The Federal Court today authoritatively determined that for the purposes of calculating liquidated and agreed damages ('LAD') under a statutory form contract prescribed in the Housing Development (Control and Licensing) Regulations 1989 ('Regulations'), the period for delivery of vacant possession commences from the date of payment of the deposit/ booking fee/ initial fee/ expression by the purchaser of his written intention to purchase the property and not from the date of the sale and purchase agreement.
In handing down its decision in seven appeals that turned substantially on the same issue, the Federal Court held that the decisions of the Supreme Court in Ho See Sen & Anor v Public Bank Berhad [1988] 2 MLJ 170 and Faber Union Sdn Bhd v Chew Nyat Shong & Anor [1995] 2 MLJ 597 which decided that the date of calculation of the LAD commences from the date of payment of the booking fee and not from the date of signing of the sale and purchase agreement are good law.
In relation to a leave question that was unique to the two appeals in PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor [2019] MLJU 1399 ('PJD Regency'), the Federal Court held that the completion date of the common facilities under a statutory form contract prescribed in Schedules H and J of the Regulations is the date the certificate of completion and compliance (CCC) and not the certificate of practical completion (CPC) is issued.
The Federal Court also dismissed the developer's contention in the two appeals, namely the Sri Damansara Cases, that there had been unjust enrichment in the award of the Housing Tribunal which had disregarded the 10% rebate on the purchase price granted by the developer to the purchasers in calculating the amount of the LAD.
The decision of the Federal Court in these appeals will be most welcomed by homebuyers as the decision not only resolves the conflicting decisions handed down in 2019 by the Court of Appeal in PJD Regency and GJH Avenue Sdn Bhd v Tribunal Tuntutan Pembeli Rumah, Kementerian Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Ors [2019] 6 AMR 112 ('GJH Avenue') as to the date from which the calculation of the LAD is to commence, but also clarifies the law in relation to other common questions that arise in late delivery claims, namely the date when common facilities are deemed to be completed and whether any rebate on the purchase price granted by the developer to the purchaser is to be disregarded from the calculation of the LAD.
Our previous Alerts on the Court of Appeal's decisions in PJD Regency and GJH Avenue can be accessed here and here. Our commentary on these Court of Appeal cases is available here.
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