Contributed by Gregory Das

The recent Federal Court decision of PJD Regency Sdn Bhd vs Tribunal Tuntutan Pembeli Rumah & Ors was a landmark in the housing laws of the country. 

By the ruling, it is now firmly entrenched that the liquidated ascertained damages (LAD) for the late delivery of vacant possession of a housing unit is to be calculated from the date of payment of a booking fee until the date of the issuance of the Certificate of Completion and Compliance (CCC). 

The decision is of wide consequence and is inherently beneficial to homebuyers. 

However, a question may arise on whether the decision applies to arrangements on booking fees between developers and homebuyers that predated the ruling and also to the awards of the Homebuyer Tribunal that were delivered prior to the judgment. 

Are these arrangements and awards invalid in light of the PJD Regency principle even though they came about before the Federal Court judgment?

The answer would appear to lie in the well-settled principle that a court judgment would be “retrospective in effect unless a specific direction of prospectivity is expressed” as in the Semenyih Jaya Sdn Bhd vs Pentadbir Tanah Daerah Hulu Langat case. 

Put simply, a court judgment that establishes a new principle would overrule all previous court decisions that are contrary to the new principle, unless otherwise expressly stated in the judgment.

Applied in the present context, all previous court decisions that held that LAD is calculated from the date of the Sale and Purchase Agreement (SPA) until the date of the Certificate of Practical Completion (CPC) are no longer good law. This is because the Federal Court in PJD Regency did not state expressly that its ruling only had a prospective effect.

It would follow that any awards of the Homebuyer Tribunal that predated the Federal Court’s decision in PJD Regency that computed the LAD payable to begin from the date of the Sale and Purchase Agreement or to end at the date of the CPC may well be liable to be struck down as being contrary to the PJD Regency principle. 

A somewhat similar issue on the retrospective application of a landmark ruling in housing law arose recently in the wake of the seminal Federal Court decision of Ang Ming Lee vs Menteri Kesejahteraan Bandar (which struck down as unlawful a legislative provision that empowered the Housing Controller to extend the time for the delivery of vacant possession). 

Following that Federal Court decision, a case came before the High Court where it was argued that the Ang Ming Lee ruling did not apply to applications for time extensions and decisions of the Housing Controller and the Minister of Housing that predated the Federal Court ruling.

This argument was rejected and the High Court held that the Ang Ming Lee ruling applied to decisions of the Housing Controller and the Minister and the developers’ applications for time extensions even though those events preceded the Federal Court principle (as in the Alvin Leong Wai Kuan vs Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan case. However, this precedent may well only be applied where a legislation has been struck down, which is dissimilar to the PJD Regency context).

It would also appear to mean that any contractual arrangements on booking fees that arose before the PJD Regency ruling would be affected by the ruling. 

In a case from the United Kingdom on the retrospective application of court judgments, the apex court there decided that: “We cannot say that the law was one thing yesterday but is to be something different tomorrow. If we decide that the rule as to the date of the notice to treat is wrong we must decide that it always has been wrong, and that would mean that in many completed transactions owners have received too little compensation (Birmingham Corporation vs West Midland Baptist (Trust) Association (Inc).”

Therefore, there may well not be scope to argue that the LAD payable for late delivery under Sale and Purchase Agreements that predated the PJD Regency decision should be computed from the date of the agreements and not the date of collection of the booking fees. 

The above only reaffirms the wide application of the PJD Regency decision. The ruling applies both to transactions and Homebuyer Tribunal awards that came before it as well as those that antedate the ruling.  

Find out more in the earlier article Federal Court resolves principles on LAD calculation in favour of homebuyers.

Gregory Das is a practising dispute resolution lawyer in Kuala Lumpur and is familiar with housing development disputes.

Disclaimer

This article is intended to convey general information only. It does not constitute legal or other advice or the provision of legal or other professional services, and shall not be relied upon as such.

This article cannot disclose all of the risks and other factors necessary to evaluate a particular situation. Any interested party should study each situation carefully. You should seek and obtain independent professional advice for your specific needs and situation.

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