B.U. Developments Sdn Bhd v Adeline Tan Kean Sim (P-01(A)-440-08/2023)

ADELINE TAN KEAN SIM

TRIBUNAL TUNTUTAN PEMBELI RUMAH …RESPONDENTS In the High Court of Malaya at Pulau Pinang Judicial Review Application No.: PA-25-3-01/2023 between B.U. Development sdn bhd (Company No.: 353422-H) …Applicant and

Adeline tan kean sim (NRIC No.: 920805-08-6094)

Tribunal Tuntutan Pembeli Rumah …Respondents CORAM AHMAD ZAIDI BIN IBRAHIM, HMR LIM CHONG FONG, HMR AZHAHARI KAMAL BIN RAMLI, HMR GROUNDS OF JUDGMENT INTRODUCTION [1] This is an appeal pertaining to a purchaser’s claim for late delivery of vacant possession of a residential apartment against the developer. [2] The Appellant and applicant in the judicial review in the High Court is a private limited company licensed under the Housing Development (Control and Licensing) Act 1966 (“HDA”). [3] The First Respondent and also the first respondent in the judicial review in the High Court is an individual. [4] The Second Respondent and also the second respondent in the judicial review in the High Court is the tribunal established by the Ministry of Housing and Local Government pursuant to the HDA. [5] We heard the appeal on 18th October 2024 and thereafter adjourned our decision to deliberate on the intricate issues of law advanced by the parties. [6] Now having done so, we hereby give our decision together with the supporting grounds thereto. BACKGROUND [7] By a written “contract to purchase” dated 14th February 2016 (“CP”), the First Respondent purchased from the Appellant a parcel identified as Unit no. A-12-05, Level 12, Tower A in respect of the project development known as Triuni Residences in Batu Uban, Penang (“Property”) at the purchase price of RM822,500.00. The CP is reproduced below: [8] As required by the Appellant pursuant to the CP, the First Respondent gave a Maybank cheque dated 14th February 2016 to the Appellant amounting to RM24,675.00 being the initial part payment towards the purchase of the Property (“Booking Fee”). [9] Subsequently, on 15th June 2016, the Appellant wrote to the First Respondent requesting the replacement of the aforementioned Maybank cheque which had lapsed. [10] As a result, the First Respondent re-issued another equivalent Maybank cheque on 2nd July 2016. [11] As this subsequent Maybank cheque had also lapsed, the First Respondent, upon the request of the Appellant, re-issued another equivalent Maybank cheque on 11th February 2017 to replace it. [12] The Appellant and First Respondent thereafter executed the sale and purchase agreement of the Property (“SPA”) on 3rd April 2017, which is based on the standard Schedule H of the Housing Development (Control & Licensing) Regulations 1989. [13] Upon the completion of the construction of the Project, the First Respondent received a letter from the Appellant dated 31st May 2022 notifying the delivery of vacant possession of the Property. [14] By reason of the Appellant’s failure to deliver vacant possession of the Property to the First Respondent within 48 months from the date of payment of the Booking Fee on 14th February 2016 plus 442 days of extension of time granted by the Kementerian Perumahan dan Kerajaan Tempatan and Minister therefrom which is 2nd May 2017, the First Respondent lodged a claim with the Second Respondent seeking compensation for liquidated ascertained damages (“LAD”). [15] However, the Appellant defended before the Second Respondent that the due date for delivery of vacant possession of the Property under the SPA after the extension granted by the Kementerian Perumahan dan Kerajaan Tempatan is 18th June 2022; hence there is no late handing over of vacant possession of the Property since the Property has been handed over to the First Respondent before the extended date for delivery of vacant possession of the Property. [16] After hearing the parties, the Second Respondent on 21st December 2022, awarded RM50,000.00 LAD in favour of the First Respondent for late delivery of vacant possession of the Property (“Award”). [17] The Appellant is dissatisfied with the Award and has on 18th January 2023 sought judicial review to quash the Award in the High Court. IN THE HIGH COURT [18] After hearing the legal submission of the parties, the learned High Court judge on 8th August 2023 dismissed the Appellant’s judicial review application with costs of RM10,000.00 (‘’Decision’’). [19] The learned High Court judge held as follows in the grounds of judgment (“Judgment”): “[17] I see no reason to disturb the finding of the Tribunal that:

The time for delivery vacant possession commences from the date when the booking fee cum deposit was paid i.e. on 14.2.2016 and not from the date of SPA;

There was a delay by the Applicant in delivering vacant possession of the Property to the 1st Respondent;

The 1st Respondent is entitled to the award where LAD is calculated from the date of payment of the booking fee/deposit i.e. on 14.2.2016 [18] I am satisfied that the Tribunal has taken into consideration relevant matters and has not taken into consideration irrelevant matters. I am also satisfied that the Tribunal has not misinterpreted the law or the relevant contract between the parties. In this regard, the Tribunal considered the Contract to Purchase and the SPA entered between the parties herein. The Tribunal also considered the apex court decision of PJD Regency. [19] … This is not the case where the conclusion arrived by the Tribunal is unsupported by evidence or not in accordance with the applicable principles of law … I cannot say that no reasonable tribunal, similarly circumstanced, would have arrived at the decision which the Tribunal did in the present case. [20] Accordingly, I dismissed the judicial review application.” [20] The Appellant is dissatisfied with the Decision and has on 16th August 2023 appealed to the Court of Appeal. FINDINGS OF THIS COURT [21] From the appeal record, the sole issue before us here is the Second Respondent’s Award of LAD claimed by the First Respondent against the Appellant. [22] The Appellant’s pleaded case in defence to the First Respondent’s claim before the Second Respondent is that the date of the SPA is on 3rd April 2017 as conceded by the First Respondent; hence the initial date of delivery of vacant possession is on 2nd April 2021. But with 442 days of extension of time granted by the Kementerian Perumahan dan Kerajaan Tempatan and the Minister therefrom, the revised date of delivery of vacant possession is 18th June 2022. [23] Since the actual date of delivery of vacant possession is 31st May 2022, there was no late completion and delivery of vacant possession of the Property that would attract LAD. [24] In the premises, the Appellant contended that both the Second Respondent and the learned High Court judge erred by failing to decide in accordance with the pleaded case based on the First Respondent’s concession to the Appellant’s defence on the initial date of delivery of vacant possession of the Property. This is fatal following, amongst others, Pembinaan SPK Sdn Bhd v. Jalinan Waja Sdn Bhd [2014] 2 MLJ 322 (CA). [25] In opposition, the First Respondent instead contended that the dispute before the Second Respondent concerned whether the initial date of delivery of vacant possession ought to be computed from the date of payment of the booking fee which is on 14th February 2016 or the date of the SPA which is on 3rd April 2017. [26] According to the First Respondent, the Second Respondent correctly found that the operative initial date of delivery of vacant possession ought to be computed from the date of payment of the booking fee following PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & other appeals [2021] 2 MLJ 60 (FC) where Tengku Maimun Tuan Mat CJ held as follows: “[8] We heard the appeals together as they essentially raised the same point of law. The common question of law falling for consideration as summed up from the similarly worded leave questions in all the appeals is as follows: "Where there is a delay in the delivery of vacant possession by a developer to the purchaser in respect of Schedule G and/or H type contracts under reg 11(1) of the Housing Development (Control and Licensing) Regulations 1989 (Regulation 1989) enacted pursuant to s 24 of the Housing Development (Control and Licensing) Act 1966, whether the date for calculation of liquidated agreed damages ('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 the sale and purchase agreement, having regard to the decisions of the Supreme Court in Hoo See Sen & Anor v. Public Bank Bhd & Anor [1988] 1 MLRA 46; [1988] 2 MLJ 170; [1988] 1 CLJ (Rep) 125 and Faber Union Sdn Bhd v. Chew Nyat Shong & Anor [1995] 1 MLRA 623; [1995] 2 MLJ 597; [1995] 3 CLJ 797; [1995] 2 AMR 2094.". … [87] In Lim Eh Fah (supra), the issue was simply whether the LAD period should begin to run from the date of payment of the deposit or from the signing of the agreement. The fact that what was paid in that case was a 'deposit' makes no difference to the present case as the effect of a booking fee is to