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Transcript of 22-216-1999_Tay_Choo_Foo_v_Tan_Lim_Hian_(26.10.2010) (1).pdf
[Suit No. 22-216-1999-III]
1
MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK
AT KUCHING
SUIT NO: S-22-216-1999-III
5
BETWEEN
TAY CHOO FOO …. PLAINTIFF
AND
TAN LIM HIAN @ ADIJANTO …. 1ST DEFENDANT
SOENARYO PRIOSOETANTO …. 2ND DEFENDANT 10
BUMI RAYA UTAMA GROUP …. 3RD DEFENDANT
JUDGMENT
Introduction
The plaintiff claim is for 10% of the value of the shares of the Sarawak 15
Clinker Sdn Bhd which is estimated at RM35 million. The claim is based
on an oral promise allegedly made by the 1st defendant. The plaintiff
testified on his own behalf apart from calling two other witnesses. By the
time of trial, the 1st defendant had passed away. His son represented his
estate. The 2nd
defendant, who is the brother of the 1st defendant, did not 20
defend the action. Judgment in default had been entered against him for
the very same claim in another suit. No one represented the 3rd
defendant
as the 1st defendant took the position that the 3
rd defendant is not a legal
entity and does not exist. In the premises, the only defendant faced by the
plaintiff at the trial was the representative of the estate of the 1st defendant. 25
Plaintiff’s case
The plaintiff is a businessman based in Kuching. He is 65 years old. The
1st defendant was apparently a very rich Indonesian Chinese businessman
[Suit No. 22-216-1999-III]
2
with interests in various sectors in Indonesia and overseas. He died after
the instant suit was filed. The 2nd
defendant is his brother. He did not
defend the action. He did not come to court to testify for either side.
According to the son of the 1st defendant, he has been estranged from the
family even before the 1st defendant died. The 3
rd defendant has been 5
described by the plaintiff as a firm in which the 1st and 2
nd defendant were
partners. The case of the plaintiff is as follows. He met the 1st defendant
in Kuching sometime in 1989 over some oil palm plantation business.
The 1st defendant wanted investment opportunities for his business group
known as Bumi Raya Utama Group (BRUG). The plaintiff knew one 10
Datuk Effendi Norwawi, who was the then Chairman of the Sarawak
Economic Development Corporation (SEDC). By coincidence, Datuk
Effendi had asked the plaintiff whether anyone was interested in a clinker
project in Sarawak. At that time, a company known as Sarabah Clinker
Sdn Bhd was involved in the clinker project. It was a joint venture 15
between Sarawak Economic Development Corporation (SEDC) and Sabah
Economic Development Company (SEDCO). The plaintiff said that once
the 1st defendant was interested, he did all the ground work in securing the
project for BRUG. He introduced the 1st defendant to Datuk Effendi and
to the Chief Minister of Sarawak. Eventually BRUG managed to secure 20
the project. They paid over RM6 million to buy out the interests of SEDC
and SEDCO in the project. The new vehicle to carry out the clinker
project was known as Sarawak Clinker Sdn Bhd. This was a joint venture
project as there was an arrangement for BRUG to sell 40 per cent of the
shares to SEDC after three to four years. The value of the shares was to 25
be based on the costs of the machineries. As it happened, SEDC did not
exercise its option to buy 40% of Sarawak Clinker Sdn Bhd. The
company was ultimately sold to its present owners which is CMS Sdn
Bhd.
[Suit No. 22-216-1999-III]
3
The plaintiff said that he organised the signing ceremony which was
graced by the Chief Minister himself on 15th
September 1991. The
plaintiff said that he made about 15 overseas trips with the 1st defendant to
source for machineries. He said that for all his troubles, he was promised
10% free share in Sarawak Clinker Sdn Bhd and a directorship as well. 5
However, the 1st defendant never kept his side of the bargain by
transferring 10% free equity to him. When he finally demanded the 10%
free equity, he was told to subscribe by paying cash. As the investment in
the machineries was estimated and declared at RM350 million by BRUG
to SEDC, the plaintiff is now claiming RM35 million from the estate of 10
the 1st defendant. The plaintiff called two witnesses to support his case.
