A contract becomes unenforceable if contingent conditions are not fulfilled; limitation defenses do not apply when addressing void contracts.

Introduction

[1] This is an appeal by the appellants against the decision of the Court of Appeal dated 22 August 2013 which had allowed the respondent's appeal against the decision of the High Court dated 31 October 2012 which allowed the appellants' claim and dismissed the respondent's counterclaim.

Questions Of Law

[2] On 26 March 2015, leave to appeal was granted by this Court on the following questions of law:

(a) Whether limitation applies to a case where the contract becomes void and/or unenforceable for failure of a condition precedent?

(b) Whether judgment could be entered in favour of the defaulting party where the contract was void and/or unenforceable for failure of a condition precedent?

Background Facts

[3] The 1st, 2nd, 3rd and 4th appellants together with one Mohtar bin Abdullah jointly owned a piece of land known as PM No 256, Lot No 13648, Kg Sg Kayu Ara, Mukim of Sungai Buluh, District of Petaling, State of Selangor Darul Ehsan ('the land'). The land is subject to an express restriction in interest as follows:

"Sekatan Kepentingan:

Tanah ini tidak boleh dipindahmilik, dipajak atau digadai melainkan dengan kebenaran Pihak Berkuasa Negeri."

[4] The 1st, 2nd, 3rd and 4th appellants and Mohtar bin Abdullah had entered into a Sale and Purchase Agreement dated 8 September 1992 ('the SPA') with the respondent to sell the land for RM200,000.00. The salient terms of the SPA are as follows:

(a) upon execution of the SPA, the purchaser shall pay the deposit of RM70,000.00;

(b) upon payment of the deposit, the vendors shall deliver the original issue document of title ('IDT') to the solicitor and shall sign a Memorandum of Transfer (Form 14A) to be held in escrow for the purpose of assessment of stamp duty and subsequent registration at the land office after payment of the balance purchase price;

(c) the balance purchase price of RM130,000.00 shall be paid to the solicitor as stakeholder within three months from the date consent to transfer is obtained from the State Authority;

(d) the solicitor shall deliver the balance purchase price to the vendors within seven days from presentation of the transfer at the appropriate land office and the vendors shall deliver vacant possession to the purchaser;

(e) in the event the purchaser fails to pay the balance purchase price, the vendors have the right to terminate the SPA and the purchaser is not entitled to claim anything from the vendors;

(f) in the event that consent from the State Authority cannot be obtained, then the vendors shall refund the deposit paid and the SPA is deemed terminated, and

(g) time shall be the essence of the contract.

It is common ground that the respondent had paid a deposit of RM70,000.00.

[5] On or about 14 September 1993, the 1st, 2nd, 3rd and 4th appellants and Mohtar bin Abdullah executed a Power of Attorney ('PA') in favour of the respondent to deal with the land. Upon the death of Mohtar bin Abdullah, his share came to be vested in the names of the 5th, 6th, 7th, 8th and 9th appellants, who are his beneficiaries.

[6] It is the appellants' case that when they had not been paid the balance purchase price, they went to look for the solicitor to inquire as to the status of the transaction. Unfortunately, they failed to locate the solicitor because he was no longer in practice. The appellants then applied for a duplicate copy of the IDT and also revoked the PA.

[7] In 2012, the appellants