WONG KIAN KHEONG JC

JUDGMENT

(after trial)

A. Introduction

[1]This case is novel because I am not able to find a previous Malaysian court decision wherein a “White Knight” of a failed commercial project had claimed for, among others, loss of profit for the doomed project, from the project’s financier.

[2]The second plaintiff (2^nd Plaintiff), an Indonesian businessman with a Singapore passport, claimed to be a White Knight who had allegedly rescued a mixed development project in Johor Bahru (JB), “Suria Development Project” (Project). The Project was developed by first plaintiff company (1^st Plaintiff) and financed by defendant company (Defendant), a co-operative society registered under the Co-operative Societies Act 1993 which has power to grant loans under s 14(1)(a)Bank Kerjasama Rakyat Malaysia Berhad (Special Provisions) Act 1978

B. Issues

[3]The following questions, among others, arise in this suit (This Suit):

(1)whether 2^nd Plaintiff was White Knight for 1^st Plaintiff and Project;

(2)whether Defendant had made certain representations to 1^st and 2^nd Plaintiffs (collectively “Plaintiffs”);

(3)if Defendant had made certain representations to Plaintiffs -

(a)whether those representations had been made fraudulently. In this regard, can a non-disclosure of a material fact amount to fraud?; and

(b)whether there were negligent misstatements by Defendant to Plaintiff. Regarding this matter –

(i)did Defendant owe a duty of care to Plaintiffs?; and

(ii)if Defendant owed a duty of care to Plaintiffs, was Plaintiffs’ loss “caused” in fact by Defendant’s breach of duty of care?;

(4)whether Defendant had agreed to re-finance Project. In this regard, is a “Gentlemen’s Agreement” enforceable in law?;

(5)whether Plaintiffs can set aside a judgment in default of appearance entered by Defendant on 22.11.2012 against, among others, 1^st Plaintiff, in the Kuala Lumpur High Court Suit No. D22A-1270-10/2012 (Default Judgment) on the ground that Defendant had obtained Default Judgment by fraud under –

(a)s 44 of the Evidence Act 1950 (EA); and/or

(b)Court’s inherent jurisdiction pursuant to O 92 r 4 of the Rules of Court 2012 (RC).

In applying to set aside Default Judgment, are Plaintiffs required to comply with O 42 r 13 RC?;

(6)whether Plaintiffs can rely on –

(a)estoppel;

(b)Defendant’s inequitable or unconscionable conduct;

(c)legitimate expectation on the part of Plaintiff which had been allegedly caused by Defendant’s representations, letters and conduct; and/or

(d)Defendant’s bad faith

- to maintain This Suit; and

(7)in respect of costs for This Suit, should Court depart from the general rule that “costs to follow the event” (provided in O 59 r 3(2) RC)?

C. Plaintiffs’ case

[4]The following 6 witnesses testified for Plaintiffs in This Suit:

(1)Mr. Cheng Wui Kiang (Mr. Cheng);

(2)Dato’ Wan Abu Bakar bin Wan Mohamed (Dato’ Wan Abu Bakar);

(3)Dato’ Dzulkiffli bin Ismail (Dato’ Dzulkiffli);

(4)Datuk Yusof Abdul Rahman (Datuk Yusof);

(5)Mr. V. Sivadass (Mr. Sivadass); and

(6)2^nd Plaintiff.

[5]Mr. Cheng testified as follows, among others:

(1)Mr. Cheng obtained his qualification as a valuer from Universiti Teknologi Malaysia (UTM) [Notes of Proceedings, Volume 1 (NOP Vol. 1), 2.11.2015, p. 22-23]. Mr. Cheng obtained his valuer’s license from the Board of Valuers, Appraisers and Estate Agents (Board) in 2005 (NOP Vol 1, 2.11.2015, p. 23);

(2)Mr. Cheng is employed as a director in Henry Butcher Malaysia (Pontian) Sdn. Bhd. (Henry Butcher) since 2006 (NOP Vol 1, 2.11.2015, p. 24);

(3)Mr. Cheng has done about 80 to 100 market study reports (NOP Vol 1, 2.11.2015, p. 25);

(4)Mr. Victor Wong Woie Thing (Mr. Wong), a director of 1^st Plaintiff, had instructed Henry Butcher to do a market study report of the Project dated 12.12.2013, exhibit P1 (Henry Butcher’s Report) [Common Bundle of Documents Volume 3 (CBD 3), p. 570-593] (NOP Vol 1, 2.11.2015, p. 27). Mr. Cheng had prepared Henry Butcher’s Report (NOP Vol 1, 2.11.2015, p. 30);

(5)Mr. Cheng stated that he only did a market study and did n