Tan Kok Soon v 1. ) Boo Kuang Loon (WA-22NCvC-493-08/2020)

BOO KUANG LOON

LEE EE HOE (NO. K/P: 640705-01-5057) … DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT [After Full Trial] Background [1] Preceding the commencement of this trial, Plaintiff’s counsel informed Court that parties have agreed that documents filed in Encls. and 49 to be put as Part B documents and marked as B1 and B2 respectively. The Plaintiff’s counsel made an oral application to amend the 10/07/2025 16:35:15 WA-22NCvC-493-08/2020 Kand. 75 writ and all documents pertaining to the Plaintiff’s name from “Tan Kok Soon” to “Termizi Tan Kok Soon”. The Court allowed this application as the Defendants’ counsel have no objection. [2] The Plaintiff’s claim in a nutshell are as follows:

(a)

2.5% finder’s fee on the total Gross Development Value (GDV) of the development project on Risda’s two plots of land known as Lot 169 and 170, Section 89, Jalan U-Thant, Kuala Lumpur. The Defendants paid the Plaintiff the RM250,000.00 as initial payment. The Developer for the said project is a company known as Fahad Holdings Sdn Bhd (later known as KOF Holdings Sdn Bhd).

RM19,500.00 per month for salary allowance and other benefits for 3 years amounting to RM19,500.00 x 36 months = RM702,000.00. [3] The Defendants contended that they are only liable to pay under the said Letter of Undertaking provided that their application for a development order to build 165 unit of apartments (11 storey) plus 2 storey of commercial units on the said Land as approved by Dewan Bandaraya Kuala Lumpur (DBKL) (B2 p. 3). The approval is a “condition precedent” to their liability under the said Letter of Undertaking. The application for the Development Order was to build the said 165 units of apartment plus 2 storey of commercial units was rejected by DBKL vide the Notis Penolakan dated

