422 Current Law Journal [2015] 9 CLJ

BOUNTY DYNAMICS SDN BHD v. CHOW TAT MING & ORS A

COURT OF APPEAL, PUTRAJAYA

MOHAMAD ARIFF YUSOF JCA
ABANG ISKANDAR JCA
UMI KALTHUM ABDUL MAJID JCA
[CIVIL APPEAL NO: W-02-2133-2011] B
15 OCTOBER 2015

CONTRACT: Breach – Agreement – Sale and purchase agreement – Purchase of

properties in commercial complex due to representations by brochures and newsletters
– Whether appellant built complex according to representations – Whether appellant C
failed to carry out representations made in brochures and newsletters – Whether
there was evidence of deceit and fraudulent misrepresentation – Whether respondents
could claim for damages for misrepresentation and breach of contract – Whether first
respondent authorised to act on behalf of other purchasers – Whether there was
agreement to limit number of witnesses D

At various dates between the years 1994 and 1995, the respondents executed
individual sale and purchase agreements (‘SPA’) and deed of mutual
covenants with the appellant for the purchase of commercial properties in a
commercial complex (‘the said complex’). The respondents alleged that by
an advertisement brochure published by the appellant prior to the execution E
of the SPA, the appellant represented that the said complex would have: (i)
festive and promotional activities throughout the year; (ii) an anchor tenant
of a reputable standing; (iii) a twin level amusement park; and (iv) a food
court. The layout plan of the theme park, anchor tenant, restaurants and
entertainment outlets were also incorporated in the said brochure. Relying F
on the truth of the appellant’s representations in the brochure and believing
in the truth of the layout plans, the respondents entered into their respective
SPAs. Pursuant to cls. 21 and 22 of the SPA, the appellant delivered to the
respondents vacant possession of their properties by issuing the notices for
delivery of vacant possession dated 31 December 2007. When vacant G
possession was delivered, the theme park had not been constructed, but, the
appellant had carried out various festive promotional activities at the said
complex. The appellant had also secured tenants for the theme park and for
the food court. However, the tenancy for the theme park was terminated due
to economic conditions. Subsequently, on 30 November 2007, the appellant
H
sold the said complex to Maybank Trustee Berhad as the Trustee of AmFirst
Real Estate Investment Trust (‘Maybank Trustees’). Hence, the respondents
commenced two actions in the High Court for misrepresentation and breach
of contract (‘suit 145 and suit 308’). The Judicial Commissioner (‘JC’) held
that since the representations had been depicted and identified in the layout
plans and incorporated into the SPA, it was therefore a contractual term and I
any breach of it would be a breach of the contract. The JC also held that since
the said complex had been sold to Maybank Trustees, the appellant was not
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 423

A in a position to build the theme park, thus, the representations made by the
appellant, which had become a contract, was incapable of being performed
by the appellant from its own doing. In the circumstances, the JC found that
the respondents were entitled for damages for misrepresentation and breach
of contract and ordered that damages be assessed by the Senior Assistant
B Registrar (‘SAR’). Dissatisfied, the appellant appealed to the Court of
Appeal. The issues that arose for determination were, inter alia, (i) whether
suit 145 and suit 308 were time barred since the cause of action accrued when
vacant possession was delivered on 31 December 1997 but the two suits were
filed on 16 February 2005 and 7 June 2006; (ii) whether there was total
C
absence of construction and facilitation; (iii) whether there was a material
inducement made by the appellant in its advertisement brochure as a pre-
contractual document; (iv) whether the respondents had pleaded fraudulent
or negligent misrepresentation, or merely innocent misrepresentation, for
which no damages were claimable; (v) whether the JC was correct in law to
have ordered general and special damages to be assessed for both
D
misrepresentation and breach of contract; (vi) whether there was an
agreement at case management to limit the number of witness to merely two
witnesses; and (vii) whether the first respondent was properly authorised to
act for the other respondents by the warrant to act that was produced in court.

E
Held (allowing appeal with costs; setting aside order of High Court)
Per Umi Kalthum Abdul Majid JCA delivering the judgment of the court:
(1) 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
F a sale and purchase of property in a development, the critical date will
be the date of delivery of vacant possession. 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 December 1997. The SPAs had been signed variously between
G
16 December 1994 to 22 March 1996. For purposes of limitation, the
cut-off date would be 31 December 2003. Therefore, the claims were
time-barred. (paras 26 & 27)
(2) The sale of the said complex to Maybank Trustees had not been pleaded
H by the respondents. There was 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
arose on the facts and the law. (paras 27 & 28)
(3) This was not a case of a total absence of the construction and facilitation
I of the food court and theme park. There was in fact a food court in
existence. There was also a tenancy entered into to operate the theme
park, but this was followed by an early termination. The termination
424 Current Law Journal [2015] 9 CLJ

was by mutual consent because of the prevailing economic conditions. A

The appellant had also entered into a tenancy agreement with an anchor
tenant. 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. (paras 33, 34 & 41) B
(4) As for the legal bindingness of the representation in the advertisement
brochure as a pre-contractual document, it was common ground that
there existed an exemption clause. As such, the representations made
should be read as mere ‘puffs’ and not binding promises. At most, these
were in the nature of an invitation to treat. The other representations C
made in the post-contractual newsletters also should remain as
representations without contractual effect made to the tenants of the said
complex at large. There was no evidence of deceit or fraudulent
misrepresentation in these circumstances. In this connection, the JC had
failed to evaluate this exemption clause leading to an error of law. (paras D
42 & 43)
(5) The respondents had been delivered the units they had purchased in the
said complex, which were not structurally or fundamentally different
from that promised in the SPAs, Fourth Schedule. A party to an
innocent misrepresentation can only resort to the remedy of rescission E
and restitution if the contract for sale of land remained executory in
form and had not been fully executed. On the facts, this was a case of
innocent misrepresentation for which no damages would be claimable.
The SPAs had also all been fully executed and the properties delivered.
(para 44) F
(6) There were elements of duplicity in connection with the order on
damages to be assessed granted by the JC. 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 G
becomes a clause in the contract, there could not therefore be an order
for damages to be assessed for both misrepresentation and breach of
contract. (para 50)
(7) There was an agreement at case management stage of suit 145 and suit
308 to limit the number of witnesses for the respondents to two principal H
witnesses. This meant 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, based on the issue of limitation, it no longer I
became important to decide whether by limiting the number of witnesses
for the respondents to two principal witnesses, the respondents had in
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 425

