Tutorial work.

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INTRODUCTION TO ADVOCACY
LEGAL MEMORANDUM
TO : PROF. DR. FARIDAH BT JALIL
FROM : GROUP 6 (RESPONDENTS)
a. NUR ALIAH BT AMRAN (A166840)
b. TANG JIA YEARN (A168342)
DATE : 2 OCT 2019
FILE : 2010-2
SUBJECT : ANALYSIS ON THE MASTER AGENCY AGREEMENT BETWEENMMESB
AND TAB
1.0 FACTS
Telecom Asia Berhad (“TAB”), an intergrated telecommunications corporation company
faced difficulties in collecting payments through banking systems for services rendered
from Iran due to sanctions since January 2011.
On November 2011, My Money Exchange Sdn Bhd (“MMESB”) had represented TAB to
arrange collection of debts in Iran and will convert the collected payment into Malaysian
Ringgit through money changing network which was known as “Hiwalah”.
TAB and MMESE entered into a Master Agency Agreement (“the Agreement”) on
02.02.2012. Pursuant to the Agreement, TAB agreed to pay commission to MMESB at
the rate of 10% on the Conversion Proceeds (“the Agency Commission”) as stated in the
Agreement.
On 01.03.2013, MMESB forwarded a sum of RM 15 million (the Conversion Proceeds) to
TAB being the outstanding debts due from TAB’s clients in Iran and requested TAB to
pay the Agency Commission for a sum of RM 1,500,000.00.
On 31.04.2011, TAB issued a letter to MMESB informing that the Agency Commission
was being processed by the TAB’s Finance Department. On 01.10.2013, another
reminder had been issued by MMESB to TAB for settlement of the Agency Commission.
TAB later informed MMESB that the Agency Commission could not be paid to MMESB
unless MMESB could present documentary evidence to show that MMESB is licensed as
a Class D Foreign Currency Wholesale Dealer.
On 01.10.2014, TAB and MMSB decided to hold a meeting where it was acknowledged
by both parties that the Agency Agreement will only be paid within 6 months after
MMESB had presented the said license.
In July 2015, it has been know that MMESB’s license could not be renewed because they

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are unable to meet the capital adequacy requirements imposed by Bank Negara
Malaysia.
On the next month, MMESB wrote to TAB that their license could not be renewed. On the
basis that the license was not a pre-condition stated in the Agreement, MMESB
demanded the commission immediately but to no avail.
15.04.2017, MMESB appointed solicitors to issue a letter of demand to TAB, demanding
a sum of RM 1,500,000.00 together with an interest rate of 5% per annum calculated
from 02.03.2011 until the date of settlement. Even so, TAB refuses to pay.
On 04.08.2017, MMESB had filled a writ action against TAB for breach of contract at the
High Court of Malaya in Kuala Lumpur to recover the sum of RM 1,500,000.00 together
with an interest rate of 5% per annum calculated from 02.03.2011 until the date of
settlement.
2.0 ISSUES
a) Whether MMESB’s claim is time barred under Limitation Act 1953
b) Whether the Master Agency Agreement is void under section 24 of Contracts Act
1950;
c) Whether the letters marked ‘without prejudice’ as issued by TAB are not admissible
as evidence since those letters should be considered as ‘privileged communication’;
d) Whether MMESB is entitled to claim the Agency Commission under the alternative
cause of action of ‘unjust enrichment’ as decided by Federal Court in the case of
Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 463
3.0 CONCLUSION
a) MMESB’s claim is time barred under Limitation Act 1953;
b) The Master Agency Agreement is void under section 24 of Contracts Act 1950;
c) The letters marked ‘without prejudice’ as issued by TAB are not admissible as
evidence since those letters should be considered as ‘privileged communication’; and
d) MMESB is not entitled to claim the Agency Commission under the alternative cause
of action of ‘unjust enrichment” as decided by Federal Court in the case of Dream
Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453
4.0 DISCUSSION
a) MMESB’s claim is time barred under Limitation Act 1953;
Even though it can be contented that TAB had breached the contract, the cause of
action has been left too long under Section 6(1)(a) of the Limitation Act 1953 where it
states that an action can be brought 6 years from the date the contract was breached.

