JUDGMENT

Raus Sharif CJ:

Introduction

[1] This is an appeal by the appellants (defendants in the High Court) against the decision of the Court of Appeal given on 9 August 2016 which allowed the respondent's (plaintiff in the High Court) appeal and reversed the decision of the High Court given 27 May 2015 in dismissing the respondent's claim.

[2] The crux of the matter before the High Court and the Court of Appeal which came to opposite conclusions was whether the appellants were entitled to forfeit the total sum of RM7,329,629.00 paid by the respondent pursuant to several agreements between the parties for the sale and purchase of a property.

Background Facts

[3] The 1st and 2nd appellants are the directors and sole shareholders of the 3rd appellant which is at all material times the registered proprietor of a landed property held under Geran 212028 Lot No. 63374 Bandar Glenmarie, Daerah Petaling State of Selangor Darul Ehsan ("the Property").

[4] The respondent is a Chinese national who entered into a sale and purchase agreement dated 20 August 2009 ("the 1st SPA") with the 3rd appellant to purchase the Property for RM27 million. To this end, a sum of RM2.7 million was paid by the respondent as deposit towards the purchase price of the Property.

[5] Despite the 1st SPA falling through due to the respondent's non-performance, she was still desirous of acquiring the Property and the parties entered into negotiations over several months which resulted in the execution of the following instruments with the collective purpose of effecting the sale of the Property to the respondent:

i. a deed of revocation, revoking the 1st SPA;

ii. a share sale agreement between the respondent and the 1st and 2nd appellants for the entire shareholding in the 3rd appellant ("the SSA"). The consideration for the SSA was the purchase price contained in the 1st SPA;