SHAH ALAM (May 2): The High Court on Wednesday dismissed a lawsuit filed by six house buyers of a project in Bangi, who were seeking damages from a subsidiary of UEM Sunrise Bhd (KL:UEMS) over the late delivery of their properties.
In delivering her decision, Judicial Commissioner Indra Nehru Savandiah said the court is bound by the precedent set by the Federal Court in the Obata-Ambak Holdings Sdn Bhd versus Prema Bonanza Sdn Bhd case.
This means the court is compelled to follow the landmark ruling issued last year that held that the apex court's earlier ruling in house buyer Ang Ming Lee's case in 2019 — that an extension of time or EOT signed by the Controller of Housing instead of the Minister of Housing and Local Government is invalid — would only be applied prospectively, or on future cases.
The Bangi house buyers initiated their suit in 2021 to claim for liquidated ascertained damages (LAD) from Symphony Hills Sdn Bhd, a subsidiary of UEM Sunrise. Their claim stemmed from the developer's delayed handover of their properties. Symphony Hills had obtained an EOT from the Controller of Housing in 2020, citing the Covid-19 pandemic, which extended the delivery timeline from 24 to 36 months.
In the Ang Ming Lee case, the Federal Court, under the judgment of Chief Justice Tun Tengku Maimun Tuan Mat, ruled in November 2019 that the power to grant EOTs rests solely with the minister and cannot be delegated to the Controller of Housing. Consequently, any such delegation would be deemed null and void.
Subsequently, in July last year, the Federal Court clarified in the Obata-Ambak case that the precedent set in the Ang Ming Lee case regarding EOTs would be applied prospectively, and not retrospectively. This was intended to prevent house buyers from unjustly enriching themselves by claiming LAD in cases where the EOT was granted by the Controller of Housing before the Ang Ming Lee ruling.
The Symphony Hills house buyers' case centred on the argument that the Controller of Housing's approval of an EOT for the delivery of vacant possession was invalid. They contended that the Federal Court had, in the Ang Ming Lee case, found Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 to be ultra vires (beyond the legal power) of the Housing Development (Control and Licensing) Act 1966.
Regulation 11(3) stipulates that the Controller of Housing can waive or alter contract of sale terms when strict compliance is impractical or unnecessary due to special circumstances, hardship, or necessity. This allows housing developers to apply for an extension of time for vacant possession by requesting modifications to their standard sale and purchase agreement.
The legal proceedings were initially put on hold pending the Federal Court's decision in the Obata-Ambak case. Following the Obata-Ambak judgment, both the homebuyers and the developer filed separate applications to seek a determination of the proceedings based on legal questions, as provided under Order 14A of the Rules of Court 2012.
Key among the questions that Symphony Hills, the developer, requested the court to determine were: (1) whether the Federal Court’s decision in Obata-Ambak would apply in their case; (2) whether the letter of approval granted by the controller of housing is valid; and (3) whether the Federal Court’s decision in Ang Ming Lee applies prospectively.
On Wednesday, Indra Nehru ruled that she was bound by the recent Obata-Ambak decision. Consequently, she dismissed the house buyers' suit and ordered them to pay costs of RM10,000.
The developer's application to strike out the suit under Order 14A of the Rules of Court for LAD was also allowed, with the homebuyers jointly or severally required to pay Symphony Hills a sum of RM20,000 in costs.
Lawyer Nurin Ayuni Nazira from Messrs Nashitoh Kassim & Associates represented the homebuyers, while counsel Leonard Yeoh, along with Caleb Sio and Chen Mei Yan, from Tay & Partners, acted for Symphony Hills.
This marks the second dismissal of a suit against Symphony Hills based on the Obata-Ambak precedent, following a similar decision by another Shah Alam High Court in October last year.