[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]

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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]

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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]

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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]

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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]

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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]

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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]

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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]

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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]

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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]

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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]

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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]

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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

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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.