Gopal Sri Ram JCA:-

The plaintiffs (appellants before us) brought an action against the defendant (respondent before us) for breach of contract. The defendant applied to strike out the statement of claim on the ground that the first plaintiff was not privy to the contract as asserted by the plaintiffs. It also delivered a defence and counterclaim. The High Court granted the defendant's application and struck out the statement of claim. The counterclaim was directed to be separately tried. The trial of the counterclaim is set for hearing and disposal on 11 January 2006. Dissatisfied with the High Court's order of striking out the statement of claim the plaintiffs appealed to this Court. We heard this appeal on 21 November 2005 and allowed it. We did not give reasons at once. Ordinarily a case such this would not warrant a judgment because the principles governing applications to strike out a pleading are trite and each case really turns on its own peculiar facts. But this case has a company law dimension to it which is of interest to the legal profession. So, a judgment is called for. The facts are fairly straightforward.

The defendant company owns a golf course. Members of the public have to pay a fee to play on the course. The second plaintiff was the sole proprietor of a firm called LH Wong & Associates. There is no dispute that there is a contract and that it is evidenced by a letter dated 30 October 1999. That letter was written on a letterhead that read "The Golf Cheque Book". It was a term of the contract that a sum of RM80,000 was to be paid to the defendant. In return the defendant was to allow persons producing golf cheques issued to them by the firm to use the course. The letter in question was signed on the defendant's behalf accepting the terms. It was also signed by one Md. Ibrahim A Karim under whose signature appear the typewritten words "for The Golf Cheque Book". It is common ground that no such entity as "The Golf Cheque Book" existed at the date of the contract. In fact, a private limited company called The Golf Cheque Book Sdn Bhd, that is to say, the first plaintiff was incorporated only on 23 March 2000, some five months after the contract was made. It is also in evidence that the first plaintiff made payments to the defendant from time to time. The defendant's case is that it was not aware that the first plaintiff was not in existence at the time the contract was made. After it discovered this fact, it returned the payments made by the plaintiff. For completeness I must mention that a resolution of the first plaintiff's board of directors was passed on 3 March 2000 whereby it was resolved that the plaintiff takes over the product known as The Golf Cheque Book business from the firm.

The issue whether there was a valid, binding and enforceable contract between the first plaintiff and the defendant turns upon the interpretation of the facts surrounding the making of the contract and the application of s. 35(1) of the Companies Act 1965 . In my judgment the first is a question that may require viva voce evidence. At any rate both the first and the second call for careful and mature argument and judicial consideration. At the invitation of the defendant the learned judge appears to have undertaken a microscopic examination of the facts and made specific findings upon the material presented to him. In short, there appears to have been a trial on affidavits before him. This in my very respectful view is an incorrect approach in a case as the present. My reasons for this view now follow.