Commercial Law

ABDUL RASHID ABDUL MAJID v ISLAND GOLF PROPERTIES SDN BHD 1989 3 MLJ 376 ISSUE In this case, the issues is whether the dining table was entitled to levy and peck fees known as developing fees from members? PRINCIPLES The defendants owned, managed and operate a social golf ordination. Membership of the ennead is of the sideline types which are honorary social status, ordinary membership, ordinary transferable membership, subscribing membership, institutional bodily membership, expatriate transferable membership, ordinary social membership, term membership and tour membership.Under the reign over 3 of the clubs linguistic rules provided, inter alia, that the club was a proprietary club, of which the defendants were the proprietors with a gameboard of directors responsible for the policies, management and procedure of the club. Rule 5 of the rules provided, inter alia, that all members shall non, by reason of his membership, be infra any financial liability except for pay ment of his annual subscription and any opposite sums due under or levied under the rules and by laws to the defendants. The complainant is an ordinary transferable membership.The plaintiff applied to become a member of the club by submitting the necessary activity form and duly executed a declaration contained therein which states, inter alia, that he real and agreed that the board of the defendants had fix responsible for the policies, management and operation of the club with the power to increase entrance fees and subscription and to levy and additional charges to meet phthisis and it also has the mend right to amend, vary, add to or formulate much(prenominal) rules, terms and conditions of the club including the withdrawal or addition of benefits and privileges of members as if may in its absolute discretion deem necessary. 1Page The board sought to levy and collects the development fees pursuant to its power under the rules. Rule 33 of the clubs rules provided, inter alia, that the board shall be the sole leave for the interpretation of the rules and by laws make there under and that the finding of the board shall be final and binding on all members.The dominion that is under Section 2 (a) of the Contracts Act 1950, a proposition is made when one person signifies to another his willingness to do or to abstain from doing anything with a view to obtaining the assent of that other to such act or abstinence. Moreover, the intent is invitation to treat which an invitation to make offer, negotiate or deal and has no legitimate consequence and cannot be accepted to bring a tighten into existence. The communication of a proposal is complete when it comes to the knowledge of the person to whom it made which under Section 4(1) of the Contracts Act 1950. This means that an offer or proposal is telling once it is communicating to the offeree by the offeree.Besides that, under Section 10 of the Contracts Act 1950 is already mention that all agreeme nt are trim down if they are made by the free consent of percentageies competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. The situation is similar in the case of Bomanji Ardeshir Wadia & Ors v Secretary of State AIR (1929) PC 34 wherein it the decision of the Privy Council was said nothing is better settled than that when parties contract entered into a formal contract that contract must be construed check to its own terms and be explained or interpreted by the tooth root communing which led up to it. Another related case is Baker v Jones & Ors (1954) 2 All ER Lynskey J said that the contract is contained in, or to be implied from the rules. The courts must consider such a contract as they would consider any other contract.Although parties to a contract may in general, make any contract they like, there are certain limitations impose by public insurance policy and one of those limitations may be that pa rties cannot, by contract, oust the ordinary courts from jurisdiction. 2Page JUDGEMENT The court held that declaring that the defendants board was not entitled to levy and collects the fees because the plaintiffs application for membership was merely a preliminary step. The offer for membership came from the defendants after they had considered the plaintiffs application. The contract between the plaintiff accepted the offer by making the payment of the entrance fees and the first subscription. Therefore, the declaration in the application forms as not part of the contract. It is just an antecedent communication. The only contract between the plaintiff and the defendants was the rules of the club.The authority to levy fees must clearly be given by the rules of the club and there was no such authority under the rules. Rule 33 clearly made the board the sole authority for the interpretation of the rules and as it purported to oust the court from their jurisdiction the rule was contrar y to public policy and therefore void. 3Page culture The conclusion for this case is the board was not entitled to levy and collect fees known as development fees from members. For the interpretation of the rules, this is contrary to public policy and therefore void. Thus, a declaration of intention or an invitation to treat, so, all fees placid as development fees are re compensable to the plaintiff and costs to be paid by the defendants.Otherwise, the offer must be communicated to the offeree which under Section 9 of the Contract Act 1950 is the exercise of power by the offeree indicating his assent to the motion in response to the offer. The communication of an offer or a proposal is deemed to have been made by any act or heedlessness of the party proposing by which he intends to communicate the proposal or which has the ready of communicating it. Therefore, the declaration in the application form was not part of the contract unless the plaintiff make pay sum of the fees whi ch binding the rules of the club. It is shape for parties in the course of preliminary negotiation to make statements to each other but not all statement can be interpreted as an offer that can be accepted to bring intimately a contract. 4Page