Cornerstone Development Sdn Bhd v XXXX (W-02(NCvC)(W)-2529-12/2017)

The appellant, Cornerstone Development Sdn Bhd (defendant in the court below), appealed against the decision of the High Court given on 29 November 2017 allowing the claim of the respondent, IRDK Sdn Bhd (plaintiff), against the appellant based on a sale and purchase agreement (“SPA”) and dismissing the appellant’s counterclaim.

In essence, the order of the trial court was for specific performance of the SPA and adjustment of the purchase price of the property in question based on the “useable” land area as stated in a Land Survey report (“LS Report”) carried out within the perimeter fence erected by the respondent. In addition, the trial court allowed the respondent’s claim for general and special damages to be assessed.

We heard the appeal on 14 September 2020 and allowed the appeal. The judgment of the High Court was set aside and we ordered judgment to be entered against the respondent in terms of prayers (a) (b) S/N 89dN28U7XkZuqoxr5iScg **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 High Court. We further ordered that the amount paid by the respondent in removing the caveat lodged by the Bank of Khartoum to be refunded by the appellant.

We now give the grounds for our decision.

The facts of the case set out below are derived from the Appeal Records, the grounds of judgment (“GOJ”) of the learned High Court Judge and from what may fairly be inferred from the unfolding of events not seriously disputed as learned counsels have disclosed in their respective submissions, written and oral.

On 16 June 2011, the respondent (or “IRDK”) and the appellant (or “Cornerstone”) entered into the SPA for the respondent to purchase from the appellant two properties (hereinafter, collectively referred as the “properties”) measuring approximately 9351 square metres at the price of RM18, 620,805.00. The purchase price was made subject to an adjustment provided for under clause 1.3.4. A deposit amounting to 20% of the purchase price, that is, RM3, 351,744.90 was paid by the respondent upon execution of the SPA.

Incidentally, the provisions of the SPA are described as “sections” although interchangeably referred to as “clauses” at times by the parties. S/N 89dN28U7XkZuqoxr5iScg **Note : Serial number will be used to verify the originality of this document via eFILING portal 4

Recital One of the SPA provides: “1. The Vendor is the registered proprietor and beneficial owner of all that two (2) pieces of LEASEHOLD LAND held under PN 6229 Lot 17885 Mukim Setapak, District of Kuala Lumpur and State of Wilayah Persekutuan (hereinafter referred to as “Property One”) AND FREEHOLD LAND held under Geran 30714 Lot 21352 Mukim Setapak, District of Kuala Lumpur and State of Wilayah Persekutuan (hereinafter referred to as “Property Two”) and measuring approximately 6661 square metres and 2690 square metres respectively (subject to final measurement pursuant to Section 1.3.4 herein) (which Property One and Property Two shall hereinafter be collectively referred to as ‘the said Property’). A copy each of the titles are annexed hereto as ‘Appendix A’).”

Section 1.3 provides: - “The parties hereto hereby agreed that:

1.3.1 Within … (45) days from the date of this Agreement or prior to the Purchaser’s obligation to pay the Balance Purchase Price … the Vendor shall at its own cost and expense save and except Section 1.3.1(c):

dismantle and remove all structures and installations on the said Property, including the car wash, surau, food court and futsal field;

clear the banana trees and other cultivation planted on the said Property; and

erect hoarding and fencing all along the perimeter of the said Property (hereinafter referred to the ‘Perimeter Fence’) at the Purchaser’s costs; For the purpose of this Agreement ‘Perimeter Fence’ means a continuity of fencing on both the Property One and Property Two. S/N 89dN28U7XkZuqoxr5iScg and shall thereafter ensure that no persons are allowed to enter upon the said Property until the delivery of the vacant possession of the said Property to the Purchaser in accordance with Section 10 herein PROVIDED THAT if the Vendor shall fail to comply for any reason whatsoever with all or any of its obligations specified in Section 1.3.1(a) (b) and (c) herein then the Purchaser shall comply with the Vendor’s obligation under Section 1.3.1(a) (b) and (c) herein and in such event, any costs and expenses incurred by the Purchaser for such purposes and the Vendor hereby expressly agrees that the Purchaser shall be entitled to deduct from the Balance Purchase Price prior to payment of the balance thereof under Section 2.1 herein.

1.3.2 After the erection of the Perimeter Fence and before the payment of the Balance Purchase Price, the parties hereto shall conduct a joint inspection of the said Property (hereinafter referred to the ‘Joint Inspection’).

1.3.3 Within such period from the date of this Agreement as the Purchaser shall, in its absolute discretion deem fit and proper, appoint such qualified land surveyor mutually agreed by both Vendor and Purchaser at the cost equally shared by, both the Purchaser’s and Vendor’s to conduct a land survey on the said Property to determine the actual size of the said Property to be purchased within the Perimeter Fence and forward a report thereof (hereinafter referred to as ‘the Land Survey Report’) to the Purchaser’s Solicitors hereto not later than seven (7) working days of the intended date of the Joint Inspection as stated in Section 1.3.2 herein. The Purchaser or the Purchaser’s Solicitors shall forward a copy of the Land Survey Report to the Vendor or the Vendor’s Solicitors within seven (7) working days of the Purchaser’s receipt thereof. Both Vendor and Purchaser shall absolve the cost relating to the Land Survey Report.

1.3.4 At the Joint Inspection, the parties shall mutually agree upon the actual area of that portion within the said Property marked in RED on the plan as annexed hereto S/N 89dN28U7XkZuqoxr5iScg as Appendix A. If the actual measurement of the area thereof as stated in the Land Survey Report shall differ from that as stated in Appendix A, then the parties expressly agree that the measurement thereof as stated in the Land Survey Report shall be accepted as final, conclusive and binding upon the parties hereto and the Purchase Price of the said Property shall be adjusted and calculated at the rate of Ringgit Malaysia One Hundred and Eighty Five (RM185.00) only per square foot and any sum arising therefrom shall be settled and deducted or added, as the case may be, from or to the Balance Purchase Price stated in Section 2.1 herein and thereafter, the adjusted Balance Purchase Price shall be deemed and taken as the Balance Purchase Price under this Agreement; and

1.3.5 For the avoidance of doubt, the parties hereby expressly agree that the Purchaser’s obligation to make payment of the Balance Purchase Price under Section 2.1 or 2.2 herein is SUBJECT ALWAYS to the Purchaser being satisfied with the outcome of the Joint Inspection AND the parties agreeing to the adjustment, if any, of the Balance Purchase Price under Section 1.3.4 herein finally payable by the Purchaser for the said Property under this Agreement.” (emphasis added) [10] It is the case for the respondent that pursuant to the provisions of section 1.3 above, the actual purchase price was to be determined following a mechanism which the respondent has set out in pages 5-7, para 10.2 of the Respondent’s Written Submissions (Encl. 53) and reproduced below: - “10.2. The actual purchase price was to (sic) determined using the following mechanism. a. The Appellant was to: first, dismantle and remove all structures and installations on the Properties, including the car wash, surau, S/N 89dN28U7XkZuqoxr5iScg food court and futsal field; second, clear the banana trees and other cultivation planted; and third, erect a hoarding and fencing “all along the perimeter” of the Properties (“Perimeter Fencing”) and the Appellant’s cost (Clause 1.3.1). b. Clause 1.3.1(c) expressly provides that the Perimeter Fencing “means continuity of fencing on both the Property One and Property Two”. c. It is pertinent that the SPA did not state that the Perimeter Fence would be decisive of the actual area of the Properties. d. If the Appellant failed to comply with Clause 1.3.1 within 45 days of the SPA or prior to the payment of the balance purchase price by the Respondent, the Respondent was to carry out the said obligations (including the building of the Perimeter Fencing) and would then be entitled to deduct the cost of the same from the balance purchase price (Clause 1.3.1). e. One (sic) the Perimeter Fence is built, a joint inspection was to be held between the parties (Clause 1.3.2). This was to allow the Appellant to view the land which was hoarded up and would represent the actual area to be sold. This is made clear in Clause 1.3.4. The joint inspection was to allow the parties to mutually agree upon the actual area of that portion within the Properties and mark the said area in red on the plan as annexed to the SPA. f. Once the actual area was identified, the Respondent was to, “in its absolute discretion”, appoint a mutually agreeable qualified land surveyor to “conduct a land survey on the said Property to determine the actual size of the said Property to be purchased within the Perimeter Fence”. The report of the land surveyor was to be forwarded to the Appellant (Clause 1.3.3). i. The appointment of the land surveyor was to be agreed to by both parties. ii. It was left to the land surveyor to determine how to approach the survey. The SPA only provided that he was to determine the actual size. g. In the event the actual area marked in the land surveyor report differs from the plan annexed to the SPA, “then the parties S/N 89dN28U7XkZuqoxr5iScg expressly agree that the measurement thereof as stated in the Land Survey Report shall be accepted as final, conclusive and binding upon the parties hereto and the Purchase Price of the said Property shall be adjusted and calculated at the rate of … RM185.00 only per square foot” (Clause 1.3.4). h. The Respondent’s obligation to pay the balance purchase price was “subject always to the Purchaser being satisfied with the outcome of the Joint Inspection AND the parties agreeing to the adjustment, if any, of the Balance Purchase Price…” (Clause 1.3.5). (the “Adjustment Mechanism”)” [11] The appellant did not dispute the correctness of the adjustment mechanism set out above but disagreed with the statement in para 10.2 c above that the perimeter fence would not be decisive of the actual size of the property. [12] Apparently, Cornerstone did not carry out its obligation to erect the perimeter fence as stipulated in clause 1.3.1 of the SPA. However, by a letter of 15 August 2011 to IRDK’s solicitors, the appellant agreed for the respondent to build the perimeter fence as provided for in clause 1.3.1 (c). [13] On 5 September 2011, the respondent proposed the appointment of Mr. H’ng Kim Heng from Jurukur Resources Sdn Bhd to carry out the survey of the property pursuant to clause 1.3.3 of the SPA. The respondent had as well on 15 September 2011 proposed that a joint inspection be carried out on the property to resolve any issues. It would appear that this initial joint inspection sought by the respondent was the latter’s own proposal or initiative and not pursuant to any specific provision of the SPA. S/N 89dN28U7XkZuqoxr5iScg [14] By its letter of 19 September 2011, the appellant agreed to the appointment of the surveyor. The respondent made a point about the appellant not having reverted on the proposal to conduct an initial joint inspection. We, however, fail to see why this should be held against the appellant when clause 1.3.2 of the SPA states that the joint inspection is to be held between the parties once the perimeter fence was erected. At that point in time, the perimeter fence had yet to be built. [15] By letter of 14 November 2011, the respondent’s solicitors wrote to the appellant’s solicitors informing that the respondent would proceed to erect the perimeter fence in accordance with the terms of the SPA. Unfortunately, no one, not even the respondent, had enlightened us as to exactly when the respondent started with and completed the construction. What is certain is that, according to the respondent, due to the public utilities existing on the property, the perimeter fence could not be continuously erected along the entirety of the properties. Certain areas, learned counsel for the respondent said, had to be ‘carved out’ to take into account those public utilities. Thus, instead of building the perimeter fence along the entire perimeter of the properties, the respondent left out the areas where the public utilities were. [16] According to the solicitors for the respondent (per their letter dated 9 February 2012), the surveyor had then correctly proceeded to survey that part of the property within the erected perimeter fence. Meaning to say, the carved out areas of the public utilities were left out of the survey. What is of significance is that the Land Survey Report (“LS report”) designates that part of the property which was surveyed as the ‘total useable’ area of the property, which is 5,876.035 sq. metres. Hence, the S/N 89dN28U7XkZuqoxr5iScg LS report drew a distinction between total area of the property and total ‘useable’ area. [17] As a result of the LS report having left out from the survey the carved out areas where the public utilities were, the respondent had effectively reduced the total area of the property from 9,351 sq. metres to 5,876.035 sq. metres and correspondingly the purchase consideration by 40% from RM18, 620,805.00 to RM11, 701,085.35. [18] On 30 January 2012, the respondent’s solicitors –

