1. ) Tan Lai Whatt Sebastian v 1. ) DISTINCTIVE RESOURCES SDN BHD (BA-22NCvC-219-06/2022)

This is a suit filed by a group of 34 purchasers of condominium units (“Parcels”) in a project known as “Iskandar Residences” located on freehold land held under Geran No. 575060 Lot 194142 Mukim Pulai, Daerah Johor Bahru (“Land”) on which the project was developed. The 1st Defendant is the developer and 99-year leaseholder of the Land and the 2nd Defendant is the registered proprietor of the Land. 15/04/2025 10:08:40 BA-22NCvC-219-06/2022 Kand. 127

The Plaintiffs allege that the Defendants did not comply with Regulation 11 of the Housing Development (Control and Licensing) Regulations 1989 (“HDR”) in that they sold the Parcels using sale and purchase agreements (“SPAs”) that deviated from the standard form of agreement in Schedule H of the HDR.

The final remedies sought by the Plaintiffs in this action are summarized as follows:

A declaration that the SPAs are to conform to Schedule H

An order that LAD be paid as quantified

An order that the Defendants transfer freehold title to the Parcels to the Plaintiffs. [4] The Defendants applied to strike out the action on 30-9-2022 and 12-10-2022 respectively. The striking out applications in Enclosures 30 and 35 only came up for hearing before me on 23-1-2025 together with the Plaintiffs’ application for summary judgment and application to transfer proceeding and the 1st Defendant’s application for security for costs. I heard Enclosures 30 and 35 first. Background Facts [5] Iskandar Residences is located in Medini in Johor. The Land was first alienated on 18-3-2010 under Hakmilik Sementara HS(D) 478952 PTD 170706 Mukim Pulai Daerah Johor Bahru and leased to Medini Land Sdn Bhd from 26-6-2013. The 1st Defendant purchased the lease from Medini Land Sdn Bhd and the 1st Defendant’s status as lessee was registered on 1-10-2013. [6] The 99-year lease was extended by a further 30 years vide Certificate for Lease Extension No. 00006 and will expire on 25-6-2142 (“Lease”). [7] According to the 2nd Defendant, Medini is a special development zone in Iskandar, Malaysia that is being developed based on a private lease scheme which allows purchasers to purchase a long-term lease, while the 2nd Defendant retains ownership of the land (“Private Lease Scheme”). [8] By a letter dated 21-9-2011 from the Controller of Housing at the National Housing Department (“JPN”), the Controller declined to consider the 2nd Defendant’s application for approval of proposed variations to the prescribed Schedule H as it was of the view that Regulation 11 of the HDR did not apply to the Private Lease Scheme to sell leases. [9] The JPN letter further stated the following: [10] By letters dated 22-11-2013 and 3-12-2013, the office of the Controller of Housing wrote to the 1st Defendant in response to its letter for exemption from Regulation 11 of the HDR with the following decisions:

22-11-2013 letter

3-12-2013 letter [11] The Defendants understood the above to mean that the developments under the Private Lease Scheme are exempted from the prescriptions under Regulation 11 of the HDR altogether (“Exemption”). [12] The SPAs for the sale of the Parcels at Iskandar Residences thus deviated from the standard Schedule H HDR form of sale and purchase agreement. The key differences relate to:

Private Lease Scheme The inclusion of recitals on the 1st Defendant’s status as a registered lessee, an additional clause 4A by which the 2nd Defendant would allow the Plaintiffs to have a valid and registrable lease over their unit for the remaining tenure of the 99-year lease and the attachment of a “Lease Annexure” setting out the conditions of the lease which details, inter alia, conditions for the extension and the expiration of the lease

Completion Period Amendment to clauses 25 and 27 which provided that vacant possession and completion of the common facilities shall be “within forty-eight (48) calendar months from the date of this Agreement” instead of 36 months (“Completion Period”). [13] The Plaintiffs paid booking deposits for the Parcels they purchased on various dates between 28-5-2013 and 19-7-2014. They signed the SPAs between 19-11-2013 and 19-7-2014 and paid the 10% deposit for their Parcels at that time. Some of the SPAs pre-date the letter dated 3- 12-2013 from the office of the Controller giving the Exemption. [14] Vacant possession of the Parcels was delivered by the 1st Defendant to the Plaintiffs on various dates between 26-2-2018 and 23- 4-2018. Analysis and Findings [15] As far as it may be discerned, the Plaintiffs’ pleaded case is grounded on the invalidity of the clauses of the SPAs on the Private Lease Scheme and the Completion Period. In the Reply, the Plaintiffs pleaded that:

the extension of the Completion Period by the Controller of Housing dated 16-7-2013 is invalid and ultra vires according to Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar,

