Preferred Synergy Sdn Bhd v Beta Tegap Sdn Bhd (WA-22NCC-256-07/2016)

The Government of Malaysia awarded a contract to the 30 Defendant to monitor and capture images of traffic offences (‘AES Contract’) for a period of 66 months with effect from 1/3/2012. Subsequently, on 14/8/2012, the Plaintiff and Defendant entered into the Agreement for the purported 2 purpose of leasing and management of vehicles titled 5 “Agreement between Preferred Synergy Sdn Bhd (‘the Company’) and Beta Tegap Sdn Bhd (‘the Operator’) for the leasing and management of vehicles for Beta Tegap Sdn Bhd’s contract for the automated enforcement system (‘AES’) (‘the Agreement’) (Exh.A-1, pp.1-24, Affidavit of the 10 Defendant affirmed by Zairuddy Zainal on 9/9/2016). The vehicles were to be used by the Defendant for the purpose of performance of its obligations under the AES Contract. The Agreement was prepared by the solicitors of the Plaintiff.

(ii) The Agreement also contained, inter alia, the following 15 representations by the Plaintiff which materially induced the Defendant to enter into the Agreement:

The Plaintiff is the legal and beneficial owner of the vehicles purportedly to be leased to the Defendant;

The Plaintiff has the right, title and ownership to 20 the vehicles purportedly to be leased to the

The Plaintiff has the power and the capacity to execute, deliver and perform the terms of the Agreement, including the purported leasing of the 25 vehicles and the granting of the Transfer Options. By the Transfer Options, the Defendant, at the end of the term of the Agreement, has an option to either own (i.e. purchase) the vehicles or return the vehicles to the Plaintiff in which case the 30 3 Defendant will be entitled to a rebate. If the 5 Defendant decides to purchase the vehicles, ownership of the vehicles will be transferred from the Plaintiff to the Defendant;

The execution, delivery and performance of the Agreement will not exceed the powers of the 10 Plaintiff or violate any provisions of the law. (‘Representations’)

(iii)

(iv) In or around December 2012, the Government of Malaysia suspended the implementation of the AES Contract.

On 5/7/2016, the Plaintiff commenced this action against the Defendant to enforce the Agreement and claims the following damages from the Defendant:

RM3,525,717.60 being the purported outstanding monthly lease charges for the vehicles, strobe light and windscreen cover;

RM346,897.50 being interest on the purported outstanding monthly lease charge;

RM18,791,556.04 being purported loss of profits allegedly caused by the Defendant’s alleged failure to take lease of the remaining 112 units of the vehicles;

RM2,900.00 being the purported outstanding traffic 30 4 summonses for the Vehicles. 5 Defendant’s arguments [3] The Defendant contended that:

The Agreement is voidable as the Plaintiff has defrauded and/or misrepresented to the Defendant of the 10 Representations contained in the Agreement;

(ii) The objects and considerations of the Agreement is unlawful and the Agreement is therefore void;

(iii) The Agreement is in reality not a leasing agreement but a hire-purchase agreement governed by the Hire Purchase Act 15 1967(‘Hire Purchase Act’). The Agreement is not in compliance with the Hire Purchase Act and is therefore void;

(iv) Even if the Agreement is valid, the parties are discharged from the Agreement as it has been frustrated by reason of suspension of the AES Contract. 20 [4] The Defendant’s Re-Amended Counterclaim against the Plaintiff is for, inter alia,

Rescission of the Agreement for reasons of fraud and/or misrepresentation;

Declaration that the Agreement is null and void ab initio for the reasons set out in paras 3(ii) and (iii) above;

Declaration that the Agreement was frustrated and the parties be discharged from the Agreement from January 2013 onwards. 30 5 5 Findings Plaintiff’s application under O.14 of the ROC 2012 (encl.4) [5] Vide a Notice of Application dated 27/7/2016 (encl.4) the Plaintiff applied for summary judgment pursuant to O.14 of the ROC 10 2012 against the Defendant for the relief reproduced in para 2v(a),

