Just finished reading the grounds of judgment of PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Ng Chee Kuan Civil Appeal No. 01(f)-29-10/2019(W) delivered on January 19, 2021 and immediately the following thoughts came to mind.
This case involved 7 appeals where it was grouped to 3 groups of appeal involving 3 different development projects and heard before the same panel of Federal Court judges.
The developer of all the 3 projects where the housebuyers bought their units of property have failed to deliver vacant possession of the property within the time frame as stipulated in the sale and purchase agreement (“the agreement”).
The agreement stipulates that vacant possession of the property is to be delivered to the housebuyers within 36 or 24 months from the date of agreement (“the completion date”) in accordance with Schedule H or Schedule G prescribed respectively under Housing Developer (Control & Licensing) Regulations 1989.
The problem is when does the completion run from? 36 months from the date when the housebuyer paid the booking fee or 36 months from the date when the sale and purchase agreement was signed?
The housebuyer insisted that the 36 months should run from the date he paid the booking fee, while on the other hand, the developers argued that 36 months should run from the date when the agreement was signed.
The Federal Court ruled in favor of the housebuyers, in that the 36 months should run from the date the housebuyer paid the booking fee, on the grounds of that the Housing Developers (Control & Licensing) Act 1966 is a social legislation which was meant to protect housebuyers and the doctrine of stare decisis following two previous decisions in Hoo See Sen & Anor v Public Bank Berhad (1988) 2 MLJ 170 and Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 2 MLJ 597.
I have come across this social legislation concept ever since handling employment matters that deals with the Industrial Relations Act 1967, another piece of social legislation.
However, question came to mind, what was the reason that there being a gap between the date of payment of booking fee and the date of signing of the agreement? We are talking about the agreement for purchase of property under project development.
I understand that the nature of business of construction of project development is not the same as the business of food and beverage or any other business. In food business, you go in a food court, you order a plate of nasi lemak and make payment at the counter. Upon payment, the vendor will be preparing your nasi lemak and serve it to you accordingly.
The nature of the business of construction is not the same. Construction work may or may not have started when the developer receives booking fees from housebuyers but for some reason, the constructions may be disrupted. Reasons for delay may vary from the developers being stuck with the authorities or a court order. Sadly, the reasons for the gap between the date of payment of booking fee and the date of signing of the agreement was nowhere mentioned in the grounds of judgment in High Court and Federal Court. In practice, some gaps can be as long as 6 months or 1 to 2 years.
If developers have a valid and practical reason for explaining the gap between the date of payment of booking fee and the date of signing of the agreement, they should have a representative before the courts either as an intervener or as an amicus curiae in watching briefs to provide the courts with an authoritative insight representing the developers, notwithstanding the express prohibited of collection of booking fee under the Housing Developers (Control & Licensing) Regulations 1989.
The principle of looking at the objective of social legislation to protect housebuyers must also be balanced with the practicality of doing business. The court’s effort to level the playing field between developers and housebuyers must have the effect of balancing a scale.
Notwithstanding that, whatever is the reason for the delay in signing the agreement, that will if anbe an issue to be settled between developers and the parties / authorities who are causing that delay. As far as the housebuyer is concerned, time has already run from the date when he paid his booking fee or deposit. It is for the developers to sort out any issues that is causing the delay in getting the agreement signed. If the problem involves the law, then push for reform of the law.
Not siding with any sides but just considering from the viewpoint of a housebuyer and a developer.
Penning Perceptions 