Abdul Wahab Patail JCA (delivering judgment of the court):

[1]The appellants (‘Lin Wen Chih and Lin Wen Chuan’) appealed to this court against the decision of the High Court given on 3 September 2010 where the appellants’ claim against the respondent (‘Mycom Bhd’) was dismissed with costs.

[2]Below is the summary of the appellants’ pleaded case reproduced from the written submission for the appellants:

(a)the appellants were, at all material times, the registered and beneficial shareholders of 18,862,000 shares in a company known as Veramax Sdn Bhd (‘Veramax’);

(b)the appellants agreed to sell 12,750,000 of those shares, representing 51% of the paid up capital of Veramax to the respondent (‘the said sale’) for a purchase consideration of RM55,000,000 (‘the said purchase price’);

(c)the said sale is reflected in a share sale agreement dated 1 March 1996 (‘the said share sale agreement’);

(d)cl 3.1 of the said share sale agreement stipulated certain obligations to be fulfilled by the appellants as a pre-condition to payment of the said purchase price (‘the said obligations’);

(e)the appellants did perform the said obligations; simultaneous to the execution of the said share sale agreement, the appellants were asked to sign the following two documents:

(i)a letter dated 1 March 1996 from the appellants to one Liu He Tian (‘Liu’) wherein the appellants agreed to accept, in lieu of the said purchase price, the transfer of shares listed of six companies to them (‘the said consideration shares’)(‘the first supplementary agreement’); and

(ii)a document entitled ‘acknowledgement receipt’ whereby the appellants (purportedly) acknowledged receipt of the said purchase price towards full and final settlement of the said sale (‘the said acknowledgment’).

(f)as the first supplementary agreement and the said acknowledgment of receipt (‘the said two agreements’) were not explained to them and as they were Taiwanese nationals who are not able to speak, read or write English and did not understand the import and meaning of same, the appellants pleaded non-est factum in respect of the first supplementary agreement and the said acknowledgement of receipt;

(g)alternatively, the appellants pleaded they were induced by the representations of the director of the respondent, one Dato’ Yap Yong Song and one Ng Sing Hua, the respondent’s corporate advisor, that they would receive the said purchase price upon execution of the said two agreements;

(h)the respondent was in breach of the said share sale agreement, particularly cl 2.0 thereof, in failing to make payment of the said purchase price to the appellants;

(i)alternatively, Liu did not deliver to the appellants the said consideration shares and the duly executed share transfer forms and in the circumstances, the said purchase price was still due and owing from the respondent to the appellant;

(j)the respondent also failed to make payment of RM3,295,453 pursuant to cl 11.2 of the said share sales agreement to the appellants; and

(k)in the circumstances, there was a total failure of consideration of the said share sale agreement.

[3]The appellants sought, inter alia, the following remedies:

(a)a declaration that from the failure to pay the purchase price of RM55,000,000 there was a failure of consideration and the appellants were entitled to the return of their shares;

(b)alternatively, from the failure of Liu He Tian to deliver to the appellants the consideration shares and executed share transfer forms therefor, there was a failure of consideration and the appellants were entitled to the return of their shares; and

(c)alternatively, damages.

[4]For convenience, we adhere to the references used in the appellants’ summary.

[5]From the foregoing, the key components that need to be addressed are:

(a)non est factum; and/or

(b)total failure of consideration.

FINDINGS OF TRIAL COURT AND APPEALS THEREON

[6]The appeal before us involved findings of fact. It concerns judicial appreciation of the facts. In Lee Ing Chin @ Lee Teck Seng