XAVIER KANG YOON MOOK V. INSUN DEVELOPMENT SDN. BHD.

CONTRACT: Sale of house - Time essence of the agreement - Breach - Options available to the innocent party - What damages plaintiff is entitled to.

By a sale and purchase agreement dated 19 August 1986, the plaintiff agreed to purchase from the defendant (a licensed housing developer) a piece of land together with a single storey low cost house (said house). The plaintiff paid 10% of the purchase price and the balance was payable on instalment basis as envisaged in the said agreement. By clause 18(i) of the said agreement, the defendant agreed to complete the said house and deliver vacant possession to the plaintiff within 24 calendar months from the date of the said agreement. Further, by clause (18) (2) the defendant agreed to pay liquidated damages at the rate of 10% per annum of the purchase price to be calculated on a day to day basis in the event the defendant failed to deliver vacant possession of said house within the time stipulated. In total disregard and in breach of the said agreement, the defendant failed to complete and deliver vacant possession of the said house to the plaintiff and this state of affairs prevailed until the originating summons was filed. Pursuant to clause 7 of the agreement time was the essence of the contract. The plaintiff terminated the agreement and claimed inter alia liquidated damages.

Held:

[1] As time was provided to be of the essence of the sale & purchase agreement, the stipulated time period within which the said house had to be delivered to the plaintiff became an essential condition of the sale & purchase agreement. The failure of the defendant to fulfill this condition would entitle the plaintiff to have an option of treating the sale & purchase agreement either (a) as having been repudiated and sue for damages, or (b) as still continuing. The plaintiff rightly exercised his option to proceed under (a).

[2] The language employed in clause 18(2) of the sale & purchase agreement is clear and unambiguous and its natural meaning relate to the right of the purchaser plaintiff to rescind and sue immediately for liquidated damages if the recalcitrant developer failed to deliver the said house within 24 months form the date of the sale & purchase agreement. In construing clause 18(2) of the sale & purchase agreement, one must examine the language employed therein and one must not be influenced by other unnecessary conditions.

[Plaintiffs' claim allowed].

Cases referred to:

Linggi Plantations Ltd. v. Jagatheesan [1971] 1 LNS 66

Eng Mee Yong & Ors. v. Letchumanan [1979] 1 LNS 18

Lombard North Central plc v. Butterworth [1987] QB 527 at p. 535; [1987] 1 ALL ER 267 at pp. 271 to 272; [1987] 2 WLR 7 at p. 13 (foll)

Chye Fook & Anor. v. Teh Teng Seng Realty Sdn. Bhd. [1989] 1 MLJ 308 (foll)

Tan Yang Long & Anor. V. Newacres Sdn. Bhd [1992] 3 CLJ 666 (Rep)

Loh Wai Lian v. S.E.A. Housing Corporation Sdn. Bhd. [1987] 2 MLJ l (refd)

Azali bin Bakar v. Insun Development Sdn. Bhd. [1994] 3 AMR 51 (cit)

Malaysia National Insurance Sdn. Bhd. v. Abdul Aziz bin Mohamed Daud [1978] 1 LNS 117

Choo Yin Loo v. Visuvalingam Pillay [1930] 7 FMSLR 135 (cit)

Bank of England v. Vagliano Brothers [1891] AC 107 (foll)

Legislation referred to:

Contracts Act, 1950 (Act 136) , ss. 56, 56(1) , 65 & 76

Housing Developers (Control and Licensing) Act, 1966 (Revised 1973) (Act 118) s. 24

Housing Developers (Control and Licensing) Regulations, 1970, cl. 17

Housing Developers (Control and Licensing) Regulations, 1982cl. 18(2)

Limitation Act, 1953, s. 6(1)(a)

Rules of the High Court 1980, O. 28 r. 4

Others referred to:

Halsbury's Laws of England, 4th Edn., Vol. 9, p. 370

For the plaintiff - Adi Radlan bin Abdul Rahman; M/s. Mak, Ng, Shao & Kee

For the defendant - S. Thomas; M/s. Rashid & Lee

[Plaintiffs' claim allowed].