JCW

(Vacant possession of bungalow lots- whether basic infrastructural works had been completed) Justin & Christina were the counsel for the defendant The plaintiffs were purchasers of bungalow lots from the defendant and filed a claim on the basis amongst others that the defendant did not complete the infrastructural works and that vacant possession were not property given and for damages. The issues involve the issue of the extent of the Developer's duty to construct Basic Infrastructural Works in respect of the sale of a vacant Bungalow Land vis-a vis the Purchaser where the  Purchaser has the obligation to build the bungalow, as well as the interpretation of the Sale & Purchase Agreements ("SPAs") in respect of the same. The Purchasers here also claimed for Liquidated Damages (LAD) by challenging that vacant possession had not been properly given to them. In this case, the Plaintiffs as the purchasers of various Bungalow Lots alleged that the Defendant ( developer) had breached the SPAs, specifically by failing to provide the Basic Infrastructural Works and without the Basic Infrastructural Works, the Plaintiffs claimed that they have not been able to commence the construction of their bungalows. The Court held amongst others as follows in dismissing the Plaintiffs' claim : (i) The Certificate of Practical Completion ("CPC") is sufficient to confirm that that Basic Infrastructural Works has been completed based on the phrase "..in accordance with the requirements and standards of the Vendor's engineer" in Clause 1.1(c) and Clause 10.1 (a) in the SPAs (ii) Vide the letters dated 3/3/2013 and 9/7/2013 issued by M/s Ng & Ng Consult, these letters are the CPCs for the Basic Infrastructural Works pursuant to the SPAs accepted by the Court. The Court also distinguished the case laws of Chong By Sam v Soon Teik Development Sdn Bhd [2009]1 MLJ 906 and Uniphone Telecommunications Berhad v Bridgecon Engineering Sdn Bhd [2011] MLJU 504 cited by the Plaintiffs to challenge the said letters as CPCs. (iii) In respect of the argument by the Plaintiffs that the CPCs cannot be conclusive proof that the Basic Infrastructural Works has been completed as it must be completed in compliance with the requirements of the Appropriate Authority, the Court held that this reference to the Appropriate Authority is only relevant to the second part of Clause 10.1 (a) of the SPAs, which provided that if the construction of the bungalows result in additional conditions and impositions by the Appropriate Authority, which is in addition to the Basic Infrastructural Works and these must be solely borne by the Plaintiffs. (iv) In any event, the Defendant have shown that the Basic Infrastructural Works had been completed with reference to the testimony of the Defendant's Engineer and his Rebuttal Report and also confirmations by. the Plaintiffs' own expert/Architect (v)   The Court further held that the Plaintiffs have misconceived the scope of Basic Infrastructural Works during the Trial. Although the Plaintiffs argued that the Defendant attempted to draw a distinction between a "temporary" supply of Basic Infrastructural Works ( i.e. for purpose of construction) and the "permanent supply" ( i.e post- construction), the Court held that this distinction is set out in Clause 10.1 (a) of the SPAs where the first part refers to the definition of Basic Infrastructural Works according to the Engineer which would apply before the construction of bungalows and the second part would trigger once the construction commences. (vi) The Court further held that as the Plaintiff have yet to commence construction of the bungalows the first part of Clause 10.1(a) would apply (vii) The Court also held that the second part of Clause 10.1 (a) also requires any substations post -construction to be built at the costs of the plaintiff and the reason is that the need of a sub-station would depend on the need of each bungalow, which was clearly established during the cross- examination of the witness from TNB. (viii) The Court that by the letters issued by the Defendant to the respective Plaintiffs between October 2013 and February 2014, the Defendant informed the Plaintiffs that vacant possession of the Bungalow lots was ready and the defendant's position is that no keys were handed due to the vacant Bungalow lots and vacant possession was given based on the deeming provision of Clause 7.2 (b) of the SPAs.  (ix) The Court further held that the CPCs need not be attached to the letters for vacant possession as the CPCs were issued before the said letters and there had been no complaints raised by the Plaintiffs on the lack of CPCs in the letters of vacant possession. (x) The Court finds that the PLaintiff have failed to prove that (a) the Basic Infrastructural Works were not provided in accordance with the SPAs, (b) the Defendant had not delivered vacant possession in accordance with the SPAs and (c) the Defendant had breached the SPAs.