Manian A/L K. Marappan & 1 Lagi v Sinwufu Enterprise Sdn Bhd (J-02(NCVC)(W)-2082 & 2084-10/2017)

VIJAYA KUMARI A/P GANAPATHI … PERAYU-PERAYU SINWUFU ENTERPRISE SDN. BHD (NO. SYARIKAT: 641779-T) … RESPONDEN

MASHUDAN BIN KAMAR (NO. K/P: 510827-01-5471) BUSTANI BIN NADOR (NO. K/P: 370101-10-5075) KHAIRIL BIN SULAIMAN (NO. K/P: 560702-05-5467) (selaku pengamanah PERSEKUTUAN GURU-GURU MELAYU JOHOR,

Cawangan Batu Pahat) TETUAN T.K. LIM & CO. (didakwa sebagai sebuah firma guaman)

OMAR BIN HJ KASSIM (NO. KP: 581224-015753/5563163) … PIHAK-PIHAK KETIGA [(Dalam Perkara Mahkamah Tinggi Malaya, Di Muar Guaman No: 22NCvC-87-12/2013)

VIJAYA KUMARI A/P GANAPATHI … PLAINTIF-PLAINTIF SINWUFU ENTERPRISE SDN. BHD (NO. SYARIKAT: 641779-T) … DEFENDAN

KHAIRIL BIN SULAIMAN (NO. K/P: 560702-05-5467) (selaku pengamanah PERSEKUTUAN GURU-GURU MELAYU

JOHOR, Cawangan Batu Pahat) TETUAN T.K. LIM & CO. (didakwa sebagai sebuah firma guaman)

OMAR BIN HJ KASSIM (NO. KP: 581224-015753/5563163) … PIHAK-PIHAK KETIGA] Didengar Bersama DALAM MAHKAMAH RAYUAN MALAYSIA (Bidang Kuasa Rayuan) RAYUAN SIVIL NO: J-02(NCvC)(W)-2084-10/2017

OMAR BIN HJ KASSIM (NO. K/P: 581224-01-5753/5563163) … PERAYU-PERAYU

KHAIRIL BIN SULAIMAN (NO. K/P: 560702-05-5467) (menuntut sebagai pengamanah PERSEKUTUAN GURU-GURU

MELAYU JOHOR, Cawangan Batu Pahat)

5.

6.

HAJI SANUSI BIN HAJI LAMBING HAJI EKHWAN BIN MOHD OTHMAN @ DAIRY … RESPONDEN-RESPONDEN [(Dalam Perkara Mahkamah Tinggi Malaya, Di Muar, Guaman No. 22NCvC-46-05/2013)

KHAIRIL BIN SULAIMAN (NO. K/P: 560702-05-5467) (menuntut sebagai pengamanah PERSEKUTUAN GURU-GURU

MELAYU JOHOR, Cawangan Batu Pahat)

5.

6.

HAJI SANUSI BIN HAJI LAMBING HAJI EKHWAN BIN MOHD OTHMAN @ DAIRY… PLAINTIF-PLAINTIF

OMAR BIN HJ KASSIM (NO. K/P: 581224-01-5753/5563163) … DEFENDAN-DEFENDAN] CORAM BADARIAH BINTI SAHAMID, JCA LAU BEE LAN, JCA AZIZAH BINTI HAJI NAWAWI, JCA 4 GROUNDS OF DECISION 5 [1] These are 2 appeals lodged by the Appellants against the decision of the learned High Court Judge made on 27/9/2017 regarding 2 suits filed and heard together in the Muar High Court:

(i) Appeal No: J-02(NCvC)(W) -2082-10/2017 pursuant to a 10 claim filed by the Appellants against Sinwufu Enterprise Sdn Bhd (‘Sinwufu’) for vacant possession and trespass of lands (‘Appeal 2082’); and

(i) the Plaintiffs’ (Appellants) claim against the Defendant (Sinwufu);

(i) the Plaintiffs’ (PGMJ) claim against the 1st and 2nd 15 Defendants (1st and 2nd Appellants) in para 26.1 (a) ie, a declaration that the Sales and Purchase Agreement dated 28/6/2011 for the 5 Lands is null and void and para 26.1 (b) ie, to deliver vacant possession of the 5 Lands and transfer the same to the Plaintiffs (PGMJ) within 30 days; and 20

(a) by relying on s.28(2) of the Trustees Act 1949 in that the learned High Court Judge held that the POA was not valid because of s. 28(2) of the Trustees Act; 7

(b) the transfer in any event, premised on the evidence was also 5 flawed in that PGMJ did not authorise the sale of the 5 Lands to the Appellants; and

