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2013 MarsdenLR 2748
COURT OF APPEAL PUTRAJAYA
PORT KELANG AUTHORITY – Appellant
Versus
KUALA DIMENSI SDN BHD – Respondent
[Civil Appeal No: B-02(IM)-722-2011]
A claim should not be struck out if it presents a reasonable cause of action, even if it appears weak, and dismissal should be based strictly on the pleadings.
Headnote:(A) Specific Relief Act 1950 - Section 30 - Application to strike out - Claim for rectification of instrument based on mutual mistake and fraud - High Court dismissed claim as unsustainable - Court emphasized the necessity to satisfy that the claim due to fraud or mistake must be pronounced clearly, otherwise the appellant's statement should not be dismissed purely based on its weaknesses. (Paras 22, 29, 30)
(B) Reasonable cause of action - Criteria established thus: All facts are assumed true and if a cause is disclosed, mere weakness does not suffice for dismissal. (Paras 26-30)
Facts of the case:
The appellant claimed improper interest imposition in a sale agreement with the respondent, alleging mutual mistake and related fraud, seeking various forms of relief including rectification of the sale agreement.
Findings of Court:
The high threshold for striking out claims was not met; several issues remain contested and warrant trial.
Issues: Whether the High Court was correct in concluding there was no reasonable cause of action given the claims of fraud and mutual mistake.
Ratio Decidendi: On an application to strike out under O 18 r 19(1), the court should not consider the merits or extrinsic evidence but only the pleadings; if a cause of action appears, dismissal is inappropriate.
Result: Appeal allowed; High Court order set aside and claim reinstated for further proceedings.
| Table of Content |
|---|
| 1. overview of the appellant’s appeal. (Para 1) |
| 2. factual background of the land transaction. (Para 2 , 3 , 4 , 5 , 6 , 11 , 12) |
| 3. valuations and offers related to land. (Para 7 , 8 , 9 , 10) |
| 4. claims regarding mutual mistake and fraud. (Para 13 , 15) |
| 5. allegations of fraud and mutual mistake. (Para 14 , 16 , 17) |
[1] The appellant's (plaintiff 's) appeal is against the decision of the learned High Court judge dismissing its claims against the respondent (defendant) on the ground that the claim is on the face of it obviously unsustainable.
[2] By reason of the nature of the appellant's claims against the respondent, we find it necessary to give the factual matrix of the matter in some detail.
[3] The respondent in 1998 offered to sell 400 acres of land to the appellant at the rate of RM28 per square foot. On or about 3 November 1998, a valuation of the land (land status was development and approved for industrial and commercial use) was carried out by 'Jabatan Penilaian dan Perkhidmatan Harta' (JPPH). JPPH valued and reported the rate of RM13.50 per square foot (with land reclaimed and without main access road and without infrastructure) and at the rate of RM17 per square foot (with land reclaimed and with main access road and with basic infrastructure).
[4] Thereafter in or around January 1999 the respondent offered to sell 830 acres of land to the appellant (with land reclaimed and with basic infrastructure and access road) to the Ministry of Transport at the rate of RM28 per square foot, which the respondent stated was negotiable.
[5] On or about 11 May 2000, a valuation carried out by JPPH of 830 acres of the land (land status was development and approved for industrial and commercial use) with land reclaimed and with access road and with basic infrastructure reported the rate of RM18.00 per square foot. The respondent requested for a value at the rate of RM23.50 or more to be considered on the same basis.
[6] JPPH reported that the value at the rate of RM25 per square foot may be considered for bonds issuance purpose even though the land value was only at the rate of RM21 per square foot.
[7] The rate of RM25 per square foot was derived at taking into consideration the land price was to be paid on a deferred payment basis, the respondent had requested inter alia for the repayment period of 10 to 15 years, no interest for the first and second years, payment of interest only for the third and fourth years and yearly repayment of the balance including interest for 6 to 11 years and balance duration of 10 or 15 years and the discounted cash flow method whereby the target rate was 8.25%, coupon rate was 6.0% and repayment term of 10 years.
[8] Following that, the Ministry of Transport informed the respondent that JPPH re-valued the land at the rate of RM25 per square foot based on special value and that the valuation was done based on terms of payment as requested for by the respondent. By the aforesaid letter, the Ministry of Transport sought the respondent's agreement on the new valuation rate of RM25 per square foot by JPPH based on special value and also the terms and conditions stated therein.
[9] By letter dated 5 October 2000, the respondent in response to the aforesaid Ministry of Transport's letter, stated its agreement to the valuation rate of RM25 per square foot.
[10] Thereafter, on 6 October 2000, the respondent proposed to sell a further 170 acres of the land to the Ministry of Transport on the same agreed terms.
[11] On or about 1 August 2001, a valuation of 999.29 acres of the land (land status was industrial) by JPPH for compulsory acquisition purposes was made at the rate of RM10.16 per square foot (with 500 acres reclaimed and the balance swampy and without main access road) and at the rate of RM20.57 per square foot (with land reclaimed and with infrastructure based on special value).
[12] The appellant subsequently agreed to purchase the land by its letter dated 6 November 2002 at the special value rate
