Wealth Plateau Sdn Bhd v Wong Yip Chee (WA-11BNCvC-46-07/2024)

This is an appeal brought by the appellant, Wealth Plateau Sdn Bhd ("the developer"), against the decision of the Magistrate’s Court dated 15 July 2024.

By that decision, the learned Magistrate allowed part of the respondent's claim for liquidated ascertained damages ("LAD") for the late delivery of vacant possession of a property known as "Paraiso @ the Earth Bukit Jalil". The developer was ordered to pay the respondent, Wong Yip Chee (“the purchaser”), the sum of RM19,405.91, together with costs of RM3,500.00.

The developer now appeals against this finding of liability and prays that the appeal be allowed and the learned Magistrate’s decision be set aside. The purchaser, in turn, seeks to uphold the decision and prays that the appeal be dismissed with costs.

The material facts, which are largely undisputed, may be conveniently summarised as follows. It is common ground that the purchaser agreed to purchase the property from the developer for the total sum of RM737,829. The transaction commenced with the payment of a booking fee of RM5,000 by the purchaser on 30 April 2017, as evidenced by a cheque marked as exhibit P1.

5.

(1) Vacant possession of the said Parcel shall be delivered to the Purchaser in the manner stipulated in clause 27 within forty-eight (48) months from the date of this Agreement. [Emphasis is mine]

However, by letter dated 26 October 2021, the developer invoked the provisions of Section 35 of the Covid-19 (Temporary Measures) Act 2020 to extend the delivery period by 289 days. The said letter stated that the final date for delivery of vacant possession was extended to 30 March 2022.

Subsequently, by notice of handover dated 30 March 2022 and sent via registered post, the developer informed the purchaser that vacant possession was ready for collection, subject to the settlement of all outstanding financial obligations. Vacant possession and the keys to the property were eventually delivered to the purchaser on 20 May 2022.

The purchaser’s claim for LAD is founded on the alleged delay between the extended date for delivery and the actual date of handover. The claim was calculated for a period of 95 days, from 13 February 2022 to 20 May 2022, and amounted to the sum of RM23,044.52.

The appeal gives rise to the following principal issues for the Court’s determination:

Whether, for the purposes of calculating LAD, the contractual period commences on the date of the booking fee (30 April 2017) or on the date of the SPA (7 August 2017);

(ii) Whether, on a proper construction of the agreement and the applicable extensions of time, there was in fact any delay on the part of the developer in the delivery of vacant possession.

(iii) Whether, if a delay is established, the quantum of LAD awarded by the Magistrate Court was correct. The Appellant's Contentions

Counsel for the developer submits that the learned Magistrate erred in law and fact. The primary contention is that the learned Magistrate misidentified the commencement date for the calculation of LAD. It is argued that the cause of action for late delivery can only arise from the date of the binding statutory contract, being the SPA executed on 7 August 2017. The prior payment of a booking fee, it is submitted, was made “subject to contract” and cannot form the basis of the parties’ legal relationship for the purposes of determining a breach.

Central to the developer’s case is the recent Federal Court decision in Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd and other appeals [2024] 5 MLJ 897. It is submitted that this decision from the apex court clarifies that sale and purchase agreement is the foundational document from which all rights and obligations flow. The developer contends that Obata-Ambak establishes that the cause of action for any breach, including the late delivery of vacant possession, accrues only from the execution of the sale and purchase agreement. Accordingly, parties are bound by the express terms of the SPA they have executed, including the stipulated 48-month completion period.

However, when pressed by the Court to identify the specific passage in the judgment of Obata-Ambak which purportedly supports this contention, Counsel for the developer was unable to point to any such paragraph.

Further, the developer contends that there was, in fact, no delay. It is asserted that a valid 12-month extension of time was duly obtained from the Controller of Housing and was properly incorporated into the SPA. This extension, combined with the statutory relief granted under the Covid-19 (Temporary Measures) Act 2020, rendered the extended delivery date of 30 March 2022 lawful. The developer submits that having issued a valid notice of vacant possession on 30 March 2022, and in accordance with the terms of the SPA, vacant possession was deemed to have been lawfully delivered on 4 May 2022. Consequently, it is argued that the purchaser’s claim for LAD is untenable.

