Case Analysis: Siow Leong Min & Anor v. Loh Lian Loy & Anor [2012] 5 MLRH 405 HC
Court: High Court, Shah Alam Judge: Nor Bee Ariffin JC Date of Judgment: 31 March 2011
1. Background and Facts
The plaintiffs entered into a Sale and Purchase Agreement (SPA) on 5 August 2004 to buy a terrace house in Petaling, Selangor, for RM570,000, paying a deposit of RM57,000. Because the registered owner (PKNS) refused a direct transfer to the purchasers, the parties executed a Supplementary Agreement (SA) on 7 February 2005 to vary the terms.
The SA established specific conditions precedent (CPs):
- First Consent: The defendants were to obtain state authority consent to transfer the property into their own names.
- Second Consent: Within six months of receiving the first consent, the defendants were to obtain consent to transfer the property to the plaintiffs.
- Completion: The balance purchase price was due within three months of the plaintiffs’ solicitors receiving the second consent.
The defendants obtained a second consent dated 30 March 2006 and served it on the plaintiffs on 21 April 2006, fixing the completion date for 20 July 2006. However, this consent contained a material error: it listed the title number as HS(D) 101920 instead of the correct HS(D) 201920. The plaintiffs failed to pay by 20 July, and the defendants terminated the agreement and forfeited the deposit on 21 August 2006.
2. Key Legal Issues
- Whether the payment deadline should be calculated from the service of the defective consent (21 April 2006) or the rectified consent (14 September 2006).
- Whether the termination of the SPA and the forfeiture of the RM57,000 deposit were valid.
- Whether the agreement had already automatically lapsed in June 2005 because the second consent was not obtained within the original six-month window.
3. Judicial Findings
The High Court ruled in favor of the plaintiffs based on the following:
- Nature of the Contract: The SPA, as varied by the SA, was a contingent contract under s. 32 of the Contracts Act 1950. It could only be enforced once the CPs—specifically a valid second consent—were satisfied.
- Invalidity of Defective Consent: The error in the title number was not a mere clerical slip; HS(D) 101920 referred to an entirely different property. The responsibility to provide an unequivocal and valid consent rested solely with the defendants. Service of a defective document did not satisfy the CP.
- Timeline for Completion: Since the CP was only satisfied when the rectified consent was served on 14 September 2006, the three-month completion period only began on that date. Therefore, the defendants’ termination on 21 August 2006 was premature and unlawful.
- Acquiescence and Estoppel: The court rejected the defendants’ alternative argument that the contract had lapsed in June 2005. By continuing to apply for consent in 2006 and demanding the balance price, the defendants had elected to allow the agreement to continue. They were estopped from later claiming the contract was already void.
4. Conclusion and Relief
The court allowed the plaintiffs’ claim and ordered specific performance of the SPA. Additionally, the court ordered that rentals of RM900 per month paid by the plaintiffs while they occupied the house (from November 2006 to November 2010) be deducted from the balance purchase price due to the defendants.
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified Advocate & Solicitor for your specific legal needs.
