Tect Huat Development Sdn Bhd v Goh Cheng Huat (B-02(NCvC)(W)-352-03/2024)

GOH CHENG HUAT [ Identity Card No.: 700109105007 ]

GOH CHENG HUAY [ Identity Card No.: 721227105780 ]

GOH CHING CHAI [ Identity Card No.: 731102105137 ]

GOH CHING ENG [ Identity Card No.: 760409105695 ]

GOH CHING SEONG [ Identity Card No.: 750414105025 ] …RESPONDEN-RESPONDEN DI DENGAR BERSAMA DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO : B-02(NCvC)(W)-353-03/2024

GOH CHENG HUAT [ Identity Card No.: 700109105007 ]

GOH CHENG HUAY [ Identity Card No.: 721227105780 ]

GOH CHING CHAI [ Identity Card No.: 731102105137 ]

GOH CHING ENG [ Identity Card No.: 760409105695 ] 02/07/2025 09:52:55 B-02(NCvC)(W)-352-03/2024 Kand. 40 2 | P a g e 5 GOH CHING SEONG [ Identity Card No.: 750414105025 ] …PERAYU-PERAYU DAN TECT HUAT DEVELOPMENT SDN BHD [ Company No.: 1077198-P ] …RESPONDEN KORUM: NANTHA BALAN A/L E.S MOORTHY, JCA MOHAMED ZAINI BIN MAZLAN, JCA AHMAD KAMAL BIN MD. SHAHID, JCA JUDGMENT [1] There are 2 appeals before us, namely,

