NG SOON HUAT v TEH HONG ANN

Case Significance

Grants summary judgment for specific performance of a share sale agreement under section 11(1)(c) of the Specific Relief Act 1950 where no triable issue was raised, requiring payment of the RM4,000,000 balance and completion, and enforcing the ancillary director's-fee obligation.

This High Court (Kuala Lumpur, Commercial Division) decision concerns an application for summary judgment seeking specific performance of a share sale agreement. The plaintiff applied for summary judgment for, among other reliefs, specific performance of a Share Sale Agreement dated 1 September 2023 for the sale of 119,815 shares held by the plaintiff in a company, requiring the defendant to pay the remaining balance of RM4,000,000 within fourteen days of judgment and the parties to complete the sale in accordance with the agreement. In the alternative the plaintiff sought damages to be assessed for breach of contract, together with an order that the defendant procure the payment of director's fees at RM2,000 per month from August 2024 until completion, and interest on the outstanding balance.

The issues the court addressed included whether damages were to be assessed for specific performance in addition to or in substitution for breach of contract, whether the defendant had raised any triable issue such as to render the grant of summary judgment unjustified, and whether the plaintiff was entitled to specific performance, engaging section 11(1)(c) of the Specific Relief Act 1950.

The court concluded that it would be just and equitable to grant summary judgment for specific performance of the Share Sale Agreement. It had no hesitation in granting an order in terms of the prayers in the application, with costs, this including the obligation on the part of the defendant to procure payment of the director's fee, which the defendant did not dispute. In reaching that conclusion the court considered the circumstances in which a contract may be discharged, noting the principle that a contract may be frustrated where, after its formation, a change of circumstances renders it legally or physically impossible to perform. The judgment illustrates the grant of summary judgment for specific performance of a share sale agreement under section 11(1)(c) of the Specific Relief Act 1950 where no triable issue is raised, and the enforcement of ancillary obligations such as the payment of director's fees.