MUTIARA TRANSMISSION & DISTRIBUTION SDN. BHD. (sebelum ini dikenali sebagai Tunas Mayang (Johor) Sdn. Bhd.) v HIAP AIK CONSTRUCTION BERHAD (dalam likuidasi sukarela) (JA-22NCvC-164-10/2022)

HIAP AIK CONSTRUCTION BERHAD [IN VOLUNTARY LIQUIDATION] [COMPANY NO. : 11140-V]

SATHIEA SEELEAN A/L MANICKAM [SUED IN HIS CAPACITY AS THE LIQUIDATOR OF HIAP AIK CONSTRUCTION BERHAD] [NRIC NO. : 641019-10-6869) ...DEFENDAN-DEFENDAN GROUNDS OF DECISION 07/04/2026 11:33:32 JA-22NCvC-164-10/2022 Kand. 50 S/N ad595FlQjUury2thKIAjrA Introduction

This is Plaintiff’s civil suit concerning the beneficial ownership of a 1.5-storey terraced factory erected on a piece of land known as Geran 450477, Lot No. 26524 (formerly known as HS(D) 207170, PTD 59642), Mukim of Tebrau, District of Johor Bahru, Johor ("the Contra Property"). The Plaintiff also seeks the removal and cancellation of a private caveat (Presentation No. 6641/2020) entered by the Second Defendant on 12.2.2020 ("the Caveat"), and claims damages under section 329 of the National Land Code ("NLC").

The full trial was conducted on 16 and 17 December 2026. The Plaintiff called five witnesses (SP1 to SP5) and the Defendants called one witness (SD1) – Plaintiff Witness SP1 Tee Siew Kai SP2 Yap Ah Bee @ Albert Yap SP3 Chong Kah Chyang (Lawyer) SP4 Tung Cheong Seng (Director of Poshtech Sdn Bhd) SP5 Tan Hock Huat Defendant Witness SD1 Sathiea Seelean a/l Manickam S/N ad595FlQjUury2thKIAjrA

Having considered the written submissions of both parties, the reply submissions, the pleading, cause papers and notes of proceedings, this Court now sets out the findings and the reasons for this decision. Background

The Plaintiff, is a company engaged in the supply of commercial electrical engineering apparatus. The First Defendant, is a construction company which has been in creditors' voluntary liquidation since 2.9.2004. The Second Defendant, is a Chartered Accountant who has been appointed as the liquidator of the First Defendant since 2.9.2004.

The Plaintiff commenced this suit on 26.10.2022 after obtaining leave to sue both Defendants under Post Winding Up Company Case No. : JA-28PW-118-07/2022, the leave order having been granted on 10.10.2022. The Development and the Chain of Debts

The factual matrix of this case originates from the development of the Taman Mount Austin project in Johor Bahru. Westmont Mount Austin Sdn. Bhd. (now known as Mount Austin Properties Sdn. Bhd., in liquidation) ("Westmont") was the developer of the S/N ad595FlQjUury2thKIAjrA project. Westmont appointed the First Defendant as its main contractor. The First Defendant in turn appointed Poshtech Sdn. Bhd. ("Poshtech") as the sub-contractor for electrical works on the project.

Between 1997 and 1998, at Poshtech's request, the Plaintiff supplied and delivered commercial electrical engineering apparatus to the Taman Mount Austin project and to Taman Putri Kulai. Poshtech became indebted to the Plaintiff in the sum of RM282,600.00 for these goods.

At the material time, the following chain of debts existed among the parties –

(a) Westmont was indebted to the First Defendant for construction works;

(b) The First Defendant was indebted to Poshtech for electrical sub-contract works; and

(c) Poshtech was indebted to the Plaintiff in the sum of RM282,600.00 for electrical apparatus supplied. The Contra Settlement and the SPA

To resolve these interconnected debts, the parties agreed to utilise the Contra Property as part of a contra settlement. On 26.12.1998, S/N ad595FlQjUury2thKIAjrA the First Defendant issued a letter to Westmont titled "Contra One Unit of Factory Lot Known as PTD 59642 At Taman Mount Austin, Nominated Purchaser : Mutiara Transmission & Distribution Sdn. Bhd." ("the Nomination Letter"), confirming the Plaintiff as the nominated purchaser of the Contra Property.

On 8.1.1999, a Sale and Purchase Agreement ("the SPA") was executed between Westmont as vendor and the Plaintiff as purchaser for the Contra Property at a consideration of RM310,000.00 ("the Purchase Price"). Section 7 of the Schedule to the SPA expressly records that the Purchase Price had been fully paid. On the same date, the Plaintiff passed a directors' resolution to purchase the Contra Property from Westmont to offset Poshtech's debt.

The Contra Property was valued at RM310,000.00, while the outstanding debt owed by Poshtech to the Plaintiff was RM282,600.00. To settle the differential sum of RM27,400.00, Poshtech issued Invoice No. 1090 dated 8.10.1999 to the Plaintiff, which the Plaintiff duly paid. The Plaintiff also paid the legal charges related to the Contra Property to the solicitors handling the conveyance, Messrs T. S. Chong & Co. Possession and Conduct of the Parties

Upon paying a further sum of RM3,170.00 demanded by Westmont prior to the delivery of the certificate of fitness, the S/N ad595FlQjUury2thKIAjrA Plaintiff took vacant possession of the Contra Property. Since 1999, the Plaintiff has been in continuous and uninterrupted occupation of the Contra Property. The Plaintiff's name has been registered with the Majlis Bandaraya Johor Bahru (“MBJB”) for assessment tax purposes and the Plaintiff has consistently paid all quit rent and assessment taxes for the Contra Property. The Plaintiff also applied for and obtained electricity supply from Tenaga Nasional Berhad (“TNB”) for the property.

