PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah (W-01(A)-174-03/2018)

1.

WONG KIEN CHOON …RESPONDEN RESPONDEN (Dalam Perkara mengenai Permohonan Bagi Semakan Kehakiman No. WA-25-177-07/2017 Dalam Mahkamah Tinggi Malaya di Kuala Lumpur) RAYUAN SIVIL NO: W-01(A)-31-01/2018 ANTARA PJD REGENCY SDN BHD … PLANTIF

TRIBUNAL TUNTUTAN PEMBELI RUMAH … DEFENDAN

NG CHEE KUAN 2 CORAM: VERNON ONG LAM KIAT, JCA YEW JEN KIE, JCA HAS ZANAH BINTI MEHAT, JCA

There are two appeals before us, namely: (1) Rayuan Sivil No. W-01(A)-31- 01/2018 [“Appeal No.31”] and (2) Rayuan Sivil No. W-01(A)-31-01/2018 [Appeal No. 174] wherein the same Appellant is appealing against the decision of the High Court, given on 14.12.2017, in dismissing the Appellant’s application for judicial review seeking, inter alia, an order of certiorari to quash the award No. TTPR/B/0269/17 [in Appeal No. 31] and Award No. TTPR/B/0270/17 [in Appeal No. 174] made by the 1st Respondent.

By consent, the parties have agreed that the two appeals shall be heard together as the issues involved in the two appeals are similar, and that the decision in Appeal No. 31 will bind Appeal No. 174.

The Appellant is the developer of the project “You Vista” [“the Project”] in Cheras and the 2nd Respondent was the Purchaser of an unit of housing accommodation identified as VB25-03, Type G1-1, Tower B, Level 25 [“the Property”] under the Project. The 1st Respondent is a housing tribunal. The Appellant will be referred to as the Developer, the 1st Respondent as the Tribunal and the 2nd Respondent as the Purchaser in this appeal. 3

The appeal arose from the Purchaser’s claim for compensation for the delay in the delivery of vacant possession of the Property and delay in the completion of the common facilities.

On 16.1.2013, the Purchaser entered into a Pro-Forma Sale and Purchase1 with the Developer and paid a booking fee of RM10,000.00.

6.

On 21.3.2013, the Purchaser executed the SPA2 with the Developer to purchase the Property and the purchase price was RM522,800.00. The Purchaser paid the balance of the booking fee on the same day.

Under clause 25(1) of the SPA, the Property was to be completed within 42 months from the date of the SPA.

Under clause 27(1), the common facilities are to be completed within 42 months from the date of the SPA.

By a letter dated 23.1.20173, the Developer sent a notice of vacant possession to the Purchaser stating that the construction of the Project has been completed 1 Rekod Rayuan Jilid 2B pages 348-352. 2 Rekod Rayuan Jilid 2B pages 361-391. 3 Rekod Rayuan Jilid 2B pages 425-428. 4 and delivery of vacant possession was ready, a Certificate of Completion and Compliance (“CCC”) was enclosed.

As a result of the delay, the Purchaser lodged a claim with the Housing Tribunal seeking damages in respect of (1) delay in delivery of vacant possession of the Property and (2) delay in the completion of the common facilities.

The Tribunal allowed the Purchaser’s claim and awarded the sum of RM33,000.85. The Developer applied for judicial review to quash the Award which was dismissed by the High Court. Hence, the present appeal before us.

In ascertaining the date of delivery of vacant possession the Tribunal calculated it from the date the booking fee was paid, that is, from 16.1.2013 to 23.1.2017.

In ascertaining the date of completion of the common facilities, the Tribunal also calculated it from the date the booking fee was paid, that is, from 16.1.2013 to 23.1.2017.