One of these witnesses is an accountant. He prepared a project paper
which contained a feasibility study on the clinker project. The purpose of
the project paper was to obtain financing from MUI Bank. He was
instructed by the plaintiff but his fee was paid by the “Indonesians”. He 15
was told by the plaintiff himself that he had been given 10% share in the
project. He candidly admitted that the 1st defendant did not tell him about
the 10% share that was allegedly given to the plaintiff. According to his
study, the total investment that was required was RM280 million. It is not
disputed by the parties, that the loan that was used for the clinker project 20
did not come from MUI Bank. The other witness that the plaintiff called
was Sii Kie Wong, a former officer of SEDC. He was tasked by the
Chairman of SEDC to discuss the clinker project with BRUG. He said that
during a meeting, the 1st defendant told him that the plaintiff was his
Kuching representative. The plaintiff told him that he would be getting 25
10% share and a directorship if the project was successfully implemented.
However, during cross-examination, he agreed that he did not hear that
from the 1st defendant himself. Apart from relying on his own oral
testimony and the testimony of his two witnesses, the plaintiff also placed
[Suit No. 22-216-1999-III]
4
considerable reliance on a letter allegedly written to him by the 2nd
defendant. The 2nd
defendant allegedly wrote this letter after the 1st
defendant had told the plaintiff to pay for the 10% share of Sarawak
Clinker Sdn Bhd in cash. In this letter, which was written in Bahasa
Indonesia, the 2nd
defendant purported to acknowledge the promise made 5
by his brother to give 10% share to the plaintiff. This is essentially the
case of the plaintiff.
1st defendant’s case
The estate of the deceased called only two witnesses, i.e. the son of the
deceased (Pandjijono Adijanto @ Tan Hong Phang, D.W. 1) and one 10
Chan Poh Kim (D.W. 2). Pandjijono Adijanto testified that he was closely
involved with the family business since 1978. He said the entire family
business of which the deceased was the head and founder was
conveniently called Bumi Raya Utama Group or BRUG. It was not a
legal entity as the actual businesses were operated by individual 15
companies. They had interests in various industries including
transportation and forestry. By 1991, the deceased had designated
Pandjijono Adijanto as his successor. Therefore, Pandjijono Adijanto was
kept in the loop of the family business by his late father. He said that
around 1990, his father sent Chan Poh Kim who looked after the family 20
business in Malaysia to go to Sarawak to look for opportunities in a
plywood project. His father told him that he met the Chief Minister of
Sarawak on his own initiative for the purpose of securing a timber
concession. His father did not succeed in getting a timber concession but
was given the opportunity to invest in a clinker manufacturing project. 25
Pandjijono Adijanto participated in the meetings between his father, his
assistant (Dr. Lim Soon Tham) and Chan Poh Kim (D.W. 2) and the
SEDC officials. As a result of the successful negotiations, his family
[Suit No. 22-216-1999-III]
5
bought out the shares of SEDC in Sarawak Clinker Sdn Bhd. However, at
the time of the signing ceremony which was graced by the Chief Minister,
the name of BRUG was used as his father had not decided which family
company would execute the actual agreement with SEDC. In the end,
Landstone Pte Ltd which is a company controlled by his family signed the 5
agreement with SEDC. Pandjijono Adijanto said that the plaintiff only
played a “minor role” in his family’s acquisition of Sarawak Clinker Sdn
Bhd. He said that the plaintiff had constantly worked to ingratiate himself
with his late father as he wanted to win contracts from him. His efforts
paid off as the deceased awarded him a contract to plant acacia on family 10
lands in Pontianak. In respect of the clinker project, Pandjijono Adijanto
said that the plaintiff only facilitated in organizing the signing ceremony,
making hotel bookings, coordinating meeting with government officials
and driving his father around whenever he came to Kuching. He was
emphatic that the plaintiff was not involved in any of the key negotiations 15
in respect of the clinker project. He also said that MUI Bank was not
involved in financing the project. He said that his father never offered
10% free equity to the plaintiff. However, he made an offer to the
plaintiff in January of 1992 to subscribe to 10% of the shares. Pandjijono
Adijanto was personally present during this meeting which was held at the 20
lobby of the Kuching Hilton Hotel. He heard the plaintiff decline the
offer as he did not have the money. He did not hear the plaintiff
protesting that he should be given free equity for his time and effort. He
said that he heard from his father that the plaintiff subsequently
telephoned him to confirm that he would not be subscribing to the shares 25
of Sarawak Clinker Bhd. The only other witness for the estate of the 1st
defendant was Chan Poh Kim (D.W. 2). He is a Singaporean who
handled the family business of the deceased in Malaysia. He was in
charge of arranging finance for the clinker project. The loan that was
[Suit No. 22-216-1999-III]
6
obtained for the project was a RM170 million loan syndicated by CIMB
Bank. He said the plaintiff was never involved in any of the negotiations
in respect of the financing of the project.
