Dominic Simon Brown & 9 Lagi v Crest Worldwide Resources Sdn Bhd (WA-22NCVC-305-05/2018)

DOMINIC SIMON BROWN

ROBERT JORDAN

JOHN MARIUS KWEE

JASON WILLIAM MARTIN CREASEY

JAYNE EDWINA CREASEY

MAHESH KUMAR SHAH

NILESH NATHWANI

PANNA NATHWANI

RAMESH RADIA (BRITISH PASSPORT NO: 517981349) 2

INDIRA RADIA (BRITISH PASSPORT NO: 099104108) … PLAINTIFFS AND CREST WORLDWIDE RESOURCES SDN BHD (COMPANY NO. 701381-H) … DEFENDANT GROUNDS OF JUDGMENT Introduction [1] There were two applications before this Court; the Plaintiff’s Notice of Application dated 6.7.2018 (Enclosure 6) for summary judgment under O. 14 of the Rules of Court 2012 (‘RoC 2012’); and the Defendant’s Notice of Application dated 3.8.2018 (Enclosure 10) to strike out the Plaintiff’s Writ of Summons and Statement of Claim 3 (‘SoC’) both dated 24.5.2018 under O. 18, r. 19(1) (b), (c) and/ or (d) RoC 2012 and/ or the inherent jurisdiction of the Court. [2] Having heard oral submissions by learned counsels for the Plaintiff and the Defendant and having read the Affidavits and written submissions which had been filed, I dismissed the Defendant’s application under O. 18, r. 19(1) RoC 2012 with costs of RM5,000.00 and allowed the Plaintiff’s application under O. 14 RoC 2012 with costs of RM5,000.00. Both order as to costs are subject to the payment of allocatur fees. [3] Being dissatisfied, the Defendant has filed a Notice of Appeal against my entire decision in respect of Enclosures 6 and 10. These are my full grounds for the decision. The Cause Papers [4] The relevant affidavits in respect of Enclosure 6 are as follows: 4

the Plaintiffs’ Affidavit In Support (‘AIS’) affirmed on 4.7.2018 (Enclosure 7);

the Defendant’s Affidavit In Reply (‘AIR’) affirmed on 23.7.2018 (Enclosure 8);

the Plaintiffs’ AIR affirmed on 31.7.2018 (Enclosure 13); and

the Defendant’s Notice of Intention To Use the AIS of Wong Yew Hume affirmed on 3.8.2018 (Enclosure 12). [5] As for Enclosure 10, the following are the related affidavits:

the Defendant’s AIS affirmed on 3.8.2018 (Enclosure 11); and

the Plaintiffs’ AIR affirmed on 17.8.2018 (Enclosure 14). [6] The 3rd Plaintiff was authorised by all the other Plaintiffs to affirm the above mentioned Plaintiffs’ Affidavits on their behalf. 5 Brief background facts [7] According to the SoC, all 10 Plaintiffs are British citizens and residing in the United Kingdom with the exception of the 2nd Plaintiff who has an address in Saudi Arabia. [8] At the material time, the Defendant was the registered proprietor of the piece of held under No. HS (D) 114677 PT 32 Section 44 (formerly known as PN No. 21371, Lot No. 134, Section 44) in the Town of Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur (‘said Land’). The said Land was held on lease for 99 years expiring on 26.8.2106. [9] The Defendant embarked on a project to develop the said Land into a commercial development comprising of, inter alia, 1 tower of service suite, 1 tower of office suit, several levels of car park area and some commercial areas known as The Crest Jalan Sultan Ismail (‘said Development’). 6 [10] By way of seven Sale and Purchase Agreements (‘SPAs’) dated 6.12.2007, 9.1.2008, 4.2.2008, 6.2.2008 and 25.4.2009, the Plaintiffs purchased several parcels being residential units at The Crest from the Defendant at prices which ranged from RM797,425.00 to RM1,470,560.00. [11] All the SPAs were drafted by the Defendant’s solicitors and, except for the particulars of the Plaintiffs and their respective parcels, contain identical terms and conditions. [12] For purposes of the present applications, Clause 24 of the SPAs is relevant and it states as follows: “24. TIME FOR HANDING OVER OF VACANT POSSESSION

24.1 The premises shall be completed by the Developer and vacant possession of the Premises shall be handed over to the Purchaser within the Completion Date. 7

24.2 Subject to the provision of this Agreement, if the Developer fails to hand over vacant possession of the Premises within the Completion Date, the Developer shall pay immediately to the Purchaser liquidated damages to be calculated from day to day at the rate of ten per centum (10%) per annum of the Purchase Price form the date of the expiry of the Completion Date up to the day of delivery of vacant possession of the Premises.”. [13] The Defendant failed to hand over vacant possession of the parcels to the Plaintiffs within the Completion Date which is provided under Section 7 of Appendix 1 of the SPAs as 48 months from the date of the respective SPAs. Therefore, the Plaintiffs contended that the Defendant is liable to pay them liquidated damages in the amounts as shown below: 8 No. Plaintiff Date of Handing Over of Vacant Possession Length of Delay (days) Total Liquidated Damages Due and Payable

1st Plaintiff 15.11.2017 2,172 559,179.91 2. 2nd Plaintiff 14.11.2017 2,137 474,414.00 3. 3rd Plaintiff 15.11.2017 2,138 840,064.13 4. 4th & 5th Plaintiffs 14.11.2017 1,665 363,756.88 5. 6th Plaintiff 15.11.2017 2,112 850,910.33 6. 7th & 8th Plaintiffs 15.11.2017 2,110 841,687.67 7. 9th & 10th Plaintiffs 15.11.2017 2,112 846,697.90 TOTAL 4,776,710.84 [14] The Plaintiffs claim for liquidated damages include interest at the rate of 5% per annum on the sums shown in the last column in the table above calculated from the date of handing over of vacant possession up to the date of full payment. [15] No Defence was filed by the Defendant. 9 Enclosure 10: Defendant’s Application to strike out the Plaintiffs’ Writ of Summons and SoC The Defendant’s Submission [16] Learned counsel for the Defendant submitted that this is a plain and obvious case that ought to be struck out pursuant to O. 18, r. 19(1)

