Sabna Development Sdn Bhd v Harta Kemunchak Sdn Bhd (BA-24NCvC-2245-10/2024)

The land purchased by the Plaintiff included those with title and those without. As the land had to undergo conversion, sub-division and amalgamation as part of the development plan, details of which are not important here, all land titles were only eventually issued by the late 1990s. The SPA provided in clause 3 that the Defendant is obliged to transfer title to the land to Plaintiff, but not when that must happen.

Titles were issued and collected by the Plaintiff, but they remained on the register in the name of the Defendant and no steps were taken by the Plaintiff or the Defendant to perfect the Plaintiff’s title. Clause 6.2 of the SPA provided that the Defendant would give a Power of Attorney (“PA”) to the Plaintiff to do any act or sign any document for any purpose whatsoever in connection with the development. S/N wqrShY7SE2s2yvUsMb7iA **Note : Serial number will be used to verify the originality of this document via eFILING portal 3

The dispute in this Originating Summons arose because the PA granted by the Defendant expired on 2-3-2023 after 30 years from its grant on 2-3-1993 and the Defendant refused to renew it on its existing terms. Thus, the Plaintiff is seeking orders under section 11 of the Specific Relief Act 1950 to compel the Defendant to:

provide a fresh PA in the form prescribed in the SPA or in an alternative form recently negotiated to settle the dispute;

sign the Memorandum of Transfer and all other instruments to transfer a list of titles to the Plaintiff; and other ancillary relief. Analysis and Findings [5] The plain and ordinary meaning of clause 6.2 of the SPA is that the Defendant “shall execute a PA upon the terms set out in Appendix 3,” and the said PA. The form of the PA set out in Appendix 3 to the SPA does not stipulate a time limit but states simply in clause 2.1 that: “The power of attorney herein conferred and given shall be irrevocable.” The above obligation appears to be mandatory. Clause 6.2 of the SPA uses no words indicating any latitude for the parties to treat the obligation as optional or to agree on a different form of the PA. S/N wqrShY7SE2s2yvUsMb7iA [6] The Defendant did not offer any other interpretation of the SPA and no legal theory was advanced by the Defendant as to why a perpetual PA as intended under the SPA would not be valid or cannot be renewed. The Defendant also initially gave the PA in the form of Appendix 3 on 2-4-1992 along with a Deed of Assignment of all non-titled lands when the SPA was signed. [7] The only argument put forward by the Defendant is that the parties had agreed to a different form of the PA on 2-3-1993 (“1993 PA”). This 1993 PA was not perpetual but had a fixed term of 30 years. Clause 2.1 of 1993 PA read: “The power of attorney herein conferred and given is granted for a fixed period of thirty (30) years from the date of this Power of Attorney (“the said period”) and shall be irrevocable during the said period.” [8] As far as the evidence show, the 1993 PA was given pursuant to the Supplemental Agreement dated 1-3-1993 which among other amendments, changed the donee of the PA from the original named developer to the Plaintiff. However, there were no changes to the form of the PA in Appendix 3 of the SPA which was still expressly referred to in the said Supplemental Agreement. Thus, the 1993 PA seemed to be furnished in breach of the principal obligation under the SPA. S/N wqrShY7SE2s2yvUsMb7iA [9] In response to the Court’s query during oral submissions on the legal basis for the change from Appendix 3 of the SPA to a different form of PA, counsel for the Defendant contended that the parties had agreed to amend the SPA in 1993 to allow for the 1993 PA for good consideration. The difficulty with this submission is that:

there was no averment on affidavit by the Defendant that there was such an agreement nor any contemporaneous evidence of it other than the 1993 PA itself to reveal the common intent and the consideration that must have flowed; and

there was no argument advanced by the Defendant on the concepts of promissory estoppel or waiver to bind the Plaintiff, nor any relevant material in the affidavits for the Court to arrive at any conclusion on these points. [10] As the above issues of mixed fact and law were not specifically put in issue, this Court cannot determine from the ambiguous past conduct of both parties, the reason for the apparent conflict between the 1993 PA and the SPA. The non-objection to the form of the 1993 PA may well have been premised on the understanding that it will be continuously renewed. Since the Defendant is asserting as a matter of pure submission that there was a variation of the SPA, the burden to prove it was not discharged. S/N wqrShY7SE2s2yvUsMb7iA [11] Therefore, the approach of the Court is to determine this Originating Summons on the premise that the SPA is still in executory form and the obligations of the parties thereunder remain extant. They do not lapse merely because of the effluxion of time and there was also no argument that there is any express or implied time limit for the performance of the undischarged obligations under the SPA. [12] Whatever the reason for the form of the lapsed 1993 PA, the Defendant’s principal obligations remain unchanged. They are: Clause 3.1 Clause 4.3 S/N wqrShY7SE2s2yvUsMb7iA Clause 6.2 (as amended by clause 4 of the Supplemental Agreement dated 1-3-1993) Clause 6.3 [13] Based on the above terms, the Defendant’s refusal to furnish the PA and execute the Memorandum of Transfer for titles remaining in the Defendant’s name on request constitutes a breach of the SPA. [14] The Plaintiff’s application for specific relief as a remedy for the above breach calls for the exercise of the Court’s discretion. To this end, the Court has taken the following into consideration:

The parties had contemplated the execution of sale agreements in the name of the Defendant and the direct transfer of title from the Defendant to the ultimate purchasers of units constructed and sold in the development using the PA and so, the Plaintiff’s “failure” to immediately transfer all titles to itself was by common design; S/N wqrShY7SE2s2yvUsMb7iA

The grant of a perpetual PA from the outset would have relieved the Defendant from any positive undertakings in relation to all aspects of the development and so, the Plaintiff’s failure to transfer all titles to itself during the period of validity of the 1993 PA and any prejudice to the Defendant, were caused by the deviation from Appendix 3 of the SPA;

As an incorporated entity, the Defendant has no natural lifespan and can theoretically exist indefinitely. This allows the Defendant to bear obligations that can extend perpetually. No evidence was adduced by the Defendant to demonstrate how it is prejudiced by the extended period of the development in this case; and

Whatever the reason for the extended period of the development, it is common ground that third-party interests (primarily the purchasers of units in the developments) are most prejudiced by this dispute as they are delayed in obtaining title to their properties. This interest should take precedence over those of the parties who had apparently structured the SPA, no doubt for the purpose of saving money from multiple land transfers. S/N wqrShY7SE2s2yvUsMb7iA Conclusion [15] For the above reasons, the Originating Summons is allowed. As the Defendant takes the position that there was no agreement reached in the parties’ recent negotiations on the terms of a fresh PA, this Court grants prayers (A), (C), (D) and (E) with no order as to costs. Bertarikh : 28 Januari 2025 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Plaintif : Cheryl Leong See Teng (with Choon Hon Leong and Teh Yi Huang), Messrs Sanjay Mohan Untuk Defendan : Chanravathane A/P S. Ponnudurai, Messrs SP Chanra S/N wqrShY7SE2s2yvUsMb7iA