Issues
The core issue raised by the plaintiff is a simple one, i.e. that for the time 5
and effort he expended on behalf of the defendants in securing the clinker
project, he was promised 10% free equity in Sarawak Clinker Sdn Bhd.
The failure of the defendants, especially the 1st defendant to honour the
bargain gave rise to a cause of action in contract. Since the 1st defendant
had declared the value of machineries at clinker plant at RM350 million, 10
the plaintiff claims that he is entitled to RM35 million in damages.
Counsel for the 1st defendant, on the other hand had raised numerous
issues. They can be grouped as follows:
1. That the 3rd
defendant is not a legal entity and there is no evidence
that the 1st defendant was its managing partner. 15
2. That the action is a duplicity and an abuse of the process of the
court.
3. That the action is time barred.
4. That on the evidence there was no contract to allot 10% free equity
to the plaintiff 20
Whether the 3rd defendant is a firm and whether the 1
st defendant is its
managing partner?
The plaintiff has pleaded his case against the 1st defendant in his
individual capacity and in his capacity as the managing partner of the 3rd
25
defendant. The plaintiff has pleaded that the 1st and 2
nd defendant are
partners in the 3rd
defendant. In my opinion, counsel for the 1st defendant
[Suit No. 22-216-1999-III]
7
is correct to argue that the plaintiff has failed to tender any evidence of the
existence of the 3rd
defendant. The plaintiff has only relied on the
letterheads bearing the name “BRUG” and the clinker project signing
ceremony presided by the Chief Minister. The letter mentioned a group
by the name of “BRUG” but gave no details of its existence as a legal 5
entity. Counsel for plaintiff argued that it is an unregistered partnership of
the 1st and 2
nd defendant. However, apart from the letterhead, the plaintiff
has not tendered any details of the existence of such a firm either in
Malaysia or Indonesia. In fact at page 89 of the plaintiff’s own bundle of
documents, there is a letter from a law firm in Kuching that states 10
categorically that “BRUG” is not legal entity but a name by which their
clients refer to themselves. The letter is addressed to SEDC. The letter
specifically states that a company known as Landstone Investments Ltd
which is 80% owned by the 1st defendant would sign the main agreement
on the joint venture project with SEDC. This letter is dated 31st December 15
1991. Pandjijono Adijanto testified that BRUG does not exist as business
entity but it is a general name of all the family businesses that are operated
under individual companies. He was not convincingly challenged during
cross-examination. In the premises, I find that the plaintiff has not proved
on a balance of probabilities that the 3rd
defendant is a business or a legal 20
entity. Therefore the claim against the 1st defendant in his capacity as a
managing partner of the 3rd
defendant cannot be sustained. The plaintiff
has also pleaded his action against the 1st defendant in his individual
capacity for promising him 10% free equity, although in his evidence he
said that his agreement was with BRUG and not with the 1st defendant. 25
However, for sake of completeness I shall consider this claim later in my
judgment.
[Suit No. 22-216-1999-III]
8
Whether the action is a duplicity and an abuse of the process of the
court?
Counsel for 1st defendant submitted that the action is an abuse of the
process of the court for the following reason. The plaintiff had filed an
earlier suit (Kuching Suit No. 22-32-1997-(II) against the same 5
defendants. The plaintiff entered judgment in default against the 2nd
defendant. He has yet to execute the judgment in default. However, he
did not manage to serve the writ on the other defendants. He obtained an
order to renew the writ until August of 2000. In the interim he filed the
present suit without withdrawing the earlier suit. The remedies and reliefs 10
in both suits are identical. Counsel for 1st defendant cited the case of
Lesco Development Corp Sdn Bhd v Malaysia Building Society Bhd
[1988] 2 MLJ 184. In that case, the Supreme Court held at page 185 that:
It is undesirable to allow a situation where two different courts would try
and determine the same issues arising between the same parties relating to 15
the same subject matter.
He also cited Re Joseph Ambrose Lee; Mayban Securities Sdn Bhd
(previously known as Phileoallied Securities Sdn Bhd) v Dato’ Joseph
Ambrose Lee [2005] 7 MLJ 483 and J.H. Rayner (Mincing Lane) Ltd &
Ors v Manilal & Sons (M) Sdn Bhd & Anor [1987] 1 MLJ 312 to support 20
his argument that the plaintiff had run foul of the rule against duplicity of
actions. However, in my view, all the above cases can be distinguished.
