Catajaya Sdn Bhd v Shoppoint Sdn Bhd (B-02(NCVC)(W)-6-01/2018)

1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO.: B-02(NCVC)(W)-6-01/2018 BETWEEN CATAJAYA SDN BHD ... APPELLANT (COMPANY NO.: 555443-U) AND

1. SHOPPOINT SDN BHD (COMPANY NO.: 629690-D)

2. TEE HUAT (NRIC NO.: 500221-10-5035)

3. TEE CHEE CHONG (NRIC NO.: 770928-10-5637) ... RESPONDENTS [In The Matter of Civil Suit No. 22NCVC-32-01/2015 In the High Court Of Malaya At Shah Alam Between

1. Shoppoint Sdn Bhd (Company No.: 629690-D)

2. Tee Huat (NRIC No.: 500221-10-5035)

3. Tee Chee Chong (NRIC No.: 770928-10-5637) ... Plaintiffs And Catajaya Sdn Bhd (Cmpany No.: 555443-U) ... Defendant] 2 Coram: Abdul Rahman Bin Sebli, JCA Rhodzariah Bt. Bujang, JCA Stephen Chung Hian Guan, JCA JUDGMENT

1. The appellant who was the defendant in the High Court was sued by the 3 respondents in respect of the termination of a Share Sale Agreement dated 29/8/2008 and a Power of Attorney cum Agreement (“Power of Attorney Agreement”) dated 29/8/2008 entered into by 2nd and 3rd respondents with the appellant for the sale of their respective shares in the 1st respondent to the appellant. The 2nd and 3rd respondents were the only shareholders of the 1st respondent. The appellant also counter-claimed against the respondents for reliefs under the said agreement. The learned High Court Judge after a full trial allowed the claim and dismissed the counterclaim with cost of RM70,000.00 to the respondents. We heard the appeal on 12/12/2018 and dismissed the same. The appellant has since been granted leave by the Federal Court to appeal against our decision in respect of these two questions of law: 3 “1.1 (i) Whether the law in Malaysia should be that termination clauses ought to be construed strictly;

1.4

(ii) Whether headings in a contract can be used to assist in the interpretation of contract. If so, when?” In our reasons below for dismissing the appeal, the parties would be referred to by their names, though not all in full. The Background Facts 2. The events which led to the legal proceedings started with the purchase by Shoppoint of a 1,189 acres of land situated at Tempat 3¼ Petaling Road, Kuala Lumpur described as Lot 1423 which was held under Grant Number GM817 from its owner Mampu Jaya Sdn. Bhd. (“Mampu Jaya”). The registration of the land in Shoppoint’s name was effected on 9/1/2008. That land was the sole asset of Shoppoint at that material time.

3. On 5/8/2008, just 7 months after the said registration, Catajaya entered into the Share Sale Agreement with Tee Huat and Tee Chee Chong to purchase all of Shoppoint’s issued and paid-up capital of RM2 which were held by Tee Huat and Tee Chee 4 Chong in equal proportion for a consideration of RM9,936,660.00. Simultaneous with the Share Sale Agreement, Tee Huat and Tee Chee Chong also executed the Power of Attorney Agreement to surrender vacant possession of the land in favour of Catajaya authorising it, for a consideration of RM2.1 million, immediate access to the said land and to appoint it as Shoppoint’s lawful attorney to make all necessary applications to the relevant authorities for the development of the said land. All the aforesaid agreements contained specific timelines to effect the payments as follows:

(1) In the Share Sale Agreement:

(2) In the Power of Attorney Agreement:

(1)(c) above.

4. It is not disputed that Catajaya paid both the deposits stated, that is, RM1,496,366.00 and RM210,000.00 respectively and did not pay the balance of the purchase price by the completion date of 31/12/2008 although it did apply for extension of time to Shoppoint but this was rejected vide Shoppoint’s letter dated 12/1/2009. On that very same day Catajaya lodged a caveat on the land. Shoppoint thus filed an action to remove the said caveat and for the following reliefs pertaining to the above-mentioned agreement: “22.1 a declaration that the Share Sale Agreement dated 29.8.2008 between Tee Huat and Tee Chee Chong and Catajaya has been lawfully terminated;

22.2 a declaration that Tee Huat and Tee Chee Chong are discharged from performing all obligations under the Share Sale Agreement; 6

