REDHA INSTITUTE SEMINAR SERIES

Transcription

1 By Loh Chu Bian REDHA INSTITUTE SEMINAR SERIES Seminar on Malaysian Land Law: Recent Development & Controversies 1

2 2 CONTENTS Statutory provisions When does the time to deliver VP start running? Manner of delivery VP Conclusion

3 3 STATUTORY PROVISIONS Governing provisions Rule 11 of the Housing Development (Control and Licensing) Regulations 1989 Clause 24 of Schedule G Clause 25 of Schedule H Description Schedule G & Schedule H for contract of sale for the sale and purchase of a housing accommodation 24 months from the date of the Agreement 36 months from the date of the Agreement

4 4 What is the Date of the Agreement? When does the time to deliver vacant possession start running?

5 5 The change of the legal position The time to deliver vacant possession start from the date of the payment of booking fee Factual matrix and surrounding circumstances

6 6 The case of Premier Green Purchaser is bound by the statutory SPA where, based on Clauses 25(1) and 25(2) of the SPA, time starts to run from the date of the SPA, not booking fee. Faber Union ought not be taken as a scientific of technical formula without having any regards to: i. factual matrix of the case; ii. current practices in the industry; and iii. terms of the SPA. Premier Green Sdn Bhd V Tribunal Tuntutan Pembeli Rumah & Anor

7 7 Factual matrix or surrounding circumstances

8 8 Hoo See Sen & Anor v Public Bank Bhd & Anor Facts Appellants purchased a house for $145,000. Appellants paid a booking fee of $1,000 on SPA was signed on House was not completed and no delivery had taken place. 2 nd respondent was therefore liable to pay LAD to the appellants. Decision Time for delivery of vacant possession is 24 months from the date of payment of the booking fee. Analysis SPA stated that VP to be given within 24 months from the date of payment of the booking fee.

9 9 Faber Union Sdn Bhd v. Chew Nyat Shong & Anor Facts The purchaser bought a unit of property from the developer and paid deposit on The SPA was signed on The developer failed to complete the property within the stipulated time, and the purchaser sued for LAD. Judgment Court relied and followed Supreme Court s decision in Hoo See Sen & Anor v Public Bank Bhd & Anor [1988] 2 MLJ 170 as they find no good reason to disagree with the earlier decision. Time starts to run from the date on which the purchaser paid the booking fee.

10 10 The "Faber Union Rule For the purpose of ascertaining the date of delivery of VP the relevant date when time starts to run is the date on which the purchaser paid the booking fee and not the date of the signing of the sale and purchase agreement.

11 11 Lim Eh Fah & Ors v. Seri Maju Padu The first appellant bought one unit of the condominium at RM 75,300 and deposited 10% of the purchase price to the respondent on The developer failed to complete the property within the stipulated time, and the purchaser sued for LAD. The respondent argued that the damages ought to be calculated from the date the deed of assignment was signed. The Court followed Faber Union and Hoo See Sen, which held that the date to take into consideration for purposes of calculating the damages on late delivery of VP is the date when the deposit was paid. Facts Decision The long period between the date the purchaser paid deposit and the date the deed of assignment was signed. The Court feels a need to protect the right of the purchaser. Analysis

12 12 Lim Eh Fah - The need to protect purchaser s interest 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.

13 Faber Union Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah, Kementerian Perumahan dan Kerajaan Tempatan & Ors Facts Decision 13 Application for judicial review for an order of certiorari to quash the award of the Tribunal. The Tribunal allowed the claim of the 2 nd 10 th respondents for LAD for late delivery of VP under SPA. The SPAs were signed and VP was delivered within the time stipulated in SPA. The respondents contend that notwithstanding the SPA, based on the applicant s brochures and representations made by the applicant s sales representatives, VP was to be delivered earlier. The Court held that the Tribunal was right to follow the principle laid down in Faber Union and Lim Eh Fah, which held that the relevant date for the purpose of calculating the amount of damages is the date the respondents paid the deposits. Analysis The representation made by applicant through its brochures and sales representatives that VP could be delivered earlier than was stated in SPA; and the letter to all purchasers informing that there was a delay in completion.

14 14 Nippon Express (M) Sdn Bhd v. Che Kiang Realty Sdn Bhd & Another Appeal Facts The appellants signed two purchase forms to purchase two pieces of industrial land from respondent. It was agreed that the respondent shall construct the infrastructures for the two lands and deliver vacant possession within 30 months from the date of the agreements. Subsequently, dispute arose between the parties as the Nippon has insufficient funds to purchase both of the lands. The Court followed the principles laid down in Faber Union and held that the relevant date when time start to run is the date on which the purchaser paid the booking fee. Decision Analysis This is not a case under HDA, but Contracts Act.

15 15 Lembaman Development Sdn Bhd v. Ooi Lai Yin & Anor and Other Cases Facts The applicant, a developer of a housing project had applied by way of a judicial review for an order of certiorari to quash decision of the Tribunal. The applicant argued that there cannot be a concluded contract on that date because the amount paid only amounts to 1% of the purchase price. The respondent argued that the time start to run not from the settlement of 10% deposit, but from the date of payment of booking fee. Furthermore, there is a document dated which stated I/We have agreed to purchase the above captioned property from the above named vendor... based on the aforesaid authority, the relevant date is the date when the booking fee was paid Decision

16 16 Reiteration of Lim Eh Fah in Lembaman The Lim Eh Fah case clearly stipulated that where the position otherwise, developers could arbitrarily fix any date to have the SPA executed to the prejudice of the purchasers. If this were to be the case, then developers would obviously choose a date later in time with the intention of potentially having to bear less damages for late delivery of vacant possession.

17 Schedule G Schedule H 17 Manner of delivery of vacant possession the issuance of a certificate of completion and compliance water and electricity supply ready for connection all monies due and payable paid the completion of any alteration or additional work the issuance of a certificate of completion and compliance water and electricity supply ready for connection all monies due and payable paid the separate strata title has been issued the completion of any alteration or additional work

18 18 Conclusion In light of the recent High Court decision in Premier Green, the principles set out by the Supreme Court in Faber Union is not a scientific or technical formulae. The factual matrix or surrounding circumstances of each case must be taken into account. In ascertaining the date of delivery of the VP in an LAD claim, the developer has a reasonable and valid legal ground to argue that time start running from the date of the execution of the SPA.

19 19 Q & A

20 Thank you 20