Sritama Industries (M) Sdn. Bhd. v Ketua Pengarah Insolvensi Malaysia (BA-22NCvC-413-07/2017)

The plaintiff company (Plaintiff) and Mr. Murugan A/L Singaram (Defendant) entered into a Sale and Purchase Agreement dated 1.6.1999 (SPA) wherein the Defendant sold a piece of land held under title no. PM 8983, Lot 13850, Mukim Dengkil, Sepang District, Selangor (Land) to the Plaintiff at a price of RM100,000.00 (Price).

The Plaintiff claims that the Price has been paid in full to the Defendant and upon the Defendant’s request, an additional sum of RM30,000.00 has been given by the Plaintiff to the Defendant. 2

The Defendant refuses to complete the SPA and transfer title to the Land to the Plaintiff. According to the Defendant, the Defendant has only received a sum of RM30,000.00 from the Plaintiff for the Land.

On 9.4.2008, the Defendant had been adjudged a bankrupt. The Plaintiff subsequently obtained leave from the Bankruptcy Court to institute this suit against the Defendant (This Suit) and claimed for, among others, an order of specific performance of the SPA (SP Order).

The following questions are to be determined in This Suit:

is This Suit time-barred under s 9(1) of the Limitation Act 1953 [LA

(1953)]? In this regard -

whether the Defendant is estopped from raising a limitation defence when the Defendant has agreed with the Plaintiff that the sole issue to be decided in This Suit is whether the Plaintiff has paid the Price in full to the Defendant; and

does s 22(1)(b) LA (1953) apply in this case when the Plaintiff relies on the equitable doctrine of bare trust (Bare Trust Doctrine) to support This Suit?;

did the Plaintiff pay RM130,000.00 or RM30,000.00 to the Defendant for the purchase of the Land?;

whether the court should exercise its discretion under s 114(g) of the Evidence Act 1950 (EA) to draw an adverse inference against - 3

the Plaintiff for not adducing, among others, the Defendant’s acknowledgement of receipt of the Price in full from the Plaintiff; and

the Defendant for suppressing from this court and the Plaintiff the fact that the Defendant had applied to the Land Administrator (LA) and had obtained a “title in continuation” for the Land (Replacement IDT);

did the Defendant obtain the Replacement IDT in compliance with s 166(1)(a) to (j) of the National Land Code (NLC)?; and

whether the court should exercise its discretionary power to -

grant a SP Order pursuant to s 11(1)(c) of the Specific Relief Act 1950 (SRA) when the Plaintiff relies on the Bare Trust

order an assessment of compensation to be paid by the Defendant to the Plaintiff in addition to the SP Order as provided in s 18(1), (3) and (4) SRA;

issue a mandatory injunction under s 53 SRA to compel the Defendant to surrender the Replacement IDT to the LA; and

order the LA to cancel the Replacement IDT under s 417(1) NLC. 4 C. Plaintiff’s case

The Plaintiff called the following three witnesses to give evidence in support of This Suit:

Mr. Lim Piak Chai (SP1), a director of the Plaintiff;

Mr. Lim Kwee (SP2), the Plaintiff’s director and SP1’s brother; and

Mr. Ling Ai Hong (SP3), an Advocate and Solicitor who practises law in Messrs Seah, Balan Ravi & Co. (Messrs SBR).

SP1 testified as follows, among others:

SP1 witnessed the signing of the SPA on 1.6.1999 by SP2 and Mr. Lim Boon Hin (LBH). SP2 and LBH signed the SPA on behalf of the Plaintiff. LBH is a director of the Plaintiff and a brother of SP1 and SP2;

the signing of the SPA on 1.6.1999 by the Defendant was witnessed by SP1, SP2, SP3 and LBH;

after the SPA had been signed -

the Price in full was handed over in cash to the Defendant by SP2 and LBH (on behalf of the Plaintiff) in the presence of SP1 and SP3. The Defendant signed a payment voucher which acknowledged that the Defendant had received the Price in full (PV). The PV was kept by SP3 in SP3’s office; and 5

the Defendant handed the original “Issue Document of Title” to the Land (Original IDT) to SP3; and

in 2002, the Defendant requested a further sum of RM30,000.00 (Additional Sum) from the Plaintiff to complete the SPA. This was because the Defendant was heavily in debt and needed the Additional Sum. The Plaintiff agreed and paid the Additional Sum by way of six cheques (6 Cheques).

SP2’s evidence was similar to SP1’s testimony except that SP2 had been informed by SP3 that the PV had been misplaced. Hence, SP2 lodged Banting Police Report No. 7571/16 on 19.8.2016 regarding the loss of the PV (SP2’s Police Report).

