Homeowners win legal battle as High Court blocks commercial project on their residential property in Cyberjaya.
KUALA LUMPUR, 12 Sep 2023 – In a significant legal victory, the High Court has granted an injunction sought by 46 homeowners of Lakefront Villa @ Cyberjaya in Dengkil, Sepang. This injunction prohibits the developer and its subsidiaries from proceeding with any commercial development on the site.
Judicial Commissioner Leong Wai Hong, in his ruling, emphasized that the developer had a binding commitment to fulfill its agreement with the buyers, which specified the delivery of a residential development with specific features.
Leong clarified that the Lakefront Villa @ Cyberjaya project was originally intended as a residential development with 110 units. He further decreed that the project must remain exclusively residential and granted an injunction to halt any commercial development by the defendants or their representatives.
The homeowners initiated legal action last year, naming Lakefront Residence Sdn Bhd (the developer), registered landowner Timeless Hectares Sdn Bhd, and MCT Bhd (now known as Avalan Bhd) as defendants.
Their claim asserted that Lakefront Residence and Timeless Hectares are wholly owned subsidiaries of MCT Consortium Bhd, which, in turn, is a wholly owned subsidiary of MCT.
The villa and bungalow owners contended that the proposed commercial development violated commitments made to them in 2014, as well as the terms of their respective sale and purchase agreements (SPAs) entered into between 2014 and 2020.
In 2014, MCT promoted the project, announcing the construction of 110 exclusive villas priced between RM1.8 million and RM3.6 million. Subsequently, in 2017, the developer attempted to convert a portion of the land for commercial purposes, which was met with rejection by the local authority, Sepang Municipal Council, two years ago.
However, the Selangor appeals board later allowed the developer’s appeal.
Despite disclaimers included in brochures, the court found them insufficient, as they were printed in such small print that they could not reasonably be relied upon.
The court concluded that MCT had made representations and promises to buyers during the promotional phase, including on their websites, newsletters, brochures, and showroom model. Given this, the disclaimers were deemed legally ineffective.
Despite arguments from the companies that the homeowners lacked legal standing to file the suit as they did not represent the joint management body (JMB), Leong asserted that an SPA constitutes an individual contract between a homebuyer and the developer. Therefore, homebuyers have the right to pursue their individual contractual rights as a private cause of action without depending on the JMB to sue on their behalf.
In his comprehensive 68-page decision, Leong quoted a Malay proverb, “Kata itu kota,” emphasizing the importance of honoring commitments, stating that “A man’s word is his bond.”