Land Law

Procedure to apply for OFS

• s254 ,255 - issue statutory notice under Form 16D or 16E

• s256(2) - registry title - Geran /HSD/PN - file OS supported by affidavit as per o83r3 stating the amount of outstanding loan sum

• s260 - land office title - Mukim/HSM/PM - file application for OFS by filing Form 16G and apply to Land Administrator for OFS

In what circumstances can an OFS to set aside?

• s256(3) - the person who applies to set aside the OFS has to prove that there is cause to contrary - the OFS is defective

Cause to contrary

[Low Lee Lian v Ban Hin Lee Bank] -

• chargor can bring the case under any exceptions of indefeasibility in s340

• chargee failed to fulfill condition precedent for the making of application of OFS

• chargor can show that granting the OFS would be contrary to some rule of law or equity

Error in instruments relating to land

• s380(1) NLC & s417 NLC - power of Registrar & court to rectify errors or omission made instrument relating to land

• adverse party would argue that the title is defeasible

• doesn’t render the instrument insufficient as stated in s340(2)(b) - the charge remains indefeasible - thus not a cause to contrary to set aside OFS

When can s380 be invoked to rectify errors?

• title registered in the wrong name or contains misdescription of land

• entry has been made in error

• entry contains error or omission

• [Malaysia Building Society v KCSB] - third party charge wrongly registered as first party charge

[Malaysia Building Society v KCSB]

• unlike [Island & Peninsular Development v Legal Adviser Kedah] which confined the error rectifiable under s380(1) to errors made by the Registry only

• extend to errors made by parties in the instrument of transfer presented for registration - provided no prejudice is caused to any party as a result of the error

• affirmed in [MBSB v KCSB Konsortium] - rectifiable by Registrar under s380(1)(b) to achieve what was intended by the parties

s417

• crt empowered to make a consequential order directing the Registrar to do such things necessary to give effect to any judgment made in proceedings relating to land

• to review the file relating to the land doc and cause rectification

• [Hassan v Jusoh] - crt ordered Registrar to correct a mere technical mistake - indefeasibility not affected

When there is a default by chargor

• Chargee must serve on the chargor a notice in Form 16D or Form 16E to specify the breach and warn that proceedings to obtain OFS will be taken if the default is not remedied a specific period of time

When to use 16D or 16E?

Conventional Loan

• 16D - breach of loan agreement - in the form - specify breach - require remedy within one month or any specific period not less than one month and warn proceedings of OFS to be taken if notice not complied with

Islamic Loan

• 16E - principal sum secured by charge payable by chargor on demand - demand by notice of this form - if sum in question not paid within one month from the date notice is served - may apply OFS

Wrong use of forms

[Jacob v OCBC] - wrong form will not invalidate the notice given to chargor under s254 or s256 - as long as sufficient notice has been given to the chargor before application of OFS

Note the difference between first party charge and third-party charge

• first party charge - the chargor and the borrower is the same person

• third party - third party who is not a borrower - provides a security to guarantee the debt of another party

Notice in Form 16D or 16E wrongly sent to borrower instead of chargor in a third party charge

• cause to contrary - s256(3) - [Low Lee Lian v Ban Hin Lee Bank] - failure to fulfill condition precedent in making an application for OFS

Requiring chargor to repay entire loan with interest in less than a month

• s254(1) - requires chargee to give chargor at least one month to remedy the breach - cause to contrary - c256 - failure to fulfill condition precedent

c/f

• [Citibank v Mohamad Khalid] - wording in s254(1) - ‘or such alternative period as may be specified in the charge’ - Parl intended to enable a chargee to impose a period of less than a month

c/f

• argue ‘or such alternative period as may be specified in the charge which shall not be less than one month’ clearly indicates one month as the minimum - can only prolong - not shorten

Service of OS filed to apply for OFS

o83r2(2) - must be served to chargor at least 4 clear days before hearing date

• anything less than that - defective service - in breach of o83 - [Kwan Chew Holdings v Kwong Yik]