SP3 gave the following evidence, among others:

SP3’s testimony corroborated the evidence of SP1 and SP2;

the PV was kept in SP3’s office. However, SP3 could not locate the PV despite the fact that SP3 had searched for the PV. Hence, Banting Police Report No. 7572/16 was made by SP3 on 19.8.2016 regarding the loss of the PV (SP3’s Police Report);

on 10.2.2000, the Defendant came to SP3’s office and signed the Memorandum of Transfer of the Land (Form 14A); and

there was a delay in the transfer of the Land from the Defendant to the Plaintiff due to the following reasons -

the transfer of the Land from the Defendant to the Plaintiff could not be registered because of two private caveats lodged by Mr. 6 Vijekumar A/L A. Packery Samy (Mr. Vijekumar) and Ms. Parimala Devi A/P Veerarajalu (Ms. Parimala). During cross-examination of the Defendant, the Defendant admitted borrowing money from Mr. Vijekumar and Ms. Parimala and that was the reason why Mr. Vijekumar and Ms. Parimala entered private caveats over the Land;

the Land was initially registered in the name of the Defendant’s mother, Madam R. Palaiai A/P Ramasamy (Defendant’s Mother). After the Defendant’s Mother had passed away, the Defendant had to apply to court for the Letters of Administration of the estate of the Defendant’s Mother [LA (Defendant’s Mother)]. After the Defendant had obtained the LA (Defendant’s Mother), the Defendant then executed Form 14A as the administrator of the Defendant’s Mother and transferred the

the Land is subject to a restriction in interest, namely the Land cannot be, among others, sold or transferred without the approval of the State Authority (SA). By way of Messrs SBR’s letter dated 24.4.2003 [Messrs SBR’s Letter (24.4.2003)], SP3 applied for the SA’s approval to transfer the Land from the Defendant to the Plaintiff (SA’s Approval). Messrs SBR’s Letter (24.4.2003) was copied to the Plaintiff and Defendant. The LA sent a letter dated 3.12.2003 to the Defendant [LA’s Letter (3.12.2003)] which stated that SA’s Approval had been 7 granted. LA’s Letter (3.12.2003) was copied to Messrs SBR and the Plaintiff. D. Defendant’s case

The Defendant testified in This Suit and did not call any other witness. According to the Defendant, among others -

by way of the 6 Cheques, the Plaintiff only paid RM30,000.00 to the Defendant for the Land. The Defendant denied that the Plaintiff had paid to the Defendant RM100,000.00 by cash for the Land; and

the Defendant had made Klang Police Report no. 9709/18 on 1.11.2018 (Defendant’s Police Report). The Defendant’s Police Report stated that, among others -

the Plaintiff did not pay RM100,000.00 by cash to the

SP2 and SP3 had conspired (berkomplot) to commit deception (penipuan). E. Credibility of witnesses

I find as a fact that SP1, SP2 and SP3 are witnesses to the truth. This decision is premised on the following evidence and reasons:

the testimonies of SP1, SP2 and SP3 that the Plaintiff has paid the Price in full to the Defendant, are supported by the following documents and events - 8

after the Price had been paid in full by the Plaintiff to the Defendant, the Plaintiff lodged a private caveat over the Land on 12.7.1999 (Plaintiff’s 1st Caveat). In support of the Plaintiff’s 1st Caveat, SP2 affirmed a statutory declaration (SD) on 8.7.1999 which confirmed the full payment of the Price by the Plaintiff to the Defendant. If the Plaintiff had not paid the Price in full to the Defendant, the Plaintiff’s 1st Caveat would not have been entered and SP2 would not have affirmed the SD; and

due to the delay in the transfer of the Land from the Defendant to the Plaintiff (as explained by SP3), the Plaintiff entered a second and third private caveat over the Land on 18.11.2008 (Plaintiff’s 2nd Caveat) and 20.1.2015 (Plaintiff’s 3rd Caveat) respectively;

if the Defendant did not receive the Price in full from the Plaintiff -

the Defendant would not have handed over the Original IDT to SP3;

(ii) the Defendant would not have gone to SP3’s law office on 10.2.2000 and signed Form 14A (after the signing of the SPA);

(iii) the Defendant would have applied to court [pursuant to s 327(1) NLC] to remove the Plaintiff’s 1st, 2nd and 3rd Caveats (Plaintiff’s 3 Caveats). The fact that the Defendant has not 9 applied to court to remove the Plaintiff’s 3 Caveats, supports the veracity of SP1, SP2 and SP3;

(iv) when the Defendant received LA’s Letter (3.12.2003) and was notified that SA’s Approval had been granted, the Defendant would have written to the LA to state that the Plaintiff had not paid the Price in full and the Defendant could not therefore proceed to complete the SPA. At no time did the Defendant apply to the SA to revoke SA’s Approval on the ground that the Plaintiff had not paid the Price in full to the Defendant;

the Defendant would have written to Messrs SBR or the Plaintiff to demand the Plaintiff to pay RM70,000.00 to the Defendant and if the Plaintiff had still refused to pay RM70,000.00, the Defendant would have sent a letter to Messrs SBR or the Plaintiff - (va) to terminate the SPA; (vb) to claim for the return of the Original IDT by Messrs

