G.R. No. 224973 - Lefebre vs. A Brown Co., Inc.

Petitioner Gina Lefebre, along with her husband Donald, made a reservation in 1998 to purchase a residential lot in Xavier Estates developed by respondent A Brown Company, Inc.
The reservation originally involved a 576‑square meter parcel which was later upgraded to a 1,107‑square meter lot priced at P5,313,600.00, motivated by promises to develop a Manresa 18-Hole All Weather Championship Golf Course—a key amenity for the Lefebres, given Donald’s interest in golf.

A down payment of 30% (P1,594,080.00), which included an initial P10,000.00 reservation fee paid on December 31, 1998.
The remaining balance was to be amortized equally over 84 months.

Respondent’s representations regarding the development of the golf course played a significant role in the Lefebres’ decision to upgrade their reservation and enter the contract.

Despite respondent’s representations, the promised golf course was never developed.
The Contract to Sell was cancelled by respondent on the basis of Lefebre’s alleged failure to pay the remaining balance—even though Lefebre claimed she sought to settle the unpaid balance within six months.
Lefebre filed a complaint before the HLURB for Misleading and Deceptive Advertisement, Annulment of Rescission of Contract to Sell, Damages, and Other Relief. She maintained that she had already paid a total of approximately P8.1 million (including interests and surcharges) and that her actual unpaid balance amounted to only P1,345,722.18.
Respondent countered by arguing that Lefebre had been delinquent since 2001, failing to settle her monthly obligations despite multiple grace periods, and that the alleged issue of misleading advertisement was introduced only after her failure to pay.

The HLU Arbiter ruled in favor of respondent on the issue of misleading and deceptive advertisement, emphasizing that Lefebre raised that issue only after failing to meet her payment obligations and after notices of cancellation had been sent.
However, the Arbiter determined that Lefebre was entitled to the cash surrender value of payments made before a valid cancellation of the Contract to Sell could be effectuated under Section 3 of RA 6552.
The case was referred to the Monitoring Section for further evaluation given respondent’s admission regarding non‑development of the golf course.

The HLURB BOC set aside the HLU Arbiter’s decision, ruling that the Contract to Sell had not been validly cancelled due to respondent’s failure to tender the cash surrender value.
With the contract still in effect, Lefebre was directed to be reimbursed the full amount of her payments (P8.1 million with interest, less penalties or surcharges), along with additional awards for moral damages, attorney’s fees, costs of suit, and an administrative fine.

Initially, the CA dismissed respondent’s petition for certiorari on procedural grounds, notably the failure to exhaust available administrative remedies.
On motion for reconsideration, the CA vacated its dismissal and, in its Decision of July 8, 2015, reinstated the HLU Arbiter’s ruling, holding that respondent’s cancellation was proper in light of Lefebre’s failure to timely notify or suspend payments on grounds of non‑development.
The CA noted respondent’s direct filing for certiorari without pursuing a proper appeal to the Office of the President as mandated under HLURB rules.

Lefebre filed a motion for reconsideration of the CA’s ruling, which was denied in a Resolution dated May 24, 2016, leading to the present petition.

Whether the Court of Appeals’ reinstatement of the HLU Arbiter’s Decision was proper, despite respondent’s direct filing for certiorari without exhausting the prescribed administrative appeal remedies.
Whether respondent’s failure to appeal through the proper channels (i.e., filing an appeal to the Office of the President within the reglementary period) forfeited its right to challenge the cancellation of the Contract to Sell.
The extent to which the doctrine of exhaustion of administrative remedies applies in cases involving disputes over the cancellation procedures under RA 6552 and PD 957.