Tan Kian Soon v MD Zukri Bin Sallleh (BA-12ANCC-31-10/2016)

This is an appeal by the Appellant who is the Plaintiff, against the Sessions Court’s decision in dismissing the Appellant’s Notice of Application to strike out the Respondent’s (the Defendant), Counterclaim under Order 18 rule 19 ROC 2012 on 25.11.2016.

The Respondent filed a counterclaim against the Appellant a sum of RM2,600,000.00 for the alleged undertaking by the Appellant for successfully obtaining the listed projects and honorary on Defendant’s assistance.

This appeal is heard together with another appeal, case number BA- 12ANCC-25-10/2016 between the same parties, where the Appellant is appealing against the Sessions Court’s decision which dismissed the Appellant’s Notice of Application for summary judgment for the sum of RM518,203.00.

For ease of reference, in this judgment, the parties will be referred to as they were in the Sessions Court. 3

The relevant factual background giving rise to this appeal based on the written submissions and pleadings may be briefly stated as follows:

Based on the appeal case number BA-12ANCC-25-10/2016, the Plaintiff filed a claim against the Defendant for a summary judgment for the sum of RM518,203.00 for the alleged premium payment for a piece of land for the Defendant. This is as narrated where Plaintiff claimed that by a letter of 9.4.2012 from the Pejabat Pengarah Tanah dan Galian, Wilayah Persekutuan (the “Local Authority”) to the Defendant, the Local Authority had agreed to grant a title of a piece of land, Lot 165, Jalan Jelatek, Seksyen 88, Bandar Kuala Lumpur (the said Land) to the Defendant. According to the Plaintiff, in accordance with Form 5A, the Plaintiff advanced the sum RM518,203.00 on Defendant’s request, on or around 8.10.2012 and the Form dated 9.4.2012 was issued to the Defendant.

The Plaintiff claimed that as the arrangement for the monetary advancement failed, the Plaintiff claimed for the return of his monetary advancement of RM518, 203.00.

The Defendant on the other hand, denied that the Defendant had agreed to any monetary advancement and never agreed to sign any formal agreement nor directed the Plaintiff to advance the amount of RM518,203.00 for the said Land. The Defendant 4 claimed that, in the alternative, the Plaintiff may on its own personal capacity or willingness advanced the RM518,203.00 to the Defendant without the Defendant’s knowledge in order to get Defendant’s assistance for other projects or the Plaintiff felt obliged to repay for Defendant’s assistance in getting the projects to which the Defendant counterclaimed for RM2,600,000.00 the alleged undertaking made by the Plaintiff.

The Defendant claimed that the Plaintiff had agreed during one negotiation between the Plaintiff and the Defendant in the presence of one Tengku Ibrahim that the Plaintiff will pay the Defendant RM1,000,000.00 as full settlement but the Plaintiff had failed to pay and Defendant is claiming for the RM260,000.00.

The Defendant claimed that the Plaintiff had received Defendant’s assistance in getting the project for the construction of six oil tanks through the good relationship between the Defendant and the Chief Executive Officer’s Company, Eastern Pacific Industrial Corporation Berhad (EPIC) that was introduced to the Plaintiff.

The Defendant had filed an originating summons to transfer the Defendant’s Counterclaim on 10.2.2017, to the Shah Alam High Court. 5

