Whether Ang Ming Lee’s case has retrospective effect?

Kok Chay Har & Ors v BH Realty Sdn Bhd [2021] MLJU 402

This is another recent High Court case decided by Justice Quay Chew Soon which has affirmed the decision of another High Court case, Alvin Leong Wai Kuan & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Ors 2020 6 CLJ 55 (‘Alvin Leong’) and held that the Federal Court case of Ang Ming Lee & Ors V Menteri Kesejahteraan Bandar Perumahan, Dan Kerajaan Tempatan & Anor Appeals (2020) 1 CLJ 162 (‘Ang Ming Lee’) has a retrospective effect.

Facts:

The Plaintiffs are purchasers of various condominium units (‘Units’) in a project known as Fortune Perdana Lakeside Residences @ Metropolitan Park (‘Project’) which the Plaintiffs have brought a suit against the Defendant who is also the developer and vendor of the Project.

The Purchasers have entered into the respective Sale and Purchase Agreements between 8.8.2013 and 19.3.2014 (‘SPAs’) whereby the respective SPAs are statutory contracts of sale prescribed in Schedule H of Regulation 11(3) of the Housing Development (‘Regulation 11(3) of HDR 1989’).

According to Clauses 25 and 27 of the SPAs, it is provided that Liquidated Ascertained Damages (‘LAD’) will be paid by the Defendant to the Plaintiffs if the Defendant fails to deliver vacant possession of the Units within the stipulated time (which under the statutory contracts, the stipulated time is 36 months from the date of the SPAs).

The Plaintiffs’ case is such that after the respective SPAs were signed, the Defendant has amended the said prescribed time in the SPA to 42 months without the knowledge and consent of the Plaintiffs. However, the Defendant claims that the Defendant has applied for and obtained two separate extensions of time for the delivery of vacant possession of the Units (collectively referred to as ‘EOTs’) which has extended the said time from 36 months to 48 months. According to the Defendant, the EOTs were granted by the Controller of Housing (‘Controller’) vide letters dated 2.7.2013 and 30.9.2015.

The Defendant also submitted that the EOTs were communicated to the purchasers of the Units, including the Plaintiffs which the first EOT was communicated around July 2013 and the second EOT was communicated around February 2016. On the other hand, the Plaintiffs’ stance were that they were not given a chance to beard before the Controller when the said EOTS were granted and in any event, the delivery of vacant possession has been late since it was outside of the stipulated 36 months period.

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Decision:

The Learned High Court Judge held that this case was not a plain and obvious case for the summary process of striking out whereby the Plaintiffs’ application for striking out was dismissed and ruled:

• The provision which gives the Controller the power to grant such EOTs (i.e. Regulation 11(3) of  HDR 1989 has been held by the apex court to be ultra vires in the case of Ang Ming Lee;
• Under the doctrine of stare decisis, the Learned High Court Judge is bound by and must follow Ang Ming Lee whereby the EOTs granted by the Controller in the present case shall be held invalid;
• In affirming the case of Alvin Leong, it is also held that Ang Ming Lee has retrospective effect and can be relied upon by the Plaintiffs in their claim for LAD as the apex court in Ang Ming Lee did not express a specific direction of prospectivity, thus the general principle of retrospective effect applies;
• As for the issue of res judicata, it is held that res judicata does not apply, but even if it does, the Learned High Court Judge has declined to apply in the present case as it would lead to an unjust result.

Takeaway:

This decision in affirming Alvin Leong and Ang Ming Lee would now be heavily relied upon in all the cases filed by purchasers against developers for LAD in relation to late delivery of vacant possession which may lead to a rising number of suits being filed in the Courts against developer given that the Learned High Court Judge in this case stands by the principle, amongst others, that the Ang Ming Lee case has already determined the EOTs to be illegal and void ab initio. Therefore, it may seem that any EOTs granted by the Controller to developers would be found illegal by the Courts, since there is now another High Court case which has affirmed that the Ang Ming Lee case has a retrospective effect.