Federal Court Ruled in Favour of Country Garden Danga Bay in Landmark Decision

Country Garden Danga Bay
Country Garden Danga Bay

The Federal Court has allowed the appeal filed by property developer Country Garden Danga Bay Sdn Bhd to quash the compensation given by the Tribunal for Homebuyer Claims to a Singaporean house buyer in respect of a claim brought by the purchaser of the Danga Bay development.

The Federal Court’s decision today is a landmark decision concerning the jurisdiction of the Tribunal for Homebuyer Claims, which the Federal Court found to be confined to the statutory sale and purchase agreements.

“The Federal Court has ruled that the Tribunal for Homebuyer Claims can only decide on claims based upon the express terms of the sale and purchase agreement and not based on the purchaser’s expectations of the unit purchased corresponding with a display model at the developer’s showroom,” said Leonard Yeoh from Messrs Tay and Partners, counsel for Country Garden.

The buyer was ordered by the court to pay RM30,000 in costs to the developer. The buyer had signed S&P agreement with Country Garden in 2013, to purchase a condominium unit in the project but later claimed that the unit should have a covered balcony but when the vacant possession was delivered. The buyer subsequently filed a claim with the Tribunal for Homebuyer Claims claiming for RM50,000 as compensation for the wrong unit that was given to him.

In 2018, the Tribunal for Homebuyer Claims awarded the buyer a compensation of RM50,000, prompting the developer to file a judicial review in the High Court.

“The Federal Court also ruled that once the homebuyer had taken possession, inspected and renovated the premises, he is estopped in law to maintain a claim that he has been allotted the wrong unit by the developer,” added Leonard.

This decision from the Federal Court has led to greater clarity on the nature of cases that the Tribunal is empowered to decide between homebuyers and developers. The National House Buyers Association (HBA) and Real Estate & Housing Developers’ Association (REHDA) both held watching briefs during the appeal.