Tan Lai Whatt Sebastian v DISTINCTIVE RESOURCES SDN BHD (BA-22NCvC-219-06/2022)

This action started as an action filed by the Plaintiffs to claim liquidated ascertained damages (“LAD”) and specific relief, namely the conversion of the leases for the properties they purchased under a private lease scheme, into freehold title. 28/11/2025 11:53:18

After multiple case managements, developments in the law (Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd and other appeals [2024] 5 MLJ 897 (“Obata”) and Tropika Istimewa Development Sdn Bhd v Wong Hang Fah & Ors [2025] 8 CLJ 540 (“Tropika”)) and an out of court settlement reached between the Plaintiffs and the 2nd Defendant, only the quantification of LAD remained for determination as between the Plaintiffs and the 1st Defendant.

Counsel agreed to a set of facts dated 4-8-2025, which contained the following information relating to the transactions between the Plaintiffs and the 1st Defendant: a) parcel unit numbers and purchase price; b) date of sale and purchase agreements (“SPAs”); c) date of payment of deposit to Messrs NK Tan & Rahim d) date of release of deposit by Messrs NK Tan & Rahim e) date of Notice of Delivery of Vacant Possession (“VP Notice”) f) date of actual VP when keys were taken g) amount of LAD previously paid and accepted With these agreed facts, tables were generated with calculations of the different permutations of LAD amounts, thus dispensing with viva voce evidence. Counsel agreed to frame questions for the Court’s determination according to Order 14A of the Rules of Court 2012 without the need for a trial.

On the date set down for hearing of submissions on 15-10-2025, counsel for the 1st Defendant further agreed that calculation of LAD ought to stop accruing on the date of the VP Notice + 14 days. There were accordingly 3 Tables generated and agreed upon, which counsel said superseded the LAD calculations appearing in their post-trial written submissions. The 3 Tables are labelled as follows:

(A) Booking Fee -> VP Notice + 14 days

(B) Release Date -> VP Notice + 14 days

(C) SPA Date -> VP Notice + 14 days

As a result, the agreed list of issues to be determined by this Court was further narrowed to the following:

Whether the time for delivery of vacant possession of 48 months runs from:

the date of receipt of payment of the earnest deposit monies by Messrs NK Tan & Rahim from the

the date of receipt of the said earnest deposit monies by the 1st Defendant from Messrs NK Tan & Rahim; or

the date of the respective SPAs.

However, some disagreement persisted on the 1st Defendant’s framing of issues about whether the Plaintiffs’ claims for LAD are time barred by Section 6(1)(a) of the Limitation Act 1953 (“LA”). The time-bar issues framed by the 1st Defendant were as follows:

Having regard to Clause 25(3), Clause 26(3), Clause 27(2) and the Third Schedule of the SPAs, whether the Plaintiffs’ cause of action to claim LAD accrues:

on the date of the VP Notice issued by the 1st

upon expiry of fourteen (14) days from the date of the VP Notice; or

on the date of the respective SPAs.

Whether the cause of action by the Plaintiffs:-

to invalidate Clause 25(1) and Clause 27(1) of their respective SPAs with the 1st Defendant; and

for damages for late delivery of vacant possession to be calculated to run after the expiry of 48 months from the date of payment of the earnest deposit monies by the Plaintiffs, instead of from the date of their respective SPAs pursuant to Clause 25(1) and Clause 27(1), accrued from the date of the respective SPAs?

If question 5 is answered in the affirmative, whether such action by the Plaintiffs is barred by section 6(1)(a) of the Limitation Act 1953 (revised 1981) being an action brought after the expiration of six years from the date such cause of action accrued? Analysis and findings

Time for completion period to start running

The 1st Defendant contended that, according to Clauses 25(1) and 27(1) of the SPAs, it is required to deliver VP of the parcels and common property “within 48 calendar months of this Agreement” and “Agreement” refers to the SPAs and not an earlier date when booking fees were collected as decided in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor and other appeals [2021] 2 CLJ 441 (“PJD Regency”).

