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2014 MarsdenLR 34

HIGH COURT MALAYA SHAH ALAM
ZAINOL @ ZAINOL ABIDIN MOHAMED – Appellant
Versus
LEE LIM HUAT – Respondent
[Civil Appeal No: 12B-201-07/2014]



An undertaking lacking valid consideration may be set aside if evidence of undue influence or economic duress exists, particularly in fiduciary relationships.

Headnote:(A) Contracts Act 1950 - Sections 124, 15, and 73 - Breach of undertaking - The trial court concluded that the defendant, having signed an undertaking, was obligated to pay RM 200,000 to the plaintiff due to the latter's provision of legal services and release of a title document. The defendant's defenses of lack of consideration and economic duress were found unsubstantiated, with no evidence of coercion established. The court emphasized that the relationship between the parties showed undue influence, thus vitiating the contract. (Paras [10]-[31])

Facts of the case:
The plaintiff was a solicitor who rendered legal services to a company, which resulted in a letter of undertaking by the defendant, a director, promising payment upon sale of property. The defendant later denied liability, claiming duress.

Findings of Court:
The court determined that no valid consideration existed for the undertaking and that undue influence was present, thus setting aside the previous judgment favoring the plaintiff.

Issues: The principal issues involved the validity of the undertaking and the presence of undue influence or economic duress in its formation.

Ratio Decidendi: The court ruled that given the fiduciary relationship and lack of evidence of free consent on part of the defendant, the undertaking lacked validity and was set aside.

Result: The appeal was allowed and the lower court judgment set aside.

Table of Content
1. claim for breach of undertaking. (Para 1 , 2 , 5 , 6 , 7 , 8 , 9 , 10 , 12 , 13)
2. court's analysis of duress and undue influence. (Para 3 , 4)
3. contentions of parties regarding consideration. (Para 14 , 15)

[1] This is an appeal against the decision of the learned sessions court judge dated 12 June 2014 after trial allowing the Respondent/Plaintiff's claim of RM 200,000 together with interest and costs.

[2] The Respondent/Plaintiff's claim against the Appellant/Defendant was for breach of undertaking given pursuant to a letter of undertaking dated 20 August 2009.

[3] In the grounds of judgment, the learned judge said as follows:

"[9] Mahkamah ini dapati eksibit P2 iaitu surat akujanji bertarikh 20 Ogos 2009 yang di tandatangani olen Defendan adalan sah dan boleh dilaksanakan. Defendan sendiri dalam keterangannya tidak menafikan yang beliau telah menandatangani eksibit P2 tersebut.

[10] Mahkamah ini dapati balasan kepada akujanji Defendan ialah Plaintif telah melepaskan dokumen keluaran Hakmilik tanah yang dipegang oleh Plaintif kepada Defendan dan Defendan telah mendapat manfaat dengan melupuskan tanah tersebut kepada pihak ketiga. Defendan adalah pemegang syer utama dan juga salah seorang pengarah dalam syarikat Precise Avenue (M) Sdn Bhd. Hujahan peguam Defendan bahawa ketiadaan balasan dalam suatu kontrak apabila Defendan tandatangan eksibit P2 tidak dapat diterima oleh mahkamah ini.

[11] Mahkamah ini berpendapat apabila Defendan menandatangani surat akuanjanji tersebut ianya adalah persetujuan oleh Defendan sendiri untuk membayar kepada Plaintif jumlah sebanyak RM 200,000 selepas pelupusan tanah tersebut.

[12] Plaintif yang bertindak sebagai peguamcara Precise Avenue (M) Sdn Bhd tidak di bayar fi langsung. Selam beliau bertindak untuk Precise Avenue (M) Sdn Bhd dan Mahkamah juga dapati tindakan Plaintif memegang dokumen keluaran Hak Milik tanah Precise Avenue (M) Sdn Bhd adalah wajar di bawah s 124 Akta Kontrak 1950:

General lien of bankers, factors, wharfingers, advocates and policy brokers Bankers, factors, wharfingers, advocates and policy brokers may in the absence of a contract to the contrary, retain, as a security for a general balance of account, any goods bailed to them; but no other persons have to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.

[13] Walaupun peguam Defendan menghujahkan yang Plainitf telah gagal memberikan bil ataupun invois untuk membuktikan yang wujudnya 'a general balance of debt' dan Plaintif gagal memaklumkan berapakah jumlah yang benar-benar terhutang oleh Precise Avenue, namun begitu, hujahan tersebut tidak diterima oleh mahkamah ini kerana SP1 dalam keterangannya jelas menyatakan yang menyatakan Plainitf mempunyai lien keatas Dokumen Keluaran Hakmilik tanah tersebut di bawah s 124 Akta Kontrak untuk mendapat bayaran fi beliau. Ini kerana daripada tarikh 20 Ogos 2004 sehinggalah 20.8.2009 Plaintif tidak dibayar fi langsung. Mahkamah dapati sebagai seorang peguam yang telah melaksanakan tugasnya sudah tentu perlu dibayar fi kepada beliau.

[14] Berkenaan isu Defendan telah menandatangani surat akujanji tersebut di bawah paksaan dan pengaruh tidak wajar, mahkamah ini mendapati Defendan gagal mengemukakan sebarang bukti wujudnya duress atau pengaruh tidak wajar. Sebagai seorang terpelajar dan seorang pengarah syarikat, Defendan mempunyai pilihan untuk tidak menurunkan tandatangannya di atas surat akujanji tersebut. Berdasarkan keterangan Defendan sendiri, mahkamah ini dapati selepas mendapat kembali Dokumen Keluaran Hakmilik tanah tersebut Defendan telah berjaya menjual tanah tersebut dan menguntungkan syarikat Precise Avenue di mana Defendan adalah seorang pengarah di syarikat tersebut. Defendan juga adalah penandatangan untuk semua cheque syarikat. Dengan yang demikian, Mahkamah ini dapati tidak wujud paksaan atau pengaruh tidak wajar ketika eksibit P2 ditandatangani." (emphasis added)

[4] After reading the written

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