Anwar Yeo Abdullah v Setia Haruman Sdn Bhd (52-1316-2011)

Dan PERBADANAN PENGURUSAN

SETIA HARUMAN SDN BHD …DEFENDAN-DEFENDAN [Dalam Tuntutan Balas] Grounds of Judgment Introduction 2

In the original suit, the plaintiff, Perbadanan Pengurusan CBD Perdana 1 (“PPCBD”) filed a suit against the defendant, Anwar Yeo Abdullah, (“AYA”) for, among others, outstanding maintenance charges said to be owing by AYA to PPCBD.

AYA counterclaimed against, among others, Setia Haruman Sdn Bhd (“SHSB”), the developer of the project of which AYA purchased 5 units of properties, for, among others, damages said to be suffered by AYA as a result of the late delivery of vacant possession by SHSB.

SHSB had also filed its counterclaim against AYA, for late penalty interest in the sum of RM52,238.74.

During the first day of trial on 17 December 2015 before the previous Judge, Puan Nik Nasimah Binti Nik Mohamadin, PPCBD withdrew the suit against AYA, leaving only both the counterclaims filed against each other by AYA and SHSB.

I have conducted the full trial of the counterclaims against each other by AYA and SHSB. After hearing testimonies of the witnesses and submission by both parties, I made a decision to allow the counterclaim by AYA against SHSB and also to allow counterclaim by SHSB against AYA for late penalty interest in the sum of RM52,238.74.

Dissatisfied with the decision of the court, SHSB filed an appeal to the High Court against the decision of the court in allowing the counterclaim by AYA against them. 3

For ease of reference and to maintain consistency with how parties address each other in their respective submissions, AYA will be referred to in this grounds as plaintiff and SHSB as defendant.

In this suit, the plaintiff purchased 5 units of properties known as units 4801-0-11, 4801-1-11, 4801-2-11, 4801-3-11 and 4801-3A-11 (“Units”) of CBD Perdana, Jalan Perdana, 63000 Cyberjaya from the defendant, who is the developer of the project and also vendor of the Units.

It is not in dispute that the plaintiff had made payment of the full purchase price of the Units.

The defendant had sent out 3 notices of delivery of vacant possession dated 21 August 2008, 2 December 2010 and 10 January 2011 respectively in respect of the Units.

It is the plaintiff’s contention that the defendant had failed to deliver good vacant possession of the Units by failing to deliver the keys of the Units to the plaintiff and the plaintiff further contends that the delay in delivering vacant possession (“VP”) by the defendant has resulted plaintiff to suffer losses, including the loss of rental of the Units. 4

The following questions arise in this case in respect of the plaintiff’s counterclaim :

when did the defendant deliver vacant possession of the 5 units to the plaintiff?

(ii) whether the defendant is liable to pay damages to the plaintiff as a result of defendant’s delay in handling over vacant possession of the 5 units, including loss of rental and other general damages?

(iii) In respect of the defendant’s counterclaim, whether the plaintiff is liable to pay the late payment interest? When was VP of the Units delivered?

When was the VP of the Units delivered is a pertinent issue which will then determines parties’ responsibility and liability under the sale and purchase agreement (“SPA”).

Anwar Yeo Abdullah (SP1) testified as the plaintiff’s sole witness. Whilst the defendant’s witness is the COO of the defendant, Ms. Li Wai Chee (SD1). 5

SP1 testified that the first VP notice dated 21 May 2008 is meaningless because pursuant to clause 17(1) of the SPA, VP shall be delivered within 14 days from the date of receipt of balance purchase price by the defendant. SP1 stated that as at 21 May 2008, his financier OCBC has yet to release to the defendant the balance purchase price. The balance purchase price was only released on 4 October 2008 and it is therefore impossible that VP is delivered any time before 4 October 2008.

SP1 further stated that the second VP notice dated 2 December 2010 is also meaningless as keys to the Units were not given to him. Keys were only handed to him on 29 April 2011during a joint inspection of the Units.

SD1 agreed that the defendant can only deliver VP once in respect of the Units and that full payment of the balance purchase price was received on 4 October 2008. SD1 also agreed that as at 8 May 2009, key had not been handed to the plaintiff. SD1 agreed and that the keys of the Units were collected by the plaintiff on 21 May 2008.

