On 26.7.2024 ,the Federal Court with a panel of 5 judges delivered a landmark decision, refining the after effects of Ang Ming Lee and delivered its decision on the primary issue of whether purchasers are entitled to claim Liquidated Ascertained Damages (“LAD”) when they have entered into a sale and purchase agreement with a completion period of more than 36 months. The Federal Court in its brief judgment ruled that:
- The cause of action accrues at the time of signing of sale and purchase agreement. If a purchaser challenges the completion period which ought to be 36 months (and not more than that), the cause of action accrues on the date of the sale and purchase agreement and if one challenges after more than 6 years, limitation period has set in by virtue of Section 6(1)(a) of the Limitation Act.
- The 2nd Actor Theory applies in this set of facts. Even if the extension of time (first act) was found to be nullified, the fact remains that the EOT issued by the Controller was relied on by various parties (2nd actors). In this set of facts, the Developer and purchasers have relied on it and its validity cannot be disregarded.
- Ang Ming Lee will have a prospective effect and extension of time granted before Ang Ming Lee (26.11.2019) will not be defeated by virtue of Ang Ming Lee.
- The purchasers should not be allowed to claim LAD because this amounts to unjustly enriching them.
Full grounds can be downloaded below:
