theSun Property May 2015

ON FRIDAY

MAY 22, 2015

Email your feedback and

queries to:

[email protected]

Power

of the

Controller

> Rights of the Controller of Housing in granting extension of time to developers

DATO’ PRETAMSINGH

DARSHAN SINGH

REFER

to the comments in the

Star newspaper datedApril 25

by the honorary secretary-

general of theNational House

Buyers Association (HBA) Chang

KimLoong, wherein hementioned

that when a Controller of Housing

decides to grant an extension of

time to developers to hand over

vacant possession, he has

defeated or reduced the

purchaser’s rights.

Has the controller blatantly

and unilaterally taken away

rights which are expressly

given to themby

Parliament? Rights

which are expressly

for the purchaser’s

protection and

created to serve and

protect public interest?

RIGHTS AND

RESPONSIBILITIES

The rights of the

controller is provided in

Regulation 11(3) of the

Housing

Development

Regulation 1989

and

provides as follows.

…Where the controller

is satisfied that owing to

special circumstances or

hardship or necessity

compliance with any of

the provisions in the

contract of sale is impracticable or

unnecessary, hemay, by a certificate

inwriting, waive or modify such

provisions:

Provided that no such

waiver ormodification shall be

approved if such application ismade

after the expiry of the time stipulated

for the handing over of vacant

possession under the contract of sale

or after the validity of any extension

of time, if any, granted by the

controller.

It is stated in the said regulation,

that if the controller is satisfied that

due to special circumstances,

hardship or necessity, the

compliance with the terms of the

SPA is impracticable or

unnecessary, hemaymodify or

waive such provision.

However, the proviso to the said

regulation stipulates that no such

waiver or modification shall only be

approved if the said application is

made after the expiry of the period

stipulated for the handing over of

vacant possession under the SPA or

after the validity of any extension

is granted.

authority in question has acted in

good faith. Aconverse

proposition is also applicable,

if the authority concerned

does not take into account, or

ignores considerations

which are relevant to the

purpose of the statute in

question, of which its act

will be invalid.

De Smith’s Judicial

Review, 6th Edition on p. 479

concisely sums up the law:

“Adecision-

making body

exercising public

functions which is

entrustedwith

discretionmust

not, by the

adoption of a fixed

rule or policy,

disable itself from

exercising its

discretion in

individual cases. It

may not “fetter” its

discretion. Apublic

authority that does fetter its

discretion in that waymay

offend against either or both

of two grounds of judicial

review: the ground of legality and

the ground of procedural propriety.

The public authority offends against

legality by failing to use its powers in

theway theywere intended, namely,

to employ and to utilise the discretion

conferred upon it. It offends against

procedural propriety by failing to

permit affected persons to influence

the use of that discretion. By failing to

“keep itsmind ajar”, by “shutting its

ears” to an application, the body in

question effectively forecloses

participation in the decision-making

process.”

Raja Azlan CJ AG (MALAYA)

(as the late Sultan) whowas then in

Pengarah Tanah danGalian,

Wilayah Persekutuan [v Sri Lempah

Enterprise [1979] 1 MLJ 135 FC had

an opportunity to comment on

departmental powers.

“It is a stringent requirement that

discretion should be exercised for a

proper purpose, and that it should not

be exercised unreasonably. In other

words, all discretion cannot be free

from legal restraint; where it is

wrongly exercised.”

CONCLUSION

It must be remembered that the

standard housing SPA (Schedule G

andH) does not have a

force

majeure

clause or an extension of

time clause, like all other

construction contracts in this

country. A study of the legislative

history of these regulations (which I

had the opportunity to peruse), will

reveal that Parliament in its wisdom,

has parked these clauses with the

controller, as an independent entity

to exercise.

A host of cases have gone to

court since these powers were

conferred in 1989 and in all these

cases, the courts have always held

that for delay in handing over of

vacant houses, the proper party to

evaluate whether any extension

should have been granted is the

Controller of Housing.

Just weeks ago inOxbridge

Height Sdn Bhd v. Abdul Razak

Mohd Yusof &Anor [2015] 2 CLJ 252,

the Court of Appeal had an

opportunity to address settlement

agreement for the extension of time

between the developer and the

purchaser, whichwas entered into

the tacit approval of JPN although

no extension of time was formally

granted by the controller.

The court said:

“With regards to

the second issue on the invalidity of

the settlement agreement, the learned

HighCourt Judge concluded that it

was an attempt to evade the

provisions of the Housing

Development (Control and

Licensing) Act 1966 and the Rules

hereunder. The effect of the

settlement was contracting out of the

lawwhich provided the right to house

buyers to claim for LAD for late

delivery, even though a consideration

of RM1 was paid. The court dismissed

the argument that the settlement

agreement was a collateral contract

which could exist, alongside the SPA.

The court drewon the decisions in

MKRetnamHoldings Sdn Bhd

v. Bhagat Singh Surian Singh

[1985] 1 CLJ 520; [1985] CLJ (Rep)

199

[1985] 2MLJ 212, and

Sentul

Raya Sdn Bhd v. Hariram

Jayaram&Ors andOther

Appeals [2008] 4 CLJ 618

.”

