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2021 MarsdenLR 1029
HIGH COURT MALAYA PENANG
TAN THAN KAU – Appellant
Versus
CHING KOOI CHOO – Respondent
[Civil Appeal No: PA-12ANCC-8-06/2021]
The court ruled that proper service, requiring acknowledgment, was essential under the terms of the Option Agreement, thus allowing an appeal due to raised triable issues.
Headnote:(A) Rules of Court 2012 – Order 14 – Summary Judgment – Appeal against the Sessions Court's granting of summary judgment for RM863,000 under a Call and Put Option Agreement – Key issue of service of the Put Option Notice addressed – The appellate court found a triable issue regarding the notice's service methodology – Previous decisions highlighted but distinguished – Appeal allowed, and matter remitted for trial. (Paras 1, 24)
(B) Summary Judgment Principles – The burden lies with the defendant to demonstrate the existence of a triable issue even when faced with an affiant's assertion – An application for summary judgment may be dismissed if a single triable issue exists. (Paras 14, 22)
Facts of the case: The plaintiff executed an Option Agreement allowing the defendant to purchase shares with a stipulated notice requirement. Dispute arose over proper service of the Put Option Notice by the plaintiff, leading to the application for summary judgment.
Findings of Court: The Sessions Court judge found no triable issues, which the appellate court disagreed with, stating the service of notice was contested.
Issues: The central issue was whether the service of the Put Option Notice was compliant with the Option Agreement.
Ratio Decidendi: The appellate court emphasized that mere posting is insufficient; acknowledgment of receipt is paramount under the terms of the Option Agreement.
Result: Appeal allowed and case remitted to the Sessions Court for trial.
JUDGMENT
Introduction
[1] This is an appeal against the decision of the Sessions Court at George Town allowing an application for summary judgment under O 14 of the Rules of 2012. Judgment was entered for a sum of RM863,000.00 as agreed liquidated damages under a Call and Put Option Agreement dated 19 February 2019 ("the Option Agreement"). On 28 December 2021, I allowed the appeal and remitted the matter to the Court below for trial.
[2] For ease of reference the parties referred to are as they were in the Court below.
The Facts
[3] The facts stated in the affidavit of the parties are largely undisputed. The only dispute raised by the defendant was that he was not served with the put option notice as required by the Option Agreement.
[4] The salient facts are as follows. The plaintiff was the legal registered owner of 8,200,000.00 ordinary shares of D'Nonce Technology Berhad. On 19 February 2019 the plaintiff and defendant executed the Option Agreement. In consideration of granting the call option in respect of 4,100,000 shares within a stipulated period the defendant agreed to grant the plaintiff the put option whereby the plaintiff may at any time during the put option period require the defendant to purchase all the option shares at the option price upon the terms and conditions stipulated in the Option Agreement.
[5] The Option Agreement required an exercise of the put option to be affected by serving on the defendant a put option notice. The defendant, upon receipt of the said put option notice, is required to purchase all the option shares at the price stated in cl 5 of the Option Agreement. In the event the defendant fails to comply with his obligations to complete the purchase of the option shares the plaintiff is entitled to specific performance and other such remedies available to her. Alternatively, the plaintiff is entitled to terminate the Option Agreement whereupon within one month from affecting service of such termination notice the defendant is bound to pay liquidated damages in the sum of RM863,000.00.
[6] The put option period was to expire on 18 August 2020 according to the Option Agreement. The plaintiff averred that she on 17 July 2020 in accordance with cl 3.2 of the Option Agreement sent the defendant a written notice on 17 July 2020 by registered Pos Laju requiring him to purchase 4,100,000 shares at the price of RM3,114,000.00 ("the Put Option Notice"). The plaintiff averred that the Put Option Notice was addressed to the defendant's address at No 1383, Mukim 15, Jalan Megat Harun Alma, 14000, Bukit Mertajam, Pulau Pinang. It was averred that the Put Option Notice was received by the defendant on 27 July 2020 before the expiry of the put option period.
[7] The plaintiff exhibited a copy of the Put Option Notice and proof of postings which was a Pos Laju delivery note (see p 79 of the Record of Appeal). The plaintiff averred that she is advised by her solicitors and verily believed that the Put Option Notice was delivered in accordance with cl 16.1(b) and deemed served on the defendant within 48 hours of the posting which would be on 19 July 2020 by virtue of cl 16.2(b) of the Option Agreement.
[8] The plaintiff averred that the defendant failed to complete the purchase of the option shares and was as a consequence thereof liable to pay the agreed liquidated damages pursuant to cl 7.2 of the Option Agreement. The plaintiff further averred that the defendant's subsequent conduct affirmed the fact that he acknowledged the debt by proposing a settlement vide a draft settlement agreement. As a result, the plaintiff averred that there was no defence to her claim and prayed for summary judgment to be entered as prayed.
[9] The defendant on the other hand averred in his affidavit in reply that:
(i) the service by Pos Laju is not service by prepaid registered post with recorded delivery;
(ii) service of the Put Option Notice did not comply with cl 16.1(b) as the Pos Laju delivery note has no proof
