1. ) Harun Azlan bin Sufian v Saujana Triangle Sendirian Berhad (BA-B52NCVC-260-08/2016)

HARUN AZLAN BIN SUFIAN (No. K/P: 750601-12-5005)

ZAIREEN AYU IBRAHIM (No. K/P: 820925-14-5046) ... PLAINTIF-PLAINTIF 15 DAN SAUJANA TRIANGLE SDN BHD ... DEFENDAN (No. Pendaftaran Syarikat: 339170-W) 20 GROUNDS OF JUDGMENT [Enclosure 5] Background of the Case 25 [1] The background facts of the Plaintiffs’ action against the defendant are these: The defendant was a housing developer and the plaintiffs as purchasers entered into a sale and purchase agreement dated 28.07.2010 (“the SPA”) for the sale and purchase of one unit condominium with 30 common facilities at a purchase price of RM1, 078, 000.00 (clause 3 of the SPA) in a project known as „Bandar Damansara Perdana Armanee Terrace‟ (“the Property”). 2 [2] The SPA (Exhibit A-1 of the Supporting Affidavit) was in the form 5 prescribed in Schedule H to the Housing Development (Control & Licensing) Regulations 1989 (“the 1989 Regulations”). Clauses 26(1) and 28(1) of the SPA provided that vacant possession of the Property together with the common facilities shall be handed over to the plaintiffs within 36 months from the date of the SPA, i.e. on or before 27.07.2013. Clause 8 of 10 the SPA further stipulates that time shall be of the essence of the contract in relation to all provisions of the SPA. [3] The defendant failed to deliver vacant possession of the Property within the specified time. It is a term of the said agreement (clause 26.2 of 15 the SPA) that the defendant should pay liquidated damages at the rate of 10% per annum on the purchase price for any delay in the completion of the property up to the date of the plaintiffs take vacant possession of the said parcel. Pursuant to clause 28.2 of the SPA, the defendant further agreed that if the common facilities are not completed in time, the 20 defendant shall pay immediately to the plaintiffs liquidated damages at the rate of 10% per annum of the last twenty per centum (20%) of the purchase price until completion. The Writ (Enclosure 1) 25 [4] On 4.8.2016, the plaintiffs commenced an action claiming liquidated ascertained damages (“LAD”) for late delivery of vacant possession of the Property amounting to RM316, 607.00 with interest of 5% on the said amount and RM62, 553.00 for late completion of the common facilities calculated until full settlement together with interest and costs. 30 3 [5] It is the plaintiffs’ case that the vacant possession of the property was 5 delivered to the plaintiffs only on 3.7.2016, a delay of 1072 days, and that the common facilities was completed only on 20.6.2016, a delay of 1059 days. The LAD based on the formula specified in clauses 26(2) and 28(2) of the SPA as follows:

a sum of RM316, 607.00 as LAD for late delivery of vacant 10 possessions of the property (for 1072 days);

(ii) a sum of RM62, 553.00 as LAD for late completion of the common facilities (for 1059 days) [6] The defendant entered appearance and later filed his Statement of Defence and Counter Claim on 2.9.2016. The plaintiffs thereafter on 15 7.9.2016 filed an application under Order 14 rule 1 to seek a summary judgment against the defendants vide Enclosure 5. Application under Order 14 Rule 1 the Rules of Court 2012 (Enclosure 5) 20 The Law [7] O. 14 r. 1(1) and O. 14 r. 3(1) of the Rules of Court 2012 (ROC) provide as follows:

“Application by plaintiff for summary judgment (O. 14, r. 1)

Where in an action to which this rule applies a statement of claim 25 has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the 4 defendant has no defence to a claim included in the writ, or to a particular 5 part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant."; “Judgment for plaintiff (O. 14, r. 3)

(1) Unless on the hearing on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that 15 claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.” [8] In an application for summary judgment, this Court is guided by the principles laid down in Doshi v. Yeoh Tiong Lay [1975] 1 MLJ 85. In this 20 case, the Federal Court held as follows: “The purpose of O. 14 of the Rules of Supreme Court 1975 is to enable the Plaintiff to obtain summary judgment without trial if he can prove his case clearly, and if the defendant is unable to set up a bona fide defence or raise an issue against the claim which ought to be tried, final judgment 25 should be allowed”. (Emphasis added). [9] This Court also guided by the principles laid down in National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 CLJ 220, where it was stated by the Federal Court as follows: “... We think it appropriate to remind ourselves once again that in every 30 application under O. 14, the first considerations are (a) whether the case comes within the order and (b) whether the plaintiff has satisfied the 5 preliminary requirements for proceeding under O. 14. For the purposes of 5 an application under O. 14, the preliminary requirements:-

the statement of claim must have been served on the Defendant;

