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Late delivery of property: Country Garden Danga Bay loses appeal

PUTRAJAYA (July 7): The Court of Appeal in a unanimous decision yesterday, dismissed the appeal by Johor-based developer Country Garden Danga Bay Sdn Bhd (CGDB) for a judicial review over the High Court and Tribunal of Homebuyers Claims’ decision to award damages for late delivery claims to seven homebuyers of a service apartment.

In a written reply to EdgeProp.my, the decision on July 6 was confirmed by counsel Viola Lettice DeCruz and one of the affected homebuyers, Justin Leong. DeCruz, who appeared with Chua Yi Xie, who represented six out of the seven homebuyers.

CGDB was represented by senior counsel Datuk Seri Gopal Sri Ram, James Patrick Monteiro and Yasmeen Soh Sha-Nisse.

The appellate court’s decision was made by a three-member bench led by Datuk Yaacob Md Sam, upholding the Kuala Lumpur High Court’s decision made on July 17, 2019. The two other judges are Datuk M Gunalan and Datuk Ghazali Cha.

This also supports the tribunal’s decision to award the damages after CGDB had failed to complete the properties within 48 months from the day the buyers paid the deposits.

What happened?

On Dec 4, 2018, the tribunal had previously awarded the property owners between RM13,834.78 and RM32,682.26 in damages for the late delivery of their parcels in the property.

The owners had paid deposits for the property between May 17, 2013 and Oct 5, 2013. The sales and purchase agreements (SPAs) were signed on Dec 30, 2013.

The developer was under contract to complete the properties within 48 months.

However, the owners obtained vacant possession of the properties between Sept 25, 2017 and March 11, 2019, hence leading to them claiming liquidated ascertained damages (LAD).

The award resulted in the judicial review application filed at the High Court by CGDB to challenge the tribunal's findings.

The developer sought to quash tribunal award, arguing that vacant possession begins from SPA date.

In the judicial review, CGDB sought to quash the award by the tribunal as well as a declaration that vacant possession begins from the date of the SPA.

Additionally, the developer noted that the LAD should be calculated based on the date the SPA was signed and not from the booking date or the payment of deposit date.

According to DeCruz, this issue (LAD should be calculated from the date of the booking fees’ payment) was already addressed by the Federal Court recently in PJD REGENCY SDN BHD v. TRIBUNAL TUNTUTAN PEMBELI RUMAH & ANOR AND OTHER APPEALS.

“The appellants (CGDB) canvassed the remaining issue, that is, whether the Tribunal had the jurisdiction to hear the Respondent’s claims for LAD under Section 16N(2) of the Housing Development (Control & Licensing) Act 1966 (HDA).

“Their argument was that claims for damages for late delivery should be filed within the time frame set out in Section 16N(2) (a) only that is not exceeding 12 months from the issuance of the CCC,” Decruz said.

Meanwhile, the Respondents contended that such a claim can be brought within the period stipulated under Section 16N(2) (a) or (b). “The High Court judge was right in his decision,” added DeCruz.

Section 16N(2) of the HDA stipulates that the jurisdiction of the Tribunal shall be limited to a claim that is based on a cause of action arising from the sale and purchase agreement entered into between the homebuyer and the licensed housing developer which is brought by a homebuyer not later than 12 months from:

(a) the date of issuance of the certificate of completion and compliance for the housing accommodation or the common facilities of the housing accommodation intended for subdivision, whichever is the later;

(b) the expiry date of the defects liability period as set out in the sale and purchase agreement.

The decision

The Court of Appeal, on July 6, ruled that there was no misdirection by High Court judge Datuk Nordin Hassan in dismissing the judicial review.

Having relied on the Federal Court case of CORPORATION SDN BHD lwn. TRIBUNAL TUNTUTAN PEMBELI RUMAH, where the Court of Appeal found that the Tribunal had the jurisdiction to hear the LAD claims filed within the time frame set out under Section 16N(2) (a) or (b) of the HAD.

Hence, the appeal was dismissed and CGDB had also been ordered to pay RM7,000 costs each to the property owners.

Meanwhile, one of the affected homebuyers Justin Leong who purchased a service apartment from CGDB in 2013 urged other buyers to thoroughly check a developer's background before deciding.

He and other homebuyers had lodged a complaint to the Tribunal in 2018 after the handover of the units in 2017.

Meanwhile, in a separate statement, CGDB said it respected the interests of the house owners and will continue to provide better services to the residents as well as surrounding communities.

“CGDB respects the decision by the Court of Appeal, and is currently discussing with legal experts and will reserve our right to seek leave to appeal to the Federal Court,” it added.

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