Ong Han Nam v Borneo Ventures Pte. Ltd.

Under a Subscription Agreement dated 30 December 2013, Borneo Ventures Pte Ltd (the respondent) acquired 77.5% of the shares in Sutera Harbour Group Sdn Bhd from Mr Ong Han Nam (the appellant), with completion on 26 March 2014. A subsidiary, Sutera Harbour Golf and Country Club Sdn Bhd (SHGCC), held the leasehold of the Sembulan Land in Kota Kinabalu, Sabah. Mr Ong warranted that SHGCC was the sole legal and beneficial owner of that land. In fact a plot of about 1.459 acres within it, which housed a power plant (the Subject Land), had been sold by SHGCC to Mr Ong's company Omega Brilliance Sdn Bhd for RM 1,000, and this sale was never disclosed.

In Ong Han Nam v Borneo Ventures Pte Ltd [2021] 1 SLR 1248, the Court of Appeal found Mr Ong liable only for breach of the land warranty and directed that damages be based on the fair market value of the Subject Land at the time of purchase, being the amount that would have been deducted from the acquisition price had the buyer known the land was excluded, with Mr Ong paying 77.5% of that figure. At the assessment, the Judge valued the Subject Land for mixed use at RM 33.7 million and awarded RM 26,117,500.00 with interest at 5.33% per annum from 26 March 2014. Mr Ong appealed in Civil Appeal No 60 of 2022.

1. Whether the assessment followed the measure of damages directed by the Court of Appeal
2. What value should be ascribed to the Subject Land under that measure
3. Whether interest should run from 26 March 2014 or from the date of the Court of Appeal's decision

The court found that the parties, their experts and the Judge had overlooked the second sentence of the Court of Appeal's direction. They valued the Subject Land in isolation, as if sold on the open market, rather than by reference to the value of the Sembulan Land that the parties had used to set the acquisition price. Using a higher development value would mean the price was paid on one value but refunded on another. Giving the expert evidence no weight, and rather than remit the matter, the court relied on its powers under s 41(6) of the Supreme Court of Judicature Act 1969 and O 19 r 7(4) of the Rules of Court 2021 to decide on the factual record.

The court inferred that a 2013 valuation report, which valued the Sembulan Land excluding the Subject Land at RM 379,600,000 over 234.5 acres, was the value the parties relied on. The respondent accepted it had been used as a reference or guide but did not say what other value was used. Since the pleadings gave the plot's area as 1.459 acres, and there was no evidence that it carried a higher proportionate value, the court applied a straight proportion without uplift, giving RM 2,361,776, of which 77.5% was payable.

On interest, Mr Ong did not dispute that the cause of action arose on 26 March 2014. Interest runs from when the entitlement arose, and any loss he suffered from not using the land meanwhile was a separate matter. On costs, Mr Ong had succeeded on a point he never raised, while the respondent had used the wrong approach.

The Appellate Division allowed the appeal and set aside the Judge's award of damages. Mr Ong was ordered to pay Borneo Ventures RM 1,830,376 as damages, with interest at 5.33% from 26 March 2014 to the date of full payment. The Judge's costs order was set aside and each party was to bear its own costs of the appeal and of the assessment below.