The unjust enrichment principle entitled the contractor to the current market value of improvements made, not just construction costs.

Introduction

[1] This is an appeal from the whole of the majority judgment of the Court of Appeal that upheld the judgment of the High Court after a full trial of the matter that arose out of a contractual dispute. This appeal also raises the important question of restitutionary remedy and the law of unjust enrichment, originally also called the law of restitution.

[2] We will describe the parties in this judgment as they appear in the High Court, namely the appellant as the defendant and the respondent as the plaintiff.

[3] The subject matter of the dispute between the parties revolved around the termination of a sale and purchase agreement for a parcel of land ("the land"), where the registered proprietor Atlas Housing Sdn Bhd ("the plaintiff ") was the vendor and Dream Property Sdn Bhd ("the defendant") was the purchaser. By a sale and purchase agreement dated 19 November 2004 ("the SPA"), the defendant agreed to purchase the land measuring approximately 14.4 acres and known as Grant No 101840 Lot 325 Mukim Simpang Kanan in Batu Pahat, Johor at the price of RM33.5 million from the plaintiff with the plan of developing it into a commercial complex. A fully functioning completed commercial complex, with ongoing businesses and tenants now stands on the land, which, at this time is known as Batu Pahat Mall ("the mall"). In November 2007, the market value of the mall was estimated to be in the region of RM387 million.

An Overview Of The Dispute

[4] The plaintiff brought an action in the High Court at Johore Bahru against the defendant to recover vacant possession of the land. In essence, the plaintiffs claim was for breach of contract by the defendant resulting in its termination and entitling the plaintiff to the return of the land as well as compensation for the loss suffered from the defendants breach. The defendant resisted the action and made a counterclaim for specific performance and other reliefs. At the time of filing the writ in 2006, the defendant had already begun construction works on the land to build the mall. Construction proceeded notwithstanding the Court action and proceedings. By the time the trial before the High Court was concluded, the mall stood completed on the land and had been fully operational since the end of 2007.

[5] The judgment of the High Court was delivered on 11 November 2011 wherein it was held that the defendant had breached the SPA resulting in its termination. The High Court ordered, among others, that:

(a) the land (together with the mall on it) be returned to the plaintiff;

(b) there be an assessment by the Registrar of the High Court of profits made by the defendant on the land and it is to be paid to the plaintiff; and

(c) there also be an assessment by the Registrar of the High Court of the costs of the construction of the mall on the land incurred by the defendant and it is to be paid by the plaintiff to the defendant.

[6] Subsequently, the defendant filed a Notice of Appeal to the Court of Appeal against the whole of the High Court judgment. At the same time, the plaintiff filed a Notice of Cross Appeal. On 10 May 2013, the Court of Appeal by way of a majority judgment, dismissed the defendants appeal with costs. The plaintiffs cross appeal was also dismissed. The majority of the Court of Appeal upheld the orders of the trial judge as set out above. However, the majority clarified the order relating to the account of profits ordered by the High Court and ruled that the defendant was only to pay the profits derived from its use and occ