Che Jah Binti Othman (Sebagai Pentadbir Bagi Harta Pusaka Si Mati Osman Bin Harun) v HANDY GOALS MINING SDN BHD (BA-12B-120-11/2024)

This is an appeal filed by the defendant against the decision of the learned Sessions Court Judge in allowing the plaintiff’s claim and dismissing the defendant’s counter-claim.

The plaintiff’s claim is for the recovery of a 10% deposit of RM467,489.86 paid by the plaintiff to the defendant for the purchase of land.

Parties will be referred to as in the Session Court. B.

On 4th July 2016, the plaintiff and the defendant signed a Sale and Purchase Agreement for the purchase of Malay Reserved Land under PM762 Lot 8972, Mukim Dengkil, RKT Sungai Merab II, District of Sepang, Selangor, at the purchase price of RM4,674,898.98. The agreement was signed by Ahmad Faizal bin Zaidi and Muhamad Zulkarnain bin Donal Ang for the plaintiff and vendor, Che Jah binti Othman. The defendant acts in the capacity of administrator of the estate of the deceased, Osman bin Harun.

The plaintiff paid a 10% deposit for the land on 19 May 2016, amounting to RM93,497.97, which is 2% of the purchase price. The remaining 8% deposit was paid on 15 August 2016, amounting to RM373,991.89. The plaintiff paid a total deposit of 10% for RM467,489.86 to the defendant.

The issue document of title of the said land is subject to a restriction in interest, which states – Tanah ini tidak boleh dipindahmilik, dipajak atau digadai melainkan dengan kebenaran Pihak Berkuasa Negeri.

Among other terms, the Sale and Purchase Agreement includes the following – WHERE IT IS MUTUALLY AGREED as follows:

1.

1.1 The parties hereto hereby agree that this Agreement is conditional upon the following:-

The said Vendor have successfully obtain the necessary court order to sell and/or transfer the said Property to the Purchaser within six months from the date of receipt of the two (2%) percentum of the Purchase Price hereinafter mentioned. In the event the Vendor fails to obtain the necessary court order to sell and/or transfer within the said Period, the Vendor is to refund the two (2%) percentum within fourteen (14 days) calculated from the last day of the said Period;

(ii) The Purchaser’s Solicitor receipt of the consent to transfer in favour of the Purchaser from the appropriate State Land Authority (hereinafter referred to as “the State Authority’s Consent”) within three (3) months from the date the said court order to sell and/or transfer the said Property (“Application Period”) being fulfilled. The Vendor shall forward a copy of the presentation receipt upon request by the Purchaser for record purposes only. Upon receipt of the said State Authority’s Consent, this Agreement shall become unconditional.

1.2 In the event that the Condition Precedent is rejected or granted upon such terms and conditions unacceptable to the relevant party, such party shall as soon as practicable submit the appeal to the relevant authorities to endeavour to secure such approvals upon terms and conditions acceptable to the party wihtin the Application Period.

1.3 In the event that the Vendor shall fail to fulfll the Condition Precedent within the Application Period for any reason whatsoever after the initial submissions for approval or after the appeals, either party hereto may serve a notice on the rescinding this Agreement whereupon the Vendor shall not later than fourteen (14) days from the date of the rescission refund to the Purchaser free of interest all monies paid by the Purchaser to the Vendor toward account of the Purchase Price. Thereafter neither party shall have any claim against the other arising from this Agreement, save and except for antecedent breach.

The defendant has met the requirement under clause 1.1(i) by obtaining a court order dated 20.4.2016 to sell the land to the plaintiff.

By a letter dated 3.8.2017 from Pejabat Tanah dan Galian Selangor (PTGS) addressed to the plaintiff, the application to list the plaintiff under the Third Schedule of the Malay Reservations Enactment (FMS Cap. 142) (MRE (Selangor) was rejected.

The defendant pleaded that the plaintiff was supposed to appeal against the decision, but the plaintiff failed to do so. C.