The Plaintiff on the other hand claimed that out of the projects listed in Defendant’s Defence and Counterclaim, only one project for the construction of six oil tanks was successfully obtained by way of tender process, awarded by EPIC to the Plaintiff. The Plaintiff also claimed that if there is any truth about the alleged undertaking, the Plaintiff’s application for striking out under Order 18 rule 19 of ROC 2012 should be allowed as the alleged undertaking cannot be enforced. Plaintiff’s Submission [6] The learned counsel for the Plaintiff submitted that only one project for the construction of six oil tanks was successfully obtained by way of tender process where the Plaintiff was awarded by Eastern Pacific Properties Sdn Bhd, a wholly owned subsidiary of EPIC, a Terengganu State Government Linked Company (paragraph 4 Plaintiff’s Affidavit In Support, page 55 of Appeal Record) and that the Defendant did not dispute that the Plaintiff only obtained one project out of the list of projects. [7] The Plaintiff’s counsel averred that the alleged undertaking by the Defendant will be invalid under section 24 and section 25 of Contracts Act 1950 as such undertaking is an illegal consideration and would be against public policy as it would amount to manipulation of tender process. In relation to this, the Plaintiff’s counsel relied on the Federal Court case of Merong Mahawangsa Sdn Bhd v Dato’ Shazryl Eskay bin Abdullah [2015] 5 MLJ 619 where the question before the Federal Court was, ‘Whether an agreement to provide services to influence the decision of a 6 public decision maker to award a contract is a contract opposed to public policy as defined under s. 24 of the Contracts Act 1950 (‘the Act’) and is therefore void?’. The Plaintiff’s counsel submitted that the Federal Court’s case of Merong Mahawangsa (supra) decided unanimously in the affirmative and based on Merong Mahawangsa case (supra) which is similar to the facts of the current case, where the procurement of the bridge project was based on respondent’s close relationship with Government of Malaysia and one Dato’ Seri Megat Junid, the alleged undertaking or promise in the current case would be contrary to public policy and should be null and void. [8] The Plaintiff’s counsel also relied on the Court of Appeal case of China Road & Bridge Corp v DCX Technologies Sdn Bhd [2014] 5 MLJ 1 in relation to section 24 of Contracts Act 1950, that it would be for the Court to consider whether the consideration or object of an agreement is void on the grounds of public policy irrespective of whether parties have pleaded it or not or the issue was taken at the trial court. [9] The counsel for the Plaintiff asserted that the project awarded to the Plaintiff was through a proper tender process based on the letter from Easter Pacific Properties Sdn Bhd dated 27.12.2012 (pages 79 – 82 of Appeal Record). It was submitted that the Defendant has not proven that such award was obtained through his assistance and submitted that if there was any truth, the Defendant had failed to perform his part of the promise and is therefore not entitled to claim the alleged promises amount of RM2,600,000.00 (paragraph 4 of Plaintiff’s Affidavit In Support, page 55 of Appeal Record). The Plaintiff’s counsel submitted that the Defendant’s 7 claim is scandalous, frivolous or vexatious and/or it may prejudice, embarrass or delay the fair trial of the action and/or is an abuse of Court’s process and that the application under Order 18 rule 19 ROC 2012 be allowed. Defendant’s Submission [10] Briefly, the learned counsel for the Defendant advanced several grounds and the main argument that the Plaintiff’s application should be dismissed is that the Plaintiff had failed to prove that Defendant’s Counterclaim falls under any of the four limbs of Order 18 rule 19 ROC 2012 and that the issue raised could be decided at a full trial. [11] The Defendant’s counsel averred relying on the case of Utusan Melayu (Malaysia) Berhad v Dato’s Sri Diraja Haji Adnan bin Haji Yaakob [2016] MLJU 302, submitted that the burden to prove under Order 18 rule 19 ROC 2012 application rests on the Plaintiff. It was submitted that the Plaintiff failed to argue at all material times to support its striking out application. It was also asserted that based on the case of Harapan Permai Sdn Bhd v Sabah Forest Industries Sdn Bhd [2011] 1 CLJ 285, the Defendant’s Counterclaim is not an abuse of the process of the Court and that the Defendant has a reasonable cause of action against the Plaintiff. 8 THE SESSIONS COURT’S DECISION [12] The Sessions Court dismissed the Plaintiff’s application under Order 18 rule 19 ROC 2012 with cost and the decision is partly reproduced for ease of reference: “6. Plaintif telah memfailkan permohonan bagi Penghakiman Terus namun Mahkamah telah menolak permohonan tersebut kerana Mahkamah berpendapat isu-isu yang dibangkitkan tidak sesuai untuk diputuskan secara perbicaraan melalui affidavit. Mahkamah berpendapat saksi-saksi perlu dipanggil untuk menentukan isu yang dibangkitkan. Alasan Penghakiman juga telah pun disediakan dan dikutip oleh peguam. Mahkamah mendapati Tuntutan Balas ini merupakan kesinambungan daripada tuntutan plaintif terhadap defendan. Mahkamah mendapati terdapat merit dalam isu yang ditimbulkan dalam pembelaan dan tuntutan balas defendan tersebut. Isu yang perlu diputuskan oleh Mahkamah ialah isu “perjanjian” yang dimasuki oleh plaintif dan defendan (samada lisan/formal) hendaklah dibuktikan.

