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Case Update: Developer's Double Dealings Unveiled

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31 May 2024

LAW ON CONVEYANCING
Sale & Purchase Agreement – Housing Development Act – Specific Performance – Authority to Sign

Euroland & Development Sdn Bhd v Supreme Code Land Sdn Bhd
Civil Appeal No. W-02(NCVC)(W)-1248-09/2020 | Court of Appeal
- see the grounds of judgment here

Facts Euroland & Development Sdn Bhd ('the Appellant') developed a residential condominium, with Supreme Code Land Sdn Bhd ('the Respondent') purchasing four units through Sale and Purchase Agreements (SPAs), which the Appellant supposedly denied. The SPAs for these Units were prepared by the Appellant’s Panel Solicitor. Despite the Respondent's payments to the Appellant's solicitors as stakeholders, in January 2019, when the Respondent's representative attended the Appellant's office to inquire about the progress of these Units and estimate the delivery of vacant possession, the Respondent was shocked when informed by the Appellant’s representative that the Respondent's name was not listed as the buyer for these Units. Subsequently, the Respondent's solicitors sent letters to both the Appellant and the Appellant’s Panel Solicitor, seeking confirmation. The Appellant's Panel Solicitors replied confirming they received instructions from the Appellant to proceed with the SPAs and release the purchase funds. Despite this confirmation, the Appellant did not fulfil their obligations, prompting the Respondent to take this legal action against them. In the Appellant’s defence, the Appellant said that according to the Appellant’s records, the units were sold to bona fide third parties who complied with the Appellant's standard operating procedure (SOP). The units were not sold to the Respondent due to alleged non-compliances with SOP and made claims that the Respondent was associated with a gambling junket. The learned Judicial Commissioner decided in favour of the Respondent, hence the current appeal.

Issue 1. Whether the Sale and Purchase Agreements for the units are valid?

Held In dismissing the appeal, YA Dato’ Azmi Bin Ariffin in delivering the decision of the Court of Appeal held that the SPAs were valid based on the testimonies from the Appellant’s panel solicitors and the documentary evidence that supported the fact  that the Respondent had entered into legitimate SPAs for the units. Further, the Respondent had made payments as stipulated in these agreements. The Appellant's claim that the Respondent did not follow the SOP was rejected by the Court of Appeal as the Court found no clarity or transparency in the Appellant’s SOP regarding unit sales. The Court of Appeal held that the Respondent, having completed the necessary payments and documentation, should not be held accountable for the Appellant’s internal procedural lapses. As for the Appellant’s assertion that receipts were forged and their claim of the Respondent being associated with a gambling junket, the Court of Appeal dismissed these allegations as attempts to evade liability and found no substantial evidence to support these claims. The Court of Appeal found that the trial judge's decision was well-supported by the evidence. There was no significant error in the trial judge’s assessment that would warrant overturning the decision

Zul Rafique & Partners
{31 May 2024}

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