(ii) informed that the respondent “has duly carried out all its obligation to erect hoarding and fencing all along the perimeter of the said Property”; and

(iii) requested for a joint inspection pursuant to section 1.3.2 and section 1.3.3 of the SPA. [19] On 3 February 2012, the appellant’s solicitors responded by stating that – of the SPA;

(ii) the report drew a distinction between total area of the properties and total “useable” area of the properties and this was not in accordance with the SPA; and S/N 89dN28U7XkZuqoxr5iScg

(iii) the respondent failed to erect the perimeter fence “all along the perimeter” of the properties in accordance with section 1.3.1(c) of the SPA. [20] The appellant gave the respondent fourteen days under section 6.1(b) of the SPA to rectify the breaches. [21] The respondent by their letter of 9 February 2012 disputed the appellant’s contentions saying that: “For the record, it was your client’s original obligation to erect the Perimeter Fence which in accordance to the SPA meant “a continuity of fencing on both the Property One and Property Two”. Since your client failed to do so, our client proceeded to erect the Perimeter Fence as envisaged in the SPA. The Perimeter Fence as erected ensures a continuity of fencing required under the SPA. It is not possible to erect hoarding and fencing along the entire perimeter of the Property as in doing so there would not be continuity (your client is fully aware of this as on the Property are access roads to neighboring apartment blocks, car parks for the neighboring apartment blocks and a Dewan). Thus the surveyor quite correctly surveyed that part of the Property within the erected Perimeter Fence as the balance of the purchase price is to be calculated accordingly.” (underline added) [22] By their letter of 20 February 2012, the appellant expressed their total disagreement with the foregoing assertions of the respondent and went on to state: “3. … As you are well aware, the purpose of the Perimeter Fencing is to address your client’s concern on whether the actual size of the S/N 89dN28U7XkZuqoxr5iScg Properties corresponds with the title. The distinction drawn in the Land Survey Report between the total areas of the Properties and ‘total useable area’ of the Properties is therefore NOT in accordance with the SPA.” (underline and emphasis added) [23] The appellant also informed the respondent that since the fourteen-day notice for breaches had expired on 17 February 2012, the SPA was thereby terminated. The High Court Proceeding [24] At the High Court, the reliefs sought by the respondent against the appellant are- [25] The appellant on the other hand, counterclaimed for, amongst others, a declaration that the termination was lawful. [26] After a full trial, the High Court found for the respondent and made the following orders against the appellant: - S/N 89dN28U7XkZuqoxr5iScg letter of the appellant’s solicitors dated 20 January 2012 and is therefore unlawful; less the sums paid to the appellant as deposit and less the redemption sum that has been released and received by Public Bank Berhad (PBB) is RM4,412,224.35; S/N 89dN28U7XkZuqoxr5iScg At the Court of Appeal [27] The appellant in its Memorandum of Appeal raised many grounds of appeal, but in arguments before us, the appellant had emphasized and focused mainly on the following alleged errors made by the High Court: - S/N 89dN28U7XkZuqoxr5iScg (“impediments”); The Issues S/N 89dN28U7XkZuqoxr5iScg [28] Learned counsel for the appellant raised the following issues in submissions before us: - Cornerstone’s Arguments (Appellant/Defendant) [29] The appellant submitted that the learned Judge, instead of addressing the real issue in dispute, i.e. whether the perimeter fence ought to be erected “all along the perimeter” of the property as provided S/N 89dN28U7XkZuqoxr5iScg for in clause 1.3.1 (c) of the SPA or whether the perimeter fence could be erected based on the site condition or “useable” area of the property as the respondent had done, had proceeded to consider the issue of completion date and found that the appellant was in breach of the SPA. The issue of completion date of the SPA was not an issue before the learned Judge. [30] The learned Judge’s failure to address the issue placed before her has led to the wrongful determination that the appellant’s termination of the SPA was wrongful. [31] As the issue before the learned Judge concerned the question of construction of contracts, the learned Judge ought to have directed herself on the principles of law relating to the construction of contracts. It is pertinent to note that nowhere in the grounds of judgment of the High Court is there reference to the applicable law relating to the construction of a contract. It is apparent on the very face of the grounds of judgment of the High Court, that the learned Judge had not directed Her Ladyship’s mind as to the applicable principles of law in construing a contract. [32] It is also submitted that on the face of the grounds of judgment of the High Court, there had been little or no judicial appreciation of the law on the express provisions of the SPA. Nowhere in the grounds of judgment of the High Court is there a reference to the arguments of the parties and hence, the trial judge had clearly adopted a plainly wrong approach. S/N 89dN28U7XkZuqoxr5iScg [33] The appellant further submitted that in so far as the SPA was concerned, the express terms of clause 1.3.1(c) of the SPA are clear and unambiguous. There was no use of any term suggesting that the perimeter fence was to be erected based on the site condition or “useable” area of the properties. [34] In addition, when recital 8, clause 1.1.1 and clause 1.3.1(c) of the SPA are taken together, it would lead to the necessary conclusion that: [35] A reasonable person having all the background knowledge, the appellant submitted, would conclude that the intention of the parties in respect of clause 1.3.1(c) of the SPA was to have the perimeter fence erected all along the perimeter of the properties, and not based on site condition or “useable” area of the properties. [36] In any event, said the appellant, the respondent was trying to imply a term by reference to the use of the word ‘useable’ into the SPA. This is not permissible in law. S/N 89dN28U7XkZuqoxr5iScg [37] The appellant submitted that the respondent had erected the perimeter fence in such a manner substantially inconsistent with clause 1.3.1(c) of the SPA. This had resulted in the ensuing survey having been conducted within a perimeter fence that was wrongly erected. Based on this survey, the respondent then claimed that the actual “usable” area of the properties was only 5,876.035 square metres and therefore, it only needed to pay a sum of RM11,701,085.35 as opposed to the agreed purchase consideration of RM18,620,805.00. [38] It is the appellant’s contention that the respondent’s failure to erect the perimeter fence in accordance with clause 1.3.1(c) of the SPA amounted to a breach that “went to the root of the contract” as it effectively reduced the purchase consideration by 40%. [39] Finally, the learned Judge also committed a material error of law when she granted an order that “general damages in lieu of or in addition to specific performance to [be] assessed”. Section 18(2) of the Specific Relief Act 1950 is clear that the Court could grant compensation in substitution of specific performance when it finds that there is a contract between the parties which has been broken, and decides that specific performance ought not to be granted. In the present case, the learned Judge, having ordered specific performance, was clearly wrong when she proceeded to order damages in substitution of specific performance. The Arguments of IRDK (Respondent/Plaintiff) S/N 89dN28U7XkZuqoxr5iScg [40] It was contended for the respondent that the purchase price of RM18,620,805 stipulated in clause 1.1.1 of the SPA is subject to the adjustment mechanism as provided for under clause 1.3. The submissions of counsel in respect of the so-called adjustment mechanism is set out above in para [10] of this judgment. [41] Counsel for the respondent argued that the reasons underlying the incorporation of the adjustment mechanism into the SPA provide the context and ‘factual matrix forming the background to the transaction’ in the sense described in Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 and SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464. [42] The relevance of this context, counsel said, was made evident by the testimony of PW1, the director of the respondent, and explained by PW2, the respondent’s solicitor who drafted the SPA with the appellant’s solicitor. Counsel did not tell us what exactly is the evidence or explanation proffered by PW1 and PW2 save to refer us to Annexure B, which is annexed to the respondent’s written submission. This is of no help at all as we are supposed to read the lengthy excerpts from the evidence-in-chief of the two witnesses and surmise for ourselves what their explanation is. [43] Counsel said that the appellant was at all material times aware of the public utilities on the properties as can be seen from: - S/N 89dN28U7XkZuqoxr5iScg [44] The respondent submitted that the appellant’s contention that the perimeter fence must be constructed along the entire property irrespective of the public utilities is misplaced. [45] According to the respondent, in construing the SPA, there are two possible interpretations of it, which are: - would be less than that in the title of the properties upon taking into consideration the public utilities; or

(ii) That because clause 1.3.1(c) requires the perimeter fence to be “all along the perimeter of the said Property”, the actual area of the properties as stated in clause 1.3.4 cannot be less than the area already identified in the titles of the property. [46] The appellant, according to counsel for the respondent, had adopted the second interpretation. But the second interpretation is flawed as it S/N 89dN28U7XkZuqoxr5iScg flows from the insistence of the appellant in construing clause 1.3.1(c) as requiring the perimeter fence to be constructed along the entire perimeter of the properties irrespective of the public utilities. It is the first interpretation that is correct. [47] First, it would accord with business common sense as such a construction is more likely to give effect to the intention of the parties (see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 771). A reasonable businessman would not contemplate significantly interfering with the public utilities. As explained by Sulaiman Bin Mohamed (PW3), the Director from DBKL’s Planning Department, although the perimeter fence can technically be erected over the public utilities, it practically could not be done. In his own words, “secara teknikal, boleh tetapi praktikalnya tak boleh”. [48] Second, adopting the second interpretation would lead to a capricious, unreasonable, inconvenient or unjust result in the sense explained in Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99) and Persimmon Homes (South Coast) Ltd v Hall Aggregate (South Coast) Ltd [2008] EWHC 2379). The respondent, counsel said, cannot be expected to build the perimeter fence over the public utilities. [49] Third, the first interpretation is consonant with the surrounding circumstances. The parties were aware of the public utilities prior to executing the SPA. Although Recital 8 states that the property shall be free from encumbrances, it also refers to “illegal infrastructure”. Moreover, upon the respondent making inquiry, DBKL made it clear that the public S/N 89dN28U7XkZuqoxr5iScg utilities, though temporary in nature, were properly built with the permission of the landowner. [50] Fourth, the respondent’s interpretation is in line with a holistic reading of the SPA. If parties had intended that the perimeter fence be erected along the properties by reference to the document of title and the plan annexed in Appendix A of the SPA, regardless of the public utilities or any other structures, there is no need for the mechanism in Clauses 1.3.2,

1.3.3, 1.3.4 and 1.3.5 of the SPA. In other words, these clauses would be superfluous. Parties could have agreed to the ‘actual area’ of the properties prior to executing the SPA based on the land area in the titles of the properties. [51] Instead, the parties had expressly agreed to the adjustment mechanism because they contemplated that the ‘actual area’ of the properties could differ from the land area in the titles of the properties. It is for this reason that clause 1.3.4 provides that the “parties shall mutually agree upon the actual area of that portion within the Property”. [52] Fifth, the SPA does not state that the perimeter fence is conclusive on the “actual area” of the properties. Under Clause 1.3.4, it is the LS Report that is “final, conclusive and binding”. However, the appellant had by its conduct waived its rights under clause 1.3.4 and such conduct is as follows:

Firstly, the appellant had failed in its obligation to construct the perimeter fence; S/N 89dN28U7XkZuqoxr5iScg

Secondly, having failed to do so, the appellant agreed to allow the respondent to erect the perimeter fence;

Thirdly, the respondent had invited the appellant for a joint inspection even before the land surveyor was appointed. The appellant ignored the invitation. Having elected to not exercise its rights under clause 1.3.4, the respondent had acquiesced to the appellant having to determine the “actual area”; and