(ii) the defendant must have entered an appearance;

(iii) the affidavit in support of the application must comply with the requirements of r. 2 of the O. 10 ... If the Plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. This burden then shifts to the defendant to satisfy the court why 15 judgment should not be given against him...” [10] In the present case, the Plaintiffs had satisfied the preliminary requirements as laid down in the case of National Company for Foreign Trade v. Kayu Raya Sdn Bhd (supra) that is:

the Statement of Claim have been served on been served on the

(ii) the Defendant have entered appearance; and

(iii) the Affidavit in Support is in compliance with O. 14 r. 2 ROC 2012. [11] In Bank Negara Malaysia v. Mohd Ismail [1992] 1 CLJ 627 the 25 Supreme Court held that the duty of a Judge does not end as soon as the fact is asserted by one party, or denied or disputed by the other on affidavit. The Judge has a duty to reject such assertion or denial if such assertion or denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or is inherently improbable. The Court will have 30 to identify the issues of fact or law and to determine whether they are triable. 6 “.....Under an O. 14 application, the duty of a Judge does not end as soon 5 as a fact is asserted by one party, and denied or disputed by the other on affidavit. Where such assertion, denial or dispute is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable in itself, then the Judge has a duty to reject such assertion or denial, thereby 10 rendering the issue as not triable. In our opinion, unless this principle is adhered to, a Judge is in no position to exercise his discretion judicially under an O. 14 application. Thus, apart from identifying the issues of fact or law, the Court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a 15 complete defence need not be shown. The defence set up need only show that there is a triable issue. Where the issue raised is solely a question of law without reference to any facts or where the facts are clear and undisputed, the Court should exercise its duty under O. 14. If the legal point is understood and the Court is 20 satisfied that it is unarguable, the Court is not prevented from granting a summary judgment, merely because “the question of law is at first blush of some complexity and therefore takes a little longer to understand”.” [12] Having considered the affidavits and the submissions of the parties, this court is of the considered view that the Plaintiffs have established a 25 prima facie case as it is not in dispute that the Defendant had delayed in delivering vacant possession and in completing the common facilities. [13] Therefore, the burden lies with the Defendant to raise triable issues, which would require the case to proceed with trial. The Defendant raised the following points in its written submission: 30 7

The late delivery of vacant possession and the late completion 5 of the common facilities were caused by force majeure;

The computation of liquidated damages (LAD) should be based on the Discounted Price;

(iii) Want of Notice. 10 The Findings of the Court [14] Having considered the submissions advanced by both parties, this court shall consider each of the issues advanced by the defendant separately.