Based on the Memorandum of Appeal and the submissions from both parties, the main issue for this Court to decide is whether the Session Court Judge was plainly wrong in allowing the plaintiff’s claim and dismissing the counterclaim.

Therefore, this Court has to decide the issues as follows-i. Whether the Sale and Purchase Agreement is an illegal contract. ii. Whether the plaintiff has failed to fulfil its obligation to change the shareholding structure of Handy Goals Mining Sdn Bhd. D.

The law regarding appellate intervention is settled. This Court should not interfere with a trial judge’s findings unless those findings are plainly wrong. In the case of Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453, the Federal Court decided as follows – [60] It is now established that the principle on which an appellate court could interfere with findings of fact by the trial court is "the plainly wrong test" principle; see the Federal Court in Gan Yook Chin & Anor (P) v. Lee Ing Chin @ Lee Teck Seng & Anor [2004] 4 CLJ 309; [2005] 2 MLJ 1 (at p. 10) per Steve Shim CJ SS. More recently, this principle of appellate intervention was affirmed by the Federal Court in UEM Group Berhad v. Genisys Integrated Engineers Pte Ltd [2010] 9 CLJ 785 where it was held at p. 800: It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence. (See Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32; Watt v. Thomas [1947] AC 484; and Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309). E. ANALYSIS AND DECISION Issue 1: Whether the Sale and Purchase Agreement is an illegal contract

The plaintiff and the defendant fully understand and agree that the SPA is subject to preconditions, as specified in clause 1. The wording in clause 1.1 states – ‘The parties hereto hereby agree that this Agreement is conditional upon the following:’

The defendant argued that the plaintiff had breached the Sale and Purchase Agreement (SPA) due to the plaintiff's failure to appeal against PTGS's refusal to provide consent for the transfer of the land to the plaintiff. The defendant's argument is based on clause 1.2 of the SPA, which states –

1.2 In the event that the Vendor shall fail to fulfil the condition precedent within the Application Period for any reason whatsoever after the initial submissions for approval or after the appeals, either party hereto may serve a notice on the other rescinding this Agreement, whereupon the Vendor shall not later than fourteen (14) days from the date of the rescission refund to the Purchaser free of interest all monies paid by the Purchaser to the Vendor toward account of the Purchase Price. Thereafter neither party shall have any claim against the other arising from this Agreement, save and except for antecedent breach.

However, the plaintiff argued that the SPA is an illegal contract because the consideration for the sale and purchase of the land is prohibited by law. The Session Court Judge agreed with the plaintiff and allowed the claim with costs.

It is a well-established principle that, when interpreting a written instrument, the intention of the parties should be determined from within the four corners of the instrument itself, in our case, the Sale and Purchase Agreement. The Court of Appeal in Antara Vista Sdn Bhd v Rumaya Properties Sdn Bhd [2017] MLRAU 495 held - [19] One of the cardinal rules of interpretation of a contractual document has been that the court ought not to look beyond what was contained within the four walls of the contract document. The contract document must contain within its four walls what the parties have agreed to be bound for, in the performance of the contract. What is not contained within its four walls would necessarily mean that such omission was intentionally so omitted by the contracting parties. It is not the role of the Court to read into the contract documents what was not expressly spelt out in the contract. The Court's role is to interpret, not to re-write, the contract document for the parties. In the Federal Court case of Tractors Malaysia Bhd v. Kumpulan Pembinaan Malaysia Sdn Bhd [1978] 1 MLRA 345; [1979] 1 MLJ 129 learned Justice Chang Min Tat FJ had occasion to state that 'where a contract has been reduced to writing, it is in the writing that we must look for the whole of the terms made between the parties.

Similarly, in Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 (CA), the Court of Appeal decided that – “[31] … In law, parties are bound by the terms of the contract that they have entered into and likewise in this case, the rights and obligations of the parties are governed by the agreement. The intentions of the parties are to be gathered from the language used. They are presumed to have intended what they said (see Michael C Solle v United Malayan Banking Corporation [1986] 1 MLJ 45). The duty of the court is to give effect to the clear intention of the parties as expressed in the agreement. If the words are clear, unambiguous and in unmistakable language, there is very little the court has to do. The court must give effect to the plain meaning of the words however much it may dislike the result.”