9.3.2015 (B1 p.1). Therefore, the Defendants claimed that they are not liable to pay the Plaintiff under the said Letter of Undertaking. [4] The Corporate Information (B1 p 61) of KOF Holdings Sdn. Bhd. (formerly known as Fahad Holdings Sdn. Bhd.) on 8.9.2016 reveals that Ong Boon Hee (DW4) is a Director and shareholder of KOF/FHSB. The 1st Defendant was a Director and shareholder of PTS Properties Sdn. Bhd. (PTS) (now in liquidation). Both the Defendants were Directors of Yuten Development Sdn. Bhd. (B1 p. 31). The 2nd Defendant is a shareholder (30% shares) and PTS (55% shares) as reflected in B1 p. 32. Evidence of the Plaintiff [5] The Plaintiff (PW1 in Encl. 54) referred to the Letter of Undertaking and state that the finder’s fees of 2.5% of the total gross development value of the project to be paid upon the Sales and Purchase Agreement of the sold units between the Vendor and the Buyers. The deal was between Pihak Berkuasa Kemajuan Pekebun Kecil Perusahaan Getah (Risda) and Fahad Holdings Sdn. Bhd. for Fahad to build 19 units of villas comprising of 7 units of Type A and 12 units of Type B. Reference is made to Risda’s Letter of Intent dated 25.7.2014 (B1 pp. 15 – 23). Until and unless the villas are actually sold, the Plaintiff was not entitled to any payment from the Defendants. [6] In his evidence, the Plaintiff states the mathematical calculation of the 2.5% finder’s fee, assuming all the 19 villas were to be built and sold based on the total gross development value (GDV) is RM141,950,000.00 x 2.5% = RM3,548,750.00. After deducting the initial payment of RM250,000.00 made to the Plaintiff, the Defendants shall pay the Plaintiff the sum of RM3,298,750.00. [7] In respect of the allowance and other benefits for all transaction the Defendants orally told the Plaintiff that his salary allowance was RM15,000.00 per month. PW1 estimated the value of benefits to be 30% of his salary (RM4,500.00) making the total salary and benefits to be RM15,000.00 + RM4,500.00 = RM19,500.00. [8] After the Joint Venture Agreement (JVA), the Defendants used another Company under their control namely YTB Development Sdn. Bhd. to take over from Yuten to be the joint-venture partner of FHSB (Fahad) and to be the turnkey contractor of the said project. Both Defendants are Directors of Yuten. (B1 p. 31), PTS holds 55% shares and the 2nd Defendant holds 30% shares of Yuten. (B1 p. 32). YTB Development Sdn. Bhd. is a wholly owned subsidiary of Yong Tai Berhad (YTB). (B1 p. 45). [9] On 7.4.2017 YTB entered into a Joint Venture Agreement with KOF Holdings Sdn. Bhd. to develop the said lands. The announcement made on 12.4.2017 (B1 pp. 44 & 45) stated that the gross development cost of the said project was RM155 million and the Plaintiff estimated the GDV to be around RM200 million. PW1 referred to a news report from the Star Online dated 14.4.2018 (B1 p. 46) entitled “Yong Tai, KOF Holdings, RISDA in RM200m Impression U-Thant project” on YTB undertaking the developer project on the said lands known as “Impression U-Thant (Residensi Mutiara U-Thant)” whereby the Defendants had chosen YTB to be the joint venture partner with KOF and to be the turnkey contractor of the said project. On 6.4.2017, one day preceding the above announcement in the Star, the Defendants caused PTS to enter into a Mutual Termination Agreement with KOF. In respect of the rejection letter by DBKL (B1 pp. 1 – 3), on appeal DBKL allowed the Defendants to build 108 units of apartments. According to the Plaintiff (witness statement Q. 56) the Defendants are liable to pay him the said finder fees based on the GDV and to appoint him as a project coordinator with salary allowance and other benefits whether or not the end result is to build apartments and not villas. Evidence of the 1st Defendant [10] The 1st Defendant (DW1 in Encl. 50) was the Director and shareholder (60% shares) of PTS. In early 2014, the Plaintiff referred to him a property development project. It was a joint venture with FHSB (now known as KOF) to develop a residential project on Lot 169 and Lot 170 of Jalan U-Thant Kuala Lumpur. FHSB had given PTS the right of construction and made it a Turnkey Contractor to develop the project. The 1st Defendant referred to the Letter of Undertaking prepared by the Plaintiff and the JVA. [11] The 1st Defendant also referred to the Deed of Novation made on 23.2.2015 (B1 pp. 48 – 51) between FHSB, PTS and Yuten Development Sdn. Bhd. whereby Yuten agreed to assume all of PTS responsibilities, obligations, rights, warranties, representations and undertakings in regards to the JVA. [12] In reference to the DBKL rejection letter, the 1st Defendant explained that the project became infeasible and the joint venture between FHSB and PTS/Yuten discontinued and was formalised vide a Mutual Termination Agreement on 6.4.2017 signed between KOF and PTS. This effectively and formally put the JVA between FHSB and PTS, FHSB and Yuten and the Deed of Novation to an end. With regards to the finder’s fee, this is not payable as there was no GDV generated or units sold from the JVA between FHSB and PTS/Yuten. In 2017, KOF applied to DBKL using their appointed architect and was subsequently granted a Development Order under a different project requirement. The Plaintiff filed this claim upon knowing that YTB Development Sdn. Bhd. has been appointed the developer of the Project. The Plaintiff was paid RM250,000.00 by the Defendants for his effort in linking PTS to FHSB. Evidence of the 2nd Defendant [13] The 2nd Defendant (DW2 in Encl. 51) is the 1st Defendant business partner. He referred the Plaintiff to the 1st Defendant property development company (PTS) and through the Plaintiff’s contact, the Plaintiff had managed to refer a property development project to PTS. In his witness statement, the 2nd Defendant echoed the evidence of the 1st Defendant. Evidence of DW3 (Hasnul Nazmi Mohammad) (Encl. 53) [14] The Defendants’ 3rd witness is the Director of HN Metropolis Planners since 2010. DW3 referred to a letter dated 28.1.2015 (B1 pp. 62 and 63) applying for a development order for a residential project for 2 plots of land at Lot 169 and Lot 170 Jalan U-Thant Kuala Lumpur. HN Metropolis Planners was appointed as a town planning consultant by PTS and was responsible to obtain a development order from DBKL. Thereafter DW3 referred the three rejection letters dated 9.3.2015 by DBKL (B1 pp. 1 – 3). Evidence of DW4 (Ong Boon Hee) (Encl. 52) [15] The Defendants’ 4th witness is the Director and shareholder of KOF Holdings Sdn. Bhd. that had a joint venture dealing with the Defendants’ companies. KOF was formerly known as Fahad Holdings Sdn. Bhd. and the change of name was effective 8.9.2016 (B1 p. 61). After the DBKL rejection letter, KOF on its own effort submitted a fresh