and (d) above. The Defendant opposed the Plaintiff’s summary judgment application on grounds contained in para 3(i) to (iv) above. [6] For the purpose of this application, I am satisfied the 15 preliminary requirements have been complied with ie, (i) the defendant has entered appearance; (ii) the statement of claim must have been served on the defendant; and (iii) the affidavit in support of the application must comply with the requirements of r. 2 of O.14 of the ROC 2012. Upon these considerations being satisfied, the 20 plaintiff will have established a prima facie case and it comes entitled to judgment and the burden shifts to the defendant to satisfy the Court why judgment should not be given against him (per George Seah FJ in National Company For Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283 at p.285 e-f). 25 [7] It is also trite law that in a claim for summary judgment the burden is on the defendant to raise triable issues though a complete defence need not be shown; the determination of whether an issue is triable or not must necessarily depend on the facts or the law 30 arising in each case as disclosed in the affidavit evidence before the 6 Court (per Mohamed Azmi SCJ in Bank Negara Malaysia v Mohd 5 Ismail & Ors [1992] 2 CLJ Rep 186; [1992] 1 MLJ 400 at p.408 A-B and further on the same page E-F, the Supreme Court held - "Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in 10 itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable". [8] In the present case before me, it is pertinent to take note of important milestones which are significant in the determination of 15 the 3 applications before the Court namely -

From the exchange of affidavits for the summary application (encl.4) and the striking out application (encl.12), on 2/9/2016, the Plaintiff disclosed for the first time that the Vehicles were procured by the Plaintiff on hire purchase: 38 20 Toyota Hilux from BMW Credit (Malaysia) Sdn Bhd (‘BMW’) and 1 Toyota Hiace Van from Affin Bank Berhad (‘Affin’).

(ii) On 21/9/2016, the Defendant requested for a copy of the hire purchase agreements entered between the Plaintiff, BMW and Affin which the Plaintiff did not furnish.

(iii) On 24/10/2016 the Defendant filed the discovery application for production and inspection of copies of the same.

(iv) On 2/11/2016, the Plaintiff furnished the Defendant a copy of the 38 hire purchase agreements (‘BMW HPAs’) for 30 the 38 Toyota Hilux and the hire purchase agreement entered between the Plaintiff and Affin (‘Affin HPA’) for 1 Toyota Hiace Van. 7

Due to the production of copies of the BMW HPAs and 5 the Affin HPA, the Defendant on 3/11/2016 withdrew its application for discovery. [9] The BMW HPAs provide, inter alia, as follows:

The owner of the vehicles is BMW who has let the 10 vehicles to the Plaintiff as hirer (cl.1 of the BMW HPAs, exhs.A-8 & A-9 pp.22-678, Affidavit of the Defendant affirmed by Zairuddy Zainal on 14/11/2016).

Unless and until the payments under the BMW HPAs have been made and the option to purchase has been 15 exercised, the vehicles shall remain the absolute property of BMW and the Plaintiff shall not have any right or interest in the vehicles other than of a bailee (cl.14).

As the bailee, the Plaintiff is prohibited from, inter alia, selling, transferring, disposing of or encumbering the 20 vehicles or any right, title or interest therein or sub-letting or parting with possession of the vehicles or attempting, purporting or agreeing to do so and if the Plaintiff breaches this prohibition, the hiring under the BMW HPAs automatically terminates and the Plaintiff 25 shall no longer be in lawful possession of the vehicles (cl.8.1).

The schedules of payment in the BMW HPAs also show that the Plaintiff has not fully paid the instalments required under the BMW HPAs (Schedule). 30 (‘HP Prohibitions’) 8 5 [10] The Affin HPA also contains similar HP Prohibitions as set out in para 9 above in favour of Affin. The schedules of payment in the Affin HPA also show that the Plaintiff has not fully paid the instalments under the Affin HPA. 10 [11] In respect of the Representations in para 2(ii)(a) and (b) above, the Plaintiff submitted the Defendant’s complaint on ownership is a technicality as “It is commonplace when people buy cars under hire-purchase to claim to be “owners” of the cars, although technically in 15 law, the owners are the hire-purchase companies.” [12] In respect of the Representation in para 2(ii)(c) above, the Plaintiff submitted - “The Plaintiff did perform the Agreement by delivering the 39 vehicles 20 which were used uninterrupted by the Defendant. Any complaints about the Transfer Option is academic because the Transfer Option is not even applicable until the end of the Term, and in any event, by then the hire-purchase would have expired anyway”. 25 [13] In respect of the Representation in para 2(ii)(d) above, the Plaintiff submitted - “There is NOTHING in the Plaintiff’s Memorandum and Articles that prevent the execution, delivery and performance of the Agreement. The Defendant has shown NO OBJECTIONS by BMW or Affin, neither 30 has the Defendant complained about any interruption to its possession and use of the vehicles throughout”. [14] With respect I am of the view that it is not a technical argument nor can the Plaintiff’s other contentions in paras 12 and 13 above be 35 9 sustained for the following reasons:

The Plaintiff’s contention that BMW and Affin do not have objections to the Agreement between the Plaintiff and the Defendant is a bare allegation unsubstantiated by any evidence which is insufficient to raise a triable issue warranting the grant of leave to defend (see Microsoft Corporation v Yong Wai Hong [2008] 3 10 MLJ 309 (CA) at 319[10]; Welfare Printed Circuits Board Co. Ltd v Bumicircuit Technologies (M) Sdn Bhd [2012] MLJU 414 at para 10).

(ii) I agreed with the Defendant’s submission that the fact that the Defendant had the possession of the Vehicles without the consent 15 of BMW and Affin exposed the Defendant to the tort of conversion. I draw support from the case of R. H. Willis And Son v. British Car Auctions Ltd. [1978] 1 W. L.R.438 (English Court of Appeal) where the issue turns on whether the plaintiff owners (second hand car dealers) or the auctioneers is to suffer the loss caused by a hirer who 20 purchased the second hand car from the plaintiff owners on hire purchase but who later put the car on auction to the auctioneers claiming that it was his own car despite a warning in the hire purchase agreement that “The goods will not become your property until you have made all the payments. You must not sell them before 25 then”. Lord Denning (as he then was) at pp.441-442 held - “In answering that question in cases such as this, the common law has always acted on the maxim nemo dat quod non habet. It has protected the property rights of the true owner. It has enforced them strictly as against anyone who deals with the goods inconsistently with the 30 dominion of the true owner. Even though the true owner may have been very negligent and the defendant may have acted in complete innocence, nevertheless the common law held him liable in conversion. Both the “innocent acquirer” and the “innocent handler” have been hit hard”. 35 10 5

(iii) Furthermore it is an undisputed fact that the Affin HPA and 32 of the BMW HPAs were executed after the Agreement was executed by the Plaintiff and Defendant. In my judgment there is merit in the Defendant’s submission that if the Plaintiff’s allegation that BMW and Affin were aware of the Agreement and they do not 10 have objections to it is true, it would be reasonable to expect the HP Prohibitions to be omitted from the BMW HPAs and the Affin HPA. However the undisputed contemporaneous documentary evidence of the inclusion of the HP Prohibitions in the BMW HPAs and Affin HPA put to naught the Plaintiff’s contention that the BMW and Affin 15 are aware of the Agreement and consented to the leasing of the Vehicles by the Plaintiff to the Defendant. I reject the Plaintiff’s assertion rendering the issue not triable.