The 1st Defendant’s contention that PJD Regency does not apply was premised on the following: a) The Court of Appeal in Tropika dismissed the purchasers’ claim of misrepresentation by reference to the terms of the sale and purchase agreements and not an earlier formed agreement; and b) PJD Regency was decided in 2021 and has no retrospective effect to SPAs in this case, since VP was handed over to the Plaintiffs in 2018. Contract formation

This Court is not with the 1st Defendant on the first point advanced. PJD Regency decided that a contract comes into existence when purchasers pay booking fees and that the execution of the sale and purchase agreement was a mere formality. That issue did not arise in Tropika which, as pointed out, concerned the sale of a private lease scheme like in this case.

The Court of Appeal’s rejection of the purchasers’ case of misrepresentation was not premised on there being no contract formed before the formal sale and purchase agreements were executed. It was also not premised on uncertainty of terms before execution of sale and purchase agreements that are not prescribed contracts under the Housing Development (Control and Licensing) Act 1966 (“HDA”) as contended.

The concept of contract formation when all material terms of a sale and purchase of property have been agreed is not limited to cases with a statutorily prescribed form of contracts. See Charles Grenier Sdn Bhd v Lau Wing Hong [1997] 1 CLJ 625 for the law. As a matter of fact, observations made in the judgment of the Court of Appeal in Tropika reveal that the starting premise of the 1st Defendant’s argument is also faulty. The Court of Appeal observed that: “[37] In any event, the plaintiffs in the present case were explicitly aware, prior to executing the SPA, that the sale of the property is by way of lease and the period for delivery of vacant possession had been extended to 48 months from the brochure also through the request for registration form.”

The decision of the Court of Appeal in Tropika also did not change any laws as it relates to private lease schemes. The developer in a private lease scheme was still found to be subject to regulation under the HDA. In finding for the validity of the private lease scheme, the Court of Appeal held: “[68] As the second actor, the Defendant has duly relied on these guidelines, policies, and the approval granted by the relevant authorities. In doing so, the Defendant is bound by the framework set forth by the authorities. Accordingly, we are of the view that the SPA has been structured in compliance with the ownership guidelines established by IRDA, reflecting adherence to the regulatory framework. [69] Without the KPKT’s approval, the Defendant would not, and indeed could not, have entered into such an agreement. Had the SPA contravened any existing laws, the relevant approvals including the extension and exemption letter as well as the Advertising Permit and Developer License, would not have been issued to the Defendant, nor would the authorities have issued the strata title.” [Emphasis added]

Regardless of the form of contract that the 1st Defendant ultimately entered into with its purchasers, the 1st Defendant’s conduct vis-à-vis its purchasers continued to be subject to the HDA as a piece of social legislation with all attendant implications, including implications on contract formation and calculation of LAD as determined by PJD Regency.

The 1st Defendant’s argument that PJD Regency can have no retrospective effect on the interpretation of the SPAs is a non-starter because it also did not formulate any new law on the issue. A perusal of the Judgment in PJD Regency will reveal that the Federal Court had affirmed 2 prior Supreme Court decisions and fortified their correctness by affirming a Federal Court decision from the same era.

This Court can do no better than to reproduce the following relevant passages from PJD Regency to debunk the proposition that LAD should be calculated from the date of the SPAs because PJD Regency does not apply retrospectively: “[25] … upon a wholesome and coherent reading of the two judgments of the Supreme Court in Hoo See Sen and Faber Union, the point of law at issue in these appeals remains very much decided. Where a developer fails to deliver vacant possession according to the time stipulated in the statutory sale and purchase agreement, the calculation of the LAD begins from the date of payment of the booking fee and not from the date of that statutory agreement. [26] In any event, we are of the view that the above point of law is further clarified and cemented by the nature of the HDA 1966 and HDR 1989 being social legislation. Thus, leaving aside the quarrel over the correctness of the two said Supreme Court decisions, we find that subsequent judicial decisions and legislative changes do not support the developers. … [29] The social significance of the statute is further borne out by the words of Suffian LP in SEA Housing Corp Sdn Bhd v. Lee Poh Choo [1982] CLJ 355; [1982] CLJ (Rep) 305; [1982] 2 MLJ 31 ("SEA Housing "), at p. 311 (CLJ); p. 34 (MLJ): It is common knowledge that in recent years, especially when government started giving housing loans making it possible for public servants to borrow 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 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. (emphasis added) [30] It appears that even since 1982, housing developers have continued to devise ingenious, and if we may say so, devious schemes to overcome the protections afforded to purchasers by the scheme of the HDA 1966. We would say here that booking fees are one such invention. How is the concept of social legislation relevant to the weeding out of such practices?" Payment or receipt

The second sub-issue to consider is whether the start date of the completion period should be when the booking fee is paid by the purchasers or received by the developer when an intermediary is involved in holding the monies. On the facts, the interposition of an intermediary agent to collect the booking fee payment was presumably an arrangement made by the 1st Defendant.

