The Supreme Court affirmed that decisions from the Housing and Land Use Regulatory Board (HLURB) become final if appeals to the Office of the President (OP) are filed beyond the prescribed 15-day period. Swire Realty Development Corporation’s failure to file its appeal on time rendered the HLURB’s decision final and executory, thus entitling Jayne Yu to the rescission of their Contract to Sell due to the developer’s delay in completing and delivering the condominium unit. This underscores the importance of adhering to procedural rules and timelines in administrative appeals, as failure to do so can result in the loss of the right to challenge adverse decisions.

Missed Deadlines, Lost Rights: Examining Procedural Compliance in Property Disputes

The case revolves around a Contract to Sell between Jayne Yu (respondent) and Swire Realty Development Corporation (petitioner) for a condominium unit and parking slot in Makati City. Yu fully paid for the unit by September 24, 1997, and made a down payment for the parking lot. However, Swire Realty failed to deliver the unit on time, prompting Yu to file a complaint for Rescission of Contract with Damages before the HLURB.

The HLURB ENCRFO initially dismissed Yu’s complaint, but the HLURB Board of Commissioners reversed this decision, ordering the rescission of the contract. Swire Realty then appealed to the Office of the President (OP). The OP initially dismissed the appeal due to the untimely filing but later granted Swire Realty’s motion for reconsideration, reinstating the HLURB ENCRFO’s original decision. Yu then appealed to the Court of Appeals (CA), which reversed the OP’s decision and reinstated the HLURB Board of Commissioners’ rescission order. The Supreme Court was asked to rule on whether Swire Realty’s appeal was timely filed before the OP and whether rescission of the contract was proper.

The Supreme Court addressed the issue of the appeal period first, citing established jurisprudence that the period to appeal decisions of the HLURB Board of Commissioners to the Office of the President is fifteen (15) days from receipt thereof, pursuant to Section 15 of PD No. 957 and Section 2 of PD No. 1344. These special laws provide an exception to the thirty-day period under Section 1 of Administrative Order No. 18.

As pointed out by public respondent, the aforecited administrative order allows aggrieved party to file its appeal with the Office of the President within thirty (30) days from receipt of the decision complained of. Nonetheless, such thirty-day period is subject to the qualification that there are no other statutory periods of appeal applicable. If there are special laws governing particular cases which provide for a shorter or longer reglementary period, the same shall prevail over the thirty-day period provided for in the administrative order.

The Court noted that Swire Realty received the HLURB Board of Commissioners’ decision on April 17, 2006, giving it until May 2, 2006, to file an appeal. Instead, Swire Realty filed a Motion for Reconsideration on April 28, 2006, which only suspended the running of the 15-day period. Administrative Order No. 18 dictates that the time during which a motion for reconsideration is pending shall be deducted from the appeal period. Since Swire Realty received the HLURB Board Resolution denying its Motion for Reconsideration on July 23, 2007, it had only four days, or until July 27, 2007, to file its appeal to the OP. The appeal, however, was filed on August 7, 2007, eleven days late, rendering the HLURB Board of Commissioners’ decision final and executory.

The Supreme Court emphasized that procedural rules are not mere technicalities that can be disregarded at will. The right to appeal is a statutory privilege that must be exercised in accordance with the law. The Court stated:

while the dismissal of an appeal on purely technical grounds is concededly frowned upon, it bears emphasizing that the procedural requirements of the rules on appeal are not harmless and trivial technicalities that litigants can just discard and disregard at will. Neither being a natural right nor a part of due process, the rule is settled that the right to appeal is merely a statutory privilege which may be exercised only in the manner and in accordance with the provisions of the law.

Turning to the issue of rescission, the Court invoked Article 1191 of the Civil Code, which allows the injured party to seek rescission of the obligation if the other party fails to comply with what is incumbent upon him. The provision states:

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.

The Court agreed with the CA’s finding that Swire Realty incurred a delay in the performance of its obligation, amounting to a breach of contract. The condominium unit was not completed and delivered to Yu within the stipulated period, as evidenced by the HLURB ENCRFO’s ocular inspection report. The report revealed that the amenities under the approved plan had not been provided as of May 3, 2002, and the unit had not been delivered as of August 28, 2002, beyond the December 1999 deadline under the license to sell.

Given the delay and the incomplete state of the unit, the Supreme Court affirmed that Yu was entitled to rescind the contract and demand a refund of the purchase price. However, the Court modified the CA’s decision to include moral damages of P20,000.00.

FAQs

What was the key issue in this case?	The key issues were whether Swire Realty’s appeal to the Office of the President was timely filed and whether rescission of the Contract to Sell was proper due to the developer’s delay in delivering the condominium unit.
What is the appeal period for HLURB decisions to the Office of the President?	The appeal period is 15 days from receipt of the HLURB Board of Commissioners’ decision, as provided by special laws (PD No. 957 and PD No. 1344), which take precedence over the 30-day period in Administrative Order No. 18.
What happens when a Motion for Reconsideration is filed?	Filing a Motion for Reconsideration suspends the running of the appeal period. However, once the motion is resolved, the remaining days of the original appeal period resume.
What legal provision allows for rescission of a contract?	Article 1191 of the Civil Code allows for the rescission of reciprocal obligations if one party fails to comply with their obligations, entitling the injured party to choose between fulfillment or rescission with damages.
What constitutes a breach of contract in property sales?	A breach occurs when the developer fails to deliver the property within the agreed-upon timeframe or fails to complete the unit according to the approved plans and specifications.
What evidence did the Court rely on to find a breach?	The Court relied on the HLURB ENCRFO’s ocular inspection report, which detailed the incomplete state of the condominium unit and the lack of promised amenities beyond the agreed completion date.
What is the significance of adhering to procedural rules?	Adhering to procedural rules, like appeal periods, is crucial because the right to appeal is a statutory privilege, not a natural right, and failure to comply can result in the loss of that right.
What damages are typically awarded in rescission cases?	In rescission cases, the injured party is typically entitled to a refund of the purchase price and may also be awarded damages, such as moral damages and attorney’s fees, to compensate for the breach.
Can administrative agencies disregard technical rules?	While administrative agencies have some flexibility, they cannot disregard mandatory procedural rules, especially when specific laws prescribe appeal periods.

This case serves as a reminder of the importance of diligently observing procedural rules, particularly appeal periods, in administrative proceedings. Developers must also ensure timely completion and delivery of contracted properties to avoid potential rescission and liability for damages. The case also underscores that procedural rules are in place for a purpose and are not to be taken lightly.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Swire Realty vs. Yu, G.R. No. 207133, March 09, 2015