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2023 MarsdenLR 1905
HIGH COURT MALAYA KUALA LUMPUR
E TREND REALTY SDN BHD & ANOR – Appellant
Versus
GOLDEN HOPE FROZEN FOOD SDN BHD – Respondent
[Appeal Suit No: WA-12ANCVC-290-10/2022]
The court established that conditional sale agreements do not entitle agents to fees if conditions are unmet, and issues previously adjudicated are barred by res judicata.
Headnote:(A) Malaysian Estate Agency Standards 2020 - Paragraphs 4.2.4 and 4.2.6 - Appeal against striking out of counterclaim - The court addressed whether sale and purchase agreements were conditional or unconditional. The court found that the agreements were conditional and thus, the defendants were not entitled to the agency fees. (Paras 1, 4, 42, 46)
(B) Res Judicata - The court ruled that the issues raised in the defendants' counterclaim were previously adjudicated in a summary judgment application, rendering the counterclaim non-maintainable. (Paras 34, 36, 42)
Facts of the case:
The plaintiff entered into SPA Agreements for two lots of industrial land, which were conditional upon obtaining subdivision approval. The plaintiff paid part of the agency fees but later sought a refund when the approval was denied. (Paras 11-20)
Findings of Court:
The court upheld the Sessions Court's ruling that the SPA Agreements were conditional and that the defendants were not entitled to the full agency fees. (Paras 42-46)
Issues: The main issues included the nature of the agreements (conditional vs. unconditional) and the applicability of res judicata to the defendants' counterclaim. (Paras 1, 4)
Ratio Decidendi: The court reasoned that the SPA Agreements did not become unconditional due to unmet conditions, and the defendants' counterclaim was barred by res judicata as the same issues had been previously decided. (Paras 34, 42)
Result: Appeal dismissed with costs.
| Table of Content |
|---|
| 1. issues regarding conditionality of agreements (Para 1 , 4) |
| 2. plaintiff's position on agency fees (Para 6 , 24) |
| 3. court's ruling on summary judgment (Para 8 , 25 , 36) |
| 4. background facts of the case (Para 11 , 12 , 13 , 16 , 19 , 22) |
| 5. application of res judicata (Para 32 , 35 , 42) |
| 6. determination of spa agreements as conditional (Para 43 , 44 , 45 , 46) |
Introduction
[1] There are 2 issues in this appeal before me against a Sessions Court order striking out the appellants' / defendants' Counterclaim. The first issue is whether two sale and purchase agreements dated 18 October 2020 ["SPA Agreements"?] are conditional agreements as set out in para 4.2.4 of the Malaysian Estate Agency Standards 2020 ; or they are unconditional agreements as set out in paragraph 4.2.6 of the Malaysian Estate Agency Standards 2020 .
[2] Paragraph 4.2.4 of the Malaysian Estate Agency Standards 2020 reads as follows:
Where the Sale and Purchase agreement or Tenancy / Lease agreement is conditional, the estate agency fees(excluding disbursement) are due when the last of the conditions are met ie when the agreement becomes unconditional.
[Emphasis Added]
[See Enclosure. 3 Record of Appeal Part B, Vol 2(A), p 185 (PDF page 203)]
[3] Paragraph 4.2.6 of the Malaysian Estate Agency Standards 2020 reads as follows:
If the Client to the firm aborts the deal either after signing of an unconditional Sale and Purchase Agreement or Tenancy / Lease agreement of after a conditional agreement becomes unconditional,then the firm is entitled to the full estate agency fee plus all disbursements.
[Emphasis Added]
[See Enclosure 3 Record of Appeal Part B, Volume 2(A), p 186 (PDF p 204)]
[4] The second issue is as follows. As the Sessions Court had granted summary judgment for the refund of the estate agency fees to the respondent / plaintiff in its suit against the appellants / defendants on the ground that the SPA Agreements were conditional agreements, was the Sessions Court correct in subsequently striking out the appellants' / defendants' Counterclaim for the balance of the unpaid estate agency fees on the ground of res judicata.
[5] Parties will be cited as they were cited at the Sessions Court. The appellants will be referred to as defendants. The respondent as plaintiff.
[6] The plaintiff buyer contends the SPA Agreements were conditional agreements and because the conditions were not met the defendants, who were the real estate agents, were not entitled to the estate agency fees as the SPA Agreements did not become unconditional.
[7] According to counsel, para 4.2.4 of the Malaysian Estate Agency Standards 2020 has not been decided by the courts.
[8] The Sessions Court on 23 September 2022 had ruled in favour of the plaintiff in its striking out application under O 18 r 19 Rules of Court 2012 of the defendants' counterclaim on the ground of res judicata.
[9] The defendants had appealed to me. I heard the appeal on 24 March 2023 and 23 June 2023. I dismissed the appeal on 23 June 2023.
[10] The defendants have now filed an appeal to the Court of Appeal. These are my Grounds of Judgment.
Background Facts
[11] The plaintiff is a company which carries out business in the nature of importing and exporting meat products.
[12] The 1st defendant is a real estate property agency whereas the 2nd defendant is an agent working at the 1st defendant's company.
[13] The 1st defendant and/or the 2nd defendant were appointed as property agents to sell the following 2 lots of industrial land belonging to Suong Sdn Bhd ("Vendor"):
(a) Geran 41063, Lot 46915, Bandar Selayang, Daerah Gombak, Negeri Selangor with an area of 48,220 square feet ("Lot 1"); and
(b) Geran 41063, Lot 46915, Bandar Selayang, Daerah Gombak, Negeri Selangor with an area of 24,959 square feet ("Lot 2").
[14] The 2 lots were part of a piece of land which the Vendor intended to subdivide from a master title, known as Geran No 41063, Lot 46915, Bandar Selayang, Daerah Gombak, Negeri Selangor. [See e