(vc) to enforce clause 7.01 SPA (Clause 7.01). Clause 7.01 provides that if the Plaintiff fails to pay the Price in accordance with the SPA, the Defendant “shall” be entitled to forfeit RM10,000.00 as agreed liquidated damages (LAD). The Defendant did not send any letter to Messrs SBR or the Plaintiff to forfeit RM10,000.00 as LAD pursuant to Clause 7.01. 10 Instead the Defendant kept RM30,000.00 contrary to Clause 7.01;

(vi) the Defendant did not counterclaim in this case for a declaration that the SPA had been lawfully terminated by the Defendant due to the Plaintiff’s failure to pay RM70,000.00 to the Defendant; and

(vii) if the Defendant’s testimony were true, the Defendant would have sold the Land to a third party to solve the Defendant’s financial problems and to stave off the Defendant’s bankruptcy; and

the 6 Cheques were issued from 26.6.2002 (the date of the first cheque) until 20.8.2002 (the date of the sixth cheque). If the Defendant did not receive the Price at all when the SPA was signed on 1.6.1999, it was inconceivable for the Defendant to -

to accept all the 6 Cheques without any protest or reservation of the Defendant’s right to claim for RM70,000.00 from the Plaintiff; and

(ii) receive the last of the 6 Cheques on 20.8.2002, for a period of more than 3 years and 2½ months after the Plaintiff’s purported failure to pay the Price in full upon the signing of the SPA on 1.6.199;

the testimonies of SP1 and SP2 that the Additional Sum was given by the Plaintiff to the Defendant on the ground that the Defendant was heavily indebted, was supported by the following evidence - 11

the Defendant’s own admission during cross-examination that the Defendant had borrowed money from Mr. Vijekumar and Ms.

the Defendant was subsequently adjudicated a bankrupt due to the Defendant’s indebtedness;

the oral evidence of SP1, SP2 and SP3 mutually corroborate each other; and

the cross-examination of SP1, SP2 and SP3 by the Defendant’s learned counsel did not show any reason to doubt their credibility.

This court is unable to find that the Defendant is a credible witness. The Defendant’s veracity is doubted due to the following evidence and reasons:

the Defendant is not a gullible person. On the contrary, the Defendant has a Masters in Business Administration and has served as a former councillor in “Majlis Perbandaran Sepang” (from 1999 to 2002). From the cross-examination of the Defendant, I have found as a fact that the Defendant is highly intelligent as well as is fluent in English;

with the Defendant’s background as explained in the above sub-paragraph (1), it was not probable that the Defendant did not receive the Price in full from the Defendant. If it were true that the Defendant only received RM30,000.00 from the Plaintiff for the sale of the Land, 12 the Defendant would have done what was stated in the above sub-paragraphs 11(1)(c)(i) to (vii);

the Defendant had suppressed material evidence from the court and the Plaintiff, namely the fact that the Defendant had applied to the LA and obtained the Replacement IDT - please see paragraph 25 below. Such a suppression of material evidence shows a lack of probity on the Defendant’s part;

in paragraph 27 below, I have explained that the Defendant has obtained the Replacement IDT contrary to s 166(1)(a) to (j) NLC. In other words, the Defendant has breached s 166(1)(a) to (j) NLC and is not a trustworthy witness;

the evidence and reasons explained in the above sub-paragraph 11(1)(d)(i) and (ii) severely undermine the Defendant’s credibility; and

recital 7 to the SPA stated that the Defendant did not wish to appoint a solicitor. Yet, the Defendant was less than honest when he testified during cross-examination that SP3 was acting as a solicitor for the Defendant in respect of the SPA! The Defendant then changed his evidence in re-examination and stated that SP3 had “advised” the Defendant that the Defendant did not need a lawyer for the SPA. F. Is This Suit time-barred?

The Defendant has contended that This Suit is time-barred by s 9(1) LA

which provides as follows: 13 “Limitation of actions to recover land 9(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him, or if it first accrued to some person through whom he claims, to that person.” (emphasis added).

O 34 r 2(2)(k) of the Rules of Court 2012 (RC) provides that the court may issue pre-trial case management directions regarding, among others, issues which parties have agreed for the court to decide. Both the Plaintiff and Defendant have agreed that the sole issue to be tried in This Suit is whether the Plaintiff has paid RM100,000.00 to the Defendant (List of Agreed Issue). The Defendant has not applied for leave of court to amend the List of Agreed Issue to include the question of whether This Suit is time-barred pursuant to s 9(1) LA. As such, the Defendant is estopped by the List of Agreed Issue from raising the limitation defence under s 9(1) LA. In Charles Koo Ho-Tung & Ors v Koo Lin Shen & Ors [2016] 2 CLJ 267, at [11] to [13], I have decided that a party in a contentious matter may be estopped from relying on a certain position in the case if the party has earlier conducted his or her case in a manner contrary to the earlier position. The appeal to the Court of Appeal in Charles Koo Ho-Tung has been withdrawn.

In any event, I am satisfied that This Suit is not time-barred under s 9(1) LA (1953) due to the following reasons:

s 9(1) LA (1953) applies to an action “to recover any land”. This Suit applies for a SP Order to compel the Defendant to perform the SPA. This Suit is not an action to recover the Land. Hence, the Defendant 14 cannot rely on s 9(1) LA (1953) in this case. I cite the Court of Appeal’s judgment delivered by James Foong JCA (as he then was) in Dato’ Wira Nordin Mohd Amin & Ors v Rajoo Selvappan & Ors [2007] 4 CLJ 421, at [11] and [12] as follows - “[11] The first is s. 9 [LA (1953)] which the learned High Court Judge had made reference to in his grounds of judgment. Section 9 [LA (1953)] concerns the recovery of land as indicated by the heading which reads: “Limitation of actions to recover land”. … [12] But in the proposed amended statement of claim, the respondents did not seek for recovery of the said land. They only requested for damages. So it is our view that s. 9 [LA

(1953)] is not applicable to the facts of this case which consist no claim for the recovery of land.” (emphasis added); and

as explained in Part H below, the Bare Trust Doctrine applies in This Suit wherein the Defendant is the registered proprietor of the Land as a bare trustee for the benefit of the Plaintiff. Accordingly, the Land constitutes trust property which is beneficially owned by the Plaintiff. In such circumstances, s 22(1)(b) LA (1953) applies in This Suit. Section 22 LA (1953) provides as follows - “Limitation of actions in respect of trust property s 22(1) No period of limitation prescribed by [LA (1953)] shall apply to an action by a beneficiary under a trust, being an action -

in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or 15

to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.

Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of [LA (1953)], shall not be brought after the expiration of six years from the date on which the right of action accrued: Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property, until the interest fell into possession.

No beneficiary as against whom there would be a good defence under this Act shall derive any greater or other benefit from a judgment or order obtained by any other beneficiary than he could have obtained if he had brought the action and this Act had been pleaded in defence.” (emphasis added). It is decided in Dato’ Wira Nordin Mohd Amin, at [14] and [15], as follows - “[14] Regarding this section of the Act, the learned High Court Judge was of the view that sub-section (1) and (2) of this section is in “conflict and inconsistent” with each other. He pointed out that when s 22(1) specifies that no period of limitation applies for a claim falling within the circumstances described in s 22(1)(a) and (b), s 22(2) prescribed a limitation period of six years for “an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this 16 Act”. To resolve this, he considered s 22(2) to be subservient to s 22(1) and therefore “must in effect give way to s 22(1)”. [15] We do not share this view of the learned High Court Judge for the following reasons: First, we found no conflict or inconsistency between s 22(1) and s 22(2) [LA (1953)]. Each of these sub-sections applies to different set of circumstances. Section 22(1) relates to a claim by a beneficiary: (a) “in respect of any fraud or fraudulent breach of trust which the trustee was a party or privy; or (b) to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee converted to his use”. So under sub-section (a) of s 22(1), there must be the element of fraud or fraudulent breach of trust. And under sub-section (b) of s 22(1), the trust property must be in the possession of the trustee or he has in possession of the proceeds thereof. On the other hand, s 22(2) [LA (1953)] is only confined to a beneficiary’s action “to recover trust property or in respect of any breach of trust not being an action which a period of limitation is prescribed”. The recovery of trust property here must mean trust property which is no longer in the possession of the trustee since s 22(1)(b) [LA (1953)] has already catered for situation where the trust property is in the possession of the trustee. For recovery of trust property which is not in the possession of the trustee or for that matter any breach of trust would fall within s 22(2) of the Act, provided that the action so mounted by the beneficiary is not one of those causes of action or situation where a time limit is already prescribed by the Act to bring the action. If a time is so prescribed, then the prescribed period of limitation specified in the Act will apply. Otherwise, it will be six years from the date on which the action accrued. So from the above observation, the distinction between s 22(1) and s 22(2) of the Act is clear. There is no conflict or inconsistency between the two.” 17 (emphasis added). Premised on Dato’ Wira Nordin Mohd Amin, s 22(1)(b) LA (1953) applies in this case because the Land which constitutes trust property (by virtue of the application of Bare Trust Doctrine) is still in the Defendant’s possession. Hence, This Suit is not time-barred by reason of s 22(1)(b) LA (1953).

I have not overlooked the question of whether the Plaintiff has been guilty of inordinate delay which attracts the application of the defence of laches. Section 32 LA (1953) states that LA (1953) does not affect the court’s equitable jurisdiction to refuse relief on the ground of acquiescence or laches. SP3 has given a credible explanation for the delay in the transfer of the Land from the Defendant to the Plaintiff. In any event, the Land cannot be transferred from the Defendant to the Plaintiff because the Defendant has surreptitiously applied for and obtained a Replacement IDT. G. How much did Plaintiff pay Defendant for Land?

