As I read the recent Court of Appeal decision of Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd & another appeal delivered on Mar 16, 2022, the decision raised more questions than answers.

This was a case where the housing developer had obtained extension of time (EOT) for 54 months in July 2012 for delivery of vacant possession of a housing project. The relevant clauses in the sale and purchase agreement were amended to reflect the extended period of delivery of vacant possession of the property. Both the purchaser and the housing developer agreed that the time for delivery of vacant possession was 54 months.

After taking delivery of vacant possession of its property from the housing developer, the purchaser filed the suit in year 2020 against the housing developer claiming for liquidated ascertained damages dating back to 36 months from SPA following the decision of Ang Ming Lee in 2020.

The housing developer raised the defence of limitation against the purchaser’s claim, saying that the purchaser was already out of time when it filed the action in 2020. Why? Because if the EOT was invalid as per the decision of Ang Ming Lee, it would have had breached the terms of SPA at the time of signing. The cause of action would have run from date of signing of SPA in July 2012 and 6 years had lapsed in July 2018. Therefore, the purchaser’s action filed in 2020 was barred by limitation.

I would agree with decision of Ang Ming Lee that the EOT obtained was invalid as it was not obtained in accordance with the law. However, one must be very careful to apply Ang Ming Lee’s case. In Ang Ming Lee, the SPA was signed providing for 36 months to deliver vacant possession as per Schedule H of Housing Development Regulations 1989. When the EOT was obtained later and subsequently ruled as invalid by the courts, the purchasers were still able to go back to the original 36 months as provided in the SPA to claim for liquidated ascertained damages.

Here, the SPA was already amended to 54 months at the time of signing. And now with the EOT obtained being invalid, can the parties now rely on the 36 months as provided under Schedule H even though it was never in the SPA in the first place? Or will the relevant clause on delivery of vacant possession in the SPA be rendered null and void?

This was the difference between the facts of this case and the facts in Ang Ming Lee which will bring us to different line of questions. I hope there will be another Federal Court decision ruling for the effect of EOT on SPA where the clauses were already amended at the time of signing. This will settle a lot of conflicting decisions post Ang Ming Lee.