On the ground that the Award is unreasonable, irrational and perverse, the Developer applied for judicial review to quash the Award. 5

Before the High Court, the Developer raised the following issues:

Whether no reasons for the Award is a breach of section 16AA of the Housing Development (Control and Licensing) Act 1966 [“HDA 1966”]. [Issue (a)]

Whether the Tribunal is correct in calculating the 42 months for delivery of vacant possession from the date of payment of the booking fee, and not from the date of the SPA under clause 25(1). [Issue (b)]

Whether the Tribunal is correct in calculating the damages for delay in the delivery of the common facilities from 23.1.2017, when the CCC was issued, and not on 25.9.2016, when the Certificate of Practical Completion [“CPC”] was issued. [Issue (c)]

Learned Judge held that if the Developer is aggrieved by the Tribunal’s lack of reasons in its Award, it should have applied for a mandamus against the Tribunal to provide the reasons for its decision, instead of raising it in a submission before this Court as a basis to quash the Award. Since the Developer failed to avail itself of this remedy, this should not be a ground to nullify the Award. 6 Issue (b)

The learned Judge, after considering a plethora of case authorities,4 opined that the Tribunal did not commit any error when it held that for the purpose of ascertaining the period of delay for late delivery, the commencement date shall be the date when the booking fee was paid, and not from the date of SPA.

The learned Judge further opined that when the Purchaser failed to pay the full 10% booking fee/deposit, the Developer had the option to forfeit the deposit. But it did not do so, and instead agreed to enter into the SPA on 21.3.2013. Therefore, it had forfeited its legal right and cannot complain it at the judicial review stage.

The learned Judge did not consider the well-known industry practice that the payment of the booking fees is merely to secure an option to purchase the property, pending the procurement of a bank loan for the purchase of the properties as this issue was not raised before the Tribunal, and it should not be considered at the judicial review stage. Issue (c)

Learned Judge referred to clause 26 of the SPA and found it clearly referred to the term CCC whereas the term “Certificate of Practical Completion” is not 4 i. Faber Union Sdn. Bhd. V Chew Nyat Shong & Anor [1995] 3 CLJ 979. [“Faber Union 1”] ii. Faber Union Sdn. Bhd. V Tribunal Tuntutan Pembeli Rumah, Kementerian Perumahan Dan Krajaan Tempatan & Ors [2011] 7 CJ 37 [“Faber Union 2]. iii. Nippon Express (M) Sdn. Bhd. V Che Kiang Realty Sdn. Bhd. & Anor Appeal [2013] 7 CLJ 713. iv. Lembaman Development Sdn. Bhd. V Ooi Lai Yin & Anor and other Cases [2015] 6 CLJ 375. v. GJJH Avenue Sdn. Bhd. V Tribunal Tuntutan Pembeli Remah, Kementerian Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan [2017] 1 LNS 193. vi. Lim Eh Fah & Ors v Seri Maju Padu [2002] 4 MLJ 37. 7 to be found in the SPA. As such, the inevitable conclusion is that the reference to certificate in clause 27(1) can only refer to CCC.

There are two main issues raised in this appeal, namely: a. Whether the computation of liquidated ascertained damages [“LAD”] starts from the date of the payment of the booking fee or from the date of the SPA and payment of the 10% of the purchase price. [First Issue] b. Whether the completion of the common facilities under clause 27 is to be certified by CCC or CPC. [Second Issue] First Issue: Computation of LAD for late delivery 23. In Faber Union 1’s case,5 the Supreme Court found that clause 18 of the sale and purchase agreement in Hoo See Sen & Anor. V Public Bank Bhd & Anor6 case was similar to the one before the Court. The Court, in reference to Hoo See Seng’s case, said, “At p. 171, it was held that for the purpose of ascertaining the date of delivery of vacant possession, the relevant date when time starts to run is the date on which the purchaser paid the booking fee, and not the date of signing of the sale and purchase agreement.”

The above excerpt which appeared in Soo See Sen’s case was reported in the Supreme Court Reports 1988 under “Semble” which reads: “For the purpose of ascertaining the date of delivery of vacant possession, the relevant date is 5 See Footnote no 4 6 [1988] 2 MLJ 170 and The Supreme Court Reports 1988 135-140. 8 the date of the purchaser paid the booking fee and not the date of signing the sale and purchase agreement.”