(iv) The Plaintiff contended the Defendant is estopped from relying on the issue of Plaintiff’s misrepresentation is 2 fold. 20 Firstly, the Plaintiff argued under the exception under s.19(1)(a) of the Contracts Act 1950 (‘Contracts Act’), the contract is not voidable as the Defendant had the means of discovering the fact of the hire purchase by ordinary diligence. S.19(1) and the exception thereunder read as follows: 25 “(1) When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. … 30 Exception - If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary 35 diligence”. 11 5 With respect in my judgment the Plaintiff’s argument is untenable. It is my considered opinion based on the case of Admiral Cove Development Sdn Bhd v Balakrishnan a/l Devaraj & Anor [2011] 5 MLJ 309, the material time to consider whether there is misrepresentation is at the time of execution of 10 the Agreement and not thereafter. The question of law before the Federal Court is “What relief is applicable in a case of innocent misrepresentation?” At 321[23] and [27] Mohd Ghazali FCJ (as he then was) (delivering the judgment of the Court) opined - “[23] In the instant appeal, it is a case of a contract for the purchase 15 and sale of property and the contract was completed when the purchaser, ie, the respondents received an executed conveyance and made payment for the purchase price. Since the conveyance has been properly executed by both the appellant and the respondents, we do not think that the latter can recover the purchase monies. Further, there was 20 a delay of more than four years before the respondents decided to pursue the action for rescission”. … [27] We do not think that the sale and purchase agreement for the property in the instant appeal can be set aside for innocent 25 misrepresentation after it has been completed by conveyance and payment of the purchase money. On the part of the appellant as vendor, it had conveyed the property with a good title and has delivered up actual possession or enjoyment thereof. The respondents as purchasers had accepted the conveyance of the property by taking possession and 30 paying the price. Innocent misrepresentation is no ground for setting aside an executed contract. What has been performed is what was agreed to be performed”. Reverting to the factual matrix of this present case, it is 35 undisputed that (i) the Vehicles’ registration cards were given to the Defendant at the earliest on 30/8/2012 which was after the execution of the Agreement (i.e 14/8/2012); (ii) the Plaintiff only furnished copies of the BMW HPAs and the Affin HPA to the 12 Defendant for the first time on 2/11/2016. Thus the Defendant 5 would not have known of the HO prohibitions prior to 2/11/2016. It is not for the Defendant to verify the ownership by BMW and Affin by conducting a ‘simple search’ as at 30/8/2012 as the Plaintiff suggested as there is no obligation of the Defendant to do so in the light of the Representations made by the Plaintiff. 10 Further, I find that the Plaintiff’s claim that the Defendant is aware of the BMW HPAs and the Affin HPA is but an afterthought for the reasons submitted by the Defendant - “(a) By the Defendant’s solicitors’ letter dated 21/9/2016, the Defendant, in requesting for copies of the BMW HPAs and Affin 15 HPA, stated that prior to the receipt of the Plaintiff’s affidavit on 2/9/2016 and Amended Defence and Defence to Counterclaim on 15/9/2016, the Defendant was not aware that the Vehicles were obtained by the Plaintiff on hire-purchase. 20

By the Plaintiff’s solicitors’ response in a letter dated 22/9/2016, the Plaintiff did not deny Defendant’s position that they were not aware that the Vehicles were obtained by the Plaintiff on hire-purchase prior to 2/9/2016. 25

Upon receiving copies of the BMW HPAs and Affin HPA after filing of the discovery application, the Defendant, by a Notice of Rescission dated 14/11/2016 issued by their solicitors, rescinded the Agreement for reason of misrepresentation. The Plaintiff only alleged for the first time on 5/12/2016 that the Defendant was 30 aware of the BMW HPAs and Affin HPA in their affidavit after the issuance of the Notice of Rescission”. (Emphasis added) Therefore I agreed with the Defendant’s submission that - “(a) The Defendant, like any other reasonable person, was clearly 35 induced to entering into the Agreement based on the Representations. The Representations also are not for trivial matters. They are essential and fundamental for every leasing or hire-purchase of vehicles without which the lessee or hirer would not be able to lawfully enjoy and possess the Vehicles – 40 Museprime Properties Ltd v Adhill Properties Ltd, HC (UK).

Also, the Plaintiff could not have granted the title and rights set out 13 in the Agreement to the Defendant when it did not have the title 5 and rights in the first place. This is in accord with the settled principle of nemo dat quod non habet - Simpang Empat Plantation v Ali Tan Sri Abdul Kadir, CA”.

Secondly, the Defendant argued that the Defendant is 10 estopped because it has elected to affirm the Agreement and continued with the use and possession of the Vehicles for 4 years 3 months and 5 days. To bolster its position, the Defendant relied on - Travelsight (M) Sdn Bhd & Anor v. Atlas Corp Sdn Bhd [2003] 15 6 MLJ 658 at p.665 A-B - “According to the case of Clough v London and North Western Rly Co

