Chin Pey Lee & 1 Lagi v Teori Warisan Sdn Bhd & 1 Lagi (J-01(A)-381-06/2018)

CHIN PEY LEE (No. K/P:770208-08-5850)

LAW TUNG HUI (No. K/P:781128-13-5209) … PERAYU-PERAYU

TEORI WARISAN SDN BHD (No. Syarikat:708040-M)

TRIBUNAL TUNTUTAN PEMBELI RUMAH … RESPONDEN-RESPONDEN [Dalam Mahkamah Tinggi Malaya di Johor Bahru Dalam Negeri Johor Darul Takzim, Malaysia Permohonan Untuk Semakan Kehakiman No. JA-25-54-07/2017 Dalam perkara permohonan untuk mendapatkan perintah Certiorari; Dan Dalam perkara Awad kes Tribunal Tuntutan Pembeli Rumah No Tuntutan TTPRZS/J/0225/17 yang bertarikh 19.06.2017; Dan 2 Dalam perkara mengenai perenggan Dalam Jadual kepada Akta Mahkamah Kehakiman 1964; Dan Dalam perkara Aturan 53 Kaedah-Kaedah Mahkamah 2012 Antara Teori Warisan Sdn Bhd (No Syarikat: 708040) … Pemohon

Tribunal Tuntutan Pembeli Rumah

Chin Pey Lee (No. K/P: 770208-08-5850)

Law Tung Hui (No.K/P: 781128-13-5209 …. Responden-Responden] (An appeal against the decision of YA Mohd Ivan Hussein, Judicial Commissioner made on 21.5.2018) CORAM ABDUL RAHMAN SEBLI, JCA MARY LIM THIAM SUAN, JCA HASNAH MOHAMMED HASHIM, JCA 3 JUDGMENT INTRODUCTION [1] There were twelve appeals with the same facts and issues before us: i. Appeal No. J-02(A)-367-06/2018 ii. Appeal No. J-02(A)-381-06/2018 iii. Appeal No. J-02(A)-382-06/2018 iv. Appeal No. J-02(A)-383-06/2018 v. Appeal No. J-02(A)-384-06/2018 vi. Appeal No. J-02(A)-385-06/2018 vii. Appeal No. J-02(A)-386-06/2018 viii. Appeal No. J-02(A)-387-06/2018 ix. Appeal No. J-02(A)-388-06/2018 x. Appeal No. J-02(A)-389-06/2018 xi. Appeal No. J-02(A)-1246-06/2018; and xii. Appeal No. J-02(A)-1247-06/2018 [2] The appeals were against the decision of the learned Judicial Commissioner allowing the 1st Respondent's application for judicial review. The 1st Respondent had applied for an order of certiorari to quash the 4 decision of the Tribunal Tuntutan Pembeli Rumah (“the Tribunal”) made in favour of the Appellants on 19.6.2017 (‘the Award’). The Tribunal had allowed the Appellants’ claim for liquidated damages for late delivery of vacant possession (‘LAD’). The Appellant, dissatisfied with the decision of the learned Judicial Commissioner appealed to this Court. [3] We heard the appeals on 14.3.2019. After due deliberation and having carefully considered the submissions of both parties we found that there are merits in the appeals and allowed the appeals with costs. We proposed to give reasons for our decisions with respect to all the appeals in one common judgment. Since the facts are similar in all the appeals, for purposes of this judgment, we will only be referring to the facts in this appeal which parties had agreed to refer in their submissions. These are our reasons. MATERIAL FACTS [4] The 1st Respondent is a housing developer for a project known as ‘The Seasons Apartment @ Amara Larkin’. The Appellants entered into a Sale and Purchase Agreement dated 20.4.2012 (‘the SPA) with the Respondent to purchase an apartment unit described as B-03-02 Type B, The Seasons Apartment @ Amara Larkin, Jalan Larkin 80300 Johor Bahru (‘the apartment’).Under the SPA the agreed completion period was 3 years and 5 it was expressly provided under Clause 25 of the SPA that the handing over of vacant possession of the apartment shall be delivered within thirty-six (36) months from the date of the SPA, which is on or before 19.4.2015. [5] During the interim, on 15.1.2016, the 1st Respondent applied to the Controller of Housing pursuant to Regulation 11 of the Housing Development (Control and Licensing) Regulations 1989 (‘HDR’) to amend the prescribed SPA to extend the period of delivery of vacant possession. The application to amend the SPA by extending the date of delivery of vacant possession was done by the 1st Respondent without notifying the Appellants. The Controller of Housing approved the application and extended the period of delivery of vacant possession from 36 months to 48 months. The delivery of vacant possession was then extended to 20.4.2016. The extended period was conditional upon the 1st Respondent notifying the Appellants as purchasers of the apartment. However, the Appellants were only notified on 22.1.2016. Despite the extension of time granted, the 1st Respondent failed to complete the development and only delivered vacant possession of the apartment on 25.9.2016 together with the common facilities. [6] Aggrieved by the delay in delivering vacant possession, the Appellants filed their claims at the Tribunal for the entire period of delay. It is the 6 Appellants’ case that the 1st Respondent is liable for the liquidated ascertained damages (LAD) from the date specified under the SPA, that is,

19.4.2015. The 1st Respondent, however, contended that it was only liable for LAD for a delay of 40 days, calculated from 20.4.2016 (the extended completion date) to 29.5.2016. The 1st Respondent was ordered to pay RM3,763.17 as LAD for the delay of 40 days, that is, from 19.4.2016 to 29.5.2016 (the extended period of delivery) to the Appellants on 31.5. 2016. The 1st Respondent had argued that the Appellants did not appeal against the extended period pursuant to Regulation 12 HDR. [7] The Tribunal found in favour of the Appellants and awarded LAD for handing over vacant possession and completion of common facilities calculated from the date as specified in the SPA up to the date of Certificate of Completion and Compliance (‘CCC’). The Tribunal awarded the sum of RM45,835.38 to the Appellants. [8] The 1st Respondent sought the following orders from the High Court: a) An order of certiorari to quash the decision of the Tribunal dated 19.6.2017; b) Costs and c) Any other consequential orders. 7 [9] Briefly, the grounds of the 1st Respondent in support of the judicial review are as follows: a) The Tribunal failed to take into consideration the extended date of delivery; b) The Tribunal failed to take into consideration the fact that the Appellants did not appeal or apply for judicial review of the extended date granted by the Controller of Housing; c) The Tribunal failed to consider the date of completion of the common facilities and that the interpretation of clause 27 SPA and the calculation of the LAD were not correct; d) The Tribunal was wrong in respect of the forum for the claim by the Appellants as the Appellants did not appeal or apply for judicial review. [10] In response, the Appellants in their Affidavit in reply stated that under the SPA vacant possession must be delivered on 19.4.2015. There is no provision for extension of time for delivery of vacant possession and therefore, any extended time of delivery is not valid. The EOT which was granted by the Controller of Housing is in clear violation of the SPA as well as Regulation 11 (3) of the HDR. By granting the application to amend the 8 terms of the SPA on EOT the Controller of Housing had acted in excess of the jurisdiction conferred under the Act and HDR. The Tribunal [11] After considering the submissions of the parties as well as the facts and evidence before him, the Tribunal decided that the 1st Respondent was liable to pay the Appellants the LAD in the sum of RM45,835.38 calculated from 19.4.2015 to the date of issuance of vacant possession notice and the Certificate of Completion, which is, 29.5.2016. With regards to the issue of the LAD claim and the common facilities, the 1st Respondent contended that the common facilities were completed before the vacant possession of the Appellants’ units. The Tribunal found that there was insufficient evidence to support the Respondent’s claim that the common facilities was completed and certified by the Architect. Hence, the Respondent’s appeal was dismissed. The Tribunal relied on the case of View Esteem Sdn Bhd v. Vitalmont Development Sdn Bhd (2014)1 LMS 1402 where there was a failure to adduce evidence that the common facilities have been completed and duly certified and as such the developer’s appeal was dismissed (See: pp. 295-335 of the Record of Appeal). 9 [12] The Tribunal applied the High Court case of Ang Ming Lee Dan 35 Orang Lagi v. Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan Dan Dua lagi [2017] 1 LNS 1260 (Permohonan Bagi Semakan Kehakiman No. WA-25-124-07/2016) and concluded that the EOT granted was null and void as the Controller of Housing has no power to waive or modify the contract of sale under Regulation 11(3) HDR. The High Court [13] The learned Judicial Commissioner allowed the application for judicial review and granted an order of certiorari to quash the decision of the Tribunal and in essence allowed the amendment to the SPA extending the EOT. [14] The learned Judicial Commissioner was of the considered view that the Tribunal had acted in excess of jurisdiction as it was not entitled to disregard the EOT summarily. The 1st Respondent had a legitimate expectation based on the EOT of which, the validity was never challenged by the Appellants. The learned Judicial Commissioner was of the view that the Tribunal’s decision to dismiss the claim based on stare decisis failed to take into account the 1st Respondent’s legitimate expectation. The Tribunal was not the proper forum to deliberate on the validity of the EOT as the entity who had granted the EOT was not named as a party in the suit. 10 Our decision [15] Before us, learned counsel for the Appellant submitted that the award made by the President of the Tribunal was correct and that the learned Judicial Commissioner had erred in quashing the said Award. It was submitted that in the light of the facts and the circumstances of the case put forth before the Tribunal, the decision arrived at was not tainted with illegality and irrationality as the Tribunal had taken into account relevant considerations, material facts and had taken into consideration the totality of the evidence before him. [16] The Federal Court case of R Rama Chandran v. Industrial Court of Malaysia & Anor [1997] 1 CLJ 147; [1997] 1 MLJ 145 and the case of Ranjit Kaur S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629; [2010] 6 MLJ 1 correctly held that the decision of the inferior tribunal may be reviewed on the grounds of illegality, irrationality and possibly proportionality and the courts are permitted to scrutinise such decisions not only for process but also for substance. [17] However, the Court should not reverse an award of a tribunal unless there is proven a clear jurisdictional error. When a tribunal does not act within the proper scope of its statutory function such as whether it has acted without 11 sufficient evidence or on no evidence, or has misconstrued the law on an issue on which its decision is founded, then it can be said that there is jurisdictional error (See:Syarikat Kenderaan Melayu Kelantan Bhd v. Transport Workers Union [1995] 2 CLJ 748; [1995] 2 MLJ 317). [18] In Datuk Bandar Kuala Lumpur v. Zain Azahari Zainal Abidin [1997] 2 CLJ 248 at p. 269 Gopal Sri Ram JCA (as he then was) said: ... where the exercise of a decision is challenged on grounds of vires that is illegality, or unreasonableness, the Court is not confined merely to the decision-making process, but may examine the merits of the decision itself. [19] We are further guided by the Federal Court case of Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd and Another Appeal [1995] 3 CLJ 344 at p. 348: In exercising judicial review, the High Court was obliged not to interfere with the findings of the Industrial Court unless they were found to be unreasonable, in the sense that no reasonable man or body of men could reasonably come to the conclusion that it did, or that the decisions of the Industrial Court looked at objectively, are so devoid of any plausible justification that no reasonable person or body of persons could have reached them (see Lord Denning's judgment in Griffiths (Inspector of Taxes) v. JP Harrison (Watford) Ltd [1962] 1 All ER 909 at 916, and judgment of Lord Diplock in Bromley London Borough Council v. Greater London Council and Anor[1983] 1 AC 768 at 821). 12 [20] To quash a decision made by a public authority in excess or abuse of jurisdiction or contrary to the rules of natural justice or where there is an error of law on the face of the decision of the public authority the court must review the decision in order to determine the basis of the alleged material mistake of fact on the part of the decision maker or where the decision was arrived at arbitrarily, capriciously or mala fide or as a result of unwarranted adherence to a principle or in order to further an ulterior or improper process, or misconceived the nature of the discretion conferred and took into consideration irrelevant issues or had blatantly ignored relevant ones. [21] In the instant appeal the functions, powers and jurisdiction of the Tribunal are expressly provided spelt out in the Act. Section 16N(2) of the Act provides for the limitation to the jurisdiction of the Tribunal as follows: …(2) The jurisdiction of the Tribunal shall be limited to a claim that is based on a cause of action arising from the sale and purchase agreement entered into between the homebuyer and the licensed housing developer which is brought by a homebuyer not later than twelve months from:

the date of issuance of the certificate of completion and compliance for the housing accommodation or the common facilities of the housing accommodation intended for subdivision, whichever is later;

the expiry date of the defects liability period as set out in the sale and purchase agreement; or 13

the date of termination of the sale and purchase agreement by either party and such termination occurred before the date of issuance of the certificate of completion and compliance for the housing accommodation or the common facilities of the housing accommodation intended for subdivision, whichever is later. [22] It was common ground that the unit was not completed and available for delivery as provided under agreement. Under the SPA the apartment units must be delivered by the 1st Respondent to the Appellants within 36 months form the date of the SPA which is on or before 19.4.2015. Unbeknownst to the Appellants, the 1st Respondent had applied to amend the terms of the SPA by extending the period of delivery. The Appellants’ right of action for damages for breach of contract, accrued on the date of the breach, which in this case was the day after the stipulated period provided under clause 25 of the SPA when the 1st Respondent failed to deliver vacant possession. Clause 25 SPA reads: Time for delivery of vacant possession 25 (1) Vacant possession of the said Building shall be delivered to the Purchaser in the manner stipulated in clause 26 herein within thirty-six (36) calendar months from the date of this Agreement.

If the Vendor fails to deliver vacant possession of the said Building in manner stipulated in clause 26 herein within the time stipulated in sub clause (1), the Vendor shall be liable to pay to the Purchaser liquidated damages calculated from day to day at the rate of ten per centum (10%) per annum of the purchase price 14 from the expiry date of the delivery of the vacant possession in sub clause (1) until the date the Purchaser takes vacant possession of the said Parcel. Such liquidated damages shall be paid by the Vendor to the Purchaser immediately upon the date the Purchaser takes vacant possession of the said Parcel.

For the avoidance of doubt, any cause of action to claim liquidated damages by the Purchaser under this clause shall accrue on the date the Purchaser takes vacant possession of the said Parcel. [23] The SPA is prescribed under regulation 11 (1) HDR 1989 and reads:

Contract of sale

Every contract of sale for the sale and purchase of a housing accommodation together with the sub divisional portion of land appurtenant thereto shall be in the form prescribed in Schedule G; … [24] It is also expressly provided under Regulation 11(3) HDR that if the Controller is satisfied that due to special circumstances or hardship or necessity the compliance with the terms of the SPA is impracticable or unnecessary, he may modify or waive such provision. However, the proviso to the said Regulation stipulates that such a waiver or modification shall only be approved if the said application is made after the expiry of the period stipulated for the handing over of vacant possession under the SPA or after the validity of any extension granted: 15 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.". [25] This was not the case in the appeal before us. The application for amendment was applied for and approved before the expiry of the stipulated period in the SPA. The Appellants as purchasers were not notified or informed of the 1st Respondent’s intention to make such an application. [26] In his grounds of judgment the learned Judicial Commissioner said that approach taken by the Tribunal left the 1st Respondent defenceless, unable to respond or answer on the validity of the EOT as the Controller was not named as a party to the suit:

This approach taken by the Tribunal would have left the Appellant pretty much defenseless to answer on the validity of a document, namely the EOT, which had not been issued by it, which is assuming (which does not seem the case here) that the Appellant had even been given the opportunity to do so. The party which had issued the EOT was not party to the proceedings before the Tribunal, leaving only the Applicant there to defend the validity of a document which it had applied for, obtained and thought it to be worth more than the paper that it was printed on. 16 [27] The learned Judicial Commissioner distinguished this case before him and that of Ang Ming’s case. He was of the view that the facts and issues therein are different as the parties involved in the issuance of the EOT were parties to the case:

Quite aside from the sense of helplessness that the Appellant may have found itself with regard to the Tribunal’s dealing with the EOT where it was ruled to be ineffective, the Appellant would not be in any position to argue or put forth the validity of the said official document although the Appellant rightly had an interest in the purport to the said document.

Under those circumstances, legitimate expectation ought to have been a relevant factor to consider, whether the Appellant would be entitled to rely on the EOT as being good and valid for what it had purported to confer on the Appellant. [28] With respect, we do not agree with the reasoning of the learned Judicial Commissioner that legitimate expectation ought to have been a relevant factor to consider. The relevant legislations in this appeal are the Housing Developers (Control and Licensing) Act 1966 and HDR. The Act provides for the control and licensing of the business of housing development, the protection of the interest of purchasers and for matters connected therewith. It confers the Tribunal, amongst others, the jurisdiction to hear claims for late delivery. [29] In our view, the learned Judicial Commissioner had committed a grave error when he did not appreciate the facts and the law applicable 17 before him. As a judge, in exercising judicial powers, the Judicial Commissioner must carefully examine the decision of the Tribunal not only in relation to the process, but also for substance in order to ascertain if such decision was tainted with illegality, irrationality or procedural impropriety within the principles amongst others outlined in the case of Council of Civil Service Unions & Ors v. Minister for the Civil Service [1984] 3 All ER 935; R Rama Chandran v. Industrial Court of Malaysia & Anor (supra) and Ranjit Kaur a/p S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd (supra). [30] We agreed with the submissions of the Appellants’ learned counsel that the decision of the Tribunal was rational and not acted in excess of its jurisdiction. In the light of the facts and the factual matrix of the circumstances, we are satisfied that the decision of the President of the Tribunal was not tainted with illegality, irrationality or procedural impropriety. [31] For the reasons given, we were of the unanimous view that the appeal be allowed. The order of the High Court was set aside. The decision of the Tribunal was restored. For this appeal and appeals no. 382-389 we awarded costs of RM30,000 subject to allocatur fees. For appeals no. 367 we awarded 18 costs of RM10,000 subject to allocator fees. For appeals 1246 and 1247 costs of RM10, 0000 for both appeals subject to allocator fees. Sgd Date: 09.12.2019 HASNAH DATO’ MOHAMMED HASHIM Judge Court of Appeal, Malaysia Putrajaya 19 Counsel for the Appellant Dato Khutubul Zaman Bukhari Anis Zaman Messrs Syarizad Zaman & Seah Advocate and Solicitor 5-05, Level 5, Menara Tjb, No. 9, Jalan Syed Mohd Mufti, 80000 Johor Bahru, Johor Counsel for the Respondent Messrs Thomas Philip Advocates & Solicitors Crystal Ville 2, 5-1, Jalan 22A/70A Wisma CKL, Desa Sri Hartamas, 50480 Kuala Lumpur