The court held that failure to complete a sale does not constitute a breach if due compliance with the SPA terms is shown, particularly regarding agreed extensions.

[1] The High Court had on 06.07.2012 after a full trial dismissed the Appellant’s suit for an order for specific performance to be granted in respect of a Sale and Purchase Agreement dated 21.06.2007 (the SPA) which had been entered into by the parties. The court went on to allow the Respondent’s counterclaim brought in the suit for the deposit to be forfeited, the caveat lodged by the Appellant to be removed and the damages occasioned in the interim by the presence of the caveat to be assessed.

[2] This appeal was against the whole of that decision. On 25.06.2014 we allowed the appeal and set aside the orders made by the learned Trial Judge in respect of both the claim and the counterclaim. We ordered that there be specific performance of the SPA and directed that the Appellant effect payment of the balance of the purchase price within 30 days of our order, and the Respondent thereafter to complete the sale and purchase

[3] In this Grounds, to best capture the relationship between the parties and the context of related developments, the Appellant will be referred to as ‘the Purchaser’ and the Respondent as ‘the Vendor’.The parties were represented by separate solicitors at various stages of the transactions and they will be referred to in this Grounds as the relevant party’s solicitors, and unless stated otherwise they were the respective conveyancing solicitors.

[4] Subject to the terms and conditions of the SPA the Vendor had agreed to transfer to the Purchaser a piece of land (Lot 1216) (with the building erected thereon including assets therein) and also the interest of the Vendor held under two leases of adjoining lands, namely Parcel A (Lot 164) and Parcel B (Lot 1265) (all three Lots collectively referred to as ‘the Property’). The agreed consideration for the sale and purchase was RM72.162 million and upon execution of the SPA, a deposit in the sum of RM7,216,200.00 had been paid by the Purchaser to the Vendor.

[5] The further compliance or performance of the mutual obligations of the parties under the terms contained in the SPA were however subject to certain conditions precedent being satisfied. (Clause 8.1 of the SPA). One of the conditions stipulated was that there be obtained a consent from the Datuk Bandar Kuala Lumpur in respect of the novation/assignment of the leases of Parcel A and Parcel B to the Purchaser.

[6] On 21.05.2008 the SPA became unconditional when the Purchaser exercised its discretion under the SPA and waived the Vendor’s obligations in so far as the fulfilment of the conditions precedent related to the leases was concerned.

On 22.05.2008 the Purchaser’s solicitors informed the Vendor’s solicitors that the Purchaser would as per the terms of SPA, pay the balance of the purchase price to the Vendor’s solicitors on or before 20.08.2008.

[7] Clause 4.2 of the SPA which was pertinent as to the completion of the sale and purchase of the property was in the following terms:

The balance of the Purchase Price amounting to Ringgit Malaysia Sixty Four Million Nine Hundred Forty Five Thousand and Eight Hundred Only (RM64,945,800.00), equivalent to approximately ninety per centum (90%) of the Purchase Price (the “Balance Purchase Price”) shall be paid by the Purchaser to the Vendor’s Solicitors within three (3) months from the Unconditional Date (hereinafter defined in Clause 8.2(j) (the “Completion Period”. In the event the Balance Purchase Price is not paid or cause to be paid by the Purchaser by the expiry of the Co