SD1 also agreed that the defendant only delivered VP on papers whilst actual keys were not given to the plaintiff and the plaintiff would not be able to occupy and enjoy the Units without the keys.

The learned counsel for the plaintiff submits that there was no delivery of physical possession of the Units made by the defendant to the plaintiff. The plaintiff contended that after payment of balance purchase 6 price, contemporaneous evidence shows that physical VP was not delivered by the defendant to the plaintiff, for example, the defendant on 29 October 2009 admitted that keys to the Units had yet to be handed over to the plaintiff.

On 21 February 2010, the defendant wrote to the plaintiff stating that “without prejudice to our right to claim the outstanding interest… we hereby give you notice for delivery of vacant possession for the property to you…”. On 10 January 2011, the defendant wrote to the plaintiff to give third VP notice and on 13 January 2011, the plaintiff wrote to the defendant to, among others, arrange for keys to be handed over during an appointed date and time on 17 January 2011 at 10:30am.

During the appointed date on 17 January 2011, the plaintiff was however given incomplete keys to the Units. During the inspection, the plaintiff also found out that the Units were in bad condition. The delivery of VP was then rejected by the plaintiff. After the appointment on 17 January 2011, it was only on 29 April 2011 that a further joint inspection was carried out.

The plaintiff submitted that VP must be possession where plaintiff can occupy and enjoy the Units. The words “vacant possession” are not defined in the SPA. Learned counsel for the plaintiff referred to Words Phrases & Maxims, Legally Judicially Defined, by Ananda Krishnan wherein VP is defined as follow: 7 vacant possession means the right to occupy and enjoy the property either by owners themselves or by the tenants or licensees… Where a person takes vacant possession of property, the property is both unoccupied and free from any claim to a right to possession from anyone else.

The plaintiff relied on the cases of Bodco Engineering v Tribunal For Housing Purchaser Claims & Ors [2017] 4 MLJ 509, a recent decision which the Court of Appeal has rejected paper VP; Charles Muriel v. Newacres Sdn. Bhd. [1994] 2 CLJ 758 which held that failure to provide water and electricity connection means failure to deliver VP and Hoya Holding Sdn Bhd v Chia Thin Hing [1994] 4 CLJ 993 which held that, among others, handing over of keys are a pre-requisite of delivery of VP.

The learned counsel for the defendant contends that the deeming provision of VP as stated in the SPA will generally be applied with full effect unless it can be proven before the court that there is rebuttable presumption to such deeming provision (see Lucy Wong Nyuk King & Anor v Hwang Mee Hiong [2016] 3 MLJ 689)

The defendant further contends that the plaintiff has failed to show any rebuttable presumption to the deeming provision. The first VP notice 8 is issued pursuant to clause 17 of the SPA and the plaintiff has not disputed that the said VP notice had been received by him. The plaintiff had however failed to make payment of the outstanding sum (including the late payment interest and all other charges) owing to the defendant. As such, by way of the plaintiff’s failure to make payment of the outstanding sum, the plaintiff is the author of his misfortune.

The learned counsel for the defendant relied on the case of Berjaya Times Square v M Concept Sdn Bhd [2010] 1 MLJ 597 to support the defendant’s contention that the plaintiff is indeed a contract breaker who must not be allowed to take advantage of his own wrong.

To support the defendant’s contention that VP was duly delivered by way of the first VP notice, the defendant also relied on the cases of IJM Cooperation Bhd v Zamri Bin Hj Ibrahim & Anor [2014] 2 MLJ 335 and Everest Point Sdn Bhd & Anor v Lim Peck Sim & Ors [2017] 7 CLJ 401.

Based on the above, the defendant concluded that VP is deemed delivered to the plaintiff within 14 days from the VP notice dated 21 May 2008.

I find that the first VP notice dated 21.8.2008 is a sham. It must be noted that as at the first VP notice, the balance purchase price had not 9 been paid by the plaintiff’s financier. It is against the terms of the SPA, illogic and no reason for the defendant to be so magnanimous in granting VP before the payment of balance purchase price. There is no explanation from the defendant in relation to this. Other than the defendant trying to rely on the deeming provision and pass the responsibilities (including payment of maintenance charges) to the plaintiff, I cannot think of any other reason.

