CATAJAYA SDN BHD SHOPPOINT SDN BHD & 2 LG

CATAJAYA SDN BHD SHOPPOINT SDN BHD & 2 LG

Termination clauses must be construed strictly but in context of the contract as a whole; where the agreement prescribed a 30-day cure/notice mechanism (Section 12) termination under Section 11 without complying with that prerequisite was ineffective; therefore the purported termination was invalid and appeal allowed.

Citation
02(f)-49-05/2019(B) (Mahkamah Persekutuan)
Parties
Appellant: Catajaya Sdn Bhd; 1st Respondent: Shoppoint Sdn Bhd; 2nd Respondent: Tee Huat; 3rd Respondent: Tee Chee Chong
Court
f
Jurisdiction
Malaysia
Judgment Date
17 December 2020
Case Number
02(f)-49-05/2019(B) (Mahkamah Persekutuan)
Procedural Posture
Civil Appeal / Federal Court Final Judgment (appeal Allowed)
Outcome
Appeal allowed; orders of the Court of Appeal and High Court set aside; costs awarded to Appellant RM150,000 subject to allocatur
Legal Topics
Termination Clause Interpretation, Construction of Contracts, Due Diligence Obligations, Time Is of the Essence, Use of Headings in Contract, Forfeiture of Deposit, Removal of Caveat
Source Language
Malay/English
Contract Law Company Law Property Law Civil Procedure Equity Termination Clause Interpretation Construction of Contracts Due Diligence Obligations +4 more

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Parties

Catajaya Sdn Bhd

Appellant

Shoppoint Sdn Bhd

1st Respondent

Tee Huat

2nd Respondent

Tee Chee Chong

3rd Respondent

Procedural Posture

Civil Appeal / Federal Court Final Judgment (appeal Allowed)

Legal Issues

  1. 1 Whether termination clauses should be strictly construed
  2. 2 Whether contract headings can be used in interpretation
  3. 3 Whether Section 11 could be invoked without complying with Section 12 cure notice requirement

Ratio Decidendi

Termination clauses must be construed strictly but in context of the contract as a whole; where the agreement prescribed a 30-day cure/notice mechanism (Section 12) termination under Section 11 without complying with that prerequisite was ineffective; therefore the purported termination was invalid and appeal allowed.

Court Disposition

Appeal allowed; orders of the Court of Appeal and High Court set aside; costs awarded to Appellant RM150,000 subject to allocatur

Orders

  • Appeal allowed
  • Orders of the Court of Appeal and High Court set aside