I find as a fact that the Plaintiff has paid RM130,000.00 to the Defendant for the Land. This finding of fact is supported by the following evidence and reasons:

as explained in the above sub-paragraphs 11(1)(a) to (d), the Plaintiff had paid the Price in full to the Defendant;

the Defendant did not dispute that the Additional Sum had been paid by the Plaintiff to the Defendant; and 18

this court finds as a fact that SP1, SP2 and SP3 are credible witnesses (please see the above paragraph 11) whereas the Defendant is found to be an unreliable witness (please refer to the above paragraph 12).

In view of the above finding of fact, this court finds that the Plaintiff has succeeded to discharge the legal and evidential burden under ss 101(1),

and 102 EA to prove This Suit against the Defendant on a balance of probabilities. H. Application of Bare Trust Doctrine

In Tan Ong Ban v Teoh Kim Heng [2016] 3 MLJ 23, at [33] to [39], Arifin Zakaria CJ delivers the following judgment of the Federal Court: “The principle of beneficial ownership [33] We will begin with an elucidation of the principle of beneficial ownership which we think is crucial to this case. This principle of beneficial ownership was alluded to by Edgar Joseph JR in Borneo Housing Mortgage Finance Bhd where he observed: “… the contractual events which result in the vendor becoming a bare trustee of the land the subject matter of the agreement of sale and purchase for the purchaser, is on completion, that is to say, upon receipt by the vendor of the full purchase price, timeously paid and when the vendor has given the purchaser a duly executed, valid and registrable transfer of the land in due form, in favour of the purchaser, for it is then the vendor divest himself of his interest in the land. 19 (Emphasis added.) [34] According to this principle, when a purchaser of a property has performed his or her contractual obligation upon the full settlement of the purchase price besides executing all the formal documents to effect the registration of ownership, equity accords him or her with all the rights and privileges of a legal owner over the property. The purchaser thus enjoys the benefit of being the owner of the acquired property even though he or she has yet to become its registered owner. [35] This is clearly demonstrated by the case of J Raju v Kwong Yik Bank Bhd & Anor [1994] 2 MLJ 408; [1994] 2 AMR 1220, where the Supreme Court held that: “… the vendor of the land is only regarded as having divested himself of the beneficial interest in his land and vested it on the purchaser at the time when the purchase money had been paid in full.” (see also M & J Frozen Food Sdn Bhd and Peninsular Land Development Sdn Bhd v K Ahmad [1970] 1 MLJ 149). [36] The principle of beneficial ownership differentiate between the rights of a purchaser of a property who has fully settled the purchase price with one who has not. This principle clothes a purchaser who has settled the full purchase price with a distinct privilege equivalent to a legal owner, although he or she has yet to be registered as the proprietor of the property. [37] Under this principle of beneficial ownership, the vendor becomes a bare trustee for the purchaser in respect of the transacted property, while the purchaser assumes the position of beneficial owner having right in rem over the property. The purchaser is 20 commonly accepted as having a beneficial interest in the land on the execution of the contract and upon which specific performance may be granted by the court. This beneficial interest is also sufficient to entitle the purchaser to enter a caveat under the NLC. [38] On the other hand, a purchaser who has not settled the full purchase price does not enjoy such benefit. The right of such purchaser is contractual in nature and in personam. He or she does not have any beneficial interest in the property. In the event of dispute, such purchaser can only institute action against the vendor with whom he or she has contracted. In other words, such purchaser merely enjoys a contractual right or a right in personam. [39] In short, a beneficial or equitable owner of a property stands in the same position as the legal owner in terms of enforcing proprietorship rights against the world at large. The only difference is that a beneficial owner is yet to be vested with the legal title.” (emphasis added).

Based on Tan Ong Ban -

upon the execution of the SPA;

the payment of RM130,000.00 by the Plaintiff to the Defendant for the Land;

the handing over of the Original IDT by the Defendant to SP3 (who received on behalf of the Plaintiff);

the execution of Form 14A (to transfer the Land to the Plaintiff) by the Defendant; and 21

when SA’s Approval is obtained - the Defendant is a registered proprietor of the Land under NLC as a bare trustee of the Land for the sole benefit of the Plaintiff. I. Whether court should draw adverse inference under s 114(g) EA

It is decided in Wong Thian Choy & Anor v Goodnite Sdn Bhd & Anor [2019] 7 AMR 82, at [17], as follows: “[17] The following legal propositions are not disputed:

an adverse inference may be drawn under s 114(g) EA against a party for suppressing material evidence in a case - please see the Supreme Court’s judgment delivered by Mohd. Azmi SCJ in Munusamy v Public Prosecutor [1987] 1 MLJ 492, at 494; and

in civil cases, an adverse inference under s 114(g) EA may be made by the court against a defendant - please refer to the decision of Hashim Yeop Sani CJ (Malaya) in the Supreme Court case of Guthrie Sdn Bhd v Trans-Malaysian Leasing Corp Bhd [1991] 1 MLJ 33, at 34-35.” (emphasis added).

