Loh Kuam Hong (No. KP: 650403-07-5125) Kewira Jaya Sdn Bhd (No. Syarikat: 504851-V)

DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG DALAM NEGERI PULAU PINANG, MALAYSIA GUAMAN NO: PA-22NCvC-159-07/2019 Antara Loh Kuam Hong (No. KP: 650403-07-5125) ... Plaintif Dan Kewira Jaya Sdn Bhd (No. Syarikat: 504851-V) ... Defendan JUDGMENT Introduction [1] The plaintiff filed a notice of application on 6.9.2021 for leave to amend his statement of claim dated 5.7.2019 essentially seeking to include the remedy of damages for breach of contract as an alternative to the remedy of rescission which is presently claimed based on the same pleaded facts (enclosure 23). [2] The application is made pursuant to O. 20 r. 5 of the Rules of Court 2012. The plaintiff contends that the proposed amendment: (i) is made bona fide (ii) that the defendant is not prejudiced and if prejudiced can be compensated with costs; (iii) the proposed amendments would not turn the suit from one character into a suit of another and inconsistent character. [3] The application was opposed by the defendant on the following grounds: (a) no cogent or reasonable explanation is given by the plaintiff for the delay in making the application to amend some 2 years after the suit was filed; (b) the amendment is an attempt to introduce a new cause of action of specific performance which is inconsistent with the relief of rescission and therefore will changed the suit from one character into a suit of another and inconsistent character; (c) the defendant cannot be compensated by costs alone in the present case due to the strain of litigation that such amendment will impose on the defendant; and (d) the application to amend is a tactical manoeuvre and not made bona fide. [4] On 18.12.2021, | allowed the application. My reasons for the decision are as follows. For brevity all rules hereinafter stated refer to the Rules of Court 2012. The statement of claim [5] It is pleaded that the plaintiff entered into a sale and purchase agreement dated 17.6.2013 with the defendant for a parcel in a condominium known as Setia Pinnacle. The defendant is the developer of Setia Pinnacle. Vacant possession was delivered to the plaintiff sometime in October 2017. [6] In December 2017 the plaintiff made a complaint to the defendant that the water supplied to the parcel had a foul odour, dirty and not fit to be used for a housing accommodation. This 3 was followed by a series of complaints concerning the quality of the water. On 17.5.2018 the plaintiff issued a “Defects Inspection Form” provided for under the sale and purchase agreement to the defendant. [7] The defendant eventually engaged an expert to carry out tests on the water supplied to the condominium and the plaintiff's parcel. The expert, Union Laboratories Sdn Bhd, in its report dated 13.7.2018 stated that the water supplied to the plaintiff's parcel was “fit for human consumption after process of chlorination or boiling’. It was pleaded that this finding was contradicted by the plaintiff's expert, Edtech Associates Sdn Bhd, who carried out tests on two different dates and in its ensuing reports dated 20.9.2018 and 28.9.2018 confirmed that that the water supplied to the plaintiff's parcel contained bacteria known as "pseudomonas aeruginosa". The plaintiff then appointed Malaysian Testing Laboratory Sdn Bhd who tested water taken from three different locations in Setia Pinnacle in the presence of the defendant's representatives. This expert confirmed that the water at the tank tower and the water supplied to the plaintiff's parcel was contaminated by bacteria. [8] It was alleged that the defendant failed to act to remedy the situation even after the three reports were submitted by the plaintiff to the defendant. As a result, the plaintiff sent a notice of demand wherein it was demanded that the defendant buy the parcel back at the same purchase price and other various sums as compensation. When the demand was ignored the present suit was filed claiming for the following reliefs: (a) for an order to nullify the sale and purchase agreement and that the defendant pay back the purchase price amounting to RM835,900.00 and for renovation works carried out on the parcel amounting to RM100,000.00 within 30 days of this order; and (b) damages of RM3,000.00 for loss of use of the parcel from December 2017 until the parcel is repurchased by the defendant, the return of the maintenance charges paid to date (unspecified) and general damages. The proposed amendments [9] The proposed amendments sought by the plaintiff is to make clearer the non-performance of the contract and can be summarised as follows: (i) (il) (iii) To add paragraph 6A which is merely a reproduction of Clause 