Ypj Plantations Sdn.Bhd. v Maju Construction and Development Sdn. Bhd. (JA-22C-3-02/2020)

(a) the defendant must have entered an appearance;

(b) the statement of claim must have been served on the defendant; and ____________________________________________________________________________________________ 3

(c) the affidavit in support of the application must comply with the requirements of O. 14 r. 2 of the ROC. [7] In National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283, the Federal Court held that if, these conditions are satisfied, the plaintiff will have established a prima facie case and he comes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him. [8] Likewise in Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544, where the Federal Court held that once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues. [9] Now the question before this court is whether the Defendant has succeeded in establishing triable issues. The Defendant’s arguments [10] The Defendant submitted that Plaintiff’s application for summary judgment shall be dismissed with costs as there are issues to be tried. The triable issues are as follows, inter alia:

(a) the failure of the Plaintiff to comply with one of the conditions precedent stipulated in the Joint Development Agreement which was entered into by both parties on 7.11.2016 (“JDA”); and

(b) this suit is premature as this matter should be first referred to the Dispute Panel as required by the JDA. ____________________________________________________________________________________________ 4 Compliance of conditions precedent by the Plaintiff [11] As a brief background, both parties had entered into the JDA wherein the Plaintiff had given the Defendant exclusive rights to carry out development projects on the Plaintiff’s land held under PN 57157 Lot 22820 Mukim Ulu Sungai Johor, Daerah Kota Tinggi and PN 72325 Lot 22819 Mukim Ulu Sungai Johor, Daerah Kota Tinggi (“Land”). [12] Pursuant to the JDA –

(a) the Defendant had paid RM1 million to the Plaintiff being the 1st payment at the time of the execution of the JDA; and

(b) the Defendant had paid the stamp duty of the JDA amounting to RM651,256.00. [13] The Defendant argued that clause 3.1(c) of the JDA requires the Plaintiff to obtain the relevant approvals from the authorities for the Land to be zoned for “mixed development” within three months from the date of the Agreement. However, according to the Defendant, after two years from the signing of the JDA, the Plaintiff failed to comply with the condition and the status of the Land remains unchanged. [14] The question is whether the Plaintiff failed to comply with the condition precedent? [15] For ease reference, the relevant clauses of the JDA are reproduced as below – ____________________________________________________________________________________________ 5 “3. Conditions Precedent 3.1 Conditions The Following shall be the condition precedents to this Agreement and this Agreement shall be considered as unconditional upon the fulfilment of the last of the Conditions Precedent:

(a) …

(b) …

(c) YPJP shall obtain the relevant approvals from the authorities for the Land to be zoned for “Mixed Development”; and

(d) … (all the above hereinafter collectively referred to as the “Conditions Precedent”) within 3 months from the date of this Agreement (hereinafter referred to as the “Conditional Period”). In the event either Party is unable to fulfil the Conditions Precedent within the Conditional Period, the Parties hereby agree that a further extension of 1 month or any other period to be mutually agreed between Parties from the expiry of the Conditional Period shall be granted to the said Party to fulfil the Conditions Precedent (hereinafter referred to as the “Extended Conditional Period”).

3.2 Unconditional Agreement Upon the Conditions Precedent being or is deemed to be complied with, fulfilled and/or satisfied. this Agreement shall become unconditional.

3.3 Conditions Not Fulfilled In the event Conditions Precedent is not fulfilled and/or satisfied within the Extended Conditional Period, the Parties agree that: ____________________________________________________________________________________________ 6

(a) the Developer shall have the right to rescind this Agreement by giving notice to the effect to the other party and all such sum or sums of monies already paid by the Developer to YPJP under this Agreement shall be refunded to the Developer within 14 days from the date of the notice free of interests and thereafter upon the full payment made by YPJP to the Developer, neither Party shall have any claim of whatsoever nature against the other. The Parties further agree that if the Conditions Precedent is not fulfilled and/or satisfied within the Extended Period due to the fault of the Developer and taking into consideration of the time, effort, legal costs, lost of opportunity, taxes, management costs and any other costs related therein incurred by YPJP for this Project, YPJP shall have the right to forfeit a sum of Ringgit Malaysia One Million (RM1,000,000.00) only being the initial payment made by the Developer to YPJP upon execution of this Agreement as stipulated in the Schedule of Payment in Appendix C; OR