If the first VP notice was genuine, the defendant failed to explain why there was a need to send out second and third VP notices? SD1 had expressly agreed that the defendant can and should only give one VP notice.

The defendant’s contention that plaintiff’s duty is to make all the necessary payments upon issuance of VP notice is contradicting with the defendant’s conduct of issuing the first VP notice before payment of balance purchase price.

Based on the above, it is clear that the first VP notice does not carry any weight and is invalid. I shall continue to discuss the subsequent notices to determine when exactly VP of the Units was delivered.

On 2 December 2010, the defendant issued to the plaintiff a second VP notice. The second VP states: Without prejudice to our right to claim the outstanding late interest… we hereby give you notice for delivery of vacant possession for the property to you… 10

SD1 during cross examination admitted that as at 2 December 2010 (date of second VP notice), the keys to the Units are still with the defendant.

The third VP notice dated 10 January 2011 reads as follows: we note that as at today, you have not yet collected the keys for the [Units]….. Please take note that by virtue of section 17(2) of the SPA, vacant possession of the Property shall be deemed to have taken by you [14] days from the date of our written notification dated 2.12.2010… and is deemed delivered to you on 17 December 2010. Kindly contact our Mr. Richard Khoo… for the collection of keys for the [Units].

SD1 again confirmed during cross examination that as at the date of the third VP notice, no keys were given to the plaintiff for purposes of delivery of VP. Further, SD1 has also admitted that the defendant has taken a contradicting stand whereby defendant can only give VP once and the third VP notice contradicts the first and second VP notices.

Based on the above, I agree with the learned counsel for the plaintiff that the third VP notice had rendered the first and second VP notices worthless.

It must be noted that from early 2009 until early 2011, the plaintiff had sent numerous reminders to the defendant to, among others, demand for the keys to the Units. It should be noted that on 13 January 2011, the plaintiff has written to the defendant to, among others, complained that 11 the plaintiff had contacted one Richard Khoo of the defendant for a few times of which the plaintiff was told that Richard Khoo could not locate the keys.

There was eventually an appointment fixed on 17 January 2011 for joint inspection of the Units and for the defendant to hand over the keys to the plaintiff. Unfortunately, the plaintiff was given incomplete keys which resulted the plaintiff had no access to the roof top of the Units. The plaintiff also claimed that the Units were in bad condition. Premised on the shortcomings, the plaintiff had rejected VP of the Units.

After the appointment on 17 January 2011, it was only on 29 April 2011 that another joint inspection was carried out by both parties. At this juncture, the defendant is said to have failed to address and/or rectify the poor condition of the Units and the plaintiff had handed back the keys to the defendant out of his dissatisfaction.

Based on the facts above, it is clear to me that the keys (although incomplete) were first handed to the plaintiff on 17 January 2011. The next issue to determine is whether the Court should accept paper VP (based on the deeming provision in SPA) as good VP?

The deeming clause of such nature as appeared in clause 17 of the SPA is commonly used in most of the sale and purchase agreement. In this case, as pointed out rightly by the learned counsel for the plaintiff, 12 there is no definition given to vacant possession, or the manner how a VP is to be delivered under the SPA.

So the question to be asked is, how should a VP be delivered when the agreement is silent? It is plaintiff’s case that possession means physical possession of the Units whilst defendant is taking the position that the deeming provision (which I call paper VP) is to be taken as good possession. This was also confirmed by SD1 during cross-examination that the only VP given to the plaintiff is paper VP whilst the keys were not given. SD1 has also admitted that it is the practice of the defendant to hand over VP (on paper) and withholding the keys.

I agree with the learned counsel for the plaintiff that VP must be physical possession in which the plaintiff can occupy and enjoy the Units. Without keys, it is impossible for the plaintiff to occupy and enjoy the Units.

