Leong Wai Hong JC:

Judgment

Introduction

[1]There are 2 issues in this appeal before me against a Sessions Court order striking out the appellants’ / defendants’ Counterclaim. The first issue is whether two sale and purchase agreements dated 18-10-2020 [“SPA Agreements”] are conditional agreements as set out in paragraph 4.2.4 of the Malaysian Estate Agency Standards 2020; or they are unconditional agreements as set out in paragraph 4.2.6 of the Malaysian Estate Agency Standards 2020.

[2]Paragraph 4.2.4 of the Malaysian Estate Agency Standards 2020 reads as follows :-

Where the Sale and Purchase agreement or Tenancy / Lease agreement is conditional, the estate agency fees (excluding disbursement) are due when the last of the conditions are met i.e. when the agreement becomes unconditional.

(Emphasis added) [See Enclosure. 3 Record of Appeal Part B, Vol 2(A), page 185 (PDF page 203)]

[3]Paragraph 4.2.6 of the Malaysian Estate Agency Standards 2020 reads as follows :-

If the Client to the firm aborts the deal either after signing of an unconditional Sale and Purchase Agreement or Tenancy / Lease agreement of after a conditional agreement becomes unconditional, then the firm is entitled to the full estate agency fee plus all disbursements.

(Emphasis added) [See Enclosure. 3 Record of Appeal Part B, Volume 2(A), Page 186 (PDF page 204)]

[4]The second issue is as follows. As the Sessions Court had granted summary judgment for the refund of the estate agency fees to the respondent / plaintiff in its suit against the appellants / defendants on the ground that the SPA Agreements were conditional agreements, was the Sessions Court correct in subsequently striking out the appellants’ / defendants’ Counterclaim for the balance of the unpaid estate agency fees on the ground of res judicata.

[5]Parties will be cited as they were cited at the Sessions Court. The appellants will be referred to as defendants. The respondent as plaintiff.

[6]The plaintiff buyer contends the SPA Agreements were conditional agreements and because the conditions were not met the defendants, who were the real estate agents, were not entitled to the estate agency fees as the SPA Agreements did not become unconditional.

[7]According to counsel, paragraph 4.2.4 of the Malaysian Estate Agency Standards 2020 has not been decided by the courts.

[8]The Sessions Court on 23-09-2022 had ruled in favour of the plaintiff in its striking out application under O 18 r 19 Rules of Court 2012

[9]The defendants had appealed to me. I heard the appeal on 24-03-2023 and 23-06-2023. I dismissed the appeal on 23-06-2023.

[10]The defendants have now filed an appeal to the Court of Appeal. These are my Grounds of Judgment.

Background Facts

[11]The plaintiff is a company which carries out business in the nature of importing and exporting meat products.

[12]The 1^st defendant is a real estate property agency whereas the 2^nd defendant is an agent working at the 1^st defendant’s company.

[13]The 1^st defendant and/or the 2^nd defendant were appointed as property agents to sell the following 2 lots of industrial land belonging to Suong Sdn Bhd (“Vendor”) :-

(a)Geran 41063, Lot 46915, Bandar Selayang, Daerah Gombak, Negeri Selangor with an area of 48,220 square feet (“Lot 1”) and

(b)Geran 41063, Lot 46915, Bandar Selayang, Daerah Gombak, Negeri Selangor with an area of 24,959 square feet (“Lot 2”).

[14]The 2 lots were part of a piece of land which the Vendor intended to subdivide from a master title, known as Geran No. 41063, Lot 46915, Bandar Selayang, Daerah Gombak, Negeri Selangor. [See Enclosure 3 Record of Appeal Volume 2A pages 105 and 128 Recital C to E].

[15]At the material time, the layout plan for subdivision of the lots was still at the planning stage and was pending approval by the relevant authority. [See Enclosure 3 Record of Appeal Volume 2A pages 105 and 128 Recital C to E].

[16]The plaintiff agreed to buy Lot 1 and Lot 2 and had entered into the SPA Agreements with the Vendor, subject to the approval of