IN THE FEDERAL COURT OF MALAYSIA AT PUTRAJAYA

(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 01(f)-38-10/2018(W)

BETWEEN

ANG MING LEE & 34 OTHERS ... APPELLANTS

AND

1. MENTERI KESEJAHTERAAN BANDAR,

PERUMAHAN DAN KERAJAAN
TEMPATAN
2. PENGAWAL PERUMAHAN, KEMENTERIAN
KESEJAHTERAAN BANDAR,
PERUMAHAN DAN KERAJAAN TEMPATAN ... RESPONDENTS

HEARD TOGETHER WITH CIVIL APPEALS

[IN THE FEDERAL COURT OF MALAYSIA AT PUTRAJAYA

(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 01(f)-41-10/2018(W)

BETWEEN

SIA KWEE SIAM & 35 OTHERS … APPELLANTS

AND

1. MENTERI KESEJAHTERAAN BANDAR,

PERUMAHAN DAN KERAJAAN TEMPATAN
2. PENGAWAL PERUMAHAN, KEMENTERIAN
KESEJAHTERAAN BANDAR,
PERUMAHAN DAN KERAJAAN TEMPATAN … RESPONDENTS

1
 [IN THE FEDERAL COURT OF MALAYSIA AT PUTRAJAYA
(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 02(f)-95-10/2018(W)

BETWEEN

BHL CONSTRUCTION SDN BHD … APPELLANT

AND

ANG MING LEE & 34 OTHERS … RESPONDENTS

[IN THE FEDERAL COURT OF MALAYSIA AT PUTRAJAYA

(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 02(f)-96-10/2018(W)

BETWEEN

BHL CONSTRUCTION SDN BHD … APPELLANT

AND

SIA KWEE SIAM & 35 OTHERS … RESPONDENTS

[IN THE FEDERAL COURT OF MALAYSIA AT PUTRAJAYA

(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 02(f)-97-10/2018(W)

BETWEEN

ANG MING LEE & 34 OTHERS … APPELLANTS

AND

BHL CONSTRUCTION SDN BHD … RESPONDENT

2
 [IN THE FEDERAL COURT OF MALAYSIA AT PUTRAJAYA
(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 02(f)-98-10/2018(W)

BETWEEN

SIA KWEE SIAM & 35 OTHERS … APPELLANTS

AND

BHL CONSTRUCTION SDN BHD … RESPONDENT

(Company No: 665759-W)

[In the matter of the Court of Appeal at Putrajaya

Civil Appeal No: 01(f)-41-10/2018(W); No: 01(f)-95-10/2018(W); No: 01(f)-
96-10/2018(W); No: 01(f)-97-10/2018(W); No: 02(f)-98-10/2018(W)

Between

BHL Construction Sdn Bhd ... Appellant

(Company No: 665759-W)

and

Ang Ming Lee and 34 others ... Respondents]

3
 [In the Matter of High Court of Malaya at Kuala Lumpur
Civil Suit NO: WA-25-124-07/2016

In the matter of the Housing

Development
(Control and Licensing) Act 1966

And

In the matter of the Housing

Development (Control and Licensing)
Regulations 1989

And

In the matter of Order 53, Rules of Court

2012

And

In the matter of the decision made by

the Housing Controller by way of the
letter dated 17.11.2015 to amend the
time frame to deliver vacant possesion
in sale and purchase agreements
signed between BHL Construction Sdn
Bhd and the buyers of Sri Istana
Condominium.

Between

Ang Ming Lee and 34 others … Applicants

and
1. Menteri Kesejahteraan Bandar,
Perumahan Dan Kerajaan Tempatan
2. Pengawal Perumahan
Kementerian Kesejahteraan Bandar,

4
 Perumahan dan Kerajaan Tempatan

3. BHL Constructions Sdn Bhd

(Company No: 665759-W) ... Respondent]

CORAM:

TENGKU MAIMUN BINTI TUAN MAT, CJ

AZAHAR BIN MOHAMED, FCJ (now CJM)
ALIZATUL KHAIR BINTI OSMAN KHAIRUDDIN, FCJ
IDRUS BIN HARUN, FCJ
NALLINI PATHMANATHAN, FCJ

JUDGMENT OF THE COURT

Introduction

[1] There were six (6) related appeals before us which were heard
together. Four (4) appeals were filed by the purchasers of individual
condominium units in Sri Istana Condominium (“the project”). The other
two appeals were filed by the developer of the project, BHL Construction
Sdn Bhd. The issue in these appeals concerns regulation 11(3) of the
Housing Development (Control and Licensing) Regulations 1989 (“the
Regulations”).

5
Background Facts

[2] By a Sale and Purchase Agreement dated 3 May 2012 (“the SPA”),
entered into between the developer and the purchasers, it was agreed that
the delivery of vacant possession of the units shall be thirty-six (36)
months from the date of signing of the respective SPAs. The SPAs were
made pursuant to the statutorily prescribed form under Schedule H of the
Regulations. Subparagraph 25(2) of Schedule H provides that if the
developer fails to deliver vacant possession within 36 months, the
developer shall be liable to pay the purchaser liquidated damages (“LAD”).

[3] Vide a letter dated 20.10.2014, the developer applied for an

extension of time for the delivery of vacant possession of the units to the
purchasers. The application for the extension of time was made to the
Controller of Housing (“the Controller”), pursuant to regulation 11(3) of the
Regulations, which reads:

“(3) Where the Controller is satisfied that owing to special

circumstances or hardship or necessity compliance with any of the provisions
in the contract of sale is impracticable or unnecessary, he may, by a certificate
in writing, waive or modify such provisions:

Provided that no such waiver or modification shall be approved if such

application is made after the expiry of the time stipulated for the handing over
of vacant possession under the contract of sale or after the validity of any
extension of time, if any, granted by the Controller.”.

[4] Briefly, the reasons relied upon by the developer in support of its
application for extension of time were:

6
 (i) non-stop complaints by nearby residents due to extended
working hours;
(ii) stop work orders issued by the local authorities; and
(iii) investigation conducted on the piling contractor.