The Court of Appeal in the case of Bodco Engineering v Tribunal For Housing Purchaser Claims & Ors (supra) has correctly held that : [41] It is our further view that the purport of cl 17(3) of the SPA is plain and clear. It strengthens the scope of cl 17(2) by offering a definitive meaning of ‘the date of completion of the said building’ appearing therein. It simply means that what amounts to ‘date of completion’ now is the delivery of a completed and habitable building fit for human occupation together with the certificate of fitness for occupation (CF) issued under cl 20 of the SPA. 13 [42] In addition it now appears that the mere delivery of vacant possession of the said property by way of giving notice of vacant possession to the buyers under cl 19(1) and (2) is no longer sufficient to constitute completion. The requirement has now been modified in favour of the house buyers, providing additional protection from further victimisation by unscrupulous developers by the insertion of cl 17(3), which we think that the same, read as a whole in the context of the entire SPA and not in isolation as suggested fervently by learned counsel for the appellant, reflects the will of the contracting parties. If this is going to hurt the housing industry, it is for the developers to go back to the round table to trash the problem with those in authority.

Cases cited by the plaintiff’s counsel show that the Court is taking a consistent stand that delivery of VP means not only physical possession must be handed over, the property must also have water and electricity connection. The logic for this is simple, one cannot be expected to occupy and enjoy the property if it is without water and electricity connection, what more in this case, key was not even handed over?

Further, in Alexander John v Rich Avenue Sdn. Bhd. [2008] 2 CLJ 481, David Wong J (now JCA) held at follows: … The plaintiff is required to pay the entire full purchase price before he can get vacant possession of the property. However vacant possession is defined as not including … water and electricity … nor … until … certificate of fitness is issued… In short, what it means that the plaintiff 14 is obliged to fulfill his obligation by paying the entire purchase price without the reciprocal obligation on the part of the defendant in delivering vacant possession of the property. In dealing with this issue, I am fully mindful of the dictum that he court’s duty is to interpret the clauses in their natural meaning. That said, the court has a constitutional duty to ensure that the dominant party in a standard form agreement is not to abuse its position to the detriment of the weaker party … Are they absurd terms? My answer is in the affirmative and my reasons are these. Firstly, by not being able to obtain physical possession of the property with all the usual amenities after the full payment of the purchase price do not make any business sense. Secondly, the delivery of the property with its full benefits … after the full payment of the purchase price in my view is a fundamental term of the sale and purchase agreement. It goes to the root of the contract…. Thirdly, the plaintiff is put in a position where he could not enjoy the full benefit of the property like renting it out and yet is saddled with the financial burden of servicing his loan repayment with the financial company. Fourthly, public policy of ensuring that ordinary consumers are not burdened with such unconscionable terms …

The case of Alexander John v Rich Avenue Sdn Bhd (supra) sums it all that it indeed does not make any business sense to be unable to have 15 physical possession of the Units after payment of the full purchase price. Not only the plaintiff is unable to enjoy the benefit of the Units, the plaintiff has to bear the financial burden of servicing his loan repayment. It is the Court’s duty to ensure that purchasers are not burdened with unconscionable terms of SPA.

Further, the defendant’s only reason to support its decision of not giving the keys to the Units to the plaintiff is that the plaintiff has failed to make payment of the outstanding charges (including late payment interest) said to be owing to the defendant. The defendant is relying on clause 17 of the SPA, which I reproduce as follows:

17.

Vacant possession of the said Parcel shall be delivered to the Purchaser within fourteen (14) working days from the date if the Vendor’s receipt the Balance Purchase Price together with the late payment interest (if any) and all other sums payable by the purchaser under this Agreement.

Vacant Possession of the said Parcel shall be delivered to the Purchaser by way of the Vendor notifying the Purchaser in writing to take the same within fourteen (14) days of the notice and vacant possession shall be deemed to have been taken by the purchaser upon the expiry of the said fourteen (14) days regardless of whether or not the Purchaser shall have physically taken the same or entered into occupation of the said Parcel. 16

SD1 has also confirmed during re-examination that the key was not handed because there are still amount outstanding in the amount of RM82,206.25, the late interest charges was still outstanding and the plaintiff has not yet to fulfil his obligation under the SPA. SD1 stated “that is why we are unable to give him the key to actually take over possession of the units…in terms of the handing over the keys to plaintiff, we have actually sent out a number of letters informing him as long as he paid out the outstanding charges, we will actually hand over to him.”

