Sri Damansara Sdn. Bhd. v 1. Tribunal Tuntutan Pembeli Rumah (BA-25-50-08/2017)

Content

1 IN THE HIGH COURT OF MALAYA AT SHAH ALAM IN THE STATE OF SELANGOR DARUL EHSAN, MALAYSIA JUDICIAL REVIEW APPLICATION NO: BA-25-50-08/2017 BETWEEN SRI DAMANSARA SDN. BHD. (Co. No.: 110516-H) … APPLICANT

Schedule

Schedule H. This begs the question whether by empowering the Controller to waive or modify the conditions and terms of the contract, the Minister has exceeded the scope of the authority conferred on him by the legislature? In other words, by empowering the Controller, through regulation 11(3), has there been an act of sub-delegation by the Minister to the Controller which is ultra vires [HDA]? … 11 [36] By s 24(2)(e) [HDA], the Minister is empowered or given the discretion by Parliament to regulate and prohibit the terms and conditions of the contract of sale. As opined by the learned authors in De Smith’s Judicial Review, a discretion conferred by statute is prima facie intended to be exercised by the authority on which the statute has conferred it and by no other authority, but the presumption may be rebutted, by any contrary indication found in the language, scope or object of the Act. In our view, having regard to the object and purpose of [HDA], the words “to regulate and to prohibit” in subsection 24(2)(e) should be given a strict construction, in the sense that the Minister is expected to apply his own mind to the matter and not to delegate that responsibility to the Controller. … [40] [HDA] being a social legislation designed to protect the house buyers, the interests of the purchasers shall be the paramount consideration against the developer. Parliament has entrusted the Minister to safeguard the interests of the purchasers and the Minister has prescribed the terms and conditions of the contract of sale as per Schedule H. We find no contrary indication in the language, scope or object of [HDA] that such duty to safeguard the interests of the purchasers may be delegated to some other authority. … [55] Finally, on the third task. In the instant appeals, the Schedule H contract of sale prescribed by [HDR] is to carry into effect the provisions of [HDA], which is to protect the interests of the purchasers. The [HDR] made by the Minister must thus achieve the object of protecting the interests of the purchasers and not the interests of the developers. And at the risk of repetition, the duty to protect the interests of the purchasers is entrusted to the Minister. 12 [56] By delegating the power, vide regulation 11(3) to the Controller to waive or modify the prescribed terms and conditions of the sale of contract, it is now the Controller who has been entrusted to regulate the terms and conditions of the contract of sale. Further, by modifying the prescribed terms and conditions and by granting the developer the extension of time, the Controller has denied the purchasers’ right to claim for LAD. This modification and the granting of extension of time to the developer, does not appear to us to protect or safeguard the purchasers but rather the developer and this militates the intention of Parliament. … [60] On the above analysis, we hold that the Controller has no power to waive or modify any provision in the Schedule H contract of sale because section 24 [HDA] does not confer power on the Minister to make regulations for the purpose of delegating the power to waive or modify the Schedule H contract of sale to the Controller. And it is not open to us to read into the section an implied power enabling the Minister to do so. We consequently hold that regulation 11(3) [HDR], conferring power on the Controller to waive and modify the terms and conditions of the contract of sale is ultra vires [HDA].” (emphasis added). 19. As a matter of stare decisis, the Federal Court’s judgment in Ang Ming Lee is binding on me. As decided in Ang Ming Lee, reg. 11(3) HDR is ultra vires HDA. If reg. 11(3) HDR is invalid, the Controller’s Extension which is made pursuant thereunder, is also invalid. 20. It is to be emphasized that even if parties and their learned counsel do not allude to any illegality, the court is duty bound to take cognizance of 13 an illegality. It is contrary to public policy for the court to allow an illegality to be perpetrated. In Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd [1989] 1 MLJ 457, at 460-462, the breach of s 5(1) HDA was only raised for the very first time during the hearing of the appeal before the Privy Council. Despite the fact that the illegality issue had not been pleaded and raised in the High Court and the then Federal Court, the Privy Council in a judgment delivered by Lord Oliver, allowed such a question to be raised. The Privy Council then remitted the illegality issue to be considered by our Supreme Court (at the time of the decision of the Privy Council, appeals to the Privy Council for civil matters had been abolished and our Supreme Court had already been inaugurated as the apex court). Needless to say, learned counsel are duty bound as officers of the court to administer justice and to draw the attention of the court to any issue of illegality at the earliest opportunity. 21. Before I discuss the next issue, I should point out two disturbing features regarding the Controller’s Extension as follows: (1) the Applicant did not exhibit the Extension of Time Application in Enc. 50. Hence, this court does not know the reasons (if any) why the Applicant has made the Extension of Time Application; and (2) the Controller’s Extension stated in the National Language, among others, as follows - “… 2. Adalah dimaklumkan bahawa setelah meneliti permohonan tuan untuk meminda Jadual H (Perjanjian Jual Beli) di bawah Peraturan 14 11 Peraturan-peraturan Pemajuan Perumahan (Kawalan dan Pelesenan) 1989 jabatan ini hanya meluluskan lanjutan serahan milikan kosong selama 6 bulan iaitu daripada 36 bulan kepada 42 bulan.” No reasons had been given by the Controller for the Controller’s Extension. It is contrary to good government for an executive decision to be made without any reason. Worse still, when the executive decides a matter without any reason, such a decision may be arbitrary and unjust. D. Are parties to SPA bound by 36 Months Period? 22. As the Controller’s Extension is invalid (please refer to the above paragraph 19), the 42 Months Period cannot apply in this case. By virtue of reg. 11(1) HDR, the SPA “shall be in the form prescribed in Schedule H”. Consequently, all the parties in this case are bound by the 36 Months Period as provided in Schedule H. This is clear from the use of the mandatory term “shall” in reg. 11(3) HDR. E. How to compute 36 Months Period? 23. Learned counsel for the 2nd and 3rd Respondents has contended that the 36 Months Period as provided in Schedule H should commence from the date of Part Payment and not from the date of SPA. Reliance has been placed on the following cases, among others: 15 (1) the Supreme Court’s judgment delivered by Salleh Abas LP in Hoo See Sen & Anor v Public Bank Bhd & Anor [1988] 2 MLJ 170, at 171; (2) Eusoff Chin CJ’s decision in the Supreme Court case of Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 2 MLJ 597, at 599; (3) the judgment of Suriyadi Halim Omar J (as he then was) in the High Court in Lim Eh Fah & Ors v Seri Maju Padu [2002] 4 CLJ 37, at 40-41; and (4) the decision of Collin Lawrence Sequerah JC (as he then was) in the High Court case of Lembaman Development Sdn Bhd v Ooi Lai Yin & Anor and other cases [2015] 6 CLJ 375, at [8]-[10]. 24. The Applicant’s learned counsel has advanced the submission that the 36 Months Period should run from the date of SPA and not from the date of Part Payment. The following cases have been cited in support of the above contention: (1) the decision of Rhodzariah Bujang JCA in the Court of Appeal in Kompobina Holding Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor [2017] 1 LNS 2034, at [2]-[6]; (2) the Court of Appeal’s judgment delivered by Zaleha Yusof JCA (as she then was) in GJH Avenue Sdn Bhd v Tribunal Tuntutan 16 Pembeli Rumah & Ors [2019] 1 LNS 1184, at [24], [25], [27], [28], [30], [33], [35], [36] and [38]; and (3) Faizah Jamaludin J’s decision in the High Court case of Hedgeford Sdn Bhd v Lynda Quah May Lu & Anor [2019] 1 LNS 647, at [62] and [69]-[72]. 