B-02(NCvC)(W)-352-03/2024 (Appeal 352) (TECT HUAT DEVELOPMENT SDN BHD v GOH CHENG HUAT & 4

B-02(NCvC)(W)-353-03/2024 (Appeal 353) (GOH CHENG HUAT & 4 OTHERS v TECT HUAT DEVELOPMENT SDN BHD) [2] In the High Court, TECT HUAT DEVELOPMENT SDN BHD was the Plaintiff whereas GOH CHENG HUAT & 4 OTHERS were the Defendants. We shall refer to the parties as Plaintiff and Defendants respectively. Thus, the Appellant in Appeal 352 is the Plaintiff whilst the Appellant in Appeal 353 are the Defendants. 3 | P a g e The Facts [3] The Defendants are the landowners of a parcel of agricultural land. The Plaintiff (a developer) and the Defendants executed a joint venture agreement dated 24 March 2014 (“JVA”) pursuant to which the land was to be converted into residential and commercial category and subdivided into individual lots, and thereafter developed into terrace houses and shop-lots. The construction/development was to have been completed by 24 March 2019 (“completion date”). [4] As at the completion date, the land had been duly converted and sub-divided into 25 lots - 20 residential and 5 commercial lots. However, the project was only at the planning stage, albeit that the development order (“DO”) for the project was obtained in February 2016. In April 2019 the Defendants terminated the JVA. [5] The Plaintiff challenged the termination claiming that Goh Ching Eng (“D4”), who is one of the co-owners had granted an extension of time of 30 months per a letter dated 29 November 2018 which has been described as the Supplementary Agreement (“SA”) which was signed and sent by D4 to the Plaintiff via WhatsApp. [6] Under the SA, the Plaintiff would do the following (See: paragraph 44 of the Statement of Claim): a. The Plaintiff would compensate the Defendants the sum of RM1,000.00 per month as rental until the date of obtaining the Certificate of Compliance and Completion (CCC) for the Development, whereas under Clause 2.9 of the JVA, the monthly rental was RM700.00 per month. 4 | P a g e b. The Defendants would grant the Plaintiff an extension of time of 30 months from the date of the JV Agreement (24.03.2019), thereby extending the date for completion of the Development to 24.09.2021; c. The Plaintiff would pay the Defendants a compensation of RM2,500.00 per month for the extension of time; d. Liquidated compensation of late delivery of the Development, amounting to RM4,000.00 per month, would be paid by the Plaintiff to the Defendants after the extended completion date (Note: Under the JVA, the Liquidated Compensation was RM1,700.00 per month): e. The Defendants had listed a shoplot unit that they were desirous of selecting for themselves (P.T. No. 44608). [7] The termination took place on 26 April 2019 (See: Messrs. Rama Velu’s letter – dated 26 April 2019). There is no dispute that after 29 November 2018 (the date of the SA) the Plaintiff did not make any rental or any payments whatsoever to the Defendants. The Plaintiff referred to 2 meetings, 10 July 2018 and 13 Sept 2018. D4 attended both these meetings. Previously (before the SA) D4 collected the rentals that were payable under the JVA. D4 said he signed the SA at the request of the Plaintiff. The Plaintiff said that a sum of RM10,000.00 was paid to D4 as consideration for the extension of time. The Plaintiff said that D4 represented all the co-owners and had ostensible authority. D4 said that at the meeting he told the Plaintiff’s representative (PW6) that he could not decide for all and had to get the consent of all the co-owners. D4 testified that the SA did not have the consent of all the co-owners. 5 | P a g e The issue [8] The question for the Learned Trial Judge (“Judge”) was whether D4 had ostensible authority to bind the other co-owners. The Judge found as a fact that D4 only had authority to attend meetings and collect rentals. The Judge held that D4 had no authority to bind the other co-owners. The Judge accepted as a fact that the sum of RM10,000.00 paid to D4 was a “commission” payable to D4. [9] It is relevant to mention here that all the other Defendants testified that D4 was their intermediary/representative. As a matter of fact, he was “the face” of all the co-owners of the land. However, even though it was D4 who dealt with the Plaintiff, the most glaring evidence was that the JVA was signed by all the co-owners (the Defendants). Further, there was no letter of authorization by the other co-owners permitting D4 to sign on their behalf nor was it provided in the JVA or any other document, that D4 could decide for the co-owners or sign on their behalf. [10] Since the project was not completed by the completion date and there was no valid extension of time, the JVA had therefore lapsed by effluxion of time. Hence, the Judge ruled that there was no question of any termination of the JVA. As such, the Judge held that there was no basis for the Defendants’ Counterclaim which sought a declaration that the JVA was validly terminated. In the meanwhile, the land had been converted from agricultural to residential and commercial and subdivided into 25 individual titles which were all held by the stakeholder, Messrs. Nordin Torji & Partners. 6 | P a g e [11] Obviously, the land value had been enhanced by the conversion/subdivision. Hence, after dismissing the Plaintiff’s claim and the Defendants’ Counterclaim, an assessment was conducted by the Judge. The Judge directed parties to submit on the issue of assessment. It is to be noted that the Defendants did object to an assessment being conducted in respect of the enhanced land value. (See Defendants submission in the High Court per Enclosure 81). [12] Essentially, the Defendant took the position that by not completing the project by the completion date, the Plaintiff was in breach of the JVA, i.e. a contract breaker and was not entitled to be paid any compensation referenced to the enhanced land value. In this regard, the Defendants relied on the Court of Appeal’s decision in Poh Geok Sing v HB Enterprise Sdn Bhd [2006] 1 MLJ 617 (CA) and contended that “a contract breaker cannot seek to recover any benefit he may have conferred upon the innocent party where he is himself guilty of breach of contract”. However, despite the legal position in regards to the contract breaker’s inability in law to claim compensation for conferring a benefit on the innocent party, the Judge nevertheless directed that an assessment be conducted. [13] The Plaintiff and Defendants then proceeded to produce evidence via their respective valuers. The Judge considered the evidence and concluded that the Plaintiff was entitled to be compensated in the sum of RM421,113.25 with interest. The said sum was duly paid into the client account of Messrs. P. Paramjothy & Co. 7 | P a g e The High Court (Outcome) [14] By the Order of the High Court dated 29 January 2024 the Judge dismissed the Plaintiff’s claim and also dismissed the Defendants’ Counterclaim. The Judge ordered the Defendants to pay the Plaintiff a sum of RM421,113.25 with interest at 5% per annum from the date of judgment until the date of full payment, and upon payment of this sum (with interest) the Plaintiff has to deliver to the Defendants the 25 Titles of the sub-divided land. Our Decision [15] The central issue is whether there was a valid extension of time of 30 months and this turns on whether D4 had “ostensible” authority to sign the SA which was signed and sent to the Plaintiff via WhatsApp on 29 November 2018. The SA was given to D4 at the meeting on 13 September