The outstanding charges said to be owing by the plaintiff are made up of late payment interest owing to the defendant, deposit for TNB and Syabas, maintenance charges, sinking fund, quit rent, processing fee, etc.

The defendant is relying heavily and entirely on clause 17 of the SPA as the defendant’s sword and shield against the plaintiff. The defendant is basically saying as long as there is no payment of the outstanding sum said to be owing by the plaintiff, the defendant is entitled to withhold the key. SD1 has also testified that it is the defendant’s practice to do so.

I am of the opinion that the defendant is not left without other avenue, whereby the defendant could have handed over the keys to the plaintiff and initiate legal proceedings against the plaintiff for the outstanding payment, like what the defendant is doing now. I do not think 17 this idea has never crossed the defendant’s mind, this is because it is clearly stated in the second VP notice dated 2 December 2010 that: Without prejudice to our right to claim the outstanding late interest charges totalling RM52,238.74 only … we hereby give you notice for the delivery of vacant possession for the Property to you…

The defendant indeed could have issued this statement back in 2008 and hand over the keys to the plaintiff. During cross examination, when asked that the defendant could have used this letter in the first VP notice, SD1 answered “we could have, but we did not.”

In fact, whether expressly reserving rights or not, it is still the defendant’s legal rights to sue when a sum is due and owing. There is no reason for the defendant to act in such an oppressive manner, leaving the plaintiff high and dry. I find the defendant’s action of withholding the keys for more than 2 years unreasonable.

The defendant’s reliance on the case of Everest Point Sdn Bhd & Anor v Lim Peck Sim & Ors (supra) cannot be applied to the facts of the instant case. This is because in Everest’s case, the purchaser had failed/ refused to perform their part of obligation under the SPA by tendering the balance purchase price. Further, in the Everest’s case, the purchaser was found to seek to take advantage of more attractive benefit (LAD) by refusing/ delaying in accepting VP. Whilst in this case, the plaintiff had 18 paid the full purchase price and was never attempting to delay in accepting VP.

Based on the above, I find the defendant liable against the plaintiff for the defendant’s failure and/or refusal to hand over keys to the plaintiff after more than 2 years despite full payment of purchase price and the 3 VP notices. I am unable to accept the defendant ’s reason of not handing over the keys based on the explanation above.

This is particularly unjust having full knowledge that the plaintiff was at all material times, disputing the outstanding sum. I therefore agree with the learned counsel for the plaintiff that the defendant is the author of its own misfortune. The disputed outstanding sum

As mentioned above, the outstanding charges claimed to be owing by the plaintiff are made up of late payment interest, maintenance charges, sinking fund, quit rent, deposits for electricity and water connection and processing fee (“outstanding sum”).

In relation to late payment interest, the plaintiff contends that the plaintiff is not in control of the disbursement of balance purchase price and therefore the plaintiff should not be made responsible for the late disbursement of the balance of the purchase price. 19

The plaintiff further contends that the defendant has waived the rights to claim for late payment interest when the defendant chose not to terminate the SPA after failing to receive the balance purchase price within the stipulated period. By doing so, the plaintiff contends that the defendant had chosen to put time at large.

In relation to the maintenance charges, etc, the plaintiff contends that the charges are irregular because:

the management corporation of CBD Perdana (“MC”) was established on 23 February 2008;

(ii) the plaintiff is subjected to double claim by both the MC and the defendant;

(iii) the figure claimed for water and electricity deposit is higher than those claimed by MC;

(iv) the plaintiff is not responsible to pay any quit rent, sinking fund and maintenance charges in respect of the Units until VP is handed to the plaintiff ; and

in any event, payments of quit rent/ assessment are to be made directly to the relevant authorities and not to the defendant.

I do not agree that the defendant has waived their rights to claim for LPI and I will explain in details at the later part of the grounds. 20

It is not disputed that the MC was incorporated on 23 February 2008, ie. 3 months before the first VP notice. As the successor in title to the defendant, MC is entitled to recover from the plaintiff any unpaid outgoings. This is also consistent with clause 8 of the SPA which provides that the plaintiff shall pay to the defendant outgoings until the day MC is formed.