Counsel for the purchaser submits that the learned Magistrate was correct in law and in fact, and that her reasoning is unimpeachable. The purchaser places primary reliance on the decision of the Federal Court in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor [2021] 2 MLJ 60. It is contended that this case remains the binding authority on the specific issue of the commencement date for the calculation of LAD where an illegal booking fee has been collected by a developer.

It is argued that the decision in Obata-Ambak is distinguishable on its facts and more importantly, on its ratio decidendi. The central issue in Obata-Ambak concerned the limitation period for filing a claim and the prospective application of the Federal Court’s decision in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and other appeals [2020] 1 MLJ 281. The court in Obata-Ambak was not concerned with the fundamental calculation of the delivery period where a prohibited booking fee has been paid. Consequently, it is submitted that Obata-Ambak does not purport to overrule the clear legislative and judicial pronouncements in PJD Regency regarding the illegality of booking fees and the overriding need to protect purchasers.

The purchaser further maintains that the developer, having collected the booking fee, is estopped from seeking to rely on a subsequent SPA date to its advantage. The calculation of the delivery period must, in equity, commence from the date of the purchaser was first bound by the transaction, which is the date of the payment of the booking fee.

The core issue for determination in this appeal is the date from which the 48-month period for the delivery of vacant possession ought to be calculated. The developer contends for the date of the SPA, whereas the purchaser submits that the date of the booking fee is the correct commencement point. The learned Magistrate, in her comprehensive grounds of judgment, correctly applied the law as laid down by the Federal Court in PJD Regency.

The principles enunciated in PJD Regency are determinatively clear. The Federal Court made a seminal observation on the legislative intent behind the Housing Development (Control and Licensing) Act 1966 ("HDA") and its Regulations, holding: “[47] The recent amendment to the HDR 1989 vide PU(A) 106/2015, to our minds, further cements the notion that the legislative framework has been further tightened to abrogate this practice of booking fees. Regulation 11(2) was amended to even stricter terms: everyone, not just developers, is prohibited from collecting booking fees. The new reg 11(2) of the HDR 1989 reads:

No person including parties acting as stakeholders shall collect any payment by whatever name called except as prescribed by the contract of sale. [48] In our view, the intention of Parliament is unequivocal. From the Hansard in 1966, to the change in the subsidiary legislation up to the amendment to the HDR 1989 in 2015, the written law in force has made it crystal clear that the collection of booking fees is to be absolutely prohibited. [49] Given the clear legislative intent, it follows that we are unable to read the scheduled contracts in these appeals literally. The legislative aim here is that any payment collected must be in accordance with the terms of the statutory contract of sale. Accordingly, to give effect to this legislative intent and in light of the collective status of the HDA 1966 and HDR 1989 as social legislation, it follows that where this illegal practice of booking fee is afoot, the date of the contract cannot be taken to mean the date printed in the scheduled contracts. Otherwise, this court would be condoning the developers’ attempt in this case to bypass the statutory protections afforded to the purchaser by the legislative scheme put in place. [78] In construing the illegality against the developers, if it is their attempt to have secured an early bargain through the illegal collection of booking fees, then the protective veil cast by the legislature over the purchasers should operate in a way so as to bind the developers to the booking fees. In this way, the developers will have to bear the full extent of the LAD payable by them to the purchasers consistent with the overall intent of the written law in respect of late delivery of vacant possession...” [Emphasis is mine]

The developer's reliance on Obata-Ambak is misplaced. The Federal Court in Obata-Ambak was primarily concerned with whether the claims before it were time-barred under the Limitation Act 1953. The court found that the cause of action for challenging the validity of the SPA clauses accrued from the date the SPA was signed. The court was not deciding on the specific question of how to calculate LAD where a booking fee was paid. In fact, the decision in Obata-Ambak does not disturb the principle in PJD Regency (supra) that the calculation of the delivery period must commence from the date of the illegal booking fee to give effect to the protective nature of the HDA.

