Vacant Possession: A Developer's Horror Story?

Based on a true story, Witter Yee recounts the tale of two conflicting Court of Appeal decisions.

Housing developers in Malaysia thought they had found some relief when the Court of Appeal decided that the date of delivery of vacant possession should be calculated from the date of the sale and purchase agreement. Alas, their relief was short-lived when two days later, a different panel of the Court of Appeal decided that it should be calculated from the date when the booking fee was paid.

This is the tale of the Court of Appeal's decisions on 20 August 2019 in the case of GJH Avenue Sdn Bhd v Tribunal Tuntutan Pembeli Rumah, Kementerian Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Ors [2019] 6 AMR 112 ("GJH Avenue") and on 22 August 2019 in the case of PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor (Civil Appeal No: W-01(A)-174-03/2018) ("PJD Regency").

GJH AVENUE

Brief Facts

The 2nd and 3rd respondents purchased a bungalow unit from the appellant for the purchase price of RM402,600.00. A booking fee of RM5,000.00 was paid for the said unit on 24 October 2011. Thereafter, the Sale and Purchase Agreement was signed between the parties on 13 February 2012 ("GJH-SPA"). Notice of delivery of vacant possession for the said unit was issued by the appellant on 14 February 2014. Clause 22 of the GJH-SPA requires vacant possession to be delivered within 24 months from the date of the GJH-SPA. As the GJH-SPA was signed on 13 February 2012, and the notice of vacant possession was issued on 14 February 2014, the appellant took a stand that they were only two days late in delivering the vacant possession of the said unit.

The 2nd and 3rd respondents subsequently filed their claim at the 1st respondent, the Homebuyer's Tribunal ("Tribunal"), for liquidated ascertained damages against the appellant for a higher sum. The Tribunal decided that the 24 months for delivery of vacant possession commenced from the date on which the booking fee was paid and awarded the sum of RM12,353.76 to the 2nd and 3rd Respondents as liquidated ascertained damages.

Dissatisfied with the award, the appellant sought to quash the award of damages by the Tribunal and to obtain a declaration that the Tribunal has committed a statutory breach of housing development laws. The High Court dismissed the appellant's judicial review application. The appellant appealed to the Court of Appeal.

Decision of the Court of Appeal

The Court of Appeal in allowing the...