Preamble
Pursuant to a sale and purchase agreement dated 12.7.2012 (SPA), Noria agreed to sell and Megajaya agreed to purchase the 24 parcels of land for the purchase price of RM650,000.00. Bahari Choy acted as solicitors for Megajaya in the sale and purchase transaction. [5] On even date, Megajaya of the first part, Zest Properties of the second part and Noria of the third part entered into a tripartite agreement “Perjanjian Persefahaman”. The salient terms included: a) Zest Properties had failed to develop the lands and failed to service the MBSB loan; b) Megajaya would take over and develop the lands according to approvals from the relevant authorities; c) Megajaya to pay RM1.1 million to Zest Properties and Noria; d) Megajaya to pay RM65,000.00 to MBSB in part payment of the redemption of the charge and to postpone or cancel the public auction; e) Megajaya to pay MBSB RM335,000.00 or such amount as determined by MBSB to redeem the loan taken by Zest Properties. If the settlement sum is less than RM335,000.00, the excess shall Page 4 of 11 be retained by Megajaya or its solicitors until the completion of the tripartite agreement; f) Megajaya to pay to Noria RM200,000.00 after the completion of the development of the land together with CFO; g) Megajaya to pay RM250,000.00 to Zest Properties after the completion of the development of the land together with CFO; h) Megajaya to provide a fund of RM250,000.00. The fund will be utilized to (i) pay compensation to former purchasers of the land as a result of the cancellation of the sale and purchase with Zest Properties. And (ii) for withdrawal or removal of caveats lodged by former purchasers; i) Zest Properties and Noria jointly and severally declare and confirm to Megajaya that the actual purchase price for the lands under the SPA is RM400.000.00 and not RM650,000.00; and j) Zest Properties and Noria also jointly and severally agreed that in the event that the former purchaser of the 2 caveated lots is not agreeable to Megajaya’s offer to proceed with the development or to withdraw the 2 private caveats, then Megajaya will not purchase the 2 parcels and Megajaya will deduct the amount payable to Zest Properties under sub-para. (g) above. Page 5 of 11 [6] Megajaya obtained a loan of RM400,000.00 from Public Bank Bhd (PBB) to part-finance the purchase of the land. Bahari Choy was also appointed by PBB to act for PBB for the loan transaction. [7] On 26.3.2013, Bahari Choy wrote to PBB informing that the security documents are in order and that PBB may disburse the loan. On 27.3.2013, PBB forwarded a banker’s cheque for RM400,000.00 being the redemption sum to Bahari Choy for onward transmission to MBSB. [8] By letter dated 28.3.2013, Bahari Choy returned PBB’s banker’s cheque. Bahari Choy informed PBB that whilst MBSB’s undertaking related to the discharge of charge and withdrawal of caveat, it did not include the withdrawal of the 2 private caveats by the former purchaser. As such, they could not risk forwarding PBB’s banker’s cheque to MBSB. [9] As the redemption sum due to MBSB was not settled, MBSB auctioned the lands to a third party. Consequently, the SPA fell through and the plaintiff sued the defendant for damages for breach of contract and professional negligence. FINDINGS OF THE HIGH COURT [10] In holding that the plaintiff had succeeded in proving breach of contract and professional negligence against the defendant, the learned JC made the following findings: Page 6 of 11 a) Bahari Choy was aware that (i) Megajaya purchased the lands for development purposes, (ii) the loan taken by Megajaya was to be used to redeem the lands from MBSB, (iii) there were private caveats lodged against 2 of the 24 parcels of the land; b) Bahari Choy ought to have been aware that if the redemption sum was not settled, Megajaya would not be able to take ownership of the lands and develop the lands and earn profits therefrom; c) Bahari Choy ought to have advised Megajaya that the loan could not be utilized to settle the redemption sum due to MBSB because of the existence of the private caveats; and d) Bahari Choy acted in a position of conflict of interest when it acted for both Megajaya and PBB (Ng Siew Lan v John Lee Tsun [2017] 2 CLJ 245 (FC); [11] The learned JC’s grounds for awarding general damages of RM300,000.00 may be summarized as follows: a) The claim for a sum not exceeding RM5 million as general damages was not supported by the evidence. The Projected Income and Expenses (Exh. P2 and P3) and annexures produced did not factor in the costs and expenses to be incurred by Megajaya; Page 7 of 11 b) After deducting the costs of acquisition of the land, finance charge and the sums payable under the Perjanjian Persefahaman, the actual loss suffered by Megajaya arrived at is RM301,010.00 (see paras. 