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1 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: W-02(NCVC)(A)-924-05/2016 ANTARA TOH PUAN D. HERYATI BINTI ABDUL RAHIM (No. K/P: 610916-71-5144) … PERAYU DAN LAU BAN TIN (No. K/P: 561206-10-5001) …RESPONDEN PERTAMA MARY LEE SIEW CHENG (NO. K/P: 560702-07-5636) …RESPONDEN KEDUA [Dalam Perkara Writ Saman No: 22NCVC-324-06/2015 (Dahulunya Saman Pemula No: 24NCVC-207-02/2015 Dalam Mahkamah Tinggi Malaya di Kuala Lumpur Antara Toh Puan D. Heryati binti Abdul Rahim …Plaintif (No. K/P: 610916-71-5144) Dan Lau Ban Tin … Defendan Pertama (No. K/P: 561206-10-5001) Mary Lee Siew Cheng (No. K/P: 560702-07-5636) …Defendan Kedua 2 (An appeal against the decision of Hue Siew Kheng J, High Court of Malaya at Kuala Lumpur made on 26.04.2016) CORAM ROHANA YUSUF, JCA VERNON ONG LAM KIAT, JCA HASNAH DATO’ MOHAMMED HASHIM, JCA JUDGMENT OF THE COURT [1] The Appellant initially filed an application by way of an Originating Summons (OS) at the Kuala Lumpur High Court seeking for an order for the Respondents to transfer a piece of land belonging to a company Zamrudvest Sdn Bhd to her. Alternative to that the Appellant sought for compensation in the sum of RM1 million, together with loss and damages. The High Court directed that the OS be converted into a writ action. The trial proceeded on the writ action, where the claim of the Appellant was dismissed, resulting in the appeal before us. [2] By way of background, the Appellant was the wife of the late Tun Abdul Ghafar Bin Baba and together with him, were the only two shareholders of a company known as Zamrudest Sdn Bhd (the Company). The Company was a holder of an EON Franchise. The shareholding was 99,994 by Tun Ghafar and the balance 6 shares, was 3 owned by the Appellant. The Company had applied for alienation of a parcel of land situated at Jelebu, Negeri Sembilan (the Land). It is stipulated in section 1.02 of the Share Sale and Purchase Agreement dated 20.06.2000 (SSA) that the Company “owns a parcel of land in Jelebu measuring in area approximately 20 acres…”. [3] In the year 2000, Tun Ghafar Baba and the Appellant decided to sell their shares in the Company to the Respondents for RM300,000.00 vide the SSA. The Respondents, Lau Ban Tin and Mary Lee Siew Cheng are husband and wife. At that time, as disclosed in evidence the relevant Land Office had not issued a separate title to the Land. [4] It was the Appellant’s case that, the SSA does not include the Land. To specifically exclude the Land from the SSA, the Appellant testified that a specific covenant was inserted under section 2.05 which says: In consideration of the Vendor agreeing to sell the Sale Shares to the Purchaser and in consideration of the purchase consideration payable by D. Heryati Binti Abdul Rahim of the sum of Ringgit Malaysia One ( RM1.00) only the Purchaser hereby agrees to cause the Company to transfer the said Property to D.Heryati Abdul Rahim absolutely. 4 According to the Appellant, section 2.05 is to be read as an undertaking made by the Respondents subject to the issuance of the title of the Land by the Land Office. [5] The First Respondent testified that sometime towards the end of 2002, Tun Ghaffar had some personal problems with the Appellant and changed his mind about transferring the Land to the Appellant. Instead, Tun Ghaffar agreed for the Land to be transferred to the First Respondent to settle some of the personal loan given by the First Respondent to him. The Appellant and Tun Ghaffar were divorced on 12.03.2003. Tun Ghaffar had passed away on 23.04.2006. Meanwhile, the Land title was subsequently issued to the Company on 09.03.2003 with a 99 year Leasehold title ending 24.02.2097. [6] The Appellant wrote to the Respondents on 15.12.2003 requesting the Respondents to transfer the Land to the Appellant as soon as the Land Office issued the Land title to the Company. About two years later, on 08.12.2005 the Appellant caused a private search on the Land which revealed that the Land had already been transferred from the Company to the First Respondent on 19.02.2004. 5 [7] The Appellant caused a legal notice to be issued to the Respondents on 12.01.2006 and again on 29.09.2014. The Respondents’ Solicitors replied on 08.10.2014 claiming ignorance of the SSA as more than 14 years had already passed from the time the SSA was executed. [8] The Appellant then proceeded with an application by way of the OS filed on 06.02.2015 at the High Court of Kuala Lumpur. The OS was converted into a writ action by the order of the Court. From the Appellant’s pleadings, the Appellant’s prayer is for an order for the Respondents to register the Land in the name of the Appellant. Alternative to that prayer, the Appellant sought for damages. The claim by the Appellant is made in pursuant to a breach of an obligation undertaken by the Respondents under section 2.05 of the SSA. Initially the Respondents filed an application under Order 14A to determine on the issue of limitation. The application was later withdrawn. The case proceeded to a full trial where only the Appellant and the First Respondent testified. No other witnesses were brought to the Court. 