Lui & Bhullar’s Housing Development Miniseries Episode 4
By:
Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh@luibhullar.com]
INTRODUCTION
In PJD Regency Sdn Bhd v Lee Kok Seng & Ors [2022] MLJU 2282 (“Lee Kok Seng”), the Court held as follows:-
1. That a claim for LAD that arises from the Federal Court decision in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor Dan Other Appeals [2020] 1 MLJ 281 (“Ang Ming Lee”) can be initiated by a writ action;
2. That a claim for LAD that arises from the Federal Court decision in Ang Ming Lee does not require the joinder of parties that were not parties to the statutory contract of sale;
3. That the cause of action for LAD accrues only once vacant possession is delivered;
4. That as LAD is a statutory remedy, the principles of estoppel and Section 64 of the Contracts Act 1950 do not apply.
Accordingly, the Appellant’s Appeal against the dismissal of their Striking Out Application in the Sessions Court was dismissed.
BRIEF FACTS OF LEE KOK SENG
The Plaintiffs were purchasers/homebuyers of units at a housing development known as You Vista. The Defendant was the developer of You Vista.
Before the sale and purchase agreement (“SPAs”) was entered between the Plaintiffs and Defendant, the Plaintiffs made booking fee to the Defendant. Clauses 25 and 27 of the SPAs were amended from the statutory 36-months period to 42-months for the delivery of vacant possession and completion of common facilities.
The Plaintiffs claimed for liquidated damages (“LAD”) based on the 36-months statutory delivery and completion period and to be calculate from the payment of booking fees.
DECISION OF THE COURT
The High Court ruled that there was no reason to overrule the decision of the Sessions Court in dismissing the Defendant’s Striking Out Application.
The four main issues raised by the Defendant was as follows:-
(a) Whether the Plaintiffs had filed the action using the correct mode;
(b) Whether the Plaintiffs failed to name necessary parties;
(c) Whether the Plaintiffs’ claim was barred by limitation; and
(d) Whether the principle of estoppel and Section 64 of the Contracts Act 1950 applies.
In relation to whether the Plaintiffs had filed the action using the correct mode, the Court held that the Federal Court decision in Ang Ming Lee stated that the Housing Controller has no power to give extensions of time (“EOT”) to developers. As the Federal Court had ruled on the nullity of EOTs, the Plaintiffs are able to file their claim as a writ action. It was immaterial whether the EOT was given prior to the signing of the SPAs.
In relation to whether the Plaintiffs failed to name necessary parties in their claim, the Court held that doctrine of privity of contract applied and only parties to the said statutory contract have rights and obligations therein. Accordingly, there was no necessity to name or join parties that are not parties to the contract.
In relation to whether the Plaintiffs’ claim was barred by limitation, the Court held that the Plaintiffs’ cause of action to claim LAD only accrued once vacant possession was taken and common facilities were completed. The Court was guided by the Court of Appeal in overruling the High Court decision in Michael Erroll Hyde lwn Prema Bonanza Sdn Bhd dan lain-lain kes [2021] 1 MLJU 1339.
In relation to whether the principle of estoppel and Section 64 of the Contracts Act 1950 applies, the Court held that specific provisions of law supersedes general provisions of law such as the Contracts Act 1950 and that LAD is a statutory remedy afforded by Schedule H of the Housing Development (Control and Licensing) Regulations 1989 (“HDR”).
CONCLUSION
The principles of law flowing from the Federal Court in Ang Ming Lee ought to prevail. Ang Ming Lee held that the Housing Controller does not have the power to give any EOTs. Accordingly, purchasers are able to initiate LAD claim premised on the said Federal Court decision.
Messrs Lui & Bhullar represented the Respondents / Plaintiffs. Should you have any query regarding this Write-Up, do get in touch with Mr Harneshpal at harnesh@luibhullar.com
Image by Pete Linforth from Pixabay
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