Propnex Realty Sdn Bhd v Small Medium Enterprise Development Bank Malaysia Berhad

Appellant(s): Propnex Realty Sdn Bhd

Respondent(s): Small Medium Enterprise Development Bank Malaysia Berhad

• YA Dato' Mohd Nazlan Bin Mohd Ghazali
• YA Datuk Azimah binti Omar
• YA Dato' Faizah Binti Jamaludin

• The plaintiff, a registered estate agent, claimed professional fees and sales and services tax (SST) from the defendant bank for services rendered in the sale of the defendant's property.
• The Sessions Court dismissed the plaintiff's claim, but the High Court partly allowed the plaintiff's appeal, ordering payment on a quantum meruit basis, finding no express contract but acknowledging the plaintiff as the effective cause of sale.
• Both parties appealed to the Court of Appeal: the plaintiff sought full contractual fees, while the defendant challenged any liability for the fees.

• Whether a valid estate agency contract existed between the parties, either expressly or impliedly by conduct, for the sale of the property.
• Whether non-compliance with Rule 92(1) of the Valuers, Appraisers, Estate Agents Rules 1986 (VAEA Rules 1986), which requires financial obligations to be in writing, affects the formation or validity of an estate agency contract.
• Whether the plaintiff was the effective cause of the sale of the property to the purchaser's associate company.

• The Court of Appeal found that an estate agency contract existed between the parties, implied by their conduct and communications, thereby overturning the High Court's finding of no contract.
• The Court held that Rule 92(1) of the VAEA Rules 1986 pertains to the professional conduct of estate agents and a breach thereof does not invalidate the formation or validity of an estate agency contract, consistent with Federal Court precedent.
• The Court affirmed that the plaintiff was the effective cause of the sale and ordered the defendant to pay the full professional fee of 3% of the property's purchase price, but disallowed the 6% SST claim as it was not specified in the initial written communications.