DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANGKUSASA RAYUAN) RAYUAN SIVIL NO: W-02-2133-2011

DALAM MAHKAMAH RAYUAN MALAYSIA
(BIDANGKUSASA RAYUAN)
RAYUAN SIVIL NO: W-02-2133-2011
ANTARA
BOUNTY DYNAMICS SDN BHD
(dahulunya dikenali sebagai
MEDA DEVELOPMENT SDN BHD)
…PERAYU
DAN
CHOW TAT MING DAN 175 LAGI
…RESPONDEN-RESPONDEN
(Dalam Mahkamah Tinggi Malaya Di Kuala Lumpur
(Bahagian Sivil)
Guaman No: S6-22-145-2005
Antara
Chow Tat Ming & 150 Yang Lain
…Plaintif-Plaintif
Dan
Meda Development Sdn Bhd & 10 Yang Lain
…Defendan-Defendan
(Digabungkan bersama dengan menurut Perintah bertarikh 26.4.2010)
Dalam Mahkamah Tinggi Malaya Di Kuala Lumpur
(Bahagian Sivil)
Guaman No: S6-22-308-2006
Antara
Azizah Rahmad & 35 Yang Lain
…Plaintif-Plaintif
Dan
Meda Development Sdn Bhd & 7 Yang Lain
…Defendan-Defendan)
CORAM:
MOHAMAD ARIFF MD YUSOF, JCA
ABANG ISKANDAR ABANG HASHIM, JCA
UMI KALTHUM ABDUL MAJID, JCA
BROAD GROUNDS OF DECISION
[1]
We have considered the submissions by the parties on the facts and
the law, particularly in relation to the issue of limitation and the effect of
this issue not being included as part of the agreed issues for trial. We have
also evaluated and considered the other issues canvassed before us
which may be summarised as follows:
(i)
Whether the respondents have established their case based on
misrepresentation and breach of contract by the evidence of only
two unit purchasers as witnesses, although the claim is by 176
unit buyers.
(ii)
Whether there was an agreement at case management to limit
the number of witnesses for the plaintiffs to merely two witnesses.
(iii)
Whether the 1st respondent has been properly authorised to act
for the other 175 respondents by the warrants to act produced in
court at the submission stage in the High Court.
(iv)
Whether there was a material inducement made by the appellant
as developer in its advertisement brochure as a pre-contractual
document to the respondents as purchasers to build the Food
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Court on the 2nd Floor of the Summit USJ (“the Complex”) and
the Theme Park on the 3rd and 4th Floors of the Complex.
(v)
Whether the exemption clause in the brochure was effective in
law to exclude liability for misrepresentation.
(vi)
Whether there was a continued misrepresentation in newsletters
published to the purchasers after the execution of the SPAs that
the Food Court and the Theme Park would continue to be built.
(vii) Whether the respondents have pleaded fraudulent or negligent
misrepresentation, or merely innocent misrepresentation, for
which no damages are claimable.
(viii) Whether by selling the Complex (excluding the sold units to
purchasers) to Maybank Trustees as Trustee as part of a REITS
transaction (AmFirst Real Estate Investment Trust), the appellant
had as developer disabled itself in law and in fact from
constructing the Food Court and the Theme Park, and therefore
was in breach of contract.
(ix)
Whether time should run from the date of the sale to Maybank
Trustees for purposes of limitation.
(x)
Whether the Judicial Commissioner was correct in law to have
ordered general and special damages to be assessed for both
misrepresentation and breach of contract.
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[2]
The issue on limitation was not at all referred to by the Judicial
Commissioner in the Judgment. Although limitation was not an issue
expressly included in the Agreed Issues for Trial, this same issue is
pleaded in the Defence of the appellant, and was raised in the course of
the trial and in the submissions of both parties before the learned Judicial
Commissioner. In these circumstances, we find that this issue had
become part of the issues at the trial. The framing of Agreed Issues during
case management is meant to facilitate the trial process; Agreed Issues
are not in the nature of pleadings. Since both parties have departed from
the Agreed Issues, the issue of limitation becomes relevant for judicial
appreciation and evaluation by the Judicial Commissioner. Any objection
to a departure from Agreed Issues should have been taken promptly at
the point of time it emerged. A similar principle was applied in the context
of pleadings in Arab-Malaysian Finance Bhd v Steven Phoa Cheng Loon
& Ors [2003] 1 CLJ 585. In our view, the same principle should apply here.
