Yu Kuan Chon v Franco Chan Yoong Jurch (W-02(NCvC)(W)-1409-08/2024)

1 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO.: W-02(NCvC)(W)-1409-08/2024 ANTARA YU KUAN CHON (NO. K/P: 620914-08-6435) …PERAYU DAN

1. FRANCO CHAN YOONG JURCH (NO. K/P: 800419-10-5537)

2. WONG WAI YIN (NO. K/P: 800410-05-5203)

3. SIN LEE PIN (NO. K/P: 840501-05-5387)

4. LAU POH CHEOK (NO. K/P: 740918-14-5371) …RESPONDEN-RESPONDEN [(Dalam Perkara Mahkamah Tinggi Malaya di Kuala Lumpur) Dalam Negeri Wilayah Persekutuan, Malaysia Guaman Sivil No: WA-22NCvC-64-01/2022 Antara

1. Franco Chan Yoong Jurch (No. K/P: 800419-10-5537)

2. Wong Wai Yin (No. K/P: 800410-05-5203)

3. Sin Lee Pin (No. K/P: 840501-05-5387)

4. Lau Poh Cheok (No. K/P: 740918-14-5371) …Plaintif-Plaintif 29/06/2026 15:54:12 W-02(NCvC)(W)-1409-08/2024 Kand. 70 S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 2 Dan Yu Kuan Chon (No. K/P: 620914-08-6435) …Defendan] CORAM: MOHAMED ZAINI BIN MAZLAN, JCA. AHMAD KAMAL BIN MD. SHAHID, JCA. ONG CHEE KWAN, JCA. JUDGMENT OF THE COURT Introduction

1. This is an appeal by the Appellant, Yu Kuan Chon, against the decision of the High Court of Malaya at Kuala Lumpur (the "High Court") delivered on 2.8.2024, whereby the Learned High Court Judge, Yang Arif Dato' Hj Akhtar Bin Tahir, allowed the Respondents' claim and awarded damages of RM1,286,419.00 in lieu of specific performance, arising from the Appellant's failure to honour his obligations under four Buy-Back Guarantees.

2. Having heard the submissions of counsel for both parties and having carefully reviewed the record of appeal, we found no merit in this appeal. We therefore dismissed the appeal with S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 costs and affirmed the decision of the High Court. Our reasons follow. Background Facts

3. The material facts are largely uncontested. In 2014 and 2015, the Respondents each purchased parcels of residential property known as 188 Suites, Kuala Lumpur ("the Parcels") from the developer, Kar Sin Bhd ("the Developer"), pursuant to Sale and Purchase Agreements under Schedule H of the Housing Development (Control and Licensing) Act 1966 ("HDA"). The Parcels are as follows:

4. Each of the Respondents obtained bank loans to finance their respective purchases and executed Deeds of Assignment in favour of their respective financier banks, namely CIMB Bank Berhad, OCBC Bank (Malaysia) Berhad, and RHB Islamic Bank Berhad (collectively, "the Banks"), as security for the loans. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 4

5. The Buy-Back Guarantees, which formed part of a broader investment package, were executed in early 2015. Under each Buy-Back Guarantee, the Appellant undertook to buy back the Parcels from the Respondents at a guaranteed profit of 23.07% of the net purchase price, upon the Respondents exercising the buy-back option within the prescribed validity period of between the 3rd and 5th year from the date of vacant possession of each Parcel ("the Validity Period").

6. The respective dates of vacant possession were 1.10.2015 (Parcel A), 15.9.2015 (Parcel B), 1.10.2015 (Parcel C), and 11.3.2015 (Parcel D). The Validity Periods accordingly ran until 30.9.2020, 14.9.2020, 30.9.2020, and 10.3.2020 respectively.

