Laman Realiti Sdn Bhd v Rimau Indah Sdn Bhd (WA-28PW-402-08/2022)

By leave of the court; and

In accordance with such forms as the Court imposes. A similar provision is found in section 471(1) of the CA 2016. BACKGROUND FACTS [3] Bukit Rimau Development Sdn Bhd (“BRDSB”) was the original registered proprietor of the undivided land held under the Master Title Geran 36409 Lot 3783 situated at Mukim and District of Klang, Selangor (“the Master Title”). The Master Title was subsequently subdivided into four (4) individual separate titles, which includes HS

(D) 89073, No PT 99589 (“the said Land”). [4] By a Sales and Purchase Agreement dated 17.09.1999 (“the Respondent’s SPA”) entered into between the Respondent and BRDSB, the Respondent (formerly known as Seraya Selera Sdn Bhd) purchased the Master Title for the purposes of developing low to medium costs apartments known as Pangsapuri Rimau Indah (“the said Project”). [5] The said Land measuring 18,021 square metres/4.45 acres is the subject matter of the Applicant’s intended suit. [6] A winding-up petition, No. D10-28-196-2009, was filed against the Respondent on 25.03.2009. The Respondent was wound-up on 23.07.2009 (“the First Winding-Up Order”) and private liquidators were appointed (“previous Liquidators”). [7] However, the court allowed a stay of the winding-up order and consequently, the previous Liquidators were relieved of their appointment on or around July 2014. [8] On 26.02.2015, another winding-up petition vide Kuala Lumpur High Court (Winding-Up) No. 28NCC-136-02/2015 was filed against the Respondent. [9] The Respondent was ordered to be wound-up by the Kuala Lumpur High Court on 09.04.2015 (“the Second Winding-Up Order”) and Mr. Andrew Heng and Dato Heng Ji Keng were appointed as the joint liquidators of the Respondent (“the New Liquidators”). [10] The New Liquidators, upon taking over the management of the Respondent, discovered that the said Land had been fraudulently transferred to a company known as Jiwa Rakyat Sdn Bhd (“Jiwa Rakyat”). [11] The fraudulent transfer was carried out in the following manner:

Loh Kok Cheng and Te Chong @ Tee Kang Teng (“the Fraudsters”) had entered into a fictitious Sales and Purchase Agreement on 18.10.2004 without authorisation from the directors of the Respondent, for the sale of the whole Master Title with Chin Nyuk Pin (“Chin”) and Chow Cho Tai (“Madam Chow”) for a consideration of RM5,000,000.00.

Thereafter, on 11.05.2005, Chin and Madam Chow purportedly entered into a Sales and Purchase Agreement in respect of the said Land with Jiwa Rakyat (“the purported Jiwa Rakyat SPA”) for a consideration of RM3,500,000.00.

To facilitate the transfer of the said Land, Chin and Madam Chow had purportedly executed a fictitious declaration of trust of the said Land in favour of Jiwa Rakyat on 24.06.2009.

