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2025 MarsdenLR 5767
HIGH COURT MALAYA SHAH ALAM
ENG HAN PROPERTY SDN BHD – Appellant
Versus
SALAMON RAJ ADAICKALAM – Respondent
[Originating Summons No: BA-24NCvC-1821-08/2024]
A party in breach of a Sale and Purchase Agreement entitles the other party to terminate the contract and seek consequential orders, regardless of third-party financing agreements.
Headnote:(A) Contracts Act 1950 - Sections 56(1), 74(1), 75, and 76 - Sale and Purchase Agreement - Breach of agreement leading to termination - The court found the Defendant breached the Sale and Purchase Agreement by failing to pay outstanding amounts, ruling the Plaintiff's termination valid. The Defendant's arguments regarding lack of fraud and the responsibility of Public Bank Berhad were dismissed. The court allowed the Plaintiff's claims for retransfer of the title and removal of charges. (Paras 31, 38, 43)
(B) Termination - A party may terminate a contract for fundamental breaches by the opposing party. (Paras 16, 31)
(C) Legal standing - A party not privy to an agreement is not obliged to include it in a lawsuit. (Paras 36, 41)
Facts of the case:
The Plaintiff, as the developer, terminated the Sale and Purchase Agreement with the Defendant due to non-payment of RM545,100.00, following which the Plaintiff sought declaratory reliefs, including the retransfer of title.
Findings of Court:
The court upheld the Plaintiff's termination of the SPA, allowing consequential orders for title retransfer and cancellation of charges against the property.
Issues: The issues revolved around the breach of SPA terms by the Defendant and whether the Plaintiff had the right to terminate the agreement.
Ratio Decidendi: The court noted the Defendant breached the agreement, emphasizing contractual obligations and confirming the Plaintiff's right to terminate without requiring the involvement of the financier.
Result: The Plaintiff's claims were allowed, and costs were granted against the Defendant.
| Table of Content |
|---|
| 1. parties involved in the spa and financial arrangements. (Para 1) |
| 2. breach of spa and plaintiff's entitlement to terminate. (Para 2 , 3) |
| 3. plaintiff's claims for declaration and consequential orders. (Para 4 , 5 , 6 , 7 , 8 , 10 , 11 , 12 , 13) |
| 4. defendant's defenses against breach claims. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 5. invoked provisions of contracts act 1950. (Para 30) |
| 6. court's analysis on obligations and naming parties. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37) |
| 7. court's final order and costs. (Para 42) |
| 8. outcome based on contractual obligations without wrongdoing. (Para 43) |
Introduction
[1] A Sale and Purchase Agreement (SPA) was executed between the Plaintiff (as the Developer) and the Proprietor of the Land (who is not a party to this Suit), as the vendor, on one side, and the Defendant, as the purchaser, on the other. The Defendant required financing to purchase the property, and Public Bank Berhad issued a Letter of Undertaking (subject to certain conditions) to the Plaintiff. As is customary in SPAs between developers and purchasers, the title was transferred to the purchaser to enable the purchaser to charge the land to a financial institution. However, Public Bank Berhad later withdrew the Letter of Undertaking it had issued, leading the Plaintiff to terminate the SPA with the Defendant. Unlike typical cases in land transactions that involve a fraudster or wrongdoer, it appears that none of the parties here have committed any serious transgressions.
The Poser
[2] The overriding issue in the present matter is whether the Defendant (as the purchaser) has breached the SPA and thereby entitling the Plaintiff (as the vendor) to terminate the SPA.
[3] In the event that the answer to the question canvassed above is in the affirmative, the ensuing issue is whether the Plaintiff is entitled for the consequential orders as prayed in the Originating Summons.
The Plaintiff's Case And Contentions
[4] The reliefs sought by the Plaintiff in its Originating Summons are as follows:
• Satu (1) deklarasi bahawa Defendan telah mungkir Perjanjian Jual Beli bertarikh 15 December 2022 (Perjanjian Jual Beli tersebut) dan penamatan Perjanjian Jual Beli tersebut oleh Plaintif adalah sah;
• Bahawa hakmilik Defendan dalam hartanah yang dipegang di bawah Hakmilik No Pajakan Negeri 62471, Lot 57564, Mukim Bukit Raja, Daerah Petaling, Negeri Selangor ("Hartanah tersebut") hendaklah dibatalkan dan dikeluarkan daripada suratan hakmilik Hartanah tersebut oleh Pejabat Daerah dan Tanah yang berkenaan;
• Bahawa Pejabat Daerah dan Tanah yang berkenaan hendaklah mendaftarkan kembali Green Hill Development Sd Bhd sebagai pemilik berdaftar di dalam suratan hakmilik Hartanah tersebut;
• Bahawa Gadaian yang dimasukkan oleh Public Bank Berhad terhadap Hartanah tersebut hendaklah dibatalkan dan dikeluarkan daripada suratan hakmilik Hartanah tersebut dan Pejabat Daerah dan Tanah yang berkenaan hendaklah mendaftarkan dan/atau mengendorskan pembatalan Gadaian tersebut di dalam suratan hakmilik Hartanah tersebut;
• Bahawa Pendaftar Hakmilik Negeri Selangor atau mana-mana pihak berkuasa yang berkenaan wajib mengambil langkah-langkah yang diperlukan untuk memberi kesan kepada Perintah ini.
[5] In other words, the Plaintiff through its Originating Summons is seeking a number of declaratory orders and these include a declaration that the SPA has been validity terminated, that the charge over the land be removed and that the title to the land is retransferred to Green Hill Development Sdn Bhd (the original Proprietor of the Land).
[6] The Plaintiff's primary contention is premised on the argument that since the Defendant has breached a number of the terms in the SPA, it was entitled to terminate the SPA and has indeed validly terminated the SPA. The consequential orders sought are the natural consequences that flow from the breach and termination of the SPA.
[7] The Plaintiff made references to a number of what it rega