1, Clause 16(1), Clause 22(1) and Clause 29(1) of the sale and purchase agreement which, amongst others, spells out the defendant's obligations as the vendor in the laying the water mains and the connection of internal water of the condominium to the said parcel. To add paragraph 6B which pleads the implied term to the clause that contains the purpose of the sale and purchase of the parcel i.e. “housing accommodation”, to mean that the parcel must be suitable and safe for human habitation. To add paragraph 6C which pleads that the right to clean water is a fundamental right recognised by the United Nations and Malaysia is one of the 122 countries that supported the said resolution concerning such right. (iv) To add paragraph 22 to make the breach allegedly committed by the defendant clearer, that is to say, that the defendant has breached its obligation in ensuring that the water mains and water tank built for the building and its common facilities is free of bacteria that could harm the health of the occupants particularly the parcel owned by the plaintiff. (v) To add paragraph 23 where the plaintiff was making a case for exemplary damages but which paragraph was withdrawn at the hearing of the application upon query by the court. The withdrawal means that the proposed relief for exemplary damages is also withdrawn. [10] Hence, there are no new reliefs claimed but relief (b) stated in paragraph 8 above is now proposed to be an alternative relief for damages for breach of contract. Analysis and decision [11] The plaintiff is moving this Court under O. 20 r. 5(1) which confers wide discretion on a judge to allow leave to amend the endorsements on the writ and/or pleadings. It is submitted by counsel that the requirements stated by the Federal Court in Yahama Motor Co Ltd v Yamaha (M) Sdn Bhd [1983] 1 MLJ 213 (“Yamaha Motor’) have been satisfied and that the application to amend ought to be allowed. Counsel for the defendant submitted otherwise and stated that the requirements in the more recent Federal Court decision in Hong Leong Finance Bhd v Low Thiam Hoe and another appeal [2016] 1 MLJ 301 (“Hong Leong Finance”) are not satisfied. It was also submitted that the application ought to be dismissed on the ground that there was no cogent or reasonable explanation proffered for the delay in making the application. The law [12]|n Yamaha Motor the Federal Court stated that the governing principle of O. 20 r. 5(1) is that the court will allow such amendments as will cause no injustice to the other party and to 8 determine whether injustice would or would not result the following questions ought to be addressed: (i) whether the application is bona fide; (ii) whether the prejudice caused to the other side can be compensated by costs; and (iii) whether the amendments would not in effect turn the suit from one character into a suit of another and inconsistent character. If all three requirements are satisfied the court will exercise its discretion in allowing the amendments sought. [13] The Hong Leong Finance case did not depart from the law stated in Yamaha Motor and caters for a case where the application for amendment is made at a very late stage or eleventh hour. The Federal Court made this clear in Asia Pacific Higher Learning Sdn Bhd v Majlis Perubatan Malaysia & Anor [2020] 3 CLJ 153 in the following words: In any event, speaking specifically in the context of amendment applications, this court has already set out detailed guidelines on how to deal with eleventh hour amendment applications in Hong Leong Finance Bhd v. Low Thiam Hoe and another appeal [2016] 1 MLJ 301. [14] According to Hong Leong Finance where an application for amendment is made at a very late stage, the court in addition to the Yamaha Motor questions, except for the question concerning costs, is required to consider the following questions: (a) whether a cogent or reasonable explanation is given in the applicant’s affidavit as to why the application was filed late; (b) whether on the facts the party cannot be compensated by costs alone e.g. due to the strain of litigation that such amendment will impose on the said party; (c) whether the application to amend the pleadings is a tactical manoeuvre; and (d) whether the proposed amendment disclose full particulars for the court to ascertain if there is a real prospect of success in proving the new case. 10 [15] So, the law stated in Hong Leong Finance will only apply if an application for amendment is made at a late stage of the proceedings. This brings me to the first issue. Whether the application is made at a late stage? [16] | hold that the application was not made at a late stage and therefore the principles stated Hong Leong Finance