Schedule
Schedule H of the Housing Development (Control And Licensing) Act 1966 and/or any other Acts, Rules, Regulations and Laws to be enacted by the relevant authority. The Purchaser shall ensure that a sum equivalent to 30% of the Total Purchaser Price in accordance to Clause 2(iii) of this Agreement is paid at the First Reconciliation Date. In such event, the Company shall also refund to the Purchaser an amount equivalent to the deposit for the units of the confirmed sale. The difference between the net selling price in the Schedule H of the Development (Control and Licensing) Act 1966 shall only be paid at the Final Reconciliation Date. (b) Within 30 months from the date of payment of the Deposit (hereinafter referred to as “the Final Reconciliation Date”), the Purchaser shall pay a final sum of 50% of the Total Purchase Price in accordance of Clause 2(iv) of this Agreement to the Company in accordance of this Agreement in the event that the Purchaser is unable to secure the sub-purchaser at the Final Reconciliation Date. At this material time all deposit for the confirmed sale units shall be paid to the Purchaser. (c) The Company shall subject to Clause 5(a) and Clause 5(b) of this Agreement, pay to the Purchaser the difference at the Final Reconciliation Date. The difference shall mean difference net selling price and the Total Purchase Price or part thereof. (d) For avoidance of doubt the sub-sale shall be considered as confirmed sale upon happening of the following event:- (A) Purchaser With Loan (i) Execution of the sale and purchase agreement in accordance to Schedule H of the Housing Development (Control and Licensing) Act 1966; and (ii) Execution of the loan documentation prescribed by the financial institution; and (iii) First disbursement being made by the financial institution. (B) Cash Purchaser (i) Execution of the sale and purchase agreement in accordance to Schedule H of the Housing Development (Control and Licensing) Act 1966; and (ii) Payment is up to date in accordance to the claim by the Company in accordance to the Schedule H of the Housing Development (Control And Licensing) Act 1966.” Parties contentions [13] It is undisputed that pursuant to the said Agreement, the plaintiff had made payment of the Deposit in the sum of RM7,261,488.00 to the defendant in year 2017. [14] It is also not disputed that subsequent to the Deposit payment, the plaintiff had managed to sell 173 units of the apartment to individual purchasers totaling RM34,957,656.00 as at March 2019. [15] Thus, it is the plaintiff’s pleaded case that the said figure when added to the earlier paid Deposit of RM7,261,488.00 would make up a total of more than RM40 million in sales, which by itself has exceeded the Total Purchase Price. Hence, the plaintiff contends that they should be discharged from their obligation to make further balance payments of 30% and 50% respectively of the Total Purchase Price to the defendant under Clause 2(iii) and 2(iv) of the said Agreement. [16] That being the case, the plaintiff takes position that the defendant must return to the plaintiff all deposits paid by individual purchasers to the defendant at the time of signing the sale and purchase agreement between the purchasers and defendant, and pay up the difference between the actual sale price of the units sold and price per unit calculated on the base price as agreed in the said Agreement. [17] For the purpose of Enc. 13, the plaintiff states in its affidavit in support that beginning year 2019, the defendant has made multiple payments (worded as “bayaran ansuran/kecil”) to the plaintiff in performance of the defendant’s part in the said Agreement. [18] The plaintiff further states that the defendant had sent a letter dated 16.8.2021 to the plaintiff acknowledging a sum of RM5,990,705.50 was still due and payable by them to the plaintiff and had proposed certain repayment methods either in cash installments or in kind as settlement of the debt. A copy of the said letter was referred to in para 5 of the plaintiff’s director Gan Boon Lay’s affidavit dated 15-11-2021 (Enclosure 14) and exhibited as “GBL-1”. [19] Since the said letter was not stated to be on a ‘without prejudice basis’, the plaintiff contends that the said letter forms an admission on part of the defendant of the imputed debt in which the plaintiff claims they are entitled to recover summarily as per the plaintiff’s application in Enc. 13. [20] The defendant on the other hand contended that the plaintiff is actually a property agent who initially had offered to sell the apartment units in the Project for the defendant. Due to misrepresentation by the plaintiff in respect of the sales transaction, the defendant, who was not represented by any solicitor, was induced to sign the said agreement without knowing that the said agreement is against the Housing Development (Control and Licensing) Act 1966. [21] Thus, the defendant contended that the said Agreement