exclusion clauses which absolve general secondary obligations).Ĭlause 12 and section 29 which are central to this appeal, read as follows – Whether section 29 of the Act may be invoked to strike down and invalidate an exclusion clause which negates the contract breaker’s liability to pay compensation for non-performance of that contract (i.e.
exclusion clauses that absolve primary obligations) Whether section 29 of the Act may be invoked to strike down and invalidate an exclusion clause which exonerates a contract breaker of liability for a breach of that contract (i.e.Leave was granted to the Defendant to appeal to the Federal Court on two questions of law – The Plaintiffs’ appeal was allowed by the Court of Appeal. The Plaintiffs’ claim was dismissed by the High Court which held that Clause 12 of the Loan Agreement (“Clause 12”) absolved the Defendant from any liability to the Plaintiffs. The Plaintiffs filed a claim against the Defendant seeking damages resulting from the termination of the sale and purchase agreement on grounds of breach of contract and/or negligence and breach of fiduciary duty. The Defendant also did not request the developer to extend the payment due date in order to conduct the site visit.Īfter about one year, the sum remained unpaid and the developer terminated the sale and purchase agreement with the Plaintiffs on 10 April 2015. The Defendant did not inform the developer or the Plaintiffs of the requirement for a site visit as a condition to disburse payment. Three months after the payment due date, and despite five internal emails by the Defendant’s disbursement department, the branch did not conduct the site visit or respond to the e-mails. The documents were received by the Defendant on 13 March 2014 and the payment was due on 25 March 2014 (‘payment due date’).Īfter receiving the invoice, the disbursement department of the Defendant requested its branch to conduct a site visit to inspect the property. On or around 12 March 2014, the developer sent an invoice and an architect’s certificate to the Defendant seeking payment of RM25,557.12. Under the Loan Agreement, the Defendant was to make direct payment to the developer on behalf of the Plaintiffs when the progressive payments became due for payment. As the property was under construction, the loan was to be disbursed progressively against certificates of completion issued by the architect. The Defendant, CIMB Bank Berhad, granted a loan of RM715,487 to the Plaintiffs to finance the purchase of a property in Malaysia pursuant to a loan agreement dated 22 April 2008 (‘Loan Agreement’). The Plaintiffs, Anthony Lawrence Bourke and Alison Deborah Essex Bourke, are foreigners residing in the United Kingdom. On 17 December 2018, the Federal Court in CIMB Bank Berhad v Anthony Lawrence Bourke and Alison Deborah Essex Bourke 2 CLJ 1 held that an exclusion clause in a loan agreement was void and unenforceable as it was an agreement in restraint of legal proceedings under section 29 of the Contracts Act 1950 (‘the Act’) and was also contrary to public policy. Kok Chee Kheong discusses a significant decision on exclusion clauses.
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