Johor Court Orders 86 PR1MA Tebrau Buyers to Pay Damages for Breaching Settlement

Key figures

• ●Johor Bahru High Court ordered 86 Residensi Prima Tebrau homeowners to pay PR1MA RM10,000 in nominal damages plus RM5,000 in costs each, for suing again after accepting a full settlement over late delivery, per Nanyang Property citing Free Malaysia Today
• ●7 other unit owners who had not signed the settlement had their late-delivery (LAD) claims dismissed as time-barred under the Limitation Act 1953, and were each ordered to pay RM5,000 in costs
• ●The judge ruled the buyers' signed acceptance letters formed a binding settlement under Section 64 of the Contracts Act 1950, discharging PR1MA from further liability
• ●The dispute traces to 2012-2015 sale and purchase agreements with a 54-month completion deadline, longer than the standard 36 months; the court held all buyers' claims were time-barred from their SPA signing dates
• ●The ruling follows a May 2024 Court of Appeal decision, reported by Free Malaysia Today, that allowed the same 111 buyers' claim to proceed to a full trial, which has now concluded against most of them
• ●Lumi News Malaysia independently reported the same ruling's outcome under a matching headline

News summary

A Johor Bahru High Court judge ruled that 86 homeowners at PR1MA's Residensi Prima Tebrau project breached a settlement agreement with the federal housing agency Perbadanan PR1MA Malaysia (PR1MA) by suing for further compensation after already accepting full payment under that settlement, Nanyang Property reported, citing Free Malaysia Today. The judge allowed a counterclaim by PR1MA and ordered each of the 86 affected unit owners to pay PR1MA RM10,000 in nominal damages plus RM5,000 in costs, according to Nanyang Property. A separate group of seven unit owners who had not signed the settlement also had their late-delivery compensation claims dismissed, with the court finding those claims time-barred under the Limitation Act 1953; each of the seven was ordered to pay RM5,000 in costs, Nanyang Property reported.

Nanyang Property, citing Free Malaysia Today, reported that the judge found the buyers' signed acceptance letters constituted a binding settlement agreement under Section 64 of the Contracts Act 1950, and that accepting the settlement sums discharged PR1MA from further liability for the project's late handover. The judge reportedly said that once parties act on a settlement's terms and accept its benefits, they cannot easily revisit litigation or depart from what was agreed, adding that letting buyers keep pursuing compensation after accepting settlement funds would amount to unjust enrichment.

The ruling follows litigation that Free Malaysia Today has tracked since at least 2021. In its report on the Court of Appeal's May 2024 decision in the same dispute, FMT said PR1MA had entered a settlement agreement with 111 buyers of Residensi Prima Tebrau units, and that a three-member appellate bench chaired by Justice Che Ruzima Ghazali dismissed PR1MA's bid to strike out the buyers' liquidated ascertained damages (LAD) claim, ruling it was "not obviously unsustainable" and should proceed to a full trial. FMT reported the buyers had argued the settlement violated the Housing Development (Control and Licensing) Act 1966, that they were not properly informed of its terms before signing, and that their part-payment had been accepted on a "without prejudice" basis — arguments the High Court's later ruling appears to have rejected for the 86 buyers covered by valid settlements.

Nanyang Property reported that the underlying dispute traces back to sale and purchase agreements (SPAs) signed between 2012 and 2015, under which the developer was contractually bound to deliver vacant possession and common facilities within 54 months, longer than the standard 36-month period set under the Housing Development (Control and Licensing) Regulations 1989. The buyers argued in their 2021 suit that the Controller of Housing had unlawfully extended the completion deadline and that the standard 36-month period should apply instead, according to Nanyang Property. The judge ruled that the Controller's extension approval was valid and binding on purchasers even after later legal amendments, that the 54-month period in the SPA remained enforceable, and that all buyers' causes of action arose when they signed their SPAs, meaning the standard six-year limitation period barred the claims for every buyer in the case, Nanyang Property reported.

Lumi News Malaysia separately reported on the same ruling under the headline "Homeowners ordered to pay PR1MA damages over failed LAD suit," confirming the High Court's finding that PR1MA was no longer liable for late delivery once the agreed settlement sums were paid in full; this session could not retrieve Lumi News' full article text to independently cross-check the RM10,000 and RM5,000 figures. For buyers elsewhere negotiating late-delivery settlements with developers or housing agencies, the case underscores that accepting a full and final settlement payment, including LAD payouts, can legally bar any later claim for additional compensation over the same delay — a principle Malaysian courts also applied this year in an unrelated dispute involving Ekovest's EkoCheras project.