Back
2025 MarsdenLR 3865
HIGH COURT MALAYA KUALA LUMPUR
DANIEL ONG BENG CHONG & ANOR – Appellant
Versus
ALPINE RETURN SDN BHD – Respondent
[Civil Appeal No: WA-12BNCVC-167-12/2023]
Contractual terms preventing immediate occupancy upon delivery are exploitative and void under public policy, prioritizing fairness and justiceover strict adherence to contract terms.
Headnote:(A) Contracts Act 1950 - Section 24(e) - Street, Drainage and Building Act 1974 - Section 70(27)(f) - Breach of contract - Delivery of vacant possession - Plaintiffs sued for breach of sales agreement after alleged invalid delivery, claiming inability to occupy unit - Court found that delivery under agreement did not entitle plaintiffs to occupy unit without essential certificates - Delivery resulting in denial of enjoyment was deemed exploitative and against public policy - Section 39.1 of the sales agreement was declared void for being contrary to public policy. (Paras 9, 21, 25)
Facts of the case:
The plaintiffs purchased a commercial unit; delivery of possession was claimed valid by the defendant despite lack of necessary certificates, effectively prohibiting access to the unit. (Paras 3-7)
Findings of Court:
The Court allowed the plaintiffs' appeal, ruling that section 39.1 of the sales agreement was against public policy and thus void. (Paras 24-26)
Issues: Whether the delivery of vacant possession was valid considering the absence of relevant occupancy permits and if such contractual terms are against public policy. (Paras 10-12)
Ratio Decidendi: The Court concluded that contractual terms preventing immediate enjoyment of property were unconscionable given the imbalance of power and should be regulated in the interest of justice and fairness. (Paras 22-23)
Result: Appeal allowed. Claims for damages and interest were granted to plaintiffs.
| Table of Content |
|---|
| 1. the case involves breach of contract claims. (Para 1 , 2) |
| 2. details of property purchase and claims for damages. (Para 3 , 4 , 5 , 6 , 7) |
| 3. defendant's position on valid delivery. (Para 8) |
| 4. validity of cpc issuance considering legal requirements. (Para 9 , 10 , 11 , 12 , 13 , 14) |
| 5. importance of freedom of contract and public policy. (Para 15 , 16 , 17) |
| 6. judicial caution in striking contracts for public policy. (Para 18 , 19) |
| 7. discussion on fairness, justice in contractual terms. (Para 20 , 21 , 22 , 23 , 24) |
| 8. curtailment of section 39.1 deemed against public policy. (Para 25) |
| 9. court ruling on appeal and award to plaintiffs. (Para 26) |
Introduction
[1] In this judgment, the parties are referred to as they were at trial. The plaintiffs sued the defendant for breach of contract in respect of the purchase of a property and claimed damages for late delivery and general damages in alternative.
[2] After a full trial, the Sessions Court ruled that the notice of vacant possession and the Certificate of Practical Completion were valid and dismissed the plaintiff's claim. The plaintiffs were not satisfied with the decision of the Sessions Court and appealed.
Brief Facts
[3] The plaintiffs purchased from the defendant a commercial unit at the Star Boulevard, Kuala Lumpur at the purchase price of RM6,759,172.00. On 7 August 2014, the parties entered into a sale and purchase agreement ("SPA"). According to the SPA, the defendant was supposed to complete and deliver vacant possession of the unit within 48 months from the date the project development plan was approved.
[4] The project development plan was approved on 23 July 2014. As such, the plaintiffs took the stance that vacant possession of the unit should be delivered on 23 July 2018.
[5] One day before the deadline for delivery of vacant possession, the defendant issued to the plaintiffs a notice for delivery of vacant possession. In the notice, the defendant mentioned that it had obtained the Certificate of Practical Completion from the architect. However, the Certificate of Completion and Compliance has yet to be issued. As a result, the plaintiffs could not occupy the unit.
[6] In addition to the inability to occupy the unit, the plaintiffs faced a host of other issues. The plaintiffs did not receive the complete set of keys. Entry to the plaintiffs' unit was only possible with the presence of a representative from the defendant on appointment basis. The main entrance to the unit was locked with a "no entry" sign conspicuously displayed. Ongoing construction work can be seen around the plaintiffs' unit and within the commercial area of the project.
[7] The plaintiffs sued the defendant for breach of the SPA. The plaintiffs claimed that the purported delivery of vacant possession on 22 July 2018 was invalid. In their claim, the plaintiffs sought for the following reliefs:
(a) a declaration that the delivery of vacant possession was invalid,
(b) liquidated ascertained damages ("LAD") amounting to RM309,225.61 for late delivery,
(c) in alternative for general damages to be assessed,
(d) interest and cost.
[8] In defence, the defendant maintained that delivery of vacant possession was good in law as it was done in accordance with the terms of the SPA. The defendant insisted that the CPC was valid and that the plaintiffs were bound by the terms of the SPA which they had signed.
Analysis And Findings
Whether Issuance Of The CPC Constitute A Valid Delivery Of Vacant Possession Without The CCC
[9] The CPC was issued pursuant to the SPA. Section 39.1 of the SPA clearly allows for delivery of vacant possession upon issuance of the CPC.
Section 39.1 of the SPA provides as follows:
"Section 39 Manner of Delivery of Vacant Possession 39.1 Upon issuance of a certificate by the developer's architect certifying that the construction of the Parcel has been practically completed and the Purchaser having paid all monies payable under this Agreement and having performe
