JCW

[Unlawful accessorizing of carparks accessory parcels in the strata title and definition of “accessory parcel”, unlawful rental of Carparks and commercial business within a Residential Condominium] Justin was counsel for the Respondent in this case. In this case, the developer (D2) in this case sold 45 units of condominium to a closely related company (D1) with 439 accessory carparks attached to the said units, with 40 of the units having 8 to 15 accessory car parks each. The Respondent contend that this caused a shortage of carparks at the condominium including lack of visitors’ carparks and the D1/D2 proceeded to rent the extra carparks to residents/third parties.   The important points of law canvassed by this case from the report include the following :   (i)The Strata Titles Act 1985 prohibits the commercial usage of carparks, where in this case the Defendants were renting out the carparks in a residential condominium to third parties. (ii)Each condominium unit which is about 1000 square feet at most would require one or two carparks. The usage of the 394 carparks ( excessive carparks ) constitute a breach of Section 34 (2) and 69 of the Strata Titles Act 1985 namely that the accessory carparks is used or intended to be used not in conjunction with a parcel unit and dealt with independently of the main parcel unit. (iii)“Dealt” in the said Section 34 ( 2) and 69 include “tenancy” where Section 5 of the National Land Code defines “dealing” as transactions under Division 4 and Division 4 of the NLC include Part 14 and 15 with provisions  on “tenancies”. (iv)There is a breach of the Development Order where the requirement of the DO is a requirement under the law pursuant to Sections 22 (2) , 22 (3) and 22(4) of the Town and Country Planning Act 1976, where D2 failed to provide 10% of the 2180 carparks as visitors carparks. Here, we are not talking about the number of carparks required to be built by D2, which appear to be regular on paper but the dealing of the carparks for business purpose which caused an acute shortage of carparks. (v)There was evidence that the accessory carparks were not sold or transferred with any consideration and/or valuable consideration. (vi)The 40 SPAs were not arms length transactions where vacant possession were given to D1 before purchase price were fully paid, D1 took 3 years to pay the purchase price when the SPA require 3 months and there are instances the 10% deposit were made after balance purchase price made. All these could only happen when D1 and D2 have close relationship and controlled by the “Lee” family. (vii)Carpark transactions are illegal and ordinarily if the SPAs are struck down as void, the carparks after deducting the visitors’ carparks should revert to D2. However, as no approved strata plan was adduced by D2 as the developer, although available, there is no evidence that these carparks are “accessory parcels” or “comprise in any parcel”. Therefore, an adverse inference under Section 114 (g) Evidence Act is invoked against D2 and these carparks are ruled as common property. (viii)Section 143 (2) and (3) of the Strata Management Act 2013 provides that the plaintiff as the management corporation can lawfully sue for the recovery of common property. (ix)The fact that the carparks are already comprised in the strata tiles alone is not a determining factor that they do not form part of common property. If the Court were to agree with the submissions of the defendants in this regard, it will produce an absurd result i.e. any party like the developer can take advantage of the situation by ‘accessorizing” property which should have been “common property”. (x)Once the carparks are no longer part of the strata title, they are no longer accessory parcels and not subjected to Sections 4, 34 and 69 of the Strata Title Act.

110)[Judicial Review against decision of Tribunal for Homebuyer] Justin was counsel for the Applicant for Judicial Review in this case. The Court inter-alia held that :- -Pursuant to s16AE of the Housing Development (Control and Licensing) Act 1966 (“the HDA“), the tribunal can only adopt procedures it thinks fit and proper subject to provisions of the HDA and any regulations made under the HDA. -The tribunal cannot ignore the express provisions in the HDA and regulations in making and adopting any procedure. A template “Surat Wakil Kuasa Bagi Menghadiri Pendengaran” which allowed a homebuyer to authorise a third party to represent him/her was contrary and ignored the provisions of the Part VI of the HDA. -Therefore, the tribunal’s decision in allowing the third parties to represent homebuyers at hearings before it went against the purpose and intent of setting up the tribunal, which was to provide a quick, simple and inexpensive forum for homebuyers to pursue their claim against housing developers. -This ability to appoint a third party which was not extended to the housing developer went against the natural justice principle of rule against bias. Therefore, the decision to allow a third party to represent the purchasers at a hearing was procedurally improper and the tribunal had breached the principles of natural justice and failed to observe the procedural rules laid down in the HDA by which the tribunal’s jurisdiction was conferred.

[Setting aside of Judgment under Reciprocal Enforcement of Judgment Act] Justin was the counsel for the Respondent in this case. The Court of Appeal held that res judicata do not apply in this case and reversed the High Court Judgment (kindly refer to item no 101 above) (i)The Respondent submitted to jurisdiction in Singapore by filing a Defence and taking point in the Trial plus appealing to the Singapore Court of Appeal. The concept of public policy is a narrow and restrictive doctrine. It could not be seen how the registration of a Singapore Judgment at the Johor Bahru High Court could be said that to be contrary to the public policy in Malaysia.

