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13 Dec 2022

IB Builders Sdn Bhd V DSS Capital Sdn Bhd & Anor I High Court
The case above involves a claim for specific performance made by the Plaintiff against the Defendants. In essence, the Plaintiff commenced a legal action for an order of specific performance agai[..]
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IB Builders Sdn Bhd v DSS Capital Sdn Bhd & Anor | High Court | 23 September 2022 | [2022] MLJU 2685

The case above involves a claim for specific performance made by the Plaintiff against the Defendants. In essence, the Plaintiff commenced a legal action for an order of specific performance against the developer (1st Defendant) to pay RM 2,050,000.00 being the balance purchase price due under the SPA. In a gist, the Plaintiff and the 1st Defendant had entered into a SPA where the Plaintiff agreed to sell and the 1st Defendant agreed to purchase the subject land for a purchase price of RM4,500,000.00. The 1st Defendant then put down the deposit for the subject land and the Plaintiff admitted to receiving the same. The final date for the 1st Defendant to furnish the balance purchase price fell on 6.11.2016 taking into account a 30-day automatic extension as provided for in the SPA. The 1st Defendant however failed to make payment of the balance purchase price by this date. Some 3 years later, the 2nd Defendant (a former director of the 1st Defendant), served a letter to the Plaintiff enclosing 2 post-dated cheques for the sum of RM4,000,000.00 in total. One of the cheques cleared, while the other one did not. The Plaintiff claimed that the 2 post-dated cheques for the sum of RM4,000,000.00 were payments for the balance purchase price due under the SPA. The 2nd Defendant on the other hand contended that the payments were for a different subject property which the 1st Defendant was not privy to. The 1st Defendant took the position that the 2nd Defendant was never authorized to make payments on behalf of the 1st Defendant in so far as the SPA in question was in concern. Furthermore, the 2 cheques were not issued in the name of the 1st Defendant. It was also the 1st Defendant’s position that the SPA had naturally lapsed after 6.11.2016 and in light of the conduct of the parties, the SPA had been abandoned and had come to an end. The 1st Defendant relied on clause 8 of the SPA and contended that in the event of default (failure to furnish balance purchase price within time), the Plaintiff is only entitled to terminate the SPA as well as to forfeit the deposit paid. There were various issues that required the court’s determination in the above suit and this included the following: (i)       Whether the SPA was still enforceable? (ii)      Whether the 1st Defendant had breached the SPA? (iii)     Whether the cheques were issued as payment for the balance purchase price of the subject property under the SPA? (iv)      Whether the 2nd Defendant is liable for the alleged dishonoured cheque pursuant to s. 47 of the Bills of Exchange Act 1949? (v)       Whether the Plaintiff was entitled to an order of specific performance against the 1st Defendant to complete the SPA? Our partner, Ankit R Sanghvi successfully represented and defended the 1st Defendant in the above proceedings. The High Court dismissed the Plaintiff’s claim with costs of RM40,000.00 ordered to be paid by the Plaintiff to the 1st Defendant. Click on Print to PDF button to download the full Grounds of Judgment. This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

Misrepresentation - Plaintiff's Claim to Rescind SPA Dismissed

Can a buyer of a property rescind the sales and purchase agreement based on an alleged misrepresentation of having an unimpeded view?  Sureendhran Subramaniam & Anor v Lush Development Sdn Bhd & Anor | June 21, 2022 | High Court [2022] MLJU 1453 The Plaintiffs claimed against the 1st Defendant (developer) for an order to rescind the sale and purchase agreement for a property and for the 1st Defendant to refund the 2nd Defendant (bank) of monies released to the 1st Defendant. The Plaintiffs claimed that the 1st Defendant had misrepresented to the Plaintiffs that the property will have an unimpeded view, a factor which the Plaintiffs claim was fundamental in their decision to purchase the property and which they claim had induced them to enter into the SPA with the 1st Defendant. Subsequently there was construction of MRT Line 2 in the vicinity of the property which the Plaintiffs claimed had impeded the view from his property. The High Court dismissed the Plaintiffs claim based on 3 grounds: [1] There was no misrepresentation by the 1st Defendant because the representation in the brochure has not resulted in something different than what it actually was. The Plaintiffs were unable to show the court how his property's view was impeded. Further, Clause 7.1 of the SPA states that the Plaintiff's' purchase of the property was not based on any representation by the 1st Defendant. [2] The facts showed that by entering into the Deferred Payment Scheme with 1st Defendant, the Plaintiffs had agreed that the 3 post-dated cheques that he has delivered to the 1st Defendant will be treated as differential sum which will enable the 2nd Defendant to disburse the loan to the 1st Defendant. The 1st Defendant did not misrepresent the 2nd Defendant when it confirmed that the Plaintiffs had paid the differential sum to the 1st Defendant. [3] The Plaintiffs had failed to specifically plead fraud or negligence in regards to their claim for misrepresentation. In the absence of fraud or negligence, the court will treat it as innocent misrepresentation which will not be sufficient for the Plaintiffs to rescind the SPA. A party cannot rescind a contract based on innocent misrepresentation unless it renders the subject of the sale different from what was contracted for. Our partner, Ankit R Sanghvi represented the developer (1st Defendant) and successfully defended the Plaintiff’s claim to rescind the SPA. The High Court also ruled in favour of the 1st Defendant's counterclaim against the Plaintiff. Click 'Print to PDF' for the case law. This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

