be removed as guarantor for the loan(s) taken by TESB dated 30.8.2013 for RM9,185,000.00 from United Overseas Bank (Malaysia) with podium floor L1 and L2 being collateral. b) The Plaintiff and the Defendant had to raise funds to redeem the said loan. c) With regard to TESB and the 4HRF Companies, the Plaintiff was to transfer his shares in these companies to the Defendant. The Defendant allowed the Plaintiff to take back the Plaintiff’s advances that was owed to him by TESB in 2017. d) The Defendant would then be in charge of the management of the 4 Hotel Room Floors and TESB. As the Defendant had the benefit of utilizing the revenue generated by the 4 Hotel Room Floors and TESB, the Defendant was to make repayments of the loan facilities taken out for the 4 Hotel Room Floors and repayment obligations of TESB. e) The Plaintiff would be in charge of the management of two podium stories at the Empire Damansara real estate, level G and level 2. As the Plaintiff had the benefit of utilizing the revenue generated by level G and level 2, the Plaintiff was to make repayments of the loan facilities taken out for level G and level 2. f) The Defendant was to transfer his shares in the companies for level G and level 2 to the Plaintiff. g) The Defendant, Francis Chukuemeka Minah (SD2) and one Ku Kim Huat were to jointly own and manage the other 2 podium stories at the Empire Damansara real estate, level LG and level S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 1 and thus had the benefit of utilizing the revenue generated by these levels. Winding Up of TESB in December 2018 [26] On 26.9.2018, a winding up petition was filed by the investors for the 18 stories against TESB for TESB’s failure to pay the GRR due to them in the Kuala Lumpur High Court Winding Up Petition No.: WA-28NCC-898- 09/2018 (“Winding Up Petition of TESB”).

The Plaintiff had opposed to the Winding Up Petition of TESB by filing an Affidavit in Opposition to the Petition. Conversely, the Defendant had supported the Winding Up Petition of TESB by filing an Affidavit in Support of the Petition

Subsequently, TESB was wound up by an Order of the High Court of Malaya dated 13.12.2018.

After TESB was wound up, the Defendant and/or TESB stopped making the repayments towards the loan facilities for the 4 Hotel Room Floors. Entry of Management Agreement(s) with Charis Hotels Sdn. Bhd. in November 2018 S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 9

On or around 7.11.2018, the Defendant caused the 4HRF Companies to each enter into a Management Agreement with Charis Hotels Sdn. Bhd. (“CHSB”), wherein CHSB was appointed to manage and operate Qliq Hotel, in place of TESB. This is due to the winding up petition filed against TESB.

The Defendant had unilaterally executed the Management Agreement(s) dated 7.11.2018 on behalf of the 4HRF Companies with CHSB.

At all material times, the Defendant has a direct/indirect interest in CHSB.

Following the entry of the Management Agreement(s) between the 4HRF Companies and CHSB, the Defendant had instructed CHSB to pay all payment due to the 4HRF Companies under the Management Agreement(s) into the Defendant’s personal account, on the basis that the 4HRF Companies do not have a current or checking account.

Pursuant to the Management Agreement(s), CHSB had paid a total of RM185,469.81 into the Defendant’s bank account, purportedly for the amounts due to the 4 HRF Companies from CHSB for December 2018 to September 2019.

Following the winding up of TESB and despite receiving payments from CHSB, the Defendant has failed, refused and/or neglected to make any S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 repayment of the loan facilities granted by the banks in respect of the 4 Hotel Room Floors.

As a result of the Defendant’s failure, refusal and/or neglect to make any repayment of the loan facilities granted by the banks in respect of the 4 Hotel Room Floors, the Plaintiff had made the monthly repayment for the same, from December 2018 to January 2021.

As at 30.1.2021, the Plaintiff had paid the sum of RM802,541.45, for the repayment of loan facilities in respect of the 4 Hotel Room Floors.

Further or in the alternative, the Plaintiff pleads that the Defendant had been unjustly enriched from the Plaintiff’s repayment of the 4 Hotel Room Floors’ loans facilities since 20.12.2018.

Plaintiff and the Defendant are jointly bound to repay the loan facilities for the 4 Hotel Room Floors, in equal portions. Defendant has failed, refused and/or neglected to make any repayment to the loan facilities for the 4 Hotel Room Floors. The Plaintiff had made repayments of the loan facilities as part of his repayment obligation, as well as on behalf of the Defendant.