[5] By a letter dated 24.10.2014, the Controller rejected the developer’s

application for extension of time.

[6] Dissatisfied with the decision of the Controller, the developer, vide a
letter dated 28.10.2014, appealed to the Minister of Urban Wellbeing,
Housing and Local Government (“the Minister”). The appeal was made
pursuant to regulation 12 of the Regulations which provides:

“Notwithstanding anything to the contrary in these Regulations, any

person aggrieved by the decision of the Controller … may within fourteen (14)
days after been notified of the decision of the Controller, appeal against such
decision to the Minister; and the decision of the Minister made thereon shall be
final and shall not be questioned in any court.”.

[7] The developer’s appeal for the extension of time was purportedly
allowed by the Minister. By a letter dated 17.11.2015, the Minister
purported to grant an extension of twelve (12) months to the developer.
The developer thus had 48 months to deliver vacant possession of the
condominium units to the purchasers instead of the statutorily prescribed
period of 36 months. As a result of the extension of time, the purchasers
were unable to claim for the LAD as provided for in the SPAs.

7
[8] Aggrieved by the decision of the Minister in granting the extension
of time, the purchasers filed an application for judicial review against the
Minister; the Controller and the developer.

Proceedings in the High Court

[9] The judicial review application was premised on the following

grounds:

(i) that regulation 11(3) of the Regulations is ultra vires the Housing
Development (Control and Licensing) Act 1966 (“the Act”);
(ii) that the decision made by the Controller in refusing the extension
of time was non-appealable and that the Minister had no power
to hear the appeal by the developer under regulation 12;
(iii) that the Controller and/or the Minister had denied the rights of the
purchasers to be heard, and thus the decision made was null and
void;
(iv) that the Minister took into account irrelevant matters in arriving at
his decision to allow the extension of time; and
(v) that the letter dated 17.11.2015 purportedly allowing the
extension of time was signed by one Jayaseelan a/l Navaratnam,
on behalf of the Controller and not on behalf of the Minister.

[10] The purchasers prayed, inter alia for the following reliefs:

(a) an order of certiorari to quash the decision of the Controller dated

17.11.2015;
(b) a declaration either jointly or in the alternative that –

8
 (i) the letter dated 17.11.2015 signed by Jayaseelan a/l K
Navaratnam on behalf of the Controller is invalid and is beyond
the jurisdiction stipulated in the Act; and
(ii) regulation 11(3) of the Regulations is ultra vires the provisions
of the Act.

[11] The High Court allowed the judicial review application and granted
the orders prayed for by the purchasers. In essence, the High Court ruled
that –

(i) the Act is a piece of social legislation intended to protect the

interests of the purchasers;
(ii) section 17A of the Interpretation Acts 1948 and 1967 expressly
provides that in interpreting a provision of an Act, a construction
that would promote the purpose or object underlying the Act shall
be preferred;
(iii) the Controller has no power to waive or modify the prescribed
contract of sale under regulation 11(3) of the Regulations which
extinguish the rights of the purchasers to claim LAD;
(i) regulation 11(3) is ultra vires the Act; and
(ii) the decision dated 17.11.2015 is null and void.

[12] Dissatisfied with the decision of the High Court, the developer
appealed to the Court of Appeal.

Proceedings in the Court of Appeal

[13] Before the Court of Appeal, parties canvassed inter alia the following
issues:

9
 (i) whether regulation 11(3) of the Regulations is ultra vires the Act;
(ii) whether the letter of 17.11.2015, in which the extension of 12
months was granted to complete the project, was made without
jurisdiction and is therefore invalid and of no effect; and
(iii) whether the purchasers ought to be given a right of hearing prior
to the decision made by the Controller and/or the Minister
granting the developer an extension of time to complete the
project.

[14] On the first issue, the Court of Appeal found that regulation 11(3),
being a provision designed to regulate and control the terms of the SPA
as envisaged under paragraph 24(2)(e) of the Act, is not ultra vires the
Act. The Court of Appeal noted that the Controller has wide powers under
the Act and hence dismissed the purchasers’ contention that the power to
modify or waive the contract must be exercised only by the Minister and
cannot be delegated to the Controller. The Court of Appeal accordingly
held that the Controller has the power to exercise his discretion as granted
under regulation 11(3), to waive or modify the terms and conditions of the
contract of sale.

[15] On whether the letter dated 17.11.2015 was invalid and was of no
effect, the Court of Appeal noted that the said letter was signed by
Jayaseelan a/l K Navaratnam on behalf of the Controller and that there
was no indication from the face of the letter that this decision was
conveyed on behalf of the Minister or that the signatory of the letter was
acting on the authority of the Minister. The Court of Appeal stated that ‘to
muddy the waters further’, the letter indicated that the decision was made
pursuant to regulation 11 instead of regulation 12.

10
[16] The Court of Appeal further stated that “The impression gained from
considering the whole of the letter is that the appeal from the decision of
the Controller was decided by the Controller himself which, to put it mildly,
was wholly untenable. Under Regulation 12, any person aggrieved with
the decision of the Controller under Regulation 11(3) can appeal to the
Minister and the decision of the Minister is final and shall not be
questioned in any court. Since the Minister did not file any affidavit to
provide some clarity, the contention that the Minister was not the one who
made the decision has merit and cannot be dismissed lightly.”. It was
accordingly held by the Court of Appeal that the order as contained in the
letter of 17.11.2015 was made without jurisdiction and was ultra vires the
Act and that the order in the said letter was a nullity and of no effect.

[17] On whether the purchasers were entitled to a right to be heard, the

Court of Appeal agreed with the submission for the purchasers that as
their rights to claim damages in the event of delay would be adversely
affected or even extinguished, the purchasers must be given an
opportunity to be heard prior to any decision made on the extension of
time. Since no such right was afforded to the purchasers, the Court of
Appeal held that the decision was null and void and was thus set aside.

