1. ) ANUAR BIN MAHMOOD 2. ) FARIDAH BINTE AHMAD v JOHOR LAND BERHAD

Case Significance

Illustrates a purchaser's remedies for a defective house under a Housing Development Act sale and purchase agreement — liquidated ascertained damages, repair costs, loss of use and damages for distress — and that a concurrent negligence claim does not enlarge recovery where the contractual remedies are adequate.

This High Court decision at Johor Bahru concerns a claim by two purchasers against a housing developer, Johor Land Berhad, arising from the sale of a double-storey terrace house at Bandar Dato' Onn, Johor Bahru, for RM629,300.00 under a sale and purchase agreement dated 9 February 2012. The purchasers alleged that the property was delivered with serious defects and, despite multiple rectification attempts by the developer, remained uninhabitable more than ten years after vacant possession. They claimed general damages for breach of contract, the cost of repairs, loss of use or rental, liquidated ascertained damages for late delivery, and interest and costs. The developer, licensed under the Housing Development (Control and Licensing) Act 1966, denied the claims, contending that the property had been completed in accordance with approved plans, that a certificate of completion and compliance had issued, that the purchasers had obstructed rectification works, and that they had failed to mitigate their losses.

After a trial spread over five days, the court considered the statutory scheme and the SPA terms, including the provisions on defects and liquidated damages, and the question — on which it sought further submissions — whether the purchasers' refusal to permit rectification was justified by safety concerns. It also addressed the developer's concurrent liability in negligence, holding that the contractual remedies under the SPA adequately compensated the purchasers and that the tort claim did not increase the recoverable damages.

The court entered judgment for the purchasers for RM691,294.52, comprising liquidated ascertained damages of RM63,594.52, repair and rectification costs of RM339,700.00, loss of use or rental of RM250,000.00, a consultant fee of RM8,000.00 and RM30,000.00 for distress and inconvenience. The claim for aggravated and exemplary damages was dismissed, as was a purported set-off for unpaid utility deposits that had not been pleaded. Interest was awarded and costs of RM150,000.00. The judgment is a detailed illustration of a purchaser's remedies for defective delivery under a housing SPA.