Country Garden Danga Bay Sdn Bhd v Housing Tribunal & Ho Chee Kian [2022] 1 LNS 662 (Federal Court)

COUNTRY GARDEN DANGA BAY SDN BHD V HOUSING TRIBUNAL & HO CHEE KIAN [2022] 1 LNS 662 (FEDERAL COURT) Coram: Zaleha Yusof FCJ, Zabariah Mohd. Yusof FCJ, Rhodzariah Bujang FCJ Brief facts: The 2nd Respondent (Purchaser) entered into a Sale and Purchase Agreement (“SPA”) under Schedule H of the Housing Development (Control and Licensing) Regulations with the Appellant (Developer) on 23.8.2013 to purchase a unit with parcel no. Block 11-A-3402 (“the Unit”). Vacant possession was subsequently delivered to the 2nd Respondent on 01.11.2017 wherein he accepted the vacant possession by signing on the inspection form and thereafter proceeded to renovate the Unit. Unhappy with his Unit, the 2nd Respondent filed a claim against the Appellant to the 1st Respondent (Tribunal for Homebuyer’s Claim) on 02.01.2018 alleging that the 2nd Respondent was given the wrong unit because it came with an open balcony and not the covered balcony that he has requested for and therefore sought for damages. . Tribunal’s Decision The Tribunal found in favour of the 2nd Respondent by giving a ruling to amend the Unit’s specifications in the SPA to a Unit with covered balcony as the feature of the display model under section 16Y (2) of the Housing Development (Control and Licensing) Act 1966 (“HDA 1966”) and awarded the sum of RM50,000.00. The Appellant aggrieved by the decision has filed for judicial review at the High Court to quash the decision of the Tribunal and subsequently appealed to the Court of Appeal. Unfortunately, both Courts upheld the decision of the Tribunal and hence, this appeal by the Appellant to the Federal Court. . Federal Court’s Decision The appeal raises four (4) questions of law namely: - (a) The extent of the Tribunal’s jurisdiction under Section 16N (2) HDA 1966; (b) The extent of the Tribunal’s power under Section 16Y(2)(e) HDA 1966; (c) Estoppel issue; and (d) Natural justice issue. The Federal Court held that the Tribunal does not have the jurisdiction to consider the balcony issue raised by the 2nd Respondent because it was not a term in the statutory SPA. Tribunal’s jurisdiction shall be limited to a claim based on a cause of action arising from the express terms contained in the SPA and exclude any other collateral contracts outside the SPA. (Section 16N (2) of HDA 1966) The Tribunal also does not have the power to rectify the SPA to include terms which are inconsistent with the statutory SPA. The Federal Court held that the Tribunal’s power to vary or set aside the contract under Section 16Y(2)(e) of HDA 1966 shall be exercisable only in situation where there is inconsistency with the statutory SPA. On the estoppel issue, the Federal Court held there was an estoppel by conduct on the part of the 2nd Respondent when he accepted the vacant possession and exercised his right to ownership by renovating the unit. As such, the 2nd Respondent is estopped from claiming that he was given the wrong unit. Lastly, the Federal Court found there was no breach of natural justice as they are of the view that the Appellant had been given ample opportunity to examine the documents where they had some 2 months before the hearing to respond to the 2nd Respondent’s allegations that the SPA had been modified without consent and hence there was no issue of surprise. The appeal by the Appellant was allowed accordingly with cost of RM30,000 and the award of the Tribunal was therefore set aside.   This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice.   Written by: TEOH ZI HAN LL.B (Hons) Cardiff University ASSOCIATE (REAL ESTATE) zhteoh@hhq.com.my

Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd and another appeal [2022] MLJU 354 (Court Of Appeal)

OBATA-AMBAK HOLDINGS SDN BHD v PREMA BONANZA SDN BHD AND ANOTHER APPEAL [2022] MLJU 354 (COURT OF APPEAL) AZIZAH NAWAWI, ABU BAKAR JAIS AND LEE HENG CHEONG JJCA Facts: The Respondent is the Developer of a housing project, The Sentral Residences (“the Project”). The Purchaser of A-31-G and A-31-F entered into a prescribed statutory sale and purchase agreement (“SPA”) with the Developer which Clause 25 and Clause 27 had prescribed the delivery period of 54 months. High Court’s Decision The High Court judge struck out the Purchaser’s Summary Judgement based on the following grounds: Purchaser’s claim is time barred; Purchaser is required to challenge the EOT by judicial review; and There is a waiver or estoppel against social legislations. Court of Appeal’s Decision Issue (i) Whether the Purchaser’s claim for LAD is statute barred The Court of Appeal held that since the Purchaser challenges both clause 25 and 27 of the SPA from the inception or execution of the SPAs, the cause of action should run from the date of execution of the SPAs which is on 11.07.2012 and 18.07.2012 respectively. Since the 6 year period had expired on 10.07.2018 and 17.07.2018 respectively when the Purchaser filed suit on 18.06.2020, the Purchaser’s claim is time barred. The Court of Appeal hence dismissed the Purchaser’s appeals with cost. This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice. Written by: HEE SUE ANN LLB (Hons) Multimedia University ASSOCIATE (REAL ESTATE) sahee@hhq.com.my

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