7. In early 2020, the Respondents, through their nominated liaison, Vincent Ho, communicated to the Appellant their intention to exercise the buy-back option. In response, and in acknowledgment of the said exercise, the Appellant instructed his solicitors KF Wong & Lee to prepare draft Buy-Back Sale and Purchase Agreements ("Buy-Back SPAs") in the names of his nominees, Fresh Melody Sdn Bhd (for Parcels A, B and C) and Rapid Synergy Sdn Bhd (for Parcel D). Correspondence by way of email and WhatsApp messages dated in September– October 2020 and subsequent months shows the draft Buy-Back SPAs being transmitted to the Respondents, professional fees invoiced and paid, appointment arrangements made for signing, and Letters of Confirmation prepared to account for the buy-back purchase prices. The buy-back purchase prices in S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 these documents correspond precisely to the Guaranteed Buy-Back Purchase Prices stipulated in the Buy-Back Guarantees.

8. Notwithstanding the Appellant's acknowledgment of the exercise of the buy-back option and his initial steps towards completion, the Appellant ultimately failed to complete the purchase of the Parcels. The executed Buy-Back SPAs were never returned to the Respondents.

9. On 27.1.2022, the Respondents filed their Writ of Summons against the Appellant claiming specific performance of the Buy-Back Guarantees together with ancillary reliefs. At trial, the Respondents adduced the evidence of seven witnesses. The Appellant did not testify and called no witnesses. There was no cross-examination of the Respondents' witnesses.

10. Following full trial, the High Court awarded the Respondents damages in lieu of specific performance in the total sum of RM1,286,419.00, being the aggregate guaranteed profit of 23.07% of the net purchase price of each Parcel. The Appellant appealed against that decision. The Issues

11. The Appellant advanced four grounds of appeal. We shall address each in turn. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 6

(ii) Whether the Buy-Back Guarantees had lapsed or expired before the Respondents exercised the buy-back option;

(iii) Whether the Respondents had suffered any actual loss justifying an award of damages; and

(iv) Whether the abandonment of the specific performance claimed at trial was fatal to the Respondents' claim for damages. Issue 1 - Locus standi The Appellant's Contention

12. The Appellant submitted that the Respondents had no locus standi to maintain this action as they had executed Deeds of Assignment in favour of the Banks, and that those Deeds constituted absolute assignments of all rights, title and interest in the Parcels. The Appellant further contended that the Respondents were required, but failed, to obtain prior written consent from the Banks before commencing this action, a requirement said to be imposed by express terms in the Deeds of Assignment. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 Our Analysis

13. We rejected the Appellant’s contention on locus standi without hesitation. At the outset, however, it was necessary to disentangle two analytically distinct questions which the Appellant had conflated. The first question was whether the Deeds of Assignment constituted absolute assignments within the meaning of Section 4(3) of the Civil Law Act 1956, such that the chose in action under the SPA vested entirely in the Banks. The second question was whether, even assuming the assignments to be absolute, the Respondents nonetheless possessed the locus standi to maintain this action by operation of Section 22C of the HDA. The Appellant’s submission failed on both questions, but for different reasons. We deal with each in turn.

14. On the first question, the applicable principle is well-settled. An assignment by a purchaser to a financier bank of all his rights, title and interest under a sale and purchase agreement is absolute in form and effect for Section 4(3) of the Civil Law Act

1956. The landmark authority is Nouvau Mont Dor (M) Sdn Bhd v Faber Development Sdn Bhd [1985] 1 CLJ 56 (“Nouvau Mont Dor”), where the apex court held that a deed of assignment employing words of absolute transfer vested the full beneficial interest and all rights under the SPA in the assignee bank, with the consequence that only the bank, as absolute assignee, could sue in its own name under Section 4(3) without joining the purchaser. The word “absolute” there referred to the S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 completeness of the transfer of the chose in action, that is, the assignor passed and transferred all his rights, title and interest under the SPA to the bank without reservation.

