Lai Kim Wa v Khiew Ju Meng & Ors

Appellant(s): Lai Kim Wa

Respondent(s):

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

• YA Dato' Sri Mariana binti Haji Yahya
• YA Dato' Lim Chong Fong
• YA Datuk Noorin binti Badaruddin

• The appellant entered into an oral agreement with the first respondent to join the second respondent company as a business partner, with promises of 50% shares and assets, 3% sales commission on total sales, and a car.
• The promised benefits were not fully delivered, leading the appellant to commence a suit against the respondents for breach of agreement and constructive trust, alleging fraudulent transactions by the first and third respondents.
• The High Court initially delivered an oral judgment on liability in the appellant's favour, ordering specific performance for shares and compensation, but subsequently varied these findings during the assessment of damages.

• Whether the High Court judge possessed the inherent power to unilaterally vary or reverse findings on liability, previously made in an oral judgment, during the subsequent assessment of damages.
• Whether the High Court erred in applying the reflective loss principle to deny the appellant compensation for the diminution in value of shares due to misappropriation of company assets.
• Whether the appellant was entitled to 3% commission on the total sales of the second respondent, as initially found, or only on sales personally procured by the appellant.

• The Court of Appeal found that the High Court judge erred by unilaterally departing from and varying the liability findings in the oral judgment during the assessment of damages.
• The Court held that this unilateral change in liability findings, after the assessment of damages had commenced and concluded, prejudiced the appellant by denying them the opportunity to adduce further evidence and legal submissions, thereby denying natural justice.
• The Court distinguished the facts from cases where a judge's inherent power to correct errors is justified, finding that this was not an exceptional circumstance warranting such a departure, and thus allowed the appeal, remitting the case for re-assessment of compensation based on the original liability findings in the oral judgment.