(c) the registration of title should be set aside because of the fraud of Omar and the allegation of conspiracy allegedly between Omar and the Appellants. 10 [10] After careful consideration of the Submissions of the respective Counsel, written and oral and having perused the Records of Appeal before us, we are of the view that the primary issue is the legal issue of the validity of the PA, in that if the PA is invalid, then the transfer of the 15 5 Lands to the Appellants is in law invalid as submitted by Mr. Michael Chow, learned Counsel for PGMJ on the authority of Letchumanan Chettiar Alagappan@ I. Allagappan (as executor to SL Alameloo Achi alias Sona Lena Alamelo Acho, deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697, which we will address later. 20 [11] In the High Court in Suit 46, one of the main issues was whether the PA dated 3/1/2019 which was registered in the High Court, Muar is valid under the Constitution of PGMJ and s. 28 of the Trustee Act, 25 wherein the said PA was given by PGMJ to Omar. Having examined the contentions of the Appellants, Omar and PGMJ (paras 27 to 51, Grounds), the learned High Court Judge held– “[52] Oleh itu terma-terma di dalam surat kuasa wakil tersebut yang telah memberi kuasa kepada Omar bin Kassim untuk memindahmilik hartanah 30 kepada pihak yang lain telah melanggar peruntukan di bawah seksyen 28(2) dan 30 Akta Pemegang Amanah 1949.” 8 [12] The Appellants argued that the learned High Court Judge was 5 wrong to hold that the PA issued to Omar was invalid by ruling that any transfer of properties must be done by trustees on instructions of Jawatankuasa Tadbir and no one else for the following reasons:

(a) “S. 28 (2) says when trustees or personal representatives MAY appoint an attorney to act or sell property in any place 10 outside Malaysia. It does not say that this is the only situation when trustees can appoint an attorney. In other words, it is merely to regulate this one situation. It is not prohibitory in nature”. The case of Re Estate of ORM MSM Sevugan Chettiar Deceased [1949] 1 LNS 74 was cited as follows: 15 “The only other provisions of the Probate and Administration Enactment (Cap. 8) to which I need refer are ss. 42 and 79. When any executor is absent from the Federated Malay States and there is no executor within the Federated Malay States willing to act, letters of administration with the will annexed may be 20 granted to attorney of the absent executor, for the use and benefit of his principal, limited until he shall obtain probate or letters of administration to himself. In my view that is merely an enabling provision; It does not provide that where an executor is absent from the country, administration of the 25 deceased’s estate can be granted only to an attorney of the absent executor.”

(b) The right of any person sui generis to appoint an attorney exists in law as a matter of course under the common law citing 30 Jackson & Co. v Napper. In Re Schmidt’s Trademark [1886] CH D Vol.XXXV p. 162 at p.172 as follows: “In re Whitley before the Court of Appeal (1) with reference to signing a memorandum under the Companies Act of 1862, in which the Court held that the signature might be by an agent. And I understand the law to be 35 that, in order to make out that a right conferred by statute is to be exercised personally, and not by an agent, you must find something in the Act, either by way of express enactment or necessary implication, which limits the common law right of any person who STIRLING, J. is sui juris to appoint an agent to act on his behalf.” 40 9 The proposition that it is a common law right which cannot be 5 taken away except by express provision was approved in-

(i) Doresamy v. Public Services Commission [1971] 2 MLJ 127 where the High Court held at p.129 as follows: “On appeal Dean J. held that the common law right to appear and be heard through an agent cannot be restricted in the absence of 10 an expressed provision restricting or taking away that right.”; and