The appellant is therefore estopped from taking issue with the LS Report as it had waived its right to object to the same. [53] Further, as the Land Surveyor was a jointly appointed expert, the appellant is bound by the LS Report. Such a report can only be challenged on the grounds of fraud, collusion or bad faith. [54] Ultimately, the respondent argued, it was the appellant’s initial failure to comply with its obligations under clause 1.3.1 that made it necessary for the respondent to fulfil the same. The appellant cannot be allowed to take advantage of its own wrong to now extricate itself from its contractual obligations under the SPA. [55] With regard the appellant’s contention that section 18(2) of the Specific Relief Act 1950 bars the court from awarding damages where it allows a claim for specific performance of a contract, the respondent submitted that the appellant had chosen to ignore sections 18(1) and (3) of the Specific Relief Act 1950. Section 18(1) allows the respondent to ask for compensation for breach in addition to specific performance S/N 89dN28U7XkZuqoxr5iScg

whether, upon a true construction of Clause 1.3.1(c) of the SPA, the perimeter fence ought to be erected “all along the perimeter” of the property or whether the perimeter fence could be erected based on the site condition or usable area of the property as the respondent had done;

whether the appellant’s termination of the SPA was lawful;

whether the learned Judge had erred in dismissing the appellant’s Counterclaim for a declaration that the termination was lawful; and

whether the learned Judge had committed a material error of law in granting general damages in lieu of or in addition to specific performance to be assessed. S/N 89dN28U7XkZuqoxr5iScg First Issue Whether upon a true construction of Clause 1.3.1(c) of the SPA, the perimeter fence ought to be erected “all along the perimeter” of the properties or whether the perimeter fence could be erected based on the site condition or useable area of the properties as the Respondent had asserted and done [59] This is the crux of the issue before the trial court, but it was contended by the appellant that the learned trial Judge had completely failed to appreciate sufficiently or at all the issue before her. Instead of addressing the real issue in dispute, the learned Judge proceeded to consider the issue of completion date and found that the appellant was in breach of the SPA. The issue of completion date of the SPA was not an issue before the learned Judge. [60] The learned Judge’s failure to address the issue placed before her, the appellant said, has led to the erroneous determination that the appellant’s termination of the SPA was wrongful. [61] We consider it well-settled that the issues for determination at a trial of first instance are dictated and circumscribed by the pleaded case of the parties. In this respect, counsel for the appellant drew our attention to the respondent’s pleaded case – S/N 89dN28U7XkZuqoxr5iScg “32. On 20.2.2012 the 1st Defendant unlawfully terminated the SPA on the ground that the Plaintiff did not erect the perimeter fence according to the SPA. The Plaintiff contends that the purported termination by the 1st Defendant herein was unlawful in that this was not a breach that warranted and/or could justify the termination of the SPA by the 1st Defendant. In this respect the Plaintiff pleads:

32.1 that although the 1st Defendant had collected deposits amount to 20% of the Original Purchase Price from the Plaintiff on the basis that he was to fulfil his obligation in Section 1.3.1(a) and (b) they had totally failed to do so and the Plaintiff had to undertake the same;

32.2 that the obligation to erect the hoarding and fencing on the said property was the obligation of the 1st Defendant as provided in Clause 1.3.1(c) of the SPA;

32.3 due to the 1st Appellant’s failure to perform any of its obligations under 1.3.1(a) to (c), the Plaintiff had undertaken the task of erecting the perimeter fence as provided under the SPA;

32.4 the Plaintiff states that the perimeter fence was erected by the Plaintiff employing the best methods possible and to the extent that it was physically possible so as not to disrupt the lives of the inhabitants and/or occupants around the subject property;

32.5 The Plaintiff as an experience developer having expertise in its field knew that if the perimeter fence was erected continuously it would cause disruption to the lives of the inhabitants and/or occupants surrounding the subject property as:

doing so would mean drainage linked to the low costs dwellings that surrounded the subject property to be sealed off;

if the Plaintiff had erected the perimeter fence by virtue of a continuous chain fence, it would mean that public facilities such as access roads, S/N 89dN28U7XkZuqoxr5iScg entrances, easements to the low cost dwellings, telecom facility to the low costs dwellings, car part to the facilities surrounding the subject property linked to the low cost dwellings such as parking lots and that were surrendered to the Dewan Bandaraya Kuala Lumpur (‘DBKL’) would have been adversely interfered with and this would have caused disruption and hardship to the inhabitants of the dwellings built and occupied surrounding the vicinity of the subject property. The Plaintiff states that the 1st Defendant knew this at all material time as a condition with the land even before the execution of the SPA and this is exactly the reason that the 1st defendant and the Plaintiff wished to appoint the land surveyor;

the issues raised by the 1st Defendant with regard to the perimeter fence would not in any event warrant the unlawful termination by the 1st Defendant;

therefore the Plaintiff concludes that the purported termination by the 1st Defendant was unlawful at all material times.” (Emphasis added) [62] The appellant’s pleaded case on the other hand is that the perimeter fence ought to be erected “all along the perimeter” of the properties in accordance with section 1.3.1(c) of the SPA and the respondent had failed to do so (see para 6, 7, 8 and 9 of the Defence and Counterclaim of the 1st defendant (the appellant)). S/N 89dN28U7XkZuqoxr5iScg [63] Arising from the above pleaded case of the respondent and the appellant, one of the agreed issues to be tried before the trial Court was- “Whether the hoarding and fencing erected by the Plaintiff is in accordance to Clause 1.3.1(c) of the SPA for the 2 pieces of land held under PN 6229, Lot 17885, Mukim Setapak, Daerah Kuala Lumpur and GRN 30714, Lot 21352, Mukim Setapak, Daerah Kuala Lumpur?” [64] Thus, we agree with the appellant that the primary issue before the trial Court was whether the perimeter fence ought to be erected “all along the perimeter” of the properties as provided for in section 1.3.1(c) of the SPA or whether, as asserted by the respondent, the perimeter fence could be erected based on the site condition or useable area of the property as the respondent had done. [65] In the GOJ, the learned trial Judge held: - “The Court’s granting of Plaintiff’s claim against the 1st Defendant is premised on the following grounds –

It is clear to the Court that, the 1st Defendant’s initial repudiation and, subsequent termination of the SPA was mainly triggered by the Plaintiff’s reduction of the purchase price of the land, following the finding in the survey report which determined and, distinguished the land’s total usable area from that of its total area which following adjustment, effectively reduced the land’s sale price as stated in the SPA from RM18,620,805-00 to

Pursuant to Clause 1.3.1(c) of the SPA, the 1st Defendant as Vendor, is fundamentally obligated to erect fencing and S/N 89dN28U7XkZuqoxr5iScg hoarding along the land’s perimeter. The 1st Defendant is further obligated respectively, to dismantle, all structure and installation, clear all cultivation planted on the land and, erect hoarding and perimeter fencing all along the said land within forty five days of the SPA at the Plaintiff’s cost.

The 1st Defendant however failed to fulfill its contractual obligation and, by way of it’s solicitor’s letter dated 19 September 2011 confirmed it’s failure and, its agreement for Plaintiff’s take over of its obligation under Clause 1.3.1 of the SPA. The 1st Defendant have clearly failed to fulfill it’s obligation within the stipulated timeline of forty five days which left Plaintiff with no other option other than to exercise it’s right under the SPA to take over the 1st Defendant’s obligation under Clause 1.3.1 of the SPA. Plaintiff accordingly notified the 1st Defendant of it’s assumption of 1st Defendant’s contractual obligation.

The subsequent appointment of a licensed surveyor, Mr. H’ng Kim Heng of Juruukur Resources Sdn Bhd to conduct the survey of the said land was made pursuant to Clause 1.3.3 of the SPA and, pursuant to parties mutual agreed as supported by active exchanges of correspondences between Plaintiff and, the 1st Defendant’s solicitors. Plaintiff’s solicitor, Messrs Low Beng Choo Associates (LBCA) informed the 1st Defendant’s solicitor of the surveyor’s appointment and, it’s intended submission of the survey report to the 1st Defendant upon it’s receipt to which the 1st Defendant confirmed it’s agreement to the aforesaid appointment of the surveyor.

Plaintiff upon assumption of the 1st Defendant’s obligation and, completion of the erection of fencing under Clause 1.3.1 of the SPA, had along the said land had appointed a licensed land surveyor, of Mr. H’ng Kim in accordance with the provision of Clause 1.3.3 of the SPA and made with agreement of the 1st Defendant. There is ample oral and documentary evidence before the Court to support Plaintiff’s assertion of the validity of Plaintiff’s erection (of the fencing) and, subsequent appointment of the land surveyor to prepare the contentious ‘report’.

Other than active exchanges of letters from both the Plaintiff and the 1st Defendant’s solicitors, there exist clear and express S/N 89dN28U7XkZuqoxr5iScg provisions in parties’ SPA and, witnesses oral testimonies which supported Plaintiff’s case that, it’s erection of the perimeter fencing and the preparation of the survey report by the licensed surveyor was made in compliance with the requirement and, provisions of the SPA.

The appointment of the licensed surveyor was expressly provided in the SPA and, given the presence of installation structures, impediments and, cultivation was clearly, intended to determine the actual usable size of the land and ultimately, the actual sale price payable for the said land. Upon completion and, receipt of the survey report, Plaintiff, in accordance with the SPA had merely requested of the 1st Defendant the fixation of a joint inspection date.

The 1st Defendant’s however notwithstanding it’s agreement (to Plaintiff’s fencing erection and, surveyor’s appointment), issued a fourteen day notice for Plaintiff’s remedy of purported breaches, Plaintiff’s ‘wrongful’ erection of the fencing and land survey report that, allegedly was not made in accordance with the SPA.

It is evident to the Court, given the 1st Defendant clear agreement and knowledge of the same, the 1st Defendant was clutching at the last straw with it’s issuance of the notice. It is also evident to the Court that, prior to parties execution of the SPA, both parties have inspected the land and negotiate the salient terms of the proposed SPA. As parties sometime in May 2011 for the purpose of drafting the SPA, Plaintiff parties clearly, would have sighted the physical structures, cultivation and physical impediment on the land warranting the erection of fencing and, a land survey of the land. Thus, solicitors were appointed and salient provisions were incorporated for the appointment of land surveyor to conduct a survey of the said land.

In view of the above, parties made clear provision in the SPA to address potential issues posed by the land given the glaring presence of physical structure, including the reduced size and eventual price adjustment to the land’s sale price. Hence specific provision were drafted and, incorporated in the SPA by both solicitors which resulted in the inclusion of Clauses 1.3.1 and 1.3.4 of the SPA. S/N 89dN28U7XkZuqoxr5iScg

The SPA further provided for the situation of the 1st Defendant’s failure to perform it’s obligation be assumed by the Plaintiff following the expiration of the forty five days timeline. Clause 1.3.3 of the SPA further mandated the appointment of a qualified land surveyor to conduct the required land survey at a cost to be shared by both parties.

The 1st Defendant was clearly updated and, sufficiently informed through active exchanges of solicitors letter which left the Court with the conclusion that, Plaintiff have not breached the SPA in the erection of the fencing and, reliance on the land surveyor report to adjust downward the purchase price of the land.

The land total size and actual usable area as determined in the survey report is final, pursuant to the SPA, conclusive and, legally binding on both parties. As such, the sale price of the land of RM11,701,085.35 from RM18,620,805.00 which was adjusted according to the survey report finding of the actual usable area is valid and legally binding on both parties.

Accordingly, the 1st Defendant’s case that, Plaintiff had wrongfully and, unilaterally and, on it’s own accord, erected the perimeter fencing and, a land surveyor was appointed to conduct a preparation of land survey based on parties’ fencing and, not made in accordance with parties SPA is clearly without merit misconceive and, constitute 1st Defendant’s bare attempt to avoid it’s clear obligation to complete the SPA.

