No Time is a Reasonable Time

Reasonable Time  

In the event that the contract is silent on time, a party must perform his contractual obligations within a reasonable time. Such concept is clearly provided under our Malaysian Contracts Act 1950 (“CA 1950”). 

Section 47 of CA 1950, stipulates that: -  

“Where, by the contract, a promisor is to perform his promise without application by the promisee, and no time for performance is specified, the engagement must be performed within a  reasonable time.  

Explanation - The question “what is a reasonable time” is, in each  particular case, a question of fact.”  

The aforementioned suggests that if parties to a contract or agreement have not fixed a particular timeframe within which things must happen, the law may apply the concept of 'reasonable time'. However, what constitutes ‘reasonable time’ is a question of fact and is dependent on the circumstances. The case of Macon Works & Trading Sdn Bhd v Phang Hon Chin & Anor[1] emphasised that what constitutes ‘reasonable time’ is a question of fact and depends on the circumstances that actually exist, and on the nature of the business. For the purpose of this discussion, what amounts to a reasonable time in land matters, will be further elaborated.  

In the Court of Appeal case of MLGH (Sabah) Sdn Bhd & Anor v. Rainbow Bay Sdn Bhd & Another Appeals[2], there was no time period in the joint venture agreement dated 7 April 1997 (“JVA”) for the land title to be delivered to the developer by the vendor. Hence, it must be delivered within a reasonable time. In such case, the developer has on 10 August 2015, issued a notice of termination to the vendor due to its failure to issue the land title to the developer. The Court of Appeal held that the failure of the vendor cannot be said to be a breach of the JVA.  

From the above, there is a period of eighteen (18) years from the date of the JVA and the issuance of notice of termination due to the vendor’s failure to issue the land title to the developer. Despite such period, the Court of Appeal refuse to recognise the same to be a breach, indicating that the vendor’s obligation to issue the land title to the developer, to still subsist.  

Furthermore, the High Court in the case of APT Associates Sdn. Bhd. v Adnan Ishak & Ors[3], ruled that a period of six (6) to seven (7) years from the dates of the sale and purchase agreements for the purchasers to demand completion of the agreements, is unreasonable. The sale and purchase agreements that were executed in 2000 and 2001, did not provide the completion date for the conditions to be met by the vendor. Thus, the High Court had addressed the issue on whether more than a reasonable time had passed for the conditions to be fulfilled by the vendors, to which Section 47 CA 1950 was referred to.  

The High Court held that a period of six (6) to seven (7) years from the dates of the sale and purchase agreements for the purchasers to now demand completion, is unreasonable. The purchaser has no reason nor rationale to fast-forward the completion of the agreement in 2007. By virtue of APT Associates Sdn. Bhd. v Adnan Ishak & Ors, it is clear that demanding to accelerate the completion of the sale and purchase agreements dated 2000 and 2001, to be completed in 2007, is an unreasonable time.  

In respect of the above authorities, in the event that a time for performance is not specified in a contract, Section 47 of CA 1950 provides that the party must perform its obligation within a reasonable time, which is a question of fact. In view of the cases cited above, a reasonable time for parties to fulfil its obligations under a contract relating to land matters, can be said to be more than six (6) years and shall vary from one case to another.  

Time at Large 

Time is said to be at large where a contractor is prevented from completing the works by the time specified in the contract by an act of the employer or an act for which the employer is responsible under the contract (such as a breach of contract, but which does not have to extend to ordering additional or varied work)[4].  

Due to the above circumstance, the contractor is no longer bound by the contract provision that it has to complete the works by a certain date or extended date. The obligation of the contractor is now to complete the works within a ‘reasonable time’.  

The question of what duration of time is reasonable is one of fact, since all relevant factors and circumstances should be considered and objectively assessed. In the case of Thamesa Designs Sdn Bhd & Ors v Kuching Hotels Sdn Bhd,[5] the employer had delayed in handing over the site to the contractor, which led to the delay of the latter to complete the works. Due to the employer’s omission to give possession of the site in time, the time for completion becomes at large. It was ruled that once the time for completion becomes ‘at large’, the contractor’s obligation is then to complete the works ‘within a reasonable time’. Additionally, in the High Court case of RC Asia Engineering Sdn Bhd v Lion Pacific Sdn Bhd[6], the works ought to be completed by the sub-contractor by 15 August 2016. However, due to the delay of the employer, the time was ‘at large’. In such instances, it was held that the works must be completed within a reasonable time, which is a question of fact. The High Court further held a reasonable time should be assessed by a just and equitable common-sense approach that should be permissible and adequate.  

In conclusion when time is at large, the law perceive that a reasonable time must be given to the contractor to complete the works. From the cases cited above, the courts have emphasised that what amounts to reasonable time is a question of fact. The circumstances of the case must be assessed through a just and equitable common-sense approach in order to determine reasonable time.

[1] [1976] 2 MLJ 177

[2] [2023] 9 CLJ 847

[3] [2016] 4 CLJ 277

[4] ‘A. Time generally’, Halsbury's Laws of Malaysia - Building and Construction, vol. 5, p.3.

[5] [1993] 3 MLJ 25

[6] [2021] MLJU 1796