Yakin Tenggara Sdn Bhd … Appellant v Rhb Bank Berhad (B-02(IM)-1995-12/2015)

1 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO. B-02(IM)-1995-12/2015 YAKIN TENGGARA SDN BHD

1. RHB BANK BERHAD

2. GULA PERAK BERHAD

3. AMBANK (M) BERHAD

4. DATUK LIM SUE BENG

5. FAITHMONT ESTATE SDN BHD … RESPONDENTS [HEARD TOGETHER WITH APPEAL NO. NO.B-02(IM)-1996- 12/2015 DATUK LIM SUE BENG

1. GULA PERAK BERHAD

2. RHB BANK BERHAD

3. AMBANK (M) BERHAD

4. YAKIN TENGGARA SDN BHD

5. FAITHMONT ESTATE SDN BHD … RESPONDENTS AND APPEAL NO.B-02(IM)-832-05/2016 AMBANK (M) BERHAD

1. DATUK LIM SUE BENG

2. YAKIN TENGGARA SDN BHD

3. RHB BANK BERHAD

4. GULA PERAK BERHAD … RESPONDENTS] 2 CORAM MOHD ZAWAWI SALLEH, JCA ABDUL RAHMAN SEBLI, JCA PRASAD SANDOSHAM ABRAHAM, JCA JUDGMENT INTRODUCTION [1] These appeals arose from the decision of the High Court at Shah Alam allowing the application by the liquidators of the 2nd respondent, Gula Perak Berhad, for the court’s approval of a compromise between three parties, namely Gula Perak Berhad, Faithmont Estate Sdn Bhd and the 3rd respondent Ambank (M) Berhad under Kuala Lumpur High Court Originating Summons No. S-24-636-2010 consolidated with Kuala Lumpur High Court Suit No. 22NCVC-438-04/2012. [2] To avoid confusion, we shall refer to the parties by their respective first names. The central issue common to all three appeals is the effect in law of a compromise to sell estate land without first obtaining the approval of the Estate Land Board (“the Land Board”). THE FACTS [3] For the purpose of determining the issue, we shall be guided by the following narration of facts. On 25.3.2010, Faithmont filed an action against Gula Perak vide Civil Suit No. S-24-636-2010 for inter alia, specific performance of the sale and purchase agreement dated 28.10.2005 (“the agreement”) relating to an oil palm estate 3 land (oil palm plantation) belonging to Gula Perak. We shall refer to the estate land as “the land”. [4] The agreement was for Gula Perak to sell the land to Faithmont for a consideration of RM19 million, and Faithmont had paid RM5.7 million towards the purchase price. Under Clause 2.1(a) and (b) respectively of the agreement, it was Gula Perak’s obligation to obtain the consent of the State Authority and approval of the Land Board for the transfer and sale of the land. [5] The reason why Faithmont sued Gula Perak was because Gula Perak failed to take steps to obtain the consent of the State Authority and the approval of the Land Board for the transfer and sale of the land and further failed to comply with the terms of the agreement. [6] On 13.4.2012, Faithmont vide Kuala Lumpur High Court Civil Suit No. 22NCVC-438-04/2012 filed a related suit against Ambank as chargee of the land for, inter alia, the removal of a private caveat lodged by Ambank on the land. Ambank was Gula Perak’s only secured creditor, and is claiming that it is entitled to all the sale proceeds of the land to the exclusion of all unsecured creditors and contributories of Gula Perak. [7] Gula Perak was wound up on 1.3.2013 by RHB Bank vide Shah Alam High Court Winding-Up No. MT FLJC 28-81-2011 with one Ooi Wan Chee and one Ong Hock Ann appointed as the liquidators. 4 [8] On 19.11.2013, Gula Perak filed its defence to Faithmont’s claim and pleaded that Faithmont breached the terms of the agreement and counterclaimed, inter alia, for damages for loss of profit and loss of use of the land from the date vacant possession was given to Faithmont on 16.11.2005. [9] On 19.5.2014, pursuant to a court order, the two suits filed by Faithmont against Gula Perak and Ambank were consolidated and were ordered by the learned High Court Judge to be heard together by way of a full trial. We shall refer to the two suits as “the consolidated suits”. During the course of the trial, Faithmont produced a Valuation Report dated 29.11.2010 issued by Raine & Horne International Zaki & Partners Sdn Bhd which confirmed that the market value of the land was RM52.8 million. THE APPLICATION FOR COMPROMISE [10] On 19.6.2015, the liquidators of Gula Perak filed a Notice of Motion seeking approval from the Shah Alam Winding Up Court to compromise the consolidated suits to enable Gula Perak to enter into a consent judgment with Faithmont and Ambank. The application was made under section 236(1)(d) of the Companies Act 1965 (“the Companies Act”), which provides: “236. (1) The Liquidator may with the authority either of the Court or of the Committee of Inspection –