Failure of bidder to pay the purchase price

• s257(1)(g) - successful bidder must settle the balance of the purchase price within 120 days from the date of sale and there shall be no extension

• [Ho Kean Pin v Malayan Banking] - no extension allowed even during MCO

c/f

• [Chi Liung v L&T Realty] - extension permitted if expressly stated in Condition of Sale

• if chargee agree to extend - can persuade court to extend the principle in Chi Liung to cover situations where chargee agrees to extension

• If balance not settled - the deposit shall be forfeited, and deposit should be channeled towards payment to the bank for outstanding loan sum as per s257(1)(h) read together with s267A

Is failure to take into account deposit sum forfeited under the first auction when claiming for outstanding loan sum in the second application for OFS a cause to contrary?

• [Multi-Purpose Bank v Mairnoon] - would amount to cause to contrary to set aside the second OFS

c/f

• [Alliance Bank v Kemas Perkasa] - not cause of contrary even if the calculation of the amount of outstanding loan is wrong - crt can grant order to amend the amount demanded to the correct amount

c/f

• [Kwan Chew Holdings v Kwong Yik]

• However - can rely on non-compliance to o83r3 ROC - render the affidavit in support of OS filed for the second application of OFS defective - requires the applicant to state amount remaining due under the charge as at the date of hearing of the OS - cause to contrary - failure to fulfill condition precedent - set aside the second application for OFS

Imposition of additional late payment interest on the facility when the agreement did not contain any clause to vary the interest rate

• [Multi-Purpose Bank v Mairnoon] - cannot simply vary interest rate without chargor’s consent - would amount to cause to contrary under s256(3)

• [Alliance Bank v Kemas Perkasa] - not cause of contrary if calculation of interest wrong - crt can grant order to amend the amount of interest to the correct amount

Application for OFS time barred under LA1953

[CIMB v Sivadevi]

• s21(1) LA53’ - ‘to enforce such mortgage or charge’ includes OS applying for OFS of land charged under s256

• only have 12 years to commence foreclosure proceedings to enforce the charge from the date the right to receive money accrued

• time limit only begins to run after time stipulated in Form 16D expires (usually one month)

Can the chargee use the first OFS to conduct a second auction - ie - not applying for a second OFS

[RHB v Dato Haji Muhammad]

• after OFS granted - auction of charged land not subjected to 12 years LP under s21 LA53

• Technically - the chargee can conduct as many as auction as it wants using the first OFS until the charged land is sold to a successful bidder

Challenge

• chargor can challenge the amount of outstanding loan sum wrongly stated in the OFS

  OR

• abuse of court process

Why apply for second OFS if can use OFS from first application?

• interest accumulates - claimable sum of interest becomes higher

Multiple unsuccessful attempts to auction a charged property

[RHB v Dato Haji Muhammad]

• auction of property not subjected to the LP under s21 LA53 - s21 only bars fresh action - land security can still be enforced even after OFS has been granted more than 12 years ago

• s259(2)© - clearly suggest that NLC allows for property to be auctioned over and over again until there is a successful bidder and the sale is concluded

Is the judicial sale of a charged property to a successful bidder subject to tenancy?

• s267(1)(a) - upon registration of the certificate of sale - the title or interest of the chargor shall vest in the purchaser - freed and discharged from all liability under the charge and any subsequent charges - even interest of registered lease or private caveat will be defeated

• s267(2) - no tenancy exempted from registration granted by chargor shall be binding on purchaser UNLESS

  • prior to the reg of the Certificate of Sale - tenancy is protected by an endorsement on the register document of title to the land

  • in this case - purchaser cannot evict the tenant until expiration of tenancy

  • [Hotel Ambassador v Seapower] - tenancy created before registration of charge should not bind the purchaser at the judicial sale until it becomes protected by endorsement…

Indefeasibility of title or interest upon registration

• s340(1) - the title or interest of any person as a proprietor of the land would be indefeasible upon registration of the same

Under what circumstances will the indefeasibility of title or interest be challenged despite registration?

