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IS THE DOCTRINE OF PROSPECTIVE OVERRULING APPLICABLE TO THE DECISION OF ANG MING LEE?

By:

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




INTRODUCTION

On 20.03.2020, the High Court vide a Judgment delivered by Wong Kian Kheong J in Alvin Leong Wai Kuan & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Ors And Other Application [2020] 6 CLJ 55 (“Alvin Leong”) held that the Federal Court in Ang Ming Lee had not expressly ruled that its decision could only have prospective effect and in accordance to the general rule (written judgments having retrospective effect), the judgment of Ang Ming Lee has retrospective effect to the three applications before the High Court. The High Court further noted that there were no exceptional circumstances for the doctrine of prospective overruling to apply to the decision in Ang Ming Lee.


In Alvin Leong, the Applicants had entered into Sale and Purchase Agreements with the Developer wherein the Developer shall deliver vacant possession of the purchased parcels (service apartments) within 42 calendar months from the date of the Sale and Purchase Agreements. Subsequently, the Developer applied for an extension to 59 months (in accordance to Sub-Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989. The Controller of Housing, however, extended the period to 54 months. The Developer, then, appealed to the Minister of Housing and Local Government under Sub-Regulation 12 of the Housing Development (Control and Licensing) Regulations 1989 and the said Minister extended the said period to 59 months. Accordingly, one of the six issues that arose before the High Court was whether the Federal Court judgment of Ang Ming Lee had retrospective or prospective effect.


On 26.11.2019, the Federal Court (Malaysia’s apex court) vide a Judgment delivered by Tengku Maimun Tuan Mat CJ in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals [2020] 1 CLJ 162 held that the Controller of Housing had no power to waive or modify any provision of the Schedule H prescribed Sale and Purchase Agreement under the Housing Development (Control and Licensing) Regulation 1989 as Section 24 of the Housing Development (Control and Licensing) Act 1966 does not confer power to the Minister to make regulations for the purpose of delegating the power to the Controller waive or modify the said prescribed Sale and Purchase Agreement. Accordingly, the Sub-Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989, conferring power on the Controller of Housing to waive and modify the terms and conditions of the contract of sale is ultra vires the Housing Development (Control and Licensing) Act 1966.


In Ang Ming Lee, the Applicants and the Developer entered into Sale and Purchase Agreements wherein the Developer shall deliver vacant possession of the purchased parcels (condominium units) within 36 calendar months from the date of the Sale and Purchase Agreements. The Developer applied for an extensionunderSub-Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 of the said period but the application was rejected. The Developer appealed to the Minister of Urban Wellbeing, Housing and Local Government under Sub-Regulation 12 of the Housing Development (Control and Licensing) Regulations 1989 and the said Minister granted an extension of 12 months increasing the said period to 48 months. Accordingly, one of the three Questions of Law before the Federal Court was whether Sub-Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 is ultra vires the Housing Development (Control and Licensing) Act 1966.


The decision of Alvin Leong will enable homebuyers to claim further Liquidated Ascertained Damages in accordance to the 24-month time period Schedule G Sale and Purchase Agreement and 36-month time period Schedule H Sale and Purchase Agreement. Further, the decision of Alvin Leong also meant that Developers were being punished for acts that were completely legal under the Housing Development (Control and Licensing) Act 1966 and Housing Development (Control and Licensing) Regulation 1989, at that point of time and prior to the decision of Ang Ming Lee.


Accordingly, this Write-Up aims to explore whether does the doctrine of prospective overruling apply to the decision of the Federal Court in Ang Ming Lee.


DOCTRINE OF PROSPECTIVE OVERRULING

In Abillah Labo Khan v PP [2002] 3 CLJ 521, Gopal Sri Ram JCA (as he then was) stated that it is a fundamental principle of adjudicative jurisprudence that all judgments of a court are retrospective in effect. The Federal Court in PP v Mohd Radzi Abu Bakar [2006] 1 CLJ 457 held that a decision of a court is retrospective in effect unless a specific direction of prospectivity is expressed.


It is through the endorsement of the Supreme Court (now Federal Court) in PP v Dato’ Yap Peng [1987] CLJ Rep 284 that this doctrine of prospective overruling was acclimatized into Malaysia’s adjudicative jurisprudence. Effectively, prospective overruling is where a court judgment will only have prospective effect.


The Supreme Court in PP v Dato’ Yap Peng [1987] CLJ Rep 284 referred to the decision of the Supreme Court of the United States of America in Linkletter v Walker [1965] 381 US 618 where the doctrine of prospective overruling created as a practical solution to alleviate inconveniences which would result from decision declaring a law to be unconstitutional. The doctrine of prospective overruling also applied in India through the Supreme Court of India’s decision in I.C.Golak Nath v. State of Punjab & Anor. [1967] AIR SC 1643 and in England through the implication in the Practice Statement Judicial Precedent [1966] 1 WLR 1234 and the English Court of Appeal decision of Choice Investments Ltd. v Jeromnimon [1981] 2 WLR 80. The Court of Justice of the European Communities in Defrenne v. Sabena [1981] 1 All ER 122 applied the doctrine of prospective overruling predicated on conditions of legal certainty which required the Court, as an exceptional measure, to declare the law for the future only.


Accordingly, the doctrine of prospective overruling was expressly applied by the Federal Court having declared Section 418A of the Criminal Procedure Code to be unconstitutional and void as being an infringement of the provisions of Article 121(1) of the Federal Constitution in PP v Dato’ Yap Peng [1987] CLJ Rep 284.


