2011 MarsdenLR 4668
HIGH COURT MALAYA, KUALA LUMPUR
HO CHRISTOPHER WEN JINN – Appellant
Versus
BERJAYA TIMES SQUARE SDN BHD – Respondent
[Suit No: D-24Ncc-35-2011]
Commercial premises do not qualify as housing accommodation under the Housing Development Act, and parties must adhere to contract stipulations unless unconscionable circumstances exist.
Headnote:(A) Housing Development (Control and Licensing) Act 1966 - The issue of whether the Plaintiff's commercial parcel falls under the definition of "housing accommodation" as per Section 3 of the Act - The Sale and Purchase Agreement allowed for administrative charges upon sale - The development is predominantly commercial in nature and thus does not qualify for regulations governing residential properties. (Paras 1-5)
(B) Unconscionability in Contract Law - The principle that agreements should be upheld unless they result in an unconscionable situation - The Plaintiff's claims regarding high administrative charges were deemed excessive but reasonable under the existing contract. (Paras 16-29)
Facts of the case:
The Plaintiff, a purchaser of a commercial parcel in an integrated development, contested administrative charges and sought declarations regarding the applicability of housing law to his commercial premises.
Findings of Court:
The Plaintiff’s claims were dismissed; the court found that the premises were not intended for residential use and the administrative charges were consistent with those outlined in the Sale and Purchase Agreement.
Issues: The primary questions were whether the commercial parcel qualified as housing accommodation under the Act and the legitimacy of the imposed administrative charges.
Ratio Decidendi: The court held that the purpose of the Housing Development Act was to protect residential units, not commercial properties, and upheld the principle that parties must adhere to contract terms unless unconscionable.
Result: Plaintiff's claim dismissed with costs awarded to the Defendant.
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| 1. nature and details of the commercial property (Para 1 , 2 , 3) |
This is an odd case. The Applicant is the registered owner of a parcel of commercial premise of about 531 square feet identified as Parcel No. 03 - 43. This particular parcel is located on the 3
rd floor of the Kuala Lumpur landmark known as Berjaya Times Square, which as is well-known among Kuala Lumpur residents at any rate, as a huge complex housing within it 15
th floor of a shopping complex podium, a theme park and entertainment centre, and a lower ground shopping area. The Applicant's parcel of commercial premise is situated on the 3
rd floor of the shopping complex podium. There cannot be any serious doubt, to put it mildly, that this particular parcel is not used or intended as a housing accommodation, as the term is ordinarily understood. It is, to use a more commonplace term, a shop lot. The strange legal issue that has been presented before this
Court arises from the integrated nature of the complex, for it also includes within its cavernous area two blocks of 47 storey service suites, described as service apartments or condotels. The Applicant's parcel is not one of these obviously. Indeed in the Sale and Purchase Agreement the Plaintiff has agreed
inter alia , "to purchase an individual parcel of commercial premises" (Recital 5) in the "Commercial Podium", and expressly agreed that the premises shall be used "only for commercial use as approved by Management" and the premises "shall not be used for residential or any other purpose (illegal or otherwise) which may be injurious to the reputation of the Complex" (Clause 3(1)).
The Sale and Purchase Agreement with respect to the Plaintiff's parcel is entered between the Plaintiff as purchaser and the Defendant (Berjaya Times Square Sdn Bhd) as the developer. The purchase price is RM1,035,450.00, and that has been paid in full. It is common ground that the SPA does not take the form of a Schedule G standard SPA under the Housing Development (Control and Licensing) Regulations 1989 .
The SPA allows the Plaintiff to sell his parcel to another, but with consent of the developer and subject to the payment of an administrative fee of "up to one per centum (1%) of the purchase price of the premises for processing of the application to obtain such consent." This is provided under Clause 28 of the SPA on "Assignment".
The Plaintiff has presently contracted to sell the parcel to another party, and for this purpose has sought and obtained the consent of the developer, but subject to terms imposed by the developer. By letter dated 4th November 2009, the Defendant developer has indicated it is agreeable subject to:
(a) Payment of RM10,354.50 for administrative charges for the transfer, and
(b) For the Plaintiff to sign a letter drafted by the Defendant and addressed to the Defendant to the effect that the Plaintiff agrees to credit to the intended purchaser's account the sum of RM1,035,450.00.
The exact wording in the letter in relation to condition (b) above reads:
"... that the sum of RM1,035,450.00 paid to us to-date in respect of Retail Lot 03 - 43 shall be credited into the account of the Transferee(s) and deemed as payment immediately upon our receipt of the duly stamped Deed of Assignment ..."
Although on its face condition (b) appears harsh and unreasonable, it is in effect more an accounting requirement which simply requires the amount treated as paid in respect of the parcel be taken as paid by the new purchaser. Obviously it does not require the Plaintiff to physically pay the amount which he has already paid fully in any event.
It thus appears the Plaintiff's main complaint is in relation to the very high administrative charges just to obtain the consent.
Plaintiff's counsel, Mr. Ho, refers to the Penang High Court decision of Lim Seang Mee v. Keepahead Sdn Bhd ; [1992] 2 CLJ 776; [1993] 2 AMR 3553 (Rep) , where Mohamed Dzaiddin J (as his lordship then was) reduced a similar administrative charge to b
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