The Court of Appeal went

further and held that:

“We therefore

found that on the peculiar facts of this

appeal, therewas no full contracting

out and no situationwhere the

purpose of the housing legislation

being ‘to protect theweak against the

strong’ was ousted. In terms of policy,

there should be nothing illegal in law

for a Settlement Agreement to be

negotiatedwith the full participation

and direction from JPN, with a view

to save a failing housing project from

being an abandoned project. It will be

in the public interest, and in the

interest of house buyers, if the law

allowed a regulated settlement and

waiver of LADon terms as specified

in the settlement agreement, which

was the subject matter of this appeal.

The purchaser has a right to appeal

against the decision of the controller,

if he or she is dissatisfiedwith

decision to extend the time.”

From this landmark decision

it is established that:

1. the Controller of Housing

has power to grant

extension of time;

2. evenwhere no extension is

granted, any settlement

agreement entered into

with the purchasers,

negotiatedwith the full

participation and direction

from JPN is valid and

binding;

3. it is in the public interest

and interest of house buyers

to allow for waiver of LAD

to save a failing housing

project frombeing an

abandoned project; and

4. suchwaiver is not

contracting out from

the SPA.

Any purchaser who has been

servedwith an extension order by

the controller, maywithin fourteen

(14) days after having been notified

of the decision of the controller,

appeal against such decision and

take it upwith theminister. The

decision of theminister, oncemade

thereon, shall be final and shall not

be questioned in any court. This

power is a check and balance on the

powers of the controller as

the

minister is ultimately

answerable in Parliament and by

courts in judicial review

applications

It is therefore apparent that there

is nothing in lawwhich is illegal for

the Controller of Housing to grant

any extension of time, provided that

the controller can take into account

only such considerations as may be

relevant to the purpose for which

the power has been conferred. If the

controller takes into account certain

circumstances or considerations

which are irrelevant or extraneous

to the purpose or the tenor of the

statute in question, then its act will

be invalid, even if the controller has

acted in good faith.

The controller, like a trustee,

holds power on trust and acts

validly onlywhen acting reasonably.

We hope that the

controller will

continue to exercise these

powers reasonably, to better

protect the interest of house

buyers, as failure to do sowould

be an abdication of the duty

imposed by parliament

Newpropertyportal in town

PROPERTY INDUSTRY

players and

those sourcing real estate to rent or

buywill appreciate

brickz.my

, the

latest go-to online property portal

recently launched. Aimed at

providing “crucial and transparent”

information, the portal is

established on due diligence,

providing all that is needed tomake

property hunting a breeze.

Brickz.my

provides real time

information. It is interactive and is

easy to use, even for first timers

who can easily discover transaction

prices and details of a particular

project or a property. Users can

search for projects or townships, or

specify a preferred location in

sourcing for residential, industrial,

commercial or land. Information is

aplentywithwork still in progress

brickz.my

“What makes

brickz.my

unique

is that we offer themost up-to-date,

relevant information on sub-sale

property transaction prices the

moment a prospective buyer checks

out a particular property. This helps

themmake the right decision in a

fast, timely and easymanner,

without having to refer to any other

sources until they obtain an official

valuation as confirmation,” said its

founder andmanaging director

Premendran Pathmanathan (

pix

Content on its database is

received from the Valuation and

Property Services Department

(Jabatan Penilaian dan

PerkhidmatanHarta or JPPH)

which officially records property

transactions once stamp duty for

the sales and purchase agreement

(SPA) is paid. In addition, its

“Pattern Recognition System”

further strengthens the credibility

of the data on the website, by

omitting and fixing transactions that

are incomplete or inconsistent. The

website also uses specific

algorithms to automate repetitive

work, where it reduces errors and

increases accuracy of data.

A brief search on the website will

show a listing of properties and

prices in an area. There is also a side

boxwith “quick facts” on the lowest,

highest and average prices. To ease

searches, maps are also provided for

a rough indication as towhere the

location of an intended property is.

Charts and graphs are also available,

providing information on current

market trends and such.

Those seeking in-depth

information on a particular

property, such as the address, will

be required to pay RM30 per

project. Another alternative is to

pay RM300 as a yearly subscription

fee which gives unlimited access to

all enquiries, transactions and

addresses etc.

For now, the site features sub-

sale transactions located only in

Kuala Lumpur and Selangor. Plans

to include those in other states are

in the pipeline. Amobile-friendly

version is also available for those

on the go.

From the above it is apparent that

the controller has a right to grant

extension of time by the very

Parliament that has granted the

right to purchasers to claim

LiquidatedAscertainDamages or

LAD. Certainly this exercise of

power may be stated to be proper

exercise of administrative

discretion and not otherwise.

EXCERPTS AND CITATIONS

M. P. Jain, in

Administrative Lawof

Malaysia&Singapore (1980) wrote

on p. 289: Many a time the statutes

confer power but do not mention the

considerations for its exercise. Even

in such a case, the authority can take

into account only such considerations

asmay be relevant to the purpose for

which the power has been conferred.

If the authority takes into account

certain circumstances or

considerations which are irrelevant

or extraneous to the purpose or the

tenor of the statute in question, then

its act will be invalid even if the