• s340(2)-(4)

s340(2)(a) NLC

FRAUD

• title to the land defeasible on the ground of fraud

• [Tai Lee Finance v Official Assignee] - must be actual fraud - deliberate and dishonest attempt to deprive P of his prior interest - must be prior to or at the time of reg

• [Abu Bakar v Ismail] - does not matter if the principal was not a party or privy to the fraud

MISREP

• fraudulent representation on the actual purpose of the documents signed

• made a statement which created a misleading impression to induce an action

s340(2)(b) - forgery insufficient/ void instrument

FORGERY

• act which falsifies the signature and details of the registered owner

• instrument of transfer executed by forged identity - null and void

INSUFFICIENT/VOID INSTRUMENT

• instrument not in accordance with law

• Eg: execution of instrument effecting dealing not attested by a legitimate person - s211 NLC

• 2 titles issued for the same land [Tan Chiw Thoo v Tee]

• breach of restriction of interest (eg: registrar’s caveat) [UMBC v Syarikat Perumahan Luas]

s340(3)© - title acquired unlawfully by person in the exercise of authority conferred by written law

• [UMBC v Syarikat Perumahan Luas] - Registrar registered a charge without written consent from state authority

• [M&J Frozen Food v Siland] - judicial sale not conducted in compliance with NLC - certificate of sale - ultra vires

s340(4)(b)

• to deal with facts that did not fall squarely within other exceptions

• in cases where contractual or conscientious obligations - are undertaken by the registered proprietor at law or in equity

• [Abd Hamid v Aliyasak] - P transferred land to D in a SPA - D to transfer land back to P upon repayment - refused to transfer

  • Held: D undertook or is imposed with aa obligation to retransfer the land either at law or equity

When any transfer is effected from a person with a defeasible title or interest to another

the title or interest of that person would continue to be defeasible unless good faith can be proved

proviso to s340(3)

• where a subsequent purchaser is a bona fide purchaser for valuable consideration - the indefeasibility of his interest should not be affected

Who falls under the ambit of ‘any purchaser’?

• not clearly stated in statute

[Adorna Prop v Boonsam Boonyanit] - FC held that the wordings in the proviso conferred immediate indefeasibility in which even immediate purchaser can enjoy the protection of indefeasibility under the law

c/f

[Tan Ying Hong v Tan] - held that the principle of deferred indefeasibility applies in Msia - proviso shall be read together with the main provision s340(3) - any purchaser means subsequent purchaser

Who is a ‘subsequent purchaser’?

majority judgment in [CIMB v Ambank] - adopted in [See v UOB]

• if the document to transfer between the first and the second purchaser is genuine is not tainted by forgery - second purchaser can be a subsequent purchaser in this context - entitled to deferred indefeasibility

• look at the Form 14A, SPA etc…

• where did the second purchaser derive its interest in the land from?

minority judgement in [CIMB v Ambank] - adopted in [Kamarulzaman v Yakub]

• if the second purchaser is dealing directly with the fraudster - he will be an immediate purchaser - not entitled to indefeasibility

• A party would only be considered as a subsequent purchaser under proviso s340 when he acquired his title or interest from an immediate purchaser in good faith and with valuable consideration

• Summarily - both immediate purchaser and subsequent purchaser must be acting in good faith

Defining bona fide - who can be regarded as a purchaser acting on good faith?

• [T. Sivam v Public Bank] - not only acting honestly - but also to acted carefully - exercised due diligence before entering into the sale and purchase of the property

• ARGUE if there are any dishonest or fraudulent acts in the process - but counter argue with the acts’ relation to the issue of title or interest of the land

• [Wong Ing Tong v Yap and other appeals] - despite having knowledge of the dispute of ownership and potential fraud - Maybank treated the caveats entered upon as insignificant - had them removed - proceeded to grant loan to alleged fraudster and created charge

• Held - Maybank failed to do their due diligence to investigate into the allegation of fraud - not bona fide purchaser

• [CIMB v Ambank] - a chargee bank is considered a bona fide purchaser with valuable consideration - subsequent purchaser

What if the subsequent purchaser knew about the possibility of fraud before registering this property?

