1. ) TOH CHIUN ER 2. ) CHENG WEE SIANG 3. ) AU YEONG KOON YEE 4. ) LAI HO YEE 5. ) LOW SAI MON 6. ) LEE YUEN KEI 7. ) LOH TOO CHIN 8. ) EE HOCK CHOUNG 9. ) EE CHERN YANG 10. ) PHUAH SIEW CHENG 11. ) LIM TECK LEONG 12. ) YONG CHENG YEE 13. ) CHANG SHING WAN v EKOVEST CAPITAL SDN BHD (DULU DIKENALI SEBAGAI PROMPT CAPITAL SDN BHD)

Case Significance

Instructive on the limits of a developer's liability in general damages for lack of capital appreciation or diminution in value once it has discharged its statutory duty to apply for subdivision, the issuance of strata titles being a matter for the authorities.

This High Court decision at Kuala Lumpur concerns a representative action by purchasers of parcels in a housing development against the developer, and an application under Order 14A of the Rules of Court 2012 to determine questions of law and the construction of documents. The plaintiffs, purchasers in a strata development, brought the action in their personal capacity and as representatives of all thirteen purchasers under Order 15 rule 12 of the Rules of Court 2012, and applied for the court to determine the questions of law or construction annexed to their application, for a stay of the action pending that determination, and, upon a determination in their favour, for the reliefs sought in their writ and statement of claim, which included a claim for general damages for the lack of capital appreciation and the diminution in value of their parcels arising from the developer's obligations as to subdivision and the transfer of the property. The court, per Eddie Yeo Soon Chye JC, dismissed the application. Applying the High Court decision in Blue Green Network Sdn Bhd v Pilihan Megah Sdn Bhd, it held that once a developer has complied with its statutory duty to apply for subdivision within the prescribed time, any claim for general damages is deemed academic, because after the developer has made the application the processing of that application and the issuance of separate strata titles are the statutory functions of the relevant governmental authorities, outside the developer's control or responsibility, and it is not for the developer to procure the issuance of strata titles within a fixed period. On that footing the sub-question of general damages for lack of capital appreciation and diminution in value did not arise at that stage of the project, and the plaintiffs were not entitled to claim the general damages. The court accordingly dismissed the relevant prayers of the application and the corresponding claims in the statement of claim, with costs of RM30,000. The judgment is instructive on the limits of a developer's liability in general damages once it has discharged its statutory duty to apply for subdivision.