[18] Aggrieved by the decision of the Court of Appeal, both the

purchasers and the developer applied for leave to appeal to this Court.

Proceedings in the Federal Court

[19] Leave to appeal was granted to the purchasers on the following

questions of law:

11
 (i) whether the Housing Controller has the power to waive or modify
any provision in the Schedule H Contract of Sale as prescribed
by the Minister under the Housing Development (Control and
Licensing) Act 1966 (“Question 1”);
(ii) whether section 24 of the Housing Development (Control and
Licensing) Act 1966 confers power on the Minister to make
regulations for the purpose to delegate the power to waive or
modify the Schedule H Contract of Sale to the Housing Controller
(“Question 2”);
(iii) whether regulation 11(3) of the Housing Development (Control
and Licensing) Regulations 1989 is ultra vires the Housing
Development (Control and Licensing) Act 1966 (“Question 3”).

[20] The developer was granted leave to appeal on the following

questions of law:

(i) whether the letter granting an extension of time after an appeal

pursuant to Regulation 12 of the Housing Development (Control
and Licensing) Regulations 1989 must be signed personally by
the Minister and whether the Minister could delegate his duties
(signing of the letter granting the extension of time) to an officer
in the Ministry of Urban, Wellbeing, Housing and Local
Government of Malaysia (“Question 4”);
(ii) whether the Minister having taken into consideration the interest
of the purchaser is obliged to afford the purchasers a hearing
prior to the Minister granting the extension of time albeit there is
no such provision or requirement in the Housing Development
(Control and Licensing) Act 1966 or Housing Development
(Control and Licensing) Regulations 1989 (“Question 5”).

12
The Parties’ Contention

[21] The submission for the developer may be summarised as follows:

(i) that the Minister has the absolute discretion to make a

decision in respect of an appeal as per the specific provision
of regulation 12;
(ii) that the Minister’s decision was anchored upon a thorough
consideration of all the facts and relevant circumstances,
especially the ‘protection of the interest of the purchasers and
for matters connected therewith’ as stated in the Preamble to
the Act;
(iii) that the main objective of the Act is to ensure that housing
units are completed and delivered to the purchasers;
(iv) that the Minister’s decision to allow the extension of time for
delivery of vacant possession, enabled the developer to
complete the development and deliver vacant possession to
the purchasers;
(v) that the rehabilitation of abandoned housing projects is a
complex process and could take a long time; and
(vi) that an abandoned development would cause greater
hardship to the purchasers, which far outweighs the hardship
of not being able to claim damages for late delivery, if an
extension is granted.

[22] For the purchasers, the gist of the arguments were:

13
 (i) under the Act, both the Minister and the Controller have
separate and independent role;
(ii) as a general rule, the powers of the Minister may not be
delegated to the Controller unless it is expressly provided
under the Act;
(iii) section 24(2) of the Act expressly confers power to the
Minister to make regulation for the purpose of prescribing the
statutory form for the contract of sale;
(iv) the Minister is also authorised to prescribe regulation for the
purpose of regulating the terms and conditions of the contract
of sale between the developer and purchasers;
(v) the word ‘regulate’ is not defined in the Act;
(vi) the word ‘regulate’ ordinarily means ‘to control or to govern’;
and
(vii) it was not the intention of Parliament to authorise the Minister
to delegate the power to prescribe and to control and govern
to the Controller.

Our Decision

[23] Having read the appeal records and the written submissions filed by
the purchasers and the developer and having heard the oral submissions
of learned counsel for the purchasers and the developer, respectively as
well as counsel holding watching briefs for the Real Estate and Housing
Developers’ Association (REHDA) Malaysia and the Bar Council (both
REHDA and the Bar Council supported the position taken by the
developer), we answer the first two questions in the negative and the third

14
question in the affirmative. We find no necessity to answer questions four
and five. Our reasons are set out below.

The validity of regulation 11(3) of the Regulations

[24] Questions 1, 2 and 3 concern the validity of regulation 11(3) of the

Regulations and as such, we will consider them together. We begin by
setting out the following provisions of the Act:

“4. Appointment of Controller, Deputy Controllers, Inspectors and other

officers and servants.

(1) For the purpose of this Act, the Minister may appoint a Controller of
Housing and such number of Deputy Controllers of Housing, Inspectors of
Housing and other officers and servants as the Minister may deem fit from
amongst members of the civil service.

11. Powers of the Minister to give directions for the purpose of safeguarding
the interests of purchasers.

(1) Where on his own volition a housing developer informs the Controller or
where as a result of an investigation made under section 10 or for any other
reason the Controller is of the opinion that the licensed housing developer
becomes unable to meet his obligation to his purchasers or is about to suspend
his building operations or is carrying on his business in a manner detrimental to
the interests of the purchasers, the Minister may without prejudice to the
generality of the powers of the Minister to give directions under section 12 for
the purpose of safe-guarding the interests of the purchasers of the licensed
housing developer –

(a) …

15
 (b) …
(c) …
(d) …
(e) take such action as the Minister may consider necessary in the
circumstances of the case for carrying into effect the provisions of this
Act.

24. Power to make regulations

(1) Subject to this section, the Minister may make regulations for the
purpose of carrying into effect the provisions of this Act.

(2) In particular and without prejudice to the generality of

the foregoing power, the regulation may —

(a) …
(b) …
(c) prescribe the form of contents which shall be used
by a licensed housing developer, his agent,
nominee or purchaser both as a condition of the
grant of a license under this Act or otherwise;
(d) …
(e) regulate and prohibit the conditions and terms of
any contract between a licensed housing
developer, his agent or nominee and his
purchaser;”.

[25] Section 24(2) of the Act empowers the Minister to prescribe the
statutory form of contract for the sale and purchase agreement between
the developer and the purchasers and to regulate the terms and conditions
of the contract of sale. Pursuant to subsection 24(2) of the Act, the Minister
promulgated the Regulations prescribing the statutory form for the

16
contract of sale in Schedule H together with the conditions and terms of
such contract.