25. Firstly, the sale and purchase agreements in Hoo See Sen and Faber Union were concluded before the introduction of Schedule H - please see GJH Avenue, at [27]. As such, the Supreme Court decisions in Hoo See Sen and Faber Union do not apply in the construction of Schedule H. 26. Secondly, I accept the Applicant’s submission that the 36 Months Period shall run from the date of the SPA and not from the date of Part Payment or any other date. This decision is based on the following reasons: (1) the words in clauses 25(1) and 27(1) of Schedule H [thirty-six (36) calendar months from the date of this Agreement] are clear - please refer to GJH Avenue, at [24], [28] and [30]. In other words, a literal interpretation of Schedule H supports the interpretation that the 36 Months Period can only commence from the date of SPA; (2) if I have decided that the 36 Months Period commences from the date of Part Payment (before the signing of the SPA) - 17 (a) this will render redundant the express words “thirty-six (36) calendar months from the date of this Agreement” in clauses 25(1) and 27(1) of Schedule H; and (b) this means that the parties to the SPA, in particular housing developers, are allowed to contract out of Schedule H - please see GJH Avenue, at [36]; and (c) the interest of a “homebuyer” (as defined in s 16A HDA) may be adversely affected as explained in Hedgeford, at [71], as follows - “[71] In my view, if as held by the Tribunal, the date of the of the sale and purchase agreement is the date of the payment of the booking fee, it means that there exists a binding contract for the sale and purchase of the property between the purchaser and the developer at the date of payment of the booking fee. The purchaser would accordingly be bound to complete the purchase of the property. If the purchaser changes his mind and decides not to purchase the property and not to execute the formal contract in the form of contract in Schedule H, the purchaser would be in breach of the sale and the purchase agreement since the agreement had already come into being when he paid the booking fee. In such a situation, the purchaser would be liable to the housing developer for any loss, damage or costs suffered for breach of contract, instead of just forfeiting the booking fee paid, for not proceeding with the purchase of the property for which he 18 had paid the booking fee. Clearly such an outcome cannot be the legislative intent of the HDA, which long title … states that it is: "An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia and the Federal Territory of Labuan, the protection of the interest of purchasers and for matters connected therewith." ” (emphasis added); and (3) in this case, the Part Payment was made by the 2nd Respondent only as the sole purchaser of the Parcel (at that time). Subsequently, by way of the 2nd Respondent’s Letter, the 2nd Respondent applied to the Applicant for the 3rd Respondent to be added as a co-purchaser of the Parcel (together with the 2nd Respondent). The SPA was then signed by the 2nd and 3rd Respondents as co-purchasers of the Parcel. In the circumstances, it is unjust to allow the 2nd and 3rd Respondents to rely on the Part Payment when there was no contract at the time of the Part Payment between the 2nd and 3rd Respondents (as co-purchasers of the Parcel) on the one part and the Applicant on the other part. 27. Premised on the reasons explained in the above paragraphs 25 and 26, the 1st Respondent had committed an error of law in deciding that the 42 Months Period commenced from the date of Part Payment (Illegality) - please refer to GJH Avenue, at [33]. 19 F. Whether 1st Respondent should have considered Rebate 28. The 1st Respondent’s Decision was made without taking into account the Rebate. I am of the view that the Rebate is a relevant matter which should have been considered by the 1st Respondent because - (1) when the Applicant offered a Rebate to the 2nd and 3rd Respondents which was accepted by the 2nd and 3rd Respondents, there was a bilateral variation of the Price. This bilateral variation is valid - please see the judgment of the Supreme Court delivered by Peh Swee Chin FCJ in Paul Murugesu s/o Ponnusamy (as representative of Nalamah d/o Sangapillay, deceased) v Cheok Teoh Gong & Ors [1996] 1 MLJ 843, at 853; and (2) by not taking into account the Rebate, the 1st Respondent is unjustly enriching the 2nd and 3rd Respondents to the detriment of the Applicant. The doctrine of unjust enrichment has been recognized as a cause of action in itself - please refer to the Federal Court’s judgment delivered by Azahar Mohamed FCJ (as he then was) in Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441, at [110], [117] and [118]. 29. When the 1st Respondent’s Decision was made without considering the Rebate, the 1st Respondent’s Decision is “irrational” (1st Irrationality) and may be quashed by a certiorari order - please see the Federal Court’s judgment delivered by Raus Sharif FCJ (as he then was) in 20 Ranjit Kaur S. Gopal Singh v Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629, at [15]-[17] and [19]. G. Should 1st Respondent consider Counterclaim? 