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1 IN THE HIGH COURT IN MALAYA AT IPOH 5 IN THE STATE OF PERAK DARUL RIDZUAN CIVIL APPEAL NO.: AA-12A-12-09/2022 BETWEEN RHB BANK BERHAD 10 (COMPANY NO.: 6171-M) ... APPELLANT AND TEE BAN TIONG … RESPONDENT (In the matter of Sessions Court at Ipoh 15 Summons No: A52-154-06/2013 BETWEEN TEE BAN TIONG ... PLAINTIFF AND 20 RHB BANK BERHAD (COMPANY NO.: 6171-M) … DEFENDANT) GROUNDS OF JUDGMENT 25 [1]. The case revolves around a property auction in 2006, where the Respondent successfully bid for two adjacent shop units, GF.11 and GF.12, in Yik Foong Complex, Ipoh, with a reserved price of RM260,000.00. Respondent paid RM26,000.00 as a deposit and obtained banking facility from the appellant to pay the balance 30 purchase price of the property. However, the defendant, terminated the loan facility resulting in the sale of property contract dated 30 June 2006, being also terminated. [2]. This led the Respondent to file a lawsuit for specific performance of the sale contract and general damages in lieu of specific 35 performance. At the Sessions Court Ipoh, after full trial Respondent case was dismissed but was overturned by High Court and on further appeal the decision of the High Court was upheld by Court of Appeal and the case was remitted to Sessions Court for an assessment of damages of the Respondent’s losses. 40 [3]. On assessment, the Sessions Court initially awarded RM274,169.29 for the Respondent in 2017. However, on appeal to the High Court in 2018, the amount was reduced to RM52,000.00. The Respondent in 2020 appealed to the Court of Appeal, which overturned the High Court's decision, sending the case back to the 45 Sessions Court for fresh assessment. This time around the Sessions Court awarded the Respondent RM863,795.37. Following this decision of the Sessions Court in 2022, the Appellant appealed against the decision of the Sessions Court, which is the present appeal before this court. 50 [4]. Subsequent to the decision by the Session Court in 2022, the Respondent in April 2023, issued a statutory Notice of demand for RM907,326.13, under s. 466 of Companies Act 2016, to wind up the Appellant. To avoid winding-up proceedings, appellant agreed to release RM400,000.00 to the Respondent, with the remaining 55 RM507,326.13 held by the Appellant solicitors, as per the agreed stay of execution on terms pending this appeal's conclusion. [5]. The Appellant appeals to the High Court, expressing dissatisfaction with the decision of the Sessions Court Judge (“SCJ”) on the grounds outlined in the Appeal Memorandum dated October 5, 60 2022 and they are as follows: a) SCJ erred in fact and law by valuing the property at RM610,000.00 on 16 October 2020 and consequently allowed RM350,000.00 in damages for the difference in property purchase and market prices. 65 b) SCJ erred by approving rent paid by Respondent from 2007 to August 2022 due to non-purchase. c) SCJ mistakenly decided that the Appellant should pay RM26,000.00 deposit to the Respondent. d) SCJ wrongly approved RM5,000.00 as compensation 70 for legal fees paid by Respondent. e) SCJ set damages at RM863,795.37 without deducting RM274,169.29 already paid by Appellant in 2017. Claim relating to loss of value in the property [6]. In respect of the claim relating to the loss of property value, it was 75 established before the Sessions Court that the purchase price of the property at the auction was RM260,000.00, as determined in a valuation report dated May 22, 2006. In a significant development thereafter, in 2020, a valuation expert from Messrs D. Henry Valuers Realtor submitted a Valuation Report on 16 October 2020, 80 assessing the value of the same property at RM610,000.00 as of 18 September 2020. The appellant did not provide a counter- valuation report to challenge this figure of RM610,000.00, which is a material finding for the purposes of determining loss under this head of claim. As a matter of fact, during cross- 85 examination, the appellant's witness (SD-1) agreed that the appellant did not tender any valuation report to challenge the respondent’s valuation report, nor did the appellant call any expert to support their method of calculating the loss. [7]. The Appellant submits that the property's market value increased 90 by an average of RM6,926.91 annually over 13 years (2006 to 2020), which corresponds to a 2.6% yearly increase. However, this method of calculating the loss in value of the said property is not acceptable to this court. The reason is that the parties are not concerned with the yearly increment but rather with the value as at 95 the date of assessment of loss, which is 2020. For argument's sake, if the value of the said property had skyrocketed since 2006 from RM260,000.00 to RM500,000.00 and then plunged to RM200,000.00 in 2020, the bank would most certainly not adopt the average increment method to