Sayap Jaya Sdn. Bhd. v Sejati Tropika Sdn Bhd (BA-22NCvC-269-08/2020)

The case concerned a contractual dispute stemming from a joint venture agreement dated 13-12-2017 between the plaintiff and the defendant, which eventually failed.

The plaintiff claimed vacant possession of its land, revocation of the power of attorney granted to the defendant, as well as special damages, general damages, interest, and costs.

The defendant filed a counterclaim seeking the specific performance of the joint venture agreement, along with damages to be paid by the plaintiff. 19/08/2025 11:49:19

The plaintiff’s claim was allowed with RM20,000.00 in costs, while the defendant’s counterclaim was dismissed, also with RM20,000.00 in costs. However, the court disallowed the plaintiff’s claim for special damages.

Therefore, the defendant appealed. Brief Facts of the Case 6. The plaintiff is the proprietor of a parcel of land registered under PN84291, Lot 4775, Mukim Batu, Daerah Kuala Langat, Selangor Darul Ehsan (hereinafter referred to as the “said land”). The defendant serves as the developer of the said land.

The plaintiff and the defendant entered into a joint venture agreement dated 13-12-2017 to develop the said land.

A Power of Attorney dated 31-5-2018 was granted in favour of the defendant regarding the said land. It was registered at the Land Office on 31-10-2018.

The joint venture agreement covers the development of a mixed-use commercial and residential project, spanning phases 1 through 5.

The planning permission acquired by the plaintiff for Phase 1 expired in August 2017. Consequently, the plaintiff was required to secure an extension of the existing planning permission or to obtain a new planning permission, and the defendant was responsible for bearing the associated costs.

Both parties mutually agreed that the defendant would pay the plaintiff an advance fee as outlined in Clause 3.1 of the joint venture agreement, as follows: “3.1.1 Upon the execution of this Agreement, the sum of Ringgit Malaysia One Million Five Hundred Thousand (RM1,500,000.00) only (hereinafter referred to as the “Deposit Sum”) is to be paid to MyBIM Sdn Bhd (Company No. 941266-A) or Messrs Fong Yap & Gan as the stakeholders;

3.1.2 Upon receipt of all the Subdivided Title of the individual Lot for each phase together with valid Planning Permission for Phase 1 of the Development AND Power of Attorney in favour of the developer, the sum of Ringgit Malaysia One Million (RM1,000,000.00) only (hereinafter referred to as the “First Tranche”) will be paid;

3.1.3 Upon receipt of the duly endorsed Building Plan for the Phase 1 OR within six (6) months from the payment of the First Tranche, whichever is the earlier, the sum of Ringgit Malaysia Five Hundred Thousand (RM500,000.00) only (hereinafter referred to as the “Second

3.1.4 Upon receipt of the duly endorsed Building Plan for Phase II/Commercial or any part thereof OR within not more than fifteen (15) months from the date of the First Tranche payment herein, whichever is the earlier, the sum of Ringgit Malaysia One Million (RM1,000,000.00) only (hereinafter referred to as the “Final Tranche”).

3.1.5 Upon execution of this Agreement, the Proprietor shall submit the Master Title and procure for subdivision of Individual Titles for each phase. The Proprietor shall procure and obtain the subdivided Individual Title for each Phase within twelve (12) months from the date of this Agreement in accordance with Appendix 1 herein. The Developer shall bear all costs and expenses related to the subdivision of individual Titles.”

The plaintiff terminated the joint venture agreement on the basis that the defendant had failed to pay the final tranche of payment amounting to RM1 million as stated in Clause 3.1.4 of the joint venture agreement.

The plaintiff alleges that it had provided the defendant with the opportunity to remedy the default of payment as per Clause 15.4(a) of the joint venture agreement, but the defendant failed to do so.

Therefore, the plaintiff terminated the joint venture agreement under Clause 15.4.1 of the agreement. This gave rise to this cause of action.

The defendant’s case stressed that the plaintiff had not obtained full planning permission. According to the defendant, the plaintiff only acquired a Conditional Planning Permission dated 24-4- 2015, followed by an Extension of the Conditional Planning Permission dated 15-1-2018.

The defendant further claimed that the plaintiff had failed to supply the defendant with relevant documents, including approval letters from Indah Water Consortium and the Department of Irrigation and Drainage, Selangor.