33(i),(ii) and (iii) and 34 of the learned JC’s grounds of judgment); and c) The claim for special damages was dismissed as Megajaya failed to adduce any evidence to support the claim. SUBMISSION OF PARTIES [12] Learned counsel for Bahari Choy argued that Megajaya was aware of the existence of the 2 private caveats and that Megajaya was supposed to remove the same. They informed Megajaya that the private caveats would be withdrawn once the former purchaser is refunded the monies paid. In advising PBB not to utilize the loan to settle the redemption sum, Bahari Choy was protecting Megajaya. As for damages, learned counsel argued Megajaya had failed to prove the damages claimed. Exhibit P2, P3 and annexures are only self-serving documents and wholly without any basis. The valuation report (exh. P1) prepared by SP1 is of no probative value; SP1 is not qualified or competent to prepare the report as he is only a property valuer and not a quantity surveyor. [13] In reply, learned counsel for Megajaya argued that the findings of the learned JC on liability was supported by the evidence on the record. Bahari Choy was acting in a position where they were in a conflict of interest and they failed to inform Megajaya of the same. Bahari Choy was well aware of Page 8 of 11 the existence of the private caveats but failed to ensure that the former purchaser was willing to withdraw the private caveats. As such, the findings of the learned JC was not plainly wrong and should not be disturbed. As to damages, it was submitted that the learned JC did not rely entirely on the valuer’s report (exh. P1). Further, Bahari Choy did not produce any rebuttal evidence to challenge the Projected Income and Expenses (Exh. P2 and P3). DECISION [14] As to liability, we are of the view that the learned JC’s finding is not inconsistent with the totality of the evidence on the record. The undisputed fact indicates that Bahari Choy was acting for Megajaya in the SPA transaction. Bahari Choy also took on the additional role as solicitors for PBB the lending bank. They ought to have advised both Megajaya and PBB that the 2 private caveats were not included under MBSB’s undertaking and the risks related thereto. In that capacity, Bahari Choy failed to inform Megajaya that they were acting as the common solicitor in respect of the loan transaction and the risks thereto. Instead, Bahari Choy advised PBB that it was in order to release the loan sum. Clearly, that advice wrongly ignored or discounted the impediment posed by the 2 private caveats. Further, there is no evidence to support Bahari Choy’s assertion that they had informed Megajaya to pay the former purchaser so as to remove the private caveat. The evidence on the whole points to Bahari Choy’s omission for failing to take the necessary measures. It is not unexpected that such a situation may arise especially where a solicitor acts for both parties, as in this case, putting itself in a position of conflict of interest between PBB and Megajaya. As such, Page 9 of 11 the learned JC’s finding on liability is not plainly wrong and appellate intervention is not warranted. [15] As to damages, it is settled law that in order for a claimant to succeed in its claim the claimant must show that the loss and damages is due to the breach of contract or negligence by the defendant. Once that is established, the claimant has the additional burden of proving the damages. [16] Put simply, the burden of proof is on the claimant to prove the facts and the amount of damages (Sony Electronics (M) Sdn Bhd v Direct Interest Sdn Bhd [2007] 2 MLJ 229 (CA)). Further, the damages must be proved with real or factual evidence. Mere particulars, summaries, estimations or general conclusions will not suffice (Lee Sau Kong v Leow Cheng Chiang [1961] MLJ 17 (CA); PB Malaysia Sdn Bhd v Samudra (M) Sdn Bhd [2009] 7 MLJ 681(CA) at 697). [17] It is pertinent to observe that according to the Statement of Claim, Megajaya had prayed for general damages of up to RM5,000,000.00 and special damages of RM139,898.50. [18] Having perused the evidence on the record, we are of the view that Megajaya has failed to prove the damages sought. The documents tendered in support of the claim, in particular exhibits P1, P2 and P3 are by themselves insufficient to establish liability against Bahari Choy. P2 is only a projection at best. We do not think that it is sufficient to merely write down the particulars to prove the claim for damages sought. There was no independent documentary or other evidence to support the estimates and projections. We Page 10 of 11 also agree with the learned JC that the projections were misplaced and inaccurate as they did not take into account sets off for incidental costs relating to the acquisition of the lands and development expense. Further, the valuer’s report exhibit P1 carries no weight as it was not prepared by a quantity surveyor. It is also noted that the valuer’s report failed to take into account incidental costs relating to development costs. SP1 who prepared the report also admitted that the figures in his report were cut and pasted from exhibit P2 prepared earlier by Megajaya. In the final analysis, the claim for damages was not proved on a balance of probabilities. [19] Be that as it may, we note that the learned JC had found that the loss and damages were foreseeable and not remote. In the circumstances, since Megajaya failed to prove the facts and the amount of damages, we are of the view that nominal damages should be awarded to Megajaya. Accordingly, we ordered that nominal damages in the sum of RM100.00 in favour of Megajaya. As Bahari Choy’s appeal was allowed in part, we made no order as to costs of this appeal. sgd (Vernon Ong) Judge Court Of Appeal Malaysia Dated : 12th June 2019 Page 11 of 11 Counsel: For the Appellant: Ong Siew Wan Messrs. Andrew David Wong & Ong For the Respondent: T. Gunaseelan (Ikmal Hisam Idris with him) Messrs. Gunaseelan & Assoc.