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CASE OF THE WEEK

BANKING: Banks and banking business - Islamic banking - Al-Istisna' banking facilities - Whether facilities offered consistent with concept of Al-Istisna' Sale Agreement - Whether conditions essential for completion of transaction - Whether transaction rendered incomplete for failure to comply with conditions

CONTRACT: Agreement - Facility agreement - Offer for banking facilities - Whether subject to compliance of conditions precedent - Whether formal contract executed - Whether there was concluded contract


KOPEKS HOLDINGS SDN BHD v. BANK ISLAM MALAYSIA BHD
COURT OF APPEAL, PUTRAJAYA
SULAIMAN DAUD JCA, SYED AHMAD HELMY JCA, AZIAH ALI JCA
[CIVIL APPEAL NO: S-02-1480-2009]
21 FEBRUARY 2012

The respondent offered banking facilities to the appellant for inter alia, redemption of two lots of land and to part-finance a development project as well as a bank guarantee/performance guarantee. The appellant commenced preliminary works despite no formal written agreement being executed. Subsequently, the respondent informed the appellant that the facilities offered had been withdrawn and cancelled. The appellant thus claimed against the respondent for losses suffered as a result of the wrongful withdrawal of the banking facilities. The appellant contended that there was a legally binding agreement between the parties upon the appellant's acceptance of the respondent's offer of banking facilities. The respondent contended that the offer made was conditional upon compliance of conditions precedent and other terms and conditions and subject to a formal contract to be executed between the parties. The learned trial judge dismissed the appellant's claim after finding that the intention of the parties was not to make a concluded bargain unless and until a formal contract was executed.

Held (dismissing appeal with costs)

Per Aziah Ali JCA delivering the judgment of the court:

(1) The trial judge had not erred in distinguishing the case of Bank Bumiputra Malaysia Bhd Kuala Trengganu v. Mae Perkayuan Sdn Bhd as in that case the facility that was the subject matter of the case was a conventional bank loan facility. In the present case, the facility offered was the Al-Istisna' Islamic financing facility and the terms and conditions in the facility letter in Mae Perkayuan were not similar to the terms and conditions in the letters of offer in the present appeal. (para 11)

(2) The respondent's letter of offer provided for the purchase of the project by the respondent vide the Al-Istisna' Purchase Agreement and the sale by the appellant vide the Al-Istisna' Sale Agreement consistent with the requirements of the Al-Istisna' concept and made subject to conditions. The Al-Istisna' Purchase Agreement and Al-Istisna' Sale Agreement were essential to complete the financing transaction between the parties. The execution of the agreements was a term of the bargain and not mere formality. Hence, the two agreements would have to be executed in order to complete the financing transaction. (paras 16-17)

(3) In the circumstances, the conditions precedent could not be disregarded and until the legal documents were executed, the letters of offer issued by the respondent remained expressions of willingness on the part of the respondent to offer banking facilities to the appellant. Hence, there was no concluded contract between the parties as the transaction had not been completed. (para 17)

Bahasa Malaysia Translation Of Headnotes

Responden menawarkan kemudahan perbankan kepada perayu untuk, antara lain, penebusan dua lot tanah dan membiayai sebahagian projek pembangunan dan juga suatu jaminan bank/jaminan pelaksanaan. Perayu memulakan kerja-kerja awal walaupun tiada perjanjian bertulis secara formal yang ditandatangani. Kemudian, responden memberitahu perayu bahawa kemudahan-kemudahan yang ditawarkan telah ditarik balik dan dibatalkan. Perayu, oleh itu, menuntut terhadap responden bagi kerugian yang dialaminya akibat daripada penarikan balik secara salah kemudahan-kemudahan perbankan tersebut. Perayu menghujah bahawa terdapat perjanjian yang mengikat dari segi undang-undang di antara pihak-pihak selepas perayu menerima tawaran kemudahan perbankan responden. Responden menghujah bahawa tawaran tersebut dibuat dengan syarat pematuhan kepada prasyarat dan terma-terma dan syarat lain dan tertakluk kepada kontrak secara formal ditandatangani di antara pihak-pihak. Hakim bicara yang bijaksana menolak tuntutan plaintif selepas mendapati bahawa niat pihak-pihak bukan untuk memasuki perjanjian yang muktamad kecuali dan sehingga kontrak formal ditandatangani.

Diputuskan (menolak rayuan dengan kos)

Oleh Aziah Ali HMR menyampaikan penghakiman mahkamah:

(1) Hakim bicara tidak khilaf dalam membezakan kes Bank Bumiputra Malaysia Bhd Kuala Trengganu v. Mae Perkayuan Sdn Bhd kerana di dalam kes itu kemudahan yang menjadi perkara kes adalah kemudahan pinjaman bank konvensional. Di dalam kes ini, kemudahan yang ditawarkan adalah kemudahan perbankan Islam Al-Istisna' dan terma-terma dan syarat-syarat di dalam surat kemudahan di dalam kes Mae Perkayuan tidak serupa dengan terma-terma dan syarat di dalam tawaran dalam kes ini.

(2) Surat tawaran responden memperuntukkan pembelian projek oleh responden melalui Perjanjian Pembelian Al-Istisna' dan jualan oleh perayu melalui Perjanjian Jualan Al-Istisna' yang konsisten dengan keperluan konsep Perjanjian Jualan Al-Istisna' yang penting untuk menyempurnakan transaksi pinjaman di antara pihak-pihak. Penandatanganan perjanjian adalah salah satu terma perjanjian dan bukan formaliti semata-mata. Dengan itu, kedua-dua perjanjian mesti ditandatangani untuk menyempurnakan transaksi pinjaman tersebut.

(3) Dalam keadaan ini, prasyarat tidak boleh diketepikan dan selagi dokumen-dokumen sah tidak ditandatangani, surat-surat tawaran yang dikeluarkan oleh responden kekal sebagai kesediaan pihak responden menawarkan kemudahan perbankan kepada perayu. Maka, tidak ada kontrak yang muktamad di antara pihak-pihak kerana transaksi tersebut tidak pernah disempurnakan.

Case(s) referred to:

Ayer Hitam Tin Dredging Malaysia Bhd v. YC Chin Enterprises Sdn Bhd [1994] 3 CLJ 133 SC (refd)

Bank Bumiputra Malaysia Bhd Kuala Trengganu v. Mae Perkayuan Sdn Bhd & Anor [1993] 2 CLJ 495 SC (dist)

Bank Islam Malaysia Bhd v. Lim Kok Hoe & Anor And Other Appeals [2009] 6 CLJ 22 CA (refd)

Bekalan Sains P&C Sdn Bhd v. Bank Bumiputra Malaysia Bhd [2011] 1 LNS 232 CA (refd)

Counsel:

For the appellant - Peter KC Lee; M/s Lee & Assocs

For the respondent - SH Leong; M/s Angela Ubu & Assocs

Reported by S Barathi

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