THE FEDERAL COURT OF MALAYSIA
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www.ipsofactoJ.com/appeal/index.htm [2005] Part 1 Case 3 [FCM] |
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THE FEDERAL COURT OF MALAYSIA |
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Judgment[a]
Ahmad Fairuz CJ
(delivered the judgment of the court)
On June 14, 2004, this court heard the appellant's appeal on the following question:
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whether the Tribunal has jurisdiction to hear and adjudicate on cases where the sale and purchase agreement was entered into before December 1, 2002 and, if so to what extent. |
At the end of the hearing, the appeal was dismissed and the following are the reasons for the decision.
The Homebuyers Tribunal (hereafter the "Tribunal") was established under the Housing Developers (Control and Licensing) (Amendment) Act 2002 which came into force on December 1, 2002. The aim of the establishment is to let the Tribunal hear claims by homebuyers against housing developers. Before the Amendment Act took effect, a homebuyer must claim damages against a developer in a court action.
On March 27, 2003, the Tribunal in claim No. TTPR/B/0057/03 issued an award requiring the appellant to pay Tan Geok Loi a sum of RM13,926.74. On May 5, 2003, the High Court at Kuala Lumpur gave the appellant leave to commence proceeding for judicial review and certiorari to quash that award and for a declaration that the Tribunal lacks jurisdiction to hear claims involving sale and purchase agreements that were entered into before December 1, 2002. On September 4, 2003 the High Court held that the Tribunal has no jurisdiction to hear the claim and allowed the orders that the appellant sought. If Parliament, according to that court, intends to dress the Tribunal with retrospective jurisdiction to cover sale and purchase agreements that were entered into before the Amendment Act took effect, then Parliament would have said so in clear words, like that expressed in s 32(2) of the Amendment Act which reads as follows:–
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Every agreement, assignment or charge lawfully entered into between a purchaser and his financier before the appointed date shall be subject to, and the parties thereto shall be entitled to the benefits of, the new s 22C of the principal Act .... |
The learned High Court judge further stressed that under s 16AD only non-compliance with an award of the Tribunal, and not breach of a term in an agreement itself, would attract criminal liability. Nonetheless according to the judge, the award flowed from a breach of the sale and purchase agreement. As the breaches that were cited in the applications before him took place prior to the establishment of the Tribunal, and since Parliament did not expressly provide the amendments with retrospective effect, hence his Lordship opined that the Tribunal has no jurisdiction to hear claims that emanated from sale and purchase agreements entered into before December 1, 2002.
Against the High Court decision the Tribunal appealed to the Court of Appeal. His Lordship Richard Malanjum JCA in the judgment of the court said:–
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Applying the liberal and purposive approach to the statutory provisions that deal with the jurisdiction of the Tribunal we find that the argument advanced for the respondents is premised on at least two assumptions. Firstly, that the date in a sale and purchase agreement is material in determining the jurisdiction of the Tribunal. Secondly, any award given for a breach of a sale and purchase agreement entered into prior to the appointed date, particularly where the breach was before that date, would tantamount to allowing criminal law to operate retrospectively since it is now punishable being an offence for any failure to comply with or satisfy such award. This argument of course relates to the legal principle that criminal law cannot be made to operate retrospectively unless specifically stipulated. With respect, we find the first assumption to be without basis. There is nothing in the provisions establishing the Tribunal or related thereto which can be said to support it. In our view s 16M sets out the general jurisdiction of the Tribunal, it is s 16N and in particular s 16N(2) thereof that provides the perimeter of the jurisdiction of the Tribunal. |
On s 16N(2), the learned Court of Appeal judge also said:–
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Sub-section 16N(2) does not stipulate a cut off point by reference to date of agreement vis-à-vis jurisdiction. All that is required of the Tribunal in assuming jurisdiction to hear a claim presented before it is to verify whether it is within the ambit of subsection 16N(2) that is to say:–
We do not think there should be any additional or prerequisite term to be read into the provisions. To do so would tantamount to adding what is not in the statute. And that should not be done since judges are not legislators. |
The learned Court of Appeal judge further said:–
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In fact the need for a sale and purchase agreement as a condition precedent in filing a claim has also been waived by subsection 16N(3) .... |
On s 16AD, the learned Court of Appeal judge held that:–