30. The Applicant had filed a Counterclaim. Even if the 1st Respondent had allowed the Claim, it was incumbent on the 1st Respondent to consider and decide the Counterclaim. Regrettably, the 1st Respondent had failed to do so (2nd Irrationality). H. Whether 1st Respondent had failed to consider Claim based on Applicant’s delay in completing Common Facilities 31. The 1st Respondent’s Decision stated as follows (in our National Language): “Tindakan ini telah didengar di hadapan [Dato’ Cheah] pada 23 Jun 2017 di Putrajaya, Tribunal dengan ini memerintahkan: Pihak Penentang hendaklah membayar Pihak Yang Menuntut jumlah sebanyak RM41,134.22 … sebagai gantirugi kelewatan penyerahan milikan kosong. …” (emphasis added). 32. The 1st Respondent had actually awarded liquidated damages (Award) only for the Applicant’s delay in delivering vacant possession of the Parcel (1st Claim). The 1st Respondent’s Decision completely omitted the Applicant’s delay in completing the Common Facilities (2nd Claim). 21 Consequently, the 1st Respondent’s Decision is irrational for omitting the 2nd Claim as another basis for the Award (3rd Irrationality). I. Should court exercise discretion to grant a certiorari in this case? 33. It is trite law that the court has a discretion to grant a certiorari order - please see the Federal Court’s judgment delivered by Gopal Sri Ram JCA (as he then was) in Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia & Anor [1995] 3 MLJ 369, at 393. 34. In view of the Illegality and the 1st to 3rd Irrationality, I have no hesitation to exercise my discretion to issue an order of certiorari to quash the 1st Respondent’s Decision. J. Whether court should grant a mandamus or award liquidated damages to 2nd and 3rd Respondents 35. As explained in the above paragraph 34, the 1st Respondent’s Decision is quashed by this court. The question that now arises is whether the court should order - (1) a mandamus order to direct the 1st Respondent (presided by a member of the 1st Respondent other than Dato’ Cheah) to hear afresh the Claim based on the above grounds of judgment (2nd Hearing); or (2) payment of liquidated damages by the Applicant to the 2nd and 3rd Respondents (according to the above grounds of judgment) 22 pursuant to s 25(1), (2) CJA and paragraph 1 of the Schedule to CJA (Paragraph 1) read with O 1A, O 2 r 1(2) and O 53 r 2(3) RC. 36. I reproduce below s 25 CJA, Paragraph 1, O 1A, O 2 r 1(2) and O 53 r 2(3) RC: “CJA Powers of the High Court 25(1) Without prejudice to the generality of Article 121 of the Constitution the High Court shall in the exercise of its jurisdiction have all the powers which were vested in it immediately prior to Malaysia Day and such other powers as may be vested in it by any written law in force within its local jurisdiction. (2) Without prejudice to the generality of subsection (1) the High Court shall have the additional powers set out in the Schedule: Provided that all such powers shall be exercised in accordance with any written law or rules of court relating to the same. Paragraph 1 Prerogative writs Power to issue to any person or authority directions, orders or writs, including writs of the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any others, for the enforcement of the rights conferred by Part II of the Constitution, or any of them, or for any purpose. RC Regard shall be to justice O 1A In administering [RC], the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with [RC]. 23 O 2 r 1(2) [RC] are a procedural code and subject to the overriding objective of enabling the Court to deal with cases justly. The parties are required to assist the Court to achieve this overriding objective. O 53 r 2(3) Upon the hearing of an application for judicial review, the Court shall not be confined to the relief claimed by the applicant but may dismiss the application or make any orders, including an order of injunction or monetary compensation: Provided that the power to grant an injunction shall be exercised in accordance with the provisions of section 29 of the Government Proceedings Act 1956 and section 54 of the Specific Relief Act 1950.” (emphasis added). 37. Firstly, cases decided before the introduction of O 1A, O 2 r 1(2) and O 53 r 2(3) RC should be read with caution. With the advent of O 1A, O 2 r 1(2) and O 53 r 2(3) RC, the court has wide powers in Judicial Review applications to make any order in the interest of justice. 