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1987 MarsdenLR 841

SUPREME COURT (KUALA LUMPUR)

LEE HUN HOE, CJ (BORNEO), WAN SULEIMAN, J AND WAN HAMZAH, SCJJ

EASTERN & ORIENTAL HOTEL (1951) SDN BHD
versus
ELLARIOUS GEORGE FERNANDEZ

CIVIL APPEAL NO 487 OF 1986

Decided On : 10-14-87

Advocates:
Raja Abdul Aziz Addruse (PR Maneksha with him) for the appellant.
Sri Ram (P Navaratnam and V Sithambaram with him) for the first respondent.
Ranjit Singh for the second respondent.
Solicitors: VP Nathan & Partners; Kumar Sitham & Co; Jagjit Singh & Co.

Wan Hamzah SCJ

(delivering the judgment of Lee Hun Hoe CJ (Borneo) and himself): The first respondent/plaintiff had alleged that he had been induced by false and fraudulent misrepresentations by Mr Mahesan, solicitor acting for and on behalf of the appellant, to vacate a shop where he was running a hair-dressing saloon and of which he was a lawful tenant of the appellant. His claim was for certain declarations and for damages including exemplary damages for fraud.

Briefly, the first respondent alleged that sometime in April 1984 the appellant had expressed an intention to obtain vacant possession of the premises earlier mentioned. The appellant then instructed Mr Mahesan to act on its behalf and, inter alia, to negotiate with the first respondent in order to obtain vacant possession. On 28 April 1984, Mr Mahesan allegedly made oral representation to the first respondent that the appellant would pay $170,000 to him if he would close down his business and deliver vacant possession on or before July 1984. Acting in belief of such representation by Mr Mahesan, the first respondent had on or about 30 July 1984 taken steps to close down his business at the premises, whilst retaining possession of the key to the main door.

The first respondent contended that the representation made by Mr Mahesan was made falsely and fraudulently and for the purpose of only causing him to close down his business and lock up the premises so that the appellant could unlawfully break into the premises and take unlawful possession thereof. In the alternative, the first respondent contended that the alleged oral representation made by Mr Mahesan constituted a collateral contract or warranty by the appellant operating as a condition precedent upon the strength of which the first respondent had acted to his detriment.

He therefore claimed that the refusal by the appellant to pay compensation for damages amounted to a breach of the term of the collateral contract or warranty, so that the condition precedent to his giving up vacant possession had failed. He also claimed for exemplary damages.

The substance of the defence was that the first respondent had vacated the premises voluntarily because business was poor. The appellant had stated in his defence that the first respondent was in arrears of rental in consequence of which he had received a notice to quit on 27 April 1984 and that his closing down of the premises was in compliance with such notice. The appellant also denied that it or its solicitors had promised the first respondent to pay $170,000 or any sum as compensation.

We agree with Raja Aziz that the main issue before the judge is:

(1) whether the alleged false and fraudulent misrepresentation has been made by the appellant's solicitor, Mahesan, and in that connection whether the first respondent was induced thereby to vacate the premises, and

(2) depending on this court's view of the representation, whether there had been a collateral contract or warranty.

Since the representation was oral the reasons for preferring the evidence of the first respondent to that of Mahesan, added Raja Aziz, was of great importance.

It is trite law that an appellate court would in appropriate cases act upon its own view of conflicting evidence (see Coghlan v Cumberland [1898] 1 ChD 704 and Bigsby v Dickinson (1876) 4 ChD 24) and it was argued on behalf of the appellant that the judge had overlooked certain evidence which might otherwise have caused him to come to a different finding. damaged ceiling. The first respondent claimed that he had only been trying to remove things which he had originally installed. That the first respondent was not running a thriving business can hardly be disputed. Apart from Mr Hepworth's observation on his general lack of customers, even the first respondent admitted that his average monthly earnings was $400 a month. Then there is the undeniable fact that he was often in arrears of rent for which he received notices from time to time. Wo

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