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2025 MarsdenLR 1704
HIGH COURT MALAYA SHAH ALAM
DATO SUHAIMY OTHMAN – Appellant
Versus
INFINITY TRUSTEE BERHAD & ANOR – Respondent
[Civil Suit No: BA-22NCVC-133-03/2022]
A party cannot enforce a contractual promise and obtain remedies for its breach if not a party to the contract, consistent with the doctrine of privity of contract.
Headnote:(A) Contract Act - Section 74(1) - Breach of Investment Agreements - Plaintiff alleges breach of agreements and misrepresentation by defendants; claim dismissed - Evidence insufficient to establish privity of contract between plaintiff and defendants - Plaintiff bound by the terms of agreements with Asia Cornerstone only - Misrepresentation not proven; plaintiff well-informed of investment - Defense upheld due to lack of contractual obligation towards plaintiff. (Paras 43-56)
Facts of the case:
Plaintiff invested RM1,000,000.00 in Short-Term Notes via agreements with Asia Cornerstone, not involving the defendants, and alleged they misrepresented information leading to a breach. (Paras 11-31)
Findings of Court:
The agreements were held valid; defendants not parties to them, thus could not be held liable. (Paras 36-46)
Issues: Did the defendants have a binding contract with the plaintiff or misrepresentations? (Paras 44-55)
Ratio Decidendi: Plaintiff's claims dismissed as he failed to prove the necessary relationship or misrepresentation by defendants; emphasized doctrine of privity of contract. (Paras 46-56)
Result: Plaintiff's claim dismissed with costs awarded to defendants.
| Table of Content |
|---|
| 1. parties involved and their roles (Para 1 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. details of plaintiff's investment and agreements (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31) |
| 3. defendants' defenses to the claim (Para 33) |
| 4. court's assessment and validity of agreements (Para 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41) |
| 5. pleadings and evidence rules (Para 42 , 43) |
| 6. privity of contract doctrine and claims (Para 44 , 45 , 46) |
| 7. misrepresentation claims and burden of proof (Para 48 , 49 , 50 , 51 , 52 , 53 , 54) |
| 8. judgment and outcome (Para 56) |
Introduction
[1] Plaintiff's cause of action against Defendants was for an alleged breach of Subscription Agreements between Plaintiff and Asia Cornerstone Asset Management Company Limited (Asia Cornerstone). Plaintiff further contended misrepresentation by the 2nd Defendant, resulting in Plaintiff investing in the scheme and not receiving payments as scheduled.
[2] After hearing witnesses from both parties, on the balance of probabilities, I have dismissed Plaintiff's claim with cost to the Defendants.
[3] Plaintiff has now appealed to the Court of Appeal, and my reasons are below.
The Parties
[4] Plaintiff is an individual engaged in various enterprises before his retirement and had participated in several investment schemes.
[5] Plaintiff and the 2nd Defendant have known each other for a period of time, as the 2nd Defendant's brother was previously employed by Plaintiff.
[6] The 1st Defendant is a trustee company incorporated in Malaysia, specializing in trust and fund-related matters.
[7] The 1st Defendant was appointed by Asia Cornerstone to act as a trustee, and the 1st Defendant's role was to facilitate the receipt of investment funds from investors in Malaysia and subsequently transfer these funds to Asia Cornerstone in Hong Kong.
[8] Asia Cornerstone was a licensed asset management company with the Securities and Futures Commission, the financial regulatory authority of Hong Kong.
[9] The 2nd Defendant was employed as a Relationship Manager with The Rain Maker Mgmt Sdn Bhd (Rain Maker). The 2nd Defendant's responsibilities included engaging with potential investors and promoting investment schemes.
[10] Rain Maker is a company incorporated in Malaysia that focuses on marketing and promoting investment schemes to potential investors in Malaysia. Asia Cornerstone appointed Rain Maker as its marketing agent in Malaysia to promote its investment products to potential investors.
Salient Facts
Plaintiff's Case
[11] Asia Cornerstone holds investments in MyFiziq Limited, a company listed on the Australian Stock Exchange, and to fund its investments, Asia Cornerstone issued a debt instrument known as the Short-Term Note.
[12] Rain Maker was the marketing agent for Asia Cornerstone and was tasked with seeking interested investors to subscribe to the Short-Term Note.
[13] On or around May 2020, the 2nd Defendant invited Plaintiff to subscribe to the Short-Term Note issued by Asia Cornerstone.
[14] During multiple meetings between the Plaintiff and the 2nd Defendant, the 2nd Defendant testified that she had adequately explained the details of the Short-Term Note to the Plaintiff.
[15] Subsequently, on 20 May 2020, Plaintiff, at his own will, signed a Subscription Form to subscribe to the Short-Term Note in the amount of RM150,000.00.
[16] The following day (21 May 2020), Plaintiff signed another Subscription Form to subscribe to the Short-Term Note in the amount of RM850,000.00, totalling RM1,000,000.00.
[17] The purpose of the Subscription Form was to authorize Asia Cornerstone to use, process, and disclose Plaintiff's personal information to any third party to facilitate the subscription request and for CTOS checking. This authorization is noted at the bottom of both Subscription Forms signed by the Plaintiff.
[18] On the day Plaintiff signed the Subscription Forms, Plaintiff also issued two cheques for RM150,000.00 and RM850
