ALVIN LEONG WAI KUAN & 14 ORS v BLUDREAM CITY DEVELOPMENT SDN BHD AND OTHER APPEALS . Federal Court Civil Application No. 08(f)-337-08/2021(B), 08(f)-339-08/2021(B), 08(f)-344-08/2021(B), 08(f)-345-08/2021(B), 08(f)-346-08/2021(B), 08(f)-347-08/2021(B) Coram: Y.A.A. Tan Sri Datuk  Amar Abang Iskandar Bin Abang Hashim, HBSS, Y.A. Dato Rhodzariah Binti Bujang, HMP, Y.A. Dato’ Mohamad Zabidin Bin Mohd Diah, HMP. Decision delivered on 04.01.2023. Holding Watching Brief: Real Estate and Housing Developers' Association Malaysia (“REHDA”): Represented by of Mr. Thoo Yee Huan of Messrs Halim Hong & Quek     BRIEF FACTS The purchasers and the developer have entered into sale and purchase agreements (“SPA”) after the Controller has granted extension of time to complete the Project within 42 months to the developer (“1st Extension”). Subsequently, there was a 17-months stop work order (“the SW Order”) issued by Majlis Perbandaran Subang Jaya (“MPSJ”) as it was discovered that there were cracks on the school building beside the construction site of the Project. The developer then further applied to the Controller for extension of time to deliver vacant possession from 42 months to 59 months due to the SW Order but the Controller only granted an extension from 42 months to 54 months. The developer appealed to the Minister and the Minister allowed the further extension from 42 months to 59 months (“2nd Extension”). Unsatisfied with the Minister’s decision, the purchasers filed applications for judicial review against the 2nd Extension. The purchasers did not challenge the 1st Extension in the judicial review applications.   HIGH COURT’S DECISION The learned judge in the High Court has allowed the judicial review applications on the basis that he was bound by the decision of the Federal Court in Ang Ming Lee & Ors v Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and other appeals [2020] 1 CLJ 162 (“Ang Ming Lee”). The learned judge also proceeded to invalidate the 1st Extension despite there being no challenge on the 1st Extension.   COURT OF APPEAL’S DECISION The developer, Minister and Controller then filed an appeal to the Court of Appeal. The Court of Appeal allowed the appeal and set aside the High Court’s decision and has distinguished the current case from Ang Ming Lee as the purchasers in the current case did not challenge against the 1st Extension in the judicial review applications. The court is of the view that : - i. Although the Federal Court in Ang Ming Lee held that Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 is ultra vires the Housing Development (Control and Licensing) Act 1966 (“HDA”), it did not oust the Minister’s power to grant extension of time under Section 24(2)(e) of HDA; ii. The purchasers’ right to be heard by the Minister prior to granting the extension of time is not expressly stated in HDA, shall be determined on a case-by-case basis; iii. Parliament has granted flexibility to the Minister to grant extension of time under Section 24(2)(e) of HDA, which the Minister in granting the 2nd extension had taken into account relevant considerations which includes :- a. Reasonableness, fairness, proportionality and human decency; b. Balancing the competing interests of the parties; and c. Circumstantial facts revolving around the Project.   FEDERAL COURT’S DECISION Unsatisfied with the Court of Appeal’s decision, the purchaser then filed a Notice of Motion for leave to appeal to the Federal Court. Two primary questions of law have been orally submitted and argued by the parties’ counsel including from the Attorney General Chambers representing the Government whereby involving whether the Minister has power to grant extension of time and whether natural justice need to be observed with purchasers being accorded the right to be heard. Upon hearing the parries, the Federal Court has today unanimously dismissed the motion being not able to satisfy the threshold required under the Court of Judicature Act 1964 and with no order as to costs.   COMMENTARY With this refusal to grant leave by the Federal Court, the Court of Appeal decision of this case is now legally binding. It will now bring the closure of the issue whether the Minister has power to grant extension of time based on the circumstances of each case upon taking into account relevant considerations which may include the circumstantial facts revolving around the Project as long as the Minister’s decision was arrived by the light of reason, logic, and the exceptional exigencies even without hearing the rights of the purchasers. Furthermore, there was an expert report justifying the said decision. Even in Ang Ming Lee case, the Apex Court recognises the Minister’s discretion and power to grant such extension.     However, the impact of this Federal Court decision may not resolve/assist the pending cases in courts where the extension of time is granted by Controller. . This case update is an updated version of our case update dated 21 July 2021 . This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice. About the Authors Thoo Yee Huan Senior Partner, Dispute Resolution Halim Hong & Quek yhthoo@hhq.com.my . Hee Sue Ann Associate, Real Estate Halim Hong & Quek sahee@hhq.com.my

