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Case Update: Federal Court fulfils Housing Development (Control And Licensing) Act 1966’s social legislation's purpose

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LIQUIDATED DAMAGES
Calculation of liquidated damages (“LAD”) to be paid by housing developers in the late delivery of vacant possession – Practise of housing developers to require the payment of booking fees – Whether the date for calculation of LAD begins from the date of payment of deposit/booking fee/initial fee/expression by purchase of his written intention to purchase; or from the date of sale and purchase agreement – Housing Development (Control and Licensing) Act 1966 (“HDA”)

PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor and other appeals
[2021] MLJU 41, Federal Court
- see the grounds of judgment here

Facts There are seven appeals comprising three sets of different cases stemmed from applications for judicial review filed in the High Court at Kuala Lumpur and Malacca. Two appeals were filed by PJD Regency Sdn Bhd, the developer of a project known as ‘You Vista’ in Cheras. The 1st respondent in both appeals is the statutory housing tribunal (‘Housing Tribunal’) constituted under section 16B of the HAD. The 2nd respondent in both appeals is the purchasers of certain units in that development project (“PJD Regency Cases”). Another three appeals were filed by the purchasers of a project known as ‘Taman Paya Rumput Perdana Fasa 2’. The common respondent is the developer of the project, GJH Avenue Sdn Bhd (“GJH Avenue Cases”). The remaining two appeals were filed by the developer Sri Damansara Sdn Bhd in relation to a project known as ‘Foresta Damansara’. The respondents in both the appeals are the purchasers (“Sri Damansara Cases”). All of these appeals were heard together as they essentially raised the same point of law.

Issue The main issue in this case is whether the date for calculation of LAD begins from: a) The date of payment of deposit/booking fee/initial fee/expression by purchase of his written intention to purchase; or b) From the date of sale and purchase agreement.

Held In dismissing the appeal, the Federal Court affirmed two Supreme Court cases which are Ho See Sen & Anor v Public Bank Berhad & Anor[1] and Faber Union Sdn Bdh v Chew Nyat Shong & Anor[2], which held that the date of calculation of LAD begins from the date the booking fee was paid. The Court further held that the interpretation of when the calculation of LAD should begin is supported by the nature of the HDA and the Housing Development (Control and Licensing) Regulations 1989 being a social legislation. Social legislation is laws passed by the legislature to regulate the relationship between a weaker class of persons and a stronger class of persons. The Court in interpreting social legislation held that where the provision is ambiguous, Court would resort to purposive rule instead of the literal rule and even where the provision is literally clear or unambiguous, the Court still has the obligation to ensure the interpretation gives maximum protection of the class in whose favour the legislation was enacted, being the purchasers in this case.

ZUL RAFIQUE & partners
{15 February 2021}
 
[1] [1988] 2 MLJ 170
[2] [1955] 2 MLJ 597

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