The court affirmed that force majeure applies beyond strict lockdown periods in property development contracts, emphasizing the need for holistic contract interpretation and sound judicial appreciation of evidence.

JUDGMENT

Roz Mawar Rozain J:

[1] Submissions by both parties were heard on 16 January 2025. This Court stood the matter down for deliberation. This appeal raises important questions about force majeure in the context of property development during the COVID-19 pandemic. At its heart lies the interpretation of contractual obligations when faced with unprecedented circumstances that challenged traditional concepts of construction delays and delivery timelines.

[2] The Appellant challenged the Sessions Court 's findings that force majeure excused the developer from liquidated ascertained damages beyond strictly-defined lockdown periods. This presented an opportunity to examine the delicate balance between contractual certainty and commercial reality in extraordinary times.

[3] The issues transcend mere contractual interpretation - they reflect the broader challenge faced by the property development industry during a global pandemic, where construction progress was impacted not just by total lockdowns, but by an array of restrictions and safety measures that fundamentally altered how development projects could proceed.

[4] This Court 's judgment therefore addresses whether the Sessions Court 's findings warrant appellate intervention, guided by established principles that an appellate Court should not disturb factual findings unless they are plainly wrong or reflect insufficient judicial appreciation of evidence.

The Sessions Court 's Findings

[5] This trial before the Sessions Court was as a result of the Appellant having pursued the claim of the balance of liquidated ascertained damages (LAD) due to the late delivery of vacant possession by the Respondent of the properties purchased. Initially the Appellant's statement of claim (SoC) claimed for the payment of RM325,134.24 for 360 days of delay. On 22 September 2022 the Sessions Court granted judgment by admission for RM131,800.00 for 146 days of delay as admitted by the Respondent. The Appellant thereafter claimed for the remaining 214 days (LAD in the sum of RM193,274.24) which was tried by the Sessions Court .

[6] The findings of facts after trial by the Sessions Court as to the background of this case are as follows:

(a) The case involved two sale and purchase agreements between the parties (the SPA);

(b) It concerned two commercial properties known as Parcel No A2-27-03 and A2-27-03A Strata Office (The Stride) at Bukit Bintang City Centre;

(c) The purchase price was RM1,735,000.00 for each unit.

[7] The chronology of the events as per the grounds of judgment by the Session Court are as follows:

(a) The SPA is dated 28 October 2016;

(b) The completion deadline was 27 October 2020 (48 months from the SPA);

(c) The actual delivery of vacant possession was on 9 March 2022;

(d) There was a delay of a total of 497 days.

[8] The Sessions Court accepted that there was a force majeure situation due to COVID-19 pandemic restrictions. The period from 18 March 2020 to 12 May 2020 and 1 June 2021 to 20 August 2021 was excluded from LAD calculation due to total lockdown in the country. The Sessions Court ruled that the dates in between the total lockdown were also to be exempted having found that the COVID-19 restrictions affected construction work, including:

(a) obtaining the required MITI approvals;

(b) there was a 50% workforce reduction;

(c) there were worker screening requirements;

(d) there were quarantine requirements related to the COVID-19 pandemic.

[9] The Sessions Court had rejected and dismissed the Appellant's claim for additional LAD of RM193,274.24. It found that the delays were caused by circumstances beyond the Respondent's control. It clearly accepted that the force majeure defence was applicable due to COVID-19 pandemic. In dismissing the Appellant's suit, it ordered costs of RM8,000.00 to be paid to the Respondent.

[10] There was evidence evaluation by the Sessions Court ; it had noted that the Respondent produced charts and graphs showing its construction progress.