Federal Court rules liquidated ascertained damages payable to house buyers to be calculated from date of booking fee payment
Workers build homes and shops in a partially completed new township about 40km away from Pengerang Integrated Petroleum Complex in Pengerang, Johor, February 4, 2015. — Reuters pic

PUTRAJAYA, Jan 19 — The Federal Court here today ruled in favour of house buyers concerning the calculation of liquidated ascertained damages (LAD) to be paid by housing developers in late delivery of vacant possession of their units.

A five-member bench led by Chief Justice Tun Tengku Maimun Tuan Mat, in a unanimous decision, ruled that the LAD payable by housing developers to purchasers for the late delivery of vacant possession of units in a housing project must begin from the date of payment of booking fees and not from the date of the sale and purchase agreement.

Justice Tengku Maimun said the court would not countenance the bypassing of statutory safeguards meant to protect the purchasers.

“To that extent where the developers act in contravention of the law, they have to accept the resulting consequences.

“While the developers might think that it is a standard commercial practice to accept booking fees, the development of the law clearly suggests to the contrary,” she said, adding that the court would not condone such a practice until and unless the law says otherwise.

Presiding with Justice Tengku Maimun were Federal Court judges Datuk Nallini Pathmanathan, Datuk Abdul Rahman Sebli, Datuk Zabariah Mohd Yusof and Datuk Mary Lim Thiam Suan.

The decision in seven appeals involving three developers — PJD Regency Sdn Bhd, GJH Avenue Sdn Bhd and Sri Damansara Sdn Bhd — were delivered through video conferencing via Zoom application today. The appeals were heard together in November last year.

The Court, in its decision, did not rule in favour of the housing developers as it dismissed the appeals in the cases involving PJD Regency and Sri Damansara and allowed the appeals by three housebuyers against GJH Avenue.

In PJD Regency case, the developer of the “You Vista” project in Cheras filed two appeals against the Tribunal for Homebuyers Claim and two purchasers of certain units in the development project, Ng Chee Kuan and Wong Kien Choon.

Three appeals were filed by three purchasers of units in the “Taman Paya Rumput Perdana Fasa 2” project namely Ong See Chen, Ong See Siew and Ong See Ping. The respondent is the developer of the project GJH Avenue.

The other two appeals were filed by developer Sri Damansara relating to a project known as “Foresta Damansara”. The respondents are the Tribunal for Homebuyers Claim and three purchasers namely Thong Chee Wei, Teoh Sheh Wee and Voon Kuan Chien.

The purchasers had brought the matter against the developer to the Tribunal for Homebuyers Claim over the payment of the LAD in respect of late delivery of properties.

Justice Tengku Maimun said in interpreting social legislation, the court must give effect to the intention of Parliament and not the intention of parties.

“Otherwise, the attempt by the legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory,” she said.

It was contended by the developers that scheduled contracts must be read literally and in accordance with the intention of parties which was a feature of principles of contractual interpretation. — Bernama