Therefore, in light of the principles outlined above, it is appropriate for this Court to scrutinise the language employed in the SPA to ascertain the parties' intention.

Since the contract is documented in writing and the parties are bound by the terms of the document in which they formalised their agreement, neither party may introduce evidence to claim that their intentions have been misrepresented.

Next, what is the parties' intention in the SPA? From the reading of clause 1 Condition Precedent, it is clear that – i. The defendant agreed to sell the land, which is Malay Reserved Land, to the defendant, a company. ii. Both parties agreed under clause 1.1(ii) that the SPA shall only become unconditional upon receipt of the State Authority’s consent for the land transfer to the plaintiff. iii. If the condition precedent is rejected, such party shall as soon as practicable submit an appeal to the relevant authority.

According to the defendant, the plaintiff did not file an appeal after his application for consent to transfer was rejected by the state authority. The plaintiff also failed to satisfy certain criteria imposed for purchasing the land. The plaintiff neither resubmitted the application nor did the defendant take any action to meet the condition.

After thoroughly reviewing clause 1 in its entirety, with due respect, this Court finds that the defendant’s argument is flawed. This Court's reasoning is outlined below.

Even if the plaintiff were to appeal the said decision, the application to transfer the property to Handy Goals Mining Sdn Bhd cannot be approved by the state authority. I refer to the letter dated 3.8.2017 from Pejabat Tanah dan Galian Selangor, which clearly states that the reason for the refusal is that Handy Goals Mining Sdn Bhd is not Malay under the MRE (Selangor).

Paragraph 2 of the letter states – Dimaklumkan bahawa Pengarah Tanah dan Galian Selangor telah menolak permohonan tuan pada 3 Ogos 2017 untuk menyenaraikan Handy Goals Mining Sdn Bhd ke dalam Jadual Ketiga Enakmen Rizab Melayu (Selangor) (Bab 142).

It is important to note that before the plaintiff’s application to transfer the land is granted, the plaintiff must first be a Malay within the meaning of the law.

Section 2 of the Malay Reservations Enactment defines Malay as – "Malay" means a person belonging to any Malayan race who habitually speaks the Malay language or any Malayan language and professes the Moslem religion;

Section 8 of the MRE (Selangor) provides – Subject to the provisions of sub-section (ii) and of Sections 16 and 17, no Malay holding shall be transferred, charged, leased or otherwise disposed of to any person not being a Malay, and no memorandum of transfer, charge or lease in contravention of this section shall be capable of registration in any Land Office or Registry of Titles.

In Derek Victor Cawton & Anor v Fatimah Mohd Hashim [2015] 5 CLJ 788, the Court of Appeal held that – [17] In the light of the very clear prohibition, reliance upon WJ Alan & Co Ltd v. EL Nasr Export & Import Co (supra) is misplaced because the restriction affecting the appellants is by the Malay Reservations Enactment, statute law applicable to all and whereas this case concerns the legal rights inter se between the parties. We also cautioned ourselves that the words "The time has come..." in Boustead Trading Sdn Bhd v. Arab-Malaysian Merchant Bank Bhd (supra) cannot possibly mean that the court can legislate or make law contradicting statute law, or that the equitable doctrine of estoppel can be applied at will. That would lead to anarchy. The doctrine of estoppel is limited to achieving justice according to law. Indeed in Robert Lee & Anor v. Wong Ah Yap & Anor (supra), the Federal Court had made it abundantly clear that no rule of equity is to be allowed to stand in the face of the objective of statute law. … [19] We observe that while s. 8(1) of the Enactment provides that no memorandum of transfer, charge or lease in contravention of this section shall be capable of registration, the section prohibits any Malay holding not only from being transferred, charged, or leased but also from being otherwise disposed of to any person not being a Malay. And s. 19(1) of the Enactment further provides that "all dealings or disposals whatsoever and all attempts to deal in or dispose of any Malay holding contrary to the provisions of this Enactment shall be null and void..." The terms "... or otherwise disposed of..." and "... all attempts to deal in or dispose..." extend the prohibition beyond transfers, charges and leases, and therefore prohibits and renders null and void leases not capable of registration.

