Lim Sze On & ors v Syarikat Gunung Sejahtera


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definition of housing developer based on case review.

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Lim Sze On & ors v Syarikat Gunung Sejahtera

  2. 2. FActs•This is an appeal case by the appellants against the decision of the Court of Appealwhich is basically allowed the respondents appeal against the decision of the HighCourt.•In this case the defendant advertised in newspaper, flyers, brochures andadvertisements boards itself as a housing developer of the project of Desa SriAmpang Ipoh.•The plaintiffs in this case were the purchasers of the house lots built by thedefendant which is consisted of 168 residential housings.•There are two agreements has been entered by the plaintiff with the defendant.According to the first agreement, was signed on 1996, the plaintiff agreed to pay thecosts of the development works carried out by the defendant.•Subsequently a second agreement was entered by both parties in 1997, where theagreement stipulated that the plaintiffs as purchasers were termed as employer anddefendant as contractor..
  3. 3. FActs•Other than that the defendant also agreed to complete the building of the houseswithin two years form the second agreement was entered into by parties.•According to clause 13 of the agreement, any delay or failure to complete, and handover the possession of the building within the stipulated duration, the defendantneed only pay damages to plaintiff of RM 50 per month from the actual date of thedelivery of the vacant possession of such building.•Since, the defendant failed to complete and handing over the vacant possession ofthe houses to the purchaser within stipulated period as was agreed.•However plaintiff was not satisfied with clause 13 of the second agreement andbrought claim under schedule G of the Regulation.
  4. 4. IssUEs
  5. 5. PLAINtIFF’s ArgUmENt’s•Learned counsel for theplaintiff had submitted •The defendant is thus bound by the provision ofthat, the defendant is the act and could notstopped from denying that contract out of it.they are actually thedeveloper to the said •It also has been argued thatproject. it is immaterial whether or not the plaintiff owns the•He further contended land on which the housesthat, since the project are construed so long asconsisted of building more more than four units of houses are erected on anythan four houses, then by land, and the person ordefinition under section 3 company who is paid to doof the act, defendant can so is defined as a housingonly be termed as a developer.developer.
  6. 6. City Investment Sdn Bhd V Koperasi Serbaguna Cuepacs Tanggunggan Bhd •Appellant was the registered owner of the land entered into two separate contracts with respondent for sale of small portions of land to be developed by the first contract. •Appellant agreed to sell to respondent 60 building in cash for price of $5000 for each lot and to clear and level the lots for a development price $420,000. •A also agreed to nominate a license housing developer to build the terrace house as was agreed in first agreement 4 the construction price of $840,000. •Appellant later nominated themselves as a licensed housing developer for first contract and submit draft building contract which was rejected by respondent as it did not contract to the provision of the rule and act there under.
  7. 7. City Investment Sdn Bhd V Koperasi Serbaguna Cuepacs Tanggunggan Bhd•Learned trial judge held that, a first contract was a sale of land withhouses therefore caught by the act and the rules. Appellant appeal tofederal court and Privy Council but appeal was dismissed•It was held that first contract by appellant’s own nomination ofthemselves as housing developer, appellant become engage in thebusiness of housing development by agreeing to construct more thanfour units of housing accommodation in one development with a viewof selling housing accommodation thus constructed.•Also held that appellant were and remained as the proprietor of the ofland until they transfer the building lots and that order the firstcontract and nominator, appellant become the housing developerunder a contract to construct and sell sixty terraces houses torespondent for construction price
  8. 8. DEFENDANt’s ArgUmENts •It was further submitted that neither the first•The Act does not apply agreement nor theto the defendant as it was second agreementnot a housing developer mentioned about a salewithin the contemplation of land.of the Act. •Defendant also•The defendant was only contended that aa contractor and it is the developer’s license wasplaintiffs who are the not required for thisregistered owners of the project since thebuilding lots. development concept was different.
  9. 9. DEFENDANt’s ArgUmENts •In relation to this he pointed out that the form prescribed in•facts of this case showed the Schedule G of the Regulationssaid scheme was a contemplates a contract of sale"Perkampungan Tersususun and purchase "of a housingScheme" and there was never accommodation together withany sale of the said land or the the sub divisional portion ofbuilding lots. land ".•Instead, it was an alienation of •Further the proprietor/vendorland by the State government, must be the registered andthe land in question being State beneficial owner of land heldland. under an identified title. •In the instant case the defendant was neither the landowner nor the vendor of the said land.
  10. 10. JUDgmENt•The Act and Regulations cannot be applied to the facts andcircumstances of this case.•This is because the facts showed that it was the plaintiff whoapplied for the building lots from the Land Office.•It should be noted that the document of titles relating to thebuilding lots were issued to the plaintiff which means that, theplaintiff consequently become the registered owner of thebuilding lots.•Therefore, the defendant was clearly not theproprietor/vendor of the building lots.
  11. 11. JUDgmENt•There is nothing to show that the defendant was a ‘licensed housingdeveloper’ within the meaning of s 3.•The court of appeal also stated that the court is not empowered togrant such a declaration as sought by the plaintiff. Pursuant to s. 3 ofthe Act a "housing developer" means "any ... company ... whichengages in or carried on or undertakes or causes to be undertaken ahousing development".•Section 3 of the Act also provides that a "licensed housing developer"means "any housing developer licensed under s. 5 to engage in or carryon or undertake a housing development and includes the holder of anypower of attorney of such housing developer duly created under thePowers of Attorney Act 1949".