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The date where the cause of action happened and the suit filed by MMESB has
exceeded the limitation of time as the limitation does not begin to run until there is a
complete cause of action, and a cause of action is not complete when all the facts
have not happened which are material to be proved to entitle the plaintiff to succeed
(See: Credit Corporation (M) Bhd v. Fong Tak Sin [1991] 1 MLJ 409; Lim Kean v.
Choo Koon [1970] 1 MLJ 158)
b) The Master Agency Agreement is void under section 24 of Contracts Act 1950
Section 24 states that a contract is void if it was found illegal if it satisfies a few
elements under the said section. TAB could said that the act of Hiwalah is illegal and
prohibited by the law as it concerns money laundering. (See: Pang Mun Chung &
Anor v Cheong Huey Charn [2018] MLJU 459; Lim Kar Bee V Duofortis Properties
(M) Sdn Bhd [1992] 2 MLJ 281)
c) The letters marked ‘without prejudice’ as issued by TAB are not admissible as
evidence since those letters should be considered as ‘privileged communication
Abdul Malik Ishak J in the case of Oh Kuang Ling v Associated Wood Industries Sdn
Bhd [1995] 4 MLJ 390 has stated,
“To me, without prejudice communications can be said to be privileged
communications. Two common features must be present before this privileged
communications could be activated:
 some individuals must be in dispute and that dispute led them to negotiate
with one another; and
 the communication between the parties contain suggested terms that would
finally lead to the settlement of the dispute.”
The dispute in which they tried to negotiate is the full settlement of a sum of
RM1,500,000 with interest at the rate of 5% per annum calculated from 2.3.2013 until
date of full settlement, that was demanded by MMESB.
TAB has proposed a counter-offer of RMM750,000 as full and final settlement
through a without prejudice letter.
MMESB then proposed another counter-offer of RM1,300,00. TAB, rejecting the offer,
issued another a without prejudice offer of RM950,000. However, MMESB insisted on
RM1,300,000, which they stated that they will proceed with legal action to recover the
money if TAB fails to pay on or before 28.2.2019. This fact shows that this
communication was in contemplation of litigation.
Thus, TAB’s letters fulfill the two common features of privileged communication as
explained by Abdul Malik Ishak J, as they are letters that discuss of the dispute,
involving a negotiation that would lead to the settlement of the dispute. Without
prejudice communication is said to be activated.
In addition, the without prejudice communication applies to both the applicant and
respondent. Daya Anika Sdn Bhd v Kuan Ah Hock [1998] 6 MLJ 537 at 541 Per
Kamalanathan J:

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“Once a letter is labeled ‘without prejudice’, it automatically gives rise to an
understanding that all previous (Oliver v Nautilus Steam Shipping Co Ltd [1903] 2 KB
639) and, I may add, subsequent (Davis v Nyland (1975) 10 SASR 76 at 105)
negotiations between the parties will be similarly protected from disclosure.”
d) MMESB is not entitled to claim the Agency Commission under the alternative cause
of action of ‘unjust enrichment” as decided by Federal Court in the case of Dream
Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453
As stated by Goff & Jones on The Law of Unjust Enrichment (8th Ed), (para 4-01),
'the law of unjust enrichment is concerned with transfers of value between claimants
and defendants, and a claim in unjust enrichment is 'not a claim for compensation for
loss, but for recovery of a benefit unjustly gained by a defendant at the expense of
the claimant''.
Four questions arise when discussing about this matter:
(1) Has TAB benefited or been enriched?
Benefits are only capable of generating claims in unjust enrichment if they have
monetary value (see Goff & Jones on The Law of Unjust Enrichment para 4-03). TAB
has received the service from MMESB to collect the debts in Iran and in turn TAB will
pay 10% commission of the Conversion Proceeds. The commision is of monetary
value.
(2) Was the enrichment at the expense of MMESB?
The second requirement is in dispute, as the money is originally from TAB’s clients
itself.
(3) Was the enrichment unjust?
The Agency Commission as spelt out in the agreement stated that TAB would pay
10% commission to MMESB. However, TAB has modified the contract and added the
condition which is acknowledged in writing by both parties that the Agency
Commission will only be paid within 6 months after MMESB produce the license as
Class D Foreign Currency Wholesale Dealer. This shows that MMESB agreed to the
modification and the evidence can be seen in the meeting minutes on 1.4.2014.
Therefore, TAB was not unjustly enriched.
5.0 SOURCES CONSULTED
1. Limitation Act 1953 Section 6
2. Dusun Desaru Sdn Bhd & Anor v Wang Ah Yu & Ors [1999] 2 CLJ
3. Section 24 Contracts Act 1950
4. BK Fleet Management Sdn Bhd v Stanson Marketing Sdn Bhd
5. Doctrine of Illegality by Sharifah Suhana Ahmad
6. Madu Jaya Development Sdn Bhd v Kosbina Konsult (K) Sdn Bhd [2017] MLJU

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7. Air Express International (M) Sdn Bhd v Misc Agencies Sdn Bhd [2012] 4 MLJ 59
8. Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441
9. Indran a/l N Jeganathan v Nithiyani a/p K Kulaveerasingam [2011] 7 MLJ 23
10. Daya Anika Sdn Bhd v Kuan Ah Hock [1998] 6 MLJ 537
11. Oh Kuang Ling v Associated Wood Industries Sdn Bhd [1995] 4 MLJ 390
12. Oliver v Nautilus Steam Shipping Co Ltd [1903] 2 KB 639
13. Davis v Nyland (1975) 10 SASR 76
14. The Law of Unjust Enrichment (8th Ed)