By Loh Chu Bian

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REDHA INSTITUTE SEMINAR SERIESSeminar on Malaysian Land Law:Recent Development & Controversies

CONTENTS

Statutory provisions

When does the time to deliver VP start

running?

Manner of delivery VP

Conclusion

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STATUTORY PROVISIONS

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Governing provisions Description

Rule 11 of the Housing

Development (Control

and Licensing)

Regulations 1989

Schedule G & Schedule H for

contract of sale for the sale

and purchase of a housing

accommodation

Clause 24 of Schedule G 24 months from the date of

the Agreement

Clause 25 of Schedule H 36 months from the date of

the Agreement

What is the “Date of the Agreement”?

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When does the time to deliver vacant

possession start running?

The change of the legal

position

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The time to deliver vacant possession start

from the date of the payment of booking fee

Factual matrix and surrounding

circumstances

The case of Premier Green

Faber Union ought not be taken as a scientific of technical formula without having any regards to:

i. factual matrix of the case;

ii. current practices in the industry; and

iii. terms of the SPA.

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Purchaser is bound by the statutory SPA where, based on Clauses 25(1) and 25(2)

of the SPA, time starts to run from the date of the SPA, not booking fee .

Premier Green Sdn Bhd V Tribunal Tuntutan Pembeli Rumah & Anor

Factual matrix or surrounding circumstances

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Hoo See Sen & Anor v Public

Bank Bhd & Anor

•Appellants purchased a house for $145,000.

•Appellants paid a booking fee of $1,000 on 18.08.1982.

•SPA was signed on 18.03.1983.

•House was not completed and no delivery had taken

place. 2nd respondent was therefore liable to pay LAD

to the appellants.

Facts

•Time for delivery of vacant possession is 24 months from the date of payment of the booking fee.Decision

•SPA stated that VP to be given within 24 months from the date of payment of the booking fee.

Analysis

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Faber Union Sdn Bhd v. Chew Nyat

Shong & Anor

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•The purchaser bought a unit of property from the

developer and paid deposit on 17.02.1984.

•The SPA was signed on 27.06.1984.

•The developer failed to complete the property

within the stipulated time, and the purchaser sued

for LAD.

Facts

•Court relied and followed Supreme Court’sdecision in Hoo See Sen & Anor v Public Bank Bhd& Anor [1988] 2 MLJ 170 as they “find no goodreason to disagree” with the earlier decision.

•Time starts to run from the date on which thepurchaser paid the booking fee.

Judgment

The "Faber Union Rule”

“For the purpose of ascertaining the date

of delivery of VP the relevant date when

time starts to run is the date on which the

purchaser paid the booking fee and not

the date of the signing of the sale and

purchase agreement.”

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Lim Eh Fah & Ors v. Seri Maju

Padu

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•The first appellant bought one unit of the condominium at

RM 75,300 and deposited 10% of the purchase price to the

respondent on 17.07.1992.

•The developer failed to complete the property within the

stipulated time, and the purchaser sued for LAD.

•The respondent argued that the damages ought to be

calculated from the date the deed of assignment was

signed.

Facts

•The Court followed Faber Union and Hoo See Sen, which held that the date to take into consideration for purposes of calculating the damages on late delivery of VP is the date when the deposit was paid.

Decision

•The long period between the date the purchaser paid deposit and the date the deed of assignment was signed.

•The Court feels a need to protect the right of the purchaser.

Analysis

Lim Eh Fah - The need to

protect purchaser’s interest

“If the date of the signing of the S&P

agreement were to be taken as the

relevant date, when time started to run

for the delivery of the vacant possession,

the respondent could willy-nilly pick any

dates it favoured to execute the S&P

agreement, which would certainly

prejudice the interest of the purchaser.”

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Faber Union Sdn Bhd v. Tribunal Tuntutan

Pembeli Rumah, Kementerian Perumahan

dan Kerajaan Tempatan & Ors

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•Application for judicial review for an order of certiorari to

quash the award of the Tribunal. The Tribunal allowed the

claim of the 2nd – 10th respondents for LAD for late delivery of

VP under SPA.

•The SPAs were signed and VP was delivered within the time

stipulated in SPA.

•The respondents contend that notwithstanding the SPA,

based on the applicant’s brochures and representations

made by the applicant’s sales representatives, VP was to be

delivered earlier.

Facts

•The Court held that the Tribunal was right to follow the principle laid down in Faber Union and Lim Eh Fah, which held that the relevant date for the purpose of calculating the amount of damages is the date the respondents paid the deposits.

Decision

•The representation made by applicant through its brochures and sales representatives that VP could be delivered earlier than was stated in SPA; and the letter to all purchasers informing that there was a delay in completion.

Analysis

Nippon Express (M) Sdn Bhd v. CheKiang Realty Sdn Bhd & Another Appeal

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•The appellants signed two purchase forms to purchase two

pieces of industrial land from respondent. It was agreed that

the respondent shall construct the infrastructures for the two

lands and deliver vacant possession within 30 months from

the date of the agreements.

•Subsequently, dispute arose between the parties as the

Nippon has insufficient funds to purchase both of the lands.

Facts

•The Court followed the principles laid down in Faber Union and held that the relevant date when time start to run is the date on which the purchaser paid the booking fee.

Decision

•This is not a case under HDA, but Contracts Act.Analysis

Lembaman Development Sdn

Bhd v. Ooi Lai Yin & Anor and

Other Cases

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•The applicant, a developer of a housing project had

applied by way of a judicial review for an order of certiorari

to quash decision of the Tribunal.

•The applicant argued that there cannot be a concluded

contract on that date because the amount paid only

amounts to 1% of the purchase price.

•The respondent argued that the time start to run not from

the settlement of 10% deposit, but from the date of

payment of booking fee. Furthermore, there is a document

dated 17.02.2010 which stated “I/We have agreed to

purchase the above captioned property from the above

named vendor...”

Facts

•“…based on the aforesaid authority, the relevant date is the date when the booking fee was paid…”

Decision

Reiteration of Lim Eh Fah in

Lembaman

“The Lim Eh Fah case clearly stipulatedthat where the position otherwise,developers could arbitrarily fix any date tohave the SPA executed to the prejudiceof the purchasers. If this were to be thecase, then developers would obviouslychoose a date later in time with theintention of potentially having to bear lessdamages for late delivery of vacantpossession.”

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Manner of delivery of vacant

possessionSc

he

du

le G

• the issuance of a certificate of completion and compliance

• water and electricity supply ready for connection

• all monies due and payable paid

• the completion of any alteration or additional work

Sc

he

du

le H

• the issuance of a certificate of completion and compliance

• water and electricity supply ready for connection

• all monies due and payable paid

• the separate strata title has been issued

• the completion of any alteration or additional work

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Conclusion In light of the recent High Court decision in

Premier Green, the principles set out by the

Supreme Court in Faber Union is not a

scientific or technical formulae. The factual

matrix or surrounding circumstances of each

case must be taken into account.

In ascertaining the date of delivery of the VP in

an LAD claim, the developer has a reasonable

and valid legal ground to argue that time start

running from the date of the execution of the

SPA.

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Q & A

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Thank you

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