Housing Development (Control & Licensing) Act 1966 ['HDA1966']
The Housing Development (Control and Licensing) Act 1966 (HDA 1966) is a Malaysian statute that regulates the development of housing in Malaysia. Its primary objectives are to protect home buyers and ensure fair practices in the housing industry.
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#Homebuyer's protection
Interpretation and Application of the HDA 1966
The Preamble:
First enacted 1966 (Act No. 38 of 1966) & Revised 1973 (Act 118 w.e.f.16 August 1973)
An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers and for matters connected therewith.
ANG MING LEE FC (2019)
[37] The object of the Act has been highlighted in a string of authorities. In S.E.A. Housing Corp Sdn Bhd v. Lee Poh Choo [1982] CLJ 355; [1982] CLJ (Rep) 305; [1982] 2 MLJ 31, Suffian LP said at p. 311 (CLJ); p. 34 (MLJ):
It is common knowledge that in recent years especially when the government started giving housing loan making it possible for public servants to borrow money at 4% interest to buy homes, there was an upsurge in demand for housing, and that to protect home buyers, most are whom are people of modest means, from rich and powerful developers, Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act.
[38] In the case of Sentul Raya Sdn Bhd v. Hariram Jayaram & Ors And Other Appeals [2008] 4 CLJ 618; [2008] 4 MLJ 852, Gopal Sri Ram JCA (as he then was) speaking for the Court of Appeal said:
The contract which has fallen for consideration in the present case is a special contract. It is prescribed and regulated by statute. While parties in normal cases of contract have freedom to make provisions between themselves, a housing developer does not enjoy such freedom. Hence parties to a contract in Form H cannot contract out of the scheduled form. Terms more onerous to a purchaser may not be imposed. So too, terms imposing additional obligations on the part of a purchaser may not be included in the statutory form of contract.
[39] The Federal Court in Veronica Lee Ha Ling & Ors v. Maxisegar Sdn Bhd [2009] 6 CLJ 232, reiterated the object of the Act by making the following observation:
Now, cl. 23 is part of a statute based contract. In this country, the relationship between a house-buyer and a licensed developer is governed by the Housing Developers legislation. Its object is to protect house buyers against developers. A developer must execute the agreement set out in the schedule to the relevant subsidiary legislation. He cannot add other clauses in it.
[40] The Act being a social legislation designed to protect the house buyers, the interests of the purchasers shall be the paramount consideration against the developer. Parliament has entrusted the Minister to safeguard the interests of the purchasers and the Minister has prescribed the terms and conditions of the contract of sale as per Schedule H. We find no contrary indication in the language, scope or object of the Act that such duty to safeguard the interests of the purchasers may be delegated to some other authority.
[41] The legislative intent that the duties shall remain with the Minister, may be discerned from ss. 11 and 12 of the Act. Under s. 11, whilst the Controller is given the power to investigate on the reason why a licensed housing developer is unable to meet his obligation to the purchasers, or is about to suspend his building operations or is carrying on his business detrimental to the interests of the purchaser, it is the Minister who is empowered to give directions and to take such other measures for purposes of safeguarding the interests of the purchasers and for carrying into effect the provisions of the Act. Likewise under s. 12 which provides for the powers of the Minister to give general directions as he considers fit, to the licensed housing developer for purposes of ensuring compliance with the Act. Such directions, which shall be given in writing, are binding on the developer.
PJD REGENCY FC (2021)
[1] The phrase "social legislation" attached to the Housing Development (Control and Licensing) Act 1966 ("HDA 1966") and its ensuing subsidiary legislation ie, the Housing Development (Control and Licensing) Regulations 1989 ("HDR 1989") is not merely a fanciful label. In disputes between home buyers and housing developers, its significance lies in the approach taken by the courts to tip the scales of justice in favour of the home buyers given the disparity in bargaining power between them and the housing developers.