Plaintiff claims from the Defendant as follows: a) The sum of RM802,541.45 to be paid by the Defendant to the Plaintiff; b) General damages; S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 c) Interest on the sum of RM802,541.45 and on any further general damages awarded at the rate of 5% per annum from the date of filing of this suit to the date of full and final settlement; d) Costs; and e) Such further and/or other relief as this Court deems fit and proper to grant.

Plaintiff also claims for alternative prayers as follows: a) A declaration that the Defendant has been unjustly enriched for the amount of RM401,270.73 at the expense of the Plaintiff or such other sum or sums as the Court deems fair, just and reasonable; b) An order that the Defendant is to restore the benefit received in sum of RM401,270.73 to the Plaintiff or such other sum or sums as the Court deems fair, just and reasonable; c) General damages; d) Interest on the sum of RM385,891.82 RM401,270.73 and on any further general damages awarded at the rate of 5% per annum from the date of filing of this suit to the date of full and final settlement; e) Costs; and f) Such further and/or other relief as this Court deems fit and proper to grant. Defendant’s Defence and Counterclaims S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 12

Defendant asserts that the split agreement was never completed and the terms for the said split agreement were never concluded as Plaintiff kept making new demands and changes. The Plaintiff also refused to sign and finalized the split agreement.

Since the split agreement never materialized, Defendant is still holding 29% of shares only in 4 hotel room floors. Therefore, Defendant is only required to make repayments for the said loan facilities based on Defendant's shareholding in the 4 hotel room floors.

There are no terms in the said loan facilities which state that Plaintiff and Defendant need to make repayments in equal portions. Repayments for all the said loan facilities need to be made according to the shares that are being held by Plaintiff and Defendant in the 4 hotel room floors.

Defendant also asserts that Defendant has more than fulfilled his responsibilities by repaying the loan facilities in the amount of RM396,788 between 2012 and 2016 and advancing RM860,000 to TESB in 2017, which was used for the loan facilities as the company was making around RM4 million annual losses due to its high GRR commitments to investors. [46] In addition, Defendant also has no obligation to restore the repayments paid by the Plaintiff, and Plaintiff does not repay the said loans for and on behalf of Defendant, it is also the responsibility of Plaintiff to repay the loans as the majority shareholder for 4 hotel room floors. S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 13

Defendant has made a repayment from November 2012 to August 2016 amounting to RM 396,788.05. The Defendant also previously advanced money for RM 860,000 in 2017 into TESB’s account wherein the said money has been used for repayments of the said loan facilities.

According to the Defendant’s record, the Plaintiff also paid the sum of RM 90,000. Thus, since the Plaintiff claim in the statement of claim is for RM 802,541.45, Plaintiff actually had paid RM 892,541.45. However, due to the Plaintiff’s own failure, refusal and/or negligence to not make repayment for the said loan facilities from end 2018 to 2019, hence, there are late payment interest charges for an estimated amount of RM229,400. This amount should be deducted from the total repayment made by the Plaintiff. Hence the total amount of the Plaintiff repayment is only RM 633,141.45 (RM 892,541.45 - RM229,400.00).

Repayments made by Plaintiff and Defendant are as follows: - Calculation for Total Repayment made by Plaintiff (RM) Calculation for Total Repayment made by Defendant (RM) Total Repayments made by Plaintiff and Defendant (RM) RM 802,541.45 (Statement of Claim) + 90,000 (Defendant's records) - 229,400 (interest charges) RM 663,141.45 RM 396,788.05 (based on paragraph 59 Statement of Defence) + RM 860,000 (advance money) = 1,256,788.05 RM 1,919,929.50 S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 14

The percentage for repayment that has been made by Plaintiff is about 34.5% from the total amount of repayments made by Plaintiff and Defendant that is RM1,919,929.50. Whereas for Defendant, the percentage of repayment that has been made is for 65.5% from RM1,919,929.50.

As the Defendant only holds 29% of shares only in the said 4 hotel room floors, the Defendant is only required to pay for RM556,779.56 only. Defendant is claiming for overpayment of RM700,008.49 from Plaintiff as the total amount paid by Defendant is RM1,256,788.05 which is more than the amount that Defendant need to be paid.

Defendant had made an overpayment for the said loan facilities in which it is not in accordance with Defendant's shareholding in 4 hotel room floors.