A fact adduced sufficient, necessary and relevant evidence to establish

misrepresentation and breach of contract, since misrepresentation would
act differently on the minds of each of the 175 purchasers. (para 57)
(8) The warrants to act did not speak of authorising the first respondent to
give testimony on behalf of all other respondents. However, the other
B respondents had not raised any objection to the first respondent
representing them. 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 warrants to act
at the earlier stage. (para 59)
C
Bahasa Malaysia translation of headnotes
Pada pelbagai tarikh antara tahun 1994 dan 1995, responden-responden
memeterai, perjanjian-perjanjian jual dan beli (‘PJB’) secara individu dan
surat ikatan perjanjian bersama dengan perayu bagi pembelian harta
D komersial di sebuah kompleks komersial (‘kompleks tersebut’). Responden-
responden mendakwa bahawa risalah iklan yang diterbitkan oleh perayu
sebelum pelaksanaan PJB, telah menggambarkan bahawa kompleks tersebut
akan mempunyai: (i) aktiviti-aktiviti promosi dan kepestaan sepanjang tahun;
(ii) penyewa utama yang mempunyai reputasi baik; (iii) taman hiburan tahap
berkembar; dan (iv) sebuah medan selera. Pelan susur atur taman tema,
E
penyewa utama, restoran-restoran dan pusat-pusat hiburan juga dimasukkan
dalam risalah tersebut. Bergantung kepada kebenaran respresentasi perayu
dalam risalah dan kepercayaan kepada kebenaran terhadap pelan susur atur,
responden-responden telah memeterai PJB masing-masing. Menurut kl. 21
dan 22 PJB, perayu menyerahkan milikan kosong hartanah tersebut kepada
F responden-responden dengan mengeluarkan notis-notis penyerahan milikan
kosong bertarikh 31 Disember 2007. Apabila milikan kosong diserahkan,
taman tema belum dibina, tetapi perayu telah menjalankan pelbagai aktiviti
promosi kepestaan di kompleks tersebut. Perayu juga telah mendapatkan
penyewa untuk taman tema dan juga medan selera. Walau bagaimanapun
G penyewaan taman tema telah ditamatkan disebabkan keadaan ekonomi.
Kemudiannya, pada 30 November 2007 perayu telah menjual kompleks
tersebut kepada Maybank Trustee Berhad sebagai Trustee Amfirst Real First
Real Estate Investment Trust (‘Maybank Trustees’). Oleh itu, responden-
responden memulakan dua tindakan di Mahkamah Tinggi bagi salah nyataan
H dan kemungkiran kontrak (‘guaman 145 dan guaman 308’). Pesuruhjaya
Kehakiman (‘PK’) memutuskan bahawa oleh kerana representasi tersebut
telah digambarkan dan dikenal pasti dalam pelan susur atur dan dimasukkan
ke dalam PJB, oleh itu, ia adalah satu terma kontrak dan sebarang
pelanggaran adalah kemungkiran kontrak. PK juga memutuskan bahawa oleh
kerana kompleks tersebut telah dijual kepada Maybank Trustees, perayu
I
426 Current Law Journal [2015] 9 CLJ

tidak berada dalam kedudukan untuk membina taman tema, dengan itu, A
representasi yang dibuat oleh perayu yang telah menjadi kontrak tidak dapat
dilaksanakan oleh perayu melalui perbuatannya sendiri. Dalam keadaan ini,
PK mendapati bahawa responden-responden berhak untuk ganti rugi bagi
salah nyataan dan kemungkiran kontrak dan memerintahkan supaya ganti
rugi dinilai oleh Penolong Kanan Pendaftar (‘PKP’). Tidak berpuas hati, B
perayu telah merayu kepada Mahkamah Rayuan. Isu-isu yang dibangkitkan
untuk penentuan, antara lain, adalah (i) sama ada guaman 145 dan guaman
308 telah terhalang oleh had masa kerana kausa tindakan terakru apabila
milikan kosong diserahkan pada 31 Disember 1997 tetapi kedua-dua guaman
tersebut difailkan pada 16 Februari 2005 dan 7 Jun 2006; (ii) sama ada C
terdapat ketiadaan pembinaan dan fasilitasi; (iii) sama ada terdapat dorongan
material yang dibuat oleh perayu dalam risalah iklan sebagai dokumen pra-
kontrak; (iv) sama ada responden-responden telah memplid salah nyataan
palsu atau cuai atau salah nyataan ikhlas semata-mata, yang mana ganti rugi
tidak boleh dituntut; (v) sama ada PK adalah betul di sisi undang-undang
D
untuk memerintahkan ganti rugi am dan khas dinilai untuk kedua-dua salah
nyataan dan kemungkiran kontrak; (vi) sama ada terdapat satu perjanjian
semasa pengurusan kes untuk menghadkan bilangan saksi hanya kepada dua
saksi; (vii) sama ada responden pertama telah diberi kuasa dengan betul
untuk bertindak bagi pihak responden-responden lain oleh waran untuk
bertindak yang dikemukakan di mahkamah. E

Diputuskan (membenarkan rayuan dengan kos; menolak perintah

Mahkamah Tinggi)
Oleh Umi Kalthum Abdul Majid HMR menyampaikan penghakiman
mahkamah:
F
(1) Sebagai suatu tuntutan berasaskan kontrak, prinsip undang-undang
adalah bahawa tuntutan bagi kemungkiran kontrak perlu dimulakan
secepat mungkin apabila pihak yang tidak bersalah menyedari
kemungkiran tersebut. Dalam konteks jual beli harta dalam tapak
pemajuan, tarikh kritikal adalah tarikh penyerahan milikan kosong.
G
Mengikut fakta kes ini, ia akan menjadi ketara kepada pembeli-pembeli
pada tarikh penyerahan milikan kosong sama ada medan selera dan/atau
taman tema tersebut telah dibina. Tarikh penyerahan milikan kosong
adalah 31 Disember 1997. PJB tersebut telah dimeterai antara
16 Disember 1994 hingga 22 Mac 1996 secara berasingan. Bagi tujuan
had masa, tarikh akhir adalah 31 Disember 2003. Oleh itu, tuntutan H
telah terhalang oleh had masa.
(2) Penjualan kompleks tersebut kepada Maybank Trustees tidak diplid oleh
responden-responden. Tiada apa-apa di dalam PJB yang menghalang
perayu daripada memeterai transaksi dengan Maybank Trustees dan
I
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 427

