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2021 MarsdenLR 627
HIGH COURT MALAYA KUALA LUMPUR
LIM CHONG YEAN – Appellant
Versus
KOPERASI PEGAWAI HUTAN MELAYU & ANOR (ENCL 119) – Respondent
[In The Writ Action No: 22NCvC-583-10/2013]
The primary goal of damages in contract breach is to restore the injured party to the position they would have been in had the breach not occurred, without allowing unjust enrichment.
Headnote:(A) Specific Performance – Assessment of Damages – Jurisdiction to award damages as a remedy for breach of contract – Damages assessed for Plaintiff's loss due to 1st Defendant's breach of the best endeavours clause in the Sales and Purchase Agreement (SPA 2006) – Market value on date of breach significant for calculating losses. (Paras 6-20, 36-43)
(B) Legal Principle – Discretionary power of courts must be judicially exercised when awarding damages. The measure of damages is compensatory, restoring parties to their pre-contractual position. (Paras 7-10)
(C) Facts of the case: Plaintiff filed for specific performance under SPA 2006 for a property, initially agreeing on RM650,000. The sale was not completed due to lack of approval from the relevant state authority. Plaintiff continued to occupy the property, later subletting it at a profit. (Paras 2.1-2.11)
(D) Findings of Court: The court awarded RM289,600.00 in damages based on the property market valuation and Plaintiff’s unjust enrichment through subletting. (Paras 63-65)
(E) Issues: The court considered the correct date of breach for assessing damages and Plaintiff's duty to mitigate losses, alongside unjust enrichment. (Paras 32-34, 56)
(F) Ratio Decidendi: Court ruled that damages should compensate for losses without unjust enrichment, highlighting that both parties benefited from the property transaction. (Paras 53-55)
(G) Result: Plaintiff awarded RM289,600.00 in damages plus refund of the deposit amount of RM69,220.97 with interest. (Paras 64-66)
JUDGMENTS
(ENCLOSURE 119 - ASSESSMENT OF DAMAGES)
A. Introduction
[1] This is an Appeal filed by the Plaintiff against this Court's award of damages following an assessment of damages carried out on 28 June 2021.
B. The Background Facts
[2] To have a better understanding and to fully appraise the issues relating to the award of damages, it is necessary for this Court to set out the factual background of this case which has led to the assessment of damages. The facts are as follows:
2.1 The Plaintiff (Lim Chong Yean) had filed a writ action against the 1st Defendant (Koperasi Pegawai Hutan Melayu) and the 2nd Defendant (Khong Yoke Bee) claiming inter alia; for specific Performance of a Sale And Purchase Agreement ("SPA 2006") dated 7 November 2006 between the 1st Defendant as the seller and the Plaintiff as the purchaser of a property held under PN 29830, Lot No 45478, Mukim Batu, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan ("the said Property") at the purchase price of RM650,000.00.
2.2 Pursuant to the SPA 2006, the Plaintiff had paid a deposit of RM65,000.00 to the 1st Defendant which was 10% of the purchase price.
2.3 It was a term and condition of the SPA 2006 that the transfer of the property was subject to the consent of the Jawatankuasa Kerja Tanah Wilayah Persekutuan Kuala Lumpur ("JKT").
2.4 Subsequent to the signing of the SPA 2006 and pending the completion of the SPA 2006, the Plaintiff had taken possession of the said property with the agreement of the 1st Defendant because the Plaintiff was in need of a place to put up his workers and use the said property as his store.
2.5 However, the sale of the said Property did not materialize as the consent of the JKT was not obtained wherein by a letter dated 19 January 2007, JKT informed the 1st Defendant that the transfer was not approved.
2.6 Although the SPA 2006 was not completed, the Plaintiff continued to retain possession of the said Property upon payment of rental at RM600.00 per month which was later increased to RM1,000.00 per month from November 2012 until August 2013.
2.7 Having occupied the said property since the signing of the SPA 2006 and continued to occupy the said property despite not obtaining the approval from the authority to complete the sale, the Plaintiff had asserted that on September 2012 he had paid the quit rent, the assessment rate, and the Indah Water bill due over the said property as requested by the 1st Defendant.
2.8 In 2012, the 1st Defendant by a Sale and Purchase Agreement dated 27 November 2012 (SPA 2012) had sold the said Property to the 2nd Defendant at the price of RM1,430,000.00.
2.9 On 22 August 2013, the 2nd Defendant was successfully registered as the registered proprietor of the said Property.
2.10 When the Plaintiff came to know that the 2nd Defendant had purchased the said property and thereafter successfully registered the said property under her name, the Plaintiff (on the premise that there exists a legitimate expectation that SPA 2006 will be fully executed and the 1st Defendant would fulfill its obligations under the said SPA 2006) asserts that the 1st Defendant had in bad faith (mala fide) sold the said Property to the 2nd Defendant at the price of RM1,430,000.00.
2.11 Standing on the footing that the SPA 2006 is still enforceable and has not been terminated and that the 1st Defendant has failed to fulfill its obligations namely; to use or to exercise its best endeavours and efforts to obtain the consent of the JKT, the Plaintiff had initiated this writ action against the 1st and 2nd Defendants.
The Full trial in the High Court
2.12 At the end of the full trial, on 18 May 2015, the High Court Judge (HCJ) allowed the Plaintiff's claim for an order for specific performance of the said SPA and held that the 1st Defendant failed to fulfill its obligation under cl 3.2 SPA to use its best endeavours and efforts in obtaining the approval / consent of the JKT.
2.13 The 1st and the 2nd Defendants who were not satisfied with the
