PUTRAJAYA: The calculation for late delivery payment to house buyers begins from the date the booking fee is paid, and not when the sale and purchase agreement (SPA) is signed, the Federal Court ruled today.
Chief Justice Tengku Maimun Tuan Mat said the Housing Development (Control & Licensing) 1966 and its subsidiary laws were social legislation and that was a settled law.
In a dispute brought before the court, the developers contended that the scheduled contracts must be read literally and in accordance with the intention of parties.
“It is our view that the submission is untenable. When it comes to interpreting social legislation, the courts must give effect to the intention of Parliament and not the intention of parties,” Tengku Maimun said.
“Otherwise, the attempt by the legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory,” she said in the judgment to allow seven appeals by purchasers.
The purchasers, from Melaka and Kuala Lumpur, had hauled the developers – PJD Regency Sdn Bhd, GJH Avenue Sdn Bhd and Sri Damansara Sdn Bhd – before the housing tribunal over the payment of the liquidated ascertained damages.
Tengku Maimun said the courts would not countenance the bypassing of statutory safeguards meant to protect the purchasers.
“While the developers might think that it is a standard commercial practice to accept booking fees, the development of the law clearly suggests to the contrary,” she said adding that the courts would not condone such a practice until the law said otherwise.
The court said the LAD payable by housing developers to purchasers for late delivery of vacant possession in a housing project begins when the booking fee is collected and not when the SPA is signed between the developer and purchaser.
Other judges in the five-member bench were Nallini Pathmanathan, Abdul Rahman Sebli, Zabariah Yusof and Mary Lim Thiam Suan.