LR 7 Ex 26 at p 35 that once an election is unequivocally made, be it in favour of affirmation or of rescission, then the matter comes to an end forever. The election remains put and it cannot be revived since, in 20 law, there is no such thing as partial rescission (see Segar Oil Palm Estate Sdn Bhd v Tay Tho Bok)”. Admiral Cove Development (supra) - “Held … (5) The conduct of the respondents … showed an election to 25 affirm the agreement. The long lapse of time without complaint showed an intention to affirm the contract and was a strong indication that they were not really induced by whatever was said … to enter into the agreement … (6) There was a delay of more than four years before the respondents decided to pursue the action for rescission. Such delay 30 could be fatal. It was difficult, if not impossible, to affirm the Court of Appeal's ruling that the respondents' delay in pursuing the action for rescission was not fatal …”. I find there is no merit in the Plaintiff’s aforesaid contention. In 35 Peyman v Lanjani and others [1984] 3 All ER 703 at p.725j and p.726b-d, the English Court of Appeal followed the Australian case of Coastal Estates Pty Ltd v Melevende [1965] VR 433 in which is found support for the view that knowledge of the legal right to 14 elect to avoid a contract is required for affirmation of it. 5 Stephenson LJ quoted from the judgment of Herring CJ (at 436) as follows: “The first thing to consider is the nature of the conduct of the plaintiff that is relied upon. It is conduct no doubt that could have properly been put forward as evidence that the plaintiff had resolved to affirm, if he had 10 known that he had a right of election. But of course in the present case his conduct has to be looked at on the basis that he did not have any such knowledge. And so looked at it would not appear conduct of such an unequivocal character as to preclude the plaintiff from exercising his right to rescind. By paying the instalments and interest payable under the 15 contract and the rates that the contract required him to pay, the plaintiff was doing nothing inconsistent with disaffirmance. He was doing no more than fulfilling his own obligations under the contract. He was not seeking to exercise rights under the contract adverse to the defendant as vendor, nor was he seeking to gain advantaves for himself. He did not do 20 anything that unequivocally involved an affirmance of the contract, as is the case where a landlord for example with a right to forfeit a lease accepts rent from his tenant. This course the landlord can only justify on the basis that the lease is still on foot”. 25 At p.734 g-j, Slade LJ stated - “Lord Blackburn in Kendall v Hamilton (1879) 4 App Cas 504 at 542, [1874-80] All ER Rep 932 at 950 said: ‘… there cannot be election until there is knowledge of the right to elect.’ For the reasons given by Stephenson and May LJJ, I am of the opinion that this statement, which 30 was cited by Lord Porter in Young v Bristol Aeroplane Co Ltd [1946] 1 All ER 98 at 110, [1946] AC 163 at 186 as being the foundation of the principle of election, still correctly represents the law. With Stephenson and May LJJ, I do not think that a person (such as Mr Peyman in the present case) can be held to have made the irrevocable choice between 35 rescission and affirmation which election involves unless he had knowledge of his legal right to choose and actually chose with that knowledge. I would like to make a few observations as to the practical consequences of this court’s decision on this point, as I see them. If A 40 wishes to allege that B, having had a right of rescission, has elected to affirm a contract, he should in his pleadings, so it seems to me, expressly allege B’s knowledge of the relevant right to rescind, since such knowledge will be an essential fact on which he relies”. 45 Turning to the context of this present case, on the face of the registration card on 30/8/2012, it does not set out the HPA 15 Prohibitions and given my finding that the Defendant prior to 5 2/9/2012 did not know about the HPA Prohibitions, I am of the view the Defendant could not have made any election to affirm the contract. [15] To conclude, I find that the Defendant has shown there is 10 the triable issue that the Plaintiff had fraudulently misrepresented or at the very least, innocently misrepresented to the Defendant of the Representations. For the foregoing reasons, having considered the submissions of the parties, the Court dismissed the Plaintiff's application (encl.4) with costs of RM5,000.00. 15 Defendant’s application under O.18 r.19(1)(b) and/or (d) of the ROC 2012 (encl.12) [16] Vide its Notice of Application dated 9/9/2016, the Defendant is essentially seeking to strike out the Plaintiff's Writ of Summons 20 dated 5/7/2016 and Ameded Statement of Claim dated 23/8/2016

“The principles upon which the Court acts in exercising its power under any of the four limbs of O.18 r.19(1) Rules of the High Court are well settled. It is only in plain and obvious cases that 15 recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck v. Wilkinson [1899] 1 QB 86, p.91), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it "obviously unsustainable" (Attorney-General of Duchy of Lancaster v. L. & 20 N.W. Ry. Co. [1892] 3 Ch.274, CA). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2 All ER 871, CA.). ... The Court must be satisfied that there is no reasonable 25 cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable". (p.11 e-h left column); and

