1. ) JEGATHESAN A/L JEGASOTHY 2. ) SIVALALITA A/P MANICKAVASAGAR v 1. ) LOW CHEE WEE 2. ) LOW SOOK YING 3. ) MONDAY - OFF MARKETING SDN. BHD.

Case Significance

Illustrates the limits of summary striking out under Order 18 rule 19 of the Rules of Court 2012, the court allowing a property-purchase dispute involving a friendly loan and a wound-up developer to proceed to trial where the existence of a binding contract turned on contemporaneous conduct and oral evidence.

This High Court decision refuses an application to strike out a suit arising from the purchase of a property unit, holding that the dispute raised triable issues fit for trial. The plaintiffs alleged that in 2012 they were introduced to the first defendant, who needed funds for a development undertaken by the third defendant company, and that they were offered a unit said to be worth RM1.5 million for RM1 million, paying RM700,000 to the individual defendants as a friendly loan and RM300,000 to the developer as a booking fee and part of the purchase price. A friendly loan agreement and a sale and purchase agreement were executed, and the developer issued a letter confirming the reduced price. When vacant possession was not delivered and the plaintiffs later discovered that the developer had been wound up and their names did not appear as owners, they sued, pleading causes of action including unjust enrichment, constructive trust, breach of fiduciary duty, misrepresentation, knowing receipt and dishonest assistance. The defendants applied under Order 18 rule 19 of the Rules of Court 2012 to strike out the claim, contending that ownership had been resolved by the joint liquidators' list of purchasers. Applying the settled principle that striking out is confined to plain and obvious cases and is not to be used to resolve contested facts on affidavit, the court held that the pleadings disclosed a genuine cause of action that was neither frivolous nor vexatious nor an abuse of process. Whether a binding contract existed between the parties turned on the contemporaneous conduct and the consideration exchanged — matters that, following authority such as Cipta Cermat, required oral evidence at trial and could not be resolved on a contest of affidavits, and section 92 proviso (b) of the Evidence Act 1950 might admit oral terms where a document was silent. The court accordingly dismissed the striking-out application with costs of RM3,000. The judgment illustrates the limits of summary striking out where genuine factual disputes exist.