A.Brief Facts
The Appellant, Mayland Supreme Sdn. Bhd., is the developer of the housing project known as Residensi Hampton Damansara. The first 23 Respondents are the parcel owners who initiated a judicial review application (WA-25-547-10/2022) to set aside extensions/exemptions totaling 487 days.
The EOTs provided are:
1st EOT – 167 days
2nd EOT – 122 days
3rd EOT – 365 days
These exemptions, spanning 1 September 2020 to 31 December 2021, were granted under the Temporary Measures for Reducing the Impact of Coronavirus Disease2019 (Covid-19) Act 2020 (ACT 829) (“Covid-19 Act“)
On 18 March 2024, the High Court allowed the purchasers’ judicial review, quashing the decision of the Minister granting EOT which was signed off by the Deputy Housing Controller.
B.Key Issues Raised & Findings
Issue 1: Can a developer apply for a Section 38C exemption after the contractual Vacant Possession (VP) date has expired?
- Purchasers’ Argument: Section 38C(3) states the Minister “shall not consider” an application made after the expiry of the time for delivery of VP because the Developer after the original contractual date, the approval was illegal
- Court’s Ruling: No. Section 38C(3) cannot be read in isolation from Section 38C(1). Act A1641 came into force on 14 January 2022, but allowed exemptions for the year 2021. Reading subsection (3) strictly would render Section 38C(1) illusory and impossible to apply.
- The Mischief Test: Section 38C(3) only bars “sick” or “abandoned” projects whose original contractual VP dates expired before the pandemic began (i.e., before 18 March 2020). It does not bar projects genuinely delayed due to 2021 movement control orders.
Issue 2: Does the Director-General have the authority to sign the exemption approval letter on behalf of the Minister?
- Purchasers’ Argument: The letter was signed by the Director-General of the National Housing Department, not the Minister. No formal gazette notification under the Delegation of Powers Act 1956 was produced.
- Developer’s Argument: Even if procedural execution of the administrative decision signed by the Director General / Deputy Housing Controller was later argued to be defective, the consequential actions taken in reliance by the “Second Actor” (the Developer executing project completions and delivering properties under the extended timeline) remain perfectly valid in fact.
Under the De Facto Doctrine, the acting signatory operates with the implied factual authority of the Minister under Section 38C of the temporary emergency law - Court’s Ruling: Yes. There is a difference between making a decision and communicating it. Minutes proved the Minister made the decision. The Director-General merely communicated it. Furthermore, the 2nd Actor Theory established by the Federal Court in Obata Ambak completely nullifies arguments of defective authorization.
Issue 3: Are purchasers entitled to a right to be heard before an exemption is granted?
- Purchasers’ Argument: The lack of procedural fairness and individual hearings for purchasers invalidated the exemption.
- Court’s Ruling: No. An “exemption” under Act A1641 acts as a statutory “freeze” of time due to force majeure, which is distinct from a contractual extension of time under Regulation 12 HDR. Requiring individual hearings for thousands of purchasers across hundreds of projects would trigger administrative paralysis. The Minister must act fairly, but individual hearings are not required.
Issue 4: Does Section 38C violate Article 13 of the Federal Constitution (Right to Property)?
- Purchasers’ Argument: Suspending Liquidated Ascertained Damages (LAD) claims without compensation amounts to an unconstitutional compulsory acquisition of property rights.
- Court’s Ruling: No. Section 38C is a temporary, proportionate measure to prevent the collapse of the housing industry. It does not transfer or extinguish property ownership permanently. It merely modifies statutory contract terms during a public emergency.
C. Takeaways for the Industry
Although the Court of Appeal has preserved EOT 1,2 and 3. This ruling does not hand developers a blank check to enjoy the EOTs. At the time of application, a developer must (and would have) cross(ed) a high evidential threshold, demonstrating a direct, causal link between pandemic-era lockdowns and the project delay.
If a developer has submitted what was necessary for deliberation, including the construction disruption, the EOTs likely will be preserved.
Broad grounds are available below:
