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2011 MarsdenLR 288
HIGH COURT, KUALA LUMPUR
ASEAMBANKERS MALAYSIA BERHAD & ANOR – Appellant
Versus
LIM CHENG ROW – Respondent
[Guaman No: D5-22-1128-2008]
Breach of contract obligations must be performed regardless of external market conditions if previously agreed terms are clear and valid service of notices is established.
Headnote:(A) Rules of the High Court 1980 - Orders 14A and 33 - Capital Market and Services Act 2007 - Sections 2(1) - Securities Commission Act 1993 - Sections 2(1) - Securities Industry (Central Depositories) Act 1991 - Sections 2(1) - Delivery of securities - Put and Call Option Agreement exercised within option period entitles plaintiffs to specific performance as obligations were clear and timely - Held that maturity and trading suspension of RCSN are irrelevant to defendant's obligations; specific performance granted as remedies are explicitly provided. (Paras 11-52)
Facts of the case:
Plaintiffs sought performance of a Put Option Agreement for redeemable convertible secured notes (RCSN) issued by a company and delivered notices to the defendant to exercise their rights within specified option periods. The defendant failed to perform these obligations after receiving notices.
Findings of Court:
Plaintiffs were able to cause delivery of the RCSN, and the notices were deemed validly served; thus, the defendant was obligated to complete the payment and receive the securities.
Issues: The key issues included whether the maturity and suspension of trading affected the defendant's ability to perform obligations and the validity of service of the Put Option Notice.
Ratio Decidendi: The court held that the underlying terms of the Put and Call Option Agreement governed the parties' obligations, and external issues such as maturity and suspension of trading do not exempt the defendant from these obligations. Notices were deemed duly served based on contract provisions, supporting the plaintiffs' claims.
Result: Plaintiffs entitled to specific performance of the Put Option Agreement, with costs awarded.
| Table of Content |
|---|
| 1. procedure for determining issues without a full trial. (Para 1 , 2 , 3) |
| 2. facts surrounding the option agreement and its execution. (Para 4 , 5 , 6 , 7 , 9 , 11) |
| 3. plaintiffs' arguments on commitments despite rcsn issues. (Para 14 , 15 , 16) |
| 4. defendant's contentions on obligations under the agreement. (Para 17 , 19 , 20) |
| 5. court's findings on the contractual obligations. (Para 22 , 23 , 31) |
| 6. conclusion on entitlement to specific performance. (Para 49 , 50) |
GROUNDS OF DECISION
[1] The parties agreed that the Plaintiffs' claim be disposed of by way of determination of the Questions or Issues jointly identified without a full trial of the action. The parties also agreed that the Court's determination of these questions or issues would be final as to the entire cause or matter between the parties. This procedure was arrived at during the case management process under Order 34 of the Rules of the High Court 1980 read together with Orders 14A and 33 rules 2 and 5.
[2] Quite aside from the position taken by the parties, I in fact, agree that the procedure adopted is both appropriate and suitable given the circumstances and conditions in this case. The Federal Court in Savant-Asia Sdn Bhd v. Sunway PMI-Pile Construction Sdn Bhd [2008] 2 MLRA 315 , [2009] 5 MLJ 754 , and the Court of Appeal inKerajaan Negeri Terengganu v. Petroliam Nasional Berhad & Anor [2003] 1 MLJ 260 and Seloga Jaya Sdn Bhd v. UEM Genesis Sdn Bhd [2007] 3 MLRA 381 ; [2007] 7 MLJ 385 ; [2008] 2 CLJ 686 have repeatedly said that the circumstances may present an appropriate case for disposal under the procedures found in Order 14A or Order 33 rules 2 and 5 of the Rules of the High Court 1980; that is where the case can be disposed on an issue determined by reference to the facts which are not in dispute. Although there is a slight difference between Orders 14A and 33 rules 2 and 5, that difference is not present here.
[3] The parties have further facilitated this method of disposal by preparing an Agreed Bundle of Documents marked as "Bundle A" and a "Statement of Agreed Facts". The latter containing much of the material and critical facts relevant for consideration of the Questions or Issues posed. The Court records its appreciation of the mature handling of the matter by two able and senior counsel who have advanced well-researched submissions on behalf of their respective clients.
Statement of Agreed Facts
[4] These were the agreed facts:
1. By a Call and Put Option Agreement dated 11.12.2002 (Option Agreement) entered into between the Defendant and the lenders set out in Schedule 1 of the Option Agreement (Lenders), including the 1st Plaintiff and Maybank Finance Berhad (MFB), the Defendant granted the irrevocable and unconditional right to each other Lender to require the Defendant to purchase from each Lender such portion of the Option 2002/2007 Redeemable Convertible Secured Notes (Option 2002/2007 RCSN) issued by Gula Perak Berhad (Put Option).
2. The Option Agreement, inter alia , provided for the following terms:
(a) The 1st Plaintiff and MFB may at any time during the Option Period (defined in the Option Agreement) require the Defendant to purchase from the 1st Plaintiff and MFB respectively such portion of the Option 2002/2007 calculated on the basis of the proportion which the Option 2002/2007 RCSN held by or for the account of the 1st Plaintiff and MFB respectively bear to the aggregate Option 2002/2007 RCSN, at the Option Price;
(b) The Option Price shall be RM1.00 for every Option 2002/2007 RCSN;
(c) The Put Option may be executed by the 1st Plaintiff and MFB at anytime and from time to time during the Option Period;
(d) The Option Period is the period of 14 days prior to the say falling on the expiry of the 5th anniversary from the date of issue of the Option 2002/2007 RCSN issued by Gula Perak Berhad;
(e) Any exercise of the Put Option by the 1st Plaintiff and MFB shall be by serving a Put Option on the Defendant;
(f) The sale and