All the factors mentioned above caused the defendant to refrain from making the final tranche of payment. Ultimately, the defendant exercised its rights by submitting a counterclaim as pleaded in this cause of action.

Issues to be Tried The plaintiff had filed six issues to be tried, and the defendant had filed four issues to be tried, respectively. I have narrowed it down as follows:

18.1. Whether there exists a complete (the defendant used the phrase “full”) and valid Planning Permission as alleged by the defendant?

18.2 Is it the defendant's or the plaintiff's responsibility to meet all technical requirements set by the local authorities?

Analysis and Findings of this Court Concerning the initial issue, the defendant claims that the plaintiff failed to obtain valid planning permission as specified in Clause 3.1.2 of the joint venture agreement.

The term in 2.1, Recital F, of the joint venture agreement is as follows: “As at the date of this Agreement, the Proprietor has obtained the Planning Permission for Phase 1, which expired in August 2017. The Proprietor shall do the necessary action to apply for the extension of validity period and/ or fresh Planning permission for Phase

The Developer shall bear the cost and expenses of the application of extension of time/fresh application for the Planning Permission.”

The term in Clause 3.1.2 is as follows: “Upon receipt of all the subdivided titles of the individual lot for each phase together with valid Planning Permission for the Phase 1 of the Development AND Power of Attorney in favour of the Developer, the sum of Ringgit Malaysia One Million (RM1,000,000.00) only (hereinafter referred to as the “First Tranche”) will be paid.”

When examining the joint venture agreement, Clause 1.1.3 states that references refer to statutory provisions, enactments, or laws as applicable from time to time, with modifications permitted under the agreement.

This allowed me to analyse the definition of “planning permission” as outlined in the Town and Country Planning Act

According to the Act, “planning permission” refers to approval granted, with or without conditions, to carry out development.

The defendant argues that the plaintiff failed to satisfy the requirements of Indah Water Konsortium (IWK), leading to a breach of Clause 3.1.2 of the joint venture agreement. This breach happened because the plaintiff's failure to comply with IWK's criteria rendered the planning permission invalid, as Clause 3.1.2 required the plaintiff to supply the defendant with valid planning permission.

DW4, who was the solicitor acting for the defendant when the joint venture agreement was prepared, testified that a valid KM must be a KM that allows the developer to proceed with the development and construction stage as specified in Clause 2.1, Recital F.

DW4 continued her testimony that Recital F, Clause 2.1, is not related to Clause 3.1.2. Her evidence is captured below: “No, I don’t agree. To me, this Clause 3.1.2 is different from Clause F. Clause F is about the extension of time, the extension of validity period. We are talking about the time, extension of validity period. 3.1.2 is the entire valid Planning Permission. Cannot really link it.” (refer to page 515, notes of evidence).”

DW4 continued her testimony as follows: “When we say valid permission Phase 1 its talk about valid as in the valid Kebenaran is obtained all the Kebenaran from all the relevant authorities so that the developer can proceed with the development stage.” (refer to page 515, notes of evidence).

DW4 further emphasised that the planning permission must be unconditional, as it constitutes valid planning permission. (refer to page 521, notes of evidence).

Thereafter, DW4 agreed with the plaintiff's counsel's question that, under Clause 11.1.12(d), the developer shall obtain and procure all the necessary approvals, consents, and permissions from relevant authorities for the development unless the proprietor has already obtained them. (refer to page 522, notes of evidence)

After reviewing Clause 2.1, Recital F, I note that it discusses obtaining an extension for the planning permission that expired in August 2017 or acquiring a new one. The clause does not mention any valid planning permission or define what qualifies as valid. Consequently, DW4’s claim that a valid planning permission is referenced in Clause 2.1, Recital F, is incorrect.

The Town and Country Planning Act 1976 states that planning permission can be granted either with or without conditions.

Before this court is DW4, the solicitor who acted for the defendant during the joint venture agreement, and she confirmed that the agreement was prepared without her reviewing the planning permission. She worked solely on her client's instructions, the defendant (refer to pages 510 to 511, notes of evidence).

I find that, since the term “valid planning permission” is not explicitly defined in the joint venture agreement, it cannot be regarded as an unconditional planning permission, as the Town and Country Planning Act 1976 interprets a planning permission as one with or without conditions.