15. The Federal Court in Phileoallied Bank (Malaysia) Bhd v Bupinder Singh Avatar Singh & Anor [2002] 2 CLJ 621 (“Phileoallied”) specifically considered and affirmed Nouvau Mont Dor. The Federal Court restated the law as stated in Nouvau Mont Dor and further held that, in the absence of any statutory or common law requirement compelling a court order to realise security under an absolute assignment, the court should give effect to the contractual rights of the parties. At the same time, the Federal Court in Phileoallied characterised the security arrangement created by such an absolute assignment as constituting an equitable mortgage wherein the bank, as assignee, holds the vested rights as mortgagee subject to the purchaser’s equity of redemption upon repayment. These two propositions are not inconsistent. The assignment remains absolute in form and effect for the law of choses in action whilst the equitable mortgage characterisation describes the juridical nature of the security interest thereby created. In other words, that an assignment is absolute does not preclude it from simultaneously creating a security interest in the nature of an equitable mortgage. Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1 (“Samuel Naik”) affirmed both propositions.

16. A line of subsequent decisions — including this Court’s decision in Lim Meow Khean & others v Pakatan Mawar (M) Sdn Bhd S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 and others [2021] 1 LNS 173 (“Lim Meow Khean”), Surendran a/l Kadarwell & Ors v Hillpark Resources Sdn Bhd [2021] 1 LNS 1142 (“Surendran Kadarwell”) and the High Court decisions in Max-Benefit Sdn Bhd v Phuah Thean An & Anor [2001] 1 MLJ 553 (“Max-Benefit”) and Sakinas Sdn Bhd v Siew Yik Hau & Anor [2002] 2 AMR 1952 (“Sakinas”) — must be understood in their proper context. These cases were not concerned with displacing the proposition in Nouvau Mont Dor that an absolute assignment vests the chose in action in the bank. Rather, they addressed a distinct antecedent question: whether, on a true construction of the relevant assignment deed read together with its contemporaneous facility or loan agreement, the instrument was intended to transfer, as part of the security package, the purchaser’s right to institute legal proceedings against the developer, or whether the parties’ true intention was to assign only the proprietary interest as security while leaving the purchaser’s litigation rights undisturbed. The inquiry is one of contractual construction, not a departure from settled law on the nature of absolute assignments.

17. Applying the construction principles in Lim Meow Khean to the present case, the Deeds of Assignment and the facility agreements were executed contemporaneously and make specific cross-references to each other. Recital (c) expressly stipulates that the Deed of Assignment was to secure the indebtedness under the Loan Agreement/ Facility Agreement. Further, clause 8 of the Deed of Assignment provides that in the event the document of title is issued, the Respondents are to S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 execute a charge over the document of title to secure the repayment of the debt to the Banks. On a true construction of these instruments, the assignment of the SPA rights to the Banks was effected purely as security; the parties did not intend to transfer the Respondents’ right to pursue claims against the Developer. Based on this analysis, the Respondents retained the locus standi to commence the action.

18. Nonetheless, even accepting for present purposes that the Deeds constitute absolute assignments vesting the full chose in action in the Banks — as Nouvau Mont Dor would have it — that conclusion does not assist the Appellant. The legislature, by enacting Section 22C of the HDA, expressly addressed and overrode the consequence of absolute assignment in the context of homebuyer claims against developers. The Respondents’ locus standi to maintain this action is therefore secure on either analysis.

19. The Appellant further contended that the Respondents failed to comply with a contractual pre-condition requiring prior written consent of the Banks before commencing this action, a requirement said to be imposed by express terms in the Deeds of Assignment. This submission, too, is untenable. We address the statutory position under Section 22C of the HDA and the broader principles governing the notice requirement in turn.

20. Section 22C of the HDA expressly confers upon a homebuyer the right to initiate and maintain legal proceedings against a S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 housing developer or any other person in respect of any matter arising out of the sale and purchase agreement, provided the financier is notified in writing before or within 14 days of the filing of the action. This provision operates as a legislative override of any contrary term in any written law, rule of law, agreement, or assignment. It was enacted in direct response to the difficulties exposed by Nouvau Mont Dor, where the apex court held that only the absolute assignee, namely, the bank, could sue under Section 4(3) of the Civil Law Act 1956 in its own name without joining the assignor. That rule left the purchaser without standing to litigate directly against a defaulting developer. Section 22C was enacted to restore that standing. Clause 7 of each of the Respondents’ SPAs mirrors this statutory provision.