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We are conscious of the counter-argument that without a breach in the first place there is not question of an award being given by the Tribunal and without an award there is no issue of penalty arising. And if a breach occurred before the appointed date that would effectively be criminalising an act retrospectively. With respect, a distinction should be drawn between a breach of the sale and purchase agreement and an award rendered arising from such a breach. As we have stated earlier on it is not the breach of the sale and purchase agreement that has been criminalised. Rather it is the failure to comply with or satisfy any award given by the Tribunal in connection with any claim made pursuant to such breach. At any rate s 16D does not empower the Tribunal to impose any penalty. It only provides for a defaulter to be subject to prosecution which invariably is the task of another authority in a separate criminal proceeding. And on being prosecuted a defaulter is at liberty to raise in defence the inapplicability of the section to him. Such approach was successful in the case of Energoprojek (M) Holdings v PP [1998] 5 MLJ 401. Accordingly, we do not think s 16AD is intended to take away any substantive right of any person. Neither is it meant to affect or limit the jurisdiction of the Tribunal in any manner howsoever. |
With regards to the appellant's submission that should the Tribunal be allowed to hear claims that are premised on sale and purchase agreements entered into before December 1, 2002, the substantive rights of the respondent would be jeopardised and prejudiced, the learned Court of Appeal judge said:–
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It is to be noted that the establishment of the Tribunal is in effect a creation of another forum intended for speedy disposal at a minimum cost of a prescribed claim up to the limit of RM25,000 by a homebuyer against a licensed housing developer for breach of a sale and purchase agreement entered into between the parties. There is therefore no question of the rights of anyone being eroded or removed as was envisaged in the Colonial Sugar Refining Co Ltd v Irving [1905] AC 369, PC. (See also Lim Phin Khian v Kho Su Ming [1996] 1 AMR 281; [1996] 1 MLJ 1). And although it may be argued that the imposition of penalty has a prejudicial effect, such preposition may be true if it is the breach of the sale and purchase agreement that has been criminalised. But here it is not the case. |
In this court, Mr. Lambert Rasa-Ratnam for the appellant again submitted that the Tribunal has no jurisdiction to hear claims relating to sale and purchase agreements entered into before December 1, 2002. To support his submission, Mr. Lambert Rasa-Ratnam referred to the judgment of this court in Lim Phin Khian v Kho Su Ming [1996] 1 MLJ 22 which reads as follows:–
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The presumption against retrospectivity of legislation is based upon the judicial philosophy that Parliament does not intend an unjust result. See Pesuruhjaya Ibu Kota Kuala Lumpur v Public Trustee [1971] 2 MLJ 30 at p 31. That this approach is still current appears from two recent decisions of the House of Lords. The first of these is The Boucraa [1994] 1 All ER 20 at pp 29-30 where Lord Mustill said:–
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Mr. Lambert Rasa-Ratnam also referred to the case of Sim Seoh Beng v Korperasi Tunas Muda Sungai Ara Bhd [1995] 1 AMR 501; [1995] 1 CLJ 496 wherein the Court of Appeal said:–
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In our judgment, the correct test to be applied to determine whether a written law is prospective or retrospective is to first ascertain whether it would affect substantive rights if applied retrospectively. If it would then prima facie that law must be construed as having prospective effect only, unless there is a clear indication in the enactment that it is any event to have retrospectivity. |
Mr. Lambert Rasa-Ratnam stressed that the amendment is not about forum purely but it is also about the appellant's substantive rights whereby with the introduction of s 16AD, the nature of the appellant's obligations have, in law, changed. This is because s 16AD imposes criminal penalty for non-compliance with an award of the Tribunal and such penalty was not imposed on the appellant prior to the Amendment Act taking effect. Mr. Lambert Rasa-Ratnam referred to Craies on Statute Law, 6th Edn where at p 386 the author defined retrospective laws as laws:
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which takes away or impairs any vested right acquired under existing laws or creates a new obligation, or imposes a new duty; or attaches a new disability in respect to transactions or considerations already past. |
Mr. Lambert Rasa-Ratnam submitted that the parties, at the time when they entered into the agreement, did not expect a breach of agreement to result in a criminal offence. If the Tribunal is given jurisdiction over agreements prior to December 1, 2002, that means criminal laws would have retrospective effect and this is forbidden by Article 7 of the Federal Constitution. Hence, Mr. Lambert Rasa-Ratnam submitted that if this court should decide that the Tribunal has jurisdiction over agreements entered into before December 1, 2002, then he urged the court to restrict the application of s 16AD to only agreements that were entered into after that date.