In the instant case, the earlier proceedings never took off as the writ
lapsed in 2000 without it being served. Therefore the question of the
plaintiff proceeding with both actions against the defendants cannot arise 25
unlike in the cases cited.
[Suit No. 22-216-1999-III]
9
Whether action barred by limitation?
The plaintiff’s claim is allegedly based on the oral promise made by the 1st
defendant to allot free equity to the plaintiff for his involvement in the
clinker project. Counsel for the estate of the 1st defendant submitted that
the limitation period for the cause of action suggested in the Statement of 5
Claim of claim is only three years. The defence of limitation is pleaded in
paragraph 13 of the Statement of Defence. Article 46 of Part III of the
Schedule to the Limitation Ordinance of Sarawak provides that the
limitation period for compensation for breach of a promise to do anything
at a specified time, or upon the happening of a specified contingency is 10
three years. The limitation period is stated to run from the time specified
or from the time the contingency happens. Counsel for plaintiff has not
argued that the limitation period is more than three years. As submitted
by counsel for the 1st defendant, the plaintiff had not been very specific
when the promise of allotment of free equity was made. The plaintiff 15
pleaded in the Statement of Claim that he “initiated the joint venture” in
1991. However, he does not say that he was immediately entitled to the
10% free equity. If he was immediately entitled to the free equity, he
would have been out of time as the suit was only filed in October of 1999.
The plaintiff pleaded in paragraph 11 of the Statement of Claim as 20
follows:
11. On the 22nd day of January, 1992, the Defendants, instead of
allotting to the Plaintiff the free equity in the said Company, demanded the
Plaintiff to contribute full cash payment towards the free equity in the said
Company. The Plaintiff did not agree to such demand of the Defendants. 25
The plaintiff did not institute any action or make a demand after this date.
Instead he immediately faxed a letter to the 1st defendant stating he would
not be taking up the offer to subscribe 10% of the equity of Sarawak
[Suit No. 22-216-1999-III]
10
Clinker Sdn Bhd. If the refusal of the plaintiff is taken as the point of time
from which the limitation period is made to run, the action would have
become time barred by January of 1995. However, the plaintiff pleaded in
paragraph 12 of the Statement of Claim as follows:
12. Subsequently, it was agreed between the Plaintiff and the 5
Defendants that the claim of the Plaintiff against the Defendants towards
the free equity in the said Company be held in abeyance till the clinker
plant in the Project be operational and in production.
(emphasis supplied)
Assuming that the plaintiff is telling the truth that there was a fresh 10
agreement subsequent to the meeting at the Hilton Hotel Lobby, the
plaintiff would still be out of time. This is because, by the plaintiff’s own
admission, the clinker plant was already operational by early 1996. This
is what the plaintiff said during cross-examination:
Q: When was the Clinker Plant operational? 15
A: Towards the later part of 1995 because commission of machineries
is repeating process, normally it takes 6 months to run the plant to
be operational and gradually increasing the productivity.
Q: When was the Clinker Plant in production?
A: If I am not mistaken, early 1996. But the Defendant always try to 20
avoid me inspecting the site especially checking the quality of the
machineries fabricated from different parts of China. Therefore, I
was not given the privy of knowing some details operation in
clinker plant especially matters relating to financial matters.
(emphasis supplied) 25
The plaintiff pleaded in paragraph 12 of the Statement of Claim that the 1st
defendant agreed to delay allotting the free equity until the clinker plant
was operational and in production. Although the plaintiff pleaded that the
[Suit No. 22-216-1999-III]
11
clinker plant was operational in December of 1996, during cross-
examination, he has conceded that the specified contingency occurred in
early 1996. In the premises, by any reckoning, the three year limitation
period would have expired by early 1999. This action was only instituted
on 19th
October 1999. I have not omitted to consider that the plaintiff 5
pleaded as follows in paragraph 13:
13. On the 29th day of January, 1997, the Plaintiff, vide his letter to
the Defendants of 'idem date', demanded the Defendants, “to compensate
him a fair sum of his 10% interest in the said Project”. The Defendants
denied any liability towards the claim of the Plaintiff. 10
In my opinion, the limitation period cannot run from the date of demand
for the reason that article 46 enacts that the limitation period would run
from the date of happening of a specified contingency. In this case,
assuming that the plaintiff is telling the truth that the 1st defendant had
subsequently agreed to allot him the 10% free equity, the limitation period 15
would have run from early 1996 when the clinker plant started production.
