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2021 MarsdenLR 129

FEDERAL COURT PUTRAJAYA
SUMBANGAN ANEKA SDN BHD – Appellant
Versus
KNK DEVELOPMENT SDN BHD & ORS – Respondent
[Civil Appeal No: 02(f)-64-08-2019 (Q)]



Petitioner Advocates:Frank KH Tang,Leong Hsin Ru,John Sim ,Respondent Advocate: Clement Wong Tech Hoo,Then Siaw Lian

A plaintiff is entitled to seek declaratory relief for breach of contract, including lawful termination of the contract, backed by specific contractual terms without needing a separate suit.

Headnote:(A) Contracts Act 1950 – Section 56 – Specific Relief Act 1950 – Action for breach of contract – Parties entered into development agreement which was challenged by each side on validity and performance – Court ruled that the plaintiff’s notice of intention to re-enter constituted lawful termination, thus allowing the plaintiff's claim and dismissing the counter-claim for wrongful termination. (Paras 1, 11, 12, 38, 40)

(B) Legal interpretation – Jurisdiction of the court to correct misnomers – Court interpreted the agreements and clarified that the parties' intentions regarding completion dates and extension rights must align with contractual stipulations as fount of authority for enforcement. (Paras 27, 32, 33)

JUDGMENT

Rhodzariah Bujang FCJ:

[1] At all material times of this appeal, the appellant was the registered proprietor of a parcel of land described as Lot 532, Block 9, Bukar-Sadong Land District whilst the 1st respondent, was a developer. On 18 October 2012, both parties entered into an agreement to develop the land for both commercial and residential purposes ("development agreement"), which agreement was supplemented ("the supplemental agreement") about two years later on 24 September 2014. Pursuant to an agreement executed on the same date as the development agreement, the 2nd and 3rd respondents who were directors and shareholders of the 1st respondent agreed to guarantee the 1st respondent's performance of the development agreement ("performance guarantee"). An irrevocable Power of Attorney ("the 1st PA") in favour of the 1st respondent valid for the duration of the development agreement was granted by the appellant to give it power, on behalf of the plaintiff, to do what were necessary to implement the development of the land as provided in cls 1-18 thereof. A supplemental Power of Attorney ("2nd PA") was also executed following the execution of the supplemental agreement. At the time when the said agreements and instruments were executed, the said land was charged to Public Bank. Irresolvable disputes arose between the parties in the implementation of the said agreements which led to the filing of the suit by the appellant in the High Court for, inter alia, a declaration that the development agreement had expired on 22 August 2016, that it was terminated on the said date and that the appellant would enter and take possession of the land with all the improvements. The respondents, on the other hand, counter-claimed, inter alia, for a declaration that there was wrongful termination of the development agreements and for monetary losses amounting to RM20,647,820.00. The suit ended in victory for the appellant but that decision was reversed by the Court of Appeal upon a successful appeal by the respondents. On 26 July 2019, this Court granted the appellant leave to appeal against the aforesaid decision on these two questions:

"(i) Where the plaintiff's pleaded case is based on a breach of contract, is he barred from seeking a declaration of the Court that the contract has been terminated; and

(ii) Where there is an error in a document central to the case, does the party have to take up a separate action or separate suit for rectification, or can the Court correct the error through the process of interpretation of the contract in the course of the trial."

[2] We would start our consideration and determination of the leave questions by first outlining the salient terms of the written agreements and the respective decisions of the courts below. In doing so and for the rest of our judgment, parties would be referred to as they were in the High Court.

Entitlements In The Agreement

[3] It is not disputed that the central issue which is at the heart of the legal squabble of the parties is whether, as alleged by the plaintiff, that the development agreement had expired and/or lawfully terminated or was it as contended by the defendants, been brought to an unlawful end by the plaintiff's own repudiation of the same when it gave notice of intention to re-enter the land on 26 August 2016. That issue rests solely on the timelines provided in the supplemental agreement in respect of the plaintiff's entitlement to both the residential and commercial units to be built on the land, which numbered 21 ("the plaintiff's entitlement"). That entitlement is governed by cl 12 of the development agreement which reads in full as follows:

"12. COMPLETION OF THE LANDDOWNER'S ENTITLEMENTS

12.1 The Developer shall at its own cost and expense complete the construction of the Landowner's entitlements within a period of 36 months from the date on which the said amended building plan have been approved by the relevant authorities (hereinafter called "the said compl

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