Ng Jin Song v Tay an Na (JA-22NCvC-33-03/2021)

a declaration that the letter of understanding (“LOU”) and the power of attorney (“PA”) both dated 29.12.2016, the sale and purchase agreement dated 12.3.2020 (“SPA”) and the memorandum of transfer (“MOT”) of a single-storey terrace 27/10/2022 10:27:49 Kand. 56 _________________________________________________________________________________ 2 house bearing address of No. 17 Jalan NJM 3/2, Taman Nusa Mas, Skudai erected on a land held under geran 371088 Lot 93643 Mukim Pulai, Johor Bahru (“Property”) are void and having no effect; and

the Defendant is to restore the Plaintiff as the owner of the Property. Brief background [2] As a brief background, the Plaintiff and the Defendant were married on 8.11.2014 at Rumah Berhala Tien Hiew Kiong, Skudai, Johor. [3] Four days after the marriage, on 12.11.2014, the Plaintiff purchased the Property from Lau Sim Chou and Ong Boon Keaw at the price of RM300,000.00. Since then, the Plaintiff and his parents had been living in the Property until today. [4] Towards the purchase of the Property, the Plaintiff paid the deposit of RM90,000,00 and the balance of RM210,000.00 was paid through a loan jointly taken by the parties with Public Bank Berhad. The Plaintiff claimed that he paid the monthly instalments of the loan. [5] When the marriage was towards the end, on 29.12.2016, the parties signed a joint petition for divorce together with the LOU and the PA. [6] On 17.1.2017, the marriage was dissolved and the decree nisi was granted by the Johor Bahru High Court via Joint Petition No. JA-33JP-2- 01/2017. [7] In 2021, the Plaintiff discovered that the Property was transferred to the Defendant on 7.1.2021 without the Plaintiff’s consent. _________________________________________________________________________________ 3 [8] The full trial was conducted on 19.12.2021 (in open court) and on 14.2.2022 (via zoom application) where the Plaintiff himself gave evidence in this court together with his mother (SP2) while the Defendant called three witnesses including herself (SD1), Au Han Tiau, the solicitor who prepared the LOU and PA (SD2) as well as Nadiah Syazwani binti Nordin, the solicitor handling the transfer of the Property (SD3). The court’s finding [9] It was agreed during the trial that the Plaintiff owed the Defendant of RM30,000.00. As such, both parties signed the LOU and PA on 29.12.2016. Although the formation of these two documents were made during the preparation of joint petition for divorce, it was agreed that the LOU and PA had no relation with the petition. That was why these two documents were not attached to or recorded in the petition. [10] The LOU reads – “Now Ng agrees that he shall give a Power of Attorney to Tay to deal with the house but he shall continue to service the loan repayment of the house. Ng further agrees that if there is a default in repayment of loan for 2 consecutive months, then Tay shall have the absolute rights to sell the said house at the market price. Ng also agrees that if Tay fails to sell the said house at the open market for period of six months, then Tay shall have the rights to buy back the house at the price of RM400,000.00. Ng hereby acknowledges that he owed Tay a sum of RM30,000.00 and agrees that in the event the said house is sold pursuant to clause (5) and (6) above, then this RM30,000.00 shall be deducted from the proceeds of sale. Both parties further agree that in the event clause (5) and (6) above are not invoked, Ng agrees to fully repay the said sum of RM30,000.00 to Tay within 3 _________________________________________________________________________________ 4 years from the date here of failing which Tay shall have absolute rights to sell the said house [11] As for the PA, I reproduce below the copy of it for ease reference– _________________________________________________________________________________ 5 _________________________________________________________________________________ 6 [12] In short, the LOU states the following matters:

in the event the Plaintiff fails to repay the loan for two consecutive months, the Defendant is entitled to sell the Property at the market price;

if the Defendant fails to sell the Property at the open market within six months, the Defendant is entitled to purchase it with the price of RM400,000.00;

the Plaintiff admits of owing the Defendant RM30,000.00 and if the Property is sold to the Defendant, RM30,000.00 will be deducted from the proceeds; and _________________________________________________________________________________ 7