Learned Counsel for the Developer contended that the excerpt in Hoo See Seng’s case, supra7, the only case cited and followed in Faber Union 1’s case8, supra, was merely a “Semble” or observation by the case reporter, they are not the words of the Court itself. Thus, in terms of legal precedence, an interpretation by a case reporter has not binding power over this Court.

Semble is a legal term used when discussing published opinion. The word is the Norman (and Modern) French verbal form for meaning “it seems or appears to be” or, more simple, “it seems”.9

From the careful perusal of Faber Union 1’s case, it would appear to us that the above “semble” expressed by the editor is based on the following passage which appeared at page 171 in Hoo See Sen’s case, supra. The appellants purchased a two-storey link house which was to be constructed by the second respondent for $145,000. For the purpose, the appellants and the second respondent entered into a sale and purchase agreement on 18 August 1982 by paying a booking fee of $1,000, subject to various payments including progress payments. According to clause 18 of the sale and purchase agreement, which was only signed on 18 March 1983, 7 See footnote No. 5 8 See footnote No. 4 9 En.m.wikipedia.org 9 the building was to be so constructed that the second respondent had to give vacant possession within 24 months of the date of the agreement, i.e. 24 months from the date of the payment of the booking fee (18 March 1982). This means that by 17.8.1984, vacant possession should have been delivered over to the appellant, but on that date the building was still uncompleted and no such delivery has taken place. Under the same clause, the vendor has to pay liquidated damages at the rate of 10% per annum and these damages has been calculated to amount to $36,309.58 as at 17 February 1987. Under the same clause, the second respondent “shall pay immediately to the purchaser liquidated damages to be calculated from day to day at the rate of 10% per annum of the purchase price”. It is therefore clear that the payment of liquidated damages is due every day from 17.2.1987.

From the above passage in Soo See Sen’s case10, it amply shows that even though the term in the sale and purchase agreement provided for delivery of vacant possession within 24 months from the date of the agreement, it would appear that the Supreme Court ascertained the date for delivery of vacant possession to be culculated from the date of payment of booking fee on 18 March 1982 and proceeding to ascertain the liquidated damages on that basis. That approach formed the basis of the observation of the case reporter, which was accepted and followed by the Supreme Court in Faber Union 1’s case11. 10 See footnote No. 5 11 See footnote No. 4 10

For the reason aforesaid, we find no merit in the contention that Faber Union It is not legally binding.

Indeed, the ratio decidendi in the above Faber Union 112 has been consistently followed by a series of subsequent cases whenever the Courts were called upon to determine the date from which the liquidated damages for late delivery.

The principle enunciated in Faber Union 1’s case, supra, is reiterated in a recent case of GJH Avenue, supra,13 where the High Court in dealing with the same issue on the date of delivery of vacant possession, uttered: According to clause 22(1) vacant possession is to be delivered "within twenty-four (24) calendar months from the date of this Agreement ". The central question in this dispute is: What is the date of the agreement? Is it the date on which the booking fee was paid, as contended by the 2nd and 3rdRespondents, or is it the date appearing on the SPA, as is contended by the Applicant? The 1st Respondent found that the date of agreement is the date on which the booking fee or deposit was made. Thus, the 1st Respondent calculated the 24 months for the SPA's completion from 10.11.2011, which means that vacant possession must be delivered on or before 10.11.2013. Though physical delivery of vacant possession was given on 24.2.2014, parties have agreed to take the notice date of 19.2.2014 as the 12 See Footnote No. 4 13 See Footnote No. 4. 11 date when delivery was done. As such, the 1st Respondent had calculated liquidated damages for late delivery pursuant to clause 22(2) commencing from 11.11.2013, i.e. date of contractual completion, till date of delivery of vacant possession on 19.2.2014. [10] to [11] - [where various case authorities referred to in Footnote No. 4 were considered] [14] So the law is well settled by high authority that for the purposes of determining the date of delivery of vacant possession in an agreement such as the SPA, for reasons well explained in the above cases, the date of agreement is the date when the deposit or booking fee is paid and not the date that appears on the SPA. And by the doctrine of stare decisis, these decisions of the superior courts are binding on the 1st Respondent as a lesser tribunal, as well as this court. This doctrine was reiterated by the Federal Court in Kerajaan Malaysia & Ors v. Tay Chai Huat [2012] 3 CLJ 577; [2012] MLJU 60 where the court held: The doctrine of precedent, a fundamental principle of English Law, is a form of reasoning and decision-making formed by case law. Precedents not only have persuasive authority but also must be followed when similar circumstances arise. Any principle announced by a higher court must be followed in later cases. In short the courts are bound within prescribed limits by 12 prior decisions of superior courts. Judges are also obliged to obey the set-up precedents established by prior decisions. This legal principle is called stare decisis. Adherence to precedent helps to maintain a system of stable laws. Judicial precedent means the process whereby judges follow previously decided cases where the facts are of sufficient similarity. The doctrine of judicial precedent involves an application of the principle of stare decisis, i.e., to stand by the decided. In practice, this means that inferior courts are bound to apply the legal principles set down by superior courts in earlier cases. This provides consistency and predictability in the law. Whether the cases relied on by the learned Judge are distinguishable?