In the premises, the plaintiff was clearly barred by limitation law from
instituting this action. On this ground alone, I would dismiss this action.
However, I shall proceed to consider the core issue in this case, i.e.
whether the plaintiff and 1st defendant had entered into an agreement 20
whereby 10% free equity should have been allotted to the plaintiff.
Whether the plaintiff was entitled to 10% free equity?
The issues that arise are whether the plaintiff and 1st defendant had entered
into an agreement that gave rise to the entitlement of 10% free equity,
whether there was breach of it and whether any damages were due. 25
The plaintiff did not rely on any written agreement for the 10% free
equity. He based his claim on an oral agreement. In the absence of a
[Suit No. 22-216-1999-III]
12
written agreement, the evidences that the plaintiff relied on to prove his
claim are:
(a) The testimony of P.W. 1 and P.W. 2.
(b) A letter purportedly written by the 2nd
defendant to the plaintiff.
(c) His own testimony. 5
According to the plaintiff, the 1st defendant repeated his promise of giving
him 10% free equity in the presence of SEDC officers. One of the SEDC
officers (P.W. 2, Sii Kie Wong) was called to testify on his behalf but the
other officers were not. In my opinion, the evidence of P.W. 2 does not
support the evidence of the plaintiff that he was promised 10% free equity. 10
P.W. 2 frankly told the court that he only guessed that the 1st defendant
had made an offer of 10% free equity to the plaintiff. This is because the
1st defendant said during the meeting that the plaintiff is his Kuching
representative. P.W. 2 was not sure if the 10% free equity was mentioned
because his Bahasa Indonesia is limited. The late 1st defendant spoke in 15
Bahasa Indonesia and Teochew only. In the premises, the evidence of
P.W. 2 does not cast any light on the alleged oral agreement between the
plaintiff and the 1st defendant. He only heard about the 10% free equity
from the plaintiff.
Similarly P.W. 1 (Lee Khim Sin) who allegedly prepared a project paper 20
for financing did not hear about 10% free equity from the 1st defendant.
This is what he said in evidence about the 10% free equity:
Q: Look at Q 10, 11 & 12. At any time did Adijanto ever tell you that
he is giving Tay Choo Foo 10%?
A: No. 25
The plaintiff also referred to the letter (exhibit P1, dated 24th
January
1992) that was allegedly sent by the 2nd
defendant after that fateful
[Suit No. 22-216-1999-III]
13
meeting at the Hilton Lobby wherein the 1st defendant rebuffed the request
for 10% free equity and told the plaintiff to subscribe for it by paying
cash. This letter was written by the 1st defendant in Bahasa Indonesia.
The professed purpose of the letter appears to be a plea by the 2nd
defendant to repair relations between the parties and urge the plaintiff not 5
to take any drastic action. However, in this letter the writer refers to the
10% free equity made to the plaintiff by the 1st defendant. This letter was
admitted into evidence as the plaintiff claimed that he received it. The 1st
defendant however disputed the contents of the letter. It is trite law that
although a document may be admitted into evidence, the weight given to it 10
is a separate matter. The 2nd
defendant did not defend this action. There
was virtually unchallenged evidence from Pandjijono Adijanto that the 2nd
defendant had been estranged from the family business of the 1st
defendant. There is also evidence that the 2nd
defendant was not involved
in the clinker project. The plaintiff himself said that the 2nd
defendant 15
only came once to see the Chief Minister when the machineries were
stuck at the port. The 2nd
defendant was not at the signing ceremony. The
2nd
defendant was not a shareholder or a director. He is also not a
guarantor of the syndicated loan that was taken for the clinker project.