22.3 a declaration that the Power of Attorney Agreement dated 29.8.2008 entered into by Tee Huat and Catajaya has been lawfully terminated;

22.4 a declaration that Tee Huat is discharged from performing all obligations under the Power of Attorney Agreement dated 29.8.2009;

22.5 an order that that the Private Caveat vide Presentation No. 13/2009 which was lodged by Catajaya on 5.1.2009 over the land is wrongful and/or unlawful and be hereby struck-off and/or removed;

22.6 that the Registrar of the Land Office is instructed to remove the said Caveat from the Register and/or Title upon it being adjudicated by this Court to have been wrongfully and/or unlawfully entered;

22.7 that Catajaya do pay the respondents (and or any one or more of them) damages which has been incurred by the respondents (and or any one or more 7 of them) which is to be assessed by the Deputy Registrar and/or the Senior Assistant Registrar as a result of the wrongful lodgment of the said Caveat;

22.8 that Catajaya and/or their agents and/or their employees be prevented from lodging any further caveats over the Land from the date of the order to be made without securing leave from this Court;”

5. In brief, Catajaya denied breaching the Share Sale Agreement and alleged that the breach was actually committed by Shoppoint when it failed to provide due diligence documents under Schedule 1 of the said agreement and their obligation to pay the balance of the purchase price only arises after the same has been supplied to them, including compliance with the other matters provided in the Schedules specified under section 4.1 of the Share Sale Agreement, to wit, Schedule II, IV and V (“Shoppoint Schedules”). In its counter-claim, Catajaya alleged that following Shoppoint’s failure to furnish it with the due diligence documents, the Shoppoint Schedules and breaches of the warranties made in the Share Sale Agreement, such as: 8

(ii) upon completion of the said agreement there would be no encumbrance affecting the land and there would be no claim made by any person entitled to the land (paragraph 5.1.18 of the same Schedule 1 to the agreement) they were unable to complete the sale and have suffered losses. Therefore they prayed for a declaration, inter alia, that the agreement was still binding on the parties and for specific performance of the same. There was also an alternative prayer to rescind the agreement, for damages to be assessed and monies paid under the agreement to be refunded. Catajaya also prayed for an injunction to restrain Shoppoint from dealing with the land or to transfer the very same shares to a third party. Agreed Facts 6. At the trial all the above-mentioned agreements were part of the agreed facts. Likewise the purchase price, the timelines to pay 9 it and the actual payments that has been made by Catajaya, all of which had been mentioned above. Judgment Of The Learned High Court Judge 7. The learned High Court Judge first dealt with the issue of whether the notice of termination was valid and examined the crucial clauses in the Share Sale Agreement, that is, sections 11 and 12 thereof against the backdrop of case authorities on the interpretation of contract such as SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464. His Lordship found that section 11 was an independent provision to effect a proper and valid termination of the Share Sale Agreement for a fundamental breach of the agreement which was the failure of Catajaya to settle the full purchase price by the completion date. Thus, he found the termination valid.

8. The said two provisions read as follows: "Section 11 – Purchaser’s Breach

11.1 In the event that the Purchaser shall breach any of its obligations herein, the Vendors may by notice in 10 writing terminate this Agreement and forfeit as agreed liquidated damages an amount equivalent to ten per cent (10%) of the payments for Purchase Price, shareholders advances and payment made under the Power of Attorney and to forthwith refund any other monies to the Vendors or the Vendor’s Solicitors to the Purchasers provided always that Completion has not taken place whereupon this Agreement shall forthwith ceased to have any further effect or force and neither party shall have any further claim against the other save for antecedent breach. Section 12 – Termination

12.1 This agreement shall continue to be valid and binding until completion via receipt of the full Purchase Price, shareholders advances and payment made under the Power of Attorney, by the Vendors and via the transfer of the Sale Shares to the Purchaser and the full and effective control of the 11 Company by the Purchaser unless terminated earlier pursuant to Section 12.2 hereunder.

12.2 This Agreement may be terminated by either party by notice in writing to the other and wherein the consequences under Section 10 and Section 11 shall be applicable to the Purchaser and the Vendor respectively: i) If either of the parties hereto shall commit any material breach of its obligations under this Agreement and shall fail to make good such breach within thirty (30) days from the date of receipt of notice from the other party requiring it to do so, or”

9. His Lordship was of the further view that recourse to the 2 tier process under section 12, in his words, “... would lead to ludicrous consequences as it would in effect allow time to the purchaser to complete the purchase beyond the completion date under the contract binding on both parties.”. 12

10. The next issue which the learned High Court Judge had to consider was the contention of Catajaya that non-compliance by Shoppoint on the due diligence clause in Schedule 1 of the Share Sale Agreement under the heading Representation and Warranties which renders time to be no longer an essence of the agreement. In other words, until and unless that clause was complied with, the completion date remained at large.