SD1 was asked whether the defendant is aware that once a MC is formed, it would be illegal or irregular for the third party to demand for maintenance charges, to which SD1 answered “I am not aware”. The plaintiff’s learned counsel asked again whether SD1 agrees that the rightful party who can demand for such payment is the MC, and not the defendant, SD1 answered “based on what you have told me, that may be the case…”.

I find SD1’s answers to those questions dubious. This is because SD1, whom held a very senior position as CFO (as she was then) is expected to have some basic knowledge on the related law. Particularly when she has testified at the very early stage of the cross examination that she is familiar with the conveyancing practice and process in Malaysia.

Based on the above, I agree with the plaintiff ’s learned counsel that the defendant is no longer entitled to charge for all the outgoings after the incorporation of MC on 23 February 2008. This would mean that the 21 correct party to recover any maintenance charges, etc, would be the MC, and not the defendant. This is clear and obvious under s. 20 of the Building and Common Properties (Maintenance & Management) Act 2007 which provides that:

Any person who contravenes this section commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand ringgit or to imprisonment for a term not exceeding one year or to both.

On this ground alone, I find the defendant action of demanding the outgoings and withholding keys for non-payment of the outgoings mala fide and against the terms of the SPA and law.

I have explained in the earlier part of the grounds that the defendant is wrong in withholding the keys for outstanding payment of late payment interest. In any event, applying the decision in Welco Kitchen Sdn Bhd v P E Setia Construction Sdn Bhd [2011] MLJU 1144, the amount of outgoings and/ or late payment interest owing, if any, is too trivial to entitle the defendant to withhold delivery of vacant possession, particularly when the plaintiff has made full payment of the balance purchase price. Based on the same reason, I find that the case of Berjaya Times Square Sdn 22 Bhd v M Concept Sdn Bhd (supra) relied by the defendant is also not applicable to the fact of the instant case.

It is not disputed that the plaintiff had made full purchase price of the Units. Payment of the full purchase price is in fact performance of the plaintiff ’s core obligation under the SPA. The plaintiff is therefore entitled to VP of the possession.

As a recap, I find that:

the first VP notice is not in accordance to the terms of the SPA and invalid. It is further invalidated by the second and third VP notices;

the 3 VP notices issued by the defendant are the most paper VP;

paper VP is not acceptable when the defendant withholding the keys and denied the plaintiff’s right to occupy and enjoy the

the defendant’s defence of withholding the keys for outstanding payments owing is mala fide and invalid;

the defendant is not entitled to demand for the maintenance charges, deposit for utilities, sinking fund, quit rent, etc as the proper party to claim is rightfully the MC;

the defendant’s baseless excuses in refusing to hand over the keys is fatal and the defendant cannot be unjustly enriched by 23 receiving the full payment of purchase price and yet refusing to hand over the keys for a period of more than 2 years.

Based on the above, I come to the conclusion all the 3 VP notices issued by the defendant are in contradiction to each other and invalid. I accept that it is only fair for the actual VP date to be on 17 January 2011 which is the date the plaintiff was given the keys for the very first time during the appointment (though incomplete).

Upon reaching this conclusion, I find the defendant liable to the plaintiff as a result of the defendant’s refusal and/or failure to hand over VP to the plaintiff after receipt of the full purchase price.

After execution of the SPA and in anticipating VP of the Units, the plaintiff had entered into tenancy agreement (“TA”) with Jabatan Tenanga Kerja Semenanjung Malaysia (“JTKSM”) for a term of 3 years from 16 May 2008 to 15 May 2011 at the rental rate of RM28,7000.00 per month.

The plaintiff claims that the failure of the defendant to deliver keys has resulted the TA to be terminated and consequentially the plaintiff has suffered damages of loss of rental income. 24

In the statement of claim, the plaintiff claimed for loss of rental income for the entire contract term from 16 May 2008 to 15 May 2011, the plaintiff has however abandoned this sum in the written submission and only claimed for 3 months rental in the sum of RM86,100.00 ( ie. RM28,700.00 X 3 months).