[Unlawful representation of third party on behalf of Claimant in the Tribunal for Homebuyer Claims and calculation of LAD is taken from the date of SPA and not the booking form] Justin was the counsel for Hedgeford Sdn Bhd, the developer in this Judicial Review. A novel point was raised on behalf of the Developer that the Homebuyer cannot be represented by a third party who is not an advocate and solicitor before the Tribunal. The Court inter-alia held as follows :- (a)The parties to a claim before a tribunal are the homebuyer as defined under s16A of the HDA i.e. the claimant and the housing developer who is the respondent. It is only in cases where complex issues of law are involved and where a party “will suffer severe financial hardship”, that a party may be represented by an advocate and solicitor pursuant to s16U of the HDA. (b)The tribunal cannot on its own motion allow a homebuyer to be represented by a third party who is not an advocate and solicitor. In this regard, s16E of the HDA specifically provides that the tribunal can only adopt procedures it thinks fit and proper subject to the provisions of the HAD and any regulations made thereunder. In the circumstances, the tribunal’s decision to allow the third party to represent the first applicant at the hearings before it is procedurally improper and goes against the purpose and intent of the setting up of the tribunal and the natural justice principle of nemo judex in sua causa. Further, the Court held that it is clear from reg 22 of the Housing Development (Tribunal for Homebuyer Claims) Regulations 2002 (“the 2002 Regulations”) that the legislative intent of Parliament is that in the event of a claimant not appearing at the hearing, the tribunal must either dismiss the claimant’s claim or allow the respondent’s claim if any. In the premises and pursuant to reg 22(1) and (2) of the 2002 Regulations, the tribunal did not have the option to keep on adjourning the hearing as it had done, until the first respondent decided to attend the same. Regulation 22(1) and (2) of the 2002 Regulations must be interpreted strictly and take precedence over the general provision in reg 27. The tribunal’s purported exercise of its powers to allow the first respondent to be represented by a third party and to adjourn the hearings due to the first claimant’s absence, is ultra vires the HDA. In respect of the of the issue of Liquidated Damages (LAD), the Court held that the tribunal’s finding that the date of payment of the booking fee is the date of the sale would mean that there exists a binding contract for the sale and purchase of the property between the parties at the date of payment of the booking fee. If that is the case, then in the event of a purchaser deciding to not execute a formal contract in the form of contract in Schedule H, the purchaser would then be in breach of the sale and purchase agreement since the agreement would already have come into being upon payment of the booking fee thus rendering the purchaser liable to the developer for any loss or damage suffered by the developer instead of merely forfeiting the booking fee. Such an outcome could not have been the legislative intent of the HDA. Accordingly, the tribunal had erred in law in calculating the LAD from the date of the booking fee instead of from the date of the SPA.

[Pre-conditions to apply for a Restraining Order] Alvin was counsel for the 1st Intervener in this suit. Alvin raised the point that the pre-condition of Section 368(2)(a) to (d) of the Companies Act 2016 needs to be complied with even in the application for restraining order under Section 368(1) and not just subsequent extensions of the same. The Court accepted the said argument and amongst others held : (i)It cannot be the legislative intent that only s368(2)(a) and (d) of the Act need be complied with when applying for a restraining order. The conditions under s368(2)(a) to (d) need all be complied with. To hold otherwise would do violence to the manner in which s368(2)(a) to (d) was drafted and would call, unjustifiably, for ignoring the fact that the conditions set out in s368(2)(a) to (d) are cumulative, having regard to the semicolon after each subsection and the use of the conjunction “and” placed between s368(2)(c) and (d). (ii)Upon its proper construction, the conditions set out in s368(2)(a) to (d) of the Act need to be complied with when an application is made for a restraining order under s368(1) of the Act. Such a result is consonant with the plain language used and the legislative intent and purpose for the conditions in s368(2)(a) to (d) of the Act. In this regard, the applicants, having conceded that the conditions in s368(2)(c) and (d) of the Act were not complied with when making and securing the ex parte order, the restraining order thus cannot stand.

[Law on retrospective sanction from the Liquidator to commence proceedings on behalf of a wound-up company] Justin was counsel for the Respondents in this case who applied to strike out the Appeal on the basis that no proper sanction has been obtained by the Respondent/Appellant to appeal to the Court of Appeal. The Court of Appeal dismissed the application and amongst others held that :- (i)With the presence of s 236 of the Companies Act, it is the liquidator who has the authority to bring or defend any action or proceedings in court. The term “bringing” must necessarily include continuing with any action or proceedings already brought or commenced and any such action or proceedings must also extend to the conduct and continuation of appeals. (ii)The Official Receiver as the liquidator of the appellant has the necessary authority to consider and grant a sanction which is effective on a date other than the date it was made i.e. retrospective sanction. Bearing in mind that the Official Receiver had already granted the necessary sanction, the respondents’ application thus is without merit and must be dismissed.

[setting aside of Judgment under Reciprocal Enforcement of Judgment Act]    Justin Voon was the counsel for the Defendant. We believe that this is the first case in Malaysia where an attempt to register the Singapore Judgment was made whilst the Malaysian Suit was on-going which inter-alia canvass the same issues. The following issues  emerge from this decision  :   (i)Res Judicata applies in a REJA case – whether the decision in the JB Suit on 2 occasions that the Singapore Suit will not prevail over the JB Suit would be binding here in the REJA Case; (ii)Whether Res Judicata is a facet of public policy and therefore, whether the said Foreign Singapore Judgment can be set aside under Section 5 (1)(a)(v) of the REJA “that the enforcement of the judgment would be contrary to public policy in Malaysia”    The High Court set aside the registered Judgment based on Res Judicata accepted as part of public policy [overturned on appeal]   [Note: This High Court decision has been overturned by the Court of Appeal vide Civil Appeal No. J-02(IM)-1509-07/2018]

[recovery of Stakeholder sums]   Justin and Alvin Lai were counsel for the Plaintiff. The Court Decision covered amongst others the following points including important points of law:   (i)The solicitors holding monies as Stakeholders hold it as a trustee for both Vendor and Purchaser and not in a contractual capacity; (ii)The solicitors holding as Stakeholders need not be a party to the Memorandum of Agreement  are bound by the terms of the stakeholdership and is not exonerated from liability; (iii)The breach of a stakeholding term is not just a breach of undertaking but also a breach of trust; (iv)          The deposit of and holding the monies as a refundable deposit by the legal firm as a stakeholder is in the ordinary course of its  business and the 1st Defendant had acted within the scope of his apparent authority