The 1st Defendant’s issuance of fourteen days notice to Plaintiff to remedy Plaintiff’s purported breach, pursuant to Clause 6.1(b) of the SPA and, the 1st Defendant further issuance of the termination of the SPA on account of Plaintiff’s purported breach is undisputedly constitute 1st Appellant’s feeble attempt to avoid it’s obligation to complete the SPA.

At this advanced material point in time, which was nearing the Completion Date of the SPA, months’ after Plaintiff’s contractual obligation have been considerably fulfilled and performed, the 1st Defendant unexpectedly and, by way of a letter dated 3 February 2012 challenged S/N 89dN28U7XkZuqoxr5iScg the fencing, the preparation of the survey report and, Plaintiff’s reliance on the survey finding. It is a fundamental contractual terms for the perimeter fencing be erected all along the land and, not otherwise and that, it’s purpose was to determine whether the actual size of the land corresponded to it’s title.

1st Defendant’s subsequent action in the issuance of a fourteen days Notice for Plaintiff to remedy it’s purported breaches, consequent termination of the SPA and, forfeiture of Plaintiff’s deposit, is without basis, and wrongful.

Upon evaluation of the evidence surrounding the SPA, it is evident to the Court that the Plaintiff was, at all material times found to be able and willing to complete the purchase transaction of the land upon the terms agreed in parties SPA. It is the 1st Defendant who for self serving reasons, reneged on its contractual obligation and, by it’s conduct, prevented the successful completion of the SPA. The 1st Defendant was Plaintiff’s on purported breaches of which the 1st Defendant had the knowledge consented to.” (Emphasis added) [66] Based on the foregoing passage from the GOJ, it is clear that the learned Judge concluded that the termination by the appellant of the SPA was wrongful because –

the respondent was entitled under clause 1.3.1 of the SPA to carry out the erection of the perimeter fence in view that the appellant had failed to do so and the latter was notified of the same; and

the respondent’s appointment of a qualified land surveyor was made pursuant to clause 1.3.3 of the SPA and agreed upon by the appellant. S/N 89dN28U7XkZuqoxr5iScg [67] We agree with the appellant that the above conclusions arrived at by the learned Judge are misdirected. This is because it never was the appellant’s pleaded case that the respondent had breached the SPA on grounds that: (a) the respondent was not entitled to erect the perimeter fence under the SPA; or (b) the respondent was not entitled to appoint a qualified land surveyor. As a matter of fact, these matters were not in dispute. [68] Respectfully, we say that the misdirection did not end there. Instead of addressing the issue in dispute (whether it is justifiable or reasonable for the respondent to erect the perimeter fence so as to avoid all the so-called impediments), the learned Judge proceeded to consider the issue of completion date and found that the appellant was in breach of the SPA. [69] In this regard, the learned Judge held: “19. Plaintiff have consistently any breach of the SPA unequivocally denied in all of it’s solicitor’s correspondences to the 1st Defendant’s allegation of Plaintiff had always intention to complete the SPA on terms that was agreed, and, it was the 1st Defendant who had unilateral and wrongful terminated parties’ SPA which is deliberate 1st Defendant’s clear and attempt to derail the successful completion of the SPA.

Prior to the termination, the 1st Defendant repudiation the SPA and offered to the Plaintiff an option to repudiate on the ground that, the 1st Defendant had become aware of the lodgement of a private caveat on the land by a third party, the Bank of Khartoum. As it was always Plaintiff’s intention to complete the SPA, Plaintiff disregarded the 1st Defendant’s stand that the caveat lodgement was the act of a third party. Instead the 1st Defendant was instructed to take necessary measures to remove the caveat on it’s land. The Plaintiff denied any breaches S/N 89dN28U7XkZuqoxr5iScg on it’s part warranting 1st Defendant’s granting of a termination option.

The caveats was eventually removed by the 1st Defendant who made the application vide Originating Summons Suit No. 24NCVC-3198-12/2011 and, Kuala Lumpur Court Order dated 19 December 2011. The caveat was subsequently set aside and cancelled by the Land Registrar on 23 December 2011. The 1st Defendant had only informed the Plaintiff of the same by way of a letter dated 30 December 2012. The Plaintiff only received confirmation of the removal of the caveat on 4 January 2012.

With the caveat’s official cancellation, the completion date of parties SPA was thus, extended to 3 April 2012 being three months from the ‘Unconditional Date’, stated in the SPA.

The 1st Defendant however disagreed with the Plaintiff’s position and insisted on the completion date to commence from the date of the removal of the caveat, 23 December 2011 and, to expire within three months of Plaintiff’s receipt of consent from the State Authority to the transfer of the land, i.e. 8 February 2012 and, extended completion date on 8 March 2012.

The 1st Defendant’s contention and, insistence on the Completion Date and, Extended Completion Date to be on 8 February and 8 March 2012 is erroneous and legally untenable and, given the supervening event of the lodgement of the private caveat by the Bank of Khartoum on the land, which clearly was a cause not hitherto disclosed to the Plaintiff, and outstanding Plaintiff’s control.

Furthermore, the 1st Defendant had, prior to the successful cancellation of the caveat, agreed for Plaintiff’s payment of the redemption sum for the land only after the successful cancellation of the caveat. 1st Defendant’s concession constitute it’s implied agreement for the Unconditional Date of Completion as defined in the SPA, to be three months to commence from the Unconditional Date which commenced from Plaintiff’s solicitor receipt of the transfer consent from the State Authority i.e.

In this respect, the entire removal of the caveat was only communicated to the Plaintiff on 4 January 2012. S/N 89dN28U7XkZuqoxr5iScg

The 1st Defendant however insisted on the completion date to remain within three months from the Unconditional Date which commenced from Plaintiff’s solicitor’s receipt of the transfer consent from the State Authority i.e. 8 February 2012 and, the Extended Completion Date as 8 March 2012.

The Court however, was in agreement with Plaintiff’s submission that for the purpose of the computation of the commencement of the completion date as provided in the SPA, the applicable date is from the successful removal of the caveat by the 1st Defendant and, communication of the same to the Plaintiff. In this respect, notwithstanding the 1st Defendant’s averment that the lodgement of the caveat was the act of a third party, the 1st Defendant was found by the Court to be in clear breach of it’s representation to the Plaintiff pursuant to Clause 9.1(i) of the SPA.

The 1st Defendant was adequately informed of Plaintiff’s intention to extend the completion date by one month, i.e. on or before 8 March 2012 and of the extended completion date to 8 April 2012 as early as 17 January 2012 vide Plaintiff’s solicitor’s letter.

