Dalam Mahkamah Rayuan Malaysia Di Putrajaya (Bidang Kuasa Rayuan) RAYUAN SIVIL NO: J-02 (NCVC) (W) - 2725-12/2013
Dalam Mahkamah Rayuan Malaysia Di Putrajaya (Bidang Kuasa Rayuan) RAYUAN SIVIL NO: J-02 (NCVC) (W) - 2725-12/2013
Dalam Mahkamah Rayuan Malaysia Di Putrajaya (Bidang Kuasa Rayuan) RAYUAN SIVIL NO: J-02 (NCVC) (W) - 2725-12/2013
ANTARA
Antara
Dan
Yang diputuskan oleh Yang Arif Dato Abdul Rahman bin Sebli, Hakim Mahkamah
Tingi Malaya di Johor Bahru pada 7 haribulan November 2013]
CORAM:
A. THE PARTIES
[1] The appellant in this appeal, Oxbridge Height Sdn Bhd, was a
housing developer for a project described as Jaya Putra Perdana which
comprised part of a larger project described as Bandar Jaya Putra. The
respondents were purchasers of a double-storey terrace house in Phase
B of Jaya Putra Perdana. The appellant was the vendor of the property.
C. BACKGROUND FACTS
[4] In the Sale and Purchase Agreement ("SPA") executed between the
parties dated 17.4.2006, which followed the standard agreement under
Schedule G of Regulation 11(1) of the Housing Development (Control and
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Licensing) Regulations 1989 ("the Regulations"), the usual provision on
Liquidated and Ascertained Damages ("LAD") for late delivery was
included. Clause 23 of the SPA required vacant possession of the
building to be delivered to the purchaser within 24 calendar months from
the date of the SPA, failing which the vendor (the developer) was liable to
pay to the purchaser liquidated damages "calculated from day-to-day at
the rate of 10% per annum of the purchase price from the expiry date of
the delivery of vacant possessionuntil the date the purchaser takes
vacant possession of the same building."
[5] The project stalled. According to the plaintiff, as the developer, the
project suffered financial difficulties as a result of flooding (force majeure)
from around December 2006 until early 2007. The project was classified
by Bahagian Pemantauan Perumahan Swasta, Jabatan Perumahan
Negara, Kementerian Perumahan dan Kerajaan Tempatan ("JPN") as a
"projek lewat" and "projek sakit". In the report produced by JPN, it was
acknowledged that the project suffered delays because the developer
faced a force majeure problem.
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[7] It appeared on the evidence that the signing of the Settlement
Agreement was the result of the involvement and assistance of JPN and
a series of meetings held between the parties. According to the appellant,
JPN acted as a facilitator and mediator between the developer and the
purchasers.
[8] Counsel for the appellant referred the court to the relevant reports
and minutes of meetings prepared by JPN which appeared on pages 385
to 409 of the Appeal Record, Volume 2 (3). It was in evidence that the 1st
respondent attended the meetings as a representative for the purchasers
of Phase 3B. The background leading to the signing of the Settlement
Agreement could be gleaned from the contents of an e-mail letter from
Pengarah, Bahagian Pemantauan Perumahan Swasta (Exhibit P2),
appearing on pages 391 to 392 of the same Volume of the Appeal Record.
To quote salient parts of the e-mail letter:
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iii) JPN memaklumkan implikasi yang akan dihadapi jika projek tersebut
diisytihar sebagai projek terbengkalai atau tindakan Mahkamah di
ambil seperti berikut:
[9] On the evidence, it was apparent that JPN was part and parcel of
the negotiating process, and the proposed Settlement Agreement was
extensively discussed between the parties. It was clearly proposed that
the LAD was to be calculated from a new date of completion.
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The Terms of the Settlement Agreement
(b) The purchaser had agreed to the request subject to the terms
and conditions of [ the ] Settlement Agreement (Recital 1.4);
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against the outstanding purchase price for the Property. (Clause
2.1)
(f) The vendor waived all late interest charges to date and gave 21
days from the date of the Agreement for the purchaser to settle
any outstanding amounts of instalments due on the purchase
price for which progressive payments notices had been sent, and
agreed to charge late payment interest on these sums only for
the period after this 21 days if the outstanding amounts were not
paid. (Clause 2.3)
(h) In the event vacant possession was not delivered on the New
Completion Date in the manner provided in the Principal
Agreement, the purchaser shall be at liberty to make a claim for
the LAD as if this extension of time was not granted. (Clause
2.5)
[11] That the respondents executed the Settlement Agreement and that
their property was subsequently delivered within time, were not matters in
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dispute. On the evidence, it appeared that more than 80% of purchasers
affected in Phase 3B executed the Settlement Agreement by 20.12.2010.
See page 408 of the Appeal Record, Vol. 2(3), which contains the project
update figures as at 20.12.2010. The respondents executed the
Settlement Agreement on 28.7.2010, as evidenced on the signature page
appearing at page 474 of the same volume of the Appeal Record.