I cannot exercise my discretion to draw an adverse inference under s 114(g) EA against the Plaintiff for the non-production of the PV because the Plaintiff has adduced evidence through SP2 and SP3 that the PV is lost. Such evidence by SP2 and SP3 is supported by SP2’s Police Report and SP3’s Police Report respectively. 22

During cross-examination of SP2, the Defendant’s learned counsel put to SP2, among others, that the Plaintiff could not produce the Plaintiff’s audited accounts (Plaintiff’s Accounts) to prove that -

the Plaintiff had paid the Price in full to the Defendant; and

the Land is recorded as an asset of the Plaintiff. This court cannot accede to the Defendant’s invitation to make an adverse inference pursuant to s 114(g) EA against the Plaintiff for the non-production of the Plaintiff’s Accounts. This decision is based on the following evidence:

the Defendant could have requested for the Plaintiff to produce the Plaintiff’s Accounts (Defendant’s Request) for the purpose of compiling the court’s “Common Bundle of Documents” (CBD) under O 34 r 2(2)(c) RC. If the Defendant’s Request has been made and if the Plaintiff refuses to produce the Plaintiff’s Accounts to be included in the CBD, the Defendant can apply for a court order to compel the Plaintiff to produce the Plaintiff’s Accounts pursuant to O 24 rr 3(1) and/or 7(1) 8 RC (Discovery Application). The Defendant’s solicitors could have given notice to the Plaintiff’s solicitors under s 163 EA to produce the Plaintiff’s Accounts at the trial of this case (Notice To Produce). Section 163 EA provides as follows - “Giving as evidence of document called for and produced on notice 23

When a party calls for a document which he has given the other party notice to produce, and the document is produced and inspected by the party calling for its production, he is bound to give it as evidence if the party producing it requires him to do so and if it is relevant.” (emphasis added). In view of the fact that -

the Defendant’s Request was not made;

the Defendant did not make a Discovery Application; and

No Notice To Produce was given by the Defendant to the Plaintiff; - it is neither just nor fair to “ambush” SP2 during cross-examination regarding the Plaintiff’s Accounts; and

SP2 has given a credible explanation that the Plaintiff’s Accounts have been destroyed in a flood.

Even if I have drawn an adverse inference against the Plaintiff for the failure to produce the PV and/or the Plaintiff’s Accounts, such an inference can be rebutted by other evidence - please see the Supreme Court’s judgment delivered by Syed Agil Barakbah SCJ in Namasiyiam & Ors v Public Prosecutor [1987] 2 MLJ 336, at 343. As explained in the above paragraphs 11, 12 and 17, this court finds that there is overwhelming evidence to prove that the Plaintiff has paid RM130,000.00 to the Defendant for the Land and such overwhelming 24 evidence will rebut any adverse inference arising from the Plaintiffs’ failure to adduce the PV and/or the Plaintiff’s Accounts.

During further re-examination of the Defendant by the Defendant’s learned counsel, for the very first time, the Defendant disclosed that the Defendant had obtained the Replacement IDT. This fact is material in this case because with the Replacement IDT, even if This Suit is allowed, the SP Order will be defeated because the Plaintiff cannot register the transfer of the Land from the Defendant to the Plaintiff. Consequently, I am constrained to draw an adverse inference under s 114(g) EA against the Defendant for suppressing the Replacement IDT from the court and the Plaintiff. In fact, Lee Hun Hoe CJ (Borneo) decided in the Supreme Court case of Cheah Cheng Hoc v Public Prosecutor [1986] 1 MLJ 299, at 300, that if a person deceives the court by suppressing a material fact, such a suppression amounts to a contempt of court in the form of an abuse of court process. J. Is Replacement Title valid under s 166(1)(d) NLC?

I reproduce below s 166(1) and (3) NLC: “Circumstances in which title in continuation may be issued to land as a whole. 166(1) The circumstances in which title in continuation may be issued under this Chapter to any land as a whole are as follows -

where the Registrar or Land Administrator decides with respect to the register document of title thereto -

at the time when he makes any entry thereon, that there is insufficient space for the making of further entries, or 25

(ii) at any time, that the document can, by reason of its physical condition, no longer be used;

where, on its production to him for any purpose, the Registrar or Land Administrator makes a similar decision with respect to the issue document of title thereto:

where, by a notice or notices under section 15, the Registrar or Land Administrator has called upon the proprietor and any chargee, lienholder or other person or body whom he may have reason to believe to be in possession thereof, to produce the issue document of title, and notice or notices have not been complied with;

where an application therefor has been made by any person or body in accordance with the provisions of sub-sections (2) and

