The Court of Appeal has allowed a Developer’s appeal and dismissed a BND408,000 liquidated and ascertained damages (LAD) claim arising from alleged delay in completing a development project.
The Court held that an extension of time granted by the Project Architect was final, conclusive and binding under the parties’ Development Agreement, leaving no basis for the Landowner’s claim.
The dispute was between Ho Guan Heng, the Developer, and Haji Abdullah bin Haji Metassim, as administrator of the estate of the late Haji Metassim bin Abd Rahman @ Hj Metassim, the Landowner.
The appeal, Civil Appeal No. 15 of 2025, was heard by Chief Justice Dato Seri Paduka Steven Chong, Justices Michael Lunn and Sir Peter Gross on June 15, with judgment delivered on August 27.
The parties had entered into a Development Agreement dated October 28, 2014 for the development of land at Lot No. 52518, Kampong Kiulap, Mukim Gadong, including the construction of a commercial building.
Practical Completion was originally due on November 12, 2019. The Project Architect subsequently granted the Developer a 125-day extension of time (EOT), moving the completion date to March 16, 2020.
The Landowner nevertheless claimed LAD of BND408,000, based on alleged delay up to May 9, 2020, when the occupation permit was issued.
The Developer applied to have the claim summarily determined under Order 14A of the Rules of the Supreme Court, relying on Clause 2.7 of the Development Agreement, which stated that any certification for an extension of time by the Project Architect would be “final, conclusive and binding” on the parties.
The EOT application was made on March 9, 2022, shortly after the Landowner’s demand for LAD on February 10, 2022 and almost two years after Practical Completion.
For the Developer, lawyer Haji Mansur DP Dr Haji Abdul Latif of Messrs Pengiran Izad and Lee argued that the contract imposed no time limit for an EOT application and that the Architect’s certificate had not been challenged for manifest error.
The Landowner, represented by lawyer Jaclyn Wong of Messrs Omar & Khan, argued that the retrospective EOT application was made in bad faith and was intended to defeat the Landowner’s LAD claim.
The Court rejected the argument.
The Court held that the timing of the EOT application, without more, provided no sufficient foundation for an allegation of fraud or bad faith.
The Development Agreement contained no provision requiring an EOT to be sought within a particular period, within a “reasonable period”, or before a Landowner demanded LAD.
The Court also rejected the suggestion that the Landowner already had an accrued entitlement to LAD when the EOT was sought. The demand for LAD did not itself establish an accrued right to payment, as any such entitlement remained subject to the Developer’s contractual right to seek an EOT.
The Court further found no basis to argue that the Project Architect had materially departed from his contractual instructions by issuing the EOT in June 2022.
On delivering the judgment, Sir Peter said the Court was bound to give effect to the bargain made by the parties and could not rewrite the Development Agreement.
The Court also held that there was no requirement for the Architect to provide reasons for the EOT certificate, as the contract did not stipulate that a “speaking” or reasoned determination was required.
The Court therefore concluded that the certificate had to be given its final, conclusive and binding effect and that the Landowner’s LAD claim was “doomed to fail”.
The Court allowed the Developer’s appeal and set aside the judgments below, dismissing the Landowner’s claim summarily under Order 14A.
The Court added that, had it been necessary to consider the alternative striking-out application under Order 18, Rule 18(1)(a), the Landowner’s claim would also have been struck out as plainly unarguable.
The Landowner was ordered to pay the Developer’s costs of the appeal and the proceedings below on the standard basis, with the amount to be agreed within 28 days or determined by the Registrar if no agreement was reached.