(1) Notwithstanding anything contained in this Act, no estate land is capable of being transferred, conveyed or disposed of in any manner whatsoever, unless approval of such transfer, conveyance or disposal has first been obtained from the Estate Land Board (hereafter referred to as “the Board”) established under sub-section (3). [34] The contention is that the compromise sought by the liquidators of Gula Perak should not have been approved by the learned JC because by entering into the compromise without first 13 obtaining the approval of the Land Board, Gula Perak had infringed section 214A(1) of the Land Code. The effect of the infringement according to Datuk Seri Gopal Sri Ram for Yakin Tenggara is to render the compromise order void and unenforceable. [35] Dato’ K. Kirubakaran for the liquidators and Ms Yoong Sin Min for Ambank, however, gave a different construction to section 214A(1). The proposition advocated by both counsel is that what section 214A(1) prohibits is not “agreement” but “transfer”. [36] What the proposition amounts to is this. Since the compromise did not involve “transfer” but only “agreement” to transfer, there was no requirement for prior approval of the Land Board and as such the compromise did not breach section 214A(1) of the Land Code. The nub of the argument is that the prohibition under section 214A(1) only kicks in after “transfer” had taken place and not before. [37] The learned JC acceded to the argument and this is what she said in her judgment: “In desperation to salvage an otherwise untenable case, Yakin contended that the compromise is an illegal compromise simply because the parties to the compromise have yet to obtain the Estate Land Board’s approval under section 214A(10A) of the National Land Code. Let this Court be clear from this juncture that this section only stipulates that a transfer of estate land requires the Estate Land Board’s approval and a transfer without such approval shall render the transfer invalid and parties involved in the transfer shall be liable to an offence. The Section does not mention of any agreements to transfer estate land, but specifically the act of transferring the estate land. This is the distinction that Yakin had unfortunately failed to understand.” (emphasis ours) 14 THE LEGISLATIVE INTENT [38] The legislative intent behind section 214A(1) of the Land Code is clear, that it prohibits the transfer, conveyance or disposal of estate land “in any manner whatsoever” without first obtaining the approval of the Land Board. It is an offence to do so and this is provided by section 214A(10A)(a) which states: “(10A)

(1) to transfer any estate land in any manner whatsoever;

