Eco Green City Sdn Bhd v 1. ) Tribunal Tuntutan Pembeli Rumah (BA-25-57-08/2021)

1.

AHMED FARIS FAZEEN BIN CHE ZULKIFLI (No. K/P: 891217-03-5223)

HELZA SYAFINAZ BINTI ABDUL HALIM (No. K/P: 910807-10-6424) …RESPONDEN-RESPONDEN 03/08/2022 16:01:54 Kand. 15 [1] This is an application for judicial review pursuant to Order 53 of the Rules of Court 2012 against the award made by the First Respondent on 24.5.2021. Background Facts [2] The Applicant is the Developer under a Sale and Purchase Agreement dated 3.5.2017 (“the SPA”) for the sale and purchase of a property known as Parcel No.: 56-U, Project: Casa Bluebell @ Cybersouth under Title No. H.S. (D) 43588, PT 54588, Mukim of Dengkil, District of Sepang, State of Selangor Darul Ehsan (“the Property”). [3] The Second and Third Respondents are the purchasers under the SPA (“the Purchasers”). [4] Clause 25 (1) of the SPA stated that the date of delivery of vacant possession of the Property by the Applicant to the Purchasers was 2.6.2020. [5] Subsequently, due to the Covid-19 pandemic, the Government enacted the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (“Covid-19 Act”). Subsection 35(1) of the Covid-19 Act provides that the period from 18.3.2020 to 31.8.2020 shall be excluded from the calculation of the following:

the time for delivery of vacant possession of a housing accommodation; and

the liquidated damages for the failure of the developer to deliver vacant possession of a housing accommodation. [6] On 4.12.2020, the Applicant received a letter from the Ministry of Housing & Local Government (“the Ministry”) informing the Applicant that pursuant to the provisions under the Covid-19 Act, the Applicant had been granted an exemption of 167 days (i.e. from 18.3.2020 to 31.8.2020) for the delivery of vacant possession of the Applicant’s housing development projects. [7] Vide by an email from an officer of the Ministry dated 15.12.2020, the Applicant received confirmation that Project Casa Bluebell under which the Property was constructed, had received an extension of time of 167 days for delivery of vacant possession, and in this regard, the date of delivery of vacant possession had been extended to 7.11.2020. [8] The Applicant had, by a letter dated 15.3.2021, informed the Purchasers of the extension of time that had been granted by the Ministry under the Covid-19 Act. [9] The Applicant delivered vacant possession of the Premises to the Purchasers on 30.10.2020. [10] The Purchasers commenced a claim against the Applicant before the First Respondent on 23.4.2021 for the sum of RM32,833.57 for the alleged late delivery of vacant possession of the Property to the Purchasers. [11] This claim of RM 32,833.57 was premised on the date of the vacant possession of the property under the SPA which is 2.6.2020 and the date of delivery of vacant possession by the Applicant on 26.12.2020. Based on this dates, the delayed delivery of vacant possession amount to 206 days and total liquidated ascertained damages of RM 32,833.57. [12] At the hearing of the Tribunal of Housing, the First Respondent awarded the Respondents the sum of RM 7,969.31 as liquidated ascertain damages to be paid by the Applicant. This amount reflected a delay of 60 days for the period 1.9.2020 to 30.10.2020. [13] The Applicant argued that the First Respondent has erred in law and acted in excess of its jurisdiction by disregarding the above stated provisions of the Covid-19 Act and the approval given by the Ministry and hence file this judicial review application. Principles relating to Judicial Review [14] To elucidate the principles of judicial review, reference was made to the Federal Court case of R Rama Chandran v Industrial Court of Malaysia & Anor [1997] 1 CLJ 147 where Edgar Joseph Jr. FCJ stated the following: “It is often said that judicial review is concerned not with the decision but the decision making process. (See, e.g. Chief Constable of North Wales v. Evans [1982] 1 WLR 1155). This proposition, at full face value, may well convey the impression that the jurisdiction of the Courts in judicial review proceedings is confined to cases where the aggrieved party has not received fair treatment by the authority to which he has been subjected. Put differently, in the words of Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service [1985] Peraturan-Peraturan Cukai Barang dan Perkhidmatan 2014 374, where the impugned decision is flawed on the ground of procedural impropriety. But, Lord Diplock’s other grounds for impugning a decision susceptible to judicial review makes it abundantly clear that such a decision is also open to challenge on grounds of ‘illegality’ and ‘irrationality’ and, in practice, this permits the Courts to scrutinise such decisions not only for process, but also for substance. In this context it is useful to not how Lord Diplock defined the three grounds of review, to wit, (i) illegality, (ii) irrationality and (iii) procedural impropriety. This is how he put it: By ‘illegality’ as a ground for judicial review I mean that the decision maker must understand directly the law that regulates his decision making power and must give effect to it. Whether he has or not is par excellence a justiciable question to be decided in the event of a dispute, by those persons, the Judges, by whom the judicial power of the state is exercisable. By 'irrationality' I mean what can by now be succinctly referred to as 'Wednesbury unreasonableness' (see Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223). It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it. Whether a decision falls within this category is a question that Judges by their training and experience should be well equipped to answer, or else there would be something badly wrong with our judicial system. To justify the Courts' exercise of this role, resort I think is today no longer needed to Viscount Radcliffe's ingenious explanation in Edwards (Inspector of Taxes) v. Bairstow [1956] AC 14, of irrationality as a ground for a Court's reversal of a decision by ascribing it to an inferred though undefinable mistake of law by the decisionmaker. 'Irrationality' by now can stand on its own feet as an accepted ground on which a decision may be attacked by judicial review. I have described the third head as 'procedural impropriety' rather than failure to observe basic rules of natural justice or failing to act with procedural fairness towards the person who will be affected by the decision. This is because susceptibility to judicial review under this head covers also failure by an administrative tribunal to observe procedural rules that are expressly laid down in the legislative instrument by which its jurisdiction is conferred, even where such failure does not involve any denial of natural justice. Lord Diplock also mentioned 'proportionality' as a possible fourth ground of review which called for development.” [15] To recapitulate, executive or administrative decisions may be judicially reviewed on the grounds of illegality, irrationality and procedural impropriety. Founded on the principles of judicial review, this court will now proceed to consider this judicial review application. DELIBERATION [16] For this court to consider the arguments put forth by parties, it would be prudent to consider the relevant provision of the Covid-19 Act. Section 35 of the Covid-19 Act provides as follows: “35. (1) Notwithstanding any agreement entered into between the purchaser and the developer, the period from 18 March 2020 to 31 August 2020 shall be excluded from the calculation of –