the Plaintiff is to pay the debt within three years from the date of the LOU or the latest by 28.12.2019, failing which the Defendant has absolute right to sell the Property. [13] Whereas in the PA, the Defendant is authorised to do anything on the Property including to dispose of the same on behalf of the Plaintiff. [14] As far as a suit involving an agreement is concerned, it is incumbent upon the judge to scrutinize first the legality of the agreement pursuant to the Contract Act 1950 (“CA”). It is pertinent to note that in an agreement, parties are free to put any condition as long as it does not contravene with the provisions in the CA. [15] It is trite that the intentions of the parties to an agreement are to be gathered from the language used therein. They are presumed to have intended what they said (see Michael C Solle v. United Malayan Banking Corp Bhd [1984] 1 CLJ 151; [1984] 1 CLJ (Rep) 267; [1986] 1 MLJ 47). The duty of the court is only 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 (Setapak Heights Development Sdn Bhd v. Tekno Kota Sdn Bhd [2006] 2 CLJ 337). [16] Although it is judicially accepted that an agreement entered into by a husband and wife is valid and binding if the couple is not living in amity and in the process of preparing a petition for divorce (see Merritt v. Merritt [1970] 2 All ER 760), these LOU and PA, in our present case, are slightly different. As alluded to, these documents stood as the _________________________________________________________________________________ 8 security for the debt. Thus, the question is whether this kind of agreement is valid. [17] Learned counsel for the Plaintiff contended that the LOU and PA are not valid as they contravene to s. 24 of the CA. With due respect, I do not agree with the statement. S. 24 of the Act says – What considerations and objects are lawful, and what not 24. The consideration or object of an agreement is lawful, unless –

it is forbidden by a 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. [18] Upon scrutinizing the consideration in the LOU and PA, I find there is nothing in them against the above statutory provision. The sale and transfer of the Property to the Defendant [19] According to the Defendant, the SPA was made between the Defendant as an individual and the Defendant being the holder of the PA as a result of the Plaintiff’s failure to comply with the conditions in the LOU. Consequently, the Defendant averred that she was entitled to invoke paragraph 13 of the PA as to sell the Property to herself. The paragraph reads – _________________________________________________________________________________ 9

For all or any of the purposes of this Deed to enter into and sign seal execute and perfect and as my act and deed to deliver any contract conveyance lease sale surrender transfer instrument deed or assurance in favour of such persons or himself as my attorney shall think fit and to receive and keep any proceeds therefrom. This Power of Attorney shall also confer to my attorney to create a mortgage, charge or lien, assignment or liabilities whatsoever in respect of the said Property. [20] Based on the facts presented before this court, as at 25.5.2019, the Plaintiff admitted to pay only RM10,000.00 to the Defendant. On 4.3.2020, the Plaintiff tried to settle the debt in full by giving a banker’s cheque of RM20,000.00 to the Defendant’s solicitors but it was not accepted reason being the payment was made after the date stipulated in the LOU. [21] A week after, that was on 12.3.2020, the Defendant as an individual signed the SPA with the Defendant herself as the Plaintiff’s PA holder to purchase the Property for a price of RM400,000.00. [22] On this issue, it clearly states in the LOU that if the Plaintiff fails to repay the debt in two consecutive months, the Defendant is entitled to sell the Property at the open market. However, during the trial, there was no evidence adduced by the Defendant to show any afford by the Defendant to sell the Property at the open market first as required in the LOU. This is to enable the Defendant to be eligible to invoke the right stated in the LOU as to sell the Property to her for a price of RM400,000.00. Undoubtedly, this condition had not been complied with by the Defendant. Thus, I find that the Defendant is not entitled to use the right in the PA to sign the SPA and MOT on behalf of the Plaintiff. _________________________________________________________________________________ 10 [23] As the MOT was void, by virtue of s. 340(2) of the National Land Code, the transfer of the Property which was made on 7.1.2021 must be set aside. The subsection reads –