In reply, the Federal Counsel, for respondent, referred to Energoprojek (M) Holdings v PP, supra, and emphasised the need for courts to look at the purpose of an amending Act. Parliament's intention in amending the Housing Developers (Control & Licensing) Act 1966 is to protect homebuyers against housing developers. The Federal Counsel submitted that s 16AD cannot be construed as creating an offence for breaching agreement because under that section the offence relates to non-compliance with an award of the Tribunal. These are two unrelated matters, according to him. The criminal offence is about non-compliance with an award and an award will be issued only after December 1, 2002. Section 16AD, the Federal Counsel emphasised, takes effect prospectively and so it will not contravene Article 7 of the Federal Constitution.
The question before this court is whether the Tribunal has jurisdiction to hear claims arising from sale and purchase agreements entered into prior to the date the Amendment Act takes effect. This court agrees with the Court of Appeal that the Tribunal's jurisdiction is provided by s.16N(2):
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The jurisdiction of the Tribunal shall be limited to a claim that is based on a cause of action arising from the sale and purchase agreement entered into between a home buyer and the licensed housing developer which is brought by a homebuyer not later than twelve months from the date of issuance of the certificate of fitness for occupation for the housing accommodation or expiry date of the defects liability period as set out in the sale and purchase agreement. |
In relation to this, we refer to ss 16N(3) and 16O(1) of the Amendment Act which provide as follows:–
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16N. |
(3) |
Notwithstanding subsection (2) no claim shall be affected or defeated on the ground that no sale and purchase agreement has been entered into between the homebuyer and the licensed housing developer at the time when the cause of action accrues if there exists a previous dealing between the homebuyer and the licensed housing developer in respect of the acquisition of the housing accommodation. |
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16O. |
(1) |
Notwithstanding that the amount or value of the subject-matter claimed or in issue exceeds twenty-five thousand ringgit, the Tribunal shall have jurisdiction to hear and determine the claim if the parties have entered into an agreement in writing that the Tribunal shall have jurisdiction to hear and determine the claim. |
These provisions show that the Tribunal's jurisdiction is loosely defined. This, in the court's opinion, shows Parliament's intention to establish a simple forum in which homebuyers could make their claims. This court agrees with the Court of Appeal that:
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It is absurd in our view to say that Parliament proceeded to legislate for the establishment of the Tribunal well aware that it would only begin to serve its purpose a few years later since it would be inconceivable for claims to arise on breaches of sale and purchase agreements entered into prior to the appointed date. Meanwhile the claims of homebuyers based on breaches of sale and purchase entered into prior to the appointed date would continue to languish under the present set up. Surely that must have been the very mischief which Parliament intended to address when it legislated for the establishment of the Tribunal. |
In Chebaro v Chebaro [1986] 2 All ER 897 the parties were married in Beirut, Lebanon and they settled in the United Kingdom. They then separated but stayed on in England. On April 16, 1985, upon the husband's application, a decree for divorce was granted in Lebanon. When s 12 of the Matrimonial and Family Proceedings Act 1984 came into force in England on September 16, 1985, the wife applied for leave to apply for certain financial reliefs. Section 12 of the Act states:
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12. |
Where –
either party to the marriage may apply to the court in the manner prescribed by rules of court for an order for financial relief under this Part of this Act." |
Sheldon J allowed the wife's application and, in his judgment at p 903, said
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Apart from his reliance in the present case on the general proposition that legislation is not to be regarded as having retrospective operation unless such a construction is unavoidable, counsel for the husband has pointed to the unfair consequences to the husband that might follow in such an event; the creation of new rights and obligations and by the imposition on him of potentially severe financial liability which did not exist when his marriage was dissolved. The possibility of such disadvantages, of course, I accept; indeed, the risk that such consequences will follow forms the basis of the court's dislike of retrospective legislation. That is not to say, however, that such risks are not contemplated or even intended by Parliament when introducing new legislation. |
At p 904 the learned judge said:
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In my judgment .... those words, in their ordinary and natural meaning, apply initially to all cases in which the divorce, annulment or legal separation has been pronounced in judicial or other proceedings overseas, whatever the date of such proceedings and even if it was before September 16, 1985, and accordingly, the provisions in question are retrospective in their effect. |
The husband appealed the judge's decision to the Court of Appeal; and Balcombe LJ in Chebaro v Chebaro [1987] Fam 127 said at p 131:
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.... in my judgment the meaning of the words used is plain and unequivocal. The use of the past tense – "Where ... a marriage has been dissolved" – in contradistinction to the present tense in the following paragraph – "and .... the divorce .... is entitled to be recognised" – makes it clear that the section is intended to apply to a decree of divorce, whenever pronounced and whether before or after September 16, 1985 .... Further support for this construction is afforded by the provisions of paragraphs (a) and (b) of s 151(1) of the Act of 1984. These lay down the jurisdictional requirements which have to be satisfied for the court to entertain an application for financial relief under Part III. They are if:
This is language which it is hard to reconcile with a construction that limits the operation of s 12 only to those overseas divorces granted after the date when Part III came into force. |
Neill LJ said at p 134:
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In my judgment the intention of the legislature can be determined with sufficient certainty by looking at the words of s 12(1) of the Act of 1984 by themselves. It is plain from the concluding words of the subsection that a person can apply to the court for financial relief if the conditions set out in paragraphs (a) and (b) are satisfied. It is also to be observed that this right can be exercised by either party to the marriage. |
From the expressions in the judgment above, it is clear that that court adopted the approach that going by the ordinary meaning and effect of s 12, the question whether a marriage was dissolved before or after the section came into force is unimportant. What is important are the conditions expressed by the section which must be observed.
The same principle was followed in Hager v Osborne [1992] Fam 94. In that case, the applicant on July 5, 1990 applied under s 11B of Guardianship of Minors Act 1971 which was in force on April 1, 1989, for financial maintenance of her child who was borned on December 23, 1983. The respondent denied paternity and applied to strike out the application on the grounds that, inter alia, s 11B has no retrospective effect. Section 11B provides that:–
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(1) |
The court may, on the application of either parent of a child, make –
.... |
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(2) |
The orders referred to in subsection (1) of this section are –
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With reference to Counsel's submissions the learned judge said at p 99:
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Mr. Turner .... submits, and there is attraction to this submission, that by s 2 of the Affiliation Proceedings Act 1957, three years having elapsed since the child's birth without the respondent having paid money for the child's maintenance, the respondent had acquired the right pursuant to s 2 of the Affiliation Proceedings Act 1957 not to be sued for maintenance thereafter, and accordingly, that accrued right should not be taken away from him retrospectively. |
Section 2 of Affiliation Proceedings Act 1957 contains a provision on time for making paternity claims as follows:–
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(a) |
at any time within three years from the child's birth, or |
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(b) |
at any subsequent time, upon proof that the man alleged to be the father of the child has within the three years next after the birth paid money for its maintenance .... |
With regards to this provision, the learned judge said:–
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it is common ground that the respondent made no such payment for the boy's maintenance, and consequently the mother would not have been entitled to seek an order for such maintenance after December 23, 1986. That date passed without any further proceedings being launched and the respondent was thus entitled to feel that he was no longer at risk of being required to maintain his child. |
However, the learned judge dismissed the respondent's application to strike out the applicant's action by saying thus (at p 101):–
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In my judgment, the natural and ordinary meaning of s 11B of the Act 1971, taken in isolation and taken in the context of the other provisions I have referred to, leads inevitably to the conclusion that no rule or presumption against retrospectivity operates so as to prevent the claim being made on the facts such as those before us. |
So too in the appeal now before this court. Based on the expressions in the judgment cited above, this court agrees with the Court of Appeal that according to s 16N(2), so long as a claim before the Tribunal concerns a sale and purchase agreement between homebuyer and licensed housing developer and the claim is made not later than 12 months from the date of issuance of certificate of fitness for occupation or the date when the defects liability period expires as stipulated in the sale and purchase agreement, then the Tribunal would have jurisdiction to hear the claim without regard to the date of the agreement. This interpretation, in the court's view, is reinforced by s 16N(3) which provides that a claim will not be jeapardised or fail on the ground that no sale and purchase agreement between homebuyer and licensed housing developer existed at the time when the cause of action accrues if there is a transaction between the parties on acquisition of the home. Hence, in this court's opinion, the date of agreement is not a material matter to entitle the Tribunal to hear homebuyers' claims.