For a period of approximately 20 years from 1999 to 2020, neither the First Defendant nor any party acting on its behalf made any demand upon the Plaintiff for the payment of any sum, whether as purchase price or otherwise. The Plaintiff was never listed as a debtor of the First Defendant in the Form 61, Companies Act 1965 Statement of Assets and Liabilities filed for the First Defendant as of 6.8.2004 ("Form 61"). Crucially, the Contra Property itself was not listed among the real estate assets of the First Defendant in Form 61. The Caveat and the Present Proceedings

On 12.2.2020, the Second Defendant entered the Caveat against the Contra Property. In his statutory declaration in support of the Caveat, the Second Defendant asserted that the First Defendant had purchased the Contra Property from Westmont through an alleged second settlement agreement dated 11.1.1999 ("the Alleged Second Settlement Agreement"). This Court observed S/N ad595FlQjUury2thKIAjrA that this date is 3 days after the SPA between Westmont and the Plaintiff was executed on 8.1.1999.

On 15.12.2021, the Plaintiff through its solicitors demanded the removal of the Caveat, but the Second Defendant refused. The Second Defendant had earlier filed Suit No. : JA-24NCvC-625- 10/2021 ("Suit 2021") against Westmont and its liquidator, seeking declarations that the Contra Property, together with 8 other properties, were held in trust by Westmont for the First Defendant. The Plaintiff intervened in Suit 2021 to challenge the claim over the Contra Property. Faced with the Plaintiff's objection, the Second Defendant withdrew the claim to the Contra Property from Suit 2021. The remaining 8 properties were transferred to the First Defendant by court order.

The reliefs sought by the Plaintiff in this suit are –

(a) a declaration that the Plaintiff is the beneficial owner of the Contra Property;

(b) removal and cancellation of the Caveat;

(c) an injunction against the Defendants from entering any new caveat;

(d) an order under section 417 NLC directing the relevant authorities to give effect to the court's order;

(e) damages under section 329 NLC to be assessed; and S/N ad595FlQjUury2thKIAjrA

(f) interest and costs. Court Analysis

The issues to be tried, as agreed by the parties in Bundle D, are as follows – Issue 1 : Whether the Plaintiff has paid or otherwise settled the Purchase Price of RM310,000.00 for the Contra Property? Issue 2 : Whether the Plaintiff is the beneficial owner of the Contra Property? Issue 3 : Whether Westmont holds the Contra Property in trust for the Plaintiff or the First Defendant? Issue 4 : Whether the registration of the Caveat over the Contra Property by the Second Defendant has prejudiced the Plaintiff's rights? Issue 5 : Whether the Caveat should be removed and cancelled? Issue 6 : Whether the Plaintiff is entitled to claim compensation or damages from the Defendants as a result of the S/N ad595FlQjUury2thKIAjrA registration of the Caveat under Section 329 of the NLC?

This Court shall deal with each issue in turn. Issue 1 : Whether The Plaintiff Has Paid Or Otherwise Settled The Purchase Price

The Plaintiff's case on this issue is that the Purchase Price of RM310,000.00 was settled by way of a multi-party contra arrangement arising from the chain of debts described above. The Plaintiff submits that payment was effected not by direct cash transfer to Westmont, but through the set-off of mutual obligations among Westmont, the First Defendant, Poshtech and the Plaintiff.

This Court finds that the Plaintiff has adduced cogent evidence, both documentary and oral, to establish that the Purchase Price was paid or settled. The evidence is as follows –

(a) Section 7 of the Schedule to the SPA expressly records that the Purchase Price of RM310,000.00 had been fully paid. This is not a mere recital but a contractual confirmation by both parties to the SPA (Westmont as vendor and the Plaintiff as purchaser). SP3 (Chong Kah Chyang), the solicitor who prepared the SPA and witnessed its execution, confirmed that based on the SPA the purchase price was RM310,000.00 and it had been fully paid. S/N ad595FlQjUury2thKIAjrA The Defendants submitted that SP3 merely presumed payment based on the recital in the SPA rather than from independent knowledge. This Court does not accept this characterisation. SP3's evidence is both credible and reliable as it is fully consistent with the terms of the SPA which he himself prepared. As the solicitor who prepared and witnessed the execution of the agreement, SP3 is well placed to attest to its terms. There is no evidence before this Court suggesting that the Plaintiff has failed to fulfil or discharge any obligation under the SPA. SP3's professional role in the preparation of the documents lends further credibility to his understanding of the agreement's terms. SP5 (Tan Hock Huat), the Plaintiff's director, also confirmed in his witness statement (WSSP-5, A21) that Section 7 of the Schedule records full payment;

(b) SP1 (Tee Siew Kai), the liquidator of Westmont, affirmed in paragraph 14.4(vii) of his affidavit in reply in Suit 2021 that the terms of the SPA dated 8.1.1999 state that the purchase price had been paid. This was admitted by SD1 in paragraph 14.4(vii) of his own affidavit in reply in Suit 2021. SP1 also communicated through his solicitors, Messrs Wilson Wong & Tan, in a letter dated 4.9.2020, that the SPA was duly executed and the Purchase Price settled;