(3), on the grounds that the issue document of title has been lost, or wholly or partially destroyed, or is being improperly or wrongfully withheld;

where, on a partial surrender of land or on the re-survey of a natural boundary, the Registrar is required by sub-section (3) of section 202 or sub-section (3) of section 354 to issue title in continuation to land as a whole;

where any alienated land has been partially affected by encroachment by the sea or any river;

where a document of title relates to more than one lot;

where only part of a piece of land has been acquired by the State and the part left unacquired has been resurveyed;

where the Registrar or Land Administrator decides that a multileaf title is required to be issued; and 26

where action has been taken under sub-section (2) of section 160B. …

Every such application shall be made in writing to the Registrar or, in the case of land held under Land Office title, the Land Administrator, and shall be supported by such evidence of the loss, destruction or withholding therein alleged as the Registrar or Land Administrator may require.” (emphasis added).

There is no dispute that the Original IDT has been handed by the Defendant to SP3 (acting on behalf of the Plaintiff). The Original IDT is not lost within the meaning of s 166(1)(d) NLC. As explained above, this court has found as a fact that the Plaintiff has paid RM130,000.00 for the Land to the Defendant. Hence, the Plaintiff (through SP3) is not withholding the Original IDT improperly or wrongfully under s 166(1)(d) NLC. It is clear that none of the circumstances stipulated in s 166(1)(a) to

NLC apply to justify the Defendant to apply for the Replacement IDT. Accordingly, the Defendant has obtained the Replacement IDT contrary to s 166(1)(a) to (j) NLC.

Before I discuss the next question in this case, I must highlight s 422(a) and (d) NLC which provide as follows: “Penalty for false statements etc.

Any person who -

knowingly makes any false statement, orally or in writing, in connection with any dealing or other transaction affecting land, or any other matter arising under this Act, or … 27

suppresses or conceals from the Registrar, or assists or joins in so doing, any material document, fact or matter, shall be guilty of an offence, and liable on conviction to a fine not exceeding five hundred thousand ringgit or to imprisonment for a term not exceeding five years, or to both.” (emphasis added). If any person knowingly makes a false statement to the LA in the person’s application for a Replacement IDT, the person would have committed an offence under s 422(a) NLC. If there is suppression or concealment from the LA regarding any material document, fact or matter in respect of a person’s application for a Replacement IDT, an offence under s 422(d) NLC may have been committed. K. What is appropriate relief in This Suit? K(1). Whether court should grant SP Order

Section 11(1)(c) and (2) SRA provide as follows: “Cases in which specific performance enforceable 11(1) Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the court, be enforced - …

when the act agreed to be done is such that pecuniary compensation for its non-performance would not afford adequate relief; or ILLUSTRATIONS 28

A contracts with B to sell him a house for RM1,000. B is entitled to a decree directing A to convey the house to him, he paying the purchase-money. …

Unless and until the contrary is proved, the court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer movable property can be thus relieved.” (emphasis added).

By virtue of s 11(2) SRA, there is a rebuttable presumption that a breach of an agreement to transfer immovable property cannot be adequately remedied by monetary compensation. In this case, the Defendant has breached the SPA by not transferring the Land to the Plaintiff (Defendant’s Breach). Firstly, the Defendant has not adduced any evidence to satisfy this court that monetary compensation is a sufficient remedy for the Defendant’s Breach. Hence, I find as a fact that the Defendant has failed to rebut the presumption provided in s 11(2) SRA that monetary compensation is not an adequate remedy for the Defendant’s Breach.

In an appeal to the Privy Council from Malaysia, Zaibun Sai Bte Syed Ahmad v Loh Koon Moy & Anor [1982] 2 MLJ 92, at 94, Lord Russell has explained that the court has a discretion under s 11(1)(c) SRA to grant a SP Order or otherwise.

I exercise my discretion under s 11(1)(c) SRA to grant a SP Order in favour of the Plaintiff because the Defendant holds the registered title to 29 the Land as a bare trustee for the sole benefit of the Plaintiff - please see the above paragraph 20. K(2). Should court order compensation in addition to SP Order?

Section 18(1), (3) and (4) SRA provide as follows: “Power to award compensation in certain cases 18(1) Any person suing for the specific performance of a contract may also ask for compensation for its breach, either in addition to, or in substitution for, its performance. …

If in any such suit the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. ILLUSTRATION A contracts with B to sell him a house for RM1,000, the price to be paid and the possession given on the 1st January. A fails to perform his part of the contract, and B brings his suit for specific performance and compensation, which is decided in his favour. The decree may besides ordering specific performance, award to B compensation for any loss which he has sustained by A’s refusal.