The defendant’s learned counsel contends that as the TA was entered into on 16 May 2008, ie. before the payment of balance purchase price on 4 August 2008 and there was no evidence of the plaintiff receiving any payment of deposit from JTKSM.

I find no reason to reject the TA as it was duly dated, executed before respective witnesses and carried the stamp “terkecuali daripada duti setem… 2008/06/33”. The same has been confirmed by a letter from JTKSM dated 13 June 2008 which returned 3 copies of the duly executed and dated TA to the plaintiff.

I also find that the plaintiff ’s action of entering into the TA with JTKSM before payment of full purchase price justifiable. The SPA was entered into on 1 February 2008. In this regard the completion date should be 3 months or 4 months (extended) from 1 February 2008, deposit had been duly paid by the plaintiff and loan has also been obtained for purposes of financing the purchase of the Units.

It is therefore reasonable and natural for the plaintiff to anticipate that the SPA transactions will be completed in due course and vacant 25 possession will be delivered. What the plaintiff did not anticipate is of course the refusal of handing over keys by the defendant.

During cross examination, SD1 has agreed that the Units, being commercial titles and shop lot, are to be used for commercial purposes, including to generate rental income. The fax by one Fatimah from the defendant which states that-This Unit is expected to be rented to the Ministry of Human Resource; and …

This clearly showed that the defendant has prior knowledge that the plaintiff intended to purchase the Units and rent it out to JTKSM which may generate rental yield of 9% per annum. SD1 however took a contradicting stands in respect of the plaintiff ’s rights in entering into the TA. On one hand, SD1 testified that VP has been duly delivered via the first VP notice dated 21 May 2008 despite no payment of balance purchase price and on the other hand, SD1 testified that the plaintiff has no rights to enter into the TA as he had not been given the keys to the Units.

As mentioned earlier, I find the defendant to be liable for withholding the keys to the Units after receiving full payment of purchase price. It is a 26 natural and direct consequence that the plaintiff would suffer losses in relation to the rental income due to failure of the defendant to hand over the keys.

I am guided by the decision in the case of Alexander John v Rich Avenue Sdn Bhd (supra) wherein it was held that: the plaintiff is put in a position where he could not enjoy the full benefit of the property like renting it out and yet is saddled with the financial burden of servicing his loan repayment with the financial company.

I therefore agree with the learned counsel for the plaintiff that the prospective loss of 3 months rental income is reasonable as damages. Other claims by the plaintiff under general damages

The plaintiff in the statement of claim has also claimed for general damages against the defendant for the delay in handing over the keys to the Units. Under clause 4(3) (“Clause 4”) of the SPA :

If the Purchase is unable to comply with Clause 4(2) above within the time stipulated, the Vendor shall grant to the Purchaser the Extended Completion Date to pay the Balance Purchase Price outstanding subject to the Purchaser paying interest to the Vendor at the rate of ten per centum (10%) per annum calculated on a daily basis from the commencement of the Extended Completion Date 27 until such time as the Balance Purchase Price shall have been paid in full.

The above clause is also the basis the defendant relies on in the defendant’s counter claim against the plaintiff which I will deal with it later.

There is no default clause on the part of the vendor under the SPA. SD1 has confirmed the same during cross examination. This would mean that there is no penalty clause imposed against the defendant in the event the defendant fails and/or refuses to hand over VP/ keys of the Units to the plaintiff after full payment of the purchase price.

The learned counsel for the plaintiff contends that in view of the silent of the SPA and based on Clause 4, what is good for the geese must be good for the gander, hence it is only fair that the plaintiff is also entitled to charge the defendant the same rates of default 10% per annum on daily basis as penalty.

Based on the above calculation, the plaintiff’s claim for general damages as detailed by the plaintiff in the written submission is as follows: 10% per annum to be calculated on daily basis on the total purchase price = RM957.96 per day. RM957.98 x 896 days of delay (4.8.2008 full payment day to 17.1.2011 VP date) = RM858,350.08. 28

There is no reply by the defendant in relation to the plaintiff’s claim for general damages and the calculation of LAD.

I have earlier established the defendant’s liability against the plaintiff for breach of the defendant’s contractual duty. It is therefore a direct and natural consequence that the defendant is liable to pay to the plaintiff damages as a result of such breach.

