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TANG KAM THAI & 133 ORS V. LANGKAH CERGAS SDN BHD & 4 ORS

HIGH COURT [KUALA LUMPUR]

JAMES FOONG , J

GUAMAN SIVIL NO. S1-22-1351-2002

29 APRIL 2005

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR (BAHAGIAN SIVIL)

GUAMAN SIVIL NO. S1-22-1351-2002

ANTARA

1. TANG KAM THAI

2. YONG GEOK JIN

3. YAP WAI CHOY

4. PHANG SEW PIN

5. CHOO SIEW MOOI (F)

6. LEE BUN KUI

7. KOH BENG HOCK

8. LIM PENG YIN

9. LIEW THAM SIONG

10. CHOO SIEW MOOI

11. CHAN WAI KHUEN

12. WONG CHOY YOKE

13. MUN SENG CHOW @ MUN SENG TUCK

14. WONG LIEW YIN (F)

15. WONG LIEW PIN (F)

16. TAN HWA AIK

17. TAN HWA ANN

18. LEE FOONG YEE(F)

19. LAU KENG PENG

20. TAN BEE CHAI

21. LAU KIN KOK @ LOW KIN KOK

22. TAM CHING KAM @ THAM CHING KAM

23. LAU KIN KOK @ LOW KIN KOK

24. TAM CHING KAM @ THAM CHING KAM

25. LAU KIM LOONG

26. CHONG CHEE MUN (F)

27. PANG YOON CHING

28. LOH KEE LIM

29. LOH CHOW POH (F)

30. WONG KONG CHIT @ WONG KONG KEN

31. CHEN SIEW HEONG (F)

32. LAI CHIEW FOONG (F)

33. LEE YOKE MOI (F)

34. PANG YUEN TAI

35. SAM NGAU

36. TAN MUN KIOW

37. SEOW CHEE WAH

38. FOONG AH SOO

39. CHAN KIM LONG

40. LIM YANG CHIN

41. CHAN KIN SIONG

42. PANG YUEN FONG (F)

43. PANG CHEE KEONG

44. WONG YOKE CHON

45. LEE OW YIT @ LEE YING THYE

46. KUAI GIM CHANG

47. CHONG TIAM CHOI

48. KOK Ol LEAN (F)

49. CHAN HONG YAM

50. LIEW YOKE CHIN

51. GAN WEI FONG (F)

52. LEE YOON MOI (F)

53. SOONG KHENG FATT

54. CHIN KOK WENG

55. CHIN HOI THONG

56. CHIN PICK KWEE

57. CHAN HOONG SANG

58. LAI WENG LAN

59. CHAN HONG WENG

60. CHAN KOK SOON

61. CHAN CHOW YONG

62. YIP CHOW FOONG

63. ONG SOW POH (F)

64. ONG CHEE GAN

65. ONG CHI LAI

66. YUE MUN WAI

67. CHAN POOH Ol

68. PANG HOW ING

69. CHAN POOI LI

70. LEE KWAI LIAN

71. LEE KUI CHIN

72. FOONG LAI FOON (F)

73. WONG CHIN WAH

74. LEE FOK HING

75. LEE CHEONG YIN @ LEE THONG YIN

76. LEE YIH SOON

77. LAM FAR SOON

78. LOW KIM

79. CHENG AH KOW

80. CHING SOO HIANG

81. CHANG CHOON KEONG

82. CHONG KWEE LIM

83. LEE PIN

84. LEE CHEE KEONG

85. TANG YENG KIM

86. NEOH SING KHAI

87. KHOO CHUN SENG

88. LIM GEOK HUAY

89. FONG WAI CHIN @ FOONG KUNI FUN

90. CHIA CHEE SING

91. CHAN YEOK HONG @ CHIN NYET FOONG

92. KOK HUAT THAN @ QUEK HOCK THIAN

93. QUEK KIAN CHZEN

94. MUN LAI MOH

95. YUEN WAI LING

96. WONG MUI LIN (F)

97. LAI CHEE HOONG

98. SIA FANG FANG

99. SIA HUI SIONG

100. CHANG KIM FOONG (F)

101. YAP KIM HEE

102. FONG POOY LEE (F)

103. FONG POOY YEE

104. FONG POOY POOY (F)

105. LUM CHING SIM

106. NG TOONG LOY

107. MEH YOKE LAN (F)

108. NG CHEE BENG

109. NG WAI KUAN (F)

110. CHIN FOOK MING

111. CHIN PIK CHOOI (F)

112. LEE CHEONG SANG

113. KWA KONG BENG

114. LIM LAN BEK(F)

115. KWA BOON CHYE

116. LIEW AH MOOI

117. LIEW AH MOOI

118. LEE SENG FONG

119. WOO Ol FOONG

120. YONG SAU YOONG

121. TAN TAY HU

122. CHEN KWEE FONG (F)

123. CHAN POOI SAN

124. LEE NYOK LAN

125. CHIN CHING PIN

126. CHEN KWEE FOONG

127. CHAN KIN CHOY

128. CHAN HON LOONG

129. SOO GAIK IMM

130. CHU SU MIN @ CHOO SU MIN

131. CHOO CHEE WOON

132. WONG YEN TAI

133. LEE SEAT FAH

134. CHONG YOON CHEUN

DAN

1. LANGKAH CERGAS SDN BHD

2. FOCUS ARCHITECT & URBAN PLANNER (Disaman sebagai sebuah firm)

3. PUBLIC BANK BERHAD

4. YEONG MUN KIEN

5. CHENG YIN HEONG

GROUNDS OF JUDGMENT

Introduction

Enclosure 13 is an application of the plaintiffs under Order 22A rule 3 (1) (a) and (e) of the Rules of High Court to order the 1st defendant to pay an interim payment of RM2,003,425.00 to the plaintiffs.

