Federal Court Allows Split Claims for Same Property Under Homebuyer’s Tribunal

Datuk Chang Kim Loong is the Honorary Secretary-General of the National House Buyers Association

Recently, the Federal Court in the case of Remeggious Krishnan v. SKS Southern Sdn Bhd (previously known as MB Builders Sdn Bhd) Civil Appeal no. 02(f)-50-09/2021(J) has confirmed that homebuyers can bring separate claims involving the same property in order to stay within the RM50,000 jurisdictional limit of the Tribunal for Home Buyers Claims (TTPR) and that the RM50,000 limit does not have to be for all the claims in respect of the same property combined.  

To understand this, we must first know exactly what is the scope and jurisdiction of the Home Buyers Claims Tribunal.

Jurisdiction

The Tribunal for Home Buyers Claims, more commonly termed the ‘Homebuyer’s Tribunal’ or ‘Housing Tribunal’ was established in 2002 via an amendment to the Housing Development (Control and Licensing) Act 1966 (hereinafter referred to as “the HDA”). Its purpose was to provide an affordable and expedient route for homebuyers to bring claims against a licensed developer for matters arising from the Sale and Purchase Agreement

A claim can be brought by anyone who has purchased a housing accommodation developed by a housing developer, even if the homebuyer happens to be a subsequent purchaser. It is also important to note that a claim can only be brought to the Homebuyer’s Tribunal if that cause of action arose from the Sale and Purchase Agreement itself and within the specific time frame laid down in Section 16N(2) of the HDA.

Section 16N(2) of the HDA provides the jurisdiction of the Tribunal and states the Tribunal is limited to a claim that is based on a cause of action arising from the Sale and Purchase Agreement entered into between a homebuyer and the housing developer. Furthermore, this claim which is brought by a homebuyer, must be brought within 12 months from either one of the following:-

(a) The date of issuance of the Certificate of Completion and Compliance (“CCC”) for the housing accommodation or common facilities, whichever is later;

(b) The expiry date of the Defects Liability Period (“DLP”) as set out in the Sale and Purchase Agreement; or

(c) The date of termination of the Sale and Purchase Agreement (which occurred before the issuance of the CCC).

The Homebuyer’s Tribunal only has the jurisdiction to award a maximum of RM50,000 monetary compensation with respect to the homebuyer’s claim.

Although, it is also important to note that if there is no Sale and Purchase Agreement entered into between the homebuyer and the licensed housing developer at the time the cause of action accrues, the Homebuyer’s Tribunal does have the jurisdiction to hear the matter if there exists a previous dealing between the homebuyer and the licensed housing developer in respect of the acquisition of the housing accommodation.

Appeal to Federal Court

In the case of Remeggious Krishnan v. SKS Southern Sdn Bhd (previously known as MB Builders Sdn Bhd) [2023] 1 LNS 362, the Federal Court decisively dealt with the issue.

In this case, the Appellant entered into a Sale and Purchase Agreement with the Respondent, i.e. the developer of a residential project known as Sky Habitat for the purchase of a unit therein. According to the Sale and Purchase Agreement, the vacant possession of that unit is deemed delivered when “the water and electricity supply are ready for connection to the [unit]”. However, the Respondent had delivered vacant possession of the unit without an electricity connection. The Appellant then filed 2 separate claims with the Tribunal. One, for failure to provide adequate ceiling height and protruding beans and pillars which amounted to RM40,000 coined as “the Technical Claim”. Two, for the delay in the connection of electricity supply, which amounted to RM49,832.00, and coined as “the Non-Technical Claim”.

The Homebuyer’s Tribunal allowed the Non-Technical Claim and awarded a sum of RM16,452.05 and costs of RM400 in favour of the Appellant. The Respondent applied for judicial review against this award. The High Court upheld the award; however, the Court of Appeal overruled the High Court’s decision and quashed the award.

The Appellants’ appeal to the Federal court concerned mainly the jurisdiction of the Homebuyer’s Tribunal in respect of Sections 16Q and 16M of the HDA, and specifically concerning the jurisdiction of the Tribunal to split claims as well as issues pertaining to the delivery of vacant possession.

Law on Split Claims

Section 16Q of the HDA provides that the Homebuyer’s Tribunal does not have the jurisdiction to hear claims that are split, nor if there is more than one claim brought, in respect of the same matter against the same party.

Furthermore, Section 16M(1) of the HDA provides that RM50,000 is the limit for a claim brought by a homebuyer to be within the jurisdiction of the Homebuyer’s Tribunal. Anything more, and the Homebuyer’s Tribunal does not have the jurisdiction to hear it.

The issue brought to the Federal Court in the Remeggious Krishnan case was whether a claimant could bring to the Homebuyer’s Tribunal more than one claim regarding the same property where the total amount of those claims exceeded RM50,000.

While the Court of Appeal held that the phrase “same matter” in Section 16Q meant that all the claims filed must refer to the same matter, that is, the “same property” - the Federal Court did not share the same view. They held that “if it was Parliament’s intention for “the same matter” to be interpreted as “the same Property” as suggested by the Court of Appeal, the drafters of the legislation would have used the term “Property” or “housing accommodation”.” and that “same matter” can only mean the same issue or type of claim.

Furthermore, the Federal Court decisively held that Section 16M of the HDA refers to “a claim” and not to “all the claims” in respect of the monetary limit, and therefore, each split claim before the Homebuyer’s Tribunal should be assessed separately and distinctly from each other, and if each claim is different and distinct from the other, those claims fall within the jurisdiction of the Homebuyer’s Tribunal.  

The Federal Court also very clearly spelt out that this might encourage some ambitious homebuyers to split their claims in order to circumvent the monetary limit in Section 16M of the HDA, for example, a claim of Liquidated Ascertained Damages (“LAD”) in the total sum of RM80,000 may be split by the purchaser into two claims of RM40,000 each. In such cases, the Federal Court held that the Homebuyer’s Tribunal may exercise its discretion to disallow such claims to be split on the basis that it contravenes Section 16Q as it is the same matter against the same party.

HDA – A Social Legislation

The HDA is designed to protect homebuyers and is, in fact, a form of social legislation. This fact was again reiterated in the Remeggious Krishnan case by the Federal Court. The Federal Court even emphasised that with this fact in mind, any term or provision in the statute must be interpreted in a way which ensures maximum protection for the homebuyers against the developer.

This fact is also upheld in many cases that have reached all the way up to the Federal Court. For examples, see Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and Other Appeals [2020] 1 MLJ 281 and PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & Anor and Other Appeals [2021] 2 MLJ 60 both of which held that the protection of homebuyers must be the ‘paramount consideration’ in matters concerning developers and purchasers, adding that the HDA ‘exists for the protection of the interests of purchasers and for matters connected therewith’.

Impact to Homebuyers

This essentially means that homebuyers can bring more than one claim to the Homebuyer’s Tribunal in respect of the same property arising from the Sale and Purchase Agreement, however, each claim must be distinct and different from the other, and each claim must be within the RM50,000 monetary limit.

‍This article is intended to offer an insight of the case authorities and is not intended to be nor should it be relied upon as a substitute for legal or any professional advice.

‍

‍‍

This article is jointly written by Claudia Silva (pic), LL.B (Hons) Essex, Bar of England & Wales (Inner Temple), LL.M., Cardiff and Datuk Chang Kim Loong, Hon Sec-Gen of the National House Buyers Association (HBA)

‍

‍Disclaimer: Any opinions expressed are entirely the author’s own and do not necessarily reflect the views of PropertyGuru and its entities.

‍

‍