Setia Jutaria Sdn. Bhd. v Kamay Furniture Sdn. Bhd. (PA-12ANCvC-43-05/2021)

The Sessions Court granted summary judgment against D, for liquidated ascertained damages (LAD) for the late delivery of the vacant possession of the Properties. D appeals to the High Court.

Should D’s Appeal against the summary judgment be allowed i.e. should the summary judgment be set aside, or should it be sustained? THE LAW ON ORDER 14 [4] The law on Order 14 summary judgments is well entrenched in our adjectival law. The principles are trite.

The pertinent portions of Order 14 of the Rules Of Court 2012 are set out here—

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

Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant…

Judgment for plaintiff (O. 14 r. 3)

Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part, the Court Page 3 of 15 may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed… [6] There are two alternative tests that P needs to satisfy for the Court to favour P and enter a summary judgment against D—

there is, what is commonly known as a triable issue, namely an issue in dispute between the parties that requires the whole process of a trial before the Court can decide on that issue; or

apart from a triable issue, there is some other reason that there should be a trial of the suit. [7] From case law authorities, there are principles that I am mindful to heed. The first is the principle that when the parties assert certain facts or issues or reasons that bear on the merits of a summary judgment application, I am not bound to accept those assertions just because the parties made them. I must evaluate the cogency of the assertion, and consider whether the assertion is tenable, or plausible, or reasonable. If the assertion is “equivocal or lacking in precision or is inconsistent with undisputed contemporary documents” or is “inherently improbable”, then I have the “duty to reject such assertion, rendering the issue not triable— Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 (SC) at page 408; [1992] 1 CLJ 627; [1992] 1 MLRA 190. [8] The second principle that I am mindful to follow is that I must evaluate whether the facts or issues or reasons raised by D amount to a “fairly arguable defence” to the claim, such that I have a “reasonable doubt” against granting judgment summarily—Malayan Insurance (M) Page 4 of 15 Sdn Bhd v Asia Hotel Sdn Bhd [1987] 2 MLJ 183 (SC); [1987] 1 CLJ 246; [1986] 1 MLRA 269. [9] The third principle is that when I am deliberating on the facts or issues or reasons that D raises, the question that I am to determine is— are they bona fide triable issues i.e. issues that require determination by trial?—Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 (CA); [1995] 1 AMR 622; [2000] 1 CLJ 503; [1995] 1 MLRA 48. [10] The law on summary judgment is thus well established. An application for summary judgment is defeated by D raising triable issues. In other words, D needs to demonstrate that a trial is required for P to prove his claim against D. [11] Put differently, just from an analysis of the parties’ respective pleadings and affidavits, as well as the documentary evidence referred to (exhibited in the affidavits)—when I am not persuaded to by-pass a trial to summarily enter judgment against D, then P’s summary judgment application must fail. Put conversely, if I am persuaded to by-pass a trial to allow P’s claim, P’s summary judgment application should be allowed. [12] Another way of putting it is that it must be obvious to me that the D has no defence on the merits before summary judgment is granted. A PERTINENT CHRONOLOGY [13] A chronology pertinent to this summary judgment application is set out below—

19.3.2015—the date of the SPAs Page 5 of 15

5.7.2017—the date of the Engineer’s letter purportedly extending the time for the completion and hence delivery of the vacant possession of the Properties

19.3.2018—the contracted (agreed) date for D to deliver vacant possession of the Properties (36 months from the date of the SPAs)

27.8.2019—the date of the eventual delivery of vacant possession. THE PERTINENT CLAUSES [14] It was pleaded that the two SPAs contained identical pertinent terms. [15] The following terms are the pertinent clauses of the SPAs which the parties (particularly D) relied on in the summary judgment application, leading to this Appeal. These are the clauses to interpret and apply in this Appeal. [16] Clause 20 is the handing-over-of-vacant-possession clause as well as the LAD clause. [17] D had to deliver vacant possession of the Properties within 36 months of the signing of the SPAs. If D is late in delivering vacant possession, D has to pay LAD at 10% per annum of the purchase price. [18] But Clause 20 itself, together with Clause 28, provides that there are exceptions to D’s liability to pay the LAD. These exceptions include— Page 6 of 15

