JCW

[Striking out – No cause of action for ‘negligence’ in respect of alleged failure to enter contract] This is an important case argued by Justin for the Defendant to strike out the Plaintiff’s claim. The Plaintiff (Syarikat Logistik Petikemas Sdn Bhd) filed a suit against the Defendant (Maruzen SH Logistics Sdn Bhd) for negligence in failing to enter into a contract with them. This is an important case because if the Plaintiff’s claim is allowed, it may open a floodgate that an alleged failure to enter into a Contract would lead to a Suit for negligence.  The Court struck out the Plaintiff’s claim. The Plaintiff’s claim against the Defendant was based on, amongst others, failing to enter into a contract with the Plaintiff to rent the relevant premises from the Plaintiff, and the alleged:- a) Negligent misrepresentation; and/or b) Breach of duty of care towards the Plaintiff under the purported business relationship between both parties. The Court inter alia held that :   (i)        Since there was negligent misrepresentation alleged on the part of the Defendant, what is vital to establish at this juncture is an underlying relationship between parties, where one party relies on the other and where one is in a dominant position which requires some fiduciary relationship. This is in line with the principle in Hedley Byrne & Co Ltd v Heller & Partners [1964] AC 465 (“Hedley Byrne”)    (ii)       Furthermore even if there was a business relationship between the parties, that by itself did not give rise to a fiduciary relationship, such as between a solicitor and client or any kind of relationship of proximity between the plaintiff and the defendant.   (iii)      It was not pleaded with precision or clarity, any ‘special relationship’ or ‘skills’ on the part of the Defendant to justify a professional duty of care to the Plaintiff. (iv)The ‘misrepresentation’ alleged by the Plaintiff is that the Defendant had intended to purchase and/or rent the relevant premises. This did not amount to a misrepresentation, but an expression of the Defendant’s intention that preceded the negotiations that followed. It is trite that it is not sufficient to plead the legal consequences without setting out in the pleadings the facts which give rise to that claim, or which impose on the defendant the particular duty or liability.

[Judgment in Default – Right to enforce Arbitration Agreement] Justin was the counsel for the Appellant in this Appeal which was allowed by the Federal Court. The Federal Court decided on important principles of law relating to the right to set aside a Judgment in Default based on a valid Arbitration Clause. The following Questions of Law were inter-alia answered by the Federal Court : 1.Can a Judgment in Default in Court be sustained when the plaintiff who obtained the Judgment in Default is bound by a valid Arbitration Agreement/Clause and the defendant has raised disputes to be ventilated via Arbitration pursuant to the Arbitration Clause? We answer the question in the negative. 2.Should the Court in hearing an application to set aside the Judgment in Default where a valid Arbitration Clause is binding on parties consider the “merits” or “existence” of the disputes raised by the defendant? We answer the question in the negative.”   The Federal Court further held as follows in respect of important points of law :   (i)       That even when a judgment in default has been procured, Section 10 of the Arbitration Act remains applicable (paragraph 48 (i) of the Grounds) (ii)      The judgment in default cannot act as a bar to arbitration because the Contractor in initiating Court proceedings has effectively breached the arbitration agreement ( paragraph 48(ii) of the Grounds) (iii)     The Employer’s application to stay the Court proceedings pending arbitration raises a jurisdictional point which the Court is bound to consider( paragraph 48 (iv) of the Grounds) (iv)      Clause 30.3(ii) of the PAM Contract entitles the Employer to refer any disputes or differences in relation to the set offs our counterclaim or any allegations of defective work to an arbitrator under Clause 34 of the PAM Contract and therefore , the right to payment under Interim Certificates under Clauses 30.2 or Clause 30.3.(i) are not “carved out” from arbitration ( paragraph 53 ( b) of the Grounds.)

[Secret Trust] This is the very first Federal Court decision on secret trust, a novel point of law argued by Justin and Chooi Peng who acted for the Defendants / Respondents. This case confirms that the law and principles of secret trust are part of the jurisprudence of Malaysian law and it applies where appropriate to ensure that the true intentions of the testator where there is a Will are carried out.   This case is an appeal by the Plaintiffs against the Court of Appeal decision, in their attempt to revoke the Grant of Probate issued to the Defendants. The Plaintiffs sought to argue that the deceased did not have the testamentary capacity to make the Will or there was undue influence exerted on the deceased by the Defendants. The deceased's Will named the Defendants as the executors and beneficiaries. The Defendants resisted the Plaintiffs' claim and in their Defence, pleaded that they are not the true beneficiaries of the deceased's estate because of a secret trust created by the deceased.     The Federal Court dismissed the Plaintiffs' appeal, maintained the Court of Appeal decision and answered the Leave Questions as follows :  (i)Whether the concept of secret trust is applicable to Malaysia as there is no decision regarding the applicability of secret trust? Affirmative (ii)Whether secret trust is applicable in a case involving the issue of testamentary capacity of a testator? Need not be answered but if must be answered, it would be in the Affirmative (iii)     Whether secret trust is contradictory to the Malaysian Wills Act 1959 and/or is against public policy as it can be abused? Negative   The Federal Court also amongst others held that : (a) Secret trusts enable a testator to direct the disposition of his or her property upon his or her death without specifying the actual beneficiary in the will whereby the property is bequeathed to a 'legatee' who holds it as a trustee for the secret beneficiary.  (b) The concept of secret trust, which is part of the law of trust and is governed by the rules of equity and the common law of England, is statutorily applicable in Malaysia by virtue of Section 3 (1) of the Civil Law Act 1956. (c)Secret trust operates outside the will, ie. dehors the will. Therefore, the Court's endorsement of the secret trust does not breach the Wills Act or any other statutory law.   (d) If the testator is ill, it does not deprive his ability or capacity to execute a will.