On 24.11.2009, about four (4) months after the First Winding-Up Order, Chin and Madam Chow purportedly executed a memorandum of transfer of the said Land in favour of Jiwa Rakyat. Thereafter, the said Land was registered in the name of Jiwa Rakyat. [12] Upon discovering the fraudulent transfer, the new Liquidators together with the Petitioners of the Winding-Up, initiated 22NCVC-709-12/2015 (“Suit 709”) on 29.12.2015 to recover the said Land. [13] Suit 709 was initiated against the following parties: a. First Defendant – Jiwa Rakyat; b. Second Defendant – Bukit Rimau; c. Madam Chow; and d. Chin. [14] On or around the year 2016, Madam Chow had affirmed a statutory declaration and obtained a judgment vide WA-24NCC-80-03/2016 (“OS 80”), inter alia, for a declaration, that: a. Madam Chow never at any material time hold a position as the director of the Respondent; and b. Madam Chow did not at any material time execute the SPA and the declaration of trust in favour of Jiwa Rakyat. JUDGMENT & ORDER IN SUIT 709 [15] Following the judgment in Suit 80, the Respondent had on 14.11.2017, obtained a judgment from the Kuala Lumpur High Court in Suit 709 for a declaration, among others, that the ownership and registration of the said Land to Jiwa Rakyat is void ab initio, invalid and should be set aside. [16] Pursuant to the decision in Suit 709, the Respondent had on 23.01.2018 obtained an order to transfer and register the said Land in the name of the Respondent. [17] Pursuant to both the judgment dated 14.11.2017 and order dated 23.01.2018 (“the Judgment and Order”), the Respondent was registered as the proprietor of the said Land on 20.03.2018. Until today, the Judgment and Order have not been appealed against nor set aside by any party, thus it remains valid and binding. SALES AND PURCHASE (SPA) OF THE APPLICANT [18] On 13.06.2011, the Applicant entered into two (2) Sales and Purchase Agreements with Jiwa Rakyat for certain portions of the said Land, namely: a. The First portion measuring 1.1 acres for the consideration sum of RM3,354,120.00 and defined as Parcel C [Refer to page 4 of Applicant’s affidavit in support]. b. The Second portion measuring 1.1 acres for the consideration sum of RM3,354,120.00 and defined as parcel B [ Refer to page 5 of Applicant’s affidavit in support]. [19] It is pertinent to note that: a. The said Land measures 4.45 acres in its entirety; b. The Applicant purported SPA’s claim is only limited to 2.2 acres; and c. In brief, the Applicant is claiming on the undivided share of the said Land. [20] The Applicant had on 13.01.2020 (nine years after the applicant’s SPA) initiated a suit vide suit number 22NCVC-30-10/2020 (“Suit 30”) and sought, inter alia, for an order for the said Land to be registered under the Applicant’s name as well as damages against the Respondent and others. However, Suit 30 was struck out by the High Court due to the Applicant’s non-compliance with case management directions. The Applicant had also lodged Private Caveats on the said Land. [21] The Respondent filed a suit vide number WA-24NCC-1657-09/2021 (“OS 1657”) to remove the Private Caveats lodged by the Applicant. [22] On 16.08.2022, the Court in OS 1657 ordered the Applicant’s Private Caveats to be removed. The Learned High Court Judge in removing the Applicant’s Private Caveats held, inter-alia, that: a.

the Applicant’s claim cannot be dealt with by the Winding-Up

The Applicant has a prima facie claim against the Respondent. [27] In Boardroom Advisory Sdn Bhd v Byard Spiral Mill Sdn Bhd

1 LNS 1447, the High Court when applying the above test in the case before it held: “…the cases establish that two criteria need to be fulfilled by an applicant before the court exercises its discretion to grant or not to grant leave. The first is that the applicant’s claim cannot be dealt with by the Winding-Up Court and the second is that the applicant has a prima facie case against the company (see Mosbert Berhad (In Liquidation) v Stella D’Cruz (1985) 1 LNS 47, and Mesuntung Property Sdn Bhd v Kimlin Housing Development Sdn Bhd (2014) 1 CLJ 202).” [28] While it is self evident that the remedies sought by the Applicant cannot be adequately dealt with by the Winding-Up Court, the pivotal issue is whether the Applicant has shown that it has a prima facie case against the Respondent. [29] Having read the Affidavits and submission by the parties, this Court finds that the Applicant has failed to establish that it has a prima facie case against the Respondent for the following reasons:

The Judgment and Order have not been set aside and/or appealed against;

It is pertinent to note that in Suit 30, the Applicant did not seek to set aside the Judgment and Order. In fact, the Applicant in Suit 30 had at the material time agreed that Jiwa Rakyat was a fraudster. In the Applicant’s affidavit in support, in Suit 30, the Applicant avers that:

Memandangkan perkara di atas, Defendan Pertama tidak pernah menjadi pemilik sah tanah tersebut dan oleh itu Defendan Pertama tidak layak dana tidak berhak di sisis undang-undang dan/atau fakta untuk menjual tanah tersebut kepada Plaintiff. Hakmilik tanah yang telah didaftarkan atas nama Defendan Pertama bukanlah hakmilik yang bersih dan tidak boleh disangkal seperti yang diputuskan oleh Yang Arif hakim Mahkmah Tinggi yang bijaksana. (Defendan Pertama above refers to Jiwa Rakyat)

This Court is in agreement with the Respondent’s submission at paragraph 73, where it submits: “(73) It is only now the applicant is seeking for the first time to set aside the Judgment and Order in the intended suit. Clearly, these are not based on facts which were found only recently. This is clearly and afterthought by the Applicant.”

The Applicant is bound by the Judgment and Order in Suit 709, (see: Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1996] 2 MLJ 57 (ca) [page 75 of TAB-6], the Court held: “We cannot over-emphasise the proposition that once a judge makes a ruling, substantive or procedural, final or interlocutory, it must be adhered to and may not be reopened willy-nilly.” (See: Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 (ca) [page 83 of TAB-7]).

