GROUNDS OF JUDGMENT

Introduction

I had, on 23rd June 2008, dismissed both Enclosures 27 and 24 ie, the plaintiff's appeal against the decision of the senior assistant registrar in allowing the 2nd defendant's striking out application in Enclosure 21 and the 1st defendant's appeal against the decision of the senior assistant registrar's in allowing the plaintiff's summary judgment application in Enclosure 9.

The plaintiff's summary judgment application in Enclosure 9 against the 1st and 2nd defendant is for liquidated ascertained damages for late delivery of vacant possession of a condominium unit amounting to RM334,691.64, interest at the rate of 10% per annum on RM334,691.64 from 10.9.2007 until full settlement and costs.

The 2nd defendant is applying through Enclosure 21 under Order 18 rule 19 RHC 1980 to strike out the plaintiff's claim.

Summary of facts

On 7.9.1995, the plaintiff and the 1st defendant entered into a sale and purchase agreement (the sale and purchase agreement) for the sale and purchase of a unit at Sri Emas Condominium (the condominium unit) for the purchase price of RM314,010.00 (the purchase price). Time was of the essence of the contract as stipulated in Clause 7 of the sale and purchase agreement.[1 Exhibits DSG - Enclosure 9]

It is also a term of the sale and purchase agreement that 'vendor' ie, the 1st defendant also includes its successors in title and permitted assigns [2 Ibid at Clause 31 (h)] and that the sale and purchase agreement would be binding on the successors in title and permitted assigns of the 1st defendant, the heirs, personal representatives, successors in title and permitted assigns of the plaintiff. [3 Ibid at Clause]

Vacant possession of the property and completion of common facilities were to be given to the plaintiff 36 months from the date of the agreement as stipulated by Clause 22(1) and Clause 24(1) of the sale and purchase agreement [4 Ibid] ie, on 7.9.1998. The said date came and vacant possession was not handed to the plaintiff.

Clause 22(2) and Clause 24(2) of the sale and purchase agreement stipulate that failure to deliver vacant possession complete with common facilities will result in the 1st defendant's liability to pay liquidated ascertained damages to the plaintiff. Clause 22 (2) of the sale and purchase agreement stipulates that liquidated ascertained damages for late delivery of vacant possession are to be calculated at the rate of 10% per annum on the purchase price on a day to day basis. [5 Ibid]

On 15.9.2005, the 1st defendant executed a 'white knight' agreement with the 2nd defendant (the white knight agreement). [6 Exhibit DSG-3 Enclosure 9] The 2nd defendant's role was to revive the abandoned condominium project [7 Ibid at Clause 2 (a)] and to procure the purchasers' (including the plaintiff's) agreement to waive their rights to liquidated ascertained damages. [8 Ibid at Clause 2 (e)] Clause 2(e) of the white knight agreement was inserted notwithstanding preamble (g) where it is clearly stated that the 1st defendant would continue to be liable for liquidated ascertained damages for its failure to deliver vacant possession within 36 months from the date of the sale and purchase agreement.

The 1st defendant's contention

The 1st defendant argue that the reason vacant possession could not be delivered within the stipulated time and the fact for the appointment of the 2nd defendant is attributed to the Asian financial and economic crisis in the late 1990s that inadvertently affected the financial standing of the 1st defendant. The 1st defendant is not denying that they were late in delivering vacant possession or that the plaintiff has never, at all material times, waived his right to liquidated ascertained damages. The 1st defendant's argument is that the Asian financial crisis is a triable issue for the court to consider because granting summary judgment would defeat the practice amongst the construction industry in appointing 'white knights' to revive abando