Schedule
Schedule H Sale and Purchase Agreement. [2] Being dissatisfied with the said decision dated 29 July 2022, the Defendant-developer has appealed against the said decision. FACTS OF THE CASE [3] By 26 Sale and Purchase Agreements ("the SPAs") under Schedule H of the Housing Development (Control and Licensing) Act, the Defendant as the vendor agreed to sell and the Plaintiffs as the purchasers agreed to purchase their respective units of condominiums ("the Parcels") [paragraphs 9 and 10 and Exhibit "CEN-2" of the Affidavit-in-Support affirmed by Chong Eng Neo 2 (Enclosure 6) affirmed on 11.06.2021 ("the Plaintiff's Affidavit-in-Support")]. This was also confirmed by the Defendant-developer in paragraphs 4 to 6 of the Defendant’s Affidavit-in-Reply (Enclosure 23). [4] The total amounts of the Plaintiffs’ claims for late delivery of vacant possession of 26 condominium units was RM856,609.92 and for late completion of common facilities was RM218,170.70: see prayers (1) and (2) in the Originating Summons in Enclosure 1. [5] By Enclosure 16 the Plaintiffs applied for interim payment under O.22A in the amount of RM732,161.30. [6] In paragraph 6 of the Plaintiffs’ Affidavit-in-Support (Enclosure 17), the Plaintiffs stated that each of them paid a deposit and/or booking fee of RM2,000 to the Defendant-developer at various dates between 10.3.2017 and 7.12.2017. The collection and payment of deposit and/or booking fee of RM2,000 was not denied by the Defendant-developer but the Defendant-developer averred that in 2021 the deposits and/or booking fees were refunded to a majority of the Plaintiffs-purchasers: see paragraph 7 of the Defendant’s Affidavit-in-Reply (Enclosure 23). [7] In paragraph 7 of the Plaintiffs’ Affidavit-in-Support (Enclosure 17), the Plaintiffs stated that each of them signed their respective Sale and Purchase Agreements with the Defendant-developer at various dates between 5.5.2017 and 4.4.2018. [8] In paragraph 8 of the Plaintiffs’ Affidavit-in-Support (Enclosure 17), the Plaintiffs stated that the Defendant-developer issued a letter dated 11.6.2021 (Exhibit “MM-2”) notifying that the properties were completed but due to the restriction imposed by the Ministry of Housing and Local Government, the Defendant-developer was unable to deliver vacant possession physically until after the Movement Control Order. In paragraphs 10 and 11 of the Defendant’s Affidavit-in-Reply (Enclosure 23), the Defendant stated that the Certificate of Completion and Compliance (“CCC”) was issued on 11.6.2021 as per Exhibit “SMY-8” and notices dated 11.6.2021 of completion and readiness for delivery of vacant possession were issued to the Plaintiffs as per Exhibit “SMY-9”. [9] In paragraph 9 of the Plaintiffs’ Affidavit-in-Support (Enclosure 17), the Plaintiffs stated that the Defendant-developer issued a letter 3 dated 4.8.2021 (Exhibit “MM-2”) notifying the physical delivery of vacant possession of the properties. This fact is also confirmed by the Defendant in paragraph 12 of the Defendant’s Affidavit-in-Reply (Enclosure 23) read with Exhibit “SMY-10”. [10] In paragraphs 10 to 16 of the Plaintiffs’ Affidavit-in-Support and Exhibit “MM-3” thereto (Enclosure 17), the Plaintiffs sated that the Defendant-developer’s computation of the amounts of liquidated damages for late delivery of vacant possession and for late completion of common facilities were erroneous and that the amounts of liquidated damages should be higher. The amounts of liquidated damages computed by the Plaintiffs and by the Defendant-developer are as summarised below: Amount of liquidated damages for Plaintiffs’ computation (RM) Defendant’s computation (RM) Delay in delivery of vacant possession of the Parcels 549,583.22 521,755.05 Late completion of common facilities 182,578.08 85,160.83 Total 732,161.30 606,915.88 [11] In paragraph 19 of the Plaintiffs’ Affidavit-in-Support and Exhibit “MM-6” thereto (Enclosure 17), the Plaintiffs sated that the Defendant-developer by letter dated 8.11.2021 made an offer to a majority of the Plaintiffs in 21 units of the Parcels to pay such Plaintiffs a total amount of RM425,804.13 as liquidated damages (LAD) under clause 25(ii) of the SPA. See pdf pages 100 to 121 of Enclosure 