6 Decision of the High Court [9] At the end of the trial the Appellant’s claim was dismissed. The learned High Court Judge found the Appellant’s action against the Respondents was premised on breach of the SSA, and not an action for recovery of land as envisaged by section 9 of the Limitation Act 1953. Following that finding, the learned Judge ruled that the action of the Appellant was barred by limitation under section 6 of the Limitation Act. And the claim was then dismissed solely on the ground of limitation. The Appeal [10] In the grounds of appeal learned counsel raised issues and submitted that the trial Judge had erred in holding that the claim of the Appellant was contractual in nature. The Appellant maintained that the claim was for recovery of the Land. This submission was anchoured on the contention that section 2.05 of the SSA was contingent upon the title of the Land being issued to the Company, which had caused its performance impossible upon the transfer of the Land to the First Respondent by the Company. This, learned counsel submitted, had rendered the contract void by virtue of section 33(b) of the Contracts Act 1950. 7 [11] The submission advanced by learned counsel can be succinctly summarised in this way. According to learned counsel section 2.05 of the SSA is a contingent contract and became void by virtue of section 33, upon the transfer of the Land to the First Respondent by the Company. It was contended that the transfer had made it impossible for the Respondents to perform the undertaking stated in section 2.05 which thereby rendered the contract void. [12] In furtherance to that proposition learned counsel relied on the decision of the Federal Court in Khatijah Binti Abdullah & Ors v Mohd Isa Bin Biran [2017] 2 MLJ 1 to contend that a void contract does not generate enforceable right or duty, hence no limitation can be invoked because limitation does not apply to a void contract and a fortiori the claim of the Appellant is for recovery of land. Hence the limitation applicable would be section 9 and not section 6 of the Limitation Act, relying on the line of authorities in Ponnusamy & Anor v Nathu Ram [1958] 1 MLRH 56, Nasri v Mesah [1970] 1 MLRA 363, and Economic Development (Low Cost Houses) Sdn Bhd v Majlis Perbandaran Seberang Perai [2013] 5 MLRA 611. 8 [13] We have some difficulties appreciating the line of argument put forth by the learned counsel for the Appellant. We find this proposition less illuminating and rather preposterous. Firstly, the pleaded case of the Appellant was premised on the SSA. The source of the right of claim by the Appellant over the Land emanates from the SSA by virtue of section 2.05. It is the mainstay of the Appellant’s claim over the Land. By asserting that section 2.05 is a contingent provision and thereafter becomes void under section 33 of the Contracts Act, not only limitation does not apply, there will also be no right or interest that has accrued to the Appellant over the Land, hence no right of claim by the Appellant either contractually or for its recovery. The case of Khatijah Abdullah itself states that a void contract does not generate enforceable right or duty hence no limitation can be invoked. It is amply clear that the reason why limitation does not apply as held by the Federal Court in that case was because there was no enforceable right anymore after the sale and purchase agreement in that case became void on the failure to obtain the consent of the State Authority. If we accept this submission then the claim of the Appellant should not have been entertained in the first place. We however do not find any response from the counsel for the Respondents on this line of submission by the Appellant’s counsel. 9 [14] Secondly, we were further amazed at the submission of learned Appellant’s counsel that just because section 2.05 becomes void under section 33 of the Contracts Act, the claim automatically becomes a claim for recovery of land. In his written submission at paragraph 18, and after submitting that section 2.05 is void, he said “That being the case, it is submitted that the Appellant’s claim as against the Respondents can only and must be a claim for the recovery of land which falls squarely within s.9(1) of the Limitation Act, 1953.” We are not able to find any legal basis for this submission, that when a claim is made under a contract which becomes void it automatically transforms into a claim for recovery of land. Under the law the way we understand it, if the claim is made