[Liptuan Simfoni v Pembangunan Orkid Desa] - subsequent purchaser must have acted in good faith before or at the time of registration

Chargor seeking to redeem property after an OFS had been made?

• s266 - has the right to redeem the property by tendering payment to Registrar of HC or Land Administrator any time before the sale is concluded

• [M&J Frozen Food v Siland] - sale concluded when -balance of purchase price settled by successful bidder

If chargee refuse to let chargor redeem

• can apply for declaratory order from court and serve it on the chargee to compel the chargee to accept the redemption

sell the property by way of private treaty

• bank would be interested to sell to the person who has the highest bid

• [Malaysia Credit Finance v Yap] - chargor cannot find a bidder who is willing to buy at a higher price than that offered by the present bidder - crt granted order for sale by private treaty

parties other than chargee seek to enter into a private treaty sale

[United Malayan Banking v Chong] read tgt with [M&J v Siland] - parties can enter into private treaty sale with the consent of the chargee at any time before the sale via auction is concluded

Safest way for bank to sell via private treaty

• to file OS and apply for a declaratory order from court confirming its consent to the sale by way of private treaty - once such order obtained - chargee need not worry about further challenge by the chargor

• [United Malayan Banking v Chong] - this application must be made BEFORE court grant an order for sale or the court would be functus officio to make a new order on the same property in question - affirmed in [Mui Bank v Cheah]

• Also held in obiter - even after OFS granted - until the sale is concluded - balance of purchase price fully paid - crt retains the right to discharge the charge by selling the property

If chargor did not or could not apply for declaratory order

• risk of the sale by private treaty being challenged by the chargor

• [Chartered Bank v Packiri] - sale by private treaty can only be conducted before proceedings of OFS commence

Bank seek to take legal action on a charged property only to discover that the charge is unregistered

1. lodge a private caveat - claiming for registrable interest -hence has caveatable interest under s323 NLC

   [Standard Chartered v Yap] - confirmed that equitable chargee can enter PC pending registration

2. try to register charge after discovery

   • If the charge documents were never accepted - not a case of rejection

   • just pay penalty for late registration - s293(1)(b) - then duly register then bank will become registered chargee - can apply for OFS -

   • If charge documents were stamped ‘Rejected’ by land office - need to call the chargor to resign the charge documents - unlikely

If charge cannot be registered cuz the charge documents are lost or defective - sign faded etc.

1) argue equitable charge - there is a valid charge - just not registered

• [Malayan Banking v Zahari] - NLC does not prohibit the creation of equitable charge - recognised in Malaysia

  c/f - must be cautioned - may not necessarily succeed - crts attitude on equitable charge has always differed

• [Oriental Bank v Chup Seng] - NLC clearly requires a charge to be registered before a chargee can enforce his right of foreclosure under NLC

2) pursue in personam claims

• breach of contract - sue chargor for failure to repay loan - s206(3)

• enforce proceedings of judgment debt by apply for writ of seizure and sale or winding up proceedings

3) sue solicitor for professional negligence in registration

• duty of care - fallen below standard of a reasonably competent legal practitioner as other A&S entrusted with the same task

Mortgage

Mortgage

• transfer of ownership of a property as security for a loan - mortgagor only have the right to redeem his property upon repayment of loan and the lender holds the right to foreclose on the property in case of default. This creates a lien on the property until the debt is satisfied.