(2) to convey any estate land in any manner whatsoever; and

(3) to dispose of any estate land in any manner whatsoever. [40] The offences it will be noted are not confined to acts of transferring, conveying, or disposal of estate land. They include attempts to do such acts, and going by the punishment provided for the offences upon conviction, which is imprisonment for a term of not less than one year and not more than three years and a fine not exceeding ten thousand ringgit (as it presently provides), they cannot by any reckoning be treated as trivial offences. A breach of 15 section 214A(1) of the Land Code is therefore a crime that is not to be taken lightly. [41] It is undisputed that by the time the application for compromise was filed on 19.6.2015, which was almost 10 years after the agreement was signed on 28.10.2005, the approval by the Land Board for the transfer of the land had yet to be obtained. That explains why the liquidators sought the court’s approval for validation of the agreement and for a “fresh” condition that Faithmont (instead of Gula Perak) was to apply for approval from the Land Board for the sale of the land. ATTEMPT TO COMMIT OFFENCE [42] Assuming for a moment that Gula Perak and Ambank are right in their contention that the “agreement” to transfer, not being a “transfer” did not require prior approval of the Land Board and therefore not prohibited by section 214A(1), the question one has to ask is whether such agreement was an attempt by Gula Perak to “transfer”, to “convey” or to “dispose of” the land “in any manner whatsoever” within the meaning of section 214A(1). [43] We would think so. Although no actual “transfer” took place at the time of the compromise, in the sense that the land was not registered in the name of Faithmont, the simple truth is that the consensus ad idem and the common intention between the parties was to “transfer”, to “convey” or to “dispose of” the land without first obtaining the approval of the Land Board as required by section 214A(1) of the Land Code. 16 [44] There is no mistaking their intention that the approval from the Land Board was only to be obtained later, i.e. after the compromise had been approved by the court, but by the time the compromise was approved on 4.11.2015, 10 years had passed since the agreement was executed on 28.10.2005. That is a very long delay by any measure of time. [45] Clearly this was an attempt to “transfer, convey or dispose of” estate land without first obtaining the approval of the Land Board, an offence under section 214A(10A)(a) of the Land Code. The attempt is obvious as RM5.7 million had been paid towards the purchase price, and Faithmont had taken vacant possession of the land on 16.11.2005, barely one month after executing the agreement on 28.10.2005. [46] For all intents and purposes, the land had been “disposed of” to Faithmont since 16.11.2005 without the approval of the Land Board. What the compromise sought to achieve was to validate that unlawful act of disposal. Like the execution of the agreement on 28.10.2005, the compromise was yet another attempt by Gula Perak to circumvent the strict requirement of prior approval under section 214A(1) of the Land Code. [47] For a compromise under section 236 of the Companies Act to be valid, it must be lawful. A compromise to do an unlawful act or to validate an unlawful act is null and void and has no effect whatsoever and we can say without fear of contradiction that neither the court nor the committee of inspection nor any other authority for that matter can legalise an otherwise illegal act. The 17 compromise order is therefore void for illegality under section 24 of the Contracts Act 1950. CASE LAW [48] As for case law on section 214A(1) of the Land Code, we were referred to two conflicting decisions of two different panels of this court which dealt with the issue. The first is Vellasamy Pennusamy & Ors v Gurbachan Singh Bagawan Singh & Ors [2012] 2 CLJ 712 (“Vellasamy”) which decided by majority that section 214A(1) does not prohibit the making of a contractual agreement of sale. [49] The second case is Tai Thong Flower Nursery Sdn Bhd v Master Pyrodor Sdn Bhd [2014] 9 CLJ 74 (“Tai Thong”) which unanimously decided that the moment an agreement to transfer estate land is executed without the approval of the Land Board, it becomes proof that the transfer contravenes section 214A(1). [50] We shall deal with Tai Thong first. In holding that the execution of the agreement was void for contravention of section 214A(1), Zaharah Ibrahim JCA (now FCJ) delivering the judgment of the court held at page 88: “The requirement that the approval of the Estate Land Board must be obtained before the execution of any agreement for the transfer, conveyance or disposal of estate land or any portion of it was reinforced by the provisions contained in para. 214A(10A)(b). The moment an agreement is executed without the approval of the Estate Land Board for the transfer, conveyance or disposal of estate land, such execution became conclusive proof that the transfer, conveyance or disposal was being done in contravention of the clear prohibition in sub-s. 214A(1). 18 While s. 214A of the NLC did not itself provide an agreement to transfer, convey or dispose of estate land without the approval of the Estate Land Board was void, the fact that such transfer, conveyance or disposal was prohibited by sub-s. 214A(1), and the act of transferring, conveying or disposing constituted an offence under sub-s. 214A(10A)(a), meant that any contract for such transfer, conveyance or disposal, and consequently any memorandum of transfer pursuant to such contract, was liable to be struck down as being void for illegality under s. 24 of the Contracts Act 1950.” [51] Section 214A(10A)(b) referred to in the first of the two paragraphs above is couched in the following language: “214(10A)(b) For the purpose of this section, the execution of an agreement to convey or dispose of the whole of an estate land to two or more persons, or to convey or dispose of any portion or portions of an estate land to one or more persons, without the approval of the Board shall be conclusive proof that the estate land is conveyed or disposed of in contravention of subsection (1); and any act to demarcate an estate land or to cause or permit the demarcation of an estate land otherwise than in accordance with the provisions of this Act shall be prima facie proof that the person so acting, causing or permitting attempts to transfer, convey or dispose of the estate land in contravention of subsection (1).” [52] The effect of the provision is to relieve the party wishing to prove breach of section 214A(1) of the burden of adducing prima facie evidence of such breach. Proof of execution of the agreement is sufficient. If Yakin Tenggara’s reliance on this part of the judgment is to contend that the execution of the agreement on 28.10.2005 and the consent judgment entered into on 11.11.2015

