Contractual provisions must not undermine statutory rights; courts will void any terms conflicting with public policy.

[1] The circumstances under which the Court may intervene with the freedom of contract are limited. It is easier to intervene in cases of illegality where parties cannot agree to do that which the law prohibits. What then is the position where a matter is not prohibited by statute but expressly stated as a right of a party?

[2] The question then is whether contracting out of a statute would be permitted. Should the Court nevertheless refuse to enforce such a term if to do so would unfairly prejudice the rights of the weaker party to the bargain, or that it would defeat the purpose of the law or be contrary to public policy. Interestingly in this appeal, the issue is whether a developer can enforce a term in an agreement where the purchaser has agreed not to apply for a change of category of land use from "agriculture" to "building" for the land that he purchased.

[3] The purchasers here had obtained the approval of the State Authority for such a conversion and have constructed, with the approval of the local authority, on the once agricultural land a long house straddling the 2 pieces of land, one bought by the husband and the other by the wife, from the developer and which the wife subsequently transferred to the husband.

[4] The developer insisted that it is a breach of the contract represented in the Sale and Purchase Agreement ("S&P") and the Deed of Covenants ("DOC") signed between the developer and the purchaser for each parcel of the agricultural land in the development in Janda Baik in Pahang.

[5] The purchasers argued that the National Land Code (" NLC ") conferred such a right to the registered proprietor and whilst the S&P and DOC had been entered into, very significantly this so-called restriction does not appear on the subdivided titles when they were subsequently issued. It was argued that the contractual restrictions cannot take away the rights of the purchasers as reflected in the subdivided titles without such a restriction and moreover, the expressly grants such a right to the registered proprietor of the land.

At The High Court

[6] The High Court heard a witness each from the plaintiff and the defendants. One Lisa Ng (PW-1) testified for the plaintiff and Lai Chin Wah (DW-1) who was the 1st defendant (D1) gave evidence for the defendants. The High Court was of the view that the contractual terms are clear and binding on the contracting parties and it is not open to the purchasers to resile from the agreed terms.

[7] The High Court on 17 March 2021 allowed the plaintiff's claim and granted the declarations prayed for in that the defendants had breached the relevant clauses in the S&P and DOC and the injunctive reliefs prayed for and made an order for the specific performance of the contract, ordering the demolition of the longhouse built straddling the two titles to the contiguous Lots.

[8] The High Court however held that the plaintiff had failed to prove that it has suffered damage as a result of the defendants' breaches of the various clauses referred to.

[9] Aggrieved by the said decision, the purchasers as appellants appealed to the Court of Appeal and there was a consent order recorded for a stay of the High Court order for the demolition of the longhouse built pending the disposal of the appeal.

At The Court Of Appeal

[10] It was argued before us that the consideration or object of the agreement is of such a nature that, if permitted, would defeat any law and/or be opposed to public policy pursuant to s 24(b) and (e) of the Contracts Act 1950 .

[11] It was argued that though the relevant