38. Secondly, the CJA has been revised under the Revision of Laws Act 1968. As such, Part I of the Interpretation Acts 1948 and 1967 (IA) applies to the CJA - please see s 2(1)(b) IA. Section 3 IA (in Part I of IA) defines “written law” to include subsidiary legislation, such as RC. Accordingly, O 1A, O 2 r 1(2) and O 53 r 2(3) RC constitutes “written law” in s 25(1) CJA which vests wide powers in the High Court to grant any order in the interest of justice. 24 39. Thirdly, even before the introduction of O 1A, O 2 r 1(2) and O 53 r 2(3) RC, the majority judgment of the Federal Court (by Eusoff Chin CJ and Edgar Joseph Jr FCJ) in R. Rama Chandran v Industrial Court of Malaysia & Anor [1997] 1 CLJ 147 has decided that in a Judicial Review application, when the court quashes a decision of the Industrial Court by way of a certiorari order, the court has the power under Paragraph 1 and O 92 r 4 of the then Rules of the High Court 1980 (RHC) (which is in pari materia with the present O 92 r 4 RC) to grant monetary compensation in the interest of justice. It is decided in Rama Chandran as follows: (1) per Eusoff Chin CJ, at p.163, 166, 167 and 169 - “The learned Counsel for the respondent submitted that, in the event of the appeal being allowed, this Court has no jurisdiction to make an order for consequential relief, and that we can only make an order remitting the case back to the Industrial Court for consequential reliefs. … In Malaysia, the High Courts are conferred with similar powers by [Paragraph 1] … … The procedure relating to an application for certiorari is laid out in O. 53 [RHC]. I cannot find any provision in the [CJA], [RHC] or the [Industrial Relations Act 1967 (IRA)] expressly or impliedly prohibiting the High Court from granting any relief as provided for in [IRA] when quashing an award of the Industrial Court. … … I should go further and consider the provisions of O. 92 r. [RHC] … … 25 It is clear that the High Courts and the Federal Court have adopted a liberal and progressive approach in certiorari proceedings, and I find that where the particular facts of the case warrant it the High Court should endeavour to remedy an injustice when it is brought to its notice rather than deny relief to an aggrieved party on purely technical and narrow grounds. The High Court should mould the relief in accordance with the demands of justice. … The High Court jurisdiction should not be curtailed or narrowed or constricted by mere reference to the old historical development in which the writ of certiorari was developed and came to be granted by the Courts in England. Of course if the application for certiorari is dismissed, that ends the matter. But if the application is allowed, the Court has surely to mould the order. If we were to merely grant certiorari to quash the award and nothing more, this will deprive the writ of its vital and effective meaning and may result in grave injustice being caused to the claimant.” (emphasis added); and (2) per Edgar Joseph Jr FCJ, at p. 183, 184 and 185 - “Having regard to the breadth of the provisions of [Paragraph 1], it would be wrong to assume that the extent of the power of the Courts in Malaysia, in the field of public law remedies is limited in the same manner as that of the Courts in the United Kingdom, where there are no such equivalent provisions. … … 26 Needless to say, if, as appears to be the case, that this wider power is enjoyed by our Courts, the decision whether to exercise it, and if so, in what manner, are matters which call for the utmost care and circumspection, strict regard being had to the subject matter, the nature of the impugned decision and other relevant discretionary factors. A flexible test whose content will be governed by all the circumstances of the particular case will have to be applied. … I have carefully considered the question whether this Court should remit the case to the Industrial Court to determine the monetary compensation to be paid by the Employer to the Employee, which will, in essence, involve a simple arithmetical calculation but will also lead to unnecessary prolongation of proceedings involving inevitable delay and increased expenditure, in what has already been a long drawn out litigation with consequent hardship to the employee, who is now getting on in age. … In the very special circumstances of this case, to remit the case to the Industrial Court to assess the monetary compensation payable by the employer to the employee would seem to be a certain detachment from reality and, more importantly, it will not answer the needs of justice. We must, therefore, do what the Industrial Court should have done. It follows, therefore, that for the reasons stated above, I have no quarrel with the consequential orders proposed by the learned Chief Justice and concur in their making. In doing so, I trust that we have pointed the way to new horizons in the forward march of judicial review.” 