the time for delivery of vacant possession of a housing accommodation; and

the liquidated damages for the failure of the developer to deliver vacant possession of a housing accommodation.

The developer may apply to the Minister for an extension of the period referred to in subsection (1)

Upon considering the application under subsection (2), the Minister may, if the Minister is satisfied that additional time is required by the developer to deliver vacant possession, by written direction grant to the developer an extension period of up to 31 December 2020 to deliver vacant possession and such extension shall have the same effect as the period excluded in subsection (1).

Notwithstanding any agreement entered into between the purchaser and the developer, if the purchaser is unable to enter into possession of occupation of a housing accommodation from the date of service of a notice to take vacant possession from the developer during the period from 18 March 2020 to 31 August 2020 or any extension period granted under subsection (3), the purchaser shall not be deemed to have taken such vacant possession.” [17] A reading of section 35 of the Covid-19 Act provides that from 18.03.2020 to 31.08.2020, the calculation of the time for delivery of vacant possession and the liquidated damages for the failure to deliver vacant possession shall be excluded. [18] The question begore this court is whether the Covid-19 Act would be applicable to the SPA. In the event this court finds that the Covid-19 Act is applicable, the next question relates to how the calculation is to be made. [19] The facts in this case is the date of the SPA is 3.6.2017. The date for delivery of vacant possession based on the SPA is 2.6.2020. Section 35 of the Covid-19 Act excludes the period of 18.03.2020 to 31.8.2020. It can be deduced from the dates mentioned that at the time of exclusion of the Covid-19 Act, the SPA was valid. This is because the original date of vacant possession under the SPA 2.6.2020 is within the period of 18.03.2020 to 31.8.2020. [20] Reference is made to the case of Yap Heng Sang v Mammoth Empire Land Sdn Bhd [2021] MLJU 256 where the court stated: “[32] From the plain reading of the above section 35 of the Covid19 Act, this Court is of the considered view that the operative words are “the time for delivery of vacant possession” found in section 35(1)(a), and this could only be determined under clause 25(1) of the SPA. In the present case, as explained above, the time for delivery of vacant possession was supposed to be on 9.3.2015 (the extended date). However, the extended date did not fall within the exclusion period, i.e., from 18.3.2020 and 31.8.2020. Hence, section 35 of the Covid19 Act could not apply. [33] Subsection (1)(a) must be read together with subsection

