COSMOPOLITAN AVENUE SDN BHD v 1. ) DICKSON WOO BOON SIEW 2. ) CHOONG SOO HOI 3. ) LEE SWEE KIAT 4. ) LEE MEI PENG 5. ) CHU SWEE WAH 6. ) TIONG POH LING 7. ) PRISTINE CLEAR SDN BHD 8. ) CSL PROPERTIES SDN BHD

Case Significance

Confirms that a commercial property sale falls outside the Housing Development Act, so LAD for late delivery is governed by the contract's terms; that a validly concluded settlement is not vitiated by a subsequent instalment default; and that a claimant seeking a refund of overpayment bears the burden of proving it.

This Court of Appeal decision concerns liquidated and ascertained damages (LAD) for the late delivery of commercial office suites in the Empire City, Damansara development, and the validity of settlement agreements entered into to resolve those claims. The appellant, Cosmopolitan Avenue Sdn Bhd, was the developer and defendant below; the respondents — a mix of individual purchasers (referred to here by role) and corporate purchasers including Pristine Clear Sdn Bhd and CSL Properties Sdn Bhd — had each bought an office suite and claimed LAD for late handover. The High Court had partly allowed those claims, invalidating the settlement letters and ordering LAD together with a refund.

The Court of Appeal took a different view of the governing legal framework. It held that the sale and purchase agreement was "a commercial contract outside the Housing Development Act", so that the statutory homebuyer-protection regime did not apply and LAD "must follow its terms" — the parties' bargain, rather than the prescribed statutory formula, governed. On that footing the settlement agreements the purchasers had signed were "valid", and a subsequent "breach of instalments did not void them": a party could not escape a concluded settlement merely by later defaulting on payments under it.

The court also identified an error on the burden of proof. On the claim for a refund of overpayment, the High Court had misallocated the onus; because there was no evidence to support the overpayment, the refund was set aside. The court allowed the appeal in part, varying the High Court's orders to reflect these conclusions — upholding the settlements and reversing the refund while leaving the LAD entitlement to be determined by the contract's own terms.

The judgment is significant for confirming that a commercial property sale falls outside the Housing Development (Control and Licensing) Act 1966, so LAD is governed by the contract rather than the statutory formula; that a validly concluded settlement is not vitiated by a later payment default; and that a claimant seeking a refund of overpayment bears the burden of proving it.