The learned counsel for the plaintiff has referred to section 24(a) of the Contract Act 1950 –

The consideration or object of an agreement is lawful, unless -

It is forbidden by law;

It is of such a nature that, if permitted, it would defeat any law.

It is fraudulent.

It involves or implies injury to the person or property of another; or

The court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.

This Court also refer to Section 7 of the MRE (Selangor), which provides that no state land included within a Malay reservation shall be sold, leased, or otherwise disposed of to any person who is not Malay.

The learned counsel for the plaintiff has referred to section 24 of the Contract Act 1950 and submits that section 24 should be read together with Section 25 of the Contract Act 1950. Section 25 of the Contract Act provides for the effect of a contract in which the consideration is unlawful. Section 25 of the Contract Act 1950 states – If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void.

It is also pertinent to refer to the long title of the MRE (Selangor) which reads – An Enactment to amend and consolidate the law relating to Malay Reservations and to provide for securing to Malays their interests in land.

Based on the long title, the MRE (Selangor) was introduced to prevent all lands declared as Malay holdings from being sold, charged, leased, or transferred to a non-Malay.

Considering that the subject matter of the agreement involves a Malay Reserved Land governed by the MRE (Selangor), this Court is bound by the decision in Agasta Co Ltd & Anor v Autopulence Sdn Bhd & Another Appeal [2025] 7 CLJ 707, where the Court of Appeal held – [56] It has to be further emphasised that it is the bounden duty of the court to give effect to the law. To excuse acts that are contrary to law or public policy simply on the basis of their pervasiveness would be a dereliction of that duty. The court is a court of law, not a court of widespread practices.

Having read the SPA together with the provisions under the NLC, Contract Act and the MRE (Selangor) this Court cannot arrive at any conclusion other than that the SPA dated 4.7.2016 is a void contract.

Regarding the remedy awarded to the plaintiff, the Session Court Judge agreed with the learned counsel for the plaintiff and additionally cited Section 66 of the Contract Act 1950. Section 66 of the Contract Act 1950 reads – 66 Obligation of person who has received advantage under void agreement, or contract that becomes void. When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.

In Detik Ria Sdn Bhd v Prudential Corporation Holdings Ltd & Anor [2025] 4 CLJ 159, the Federal Court elaborated on the application of section 66 of the Contract Act regarding the void contract.

A condition requiring the occurrence of an event beyond the parties' control before the contract comes into effect is a paradigm example of a contingent condition within the ambit of s. 33. Prudential argued that because the contingent condition had not occurred, ie, approval, the contract was still valid and subsisting such that it could be enforced by way of specific performance. The flaw in this argument was that the contract had, in large part, already been carried out. The respondents and the appellant could not pretend that the contract was inchoate and had not yet breached the IA. Accordingly, the CPOA and SCPOA were void. Since the contract was found to be one that became void, s. 66 of the CA was relevant and applicable to determine the remedial obligations of the parties. … [104] On the present facts, the contract was contingent upon the event of the Minister of Finance's consent. This event became impossible at the point at which substantial performance of the contract was effected, without such consent. It is not possible for the Minister of Finance to give his consent for the performance of a contract that has already been performed. [105] The present appeal is similar to the case ofNational Land Finance Co-operative Society Ltd v. Sharidal Sdn Bhd [1983] 2 CLJ 76; [1983] CLJ (Rep) 282; [1983] 2 MLJ 211 ('Sharidal '). In Sharidal, an agreement to sell property became void because of the Foreign Investment Committee's refusal to approve the sale - a decision which neither party in that case had control over. [106] A condition requiring the occurrence of an event beyond the parties' control before the contract comes into effect is a paradigm example of a contingent condition within the ambit of s. 33. In this regard, the following exposition in Sharidal is instructive: It is therefore obvious that the parties have entered into a contract of sale contingent upon the approval of the transaction by the FIC over which the parties had no control. There was no promise, nor guarantee that such approval would be given. Such a condition, in our judgment, is more than a mere essential stipulation of the contract, a breach of which entitles an innocent party to regard itself as discharged from further performance and to sue for damages. It is, however, a condition which is known in the law of contract as a contingent condition, the effect of which is that a contract shall not take effect unless and until the condition is fulfilled. (See Trans Trust SPRL v. Danubian Trading Co Ltd [1952] 2 KB 297 304 - per Denning, LJ - and Property and Bloodstock Ltd v. Emerton Bush v. Property and Bloodstock Ltd [1967] 3 All ER 321 330 - per Sachs, LJ.) Until the FIC approval was given liability for further performance remained unenforceable, ie, suspended although neither the respondents nor the appellants could resile from it until it could be definitely ascertained that the condition could not be fulfilled. This is in effect laid down by section 33(a) of the Contracts Act?

