Developer to pay RM45mil in damages to property owners for late delivery

Developer to pay RM45mil in damages to property owners for late delivery

PETALING JAYA: The High Court in Melaka has awarded about RM45 million in liquidated ascertained damages (LAD) to 106 purchasers of commercial units at a mall for late delivery of vacant possession.

Judicial commissioner K Raja Segaran said he found that the developer of Elements Mall @ Hatten City had failed to establish proper delivery of vacant possession under the sale and purchase agreements (SPAs).

He said the units were not shown to be duly completed and fit for occupation.

“As a result, the plaintiffs are entitled to LAD for late delivery of vacant possession,” he said in his judgment.

Raja Segaran said that based on the proper construction of the SPAs, a valid notice of delivery of vacant possession could only arise upon the issuance of a certificate of completion and compliance, certifying that the units had been duly completed in accordance with approved plans and were safe and fit for occupation.

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He said the court found that the developer, MDSA Resources Sdn Bhd, had failed to establish that the contractual preconditions for valid delivery of vacant possession had been satisfied.

The 106 purchasers filed their action in 2020 against MDSA, previously known as Fu Yuu Resources Sdn Bhd.

Raja Segaran said the documentary and oral evidence, including the architect’s report and witness testimony, demonstrated that the units had not reached the state required under the SPAs.

The court also noted that the developer elected not to call any witnesses, and that certain matters relied upon in its defence, including tenancy arrangements and related documents, were not proven by admissible evidence.

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Raja Segaran ordered the developer to pay about RM45 million to the purchasers in the consolidated suits, with damages continuing to accrue until lawful delivery of vacant possession.

He also awarded RM500,000 in costs, as the case involved five actions that were consolidated and heard together.

The plaintiffs sought a declaration that the units were not safe and fit for occupation, and that there had been no proper delivery of vacant possession under their respective SPAs.

They also claimed LAD for the developer’s failure to deliver vacant possession within three years from the dates of the SPAs, which were signed between 2011 and 2015.

The plaintiffs were represented by Anuratha Devaraju, Ratha Davi Rada Krishanan, Lui Soon Onn, and Chew Shufei, while Abraham Kuah appeared for the defendant.