Furthermore, it is trite law that once the issues in a suit have been determined in finality, the same issues are barred by the doctrine of res judicata and/or issue estoppel in subsequent proceedings. (See: Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 (SC) [page 99 of TAB- 9]). [30] The Applicant submits that it was not a party to suit 709. Thus, it is not bound by the court judgment and order. I find this submission to be misconceived because it is settled law so long as the Judgment and Order arise from the same facts, the doctrine of res judicata and issue estoppel can be invoked. See: Dato’ Sivananthan A/L Shanmugam Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 (CA) where the Court of Appeal held; “[25] In the present appeal, since the present action would undoubtedly involve going over precisely the same facts as in the previous HTF suit, and accepting the broader approach and the wider sense of res judicata as the preferred and correct legal position, the fact that the parties to this suit are different from the HTF suit does not disentitle the appellant to invoke the doctrine of issue estoppel to bar the respondent from relitigating a specific issue that had been decided in the prior separate action. The doctrine also applies to a non-party. It is therefore not necessary for parties to be the same in both actions. What the doctrine seeks to prevent is an abuse of the process of the court by attempting to make a double claim as well as allowing the plaintiff to relitigate its cause for the same relief and based on the same subject matter for which judgment had successfully been obtained in the HTF suit and to produce the same set of facts, the same witnesses and the same documents (see Seruan Gemilang Makmur Sdn Bhd v Badan Perhubungan UMNO Pahang Darul Makmur).” [31] I also accept the Respondent’s submission at para 79 and 81 in which it contends as follows: “(79) Further, the Applicant was aware of the Respondent’s interest on the said Land back in the year of 2012, whereby the Applicant’s solicitors for the Applicant’s Purported SPAs had duly informed the solicitors of Jiwa Rakyat that the Respondent is challenging the interest of the said Land.

Suit 709 was only determined in 2018. The Applicant could have and should have intervened in Suit 709 to protect their purported interest.” SECTION 340(3) IS NOT APPLICABLE TO THE APPLICANT [32] In the Draft SOC, the Applicant sought a declaration that it is entitled to be registered as proprietor of the said Land because it was a bona fide purchaser. [33] The Applicant cannot rely on section 340 (3) of NLC and claim to be the bona fide purchaser. This is wholly misconceived in both in law and fact. The Applicant does not come under the category of bona fide purchasers pursuant to section 340 of the NLC. In other words, indefeasibility is a protection for the registered proprietor of a land. Only a registered proprietor would be conferred with the protection of indefeasibility under the NLC. [34] Therefore, for the above reasons I find that the Applicant has failed to satisfy this Court that it has a prima facie case against the Respondent, and I dismiss this application with costs of RM7,000.00. Dated 2nd January 2024 …………t.t……….. Ahmad Murad Bin Abdul Aziz Judge High Court of Malaya Kuala Lumpur COUNSEL FOR THE APPLICANT: EUGENE KHOO YEAN SHERN SOLICITORS FOR THE APPLICANT: TETUAN GANAESWAREN & LATIB COUNSEL FOR THE RESPONDENT: VENKA ARUN WITH JOAN MARIE JACOB SOLICITORS FOR THE RESPONDENT: TETUAN VEN & ASSOCIATES Cases Referred to: ➢ Boardroom Advisory Sdn Bhd v Byard Spiral Mill Sdn Bhd (2019) 1 LNS 1447 ➢ Mosbert Berhad (In Liquidation) v Stella D’Cruz (1985) 1 LNS 47 ➢ Mesuntung Property Sdn Bhd v Kimlin Housing Development Sdn Bhd

1 CLJ 202). ➢ Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1996] 2 MLJ 57 (ca) [page 75 of TAB-6]. ➢ Gulf Business Construction (M) Sdn Bhd v Israq Holding Sdn Bhd [2010] 5 MLJ 34 (CA) [page 83 of TAB-7] ➢ Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 (SC) [page 99 of TAB-9] ➢ Dato’ Sivananthan A/L Shanmugam Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 (CA) [page 181 of TAB- 13]: Legislation Referred to: ➢ Section 226(3) of the Companies Act 1965 ➢ Section 471(1) of the Companies Act 1965 ➢ Section 340 of the National Land Code Decision Date : 21.02.2023