Case Updates

Case Update: Federal Court rules Ang Ming Lee applies prospectively only

Share:

Print
31 July 2024

CONSTRUCTION LAW
Extension of Time - Doctrine of Prospective Overruling - Liquidated Ascertained Damages - Ang Ming Lee - Housing Development (Control and Licensing) Act 1966 - Housing Development (Control and Licensing) Regulations 1989

Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd
Civil Appeal No. 02(i)-70-08/2022(W) | Federal Court
- see the grounds of judgment here

Facts Obata-Ambak Holdings Sdn Bhd (the ‘Appellant’) purchased and owns two condominium units in The Sentral Residences, developed by Prema Bonanza Sdn Bhd (the ‘Respondent’). The project, consisting of two towers of service apartments, was governed by the Housing Development (Control and Licensing) Act 1966 (HDA) and Regulations 1989 (HDR). Due to the project's unique design, the Respondent obtained an extension from the Controller of Housing, modifying the completion period from 36 to 54 months under Regulation 11(3) HDR, two years before executing the SPA with purchasers. The Appellant signed SPAs with this extended timeline. Following the Federal Court’s decision in Ang Ming Lee[1], the Appellant sought, inter alia, declarations that extensions granted under Regulation 11(3) HDR were inconsistent with the decision in Ang Ming Lee. The High Court ruled that developers must adhere to Schedule H, following the Ang Ming Lee precedent. The Appellant's appeal to the Court of Appeal was dismissed, leading to this appeal.

Issue Does the doctrine of prospective overruling and the exceptions set out in Re Spectrum Plus Ltd (in liquidation) [2005] 2 AC 680 ("Spectrum Plus") apply to Malaysian cases where a court’s decision and/or judicial pronouncement would bring disruptive consequences to an industry as a whole?

Held In delivering the judgement on behalf of the Federal Court, YA’ Dato Sri Hasnah binti Dato’ Mohammed Hashim held that if Ang Ming Lee is to have retrospective effect there would be serious ramifications and repercussions to the housing industry in Malaysia in particular, the developers that had placed reliance on the existing law and diligently complied with the laws which were, at that time, valid. The Federal Court was not persuaded with the arguments advanced by learned counsels for the Appellant and held that the exception as enunciated in Re: Spectrum suggested the application prospective overruling is an ideal resolution such that any changes in the law will not affect any causes of action in respect of extension of time and LAD arising prior to Ang Ming Lee. Further, the declaration of ultra vires and invalidity in Ang Ming Lee cannot be interpreted as giving an opportunity to all that have benefited prior to Ang Ming Lee to enjoy further financial gains. Besides that, the Federal Court held that the parties, that is, the developers and the purchasers had relied and accepted the terms of the SPAs where the extended completion period approved by the Controller had been expressly provided. Parties are bound by the terms of the contract and cannot rewrite the terms which they have accepted and from which they have benefitted. In conclusion, the decision in Ang Ming Lee has a prospective effect and will not apply to extensions granted by the Controller before the case of Ang Ming Lee.

Zul Rafique & Partners
{31 July 2024}
[1] [2020] 1 MLJ 281

Please email your details to [email protected] if you would like to subscribe to our Knowledge Centre.

Let's Connect!
➭ LINKEDIN: Zul Rafique & Partners
➭ INSTAGRAM: @zrplaw