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When Primo was not so Primo: Purchasers’ Win against Property Developer of Luxury Homes

  • Writer: Aarthi Jeyarajah
    Aarthi Jeyarajah
  • 1 day ago
  • 5 min read

Luxury homes. RM5 million price tags. Six consolidated appeals.


Image is only for illustration purposes
Image is only for illustration purposes

The recent decision of the Court of Appeal is a powerful reminder that in defect litigation, fundamentals still win [See Sime Darby Property (Bukit Jelutong) Sdn Bhd v Ooi Cheng Huat @ Ooi Peng Huat (menyaman atas namanya sendiri dan sebagai wasi dan pemegang harta pusaka Linda Patricia Lim Sooi Hong, si mati) & ors and other appeal [2026] MLJU 347[1]/ [2026] CLJU 238 [2].


This article aims to discuss a recent decision relating to six appeals arising from claims by purchasers in a development known as PRIMO Bukit Jelutong involving a well-known property developer. The appeals involve both “Sell-then-build” (“STB”) units and “Build-then-sell” Units (“BTS”).


This case serves as a guide on interpretation of the Courts in relation to statutory SPAs, latent defects, DLP interpretation, and evidentiary burdens in construction defect litigation.

The decision reinforces:

  • The statutory nature of housing SPA obligations.

  • The survival of latent defect claims beyond DLP.

  • The limited scope for contracting out of Schedule forms.

  • The centrality of causation in construction disputes.

  • The high evidentiary threshold for overturning factual findings on appeal.

 

Here are the key takeaways from a reading of the Grounds of Judgment:


1️⃣ The DLP is not a magic cut-off.

The 24-month Defect Liability Period (“DLP”) primarily addresses patent defects. Latent defects especially structural or systemic issues, discoverable after the 24 months DLP period, can still be a subject matter of a claim against the developer.  It was the finding of the Court that the SPAs/statutory forms’ DLP terms are primarily applicable as against PATENT defects which are discoverable during the 24 months’ DLP Period and this does not bar homeowners from claiming damages for LATENT defects for poor workmanship/materials which are only discoverable after the DLP period.


2️⃣ You can’t contract out of statutory protection.

“As is where is” clauses and inspection acknowledgements do not override statutory SPA obligations unless strict regulatory requirements are satisfied.

 

The Court held that despite the fact that Regulation 11 (1B) of the Housing Development (Control and Licensing) Regulations 1989 ("HDLR") might be one of the extremely limited statutory exceptions where parties may contract out of the statutory forms of the Housing Development Act 1976 ("HDA")/HDLR, the manner in which the Developer in this case sought to exert this exception was far too excessive to the extent that it entirely defeats the class protection mechanism of the HDA as a social legislation. Some of the key observations by the Court was that:


  • Parliament had intended that the same good materials and workmanlike obligation shall apply across the board for both STB sale (under Schedule G) as well as BTS sale (under Schedule I) considering both schedules still contain the same good materials and workmanlike obligation clause;

  • The extravagant price paid by the BTS purchasers were still within the same high end price range between RM4.5million to RM5million that is similarly applied against the STB purchasers (whom still are protected by the good materials and workmanship obligation under Schedule G). Thus it is far too unfair and oppressive against the BTS purchasers to be deprived of the protection mechanism of the good materials and workmanlike obligations despite having no other option but to pay the same extravagant prices as the STB Purchasers (without any reasonable haircut to the price);

  • Although the BTS purchasers were given the opportunity to inspect the bungalows prior to their purchases, the BTS purchasers as the weaker party still remains at the mercy and reliance on the Developer’s expertise and skills to deliver high end and luxury bungalows that PRIMO was marketed and described to be; and

  • It is altogether oppressive and unreasonable to apply the exception in such a liberal manner to the extent that the BTS purchasers are barred from relying on the Developer’s good and workmanlike obligations when the BTS purchasers had purchased the bungalows on the clear context, pretense, and legitimate expectation of a high end and luxurious piece of real estate.

 

It is noteworthy that the Court took the position on the disparity of bargaining power between Developer and Purchase, and held as follows:


 “[100]  It is painstakingly clear that the Purchasers were in the weaker position that was entirely vulnerable to the Developer’s upper- hand. Sime Darby cannot in good and fair conscience, absolve itself from its statutory good materials and workmanlike obligations by ‘relying’ on the Purchasers’ lack of special knowledge as laypersons. This is especially so considering statute law had already expressly identified homeowners or purchasers as a protected class of persons.”

 

3️⃣ Renovations don’t automatically break causation.

If a developer says the homeowner’s renovation works caused the defect, the burden is on them to prove it.

 

Conclusion

It is clear that the Court has reiterated that the HDA is in fact social legislation, aimed at protecting consumers. Further, a read of the Grounds of Judgement of the Court of Appeal indicates a higher threshold of quality of work expected when a higher price is attached. There were many issues explained in detail on the quality of workmanship expected from a reputable developer, which would be useful when arguing on behalf of purchasers, especially given that most developers tend to “over promise” when selling STB units.

 

In an economy where we see rapid development in urbanised areas and STB SPAs being entered into for the perks and discounts being offered by developers that aide in funding these developments, the Court’s interpretation on the effect of statutory SPAs and the extent of the developer’s obligations in providing proper materials and good workmanship becomes very important. Whilst the statutory SPAs will provide a general outline of what is to be expected in the end result of the property being bought, many a time the details of what will be provided in the finished unit is not spelt out in the SPA. Show units are also usually marketed with disclaimers stating that what you see, isn’t necessarily what you will get.

 

From a litigation perspective, it appears that the importance of running the case from the view point of causation, statutory framework and expert evidence would make or break a case.


Happy to exchange thoughts with fellow practitioners who are seeing similar trends in defect disputes.


Aarthi & Associates is a legal firm dealing with varied civil, commercial and construction disputes, fraud litigation, injunctions and CIPAA claims. The firm's philosophy of "Providing Solutions" demonstrates a commitment to providing fast, effective and practical solutions to disputes.


Notes


[1] [2026] MLJU 347 has mistakenly stated that the Grounds of Judgement is one of the Federal Court. The Kehakiman website confirms that the Grounds prepared by her Ladyship Justice Azimah Omar (now FCJ) is in relation to 6 appeals heard in the Court of Appeal.



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