the Private Lease Scheme under the SPAs is in breach of written laws and that the Exemption is void under the Housing Development (Control and Licensing) Act 1966 (“HDA”) and the HDR. [16] The common grounds for striking out in Enclosures 30 and 35 are time-bar and estoppel and/or acquiescence. In Enclosure 30, the 1st Defendant cited additional grounds that this action constitutes an abuse of process as it is a collateral attack on the decisions of a public authority that exempted the SPAs from compliance with Schedule H of the HDR when the appropriate mode of challenge is by way of judicial review. Completion Period and Claim for LAD [17] As it relates to the Plaintiffs’ reliance on Ang Ming Lee, it may be noted at the outset that the Federal Court in Obata-Ambak Holdings Sdn Bhd v Prema Bonanza Sdn Bhd & Other Appeals [2024] 8 CLJ 519 (“Obata-Ambak”) has clarified that the decision in Ang Ming Lee has prospective effect from the date of Ang Ming Lee in November 2019 only and thus, it did not invalidate the 22-11-2013 extension of time for Completion Period. That was an approved modification to the terms of the prescribed agreement in the Schedules of the HDR under Regulation 11(3) of the HDR. [18] Obata-Ambak decided a number of legal issues other than the prospective effect of Ang Ming Lee:

A purchaser may not launch a collateral attack on the validity of the Controller’s decision through a writ action against the developer.

Based on the law on limitation, the cause of action to recover LAD premised on the invalidity of a Controller’s extension of time would have accrued from the date of the execution of the SPAs. [19] It is noted that the Defendants grounds for striking out the Plaintiffs’ claim for LAD in Enclosures 30 and 35 are supported by the ruling of the Federal Court in Obata-Ambak as summarized in paragraph [18] (a) and

