Tan Nyok Chin v Pemungut Duti Setem (B-01(NCvC)(A)-388-06/2024)

The late Mr. Yong An Yee @ Yong Soo Teck (Deceased) was the husband of the appellant (Appellant).

The Deceased owned a piece of land held under "Geran Mukim 3644, No. Lot 577, Mukim Serendah, Daerah Hulu Selangor, Selangor" (Land).

The Deceased died testate on 7.11.2019. According to the Deceased's will dated 25.4.2008 (Will) -

PT Trustee Services Bhd. (Trust Corporation) was appointed as the executor of the Deceased's estate (Estate); and

the Land shall be distributed as follows-No.BeneficiaryRelationship with DeceasedUndivided share of the Land1.AppellantWife20%2.Yong Sam KaiSon20%3.Yong Ya JingDaughter15%4.Yong Rui PinDaughter15%5.Yong Wei LingDaughter15%6.Yong Jie ShunDaughter15%

The Trust Corporation declined to administer the Estate. Hence, the Appellant applied to the High Court for a grant of Letters of Administration to administer the Estate (LA).

On 16.6.2020, the High Court granted the LA and appointed the Appellant as the sole administrator of the Estate (Administrator).

By way of a "Deed of Settlement and Renunciation of Inheritance" dated 27.3.2023 (Renunciation Deed), the Deceased's five children {who were devised pursuant to the Will a total of 80% undivided share of the Land [80% Undivided Share (Land)]}, renounced all their rights and entitlements to the 80% Undivided Share (Land) in favour of the Appellant only. Consequently, by virtue of the Will and Renunciation Deed, the Appellant was the sole beneficiary of the Land.

On 30.5.2023, the High Court granted the following order, among others:

the Appellant was granted the right as the Administrator to transfer the Land to the Appellant [Transfer (Land)]; and

to effect the Transfer (Land), the Appellant was given the right to execute the Memorandum of Transfer (Form 14A) and all other necessary documents regarding the Land (Vesting Order).

Pursuant to the Vesting Order, the Appellant executed Form 14A (to transfer the Land to the Appellant only).

Form 14A was presented to the Collector of Stamp Duties (Collector) on 23.6.2023 for an adjudication of stamp duty under s 36(1) of the Stamp Act 1949 (SA).

On 13.7.2023, the Collector issued a notice of assessment of stamp duty on the Form 14A as follows:

a nominal stamp duty of RM10.00 was imposed on the transfer of 20% undivided share of the Land to the Appellant (Nominal Assessment); and

ad valorem stamp duty in a sum of RM20,800.00 was imposed on the transfer of 80% Undivided Share (Land) in favour of the Appellant (Ad Valorem Assessment).

The Appellant paid the Nominal Assessment and Ad Valorem Assessment. The Ad Valorem Assessment was paid by the Appellant under protest.

The Appellant filed a notice of objection to the Ad Valorem Assessment pursuant to s 38A(1) SA (Appellant's Objection).

On 2.8.2023, the Collector rejected the Appellant's Objection (Collector's Decision).

The Appellant appealed to the High Court against the Collector's Decision under s 39(1) SA [Appeal (High Court)].

For the Appeal (High Court) -

both parties had filed their written submissions; and

on 31.1.2024, during a case management (CM), the learned Judicial Commissioner (JC) dismissed the Appeal (High Court) with costs of RM6,000.00 (High Court's Decision).

According to the "Grounds of Judgment" of the learned JC, the following reasons, among others, were given for the High Court's Decision:

the High Court followed the Court of Appeal's judgment in Pemungut Duti Setem Malaysia v Perbadanan Pembangunan Pulau Pinang [2024] 6 MLJ 478 (Perbadanan Pembangunan Pulau Pinang); and

the Ad Valorem Assessment was correctly made by the Collector because -

the 80% Undivided Share (Land) was not transferred to the Appellant according to the Will;

the Renunciation Deed was not just an approval instrument that passed the 80% Undivided Share (Land) to the Appellant but was "to skip the payment of the stamp duty to be levied" under the SA;

the Renunciation Deed had "no legal effect of transferring" the Land to the Appellant;

the Form 14A had the "legal effect of transferring" the title of the Land to the Appellant. Hence, the Ad Valorem Assessment should be imposed on the Form 14A; and

the transfer of the 80% Undivided Share (Land) should be charged with the Ad Valorem Assessment according to item 66(c) [Item 66(c)] of the First Schedule （ $ 1^{st} $ Schedule）to the SA. C. Proceedings in the Court of Appeal

As the amount of the Ad Valorem Assessment was only RM20,800.00, the Appellant applied for leave of the Court of Appeal pursuant to s 68(1)(a) of the Courts of Judicature Act 1964 (CJA) to appeal against the High Court's Decision (Appellant's Leave Application).