  12. 12. JUDgmENt•A housing developer’s licence can only be granted by Controller ofHousing and the court is not empowered to grant such a declaration.•Section 6 of the Act lay down the conditions or restrictions for the grantof such a licence. These conditions must be fulfilled before such a licencecan be issued.•To grant such a declaration would be tantamount to the court usurpingthe powers of the Controller of Housing under the Act.•If at all the defendant breached provisions in carrying housingdevelopment as a housing developer, then the defendant would becommitting an offence under s 18.•In this case there is nothing to show that defendant has committed suchan offence.
  13. 13. JUDgmENt•The form prescribed in Schedule G of the Regulations specifically refers to a sale andpurchase agreement in relation to land and building.•The first, second and seventh paragraphs to the preamble in the form prescribed inSchedule G of the Regulations denotes the following:e)the proprietor/vendor is the registered and beneficial owner of the land (held under anidentified title) and has granted the vendor the absolute right to develop the land as ahousing development and to sell the said land;f) the proprietor agrees to the sale of the land for the purposes of this agreement;g) the vendor is developing the said land as a housing development known as ... (phase no.,advertisement and sale permit no.);h) the vendor has agreed to sell and the purchaser has agreed to purchase the said landtogether with a house to be erected thereon.•The 1st and 2nd agreements clearly cannot fit under the Act and the Regulations. Thedefendant never sold any land in the form of a building lot to any of the plaintiffs.•These building lots were formerly State land and upon application were alienated to therespective plaintiffs.
  14. 14. JUDgmENt•The defendant held itself out as ‘housing developer’ through advertisements has no bearingupon the declaration sought. As a general rule, an advertisement is considered by courts tobe not an offer but a mere invitation to treat i.e. an offer to make an offer.•Under the second agreement, the plaintiff are the landowner which being in that position,makes the second agreement, even if read together with first agreement be replaced by thestatutory agreement under the Schedule G of the Regulation.•The said two agreements make it clear that the development concept of the project wasdifferent from that undertaken by a licensed housing developer under the Act.•The fact in this appeal case also proves that there were no sale and purchase agreementsfor the sale of building lots.•The defendant can neither be treated as vendor nor registered owner of the building lots.SLSB also cannot be treated as vendor or registered owner of the said land prior toassignment of the development works to the defendant.•Thus, the Act and Regulations are clearly not applicable under this appeal case.
  15. 15. commENts & oPINIoNs First Issue•In our opinion we thinks that thedecision which was made by the Court ofAppeal and also the Federal Court judgein delivering the principles and rules •According to section 5 of therelated to instant case is acceptable. act a licensed housing developer is a person who•Regarding to the first issue, it can be engage or carry housingclarified that, there is no any evidence to development and also ashow that the defendant was a Housing holder of power of attorneydeveloper because, in this case, it can be of such housing developerclearly seen that the defendant was not alicensed housing developer since he wasnot obtained the licensed legally underthe act.
  16. 16. commENts & oPINIoNs•A proper license from the controller of housing was required for aperson to declare himself as a licensed housing developer asprovided in the act.•Self declaration made by himself would not amount to give him thepower as a developer or fall within the meaning of housingdeveloper.Advertised in newspapers is merely an invitation to treat and will notbe considered as an offer. This was strongly support by the decisionwhich was made by Gopal Sri Ram JCA in Eckhardt Marine GMBH VSheriff, High Court of Malaya, Seremban & Ors.•Thus the plaintiff application to declare the defendant as a housingdeveloper is inconsistent with the rules of the act.•Defendant was not fall under the meaning of housing developersince he was not fulfilled the basic requirement of the act.
  17. 17. commENts & oPINIoNs Second Issue•Regarding to the second issue, theterms of agreement cannot besimply replaced with the schedule G •Vendor shall be liable to payof the regulation. to the purchaser liquidated damages calculated from the•in this case, the agreement clearly day to day of the rate of 10%expressed that delay in handling per annum of the purchaseover the vacant possession of price from the expiry date ofbuilding, the defendant had to pay delivery of vacant possessionplaintiff RM 50 per month. until the date the purchaser takes the vacant possession•But now, the plaintiffs claim was of the said building.not based on the clause 13 of theagreement but based on schedule Gof the regulation
  18. 18. commENts & oPINIoNs•Thus based on this provision, plaintiff want to claim more damages than asagreed in the agreement.•Since both of the agreement which was entered by parties were not a saleand purchase agreement of land and building, and clearly the concept of theproject was different from that undertaken by a licensed housing developerunder the act, then the act and regulation were clearly not applicable underthe circumstances of appeal.
  19. 19. SEA Housing Corporation Sdn Bhd v Lee Poh ChooMK Retnam Holdings Sdn Bhd v Bhagat Singh•The provisions of the Acts and the Rules were only applicable tothe parties when they entered into the sale and purchaseagreement.•In both cases, there was a sale and purchase agreement of landand building and the vendor was the owner of the land as well asa licensed housing developer within the contemplation of the Actas opposed to the instant case wherein the defendant was neitherthe owner of the building lots nor a licensed housing developer.•Further, the first agreement and the second agreements werenot sale and purchase agreements of land and building .