pursuant to the compromise order provide proof that Gula Perak 19 had infringed section 214A(1), then we must say that the reliance is misplaced. [53] Section 214A(10A(b) only applies where the conveyance or disposal of estate land is to two or more persons (where it involves the whole of the estate land), and to one or more persons (where it involves any portion or portions of the estate land). But that is not the factual matrix of the case before us, which was an agreement to transfer the whole of the estate land to only one party, i.e. to Faithmont. This takes the case outside the scope of section 214A(10A)(b). Yakin Tenggara cannot therefore rely on the execution of the agreement as prima facie proof that section 214A(1) had been infringed. [54] Be that as it may, this is not a password for Gula Perak to get out of jail as its attempt to transfer the land to Faithmont, firstly through the agreement and subsequently through the compromise without first obtaining the approval of the Land Board is still an offence under section 214(10A)(a), the effect of which is to render both the agreement and the compromise unlawful. In law, unless the statute expressly so provide, there is no time bar for the prosecution of a criminal offence, even where the contravention has been rectified. [55] As for this court’s decision in Vellasamy which endorsed the decision of the High Court in Rengamah a/p Rengasamy v Tai Yoke Lai & Anor [1998] 1 CLJ 987 (“Rengamah”), this is what Abdul Malik Ishak JCA delivering the judgment of the majority said in dealing with section 214A(1) of the Land Code: 20 “Both Batu Kawan Bhd v Pentadbir Tanah Daerah Seberang Perai Selatan [2002] 2 MLJ 399; (FC) and Rengamah a/p Rangasamy v Tai Yoke Lai & Anor [1998] 5 MLJ 260 (HC) sided the plaintiffs and these two cases laid down a singular principle of law and that would be this. That s. 214A of the NLC is not a bar to agreements for the sale of land but rather it is only a bar to the registration of the transfer pursuant to the agreement. Section 214A(4) of the NLC clearly provides that the owner of estate land must make the application for approval to the Estate Land Board jointly with the intended purchaser. There is no need to obtain approval first before entering into any form of agreement with the intended purchaser. The agreement in this case accorded with the language and spirit of s. 214A(1) of the NLC as it provides that there can be no transfer of the land without approval of the Estate Land Board having first been obtained. The agreement, being a conditional agreement, was therefore not illegal, and could not be declared null and void. It would only become null and void if the Estate Land Board refused approval of the sale of the land, which was not the issue before the court (per Augustine Paul JC (now FCJ) in Rengamah a/p Rengasamy v Tai Yoke Lai & Anor).” (emphasis added) [56] Learned counsel for Ambank informed us that the decision has been affirmed by the Federal Court in Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o Pennusamy & Ors (on their behalf and for the 213 sub-purchasers of plots of land known as PN35553, Lot 9108, Mukim Hutan Melintang, Hilir Perak) and other appeals [2015] 1 MLJ 773 (“Gurbachan Singh”). [57] We have read Gurbachan Singh and we must say with due respect to learned counsel that it is not entirely correct to suggest that the majority view in Vellasamy on section 214A(1) of the Land Code has been affirmed by the Federal Court. Nowhere in the judgment did the Federal Court deal with, let alone decide on the 21 issue of whether approval from the Land Board must first be obtained before the parties can enter into an agreement to sell estate land. [58] The Federal Court decision must be understood in the context of the questions of law posed for determination. There were 5 questions posed for the Federal Court’s determination in that case and they were the following: Question 1: Whether the existence of, and scope of duties in, a solicitor-client relationship is to be determined only by reference to the retainer; Question 2: Whether a fiduciary is entitled to restitution of expenditure incurred in securing a benefit subsequently determined to be due and payable to the persons whom the fiduciary owes duties; Question 3: Whether a Court is entitled to lift the corporate veil of a company in order to do justice despite it not being the pleaded or argued case of the claimants that the company concerned was used as an engine of fraud; Question 4: Whether a trust could be imposed to