Once an agreement is declared void due to the non-fulfillment of conditions precedent, all claims arising from it are also void and cannot proceed in court.

Introduction

[1] This is the defendant's application to strike out the plaintiffs Writ of Summons and Statement of Claim pursuant to O 18 r 19(1)(a), (b), (c) and/or (d) of the Rules of Court 2012 and/or the inherent jurisdiction of this Court.

[2] The defendant sought to strike out the plaintiff's claim on the grounds that it discloses no reasonable cause of action, is frivolous and vexatious, and constitutes an abuse of the Court process. These grounds were advanced in light of this Court's earlier decision in April 2024 which declared the underlying agreements between the parties to be void and unenforceable.

[3] After perusing the application and the affidavits and considering the submissions of both parties, I allowed the defendant's application with costs. The plaintiff was not satisfied and appealed.

Brief Background Facts

[4] On 2 March 2018, the plaintiff and the defendant executed two separate agreements, namely a Sale and Purchase Agreement ("SPA") and an Asset Sale Agreement ("ASA"). Under the terms of the SPA, the plaintiff agreed to sell and the defendant agreed to purchase three parcels of industrial land along with the buildings erected on them ("Properties") for a total consideration of RM42,000,000.00. Concurrently, under the terms of the ASA the plaintiff agreed to sell and the defendant agreed to purchase various plants and machinery located on the Properties for a sum of RM24,000,000.00.

[5] Both agreements incorporated conditions precedent that required fulfilment before completion. Among these conditions was the requirement to obtain approval from the relevant State Authority for the purchase and transfer of the Properties ("State Authority Approval"). The parties initially agreed that the deadline for fulfilling these conditions would be three months from the date of the agreements. This deadline was set to expire on 1 June 2018.

[6] Between March 2018 and June 2021, the parties mutually agreed to extend the deadlines for fulfilling the conditions precedent and making the required payments through a series of supplemental letters. In total, seven extensions were granted.

[7] The final extension was formalized in the 6th Supplemental Letter dated 10 June 2021. This letter stipulated that the balance purchase price together with any accrued interest must be paid by 30 July 2021. Notably, this deadline was fixed regardless of whether the conditions precedent had been fulfilled by that date.

[8] The State Authority Approval was not obtained within the stipulated deadlines. As a result, the defendant filed an application for summary judgment on its counterclaim. On 16 April 2024, this Court allowed the defendant's application. The Court declared the SPA and ASA void and unenforceable due to the non-fulfilment of the conditions precedent. The plaintiff has since filed an appeal against this decision.

[9] The defendant filed the present application to strike out the plaintiffs claim. The plaintiff's claim primarily seeks the forfeiture of deposits previously paid under the agreements. It also includes claims for retention sums and interest allegedly due under the agreements. However, these agreements have already been declared void and unenforceable by this Court.

Analysis And Findings

[10] The plaintiff's main argument in opposing the striking-out application was that new facts had come to light. The plaintiff asserted that the defendant had failed to take reasonable steps to obtain the State Authority Approval. In particular, the defendant allegedly did not respond to a letter from the Land Of