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| Dream house?: A young boy admiring the scale model of a housing project at a property fair in Penang last year. – Filepic |
by Roger Tan
ON Tuesday , the Federal Court ruled that the housing controller has no power to waive or modify provisions of the contracts of sale as prescribed by regulations 11(1) and (2) of the Housing Development (Control and Licensing) Regulations, 1989 (1989 Regulations).
The 1989 Regulations were made by the housing minister pursuant to section 24 of the parent Act, namely the Housing Development (Control and Licensing) Act, 1966 (Act 118).
These contracts of sale are better known in the housing industry as Schedules G, H, I and J, depending on the types of housing accommodation being developed.
The prescribed contracts of sale include provisions stipulating the time for delivery of vacant possession and they have to be strictly followed; failing which the defaulting party can be liable upon conviction to a fine not exceeding RM50,000 or to a jail term not exceeding five years or to both. Further, any person who aids, abets or counsels the commission of the offence will face similar punishment upon conviction.
Hence, regulation 11(3) which came into force on April 1, 1989 and remained unamended since, allowed the controller to waive or modify the provisions of the contract of sale if he was satisfied that there were special circumstances or hardship or necessity; compliance of which with any of the said provisions was impracticable or unnecessary.
Regulation 12 then provides for any person aggrieved by the controller’s decision to appeal to the minister whose decision is final and shall not be questioned in any court.
One common modification sought by the developers to the contract of sale is to apply, before the expiry of the stipulated date fixed for handing over of vacant possession, for an extension of time (EOT) so that the developers will not be sued for late delivery and face a claim for liquidated damages (LAD) by the house buyers.
On May 14, five questions were posed to the five-member panel of the apex court namely, Chief Justice Tengku Maimun Tuan Mat, Justice Azahar Mohamed, Justice Alizatul Khair Osman Khairuddin (who has since retired), Justice Idrus Harun and Justice Nallini Pathmanathan. In delivering the unanimous decision of the apex court, Justice Tengku Maimun ruled that:
> the controller has no power to waive or modify any provision in the contract of sale;
> section 24 of Act 118 does not confer power on the minister to make regulations for the purpose of delegating his power to waive or modify the contract of sale to the controller; and
> regulation 11(3) is ultra vires (beyond the powers of) Act 118.
The apex court, however, declined to answer the following two questions posed by the developer, BHL Construction Sdn Bhd because the above ruling effectively meant that there was no decision by the minister:-
> whether the letter granting an extension of time after an appeal pursuant to regulation 12 must be signed personally by the minister and whether the minister could delegate his duties (signing of the letter granting the extension of time) to an officer in his ministry; and
> whether the minister having taken into consideration the interest of the purchaser is obliged to afford the purchasers a hearing prior to the minister granting the extension of time albeit there is no such provision or requirement in Act 118 or the 1989 Regulations.
The 1989 Regulations were made by the housing minister pursuant to section 24 of the parent Act, namely the Housing Development (Control and Licensing) Act, 1966 (Act 118).
These contracts of sale are better known in the housing industry as Schedules G, H, I and J, depending on the types of housing accommodation being developed.
The prescribed contracts of sale include provisions stipulating the time for delivery of vacant possession and they have to be strictly followed; failing which the defaulting party can be liable upon conviction to a fine not exceeding RM50,000 or to a jail term not exceeding five years or to both. Further, any person who aids, abets or counsels the commission of the offence will face similar punishment upon conviction.
Hence, regulation 11(3) which came into force on April 1, 1989 and remained unamended since, allowed the controller to waive or modify the provisions of the contract of sale if he was satisfied that there were special circumstances or hardship or necessity; compliance of which with any of the said provisions was impracticable or unnecessary.
Regulation 12 then provides for any person aggrieved by the controller’s decision to appeal to the minister whose decision is final and shall not be questioned in any court.
One common modification sought by the developers to the contract of sale is to apply, before the expiry of the stipulated date fixed for handing over of vacant possession, for an extension of time (EOT) so that the developers will not be sued for late delivery and face a claim for liquidated damages (LAD) by the house buyers.
On May 14, five questions were posed to the five-member panel of the apex court namely, Chief Justice Tengku Maimun Tuan Mat, Justice Azahar Mohamed, Justice Alizatul Khair Osman Khairuddin (who has since retired), Justice Idrus Harun and Justice Nallini Pathmanathan. In delivering the unanimous decision of the apex court, Justice Tengku Maimun ruled that:
> the controller has no power to waive or modify any provision in the contract of sale;
> section 24 of Act 118 does not confer power on the minister to make regulations for the purpose of delegating his power to waive or modify the contract of sale to the controller; and
> regulation 11(3) is ultra vires (beyond the powers of) Act 118.
The apex court, however, declined to answer the following two questions posed by the developer, BHL Construction Sdn Bhd because the above ruling effectively meant that there was no decision by the minister:-
> whether the letter granting an extension of time after an appeal pursuant to regulation 12 must be signed personally by the minister and whether the minister could delegate his duties (signing of the letter granting the extension of time) to an officer in his ministry; and
> whether the minister having taken into consideration the interest of the purchaser is obliged to afford the purchasers a hearing prior to the minister granting the extension of time albeit there is no such provision or requirement in Act 118 or the 1989 Regulations.