(c) In Tony Pua Kiam Wee v Government of Malaysia and another appeal [2019] 12 MLJ 1 at 31 [101] the Federal Court held as follows: 30 “[101] The general principle may be stated thus: a statute abrogates a common law principle where it expressly states an intention to abrogate that principle, or where it implicitly abrogates the principle by adopting a scheme that is wholly incompatible with the continued application of the common law principle.” 35 [13] In their rebuttal submission the Appellants argue that Letchumanan’s case is distinguishable in that (i) the PA in the former case was found to be invalid as a result of forgery and lack of 40 authentication unlike the present appeal where forgery was not PGMJ”s 10 pleaded case, (ii) there was clear intent on part of PGMJ to give the PA 5 to Omar based on the evidence of Ekhwan (the last surviving Committee Member of PGMJ) that PGMJ trusted Omar and discussed matters with Omar; Omar was the authorised intermediary between PGMJ and Jomari Holdings (company belonging to Manian and his late father) , all correspondence was copied to Power Corporate Consultants (Omar’s 10 company) and was instrumental in all of PGMJ’s affairs including refinancing of the Muar land; Ekhwan’s evidence that it was Omar who conducted the sale and purchase transactions and was the one who guided them how the sale should proceed, (iii) PGMJ’s own lawyer, Anandan’s (SP2) testimony that he drafted the PA on the instruction of 15 PGMJ to appoint Omar and ( iv) PGMJ did not tender the PA which they claimed was issued only in relation to the Muar Land while the Appellants tendered the PA that was executed in relation to the Muar Land and the Batu Pahat Lands. 20 [14] With respect we are unable to agree with the submission of the Appellants for the following reasons. We agree with PGMJ’s reliance on the case of Letchumanan (supra) wherein the Federal Court at p.699, among others, opined at Held 1 ( see also 743[63]) 25 that - “In any case for the instant claim to succeed, the validity of the impugned PA should first be proved. If the respondent could not show that the impugned PA was valid, then the instrument of transfer was defective. If the instrument of transfer was defective, then it would follow that the title of the respondent was 30 obtained by a void instrument. Title could not pass to the respondent if the instrument of transfer was not executed by the first appellant or lawful attorney. In the instant case, the respondent relied on a power of attorney, which, on its face, without the form of authentication, was not valid” 35 11 [15] We are of the considered view that Letchumanan’s case stands for 5 the proposition that the validity of the PA is fundamental and if the PA is invalid, then the transfer is also invalid. The other reasons proffered by the Appellants ie, (ii),(iii) and (iv) abovementioned [para 13] are not relevant to the legal argument at hand as they impinge on factual matters. 10 [16] As was correctly submitted by Mr. Michael Chow, s. 28 of the Trustee Act is the statutory exception to the rule of equity. In equity the principle of delegatus non protest delegare (non delegation) by a trustee is a strict rule and statute intervenes to mitigate the strictures of the strict rule. 15 [17] We agree with Counsel for PGMJ’s submission as we are fortified in our views by the following authorities. First, the learned authors, Geraint Thomas and Alastair Hudson in The Law of Trusts, Second Edition state-

(i) “The office of trustee is one of personal trust and confidence. The 20 person who holds it is required to exercise his own judgment and discretion. In the absence of express provision to the contrary, an individual trustee or the trustees collectively cannot refer or commit the trust or the exercise of trustee powers to a co-trustee or to another, or delegatus non potest delegare….Nor is it the case that only dispositive powers are subject to the rule: it also applies to 25 administrative powers.” (at para 15.01); and

(i) the trustee wants to deal with property outside Malaysia; and

Tiga orang Penjaga Amanah yang mesti berumur lebih daripada dua puluh satu (21) tahun dan yang bukan Jawatankuasa Tadbir akan di lantik dalam mesyuarat Agong Perwakilan Tahunan yang pertama akan memegang jawatan selama tempoh yang disukai oleh Persekutuan. Kepada ketiga-tiga Penjaga ini akan diserahkan segala harta benda yang tidak bergerak dan 15 mereka akan menjalankan dengan cara yang diarahkan oleh Jawatankuasa Tadbir.