(b), (c) and/ or (d) RoC 2012 because the Plaintiffs have no locus standi to bring this action in the manner that they have done so. The 1st Plaintiff had obtained a loan from Asian Finance Bank Berhad (‘AFBB’) and by virtue of Clause 3 of the Deed of Assignment dated 9.10.2008 (‘AFBB DoA’), it was contended that the 1st Plaintiff had absolutely assigned all of his rights, title and interest in the parcel to AFBB and thus has no locus standi to bring this action unless the 1st Plaintiff first obtained approval from AFBB to do so. [17] The other nine Plaintiffs took loans from CIMB Bank Berhad (‘CIMB’). The Deeds of Assignments executed (‘CIMB DoA’) contain similar Clauses as the AFBB DoA. The Defendant relied on Clauses 1 and 10 6(i) of the CIMB DoA to justify the argument regarding the absence of locus standi as aforementioned. [18] Mr. A.S. Gill referred to the decision of the Federal Court in Damai Freight (M) Sdn Bhd v Affin Bank Bhd [2015] 4 MLJ 149 which was followed by Nordin Hassan J in RHB Bank Berhad dan satu lagi v Crest Wordwide Resources Sdn Bhd [2017] MLJU 1316 to support his submission that since there is an absolute assignment, AFBB and/ or CIMB must either bring the action themselves or re-assign that right back to the Plaintiffs. AFBB and/ or CIMB having done neither, and there being no evidence before the Court that the Plaintiffs have consulted or notified those banks of this claim, the Plaintiffs are said to have acted prematurely and failed to establish the threshold requirements of locus standi to maintain this action. The cases of Hup Lee Coachbuilders Holdings Sdn Bhd v Cycle & Carriage Bintang Bhd [2013] 1 MLJ 406 and Amran bin Ab Rahman & Ors v Dato’ Hj Ikmal Hisham bin Abdul Aziz & Ors (No 1) [2015] 7 MLJ 736 were also cited to bolster the Defendant’s arguments. 11 The Plaintiffs’ Submission [19] In response, learned counsel for the Plaintiffs undertook a detailed analysis of the decisions in Nouvau Mont Dor (M) Sdn. Bhd. v Faber Development Sdn. Bhd. [1984] 2 M.L.J. 268; Chooi Siew Cheong v Lucky Height Development Sdn Bhd & Anor [1995] 1 MLJ 513; Khaw Poh Chhuan v Ng Gaik Peng & Ors [1996] 1 MLJ 761; Chuah Eng Khong v Malayan Banking Bhd [1998] 3 MLJ 97; Max-Benefit Sdn Bhd v Phuah Thean An & Anor [2001] 2 CLJ 70; Lim Hock Lai v. Hwa Kwong Development Sdn Bhd [2001] 5 CLJ 515; Berjaya Times Squares Sdn Bhd (formerly known As Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597; Lestari Puchong Sdn Bhd v Md Noor Othman & Anor [2014] 1 LNS 1246; Damai Freight (supra); and Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1. [20] Mr. Y. H. Loke submitted that the following principles can be distilled from the decisions of the apex court in those cases: 12

in construing an agreement, regard must be given to the whole agreement, as well as the surrounding circumstances, if any, which might legitimately be taken into consideration;

in construing the meaning of an instrument, the meaning would be the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed;

in determining whether an assignment is an absolute assignment –

where the assignment is conditional, it is not an absolute assignment;

(ii) where the assignment contains conditions rendering the assignment a contingent assignment, it is not an absolute assignment; and 13

(iii) where the assignment is to terminate upon the occurrence of some event, the assignment is not an absolute assignment. [21] Learned counsel further contended that despite the position having been clarified in Chuah Eng Khong, the Federal Court in Damai Freight adopted the overruled reasoning in Nouvau Mont and held that such assignment is an absolute assignment due to the words “absolutely assign” being used. However, in Mr. Loke’s opinion, this decision must be treated per incuriam as it did not consider the effect of Nouvau Mont being expressly overruled in Berjaya Times Squares and is generally inconsistent with the successive Federal Court decisions in Chooi Siew Cheong, Khaw Poh Chhuan, and Chuah Eng Khong. Interestingly, a few months after Damai Freight was decided, the Federal Court Samuel Naik Siang Ting reverted to the original position set out in Chuah Eng Khong, where an assignment in this nature is an equitable mortgage. [22] It was finally submitted for the Plaintiff that while there may have been some confusion in the early days, the position of the purchaser 14 vis-à-vis his financier, when an assignment is created to secure a loan, is now trite. Where the assignment is meant as an equitable mortgage or charge as the assignments in the present case, which are merely to secure the loan taken to purchase the respective parcels, the assignment is not an absolute assignment. Purchasers like the Plaintiffs here would thus have the locus standi to initiate legal action against the developer. [23] In reply to the foregoing, Mr. A. S. Gill for the Defendant submitted that the law on absolute assignment as pronounced in Damai Freight has revoked the position of Nouvau Mont Dor and since Damai Freight is a later Federal Court decision, Berjaya Times Square and all decisions pre-Damai Freight which are in conflict with Damai Freight can no longer be accepted as good law. Learned counsel disagreed that Damai Freight is to be treated as a judgment decided per incuriam. [24] It was further argued that the decisions in Siang Ting and Samuel Naik Siang Ting do not reflect the correct position of the law because in Malaysia, a Deed of Assignment is the instrument resorted to as 15 protection to the lender during the period up to the issuance of a title whereas in England, the concept of mortgage prevails. The words in the Deed of Assignment have to be scrutinised and if they disclose an intention for the assignment to be an absolute assignment, then consent of the assignee is required before any legal action can be initiated by the Plaintiffs. The Law [25] The basis of the Defendant’s striking out application is that the Writ and SoC is scandalous, frivolous or vexatious; it may prejudice, embarrass or delay the fair trial of the action; and/ or it is otherwise an abuse of the process of the Court as provided under O. 18, r. 19(1)(b), (c) and (d) RoC 2012. [26] As an alternative, the Court was urged to order a striking out under its inherent power to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court under O. 92, r. 4 RoC 2012. 16 [27] The legal principles on striking out is well established; Ramly Ali FCJ in Seruan Gemilang Makmur Sdn Bhd v. Kerajaan Negeri Pahang Darul Makmur [2016] 3 MLJ 1 at pages 12 - 13 explained it in the following words: “[25] The principles for striking out pleadings pursuant to O.