A tiada isu bahawa perayu didakwa akan melarikan diri dari obligasi
kontrak yang benar-benar timbul dari segi fakta dan undang-undang.
(3) Ini bukanlah satu kes ketiadaan sepenuhnya pembinaan dan fasilitasi
medan selera dan taman tema. Malah medan selera sebenarnya wujud.
Terdapat juga perjanjian penyewaan yang dimeterai untuk menguruskan
B operasi taman tema tetapi ini diikuti dengan penamatan awal.
Penamatan ini adalah dengan persetujuan bersama berikutan keadaan
ekonomi semasa. Perayu juga telah memeterai perjanjian penyewaan
dengan penyewa utama. Pada fakta dan undang-undang, tiada janji kukuh
oleh perayu untuk membina medan selera dan taman tema dan untuk
C memastikan kewujudannya tanpa mengira keadaan ekonomi.
(4) Bagi ikatan perundangan terhadap respresentasi dalam risalah iklan
tersebut sebagai dokumen pra-kontrak, ia adalah dipersetujui bahawa
satu klausa pengecualian harus wujud. Dengan itu, representasi yang
dibuat hendaklah dibaca secara remeh dan bukan janji-janji yang
D mengikat. Paling tidak, ia boleh disifatkan sebagai pelawaan untuk
menawar. Representasi-representasi lain yang dibuat dalam suratberita
pasca kontrak juga perlu kekal sebagai representasi-representasi tanpa
kesan kontrak yang dikenakan ke atas penyewa-penyewa kompleks
tersebut pada umumnya. Tiada keterangan penipuan atau salah nyataan
E palsu dalam keadaan ini. Dalam perkara ini, kegagalan PK untuk
menilai klausa pengecualian ini membawa kepada satu kesilapan
undang-undang.
(5) Responden-responden telah diserahkan unit-unit yang dibeli oleh
mereka di kompleks tersebut, yang tidak dari segi struktur atau dasarnya
F berbeza dengan apa yang dijanjikan dalam PJB, Jadual keempat. Pihak
kepada salah nyataan yang tidak bersalah hanya boleh mengambil jalan
keluar melalui remedi pembatalan dan restitusi jika kontrak penjualan
tanah kekal berbentuk eksekutori dan belum dilaksanakan sepenuhnya.
Mengikut fakta ini, adalah satu kes salah nyataan yang tidak bersalah
G yang mana tiada ganti rugi boleh dituntut. PJB juga telah dimeterai
dengan sepenuhnya dan harta-harta diserahkan.
(6) Terdapat unsur-unsur penduaan berkaitan dengan perintah ganti rugi
untuk dinilai yang diberikan oleh PK. Seseorang plaintif harus di sisi
undang-undang memutuskan sama ada dia akan membuat satu tuntutan
H atas salah nyataan atau kemungkiran kontrak. Dia tidak berhak untuk
diberi award ganti rugi bagi salah nyataan dan pelanggaran kontrak
masing-masing. Sebaik sahaja representasi menjadi satu klausa dalam
kontrak, ia tidak boleh dengan itu diberi suatu perintah bagi ganti rugi
dinilai untuk salah nyataan dan kemungkiran kontrak masing-masing.
I
(7) Terdapat perjanjian pada peringkat pengurusan kes guaman 145 dan
guaman 308 untuk menghadkan bilangan saksi-saksi bagi responden-
responden kepada dua saksi utama. Ini bermakna salah nyataan yang
428 Current Law Journal [2015] 9 CLJ

didakwa dalam risalah-risalah, PJB dan suratberita bertindak secara A

seragam dalam fikiran pembeli-pembeli. Dengan itu, ia akan kelihatan
bahawa andaian ini mesti tersirat dalam anggapan umum untuk
menghadkan bilangan saksi-saksi. Walau bagaimanapun, berdasarkan
isu penghadan, ia tidak lagi penting untuk memutuskan sama ada dengan
menghadkan bilangan saksi untuk responden-responden kepada dua B
saksi utama, responden-responden sebenarnya telah mengemukakan
keterangan yang mencukupi dan relevan untuk membuktikan salah
nyataan dan kemungkiran kontrak kerana salah nyataan bertindak secara
berbeza dalam fikiran setiap satu daripada 175 pembeli-pembeli.
(8) Waran untuk bertindak tidak memberi kuasa kepada responden pertama C
untuk memberi testimoni bagi pihak responden-responden yang lain.
Walau bagaimanapun, responden-responden lain tidak membangkitkan
apa-apa bantahan terhadap responden pertama mewakili mereka.
Memandangkan kewujudan perjanjian pada pengurusan kes untuk
menghadkan bilangan saksi-saksi, ia adalah lebih cermat bagi perayu D
untuk mengambil isu waran untuk bertindak pada peringkat yang lebih
awal.
Case(s) referred to:
Abdul Razak Datuk Abu Samah v. Shah Alam Properties Sdn Bhd & Another Appeal
[1999] 3 CLJ 231 CA (refd) E
Arab-Malaysian Finance Bhd v. Steven Phoa Cheng Loon & Ors [2003] 1 CLJ 585 CA
(refd)
Balakrishnan Devaraj & Anor v. Admiral Cove Development Sdn Bhd [2010] 7 CLJ 152
CA (dist)
Dato’ Badarudin Abd Khalid & Ors v. MBF Property Services Sdn Bhd & Ors [2011] 1
LNS 1625 HC (refd) F
Eckhardt Marine GMBH v. Sheriff Mahkamah Tinggi Malaya & Ors [2001] 3 CLJ 864
CA (refd)
Lim Sew Lan v. Pembangunan Hysham Sdn Bhd & Anor [1999] 4 CLJ 701 HC (dist)
Malaysian Newsprint Industries Sdn Bhd v. Perdana Cigna Insurance Bhd & Ors [2008]
1 CLJ 246 CA (refd)
Maxisegar Sdn Bhd v. Veronica Lee Ha Ling & Ors [2009] 6 CLJ 247 CA (refd) G
Sim Thong Realty Sdn Bhd v. Teh Kim Dar [2003] 3 CLJ 227 CA (refd)
Legislation referred to:
Limitation Act 1953, s. 6(1)(a)
For the appellants - Lim Chee Wee (Rajvinder Singh, Vincent Lim Seng Liang, Nathalie
Ker with him); M/s Dennis Nik & Wong H
For the 1st respondent - Harpal Singh Grewal (Harwinder Kaur, Julian TL Chan, Remy
Rao with him); M/s AJ Ariffin Yeo & Harpal
[Editor’s note: For the High Court judgment, please see Chow Tat Ming & Ors v. Bounty
Dynamics Sdn Bhd & Ors And Another Suit [2014] 2 CLJ 596 (overruled).]
I
Reported by S Kahvitha
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 429