Therefore, based on the foregoing grounds, the Court accordingly concluded that, the Plaintiff on evaluation of the evidence in it’s entirety was, entitled to it’s claim against the 1st Defendant.” (emphasis added) [70] We accept the submission of the appellant that the question of completion date of the SPA was not an issue before the trial court. The respondent’s own solicitor, Ms. Jessentha Siluvaimuthu (PW2), had confirmed this and testified as follows during re-examination: “SAC: So in other words, Ms Jessentha, everything was completed by the completion date? IRDK had completed S/N 89dN28U7XkZuqoxr5iScg everything by the completion date, even prior to 08.02.2012? JESS: Yes, prior to completion date. SAC: So there is no issue or dispute as to the completion date, in this case. Would I be right to say so, Ms Jessentha? JESS: Yes, you are.” (emphasis added) [71] Based on the foregoing, we are of the view that the learned High Court Judge had, with respect, completely misunderstood and failed to appreciate sufficiently the issue before her in coming to her conclusion that the appellant was in breach of the SPA and had wrongfully terminated it. [72] It has been said before that a first instance judgment is open to challenge when it fails to address issues placed before it. In Merita Merchant Bank Singapore Ltd v Dewan Bahasa dan Pustaka [2014] 9 CLJ 1064, the Federal Court stated: - “[45] It is trite law that an appellate court will not readily interfere with the findings of fact arrived at by the court of first instance to which the law entrusts the primary duty of evaluation of the evidence. However, the appellate court is under a duty to intervene in a case where the trial court has so fundamentally misdirected itself. In our judgment we find that there was insufficient judicial appreciation by the learned trial judge of the pleadings and contemporaneous evidence in the instant case when she allowed Merita’s claim. Such erroneous finding warranted appellate interference which the Court of Appeal rightfully done so, and we have no reason to disagree. We agree with the Court of Appeal in finding that the learned trial judge erred in finding …” (underline added for emphasis) S/N 89dN28U7XkZuqoxr5iScg [73] This principle is reiterated in MMC Oil & Gas Engineering Sdn Bhd v Tan Bock Kwee & Sons Sdn Bhd [2016] 2 MLJ 428 where the Court of Appeal said at 437E-G:- “[17] The obverse or counterpart to the requirement for appellate restraint in dealing with findings of fact by the trial judge is the fundamental requirement that the judgment of first instance does in fact amount to a comprehensive and cohesive determination of the material matters comprising the subject matter of dispute before the trial judge. This requires the trial judge to undertake a full evaluation of the evidence and issues placed before the court. A first instance judgment is open to challenge when it fails to address or wholly ignores material evidence or issues placed before it, or when bald findings of fact are made with no reasoning or evidence to substantiate such findings. Equally errors of law, a clear misunderstanding of relevant evidence and such clearly identifiable errors will all contribute towards a decision that would be considered to be ‘plainly wrong’.” (underline added) [74] Likewise, and with respect, such clearly identifiable error of law in our present case (the trial Judge having completely misunderstood and failed to appreciate sufficiently the issue before her) in coming to the conclusion that the appellant was in breach of the SPA and had wrongfully terminated it, would contribute towards a decision that would be considered to be plainly wrong and liable to be set aside. [75] Going back to the first issue stated above, clearly, the heart of the dispute between the parties being “whether the perimeter fence ought to be erected ‘all along the perimeter’ of the properties as provided for in S/N 89dN28U7XkZuqoxr5iScg clause 1.3.1(c) of the SPA or whether the perimeter fence could be erected based on the site condition or usable area of the properties as the respondent had done, it is fundamentally a question of construction of contracts. [76] The salient terms of Section 1.3.1(c) of the SPA are:- “erect hoarding and fencing all along the perimeter of the said Property (hereinafter referred to the ‘Perimeter Fence’) at the Purchaser’s costs; For the purpose of this Agreement ‘Perimeter Fence’ means a continuity of fencing on both the Property One and Property Two.” (emphasis added) [77] Learned counsel for the respondent, as we have seen, argued that based on the wordings of this clause, there are two possible interpretations, but the correct interpretation is that the actual area of the property as stated in Clause 1.3.4 would be less than that in the title of the property upon taking into consideration the public utilities. In other words, said the respondent, the perimeter fence need not be erected all along the perimeter, instead, it could be erected to leave out the public utilities, meaning to say, only based on the useable area of the properties. [78] Indeed, the respondent’s witness, Tan Sri Dr. Ramasamy Muthusamy (PW1), testified in examination-in-chief that he could not erect the perimeter fence continuously all along the perimeter of the properties because of the existence of a drainage system that linked to the low costs dwellings surrounding the properties and public facilities such as access S/N 89dN28U7XkZuqoxr5iScg roads, entrances, easements, telecom facilities, car parking areas, surau and refuse chambers (‘public utilities’ or ‘facilities’). [79] The appellant maintained that there is no use of any term in the SPA suggesting that the perimeter fence was to be erected based on the “useable area” of the properties. The express terms of Clause 1.3.1 (c) are clear and unambiguous, hence, the perimeter fencing must be erected all along the perimeter of the property. [80] We are inclined to agree with the appellant that Clause 1.3.1(c) of SPA is clear and unambiguous and hence disentitled the respondent to suggest another possible interpretation. The law in this regard is well settled and we need not go further than refer to the judgment of the House of Lords in Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 2 All ER 260, 267J-268A where Lord Pearson stated:- “… [T]he court does not make a contract for the parties. The court will not even improve the terms which the parties have made for themselves, however desirable the improvement might be. The court’s function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been suitable.” (emphasis added) [81] In the present case, the express terms of Clause 1.3.1(c) of the SPA are clear and unambiguous. The words used are “erect hoarding and S/N 89dN28U7XkZuqoxr5iScg fencing all along the perimeter of the said Property” and perimeter fence means “a continuity of fencing on both the Property One and Property Two.” There was no use of any term suggesting that the perimeter fence was to be erected based on the site condition or useable area of the properties. Indeed, the term “useable” or that “the perimeter fence is to determine the useable part of the property” is not even found in the agreement. [82] As the express terms are clear and unambiguous, there is no question of the language of the contract being open to two interpretations within the meaning expounded in Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99 at 109 – 110, the authority cited by the respondent. Likewise, reliance by the respondent on Persimmon Homes (South Coast) Ltd v Hall Aggregates (South Coast) Ltd [2008] EWHC 2379 is misplaced because unlike in that case where there is an absence of clear words, the words of clause 1.3.1 (c) in our present case are unambiguous. [83] In this regard, we note the submission of counsel for the appellant that at the trial, PW1, when cross-examined on this point, suddenly feigned ignorance of the SPA expressly requiring the “useable” land to be fenced and when it was suggested to him that “the agreement does not say that he has to erect hoarding and fencing on the usable parts of the property only”, he said that he could not remember. Counsel for the appellant referred to the excerpts of the cross-examination on 16 August 2016 reproduced below: - The agreement does not say you have to erect hoarding and fencing on the usable parts of the property. S/N 89dN28U7XkZuqoxr5iScg I need to check. Would you agree with me it is not there? I don’t think so Yang Arif. And would you agree with me, the word usable is not even found in the agreement. I am not sure Yang Arif. Will you take it from me as the truth that the word usable is not even found in the agreement? I am not sure Yang Arif. Yes. And would you agree with me, the agreement also does not say the perimeter fence is to determine the usable part [o]f the property? I don’t agree Yang Arif. You don’t agree. Now, but you are absolutely certain the fence is there to determine the usability, correct? Yes, Yang Arif. Now if you were so certain, so you could have instructed your solicitors to say that in the agreement, correct? I cannot remember Yang Arif. … But as far as you were concerned Tan Sri Rama, the usability is a very important part, correct? Because of the agreement was already there, the first obligation by the vendor to do all this. You cannot remember. S/N 89dN28U7XkZuqoxr5iScg Yes. Would you accept it as the truth that as a matter of fact, I think you never told your solicitor to put a term in usability in the agreement. I need to check Yang Arif.” [84] Further cross-examination of PW1 on 16 August 2016 reinforces the point: - “CCM: Tan Sri you are saying you are only buying a useable part of the land correct? Yes, Yang Arif. Can I take you to page 167 of Bundle B, please? 166, Tan Sri. 166. Do you have page 166, Tan Sri? Yes. You signed this on the 14.06.2011. Yes, Yang Arif. And this is to lodge a caveat over both piece of land. Correct? Yes, Yang Arif. If you turn to the next page 167, there is a Jadual. Correct? Yes, Yang Arif. And in this Jadual you are caveating semua bahagian. Correct? Yes. Yang Arif. Not bahagian yang boleh digunakan. Correct? S/N 89dN28U7XkZuqoxr5iScg Yes.” [85] We agree with counsel for the appellant that based on the above excerpts of the evidence of PW1, he evidently was feigning ignorance of the SPA expressly requiring the erection of hoarding and fencing on the usable parts of the property. But yet we see him admitting that when the respondent lodged the caveat over the property on 14 June 2011, it was over the whole area of the property and not over only the so-called useable part of the property. The selective nature of PW1’s evidence goes to the lack of credibility, but this is not discussed or analysed anywhere in the GOJ of the High Court. It is trite that lack or insufficient judicial appreciation of the evidence leaves the decision of the trial court susceptible to appellate intervention for being plainly wrong: see Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 at 10; Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441 at 464D-F. [86] In any event, given that the express terms of Clause 1.3.1(c) of the SPA are clear and unambiguous and the words used are “erect hoarding and fencing all along the perimeter of the said Property” and perimeter fence means “a continuity of fencing on both the Property One and Property Two”, any attempt by the respondent to imply a term by reference to the use of the word ‘useable’ into the SPA is not permissible in law. This principle is explained in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, where the English Supreme Court said at 752G-757G: S/N 89dN28U7XkZuqoxr5iScg “28 In most, possibly all, disputes about whether a term should be implied into a contract, it is only after the process of construing the express words is complete that the issue of an implied term falls to be considered. Until one has decided what the parties have expressly agreed, it is difficult to see how one can set about deciding whether a term should be implied and if so what term. This appeal is just such a case. Further, given that it is a cardinal rule that no term can be implied into a contract if it contradicts an express term, it would seem logically to follow that, until the express terms of a contract have been construed, it is, at least normally, not sensibly possible to decide whether a further term should be implied. Having said that, I accept Lord Carnwath JSC’s point in para 71 to the extent that in some cases it could conceivably be appropriate to reconsider the interpretation of the express terms of a contract once one has decided whether to imply a term, but, even if that is right, it does not alter the fact that the express terms of a contract must be interpreted before one can consider any question of implication.” [87] Another well settled canon of interpreting a contract is that no term is to be taken or interpreted in isolation. In SP Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 the Federal Court elucidated this principle of construction where Zainun Ali FCJ stated at p. 485: - “[51] …in interpreting the contract, the court must approach it holistically. No term is to be taken or interpreted in isolation. This canon of construction is so long established, it is almost banal. See for instance Chamber Colliery Co Ltd v Twyerould [1915] 1 Ch 268: … I find nothing in this case to oust the application of the well-known (sic) rule that a deed ought to be read as a whole, in order to ascertain the true meaning of its several clauses; and that the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.” “ [88] Clause 1.1.1 of the SPA provides that – S/N 89dN28U7XkZuqoxr5iScg “the Vendor hereby agrees to sell and the Purchaser hereby agrees to purchase the said Property free from all Encumbrances WITH the vacant possession but subject to all conditions of title whether expressed or implied contained in the issue document of title to the said Property at the Total Purchase Price and upon and subject to the terms and conditions hereinafter contained.” (emphasis added) [89] Recital 8 of the SPA provides – “For purpose of this Agreement ‘Encumbrances’ shall mean the said Property shall be free from assignments, charges, encumbrances, trust, restrains, pending action, acquisition orders, prohibitory orders, easement, liens, caveats, debentures, illegal structure or any occupants, car wash, futsal field, surau, banana trees, food court, tenants, squatters, lessees, encroachments and any other liability or any form of dispute capable of being attached to the said Property or any encumbrances of whatsoever nature (hereinafter collectively referred to as ‘Encumbrances’).” [90] Clause 1.3.1 (a) says: - “Within … (45) days from the date of this Agreement or prior to the Purchaser’s obligation to pay the Balance Purchase Price … the Vendor shall at its own cost and expense save and except Section 1.3.1(c):

dismantle and remove all structures and installations on the said Property, including the car wash, surau, food court and futsal field; (emphasis added) S/N 89dN28U7XkZuqoxr5iScg [91] We agree with the appellant that when recital 8, section 1.1.1, section 1.3.1 (a) and section 1.3.1 (c) are taken together, it leads to the necessary conclusion that: -

it was always the intention of the parties that the property would be free from the facilities and that they be removed; and