is null and void since the said Agreement is not the Sale and Purchase Agreement as statutorily prescribed in Regulation 11(1) of Housing Development (Control and Licensing) Regulations 1989. [22] Further, it was contended by the defendant that should the said Agreement is held to be valid, the plaintiff has failed to comply with Clause 5 (a) of the said Agreement by reason of the default or refusal of the plaintiff to make further payment of 30% of the Total Purchase Price within 24 months from the date of payment of the Deposit. [23] In this regard, it is the pleaded case of the defendant that although the defendant agreed that 173 units of the apartment had been resold by the plaintiff to individual purchasers, the plaintiff knew from the beginning that payments from the purchasers will come from financial institutions where the purchasers obtained their loans from and such payments will be made according to the stages of the construction works undertaken by the defendant. Also, it was well within the knowledge of the plaintiff that the Project had been affected by the movement restriction order imposed by the government due to Covid- 19 pandemic beginning March 2020 that had delayed the construction works, hence slow payments from lender banks. [24] As such, the defendant contends that the plaintiff has breached Clause 5(a) of the said Agreement since no consideration has been duly passed from the plaintiff to the defendant in accordance with Clauses 2 (iii) and (iv) of the said Agreement, being condition that must first be fulfilled by the plaintiff before the defendant is obliged to perform their part in the said Agreement. [25] With regard to the letter dated 16.8.2021, the defendant avers in its affidavit in reply that one Teo Hock Bin who works for the plaintiff came to the defendant’s office somewhere in 2021 and had misrepresented the defendant relating to the imputed amount purportedly as due and owing. Acting on the pretext that it was to the defendant’s benefit to do so, Teo Hoch Bin had fraudulently induced the defendant to write the said letter of 16.8.2021 which was supposedly meant to be made on a without prejudice basis. Hence, the defendant takes position that such letter cannot be construed in law as an admission of the debt on part the defendant. [26] Finally, based on the facts and circumstances of the case, the defendant contends that the whole of the plaintiff’s action is premature and an abuse of the court’s process which is meant to evade the plaintiff’s obligations to make payments for the balance of the Total Purchase Price under the said Agreement. Hence, the defendant pleads that they should be allowed to defend their case through trial proper and Enc. 13 ought to be dismissed by this court. Analysis and decision [27] At the outset, I think it is necessary for me to first lay out the law and the trite propositions on summary judgment application under O.14 r.1 ROC 2012. [28] Order 14 Rule 1 ROC 2012 reads: “(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in a writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.” [29] In an oft-quoted authority for O.14 r.1 application, the Supreme Court in Bank Negara Malaysia v Mohd. Ismail Ali Johor & Ors [1992] 1 MLRA 190, held that:- “[32] The scope of O14 proceedings meant for cases which are virtually uncontested or uncontestable is now determined by the Rules of the High Court 1980. Generally where a defendant shows that he has a fair case for defence, or reasonable grounds for setting up a defence, or even a fair probability that he has a bona fide defence, he ought to have leave to defend. Order 14 is not intended to shut out a defendant. The jurisdiction should only be exercised in very clear cases. (Malayan Insurance (M) Sdn Bhd v. Asia Hotel Sdn Bhd [1986] 1 MLRA 269; [1987] 2 MLJ 183; [1987] CLJ (Rep) 182, Gunung Bayu Sdn Bhd v. Syarikat Pembinaan Perlis Sdn Bhd [1987] 1 MLRA 20; [1987] 2 MLJ 332; [1987] CLJ (Rep) 120). It was held in the well-known House of Lords' case of Jacobs v. Booth's Distillery Co [1901] 85 LT 262 that a complete defence need not be shown. The defence need only show that there is a triable issue or question or that for some other reason there ought to be a trial, and leave to defend ought to be given. In fact even though the defence is not clearly established, but only reasonable probability of there being a real defence, leave to defend should be given (Manager v. Cash [1889] 5 TLR 271). [30] In Alloy Automotive Sdn. Bhd v. Perusahaan Ironfield Sdn. Bhd. [1985] 1 MLRA 309, the Supreme Court held that: “A defendant ought not to be shut out from defending unless it is very clear that he has no case in the action. A complete defence need not be shown. The defence set up need only show that there is a triable issue or question or that for some reason there ought to be a trial.” [31] Thus, in dealing with this application what needs to be determined by this court is to see