Sms Realty Sdn Bhd v Azure Property Holdings Sdn Bhd (WA-12BNCvC-51-05/2018)

This is an appeal by SMS Realty Sdn Bhd, the Defendant in the court below, against the entire decision of the learned Sessions Court Judge (‘SCJ’) on 30.4.2018 in allowing the claim by Azure Property Holdings Sdn Bhd for the sum of RM197,506.00 together with late payment interest amounting to RM431,625.87 as at 15.6.2017 and late payment interest at the rate of 8% per annum on RM197,506.00 from 16.6.2017 until full settlement and scale cost of RM9,325.00 (‘said Judgment’).

After hearing oral submissions by learned counsels for both parties on 5.10.2018, and having read the Records of Appeal and written 3 submissions, I had requested for further oral submissions regarding some points of contention on 2.11.2018. Thereafter, the matter was adjourned for deliberation and on 5.11.2018 I pronounced my decision whereby the appeal was dismissed with cost of RM5,000.00.

The Appellant, being dissatisfied, now appeals against my entire decision.

For purposes of these grounds of judgment, I shall refer to the Appellant and the Respondent as they were in the court below, namely as the “Defendant” and the “Plaintiff”, respectively.

According to the Statement of Claim (‘SoC’) (Record of Appeal (‘RoA’) Part A, Volume 1, pages 21 – 30) and Statement of Agreed Facts (RoA Part C, Volume 4, pages 1064 – 1069), the Plaintiff and the Defendant had entered into 36 Sale and Purchase Agreements all dated 29.9.2011 (‘SPAs’) whereupon the Plaintiff had agreed to sell 4 and the Defendant had agreed to purchase 36 parcels of land situated in Mukim of Cheras, District of Ulu Langat, State of Selangor Darul Ehsan (‘said Lands’) for the total purchase price of RM5 million.

The clauses in the SPAs are identical save for the areas/ measurement of the said Lands, their title numbers and purchase prices.

Clause 2.1(a) and (b) of the SPAs provide that the Defendant shall pay to the Plaintiff 50% of the purchase price upon execution of the SPAs and the balance purchase price within 90 days from the date of the SPAs (‘Completion Date’).

Clause 2.1(c) of the SPAs further provides for an automatic extension of 30 days from the Completion Date (‘Extended Completion Date’) after the expiry of the Completion Date for the Defendant to pay the balance purchase price. During the Extended Completion Date, the Defendant is to pay late payment interest at the rate of 8% per annum of the balance purchase price until full payment. 5

The fact that the Defendant has paid the Plaintiff a sum of RM4,802,494.00 towards the purchase price is not disputed. Paragraph 9 SoC sets out these payments in a table as follows: Date of Payment Payment Received Outstanding Balance Purchase Price (RM)

4.10.2011 1,500,000 3,500,000.00 25.5.2012 300,000 3,200,000.00 19.6.2012 828,358 2,371,642.00 11.9.2013 1,481,630 890,012.00 31.10.2013 692,506 197,506.00 - The Plaintiff’s case [10] The Plaintiff alleged that since 31.10.2013, the Defendant has failed to make any further payments of the outstanding balance purchase price and thus as at 1.11.2013, the outstanding balance amount is RM197,506.00. 6 [11] The Plaintiff has calculated the amount of late payment interest due and owing, which comes up to a total of RM431,625.87, as particularised in a table that appears in paragraph 11 of the SoC and is re-produced below: Effective Dates on Interest Rate (From) Effective Dates on Interest Rate (Until)

28.12.2011 24.5.2012 3,500,000.00 149 113,997.45 25.5.2012 18.6.2012 3,200,000.00 25 17,486.34 19.6.2012 10.9.2013 2,371,642.00 449 233,117.19 11.9.2013 30.10.2013 890,012.00 50 9,753.56 31.10.2013 15.6.2017 197,506.00 1324 57,271.33 Total 431,625.87 - The Defendant’s case [12] In its Defence (RoA, Part A, Volume 1, pages 31 – 36), the Defendant pleaded that the outstanding purchase price of RM197,506.00 had 7 been paid to Muhammad Ajib bin Mahiddin (‘Ajib’) as commission for brokering the deal in the following manner:

RM120,000 was paid in cash to Ajib; and

the remainder RM77,506.00 was utilised to pay for the purchase of Ajib’s 15,000 shares in the Defendant. [13] In particular, it is the Defendant’s case that in mid-2011, Dato’ Haji Sheikh Mohamad Shalahuddin Ayubi Bin SM Amin, the Defendant’s Managing Director (DW3), was introduced to Tony Ong by Ajib. At that point of time, Tony Ong, who is the husband to Madam Tung Or Yew, the Plaintiff’s Director (PW1), had intended to sell the 36 properties held under the Plaintiff’s name. Although Tony Ong wanted to develop the property, the Plaintiff did not have the capital. [14] DW3 agreed to purchase the 36 properties for RM5 million. Thereafter, the Defendant was incorporated with DW3 and Ajib appointed as directors and Tony Ong holding the position as Chief Executive Officer (‘CEO’) of the Defendant. Tony Ong used his son, 8 Ong Chee Weng as a proxy in the Defendant whereby his son was appointed as a director. [15] The Defendant alleged that out of the total sum of RM4,802,494.00 which had been paid towards the purchase price for the said Lands, some payments were not made directly to the Plaintiff but to other companies upon the instruction of Tony Ong. As regards the remaining balance of RM197,506.00, Tony Ong is said to have instructed the Defendant to contra the same for Ajib’s shares in the Defendant since Tony Ong was supposed to pay RM120,000.00 as the commission fee for Ajib. As for the sum of RM77,506.00, Tony Ong had agreed to advance the said amount to Ajib to purchase shares and inject some money in the Defendant. [16] In mid-2013, Tony Ong and Ong Chee Weng left the Defendant. The suit was then filed in June 2017. 9 Submissions of the parties [17] In its Memorandum of Appeal dated 13.8.2018, (Additional RoA, pages 1-5), the Defendant submitted 17 grounds of appeal. However, by virtue of the written submissions prepared by the Defendant’s solicitor, the grounds were summarised into two essential points of arguments, namely that the SCJ had erred in fact and in law when she allowed the Plaintiff’s claim for the balance of the purchase price in the sum of RM197,506.00; and for late payment interest at the rate of 8% per annum amounting to RM431,625.87. [18] On the other hand, learned counsel for the Plaintiff submitted that those 17 grounds of appeal are in fact challenges against the findings of fact by the SCJ, to which an appellate court should be slow to intervene. The SCJ had heard three witnesses each for the Plaintiff and the Defendant. Hence, on the authority of cases such as Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395; Gan Yook Chin & Anor v Lee Ing Chin & Ors [2004] 4 CLJ 309; and UEM Group Berhad v Genisys Integrated Pte Ltd [2010] 9 CLJ 785, it was argued that any intervention by this Court should be limited to 10 circumstances where it is clearly demonstrated that the trial judge was “plainly wrong” in arriving at the decision. Nevertheless, in an abundance of caution, the Plaintiff’s counsel had structured his written submissions according to each of the 17 grounds of appeal. [19] The SCJ had stated, in paragraph 29 of her Grounds of Judgement (‘GoJ’) (Additional RoA, pages 6 – 46), that she had scrutinised the Agreed Issues To Be Tried (RoA Part C, Volume 4, pages 1070- 1071) and combined the six issues listed into two main issues, which are the same ones as narrowed down by En. Abd Shukor Tokachil for the Defendant, for purposes of the appeal before this Court. In light of this, I shall address the issues which arise for determination in this appeal based on the two main grounds as mentioned in paragraph 17 above. Legal principles on appellate intervention [20] As submitted by Mr. Andrew Fernandez for the Plaintiff, it is trite law that an appellate court will not readily interfere with the findings of fact arrived at by the trial court to which the law entrusts the primary task 11 of evaluation of the evidence (see Sivalingam a/l Periasamy and Gan Yook Chin & Anor, supra). [21] In this regard, Nallini Pathmanathan JCA (as Her Ladyship then was) in MMC Oil & Gas Engineering Sdn Bhd v. Tan Bock Kwee & Sons Sdn Bhd [2016] 4 CLJ 665 at page 674 held as follows: “[14] The requirements for the trial judge to have come to a finding which was “plainly wrong” before an appellate court may intervene is therefore well entrenched in our appellate philosophy and practice. … [15] This is a point of some importance because it underscores the rational that the appellate court is not at liberty to reverse or interfere in the finding of a trial judge even if the appellate court is clearly of the view that it would not have reached the conclusion the trial judge did on the evidence on record before it. It requires something more. The requisite or correct standard to be applied is that no reasonable judge, on the evidence on record, could have 12 reached the conclusion of the trial judge. In other words, so long as the findings of the trial judge are plausible on the evidence on record, there is no room for interference merely on the grounds that the appellate court forms a different opinion on the same evidence.”. [emphasis added] [22] In the more recent case of Exocitic Skyline Sdn Bhd v. Hamid Naib & Ors and Another Appeal [2018] 1 LNS 510, Hasnah Mohammed Hashim JCA in delivering the judgment of the Court of Appeal stated at paragraph 15 that “We are mindful of the limited role of the appellate court in relation to findings of facts made by the court of first instance. The general principle is that the conclusion of a trial judge is a finding of fact on the oral evidence based on the demeanour and credibility of the witnesses before him or her. Generally, such finding ought not to be disturbed unless the appellate court is convinced that it is wrong. It would not be sufficient to warrant any interference merely because the appellate court entertains doubt whether such finding is right....” (see too, the Federal Court decision in Ming 13 Holdings (M) Sdn Bhd v. Syed Azahari Noh Shahabudin & Anor [2010] 6 CLJ 857). Analysis and findings

