Specific performance cannot be ordered if the subject matter of the contract no longer exists due to a third-party transfer.

[1] This appeal is brought as a result of the High Court's decision given on 11 March 2014 after full trial:-

(a) in disallowing the appellant's claim for specific performance as prayed for by the appellant against the 1st respondent and instead granting the appellant's alternative prayer for damages in lieu of specific performance to be assessed as well as liquidated damages of RM841,691.94 to be paid by the 1st respondent to the appellant;

(b) in disallowing the appellant's claims against the 2nd and 3rd respondents; and

(c) in allowing the 3rd respondent's counterclaim against the appellant.

This appeal is against the above decision save such part of the High Court's decision in granting the appellant the alternative prayer for damages in lieu of specific performance to be assessed and liquidated damages of RM841,691.94. We dismissed the appeal and our reasons for doing so now follow.

[2] To appreciate the contentions that have been raised before this Court, it would be desirable to state briefly the material facts. The background to this case is set out comprehensively in the appellant's Re-Amended Statement of Claim. We begin by stating that the appellant who is the plaintiff in the proceedings, is a company registered in Malaysia whereas the 1st respondent is a company incorporated in Japan. The 2nd respondent, a company incorporated in Malaysia, operates a 36-hole golf course known as Poresia Country Club and manages the membership of the said golf club. Its entire issued shares are owned by the 1st respondent. The 3rd respondent intervenes into and is subsequently added as a party to this suit. All the respondents are the defendants in the proceedings in the Court below.

[3] By a memorandum of understanding dated 8 December 2011 (the 2011 MOU) between the appellant and the 1st respondent, both parties agreed to negotiate on the potential sale and purchase of the entire issued shares of the second respondent (the shares). The 2011 MOU, inter alia, stated that:-

(a) it is non-binding;

(b) it does not constitute an offer or commitment by the parties and is intended to serve as a basis for Definitive Agreement;

(c) parties contemplated that they would not be bound to sell and purchase the shares unless there was a Definitive Agreement, incorporating all the terms of their agreement; and

(d) a Definitive Agreement would be executed by 28 December 2011.

It is noteworthy that the name of the 1st respondent is stated in the 2011 MOU as Dai-Ichi Shokai Co Ltd which is its previous name.

[4] However, no Definitive Agreement was executed by 28 December 2011. Instead, on 16 March 2012, the 1st respondent and the appellant executed in Hong Kong a memorandum (the HK MOU) which consisted of a one page document. The fact that can be gleaned from the HK MOU is that the parties thereto agreed that the terms of the HK MOU would be incorporated into a Definitive Purchase and Sale Agreement. During the execution of the HK MOU, both parties were not represented by their respective solicitors who were involved in the 2011 MOU. Pursuant to the HK MOU, the solicitors acting for the appellant and the 1st respondent proceeded to discuss the terms of the draft Sale and Purchase Agreement towards the finalisation of a Definitive Agreement or a Definitive Purchase and Sale Agreement. We are told, however, that there were terms and conditions of the share sale transaction which parties could not reach agreement, and the 1st respondent on that account terminated negotiations with the appellant.

[5] So far as could be seen from the appellant's Re-Amended Statement of Claim, the appellant's contention is that the HK MOU was in fact and in law a valid, definitive, binding and enforceable agreement for the sale of the shares by the 1st respondent to the appellant. The