Internatonal Islamic University Malasia V Omar Bin Jamaluddin & 2 Ors.

  

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THE HIGH COURT OF MALAYA AT KUALA LUMPUR

 

(COMMERCIAL DIVISION) SUIT NO: D-22-687-2009

 

INTERNATONAL ISLAMIC UNIVERSITYMALASIA

 

V

 

OMAR BIN JAMALUDDIN & 2 ORS.

 

GROUNDS OF JUDGMENT

 

Enclosure 13

 

Enclosure 13 is the Plaintiff’s application for summary judgment pursuant to Order 14 Rules of the High Court 1980 against the 1sr and 2nd Defendants for the following:-

 

1) the sum of RM486,298.54 with interest at the rate of 8% per annum to be calculated from 7.1.2009 till date of realization; and

 

2) cost.

 

Brief facts

 

The Plaintiff granted a full pay study leave with salary and scholarship to the 1st Defendant to pursue his PhD in Architecture at the University of Newcastle in the United Kingdom. A Study Leave Agreement dateD 9.3.2001 was executed between the Plaintiff and the 1st Defendant as

 

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well as the 2nd and the 3rd Defendants as the Sureties (exhibit MM-1) which provides as follows:-

 

‘..the UNIVERSITY has agreed to grant the ASSISTANT LECTURER/LECTURER financial assistance to pursue the COURSE and the ASSISTANT LECTURER/LECTURER has at the request of the SURETIES agreed to pursue the COURSE and thereafter if required by the UNIVERSITY to serve the UNIVERSITY for a period of seven (7) years( hereinafter called “the period of COMPULSORY SERVICE”) and the SURETIES hereto have agreed jointly and severally, to guarantee the due performance by the ASSISTANT LECTURER/LECTURER of the obligations and duties of the ASSISTANT LECTURER/LECTURER under this Agreement.”

 

The prescribed time to complete the Course as described under the Study Agreement is thirty-six (36) months commencing from 9.4.2001.

 

Clause 1(a) (vi) of the Study Leave Agreement further provides that the 1st Defendant shall,

 

“upon completion of the COURSE serve the UNIVERSITY a period of COMPULSORY SERVICE commencing from the date of the completion of the COURSE or upon his return to Malaysia whichever may be later in such post at such salary as may be determined by the UNVERSITY in accordance with the scale of salaries for the time being in force and upon such terms and conditions for the time being usually applicable to such post;

 

PROVIDED THAT the period of COMPULSORY SERVICE shall not in any case be less than seven (7) years.”

 

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The 1st Defendant however did not complete the course and vide a letter dated 25.7.2006 (MM-2) gave one month notice to the Plaintiff of his intention to resign effective from the 25.7.2006. He had also attached his proposal to settle his debt with the Plaintiff. In its letter to the 1st Defendant the Plaintiff requested that the 1st Defendant reimburse the sum of money expended by the Plaintiff for his full-pay study leave to pursue his PhD in Architecture at the University of Newcastle, UK. Clause 5(c) of the Study Agreement stipulates that if the 1st Defendant,

 

“..resigns or leaves the service of the UNIVERSITY as designated by the UNIVERSITY to serve, in breach of Clausel (a) (vii) of this Agreement;

 

the ASSISTANT LECTURER/LECTURER and the SURETIES HERETO shall be jointly and severally liable for themselves their executors or assigns to the UNVERSITY on demand and shall within fourteen (14) days from the date of the demand thereof, refund to the UNIVERSITY under Clausel (b) (i) (ii) and (iii), and all other sums paid to and expended on behalf of the ASSISTANT LECTURER/LECTURER ….”

 

Despite the demands made by the Plaintiff the Defendants failed to pay the amount claimed and therefore the Plaintiff initiated the action against the Defendants. Judgement in Default of Appearance was entered against the 3rd Defendant. This Application for Summary Judgment is against the 1st and 2nd Defendant. Judgment in Default has been entered against the 3rd Defendant.

 

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For an application for Summary Judgment this Court is guided by the principles laid down in National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, where it was stated by the Federal Court as follows,

 

“…We think it appropriate to remind ourselves once again that in every application under 0.14, the first considerations are (a) whether the case comes within the order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under 0.14. For the purposes of an application under 0.14, the preliminary requirements –

 

(i) the defendant must have entered an appearance;

 

(ii) the statement of claim must have been served on the Defendant;

 

(iii) the affidavit in support of the application must comply with the requirements of r 2 of the 0.14.

