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CASE COMMENTARY: NG SOOK FOON v MARIMO LAND SDN BHD [2022] MLJU 2061

Lui & Bhullar’s Housing Development Miniseries Episode 5

By:

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


INTRODUCTION

In Ng Sook Foon v Marimo Land Sdn Bhd [2022] MLJU 2061 (“Marimo Land”), six (6) questions of law were posed to the High Court as follows:-


1. Whether the delivery of vacant possession should commence from the date of the payment of booking fee as opposed to the date of the Sale and Purchase Agreement?


2. Whether the Purchasers and the Defendant are bound by the Sale and Purchase agreement wherein the completion period in Clauses 25(1) and Clauses 29(1) has been modified from thirty-six (36) months to forty-eight (48) months via Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 (“HDR”)?


3. Whether the Purchasers can rely on the original Schedule H of the HDR’s thirty-six (36) months completion period to claim for liquidated damages (“LAD”) as against the Defendant?


4. Do the Federal Court decisions in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor Dan Other Appeals [2020] 1 MLJ 281 (“Ang Ming Lee”) and PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor and Other Appeals [2021] 2 MLJ 60 (“PJD Regency”) apply retrospectively?


5. Whether the Defendant is entitled to seek indemnity against the 93rd and 94th Defendants in the Counterclaim for losses, if any?


6. Whether the Defendant is entitled to an order for specific performance against the 93rd and 94thDefendants in the Counterclaim to ratify the validity of the extension of time sought?


Questions 1, 3 and 4 were answered in the affirmative and Questions 2, 5 and 6 were answered in the negative. The Plaintiffs’ claim for LAD amounting about RM3.6 million was granted whereas the Defendant’s Counterclaim was dismissed.


BRIEF FACTS OF MARIMO LAND

The Plaintiffs were purchasers/homebuyers of units at a housing development known as Residensi O’Hako. The Defendant was the developer of Residensi O’Hako. The 93rd and 94th Defendants (in the Counterclaim) was the Ministry of Housing and Local Government and the Controller of Housing.


Before the sale and purchase agreement (“SPAs”) was entered between the Plaintiffs and Defendant, the Defendant had obtained an extension of time (“EOT”) from the Ministry of Housing and Local Government to amend the statutory period of delivery of vacant possession and completion of common facilities from 36-months to 48-months.


The Defendant also via two firms of solicitors received and / or collected booking fee and / or deposit payments for the units intended to be purchased by the Plaintiffs before the SPAs were entered.


The Plaintiffs claimed that the period of delivery of vacant possession and completion of common facilities should be 36-months and the LAD ought to be calculate from the date of payment of booking fee / deposit.


DECISION OF THE COURT


THE FIRST QUESTION - Whether the delivery of vacant possession should commence from the date of the payment of booking fee as opposed to the date of the Sale and Purchase Agreement?


It was not disputed that the Plaintiffs had paid booking fees before the SPAs were signed and was for the purpose of securing the interest of the Plaintiff to purchase a unit. The recipients of the booking fee were acting for the developer in accepting the payments.


The Court was candid and held that the Federal Court in PJD Regency had already answered this question. It ought to commence from the date of payment of booking fee.


THE SECOND QUESTION - Whether the Purchasers and the Defendant are bound by the Sale and Purchase agreement wherein the completion period in Clauses 25(1) and Clauses 29(1) has been modified from thirty-six (36) months to forty-eight (48) months via HDR?


The Court was guided by the Court of Appeal decision in UE E&C Sanjia (M) Sdn Bhd v Lee Jeng Yuh & Anor [2021] 6 MLJ 864 (“Sanjia”) wherein the Court of Appeal held that the Federal Court decision in Ang Ming Lee being retrospective was applicable wherein the Housing Controller had no powers to grant EOTs.


Accordingly, the Defendant could not modify the statutory SPA even with the grant of the EOT. As such, the Plaintiffs and Defendant were not bound by the 48 month period.


THE THIRD QUESTION - Whether the Purchasers can rely on the original Schedule H of the HDR’s thirty-six (36) months completion period to claim for LAD as against the Defendant?


Guided by the legal position in the Federal Court decision in Ang Ming Lee, the Plaintiffs could rely on the original 36 month period.


THE FOURTH QUESTION - Do the Federal Court decisions in Ang Ming Lee and PJD Regency Sdn Bhd apply retrospectively?


Guided by the Court of Appeal decision in Sanjia where the Court held that Ang Ming Lee applies retrospectively, both decision of Ang Ming Lee and PJD Regency has retrospective effect.


THE FIFTH QUESTION - Whether the Defendant is entitled to seek indemnity against the 93rd and 94thDefendants in the Counterclaim for losses, if any? and THE SIXTH QUESTION - Whether the Defendant is entitled to an order for specific performance against the 93rd and 94th Defendants in the Counterclaim to ratify the validity of the extension of time sought?


The Court found that the Counterclaim by the Defendant against the 93rd and 94th Defendants (in the Counter Claim) was out of time as Section 17 of the Housing Development (Control and Licensing) Act 1966 (“HDA”) states that any action against the Government, Minister, Controller ought to be brought within six (6) months of the act and that the 93rd and 94th Defendants could not be faulted for their action at the material time as they genuinely thought it was made bona fide. The 93rd and 94th Defendants were also protected from specific performance under Section 29 of the Government Proceedings Act 1956.


CONCLUSION

This case is one of many cases that was decided in favour of the Purchasers. It is often repeated where a purchaser is correct in his contention of the law, he is entitled to succeed.


Based on the above, it is borne that the Federal Court decisions in PJD Regency and Ang Ming Lee has made it clear that purchasers are able to claim for LAD from the date of payment of booking fee / deposit and based on the statutory 36 months where any booking fee was collected and where any EOT was granted by the Controller of Housing.


Messrs Lui & Bhullar represented the Plaintiffs. Should you have any query regarding this Write-Up, do get in touch with Mr Harneshpal at harnesh@luibhullar.com


Image by maitai16 from Pixabay




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