On 31.5.2024, with regard to the Appellant's Leave Application, the Court of Appeal-

granted leave for the Appellant to appeal to the Court of Appeal against the High Court's Decision (This Appeal); and

ordered costs of the Appellant's Leave Application to follow the event of This Appeal. D. Issues

The following four questions arise in This Appeal:

should the court decide a suit or application (Suit/Application) in a CM?;

whether the Form 14A in this case attracted -

ad valorem stamp duty under -

item 32(a) of the $ 1^{\mathrm{st}} $ Schedule (sale of property) [Item 32(a)]; and/or

(ii) items 32(h) and 46 of the $ 1^{\mathrm{st}} $ Schedule (gift of property) [“Item 32(h)” and “Item 46"] read with s 16(1) SA; and/or

(iii) Item 66(c) (release or renunciation of property by way of a gift); or

a fixed amount of stamp duty of RM10.00 pursuant to item 32(i) of the $ 1^{\mathrm{st}} $ Schedule (conveyance or transfer which is not specifically charged with stamp duty) [Item 32(i)];

if This Appeal is allowed -

can the court order the Collector to refund to the Appellant the sum of RM20,800.00 (which had been paid by the Appellant to the Collector) under s 69(1) CJA?; and

whether, by reason of O 42 r 12 of the Rules of Court 2012 (RC), the court can order the Collector to pay to the Appellant interest at the rate of 5% per annum (pa) on the amount of RM20,800.00 from the date of the order of the court until full payment of the same by the Collector; and

in view of the Federal Court's judgment delivered by Raus Sharif CJ in Merck KGaA v Leno Marketing (M) Sdn Bhd (Registrar of Trade Marks, interested party) [2018] 5 MLJ 1, can the Collector file an application to the Federal Court for leave to appeal against the Court of Appeal's decision regarding This Appeal? E. Should the court give a decision of a Suit/Application in a CM?

O 34 RC has provided in detail for "Pre-Trial Case Management". The purpose of CM is to ensure a "just, expeditious and economical" disposal of a Suit/Application by giving directions to the parties - please refer to the High Court's judgment in CELCOM (M) Bhd & Anor v Tan Sri Dato' Tajudin bin Ramli & Ors and another case [2018] 10 MLJ 397, at [20]. With this purpose of CM, the High Court should not have decided the Appeal (High Court) in a CM. Furthermore, generally speaking, learned counsel (X) who handles the Suit/Application will send a learned junior (Y) to attend CMs. This is because, presumably, X would have to attend the hearing of a trial or appeal. Hence, if a court decides a Suit/Application in a CM, Y might be caught off guard, especially if the court decides against Y's client [Judgment/Order (Y's Client)] and with regard to the Judgment/Order (Y's Client), Y may have to apply orally to the court for-

a stay of execution of the Judgment/Order (Y's Client) pending the disposal of an appeal against the Judgment/Order (Y's Client) [Appeal (Y's Client)]; or

an Erinford injunction to preserve the integrity of the Appeal (Y's Client). If a court decides a Suit/Application in a CM, in the event of a Judgment/Order (Y's Client), there may be an injustice to Y's client as Y may not be prepared to apply orally for any one of the two matters stated in the above sub-paragraphs (1) or (2).

As explained in the above paragraph 20, the learned JC had committed an error of law in deciding the Appeal (High Court) in a CM （ $ 1^{\mathrm{st}} $ Legal Error). Having said that, notwithstanding the $ 1^{\mathrm{st}} $ Legal Error, both parties had filed their written submissions and there was no injustice to any party occasioned by the $ 1^{\mathrm{st}} $ Legal Error. Hence, we invoke s 72 CJA which provides as follows: "s 72. Immaterial errors No judgment or order of the High Court, or of any Judge, shall be reversed or substantially varied on appeal, nor a new trial ordered by the Court of Appeal, on account of any error, defect, or irregularity, whether in the decision or otherwise not affecting the merits or the jurisdiction of the Court." (emphasis added). In Abdul Rahman bin Soltan, at [54], the Court of Appeal had applied s 72 CJA to "cure" an error of the High Court (in making the High Court's decision which was the subject matter of the appeal) which did not affect the "merits or the jurisdiction" of the High Court. F. What amount of stamp duty should be imposed for Form 14A in this case?

