Court deemed no misrepresentation or duty of care existed, dismissing the plaintiffs' claims for damages.

Wong Kian Kheong JC:

(After Trial)

A. Introduction

[1] This case is novel because I am not able to find a previous Malaysian court decision wherein a "White Knight" of a failed commercial project had claimed for, among others, loss of profit for the doomed project, from the project's financier.

[2] The second plaintiff (2nd Plaintiff), an Indonesian businessman with a Singapore passport, claimed to be a White Knight who had allegedly rescued a mixed development project in Johor Bahru (JB), "Suria Development Project" (Project). The Project was developed by first plaintiff company (1st Plaintiff) and financed by defendant company (Defendant), a co-operative society registered under the Co-operative Societies Act 1993 which has power to grant loans under s 14(1)(a) of Bank Kerjasama Rakyat Malaysia Berhad (Special Provisions) Act 1978.

B. Issues

[3] The following questions, among others, arise in this suit (This Suit):

(1) whether 2nd Plaintiff was White Knight for 1st Plaintiff and Project;

(2) whether Defendant had made certain representations to 1st and 2nd Plaintiffs (collectively "Plaintiffs");

(3) if Defendant had made certain representations to Plaintiffs:

(a) whether those representations had been made fraudulently. In this regard, can a non-disclosure of a material fact amount to fraud?; and

(b) whether there were negligent misstatements by Defendant to Plaintiff. Regarding this matter:

(i) did Defendant owe a duty of care to Plaintiffs?; and

(ii) if Defendant owed a duty of care to Plaintiffs, was Plaintiffs' loss "caused" in fact by Defendant's breach of duty of care?;

(4) whether Defendant had agreed to re-finance Project. In this regard, is a "Gentlemen's Agreement" enforceable in law?;

(5) whether Plaintiffs can set aside a judgment in default of appearance entered by Defendant on 22 November 2012 against, among others, 1st Plaintiff, in the Kuala Lumpur High court Suit No D22A-1270-10/2012 (Default Judgment) on the ground that Defendant had obtained Default Judgment by fraud under:

(a) section 44 of the Evidence Act 1950 (EA); and/or

(b) court's inherent jurisdiction pursuant to O 92 r 4 of the Rules of 2012 (RC).

In applying to set aside Default Judgment, are Plaintiffs required to comply with O 42 r 13 RC?;

(6) whether Plaintiffs can rely on:

(a) estoppel;

(b) Defendant's inequitable or unconscionable conduct;

(c) legitimate expectation on the part of Plaintiff which had been allegedly caused by Defendant's representations, letters and conduct; and/or

(d) Defendant's bad faith

- to maintain This Suit; and

(7) in respect of costs for This Suit, should court depart from the general rule that "costs to follow the event" (provided in O 59 r 3(2) RC)?

C. Plaintiffs' Case

[4] The following 6 witnesses testified for Plaintiffs in This Suit:

(1) Mr Cheng Wui Kiang (Mr Cheng);

(2) Dato' Wan Abu Bakar Wan Mohamed (Dato' Wan Abu Bakar);

(3) Dato' Dzulkiffli Ismail (Dato' Dzulkiffli);

(4) Datuk Yusof Abdul Rahman (Datuk Yusof);

(5) Mr V Sivadass (Mr Sivadass); and

(6) 2nd Plaintiff.

[5] Mr Cheng testified as follows, among others:

(1) Mr Cheng obtained his qualification as a valuer from Universiti Teknologi Malaysia (UTM) [Notes of Proceedings, Volume 1 (NOP Vol 1), 2 November 2015, pp 22-23]. Mr Cheng obtained his valuer's license from the Board of Valuers, Appraisers and Estate Agents (Board) in 2005 (NOP Vol 1, 2 November 2015, p 23);

(2) Mr Cheng is employed as a director in Henry Butcher Malaysia (Pontian) Sdn Bhd (Henry Butcher) since 2006 (NOP Vol 1, 2 November 2015, p 24);

(3) Mr Cheng has done about 80 to 100 market study reports (NOP Vol 1, 2 November 2015, p 25);

(4) Mr Victor Wong Woie Thing (Mr Wong), a director of 1st Plaintiff, had instructed Henry Butcher to do a market study report of the Project dated 12 December 2013, exh P1 (Henry Butcher's Report) [Common Bu