(A) Whether the SCJ had erred in fact and in law by allowing the Plaintiff’s claim for the balance of the purchase price in the sum of RM197,506.00 [23] Based on her GoJ, the SCJ had first considered the documentary evidence produced by the Plaintiff during the trial to prove the outstanding amount of RM197,506.00, consisting of all 36 SPAs duly signed by the parties, the Plaintiff’s Debtor Statement as at 15.6.2017 (exhibit P-1, RoA Part C, Volume 4, pages 1078 - 1079) and the Audit Confirmation Letters dated 15.12.2014 and 14.6.2017 addressed to the Plaintiff which shows that the said amount is owed by the Defendant as at 31.12.2013 and 31.12.2016, respectively (exhibits P-13 and P-14, RoA Part C, Volume 5, pages 1145 - 1146). [24] Next, the SCJ took into account the oral evidence of Ms. Nur Amira Binti Nor Azmi (PW3), the external auditor of the Defendant who 14 attended court under subpoena by the Plaintiff. Apart from exhibits P-13 and P-14, PW3 had also produced two other Audit Confirmation Letters both dated 23.4.2014 (exhibits P-11 and P-12, RoA Part C, Volume 5, pages 1143 - 1144). [25] At this stage it should be mentioned that during cross examination of PW3, the Defendant sought to challenge the alleged outstanding amount on the ground that the Plaintiff did not sign and return the Certificate of Confirmation which appears at the end of exhibits P-13 and P-14. However, during re-examination, PW3 confirmed that the amount owing was calculated from the financial statements of the Defendant. [26] Having considered the oral and documentary evidence before her, the SCJ had concluded that the Plaintiff had, on a balance of probabilities, proven that there is an outstanding balance of the purchase price of RM197,506.00 owed by the Defendant to the Plaintiff. 15 [27] The SJC then proceeded to consider the pleaded defence that the said outstanding balance had been paid by the Defendant to Ajib by contra payment as instructed and agreed by Tony Ong. In this respect, the findings of the SCJ are as follows:

Mr. Andrew Lei Meng San, the Defendant’s former accountant (DW1) and Mr. Ismail Bin Haji Mahmood, the Defendant’s former General Manager (DW2) had confirmed that, apart from the Defendant’s Statement of Account (exhibit D-15 at ROA

as regards exhibit D-15, the SCJ held that its contents and the facts as pleaded in the Defence are inconsistent. It was further held that the handwritten notes by DW1 on exhibit D-15 and “Azure’s Land Sale - Status of Payment” (exhibit D-16 at ROA

(1) 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.”; “Burden of proof as to particular fact

The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”; and 19 “Evidence of terms of contracts, grants and other dispositions of property reduced to form of document

When the terms of a contract or of a grant or of any other disposition of property have been reduced by or by consent of the parties to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of the contract, grant or other disposition of property or of the matter except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. Exclusion of evidence of oral agreement

When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted as between the parties to any 20 such instrument or their representatives in interest for the purpose of contradicting, varying, adding to, or subtracting from its terms: Provided that —

any fact may be proved which would invalidate any document or which would entitle any person to any decree or order relating thereto, such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, the fact that it is wrongly dated, want or failure of consideration, or mistake in fact or law;

the existence of any separate oral agreement, as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved, and in considering whether or not this proviso applies, the court shall have regard to the degree of formality of the document; 21

the existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved;

the existence of any distinct subsequent oral agreement, to rescind or modify any such contract, grant or disposition of property, may be proved except in cases in which the contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents;

any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description may be proved if the annexing of any such incident would not be repugnant to or inconsistent with the express terms of the contract; and 22