whether the defendant has successfully raised as its defence a ‘triable issue or question or that for some reason there ought to be a trial’. [32] After perusing the pleadings and the affidavits filed by the parties, I cannot help but to express my observation that the defendant has advanced a form of ‘confession and avoidance’ in its defence against the plaintiff’s claim. [33] Confession here would refer to the non-denial by the defendant of the existence of the said Agreement as well as the Deposit receipt from the plaintiff and partial payments made to the plaintiff. However, the defendant on the same time sought to avoid the legal consequences or to escape legal liability from the said Agreement by pleading illegality as well as misrepresentation surrounding the events prior to the signing of the said Agreement. In addition, the defendant also raised fraudulent inducement as a ground to avoid its letter dated 16.8.2021 from being construed in law as admission of the debt. [34] In my view, the availability of this type of defence to a litigant is beyond reproach in our jurisprudence. In Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478, the Federal Court held that:- “In Jacob and Goldrein’s Pleadings: Principles and Practice [1990] pp 133-134 in dealing with confession and avoidance, the following is stated: Confession and Avoidance Meaning The term ‘confession and avoidance’ is the description of a plea in the defence which, while expressly or impliedly admitting or confessing or assuming the truth of the material facts alleged in the statement of claim, seeks at the same time to avoid or destroy the legal consequences of those facts. The plea is invoked by alleging fresh or additional facts to establish some legal justification or excuse, or some other ground for avoiding or escaping legal liability. The defendant, as it were, confesses the truth of what is alleged against him but proceed immediately to ‘avoid’ the effect of such allegations.” [35] Such defence is also allowed and appears open to be resorted to by any litigant by virtue of O.18 r.8(1)(a) ROC 2012 which provides that:- 8. “Matters which shall be specifically pleaded (O. 18, r. 8) (1) A party shall in any pleading subsequent to a statement of claim plead specifically any matter, for example, performance, release, any relevant statute of limitation, fraud or any fact showing illegality— (a) which he alleges makes any claim or defence of the opposite party not maintainable; (b) which, if not specifically pleaded, might take the opposite party by surprise; or (c) which raises issues of fact not arising out of the preceding pleading.” [36] The effect of the aforesaid rule has been commented in Malaysian Civil Procedure “White Book” at page 253 as follows:- “Effect of rule – Wherever a defendant has a special ground of defence or raises an affirmative case to destroy a claim he must plead specifically the matter he relies on for the purpose (Mohamed Abu Bakar s/o Yusof v PA Syer Aboothahir s/o P Ahmed (1990) 1 MLJ 26). “The effect of the rule is, for reasons of practice and convenience, to require the party to tell his opponent what he is coming to court to prove” per Buckley LJ in Re Robinson’s Settelement; Gant v Hobbs [1912] 1 Ch 717 at 728, CA (Eng): Re Estate of Choong Lye Hin, decd; Choong Gim Guan v Choong Gim Seong [1977] 1 MLJ 96;…” [37] In this regard, I find that the Defendant in its Statement of Defence has specifically pleaded that the said Agreement was tainted with illegality being its forefront in avoiding the legal consequences of the said Agreement. Although the word ‘illegality” is not used but “untenable in law” instead, but when reference is made to the Housing Development (Control and Licensing) Act 1966 [Act 118] being the statute that the said Agreement is alleged to have offended, that in my mind would be sufficient to raise a similar defence of illegality and not just mere denial. [38] The necessity for me to identify for such pleading is due to the said Agreement, appears at first glance to me as not ex-facie illegal. I see it as a sort of a hybrid between financing and a joint venture type of agreement which are common and legal in business transactions. In this regard, it is trite that if a contract does not appear to be illegal on its face, the illegality alleged must be pleaded otherwise evidence of circumstances showing that it an illegal object will not be admitted (see: Civil Practice in Singapore and Malaysia Volume 1 by Jeffrey Pinsler at [627]). In the absence of a plea the court cannot act on ex facie illegality (see Merong Mahawangsa & anor v Dato’ Shazryl Eskay bin Abdullah [2015] 8 CLJ 212). [39] Having identified that illegality is well pleaded, I now venture into the question whether the said illegality, from the facts and circumstances of the case, is a triable issue that eventually will negate the plaintiff’s entitlement to summary judgment in Enc. 13. [40] Firstly, it is