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CONTRACT: Breach - Building contract - Agreement for sale of
shop-lot in building - Vendor unable to deliver vacant possession by
specified time - Whether purchaser entitled to rescind agreement, recover
moneys paid and claim damages - Whether claim for liquidated damages for
late delivery disentitled purchaser from rescinding agreement - No
provision on rescission in agreement, whether consequential - Purchaser
continuing to make instalment payments, whether a waiver of right to
rescission - Contracts Act 1950, s. 56(1)
CONTRACT: Breach - Consequences, of - Option of innocent party
whether to accept repudiation - Right of innocent party to terminate
contract where breach goes to root of contract - Contract cannot be
terminated where there is part performance by defaulting party - Breach of
contract does not render it voidable - Termination of contract only ends
future obligations - Past rights and duties remain unaffected - Equitable
remedy of rescission not available where contract is breached - Common law
right of rescission only in cases of total failure of consideration -
Contracts Act 1950, s. 40
CONTRACT: Rescission - Building contract - Agreement for sale of
shop-lot in building - Vendor unable to deliver vacant possession by
specified time - Whether time of essence of agreement - Whether purchaser
entitled to rescind agreement, recover moneys paid and claim damages -
Whether claim for liquidated damages for late delivery disentitled
purchaser from rescinding agreement - No provision on rescission in
agreement, whether consequential - Purchaser continuing to make instalment
payments, whether a waiver of right to rescission - Whether purchaser
stopped from rescinding agreement - Contracts Act 1950, s. 56(1)
BERJAYA TIMES SQUARE SDN BHD v. M-CONCEPT SDN BHD
FEDERAL COURT, PUTRAJAYA
ZULKEFLI MAKINUDIN FCJ, GOPAL SRI RAM FCJ, MOHD GHAZALI YUSOFF FCJ
[CIVIL APPEAL NO: 02(f)-22-2009(W)]
30 OCTOBER 2009
JUDGMENT
Zulkefli Makinudin FCJ:
[1] I have read the judgment in draft of my learned brother Gopal Sri Ram,
FCJ and I agree with the views expressed and the conclusion reached by his
lordship in allowing this appeal by the appellant. I would like to add in
a few words in support of the judgment as follows:
[2] It is to be noted at the outset that the project undertaken by the
appellant was never abandoned and at all material time the appellant had
kept the respondent informed of the progress of the development. In my
view the learned trial judge misdirected himself in holding that the
failure of the appellant to deliver vacant possession of the property
after 23 November 1998 amounted to fundamental breach of the agreement and
therefore the agreement was voidable at the option of the respondent
pursuant to s. 56(1) of the Contracts Act 1950 ("the Act") when on the
contrary the respondent did not immediately after 23 November 1998 make an
election to rescind the agreement and had in fact made an unequivocal
election to make further progress payments and affirmed the agreement by
paying the purchase price in full.
Clauses 22(1) and 22(2) of the sale and purchase agreement ("SPA") are
relevant in support of the appellant’s case in which the observation on
that clauses are as follows:
(i) there is the initial completion period of 36 months;
(ii) there is then the automatic extension period of three months for the
completion from the initial 36 months period; and
(iii) there is the provision for liquidated ascertained damages (LAD)
which is to follow the event of the appellant failing to hand over vacant
possession of the property within the extended period for completion.
[4] As regards the law on rescission of contract which is the main issue
to be decided in the present case, I am of the view on the factual matrix
of the case s. 56(1) should be read together with s. 40 of the Act in
determining the question as to whether the appellant as the party that was
obliged to perform its promise had refused to perform it promise in its
entirety by not doing any of the things it promised to do within the time
specified by the contract. A reference to ss. 40 and 56(1) of the Act
clearly showed that the right to rescind a contract by way of termination
only arises when there has been a total failure of consideration. What is
of significance on the facts of this case is that there is no question of
the appellant not having done anything on the construction of the property
as undertaken by them vide the SPA. Indeed the facts before the court
showed that the construction of the property was completed and was in the
state of delivery to the respondent. It is my view that the entitlement of
the respondent in this case is confined and limited to compensation in the
form of LAD as agreed upon in the SPA and that the respondent has no right
to rescind the SPA.
[5] It is also my considered view that the appellant and the respondent
had not intended that time should be of the essence of the contract for
purposes of s. 56(1) of the Act. This is evidenced by the conduct of the
respondent itself in having several negotiations with the appellant with a
view to expediting the completion of the construction of the property
before intimating to the appellant of its decision to rescind the SPA. The
respondent also took such a long period of time after the stipulated
period and the extended period of completion to rescind the SPA. The
fixing of a period within which the contract is to be performed as laid
out in cl. 22(1) of the SPA therefore does not make the stipulation as to
time to be the essence of the contract under cl. 32 of the SPA.
Gopal Sri Ram FCJ:
[6] The appellant is a property developer. It set out to develop a project
originally called Berjaya Star City which is now known as Berjaya Times
Square. The project is a massive venture. It has been completed. It
comprises of various types of service outlets and offices. Parcels in the
project were offered for sale to the public at large. The respondent is a
private limited company. It wanted to purchase a commercial shop lot in
the project. It entered into an agreement with the appellant to purchase
such a lot. The agreement is dated 24 August 1995. Under its terms the
appellant was to deliver the respondent’s lot to it on or before
23 November 1998. If the appellant delayed in making delivery, it had to
pay liquidated damages to be calculated from day to day at the rate of 12%
per annum of the purchase price. The agreement also made time of the
essence. The appellant did not make delivery within the stipulated time.
Several meetings were held between the parties to determine when delivery
could be made. The appellant told the respondent that it would make
delivery by the end of 2001. But that did not happen. After a very brief
exchange of correspondence, the parties had another meeting on 1 October
2002 at which the appellant assured the respondent that the shop lot would
be delivered by the end of 2002. That again did not materialise. In early
March 2003, there was yet another exchange of correspondence. The
respondent demanded the return of all sums in the hands of the appellant
and the latter claimed that all it was liable to pay were the liquidated
damages worked out according to the agreed formula. The respondent then
commenced proceedings claiming, inter alia, a declaration that the
agreement had been rescinded and for an order that the appellant refund
the monies in its hands. There was also a claim for damages.
[7] The High Court found for the respondent. Its findings have been
usefully summarised as follows by learned counsel for the respondent in
his skeletal arguments from which I propose to borrow:
(i) that the appellant’s failure to deliver vacant possession of the
subject property on the date of completion constituted a fundamental
breach of the agreement that the respondent had with the appellant;
(ii) that time was of the essence of the contract and that the appellant’s
failure to deliver vacant possession on the stipulated time rendered the
agreement voidable at the option of the respondent by virtue of s. 56(1)
Contracts Act, 1950 so that the respondent was entitled to rescind the
agreement;
(iii) that the respondent was not therefore confined to its remedy under
the liquidated damages clause in the agreement.
[8] Based on its foregoing findings the High Court granted the following
relief:
(i) a declaration that the agreement has been validly rescinded;
(ii) an order directing the appellant to refund the sum RM1,034,793 being
90% of the purchase price paid;
(iii) an order directing the appellant to indemnify the respondent in the
sum of RM241,820.99 being the financing costs, legal fees and other
expenses incurred by the respondent to purchase the subject property as at
27 December 2001 being the date of the respondent’s first letter
terminating the agreement;
(iv) an order directing the appellant to indemnify the respondent in
respect of all financing costs, legal fees and other expenses incurred by
the respondent to purchase the subject property, from 27 December 2001
until the date of the judgment;
(v) an order that the appellant pay to the respondent damages to be
assessed by the registrar of the High Court.
An appeal to the Court of Appeal failed and the appellant, having obtained
the leave of this court has appealed to us.
[9] At this point it may be convenient to mention a further fact. There is
evidence to show that the even after the appellant’s failure to deliver
the respondent’s shop lot unit to it, the latter continued to make payment
of the instalments that were demanded of it by the former. There is also
evidence on record to show that on 27 December 2001 the respondent wrote
to the appellant terminating the agreement between them. Despite this, the
respondent continued to negotiate with the appellant as witnessed by the
meeting they had on 1 October 2002 at which the appellant assured that
vacant possession would be delivered by the end of 2002. The significance
of these events will be discussed at the appropriate place in this
judgment.
[10] Returning to the mainstream, the question reserved for our
consideration is whether s. 56(1) of the Contracts Act 1950 ("the Act")
applies here. That apart, there are much larger and far more important
issues at stake in this appeal that go to the very basic fabric of the law
of contract in this country. Before addressing these issues there is an
important observation that needs to be made. It is this. The agreement in
the present case is one that is not regulated by statute. In short, it is
not a contract governed by the Housing Developers legislation. The
appellant and respondent were therefore at complete liberty, in accordance
with the doctrine of freedom of contract to agree on any terms they
thought fit. The role of the court is to interpret the contract in a
sensible fashion. See, Loh Wai Lian v. SEA Housing Corporation Sdn Bhd
[1987] 1 LNS 37. As Lord Steyn said in Mannai Investment Co Ltd v. Eagle
Star Life Assurance Co Ltd [1997] AC 749, 771:
In determining the meaning of the language of a commercial contract, and
unilateral contractual notices, the law therefore generally favours a
commercially sensible construction. The reason for this approach is that a
commercial construction is more likely to give effect to the intention of
the parties. Words are therefore interpreted in the way in which a
reasonable commercial person would construe them. And the standard of the
reasonable commercial person is hostile to technical interpretations and
undue emphasis on niceties of language. In contradistinction to this
modern approach, Lord Greene M.R’s judgment in Hankey v. Clavering [1942]
2 KB 326 is rigid and formalistic.
[11] At the heart of this appeal lies the question: what are the rights of
an innocent party where there is a breach of contract? The question is one
upon which there has been much discussion for about 150 years and the
cases decided during that period of time have settled the applicable
principles. See, Philpot v. Evans [1839] 151 ER 200, 202; Ripley v.
M’Clure [1849] 154 ER 1245, 1251. Nevertheless, cases do arise from time
to time that question these settled principles necessitating the courts to
re-state them. This case presents us with such an opportunity.
[12] The starting point is to recognise that in an action for breach of
contract it is the court that determines who is the innocent party and who
is the guilty party. That problem does not arise in the present case
because the appellant has freely admitted throughout the proceedings that
it is the party that is guilty of having breached the contract. The only
issue that remains is whether - as held by the learned trial judge - the
respondent as the innocent party is entitled to rescind, the contract,
that is to say, to have the parties restored to a position where they will
stand as if the contract had never been made.
[13] The doctrine of repudiation is based on the proposition that where a
promisor wrongfully repudiates a contract in its entirety, the promisee
has a choice. He or she may elect to accept the repudiation, treat the
contract as at an end and sue for damages. The rationale is that the
primary obligation to perform the promise made is substituted with a
secondary obligation to compensate the promisee for the breach. See,
Moschi v. Lep Air Services Ltd [1973] AC 331. Alternatively, he or she may
elect to reject the repudiation and treat the contract as subsisting.
Whether the one or the other course was adopted by the promisee - the
innocent party - is a fact that is to be inferred by the court from the
objective facts, including the words and conduct of the parties. An
election once made is irreversible. See, Sargent v. ASL Developments Ltd
[1974] 131 CLR 634, 655. But it is the essence of the doctrine of
repudiation that the breach must go to the root of the contract. See,
Mayson v. Clouet & Anor [1924] AC 980; Bowes v. Chaleyer [1923] 32 CLR
159; Hongkong Fir Shipping Co Ltd v. Kawasaki Kisen Kaisha [1962] 2 QB 26.
In the absence of an express refusal to perform, the test is whether the
conduct of the contract-breaker is such that a reasonable person would say
of it that he has breached his promise in its entirety. See, Freeth v.
Burr [1874] LR 9 CP 208; Rasiah Munusamy v. Lim Tan & Sons Sdn Bhd [1985]
1 CLJ 541; [1985] CLJ (Rep) 266.
[14] There is another way of stating the proposition. If a promisor does
not perform his promise in its entirety, the promisee may terminate the
contract. This right of termination was referred to by the common law
lawyers of the 19th Century as a right to rescind. So they wrongly
described a broken contract as being voidable. This was incorrect as the
breach of a contract does not render it voidable.
[15] Some writers continue to use the word rescind in this sense.
Professor G.H Treitel is one. See, Trietel’s "Law of Contract", (11th edn).
But this "rescission" is very different from the specific relief of
rescission invented by the court of Chancery. The right to terminate puts
an end to the contract only as to the future. All past rights and duties
under the contract remain unaffected. But that is not the case where the
equitable remedy of rescission is obtained by a decree from the court or
by self-help. An example that illustrates rescission as a self-help remedy
is Car and Universal Finance v. Caldwell [1965] 1 QB 525. The remedy of
rescission has the effect of restoring the parties to the same position as
though the contract was never made. In other words, there is restitutio in
integrum. Where it is impossible to restore the status quo ante, the court
may grant equitable compensation as happened in Longstaff v. Birtles
[2001] EWCA (Civ) 1219, a case of breach of fiduciary duty.
