Wong Yee Boon v Gainvest Builders (M) Sdn Bhd (02(f)-120-10/2017 (W))

The appellant instituted a claim against the respondent in the High Court at Kuala Lumpur, for some payment pursuant to an agreement entered between them, known as an Introducer Agreement. The claim was dismissed by the High Court, as the Introducer Agreement was found to be an illegal contract pursuant to section 24 of the Contracts Act 1950, applying the principle of law as enunciated by this Court in Merong Mahawangsa Sdn Bhd and Another v Dato’ Shazryl Eskay bin Abdullah [2015] 5 MLJ 619. The appeal of the appellant at the Court of Appeal was also dismissed for the same reason.

Leave was obtained from this Court to determine the question of law as to whether the principle of law on public policy in Merong Mahawangsa equally applies to an agreement made between two private parties. We have heard the appeal and had reserved our decision to a 3 date to be informed to the parties. This is my decision and the grounds of my judgment. Background Facts [3] The Introducer Agreement came about following a construction project embarked upon by the Government of Malaysia to construct an additional building for Ibu Pejabat Polis Kontingen Kuala Lumpur (IPKKL) on Lot PT 112 Seksyen 56 Mukim Bandar Kuala Lumpur (the Project). The Government of Malaysia appointed Pembinaan BLT Sdn Bhd as the implementer of the Project on its behalf. Mitisa Holdings Sdn. Bhd. was appointed as the Main Contractor and Generasi Tangkas Sdn. Bhd. (Generasi Tangkas) was initially appointed as the main Sub-Contractor. Later, the main Sub-Contactor was substituted with CRBC (Malaysia) Holdings Sdn. Bhd. (CRBC).

According to the appellant on 25.01.2007 he was approached by a director of CRBC Mr. Hu Bin who introduced the appellant to Mr. Felix Ling, the director of Generasi Tangkas and Encik Mohd Johari Mat Aris who was the CEO of Mitisa, whereupon the appellant discovered about the Project. Mr. Felix Ling was also a Project Director in CRBC. The respondent was a Class A contractor and was interested in obtaining some sub-contract works in the Project. According to the respondent, the 4 appellant represented that he had some influence and connection with CRBC to enable the respondent to be engaged by CRBC to perform some of the sub-contract works.

Following that meeting, the respondent issued a letter dated 19.11.2008 appointing the appellant as an Introducer and the terms of engagement between them were expressed in the Introducer Agreement of even date. The Introducer Agreement, in essence, appoints the appellant as the Introducer in relation to sub-contract works with CRBC. The obligations of the appellant are spelled out in Clauses 4(a) to (d) below: “(i). Advise, negotiate and facilitate with information to the Sub-Contractor with regards to the revision of the First Quotation as defined in Clause 3(a)(i);

(ii). Compile all relevant documentation required for the Sub-Contractor to submit the second quotation as defined in Clause 3(a)(ii) of this Agreement;

(iii). Assist, liaise and work closely with the Sub-Contractor in matters that leads to obtaining the tender of the Project from the Contractor; and

(iv). Assist in securing the award of the Project to the Sub-Contractor by the Contractor.” 5 [6] The other salient term of the Introducer Agreement is under Clause

Under this clause, the respondent is obliged to submit a quotation in relation to the sub-contract works under the Project to the appellant. The appellant’s duty was to revise that quotation for onward submission to CRBC to bid for the sub-contract works. In accordance with Clause 6 of the Introducer Agreement, the appellant would be paid the differential sum between the quotation prepared by the respondent with the one revised by the appellant, as consideration under the Agreement. [7] As it turned out, the quotation of RM31,093,478.15 by the respondent was revised upwards to RM35,369,505.25 (the Revised Quotation) by the appellant making a difference of RM4,276,027.10. This difference is the agreed consideration payable to the appellant by the respondent, pursuant to Clause 6 of the Introducer Agreement. This is also the subject matter of the claim of the appellant in this appeal. [8] Under Clause 5 it is also stated that the validity of the Introducer Agreement, “shall be dependent on the award of the Project to the respondent by the contractor”. Clause 7 specifies the mode of payment, where Clause 7(c) allows for variation to the sum of payment. 6 [9] The Revised Quotation was submitted to CRBC to bid for the sub-contract work on 19.11.2008. Through its Board of Directors, CRBC directed Mr. Felix Ling, as a Project Director, to conduct tender interviews of all the bidders including the respondent. The respondent’s representatives Mr. An Haijing and Mr. Zhow attended the tender interview. They both claimed to have been informed that the Revised Quotation was too high for Structural Concrete work. Officially, by way of a letter dated 11.12.2008, CRBC rejected the bid of the respondent made through the Revised Quotation. [10] The respondent protested and wrote to the appellant on 12.01.2009 to complain that his representation of having the necessary connection with CRBC was false and that the management of CRBC had also informed them denying that relationship. Accordingly, the respondent was terminating the Introducer Agreement. [11] The event that followed subsequently was that CRBC enquired directly if the respondent would like to undertake the whole sub-contract works, structural and architectural, at a lower price. The contract price was said to be around RM61 million. When the respondent requested for a Letter of Intent to be issued, the respondent through Mr. Felix Ling was issued with a letter dated 04.12.2008 informing that CRBC had agreed to 7 appoint the respondent as a sub-contractor to undertake the whole of the works at an agreed cost of RM61 million. However, that Letter of Intent was retracted by Mr. Felix Ling, who then issued another letter of 11.12.2008. [12] Eventually, CRBC had, by a letter dated 09.01.2009 awarded the whole of the sub-contract works to the respondent for the contract sum of RM58.6 million. [13] The respondent commenced work pursuant to the letter of award of 09.01.2009 for six months, after which CRBC was terminated as the main Sub-Contractor of the Project by Mitisa. Consequently, the respondent was terminated by CRBC. The respondent filed a suit against CRBC on the termination and CRBC also sued Mitisa. Months later, Mitisa initiated negotiation directly with the respondent to be the main Sub-Contractor. In the High Court [14] The claim of the appellant against the respondent was for the payment due and owing under the Introducer Agreement, pursuant to Clause 6. The trial at the High Court proceeded for 14 days with 3 witnesses on each side. At the end of the trial, the claim of the appellant was dismissed by the High Court. In summary, it was held that: 8 i. The Project was a government project which was meant for a public purpose; ii. The terms of the Introducer Agreement required a mark-up of the quoted price by the respondent which was generously revised upwards by the appellant to eventually create the difference to form the consideration payable to the appellant by the respondent; iii. Two other bidders were not afforded the same kind of assistance where no discussion of any sort was done by the appellant for the benefit of the respondent; iv. The contract was against public policy and it fell squarely on all fours with Merong Mahawangsa Sdn Bhd (supra); v. It would be unfair for the appellant to be paid by the respondent when in fact he should have been paid by CRBC; and vi. The appellant had not proven that he is entitled to the claim as in his prayers in the statement of claim. In the Court of Appeal [15] The appellant lodged an appeal against the whole of the High Court’s decision. Besides the issue of illegality, the main grounds of appeal before the Court of Appeal was that the learned trial Judge had failed to consider the evidence that the appellant had indeed fulfilled all 9 his obligations under the Introducer Agreement. In short, no finding was made as to the fulfillment of the contract by the appellant. The Court of Appeal in dismissing the appeal of the appellant had gone into the issue on the finding of illegality by the High Court. It was made clear by the Court of Appeal that should it decide that threshold issue and affirm the illegality as found by the High Court, it would not proceed on any other finding since an illegal contract conferred no rights or obligations on parties. [16] In the end, it became one of the bones of contentions by the appellant that both courts failed to judicially appreciate the evidence and failed to make the necessary finding of facts that the appellant had indeed discharged his obligations pursuant to the Introducer Agreement and was entitled to the payment as agreed. [17] In dismissing the appeal the Court of Appeal accepted and affirmed the fact as found by the High Court that there was indeed a representation made by the appellant on his position to influence CRBC in order to obtain the sub-contract works for the respondent, that such representation was relied upon by the respondent, and there was “influence peddling” in respect of a contract closely linked to the Project which was a public interest project. Hence the Court of Appeal affirmed the decision of the trial Judge that the Introducer Agreement was a contract within the ambit 10 of section 24 of the Contracts Act 1950, applying the principle of law as pronounced in Merong Mahawangsa. The Introducer Agreement was then found to be illegal pursuant to section 24(e) of the Contracts Act. Hence no finding was made on whether the appellant had performed all his obligations pursuant to the Introducer Agreement. Leave question [18] This Court had on 02.10.2017 granted leave to appeal on the following question of law: “Whether the principle of law espoused in Merong Mahawangsa Sdn Bhd and Another v Dato’ Shazryl Eskay bin Abdullah [2015] 5 MLJ 619, i.e. that ‘an agreement to provide services to influence the decision of a public decision maker to award a contract is a contract opposed to public policy as defined under section 24(e) of the Contracts Act 1950 and is therefore void’, i.e. the Merong Mahawangsa principle, extends and/or applies to private arrangements between private parties?” Submissions of Parties [19] Just as in the Court of Appeal, the grounds of appeal raised by the appellant before us were also presented in two main parts: i. The first part dealt with the issue of illegality and the applicability of the principle of law espoused in Merong 11 Mahawangsa to private arrangements between private parties. ii. The second part was in reference to the alleged failure on the part of the Court of Appeal to properly and judicially appreciate the evidence that the appellant had indeed performed all his obligations pursuant to the terms and conditions of the Introducer Agreement, and would be entitled to the reliefs sought in his claim against the respondent. Dispute on the alleged misrepresentation [20] Both courts below were misguided accepting that there was indeed such misrepresentation. On the issue of illegality, learned counsel for the appellant had first of all, impressed upon us that there was no representation made by the appellant that he had any influence with CRBC. That the trial Court was in error in relying on the evidence of DW2 to determine that there was indeed such representation made. The Court of Appeal was also in error in affirming that decision. All the communications produced at the trial according to learned counsel, do not make reference to the alleged influence or representation. Furthermore, they were communications made prior to the execution of the Introducer Agreement. 12 [21] Even if there is influence peddling, it was submitted that, the High Court had misapplied the principle of Merong Mahawangsa to private parties. Such application would not meet the threshold requirement for extending the meaning of public policy as established in that case. Various cases based on common law principles on the issue of public policy were cited including Fender v Mildmay [1938] AC 1, 351-353, The Bunga Melati Dua [2011] 3 AII ER 554, Egerton v Earl Brownlow (1853) 4 HL Cas 1 at 123-124, Rodriguez v Speyer Brothers [1919] AC 59 at 135- 136, BK Fleet Management Sdn Bhd v Stanson Marketing Sdn Bhd [2017] MLJU 1181. [22] Relying on the general principle of law that the Court should not invent a new head of public policy but instead merely apply the principle to the factual circumstances when the same fact presents itself, it was submitted that the court may only apply or extend Merong Mahawangsa if the public policy underlying the principle may be applied to the Introducer Agreement. And that the harmful qualities of “influence peddling” on the public are indisputable, before the object or consideration of the Introducer Agreement offends public policy. 13 [23] In response to these arguments learned counsel for the respondent had taken the position that the Introducer Agreement is illegal, immoral and against public policy. It is pure and simple that it is an illegal agreement irrespective of whether the principles in Merong Mahawangsa applies or otherwise. The point on illegality was premised on the alleged representation made by the appellant which was submitted to be influence peddling hence to be illegal by the respondent, within the meaning of section 24 of the Contracts Act for the following reasons. Firstly, it is a way of circumventing the tender process which CRBC was embarking on. The respondent was keen to participate in the tender process for the sub-contract works involving a Government project and the representation made by the appellant that he was able to influence the management of CRBC seemed to be the only consideration provided by the appellant in the Introducer Agreement. [24] The respondent also raised a point that the remuneration of the appellant was simply based on him artificially inflating the price to create the difference to entitle him to be paid under the Introducer Agreement. Also in contention was the conduct of the appellant in meeting the representative of CRBC, Mr. Felix Ling, who eventually agreed on the marked-up quotation made by the appellant and had thereby compromised the tender process. 14 [25] It was also the submission of the respondent that the Introducer Agreement is in pith and substance an agreement with the sole objective of favouring insider treatment in a situation of a tender process for an award of the sub-contract. Thus it was the core contention of the respondent that the only purpose or object of the Introducer Agreement was the sale of influence or influence peddling where the consideration was solely based on the art of inflating the price to a higher amount so as to ensure that the clause on the consideration will benefit the appellant. Such an agreement according to the respondent must be illegal, immoral and against public policy. Cited in support was the long line of decided cases in Singma Sawmill Co. Sdn. Bhd. v Asian Holdings (Industrialised Buildings) Sdn. Bhd. [1980] 1 MLJ 21, Lim Kar Bee v Duofortis Properties (M) Sdn Bhd [1992] 2 MLJ 281 and Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pak Leong [1998] 3 CLJ 503. Decision on Illegality [26] The written terms of the Introducer Agreement do not contain any clause on influence peddling. Clause 13 as well as sections 91 and 92 of the Evidence Act would exclude any reliance on any purported representation on the part of the appellant citing the decision of this Court in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 in support. I have carefully perused and analysed the Introducer Agreement. 15 Bearing in mind that it is a written agreement the rule of interpretation of it, is well settled. Once a contract is reduced to writing it must be read within its four corners without more. Also sections 91 and 92 of the Evidence Act would exclude any reliance on any purported representation on the part of the appellant. This Court had in Tindok Besar Estate Sdn Bhd v Tinjar Co (supra) held that when the terms of an agreement is reduced to writing, section 92 specifically excludes evidence to contradict, vary or add to the written agreement except in situations provided in the provisos to that section. The legal position is trite in this area of the law (see Donald James Ray And Anor v Bruno Sorrentino and Other appeals [2014] 1 LNS 1102 and Nortel Networks (Asia) Ltd & Ors v Sapura Holdings Sdn Bhd and Anor [2012] 8 CLJ 296). [27] It is also significant to note that the Introducer Agreement also contains an Entire Agreement Clause which estopped the respondent from relying on any purported representation by the appellant, outside the scope of the agreement. The Entire Agreement Clause in Clause 13 states clearly that: “This Agreement contains the full and complete understanding between the Parties and supersedes all prior arrangement, agreement and understanding, whether written or oral appertaining to the subject matter 16 of this agreement and may not be varied by an instrument signed by all parties.” [28] This Court in Berjaya Times Square Sdn Bhd v Twingems Sdn Bhd & Anor and another action [2012] 9 MLJ 510 had dealt with the entire agreement clause in a tenancy agreement, to hold that such clause binds the defendant in that case and thereby was prevented to raise the defence of misrepresentation. The Court of Appeal had also dealt with this clause in Bank Perusahaan Kecil & Sederhana Malaysia v Iskandar Zulkarnain Zainal Abidin [2013] 1 LNS 308 and had denied a defence of misrepresentation on the basis of the Entire Agreement Clause (see also Hairin Corporation Sdn Bhd v Rimbun Tekad Premix (Trengganu) Sdn Bhd [2016] 3 MLJ 782). [29] In my view and having regards to decided authorities, the alleged representation by the respondent therefore cannot form part of the Introducer Agreement. With Clause 13 in place we are in no position to read into the Introducer Agreement any other obligations than what is written in Clause 4. The implication of the Entire Agreement Clause means that no extraneous evidence may be considered to interpret, to supplement or to contradict the appellant’s obligations as set out under

17 [30] Having found so I agree with the appellant’s counsel that the Introducer Agreement being a written agreement, disentitles the parties to import any other terms to be read into it. Thus the Introducer Agreement, as it stands is not a contract of selling influence or influence peddling and would not come within the ambit of a contract offending public policy under section 24 of the Contracts Act. [31] The respondent is estopped from making allegation of representations prior to the signing of the Introducer Agreement to be read into the Introducer Agreement. The respondent is not permitted by law to introduce unwritten terms or obligations to the Introducer Agreement in the light of sections 91 and 92 of the Evidence Act 1950. The scope of work as spelt out demonstrates the appellant’s obligations and cannot be construed as having been to utilise his alleged influence or connections with CRBC to secure the Project. [32] The decision of the High Court as affirmed by the Court of Appeal, in my view had erroneously accepted the alleged representation as part of the Introducer Agreement without overcoming the legal impediment of the Entire Agreement Clause as well as sections 91 and 92 of the Evidence Act. Both courts had not explained how the alleged representation made by the appellant if at all, can form part of the 18 Introducer Agreement to constitute illegality in the first place, before even applying the principles enunciated in Merong Mahawangsa. Misapplication of Merong Mahawangsa [33] The reliance on the alleged representation was wrong in law. Because of this misapprehension the case had been derailed to delve on the question of illegality which was unnecessary in the first place. Even in dealing with the illegality issue the courts below once again misapplied the principle of law on illegality. As a result considerable amount of time had been spent at all levels on the principle of illegality decided in Merong Mahawangsa, which eventually led to the leave question allowed by this Court. It was also canvassed before us at great length. Reference must now be made to Merong Mahawangsa. [34] At the High Court the claim against Merong Mahawangsa was allowed and it was affirmed by the Court of Appeal. The Federal Court however overruled the decisions of the Courts below. The leave question posed in respect of which the leave to appeal was granted is as follows: “Whether an agreement to provide services to influence the decision of a public decision maker to award a contract is a contract opposed to public policy as defined under section 24 of the Contracts Act 1950 and is therefore void?”. 19 [35] The simple fact in Merong Mahawangsa was that the appellant had requested the respondent to render the service to procure and secure the award of a government contract for the construction of a bridge to replace the Johore-Singapore causeway. The procurement of the bridge project was promised to the appellant therein on the basis of the respondent’s close relationship with a member of a Cabinet in the Federal Government. The promise between them was translated into a Letter of Undertaking where a price consideration of RM20 million would become payable upon the respondent rendering the said service. [36] After some laborious discourse and the perusal of the list of cases from various jurisdictions, the question was answered in the affirmative. As a result, the contract was found to be void pursuant to section 24(e) of the Contracts Act and the respondent failed to obtain the consideration of RM20 million as agreed. [37] In Merong Mahawangsa the essence of the subject matter in discussion was the object and consideration of the agreement between the parties which was nothing but a sale of influence on the Government authority to obtain a government contract. In that judgment this Court had traced the influence peddling as a public policy rule to the decision in Montefiore v Menday Motor Components Company, Limited [1918] 2 20 KB 241, Lemenda Trading Co. Ltd v African Middle East Petroleum Co. Ltd [1988] 1 QB 448 and Tekron Resources Limited v Guinea Investment Company Limited [2003] EWHC 2577 (QB). [38] I have perused each of the cases referred to by this Court in Merong Mahawangsa as submitted by the appellant, to appreciate the underlying public policy involved in the respective cases. I begin with the Canadian case of R v Cleary [1992] NSCO 43. In that case, Mr. Cleary offered his service to obtain a tender from the Government of Canada. Mr. Cleary was found guilty under the Canadian Criminal Code for making that agreement because pursuant to that Criminal Code it would be an offence for a person to pretend that he has influence with the government and would accept a benefit in return for any cooperation, assistance or an exercise of influence. [39] There was also a list of English decisions referred to in Merong Mahawangsa. The case of Tekron Resources Limited v Guinea Investment Company Limited (supra) was a decision of the English Court where the appellant therein acted as an intermediary to procure the award from the Guinean government for the benefit of the respondent. There was an issue on the contravention of the Guinean criminal law. It was a crime to procure official or governmental influence in exchange for 21 payment. The Court, however, found payment under the agreement claimable by distinguishing between influence per se and the sale of influence. [40] In Montefiore v Menday Motor Components Company, Limited (supra), the claimant was a member of the Imperial Air Fleet Committee which engaged the Air Board to provide funding to the defendant. On the facts, the judge found that the plaintiff had received a commission for using his position and the value of his good words and getting government assistance in money or contracts. It was held that it was contrary to public policy for a person to be hired for valuable consideration when he had access to use his position to procure a benefit from the Government. [41] Besides the above line of cases, there were also cases involving common law determination on public policy for the purposes of avoiding a contract referred to in Merong Mahawangsa. The English Court of Appeal in The Bunga Melati Dua (supra), referred to Lord Atkin’s guidance in Fender v Mildmay (supra) where Lord Atkin sitting in the House of Lords held that, “…public policy is always an unsafe and treacherous ground for legal decision…” and reminded that the doctrine should only be invoked in clear cases in which the harm to the public would be 22 “substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds”. [42] After referring to the earlier decisions on the subject Lord Atkin observed and made clear in that decision that the Court must remain vigilant not to transgress into the area reserved for the legislature. Lord Atkin was referring to the earlier case of Agerton v Earl Brownlow (supra). [43] There are also pre-Civil Law Act 1956 dicta which are binding on the Malaysian courts as listed out by learned appellant’s counsel. First in the case of Egerton v Earl Brownlow (supra) by the House of Lords. Through Parke B at pp.124 it was held that “…public policy is the province of the statesman, and not the lawyer, to discuss, and of the legislature to determine, what is the best for the public good, and to provide for it by proper enactments.” It was also observed in the case that “…the province of the judge to expound the law only; the written from the statutes: the unwritten or common law from the decisions…” of earlier precedents. [44] In Rodriguez v Spever Brothers (supra) Lord Parmoor sitting in the House of Lords reminded that in considering a rule of law founded on public policy, care must always be taken not to introduce a new principle 23 which, to be valid, would require the sanction of the Legislature. This important limitation must be maintained as it would be beyond the jurisdiction of a court to simply determine matters of public policy. [45] I have also considered the basis of illegality as argued and expounded at paragraph 67 of the written submission by the learned counsel for the respondent. To our minds, the grounds cited by the learned counsel failed to focus on the principle of public policy as enunciated in all the decisions referred to on the subject. The grounds relied upon such as the possibility of circumventing the tender process, on the factual matrix of this case, failed to reveal the harmful effect or the public injury that the Introducer Agreement would have. [46] The cited cases such as Singma Sawmill Co. Sdn. Bhd. v Asian Holdings (Industrialised Buildings) Sdn. Bhd. (supra), Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pak Leong (supra), are not cases related to section 24(e) but very much cases on section 24(a). Hence they are of no assistance to elucidate the meaning of public policy consideration confronting us. [47] It appears to me that the underlying principle of public policy in those cases was that, an agreement for the sale of influence on a government 24 authority offended public policy because such an agreement inevitably engendered corruption. Applying the principle it was clearly observed in Merong Mahawangsa by Jeffrey Tan FCJ at paragraph 74 of the judgment that: “Section 24 is a codification of the English Common Law. Therefore, it is contrary to Malaysian public policy that a person be hired for money or valuable consideration, to use his position and interest to procure a benefit from the Government, as the sale of influence engenders corruption and undermines public confidence in the Government, which is inimical to public interest.” [48] Learned author in Cheshire and Fifoot’s Law of Contract (8th edition), at page 322 had made the following observations on this subject: “First, although the rules already established by precedent must be moulded to fit the new conditions of a changing world, it is no longer legitimate for the Courts to invent a new head of public policy. A judge is not free to speculate upon what, in his opinion, is for the good of the community. He must be content to apply, either directly or by way of analogy, the principles laid down in previous decisions. He must expound, not expand, this particular branch of the law. Secondly, even though the contract is one which prima facie falls under one of the recognised heads of public policy, it will not be held illegal unless its harmful qualities are indisputable. The doctrine, as Lord Atkin 25 remarked in a leading case [1939] AC 1, ‘should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds … In popular language… the contract should be given the benefit of the doubt.” [49] It is to be observed that section 24 deals with such consideration and objects of a contract as are unlawful and therefore illegal. This section is in pari materia with section 23 of the Contracts Act of India. The meaning of public policy was explained by learned author in Pollock and Mulla on the Indian Contract Act and Specific Relief Act (10th Edition) as the principle which declares that no man can lawfully do that which has a tendency to be injurious to the public welfare. In its commentary on section 23 under the heading ‘Opposed to Public Policy’ it was observed that: “The general head of public policy covers, in English law, a wide range of topics. Agreements may offend against public policy by tending to the prejudice of the State in time of war (trading with enemies, etc), by tending to the perversion or abuse of municipal justice (stifling prosecutions, champerty and maintenance) or, in private life, by attempting to impose inconvenient and unreasonable restrictions on the free choice of individuals in marriage, or their liberty to exercise any lawful trade or calling. … it is now understood that the doctrine of public policy will not be extended beyond the classes of cases already covered by it. No court can invent a new head of public policy.” 26 [50] In my view, it is clear that the principle of law on public policy decided in Merong Mahawangsa may only be applicable if the public policy underlying an agreement can be applied by analogy to the Introducer Agreement, and if the harmful qualities of influence peddling in this case to the Malaysian public are indisputable. [51] Thus, what must be borne in mind is that a judge is not free to speculate upon what, in his opinion, is good for the community. He must be content to apply, either directly or by way of analogy, the principles laid down in previous decisions. He must expound, not expand, this particular branch of the law. And not hold any contract illegal unless its harmful qualities are indisputable. [52] The High Court as well as the Court of Appeal, had wrongly applied the principle of Merong Mahawangsa because it was done without any analogy to the underlying principle of public policy enunciated in that case. Instead, the basis of applying it was purely by making a finding that the Introducer Agreement had a strong and inextricable nexus with the Project of the Government. This was clearly reflected in the judgment below: “In our case, the Government’s involvement was regarding the building of the project. It was submitted by counsel for the Plaintiff that the main contract had been signed between BLT and MITISA. 27 Therefore the Introducer Agreement would not involve the Government. With due respect, I don’t agree with that view. When prices were marked up at sub contract level to enable the Plaintiff to be paid RM4,276,027.10 as provided in Clause 6 of the Introducer Agreement, it would follow that it would result in lower quality and shoddy workmanship as well low quality materials. This means that the building would need repair and the Government and the taxpayer would have to pay. So it is not true that the Government would not suffer.” [53] The Court of Appeal had also echoed similar observation and had made the following observation in paragraph 54 of the judgment: “…Since the primary object of the Agreement was that the plaintiff would use his influence (“influence peddling”) to procure the sub-contract in respect of a public interest Project, we consider that the Agreement is void as being in contravention of public policy, according to the principle in Merong Mahawangsa’s.” [54] Quite clearly from the above quoted paragraphs that both the High Court and the Court of Appeal had wrongly applied Merong Mahawangsa on the basis that the Introducer Agreement was underpinned by the Project which was expended on tax payer’s funds. Whilst the High Court found that the current appeal fell squarely on all fours with Merong Mahawangsa, the Court of Appeal disagreed as it was found that the 28 influence peddling in the present appeal was not used directly on the government authority but on CRBC, a private entity. That notwithstanding, the Court of Appeal nevertheless held the same view that the Introducer Agreement was an agreement within the scope of section 24(e) and within the principle in Merong Mahawangsa due to the presence of the public interest element. [55] There is no legal basis for the courts below to apply Merong Mahawangsa to the Introducer Agreement. Merong Mahawangsa was decided upon its set of facts where it was clear that private influence peddling is entirely harmful to the Malaysian public. In this regard, both the trial court and the Court of Appeal had purported to speculate on the public injury which would be brought upon by the Introducer Agreement. [56] The harmful effect deduced by the High Court as affirmed by the Court of Appeal was not grounded on any evidence or any legal deduction. [57] The harmful effect as explained by the High Court that, when prices were marked up to enable the appellant to be paid a hefty consideration, that would translate into poor quality work, which was accepted by the Court of Appeal, was pure conjecture. This is not the kind of harm to the 29 public which is not indisputable. It maybe true that the Introducer Agreement bears close nexus with a Government funded project. But that is not sufficient to strike it down as being illegal contrary to section 24(e). [58] It cannot be over emphasised that an agreement by way of sale in public office tend to prejudice the public service by interfering with the selection of the best-qualified persons or services. Such sales are therefore, unlawful and void. It bears repetition however based on the law expounded on determining public policy, it is never the duty of a judge to speculate or opine on the pros and cons of influence peddling over a private party to obtain a private contract, because it is within the domain of the legislature to determine and to provide for it by proper enactments. The court is to only expound the law, either the written law from statutes, or the unwritten law from common law or text-writers of acknowledged authority, and upon principles clearly deduced from them by sound reasons and just inference. [59] As to what constitutes public injury is not immutable since it varies and changes with societal changing needs. Very often the legislature fails to keep pace with the change or provide for all eventualities. It is obligatory on the court to step in to fulfill any of such lacuna. The court must not lend its hand and, in consonance with public conscience and 30 public welfare, must intervene in the exercise of freedom of contract, which brings harm to society or causes public injury. While doing so the court cannot lose sight of the long-established principles as earlier decided. [60] It is clear that the underlying public policy in Merong Mahawangsa merely relates to public policy where the sale of influence peddling is directly on the public authority to obtain a Government contract. Since it is a doctrine of common law it must be governed by earlier pronouncements by the court. The list of cases referred to by Merong Mahawangsa had also been premised on that same principle. [61] This head of public policy had been identified in Merong Mahawangsa as the sale of an influence of a government official where it was very clearly stated in the judgment of this Court in that case at paragraph 58: “But there should be no difficulty to place to which head of public policy applies to a contract for the sale of influence, for it is ‘a recognised head of English public policy that the court will not enforce a contract for the sale of influence particularly where the influence is to be used to obtain contracts or other benefits from persons in a public position:”(emphasis ours) 31 [62] I therefore find it clear that the contract for the sale of influence peddling of a public authority is the established head of public policy in English law as applied in Malaysia in Merong Mahawangsa. [63] The respondent had not established what was the clear and harmful effect that could be deduced from such an act of circumventing that tender process. On the factual matrix of this case, unlike that in Merong Mahawangsa, I am not able to infer that the Introducer Agreement may engender corruption, or any other clear harmful effect on the Malaysian public. I reiterate the reminder by Lord Atkin in the leading case on the subject in Fender v St. John Mildmay that the doctrine of public policy ‘should only be invoked in clear cases in which the harm to the public is substantially incontestable’. No Clear Evidence on Peddling [64] The other aspect of Merong Mahawangsa is this. That the object of the agreement to procure the award of the Government Project was supported by substantial and cogent evidence, including the admissions by the relevant parties. Whereas the alleged influence peddling in the present appeal is not even stated in the Introducer Agreement. In any event as alluded to earlier, the Introducer Agreement does not contain any clause on influence peddling. There is therefore no cogent evidence in 32 support of such peddling. This is yet another reason why Merong Mahawangsa cannot apply to the Introducer Agreement. [65] Concluding my deliberations on the issue of illegality, I agree with the appellant that the Court of Appeal was in clear error in invoking public policy to invalidate the Introducer Agreement on both aspects. First the alleged influence peddling is not supported by clear evidence as required in the test propounded by Merong Mahawangsa and the alleged public policy against influence peddling in this case, is not indisputable and not established as absolutely harmful to the Malaysian public. On both scores the Introducer Agreement therefore cannot be invalidated under section 24(e) of the Contracts Act. Hence there was no basis to rely on the principle of law on public policy as established in Merong Mahawangsa, to hold that the Introducer Agreement is illegal. In view of the facts and circumstances of the case, I decline to answer the leave question posed. In this regard, my learned brothers Justice Ahmad Maarof (PCA) and Justice Azahar Mohamed have read this judgment in draft and have expressed their agreement with my views that it is unnecessary to answer the leave question posed. 33 No finding of facts [66] In concluding that the appellant had failed to prove his claim the trial court went on to construe Clauses 5, 6 and 7 of the agreement and concluded that the appellant had failed to prove his claim. The trial Judge was clearly wrong to conclude that the appellant had failed to prove his case by construing the respective clauses. This is clearly reflected at pages 37 and 38 of the grounds of judgment where it was stated that: “I interprete the above clause to mean that the main bulk of the work was done by the Defendant and the Plaintiff’s contribution was to revise upwards the price into what is called a Second Quotation.” … “I am of the opinion that the Plaintiff had not proven that he is entitled to the claim as in his prayers in the statement of claim.” [67] The Court of Appeal too did not deal with the matter and made no finding on the performance by the appellant of his obligations pursuant to Clause 4 of the Introducer Agreement. This was made clear in paragraph 32 of its judgment below: “Should we decide on the threshold issue in the affirmative, the effect would be that the Agreement is null and void ab initio and thus there would not arise the other issues on appeal stated above, as a contract which is void for illegality confers no rights or obligations on the parties thereto.” 34 Despite the above statement, the Court of Appeal had affirmed the judgment and the order made by the High Court, which also includes the finding that the appellant had failed to prove his case and that he was not entitled to the claim. The Court of Appeal had further erred in affirming that part of the High Court decision without deliberating on the matter. [68] Upon reversing the Order of the Court of Appeal on the issue of illegality, I am now faced with what remained to be decided as to whether the appellant had made out its claim against the respondent on its merits. In the Statement of Claim the appellant claimed the sum of RM 4,276,027.00 pursuant to Clause 6 of the Introducer Agreement or alternatively any increased or decreased consideration sum pursuant to Clause 7(c) of the Introducer Agreement plus interest. Facts Finding by Appellate Court [69] Before I embark on dealing with this part of the judgment, I am mindful of the role of the appellate court in undertaking finding of facts not made by the courts below. In this regard it would be appropriate for me to refer to the decision of the Federal Court (Singapore) in Wah Tat Bank Ltd & Ors v Chan Cheng Kum & Ors [1967] 2 MLJ 263 on this issue. In that case the trial judge made no findings of fact though a considerable number of witnesses were called to prove the existence or non-existence 35 of the alleged custom or usage of the trade involved in that case. A retrial Order was made for the disputed issue to be determined. Wee Chong Jin CJ made the following observation in doing so: “…I might have felt disinclined, sitting on an appellate court, to attempt to do so except that the counsel for both parties agreed that all available evidence appears in the record, that the credibility of the witness who gave evidence on the usage …and that all the circumstances of the case, none of the parties would suffer any injustice if this court should deal with this issue of facts.” [70] Similar observations were made in the Privy Council case from Jamaica in Chin v Audrey Ramona Chin (Jamaica) [2001] UKPC 7 where Lord Scott of Foscote observed that: “…The normal and proper function of an appellate court is that of review. An appellate court can within well-recognised parameters, correct factual findings made below. But where the necessary factual findings have not been made below and the material on which to make those findings is absent, appellate court not, except with the consent of parties.” [71] I agree with the above observations and we hold the view that the appellate court should not attempt at making any finding of fact which the court below failed to do. However, the exception being that both parties have agreed to it. Learned counsel of both parties had in their submissions 36 before us, focused very much on the issue of illegality. However, in their written submissions parties had submitted and invited this Court to address on the performance of the Introducer Agreement by the appellant while acknowledging that both the courts below had failed to address or made the necessary findings of facts on the same. By this consensus, I proceed to deliberate on the performance of the Introducer Agreement by the appellant. The Claim of the Appellant [72] To recapitulate, in dealing with this part of the appeal I am mindful that, stripped off any representation on influence peddling, the obligations of the appellant must be strictly construed upon the written terms as spelt out in the Introducer Agreement. It was submitted that the appellant had performed all the obligations as stipulated in Clause 4. Hence the appellant is entitled to the payment as agreed thereunder. The pleaded defence by the respondent was by placing reliance on representations made by the appellant prior to the written agreement is excluded under the law. [73] Alternatively, it was the defence of the respondent that, the appellant had failed to carry out his obligations in the Introducer Agreement because ultimately the respondent obtained the Project from CRBC through its own 37 effort and that the price for the Project procured by the respondent was lower than even the First Quotation. The respondent claimed that the contract was obtained through its own initiatives, without the assistance of the appellant. Decision on Liability (Dissenting) [74] The second part of the appellant’s appeal was premised on the failure of the trial Judge as well as the Court of Appeal, to make finding of facts as to whether the Introducer Agreement has been performed by the appellant. I have carefully scrutinised the Introducer Agreement. In summary the Introducer Agreement under Clause 3 creates an obligation on the respondent to submit a quotation which the respondent did. It is described as the First Quotation. The appellant is obligated to revise the First Quotation, which the appellant did and is described as the Second Quotation, for onward submission to CRBC. The other obligations of the appellant are spelt out in Clause 4 which constitutes, advising, negotiating and facilitating information regarding the revision of the First Quotation, compiling all relevant documentation required for the respondent to submit the revised quotation, assist, liaise and work with CRBC in matters leading to obtaining the tender of the Project. And finally to assist in securing the award of the Project to the respondent by CRBC. This is followed by 38 Clause 5 which says, the validity of the Introducer Agreement shall be dependent on the award of the Project to the respondent by CRBC. [75] Then, there is the payment clause. The consideration agreed for the initiatives of the appellant is as per Clause 6, which is the differential sum between the revised quotation (Second Quotation) at RM35,369,505.25 with the First Quotation of RM31,093,478.15, amounting to RM4,276,027.10. Then there is Clause 7(c) which states that: “In the event where there is an increase or decrease that shall effect the total Consideration sum due to the Introducer by virtue of Clause 6 above, the difference shall be either added on or deducted. In accordance with Clause 6 above and progressively as described in Clause 7(a) above. Though it was agreed under Clause 6 that the consideration payable is RM4,276,027.10, Clause 7(c) allows for adjustment of the said sum in contemplation of the variation of the quotation accepted by CRBC. [76] Now in evidence, tracing back the background and the chronology of events, the relationship between parties started when the appellant made his first contact with CRBC at a meeting on 25.01.2007. At that meeting, the appellant met Mr. Hu Bin, Mr. Felix Lim and Encik Mohd 39 Johari of CRBC and Generasi Tangkas. That was when the appellant discovered about the Project. The appellant then approached the respondent who became interested in some sub-contract work from the Project. [77] Thereafter, the appellant continued to work with the respondent which led to a revision of the First Quotation prepared by the respondent. There was evidence of communications between parties on the revision of the quotation, through various emails. Meetings were also held by the appellant on behalf of the respondent with CRBC over the quotation, which eventually led to a letter of appointment issued to the appellant appointing him as introducer and the signing of the Introducer Agreement between them. [78] The appellant testified that he had fulfilled all the obligations pursuant to Clause 4 in the following ways: a) The appellant said he took a concerted effort to vet and approve a candidate for CRBC to consider as a possible sub-contractor for the structural sub-contract works in respect of the Project; 40 b) Without his assistance the respondent did not even know of the Project nor took any step to bid for the Project on its own accord; c) The appellant provided services in liaising with the representative from CRBC to obtain the necessary information to prepare the necessary quotations and bid; d) The appellant reviewed, cross-checked and verified all the initial quotations provided by the respondent before submitting to CRBC for approval. There were the First Revised Quotation Submission, Second Revised Quotation Submission, Third Revised Quotation Submission, Fourth Revised Quotation Submission and Fifth Revised Quotation Submission; e) The appellant provided his assistance and services in ensuring that the respondent was provided with a Letter of Intent in respect of the Project. [79] The evidence both in terms of the contemporaneous documents in the various emails communications, as well as the oral evidence of the appellant revealed the efforts and initiatives undertaken by the appellant in carrying out his obligations under Clause 4. The respondent’s witnesses particularly Mr Ling Sing Hock (DW1), Mr New Chee Pheng (DW2) and 41 Mr Wong Yih Ming (DW3) in the course of the trial supported the above contentions by the appellant. [80] DW1 admitted that the appellant was the point of contact to the respondent in dealing with CRBC. In fact it was the appellant who communicated with CRBC on behalf of the respondent. According to DW1 he was not in direct discussion with CRBC and all discussions with CRBC were conducted by the appellant on behalf of the respondent. DW3 agreed that the appellant was the one working with CRBC on the Second Quotation. It was further admitted by DW1 that, before the appellant came into the picture he had never submitted or bid for structural work to CRBC, not being aware of the Project. [81] In total, prior to the signing of the Introducer Agreement the appellant had submitted revised quotation to CRBC as early or even before 05.05.2008. The quotation submitted were rejected by CRBC again and again on 10.07.2008, 02.09.2008 and 19.11.2008. Each of the submissions to CRBC was rejected. It was only on 04.12.2008 that the Letter of Intent appointing the respondent was issued. The Letter of Intent referred to both structural and architectural at RM61,000,000.00. This appear to be in tandem with the fact that prior to that, on 24.11.2008 Mitisa was awarded the structural and architectural to CRBC. It was also in 42 evidence that right after the issuance of the Letter of Intent there were instructions to commence work made by CRBC to the respondent on 05.12.2008. [82] The issuance of the Letter of Intent by CRBC to the respondent, the appellant contended, had indeed fulfilled what Clause 5 contemplates. All the appellant needs to show is that the contract work was awarded to the respondent. It is beyond dispute that the respondent had eventually been awarded the contract which constituted both the Structural works covered by the First Quotation and the revised Second Quotation and besides, the Architectural work. [83] It is also in evidence that since the Letter of Intent was issued the respondent then communicated directly with CRBC to the exclusion of the appellant. The respondent did not update the appellant of any further progress. When the purported letter dated 19.11.2008 rejecting the Second Quotation was issued, the respondent did not even notify the appellant to enable any remedial measure to be taken. The respondent never informed the appellant on the cancellation of the Letter of Intent of 04.12.2008 made by CRBC, purportedly by another letter dated 19.11.2008. 43 [84] On 22.11.2008 the respondent on its own, submitted a new quotation of RM61,688,966.25 for structural and architectural works without any notice to the appellant since they were then in direct communication with each other at the exclusion of the appellant. It is the appellant’s case that the respondent had bypassed the appellant and directly dealt with CRBC to avoid payment under the Introducer Agreement. [85] Having given my considerations to the evidence as appeared in the appeal records, we agree with the appellant that on evidence the appellant had demonstrated clearly how he had fulfilled his obligations under Clause

These contentions were not denied by the respondent in evidence. [86] The only defence raised by the respondent was premised on the fact that the award of the sub-contract made to the respondent was through no effort or initiative of the appellant, but it was on the respondent’s own initiative. But, I do not find anything in the Introducer Agreement that can be construed that the appellant guaranteed the sub-contract would be awarded to the respondent by CRBC. In this regard Clause 4 imposes obligations on the appellant to only assist in securing the award of the Project to the respondent by CRBC. These are the clear bargain between parties. 44 [87] From the evidence as appeared in the appeal records I am in agreement with the appellants that he had fulfilled his obligations as spelt out under Clause 4 of the Introducer Agreement. The provisions in the Introducer Agreement in so far as the appellant’s entitlement to his remuneration is found in Clause 6. Clause 7(c) specifically provides that the consideration sum may vary depending on the actual sum for which the respondent would ultimately be awarded the Project. In the event where there is an increase or decrease that shall affect the total consideration sum due to the Introducer by virtue of Clause 6 above, the difference shall be either added on or deducted. The respondent ultimately secured the Project for a sum of approximately RM58.6 million which includes both the structural and architectural works. [88] I further agree with the appellant that Clause 5 had already been fulfilled when the respondent was given the Letter of Intent. The argument of the respondent was that since the respondent was not awarded with the sub-contract based on the Second Quotation Clause 5 had not been met, that goes against the clear wording of that clause. [89] Having said that, in the circumstances of the case the appellant would not be paid under Clause 6 but under Clause 7(c). Even though the respondent ultimately secured the Project for a sum of approximately 45 RM58.6 million, it is not disputed that the contract awarded includes the structural work which is the subject matter of the Introducer Agreement. Thus I agree with the appellant that the amount to be paid to the appellant is in accordance with Clause 7(c) and not Clause 6. [90] In computing what actually was the contract sum for structural work DW3 prepared two summaries. The First Summary was then withdrawn on the rebuttal made by the appellant’s witness PW3 alleging manipulation of the figures to defeat the claim of the appellant. PW3 was a Quantity Surveyor with the Government Department (JKR) who had since retired after 35 years. [91] Now in the Second Summary, DW3 was questioned in cross examination on how he had arrived at the figure for structural work as only RM29,174,180.42 excluding preliminaries. He first testified that he obtained the figures based on the Bill of Quantities which he admittedly said that they were not before the Court. [92] In the end DW3 admitted to the various figures in his testimonies below: 46 You agree that based on your calculation that the contract awarded for the structural work by CRBC to Gainvest is RM34,455,367.70? Based on your document you prepared. DW3 Yes You agree that RM34,455,367.70 minus RM31.093.478.15, give me the figure. DW3 RM3,361,889.55 You agree that based on the terms of the Introducer Agreement that would be the sum due to the Plaintiff, Isn’t that correct? DW3 Yes [93] As such the appellant in my view should be entitled to the difference between the First Quotation i.e. RM31.093,478.15 and the actual sum awarded to the respondent for the structural work only. DW3 in evidence had agreed that the award on structural work to the respondent was based on the sum of RM34,455,367.70. In view of the above evidence I hold the view that the respondent is liable to pay the appellant the sum of RM3,361,889.55 pursuant to Clause 7(c) together with costs and agreed interest of 10% as per Clause 8(c) from date of filing, until judgment date and thereafter judgment interest of 5% until full settlement. [94] I would therefore have allowed this appeal with costs. 47 [95] This judgment is made pursuant to section 78 of the Courts of Judicature Act 1964 due to the retirement of Justice Zaharah Ibrahim, Chief Judge of Malaya and Justice Alizatul Khair, Federal Court Judge. sgd. ROHANA YUSUF Judge Federal Court of Malaysia Dated: 20 November 2019 Counsel for the Appellant: Cecil Abraham (Sunil Abraham with him) Messrs Cecil Abraham & Partners Suite 12.01, Level 12, Menara 1MK 1, Jalan Kiara, Mont Kiara 50470 Kuala Lumpur Counsel for the Respondent: Christopher Leong (Michelle Khor with him) Messrs Gan & Zul Level 30, Tower B, Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur 48 49 50