Liquidated damages must be justified within the contractual obligations; reliance on force majeure requires compelling evidence that delays were truly beyond control.

JUDGMENT

Hasnah Mohammed Hashim JCA:

Introduction

[1] There are six related appeals, the first three appeals, S-02(NCVC)(A)-432- 02-2018 ("Appeal 432"), S-02(NCVC)(A)-436-02-2018 ("Appeal 436") and S-02(NCVC)(A)-437-02-2018 ("Appeal 437") before us are the appeals by the defendant against the decision of the High Court allowing the respective plaintiffs' claim for liquidated ascertained damages (LAD). The appeals in S-02(IM)(NCVC)-1481-02-2018, S-02(IM)(NCVC)-1482-02-2018 and S-02(IM) (NCVC)-1483-02-2018 are the appeals by the respective plaintiff against the decision of the High Court Judge allowing the defendant's application for stay of execution. It was agreed by the parties in all the appeals that the decision of this Court with regards to the first three appeals will bind the other three appeals. The appeals essentially concerned the interpretation of the Architect's Certificate of Extension of Time which was issued to the main contractor which in turn had extended the delivery of vacant possession. After considering the written and oral submissions of parties, we unanimously dismissed the appeal and affirmed the decision of the High Court. These are the reasons for our decision.

[2] For the purpose of this judgment, the parties will be referred to as they were in the High Court.

The Material Facts

[3] The facts are largely undisputed. The defendant is the developer of a mixed commercial and residential development described as "Sutera Avenue" located in Kota Kinabalu ("the Sutera Avenue Project"). The Sutera Avenue Project comprised two blocks, that is, Block A and Block B. Block A is a six-storey building with 108 units of office lots. Whilst Block B is a 10-storey building with 320 units of service apartments. The plaintiff in Appeal 432 purchased from the defendant the 10-storey shop/office building for RM10,800,000.00 ("the Purchase Price"). The plaintiff in Appeal 436 purchased from the defendant certain parcels of the 10-storey shop/offices building for RM 11,200,000.00 and the plaintiff in Appeal 437 also purchased certain parcels of the 10-storey shop/offices building for the Purchase Price of RM11,200,000.00. It is undisputed that there was a delay of delivery of vacant possession by 338 days. Under the Sale and Purchase Agreement ("SPA") executed between the parties, vacant possession was to be delivered on 25 September 2016 but, the delivery of vacant possession was almost a year later, that is, on 28 August 2017.

[4] The plaintiff claimed for liquidated damages ('LAD') for the late delivery of vacant possession as provided under the SPA. The premise of the plaintiff's claim is that it is unlawful for the defendant to invoke the force majeure clause as provided under cl 14.1.1 in the SPA. The defendant had relied on the Architect's Certificate of Extension of Time dated 4 August 2017 as the basis for invoking the force majeure clause. The defendant had in fact admitted their liability for the liquidated damages due as the defendant paid the plaintiff the sum of RM174,279.45. The defendant, however, explained that the reduced sum paid as LAD was because of the Architect's Certificate of Extension of Time dated 4 August 2017 issued to the Main Contractor, Eng Han Engineering Sdn Bhd The contractual completion date for delivery was unilaterally revised and varied by extending the completion date for 286 days.

The High Court

[5] The High Court agreed with the plaintiff that the force majeure clause is not wide enough to extend to any cause which is beyond the control of the defendant as the Developer of Sutera Avenue Project. There was nothing in the defendant's affidavits to support the argument that the delay was beyond its control. On the contrary the plaintiff had exhibited a letter from the Sabah Electricity Sdn Bhd ("SESB") stating that they had provided the electricity supply to the said premises within the expected time of three years from the date of application of supply. The High Court allowed the plaintiff's c