CASE_Expo Holdings V_Saujana Triangle

7/31/2019 CASE_Expo Holdings V_Saujana Triangle

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Malayan Law Journal Unreported/2009/Volume /Expo Holdings Sdn Bhd v SaujanaTriangle Sdn Bhd - [2009] MLJU 1600 - 30 November 2009

[2009] MLJU 1600

Expo Holdings Sdn Bhd v Saujana Triangle Sdn Bhd

HIGH COURT (SHAH ALAM)

Dato' Zaleha Binti Yusof, JC

ORIGINATING SUMMONS NO 24-1839-2008

30 November 2009

Sree Harry (Sree Harry & Co.)

Alister Dave (Abd Halim Ushah & Associates)

Dato' Zaleha Binti Yusof, JC

GROUNDS OF JUDGMENT

Enclosure (1) is an Originating Summons filed by the plaintiff against the

defendant for, inter alia, the following order:


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a

i A declaration that the Supplementary

Agreements dated 6.3.2002 made

between the plaintiff and the defendant("the Supplementary Agreements") are

part of the statutory contract namely

the Sale and Purchase Agreements

dated 6.3.2002 made between the

plaintiff and defendant ("the Sale and

Purchase Agreements"); and

ii A declaration that the actual purchase

price under each of the statutory

contract namely the Sale and Purchase

Agreements is RM 118,000.00; and

b That the defendant pays the plaintiff liquidated damages to be

calculated from day to day at the rate of ten per centum (10%) per

annum of the purchase price arising from the defendant's failure to

hand over vacant possession of the apartment units to the plaintiff

within the time prescribed in the Sale and Purchase Agreements;

c That the defendant pays the plaintiff liquidated damages to be


annum of the last twenty per centum (20%) of the purchase price

arising from the defendant's failure to complete the common facilities

within the time prescribed in the Sale and Purchase Agreements;

d A declaration that the plaintiff is entitled to set-off the remaining

purchase price to be paid to the defendant against such liquidated

damages found due from the defendant to the plaintiff under (b) and

(c) above;

e A declaration that the plaintiff is entitled to claim liquidated damages

under (b) and (c) above from the defendant until the date the

defendant issues a fresh Notice of Vacant Possession after having set-

off the balance purchase price against the liquidated damages found

due under (b) and (c) above ("the date of the Fresh Notice of Vacant


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Possession");

f That the defendant pays the plaintiff liquidated damages to be


annum of the purchase price from 6.3.2005 to the date of the FreshNotice of Vacant Possession;

g That the defendant pays the plaintiff liquidated damages to be


annum of the last twenty per centum (20%) of the purchase price from

6.3.2005 to the date of the Fresh Notice of Vacant Possession;

h An order for payment by the defendant to the plaintiff of all sums

found to be due from the defendant to the plaintiff after having set-off

the remaining purchase price to be paid to the defendant against theliquidated damages found due under (f) and (g) above;

i An Order that the defendant delivers vacant possession and complete

the common facilities of the apartment units to the plaintiff within 4

days from the date of this order;

j An order that the defendant hand over vacant possession of the

accessory car parking parcels to the plaintiff within 4 days from the

date of this order;

k A declaration that the plaintiff is entitled not to pay the service charge

and sinking fund for the said apartments until the date of the Fresh

Notice of Vacant Possession.

2. The defendant is a licensed housing developer under the Housing

Development (Control & Licensing) Act 1966 ("Act 118") and has developed the

housing development called "Flora Damansara". On 6.3.2002, the plaintiff had

entered into two (2) separate Sale and Purchase Agreements with the defendant

to purchase two (2) apartments and also the parties had entered into 2 separate

Supplementary Agreement for the plaintiff to purchase the accessory parcels.

