Vacant possession is deemed delivered when the purchaser failed to properly inspect the property beforehand; claims for specific performance based on alleged non-delivery are therefore invalid.

Brief Facts Of Case

[1] By a Sales and Purchase Agreement (SPA) entered into on 15 July 2004, the appellant/defendant agreed to sell and the respondent/plaintiff agreed to purchase 500.13 acres of oil palm plantation land (estate) situated in Koyah, District of Kinabatangan, Sabah at the price of RM5,501,430. The land is held under one Issue document of title.

[2] The completion date of the SPA was scheduled for 15 October 2004. Pursuant to cl 5 of the SPA, the appellant was to deliver vacant possession of the estate to the respondent within one day from the date of full payment of the purchase price.

[3] It was an agreed fact that the purchase price was fully paid on 8 October 2004 and that possession of the estate was delivered to the respondent on 9 October 2004.

[4] However, some 10 months later on 16 August 2005, the solicitors for the respondent gave notice in writeing to the appellant that there were illegal occupiers on part of the estate and alleged that vacant possession had not been fully handed over to the respondent. On 5 November 2005, the solicitors for the respondent again issued a notice of demand to the appellant for the delivery of vacant possession of the estate by demanding for an immediate eviction of the illegal occupiers and claimed for loss and damage suffered as a result of the breach of the SPA.

The Respondent/Plaintiff's Claim

[5] By its statement of claim the respondent claimedinter alia, for:

(i) loss of income in the sum of RM100,219.00 as at September 2005 and continuing until the date of delivery of vacant possession;

(ii) interest on the sum in para (i) at the rate of 8% per annum from 1 October 2005 to the date of full payment;

(iii) agreed liquidated damages in the sum of RM636,683.75 as at 5 December 2005 at the rate of 10% per annum on the purchase

price of RM5,501,430.00 calculated from 9 October 2004 until the date of delivery of vacant possession; and

(iv) specific performance of the SPA.

Agreed Issues To Be Determined At Trial

[6] The main issues agreed to be determined by the court at trial were whether the appellant had delivered vacant possession of the whole of the estate to the respondent on 9 October 2004 and whether the respondent had suffered any loss and damage arising from the alleged non delivery of vacant possession of the whole of the estate.

[7] The area in dispute alleged by the respondent to be illegally occupied measured approximately 51.37 acres (the said portion of land) that is, about 10% of the whole area of 500.13 acres sold to the respondent.

Decision Of The High court

[8] After a full trial lasting three days the learned Judicial Commissioner (JC) held that the appellant had failed to deliver vacant possession of the whole of the estate to the respondent. The learned JC computed the respondent's loss and damage as a result of the non-delivery of vacant possession of the said portion of land to be in the sum of RM565,686.44 and assessed the agreed liquidated damages to be in the sum of RM65,893.14 as at 5 December 2005.

[9] The learned JC refused to grant specific performance as prayed for by the respondent "for the reason that it will be too onerous on the defendant to order that the defendant deliver vacant possession of the remaining 51.37 acres of the said land as the illegal occupiers' problem is too long outstanding and the illegal occupiers seemed very stubborn and even if the defendant can obtain the necessary court order which the defendant had already obtained earlier, it would be very difficult for the defendant to enforce the court order in the light of the tough and aggressive stance adopted by the illegal occupiers".

[10]In lieu of specific performance, the learned JC ordered the appellant to refund the sum of RM565,686.44 (being the value of the said portion of land) with interest to the respondent and that upon a full refund of the said sum of RM565,686.44 and payment of interest, ownership of the said portion of land shall revert to the appellant