A JUDGMENT
Umi Kalthum Abdul Majid JCA:
[1] The appeal is against the decision by the learned Judicial
Commissioner of the High Court dated 28 July 2011 in allowing the
B respondents’ claims for damages with costs. At the High Court the
respondents claimed that appellant had breached the terms of the sale and
purchase agreements and the respondents suffered damages as a result of
misrepresentations made by the appellant.
Facts
C
[2] The background facts could be summarised as follows. On or about
various dates between the years 1994 and 1995, the respondents executed
individual sale and purchase agreements (“SPA”) and deed of mutual
covenants (“deeds”) with the appellant for the purchase of commercial
properties (“the said properties”) in a commercial complex known as
D Summit Centre, USJ Persiaran Kewajipan USJ1, 47600 UEP Subang Jaya,
Selangor (“the said complex”).
[3] The respondents alleged that by an advertisement brochure published
by the appellant and distributed prior to the execution of the SPA (“the said
brochure”), the appellant represented that the said Complex would have the
E
following:
(a) festive and promotional activities throughout the year;
(b) an anchor tenant of a reputable standing;

F
(c) a twin level amusement park, parking bays for more than 2,000
vehicles; and
(d) a food court.
[4] Layout plans of the theme park, anchor tenant, restaurants and
entertainment outlets was incorporated in the said brochure.
G
[5] The respondents claimed that relying on the truth of the appellant‘s
representations in the brochure and believing in the truth of the layout plans
in the fourth Schedule, the respondents entered into their respective SPAs.
Further, several of the respondents who purchased properties located on the
second and third floors of the said Complex paid premium prices as the food
H
court and twin level amusement park were to be located on these floors.
[6] The respondents also alleged that by several newsletters published by
the appellant and distributed to the respondents, that is, in the June 1996,
November 1996 and July 1997 newsletters, the appellant made similar
I representations on the main tenants, theme park and food court. The
appellant represented that:
430 Current Law Journal [2015] 9 CLJ

(a) The food court and theme park will definitely bring in the crowd, keep A
them entertained for the whole day and they will surely come back for
more;
(b) Roxy Leisure will operate the adventure world theme amusement
centre, costing approximately RM30 million, which offers a wide
variety of rides, attractions, interactive games and live entertainment for B
the whole family;
(c) Food City, the food court on Summit’s second floor will not only serve
a variety of local and international fare, but will do so at the best
available prices in a shopping centre;
C
(d) The Roxy Leisure Theme Park with 93,000 sq. feet of fun and
excitement, will be the biggest indoor theme park in the country; and
(e) Roxy Leisure’s ‘Adventure World’ is an estimated 90,000 sq feet
mythical jungle city filled with gnarled trees and strange architecture and
carvings. This city is home to ten major rides, including the first indoor D
Flume Ride and Super Telecombat. There is also a custom built “jungle”
playground and other fun activities for younger children.
[7] Pursuant to cls. 21 and 22 of the SPA, the appellant delivered to the
respondents vacant possession of their properties by issuing the notices for
E
delivery of vacant possession dated 31 December 2007. The appellant at this
juncture also applied to Majlis Perbandaran Subang Jaya for the issuance of
the certificate of fitness of occupation (“CFO”) and obtained the necessary
temporary CFOs and the final CFO on 19 June 2002.
[8] When vacant possession was delivered, the theme park had not been F
constructed. On 21 June 1999, the respondents’ solicitors wrote to the
appellant’s solicitors that the respondents had entered into the SPA on the
appellant’s several representations including the theme park which had
turned out to be untrue.
[9] The appellant had carried out various festive and promotional G
activities at the said complex. The appellant had also secured tenants for the
said Complex, such as, tenancy of the theme park by Roxy Leisure Sdn Bhd
which was subsequently terminated on 1 June 2001; tenancy of the food
court by Haruman Horizon Sdn Bhd and Nadagaya Sdn Bhd respectively;
tenancy of Fajar Retail Enterprise Sdn Bhd. H
[10] The respondents wrote to the appellant on 14 May 2004 and
27 October 2004 requesting the appellant to address its failure to construct
the theme park and the removal of the food court and to remedy the same.
However, the appellant had not acceded to the respondents’ request. The
respondents then filed these two actions for misrepresentation and breach of I
contract. The respondents by these actions were claiming that they had
suffered loss and damage as:
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 431

A (a) their properties have depreciated in value; and

(b) they faced difficulties letting out their properties and those who managed
to rent them out were getting low rentals.
[11] On or about 30 November 2007, the appellant sold the said Complex
B to Maybank Trustee Berhad as the Trustee of AmFirst Real Estate
Investment Trust.
At The High Court
[12] The learned Judicial Commissioner (as he then was) (“JC”) allowed
the respondents’ claims. In arriving at his decision the learned JC found, vis
C
the evidence of DW2, that the brochure was part of the appellant’s marketing
tools. He also found the depiction of the theme park and food court in the
layout plans in the brochure as well as the fourth Schedule to the SPA. The
appellant’s witness, DW3, had also confirmed that the appellant was not in
the position after 2007 to build the theme park now as the said Complex had
D been sold to Maybank Trustees as the Trustee of AmFirst Real Estate
Investment Trust. The learned JC concluded that the representations made
by the appellant, which had become a term of the contract, was incapable
of being performed by the appellant from its own doing. There was,
therefore, a clear breach by the appellant of the SPA.
E
[13] In arriving at his decision the learned JC applied the decision in Lim
Sew Lan v. Pembangunan Hysham Sdn Bhd & Anor [1999] 4 CLJ 701; [1999]
5 MLJ 670 (HC) in construing whether representations contained in a
brochure induced the plaintiff therein to enter into a contractual relationship
where it was held that:
F
It is time that contracting parties realise that representations contained in
brochures ought not to be used as a gimmick to entice innocent parties
into a bargain which the contracting party has no intention of honouring.
In this case the plaintiff has emphatically maintained that he was induced
by this representation to purchase the said unit. I have no hesitation
G therefore in concluding that the representation made in the brochure did
indeed induce the plaintiff to enter into the agreement.
Recital to the agreement
I am of the view that my task has been made easier by the fact that the
representation as contained in the brochure has in fact been incorporated
H as Recital C to the said agreement. In construing the terms and conditions
of an agreement, the court has to consider the object of the agreement
in tandem with the manifest intention of the parties. Chitty on Contracts
(27th Ed) Vol 1 states at para 13-018 (p 630) as follows:
Where words of recital or reference manifest a clear intention that
I the parties should do certain acts, the courts will from these infer
a covenant to do such acts, just as if the instrument had contained
an express agreement to that effect.
432 Current Law Journal [2015] 9 CLJ