17 for Exhibit “MM-6” which stated the Defendant-developer’s offers of LADs to the majority of the Plaintiffs in respect of the 21 units of properties. This fact is also confirmed by the Defendant in paragraph 14 of the Defendant’s Affidavit-in-Reply (Enclosure 23) read with Exhibit “SMY-12”. Clause 25(2) of the SPA is in relation to the delay in delivery of vacant possessions of the 21 parcels, whereas clause 29(2) of the SPA is in relation to liquidated damages for late completion of common facilities. Legal principles on interim payment under O.22A [12] In Malaysia, the legal principles on interim payment under O.22A have been succinctly stated by the Court of Appeal in Josu Engineering Construction Sdn Bhd v. TSR Bina Sdn Bhd [2016] 4 1 CLJ 1. In Josu Engineering Construction Sdn Bhd v. TSR Bina Sdn Bhd, the Court of Appeal held as follows: Legal Principles on Interim Payment [8] An interim payment of damages can be made in accordance with O. 22A of the RC 2012, where the court is "satisfied" that "the plaintiff has obtained judgment against the defendant for damages to be assessed" (see r. 3(b)), or "if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the defendant" (see r. 3(c)). [9] As shown above, r. 3(c) allows interim payment of damages even though liability is still in question. [10] Courts in England have interpreted the burden placed upon a plaintiff seeking interim payment to be something more than a prima facie (at first glance) standard, but something less than the criminal standard. [11] In Shearson Lehman Inc v. Maclaine, Watson Ltd, [1987] 1 WLR 480, Lloyd LJ explained at p. 489: Something more than a prima facie case is clearly required; but not proved beyond reasonable doubt. The burden is high. But it is a civil burden on the balance of probabilities, not a criminal burden. This involves no lasting hardship on the defendant since there is a provision for readjustment at the trial in case of an overpayment. [12] This decision was followed in Ricci Burns Ltd v. Toole [1989] 1 WLR 993: The standard of proof on the probabilities is high but is it not necessary to exclude every possibility of failure because the order for interim payment may be reversed at trial. [13] The following comments of May, LJ in Gibbons v. Wall, (12 February 1988), (CA) (unreported) were quoted with approval by Browne-Wilkinson VC in British and Commonwealth Holdings PLC v. Quadrex Holdings Inc [1989] 3 All ER 492 at p. 509: [T]he civil burden of proof... is a flexible test... and it depends upon the nature of that which has to be proved where on the flexible scale of the balance of probabilities one has to pitch the burden... in the context of an application for an interim payment... the burden is a high one within that standard if only because litigation of its nature involves no certainties. A plaintiff with what may appear on paper to be a strong case may find it fail at trial. If he does then he will have to repay the whole or to the extent that he fails, part of the interim payment. But... the plaintiff may spend it... If he does it may be difficult... to recover if he fails ultimately at trial. Clearly the 5 burden resting upon an applicant in those circumstances is towards the top of the flexible scale. [14] In David Chelliah v. Monorail Malaysia Technology Sdn Bhd & Anor [2005] 1 CLJ 589; [2005] 2 AMR 173, our Malaysian Court of Appeal held that: (a) the standard of proof required in an application for interim payment is on the balance of probabilities (para. 11); (b) underlying purpose of O. 22A is to provide for an interim payment to alleviate a plaintiff's hardship which may exist during the period from the commencement of an action to the conclusion of the trial: see para. 12; and (c) there is no necessity for the plaintiff to show that he would suffer prejudice if he did not obtain an interim payment; neither must he show that a particular sum is required to cover a need. In awarding an interim payment, the court is not concerned with how the money is to be spent. [15] Discussing the current English rules, (which are in pari materia with those contained in the Malaysian O. 22A of RC 2012 ), this is how the required standard of proof is treated in Blackstone's