Learned Counsel for the Developer contended that the learned Judge had erred in her finding of fact in holding that the booking fee of RM10,000.00 constituted 10% of the purchase price when in fact it merely amounted to 1.91% of the purchase price of the Property. It is undisputed fact that the full 10% deposit of the purchase price was only paid on 21.3.2013.

It was submitted that this erroneous finding of fact is plainly contrary to the established evidence and undoubtedly influenced the mind of the learned Judge in dismissing the Application, thereby warranting appellate intervention. 13

Learned Counsel for the Developer further contended that Faber Union 1 is distinguishable from the present case. In that case while the Supreme Court used the term “booking fees”, the calculation of the liquidated damages actually began from the payment of the 10% deposit. There was also no omission by the purchaser causing delay in the signing of the SPA. Whereas in the present case, the calculation of the liquidated damages started from the payment of mere 1.99% booking fee. Further, there was omission on the part of the Purchaser in executing the SPA notwithstanding two requests and reminders from the Developer.

The case of Lim Eh Fah’s case,14 supra, submitted learned Counsel for the Developer, is also distinguishable. In that case the calculation of the liquidated damages began from the payment of the 10% deposit and not the 1.99% booking fee as in the present case. Further, there was no delay by the Purchaser contrary to the present case where there was delay occasioned by the 2nd Respondent.

The case of Faber Union 2, supra15, submitted learned Counsel for the Developer, is distinguishable because the calculation of liquidated damages there began from the payment of the deposit and not the 1.99% booking fee as in the present case. Also, there was advertisement and oral representation made by the Developer in respect of the completion date and the Developer was estopped from contending otherwise. 14 See Footnote No. 4. 15 See Footnote No. 4 14

We take note of paragraphs [30] of the Grounds of Decision16 which shows that the learned Judge was mindful of the Developer’s Counsel contention that the Purchaser had not fully paid the 10% of the purchase price [the booking fee] and that he only paid the balance sum on 21.32013, when he signed the

Having thus observed, the learned Judge opined that the Developer could have, upon failure on the part of the Purchaser to pay the full 10% of the purchase price, exercised the option to forfeit the deposit. Since it did not do so and having agreed to enter into the SPA, it had lost its legal right and cannot complain on it now.

Learned Counsel for the Developer has painstakingly distinguished the “10% deposit” and “1.99% booking fee”. In our considered view, the terms deposit and booking fee and for that matter, the term “advance payment” as used in the Pro-Forma Sale and Purchase are sematic and they mean the same and one thing, that is, a commitment fee to purchase the property.