If the defendants had therefore covenanted that they would build six A
blocks of five to seven storey shop office and service suites then it is my
judgment that a breach of such a covenant by the defendants goes to the
root of the contract as a clear deviation of the manifest intention and
object of the contracting parties.
Terms of the agreement B
The case for the plaintiff has been made even easier by the fact that what
is contained in the brochure and recital has become a term in the
agreement.
…
C
ln this case no doubt, by refusing to stand by the brochure, recital and
terms of the agreement, which clearly stated that the defendants intended
to build six blocks of five to seven storey shop office and service suites
and substituting the same with three storey shop office with no service
suites, the defendants have been in breach of s 40 of the Contracts Act
1950 and the plaintiff is entitled to rescind the agreement since I find that D
the plaintiff has not either by words or conduct acquiesced in its
continuance.
[14] The learned JC found that given the evidence of both the respondents’
and appellant’s witnesses the respondents were indeed induced into executing
the SPAs by the appellant’s misrepresentations. The fact that these E
representations as to the food court and theme park had been depicted and
indentified in the layout plans as approved by the Majlis Perbandaran Subang
Jaya (“MPSJ”) and incorporated into the SPA through the fourth Schedule
made it a contractual term. And the breach of it would be a breach of the
contract. The respondents had also proven damages suffered by them and
F
therefore they were entitled for damages for misrepresentation and breach of
contract. The learned JC further ordered that damages to be assessed by the
Senior Assistant Registrar.
[15] The appellant appealed against this decision to the Court of Appeal.
The Appeal G

[16] We heard the appeal on 19 March 2014, 25 April 2014, 19 August

2014 and 7 November 2014. We adjourned the appeal to 21 November 2014
for decision and the broad grounds of judgment was read out by YA Dato’
Mohamad Ariff bin Yusof JCA (as he then was). Herewith is our full grounds
H
of judgment wherein it has incorporated the broad grounds so read.
[17] Before the learned JC, parties agreed that the issues to be tried were
as follows:
(a) whether there was misrepresentation and breach of contract by the
appellant as to the theme park and food court in the SPA, advertisement I
brochure and the 1996 and 1997 newsletters published by the appellant;
and
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 433

A (b) whether there was depreciation in the value of the respondents’

properties due to the alleged misrepresentation and breach of contract as
at the date of filing of the writ of summons on 16 February 2005 for Suit
No. S-22-145-2005 and on 7 April 2006 for suit No. S-22-308-2006; and
if so what are the damages suffered by the respondents.
B [18] We had 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 had also
evaluated and considered the other issues canvassed before us which may be
summarised as follows:
C
(a) whether the respondents had established their case based on
misrepresentation and breach of contract by the evidence of only two
unit purchasers as witnesses, although the claim was by 176 unit
purchasers;

D (b) whether there was an agreement at case management to limit the number
of witnesses for the respondents to merely two witnesses;
(c) whether the first respondent had 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;
E
(d) 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 court on the second
floor of the said complex and the theme park on the third and fourth
floors of the said complex;
F
(e) whether the exemption clause in the brochure was effective in law to
exclude liability for misrepresentation;
(f) whether there was a continued misrepresentation in newsletters
published to the purchasers after the execution of the SPAs that the food
G court and the theme park would continue to be built;
(g) whether the respondents had pleaded fraudulent or negligent
misrepresentation, or merely innocent misrepresentation, for which no
damages were claimable;

H
(h) whether by selling the said 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;
I (i) whether time should run from the date of the sale to Maybank Trustees
for purposes of limitation; and
434 Current Law Journal [2015] 9 CLJ

(j) whether the learned JC was correct in law to have ordered general and A
special damages to be assessed for both misrepresentation and breach of
contract.
Whether Time Should Run From The Date Of The Sale To Maybank Trustees For
Purposes Of Limitation
B
[19] The issue on limitation was not at all referred to by the learned JC in
his judgment. Although limitation was not an issue expressly included in the
agreed issues for trial, this same issue was 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 JC. In these circumstances, we found that this
C
issue had become part of the issues at the trial. The framing of agreed issues
during case management was meant to facilitate the trial process; agreed
issues are not in the nature of pleadings. Since both parties had departed from
the agreed issues, the issue of limitation became relevant for judicial
appreciation and evaluation by the learned JC. Any objection to a departure
from agreed issues should have been taken promptly at the point of time it D
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 found there had been a manifest non-direction on a
critical aspect of the trial by the learned JC. If the respondents’ claim was E
time barred under s. 6 of the Limitation Act 1953 (which was the applicable
provision), the failure by the trial court to address this issue would be a
glaring error of law founded on a clear misdirection, which would invite
appellate intervention.
[20] Learned counsel for the appellant submitted that all claims by the F
respondents were statute barred. This was because the respondents’ action
against the appellant was based on the various SPAs executed by the
respondents between 1994 to 1995, therefore the applicable limitation period
was six years as stipulated in s. 6(1)(a) of the Limitation Act 1953, which
reads as follows: G

(1) Save as hereinafter provided the following actions shall not be brought
after the expiration of six years from the date on which the cause of action
accrued, that is to say:
(a) actions founded on a contract or on tort;
H
…
[21] The appellant submitted the cause of action had accrued on the date
of delivery of vacant possession. In respect of the cause of action for
misrepresentation, it also accrued from date of delivery of vacant possession.
It was submitted that the respondents had pleaded that the appellant made I
representations in the brochure and newsletters recklessly as the facilities
were not provided by the appellant causing the respondents to suffer loss and
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 435