3. By clauses 22 (1) and 24 (1) of the Sale and Purchase Agreement, the

defendant was required to deliver vacant possession of the apartments and

complete the common facilities within 36 months of the date of the Sale and

Purchase Agreement failing which the defendant shall pay the plaintiff LAD

calculated in accordance with the said clauses 22(2) and 24 (2). As the Sale and


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Purchase Agreement was dated 6.3.2002; the delivery date for vacant

possession and completion of the common facilities was to be 6.3.2005 ("the

completion date"). The defendant failed to complete by the completion date. The

defendant only issued the Notice of Vacant possession on 9.4.2008 but the said

Notice was attached with an annexure demanding settlement of the balance

purchase price before the plaintiff can take vacant possession. On 15.4.2008, the

defendant issued invoices demanding inter alia payment of service charge. On

5.5.2008, the plaintiff exercised its rights to set-off the balance purchase price

against the LAD payable and challenged the imposition of service charge. When

the defendant failed to comply with the plaintiff's demand, the plaintiff filed

enclosure (1).

Decision

1. The Sale and Purchase Agreement entered into by the parties is a

statutory contract as it was made based on Schedule H, Standard Form Sale

and Purchase Agreement under Act 118. As can be seen from its long titled,

Act 118 was enacted to regulate the business of housing development

and to protect public interest, in particular purchasers, who are

economically in a weaker position, in their relationship with housing

developers. The purpose of the Act has been clearly explained by the Federal

Court in S.E.A Housing Corp Sdn Bhd v Lee Poh Choo [1982] CLJ Rep 205

and also CityInvestment Sdn Bhd v Koperasi Serbaguna Cuepacs

Tanggungan Bhd[1985] 1 MLJ 285. The Federal Court has emphasized that

the protection afforded by the legislation to house buyers is not merely

a private right but a matter of public interest which Parliament has

intended to protect from being bargained away.

2. Now the 1st question for me to determine is whether the Supplementary

Agreement forms part of the statutory contract and enjoys the protections and

benefits conferred by the Act 118. To my mind, in interpreting the statutory

contract for the apartment and the Supplementary Agreement for the AccessoryCar Parking Parcel, this court must bear in mind the objectives of Act 118,

namely that it is an Act which was legislated by Parliament to protect

purchasers in their relationship with developers by regulating the business of

housing development.

3. Looking at Schedule H, the schedule covers 2 kinds of purchasers. The first,

are those (like the plaintiff herein) who can afford and want to buy an apartment


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with an accessory car parking parcel. The second, are those purchasers who

cannot afford or do not want to buy an apartment with an accessory car parking

parcel. This can be seen in the last and final preamble of the said standard

Schedule H Statutory Contract Form ("the said preamble"). For those purchasers

who can afford and want to buy an accessory car parking parcel with their

apartment, then the said preamble should not be amended by deleting the

sentence indicated by the "*" sign.

4. However, for those purchasers who cannot afford or do not want to buy an

accessory car parking parcel with their apartment, then the said preamble

should be amended by deleting the sentence indicated by the "*" sign. The said

preamble reads as follows:

AND WHEREAS the Vendor has agreed to sell and the Purchaser has agreed to

purchase a parcel with vacant possession distinguished as Parcel No which is

delineated and shaded GREEN in the Storey Plan, measuring square metres

within Storey No of Building No, which is in turn delineated and shaded RED in

the Site Plan (hereinafter referred to as "the said Bulding") with accessory parcel

with vacant possession distinguished as accessory parcel No of Building No

(hereinafter referred to as "the said Parcel"), subject to the terms and conditions

hereinafter contained".

5. It is therefore clear that if Parliament never intended the accessory car

parking parcel to come within the standard Schedule H Statutory Contract Form

and to enjoy the protections prescribed by the Housing Act, then Parliament

would have not have provided at all the sentence within the said "*" in the said

preamble. The fact that Parliament included it in the said preamble can only

mean that Parliament intended to confer the benefits and protections under the

Housing Act for the accessory car parking parcel for those purchasers who can

afford and want to purchase the apartments with the accessory car parking

parcel.

6. Section 17A of the Interpretation Act 1948 and 1967 (Act 388) reads as

follows:

Regard to be had to the purpose of Act

17A. In the interpretation of a provision of an Act, a construction that would

promote the purpose or object underlying the Act (whether that purpose or

object is expressly stated in the Act or not) shall be preferred to a construction

that would not promote that purpose or object".