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The Pleadings in the High Court
[15] The appellant then instituted the present claim in court against the
respondents based on the tort of deceit and for breach of the Settlement
Agreement. In the alternative, the appellant claimed for
misrepresentation, fraudulent or otherwise. See paragraph 19 of the
Statement of Claim appearing on page 36, Appeal Record, Vol. 1 (Part
A).
"23. Acting on the face and truth of the said presentations and induced
thereby, the plaintiff entered into the said Settlement Agreement and
thereafter completed the construction of the said property and delivered
vacant possession to the defendants.
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24. The plaintiff has since discovered that each of the said representation
was untrue in that:
24.1 The defendants had filed a claim at the said Tribunal on 16.7.2012
for the recovery of the LAD as calculated from 17.4.2008 which is
a date for the delivery of vacant possession as stipulated under
the said SPA;
24.2 The said Tribunal on 7.9.2012 awarded the defendants the
payment of LAD in the sum of RM50,000.00; and
24.3 The defendants (in particular the 1st defendant as a member of
the committee of homebuyers representing Phase 3B) induced or
influenced or encouraged other homebuyers to similarly file a
claim at said Tribunal for the recovery of the LAD.
25. The defendants made the said representations fraudulently and either
well knowing that they were false and untrue or recklessly not caring
whether they were true or false."
[17] The appellant also averred that 44 other purchasers were led to
cancel their purchase in July 2012 after the respondents filed their claim
with the Tribunal. In paragraph 17 of the Statement of Claim, the appellant
pleaded:
[18] The appellant therefore claimed resultant loss and damage and
provided the following particulars of damages:
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PARTICULARS
The award of the said Tribunal dated 7.9.2012 RM50,000.00
Loss of profits due to the cancellation of SPA
by the other purchasers (and still continuing) RM6,544,811.00
Loss of reputation for social undermining RM10,000,000.00
[19] The High Court dismissed the appellant's claim after a full trial. Two
issues were addressed by the learned High Court Judge, namely (a)
whether the respondents were liable for the tort of deceit, and (b) whether
the respondents were liable to the appellant for breach of the terms of the
Settlement Agreement. In dismissing the claim for deceit, the Court found
that there was no evidence that the respondents had agreed to waive the
LAD, the waiver being merely a suggestion made by the respondents and
the other purchasers. There was also no evidence, according to his
Lordship, to establish that the respondents had, by filing their claim at the
Tribunal, influenced the other purchasers.
[20] As for the claim for breach of the terms of the Settlement
Agreement, the Court found the Settlement Agreement to be invalid on
the basis that it contravened the provisions of the Housing Development
(Control and Licensing) Act 1966, and further, the SPA had remained valid
and not rescinded by the Settlement Agreement.
[21] The learned High Court Judge concluded thus in relation to the 1st
issue:
Bagi isu (1) saya mendapati bahawa tidak terdapat sebarang keterangan
bahawa defendan-defendan pernah menyatakan bahawa mereka ingin
gugurkan Tuntutan LAD tersebut. Penipuan (fraud) mesti dibuktikan
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melangkaui keraguan munasabah (beyond reasonable doubt) tetapi dalam
kes ini plaintif sama sekali gagal membuktikannya. Tidak ada keterangan
sedemikian dikemukakan oleh plaintif. Malahan keterangan saksi plaintif
sendiri iaitu SP2 dan SP3 membuktikan bahawa defendan pertama
memang berhasrat untuk membuat Tuntutan di Tribunal. Atas keterangan
yang ada dan kebarangkalian kes saya mendapati sebenarnya
pengguguran Tuntutan LAD itu hanyalah cadangan sahaja dan bukan satu
persetujuan atau janji di pihak pembeli-pembeli.
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Saya tidak bersetuju dengan hujahan Peguam plaintif bahawa perjanjian
penyelesaian dalam kes ini hanya merupakan satu perjanjian kolateral
yang wujud side by side kepada Perjanjian Jual Beli. Apa yang jelas ialah
Perjanjian Jual Beli dalam kes ini tertakluk kepada Housing Development
(Control and Licensing) Act 1966 dan juga peraturan yang dibuat di bawah
Akta tersebut. Kes yang berkaitan ialah Sentul Jaya Sdn Bhd v Hariram
Jayaram & Ors and Other Appeals
[23] In our view, the substance of the appeal turned on the validity of the
Settlement Agreement. It seemed to us obvious on the evidence that the
respondents (especially the 1st respondent) had expressly agreed to
waive the LAD claimable under the SPA. It could not be said this waiver
was a mere suggestion. Why would the respondents execute the
Settlement Agreement except to agree to waive the earlier LAD and to
accept the new completion date? In our view, the learned High Court
Judge had materially erred in his assessment of the evidence and had
failed to address the course of negotiations and meetings between the
developer, the house buyers and the JPN in the context of the
development being a projek sakit which was unfortunately delayed by
force majeure. The developer made it plain it could not continue with the
project unless the LAD claims were waived in view of its financial
difficulties resulting from the force majeure. The larger majority of house
buyers, including the respondents, agreed to a waiver, had their houses
completed and delivered by the appellant as developer/vendor within the
new completion date as agreed under the Settlement Agreement. Despite
agreeing to the waiver, the respondents still proceeded to file a claim with
the Tribunal and obtained the award of RM50,000.00 in their favour for
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LAD calculated from the initial period of delay under the SPA. This action
constituted a clear breach of the Settlement Agreement on the facts.