11. The relevant provision on this condition starting with Schedule 1 followed by the relevant clauses in the said Schedule, that is, clause 5.1.20 and 5.2 reads as follows: “Subject to receipt of the full Purchase Price, shareholders advances and the all payment under the Power of Attorney, the Vendors hereby represent and warrant to the Purchaser that save as otherwise specifically disclosed in writing by the Vendors to the Purchaser: ........................

5.1.20 the Vendors shall provide or cause to be provided to the Purchaser, its advisers, servants or agents all necessary information and assistance required 13 to conduct a due diligence on the Company and/or any matter or action necessary to complete the sale of the Sale Shares.

5.2. The Vendor shall:

(ii) prior to completion it shall sign all documents and do all acts incumbent on it to do as beneficial owners of the Sale Shares and shall render its co-operation to ensure full access by the Purchaser, its agents and representatives to conduct a due diligence exercise on the Company and that the Purchaser and/or its agents, accountants and solicitors are given promptly on request all such facilities and information in that regard and as may be reasonably required.”

12. The learned High Court Judge held that Shoppoint’s obligation under the aforesaid clauses was only to provide “... all necessary information and assistance required by Catajaya to conduct a due diligence on the Company. For Catajaya to invoke the 14 above as a ground to preclude the completion date from being enforced against it, it is thus, incumbent for Catajaya to show affirmatively that Catajaya or their solicitors had requested the Plaintiffs for the necessary documents, information and/or assistance for the stated purpose.” However, said the learned High Court Judge further, the evidence of Catajaya’s material witnesses themselves pointed otherwise.

13. His Lordship then proceeded to refer and evaluate the said evidence and submissions of counsel on the evidence from paragraph 29 – 37 of his judgment and then concluded as follows in paragraph 38 of his judgment: “[38] Apart from there being no evidence of a formal request for the impugned documents, from a plain reading of the provisions of the SSA, with special reference to its material terms and conditions, particularly the Schedule relating to the issue of Due Diligence, and giving the words of the said provisions their natural and ordinary meaning, there was no doubt at all that the due Diligence exercise was not intended by the parties to the SSA to assume the status of a condition precedent to the parties’ due 15 performance of their contractual obligations therein, including Catajaya’s explicit responsibility to make full payments of the purchase price within the completion date. Neither could it be used as a ground to depart from the strict timelines prescribed clearly in the SSA that is binding on both parties. There is no merit in the proposition that in substance Clause 5.20.1 of the Schedule indicates otherwise.”

14. The learned High Court Judge also considered the issue of the original owner of the land, Mampu Jaya, being placed under receivership and that the liquidator of Mampu Jaya commenced an action against Shoppoint only in 2012. The learned High Court Judge also considered the fact that Catajaya was well aware of the said liquidation as early as 22/9/2008 when the Share Sale Agreement was still in force but chose not to communicate with Shoppoint or their solicitors to express the former’s concern, if any, respecting it. His Lordship said PW1 himself despite being the solicitor handling the original acquisition between Shoppoint and Mampu Jaya was not aware of the said receivership until January 2009 when he received Catajaya’s letter on this matter. PW1 also confirmed that at the 16 material time of the transaction between Mampu Jaya and Shoppoint for the acquisition of the subject property, he had conducted a search on Mampu Jaya which revealed that it was then still solvent and this is supported by the search report that was exhibited at the trial. That liquidation was therefore not a critical issue for the parties, said His Lordship.

15. Then in paragraph 41 of his grounds of judgment, the learned High Court Judge concluded that since there was a subsequent court order validating the sale dated 19/12/2014 which has retrospective effect, the validity of the sale of the land by Mampu Jaya to Shoppoint had been put to rest. Catajaya therefore has no right to terminate the Share Sale Agreement upon conducting a due diligence to determine whether the original sale from Mampu Jaya to Shoppoint was null and void.