(c) SP2 (Yap Ah Bee / Albert Yap), the former Director of the First Defendant, confirmed during examination-in-chief that S/N ad595FlQjUury2thKIAjrA Westmont could not pay the First Defendant in cash and offered properties to offset the debts and that the First Defendant in turn offered units to its creditors in lieu of cash payment. SP2 confirmed that he issued the Nomination Letter to Westmont to nominate the Plaintiff as purchaser of the Contra Property. During cross-examination, SP2 confirmed that the nomination was made to settle debts owed to a creditor of the First Defendant;

(d) SP4 (Tung Cheong Seng), the Director of Poshtech, confirmed in WSSP-4 (A7–A8) that the outstanding sum of RM282,600.00 owed to the Plaintiff was settled by way of contra property. SP4 gave a detailed account of how Albert Yap (SP2) had proposed the contra arrangement and how SP4 in turn proposed to the Plaintiff to settle Poshtech's debt by this means. During cross-examination, SP4 confirmed – "Because Hiap Aik owes me money. I don't have money to pay Mutiara. So they agree to contra this amount. Because Mutiara agrees, Hiap Aik also agrees. So they deal directly".

(e) SP5 (Tan Hock Huat), the Director of the Plaintiff, provided a detailed and coherent account of the entire contra settlement in WSSP-5 (A10) and during re-examination. SP5 described the chain of debts, the proposal by Poshtech's director to settle by contra property and the eventual execution of the SPA; S/N ad595FlQjUury2thKIAjrA

(f) The Plaintiff's case is further supported by –

(i) the Nomination Letter dated 26.12.1998, using the word "contra" in its title;

(v) Poshtech's Invoice No. 1090 dated 8.10.1999 for RM27,400.00, representing the differential between the Purchase Price and the debt; and

(g) during cross-examination, SP1 (the liquidator of Westmont) repeatedly confirmed that the Contra Property was a "contra unit", stating: "I think, if I can recall, I think this one is a contra unit" (Notes of Evidence, page 11, para 3) and "Yes, they contra the unit. If I can recall correctly. Otherwise, Hiap Aik will not nominate Mutiara based on my record and also they signed the S&P" (Notes of Evidence, page 16, para 26 - 28). S/N ad595FlQjUury2thKIAjrA SP1's evidence on this point was notably consistent throughout his testimony. In addition to the passages quoted above, SP1 stated : "Sorry, I think this one is a contra unit" (Notes of Evidence, page 11, para 19); "I think this one is because of contra unit" (Notes of Evidence, page 16, para 18); and "I think on deflection, they have contra the unit" (Notes of Evidence, page 16, para 24). The repetition and consistency of SP1's evidence across multiple exchanges reinforces the reliability of his recollection that the Contra Property was indeed the subject of a contra arrangement.

The Defendants' primary contention is that the Plaintiff has not paid the Purchase Price to the Defendants (i.e., to the First Defendant). In paragraph 15 of their written submission (Enclosure 38), the Defendants framed the core issue as "whether the Plaintiff has paid the full purchase price to the Defendants at any time for the said Property". The Defendants submit that the entries "purchase price : “RM310,000.00" and "amount paid : RM310,000.00" in the SPA refer to contra payments already made by the First Defendant to Westmont under the Alleged Second Settlement Agreement and that the Plaintiff as nominated purchaser was obliged to pay the Purchase Price directly to the First Defendant.

This Court finds the Defendants' contention to be without merit for the following reasons – S/N ad595FlQjUury2thKIAjrA

(a) Issue 1 as agreed in Bundle D asks whether the Plaintiff has "paid or otherwise settled" the Purchase Price for the Contra Property. It does not ask whether the Plaintiff paid the Purchase Price to the Defendants. The Defendants' reframing of the issue is inconsistent with the agreed issues to be tried. Moreover, the Defendants' reframing is contradicted by SD1's own admissions during cross-examination that there is no agreement between the Plaintiff and the First Defendant requiring the Plaintiff to pay the Purchase Price to the First Defendant and that the Plaintiff has no obligation to do so. Therefore, the Defendants cannot maintain that the "core issue" is whether the Plaintiff paid the Purchase Price to them when their own witness has conceded that no such obligation exists;

(b) The Statement of Defence does not plead that the Plaintiff's nomination as purchaser was contingent upon payment to the First Defendant, nor does it plead that the Plaintiff failed to settle the Purchase Price as per the First Defendant's accounts. It is trite law that unpleaded allegations must be rejected and the trial confined strictly to the pleadings. (See : Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152);

(c) During cross-examination, SD1 expressly acknowledged that–

(i) there is no agreement between the Plaintiff and the First Defendant requiring the Plaintiff to pay the Purchase S/N ad595FlQjUury2thKIAjrA Price to the First Defendant (Notes of Evidence, page 77, para 13 - 16);

(d) Form 61 does not list the Plaintiff as a debtor of the First Defendant. SD1 agreed under cross-examination that the Plaintiff was never a debtor of the First Defendant (Notes of Evidence, page 78, para 8 - 13);

(e) SD1 agreed during cross-examination that when the individuals or persons involved can confirm the contra arrangement, such confirmation is sufficient rather than requiring the production of documents (Notes of Evidence, page 84, para 29 - 32);

(f) SD1 admitted that he had no knowledge of the details related to the Taman Mount Austin project or of the settlements made prior to his appointment as liquidator (Notes of Evidence, S/N ad595FlQjUury2thKIAjrA page 78, para 28–34). His testimony is therefore devoid of the factual foundation necessary to dispute the settlement;

