Mohd Hafis Bin Mohd Nasir v Zaharudin Bin Othman (BA-22NCvC-353-08/2025)

Declaration that the Sale and Purchase Agreement dated 11.8.2023 made between the Defendants (as Vendors) and the Plaintiffs (as Purchasers) (“the SPA”) for the purchase of a 2 ½ storey terrace house bearing postal address No 12, Jalan Puncak 5, Taman Bukit Utama, 68000 Ampang, Selangor (“the Property”) and held under title particulars HSD 60142, PT 3125, Bandar Ulu Kelang, Daerah Gombak, Negeri Selangor (“the Title”) is void and of no effect;

Order that the SPA is terminated;

Order for the Plaintiffs remove the caveat lodged against the Property (“the Caveat”) within seven (7) days;

Order for the Plaintiffs to deliver vacant possession of the Property to the Defendants within seven (7) days;

Order for the Plaintiffs to pay arrears in rental: • RM 2,500.00 per month from 1.11.2023 to 2.7.2023; • RM 5,000.00 per month (double-rental) from 3.7.2025 until delivery of vacant possession. [2] After perusal of the cause papers and upon hearing submissions by the counsels, I have allowed Enclosure 10 based on the reasonings which I shall explain hereafter. Background facts [3] By a Principal Sale and Purchase Agreement dated 19.4.2007 made between IRDK Developments (M) Sdn Bhd (“the Developer”) and the Defendants (as Purchasers) (“the Principal SPA”), the Defendants have purchased the Property from the Developer. [4] By a Loan Agreement and Assignment dated 26.6.2007 made between CIMB Bank Berhad (“CIMB”) and the Defendants (as Borrowers), the Property was assigned to CIMB in consideration of the loan financing provided for the purchase of the Property (“the CIMB Loan”). [5] The Defendants (as Vendors) and the Plaintiffs (as Purchasers) entered into the SPA on 11.8.2023. The purchase price is RM 1,080,000.00 (“the Purchase Price”), payable as follows: -

The sum of RM 34,344.00 (“the Earnest Deposit”) has been paid by the Plaintiffs to Great Casa Realty Sdn Bhd (“the Estate Agent”);

The sum of RM 73,656.00 (“the Balance Deposit”) has been paid by the Plaintiffs to the Plaintiffs’ solicitor (“the Solicitor”) as stakeholder, to be released upon the fulfilment of the condition precedent;

The balance purchase price is RM 972,000.00 (“the Balance Purchase Price”). [6] The Title has not yet been registered into the names of the Defendants. Since the Defendants and the Plaintiffs have entered into the SPA, the Developer has been requested to execute a direct transfer of the Title directly to the Plaintiffs (“the Direct Transfer”). [7] However, the Developer did not agree to execute the Direct Transfer. As such, the Title would have to be transferred from the Developer to the Defendants (“the 1st Transfer”). Thereafter, the Title would then have to be transferred from the Defendants to the Plaintiffs (“the 2nd Transfer”). [8] Accordingly, the completion date for the SPA shall be as follows: -

The completion date for the SPA is within 180 days (6 months) from the 1st Transfer being completed and for the Defendants to be registered as the registered owner in the

The extended completion date for the SPA is 30 working days from the expiry of the Completion Date (“the Extended Completion Date”). [9] However, it must also be noted that the Property is a leasehold land and the Title is subject to a restriction-in-interest (“the Restriction”), in that the Property cannot be transferred unless the approval (“the Consent to Transfer”) from the state authority (“the State Authority”) is obtained. In this respect, it has been agreed that: -

Clause 2.1 of the SPA states that the Vendors shall apply and procure the Consent to Transfer from the State Authority within 180 days from the date of the SPA (“the

In the event the Consent to Transfer is not obtained by the Approval Period, the Vendors shall be given a further period of 30 working days from the expiry of the Approval

If the Consent to Transfer is subject to terms which are not acceptable to either party or the Consent to Transfer is rejected, the SPA may be terminated according to Clause 2.4. [10] On 20.10.2023, the Plaintiffs and the Defendants entered into a supplementary agreement (“the Early VP and Tenancy Arrangement”) by signing a confirmation cum undertaking letter (“the Undertaking Letter”) to deliver early vacant possession of the Property as follows: -

(a)

The Monthly Rental shall commence in January 2024;

The Defendants shall also permit the Plaintiffs to conduct renovation/alteration/addition to the Property (“the Renovations”), subject to the approval from the local authority (“the Local Authority”) being obtained;