19 of the ROC are well settled. It is only in a plain and obvious case that recourse should be had to the summary process under this rule; and this summary process can only be adopted when it can clearly be seen that a claim on the face of it is obviously unsustainable (see: Bandar Builder (supra), Hubbuck & Sons Ltd v. Wilkinson, Heywood & Clara Ltd [1899] 1 QB 86; Attorney General of the Dutch of Lancaster v. London and North Western Railway Company [1892] 3 CH 274). [26] The tests for striking out application under O. 18 r. of the ROC, as adopted by the Supreme Court in Bandar Builder (supra) are, inter alia as follows: 17

it is only in plain and obvious cases that recourse should be had to the summary process under the rule;

this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it ‘obviously unsustainable’ (emphasis added);

it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence; and

If there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r.3 of the ROC; and

The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable. 18 [27] The Court of Appeal, in Sivarasa Rasiah & Ors v. Che Hamzah Che Ismail & Ors [2012] 1 CLJ 75; [2012] 1 MLJ 473; had adopted the well-settled principle of striking out in the following passage A striking out order should not be made summarily by the court if there is issue of law that requires lengthy argument and mature consideration. It should also not be made if there is issue of fact that is capable of resolution only after taking viva voce evidence during trial, (see Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 2 MLJ 565 (Federal Court)). [28] The basic test for striking out as laid down by the Supreme Court in Bandar Builder (supra) is that the claim on the face of it must be ‘obviously unsustainable’. The stress is not only on the word ‘unsustainable’ but also on the word ‘obviously’ ie, the degree of unsustainability must appear on the face of the claim without having to go into lengthy and mature consideration in detail. If one has to go into lengthy 19 and mature consideration in detail of the issues of law and/or fact, then the matter is not appropriate to be struck out summarily. It must be determined at trial. [29] The established rule on this point is that the court should not examine the evidence in this summary proceedings in such a way as to amount to conducting a trial on the conflicting affidavit evidence….”. [28] In view of the fact that the issue raised by the Defendant pertains to the AFBB DoA and CIMB DoA, it should be mentioned that the law on assignment is set out in subsection 4(3) of the Civil Law Act 1956 [Act 67] as follows:

“Administration of insolvent estates, and winding up of companies

…

Any absolute assignment, by writing, under the hand of the assignor, not purporting to be by way of charge only, of any debt or other legal chose in action, of which express 20 notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to receive or claim the debt or chose in action, shall be, and be deemed to have been, effectual in law, subject to all equities which would have been entitled to priority over the right of the assignee under the law as it existed in the State before the date of the coming into force of this Act, to pass and transfer the legal right to the debt or chose in action, from the date of the notice, and all legal and other remedies for the same, and the power to give a good discharge for the same, without the concurrence of the assignor.”. Evaluation and findings of the Court [29] The AFBB DoA and CIMB DoA can be seen in exhibit “W-1” in the AIS (Enclosure 11) affirmed by the Defendant’s Director, Wong Yew Hume. 21 [30] Clause 3 in the AFBB DoA reads as follows: “3. Assignment In consideration of the Assignee agreeing or having agreed at the request of the Assignor to grant to the Assignor the Facility and as security for the due payment of all monies payable by the Assignor to the Assignee under the Facility Agreement and/or the Security Documents, the Assignor as the beneficial owner of the Property, hereby assigns absolutely unto the Assignee the rights, interest and title of the Assignor in the Property under the Principal Sale Agreement and all remedies for enforcing the same subject to the terms of this Assignment.”. [emphasis added] [31] Similar provisions appear in the CIMB DoA, as quoted below: “1. The Assignor as beneficial owner of the said Property hereby assigns unto the Bank absolutely all the rights, 22 title and interest of the Assignor in and to the said Property whether by virtue of the Sale and Purchase Agreement, any other agreement and/or contract by which the Assignor has acquired any rights and/or interest in the said Property or otherwise, with full benefit granted thereby, all stipulations therein contained, and all remedies for enforcing the same.”. [emphasis added] [32] Additionally, one of the undertakings given by the Assignor in Clause 6(i) in the CIMB DoA is that “unless with the prior written consent of the Bank, the Assignor shall not be entitled to initiate, commence, institute and/or maintain in any court or tribunal any action, suit or proceeding against the Vendor, any housing developer, contractor or any other person, in respect of any matter arising out of the Sale and Purchase Agreement, any other agreement and/or contract assigned to the Bank under this Assignment and/or the said Property;” [emphasis added]. 23 [33] As submitted by the Plaintiffs’ counsel, the apex court had occasion to expound on the legal position of an assignment created as security for a loan to purchase an assigned property in several cases. This began with Nouvau Mont Dor (supra) where at page 270 of the report, Seah F.J. expressed the view that “whether or not an agreement is an absolute one (not purporting to be by way of charge only) within the meaning of s 4(3) of the Civil Law Act, 1956 is to be gathered only from the four corners of the instrument itself.”. The Federal Court found that the document in that case was clearly purported and intended in point of form to be an absolute assignment because of the use of the word “absolutely” in clause 1 of the document. [34] However, the Federal Court in Chooi Siew Cheong (supra) adopted a different approach in the construction of an agreement. Chong Siew Fai FCJ, in delivering the judgment of the Court held, inter alia at page 522 of the report, that in construing an agreement, it would not be right to look at one clause in isolation. All the other relevant clauses in an agreement must also be considered in the context of the whole of the transaction. Regard must also be had to any 24 surrounding circumstances, if any, which might legitimately be taken into consideration. [35] Subsequently, the Federal Court in Khaw Poh Chhuan (supra) at page 774 of the report laid down that - “…To determine if the assignment is conditional or absolute, the test of an absolute assignment should normally be only that it is one by which the entire interest of the assignor in the chose in action (such as the interest as claimed by the assignee herein) is, for the time being, transferred unconditionally to the assignee and placed completely under the assignee's control. Therefore, on a true construction of the agreements, the question is this, was the beneficial interest of the assignor in the estates of both the deceased father and the deceased mother transferred unconditionally to the assignee? If the answer is affirmative, the assignment is absolute.”. [emphasis added] 25 The propositions that can be distilled from the analysis and findings of the Court regarding the relevant clauses in the document before the Court are neatly summed up in the Plaintiffs’ submissions viz. where the assignment is conditional; contains conditions rendering the assignment a contingent assignment; or the assignment is to terminate upon the occurrence of some event, the assignment is not an absolute assignment. [36] The nature of an assignment was further explained in Chuah Eng Khong (supra, at pages 108 -109) where Peh Swee Chin FCJ delivered the judgment of the Court in the following words: “…At common law and under the relevant rules of equity, the said loan agreement would amount to an equitable mortgage because the assignment of the right, title and interest in the said land was expressly or obviously for the purpose of securing the loan given to the borrower to purchase the said land. The said loan agreement is not an out-and-out purchase of the said land. This view is reinforced by the promise that when the document of title of the said land was 26 available after the completion of the subdivision aforesaid, the borrower would execute a charge in favour of the lender according to the provisions of the National Land Code 1965 ('the NLC'). It is true that nowhere in the said loan agreement has the word 'mortgage' been used, but it is a security transaction in connection with the loan given by the lender with a provision for repayment, after which, the borrower ‘shall be entitled … to obtain a discharge and release of the said lot from the lender’ (see cl 27 of the said loan agreement). Thus, we have the loan, the contractual right to repay or to redeem the said land and the assignment of all ‘right, title and interest’ in the said land pending the exercise of such contractual right to redeem. The said loan agreement, therefore, at common law, will be a mortgage. It would be an equitable mortgage (and not a legal mortgage) because the borrower at the time of signing the said loan agreement had no legal estate (or registered proprietorship of a grant of land) but only an equitable interest as a purchaser by contract from a housing developer, pending the issuance of a separate document of title aforesaid. In other 27 words, it is a mortgage in equity for which the actual form of words is immaterial, provided the meaning is plain when interpreting a document as a mortgage or equitable mortgage; see William Brandt's Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 at p 462. If it is an equitable mortgage, like a legal mortgage, the borrower has obtained a second right to redeem after the contractual date for redemption has expired, ie he has got the equity of redemption for, in the eyes of equity, the lender is not the owner of the said land notwithstanding the said assignment, but the borrower is, but subject to the mortgage, and the lender is a mere ‘incumbrancer’. The equity of redemption arises as soon as any document, on a true construction, is found to be a mortgage.…” [emphasis added] [37] Next came the decision in Berjaya Times Squares. Gopal Sri Ram FCJ referred to the English authorities in Prenn v Simmonds [1971] 3 All ER 237; Investors Compensation Scheme Ltd v West Bromwich 28 Building Society; Investors Compensation Scheme Ltd v Hopkins & Sons (a firm) & Ors; Alford v West Bromwich Building Society & Ors; Armitage v West Bromwich Building Society & Ors [1998] 1 All ER 98; Bank of Credit and Commerce International SA (in liquidation) v Ali & Ors [2001] 2 WLR 735; and Attorney General of Belize & Ors v Belize Telecom Ltd [2009] UKPC 10 (supra, at pages 621 – 622) and emphasised that the court is concerned only to discover what an instrument means. However, that meaning is not necessarily or always what the authors or parties to the document would have intended but rather the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed. In light of this guideline on the interpretation of contracts, the Federal Court ruled that the view of Seah FCJ in Nouvau Mont Dor was not good law and should not be followed. [38] 5½ years later, the Federal Court in Damai Freight (supra, at page 157) examined the issue of the legal effect of an absolute assignment and Abdull Hamid Embong FCJ, for the Court, had this to say: 29 “[24] Whether or not an assignment is an absolute one not purporting to be by way of charge or security only is to be gathered only from the four corners of the instrument itself and all the terms of the instrument must be considered (see Nouvau Mont Dor (M) Sdn Bhd v Faber Development Sdn Bhd [1984] 2 MLJ 268). [25] In the present case, the assignment document is the LACA, in which cl 7(1) therein states that the appellant, as the borrower, ‘absolutely assigns to the bank the lease of the said land and the full and entire benefit of the principal agreement together with the rights, title and interest of the borrower therein’. In this regard, the use of the words ‘absolutely assigns’ in the provision of the LACA clearly demonstrates that the instrument was intended by the parties to be an absolute assignment and not one by way of charge only (see Hipparion (M) Sdn Bhd v Chung Khiaw Bank Ltd [1989] 2 MLJ 149). The law in relation to absolute assignment is clear. An absolute assignment is an equitable mortgage and the essence of a mortgage is that there is a 30 transfer of the ownership of a chose in action, not the land, to the mortgagee (see Bupinder Singh and Chuah Eng Khong)….”. [emphasis added] Clearly, reference was made to Nouvau Mont and Chuah Eng Khong but not to Berjaya Times Squares which had expressly overruled the decision in Nouvau Mont. [39] Shortly after, 5 months and 23 days to be exact, a different coram of the Federal Court except for Ahmad Maarop FCJ in Samuel Naik Siang Ting analysed the clauses in the deeds of assignment executed in favour of the respondent in that case and held that the deeds were expressly for the purpose of securing the loans given to the earlier purchasers to purchase the lots. It was further held that the deeds of assignment were equitable mortgages of the earlier purchasers’ rights, titles and interests under the SPAs. As the loan agreement with the appellant was in law an equitable mortgage, it followed that the respondent became an equitable mortgagee and was entitled to invoke the provision in the deeds of assignment upon 31 a default of the loan agreement to deal with all the rights and interest in relation to the property in question absolutely and beneficially. [40] For the sake of completeness, I should also allude to two final authorities relied upon by the Plaintiffs on the issue of assignments before I make my conclusions and these are Max-Benefit Sdn Bhd and Lim Hock Lai (supra). [41] KC Vohrah J (as he then was) in Max-Benefit Sdn Bhd had to consider the issue as to whether the plaintiffs, being two joint purchasers of a property from the defendant, a housing developer, and had jointly assigned their rights, title and interests in the sale and purchase agreement to a bank in return for a loan from the bank to purchase the property, could sue the defendant. His Lordship held (at page 72 - 73 of the report) that: “Nouvau Mont Dor (M) Sdn Bhd was decided on the peculiar facts in the case. Whether or not there has been an absolute assignment is dependent on what was the aim of the transaction. 32 … Although the assignment is stated to be absolute in effect it is not. The assignment was purely for the purpose of securing the loan. What I have adverted to show is that there was a loan which the assignors-purchasers had taken from the bank and that the loan had to be repaid over a period of time and that the rights and interests over the property were assigned as surety to ensure that the loan will be repaid. The loan or any balance or part of it was given “upon the security of the same property.” The implication is that the assignment of the equitable chose in action would come to an end, it would revert back to the assigners on one of the two events taking place, whichever comes earlier. The first event is where the loan is frilly repaid. The second event is where the Developer has obtained the legal title to the property and the property is then transferred to the assignors-purchasers with the consent of the assignee bank. 33 Thus it is quite obvious that the assignment of the equitable estate in the property was conditional and was merely to secure the loan and was not an absolute assignment (see Durham Brothers v. Robertson [1898] 1 QB 765). The assignment to the bank was by way of charge only. There was no absolute assignment in this case and the bank has no locus standi in this case. I therefore hold the purchasers as plaintiffs have locus standi to sue the developer-defendant.”. [emphasis added] [42] The facts in Lim Hock Lai are equally analogous in that it involved the plaintiff purchaser who claimed damages for late delivery of vacant possession of a house purchased from the defendant developer company. Sitting in the High Court of Kuching, Ian HC Chin J at page 518 of the report said: “That statement of law must be read subject to the later decision of the Federal Court in Chooi Siew Cheong v. Lucky 34 Height Development Sdn Bhd & Anor [1995] 2 CLJ 11 a case I relied on in Loh Hoon Loi & Ors v. Viewpoint Properties (Sabah) Sdn Bhd [1995] 4 MLJ 804. The Federal Court in Chooi Siew Cheong v. Lucky Height Development Sdn Bhd & Anor [1995] 2 CLJ 11 appears to have departed from the view of Nouvau (that you are only allowed to look at the four corners of the documents to ascertain its meaning) when it held that: “Regard must also be had to any surrounding circumstances, if any, which might legitimately be taken into consideration.” Thus, I am allowed and must follow the later decision of the Federal Court of Chooi Siew Cheong. Therefore, I am not, contrary to what Ms SY Chan, learned counsel for the appellant, had contended, disregarding the decision of a higher court but only following another decision of the same court. Everything that I have said in Loh Hoon Loi & Ors would apply aptly to this case. The documents employed in the present case in the transaction with the bank clearly show 35 that the assignment was by way of a charge and is not an absolute assignment. Furthermore, transaction such as the one in the present case has been held by the Federal Court in Chuah Eng Khong v. Malayan Banking Berhad [1999] 2 CLJ 917 to be equitable mortgage or charge. Therefore, it is impossible upon a consideration of the terms of the documents employed in the present transaction to conclude that the assignment is not by way of a charge. If the court in Novau had taken the other contemporaneous documents and surrounding circumstances into account, which Chooi Siew Cheong says one must, the Federal Court there would not have concluded the way it did.”. [emphasis added] [43] I have considered Clause 3 in the AFBB DoA, Clause 1 in the CIMB DoA and the other provisions in the Deeds of Assignments in the present case as well as the authorities cited by both learned counsels 36 for the parties and I agree with the Plaintiffs’ submissions that the following factors are supportive of a finding in their favor:

the assignments in this case are for the sole purpose of securing the loans to purchase the Plaintiffs’ residential units. Therefore, the assignments being in the nature of securities, they are not absolute assignments, but are merely equitable mortgage or charge;

the security constituted by the assignments are enforceable in any of the events or circumstances as stipulated in Clause 8.1 of the AFBB DoA, or should the Assignor default in the performance of the agreements and undertakings contained in Clause 6 of the CIMB DoA. Clause 8.3 of the AFBB DoA and Clause 9 of the CIMB DoA further provide as to the manner in which the proceeds from the enforcement of the securities or of the sale of the same are to be applied, respectively. These provisions are indicators that the assignments are not absolute, since if it was intended to be otherwise, there would not be any contingency or conditions when it comes to 37 enforcement and the application of proceeds from such enforcement;

the Deeds of Assignments provide for the assignments to terminate upon the occurrence of certain events; in Clause 6.1 of the AFBB DoA, the assignment shall remain in force until the loan is paid in full and the 1st Plaintiff is obligated to cause a charge to be duly registered in favor of the financier upon the individual title being issued. In the CIMB DoA, the assignments shall be revoked by the due execution and registration of a first legal charge over the units in favor of the financiers or until repayment of all monies due to the financiers. These terminations operate automatically and there is no provision for re-assignment of the units back to the Plaintiffs;

where the assignments are absolute, the assignee would be the only person clothed with the locus to initiate legal action. Such locus cannot be transferred by merely giving consent. The locus must be re-assigned back to the assignor before the assignor is clothed with locus; 38

Clause 6(i) in the CIMB DoA require the 2nd until the 10th Plaintiffs to obtain prior written consent from CIMB before they initiate, commence, institute and/ or maintain any action, suit or proceeding against the Defendant and this goes to show that the assignments are not absolute but merely a charge; and

to any reasonable person reading the Deed of Assignments, the assignments here would be regarded as mere security, and do not amount to an assignment of all the purchaser/ borrower’s rights to the financiers. [44] Additionally, it is my view that the Federal Court in Damai Freight only made a fleeting reference to Nouvau Mont Dor and did not embark on a detailed discussion of all prior judgments of the apex court on the issue of absolute assignments. As such, Damai Freight cannot be said to have reverted the legal position to that as decided in Nouvau Mont Dor and should be read in the context of the factual circumstances in Damai Freight. Moreover, Chuah Eng Khong was cited in Damai Freight and Samuel Naik Siang Ting in support of the 39 conclusion that the absolute assignment is an equitable mortgage, and the loan agreements are in law an equitable mortgage, respectively. Under the circumstances, I am of the opinion that the application of the ratio in Chooi Siew Cheong, Berjaya Times Square, Khaw Poh Chuan, Chuah Eng Khong, Max-Benefit Sdn Bhd and Lim Hock Lai is proper and befitting in light of the factual matrix in the present case. [45] As regards the issue of non-obtainment of written consent in accordance with Clause 6(i) in the CIMB DoA, there is no averment by the Defendant in its AIS (Enclosure 11) on this matter and thus, the Court need not consider this point at all. [46] Premised on the above evaluation of the affidavit evidence and submissions by the parties, it is the considered decision of this Court that the Defendant’s ground for striking out on the basis of the Plaintiffs’ lack of locus standi is baseless and the Writ and SoC cannot be said to be obviously unsustainable to merit the action being struck out summarily. 40 Enclosure 6: Plaintiffs’ application for summary judgment under O. RoC 2012 The submissions of the parties [47] The fact that vacant possession was not given to the respective Plaintiffs within the stipulated time as provided under the SPAs is not in dispute. Hence, it is the Plaintiffs’ case that the Defendant’s failure, refusal and/ or neglect to pay liquidated damages due and payable to the respective Plaintiffs, even after the letter of demand had been sent by the Plaintiffs’ solicitor to the Defendant, constitute a clear breach of the terms of the SPAs. The Plaintiffs relied on the case of Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 to support their argument that this is an apt case for summary judgement to be entered under O. 14 RoC 2012. [48] As against the above submissions, the Defendant proffered three matters which was contended amount to triable issues, namely that – 41

it is entitled to refuse to pay any liquidated damages as the Plaintiffs have failed to give notice as provided under subsection 56(3) Contacts Act 1950 [Act 136];

by virtue of item 10 in the Housing Development (Control and Licensing) (Exemption) Order 2009 [P.U. (A) 63/2009], the Minister has exempted the Defendant from the provisions of the Housing Development (Control and Licensing) Act 1996 [Act 118] (‘HDA 1996’) for the development and sale of houses pertaining to the said Development and thus, the Plaintiffs cannot rely on Clause 24.2 of the SPAs because it is not premised on the statutory form of agreement which sets out what and how the calculation of damages is to be done; and

