JCW

[Assessment of damages – different valuation – one based on medium costs apartment and the other based on a high end condominium- date of valuation – whether previous consent order relevant] Justin , Alvin and Pang Kwong Hang were the counsel for the Defendants. In this case, the High Court was tasked with assessment of damages as ordered by the Federal Court in respect of a medium costs project (Vista Damansara) which was abandoned and in its place a high end condominium (Boulevard Residence) was built. One year before the date of delivery of vacant possession, the 2nd Defendant sold the land on which there were 18 SPAs signed with the Plaintiff to the 1st Defendant in respect of the Vista Damansara project. Before the Trial commenced, parties recorded a Consent Order agreeing that the interest of the Plaintiff is to be preserved pending the Trial and the 1st Defendant may proceed with the development of Boulevard Residence.  The 1st Defendant proceeded to build Boulevard Residence. The Court of Appeal and the Federal Court decided against the Plaintiff and declined to order specific performance of the 18 SPAs and the Federal Court ordered damages to be assessed and paid by both defendants jointly and severally to the Plaintiff. There was a Trial on assessment of damages which include market value, LAD and/or rental. Amongst others the Court held as follows : (i) The Court held that the real problem lies in determining the property's market value since the initial medium costs apartment under Vista Damansara never materialized. (ii) The Plaintiff provided valuation premised on the Consent Order and market value of Boulevard Residence i.e RM12,822,000 where the valuation based on the date of the Federal Court Order on 28/8/2019. The Defendants' valuation is premised on 18 medium cost apartment valued as at the date the SPAs were lost i.e. 11/3/2008 when the land was sold i.e RM2,885,000. (iii) The Court held that the Consent Order is not applicable to assess damages the Plaintiff's position would be against the findings of the Court of Appeal [ reported in [2019] 7 AMR 229] that " a monetary compensation would be the appropriate remedy to be awarded to the Plaintiff in relation to the 18 units of medium-cost apartments that formed the subject matter of the 18 principal agreements". Further, inter- alia the whole purpose of the Consent Order was to preserve the status quo of the Plaintiff pending the trial and to ensure the transfer of 18 units to the plaintiff in the event specific performance is ordered. (iv) The Plaintiff's valuation report was misconceived as it was prepared on the wrong premise and hence should be rejected. (v) The effective  date of assessment of damages shall be the date when the SPAs were lost because the project never materialized, and the land was sold to a third party before the date of delivery of vacant possession. (vi) The Plaintiff's claim for LAD is only possible if the Plaintiff is entitled to the physical possession of the 18 units and here there can be no actual delivery when the project never materialized. (vi) The alternative claim for loss of rental based on rates found on the internet pertaining to Boulevard Residence is speculation at best and disallowed.