The court ruled that agreements remain valid until proved otherwise, emphasizing the burden of proof lies with the party contesting the agreement's validity, reinforcing principles of contract performance.

Akhtar Tahir J:

Introduction

[1] The Plaintiff's claim against the 1st Defendant is for the breach of payment under a Novation agreement and against the 2nd Defendant for a personal guarantee, guaranteeing the payment of the sum agreed under the novation agreement.

Brief Facts And Background

[2] The Plaintiff was appointed under a Master Development Agreement ("MDA") by FELDA Investment Corporation Sdn Bhd ("FIC") to develop a piece of land at Sesyen 4- PG, Daerah Jempol, Negeri Sembilan ("the said land") registered under the Federal Land Development Authority (FELDA").

[3] The Plaintiff transferred all its rights and liabilities to the 1st Defendant under a Novation agreement dated 7 October 2016 for a consideration of RM3.5 million of which RM1 million was paid to the Plaintiff's lawyer to be held as a stake holder.

[4] The 2nd Defendant had given a personal guarantee for the balance sum to be paid under the Novation Agreement.

[5] The 1st Defendant failed to pay the balance sum as stipulated under the Novation Agreement and hence this suit was filed by the Plaintiff against both the Defendant to recover the sum owed under the Novation Agreement.

[6] As a defense the Defendants contended that the Novation agreement was void ab initio as the FIC had entered into the MDA with the Plaintiff to a land belonging to FELDA without the approval of the Minister as required under the law.

The Issue

[7] The Court noted in this case that the Defendants are not disputing the Novation agreement nor the personal guarantee but are challenging the validity of the MDA which in turn has the effect of invalidating the Novation Agreement.

[8] The sole issue for determination in this case is the validity of the MDA and subsequently the Novation agreement.

The Burden Of Proof

[9] As the allegation of the invalidity of the MDA is raised by the Defendants the burden of proof is upon the Defendants as stipulated in s 103 of the Evidence Act 1950 which states:

The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.

ILLUSTRATIONS

(a) A prosecutes B for theft and wishes the Court to believe that B admitted the theft to C A must prove the admission.

(b) B wishes the Court to believe that at the time in question he was elsewhere. He must prove it.

[10] As the burden of proof is upon the Defendants the Court directed the Defendants to begin the case. The Court is empowered to set the directions for trial as provided for under O 33 r 3 as follows:

3. Determining mode of trial (O 33 r 3)

(1) In every action begun by writ, an order made at the pre-trial case management shall determine the mode of trial; and any such order may be varied by a subsequent order of the Court made at or before the trial.

(2) In any such action, different questions or issues may be ordered to be tried by different modes of trial and one or more questions or issues may be ordered to be tried before the others.

The Minister's Approval

[11] The requirement for the Minister's approval is contained in the Land Development Act 1956 and is worded as follows:

(1) There shall be established for the purposes of this Act a body, to be known as the Federal Land Development Authority.

(2) The Authority shall have the following duties:

(a) to undertake and carry out land development projects;

(b) to promote and assist in the investig