Encorp Iskandar Development Sdn Bhd v Teo Choon Poh & Ors

Appellant(s): Encorp Iskandar Development Sdn Bhd

Respondent(s): Xxxx

• YA Dato' Hashim Bin Hamzah
• YA Datuk Azimah binti Omar
• YA Datuk Ismail Bin Brahim

• The appellant, a developer, offered a Developer's Interest-Bearing Scheme (DIBS) to purchasers of a strata project, undertaking to bear progressive loan interests during the "construction period".
• The Sale and Purchase Agreements (SPAs) stipulated a 48-month period for vacant possession (Contract Period), but the DIBS Agreement was ambiguously drafted regarding the duration of the "construction period".
• The appellant failed to deliver vacant possession within the 48-month Contract Period, continued to pay interest for a period beyond it, but later demanded reimbursement from the purchasers, arguing the DIBS period was limited to 48 months.

• Whether the "construction period" under the Developer's Interest-Bearing Scheme (DIBS) was limited to the 48-month contractual period for vacant possession or extended until the actual delivery of vacant possession, including delays.
• Whether the *contra preferentum* rule should apply against the appellant due to the ambiguity in the DIBS Agreement drafted by them.
• Whether the subsequent conduct of the parties and the equitable doctrine of estoppel were relevant in interpreting the contractual terms and determining liability.

• The Court affirmed the High Court's decision, ruling that the appellant was contractually obligated to bear progressive interest under the DIBS scheme until the actual delivery of vacant possession, including periods of delay beyond the 48-month Contract Period.
• The Court applied the *contra preferentum* rule against the appellant due to the ambiguous drafting of the DIBS Agreement and considered contemporaneous documentary evidence and the appellant's own subsequent conduct of continuing payments.
• The Court held that estoppel applied in favour of the purchasers, as the appellant's earlier voluntary payments contradicted its later demand for reimbursement, which was made under circumstances of inequity and coercion against the purchasers.