General Rule of Specific Performance

Specific performance can be defined as the right of the party to a contract in which
the other party had breached, to order the party who did the breach to perform the
obligation that he was supposed to do under the contract.1

It can be seen under section 4(b) of Specific Relief Act 1950 (SRA 1950) that
ordering a party to do an act that he is obligated to do under a contract is one of
the specific reliefs that can be granted. Chapter II of SRA 1950 lays down the
contracts which are specifically enforceable and this chapter consists of section 11
until section 29 of SRA 1950.

Specific performance generally may be granted if common law is unable to provide

adequate remedy (usually in the form of damages) as provided in the case of
Adderley v Dixon (1824) 1 Sim & St 607. Besides that, the remedy of specific
performance is unlikely to be accorded if the time of performance has not yet
arrived. This is generally the case however, the court in the case of Hasham v
Zenab [1960] A.C 316 granted this remedy before the time of completion as the
defendant was found guilty of anticipatory breach of contract. Specific performance
is also a remedy in personam.

Section 11(1) of SRA 1950 states that specific performance may be granted when
the act is wholly or partly of a trust, when there is no standard to determine the
pecuniary or monetary value of the act, when monetary compensation is
inadequate to make up for the act which was not performed or when pecuniary
reimbursement is unlikely to be able to be offered for the non-performance of the
act.

It should also be noted that s.11 mentions that granting of specific performance is
court’s discretion which is reaffirmed under s.21 SRA 1950 that the court is not
bound to do so merely because it is lawful but based on thorough and rational
deliberation. This is reiterated in the case of Ganam d/o Rajamany v Somoo s/o
Sinnah.2 Additionally, in Gan Realty Sdn Bhd & Ors v Nicholas & Ors, the court
held that the date (in filing the application to set aside the ex parte injunction) was
most important and there was a delay in doing so thus, the court refused to
exercise its discretion in favour of the defendants.

Section 22 SRA 1950 on the other hand lays down who may obtain specific
performance which includes any party to the contract, the representative in interest
or principal to the parties unless the contract states that the interest is not to be
assigned, those who are beneficially entitled in the case of a marriage settlement
or family dispute, a new company being amalgamated by contract between public
companies or the parties to a pre-incorporation contract of a public company.

1
'Legal Dictionary - Law.Com' (Law.com Legal Dictionary, 2017)
<http://dictionary.law.com/Default.aspx?selected=1993> accessed 26 January 2017
2
[1984] 2 MLJ 290
Section 11(1)(b) SRA 1950 states that specific performance may be granted where
there is no standard to determine the pecuniary value of the act purported to be
done. This can be seen in the case of Gan Realty Sdn. Bhd. & Ors v Nicholas
& Ors [1969] 2 MLJ 110 where specific performance was granted because the
shares were not obtainable in the open market. Unlike the case of H.A. Securities
Sdn. Bhd. v Ng Kong Yeam [1993] 4 CLJ 433 where the shares were obtainable
in the open market thus the court did not grant specific performance to the plaintiff
when the defendant refused to sell his shares. According to section 11(1)(c) SRA
1950, one of the grounds for the granting of specific performance is the inadequacy
of monetary compensation. This can be observed in Boo Kok Ngeak & Anor v
Lim Kian Hoe & Anor3, there was an effective sale and purchase agreement
which was dismissed by the vendor in order to demand additional purchase price.
The court allowed the application of specific performance in favour of the plaintiffs.

Apart from that, section 16 SRA 1950 prohibits specific performance of part of
contract unless it falls within the ambit of section 13, 14 or 15 respectively. Section
13 allows for specific performance where the part unperformed is small. In the case
of Kheng Chwee Lian v Wong Tak Thong [1983] 2 MLJ 320, the respondent
had bought a half share in a piece of land from the appellant, paid the purchase
amount and was subsequently prompted to sign another contract under which he
was apportioned a small lot of the land. The respondent claimed misrepresentation
had caused him to sign the second agreement. The court held that section 13 can
be invoked.

Section 14 allows for specific performance when the unperformed part is big if the
party bringing action relinquishes claim to further performance or compensation
for deficiency or loss suffered. Section 15 allows specific performance if the part is
an independent part which is not dependable on the other part which cannot be
performed. In City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs
Tanggungan Bhd [1985] 1 MLJ 285, the court held that the two contracts were
independent and could be enforced respectively according to the court’s discretion.

