Court of Appeal: Time for Delivery of Vacant Possession Runs from the Date of SPA, not Date of Payment of Booking Fee

In the case of GJH Avenue Sdn Bhd v Tribunal Tuntutan Pembeli Rumah, Kementerian Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Ors (Civil Appeal No: M-01(A)-388-10/2017), the Court of Appeal decided that the date of delivery of vacant possession should be calculated from the date of the sale and purchase agreement instead of the date when the booking fee was paid.
The Court of Appeal’s decision is a clear departure from the Supreme Court’s decisions in Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 3 CLJ 797 and Hoo See Sen & Anor v Public Bank Bhd [1988] 1 CLJ (Rep) 125 which held that the date when time starts to run for the delivery of vacant possession is the date when the purchaser paid the booking fee.
In GJH Avenue, the appellant, a housing developer sought to quash the award of damages by the 1st respondent, the Homebuyer’s Tribunal (“Tribunal”) and to obtain a declaration that the Tribunal has committed a statutory breach of housing development laws. The Court of Appeal in allowing the developer’s appeal, set aside the liquidated and ascertained damages awarded in favour of the purchasers. Zaleha Binti Yusof JCA held, inter alia, that:-
  1. Clause 22 of the Sale and Purchase Agreement (“SPA”), the latter of which is a prescribed statutory contract set out in Schedule G of the Housing Development (Control and Licensing) Regulations 1989 (“HDR 1989”), is clear and unambiguous. It specifically provides that vacant possession shall be delivered within 24 calendar months “from the date of this Agreement”. There is no need for the courts to go through the authorities in finding the plain meaning;
  1. The cases of Faber Union and Hoo See Sen concerned sale and purchase agreements which were pre-schedule G of the HDR 1989 and Housing Development (Tribunal for Homebuyer Claims) Regulations 2002 and are therefore distinguishable and not to be relied on;
  1. Regulation 11(2) of HDR 1989 prohibits the collection of any payment except as prescribed by the SPA clearly indicates that “the date of the Agreement” as provided for in the SPA is the actual date the SPA was entered into. The law as prescribed does not allow the parties to a Schedule G agreement to contract out of the scheduled form; and
  1. The Tribunal has committed a statutory breach by acting beyond the four corners of the housing development laws that created it and gave it power.
The Court of Appeal reaffirmed its earlier position in Kompobina Holding Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor [2017] MLJU 2268 that the date of delivery of vacant possession under a Schedule G agreement is 24 months from the date of the sale and purchase agreement.
The Court of Appeal’s ruling is helpful as it clarifies the commencement date for delivery of vacant possession under a Schedule G agreement. The establishment of Tribunal may have eased the burden of the purchasers in claiming damages from developers, but the Tribunal remains duty bound to apply the law as clearly stated in Schedule G. In the absence of interpretation on the term “the date of this Agreement” in clause 22 of SPA, its plain and clear meaning should be given effect. The Court of Appeal’s decision offers some relief to housing developers who are dealing with purchasers claiming damages for late delivery of vacant possession from the date of payment of a booking fee.