In Tan Lian Hor v. Honhub Sdn Bhd [2025] CLJU 2210, the High Court dismissed a Landowner’s claim against a Developer for alleged breach of a joint venture agreement (JVA) and duty of care due to defective construction of two shophouses. The court found insufficient evidence of poor construction or foundation settlement causing the defects. The Developer’s counterclaim, attributing damage to unauthorized wall demolition by the Landowner’s tenant, was also dismissed for lack of conclusive proof.
Property defects claims may appear straightforward at first, as Developers are often assumed to bear responsibility for construction flaws, but this case illustrates that liability is never automatic. Courts demand rigorous, contemporaneous evidence to establish the root cause of defects, and mere photographs, anecdotal accounts, or visual inspections are insufficient without scientific testing and proper methodology. For claimants, success depends on presenting credible proof that defects existed at the material time, while Developers must rely on statutory compliance such as the Certificate of Completion and Compliance (CCC) and be prepared to rebut weak or speculative claims. Ultimately, the ruling underscores that in property disputes, success depends not on assumptions but on evidence that withstands judicial scrutiny.
Background of Facts
The plaintiff was the original Landowner (Lot 9120) in Tanjung Karang, Selangor. He entered into a JVA dated 28 October 2009 with the Developer to develop a commercial center (the “Project”). The land was subdivided into 13 lots in 2010. The Developer constructed 11 shophouses, with Certificates of Completion and Compliance (CCC) issued in 2014. Under the JVA, the Landowner was entitled to 30% of the units (four shophouses: Premises 1, 2, 3, and 4). The Landowner took possession of Premises 3 and 4 in August 2014, and Premises 1 and 2 in May 2015 after initial defects were reportedly repaired.
In April 2017, cracks appeared in the common wall between Premises 1 and 2, which the Landowner attributed to substandard construction and foundation settlement. The Landowner rented Premises 1 and 2 to a tenant, who demolished the common wall in August 2015 without approval.
The Landowner sought rescission of the transfer and damages based on market value, claiming total failure of consideration. The Developer denied liability, citing proper construction (evidenced by CCC) and counterclaimed for indemnity, blaming the tenant’s demolition.
High Court’s Rulings
Both the claim and counterclaim were dismissed with costs against the plaintiff. The court addressed four key issues:
- Limitation: The claim was held not time-barred under the Limitation Act 1953. The cause of action accrued on 27 October 2013 which was the contractual delivery date under the JVA, and the writ was filed on 10 July 2019, within the six-year limit.
- Breach of JVA/Duty of Care: Dismissed for want of proof. The Landowner failed to prove defects existed at vacant possession as photographs were tampered, and pleadings admitted repairs were made. The CCC provided prima facie evidence of construction in a “good workmanlike manner” per approved plans, laws, and standards, which the Landowner did not rebut. This echoes ASM Development (KL) Sdn Bhd v Econpile (M) Sdn Bhd [2020] MLJU 282, where CCC issuance presumptively discharges Developer’s obligations, shifting the evidential onus to claimants via Sections 101–102 Evidence Act, unrebutted here.
- Cause of Defects: Dismissed. The Landowner relied on expert reports claiming poor quality, but these were based solely on visual inspections without scientific tests or root cause analysis. The reports lacked evidential value under Section 45 of the Evidence Act 1950 and O. 40A r. 3(2) of the Rules of Court 2012, as they were bare opinions without cogent data.
- Demolition as Cause: Counterclaim dismissed. The Developer’s expert report suggested the unauthorized demolition “highly likely” caused disturbance, but it was inconclusive as it lacks scientific proof linking it to any structural and foundation damage. This parallels Sumatec Engineering and Construction Sdn Bhd v Malaysian Refining Co Sdn Bhd [2012] 4 MLJ 1, where speculative attribution of damage to third-party acts falters without forensic substantiation.
Key Takeaways for Landowners
- Evidential Standards in Construction Disputes: Claims of defective construction require robust, contemporaneous evidence (e.g., dated photos, scientific tests). Tampered or inconclusive evidence can undermine a case entirely.
- Expert Reports Must Be Rigorous: Visual inspections alone are insufficient for expert opinions on technical issues like foundation failure. Reports need scientific backing, compliance with procedural rules (e.g., detailing methodology, tests, and overriding court duty), and root cause analysis to hold evidential weight.
Key Takeaways for Developers
- Crucial Role of CCC: The issuance of a CCC serves as strong prima facie proof of compliance with building standards and fitness for habitation, shifting the burden to the claimant to rebut it effectively.
- Liability for Unauthorized Alterations: While renovations without authority approval can raise liability concerns, proving causation requires more than speculation; conclusive scientific evidence is essential.
This case highlights the courts’ emphasis on evidence-based claims in property development disputes.
– By George Miranda, Joy Sam Jia Qian, Alisyah Maisarah –
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.