[16] The hallmark of the equitable remedy of rescission is that it is only
available to set aside contracts that are voidable by reason of the
ingredient of free consent, which is the sine qua non in the making of a
contract, having been vitiated by an element external to the contract.
Examples of elements that vitiate free consent are fraud,
misrepresentation, duress, undue influence and a breach of fiduciary duty.
Whether a court of equity will set aside a contract that is void for
common mistake (which is an element that does not vitiate free consent) is
one that is debatable after the decision of the English Court of Appeal in
Great Peace Shipping Ltd v. Tsavliris Salvage (International) Ltd [2002]
EWCA Civ 1407; [2003] QB 679; [2002] 4 All ER 689 which sought to overrule
Denning LJ’s view in Solle v. Butcher [1949] 2 All ER 1107, [1950] 1 KB
671. Speaking for myself, I am not prepared to say, in the absence of full
argument on the point, that Denning LJ was wrong in Solle v. Butcher and
that the Court of Appeal in Great Peace Shipping is correct. Be that as it
may, the position in equity is that rescission is not a remedy available
for the breach of a contract. In short, equity does not restore the
parties to a broken contract to their status quo ante.
[17] That said, it is now settled that there is, at common law, a right to
rescind a contract in very limited circumstances. In essence it is the
quasi-contractual remedy of restitution in cases where there has been a
total failure of consideration. In Fibrosa Spolka Akcyjna v. Fairbairn
Lawson Combe Barbour Ltd [1943] AC 32, 48, Viscount Simon LC said:
... in the law relating to the formation of contract, the promise to do a
thing may often be the consideration, but when one is considering the law
of failure of consideration and of the quasi-contractual right to recover
money on that ground, it is, generally speaking, not the promise which is
referred to as the consideration, but the performance of the promise. The
money was paid to secure performance and, if performance fails the
inducement which brought about the payment is not fulfilled.
If this were not so, there could never be any recovery of money, for
failure of consideration, by the payer of the money in return for a
promise of future performance, yet there are endless examples which show
that money can be recovered, as for a complete failure of consideration,
in cases where the promise was given but could not be fulfilled ...
[18] What has to be added to the learned Lord Chancellor’s view is the
qualification:
... that failure of consideration does not depend upon the question
whether the promisee has or has not received anything under the contract
... but rather whether the promisor has performed any part of the
contractual duties in respect of which the payment is due." (Stocznia
Gdanska SA v. Latvian Shipping Co [1998] 1 All ER 883, per Lord Goff of
Chieveley)
In other words, when deciding whether there is in a given case total
failure of consideration, the court must first interpret the promise as a
whole and next view the performance of the promise from the point of view
of the party in default. The test is not whether the innocent party
received anything under the contract. The test is whether the party in
default has failed to perform his promise in its entirety. The facts of
Stocznia Gdanska illustrate the proposition.
[19] The plaintiffs were Polish shipbuilders. They entered into several
agreements to design, build, complete and deliver ships for the second
defendant, a wholly-owned subsidiary of the first defendant. Payment was
to be made in instalments. The defendants defaulted and the plaintiffs
held them in breach. They sued to recover damages for breach of contract.
The defendants argued that that there was a total failure of consideration
as they had received no vessel from the plaintiffs. The House of Lords
held that the plaintiffs’ promise when properly construed was not merely
to deliver the ships but to also design them. This latter part of the
promise the plaintiffs had performed. There was accordingly no total
failure of consideration.
[20] Absent a total failure of consideration, the common law right to
rescind does not exist. Goff & Jones "The Law of Restitution" (6th edn)
which is the leading text on the subject has this to say at p. 502, para.
20-007:
A breach of contract may be so fundamental that it deprives the ‘party who
has further undertakings still to perform of substantially the whole
benefit which it was the intention of the parties as expressed in the
contract that he should obtain as the consideration for performing those
undertakings.’ (Hong Kong Fir Shipping Co Ltd v. Kawasaki Kaisen Kaisha
Ltd [1962] 2 QB 26]. The innocent party has then an election. He may
affirm the contract or he may bring it to an end. In the latter event, if
he has paid money to the defendant under the contract, he can, as an
alternative to claiming damages, sue for recovery of the money provided
that the consideration for the payment has wholly failed; if the
consideration has partially failed, his only action is for damages.
(Emphasis added)
In other words, where there has been a total failure of consideration, the
innocent party has the alternative remedy of suing to recover monies paid
under the contract to the guilty party. But he can under no circumstances
have his money returned and claim damages. And if the consideration has
only partially failed, he may only claim damages. What is important is
that this limited common law right to rescind should never be equated with
the equitable remedy of rescission earlier discussed. I may add for
completeness that in this country the equitable remedy of rescission has
received statutory force. See, ss. 34 to 37 of the Specific Relief Act
1950.
[21] There are two leading English cases that make the position clear. The
first is Johnson v. Agnew [1980] AC 367, 392 where Lord Wilberforce said:
At this point it is important to dissipate a fertile source of confusion
and to make clear that although the vendor is sometimes referred to in the
above situation as ‘rescinding’ the contract, this so-called ‘rescission’
is quite different from rescission ab initio, such as may arise for
example in cases of mistake, fraud or lack of consent. In those cases, the
contract is treated in law as never having come into existence. (Cases of
a contractual right to rescind may fall under this principle but are not
relevant to the present discussion.) In the case of an accepted
repudiatory breach the contract has come into existence but has been put
an end to or discharged. Whatever contrary indications may be disinterred
from old authorities, it is now quite clear, under the general law of
contract, that acceptance of a repudiatory breach does not bring about
‘rescission ab initio’.
[22] The other is Photo Production Ltd v. Securicor Transport Ltd [1980] 1
All ER 556, where Lord Wilberforce repeated what he had said in Johnson v.
Agnew:
... when in the context of a breach of contract one speaks of
‘termination’ what is meant is no more than that the innocent party or, in
some cases, both parties are excused from further performance. Damages, in
such cases, are then claimed under the contract, so what reason in
principle can there be for disregarding what the contract itself says
about damages, whether it ‘liquidates’ them, or limits them, or excludes
them? These difficulties arise in part from uncertain or inconsistent
terminology. A vast number of expressions are used to describe situations
where a breach has been committed by one party of such a character as to
entitle the other party to refuse further performance; discharge,
rescission, termination, the contract is at an end, or dead, or displaced;
clauses cannot survive, or simply go. I have come to think that some of
these difficulties can be avoided; in particular the use of ‘rescission’,
even if distinguished from rescission ab initio, as an equivalent for
discharge, ... may lead to confusion in others. To plead for complete
uniformity may be to cry for the moon. But what can and ought to be
avoided is to make use of these confusions in order to produce a concealed
and unreasoned legal innovation ...