parties could not have intended to erect the perimeter fence without hoarding and fencing the areas where the facilities were situated. [92] With regard to the first conclusion above, it is in fact one which the respondent is in total agreement with. This follows from the submission of respondent’s counsel (reproduced at para [10] above). To recapitulate, the respondent had submitted that pursuant to section 1.3.1, the appellant was first to, dismantle and remove all structures and installations on the properties, including the car wash, surau, food court and futsal field; second, clear the banana trees and other cultivation planted; and third, erect a hoarding and fencing ‘all along the perimeter’ of the properties at the appellant’s cost. [93] As for the second conclusion above, given that it is the respondent’s stand that the structures and installations and the public utilities must first be dismantled and removed, followed by the clearing of the cultivated plants, and then followed by the erection of the hoarding and fencing all along the perimeter of the properties, it follows, in our opinion, that the respondent had implicitly accepted that the parties could not have S/N 89dN28U7XkZuqoxr5iScg intended to erect the perimeter fence without hoarding and fencing the areas where the facilities were situated. [94] The respondent, however, has gone on to argue that it does not accord with business common sense to hoard or fence the areas where the facilities were because a reasonable businessman would not contemplate significantly interfering with the public utilities. Furthermore, it would lead to a capricious and unreasonable result as the respondent could not be expected to build the perimeter fence over the public utilities. In addition, said the respondent, PW3 had stated in his evidence that although technically possible, building over the public utilities could not practically be done. [95] We are mindful of the principle that a commercial contract ought to be construed in a commercially sensible manner, that is to say, in a manner in which a reasonable commercial person would construe them (see Mannai Investment, supra, at 771). In elaborating on the commercially sensible construction approach, Zainun Ali FCJ said this in SPM Membrane, supra, at page 491: - “[78] Thus the nub of this appeal is, when one has to choose between two competing interpretations, the one which makes more commercial sense should be preferred if the natural meaning of the words is unclear. It is noteworthy that the same approach was taken by Lord Hodge (in the majority decision of Arnold v Britton), where His Lordship accepted the unitary process of construction in Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900 para 21 that: “… if there are two possible constructions, the Court is entitled to prefer the construction which is consistent with business common sense and to reject the other.”” S/N 89dN28U7XkZuqoxr5iScg [96] Hence, the commercial sense approach is to be preferred when there are two competing interpretations and the meaning of the words are unclear. In the present case, as elaborated above, there are no competing interpretations and the meaning of the words are clear. The parties had contracted for the properties to be free of the encumbrances and public utilities and that they be removed. And as pointed out earlier, the respondent themselves agreed and submitted that the SPA provides for the public utilities to be removed first before the perimeter fence was built. Thus, it is futile for the respondent to argue that, ‘it does not accord with business common sense to fence the areas where the facilities were because a reasonable businessman would not contemplate significantly interfering with the public utilities.’ The contract itself provides for significant interference with the public utilities, nay, it contemplates removing them altogether. [97] In any case, based on PW1’s evidence, the sole reason proffered for not being able to build continuously all along the perimeter of the property was because of the drainage system that linked to the low costs dwellings surrounding the property and the existence of the facilities such as the access roads, entrances, easements, telecom facilities, car parking areas, surau and refuse chambers. These facilities are referred to as impediments by the learned counsel for the respondent. [98] With regard the access road and car parks, it is evidently clear that they were illegal structures. This is a fact conceded by the respondent’s own solicitor, PW2, in her evidence: - Ok, so since the land search for both lands does not indicate any right of way, carparks, access roads or S/N 89dN28U7XkZuqoxr5iScg easements, would you agree that as a matter of fact, these so called easements and rights of way are all illegal. There are being used by people on Cornerstone’s land. JESS Yes, it’s illegal. So if it’s illegal, you would be able to put the fence and block them off or seal them off, correct? You can seal off the access road, you can seal off the carpark. Because there is no right for anyone to use Cornerstone’s lands as a carpark or as an access. Would that be correct? JESS Correct.” (emphasis added) [99] Thus, based on the evidence adduced, the respondent was in fact able to lock or seal off the access road and car parks because no one has the right to use the appellant’s lands as a carpark or as an access. [100] As regards the other facilities such as access to Dewan, refuse collection centre and drainage, PW3 himself in fact confirmed that all the facilities could be relocated after discussion and necessary notice had been given. PW3’s evidence is as follows: - Dan pemilik tanah juga boleh menyatakan ok, tempat sampah itu, satu kebuk sampah itu dialihkan. Boleh bincang untuk mengalihkan kebuk sampah itu atau kemudahan-kemudahan lain. Boleh bincang dengan DBKL juga. Betul? Boleh bincang, betul. Ya boleh bincang dan mencapai satu solution supaya segala kemudahan ini dialihkan. Betul? Betul. S/N 89dN28U7XkZuqoxr5iScg … Betul ya. Ini bermaksud tempat letak kereta boleh ditutup, bukan? Kebuk sampah boleh dialihkan. Sebagai contoh, kemudahan-kemudahan lain boleh dikeluarkan dan dialihkan ke tempat lain. Maksudnya pada masa ini? Bukan, selepas memberi notis kepada DBKL, dia kata, ‘Saya nak guna tempat ini. Ini cadangan saya untuk mengalihkan atau menyingkirkan kemudahan-kemudahan ini.’ Bukan sahaja DBKL tetapi juga stakeholder yang terlibat. So selepas semua ini dibincangkan, semua kemudahan ini boleh dialihkan kan. Dipindahkan ke tempat lain. Betul? Betul.” In view that the facilities could indeed be relocated after notice had been given, PW3’s statement referred to earlier expressing reservations on the practicality of building the perimeter fence over the public utilities, cannot stand. [101] Furthermore, the appellant’s witness, Yee Seng Seen (DW1), a director of the appellant had also given evidence as to how the issue with regard to the facilities could easily be resolved: - I think it was, I recalled that it was suggested that you know, this access would be blocked. People cannot gain entry to the Dewan. It was one of the impediments, right, to put it in En Shafee’s words. He said this was an impediment. So you said you could do it. So, can you S/N 89dN28U7XkZuqoxr5iScg just explain to the Court by reference to the photo in page 21, Bundle F? How would you have overcome this access to the Dewan on Lot 17885? I would, before I install the fence, I would, prior before this, build an alternative entry slab. And where would you build that? Just right beside this slab. Because this entry slab at the edge is at the border of my perimeter. It’s right on my perimeter. So just beside it, outside. I just build an extra entry slab. Then after that, I am able to put my fencing on the perimeter. And you can see that with that, he can get a direct entry to the Dewan. …… …… That’s where I proposed to build my alternative slab. You can see that, you know, they will have a direct entry and access to the Dewan. Actually I’ve been to that Dewan before. Inside that Dewan there is only one badminton court and two small toilets, one male, one female. And people go there to play badminton usually about maybe 4 to 6 people, doubles, right. And you know, even if they … they can get in there, even if they have got parked one car or two cars which they go in and if they walk from the slab to the Court is only like walking from the car park to the courthouse, it’s very near taking two rackets and a roll of shuttlecocks. But since now they can get direct access also by car. The other impediment I think that was brought up in the course of cross-examination is this area where the garbage is located. Can you explain to the Court how you would have dealt with this? I can’t find the photograph – The garbage bin is actually not a very big garbage bin, maybe the size of a Kanchil something like that. It’s located a few feet from my property’s boundary. I will just write with my survey drawing, communicate with either DBKL or Indah Water that their garbage bin is S/N 89dN28U7XkZuqoxr5iScg sitting in my site and they will just move the rubbish bin a little bit further away. Because I will let them know I need to seal up my area, they would move it out because they are sitting on my land. I don’t see that’s a problem. What about drainage? Actually these are surface water drains. And they are below the floor area. Of course you close it up; you can say that you have difficulty in maintenance. All I need to do is to let the authorities know that I’ve close up the fence, if they want to maintain the drain, please give this number a call, we will open up the gate for you to maintain the drain. But better still, you know what I mean, I can maintain the drain myself. The drain is about maybe 12 – 13 inches deep, right. And occasionally may be a few leaves will drop in, may be a few plastic paper might drop in. All you need to do is to send a worker once very two or three weeks, take a cangkul scoop up these little leaves and these little plastics, the drains won’t be stuck, you know. In fact it’s very cheap, the worker take maybe half an hour, one hour the easily clean this short length of drains. So – And these are drains inside your land, right? Yes, yes. Moreover I can also tell the authorities that their drain is on my land, please divert it.” [102] In the light of the clear evidence that some of the so-called impediments were illegal structures and could be sealed off, the others could be relocated after the necessary notices were given, and that in fact the issue of the extant facilities could be easily resolved as DW1 had testified, this put paid to the respondent’s argument that the business common sense approach to interpreting the SPA meant that the S/N 89dN28U7XkZuqoxr5iScg respondent could not erect the perimeter fence continuously all along the perimeter of the properties due to the purported impediments. [103] We need to make one more observation in regard to construing the contract in a commercially sensible manner. We note that the effect of the perimeter fence being erected based on site condition or useable area of the properties had resulted in the subsequent survey being conducted within the perimeter fence that excluded the areas of the public utilities. Relying on the Land Survey Report, the respondent then claimed that the actual ‘useable’ area of the properties was only 5,876.035 square metres and therefore, it only needed to pay a sum of RM11,701,085-35 as opposed to the agreed purchase price of RM18,620,805-00. This has effectively reduced the purchase consideration by 40%. [104] In our judgment, interpreting section 1.3.1 (c) resulting in a reduction of the agreed purchase price by 40% is inconsistent with and does not accord with the notion of construing the contract with business common sense. In this regard, DW1 when testifying, has well expressed his frustration at seeing the agreed purchase price being drastically reduced. He said: - Can you explain to the judge? Yang Arif, the second time I was invited for the joint inspection, the letter came together with the land survey report. The land survey report reads a total use per area 5,876 metre square. My total land is 9,351 metre square. That’s 40% off. So I knew that contractually the perimeter fence must be fixed on the perimeter and continuous. And obviously when I look at that survey drawing, it is not on the perimeter at all, it’s way inside the site, far in and many areas were not fenced up. I went back to site to take a look the next day and I found that the fence S/N 89dN28U7XkZuqoxr5iScg was not even properly installed, just frames without even zinc. With these such of breaches, how can I attend the joint inspection and 40% off? Now to rub salt into wound, they invented a term call ‘usable’. Never before anywhere was the term usable mention in all correspondence from the beginning to the end. My land is usable as I explained earlier before with regards to the plot ratio. And any part of the land can be used to sit on a building and it is shown earlier that earlier DOs have put even approved buildings on places that they have not fenced up. So how could I attend this joint inspection when the breach is so blatant? Now it is under such circumstances that I had to protect my interest. And I say I responded, I responded by writing a letter to them to say that they have not complied to the SPA by placing the perimeter on the fencing. Now RM7 million is a lot of money. As a businessman, you know, sometimes people do ask a discount of 2%, 5% right. Sometimes we might one to close the deal but in this case 5% is about RM900 over thousand nearly a million. But this is not even 5%, this is 40%, RM7,000,000. It becomes non-reconcilable, cannot be accepted. So I had to protect my interest and we say give them two weeks to rectify it. The breach is too blatant, the fence not done, the survey drawing is inventive with terms that have never been agreed before, ‘usable’. You know, and first-time heard about it and the quantum is just outrageous. This is what I want to share, you know, why I did not attend the second joint inspection, we say until you rectify this thing, then I come for the joint inspection, Mr Chew, thank you.” We are of the view that DW1’s frustration was not without justification. It simply does not make commercial sense to construe Section 1.3.1 (c) which would result in a drastic reduction of the agreed purchase price by 40%. [105] Another equally important guideline to discovering the meaning of a particular term in a contract, in this case, whether section 1.3.1 (c) provides for the perimeter fence to be erected “all along the perimeter” of S/N 89dN28U7XkZuqoxr5iScg the properties or whether the perimeter fence could be erected based on the site condition or useable area of the properties, is to look at the factual matrix forming the background to the transaction. [106] The Federal Court spoke of this principle in Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 at 620G-H: - “[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.” (emphasis added) [107] Further down at 621F-622A, the Federal Court held: “… The most recent statement of the guideline to interpretation of contracts statutes and other instruments is to be found in Attorney General of Belize & Ors v Belize Telecom Ltd [2009] UKPC 10, 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 S/N 89dN28U7XkZuqoxr5iScg person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed. … 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.” (emphasis added) See also SPM Membrane Switch, supra, at 478F-488G. [108] To be sure, both parties have drawn heavily on this canon of construction to strengthen their respective positions. Their arguments on this are set out above in paragraph [35] (appellant’s arguments) and in paragraphs [41] to [43] (respondent’s arguments). [109] Based on our perusal of the appeal records and the submissions of learned counsels from both sides, it is not in dispute that the parties had the following background knowledge in respect of the properties:-

The appellant and respondent were fully aware of the facilities before they entered into the SPA;

PW2 had conducted land searches in respect of the properties and she confirmed that there was no record of any right of way or easement created over the properties;

PW2 confirmed that it was illegal for the neighboring residents to use the properties as access roads and car parks;

Under cross-examination, PW2 confirmed that the respondent could fence up the access roads and car parks. There was no re-examination of PW2 on this; S/N 89dN28U7XkZuqoxr5iScg

The land search results in respect of the properties did not indicate any encumbrance save for the charges by Public Bank Berhad and the private caveats by the respondent;

On 19 April 2011, prior to the SPA, the appellant had applied for subdivision and amalgamation of the properties. On 18 October 2011, the application was approved with the total land use area of 2.3118 acres (9,351 square metres) or 100% of the total area of the properties. The respondent was fully aware of this as the letter from DBKL was copied to the respondent;

DBKL confirmed that the facilities “adalah dibina secara sementara”;

PW3, Encik Sulaiman bin Mohamed, from DBKL’s City Planning Department confirmed that the facilities could be relocated;

PW3 also confirmed that the entire 100% of the properties could be used for development as per DBKL’s approval for subdivision; and