We reproduce below ss 4(1), 16(1) SA, Items 32, 46 and 66 of the $ 1^{\mathrm{st}} $ Schedule: "Instruments chargeable with duty s 4(1) Subject to [SA] and subject to the exemptions contained in [SA] and in any written law for the time being in force, the several instruments specified in the First Schedule shall, from and after the commencement of [SA], be chargeable with the several duties specified in such Schedule. Voluntary conveyance inter vivos. s 16(1) Any conveyance or transfer operating as a voluntary disposition inter vivos shall be chargeable, with the like stamp duty as if it were a conveyance or transfer on sale. [1 $ ^{st} $ Schedule] Item 32. CONVEYANCE, ASSIGNMENT, TRANSFER OR ABSOLUTE BILL OF SALE:

On sale of any property (except stock, shares, marketable securities and accounts receivables or book debts of the kind mentioned in paragraph(c))For every RM100 or fractional part of RM100 of the amount of the money value of the consideration or the market value of the property, whichever is the greater-

RM1.00 on the first RM100,000;

(ii) RM2.00 on any amount in excess of RM100,000 but not exceeding RM500,000;

(iii) RM3.00 on any amount in excess of RM500,000 but not exceeding RM1,000,000;

(iv) RM4.00 on any amount in excess of RM1,000,000.(b) On sale of any stock, shares or marketable securities, to be computed on the price or value thereof on the date of transfer, whichever is the greater-for every RM1000 or fractional part of RM1000RM3.00

On the absolute sale of any accounts receivables or book debts to a bank, merchant bank, or finance company licensed under the Banking and Financial Institutions Act 1989 or under the Islamic Banking Act 1983 or a scheduled institution as defined under section 2 of the Banking and Financial Institutions Act 1989, pursuant to a factoring agreementRM10.00(d) Of any property by way of security or an security other than a marketable securitySee Charge(e) Of any property as above where the transaction is between trustees and whereDuty as in(a),(b) or(c)(i) the beneficial interest in the property passesRM10.00(ii) the beneficial interest in the property does not pass(f) Of any property, for the purpose of effectuating the appointment of a new trustee or the retirement of a trustee although no new trustee is appointedRM10.00

Of any property by way of settlementSee Settlement(h) Of any property by way of gift (whether by way of voluntary disposition or otherwise)See Gift and Section 16(1)(i) Of any kind not otherwise specially charged with dutyRM10.00 Item 46. GIFTSee Section 16(1) Item 66 RELEASE OR RENUNCIATION that is to say, any instrument whereby a person releases any property:

If on sale

If by way of securityThe same duty as a conveyance on sale The same duty as a charge or mortgage

If by way of giftThe same duty as a conveyance by way of gift(d) In any other case not otherwise specially charged with dutyRM10.00 (emphasis added).

Before the delivery of the Court of Appeal's judgment by Gunalan Muniandy JCA in Pemungut Duti Setem v Lee Koy Eng (an administrator for the estate of Tan Kok Lee @ Tan Chin Chai, deceased) (Lee Koy Eng) [2022] 2 MLJ 453, there were conflicting High Court decisions as follows:

the following two High Court judgments had only imposed a fixed sum of stamp duty of RM10.00 on the Form 14A (executed pursuant to a Renunciation Deed) under Item 32(i) $ [1^{\mathrm{st}} $ Line (High Court Decisions)]-

Ch'ng Cheng Siew (suing as administrator of estate of Wong See Yan, deceased) v Pemungut Duti Setem [2016] 7 MLJ 758; and

Lee Koy Eng (an administrator for the estate of Tan Kok Lee @ Tan Chin Chai, deceased) v Pemungut Duti Setem [2021] 7 MLJ 481; and

according to the following two High Court cases, the Collector could impose an ad valorem assessment of stamp duty on the Form 14A (executed as a result of a Renunciation Deed) under Item 32(a), Items 32(h) and 46 [both read with s 16(1) SA] and/or Item 66(c) $ [2^{nd}$ Line (High Court Decisions)]-

Hor Lim Chee v Pemungut Duti Setem, Penang High Court Originating Summons No. 24NCVC-1347- 12/2013; and

Chua Wee Hee v Pemungut Duti Setem dan 1 Lagi Muar High Court Appeal No. JB-16A-1-04/2018.