Equitable mortgage

• a non-legal mortgage recognized by equity, which may not have the formalities of a legal mortgage. It arises when the mortgagor intends to create a security interest but fails to complete all requirements for a legal mortgage - purely contractual

Eg: Loan Agreement cum Assignment - mortgagor assigning right to the bank as a security for loan - usually before individual title is available

Constructive notice

[Vallipuram v Palaniappa]

• no caveat has been entered but constructive notice has been given by taking possession of the land or the issue document of title - prior claimant may maintain his priority over other unregistered interest who have not done so

There is a PO entered on the land the chargee seeks to register his interest in

• no worries - s338 - PO only valid for 6 months - extension for another 6 months only under exceptional circumstances - [Ban Hin Lee v Utama]'

• [Standard Chartered Bank v Yap] - PO cannot prevail over an equitable charge created in favor of chargee before the PO was enforced

When registration of interest has not been done - only signed all relevant documents

• not an issue under s340

• purely contractual - s206(3)

• a valid contract of sale can be terminated if the seller is willing to pay damages for breach of contract

Terminating contract on grounds of illegality

• s24(a) CA50

Can a foreigner buy property in Msia?

• s433B NLC - illegal without consent from State Authority

• condition precedent of the SPA - if not fulfilled - no valid contract - only conditional

• NOTE: if not registered yet, s433B hasn’t kicked in

Attestation of MOT in Commonwealth countries

• s211 NLC read tgt with Fifth Schedule to NLC

• need to be attested by a Malaysia’s High Commissioner or notary public in that Commonwealth country

Who can enter private caveat?

• s322 - by Registrar on the application of person claiming

• s323 - person with caveatable interest

  • title

  • registrable interest

  • right to title

Who has caveatable interest under s323?

• [Macon Engineers v Goh] - purchaser under a valid SPA - has right to title

• [Sing Lian v Soh] - ppl with option to purchase

• [Aik Meng v Chang] - director of a limited company - has a caveatable interest - to protect the company

• [J.Raju v Kwong Yik Bank] - claim for SP - cause of action based on an interest in land - has caveatable interest

Who have no caveatable interest?

• [EU Finance v Siland] - owner of the land - no caveatable interest unless for other interest other than title

• [Chia See Yin v Yeoh] - SPA terminated validly - no caveatable interest

• [Murugappa v Lee] - only deposit paid - ongoing discussions - mere pecuniary interest does not entitle the lodging of a PC

• [Natsafe v Loi] - shareholder isn’t entitled to lodge caveat

• [Luggage Distribution v Tan] - tenancy exempt from reg not entitled to protection under private caveat

  NOTE: if tenancy more than 3 years - becomes lease under s221(2) NLC - registrable interest

• [E.M. Burton v Packaging Specialist] - person with mere monetary interest to the land - not proprietary - eg: to secure refund of deposit - no caveatable interest - is an in personam claim for unsecured debt

whether there is a valid SPA

• [Charles Grenier v Lau] - salient terms agreed between parties relate to the essential terms in the agreement = has valid SPA even though not yet executed

• [Low Kar Yit v Mohd Isa] - if salient terms agreed not essential terms of contract - no valid SPA - only conditional agreement subject to execution of formal SPA

Procedure to apply for entry of PC

• administrative in nature

• s323(2) - filed application in Form 19B

• s323(3) - pay the prescribed fee

• Registrar will enter PC - no power to reject if all formalities have been complied with - [Ong v Valliappa]

• s324(3) - Registrar will then serve notice to the proprietor or persons with registrable interest in Form 19A

Who can apply for removal of Private Caveat

• s325 - by caveator himself by notice in Form 19G with fee

• s326 - by registered proprietor - any person whose land or interest is bound by the PC by notice in Form 19H with fee - Registrar will then serve a notice in Form 19C on caveator - PC will be removed after 2 months

• s327 - by court upon application of any aggrieved person

If caveator seek to challenge removal of caveat

• have to apply to HC to extend duration of PC

• need to fulfill requirements under [Kumpulan Sua v Dataran Segar]

