Non-compliance with statutory consent requirements renders a charge created without such consent unlawful and void under the Housing Development Act.

JUDGMENT

Has Zanah Mehat JCA:

[1] Having considered parties' submissions, both oral and written record of appeal and the grounds decision, we have now reached our decision. The following are our brief reasons.

[2] In the High Court, the Appellant sought a declaration that the charge and the lien holder's caveat (collectively referred as "the Charge") entered in favour of the 2nd respondent are unlawful and void as it had contravened the provisions of reg 11 of the Housing Development (Control And Licensing) Regulations 1989 (PU(A) 58/89)("Regulations 1989"), made under the Housing Development (Control And Licensing) Act 1966 (HDA). His Lordship dismissed the Appellant's application.

[3] The appellant is one of the purchasers of a parcel in the housing development on land belonging to the 1st respondent ("the project") by virtue of the Deed of Novation dated 3 September 2018 ("Deed of Novation") with one Gurdip Singh and Harjender Kaur ("the original purchasers") executed with the consent of the 1st respondent. The original purchasers had entered a SPA with the 1st respondent. It is not disputed that the SPA is subject to the HDA. The 2nd respondent is the contractor for the project. To settle unpaid construction costs, the 1st respondent entered into a Settlement Agreement with the 2nd respondent dated 6 July 2017. Pursuant to the Settlement Agreement, the Charge was created in favour of the 2nd respondent. It is a fact that the Deed of Novation was entered after the Charge was created.

[4] First we will answer the issue on locus standi and whether the HDA is applicable to the appellant as being the novatee of the Deed of Novation. His Lordship's finding is that the appellant acquired her interest as a new purchaser by virtue of the Deed of Novation dated after the creation of the Charge. Therefore, reg 11 does not apply to the appellant and there was no breach of the Regulations by the respondents. We disagree with His Lordship. It is clear under Clause 2 of the Deed of Novation which stipulates that the novatee shall be entitled to all whatsoever rights, title and interest pursuant to the sale and purchase agreement as if the novatee is the original party thereto in place of the novator. By virtue of this Deed of Novation the appellant steps into the shoes of the original purchaser and receives all benefits and assumes all liabilities under the SPA. As such, regardless the date of the Deed of Novation, parties are still bound by the SPA and the HDA and Regulations made thereunder.

[5] On the second issue, whether the breach of the SPA in not obtaining the consent of the purchasers to create the Charge has any bearing on the legality of the Charge, His Lordship answered this in the negative. With respect we disagree with His Lordship. Section 24 of the HDA confers on the Minister powers to make regulations for the purpose of carrying into effect the provisions of the HDA, resulting in reg 11 of Regulations 1989 being made. reg 11 provides that every contract of sale where the contract of sale is for the sale and purchase of a housing accommodation in a subdivided building in the form of a parcel of a building or land intended for subdivision into parcels, as the case may be, it shall be in the form prescribed in Schedule H. Therefore, it is our considered view that Clause 3 of the SPA (which is the standard form contract prescribed by Schedule H) requires mandatory conformity by the parties. The legislative intent in the said Clause 3 which binds the affected parties makes it clear that the developer shall not at any time after the execution of the SPA, subject the land to any encumbrances (in the present case the creation of the Charge) without the prior consent of the purchasers where parties are not allowed to depart from. In this regard, it is not a matter of dispute by the respondents that no such required consent was obtained from the original purchasers prior to the creation of the said Charge.

[6] Consequently, it is our con