In Lee Koy Eng, at [12] to [15], [28], [38], [39] and [57] to [66], the Court of Appeal accepted the $ 1^{\mathrm{st}} $ Line (High Court Decisions) and rejected the $ 2^{\mathrm{nd}} $ Line (High Court Decisions) as follows: [12] The LHCJ [learned High Court Judge] was of the view that the true nature of the Forms 14A was solely to give effect to the renunciation (entitlements under the DA) by the deceased's two children. This decision was premised on the following reasons:

the intestate death of the deceased has attracted the application of the DA 1958. The entitlement of the deceased's two children to the estate only arises by virtue of operation of law, namely, s 6(1)(e) of the DA 1958 (Distribution Act 1958);

the deceased's two children and the respondent had entered into the deed which provided for, among others, the renunciation (entitlements under the DA 1958);

the vesting order was obtained by the co-administrators of the estate so as to give effect to the renunciation (entitlements under the DA 1958); and

the execution of Forms 14A was performed pursuant to the deed and vesting order, once again, to give effect to the renunciation (entitlements under the DA 1958). [13] The LHCJ was also of the view that the true nature of the Forms 14A in this case cannot be a gift of to the interest of the deceased's two children in the estate from the deceased's two children to the respondent. The LHCJ decided as follows:

it was clear from the Federal Court's judgment in Chor Phaik Har v Farlim Properties Sdn Bhd [1997] 3 MLJ 188 at 195-196, that a beneficiary of a deceased's estate had no right or interest in the estate until the administration of the estate was complete in the sense that the estate had been distributed in accordance with the law of distribution of the estate. Consequently, as the deceased's two children did not have any beneficial and legal interest in the estate, the deceased's two children cannot grant any gift regarding the estate to the respondent; and

by virtue of the operation of s 6(1)(e) of the DA 1958, the deceased's two children were only 'entitled' to two-thirds of the estate. An entitlement to an estate is not equivalent to a beneficial and legal right or interest in the estate which can be given absolutely as a gift. Furthermore, when the deceased's two children renounce or disclaim their entitlement to the estate by way of cl 1, the renunciation (entitlements under the DA 1958) is not a gift to the respondent. [14] The LHCJ also held that the collector had erroneously imposed ad valorem stamp duty on the Forms 14A in this case. Accordingly, pursuant to s 39(4) [SA], the High Court judge ordered the collector to refund to the respondent the excess stamp duty paid by the respondent to the collector. [15] The LHCJ also ordered the collector to pay to the respondent interest at the rate of 5%pa on the excess from the date of the oral decision of these appeals until the collector's full payment of the excess to the respondent. [28] Based on the submissions of both the parties in the appeal, the question posed for our determination is, what is the correct duty chargeable on the instrument of transfer (Form 14A) under the [SA], vis:

whether the appellant's ad valorem duty under item 66(c), $ [1^{st} $ Schedule] read together with s 16(1) and items 32(a) and 46 [SA] is correct; or

the Form 14A should be chargeable with a stamp duty of RM10 under item 32(i) $ [1^{\mathrm{st}} $ Schedule] as contended by the respondent. [38] By reference to the authorities relied upon by the LHCJ, including from leading commonwealth jurisdictions, the correct position in law was summarised by the respondent to be that:

a beneficiary of an estate cannot be forced to accept the legacy; and

if the beneficiary expressed his intention to renounce his entitlement to the deceased's estate, then, the legacy shall, for all intents and purposes, be treated as never belonging to him. [39] We accept that the above are sound propositions and correct in law. ... [57] Be that as it may, we do not, with respect, agree with the basic premise of the appellant's contention that assessments of stamp duty under item 66(c), [1st Schedule], were correct in law based on a strict interpretation of this statute. As we have emphasised earlier, the applicability of item 66(c) to the present conveyance turns essentially on the conveyance being 'by way of gift' to which the LHCJ had given primary importance in the determination of the dispute before him. [58] Our considered view on this vital point is that the LHCJ had adopted an approach that was entirely correct in the determination of the appellant's appeals before him that were centred on the applicability of item 66(c), [1st Schedule], by placing due emphasis on whether the instrument releasing the property to the respondent in this case was by way of gift by construing the true nature of the instrument. In deciding this issue, the LHCJ correctly took into account these vital matters:

Forms 14A;

effect of s 6(1)(e) of the DA;

the entire deed, in particular cl 1; and

the vesting order. [59] The LHCJ in adopting the above approach was supported by BASF Services (M) Sdn Bhd v Pemungut Duti Setem [2010] 4 MLJ 596, where Suriyadi Halim Omar JCA (as he then was) delivered the following judgment of the Federal Court: Now that this court has identified the transfer form as the instrument that is chargeable to stamp duty, the next step is to decide on whether the infrastructure fees are part of the consideration of the agreement and hence liable under item 32(a). It is generally acknowledged that the real substance of a transaction may not successfully be appreciated by mere perusal of a document, or by a hurried gauging of the machinery adapted by the parties of the transaction. Only after going through the exercise of construing the document as a whole may the real substance of that transaction be known and thenceforth ascertain the respective parties' rights and obligations, and the correctness of the respondent's adjudication (Inland Revenue Commissioners v Duke of Westminster [1936] AC 1; Pernas Securities Sdn Bhd v The Collector of Stamp Duties [1976] 1 MLJ 188). CC Gallagher Highmore's Stamp Laws (4th Ed) at p 7 authored: General Rules as to Stamp Duties. In order to determine whether any, and if any what, stamp duty is chargeable upon an instrument, the legal rule is that the real and true meaning of the instrument is to be ascertained; that the description of it given in the instrument itself by the parties is immaterial ... For instance, if a writing were headed by a recital that the parties had agreed to execute the promissory note thereinafter written, yet if in truth the contract set forth was not a promissory note, but an agreement of another character, the stamp duty would be not that of a promissory note, but of the agreement. The question therefore, stamp or no stamp, and if a stamp to what amount, is to be determined upon the real and true character and meaning of the writing. It is sufficient to refer to the case of Rex v Inhabitants of Ridgwell (1827) 6 B&C 665, to establish this proposition. (Emphasis added) [60] By applying the above authority, the LHCJ was correct in making the following observation before coming to a finding:

the name, title, label or description given to the instrument/document (label) by the party(ies) in question is not conclusive. The court is not bound by the label and may go behind the label to determine the true nature of the instrument/document;

the court has to construe the instrument/document as a whole;

in addition to the instrument/document, the court may consider all relevant documents (relevant documents) so as to ascertain the true nature of the instrument/document;

in deciding the true nature of the instrument/document, the court may consider all relevant circumstances regarding the instrument/document (relevant circumstances); and

in considering the instrument/document, relevant documents and relevant circumstances, the court determines the following matters:

what is the true nature of the rights and obligations of the party(ies)?

(ii) what is the effect of the instrument/document, relevant documents and relevant circumstances? and

(iii) what is the substance of the instrument/document? [61] We do not see any error in the LHCJ's view that the true nature of Forms 14A is solely to give effect to the renunciation (entitlements under DA) by the deceased's two children. This view is fully supported by the factual matrix of this case, in essence, because:

due to the intestate death of the deceased, the provisions of the Distribution Act ('the DA') became operative;

the deceased's two children and the respondent entered into the DFA which provided, amongst others, for the renunciation of the former's legal entitlements;

to give effect to (2) above, the co-administrators of the estate obtained a vesting order; and