operate as part of the deposit. After referring to Hoo See Sen (supra) and Faber Union (supra), Suriyadi J (as he then was) observed, as follows: "One must bear in mind that the date of 17 July 1992 ie, the deposit payment date, was the date when the contract was struck, and the very date the respondent assumed responsibility to fulfil its part of the bargain. If the date of the signing of the S&P agreement were to be taken as the relevant date, when time started to run for the delivery of the vacant possession, the respondent could willy-nilly pick any dates it favoured to execute the S&P agreement, which would certainly prejudice the interest of the purchaser.". [88] After referring to reg 11 of the HDR 1989, at the same page, His Lordship then observed that: "In relation to this case, the above provision explicitly means that the respondent was permitted to accept deposits so long as it was provided for under the S&P agreement. A reading of the receipt, found at p 39 of the Record of Appeal, highlighted that the payment was a 'deposit on apartment No 6, Floor 2, Kampong Cina, Kota Bharu, Kelantan.' What is the purpose of a deposit if not to indicate offer and acceptance, each with its respective responsibilities that must be fulfilled in accordance with the provisions of the S&P agreement. The main obligation of the appellant was to pay in full the purchase price of the impugned property (cl 4), failing which interest may be imposed on any late payments. At the other end of the agreement, it was the duty of the respondent to build, deliver and to hand over vacant possession within the agreed period to the appellant, failing which liquidated damages at the rate of 10% per annum of the costs of the property must be paid to the appellant.. [Emphasis Added] [89] We agree fully with the views expressed above and as such we answer all related leave questions on the common issue to the effect as follows: Where there is a delay in the delivery of vacant possession by a developer to the purchaser in respect of Scheduled Contracts under reg 11(1) of the Housing Development (Control and Licensing) Regulations 1989 (Regulation 1989) enacted pursuant to s 24 of the Housing Development (Control and Licensing) Act 1966, the date for calculation of liquidated agreed damages ('LAD') begins from the date of payment of deposit/booking fee/initial fee/expression by the purchaser of his written intention to purchase and not from the date of the sale and purchase agreement literally.” [27] Consequently, the First Respondent further contended that both the Second Respondent and the learned High Court judge are correct in the usage of the date of payment of the booking fee to compute the initial date of delivery of vacant possession of the Property; thus, the Appellant is liable to pay LAD to the First Respondent for late delivery of vacant possession of the Property in the capped sum of RM50,000.00. [28] Our appellate function here is review only whereby Abdoolcader J (later FCJ) in Vasudevan v. T Damodaran & Anor [1981] 1 MLRA 24 explained as follows with emphasis added by us: "There is a catenation of cases on this point and it will suffice to cull and refer to a few which restate the well-settled principles. An appellate court can review questions of discretion if it is clearly satisfied that the judge was wrong but there is a presumption that the judge has rightly exercised his discretion and the appellate court must not reverse the judge's decision on a mere "measuring cast" or on a bare balance as the mere idea of discretion involves room for choice and for differences of opinion (Charles Osenton & Co v. Johnston [1942] AC 130 (at p 148), per Lord Wright). The Privy Council held in Ratnam v. Cumarasamy & Anor [1964] 1 MLRA 599; [1965] 1 MLJ 228 that an appellate court will not interfere with the discretion exercised by a lower court unless it is clearly satisfied that the discretion had been exercised on a wrong principle and should have been exercised in a contrary way or that there has been a miscarriage of justice, referring to Evans v. Bartlam [1937] AC 473. The House of Lords, approving the decision of the English Court of Appeal in Ward v. James [1966] 1 QB 273, held to the same effect in Birkett [1978] AC 297 (at pp 317, 326). For good measure, we would refer to the felicitous expression of Goulding J., in Re Reed (a debtor) [1979] 2 All ER 22 on this point (at p 25): "... the duties of an appellate court in such a matter as this are, in my judgment, confined to those