DPI TECHNOLOGY SDN BHD v 1. ) HO FOO 2. ) SENG SWEE YIN

Case Significance

Holds that a vendor's breach of a consent judgment and retention of the deposit amounted to fraudulent misrepresentation entitling the purchaser to terminate the Sale and Purchase Agreement, recover the deposit and claim consequential rental losses.

This High Court (Shah Alam) decision determines, after a full trial, a claim arising from a Sale and Purchase Agreement dated 3 March 2010 concerning a leasehold vacant land measuring about 2,380 square metres in the Ulu Langat District, Selangor. The plaintiff, a company trading in computer and electronic products, entered into the agreement with the defendants, the registered proprietors of the land. In the action the plaintiff sought, among other things, termination of the agreement, refund of the deposit, damages and other monetary consequential reliefs. The matter proceeded to a full trial, at which the court heard witnesses for both parties, considered the documentary evidence and read the written submissions.

On a balance of probabilities the court found in favour of the plaintiff. It held that the defendants' conduct in relation to a consent judgment, together with the continued retention of the deposit sum, constituted a fraudulent misrepresentation to the plaintiff, and that such conduct entitled the plaintiff to terminate the Sale and Purchase Agreement pursuant to its termination clause, and, or alternatively, by reason of fundamental breach or non-compliance with the consent judgment.

Because the termination was lawful, the remedies sought were allowed. The court was satisfied that the plaintiff had established its case on a balance of probabilities and that the defendants had breached both the consent judgment and the Sale and Purchase Agreement itself, so that the plaintiff was entitled to terminate the agreement, to a refund of the deposit, and to the rental payments suffered as consequential losses flowing from the defendants' breach. The court allowed the plaintiff's claim in the specified prayers of the statement of claim. The judgment illustrates how a breach of a consent judgment and the retention of a deposit, characterised as fraudulent misrepresentation, can justify termination of a sale and purchase agreement and support a claim for the refund of the deposit and consequential losses.