Parimala Devi A/p Thangamoney v Theyagarajan A/l Muniandy

Case Significance

Distinguishes a genuine Sale and Purchase Agreement from an alleged disguised unlicensed loan, holds the vendor in breach for failing to complete, and grants specific performance with consequential orders directing transfer, redemption and discharge of the charge.

This High Court (Pulau Pinang) decision concerns a claim for specific performance of a Sale and Purchase Agreement and a counterclaim alleging that the transaction was in truth an unlicensed moneylending arrangement. The plaintiff sought an order of specific performance requiring the defendant to transfer to her a shophouse standing on land in Kulim, Kedah, in accordance with the terms of a Sale and Purchase Agreement dated 3 July 2017. By way of counterclaim the defendant sought a declaration that the agreement was not a valid sale and purchase transaction, and that the sum received from the plaintiff was in fact an unlicensed loan of money.

As the court framed the matter, the principal issue was whether the Sale and Purchase Agreement dated 3 July 2017 was a valid and enforceable agreement involving the sale of the property by the defendant to the plaintiff, or was in substance an unlawful moneylending transaction — a loan of money made without a licence in contravention of the law relating to licensed moneylending. On the background facts, the plaintiff had entered into the agreement to purchase the property at an agreed price of RM400,000, had paid RM170,000 as a deposit on 5 July 2017, and had lodged a caveat over the property through her solicitor to protect her interest, with the defendant also having agreed to an extension.

On the evidence, the court was satisfied that the defendant had breached his contractual obligations under the Sale and Purchase Agreement by failing to complete the sale and transfer of the property as agreed. It accordingly allowed the plaintiff's claim, ordering specific performance by the defendant to transfer title to the property to the plaintiff, together with consequential orders directing the relevant land authorities to give effect to the transfer, directing the chargee bank to accept redemption and to discharge its charge, and providing for general damages to be assessed. The judgment illustrates how a court distinguishes a genuine sale and purchase from a disguised moneylending transaction and enforces the former by specific performance.