Soon Hoe Chuan v Glomac Berhad

Appellant(s): Soon Hoe Chuan

Respondent(s): Glomac Berhad

• YA Datuk Azhahari Kamal bin Ramli
• YA Dato' Ahmad Kamal Bin Md. Shahid
• YA Dato' Ong Chee Kwan

• The appellant entered into a Letter of Appointment (LOA) with the respondent to serve as the chief executive officer of the respondent’s subsidiary, specifically to manage a 90-acre residential joint venture project.
• The joint venture partner defaulted on its loan obligations and was placed under receivership, leading the subsidiary to eventually purchase the entire 200-acre land through a public tender and develop a solo, large-scale township.
• The appellant initiated legal action against the respondent claiming management fees and profit sharing based on the terms of the LOA for the expanded 200-acre development.

• Whether the LOA was valid despite referring to a non-existent meeting and whether a parent company can contractually bind itself to appoint and remunerate an officer for its subsidiary.
• Whether an adverse inference under section 114(g) of the Evidence Act 1950 should be drawn against the respondent for failing to call the director who executed the LOA to testify regarding his authority and the document's authenticity.
• Whether the supervening receivership of the joint venture partner and the subsequent solo development of a significantly larger township constituted frustration of the contract.

• The Court held that the LOA was a valid and binding agreement at its inception, ruling that an erroneous reference to a meeting in a recital does not vitiate the operative terms of a contract expressly accepted by the parties.
• The Court found that the director who signed the LOA possessed at least ostensible authority to bind the respondent, and an adverse inference was invoked against the respondent for failing to call him as a witness to rebut the appellant's evidence.
• The Court dismissed the appeal, concluding that the LOA was discharged by frustration because the transition from a 90-acre joint venture to a 200-acre solo township development represented a radical change in the nature of the contractual adventure.