Therefore, the term “valid” in Clause 3.1.2 must be read together with Clause 2.1, Recital F, which relates to extending the expired planning permission or obtaining a new one. This is particularly important because DW4 herself, during cross-examination, confirmed that under Clause 11.1.12(d), the developer must obtain and secure all necessary approvals, consents, and permissions from the relevant authorities for the development unless the proprietor has already acquired them. (refer to page 522, notes of evidence).

The plaintiff must either secure an extension of the planning permission that expired in August 2017 or apply for a new planning permission. The plaintiff chose the former, which was exactly on the same terms and scope as the previously expired planning permission.

The plaintiff fulfilled its obligation under Clause 2.1, Recital F, by securing an extension for the expired planning permission, which maintains the same terms as the original. The defendant also confirmed this (refer to page 166, notes of evidence).

I conclude, as a factual finding, that the defendant was aware of the terms and conditions set out by the Town Council authorities and all relevant technical departments regarding the expired planning permission. This is supported by the defendant's admission during cross-examination, where he confirmed his knowledge of the expired planning permission. Additionally, he testified that he was given a copy of the expired planning permission, despite his lawyer’s claim to the contrary. (refer to page 161, notes of evidence)

The defendant's primary argument is that the planning permission failed to meet the standards required by Indah Water Konsortium, Syarikat Bekalan Air Selangor, and Jabatan Pengairan dan Saliran. During the trial, only one witness, DW6 from Indah Water Konsortium, was called. No representatives from the other departments provided evidence. As a result, I find that these claims are unsubstantiated and lack convincing proof before this court.

In this case, the defendant’s main complaint is that the layout plan attached to the renewed planning permission indicates a 10m setback with a closed sewage plant. The requirement for a 30m setback was communicated to the defendant’s consultant when they submitted the “Pendirian Bangunan” for approval through Perunding Asatec's application dated 31-10-2018.

I fully agree with the plaintiff’s submission that when Indah Water Konsortium decided to replace the sewage plant with an open one with a 30m setback and rejected the previously approved closed sewage plant with a 10m setback in the planning permission, it became a business risk the defendant had to accept. The plaintiff is not liable for Indah Water Konsortium's decision.

DW3, the defendant’s civil engineer, confirmed that if any technical department wishes to impose new conditions beyond the existing ones, compliance is required (refer to page 471, notes of evidence). The defendant also acknowledged this fact. (refer to pages 158,159, 160, notes of evidence).

DW3, in his examination-in-chief, stated that only a conditional planning permission exists in this case. However, during cross-examination, he acknowledged that a conditional planning permission remains valid. He also confirmed that all planning permissions are subject to conditions imposed by the Town Council and other technical departments.

DW3 testified that Indah Water Konsortium ultimately approved the defendant’s proposal for a smaller sewage plant with a 30m setback. This approval was granted to the defendant to proceed with further action.

The defendant also agreed with the plaintiff’s lawyer’s suggestion that unconditional planning permission does not exist. (refer to page 165, notes of evidence).

The defendant also agreed that the conditions in the planning permission are general rather than specific. The technical departments may impose additional or more detailed conditions to be met. (refer to pages 480, 481, notes of evidence).

Moving forward, DW6 from Indah Water Konsortium stated that the compromise was allowing the defendant to construct a smaller sewage plant with a 30m setback. He also testified that there is no such thing as unconditional planning permission. (refer to pages 601 to 607, notes of evidence).

After considering the facts outlined above, I find the defendant’s claim that the planning permission is invalid to be untenable.

I agree with the plaintiff that Clause 3.2.1 should be read together with Recital F of the joint venture agreement. According to Recital F, if the plaintiff extends the validity of the expired planning permission, it remains valid both under Recital F and Clause 3.2.1. The plaintiff has fulfilled this condition by providing the defendant with an extended validity period for the planning permission.

Furthermore, if the plaintiff did not obtain valid planning permission as claimed by the defendant, it is illogical for the defendant to have made the first payment on 1-6-2018 and the second payment on 6-6-2018.

The other notable fact is that the defendant was aware of the Indah Water Konsortium's 30 m setback issue as early as 15-1-

Therefore, if the validity of the planning permission is genuinely an issue, as alleged by the defendant, the defendant would not have made all the payments mentioned above.