any fact may be proved which shows in what manner the language of a document is related to existing facts.”. [29] Thus, in accordance with section 103 EA 1950 and the Defendant, having admitted to the execution of the SPAs and the Plaintiff having adduced sufficient evidence to prove that the amount of RM197,506.00 remains outstanding to it, then bore the evidential burden of proving the alleged arrangement between DW3, Tony Ong and Ajib as pleaded in the Defence. This is in line with the principles on burden of proof as expounded by Vernon Ong J (as His Lordship then was) in Tey Moon Kim v Hon Siew Mei [2013] 7 MLJ 528 in the following words: “[23] In law, the party who desires the court to give judgment as to any legal right or liability bears the burden of proof (s 101(1) of the Evidence Act 1950). The burden of proof is on that party is twofold: (i) the burden of establishing a case; and (ii) the burden of introducing evidence. The burden of proof lies on the party throughout the trial. The 23 standard of proof required of the plaintiff is on the balance of probabilities. The evidential burden of proof is only shifted to the other party once that party has discharged its burden of proof. If that party fails to discharge the original burden of proof, then the other party need not adduce any evidence. In this respect it is the plaintiff who must establish its case. If the plaintiff fails to do so, it will not do for the plaintiff to say that the defendant has not established its defence (Selvaduray v Chinniah [1939] 1 MLJ 253 (CA); s 102 of the Evidence Act 1950)….”. [emphasis added] [30] It is notable that nowhere in the written submissions by the Defendant, whether in the court below or before this Court, was reference made to the proviso under section 92 EA 1950 which the Defendant seeks to rely on. This is because the Defendant’s stand is that section 92 EA 1950 has nothing whatsoever to do with this case. According to the Defendant, the oral agreement for the contra payment was in relation to the mode of payment and does not amount to a variation or modification of the SPAs. In addition, the 24 Plaintiff appears to have accepted contra payment as an accepted mode of payment as evidenced by the two payments from the Defendant to IBS Concrete Panels MFG Sdn Bhd (‘IBS Concrete’) in the sum of RM300,000.00 (Defendant’s Payment Voucher No. 00040 dated 28.5.2012, RoA Part C, Volume 4, page 941) and RM828,358.00 (Defendant’s letter dated 19.6.2012 to the Manager of CIMB Bank Berhad regarding the fund transfer, RoA Part C, Volume 4, page 942) as part purchase price for the said Lands. [31] In her GoJ, the SCJ did not specifically address the Defendant’s points of argument in relation to the contra payments to IBS Concrete but at paragraph 65 of the GoJ, the SCJ referred to the case of Anuiti Enterprise (M) Sdn Bhd v Cubic Electronics Sdn Bhd [2006] 6 MLJ 565 to support her finding that “Seterusnya mahkamah bersetuju dengan hujahan Peguam Terpelajar Plaintif menurut seksyen 91 dan 92 Akta Keterangan 1950 adalah menjadi undang-undang yang mantap pihak-pihak dalam perjanjian tidak dibenarkan untuk mengemukakan bukti apa-apa perjanjian lisan untuk mengubah atau bertentangan dengan terma dalam perjanjian bertulis. Dalam hal ini saksi Defendan-Defendan telah memberikan keterangan lisan di 25 mahkamah mengenai pengaturan untuk membayar baki harga belian tanah tersebut kepada Muhammad Ajib Bin Mahiddin secara kontra atas arahan Tony Ong. Akan tetapi memandangkan pihak-pihak telah bersetuju transaksi jual beli tanah ini dibuat secara perjanjian bertulis termasuk terma mengenai pembayaran harga belian, seksyen 91 dan 92 Akta Keterangan 1950 adalah terpakai….”. [32] It is my considered view that the SCJ did not err in concluding that sections 91 and 92 EA 1950 are applicable. Even though there were two such payments from the Defendant to IBS Concrete, the sums of RM300,000.00 and RM828,358.00 were always treated in the accounts of the Defendant as payment to the Plaintiff, unlike the alleged payment to Ajib, which was never documented or recorded in the accounts of the Defendant. Moreover, the fact that payments were made to IBS Concrete by way of contra does not automatically mean that the contra arrangement involving Tony Ong and Ajib has been proven by the Defendant since IBS Concrete on one hand, and Tony Ong and Ajib, on the other hand, are clearly not the same entities or parties. The Defendant cannot ride on this fact, just as it cannot depend on other “circumstantial evidence” as described in the 26 written submissions such as the failure by the Plaintiff to return the Certificate of Confirmation for exhibits P-13 and P-14 to the auditors, as proof that the Plaintiff knew the existence of the contra-payment. [33] On the day fixed for further oral submissions, learned counsel for the Defendant submitted the judgment of the Court of Appeal in Sri Kelangkota-Rakan Engineering JV Sdn Bhd & Ors v Arab-Malaysian Prima Realty Sdn Bhd & Ors [2001] 1 MLJ 324. At page 333 of the report, Gopal Sri Ram JCA in delivering the decision of the Court, had cited the judgment of the Supreme Court of India in Gangabai v Chhabubai AIR 1982 SC 20 at p 23 which had explained section 92 of the Indian Evidence Act, upon which our EA 1950 is based, in the following terms: “… It is clear to us that the bar imposed by sub-s (1) of s 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be 27 admitted as between the parties to such document for the purpose of contradicting or modifying its terms. The sub-section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham. …”. [34] With respect to the learned counsel for the Defendant, if the true import of the above passage was appreciated, it would be immediately apparent that counsel’s reliance on Sri Kelangkota-Rakan Engineering JV Sdn Bhd is misplaced. The Defendant here is not alleging that the entire SPAs are a sham, as was the question in Sri Kelangkota-Rakan Engineering JV Sdn Bhd in relation to the turnkey contract. If that was the case, then as stated by Gopal Sri Ram JCA, “… the court will tear away the disguise and reveal to the world at large the true arrangement arrived at between the parties. It is important for reasons of public policy that the court is seised of tis power. Were it not so, the law would be lending its aid to enforce pretended and not real obligations.”. 28 [35] Clause 2 in the SPAs had expressly set out the terms of payment of the purchase price for the said Lands wherein the Defendant was to pay the Plaintiff the full purchase price within a maximum period of 4 months from the date of execution of the SPAs, taking into account the 30 days Extended Completion Date. Therefore, the purchase price for the said Lands should have been fully paid before 29.1.2012. [36] According to DW1, a discussion was held around the end of February 2012 attended by DW2, DW3, Tony Ong, Ajib and himself, and it was agreed that DW3, Tony Ong and Ajib inject the capital to make payment for the sale and purchase of the said Lands. This was the time that Tony Ong was alleged to have given the instructions for the sum of RM197,506.00 to be paid to Ajib for brokering the deal. [37] The said discussion is obviously a post-contractual event where at that point in time, the Defendant was in breach of the SPAs in failing to pay the full purchase price before 29.1.2012. Hence, what the Defendant sought to do was to admit evidence to prove the existence 29 of a separate oral agreement that the outstanding amount of RM197,506.00 was to be paid by way of the alleged contra payment. Cleary, as held by the SCJ, section 92 EA 1950 is applicable since such evidence would amount to a variation or addition to the written instrument. This being the case, it is then surely not the task of the Court to presume or make a supposition, based on the evidence that the Defendant had led during the course of the trial, on the proviso to section 92 EA 1950 which is applicable. [38] Additionally, I find that the judgment of Lee Hun Hoe C.J. (Borneo) in Tindok Besar Estate Sdn. Bhd. v. Tinjar Co. [1979] 2 M.L.J. 229 at 233 as set forth below is apt to be mentioned at this juncture: “It is not the case of the respondent that any of the provisoes to section 92, except possibly proviso (a), applies. Its contention therefore for the admission of the parol evidence which won the approval of the learned judge was that not all the terms had been incorporated in the agreement. If this contention so generally stated and understood had any foundation at law, then it would be open to any party to a 30 litigation concerning an agreement to say that the agreement which is the subject matter of the dispute, did not contain all the terms thereof and to seek to introduce such terms or even terms which might not even have been within the contemplation of the other party. No agreement would then be safe from being re-written by one party in a court of law. I think and I say so with respect, the fundamental mistake made by the learned judge is to conclude simply and without qualification that section 92 applies only to a case where all the terms of the agreement have been reduced to writing. But that is not what section 92 says. It merely says “where the terms…” and by referring back to section 91, it means where the terms of a contract have been reduced to writing, as in this particular agreement they had been, the contract could only be proved by the document itself, and it is not open to the respondent to seek to introduce and the judge to admit evidence that would, inter alia, add new terms to it. However section 92 allows, so far as it concerns this particular case, evidence in proviso (b) … and in proviso (c) 31 … The provisoes qualify but do not eliminate the main provisions of the section, so that unless the additional evidence sought to be adduced falls within the scope of any of the provisoes, it should not be allowed to be introduced as it would be to contradict, vary, add to or subtract from the terms of the agreement. …”. [emphasis added] The Federal Court held that the parol evidence was wrongly admitted by the trial judge as the evidence did not fall within either proviso (b) or proviso (c) of section 92 EA 1950 but was evidence adding a new term or terms to the agreement. [39] In this appeal matter, since the Defendant took the erroneous position that section 92 EA 1950 does not apply, the SPAs must be interpreted without reference to the subsequent dealing between the parties in order to preserve the certainty given by written contracts (see Asiapools (M) Sdn Bhd v. IJM Construction Sdn Bhd [2010] 2 CLJ 28). 32 [40] Although the point on the parole evidence rule on its own is, in my view, adequate ground for the appeal to be dismissed, for the sake of completeness, I shall allude on the other issues that were raised at the appeal viz.:

Contradictions in the testimony of the Defendant’s witnesses The inconsistencies in the oral evidence as regards the sum of RM120,000.00 that was alleged to have been paid in cash to Ajib and the par value of the shares of the Defendant have been set out in paragraph 27(c) of this judgment. As the value of the Defendant’s shares is RM1.00, taking either version of the Defendant’s case, Ajib should have 77,506 or 197,506 shares issued to him. However, Ms. Ardila Fatima Binti Abd Wahab (PW2), Assistant Company Secretary testified that: “… Encik Ajib semasa syarikat ditubuhkan memegang sebanyak 10,000. … Seterusnya dinaikkan kepada 30,000 dan pada 1.9.2012, saya merujuk kepada Form 33 32A Encik Mohd Ajib. Dia telah transfer sebanyak 15,000.”. As regards DW2’s evidence during re-examination that “… hasil daripada siri perbincangan, mesyuarat dan persetujuan bersama apa juga wang yang ingin dimasukkan dan dilaburkan dalam syarikat adalah merupakan wang pusingan yang digunakan untuk pembangunan hartanah dan juga apa juga perjalanan syarikat yang akan dilalui. … apa juga modal pusingan untuk semua pembangunan ataupun projek-projek yang nak dilaksanakan adalah mengikut peruntukan-peruntukan kewangan yang dah dibincangkan tadi. Tidak mengikut modal berbayar.”, I find that this explanation is vague and does not provide a satisfactory answer to clear the doubts that have arisen as a result of the contradictory evidence given by the Defendant’s witnesses. In light of the inconsistencies in the oral testimonies of its witnesses, I am unable to agree with the Defendant’s contention that the evidence of DW1, DW2 and DW3 suffice to prove the existence of Tony Ong’s instruction regarding the contra payment to Ajib on a balance of 34 probabilities. To the contrary, evidence from Tony Ong and Ajib is key to the Defendant’s case and under the circumstances, is essential in order for the Defendant to discharge its evidential burden of proof.

The handwritten note in exhibit D-15 As mentioned earlier, Tony Ong was alleged to have given the instructions for the sum of RM197,506.00 to be paid to Ajib for brokering the deal in a discussion held around the end of February 2012. However, no contemporaneous document was executed nor was any notation made on the day of the discussion to that effect. The note at the bottom of exhibit D-15 was written by DW1 only in May 2012. Differing amounts are stated in the handwritten notes on the first page (RM197,505.50) and second page (RM197,506.00) of exhibit D-15. In addition, the first page of the document was signed by Tony Ong and Ajib on 25.5.2012, and by DW3 on 26.5.2012. In light of these, the issue arises as to whether Tony 35 Ong and Ajib were aware of DW1’s handwritten notes at the time that they signed the first page of exhibit D-15 and had agreed to the same. This issue remains unanswered because neither Tony Ong nor Ajib were called by the Defendant to give evidence. The Notes of Evidence show that there was intensive cross examination of DW1 and DW3 on this matter and as Mr. Andrew Fernandez had rightly pointed out, the sums of money alleged to be paid by Ajib consisted of payments which were unrelated to the SPAs, specifically “SMS Developer Sdn Bhd”, “Melaka Project” etc. In fact, DW1 and DW3 admitted under cross examination that the amount of RM197,506.00 is made up of all the shortfalls that were to be paid to the Defendant and SMS Developer Sdn Bhd. where at least RM165,000.00 was paid to SMS Developer Sdn Bhd. Therefore, it is apparent that, even in the event that all RM197,506.00 was utilised to purchase shares on behalf of Ajib, the shares were not all of the Defendant’s. 36

