Introduction

The recent High Court decision of Alvin Leong Wai Kuan & Ors V Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Ors And Other Applications [2020] 6 CLJ 55 (“Alvin Leong”) held that the Federal Court in Ang Ming Lee & Ors V. Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals [2020] 1 CLJ 162 (“Ang Ming Lee”) had not expressly ruled that its decision could only have prospective effect. Therefore, in accordance with the general rule (a written judgment has retrospective effect), the judgment in Ang Ming Lee has retrospective effect.

Alvin Leong concerned three judicial review applications by the Applicants (Purchasers of parcels in Dreamcity Residence in Seri Kembangan. The Applicants had entered into a Sale and Purchase Agreement (“SPA”) with the Third Respondent (the Developer).

Clause 25(1) of the SPA stated that Vacant Possession (“VP”) of the parcel would be delivered within 42 months from the date of the SPA which was contrary to the prescribed Schedule H SPA under the Housing Development (Control and Licensing) Regulations 1989 (“HDR”).

The Second Respondent (the Controller of Housing), pursuant to an application for an extension of the 42 months to 59 months by the Third Respondent, extended the 42 months period to 54 months.

The Third Respondent appealed the decision of the Second Respondent and the First Respondent (the Minister of Housing and Local Government) allowed the appeal and extended the period to 59 months.

QUESTIONS BEFORE THE COURT

There was a total (6) questions excluding sub-questions before His Lordship Justice Wong Kian Kheong. The salient questions were:-

1. Does Ang Ming Lee have retrospective or prospective effect? In this regard, when can a Malaysian court apply the doctrine of prospective overruling (where the court’s judgment or order can only have prospective effect)?;
2. If Ang Ming Lee has retrospective effect:
   1. Can the Second Respondent lawfully extend pursuant to Sub Regulation 11(3) of the HDR the 36 months period, first to 42 months period and then to 54 months period?; and
   2. Whether the second respondent’s decision is valid, especially when the applicants have been deprived of their right to be heard before the making of the Second Respondent’s decision?;
3. Are the applicants entitled to claim Liquidated Ascertained Damages (“LAD”) from the Third Respondent based on the 36 months period?

Answering Question 1

With regards as to whether Ang Ming Lee had a retrospective or prospective effect, the High Court held as follows:

1. The general rule is that a written judgment has a retrospective effect;
2. An exception to the general rule was given in the case of PP v. Dato Yap Peng [1987] 1 CLJ 550 where the Supreme Court gave a prospective effect to its decision regarding the unconstitutionality of Section 418A of the Criminal Procedure Code (as it was then), a policy decision so as to ensure convictions and acquittals prior to the decision were not affected;
3. Another exception was that Courts may decide in exceptional circumstances that its decision regarding the validity or effect of a provision of written law or a certain position at law (case law) can only have prospective effect.

The exceptions in (b) and (c) above form the doctrine of prospective overruling which only applies in exceptional circumstances. As such, the Federal Court in Ang Ming Lee has retrospective effect as the Federal Court did not rule that its decision in Ang Ming Lee can only have prospective effect.

The doctrine of prospective overruling did not apply as there are no exceptional circumstances. In addition, the object of the Housing Development (Control and Licensing) Act 1966 (“HDA") is for the protection of the homebuyer. Accordingly, it is in the interest of the homebuyer in line with the HDA's object, for the decision of Ang Ming Lee to have a retrospective effect.

Answering Question 2

In relation to whether the Second Respondent can lawfully extend pursuant to Sub Regulation 11(3) of the HDR the 36 months period, first to 42 months period and then to 54 months period and whether the second respondent’s decision is valid, especially when the applicants have been deprived of their right to be heard before the making of the Second Respondent’s decision, the High Court held as follows:

1. That as a matter of stare decisis, the decision of Ang Ming Lee was binding on the High Court;
2. Ang Ming Lee clearly ruled that Sub-regulation 11(3) of the HDR is invalid and the Second Respondent could not therefore exercise any power under Sub-regulation 11(3) of the HDR to extend the 36 months period. Accordingly, the Second Respondent could not invoke Sub- regulation 11(3) of the HDR to 'waive or modify' the 36 months period in the statutory SPA.
3. The Second Respondent’s first extension to 42 months was given before the signing of the SPAs whereas the second extension to 54 months was given after the signing of the SPAs. Rightfully, the Second Respondent should have given the Applicants (and the wider Purchasers) a right to be heard before deciding on the second extension.

Answering Question 3

The High Court in determining whether the applicants are entitled to claim LAD from the Third Respondent based on the 36 months period, held that the First and Second Respondents have no power under the HDR to extend the statutory 36 months period.

The High Court applied its wide discretionary powers under Section 41 of the Specific Relief Act 1950 and Order 15 rule 16 of the Rules of Court 2012 and granted a declaration that the Applicants are entitled to claim LAD based on the 36 months period as the 36 months period is mandated by statute (Sub- regulation 11(1) of the HDR) and the object of the HDA and HDR is for the protection of the homebuyers.

Conclusion

The decision of the High Court in the Alvin Leong case, at least on the 1st Question posed on whether the Federal Court decision in Ang Ming Lee has a retrospective effect, will be put to serious test for sure in the Court of Appeal next. The repercussions of the Alving Leong case will be of concern as it will open the floodgates for more litigation in Court.

It is noted that the decision of Alving Leong has not considered the very recent Federal Court decision of Jack-In Pile (M) Sdn Bhd v Bauer (Malaysia) Sdn Bhd & Another Appeal [2020] 1 CLJ 299, and which decision is indeed instructive on this issue of Retrospective and Prospective laws. The Court had this to say:-

“Whether a statute is to be construed in a retrospective sense, and if so to what extent, depends on the intention of the legislature as expressed in the wording of the statute, having regard to the normal canons of construction and to the relevant provisions of any interpretation statute.”

This position is further solidified in the Federal Constitution as candidly pointed out by the Federal Court as follows:

“In this regard, Parliament is the sole authority which is vested with the legislative power to enact a law with retrospective effect. Such power is manifested expressly with clarity of language in art. 66 cl. (5) of the Federal Constitution which provides:

(5) A Bill becomes law on being assented to by the Yang di-Pertuan Agong ... but no law shall come into force until it has been published, without prejudice however, to the Power of Parliament ... to make laws with retrospective effect. (emphasis added)”

Concluding, as at current time, the Jack-In Pile decision would seem abundantly clear that any Act of Parliament must state with clarity that the law as passed shall have a Retrospective affect as this cannot be assumed. If the Act of Parliament is silent on this fact, then the law passed shall have a Prospective effect from the date the said law was passed.