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Housing controller has no power to grant EOT to developers

November 28th, 2019 Leave a comment

construction3The Federal Court here yesterday ruled that the housing controller has no power to grant an extension of time (EOT) to developers to complete their property development projects.

Chief Justice (CJ) Tan Sri Tengku Maimun Tuan Mat, leading a five-member panel, held that Regulation 11 (3) of the Housing Development (Control and Licensing) Regulations 1989 conferring power on the controller to waive and modify the terms and conditions of the contract of sale between purchasers and the developer is ultra vires the Housing Development (Control and Licensing) Act 1966.

“By modifying the prescribed terms and conditions and granting the developer the EOT, the controller has denied purchasers’ right to claim for liquidated damages (LAD),” she said.

Justice Tengku Maimun said the modification and granting of EOT to the developer does not appear to protect or safeguard purchasers but rather the developer and that militated Parliament’s intention.

She also said there is no provision enabling the controller to exercise the urban wellbeing, housing and local government minister’s powers.

The CJ said whether or not the developer is granted an EOT does not necessarily determine the project’s fate, adding that the EOT only determines payment of LAD.

Justice Tengku Maimun said the argument by counsel for the developer that the minister had delegated his power to the controller to decide on an EOT cannot be sustained.

She also said there was no decision by the minister to grant an EOT to the developer because the letter was signed by one K Jayaseelan on behalf of the controller to convey a decision by the ministry.

She said there was absence of the minister’s affidavit to explain the discrepancy and to state the minister had indeed decided to allow the developer’s appeal.

The other judges were Chief Judge of Malaya Tan Sri Azahar Mohamed, and Federal Court Judges Tan Sri Idrus Harun and Datuk Nallini Pathmanathan. Another judge, Datuk Alizatul Khair Osman Khairuddin, who heard the appeal in May, has retired this year.

The apex court yesterday allowed the four appeals filed by 104 purchasers of condominium units in Sri Istana Condominium in Old Klang Road and dismissed two appeals brought by the project’s developer BHL Construction Sdn Bhd.

In February 2017, the High Court, in allowing a judicial review application by the purchasers, set aside the minister’s order to give a 12-month extension to BHL Construction to complete the project.

In their application for judicial review, they sought an order to quash the decision allowing BHL Construction an EOT for delivery of vacant possession from 36 months to 48 months.

The developer failed to complete and hand over the units to the purchasers and wrote to the Controller of Housing under the ministry for an EOT. The controller rejected the developer’s application.

The developer then appealed to the urban wellbeing, housing and local government minister who, on Nov 17, 2015 allowed an extension of 12 months. As a result, the purchasers were unable to claim for LAD as provided for in the sale and purchase agreement.

The Court of Appeal last year reversed the High Court ruling, stating the controller has wide powers under the Act.

Source: Bernama

 

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