When a Developer Calculates Late Delivery Compensation from the Wrong Date: The Court’s Ruling on LAD, Vacant Possession, and Settlement Agreements

The High Court’s decision in Wong Sii Ling & Ors v BJ Homes Development Sdn Bhd & Ors [2025] CLJU 1992 (High Court of Malaya, Shah Alam) addresses three questions that arise frequently in housing disputes: how to calculate liquidated ascertained damages (LAD), what constitutes valid delivery of vacant possession, and whether settlement agreements signed by some purchasers bar them from bringing later claims.

Facts

The Plaintiffs were 74 purchasers of condominium units in the City of Green development in Bukit Jalil, Selangor. The first Defendant was BJ Homes Development Sdn Bhd (the Developer), the second Defendant was the landowner, and the third and fourth Defendants were two firms of stakeholder solicitors who had held the 5% retention sum pending delivery of vacant possession.

The Plaintiffs were divided into three groups. Group 1 comprised purchasers who did not accept any LAD payments. Group 2 comprised purchasers who had voluntarily accepted LAD settlements. Group 3 comprised purchasers who had received LAD payments under duress.

The Plaintiffs alleged that vacant possession was delivered late, that the Developer wrongfully calculated the delivery period from the SPA signing date rather than the booking fee payment date, that a partial Certificate of Completion and Compliance (Form F1) issued on 22 June 2018 did not constitute valid delivery of vacant possession, and that a full CCC (Form F) was only obtained on 3 July 2018.

The Plaintiffs also alleged that the stakeholder solicitors had prematurely released 5% of the purchase price contrary to the SPA terms.

Issues

1. When does the 48-month delivery period begin: from the SPA signing date or from the booking fee payment date?
2. Was the delivery of vacant possession valid when made with a partial CCC (Form F1) rather than a full CCC (Form F)?
3. Can purchasers who have voluntarily accepted LAD settlements claim further compensation from the developer?
4. Did the stakeholder solicitors breach their obligations by releasing the 5% retention sum?

Decision and Reasoning

LAD Calculation from Booking Fee Date

The Court applied the Federal Court’s decision in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor [2021] 2 CLJ 441 and held that the 48-month delivery period begins from the date the booking fee was paid, not from the date the SPA was signed. The Developer’s practice of calculating the delivery period from the SPA signing date was therefore wrong in law. The LAD calculation must accordingly run from the earlier booking fee payment date.

Validity of Vacant Possession Delivery

The Court found that Form F1 was issued in error due to a technical issue and not because the building was incomplete. The error was subsequently corrected by the issuance of Form F on 3 July 2018. The Court held that the date of valid delivery of vacant possession was 3 July 2018 (the date Form F was issued), and not 22 June 2018 when the defective Form F1 was issued.

LAD Settlements Are Binding

Applying Pinpoint Consortium (M) Sdn Bhd v Mammoth Empire Land Sdn Bhd [2020] 10 MLJ 60, the Court held that Group 2 purchasers who voluntarily signed LAD settlement agreements are bound by those agreements and cannot claim further LAD compensation from the Developer. Only purchasers who accepted payments under duress (Group 3) may revisit their entitlement.

Stakeholder Solicitors Not Liable

As vacant possession was validly delivered on 3 July 2018 and the SiFUS application had been genuinely commenced, the Court found that the release of the 5% stakeholder monies was lawful and in accordance with the SPA terms. The stakeholder solicitors were accordingly not liable to the Plaintiffs.

Decision Made

1. Developer to pay LAD to Group 1 and Group 3 purchasers for delays beyond 48 months, calculated from the booking fee date to 3 July 2018.
2. Developer to pay LAD for delay in completion of common facilities, at 10% per annum of 20% of the purchase price, from the booking fee date to 3 July 2018.
3. Interest at 5% per annum on all LAD amounts from the date of judgment until full settlement.
4. Developer to pay RM60,000 in costs to the plaintiffs.
5. Each group of stakeholder solicitors awarded RM40,000 in costs.
6. No liability for the landowner.

Key Takeaways

1. Booking fee date triggers LAD calculation. Developers must calculate the delivery period from the date the booking fee was paid, not from the date the SPA was signed. Purchasers should retain all records of booking fee payments as these are critical to determining when the LAD period begins and ends.
2. A full CCC (Form F) is required for valid VP delivery. A partial CCC (Form F1) alone does not constitute valid delivery of vacant possession unless the technical circumstances can be clearly established. Purchasers are entitled to treat the date of the full CCC as the operative date for LAD purposes.
3. Voluntary LAD settlements are binding and bar further claims. Once a purchaser voluntarily accepts a LAD settlement agreement, they are generally prevented from claiming additional compensation unless they can demonstrate duress or other vitiating factors. Purchasers should obtain independent legal advice before signing any settlement.
4. Documentation and records are critical. Both developers and purchasers must maintain proper records of booking dates, CCC issuances, correspondence and payments. The outcome of LAD disputes frequently turns on documentary evidence of when key events occurred.
5. Stakeholder solicitors must comply strictly with SPA terms. Stakeholder solicitors may only release retained monies once the conditions prescribed in the SPA are satisfied. Premature releases expose the solicitors to potential liability.

The above is for general information only and does not constitute legal advice. For advice specific to your situation, please consult a qualified lawyer.