JCW

[Balance purchase price — set-off / counterclaim for relocation costs, stamp duty, RPGT and legal fees — entire agreement clause — evidential discipline in cross-examination — unjust enrichment] Justin and Iris acted as counsel for the Defendant in this case. Background: This case involved the Plaintiff’s claim for the balance purchase price under a sale and purchase agreement (“SPA”) and supplemental SPA for a piece of land in Kuala Lumpur. The Defendant did not dispute the Plaintiff’s entitlement in principle, but asserted a set-off and filed a counterclaim for RM1,680,939.02 comprising sums allegedly expended on the Plaintiff’s behalf i.e. relocation costs, stamp duty, RPGT and legal fees. The Plaintiff’s central defence was that the Defendant’s payment of those items was “free” / gratuitous, said to be based on an alleged oral arrangement reached during negotiations. We highlight the following points: (i) The Court rejected the Plaintiff’s contention that relocation costs, stamp duty, RPGT and legal fees were given “for free”. Even assuming discussions occurred, the Court found the final SPA did not record such an arrangement, and the presence of an entire agreement clause (s 10.11 SPA) discounted any alleged pre-contract negotiations or arrangements. (ii) The Court discussed and adopted the English authority **Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] All ER (D) 1100, emphasizing, amongst others, that an entire agreement clause is intended to prevent a party from “threshing through the undergrowth” of negotiations to find some chance remark to found a collateral warranty claim; to avoid the peril and uncertainty of such a search; and to confirm the binding agreement is contained in the written document itself (i.e. the contractual terms are found in the document, not elsewhere). (iii) Balancing the alleged oral arrangement against the SPA and supplemental SPA, the Court held it was safe and reliable to rely on those written agreements which were specific and unambiguous, and entered into voluntarily by the Plaintiff without objection. (iv) The Plaintiff’s evidence was materially inconsistent as to who allegedly agreed to the arrangement and even as to the identity of a key person present at the relevant meeting(s). The Court held it could not ignore these confusing and conflicting facts. (v) Although the Plaintiff is a charitable organisation, the Court held this does not entitle it to blanket protection from performing obligations under the contract. If such preferential treatment was intended, it should have been reflected as a specific and vital contractual term, which it was not. (vi) A letter relied on by the Plaintiff in submissions could not be deployed as the Plaintiff failed to introduce it through its own witnesses. It only surfaced during cross-examination of the Defendant’s witnesses merely to ask if they were aware of it. The Court held there was no effective cross-examination on the nature/effect of the letter, and it was improper for the Plaintiff thereafter to run a full submission on it at closing, prejudicing the Defendant. (vii) The Court held there is no necessity for the Defendant to produce its audited accounts to maintain a counterclaim. The Plaintiff’s contention on this was overly simplistic. (viii) For relocation costs, the Court accepted that payment vouchers, purchase orders, receipts and payment certificates (Part B documents) supported the claim. It was impossible and unreasonable to call every person involved in the relocation process, as this would unduly delay trial. The real question was the weight of the documents. (xi) On evidential weight, the Court followed Chong Nge Wei v Kemajuan Masteron Sdn Bhd [2022] 3 MLJ 135 (FC), where the opposing party fails to provide contrary calculations/evidence, the proponent’s quotations/evidence should be taken into account, and bare assertions that the sum is excessive are insufficient. (x) The Court allowed the counterclaim also on unjust enrichment, reasoning that if the Plaintiff was not compelled to reimburse sums that were its obligations, the Plaintiff would have obtained the property without incurring those costs. The Court discussed the statutory/contractual basis and authorities including Siow Wong Fatt v Susur Rotan Mining Ltd and Dream Property Sdn Bhd v Atlas Housing Sdn Bhd, recognizing unjust enrichment as a developing but recognized area in Malaysia and affirming the restitutionary remedy to attain justice. Decision: The Court allowed the Plaintiff’s claim for the balance purchase price subject to the Defendant’s right of set-off, and allowed the Defendant’s counterclaim.