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TEE AH KOW V.
WISMA ENHUA REALTY SDN BHD
HIGH COURT [MUAR]
JEFFREY TAN, J
GUAMAN SIVIL NO. 22-49 TAHUN 1999
15 JULY 2004
DALAM MAHKAMAH TINGGI MALAYA DI MUAR
GUAMAN SIVIL NO. 22-49 TAHUN 1999
ANTARA
Tee Ah Kow
- Plaintif
DAN
Wisma Enhua Realty Sdn. Bhd.
Defendan
JUDGMENT
This is but one of 5 similar actions (others being Muar High Court
22-50-1999, Muar High Court 22-51-1999, Muar High Court 22-52-1999, and Muar
High Court 23-104-1999) by 5 different: "purchasers" (Plaintiffs) that
commenced as actions against Wisma Enhua Realty Sdn Bhd (Defendant) for (i)
an order that the Defendant do specifically perform the respective contracts
of sale entered into between the Defendant as vendor of the one part and the
Plaintiffs as "purchasers" of the other part, with respect to 8 units of
condominiums in a condominium block known as Ruby Condominium, Muar, and
developed by the Defendant, (ii) damages, and, (iii) costs.
In all 5 actions, Mr.Tan Koon .Heo appeared for the plaintiff, while Mr. G.F.
Nelson appeared for the Defendant. On the occasions when this action was
called for hearing, both learned counsel affirmed that the decision in the
instant case, namely Muar High Court 22-49-1999, should bind the other 4
actions. That came as no surprise. All 5 actions share the same background
facts. All statements of claim and all statements of defence agree that the
Defendant, by an agreement dated 30.5.1997, engaged one Fortune Sector Sdn.
Bhd. (FS) to construct and complete the said Ruby Condominium, in
consideration of the contract sum of RM9,332.498.00. Suffice it to say that
it is no longer in dispute that by agreement dated 9.2.1999, FS and the
Defendant agreed that FS shall accept 8 units of condominiums (namely units
01-05, 06-07, 04-08, 03-10, 04-11, 03-11, 04-12, and, 02-13) in lieu of the
progress payment of RM 1,161,075.60 and towards account of the final balance
sum payable on the aforesaid contract sum. It is also no longer in dispute
that FS nominated the Plaintiff who were their building material suppliers,
as purchasers of those 8 units, and that the Plaintiffs and Defendant then
entered into 8 separate agreements, all dated 19.4.1999 and in the form
prescribed in Schedule H of the 1989 Regulations made under the Housing
Developers (Control and Licensing) Act 1966, with respect to the sale and
purchase of those said 8 units. And both learned counsel affirmed that an
order for specific performance is no longer in issue, as the Defendant had
delivered all said 8 units to the Plaintiffs (4 units on 11.10.2000 and 4
units on 14.3.2001), and that the only outstanding issue is the claim for
damages for late delivery.
At the close of the entire case, that is after the testimony of 3 witnesses
(PW1, PW2, & DW1), Mr. Tan said, "Only issue is whether the 3 year delivery
period applies or whether the 3 years delivery period does not apply. The
result will follow the ruling."
Mr. Nelson confirmed that it was so and then submitted as follows. The
Plaintiffs could not pick a particular clause, but must accept the agreement
as they find it. Clause 22 of the sale and purchase agreement is the
specific provision, and expressio unius exclusio alterius there is no room
for any other provision. There is no ambiguity in clause 22. If it were
intended that clause 22 should be inoperative, then it should have been
expressly stated.
Mr. Tan submitted that the consideration for the said 8 units was settled by
a set-off between FS and the Defendant, and that the court should consider
clause 23 of the contracts of sale. It was agreed that the units should be
delivered upon full payment. On 26.8.1999, the Defendant applied for
Certificates of Fitness for Occupation in respect of those said 8 units.
Clause 23 provided that occupation the Plaintiffs should not occupy the said
units without Certificates of Fitness for Occupation. But even without
Certificates of Fitness for Occupation, the Defendant must let the
Plaintiffs into occupation.
Mr. Nelson replied that clauses 22 and 23 had different purposes, and that
clause 22 prevails over clause 23.
