1. ) LIM SWEE CHOO 2. ) CHIAM ENG HUAT @ CHIAM ENG HONG ONG KOH HOU @ WON KOK FONG

1. ) LIM SWEE CHOO 2. ) CHIAM ENG HUAT @ CHIAM ENG HONG ONG KOH HOU @ WON KOK FONG

The Federal Court allowed the Plaintiffs' appeals, holding (i) the doctrine of total failure of consideration is a restitutionary doctrine tested by whether the promisor performed any part of the contractual duty for which payment was made (Stocznia), not by whether the promise was performed 'in its entirety' as stated in Berjaya Times Square; (ii) restitution is available only after the contract has ceased to govern the parties' rights; (iii) Defendant with unclean hands and whose subsequent SPA with DA Land was declared illegal could not invoke restitution to recover RM23,000,000; and (iv) there was no total failure of consideration as Plaintiffs had performed/part‑performed under the...

Citation
02(f)-22-07/2024(W) (Mahkamah Persekutuan)
Parties
Appellant/plaintiff: Lim Swee Choo; Appellant/plaintiff: Chiam Eng Huat @ Chiam Eng Hong; Respondent/defendant: Ong Koh Hou @ Won Kok Fong
Court
f
Jurisdiction
Malaysia
Judgment Date
8 April 2025
Case Number
02(f)-22-07/2024(W) (Mahkamah Persekutuan)
Procedural Posture
Civil Appeal / Appeal to the Federal Court (final Determination)
Outcome
Plaintiffs' appeals allowed; Court of Appeal orders ordering refund of RM23,000,000 and dismissing Plaintiffs' claim set aside; Defendant's counterclaim for RM23,000,000 dismissed; Plaintiffs' entitlement to RM2,500,000 upheld in principle; costs awarded to Plaintiffs
Legal Topics
Total Failure of Consideration, Rescission and Termination, Assignment of Contractual Rights, Illegality (moneylending), Unclean Hands/unconscionability, Contracts Act Ss 40 and 56, Evidence Act S103
Source Language
Malay/English
Contract Law Restitution and Unjust Enrichment Equity and Equitable Remedies Property Law Statutory Interpretation Evidence Law Total Failure of Consideration Rescission and Termination +5 more

Case Brief

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Parties

Lim Swee Choo

Appellant/plaintiff

Chiam Eng Huat @ Chiam Eng Hong

Appellant/plaintiff

Ong Koh Hou @ Won Kok Fong

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal to the Federal Court (final Determination)

Legal Issues

  1. 1 Whether the doctrine of total failure of consideration permits restitution where illegality or claimant misconduct is present
  2. 2 Whether total failure of consideration can be invoked where there has been part‑performance or benefit received
  3. 3 Whether Berjaya Times Square correctly stated the test for total failure of consideration or wrongly conflated rescission/termination with restitution

Ratio Decidendi

The Federal Court allowed the Plaintiffs' appeals, holding (i) the doctrine of total failure of consideration is a restitutionary doctrine tested by whether the promisor performed any part of the contractual duty for which payment was made (Stocznia), not by whether the promise was performed 'in its entirety' as stated in Berjaya Times Square; (ii) restitution is available only after the contract has ceased to govern the parties' rights; (iii) Defendant with unclean hands and whose subsequent SPA with DA Land was declared illegal could not invoke restitution to recover RM23,000,000; and (iv) there was no total failure of consideration as Plaintiffs had performed/part‑performed under the...

Court Disposition

Plaintiffs' appeals allowed; Court of Appeal orders ordering refund of RM23,000,000 and dismissing Plaintiffs' claim set aside; Defendant's counterclaim for RM23,000,000 dismissed; Plaintiffs' entitlement to RM2,500,000 upheld in principle; costs awarded to Plaintiffs

Orders

  • Allow Plaintiffs' appeals
  • Set aside Court of Appeal judgment ordering Plaintiffs to refund RM23,000,000 to Defendant