Plaintiffs' claim

The 1st defendant is a property developer.

Save and except the 9th. 10th. 16th, 17th, 18th, 19th, 20th, 21st, 22nd, 23rd, 24th, 119th and 120th plaintiffs, all the other plaintiffs are purchasers of residential properties in a project developed by the 1st defendant. For ease of reference I shall be referring them as 'Residential Properties Purchasers'.

The 9th, 10th, 16th, 17th, 18th, 19th, 20th, 21st, 22nd, 23rd, 24th, 119th, and 120th plaintiffs are purchasers of commercial properties that are also developed by the 1st defendant. For these plaintiffs, I shall hereinafter be referring them as 'Commercial Properties Purchasers'.

The purchases by the plaintiffs are all evidenced by written sale and purchase agreements entered into between the plaintiffs and the 1st defendant.

Under the terms and conditions in the sale and purchase agreements the 1st defendant is to deliver vacant possession of the properties so purchased by the plaintiffs within a certain specified period leading to the issuance of certificate of fitness (CF) to occupy the said properties, which till date has not been issued by the authorities. The plaintiffs in this suit claim that the 1st defendant has breached this term and they are now demanding from the 1st defendant liquidated damages.

In respect of the sale and purchase agreements involving the Residential Properties Purchasers Clause 22 requires the 1st defendant to complete the residential properties and deliver vacant possession of the same, with water and electricity supply within 36 calendar months from date of the agreements. Then clause 23 specifies that delivery of vacant possession means: upon issuance of the 1st defendant's architect certificate certifying that the said property has been duly completed; water and electricity have been connected thereto and; the 1st defendant has applied for CF from the appropriate authorities; provided always that the Residential Properties Purchasers have paid all monies due under the purchase price. And in the event that the 1st defendant fails to deliver vacant possession within the time as stated then the Residential Properties Purchasers are entitled to be paid 10% per annum of the purchase price for each day of delay as agreed liquidated damages.

In addition to the above, clause 24 of the agreements demands the 1st defendant to complete the common facilities of the residential properties within 36 months from date of the agreements. In the event of default, the 1st defendant shall pay on a day-to-day basis 10% per annum of the last 20% of the purchase price.

For the Commercial Properties Purchasers, clause 11.1 of their agreements with the 1st defendant states that the 1st defendant shall practically complete the said commercial properties within 36 months from date of agreements provided "the architect's certificate certifying the same shall be conclusive evidence of practical completion of the Premises." Then if the 1st defendant "willfully delay practical completion of the Premises beyond the aforesaid period the Vendor shall pay to the Purchaser agreed liquidated damages calculated from day to day at the rate of eight percent (8%) per annum" from the date of expiry of the 36 months to date of issuance of the certificate of practical completion by the 1st defendant's architect.

For particulars of liquidated damages, the plaintiffs have set out in detail various tables to show the period of delay and the amount due. For the Residential Properties Purchasers there are two tables: one is for liquidated damages for late delivery of the residential properties and the other is for liquidated damages for failure to complete the common facilities. Calculation on the amount stated in the particulars is up to 20.11.2002.

It is on these amounts stated in the particulars that the plaintiffs are now claiming . interim payment from the 1st defendant.

Defence

The 1st defendant has raised various defences in its affidavit in reply. I shall deal with them in the course of my deliberation.

The Law

The law on interim payment is well set out in Order 22A RHC and elaborated in the judgment of Faiza Tamby Chik J. in Mediahouse Sdn Bhd v Koh Kim Suan (1998) 3 AMR 2338. To succeed in this application the Court must be satisfied that:

(a) the 1st defendant has admitted liability for the plaintiffs' damages;

(b) or that if the action proceeded to trial the plaintiff would obtain judgment for substantial damages against this defendant.

On the burden of proof, it is accepted that "something more than a prima facie case is clearly required, but not proved beyond reasonable doubt" (Shearson Lehman Bros Inc v Maclaine Watson & Co Ltd (1987) 2 All ER 181 @ 187).

Analysis

1. The plaintiffs claim that the 1st defendant in its Defence has admitted to delay in handing over vacant possession of the properties to the plaintiffs. I agree with them after perusing the Defence of the 1st defendant. Admission is found in paragraphs 13, 14 and 15 of the Defence where the defendant explained that this was an abandoned project and, in paragraph 16 the 1st defendant expressly states that the delay in reviving the project has taken 24 months. Then in paragraph 17, the 1st defendant accused the Residential Properties Purchasers of having bought these properties at a low price when the cost of construction is much higher. Further admission is found in paragraph 42 of the Defence.