Similarly, in the present case, there is no guarantee or promise that approval will be granted for the land to be transferred to the defendant, even if the defendant appeals. Both parties were aware of the consequences of the illegality if consent to transfer the land cannot be obtained, since the land is subject to prohibition under the MRE (Selangor).

It is my considered opinion that the learned Session Court Judge made no error in ruling that the SPA is illegal and void. The consideration of the agreement is clearly prohibited by law. The learned Session Court Judge is correct in granting the relief sought by the plaintiff. Issue 2: Whether the plaintiff has failed to fulfil its obligation to change the shareholding structure of Handy Goals Mining Sdn Bhd.

The defendant submitted that the learned Session Court Judge erred in failing to consider that the plaintiff failed to fulfil its obligation under the SPA.

Having read the SPA, this Court finds that there is no provision or precondition agreed upon for the plaintiff to alter its shareholding structure to enable Hand Goals Mining Sdn Bhd to be listed in the Third Schedule of the MRE(Selangor), as stipulated in the letter issued by PTG Selangor dated 3.8.2017.

The company search issued by the Companies Commission of Malaysia for the plaintiff shows that one of the shareholders originates from East Malaysia, namely Muhamad Zulkarnain bin Donald Ang (NRIC No. 821103-12-5147).

In Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLRA, it was held by the Federal Court as follows – [54] In Trollope & Colls Ltd v. North West Metropolitan Regional Hospital Board [1973] 1 WLR 601 Lord Pearson remarked:... the court does not make a contract for the parties. The court will not even improve the terms which the parties have made for themselves, however desirable the improvement might be. The court's function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been suitable. An unexpressed term can be implied if and only if courts find that the parties must have intended that term to form part of their contract.

Therefore, it is not for this Court to amend the words in the SPA or to add terms that would require the plaintiff to alter its shareholding structure.

Furthermore, the learned counsel for the defendant questioned PW1 about the source of the 10% deposit paid to the defendant. This Court is of the view that the source of the 10% deposit is not a material issue to be considered for the following reasons –

The defendant did not contest the fact that she received a 10% deposit under the SPA.

(ii) The method of paying the 10% deposit and matters relating to the investment of PW1 in the plaintiff are not a material issue to be determined by this Court, given the fact that the defendant has admitted the payment of the deposit. F. CONCLUSION

Based on the reasons above, the appeal is dismissed with costs of RM10,000 subject to the allocator. Dated : 4th September 2025 Signed HAZIZAH KASSIM Judicial Commissioner High Court of Malaya (NCvC10) At Shah Alam, Selangor

For the Appellant : Mohammad Syahmi bin Nawawi Tetuan Azwad Ihsan & Co. (Johor Bahru, Johor)

For the Respondent : Vishnu Varna Tetuan Hakem Arabi & Associates (Federal Territory of Kuala Lumpur)