Court of Appeal: Time for Delivery of Vacant Possession Runs from Date of Payment of Booking Fee, not Date of SPA
10 October 2019
Two days after the delivery of the judgement in the Court of Appeal case of GJH Avenue Sdn Bhd v Tribunal Tuntutan Pembeli Rumah, Kementerian Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Ors [2019] 6 AMR 112, a different panel of the Court of Appeal in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor (Civil Appeal No: W-01(A)-174-03/2018) decided that the date of delivery of vacant possession should be calculated from the date when the booking fee was paid and not from the date of the sale and purchase agreement .
The Court of Appeal’s decision in PJD Regency conflicts with GJH Avenue which held that the date when time starts to run for the delivery of vacant possession is the date of the sale and purchase agreement.
In PJD Regency, the appellant, a housing developer sought to quash the award of damages by the 1st respondent, the Homebuyer’s Tribunal ("Tribunal") for the appellants’ delay in the delivery of vacant possession of the property and common property. The Tribunal had calculated the time for delivery of vacant possession from the date of payment of the booking fee. The High Court dismissed the appellant’s judicial review application and affirmed the decision of the Tribunal.
The appellant’s appeal to the Court of Appeal was dismissed. Yew Jen Kie JCA held, inter alia, that -
- Based on Hoo See Sen & Anor v Public Bank & Anor [1988] 1 CLJ (Rep) 125 and Faber Union & Anor v Chew Nyat Shong & Anor [1995] 3 CLJ 797, it is settled law that the ascertainment of liquidated damages for late delivery of vacant possession starts to run from the date of payment of the booking fee;
- The decision in Faber Union has been followed by a series of subsequent cases whenever the Courts have been called to determine the date from which liquidated damages for late delivery commences; and
- The appellant’s contention that the booking fee paid was merely to secure the purchase of the property pending procurement of financing, hence the date of payment of the booking fee should not be used for purpose of calculating time of delivery of vacant possession, is misconceived. Clause 1 of the SPA indicates that payment of the booking fee, accepted by the appellant constitute offer and acceptance. Accordingly, the appellant must build and deliver vacant possession to the purchaser within the agreed period.
Comments
In view of these conflicting decisions of
PJD Regency and
GJH Avenue, it is now uncertain as to whether the period for delivery of vacant possession starts from the date of payment of the booking fee or the date of the sale and purchase agreement. The appellant in
PJD Regency has obtained leave to appeal to the Federal Court. We will have to wait for Federal Court to resolve this question.
Our earlier alert on
GJH Avenue can be accessed
here.