determine the loss in value, as it 100 would still show an average increase, yet the property value in 2020 is below RM260,000.00. Effectively, it would be a case of no loss suffered, but would the bank still be minded to pay despite no loss? Certainly not. This is an exaggeration of facts simply to show that the Respondent's method of determining loss by working out 105 the yearly increment is not acceptable. [8]. The Sessions Court was satisfied with the methodology employed by the expert from Messrs D. Henry Valuers Realtor in ascertaining the property's market value at RM610,000.00 and, accordingly endorsed the report's findings. In determining the damages, the 110 Sessions Court agreed with the Respondent that they should reflect the discrepancy between the property's appraised value of RM610,000.00 and its auction price of RM260,000.00, resulting in an award of RM350,000.00 in favor of the respondent for this claim. Claim relating to inconvenience suffered particularly rental 115 [9]. In respect of claim relating to inconvenience suffered which is primarily the rental incurred which Respondent had to pay to continue operation of business, which he was not able to purchase due to the Appellant’s fault or any other Property of same value in the same neighbourhood. The Sessions Court made satisfactory 120 determinations regarding the respondent's tenancy history and claim eligibility. The court found that the respondent had substantiated his occupancy of units GF22 and GF23 from 2006 up until July 31, 2011, and subsequently units GF37 and GF38 in the Yik Foong Complex, located on Jalan Laxamana in Ipoh, from 125 August 1, 2011, through December 2020, with an indication that the tenancy was ongoing. This conclusion was reached based on the tenancy agreements, bank statements, and Borang B (a tax form) presented by the respondent. Furthermore, the Sessions Court ruled that the respondent's claim related to this matter could 130 only commence from 16 May 2007, which is the date when the appellant terminated the purchase agreement. These findings formed the basis of the respondent's continuous rental at the specified locations and establish a specific timeframe for his claim. [10]. The Appellant also disputed the inclusion of rental payments and 135 inconveniences experienced by the Respondent as a double claim, in addition to an award of damages for loss in the value of the property, discussed earlier. However, the Sessions Court finds this claim reasonable, as the Respondent had to seek an alternative place to operate his business and incurred additional costs due to 140 the Appellant's premature termination of the sale contract. These additional expenses and the inconvenience caused thereby are a direct consequence of the Appellant's actions, justifying compensation. If the Respondent had been successful in purchasing the property, he would not have paid any rental at all. 145 It is again clear that this hardship was caused by the Appellant, and the Respondent must be compensated. I cannot agree with the appellant that the SCJ had erred in allowing claim under this heading. Claim for RM26,000.00 deposit to the Respondent 150 [11]. This ground of appeal turns on the facts of the case, where evidence was presented during the trial. After considering this evidence, the SCJ ordered the return of RM26,000.00 to the Respondent. The primary reason for this decision is that the Respondent never encashed the Cashier’s Order or the Demand 155 Draft issued by the Appellant, nor did he actually receive the deposit money. Appellant’s witness (SD2) testified that when the Respondent failed to cash the Cashier’s Order, the funds were transferred to the Registrar of Unclaimed Money. Consequently, the Respondent argued that the Appellant should have claimed this 160 money from the Registrar. Despite these arguments, the fact remains that the Respondent did not receive the return of the deposit at any time. Therefore, the SCJ found it just to order the return of the deposit, as the Respondent was never in possession of the refunded deposit. Accordingly, I find no reason to disturb the 165 SCJ's finding. Claim for RM5,000.00 costs for RM274,169.29 paid to M/S Thevin Chandran & Associates [12]. The Appellant contends that the previous Sessions Court Judge's decision on 28 April 2017, which ordered costs of RM11,226.00 170 including suing costs, was already settled by the Appellant with a payment of RM274,169.29 on 23 June 2017. Thus, the subsequent SCJ decision to further award RM5,000.00 to the Respondent is unjustified. [13]. The Respondent contends that the sum of RM274,169.29, which 175 included the RM11,226.00 as costs, was never paid to the Respondent. It was paid to Messrs Thevin Chandran & Associates as a stakeholder, and Messrs Thevin Chandran & Associates never paid this sum to the Respondent. If the Appellant had paid RM274,169.29 to the