The High Court in Jason Yap Wei Kian v PNSB Acmar Sdn Bhd
 6 AMR 855 applied the saving provision in section 37(1) of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (‘the Covid Act
’) to allow a purchaser’s claim for liquidated ascertained damages (‘LAD
’) for the period from 18 March 2020 until 15 July 2020 in respect of a late delivery claim.
The appellant (‘the plaintiff
’) purchased a stratified property with a car park (collectively ‘the property
’) from the respondent (‘defendant
’) pursuant to a sale and purchase agreement dated 27 November 2015 ("the SPA
") for the purchase price of RM423,000.00.
Under the SPA, the defendant was to deliver vacant possession of the property to the plaintiff within 36 months from the date of the SPA. The defendant failed to deliver vacant possession by the expiry of the said period, i.e. by 26 November 2018. On 2 July 2020, the defendant issued a notice to the plaintiff (‘defendant’s notice
’) to take vacant possession of the property within 14 days from the date of the defendant’s notice, i.e. by 15 July 2020 but the plaintiff only did so on 18 July 2020, three days after the expiry of the 14-day period stipulated in the defendant’s notice.
On 26 August 2020, the plaintiff filed a claim against the defendant for LAD of RM83,441.10 at the Magistrates' Court for late delivery, for the period from 27 November 2018 to 18 July 2020. The magistrate found in favour of the plaintiff but allowed the plaintiff's LAD claim in part only. The claim for damages for the period between 18 March 2020 and 15 July 2020 (‘relevant period
’) was dismissed on the ground that the said period is to be excluded pursuant to sections 32 and 35 of the Covid Act. The plaintiff’s claim for LAD after 15 July 2020 was disallowed as the magistrate ruled that the plaintiff was deemed under the SPA to have taken vacant possession of the property upon the expiry of 14 days after the date of the defendant’s notice, i.e. on 15 July 2020. The plaintiff appealed to the High Court.
The plaintiff relied on section 37 of the Covid Act to contend that he was entitled to claim LAD for the relevant period as his claim was filed on 26 August 2020 prior to the Covid Act being gazetted on 23 October 2020. The plaintiff therefore submitted that the defendant could not rely on sections 32 and 35 of the Covid Act to avoid liability to pay LAD for the relevant period.
Two issues came before the High Court for decision, of which one is relevant for the purpose of this article, namely:
“Whether the magistrate had erred in dismissing the plaintiff's LAD claim for the period from March 18, 2020 until July 15, 2020
The Decision of the High Court
The High Court allowed the plaintiff’s appeal and set aside the magistrate's decision in excluding the relevant period from the calculation of LAD for delivery of vacant possession.
The learned magistrate had relied on section 35 read with section 32 of the Covid Act to exclude the relevant period from the calculation of LAD in respect of the plaintiff’s claim. Section 35(1) provides as follows:
“35. (1) Notwithstanding any agreement entered into between the purchaser and the developer, the period from 18 March 2020 to 31 August 2020 shall be excluded from the calculation of—
(a) the time for delivery of vacant possession of a housing accommodation; and
(b) the liquidated damages for the failure of the developer to deliver vacant possession of a housing accommodation
The magistrate also relied on section 32 of the Covid Act which states that Part XI of the Covid Act (which includes section 35) is deemed to have come into operation on 18 March 2020.
According to the magistrate’s grounds of decision, the plaintiff did not plead section 37(1) in his pleading and was bound by his pleading. On this basis, the magistrate did not consider the plaintiff’s reliance on section 37(1) to claim LAD for the relevant period.
Section 37(1) of the Covid Act reads as follows:
“The modifications in sections 34, 35 and 36 shall not affect any legal proceedings commenced, or any judgment or award obtained, to recover late payment charges payable by the purchaser or liquidated damages payable by the developer or any other sum during the period from 18 March 2020 until the date of publication of this Act
The High Court explained that sections 35 and 37 of the Covid Act are to be viewed from two different contexts; the former exempts from the calculation of LAD, the period from 18 March 2020 to 31 August 2020 whereas the latter states that the modifications in sections 34, 35 and 36 shall not affect any legal proceedings commenced, or any judgment or award obtained, to recover late payment charges payable by the purchaser or liquidated damages payable by the developer or any other sum during the period from 18 March 2020 until the date of publication of the Covid Act.
The Court held that the plaintiff had correctly relied on section 37(1) of the Covid Act in claiming LAD. The said provision operates as a saving clause to property owners who had filed their claims prior to the Covid Act being gazetted on 23 October 2020 but who may not have been aware of the exclusion of the calculation for LAD for the period specified in section 35(1) of the Covid Act. As the plaintiff had filed his claim on 26 August 2020, the Court concluded that the magistrate had erred in not allowing the plaintiff's LAD claim for the relevant period. The Court added that the magistrate ought to have applied section 37(1) of the Covid Act in the calculation of the damages.
As regards the magistrate’s reasoning that he did not consider section 37(1) of the Covid Act by reason of the plaintiff’s omission to plead the provision in his pleadings, the Court agreed with the plaintiff’s submission that Order 18 rules 7 and 8 of the Rules of Court 2012 only require relevant facts to be pleaded and not evidence. As the material facts which formed the basis of the plaintiff's claim had been clearly pleaded, the issue of the plaintiff's failure to plead section 37(1) of the Covid Act did not arise. The Court added that it is also not mandatory to plead the said provision in his pleadings as Order 18 rule 11 of the Rules of Court 2012 provides that “A party may by his pleading raise any point of law
This decision is not ground-breaking as it is a straightforward application of the saving provision contained in section 37(1) of the Covid Act in relation to LAD claims filed before the Covid Act was gazetted. Nevertheless, this decision is one of the few reported Malaysian cases on the provisions of the Covid Act.
Commentary by Tan Wei Liang (Associate) of the Corporate Practice of Skrine.