The late delivery of vacant possession and the late completion 15 of the common facilities were caused by force majeure. [15] The defendant contended that the delay was due to dispute with its main contractor, the escalation of cost of raw materials, the escalation of finance charges and the rectification works by previous contractors. The defendant submitted that the above problems are not within its control and 20 therefore they constitute force majeure. Because of this, the defendant contended that the completion time must be extended so that the defendant can avoid paying the LAD. The defendant further submitted that the force majeure is an implied term of the SPA. The defendant, in trying to convince the court that the delay was caused by force majeure, adduced 25 an affidavit affirmed by the Finance Manager himself, Mr Zulkifli bin Mohd Isa (see enclosure 8). The defendant, in support of the position that they 8 take, also relies on Malaysia Land Properties Sdn Bhd v Tan Peng Foo 5 [2013] 3 CLJ 663 and the case of Liau Fung Kiong & Ors v Tinagat Properties Sdn Bhd [2010] MLJU 1480. [16] With respect, this court is unable to accept the defendant’s argument. Instead, this court is in agreement with the plaintiffs that the force majeure clause only applicable if the clause is provided for in the SPA. When a 10 party refers to force majeure it essentially refers to the contractual terms that the parties have agreed upon to deal with situations that might arise, over which the parties have little or no control, that might impede or obstruct performance of the contract. See Magenta Resources (S) Pte Ltd v China Resources (S) Pte Ltd [1996] 3 SLR 62 where Justice Rajendran 15 opined: “What is referred to as force majeure in our law (as opposed to French law from which that term originates) is really no more that a convenient way of referring to contractual terms that the parties have agreed upon to deal with situations that might arise, over which the parties have little or no control, 20 that might impede or obstruct performance of the contract. There can therefore be no general rule as to what constitutes a situation of force majeure. Whether such a (force majeure) situation arises, and, where it does arise, the rights and obligations that follow, would all depend on what the parties, in their contract, have provided for.” 25 [17] The relevant statutory provision regulating and controlling the activity of the defendant is regulation 11(1) of the Housing Developers (Control and Licensing) Regulations 1989 enacted pursuant to the Minister’s powers under s 24 of the Housing Developers (Control and Licensing) Act 1966. For ease of reference, regulation 11(1) is reproduced below: 30 9 “Every contract of sale for the sale and purchase of a housing 5 accommodation together with the subdivisional portion of land appurtenant thereto shall be in the form prescribed in Schedule G and where the contract of sale is for the sale and purchase of a housing accommodation in a subdivided building, in the form of a parcel of a building or land intended for subdivision into parcels, as the case may be, it shall be in the form 10 prescribed in Schedule H.” [18] It is pertinent to observe that the SPA is a Schedule H agreement provided pursuant to Regulation 11(1) of the Housing Development (Control and Licensing) Regulations 1989. The Housing Development 15 (Control and Licensing) Act 1966 makes it mandatory for the defendant to use the same without addition or modification. The decision in Encony Development Sdn Bhd v Robert Geoffrey Gooch & Anor [2016] 1 CLJ 893 serves as a good guide here. In that case, the Court of Appeal held: “The SPA between the respondents and the appellant, who is a housing 20 developer, is governed by a statutory form of contract as prescribed in sch. H of the Housing Development (Control and Licensing) Regulations 1989 [PU(A) 58/1989] („the regulations‟). As such, the provisions in the SPA are not merely contractual, but are in effect statutory provisions, as they are actually provision of sch. H of the Regulations. Which have been imposed 25 by law upon the parties. …. The SPA, which has statutory force, cannot, in other words, be effectively amended of varied by inferring the existence of a collateral contract subsisting alongside it.” 10 [19] In the case of Sea Housing Corporation Sdn Bhd v Lee Poh Choo 5 [1982] 2 MLJ 31, the Federal Court had the occasion to decide whether the developer can add the force majeure clause. The Federal Court held: “As to the rules which govern the transaction between the parties, rule 12 is relevant. That rule provides that every contract of sale - such as the one here - shall be in writing and shall contain within its terms and conditions 10 provisions to the effect set out in the various paragraphs of that rule. Paragraph (o) is relevant; that says that the agreement must specify: "the date of delivery of the vacant possession of the housing accommodation to the purchaser which date shall not be later than 18 months after the signing of the contract of sale." 15 That, as we have seen, was done. Then there is paragraph (r) which provides that the agreement must contain: "provisions binding on the licensed housing developer that he shall indemnify the purchaser for any delay in the delivery of the vacant possession of the housing accommodation. The amount of indemnity 20 shall be calculated from day to day at the rate of not less than eight per cent per annum of the purchase price commencing immediately after the date of delivery of vacant possession as specified in the contract of sale." 25 That too was done, as we have seen. But then the developer says, as we have seen, that it is excused from liability by clause 32 of the agreement which reads: "The vendor shall not be liable to purchaser for any failure to fulfil any terms of this Agreement if such fulfilment is delayed, hindered or 30 prevented by force majeure including but not limited to acts of God strikes lockouts riots civil commotion acts of war or the disability of contractors and subcontractors employed by the vendor either commencing, carrying on or completing their work or failure to obtain any necessary sanction or approval of any local authority or any 35 other circumstances of whatsoever nature beyond the control of the vendor." It is said here that owing to the then building boom and resultant shortage of building materials and labour which was beyond the control of the developer 40 it is not liable because of this clause 32. 11 With great respect to Mr. Chelliah for the developer we do not agree that it is 5 open to the developer to escape liability by inserting clause 32 in the agreement. It is common knowledge that in recent years, especially when government started giving housing loans making it possible for public servants to borrow 10 money at 4% interest per annum to buy homes, there was an upsurge in demand for housing, and that to protect home buyers, most of whom are people of modest means, from rich and powerful developers, Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act. That was why rule 12 was enacted and in particular 15 paragraphs (o) and (r) thereof. With respect we do not agree with Mr. Chelliah that it was open to a developer to get round these paragraphs by the inclusion of such a clause as clause 32 in this agreement. In Daiman Development Sdn Bhd v Mathew Lui Chin Teck [1978] 2 MLJ 239 we said at page 243 that developers are bound by the rules and if an 20 agreement of sale is subject to contract, "only details may be inserted into the further agreement." Mr. Chelliah argued that clause 32 is such a detail. With respect we do not agree. In our judgment such details as are inserted into a written agreement 25 must be details consistent, not inconsistent with the Act and rules. Clause 32 is inconsistent with paragraph (r) of rule 12(1). When Daiman went to the [1981] 1 MLJ 56 their Lordships observed at page 60, second column: "... it seems to their Lordships that upon the proper construction of 30 the proforma [used in that case] the solicitors [for the developer there] would not be able to include in the contract of sale any term or condition which was not appropriate to effectuate the sale which had been made, including for that purpose, of course, provisions to comply with the requirements of the rules." 35 Thus it is clear that only terms and conditions designed to comply with the requirements of the rules that may be inserted in a contract of sale of land that is governed by the Act and rules, and that on the contrary terms and conditions which purport to get round the Act and rules so as to remove the 40 protection of home buyers may not be so inserted. 12 With respect, the provisions in question here are similar to those in Johnson 5 v Moreton [1978] 3 All ER 37, a House of Lords decision, where at page 49 Lord Hailsham said: "The policy of the law has been repeatedly used to protect the weaker of two parties who do not contract from bargaining positions of equal strength. (line a). 10 The truth is that it can no longer be treated as axiomatic that, in the absence of explicit language, the courts will permit contracting out of the provisions of an Act of Parliament -- as was attempted here -- where that Act, though silent as to the possibility of contracting out, nevertheless is manifestly passed for the protection of a class of 15 persons who do not negotiate from a position of equal strength, but in whose well-being there is a public as well as a private interest." (lined onwards). It would appear that only "contracting out" in favour of the weaker party -- i.e. 20 the purchaser -- might be countenanced by the courts. The construction we place on the rules is not as harsh as it seems to a developer -- for he has a safeguard in subrule (2) of rule 12 which provides: "Notwithstanding the provisions of paragraph (1) of this Rule, where the Controller [of Housing] is satisfied that owing to special 25 circumstances the compliance with any provisions of this Rule is impracticable or unnecessary he may by a certificate in writing waive or modify such provisions in respect of any contract of sale." Thus in the circumstances of this case it would have been open to the 30 developer to try and persuade the Controller to modify the rigours of paragraphs (o) and (r) of rule 12(1). If it had succeeded it would have escaped liability. But it made no attempt to do so. But Mr. Chelliah says that under the terms of rule 12(2) the developer could have done so only before a contract of sale had been finalized and not after. 35 With respect we do not agree; in our judgment it is open to a developer to take advantage of this provision after as well as before such a contract has been finalized. For the reasons given above, we are of the opinion that clause 32, being inconsistent with rule 12 and not designed to comply with the requirements 40 of the rules and in the absence of waiver or modification by the Controller of Housing under rule 12(2), is void, and that therefore the developer is liable in damages for the delay in completion.” 13 5 [20] Applying the proposition of law as explained above, this court opined that the defendant could not use those incidents to escape from its obligation under the SPA. This court will not imply terms that contradict any express terms of the SPA. Therefore, the issue of force majeure cannot be 10 a triable issue in this present case.