application to DBKL through its appointed architect and was eventually granted a Development Order but on different project requirements. Plaintiff’s submissions (Encl. 68 and 72) [16] The Plaintiff’s submits regarding that the Defendants’ liability is conditional upon the approval of the said 165 units of apartment and commercial units. The Plaintiff submits that the Letter of Undertaking did not state such condition precedent. The Letter of Undertaking merely states that the Plaintiff’s obligation was to secure a joint venture residential development project between FHSB and PTS whereby both the Defendants of PTS Properties Sdn. Bhd. or their other related proxies or nominees shall abide and agree to the terms and conditions. [17] The Plaintiff further submits that DW1 was the one who submitted the application to DBKL to build apartments and eventually allowed to build 108 apartments. KOF/FHSB had to joint venture with DW1 where DW1 would be the turnkey contractor with profit sharing to undertake the said project. DW4 confirmed that everything was left to DW1 to handle. In cross-examination by the Plaintiff’s counsel DW4 replied as follows: “GK : Okay, now I refer you to the page 3 of Bundle B2. Are you aware of this application? DW4 : No knowledge. We appoint PTS. We don’t know. GK : So PTS apply for this application without telling you? Is that right? DW4 : Because we have signed an agreement with PTS, they will fully handle it.” [18] In the announcement on 12.4.2017 (B1 p. 45), Yong Thai stated that their subsidiary YTB had entered into a JVA dated 7.4.2017 with KOF. However, the Defendants ought to have produced this JVA to prove that by this JVA 108 apartments was to be built and it was KOF who managed to procure the development order and not YTB. [19] In paragraph 9 of the Defendants’ Amended Statement of Defence, the Defendants state that YTB did not make any announcement on 12.4.2017. DW1 during cross-examination (Notes of Proceedings Encl. 58 p. 48 para 1 – 5) admitted that YTB did make that announcement. [20] In the case of Abdul Rahman Bin Abdul Karim v. Abdul Wahab Bin Abdul Hamid [1996] 4 MLJ 623 at p. 630, the High Court decided as follows: “It is now trite law that when a party in giving his oral evidence in court deviates from his pleaded defence, then his account as narrated to the court must surely be suspect (see PR Panickar v Chwee May Kwong & Anor [1958] MLJ 136). The importance of pleadings can never be overstated. Lord Edmund Davis in Farrel v. Secretary of State for Defence [1980] 1 All ER 166 in cogent terms made these observations: For the primary purpose of pleadings remains, and it can still prove of vital importance. That purpose is to define the issues and thereby to inform the parties in advance of the case they have to meet and so enable them to take steps to deal with it.” [21] In the case of Mohamad Safuan Bin Wasidin & Anor v. Mohd Ridhuan Bin Ahmad (an infant) [1994] 2 MLJ 187 the High Court decided as follows: “(3) The first appellant's deviation from his pleaded defence would place the testimony of the first appellant highly suspect. It is trite law that where the particulars of negligence as pleaded by the defence differ drastically and entirely from the version given by the defendant in court, the court is entitled not to accept the defendant's story.” [22] The Plaintiff submits that the Defendants failed to produce evidence that is material and within their control. The Court when invoking adverse inference under s. 114 (g) of the Evidence Act 1950 must first be satisfied that the evidence was withheld and not merely made unavailable. Defendant’s submissions (Encl. 66 and 70) [23] The Letter of Undertaking and the JVA between FHSB and PTS are intertwined as agreed by PW1 in cross-examination (Notes of Proceedings Encl. 57 p. 16) and the Preamble and Clause 2 of the Letter of Undertaking. The JVA mentioned in Clause 1 of the Letter of Undertaking refer to the JVA between FHSB and PTS. [24] The Defendants submit that the Plaintiff’s entitlement of the 2.5% finders’ fees on the total GDV of the project was to be paid upon signing of the Sales and Purchase Agreement of the sold units between the vendor and the buyer would only derive from the units sold by PTS (as vendor) to the general public pursuant to the JVA. In witness statement Q.14 and cross-examination (Notes of Proceedings Encl. 57 p. 52), the Plaintiff states that unless the villas are actually sold, he is not entitled to any payment from the Defendants. [25] In light of the discontinuation of the project and the mutual termination, the subject matter which allowed for the appointment of the Plaintiff as Project Coordinator had ceased to exist. The appointment of the Plaintiff as Project Coordinator was contingent upon the outcome of the Project. In the absence of any ongoing project under the JVA, there was no role for the Plaintiff as a Project Coordinator between FHSB and PTS. Whether the Defendants are liable to pay the Plaintiff any allowance and benefits? [26] According to Clause 2 of the Letter of Undertaking, the allowance and benefits for all transaction between PTS Properties Sdn Bhd and land concession holder namely Fahad Holdings Sdn. Bhd. Since the Plaintiff was never appointment as such he was not entitled to any allowance or benefits. The Plaintiff’s claim for the RM15,000.00 per month allowance and RM4,500.00 benefits per month is unfounded and there was no such amount incorporated in the Letter of Undertaking clearly infers that this was meant to be determined in the future when the project kickstarted. Whether the Letter of Undertaking was prepared by the Plaintiff or the Defendants? [27] It was the Plaintiff who drafted and prepared the Letter of Undertaking and brought it to the Defendants. (PW1 witness statement Q12). The ‘contra proferentum’ rule against the Plaintiff can be invoked should there be any ambiguity in the terms contained in the Letter of Undertaking. (see Malaysian Motor Insurance Pool v. Tirumeniyar Singara Veloo [2019] 10 CLJ 731) [28] The Defendants submitted that the Plaintiff has failed to prove his claims on the balance of probabilities and therefore failed to discharged the burden of proof under s. 101 and s. 102 of the Evidence Act 1950. [29] The Defendants paid the Plaintiffs a sum of RM250,000.00 for his effort in securing the collaboration between PTS and FHSB. The project could not proceed due to DBKL’s rejection which resulted in the Mutual Termination of the JVA between PTS/Yuten and FHSB. On this basis, the Plaintiff is not entitled to the finder’s fee which are contingent upon the outcome of the JVA. The Law [30] The provisions with regards to Burden of Proof as set out in sections 101 and 102 of the Evidence Act 1950 as follows: “Burden of proof