Pandjijono Adijanto disputed the truth of the contents of the letter, 20
especially the statement in respect of the 10% free equity. In the
premises, since the plaintiff is relying on the letter to prove that he had
been promised 10% free equity by the 1st defendant, he should have called
the 2nd
defendant as his witness. The 2nd
defendant wrote the said letter on
behalf of BRUG. For the reasons stated earlier, there was no evidence of 25
a partnership between the 1st and 2
nd defendant in BRUG. The question
that would arise in the circumstances is whether the 2nd
defendant can bind
the 1st Defendant by the said letter. There is no evidence that the 1
st
defendant had authorized the said letter. Furthermore the contents of the
[Suit No. 22-216-1999-III]
14
letter are disputed now. As stated in Chong Khee Sang v Pang Ah Chee
[1984] 1 MLJ 377 by Shankar J:
Certainly the law must be that once a document is included in an Agreed
Bundle, it is no longer necessary to prove their existence or execution. Nor
is it necessary to produce the original. But so far as the contents of the 5
documents are concerned the truth of the same has still to be proved, in the
absence of any specific admission of the facts therein contained.
Therefore, the plaintiff should have called the 2nd
defendant to explain the
10% free equity referred to in the letter. Since the 2nd
defendant did not
testify, no weight should be given to the said letter in considering whether 10
the 1st defendant had promised 10% free equity to the plaintiff.
Therefore, the only evidence of the oral contract is the testimony of the
plaintiff. The plaintiff told that court that he was promised 10% free
equity by the 1st defendant for his time and effort if the clinker project
took off. The exact date of the oral agreement is not stated by the 15
plaintiff. The plaintiff pleaded that the he was the one who initiated the
joint venture deal. In his witness statement, the plaintiff said he had been
promised many times that the 10% free equity would be allotted to him by
the 1st defendant. He said as follows in the witness statement in
paragraphs 29 and 30: 20
29. Why would you want to do all that for the Indonesians?
I was promised 10% free shares by Adijanto.
30. When did he make this promise?
Many times, from the beginning. He said the same even to others.
The only witnesses he called were P.W. 1 and P.W. 2. He did not call the 25
other SEDC witnesses. As stated earlier, the witnesses he called were
unable to verify what the 1st defendant allegedly said about the 10% free
[Suit No. 22-216-1999-III]
15
equity to the plaintiff. During cross-examination, he said as follows about
the genesis of the oral agreement:
“Q: What did the late 1st Defendant allegedly represent to you?
A: The late 1st Defendant in order to encourage me to use my
influence to get the deal, he always impress upon me by telling me 5
and also my wife and myself that he would give me 10% free share
if I could get Datuk Effendi to agree to the take over of Sarawak
clinker and also the CM to approve.
The plaintiff said that he arranged for the 1st defendant to see Datuk
Effendi and the Chief Minister. Pandjijono Adijanto told otherwise. He 10
said he was involved in the clinker project from the beginning. He said
his father arranged the meeting with the Chief Minister on his own
initiative. The 1st defendant wanted a timber concession from the Chief
Minister but instead he was told of an opportunity to invest in the clinker
project. Be that as it may in respect of the question of arranging meeting 15
with high officials such as Datuk Effendi and the Chief Minister, the
essential question that arises is whether the 1st defendant and the plaintiff
had concluded an enforceable oral contract in respect of the 10% free
equity or its worth that the plaintiff is now claiming. Bearing in mind that
the burden of proof is on the plaintiff, I am of the opinion that he has 20
failed to discharge it on a preponderance of probabilities. My reasons are
as follows.
Although the alleged contract was not in writing, the plaintiff is not
relieved of his duty to prove the essentials of a valid and binding contract.
The plaintiff had been generally vague about facts which would support 25
the existence of an oral contract. To keep things in perspective, it must
not be forgotten that the plaintiff is claiming 10% equity in Sarawak
Clinker Sdn Bhd or RM35 million by claiming the existence of an oral
contract between him and the 1st defendant. He was never specific about
[Suit No. 22-216-1999-III]
16
the date of the contract. I have alluded to his evidence on this point
earlier. He did not define the said oral contract in terms of offer,
acceptance and consideration. Throughout his evidence he referred to the
“promise” made by the late 1st defendant to allot him 10% free equity in
the event the clinker project was successful. However, he shifted the date 5
of allotment to the point of time when the clinker plant would commence
production.