under a contract that becomes void, then there is no more claim that has ensued. [15] We were rather perturbed initially, as to how section 2.05 was read to include a contingent or a condition that it is dependent upon the issuing of title. On the face of it, there appears to be no contingent or condition stated in that clause. It is a plain obligation imposed on the Respondents to cause the Land to be transferred to the Appellant at a payment consideration of RM1.00 and nothing more. 10 [16] However as it turns out in evidence, the Land Office had not issued the title to the Land at the point the SSA was entered into. Despite its plain language, and that the undertaking by the Respondents to cause the transfer, is upon payment of consideration it would appear that both parties have agreed for such condition to be read into section 2.05. We hasten to add that such interpretation in adding and reading a condition into a written contract may offend the rule of interpretation as well as section 92 of the Evidence Act 1950. Be that as it may, though this issue did come to our mind, we however refrained ourselves since it was not raised by either of the parties. [17] The cases cited and relied upon by the Appellants on contingent contracts that had become impossible to be performed, are mostly related to restriction on the title for transfer of land. This condition is endorsed on the land title, restricting transfer without the approval or consent of the State Authority. The sale of such land will be contingent upon obtaining the requisite consent which normally forms the condition precedent to the sale. This condition precedent is uncertain, because it is something that requires the decision of the State Authority. And such uncertainty renders this kind of contract a contingent contract. 11 [18] The case of Khatijah Binti Abdullah (supra) is a case where the subject land for sale was subject to the approval of the State Authority. The vendors and the purchaser in that case entered into an agreement for sale. Amongst the condition agreed was that in the event the State Authority’s approval cannot be obtained then the vendor would have to refund the deposit paid and the agreement is deemed terminated. The joint vendors after receiving a deposit of RM70,000.00, executed a power of attorney (POA) to the purchaser to deal with the land. One of the vendors passed away and the beneficiaries proceeded to claim for the balance purchase price. At the trial court it was found by the learned Judge that the sale was contingent upon consent being obtained from the State Authority. The obligation to obtain the requisite consent was found by the Court to be on the purchaser who had been empowered under the POA. On that failure to apply for consent and the non payment of the balance purchase price, the vendors were entitled to rescind the agreement. The Court then allowed the vendors’ claim amongst which for a declaration that the agreement was no longer enforceable. [19] It was contended by the purchaser in that case that as the cause of action was based on breach of agreement, limitation under section 6 had set in causing the claim of the vendors barred by limitation. The 12 Court of Appeal accepted that proposition and allowed the appeal. The Federal Court on the point of limitation, had overruled the Court of Appeal on the application of section 6 of the Limitation Act. The Federal Court found the obligation to apply for consent rested on the vendors by virtue of the POA. The vendors did not apply for consent and hence the agreement becomes void by virtue of section 33 of the Contracts Act 1950. [20] In the appeal before us, a plain reading of the SSA reveals that to all intent and purposes the Company was already the owner of the Land at the point the SSA was executed as clearly spelled out in section 1.02 which says “The Company ....owns a parcel of Land...”. There is nothing uncertain about the issuance of title, if that is so. From the Appellant’s testimony the premium had been paid for the Land and the only outstanding is for the issuance of its title. It is therefore an arguable point if the condition for the undertaking by the Respondents to cause the transfer under section 2.05 upon the issuance of title, is something uncertain as contemplated by section 33 (a) of the Contracts Act, to characterise it contingent contract as decided by the Federal Court in Khatijah Abdullah & Ors. 13 [21] Under Section 2.05 of the SSA the First Respondent as a new share holder in the Company had given an undertaking to cause the Company to transfer the Land to the Appellant. The Respondents had not fulfilled this undertaking. Though we remained rather clueless as to how this undertaking will be fulfilled by the Respondents, bearing in mind that the Respondents and the Company are two separate entities. The