Contract – Whether right for purchasers to resile from their promise not to sue and claim damages for late delivery.

Oxbridge Height Sdn Bhd v Abdul Razak Mohd Yusof & Anor [2015] 3 MLRA 59

• The appellant (“Oxbridge”) was a housing developer for a housing project (“the project”).
• The respondents (“the purchasers”) purchased a unit from Oxbridge through a sale and purchase agreement (“SPA”) dated 17 April 2006.
• Clause 23 of the SPA required Oxbridge to deliver vacant possession to purchasers within 24 months from the date of the SPA.
• Failing to follow Clause 23 would make Oxbridge liable to pay the purchasers liquidated and ascertained damages (“LAD”).
• Due to the flooding between December 2006 and early 2007, the project suffered financial difficulties and stalled.
• The project was classified as a “projek lewat” and “projek sakit” by the JPN, which reported that the project suffered delays because Oxbridge faced a force majeure (i.e. the flooding).
• Oxbridge and the purchasers subsequently entered into a settlement agreement (“SA”) dated 10 October 2011.
• The SA provided that:

1. the vendor (i.e. Oxbridge) has requested for an extension of time to complete the project;
2. the purchasers are to waive the LAD for late delivery until the “New Completion Date” which is 12 months from the date of the SA; and
3. the purchasers can make a claim for LAD if vacant possession could not be delivered by the new completion date.

• Oxbridge delivered vacant possession of the purchasers’ unit well within 12 months from the date of the SA.
• However, the purchasers filed a claim in the House-buyers Tribunal (“the Tribunal”) against Oxbridge for payment of LAD based on the supposed delivery date in the SPA.
• The Tribunal decided in favour of the purchasers.
• Oxbridge sued the purchasers for, inter alia, breach of the SA in the High Court but the claim was dismissed.
• Oxbridge appealed against the High Court’s decision.

• The High Court judge had erred in his assessment of the evidence, and had failed to consider that the project was labeled a “projek sakit” by JPN as it was delayed due to the flood.
• Oxbridge made it plain that it could not continue with the project unless the LAD claims were waived in view of its financial difficulties resulting from the flood.
• The larger majority of house buyers, including the purchasers, agreed to a waiver, had their houses completed and delivered by Oxbridge within the new completion date under the SA.
• Despite agreeing to the waiver, the purchasers still proceeded to file a claim against Oxbridge and obtained an award of RM50,000 as LAD calculated from the date of the SPA.
• On the facts, the purchasers’ action constituted a clear breach of the SA.
• There was no total contracting out of the LAD provision in the SPA.
• If vacant possession had not been delivered by the new completion date, the purchasers could still sue for LAD.
• It would be in the public interest, and in the interest of the house buyers, if the law allowed a waiver of LAD on terms as specified in the SA in this instance.
• Therefore, it was not right and proper for the purchasers, despite their promise to waive the LAD under the SA, to resile from their promise and sue for late delivery under the SPA instead.