By not addressing this important issue, we find there has been a manifest
non-direction on a critical aspect of the trial by the Judicial Commissioner.
If the respondents’ claim is time barred under s. 6 of the Limitation Act
1953 (which is the applicable provision), the failure by the trial court to
address this issue will be a glaring error of law founded on a clear
misdirection, which will invite appellate intervention.
[3]
We have considered the respondents’ argument that the calculation
of time should be from the date of the sale of the Complex to Maybank
Trustees, i.e. 30.11.2007, and thus the suit has been filed within time. The
Writs of Summons and Statements of Claim were filed on 16.2.2005 (for
Suit No. S6-22-145-2005) and 7.6.2006 (for Suit No. S6-22-308-2006).
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[4]
Being a claim founded on contract, the principle of law is that a claim
for breach of contract has to be commenced at the earliest possible time
when the innocent party becomes aware of the breach. In the context of
a sale and purchase of property in a development, the critical date will be
the date of delivery of vacant possession, as defined in the relevant sale
and purchase contract. On the facts of this case, it would have become
apparent to the purchasers at the date of delivery of vacant possession
whether or not the Food Court and/or the Theme Park had been
constructed. The date of delivery of vacant possession was 31.12.1997.
The SPAs had been signed variously between 16.12.1994 to 22.3.1996.
For purposes of limitation, the cut-off date will be 31.12.2003.
[5]
We therefore agree with the submission by the appellant that the
claim is time barred. On this ground alone, the appeal should be allowed.
We also note that the fact of the sale of the Complex to Maybank Trustee
has not been pleaded by the respondents. The fact that this is a date
subsequent to the date of filing of the Writs of Summons demonstrates
that this later date cannot be a relevant date for purposes of calculating
limitation in any event.
[6]
We further find that there is nothing in the SPAs to prevent the
appellant from entering into the transaction with Maybank Trustees, and
no issue of the appellant allegedly escaping its contractual obligations
really arise on the facts and the law.
[7]
On the facts too, this is not a case of a total absence of the
construction and facilitation of the Food Court and Theme Park. There
was in fact a Food Court in existence and managed by Haruman Horizon
Sdn Bhd and Nadagaya Sdn Bhd. There was also a tenancy entered into
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with Roxy Leisure Sdn Bhd to operate the Theme Park, but this was
followed by a letter of early termination by Roxy Leisure. On the evidence,
the termination was by mutual consent of Roxy Leisure and the appellant
because of the prevailing economic condition.
[8]
We also note the appellant had also entered into a tenancy
agreement with Fajar Retail Enterprise Sdn Bd in 2002, with Fajar as an
anchor tenant.
[9]
In any event, we are of the view that on the facts and the law, there
was no firm promise by the appellant to construct the Food Court and the
Theme Park and to ensure that these should continue to exist, no matter
what the economic circumstances were. We are persuaded by the
appellant’s argument that the 4th Schedule included in the 28 separate
SPAs adduced do not uniformly depict the Food Court and/or the Theme
Park as a contractual obligation to construct. A SPA involving a 1st Floor
unit will not include any area depicted as a Food Court, which is on the
2nd Floor. Nor would a SPA for a 2nd Floor unit show any area for a Theme
Park, since the Theme Park will be on the 3rd and 4th Floors. On this basis,
the argument that the representation in the advertisement brochure had
been incorporated in the sale and purchase contract by the inclusion of
Schedule 4, is not convincing in law.
[10] As for the legal bindingness of the representation in the
advertisement brochure as a pre-contractual document, it is common
ground that there exists an exemption clause, no doubt in the customary
small print. As such the representations made should be read as mere
“puffs” and not binding promises. At most, these are in the nature of an
invitation to treat (Eckhardt Marine GMBH v Sheriff, High Court of Malaya,
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Seremban & Ors [2001] 4 MLJ 49). In this connection, the learned Judicial
Commissioner has also failed to evaluate this exemption clause leading
to an error of law which again invites intervention on our part.