21. It is necessary to address a preliminary question that has received insufficient attention in the authorities: whether the characterisation of the assignment as an equitable mortgage under Phileoallied negates the “absolute” character of the assignment for the purposes of Section 22C. It does not. The two characterisations operate on distinct analytical planes. The word “absolute” in Section 22C, as in the law of choses in action generally, describes the completeness and form of the transfer of the rights under the SPA. By this, the assignor has transferred all his rights, title and interest thereunder to the bank, and the bank stands in his shoes as the holder of those rights. The equitable mortgage characterisation in Phileoallied describes the juridical nature of the security interest thereby created: the bank holds those rights as mortgagee, subject to the assignor’s S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 12 equity of redemption upon repayment. An assignment can simultaneously be “absolute” in its form and a vehicle for an equitable mortgage in its substance. Section 22D of the HDA, inserted by the same 2007 amendment, expressly contemplates an “absolute assignment” that is “not purporting to be by way of charge only” — language that confirms that an assignment given as security may still retain the character of an absolute assignment for the purpose of vesting the chose in action in the assignee.

22. The notice requirement in Section 22C is aimed at protecting the financier’s interests as equitable mortgagee. The proviso identifies its own beneficiary with precision. It is the financier that is to be notified, and the financier whose interests are thereby protected. The courts have consistently held that this requirement is procedural rather than substantive, and that its non-observance does not deprive the purchaser of locus standi: see Austin Heights Sdn Bhd v Pang Woo [2019] 1 LNS 2239 (“Austin Heights”). It follows that only the financier, the party for whose benefit the notice requirement was enacted, has standing to raise non-compliance with it. The developer, as a stranger to the assignment relationship, has no cognisable interest in whether the bank was notified. To permit the developer to invoke the notice requirement as a ground to defeat the purchaser’s action would invert the protective purpose of the HDA. A provision enacted to restore the purchaser’s standing to sue would be turned into a weapon S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 wielded by the very party against whom that standing was restored.

23. Further, we are of the view that where a developer raises the issue of non-notification, the appropriate course would be to bring the matter to the bank’s attention, so that the bank, which is the true beneficiary of the notice, may elect to intervene or object. If the bank, having been made aware of the proceedings, elects not to intervene, this must necessarily mean that the bank has no objection to the purchaser’s action. In such a case, the developer cannot be permitted to assert a right that the bank itself has declined to exercise.

24. In the present case, the Respondents did, out of an abundance of caution, notify each of the relevant Banks of the commencement of proceedings. The notifications were issued in March 2022. More specifically, Notifications dated 11.3.2022 and 22.3.2022 issued by the 1st Respondent’s solicitors to CIMB Bank Bhd for Parcel A, Notification dated 11.3.2022 issued by the 1st Respondent’s solicitors to OCBC Bank (Malaysia) Bhd for Parcel B, Notification dated 11.3.2022 issued by the 2nd and 3rd Respondents’ solicitors to CIMB Bank Bhd for Parcel C and Notification dated 11.3.2022 issued by the 4th Respondent’s solicitors to RHB Islamic Bank Bhd for Parcel D.

25. None of the Banks raised any objection. Their silence, in the circumstances, is properly to be taken as acquiescence in the Respondents prosecuting the action in their own names: see S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 Yap Heng Sang v Mammoth Empire Land Sdn Bhd [2021] 1 LNS1 2149 (“Yap Heng Sang”). That being so, the Appellant’s challenge on the ground of non-notification has no foundation whatsoever.