A damage as particularised in para. 136 of the statement of claim. The

respondents would suffer loss and damage when vacant possession was
delivered by the appellant to the respondents pursuant to cls. 21 and 22 of
the SPA. Delivery of vacant possession took place when all the requirements
for delivery of vacant possession as stipulated in the agreement had been
B fulfilled. It did not necessarily have to be on the date of the issuance of
certificate of fitness. In Maxisegar Sdn Bhd v. Veronica Lee Ha Ling & Ors
[2009] 6 CLJ 247; [2011] 5 MLJ 913 (Court of Appeal), the court was of
the view that, to constitute an effective delivery of vacant possession, it must
be shown that the requirements set out in the sale and purchase agreement
C
for the manner in which delivery of vacant possession took place had been
fulfilled.
[22] Under the SPA, cl. 22 provides the manner in which delivery of
vacant possession takes place and it has stipulated the following
requirements:
D (1) Upon the issuance of a certificate by the Vendor’s Architect certifying
that the construction of the said Parcel has been duly completed and the
Purchaser having all monies payable under this Agreement having
performed and observed all terms and covenants on his part under this
Agreement the Vendor shall let the Purchaser into possession of the said
Parcel PROVIDED ALWAYS that such possession shall not give the
E
Purchaser the right to occupy and the Purchaser shall not occupy the said
Parcel until such time as the Certificate of Fitness for Occupation for the
said Parcel is issued.
[23] Learned counsel for the appellant further submitted that the notice of
the delivery of vacant possession was on 31 December 1997, vacant
F
possession was delivered on 31 December 1997 whilst the two suits were
filed on 16 February 2005 and 7 June 2006, therefore the cause of action
would have accrued on 31 December 1997 and the limitation of six years
would expire on 31 December 2003. In the circumstances, the two suits were
time-barred.
G
[24] Learned counsel for the respondents submitted in reply by stating that
the subject matter of the respondents’ claim was a future development. The
respondents contended that there were no terms in the SPAs which allowed
the appellant to take away the theme park and food court as promised in the
fourth Schedule and cl. 39 of the SPA. The theme park and the food court
H
were specifically mentioned in the brochure and the SPA. Therefore since
the theme park was a future development, there was no time frame set for
the respondents to commence the action. Furthermore the issue of limitation
was never considered by the learned JC at the High Court. The respondents,
in oral submission, further submitted that time should run from the date of
I the sale of the said Complex to Maybank Trustees on 30 December 2007.
436 Current Law Journal [2015] 9 CLJ

[25] We had considered the respondents’ argument that the calculation of A

time should be from the date of the sale of the said Complex to Maybank
Trustees, that is, 30 December 2007, and thus the suit had been filed within
time. The writs of summons and statements of claim were filed on
16 February 2005 (for Suit No. S6-22-145-2005) and 7 June 2006 (for Suit
No. S6-22-308-2006). B
[26] 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 C
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 December 1997. The SPAs had been signed
variously between 16 December 1994 to 22 March 1996. For purposes of D
limitation, the cut-off date would be 31 December 2003.
[27] We therefore agreed with the submission by the appellant that the
claims were time-barred. On this ground alone, the appeal should be
allowed. We also noted that the fact of the sale of the said Complex to
Maybank Trustees had not been pleaded by the respondents. The fact that E
this was a date subsequent to the date of filing of the writs of summons
demonstrated that this later date could be a relevant date for purposes of
calculating limitation in any event.
Whether By Selling The Said Complex (Excluding The Sold Units To Purchasers)
To Maybank Trustees As Trustee As Part Of A REITS Transaction (Amfirst Real F
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
[28] We further found that there was nothing in the SPAs to prevent the
G
appellant from entering into the transaction with Maybank Trustees, and no
issue of the appellant allegedly escaping its contractual obligations really
arose on the facts and the law.
Whether There Was A Material Inducement Made By The Appellant As Developer
In Its Advertisement Brochure As A Pre-contractual Document To The Respondents H
As Purchasers To Build The Food Court On The Second Floor Of The Said
Complex And The Theme Park On The Third And Fourth Floors Of The Said
Complex
[29] On this issue, learned counsel for the appellant submitted that the
learned JC found the representations made by the appellant on the theme I
park and food court had become contractual terms on the ground that these
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 437

A representations were incorporated into the SPA by virtue of cl. 39 of the

SPA. Relying on the same representations, the learned JC found the appellant
liable for misrepresentation.
[30] It was submitted that misrepresentation is about the effect of pre-
contractual statements and a representation “is a statement of fact made by
B one party to the contract (the representor) to the other (the representee)
which, while not forming a term of the contract, is yet one of the reasons that
induces the representee to enter into the contract” (Cheshire, Fifoot and
Furmston’s Law of Contract, Second Singapore and Malaysian Edition,
Butterworths Asia 1998). It followed that a representation cannot be
C construed as a misrepresentation and a term of contract at the same time and
this is established in the following cases.
[31] The Court of Appeal case of Abdul Razak Datuk Abu Samah v. Shah
Alam Properties Sdn Bhd & Another Appeal [1999] 3 CLJ 231 at p. 236; [1999]
2 MLJ 500 at p. 505, was cited by learned counsel for the appellant where
D Gopal Sri Ram JCA (as he then was) drew a distinction between “pre-
contractual statement” and “contractual statement”. In his judgment, it was
held as follows:
Since the consequences for a statement made by a party to a contract
depends upon the stage at which the statement is made, the law
E recognises a division between contractual and pre- contractual statements.
Pre-contractual statements are called ‘representations’. However,
contractual statements are obligations actually undertaken by the party
making them. They are referred to by lawyers as ‘the terms of a contract.

F
[32] It was submitted by the appellant that the learned JC relied on the case
of Lim Sew Lan v. Pembangunan Hysham Sdn Bhd & Anor (supra) to support
his finding that there was a breach of contract against the appellant and the
Court of Appeal case of Balakrishnan Devaraj & Anor v. Admiral Cove
Development Sdn Bhd [2010] 7 CLJ 152 to support his finding on
misrepresentation against the appellant. However, there was never an issue
G
of misrepresentation raised before the High Court in Lim Sew Lan. Similarly,
there was never an issue of breach of contract raised before the Court of
Appeal in Balakrishnan Devaraj. Neither of these two cases dealt with the issue
of concurrent claims of misrepresentation and breach of contract.

H
[33] On the facts, this was 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 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
I
mutual consent of Roxy Leisure and the appellant because of the prevailing
economic condition.
438 Current Law Journal [2015] 9 CLJ

