Apex court reserves judgment in house buyers vs developer case

  • Nation
  • Tuesday, 14 May 2019

PUTRAJAYA: The Federal Court has reserved judgment in a case on the granting of Extension of Time (EOT) for property development projects.

Chief Justice Tengku Maimun Tuan Mat, who led a five-member panel, said the court would reserve its decision to an unspecified date, after hearing arguments by house buyers and developer BHL Construction Sdn Bhd.

The other panel members were Justice Azahar Mohamed, Justice Alizatul Khair Osman Khairuddin, Justice Idrus Harun and Justice Nallini Pathmanathan.

The parties argued on five questions of law.

The house buyers posed the following questions:

> Whether the Housing Controller has the power to waive or modify any provision in the Schedule H contract of sale as prescribed by the minister under the Housing Development (Control & Licensing) Act 1966;

> Whether Section 24 of the Act confers power on the minister to make regulations for the purpose to delegate the power the Schedule H contract of sale to the Housing Controller;


> Whether Regulation 11(3) of the Housing Development (Control & Licensing) Regulations 1989 is ultra vires the Act.

“Regulation 11(3) gives power to the controller to grant this extension of time. So we are saying that the controller cannot be given this power because it should be exercisable by the minister," said Datuk Andy Wong Kok Leong, who acted for the purchasers.

“Minister prescribes the contract of sale. This is a statutory contract. How can the controller modify the terms? That’s why we are saying it cannot be done.

“Our point is this regulation is ultra vires,” he added.

The developer, represented by George Varughese, posed two questions:

> Whether the minister could delegate his duties (signing of the letter granting the extension of time) to an officer in the then Urban Wellbeing, Housing and Local Government Ministry; and

> Whether the minister is obliged to afford the purchasers with a hearing prior to the minister granting the EOT, albeit there is no such provision or requirement in the Act or the Regulations.

Datuk Roger Tan, who held a watching brief for the Malaysian Bar, said thousands of prescribed sale and purchase agreements were executed by purchasers every year and that there would be modifications.

"Apart from modifying the completion date, it could also include modifying the schedules of payments to be more amenable to purchasers," he said.

Tan said it would be more expedient for such modifications to be referred to the controller of housing as the minister had an implied authority to delegate his powers to the controller.

He also submitted that the Bar agreed with the purchasers’ argument that the minister’s decision to allow the appeal from the developer was invalid.

“The reason is because the letter signed by his officer did not comply with Section 17 of the Delegation Of Powers Act 1956," said Tan.

On March 30 last year, the Court of Appeal in affirming a High Court judgment, ruled that the then Urban Wellbeing, Housing and Local Government Minister should give house buyers the opportunity to be heard before the ministry gave developers the EOT facility to complete housing projects.

The High Court had on Feb 27, 2017, allowed a judicial review application by the house buyers to challenge Regulation 11(3) and also the EOT, issued on Nov 17, 2015.

It ruled that Regulation 11(3) was ultra vires the Act and that the controller had no power to waive or modify the contract of sale between purchasers and the developer.

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