Civil Practice, 2008 (at p. 454, para. 36.9): On an application under CPR, r. 25.7(1)(c), (d), the court has to be satisfied on the balance of probabilities that the claimant 'would' obtain judgment. This wording is identical to that used in the old rules (RSC, O. 29, rr. 11(1)(c) and 12(1)(c)), and it ought to be the case, despite the new approach to interpretation, that the same principles will apply regarding the standard of proof on these two grounds. If so, it has to be shown that the claimant will win on the balance of probabilities, but at the upper end of the scale, the burden being a high one. Being likely to succeed at trial is not enough. (emphasis added) [16] In Civil Procedure (2nd edn) by Paula Loughlin and Stephen Gerlis, the authors' view of the position is stated thus: An interim payment may be made... where the claimant has a very strong claim against the defendant. They are regularly made... where liability is often easily established. (emphasis added) [17] Paragraph 36.13 of Blackstone's Civil Practice, 2008 (p. 455), is also quite instructive: it likens applications for interim payment to applications for summary judgment. The paragraph reads as follows: It is quite common to combine applications for summary judgment with applications for interim payments. Summary judgment is available where the defence has no real prospect of 6 success, and interim payments are available where the claimant can show that liability will be established. Obviously these are similar concepts. [18]Order 22A of the RC 2012 does not restrict interim payment of damages to any type of action. In England, where the approach is to identify particular types of claim in which an interim payment may be made, the rules essentially cover every type of action. (See England & Wales, Rules of the Supreme Court, O. 29, rr. 11 & 12). [19] The English Court of Appeal in Schott Kem Ltd v. Bentkey [1990] 3 All ER 850 held at p. 858 that there is "no basis for any further limitation on the jurisdiction of the court to order interim payments than those set out in O. 29 itself". [20] Where the judgment was entered in favour of the appellant/plaintiff and for damages to be assessed, it was held by English Court of Appeal to be a proper case for ordering interim payment (see Stringman (A Minor) v. McArdle [1994] 1 WLR 1653). [21] Thus, in our view, interim payments can be ordered in actions other than personal injury cases such as proceedings for contractual claims, actions for wrongful death, product liability actions, wrongful dismissal claims, trespass to land, misappropriation of funds, and actions for property damaged. [22] There are strong policy grounds for the courts to order interim payments in an appropriate case. It is in the interests of the administration of justice and of plaintiffs in particular, that defendants be encouraged to make early voluntary interim payments so as to alleviate financial hardship on the part of the plaintiffs.” (emphasis added) Defendant’s grounds for opposing the interim payment [13] In opposing the Plaintiffs’ application for interim payment, the Defendant-developer raises these grounds and/or arguments: (1) argument that there was no admission of debts here: see paragraph 21 of the Defendant’s Affidavit-in-Reply (Enclosure 23); (2) argument that the contractual period for delivery of vacant possession should be 36 months from the dates of the relevant SPAs and not from the dates of the payments of deposits or booking fees: paragraphs 21(iii) to 21(v) of the Defendant’s Affidavit-in-Reply (Enclosure 23); 7 (3) argument that the total amount of LADs for delay in delivery of vacant possession should not exceed RM425,804.15: paragraph 24(i) of the Defendant’s Affidavit-in-Reply (Enclosure 23); and (4) argument that the total amount of LADs for delay in completion of common facilities should not exceed RM85,160.83: paragraph 24(ii) of the Defendant’s Affidavit-in-Reply (Enclosure 23). Findings and decisions of this Court [14] From paragraphs [7] to [11] above, it is the findings of this Court that the delay in the delivery of vacant possession of the Plaintiffs’ 26 parcels and the delay in the completion of the common facilities have been clearly established