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2025 MarsdenLR 337
HIGH COURT MALAYA SHAH ALAM
ENG HAN PROPERTY SDN BHD – Appellant
Versus
SALAMON RAJ ADAICKALAM – Respondent
[Originating Summons No: BA-24NCvC-1821-08/2024]
A purchaser's failure to comply with payment terms in a Sale and Purchase Agreement constitutes a breach, allowing the vendor to terminate the agreement and seek consequential orders.
Headnote:(A) Contracts Act 1950 - Sections 56(1), 74(1), 75, and 76 - Sale and Purchase Agreement - Termination of SPA due to breach by purchaser - Plaintiff sought declaratory orders following Defendant's failure to comply with payment terms - Court found Defendant breached SPA, justifying termination and consequential orders. (Paras 31, 42)
(B) Breach of Contract - Obligation to pay purchase price is fundamental - Innocent party entitled to terminate contract upon breach. (Paras 15, 16)
(C) Locus Standi - Plaintiff has the authority to act on behalf of the original proprietor of the land despite not being a party to the proceedings. (Paras 40, 41)
Facts of the case:
The Plaintiff, a developer, terminated the SPA with the Defendant due to non-payment of the outstanding purchase price of RM545,100.00, despite the Defendant having obtained financing from Public Bank Berhad. The Defendant did not dispute the termination but argued that the Plaintiff should have pursued the financier.
Findings of Court:
The Court held that the Defendant breached the SPA, allowing the Plaintiff to terminate the agreement and seek consequential orders, including the retransfer of the land title.
Issues: Whether the Defendant breached the SPA and if the Plaintiff is entitled to the consequential orders sought.
Ratio Decidendi: The Court ruled that the Defendant's failure to comply with payment terms constituted a breach, justifying the Plaintiff's termination of the SPA and the consequential orders sought.
Result: Plaintiff's claims allowed.
JUDGMENT
Introduction
[1] A Sale and Purchase Agreement (SPA) was executed between the Plaintiff (as the Developer) and the Proprietor of the Land (who is not a party to this Suit), as the vendor, on one side, and the Defendant, as the purchaser, on the other. The Defendant required financing to purchase the property, and Public Bank Berhad issued a Letter of Undertaking (subject to certain conditions) to the Plaintiff. As is customary in SPAs between developers and purchasers, the title was transferred to the purchaser to enable the purchaser to charge the land to a financial institution. However, Public Bank Berhad later withdrew the Letter of Undertaking it had issued, leading the Plaintiff to terminate the SPA with the Defendant. Unlike typical cases in land transactions that involve a fraudster or wrongdoer, it appears that none of the parties here have committed any serious transgressions.
The Poser
[2] The overriding issue in the present matter is whether the Defendant (as the purchaser) has breached the SPA and thereby entitling the Plaintiff (as the vendor) to terminate the SPA.
[3] In the event that the answer to the question canvassed above is in the affirmative, the ensuing issue is whether the Plaintiff is entitled for the consequential orders as prayed in the Originating Summons.
The Plaintiff's Case And Contentions
[4] The reliefs sought by the Plaintiff in its Originating Summons are as follows:
• Satu (1) deklarasi bahawa Defendan telah mungkir Perjanjian Jual Beli bertarikh 15 December 2022 (Perjanjian Jual Beli tersebut) dan penamatan Perjanjian Jual Beli tersebut oleh Plaintif adalah sah;
• Bahawa hakmilik Defendan dalam hartanah yang dipegang di bawah Hakmilik No Pajakan Negeri 62471, Lot 57564, Mukim Bukit Raja, Daerah Petaling, Negeri Selangor ("Hartanah tersebut") hendaklah dibatalkan dan dikeluarkan daripada suratan hakmilik Hartanah tersebut oleh Pejabat Daerah dan Tanah yang berkenaan;
• Bahawa Pejabat Daerah dan Tanah yang berkenaan hendaklah mendaftarkan kembali Green Hill Development Sd Bhd sebagai pemilik berdaftar di dalam suratan hakmilik Hartanah tersebut;
• Bahawa Gadaian yang dimasukkan oleh Public Bank Berhad terhadap Hartanah tersebut hendaklah dibatalkan dan dikeluarkan daripada suratan hakmilik Hartanah tersebut dan Pejabat Daerah dan Tanah yang berkenaan hendaklah mendaftarkan dan/atau mengendorskan pembatalan Gadaian tersebut di dalam suratan hakmilik Hartanah tersebut;
• Bahawa Pendaftar Hakmilik Negeri Selangor atau mana-mana pihak berkuasa yang berkenaan wajib mengambil langkah-langkah yang diperlukan untuk memberi kesan kepada Perintah ini.
[5] In other words, the Plaintiff through its Originating Summons is seeking a number of declaratory orders and these include a declaration that the SPA has been validity terminated, that the charge over the land be removed and that the title to the land is retransferred to Green Hill Development Sdn Bhd (the original Proprietor of the Land).
[6] The Plaintiff's primary contention is premised on the argument that since the Defendant has breached a number of the terms in the SPA, it was entitled to terminate the SPA and has indeed validly terminated the SPA. The consequential orders sought are the natural consequences that flow from the breach and termination of the SPA.
[7] The Plaintiff made references to a number of what it regards as the salient terms in the SPA. The Clauses highlighted by the Plaintiff are as follows:
• Clause 4 of the SPA: Purchase Price is RM948,000.00;
• Clause 5(1) of the SPA: Purchase Price shall be paid by the Defendant / Purchaser to the Plaintiff / Developer by instalments and at the time and in the manner as prescribed in the Third Schedule;
• Clause 5(2) of the SPA: Every notice referred to in the Third Schedule requesting for payment shall be supported by a certificate signed by the Plaintiff / Developer's architect or engineer in charge of the housing development and every such certificate so signed shall be th
