A recent Federal Court decision has confirmed that the hotel industry cannot use a service charge to supplement employees' wages in order to meet the minimum threshold for wage requirements. While the decision may be unpopular among hoteliers and related or similar industries, it was inevitable. The long-term impact that it may have on society outweighs any likely detriment that it may cause to a particular industry.
Introduction
Providing a performance bond in the form of a bank guarantee to secure the performance of work is not unusual in the construction industry. In the event that a contractor breaches its contractual obligations (eg, fails to complete its work by the completion date), the employer or developer is entitled to call on the bank guarantee. However, the contractor may bring an action in court against this call on the ground that such a demand is unconscionable. With the recent enforcement of the Temporary Measures for Reducing the Impact of Coronavirus Disease (COVID-19) Act 2020 (COVID-19 Act) – the application of which has been extended to 31 March 2021 – a question has arisen as to whether the COVID-19 Act provides a new ground for contractors to challenge calls on bank guarantees. While the high court s decision in
On 19 January 2021 the Federal Court delivered a landmark decision in
PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah.(1) The apex court decided that in the event of delay of delivery of vacant possession for Schedule G and H-type contracts under Regulation 11(1) of the Housing Development (Control and Licensing) Regulations (HDR) 1989, the timeframe for calculating liquidated and ascertained damages (LADs) begins from the date of payment of the booking fee, not the date of the sale and purchase agreement (for further details please see Housing developers beware – Federal Court upholds
This article focuses on
PJD s impact on housing developers with respect to their completed and ongoing housing projects under Schedules G and H of the HDR.
Faber Union(1) is good law.
In total, there were seven appeals before the Federal Court by purchasers and housing developers. The key question that the court considered was where there is a delay in the delivery of vacant possession, does the date for the calculation of liquidated and ascertained damages (LADs) begin on the date of the payment of the booking fee or on the date of the sale and purchase agreement (SPA)?(2)
This article refers to the appeals pertaining to
GJH Avenue Sdn Bhd.(3)
GJH Avenue
The
GJH Avenue appeals comprised three appeals by purchasers of units of bungalows under a Schedule G statutory contract as prescribed under the Housing Development (Control and Licensing) Regulations (HDR) 1989. One of the bungalow units is known as Unit Number L274/PT Number 5415.
The recent Federal Court decision in
Catajaya Sdn Bhd v Shoppoint Sdn Bhd(1) has breathed new life into the interpretation of termination clauses in contracts. Indeed, it sounded a cautionary note to the business community at large when the Federal Court held that termination clauses must be interpreted strictly.
Facts
The dispute arose from the termination of a share sale agreement (SSA) between Catajaya Sdn Bhd (appellant) and Shoppoint Sdn Bhd and its shareholders (respondents). Under the SSA, the appellant was to purchase a piece of land held by Shoppoint Sdn Bhd by acquiring its shares.
The SSA stipulated specific timelines for the payment of the purchase price, whereby the appellant would pay the balance purchase price by the agreed completion date.