The Tribunal for Homebuyer Claims can no longer hear disputes involving purchases predating its establishment last December, the Kuala Lumpur High Court decided today.

In the landmark decision, the court effectively rendered the 10 month-old tribunal redundant when it ruled that the body was not empowered to hear violations of housing sale and purchase agreements prior to its creation.

A group of housing developers separately challenged the tribunal's decisions, through a judicial review, to compensate house buyers for late delivery and failure to provide common facilities.

Justice Raus Sharif found that the tribunal was wrong in granting the awards with retrospective effect for cases where the houses were bought prior to the amended Housing Development (Control and Licensing) Act 2001. The Act gave birth to the tribunal effective Dec 1.

No jurisdiction

He said the tribunal had no jurisdiction to hear cases involving sale and purchase agreements signed before that date as it would affect the "substantive rights" of the developer under Section 16 AD of the amendment Act.

This section stated that a failure by the developer to pay the award granted by the tribunal within a specified period amounts to a criminal offence and liable to a RM5,000 fine, two years jail or both.

He said Section 16AD exposed the developers to both civil and criminal liability, and that there was no way Section 16N, which spells out the tribunal's jurisdiction, could have a retrospective effect.

"This is because at the time the sale and purchase agreement was entered into, any breach of the agreement only had civil consequences."

Raus said at the time of signing the agreement, the applicants would not have anticipated any criminal liability.

He said by allowing the tribunal to hear disputes that predate its inception would mean allowing retrospective criminal laws and that was prohibited by Article 7 of the Federal Constitution.

"Thus, if parliament had intended that the amendment Act is to have retrospective application, in that parliament intended housing developers to be criminally liable for its breaches which are not unlawful at the time it was done, then parliament would have expressly and clearly said so.

"This was not done," said the judge.

Cheaper alternative

The tribunal, described as 'house buyer-friendly', was intended as a cheaper and speedier alternative to civil action in disputes between house buyers and developers.

Puncakdana Sdn Bhd - the developer of Puncak Seri Kelana Condo in Subang - applied to quash the awards of between RM15,000 and RM22,000 granted by the tribunal to the seven house owners sometime between March and April.

There are 43 more similar cases against Puncakdana pending hearing at the tribunal, which can hear complaints worth RM25,000 or less and without legal representation.

The National House Buyers Association (HBA), concerned with the unfavourable turn of events, gathered a dozen lawyers acting pro bono for the house buyers involved in the test case filed by Puncakdana.

Two companies - Westcourt Corp Sdn Bhd and Fadason Holding Sdn Bhd - also filed separately for judicial review on the same matter at the appellate division of the High Court.

As of July 3, the tribunal reportedly disposed off 438 cases out of more than 2,000 filed with it, with awards totaling about RM2.3 million.

All of the disputes involved sale and purchase agreements signed before Dec 1.

'Serious setback'

When met outside court later, HBA secretary-general Chang Kim Loong was shocked with the decision, which he described as "a serious setback" for the tribunal.

"It was the increasing complaints from house buyers that prompted the amendment to the existing law and led to the creation of the tribunal."

He said to now deny house buyers accessibility to the tribunal was "very frustrating and grossly unjust".

Chang said the decision would mean that the tribunal will not see any action until problems crop up after the scheduled completion date - anywhere between 24 and 36 months.

The HBA wants Housing and Local Government Minister Ong Ka Ting to immediately table an amendment bill to the amendment Act, at the current parliamentary meeting, expressing clearly the retrospective effect regardless of the signing date for the sale and purchase agreement.

Bernard Chin, one of the seven who were granted an award by the tribunal, was also disappointed with the ruling.

"This is a step backward for us house buyers because the tribunal was supposed to be a fast-track system.

"But now, we're back to square one, status quo ... or worse, because we abided by all the rules and procedures and spent so much time and effort doing things properly," said Chin, who was awarded RM22,000 for late delivery.

"This has been very draining for us, both mentally and physically," he added.

Adverse implications

Two other house buyers whose cases were pending hearing at the tribunal felt that the decision defeated the purpose of the tribunal's inception.

Christina Lesslar and Lai Meng said the decision "didn't make any sense" and had "a lot of adverse implications".

"Prior to the tribunal, such disputes ended up in court and even then, we were not assured of payment of compensation. It was more of a paper judgement.

"Here we thought the tribunal could prevent such unfairness and give us justice, but things are not looking good now."

The HBA will also appeal against the decision.