Can an extension of time for delivery of vacant possession of a property be granted by the Controller of Housing?

ANG MING LEE & ORS v. MENTERI KESEJAHTERAAN BANDAR, PERUMAHAN DAN KERAJAAN TEMPATAN & ANOR AND OTHER APPEALS [2019] 1 LNS 1741

• By a sale and purchase agreement dated 3 May 2012 (“SPA”) entered into between the developer and the purchasers, it was agreed that the delivery of vacant possession of the units shall be thirty-six (36) months from the date of the signing of the respective SPAs.

• The SPAs were made pursuant to the statutorily prescribed form under Schedule H of the Housing Development (Control and Licensing) Regulations 1989 (“Regulations”).

• Subparagraph 25(2) of Schedule H provides that if the developer fails to deliver vacant possession within thirty-six (36) months, the developer shall be liable to pay the purchaser, liquidated damages (“LAD”).

• The developer vide a letter dated 20 October 2014, applied for an extension of time for the delivery of vacant possession of the units to the purchasers which was made to the Controller of Housing (“Controller”) pursuant to the Regulations.

• Briefly, the reasons relied upon by the developer in support of its application for extension of time were as follows:

i)   non-stop complaints by nearby residents due to extended working hours;

ii)  stop work orders issued by the local authorities; and

iii) investigation conducted on the piling contractor.

• The Controller rejected the developer’s application for extension of time vide a letter dated 24 October 2014.

• Dissatisfied with the decision of the Controller, the developer, vide a letter dated 28 October 2014, appealed to the Minister of Urban Wellbeing, Housing and Local Government (“Minister”) and the appeal was made pursuant to the Regulations.

• The developer’s appeal for the extension of time was purportedly allowed by the Minister in which the Minister vide its letter dated 17 November 2015, granted an extension of twelve (12) months to the developer (“Said Letter”).

• It is to be noted that the Said Letter was signed on behalf of the Controller and there was no indication from the face of the letter that this decision was conveyed on behalf of the Minister or that the signatory was acting on the authority of the Minister.

• Therefore, the developer had forty-eight (48) months to deliver vacant possession of the condominium units to the purchasers instead of the statutorily prescribed period of thirty-six (36) months.

• As a result of the extension of time, the purchasers were unable to claim for the LAD as provided in the SPAs.

• Aggrieved by the decision of the Minister in granting the extension of time, the purchasers filed an application in Court against the Minister, the Controller and the developer to quash the decision to grant the extension of time.

• In the High Court, the High Court allowed the judicial review application and granted orders in favour of the purchasers.

• Dissatisfied with the decision of the High Court, the developer appealed to the Court of Appeal.

• The Court of Appeal found that the impression gained from considering the whole of the Said Letter is that the appeal from the decision of the Controller was decided by the Controller himself which, to put it mildly, was wholly untenable.

• The developer appealed to the Federal Court on the basis that the Minister has delegated his power to the Controller to make a decision under the Regulations.

• The Federal Court dismissed the appeal by the developer on the basis that the legislative intent of the Housing Development (Control and Licensing) Act 1966 is that whilst the Controller is given the power to investigate on the reason why a licensed housing developer is unable to meet his obligation to the purchasers, it is the Minister who is empowered to give directions and make decisions.

• It is the Minister who is entrusted or empowered by Parliament to regulate the terms and conditions of the contract of sale. The Minister cannot delegate the power to regulate to the Controller.