PUTRAJAYA: Homebuyers cannot sue for damages against developers for properties that received extensions of time (EOT) before 2020.
On this ground, the Federal Court allowed appeals by two developers to stop claims for liquidated ascertained damages (LAD) from homebuyers over late delivery of vacant possession.
The judgment yesterday, delivered by a five-member panel led by Court of Appeal president Justice Abang Iskandar Abang Hashim, decided that the Federal Court’s 2020 decision in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan should be applied prospectively and not retrospectively.
Citing Regulation 11(3) of the Housing Development Regulations (HDR) 1989, the court ruled that the Housing and Local Government Minister had no power to delegate to the Controller of Housing the authority to grant EOT to a developer for completing units in a housing development.
In the case yesterday, two developers – Prema Bonanza Sdn Bhd and Sri Damansara Sdn Bhd – were sued by homebuyers for delivering vacant possession of the units more than 36 months from the specified time frame of between 42 and 52 months following the EOT granted by the Controller of Housing to complete the housing project.
Federal Court judge Justice Hasnah Mohammed Hashim, who delivered the judgment, said at the time the EOT was granted, Regulation 11(3) of the HDR 1989, was valid and the terms of the Sale and Purchase Agreement (SPA) were based on the approved extension as required by law.
The other judges on the Bench were Federal Court judges Justices Zabariah Mohd Yusof, Harmindar Singh Dhaliwal and Abdul Karim Abdul Jalil, Bernama reported.
Justice Hasnah said parties in the cases before the court had accepted the terms of the SPA and as such, were bound by the terms of the contract.
She said the law must be given full force and effect until declared invalid.
If the Ang Ming Lee case were to have a retrospective effect, it would result in great injustice and devastating consequences for the housing industry, she said.
She added that homebuyers could not use the decision in Ang Ming Lee’s case as a “carte blanche” to make financial gain against developers that had obtained EOT.
Justice Hasnah said the developers complied with the provisions of the law at that time and they had not acted in any way to the detriment of the homebuyers.
The court delivered its decision in three cases namely Obata-Ambak Holdings Sdn Bhd vs Prema Bonanza Sdn Bhd, Prema Bonanza Sdn Bhd vs KN Vignesh Naidu and Sri Damansara Sdn Bhd vs Housing Tribunal, Fong Soo Ken and Yoa Kian How.
Prema Bonanza is the developer of the housing project known as The Sentral Residences, located near KL Sentral, while Sri Damansara is the developer of the Foresta Damansara condominium near Kota Damansara, Selangor.
In Obata-Ambak Holding’s case, Justice Hasnah held that Obata-Ambak was not entitled to make a LAD claim from developers as its claim was filed out of time.
She said a claim for LAD must be filed within six years of the SPA agreement.
Lawyers Lai Chee Hoe and Dhirene Rene Norendra represented Prema Bonanza and Sri Damansara, respectively, while lawyer Datuk Low Joo Hean represented Obata-Ambak and Datuk KL Wong for Vignesh Naidu, the Housing Tribunal, Fong and Yoa.
Senior federal counsel Liew Horng Bin appeared for the Attorney General who is acting as amicus curiae.
