ANG KEE SIM v. KEMBANG JAYA DEVELOPMENT
HIGH COURT MALAYA, PENANG
RK NATHAN J
[CIVIL SUIT NO: 22-457-2000 (MT 4)]
27 JUNE 2001
Specific performance - Sale and purchase
agreement - Whether effective and applicable - Section 75 of the Contracts
Act 1950 - Whether applicable - Application for extension of time - Whether
made in time - Whether plaintiff entitled to specific performance - Section
11(3) of the Housing Developers (Control and Licensing) Regulations 1989
Contract: Building contract
- Delay in completion - Vendor unable to fulfil contract by completion date
- Deduction of liquidated damages for delay - Whether allowed - Whether plaintiff
entitled to specific performance
This case deals
with the plaintiff's application for an order of specific performance, together
with other consequential reliefs of a sale and purchase agreement (the ' agreement')
for some property; between the plaintiff as purchaser, and the defendant as
had apparently failed to complete the contract within the completion period
and deliver vacant possession in respect of the property within 24 calendar
months as stipulated in cl. 20(1) of the agreement. It was only after a delay
of 813 days from the date of delivery that the defendant was ready to hand
over vacant possession of the property and subsequently thereto; requested
the plaintiff to settle all overdue final balance payments. The plaintiff,
however, duly set off from the final balance payment a certain sum due to
himself from the defendant as liquidated damages due for the delay of 813
days. The plaintiff then demanded from the defendant the balance sum after
the set off from the final balance payment; which the defendant refused. Hence,
The sole argument
forwarded by the defendant was that the plaintiff must honour the agreement
by making the full balance payment first. This is because the defendant had
applied (the 'application') to the Ministry of Housing for an extension of
 By a separate
letter to the plaintiff, the defendant had admitted that the plaintiff was
entitled to the claim for liquidated damages as stated in cl. 20 of the agreement.
Since there was no argument as to the propriety or otherwise of the said clause
and the applicability of s. 75 of the Contracts Act 1950, hence, it is conceded
that cl. 20 is effective and applicable.
The defendant's sole argument was doomed from inception
The proviso of sub-s. (3) to s. 11 of the Housing Developers (Control and
Licensing) Regulations 1989 states clearly that such an application for extension
of time will not be approved unless it is made before the expiry of the 24
months, as stipulated in the agreement. Here, the application was made at
least three years and two months after the stipulated completion date n the
agreement. Hence, the defendant is caught by the proviso. Since the application
was made out of time, there is no room for the court to exercise any discretion.
Clearly, the plaintiff is entitled to the damages.
Contracts Act 1950, s. 75
Housing Developers (Control and Licensing) Regulations 1989,
Rules of the High Court 1980, O. 81
For the plaintiff - TK Lau; M/s Goh Eng Kee & Co
For the respondent - John Khoo; M/s Ismail Khoo & Assoc
Reported by Raja Vishnu Sivarajah
RK NATHAN J:
This is the plaintiff's application under O.81 of the Rules
of the High Court 1980 (the RHC) for an order for specific performance of
a sale and purchase agreement dated 17 May 1996 entered into between the plaintiff
as the purchaser and the defendant as the vendor (the agreement). There were
other consequential prayers sought.
The defendant is a developer licensed under the Housing Developers
(Control and Licensing) Act 1966. The said agreement was in respect of Plot
No. 77 (Lot No. 10384) H.S (M) 1259 of approximately 753 square feet together
with a 2-storey terrace house to be erected thereon (the said property). The
total purchase price was RM145, 000. The purchaser then charged the said property
to Perwira Affin Bank (the chargee) and obtained a housing loan of RM130,000.
Clause 20(1) of the said agreement dealt with the completion period in respect
of the said property. It reads as follows:
20. Time for delivery of vacant possession
(1) The said Building shall be completed by the Vendor and
vacant possession, with the connection of water and electricity supply
to the said Building, shall be handed over to the
Purchaser within twenty-four (24) calendar months from the date of this
(2) If the Vendor fails to hand over vacant possession of
the said Buildings, together with the connection of water and electricity
supply to the said Building, 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 7 stipulates that time was of the essence of the contract.
