A conditional agreement automatically terminates if the required approvals are not obtained within the specified timeframe, nullifying rights and obligations of both parties.

JUDGMENT

Bhupindar Singh Gurcharan Singh Preet JC:

Facts Of The Case

[1] The plaintiffs are the registered owners of a parcel of land held under HS(M) No 11639, PT No 183741, Mukim Hulu Kinta, Daerah Kinta, Negeri Perak ('the said land'). The defendant is a property development company having its business address at No 1, Persiaran Kinta, Taman Kinta, 30250, Ipoh Perak.

[2] The plaintiffs and the defendant entered into a joint venture agreement dated 13 May 2009 ('the Agreement') to jointly develop the said land into a mixed residential/commercial development. According to the Agreement, the defendant is to apply for approval from the relevant government department to convert the status of the said land from agricultural to mixed residential/commercial. In addition, the defendant is also required to apply and obtain approval for a complete subdivision of the said land. Once these approvals are secured, the defendant will develop said land as agreed in the Agreement.

[3] The object of the Agreement is to carry out and complete the project in phases as per the layout plans. The essential terms and conditions of the Agreement are as follows:

(a) clause 2.1 provides that the Agreement is conditional and shall become unconditional upon the satisfaction of cl 2.1 in the manner as stated in cl 2.2;

(b) clause 2.3 stipulates that if any of the conditions in cl 2.1 is not fulfilled within 24 months from the date of the Agreement, the Agreement shall lapse;

(c) clause 3.1 sets the time frame for the application for approvals from the relevant government departments;

(d) clause 3.2 provided that the type of mixed residential/commercial development which will be constructed on the said land shall be approved by the relevant authorities and mutually accepted by the plaintiffs and defendant;

(e) clause 3.6 provides for automatic termination if the defendant fails to submit the appropriate application for the approvals within the time stated in cl 3.1;

(f) clause 5(1)(d) states that the plaintiffs are required to deliver vacant possession of the said land to the defendant upon the execution of the Agreement.

[4] The plaintiffs gave the original title of the said land to the defendant upon signing the Agreement. It was to ensure that the defendant could proceed with the application for conversion and further develop the said land. Simultaneously in accordance with the Agreement, the plaintiffs also signed an irrevocable Power of Attorney ('PA') in favour of the defendant pertaining to the said land.

[5] The defendant then appointed a Designer Consultant and Town Planner, Messrs Erarancang Sdn Bhd ('Erarancang'), to apply for the planning permission from Majlis Bandaraya Ipoh ('MBI'). On 22 April 2011, Erarancang submitted the application for planning permission to MBI. However, MBI vide letter dated 16 June 2011 rejected the application submitted by Erarancang. On 1 July 2011, the defendant delivered a letter of appeal to MBI on the same matter.

[6] Subsequently, the plaintiffs, vide their former solicitor's letter dated 10 July 2012, enquired from the defendant the status of the application for conversion of the said land from agriculture to residential/commercial. There was no response from the defendant. Accordingly, the plaintiffs' solicitor vide letter dated 24 August 2017 notified the defendant that the Agreement had lapsed since the defendant failed to comply with cl 3.1 of the Agreement.

[7] On 27 July 2018, the plaintiffs filed an action against the defendant and prayed, in the statement of claim, for the following reliefs:

"18. Dengan yang demikian, Plaintif-Plaintif menuntut terhadap Defendan untuk:

(a) Pengisytiharan bahawa Perjanjian Usahasama bertarikh 13 May 2009 adalah luput dan tidak akan berkuat kuasa lagi;

(b) Pemulangan hak milik asal HS(M) 11639, PT 183741, Mukim Hulu Kinta, Daerah Kinta, Negeri Perak kepada Plaintif-Plaintif;

(c) Kaveat Persendirian atas Tanah No Perserahan 726/2012 yang dimasukkan oleh Pengarah Defendan, Jonathan Thong Ji