Timely commencement of development is essential under the Property Development Agreement, and failure to initiate within the contractual period constitutes a repudiatory breach justifying termination.

Preliminary

[1] This is an appeal by the appellant plaintiff against the decision of the High Court of Kuala Lumpur dismissing the appellant's/plaintiff's claim for (among others):

(a) a declaration that the notice of termination dated 25 October 2007 issued by the respondents/defendants terminating an agreement of 7 January 1993 ('Property Development Agreement') between the appellant and the respondents was unlawfully issued, and hence invalid; and

(b) a consequential order for the specific performance of the Property Development Agreement.

[2] We, by a majority decision (Kang Hwee Gee JCA dissenting), have dismissed the appeal with costs. We now give our grounds.

[3] In our judgment, on the facts of the case and upon examining the relevant provisions of the Property Development Agreement, there is no merit in the appeal. We are of the opinion that there was a repudiatory breach on the part of the appellant and therefore the notice of termination was lawfully issued by the respondents. Hence, we uphold the decision of the learned High Court Judge.

[4] We shall elaborate on our grounds.

[5] The material facts of the case are not seriously disputed. The issues revolve around construing the provisions of the Property Development Agreement. Before we set out the relevant provisions of the Property Development Agreement, we shall first allude to the background that led to the dispute between the parties.

The Background Facts

[6] The first respondent/first defendant, that is, Bungsar Hill Holdings Sdn Bhd (hereinafter shall be referred to as the 'first respondent' or 'Bungsar Hill'), is the registered owner of an area of land in Damansara Heights, Kuala Lumpur, of approximately 54 acres. The first respondent intended to develop the land into a township with its commercial, office and residential sectors, the township to be known as the 'Damansara Town Centre'.

[7] So, on 9 February 1983, the first respondent entered into an agreement with a company known as Pusat Bandar Damansara Sdn Bhd (not a party to the action; but hereinafter shall be referred to as 'Pusat Bandar Damansara'). By this agreement, the first respondent granted Pusat Bandar Damansara the right to construct and develop on a part of the area of Damansara Town Centre. Pursuant to this agreement, Pusat Bandar Damansara constructed on about 9.5 acres of the land 9 blocks of building for office or commercial use (these 9 blocks of building together with the 9.5 acres of land on which they are erected shall be referred to in this judgment as the 'property').

[8] Ten years later, by an agreement of 7 January 1993 ('the Second Agreement'), between three parties, namely.

(1) the first respondent;

(2) the second respondent/second defendant (Editry Sdn Bhd, who in this judgment shall be referred to as 'Editry'); and

(3) Pusat Bandar Damansara,

[9] Pusat Bandar Damansara surrendered and renounced its right to develop an area of the Damansara Town Centre that adjoins the Property (that is, the 9.5 acres of land on which Pusat Bandar Damansara had built the 9 blocks of building). This adjoining land has an area of approximately 15.5 acres. The parties to this Second Agreement refer to this area as the 'Development Property'. This Development Property was previously held under three titles, namely:

(i) part of Lot 8345, Grant No. 10474 (the 'first Lot');

(ii) part of Lot 1502, H.S.(D) 31780 (the 'second Lot');

(iii) part of Lot 47054, H.S.(D) 4652 (the 'third Lot').

[10] T