(Messrs R. Jayabalan)
The Federal Court had held in Ang Ming Lee & Ors v. Menteri Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan [2020] 1 CLJ 162 that reg. 11(3) of the Regulations that empowered the Controller of Housing to vary, amend or modify the terms of the prescribed contracts of sale in the Act was ultra vires the Act and that such powers may only be exercised by the Minister personally. The Federal Court decision was given on 26.11.2019.
Hot on the heels of that decision was the issue of whether the Federal Court decision would apply against the Controller’s approvals that were given before the decision. The prevailing view was that as the Federal Court did not issue an order of prospectivity of the decision, the general rule of retrospectivity of court decisions would apply i.e a court decision is always applied retrospectively unless there is a specific order that the decision is to be binding only on the instant case and as against future cases. This was the approach also applied by the Federal Court in Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat [2017] 3 MLJ 561 when holding that s. 40D of the Land Acquisition Act 1960 was ultra vires the Constitution and further ordered that the decision was to have prospective effect only.
After Ang Ming Lee, this issue of retrospectivity of Ang Ming Lee had been consistently raised in similar claims. The purchasers invariably argued that the decision has retrospective effect whereas the developers argued that to hold Ang Ming Lee to have retrospective effect would be grossly unfair to the developers as the Controller’s approval had been obtained at a time when the law was still deemed as valid and the developers should not be penalised due to the changes in law following the Federal Court decision. The High Courts were not moved and have almost consistently held that Ang Ming Lee to have retrospective effect as there was no order of prospectivity issued.
As this was a recurring issue with wide implications and of general public interest, there was hope and expectation for a decision from the Court of Appeal or Federal Court to bring an end to this issue.
We acted for a purchaser whose agreement in Schedule H also involved Controller’s approval that was given before the decision in Ang Ming Lee; the approval was in fact given even before the agreement was executed. The purchaser had sought rescission of the agreement and refund of the monies paid and for expenses incurred. It was also contended that the agreement was null and void for being in breach of the Act from its inception. The purchaser had relied on Ang Ming Lee and the principles of retrospectivity of decision. The developer took the contrary position and sought to distinguish Ang Ming Lee on the grounds that here, the approval was given before the agreement, unlike in Ang Ming Lee and relied on the doctrine of severability to save the agreement from being held null and void. The High Court held that Ang Ming Lee has retrospectivity effect and the Controller’s approval here given on 20.5.2015 was not valid. The agreement was also held as null and void and rescission was allowed. The decision may be seen at [2020] 6 AMR 346.
The developer filed appeal to the Court of Appeal and raised similar contentions. The appeal was unanimously dismissed on 5.4.2021. The developer then filed application for leave to appeal to the Federal Court. The questions proposed also included an invitation to revisit Ang Ming Lee and to clarify the position on whether the decision was to be applied retrospectively and the Court to consider the implications of such retrospectivity to the construction industry. The application for leave was recently dismissed. It is also worthy to note that two of the judges who heard the application for leave was also in the Federal Court coram that delivered the decision in Ang Ming Lee.
From this it appears quite clearly that Ang Ming Lee is indeed to be applied retrospectively and that there should not be any doubt on this anymore. It also makes common sense that a law that is found to be illegal should be deemed illegal at all times since its inception. The retrospective application also serves the social objective of the Act to protect house buyers – all buyers at all times!
Messrs R. Jayabalan
