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2024 MarsdenLR 3180
HIGH COURT MALAYA KUALA LUMPUR
EUREKA PROPERTY MANAGEMENT SDN BHD – Appellant
Versus
YAP SEONG SEE & ANOR – Respondent
[Civil Suit No: WA-22NCvC-842-11/2019]
The court affirmed that all payments made under a Sale and Purchase Agreement must be refunded to the purchaser, regardless of the payment source, following a binding Court of Appeal Order.
Headnote:(A) Sale and Purchase Agreement – Terms and Conditions – Court of Appeal Order – Refund of payments made under SPA – The plaintiff sought recovery of amounts paid under the SPA after its termination, while the first defendant counterclaimed for the loan amount. The court found that the first defendant was obligated to refund all payments made by the plaintiff under the SPA, including the deposit and additional sums paid, as the first defendant had received these payments regardless of their source. (Paras 30, 38, 39, 64)
(B) Counterclaims – The second defendant's counterclaim for the redemption sum was upheld, as the first defendant was found liable to repay the amount due to the second defendant. The plaintiff's claim against the second defendant was dismissed. (Paras 64, 66)
Facts of the case: The plaintiff entered into a SPA with the first defendant for a property purchase, which was later terminated. The plaintiff sought to recover payments made, while the first defendant counterclaimed for a loan. (Paras 1-25)
Findings of Court: The court ruled that the first defendant must refund the plaintiff's payments and upheld the second defendant's counterclaim for the redemption sum. (Paras 64-66)
Issues: The main issues included the enforceability of the Court of Appeal Order and the entitlement of the plaintiff to recover payments made under the SPA. (Paras 26-27)
Ratio Decidendi: The court emphasized that the first defendant was bound by the Court of Appeal Order to refund all payments made by the plaintiff under the SPA, regardless of the source of those payments. (Paras 38-39)
Result: The plaintiff's claim against the first defendant was partially allowed, while the second defendant's counterclaims were upheld.
JUDGMENT
Preliminary
[1] This is a dispute involving the plaintiff, who is the purchaser of a property, the first defendant, who is the vendor, and the second defendant, who is the financier. As a result of the sale and purchase of such property being terminated, the plaintiff has brought this action to recover the amount paid to the first defendant. Additionally, the second defendant has counterclaimed for the loan it advanced to the plaintiff.
Background Facts
[2] The parties to the dispute before me have all agreed on a common chronology of facts since the facts are largely undisputed. I commend their efforts. In this regard, considering that the facts are interrelated, it becomes necessary to reproduce them in detail here in order to appreciate the nature and effect of the dispute between the parties.
[3] The first defendant was the registered owner of an office suite located at Mont Kiara Solaris ("Property"). By way of a Sale and Purchase Agreement dated 27 December 2004 ("original SPA"), the first defendant purchased the property from a developer for RM1,261,000.00.
[4] The first defendant obtained a loan from the second defendant in order to finance her purchase of the property from the developer. The first defendant, in consideration of the second defendant granting the loan to her, assigned all her rights, benefits, title and interest in the property to the second defendant by virtue of a Loan Agreement Cum Deed of Assignment dated 19 September 2005. This loan resulted in the first defendant fully paying the developer for the property. To date, no separate strata title document has been issued for the property.
[5] Following this, the first defendant decided to sell the property to the plaintiff, pursuant to which the parties had entered into a Sale and Purchase Agreement dated 10 April 2008 ("SPA") with the following terms:
(a) It was agreed that the first defendant would sell the property free of encumbrances for RM2,000,000.00, of which a deposit of RM200,000.00 had been paid by the plaintiff at the time of the SPA's execution.
(b) The first defendant must obtain the developer's consent within one (1) month of the SPA date.
(c) The balance purchase price of RM1,800,000.00 must be paid by the plaintiff within three (3) months of receiving the developer's consent; otherwise, the plaintiff shall be entitled to a further period of one (1) month to pay the balance purchase price with interest at 10% per annum.
(d) The balance purchase price shall only be paid to the first defendant upon receipt of a duly executed Deed of Receipt and Reassignment between the first defendant and the second defendant, a duly executed Deed of Assignment between the first defendant and the plaintiff, and a certified true copy of the developer's undertaking.
(e) In the event that the first defendant breaches any provision of the SPA, the plaintiff shall terminate the SPA and the first defendant shall forthwith refund the plaintiff all money paid towards the purchase price free of interest. The first defendant shall also pay a sum equivalent to the deposit as compensation, and after that, neither party shall have any claim against the other.
[6] The developer's consent was received on 4 April 2008 and under the terms of the SPA, the completion date was 4 July 2008 with an extended completion date of 4 August 2008.
[7] A loan was subsequently obtained by the plaintiff from the second defendant sometime in July 2008. As security for the loan, the second defendant entered into a Loan Agreement Cum Assignment ("LACA") with the plaintiff as the assignor and two other individuals as borrowers, Tan Chong Ling and Chong Yen Li.
[8] A letter dated 22 July 2008 from the second defendant's solicitors to the first defendant's solicitors confirmed this loan of RM1,500,000.00 and requested that the first defendant undertake to return the loan if, for any reason, the plaintiff's assignment could not be perfected.
[9] Following that, through a