if the delay in the completion of the Properties is caused by fire, flood or tempest, or “other like causes beyond the Vendor’s [D’s] control”—Clause 20(2);

if the delay is caused by “any other circumstances of whatsoever nature beyond the control of the Vendor [D]”— Clause 20(3);

if the delay is caused by “events not reasonably foreseen and which is [sic] beyond the control of the Vendor”, including “any permissible delay as certified and approved by the Architect/Engineer in accordance with the guidelines set out by Pertubuhan Akitek Malaysia (PAM)”—Clause 28(h); and

if the delay is caused by “events not reasonably foreseen and which is beyond the control of the Vendor”, including “any other delay attributed to the Appropriate Authorities”—Clauses 28(i). [19] I note, however, that the closing part of Clause 28 provides that when these events that cause the delay occur, the Architect/Engineer must “calculate and assess the period of the delay to the construction” of the Properties, “and inform the parties as to what is [a] fair and reasonable extension of time for the completion of the Vendor’s [D’s] obligation”, and then “the opinion of the Architect/Engineer shall be final and binding” on the parties. P’s CLAIM [20] D delivered vacant possession late and must pay LAD to P under Clause 20. Page 7 of 15 D’s DEFENCES [21] D relies on the following defences—

the Clause 20(2) defence: the delay in the completion of the Properties was caused by causes beyond D’s control;

the Clause 20(3) defence: the delay was caused by circumstances of a nature that were beyond D’s control;

the Clause 28(h) defence: the delay was permissible because the Engineer certified and approved it under PAM’s guidelines;

the Clause 28(i) defence: the delay was caused by events that could not be reasonably foreseen and which were beyond D’s control, including any delay attributed to the authorities;

before the signing of the SPAs, P knew that the authorities did not yet approve the building plans for the Properties. D’s ARGUMENTS [22] D’s pivotal argument is that the Engineer’s letter dated 5.7.2017 issued to D was the certification of and the approval for the completion date of the SPAs to be extended (delayed) by 18 months. And the eventual vacant possession was delivered within this extended period. FINDINGS [23] These are my findings. First, under the Clause 20(2) defence, besides D merely referring to Clause 20(2), D did not plead nor set out in affidavit evidence that the delay in the completion of the Properties was caused by fire, flood or tempest, or by other such kinds of causes which were outside of D’s control. Page 8 of 15 [24] This “defence” is insupportable, as it is unsubstantiated in the pleadings or the affidavit evidence. [25] Second, under the Clause 20(3) defence, again, besides D merely citing Clause 20(3), D similarly did not plead nor set out in affidavit evidence that the delay in delivering vacant possession was caused by any other circumstance that was beyond D’s control. [26] This “defence” too is untenable. [27] Third, under the Clause 28(h) and Clause 28(i) defences, D finally sets out some particulars. D asserts that by a letter dated 5.7.2017, D’s Engineer certified and approved a permissible delay following the guidelines set out by PAM. D also infers that the delay was attributed to the authorities. [28] These were the verbatim words of the Engineer’s letter— “With reference to the above mentioned project, we would like to inform you that the relevant application plans [sic] still subject to local authorities approval and thus resulting in a delay of the master work programme which is estimated [sic] 18 months for completion. Therefore, you are hereby to [sic] be reminded that no construction works shall be carried out to the above mentioned site until further notice”. Page 9 of 15 [29] But I find that—

the Engineer’s letter was issued to D, not to P. Nor was it copied to P;