What can be inferred as a fact from the defendant’s act of making the payment is that the defendant knew that the imposition of the 30m setback was its responsibility. This is evident from the defendant’s settlement with the Indah Water Konsortium for a smaller sewage plant with a 30m setback.

The defendant’s assertion that the payments were made in good faith despite the Indah Water issue is unacceptable. It seems to be fabricated to support the argument that the plaintiff does not have the right to terminate the joint venture agreement.

The defendant became aware of the Indah Water Konsortium's 30m requirement as early as 15-1-2018. This issue could have been resolved by relocating the sewage plant. However, the defendant chose to appeal against the requirement, which was only undertaken by its consultant engineer on 20-12-2018. The appeal was received by Indah Water Konsortium on 4-1-2019. The appeal was rejected. Another appeal was submitted on 12- 6-2019, and it was rejected on 27-6-2019.

Subsequently, on 26-9-2019, the defendant decided to relocate the sewage plant, which was approved by Indah Water Konsortium on 9-10-2019.

The facts as mentioned above show that the defendant was displaying a lackadaisical attitude towards the project, resulting in approximately 1 year and 9 months of wasted time.

The plaintiff’s solicitor reminded the defendant that the final tranche of payment was due on 5-9-2019. It is also notable that the first tranche was paid on 1-6-2018 and the second on 6-6- 2018, despite the Indah Water Konsortium issue having existed as early as 15-1-2018, without any objection.

On 17-9-2019, the plaintiff’s solicitors reminded the defendant’s solicitor that the defendant had breached Clause 3.1.4 of the joint venture agreement. The defendant was given 30 days' notice to rectify the breach.

The defendant’s solicitors responded on 20-9-2019, proposing that the final tranche of payment be suspended and deferred until full planning approval has been obtained.

The plaintiff’s solicitors, in a letter dated 7-10-2019, once again reminded that the final tranche of payment must be made by 16- 10-2019. The defendant’s solicitors, in their letter dated 10-10- 2019, raised the 30m sewage plant issue, and the defendant is awaiting approval from Indah Water Konsortium regarding its appeal to relocate the sewage plant. What the defendant’s solicitors conveyed to the plaintiff’s solicitor is inaccurate because they had already received an approval letter from Indah Water Konsortium on 9-10-2019. The only conclusion I can draw from the defendant’s behaviour is that they were using the issue with Indah Water Konsortium as a delaying tactic to avoid making the payment owed to the plaintiff.

Finally, the plaintiff’s solicitor sent a letter dated 14-10-2019, reminding the defendant that the 30-day notice to make the final tranche of payment would expire on 16-10-2019. The defendant made no payment. In their letter dated 13-11-2019, the plaintiff terminated the joint venture agreement under Clause 15.4.1.

This resulted in the termination of the joint venture agreement, with the defendant's payments being retained by the plaintiff in accordance with Clause 15.5.2 of the agreement.

Therefore, I conclude that a valid planning permission cannot exist without conditions, contrary to the defendant's claim. There was a consensus between the plaintiff and the defendant, which is evident from the defendant’s conduct and participation in the joint venture agreement. The relevant case is the Supreme Court decision Ayer Hitam Tin Dredging Malaysia Bhd v YC Chin Enterprise Sdn Bhd [1994] 2 MLJ 754.

Regarding the second issue, it is already addressed in the first issue that any requirements left unattended when the joint venture agreement was concluded became the defendant’s obligations under Clause 11.1.12(d), whereby the developer shall obtain and secure all necessary approvals, consents, and permissions from the relevant authorities for the development unless the proprietor has already acquired them. (refer to page 522, notes of evidence).

The defendant’s counter-claim has not been proven before this court.

Conclusion The plaintiff has proved its case on the balance of probabilities against the defendant. Therefore, the plaintiff’s claim is granted as pronounced on 10-6-2025, with costs of RM20,000.00. The defendant’s counterclaim is dismissed with costs of RM20,000.00. Dated:19th August 2025 (INDRA NEHRU SAVANDIAH) Judge High Court of Malaya Shah Alam Selangor Date of Decision: 10th June 2025 Counsels: For the Plaintiff : Ramesh Sivakumar a/l Ramaveloo, Goik Kenzin, Calvin Lim Sin Guan & Bhuvaneswari Krishnamurthy Messrs Goik, Ramesh & Loo For the Defendant :