1. ) FAIRUZ EDZUAN BIN JAMALUDIN 2. ) INTAN AZURA BT MD DESA v 1. ) CITYVILLA MANAGEMENT SDN. BHD. 2. ) THAM CHENG LOCK 3. ) THAM GIAP CHAI

Case Significance

Illustrates the requirement that a party elect between inconsistent remedies, such as rescission with the return of property and enforcement of the purchase price, and the rule that a party is confined to its pleaded case and cannot succeed on new, unpleaded arguments.

This High Court decision at Kuala Lumpur concerns a dispute over a sale and purchase agreement for shares in a company, and the doctrine of election of remedies. The plaintiffs sought a declaration that the agreement, under which they had sold their shares to the first defendant, was terminated, null and void by reason of the first defendant's failure to pay the purchase price. In their prayers, however, they sought both the return of the sold shares and payment of the purchase price. The defendants, comprising the corporate purchaser and two individuals, counterclaimed for RM5,000,000, alleging that the plaintiffs had damaged their reputation and defamed them by concealing certain facts in the agreement. The court found the plaintiffs' case to be fundamentally flawed. By seeking simultaneously to recover the shares and the purchase price, the plaintiffs had failed to make an election between inconsistent remedies: they could not have both the property back and its price, and the combination produced an inconsistency in the relief claimed that might also amount to unjust enrichment. Turning to the counterclaim, the court found that the defendants had, on their pleadings, effectively abandoned their pleaded case in defamation and were instead advancing new issues that had not been pleaded, so that the counterclaim could not succeed for want of any pleaded basis. On that analysis the court dismissed both the plaintiffs' action and the defendants' counterclaim, making no order as to costs. The court's reasoning underscores that a plaintiff who treats a contract as at an end for the other side's default must choose between affirming and rescinding it, and cannot pursue relief that presupposes both positions at once. The judgment is a useful illustration of the requirement that a party elect between inconsistent remedies, such as rescission with the return of property and enforcement of the price, and of the rule that a party is confined to its pleaded case and cannot succeed on unpleaded arguments.