The Ang Ming Lee case and its implications
The Federal Court in Ang Ming Lee had basically held that the Minister of Housing and Local Government cannot delegate his powers under the Housing Development (Control and Licensing) Act 1966 ("Act") to the Controller of Housing to grant an extension of time to a developer. Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 to the effect that the Controller was allowed to grant such EOTs (instead of the Minister) was struck down as ultra vires.
Since then, Ang Ming Lee has been applied retrospectively (i.e., takes effect and applies even before the decision made by the Federal Court). This means that housing developers (despite previously obtaining an EOT from the Controller) were exposed to delay damages/ LAD claims from purchasers.
Such exposed claims include those made against Prema Bonanza Sdn Bhd and Sri Damansara Sdn Bhd, whereby the developers were sued by purchasers/ homebuyers for delivering vacant possession after more than the statutorily prescribed 36 months, despite the Sales and Purchase Agreements (SPAs) having stipulated completion in between 42 and 54 months after obtaining an EOT.
The recent Federal Court decision in Obata-Ambak
On 26 July 2024, the Federal Court unanimously held that Ang Ming Lee is to be applied prospectively (i.e., takes effect only after the date of the decision) in the interests of justice. Specifically, the Federal Court held that homebuyers cannot rely on the Ang Ming Lee decision as a "carte blanche" to claim LAD retrospectively and to enjoy a financial windfall against developers who had complied with the provisions of the law at that time and had not acted in any way unconscionable to the interests of the purchaser.
Conclusion
The Federal Court's decision in the Obata-Ambak case has significant implications for housing development law. The Court's important clarification that the Ang Ming Lee decision applies prospectively prevents unjust enrichment and seeks to maintain a balance between the interests of both purchasers and developers.
We will be setting out a summary of the Federal Court's findings in a separate Alert.
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