Learned Counsel for the Developer harped on failure on the part of the Purchaser to execute the SPA and pay in full the 10% of purchase price [as deposit] on or before 30.1.2013. We have carefully perused the terms of the Pro-Forma Sale and Purchase17 and unable to find any terms therein to show that the Purchaser was required to pay the balance of 10% of the purchase price before the signing of the SPA. Clause 4 of the Pro-Forma Sale and Purchase merely required the Purchaser to sign the SPA and Deed of Mutual 16 Page 22 of the Grounds of Decision/page 113 of Rekod Rayuan Tambahan. 17 Rekod Rayuan Jilid 2B pages 348 to 349. 15 Covenant within 14 days of the offer to purchase. The first time the issue of payment of the balance of 10% of the purchase price was ever mentioned was in the Developer’s letter dated 25.5.201318written to the Purchaser requesting the Purchaser to execute the SPA and to settle the balance of the 1st 10% of the purchase price within 14 days from the date of the letter.

In our considered view, since the Purchaser was not required to pay 10% of the purchase price under the term of the Pro-Forma Sale and Purchase, the issue of RM10,000.00 that was paid constituted only 1.99% of the purchase price is a non-starter. The Purchaser having paid RM10,000.00 as the booking fee, on the high authority of Faber Union 1, supra19, the calculation of LAD begins from the date the booking fee was paid, that is, 16.1.2016.

Clause 4 of the Pro-Forma Sale and Purchase clearly stated that if the Purchaser failed to execute the SPA within 14 days from the date of the offer to purchase, that is, 16.1.2016, the Developer had the option to forfeit the initial payment and resell the Property.

As rightly observed by the learned Judge, the Developer having waived its remedy under clause 4 and elected to proceed with executing the SPA, it does not lie in its mouth to complain about delay on the part of the Purchaser to execute the SPA.

Learned Counsel for the Developer further contended that the payment of the booking fee of RM10,000.00 is merely to secure an option to purchase the 18 Rekod Rayuan Jilid 2B page 360. 19 See Footnote No. 4 16 Property pending the procurement of a bank loan for financing purpose and therefore the date of payment of booking fee cannot be used for the purpose of calculating the time of delivery of vacant possession.

We respectfully disagree with above contention. In our considered view, it is amply clear from clause 1 of the SPA that payment of the booking fee and accepted by the Developer indicates an offer and acceptance, each with its respective responsibilities that must be fulfilled in accordance within provision of the SPA. In other words, a contract had been made. Accordingly, the Developer was obligated to build, deliver and hand over vacant possession within the agreed period to the Purchaser.

We fortify our view with Lim Eh Fah’s case, supra 20, where the High Court held: One must bear in mind that the date of 17 July 1992 i.e., 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. …… 20 See Footnote no 4. 17 ……The purpose of a deposit is to indicate offer and acceptance, each with its respective responsibilities that must be fulfilled in accordance with the provisions of the sale and purchase agreement. Accordingly, the respondent was obligated to build, deliver and hand over vacant possession within the agreed period to the appellants.

We are mindful that the Developer did not act “nily wily” and had no part in delaying the execution of the SPA. However, it is the settled law that the ascertainment of LAD for late delivery of vacant possession starts to run from the date the deposit or booking fee is paid.

As such, we are unable to agree that the learned Judge had erred in her decision on the First Issue. Second Issue: Computation date of completion of common facilities 49. Learned Counsel for the Developer contended that the learned Judge was misconceived in holding that the date of CCC would equally apply to determine the date of completion of the common facilities for the following reasons:

Clause 27 of the SPA [concerning common facilities] does not make any reference to the CCC as compared with clause 26 of the SPA, and

Clause 27 merely states that the common facilities shall be completed within 42 months from the date of the agreement and certified by the Developer’s architect. 18

It was submitted that the intentional exclusion of the CCC in clause 27, a term in a statutory contract, undoubtedly means that Parliament intended that CCC to have no bearing in determining the date of completion of the common facilities, citing Merck KGaA V Leno Marketing (M) Sdn. Bhd. (Registrar of Trade Marks, interested party) [2018] 5 MLJ 1 (FC).

It was submitted that the date of completion of the common facilities ought to be the date of the CPC, which was duly certified by the Developer’s architect on 25.9.2016.

The determination of this issue revolves on the interpretation of clause 27(1) of the SPA, that is, whether the certificate under this clause is the CCC [issued on 23.1.2017] or CPC [issued on 25.9.2016].

