Federal Court clarifies monetary jurisdiction of the Homebuyer Claims Tribunal

In general, a homebuyer who wishes to file a claim with the Homebuyer Claims Tribunal (“the Tribunal”) can only do so if the award sought does not exceed RM50,000. This is prescribed by section 16M of the Housing Development (Control and Licensing) Act 1966 (“HDA 1966”). Further, section 16Q provides that the claim in the same matter cannot be split for the purpose of meeting the monetary threshold to fall under the jurisdiction of the HDA 1966 and the Tribunal.

In the case of Remeggious Krishnan v SKS Southern Sdn Bhd [2023] 4 CLJ 36, the Federal Court held that the Tribunal is allowed to hear split claims in respect of the same property. The monetary limit of RM50,000 applies for each claim and not a combination of the split claims.

Background facts

In this case, the purchaser bought an apartment unit (“Property”) in a residential project developed by SKS Southern Sdn Bhd. Under the sale and purchase agreement (“SPA”) entered into by both parties, the developer agreed to deliver vacant possession of the Property to the purchaser when the water and electricity supplies are ready for connection to the unit.  However, the Property was delivered with no electricity connection to the Property.

The purchaser filed two separate claims with the Tribunal against the developer:

1. a non-technical claim, grounded on the breach of manner of delivery of the Property with the claim amounting to RM49,832; and
2. a technical claim, grounded on the failure of the respondent to provide adequate ceiling height and protruding beams and pillars with the claim amounting to RM40,000.

The Tribunal only heard the non-technical claim and awarded a sum of RM16,452.05 and costs of RM400 in favour of the purchaser (“award”) for the delay in connection of electricity.

Aggrieved with the award, the developer applied for leave to apply for a judicial review against the Tribunal and the purchaser. In the application for judicial review, the developer sought to declare the impugned decision as invalid, null and void and of no effect and that an order of certiorari be issued to quash the award.

The High Court held that the split claims were for different matters and dismissed the application. The developer appealed to the Court of Appeal, which held that there is no prohibition against filing split claims, provided that the total amount is within the jurisdiction of the Tribunal. Dissatisfied, the purchaser obtained leave to file an appeal with the Federal Court.

Questions of law

Two issues on questions of law were raised:

1. in view of sections 16Q and 16M of the had 1966, whether there was a jurisdiction for the Tribunal to hear two separate claims in respect of the same subject property, where the total amount of dispute of these two claims exceeded the monetary jurisdiction of RM50,000; and
2. whether the developer could be exempted to pay damages to the purchaser when the developer was in breach of the manner of delivery of vacant possession of the property as prescribed in Schedule H of the HDA 1966 so long as the developer was still within the time frame to deliver vacant possession of the property.

Decision by the Federal Court

Question 1: Held in the affirmative.

• The purchaser may file split claims in respect of different and distinct matters. The words “same matter” in section 16Q of the HDA 1966 could only mean the same issue or type of claim and not the same property. There were two different matters in the present case i.e., one was for technical matter and the other was for non-technical matter. As such, section 16Q of the HDA 1966 was inoperative.
• The monetary jurisdiction of the Tribunal of RM50,000 in section 16M of the HDA 1966 only applies to “a claim” and not “all the claims”. Thus, as long as each of the purchaser’s claims in respect of different and distinct matters did not exceed the monetary jurisdiction of the Tribunal, the purchaser was not in violation of section 16M of the HDA 1966.

Question 2: Held in the negative.

• The time frame for delivery of vacant possession was separate from the manner of delivery of vacant possession.
• The purchaser was entitled to claim compensatory damages for breach of clause 27 of the SPA which provides “ready for connection”. This means that the electrical points should be fully functional and supply is available for tapping into the property. The developer breached the manner of the delivery of vacant possession of the property since there was no electrical supply ready for connection at the time.

The Federal Court was of the view that the HDA was enacted as a piece of social legislation to protect house buyers. With that in mind, any term or provision in the statute must be interpreted in a way which ensures maximum protection for the house buyers against the developer. It was therefore imperative that section 16M and section 16Q of the HDA 1966 be interpreted in such a way as to provide protection of house buyers in keeping with the intention of Parliament.

The objective is to protect the aggrieved purchasers of their rights to resort to the Tribunal, which provides for an easier, cheaper and quicker avenue for aggrieved purchasers to claim damages or compensation from the housing developers.

Commentary

Based on this latest Federal Court’s decision especially with regards to the monetary jurisdiction, it is clear that a house buyer can now lodge with the Homebuyer Claims Tribunal separate claims for different matters in respect of the same property, as long as each claim does not exceed the Tribunal’s jurisdiction of RM50,000.

If you have any questions or require any additional information, please contact Chuah Jo-Shua or the partner you usually deal with at Zaid Ibrahim & Co (in association with KPMG Law). This article was prepared with the assistance of Desmond Tang Soon Ze, a Trainee Associate at Zaid Ibrahim & Co (in association with KPMG Law).

This article is for general information only and is not a substitute for legal advice.

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