(g) The assessment of the contra settlement must be considered in light of the respective witnesses’ knowledge and involvement. SP2 (Director of the First Defendant), SP4 (Director of Poshtech) and SP5 (Director of the Plaintiff) each had direct personal knowledge of and involvement in the contra settlement. In contrast, SD1 was only appointed as liquidator of the First Defendant in 2005, well after the events of 1998 - 1999 and he expressly acknowledged that he had no direct involvement or contemporaneous knowledge of the contra settlement. As the Federal Court held in Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67, a trial judge is entitled to arrive at findings of fact based on what he heard and saw from a witness who had direct knowledge of the relevant transactions, as compared to the evidence of witnesses who had no personal knowledge. The assessment of credibility of witnesses is well within the purview of the trial judge. This Court finds that the testimony of SP2, SP4, and SP5, each possessing direct knowledge, is far more reliable and trustworthy than the testimony of SD1;

(h) During re-examination, when confronted with the suggestion by the Defendants’ solicitors that he had taken advantage of the First Defendant, SP4 responded with clear indignation, asserting that Poshtech had done the work and had not taken advantage of anyone. SP4 explained that at the material S/N ad595FlQjUury2thKIAjrA time, the First Defendant was a listed company and that it was inconceivable that anyone could simply extract RM310,000.00 from a listed company without having performed work. SP4’s spontaneous and emphatic response reinforced his credibility. His firm rejection of the suggestion of impropriety, together with his detailed explanation of the circumstances surrounding the contra settlement, supports the genuineness and reliability of his evidence;

(i) This Court also observes that the Caveat was entered on 12.2.2020, more than 20 years after the SPA was executed and the contra settlement was concluded. The Defendants’ demand that the Plaintiff produce every document relating to the debts between the First Defendant and Poshtech is unreasonable given the significant lapse of time. SP4 testified that the relevant documents were lost due to office relocation and termite damage over the intervening decades. This is not unexpected. In Government of The Lao People’s Democratic Republic v Thai-Lao Lignite (Thailand) Co Ltd (a Thai company) [2024] 12 MLJ 41, High Court held that a party would suffer substantial prejudice where, by reason of the opposing party’s delay, there was difficulty and probable inability to procure necessary witnesses and documentary evidence. The court held that allowing the delayed claim to proceed in those circumstances would be inequitable. By analogy, the Defendants’ delay of over 20 years has caused significant evidential prejudice to the Plaintiff. Their demand for exhaustive documentation is an unfair burden, S/N ad595FlQjUury2thKIAjrA particularly where the Plaintiff has already adduced the SPA, the Nomination Letter, invoices, the Debt Confirmation and the consistent testimony of multiple witnesses with direct knowledge;

(j) The absence of some documents relating to the debts between the First Defendant and Poshtech does not undermine the existence of the contra settlement. In Thian Oon Kin v Rekarya Consultant Group and Others [2009] MLJU 726, where the exact amounts of payments could not be determined with precision due to the significant lapse of time, the Court accepted the testimony of the witness from the payer as the best evidence. Similarly, in the present case, SP2, SP4 and SP5, each with direct personal knowledge, have consistently and unanimously confirmed that the Contra Property was used to settle outstanding debts among the parties. Their testimony constitutes the best available evidence of the contra settlement;

(k) The Defendants relied on Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 for the proposition that oral evidence cannot contradict documentary evidence. This Court finds this authority to be clearly distinguishable. In Tindok Besar, the oral evidence and the documentary evidence were in direct contradiction. In the present case, SP4’s oral evidence does not conflict with any documentary evidence. Rather, it is entirely consistent with and supported by the SPA, the Nomination Letter, the invoices and the Debt Confirmation. Furthermore, SP4’s oral testimony is S/N ad595FlQjUury2thKIAjrA corroborated by the evidence of SP2 and SP5. The oral evidence also explains the commercial rationale for the issuance of the Nomination Letter : there being no other business relationship between the Plaintiff and the First Defendant apart from the contra settlement;

(l) In their reply submission, the Defendants cited Live Capital Sdn Bhd v. Pioneer Conglomerate Sdn Bhd [2025] 4 MLRA 844 for the proposition that before any evidential burden shifts to the Defendants, the Plaintiff must first establish a prima facie case. This Court agrees with the legal principle but find it to be of no assistance to the Defendants. As set out above, the Plaintiff has adduced extensive documentary and oral evidence establishing the contra settlement and the payment of the Purchase Price. The SPA records full payment, multiple witnesses with direct knowledge have confirmed the settlement. and SD1 himself admitted that the Plaintiff had no obligation to pay the First Defendant. This evidence clearly establishes a prima facie case and indeed goes well beyond what is required to shift the evidential burden;

(m) The Defendants contended in their reply submission that SP2 never mentioned “Poshtech”, “electrical contractor”, “tripartite or 4 party agreement”, or “Tung (SP4)” during his testimony. This Court does not find this to be a valid ground to reject the contra settlement. SP2 was the Director of the First Defendant at the material time. He confirmed that Westmont owed the First Defendant money, that the First Defendant had S/N ad595FlQjUury2thKIAjrA creditors and that properties were offered by Westmont to settle debts owed by the First Defendant to its creditors. SP2 explicitly stated that he agreed to offer properties to creditors in lieu of cash payment. During cross-examination, SP2 further confirmed that the Nomination Letter was issued as a result of an agreement with the First Defendant’s creditor. That SP2 did not use the specific word “Poshtech” does not negate the substance of his evidence, which was consistent with and corroborative of the accounts given by SP4 and SP5. The contra arrangement was effected through a chain of interconnected debts and SP2’s evidence confirms the First Defendant’s role within that chain; and