Land had already been transferred by the Company to the First Respondent on 19.02.2004. Thereafter, by the First Respondent to Tengku Mohd Kamil and Tengku Ramli on 10.04.2012 as evidenced on the Title at page 294 of the Appeal Records. At the time the Appellant filed her claim on 06.02.2015 against the Respondents, the Land was therefore registered in the name of Tengku Mohd Kamil and another. [22] The Appellant said she was aware of the transfer to the First Respondent when she caused a search on the title on 08.12.2005. The Appellant caused issuance of legal notice to the First Respondent on 12.06.2006. [23] Against these factual background and circumstances, the Appellant maintained that her claim was for recovery of Land and not for breach of contract and hence it was not caught by limitation under 14 section 6. The claim for recovery of land can only be barred by limitation of 12 years under section 9 and such, the claim of the Appellant is still within allowable time. The Appellant relied on the decided authorities in Ponnusamy v Nathu Ram [1958] 1 MLRH 56, Nasri v Mesah [1970] 1 MLRA 363 and Economic Development (Low Cost Houses) Sdn Bhd v Majlis Perbandaran Seberang Perai [2013] 5 MLRA 611 to contend that a suit for recovery of land need not be made by the plaintiff who was the original owner; claim for recovery of land does not require that the plaintiff must have been the originally owner; and that it can be a claim based on contract or otherwise. In all of these instances the limitation period is under section 9(1) of the Limitation Act 1953. [24] We have scrutinised the authorities cited by the Appellant on what tantamount to a claim for recovery of land as envisaged under section 9 of the Limitation Act. We would begin with the case of Ponnusamy v Nathu Ram (supra). The registered owner defendant in this case had sold the subject land to one Naina on 24.08.1944 at RM10,000.00. After full payment the defendant executed a memorandum of transfer and delivered it to the plaintiff. The transfer was however not registered immediately. This was the period of Japanese occupation. At the end of the war the transfer was not capable of being presented for registration 15 due to some legislation. Naina died on 11.02.1949. There was delay in obtaining probate of his will and the suit was only commenced on 23.11.1956. The claim of the plaintiffs (the executors of the estate of Naina) was for a declaration that the executors were entitled to the subject land and for further consequential orders under the Land Code to cause a proper registration of that land. A defence of limitation was raised by the defendants. It was held by the court that the action by the plaintiffs in this case was for land recovery, and section 9 of Limitation Act applied. [25] In Nasri v Mesah, the plaintiff paid the agreed purchase price and the defendant handed over the land title to the plaintiff. No transfer could take place because of the moratorium in force. The defendant undertook to execute a valid transfer in favour of the plaintiff once the moratorium is lifted. The plaintiff occupied the land, built a house and lived on the land, and stayed on it with his family. He also cleared the secondary jungle on part of the land and cultivated the land with coconut trees. After the expiration of the moratorium on 30.09.1949 the plaintiff approached the defendant to effect the transfer but failed. He then filed an action where a defence on limitation was raised. The Court held that 16 the claim of the plaintiff was for recovery of land and hence limitation of 12 years applied. [26] The Court of Appeal in Economic Development (Low Cost Houses) Sdn Bhd v Majlis Perbandaran Seberang Perai [2013] 5 MLRA 611 found the action of the plaintiff in that case was for recovery of land and hence limitation under section 9(1) of the Limitation Act applied. The plaintiff in this case is a planning authority. The defendant applied and submitted to the plaintiff some layout plan for planning permission to develop the land. The plaintiff approved the plan and imposed a condition inter alia requiring the defendant to surrender some plots for a nominal consideration of RM1.00. The condition was accepted and agreed, with documents prepared to transfer the plots to the plaintiff. However, due to some errors on the form, the transfer failed. The plaintiff issued demand which was not adhered to by the defendant. This led to a claim made at the High Court by the plaintiff seeking for specific performance to compel the transfer. The High Court allowed the claim despite the defence of limitation that was raised that it was a claim based on contract and barred by limitation of 6 years. The Court of Appeal held that the claim of the plaintiff was for recovery of land and hence limitation of 12 years applied and not 6 years. 