Non-calling of Tony Ong and Ajib The SCJ had correctly drawn an adverse inference pursuant to section 114(g) EA 1950 against the Defendant for failing to call Tony Ong. This Court was informed that Tony Ong passed away only after the trial had concluded and before the SCJ delivered her decision. Therefore, the Defendant should have made attempts to secure the attendance of Tony Ong as a witness for the trial. The fact that Tony Ong is PW1’s husband does not prevent the Defendant from issuing and serving a subpoena on him. As regards Ajib, the Defendant had issued and served a subpoena on him. The Notes of Evidence show that the Defendant’s counsel had informed the court that Ajib had received the subpoena and that counsel had met Ajib prior to that but thereafter, counsel’s call was not answered and nor were text messages replied. Learned counsel then elected to dispense with Ajib’s testimony on the ground that he did not 37 want to postpone the case so as to obtain a warrant of arrest. Nevertheless, on the final date of trial, the SCJ did inquire again about counsel’s stand concerning Ajib where counsel said that it appears that Ajib is “running away” from them and it is likely that Ajib will not co-operate and be a hostile witness even if he is called to the witness stand (see RoA Part B, Volume 2, pages 190, 219, 242 and 243). In the upshot, the Defendant’s failure to call Tony Ong and Ajib is fatal to the Defendant’s case taking into account the weaknesses exposed in the evidence of the three witnesses that had testified for the Defendant during the trial. He who alleges must prove the allegation. Thus, it was incumbent on the Defendant to produce these two individuals as witnesses to prove the alleged arrangement on contra payment. The fact that the Defendant was unable to secure their attendance for whatever reasons, and where Ajib is concerned, to opt not to call him, did not shift the burden to the Plaintiff (see the decision of the Court of Appeal in Juahir Sadikon v. Perbadanan Kemajuan Ekonomi Negeri Johor [1996] 4 CLJ 1). 38

Transfer of the said Lands to the Defendant The Defendant submitted that in normal conveyancing practice, the total purchase price must be settled first by the purchaser before the vendor transfers the property to the purchaser. In this case, the said Lands were duly transferred to the Defendant. Due to this fact, the Defendant again contended that the Plaintiff knew about the contra payment. In her evidence, PW1 said that the Plaintiff did not raise any objection to the registration of the transfer of the said Lands despite the balance purchase price not having been paid in full because the Plaintiff did not know that the property was transferred. PW1 further stated that sometime in 2016, Ajib told the Plaintiff that the said Lands had been transferred and one of the properties had been sold. Later in the trial, DW1 was asked regarding the bottom portion of the second page of exhibit D-15 which states: 39 “PAID TO AZURE 300,000 7 UNITS (PENDING TRANSFER) 328,927” However, DW1 cannot recall about this transaction except that the 7 units not paid is related to SMS Development Johor Sdn Bhd. Based on Clause 4.1 of the SPAs, the parties had, simultaneously with the execution of the SPAs, executed a valid Memorandum of Transfer (‘MoT’) and all other relevant documents necessary for effecting the transfer of the said Lands to the Defendant and had deposited the same with the solicitors for the Defendant. By virtue of Clause 5.1, the Defendant’s solicitors were authorised by the parties to submit the MoT for the purpose of adjudication of stamp duty payable to facilitate and effect the registration of the MoT subject to the usual undertaking by the solicitors not to present the same for registration until the balance purchase price has been fully settled in accordance with Clause 2.01(b). 40 Having read the Notes of Evidence several times over, I find that the evidence surrounding the transfer of the said Lands by the Plaintiff to the Defendant was not fully developed at the trial. The witnesses were not probed to provide greater clarity on the sequence of events which led to the registration of the transfer. It is common knowledge that there have been instances where the MoT is presented at the Land Office or Registrar’s Office and registration is effected although the purchase price for the property in question has not been fully paid. The SCJ did not allude to this point in her GoJ. On my part, and taking into account the evidence that was produced at the court below, I am not prepared to find that the Plaintiff must have known about the contra payment just because the said Lands were transferred to the Defendant. 41