the Forms 14A were executed pursuant to the DFA to give effect to the children's renunciation. [62] Likewise, the LHCJ did not err in rejecting the learned revenue counsel's reliance on two High Court orders that had dismissed appeals against the collector's assessments of stamp duties based on items 66(c) where the facts were similar to the instant case as there were no written judgments in those cases. He was clearly correct in holding that from the view point of the stare decisis doctrine, if there is no written judgment in a case, that case cannot be cited as a precedent. ... [63] On the true nature of the Forms 14A in the instant case, the LHCJ concluded that it cannot be construed as a gift by the deceased two children of their interest in the estate to the appellant because as beneficiaries they had no right or interest in the estate until the administration of the estate was complete in the sense that it had been distributed in accordance with law. This conclusion is plainly correct in law as explicit in the judgment of the FC in Chor Phaik Har. We are, with respect, unable to accede to the appellant's proposition that the principle in Chor Phaik Har was wrongly applied to the instant case on the basis that it had no relevance to the present dispute which involved the Stamp Act whereas that case concerned the National Land Code ('the NLC'), specifically s 327, where the issue for determination concerned whether the respondent was a 'person aggrieved' under s 327 to he qualified to make the application to remove the caveat entered by the respondent. We do not subscribe to the view expressed by the learned counsel for the appellant that the LHCJ had gone plainly wrong in deciding the dispute relating to the Stamp Act by invoking the FC decision in Chor Phaik Har. Based on a careful reading of the FC judgment, the conclusion reached was explicit as to the correct position in law pertaining to the point when the beneficiary under an intestacy acquires an interest or property in the personal estate of the deceased person. In gist, considering the principle that the interest or property would only arise upon administration of the estate being completed and distribution made in accordance to the law governing distribution of an intestate estate, the LHCJ had arrived at a conclusion that was correct in law that the beneficiaries when making the renunciation of their rights under the DA did not have the capacity to make a gift to the respondent. He had in our view, correctly appreciated the law that in order to make an inter vivos gift, the giver must possess the right to the property in question which the beneficiaries did not possess at that point in time. Their renunciation of entitlement made vide tha DFA, as correctly found by the LHCJ, could not be equated to an inter vivos gift to the respondent. [65] In essence, the respondent's submission is in accord with our considered view that the LHCJ had rightly held that the intestate death of the deceased has attracted the application of Distribution Act 1958 wherein the entitlement of the Tan siblings to the estate only arises by virtue of operation of law, namely s 6(1)(e) of the Distribution Act 1958. Under the said provision, the deceased's two children are merely 'entitled' to third-thirds of the estate. An entitlement to an estate must not be confused with a beneficial and legal right or interest in the estate which can be given absolutely as a gift to the respondent. [66] We are in agreement with the respondent's contention in support of the LHCJ's conclusion that the assessment of Forms 14A made by the appellant under item 66(c) [1st Schedule] is misconceived as the estate has been disclaimed by the Tan siblings which meant that the estate was never vested in them. In the circumstances, there can be no valid gift at all that may flow from the Tan siblings to the respondent. Based on the trite law principle expounded in Chor Phaik Har on the interest or property of a beneficiary in the personal estate of the deceased under an intestatacy that we have already adverted to." (emphasis added).

The Collector obtained leave of the Federal Court to appeal against the Court of Appeal's judgment in Lee Koy Eng [Collector's Appeal (Lee Koy Eng)]. On 13.9.2022, the Federal Court dismissed the Collector's Appeal (Lee Koy Eng) [Federal Court's Decision (Lee Koy Eng)]. No written judgment had been given for the Federal Court's Decision (Lee Koy Eng).

Firstly, the material facts and sole issue in Lee Koy Eng are similar to this case. As a matter of stare decisis, the learned JC is bound by the ratio decidendi of the Court of Appeal's judgment in Lee Koy Eng. In fact, even the Court of Appeal is bound by its own precedent in Lee Koy Eng - please refer to the Federal Court's judgment delivered by Peh Swee Chin FCJ in Dalip Bhagwan Singh v Public Prosecutor [1998] 1 MLJ 1, at 12 to 13. In this case, notwithstanding the fact that the Appellant's learned counsel had expressly referred to the Court of Appeal's decision in Lee Koy Eng in his written submission, the High Court did not even allude to, let alone apply, Lee Koy Eng (2 $ ^{nd} $ Legal Error).

Secondly, we take the opportunity to state that the $ 2^{\mathrm{nd}} $ Line (High Court Decisions) is now overruled by the Court of Appeal's judgment in Lee Koy Eng.

Thirdly, in arriving at the High Court's Decision, the learned JC relied on the Court of Appeal's judgment in Perbadanan Pembangunan Pulau Pinang. We will now discuss the Court of Appeal's decision in Perbadanan Pembangunan Pulau Pinang as follows:

the only issue which arose in Perbadanan Pembangunan Pulau Pinang, at [16], was as follows: [16] The only issue for the High Court's determination as stated in the case stated is as follows: whether the tawarruq facility agreement for the amount of RM100m of which the Penang State Government is giving an undertaking (referred to as guarantee by the defendant) (hereinafter referred to as 'the letter of undertaking') to the Minister of Finance to be fully responsible for the facility amount of RM100m is entitled for the remission of stamp duty under the Stamp Duty (Remission) (No 2) Order 2012 (PU(A) 258/2012).” (emphasis added); and

the Court of Appeal decided the above issue as follows, at [50] - "CONCLUSION For the aforesaid reasons, we find merits in the appeal as the LOU issued by the State Government constitutes a security for the said RM100m loan. We are of the considered opinion that the learned judge has erred in law when she concluded that a 'security' is limited to instruments which form an encumbrance on property which the lender can rely on for the purpose of securing the repayment of a debt. The learned judge failed to appreciate that the word 'security' in the Remission Order has a wider meaning where it also includes the undertaking and guarantee provided by a third party. Therefore, since the loan instrument is secured by the Penang State Government's LOU, it does not fall within the Remission Order. The appeal is allowed with costs and the decision of the learned High Court judge is set aside." (emphasis added). In this case, the High Court had erred in law by applying the Court of Appeal's judgment in Perbadanan Pembangunan Pulau Pinang (3 $ ^{rd} $ Legal Error) because -

