Smooth Achievement Sdn Bhd & Ors v Cekal Unggul Sdn Bhd & Ors

Appellant(s):

• Smooth Achievement Sdn Bhd
• Hyper Industrial Automotive Sdn Bhd
• Kua Swee Kiat
• Kua Swee Keong
• Swissma Building Technologies Sdn Bhd
• Ply-Mart Sdn Bhd
• Chua Tong Hin Hardware Sdn. Bhd.
• Rectech Resources Sdn. Bhd.

Respondent(s):

• Cekal Unggul Sdn Bhd
• Jurutera Perunding Primareka Sdn Bhd

• YA Datuk Supang Lian
• YA Dato' Lim Chong Fong
• YA Dato Alwi Bin Abdul Wahab

• The first respondent, a developer, sold factory land lots (without buildings) to the appellants (purchasers) under Sale and Purchase Agreements (SPAs) which stipulated terms for payment, delivery of vacant possession, and provision of infrastructure.
• The SPAs provided for vacant possession within 18 months of the Development Order, with a potential 6-month extension, and linked stage payments to completion certificates issued by the second respondent (consultant).
• Disputes arose concerning the validity of the completion certificates, the actual date of vacant possession, the appellants' claims for liquidated damages for delay, and the first respondent's counterclaims for late payment interest.

• The primary issue was the proper construction of the SPA clauses regarding the delivery of vacant possession, specifically whether it was contingent upon the completion of all infrastructure works, including mechanical and electrical (M&E) services.
• Whether the second respondent, as the consultant, was negligent or acted prematurely in issuing completion certificates for the civil works, given the appellants' contention that M&E infrastructure was incomplete.
• Whether the appellants were entitled to liquidated damages for late delivery of vacant possession under Section 75 of the Contracts Act 1950, and whether the first respondent's counterclaims for late payment interest were valid.

• The Court of Appeal, applying an objective and commercial interpretation of the SPAs, held that vacant possession was delivered upon completion of civil works for the property and infrastructure, not the subsequent M&E works dependent on purchasers' needs and utility providers.
• The Court found that the civil works were substantially completed by September 2015, validating the second respondent's certificates and dismissing claims of negligence against the second respondent, though noting the second respondent assumed overall consultant responsibility.
• The Court affirmed the High Court's decision not to award liquidated damages to the appellants, as they failed to adduce cogent evidence of actual loss, consistent with Section 75 of the Contracts Act 1950, and dismissed the first respondent's cross-appeal as incompetent.