1,002 days should be deducted from any computation of liquidated damages due to force majeure in accordance with the provision of Clause 32.1 in the SPAs and documents claimed to amount to a certificate issued under Clause 32.2 of the SPAs in exhibit “DSA-2” of the Defendant’s AIR (Enclosure 8). 42 [49] In response, the learned counsel for the Plaintiffs submitted that the Defendant’s purported triable issues are without merit because -

the facts in this case fall within the confines set out in Diong Tieow Hong & Anor v Amalan Tepat Sdn Bhd [2008] 3 MLJ 411 so that where a contract provides for liquidated damages for the delay in completing an obligation, such contact is not voidable on the account of the delay. Hence, the issue of notice under subsection 56(3) Act 136 does not arise since the SPAs are not voidable due to delay;

it is trite that in this category of claims, damages need not be proven by the Plaintiff; and

the events alleged to be force majeure are nothing more than a lack of planning by the Defendant and there is no certificate issued by the Defendant’s architect as required under Clause 32.2 of the SPAs. 43 Evaluation and findings of the Court [50] I begin my evaluation of the issues related to the Plaintiffs’ application for summary judgment by referring to the guidelines expounded by the Supreme Court in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 at page 408 in these words: “… Under an O 14 application, the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an 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 rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in 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 44 sometimes expressed by the statement that a 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 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’….” [emphasis added] [51] Some years later, the underlying philosophy of the summary judgment procedure was explained by Abdul Wahab Patail J in Alliance Finance Bhd (previously known as Bolton Finance Bhd) v Cahaya Kelang Construction Sdn Bhd [2007] 1 MLJ 294 at 299, following the case of Malayan Insurance (M) Sdn Bhd v Asia Hotel Sdn Bhd [1987] 2 MLJ 183 that the O. 14 provision is “to prevent a 45 plaintiff clearly entitled to the money from being delayed his judgement where there is no fairly arguable defence to the claim. The provision should only be applied to cases where there is no reasonable doubt that the plaintiff is entitled to judgement. Order 14 is not intended to shut out a defendant. The jurisdiction should only be exercised in very clear cases.”. [52] The preliminary requirements for an O. 14 application have clearly been established in the case before me, i.e. that the defendant must have entered an appearance; the statement of claim must have been served on the defendant; and the affidavit in support of the application has complied with the requirements of O. 14, r. 2 RoC

Thus, the burden then shifts on the Defendant to raise triable issues meriting a full trial for the determination of the Court (see National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, [1984] 2 CLJ 220; Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) [2006] 2 MLJ 685). [53] I now turn to the question as to whether the Defendant has successfully discharged the burden as mentioned above. 46 - Is notice under subsection 56(3) Act 136 required? [54] Subsection 56(3) Act 136 provides that: “Effect of acceptance of performance at time other than that agreed upon

If, in case of a contract voidable on account of the promisor’s failure to perform his promise at the time agreed, the promise accepts performance of the promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of the acceptance, he gives notice to the promisor of his intention to do so.”. [55] According to the provision on interpretation in Clause 2(i) of Act 136, an agreement which is enforceable by law at the option of one or 47 more of the parties thereto, but not at the option of the other or others, is a voidable contract. [56] Having duly deliberated the submissions of the parties on this point, I entirely agree with the learned counsel for the Plaintiffs that this issue is a non-starter. The legal position has been laid down by Abdul Malik Ishak J in the case of Diong Tieow Hong & Anor v Amalan Tepat Sdn Bhd [2008] 3 MLJ 411 where among the salient issues for His Lordship’s consideration was whether the plaintiffs were entitled to claim for liquidated and ascertained damages (‘LAD’) since they did not give any notice to that effect when the deadline for the completion of the condominium in that case had expired and the plaintiffs terminated the sale and purchase agreement. His Lordship distinguished the authorities of Hock Huat Iron Foundry (suing as a firm) v Naga Tembaga Sdn Bhd [1999] 1 MLJ 65 and Teck Guan Trading Sdn Bhd v Hydrotek Engineering (S) Sdn Bhd & Ors [1996] 4 MLJ 331 which were advanced by the defendant in support of its contention as cases which do not concern the sale of a condominium according to Schedule ‘H’ of the Housing Development (Control and Licensing) Regulations 1989 (‘said 1989 Regulations’). His Lordship 48 held that there is no legal obligation to give any notice of an intention to claim for LAD for a sale and purchase agreement under Schedule ‘H’ of the said 1989 Regulations and emphasised that the HDA 1996 is a specific piece of legislation enacted to protect the interests of house buyers and the provisions therein, including the prescribed agreements, override the provisions of Act 136 including subsection 56(3). [57] I further find that the triple reasons given by Abdul Malik Ishak J in Diong Tieow Hong, namely that -

the requirement to give notice of the claim for LAD under subsection 56(3) Act 136 only applies if the plaintiffs had indicated to the defendant when the SPA became voidable or soon thereafter that the plaintiffs are willing to accept delivery of vacant possession at a later time, and where such indication was not given, the said provision does not apply; 49

as a matter of interpretation, the presence of the words “shall pay immediately” in the sale and purchase agreement would negate the need to give such a notice; and

