Case:Ekovest Capital Sdn Bhd v Tan Tiong Hwa & Anor (Consolidated with Civil Appeal No. W-04B(NCVC)(W)-359-10/2025)
Court: Court of Appeal of Malaysia
Date of Judgment: 28 July 2026
Coram: Azizul Azmi bin Adnan, JCA; Ong Chee Kwan, JCA; Nadzarin bin Wok Nordin, JCA
1. INTRODUCTION
A recurring battleground in housing law is whether a purchaser, having accepted a late delivery payout and signed a settlement letter, can later sue for an additional “balance” on the basis of subsequent landmark judgments.
In this significant decision, the Court of Appeal unanimously allowed a developer’s appeal. The Court clarified that social legislation does not prevent a post-breach compromise of an accrued money claim. Once a purchaser executes a full and final settlement agreement without protest, they are bound by its terms and cannot retrospectively recompute their Liquidated Ascertained Damages (LAD) using later judicial developments.
2. FACTUAL BACKGROUND
The appellant, Ekovest Capital Sdn Bhd, developed the ‘EkoCheras’ mixed-development project in Kuala Lumpur. Before marketing, the developer obtained an Extension of Time (EOT) from the Housing Controller, lengthening the completion period from 36 to 48 months. The respondents paid booking fees for two residential units on 7 September 2013 and executed statutory Schedule H Sale and Purchase Agreements (SPAs) in late 2013 and early 2014.
On 2 May 2019, the developer issued Notices of Vacant Possession. Delivery was supported by a Partial Certificate of Completion and Compliance (Borang F1) covering the completed residential blocks. The project common facilities had been certified completed earlier on 20 December 2018.
Concurrently, the developer paid the respondents contractual LAD calculated over the 48-month threshold running from the SPA dates. The purchasers signed Settlement Letters stating that the payout was in “full and final settlement of any and all loss and damage” and that they “irrevocably waive… any further rights or claims whatsoever.” They banked in the cheques, took their keys, and moved into the units without protest.
Months later, the Federal Court handed down its landmark ruling in Ang Ming Lee (invalidating Controller-granted EOTs). Seizing on this, the respondents filed suit in February 2020 demanding recalculated LAD. By the time the case reached the High Court, the Federal Court’s ruling in Obata-Ambak clarified that Ang Ming Lee was not retrospective. The purchasers conceded that the 48-month EOT was valid, but argued they were still owed a “balance” because:
- Under PJD Regency, the LAD period must start from the booking fee date, not the SPA date.
- Vacant possession was invalid because it was backed only by a Partial CCC (Borang F1) rather than a Full CCC (Borang F), which was only issued on 13 September 2019.
The High Court accepted these arguments and awarded the purchasers an additional balance. The developer appealed.
3. THE CENTRAL ISSUES
The Court of Appeal was tasked to determine:
- Whether a signed full and final settlement letter constitutes a binding accord and satisfaction for an accrued statutory LAD claim.
- Whether social housing legislation prohibits purchasers from compromising an accrued monetary claim after a breach has occurred.
- Whether a developer can validly deliver vacant possession using a Partial CCC (Borang F1) under Schedule H.
- Whether a developer can claw back a sales rebate as a freestanding debt if the purchaser sues.
4. KEY FINDINGS OF THE COURT OF APPEAL
A. Accord and Satisfaction Bars Retrospective Payout Demands
The Court of Appeal ruled that the Settlement Letters constituted a classic, text-book example of accord and satisfaction under Section 64 of the Contracts Act 1950.
A compromise is an objective allocation of risk. The purchasers took certain, immediate money in May 2019 calculated according to the understanding of the law at that time. They cannot keep the money, keep the keys, occupy the properties, and then use subsequent judgments (PJD Regency) to retrospectively unpick the settlement bargain. To allow this would result in an inequitable financial windfall and work an unjust enrichment against the developer.
B. Compromising an Accrued Claim is Not “Contracting Out”
The respondents heavily relied on the strict housing law maxim that there can be “no estoppel against a statute” and that statutory protections cannot be waived.
