The remedy of specific performance is not available to vendors under a sale and purchase agreement when the agreement's terms explicitly limit remedies for breach.

JUDGMENT

Elaine Yap Chin Gaik JC:

Introduction

[1] The Plaintiffs were purchasers of a condominium unit developed by the 2nd Defendant ("Property"). The Property was purchased on 15 March 2018 for RM1,138,790.00 under a guaranteed rental and buyback scheme by the 2nd Defendant ("Developer"), which terms are set out in a Tenancy Agreement dated 29 July 2020 between the Plaintiffs and the 1st Defendant as the designated "tenant" of the Property ("Tenancy Agreement").

[2] The Plaintiffs decided to exercise their option to sell the Property back to the Developer at the end of the 2-year guaranteed rental period under the Tenancy Agreement for a fixed RM100,000.00 profit ("Option to Sell"). The 1st Defendant, as the counterparty to the Tenancy Agreement, nominated the 2nd Defendant as the purchaser for the buyback and a Sale and Purchase Agreement dated 29 May 2023 ("SPA") was negotiated and signed.

[3] The 2nd Defendant failed to pay the balance purchase price according to the SPA and sought an extension of time to complete the sale. The Plaintiffs did not agree and filed this Originating Summons to seek Judgment for the balance purchase price of RM1,114,911.00 due under the SPA ("Balance Purchase Price") together with 4% p.a. late payment interest ("Late Payment Interest") jointly and severally against the 1st and 2nd Defendants.

Issue For Determination

[4] Clause 3(b) of the SPA imposes liability against the 2nd Defendant to pay the Balance Purchase Price to the Plaintiffs on or before the expiry of the completion period (4 months from the date of the SPA or as extended by agreement per cl 3.2, subject to the imposition of Late Payment Interest) ("Completion Date"). The 2nd Defendant admits that it had defaulted on this payment obligation under the SPA.

[5] However, the 2nd Defendant contends that the terms of the SPA as negotiated, excluded the remedy of specific performance at the instance of the Plaintiffs (as purchasers). The 2nd Defendant relies on cl 11.1 of the SPA which provides that the Plaintiffs are only entitled to terminate the SPA and forfeit the deposits paid as agreed liquidated damages.

[6] On the other hand, the Plaintiffs contend that:

(a) they are not terminating the SPA as provided for in cl 11.1 of the SPA nor seeking specific performance of the SPA, but are claiming damages for breach of contract by the Defendants, citing s 74 of the Contracts Act 1950 ;

(b) in any event, cl 11.1 of the SPA does not preclude the remedy of specific performance to the Plaintiffs as a common law remedy and the Plaintiffs are entitled to make an election; and

(c) clause 6(g) of the Tenancy Agreement imposes a co-31;extensive liability against the 1st Defendant to pay the Balance Purchase Price and Late Payment Interest to the Plaintiffs.

[7] After hearing parties on 10 December 2024, I found for the Defendants and dismissed the Plaintiffs' Originating Summons. The reasons for this conclusion are as set out below.

Analysis And Findings

The Plaintiffs' Case for Damages

[8] The Plaintiffs have paid the 2nd Defendant in full for the Property under the original sale by the 2nd Defendant to the Plaintiffs. That transaction was governed by a sale and purchase agreement and a deed of mutual covenant (referred to in the SPA as "Principal Agreements'). The Principal Agreements were still executory in that strata title has not been transferred.

[9] It is not clear why strata title has not been transferred to the Plaintiffs, but the parties acknowledge that the Plaintiffs are the beneficial owners of the Property. It is this Court 's view that the Plaintiffs' claim for the Balance Purchase Price and Late Payment Interest as special damages for the 2nd Defendant's breach of the SPA to buy the Property is unsustainable without addressing the effect of the Principal Agreements.

[10] As the Plaintiffs have fully paid for the Property and the Principal Agreements have not been impeached in any way, the 2nd Defendant is and was at all material times a bare tru