[34] We also noted the appellant had also entered into a tenancy agreement A
with Fajar Retail Enterprise Sdn Bhd in 2002, with Fajar as an anchor tenant.
[35] Learned counsel for the appellant submitted that there were no
misrepresentation as the terms of the SPA and the alleged representations
were performed and fulfilled. Looking at the character of representations
made by the appellant, it showed that the appellant was to provide space B
instead of itself constructing and/or operating a theme park or food court.
In the SPA the appellant was not being described as a theme park or food
court operator, instead it was described as a vendor which constructs a
commercial complex and sells commercial units. It therefore followed that
any statement as to “theme park”, “bowling”, “cine”, “KTV”, “restaurant”, C
in a floor plan must ordinarily and naturally mean that this is the space
provided for such activity. It cannot be that this means that the appellant
must operate this business purpose, for the other simple reason the SPA does
not state but the appellant is licensed or has expertise to so operate.
[36] The appellant submitted that the alleged representations were subject D
to a disclaimer or exemption clause as stated in the brochure, which
amounted to an invitation to treat, and authorisation to alter the layout plan
under the SPA.
[37] The disclaimer/exemption clause in the brochure upon which the
E
respondents’ case relies on has the following disclaimer and exemption
clause:
The information, perspectives and plans contained in this brochure are
subject to amendments as may be required by the Authorities and the
consultants. All drawings are artist’s impression only. While care has been
F
taken in providing this information, the developer cannot be held for any
inaccuracies.
[38] The appellant submitted that it was clear from the wording of the
exemption clause that it was included in the brochure for the purpose of
notifying the general public that the information, perspectives and plans
G
contained in the brochure would be subject to further amendments of which
the appellant could not be held liable for.
[39] The respondents attempt to disregard the exemption clause and to hold
the appellant liable for the contents of the brochure was an attempt “to deny
the legitimacy and effectiveness of that exclusion clause for which it was H
designed (thereby) render it meaningless ...” (per Suriyadi Halim Omar JCA
in the Court of Appeal case of Malaysian Newsprint Industries Sdn Bhd
v. Perdana Cigna Insurance Bhd & Ors [2008] 1 CLJ 246; [2008] 2 MLJ 256).
[40] Furthermore, the information contained in the brochure could not be
said to have been incorporated as a term of the SPA since “as a general rule, I
an advertisement is considered by courts to be not an offer but a mere
invitation to treat...” (per Gopal Sri Ram JCA (as he then was) in the Court
of Appeal case of Eckhardt Marine GMBH v. Sheriff Mahkamah Tinggi Malaya
& Ors [2001] 3 CLJ 864; [2001] 4 MLJ 49).
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 439

A [41] We were 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 were persuaded by the appellant’s argument that the
fourth Schedule included in the 28 separate SPAs adduced do not uniformly
B depict the food court and/or the theme park as a contractual obligation to
construct. A SPA involving a first floor unit will not include any area
depicted as a food court, which is on the second floor. Nor would a SPA for
a second floor unit show any area for a theme park, since the theme park will
be on the third and fourth floors. On this basis, the argument that the
C
representations in the advertisement brochure had been incorporated in the
SPA by the inclusion of Schedule 4, was not convincing in law.
Whether The Exemption Clause In The Brochure Was Effective In Law To Exclude
Liability For Misrepresentation
[42] As for the legal bindingness of the representations in the advertisement
D brochure as a pre-contractual document, it was common ground that there
existed 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 were in the nature of an invitation to treat (Eckhardt
Marine GMBH v. Sheriff, High Court of Malaya, Seremban & Ors (supra)). In this
E connection, the learned JC had also failed to evaluate this exemption clause
leading to an error of law which again invited appellate intervention on our
part.
Whether The Respondents Had Pleaded Fraudulent Or Negligent Misrepresentation,
Or Merely Innocent Misrepresentation, For Which No Damages Were Claimable
F
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
[43] The other representations made in the post-contractual newsletters too
G should remain as they really were, namely, representations without
contractual effect made to the tenants of the said Complex at large. There was
no evidence of deceit or fraudulent misrepresentation in these circumstances.
[44] On the facts of this case, the respondents had been delivered the units
they had purchased in the said Complex, which were not structurally or
H fundamentally different from that promised in the SPAs, fourth Schedule.
The facts here were quite unlike the facts in Balakrishnan Devaraj (supra), an
authority advanced by counsel for the appellant. Balakrishnan Devaraj (supra)
also laid 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
I of land remained executory in form and had not been fully executed. On the
facts of this appeal, we were minded to find a case of innocent
misrepresentation for which no damages would be claimable. The SPAs here
too had all been fully executed and the properties delivered.
440 Current Law Journal [2015] 9 CLJ

Whether The Learned JC Was Correct In Law To Have Ordered General And A
Special Damages To Be Assessed For Both Misrepresentation And Breach Of
Contract
[45] Counsel for the appellant submitted that the High Court Order dated
28 July 2011 had ordered the appellant, inter alia, to pay:
B
(a) damages for the misrepresentations in the advertisement brochure and
newsletters;
(b) damages for its breach of cl. 39 and Schedule 4 of the SPA;
(c) special damages as pleaded in para. 136 of the statement of claim to be
C
assessed; and
(d) general damages to be assessed.
[46] Those prayers as stated above represent a quadruple claim in favour
of the respondents because the wrongdoing complained of emanated from the
same statement. This was the most obvious and blatant misunderstanding of D
the pleadings and evidence. The learned JC whilst ordering the appellant to
pay special damages as prayed for in para. 136 of the statement of claim,
completely failed to provide any reason for the following relief in para. 136
when he entered judgment for the respondents. According to the appellant’s
counsel some of the matters pleaded in para. 136 had been abandoned by the E
respondents. On 27 January 2011, during the case management before
YA Dato’ VT Singham, the respondents’ counsel confirmed that they were
only proceeding with reliefs (i), (iii), (xi) para. (i), (xix), (xx), (xxiii), (xxiv)
and (xxv). On the other hand, para. 136 of the statement of claim includes
other claims which the respondents had decided not to proceed with. F
[47] The law and the SPA do not justify such an award, made for para. 136.
Below are some of the items for which the respondents were claiming for and
the appellant’s response to them. The respondents’ counsel confirmed, at the
last hearing on 19 August 2014, that the respondents had abandoned the
claim for liquidated and ascertained damages (LAD). On damages for breach G
of brochure and newsletters, the learned JC had already awarded damages
both for misrepresentation and breach of contract, and general damages. On
damages for misrepresentation, this had already been ordered separately. On
reduction in the value of the property, the appellant submitted that it had
already been ordered separately by way of general damages. On damages for H
breach of cl. 4 (that time shall be of the essence), the appellant submitted that
this did not entail to stipulate any obligation.
[48] Learned counsel for the appellant further submitted that the only
evidence produced by the respondents to prove the amount of damages was
the expert report. The learned JC had failed to analyse the reasoning of rival I
expert valuers and merely relied on the evidence of PW1. On the same point,
the respondents had failed to specify with certainty whether their action for
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 441