from the affidavit evidence and the contemporaneous documents exhibited in the present case, as well as have been admitted by the Defendant-developer who offered to pay a majority of the Plaintiffs LADs for delay in delivery of vacant possession of parcels totalling RM425,804.13. As such, there is no triable issue insofar as liability is concerned. [15] This Court finds that if the action proceeded to trial, the Plaintiffs would obtain judgment for substantial damages against the Defendant within the meaning of O.22A r. 3(c). [16] From the entirety of the affidavit evidence and the contemporaneous documents exhibited here, this Court finds that it has been shown that the claimant will win on the balance of probabilities, and that the Plaintiffs’ case on liability has been proved at the upper end of the scale. In the circumstances this Court is satisfied that the Defendant-developer would be liable for substantial damages towards the Plaintiffs herein if the action proceeds to trial. [17] This Court will now deal with the quantum of liquidated damages which ought to be awarded as interim payment under O.22A. [18] In Appendix A to the Defendant’s Affidavit-in-Reply (Enclosure 23) at pdf page 63 (“the said Appendix A”), the Defendant-developer computed the LAD amounts based on various scenarios, and in the columns in yellow colour, the Defendant’s LAD computations were based on SPA price after EOT of 167 days and using the SPA dates (and not booking date) and the vacant possession delivery date of 8 11.6.2021. See also paragraphs 24(i) and 24(ii) of the Defendant’s Affidavit-in-Reply (Enclosure 23). [19] The Plaintiffs’ arguments on quantum of liquidated damages are that there should be no EOT of 167 days, that the LADs should be computed using the dates of paying the deposits or booking fees (and not SPA dates). There are decided authorities of the courts which were cited in support of the Plaintiffs’ said arguments. [20] In other words, the LAD computations by the Defendant-developer in the yellow columns of the said Appendix A represent the scenario which would be the most favourable to the Defendant-developer. In the said Appendix A computations of LADs in the yellow columns, the total amounts of LADs in respect of the Plaintiffs’ 26 Parcels are RM425,804.15 for the delay in delivery of vacant possession of the 26 Parcels and RM85,160.83 for the delay in completion of common facilities. [21] As this is an application for interim payments and the final amounts of liquidated damages can be decided and adjusted at the trial and hearing of the main action, this Court finds it appropriate at this interim stage to use the quantum of damages which the Defendant-developer has computed on the scenario which would be the most favourable to the Defendant-developer and award the same to the Plaintiffs as interim payments here. On this basis and scenario, the amounts of interim payments here should be RM425,804.15 for delay in delivery of vacant possession of the 26 Parcels plus RM85,160.83 for delay in completion of common facilities, thereby totalling RM510,964.96. [22] The amount of RM425,804.15 used in computing the interim payment of RM510,964.96 was the amount of LADs for delay in the delivery of vacant possession which the Defendant itself offered in writing by its letter dated 8.11.2021 to the Plaintiffs: see Exhibit “MM- 6” and paragraph [11] above. [23] The said interim payment amount of RM510,964.96 awarded here is much less than the amount of interim payment or RM732,161.30 applied for by the Plaintiffs in Enclosure 16 and is about half the total amount pleaded in the Plaintiffs’ Originating Summons (Enclosure 1). 9 Conclusion [24] In conclusion this Court on 29 July 2022 granted an order of interim payment in the amount of RM510,964.96 to be paid forthwith by the Defendant-developer to the Plaintiffs. Dated this : 2nd September 2022. Signed ……................................................................ TEE GEOK HOCK JUDICIAL COMMISSIONER HIGH COURT OF MALAYA AT SHAH ALAM (NCVC 10) To the parties’ solicitors: 1. For the Plaintiff : Khaw Chern Wei Jonathan Messrs Chern & Co. (Kuala Lumpur) 2. For the Defendant : Yap Jun Cheng Messrs Shern Delamore & Co. (Kuala Lumpur)