the material facts and issue in Perbadanan Pembangunan Pulau Pinang were clearly different from this case; and

the respondents in Perbadanan Pembangunan Pulau Pinang had obtained leave of the Federal Court to appeal against the Court of Appeal's decision in Perbadanan Pembangunan Pulau Pinang [Respondents' Appeal (Perbadanan Pembangunan Pulau Pinang)]. On 17.9.2024, the Federal Court had allowed the Respondents' Appeal (Perbadanan Pembangunan Pulau Pinang) with costs of RM50,000 [Federal Court's Decision (Perbadanan Pembangunan Pulau Pinang)]. There is no written judgment for the Federal Court's Decision (Perbadanan Pembangunan Pulau Pinang).

In view of -

the binding effect of the ratio decidendi in the Court of Appeal's judgment in Lee Koy Eng; and

the $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Legal Errors - we have no hesitation to allow This Appeal with costs. G. Can we order a refund of stamp duty by the Collector in favour of the Appellant?

Section 69(1) CJA provides as follows: "s 69(1) Appeals to the Court of Appeal shall be by way of re-hearing, and in relation to such appeals the Court of Appeal shall have all the powers and duties, as to amendment or otherwise, of the High Court, together with full discretionary power to receive further evidence by oral examination in court, by affidavit, or by deposition taken before an examiner or commissioner." (emphasis added).

As explained in the above Part F, the Collector had wrongfully imposed the Ad Valorem Assessment on the Form 14A in this case. Consequently, it is only in the interest of justice for us to order pursuant to s 69(1) CJA for the Collector to refund the amount of RM20,800.00 (which had been previously paid by the Appellant to the Collector). In fact, a similar refund was ordered by the High Court in Lee Koy Eng (which was subsequently affirmed by the Court of Appeal). H. Whether the court could impose interest on the sum to be refunded by the Collector to the Appellant

We reproduce below s 11 of the Civil Law Act 1956 (CLA) and O 42 r 12 RC: "s 11 Power of Courts to award interest on debts and damages In any proceedings tried in any Court for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest as such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment: Provided that nothing in this section-

shall authorize the giving of interest upon interest;

shall apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise; or

shall affect the damages recoverable for the dishonour of a bill of exchange. O 42 r 12 RC Interest on judgment debts Subject to rule 12A, except when it has been otherwise agreed between the parties, every judgment debt shall carry interest at such rate as the Chief Justice may from time to time determine or at such other rate not exceeding the rate aforesaid as the Court determines, such interest to be calculated from the date of judgment until the judgment is satisfied." (emphasis added).

In this case, in prayer (d) of the Appeal (High Court), the Appellant only applied against the Collector for interest on the sum of RM20,800.00 from the date of the High Court's order until full payment of the same.

It is clear from s 11 CLA that the Appellant could have applied to the court for "pre-judgment interest" from the date of the Appellant's payment of RM20,800.00 to the Collector until the date of full payment of the same. O 42 r 12 RC entitled the Appellant to claim interest from the date of the order of the court until full refund of RM20,800.00 by the Collector. In this regard, we rely on the following judgment of the Court of Appeal in Lee Koy Eng, at [68] to [71]: [68] Proceeding now to the ground of appeal on the order imposing interest on the excess payment ordered to be refunded to the respondent, the appellant contended that it was an erroneous decision. [69] We hold that the LHCJ [learned High Court Judge] had correctly referred to the law applicable to this issue, ie. s 11 [CLA] and O 42 r 12 [RC] which we reproduce below: [70] It is plain to us that the court that decides to allow any claim for the recovery of a debt which was the case here for the recovery of excess payment to the appellant held to be not in accordance with law, had a wide discretionary power to award interest where appropriate. The rate of 5% pa awarded by the LHCJ was in compliance with O 42 r 12 of the RC as it did not exceed the rate presently determined by the Chief Justice. [71] We do not see any error in principle in the LHCJ's decision that warrants our interference as follows: As a consequence of the Refund Order, the Excess is a -

'debt' due from the Collector to the appellant within the meaning of s 11 CLA; and

a 'judgment debt' as understood in O 42 r 12 RC." (emphasis added). I. Can the Collector appeal to the Federal Court against the Court of Appeal's decision under the SA?

