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Case Struck Out: Federal Court’s Judgment Of Obata-Ambak Followed

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10 January 2025

Our Partner, Esther Tan, together with Associates, Delvin Singh Mangat and Clement Ling from our Construction Dispute Resolution Practice Group have secured victory on behalf of a property developer in a striking-out application, whereby the buyers’ claim for liquidated damages (“LAD”) was struck out.

Brief Facts
The dispute arose from a Sale and Purchase Agreement dated 24 November 2017 (“SPA”) for the sale of a parcel in a housing development known as the Residensi Solaris Parq. The SPA provided that the delivery of vacant possession was to be made within 54 months from the date of the SPA.

Prior to the execution of the SPA, the Controller of Housing (“Controller”) extended the time for delivery of vacant possession from 36 to 54 months. Subsequently, a further 320-days exemption was granted due to COVID-19. This meant that vacant possession was to be delivered by 22 February 2023.

Vacant possession was delivered by 29 December 2022. On 17 April 2024, the buyers commenced the present action, amongst others, claiming that vacant possession had to be delivered within 36 months. The buyers claimed LAD in the sum of RM238,566.92.

Case Struck Out
The buyers’ claim was premised on the Federal Court’s judgment in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and other appeals [2020] 1 MLJ 281 (“Ang Ming Lee”), where it was held that the Controller has no power to extend the period for delivery of vacant possession prescribed in Schedule H of the Housing Development (Control and Licensing) Regulations 1989.

Relying on, amongst others, the Federal Court’s decision in Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd and other appeals [2024] 5 MLJ 897 (“Obata-Ambak”), the developer filed the application to strike out the buyers’ claim, contending, amongst others, the following:

(1) The buyers’ claim is time-barred, as the cause of action accrued from the date of execution of the SPA, which was more than 6 years prior to the commencement of this action;

(2) Ang Ming Lee only applies prospectively and does not apply to extensions granted before the decision; and

(3) The buyers’ claim for LAD is baseless.

After considering the relevant cause papers and counsels’ submissions, the Court ordered that the buyers’ claim be struck out with costs to the developer. The Court’s brief grounds aligned with the developer’s contentions above. Obata-Ambak was followed.

To read our analysis on the Obata-Ambak’s Case, please click HERE.

The Counsels for this case are:
 
Esther Tan
 
Delvin Singh Mangat
 
Clement Ling

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