26. We pause to observe, however, that while non-notification does not affect the purchaser’s locus standi, it carries very real practical importance for the purchaser. The bank, as equitable mortgagee under Phileoallied, holds a proprietary security interest in the rights, claims and remedies that the purchaser possesses under the SPA — including any judgment or award obtained through proceedings founded on those rights. A judgment obtained by the purchaser against the developer is valid and binding as between the parties to the litigation, but it does not bind the bank, which was not a party. The bank’s equitable mortgage rights survive unaffected by any judgment obtained without its knowledge or participation. A purchaser who receives a monetary judgment — whether for liquidated ascertained damages, general damages, or a refund upon rescission — and who applies the proceeds without first accounting to the bank acts in breach of the equitable mortgage, and exposes himself to claims by the bank for the dissipation of charged assets. The notice requirement under Section 22C therefore serves an important coordinating function. It ensures that the bank is aware of the proceedings so that it may assert its claim over the proceeds in an orderly manner, and it protects the purchaser from inadvertently misapplying the fruits of the litigation. Practitioners acting for purchasers would do well to S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 15 ensure that notification is given timeously in every case, not merely as a matter of compliance, but in the protection of their clients’ own interests.

27. For completeness, and more pertinently to the present appeal, the Respondents’ claim is in any event premised on the Buy-Back Guarantees which are documents distinct from and collateral to the SPAs. As was recognised in Surendran Kadarwell, where a claim is not founded on the SPA, the notification requirement in Clause 7 of the SPA does not arise at all. The Buy-Back Guarantees are standalone undertakings by the Appellant in his personal capacity, independent of the contractual relationship between the Respondents and the Developer under the SPAs. The Respondents’ cause of action against the Appellant arises from those Guarantees, not from the SPAs, and no requirement of prior notification to the Banks arises from that source.

28. The Learned High Court Judge was therefore correct to hold that the Respondents maintained full proprietary rights over their Parcels notwithstanding the assignments, and that they possessed the requisite locus standi to bring this action. The Appellant’s objection on the ground of non-notification fails on multiple, independently sufficient grounds. As such, Ground 1 of the appeal failed. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 Issue 2: Whether the Buy-Back Guarantees were exercised within the validity period The Appellant’s Contention

29. The Appellant contended that the buy-back option had lapsed before it was exercised by the Respondents. Relying on the dates of the Letters of Demand (7.12.2021) and the filing of the Writ of Summons (27.1.2022), the Appellant argued that the formal assertion of the buy-back rights was made after the expiry of the respective Validity Periods in 2020. Our Analysis

30. This ground of appeal was wholly without merit and was, as the Respondents aptly described it, a non-starter. The Appellant's own concessions and conduct comprehensively demolished any suggestion that the buy-back option was not validly exercised within the Validity Period.

31. We enumerate the relevant concessions and admissions below.

32. First, the Appellant's solicitors, by letter dated 1.3.2024, expressly admitted to paragraph 12 of the Statement of Claim — the very averment that the Respondents had, in early 2020 (within their respective Validity Periods), informed Vincent Ho as the nominated liaison that they wished to exercise the buy-S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 17 back option. This admission was made before trial and was binding on the Appellant.

33. Second, the Appellant's solicitors confirmed the same at a case management hearing before the Learned High Court Judge on 19.3.2024. The Appellant did not dispute this.

34. Third, the Appellant's solicitors again confirmed the position in chambers on 29.5.2024, immediately before trial commenced. Again, the Appellant raised no dispute.

35. Fourth, and remarkably, the Appellant's own Memorandum of Appeal (at paragraph 4) itself acknowledged that the Respondents exercised the buy-back option in early 2020. This was a concession made by the Appellant in the very document that initiated the present appeal.

36. Fifth, the contemporaneous documentary evidence adduced by the Respondents, none of which was challenged or contradicted, established beyond any doubt that the Appellant accepted the exercise of the buy-back option and took active steps towards completion. These included emails dated September–October 2020 from Vincent Ho and the Appellant's solicitors forwarding draft Buy-Back SPAs and Letters of Confirmation to the Respondents; professional fees invoices for the preparation of the Buy-Back SPAs issued by the Appellant's solicitors; official receipts acknowledging payment of those fees; a cheque drawn on the Appellant's solicitors' client S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 account for the deposit in respect of Parcel D; WhatsApp messages from the Appellant's personnel arranging the signing of the Buy-Back SPAs; and subsequent communications in 2021 reassuring the Respondents that completion remained forthcoming. All of these actions, taken by or on behalf of the Appellant, were inexplicable unless the Respondents had validly exercised the buy-back option within the Validity Period and the Appellant had recognised and accepted that exercise.

