Ekovest Capital Sdn Bhd v Tan Tiong Hwa & Anor

Appellant(s): Ekovest Capital Sdn Bhd

Respondent(s):

• Chong Sew May
• Chong Chee Sien

• YA Dato' Azizul Azmi Bin Adnan
• YA Dato' Ong Chee Kwan
• YA Dato' Nadzarin Bin Wok Nordin

• The developer obtained an extension of time (EOT) before the purchasers signed their Schedule H sale and purchase agreements (SPAs), extending the completion period from 36 to 48 months; vacant possession was later delivered on the strength of a Partial Certificate of Completion and Compliance (Partial CCC), with the Full CCC issued about four months later.
• Upon delivery, the developer paid liquidated ascertained damages (LAD) computed on the 48-month period running from the SPA dates, and the purchasers signed settlement letters accepting the payment as full and final settlement and waiving further claims; they took the keys, banked the cheques, and never tendered the money back.
• After the Federal Court's decision in Ang Ming Lee invalidated the Controller's power to grant such EOTs, the purchasers sued for additional/balance LAD; by the time of the High Court appeal, the Federal Court's decision in Obata-Ambak clarified that Ang Ming Lee did not operate retrospectively, and the purchasers abandoned their EOT-invalidity claim but pursued balance LAD on other bases (earlier commencement date per PJD Regency, and later terminal date based on invalidity of delivery via Partial CCC).

• Whether the limitation holding in Obata-Ambak (that a cause of action challenging SPA terms accrues from execution of the SPA) applies to bar the purchasers' claims for balance LAD.
• Whether settlement letters recording LAD payment as "full and final settlement" constitute a binding accord and satisfaction precluding a claim for balance LAD, notwithstanding the statutory character of Schedule H contracts and the principle that there can be no estoppel against a statute.
• Whether principles from PJD Regency (commencement date for LAD) and the validity of delivery of vacant possession supported only by a Partial CCC (rather than a Full CCC) could be used to recompute and enlarge a settled LAD claim, and whether allowing such recomputation would amount to unjust enrichment.

• The Court held the claims were not time-barred, as the limitation holding in Obata-Ambak is confined to challenges against the validity of SPA terms themselves, whereas the causes of action here for LAD accrued upon delivery of vacant possession and completion of common facilities under the SPAs; however, the Court held that the equitable strand of Obata-Ambak (concerning full and final settlements, unconscionability, unjust enrichment and estoppel) applied squarely to bar the claims.
• The Court found that the settlement letters were a valid and binding accord and satisfaction under section 64 of the Contracts Act 1950, discharging the developer's LAD liability; it drew a distinction between prospective "contracting out" of statutory rights (which is prohibited) and the post-breach compromise of an already-accrued claim (which is permitted and not barred by the "no estoppel against a statute" doctrine), and held that a settlement is not vitiated merely because later case law shows a party could have recovered more.
• The Court further held that delivery of vacant possession supported by a Partial CCC certifying completion of the purchasers' own blocks and common facilities was valid and effective (distinguishing Chau Chee Sing and preferring Tham Wai Keat), that PJD Regency governs computation of a subsisting claim but cannot revive one already discharged by settlement, and that any rebate given would properly reduce (but not be independently reclaimable as) the LAD computation; the appeal was allowed, the courts below reversed insofar as they awarded balance LAD, and the purchasers' claims were dismissed with costs.