does not apply. There is no issue of lateness because the facts reveal that after pleadings were closed on 4.9.2019, the defendant on 9.10.2019 made an application to strike out the plaintiff's writ and statement of claim under O. 18 r. 19(1) and on 12.6.2020 and was successful. The plaintiff thereafter appealed to the Court of Appeal which on 29.6.2021 reversed the High Court. The plaintiff filed this application for amendment on 6.9.2021, about two months later, when pre-trial directions had not even been given. On these facts there is no lateness the kind of which Hong Leong Finance is authority. [17] In the circumstances this Court now needs to determine whether the plaintiff has satisfied the principles in Yamaha Motor. 11 Whether the principles in Yamaha Motor are satisfied? [18] The issue is whether injustice would or would not result to the defendant by the amendments. The first question to be determined is whether the application is made bona fide. The application is obviously made after the plaintiff reassessed its case after the striking out application. The plaintiff is perfectly entitled to do so. His application is based on the same primary facts: that after vacant possession was given the water that was supplied to his parcel had a foul odour, dirty and not useable for housing accommodation purposes. He had claimed for rescission of the contract but now seeks as an alternative damages for breach of contract. The primary facts pleaded by the plaintiff would entitle him to damages for breach of contract if the breach on part of the defendant is proven at the trial. [19] Counsel for the defendant strenuously argued that the plaintiff by this course is in substance asking for specific performance which is a remedy opposite to rescission of contract and therefore not entitled to make such an amendment. It was further argued that since the plaintiff had elected to rescind the 12 contract he cannot now seek as an alternative damages for breach of contract. [20] | disagree. The plaintiff is not asking and has never asked for specific performance of the contract. There was no need to. This is not a case where one party is seeking relief from the court to direct the defaulting party to perform his promise under the agreement. It has nothing to do with specific performance. The plaintiff is instead asking the court for an order that the plaintiff is entitled to rescind the contract due to a breach of a fundamental term of the contract and if the court is not with him then for damages for the same breach. The defendant submitted that the plaintiff is not entitled to rescind the contract and at the same time electing to treat the contract as subsisting. In Ganam d/o Rajamany v Somoo s/o Sinniah [1984] 2 MLJ 290 the Federal Court said: A wrongful repudiation by one party cannot, except by the election of the other party, so to treat it, put an end to an obligation; if the other party still insists on performance of the contract the repudiation is what is 13 called brutum fulman that is, the parties are left with their rights and liabilities as before. [21] Here the defendant has not accepted the rescission. Thus, the plaintiff in the present case is entitled to seek as an alternative damages for breach of contract as the parties are left with their rights and liabilities as before the present suit was filed. In the circumstances, the plaintiff is entitled to amend his statement of claim to seek damages for breach of contract as an alternative to rescission. | have no hesitation in holding that the application is made bona fide. [22] The next question is whether there is prejudice caused to the defendant by the amendment and such prejudice cannot be compensated by costs. | find that the prejudice caused by the amendment sought is not of a kind that cannot be compensated with costs. In this regard “prejudice” in the context of an amendment application was clarified by the Court of Appeal in ASM Development Sdn Bhd v Hijjas Kasturi Associates Sdn Bhd [2011] 6 MLJ 228 as follows: 14 'Prejudice' in this context, is whether the defendant in this case will or may have difficulty in defending the claim, specifically at the trial. For any relevant prejudice to be found it must constitute prejudice resulting from the amendment, either in the sense that the defendants, in reliance on the claim originally made, altered their position so as to make it more difficult to defend the new claim now made. and in China Orient Asset Management Corporation v Alexma Corporation Sdn Bhd [2018] 2 MLRA 680 as follows: [14] ... “Prejudice”, in the context of amendment applications, cannot mean that if the amendment is allowed, the chances of success of the litigation of the affected