An agent is entitled to commission if proven to be the effective cause of a transaction, and corporate distinctions cannot shield a principal from payment obligations. Legal compliance does not invalidate obligation to compensate for services rendered.

Introduction

[1] The plaintiff's claim for real estate agency fees was allowed after a full trial. This Court found that the plaintiff was the effective cause for a tenancy agreement entered into between one of the defendant's subsidiary company and a special corporate vehicle set up by the party introduced by the plaintiff. Dissatisfied, the defendant appealed, and these are the full grounds for the decision made on 15 November 2024.

Plaintiffs Claim

[2] The plaintiff claims from the defendant real estate agency fees to the sum of RM 1,233,215.13 ("the Said Sum") made up of a sum of RM 1,163,410.50 being its commission plus a sum RM69,804.63 being the 6% GST to be paid within 14 days from the date of judgment together with interest thereon at 5% p.a. from the date the tenancy agreement between Daehan Rehabilitation Services Sdn Bhd ("Daehan") and Resort Villa Development Sdn Bhd ("Resort Villa") became unconditional, which is agreed to be 1 September 2019, until one day before the date of judgment, and interest at 5% p.a. on the judgment sum including pre-judgment interest calculated from the date of judgment until the date of full realization and costs.

[3] The Said Sum represents an amount equivalent to 1.5 months of the gross rental payable under a tenancy agreement made between Daehan and Resort Villa.

Agreed Facts

[4] Between the parties, the following facts are agreed:

i) The plaintiff is a company incorporated in Malaysia pursuant to the Companies Act 1965, and having its registered address at 39-2, 2nd Floor, Wisma CKL, Jalan 23/70A Desa Sri Hartamas, 50480 Kuala Lumpur; and

ii) The defendant, 101 Properties Group Bhd, is a public limited company incorporated in Malaysia pursuant to the Companies Act 1965.

Issues to be tried

[5] Although 8 issues were formulated by the parties to be tried, in my considered view they can be distilled into the following four main issues:

i) Pleadings - Whether the plaintiff's pleadings are sufficient to make out its cause of action;

ii) Certainty of contract - Whether the contract made between the plaintiff and the defendant is certain as to its terms, price and subject matter and contingent upon a tenancy agreement ("TA") being made between the defendant and Alih Venture Sdn Bhd ("Alih") or it can be one made between Daehan and Resort Villa; and

iii) Effective cause - Whether the plaintiff is the effective cause of the TA made between Daehan and Resort Villa;

iv) Illegality - Whether the contract, if any, is illegal, in breach of public policy, in breach of statute including the Valuers, Appraisers and Estate Agents Act 1981 ("the Act") and the Valuer, Appraisers and Estate Agents Rules 1986 ("the Rules").

i) Pleadings

[6] The defendant challenged the pleadings filed by the plaintiff as being insufficient for the following reasons:

i) lacking in setting out the entire terms of the contract, for not setting out whether it was wholly in writing or both oral and in writing or entirely oral, when did it come into existence;

ii) when were all the terms of the contract performed by the plaintiff as to entitle it to full payment;

iii) that there was no plea that the plaintiff was the effective cause of the TA made between Daehan and Resort Villa;

iv) that the words "effective cause" was not pleaded; and

v) that the defendant is to be liable if its subsidiary, Resort Villa, were to enter into the TA with Alih or Alih's subsidiary or a sister company of Alih. In other words that the defendant is to be liable even Resort Villa were to enter in