above. [20] Although the SPAs provide in clauses 25 and 27 that any cause of action to claim LAD shall accrue on the date of vacant possession and completion of common facilities, the Defendants argued and I agree based on the reasoning in Obata-Ambak that this cause of action is subject to the validity of clauses 25 and 27. [21] The Plaintiffs are entitled to be paid LAD for the period of alleged delay of 12 months on account of the Completion Period being extended from the standard 36 months to 48 months under the SPAs only if they successfully challenge its validity. No LAD is due for that 12-month period if clauses 25 and 27 of the SPAs are valid contractual stipulations that bind the Plaintiffs. [22] On this question, the Federal Court in Obata-Ambak held that where there is in effect a challenge to the validity of any contractual term, the cause of action accrued at the earliest time when the claimant could have commenced action and this is when time begins to run for purposes of the statutory time bar. Thus the earliest date is when the contract is executed: “[96] In the appeals before us, Obata and Vignesh are in effect challenging the validity of the clauses, which are, cls. 25 and 27 of the SPA. Terms which they have agreed to when they signed the SPAs in 2012. In respect of limitation we are of the view that based on the law on limitation it is clear that time begins to run at the earliest point of time the claimants, Obata and Vignesh could commence action. The cause of action would have accrued from the date of the execution of the SPAs …” [23] A similar challenge was made in 2 of the appeals in Obata-Ambak which the Federal Court found to be time-barred for the above reason. On the facts of the present case, this action was filed on 13-6-2022, more than 6 years after the last SPA was signed on 19-7-2014. [24] It is not open for the Plaintiffs to argue that there was any concealment of the impugned terms of the SPAs in this case as they were indeed expressed. It is trite law that the Plaintiffs are bound whether or not they have read, understood or agreed to its terms. Per Scrutton LJ in L’Estrange v F Graucob Ltd [1934] 2 KB 394: “When a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not.” [25] As the Plaintiffs are time-barred from challenging the validity of the 48-month Completion Period, that would spell the end of the claim for LAD for the 12 months after the expiry of the 36-month Completion Period that the Plaintiffs say should apply. However, it does not follow that the Plaintiffs are time-barred from suing for LAD if there is still a delay beyond the extension of time granted. [26] The question that remains is whether there are excess LAD claims for any period of delay after the 48-month Completion Period. If, despite the validity of the 48-month Completion Period, there is still accrued and unpaid LAD, then the action is simply a contractual claim for LAD which cause of action accrued on the date of vacant possession and completion of the common facilities according to the terms of the SPAs. [27] According to the 1st Defendant, the Plaintiffs who are entitled have already been paid LAD for the period of delay after 48-months, calculated based on the date of the SPAs and the date of issuance of the notices of vacant possession, and ending on the date when notice is given to the purchasers that vacant possession is ready. The 1st Defendant relies on Everest Point Sdn Bhd & Anor v Lim Peck Sim & Ors [2017] 5 MLJ 195 for the end date. [28] The Plaintiffs on the other hand, argued that there is still LAD payable if the 48-month Completion Period is calculated from the date the booking fees were paid, following PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Others and Other Appeals [2021] 2 CLJ 441 and ends 14 days after the notice of vacant possession is given, following Golden Quantum Acres Sdn Bhd v SSU Management Services Sdn Bhd [2014] 10 CLJ 320. [29] I asked parties to provide an agreed calculation sheet on the different permutations for the start/end date for computing LAD claim: LAD calculations 1st Defendant (Date of VP: Notice of VP given) Plaintiffs (Date of VP: 14 days after Notice of VP given) SPA date + 48 months to date of VP (less LAD paid) 0 RM238,263.06 Booking date + 48 months to date of VP (less LAD paid) RM492,862.08 RM833,095.31 SPA date + 36 months to date of VP (less LAD paid) RM2,444,712.43 RM3,183,741.05 Booking date + 36 months to date of VP (less LAD paid) RM2,971,464.27 RM3,815,843.23 [30] Based on every permutation, Plaintiff’s position is that sums are still due and payable to the Plaintiffs and the matter cannot be determined summarily. This Court finds that there is no agreement even with the lowest common denominator and if I take the end date to be the actual date of VP (i.e. not the notice date or 14 days thereafter), which I think is the correct position, then there is not enough material before me to decide the question. Private Lease Scheme and Claim for Freehold Title [31] As it relates to the Plaintiffs’ challenge to the validity of the Private Lease Scheme and the provisions in relation thereto in the SPAs, the Plaintiffs made various legal arguments as to why the Private Lease Scheme is null and void for illegality as it would operate in contravention of provisions of the National Land Code (“NLC”), Strata Titles Act 1985 (“STA”) and Strata Management Act 2013 (“SMA”). For that reason, the Plaintiffs argue that the defence of statutory limitation period does not arise. [32] The Defendants’ response is that the Plaintiffs’ submissions that the illegality of operation of the Private Lease Scheme (as it relates to long term leases under the NLC and management of strata living under the STA and SMA) was not pleaded in the Amended Statement of Claim or affidavits as to the factual basis to support the arguments made about the illegality of the Private Lease Scheme. [33] This Court observes that the Exemption of the Iskandar Residences housing development project from compliance with Schedule H of the HDR was made by a public authority. It is in some ways analogous to the variation to the completion period dealt with in the Obata-Ambak case. This Court is of the considered view however, that whether it is conceptually or fundamentally different from the Completion Period issue requires more mature deliberation. It is perhaps for this reason that the JPN declined to consider the application for a waiver and modification, and purported to grant a wholesale exemption on 3-12-2013 instead. [34] Although the SPAs in this case had the Schedule H label and substantially followed the form, the subject matter of the SPAs in this case is the Private Lease Scheme that is arguably distinguishable from a sale of housing accommodation as traditionally understood under the HDA. The determination of the Controller is that Schedule H is inapplicable altogether, effectively giving the 1st Defendant a free hand to draw up a bespoke sale and purchase agreement. [35] That said, it is nowhere pleaded that the Exemption falls under section 2(2) of the HDA which provides that: “The Minister may by order published in the Gazette exempt any housing developer or housing accommodation from any or all of the provisions of this Act and such exemption may be granted for such duration as may be specified in the order, and may be made subject to such limitations, restrictions or conditions as the Minister may specify in the order.” [36] The Defendants rely on Obata-Ambak to submit that the claim remains unsustainable on grounds of time bar and wrong mode of challenge, and the 2nd Defendant further submitted that the Private Lease Scheme is operating in compliance with the law, including the provisions of the HDA, NLC, STA and SMA. [37] Arising from the above opposing contentions, this Court first considered whether the alleged illegality of the Private Lease Scheme is pleaded. The Plaintiffs’ challenge to the validity of the provisions in the SPAs that allow for the Private Lease Scheme was initially pleaded as a variation to the Schedule H form of agreement that is void because Regulation 11(3) of the HDR is ultra vires the HDA per Ang Ming Lee. [38] The Plaintiffs pleaded in their Reply that the Exemption is void, but void for contravention of the HDA, NLC, STA and SMA: Reply to 1st Defendant Reply to 2nd Defendant Some particulars of the alleged illegality are pleaded as seen from the above, but no particulars are given as to how the Private Lease Scheme contravenes the STA and SMA. [39] This Court takes the view that the authority referred to by the 2nd Defendant to argue that the illegality of the Private Lease Scheme must be pleaded in the Statement of Claim can be distinguished. The principle of pleadings set out in International Shipcare Sdn Bhd v The owner of and other persons interested in the ships or vessels MV ‘EL HADJAR’ registered at the port of Annaba, Algeria; MV ‘AIN TEMOUCHENT’, ‘MV NEMEMCHA’ and MV ‘NEDROMA’ which are all registered at the port of Algiers, Algeria [2015] 7 MLJ 753 that “in the statement of reply, a plaintiff cannot plead a new cause of action or raise any new ground or a claim inconsistent with the statement of claim.” This does not apply where as in this case, the plea of alleged illegality of the Private Lease Scheme is a new but not inconsistent plea. That the Private Lease Scheme is contrary to law is consistent with the plea in the Amended Statement of Claim that provisions relating to it deviate from