The defendant failed to complete the contract and deliver vacant possession
within the stipulated 24 calendar months, that is, by 16 May 1998. However
by a letter dated 25 July 2000 the defendant informed the plaintiff that as
of that date he was ready to hand over vacant possession of the said property
to the plaintiff. In the said letter the defendant also requested the plaintiff
to settle all overdue balances. The actual date of handing over of vacant
possession was 8 August 2000. There is no dispute between the parties that
the delay of delivery was 813 days. The plaintiff calculated the liquidated
damages due for the 813 days as amounting to RM32,297.26. It is also not in
dispute that there was due to the defendant a final progress payment of RM29,000.
By a notice of demand dated 10 August 2000 the plaintiff set
off from the sum of RM32,297.26 due to him from the defendant, the final progress
payment of RM29,000 due from him to the defendant and demanded the balance
of RM3,297.26. The defendant refused and hence the suit.
Findings Of The Court
By a separate letter dated 25 July 2000 the defendant admitted
that the plaintiff was entitled to the claim for liquidated damages as stated
in cl. 20 of the said agreement. Since no submission was even made as to the
propriety or otherwise of such a clause and the applicability of s. 75 of
the Contracts Act 1950, I shall proceed on the basis that the defendant has
conceded that cl. 20 is effective and is applicable. The only argument raised
by Mr. John Khoo for the defendant was that before the defendant could seek
a prayer for specific performance and the consequential orders, the plaintiff
himself must honour the agreement by making full payment first. This is because
the developer had applied to the Ministry of Housing for an extension of time.
Counsel referred me to a letter from the defendant to the controller, Ministry
of Housing and Local Government dated 22 July 2000 seeking an extension of
time to complete the payment. It is therefore important to look at the regulation
that allows the developer to make such an application to the controller for
extension of time. The relevant regulation is 11(3) of the Housing Developers
(Control and Licensing) Regulations 1989. It reads as follows:
11. Contract of Sale
(3) Where the Controller is satisfied that owing to special
circumstances or hardship or necessity compliance with any of the
provisions in the contract of sale is impracticable or necessary,
he may, by a certificate in writing, waive or modify such provisions:
Provided that no such waiver or modification shall be approved
if such application is made after the expiry of the time stipulated for
the handing over of vacant possession under the contract of sale or after
the validity of any extension of time, if any, granted by the Controller.
Mr. Khoo's argument was doomed from inception. The proviso
to sub-s. (3) states clearly that such an application for extension of time
will not be approved unless it is made before the expiry of the 24 months
stipulated in the agreement. Here the defendant made this application for
extension of time on 22 July 2000 stating various reasons. Yet three days
later, by the proverbial wave of the magic wand, the defendant was able to
put right the long list of complaints enumerated in its letter dated 22 July
2000 being the reasons why it was seeking the extension of time. Obviously
that application was made as an after-thought to prop up its case to defeat
this legitimate claim of the plaintiff. In any case, the defendant is caught
by the proviso. As the application was made at least three years and two months
after the completion date, the application was a non-starter. No wonder even
the controller had not replied to the defendant's letter. In any case since
the application was made out of time there is no room even for the court to
exercise any discretion. I do not, even at this point, have to consider that
there is no certificate in writing from the controller giving the defendant
the extension of time sought. Clearly the plaintiff is entitled to the damages.
I therefore gave the following orders:
1) A declaration that the defendant is indebted to the plaintiff
in the sum of RM32,297.26 being damages arrived between 17 May 1996 to 8 August
2) that the plaintiff is entitled to set off from the sum of
RM32,297.26 the sum of RM29,000 due and owing from the plaintiff to
the defendant as final progress report.
3) that the defendant do pay the plaintiff the sum of RM3,297.26.
4) that the defendant do hand over to the plaintiff all the
keys to the vacant property unconditionally within seven days of this order.
5) that the defendant do pay interest on the sum of RM3,297.26
at 4% p.a. from 25 August 2000 to date of judgement.
6) no damages awarded.