[26] Having prescribed the Statutory Form H and the terms and
conditions for the contract of sale, the Minister by regulation 11(3) of the
Regulations then empowers the Controller to waive or modify the
conditions and terms of the contract of sale as prescribed in Schedule H.
This begs the question whether by empowering the Controller to waive or
modify the conditions and terms of the contract, the Minister has exceeded
the scope of the authority conferred on him by the legislature? In other
words, by empowering the Controller, through regulation 11(3), has there
been an act of sub-delegation by the Minister to the Controller which is
ultra vires the Act?

[27] De Smith’s Judicial Review 7th Edition, stated as follows on the rule
against delegation:

“A discretionary power must, in general, be exercised only by the public

authority to which it has been committed. It is a well-known principle of law that
when a power has been conferred to a person in circumstances indicating that
trust is being placed in his individual judgment and discretion he must exercise
that power personally unless he has been expressly empowered to delegate it
to another. … it is a rule of construction which makes the presumption that “a
discretion conferred by statute is prima facie intended to be exercised by the
authority on which the statute has conferred it and by no other authority, but this
presumption may be rebutted by any contrary indications found in the language,
scope or object of the statute.”.

17
[28] Sir William Wade & Christopher Forsyth in the Administrative Law
11th Edition, stated:

“An element which is essential to the lawful exercise of power is that it should
be exercised by the authority upon whom it is conferred, and by no one else.
The principle is strictly applied, even where it causes administrative
inconvenience, except in cases where it may reasonably be inferred that the
power was intended to be delegable. Normally the courts are rigorous in
requiring the power to be exercised by the precise person or body stated in the
statute, and in condemning as ultra vires action taken by agents, sub-committee
or delegates, however expressly authorised by the authority endowed with the
power.

The maxim delegatus non potest delegare is sometimes invoked as if it

embodied some general principle that made it legally impossible for statutory
authority to be delegated. In reality there is no such principle; the maxim plays
no real part in the decision of cases, though it is sometimes used as a
convenient label. In the case of statutory powers, the important question is
whether on a true construction of the Act, it is intended that a power conferred
upon A may be exercised on A’s authority by B. The maxim merely indicates
that this is not normally allowable. … The vital question in most cases is whether
the statutory discretion remains in the hands of the proper authority, or whether
some other person purports to exercise it.”.

[29] In Palmco Holdings Bhd v Commissioner of Labour & Anor [1986] 1

MLJ 492, the issue relates to section 60J(1) of the Employment Act 1955

18
and regulation 8(2) of the Employment (Termination and Lay-Off Benefits).
Section 60J(1) reads:

“The Minister may, by regulation made under the Act, provide for the entitlement
of employees to, and for the payment by the employer of –

(a) termination benefits;

(b) lay-off benefits;
(c) retirement benefits.”.

Whereas regulation 8(2) of the Employment (Termination and Lay-Off

Benefits) reads as follows:

“If the person by whom the business is to be taken over immediately after the
change occurs does not offer to continue to employ the employee in accordance with
paragraph (1), the contract of service of the employee shall be deemed to have been
terminated, and consequently, the person by whom the employee was employed
immediately before the change in ownership occurs and the person by whom the
business is taken over immediately after the change occurs shall be jointly and
severally liable for the payment of all termination benefits payable under these
Regulations.”.

[30] In Palmco Holdings (supra), the appellant had bought over the
business of a beach hotel in Penang from the Casuarina Beach Hotel Sdn
Bhd. It was agreed inter alia that the appellant would offer employment to
all existing employees of the hotel except five persons who had passed
the retirement age and were relatives of the family who were the former
owners of the hotel. The five persons applied to the Director of Labour for

19
termination benefits but the hearing of the application was adjourned to
enable the appellant to challenge the vires of regulation 8 of the
Employment (Termination and Lay-Off Benefits) Regulations, 1980. It was
argued that the regulation was ultra vires as it sought to impose liability on
persons other than employers and therefore contravened section 60(J)(1)
of the Employment Act 1955, which only enables the Minister to make
regulations for the payment of termination, lay-off and retirement benefits
by employers. The learned trial judge held that regulation 8 was not ultra
vires the Employment Act, 1955. The appellant appealed.

[31] In allowing the appeal, Hashim Yeop A. Sani S.C.J. said:

“The powers of the courts on the question of determining the vires of a

delegated legislation were summed up by Lord Greene M.R. in Carltona Ltd v
Commissioners of Works which was followed in Lewisham B.C. v Roberts and Minister
of Agriculture & Fisheries v Matthews where His Lordship said:

“All that the court can do is to see that the power which it is claimed to exercise
is one which falls within the four corners of the powers given by the legislature and to
see that the powers are exercised in good faith. Apart from that the courts have no
power at all to enquire into the reasonableness, the policy, the sense or any other
aspect of the transaction.”

What the court should do in the case of this nature are also clearly and precisely
explained by Lord Diplock in McEldowney v Forde where he said:

“Parliament makes law and can delegate part of its power to do so to some
subordinate authority. The courts construe law whether made by Parliament directly

20
or by a subordinate authority acting under delegated legislative powers. The view of
the courts as to whether particular statutory or subordinate legislation promotes or
hinders the common weal is irrelevant. The decision of the courts as to what the words
used in the statutory or subordinate legislation mean is decisive. Where the validity of
subordinate legislation made pursuant to powers delegated by Act of Parliament to a
subordinate authority is challenged, the court has a threefold task: first, to determine
the meaning of the words used in the Act of Parliament itself to describe the
subordinate legislation which that authority is authorised to make, secondly, to
determine the meaning of the subordinate legislation itself and finally to decide whether
the subordinate legislation complies with that description.’

….

The term ultra vires in relation to a delegated legislation can be interpreted in a

double sense. First it can mean that the rule or regulation in question deals with a
subject not within the scope of power conferred upon the delegated legislative
authority. Second, it can also mean that although the delegated legislation in question
deals with the proper subject it has gone beyond the limits prescribed by the parent
law. …

Section 60(J)(2) of the Employment Act provides that without prejudice to the
generality of sub-section (1) regulations made by virtue of sub-section (1) may provide
inter alia:

“(a) for the definition of the expression “termination benefits”, “lay-off

benefits”, or “retirement benefits”, as the case may be, and for the
circumstances in which the same shall be payable.”.