Defendant also pleads that Defendant is liable to claim against Plaintiff to restore the overpayment of loan repayments made by Defendant on behalf of Plaintiff as Plaintiff had unjustly benefitted from the repayments made by Defendant. [55] Defendant prays for the following orders to be made against Plaintiff as his Counterclaim: - a) Plaintiff to pay the sum of RM 700,008.49 to the Defendant; b) General damages that deem fit and appropriate by this Court; S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 15 c) Interest on the sum of RM700,008.49 and on any further general damages awarded at the rate of 5% per annum from the date of filing of this suit to the date of full and final settlement; d) The Defendant is given the liberty to apply for any order and/or relief that deems fit and appropriate by this Court during or after the Trial of this proceeding; e) Any further relief that deems fit and fair by this Court; and f) Costs.

The Plaintiff called one witness during the trial while the Defendant called three witnesses. The four witnesses are: a) PW1 - Ong Kim Beng (Plaintiff) b) DW1 - Trutz Bernhard Winter (Defendant) c) DW2 - Francis Chukuemeka Minah (Director and shareholder of 4 Podium Companies) d) DW3 - Lin Yong Sheng, Desmond (Investors of TESB)

The court on 22.10.2024 after hearing all the witnesses’ testimony, perusing all the documents involved and listening to the submissions of the parties, on the balance of probabilities decided that the Plaintiff successfully proved his case on the alternative claim. The Court allowed Plaintiff’s alternative prayers except general damages. The costs given to the Plaintiff is RM 10,000. The Court also dismissed the Defendant’s counter’s claim with costs RM 10,000. S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 16

Not satisfied with the above decision, the Defendant’s file an appeal against the whole of the Court's decision. THE COURT FINDING [59] In general, Plaintiff pleaded cases is that the Plaintiff’s claim against the Defendant for the sum of RM802,541.45 advanced by the Plaintiff on the Defendant’s behalf from December 2018 to January 2021, as a result of the Defendant’s failure to repay the loan facilities jointly obtained by the Plaintiff and the Defendant personally to finance the purchase of 4 floors at the Empire Damansara real estate.

Alternatively, the Plaintiff’s claim against the Defendant is for the sum of RM401,270.73, i.e. half of the payment made by the Plaintiff, being the Defendant’s portion of the repayment obligations for the loan facilities/unjust benefit the Defendant derived from the Plaintiff’s repayment of the loan facilities.

The Defendant’s pleaded case is that the loan repayment ought to be made based on the parties’ shareholding in the 4HRF i.e. Plaintiff 71% and Defendant 29%, and the Defendant had purportedly overpaid his portion for the loan repayments. The Defendant also filed a counterclaim against the Plaintiff, for the sum of RM700,008.49 purportedly overpaid by the Defendant. Issues to Be Tried S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 17

Both Plaintiff and the Defendant’s filed their own issues to be tried. The Plaintiff’s issues to be tried as per enclosure 4 are as follows: 1) After 1.1.2017, is the Defendant responsible for the repayment of the loan facilities granted in respect of the 4 Hotel Room Floors? 2) Whether the Defendant had failed, refused and/or neglected to make any repayment of the loan facilities granted in respect of the 4 Hotel Room Floors from December 2018 to January 2021? 3) If the answer to issue no. 2 above is yes, whether the Defendant is liable to pay the sum of RM802,541.45 to the Plaintiff? 4) Further and in the alternative to issues no. 2 and 3 above, whether the Defendant had been unjustly enriched / unjustly benefitted from the Plaintiff's repayments of the 4 Hotel Room Floors' loan facilities from December 2018 to January 2021? 5) If the answer to issue no. 4 above is yes, whether the Defendant is liable to restore the loan repayments paid by the Plaintiff from December 2018 to January 2021, in the sum of RM401,270.73 to the Plaintiff?