normally exercisable where the lower court has a discretion, that is to say, we are not justified in setting aside or varying an order simply because we may think we might have come to a different conclusion ourselves on similar material. We can only interfere if either we can see that the court below has applied a wrong principle, or has taken into account matters that are in law irrelevant, or has excluded matters that it ought to have taken into account, or otherwise that no court, properly instructing itself in the law, could have come to the conclusion which in fact was arrived at." [29] Upon our review, we find that the crucial consideration here, as also in PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & other appeals (supra), is whether the initial date of delivery of vacant possession must be computed from the date of the SPA or the date of payment of the Booking Fee pursuant to the CP? [30] In this regard, we are, by virtue of stare decisis, bound by PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & other appeals (supra) because the respective facts are closely similar involving contracts governed by the HDA. We are mindful that Tengku Maimun Tuan Mat CJ also held as follows therein with emphasis added by us: “[85] Had the developers in the present appeals complied strictly with the terms of the Scheduled Contracts as statutorily prescribed, then the payment of the initial 10 percent deposit and the signing of the statutory sale and purchase agreement would have been done simultaneously. The fact that they have nonetheless bypassed the statutory prohibition against the collection of booking fees, and the pro forma agreements being amply clear as to the fundamentals of the agreement, means that a bargain was indeed made at the time of the payment of the booking fee. In our judgment, the legislative intent was that the initial payment of monies, in the form of a deposit, is sufficient to constitute an intention to enter into a contract given that the agreement would have to be signed at the same time. [86] The other reason that attracts the application of these foundational principles of contract law is to ensure maximal protection of the purchasers having regard to the social purpose of the HDA 1966 and its subsidiary legislation. At the risk of repetition, if the 10 percent deposit is paid at the same time of the signing of the agreement, there would be no issue of there being separate dates for calculating the LAD. Having bound themselves to a bargain by collecting the booking fee and procuring a signed pro forma and top of it being responsible for drafting the final formal agreement, the developers have thereby put the purchasers in a disadvantageous position. The problem this poses is that the developers may abuse the opportunity to put whichever date they wish with a view to extend the date to deliver vacant possession. We can see, for example, that this was the case in Hoo See Sen (supra) where the formal agreement was only signed seven months after the booking fee was paid.” [31] Based on our construction of the CP, the Appellant here also, in breach of the statutory prohibition, required the First Respondent to enter the CP to secure the purchase of the Property. At the same time, the Appellant is hence secured in advance against part of the prescribed first scheduled payment of 10% of the purchase price payable upon the signing of the SPA. As the result, the Appellant has put the weaker First Respondent in a disadvantaged position analogous to the purchasers in PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & other appeals (supra) by the Appellant flouting the law. Otherwise, the Appellant is prohibited to sell the Property and collect payment, not until the SPA is ready to be executed under the scheme envisaged by the HDA. [32] We are aware the Appellant has strenuously contended that the payment of the Booking Fee has not been collected or received by the Appellant because the three cheques given by the First Respondent have not been encashed at all material times. Reliance has been made on the English case of Parkside Leasing Ltd v. Smith (Inspector of Taxes) [1985] 1 WLR 310 on deem payment and Singapore case of Tan Chong Keng v. Vincent Lim Bak Keng [1986] 2 MLJ 327 to justify that the initial date of computation of vacant possession should still be the date of execution of the SPA because no money has been collected by the Appellant. [33] Although it is an undisputed fact here that the First Respondent’s cheques have