(B) Whether the SCJ had erred in fact and in law by allowing the Plaintiff’s claim for late payment interest at the rate of 8% per annum in the sum of RM431,625.87 [41] The provision on late payment interest is set out in Clause 2.1(c) of the SPAs as follows: “2.1 The Purchase Price shall be paid by the Purchaser to the Vendor in the following manner:- …

in the event the Purchaser fails to pay the Balance Purchase Price within the Completion Date, the Vendor shall grant to the Purchaser such extension of time of thirty (30) days from the date of the expiry of the Completion Date (hereinafter called “the Extended Completion Date”) with or without request PROVIDED THAT the Purchaser shall pay to the Vendor interest at the rate of eight per centum (8%) per annum on the Balance Price (hereinafter called “Late 42 Payment Interest”) then outstanding calculated on day to day basis from the expiry of the Completion Date until the date of full payment.”. [42] Based on PW1’s Witness Statement, late payment interest began to run from 28.12.2011 i.e. one day after the expiry of the Completion Date (27.12.2011) on the then outstanding sum of RM3.5 million. PW1 further stated that thereafter the Defendant made four payments and by the date of filing of the Writ and SoC, the total late payment interest is RM431,625.87. This amount can also be seen in the Plaintiff’s Debtor Statement marked as exhibit P-1. The fact that the Defendant had made five payments amounting to RM4,802,494.00 as at 31.10.2013 is part of the Statement of Agreed Facts (paragraph

(g), RoA Part C Volume 4, page 1068). Only the first payment was made before the expiry of the Completion Date and thus had no late payment interest being imposed. [43] Learned counsel for the Plaintiff submitted that having found that the Defendant had breached the SPAs, the SCJ had correctly concluded 43 that Clause 2.1(c) of the SPAs is triggered thereby entitling the Plaintiff to late payment interest at a rate of 8% per annum. [44] On the other hand, the Defendant contended that the claim for late payment interest is a sham claim and an afterthought because prior to the filing of the Writ and SoC, the Plaintiff did not issue any letters to inform the Defendant that Clause 2.1(c) of the SPAs was being invoked. It was also submitted that it is unfair for the Plaintiff to allow interest to run for almost 5 years without any notice being sent to the Defendant and on the authority of Bersatu-BHV Sdn Bhd & Anor v Eng Ee Ee [2016] MLJU 481, the Court should not assist an indolent party. The case of MBF Finance Berhad v Muruges a/l Kuppusamy [2012] MLJU 424 was also cited to support the Defendant’s proposition that the claim for late payment interest should not be allowed as the delay on the Plaintiff’s part in filing the suit had caused prejudice, injustice and an unreasonable burden to the Defendant due to the accumulated late payment interest. The period of delay, according to the Defendant, coincides with Tony Ong’s tenure as CEO of the Defendant whereby the suit was filed after Tony Ong no longer held that position. 44 [45] The Plaintiff’s response as regards the Defendant’s contention on the pre-requisite of the issuance of a notice or demand before the Plaintiff can claim for late payment interest is that this fact was not pleaded in the Defence. Since it is trite law that a party is bound by its pleadings, the Defendant should be precluded from raising this matter at the trial. [46] The SCJ’s reasoning on this issue can be gleaned from paragraphs 71 – 74 of her GoJ (Additional RoA, pages 43 -45). Essentially the SCJ was of the view that the parties, having signed the SPAs, must be bound by the terms and conditions in the SPAs. In this case, the Defendant did not dispute its obligations under Clause 2.1(c) of the SPAs. Moreover, the Plaintiff had made verbal demands for the late payment interest to the Defendant, through Ajib. The suit was filed within the limitation period and the Plaintiff, having proved that the Defendant failed to pay the balance of the purchase price on a balance of probabilities and the said Lands having been transferred to the Plaintiff, is thus entitled to invoke Clause 2.1(c) of the SPAs. 45 [47] To my mind, the SCJ did not err in coming to the conclusion as she did. It is trite law that when a party signs a contract knowing it to be a contract which governs the relations between them, then in the absence of fraud or misrepresentation, the party signing the contract is bound by it (per Abdul Malik Ishak J in Wan Salimah bte Wan Jaffar v Mahmood Bin Omar (Anim bte Abdul Aziz, Intervener) [1998] 5 MLJ 162). The Defendant, in paragraph 5 of its Defence (RoA Part A, Volume 1, page 34), denied its liability to pay late payment interest on the ground that all payments under the SPAs have been made. It was also pleaded that the Plaintiff had not made any demands for payment from the Defendant before the Writ and SoC was filed on 15.6.2017. The calculation of late payment interest was not challenged by the Defendant. [48] Reading Clause 2.1(c) of the SPAs, there is no ambiguity regarding the Defendant’s mandatory obligation to pay “Late Payment Interest” as referred in the SPAs at the rate of 8% per annum on the balance purchase price outstanding calculated on day to day basis from the expiry of the Completion Date until the date of full payment. The 46 natural and plain meaning of the Clause should be given effect. There is no basis for the Defendant to now unilaterally impose a requirement for a demand, notice or reminder to be given by the Plaintiff to the Defendant before the said Clause can be invoked by the Plaintiff. To do so would be contrary to the clear intention of the parties to the SPAs. Allowing DW2’s and DW3’s oral testimonies on the alleged requirement of written notice or letter for the imposition of Clause 2.1(c) of the SPAs would again run foul of sections 91 and 92 EA 1950. [49] Even if the Court takes the view that the issue of the requirement of giving prior demand or notice before late payment interest can be imposed is part of the Defendant’s pleaded case, the Defence in paragraph 5 reads, “Malahan, Plaintif sama sekali tidak pernah menuntut apa-apa bayaran daripada Defendan sebelum ini.”