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2024 MarsdenLR 300
HIGH COURT MALAYA KUALA LUMPUR
BJ HOMES DEVELOPMENT SDN BHD – Appellant
Versus
DAVEENDER SINGH SARJEET SINGH – Respondent
[Appeal Suit No: WA-12BNCVC-4-01/2023]
The court ruled that economic duress must be substantiated by evidence, and the Settlement Agreement was valid and enforceable despite the plaintiff's claims.
Headnote:(A) Housing Developer (Control & Licensing) Act 1966 – Section 22C – Contracts Act 1950 – Section 15 – Appeal from Sessions Court regarding duress in a settlement agreement – The court found no evidence of duress as the plaintiff failed to substantiate claims with corroborating witnesses or complaints made prior to the suit – The Settlement Agreement was deemed valid and enforceable. (Paras 3, 46, 70)
(B) Duress – Definition and application – The court clarified that economic duress must involve coercion that vitiates consent, requiring evidence of protest, alternatives, independent advice, and actions taken post-agreement – The absence of such evidence led to the conclusion that duress was not established. (Paras 33, 25)
Facts of the case: The plaintiff alleged duress in a settlement agreement regarding liquidated damages for a property purchase, claiming pressure from the defendant's staff. The Sessions Court found partial duress but awarded a lesser amount than claimed. (Paras 8, 12)
Findings of Court: The court found the Settlement Agreement valid and binding, ruling that the plaintiff lacked locus standi due to failure to notify the financier as required by law. (Paras 70, 68)
Issues: The main issues included the test for duress, the necessity of notifying the financier, and the nature of the assignment. (Paras 2, 60)
Ratio Decidendi: The court emphasized that the plaintiff's claims of duress were unsupported by evidence, and the Settlement Agreement was valid under the applicable laws. (Paras 46, 70)
Result: Appeal allowed, and the Sessions Court order was set aside. (Paras 70)
Introduction
[1] This an appeal to me from the Sessions Court after a full trial. The appellant is the defendant at the Sessions Court. The respondent is the plaintiff at the Sessions Court. Parties will be referred to as they were in the Sessions Court.
[2] The appeal raises the following interesting legal issues-
i. What is the test for duress or economic duress to vitiate a settlement agreement?
ii. Do s 22C of the Housing Developer (Control & Licensing) Act 1966 and cl 7 of the SPA (Schedule H) require a plaintiff who has given an absolute assignment to his end-financier to notify his end-financier of his suit? If he fails to do so, does he lack locus standi to maintain the suit and the suit is incompetent and will be struck out?
iii. What is the test to determine whether an assignment is an absolute assignment or it's an assignment by way of charge only?
[3] On 29 September 2023 I have allowed the defendant's appeal with costs of RM 15,000.00 here and below subject to allocatur and set aside the Sessions Court order.
[4] The plaintiff has obtained leave from the Court of Appeal to appeal on 10 January 2024. The plaintiff filed the appeal to the Court of Appeal on 22 January 2024. These therefore are my Grounds of Judgment.
Background Facts
[5] By a Sale and Purchase Agreement dated 30 December 2013 the plaintiff agreed to buy a service apartment identified as unit C-13-08 in a project known as City of Green developed by the defendant for the sum of RM 641,000. ("SPA Agreement").
[6] The defendant failed to deliver vacant possession of the property to the plaintiff within 48 months from the date of the SPA Agreement. By virtue of cl 25 (2) of the SPA Agreement, the defendant was liable to pay the plaintiff Liquidated Ascertained Damages ("LAD").
Settlement Agreement
[7] Subsequently, on 14 June 2019 parties agreed on a payment of RM 10,460.20 as full and final settlement for the liquidated damages. This is evidenced by a letter dated 31 May 2019 from the defendant to the plaintiff and agreed to and signed by the plaintiff on 14 June 2019 [See Appeal Record Volume 2B pp 316 - 319). ["Settlement Agreement"]
Suit Filed At The Sessions Court By The Plaintiff Alleging The Settlement Agreement Is Void For Duress And Compulsion
[8] One year and 8 months later, on 26 February 2021, the plaintiff filed a suit against the defendant alleging that the Settlement Agreement was forced on him by the defendant under duress and compulsion. This is the sole ground pleaded by the plaintiff to set aside the Settlement Agreement. [See Appeal Record pp 25 to 28 Statement of Claim at para 11].
[9] In the suit, the plaintiff alleged a staff of the defendant on 31 May 2019 pressured him by saying that vacant possession for the property will only be given to him if he agrees to accept RM 10,460.20 as full and final settlement for the liquidated damages. The staff is not identified.
["the Alleged Duress"]
[See Appeal Record pp 26 & 27 Statement of Claim at paras 10 & 11]. [See also Witness Statement of the plaintiff at Q and A 14 Appeal Record p 145].
[10] The suit claims the defendant was liable for more LAD in the sum of RM105,622.26, after deducting the agreed settlement sum of RM 10,460.20. [See Appeal Record p 27 Statement of Claim at paras 12 and 14].
Sessions Court's Findings
[11] The plaintiff testified at trial in support of his allegation of Alleged Duress. No witnesses were called by the plaintiff to corroborate his allegation.
[12] The Sessions Court agreed there was duress. But the Sessions Court held that the Defendant was only liable to pay RM 42,575.96 and not RM 105,622.26 as claimed by the plaintiff. [See Appeal Record p 18 Penghakiman and p 7 Grounds of Judgment in para 13].
[13] I should point out that from the time of the Settlement Agreement on 14 June 2019 till the filing of the present suit on 26 February 2021, the plaintiff never made any complaint to the defendant that a staff of the defendant committed the Alleged Dure
