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 Azizah Rahmad & 35 Yang Lain Antara Dan Plaintif-Plaintif 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 1 st 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 2
Court on the 2 nd Floor of the Summit USJ ( the Complex ) and the Theme Park on the 3 rd and 4 th 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. 3
[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). 4
[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 5
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 4 th 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 1 st Floor unit will not include any area depicted as a Food Court, which is on the 2 nd 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 3 rd and 4 th 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, 6
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, 4 th 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 7
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 1 st 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 1 st 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 8
and done, the other respondents or any of them have not raised any objection to the 1 st 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: 21 st November 2014 9
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 10