The Federal Court on
In arriving at its decision, the Federal Court unanimously affirmed the decisions of the
At the same time, the Federal Court also made two other significant rulings that are relevant to late delivery claims. First, that under a statutory form contract, the date of completion of common facilities is the date of issuance of the certificate of completion and compliance ('CCC') and not the date of issuance of the certificate of practical completion ('CPC'). Second, that the LAD is to be calculated by reference to purchase price stated in the sale and purchase agreement and any rebate granted by the developer to the purchaser on that amount is to be disregarded.
- The period for delivery of vacant possession commences from the date of payment of the deposit/ booking fee/ initial fee/ expression by the purchaser of his written intention to purchase the property and not from the date of the sale and purchase agreement.
- When interpreting social legislation such as the
Housing Development (Control and Licensing) Act 1966 ('HDA 1966') and its subsidiary legislation, the court must give effect to the intention ofParliament and not the parties. Accordingly, the date of the contract cannot be taken to mean the date of the agreement stated in a scheduled contract. - The HDA 1966 and HDR 1989 expressly provide for an absolute prohibition against the collection of booking fees.
- The date of completion of common facilities under a statutory form contract is the date of issuance of the CCC.
- The LAD is to be calculated by reference to purchase price stated in the sale and purchase agreement and any rebate granted by the developer on that amount is to be disregarded.
Brief Facts
The Federal Court heard seven appeals together which arose from three sets of different cases. Two appeals were filed by
Question of Law
The seven appeals essentially raised the same point of law:
"Where there is a delay in the delivery of vacant possession by a developer to the purchaser in respect of Schedule G and/or H type contracts under Regulation 11(1) of HDR 1989 enacted pursuant to Section 24 of the
- the date of payment of deposit/ booking fee/initial fee/expression by purchase (sic) of his written intention to purchase; or
- from the date of the sale and purchase agreement,
having regard to the decisions of the
The developers and purchasers adopted different interpretations to the meaning of the words "from the date of this agreement" contained in clause 24(1) of Schedule G of the HDR 1989 and clause 25 of Schedule H of the HDR 1989 ('Scheduled Contract'). The purchasers on one hand, argued that
Decision of the Federal Court
The Federal Court decided upon a coherent reading of
The Federal Court also discussed the concept of the HDA 1966 and its subsidiary legislation as "social legislation" as the long title of the HDA 1966 provides in no uncertain terms that the legislation exists for the protection of the interest of purchasers. The Federal Court dismissed the developers' contention that a Scheduled Contract must be "read literally and in accordance with the intention of the parties".
"...When it comes to interpreting social legislation, the State having statutorily intervened, the Courts must give effect to the intention of
Further, the Federal Court held that the law is crystal clear that developers are prohibited from collecting booking fees pursuant to Regulation 11(2) of the HDR 1989. As such, the collection of booking fees is illegal. However, as the HDR 1989 is a social legislation to protect the interest of purchasers, the existence of a penal provision does not automatically render the contract void pursuant to section 24 of the Contracts Act 1950. The developers being the stronger party in an illegal transaction will have that illegality construed against them and will have to "bear the full extent of the LAD payable by them".
PJD Regency
In relation to a leave question that was unique to the two appeals in PJD Regency, the Federal Court held that the architect's certification referred to in clause 27(1) of Schedule H and clause 29(1) of Schedule J is the CCC and not the CPC. The apex court agreed with the
On this basis, the Federal Court held that for the purposes of ascertaining the date of the completion of the common facilities, the relevant date is the date of issuance of the CCC.
GJH Avenue
The Federal Court was of the view that the
Sri Damansara
In one of the appeals, the developer posed a leave question as to whether the award of the
The Federal Court dismissed the developer's contention as the sale and purchase agreement was derived from a statutory contract and was "not subject to amendment by the parties". Accordingly, the apex court held that the developer was bound by the terms of the statutory contract which states that the LAD is to be calculated based on the purchase price.
Comments
This Federal Court decision will be welcomed by purchasers of housing accommodation from housing developers. It is significant in three respects in relation to late delivery claims. First, it lays to rest the conflicting decisions by the
Second, the decision clarifies that the date when common facilities are deemed to be completed is the date of issuance of the CCC. Third, the Federal Court has also categorically stated that any rebate on the purchase price granted by the developer to the purchaser is to be disregarded from the calculation of the LAD.
Our previous Alerts on the
Originally published
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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