Clause 27(1) of the SPA states: The common facilities serving the said housing development shall be completed by the Vendor within forty-two (42) calendar months from the date of this Agreement. The Vendor’s architect shall certify the date of completion of the common facilities. [Underline added]

Clause 35(c) of the SPA defines the term CCC as follows: Certificate of completion and compliance means the certificate of completion and compliance given or granted 19 under the Street, Drainage and Building Act 1974 and any by-law made under that Act certifying that the housing accommodation has been completed and is safe and fit for occupation but does not include partial certificate of completion and compliance

The term CCC was referred to in clause 26 of the SPA which states:

The Vendor shall let the Purchaser into possession of the said Parcel upon the following:- a) the issuance of a certificate of completion and compliance certifying that the said Building has been duly constructed and completed in conformity with the approved plans and the requirements of the Street, Drainage and Building Act 1974 and any by-laws made thereunder; b) …. c) ….

The delivery of vacant possession by the Vendor shall be supported by a certificate of completion and compliance certifying that the said Building is safe and fit for occupation and includes the handing over of the keys of the Parcel to the Purchaser.

It is to be noted that the term CPC is not mentioned in the SPA. 20

We have no reason to disagree with learned Counsel for the Purchaser’s submission and the observation of the learned Judge that CPC is issued by Developer’s Architect to the main contractor in the building contract signed between the main contractor and the Developer to show that the building has been completed to the satisfaction of the Developer’s Architect. While, a CCC is issued by the Developer’s Architect to certify that the property together with the common facilities has been constructed and completed in conformity with the approve plans and requirements of the Street, Drainage and Building Act 1974 and its by-laws.

We further agree with learned Counsel for the Purchaser who submitted that regards being had to the objection of the HDA 1966 which is to provide protection of the interest of Purchaser, clause 27 of the SPA must be given an interpretation in favour of the Purchaser.

The intention of the Act was well articulated in the following cases: a. City Investment Sdn. Bhd. V Koperasi Serbaguna Cuepacs Tanggungan Bhd 21, the Privy Council uttered: The Housing Developers (Control and Licensing) Rules 1970 were made pursuant to section 24 of the Act of 1966. This enables regulation to be made for the purpose of carrying into effect the provisions of the Act including the regulation of conditions and terms of any 21 [1988] 1 MLJ 21 contract between a licensing housing developer and his purchasers. b. Tang Ong Ban v Teoh Kim Heng22, the Federal Court held: We agree with Counsel for the first defendant that the intention of the Act as well as the subsequent enactment and the subsidiary legislations is merely protecting the intended purchasers. c. Sentul Raya Sdn. Bhd. v Hariram Jayaram & Ors23, the Court of Appeal observed: While parties in normal cases of contract have freedom to make provisions between themselves, a housing Developer does not enjoy such freedom. Hence, parties to a contract in Form H cannot contract out of the scheduled form. Terms more onerous to a purchaser may not be imposed. So too, terms imposing additional obligations on the part of a purchaser may not be included in the statutory form of contract.

Hence, we agree with the submission of learned counsel for the Purchaser that the proper certification is the CCC and not the CPC. It is consistent with the notion that the completion and handover of the unit of housing accommodation to the Purchaser should coincide with completion of the 22 [2016] 3 cj 193 23 [2008] 4 CLJ 618. 22 common facilitates which had been constructed and completed in compliance with the building by laws and building plans.

In the premise, we find no merit in the Second Issue. Conclusion 62. For all the reasons aforesaid, it is our unanimous decision that there is no merit in the appeal. Order of the High Court dated 14.12.2017 is affirmed. Both appeals are dismissed with costs of RM10,000.00 for each appeal subject to allocator fee. Deposit to be refunded. Dated: 22 August 2019 Sgd YEW JEN KIE (delivering judgment of the Court) Court of Appeal Judge Putrajaya For Appellant: BAHARI YEOW [LEE HISHAMMUDDIN ALLEN & GLEDHILL] For Respondents: DATO K L WONG [K L WONG] Notice: This copy of the court’s reasons for judgment is subject to editorial revision.