Homeowners ordered to pay PR1MA damages over failed LAD suit

The owners of 86 units in an affordable housing scheme have been ordered to pay damages to a federal agency, after the Johor Bahru High Court ruled their pursuit of additional compensation for late delivery breached a settlement agreement already in place.

Justice Wong Mee Ling, in allowing Perbadanan Perumahan Rakyat 1Malaysia’s (PR1MA) counterclaim, ordered each unit owner in Residensi Prima Tebrau to pay the agency nominal damages of RM10,000, together with RM5,000 in costs.

The owners had previously entered into a settlement agreement with PR1MA for liquidated ascertained damages (LAD), and had received payment in full, but brought the suit seeking additional compensation for late delivery of their units.

In a ruling delivered last week, Wong said that once parties have fully performed the terms of an agreement and accepted its benefits, they cannot readily refile or depart from the compromise reached.

“The (signed) letter of acceptance constitutes a binding compromise under Section 64 of the Contract Act 1950,” she said.

“By accepting the settlement sum, these plaintiffs (the unit owners) entered into accord and satisfaction, which effectively discharged the defendant (PR1MA) from further liability.”

To allow the unit owners to pursue their claim after “pocketing the benefits” would constitute unjust enrichment, she added.

Wong also dismissed LAD claims by the owners of seven units who were not parties to the settlement agreement, stating they were time-barred under the Limitations Act 1953. They were also ordered to pay costs of RM5,000 each.

The case before Wong involved the determination of six questions of law posed by the parties to the court.

The dispute stemmed from statutory sale and purchase agreements (SPAs) entered into by PR1MA and the unit owners between 2012 and 2015, which stipulated a 54‑month completion period for the delivery of vacant possession and common facilities, instead of the usual 36 months.

The suit, brought in 2021, was predicated on the argument that the completion period had been illegally extended by the controller of housing and should revert to 36 months, as provided for under the Housing Developers (Control and Licensing) Regulations 1989.

Wong ruled that the extension of the time for completion of the housing project granted by the controller was valid and binding on purchasers despite a subsequent change in the law.

“Accordingly, the 54-month (completion) period stipulated in the SPA remains valid and enforceable. The plaintiff’s attempt to retrospectively substitute that period with a 36-month period is therefore legally unacceptable,” said Wong.

The judge also held that because the cause of action for all the unit owners accrued at the execution of their respective SPAs, the six-year limitation period prescribed by law “served as a universal bar to their claims”.

NG Vinod appeared for the unit owners, while Shahrysham Kamran and Danish Abdul Rasid appeared for PR1MA.

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