The Defendant's issues to be tried are as follows: A. Plaintiff's Claim 1) Whether the Defendant has the responsibility to make the repayment of the loan facilities from December 2018 to January 2021? S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 2) Whether the Defendant is indebted to the Plaintiff for the amount claimed? 3) Whether the repayment of the loan facilities in respect of the 4 Hotel Room Floors should be made based on the shareholding held by the Plaintiff and Defendant in the said 4 Hotel Room Floors? 4) Whether there was a split that occurred between the Plaintiff and Defendant? 5) Whether the terms of the said split have been agreed and concluded between the Plaintiff and Defendant? 6) Whether the Indemnity Letter dated 27.06.2017 is valid? 7) Whether this proceeding is a multiplicity of proceedings as the Plaintiff had filed suit No. WA-22NCVC-93-02/2021 which involves the same facts and the same parties. B. Defendant's Counterclaim 8) Whether the Defendant had made repayments towards the loan facilities granted in respect of the 4 Hotel Room Floors as stated in the Defendant's Counterclaim? 9) Whether the Plaintiff had been unjustly enriched/unjustly benefitted from the repayments made by the Defendant in respect of the 4 Hotel Room Floors' loan facilities? 10) Whether the Plaintiff is liable to restore the sum of RM700,008.49 to the Defendant? S/N 8K8uG2qqekGstottNXXdgg **Note : Serial number will be used to verify the originality of this document via eFILING portal 19

It is trite in law that the burden of proof rests throughout the trial is on Plaintiff. This is stated in section 101 and 102 Evidence Act 1950. Section 101. Burden of proof.

Whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. [65] In the case of Tenaga Nasional Berhad (Formerly Lembaga Letrik Negara Tanah Melayu) v. Perwaja Steel Sdn Bhd (Formerly Perwaja Terengganu Sdn Bhd) [1995] 4 CLJ 670 where His Lordship Low Hop Bing stated in page 672: “Under s. 101(1) of the Evidence Act 1950, whoever desires the Court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist. In other words, the plaintiff must prove such facts as the plaintiff desires the Court to give judgment as to its right to claim against the defendant or defendant's liability to pay the plaintiff. The burden of proof is on the plaintiff: s. 101(2). In order to succeed here, the plaintiff must prove its claim affirmatively.” [66] In the case Selvaduray V Chinniah [1939] 1 MLJ 253 which states as follows:

“….It seems to me that that the propositions ought to be stated thus: the plaintiff may give prima facie evidence which, unless it be answered S/N 8K8uG2qqekGstottNXXdgg either by contradictory evidence or by the evidence of additional facts, ought to lead the jury to find the question in his favour: the defendant may give evidence either by contradicting the plaintiff’s evidence or by proving other facts: the jury have to consider upon the evidence given upon both sides, whether they are satisfied in favour of the plaintiff with respect to the question which he calls upon them to answer; if they are, they must find for the plaintiff; but if upon the consideration of the facts they come clearly to the opinion that the question ought to be answered against the plaintiff, they must find for the defendant…….” (page 255)

“Take the evidence before you; if your minds are made up one way or another, there will be no difficulty; but if after consideration you remain in doubt how the questions which I put to you ought to be answered, I tell you that the burden of proof lies upon the plaintiff, and if either the plaintiff’s evidence or the defendant’s evidence added to the plaintiff’s, has really left you in doubt, the plaintiff has failed to satisfy the burden of proof which lies upon him.” (page 258) [67] Plaintiff and Defendant play their own role in this case. Plaintiff and Defendants make investments and forms few companies in doing their business which is the mainly known as Qliq Hotel. [68] The court focus on the claim by the Plaintiff which is the payment of the loan facilities for the 4 hotel rooms from December 2018-January 2021. The surrounding facts such as Empire Building, TESB, the others companies S/N 8K8uG2qqekGstottNXXdgg are the supporting facts which can clarify the relationship between the parties and their so-called actions in this dispute. [69] The Court agrees that there was disagreement between Plaintiff and Defendants regarding the management of their investments and properties. Those agreements lead to the splitting agreement. Parties do intend to split their own affairs but, the split agreement is not materialized. Therefore, once the split agreement or so-called arrangement failed, the parties is putted to their original position. [70] Plaintiff and Defendants make the arrangement that their loan in establishing companies is handle by TESB. The arrangement was going quite well especially about the payment of the loans but when TESB been wound up, so many things changed drastically. [71] Defendant admitted that Plaintiff had to make repayment of the loan facilities as a result of insufficient repayments were made towards the loan facilities for the 4 Hotel Room Floors after TESB was wound up. At the same time the Defendant admit that the Plaintiff also paid RM 90,000 which not been claim by the Plaintiff but that amount was in Defendant record. [72] The court only focus on the timeline of December 2018-January 2021. The Defendant’s counterclaim involved the payment prior the winding up of the TESB and it involved the arrangement prior to the wind-up of the TESB. The court not consider that counterclaim as it happens before the winding S/N 8K8uG2qqekGstottNXXdgg up, as the court satisfied that the parties make their own arrangement for the business before the winding up of TESB. [73] Plaintiff and Defendant has their own role in the management of their business and the companies involved. They are directors and also the shareholder. However, Plaintiff’s and the Defendant’s role and act in this case must be differentiate as an individual and not the director and shareholder. This is because the loan in issue here was taken as their own personal capacity. The Plaintiff’s claim in this case also against the Defendant’s individual capacity. Therefore, the court seen this matter as individual capacity not as director and the shareholder. [74] The court rejected the Defendant’s counterclaim for the repayment of the loan should be based on their shares in the 4 Hotel Room Floors i.e. Plaintiff 71% and Defendant 29%. This is because the loan taken base on the personal capacity. The obligation to pay the bank loans was to be shared equally between the Plaintiff and the Defendant. Parties made some arrangement for the TESB to pay the monthly installment of the said loan. However, since the arrangement of the repayment of the said loan was no longer in effect due to TESB being wound up, the position of both Plaintiff and Defendant are to be restored back, to jointly and severally liable for the repayment of the loan facilities for the 4 Hotel Room Floors. This is due to the fact that the both Plaintiff and the Defendant had taken out loan facilities to finance the purchase of the 4 Hotel Room Floors, and the loan facilities were jointly given to the Plaintiff and the Defendant personally. S/N 8K8uG2qqekGstottNXXdgg [75] Section 44 of the Contracts Act 1950 provides as follows: Any one of joint promisors may be compelled to perform