the content of the Engineer’s letter does not demonstrate that the 18-month extension of time to deliver vacant possession was a certified or approved permissible delay. The words “extension”, “certified”, “approved”, and “permissible delay” were not to be found in the letter. There was also no reference in the letter, nor were there any averments in the pleadings or affidavits filed in the Order 14 summary judgment application proceeding, to show that the letter was issued following PAM’s guidelines (for form, content and meaning). [30] Fourth, the Engineer’s letter cannot, in my view, be the letter certifying and approving a permissible delay as envisaged in Clause 28. There is no reference to Clause 28, nor a statement that the letter was issued for the purpose of Clause 28. In fact, there was not even a reference to the parties’ rights and obligations under the SPAs. [31] In other words, there was no reference or statement to indicate that the letter's purpose was to certify and approve a permissible delay so that D could deliver vacant possession of the Properties after the agreed date to deliver vacant possession. As such, it cannot be used as a justifiable reason for the late delivery of the vacant possession of the Properties under Clause 28. [32] I make this finding, guided and bound by the Court Of Appeal case law authority of Koperasi Permodalan Felda Malaysia Bhd v Icon City Page 10 of 15 Development Sdn Bhd (formerly known as ‘Sierra Peninsular Development Sdn Bhd’) & Anor [2023] 2 MLJ 338 (CA); [2023] 2 AMR 117; [2023] 2 CLJ 1; [2023] 2 MLRA 507. [33] In Koperasi Permodalan Felda (supra), the developer there “relied on the architect’s letters to extend the original contractual completion date” of the properties concerned—see paragraph [10]. The Court Of Appeal made the following finding on the architect’s letters which purported to extend the time for the delivery of vacant possession— [28] We are of the considered opinion that the learned High Court judge had erred in construing the architect’s letters as extensions of time under the SPAs when it is clear from an interpretation of the architect’s letters when they are not, on the following grounds:

the architect’s letters make no mention of the SPAs and specifically cl 13.1.1 of the SPAs which the first respondent [developer] relies heavily upon;

the architect’s letters do not state that in the opinion of the architect, the events in the said letters were events beyond the developer’s control or events which fall within any of the grounds in cl 13.1.1 or were force majeure events; and