if the defendant required that a notice ought to be given, then the defendant must expressly provide so in the sale and purchase agreement, are equally applicable to the present case since there was no indication by the Plaintiffs to the Defendant to the effect as stated in subparagraph (a) above; the words “shall pay immediately” appear in Clause 24.2 of the SPAs; and there is no express provision in the SPAs for notice to be given by the Plaintiffs to the Defendant on the intention to claim LAD. [58] The above conclusion of this Court on this matter is further fortified by the decision in Berjaya Times Squares where it was held, inter alia, that: 50 “[44] … we have here an agreement which contains two clauses. One that provides for the payment of a sum as liquidated damages calculated on a daily basis for the period of delay in making delivery of the premises in question and another that makes time of the essence of the contract. Applying the guidelines discussed earlier, it is my judgment that time is not of the essence of the agreement in this case. A promise to construct and deliver a building within a stipulated time coupled with a promise to compensate for any delay in delivery is inconsistent with a right to terminate on the ground that time is of the essence. It certainly points to an intention that time was not to be of the essence. … [46] To summarise, this is a case in which, upon a proper construction of the agreement, time was not of the essence. The respondent was not therefore entitled to terminate or put an end to the contract when the appellant failed to deliver the unit of shop lot on the stipulated date. All that it was 51 entitled to receive was compensation calculated on the agreed basis. Its purported termination of the agreement was therefore wrongful…”. [emphasis added] [59] The provision on time being the essence of the contract is found in Clause 7 of the SPAs. Additionally Clause 24.3(a) states that “the Purchaser’s entitlement and claim to liquidated damages shall only arise after the Purchaser has paid the full Purchase Price and has paid all other payments due and outstanding pursuant to the terms of this Agreement and has taken actual delivery of the vacant possession of the Premises”. It is undeniable that the Plaintiffs have paid the full purchase price and all other payments since they have taken actual delivery of vacant possession of the parcels in accordance with Clause 25.1 of the SPAs. [60] To sum up, I find that the first issue raised by the Defendant is not a triable issue. 52 - Do the Plaintiffs have to prove damages? [61] The Defendant moved this Court to find that the Plaintiffs have to prove actual damage or loss, and the damages claimed has to be a reasonable amount. Section 75 of Act 136 and the authorities of Linggi Plantations Ltd. v. Jagatheesan [1972] 1 M.L.J. 89, Selva Kumar a/l Murugiah v Thiagarajah a/l Retnasamy [1995] 1 MLJ 817 and Reliance Shipping & Travel Agencies v Low Ban Siong [1996] 2 MLJ 543 were cited in support of the Defendant’s submissions. [62] However, after assessing the respective positions taken by the parties, I am inclined to agree with the Plaintiffs, on the precedents relied upon by them, that there is no necessity for the Plaintiffs to prove their damages. Firstly, the rationale on why damages need not be proven in the circumstances of this case was explained by Abdul Aziz Mohamad J (as he then was) in Sakinas Sdn Bhd v. Siew Yik Hau & Anor [2002] 3 CLJ 275 at p 291 as follows: “… In a great number of cases in this country, home-ownership is acquired through purchase from housing 53 developers with the help of financing from financial institutions on the security of the property. The developer is paid the purchase price in specific stages according to the progress of construction. If there is delay in the completion of the construction, the purchaser may suffer in various ways. He may have to commence paying the loan instalments without getting the enjoyment of the house. If he is renting a house, he will have to pay both the rental and the loan instalments, whereas if there had been no delay in completion, he could have moved into his new house and pay the loan instalments, without also having to pay rental. If he bought the house as an investment, he would have been deprived of the rental that he would have got from renting out the house. The person who is already living in his own house but is hoping to live in a better new house, and rent out his present house, will be deprived of early enjoyment of the new house and the receipt of rental from his present house, while having to pay his loan instalments. Whatever may be the circumstances and intention of the house-buyer, it can be said that in every case a delay in completion would 54 deprive the purchaser, for the period of the delay, at least of the rental that he would have got from the house had he chosen to rent it out. It would be a substantial loss in theory. But how can he prove what the rental would be for the house, in the area and at the particular time, if, for example, the whole project is delayed so that there is no case on which to base a fair comparison? … For those reasons, I am of the opinion that a case of delay in completion such as the present case should be treated as belonging to the first class of cases, which does not require proof of actual damage or loss,…”. [63] Secondly, even though the Minister has exempted the Defendant from the provisions of HDA 1996 for the development and sale of the parcels within the said Development, the SPAs were drafted by the Defendant itself and the parties have agreed to the terms and conditions therein as signified by their signatures on the same, 55 including the terms as stated in Clause 24.2 of the SPAs on the payment of liquidated damages and the formula for its calculation. There are no averments in the Defendant’s Affidavits that the free consent of the parties has been vitiated (see, inter alia, subsection 10(1) and sections 13 and 14 Act 136) and so the parties must be bound by the SPAs as executed. It is not open to the Defendant to raise the issue on proof of actual damage or loss to avoid paying the liquidated damages as agreed. [64] I find that the two authorities put forth by the Plaintiffs are on point where in Lebbey Sdn Bhd v. Tan Keng Hong & Anor [2000] 1 CLJ 136, a case which did not come under HDA 1996 either, the Court held that because the terms of the sale and purchase agreement were drawn up by the appellant themselves, they cannot rely on section 75 Act 136 to avoid paying the agreed liquidated damages. Furthermore, the appellant charged interest at the rate of 12% per annum on any unpaid sums and so, it did not lie in the mouth of the appellant to then complain that damages on late delivery of the factory should not be at 12% per annum of the purchase price. Similarly, the Defendant here is entitled to interest calculated from day to day at the rate of 10% per 56 annum on any unpaid instalment(s) or any part thereof of the purchase price under Clause 5 of the SPAs. [65] In the next case of Sentul Raya Sdn Bhd v. Hariram Jayaram & Ors And Other Appeals [2008] 4 CLJ 618 which involved 10 appeals from the decision of the High Court that awarded damages to the purchasers for late delivery of condominium units, the Court of Appeal at page 628 held that: “[14] The third ground raised by the appellant is that the respondents are under a duty to prove the damages, if any that they have suffered. This they have not done and their claims should therefore be disallowed. A short answer to this submission is to be found in cl. 22(2) itself. The damages are liquidated and calculated in accordance with the formula prescribed by the clause. No further onus lies upon the respondents in the appeals before us.”. 57 [66] Learned counsel for the Plaintiffs highlighted that the Court of Appeal did not make any reference on whether this ratio is contingent upon the development being one under HDA 1996 unlike when the Court of Appeal dealt with subsection 56(3) of Act 136 as elaborated earlier in this judgment, and thus, it was submitted that the decision in Sentul Raya is applicable to the case before this Court. I have no reason to conclude otherwise. Even in dealing with the issue related to section 47 of Act 136, the Court of Appeal alluded again to the clause in the statutory contract and decided that once the date for delivery of vacant possession passed, the appellant’s liability to pay liquidated damages calculated in accordance with the formula provided became immediate and no question of time being at large arose for consideration. The Defendant has not convinced this Court that the position should be any different just because the SPAs are not the statutory forms of contract. - Is the force majeure clause applicable? [67] The clause on force majeure in the SPAs reads as follows: 58 “32.1 Notwithstanding any provisions herein contained to the contrary, it is hereby expressly agreed by the parties thereto that the Developer shall not be liable to the Purchaser for any failure or delay on its parts to fulfil any of its obligations hereunder if such fulfilment is delayed, hindered or prevented by force majeure, acts of God, acts of war or terrorism, national emergency, epidemics, governmental restrictions, earthquakes, storms, typhoons and floods, insurrection or revolt, prohibitive governmental regulation, order, directive, embargo, moratorium, economic or financial crisis or liquidity crisis and restrictions or guidelines imposed by Bank Negara, soil erosion or landslide, strikes, lockouts, labour disputes or any other form of industrial action, riots, civil disturbance, civil commotion, loss or damage by fire, flood or tempest, inclement weather, shortage of building materials, prevention from or hindrance in obtaining any raw materials, energy or other supplies or any circumstances of whatsoever nature beyond the control or outside the reasonable contemplation of the Developer. 59

