Pembinaan Lercast Sdn Bhd & Anor v Chek Sam binti Salleh

Appellant(s):

• Pembinaan Lercast Sdn. Bhd
• Lercast Aldeway Sdn. Bhd.

Respondent(s): Chek Sam Binti Salleh

• YA Datuk Supang Lian
• YA Dato' Lim Chong Fong
• YA Dato Alwi Bin Abdul Wahab

• The respondent, an elderly landowner, entered into a Joint Venture Agreement (JVA) with the first appellant (developer) and a Manager Agreement (MA) with both appellants for the development of her land, which was occupied by squatters.
• The project experienced significant delays, leading the respondent to initially terminate the agreements in 2017, but a Supplemental Agreement (SA) was subsequently executed in 2018 to revive the project and address the squatter issue.
• Despite the SA, the project, particularly the relocation of squatters and obtaining vacant possession, remained stalled, prompting the respondent to issue a second termination notice in October 2021 and initiate legal proceedings.

• Whether the appellants were in fundamental or repudiatory breach of the JVA and related agreements due to the prolonged delays in project development and failure to secure vacant possession of the land.
• Whether the respondent's unilateral termination of the agreements was valid, particularly in light of clauses in the SA that stipulated termination could only occur by mutual agreement.
• Whether the High Court had correctly appreciated the evidence regarding the allocation of responsibility for clearing squatters and the impact of external factors, such as the Movement Control Order, on project progress.

• The Court of Appeal allowed the appeal, finding that the High Court erred in concluding that the appellants' delay was inordinate and inexcusable, as the project's completion date was not ascertainable due to unfulfilled prerequisites like obtaining vacant possession and necessary approvals.
• The Court determined that the difficulties in relocating squatters were contributed to by both parties, and the appellants could not be solely blamed for failing to perform subsequent obligations before vacant possession was secured.
• The Court held that clauses 1 and 27 of the SA, which superseded conflicting provisions in the JVA, mandated mutual agreement for termination, rendering the respondent's unilateral termination wrongful; however, acknowledging the project's non-viability, the Court exercised its powers to terminate all agreements.