In the absence of any default clause against the defendant, I agree with the plaintiff’s learned counsel that the same rate of 10% default penalty ought to be applied to the defendant in the event of the defendant’s default. This is also consistent with the decision in the case of Setul Raya Sdn Bhd v Hariram a/l Jayaram & Ors [2008] 4 MLJ 852 where it was held that: [17] We now turn to the cross appeal. In four of the appeal 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 balance sum due from each respondent to the appellant. However there was at 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…. Accordingly, in our judgment, the notices relied upon by the appellant were clearly invalid because delivery of vacant possession 29 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…

I am of the opinion that the defendant must not be allowed to gain full protection under the SPA and offers no protection at all to the plaintiff. The plaintiff’s loss and damage is a direct consequence of the defendant’s breach. General damages which are not too remote shall be allowed (see Malaysian Rubber Development Corp Bhd v Glove Seal Sdn Bhd [1994] 3 MLJ 569; Dato’ Anuar Embong & Ors. v Bank Bumiputera (M) Bhd. [1997] 2 CLJ 475)

The defendant must not be allowed to take full advantage of the terms in the SPA (such as the deeming provision and the no default clause situation). In all fairness and justice, the plaintiff should be allowed the same rate of 10% interest per annum on the total purchase price. I find the plaintiff’s learned counsel’s calculation reasonable and fair.

I therefore allow general damages in the sum of RM858,350.08 against the defendant.. Assertion of non-pleading by the defendant 30

I have read through the submission of the defendant on this small issue and found that it does not carry weight. All documents have been marked as Part B documents. Therefore, admissibility is not in question only the weight (see Philomena Mathalamuthu v Mayglobe Logistics (M) Sdn. Bhd. [2012] 5 CLJ 133). I noticed that many of the documents relied upon during the trial are documents originating from the defendant for the purposes of the defendant’s counterclaim.

Unfortunately, within those documents, there were materials which were detrimental to the defendant’s own defence. The defendant cannot now assert so and shift its position whenever it fancies. I also find that the evidence in this trial does not vary with the pleadings at hand.

On the issue of pleadings, I find that it is quite clear that the facts behind the plaintiff’s grievances were sufficiently pleaded. So much so that there was a repeat of pleadings made clear in paragraph 22 of the defence & counterclaim. I am also of the view that the objection raised was too wide and general and was not specific.

The defendant was aware that the plaintiff had claimed for damages as a result of the defendant’s breach of contract. There is no radical departure from the plaintiff’s pleadings and the evidence at trial did not establish totally different facts. The evidence given during trial would certainly have prevented any surprise (it was even based on the defendant’s own documents). 31

I am guided by the Federal Court case of Ang Koon Kau & Anor v. Lau Piang Ngong [1984] 2 MLJ 277 where it was held that evidence given at the trial can therefore in appropriate circumstances overcome defects in the pleadings where the net result of such evidence is to prevent the other side from being taken by surprise.

On the issue of VP, I find actual delivery date of VP by the defendant to the plaintiff to be on 17 January 2011.

On the counterclaim by the plaintiff, I allowed the plaintiff’s claim against the defendant. I allowed RM86,100 for loss of income rental and RM858,350.08 for general damages. Thus, the total amount of loss and damage is fixed at RM994,450.08.

I also allowed the defendant’s counterclaim in the sum of RM52,238.74. The defendant’s counterclaim sum allowed to be set off against the plaintiff’s loss and damage. After set off, the defendant is ordered to pay to plaintiff the sum of RM892,211.34.

I also ordered interest at 5% per annum from date of filing of defence & counterclaim dated 22 December 2011 to the date of this judgment. Further interest at 5% per annum from the date if this judgment until full settlement of the judgment sum. 32

The defendant is also ordered to pay to the plaintiff costs in the amount of RM40,000 and the plaintiff to pay to the defendant costs in the amount of RM5,000. The defendant’s cost to be set off with the plaintiff’s cost and the defendant is ordered to pay to the plaintiff cost of RM35,000. Dated this 29th day of March, 2018 sgd (ISHAK BIN BAKRI) Judge,