In the first place, I find that the existence of a binding contract to allot
10% free equity to the plaintiff as utterly implausible. From the evidence,
all that the plaintiff did was to organize the ferrying of the 1st defendant 10
and his party around Kuching and arranging introductions to senior
government officials. It is disputed whether the plaintiff introduced the 1st
defendant to Datuk Effendi and the Chief Minister. Even if I were to
accept the evidence of the plaintiff that he did introduce them, I do not
find it probable that the 1st defendant on this account alone would have 15
agreed to allot 10% free equity share to him. Pandjijono Adijanto told the
court his late father failed to obtain a timber licence which was his main
purpose of coming to Sarawak. Instead he was told of an opportunity to
invest in a clinker project. The 1st defendant was also told that the clinker
project would require a huge investment of about RM450 million. In the 20
premises, it seems highly improbable why an experienced businessman
such as the 1st defendant who has diversified interests in Indonesia and
Malaysia would want to allot 10% free equity to the plaintiff whose only
role was to make introductions and do some peripheral work in arranging
the signing ceremony and ferrying him around Kuching. The plaintiff 25
claimed that he also went overseas with the 1st defendant to look at
machineries for the clinker plant. However there is no conclusive proof
from the photographs that the plaintiff was involved in the clinker project
[Suit No. 22-216-1999-III]
17
except on the periphery. The plaintiff exhibited some letters that he
signed using the “BRUG” letterhead. However, the plaintiff himself told
the court he had not been made director of Sarawak Clinker Sdn Bhd.
There is no evidence that he held any formal position in the so-called
partnership called “BRUG”. It is more likely that he used the letterhead 5
because he was helping to organise the signing ceremony and co-
ordinating meetings.
In the second place, there is a lack of a definite offer and acceptance
element in the testimony of the plaintiff. The plaintiff related that he met
the 1st defendant through dealings in the oil palm business. He introduced 10
him to Datuk Effendi who had told him about an opportunity to invest in
the clinker project. He then arranged for the 1st defendant to meet the
Chief Minister. According to the plaintiff, the 1st defendant had
repeatedly promised him 10% free equity in the clinker project. However
the plaintiff himself never told the court that he would not have done all 15
these running around unless he was going to be given the 10% free equity.
To put it in another way, the question is whether the plaintiff had offered
to do certain things for the 1st defendant in exchange for the 10% free
equity. The converse position would be whether the defendant had
offered 10% free equity in exchange for the services of the plaintiff. In 20
both these situations, the offer should be followed by a definite acceptance
in order to constitute a valid contract. However, the general picture that
emerges from the entire testimony of the plaintiff is that he had performed
services for the 1st defendant who promised him 10% free equity. It is
very difficult to discern the element of a definite offer and acceptance in 25
their dealings. The plaintiff was not specific that he had a bargain with
the 1stdefendant. The following answers of the plaintiff during cross-
examination suggest this conclusion:
[Suit No. 22-216-1999-III]
18
The late 1st Defendant in order to encourage me to use my influence to get
the deal, he always impress upon me by telling me and also my wife and
myself that he would give me 10% free share if I could get Datuk Effendi
to agree to the take over of Sarawak clinker and also the CM to approve.
…….. 5
I remember the late 1st Defendant made the promise before I brought him
to see Datuk Effendi in Kuching, after the meeting, he was very happy and
again repeating his commitment of 10% free share to me, maybe just to
inspire me to work harder to get the project. He kept repeating this,
maybe to show that he was very kind. 10
…….
And remember he said it very loud, that I give Tay Choo Foo 10% free
share, maybe just to show that he was very generous, I remember Sii Kie
Wong was there.
(emphasis supplied) 15
The element of offer and acceptance is not clearly borne out in the
evidence of the plaintiff which I quoted above. In any event, I disbelieve
the plaintiff that the 1st defendant had made an oral contract whereby he
would give 10% free equity in Sarawak Clinker Sdn Bhd in exchange for
his services in arranging introductions to high officials in Sarawak, 20
accompanying him on overseas trips and for running errands for him in
Kuching. The plaintiff was not even involved in the crucial task of
securing the syndicated loan of RM170 million for the project as that was
done by Chan Poh Kim (D.W. 2). From the outset, it was known to both
the plaintiff and the 1st defendant that the clinker project requires 25
investment in the hundreds of millions of ringgit. The plaintiff, by his
own admission, did not invest any money at all into the project. His
contribution was purely in organizing the signing ceremony and running
errands for the 1st defendant when he was in Kuching. At the inception of
the project, no money had been injected into it. This is a capital intensive 30
[Suit No. 22-216-1999-III]
19
project as the machineries alone cost over hundreds of millions of ringgit.
A syndicated loan of RM170 million with several banks was ultimately
secured to finance the project. If indeed it is true that the 1st defendant had
agreed to give 10% free equity in the company to the plaintiff, common
sense and logic demands that he would have done so at the inception of 5
the project so that the plaintiff would partake in the risks involved.