"It has been said that so long as the pleadings disclose some 30 cause of action or raise some question fit to be decided by the Judge, the mere fact that the case is weak and not likely to succeed at the trial is no ground for the pleadings to be struck out (Moore v. Lawson [1915] 31 TLR 418 CA); (Wenlock v. Moloney) (supra)." 35 [18] In the light of my finding that the Defendant has shown that the Plaintiff had fraudulently misrepresented or at the very least, innocently misrepresented to the Defendant of the Representations, the Plaintiff’s action is obviously unsustainable and ought to be 40 struck out. 17 5 [19] In the circumstances the Court allowed the Defendant's application (encl.12) with costs of RM5,000.00. Defendant’s application under O. 81 of the ROC 2012 (encl. 27) [20] Vide its Notice of Application dated 15/11/2016 (encl.27), the 10 Defendant applied to enter summary judgment against the Plaintiff as follows: “(1) Penamatan (rescission) Perjanjian yang bertajuk Agreement between Preferred Synergy Sdn Bhd (“the Company”) and Beta Tegap Sdn Bhd (“the Operator”) for the leasing and management 15 of vehicles for Beta Tegap Sdn Bhd’s contract for the automated enforcement system (“AES”) bertarikh 14.8.2012 (“Perjanjian”) ab initio;

Deklarasi bahawa Perjanjian tersebut adalah tidak sah dan 20 terbatal (null and void) ab initio;

Perintah bahawa Plaintif hendaklah memulangkan jumlah RM1,644,514.30 ataupun RM1,590,168.30 kepada Defendan bersama dengan faedah pada kadar 5% setahun daripada 25 18.8.2015 sehingga tarikh penyelesaian penuh;

Secara alternatif, jumlah wang yang perlu dipulangkan oleh Plaintif kepada Defendan ditaksir bersama dengan faedah pada kadar 5% setahun;

