Dato’ Adlan and Datin Azlin are real estate brokers of Malaysia and they love to acquire fixed assets as their future investment. On 3/1/2014, while window-shopping at KLCC, Datin Azlin was approached by Mr. Guna from Laguna Developer, a promising local developer promoting luxurious condominiums at Bukit Angkasa for sales below market price. Mr. Guna handed over a colorful and attractive brochure of such condominiums to Datin Azlin.
Back at home, , Datin Azlin explained to Dato Adlan about the above attractive housing package. Among other benefits offered are three parking lots for each parcel, fully furnished furniture, SPA & Hair Salons within the condominium compound, and entitlement to free membership of Laguna Golf Club. Dato Adlan, being an avid golfer, was interested with the package.
On the following day, Dato’ Adlan and Datin Azlin agreed to pay the booking fee amounting to RM1,600.00 for a parcel and subsequently perfected the Sale and Purchase Agreement with the panel solicitor of Laguna Developer (Reeni & Associates) for a purchase price of RM960,000.00. Dato’ Adlan paid the whole purchase price without any deferred payment.
Upon receipt of the parcel key, Dato’ Adlan and Datin Azlin eagerly rushed to see their new condominium at Bukit Angkasa. To their surprise, the buildings look shabby with limited space for parking. Datin Azlin was informed by the guard that every parcel owner is only entitled to one parking space, not three as stated in the brochure. Unhappy with this condition, Dato’ Adlan suggested to his wife to further check their parcel unit. To their dismay, the decoration resembles a low cost flat with torn out cushions and a plastic dining table with one broken chair. They went through the whole building and found no SPA & Hair Salons available as claimed in the brochure. Dato’ Adlan also took note that Laguna Golf Club does exist but it requires an annual fee for membership at the price of RM4,500.00 per subscriber.
The couple believe they have been misrepresented by Laguna Developer, and they wish to initiate legal proceeding against the developer.
a) Explain elements of misrepsentation of facts under the Malaysian Contract Law.
b) Can Dato Adlan initiate legal action against Laguna Developer? Justify your answer with reference to case laws and provision of the Malaysian Contract Act 1950.
c) Briefly distinguish misrepresentation and fraud under the Malaysian Contract Act 1950.