(n) in paragraph 4 of the Defendants' Case Summary (Enclosure 16), the Defendants asserted that "the 1st Defendant has no record of Poshtech Sdn Bhd or of any amount owed by 1st Defendant to Poshtech Sdn Bhd". This assertion was squarely contradicted by the evidence adduced at trial. SP2 (the former Director of the First Defendant) confirmed that the First Defendant had creditors to whom properties were offered in lieu of cash payment and that the Nomination Letter was issued to settle debts owed to such a creditor. SP4 (the Director of Poshtech) gave detailed evidence that Poshtech was the electrical contractor appointed by the First Defendant for the Taman Mount Austin project and that Albert Yap (SP2), as Director of the First Defendant, personally proposed the contra arrangement to him. The Nomination Letter itself, issued by the First Defendant, bears the title "Contra One Unit of Factory Lot", the very word "contra" presupposes the S/N ad595FlQjUury2thKIAjrA existence of mutual debts to be set off. SD1, who was only appointed as liquidator in 2004, conceded that he had no personal knowledge of the First Defendant's dealings prior to his appointment. His assertion that there is "no record" of Poshtech cannot prevail over the direct testimony of SP2 and SP4, both of whom were personally involved in the transactions at the material time.

Having considered the totality of the evidence, this Court finds that the Plaintiff has discharged its burden of proof on a balance of probabilities. The Purchase Price of RM310,000.00 for the Contra Property was paid or otherwise settled through the multi-party contra arrangement involving Westmont, the First Defendant, Poshtech and the Plaintiff. This finding is supported by –

(a) the express terms of the SPA recording full payment;

(b) the confirmation by both parties to the SPA (Westmont and the Plaintiff);

(c) the consistent and corroborative testimony of SP1, SP2, SP3, SP4 and SP5;

(d) the contemporaneous documentary trail including the Nomination Letter, directors' resolution, invoices, debt confirmation and Poshtech's Invoice No. 1090 for the RM27,400.00 differential. The Plaintiff's payment of this differential sum in cash is particularly significant. It demonstrates that the Plaintiff was not merely a passive S/N ad595FlQjUury2thKIAjrA nominee but an active purchaser who independently settled the balance owing over and above the contra amount; and

(e) the Defendants' own admissions, particularly SD1's concessions that the Plaintiff had no obligation to pay the First Defendant and that no monetary claim was ever made.

Issue 1 is accordingly answered in the affirmative in favour of the Plaintiff. Issue 2 : Whether The Plaintiff Is The Beneficial Owner

The legal doctrine of beneficial ownership of land has been consistently recognised by the Federal Court. In Mosbert Berhad (In Liquidation) v Chatib Bin Kari [1985] 1 MLJ 162, it was held that the law consistently followed in this country is that a purchaser of land who has paid the purchase price, until registered as the legal owner, acquires an equitable interest in the land.

In the more recent decision of Tan Ong Ban v Teoh Kim Heng [2016] 3 MLJ 23, the Federal Court elucidated the principle further : when a purchaser has performed his contractual obligation upon full settlement of the purchase price besides executing all formal documents to effect registration, equity accords him all the rights and privileges of a legal owner over the property, even though he has yet to become its registered owner. S/N ad595FlQjUury2thKIAjrA

In Tengku Mariah Binte Sultan Sulaiman v Halimah Binte Abdullah [1980] 2 MLJ 234, the Federal Court, referring to Munah v Fatimah [1968] 1 MLJ 54, held that where a purchaser has relied on a contract, gone into occupation and performed all necessary acts to show possession, she is the equitable owner and what is required is to clothe the equitable estate with legal title.

Drawing from these authorities, the criteria for beneficial ownership are –

(a) an agreement of sale and purchase has been executed;

(b) the full purchase price has been paid;

(c) the purchaser has taken possession of the property; and

(d) the vendor has executed a valid and registrable transfer in favour of the purchaser.

Applying these criteria to the present case –

(a) it is undisputed that the Plaintiff and Westmont executed the SPA on 8.1.1999. This was confirmed by SP1, SP3, SP5 and was acknowledged by SD1 during cross-examination;

(b) as this Court has found under Issue 1, the Purchase Price was fully paid or settled through the contra arrangement. Section 7 of the Schedule to the SPA records this, and it has been confirmed by both parties to the SPA; S/N ad595FlQjUury2thKIAjrA

(c) The Plaintiff took vacant possession of the Contra Property in 1999 and has remained in continuous and uninterrupted occupation for over 25 years. This was confirmed by SP1 in his affidavit in Suit 2021 [paragraph 14.4(ix)], where he stated that a site visit showed the property was occupied by the Plaintiff and that vacant possession had been delivered. SD1 admitted this in paragraph 14.4(ix) of his own affidavit in reply. During examination-in-chief, SP1 further confirmed : "The site visit and the inspection shows that the property is currently occupied by Mutiara and it clearly shows that the vacant possession has been delivered to Mutiara. Therefore, Hiap Aik is not the beneficiary owner of the property and I do not have an interest in the property"; and

(d) SP1, as liquidator of Westmont, executed the Memorandum of Transfer (Form 14A) in favour of the Plaintiff, thereby affirming Westmont's divestment of both legal and beneficial interest. SP1 confirmed : "This is a document, 14A, signed by me" and identified the transferee as the Plaintiff and the transferor as Mount Austin.