Kos”. [21] In an application under O.81 ROC 2012, the principles governing summary judgment under O.14 ROC 2012 are applicable. 35 In Woolley Development Sdn Bhd v Mikien Sdn Bhd [2008] 2 CLJ 303; [2008] 1 MLJ 585, the Court of Appeal held that: "[45] This application was made under O 81 of the RHC. Order 81 r 3 of the RHC states that: Unless on the hearing of an application under rule 1 either the 40 court dismisses the application or the defendant satisfies the court 18 that there is an issue or question in dispute which ought to be tried 5 or that there ought for some other reason to be a trial of the action, the court may give judgment for the plaintiff in the action. [46] The plaintiff in a summary judgment application first needs to establish and (sic) prima facie case that 'he is entitled to judgment'. The 10 burden then shifts to the defendant to satisfy the court why judgment should not be given against him (see National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 MLJ 302 per Seah FJ). 'Ought' in O. 81 r. 3, is an expression of a strong probability. In other words, the issue in dispute must be critically investigated as genuine. This is what a 15 defendant needs to prove to be entitled to a trial of that disputed issue". [22] In addressing the present application of the Defendant, I adopt all that I have alluded to on the issue of whether there is misrepresentation by the Plaintiff which I referred to when dealing 20 with the Plaintiff’s application for summary judgment in encl.4 above. [23] In the context of the instant case the burden is then shifted to the Plaintiff to satisfy the Court why Judgment should not be entered against them. I find the Plaintiff had not discharged this burden as it 25 is plain that the Plaintiff has no bona fide defence to the Defendant’s Re-Amended Counterclaim for misrepresentation and there are no triable issues raised in this regard. [24] The Defendant had exercised its right of rescission vide a 30 Notice of Rescission dated 14/11/2016 issued by the Defendant’s solicitors rescinding the Agreement. Having made a finding that there is misrepresentation by the Plaintiff, I allowed the Defendant’s Re-Amended Counterclaim for rescission of the Agreement ab initio in accordance with prayers 1 and 2 in encl.27. I draw support from 35 the following authorities: 19 Admiral Cove Development Sdn Bhd (supra)(FC) at 320[21] and 5 [22] - “[21] The question of law posed in the instant appeal is 'what relief is applicable in a case of innocent misrepresentation'. We would echo the words of the learned judge in Sim Thong Realty Sdn Bhd that the legal position in Malaysia is that a representee who has been induced by an 10 innocent misrepresentation may sue for rescission and consequent restitution. But we would also add that a representee in such circumstances may only rescind the contract if it is still executory and if all parties can be restored to their original position. 15 … [22] We would reiterate that the legal position in Malaysia is that a representee who has been induced by an innocent misrepresentation may sue for rescission and consequent restitution”. Sim Thong Realty Sdn Bhd v. Teh Kim Dar @ Tee Kim [2003] 3 20 MLJ 460 (CA) at p.471 citing a passage in Dunbar Bank plc v Nadeem [1998] 3 All ER 876 (at p.886) - “The matter was put clearly by Bowen LJ in Newbigging v Adam (1886) 34 Ch D 582 at 592 where he said: '… when you come to consider what is the exact relief to which a 25 person is entitled in a case of misrepresentation it seems to me to be this, and nothing more, that he is entitled to have the contract rescinded, and is entitled accordingly to all the incidents and consequences of such rescission. It is said that the injured party is entitled to be replaced in statu quo. It seems to me that when you are 30 dealing with innocent misrepresentation you must understand that proposition that he is to be replaced in statu quo with this limitation— that he is not to be replaced in exactly the same position in all respects, otherwise he would be entitled to recover damages, but is to be replaced in his position so far as regards the rights and 35 obligations which have been created by the contract into which he has been induced to enter. … 'There ought, as it appears to me, to be a giving back and a taking back on both sides, including the giving back and taking back of the 40 obligations which the contract has created, as well as the giving back and the taking back of the advantages.'”. 20 (per Bowen LJ at p.595) 5 Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 at 608 [16] - “[16] The hallmark of the equitable remedy of rescission is that it is only available to set aside contracts that are voidable by reason of the 10 ingredient of free consent, which is the sine qua non in the making of a contract, having been vitiated by an element external to the contract. Examples of elements that vitiate free consent are fraud, misrepresentation, duress, undue influence and a breach of fiduciary duty”. 15 [25] As a matter of law, upon rescission of the Agreement, any person who has received any advantage under the Agreement or contract is bound to restore any advantage which he had received to the person from whom he received it. In support of this position I 20 relied on s.66 Contracts Act 1950; Yong Mok Hin v. United Malay States Sugar Industries Ltd. [1967] 2 MLJ 9 (FC); Jong Chuk v. Chong Tung Sang & Ors (No 5) [1999] 8 CLJ 268 (HC) and the dicta of Bowen LJ in Newbigging v Adam (supra) at p.595 quoted in para 25 above. 25 [26] Referring to prayer 3 in encl.27, the Defendant submitted the sum of RM1,644,514.30 relates to the possession of vehicle until November whilst RM1,590,168.30 took into account the rental payable till December and the difference between the sum paid by 30 the Defendant to the Plaintiff for the supply of the Vehicles and the actual costs incurred by the Plaintiff in procuring the Vehicles from BMW and Affin. 21 5 [27] Learned Plaintiff Counsel highlighted that prayers 3 and 4 in encl.27 are alternative reliefs which relate to the computation of value or benefit and submitted the more appropiate relief would be prayer 4, i.e the actual computation be sent for assessment. [28] In the premise, I allowed the Defendant’s application in encl.27 10 for summary judgment in terms of prayers 1, 2, 4 and 5, being costs of RM5,000.00. Dated: 29/9/2017 15 SGD. (LAU BEE LAN) 20 Judge Counsel for the Plaintiff: Encik Chan Kheng Hoe together with 25 Cik Yang Lee Yuen and Encik Daryl Khor Tet Woei Messrs Kheng Hoe Advocates & Solicitors A3-3-3A, Block A3, Solaris Dutamas No.1, Jalan Dutamas 1 30 50480 Kuala Lumpur 35 22 5 Counsel for the Defendant: Encik Mong Chung Seng together with Cik Lee Yi Ting Messrs Lee Hishammuddin Allen & Gledhill 10 Advocates & Solicitors Level 6, Menara 1 Dutamas (formerly known as Menara Sapura Kencana Petroleum) Solaris Dutamas No.1, Jalan Dutamas 1 15 50480 Kuala Lumpur