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BREACH OF CONTRACT – ACQUIESCENCE AND CLEAN HANDS: COURT OF APPEAL BARS PURCHASER FROM ENFORCING SPA

1. Summary and Facts

Vila Mekar Sdn Bhd v Wong Yie Dee [2025] MLJU 2104 concerns a Sale and Purchase Agreement (“SPA”) between Vila Mekar Sdn Bhd (Appellant/Developer) and Wong Yie Dee (Respondent/Purchaser) for the purchase of a double-storey terrace house priced at RM225,000. The Respondent paid a 5% deposit of RM11,250 and secured a Federal loan of RM180,000 from the Bahagian Pinjaman Perumahan (BPP). Under the SPA, the Appellant was required to deliver vacant possession within the stipulated period, but failed to do so. The Respondent then sought revocation of the SPA, while the Appellant insisted that the Respondent first pay compensation pursuant to the SPA before any revocation could be processed. Subsequently, BPP issued a notice cancelling the Respondent’s loan. The Appellant thereafter filed an Originating Summons to remove the caveat lodged by the Respondent over the property and served a letter purporting to terminate the SPA. The High Court dismissed the Developer’s application but allowed the Purchaser’s counterclaim for specific performance. The Developer appealed. The Appellant appealed against the High Court’s dismissal of the OS and allowed the purchaser’s claim for specific performance of SPA.

2. Legal Issues

• Whether the Purchaser had validly terminated the SPA in 2010.
• Whether the Purchaser’s failure to pay progress claims and termination of the BPP loan amounted to repudiation.
• Whether the Purchaser was entitled to equitable relief of specific performance.

3. Court’s Findings

• The Court of Appeal held that the Purchaser’s initial termination was invalid as he failed to comply with the SPA’s conditions (payment of 10% compensation).
• By tolerating the Developer’s delay and continuing under the SPA, the Purchaser acquiesced and could not later rely on delay as a ground for termination.
• The Purchaser’s failure to pay progress claims and unilateral termination of the BPP loan constituted a clear repudiation of the SPA.
• As specific performance is an equitable remedy, the Purchaser’s own breaches and conduct barred him from obtaining relief.
• The Court of Appeal allowed the Developer’s appeal, ordered removal of the Purchaser’s caveat, and set aside the High Court’s order for specific performance.

4. Practical Implications

This judgment reinforces that a purchaser cannot terminate without fulfilling stipulated conditions. Purchasers who tolerate delay lose the right to later rely on it as a ground for rescission. A purchaser in breach cannot seek equitable relief such as specific performance.

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