The computation of liquidated damages (LAD) should be based on the Discounted Price [21] The defendant contended that since a discount is given the damages 15 must be computed based on the discounted sum and not the purchase price stated in the SPA. The defendant further submitted that otherwise the plaintiffs would be unjustly enriched. [22] However, this court is of the considered opinion that the parties are bound by the purchase price stated in the SPA. Clause 3 defines what 20 purchase price is: “The purchase price of the said Parcel is Ringgit Malaysia One Million Seventy Eight Thousand only (RM1, 078,000.00) only and shall be payable in the manner hereinafter provided.” Clause 26(2) and 28(2) stipulated that the LAD must be computed based 25 on the purchased price as defined under clause 3. Therefore, in the present case, the LAD should be calculated based on the purchase price stipulated in clause 3 of the SPA. 14 [23] The defendant submitted that the plaintiffs’ claim herein, if allowed, 5 would lead to an unjust enrichment of the plaintiffs at the defendant’s expense. With respect, I am unable to accept the defendant’s argument. As explained above, the parties are not permitted to alter or amend the terms and condition of the SPA. Thus, the parties are bound by the purchase price stated in the SPA when computing the LAD payable by the defendant 10 to the plaintiffs under clauses 26(2) and 28(2) of the SPA. The issue of unjust enrichment does not arise in the present case. [24] In the case of View Esteem Sdn Bhd v. Vitalmont Development Sdn Bhd [2014] 1 LNS 1402, the Learned Sessions Court Judge found 15 that the Plaintiff had proven their claim on a balance of probabilities and allowed the Plaintiff's claim. On appeal, the defendant submitted that the learned Sessions Court Judge had erred when decided that the Plaintiff is entitled to calculate the LADs based on the purchase price as stated in the SPA amounting to RM658, 300.00, instead of RM592, 470.00, because this 20 would amount to unjust enrichment at the expense of the Defendant since the Plaintiff had received a 10% bonus/discount from the Appellant. The High Court held: “The Purchase price of the Apartment is RM658, 000.00 as stipulated in clause 3 of the SPA. On the issue of unjust enrichment, it is the submission of the 25 Appellant (Defendant) that a 10% discount was given to the Respondent (Plaintiff) as a promotional price. Therefore on that basis the LAD must be calculated based on the purchase price less 10%. Since clause 3 stipulates that the purchase price is RM658,000.00 any calculation of LAD must be based on that amount as agreed. The Appellant did 30 15 not adduce any evidence to the contrary. The salient terms of the SPA must 5 therefore be applicable.”

