JUDGMENT

Ahmad Terrirudin Mohd Salleh FCJ:

A. Introduction

[1] These appeals raise novel points of law concerning the Malaysian position on the common law restitutionary doctrine of total failure of consideration in light of this Court 's prior rulings in Berjaya Times Square Sdn Bhd v. M-Concept Sdn Bhd; [2010] 1 MLJ 597; [2010] 1 CLJ 269 and Damansara Realty Bhd v. Bungsar Hill Holdings Sdn Bhd & Anor; [2011] 6 MLJ 464; [2011] 9 CLJ 257. These rulings have since been frequently applied by the lower courts and have garnered considerable attention from both legal scholars and practitioners. Much judicial and academic ink has been spilt analysing the legal developments introduced by these rulings. In this judgment, parties will be referred to as they were in the High Court .

[2] Through a letter dated 18 December 2024, the Registry of the Federal Court received an application from learned counsel for the Plaintiffs for these appeals to be heard by a panel larger than that which heard the above two (2) cases in light of the Plaintiffs' Leave Questions No 4 and 5. This request was granted.

[3] We heard the appeal on 24 January 2025 and, curia advisari vult, delivered our broad grounds on 8 April 2025, whereupon, having heard both learned counsel and after anxious consideration, we were constrained to allow the appeals. This is the full grounds of our unanimous decision.

[4] The present appeals, in essence, concern the Assignment Agreements involving four (4) vacant parcels of land assigned by the Plaintiffs to the Defendant for a consideration. These lands were acquired through a Sale and Purchase Agreement ("SPA") between the Plaintiffs and a land developer, which itself subsequently became involved in a broader sequence of separate proceedings involving the Plaintiffs, on the one hand, and the Defendant, on the other.

[5] The proceedings between the Plaintiffs and Defendant in the Courts below proceeded on the legality of these contracts as the central issues for judicial determination, and the leave questions framed by the Plaintiffs primarily concerned the parties' rights and liabilities arising from these contractual arrangements.

[6] The Plaintiffs filed Appeal No 23 against the Court of Appeal's dismissal of their appeal and filed Appeal No 22 against the Court of Appeal's decision allowing the Defendant's appeal against the High Court 's dismissal of the counterclaim.

B. Background Of Facts

[7] While the facts of these appeals are not entirely straightforward, they remain sufficiently clear for determination owing to the meticulous efforts of learned counsel in their written submissions and the documents within the appeal records. The facts of the appeals are largely uncontentious. For ease of reference, we set out diagrams illustrating the factual narrative and the relevant timeline of events at the end of this part of the judgment.

[8] The Plaintiffs entered into an SPA dated 23 June 2015 with DA Land Sdn Bhd ("DA Land") for the purchase of four (4) vacant parcels of land held under (i) Geran 124341 Lot 25032, (ii) Geran 54446 Lot 18057, (iii) Geran 62373 Lot 15751 and (iv) Geran 124342 Lot 25033 all in the District of Gombak, Mukim Rawang, Selangor ("Rawang 4") at the purchase price of RM23,000,000.00. Both parties were aware at the material time that one piece of these lands was under a caveat lodged by one Ho Fook Cheoy ("Ho's caveat"). Under this SPA, it was DA Land's contractual obligation to remove Ho's caveat and to deliver vacant possession free from the encumbrance of Ho's caveat. Section 5 of the Second Schedule of the SPA provides as follows:

"5. PRIVATE CAVEAT/ENCUMBRANCE ON THE SAID PROPERTY

The parties hereto are aware that there is a private caveat lodged by HO FOOK CHEOY (NRIC NO: 6XXX30-07-XXXX) (hereinafter referred to as "the Caveator") vide Presentation No: 44894/2014 on 23 July 2014 (hereinafter referred to as "the said Caveat") against the said Property held under Geran 124342 Lot 25033 Mukim Rawang. T