KUALA LUMPUR (July 29): While the Federal Court last Friday (July 26) provided some clarity on the landmark Ang Ming Lee decision made in 2019 by ruling that it is only applicable prospectively, a lawyer has posed some queries on the limitation of filing a claim within six years and the rights of homebuyers.

Ranjan Chandran, a consultant at Messrs Hakem Arabi & Associates, said last Friday’s decision beyond doubt favours the developer and effectively brings to an end claims by homebuyers for liquidated ascertained damages to the challenges of extension of time (EOT) granted by the Controller of Housing before the Ang Ming Lee decision.

He pointed out that most homebuyers are lay and ordinary people who could be clueless about laws in relation to the Housing Development (Control and Licensing) Act 1966 (HDA).

“The EOT granted before homebuyers signed their sales and purchase agreement (SPA) may affect homebuyers prior to the 2019 Ang Ming Lee apex court decision, as they are lay people and [are] clueless on such laws, and this is compounded further by the fact that lawyers preparing the SPA are the developers' lawyers,” he said.

This is especially so with regards to the limitation period of six years, a ruling made by the apex court last Friday, said Ranjan.

“The ruling on limitation from the date of execution of the SPA does not seem fair to homebuyers [if a] housing development project had not taken off after the SPA is signed and if there [is] a breach that can be ascertained when vacant possession is only been given,” he said.

On the Ang Ming Lee decision being applicable prospectively as ruled by the apex court last Friday, the lawyer asked if Regulation 11(3) Housing Development Regulations 1989 on EOT by Controller of Housing was declared invalid and void by the 2019 Ang Ming Lee decision. He also asked why that invalidity should not apply retrospectively as it goes to the root of the matter.

The root of the matter is that the Federal Court in the 2019 decision had ruled that it is only the Housing and Development Minister that is allowed to sign the EOT and not the Controller of Housing in the decision, as the apex court ruled that Regulation 11(3) that gives such power to the controller is ultra vires (beyond one's legal power or authority) of the HDA where the EOT required the minister’s approval and not the Controller.

Last Friday, a five-member bench led by Court of Appeal president Tan Sri Abang Iskandar Abang Hashim unanimously ruled that the Ang Ming Lee decision made in 2019 should be applied prospectively, and not retrospectively, meaning that the principle is applied to the EOT only after 2019.

Federal Court judge Datuk Seri Hasnah Mohammed Hashim, who wrote and read the brief grounds in the two-hour decision, disagreed with the homebuyers’ counsel (imposing the Ang Ming Lee decision retrospectively), as that would make the EOT granted to developers illegal within the meaning of the law.

“The bench is not persuaded by the submissions advanced by the homebuyers. A new declaration of the law should be applied prospectively, and this is to curb [homebuyers] from enjoying further financial gain.

“The court agrees with the Attorney General’s Chambers’ submissions, made by senior federal counsel Liew Horng Bin, that to allow it retrospectively would result in serious ramifications on the validity of the previous law and potentially lead to administrative chaos,” Hasnah said.

The Federal Court judge also ruled on the limitation to file the claim, and the bench ruled that it is trite that a claim is founded on a breach of contract, and that the claim must be filed within six years from the date of the execution of the SPA.

Hasnah’s full grounds to last Friday’s decision are not out yet. 

https://www.theedgemarkets.com/node/720720