From another angle, it will be wise to remember that the Amendment Act concerns procedural and not substantive matters. Therefore, it has retrospective effects. This principle was stressed in Ramzan Darzi v Mst Azizi [1976] CLJ 897 and New India Insurance Co Ltd v Shanti Misra AIR 1976 SC 237. In Ramzan Darzi, Jaswant Singh CJ, in the judgment of the majority said (at pp 898 and 899):–
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The point that therefore remains for consideration is whether the choice of forum relates to the realm of procedure or not. That the choice of forum is a matter of procedure and is not a matter of substantive right and in most cases a new Act would have retrospective effect so far as the choice of forum is concerned appears to be well settled. Reference in this connection may be made to a decision of the Allahabad High Court in Hazari Tewari v Mt Maktula AIR 1932 All 30, where Sulaiman Ag CJ while interpreting the new Tenancy Act which conferred jurisdiction on the revenue court and barred the jurisdiction of the civil court in the matter of a suit in respect of which adequate relief could be obtained by way of a revenue suit observed as follows:
To the same effect is a decision of the Madras High Court in VCK Bus Service v HB Sethna AIR 1965 Mad 149 where it was held as follows:
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In New India Insurance Co Ltd v Shanti Misra, supra, Untwalia J said this at p 240:–
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On the plain language of s 110A and 110F there should be no difficulty in taking the view that the change in law was merely a change of forum i.e. a change of adjectival or procedural law and not of substantive law. It is a well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away. Otherwise the general rule is to make it retrospective. The expressions "arising out of an accident" occurring in subsection (1) and "over the area in which the accident occurred", mentioned in subsection (2) clearly show that the change of forum was meant to be operative retrospectively irrespective of the fact as to when the accident occurred. |
The appellant's submission, i.e. that its substantive rights has been jeopardised and that Article 7(1) of the Federal Constitution has been offended, is baseless in this court's opinion. Article 7 provides as follows:–
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No person shall be punished for an act or omission which was not punishable by law when it was done or made, and no person shall suffer greater punishment for an offence than was prescribed by law at the time it was committed. |
Section 16AD provides as follows:–
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(1) |
Any person who fails to comply with an award may be the Tribunal within the period specified therein commits an offence and shall on conviction be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding two years or to both. |
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(2) |
In the case of continuing offence, the offender shall, in addition to the penalties under subsection (1), be liable to a fine not exceeding one thousand ringgit for each day or part of a day during which the offence continues after conviction. |
This court agrees that s 16AD imposes a new liability on housing developer and homebuyer in the event of failure to obey an award of the Tribunal. But this liability only takes prospective effect. Hence, this section does not contradict Article 7 of the Federal Constitution. In any event, a breach of agreement is not a criminal offence under that section. The offence is non-compliance with the Tribunal's award and it cannot under any circumstances be enforced retrospectively because the Tribunal can deliver its award only after December 1, 2002. In this court's view, s 16AD is not relevant to the jurisdiction of the Tribunal.
We hereby unanimously decide that the Tribunal has jurisdiction to hear claims arising out of agreements entered into before December 1, 2002 and that s 16AD is applicable to agreements entered into before that date. Thus the appeal is dismissed.
Cases
Lim Phin Khian v Kho Su Ming [1996] 1 MLJ 22; Energoprojek (M) Holdings v PP [1998] 5 MLJ 401; Chebaro v Chebaro [1986] 2 All ER 897; Chebaro v Chebaro [1987] Fam 127; Hager v Osborne [1992] Fam 94; Ramzan Darzi v Mst Azizi [1976] CLJ 897; New India Insurance Co Ltd v Shanti Misra AIR 1976 SC 237
Legislations
Housing Developers (Control and Licensing) (Amendment) Act 2002: s.16AD, s.16N, s.16O
Federal Constitution: Art.7
Matrimonial and Family Proceedings Act 1984 [UK]: s.12
Guardianship of Minors Act 1971 [UK]: s.11B
Authors and other references
Craies on Statute Law, 6th Edn
Representations
Lambert Rasa-Ratnam & Sean HM Yeow (Lee Hishammuddin) for appellant.
Abd Ghani Patail, Azahar Mohammed, Umi Kalsom Abd Majid, Masturi Ayob & Norima Bahadon (Attorney-General) for respondent.
Notes:-
[a] This is a translation of the original judgment which was written in the malay language.
This decision is also reported at [2004] 6 AMR 381.
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