allow the Respondents to acquire equitable interests in the land prior to receivership when the Respondents acknowledge that their claim is limited to only a portion of the total 3681 acres of undivided interest in the land; and Question 5: Whether claimed beneficial interest in fragmented portions of Estate Land contingent upon obtaining approval from the estate land board under Section 214A of the National Land Code 1965 and/or the consent of transfer from the Menteri Besar entitles the Court to declare beneficial interest for the purpose of an immediate equitable remedy. [59] Of the 5 questions, it is Question 5 if at all, that is of relevance to the issue before us. But the fact is, the Federal Court declined to 22 answer Question 5 along with Question 4, as it found it unnecessary to do so. We reproduce below what Richard Malanjum CJ (Sabah and Sarawak) delivering the unanimous decision of the court said at page 759: “In view of the findings we arrived at for Questions 1, 2 and 3, we are of the opinion that we need not answer Questions 4 and 5. As we have said above, Questions 1 and 2 may be determined on their own merits. They are not dependent on the determination of Questions 3 to 5. We therefore decline to answer Questions 4 and 5.” [60] Thus, although the Federal Court affirmed Vellasamy, it was not affirmation of the majority view that section 214A(1) of the Land Code is not a bar to agreements for sale of estate land without first obtaining the approval of the Land Board. The majority decision in Vellasamy was affirmed on entirely different grounds. Gurbachan Singh is therefore not authority for the proposition advocated by Ambank and the liquidators. [61] As for the Federal Court case of Batu Kawan Bhd v Pentadbir Tanah Daerah Seberang Perai Selatan [2002] 2 MLJ 399 relied on by the majority in Vellasamy, again we do not think, with the greatest of respect, that the decision is authority for saying that an agreement to sell estate land without the prior approval of the Land Board is not prohibited by section 214A(1) of the Land Code. [62] The issue before the Federal Court in that case was whether the restriction imposed by section 214A(1) was relevant in assessing the market value of estate land which was the subject of compulsory acquisition under the Land Acquisition Act 1960, which 23 the Federal Court decided that it was. The issue has nothing to do with the issue before us in these appeals. Therefore the ratio decidendi of the case is likewise irrelevant. [63] As we mentioned earlier, this court in Vellasamy endorsed the decision of the High Court in Rengamah. As a matter of fact the panel relied heavily on that decision. One of the issues for the court’s determination in Rengamah was whether the agreement to sell estate land was an “instrument of transfer” within the meaning of section 214A(1) of the Land Code. This is how Augustine Paul JC (as he then was) dealt with the issue: “Thus, the case of the agreement, cl 3 and the addendum make it clear that the formation of a binding contract of sale of the said land depends on obtaining the required approval of the Estate Land Board. The agreement would be rendered null and void if the approval is not obtained. It will become enforceable only upon fulfillment of the condition stipulated therein. Until that condition is fulfilled, the essential and main obligation of the parties, i.e. the obligation of the plaintiff to sell and the obligation of the defendants to purchase, remain inchoate (see Chi Liung Holdings Sdn Bhd v A-AG [1994] 2 SLR 354).” (emphasis added) [64] The learned JC then went on to apply Brown v Heffer (1967) 116 CLR 344, a case on testamentary will under the Closer Settlement Acts of New South Wales, after which he made the following observations: “It must further be observed that the receipt of a part of the purchase price by the plaintiff under the agreement does not alter the status of the parties nor the character of the agreement (see McMillan v McWilliam Wines Pty Ltd (1964) 114 CLR 656). The agreement therefore accords with the language and spirit of s 214A(1) of the NLC as it provides that there can be no transfer of the said land 24 without the approval of the Estate Land Board having first been obtained. The corollary is that the agreement does not amount to an instrument to transfer estate land within the meaning of s 214A(1) of the NLC.” (emphasis added) [65] What we can gather from the above pronouncements by Augustine Paul JC is that where a contract for the sale of estate land is conditional