Yu Kuan Chon v Franco Chan Yoong Jurch & Ors

Appellant(s): Yu Kuan Chon

Respondent(s):

• Franco Chan Yoong Jurch
• Wong Wai Yin
• Sin Lee Pin
• Lau Poh Cheok

• YA Datuk Mohamed Zaini Bin Mazlan
• YA Dato' Ahmad Kamal Bin Md. Shahid
• YA Dato' Ong Chee Kwan

• The respondents purchased residential property parcels at 188 Suites, Kuala Lumpur in 2014–2015, financing their purchases via bank loans secured by Deeds of Assignment in favour of their respective financier banks.
• As part of a broader investment package, the appellant personally executed Buy-Back Guarantees undertaking to repurchase the parcels at a guaranteed profit of 23.07% of the net purchase price, exercisable between the 3rd and 5th year from vacant possession.
• The respondents exercised the buy-back option in early 2020 through a nominated liaison; the appellant acknowledged this and took initial steps towards completion but ultimately failed to complete the buy-back, prompting the respondents to sue for specific performance and, ultimately, damages in lieu thereof.

• Whether the respondents had locus standi to bring the action notwithstanding the absolute assignment of their SPA rights to the financier banks, and whether the absence of prior written bank consent was fatal to the claim.
• Whether the buy-back option had lapsed before being validly exercised, given that formal demand letters and the writ were issued after the expiry of the validity periods.
• Whether the respondents suffered compensable loss under s.74 of the Contracts Act 1950 when they retained title to the parcels, and whether their election of damages in lieu of specific performance (rather than pursuing specific performance to judgment) was legally sustainable.

• On locus standi, the Court held that on a true construction of the Deeds of Assignment, the parties intended the assignment purely as security, leaving the respondents' litigation rights intact; further, s.22C of the HDA independently and expressly confers standing on homebuyers to sue notwithstanding an absolute assignment, overriding any contrary contractual term — the notice requirement under s.22C is procedural, not substantive, and only the financier (not the defendant) may invoke non-compliance, particularly where the banks had been notified and raised no objection.
• On the validity of the option exercise, the Court found the ground wholly without merit: the appellant's own solicitors had admitted in pre-trial correspondence and case management that the option was exercised in early 2020 within the validity periods, the appellant's own Memorandum of Appeal conceded this, and contemporaneous documentary evidence (draft Buy-Back SPAs, fee invoices, WhatsApp messages) confirmed the appellant's acceptance — the formal demand letters merely followed the appellant's subsequent failure to complete.
• On damages, the Court held that the award of RM1,286,419.00 representing the contractually guaranteed profit was not speculative compensatory damages but the direct economic benefit of which the respondents were deprived by the appellant's breach; further, the respondents had not "truly abandoned" specific performance but had elected between two pleaded alternatives, so the Hipgrave principle did not bar the award — the appeal was dismissed with costs of RM30,000.00.