Basically the word “employer” in the Act means any person who has entered
into a contract of service to employ another person as an employee. In our view it is
clear that the powers conferred by section 60J(1) and (2) of the Act are not wide

21
enough to cover a person who is not an employer. The person by whom the business
is taken over immediately after the change occurs (these words appear in Regulation
8(2)) is not an employer as defined in the Act. The imposition of liability on that person
is never envisaged by the Parent Act. As in the case of Morton v Union Steamship Co.
of New Zealand Ltd. the purpose of the Act is to impose liability upon a set of persons
whereas the regulation purports to impose a liability upon another set of persons never
intended by the Legislature.”.

[32] Similar issue on delegation of power was dealt with by the Federal
Court in Palm Oil Research and Development Board Malaysia v Premium
Vegetable Oils Sdn Bhd [2004] 2 CLJ 265. Pursuant to the Palm Oil
(Research Cess) Order 1979 (“the 1979 Order”) made by the Minister
under the Palm Oil Research and Development Act 1979 (“the 1979 Act”),
the appellants imposed research cess (“cess”) on the respondent in
respect of crude oil extracted from oil palm fruits (“CPO”) and also in
respect of crude oil extracted from oil palm kernel (CPKO”). The
respondent did not dispute the imposition of cess on CPO but disputed
the imposition of cess on CPKO. It brought an action in the High Court for
a declaration that the appellants were not empowered to impose cess on
CPKO and for a refund of the money paid. It was contended by the
respondent that the 1979 Act and the 1979 Order made no reference to
crude oil extracted from oil palm fruits and seeds. The appellants, on the
other hand, contended that the kernel was part of the oil palm seed. As
such, they had the right to impose cess on the CPKO.

[33] The High Court ruled against the respondent. The decision of the
High Court was reversed by the Court of Appeal. The Court of Appeal held

22
that cess could only be imposed on CPO and not on CPKO. The
appellants obtained leave to appeal to the Federal Court.

[34] The central question before the Federal Court was whether the 1979
Order was ultra vires the parent statute, namely the 1979 Act. In
addressing the issue, Gopal Sri Ram FCJ said:

“To recapitulate, the first submission is that the 1979 Act does not authorise the
collection of cess from palm oil millers. To determine if there is merit in the complaint,
all that is necessary is to examine the Act itself. There is no dispute – indeed there
cannot be any – that the 1979 Act does not define the term “palm oil miller”. Section
14(1) by which Parliament delegates subsidiary law making authority to the Minister
reads as follows:

14(2) The Minister may, after consultation with the Board and with the Minister
of Finance, make orders for the imposition, variation or cancellation of a
research cess on palm oil; and the orders may specify the nature, amount
and rate and the manner of collection of the cess.

Be it noted that the section empowers the Minister, inter alia, to impose research cess
on palm oil, not on palm oil millers. The point of construction here is therefore
uncomplicated and straightforward. The 1979 Act did not give the Minister power to
make orders imposing a research cess on palm oil millers. And it is not open to this
court to read into the section an implied power enabling the Minister to do so. Such a
course would constitute unauthorised judicial legislation and a breach of the doctrine
of separation of powers enshrined in the Federal Constitution.

23
First, the 1979 Act does not authorise the imposition of the research cess upon palm
oil millers. Second, s 14 of the 1979 Act does not impose any liability upon oil palm
millers to pay research cess. Based on these matters it is my considered judgment
that the 1979 Order is ultra vires the 1979 Act. The 1979 Order is therefore null and
void and of no effect.”.

[35] Having in mind the principles enunciated in the above cited cases
on delegated legislation, we now proceed to ascertain the powers of the
Minister and the Controller under the Regulations, by undertaking the first
task as laid down in Mceldowney v Forde [1969] 2 ALL ER 1039, i.e. to
determine the meaning of the words used in the Act.

[36] By section 24(2)(e) of the Act, the Minister is empowered or given

the discretion by Parliament to regulate and prohibit the terms and
conditions of the contract of sale. As opined by the learned authors in De
Smith’s Judicial Review, a discretion conferred by statute is prima facie
intended to be exercised by the authority on which the statute has
conferred it and by no other authority, but the presumption may be
rebutted, by any contrary indication found in the language, scope or object
of the Act. In our view, having regard to the object and purpose of the Act,
the words “to regulate and to prohibit” in subsection 24(2)(e) should be
given a strict construction, in the sense that the Minister is expected to
apply his own mind to the matter and not to delegate that responsibility to
the Controller.

24
[37] The object of the Act has been highlighted in a string of authorities.
In S.E.A. Housing Corporation Sdn Bhd v Lee Poh Choo [1982] 2 MLJ 31,
Suffian L.P. said at pg. 34:

“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 a/l Jayaram [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:

25
 “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 sections 11 and 12 of the Act. Under section 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
section 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.

26
[42] We now move to the second task i.e. to determine the meaning of
the words in the Regulations. In this regard, the first point to observe is
that notwithstanding the prescribed time line under Form H for the
developer to complete the project, the Regulations provide for an
extension of time. As regards the extension of time, the Regulations
provide for a two tier structure. The first tier is found in regulation 11(3)
where at the first instance, the Controller is empowered to decide on an
application for extension of time. Once a decision is made by the
Controller, any aggrieved party may appeal to the Minister under
regulation 12, which is the second tier for the appeal process.

[43] It was argued for the developer that the Minister has delegated his
power to the Controller to make a decision under regulation 11(3). This
argument in our view cannot be sustained. If the Minister has delegated
his power to the Controller to make a decision under regulation 11(3),
there should not and could not be an appeal process from the decision of
the Controller to the Minister as it is akin to an appeal to the Minister
against his own decision. Regulation 12 on the appeal would be rendered
superfluous and redundant.

[44] Insofar as delegation of powers is concerned, we are mindful of

section 5 of the Delegation of Powers Act 1956, which reads:

“Where by any written law a Minister is empowered to exercise any

powers or perform any duties, he may, subject to section 11, by notification in
the Gazette delegate subject to such conditions and restrictions as may be

27
 prescribed in such notification the exercise of such powers or the performance
of such duties to any person prescribed by name or office.”.

[45] It must be noted that while section 5 expressly allows the Minister to
delegate his powers or duties to any person described by name or office,
such delegation must be made by notification in the Gazette. In the
present case, we observe that there is no notification published in the
Gazette which means that there is no delegation of powers by the Minister
to any other person of his duties under the Act pursuant to the Delegation
of Powers Act.

[46] In Therrien c. Quebec (Minister de la Justice) [2001] 2 R.C.S. 3

Gonthier J said:

“It is settled law that a body to which a power is assigned under its enabling
legislation must exercise that power itself and may not delegate it to one of its members
or to a minority of those members without the express or implicit authority of the
legislation, in accordance with the maxim hallowed by long use in the courts, delegatus
non potest delegare: ..”.

[47] Wills J in H Lavender & Sons v Minister of Housing and Local

Government [1970] 3 All ER 871, quashed a decision to refuse planning
permission within reservation area if the Minister of Agriculture objected.
His Lordship stated that “I think the Minister of Housing and Local Government
has fettered himself in such a way that in this case it was not he who made the decision
for which Parliament made him responsible.”.

28
[48] In Dene Nation and the Metis Association of the Northwest
Territories v The Queen [1984] 2 F.C. 942, the Northern Inland Waters
Act, R.S.C. 1970 (1st Supp). c 28, prohibits, subject to certain exceptions,
the alteration of the flow, storage or other use of water within a water
management area except pursuant to a licence issued by a board or when
authorised by regulations. The relevant regulation-making authority for the
latter is found in paragraph 26(g) of the Act and it reads:

“26. The Governor in Council may make regulations … (g) authorising the
use without a licence of waters within a water management area

(i) for the use, uses or class of uses specified in the regulations,
(ii) in a quantity or at a rate not in excess of a quantity or rate specified in
the regulations, or
(iii) for a use, uses or class of uses specified in the regulations and in a
quantity or at a rate not in excess of a quantity or rate specified therein.”.

Section 11 of Regulations SOR/72-382, as amended by SOR/75-421,

promulgated pursuant to that authority provides:

“11. Water may be used without a licence having been issued if the controller
has stated in writing that he is satisfied that the proposed use would meet the
applicable requirements of subsection 10(1) of the Act if an application described in
that section for that use were made and

(a) the proposed use is

(i) for municipal purposes by an unincorporated settlement; or
(ii) for water engineering purposes;

(b) the proposed use will continue for a period of less than 270 days; or

29
 (c) the quantity proposed to be used is less that 50,000 gallons per day.”.

[49] The plaintiffs brought an action seeking for a declaration that section
11 and the authorizations issued thereunder were invalid. The plaintiffs’
argument was based on mainly three grounds:

(i) that section 11 of the Regulations is invalid because its scope

and breadth is such as to undercut the whole purpose of the
statute;
(ii) the discretion given to the controller by section 11 is not
authorized by paragraph 26(g); and
(iii) that at the very least paragraph (b) of section 11 is ultra vires
because it is not a regulation respecting the ‘quantity’ or ‘rate’ of
water used, as provided in paragraph 26(g), but prescribes only
a time period during which an authorization will run.

[50] Reed J said:

“It is useful to begin with a description of the general scheme of the Act.
Section 7 provides for the establishment of two boards: the Yukon Territory
Water Board and the Northwest Territories Water Board. …

Parliament clearly intended two procedures for authorizing water uses:

one through the Yukon and Northwest Territories Water Boards, exercising the
quasi-judicial and discretionary powers which such bodies characteristically
exercise. The other through regulation in which it was clearly intended that all
requirements be met in order to use water without a licence would be

30
 specifically and exhaustively set out by the Governor in Council in the
Regulations. There is nothing in the Act from which one can infer any intention
that part or all of that power should be conferred on a sub-delegate to be
exercised in a discretionary fashion. The principle enunciated in Brant Dairy Co.
Ltd et al v Milk Commission of Ontario et al., [1973] S.C.R. 131 is very much in
point: when authority is conferred on an entity to regulate by regulation, the
power must be so exercised and not exercised by setting up some sub-delegate
with discretionary powers to make the decision.”.

[51] Similarly here. It is the Minister who is entrusted or empowered by

Parliament to regulate the terms and conditions of the contract of sale.
The Minister, however has delegated the power to regulate to the
Controller by regulation 11(3) of the Regulations. As power to regulate
does not include power to delegate, the Minister’s action in delegating the
power to modify the conditions and terms of the contract of sale may be
construed as having exceeded what was intended by Parliament.

[52] By comparison, in International Forest Products Ltd v British

Columbia [2006] B.C.J. No. 322, the Lieutenant Governor in Council has
the statutory authority to pass regulations concerning scaling. Section
151(2)(n) of the Forest Act, R.S.B.C. 1996, c. 157 provides:

“Without limiting subsection (1), the Lieutenant Governor in Council may make
regulations respecting any or all of the following:

(n) scaling including, without limitation,

(i) regulations authorized under Part 6;

(ii) the timing of a scale;

31
 (iii) the estimate of stumpage;

(iv) the payment of estimated stumpage; and

(v) scale site authorizations …”

[53] The Lieutenant Governor in Council also has express statutory

authority to delegate matters to other persons. Section 151(1.1) of the
Forest Act provides:

“In making a regulation under this Act, the Lieutenant Governor in

Council may do one or more of the following:

(a) delegate a matter to a person;

(b) confer a discretion on a person …”.