PW3 informed the learned Judge that the owner of the properties need not obtain the approval of DBKL before fencing the entire properties. [110] The evidence of PW3 in respect of point (j) above is as follows: - S/N 89dN28U7XkZuqoxr5iScg “MSA DBKL, ok. Bandaraya ada atau tidak hak untuk ‘management’ ataupun memberi pandangan terhadap infrastruktur-infrastruktur yang diserahkan kepada Datuk Bandar? Sulaiman Ada untuk memberi pandangan, ada. … Sulaiman Terhadap kemudahan yang ingin ditutup atau dialihkan. … YA Itu disebutkan tadi ‘perbincangan’. Sulaiman Ya. … YA Bukan diberi kelulusan DBKL sebelum … Cuma melibatkan perbincangan sahaja. Sulaiman Perbincangan, Yang Arif.” [111] In respect of point (a) above, the respondent argued that although Recital 8 states that the properties shall be free from encumbrances, it refers to amongst others, ‘illegal infrastructure’. The respondent had inquired with DBKL on the status of the public utilities and the latter had made it clear that the public utilities, although temporary in nature, were properly built with the permission of the landowner. [112] We have dealt with the issue of the illegal infrastructure earlier. But obviously, the respondent was aware of the illegal nature of some of the infrastructure because the land searches made by PW2 revealed that there was no right of way or easement created over the properties and there was no encumbrance save for the charges by Public Bank Berhad and the respondent’s private caveats. Moreover, PW2 confirmed that it was illegal for the neighbouring residents to use the properties as access S/N 89dN28U7XkZuqoxr5iScg roads and car parks and the respondent in fact could fence them up. What is more, we have PW3 informing the learned trial judge in open court that the owner of the properties need not obtain the approval of DBKL to fence up the entire properties. Thus, going by the evidence of PW2 and PW3, the fact of the structures having been illegally erected, is no impediment to fencing up the areas where those illegal structures were located as the respondent had contended. [113] With regard the respondent’s point that although temporary in nature, the public utilities were built with the permission of the landowner, it bears repeating that PW3 had stated in his evidence that the public utilities could be relocated. Further, from our perusal of the Records of Appeal, PW3 had also agreed that because the public utilities were temporary in nature, the landowner could withdraw or cancel the permission for the public utilities to remain on the properties. The evidence of PW3 in this regard is reproduced below: - … En Sulaiman kata kemudahan awam sedia ada ini telah dibina atas persetujuan pemilik-pemilik tanah ya. Ini dinyatakan. Betul? Jikalau kita menganggap ia adalah memang ada satu persetujuan, En Sulaiman bersetuju persetujuan ini boleh ditarik balik, bukan? Persetujuan ini boleh ditarik balik atau dibatalkan. Betul? Sulaiman Betul. Dan kemudahan sedia ada ini, kemudahan awam sedia ada ini adalah dibina secara sementara sahaja ya. Sulaiman Betul. … Dan ia tidak kekal. Sulaiman Betul. … S/N 89dN28U7XkZuqoxr5iScg Oleh itu, jikalau pemilik tanah ingin menarik balik persetujuannya, pemilik tanah boleh memberitahu Dewan Bandaraya Kuala Lumpur kan? Memberi notis kata ‘Kami menarik balik persetujuan ini’. Dia boleh memberi notis kepada DBKL kan? Betul? Sulaiman Betul.” (See ACB, Vol. 3 at pp 41 -42) [114] In our opinion, the respondent having knowledge that the public utilities are temporary structures and the evidence of PW3 being that the landowner is entitled to withdraw or cancel permission for the public utilities to exist or remain on the properties, there was no justification for the respondent not to fence up the areas of the public utilities. [115] Points (f) and (i) above show that on 18 October 2011, DBKL had approved the amalgamation and subdivision of the properties with the total land use area of 2.3118 acres (9,351 square metres) or 100% of the total area of the properties. It is of significance that this was to the knowledge of the respondent. PW3 in his evidence confirmed that as per DBKL’s approval for submission, the entire 100% of the properties could be used for development. In our view, if the entire properties could be used for development, then there is no room for saying that only the useable area of the property need to be fenced up. [116] Premised on the factual matrix highlighted above, we agree with the submission of the appellant that a reasonable person having all the above background knowledge would conclude that the intention of the parties in respect of section 1.3.1 (c) of the SPA was to have the perimeter fence erected all along the perimeter of the properties, and not based on site S/N 89dN28U7XkZuqoxr5iScg condition or useable area of the properties. The respondent, to our minds, have failed to justify why they had not fenced up or hoarded the areas where the facilities were located. [117] We will move on to address the contention of the respondent that interpreting clause 1.3.1 (c) to mean that the perimeter fence must be constructed along the entire perimeter of the properties irrespective of the public utilities, would render the adjustment mechanism stipulated in clause 1.3.2, 1.3.3, 1.3.4 and 1.3.5 superfluous; there would not be a need for an adjustment mechanism; the appointment of a land surveyor and a joint inspection would not have been necessary and the parties could have agreed to the ‘actual area’ of the properties prior to executing the SPA based on the land area in the titles of the properties. [118] In this regard, the first thing to say is that the parties had expressly agreed to the adjustment mechanism because they contemplated that the ‘actual area’ of the properties could differ from the land area in the titles of the properties. The purpose of the perimeter fencing was to address the respondent’s concern on whether the actual size of the properties corresponds with the title. It is for this reason that Clause 1.3.4 provides that the “parties shall mutually agree upon the actual area of that portion within the said Property marked in RED on the plan as annexed hereto as Appendix A”. [119] It is on this basis that we find, as the respondent had understood correctly too, that the SPA does not state that the perimeter fence is conclusive on the ‘actual area’ of the properties. It is the LS Report under Clause 1.3.4 that is “final, conclusive and binding”. S/N 89dN28U7XkZuqoxr5iScg [120] Hence, the issue of constructing a perimeter fence in accordance with Clause 1.3.1 (c) is a totally different issue from the necessity to have the adjustment mechanism. We say so because based on Clause 1.3.3, the actual area of the property to be purchased is to be determined by the qualified land surveyor and the actual size must be within the perimeter fence. The parties would still need this adjustment mechanism to determine the actual area of the properties to be purchased even if the perimeter fence was constructed in continuity to include the areas where the facilities were located. [121] By virtue of Clause 1.3.3, it is the duty of the Land Surveyor to determine the actual size of the property to be purchased within the perimeter fence. This does not necessarily mean that the actual size within the perimeter fence must be equal to the land area in the titles of the properties. The term used is “within” the perimeter fence, but how far ‘within’ the perimeter is then the task of the Land Surveyor. [122] Undoubtedly, if the perimeter fence is constructed to carve out all the portions with the extant facilities, the actual size to be purchased (since it must be within the perimeter) will definitely be reduced quite substantially. This is because by carving out all the areas with the facilities, the Land Surveyor is left with no choice but to determine a size much lesser than the actual land size because he/she can only measure the portion of land within the perimeter fence. [123] For the foregoing reasons, we are of the view that the contention of the respondent that the adjustment mechanism would be superfluous and the appointment of the Land Surveyor brought to nought if Clause 1.3.1

were interpreted to mean that the perimeter fence must be constructed S/N 89dN28U7XkZuqoxr5iScg along the entire perimeter of the properties irrespective of the public utilities, is unmeritorious. [124] One final point raised by the respondent concerning this first issue is the argument that the appellant had by its conduct, waived its rights under clause 1.3.4 of the SPA and is thus estopped from taking issue with the LS Report. According to the respondent, estoppel arises in this way: - a) First, the appellant had failed to construct the perimeter fence although it was its obligation to do so. That obligation fell on the respondent due to the appellant’s failure; b) Second, having failed to do so, the appellant agreed to allow the respondent to construct the perimeter fence; c) Third, the respondent had invited the appellant for a joint inspection even before the LS was appointed. The appellant ignored the invitation. Having elected to not exercise its right under Clause 1.3.4, the appellant had acquiesced to the respondent having to determine the “actual area”; d) Thus, the appellant is estopped from taking issue with the LS Report as it had waived its right to object to the same. [125] We find the above contentions of the respondent untenable. The appellant’s failure to comply with its obligations to erect the fence, or for that matter, any of its obligations specified in section 1.3.1 (a) and (b) of the SPA has been factored into the contract whereby it is expressly provided under section 1.3.1 that the purchaser (respondent) shall comply with the vendor’s (appellant) obligation in the event of such a failure. Further, section 1.3.1 provides that in such event, the respondent’s recompense is entitlement to deducting the costs and expenses for such S/N 89dN28U7XkZuqoxr5iScg purposes from the balance of the purchase price prior to payment of the balance under section 2.1. To our minds, the appellant’s agreement to allow the respondent to erect the perimeter fence subject to recompensing the respondent for the costs and expenses, being an express term of the contract, the question of acquiescing to the respondent building the perimeter fence to exclude the areas of the existing facilities does not arise. [126] Concerning the appellant’s failure to go for the joint inspection, we have pointed out earlier in paragraphs [12] and [13] above, that the first invitation to have a joint inspection was made before the erection of the perimeter fence and as the respondent has said, even before the Land Surveyor was appointed. Pursuant to Clause 1.3.2, the joint inspection envisaged by the parties in clause 1.3.4 could only occur after the erection of the perimeter fence. If the respondent had invited the appellant for the joint inspection before the erection of the perimeter fence or appointment of the Land Surveyor, then any joint inspection pursuant thereto would not have been a joint inspection as stipulated in Clause 1.3.4. In other words, the provisions of Clause 1.3.4 pertaining to joint inspection has no application to this initial proposed joint inspection. The respondent, therefore, cannot be heard to say that in ignoring that first invitation, the appellant had waived its rights under Clause 1.3.4 and had acquiesced to the respondent having to determine the ‘actual area’. There also can be no question of the appellant being estopped from taking issue with the LS Report premised on this. [127] It is not without irony that the respondent has raised the issue of conduct of the appellant given that the conduct of the respondent was not above-board either. We say so for the following reasons. S/N 89dN28U7XkZuqoxr5iScg [128] As noted earlier in paragraph [14] above, the respondent’s solicitors by letter of 14 November 2011, had informed the appellant’s solicitors that the respondent would proceed to erect the perimeter fence in accordance with the terms of the SPA. However, after that letter, the respondent at no time had informed the appellant that the respondent could not erect the perimeter fence continuously all along the perimeter of the properties due to the purported impediments. The issue of ‘impediments’ was only raised for the first time in a letter dated 9 February 2012 from the respondent’s solicitors after the appellant complained that the perimeter fence was not built in accordance with section 1.3 of the SPA in a letter of 3 February 2012 from the appellant’s solicitors. In this February 3 letter, the appellant had as well requested the respondent to remedy the issue over the perimeter fence first before parties proceeded to conduct the joint inspection. [129] It bears repeating that by erecting the perimeter fence based on the site condition or ‘useable’ area of the properties, the respondent had effectively reduced the total area of the properties from 9,351 square metres to 5,876.035 square metres and correspondingly the purchase consideration by 40% from RM18,620,805-00 to RM11,701,085-35 in exchange for the properties. This is a massive reduction considering that PW3 had confirmed that 100% of the total area of the properties could be used for development as per DBKL’s approval for subdivision. We therefore cannot but agree with the submission of the appellant that it would appear that the respondent had intentionally carved out such portions of the properties on the pretext that the perimeter fence could not be erected over the facilities as a justification to reduce the purchase consideration. S/N 89dN28U7XkZuqoxr5iScg [130] Based on the material evidence of the witnesses, in particular, PW1, PW2, PW3 and DW1 as set out above and interpreting the contract (SPA) by giving meaning to the clear and unambiguous express terms of Clause 1.3.1 (c) (applying Trollope & Colls Ltd) as elaborated in para [76] to [85] above; reading the SPA holistically with no term to be taken or interpreted in isolation (applying Chamber Colliery; SPM Membrane) by taking Clause 1.3.1 (c) together with Recital 8, Section 1.1.1, and Section 1.3.1 (a) as elaborated in para [87] to [93] above; favouring a commercially sensible interpretation (see Mannai Investment; SPM Membrane) as elaborated in para [94] to [102] above; looking at the factual matrix forming the background to the transaction (following Berjaya Times Square) as elaborated in para [105] to [116] above and applying the cardinal rule that no term can be implied into a contract if it contradicts an express term, in our context, reading the word ‘useable’ into the contract as against the express terms of Clause 1.3.1 (c) (applying Marks and Spencer plc) as elaborated in para [86] above, we are in no doubt that the answer to the first issue is that upon a true construction of Clause 1.3.1(c) of the SPA, the perimeter fence ought to be erected “all along the perimeter” of the properties, and not based on the site condition or useable area of the properties thereby carving out the areas where the extant public utilities were located, as the respondent had done. [131] We risk being repetitive, but it needs to be said again that as the issue before the trial court concerned the question of construction of a contract, the learned trial Judge ought to have directed herself on the principles of law relating to the construction of contracts. From a reading of the GOJ, we agree with the appellant that the learned Judge did not direct her mind on the applicable principles of law and guidelines in S/N 89dN28U7XkZuqoxr5iScg construing a contract as nowhere in the GOJ is there any reference to the applicable law in this regard. [132] Further, there ought to have been a proper examination of the relevant clauses in the SPA, in particular Section 1.3 and the sub-clauses ought to have been properly analysed and construed by reference to the applicable law and case authorities in Malaysia. This was not done either. The learned trial judge’s incomplete analysis is thus apparent on the face of the grounds of judgment as there had been little or no judicial appreciation of the law as against the express provisions of the SPA. In our view, the approach adopted by the learned trial Judge is clearly plainly wrong. [133] We also find it obvious from the GOJ of the learned Judge that there was no judicial appreciation of the evidence of the witnesses who testified at the trial. The material evidence of PW1, PW2, PW3 and DW1 highlighted above and referred to by both parties either to bolster their respective position or negate their opponent’s arguments on the real issue before the trial court, appeared to have not been considered or evaluated at all by the learned trial Judge. [134] The primary reason for this, we think, stems from the fact that the learned Judge, as we have highlighted above, had failed to appreciate in part or at all the issue before her. [135] It is well settled law that an appellate court will not, generally speaking, intervene with a decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision occurs when the trial court is guilty of no or insufficient judicial S/N 89dN28U7XkZuqoxr5iScg appreciation of evidence (see Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1; [2004] 4 CLJ 309; Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441 at 464D-F; MMC Oil & Gas Engineering Sdn Bhd v Tan Bock Kwee & Sons Sdn Bhd [2016] 2 MLJ 428 at 433C – 438A). [136] We reiterate and refer again to the passage from the Federal Court decision of Merita Merchant Bank Singapore, supra, and reproduced at para [72] above and the passage from MMC Oil & Gas Engineering, supra, which we have reproduced at paragraph [73] above. The Court of Appeal in MMC Oil goes on to say at 437H-I to 438A: - “[18] Judicial decisions are required to be handed down expeditiously and with minimum delay. However this ought not to compromise the fundamental requirement that trial judges undertake a comprehensive and holistic approach to the evaluation of evidence in reaching their findings at first instance. A failure to consider the entirety of the evidence and material issues, a failure to make findings of fact or the making of bare findings of fact, all allow for appellate intervention. Apart from the real possibility of a miscarriage of justice, such omissions by a trial judge require the appellate courts to take on the role of first instance judges and review the evidence in its entirety afresh. This in turn amounts to a strain on judicial resources. The importance of a comprehensive consideration of the matter at first instance cannot be sufficiently emphasised. Equally when there has been just such a holistic approach adopted, there should be considerable appellate restraint exercised when reviewing a first instance judgment on appeal.” (underline added) [137] Respectfully, we say that the failure by the learned trial Judge in appreciating in part or at all the issue before her, having little or no judicial appreciation of the law as against the express provisions of the SPA, misdirecting herself by way of non-direction in failing to construe the S/N 89dN28U7XkZuqoxr5iScg contract in accordance with the applicable principles of law in the construction of contracts and failing to evaluate and sufficiently appreciate the evidence of the material witnesses, in particular, PW1, PW2, PW3 and DW1, had all contributed towards a decision that is considered to be ‘plainly wrong’ and allowing for appellate intervention. [138] Thus, in respect of this issue, we are of the view that the trial Judge’s decision that: -

