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2023 MarsdenLR 2257

COURT OF APPEAL PUTRAJAYA
ORION CHOICE SDN BHD – Appellant
Versus
BELLAJADE SDN BHD – Respondent
[Civil Appeal No: W-02(NCVC)(W)-133-01-2020]



Petitioner Advocates:RK Sharma,Armit Pal Singh,Ng Jun Wei ,Respondent Advocate: M Pathmanathan,S Rutheran,Michele Kaur,Tee Yee Man,Chong Yi Zhen

A Sale and Purchase Agreement for an entire building must be interpreted to include all areas, rejecting any attempt to classify portions as lettable strata only.

Headnote:(A) Contract Law - Breach of Contract - Sale and Purchase Agreement - Adjustment of Purchase Price - Appellant claimed additional payment for excess floor area; Respondent counterclaimed for shortfall - Court found the Respondent's interpretation of the contract erroneous, leading to miscalculation of areas. (Paras 1-41)

(B) Interpretation of Contracts - The court emphasized that the Sale and Purchase Agreement was for the entire building, rejecting the Defendant's strata method approach which excluded common areas. (Paras 16-38)

Facts of the case:
The Appellant claimed against the Respondent for breach of contract regarding the sale of a building, asserting unaccounted excess area while the Respondent counterclaimed for alleged shortfall.

Findings of Court:
The court ruled in favor of the Appellant, allowing adjustments for excess area and dismissing the Respondent's counterclaim.

Issues: The main issue was whether the learned Judge's interpretation of the Sale and Purchase Agreement was correct.

Ratio Decidendi: The court ruled that the Sale and Purchase Agreement must be interpreted as a sale of the entire building, not merely specific lettable areas, affirming that the Respondent's approach contradicted the contract's intent.

Result: Appeal allowed.

Table of Content
1. contractual terms and obligations in spa. (Para 1 , 2 , 3 , 4 , 5 , 6 , 10)
2. court's interpretation of spa and disputed coa direction. (Para 7 , 8 , 9 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
3. plaintiff's grounds for appeal against high court's decision. (Para 12 , 13 , 14)
4. judgment on excess floor area and counterclaim. (Para 38 , 39 , 40)
5. final judgment and orders issued by the court. (Para 41 , 42 , 43)
Azimah Omar JCA:

A. Background Facts

[1] The Appeal before us concerns the Appellant-Plaintiff's claim against the Respondent-Defendant for breach of contract (for the sale and purchase of an entire building) due to the Respondent's refusal to make additional payments under cl 7A of the contract which allows for adjustments upon the provisionally agreed purchase price after the building was re-measured after its completion.

[2] The Appellant contended that there was an excess of area which was unaccounted for in the provisional purchase price. Inversely, the Respondent insisted that there were areas which were wrongfully accounted for and instead counterclaimed for the value of the shortfall of floor areas. Parties will be referred to in their respective capacities in the High Court below.

[3] Orion Choice Sdn Bhd ("the Plaintiff / the vendor") had entered into a Sale and Purchase Agreement with Bellajade Sdn Bhd ("the Defendant / the purchaser") dated 26 March 2012 ("the SPA") in which the Plaintiff agreed to sell while the Defendant agreed to purchase an ENTIRE BUILDING known as Plaza Palas, consisting of 21 office floors (Ground Floor to 20th Floor), 1 floor of VIP Holding Lounge (21st Floor), 1 floor of Lift Motor Room/ Viewing Area (22nd Floor), together with 453 car park and 46 motorcycle park bays largely situated in the basement floors of the Building (Basement 1, 2, and 3 as well as the Sub-basement) for the purchase price of RM139,250,000.00.

[4] Recital D of the SPA explicitly defines the whole and entirety of Plaza Palas as "the Building", while Recital G (read together with the First Schedule of the SPA) further particularised the contents of the Building while grouping the basement parking floors into Parcel 1 and Parcel 2. It is entirely clear and vivid that the sale intended under the SPA is the sale of the entirety of the Building, and not only any specific lettable strata portions of the Building. Recital G and the First Schedule of the SPA are reproduced below for reference:

G. The Vendor has obtained consent of the Registered Proprietor which the said consent has been endorsed herein agreed to sell and the Purchaser has agreed to purchase from the Vendor the Building measuring approximately 56,054 square metres with land area of 29,086 square feet which are more particularly identified in PART II of the FIRST SCHEDULE together with 331 units of carpark bays and 1 motorcycle park bays (for 16 motorcycles) in the Building (hereinafter referred to as "Parcel 1") and 122 units of car park bays and 1 motorcycle park bay (for 30 motorcycles) in the Apartment (hereinafter referred to as "Parcel 2") which are more particularly identified in PART II of the FIRST SCHEDULE free from all encumbrances but subject to any condition express or implied and any restriction-in-interest in the issue documents of title to the Land or Building or strata titles to be issued to the Parcel 2 and with vacant possession at the purchase price as stated in PART I of the FIRST SCHEDULE upon the terms and conditions hereinafter set out. The Building, Parcel 1 and Parcel 2 are hereinafter collectively referred to as the "Properties").

[5] In line with cl 7A of the SPA, the First Schedule has already provided the rate of adjustment to the provisional purchase price upon final re-measurement of the Building by the vendor's (the Plaintiff-Appellant's) licensed surveyor. There are two distinct rates of adjustments provided. For the 21 Office Floors ("Of

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