When is the date of vacant possession? How does this affect the calculation of liquidated ascertained damages (“LAD”)?
On 17 October 2022, the Court of Appeal in Govindan Kumar a/l Muniandy and Tribunal Tuntutan Pembeli Rumah v Eco Green City Sdn Bhd dismissed the purchaser’s legal challenge to extend the cut-off date for the calculation of LAD.
At first instance, the Tribunal awarded the first appellant’s claim and decided that the LAD should be calculated from the expiry of 36 months from the date of the payment of the booking fee until the installation date of electricity meter to the first appellant’s unit.
In a judicial review, the High Court had quashed the Tribunal’s decision in favour of the respondent and decided that vacant possession was delivered on the issuance date of the notice of delivery of vacant possession, notwithstanding that no actual electricity was supplied at that point in time, as the agreement provided that the respondent shall let the purchaser into possession upon among others that “water and electricity supply are ready for connection”. The appellants sought to appeal against this decision and argued that vacant possession was only delivered on the installation date of electricity meter.
The Court of Appeal dismissed this legal challenge. Among others, the Court of Appeal agreed with the High Court and held that “ready for connection” does not mean “actually connected”. The respondent had ensured compliance with the agreement that electricity supply for the unit has been ready for connection at the time of the service of the notice of delivery of vacant possession. The Court found that there is only a delay of 19 days as opposed to the appellant’s alleged 130 days.
Our Dispute Resolution Partner, Ankit Sanghvi acted for the successful respondent in resisting the legal challenge.
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