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2020 MarsdenLR 1192
COURT OF APPEAL (PUTRAJAYA)
HASNAH MOHAMMED HASHIM, J, KAMALUDIN MD SAID, J, LEE SWEE SENG, JJCA
Sri Damansara Sdn Bhd v Voon Kuan Chien & Anor MLJU 333 – Plaintiff
Versus
Voon Kuan Chien & Anor – Defendant
RAYUAN SIVIL NO W-01(A)-17-01/2019
Andrew Raj Davis (Zaitul Naziah bt Mohd Soib with him) (Andrew Davies & Co) for the appellant.
Ariadne Lee Pei Pei (Pei Chambers) for the respondent.
A developer is prohibited from collecting any payment classified as a booking fee prior to signing the Sale and Purchase Agreement, as such practices violate statutory consumer protection provided under housing legislation.
Headnote:(A) Housing Development (Control and Licensing) Act 1966 - Regulation 11(2) - Prohibition against collection of booking fees prior to the execution of Sale and Purchase Agreement (SPA) - Developer collected RM10,000 booking fee, contravening HDA - Tribunal awarded late delivery damages from booking fee payment date - High Court affirmed Tribunal's decision, dismissing developer's judicial review - Court held that the Tribunal's interpretation was valid and complied with established legal principles regarding contractual agreements and statutory obligations. (Paras 1, 10, 13, 89)
(B) Judicial Review - Standards - The court may intervene in a decision on grounds of illegality, irrationality, or procedural impropriety, but not to hear appeals on merits (Paras 17, 29, 60)
Facts of the case:
Appellant developer appealed against the High Court's decision affirming a Tribunal's award for late delivery damages, where the Tribunal stated the date for such claims should commence from the payment of a booking fee collected before the SPA was signed, which was deemed contrary to the provisions of the HDA. (Paras 1-3)
Findings of Court:
The Tribunal's decision to start the late delivery claim from the booking fee paid was grounded in statutory protection aimed at preventing unscrupulous practices by developers. The High Court found no error warranting judicial intervention, affirming the Tribunal's validity in assessing the developer's obligations. (Paras 13-15)
Issues: The key disputes involved the legality of the developer's collection of the booking fee before signing the SPA and the correct date for calculating late delivery damages. (Paras 1, 3, 10)
Ratio Decidendi: The Tribunal rightly concluded that the developer's actions contravened statutory provisions designed to protect purchasers from being exploited; thus, the timing of the booking fee payment initiated the calculation for late delivery claims, ensuring compliance with HDA and its Regulations. (Paras 12, 60, 89)
Result: Appeal dismissed with costs awarded to the purchaser.
| Table of Content |
|---|
| 1. timeline of events leading to the case. (Para 1 , 2) |
| 2. developer's arguments regarding the late delivery claim. (Para 3 , 4 , 5 , 6) |
| 3. tribunal's award upheld by high court. (Para 10 , 12 , 13) |
| 4. developer's review application dismissed by high court. (Para 14 , 15 , 16) |
| 5. principles of judicial review discussed. (Para 17 , 18) |
| 6. prohibition against collection of booking fees analyzed. (Para 26 , 29 , 30 , 31 , 32) |
| 7. impact of the use of credit notes on purchase price interpretation. (Para 37 , 38 , 66 , 67) |
| 8. court affirming award based on spa purchase price. (Para 72 , 73 , 88) |
| 9. case appeal dismissed with costs. (Para 92 , 94 , 95) |
Lee Swee Seng JCA:
JUDGMENT OF THE COURT
[1]This is an appeal by a developer against the decision of the High Court dated 20.12.2018 dismissing a judicial review application. The developer in this case had failed to comply with the provision of the Housing Development (Control and Licensing) Act 1966 (“HDA”) and the Regulations made thereunder with respect to the prohibition against the collection of booking fees. It collected on 6.1.2012 a booking fee of RM10,000.00 as part of the 10% deposit of the purchase price of a condominium unit and the Sale and Purchase Agreement (“SPA”) following the mandatory Schedule H Agreement was dated 28.6.2012.
[2]Predictably when vacant possession was delivered to the purchasers the respondent on 22.12.2016, the purchaser filed a claim with the Tribunal for Homebuyer Claims (the Tribunal) and calculated the late delivery damages to be from the expiry of 42 months from the date of the SPA which was taken to be the date of the payment of the booking fee on 6.1.2012 to the date of delivery of vacant possession.
[3]The developer argued that the plain meaning of the words in the late delivery claim Clause should be given effect to and that the period of delay should be calculated with reference to the expiry of 42 months from the date of the SPA as stated to the date of handing over of vacant possession.
[4]The developer contended that there was nothing ambiguous with respect to the clear and plain meaning of the expression “date of the Sale and Purchase Agreement.” Based on the that argument the developer contended quite confidently that it is not liable to pay any late delivery claim as the vacant possession date is 22.12.2016 which is within 42 calendar months from the date of the SPA 28.6.2012.
[5]The developer here had also employed a clever device to attract sales of the housing accommodation in that upon the signing of the SPA, a credit note is given to the purchaser for the sum equivalent to the balance 10% of the purchase price!
[6]The developer argued that there was an effective discount via the credit note given of RM63,108.00 from the purchase price stated of RM731,080.00 and so the actual and real purchase price is RM667,972.00 (claimed as RM668,778.90 before the Tribunal).
[7]That raises another interesting issue as to whether the calculation of the damages for late delivery claim should be based on the purchase price as stated in the SPA which is what the relevant clause states or should it be based on the actual purchase price or the “discounted purchase price”.
[8]The developer also sought to prevail upon this Court that what it had done in collecting the booking fee was to assist the purchaser such that the SPA would only be signed after the approval of the purchaser’s loan and that if the loan was not approved, then an administrative charge of RM600.00 being its administrative fee shall be forfeited from the purchaser’s booking fee.
[9]Thus, it was argued that such a method, innovative as it may be, actually promoted the social purpose of the HDA as well as protect the purchaser.
Award of the Tribunal for Homebuyer Claims
[10]The Tribunal agreed with the purchaser both on the issue of the proper date of the SPA which is to be taken as the date the booking fee was paid and the purchase price being that which was stated in the SPA.
[11]Under the