Respondent through Messrs Thevin 180 Chandran & Associates, why would they then institute an action against Messrs Thevin Chandran & Associates to recover the said sum of RM274,169.29? This simply shows the fact that the Respondent was not paid. The court also takes notice that disciplinary action was taken against Messrs Thevin Chandran & 185 Associates pertaining to the same. [14]. Regarding the claim for RM5,000.00, the SCJ in her grounds of judgment stated that it represents different costs. It distinguished between suing costs in an action and claims for legal fees in the conveyancing transaction as separate categories of claims. The 190 award of RM5000.00 was in respect of two invoices presented by the Respondent bearing same date with different amounts and purposes. Due to the lack of explanation and supporting receipts SCJ allowed only RM5000.00. I find no error in the decision of SCJ, allowing this claim. 195 Other matters [15]. At some point in the Appellant's submission, it was contended that the Respondent ought to have mitigated its losses and had failed to discharge its legal burden regarding the damages suffered. [16]. The courts are appraised of this well settled law that that a person 200 who suffers from a breach of contract is bound by duty to do all that a reasonable and prudent man would do in the circumstances to mitigate his losses (see per Haldane L.C. in British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 205 673 789. [17]. In Darbishire v. Warran [1963] 1 WLR 1067, CA, Pearson LJ eloquently expresses the duty in these words at pg 1075: “......... it is important to appreciate the true nature of the so-called ‘duty to mitigate the loss ‘ or ‘duty to minimise the damage’. The 210 plaintiff is not under any actual obligation to adopt the cheaper method: if he wishes to adopt the more expensive method, he is at liberty to do so and by doing so he commits no wrong against the defendant or anyone else. The true meaning is that the plaintiff is not entitled to charge the defendant by way of damages with any greater 215 sum than that which he reasonably needs to expend for the purpose of making good the loss. In short, he is fully entitled to be as extravagant as he pleases but not at the expense of the defendant.” [18]. Upon reviewing the evidence and the submissions of the parties, 220 there is nothing to indicate that the Respondent acted extravagantly. The rented premises were located at the same place where he originally operated his business and intended to purchase the property, a purchase which was terminated due to the Appellant’s breach. In fact, the Respondent had allowed for 225 deductions for interest and installments had he been successful in purchasing the property, without the Appellant terminating the loan. Therefore, there is no valid reason for the Appellant to claim that the Respondent cannot be awarded for this lost opportunity in terms of inconvenience suffered and it is clear that the Respondent 230 has indeed discharged his burden. [19]. The Appellant's reliance on the case of Xue Di & Anor v. Hoong Ming [2022] 1 LNS 2915, in the instance of appeal is inappropriate due to several reasons. The Appellant's sudden reliance on Clause 18 of the proclamation of Sale dated 30 June 2006 as a defense 235 was never previously pleaded or argued in the court below. The introduction of this new defense disrupts procedural fairness and deviates significantly from the established facts and legal principle that one cannot rely on a defence which was not pleaded. The SCJ has correctly applied the provisions of section 74 of the Contracts 240 Act 1950 in permitting the Respondent’s claim for damages. Conclusion [20]. I find no error in the decision of the SCJ that would justify interference by this court. The core of this case hinges on whether the Respondent has sufficiently proven the damages incurred. In 245 my view, the SCJ has applied the correct legal principles and arrived at a just conclusion in a situation where the Appellant failed to provide counter-evidence to the Respondent’s property valuation. The appropriateness of the SCJ's application of section 74 of the Contracts Act 1950 in awarding damages where there 250 is no proof of the claim being extravagant. Furthermore, the lack of merit in the Appellant’s late reliance on Clause 18 as a defense, which departs from the established principle that one cannot rely on a defense that was not pleaded, strengthens SCJ decision. 255 Date: 15 April 2024 Moses Susayan 260 MOSES SUSAYAN Judicial Commissioner High Court in Malaya at Ipoh, Perak 265 270 Counsel: 275 For the Appellant : Muhamad Mizan bin Omar Advocates and Solicitors [Messrs Kington Tan Dzul, Kuala Lumpur] 280 For the Respondent : Vincent Tay Advocates and Solicitors [Messrs K. Y. Choi, Petaling Jaya] 285 (Notice: This Grounds of Decision is subject to official editorial revision) 290