The Court of Appeal drew a sharp, clear line between two distinct legal situations:
- Prospective Exclusion (Contracting Out): Where a developer tries to insert clauses at the point of sale to dilute, cap, or eliminate a buyer’s future rights before a breach happens. This is strictly illegal.
- Post-Breach Compromise: Where a breach has already taken place and the purchaser’s cause of action has crystallised into a monetary claim.
Nothing in the Housing Development Act (HDA) prevents a private citizen from settling an accrued private claim for money. If settlements of accrued claims were illegal, no housing developer and purchaser could ever settle a late delivery dispute out of court—a position that runs entirely counter to public interest and the statutory purpose of the Homebuyer Claims Tribunal.
C. Delivery of Vacant Possession Under a Partial CCC (Borang F1) is Valid
The purchasers asserted that because Clause 35(c) of the Schedule H agreement excludes a “partial certificate,” vacant possession backed by a Borang F1 was invalid, meaning LAD should accumulate until the Full CCC was issued.
The Court rejected this view, stating it elevated form over substance and misconstrued the compensatory design of LAD.
- Under By-law 25(2) of the Uniform Building By-Laws 1984, a Partial CCC certifies that the specific building it covers is completed, structurally safe, and fit for occupation.
- The Partial CCC in question covered the entire residential block where the purchasers’ units sat.
- The outstanding works for the Full CCC belonged exclusively to a separate hotel block in the mixed development.
LAD is designed to compensate a buyer for being kept out of physical possession of their unit. It is not a penalty linked to the completion of a commercial development at large. Because the residential units were certified perfectly safe and liveable, the vacant possession was fully valid.
D. Rebates Operate Defensively, Not Offensively
The Court addressed how developer-granted purchase rebates interact with LAD calculations.
- Defensively: If an LAD claim is actively being litigated, the calculations must be based on the net purchase price after deducting the rebate. Calculating LAD on the gross price would compensate a buyer for an outlay they never actually made, resulting in an unfair windfall.
- Offensively: However, once a developer gives a rebate, they cannot use a buyer’s subsequent lawsuit as an excuse to claw back that rebate as a freestanding debt. The developer’s counterclaim to recover the rebate was therefore dismissed.
E. PJD vs Obata
The Court of Appeal reconciled the two landmark Federal Court cases—Obata-Ambak (which protects completed settlements) and PJD Regency (which favors purchasers by starting late delivery from the booking fee date)—by drawing a clear, sequential line between substantive right of action and arithmetic computation.
The Court explained that the two decisions do not conflict because they address completely different stages of a legal claim:
PJD Regency Dictates “How to Calculate”, Not “Whether You Can Sue”
The purchasers argued that because PJD Regency is a binding Federal Court authority, any settlement calculated using the SPA date instead of the booking fee date was an under-calculation, and therefore illegal.
The Court of Appeal rejected this, ruling that “PJD Regency tells one how LAD is to be computed upon a subsisting claim. It does not tell one whether a claim subsists.”
- In other words, PJD Regency only applies if a purchaser has a live, ongoing lawsuit or an unresolved dispute over late delivery.
- It acts as a mathematical formula for active claims, but it does not possess the magical power to resurrect a claim that has already been legally extinguished.
5. TAKEAWAYS
- A Deal is a Deal: Purchasers cannot treat subsequent pro-buyer court judgments as a carte blanche to resurrect dead claims. If you accept an LAD settlement, cash the check, and take the keys without placing an explicit reservation or protest in writing, your claim is legally dead.
- Mixed Development Protections for Developers: Developers of phased or mixed-use developments can successfully halt late delivery damages on residential towers by executing a Partial CCC (Borang F1) for those blocks. Delay in commercial, hotel, or retail phases will not penalise the developer vis-à-vis residential buyers, provided the residential blocks and common facilities are completely certified as safe.
- Document Settlement Mechanics Wisely: Developers must ensure that their settlement letters are drafts of clear, written instruments detailing an unambiguous waiver of all accrued claims to secure an effective accord and satisfaction protection.
FULL GROUNDS CAN BE DOWNLOADED HERE