(1)(b) because the conjunctive word used is “and”. When both subsections are read together, the section envisages a situation where the time for delivery of vacant possession (as determined in clause 25(1) of the statutory sale and purchase agreement) had not set in before 18.3.2020, and because the Movement Control Orders (MCO) prevented the developer from completing the development which resulted in a delay and consequence liquidated damages is imposed against the developer for the delay to deliver vacant possession, such calculation of liquidated damages will exclude the exclusion period. [34] The above meaning could be bolstered by further reading the wording in subsection (2) which allows a developer to apply to the Minister for an extension of the period referred to in subsection (1). This means in the event “the calculation of the time for delivery of vacant possession” falls within the exclusion period, and the developer is further hampered by the imposition of MCO to deliver vacant possession during the exclusion period, the developer may ask for the exclusion period to be extended until 31.12.2020 (see subsection (3) of the Covid19 Act).” [35] The application of the exclusion period or extended exclusion period could not be meant for a situation where the time for delivery of vacant possession had set in and a developer was already in breach of its obligation to deliver vacant possession even before the Covid19 Act came into force on 18.3.2020. The law should assist the innocent, not the one who is/was already in the wrong.” [21] The question before this court therefore is pertaining to calculation. Based on a letter from the Ministry dated 4.12.2020, the Applicant had been granted an exemption of 167 days for the delivery of vacant possession of the Applicant’s housing developments projects. [Exhibit C of Enclosure 3]. According to the letter dated 4.12.2020 from the Ministry, the calculation of the exclusion of 167 days of from the date of vacant possession provided in the SPA. Here, the date is 2.6.2020. [22] The new vacant possession date as per the letter date 4.12.2020 is 167 days from 2.6.2020. This means the new vacant possession date is 7.11.2020, Exhibit E of Enclosure 3 is a letter from the Applicant to the Purchasers. This letter dated 30.10.2020 was for vacant possession to be delivered. [23] The applicant delivered vacant possession to the Purchasers on 30.10.2020. The new vacant possession date is 7.11.2020. It is apparent to this court that the delivery of vacant possession to the Purchasers were within the period of the new vacant possession date of 7.11.2020. [24] It is evident to this court that the First Respondent has erred in law and acted in excess of its jurisdiction in awarding liquidated ascertained damages for the alleged late delivery of vacant possession of the Property of 60 days (from 1.9.2020 to 30.10.2020). The First Respondent had failed to exclude the period from 18.3.2020 to 31.8.2020 from the calculation of the time for delivery of vacant possession of Property as provided under Section 35(1) of the Covid-19 Act. [25] Based on the foregoing, this court finds there is merit to this judicial review. Conclusion [26] This court thus grants an order for certiorari against the award of the First Respondent with no order as to costs. Date: 3rd August 2022 (SHAHNAZ BINTI SULAIMAN) Judge High Court of Malaya, Shah Alam Counsel: For The Applicant: Niak Hiong Keong & Sabin Ann Thomas Tetuan Christoper & Lee Ong Advocates & Solicitors Tingkat 22, Axiata Tower No. 9, Jalan Stesen Sentral 5, Kuala Lumpur Sentral 50470 Kuala Lumpur CLO-info@christopherleeong.com +6 03 2273 1919 For the Respondent: SFC Helza Syafinaz binti Abdul Halim Jabatan Peguam Negara, Bahagian Guaman, Aras 6, No. 45, Persiaran Perdana, Presint 4 Putrajaya +6 03 8872 2000