Lui & Bhullar’s Housing Development Miniseries Episode 2
By:
Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh@luibhullar.com]
INTRODUCTION
On 06.06.2021, the High Court vide a Judgment delivered by Ahmad Murad Abdul Aziz JC in Chin Yongqin v Prosper Plus Industry Sdn Bhd [2021] MLJU 1104 (“Chin Yongqin”) held, amongst others, as follows:
(a) The Federal Court in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan [2020] 1 MLJ 281 (“Ang Ming Lee”) held that Sub-regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 (“HDR”) which empowered the Controller of Housing to grant extension of time (“EOT”) was ultra vires the Housing Development (Control and Licensing) Act 1966 (“HDA”);
(b) As EOTs are given under an invalid regulation being Sub-regulation 11(3) of the HDR, the EOTs are invalid;
(c) The fact that homebuyers did not object to the amendment at Clauses 25(1) and 27(1) of the statutory Sale and Purchase Agreement (“SPA”), in this case from 36-months to 48-months, is immaterial as the EOT is invalid. The original statutory 36-months prevails;
(d) The Federal Court in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor and other appeals [2021] 2 MLJ 60 (“PJD Regency”) held that the calculation of liquidated damages (“LAD”) begins from the date of payment of deposit / booking fee / initial fee / expression; and
(e) As the lower courts are bound by the decision of the Federal Court, homebuyers are entitled to claim LAD from the date of payment of deposit / booking fee / initial fee / expression.
BRIEF FACTS OF CHIN YONGQIN
The Plaintiff purchased a unit at an apartment for a price of RM645,800.00.
The Plaintiff had paid deposit / booking fee on 27.04.2014 and had executed the SPA which was dated 01.12.2014.
Clauses 25(1) and 27(1) were amended from 36-months to 48-months.
Accordingly, the Plaintiff filed a claim for LAD in the sum of RM93,419.83 for a total delay of 440-days in delivering the property.
The Defendant argued, amongst others, as follows:
(a) that the Defendant had obtained an approval from the Ministry of Urban Wellbeing, Housing and Local Government (“MOH”) for an EOT for delivery of VP of the property and completion of common properties from 36-months to 48-months; and
(b) that the Plaintiff is estopped from claiming LAD as the Plaintiff did not object to the amendments in Clauses 25(1) and 27(1) when the Plaintiff collected the SPA and / or collected the keys to the unit.
DECISION OF THE COURT
In relation to the EOT obtained by the Defendant from MOH, the learned Judicial Commissioner referred to the decision of the Federal Court in Ang Ming Lee. The learned Chief Justice in Ang Ming Lee stated as follows:
“We consequently hold that reg. 11(3) of the Regulations, conferring power on the Controller to waive and modify the terms and conditions of the contract of sale, is ultra vires the Act.”
Accordingly, as the EOT was given under an invalid regulation, it follows that the extension itself is invalid.
The learned Judicial Commissioner further referred to the High Court decision in Kok Chay Har & Ors v BH Realty Sdn Bhd [2021] MLJU 402 (“Kok Chay Har”) wherein Judicial Commissioner Quay Chew Soon stated as follows:
“Ang Ming Lee has already determined the time extensions to be illegal and void ab initio. As such, there is nothing to challenge.”
On the issue wherein the Plaintiff did not object to the “amendment from 36-months to 48-months”, the Court found it was immaterial since the amendment is invalid and the original 36-months was applicable.
In relation to whether the calculation of LAD begins from the date of payment of booking fee / deposit or date of the SPA, the learned Judicial Commissioner, put simply, referred to the Federal Court decision in PJD Regency wherein it was held as follows:
“Where there is a delay in the delivery of vacant possession by a developer to the purchaser in respect of Schedule Contracts under Regulation 11(1) of the HDR enacted pursuant to Section 24 of the HDA, the date for calculation of LAD begins from the date of payment of deposit / booking fee / initial fee / expression by the purchaser of his written intention to purchase and not from the date of the sale and purchase agreement literally.”
The Court further stated that lower courts, i.e. the Magistrates Court, Sessions Court, High Court and Court of Appeal, are bound by the decision of the Federal Court. Accordingly, the Plaintiff is entitled to claim LAD calculated from the date the Plaintiff paid the deposit / booking fee as pleaded in his Statement of Claim.
CONCLUSION
A major takeaway from the decision of Chin Yongqin is that the lower courts are bound by the decision of the Federal Court. Following other decisions of the High Court decided in 2021 such as Kok Chay Har, Lam Su See v Prema Bonanza Sdn Bhd [2021] MLJU 713, Leong Keng Chiang v Prema Bonanza Sdn Bhd [2021] MLJU 714, it becomes clear that the decision of Ang Ming Lee and PJD Regency are sacrosanct and must prevail.
EPILOUGE
If you realize that your SPA does not conform to the statutory 36-month completion period and / or that you had made booking fee payment to purchase your property, feel free to use Lui & Bhullar’s LAD calculator at https://www.luibhullar.com/ladcalculator
The LAD calculator will assist you in calculating your rightful LAD claim.
Alternatively, do get in touch with us at admin@luibhullar.com for any queries regarding this Write-Up.
Image by StockSnap from Pixabay
留言