The title or interest of any such person or body shall not be indefeasible —

in any case of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy; or

where registration was obtained by forgery, or by means of an insufficient or void instrument; or

where the title or interest was unlawfully acquired by the person or body in the purported exercise of any power or authority conferred by any written law. [24] In Tan Ying Hong v. Tan Sian San [2010] 2 CLJ 269; [2010] 2 MLJ 1, Zaki Azmi CJ held – [8] The situation where it is proved that the registration in B's name was obtained by forgery or by means of an insufficient or void instrument is the same (See s. 340(2)(b) of the NLC ). His title or interest to the land is liable to be set aside by the previous owner who has a good title. In this latter instance, there is no need to show that B was a party or privy to that forgery or to obtaining the title or interest by a void instrument. [25] In addition, there was no an iota of evidence showing the Defendant had paid RM400,000.00 for the purchase of the Property. When being asked about this by learned counsel for the Plaintiff, with a nonchalant _________________________________________________________________________________ 11 attitude, nothing came out from the Defendant’s mouth. One presumption can be made is the Defendant paid nothing for the purchase. [26] I have conducted this case from the very beginning to the end and examined the credibility of all the witnesses and their testimonies. I find that the Defendant is more interested on owning the Property rather than the payment of debt by the Plaintiff. This can be seen when the Defendant did not accept the banker’s cheque of RM20,000.00 given by the Plaintiff on 4.3.2020 whereas the SPA to purchase the Property was made a week after between the Defendant herself as individual and as the Plaintiff’s PA holder. Should the Defendant have taken the cheque, everything would have been resolved. Unfortunately, the Defendant took a different step by going after the Property instead of the outstanding sum. [27] Drawing the thread together, a reasonable inference may be drawn that the Defendant flagrantly lacks of bona fide in this matter. It is clearly unfair when the Defendant owned the Property worth of RM400,000.00 just because the Plaintiff failed to pay the debt of RM20,000.00 in time. Should the debt be the main concern, surely the Defendant must have received the payment made by the Plaintiff even if it was late than the due date. [28] What adds to the strangeness is that the transfer of the Property was discreetly concealed by the Defendant. The Defendant even refused to provide any information about the transfer of the Property despite repeated request from the Plaintiff’s solicitors. [29] In addition, the LOU also states that when the Property is sold, RM20,000.00 will be deducted from the sale proceeds and be given to the _________________________________________________________________________________ 12 Defendant. This means that only that amount is eligible to be received by the Defendant and not the Property worth of RM400,000.00. The remaining proceeds should be utilised to settle the loan with the bank and then be given to the Plaintiff who paid the deposit for the purchase of the Property. [30] It is my view that the court has the responsibility to prevent an innocent person from being treated injustice and oppressed like in our present case. The court must stop the Defendant from being unjustly enriched by taking advantage of owning the property worth of RM400,000.00 which is far higher than the debt of RM20,000.00. Conclusion [31] After judicious consideration of all the evidence before this Court, both oral and documentary, and submissions of all parties, I find that the Plaintiff had successfully proven his case on the balance of probability that the Defendant failed to comply with the pre-conditions in the LOU before she could invoke the PA to sell the Property to herself. As such, the SPA and the MOT are not valid. [32] Thus, I make the following orders:

the Defendant failed to comply with the pre-conditions and obligations in the LOU;

the Plaintiff is the valid owner of the Property held under geran 371088 Lot 93643 Mukim Pulai, Johor Bahru;

the transfer of the Property on 7.1.2021 is set aside; _________________________________________________________________________________ 13

the Defendant is to transfer the Property to the Plaintiff by signing all relevant documents and to surrender them to the Plaintiff’s solicitors within fourteen days of this order;

the Plaintiff is to pay his debt to the Defendant within fourteen days of this order; and

the costs are to be borne by the Defendant. Dated: 26.10.2022 - - SIGNED - (SHAMSULBAHRI BIN HAJI IBRAHIM) Judicial Commissioner, High Court, Johor Bahru Counsels: For the Plaintiff – K.S. Lim; Messrs S.K Song For the Defendant – Y.C Wong; Messrs Han & Partners Cases referred to: • Michael C Solle v. United Malayan Banking Corp Bhd [1984] 1 CLJ 151; [1984] 1 CLJ (Rep) 267; [1986] 1 MLJ 47 • Merritt v. Merritt [1970] 2 All ER 760 • Setapak Heights Development Sdn Bhd v. Tekno Kota Sdn Bhd [2006] 2 CLJ 337 • Tan Ying Hong v. Tan Sian San [2010] 2 CLJ 269; [2010] 2 MLJ 1 _________________________________________________________________________________ 14 Legislation referred to: • Contract Act 1950 – s. • National Land Code – s. 340(2)