[Wound up company – retrospective santion] Justin was the co-counsel for the Appellants assisting Datuk Seri Gopal Sri Ram (Senior Counsel). The Federal Court clarified the earlier Federal Court case of Winstech Engineering Sdn Bhd v ESPL (M) Sdn Bhd [2014] 1 AMR 797 and inter alia held that the Official Receiver/Liquidator had no power to grant retrospective sanction.   The following Question of Law was answered in the negative : “Whether retrospective sanction from the Official Receiver/Liquidator of a wound-up Appellant/ Applicant in Court by itself can sufficiently clothe the Appellant and/or their solicitors with locus standi to proceed with the Appeal/proceeding in question without leave nunc pro tunc obtained from the Court?” The Federal Court further ruled and/or provided guidance as follows in respect of the options available to a litigant if they could not obtain sanction and/or could not obtain sanction in time i.e.   (i)        First, the plaintiff could make an urgent application to the Court of Appeal for extension of time to file the notice of appeal where an extension of time would in the normal course have been granted on proof of sufficient grounds. (ii)       Secondly, if the sanction was given by the liquidator subsequent to the filing of the notice of appeal, the plaintiff could have made a formal application to the Court of Appeal for leave nunc pro tunc so as to regularise the sanction by giving it retrospective effect. (iii)      Thirdly, if the liquidator refused to give his sanction, then the proper authority is the court. The plaintiff could have applied to the court under s 236(3) of the 1965 Act for the sanction, which sanction can be given retrospectively under the inherent discretion of the court. In the present case, the plaintiff did not have the locus standi when it filed the notice of appeal. The sanction given by the liquidator did not have retrospective effect. The liquidator did not have the statutory power to grant retrospective sanction in the absence of any express enabling provision in the enactment. Consequently, the Federal Court held that the notice of appeal filed by the plaintiff is bad in law and of no legal effect.

[Striking Out – Res Judicata] Justin was counsel for the 1st Defendant. The 1st Defendant filed a striking out application due to a similar Suit 567 taken commenced by the 1st Defendant (as the plaintiff there) against another party and the Plaintiff (as the 2nd defendant there). The Court held amongst others as follows : - It is trite law that a claim should not be struck out save in exceptional circumstances where, for instance, it was without any sustainable basis or had no prospect at all of success. The strength or weakness of the claim was not a relevant factor. - In Suit 567 it was alleged that the first defendant had purportedly acted ultra vires. It was noteworthy that the present suit and Suit 567 clearly involved the same set of facts. It is indisputable that the aforesaid allegation was considered and disposed of by the court in Suit 567. It was evident from the learned judge’s grounds of judgment that all relevant issues and the disputes between the parties were litigated and adjudicated in Suit 567. Thus, as the issue of ultra vires had already been fully litigated and disposed of in Suit 567, the plaintiff was now estopped from re-litigating the same issues or any other issues which were covered in Suit 567. - Although there may be several issues that may be considered different and the plaintiff had in the present case prayed for a different reliefs/orders, it was trite law that the principle of res judicata has, on the law as it stood, wide application and implications that would operate in the present scenario in the wider sense. Both suits shared the same set of facts, subject[2020] 8 MLJ 305 at 306matter and the same primary questions of law that have been litigated and adjudicated by the High Court whose decision had been affirmed by the Court of Appeal. Hence, the plaintiff would be barred from regurgitating and relitigating the issues that were essentially the same (see para 31).