16. Lastly, on Catajaya’s claim for specific performance, the learned High Court Judge examined the law on this discretionary remedy provided under section 21 (1) of the Specific Relief Act 1950 and rightly framed the question which confronted him; which is, whether at the material time of completion of the Share Sale Agreement, Catajaya was in the state of readiness and 17 willingness to perform the contract. His Lordship concluded it was not because the only proof it had to show the said state was a letter from a Singapore finance company named Kim Eng Finance but which His Lordship ruled inadmissible after objection raised by Shoppoint’s counsel because its maker was not called. At any rate His Lordship said, the letter was of not much assistance to Catajaya because it made no reference to the land and Catajaya’s witness DW2 admitted that no formal application for a loan to complete the purchase of land was made to the said finance company. Thus, Catajaya’s counter-claim was dismissed and the caveat entered by it ordered to be removed by His Lordship whilst Shoppoint’s claim was allowed with damages, which it prayed in prayer 22.7 of the statement of claim, to be assessed by the Registrar. The Appeal 17. Learned counsel for Catajaya raised five issues for our consideration and they are couched by him in the following words but with some modifications by us to suit the reference in our judgment: 18

1.1 Whether the termination of the Share Sale Agreement without giving a 30 days cure notice is a valid termination?

1.2 Whether a proper reading of the termination letter dated 12.1.2009 shows an intention to actually terminate the agreement?

1.3 Whether due diligence is a condition precedent to the completion of the Share Sale Agreement?

1.4 Whether Catajaya requested for the due diligence documents?

1.5 Whether the learned High Court Judge made proper findings based on the evidence before him?

18. Consistent with the leave questions framed earlier and the oral submissions before us, we would be focusing on the validity of the termination letter and cure notice. 19 The Relevant Provision 19. The two material provisions in the Share Sale Agreement which govern this issue are of course sections 11 and 12 which we had reproduced earlier. For the sake of completeness and a better appreciation of the intention of the parties at that material time, two other provisions, that is, section 10 and 13 would be reproduced below: “Section 10 – Vendors’ Breach

10.1 In the event that the Purchaser shall has complied with all terms and conditions herein contained but the Vendors fail to comply with any of their duties and obligations hereunder for any reason whatsoever the Purchaser shall be entitled to specific performance against the Vendors and all costs and expenses incurred in connection therewith (including solicitor’s cost on a solicitor and client basis) shall be borne by the Vendors. 20 Section 13 – Time

13.1 Time whenever mentioned shall be of the essence of this Agreement.”

20. It was the submission of learned counsel for Catajaya that section 11 must be read with section 12, in particular section 12.1 and 12.2 (1). Reading section 11 as a stand-alone provision, just like what the learned High Court Judge did, said learned counsel further would render section 12 and in particular the cure notice required by section 12.2 (i) completely redundant. He thus submitted that the reasonings of the learned High Court Judge were erroneous because he said: “(a) There is nothing wrong with parties agreeing to a cure notice period which will in effect grant the purchaser a 30 days extension time to pay without an extension of time clause. The cure notice period itself is an agreed extension of time. Parties are free to contract in that manner. 21

21. On the interpretation of contracts, counsel for both parties have referred us to our apex court’s decision on it, that is, SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 and Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597. SPM’s case (supra) was also one involving the termination of a contract on account of breaches of various terms of agreement but without the reasons being specified in the notice of termination. This inspite of clause 9 of the agreement specifically providing a 30 days notice to be issued by the respondent should it consider the appellant’s performance unsatisfactory and by the end of that period, if the same was not remedied, the respondent can terminate the agreement under clause 8. The Federal Court held as follows: “(1) The question of valid termination turns upon whether or not there was in fact a valid reason at the time of termination and not on whether or not the terminating party (subjectively) knew or believed there to be one. The appellant’s submissions offered little help in establishing, as a matter of principle that termination by notice required the communication of 23 particularised reasons from the terminating party to the non-terminating party. Accordingly, no such principle existed in the general law of contract (see paras 23-24).