 

…. If the Plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. This burden then shifts to the defendant to satisfy the court why judgment should not be given against him…”

 

The Plaintiff have satisfied the preliminary requirements as laid down in the Kayu Raya‘s case that is,

 

1) the Defendants have entered appearance;

 

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2) the Statement of Claim have been served on the Defendants; and

 

3) the Affidavit in Support is in compliance with O.14 r. 2 Rules of the High Court (RHC).

 

The burden is now shifted to the Defendants to satisfy the Court why Judgment should not be entered against them.

 

In Bank Negara Malaysia v. Mohd Ismail [1992] 1 CLJ 627 the

 

Supreme Court held that the duty of a Judge does not end as soon as the fact is asserted by one party, or denied or disputed by the other on affidavit. The Judge has a duty to reject such assertion or denial if such assertion or denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or is inherently improbable.

 

“…Under an O. 14 application, the duty of a Judge does not end as

 

soon as a fact is asserted by one party, and denied or disputed by the other on affidavit. Where such assertion, denial or dispute is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable in itself, then the Judge has a duty to reject such assertion or denial, thereby rendering the issue as not triable. In our opinion, unless this principle is adhered to, a Judge is in no position to exercise his discretion judicially under an O. 14 application. Thus, apart from identifying the issues of fact or law, the Court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue.”

 

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In their Affidavit in Reply the 1st and 2nd Defendants averred that there the 1st and 2nd Defendant are not liable for the amount claim as according to the 1st and 2nd Defendants the Study Agreement is defective, and void. Thus it does not bind the 1st and 2nd Defendants. Furthermore the Defendants state that the Agreement is void ab initio as the Plaintiff did not sign the Agreement and therefore the Defendants are not liable to the amount claimed.

 

In Ng Hee Thoong’s [1995] 1 CLJ 609, at page 615, his Lordship Gopal Sri Ram, JCA (as he then was) said:-

 

“The effect of O.14 is to shut the defendant from having his day in the witness box. It is a very special jurisdiction and is only to be invoked in cases where there is no bona fide triable issue.

 

His Lordship then referred to the case of Syn Lee & Co. Ltd. v. Bank of China [1961] MLJ 87, where Thomson CJ (as he then was) said,

 

“With great respect it seems to me there may have been some slight misapprehension on the part of the Assistant Registrar and on the part of the trial Judge as to the proper approach.

 

It is not quite the same as the problem with which we are always being faced in the Chancery side of the Court of trying issues on affidavit evidence. In a case of this sort it is not a case of trying the issues on affidavit evidence, it is rather a question of deciding on affidavit evidence whether there is a moral improbability of a very high degree that the defendant can possibly succeed. On the other hand we have to remember that the Order is there as much in the interests of defendants as in the interests of plaintiffs. It is in the interest of plaintiffs that they should be able to get prompt judgment when there is no real defence. But on the other hand it is in the interest of defendants in such cases

 

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that plaintiffs should be able to get judgments not only expeditiously but economically.”

 

The Defendants submitted that there are three triable issues:-

 

1) whether there is a valid and binding agreement and is enforceable,

 

Samada perjanjian Biasiswa tersebut adalah sah dan boleh dikuatkuasakan;

 

2) whether the Defendants are liable for the amount claim as the Agreement is void,

 

Samada Defendan Pertama dan Kedua bertanggungan terhadap kehutangan yang dikatakan wujud walaupun pada dasarnya perjanjian tersebut adalah tidak sah, terbatal dan tidak terpakai terhadap Defendan Pertama dan Defendan Kedua;

 

3) the failure of the Plaintiff to sign the Agreement renders the said Study Leave Agreement void an initio and therefore the Defendants are not liable for the amount claim,

 

Samada kegagalan Plaintif untuk menandatangani perjanjian tersebut telah mengakibatkan perjanjijan tersebut terbata “void an initio dan seharusnya tidak boleh dikuatkuasakan terhadap Defendan pertama dan Kedua.

 

The main issue which this Court need to determine is whether there is valid Agreement even though the Representative of the Plaintiff did not sign the Agreement as shown in Exhibit MM-1. Both Defendants however, signed the Study Leave Agreement.