. The Defence did not state that the demand must be in writing. Throughout PW1’s evidence during cross-examination and re-examination, she had maintained that the Plaintiff did verbally inform Ajib that the Plaintiff is invoking the clause on late payment interest. 47 [50] On the issue of delay on the Plaintiff’s part in filing the suit, PW1 in her Witness Statement and during re-examination had explained that upon discovering that the said Lands had been transferred to the Defendant although the balance purchase price has not been fully paid, the Plaintiff had enquired regarding payment of the same whereupon Ajib assured the Plaintiff that the balance purchase price together with the late payment interest will be settled. The Plaintiff had no reason to doubt this as the Defendant has ties with the Naza Group. This is how PW1 describes the situation in her re-examination: “And he said, Mohd Ajib always used to say, no worry it is a Naza Group. So, they will pay you then so we just that why was drag for so long.”. [51] As for the cases cited by learned counsel for the Defendant, I am of the view that the facts in Bersatu-BHV Sdn Bhd and MBF Finance Bhd are distinguishable from the facts in the present appeal. In Bersatu-BHV Sdn Bhd, the letter by the solicitors acting for the respondent to challenge the termination of the sale and purchase agreement in that case was sent almost one year after the letter of 48 termination of the said agreement was issued by the 1st. appellant. The suit was filed by the respondent 14 months after the termination of the sale and purchase agreement and by then the property in question had been transferred to a third party. The Court of Appeal found that the respondent was an indolent party and did not deserve the court’s assistance because if the respondent was serious about purchasing the property, the respondent should have been more diligent and persistent in pursuing her right and should have filed the claim for the property at the earliest available opportunity (per Abdul Aziz Abdul Rahim JCA at paragraph 35 of the judgment, supra). [52] Whereas in MBF Finance Bhd, the plaintiff claimed judgment against the defendant for an amount which remained outstanding under a loan agreement after foreclosure proceedings and the property having been auctioned off. The High Court had considered the materials and factual matrix of the case and found that the plaintiff had, in his affidavit, admitted that there was a delay in proceeding with the auction of the property and had given the reasons for the said delay, namely due to the merger of the plaintiff with Arab Malaysian Finance Berhad. The court went on to find that the merger 49 and the delay caused as a result thereof was not foreseeable at the time of the execution of the loan agreement. Hence, the defendant should not be penalised or burdened with payment of additional interest and late payment interest during the period of delay which was caused solely by the plaintiff. [53] In this appeal, the Notes of Evidence show that PW1 was consistent in her answers throughout regarding the fact that the Plaintiff had verbally informed Ajib that late payment interest was being claimed. The evidential burden then shifted to the Defendant to prove that there were no such conversations between PW1 and Adib. The failure by the Defendant to call Ajib as a witness entitled the SCJ to conclude that “… tuntutan Plaintiff masih dalam tempoh masa dan pihak-pihak adalah tertakluk kepada terma dalam Perjanjian Jual Beli Tersebut. Plaintif juga ada menuntut perkara ini secara lisan kepada Defendan melalui Muhammad Ajib yang bertindak sebagai broker bagi transaksi penjualan tanah tersebut dan dimaklumkan Defendan akan membuat bayaran kepada Plaintif.” (see paragraph 72 GoJ). 50 Conclusion [54] In the premises, it is my considered view that the SCJ had carefully evaluated the documentary and oral evidence adduced at the trial before coming to her decision as reflected in the GoJ. Her conclusion is not one which no reasonable judge could have reached. Therefore, applying the “plainly wrong” principle underlying appellate intervention, this not a fit and proper case for such intervention. Accordingly, the appeal was dismissed with cost. (ALIZA SULAIMAN) JUDICIAL COMMISSIONER HIGH COURT NCvC 1 KUALA LUMPUR Dated: 28 February 2019 51 Counsel/Solicitor: For the Appellant: Abd Shukor Tokachil (Messrs. Shukor & Associates Suite 15.10 & 15.22, 15th Floor, Wisma Zelan No.1, Jalan Tasik Permaisuri 2 Bandar Tun Razak 56000 Kuala Lumpur) For the Respondent: Andrew Fernandez (Messrs. Chooi & Company 39 Court @ Loke Mansion 273A, Jalan Medan Tuanku 50300 Kuala Lumpur)

the Defendant’s witnesses had given evidence which contradicted the pleaded defence whereby –

the par value of the shares of the Defendant was said to be RM1.00 and so, if Ajib was to have paid RM77,506.00 for his shares, he would have 77,506 shares; and

(ii) from the testimony of DW2 and DW3, the conclusion drawn is that all RM197,506.00 had been used to purchase Ajib’s shares in the Defendant. 17 In view of the abovementioned contradictions in the oral evidence of the Defendant’s witnesses, the Defendant needed to have called Tony Ong and Ajib to testify in court to support its Defence and to counter the Plaintiff’s claim. The presumption in section 114(g) of the Evidence Act 1950 [Act 56] (‘EA 1950’) was invoked by the SCJ in light of the Defendants failure to call Tony Ang as a witness. - The alleged contra payment: Commission to Ajib in the form of RM120,000 cash and RM77,506.00 for the purchase of Ajib’s 15,000 shares in the Defendant [28] The starting point in my analysis of the oral and documentary evidence before the trial judge and her GoJ is to state firstly, that the SCJ had correctly referred to, and applied, the provisions of sections 91, 92, 101 and 103 EA 1950. For ease of reference, these statutory provisions are set out herein below: 18 “Burden of proof