Housebuyers' rights endorsed

15/06/2004 The Star By Chelsea LY. Ng

Putrajaya: The Federal Curt handed down yesterday a landmark judgment endorsing the rights of owners of housing units bought before December 2002 to file claims with the Homebuyers Claims Tribunal.

Chief Justice Ahmad Fairuz Sheikh Abdul Halim ruled that the tribunal had jurisdiction to hear disputes relating to houses bought before Dec 1, 2002, the day the amendment to the Housing Development (Control and Licensing) Act 1966 came into effect.

The amendment was made to establish a tribunal to speedily solve claims of RM25,000 and below.

Ahmad Fairuz, who sat with Federal Court judge Justice P.S. Gill and Court of Appeal judge Justice S. Augustine Paul, also decided unanimously that the punishment set out in Section 16AD of the Act had no relevance to the tribunal's jurisdiction issue.

(The appellant, Westcourt Corporation Sdn Bhd, had claimed that allowing the punishment to cover cases of houses bought before December 2002 was tantamount to allowing criminal law to operate retrospectively against the developer and was ultra vires Article 7 of the Federal Constitution)

“Section 16AD does not violate Article 7 (1) of the Federal Constitution. It is a valid law,” said the Chief Justice.

“We therefore dismiss the appeal. We will provide reasons in full in the grounds of our judgment later,” he said.

The court had earlier heard arguments by Attorney-General Tan Sri Abdul Gani Patail, who represented the tribunal, and counsel Lambert Rasaratnam, who acted for the developer.

Gani submitted that the Act was a piece of social legislation enacted to protect housebuyers from unscrupulous developers.

“These purchasers need protection, whether the sites are sold before, contemporaneously with and after completion of the houses,” he said.

The criminal-natured punishment set out in Section 16AD, he argued, had no nexus with the breach of the sale and purchase agreement.

“The offence punishable by Section 16AD is not the breach of contract but non-compliance of an award handed down by the tribunal.

“By no way can we stretch our imagination to the extent of connecting the breach of S&P to the penalty for non-compliance of the award,” he said.

Gani was replying to Rasaratnam’s contention that criminal law had been allowed to operate on the developer retrospectively when the tribunal awarded a housebuyer compensation for a unit bought before December 2002.

Rasaratnam argued that the punishment section ought to be applied prospectively.

Under Section 16AD, an offender who does not comply with an award could be fined up to RM5,000 or jailed up to two years, or both.

In the case of a continuing offence, the offender could be imposed an additional fine of up to RM1,000 per day after the conviction.

The case began in the tribunal with about 50 housebuyers claiming against several developers, including Westcourt Corporation.

The tribunal had ruled in favour of the housebuyers but the developers took their case for a judicial review at the High Court.

The High Court then declared that the tribunal did not have the jurisdiction to hear claims on properties purchased before the amendment of the Act.

The housebuyers appealed and on Dec 18, the Court of Appeal set aside the High Court judgment and ruled for the buyers.
 

Westcourt Corporation then filed its application for leave to appeal and at the end of last month, it obtained leave from yesterday’s panel to appeal.