not been not encashed by the Appellant, we are of the view by the fact of the execution of the CP, giving of cheques pursuant thereto and ultimately the execution of the SPA, they must all be read together in their proper context. It is plain to us that they are inextricably connected to one another designed to benefit the Appellant through pre-selling the Property and to obtain financial security thereto in the event the First Respondent reneges on purchasing the Property. [34] Moreover, by the First Respondent having issued the cheques, the First Respondent can no longer utilise that amount drawn in her current account for other purposes. Although the Appellant did not cash the cheques, it can be plainly seen that the Appellant has continuingly secured itself against the First Respondent reneging from executing the SPA by requiring the First Respondent to furnish a replacement cheque each time the earlier cheque lapsed. In our view, the Booking Fee is deem paid on the peculiar facts herein. We are also mindful that the SPA is a contract made pursuant to HDA which has been held to be a social legislation to protect the weaker party, to wit the purchaser: See the triology of Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and Other appeals [2020] 1 CLJ 162 (FC); PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & Anor and Other appeals (supra) (FC); and Remeggious Krishnan v. SKS Southern Sdn Bhd [2023] 4 CLJ 36 (FC). [35] Consequently, in contractual parlance, we find the SPA is in the circumstances here as good as entered on 14th February 2016 by virtue of the entry of the CP and the First Respondent giving the Booking Fee cheque to the Appellant. The eventual execution of the SPA is a mere formality. It is therefore irrelevant that the Appellant did not receive any payment due to the non-encashment of the cheques by the Appellant. [36] Thus, for purposes of determining the initial date for giving of vacant possession of the Property, we find that this has to be computed from 14th February 2016 which is the date of the execution of the CP which is also synonymous with the date the First Respondent gave the Booking Fee cheque to the Appellant. [37] As the result, we find there is no appealable error committed by both the Second Respondent and the learned High Court judge that warrants appellate intervention. [38] For completeness, it is apt at this juncture that we deal with the pleading point raised by the Appellant that the First Respondent departed from her pleaded case because of having conceded in her reply to the Appellant’s defence that the initial date of delivery of vacant possession is 48 months from the date of execution of the SPA. In this regard, we have reviewed the pleadings before the Second Respondent including the First Respondent’s claim. By construing the pleadings in their entirety, we do not find that the First Respondent made such concession as contended by the Appellant but merely acknowledged that the period of delivery of vacant possession of the Property is 48 months from the execution of the SPA as expressly stated therein. Put simply, it cannot reasonably mean the First Respondent abandoned its pleaded claim that the delivery of vacant possession of the Property is 48 months from the Booking Fee payment. CONCLUSION [39] For the foregoing reasons, the appeal is dismissed and the Decision is affirmed. The Appellant shall pay the First Respondent costs of RM 10,000 subject to allocatur. No order as to costs in respect of the Second Respondent. Dated this 7th March, 2025 Sgd. LIM CHONG FONG JUDGE COURT OF APPEAL LIST OF COUNSELS:

Counsels for Appellant

Rishwant Singh Chia Eng Yi Solicitors for Appellant MESSRS. CECIL ABRAHAM & PARTNERS. Advocates & Solicitors Suite 12.01, Tingkat 12, Menara 1MK, 1 Jalan Kiara, Mont Kiara, 50480 Kuala Lumpur.

Counsels for 1st Respondent 1. Nur Azean Lee Bt. Abdullah@Lee Pooi Mun Mohammed Azmi Bin Shahruddin Solicitors for 1st Respondent Respondent MESSRS. KHONG & SON. Advocates & Solicitors No. 45-1A, Jalan Sultan Azlan, Shah Utara, Taman Ipoh Selatan, 31400 Ipoh, Perak. CASES REFERRED TO: PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & other appeals [2021] 2 MLJ 60; Vasudevan v. T Damodaran & Anor [1981] 1 MLRA 24; Parkside Leasing Ltd v. Smith (Inspector of Taxes) [1985] 1 WLR 310; Tan Chong Keng v. Vincent Lim Bak Keng [1986] 2 MLJ 32. Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and Other appeals [2020] 1 CLJ 162; and Remeggious Krishnan v. SKS Southern Sdn Bhd [2023] 4 CLJ 36.