What is the power of the Tribunal for homebuyers’ claim and what is the date for calculating liquidated ascertained damages for late delivery of vacant possession of a property?
GJH AVENUE SDN BHD V TRIBUNAL TUNTUTAN PEMBELI RUMAH, KEMENTERIAN KESEJAHTERAAN BANDAR, PERUMAHAN DAN KERAJAAN TEMPATAN & ORS AND OTHER APPEALS  1 LNS 1184
- Ong See Siew and Ong See Ping (“Purchasers”) had purchased three (3) bungalow units of a project from GJH Avenue Sdn Bhd (“Developer”) and the parties executed a sale and purchase agreement in respect of each of the units.
- Pursuant to Clause 22 of the sale and purchase agreement (“SPA”) of one (1) of the bungalow (“Bungalow”), vacant possession of the Bungalow was to be delivered within 24 months from the date of the SPA.
- As the SPA was signed on 13 February 2012 and vacant possession of the Bungalow was issued on 14 February 2014, the Developer took the stand that they were only two (2) days late in delivering the vacant possession of the Bungalow.
- The Developer made payment for damages for late delivery of vacant possession of the Bungalow amounting to RM220.60, which payment was duly accepted by the Purchasers without any dispute or protest.
- 5 years later however, the Purchasers filed their claim at the office of the Tribunal for Homebuyer Claims (“Tribunal”) for liquidated ascertained damages (“LAD”) against the Developer for a higher sum.
- At the end of the hearing, the Tribunal held that although Clause 22 of the SPA provides that vacant possession is to be delivered within 24 months from the date of the SPA, the date to be taken into consideration to calculate LAD is the date on which the booking fee was paid, which was much earlier prior to the date of the SPA and awarded a further sum of RM12,353-76 as LAD for late delivery of vacant possession of the Bungalow.
- Dissatisfied with the award, the Developer filed a judicial review application at the High Court to quash the entire decision of the Tribunal.
- The High Court found that the Tribunal had neither committed any illegality nor was its decision irrational and found that the Tribunal had correctly applied the law to the facts in making the award.
- The Developer appealed to the Court of Appeal.
COURT OF APPEAL DECISION – APPEAL ALLOWED!
The Court of Appeal found that as Clause 22 of the SPA is very clear and unambiguous, the Tribunal should not have been roaming over the authorities to interpret it but to simply apply the provision as it is. The Court of Appeal therefore found that the Tribunal had acted beyond its scope of lawful powers and had committed a statutory breach which tantamount to an error of law and had acted ultra vires. As a consequence, thereof, the award of the Tribunal was tainted with illegality and the High Court judge had erred in affirming the decision of the Tribunal. The award of the Tribunal was set aside.