This Court observed that all four criteria for beneficial ownership are satisfied. Equity therefore regards the Plaintiff as the true beneficial owner of the Contra Property.

This Court further finds that the Defendants have no legal or beneficial interest in the Contra Property, for the following reasons– S/N ad595FlQjUury2thKIAjrA

(a) in paragraph 14.4(x) of SP1's affidavit in reply in Suit 2021, SP1 stated that the First Defendant is not the owner or beneficial owner of the Contra Property and has no rights over it. While SD1 belatedly attempted to characterise this admission as a "typographical error" during re-examination, this Court rejects this explanation. No corrective affidavit was ever filed in Suit 2021. As the Federal Court held in Jayaganesan a/l Ramakrishnan v Timbalan Menteri Dalam Negeri, Malaysia & Ors [2019] 6 MLJ 697, an error as grave as this would have necessitated a corrective affidavit. The admission therefore stands and operates as an estoppel under sections 31 and 115 of the Evidence Act 1950;

(b) the Contra Property was not listed among the real estate assets of the First Defendant in Form 61. SD1 admitted that Form 61 was filed by his firm and that he was familiar with its contents. Several other properties referenced in the alleged settlement agreements were disclosed in Form 61, demonstrating selective awareness. The conspicuous absence of the Contra Property strongly indicates the Defendants knew it was not an asset of the First Defendant;

(c) SD1 admitted under cross-examination that no sale and purchase agreement was signed between Westmont and the First Defendant for the Contra Property. In the absence of any such agreement, no equitable interest could have arisen in favour of the First Defendant; S/N ad595FlQjUury2thKIAjrA

(d) the Defendants have never taken possession of the Contra Property. This is wholly inconsistent with any claim of beneficial ownership;

(e) the Defendants submitted that Forms 61 and 62 require expert evidence to confirm their contents, relying on Section 45 of the Evidence Act 1950. This Court rejects this submission. Section 45 concerns opinions on points of foreign law, science, art or the identity or genuineness of handwriting or fingerprints. Forms 61 and 62 are mandatory statutory filings required in the context of a company’s liquidation, providing a factual and detailed account of the company’s assets, debts, liabilities and creditors. They are not opinion-based documents but factual statements filed with the Registrar of Companies. The Second Defendant’s firm filed these forms and SD1 testified that he was thoroughly familiar with their contents. The conspicuous absence of the Contra Property from Form 61 is a significant factual matter that requires no expert testimony to appreciate;

(f) both SP1 and SD1 have testified under oath that the First Defendant is neither the legal nor beneficial owner of the Contra Property and holds no rights whatsoever over it. SD1’s admission was made in his affidavit in reply in Suit

The Defendants sought to characterise this as a typographical error and referred to SD1’s corrective testimony in the present trial. However, under Section 31 of the Evidence Act 1950, admissions are not conclusive proof but they do shift the evidential burden. More importantly, the S/N ad595FlQjUury2thKIAjrA substance of SD1’s position throughout these proceedings has been consistent with the admission, that the First Defendant has never executed a SPA with Westmont for the Contra Property, has never taken possession of it and did not list it as an asset in Form 61. In any event, this Court notes the Defendants’ submission that estoppel was not pleaded by the Plaintiff. While this Court has regard to this procedural point, the factual significance of SD1’s admission remains relevant to the assessment of the Defendants’ claim to beneficial ownership;

(g) the Defendants invoked Section 341 of the National Land Code, which concerns adverse possession. This Court finds this provision to be wholly inapplicable to the present case. The Plaintiff is not claiming adverse possession. It is claiming beneficial ownership based on a valid SPA, full payment, continuous possession since 1999 and an executed Memorandum of Transfer. These are the hallmarks of equitable ownership, not adverse possession. Furthermore, the Defendants themselves have no legal or beneficial interest in the Contra Property and the First Defendant cannot be considered the “person or body entitled to an interest” under Section 341. Even on the Defendants’ own case, any claim would at most give rise to a monetary dispute, which does not confer proprietary rights over the Contra Property; and

(h) the Defendants contended in their reply submission that the Plaintiff cannot “blow hot and cold” by relying on the S/N ad595FlQjUury2thKIAjrA Nomination Letter while denying the validity of the Alleged Second Settlement Agreement. This Court rejects this argument. The Nomination Letter and the SPA are separate and self-standing documents. The Nomination Letter dated 26.12.1998 was issued by the First Defendant to Westmont, nominating the Plaintiff as purchaser. The SPA was subsequently executed on 8.1.1999. The Plaintiff’s rights derive from the SPA and the Nomination Letter, not from the Alleged Second Settlement Agreement. Even if the Alleged Second Settlement Agreement had some connection to the Nomination Letter, it does not follow that the Plaintiff is bound by or must accept the validity of a separate agreement to which it was not a party. The Plaintiff is entitled to rely on the documents that evidence its own rights without being required to validate an agreement between the First Defendant and Westmont to which the Plaintiff was a stranger.