[33] With the greatest of respect, it is our view that the submission is untenable. When it comes to interpreting social legislation, the State having statutorily intervened, the courts must give effect to the intention of Parliament and not the intention of parties. Otherwise, the attempt by the Legislature to level the playing field by mitigating the inequality of bargaining power would be rendered nugatory and illusory.
[34] We find considerable support for this assertion in the judgment of this court in Hoh Kiang Ngan (supra ), at p. 707 (CLJ); p. 387 (MLJ):
Now, it is well-settled that the Act is a piece of beneficent social legislation by which Parliament intends the prevention and speedy resolution of disputes between employers and their workmen. In accordance with well-settled canons of construction, such legislation must receive a liberal and not a restricted or rigid interpretation.
(emphasis added)
[35] At p. 708 (CLJ); p. 388 (MLJ), this court cited with approval the following dictum of Bhagwati J in Workmen of Indian Standards Institution v. Management of Indian Standards Institution (1976) 1 LLJ 36 at p. 43, with which we agree and adopt, as follows:
[I]t is necessary to remember that the Industrial Disputes Act 1947 is a legislation intended to bring about peace and harmony between management and labour in an 'industry' so that production does not suffer and at the same time, labour is not exploited and discontented and, therefore, the tests must be so applied as to give the widest possible connotation to the term 'industry'. Whenever a question arises whether a particular concern is an 'industry', the approach must be broad and liberal and not rigid or doctrinaire. We cannot forget that it is a social welfare legislation we are interpreting and we must place such an interpretation as would advance the object and purpose of legislation and give full meaning and effect to it in the achievement to (sic) its avowed social objective. (emphasis added)
[36] From the above, we would summarise the principles on the interpretation of social legislation as follows:
(i) Statutory interpretation usually begins with the literal rule. However, and without being too prescriptive, where the provision under construction is ambiguous, the courts will determine the meaning of the provision by resorting to other methods of construction foremost of which is the purposive rule (see the judgment of this court in All Malayan Estates Staff Union v. Rajasegaran & Ors [2006] 4 CLJ 195; [2006] 6 MLJ 97).
(ii) The literal rule is automatically displaced by the purposive rule when it concerns the interpretation of the protective language of social legislation.
(iii) For the avoidance of doubt, it is important to emphasise that even where a term or provision of a social legislation or a statutory contract enacted thereunder is literally clear or unambiguous, the court no less shoulders the obligation to ensure that the said term or provision is interpreted in a way which ensures maximum protection of the class in whose favour the social legislation was enacted.
[37] Having regard to the above principles, we cannot apply the literal rule to arrive at the simplistic conclusion that the date of calculation of the LAD runs from the date printed in the scheduled contract. Our reluctance to do so does not mean that we are "rewriting" the bargain between the parties, instead we are construing the scheduled contract in accordance with the statutory protections afforded by Parliament. At this juncture, it is perhaps appropriate that we analyse the legal developments in respect of booking fees to appreciate the intention of Parliament with respect to such a practice.
[40] The Bill was passed and it now exists as the HDA 1966. Speaking specifically in the context of booking fees, deposits or any other labels that may be used, it is quite clear that this very issue was one of the main reasons why the HDA 1966 was passed. The Honourable Minister's words - "legislative measures should be taken to protect the people from bogus and/or unscrupulous housing developers. Hence this Bill." - speak for themselves.
[49] Given the clear legislative intent, it follows that we are unable to read the scheduled contracts in these appeals literally. The legislative aim here is that any payment collected must be in accordance with the terms of the statutory contract of sale. Accordingly, to give effect to this legislative intent and in light of the collective status of the HDA 1966 and HDR 1989 as social legislation, it follows that where this illegal practice of booking fee is afoot, the date of the contract cannot be taken to mean the date printed in the scheduled contracts. Otherwise, this court would be condoning the developers' attempt in this case to bypass the statutory protections afforded to the purchaser by the legislative scheme put in place.