37. The Appellant's submission that the formal demand letters and the filing of suit were made after expiry of the Validity Period conflated the exercise of the buy-back option with the subsequent steps taken when the Appellant reneged on his obligations. The option was exercised in early 2020, within the Validity Period, through the nominated liaison, Vincent Ho. The formal Letters of Demand were issued in December 2021 after the Appellant had failed, despite his earlier acceptance and positive steps, to complete the buy-back. There was nothing in the Buy-Back Guarantees requiring formal written demand as a precondition to the exercise of the option, and the Appellant had never so argued. The authority in Macon Works & Trading Sdn Bhd v Phang Hon Chin & Anor [1976] 2 MLJ 177 (“Macon Works”), which concerned an unaccepted option with no time fixed for acceptance, is inapplicable on the facts.

38. Finally, there was no cross-examination of any of the Respondents' seven witnesses. The principles in Ng Siew Lan v John Lee Tsun Vui & Anor [2017] 2 MLJ 167 (Federal Court) S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 19 (“Ng Siew Lan”) and Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors [1995] 2 MLJ 770 (Court of Appeal) (“Aik Ming”) are clear: a party who declines to challenge testimony in cross-examination is taken to have accepted that testimony as incapable of being disputed. Where an Appellant elects not to testify and calls no witnesses, the evidentiary record stands entirely as adduced by the Respondents. The High Court was entitled to, and did, accept that evidence in full.

39. In the result, the High Court's finding that the Respondents validly exercised the buy-back option within the Validity Period was unimpeachable. For the aforesaid reasons, Ground 2 of the appeal failed before us. Issue 3 - Whether the Respondents suffered actual loss The Appellant's Contention

40. The Appellant submitted that the Respondents had not suffered any compensable loss because they remained the registered proprietors of the Parcels. Since no dispossession had occurred and the Respondents continued to own the properties, the Appellant argued that there was nothing to compensate. Reliance was placed on Section 74 of the Contracts Act 1950 as requiring proof of actual loss as a precondition to an award of damages. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 20 Our Analysis

41. This submission fundamentally misconstrued the legal basis and measure of the damages awarded by the High Court.

42. The damages awarded were not compensatory damages for dispossession or diminution in property value. They represented the guaranteed profit, namely, 23.07% of the net purchase price of each Parcel, which the Respondents would have received had the Appellant honoured his contractual obligation to buy back the Parcels at the Guaranteed Buy-Back Purchase Price. This was the bargain that the Appellant made and then broke. The Respondents' loss was the economic benefit of which they had been deprived by the Appellant's breach — the profit that was expressly guaranteed to them as the inducement for their investment.

43. Under Section 74 of the Contracts Act 1950, the party who suffers a loss due to breach of contract is entitled to compensation for any loss or damage which naturally arose in the usual course of things from the breach. Where a party guarantees a profit to another and then refuses to perform, the loss naturally arising in the ordinary course is precisely the profit so guaranteed. This is not a case where loss is speculative or has to be inferred; the quantum of the guaranteed profit was pre-determined by the parties in the Buy-Back Guarantees themselves and the Respondents were entitled to hold the Appellant to the bargain. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 21

44. The fact that the Respondents retained title to the Parcels was irrelevant to this analysis. The Respondents purchased the Parcels as an investment on the express premise that the Appellant would buy them back at a guaranteed profit. The Respondents were left holding properties they had intended to liquidate at a profit. They had been denied the liquidity and the guaranteed return that the Appellant promised. That was a real and present economic loss.

