LIM CHON BENG V. PULAU KEMBAR SDN BHD

CIVIL PROCEDURE: Summary judgment - Application for - Matters to be considered - Whether plaintiff's claim plain and obvious - Whether there were triable issues - Rules of the High Court 1980, O. 81
CONTRACT: Breach - Time of the essence - Whether constituted a fundamental breach of Agreement - Whether defendant repudiated Agreement - Whether plaintiff entitled to rescind Agreement - Contracts Act 1950, ss. 40
CIVIL PROCEDURE: Appearance - Unconditional appearance - Effect of - Whether defendant waived any irregularity in proceedings

This was an application by way of summons in chambers by the plaintiff for summary judgment under Rules of the High Court 1980, O. 81. By virtue of a written agreement dated 14 September 1996, the plaintiff had purchased a shop-lot from the defendant, a housing developer, at a price of RM590,800. To date, the defendant had still not completed the construction of the property despite the fact that the plaintiff, as at 10 June 1999, had paid the defendant a total sum of RM295,400 as progress payments towards the purchase price. Despite numerous enquiries, the plaintiff received no response from the defendant and eventually informed the defendant by written notice that the agreement was deemed terminated through the defendant's own repudiation. The plaintiff then filed this originating summons seeking, inter alia: (a) a declaration that the plaintiff had rightly terminated the agreement or that the agreement had been rescinded through the defendant's repudiation; (b) refund of the sum of RM295,400 paid by the plaintiff by way of progress payments towards the purchase price; (c) liquidated damages of RM146,000.43, being 10% interest on the purchase price as calculated from the completion date to the date of rescission; and (d) post-rescissionary damages.

Held (partially allowing the application):

[1] The defendant, having entered an unconditional appearance, was precluded from raising any objection based on the plaintiff's locus standi herein.

(p 29 c)

[2] The defendant's failure to deliver the property to the plaintiff within the time expressly stated to be of the essence clearly constituted a fundamental breach of the agreement, which brought about the defendant's repudiation of the agreement, thereby entitling the plaintiff to the remedy of rescission of the agreement. Contracts Act 1950, ss. 40 was applicable in the instant case since the plaintiff had not signed his acquiescence in its continuance. On the contrary, the plaintiff had, by way of the final letter dated 9 June 2003, informed the defendant that the agreement was deemed terminated through the defendant's own repudiation. In the circumstances, the plaintiff was entitled to rescind the agreement. (pp 30 c, 31 e & 32 c)

[3] Bearing in mind that the instant application was for summary judgment, which was only to be entered in the absence of a triable issue or where the plaintiff's claim was plain and obvious, the plaintiff's quantification of liquidated damages based on the entire purchase price was highly arguable as the plaintiff had not effected payment thereof, but merely RM295,400, which was 50% of it. Thus, whether or not the plaintiff was entitled to claim 10% interest on the entire purchase price when he had only paid half of it was clearly a triable issue. In other words, the plaintiff's claim in prayer (c) could not be said to be plain and obvious. Similarly, the plaintiff's prayer (d) for post-rescissionary damages, being unquantified, would be a matter that had to be proved at the trial by way of a full hearing. (pp 32 h & 33 a-c)

[4] The plaintiff had succeeded in establishing that the defendant had no defence to his claim in prayers (a) and (b). However, the same could not be said of prayers (c) and (d), which were to proceed to full hearing at the trial. (p 33 d-e)

Case(s) referred to:

Cheah Khoon Tee v. Crimson Development Sdn Bhd [1999] 8 CLJ 79 HC (dist)

Christina Angelina William Bastian & Anor v. Newacres Sdn Bhd [1996] 2 BLJ 509 HC (dist)

Lim Sew Lan v. Pembangunan Hysham Sdn Bhd & Anor [1999] 4 CLJ 701 HC (refd)

M-Concept Sdn Bhd v. Berjaya Square Sdn Bhd [2004] 4 CLJ 852 HC (refd)

Nga Sheau Sheau v. United Merchant Finance Bhd [2004] 3 CLJ 243 HC (foll)

Phileoalied Bank (M) Bhd v. Bupinder Singh Avatar Singh & Anor [2002] 2 CLJ 621 FC (refd)

Travelsight (M) Sdn Bhd & Anor v. Atlas Corporation Sdn Bhd [2003] 6 CLJ 344 HC (refd)

Legislation referred to:

Civil Law Act 1956, s. 4(3)

Contracts Act 1950, ss. 40, Contracts Act 1950, ss. 56(1)

Rules of the High Court 1980, O. 81 r. 2(2)

For the plaintiff - Ang Beng Hoe; M/s Ang Beng Hoe & Co

For the defendant - Rohaya Hj Yaziz; M/s Raymond & Yeo

[As ordered.]