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Tribunal challenge withdrawn

NST-PROP 09/10/2004 By G. Umakanthan

A messy legal nightmare has come to an end for 42 buyers of apartments in Jinjang Utara, Kuala Lumpur, with developer Fadason Holdings Sdn Bhd, which took them to court as party in a dispute over late delivery claims awarded by the Tribunal for Homebuyer Claims dropping its case.

Fadason had applied for a judicial review of the Tribunal's award of sums ranging from RM1,000 to RM4,000, handed to apartment buyers in the middle of last year.

This action came after the company, on June 14 this year, lost an attempt to get the Federal Court to rule that the Tribunal had no right to hear disputes arising from Sale and Purchase Agreements (SPAs) signed before it came into being on Dec 1, 2002.

The 42 house buyers, who were represented by a team of lawyers acting pro bono, had been quite rattled by the whole process, considering that after spending much money getting their own residential units, they still had to go through a legal muddle to protect their rights.

However, all went well in the end. Fadason, through its lawyers, withdrew its application for judicial review of the Tribunal awards before Judicial Commissioner Wan Afrah Wan Ibrahim when the matter came up in the High Court at Kuala Lumpur on Sept 29.

It had earlier asked the High Court to declare that:

  • There was an error in the calculation of the liquidated ascertained damages because the Tribunal worked out compensation for late delivery from the date the buyers paid the deposits, not from the date on which the SPAs were signed; and
  • The buyers did not have locus standi to initiate action against Fadason, the reason being their properties had been mortgaged to the banks that provided loans for the purchase and they did not have the consent of their bankers for the action.

Welcoming Fadason's move to drop its action, National House Buyers Association secretary-general Chang Kim Loong said it was a triumph for buyers and a move in the "correct direction for orderliness in the housing industry".

He called on the Ministry of Housing and Local Government to "expeditiously prosecute" developers that continue to defy awards handed down by the Tribunal.

Chang added: "Developers that disobey the Tribunal or refuse to comply with its awards are deliberately frustrating successful claimants, and they can be punished under Section 16A(d) of the Housing Development (Control & Licensing) Act 1966.

"Under this section, those that fail to comply with an award made by the Tribunal within the period given are committing an offence. On conviction, they face a fine of up to RM5,000 or a jail term of two years or both."

The establishment of the Tribunal,  he added, had injected much hope in the house buying public. There being no further question as to the powers or jurisdiction of the Tribunal, protection for house buyers now rests heavily on how seriously legislation related to the housing industry are enforced.

Chang also called on house buyers who have been successful in their claims before the Tribunal, but have not had these settled by the developers concerned, to raise their cases with the Monitoring and Enforcement Division of the Housing and Local Government Ministry.


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