Thursday, June 20, 2024
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Brunei Town

Court in favour of defendant in properties exchange dispute

Fadley Faisal

The High Court last October made a decision in favour of a defendant in a civil suit resulting in costs to be borne by the plaintiff company.

Plaintiff Lisa Development Sdn Bhd, represented by lawyer Veronica K Rajakanu of Messrs VK Rajakanu and Associates, filed claims against defendant Sam Hiang Thye who was represented by counsels Eric Siow and Jonathan Cheok of Messrs Cheok Advocates and Solicitors.

The lawsuit arose from a dispute over an exchange of properties between the parties. Amongst other things, the 40-page court document states that the exchange was made between September 8, 2006 to February 23, 2010.

The plaintiff exchanged Brunei properties of 16 shophouses held on leasehold and one residential house on freehold with the defendant’s Malaysian properties consisting of 60 plots of undeveloped mixed zone agricultural land in Sarawak ranging in sizes from 0.0500 to 7.1920 hectares held in perpetuity and leasehold, as well as a piece of property addressed Lot No 255, Block 5, Danau Land District.

The defendant had disposed off all Brunei properties upon exchange except for some which remained, up until the lawsuit.

During the period of exchange, the plaintiff’s director was Hua Chan Nam (HCN). He was also a major shareholder. HCN acted on the plaintiff company’s behalf in the transactions.

The court also stated that HCN suffered a stroke on September 8, 2006 and a second stroke on February 23, 2010, which incapacitated him severely.

Despite HCN taking no part in the proceedings, it was the effect of his first stroke which had been raised as one of the issues at trial.

Based on the difference in monetary values the plaintiff attributes to the Brunei properties and the Malaysian properties at the time of the transactions, the plaintiff alleges that the defendant took unfair advantage of HCN and/or that the transactions are unconscionable and obtained by the defendant’s exercise of undue influence over HCN, and sought to set them aside; or, where ‘restitutio in integrum’ (restoration to original conditions) of the Brunei properties is not possible, an order for payment of monetary compensation for them.

Justice Gareth John Lugar-Mawson, presiding over the proceedings throughout, found that the plaintiff has failed to adduce any evidence which establishes that the defendant attained the position of being able to dominate HCN’s will, or exercise domination of any kind over him.

The High Court decided that the evidence from the Hua family witnesses, Director of Lisa Development Sdn Bhd Pengiran Emran and the four solicitor witnesses who were acquainted with HCN, showed that HCN retained his own “strong, forceful personality” throughout the period.

Justice Lugar-Mawson also gave consideration to the dispute where it was alleged that the transactions are unconscionable, based on the difference in the monetary values the plaintiff attributes to the Brunei and Malaysian properties.

The court underlined the fact that no cash appears to have been paid on each exchange. Instead, what was done was a ‘straight swap’.

“There is no evidence of impropriety on the defendant’s part, neither do the transactions shock my conscience. I am satisfied that they are not unconscionable,” the court decided.

Justice Lugar-Mawson dismissed all of the plaintiff’s claims against the defendant. The court also set aside a Consent Order and made an order for the assessment of damages suffered by the defendant as a result of the Consent Order to be made by a Registrar.

The plaintiff is ordered to repay the defendant the rent paid for two of the Brunei properties as provided for under the Consent Order, together with interest at the judgement rate on those payment calculated from their respective dates of payment up to the date of repayment.

The plaintiff was also ordered to pay the defendant’s costs of the action, to be taxed if not agreed.

“As requested by the defendant’s counsel, in light of the many issues contested during the trial, the voluminous documents produced at trial, the number of witnesses called, and the length of the trial, I grant the defendant a certificate for two counsels,” the court further ordered on concluding the civil suit.

Costs of the action were ordered on the plaintiff to be paid to the defendant.

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