upon approval by the Land Board, the contract is only enforceable if that condition is fulfilled, because until that condition is fulfilled, the obligations of the parties remain inchoate, meaning to say the parties’ obligations under the agreement are put on hold pending approval by the Land Board. CONTINGENT CONTRACTS [66] In an ordinary conditional or contingent contract, a term in the agreement that requires a party to perform a certain act is valid and binding on that party and is enforceable at the instance of the other party unless the act is illegal or impossible of performance. That perhaps was the reason why Faithmont sued Gula Perak for specific performance to compel Gula Perak to obtain the requisite approval from the Land Board. It was on the premise that the agreement was valid and enforceable. [67] But that is the scenario in an ordinary contingent contract. In the context of contingent contracts involving estate land, we are inclined to think that it will be against the spirit and policy consideration behind section 214A(1) of the Land Code to allow estate landowners to execute sale and purchase agreements without first obtaining the approval of the Land Board. 25 [68] If Parliament has expressed a clear intention to prohibit transfer, conveyance or disposal of estate land “in any manner whatsoever” without the prior approval of the Land Board on pain of criminal prosecution, it stands to reason that an agreement to “transfer, convey or dispose of” estate land without first obtaining the approval of the Land Board will likewise be against the spirit and policy consideration behind section 214A(1) of the Land Code. INSTRUMENT OF DISPOSAL [69] Even if it is true that a sale and purchase agreement is not an “instrument of transfer” as decided by Augustine Paul JC in Rengasamy, it clearly is an instrument to dispose of estate land within the meaning of section 214A(1) of the Land Code. To our mind this is the kind of mischief that section 214A(1) is designed to strike down. [70] If the legislature had intended to exempt conditional agreements from the operation of section 214A(1), it would have said so in clear terms. There is none in the whole of section 214A. On the contrary, it provides through section 214A(10A)(a) that it is an offence to even attempt to “transfer, convey or dispose of any manner whatsoever any estate land in contravention of section (1).” [71] We are therefore unable to agree with Rengasamy that a conditional contract to sell estate land would only become void if the Land Board refuses approval of the sale. In our view such contract of sale is void from the beginning if no approval from the Land Board had first been obtained prior to the execution of the agreement. 26 [72] The corollary is that the consent judgment entered into between the parties on 11.11.2015 pursuant to the compromise order is void, not because Gula Perak breached any term of the compromise order but because it was an agreement by Gula Perak to “transfer, convey or dispose of” estate land without first obtaining the approval of the Land Board, which as we said is an offence under section 214A(10A)(a) of the Land Code and therefore a breach of section 214A(1). [73] It is irrelevant that Datuk Lim had on 28.10.2005 as a director of Gula Perak signed a Directors Circular Resolution approving the sale of the land on the terms and conditions as stated in the agreement. It is also irrelevant that the settlement sum of RM26 million offered by Faithmont under the compromise for the redemption of Ambank’s charge over the land is much higher than the contractual sum of RM19 million under the agreement. [74] Nor is it relevant that the sale price of RM19 million will not be enough to settle Gula Perak’s debt to Ambank. All these are irrelevant to the issue of whether the compromise, being an attempt to transfer estate land without first obtaining the approval of the Land Board, is unlawful for contravening section 214A(1) of the Land Code. [75] It is pertinent to note that this issue was not discussed in Rengamah. In fairness to the learned JC it was not an issue before the court. Therefore we do not see how Rengamah, and by 27 necessary implication Vellasamy which endorsed it, can be of assistance to Faithmont, Gula Perak and Ambank. VELLASAMY V. THAI THONG [76] The learned JC in the present case chose to follow Vellasamy and not Tai Thong, and there is nothing wrong with that of course: See the Federal Court decision in Dalip Bhagwan Singh v Public Prosecutor [1998] 1 MLJ 1 where Peh Swee