Mahkamah juga perlu meneliti samada perjanjian tersebut merupakan perjanjian yang telah dicapai secara bersama dan suka rela (tiada unsur paksaan) kerana defendan menafikan alegasi plaintif. Defendan sebaliknya menyatakan ianya dicapai secara perbincangan dan persetujuan bersama. Pada peringkat ini, Mahkamah tidak dapat menentukan kewujudan 9 unsur paksaan/rasuah yang didakwa itu hanya melalui pengataan-pengataan dalam affidavit. Isu samada perjanjian itu sah/bertentangan dari segi undang-undang juga akan hanya dapat dinilai melaui perbicaraan penuh. Segala bukti dokumentari dan saksi-saksi yang dirujuk dalam pliding masing-masing hendaklah dipanggil. Mahkamah pada peringkat ini tidak dapat memastikan apakah yang sebenarnya yang telah dicapai dan dipersetujui oleh pihak-pihak semasa perbincangan tersebut. Namun jika terdapatnya unsur-unsur menyalahi mana-mana peruntukan undang-undang janayah, maka plaintif hendaklah membuat laporan polis dan melakukan tindakan sewajarnya. Mahkamah ini bukanlah forum yang sesuai untuk menentukan perkara tersebut.

Berdasarkan fakta plaintif, Mahkamah mendapati sememangnya wujud transaksi-transaksi seperti jual beli tanah, perjanjian formal (walaupun tidak ditandatangani oleh defendan), Surat Kuasa Wakil, serta persetujuan-persetujuan seperti pembahagian hasil jualan hartanah. Persoalannya, apakah hubungan plaintif dengan defendan dan mengapakah terdapat transaksi-transaksi sebegini? Mengapakah plaintif bersetuju membayar wang pendahuluan dengan jumlah sebegitu besar sedangkan tanah itu didaftar atas nama defendan? Mengapakah hasil jualan dibahagikan juga kepada defendan? Apakah peranan defendan dalam transaksi 10 tersebut. Fakta itu sedikit sebanyak menunjukkan seperti terdapat persetujuan bersama dan suka rela dalam perkara-perkara yang tertentu.

Fakta-fakta yang dibangkitkan dalam Penyata Tuntutan plaintif ini menjurus kepada sesuatu perjanjian yang telah dicapai di antara mereka. Defendan pula dalam Penyata Pembelaan menyatakan bahawa plaintif telah berhutang sejumlah wang bagi usaha/bantuan defendan untuk pemerolehan beberapa projek seperti mana yang dijanjikan. Oleh itu, Mahkamah perlu meneliti dan mempertimbangkan apakah kandungan Perjanjian Formal yang dinyatakan dalam pliding plaintif tersebut. Oleh kerana tuntutan plaintif dan tuntutan balas defendan saling berkaitan, maka Mahkamah berpendapat ianya hendaklah dibicarakan bersekali atas merit tuntutan masing-masing. Bagi tuntutan balas defendan, maka defendan hendaklah membuktikan isu yang dibangkitkan itu samada bermerit atau pun sebaliknya. ………. Di atas alasan-alasan ini, Mahkamah menolak permohonan plaintif di bawah A 18 K 19(1)(b), (c) dan (d) dengan kos RM3000-00.” 11 THE COURT’S FINDING [13] The burden to prove that the case is obviously unsustainable based on any of the four limbs stipulated under parts (a) or (b) or (c) or (d) of Order 18 rule 19 ROC 2012 rests with the applicant. There is an abundant of authorities on this where the decision of the Federal Court in the case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 3 as referred by the Defendant’s counsel in a recent Court of Appeal case of Utusan Melayu (Malaysia) Berhad v Dato’ Sri Diraja Haji Adnan bin Haji Yaakob [2016] MLJU 302 (Tab B of Respondent’s Bundle of Authorities), and a High Court decision of Direct Express (M) Sdn Bhd v Affin Bank Berhad [2016] MLJU 69, that such application under Order 18 rule 19 ROC 2012 should only be allowed in plain and obvious cases: “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.” [14] The burden to prove lies with the applicant was also endorsed in a recent case by the Court of Appeal in the case of Tan Boon Huat v Tan Boon Lee Civil Appeal No.: A-02(IM)(NCVC)-644-04/2016. Therefore, the Defendant’s Counterclaim to which this Court had treated it as a separate action from Plaintiff’s application for summary judgment, would now be for the Plaintiff to prove that the Defendant’s Counterclaim is unsustainable. To decide whether the counterclaim is ‘obviously unsustainable’ must be 12 scrutinised not on the word ‘unsustainable’ but rather the word ‘obviously’ which denotes that on the face of it, the claim must be plainly or evidently unsustainable in law: Pet Far Eastern (M) Sdn Bhd v Tay Young Huat [1999] 5 MLJ 558. [15] Moving on to Order 18 rule 19(1) of the ROC 2012 on striking out pleadings and endorsements, it provides that, “19(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that –