Compensation awarded under this section may be assessed in such a manner as the court may direct.” (emphasis added). 30

In this case, pursuant to s 18(1), (3) and (4) SRA, I order compensation to be paid by the Defendant to the Plaintiff regarding the Defendant’s Breach (Compensation). This is because the “justice of the case” requires, if not demands, Compensation to be assessed by the learned Registrar of the High Court. The order for Compensation is premised on the following reasons:

the Plaintiff had not only paid the Price in full to the Defendant but at the Defendant’s request, the Plaintiff had paid the Additional Sum; and

the Plaintiff had been deprived of the enjoyment, benefit and use of the Land due to the Defendant’s Breach. K(3). Whether court should compel Defendant’s surrender of Replacement IDT

The court has a discretion to issue a mandatory injunction under s 53 SRA - please see Philip Morris Brands Sarl v Goodness for Import and Export & Ors [2017] 10 CLJ 337, at [66]. Section 53 SRA states as follows: “Mandatory injunctions 53. When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts.” (emphasis added). 31

If the court does not issue a mandatory injunction pursuant to s 53 SRA to compel the Defendant to surrender the Replacement IDT to the LA, this will cause an injustice to the Plaintiff because the Defendant will be able to stifle unlawfully the SP Order and the Land cannot therefore be transferred from the Defendant to the Plaintiff. As such, I have no hesitation to exercise my discretion to grant a mandatory injunction under s 53 SRA to compel the Defendant to surrender the Replacement IDT to the LA. K(4). Should court order LA to cancel Replacement IDT?

Section 417(1) NLC provides as follows: “General authority of the Court. 417(1) The Court or a Judge may by order direct the Registrar or any [LA] to do all such things as may be necessary to give effect to any judgment or order given or made in any proceedings relating to land, and it shall be the duty of the Registrar or [LA] to comply with the order forthwith.” (emphasis added).

Regarding the application of s 417(1) NLC, suffice it to cite the judgment of Suffian FJ (as he then was) in the Federal Court case of Sungei Biak Tin Mines Ltd v Saw Choo Theng & Anor (No 2) [1970] 2 MLJ 226, at 227, as follows: “Section 417 of the National Land Code clearly says that the court has power to direct the Collector to do all such things as may be necessary to give effect to its judgment or order. If we did not order the collector to remove Mr. Lee's name from the register and put back 32 on it that of the defendant company, we would be allowing the plaintiffs and Mr. Lee to thumb their noses at a judgment of the Federal Court, and I do not think that we should allow that. We should give effect to our judgment and order the collector to get Mr. Lee off the register and put the defendant company back on it.” (emphasis added).

If the court does not order the LA to cancel the Replacement IDT pursuant to s 417(1) NLC, this will unlawfully defeat the SP Order and this in turn, will cause irreparable prejudice to the Plaintiff who has succeeded in This Suit. Accordingly, upon the Defendant’s surrender of the Replacement IDT to the LA, the LA is ordered to cancel the Replacement IDT under s 417(1) NLC. This will then enable the SP Order to be enforced. L. Summary of court’s decision

In brief, This Suit is allowed with costs on the following grounds:

This Suit is not time-barred because -

the Plaintiff is not claiming for a recovery of the Land. Hence, s 9(1) LA (1953) does not bar This Suit; and

as the Plaintiff is relying on the Bare Trust Doctrine to claim that the Land constitutes trust property in the Defendant’s possession, This Suit is not time-barred under s 22(1)(b) LA

(1953); 33

the Plaintiff has proven on a balance of probabilities that the Plaintiff has paid a total of RM130,000.00 to the Defendant for the Land;

the Bare Trust Doctrine applies in this case wherein the Defendant is a registered proprietor of the Land under NLC as a bare trustee of the Land for the sole benefit of the Plaintiff;

the court will not exercise its discretion to draw an adverse inference under s 114(g) EA against the Plaintiff for the non-production of the PV and the Plaintiff’s Accounts because the Plaintiff has adduced evidence to explain their non-production. On the contrary, an adverse inference pursuant to s 114(g) EA is made against the Defendant for suppressing a material fact from the court and the Plaintiff (that the Defendant has obtained the Replacement IDT);

the Defendant has obtained the Replacement IDT contrary to s 166(1)(a) to (j) NLC; and

the court exercises its discretionary power to grant the following relief, among others, to the Plaintiff -

a SP Order is granted under s 11(1)(c) SRA;

by virtue of s 18(1), (3) and (4) SRA, Compensation (in addition to the SP Order) is ordered to be paid by the Defendant to the Plaintiff regarding the Defendant’s Breach;

a mandatory injunction is issued under s 53 SRA to compel the Defendant to surrender the Replacement IDT to the LA; and 34

the LA is ordered to cancel the Replacement IDT under s 417(1) NLC. WONG KIAN KHEONG Judge High Court of Malaya Shah Alam, Selangor Darul Ehsan DATE: 16 DECEMBER 2019 Counsel for Plaintiff: Mr. Ravichandren A/L Supramiam & Ms. Lee Shu Min (Messrs Seah Balan Ravi & Co.) Counsel for Defendant: Mr. Arun A/L Kasi & Ms. Nicole Lee Hui Ching (Messrs Arun Kasi & Co.)