Want of Notice [25] The Defendant submitted that time is no longer of the essence as the plaintiffs had let the time for delivery of vacant possession pass without 10 objection and without any notice to claim damages. [26] However, this court is of the considered opinion and in agreement with the Plaintiffs that requiring the plaintiffs to issue a notice in order to entitle themselves of damages in akin to imposing additional terms to the statutory contract agreement. This court is guided by the case of Sentul 15 Raya Sdn Bhd v Hariram Jayaram & Ors and Other Appeals [2008] 4 CLJ 618, where the Court of Appeal held: “So far as s.56(3) of the Contract Act 1950 is concerned, it deals with contracts generally. The contract which has fallen for construction in the present cases is a special contract. It is prescribed and regulated by 20 statute. While parties in normal cases of contract have freedom to make provisions between themselves, a housing developer does not enjoy such freedom. Hence, parties to a contract in form H cannot contract out of the scheduled form. Terms more onerous to a purchaser may not be imposed. So too, terms imposing additional obligations on the part of a purchaser 25 may not be included in the statutory form of contract. It follows that the requirement of notice under s.63(3) which is an additional obligation to the detriment of the purchaser cannot be imposed on the respondents here in the light of the statutory scheme under the Act. This evident in the language of cl.22(2). On its proper construction, the clause makes a 30 16 16 housing developer immediately liable to a purchaser in liquidated damages 5 once the date for completion passes. Put differently, cl. 22(2) excludes the operation of s.56(3). This another reason for holding that s.56(3) of the Contract Act 1950 does not apply in cases falling under the Act.” 10 Conclusion [27] This court is of the opinion that the defendant has failed to raise any bona fide triable issue which warrants the dismissal of the plaintiffs’ application, and which must go for full trial for witnesses to be called and be cross-examined. 15 [28] The defendant did not challenge the calculation of the liquidated damages set out in paragraph 6 of the Statement of Claim or that it was wrong or incorrect. On the facts and circumstances in this case, the defendant was liable to pay the plaintiffs the liquidated damages in accordance to the SPA. 20

[29] The facts and the law as aforesaid do not favour the defendant. There are no triable issues that are raised by the defendant and this court therefore would allow the application of summary judgment for the plaintiffs 25 with costs of RM 3000.00 to be paid by the defendant for this application. 17 (IZRALIZAM BIN SANUSI) Sessions Court Judge Shah Alam Dated: 26.1.2017 Counsel for the plaintiffs: Encik M. Muthuraman Messrs Muthu & Partners Advocates & solicitors No.14B Lorong Rahim Kajai 14 Taman Tun Dr Ismail 60000 Kuala Lumpur. Counsel for the defendant: Cik Zaitul Naziah binti Mohd soib Messrs Andrew Davis & Co Advocates & Solicitors P-3-13, No.60 Plaza Sri Hartamas 1 (1/70A) Sri Hartamas 50480 Kuala Lumpur