KUALA LUMPUR: A businessman and his wife who tried to jump the gun by filing a suit against a tycoon to avoid being sued by him over a RM140mil profit guarantee had the suit struck out by the Court of Appeal yesterday.
Justices Mokhtar Sidin, Abdul Kadir Sulaiman and Abdul Aziz Mohamad in unanimously throwing out the suit by Datuk Hamzah Abdul Majid and his wife against Sarawak tycoon Tan Sri Ting Pek Khiing following the tycoons appeal yesterday, said that the couple had filed an unsustainable action.
Hamzah is a former executive vice-chairman of Wembley Industries Bhd while his wife was a director.
The company acquired Clifford Investments Ltd (which owns Plaza Rakyat Sdn Bhd, the developer of the then Plaza Rakyat project in Jalan Pudu, Kuala Lumpur) in December 1992 with a guarantee from the couple that it would make a RM140mil profit between 1994 and 1996.
Clifford Investments, however, posted a profit of only RM10.3mil during the period, registering a shortfall of RM129.7mil. Wembley then took action to recover the shortfall.
In allowing Tings appeal yesterday, the judges did not give any specific grounds.
However, they had said during submissions by counsel that the suit had not disclosed any reasonable cause of action.
They said that the couple had no right to sue Ting in order to stop him from suing them.
They awarded the tycoon costs for proceedings in the High Court and at the appeal stage.
Hamzah and his wife were subsequently removed from the board of Wembley Industries at an EGM in December 1997 after a dispute over the profit guarantee.
On Sept 5, 1997, the couple responded by serving a suit on Wembley and Ting, claiming that the profit guarantee was not enforceable as he had promised them prior to signing the guarantee agreement that it would not be acted upon.
They also claimed that Wembley owed them RM83mil instead.
Earlier yesterday, the court heard arguments by Tings lead counsel, Lim Chor Pee, and counsel S. Ramesh who acted for Hamzah and his wife, Datin Freida Mohd Pilus.
Lim, who appeared with Ong Ming Suan, argued that the couples claim that Ting had promised not to act against them over the profit guarantee agreement did not form the basis for a suit.
He said that Hamzah and his wife had not established a legal right to sue Ting.
There was no legal contract between them and Tan Sri Ting.
Before they could sue, the plaintiffs would have to establish that Ting had made a false representation which they had acted upon and thereby caused detriment to them. None of these had happened, said Lim.
When Ramesh made submissions, the judges pointed out flaws in the suit.
Justice Mokhtar remarked that the plaintiffs were trying to jump the gun by filing a suit to stop any possible suit against them from Wembley.
Justice Abdul Kadir said an estoppel was to be used by a litigant as a shield rather than as a sword as in this case.
They have only issued a letter of demand and had not sued your client. They have not raised the sword and your client tried to use the shield as a sword, he said.
This was followed by an interjection by Justice Mokhtar, who said: Dont disturb the hornets nest until you have been stung.
The filing of the suit just showed your clients character - before anything happens to us, we protect ourselves first, he added.
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