Issues
- Whether the date for calculation of liquidated agreed damages (‘LAD’) begins from the date of payment of the booking fee/deposit/initial fee or the date of the sale and purchase agreement.
- Whether computation of LAD for the completion of common facilities in a strata housing development should run from the date the certificate of completion and compliance (‘CCC’) was issued or from the date the certificate of practical completion (‘CPC’) was issued.
Judgment
- The period for delivery of vacant possession in respect of Scheduled Contracts under Regulation 11(1) of the Housing Development (Control and Licensing) Regulations 1989 (Regulation 1989) enacted pursuant to Section 24 of the Housing Development (Control and Licensing) Act 1966 (‘HDA 1966′), commences from the date for calculation of LAD begins from the date of payment of deposit/booking fee/initial fee/expression by the purchaser of his written intention to purchase and not from the date of the sale and purchase agreement literally.
- It is well-settled that HDA 1966 and its subsidiary legislation are social legislation that aimed to regulate the sale of houses and protect buyers. Therefore, the courts must give effect to the intention of Parliament and not the intention of parties. Otherwise, the attempt by the Legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory.
- Accordingly, the Federal Court refused to apply the literal rule to conclude that the date of calculation of the LAD runs from the date printed in the scheduled contract. Instead, the court decided construe the scheduled contract in accordance with the statutory protections afforded by the Parliament.
- The HDA 1966 and HDR 1989 expressly provide for an absolute prohibition against the collection of booking fees.
- Given that the intention of the Parliament is any payment collected must be in accordance with the terms of the statutory contract of sale, it follows that the developers have committed an illegal act in securing the contracts by collecting the booking fees.
- As such, the Federal Court ruled that since it was the developers’ attempt to secure an early bargain through the illegal collection of booking fees, then the protective veil cast by the Legislature over the purchasers should operate in a way so as to bind the developers to the booking fees. Thus, the developers will have to bear the full extent of the LAD payable by them to the purchasers consistent with the overall intent of the written law in respect of late delivery of vacant possession.
- The date of completion of common facilities under a statutory form contract is the date of issuance of the CCC.
- The purpose of CPC was issued by the Developer’s architect to the Developer’s main contractor to show proof that work undertaken by the main contractor in the building contract entered between the main contractor and the Developer, has been completed to the satisfaction of the Developer’s architect.
- The CCC was issued to certify that the Property, together with the common facilities, has been constructed and completed in conformity with the approved plans and requirements of the Street, Drainage and Building Act 1974 and its by-laws.
- Given that the sale and purchase agreements only refer to one type of certification, namely, the CCC, and the developer was only entitled to deliver vacant possession upon the issuance of the CCC, so the Federal Court ruled that the certification of an architect means CCC only.
