Federal Court rules housing controller has no power to grant EOT to developers

Last update: 26/11/2019

PUTRAJAYA, Nov 26  -- The Federal Court here today 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 Tan Sri Tengku Maimun Tuan Mat who led a five-member panel held that Regulation 11 (3) of the Housing Development (Control and Licensing) Regulations 1989 which confers power on the controller to waive and modify the terms and conditions of the contract of sale between purchasers and the developer was ultra vires the Housing Development (Control and Licensing) Act 1966.

"By modifying the prescribed terms and conditions and by granting the developer the EOT, the controller has denied the 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 the purchasers but rather the developer and that militated the intention of Parliament.

She also said there was no provision enabling the controller to exercise the Minister of Urban Wellbeing, Housing and Local Government's powers.

Justice Tengku Maimun said whether or not the developer had been granted an extension of time did not necessarily determine the fate of the project, adding that the EOT only determines payment of LAD.

Justice Tengku Maimun said the argument by counsel for the developer that the Minister has delegated his power to the controller to make a decision on extension of time cannot be sustained.

She also said there was no decision by the Minister to grant the extension of time to the developer due to the fact that the letter was signed by one K.Jayaseelan on behalf of the controller to convey a decision of the ministry. 

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

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

The apex court today 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 developer of the project BHL Construction Sdn Bhd.

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

In their application for judicial review, they sought an order to quash the decision allowing BHL Construction an extension of time 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 extension of time. The controller rejected the developer's application for extension of time.

The developer then appealed to the Minister of Urban Wellbeing, Housing and Local Government who, on Nov 17, 2015, allowed an extension of 12 months. As a result of the extension of time, the purchasers were unable to claim for LAD as provided for in the SPA.

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