It is clear from the evidence that D4 did take it back and discussed the issue of extension with his siblings (the other co-owners) and when he was asked to sign and return the SA, he did so via WhatsApp. D4 also encashed the Plaintiff’s cheque for RM10,000.00, which D4 claimed was a “commission”. We also note that during cross-examination, D4 was not very forthright about the payment of RM10,000.00. But, it is imperative to note that the sum of RM10,000.00 was not even part of the Plaintiff’s pleaded case. 8 | P a g e [16] However, it was argued before us that RM10,000.00 was paid for the extension of time. And curiously, it was also contended that it was payment of the enhanced rentals (described in the SA as compensation for the extension) of RM2,500 per month. But having scrutinized the Record of Appeal, we find that the evidence does not back this up. Indeed, it is clear that despite D4 signing the SA and sending to the Plaintiff, there was no payment of compensation for the extension of RM2,500.00 per month or even the original rental of RM700.00 per month, or enhanced monthly rental of RM1,000.00 per month. Put simply, there were just no payments by the Plaintiff to the Defendants after the SA was sent by D4 via WhatsApp. [17] Hence, it cannot be said that the Plaintiff had performed their part of the bargain (if at all) under the SA. It is quite obvious that the position may have been different if the enhanced rentals or the compensation for extension had been paid from 29 November 2018 onwards, as we may have been inclined to entertain the submission that the SA was binding on all the co-owners, albeit only signed by D4. Since the enhanced rental (RM1,000.00) or compensation for the extension (RM2,500.00) was not paid at all after 29 November 2018, we see no basis for the contention that the SA is binding on the Defendants. Indeed, even the original rental of RM700.00 per month under the JVA was not paid after 29 November 2018. 9 | P a g e [18] Thus, we are unable to accept the Plaintiff’s argument that the Judge had erred in his appreciation of the evidence. On the contrary, we think that the Judge was correct in concluding that D4 only had limited authority to attend meetings and collect rentals. Thus, a legal document such as SA which substantially alters the rights and obligations of the parties to the JVA must be signed by all the co-owners for it to be a valid and binding. Indeed, the fact that the JVA was signed by all the co-owners (i.e. the Defendants) and not just by D4 speaks volumes against the contention that D4 had ostensible authority to bind the other co-owners with his sole signature in the SA. [19] As such, in these circumstances, D4’s sole signature on the SA was in our view, invalid as the other co-owners did not give their consent. Consequently, on the issue of D4’s ostensible authority – we agree with the Judge that D4 had no such authority and there is no basis for us to interfere with that finding, which we do not find to be plainly wrong. [20] On the issue of whether there was an extension of time, we take the view that the Judge had carefully and correctly concluded that despite the SA (signed only by D4), there was no extension of time, and the Plaintiff’s obligations under the JVA remained unfulfilled. There was in our view, no mis-appreciation by the Judge of the oral and documentary evidence concerning the issue as to whether there was a valid or any extension of time of 30 months to complete the project. As such, we find no merit in Appeal 352 and it is hereby dismissed with costs (which will be dealt with after we hear counsel). 10 | P a g e [21] As for Appeal 353, we agree that once the Plaintiff’s claim and Defendant’s Counterclaim are dismissed, there is nothing left for the Court to rule on other than costs. In our view, the order for assessment of damages cannot stand on its own as it must relate to the claim by the Plaintiff. The Defendants’ contentions in support of Appeal 353 may be gleaned from the following paragraphs of the Amended Memorandum of Appeal which read as follows;