17 [27] Relying on the above decisions learned counsel sought to contend that any action to obtain land is a claim for recovery of land and hence would only be barred by limitation under section 9 and not section 6. We disagree. In our observation the claim made by the Appellant in this case cannot be a claim for recovery of land. We say so for the following reasons. [28] As the facts revealed, at the time the OS was filed by the Appellant on 06.02.2015 the Land was no longer in the name of the First or the Second Respondents. This fact is also known to the Appellant as the search result obtained revealed who the registered owner was. That notwithstanding, the Appellant chose to stake her claim against the First and the Second Respondents for a breach of undertaking made in section 2.05. Whereas, a claim for recovery of land may only be made against the party in whose possession the land is or owned as demonstrated by the decided cases which we have alluded to in Ponnusamy v Nathu Ram, Nasri v Mesah as well as Economic Development (Low Cost Houses) Sdn Bhd v Majlis Perbandaran Seberang Perai. The prayer sought against the Respondents for an order that the Land be transferred to the Appellant cannot be granted in any event, without citing the registered owner as a party. That being the 18 position we find it difficult to accept the argument of the Appellant that her claim was for recovery of the Land. If the claim is to recover the Land the right party has to be cited. From the way the claim is taken it is clear that it cannot be for recovery of the land. [29] The relationship between the Appellant with the Respondents at best is a contractual undertaking. The undertaking made by the Respondents under the SSA is to cause the Land to be transferred to the Appellant pursuant to section 2.05. It is an undertaking made by a person who was not the land owner to cause the land owner to do the transfer. Against this backdrop, there is no obligation per se imposed on the Respondents to transfer the Land to the Appellant under the SSA. In fact no such obligation may be imposed since the Company which was the owner of the Land is distinct and separate from the Respondents. [30] In all the above circumstances we do not agree with the Appellant that her claim against the Respondents was for recovery of the Land. We find all the cases cited before us differ from the facts of the present appeal. In all those cases the claim made by the claimants are all again land owners who had contracted to transfer the land either by way of Sale and Purchase Agreement as in the case of Economic 19 Development (Low Cost Houses) which too involved an agreement to transfer that land in question. It is not so in the appeal before us. There was no promise to transfer the land by the Respondents made herein. Furthermore in Ponnusamy v Nathu Ram as well as Nasri v Mesah, the plaintiffs were all in possession of the land, or the physical title of it. What was left to be done was the registration of the transfer. The defendants in all these cases were under obligations to transfer the land to the Plaintiff. That was the reason why the claims in these cases were construed as claims for recovery of land. [31] Whereas, in the present case the obligation of the Respondents under the SSA was purely to cause the transfer of the Land which in the first place did not belong to them. Their obligations was not to transfer the Land to the Appellant but only to undertake or to cause the transfer which is a totally different obligation found all in the decided cases on recovery of land which we have earlier alluded to earlier. The prayer by the Appellant for the Respondents to transfer the Land would have been unsustainable in any event. [32] For all the above reasons we find ourselves in agreement with the learned trial Judge that the claim of the Appellant is purely a claim for a 20 breach of agreement and not for recovery of land. We remain convinced that this is not a case for recovery of land as decided by the authorities cited before us. For that reason the claim of the Appellant is barred by limitation under section 6 of the Limitation Act. We therefore dismissed the appeal with costs. [33] Both my learned brother Vernon Ong Lam Kiat, JCA and my learned sister Hasnah Dato’ Mohammad Hashim, JCA have read this judgment in draft and they both have expressed their agreement to the reasons and the conclusion arrived in this judgment. Signed by: ROHANA YUSUF Judge Court of Appeal Malaysia Dated: 23 January 2018 Counsel for the Appellant: P. Rejendran (Kevin Mahendran and L. Nagarajan with him) The Chambers of P. Rajendran No. 46, Jalan KE4/8 Kota Emerald East, 48000 Rawang Selangor Darul Ehsan Counsel for the Respondent: Low Peck Lin Messrs K C Yap & Partners 2nd Floor, Wisma Naga Mas No. 99, Jalan Kapar 41400 Klang Selangor Darul Ehsan. 21