Lee Hun Hoe CJ (Borneo):

This is an appeal against the decision of the learned Judge confirming the order he made earlier in chambers.

By an agreement dated 28 September 1983 the plaintiff/respondent agreed to sell and the defendant/appellant agreed to buy a small piece of land of about three quarters of an acre situated in an area known as the Golden Triangle of Kuala Lumpur for RM15,110,700. The land was held under Selangor certificate of Title No. 8571 lot no. 73 s. 57, Town and District of Kuala Lumpur together with a building erected thereon and known as no. 34, Jalan Sultan Ismail, Kuala Lumpur. The purchase price was to be paid by instalments of which the last payment was to be made on 27 September 1984.

The defendant was to be given vacant possession after payment of the purchase price in full. However, in order to facilitate development of the property, the plaintiff, at the request of the defendant, delivered the property to the defendant in June 1984 despite the fact that payment in full had not been made. The defendant had since demolished all the buildings on the land in order to prepare the land for development.

On 27 September 1984 the defendant failed to pay the last instalment and was given time to pay. Subsequently, the balance was reduced to RM4,500,000.

By a letter dated 17 June 1986 the defendant's solicitors wrote to the plaintiff indicating that the defendant was unable to pay the balance of RM4,500,000. They pointed out that:

In accordance with Clause 9.01 of the agreement upon default of payment by our client all sums paid by our client under the agreement shall have to be refunded subject to deduction of agreed liquidated damages not exceeding 25% of the purchase price.

In reply the plaintiff's solicitors wrote on 23 June 1986 to the defendant's solicitors requesting the defendant to complete the purchase. They made clear in paras. 3 and 4 that:

3. We wish to draw your attention to Clause 8.01 (not Clause 9.01 as stated in your letter) of the said agreement dated 28 September 1983 which specifically provides for the remedy of specific performance in the event of default by your clients as purchasers to pay any part of the purchase price.

4. Furthermore, our clients have at the request of your clients already delivered vacant possession of the said property to your clients and your clients have demolished all the buildings on the said property.

The plaintiff sued the defendant on 11 July 1986 and claimed, inter alia, specific performance. By para. 6 of the defence it is contended that Clause 8 provides that in the event of default of payment the plaintiff can either claim for specific performance or liquidated damages agreed at 25% of the purchase price. In the event of forfeiture of the liquidated damages the plaintiff would refund the defendant the balance of the payment. The defendant claimed for refund of RM6,833,025. In defence to the counterclaim the plaintiff pointed out that he was entitled to the alternative remedy of specific performance. Therefore, the question of refund does not arise.

By summons in chambers dated 4 August 1986 the plaintiff applied pursuant to O. 81 of the Rules of the High Court 1980 for specific performance. The learned Judge made the order on 15 April 1987. At the request of the defendant the learned Judge heard further argument. On 26 October 1987 he confirmed the decision he made earlier in ordering specific performance of the contract. Hence the present appeal.

In the Sale and Purchase of Real Property Professor Visu Sinnadurai observes that specific performance is a discretionary remedy and over the years the Courts have spelt out the circumstances under which the relief may not be granted. These equitable principles are reflected in ss. 20 and 21 of the Specific Relief Act. Section 20(1)(a. provides that a contract will not be specifically enforced if the non-performance of it can be adequately relieved by compensation in money. As Professor Sinnadurai co