It discloses no reasonable cause of action or defence, as the case may be;

It is scandalous, frivolous or vexatious;

It may prejudice, embarrass or delay the fair trial of the action; or

It is an otherwise an abuse of the process of the Court, And may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be. 13

No evidence shall be admissible on an application under subparagraph(1)(a).

This rule shall, as far as applicable, apply to an originating summons as if it were a pleading.” [16] This Court holds the view that the heart of the matter is the alleged promise or undertaking and that it was connected to the Plaintiff’s application for summary judgement which was allowed by this Court. Reason being, this Court viewed that the main issue pertaining to both appeals, the summary judgment and striking out applications by the Plaintiff, is the issue of the conduct in paying money whether as an advancement or commission. Therefore whether such promise or undertaking to pay had been breached could not be regarded as no reasonable cause of action or defence, nor could it be scandalous, frivolous or vexatious. In addition, whether such undertaking is legal or otherwise must be decided in trial and cannot be determined by this Court simply by looking at the affidavit evidence. [17] There are a number of authorities to support this view. As correctly referred by the Defendant’s counsel in Harapan Permai Sdn Bhd v Sabah Forest Industries Sdn Bhd [2011] 1 CLJ 285, the Court of Appeal decided that it would be unsafe to conclude that the Plaintiff’s claim to strike out Defendant’s Counterclaim as an abuse of process of court as the issues raised would involve the evidence to be adduced through the process of examination-in-chief, cross-examination and re-examination. 14 [18] Nor can a trial be used as a fishing expedition to elicit evidence but for a claim, in this case counterclaim, to be obviously unsustainable, it cannot be exercised by a minute examination of the documents and facts of the case: Cepatwawasan Group Bhd v Tengku Dato’ Kamal Ibni Sultan Sir Abu Bakar [2008] 2 MLJ 915. Therefore, on the issue raised that such promise of undertaking is unlawful or illegal under section 24 and section 25 of the Contracts Act 1950 where the issue of credibility is involved, as the Defendant averred in its affidavit that Plaintiff alleged such undertaking as unlawful is defamatory to the Defendant (paragraph 9.1, Defendant’s Affidavit In Reply, page 59 of Appeal Record), this matter could be dealt with at discovery or by cross-examination. [19] This Court viewed that the Defendant’s Counterclaim should be sit down for argument notwithstanding that the chances of success are minimal. Furthermore, issues as to whether there was a promise to pay as commission should be dealt in a trial as was dealt with in Merong Mahawangsa (supra). The Court of Appeal’s case of China Road & Bridge Corp (supra) as referred by the Plaintiff’s counsel had lay down the principle that it would be for this Court to consider whether the consideration or object of a promise is void on the grounds of public policy irrespective of whether parties have pleaded it or not, is an issue to be taken at the trial court. [20] I too stand to be guided by the Supreme Court’s case of Bandar Builder (supra) which decided that where the claim did raise some question fit to be decided by a Judge, the mere fact the case may be weak 15 or not likely to succeed at the trial is no ground for the pleadings to be struck out. In light of the above reasons, I dismiss the Plaintiff’s appeal. Dated: 24 October 2017 (ZALITA BINTI DATO’ ZAIDAN) Judicial Commissioner Shah Alam High Court 16 SOLICITORS FOR THE APPELLANT: P.Y. CHONG LEE MAN HENG Tetuan H.M. Lee P-O3-01, Impian Meridian Commerze Jalan Subang 1, USJ 1 47600 Subang Jaya Selangor Darul Ehsan [Rujukan: 1948/JM/16/L] Tel: 03-5891 6810 Fax: 03-5891 6820 SOLICITORS FOR THE RESPONDENT: ASHMADI BIN OTHMAN Tetuan Zulpadli & Edham No. 24, Jalan Perumahan Gurney 54000 Kuala Lumpur [Rujukan: ZE(E)/L/1704/16] Tel: 03-2694 6979/ 03-2694 6997 Fax: 03-2691 1107