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“ALVIN LEONG WAS RIGHT – ANG MING LEE IS RETROSPECTIVE!” SAYS KOK CHAY HAR

By:

Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh@luibhullar.com]

Bryan Lui (Co-Managing Partner) [bryanlui@luibhullar.com]

Chandni Anantha Krishnan (Partner) [chandni@luibhullar.com]


INTRODUCTION

On 27.01.2021, the High Court vide a Judgment delivered by Quay Chew Soon JC in Kok Chay Har & Ors v BHL Realty Sdn Bhd [2021] 1 LNS 13 (“Kok Chay Har”) held that the Federal Court decision in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals [2020] 1 CLJ 162 (“Ang Ming Lee”) has retrospective effect.


Quay Chew Soon JC referred to the decision in Alvin Leong Wai Kuan & Ors v. Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Ors and other applications [2020] 6 CLJ 55 (“Alvin Leong”) where the High Court stated that the Federal Court in Ang Ming Lee had not expressly ruled that its decision could only have prospective effect, and hence it had retrospective effect.


On 26.11.2019, the Federal Court in Ang Ming Lee held that the Controller of Housing had no power to waive or modify any provision of the Schedule H prescribed Sale and Purchase Agreement (“SPA”) as Section 24 of the Housing Development (Control and Licensing) Act 1966 (“HDA”) does not confer power to the Minister to make regulations for the purpose of delegating the power to the Controller to waive or modify the said prescribed SPA.


Sub-regulation 11(3) of the the Housing Development (Control and Licensing) Regulations 1989 (“HDR”), conferring power on the Controller of Housing to waive and modify the terms and conditions of the contract of sale is ultra vires the HDA.


DECISION OF KOK CHAY HAR

In Kok Chay Har, fifty-four (54) Purchasers of condominium units purchased vide a SPA in the prescribed Schedule H HDR form, brought an action against the Developer for Liquidated Ascertained Damages (“LAD”) for late delivery of Vacant Possession.


The SPAs were entered into between 08.08.2013 and 19.03.2014. However, the SPAs were modified to a forty-two (42) months period to deliver Vacant Possession as opposed to the standard thirty-six (36) months found in the prescribed Schedule H HDR form.


The Developer stated that it had obtained two (2) extensions from the Controller of Housing vide Letters dated 02.07.2013 and 30.09.2015 whereby the period was extended first to forty-two (42) months and then to forty-eight (48) months.


The Plaintiffs relied on the prescribed Schedule H HDR, Clauses 25 and 27 which state that Vacant Possession ought to be delivered within thirty-six (36) months. Any modification is unlawful as the prescribed Schedule H HDR cannot be changed. The Developer, however, relied on the extensions of time granted by the Controller.


Quay Chew Soon JC held that the only provision giving the Controller of Housing the power to grant any such extensions were declared ultra vires by the Federal Court in Ang Ming Lee.


In accordance with the doctrine of stare decisis, the High Court is bound by the decision of the Federal Court. The High Court held that the Plaintiffs had a reasonable cause of action to claim LAD against the Developer.


Regarding the issue on whether the Federal Court decision in Ang Ming Lee had retrospective effect, Quay Chew Soon JC noted that it is a fundamental principle of all judgments of the Court to have retrospective effect citing the Court of Appeal decision in Abillah Labo Khan v PP [2002] 3 CLJ 521:

“It is a fundamental principle of adjudicative jurisprudence that all judgments of a court are retrospective in effect.”


The only exception to the fundamental rule is if there is a specific direction of prospectivity expressed in the judgment itself. Quay Chew Soon JC cited the Federal Court decision in Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat & Another Case [2017] 5 CLJ 526:

“As a matter of principle, a court judgment is retrospective in effect unless a specific direction of prospectivity is expressed.”


As stated above, reference was also made to the decision in Alvin Leong which ruled that the Federal Court had not expressly ruled that its decision could only have prospective effect, and hence it has retrospective effect. The High Court in Alvin Leong went further to state:

“there were no exceptional circumstances for the doctrine of prospective overruling to apply to the decision in Ang Ming Lee. On the contrary, as held in many cases (including Ang Ming Lee), the object of HDA and HDR is to protect a ‘homebuyer’ (as defined in s. 16A HDA). Accordingly, in line with the purpose of HDA and HDR, it is in the interest of homebuyers for the judgment in Ang Ming Lee to be given retrospective effect.”


Such observation is interesting and noteworthy since the HDA and HDR are social legislation as affirmed by the Federal Court in Ang Ming Lee and the recent decision of PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor And Other Appeals [2021] 2 CLJ 441.


There was also the contention by the Developer that the appropriate mode to challenge the extension of time was vide a Judicial Review. Quay Chew Soon JC, however, held that the Federal Court in Ang Ming Lee had already declared extensions of time to be illegal and void ab initio. As such, there was nothing to challenge. The fact that the Plaintiffs did not challenge the extensions of time by way of judicial review does not make the said extensions legal and valid.


CONCLUSION

The major takeaway from the decision of the High Court in Kok Chay Har is that the decision in Ang Ming Lee has retrospective effect. The Federal Court declined to invoke any specific direction of prospectivity in its judgment in Ang Ming Lee and as such, the fundamental principle of all judgments of the Court to have retrospective effect must be upheld.


It also becomes clear from the decision of the High Court in Kok Chay Har that the only provision in statute giving the Controller of Housing the power to grant any extensions of time has been declared ultra vires by the Federal Court in Ang Ming Lee and accordingly any High Court and Court of Appeal is bound by the said Federal Court decision.


Image by Q K from Pixabay

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