 

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Abdul Malik Ishak J in Sulisen Sdn Bhd v. Kerajaan Malaysia [2006] 7 CLJ247 sets out the following guideline,

 

“ The law of contract is concerned with the mechanics involved in and the principles regulating the formation, performance, continuance and discharge of the parties individually created obligations. The essential elements of any contract are:

 

(i) offer;

 

(ii) acceptance;

 

(iii) consideration (not required for contracts under seal);

 

(iv) intention to be bound;

 

(v) mutuality;

 

(vi) capacity; and

 

(vii) legality.

 

The offer and acceptance when taken together would form the “agreement” and that agreement must be supported by consideration in order to establish the obligation. It is the parties that must intend that the agreement to have legal force and the courts will only enforce what the parties intend should be enforced. The parties too must agree on the same thing and this would be known as mutuality. The parties too must have the capacity of reaching a binding agreement and the subject matter of the agreement must be legal. Briefly, these are the seven essential elements that must be present before a contract is said to be in existence.”

 

In the instant case there was an offer by the Plaintiff and an acceptance by the 1st and the 2nd Defendant. The Plaintiff had offer to finance the 1st Defendant to further his study and the 1st Defendant had accepted the

 

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offer and the terms and conditions. The 2nd Defendant together with the 3rd Defendant are the Sureties and had agreed to guarantee the 1st Defendant comply with the Terms of the Study Leave Agreement. The 1st Defendant went to UK to further his study totally financed by the Plaintiff. However, he did not complete his study and tendered his resignation. The amount claimed by the Plaintiff comprised of,

 

Salary and allowances RM157, 319.68

 

Scholarship and Allowances RM 328, 978.86

 

The abovementioned sum is the amount which was paid to the 1st Defendant by the Plaintiff when he took his full pay study leave. In the Statement of Defence of the 1st Defendant and the 2nd Defendant both denied the sum Claimed,

 

Defendan Kedua menafikan perenggan 10 Pernyataan Tuntutan Plaintif dan menegaskan bahawa Plaintif tidak berhak atas Tuntutan untuk jumlah RM486, 298.54 memandangkan tiada perjanjian wujud antara Plaintif dan Defendan.

 

(paragraph 14 of the Statement of Defence of 2nd Defendant);

 

Defendan Pertama menafikan perenggan 10 Pernyataan Tuntutan Plaintif dan menegaskan bahawa Plaintif tidak berhak atas Tuntutan untuk jumlah RM486, 298.54 memandangkan tiada perjanjian wujud antara Plaintif dan Defendan- Defendan. (paragraph 11 of the Statement of Defence of 1st Defendant).

 

Both Defendants stated in their Defence and the Affidavit in Reply that the terms in the Agreement were not explained to them,

 

“Terma-Terma tidak adil dan tidak diterangkan kepada Defendan Kedua.”

 

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(paragraph 5(d) of the Statement of Defence of the 1st and 2nd Defendant).

 

Gopal Sri Ram JCA ( as he then was) in Charles Grenier Sdn. Bhd. v.

 

Lau Wing Hong [1997] 1 CLJ 631 said,

 

“….a party to a contract who, after having concluded his bargain, entertains doubts as to the wisdom of the transaction may be in the unfairly advantageous position to invent all sorts of imaginary terms upon which disagreement may be expressed when the more formal document is being prepared in order to escape from his solemn promise. Businessmen would find the law to be a huge loop-hole and commerce would come to a virtual standstill.

 

The law leans in favour of upholding bargains and not in striking them down willy-nilly. And its declared policy finds expression in the speech of Lord Wright in Hillas & Co. v. Arcos Ltd. [1932] All ER (Rep.) 494, where he said:

 

Businessmen often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business, may appear to those unfamiliar with the business far from complete or precise. It is, accordingly, the duty of the Court to construe such documents fairly and broadly, without being, too astute or subtle in finding defects; but, on the contrary, the Court should seek to apply the old maxim of English law, verba ita sunt intelligenda ut res magis valeat quam pereat. That maxim, however, does not mean that the Court is to make a contract for the parties, or to go outside the words they have used, except in so far as there are appropriate implications of law, as, for instance, the implication of what is just and reasonable

 

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to be ascertained by the Court as matter of machinery where the contractual intention is clear…”

 

In Sri Kajang Rock Products Sdn. Bhd. v. Mayban Finance Bhd. & Ors. [1992] 1 CLJ 204; [1992] 3 CLJ (Rep) 611, VC George J (as he then was) aptly explained the meaning of the word “contract” in these words:

 

“To constitute a valid contract there must be separate and definite parties thereto; those parties must be in agreement, that is there must be a consensus ad idem; those parties must intend to create legal relations in the sense that the promises of each side are to be enforceable simply because they are contractual promises and as clear and helpful an enunciation of the principles as any which should guide the Court in determining the ever recurring question of whether there has been a contract between the parties is provided by Saville J. in Vitol B.V. v. Compagnie Europeene des Petroles [1988] 1 Lloyd’s Rep. 574, at 576 in the following words: The approach of the English law to questions of the true construction of contracts of this kind is to seek objectively to ascertain the intentions of the parties from the words which they have chosen to use. If those words are clear and admit of only one sensible meaning, then that is the meaning to be ascribed to them- and that meaning is taken to represent what the parties intended. If the words are not so clear and admit of more than one sensible meaning, then the ambiguity may be resolved by looking at the aim and genesis of the agreement, choosing the meaning which seems to make the most sense in the context of the contract and its surrounding circumstances as a whole. In some cases, of course, having attempted this exercise, it may simply remain impossible to give the words any sensible

 

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meaning at all in which case they (or some of them) are either ignored, that is to say, treated as not forming part of the contract at all, or (if of apparent central importance) treated as demonstrating that the parties never made an agreement at all, that is to say, had never truly agreed upon the vital terms of their bargain. ”

 

From the Affidavit and Statement of Defence filed there is no denial by the 1st Defendant that he had taken the full pay study leave. There is no denial by the 1st Defendant that he had actually gone to do his PhD at the University of New Castle in the UK. There is no denial by the 1st Defendant that he had not completed the course.

 

Applying the basic principles and elements of a contract as succinctly set out by Justice Abdul Malik Ishak in Sulisen that despite the Plaintiff not having signed the Agreement there was an offer which was accepted by the 1st Defendant. There was consideration i.e. the financing of the study leave by the Plaintiff. The fact that the Plaintiff has not signed the Agreement does make the Agreement void ab initio. The Court of Appeal in Cipta Cermat Sdn Bhd v. Perbadanan Kemajuan Negeri Kedah [2007] 1 CLJ 499 held that,

 

On the facts, there was a concluded contract despite the want of a duly executed formal agreement. There was an offer by the defendant and acceptance by the plaintiff, and there was consideration, certainty of parties, certainty of price and certainty of property. Also, there were the unequivocal acts of part performance by the plaintiff which were referable to an existing contract between the parties. The acts of part performance in the present case were the payment of the deposit coupled with the RM5,000 meant for the squatters. Although it was true that no formal contract of sale and

 

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purchase was ever executed, that did not matter since there could be a concluded contract even where the parties contemplated the execution of a more formal document. The defendant’s argument that this was a case where the execution of the formal written agreement was a condition precedent to there being a contract was unacceptable. The defendant’s own evidence that the defendant would readily accept the balance of the purchase price even without a formal agreement being executed by the parties pointed to the formal agreement being an unimportant document to the contracting parties. So, objectively speaking, the parties had already made a contract and the written agreement was a mere formality.

 

In the instant case there was an offer by the Plaintiff and there was an acceptance by the 1st Defendant and the 2nd Defendant. There was consideration and certainty. It is clear from the facts that the Parties were ad idem. Therefore I find that there was a valid and concluded contract between the Plaintiff and the Defendants.

 

In Malayan Insurance (M) Sdn. Bhd. v. Asia Hotel Sdn. Bhd. [1987] 2 MLJ 183, at 185, Hashim Yeop A. Sani SCJ (as he then was) explained,

 

“The underlying philosophy of 0.14 provision is to prevent a plaintiff clearly entitled to the money from being delayed his judgment where there is no fairly arguable defence to the claim. The provision should only be applied to cases where there is no reasonable doubt that the plaintiff is entitled to judgment. Order 14 is not intended to shut out a defendant. The jurisdiction should only be exercised in very clear cases.”

 

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Based on the reasons mentioned above the Application by the Plaintiff in Enclosure 13 for Summary Judgment against the 1st and 2nd Defendant is allowed with cost.

 

HASNAH BINTI DATO’ MOHAMMED HASHIM

 

Judicial Commissioner High Court of Malaya Kuala Lumpur

 

24 May 2010.

 

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