To adopt the developer's argument would be to allow them to benefit from their own illegality in collecting the booking fee. This would be contrary to the clear social legislative intent of the HDA, as identified in PJD Regency (supra). The learned Magistrate was therefore correct in law to hold that the 48- month period, plus the 289-day Covid-19 exemption, should be calculated from the booking fee date of 30 April 2017. This brings the due date for vacant possession to 13 February 2022

Accordingly, I find that the answer to the first issue is in favour of the purchaser. The date to calculate LAD begins from 30 April 2017.

It having been established that the contractual date for the delivery of vacant possession was 13 February 2022, the next issue for determination is whether the developer in fact delivered the property within the time permitted by law.

The parties’ right and obligations in this regard are governed by specific "deeming" provisions within the SPA. Clauses 27(3) and 32(1) of the SPA are material and provide as follows:

27.(3) Upon the expiry of thirty (30) days from the date of service of a notice from the Developer requesting the Purchaser to take possession of the said Parcel, whether or not the Purchaser has actually entered into possession or occupation of the said Parcel, the Purchaser shall be deemed to have taken delivery of vacant possession.

32.(1) Any notice, request or demand required to be served by either party hereto to the other under this Agreement shall be in writing and shall be deemed to be sufficiently served—

if it is sent by the party or his solicitors by registered post addressed to the other party’s address hereinbefore mentioned and in such case, the notice, request or demand shall be deemed to have been received upon the expiry of a period of five (5) days of posting of such notice, request or demand; or [Emphasis is mine]

The legal effect of such deeming provisions is to create a conclusive legal fiction. This principle was explained by the Court of Appeal in Malaysian Airline System Bhd v Competition Commission and another appeal [2021] MLJU 2089, where the court held: “[111] The word “deemed” is, of course, a very powerful word. It brings into being a factual situation which may not in reality be there. It has the effect of creating an event or situation which ordinarily and in reality, is not even there. Lewison in The Interpretation of Contracts (5th Ed) at para 14.12 stated that where a deeming clause is used, it would usually be conclusive as to the deemed meaning or consequence. [115] Mohamed Dzaiddin SCJ (later CJ) held that the words ‘shall be deemed’ in the clause meant ‘shall be regarded as’. His Lordship considered the cases of Canadian Imperial Bank of Commerce v Haley (1979) 100 DLR (3d) 470 and R v Westminster Unions Assessment Committee; ex parte Woodward & Sons [1917] 1 KB 832 where in the circumstances of the cases, the deeming provision was not meant to be a presumption and was therefore not something that was rebuttable: The deeming provision was. conclusive as to the deemed meaning or consequence and the defendant was precluded from showing otherwise....” [Emphasis is mine]

Applying the above principles to the contractual terms and the facts at hand, the calculation of the deemed date of delivery proceeds as follows. The notice of vacant possession was dispatched by registered post on 30 March 2022. In accordance with clause 32(1) of the SPA, the notice was deemed to have been served on the purchaser upon expiry of five days from posting, that is, on 4 April 2022. Pursuant to clause 27(3), the purchaser is then deemed to have taken delivery of vacant possession upon the expiry of thirty days from the date of service of such notice. Consequently, vacant possession was lawfully deemed to have been delivered on 4 May 2022.