[23] In the same case Lord Diplock said:
When there has been a fundamental breach or breach of condition, the
coming to an end of the primary obligations of both parties to the
contract at the election of the party not in default is often referred to
as the ‘determination’ or ‘rescission’ of the contract or, as in the Sale
of Goods Act 1893, ‘treating the contract as repudiated’. The first two of
these expressions, however, are misleading unless it is borne in mind that
for the unperformed primary obligations of the party in default there are
substituted by operation of law what I have called the secondary
obligations.
[24] It is my considered judgment that the position is no different in
Malaysia. Section 40 of the Act is a re-statement of the English common
law position. It provides as follows:
When a party to a contract has refused to perform, or disabled himself
from performing, his promise in its entirety, the promisee may put an end
to the contract, unless he has signified, by words or conduct, his
acquiescence in its continuance.
Special attention should be paid to the phrase "his promise in its
entirety". Under the section the right in a non-defaulter to repudiate a
contract only accrues when the defaulter has refused to perform or has
disabled himself or herself from performing the whole of his promise. If
there is part performance by the defaulting party, the innocent party may
not put an end to the contract.
[25] That brings me to s. 56(1) of the Act which provides:
When a party to a contract promises to do a certain thing at or before a
specified time, or certain things at or before specified times, and fails
to do any such thing at or before the specified time, the contract, or so
much of it as has not been performed, becomes voidable at the option of
the promisee, if the intention of the parties was that time should be of
the essence of the contract.
[26] Learned counsel for the respondent submitted that since the
subsection employs the phrase "voidable at the option of the promisee", it
differs from the English common law. With respect that submission is
without merit. In the first place, it was held by the Privy Council in
Jamshed v. Burjorji AIR [1915] PC 83 that the section merely re-states the
common law on the subject. In that case, Viscount Haldane after setting
out s. 55 of the Indian statute said:
Their Lordships do not think that this section lays down any principle
which differs from those which obtain under the law of England as regards
contracts to sell land. Under that law equity which governs the rights of
the parties in cases of specific performance of contracts to sell real
estate, looks not at the letter but, at the substance of the agreement in
order to ascertain whether the parties, notwithstanding that named a
specific time within which completion was to take place, really and in
substance intended more than that it should take place within a reasonable
time.
[27] In the second place, particular attention must be paid to the wording
of the subsection. It says "fails to do any such thing" within the
stipulated time. The words "any such thing" refer to the promise in its
entirety. In my judgment, s. 56(1) should be read together with s. 40 of
the Act when determining whether a promisor has committed a breach of such
a nature that goes to the root of the contract. This is sometimes
described as a fundamental breach. In the third place, s. 56(1) as is the
case with the other provisions of the Act are ipsissimis verbis the
corresponding provisions of the Indian Contract Act 1872. That Act was
drafted at a time in the history of the English common law when decided
cases, spoke of the voidability of broken contracts and a right to rescind
such contracts. This is what Lord Wilberforce in Johnson v. Agnew referred
to as "the contrary indications" that "may be disinterred from old
authorities". In my judgment, the phrase "becomes voidable at the option
of the promisee" in s. 56(1) means this: a party not in default has a
choice whether to put an end to the contract or signify his or her
acquiescence in its continuance when the party in default commits a
fundamental breach of contract by not performing his entire promise within
the time stipulated by the contract, provided that time is of the essence
of the contract.
[28] I now come to the authorities relied on by the respondent in support
of its case. The first of these is Muralidhar Chatterjee v. International
Film Co Ltd AIR [1943] PC 34. In that case, the plaintiff, a distributor
of films in Calcutta entered into a contract with the defendants who
imported films into India. By the terms of the contract, the plaintiff was
to pay in advance for film prints that the defendants were to supply to
him. The plaintiff paid the defendant Rs 2000 in advance and then
proceeded to wrongfully repudiate the contract. The defendants elected to
put an end to the contract and purported to forfeit the advance paid. The
plaintiff sued to recover the sum paid under the contract relying on a
joint reading of ss. 39, 64 and 65 of the Indian Contract Act which are in
pari materia with ss. 40, 65 and 66 of the Act. The latter two sections
read:
65. When a person at whose option a contract is voidable rescinds it, the
other party thereto need not perform any promise therein contained in
which he is promisor. The party rescinding a voidable contract shall, if
he has received any benefit thereunder from another party to such
contract, restore such benefit, so far as may be, to the person from whom
it was received.
66. When an agreement is discovered to be void or when a contract becomes
void, any person who has received any advantage under such agreement or
contract is bound to restore it, or to make compensation for it, to the
person from whom he received it.
Illustration (c) to s. 66 reads as follows:
(c) A, a singer, contracts with B, the manager of a theatre, to sing at
his theatre for two nights in every week during the next two months, and B
engages to pay her a hundred rupees for each night’s performance. On the
sixth night, A wilfully absents herself from the theatre, and B, in
consequence, rescinds the contract. B must pay A for the five nights on
which she had sung.
The same illustration appears as illustration (a) to s. 39 of the Indian
Act, that is to say, s. 40 of the Act. Acting on this similarity the Privy
Council, whose judgment was delivered by Sir George Rankin said:
Though the Indian Act is to be interpreted according to the meaning of the
words used in it, such passages help to show that s. 39 and s. 64 cannot
be read together as a matter of course if they do not appear by the mere
force of their own language to link up. The question must therefore be
whether there is elsewhere in the Act sufficient to show that the contract
which may be ‘put an end to’ is ‘voidable’? To this question their
Lordships think the answer must be yes. The presence of illustration (c)
to s. 65 cannot be made consistent with any other view. The effect of s.
39 is explained by the example there given of a singer who wilfully
absents herself from the theatre. The same example serves also under s. 65
as illustration (c) and under s. 75. It is a prominent feature of this
portion of the Act. The right of one party upon refusal by the other to
perform the contract is described indifferently by the Act as a right to
‘put an end to’ or ‘rescind’ it; and illustration (c) plainly imports that
this right is either that of ‘a person at whose option the contract is
voidable’ (s. 64) or is such that by the exercise of it the contract
‘becomes void’ (s. 65). Of these two propositions it is to be observed
that they are not mutually exclusive, whether or not each involves the
other.
[29] In Linggi Plantations Ltd v. Jagatheesan [1971] 1 LNS 66, Lord
Hailsham said that Muralidhar Chatterjee:
is simply authority for the proposition that in section 65, where the
words ‘voidable’ or ‘rescind’ are used, they can be applicable not merely
to cases when a contract is brought to an end ab initio for fraud or undue
influence or some similar cause, but also to cases where one party elects
to terminate a contract repudiated by the other party through anticipatory
breach or rejection of its fundamental terms.
