PARVATHI A/P PERIAKARUPPAN v AMALAN SETAR (M) SDN. BHD.

Case Significance

Illustrates how a vacant-possession deeming clause in a statutory sale and purchase agreement is read subject to the agreement as a whole, so a notice cannot deem delivery where the property has been rendered uninhabitable, and the assessment of liquidated damages for the resulting delay.

This High Court decision at Shah Alam, delivered by Choong Yeow Choy J, is an appeal in a dispute between a house purchaser and a developer under a statutory sale and purchase agreement for a double-storey house in Rawang. After the developer obtained the Certificate of Completion and Compliance, it issued a notice to the purchaser to take vacant possession. However, through an inadvertent mix-up of addresses, the keys to the purchaser's house were mistakenly handed to a contractor engaged to carry out renovation works intended for a different property, and the purchaser found the premises had been rendered uninhabitable. The proceedings concerned when vacant possession was validly delivered and the purchaser's entitlement to liquidated ascertained damages for late delivery, with the contractor joined as a third party in the court below.

The developer relied on the deeming provision in the sale and purchase agreement — clause 26(3) — under which a purchaser is deemed to have taken delivery of vacant possession on the expiry of the notice period, whether or not the purchaser has actually entered into possession. The Court held that the deeming provision is subject to the other clauses of the agreement and could not operate where the premises had been rendered uninhabitable through the intervening act facilitated by the third-party contractor. Vacant possession therefore could not be deemed given as of the expiry of the first notice.

The Court held that the first notice did not effect a deemed delivery, but that a second notice was valid, so vacant possession was deemed to have been given on 22 June 2020. The purchaser was accordingly entitled to liquidated ascertained damages from 13 January 2020 to 21 June 2020; the award for loss of rental income was increased from RM4,000 to RM5,000, and the purchaser was awarded costs of RM5,000. The judgment is a useful illustration of how the vacant-possession deeming clause in a statutory sale and purchase agreement is read subject to the agreement as a whole, so that a notice cannot deem delivery where the property has been rendered uninhabitable, and of the assessment of liquidated damages for the resulting delay.