[11] The other representations made in the post-contractual newsletters
too should remain as they really are, namely representations without
contractual effect made to the tenants of the Complex at large. There is
no evidence of deceit or fraudulent misrepresentation in these
circumstances.
[12] On the facts of this case, the respondents have been delivered the
units they have purchased in the Complex, which are not structurally or
fundamentally different from that promised in the SPAs, 4th Schedule. The
facts here are quite unlike the facts in Balakrishnan Devaraj v Admiral
Cove Development Sdn Bhd [2010] 7 CLJ 152, an authority advanced by
counsel for the appellant. Balakrishnan Devaraj, supra, also lays down
the principle that a party to an innocent misrepresentation can only resort
to the remedy of rescission and restitution if the contract for sale of land
remains executory in form and has not been fully executed. On the facts
of this appeal, we are minded to find a case of innocent misrepresentation
for which no damages would be claimable. The SPAs here too have all
been fully executed and the properties delivered.
[13] In connection with the order on damages to be assessed granted by
the Judicial Commissioner, we agree that there are elements of duplicity.
A plaintiff must in law decide whether he is pursuing a claim on
misrepresentation or breach of contract. He is not entitled to be awarded
damages both for misrepresentation and breach of contract. Once a
representation becomes a clause in the contract, such as argued here by
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the respondents, there cannot therefore be an order for damages to be
assessed for both misrepresentation and breach of contract.
[14] On the issue whether there was an agreement at case management
stage to limit the number of witnesses for the plaintiffs to two principal
witnesses, we have studied the record and it would appear that there was
such an agreement. Counsel for the respondents has reinforced this
argument by highlighting to us that on the same basis, it was agreed that
the decision in Suit No. 145 was to bind Suit No. 308. This agreement, to
our mind, would only make some sense on the assumption that the
alleged misrepresentations in the brochures, SPAs, and the newsletters
acted uniformly on the minds of the purchasers. It would therefore appear
that this assumption must have been implicit in the common
understanding to limit the number of witnesses. Nevertheless, given our
decision on the other legal issues, particularly on the issue of limitation, it
no longer becomes important to decide whether by limiting the number of
witnesses for the plaintiffs/respondents to two principal witnesses, the
respondents have in fact adduced sufficient necessary and relevant
evidence to establish misrepresentation and breach of contract, since
misrepresentation will act differently on the minds of each of the 175
purchasers.
[15] Finally, we have to mention the allegedly unsatisfactory nature of
the status of the 1st respondent to represent the rest of the respondents.
We have been shown copies of the Warrants to Act, which were only
produced during the submissions stage in the High Court. These do not
speak of authorising the 1st respondent to give testimony on behalf of all
other respondents. In the total circumstances again, this is not an overly
major point that can be regarded as determinative of this appeal. All said
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and done, the other respondents or any of them have not raised any
objection to the 1st respondent representing them. The point is now being
taken as really a subsidiary and lesser ground by the appellant, more as
a technical point rather than a substantive issue. Given the existence of
the agreement at case management to limit the number of witnesses, it
would have been more prudent for the appellant to have taken up this
issue of warrant to act at this earlier stage.
[16] To summarise, in the premises above, we are unanimously allowing
this appeal. The order of the High Court dated 26.4.2010 is set aside. We
award costs of RM30,000.00 here and below to the appellant.
The deposit is to be refunded to the appellant.
[17] We need to add that the grounds above are our broad grounds on
the main points of the appeal. We will further expand and supplement
these grounds in the event of an appeal.
Sgd.
(DATO’ MOHAMAD ARIFF BIN MD YUSOF)
Judge
Court of Appeal
Malaysia
Dated: 21st November 2014
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Counsels/Solicitors
For the appellant:
Lim Chee Wee (Vincent Lim Seng Liang,
Rajbinder Singh & Nathalie Ker with him)
Messrs Dennis Nik & Wong
For the respondents:
Dato’ Harpal Singh Grewal
(Datin Harwinder Kaur & Julian Chan with him)
Messrs A. J. Ariffin, Yeo & Harpal
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