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Based on the said provision of section 17A of Act 388, I am of the opinion that

the court must adopt a purposive approach in construing the statutory contract

under the Act 118. Therefore when the defendant amended the statutory

contract by deleting the sentence beginning from the and instead got the

plaintiff to sign the Supplementary Agreement for the accessory car parking

parcel, the defendant had clearly removed the very protection and benefits

guaranteed to the plaintiff under the Housing Act.

8.Further, I also note that there are certain clauses in the Supplementary

Agreement which are relevant to the issue. Those provisions are as follows:

Clause 4

In the event the purchaser commits a breach of the terms of the Sale Agreement

and the vendor determines the Sale Agreement pursuant to clause 9 thereof, allsums paid by the purchaser herein this agreement shall be forfeited absolutely

to the vendor.

Clause 5

The Accessory Car Parcel parking shall be completed and ready for the

purchaser's use upon completion and handing over vacant possession of the said

parcel under the Sale Agreement.

Clause 7

" The Accessory Car Parking parcel shall be appurtenant to the said parcel and

shall not be separated therefrom and shall pass with the title to the said parcel

whether or not separately described ".

9. To me, those clauses strengthen the plaintiffs contention that the accessory

car parking parcel under the Supplementary Agreement indeed formed part and

parcel of the apartments under the statutory contract. Even the defendant's

forms indicate RM 11,800.00 payment as 10% of the purchase price. In other

words, the full purchase price for each unit is RM 118,000.00.

10. The next question is on the plaintiff's claim on LAD. This relates to several

issues i.e whether the plaintiff is entitled to set-off the balance of purchase price

against the LAD payable; whether the plaintiff is entitled to claim continued LAD

until the defendant issues a fresh notice of vacant possession after having set-off

the balance purchase price against the LAD payable so that the plaintiff can take

delivery of vacant possession and whether can the plaintiff claim for LAD under


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clause 24 (1) beyond the date of the defendant's purported notice of delivery of

vacant possession? To answer these issues, I would like to quote the decision of

the Court of Appeal in SentuI Raya Sdn Bhd v Hariram Jayaram & Ors &

Other Appeals [2008] 4 CLJ 618 at page 629 as follows:

We now turn to the cross appeals. In four of the appeals before us the High Court

refused to award the respondents liquidated damages for the period until they

obtained actual vacant possession of their respective apartments. The factual

position is this. The appellant gave each respondent concerned notice that

vacant possession was available. Each notice was accompanied by a statement

of the balance sum due from each respondent to the appellant However there

was at the material time liquidated damages owing from the appellant to the

relevant respondents. These damages exceeded, in each case, the sum owing

from the respondents to the appellant. The respondents were entitled to a set off

the sums owing to them against the sums owing by them. See, S.E.A Housing

Corp. Sdn Bhd v Lee Poh Choo [1982] CLJ 355, ; [1982] CLJ (Rep) 305.

Accordingly, in our judgment, the notices relied upon by the appellant were

clearly invalid because delivery of vacant possession in each case was

predicated upon the payment of a sum not due. The relevant respondents were

therefore entitled to continue to claim liquidated damages until they took

possession of the keys to their respective apartments. There is therefore merit in

the cross appeals."

11. Based on the said Court of Appeal's decision, I conclude that the answers toall the issues raised in paragraph 10 of this judgment are in the affirmative.

12. In its affidavit in reply, enclosure (5), paragraph 10, the defendant tries to

escape liability to pay LAD on the ground that the delay was beyond the

defendant's control. However this is a mere unsupported averment without any

details given. The defendant does not state the factors that were beyond the

defendant's control. In any event, the Court of Appeal in Sentul Raya Sdn Bhd

(Supra) at page 628 had stated as follows:

Under reg. 11 (3) of the Regulations it was open for the appellant to makerepresentations to the Controller of Housing - to quote from the Regulation -

owing to special circumstances or hardship or necessity compliance with any of

the provisions in the contract of sale is impracticable or unnecessary". In our

judgment reg. 11 (3) clearly excludes the operation of the doctrine of frustration

in respect of contracts regulated by the Act.".

13. Similarly, in the instance the only way the defendant can escape liability to


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