Section 39(1) SA states as follows: "s 39. Appeal to High Court

Any person who is dissatisfied with the decision of the Collector under subsection 38A(5) may, within twenty-one days after the person is notified in writing of that decision and upon payment of duty in conformity therewith, appeal against the decision to the High Court by filing a notice of appeal with the High Court and may for that purpose require the Collector to state and sign a case, setting forth the question upon which is opinion was required, and the decision made by him." (emphasis added).

According to s 67(1) CJA- "s 67. Jurisdiction to hear and determine civil appeals

The Court of Appeal shall have jurisdiction to hear and determine appeals from any judgment or order of any High Court in any civil cause or matter, whether made in the exercise of its original or of its appellate jurisdiction, subject nevertheless to this or any other written law regulating the terms and conditions upon which such appeals shall be brought." (emphasis added).

It is not disputed that by reason of s 39(1) SA, any person who is dissatisfied with a decision of the Collector (regarding an objection against the Collector's assessment or additional assessment of stamp duty), may appeal to the High Court $ (1^{\mathrm{st}} $ Right of Appeal). After the High Court has decided the $ 1^{\mathrm{st}} $ Right of Appeal [High Court's Decision $ (1^{\mathrm{st}} $ Right of Appeal)] any party who is dissatisfied with the High Court's Decision $ (1^{\mathrm{st}} $ Right of Appeal) may appeal to the Court of Appeal pursuant to s 67(1) CJA $ (2^{\mathrm{nd}} $ Right of Appeal).

When the Court of Appeal has adjudicated on the $ 2^{n d} $ Right of Appeal [Court of Appeal's Decision ( $ 2^{n d} $ Right of Appeal)], we are of the view that there cannot be any resort to the Federal Court with regard to the Court of Appeal's Decision ( $ 2^{n d} $ Right of Appeal). This is because there are only two rights of appeal in Malaysia [2 Rights (Appeal)]. In this regard, we rely on the following judgment of the Federal Court in Merck, at [95] to [97]: "CONCLUSION [95] Our answer to question 1 is as follows. Based on our analysis of the nature of the High Court's jurisdiction under s 28 of the TMA [Trade Marks Act 1976], supported by a plain and natural reading of the statutory language, we find that the High Court was exercising its appellate jurisdiction in hearing an appeal from the decision of the registrar under s 28 of the TMA. [96] Since the matter was not decided by the High Court in the exercise of its original jurisdiction, the present appeal does not meet the statutory condition for an appeal to this court under s 96(a) [CJA]. The matter ends at the Court of Appeal and no further appeal lies to this court. [97] This is sufficient to dispose of the appeal, and there is no necessity to answer questions 2, 3 and 4. The appeal is dismissed with costs." (emphasis added).

There were appeals to the Federal Court in, among others, Lee Koy Eng and Perbadanan Pembangunan Pulau Pinang. However, in such cases where the 2 Rights (Appeal) had been exhausted, the issue of the competency of the appeals to the Federal Court (premised on the Federal Court's decision in Merck) was not brought up, let alone discussed.

Premised on the above reasons, This Appeal is allowed with the following order:

the High Court's Decision is set aside;

the following declarations are granted -

a declaration that the Collector's Ad Valorem Assessment on the Form 14A in a sum of RM20,800.00 pursuant to Item 32(a), was invalid; and

a declaration that the Form 14A shall only be imposed a fixed amount of stamp duty of RM10.00 pursuant to Item 32(i);

the Collector is ordered to refund a sum of RM20,800.00 to the Appellant;

interest at the rate of 5% pa on the amount of RM20,800.00, shall be paid by the Collector to the Appellant from the date of this order of the Court of Appeal until full payment of the same; and

costs of RM10,000.00 shall be paid by the Collector to the Appellant for the following proceedings-

Appeal (High Court);

Appellant's Leave Application; and

This Appeal.

I had previously forwarded a draft copy of this judgment (Draft) to Azimah bt. Omar FCJ and Ismail bin Brahim JCA. Both my learned sister and brother had concurred with the Draft. DATE:27 FEBRUARY 2026 WONG KIAN KHEONG Judge Court of Appeal Counsel for Mr. Lum Man Chan, Mr. Desmond Liew Zhi Hong & the Appellant: Mr. Chew Jin Heng (Messrs Halim Hong & Quek) Counsel Encik Mohammad Hafidz bin Ahmad for the (Senior Revenue Counsel) & Respondent: Encik Muhammad Danial Izzat bin Zulbahari (Revenue Counsel) (Inland Revenue Board of Malaysia)