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2021 MarsdenLR 2844
HIGH COURT SABAH & SARAWAK SIBU
SIA KIE KING @ SIA KIE KHING & ORS – Appellant
Versus
VIVA SENTOSA SDN BHD – Respondent
[Suit No: SBW-22NCvC-20/6-2019 (HC)]
The court affirmed the validity of a phased Development Agreement, ruling the project must be completed within specified reasonable timelines and allowing for liquidated damages due to delays.
Headnote:(A) Contracts Act 1950 – Section 47 – Development Agreement – Plaintiffs allege breach of Development Agreement due to delays in project completion by the Defendant, who argues that the project can be completed in phases. The court held that the Development Agreement allows for phased development and must be completed within a reasonable time. (Paras 17, 29, 54)
(B) Liquidated Damages – The court awarded liquidated damages of RM500 per month for each incomplete unit for delays, specifying the time frames for completion of each phase. (Paras 54)
Facts of the case: The Plaintiffs, as landowners, claimed that the Defendant, as property developer, breached the Development Agreement by failing to complete the project in a timely manner. The Defendant contended their right to develop in phases, which was supported by clauses in the agreement. (Paras 1-4)
Findings of Court: The Development Agreement remains valid, and the project is to be completed within a reasonable time defined by specified completion dates for each phase, along with provisions for liquidated damages in case of delay. (Paras 53-54)
Issues: Whether the Defendant was late in project completion and the applicability of a time frame for the whole project versus phased completion. (Paras 17, 29)
Ratio Decidendi: Court held that while time is of the essence, completion timelines must align with the construction agreement's phased nature; thus, it established reasonable completion dates applicable to each phase. (Paras 18-54)
Result: The Development Agreement remains in effect; the Plaintiffs are entitled to liquidated damages based on delays. (Para 54)
JUDGMENT
Dispute In Brief
[1] As in the many cases that traverse this Court this is a dispute between the Plaintiff as landowners and the Defendant as property developer appointed under a written contract to develop the Plaintiffs' lands. Again, as is common in cases of this nature, the Plaintiffs allege that the Defendant is in breach of the terms of the Development Agreement.
[2] In essence the Plaintiff alleges that the Defendant is late in completing the proposed project ("the Project") but the Defendant counters by saying that the Development Agreement permits them to construct the Project in phases and in that sense they are not late or in breach of the terms of the Development Agreement.
[3] The 1st Plaintiff was registered owner of 4 parcels of the lands all within the Seduan Land District:
Lot 991, Block 16,
Lot 994 Block 16,
Lot 1186 Block 16,
Lot 1188 Block 16
[4] The 1st Plaintiff together with the 2nd, 3rd and 4th Plaintiffs were registered co-owners of % undivided share in:
Lot 986, Block 16,
Lot 988 Block 16,
Lot 999 Block 16,
Lot 223 Block 16,
Lot 224 Block 16,
Lot 1192 Block 16
all within the Seduan Land District (collectively, "the said Lands").
The Plaintiff's Prayers
[5] The Plaintiff prays in its Statement of Claim (encl 2) the following:
(a) A Declaration that the Development Agreement dated 23 January 2008, Supplementary Agreement dated 9 April 2012 entered into between the Plaintiffs and the Defendant were terminated on 10 April 2019 or ALTERNATIVELY the Development Agreement be terminated by this Honourable Court;
(b) An Order that the Defendant shall surrender the vacant and legal possession of LOTS 991, 994, 1186, 1188, 986, 988, 999, 223, 224, 1192, all of Block 16 Seduan Land District (hereinafterreferred to "the said Lands") to the Plaintiffs and withdraw all caveats concerned, revoke all the Power of Attorney created, discharge the said Lands and return all original titles of the said Lands to the Plaintiffs within
ONE (1) month from the date of Order failing which the Deputy Registrar shall be empowered and authorized to sign on the relevant instruments to effect the withdrawal of the caveats, revocation of the Power of Attorney and any other documents giving effect to the termination of the Development Agreement;
(c) An Order that the Plaintiffs be entitled to the Plaintiffs 'entitlements under Phase 1 pursuant to cl 1(a) of the Supplementary Agreement dated 9 April 2012 and the legal rights, interest, title concerning and affecting the Defendant's entitlements under Phase Ito be assigned and/or transferred to the Defendant and/or its nominees and/or Purchasers according to the Sale and Purchase Agreements validly executed between the Defendant and the Purchasers;
(d) An Order that the Plaintiff shall make necessary applications to the Land & Surveys Department for the issuance of the individual land titles of all buildings under Phase I upon which the Defendant shall pay and settle all the premium and any other relevant costs and expenses in respect of the issuance of the individual land titles of all buildings, including the Plaintiffs' entitlements under Phase 1within SIXTY (60) DAYS from the date the premium and any other relevant costs and expenses become due payable;
(e) An Order that save for the portions of lands under Phase 1, the Plaintiffs shall enter and take legal possession of the said Lands with all the improvements, if any;
(f) An Order that the DEPUTY REGISTRAR of High Court of Sabah & Sarawak, Sibu shall be authorized and empowered to sign all relevant documents and/or instruments, if any to effect the Order(s) and Judgment herein when deemed necessary;
(g) General damages to be assessed by this Honourable Court;
(h) Costs; and
(i) such further or other relief as this Honourable Court deems fit and just.
Defence And Counterclaim
[6] The Defendant's defence is that they were not late or slow in completing the development of the said Lands as the Development Agreement permitted th