[24] On the law, the signing of the Settlement Agreement would fall
within the terms of s. 64 of the Contracts Act 1950 which deals with the
dispensation of a promise made to a promisee:
Isu mengenai LAD adalah contractual dan statutory. Tidak ada proviso
dalam kontrak atau regulasi untuk dikecualikan daripada liability dengan
menggunakan alasan kepentingan awam.
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proposition could be agreed. The two decisions of our courts, referred to
and applied by the High Court, remain good and binding authority under
our law. MK Retnam Holdings Sdn Bhd v Bhagat Singh, supra, in
particular, is a Supreme Court decision of considerable weight, and on the
particular facts of that case, the Supreme Court had good ground to
invalidate a second Agreement entered into which extended the time for
completion for an additional six months from the date of that Agreement
at an increased purchase price. The Supreme Court noted with some
dismay that [the] position of Bhagat Singh s/o Surian Singh when he
signed the second Agreement must be one of extreme desperation
because by that time he had already retired from service and was renting
a house and there had been a delay of more than a year from the due
date of delivery of vacant possession under the first Agreement. The
Supreme Court also observed that the Managing Director of the
developer company admitted frankly that the real reason for the second
Agreement was to delay the date of delivery of the house and also to get
an increase in the purchase price and had said candidly that he was not
aware of any other reason. One can therefore understand why the
Supreme Court held:
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against the strong, again on its particular and peculiar facts. We indorse
and accept the views expressed by the Court of Appeal, which was
highlighted in the submissions before us. To quote the relevant passage
and the reference to Schedule H contract being a special contract:
The contact which has fallen for construction in the present case is a
special contract. It is prescribed and regulated by statute. While parties in
normal cases of contract have freedom to make provisions between
themselves, a housing developer does not enjoy such freedom. Hence,
parties to a contract in Form H cannot contract out of the scheduled form.
Terms more onerous to a purchaser may not be imposed. So too, terms
imposing additional obligations on the part of the purchaser may not be
included in the statutory form of contract (at p. 626 of the Report, per
Gopal Sri Ram JCA (as he then was))
[28] This was an appeal concerning, among other things, the issue
whether a purchaser would be required to give notice under s. 56(3) of the
Contracts Act 1950 when he or she chose to accept the delivery of vacant
possession outside of the time for delivery and proceed further to sue for
LAD under the standard form contract under the Housing Development
(Control and Licensing) Regulations 1989. It was argued that once the
date for delivery of vacant possession had passed, time became at large
such that by s. 56(3) of the Contracts Act 1950, the purchaser had to give
notice to render time to be of the essence once more. The Court of Appeal
found this argument to be without merit. S. 56(3) dealt with general
contracts, not a special contract under the housing legislation. The Court
of Appeal stated:
[29] It was also argued in that appeal that the financial crisis of 1997
frustrated the contract, and as such the developer should be excused from
further performance, since performance had become commercially
impossible. The following passage in the Court of Appeal Judgment is of
interest, and relevant to this instant appeal:
we are of the view that the defence of frustration is not available to the
appellant. The 1997 financial crisis merely made it more onerous or
perhaps more expensive for the appellant to perform its obligations. It did
not render the contract radically different. There is a further reason why the
plea of frustration should fail. Under reg. 11(3) of the Regulations it was
open for the appellant to make representations to the Controller of Housing
- to quote from the Regulations - owing to special circumstances or
hardship or necessity compliance with any of the provisions in the contract
of sale is impracticable or unnecessary (at p.628 of the Report; we add
the necessary emphasis).
[31] We therefore allowed the appeal in part on this basis alone. The
appeal was allowed in part because we were not persuaded that the
appellant had established its claim for deceit and fraudulent
misrepresentation, and there was accordingly no basis legally and
evidentially for the extravagant claims for loss of profits and loss of
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reputation for social undermining to be allowed. It is trite that the burden
of proof for deceit/fraud is high. Proof of fraud has to be on the standard
of proof beyond reasonable doubt even in civil cases. The law on this is
presently clear (Asean Security Paper Mills v CGU Insurance Bhd [2007]
2 CLJ 1; Yong Tim v Hoo Kok Chiong & Anor [2005] 3 CLJ 229;
Saminathan v Pappa [1980] 1 LNS 174). We did not believe the appellant
had discharged its burden of proof on this high standard, and to this extent
we agreed with the High Court in its assessment in rejecting the claims for
damages for loss of reputation and loss of profits.
[33] We ordered that each party shall bear their own costs of this appeal.
The deposit was ordered to be refunded to the appellant.
Sgd.
(DATO MOHAMAD ARIFF BIN MD. YUSOF)
Judge
Court Of Appeal
Malaysia
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Counsels/Solicitors
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