Syed Agil Barakbah SCJ:

[1] In the Commercial Division of the High Court, Kuala Lumpur, the respondent/plaintiff claimed the sum of $960,000 from the appellant/defendant as the brokerage fee or commission of 3% of the total purchase price of real property known as Block 8 Keratong in the State of Pahang (Block 8) which the appellant purchased from the registered owner as a result of the alleged professional services of the respondent as broker. The trial Judge gave judgment for the respondent not for the full amount claimed but for the sum of $460,000 calculated at 2% of the total purchase price. The appellant being dissatisfied with the said decision, has now appealed. There is also a cross-appeal by the respondent for the inclusion of the award of interest at 8% per annum with effect from March 19, 1981 till the date of judgment which the learned Judge has omitted to award.

[2] Originally the appellant filed six grounds of appeal, but later abandoned the first three grounds leaving Grounds 4, 5 and 6 for argument.

[3] The relevant facts as accepted by the learned Judge were that sometime in 1976 Yayasan Islam, Melaka (Yayasan), wanted to purchase landed property. The Chairman of the Yayasan was the then Chief Minister of Melaka (DW1). According to the respondent's General Manager (PW1), he was contacted by DW1 to observe the condition of an estate known as Tar Ga as Yayasan intended to buy it on a joint venture with Dunlop Company and others. PW1 accordingly visited Tar Ga with an official from Dunlop. They also visited a neighbouring estate, Block 8, and on their return PW1 informed DW1 that Block 8 which was for sale was more suitable than Tar Ga from the point of view of purchase. DW1 then requested him to find out the owner and further details regarding Block 8. PW1 took about one year to trace and approach the owner's representative in the person of David Tan, the Assistant Manager of United Malayan Banking Corporation. PW1 arranged a meeting to introduce Dunlop's representative to UMBC and thereafter negotiations were held by the two parties. PW1's involvement ended at that stage.

[4] According to DW1, as Chairman of Yayasan, he had a team which advised him before a decision was made to buy Block 8 for Yayasan. On financial matters, he contacted Datuk Salleh, the General Manager of Malaysian International Merchant Banking and in terms of management, Dunlop had agreed to help Yayasan. The team met to consider matters and finally Block 8 was purchased for $23 million. The respondent, however, had not been paid their broker's commission as claimed. DW1, on the other hand, was of the opinion that PW1 should be paid by Yayasan for the agronomic advice and not for brokerage and a reasonable fee would be between $30,000 to $40,000. The reason for this was because at the material time the appellant was still not in existence and if there was any contractual relationship it was between Yayasan and the respondent. It seemed that the appellant was set up subsequently as a joint venture company by Yayasan, Dunlop, Melaka SEDC and Melaka Islamic Religious Council, holding a total of 9,999,998 shares with a view to combining and developing estates for economic and commercial purposes. Be that as it may, the trial Judge having perused the evidence at the trial came to the following conclusion:

"... This claim has been brought against Pembangunan Mahamurni Sdn Bhd But, and it is clear that this company had not been formed at the time of the sale and the efforts of attending to it. It is therefore clear that this claim is without foundation as how can a person perform an act before he is born. Nevertheless here we see that DWI unequivocally stated that the Defendant had adopted all acts and action that were taken on its behalf earlier by members of the team who bought Block 8 (p 36). In point of law it is clear that such conduct is evidence of ratification (see McLean v. Dunn 4 Bing 721 p 947 and ss 149, 150 of Contracts Act). And i