The doctrine of frustration does not apply if the contract remains fundamentally the same despite changed circumstances; failure to fulfill conditions leads to breach.

(Datuk Mohd. Saari Bin Yusoff H)

1. In statement of claim, the plaintiff prays inter alia for the following:

1.1 A declaration that the said Contract was terminated ipso facto on non fulfilment of the condition precedent and consequently the plaintiff is entitled to the refund of RM 25,468,000.00 paid to the 1st defendant and/or to its account together with interest thereon accrued.

Counter-claim

2. In counter-claim, the 1st defendant prays for the following:

2.1 a Declaration that the said Contract has not been frustrated and is still valid, legal and binding and erforceable in accordance to its terms;

2.2 an Order of Specific performance of the said Contract;

2.3 damages in addition to an Order of Specific Performance and/or damages for breach of the said Contract in lieu of specific performance;

2.4 damages for breach of undertaking given by the plaintiff to the 1st defendant in the said Contract to obtain the approval of the shareholders of Brisdale Holdings for the sale and purchase of the said Lands subject to and upon the terms and conditions contained in the said Contract;

2.5 interest at the rate of eleven per cent (11 %) per annum on the sum of damages awarded in Paragraphs 30(3) and 30(4) above from the date of such award till the date of full realization;

Background

3. The uncontroverted facts in this case is that the subject matter of dispute is over sale of land with total area of 397.2 acres as described below:

Hakmilik No. Lot No. Mukim

9445 1791 Batang Kali

18615 2746 Batang Kali

18616 2747 Batang Kali

(hereinafter referred to as "the said land").

4. The first defendant ("D1" for short) was the vendor and the plaintiff was the purchaser of the said land. By an agreement dated 31 March 1997, Dl agreed to sell and the plaintiff agreed to purchase 397.2 acres of the said land for

RM 75,468,000.00 upon the terms and conditions contained therein. The conversion of the category of use of the said land had been approved for the development of a comprehensive township. The purchase of the said land was not completed by the plaintiff.

5. This proceeding is concerned with the suit against the first defendant (Dl) only.

The plaintiffs case

6. The plaintiff, a property developer, is a subsidiary of Pembangunan Brisdale Holdings Bhd. D1 was at all material times and is the registered proprietor of the said land.

7. Pursuant to the aforesaid SPA, it was envisaged that the plaintiff would require a loan from financial institutions to enable the plaintiff to complete the purchase of the said lands. In this regard, Aseam Bankers Malaysia Bhd succeeded in syndicating a loan for the plaintiff to enable the plaintiff to purchase the said lands. All necessary security documents were duly executed by the plaintiff and the banks concerned within time.

8. The aforesaid SPA was conditional upon and subject to the condition precedent that the shareholders of Brisdale Holdings .Bhd (holding company of the plaintiff) approving in General Meeting the acquisition of the said lands by its subsidiary, the plaintiff herein. The shareholders of Brisdale Holdings Bhd at its general meeting (held within time) refused to approve the acquisition of the said

land by the plaintiff. It is significant to note that, prior to the general meeting, both the plaintiff and Brisdale Holdings Bhd had knowledge about the suspension of loan by the bankers concerned due to economic downturn in the country.

Issue

9. The issue for determination is whether the plaintiff was in breach of contract.

On doctrine of frustration

10. The modern concept of frustration was