PJD Regency refers to the date of payment of booking fees. This Court finds it irrelevant if the payment date of a booking fee does not coincide with the date of its receipt by the developer. Following B U Development Sdn Bhd v Adeline Tan Kean Sim & Anor [2025] CLJU 637 where a similar argument was made by the developer who delayed the encashing of booking fee cheques collected, it is not a fact that changes the analysis of when the contract was formed.

The time-bar issue

In essence, the time bar issue arises because in Obata, the Federal Court held that the purchasers’ cause of action to challenge the validity of clauses in SPAs that deal with time for delivery of vacant possession runs from the date of the execution of the SPAs.

According to the 1st Defendant, the Plaintiffs are claiming the period for completion commences from the date of payment of booking fees rather than the date of the SPAs, and in so doing, they are effectively challenging the validity of Clauses 25(1) and 27(1) of the SPAs which provide for delivery of VP “within 48 calendar months of this Agreement.”

Based on the above reasoning, the 1st Defendant contends that following the ratio on the date of accrual of cause of action in Obata, this action for LAD time-barred as the most recent SPA signed among the Plaintiffs is dated 19-7-2014 and the 6-year limitation period expired at the latest, on 19-7-2020, well before this suit was filed in June 2022.

This Court is also unable to agree with the 1st Defendant on this point. The challenge in Obata was quite different. There, the purchasers were claiming LAD based on the completion period of 36-months and hence were challenging the impugned modified clauses in the SPA which provided for a 54-month completion period. Such a modification was struck down as void in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor & Other Appeals [2020] 1 CLJ 162 as also affirmed in Obata.

The issue canvassed in the preceding sections of this Judgment on contract formation and when the start date to calculate LAD is an issue of interpretation of what “Agreement” the phase “within 48 calendar months of this Agreement” refers to. In concluding that “Agreement” must be construed to refer to the one formed on payment of the booking fee, there is no challenge to the validity of the clause. It remains valid, with the interpretation given to it by the Courts.

The 1st Defendant’s attempt to conflate when LAD starts accruing with when the cause of action for LAD accrues is misconceived and mischievous. The cause of action accrued from the date of breach of contract and the clauses breached in this case, are clauses 25(1) and 27(1) of the SPAs because VP took longer than 48 months.

The provision on LAD simply ascertains the damages recoverable from that breach. Consistent with first principles, it is expressly provided in sub-section (3) that any cause of action to claim LAD shall accrue on the date the purchaser takes vacant possession of the parcel or on the date the developer completes the common facilities.

As such, there is no time-bar issue in this case as VP happened in 2018 and this action was filed in 2022.

To answer the questions framed:

The time for delivery of vacant possession of 48 months runs from the date of receipt of payment of the earnest deposit monies by Messrs NK Tan & Rahim from the Plaintiffs.

Having regard to Clause 25(3), Clause 26(3), Clause 27(2) and the Third Schedule of the SPAs, the Plaintiffs’ cause of action to claim LAD accrues on the date the purchaser takes vacant possession of the parcel or on the date the developer completes the common facilities.

The Plaintiffs’ cause of action is not to invalidate Clause 25(1) and Clause 27(1) of their respective SPAs with the 1st Defendant and as such, it did not accrue from the date of the SPAs and the action is not time-barred.

Consequently, the Plaintiffs are entitled to recover LAD according to the sums quantified in Table A (Booking Fee -> VP Notice + 14 days), with interest to accrue at 5% per annum from the date of Judgment until full settlement and costs global sum of RM30,000.00 subject to allocator. Bertarikh : 28 November 2025 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam bagi pihak Plaintif: Wong Renn Xin Messrs K L Wong Peguam bagi pihak Defendan: Amitaesh Thevananthan Messrs Azman Davidson & Co -