[54] The issue in International Forest Products (supra) concerns section

96(1) of the Act which provides that “A person who scales or purports to scale
timber under this Act (a) must carry out the scale according to the prescribed
procedures ..”. The British Columbia Supreme Court held that the impugned

section 96(1)(a) does not interfere with the Lieutenant Governor in

Council’s express statutory authority to delegate a matter or confer a
discretion on a person (including in relation to scaling). Understandably
so, because as regards delegation, the power to delegate is expressly
provided for, whereas in our instant appeals and Dene Nation (supra),
there was absent such express power to delegate.

[55] Finally, on the third task. In the instant appeals, the Schedule H
contract of sale prescribed by the Regulations is to carry into effect the

32
provisions of the Act, which is to protect the interests of the purchasers.
The regulations made by the Minister must thus achieve the object of
protecting the interests of the purchasers and not the interests of the
developers. And at the risk of repetition, the duty to protect the interests
of the purchasers is entrusted to the Minister.

[56] By delegating the power, vide regulation 11(3) to the Controller to

waive or modify the prescribed terms and conditions of the sale of
contract, it is now the Controller who has been entrusted to regulate the
terms and conditions of the contract of sale. Further, by modifying the
prescribed terms and conditions and by granting the developer the
extension of time, the Controller has denied the purchasers’ right to claim
for LAD. This modification and the granting of extension of time to the
developer, does not appear to us to protect or safeguard the purchasers
but rather the developer and this militates the intention of Parliament.

[57] It was submitted for the developer that the purchasers would suffer
greater hardship if the project is not completed as compared to not being
able to claim for LAD. With respect, we fail to see the merit of this
submission. If the developer fails to obtain an extension of time to deliver
vacant possession, that in itself does not mean that the developer has
failed to complete and hence, have abandoned the project. Whether or
not the developer is granted an extension of time does not necessarily
determine the fate of the project. The extension of time only determines
payment of LAD. In this regard, we must not lose sight of the purchasers’
obligations to pay for progress instalment to their respective housing
financier and/or payment of rental to their landlord. It is a matter of

33
balancing the commercial interest of a multi-million housing development
company against the life-time loan commitment of a purchaser for a basic
living necessity. As can be seen from the long line of authorities, it is the
interests of the purchasers that prevail over that of the developer. We
therefore hold that in allowing the Controller to waive or modify the terms
and conditions of the contract of sale and in the process, denying the
purchasers’ right to claim for LAD as prescribed by the Minister under
Schedule H, regulation 11(3) does not comply with the description of the
Regulations which is designed to protect the interests of the purchasers.

[58] There is one other aspect of the legislation that must be noted,
namely that the Act has specifically enumerated the respective duties and
powers of the Minister, the Controller and an Inspector. The management
of the Housing Development Account is under the purview of the
Controller. Specific powers of an Inspector can be found in sections 10A,
10B, 10C, 10D, 10E and 10F, whilst powers to give directions for the
purpose of safeguarding the interests of purchasers are specifically given
to the Minister. Where powers or duties may be exercised by either the
Controller or an Inspector, that has been made clear by the Act. For
instance, under section 10, either the Controller or an Inspector, on his
own volition or upon being directed by the Minister, may investigate the
commission of any offence under the Act or investigate into the affairs of
or into the accounting or other records of any housing developer.

[59] The powers and duties of the Minister, the Controller and an
Inspector, respectively had thus been clearly defined. It is also pertinent
to highlight, that by section 4(2), express provisions were made for the

34
exercise of an Inspector’s powers by the Controller. By subsections (3)
and (4) of section 4, Parliament had expressly allowed for the delegation
of the Controller’s powers to named persons. But there is no such
provision enabling the Controller to exercise the Minister’s powers. This
supports our view that Parliament did not intend for the Minister’s powers
to regulate the terms and conditions of a contract of sale to be delegated
to the Controller.

[60] On the above analysis, we hold that the Controller has no power to
waive or modify any provision in the Schedule H contract of sale because
section 24 of the Act does not confer power on the Minister to make
regulations for the purpose of delegating the power to waive or modify the
Schedule H contract of sale to the Controller. And it is not open to us to
read into the section an implied power enabling the Minister to do so. We
consequently hold that regulation 11(3) of the Regulations, conferring
power on the Controller to waive and modify the terms and conditions of
the contract of sale is ultra vires the Act.

Question 4 – whether the letter granting an extension of time after

appeal pursuant to Regulation 12 of the Housing Development
(Control and Licensing) Regulations 1989 must be signed personally
be the Minister? And whether the Minister could delegate his duties
(signing of the letter granting the extension of time) to an officer in
the Ministry of Urban, Wellbeing, Housing and Local Government?

35
[61] We accept that generally, a Minister need not sign a letter
personally. As stated by Lord Greene, M.R. in Carltona, Ltd v
Commissioners of Works and Others [1943] 2 All ER 560:

“In the administration of government in this country the functions which

are given to ministers (and constitutionally properly given to ministers because
they are constitutionally responsible) are functions so multifarious that no
minister could ever personally attend to them. To take the example of the
present case no doubt there have been thousands of requisitions in this country
by individual ministers. It cannot be supposed that this regulation meant that, in
each case, the minister in person should direct his mind to the matter. The
duties imposed upon ministers and the powers given to ministers are normally
exercised under the authority of the ministers by responsible officials of the
department. Public business could not be carried on if that were not the case.
Constitutionally, the decision of such an official is, of course, the decision of the
minister. The minister is responsible. …”.

[62] In the instant appeals however, we find that the issue is not so much
that the Minister did not sign the letter personally, but whether, on the face
of the letter, it was the Minister’s decision made under regulation 12 and
whether it was in fact signed by the officer on behalf of the Minister.