Accordingly, Issue 2 is answered in the affirmative. The Plaintiff is the beneficial owner of the Contra Property. Issue 3 : Whether Westmont Holds On Trust For The Plaintiff Or The First Defendant

For to this issue, the Court is required to determine for whose benefit Westmont holds the Contra Property as bare trustee. The Plaintiff submits it is for the Plaintiff while the Defendants submit it is for the First Defendant. S/N ad595FlQjUury2thKIAjrA

For the reasons already set out under Issues 1 and 2, this Court finds that Westmont holds the Contra Property on trust for the Plaintiff. The Plaintiff has –

(a) entered into a valid and binding SPA with Westmont;

(b) fully settled the Purchase Price;

(c) taken and maintained continuous possession; and

(d) been recognised as the transferee through the execution of Form 14A by Westmont's liquidator.

Under the principle in Tan Ong Ban v Teoh Kim Heng, upon full payment and execution of the transfer documents, Westmont became a bare trustee for the Plaintiff.

The Defendants rely on the Alleged Second Settlement Agreement dated 11.1.1999 between the First Defendant and Westmont, whereby Westmont purportedly agreed to contra RM308,000.00 of debts to the First Defendant. This Court declines to find that this agreement gives rise to any interest in the Contra Property superior to the Plaintiff's, for the following reasons–

(a) The SPA between Westmont and the Plaintiff was executed on 8.1.1999. The Alleged Second Settlement Agreement is dated 11.1.1999, three days later. Even taking the S/N ad595FlQjUury2thKIAjrA Defendants' case at its highest, any interest the First Defendant purports to have acquired under the Alleged Second Settlement Agreement postdates the Plaintiff's interest under the SPA;

(b) Paragraph 2 of the Alleged Second Settlement Agreement stipulates that the transfer of the Contra Property is subject to Westmont's standard sale and purchase agreement. This renders it, at best, an agreement to make an agreement, which does not result in a contract and does not confer a caveatable interest in land (see : Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327; Menang Amalgated Sdn Bhd v Wan Badarudin bin Wan Abdullah [2017] MLJU 1326). No sale and purchase agreement was ever executed between Westmont and the First Defendant for the Contra Property. SD1 admitted this; and

(c) by nominating the Plaintiff as purchaser via the Nomination Letter dated 26.12.1998 and facilitating the execution of the SPA with full knowledge, the First Defendant effectively relinquished any claim or interest it may have had in the Contra Property. The First Defendant's conduct is consistent only with the interpretation that the Contra Property was to be transferred to the Plaintiff as part of the debt settlement. S/N ad595FlQjUury2thKIAjrA Suit 2021 Is Distinguishable

The Defendants sought to rely on the outcome of Suit 2021, where the High Court allowed 8 other properties to be registered in the First Defendant's name. This Court finds this reliance to be misconceived. The circumstances of the Contra Property are materially different from the 8 properties in Suit 2021 –

(a) unlike the 8 properties which were undisputed by any third party, the Plaintiff actively intervened and asserted a competing claim;

(b) the Plaintiff has a valid and binding SPA with Westmont recording full payment. No such agreement existed for the other properties;

(c) the Plaintiff has been in continuous occupation since 1999 while the other 8 properties were unoccupied and in poor condition;

(d) Westmont's liquidator executed Form 14A in favour of the Plaintiff.

SD1 himself acknowledged under cross-examination that the circumstances of the Contra Property are different from the 8 properties in Suit 2021. As the Court of Appeal held in Salak Land Development Sdn Bhd v Pentadbir Tanah Kuala Langat & Ors [2015] 3 MLJ 487, a comparison which is not on an apple-to-apple S/N ad595FlQjUury2thKIAjrA basis cannot form the foundation of any conclusion. The Defendants' attempt to rely on Suit 2021 fails to compare like with like.

Accordingly, Issue 3 is answered in favour of the Plaintiff. Westmont holds the Contra Property on trust for the Plaintiff, not the First Defendant. Issue 4 : Whether The Caveat Has Prejudiced The Plaintiff's Rights

Having found that the Plaintiff is the beneficial owner of the Contra Property, it follows that the continued existence of the Caveat has directly and materially prejudiced the Plaintiff by preventing the registration of the Plaintiff's name on the document of title and the perfection of its proprietary rights. The Memorandum of Transfer (Form 14A) was executed by Westmont's liquidator in favour of the Plaintiff but could not be presented for registration due to the Caveat.

This Court observed that the Plaintiff plainly falls within the category of a "person aggrieved" by the existence of the Caveat within the meaning of section 327(1) of the NLC.

Therefore, Issue 4 is answered in the affirmative. S/N ad595FlQjUury2thKIAjrA Issue 5 : Whether The Caveat Should Be Removed And Cancelled

Section 323(1) of the NLC prescribes the categories of persons entitled to enter a private caveat. These include persons claiming title to or a registrable interest in alienated land, or persons claiming to be beneficially entitled under a trust affecting such land. Section 327(1) provides that any person aggrieved by the existence of a private caveat may apply to the Court for an order for its removal.