The Court of Appeal in Yugarajan Letchimanasamy & Anor v PP & Another Appeal [2020] 7 CLJ 372 held that the Federal Court in Alma Nudo Atenza v. PP & Another Appeal [2019] 5 CLJ 780 held that Section 37A of the Dangerous Drugs Act 1952 was unconstitutional having violated Article 5(1) read with Article 8(1) of the Federal Constitution. The Court of Appeal went on to state that the Federal Court did not expressly state that its decision applied prospectively thus applies retrospectively too.


The Federal Court in Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat & Another Case [2017] 5 CLJ 526 expressly stated as follows having declared Section 40D of the Land Acquisition Act 1960 to be unconstitutional:

“[126] As regards the present s. 40D of the Act, since we have declared it to be unconstitutional, our decision is to have prospective effect. The doctrine of prospective overruling will apply here so as not to give retrospective effect to the declaration made.”


In Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 7 CLJ 584, the Federal Court expressly stated “this judgment only applies to this appeal and to future cases and should not be utilised to set aside or review past decisions involving fraud in civil claims”. In Indira Gandhi Mutho v Pengarah Jabatan Agama Islam Perak & Ors And Other Appeals [2018] 3 CLJ 145, the Federal Court expressly stated that:

[181] For the avoidance of any doubts, our decision in these appeals is to have prospective effect. The doctrine of prospective overruling will apply here so as not to give retrospective effect to decisions of the courts which had already taken place prior to the date of this judgment.

DECISION OF ALVIN LEONG

In Alvin Leong, Wong Kian Kheong J was of the view that the general rule is that a written judgment has retrospective effect and such general rule was demonstrated by the House of Lords in Birmingham Corporation v. West Midland Baptist (Trust) Association (Inc) [1969] 3 All ER 172 as follows:

“We cannot say that the law was one thing yesterday but is to be something different tomorrow. If we decide that the rule as to the date of the notice to treat is wrong we must decide that it always has been wrong, and that would mean that in many completed transactions owners have received too little compensation. But that often happens when an existing decision is reversed.”


Wong Kian Kheong J then stated that there were to exceptions to the general rule as follows:

(a) Referring to the Federal Court decision of PP v Dato’ Yap Peng [1987] CLJ Rep 284, prospective effect was given to the decision of declaring Section 418A of the Criminal Procedure Court unconstitutional. This exception applied to ensure convictions and acquittals prior to the decision will not be affected. (The first exception)


(b) The Court may decide in exceptional circumstances that its decision regarding the validity or effect of a provision of written law or a certain position at common law can only have prospective effect. The Federal Court decision of Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 7 CLJ 584 was referred to. (The second exception)


Wong Kian Kheong J referred to both exceptions as the formulation of the doctrine of prospective overruling and stated that such doctrine could only be applied in exceptional circumstances. The House of Lords decision in Re Spectrum Plus Ltd; National Westminster Bank Plc v. Spectrum Plus Ltd & Ors [2005] 4 All ER 209 was referred to where Lord Nicholls held that “prospective overruling would be necessary to serve the underlying objective of the courts of this country: to administer justice fairly and in accordance with the law. There could be cases where a decision on an issue of law, whether common law or statute law, was unavoidable but the decision would have such gravely unfair and disruptive consequences for past transactions or happenings that this House would be compelled to depart from the normal principles relating to the retrospective and prospective effect of court decisions.


Concluding, Wong Kian Kheong J held that the Federal Court in Ang Ming Lee had not expressly ruled that its decision can only have prospective effect. Hence, the general rule applies. There were also no exceptional circumstances for the doctrine of prospective overruling to apply to the decision of Ang Ming Lee. Wong Kian Kheong J stated:

“…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.”

CONCLUSION

The Federal Court in Ang Ming Lee did not give an express indication whether its decision applied only prospectively. Accordingly, the position should automatically be that the decision of Ang Ming Lee is retrospective in accordance to the Federal Court in PP v Mohd Radzi Abu Bakar [2006] 1 CLJ 457 where it was held that a decision of a court is retrospective in effect unless a specific direction of prospectivity is expressed.


Another Court ought not to infer whether the doctrine of prospective overruling ought to be applied to the decision of Ang Ming Lee. This is because it should be appreciated that the Federal Court in Ang Ming Lee when declaring that Sub-Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 conferring power on the Controller of Housing to waive and modify the terms and conditions of the contract of sale is ultra vires the Housing Development (Control and Licensing) Act 1966, took cognisance that such decision would have an overwhelming impact on various previous decisions of the Controller of Housing where terms and conditions of the contract of sale were waived and modified. Yet, the Federal Court did not expressly state that the decision is only applicable to prospective cases.


It is no secret that the doctrine of prospective overruling is a judicial tool fashioned to mitigate adverse consequence as stated by Lord Nicholls in Re Spectrum Plus Ltd; National Westminster Bank Plc v. Spectrum Plus Ltd & Ors [2005] 4 All ER 209.


As the Federal Court in Ang Ming Lee declined to invoke the doctrine of prospective overruling and the only logical conclusion that can be made, it is respectfully, submitted is that it must be assumed that the Federal Court in Ang Ming Lee found that its decision need not mitigate any adverse consequence and as such allowed Ang Ming Lee to be applied retrospectively.



Image by Gerd Altmann from Pixabay

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