Can ministry's controller grant extension of time to developer?

The debate on whether housing controllers at the Housing, Local Government and Urban Wellbeing Ministry have the power to give an extension of time (EOT) to a developer of a project will be decided by the Federal Court.

If an EOT is granted, the developer need not pay damages to the affected housebuyers for the delay in the completion of the project.

A three-member Federal Court bench led by Justice Balia Yusof Wahi has granted leave to pose three questions of law from housebuyers and two questions from a developer in its cross-appeal.

Justice Alizatul Khair Othman and Justice Rohana Yusof were the other judges who presided in this matter between 104 housebuyers, developer BHL Construction Sdn Bhd and the ministry.

The housebuyers were represented by lawyer Andy Wong, while George Varughese appeared for the developer and senior federal counsel Shamsul Bolhassan represented the ministry.

Leave (permission) to hear both appeals by the developer and the housebuyers was given after both parties did not object to the questions of law posed.

This case concerns public interest as according to a reply in Parliament, the then ministry under the BN government had approved 304 EOTs until April 2017. 

It was reported that the Court of Appeal, in a landmark judgment in March this year, ruled that the ministry must consult with housebuyers before issuing the EOT. 

This was said to be a test case initiated by the National Housebuyers Association.

The three questions of law from the housebuyers are:

• Whether the housing controller has the power to waive or modify any provision of the schedule H contract of the sales and purchase agreement, as prescribed by the minister under the Housing Development (Control and Licensing) Act 1966?
   
• Whether Section 24 of the Act confers power on the minister to make regulations for the purpose to delegate the power to waive or modify schedule H of the contract of sale to the housing controller?
   
• Whether regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989 is ultra vires of the 1966 Act?

Meanwhile, the developer's questions are:

• Whether the minister could delegate his duties (signing of the letter) of EOT to an officer in the ministry and whether the letter pursuant to regulation 12 must be signed personally by the minister?
   
• Whether the minister is obliged to afford the purchasers with a hearing prior to the minister granting the extension of time albeit there is no such provision or requirement under the act or the regulations.

The developer's questions appeared to be in regard to the unanimous landmark decision of the Court of Appeal.

This particular case captured a lot of attention following reports that a relative of then attorney-general Mohamed Apandi Ali sought the help of minister of housing in 2015, Abdul Rahman Dahlan, to secure an EOT.

A police report was also lodged against Rahman and Faridah Begum KA Abdul Kader, who is Apandi's wife, in Penang. 

National Housebuyers Association secretary-general Chang Kim Loong had in March said the granting of EOT without housebuyers' knowledge works to the detriment of housebuyers as they service the loan, but when the house is not complete, they face more costs of possibly starting a family, and not being able to move into the house.

He said a developer could apply for EOT to possibly avoid paying liquidated damages for late delivery, which house buyers are entitled to when a project is delayed. - Mkini