Khiew Ju Meng & Ors v Lai Kim Wa

Appellant(s):

• Khiew Ju Meng
• MTS Didactic Sdn Bhd
• Lee Van Fang

Respondent(s): Lai Kim Wa

• YA Dato' Nordin Bin Hassan
• YA Dato' Che Mohd Ruzima Bin Ghazali
• YA Datuk Azimah binti Omar

• The plaintiff and the first defendant, long-time friends and business partners, entered into an oral agreement whereby the plaintiff would receive 50% shareholding/assets in the company, a 3% sales commission, and a vehicle, in exchange for managing the company's sales and operations.
• After the defendants failed to honour the agreement (issuing only a fraction of the promised shares, withholding commissions, and fraudulently taking back the vehicle), the plaintiff resigned and sued for breach of contract, constructive trust, and fraud.
• The High Court Judge unilaterally bifurcated the trial into liability and quantum stages, delivered an oral decision on liability, then later made substantive alterations to that decision (on reflective loss and the basis for calculating sales commission) after the quantum stage had concluded, with the parties having mutually agreed to postpone any appeal until a final judgment covering both stages was delivered.

• Whether, in a bifurcated trial where perfection of the court's order is postponed until conclusion of the quantum stage, the trial judge remains competent (not functus officio) to alter his earlier liability findings before the order is sealed.
• Whether the Court of Appeal's decision to overturn the High Court's "latent alterations" was properly grounded in substantive legal error (on reflective loss principle and commission calculation) rather than any breach of the functus officio doctrine.
• Whether leave questions premised on a factual assumption (that bifurcation produced two separate perfected judgments) were academic and need not be answered where that assumption did not reflect the actual facts of the case.

• The Court held that the High Court was not functus officio, as the parties had mutually agreed to postpone perfection of the judgment until after the quantum stage concluded, meaning the judge retained inherent jurisdiction to vary his decision before sealing the order.
• The Court found that the true ratio of the Court of Appeal's decision lay in the substantive impropriety of the High Court's alterations — specifically, the erroneous ex post facto application of the reflective loss principle and the improper narrowing of sales commission to "personal sale" rather than "total sale" — not in any functus officio violation.
• As the questions of law were premised on a factual scenario not borne out by the record, the Court declined to answer them, held that the Court of Appeal's ultimate conclusion was correct notwithstanding any ancillary imprecision on functus officio, and dismissed the appeal with costs of RM50,000 to the respondent.