A three-member bench chaired by Justice Ruzima Ghazali unanimously allowed the appeal of Saveway Solutions Sdn Bhd and Lim Wei Leong against liability for fraud, misrepresentation and illegality.
Ruzima said that while the agreements revealed features of a franchise within the meaning of the Franchise Act 1998, both parties had acted in pari delicto (with equal fault).
“As such, no remedies arising from the illegality of those agreements lie in favour of the plaintiffs,” he said.
The bench also awarded RM50,000 in costs to Saveway Solutions and Lim.
Justices Azizul Azmi Adnan and Firuz Jaffril also sat on the panel.
The appeal arose after the Kuala Lumpur High Court ruled last year that Saveway Solutions and Lim, the defendants in the suit, were liable for fraud, misrepresentation and failing to obtain approval from the education ministry to run the programme.
The trial court found that the agreements were tainted by illegality as they contravened the Franchise Act and the Education Act 1996.
As a result, the High Court declared void all agreements entered into between the defendants and the plaintiffs – Superbrain Training Centre, The Growing Tree Enrichment Centre, BZ Mind Art & Creative Centre, Bright Training Centre, Neuro Development Sdn Bhd, and Insegnate Sdn Bhd.
The High Court had also held Saveway Solutions and Lim jointly and severally liable for all losses and damages suffered by the plaintiffs.
It had ordered them to refund the plaintiffs RM555,000, and pay an additional RM1.8 million in exemplary damages, and general damages to be assessed by the court registrar, as well as with RM180,000 in costs.
The plaintiffs had in 2016 and 2017 invested RM555,000 in an education programme titled “Brain-Zone Full Brain”, an IQ enhancement plan for children, after reading a Facebook advertisement and attending a presentation.
They later discovered that Saveway Solutions had not registered the programme with the education ministry or the domestic trade and consumer affairs ministry, which they claimed rendered the programme illegal.
Lawyers Kwan Will Sen, Koh Kean Kang and Yong Siew Lee represented Saveway Solutions and Lim, while R Rishikessingam and Daljit Singh appeared for the six plaintiffs.