Udps Properties Sdn Bhd v Dpmm Sentral Land Sdn Bhd (WA-24NCvC-3212-07/2023)

The plaintiff on 28-07-2023 filed an Originating Summon to seek a declaration that a private auction conducted by the 1st defendant on 03- 08-2022 in respect of a piece of Malay Reserved Land held under Title No. HS(M) 4516, Lot 36271, Mukim Dengkil, Daerah Sepang, Selangor (“Land”) is invalid and void.

The plaintiff contends the Land which was sold for RM 2,551,500.00 was not sold at market value in accordance to the terms of a consent judgment. The consent judgment can be seen in the Supporting Affidavit Enclosure 2 Exhibit A. The plaintiff did not adduce any valuation report to support its contention.

The evidence shows that after nine (9) unsuccessful auctions since 2019, the 1st defendant finally managed to sell the Land at the tenth (10th) auction on 03-08-2022 at a price of RM 2,551,500.00 to a successful bidder who is the 2nd defendant, Setia RZ Development Sdn. Bhd. [See Proclamation of Sale in Supporting Affidavit Exhibit “B”, Enclosure 2].

I have dismissed the Originating Summon on 26-03-2024 with costs of RM 5,000 each to the two defendants.

The plaintiff has appealed to the Court of Appeal on 08-04-2024. These are my Grounds of Judgment. S/N jh0usnCJtEiANyYoriSfKw **Note : Serial number will be used to verify the originality of this document via eFILING portal 3

The facts of this case are simple and basically undisputed.

On 02-03-2018, the 1st defendant commenced a civil suit against the Plaintiff vide Civil Suit No. WA-22NCVC-117-03/2018 for failure and/or refusal of the plaintiff to return the purchase price amounting to RM 2,603,741.60 to the 1st defendant in respect of an aborted Sale and Purchase transaction entered into between the 1st defendant and the plaintiff. [“Civil Suit 117”]

A consent judgment was recorded on 21-11-2018 (“Consent Judgment”) before the Honourable Yang Arif Mohd Zaki bin Abdul Wahab. [See Supporting Affidavit Enclosure 2 Exhibit A].

Pursuant to the terms of the Consent Judgment, the plaintiff agreed to pay a sum of RM 1,000,000.00 to the 1st defendant by 20-05-2019, and a further sum of RM 1,000,000.00 by 20-08-2019.

The terms of the Consent Judgment also specified that in the event the plaintiff fails to pay the 1st RM 1,000,000.00 to the 1st defendant by 20- 05-2019, the plaintiff authorised the 1st defendant to sell the Land for and on its behalf through a private treaty, private auction and/or public auction. S/N jh0usnCJtEiANyYoriSfKw **Note : Serial number will be used to verify the originality of this document via eFILING portal 4

The Consent Judgment further specified at paragraph 3.1 that the Land is to be sold based on its market value as of the date of the transaction.

The plaintiff had failed to pay the 1st defendant the sum of RM 1,000,000.00 on 20-05-2019 as agreed.

Thereafter, the 1st defendant applied to Court in Civil Suit 117 and obtained a Court Order on 11-07-2019 setting out the steps to be taken by the plaintiff if the said Land was successfully sold and/or disposed by the 1st defendant in accordance to paragraph 2 of the Consent Judgment. [See 1st defendant’s Reply Affidavit Exhibit “ZJ-1”, Enclosure 5]

Pursuant to paragraph 2 of the Consent Judgment, the 1st defendant appointed a licensed auctioneer, Property Auction House Sdn Bhd to conduct an auction of the Land.

A total of 10 auctions were conducted. The 10 Proclamations of Sale can be seen and are referred to at para 9b of the 1st defendant’s Reply Affidavit Enclosure 5 Exhibit “ZJ-2”. They show the following – No. Date of Auction Reserve Price (RM)

21-06-2019 5,000,000.00 2. 18-07-2019 4,500,000.00 3. 16-08-2019 4,050,000.00 4. 04-10-2019 3,645,000.00 S/N jh0usnCJtEiANyYoriSfKw