In the event the SPA is aborted or terminated, the Defendants shall refund all the costs and expenses for the Renovations. [11] To make matters worse, the Developer has been dissolved. An origination summons WA-24NCC-416-07/2025 (“the OS”) has commenced for an order that the Suruhanjaya Syarikat Malaysia (“the SSM”) be empowered to execute the 1st Transfer (for and on behalf of the Developer). The OS is still pending at this juncture. [12] The Defendants now asserts the following matters: -

The Plaintiffs has failed to pay the Monthly Rental from the date of vacant possession;

The Plaintiffs had conducted the Renovations to the

However, the Renovations were illegal as there was no approval by the Local Authority;

The Local Authority had issued a stop-work order on 9.11.2024;

The Local Authority had also issued a notice on 27.8.2025 for the Renovations to be demolished, failing which, the

Defendants (as owners) will be liable to a fine of RM 00 per day;

The Defendants had issued the letter dated 1.8.2025 (“the Termination Letter”) to terminate the SPA. Summary of the Defendants’ case (in supporting Enclosure 10) [13] The Defendants state that the Plaintiffs were aware that the Title has not yet been transferred from the Developer to the Defendants. The Plaintiffs were also aware that the Developer has already been struck-off by the SSM on 13.4.2011. [14] The Defendants, who were legally unrepresented, were assured by the Solicitor that the 1st Transfer and the 2nd Transfer will be able to be conducted. Based on these assurances, the Defendants, in good faith, gave vacant possession to the Plaintiffs on 1.11.2023. The Defendants, on the other hand, had to move out from the Property and had to rent an alternative premises while waiting for the payment of the Purchase Price. [15] The Defendants state that the Plaintiffs has failed to pay the Monthly Rental from the date of delivery of vacant possession. [16] The Defendants also state that the Renovations were illegal as there was no approval given by the Local Authority. The Local Authority had issued a stop-work order on 9.11.2024. The Local Authority had also issued a notice on 27.8.2025 for the Renovations to be demolished, failing which the Defendants, as owners of the Property, will be liable to a continuing fine of RM

500.00 per day. [17] Additionally, the Defendants also argue that the SPA is void as the First Defendant was already adjudged a bankrupt on 22.5.2017. As such, the First Defendant had no legal capacity to enter into the SPA. [18] The Defendants also state that deposit sum amounting to RM 108,000.00 (“the Deposit”) was never paid to them. [19] The Defendants had also issued the Termination Letter to terminate the SPA. Summary of the Plaintiffs’ case (in opposing Enclosure 10) [20] The Plaintiffs state that there was no evidence provided as to whether the First Defendant has obtained the consent of the Director General of Insolvency, or whether the Second Defendant can sell the Property beneficially. The Plaintiff argue that this is an issue of law that needs to be considered at a full trial. [21] The Plaintiffs also state that the OS has not yet been heard and decided. As such, the issue of the Developer being dissolved has not yet been decided. [22] The Plaintiffs also state that the Deposit is currently being held by the Solicitor as stakeholder. [23] On the issue of the Monthly Rental, the Plaintiffs argue that this is an issue of fact that needs to be decided in a full trial. [24] Similarly, on the issue of whether the approval of the Local Authority has been obtained, the Plaintiffs also argue that this is an issue of fact that needs to be decided in a full trial. Findings by the Court [25] In order to complete this sale and purchase transaction, the following steps would have to be undertaken: -

Since the Developer has been dissolved, the parties would first need to apply to the SSM to execute the 1st Transfer (from the Developer to the Defendants) pursuant to Section 556 of the Companies Act 2016;

Once the 1st Transfer has been completed, the parties would then need to apply for the Consent to Transfer from the State Authority (this is in respect of the 2nd Transfer);