Chin FCJ delivering the judgment of the court said at page 13: “In this connection it is interesting to refer to Cassel & Co v Broome [1972] AC 1027 at page 1054. It was held that courts in the tiers below the Court of Appeal cannot rely on the per incuriam rule applied by the Court of Appeal itself, but may choose between two conflicting decisions. We may add that they may so choose, whatever the dates of the conflicting decisions, as such dates do not matter to the Court of Appeal itself.” [77] Having regard to the view that we take on section 214A(1) of the Land Code, we do not find it necessary to comment on the reasons given by the learned JC for allowing the liquidators’ application under section 236 of the Companies Act, save to say that we are in agreement with the following pronouncement in Tai Thong: “The presence of the words “desiring to transfer, convey or dispose of in any manner whatsoever such land” and the words “to whom the land is to be transferred, conveyed or disposed of” (emphasis added) in sub-s. 214A(4) clearly meant that the obtaining of the approval must be done before the execution of the agreement by which the land would be conveyed or disposed of.” 28 INTERFERENCE WITH ADMINISTRATION OF JUSTICE [78] There is one last matter that we need to deal with before we pronounce our judgment. It was brought to our attention by Yakin Tenggara that subsequent to the filing of these appeals, Ambank and the liquidators of Gula Perak had executed the sale and purchase of the land and had further effected transfer of title to Faithmont. [79] It was submitted that this tantamounts to an abuse of the court process and an interference with the administration of justice in that it was an attempt to dispose of the subject matter of the appeals as quickly as possible to render it difficult for Yakin Tenggara to maintain its appeal. [80] Ambank’s curt answer to the complaint is that having regard to the current status of the land, the alleged breach of section 214A(10A)(a) of the Land Code is a non-issue and should be rejected accordingly. [81] Our first impression with regard to Ambank’s response to the complaint is that it fortifies the view that the Land Board’s approval is required where the parties are desirous of entering into a contract to “transfer, convey or dispose of in any manner whatsoever” any estate land. Such desire is manifested in the compromise itself and the final act of registering the land in the purchaser’s name is but a mere formality to give effect to that desire. [82] The case of Jasa Keramat Sdn Bhd & Anor v Monatech (M) Sdn Bhd [1999] 4 CLJ 533 CA provides a useful guideline as to 29 how the court should deal this type of situation. The following passage at page 541 of the judgment is relevant: “Since the circumstances in which the court’s process may be abused are varied and numerous, the categories of such cases are therefore not closed. Whether the institution of an action or its continuation or a step taken amounts to an abuse of process depends upon particular and individual circumstances. Where an action is found to be an abuse of the court’s process, it may be struck out or stayed. If it is too late to do this, the party aggrieved may bring an action based upon the tort of abuse of process.” [83] The learned judge went on to cite with approval the following pronouncement by Lord Denning MR in his dissenting judgment in Goldsmith v Sperrings Ltd & Ors [1977] 1 WLR 478 at page 489: “In a civilized society, legal process is the machinery for keeping and doing justice. It can be used properly or it can be abused. It is used properly when it is invoked for the vindication of men’s rights or the enforcement of just claims. It is abused when it is diverted from its true course so as to serve extortion or oppression: or to exert pressure so as to achieve an improper end. When it is so abused, it is a tort, a wrong known to the law. The judges can and will intervene to stop it. They will stay the legal process, if they can, before any harm is done. If they cannot stop it in time, and harm is done, they will give damages against the wrongdoer.” [84] In Malacca Malay Guru2 Co-operative Thrift & Loan Society Ltd v Tan Mei Hua & Ors [1970] 1 LNS; [1971] 1 MLJ 107 Sharma J in dealing with the issue of restitution decided as follows at page 109: “The jurisdiction to make restitution is inherent in every Court and is exercised whenever the justice of the case demands it (See Jai Berhm v Kedar Nath Marwari 49 IA 351; AIR 1922 PC 1; 24 LT 111; Prayag Narain v