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Case Update: Federal Court rules housing controller has no power to grant extension of time to developers

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LAND LAW
Construction – Developer and purchaser – Sale and purchase agreement – Delivery of vacant possession – Extension of time – Whether the Controller has the power to grant extension of time to developers to complete their property development project?

Ang Ming Lee & 34 Ors v Menteri Kesejahteraan Bandar, Perumahan & Kerajaan Tempatan & Anor
[2019] MLJU 1346, Federal Court
- see the grounds of judgment here

Facts By a Sale and Purchase Agreement (‘the SPA’), entered into between the developer and the purchasers, it was agreed that the delivery of vacant possession of the units shall be 36 months from the date of signing of the respective SPAs. The SPAs were made under Schedule H of the Housing Development (Control and Licensing) Regulations 1989 (‘the Regulations’) which provides that if the developer fails to deliver vacant possession within 36 months, the developer shall be liable to pay the purchaser liquidated damages (LAD). The developer applied for an extension of time for the delivery of vacant possession of the units to the purchasers to the Controller of Housing (‘the Controller’), pursuant to regulation 11(3)[1] of the Regulations, but was rejected. Dissatisfied with the decision of the Controller, the developer appealed to the Minister of Urban Wellbeing, Housing and Local Government (‘the Minister’), and it was allowed. The developer thus had 48 months to deliver vacant possession of the condominium units to the purchasers instead of the statutorily prescribed period of 36 months. As a result of the extension of time, the purchasers were unable to claim for the LAD as provided for in the SPAs. Aggrieved, the purchasers filed for judicial review and sought to quash the decision of the Controller/Minister. The High Court allowed the judicial review application and held that the Controller has no power to waive or modify the prescribed contract of sale under regulation 11(3) of the Regulations and further ruled that the said regulation is ultra vires the Housing Development (Control and Licensing) Act 1966 (‘the Act’). The Court of Appeal on the other hand held that the Controller has the power to exercise his discretion as granted under regulation 11(3), to waive or modify the terms and conditions of the contract of sale. Hence, this appeal.

Issues The main issue is whether the Controller has the power to grant extension of time to developers to complete their property development project.

Held The Federal Court held that the Controller has no power to grant extension of time since Regulation 11(3) of the Regulations which confers power on the controller to waive and modify the terms and conditions of the contract of sale between purchasers and the developer was ultra vires the parent statute, the Housing Development (Control and Licensing) Act 1966.
 
[1] Where the Controller is satisfied that owing to special circumstances or hardship or necessity compliance with any of the provisions in the contract of sale is impracticable or unnecessary, he may, by a certificate in writing, waive or modify such provisions: Provided that no such waiver or modification shall be approved if such application is made after the expiry of the time stipulated for the handing over of vacant possession under the contract of sale or after the validity of any extension of time, if any, granted by the Controller.