The case above involves a claim for specific performance made by the Plaintiff against the Defendants. In essence, the Plaintiff commenced a legal action for an order of specific performance against the developer (1st Defendant) to pay RM 2,050,000.00 being the balance purchase price due under the SPA. In a gist, the Plaintiff and the 1st Defendant had entered into a SPA where the Plaintiff agreed to sell and the 1st Defendant agreed to purchase the subject land for a purchase price of RM4,500,000.00. The 1st Defendant then put down the deposit for the subject land and the Plaintiff admitted to receiving the same. The final date for the 1st Defendant to furnish the balance purchase price fell on 6.11.2016 taking into account a 30-day automatic extension as provided for in the SPA. The 1st Defendant however failed to make payment of the balance purchase price by this date. Some 3 years later, the 2nd Defendant (a former director of the 1st Defendant), served a letter to the Plaintiff enclosing 2 post-dated cheques for the sum of RM4,000,000.00 in total. One of the cheques cleared, while the other one did not. The Plaintiff claimed that the 2 post-dated cheques for the sum of RM4,000,000.00 were payments for the balance purchase price due under the SPA. The 2nd Defendant on the other hand contended that the payments were for a different subject property which the 1st Defendant was not privy to. The 1st Defendant took the position that the 2nd Defendant was never authorized to make payments on behalf of the 1st Defendant in so far as the SPA in question was in concern. Furthermore, the 2 cheques were not issued in the name of the 1st Defendant. It was also the 1st Defendant’s position that the SPA had naturally lapsed after 6.11.2016 and in light of the conduct of the parties, the SPA had been abandoned and had come to an end. The 1st Defendant relied on clause 8 of the SPA and contended that in the event of default (failure to furnish balance purchase price within time), the Plaintiff is only entitled to terminate the SPA as well as to forfeit the deposit paid. There were various issues that required the court’s determination in the above suit and this included the following: (i)       Whether the SPA was still enforceable? (ii)      Whether the 1st Defendant had breached the SPA? (iii)     Whether the cheques were issued as payment for the balance purchase price of the subject property under the SPA? (iv)      Whether the 2nd Defendant is liable for the alleged dishonoured cheque pursuant to s. 47 of the Bills of Exchange Act 1949? (v)       Whether the Plaintiff was entitled to an order of specific performance against the 1st Defendant to complete the SPA? Our partner, Ankit R Sanghvi successfully represented and defended the 1st Defendant in the above proceedings. The High Court dismissed the Plaintiff’s claim with costs of RM40,000.00 ordered to be paid by the Plaintiff to the 1st Defendant. Click on Print to PDF button to download the full Grounds of Judgment. This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

Can a buyer of a property rescind the sales and purchase agreement based on an alleged misrepresentation of having an unimpeded view?  Sureendhran Subramaniam & Anor v Lush Development Sdn Bhd & Anor | June 21, 2022 | High Court [2022] MLJU 1453 The Plaintiffs claimed against the 1st Defendant (developer) for an order to rescind the sale and purchase agreement for a property and for the 1st Defendant to refund the 2nd Defendant (bank) of monies released to the 1st Defendant. The Plaintiffs claimed that the 1st Defendant had misrepresented to the Plaintiffs that the property will have an unimpeded view, a factor which the Plaintiffs claim was fundamental in their decision to purchase the property and which they claim had induced them to enter into the SPA with the 1st Defendant. Subsequently there was construction of MRT Line 2 in the vicinity of the property which the Plaintiffs claimed had impeded the view from his property. The High Court dismissed the Plaintiffs claim based on 3 grounds: [1] There was no misrepresentation by the 1st Defendant because the representation in the brochure has not resulted in something different than what it actually was. The Plaintiffs were unable to show the court how his property's view was impeded. Further, Clause 7.1 of the SPA states that the Plaintiff's' purchase of the property was not based on any representation by the 1st Defendant. [2] The facts showed that by entering into the Deferred Payment Scheme with 1st Defendant, the Plaintiffs had agreed that the 3 post-dated cheques that he has delivered to the 1st Defendant will be treated as differential sum which will enable the 2nd Defendant to disburse the loan to the 1st Defendant. The 1st Defendant did not misrepresent the 2nd Defendant when it confirmed that the Plaintiffs had paid the differential sum to the 1st Defendant. [3] The Plaintiffs had failed to specifically plead fraud or negligence in regards to their claim for misrepresentation. In the absence of fraud or negligence, the court will treat it as innocent misrepresentation which will not be sufficient for the Plaintiffs to rescind the SPA. A party cannot rescind a contract based on innocent misrepresentation unless it renders the subject of the sale different from what was contracted for. Our partner, Ankit R Sanghvi represented the developer (1st Defendant) and successfully defended the Plaintiff’s claim to rescind the SPA. The High Court also ruled in favour of the 1st Defendant's counterclaim against the Plaintiff. Click 'Print to PDF' for the case law. This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