Penjaga Amanah ini tidak boleh menjual, mengeluarkan atau menukar apa-apa juga harta benda Persekutuan ini dengan tidak mendapat izin dan kuasa daripada Jawatankuasa Tadbir yang diberi dengan bertulis 20 oleh Setiausaha Agong.” (Emphasis added) From the above it can be seen that the Constitution of PGMJ expressly vests the immoveable assets of the association in the names of the Trustees, which is in line with s. 9 of the Societies Act 1966 (Act 335). 25 [29] S. 9(b) of the Societies Act provides – “(b) the immovable property of a society may, if not registered in the names of trustees, notwithstanding the provisions of any written law to the contrary be registered in the name of the society, and all instruments 30 relating to that property shall be as valid and effective as if they had been executed by a registered proprietor provided that they are executed by three office-bearers for the time being of the society, whose appointments are authenticated by a certificate of the Registrar, and sealed with the seal of the society.” 35 (Emphasis added) The registration in the name of the society is a fall back position, so if not registered in the name of the trustees, then it can be registered in the name 18 of the society and can be dealt with in a particular fashion which is not 5 relevant here as the undisputed fact is that the 5 Lands were registered in the name of the Trustees qua trustees of the said association. [30] It can be observed that nowhere in the Constitution of PGMJ nor for that matter in the Societies Act 1966 is there any provision permitting 10 delegation whether by PA or otherwise. As a society, the extent of the powers of the association are determined by the constitution of the association and everyone dealing with the association is deemed to have knowledge of the powers of the association and what it can or cannot do. This can be contrasted with Table A of the Companies Act 1965 , which 15 contains provisions which permit directors to appoint agents by way of power of attorney. [31] There is a suggestion by the Appellants that in order to get over the non delegation rule, they say the PA is the power of attorney of PGMJ. 20 To rebut this submission, Counsel for PGMJ submitted (i) nothing in the PGMJ Constitution which allows for delegation by way of appointment of PA (ii) the principle of constructive notice ie., everybody is deemed to have knowledge of the Articles of Association of a body, whether incorporated or otherwise. As there is absence of the provision allowing 25 for the appointment of agent by way of power of attorney in the Constitution, the question of the application of the Turquand rule does not arise at all because this goes to capacity and not to exercise of power. 19 [32] Learned Counsel for PGMJ conceded the Turquand rule applies 5 even to a society but there is a distinction between abuse of power or improper exercise of power and the ultra vires doctrine. If a body does not have the capacity, that goes to ultra vires, the Turquand rule does not cure the ultra vires action which in law is ultra vires, outside the capacity of the body. We have no quarrel with the distinction to be drawn as the following 10 cases will demonstrate. [33] We agree with the aforesaid submission of the PGMJ that in this case, the Turquand rule does not arise at all because of the absence of provision allowing for the appointment of agent by way of power of 15 attorney in the PGMJ Constitution, which goes to capacity and not to the exercise of power. We draw support from the textbook, Thomas On Powers, Second Edition by Geraint Thomas which demonstrates the application of the Turquand rule and how it has no application when one is talking of the absence of capacity. At para 7.57, the learned author, 20 among others, states- “It is fundamental principle that a company, being an artificial person, has no capacity to do anything outside the objects specified in its memorandum of association. The same principle applies, in fact, to statutory corporations generally and, indeed, to societies which ‘owe their constitution to, or are 25 regulated by deeds of settlement or rules, deriving their effect more or less from Acts of Parliament’….The core significance of the doctrine is that, if a transaction is outside the legal capacity of the entity in question, such as outside the objects of a company, then it is ultra vires and in law it is wholly void. Hobhouse LJ stated in basic position in Credit Suisse v Allerdale Borough Council.” 30 At para 7.58, the learned author quoted a passage from the judgment of Browne-Wilkinson LJ in the case of Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246, 302-03, as follows: “..much of the confusion that has crept into the law flows from the use of the phrase ‘ultra vires’ in different senses in different contexts. The reconciliation of 35 20 the authorities can only be achieved if one first defines the sense in which one 5 is using the words ‘ultra vires’. Because the literal translation of the words is ‘beyond the powers’, there are many cases in which the words have been applied to transactions which, although within the capacity of the company, are carried out otherwise than through the correct exercise of the powers of the company by its officers…the use of the phrase ‘ultra vires’ should be restricted 10 to those cases where the transaction is beyond the capacity of the company and therefore wholly void.” [34] Applying the principle in the passage above to the case at hand, we find there is merit in the submission of Counsel for PGMJ vide 15 illustration of the following 2 scenarios:

(i) Clause 12 of the Constitution of PGMJ states that trustees can only sell with the consent or the direction of the Jawatankuasa Tadbir. If the Trustees had gone on to sell property belonging to PGMJ and then seek subsequently to say they cannot sell 20 because of the need for consent of the Jawatankuasa Tadbir, that argument is defeated by the Turquand rule.

(a) it breaches the non delegation rule; and

(b) it is ultra vires the Constitution of PGMJ. 20 [39] For the given reasons above, we find that the learned High Court did not err in ruling the PA to be invalid. In the circumstances we unanimously dismiss the appeals of the Appellants in Appeals 2084 and 2082 with costs. Consequently in view of our decision there is no necessity to deal with enclosure 26 in Appeal 2082. The decision of the learned High Court 25 Judge dated 27/9/2017 is hereby affirmed. [40] In Appeal 2084, we award costs of RM40,000,00 against the Appellants. In light of our finding that the PA is void, there has to be a 23 refund of the money which has been paid by the 1st and 2nd Appellants 5 and which has been acknowledged by PGMJ. Hence we order the refund of RM94, 200.00 by PGMJ to the 1st and 2nd Appellants based on the “ Schedule of Earlier Payments Made by Jomari Holdings Sdn Bhd Towards And In Account Of Purchase Of 5 Lots From PGMJ in Batu Pahat” ( p.131 1st and 2nd Appellants’ Written Submission (Consolidated). 10 [41] In Appeal 2082, we make no order as to costs. Dated: 7/9/2020 15 -Sgd-LAU BEE LAN 20 Judge Court of Appeal Malaysia Putrajaya 25 COUNSEL: 30 Gurdial Singh Nijar together with Abraham Au and Julie Lim for Appellants in Appeal 2082 and 1st and 2nd Appellants in Appeal 2084 [Messrs. Julie Lim, Vasanthan & Co.] 35 Chew Hui Xian for Respondent in Appeal 2082 [Messrs. S.K. Koh & Co.] 24 5 Manjit Singh Saini for the 3rd Third Party in Appeal 2082 and 3rd Appellant in Appeal 2084 [Messrs. Adelyn Loh Chambers] Michael Chow together with Shahareen Begum Binti Abdul Subhan and 10 Wendy Yeong for the 1st Third Party in Appeal 2082 and Respondents in Appeal 2084 [Messrs. Shahareen Begum] 15