Federal Court allows home buyers’ claim of RM3.2 million
KOTA KINABALU: After an 18year bid for justice, 46 aggrieved house buyers of Taman Bukit Saujana (Springfield Homes) here have finally won the battle.
On April 22, the Federal Court upheld the Court a Appeal judgement by allowing the claims of the home buyers against the directors of the developer company, Yusen Jaya Sdn Bhd, who constructed the houses.
As it stands, the directors are to pay the 46 home buyers a sum of RM3.2 million excluding interest of 5 per cent from September 14, 2015 to the date of full payment.
The decision was reached by Justices Dato’ Rhodzariah Bujang, Datuk Harmindar Singh Dhaliwal and Dato’ Zabariah Mohd Yusof, and underscores the significance of the guarantee provided by directors of developer companies to the Controller of Housing under the present Schedule A of the Housing Development (Control & Licensing) Rules 2008.
This decision means that directors must not only guarantee the completion of the housing development, but they must also indemnify the home buyers for all losses and damages the home buyers suffer as a result of the breach of obligations by the developer company or the failure to complete the housing development within the stipulated time for completion.
The home buyers were represented by lawyers Dato’ Malik Imtiaz Sarwar, Datuk Alex Decena and Jordan Kong, while the directors were represented by lawyers Dato’ Cyrus Das, Colin Lau, Baldev Singh and Kelvin Wong.
The 46 home buyers’ claims go all the way back in 2006 when they first sought the help of lawyer Christina Liew of Messrs CJ Liew & Co against Yusen Jaya Sdn Bhd for liquidated and ascertained damages for breach of contract for late delivery and defects in the houses.
After a full trial in the High Court before Justice David Wong Dak Wah (as he then was), the High Court entered judgement in favour of the home buyers in 2011 for the total sum of RM4.6 million in compensation for negligence and breach of contract.
Yusen Jaya Sdn Bhd, however, failed to satisfy this judgement. As a result, the home buyers sought the assistance of Liew (now Datuk and Minister of Tourism, Culture and Environment), who approached the then Minister of Housing and Local Government, Datuk Seri Panglima Haji Hajiji bin Haji Noor (now Chief Minister of Sabah) in 2013 for a solution. Hajiji directed the Controller of Housing to do the needful. The Controller called upon a bank guarantee of RM1.3 million furnished by the developer as security deposit, and thereafter released the sum to the home buyers.
The Controller also granted the home buyers a legal assignment of its rights under the guarantee provided by the directors of Yusen Jaya Sdn Bhd in which the directors guaranteed to complete constructing the houses on time and to indemnify the home buyers against all losses and damages suffered by them arising from the breach of obligations by the company.
Having obtained this assignment, the home buyers commenced a new lawsuit in the Kota Kinabalu High Court against the directors, seeking to enforce the guarantee against them (directors) and claim for the remaining outstanding sum of RM3.2 million. The High Court dismissed the home buyers’ claims in 2020 but this was overturned by the Court of Appeal in September 2022 when the court allowed the home buyers’ claims against the directors for RM3.2 million.
On appeal, the Federal Court dismissed the directors’ appeal and affirmed the decision of the Court of Appeal on April 22, 2024.
Spokesmen for the home buyers, Chin Yap On and Yong Sai Khuing described their legal victory as a “miracle”, saying every cloud has a silver lining, and ultimately, good would triumph over evil.
“It was a tough journey for all of us. At least five house buyers have since gone to their rest. Nevertheless, we hail the Federal Court’s decision as one that is good for future generations of house buyers. It has wide ramifications for the construction industry, especially for those developers who participate in housing developments.
“It serves to further improve protection afforded to home buyers and seeks to protect them from unscrupulous developers,” said the duo, while expressing their gratitude to their lawyers for the services rendered in championing their (house buyers’) rights for all these years.
According to Chin and Yong, the house buyers’ “nightmare” began as far back as 2006 after they had discovered that there were construction defects, much to their dismay.
“When we first moved into our new homes at the end of 2005, we found that certain specifications in our Sales and Purchase (S&P) Agreement were not adhered to. For instance, we were supposed to have solid doors. Instead, we were shortchanged by being given plywood doors. Likewise, the bathroom floor upstairs was not waterproof, so the water leaked and dripped on the ground floor.
“That was when we decided to engage lawyer (Datuk) Christina Liew to represent us,” they recalled.
Acting for the plaintiffs, Liew filed two suits, the first in 2006 against the developer for negligence and breach of contract in the construction of Springfield Homes, and in 2015 for execution of the judgement sum (RM4.6 million).
“It was a landmark decision when the High Court awarded us RM4.6 million in damages in 2011, and four years later, we commenced new legal action against the developer to recover the judgement sum.
“When the High Court dismissed our claim against the developer in 2020, we appealed to the Court of Appeal which unanimously allowed our appeal against the decision of the High Court in 2022.
“However, the developer appealed to the Federal Court against the decision of the Court of Appeal. Thank God, the Federal Court ruled in our favour this week, and our predicament has now come to an end,” said Chin and Yong.