Though admitting to such delay, the 1st defendant blamed it on circumstances beyond its control inter alia] the management of the 1st defendant was under different people prior to their taking over; economic slow down; and changes made by the planning authorities; and that written requests for extension of time for delivery of vacant possession has been made to the Housing Ministry. But all these, in my opinion, do not exempt the 1st defendant from fulfilling its obligation to pay the Residential Properties Purchasers the agreed liquidated damages as set out in the Residential Properties Purchasers' agreements. The terms therein are explicit. When there is a delay in delivering vacant possession then liquidated damages have to be paid by the 1st defendant calculated after 36 months from date of agreements to the time when vacant possession is delivered.

On the excuse that the 1st defendant has written to the Housing Ministry for extension of time to deliver vacant possession I cannot accept this as an excuse since exemption is only effective when approval is granted; not upon application. Until the said Ministry gives such extension, the time for completion remains as stated in the agreements.

On the excuse that the planning authorities have imposed new demands on the 1st defendant to comply before CF could be entertained, I find this is a matter for the 1st defendant, as a developer of the said properties, to deal with. This responsibility cannot be passed onto the purchasers as an excuse for the payment of liquidated damages.

Towards the Residential Properties Purchaser's claim for delay in delivering vacant possession of the common facilities the 1st defendant asserts that this was completed on time. Various documents showing payments to contractor for jobs conducted in this area as well asarchitect's certification for such works were tendered to support this contention. Having perused these, I am of the view that the 1st defendant has not proved to the satisfaction of this Court more than a prima facie case on this claim against the plaintiff, at this stage of the proceedings. Thus they are not justified in receiving any interim payment from the 1st defendant for this item claimed.

2. As for the commercial properties purchasers the principal defence of the 1st defendant is the absence of proof that the 1st defendant has willfully delayed the completion of the said property. But based on the same reasons offered by the 1st defendant for the delay in delivering vacant possession to the Residential Properties Purchasers, I find the 1st defendant's excuses without legal justification. In fact, poor management by the previous directors of the 1st defendant is itself a factor for willful delay. The Commercial Properties Purchasers expected the 1st defendant to manage its affairs properly and professionally so that projects undertaken by them should be completed on time in accordance with the terms of the agreements. Failure to do so is, in itself, proof of willful delay. Same goes for the excuse of economic slow down affecting the completion of the properties. With adequate and proper planning and forecast, coupled with appropriate and actions and remedies, the1st defendant ought to have anticipated this and taken appropriate steps to overcome this problem.

Failure to overcome this is, in my view, another factor constituting willful delay.

3. The 1st defendant has raised the issue on the identity, legal status and eligibility of a number of plaintiffs to bring this action. But in paragraph 1 of the Defence, the 1st defendant has admitted that the plaintiffs so named in this action are purchasers of the properties as set out in the Statement of Claim. With such admission, the 1st defendant cannot challenge the status of these plaintiffs.

4. The 1st defendant has raised an objection on the validity of the affidavit affirmed by the 1st plaintiff for and on behalf of all the other plaintiffs claiming that she has no personal knowledge of facts asserted therein. This claim, I find lacks merits. The first plaintiff has stated that she is speaking for and on behalf of all other plaintiffs and is authorised by them to do so. Then she proceeded to state categorically that her disposition is based on facts within the best of her personal knowledge and from documents she has access to. This, I find is sufficient to entitle her to make the averments in her affidavits.

5. The 1st defendant has claimed that if interim payment is made against them, they do not have the means to satisfy such payment and under Order 22A rule 3(2) (c) RHC, the Court must take this factor into consideration. I find that this provision under Order 22A rule 3 (2) (c) RHC only applies to "personal injuries" claims. It has no application here.

Conclusion

The amount of liquidated damages claimed by the plaintiffs for interim payment is calculated up to 20.11.2002. This amount is less than the total sum claimed by the plaintiffs in the Statement of Claim. Except for the amount that I refused to allow for delay in delivery vacant possession of the common facilities and those plaintiffs that have filed notices of discontinuance, I allow this plaintiffs' claim in enclosure 13 with cost in the cause. The amount of interim payment to be paid by the 1st defendant to the plaintiffs respectively in the proportion as disclosed in the particulars for delay in delivery of vacant possession of the properties is RM1,652.375.00.

Dated: 29.4.2005

(DATO' JAMES FOONG) Hakim Mahkamah Tinggi, Kuala Lumpur.

Peguam-Peguam:

Cik Harwinder Kaur bagi pihak Plaintif-Plaintif. Tetuan A.J. Ariffin, Yeo & Harpal, Kuala Lumpur.

Cik S.P. Chanravathane bagi pihak Defendan Pertama, Keempat dan Kelima.

Tetuan Manjeet Kaur & Associates,

Puchong,

Selangor Darul Ehsan.

 

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