After applicant has shown that he is aggrieved person

• burden shift to caveator to show why PC should remain

  [Kumpulan Sua v Dataran Segar]

  • need to show he has caveatable interest

  • his claim raises serious Q to be tried

  • the caveat ought to remain until trial on the balance of convenience

Second or further caveats

• [Damodaran] - lodgment of second or further caveats - especially if it is on the same grounds - not allowed

• s326 - allows extension of caveat by order of court - does not allow issuance of another caveat before or on the expiry of the current caveat

• s328 - PC lapse after 6 years - long enough for a caveat to exist at any one time to protect the interest or title of the caveator without the need for a second caveat

• once it has lapsed - the extinction is final and irrevocable - crt has no power to revive, renew or continue a caveat after its lapse

• not the intention of Parl to have overlapping caveats on the same land, on the same grounds and by the same caveator

Exception to Damodaran

• s329(2) - may be construed as enabling another caveat to be entered on the same land - CONJUNCTIVELY - speaks of an entirely different and separate caveat

  • [Damodaran] on new and fresh grounds AND after former cavea t ceased to exist - lapsed

  • [Hiap Yiak v Gim Hin] - when first caveat is voluntarily removed by the caveator

  • [Lourdenadin] - first caveat removed invalidly - eg: didn’t receive notive of 1st removal

  • [Thevathason v Kwong Joon] - where first caveat has lapsed

Registrar’s caveat

• s319 - Registrar has discretion to enter RC

• s319(2) - RCs supersede all PC

• [Tan Soo Bing v Tan] - anyone who desires for an RC to be entered must apply to the Registrar - if refused - can appeal to the court against the refusal

• s321 - RC continue to be in force until cancelled

Procedure to enter RC

• s321 - Registrar will serve notice in Form 19A on the proprietor or person with registered interest after RC is entered in Form 19F

Under what circumstances can a RC be entered into?

s320 NLC -

1) to prevent fraud or improper dealing

2) to protect the interest of Gov

[Registrar of Titles, Johore v Temenggong Securities] - recovery of tax does not come within the meaning of interest under s320(1) - personam claim of unsecured civil debt - gives no rise to legal right over any property

c/f

s320(ba) added to the Act to state that RC can be entered where there is debt owing to the Gov

[MBF Finance v Pendaftar Hakmilik Negeri Perak] - debt owed more than market value of the land - IRB must show that there is serious Q to be tried to prevent removal or to enter RC -

• Reg in entering the RC shall consider - if not ultra vires)

  • the market value of the land

  • amount of debt owed

  • interest of chargee, if any

3) to correct errors made in title or other instrument

Ways to remove RC

• s321(3)

  • by Registrar’s own motion

  • by proprietor

  • by court

Application by proprietor to remove RC

[Public Bank v Pengarah Tanah & Galian JB]

• 321(3)(b) - appeal against RC’s decision of entering RC under s418 within 3 months from the date the decision is communicated to him (notice in 19A)

If application to remove has been made but rejected

• can rely on second limb of s321(3)© to appeal to HC against the refusal of Registrar to remove the RC under s321(3)(b)

When will a person be seen as holding a property on bare trust for another?

• English law not applicable to Malaysia - s6 CLA56’ - matters related to conveyande, succession, tenure of immovable property

• s3 CLA56’ - can apply English equitable principles when there is a lacuna in the local law

[Borneo Housing v Time Engineering] - must have a valid SPA + duly executed and valid MOT + full purchase price paid

If no valid SPA but paid purchase price in full

• [Ng v Chiah Ah Foo] - by paying the purchase price in full - the purchaser has become the beneficial owner

Is MOT a mandatory requirement?