[130] The courts will not countenance the bypassing of statutory safeguards meant to protect the purchasers. To that extent, where the developers act in contravention of the law, they have to accept the resulting consequences.
SKS SOUTHERN FC (2023)
Per Harmindar Singh Dhaliwal FCJ delivering the judgment of the court:
(1) The HDA was enacted as a piece of social legislation to protect house buyers. With that in mind, any term or provision in the statute must be interpreted in a way which ensures maximum protection for the house buyers against the developer. It was therefore imperative that ss. 16M and 16Q of HDA be interpreted in such a way as to provide protection of house buyers in keeping with the intention of Parliament. Section 16M of the HDA provides that the Tribunal shall have the jurisdiction to determine a claim where the total amount in respect of which an award of the tribunal was sought did not exceed RM50,000. However, s. 16Q of the HDA provides that the claims may not be split, nor more than one claim brought, in respect of the same matter against the same party for the purpose of bringing it within the jurisdiction of the Tribunal. (paras 14 & 15 )
[14] In any discussion on the HDA 1966, it is necessary to allude to the purpose and objective of the legislation. It is beyond doubt that the HDA 1966 was enacted as a piece of social legislation to protect house buyers. With that in mind, any term or provision in the statute must be interpreted in a way which ensures maximum protection for the house buyers against the developer. (See Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan Dan Kerajaan Tempatan & Anor And Other Appeals [2020] 1 CLJ 162and PJD Regency Sdn Bhd v. Tribunal Tuntutan Pembeli Rumah & Anor And Other Appeals [2021] 2 CLJ 441; [2021] 2 MLJ 60).
[15] It is therefore imperative that ss. 16M and 16Q of HDA 1966 be interpreted in such a way as to provide protection of house buyers in keeping with the intention of Parliament. Now, s. 16M of the HDA 1966 provides that the Tribunal shall have the jurisdiction to determine a claim where the total amount in respect of which an award of the Tribunal is sought does not exceed RM50,000. We noted that the words "a claim" and not "all the claims" are used in this section. However, s. 16Q of the HDA 1966 provides that the claims may not be split, nor more than one claim brought, in respect of the same matter against the same party for the purpose of bringing it within the jurisdiction of the Tribunal. We also noted that the word "matter", instead of "property" or "housing accommodation", has been used in this section, the significance of which will become apparent in the discussion that follows.
OBATA FC (2024)
[130] In its wisdom the Legislature enacted the HDA and the Minister in charge of Housing and Local Government made the Regulations pursuant to the HDA prescribing the standard form of agreement and the requirement for approval before any changes could be made to the prescribed agreement. Until Ang Ming Lee, approval was mandatory before any amendments or variations could be implemented. Some applications were allowed and some were not. This was to ensure that any extended time of completion will be regulated and monitored to
ensure that housing developers will deliver vacant possession.
In the appeals before us the developers had sought for approval prior to executing the SPAs.
[131] The Federal Court in Dream Property Sdn Bhd v. Atlas
Housing Sdn Bhd [2015] 2 MLJ 441 recognised the principle of unjust enrichment under Malaysian law. The Federal Court said that the most important question to ask is whether it is unjust for the plaintiff to retain the benefit and considered both the English approach and the civilian.
[132] Have the purchasers/house buyers benefitted pre-Ang Ming Lee? In this regard it is important to keep in mind of the facts that the purchasers, Obata and Vignesh had agreed to the extended completion period in the respective SPAs, vacant possession was delivered and LAD fully paid by the developer and they have accepted the LAD payment as full and final settlement. They did not suffer any losses. No doubt there was a delay but they have benefited from the approved extended time of completion; the certainty of payment of LAD and the delivery of vacant possession of the property that they had purchased. If the appeals are decided in favour of the purchasers it would result in unjust enrichment at the expense of the developers, in these appeals, Prema.