The court clarified the nature of contingent contracts and the requirement of notice for termination, establishing that no notice is necessary for contingent contracts under the Contracts Act 1950.

[1] This is an appeal against the decision of the learned Judicial Commissioner ("JC"), who on 27 February 2018 dismissed the Plaintiff's claim and allowed the Defendant's counterclaim with costs.

[2] The Plaintiffs claim against the Defendant is for rescission of a Sale and Purchase Agreement ('SPA') and the repayment of Earnest Deposit and refund of interest. The Defendant had filed a counterclaim on the premise that the purported termination of the SPA was unlawful and prayed for a declaration that the said SPA is valid and enforceable, an order for specific performance of the said SPA and damages for breach of contract.

[3] For ease of reference parties will be referred to as they were in proceedings before the High Court. The First Plaintiff is the Purchaser of the subject land, while the Defendant is the Vendor.

Background Facts

[4] The salient facts in this suit is not disputed and is derived primarily from the learned JC's Judgment.

[5] The First Plaintiff is a company incorporated pursuant to the Companies Act 1965 with a registered address at 12 A, Jalan Sahabat 1, Taman Emas, 86000 Kluang, Johor.

[6] The Second Plaintiff is an individual who at all material times is a director and 50% shareholder of the Plaintiff.

[7] The Defendant is a company incorporated pursuant to the Companies Act 1965 with a registered address at Suite 1301, Tingkat 13, City Plaza Jalan Tebrau 80300 Johor Bahru, and Johor.

[8] By a Sale and Purchase Agreement dated 23 December 2013 ('the said SPA') the Defendant agreed to sell to the First Plaintiff a piece of land held under GM 365 Lot 13, Mukim Pulai, Daerah Johor Bahru, Johor ('the subject land') for the purchase price of RM127,544,477.00.

[9] As set out in the Second Schedule, the said SPA is a conditional sale and purchase agreement. This is due to the fact that before the said SPA was signed, 3 orang Asli have sued the Defendant and 12 other parties in the Johor Bahru High Court Civil Suit No: 22-NCVC-158- 06/2013 (the said civil suit 158) in relation to the subject land. In the said civil suit 158, the 3 orang Asli have sued for a declaration that they are the holders of customary rights of the subject land and the adjoining lands.

[10] In cl 2 of the Second Schedule, it is provided that the sale and purchase therein, "shall be conditional upon the First Plaintiff's solicitor's receipt of a copy of the Final Decision of Court' (Conditional Period). In cl 1.1 of the said SPA, the "Final Decision of Court is defined as "the final and conclusive judgment or order reached by the trial Court or any Appellate or Federal courts in Malaya in favour of the Vendor in respect of [the said Civil Suit 158] against the Vendor and 12 others by [the three orang Asli] with no further right of appeal whatsoever".

[11] Further, cl 4 of the Second Schedule, provides that the said SPA "shall become unconditional on the date the Final Decision of Court, is received by the First Plaintiff's Solicitors".

[12] Therefore, by reason of cls 2 and 4 of the Second Schedule, the said SPA only becomes an unconditional contract if a condition precedent has been fulfilled. The condition precedent ("the said condition precedent") is the receipt of the Final Decision of Court in the said civil suit 158 by the First Plaintiff's Solicitors.

[13] Clause 5 of the Second Schedule provides that, "if there is no Final Decision of Court and or judicial decision in favour of the Vendor within one (1) year from the date of this Agreement, the Purchaser shall either have the option to extend the Conditional Period or have the option to terminate this Agreement and upon notice being given to the Vendor, this Agreement shall terminate and be of no further force or effect and the Vendor shall within fourteen (14) days thereof refund to the Purchaser all sums paid by the Purchaser to the Vendor free of