THE decision of the Federal Court on Nov 26, 2019 in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and other appeals (2020) 1 CLJ 162 (Ang Ming Lee case) is widely regarded as one of the most important court decisions in recent years concerning the Housing Development (Control and Licensing) Act 1966 (HDA).
The case effectively put to rest the unbridled attempts by the Housing and Local Government Minister, as well as the Housing Controller in unilaterally extending the handover deadline of housing properties.
However, there seems to be an ongoing attempt at circumventing the Federal Court decision –through invoking a different provision in the HDA to allow the authorities to again extend the deadline for delivery of vacant possession or “move the goalposts”, thereby denying house buyers their rights to receive their homes on time as stipulated in the sale and purchase agreements (SPA), and correspondingly their rights to receive liquidated ascertained damages (LAD) for such delays.
Dissecting Ang Ming Lee case
One of the most notable features of the HDA is that it empowers the Housing Minister to regulate the terms and conditions of the sale contract between the covenanting parties. The minister has prescribed various sets of mandatory standard agreements to be used by the parties when entering into a sale and purchase transaction of housing properties.
The standard forms are housed in the Schedules to the Housing Development (Control and Licensing) Regulations 1989 (HDR) and hence they are also known as “Scheduled Agreements”.
The Scheduled Agreements are unique, as they are exceptions to the concept of freedom of contract. They have been carefully drafted to ensure that the interests of house buyers are protected without losing sight of the practical aspects of housing developments.
These Scheduled Agreements provide that landed properties shall be handed over to purchasers within 24 months from the date of agreement, while stratified properties shall be handed over in 36 months.
In the Ang Ming Lee case, a group of house buyers challenged the Housing Controller for purportedly exercising its power under Regulation 11(3) of the HDR to grant extension of time (EOT) to the developer to hand over the properties from 36 months to 48 months.
Subsequently, the Federal Court struck down Regulation 11(3), which empowered the Housing Controller to modify or waive the Scheduled Agreements.
The Federal Court in unequivocal terms held that the minister, being empowered by the Parliament to prescribe the Scheduled Agreements, could not further delegate to the Housing Controller the power to modify or waive the Scheduled Agreements.
Safeguarding house buyers’ rights
The Federal Court in Ang Ming Lee case put much emphasis on the spirit of the HDA and its status as a social legislation. The Federal Court remarked as follows:-
In the instant appeals, the Schedule H contract of sale prescribed by the Regulations is to carry into effect the provisions of the Act, which is to protect the interests of the purchasers.
The regulations made by the minister must thus achieve the objective 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.
By delegating the power, vide Regulation 11(3) to the Controller to waive or modify the prescribed terms and conditions of the sale contract, it is now the Controller who has been entrusted to regulate the terms and conditions of the contract.
Further, by modifying the prescribed terms and conditions and by granting the developer the EOT, the Controller has denied the purchasers’ rights to liquidated ascertained damages claim. This modification and the granting of EOT to the developer do not appear to us to protect or safeguard the purchasers but rather the developer, and this militates the intention of the Parliament.
Perhaps, the most important legacy of the Ang Ming Lee case is the Federal Court’s observation above that the powers granted to the minister must be bona fide and consistent with the preamble of the HDA, which provides that the HDA is an Act to provide for the protection of the interest of purchasers. – July 24, 2022
The article is jointly written Datuk Chang Kim Loong, the honorary secretary-general of the National House Buyers Association (HBA) and their legal adviser, Koh Kean Kang.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