party will be severely diminished. “Prejudice” simply means that if the amendment is allowed, the party affected will be unable to pursue or defend the suit, for example, where the material evidence necessary to pursue or defend the suit, and which is necessitated by the amendment, is lost or no longer available. In such a case, the prejudice is cleariy seen. 15 in every other case, where no such prejudice arises, the party can be compensated with costs. [23] The prejudice in the present case is merely having to deal with the alternative claim for damages for breach of contract. This is not a case where the defendant in reliance on the claim originally made had altered its position where it cannot now defend or it has become very difficult to defend the alternative claim for damages. After all, the breach of contract claimed by the plaintiff arises from the same pleaded facts. In my view, the injustice caused to the plaintiff would be far greater if this application is not allowed, as he would be shut out from his claim against the defendant if the court does not find the right to rescind the contract in his favour. The court exist to do justice and where the plaintiff feels that his original statement of claim would not lead to a decision of the real matter in controversy he ought to be allowed to make the necessary amendment if he satisfies the requirements of making amendments. This principle was established by the Court of Appeal in Dato’ Tan Heng Chew v Tan Kim Hor and another appeal [2009] 5 MLJ 790 in the following passages: 16 [43] Itis our view that the proposed amendments should be allowed so that the true lessons in controversy between the parties could be resolved. The court exist for the true administration of justice and to decide the rights of the parties and since the plaintiff felt that his original statement of claim would not lead to a decision of the real matter in controversy and the law allows the amendment to be made to the pleadings, the plaintiff should be allowed to have it corrected if it can be made without any injustice to the defendant. [46] We are of the view that in considering whether any injustice would be caused, the position of the plaintiff must be balanced with the interest of the defendant. Injustice caused would be far greater if the plaintiff's case is to be limited prematurely... On the other hand, the defendants would still have their day in court if the proposed amendments are allowed... [24] As such, whatever prejudice suffered by the defendant, under the circumstances, could be compensated by costs. 17 [25] This brings me to the last question: whether the amendments would turn the suit from one character into a suit of another and inconsistent character. | find that the amendments do not change the character of the suit into a suit of another and inconsistent character. The suit filed in essence concerned the failure to supply clean water to the plaintiffs parcel where rescission is sought while the amendment seeks damages for breach of contract as an alternative to rescission. The claim for rescission for failure to perform the contract and the alternative claim for breach of contract arise from the same factual matrix. The character of the suit remained the same only that the relief claimed is in the alternative. The defendant's submission is respectfully misconceived when it claims that the plaintiff in the alternative claim is seeking specific performance. It is clear that the plaintiff is seeking damages for the same breach he is seeking rescission. Thus, the cases cited by counsel has no relevance to the issue at hand as the plaintiff is not seeking specific performance. In the circumstances the amendment is far from being useless and ineffective. The application for amendment is validly made. 18 Conclusion [36] For the above reasons enclosure 23 is allowed with the exception of the paragraph and relief claiming exemplary damages. wf ~Amarjeet Singh Serjit Singh Judicial Commissioner High Court of Penang Dated : 20" December 2021 Counsel for the Plaintiff: Oi Zie Yiong [PHEE, CHEN & UNG (PENANG)] Counsel for the Defendant: Goay Chun Yau [B C TEH & YEOH (GEORGETOWN)| Cases reffered to: 4. Yahama Motor Co Ltd v Yamaha (M) Sdn Bhd [1983] 1 MLJ 213 2. Hong Leong Finance Bhd v Low Thiam Hoe and another appeal [2016] 1 MLJ 301 19 Asia Pacific Higher Learning Sdn Bhd v Majlis Perubatan Malaysia & Anor [2020] 3 CLJ 153 Ganam d/o Rajamany v Somoo s/o Sinniah [1984] 2 MLJ 290 ASM Development Sdn Bhd v Hijjas Kasturi Associates Sdn Bhd [2011] 6 MLJ 228 China Orient Asset Management Corporation v Alexma Corporation Sdn Bhd [2018] 2 MLRA 680 Dato’ Tan Heng Chew v Tan Kim Hor and another appeal [2009] 5 MLJ 790 20