In Alvin Leong Wai Kuan & Ors v Menteri
Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Ors And
Other Applications [2020] 6 CLJ 55, the High Court allowed
the purchasers' judicial review applications for an order to
quash the Minister of Housing and Local Government's decision
that allowed the developer up to 59 months to deliver vacant
possession of the parcels to the purchasers.
Justice Wong Kian Kheong held that His Lordship was bound by the Federal Court judgment in Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals [2020] 1 CLJ 162 and held that Reg. 11(3) of the Housing Development (Control and Licensing) Regulations 1989 ("HDR") is invalid, therefore, the Controller of Housing cannot exercise any power under Reg. 11(3) of the HDR to extend the 36 months period as prescribed in Schedule H of the Housing Development (Control and Licensing) Act 1966 ("HDA").
Key points
Justice Wong Kian Kheong held that His Lordship was bound by the Federal Court judgment in Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals [2020] 1 CLJ 162 and held that Reg. 11(3) of the Housing Development (Control and Licensing) Regulations 1989 ("HDR") is invalid, therefore, the Controller of Housing cannot exercise any power under Reg. 11(3) of the HDR to extend the 36 months period as prescribed in Schedule H of the Housing Development (Control and Licensing) Act 1966 ("HDA").
Key points
- Courts are bound by the doctrine of stare decisis and will follow the Federal Court's decision in Ang Ming Lee in holding that Reg. 11(3) of HDR is ultra vires.
- Regulation 12 of HDR which states that the 'decision of the Minister.... shall be final and shall not be questioned in any court' is invalid.
- The judgment in Ang Ming Lee has retrospective effect.
Background
The purchasers and the developer had entered into sale and purchase agreements. Clause 25.1 of the sale and purchase agreements provides that the developer shall deliver vacant possession of the parcel to the purchasers within 42 months from the date of the sale and purchase agreements.
The developer sent a letter to the Controller of Housing ("Controller") and applied to extend the 42 months period to 59 months. Pursuant to Reg. 11(3) of HDR, the Controller partially allowed the developer's application and extended time to 54 months. Aggrieved by the Controller's decision, the developer appealed to the Minister of Housing and Local Government ("Minister") against the Controller's decision pursuant to Reg. 12 of HDR. The Minister allowed the developer's appeal and extended time to 59 months.
Issues
The issues that arose were:
The purchasers and the developer had entered into sale and purchase agreements. Clause 25.1 of the sale and purchase agreements provides that the developer shall deliver vacant possession of the parcel to the purchasers within 42 months from the date of the sale and purchase agreements.
The developer sent a letter to the Controller of Housing ("Controller") and applied to extend the 42 months period to 59 months. Pursuant to Reg. 11(3) of HDR, the Controller partially allowed the developer's application and extended time to 54 months. Aggrieved by the Controller's decision, the developer appealed to the Minister of Housing and Local Government ("Minister") against the Controller's decision pursuant to Reg. 12 of HDR. The Minister allowed the developer's appeal and extended time to 59 months.
Issues
The issues that arose were:
- Whether the Court had the judicial power to review the Minister's decision notwithstanding that Reg. 12 of HDR had expressly provided that the Minister's decision 'shall be final and shall not be questioned in any court';
- Whether the Federal Court judgment in Ang Ming Lee had retrospective or prospective effect;
- Whether the Controller could extend the 36 months period;
- Whether the Minister's decision was valid;
- Whether the developer could rely on s. 2(2) of the HDA; and
- Whether the purchasers can claim for liquidated and ascertained damages based on the 36 months period.
Decision
In allowing the purchaser's application for an order to quash the Minister's decision, Justice Wong Kian Kheong held:
In allowing the purchaser's application for an order to quash the Minister's decision, Justice Wong Kian Kheong held:
- Regulation 12 of HDR which states that the 'decision of the Minister.... shall be final and shall not be questioned in any court' is invalid as that part had ousted the court's judicial power under art 121(1) of the Federal Constitution ("FC") and thus invalid pursuant to art. 4 of FC. His Lordship relied on the following two judgments of the Federal Court:
- Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat And Another Case [2017] 5 CLJ 526; and
- Indira Gandhi Mutho v. Pengarah Jabatan Agama Islam Perak & Ors And Other Appeals [2018] 3 CLJ 145.
- The judgment in Ang Ming Lee has retrospective effect as the Federal Court had not expressly ruled that its decision can only have prospective effect and there are no exceptional circumstances for the doctrine of prospective overruling to apply to the decision of Ang Ming Lee. Hence, in accordance with the general rule, the judgment in Ang Ming Lee has retrospective effect.
- the High Court is bound by the doctrine of stare decisis and must apply the Federal Court judgment in Ang Ming Lee which held that Reg. 11(3) of HDR is void. Premised on that, the Controller cannot exercise any power under the Reg. 11(3) to extend time beyond the 36 months period mandatorily prescribed in Schedule H of the Housing Development (Control and Licensing) Act 1966 (HDA). The Controller's decision is hence invalid.
- The Minister's decision to extend time up to a period of 59 months is invalid as the Minister has no such power under HDR to extend the 36 months period prescribed in Schedule H of HDA. Even if it is assumed that the Minister has such power under HDR, there was procedural impropriety when the Minister made its decision as the Minister did not give all the purchasers (not only the purchasers involved in the case) a right to be heard before the Minister made its decision. The failure to do so rendered the Minister's decision illegal or involves procedural impropriety.