15-11-2019 3,500,000.00 6. 28-02-2020 3,150,000.00 7. 10-07-2020 2,835,000.00 8. 30-05-2022 2,835,000.00 9. 14-06-2022 2,551,500.00 10. 03-08-2022 2,551,500.00 [16] As stated earlier, after nine (9) unsuccessful auctions since 2019, the 1st defendant finally managed to sell the Land at the tenth (10th) auction on 03-08-2022 at a price of RM 2,551,500.00 to a successful bidder who is the 2nd defendant, Setia RZ Development Sdn. Bhd. [17] The plaintiff contends the Land which was sold for RM 2,551,500.00 was not sold at market value in accordance to the terms of the Consent Judgment. The plaintiff did not adduce any valuation report to support its contention. Issue before the court [18] As I see it, the issue before me is what is the test to determine whether the Land when sold in a private auction was sold based on its market value as of the date of the transaction. What is the market value of a piece of land? [19] The market value of a piece of land is not what a valuer thinks or says it should be. That is merely a subjective opinion of the valuer. In my more than 30 years of practice at the Malaysian Bar, I have come across many occasions where two valuers have come to different S/N jh0usnCJtEiANyYoriSfKw valuations in respect of the same piece of land. In my view, the true market value is the actual price that the property fetched on the open market. If there is an auction the market value of that piece of land would be the price paid by the successful bidder. [See Malayan Banking Berhad v Lim Poh Ho & Anor [1997] 1 MLRA 72; [1997] 1 MLJ 662; [1997] 2 CLJ 516; [1997] 2 AMR 1597, CA and Utama Kumara Naidu Sundara Rajoo & Anor v HSBC Bank Malaysia Berhad & Ors [2023] MLRHU 212 per Liza Chan Sow Keng J]. [20] Just as "Beauty is in the eye of the beholder ", what is market value for a piece of land, at a particular point in time, is what a bidder is willing to pay at an auction in competition with other bidders. [21] To illustrate by using an analogy from the world of art auction, the painting Salvator Mundi by Leonardo da Vinci was last transacted at US 127.5 million in 2013. To the joy of its seller, it was bidded up till it was sold for US 450.3 million when it was put up for sale in an auction in 2017. [22] In Utama Kumara Naidu Sundara Rajoo & Anor v HSBC Bank Malaysia Berhad & Ors [2023] MLRHU 212 Liza Chan Sow Keng J said – [46] Before determining whether this duty of care was breached, it has to be firstly determined whether the Property was in fact sold at an undervalue. S/N jh0usnCJtEiANyYoriSfKw [47] In Malayan Banking Berhad v. Lim Poh Ho & Anor [1997] 1 MLRA 72; [1997] 1 MLJ 662; [1997] 2 CLJ 516; [1997] 2 AMR 1597, the CA held: "(2) The bank had a narrow duty to take reasonable precautions to obtain the true value of the property at the time of sale, and was required to act in good faith, but unless there was evidence of deliberate or wilful misconduct on the part of the bank, the 'duty to take reasonable precautions' would not be extended to cover every possible step an altruistic financier could have taken regardless of time, cost or effort (see p 672H); Asia Commercial Finance (M) Bhd & Anor v. Development & Realtor Sdn Bhd [1992] 1 MLRH 441; [1992] 2 MLJ 504; [1992] 2 CLJ 109, Cuckmere Brick Co Ltd v. Mutual Finance Ltd [1971] 1 Ch 949, Brutan Investments Pty Ltd v. Underwriting and Insurance & Anor [1981-1982] 39 ACTR 47 and Downview Nominees Ltd v. First City Corp Ltd [1993] 1 NZLR 513 followed."

The true commercial value of a property was not what a valuer thought it should be, but the actual price that the property would fetch on the open market, and hence the sale price of RM56,000 was the true market value because no impartial buyer was willing to pay more for the property. No admissible evidence was called by the respondents to rebut the bank's evidence of its valuations and failed auctions. Even if the respondents' evidence from their valuer was admissible, it was flawed because it was a retrospective opinion made in 1993 with no proper supporting materials (see pp 670H-I and 671A-B)." S/N jh0usnCJtEiANyYoriSfKw … [53] Guided by the instructive pronouncements of the Court of Appeal in Malaya Banking Berhad v. Lim Poh Ho, I do not find the allegation that the property was sold at an undervalue has any teeth. [Emphasis added] Alleged failure to do a valuation and to apply to Court for directions to reduce the auction reserve price [23] The plaintiff also alleges that the 1st defendant must do a valuation of the Land before each of the 10 auctions as well as apply to court for directions to reduce the reserve price before each auction. [24] I reject these two contentions. There are no such requirements under the terms of the Consent Order. [25] If it is not a term of a contract to do a particular act, then there is no breach if that act is not done. [See Zainal Abidin bin Mohamed v Roslan bin Abdul Aziz & Anor [2003] MLJU 367 and UR Leisure Resorts Sdn Bhd v Malayan Banking Berhad [2023] 8 AMR 84 at

(71), per Azizan Md Arshad JC. Application to facts [26] The Land was put up for auction 10 times. The first nine auctions were not successful. It was only at the 10th auction that the 2nd defendant S/N jh0usnCJtEiANyYoriSfKw bought the Land. I would therefore say to use the words of Madam Justice Liza Chan that “I do not find the allegation that the property was sold at an undervalue has any teeth.” [27] In conclusion, there are really no merits in the plaintiff’s case. The plaintiff is merely clutching at straws to construct a claim. Decision [28] I dismiss the Originating Summon Enclosure 1 with costs of RM 5,000 each to the two defendants subject to allocatur. ………(signed)………. Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 19th April 2024 COUNSEL: 1) Zulfahami Bin Abu Bakar for plaintiff. (Zul Bakar Chamber (Shah Alam)) 2) Nasyitah Ruzanna Binti Abdul Raman for 1st defendant. (Abdul Raman Saad & Associates (Petaling Jaya)) S/N jh0usnCJtEiANyYoriSfKw 3) Syafiq Amani for 2nd defendant. (Syafiq Amani (Cheras)) CASES REFERRED TO: 1) Asia Commercial Finance (M) Bhd & Anor v. Development & Realtor Sdn Bhd [1992] 1 MLRH 441; [1992] 2 MLJ 504; [1992] 2 CLJ 109. 2) Brutan Investments Pty Ltd v. Underwriting and Insurance & Anor [1981-1982] 39 ACTR 47. 3) Cuckmere Brick Co Ltd v. Mutual Finance Ltd [1971] 1 Ch 949. 4) Downview Nominees Ltd v. First City Corp Ltd [1993] 1 NZLR 513. 5) Malayan Banking Berhad v Lim Poh Ho & Anor [1997] 1 MLRA 72; [1997] 1 MLJ 662; [1997] 2 CLJ 516; [1997] 2 AMR 1597, CA. 6) UR Leisure Resorts Sdn Bhd v Malayan Banking Berhad [2023] 8 AMR

7) Utama Kumara Naidu Sundara Rajoo & Anor v HSBC Bank Malaysia Berhad & Ors [2023] MLRHU 212. 8) Zainal Abidin bin Mohamed v Roslan bin Abdul Aziz & Anor [2003] MLJU 367. S/N jh0usnCJtEiANyYoriSfKw