Once the Consent of Transfer has been obtained, the parties can then proceed to perfect and register the 2nd Transfer. [26] However, the terms of the SPA failed to consider and address all of these steps in a sequential manner or approach. The SPA also failed to address the issue of the Developer being dissolved and there would be a need to apply to the SSM for the execution of the 1st Transfer. [27] Perhaps the parties were not aware that the Developer has already been dissolved prior to the execution of the SPA. In any event, once the parties have been made aware of this fact, the Solicitor should have obtained instructions of the parties and immediately draw up a supplementary agreement to address this issue and draw up a timeline for the application under Section 556 of the Companies Act 2016. This obviously was not done. [28] As the terms of the SPA has materially failed to address most of the issues relating to the sale and purchase transaction, I would be left with not much choice but to interpret the SPA based on its existing and available terms and conditions. [29] The SPA provides for the parties to obtain the Consent to Transfer within 180 days from the date of the SPA. Section 2.1 of the SPA states that the Consent to Transfer would have to be obtained by the Approval Period: - “SECTION 2.1 CONDITIONS PRECEDENT The Vendor hereby covenant and agree with the Purchaser that the Vendor shall apply and procure the consent to transfer in favour of the Purchaser from the Appropriate Authorities (hereinafter referred to as “the Consent to Transfer”) within the Approval Period and at the Vendor’s sole cost and expense. The Purchaser shall do all such things, take all necessary steps and execute all such documents as, shall be necessary to facilitate and assist the Vendor’s application for the Consent to Transfer. In the event that the Vendor fails to procure the Consent to Transfer within the Approval Period, the Purchaser may grant the Vendor the Extended Approval Period to enable the Vendor to procure the same.” [30] Section 12.1 of the SPA defines “Approval Period” and “Extended Approval Period” as follows: - “SECTION 12.1 DEFINITIONS / INTERPRETATIONS “Approval Period” means the period for the application for the said consent which is set out in Section 4 of the Second Schedule. “Extended Approval Period” means the Extended Approval Period as set out in Section 5 of the Second Schedule hereto.” [31] Section 4 and Section 5 of the Second Schedule of the SPA provides that: - “Section 4 Approval Period Within One Hundred Eighty (180) working days from the date of this Agreement. Section 5 Extended Approval Period Within Thirty (30) working days from the expiry of the Approval Period or such other longer period as may be agreed to by the Purchaser.” [32] The Balance Purchase Price has to be paid within 180 days from the completion of the 1st Transfer. Section 3.2(a) of the SPA states that the Balance Purchase Price shall be paid within the Completion Date: - “SECTION 3.2 PAYMENT OF BALANCE PURCHASE PRICE

The Purchaser hereby undertakes and warrants that the Balance Purchase Price shall be paid to the Vendor’s Solicitors as stakeholders within the Completion Date. [33] Section 12.1 of the SPA defines “Completion Date” and “Extended Completion Date” as follows: - “SECTION 12.1 DEFINITIONS / INTERPRETATIONS “Completion Date” means the period for the payment of the Balance Purchase Price by the Purchaser to the Purchaser’s Solicitors as stakeholders for the Vendor, which is stipulated in Section 6 of the Second Schedule hereto. “Extended Completion Date” means the Extended Completion Date for the Purchaser to pay the Balance Purchase Price to the Purchaser’s Solicitors as stakeholders for the Vendor as stipulated in Section 7 of the Second Schedule hereto.” [34] Section 6 of the Second Schedule states that the Completion Date is 6 months from the 1st Transfer being completed. Section 7 of the Second Schedule states that the Extended Completion Date is within 30 working days from the expiry of the Completion Date: - “Section 6 Completion Date * Within One Hundred Eighty (180) working days from the Unconditional Date; or * Within One Hundred Eighty (180) working days from the date of the Purchaser and/or the Purchaser’s Solicitor informed that the Perfection of Transfer in favour of the Vendor has been completed and that the Individual Title has been registered in favour of the Vendor as the Registered Owner. This is due to the fact that if the Developer, IRDK Developments (M) Sdn Bhd did not agree for a direct transfer to the Purchaser as per their confirmation Letter dated ________. Section 7 Extended Completion Date Within Thirty (30) working days from the expiry of the Completion Date or such other longer period as may be agreed to by the Vendor.” [35] It has been more than 2 years since the SPA has been executed (back in 2023). The 1st Transfer has yet to be completed. Going strictly by the terms of the SPA, Clause 2.1 would apply, in that the Consent to Transfer has not been obtained within the Approval Period or the Extended Approval Period. [36] The Solicitor ought to have obtained an extension of time from the parties in respect of the completion of the 1st Transfer. However, no such extension was sought. As such, there is no evidence to show or suggest that the parties had agreed to an extension of time to complete the 1st Transfer or to obtain the Consent to Transfer (for the 2nd Transfer). I have not much of a choice but to make a finding that the SPA is deemed to have lapsed. [37] However, apart from making a finding that the SPA has lapsed, I would also have to consider the effect and consequence of the Undertaking Letter. Section 11.11 of the SPA clearly allows the SPA to be varied: - “SECTION 11.11 VARIATION OF TERMS It is hereby agreed and declared by the parties hereto that notwithstanding any of the provisions of this Agreement to the contrary, the provisions and terms of this Agreement may at any time and from time to time be a varied or amended by mutual consent of the parties hereto by means of a mutual exchange of letter as the parties hereto may agree upon from time to time and thereupon such amendments and variations shall be deemed to become effective to the relevant provisions of this Agreement and the relevant provisions of this Agreement shall be deemed to have been amended or varied accordingly and shall be read and construed as if such amendments and variations have been incorporated in and had formed part of this agreement at the time of execution thereof.” [38] Therefore, the Undertaking Letter would be deemed to have been an effective variation and addition of the SPA in accordance with Section 11.11. [39] It is not disputed that the Defendants gave early vacant possession of the Property to the Plaintiffs on 1.11.2023, on the condition that the Plaintiffs pay the Monthly Rental. Clause (1),

