The High Court in Accolade Land Sdn Bhd v Mass Rapid Transit Corporation Sdn Bhd [2024] CLJU 1468 ruled in favour of the property developer, whose plans were derailed by the realignment of the Sungai Buloh-Putrajaya MRT Line.
The judgment underscores the enforceability of oral agreements with government-linked
entities and sets a precedent for developers navigating public infrastructure projects.
The Case
Accolade Land Sdn Bhd sued Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) over the compulsory acquisition of their Kuala Lumpur land for the Sungai Buloh-Putrajaya MRT Line. Accolade alleged MRT Corp breached an oral agreement from a 2013 meeting, where MRT Corp promised the line would run through their land with an integrated MRT station. Relying on this, Accolade withdrew a judicial review appeal, agreed to a land swap, and redesigned their development, incurring costs. MRT Corp’s realignment of the MRT line to Bandar Malaysia rendered Accolade’s plans unviable, prompting a claim of RM257.8 millionfor breach of contract and misrepresentation.
The High Court found MRT Corp liable for breaching the oral contract and dismissed the misrepresentation claims. Accolade was awarded RM5.5 million for abortive consultancy fees, with other claims (e.g., lost profits) dismissed as speculative. Both parties have appealed the decision.
Court’s Findings
- Breach of Oral Contract: The court found that an enforceable oral contract was formed at the 2013 meeting, based on credible testimony and supporting evidence-including admissions by MRT Corp’s former CEO and public “win-win” statements.
- Misrepresentation Claim Dismissed: The court dismissed claims of misrepresentation due to insufficient evidence.
Key Legal Insights
1. Oral Agreements Can Be Binding With Evidence
- The court’s finding that an oral agreements with public entities were enforceable, based on testimony, correspondence, and public statements, underscores that all parties must ensure agreements are supported by credible evidence (e.g., meeting minutes, correspondence, witness testimony)
- All parties should meticulously record all negotiations, representations, and project changes. Contemporaneous records and third-party expert reports (as used by Accolade) can be pivotal.
3. Reliance Losses Are Recoverable
- Courts may award reliance losses, such as consultancy or redesign costs, when speculative damages are unprovable, provided a clear causal link exists. This highlights the importance of assessing risks before altering project plans.
4. Contractual Obligations Bind All Parties
- The judgment affirms that contractual obligations, whether by private or public entities, must be honored unless legally altered, emphasizing the need for clear communication and formal agreements to manage expectations.
– By George Miranda, Joy Sam Jia Qian, Nurafiqah ‘Izzati –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
