Malik is a foreigner who lives in Melbourne. As his wish is to live in Kuala Lumpur after his retirement, he decided to purchase a property from a reputed local developer (the developer). As per usual practice, he signed a Sale and Purchase Agreement (SPA) with the developer whereby he agreed to pay 10% of the total sale price immediately and the remainder of 90% is to be paid progressively against the certificate of completion issued by the architect as the property purchased was still under construction.

To finance the purchase of the property, Malik applied for and was granted a term loan facility of RM800,000 by Rich Bank Bhd (the bank). The loan was provided under the Home Financing Agreement dated 22.04.2016 (the loan agreement). As per the agreement, the bank was obligated to make direct payment on a progressive basis to the developer on behalf of Malik, whenever such sums become due for payment.

On 12.3.2018, the developer sent an invoice No. IV000001234 which contained an architect's certificate dated 28.2.2018 and sought payment of RM50,000. The notice was received by the bank on 13.3.2018 and the due date for payment was 25.03.2018 (Due Date). Eight days after receipt of the invoice, that is, on 20.03.2018, the disbursement department of the bank sent an email requesting its branch to conduct site visit inspection on the property.

Three months after the invoice Due Date, there was no confirmation of any site visit inspection being conducted on the property. The bank's disbursement department sent several other internal emails dated 24.04.2018, 17.05.2018, 29.05.2018, 11.06.2018 and 25.06.2018 to its branch to conduct the site visit. Still, there was no response to any of these emails.

The bank did not notify either the developer or Malik on the need of a site visit inspection as an additional condition to disburse payment on the Invoice. The bank also had never made any request to the developer to extend the invoice Due Date in order for them to conduct the site visit. After about a year from the date of the invoice, the sum remained unpaid and by a notice of termination dated 10.4.2019 sent to Malik, the SPA was terminated by the developer.

Malik now wants to file a claim against the bank for damages suffered resulting from the termination of the SPA. The claim is premised on a breach of contract and/or negligence. He argues that the bank had breached the most fundamental term of the loan agreement which goes to the root of the contract. The

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bank, however, submits that it is protected by clause 10 of the loan agreement which provides the following:

"Notwithstanding anything to the contrary, in no event will the measure of damages payable by the Bank to the Borrower for any loss or damage incurred by the Borrower include, nor will the Bank be liable for, any amounts for loss of income or profit or savings, or any indirect, incidental consequential exemplary punitive or special damages of the Borrower, even if the Bank had been advised of the possibility of such loss or damages in advance, and all such loss and damages are expressly disclaimed."

The effect of this express contractual clause, according to the bank, is that it excludes its liability in respect of loss or damage suffered regardless of the cause of action from which it might arise.

Advise Malik.