Suria Synergy Constructors (M) Sdn. Bhd. v Kerajaan Malaysia (WA-21NCvC-123-08/2021)

DR AHMED ELTIGANI ABDELRAHIM AHMED ELMANSOURI

ABDELRAHIM MUSA MAHGOUB HAMADELNIL (NO. PASPORT: P04974145) ... RESPONDEN-RESPONDEN JUDGMENT Introduction 1. In this case the Plaintiffs who are Sudanese citizens collaborated with the Defendant a Malaysian citizen to set up a company called 08/01/2024 15:28:35 WA-21NCvC-123-08/2021 Kand. 86 Valencia Health Sdn Bhd (“the Company”) to trade and supply in fruit juices.

The Company was to be run by the Defendant as an employee as well as a 5% shareholder. A Company bank account was opened up to facilitate the business with the Defendant being the sole signatory. The Plaintiffs had deposited a sum of money in the bank account.

On the failure of the Defendant to update the Plaintiffs on the income and expenditure of the Company the Plaintiffs sent 2 legal notices to compel the Defendant to update the Plaintiffs on the income and expenditure of the Company which the Defendant failed to comply. Hence the civil suit filed against the Defendant.

After a full trial the learned Sessions Judge allowed the Plaintiffs’ claim and directed the Defendant to pay 2 sums of money. The 1st sum of money of 78,926 ADH equivalent to RM88,827.21 for the money received by the Defendant from the Plaintiffs as well as his salary of 5 months. The 2nd sum of RM 28,374 was the proceeds of sales of the Company. The Court’s decision on learned Sessions Judge’s judgment Existence of valid agreement 5. The learned Session Judge made a finding that there existed a contract between the Plaintiffs and the Defendant although the terms of the contract were not in writing. 3 6. According to the learned Sessions Judge the contract between the parties could be deduced from the communications between the parties by way of e mail as well as the conduct of the Defendant providing the Plaintiffs with all the statutory forms to be filled up for the formation of the Company.

The Court agrees and accepts the finding of the learned Sessions Judge that there was a valid contract between the Plaintiffs and the Defendant based on the communication between the parties as well as the conduct of the Defendant. This proof of communication is exhibited in the common Bundle of Document filed by the parties in this case.

In the Court’s view the communication and conduct of the parties proves the existence of a valid agreement between the parties to collaborate to form the Company for the purposes of starting the business in Malaysia.

What amounts to an agreement between the parties is succinctly stated in section 2 of the Contracts Act 1950 as follows: In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context-

when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to the act or abstinence, he is said to make a proposal;

when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted: a proposal, when accepted, becomes a promise;

the person making the proposal is called the "promisor" and the person accepting the proposal is called the "promisee";

when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise;

every promise and every set of promises, forming the consideration for each other, is an agreement;

Also relevant is section 3 and section 4 of the Contracts Act 1950 which stipulates what amounts to communication between the parties and when the communication is deemed to be completed. The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting, or revoking, by which he intends to communicate the proposal, acceptance, or revocation, or which has the effect of communicating it. (Section 3) 1) The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. 2) The communication of an acceptance is complete-

as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; and

as against the acceptor, when it comes to the knowledge of the proposer. (Section 4)

Further under the Evidence Act 1950 conduct of a person is a relevant fact to be considered in a civil suit. Section 8(2) of the Evidence Act 1950 provides as follows:

The conduct of any party, or of any agent to any party, to any suit or proceeding in reference to that suit or proceeding, or in reference to any fact in issue therein or relevant thereto, and the conduct of any person an offence against whom is the subject of any proceeding, is relevant if the conduct influences or is influenced by any fact in issue or relevant fact, and whether it was previous or subsequent thereto. Explanation 1 - The word "conduct" in this section does not include statements unless those statements accompany and explain acts other than statements; but this explanation is not to affect the relevancy of statements under any other section of this Act. Explanation 2 - When the conduct of any person is relevant any statement made to him or in his presence and hearing which affects his conduct is relevant. Breach of the agreement 12. According to the learned Session Judge the Defendant had breached the agreement between the parties when he failed to register the Plaintiffs as the directors of the Company. In the Court’s view the registration of the Plaintiffs as directors of the Company is a key requirement for the agreement to colloborate between the Plaintiffs and the Defendant to do business in Malaysia.

The learned Sessions Judge also dismissed the Defendant’s reasons that he could not register the Plaintiffs as directors of the Company as they had not supplied him with the relevant documents.

The Court agrees with this finding of the learned Session Judge that the reasons given by the Defendant has not been substantiated. The burden to prove that the Plaintiffs had failed to supply the relevant document lie upon the Defendant. This is clear from section 103 of the Evidence Act which stipulates upon whom is the burden to prove a 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.

In the Court’s reading of the notes of evidence the Defendant had not adduced any evidence indicating any attempts to get the relevant documents from the Plaintiffs and therefore has failed to discharge the burden of proof placed upon him. On the converse the communication between the Defendant and the Plaintiffs show that whatever documents sent by the Defendant were duly signed and returned to the Defendant by the Plaintiffs. The e mail between the parties indicates this.

The learned Session Judge also found that the Defendant had failed to supply the income and expenditure account to the Plaintiffs when requested by them.

The Court accepts this finding of the learned Judge as the Plaintiffs have adduced the formal request for the income and expenditure accounts through their lawyers. This request was ignored by the Defendant. Although there are no express terms or any terms in writing in the Court’s view such a request for the income and expenditure account can be implied from the agreement between the parties.

In short the Court agrees with the learned Session Judge that the Defendant had breached the agreement between him and the Plaintiffs in this case. Remedy for breach 19. In this case the learned Session Judge found that the Defendant had admitted to receiving the monies to register and run the Company from the Plaintiffs. This admission is backed by the fund remittance slip by the Plaintiffs which was adduced in this case.

The Court accepts this finding of the learned Sessions Judge as under section 21 of the Evidence Act 1950 Admissions are relevant and may be proved as against the person who makes them or his representative in interest;

The learned Sessions Judge further found that as a result of the Defendant not performing his duties and responsibilities under the agreement, the Defendant has to return back all the monies received from the Plaintiffs.

In the Court’s view the learned Sessions Judge’s finding is backed by section 40 of the Contracts Act 1950 which states that: When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.

Section 65 of the Contracts Act 1950 provides the remedy available to a party against the party breaching the agreement and not performing its promise as follows: When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he has received any benefit thereunder from another party to such contract, restore the benefit, so far as may be, to the person from whom it was received. Conclusion 24. Having regards to the above factors the Court dismissed the Defendant’s appeal against the learned Sessions Judge’s decision with a cost of RM10,000. Dated: 27.12.2023 sgd DATO’ HAJI AKHTAR BIN TAHIR Judge High Court of Malaya, Kuala Lumpur PARTIES For the Appellant: Nama Peguamcara: Nizam Bashir Tetuan Nizam Bashir & Associates, C3-2-5, No. 1, Jalan Dutamas 1, 50480 Kuala Lumpur, Wilayah Persekutuan. For the Respondant: Nama Peguamcara: Abdelrahim Musa Mahgoub Hamadelnil Tetuan Jeeva Partnership D-22-03, Menara Suezcap 1, KL Gateway, No. 2, Jalan Kerinchi, Gerbang Kerinchi Lestari, 59200 Kuala Lumpur.