Contract – Whether SPA only obliged developer to deliver vacant possession and not to give ‘right of occupation’ to buyer within 24 months.

BODCO Engineering and Construction Sdn Bhd v Christopher ak Matthew Mattius & Anor and other applications [2016] 7 MLJ 275

• The 1st respondent (“Christopher”) entered into a sale and purchase agreement (“SPA”) with the applicant (“BODCO”) to buy a building constructed by BODCO.
• Under cl 17(1) of the SPA, BODCO contracted to deliver vacant possession of the property to Christopher within 24 months of the date of the SPA.
• BODCO agreed to pay Christopher pre-estimated liquidated damages (“LAD”) computed until the date of completion of the building in case of failure to duly deliver vacant possession.
• Clause 19(1) of the SPA stipulated that the construction of the building shall be deemed complete when it is certified by BODCO’s architects.
• Going by the 24-month time-frame stipulated in cl 17(1) of the SPA, vacant possession of the building should have been delivered to Christopher on 17 September 2008.
• The building was, however, only completed on 20 April 2010 as certified by BODCO’s architect.
• In late April 2010, BODCO issued a notice to Christopher to take vacant possession and he was deemed to have done so on 5 May 2010.
• The certificate of fitness for occupation was only issued by the local authority on 19 October 2012.
• Christopher subsequently filed a claim with the Tribunal for Housing Purchaser Claims (“the Tribunal”) claiming LAD for late delivery of vacant possession.
• Christopher’s claim for the LAD was calculated from the completion date under the SPA until the date vacant possession was delivered to him.
• The Tribunal, however, granted Christopher LAD calculated from the completion date until the date the certificate of fitness for occupation was issued by the local authority.
• BODCO filed the instant application for judicial review to quash the Tribunal’s decision.
• BODCO sought a declaration that the LAD should only have been computed from the expiry of the completion date under the SPA until the date of delivery of vacant possession and not until the date of issuance of the occupation permit by the local authority.

• The completion date of the building was the date of the certificate of practical completion (“CPC”) and not the date of the occupation permit.
• The only contractual document that clearly certified the completion of the building was none other than the CPC.
• Clause 19(1) of the SPA clearly stated that the event of the ‘completion’ of the building was the issuance of the architect’s CPC certifying that the building had been duly completed.
• Therefore, the definition of ‘completion’ must be drawn from cl 19(1) and the only person qualified to certify the completion of the building was the architect and not the local authority.
• The SPA had stipulated that BODCO was to pay Christopher LAD for late delivery of vacant possession only from the ‘initial completion date under the contract’ until the ‘date of completion’.
• The obligation of BODCO never extended to giving the ‘right of occupation’ within 24 months (as distinct from the ‘right of possession’).
• The ‘right of occupation’ is basically the issuance of the occupation permit whilst the delivery of vacant possession gave the ‘right of possession’.
• The Tribunal went on a frolic of its own by deciding on a ground not pleaded by Christopher by holding that the damages had to be computed until the date of issuance of the occupation permit.
• The Tribunal had thus committed an error of law.