and (5) of the Undertaking Letter states that: - “(1) The Vendors shall deliver vacant possession of the Property in the same of substantially the same state and condition (fair wear and tear excepted) as inspected by the Purchasers prior to the execution of the Sale and Agreement to the Purchasers on 1st November 2023. ……

The Vendors agree that the rental of RINGGIT MALAYSIA TWO THOUSAND AND FIVE HUNDRED (RM 2,500.00) only (hereinafter referred to as “the said Rental”)) to be paid by the Purchasers on or before the 7th day of each month the amount of which shall be credited into office account of Messrs. Syazwan Hasim & Azeel Eskandar as stakeholder, Account No. 5622-0964-6508 (Maybank Islamic Berhad).

The said rental shall commence on January 2024 and shall end once the Purchasers’ End Financier, Public Islamic Berhad settled the redemption sum to the Existing Charges namely CIMB Bank Berhad.” [40] There is no real denial by the Plaintiffs that they have failed to pay the Monthly Rental from the date of vacant possession. [41] As regards to the Renovation, Clauses (6), (7) and (8) of the Undertaking Letter states: - “(6) The Vendors hereby permit the Purchasers to make any renovation and/or alterations in or additions to the said property therein SUBJECT ALWAYS THAT the said renovation and/or alteration having first obtained the written license and consent of the local authority.

The Purchasers shall indemnify and keep indemnified the Vendors against summons, actions, proceedings, claims and demands, cost, damages and expenses which may be levied, brought or made against the Vendors or which the Vendors may pay, sustain or incur by reason of any act or omission on the part of the Purchasers or any act or omission on the part of any person authorized by or representing the Purchasers to the Property.

In the event that the Sale and Purchase transaction is aborted and/or terminated for whatsoever reasons, the Vendors shall refund all the cost and expenses for the renovation made by the Purchasers to the Property.” [42] In this respect, there is also no real denial by the Plaintiffs that there was no approval obtained by the Local Authority for the Renovations. In the Plaintiffs’ affidavit (Enclosure 14), the Plaintiffs merely brushed aside the issue and state: - “Walaupun terdapat notis dari MPAJ berkenaan kerja-kerja pengubahsuaian seperti yang didakwa dalam Ekshibit “ABA-9 (a) dan (b)” dan “ABA-10”, ini adalah isu penguatkuasaan perundangan kecil yang berasingan.” [43] It’s quite clear that the Plaintiffs had breached the terms of the Early VP and Tenancy Arrangement by failing to pay the Monthly Rental and by failing to obtain the Local Authority’s approval in respect of the Renovation. This would clearly amount to a default on the part of the Plaintiffs. Therefore, I would also make a finding that the Plaintiffs had also breached the terms of the SPA and the Undertaking Letter. [44] As such, I find that the Termination Letter issued by the Defendants to be correct and in order. Conclusion [45] Accordingly, for the reasons above, Enclosure 10 is allowed with costs fixed at RM 2,000.00. Dated the 12th day of February 2026. (SEOW HOCK PENG) JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM, SELANGOR Counsel: For the Plaintiffs : Abdul Qadir Sirry-Yus-Saqti Aros (Messrs Jaya Sathi & Co.) For the Defendants : Shahabudin Shaik Alaudin Rosnida Che Ibrahim Rozima Mohd Fajar Ali (Messrs Shahabudin & Rozima)