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2024 MarsdenLR 67

HIGH COURT MALAYA KUALA LUMPUR
DAVANAM CONSTRUCTIONS SDN BHD – Appellant
Versus
THP ENSTEK DEVELOPMENT SDN BHD – Respondent
[Civil Suit No: WA-22NCvC-595-08/2019]



Petitioner Advocates:Murad Ali Abdullah ,Respondent Advocate: Logan Sabapathy,Vivian Oh Xiao Hui,Elisabeth lype

A party cannot unilaterally amend a contract's core terms without consent from the other party, and failure to adhere to agreed terms constitutes a fundamental breach justifying termination.

Headnote:(A) Joint Venture Development Agreement – Termination – Plaintiff sought declaratory reliefs for unlawful termination of the Joint Venture Development Agreement dated 3 July 2009 – Defendant's termination upheld due to Plaintiff's fundamental breach of contract by failing to deliver the promised iconic development as per the Approved Master Plan – Plaintiff's claims for damages dismissed. (Paras 1, 118)

(B) Contractual Interpretation – The court emphasized the necessity of reading the Joint Venture Development Agreement in conjunction with antecedent agreements to ascertain the true context and obligations of the parties. (Paras 104, 105)

(C) Fundamental Breach – The court found that the Plaintiff's unilateral attempt to amend the development concept constituted a fundamental breach, justifying the Defendant's termination of the agreement. (Paras 114, 117)

Facts of the case: The Plaintiff claimed unlawful termination of a Joint Venture Development Agreement, seeking specific performance and damages. The Defendant countered that the Plaintiff failed to fulfill its obligations under the agreement, leading to termination. (Paras 1, 3)

Findings of Court: The court found that the Plaintiff's failure to deliver the promised development constituted a fundamental breach, validating the Defendant's termination of the agreement. (Paras 118)

Issues: Whether the Plaintiff's interpretation of its rights to amend the Approved Master Plan was valid and whether the Defendant's termination of the Joint Venture Development Agreement was lawful. (Paras 88)

Ratio Decidendi: The court ruled that the Plaintiff's interpretation of its rights was a misapprehension of the contract's terms, and the Defendant's termination was valid due to the Plaintiff's fundamental breach. (Paras 114, 117)

Result: Plaintiff's claim dismissed with costs. (Paras 118)

JUDGMENT

Azimah Omar J:

A. Introduction

[1] Based on its Statement of Claim, the Plaintiff's cause of action against the Defendant is primarily for declaratory reliefs to declare that the Defendant had unlawfully terminated a Joint Venture Development Agreement dated 3 July 2009 while seeking specific performance of the same. In the event that the Court was not minded to grant the relief of the specific performance, the Plaintiff alternatively sought for special damages (as specified in the Statement of Claim) and general damages either in the minimum sum of RM1,400,000,000.00 (1.4 Billion Ringgit) on the basis of an entitlement of 70% of the gross development value, or 70% of the total estimated profit.

[2] The full breadth of the remedies claimed by the Plaintiff were set out in para 60 of the Statement of Claim:

60. Wherefor, the Plaintiff claims against the Defendant and prays to the Court for the following relief and Orders:-

(a) A declaration that the notice of termination issued by the Defendant dated 27 October 2016 to the Plaintiff terminating the Joint Venture Development Agreement dated 3 July 2009 ("the JVDA") and the forfeiture of the deposit sum RM2,000,000.00 without leaving delivered vacant possession of the said Land, are null and void, a material breach of the JVDA, wrong in law and tantamounts to wrongful repudiation of the JVDA and indicates the Defendant's intention not to be bound by the JVDA;

(b) A declaration that the Defendant pays to the Plaintiff compensation and damages for the breach of the JVDA and for the wrongful and unlawful termination of the JVDA, to be assessed by the Registrar of the Court;

(c) An Order of Specific Performance of the JVDA by the Defendant or in lieu of Specific Performance compensation and damages to be paid by the Defendant to the Plaintiff, to be assessed by the Registrar of the Court;

(d) An Order for the Defendant to pay special damages to the Plaintiff as follows:-

(i) RM2,000,000.00 being the refund of the deposit sum paid to the Defendant;

(ii) RM3,671,706.00 paid by the Plaintiff for conversion of land use and sub division;

(iii) RM4,929,222.00 paid by Plaintiff for the construction of the Detention Ponds;

(iv) RM5,000,000.00 paid by Plaintiff to Ascenteus pursuant to the terms of Assignment Agreement dated 1 July 2010 in furtherance to the stipulations of the JVDA and the Addendum;

(v) RM100,268.00 wrongfully charged and claimed by the Defendant from the Plaintiff for quit rent;

(vi) RM250.00 wrongfully claimed by the Defendant from the Plaintiff for conversion of Lot 33;

(vii) RM1,088,997.00 paid by Plaintiff for architect fees;

(viii) RM376,532.00 paid by Plaintiff for consultancy fees;

(ix) RM144,421.00 incurred by Plaintiff for exchange losses;

(x) RM12,200.00 paid by Plaintiff for facilitation fees;

(xi) RM277,200.00 paid by Plaintiff for professional charges;

(xii) RM72,298.00 paid by Plaintiff for planning services;

(xiii) RM364,282.00 paid by Plaintiff for professional management fees;

(xiv) RM19,828.00 paid by Plaintiff for soil investigation works;

(xv) RM250,471.00 paid by Plaintiff for technical services fees;

(xvi) RM62,654.00 incurred by Plaintiff for travelling expenses;

(xvii) RM135,897.00 incurred by Plaintiff for term loan interest;

(xviii) RM518,737.00 paid by Plaintiff for administration, audit, secretarial and general expenses;

(xix) RM521,680.00 paid by Plaintiff for legal fees and charges; and

(xx) RM16,239,446.00 incurred by Plaintiff for interest charges for the cost of financing to date of the project, procured from the financial institutions namely Religare India, Reliance Commercial Finance India, Union Bank of India, ING Vysya Bank Limited India, and Axis Bank Ltd Singapore;

(e) General damages to be paid by the Defendant to the Plaintiff either in the minimum sum of RM1,400,000,000.00 on the basis of entitlement of 70% of the gross development value, or 70% of the total estimated profit;

(f) General damages to be paid by the Defendant to the Plaintiff either in the


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