trite that Act 118 is an Act of Parliament to regulate the housing development industry in the country with its primary intention to safeguard the interest of the home buyers. Among its regulatory frameworks, there is a mandatory requirement imposed under reg. of the Housing Development (Control and Licensing) Regulations 1989), a subsidiary legislation under Act 118, for housing developers and purchasers to enter into agreement based on the Sale and Purchase Agreement as prescribed in the said regulation upon concluding their sale and purchase contracts of newly built housing accommodations. [41] For ease of reference, r.11(1) of the said regulation is reproduced below as follows:- “11. Contract of sale. (1) Every contract of sale for the sale and purchase of a housing accommodation together with the subdivisional portion of land appurtenant thereto shall be in the form prescribed in Schedule G and where the contract of sale is for the sale and purchase of a housing accommodation in a subdivided building, it shall be in the form prescribed in Schedule H. (1A) Subregulation (1) shall not apply if at the time of execution of the contract of sale, the certificate of fitness for occupation for the housing accommodation has been issued and a certified true copy of which has been forwarded to the purchaser. (2) No housing developer shall collect any payment by whatever name called except as prescribed by the contract of sale. (3) Where the Controller is satisfied that owing to special circumstances or hardship or necessity compliance with any of the provisions in the contract of sale is impracticable or unnecessary, he may, by a certificate in writing, waive or modify such provisions: Provided that no such waiver or modification shall be approved if such application is made after the expiry of the time stipulated for the handing over of vacant possession under the contract of sale or after the validity of any extension of time, if any, granted by the Controller. (4) A purchaser’s solicitor shall be entitled to a complete set of the contract of sale including its original and duplicate copies and all annexures required for the licensed housing developer to execute the contract of sale with the purchaser, free of charge subject to the undertaking of the purchaser’s solicitor to return the said documents intact in the event the contract of sale is not executed by the purchaser within fourteen (14) days from the date of receipt of such documents unless otherwise agreed by the licensed housing developer.” [42] In my view, apart from the said Agreement is prima facie not as per the prescribed agreement under the said regulation, the nature of ‘bulk purchase’ of newly built houses with intention to re-sell it to the public on a mark-up price has indeed raised an alarm on the validity of the said Agreement within the context of Act 118. It is also my view that such transaction may lead to difficulties in ascertaining or separating the true practice of real estate agents and the business of housing developers in accordance with the separate laws governing each of them. In case of abuse, the affected persons would certainly be the home buyers, the very group of persons whose interest are to be protected under Act 118. [43] On the issue of illegality or otherwise of a contract, section 24 of the Contracts Act 1950 provides as follows:- “24. What considerations and objects are lawful, and what are not The consideration or object of an agreement is lawful, unless- (a) it is forbidden by a law; (b) it is of such a nature that, if permitted, it would defeat any law; (c) it is fraudulent; (d) it involves or implies injury to the person or property of another; or (e) the court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.” [44] There is no doubt that the courts have always been strict to nullify contracts that contravene any law since such illegality or often termed as ‘statutory illegality’ involves going against statute which cannot be condoned as a matter of public policy. In passing, statutory illegality is quite different with ‘common law illegality’ which the courts have been shown to give more flexible approach in determining the validity or otherwise of the offensive contract. [45] Having said that, since it was my earlier observation that the said Agreement is not ex-facie illegal, I am of the view that due regards must also be given to the cardinal principle of contract law that parties to a contract must adhere to the terms that had been promised and agreed among them. The trite propositions for the said principle can be found in Merita Merchant Bank Singapore Ltd v. Dewan Bahasa dan Pustaka [2014] 9 CLJ 1064 where the Federal Court had this to say; "It is trite that parties are free to enter into a contract with terms and conditions as they deem fit and these terms and condition are binding on the parties who have in the first place agreed to be bound by it....It was a well-established