(3) When one has to choose between two competing interpretations, the one which made more commercial sense should be preferred if the natural meaning of the words was unclear. Under cl 9, the review procedure gave the opportunity for the respondent to review the appellant’s performance, but this was by no means unilateral as a matter of procedure. The terms of cl 9 made this clear. Clause 9.1 for instance, obliged the parties to agree upon the terms and conditions of the review prior to any review occurring. This was clearly meant to protect the interests of both parties, in the interest of the respondent in ensuring that the unsatisfactory situation was remedied, and the interest of the appellant in avoiding breach and termination of the contract. Arguably the purpose of this clause leans in favour of protecting the position of the appellant 24 against willful termination for one, and to provide an added layer of protection in that it was given the opportunity to ‘remedy the unsatisfactory situation’ in 30 days. It could not be the case that the respondent was allowed to circumvent the purpose of cl 9 by invoking unilateral termination under cl. 8.1(b) when cl 9.3 itself refers to cl 8.1(b) as a means of protecting the respondent’s interests. Thus in stating that there was a right under cl 8.1 to be exercised independently of cl 9, the Court of Appeal failed to appreciate the niceties or nuances of the contractual terms upon proper construction. Thus, it could be concluded that upon a true construction of the contract, cl 9 should be invoked and satisfied before termination under cl 8.1(b) could be validly exercised so as to ensure that the meaning and purposes of the two clauses were not lost or rendered nugatory by operation of the other (see paras 74-78 and 94).

22. In Berjaya Times Square’s case (supra), the issue was on the late delivery of the project by the developer and the respondent as a purchaser of one of the commercial shop lots in the project 25 was affected by it. The respondent demanded for the return of all sums paid under the agreement but the appellant was willing to pay only liquidated damages according to the formula as agreed in the agreement. The respondent therefore sued for a declaration that the agreement be rescinded and for the refund of all the monies which had been paid as well as for damages. Gopal Sri Ram, FCJ defined at paragraph 42 of the judgment, the role of the court in interpreting a contract as follows: “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; Investors Compensation Scheme ltd v Hopkins & Sons (a firm) & Ors; Alford v West Bromwich Building 26 Society & Ors; Armitage v West Bromwich Building Society & Ors [1998] 1 Al ER 98. As Lord Clyde said in Bank of Credit and Commerce International SA (in liquidation) v Ali & Ors [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, 27 but one where the solution is to be found by considering the language used by the parties against the background of the surrounding circumstances.”

23. Bearing the said principles in mind, we are in total agreement with learned counsel for Shoppoint that the parties had intended from the insertion of section 11 and section 12 to cater for two different scenarios of termination. Section 11 is for a situation where the agreement has been completed as shown in the proviso incorporated in that section that is, “... provided always that completion has not taken place ...” ‘Completion’, on the other hand, is further defined under section 7 whereas ‘Completion Date’ is specifically defined in section 2.1.3. The said provisions read as follows: “Section 7 – Completion

7.1. The Completion of the Sale and Purchase hereunder of the Sale Shares shall take place... on a date agreed by the parties occurring on or before the Completion Date upon receipt by the Vendors’ Solicitors of the shareholders’ advances and the 28 Balance Purchase Price together with payment payable to the Vendors under the Power of Attorney granted by the Vendors to the Purchaser (subject to clearance of payments)...” Section 2 – Consideration .................

2.1.3 The Purchaser shall settle the balance purchase price amounting to ringgit Malaysia Eight Million four Hundred and Sixty-Seven Thousand Two Hundred and Ninety four (RM8,467,294.00) (hereinafter referred to as “the balance purchase price”)... on or before 31st December 2008 (hereinafter referred to as “the Completion Date”).”

24. As alluded to earlier Catajaya did not pay the balance of the purchase price on or before the 31/12/2008 and their application for extension of time vide letter dated 24/12/2008 had been rejected by Shoppoint in a letter of even date. Therefore, Shoppoint is entitled to utilize or invoke the said section 11 for it must be remembered and as reminded by Shoppoint’s said 29 rejection letter, time has been made an essence of the contract under Section 13.1 which provision we had reproduced earlier. Viewed in this light, the argument of Catajaya’s counsel that section 12 is redundant, even if that was how the Share Sale Agreement is to be interpreted, does not with respect, hold water for it is clear that section 12 caters for termination by either parties before the completion date i.e. an early termination of the agreement and by clause 12.2 the parties have intended that the same consequences in section 10 and 11 would apply. Given the clear and unambiguous intention of the parties as derived from and spelt out by the words in the aforesaid sections, there was no necessity to choose, in the words of Zainun, FCJ in SPM Membrane’s case (supra) “between two competing interpretation” and for the court to adopt one “which makes more commercial sense.” No such doubt arises here when we read the aforesaid sections together.