[63] The said 17.11.2015 letter purportedly granting extension of time to

the developer is reproduced below for ease of reference:

36
[64] The developer essentially took the position that the extension of time
was granted by the Minister and that the letter could have been written
better, but that the problem only lies with the choice of words. It was
submitted for the developer that the Controller was merely conveying the
decision of the Minister to allow the appeal vide the said letter. With

37
respect we disagree with the developer. The letter dated 17.11.2015
borne out two points. Firstly, it was signed by Jayaseelan on behalf of the
Controller and not on behalf of the Minister and secondly, the letter did not
state that the decision to grant the extension of time was made by the
Minister under regulation 12, but it was specifically stated that the decision
was made by the Ministry under regulation 11.

[65] Taking a closer look at the letter dated 17.11.2015 which was to
convey the decision of the Minister on the developer’s appeal against the
rejection by the Controller on the extension of time, it is our judgment that
the letter was not a valid letter granting an extension of time to the
developer. The invalidity has nothing to do with the choice of words but it
has to do with the substance of the letter, namely the signatory to the letter
has stated that he signed the letter on behalf of the Controller and not on
behalf of the Minister. Surely this is not something that the signatory can
choose to state either he is acting on behalf of the Controller or the
Minister because an appeal cannot lie to the Controller against the
decision of the Controller. Thus, it is necessary that the letter conveys the
decision of the Minister and that the signatory signed on behalf of the
Minister. More importantly, if the extension was granted by the Minister
pursuant to an appeal against the dismissal by the Controller of the
developer’s application for extension of time, the applicable regulation is
regulation 12 and not regulation 11. The fact that the letter was signed on
behalf of the Controller to convey a decision by the Ministry (as opposed
to the Minister) under regulation 11, in our view made it crystal clear that
the decision to grant the extension of time to the developer was that of the
Controller and not the Minister. Our view is fortified by the absence of any
material before the Court in the form of an affidavit by the Minister to

38
explain the discrepancy and to state that he had indeed decided to allow
the developer’s appeal under regulation 12 for the extension of time.

[66] In this regard, we respectfully endorse the decision of the Court of

Appeal in Menteri Bagi Kementerian Dalam Negeri & Anor v Jill Ireland
Lawrence Bill & Another Appeal [2015] 7 CLJ 727 where on similar issue,
it states:

“[24] It was also argued before us by learned SFC that the evidence as per
the relevant affidavits had shown that the letter dated 7 July 2008, although
signed by Suzanah bte Hj Muin, a Senior Authorised Officer, (“Suzanah”), she
had so signed as she was just communicating the decision of the Minister to
the applicant. In other words, Suzanah did not decide under s. 9 but that she
was only informing or conveying to the applicant what had been decided by the
Minister. …

[25] As such, it was argued before us by learned SFC that the learned judge
had erred when she found as a fact that the decision under s. 9 had been made
by Suzanah instead of it having been made by the Minister.

[26] In this regard, we had to look at the letter dated 7 July 2008 itself to see
whether such submission by learned SFC could be sustained. That letter ...
was clearly signed by Suzanah bte Hj. Muin, a Senior Authorised Officer, from
the Home Affairs Ministry. Paragraph 2 of the letter said that in exercise of the
powers under s. 9(1) of the Act, the Ministry (“Kementerian”) had decided to
withhold the publications as appeared in the Annexure ‘K’ for reasons as stated
therein. It was signed off by Suzanah.

39
 [27] Learned SFC had tried to impress upon us that this decision was made
by the Minister himself and that Suzanah was only instructed to convey that
decision made by the Minister. We were, as was the learned judge, referred to
the affidavit of the then Minister which according to the learned SFC would
dispel all doubts surrounding the decision maker in this case. First, we need
only say that there was nothing stated in the letter dated 7 July 2008 that would
convey the meaning that Suzanah was directed by the Minister to convey the
Minister’s decision on the fate of the publications. Secondly, para. 2 spoke of
the decision of the ‘Kementerian’ as opposed to decision of the ‘Minister’ as
envisage by s. 9 of the Act. …”.

[33] The nett result of this conclusion by us, would mean that the letter dated
7 July 2008 that purported to confiscate the eight publications belonging to the
applicant is one that was bad in law. It was done ultra vires s. 9 of the Act as it
was made by a person, to wit Suzanah bte Hj Muin, who was not the person
who was envisaged by Parliament as the competent person who was
empowered to make that order under s. 9 of the Act.”.

[67] On the facts of this case, there being no decision by the Minister
under regulation 12, we decline to answer Question 4.

Question 5 – Whether the Minister having taken into consideration

the interest of the purchaser is obliged to afford the purchaser with
a hearing prior to the Minister granting an extension of time albeit
there is no such provision or requirement in the Housing
Development (Control and Licensing) Regulations 1989

[68] Question 5 is framed on the premise that it was the Minister who had
granted the extension of time and that in doing so, he had taken into

40
consideration the interest of the purchasers. As held above, there was no
decision by the Minister to grant the extension of time. Question 5 is thus
premised on an erroneous fact. We therefore find no necessity to answer
Question 5.

Conclusion

[69] To conclude, we would answer the Questions posed as follows:

Questions 1 and 2 – Negative

Question 3 – Affirmative

Questions 4 and 5 – no necessity to answer.

[70] The appeals by the purchasers are consequently allowed and the
appeals by the developer are dismissed. As agreed by the parties, there
will be no order as to costs.

[71] This judgment is prepared pursuant to section 78(1) of the Courts of

Judicature Act 1964, as Justice Alizatul Khair binti Osman Khairuddin has
since retired.

Dated: 26th November 2019 signed

(TENGKU MAIMUN BINTI TUAN MAT)
Chief Justice
Federal Court of Malaysia
Putrajaya

41
Counsel/Solicitors

For the Appellant:

George Varughese
(Johan Mohan Abdullah with him)
Messrs Johan Arafat Hamzah & Mona

For the Respondent:

Dato KL Wong
(Albert KY Soon, Andrew KJ Chan, Viola De Cruz & Koh Kean Kang with
him)
Messrs KL Wong

Watching Brief:

For REHDA
Mark Ho Hing Kheong & Pang Li Xuan
(Messrs Chellam Wong)

For Bar Council

Datuk Roger Tan, Nicholas Chang & Elison Wong

42