The purchaser’s mere denial of having received the notice, without any evidence to show that he was absent from the address or that delivery was otherwise impossible, is insufficient to rebut the conclusive effect of the deeming provision. This position is consistent with the authority in Arab-Malaysian Finance Bhd v Chong Chin Shoong [1997] MLJU 264, where it was held that: “I do not have to decide whether, in law, it would be open to the defendant to rebut the presumption of receipt provided by clause 8, because he has not attempted to do so. A bare denial of having received the letter of demand will not do. If at all it is open to him to rebut the presumption, he must show circumstances that would have rendered it impossible for him to have received the letter of demand, such as, for instance, that at the time when the postal agent attempted to deliver the letter he was away on business or holiday and no one was in occupation at the two addresses...” [Emphasis is mine]

The period of delay is therefore calculated from the due date of 13 February 2022 to the deemed date of delivery on 4 May

This amounts to a delay of 80 days. The learned Magistrate’s finding on this point is impeccable and is affirmed. The subsequent physical handover of keys on 20 May 2022 was occasioned by the purchaser’s own delay in settling the outstanding balance and arranging for collection, and cannot be attributed to any fault on the part of the developer.

For the reasons set out above, I find that there was a delay of 80 days on the part of the developer in delivering vacant possession of the property to the purchaser.

Having determined that the period of delay amounted to 80 days, the calculation of the LAD becomes a matter of straightforward arithmetic. The SPA itself stipulates the rate of LAD at 10% per annum on the purchase price for the late delivery of the property, and at the rate of 10% per annum on the last 20% of the purchase price for the late delivery of common facilities.

The relevant clauses for LAD are clause 25(2) and clause 29(2), which provide as follows: Time for delivery of vacant possession

(1) Vacant possession of the said Parcel shall be delivered to the Purchaser in the manner stipulated in clause 27 within forty-eight

months from the date of this Agreement.

If the Developer fails to deliver vacant possession of the said Parcel in the manner stipulated in clause 27 within the period stipulated in subclause (1), the Developer shall be liable to pay to the Purchaser liquidated damages calculated from day to day at the rate of ten per centum (10%) per annum of the purchase price from the expiry of the period stipulated in subclause (1) until the date the Purchaser takes vacant possession of the said Parcel. Completion of common facilities

(1) The common facilities serving the said housing development, which shall form part of the common property, shall be completed by the Developer within forty-eight (48) months from the date of this Agreement. The Developer’s architect shall certify the date of completion of the common facilities and a copy of the certification shall be provided to the Purchaser.

If the Developer fails to complete the common facilities in time, 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 last twenty per centum (20%) of the purchase price. [Emphasis is mine]

The calculation, as correctly performed by the learned Magistrate, is as follows:

LAD for Property: RM737,829 x 10% x (80/365) = RM16,171.59.

LAD for Common Facilities: RM737,829.00 x 20% x 10% x (80/365) = RM3,234.32

Total LAD Awarded: RM19,405.91

This calculation is arithmetically sound and is based on the correct period of delay. The purchaser’s initial claim, which was predicated on a 95-day delay, was therefore rightly disallowed. The quantum of damages awarded by the learned Magistrate is just and proper.

For the reasons set out above, I am satisfied that the learned Magistrate was correct in both her findings of fact and her application of the law. She correctly identified that the period for LAD calculation commenced from the date of the booking fee, she correctly found that there was an inexcusable delay of 80 days, and she correctly calculated the quantum of damages payable.

The appeal is therefore devoid of merit and must be dismissed.

Accordingly, it is ordered that:

The appeal is hereby dismissed.

(ii) The decision of the Magistrate Court dated 15 July 2024 is affirmed in its entirety.

(iii) The appellant shall pay to the respondent the sum of RM19,405.91.

(iv) Costs of this appeal of RM7,000 are to be paid by the appellant to the respondent, subject to allocatur. Dated the 6th day of January 2026 … SGN … ……………………………………………….. MOH KOK WAI JUDICIAL COMMISSIONER OF THE HIGH COURT HIGH COURT (CIVIL DIVISION NCvC14) HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF MALAYSIA Counsel for the Appellant : Dayang Nurfatriah binti Munir Messrs Akmar & Co Counsel for the Defendants : James Ng Kean Yip, Wan Elya Nadiah binti Wan Azizi and Tay Yeong Hui Messrs Arifin & Partners