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2024 MarsdenLR 2048
FEDERAL COURT PUTRAJAYA
OBATA-AMBAK HOLDINGS SDN BHD – Appellant
Versus
PREMA BONANZA SDN BHD & OTHER APPEALS – Respondent
[Civil Appeal Nos: 02(i)-70-08-2022(W) 02(i)-71-08-2022(W) 02(i)-72-08- 2022(W) 02(i)-74-08-2022(W) & 01-(f)-1-01-2023(B)]
The court ruled that claims for Liquidated Ascertained Damages were time-barred, and the invalid regulation did not retroactively affect the validity of prior agreements.
Headnote:(A) Housing Development (Control and Licensing) Act 1966 - Housing Development (Control and Licensing) Regulations 1989 - Regulation 11(3) - Appeal concerning the payment of Liquidated Ascertained Damages (LAD) after the ruling in Ang Ming Lee declaring reg 11(3) ultra vires - The court held that the developers' reliance on the invalid regulation for extensions was valid at the time of execution of SPAs. (Paras 2, 11, 18, 35, 50, 59)
(B) Limitation Act 1953 - The court found that claims for LAD were time-barred as the cause of action accrued at the execution of the SPAs, which was beyond the six-year limitation period. (Paras 15, 70, 100)
(C) Unjust Enrichment - The court ruled that allowing claims for LAD retrospectively would result in unjust enrichment as the purchasers had accepted payments under the terms of the SPAs. (Paras 173, 176)
Facts of the case:
The appeals arose from claims for LAD by purchasers against developers, following the Federal court's decision in Ang Ming Lee, which declared reg 11(3) of the HDR ultra vires. The purchasers alleged breaches of the completion period in their SPAs. (Paras 1, 7, 20)
Findings of Court:
The court affirmed that the extension of time granted prior to the execution of the SPAs was valid, and the claims were barred by limitation. (Paras 100, 176)
Issues: Whether the developers could rely on the invalid regulation, the accrual of cause of action for LAD, and the implications of unjust enrichment. (Paras 11, 35, 173)
Ratio Decidendi: The court emphasized the importance of the timing of claims and the legal framework at the time of the SPAs' execution, ruling that the invalidity of the regulation did not retroactively affect the agreements made. (Paras 11, 176)
Result: Appeals dismissed for Obata; appeals allowed for Prema and Sri Damansara.
JUDGMENT
Introduction
[1] There are five appeals which were heard together, given the commonality of issues in the questions of law raised for our determination. One appeal was filed by the purchaser of the condominium units, The Sentral Residences. The other appeals are appeals filed by the developers of the projects, Prema Bonanza Sdn Bhd (Prema) and Sri Damansara Sdn Bhd (Sri Damansara). The appeals were heard together despite there being different parties involved. We heard oral submissions by all learned counsel representing the respective parties and at the end of those submissions, we indicated that we needed time to consider the respective submissions. We have now reached our decision and what follows below are our deliberations on the issues raised and our reasons as to why we have so decided.
[2] The central issue in all the appeals concerns the payment of Liquidated Ascertained Damages (LAD) as a result of this court's decision in Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals, [2020] 1 MLJ 281 (Ang Ming Lee) declaring that reg 11(3) of the Housing Development (Control and Licensing) Regulations 1989 (HDR) is ultra vires the parent Act.
Appeal No: 02(i)-70-08-2022(W) (Appeal No. 70) & 02(i)-71-08/2022(W) (Appeal No. 71)
Obata-Ambak Holdings Sdn Bhd (Obata) v. Prema Bonanza Sdn Bhd (Prema)
[3] Both appeals have identical issues, with similar facts, and arose from the same development project. Appeal No. 70 is an appeal by Obata against the decision of the court of Appeal dismissing the appeal by Obata against the High court's decision which allowed Prema's application under O 14A Rules of 2012 (ROC). Whereas Appeal No. 71 is an appeal by Obata against the court of Appeal's decision which dismissed Obata's application for Summary Judgment under O 14 ROC 2012.
[4] The Appellant, Obata, is the purchaser and owner of a condominium known as The Sentral Residences (the Project). The Respondent, Prema, is the developer of the Project. The Project comprises 2 towers of service apartments and was governed by the Housing Development (Control and Licensing) Act 1966 (HDA) and the HDR. Thus, the agreement was to be executed with potential purchasers as prescribed under Schedule H of the HDR, whereby the time for delivery of vacant possession and completion of common facilities is 36 months.
[5] However, due to the magnitude and the peculiarity of the bespoke design of the Project, Prema applied for modification of the prescribed agreement to vary the prescribed completion period for the Project from thirty-six (36) months to fifty-four (54) months pursuant to reg 11(3) HDR. The Extension of Time (EOT) was granted by the Controller of Housing (the Controller) on 16 December 2010, two (2) years before the execution of the SPA with the purchasers of the Project. Prema obtained the EOT to extend the time period for delivery of vacant possession and completion of common facilities from 36 months to 54 months. The amended approved provisions are as reflected in cls 25 and 27 of the Sale and Purchase Agreements (SPA). It was only after procuring the approval of the EOT and the amended clauses in the SPA that Prema executed the SPAs with its purchasers.
[6] Obata entered into the SPAs with the approved EOT on various dates which formed the subject matter before the court, namely:
(i) SPA dated 24 July 2012 (Suit 301);
(ii) SPA dated 28 October 2013 (Suit 303); and
(iii) SPA dated 11 July 2012 and 18 July 2012 (Suit 305) − the present appeals before us.
[7] After the Federal court's decision of Ang Ming Lee, Obata commenced proceedings against Prema for the following reliefs:
i. a declaration that any letters given for extension of time pursuant to reg 11(3) of the HDR to deliver vacant possession of the property to the plaintiff and the completion of the common facilities from 36 months to 54 months were inconsistent with the decision of Ang Ming Lee;
ii. a decl
