By Wong Zi Ying 

Federal Court, Putrajaya

CIVIL APPEAL NO: 01(F)-17-07-2020(J)

Zaleha Yusof; Zabariah Mohd Yusof and Rhodzariah Bujang FCJJ

14 April 2022

The Federal Court (“the Court”) overruled the Court of Appeal and High Court’s decision which ruled that the Tribunal for Homebuyer Claims (“Tribunal”) has the jurisdiction to determine a claim which is not based upon an express term of the sale and purchase agreement (“the SPA”).

The Second Respondent is a purchaser of a unit of an apartment (“the Property”) of the Appellant’s project. The Second Respondent accepted the vacant possession and proceeded to make renovations on the Property but later commenced an action against the Appellant based on the ground that the wrong unit had been given to him. The Second Respondent had claimed that this contradicted the SPA. The Tribunal had allowed the Second Respondent’s claim and the High Court and Court of Appeal had upheld the decision by the Tribunal.

Four questions arose for determination at the Federal Court, namely:

  1. Whether section 16N(2) of the Housing Development (Control and Licensing) Act 1966 (“the Act”) precludes the Tribunal from exercising jurisdiction over a claim which is not based upon an express term of the SPA or its specifications?
  2. Whether the power conferred on the tribunal under section 16Y(2)(e) of the Act to ‘vary or set aside’ the contract confers a jurisdiction on the tribunal to add specifications of its own to the unit purchased by the Second Respondent?
  3. Whether the Second Respondent’s claim on the allotment of the wrong unit is maintainable after accepting the vacant possession of the Property?
  4. Whether a breach of natural justice occurred when the Appellant’s representative was allotted only 15 minutes to respond to the Second Respondent’s allegation?

The answer to each of these questions are as follows:

The Court held that the Tribunal being a creature of the statute can only act within the four walls of the statute. Section 16N(2) of the Act limits the jurisdiction of the Tribunal only to a claim based on the cause of action arising from the SPA between the Second Respondent and the Appellant. Therefore, the Tribunal has no jurisdiction over matters outside of the SPA.

The Tribunal has no power to rectify the SPA by adding or deleting the terms that are not consistent with the statutory terms provided in the Schedule. The power conferred to the tribunal to modify the contract wholly or in part under section 16Y(2)(e) of the Act is limited to a situation when there is a clause in the SPA which is inconsistent with the statutory terms of the Schedule.

The Court held that the Second Respondent’s claim is not maintainable as he has carried out the inspection during the delivery of vacant possession of the said Property. It is an estoppel by conduct on the part of the Second Respondent when he accepted the delivery of vacant possession and proceeded with the renovation of the said Property.

After perusing the records of appeal, the Honourable Court held that the Appellant was fully aware of the allegation and responded to the allegation prior to the hearing. There was no breach of natural justice and the Appellant was given ample time and opportunity before the final hearing of the tribunal to respond to the allegation.

The Federal Court allowed the Appellant’s appeal and found the decision of the Tribunal to be both irrational and unreasonable. No sensible person who had applied the mind to the issue to be decided could have arrived at it. The decision of the Tribunal was also tainted with illegality.

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