the architect’s letters do not state any opinion at all and merely state that there would be delays in the completion of the construction works. [29] As such, we are of the opinion that the architect’s letters do not qualify as valid certificates of extension of time which would justify the first respondent’s [developer’s] delay in delivering the vacant possession of the said properties to the appellant. [notes added] [34] Fifth, if the Engineer’s letter was to certify and approve a permissible delay, it is mandatory that the Engineer had to calculate and assess the period of the delay, and send the letter to both D and P, to inform them both. Instead, and in fact, the letter was issued only to D. The Page 11 of 15 letter was never issued to P and P was not informed about the letter. This further renders the Engineer’s letter even more remote from being considered as the requisite letter to certify and approve a permissible delay. [35] Sixth, the Engineer was D’s Engineer, which made the letter rather self-serving. Put differently, it was self-serving for D’s Engineer to issue this letter and send it only to D, but not contemporaneously sent to P, who was the party who should be informed about any permissible delay. The Engineer’s purported extension of time was not even notified to P, who was the party who would be adversely affected by the extension of time (if there was one). [36] Seventh, D has produced no affidavit evidence from the Engineer that may substantiate that his letter tantamounted to the requisite certification and approval for an extension of time under Clause 28. [37] Eighth, with the ultimate purpose of the completion of the SPAs in mind, D had the obligation to get the building plans approved and to construct the Properties on time. D’s failure to get the building plans approved, which is solely D’s obligation, cannot be attributed to or passed on to the authorities, just by a mere bare assertion, with no particulars setting out that the delay was the authorities’ fault, and not D’s fault. [38] D cannot be absolved from their obligation to complete and deliver vacant possession of the Properties on time by simply saying that the time required to obtain the approved building plans was beyond their control. D cannot be absolved from their obligation to deliver vacant possession within the agreed time by simply asserting that the obtaining of the Page 12 of 15 approved building plans was due to a cause beyond their control, or a circumstance beyond their control, or an event that cannot be reasonably foreseen and thus beyond their control—Mission Richmark Sdn Bhd v Capitol Avenue Development Sdn Bhd [2021] 8 MLJ 691 (HC); [2020] CLJU 977. [39] In Mission Richmark (supra), the High Court reasoned as follows— [12] In this instant case, the defendant is relying on the ground which is ‘beyond the developer’s control’ to justify the delay in the delivery of vacant possession of the said property. As provided in the defendant’s affidavit in opposition No 2 deposed by the developer’s architect, the defendant averred that it was the delay by SESB in, inter alia, connecting the electricity supply from the main supply line to the said property’s substation which caused the delay in the completion and delivery of vacant possession of the said property to the plaintiff… [13] The defendant submitted that as such connection of electricity rests solely within the domain of SESB, it is no longer within the control of the defendant as developer of the said property. [14] However, I am more inclined to agree with the plaintiff who submitted that the delay cannot be brought within the ambit of the proviso to cl 14.1.1 of the said agreements. The proviso which is also known as force majeure clause must not be construed liberally and widely enough to exclude the defendant of any liability of its contractors. [15] In the Court of Appeal case of Araprop Development Sdn Bhd v Leong Chee Kong & Anor [2008] 1 MLJ 783, the developer was held to remain liable to liquidated damages despite delay caused by the tardiness in laying of electrical and telephone cables by its subcontractors on the grounds that these subcontractors are under the control of the developer. [16] In the Singapore’s Court of Appeal case of Golden Bay Realty Pte Ltd v Orchard Twelve Investments Pte Ltd [1989] 2 MLJ 70, the developer was still found liable and was disallowed to rely on force majeure clause for failing to secure subsidiary title within the stipulated time provided in the agreement. It was held: We do not think a vendor is entitled to claim protection under the force majeure clause if he has under provided the time required to do the necessary things. Page 13 of 15 [17] In this present case, the defendant had covenanted to deliver vacant possession within 36 months from the date of obtaining the building plans as provided in the said agreements. Thus, it is incumbent on the defendant to ensure there are sufficient time to fulfill such obligation… [18] Therefore, it was the defendant who delayed completing the application for the installation of the permanent electricity supply from SESB. The defendant is not entitled to claim protection under cl 14.1.1 of the said agreements since it itself has under provided the time required to complete such installation. [emphases added] [40] Ninth, I find the argument that P knew, at the time the SPAs were signed, that the building plans for the Properties were not yet approved, and so constituted a triable issue—to be unconvincing and inconsequential. Even though they both knew about the fact that the building plans for the Properties were not yet approved—both parties nevertheless entered into the SPAs. D chose to take on the obligation under the SPAs. Hence it was D’s obligation to get the building plans approved, to complete the Properties, and to deliver vacant possession of the Properties to P on time. CONCLUSION [41] For these reasons, I find that D has fallen short in demonstrating that they have an arguable defence, or that there are triable issues that warrant a trial to determine them, or that there is some other reason that there should be a trial of the claim. [42] I find that D’s Defence and Affidavit In Reply, filed in the summary judgment application proceeding, do not disclose that D has a “fairly arguable defence” to the claim. Page 14 of 15 [43] I have no reasonable doubt that judgment should be entered summarily. [44] I am persuaded to by-pass a trial and summarily enter judgment against D. [45] And I find that there are no bona fide triable issues that warrant a trial to determine them i.e. there is no triable issue that defeats P’s summary judgment application under Order 14. [46] For these reasons, I dismiss D’s Appeal against the summary judgment. I uphold the Sessions Court’s decision in granting the order to enter judgment summarily against D. As for costs, I order D to pay P costs of RM7K by 19.4.2024. Costs are subject to the allocator. Dated: 15 May 2024 KENNETH ST JAMES Judicial Commissioner Penang High Court Page 15 of 15 Counsel/Solicitors: For the Appellant: Nicholas Lim [Messrs. Presgrave & Matthews (Pulau Pinang)] For the Respondent: Ong Yu Shin, Lim Wooi Ying [Messrs. The Chambers of Yu Shin Ong) (Pulau Pinang)] Legislation referred to:

Order 14 Rule 1 of the Rules of Court 2012.

Order 14 Rule 3 of the Rules of Court 2012. Cases referred to:

Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 (SC); [1992] 1 CLJ 627; [1992] 1 MLRA 190.

Malayan Insurance (M) Sdn Bhd v Asia Hotel Sdn Bhd [1987] 2 MLJ 183 (SC); [1987] 1 CLJ 246; [1986] 1 MLRA 269.

Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 (CA); [1995] 1 AMR 622; [2000] 1 CLJ 503; [1995] 1 MLRA 48.

Koperasi Permodalan Felda Malaysia Bhd v Icon City Development Sdn Bhd (formerly known as ‘Sierra Peninsular Development Sdn Bhd’) & Anor [2023] 2 MLJ 338 (CA); [2023] 2 AMR 117; [2023] 2 CLJ 1; [2023] 2 MLRA 507.

Mission Richmark Sdn Bhd v Capitol Avenue Development Sdn Bhd [2021] 8 MLJ 691 (HC); [2020] CLJU 977.