Instead the plaintiff would have the court believe that according to the oral
agreement, the 10% free equity would only be allotted when the clinker
plant commenced production. I find this highly improbable. All the
parties involved in the project such as the 1st defendant, Pandjijono 10
Adijanto and other family members had executed a guarantee for the
RM170 million loan which was presumably used to purchase the
expensive machineries for the clinker project. It beggars belief why the 1st
defendant would have agreed to allot 10% free equity and a directorship to
someone who did not share the risk of guaranteeing such a huge loan. 15
Since the plaintiff conceded that there was no written agreement, his
evidence has to be weighed against the inherent probabilities of the case.
I find it utterly improbable that the 1st defendant would have concluded
such an oral contract where for mere introductions, coordinating meetings
and doing some work on the periphery of a huge project, the plaintiff is in 20
a position to make a claim for RM35 million. I also believe Pandjijono
Adijanto (D.W. 1) who told the court that he was involved in the clinker
project from the beginning and that he would have known about the
allegation of the plaintiff if it were true.
Finally, I am in agreement with counsel for the 1st defendant that the fax 25
memo (exhibit D8) the plaintiff wrote to the 1st defendant after the Hilton
Lobby meeting conclusively decides the case against the plaintiff. After
the 1st defendant refused to give the plaintiff 10% free equity and invited
[Suit No. 22-216-1999-III]
20
him to subscribe by paying cash, the plaintiff wrote him the following
memo:
“SUBJECT: SARAWAK CLINKER SDN BHD
MESSAGE: Further to our tele-con. instant regarding my share
equity in the above co., I have to withdraw my participation 5
as I am not in the position to subscribe my share in cash.
Your kind consideration is much appreciated.
Thank You.
Tay Choo Foo” 10
To my mind, assuming that the plaintiff was entitled to the free equity in
Sarawak Clinker Sdn Bhd, there was no reason for him to say that he was
“withdrawing” his participation as he was not in a position to subscribe in
cash. The plaintiff has not denied writing this memo to the 1st defendant.
He did not say that he was under duress, threat or coercion when he signed 15
the memo. In other words, it was written voluntarily. There is no a hint
of protest or indication in the memo that that the plaintiff would insist on
his legal rights under the alleged oral contract to his entitlement of the
promised sweat equity. The irresistible inference that can be drawn from
this fax memo is that the oral contract to allot 10% free equity in Sarawak 20
Clinker Sdn Bhd to the plaintiff did not exist.
I, therefore, find on a preponderance of probabilities that the plaintiff
failed to prove the existence of the oral agreement.
Damages
Assuming I am wrong on liability, I shall now make known my views on 25
damages. The plaintiff’s claim is premised on 10% free equity of
Sarawak Clinker Sdn Bhd. The plaintiff told the court that he is claiming
RM35 million simply because the defendants declared to SEDC that the
worth of the machineries that were purchased were RM350 million.
[Suit No. 22-216-1999-III]
21
However, in same breadth he told the court that the 1st defendant was
trying to “cheat” SEDC because the machineries were of lower quality
from China which were worth only RM180 million. There is also
evidence that the 60% of the clinker project was to be financed by a
syndicated loan. In the premises, given the fact that the plaintiff himself 5
alleged the machineries were only worth RM180 million and 60% of the
project was financed by a syndicated loan, the worth of the company when
it started production in early 1996 cannot be worth RM350 million. The
plaintiff has not given any plausible evidence in respect of the value of the
company at the time he was allegedly entitled to the 10% free equity. In 10
the premises, even if the plaintiff succeeded on liability, I would not have
made any award of damages.
In conclusion, the claim of the plaintiff is dismissed with costs to be taxed
unless otherwise agreed.
15
(RAVINTHRAN PARAMAGURU)
Judicial Commissioner
20
Date of Delivery of Judgment: 26.10.2010
Date of Hearing: 18.2.1010
12.3.2010
24.3.2010 25
14.4.20101
10 & 11.6.2010
20.7.2010
For Plaintiff: Mr. Mohd Ivan Hussein 30
Messrs Ivan Hussein & Co. Advocates
Kuching
[Suit No. 22-216-1999-III]
22
For the 1st Defendant: Mr. Idris Abdullah and Ms Ratna Devi
Messrs Idris & Co. Advocates
Kuching
5
10
15
20
25
30
35
40
Notice: This copy of the Court's Reasons for Judgment is subject to editorial
revision.