The Learned Trial Judge after making a factual determination the said JV Agreement was not extended, by the Defendants and correctly dismissing the Plaintiff's Claim, erred in law and fact when His Lordship proceeded to assessment of damages, without a finding of liability or breach of contract [JV Agreement], in contradiction with the Latin term "dannum sine injuria ["No damage can be awarded in the absence of a loss"].

The Learned Trial Judge erred in law and fact in failing to consider the legal Defendants issues submitted by the Defendants, adequately and/or all the legal and evidential issues raised by the Appellants, with regards to the agreed terms between the Plau parties, in the said JV Agreement in the event the Plaintiff failed its contractual obligations [Clause 14 and Clause 15].

The Learned Trial Judge erred in law and fact in proceeding to assess damages without any finding of liability against the Defendants, for any breach of the said JV Agreement contrary the ratio decidendi in Majlis Perbandaran Seberang Perai V. Tropiland Sdn Bhd. [1996] 1 MLRA 420 CA.

The Learned Trial Judge erred in law and fact in proceeding to assess damages in favour of the Plaintiff after having dismissed the Plaintiff's claim in contravention of Section 74 Of the Contract Act 1950 and the legal principles in Hadley v. Baxendale

9 Ex 341, Bank Bumiputera Malaysia Bhd. Kuala Terengganu v. Mae Perkayuan Sdn Bhd. & Anor [1993] 1 MLRA I (SC), Tan Sri Khoo Teck Puat & Anor. v. Plenitude Holdings Sdn Bhd. [1994] 1 MLRA I FC) and Liew Choy Hung v. Shah Alam Properties Sdn. Bhd. [1997] 1 MLRA I (SC).

The Learned Trial Judge erred in law and fact in awarding a sum of RM421,113.25 and interest of 5% per annum on the same, from the date of judgement, to the Plaintiff despite not making any finding of fact, of any, of any breach/es by the Defendants thereby in essence rewarding the Plaintiff, without any finding by the Court of breaches of the contract, by the Appellants. 11 | P a g e

The Learned Trial Judge having correctly dismissed the Plaintiff's claim against the Defendants, erred in law and in fact, when deciding the Defendants were still liable to pay damages and in ordering the Appellants to pay the sum of RM421,113.25 and interest of 5% per annum on the same, from the date of judgement to the Plaintiff.

The Learned Trial Judge erred in law and fact in ordering the Plaintiff to return the 25 individual land titles subject to the Defendants paying the amount of RM421,113.25 and interest of 5% per annum on the same, from date of judgement to the Plaintiff, despite no finding of liability, for breaches of the JV Agreement by the Defendants.

The Learned Trial Judge erred in law and fact when deciding the Defendants were liable to pay damages for an increased value of the said land despite no finding of liability for breaches of Contract and proceeded to considering the various expert reports and legal issues submitted by the Defendants, adequately or all the legal and evidential issues raised by the Defendants.

The Learned Trial Judge ought in all the circumstances ordered the Besplay to Plaintiff to immediately return all 25 individual land titles, to the Defendants as the Defendants had not breached its contract with the Plaintiff. [22] Here the Plaintiff’s claim was dismissed in toto. There was nothing in the Statement of Claim by way of a plea based on “quantum meruit” or “unjust enrichment” in order for the Court to exercise its discretion to assess damages under these heads (See: RHB Bank Bhd (Substituting Kwong Yik Bank Bhd) v Kwan Chew Holdings Sdn Bhd [2010 2 MLJ 188, [2009] MLJU 1039, [2010] 1 CLJ 665, [2010] 2 AMR 590 (FC)). 12 | P a g e [23] Plainly, the High Court erred on embarking as assessment of damages when the Plaintiff’s claim was dismissed. The judgment of the High Court whereby the Defendants were ordered to pay RM421,113.25 with interest was a nullity as there was no judgment for damages to be assessed to begin with. We do not agree that the omnibus prayer (paragraph [63]) in the Statement of Claim - “any further relief, remedy and/or order that this Honourable Court deems fit and proper to so grant” can be utilized to grant compensation based on enhanced land value as this must be properly pleaded and articulated in the trial and there must be judgment for damages as a pre-requisite for assessment to be conducted. In this regard, we rely on the Court of Appeal’s decision on Majlis Perbandaran Seberang Perai v Tropiland Sdn Bhd [1996] 3 MLJ 94 CA where it was enunciated that “Before an inquiry into or an assessment may take place, there must be a judgment awarding damages, for it is only under a judgment awarding damages that an assessment or inquiry may take place.” As for the requirement for a claim in quantum meruit to be pleaded, we refer to the Court of Appeal’s decision in Pembinaan SPK Sdn Bhd v. Jalinan Waja Sdn Bhd [2016] 10 CLJ 112; [2013] 1 LNS 1531 CA where it held that,

A claim for quantum meruit here related to more than a claim based on the legal effects of the pleaded material facts. It was a cause of action in itself which was substantive in nature and therefore, required express pleading and the adduction at trial of a sufficient foundation of facts derived from evidence tendered through witnesses' testimony or relevant, cogent documentary evidence. Further, resort to the omnibus prayer would only make sense where the main claim was not dismissed. On the facts, no evidence was led on the claim of quantum meruit, nor any evidence on the intention of the parties to support the inference of the implied term for reimbursement. (paras 10 & 27) 13 | P a g e [24] In the circumstances, we find merits in Appeal 353 and the appeal is allowed and the High Court Order dated 29 January 2024, to the extent where it ordered the Defendants to pay RM421,113.25 to the Plaintiff and upon such payment the 25 individual titles are to be released to the Defendants, is hereby set aside. We make a Consequential Order that the sum of RM421,113.25 with all interest accrued thereon, presently held by the Defendants solicitors Messrs. P. Paramjothy & Co. be forthwith released to the Defendants. We also order that all 25 individuals titles i.e. for HS(M) 22601 to HS(M)22626, PT 44606 to PT44630, Mukim Tanjung Dua Belas, Daerah Kuala Langat held by Messrs. Nordin Torji & Partners as stakeholder, be released forthwith to the Defendants solicitors, Messrs. P. Paramjothy & Co. [25] We order the Appellant (Plaintiff) in Appeal 352 to pay costs of RM25,000.00 (subject to allocator) to the Respondents (Defendants). We order the Respondent (Plaintiff) in Appeal 353 to pay costs of RM25,000.00 (subject to allocator) to the Appellants (Defendants). Order accordingly. S. Nantha Balan Judge, Court of Appeal Putrajaya, Malaysia Date: 5th May 2025 14 | P a g e Legal Representation For the Appellant (Appeal 352) (Respondent in Appeal 353) Gavin Jayapal Merissa Ann Augustin Sivanandini Sreegantham Messrs. Gavin Jayapal (Petaling Jaya) No. 25-5 Block H Jalan PJU 1/37, Dataran Prima 47301 Petaling Jaya Selangor Darul Ehsan. For the Respondents (Appeal 352) (Appellants in Appeal 353) Joseph Yeo Paramjothy A/L Pahavan Varghese Onny Armikayani Binti Amiruddin Messrs. P. Paramjothy & Co. (Kuala Lumpur) Jalan Pantai Baharu Taman Bukit Pantai 59200 Kuala Lumpur Wilayah Persekutuan Kuala Lumpur