• [He-con v Bulyah] - as long as there is any document which effectively divest the right under the property - eg: Power of Attorney

Housing Development (Control & Licensing) Act 1966

Purpose - [SEA Housing Corp v Lee] - Parl finds it necessary to regulate the sale of houses and protect buyers from rich and powerful developers

• only applies to ‘housing development’ within s3 HDA

  • developer constructing more than 4 units of housing accommodation

  • new houses to be built

  • West Malaysia

  • residential buildings - partially or wholly

• ‘housing developer’ under s3 includes any person, body of persons, company, firm or society who engages in or carries out or undertakes a housing development

Housing Development (Control & Licensing) Regulations 1989

standardized SPA in - HDR

• Schedule G - landed property

• Schedule H - high rise or landed with strata title

contracting out of Schedules

[Lee v Sea Housing Corp] - cannot deviate from the terms in the standardized SPA unless the terms provided are better - in favor of the purchaser

• confirmed in [Sentul Raya v Hariram] - no freedom to contract out of the standard terms

Collateral contract

[Encony Development v Robert] - there cannot be any collateral contract that deviates from the term of the standard contract

[Loh Tina v Kemuning] - even if purchasers signed the supplementary SPA - can still enforce their rights as if the SPA had been signed without amendments in its prescribed form under Schedule G or H - can hold the developer to the original terms

wrong schedule used

[Audrey Gertrude v Sunway] - SPA remains valid

Is developer allowed to impose administrative charges?

• s22D HDA1966 - developer can only charge max RM50 if the purchaser wishes to assign his right to a new purchaser

If HDA x apply - commercial property

• [KAB Corp v Master Platform] - developer’s imposition of a flat rate of 1% for administration fee is arbitrary and unreasonable - a nominal sum of RM500 is fair and reasonable

Is consent needed from developer to assign rights in property to another person before issuance of strata title?

s22D HDA66’ - assignor can make absolute assignment of the proprietary right or interest in the housing property to the assignee - no consent required for residential property

• only need to give notice of assignment to developer after completion of SPA btw assignor and assignee

• developers shall keep an updated and accurate register of all purchasers

If HDA x apply - commercial property

• s4 CLA56’ - any assignment of debts or other legal chose in action can be effected in law by merely giving express notice to the Developer - no need to obtain consent

extension of time to deliver VP

• [Ang Ming Lee v BHL] - Controller has no power to grant extension - confirmed in [Blue Dream City] - only Minister has the power

When the developer failed to deliver VP within the stipulated time

homebuyers can bring an action for liquidated damages

1. apply to court for SP and claim liquidated ascertained damages under s74 CA50

   [Sea Housing v Lee] - balance of purchase price can be set off with damages of late delivery

   • calculation of damages - (number of delayed days x price stated in SPA x 10%) divided by 365 days

   • [PJD Regency v Tribunal] - the period of delivery of VP shall commence from the date of the booking and not from the date of the SPA

2. terminate and claim LAD

   • only if there is a total failure of consideration - [LSSC Development]

   • time is of essence - voidable at the purchaser’s option as per s56 CA40 or restitution as per s65 & 66 CA40’

wrongful termination by developer

• breach of contract under s40 CA50’

  [Berjaya Times v M Concept]

• damages can be claimed under s74 even though a LAD clause is included in the SPA

Can developers collect booking fees?

• Amendment to HDR - s11(2) - no parties including parties acting as stakeholders shall collect payments whatsoever except as prescribed by the contract of sale

• as accentuated by former FCJ Tengku Maimun in [PJD Regency v Tribunal]

Contravening provisions in HDR

Reg 13 - is liable to conviction of a fine not exceeding 20k or a term of imprisonment not more than 5 years or both

Contravening duties imposed in s7,8,11,12 of HDA

s19 HDA66’ - guilty of offence and liable to conviction of a fine of >50k <250k or imprisonment not more than 3 years or both and a further fine of >500 everyday if the offence is continued after conviction

Unilateral termination

• s8 HDA66’ - purchasers can unilaterally terminate the SPA as of right if:

  • dev refuses to carry out or delay work for a continuous period of 6 months or more after SPA signed

  • obtained written consent from financier

  • issue in 1) certified by Controller

• Dev should process refund within 30 days of such termination