Moving on, what are the situations where specific performance is available? The
general rule is when pecuniary compensations are inadequate. Firstly, contract of
disposal of land. This is also laid down under s.11(2) of SRA 1950 where there
exists a presumption that monetary recompense is insufficient to compensate the
breach to a contract of immovable property. This principle can be observed in the
case of Adderley v Dixon (1824) 1 Sim & St 607 where the Court of Equity held
that damages by common law which is based on the monetary value of the land
may be unsatisfactory to the purchaser to whom the land may have a peculiar or
unique value. Another case on this matter is the case of Sekemas Sdn. Bhd. v
Lian Seng Co. [1989] 2 MLJ 155 where the applicant’s failure to pay the last
installment despite being given ample time to pay and the amount was reduced
caused the respondent to apply for specific performance. The Supreme Court held
3
[1998] 6 MLJ 727
that s.11(2) was not rebutted therefore, specific performance was granted.
Meanwhile, in contract for sale of goods, s.11(2) SRA 1950 usually presumes that
pecuniary compensation is adequate unless proven otherwise. Similar principles
are applicable to contract of shares as discussed earlier in section 11(1)(c) SRA
1950 and also in Gan Realty Sdn. Bhd. & Ors v Nicholas & Ors and H.A.
Securities Sdn. Bhd. v Ng Kong Yeam.

Next, the general position with regards to contract to lend money is that the plaintiff
can be adequately compensated by monetary means. There is an exception where
the damage is difficult to quantify. In Lee Chong Lim v Standard Chartered Bank
Malaysia Berhad [2004] 5 AMR 108, Kang Hwee Gee J said that contract to lend
money may still be specifically enforced according to the circumstances of the case.
Lastly, the contract for personal services. The learned judge in the case of Dayang
Nurfaizah Bte Awang Dowty v Bintang Seni Sdn Bhd & Ors4 mentioned that
section 20(1)(b) SRA 1950 has listed contract for personal services as not
enforceable thus, the defendant was unable to obtain specific performance against
the plaintiff.

Apart from that, s.19 SRA 1950 states that specific performance can be granted
although damages were agreed upon in case of a breach and the other party
agreed to it. Section 18 SRA 1950 on the other hand, allows the person suing for
specific performance to ask for damages as well (either as substitute or in addition
to specific performance). In other words, the existence of damages as
compensation does not prohibit the party from applying to the court for specific
performance. This is reaffirmed in the case of Ibrahim Bin Saidin & Anor v Hitam
Bin Ali5 where Wilson J had said the following,
“No authority has been quoted to me to show that where such a provision
appears in an agreement the pur-chasers of property are precluded from
claiming specific performance. In my opinion the provision does not preclude
a purchaser from claiming specific performance…”

To sum up, the granting of specific performance is by the discretion of the court
and generally a contract will not be specifically enforced where monetary
recompense is sufficient.

4
[2004] 2 MLJ 39
5
[1954] 1 MLJ 19
Bibliography

'Legal Dictionary - Law.Com' (Law.com Legal Dictionary, 2017)

<http://dictionary.law.com/Default.aspx?selected=1993> accessed 26 January
2017

Ganam d/o Rajamany v Somoo s/o Sinnah [1984] 2 MLJ 290

Gan Realty Sdn. Bhd. & Ors v Nicholas & Ors [1969] 2 MLJ 110

H.A. Securities Sdn. Bhd. v Ng Kong Yeam [1993] 4 CLJ 433

Boo Kok Ngeak & Anor v Lim Kian Hoe & Anor [1998] 6 MLJ 727

Kheng Chwee Lian v Wong Tak Thong [1983] 2 MLJ 320

City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985]
1 MLJ 285

Adderley v Dixon (1824) 1 Sim & St 607

Sekemas Sdn. Bhd. v Lian Seng Co. [1989] 2 MLJ 155

Lee Chong Lim v Standard Chartered Bank Malaysia Berhad [2004] 5 AMR 108

Dayang Nurfaizah Bte Awang Dowty v Bintang Seni Sdn Bhd & Ors [2004] 2 MLJ
39

Ibrahim Bin Saidin & Anor v Hitam Bin Ali [1954] 1 MLJ 19