25. Catajaya’s counsel argued that the word ‘completion’ in section 11 does not refer to the ‘completion date’ but that interpretation cannot stand in view of the definition of ‘Completion’ under section 7. He also argued that there was no termination letter 30 but we accept that Shoppoint’s solicitor’s letter dated 12/1/2009 was it because that letter was couched in the following terms: “We refer to the above matter and our letter dated 22nd December 2008. We regret to note that we have yet to receive any reply from your goodselves in respect of the expiry of the Completion Date on 31st December 2008 or any payment for the settlement of the total sum of RM15,357,294.00. As time shall be of the essence and your client has failed to comply with its obligation in the Sale and Purchase Agreement dated 29th August 2008, in particular Section 2.1.3 in settling the balance purchase price, our client shall exercise its right under Section 11 of the Sale and Purchase Agreement dated 29th August 2008.” Section 11, it must be pointed out is on termination by Tee Huat and Tee Chee Chong upon Catajaya’s breach of its obligations under the Share Sale Agreement. We would assume that since leave to appeal was granted on the two questions framed by 31 Catajaya, there was also acceptance by them after the appeal that the Share Sale Agreement was indeed terminated although their obvious stand is that this was wrongfully done.

26. It is appropriate now to refer to section 56(1) of the Contract Act 1950 which provides as follows: “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.”

27. Gopal Sri Ram, FCJ in Berjaya Times Square (supra) at page 613 said this about the said section: “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 32 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.” Therefore, in other words, where time has been made the essence of the contract, non-compliance with the dateline or timeline as specified in it renders the contract voidable at the behest of the innocent party. That is, in our view, the situation here in this appeal.

28. Learned counsel for Catajaya has quoted the High Court decision in DC Contractor Sdn bhd v Universiti Pertahanan Malaysia [2014] 11 MLJ 633 which held that in interpreting and construing termination clauses, a strict approach has to be adopted because of its decisive and far reaching implications to the relationship and contractual obligations of the contracting parties. We completely agree with him that it is so but to us adopting such an approach does not mean that the general rule of interpretation of the contract as enunciated in Berjaya Times Square’s case (supra) should not be adhered too. Therefore the clear meaning and intent of section 11 read with section 13 33 must be given effect and considered against the backdrop of the parties’ intention during the negotiation leading to the agreement.

29. As for the cure notice, we are in agreement with Shoppoint’s counsel that to require a cure notice under section 12.2 as submitted by Catajaya’s counsel would have the effect of granting Catajaya an extension of time which was definitely not the intention of the parties because even at the negotiation stage between their witness, PW1 and Catajaya’s DW4, the latter’s proposal to include terms relating to the extension of time in the second draft of the Share Sale Agreement was rejected by the former (see pages 50, 54, 57 and 60-61 of the Core Bundle of Document Volume 2). As highlighted to us in the written submission of Shoppoint’s counsel, even DW4 was aware of Shoppoint’s stand on the completion date (see page 215 of the Core Bundle of Document Volume 2) and the Share Sale Agreement was in fact drafted by Catajaya’s counsel. Thus, Catajaya was fully aware, right from the start on Shoppoint’s strict insistence on compliance with the dateline for payment of the purchase price. There was no waiver on that as shown by 34 Shoppoint’s subsequent decision to reject the application for extension of time applied for as alluded to earlier.

30. Based on the aforesaid considerations and a holistic interpretation of the relevant provisions of the Share Sale Agreement and “the factual matrix surrounding it”, it is obvious to us that the learned High Court Judge did not err when His Lordship concluded that the failure to pay the balance of the purchase price on or before the dateline spelt in the agreement has occasioned a breach envisaged in section 11. Accordingly, the appeal of Catajaya was dismissed with cost. Signed. (RHODZARIAH BINTI BUJANG) Judge Court of Appeal Malaysia Putrajaya Date: 18 July 2019 Note: This copy of the Court’s Grounds of Judgment is subject to editorial revision. 35 Parties Appearing: For the Appellant: Ranjit Singh CK Yeoh Elizabeth Lau [Messrs Ranjit Singh & Yeoh] For the Respondent: Harjinder Kaur Farhan Ghani [Messrs Shahrizat Rashid & Lee] Cases Referred To:

(1) SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464;

(2) Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597;

(3) DC Contractor Sdn bhd v Universiti Pertahanan Malaysia [2014] 11 MLJ 633.