Legal Update 2 of 2018

CASE

CEMERLANG LAND SDN BHD V ALI BIN SAAT & ANOR AND OTHER APPEALS [2018] 1 MLJ
331

ISSUE

Can a claim for late delivery be brought against a subsequent developer in an
abandoned project if the delay was caused by the previous developer?

BRIEF FACTS

  • Housing Developer A signed sale and purchase agreements with buyers (‘the first SPAs’).
  • Unfortunately Housing Developer A abandoned the project before it was completed.
  • Steps were taken by the authorities to revive the project and Cemerlang, was appointed as the developer to finish the project.
  • Cemerlang offered the original buyers to deliver the premises in the revived project at the purchase price they had previously agreed upon.
  • Most of the original buyers, accepted the offer, signed a deed to revoke their first SPAs and entered into new SPAs which promised to complete the project within three months.
  • The revived project was completed and vacant possession of the units was handed over to all the buyers, within the time stipulated under the new SPAs.
  • Sometime thereafter, the house-buyers filed a claim with the House-buyers’ Claims Tribunal (‘the tribunal’) for damages for late delivery of the units they had agreed to buy under their first SPAs.
  • The tribunal awarded the damages sought for, ruling, inter alia, that Cemerlang was still bound by the terms and conditions of the first SPAs because their purported revocation was null and void.
  • Cemerlang then applied to the High Court by way of judicial review to quash the tribunal’s award.
  • The High Court dismissed the application holding that the tribunal had not committed any serious error of law.

DECISION: APPEAL ALLOWED

  • The decision of the tribunal had to be set aside on the ground that it was irrational and unreasonable. The tribunal had acted in excess of its jurisdiction as the complaint to it was made after the second SPA and the deed of revocation of the First SPA were executed.
  • By the deed of revocation, the house buyers agreed to revoke and rescind the first SPA and to treat it as null and void.
  • The High Court committed a grave error when it, inter alia, brushed aside the facts and the law applicable and decided not to consider the submissions of Cemerlang as to whether the tribunal had committed an error.

 

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