The pertinent clauses 22 and 23 in all 5 sale and purchase agreements dated
9.9.1999 read as follows:
Clause 22 - Time for handing over of vacant possession
(1) Vacant possession of the said Parcel to which water and electricity
supply are ready for connection shall be handed over to the Purchaser within
thirty-six (36) calendar months from the date of this Agreement.
(2) If the Vendor fails to hand over vacant possession of the said Parcel to
which water and electricity are ready for connection to the said Parcel, in
time, the Vendor shall pay immediately to the Purchaser liquidated damages
to be calculated from day to day at the rate of ten per centum (10%) per
annum of the purchase price.
Clause 23 - Manner of delivery of vacant possession
(1) Upon the issuance of a Certificate by the Vendor's Architect certifying
that the construction of the said parcel has been duly completed and water
and electricity supply are ready for connection to the said parcel and the
Vendor has applied for the issuance of the Certificate of Fitness for
Occupation from the Appropriate Authority and the Purchaser having paid all
monies payable under clause 4(1) in accordance with the Third Schedule and
all other monies due under this Agreement and the Purchaser having performed
and observed all the terms and covenants on his part under this agreement
the Vendor shall let the Purchaser in possession of the said parcel.
PROVIDED THAT such possession shall not give the Purchaser the right to
occupy and the Purchaser shall not occupy the said Parcel until such time as
the Certificate of Fitness for Occupation for the said Building is issued.
(2)Upon the expiry of fourteen (14) days from the date of a notice from the
Vendor requesting the Purchaser to take possession of the said Parcel,
whether or not the Purchaser has actually entered into possession or
occupation of the said Parcel, the Purchaser shall be deemed to have taken
delivery of vacant possession.
In a typical case, a contract of sale in the form prescribed in Schedule H
of the Housing Developers (Control and Licensing) Regulations 1989 (all
present contracts of sate were in such prescribed form), of a subdivided
building should work like this. Save where the building has been completed,
a developer sells while a purchaser buys a specified piece of land together
with a building that has been approved for construction and or is about or
is in the process of being constructed, with a covenant by the developer to
deliver the completed building to the purchaser within 36 months from the
date of the agreement. The agreed price, whatever it may be, is paid first
by a deposit, and then by specified instalments payable upon the completion
of specified stages of building works. The Third Schedule to the Act
specifies both the instalments (being preset percentages of the total
purchase price), and the stages of building works. In other words, in a
contract of sale in form prescribed in Schedule H, the instalments relate
directly to the progress of building works. It follows that a purchaser who
enters into a contract of sale in form prescribed in Schedule H, with
respect of a building already at an advance stage of construction, would
have to fork out not just the deposit but also all instalments payable till
the stage of completion of building works. Conversely, a developer could not
demand payment of the instalments without the attendant stage of building
works. It should be such that land and completed building would be handed
over to the purchaser by the time that the final instalment of 5% of the
purchase price would be tendered by the purchaser to the developer's
solicitors.
But the facts here are not that typical. Construction of all 8 units was
completed by 26.8.1999, as the Defendant had applied for Certificates of
Fitness for Occupation in respect of those said 8 units on 26.8.1999, which
the Defendant could not reasonably have done so if the 8 units were not
ready for occupation. And since construction of those 8 units had been
completed, any other purchaser of any one of those 8 units would have to
straight away fork out the entire purchase price. But would that
hypothetical purchaser have to wait 36 months for the delivery of the
completed unit, albeit that he had paid the full purchase? In another
situation, such as in the case of a contract of sale between a non-developer
vendor and purchaser, and unless otherwise provided, it is norm that a
vendor would deliver both possession and good title upon tender of the full
purchase price. But in the case of a contract of sale between a developer
and purchaser, the contract of sale "shall be in the form prescribed in
Schedule H" (see Regulation 11(1) of the 1989 Regulations), which would mean
that that hypothetical purchaser would yet have to enter into a contract of
sale with the Defendant in the form prescribed in Schedule H, a contract
with a clause 22 provision albeit that construction had been completed and
the purchaser had paid for it in full. So could that hypothetical purchaser
be denied possession of the said unit, on account of the existence of a
clause 22 provision providing for vacant possession to be delivered within
36 months from the date of the agreement? It would not seem so that that
hypothetical purchaser who had paid the full purchase price could be denied
immediate possession, albeit the existence of a clause 22 provision. In the
first place, full payment could not be collected without the handing over of
vacant possession (see Regulation 11(2) read together with the Third
Schedule). And in the next place, there would be a clause 23 provision
providing that where the developer had applied for a Certificate of Fitness
for Occupation and the purchaser had paid all monies payable in accordance
with the Third Schedule that "the developer shall let the purchaser into
possession". And in the instant case, each Plaintiff stood in the shoes of
that hypothetical purchaser. Each Plaintiff had paid the full purchase
price. In each case, the Defendant had received the full purchase price.
