DAE HANGURU INFRA SDN BHD BALDAH TOYYIBAH (PRASARANA) KELANTAN SDN BHD

DAE HANGURU INFRA SDN BHD BALDAH TOYYIBAH (PRASARANA) KELANTAN SDN BHD

Appeal dismissed because there was no binding contract between the First Defendant and the appellant; the High Court erred in finding a promoter-successor relationship and in applying section 35 without pleaded or evidential foundation for contracts purportedly entered into on behalf of the appellant; estoppel did not apply and the Court of Appeal's finding that no consensus ad idem existed was affirmed.

Citation
01(f)-32-11/2020(D) (Mahkamah Persekutuan)
Parties
Appellant/plaintiff: Dae Hanguru Infra Sdn Bhd; Respondent/1st Defendant: Baldah Toyyibah (Prasarana) Kelantan Sdn Bhd; Respondent/2nd Defendant: Perbadanan Menteri Besar Kelantan
Court
f
Jurisdiction
Malaysia
Judgment Date
7 April 2022
Case Number
01(f)-32-11/2020(D) (Mahkamah Persekutuan)
Procedural Posture
Civil Appeal / Judgment on Appeal (federal Court)
Outcome
Appeal dismissed; decision of the Court of Appeal affirmed; ancillary appeal (01(f)-33-11/2020) withdrawn and struck out
Legal Topics
Pre Incorporation Contracts, Promoter Successor Doctrine, Section 35 Companies Act 1965, Letters of Intent, Consensus Ad Idem, Novation, Quantum Meruit, Pleading Requirements
Source Language
Malay/English
Contract Law Company Law Construction Law Equitable Estoppel Civil Procedure Pre Incorporation Contracts Promoter Successor Doctrine Section 35 Companies Act 1965 +5 more

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Parties

Dae Hanguru Infra Sdn Bhd

Appellant/plaintiff

Baldah Toyyibah (Prasarana) Kelantan Sdn Bhd

Respondent/1st Defendant

Perbadanan Menteri Besar Kelantan

Respondent/2nd Defendant

Procedural Posture

Civil Appeal / Judgment on Appeal (federal Court)

Legal Issues

  1. 1 Whether pre-incorporation contract principles apply to bind a successor company under section 35 Companies Act 1965
  2. 2 Whether recognition by conduct estops the contracting party from denying contractual status of a successor company
  3. 3 Whether preliminary documents (LOI/LOA/letter of intent) can demonstrate consensus ad idem sufficient to form a binding construction contract

Ratio Decidendi

Appeal dismissed because there was no binding contract between the First Defendant and the appellant; the High Court erred in finding a promoter-successor relationship and in applying section 35 without pleaded or evidential foundation for contracts purportedly entered into on behalf of the appellant; estoppel did not apply and the Court of Appeal's finding that no consensus ad idem existed was affirmed.

Court Disposition

Appeal dismissed; decision of the Court of Appeal affirmed; ancillary appeal (01(f)-33-11/2020) withdrawn and struck out

Orders

  • Appeal dismissed with costs
  • Decision of the Court of Appeal affirmed