45. Accordingly, we found no error in the High Court's approach to damages. Ground 3 of the appeal also failed. Issue 4 - Abandonment of Specific Performance The Appellant's Contention

46. The Appellant contended that the Respondents, having abandoned their claim for specific performance at trial and electing to seek only damages, were not entitled to an award of damages in the absence of independent proof of actual loss. The Appellant invoked the principle in Hipgrave v Case (1885) 28 Ch D 356 (“Hipgrave”) and subsequent authorities to the effect that a claimant who abandons specific performance cannot automatically obtain damages, and must establish an independently sustainable claim for compensation. S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 22 Our Analysis

47. The law relied upon by the Appellant is not in dispute. We accepted that the principles in Hipgrave, Ardeshir H Mama v Flora Sassoon [1928] Privy Council (“Ardeshir”), and their Malaysian reception in Tan Meng San v Lim Kim Swee [1962] 1 MLJ 174 (Court of Appeal) (“Tan Meng San”) represent the general position: a plaintiff who elects not to pursue specific performance must independently prove actual loss to sustain a claim for damages, and damages are not a default remedy upon abandonment of an equitable claim.

48. However, this Court in Million Westlink Sdn Bhd & Anor v Maybank Investment Bank Bhd & Ors [2018] 4 MLJ 392 (“Million Westlink”) clarified that the above principle applies only where specific performance has been "truly abandoned" — that is, where the plaintiff definitively and unequivocally relinquishes the equitable remedy and falls back on damages alone. That case further recognised that where a plaintiff elects damages in place of specific performance, that election can itself represent a legitimate exercise of the court's equitable jurisdiction to award damages as a substitute for a remedy that would otherwise be available.

49. On the facts before us, the Respondents did not abandon their claim for specific performance at the outset. The claim for specific performance remained on the pleadings, and it was only in the course of the High Court proceedings, upon S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 23 confirmation by the Respondents' counsel, that the Court understood the Respondents to elect damages in lieu of specific performance — a remedy expressly pleaded in the alternative in the Statement of Claim. This was not a case of pure abandonment; it was an election between two pleaded alternatives.

50. Ground 4 of the appeal accordingly failed.

51. We observed that all four grounds of appeal, at their core, invited this Court to disturb findings of fact and mixed fact and law made by the Learned High Court Judge following a full trial. The standard of appellate intervention is well established: an appellate court will not interfere with findings of fact made at trial unless those findings are plainly wrong or against the weight of the evidence: see Gan Yook Chin & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 (Federal Court) (“Gan Yook Chin”). Where, as here, the trial judge had the advantage of hearing and observing witnesses, and where the Appellant chose not to testify and called no witnesses, leaving the Respondents' evidence wholly unchallenged, the threshold for appellate intervention was even higher.

52. We found no basis to interfere with the High Court's findings on the facts. The finding that the buy-back option was exercised within the Validity Period was supported by the Appellant's own concessions, by documentary evidence adduced without challenge, and by the testimonies of seven witnesses whose S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 24 evidence was not contradicted in cross-examination. The finding that the Respondents suffered loss flowing from the Appellant's breach was supported by the contractual framework and the evidence. The legal conclusions on locus standi, the nature of the assignments, and the award of damages were correct in law for the reasons set out above. Conclusion

53. For the foregoing reasons, this appeal was dismissed with costs.

54. The High Court's order awarding the Respondents damages of RM1,286,419.00 in lieu of specific performance was affirmed.

55. We ordered costs of this appeal in the sum of RM30,000.00 (subject to allocatur) to be paid by the Appellant to the Respondents.

56. The deposit paid by the Appellant shall be refunded to him. Dated this 19th day of June 2026 -sgd-ONG CHEE KWAN JUDGE COURT OF APPEAL S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 25 For the Appellant : Mahendran Shunmugam Sundaram (Messrs. Izauddin, Firdaus & Mahendran) For the Respondents :

1. Bryan Ho Jiann Yau; and

2. Kimberly Ng Wenn Mei. (Messrs. Ho Partnership & Neoh) S/N GpeW9lfLF0q/gucODcrsOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal