A contract for liquidated damages does not commence until the formal agreement is executed; exemptions under the COVID-19 Act do apply to delay calculations.

[1] All parties lodged their respective appeal against the decision of the Sessions Court on 20 May 2024. Both the appeals were heard together by this Court. Having presided over this case where the payment for liquidated ascertained damages (LAD) was disputed, the Session Court had decided to allow the claim for LAD subject to a re-calculation from the date when the deposit of RM10,000.00 was paid and the deduction of 167 days exempted under the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (COVID-19 Act). The Session Court had allowed the interest of 5% per annum to be calculated from the date of the filing of the claim at the Sessions Court until the date of full and final settlement. For the counterclaim for the return of the rebate of RM63,440.00 from the purchase price and 5% per annum interest was also allowed to be calculated on the rebate amount from 27 April 2016 (the date when the rebate was granted) to the date of full and final settlement.

[2] The Plaintiffs at the Sessions Court appealed against the Sessions Court's decision in allowing the Defendant's counterclaim for the rebate. The Defendant on the other hand, sought this Court's intervention against the Sessions Court order directing the payment of LAD to the Plaintiffs - the amount re-calculated from 13 January 2015 with the deduction of 167 days exempted under the COVID-19 Act 2020. The parties are hereby referred to in this decision as how they were at the Sessions Court.

Facts Of The Case

[3] The evidence from the Appeal Records revealed the following facts:

(a) On 13 January 2015 the Plaintiffs paid RM10,000.00 to Messrs. Kington Tan Dzul to show their intention to purchase the Unit A-10-01 Block A, Residensi Xtreme Meridien, Jalan Bemban, 55000 Ampang, Selangor (Astoria Ampang);

(b) On 24 March 2016 the National Housing Department had granted the extension applied for by the Defendant - to deliver vacant possession from 36 months to 48 months. This approval was conditional - it only applied to unsold units;

(c) On 29 March 2016 the Sale and Purchase Agreement (SPA) was executed between the Plaintiffs and the Defendant. They had agreed that the vacant possession of Astoria Ampang ought to be delivered within 48 months from the date of the SPA - Clause 25(1). The purchase price for Astoria Ampang was agreed at RM793,000.00;

(d) On 27 April 2016 the Defendant had agreed to accord the Plaintiffs a rebate as they had requested in the amount of 8% on the balance of the deposit which was RM63,440.00. Thus, the total sum of the purchase for the Astoria Ampang was RM729,560.00;

(e) On 24 September 2020 after having obtained the relevant approvals and certifications, the Defendant informed the Plaintiffs that Astoria Ampang was ready for the delivery of vacant possession;

(f) On 15 December 2020 the Defendant informed the Plaintiffs that the Director General of the National Housing Department of the Ministry of Housing and Local Government had on 2 December 2020 had granted exemption from 18 March 2020 to 31 August 2020 which affected the calculation for any LAD claims pursuant to the late delivery of vacant possession of Astoria Ampang;

[4] Upon closer scrutiny of the evidence in the Appeal Records, this Court found that the payment of RM 10,000.00 paid by the Plaintiffs to Messrs. Kington Tan Dzul was not a deposit or a booking fee to the Defendant for