UUM wins RM2.47mil damages over renovation, management of mall

 High Court also dismisses company's RM7.7 million counterclaim, ruling that the takeover of the property was within the university's contractual rights.

The Alor Setar High Court held that Magna Hartamas Sdn Bhd breached both a 2015 principal agreement and a 2021 settlement agreement governing the mall project at UUM’s Sintok campus. (File pic)

PETALING JAYA:

Universiti Utara Malaysia (UUM) has won more than RM2.47 million in damages and arrears after the Alor Setar High Court ruled that a company had breached agreements related to the renovation, management and maintenance of the university’s mall.

Judicial commissioner Aimi Zaini Azhar ordered Magna Hartamas Sdn Bhd to pay RM226,500 in liquidated ascertained damages, RM247,700 in concession arrears and related payments, RM18,300 in sewerage charges, RM1.92 million in utility arrears, and RM58,181 for repair and maintenance works.

The court also awarded UUM RM80,000 in costs.

In a 22-page written judgment released last week, Aimi held that Magna Hartamas breached both a 2015 principal agreement and a 2021 settlement agreement governing the mall project at UUM’s Sintok campus.

According to the facts of the case, under the 2015 agreement, Magna Hartamas was responsible for financing, renovating, upgrading, maintaining and managing the mall under a private finance initiative arrangement.

UUM terminated the agreement in March 2021, citing multiple breaches.

Although the parties later signed a settlement agreement that temporarily delayed UUM’s takeover of the mall, the court found that Magna Hartamas failed to comply with key obligations, including payment commitments and obtaining the Certificate of Completion and Compliance (CCC).

Aimi said Magna Hartamas failed to complete the project on time. While the works were to be completed by March 2016, the CCC was only obtained in August that year.

He rejected the company’s claim that the delay was caused by weather conditions and tenant-related issues.

He also rejected Magna Hartamas’s argument that the project involved only renovation works and did not require a CCC, ruling that the works included substantial structural alterations requiring statutory approval.

On concession fees and utility charges, the court dismissed Magna Hartamas’s contention that the Covid-19 pandemic and reduced rental income excused its payment defaults, noting that the arrears had begun years before the pandemic.

Aimi rejected Magna Hartamas’s claim that UUM had failed to ensure full occupancy of student entrepreneurship lots, finding no contractual obligation requiring the university to guarantee continuous occupancy.

He accepted UUM’s claims for utility arrears and repair costs, finding that Magna Hartamas had failed to challenge the accuracy of meter readings and had not properly maintained the mall before handing it over.

In a separate suit, Magna Hartamas sought RM7.7 million in damages, claiming UUM was unjustly enriched after taking over a mall financed by the company.

However, the court dismissed the counterclaim, holding that UUM had acted within its contractual rights when it terminated the agreements and retook possession of the property.

It declared both agreements validly terminated and confirmed UUM’s right to take over and manage the mall from October 2021.

Lawyers Kanesh Sundrum and Elavarasi Manokaran represented UUM, while counsel Tengku Hezrul Tengku Abdul, Saidina Khatijah Zaharah Khairulnisak Noor and Zamir Aflah Mohd acted for the company. - FMT