[Project abandoned and converted from medium cost to high end Project] Justin was counsel for the Appellant. The Appeal was partially allowed and the Court of Appeal reversed the relief of Specific Performance given by the High Court. Although the Court of Appeal upheld the High Court's decision that the SPA is genuine and not a sham, the court could not order specific performance as the 18 properties are no longer in existence i. e in the form it was purchased. The Court referred to the Appellant’s written submission which stated: “It is impossible and absurd - D1 has developed the units in a DIFFERENT PROJECT which bears no resemblance to the 18 units. In fact, the P wants an unjust enrichment";

[Judicial Review – initial sum paid to the Stakeholder to make offer to purchase and LAD] Justin was counsel for the Applicant for Judicial Review, Southville City Sdn Bhd. In this case, the first respondent appointed Messrs Khairin Nisa & Co as a stakeholder to represent him to make an irrevocable offer (“IO”) to the applicant to purchase a unit in a housing project (“the project”) to be developed by the applicant. The first respondent then placed a sum of RM3,000.00 (“the stakeholder sum”) with the stakeholder with instruction to release the same to the Applicant once there is acceptance by the applicant of the first respondent’s offer to purchase. The first respondent subsequently entered into a sale and purchase agreement (“the SPA”) with the applicant on 27/3/201 and vacant possession was delivered by the applicant on 29/3/2018. The first respondent thereafter filed a claim against the applicant for liquidated damages for late delivery of vacant possession. The Court in allowing the Applicant’s judicial review application inter-alia :- (i)Based on clause 1.2 of the IO, the first respondent was aware that the applicant was under no obligation to collect any payment before the property was opened for sale and pursuant to clause 3 of the IO the stakeholder was instructed to release the monies to the applicant upon the applicant’s confirmation that project was open for sale and acceptance of the first respondent’s offer to purchase and towards settlement of the first 10% of the purchase price. On the facts the stakeholder sum was only released to the applicant on 27/3/2014 after the SPA was signed by both parties. Thus, the stakeholder sum cannot be constituted as “booking fee” and/or “deposit” towards the sale and purchase of the project. Even if the court were to accept that the stakeholder sum is a booking fee or a deposit, the sum was received by the applicant on 27/3/2014 and not 28/9/2013. (ii)There was no agreement or SPA between the applicant and the first respondent on 28/9/2013. For the applicant to accept payment before the contract of sale would contradict reg 11(2) of the Housing Development (Control and Licensing) Regulations 1989 which prohibits any parties from collecting any payment as stakeholder. There is no evidence to show that Messrs. Khairin Nisa & Co had acted as the agent or panel lawyer for the applicant to collect the stakeholder sum. (iii)Clause 25 and 27 of the SPA specifically mentions that delivery of vacant possession shall be within 48 calendar months from the date of the SPA, whereas clause 27 states that the completion of common facilities shall be completed within 48 calendar months from the date of the SPA. The SPA does not provide that the delivery of vacant possession and completion of common facilities must be completed from any other date. On the facts, the SPA is in accordance with Schedule H of the Regulation 1989 and the terms thereof are to be strictly followed and cannot be contracted out of. (iv)No binding contract was formed on 28/9/2013 as there was no consideration, no acceptance and no intention to create legal relations between the applicant and the first respondent. The second respondent thus had erred in holding that the date of ascertaining the delivery of vacant possession should be 28/9/2013. (v)The Tribunal had committed jurisdictional errors and/or Anosminic errors and acted on incorrect basis in fact. The award therefore ought to be quashed for being tainted with illegality and unreasonableness. (vi)The liquidated damages payable for late delivery of the vacant possession of the property and late completion of the common facilities should have been calculated from date of the SPA and not from the date of the stakeholder sum was deposited with the stakeholder.

[Encroachment of Land, trespass, negligence and/or breach of statutory duty] Justin was counsel for the Plaintiff in the Counterclaim in this action which proceeded for Full Trial. The case involve encroachment of the said Plaintiff’s Land by a right of way where the Pentadbir Tanah issued a letter granting a right of way not in accordance with the National Land Code. and The said Plaintiff sought for declaratory and injunctive relief and also damages for trespass and/or negligence and/or breach of statutory duty. The Court inter-alia held that :- (i)The fourth defendant (Pentadbir Tanah) owed a duty of care in common law to the plaintiff as the registered proprietor to ensure its rights of enjoyment to the said land was not deprived or encroached by the fourth defendant’s unlawful act. Based on the above, the plaintiff was therefore entitled to judgment against the fourth defendant for breach of statutory duty and negligence. (ii)There was no statutory duty owed by the fifth defendant to the plaintiff as the duties owed by the fifth defendant under by-law 25 of the Uniform Building By-Laws were only to qualified persons defined therein. By virtue of the close proximity of the plaintiff’s land, it was foreseeable that any planning permission that allowed for the encroachment by the applicant for that planning permission onto the plaintiff’s land would cause damage to the plaintiff, and when the added requirement of justice fairness and reasonableness of the case under the Caparo test was considered, there was a clear duty or care owed by the fifth defendant to the plaintiff. Nevertheless, the court found that D5 (Land authority) had acted reasonably to ensure that there was no unlawful encroachment onto the said land. Thus, D5 had properly discharged its duty of care and there was no breach of that duty.