the respondent had erected the perimeter fence in compliance with the terms of the SPA to all extent possible without causing hardship and/or disruption to the lives of the inhabitants surrounding the properties in view of the nature of the land which was known to the appellant at the material time (see para 2) of the Judgment of the

that the respondent had fulfilled all the terms and conditions of the SPA (see para 3) of the Judgement of the Court) is plainly wrong for having been arrived at without sufficient judicial appreciation of the evidence. [139] Respectfully, to our minds, had the learned Judge fully appreciated the issue, construed the contract in accordance with the applicable principles of law in the construction of contracts and sufficiently appreciated the evidence of the material witnesses before her, she would have concluded, as we do, that upon a true construction of Section 1.3.1(c) of the SPA, the perimeter fence ought to have been erected “all along the perimeter” of the properties to include the areas where the S/N 89dN28U7XkZuqoxr5iScg facilities were located and not based on the site condition or useable area of the properties. Second and Third Issues Whether the appellant’s termination of the SPA was lawful / Whether the learned Judge had erred in dismissing the appellant’s Counterclaim for a declaration that the termination was lawful [140] These are related and will be dealt with together. [141] The question is whether the appellant was entitled to terminate the SPA under the circumstances. [142] In respect of the issue of termination, the learned trial Judge held that: - “any failure on the part of the respondent to erect the perimeter fence as alleged by the appellant (which is denied) is not a material term which goes to the root of the SPA which could justify its termination by the appellant as explained in the letter of the appellant’s solicitors dated 20 January 2012 and is therefore unlawful”. (see para 1) of the Judgment of the Court) [143] We disagree with the learned Judge. As we have found earlier, the respondent had erected the perimeter fence in such a manner that is substantially inconsistent with section 1.3.1(c) of the SPA. This is because the perimeter fence, being erected based on site condition or useable S/N 89dN28U7XkZuqoxr5iScg area of the properties, had resulted in the subsequent survey being conducted within the perimeter fence that was wrongly erected. [144] Counsel for the respondent had argued that the SPA did not state that the perimeter fence would be decisive of the actual area of the properties. This argument is flawed because upon a careful reading of Clause 1.3.3 of the SPA which provides: “Within such period from the date of this Agreement as the Purchaser shall, … appoint such qualified land surveyor mutually agreed by both the Vendor and Purchaser at the cost equally shared by both the Purchaser’s and Vendor’s to conduct a land survey on the said Property to determine the actual size of the said Property to be purchased within the Perimeter Fence …” (emphasis added) it is plain that the perimeter fence would be decisive in so far as the land survey of the actual size of the properties was concerned. [145] Relying on the Land Survey Report, the respondent then claimed that the actual ‘useable’ area of the properties was only 5,876.035 square metres and therefore, it only needed to pay a sum of RM11,701,085-35 as opposed to the agreed purchase consideration of RM18,620,805-00. It bears repeating that this has reduced the purchase consideration by 40%. [146] We agree with the submission of the appellant that the respondent’s failure to erect the perimeter fence in accordance with Clause 1.3.1(c) of the SPA was a breach that “went to the root of the contract” as it effectively reduced the purchase consideration by 40%. [147] Section 6.1(b) of the SPA provides as follows: – S/N 89dN28U7XkZuqoxr5iScg “(b) if the Purchaser breaches any of the representations, warranties, covenants, terms and conditions herein and such breach, capable of remedy, is not remedied by the Purchaser within fourteen (14) days from the date the Purchaser or the Purchaser’s Solicitors receives the Vendor’s or the Vendor’s Solicitors written notice to the Purchaser to remedy such breach; PROVIDED ALWAYS the Vendor shall have duly complied with the terms and conditions of this Agreement, the Vendor shall, within fourteen (14) days following the expiry of the Extended Completion Period or of the aforesaid fourteen (14) days period (whichever is applicable), inform the Purchaser by written notice of its intention whether to: ……

(ii) in the alternative, elect to terminate the Agreement.” [148] Pursuant to Clause 6.1 (b) above, the appellant’s solicitors, on 3 February 2012, gave the respondent fourteen days to remedy the breach. The respondent however denied that it had breached the SPA. On 20 February 2012, the appellant terminated the SPA. [149] Under the circumstances, it is our view that the appellant’s termination of the contract was lawful and valid. [150] Accordingly, the learned Judge ought to have dismissed the respondent’s claim and allowed the appellant’s counterclaim. Fourth Issue S/N 89dN28U7XkZuqoxr5iScg Whether the learned Judge had committed a material error of law in granting general damages in lieu of or in addition specific performance to be assessed. [151] For completeness we will address this issue although not necessary in view of our decision above. [152] In this regard the trial court held as follows: - “9) Pelaksanaan spesifik SPA; 10) Gantirugi am sebagai ganti (in lieu of) atau tambahan kepada pelaksanaan spesifik untuk ditaksirkan;” (See Judgment of the Court, ACB (Volume 1) at pp 44 -46) [153] Section 18 of the Specific Relief Act 1950 provides – “(1) Any person suing for the specific performance of a contract may also ask for compensation for its breach, either in addition to, or in substitution for, its performance.

If in any such suit the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant and that the plaintiff is entitled to compensation for that breach, it shall award him compensation accordingly.

If in any such suit the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.

Compensation awarded under this section may be assessed in such a manner as the court may direct. S/N 89dN28U7XkZuqoxr5iScg

The circumstance that the contract has become incapable of specific performance shall not preclude the court from exercising the jurisdiction conferred by this section.” [154] It is to be noted that the respondent had placed strong reliance on the decision of the High Court in South Asia Noble Sdn Bhd v Corak Prospek Binaan Sdn Bhd [2018] MLJU 1260. We agree with the submission of counsel for the appellant that reliance on this decision is misconceived for reasons as follows. [155] In that case, the dispute involved a joint development agreement by reference to a sale and purchase agreement and a second agreement called the Joint Land Development Agreement (JLDA). The plaintiff alleged that the defendants had breached this agreement by failing to take any steps to fulfil the conditions precedent by reference to two separate Letters of Agreement extending time for the defendants to meet the conditions precedent and sought the remedies of specific performance, damages in addition or in substitution thereof and a declaration. The defendants denied the allegations claiming that the JLDA had been terminated. [156] The High Court was not persuaded that it should exercise its discretion to award specific performance in its entirety unlike in the present appeal before us. It is therefore in that context, that the High Court issued an order for specific performance of the JLDA until the time for satisfying the condition precedent of three months from the date of judgment of the High Court expires. The High Court went on further to state that the order for specific performance does not extend to performance of the JLDA should the conditions precedent be satisfied S/N 89dN28U7XkZuqoxr5iScg such that the JLDA proceeds to its next phase. The High Court then ordered damages for the defendants’ breach only prior to the filing of the action, to be assessed by the Registrar. [157] To our minds, the facts of South Asia Noble are disparate and can be easily distinguished from that in the present appeal. Clearly, the High Court in South Asia Noble handed down the order it did given the specific factual matrix of the dispute. [158] Hence, with regard the issue of the award of damages, we are of the view that the trial Judge had committed a material error of law in ordering “general damages in lieu of or in addition to specific performance to be assessed”. We agree with counsel for the appellant that based on section 18(2) of the Specific Relief Act 1950, the Court may grant compensation in substitution of specific performance when it finds that there is a contract between the parties which has been broken, and decides that specific performance ought not to be granted. Having ordered specific performance, the learned judge was clearly wrong when she proceeded to order damages ‘in lieu’ of or in addition to specific performance. Conclusion [159] For the reasons stated above, the learned Judge was plainly wrong in allowing the respondent’s claim and in dismissing the appellant’s counterclaim. There are appealable errors that warrant appellate intervention. Thus, we allowed the appeal. S/N 89dN28U7XkZuqoxr5iScg [160] Accordingly, we set aside the judgment of the High Court dated 29 November 2017 and ordered that judgment be entered against the respondent in terms of prayers A, B, C, E & F of the Counterclaim. As a consequence, we further ordered that the expenses incurred by the appellant in removing the caveat on the properties i.e. the two lands be refunded by the appellant, subject to assessment by the High Court. We also ordered the amount paid by the appellant in removing the caveat lodged by the Bank of Khartoum to be refunded by the respondent. Costs of RM 80,000 here and below to the respondent, subject to payment of allocator. sgd (SUPANG LIAN) Judge Court of Appeal Malaysia Dated: 31 May 2022 Date of Decision: 14 September 2020 Counsels: For the Appellant : Tan Sri Cecil Abraham, Alex Tan Chie Sian and Cheah Kha Mun (Tetuan Wong Kian Keong) S/N 89dN28U7XkZuqoxr5iScg For the Respondent : Datuk Malik Imtiaz Sarwar, Surendra Ananth, Tan Sri Muhammad Shafee Abdullah and Muhamad Farhan Shafee (Tetuan Shafee & Co) S/N 89dN28U7XkZuqoxr5iScg