This Court finds that the Second Defendant does not fall within any of the categories prescribed under section 323 NLC and that the Caveat must be removed and cancelled, for the following reasons—

(a) neither the First Defendant nor the Second Defendant is the beneficial owner of the Contra Property, as this Court has found above. They have no legal, equitable, or beneficial interest capable of supporting a caveat;

(b) even taking the Alleged Second Settlement Agreement at its highest, it constitutes an agreement to make an agreement which confers no caveatable interest. (See : Menang Amalgated Sdn Bhd v Wan Badarudin bin Wan Abdullah [2017] MLJU 1326);

(c) the statutory declaration in support of the Caveat asserted that the First Defendant was the "purchaser" (pembeli) who S/N ad595FlQjUury2thKIAjrA "purchased" (membeli) the Contra Property from Westmont. This is plainly unsustainable given that no SPA exists between the First Defendant and Westmont for the Contra Property;

(d) even if the Defendants had any claim (which is denied), it would be purely monetary in nature and cannot support a caveatable interest. The Court of Appeal in Trans-Summit Sdn Bhd v Chun Nyook Lin (P) [1996] 3 CLJ 502), held that an interest that is only monetary in nature does not amount to a caveatable interest over land;

(e) the Defendants contended in their reply submission that the Memorandum of Transfer (Form 14A) is a recent fabrication. This Court rejects this contention. SP1, the liquidator of Westmont, confirmed that he signed the Form 14A. SP5, the Director of the Plaintiff, also confirmed his signature on the document. Both SP1 and SP5 are the makers of the document and their evidence directly contradicts the allegation of fabrication. The Defendants’ position is internally inconsistent. They first asserted that the Form 14A was not signed because the Purchase Price was not paid, yet when confronted with the signed document, they then claimed it was fabricated. This contradictory stance severely undermines the credibility of the Defendants’ case. This Court further notes that SP3, the solicitor who prepared the SPA, confirmed that the Plaintiff was charged a transfer fee, which is consistent with the transfer having been prepared contemporaneously with the SPA. S/N ad595FlQjUury2thKIAjrA

Accordingly, Issue 5 is answered in the affirmative. The Caveat is to be removed and cancelled forthwith. Issue 6 : Whether The Plaintiff Is Entitled To Damages Under Section 329 NLC

Section 329(1) of the NLC provides that any person who, wrongfully or without reasonable cause, secures the entry of, or fails to withdraw, any private caveat shall be liable to pay compensation to any person who thereby suffers any damage or loss.

In Tanjung Rhu Land Sdn Bhd & Anor v. Kauthar Venture Capital Sdn Bhd & Anor [2025] 1 CLJ 479, the Court held that section 329 NLC must be given full effect where the Court finds the caveator had no caveatable interest and that damages are not limited to the registered proprietor but extend to any person who suffers damage or loss.

This Court finds that the Second Defendant secured and maintained the Caveat without reasonable cause and without any caveatable interest. The Caveat has prevented the Plaintiff from registering its title for a period of over 5 years. The Defendants are therefore liable under section 329(1) NLC to compensate the Plaintiff. S/N ad595FlQjUury2thKIAjrA

The Defendants relied on Datuk Mohd Ali bin Hj Abdul Majid & Anor (both practising as Messrs Mohd Ali & Co) v Public Bank Bhd [2014] 4 MLJ 465, Tan Ah Chio & Ors v Lua Kim Soon & Ors [2015] 1 MLJ 334 and Tetuan Bahari Choy & Nongchik (law firm sued as a partnership) v Harta Megajaya Sdn Bhd [2019] 6 MLJ 491 for the proposition that the Plaintiff must prove actual loss before damages can be awarded. This Court finds these authorities to be distinguishable. They concerned claims for professional negligence and general principles of damages in tort and contract and did not involve the specific statutory regime under section 329 of the NLC. Section 329(1) creates a distinct statutory liability for wrongful entry or failure to withdraw a private caveat, and the authorities directly on point, including Tanjung Rhu Land, confirm that where the Court finds no caveatable interest, the section must be given full effect.

This Court also observed that the Defendants' submission that the Plaintiff has not proven the quantum of damages. However, the Plaintiff's prayer is for damages to be assessed, which is the standard approach where liability is established but quantification requires separate proceedings.

Accordingly, Issue 6 is answered in the affirmative. The Plaintiff is entitled to damages to be assessed. The quantum of damages shall be assessed before the Deputy/Senior Assistant Registrar. S/N ad595FlQjUury2thKIAjrA

For all the foregoing reasons, this Court makes the following orders –

(a) a declaration that the Plaintiff is the beneficial owner of the Contra Property, namely the 1.5-storey terraced factory erected on a piece of land known as Geran 450477, Lot No. 26524 (formerly known as HS(D) 207170, PTD 59642), Mukim of Tebrau, District of Johor Bahru, Johor;

(b) the private caveat bearing Presentation No. 6641/2020 entered by the Second Defendant on the Contra Property is hereby ordered to be removed and cancelled;

(c) the First and Second Defendants are prohibited from entering a new private caveat on the Contra Property;

(d) the Land Title Administrator and/or the relevant authorities are instructed under Section 417 of the National Land Code to give effect to this order;

(e) the First and Second Defendants shall pay the Plaintiff damages as a result of and in connection with the entry of the Caveat under Section 329 of the National Land Code, with the quantum to be assessed before the Deputy/Senior Assistant Registrar, High Court of Malaya at Johor Bahru; S/N ad595FlQjUury2thKIAjrA

(f) interest on the damages assessed at the rate of 5% per annum from the date of entry of the Caveat (12.2.2020) until full settlement; and

(g) Costs of RM100,000.00 to the Plaintiff, subject to the allocator fees. Dated this 11 March 2026 -signed-Dr Noradura binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru Solicitor for the Plaintiff : : Chew Wei Han together with Adrian Lu Chian Chern Messrs K H Loo & Co. Solicitor for the Defendants : : Ramachandran a/l Mayilalagan together with R Selvarajoo Messrs Rama Samuel & Associates S/N ad595FlQjUury2thKIAjrA