Kamekhea 36 IA 97). In 30 Lala Bhagwan Das v Lata Kishen Das [1953] SCR 559 the Supreme Court of India put the matter thus: On the reversal of a judgment, the law raises an obligation on the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the Court to enforce that obligation unless it is shown that restitution would be purely contrary to the real justice of the case. The underlying principle is that when the main judgment or order is varied or reversed, all orders consequential or depending upon it are affected and wrongs done under them have to be righted by granting restitution. In order to do this the Court may make any order including an order for the refund of costs of the payment of interest, damages, compensation or mesne profits as may properly be consequential on such variation or reversal of the order.” [85] Having regard to all the circumstances of the case and on the authorities that we have just referred to, we reject the argument that these appeals have become academic. It is clear to us that the decision by Ambank and the liquidators of Gula Perak to effect transfer of the land to Faithmont despite the pendency of these appeals is an abuse of process and an interference with the administration of justice. When faced with this kind of abuse, we cannot, as Lord Denning once said in a different context, wring our fingers and say “there is nothing we can do about it”. Justice demands that we do something about it. [86] The approval by the Land Board for the transfer of the land to Faithmont after the compromise order was obtained does not and cannot alter the fact that the compromise infringed section 214A(1) of the Land Code. An illegal agreement cannot be allowed to stand 31 and no party should benefit from such illegal agreement as a matter of public policy and principle. [87] Section 69(4) of the Courts of Judicature Act, 1964 empowers this court to do any of the following: “(4) The Court of Appeal may draw inferences of fact, and give any judgment, and make any order which ought to have been given or made, and make such further or other orders as the case requires.” [88] We agree with Yakin Tenggara that based on the illegal act of the liquidators of Gula Perak, Faithmont and Ambank in entering into the scheme of compromise without first obtaining the approval of the Land Board, this court is empowered to reverse the compromise order and to reinstate the position of the parties to their positions prior to the grant of the order. [89] For this proposition, we rely on the decision of this court in Tan Sri Dato’ (Dr) Rozali Ismail & Ors v Chua Lay Kim & Ors [2016] 3 CLJ 84 where Abdul Aziz Abdul Rahim JCA delivering the unanimous decision of the court inter alia said at page 104: “The next issue to be considered is what would be the consequences in a situation like ours wherein the appeal was allowed and the judgment of the High Court for RM35,087,135.06 was set aside. In our view, the principle is when a judgment is set aside then the court must put right the position of parties by ordering restitution. The status quo of parties must be restored to the position prior to the impugned judgment being granted. In other words, the court is seised with inherent jurisdiction to restore parties to status quo ante.” 32 OUR DECISION ON THE APPEALS [90] For all the reasons aforesaid, we allow Yakin Tenggara’s and Datuk Lim’s appeals and set aside the decision of the learned JC, and our decision is unanimous. Ambank’s appeal against the grant of a stay of the compromise order is struck out on learned counsel’s application, which has just been made. [91] Since we have allowed Yakin Tenggara’s and Datuk Lim’s appeals, and set aside the decision of the High Court approving the compromise, we do not see any other outcome of this decision except that the positions of the parties are to be restored to the positions they were in prior to the compromise order, and we so order. There shall be no order as to costs. Sgd ABDUL RAHMAN SEBLI Judge Court of Appeal Malaysia Dated: 3 January 2017. For Yakin Tenggara: Datuk Seri Gopal Sri Ram (S Revenesan, David Yii and Siti Nur Amirah Aqilah binti Adzman with him) of Messrs S Ravenesan. For Gula Perak: Dato’ K. Kirubakaran of Messrs Teh & Associates. 33 For Datuk Lim Sue Beng: Wong Rhen Yen (Jamie Wong and William Ch’ng with him) of Messrs Jamie Wong. For Ambank: Yoong Sin Min (Lau Kee Sern and Lim Pey Tsyr with her) of Messrs Shook Lin & Bok. For Faithmont: Bharti Seth (Ramesh Sanghvi and K. Kokilah with him) of Messrs Bharti Seth & Associates.