When two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any one or more of the joint promisors to perform the whole of the promise. Each promisor may compel contribution

Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract. Sharing of loss by default in contribution

If any one of two or more joint promisors makes default in the contribution, the remaining joint promisors must bear the loss arising from the default in equal shares. [76] The Federal Court in the case of Lembaga Kumpulan Wang Simpanan Pekerja v Edwin Cassian a/l Nagappan @ Marie [2021] 5 MLJ 253 held as follows: [25] Section 44 of the Contracts Act is in pari materia with s 43 of the Indian Contract Act 1872. In Re Vallibhai Adamji, BJ Wadia observed that the provision: … makes the liability on all contracts joint and several, and allows the promisee to sue one or more of the several joint promisors as he chooses, and excludes the right of any one of them to be sued along with his co-promisor or co-promisors. S/N 8K8uG2qqekGstottNXXdgg [26] In summary therefore, unless a contrary intention is expressed in the contract, all joint contracts effectively impose a full liability for the debt on each of the promisors, by virtue of s 43 of the Indian Contract Act 1872 [27] Accordingly, so long as a judgment debt remains unrealised, the judgment creditor is entitled to proceed against one or any number of judgment debtors to secure the performance of an obligation in its entirety. [28] …s44(2) of the Contracts Act 1950 which allows the promisor who has paid the full promised amount to claim contribution from the joint promisor for an equal contribution. This means that the liability for the full promised sum is shared equally between all the promisors. However, that is between the promisors, inter-se. It does not affect the rights of the creditor which are governed by s 44(1) of the Contracts Act 1950. [77] According to s44(1) of the Contracts Act 1950, the banks had the option to pursue either the Plaintiff and/or the Defendant for the repayment of the loan facilities for the period from December 2018 – January 2021. [78] Plaintiff paid the said loan during the said period and this was admitted by the Defendant. Defendant admitted that the Plaintiff paid RM 90,000 more. Therefore, the Plaintiff, being the party who had made repayments of the loan facilities from December 2018 – January 2021, is entitled under s44(2) of the Contracts Act 1950 to claim for contribution from the Defendant S/N 8K8uG2qqekGstottNXXdgg for the amount that he had advanced on behalf of the Defendant, in the sum of RM401,270.73. [79] The court also agreed that the Defendant had been unjustly enriched from the Plaintiff’s repayment of the 4 Hotel Room Floors’ loans facilities from December 2018 to January 2021, in the sum of RM401,270.73. This is because the loan is originally a joint liability on 50-50 basis. Plaintiff and the Defendant are jointly bound to repay the loan facilities for the 4 Hotel Room Floors in equal portions. [80] The Federal Court case of Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441 held as follows: [110] Restitution simply means that a party who has received a benefit must restore the benefit received by him. The theoretical foundation of the right to restitution remedy as it is understood today is that it is founded on the law of unjust enrichment which fall outside the domains of contract and tort. The law of contract/tort and the law of unjust enrichment are conceptually distinct. Unjust enrichment describes a cause of action. On the other hand, restitution describes a remedy. Restitution as a response to wrongdoing is therefore a different topic from restitution as a response to unjust enrichment (see Goff & Jones on The Law of Unjust Enrichment para 1-04). The courts have found it necessary to make available, independent of the law of contract and civil wrongs, for the restoration of benefits on the grounds of unjust enrichment. S/N 8K8uG2qqekGstottNXXdgg [119] … we now turn to consider whether the defendant has made out a cause of action in unjust enrichment: the plaintiff has been enriched, that this enrichment was gained at the defendant's expense, that the plaintiff's enrichment at the defendant's expense was unjust, and whether there are any special defences to the claim. [81] The Defendant, from December 2018 onwards has failed to make any repayment to the loan facilities for the 4 Hotel Room Floors. As a result, the Plaintiff had made repayments of the loan facilities as part of the Plaintiff’s repayment obligation, as well as on behalf of the Defendant. The Defendant had therefore unjustly benefited from the repayments made by the Plaintiff, at the Plaintiff’s expense. [82] Thus, Defendant is liable to restore the loan repayments paid by the Plaintiff on behalf of the Defendant from December 2018 – January 2021, in the sum of RM401,270.73. The Defendant’s Counterclaim [83] The Defendant’s counterclaim against the Plaintiff is for the purported overpayment by the Defendant in the sum of RM700,008.49. It is to be noted that the figure of RM700,008.49 is derived by the Defendant by setting off the following items: a) The Defendant’s advancement of RM860,000.00 into TESB’s account in 2017, for the repayment of the loan facilities; and b) Payment in the sum of RM396,788.05, being repayment of the loan facilities from 14.11.2012 to 1.8.2016; S/N 8K8uG2qqekGstottNXXdgg against the Plaintiff’s repayment of loan facilities in the sum of RM802,541.45 and the Plaintiff’s repayment of RM90,000.00 72 for the loan facilities (after alleging that the Plaintiff is liable for the late payment interest charges on the loan facilities in the purported sum of RM229,400.00), and apportioning the same according to the parties’ shareholding in the 4HRF Companies. [84] As stated earlier, the Court emphasis on the time-line between December 2018 – January 2021. The other date other than the claimed date is irrelevant as parties had make arrangement between themselves for the TESB to handle the matter and the issues arise after TESB being wound up. [85] At the same time, the Defendant’s advancement of RM860,000.00 to TESB in 2017, was paid into TESB’s accounts and was used for among others, to pay salaries, maintenance fees, utility charges and GRR to the other investors. [86] The 4HRF Companies is a different company from the TESB company. The Court agreed with the Plaintiff’s submission that Defendant ought to recover the same from TESB, not the Plaintiff. [87] Defendant had never claimed that the Plaintiff owes him the sum of RM396,788.0578, i.e. the loan repayments that the Defendant had made from 14.11.2012 to 1.8.2016 before this. Therefore, the counterclaim regarding this repayment is afterthought. CONCLUSION S/N 8K8uG2qqekGstottNXXdgg [88] Based on the reasons stated above, the Court allowed Plaintiff’s claim for the alternative’s prayers. It is been declared that the Defendant has been unjustly enriched for the amount of RM401,270.73 at the expense of the Plaintiff and therefore is order to restore the said sum to the Plaintiff. The Court also dismiss the Defendant’s counterclaim as according to the Court, the counterclaim was mixed up due to the incorrect timeline and afterthought. [89] The Court dismissed the claim for general damages as the parties failed to bring any evidence regarding the general damages. The Court also allowed the interest to be claimed and order RM 20,000 as costs to be paid to the Plaintiff accordingly. Prepared by: WAN NOR AKLIMA BT WAN SALLEH, Session Court Judge, Session Court Kuala Lumpur Dated: 23.12.2024 PARTIES BEFORE THE COURT: Solicitor for the Plaintiff: Mr. Kenneth Koh Zhong Wey (Counsel) together with Mr. Poon Wei Ying S/N 8K8uG2qqekGstottNXXdgg [Messrs. Nadzarin Kuok Puthucheary & Tan] Solicitor for the Defendant: Mr R Rishi together with Mr Alvin, Miss Calise Lee, and Miss Sharifah Dayana (PDK) [Messrs. Daljit Singh Partnership] S/N 8K8uG2qqekGstottNXXdgg