[30] In VK Kumaraswami Chettiar v. PASV Karuppuswami Mooppanar AIR [1953]
Mad 380 an unusually strong Bench of the Madras High Court comprising
Rajamannar, CJ and Venkatarama Aiyar J explained the decision in
Muralidhar Chatterjee as follows:
There the appellant had entered into a contract with the respondents for
distributing films in various areas and had paid a sum of Rs. 4000 as
advance. On 1-12-1933 the appellant wrote a letter complaining that the
defendants had committed several breaches of the contract and that he
would have no more business dealings with them. After some correspondence
the respondents accepted the repudiation by letter dated 31-1-1937. Then
the plaintiff filed an action for damages for breach of contract and also
for the return of the advance. It was found that the defendants had not
broken the contract and on that finding the claim for damages was
dismissed. With reference to the claim for return of advance it was
contended by the defendants that the plaintiff who was in default could
not recover the same; while the plaintiff contended that as the contract
had been rescinded by the respondents on 21-1-1937 he was entitled to its
return under Section 64, Contract Act. The Privy Council accepted this
contention and held that the plaintiff was entitled to recover the advance
amount and that the right of the defendants was to make a cross claim for
damages against the appellants for breach of contract. The decision as
such has no bearing on the point now under discussion but it is argued
that the case was dealt with as one falling under section 39, Contract
Act; that the repudiation by the appellant contained in his letter dated
1-12-1936 was held to give a right to the respondents to avoid the
contract and the letter dated 31-1-1937 was treated as an acceptance of
the repudiation by them. In the same manner, contends Mr. N. Rajagopala
Aiyangar, the failure of the respondent to take delivery of the goods on
2-8-1943 gave the appellants only a right to avoid the contract and they
not having done that, the contract stood. But the agreement which the
Privy Council had to consider in Muralidhar Chatterjee v. International
Film Ltd., was a continuing contract involving mutual obligations and is
similar to the one which came before the House of Lords in Heyman v.
Darwins [1942] AC 356. For the reasons already given, this decision cannot
be taken as an authority for the contention that section 39 applies even
when there is a refusal to perform the contract after the time for
performance has arrived.
[31] In Rama Rao v. Bashu Khan Saheb [1998] 2 CTC 363,
K Sampath J, after discussing the case of Shree Hanuman Cotton Mills v.
Tata Air Craft Ltd AIR [1970] SC 1986 said this:
While dealing with that case, the Supreme Court referred to the decision
in Muralidhar Chatterjee v. International Film Co., Ltd., AIR [1943] PC 34
and held that restoration of benefit under section 64 of the Contract Act
(section 65 of the Act) would arise only when there was no breach on the
part of the person seeking such restoration. The situation here is also
similar. In my view, the decision of the Supreme Court relied upon by the
learned counsel for the appellants does not help the appellants at all.
(Emphasis added.)
[32] In my view, the decision in Muralidhar Chatterjee v. International
Film Co Ltd is readily explainable on the basis of the doctrine of
restitution. There the plaintiff had paid moneys to the defendants but had
received nothing in return. It would be an unjust enrichment to have
permitted the defendants to keep the money when they had put an end to the
contract. However, the defendants had a valid counterclaim for damages for
breach of contract against the plaintiff. And they would, in recovering
those damages, be obliged to give the plaintiff credit for the monies he
had already paid. The true principle is this. A contract breaker must pay
damages to the innocent party. However, if he has made any payment under
the contract (not being a true deposit for the purchase of movable or
immovable property) the contract breaker is entitled to have that payment
set off against the damages he has to pay. However, he cannot seek to
recover any benefit he may have conferred upon the innocent party where he
is himself guilty of a breach of contract. Were it otherwise, a contract
breaker will be in a position to take advantage of his own wrong. This is
against principle and the policy of the law. In my judgment Muralidhar
Chatterjee v. International Film Co Ltd does not decide any opposite
principle. It does not therefore assist the instant respondent.
[33] The next authority relied on by the respondent is Tan Yang Loong &
Anor v. Newacres Sdn Bhd [1992] 1 CLJ 211; [1992]
3 CLJ (Rep) 666. It is a judgment of Mahadev Shankar J (later JCA) whose
views carry much weight. It was a case governed by the Housing Developers
Act. There, several purchasers had entered into an agreement with the
developer under which the latter was to construct and deliver a house with
vacant possession within 36 months from the date of the agreement. The
purchasers had made several payments to the developer. But the developer
never constructed the house. In short, he failed or refused to perform his
promise in its entirety within the time limited by the agreement. In fact
the house had not even been constructed as at the date when the
purchasers’ action was tried. Hence, Shankar J had no difficulty in
upholding the purchasers’ claim for a declaration that they were no longer
bound by the agreement and ordering a refund of the sums paid by them.
That was a case in which there was a total failure of consideration and
hence came within the common law rule. The present case is
distinguishable. The appellant did construct the tower block in which the
respondent’s unit was located. But it did not complete the construction
within the specified time. It delayed the actual delivery.
[34] The other case relied on is Chye Fook v. Teh Teng Seng Realty Sdn Bhd
[1988] 1 LNS 213. There, the purchaser had entered into an agreement dated
8 August 1984 with the developer under the terms of which the house was to
be completed on 7 August 1986, that is to say, 24 months after the date of
the agreement. Time was of the essence of the contract. Also, there was a
clause which said that "if the vendor fails to deliver vacant possession
of the said building in time the vendor shall pay immediately to the
purchaser liquidated damages to be calculated from day to day at the rate
of ten per centum (10%) per annum of the purchase price". The building was
not completed on the agreed date. The purchaser then wrote to the
developer on 19 January 1987 rescinding the agreement because the building
had not been delivered within the agreed 24-month period. But the building
was finally completed in May 1987 and the certificate of fitness was
issued on 9 December 1987. The purchaser successfully brought an action
for rescission. When giving judgment, the High Court referred to Mayson v.
Clouet where Lord Dunedin said this:
If one party to a contract commits a breach then if that breach is
something that goes to the root of the contract, the other party has his
option. He may still treat the contract as existing and sue for specific
performance; or he may elect to hold the contract as at an end, that is,
no longer binding on him - while retaining the right to sue for damages in
respect of the breach committed
This is perfectly good law and is the exact position reflected in
s. 40 of the Act.
Having cited other authorities, including Johnson v. Agnew and Photo
Productions, the High Court said this in its judgment:
There was no evidence as to what stage of building progress the building
was at the completion date but from the photographs taken in July 1987,
only the plaintiffs’ house had been built out of a row of terrace houses
and also no other houses could be seen in the area. Since, from the
photographs, the plaintiffs’ house appears to be the only house built in
the area, it is possible that the construction could have even begun after
the completion date. That, however, is of secondary importance.
What is relevant here is that the plaintiffs had entered into a sale and
purchase agreement with the defendants to buy the house and had expected
to move into the house two years later. They certainly would have made the
necessary preparations for this event and any change in plans would have
caused them a great deal of inconvenience and expense. Therefore, if the
house was not completed on the appointed date and in fact had not been
completed even five months thereafter when the notice to terminate was
sent to the defendants and was only completed nine months later and the
certificate of fitness issued 16 months after the appointed date, the
court is of the view that it is within the right of the purchaser
plaintiffs to rescind the contract with the defendants based on legal
principles and case law.
[35] In my respectful view the High Court in Chye Fook v. Teh Teng Seng
Realty Sdn Bhd fell into error in equating the right to terminate for a
fundamental breach of contract ie, a breach going to the root of the
contract on the one hand with the equitable remedy of rescission on the
other. But the decision may nevertheless be supported on its peculiar
facts because as may be seen from the judgment, that was a case in which,
at the material time the building had not even been constructed. So, as at
the date on which the purchaser was to have the house, construction had
not even commenced. The actual decision on its facts is therefore
supportable as at the material time, the developer had not done any of the
things it had promised to do within the time specified by the contract.
But in the present case the facts are very different. Here, the
construction had commenced and was well on its way. There was a delay in
the delivery of vacant possession and for that breach the contract itself
provides a remedy - the payment of liquidated damages calculated on the
agreed formula. Put simply, this is not a case where there has been a
total failure of consideration.
[36] The last authority relied upon by the respondent is Law Ngei Ung v.
Tamansuri Sdn Bhd [1989] 2 CLJ 181; [1989] 2 CLJ (Rep) 44 where rescission
was granted by the High Court for failure on the part of the defendant to
complete the business complex in which the plaintiff had purchased a unit
shop lot. That case, however, is supportable on the ground that there had
been an abandonment of the entire project because of a dispute between the
defendant and its contractor. It is a plain and obvious case of a total
failure of consideration. Had the High Court stopped with directing a
restitutio in integrum, there can be no complaint. It however went on to
direct the assessment of damages. That on the authorities is clearly
unsupportable. The plaintiff in a case of total failure of consideration
may have a refund of the monies he or she may have paid the defendant. In
the alternative, he or she may claim damages. But what the plaintiff
cannot do is to have both rescission and damages. For, that results in the
plaintiff being unjustly enriched.
[37] The appellant argues that the time clause must be read together with
the rest of the agreement, in particular the liquidated damages clause, to
determine as a matter of interpretation whether time was indeed of the
essence in respect of the obligation to deliver up the respondent’s parcel
to it within the stipulated period. It is convenient at this stage to
reproduce the relevant clause in full. It is cl. 22 and this is what it
says:
(1) The Premises shall be completed by the Developer and vacant possession
of the Premises shall be handed over to the Purchaser within thirty-six
(36) calendar months from the date of this Agreement (‘36 Month Period’)
PROVIDED ALWAYS that the Purchaser shall irrevocably grant to the
Developer an extension of three (3) months from the expiry of the 36 Month
Period (‘Extended Period’) in the event that vacant possession of the
Premises is not handed over to the Purchaser within the 36 Month Period.
(2) If the Developer fails to hand over vacant possession of the Premises
within the Extended Period, the Developer shall pay immediately to the
Purchaser liquidated damages to be calculated from day to day at the rate
of twelve per centum (12%) per annum of the Purchase Price from the date
of the expiry of the Extended Period up to the day of delivery of vacant
possession of the Premises.
(3) For the avoidance of doubt, the Purchaser hereby agrees that no claim
shall be maintained or instituted against the Developer for any damages,
loss, interest, costs and expenses in the event the Developer hands over
vacant possession of the Premises after the 36 Month Period but within the
Extended Period.
[38] It is the appellant’s case that the promise to pay liquidated damages
renders time to be no longer of essence for the purposes of s. 56(1) of
the Act. This is not a case, the appellant submits, where there has been
an abandonment of the project. On the contrary the project here has been
completed, albeit beyond the stipulated time limit. Accordingly, the
respondent is not entitled to rescind the agreement at common law: nor is
it entitled to lawfully repudiate it for breach by the appellant. Before
considering these submissions, it is necessary as a first step in the
process of interpretation to ascertain the meaning and effect of cl. 22(2)
- the liquidated damages clause.
[39] In Loh Wai Lian v. SEA Housing Corporation Sdn Bhd, the Board of the
Privy Council had occasion to interpret a not dissimilar clause in a
statutorily regulated contract. This is what Lord Oliver of Aylmerton said
when delivering the judgment of the Board:
It is, in their Lordships’ view, tolerably clear that the only rational
purpose of defining a payment to be made by the vendor, by reference to
what has become a conventional term, as ‘agreed liquidated damages’ was to
make it clear that the purchaser was not to have any right to any other
payment by way of damages in respect of the delay over and above what the
vendor was undertaking to pay, for there could not sensibly be any
prospect of a sum calculated according to mandatory statutory provisions
being held to be irrecoverable as a penalty.
Applying Lord Oliver’s reasoning by analogy, it is my judgment that cl.
22(2) on its true interpretation makes it clear that so far as monetary
compensation is concerned, all that the respondent was entitled to in the
event of a delay was the "liquidated damages" calculated in accordance
with the terms of that clause. It was certainly not entitled to any
additional sum by way of damages at large. The further question to be
asked is if cl. 22(2) has any impact on cl. 32 which declares that time
shall be of the essence of the contract.
[40] The appellant relies on Hind Construction Contractors v. State of
Maharashtra AIR [1979] SC 720 in support of its case. There, the
appellant/plaintiff was employed to undertake the construction of an
aqueduct. Construction had to be completed within twelve months. The
appellant failed to do so and the respondent/defendant treated the
contract as at an end. The issue was whether time was of the essence of
the contract. The court of first instance held that time was not of the
essence of the contract. On appeal, the High Court reversed on other
grounds not relevant for the present discussion. On further appeal the
Supreme Court set aside the judgment of the High Court and restored the
finding made at first instance. Tulzapurkar J when delivering the judgment
of the court (Chandrachud CJ (India) and AP Sen J concurring) quoted the
following passage from the 4th edition of Halsbury’s Laws of England, Vol.
4, para. 1179:
The expression time is of the essence means that a breach of the condition
as to the time for performance will entitle the innocent party to consider
the breach as a repudiation of the contract. Exceptionally, the completion
of the work by a specified date may be a condition precedent to the
contractor’s right to claim payment. The parties may expressly provide
that time is of the essence of the contract and where there is power to
determine the contract on a failure to complete by the specified date, the
stipulation as to time will be fundamental. Other provisions of the
contract may, on the construction of the contract, exclude an inference
that the completion of the works by a particular date is fundamental, time
is not of the essence where a sum is payable for each week that the work
remains incomplete after the date fixed, nor where the parties contemplate
a postponement of completion.
Where time has not been made of the essence of the contract or, by reason
of waiver, the time fixed has ceased to be applicable, the employer may by
notice fix a reasonable time for the completion of the work and dismiss
the contractor on a failure to complete by the date so fixed. (The
emphasis is that of Tulzapurkar J)
The learned judge then proceeded:
It will be clear from the aforesaid statement of law that even where the
parties have expressly provided that time is of the essence of the
contract such a stipulation will have to be read along with other
provisions of the contract and such other provisions may, on construction
of the contract, exclude the inference that the completion of the work by
a particular date was intended to be fundamental; for instance, if the
contract were to include clauses providing for extension of time in
certain contingencies or for payment of fine or penalty for every day or
week the work undertaken remains unfinished on the expiry of the time
provided in the contract such clauses would be construed as rendering
ineffective the express provision relating to the time being of the
essence of contract. The emphasised portion of the aforesaid statement of
law is based on Lamprell v. Billericay Union, [1849] 3 Exch 283 at p. 308;
Webb v. Hughes, [1870] 10 Eq 281 and Charles Rickards Ltd. v. Oppenheim,
[1950] 1 KB 616. It is in light of the aforesaid position in law that we
will have to consider the several clauses of the contract Ex. 34 in the
case.
[41] I respectfully accept that the foregoing passages are an accurate
statement of the law governing s. 56(1) of the Act. In my judgment, while
individual contracts will fall to be interpreted in accordance with their
own terms, it is a useful guide to construction that a stipulation as to
time must be read along with other provisions of the contract to determine
if time is truly of the essence of the contract. Further, a clause
providing for the payment of a sum whether as a fine, a penalty or as
liquidated damages calculated on a daily basis for the period that the
work undertaken remains unfinished on the expiry of the time provided in
the contract would, in the absence of a contrary intention to be gathered
from the contract, point to time not being of the essence.
[42] Here it is important to bear in mind that a contract is to be
interpreted in accordance with the following guidelines. First, a court
interpreting a private contract is not confined to the four corners of the
document. It is entitled to look at the factual matrix forming the
background to the transaction. Second, the factual matrix which forms the
background to the transaction includes all material that was reasonably
available to the parties. Third, the interpreting court must disregard any
part of the background that is declaratory of subjective intent only.
Lastly, the court should adopt an objective approach when interpreting a
private contract. See, Investors Compensation Scheme Ltd v. West Bromwich
Building Society [1998] 1 All ER 98. As Lord Clyde said in Bank of Credit
and Commerce International SA v. Munawar Ali [2001] 2 WLR 735:
The knowledge reasonably available to them (that is to say the parties to
the contract) must include matters of law as well as matters of fact. The
problem is not resolved by asking the parties what they thought they
intended. It is the imputed intention of the parties that the court is
concerned to ascertain. The parties may well have never applied their
minds to the particular eventuality which has subsequently arisen, so that
they may never in fact have had any conscious intention in relation to
that eventuality. It is an objective approach which is required and a
solution should be found which is both reasonable and realistic. The
meaning of the agreement is to be discovered from the words which they
have used read in the context of the circumstances in which they made the
agreement. The exercise is not one where there are strict rules, but one
where the solution is to be found by considering the language used by the
parties against the background of the surrounding circumstances.
[43] In Nouvau Mont Dor (M) Sdn Bhd v. Faber Development Sdn Bhd [1985] 1
CLJ 56; [1985] CLJ (Rep) 231, Seah FJ expressed the view that:
... whether or not an assignment is an absolute one (not purporting to be
by way of charge only) within the meaning of section 4(3) of the Civil Law
Act 1956 is to be gathered only from the four corners of the instrument
itself.
This view is not consistent with the speech of Lord Wilberforce in the
earlier case of Prenn v. Simmonds [1971] 3 All ER 237, 241 (applied by the
former Federal Court in Keng Huat Film Co Sdn Bhd v. Makhanlall
(Properties) Pte Ltd [1983] 2 CLJ 187; [1983] CLJ (Rep) 186 FC) and later
learning to be found in the decisions of the House of Lords in Investors
Compensation Scheme Ltd v. West Bromwich Building Society and Bank of
Credit and Commerce International SA v. Munawar Ali. The most recent
statement of the guideline to interpretation of contracts statutes and
other instruments is to be found in Attorney General of Belize v. Belize
Telecom Limited [2009] UKPC 11, where when delivering the Advice of the
Board, Lord Hoffmann said:
The court has no power to improve upon the instrument which it is called
upon to construe, whether it be a contract, a statute or articles of
association. It cannot introduce terms to make it fairer or more
reasonable. It is concerned only to discover what the instrument means.
However, that meaning is not necessarily or always what the authors or
parties to the document would have intended. It is the meaning which the
instrument would convey to a reasonable person having all the background
knowledge which would reasonably be available to the audience to whom the
instrument is addressed: see Investors Compensation Scheme Ltd v. West
Bromwich Building Society [1998] 1 WLR 896, 912-913. It is this objective
meaning which is conventionally called the intention of the parties, or
the intention of Parliament, or the intention of whatever person or body
was or is deemed to have been the author of the instrument.
It follows from these authorities that the view of Seah FJ in Nouvau Mont
Dor (M) Sdn Bhd v. Faber Development Sdn Bhd quoted above is not good law
and should not be followed.
[44] Returning to the mainstream, we have here an agreement which contains
two clauses. One that provides for the payment of a sum as liquidated
damages calculated on a daily basis for the period of delay in making
delivery of the premises in question and another that makes time of the
essence of the contract. Applying the guidelines discussed earlier, it is
my judgment that time is not of the essence of the agreement in this case.
A promise to construct and deliver a building within a stipulated time
coupled with a promise to compensate for any delay in delivery is
inconsistent with a right to terminate on the ground that time is of the
essence. It certainly points to an intention that time was not to be of
the essence.
[45] There is alternative ground for holding that time is not of the
essence. It is this. The respondent, though it had the right to put an end
to the contract when the appellant failed to deliver the unit within the
stipulated time, did not do so. Instead, it continued making payments and
negotiating for delivery. The respondent’s conduct certainly points to the
conclusion that even if time was of the essence when the contract was made
(speaking advisedly) it ceased to be of the essence. There are many
authorities on the subject. But I find it sufficient to merely refer to
the judgment of Raja Azlan Shah J (as His Royal Highness then was) in Wong
Kup Sing v. Jeram Rubber Estates Ltd [1969]
1 LNS 201 where he said:
Once the time for completion was allowed to pass and the parties went on
negotiating, then time was no longer of the essence of the contract and
the defendants must give a reasonable notice of their intention to abandon
the contract if the balance of the purchase money was not paid: (Webb v.
Hughes [1870] LR 10 Eq 281, 286, Stickney v. Keeble [1915] AC 386, 423).
If the defendants had on the very day of 30th November 1966 ie, the
original date for completion, made their stand, their decision would have
been that time was of the essence and it would have been proper for them
to give notice on the day fixed for completion that they would abandon the
contract; but after going on negotiating they should have given a
reasonable notice: (Tilley v. Thomas LR 3 Ch D 61).
However, I am content to decide this appeal on the former ground, that is
to say, that when the agreement in this case is properly construed in
accordance with the relevant guidelines, time was not of the essence ab
initio.
[46] To summarise, this is a case in which, upon a proper construction of
the agreement, time was not of the essence. The respondent was not
therefore entitled to terminate or put an end to the contract when the
appellant failed to deliver the unit of shop lot on the stipulated date.
All that it was entitled to receive was compensation calculated on the
agreed basis. Its purported termination of the agreement was therefore
wrongful.
[47] It follows from what I have said thus far that the courts below were
wrong in finding for the respondent. I would accordingly allow this appeal
and set aside the orders of the High Court and the Court of Appeal. The
respondent’s action is dismissed. Costs at all levels are awarded to the
appellant. The deposit in court shall be refunded to it.
[48] My learned brother Mohd Ghazali bin Mohd Yusoff, FCJ has seen this
judgment in draft and has expressed his agreement with it.
* * * * * *
Case(s) referred to:
Attorney General of Belize v. Belize Telecom Limited [2009] UKPC 11 (refd)
Bank of Credit and Commerce International SA v. Munawar Ali [2001] 2 WLR
735 (refd)
Bowes v. Chaleyer [1923] 32 CLR 159 (refd)
Car and Universal Finance v. Caldwell [1965] 1 QB 525 (refd)
Chye Fook v. Teh Teng Seng Realty Sdn Bhd [1988] 1 LNS 213 HC (refd)
Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd [1943] AC 32
(refd)
Freeth v. Burr [1874] LR 9 CP 208 (refd)
Great Peace Shipping Ltd v. Tsavliris Salvage (International) Ltd [2002]
EWCA Civ 1407 (refd)
Hind Construction Contractors v. State of Maharashtra AIR [1979] SC 720 (refd)
Hongkong Fir Shipping Co Ltd v. Kawasaki Kisen Kaisha [1962] 2 QB 26 (refd)
Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998]
1 All ER 98 (refd)
Jamshed v. Burjorji AIR [1915] PC 83 (refd)
Johnson v. Agnew [1980] AC 367 (refd)
Keng Huat Film Co Sdn Bhd v. Makhanlall (Properties) Pte Ltd [1983] 2 CLJ
187; [1983] CLJ (Rep) 186 FC (refd)
Law Ngei Ung v. Tamansuri Sdn Bhd [1989] 2 CLJ 181; [1989] 2 CLJ (Rep) 44
HC (refd)
Linggi Plantations Ltd v. Jagatheesan [1971] 1 LNS 66 PC (refd)
Loh Wai Lian v. SEA Housing Corporation Sdn Bhd [1987] 1 LNS 37 PC (refd)
Longstaff v. Birtles [2001] EWCA (Civ) 1219 (refd)
Mannai Investment Co Ltd v. Eagle Star Life Assurance Co Ltd [1997] AC 749
(refd)
Mayson v. Clouet & Anor [1924] AC 980 (refd)
Moschi v. Lep Air Services Ltd [1973] AC 331 (refd)
Muralidhar Chatterjee v. International Film Co Ltd AIR [1943] PC 34 (refd)
Nouvau Mont Dor (M) Sdn Bhd v. Faber Development Sdn Bhd [1985] 1 CLJ 56;
[1985] CLJ (Rep) 231 FC (refd)
Philpot v. Evans [1839] 151 ER 200 (refd)
Photo Production Ltd v. Securicor Transport Ltd [1980] 1 All ER 556 (refd)
Prenn v. Simmonds [1971] 3 All ER 237 (refd)
Rama Rao v. Bashu Khan Saheb [1998] 2 CTC 363 (refd)
Rasiah Munusamy v. Lim Tan & Sons Sdn Bhd [1985] 1 CLJ 541; [1985] CLJ
(Rep) 266 FC (refd)
Ripley v. M’Clure [1849] 154 ER 1245 (refd)
Sargent v. ASL Developments Ltd [1974] 131 CLR 634 (refd)
Shree Hanuman Cotton Mills v. Tata Air Craft Ltd AIR [1970] SC 1986 (refd)
Solle v. Butcher [1949] 2 All ER 1107 (refd)
Tan Yang Loong & Anor v. Newacres Sdn Bhd [1992] 1 CLJ 211; [1992] 3 CLJ
(Rep) 666 CA (refd)
VK Kumaraswami Chettiar v. PASV Karuppuswami Mooppanar AIR [1953] Mad 380
(refd)
Wong Kup Sing v. Jeram Rubber Estates Ltd [1969] 1 LNS 201 HC (refd)
Legislation referred to:
Contracts Act 1950, ss. 40, 56(1), 65, 66
Specific Relief Act 1950, ss. 34, 35, 36, 37
Contract Act 1872 [India], ss. 39, 55, 64, 65
Other source(s) referred to:
Goff & Jones, The Law of Restitution, 6th edn, p 502, para 20-007
Halsbury’s Laws of England, vol 4, 4th edn, para 1179
For the appellant - B Thangaraj (Ranjan Chandran with him); M/s Thangaraj
& Assoc
For the respondent - Lambert Rasa-Ratnam (Mong Chung Seng & Kokila Vaani
Vadiveloo with him); M/s Lee Hishamuddin Allen & Glendhill
[Appeal from Court of Appeal; Civil Appeal No: W-02-546-2004]
[Editor’s note: For the Court of Appeal judgment, please see Berjaya Times
Square Sdn Bhd v. M-Concept Sdn Bhd [2010] 1 CLJ 309]
Reported by Amutha Suppayah
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