A misrepresentation was one of negligent misrepresentations or fraudulent

misrepresentation. As the respondents did not plead fraudulent
misrepresentation, they would not be allowed to rely on any arguments
relating to fraudulent misrepresentation (Sim Thong Realty Sdn Bhd v. Teh
Kim Dar [2003] 3 CLJ 227; [2003] 3 MLJ 460 (CA)).
B [49] On the other hand, learned counsel for the respondents submitted that
the learned JC had awarded damages to the respondents and assessment was
to be conducted by the Registrar. Learned counsel for the appellant had
agreed and approved the draft judgment dated 28 July 2011 without any
protest. Therefore to protest now that the learned JC had erred in awarding
C excess damages was baseless and devoid of merit. The respondents submitted
that the Court of Appeal can vary the judgment to reflect the issues decided
at the trial.
[50] We found that, in connection with the order on damages to be assessed
granted by the learned JC, there were elements of duplicity. A plaintiff must
D 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 the respondents, there could
not therefore be an order for damages to be assessed for both
E misrepresentation and breach of contract.
Whether There Was An Agreement At Case Management To Limit The Number
Of Witnesses For The Respondents To Merely Two Witnesses
[51] The appellant highlighted that this case involved more than 170
F individual purchasers, the respondents have the burden to show that there
were false positive assertions by the appellant which induced each of them
to enter into their respective SPAs. In order to successfully claim that there
was indeed misrepresentation by the appellant, each of the 176 respondents
would have to come to court to give evidence to this effect, as each of the
respondent’s state of mind when signing the SPAs is distinct from one to the
G
other. In Dato’ Badarudin Abd Khalid & Ors v. MBF Property Services Sdn Bhd
& Ors [2011] 1 LNS 1625; [2011] MLJU 1256, it was held that the four
plaintiffs who took the stand could not do so on behalf of the other plaintiffs
as they were in no position to know the “state of minds” of these plaintiffs
at the time the decisions to sign up for the sale and purchase agreement and
H the loan agreements were made. Therefore, there was no evidence before the
court to prove that the plaintiffs other than the four who had testified had
been misrepresented to by the appellant.
[52] It was submitted that there were in total 176 respondents consisting of
individuals and companies. However, counsel for the respondents had
I
decided to use a selective approach by hand picking a particular individual
to impress on the court on the issue of misrepresentation and conveniently
442 Current Law Journal [2015] 9 CLJ

gave evidence in court that the remaining respondents had authorised him to A
give evidence on their behalves without considering that the state of mind of
each and every respondent before entering into the SPA was vital in a cause
of action based on misrepresentation.
[53] Counsel for the appellant denied the allegation of counsel for the
respondents that the appellant had during case management agreed to the B
calling of two witnesses. Counsel for the appellant referred to the notes of
proceedings at p. 878 AR Bahagian B Jilid I where the respondents’ counsel
herself had maintained her stand on the issues and calling of witnesses and
stated that it was the respondents’ prerogative to decide on the number of
witnesses and submitted that there was never an agreement by the appellant C
that PW1 was sufficient to tender evidence on behalf of all the remaining
175 respondents.
[54] Furthermore the evidence of PW1 was only relevant regarding the
representation made to PW1. The evidence given by PW1 were either only
facts applicable to himself or facts in general which could not in any way D
prove that all the respondents were induced by the appellant’s alleged
“misrepresentation” and his evidence that the other respondents too executed
similar SPAs and deeds were highly inaccurate as it had already been
established that Schedule 4 of each SPA differed from one to the other. The
food court only appears in the second floor plan, the theme park in the third E
floor plan and neither facility appears in the first floor plan.
[55] It was further submitted that the respondent had failed to produce the
authorisation letters authorising PW1 to give evidence. Despite the
undertaking given by counsel for the respondents to produce the said
authorisation letter, they had failed to do so. Instead, several warrants to act F
were attached together with the written submissions of the respondents. Due
to the failure by the respondents to produce the letter of authorisation/
warrants to act during the respondents’ case, the appellant was deprived of
the right to cross examine on the warrants to act. In addition, the warrants
to act was not marked nor tendered as evidence. G

[56] In reply, the respondents submitted that it was at the behest of the
appellant that the two witnesses would give evidence on behalf of all the
respondents at the trial. Counsel for the appellant in his letter had confirmed
that only two witnesses would give evidence on behalf of the other
respondents. This was recorded before Justice VT Singham at the pre-trial H
conference on 27 January 2011. These two witnesses testified in court and
the appellant did not lead any evidence or call any witnesses challenging the
two witnesses’ authorities.
[57] On the issue whether there was an agreement at case management stage
I
to limit the number of witnesses for the respondents to two principal
witnesses, we had studied the records and it would appear that there was such
 Bounty Dynamics Sdn Bhd v.
[2015] 9 CLJ Chow Tat Ming & Ors 443

A an agreement. Counsel for the respondents had 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 minds, would
only make some sense on the assumption that the alleged misrepresentations
in the brochure, SPAs, and the newsletters acted uniformly on the minds of
B 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 became important to decide whether by
limiting the number of witnesses for the plaintiffs/respondents to two
C
principal witnesses, the respondents had in fact adduced sufficient necessary
and relevant evidence to establish misrepresentation and breach of contract,
since misrepresentation would act differently on the minds of each of the 175
purchasers.
Whether The Respondents Had Established Their Case Based On Misrepresentation
D And Breach Of Contract By The Evidence Of Only Two Purchasers As Witnesses,
Although The Claim Is By 176 Unit Purchasers
Whether The First Respondent Had 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
E
[58] The appellant submitted that without prejudice to their objection that
the warrants to act could be considered by the Court of Appeal, the appellant
highlighted the following defects in the warrants to act:
(a) 15 respondents are companies. However, since the cause of action was
F misrepresentation, it was uncertain as to how representation was even
made to that particular company, that is, to which officer or director;
(b) the 79th respondent is deceased. There was no evidence whether the
authorisation was given by him before his demise or by his
administrator after his demise;
G
(c) only 101 respondents out of 176 respondents signed the warrants to act;
and
(d) not all the respondents authorised PW1 but instead authorised the
solicitors (refer to pp. 2276, 2347 and 2360 of the Rekod Rayuan
H Tambahan (3)).
Hence, it was impossible for PW1 to say for certain that there was
misrepresentation to and reliance on such misrepresentation by each and
every respondent. Furthermore there was no evidence in court to show that
each and every respondent was given the advertisement brochure and had
I read it, and relied and executed their respective SPAs upon the
representations by the appellant.
444 Current Law Journal [2015] 9 CLJ

[59] With regard to the allegedly unsatisfactory nature of the status of the A
first respondent to represent the rest of the respondents, we had been shown
copies of the warrants to act, which were only produced during the
submissions stage in the High Court. These warrants did not speak of
authorising the first respondent to give testimony on behalf of all other
respondents. In the total circumstances again, this was not an overly major B
point that could be regarded as determinative of this appeal. All said and
done, the other respondents or any of them had not raised any objection to
the first respondent representing them. The point was 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 C
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 warrants to a
act at the earlier stage.
Conclusion
[60] In the premises above, we unanimously allowed this appeal. The D
Order of the High Court dated 26 April 2010 was set aside. We awarded
costs of RM30,000 here and below to the appellant.
[61] The deposit was to be refunded to the appellant.
E