32.2 A certificate issued by the Developer’s Architect stating the circumstances constituting the force majeure and the duration of the force majeure shall be final and conclusive and binding upon the parties.”. [68] The Defendant had exhibited six letters between the period 27.12.2012 until 7.9.2015 from EDP Consulting Group Sdn Bhd, the Project Manager to BY Construction Sdn Bhd, the contractor, concerning the applications for extension of time (‘EoT’) in relation to the “Proposed Construction and Completion of Integrated Sewer Main on Jalan Cendana and Jalan Sultan Ismail, Seksyen 14 Bandar and Daerah Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur For Crest Worldwide Resources Sdn Bhd - Kar Sin Bhd – Summer Suites Sdn Bhd – Platinum Victory Property Sdn Bhd Joint Venture” (exhibit “DSA-2” in Enclosure 8). Altogether five EoT were granted by the Project Manager. The reasons for the delay are as follows:

lack of access to construct the connection between the proposed sewer pipe to an existing sewer manhole located within the lot boundary of Duta Grand Hotels Sdn Bhd; 60

unforeseen larger box culvert drain’s size at Jalan Sultan

encountered hard material, rock and tree trunk during excavation of jacking pit and pipe sleeve jacking works; and

change of diameters in the jacking pipe sleeve. [69] In addition, the Defendant exhibited a letter dated 11.1.2018 from its architect, C S Chew Architects Sdn Bhd to explain matters related to the changes on the allowable working hours, electricity supply and sewerage reticulation which were said to be beyond anyone’s control and had caused the delay of the construction works for the said Development (exhibit “DSA-3” in Enclosure 8). Correspondences from the respective authorities such as Dewan Bandaraya Kuala Lumpur (‘DBKL’), Syarikat Bekalan Air Selangor Sdn. Bhd. (‘SYABAS’) and Indah Water Konsortium Sdn. Bhd. (‘IWK’) were enclosed to the said letter. 61 [70] I have scrutinised exhibits “DSA-2” and “DSA-3” and it is my considered view that –

exhibit “DSA-2” is not a certificate issued by the Defendant’s architect in relation to the said Development as required under

the events as set out in exhibit “DSA-3” do not constitute “circumstances of whatsoever nature beyond the control or outside the reasonable contemplation of the Developer” as contemplated in Clause 32.1 of the SPAs. In this regard, I agree with the submissions of the Plaintiffs’ counsel that the delay of the construction works for the said Development was attributable to the lack or failure of planning by the Defendant in light of the following:

From DBKL’s letter dated 7.12.2007, the Defendant knew that DBKL approved the round the clock working hours for a three month probation period until 29.2.2008. The subsequent application for continuous working hours 62 was submitted to DBKL vide a letter dated 14.2.2018, a mere 2 weeks before the probation period ended whereby DBKL directed that normal working hours from 8.00 a.m. to 6.00 p.m. on weekdays be observed. Subsequent letters from DBKL show that there were certain periods when the works were allowed to be done until 8.30 p.m. or 10.00 p.m. Under the circumstances, the Defendant could have avoided the delay by engaging more workers and deploying more machinery to the construction site to carry out the works within the hours as allowed by DBKL.

(ii) The construction of power stations to provide adequate electricity supply, pipes to supply sufficient water and sewerage reticulation for the populace in new development areas are an integral part in the planning and implementation of projects by any developer. To this end, the necessary engagements with Tenaga Nasional Berhad, SYABAS and IWK have to be carefully and properly coordinated and timed so that ultimately DBKL’s 63 approval can be obtained. These have to be well managed by the developer, including the need to have foresight and to be prepared for any eventualities to avoid the kind of problems as encountered by the Defendant in this case. After all, the construction of such infrastructure and laying of all necessary electricity, water and sewerage mains in compliance with the written laws for the time being in force are obligations on the Defendant (see Clauses 16, 20 and 21 of the SPAs). The contingencies as arose here are within the reasonable contemplation of the Defendant and do not amount to circumstances constituting force majeure as intended by the parties in Clause 32 of the SPAs. In any event, the alleged change in plan from building a Pencawang Pembahagian Utama into a smaller Stesen Suis Utama was not substantiated in the Defendant’s AIR. [71] Changes made by the planning authorities were also among the factors relied upon by the first defendant in the case of Tang Kam Thai & Ors v Langkah Cergas Sdn Bhd & Ors [2005] 7 MLJ 605 as 64 circumstances beyond its control to exonerate it from any blame for the delay in handing over vacant possession of the properties to the plaintiffs apart from the reasoning that its management was under different people and that there was an economic slowdown. James Foong J (as he then was) held that the purchasers expected the first defendant to manage its affairs properly and professionally so that projects undertaken by it should be completed on time in accordance with the agreement. Failure to do so, was, in itself, proof of willful delay (see too, Malaysia Land Properties Sdn Bhd (formerly known as Vintage Fame Sdn Bhd) v Tan Peng Foo [2013] 1 AMR 107). [72] In the upshot, I do not think that the issue put forth by the Defendant on the basis of the force majeure clause is one that needs to be ventilated in a full trial. Since I have come to the same conclusion in respect of the other two issues as aforesaid, this is an appropriate case for summary judgment to be entered against the Defendant. 65 Conclusion [73] Based on the reasons as expounded above, I dismissed the Defendant’s application under O. 18, r. 19 RoC 2012 with costs of RM5,000.00 and allowed the Plaintiff’s application under O. 14 RoC 2012 with costs of RM5,000.00. Plaintiff’s counsel prayed for cost of RM5,000.00 for Enclosures 10 and 6 which was agreed to by the Defendant’s counsel. In the premise, costs were ordered as prayed, subject to the payment of allocatur fees. Dated: 27 March 2019 (ALIZA SULAIMAN) JUDICIAL COMMISSIONER HIGH COURT NCvC 1 KUALA LUMPUR 66 Counsel/ Solicitor: For the Plaintiff: Y.H. Loke (L.K. Toh with him) Messrs. Low & Partners No. 5 Jalan SS 21/23 Damansara Utama 74400 Petaling Jaya For the Defendant: A. S. Gill Messrs. A.S. Gill Thong & Agnes F-1-11, First Floor Block F, Pusat Komersil Jalan Kuching No. 115, Jalan Kepayang Off Jalan Kuching 51200 Kuala Lumpur