QUESTION 1

Rondure Development Sdn Bhd (hereinafter known as "Rondure") is the registered proprietor of a parcel of land known as PT 6779 - PT 8750 Mukim Setinggi District of Kelang Selangor (hereinafter called as "the said land"). On 25^th March 2016, Rondure entered into a sale and purchase agreement with MountGold Development Sdn Bhd (hereinafter known as "MountGold") for the sell and purchase of the said land and developing it into a housing project of building condominiums at the price of RM29m. Rondure obtained a Development Order from the local authority on 15^th May 2016 and the project to build the condominiums was launched in July 2016.

It was agreed by both parties in the agreement that the said land will only be transferred to MountGold after they paid RM25m to Rondure. MountGold performed the contract and paid the said sum to Rondure on 2^nd July 2017 leaving the balance of unpaid price of another RM4m.

The parties then entered into a Supplementary Agreement (hereinafter called as "SA") dated 1^st September 2017 regarding the payment of the balance purchase price. It was provided in the SA that, the balance of RM4m is to be paid to Rondure, in the form of, MountGold transferring and delivering 5 units of the condominium in the project worth RM4m to Rondure within 36 months from the date of the SA (1^st September 2017). The terms of the SA, inter alia, were as follows: -

Clause 1: Should the purchaser fail to meet the deadline of 36 months; the appellant was liable to pay interest to the vendor at the prescribed rate of 8% pa.

Clause 1.1: The Sale and Purchase Agreement dated 25^th March 2016 entered between the parties and this Supplement Agreement are to be read together as a single document.

Clause 2: In the event of a conflict in relation to the terms and conditions in the Sale and Purchase Agreement and the Supplementary Agreement, the terms and conditions of the Supplementary Agreement shall prevail.

Clause 13: Time is of the essence of the agreement.

It is common ground that the 36-month dateline ends on 31^st August 2020. However, the Certificates for Occupation for all the condominium units in the project were only issued in December 2020. On this ground, it was argued by Rondure that MountGold had failed to transfer and deliver the condominium units worth RM4 million thereby entitling them to end the contract for non-performance on part of MountGold.

Rondure thereafter issued their letter of rescission of the agreement they entered with MountGold on 20^th September 2020. However, there is no allegation or evidence of refusal on the part of MountGold to transfer the condominium units as agreed. Also, there is no allegation or evidence that the condominium units will never be completed at all by them or that the appellant had abandoned the development project.

REQUIRED:

Advise Rondure on whether there is any ground for them to end the contract on the basis of the failure of performance by MountGold.(30 marks)

QUESTION 2

Tuai Rumah Embong is the representative of a community that lives in a longhouse in the Sungei Rambai area. The community has communal customary rights over a parcel of customary land in Sabah.

On 28^th September 2019, Tuai Rumah Embong entered into a written agreement with James Yong. That agreement, which was duly executed and stamped, reads as follows: -

Agreement is hereby made between James Yong of Sungei Siput and Tuai Rumah Embong anak Paman of Tanjong Lahab, both at Sibu for Embong's Communal Farming Land Forest at Sungei Rambai, Sibu. They agree to the following terms:

i.All the timbers on the said land are sold to James Yong at a price of RM100,000, and the said amount is promised to be paid in three instalments.

ii.James Yong must pay RM30,000 to Tuai Rumah Embong instantly after the signatures, which is taken as part of the said sum and is confirmed that Tuai Rumah Embong should not sell his land timbers to anybody else.

iii.If Tuai Rumah Embong sells the timbers to other person or authority, all the expenses claimed by James Yong should be refunded by Tuai Rumah Embong

iv.James Yong has full responsibility for the timber business; Tuai Rumah Embong has not the least right to interfere.

The said land falls under the category of land that was regulated under the Forests Ordinance, 1960 where it was a common ground for anybody who desired to work the timber to firstly obtain a permit or license from the forests department. Both James Yong and Tuai Rumah Embong were not newcomers to the business of the sale and extraction of timber. Nonetheless, the permit or legal permission to extract timber from the said land has already been given to Hua Syn Sawmill and Tuai Rumah Embong had already received RM40,000 from Hua Syn Sawmill as a deposit.

James Yong alleged there is a breach of contract by Tuai Rumah Embong and demanded the return of deposit and damages for work and expenses incurred by him in applying the license. Further, he argued, if only Tuai Rumah Embong did not give the said land to Hua Syn Sawmill, or else, informed him earlier that he had already contracted with Hua Syn Sawmill, all these would not happen.

In his defence, Tuai Rumah Embong argued, since the obtaining of the permit was not stated anywhere in their agreement, then no term was ever breached by him. In fact, they did agree earlier that only James Yong has the full responsibility for the timber business; whereby he only has the least right to interfere. Thus, this is not his fault and no need for him to pay any damages and return the deposit.

REQUIRED

Discuss whether there is a breach of terms of the contract by Tuai Rumah Embong based on the given situation?(20 marks)