principle sanctioned by the doctrine of sanctity of contract that parties who make agreement must adhere to their terms." [46] Further, I find it also instructive to refer to the advice given by the Supreme Court in Beca (M) Sdn Bhd v Tan Choong Kuang & Another [1986] 1 MLJ 390 that not all breach of a statutory prohibition render an agreement to be illegal. In the said case, it was held that:- “… Not every breach of a statutory prohibition would render an agreement illegal or void though such breach may attract criminal penalty. The fundamental question is whether the Enactment means to prohibit the agreement. It is important that the courts should be slow to imply the statutory prohibition of agreement, and should do so only when the implication is clear. Whether an agreement is implicitly forbidden depends upon the construction of the statute, and for this purpose no one test is decisive. Persons who deliberately set out to break the law cannot expect to be aided in a court of justice. It would be a different matter when the law is unwittingly broken. An agreement for the sale of, say, frozen food, is not to be considered illegal or void merely because the premises in which the frozen food is sold does not comply with the law. We recognise that each case must be decided by reference to the relevant statute.” [47] Hence, based on the background facts and circumstances relating to Enc. 13, I find there is at least an issue to be tried, a serious issue indeed, between the propriety of the said Agreement under the doctrine of sanctity of contract and statutory illegality that may have tainted the said Agreement which the court should not lend its hand to give effect to. [48] On another account, the same sentiment was also echoed by me when I dismissed another application made by the defendant to strike out the plaintiff’s action under O18 R19(1) [Enc. 11] couched on the same illegality ground. In that application, it was my findings there that the affidavit evidence per se produced, which was in essence similar in Enc. 13, were totally insufficient to support the defendant’s position that the plaintiff’s instant action against the defendant is obviously unsustainable. [49] The law as its stand, even a single triable issue raised entitles an application for summary judgment under O14 R1 to be dismissed. In South East Asia Insurance Bhd v. Kerajaan Malaysia [1998] 1 CLJ 1045, it was held, as per Shaik Daud Ismail JCA that:- “It is well settled that if a defendant in an O. 14 application succeeds in raising even a single triable issue. it will not be a fit and proper case to order summary judgment We are satisfied that there are triable issues in this case and, therefore, it is not a fit and proper case for the court to exercise its discretion to order summary judgment. It is not such a plain and obvious case as the learned judge made it out to be.” [50] That being given, I do not find it necessary for me to consider other issues raised by the defendant in resisting Encl. 13. However, if I have to consider those issues for the sake of completion, my views are that considering the conflicting affidavits relating to the alleged misrepresentation and undue influence, it is impossible for me at this juncture to make any firm finding on those matters without having the benefit of seeing and hearing the witnesses through examinations via normal process of hearing. [51] Finally, the amount prayed for in Enc. 13 is part of the whole amount claimed in the writ and statement of claim. Both the amount arose from the same source of dispute, i.e. the said Agreement. Thus, since illegality of the said Agreement is the forefront issue to be determined, I find it rather preposterous for me to severe or to view both the amount as separate. They must be decided together in one-go, and of course through proper trial. Conclusion [52] In the premises of the aforesaid, I dismissed Enc. 13 with no order as to costs. Dated: 13th May 2023 …………………………………………. (NOOR HISHAM BIN ISMAIL) Pesuruhjaya Kehakiman Mahkamah Tinggi, Johor Bahru Counsels for Plaintiff Mr Gan Techiong together with Ms Wong Wan Ting Messrs. Gan & Lim Johor Bahru Counsel for Defendant Ms Shobana Mala a/p Krishnan Messrs. Shobana M & Associates Johor Bahru Cases referred to: 1. Bank Negara Malaysia v Mohd. Ismail Ali Johor & Ors; 2. Alloy Automotive Sdn. Bhd v. Perusahaan Ironfield Sdn. Bhd.; 3. Yam Kong Seng & Anor v Yee Weng Kai; 4. Merong Mahawangsa & anor v Dato’ Shazryl Eskay bin Abdullah; 5. Merita Merchant Bank Singapore Ltd v. Dewan Bahasa dan Pustaka; 6. Beca (M) Sdn Bhd v Tan Choong Kuang & Another; 7. South East Asia Insurance Bhd v. Kerajaan Malaysia. Legislations referred to: 1. Order 14 Rule 1 Rules of Court 2012 2. Housing Development (Control and Licensing) Act 1966 3. Purchase Agreement in Regulation 11(1) of Housing Development (Control and Licensing) Regulations 1989 4. O.18 R.8(1)(a) of ROC 2012 5. Section 24 of the Contracts Act 1950