(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. On whom burden of proof lies

The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.” Analysis and Decision [31] The Court shall analyse the contemporaneous documents produced by parties for the determination of the Plaintiff’s claim. The agreements amongst the various companies, the Plaintiff and the Defendants are outlined as below in chronological order: Date Documents Agreements 17.4.2014 B1 p. 24 Letter of Undertaking 8.8.2014 B1 pp 4-23

JVA between FHSB and PTS

1.2015 B1 p. 62-66

DO application by HN Metropolis to DBKL

2.2015 B1 pp. 48-51

Deed of Novation (FHSB, PTS & Yuten)

3.2015 B1 p.1

DO application rejection by DBKL

7.2015 B1 pp. 52- 61 JVDA between FHSB, PTS & Yuten 6.4.2017 B1 pp. 25-28 Mutual Termination Agreement 17.8.2020 Encl. 2 Plaintiff filed claim Letter of Undertaking [32] The signatories to the Letter of Undertaking dated 17. 4. 2014 (B1 p. 24) were Tan Kok Soon (Plaintiff), Boo Kuang Loon (1st Defendant) and Lee Ee Hoe (2nd Defendant). The Letter of Undertaking was signed in consideration of securing a joint venture residential property development project known as U-Thant Villa located at Lot 169 and Lot 170 of Jln. U-Thant, Kuala Lumpur between Fahad Holdings Sdn. Bhd. (Company No. 1051689-W) (FHSB) and PTS Properties Sdn. Bhd. (Company No. 985912-U) (PTS) whereby both the Defendants of PTS Properties Sdn. Bhd. or their other related proxies or nominees shall abide and agree to the following terms and conditions:

To pay 2.5% finder’s fee on the Total Gross Development Value of the project to Mr. Tan Kok Soon upon signing the Joint Venture Agreement. Payment will be made as follows: An initial RM250,000.00 to be paid upon signing the Joint Venture Agreement and the balance of the 2.5% finder’s fee to be paid upon signing of the Sale and Purchase Agreement of the sold units between the vendor and the buyer.

To appoint Mr. Tan Kok Soon as the Project Co-ordinator with allowance and other benefits for all transaction between PTS Properties Sdn Bhd and land concession holder namely Fahad Holdings Sdn. Bhd.

Not to circulate or circumvent the documents or information of the project without the consent of the land concession owner. Joint Venture Agreement [33] The Joint Venture Agreement (JVA) was signed between Fahad Holdings Sdn. Bhd. (FHSB) and PTS Properties Sdn. Bhd. (PTS) on 8.8.2014 (B1 p.4) and the relevant part of the JVA reads as follows: RECITALS

(A) FHSB has secured a Letter of Intent from Kemajuan Pekebun Kecil Perusahaan Getah (RISDA) for the right to develop its two adjoining lands known as Lot 169 and 170, Section 89 Jalan U Thant, Kuala Lumpur on a joint venture basis vide a public tender called by RISDA.