- His Lordship rejected the developer's submissions that if the Minister's decision is quashed, the court should remit the question of extending the 36 months period to the Minister under section 2(2) of the HDA which allows the Minister to exempt any housing developer from the HDA provisions by order published in the Gazette. The High Court was unable to issue such an order because 2 conditions under s.44(1) of the Specific Relief Act 1950 ("SRA") have not been fulfilled, namely:
- No application for the remittance order has been made by a person "whose property, franchise, or personal right would be injured by .... doing, as the case may be, of the said specific act" as required under s.44(1)(a) of the SRA; and
- the remittance order is not "consonant to right and justice" as required by s.44(1)(c) SRA. This is because if the court has granted the remittance order, it will defeat the purchasers' rights under Schedule H of HDA regarding the 36 months period.
In conclusion, the High Court exercised the Court's
discretion under s.41 SRA and O.15 r.16 of the Rules of Court 2012
and granted a declaration that the purchasers are entitled to claim
for liquidated damages based on 36 months period.
Comment
The High Court decision is useful on two counts. Firstly, it gave guidance on whether the Federal Court judgment of Ang Ming Lee has retrospective or prospective effect. Secondly, on whether the purchasers have the right to be heard before the Minister makes a decision on the appeal by developer against the Controller's decision in respect of extension time for delivery of vacant possession. The Federal Court in Ang Ming Lee declined to answer the latter as it was not necessary in deciding the appeal.
Justice Wong Kian Kheong opined as follows:
" I am not able to accept the third respondent's submission that the judgment in Ang Ming Lee can only have prospective effect. My reasons are as follows:
Comment
The High Court decision is useful on two counts. Firstly, it gave guidance on whether the Federal Court judgment of Ang Ming Lee has retrospective or prospective effect. Secondly, on whether the purchasers have the right to be heard before the Minister makes a decision on the appeal by developer against the Controller's decision in respect of extension time for delivery of vacant possession. The Federal Court in Ang Ming Lee declined to answer the latter as it was not necessary in deciding the appeal.
Justice Wong Kian Kheong opined as follows:
" I am not able to accept the third respondent's submission that the judgment in Ang Ming Lee can only have prospective effect. My reasons are as follows:
- the Federal Court in Ang Ming Lee has not expressly ruled that its decision can only have prospective effect. Hence, in accordance with the general rule, the judgment in Ang Ming Lee has retrospective effect and applies to these three applications; and
- there are no exceptional circumstances for the doctrine of prospective overruling to apply to the decision in Ang Ming Lee. On the contrary, as held in many cases (including Ang Ming Lee), the object of HDA and HDR is to protect a "homebuyer" (as defined in s. 16A HDA). Accordingly, in line with the purpose of HDA and HDR, it is in the interest of homebuyers for the judgment in Ang Ming Lee to be given retrospective effect.
....
The second respondent's second extension was however granted after the conclusion of the SPAs in these three applications. Hence, there is an additional ground to invalidate the second respondent's second extension - the second respondent should have given all purchasers of parcels in the building (not only the applicants) a right to be heard before deciding on the second respondent's second extension. This was the basis of the Court of Appeal's judgment delivered by Harmindar Singh JCA in Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor v. Ang Ming Lee & Ors And Other Appeals [2018] 9 CLJ 640, at [24] and [25], as follows:
The second respondent's second extension was however granted after the conclusion of the SPAs in these three applications. Hence, there is an additional ground to invalidate the second respondent's second extension - the second respondent should have given all purchasers of parcels in the building (not only the applicants) a right to be heard before deciding on the second respondent's second extension. This was the basis of the Court of Appeal's judgment delivered by Harmindar Singh JCA in Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor v. Ang Ming Lee & Ors And Other Appeals [2018] 9 CLJ 640, at [24] and [25], as follows:
Whether The Purchasers Were
Entitled To A Right To Be Heard
[24] The final issue raised before us in arguments was whether the purchasers ought to have been given a right of hearing prior to the decision made by the Controller and/or Minister. In this respect, we note that the purpose of the Act was to protect the interest of the purchasers. As the rights of the purchasers to claim damages in the event of delay would be adversely affected or even extinguished, we agree that the purchasers must be given an opportunity to be heard prior to any decision made.
[25] As the purchasers comprise a group which can easily be ascertained, they should at least be notified of the developer's application for any extension of time to complete the project and be given a reasonable period of time to state their views before any such decision is taken. As no such right to be heard was afforded to the purchasers, it is our judgment that the decision made in this case, whether by the Controller or Minister, was null and void and of no effect and should accordingly be set aside.
(emphasis added)."
[24] The final issue raised before us in arguments was whether the purchasers ought to have been given a right of hearing prior to the decision made by the Controller and/or Minister. In this respect, we note that the purpose of the Act was to protect the interest of the purchasers. As the rights of the purchasers to claim damages in the event of delay would be adversely affected or even extinguished, we agree that the purchasers must be given an opportunity to be heard prior to any decision made.
[25] As the purchasers comprise a group which can easily be ascertained, they should at least be notified of the developer's application for any extension of time to complete the project and be given a reasonable period of time to state their views before any such decision is taken. As no such right to be heard was afforded to the purchasers, it is our judgment that the decision made in this case, whether by the Controller or Minister, was null and void and of no effect and should accordingly be set aside.
(emphasis added)."
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