COUNTRY GARDEN DANGA BAY SDN BHD V HOUSING TRIBUNAL & HO CHEE KIAN [2022] 1 LNS 662 (FEDERAL COURT) Coram: Zaleha Yusof FCJ, Zabariah Mohd. Yusof FCJ, Rhodzariah Bujang FCJ Brief facts: The 2nd Respondent (Purchaser) entered into a Sale and Purchase Agreement (“SPA”) under Schedule H of the Housing Development (Control and Licensing) Regulations with the Appellant (Developer) on 23.8.2013 to purchase a unit with parcel no. Block 11-A-3402 (“the Unit”). Vacant possession was subsequently delivered to the 2nd Respondent on 01.11.2017 wherein he accepted the vacant possession by signing on the inspection form and thereafter proceeded to renovate the Unit. Unhappy with his Unit, the 2nd Respondent filed a claim against the Appellant to the 1st Respondent (Tribunal for Homebuyer’s Claim) on 02.01.2018 alleging that the 2nd Respondent was given the wrong unit because it came with an open balcony and not the covered balcony that he has requested for and therefore sought for damages. . Tribunal’s Decision The Tribunal found in favour of the 2nd Respondent by giving a ruling to amend the Unit’s specifications in the SPA to a Unit with covered balcony as the feature of the display model under section 16Y (2) of the Housing Development (Control and Licensing) Act 1966 (“HDA 1966”) and awarded the sum of RM50,000.00. The Appellant aggrieved by the decision has filed for judicial review at the High Court to quash the decision of the Tribunal and subsequently appealed to the Court of Appeal. Unfortunately, both Courts upheld the decision of the Tribunal and hence, this appeal by the Appellant to the Federal Court. . Federal Court’s Decision The appeal raises four (4) questions of law namely: - (a) The extent of the Tribunal’s jurisdiction under Section 16N (2) HDA 1966; (b) The extent of the Tribunal’s power under Section 16Y(2)(e) HDA 1966; (c) Estoppel issue; and (d) Natural justice issue. The Federal Court held that the Tribunal does not have the jurisdiction to consider the balcony issue raised by the 2nd Respondent because it was not a term in the statutory SPA. Tribunal’s jurisdiction shall be limited to a claim based on a cause of action arising from the express terms contained in the SPA and exclude any other collateral contracts outside the SPA. (Section 16N (2) of HDA 1966) The Tribunal also does not have the power to rectify the SPA to include terms which are inconsistent with the statutory SPA. The Federal Court held that the Tribunal’s power to vary or set aside the contract under Section 16Y(2)(e) of HDA 1966 shall be exercisable only in situation where there is inconsistency with the statutory SPA. On the estoppel issue, the Federal Court held there was an estoppel by conduct on the part of the 2nd Respondent when he accepted the vacant possession and exercised his right to ownership by renovating the unit. As such, the 2nd Respondent is estopped from claiming that he was given the wrong unit. Lastly, the Federal Court found there was no breach of natural justice as they are of the view that the Appellant had been given ample opportunity to examine the documents where they had some 2 months before the hearing to respond to the 2nd Respondent’s allegations that the SPA had been modified without consent and hence there was no issue of surprise. The appeal by the Appellant was allowed accordingly with cost of RM30,000 and the award of the Tribunal was therefore set aside.   This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice.   Written by: TEOH ZI HAN LL.B (Hons) Cardiff University ASSOCIATE (REAL ESTATE) zhteoh@hhq.com.my

OBATA-AMBAK HOLDINGS SDN BHD v PREMA BONANZA SDN BHD AND ANOTHER APPEAL [2022] MLJU 354 (COURT OF APPEAL) AZIZAH NAWAWI, ABU BAKAR JAIS AND LEE HENG CHEONG JJCA Facts: The Respondent is the Developer of a housing project, The Sentral Residences (“the Project”). The Purchaser of A-31-G and A-31-F entered into a prescribed statutory sale and purchase agreement (“SPA”) with the Developer which Clause 25 and Clause 27 had prescribed the delivery period of 54 months. High Court’s Decision The High Court judge struck out the Purchaser’s Summary Judgement based on the following grounds: Purchaser’s claim is time barred; Purchaser is required to challenge the EOT by judicial review; and There is a waiver or estoppel against social legislations. Court of Appeal’s Decision Issue (i) Whether the Purchaser’s claim for LAD is statute barred The Court of Appeal held that since the Purchaser challenges both clause 25 and 27 of the SPA from the inception or execution of the SPAs, the cause of action should run from the date of execution of the SPAs which is on 11.07.2012 and 18.07.2012 respectively. Since the 6 year period had expired on 10.07.2018 and 17.07.2018 respectively when the Purchaser filed suit on 18.06.2020, the Purchaser’s claim is time barred. The Court of Appeal hence dismissed the Purchaser’s appeals with cost. This Case Update is intended to be informative & is not intended to be nor should be relied upon as a substitute for legal or any other professional advice. Written by: HEE SUE ANN LLB (Hons) Multimedia University ASSOCIATE (REAL ESTATE) sahee@hhq.com.my