27 (emphasis added). 40. Fourthly, as explained in Ang Ming Lee, at [40], HDA is a social legislation passed by Parliament to protect home buyers (not housing developers). If this court grants a mandamus order for a 2nd Hearing, this will cause an injustice to the 2nd and 3rd Respondents as follows: (1) the 2nd and 3rd Respondents have to expend time, expense and effort to attend the 2nd Hearing; and (2) based on the above grounds of the judgment, the Claim should be allowed and it is only a “simple arithmetical calculation” (as in Rama Chandran) for the court to compute the liquidated damages to be paid by the Applicant to the 2nd and 3rd Respondents. 41. Premised on the reasons stated in the above paragraphs 37 to 40, I exercise my discretion under s 25(1), (2) CJA, Paragraph 1, O 1A, O 2 r 1(2) and O 53 r 2(3) RC - (1) not to issue an order of mandamus to direct a 2nd Hearing; and (2) to order liquidated damages to be paid by the Applicant to the 2nd and 3rd Respondents (based on the above grounds of judgment). 42. After I have given my oral grounds for Enc. 7 (Oral Decision) (which are similar to the above grounds of judgment), I invited learned counsel for the Applicant, 2nd and 3rd Respondents to calculate the amount of 28 liquidated damages under Clauses 25(1) and 27(1) (Liquidated Damages) based on the following matters: (1) the computation of Liquidated Damages shall take into account the Rebate; and (2) the 36 Months Period shall commence on the date of the SPA. 43. Based on the above grounds of judgment, learned counsel for the Applicant, 2nd and 3rd Respondents have agreed that the Applicant shall pay RM39,327.10 (Sum) to the 2nd and 3rd Respondents as Liquidated Damages. Hence, I order as follows for Enc. 7: (1) the Applicant shall pay the Sum to the 2nd and 3rd Respondents; (2) interest at the rate of 5% per annum on the Sum shall be paid by the Applicant to the 2nd and 3rd Respondents from 23.6.2017 (date of 1st Respondent’s Decision) until full payment of the Sum; and (3) the 2nd and 3rd Respondents shall pay costs of Enc. 7 in an amount of RM3,000.00 (Costs) because the Applicant was substantially successful in Enc. 7. The 2nd and 3rd Respondents shall pay to the Applicant interest at the rate of 5% per annum on the Costs from the date of the Oral Decision until full payment of the Costs. K. Summary of court’s decision 44. In brief - 29 (1) as reg. 11(3) HDR is invalid according to Ang Ming Lee, the Controller’s Extension [made under reg. 11(3) HDR] is also invalid; (2) the 36 Months Period as stipulated in Schedule H shall apply to the SPA in this case as mandatorily required by reg. 11(1) HDR; (3) clauses 25(1) and 27(1) of Schedule H require the 36 Months Period to run from the date of the SPA and not from the date of Part Payment or any other date; (4) the 1st Respondent’s Decision is irrational - (a) for not considering the - (i) Rebate; and (ii) Counterclaim; and (b) because the Award is solely based on the 1st Claim and omitted the 2nd Claim; (5) the court exercises its discretion to issue a certiorari order to quash the 1st Respondent’s Decision due to the Illegality and the 1st to 3rd Irrationality; and (6) it is in the interest of justice for this court to exercise its discretion under s 25(1), (2) CJA, Paragraph 1, O 1A, O 2 r 1(2) and O 53 r 2(3) RC to order the Applicant to pay Liquidated Damages to the 2nd and 3rd Respondents. 30 45. In closing, I must express my gratitude for the invaluable assistance rendered to me in this case by learned counsel for the Applicant, 2nd and 3rd Respondents. WONG KIAN KHEONG Judge High Court of Malaya Shah Alam, Selangor Darul Ehsan DATE: 7 FEBRUARY 2020 Counsel for Applicant: Ms. Saroop Rampal A/P Hardyl Rampal (Messrs Norendra & Yap) 1st Respondent was not present and was not represented by counsel. Counsel for 2nd & 3rd Respondents: Ms. Ariadne Lee Pei Pei (Messrs Pei Chambers)