(B) The Turnkey Contractor is a construction and Contract company with sufficient capital and technical knowledge in the business of property Contract.

(C) The Parties wish to enter into this Joint Venture Agreement to set forth more fully the terms and conditions pursuant to which the Parties shall collaborate. [34] By letters dated 28.1.2015 (B1 pp. 62 and 65), PTS appointed town planning consultant (HN Metropolis Planners) and two applications were submitted to DBKL to apply for a Development Order to develop the Project. FHSB, PTS and Yuten entered into a Deed of Novation on 23.2.2015 (B1 pp. 48 - 51) whereby through this Deed, Yuten will assumed all PTS responsibilities, obligations, rights, warranties, representations and undertakings with regards to the JVA. [35] DBKL issued three rejection notices dated 9.3.2015 (B1 pp. 1-3) to HN Metropolis Planners stating the following reasons:

The proposed development was not in line with the Draft Kuala Lumpur City Plan, ‘Stable Housing’ with a density of 40 people per acre;

The limited infrastructure capacity in this area could not accommodate the increase in high-intensity development; and

There were strong protests from the residents and embassies around the Project site. [36] FHSB and Yuten entered into a Joint Venture Development Agreement (JDVA) dated 15.7.2015 (B1 pp. 52 - 61) with the terms identical to those of the JVA. Eventually, the JVA was formally terminated vide a Mutual Termination Agreement on 6.4.2017 (B1 pp. 25 - 28). Whether the Defendants are liable to pay the Plaintiff the 2.5% Finder’s Fee? [37] According to the Letter of Undertaking, it was stated that the balance of the 2.5% finder’s fee has to be paid upon signing of the Sale and Purchase Agreement of the sold units between the vendor and the buyer. The calculation of the 2.5% finder’s fee is based on the Total Gross Development Value of the project. [38] With respect, I am of the considered view that the Defendants were not obliged to pay the Plaintiff the finder’s fee as the project was terminated due to the mutual termination between FHSB and PTS with the signing of the Mutual Termination of JVA on 6.4.2017. The Defendant’s contractual obligations was fulfilled when the Plaintiff was paid the initial RM250,000.00 upon signing of the JVA. Intention of the parties [39] The sole function of the Court in construing a document (in this case the Letter of Undertaking, JVA and the Mutual Termination Agreement) is with a view to finding the intention of the parties. The Supreme Court in the case of Raja Zainal Abidin Raja Hj. Tachik & Ors v. British-American Life & General Insurance Bhd. [1993] 3 CLJ 606 decided that: “The function is in reality to find the meaning of the words, for such meaning is equivalent to such intention of the parties for the parties for the purpose of interpretation.” Sanctity of a contract [40] It is trite law that the sanctity of a contract should be preserved. As decided in Tay Yew Chong v. Koh Hooi Siang & Ors [2021] 1 CLJ 221 at p. 233, the Court of Appeal decided as follows: “[33] It is elementary that in construing a contract, the whole contract has to be considered with reference to its object and the whole of its term (see Chitty On Contracts, vol. 2012, 31 edn. At p. 943) In SPM Membrane Switch Sdn. Bhd.v. Kerajaan Negeri Selangor [2016] 1 CLJ 177, the Federal Court held that the court must approach the interpretation of a contract holistically, no term is to be taken or interpreted in isolation. [34] The court cannot be rewriting the contract for the parties by imposing a term which could not be imported into the contract or go behind the written terms of the contract to introduce or add new terms to it.” [41] The construction of a contract is a question of law for determination by the court and not by the witnesses through their oral evidence. (see NVJ Menon v. The Great Eastern Life Assurance Company Ltd. [2004] 3 CLJ 96 Court of Appeal) In the instant case, based on the construction of the Letter of Undertaking, JVA and the Mutual Termination Agreement, I am of the considered view that there lies no ambiguity as to the intention of the parties and that the contractual obligations of the parties were clearly spelt out in the terms and conditions of the respective contract or agreements in the instant case. [42] In this regard, it is crystal clear from the wording of the Letter of Undertaking referring to Clause (1) that the balance of the 2.5% finder’s fee is only to be paid upon signing of the Sale and Purchase Agreement of the sold units between the vendor and the buyer. Whether the Defendants are liable to appoint the Plaintiff as Project Coordinator? [43]