(b) they may proceed under the terms of this Agreement with such necessary modification or amendments to the terms of this Agreement, as the Parties may mutually agree in writing. [16] It is clear from the above clauses of the JDA that all the conditions precedent must be fulfilled within a total period of four months from the date of the JDA. I find that clause 3.1(c) of the JDA requires the Plaintiff to obtain all relevant approvals from relevant authorities as for the Land to be zoned as mixed development. As at July 2019 i.e. three years after the signing of the JDA, the Land’s zone remains unchanged as agricultural even though Majlis Daerah Kota Tinggi in its letter had no objection if the Plaintiff makes an appeal for the Land to be rezoned from agricultural zone. ____________________________________________________________________________________________ 7 [17] It is trite that when an agreement contains conditions precedent, the relevant party must first perform the condition before a specific contract is considered in effect or any obligation is expected of either party. In light of this, I agree with learned counsel for the Defendant that based on the facts, there is a triable issue as to whether the Plaintiff failed to perform its condition precedent stipulated in the JDA. This issue is very pertinent as such failure would entitle the Defendant to be discharged from the further performance of the contract. Reference to the Dispute Panel [18] The Defendant submitted further that this suit is premature as this matter should be first referred to the Dispute Panel as required by clause 17 of the JDA. According to the Defendant, the Plaintiff should establish the Dispute Panel immediately after being requested by the Defendant vide its letter dated 17.9.2018. [20] Again, for ease reference, I reproduce the relevant clauses – “17. Dispute Resolution YPJP and the Developer shall use their best efforts to negotiate in good faith and settle amicably any dispute that may arise out of or relate to this Agreement or a breach thereof. If such dispute cannot be settled amicably through ordinary negotiations by appropriate representatives of YPJP and the Developer, the dispute shall be referred to a panel (“Dispute Panel”) comprising of:

(a) the Chief Executive Officers or duly authorized director of YPJP; ____________________________________________________________________________________________ 8

(b) the Chief Executive Officers or duly authorized director of the Developer; and

(c) a person not related or not having interest directly or indirectly whether in parties’ company or related company share, equity or gainfully in employment by of either parties which shall be appointed jointly by YPJP and the Developer, who shall meet in order to attempt to resolve and achieve a solution to the dispute within 30 days (or such other period as Parties may agree in writing) (“Discussion Period”) and upon achieving a solution to such dispute, such decision shall be binding on all Parties. The Panel may conduct their discussion in such manner as they think fit.

Legal Recourse

(a) If the Panel fails to resolve and achieve a solution to the dispute within the Discussion Period, the Panel may mutually agree that any of the Parties may resort to such legal recourse as deem fit by it.

(b) Pending the determination of the dispute under clause 17 and 18, the obligations of the Parties in accordance with the Agreement shall continue to be in full force and effect. [21] What can be seen in the JDA is both parties had intentionally agreed to have a mechanism in the event a dispute arises amongst the Plaintiff and the Defendant. Through this mechanism, when any dispute relating to the JDA occurs, it must first be resolved by negotiations between the parties. If the negotiations fail, the dispute must be referred to the Dispute Panel which is comprising a representative from each party as well as an independent ____________________________________________________________________________________________ 9 person. This panel has a sole duty as to resolve the dispute within 30 days from its establishment. In the event the Panel fails to resolve the dispute, then the parties may commence a legal action pursuant to clause 18 of the JDA. [22] Based on this observation, again, I agree with learned counsel for the Defendant that the failure of the Plaintiff to establish the Dispute Panel is a triable issue as to whether the Plaintiff can still bring a legal action against the Defendant albeit this pre-condition was not fulfilled. Conclusion [23] In Citibank NA v Ooi Boon Leong & 2 Ors [1981] 1 MLJ 282, the Supreme Court held that a matter ought to be decided under O. 14 once all the issues are clear and the matter in substance can be decided once and for all without going to trial. [24] Likewise in Bank Negara v Mohd Ismail & Ors [1992] 1 MLJ 400 where the majority judgment of the Supreme Court ruled that the requirement under O. 14 for the court to be satisfied that the defence has not only raised an issue but also that the said issue is triable. [25] Based on the above observation, I find that the Defendant had successfully established to the Court that the existence of some triable issues in its arguments to make out the Plaintiff’s application for summary judgment deserving to be dismissed. I am of the view that the questions of whether the Plaintiff failed to fulfil the condition precedent and the requirement of the Plaintiff to refer this dispute to the Dispute Panel before commencing this suit will conveniently be canvassed when the evidence be ____________________________________________________________________________________________ 10 presented during the full trial. Thus, I dismiss the Plaintiff’s application in Enclosure 63 with costs. Dated: 3.10.2022 -signed- (SHAMSULBAHRI BIN HAJI IBRAHIM) Judicial Commissioner, Johor Bahru High Court Counsels: For the Plaintiff – Mohd Zamri bin Mohd Idrus (Krishnaaveni Muniandy with him); Messrs Tawfeek Badjenid & Partners For the Defendant – Harikrishnan Kanapathy (Yogeswary Thiagarajah with him); Messrs K. Harikrishnan & Co. Cases referred to: • Bank Negara v Mohd Ismail & Ors [1992] 1 MLJ 400 • Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544 • Citibank NA v Ooi Boon Leong & 2 Ors [1981] 1 MLJ 282 • National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283 Legislation referred to: • Rules of Court 2012 - O. 14 r.