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PURCHASERS MUST BE GIVEN RIGHT TO BE HEARD UNDER THE COVID ACT

By

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

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



INTRODUCTION


In the recent decision, Ng Kong Onn & 170 Others v Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor [Judicial Review No.: WA-25-434-07/2022], purchasers of parcels in a residential project known as Aera Servis Residensi @ Area applied for the following orders:-

 

(a)                    An order of certiorari to quash an approval letter by the Minister dated 11.04.2022 exempting 153 days (“the said exemption”) for the calculation of the date for delivery of vacant possession under the respective sales and purchase agreement;

 

(b)                    A declaration that the said exemption is null and void being ultra vires Section 38C of the COVID Act.

 

GROUNDS FOR JUDICIAL REVIEW


The purchasers forwarded the following grounds:-

 

(a)                    The Developer filed the application for the said exemption after the time period had lapsed;

 

(b)                    The purchasers were not given a right to be heard;

 

(c)                    The Minister took into account irrelevant factors;

 

(d)                    The Minister did not consider relevant factors; and

 

(e)                    The Minister did not give reasons for his decision.

 

DECISION OF THE COURT


The Court, firstly, considered Section 38C of the COVID Act.

 

Section 38C(1) of the COVID Act states as follows:-

 

“(1) In relation to a housing development, notwithstanding any agreement entered into between a developer and a purchaser, the developer may apply to the Minister for any period from 1 January 2021 to 31 December 2021 to be excluded from the calculation of the time for delivery of vacant possession of a housing accommodation or completion of common facilities, as the case may be, in the housing development.”

 

Section 38C(2) of the COVID Act states only one reason acceptable for the Minister to grant an exemption, as follows:-

 

“if the Minister is satisfied that due to measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 to control or prevent the spread of COVID-19, the developer was unable to deliver vacant possession of a housing accommodation or complete the common facilities in accordance with the agreement.”

 

The words are plain, clear and unambiguous.

 

However, there is a condition that must be satisfied before such application can be considered and it is found under Section 38C(3) COVID Act wherein the application must not be made after the expiry of the time for delivery of vacant possession or the completion of the common facilities specified under the sale and purchase agreement, as follows:-

 

“The Minister shall not consider an application under subsection (1) if the application is made after the expiry of the time for delivery of vacant possession or the completion of common facilities specified under the agreement.”

 

The words “shall not consider an application” are mandatory. The plain meaning of the words admits no exception. The provision is not ambiguous and certainly does not give rise to any other interpretation. It is trite that the duty of the Court is limited to interpreting the words used by the legislature and to give effect to the words used.

 

The last date for the developer to deliver vacant possession was 26.12.2021 but the application was only made on 24.01.2022. Therefore, the said exemption given after the period of expiry of the time for delivery of vacant possession or the completion of the common facilities specified under the sale and purchase agreement, would be illegal and ultra vires Section 38C of the COVID Act.

 

Second, the Court held that the Minister ought to have given the purchasers the right to comment on the said exemption application. This is notwithstanding that the COVID Act does not expressly provide for such a right to be heard. It is trite and established law that there is no necessity for a statute to expressly provide for such a right to be heard as found in the landmark decision in Ketua Pengarah Kastam v Ho Kwan Seng [1977] 2 MLJ 152 as well as the decision in Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor v Ang Ming Lee & Ors and other appeals [2018] 4 MLJ 545.

 

It is trite that the purpose of the scheduled contracts was to protect the interest of the purchasers and the decision of the Minister has the effect of depriving the purchasers of their right to claim for liquidated damages. Thus, the failure of the Minister to afford such right to be heard amounts to procedural impropriety.

 

Ultimately, the Court granted the orders sought by the purchasers.

 

CONCLUSION


This decision is groundbreaking as it makes it clear that any exemption granted to the developer under the COVID Act can be set aside if the purchasers were not given a right to be heard.

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