That payment was by way of a set-off of accounts is entirely immaterial. The
plain fact of the matter is that value had been given and received in full.
According to the Third Schedule, vacant possession should be delivered by
the Defendant upon receipt of the full purchase price.
Perhaps it may not be entirely right to hold the Defendant strictly to the
provisions of the Third Schedule, in view of the fact that receipt of the
full purchase price was by way of a set-off of accounts between the
Defendant and FS, and between FS and the Plaintiffs. Even still, there was
clause 23 that provided that the Defendant should let the plaintiffs into
possession. It is an agreed fact the Defendant applied for Certificates of
Fitness for Occupation in respect of those said 8 units on 26.8.1999. It is
also an agreed fact that the contracts of sale were executed on 19.4.1999.
It pans out that the Plaintiffs had paid all monies due under the contracts
of sale when the Defendant applied for Certificates of Fitness for
Occupation in respect of those said 8 units. According to clause 23, the
Defendant should let the Plaintiffs into possession on 26.8.1999, and not on
11.10.2000 in respect of 4 units, and not on 14.3.2001 in respect of the
balance 4 units.
It was contended that clause 22 is the specific provision and there is no
room for clause 23. With respect, effect must be given to all provisions and
Schedules (see City Investment Sdn Bhd v. Koperasi Serbaquna Cuepacs
Tanggungan Bhd [1985] 1 MLJ 285. Clause 22 should not be read in isolation.
To arrive at the true interpretation of a document, a clause must not be
read in isolation, but must be considered in the context of the whole of the
document ("Chamber Colliery Co. Ltd v. Twyerould [1915] 1 Ch 268). As a
corollary of the principle that a document must be construed as a whole, alt
parts of it must be given effect where possible (Re Strand Music Hall Co Ltd
[1893] 35 Beav 153) and no part should be treated as inoperative or surplus
(SA Maritime et Commerciale of Geneva v. Anglo-Iranian Oil Co Ltd [1954] 1
WLR 492) unless it is impossible to reconcile it with another and more
express clause in the same deed (Re Strand Music Hall Co Ltd). And in the
case of the instant contracts of sale, both clauses 22 and 23 could be
easily reconciled. While clause 22 gave 36 months to the Defendant to
complete the building works, clause 23 provided that in the event the
Defendant had applied for Certificates of Fitness for Occupation and the
Plaintiffs had paid all monies due under the contract of sale (DW1, the
Chairman of the Defendant, in his testimony agreed, "plaintif tidak perlu
bayar sebab defendan hutang pada FS"), the Defendant shall let the
Plaintiffs into possession. But clause 22 had been overtaken by events.
Certificates of Fitness for Occupation had been applied for and all monies
due had been paid. And clause 23 came into play on 26.8.1999.
The purpose of clause 22 and the like should be recognised for what it is.
The 36 months allowed for delivery of vacant possession is solely on account
of what is reckoned is reasonable time needed by a developer to construct
and complete the building approved for construction, the underlying
rationale being that without time for construction then there would only be
contracts of sale of land and completed building. But when it comes to it,
where conditions in clause 23 and the like have been met, the developer
shall let the purchaser into possession, albeit that the said 36 months have
yet to come to an end.
For the above reasons, it is ordered that the Defendant do pay to the
Plaintiffs (i) liquidated damages calculated from 26.9.1999 (1 month is
given to the Defendant to comply with clause 23) to 11.10.2000 (with respect
to 4 units), or to 14.3.2001 (with respect to the balance 4 units), all at
the rate of 10% per annum of the purchase price (RM127,681.20, RM178,369.20,
RM167,119.20, RM136,681.20, RM141,181.20, RM136,681.20, RM141,181.20 or
RM132,181.20/ as applicable), (ii) interest on the respective judgment sums
at the rate of 8% per annum from 26.9.1999 to date of satisfaction, and,
(iii) costs.
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