United Highlands Sdn Bhd v Syarikat Endah Sari Sdn Bhd (WA-12ANCvC-353-12/2021)

Parties will be cited as they were cited at the Sessions Court below.

The Kuala Lumpur Sessions Court in a Judgment dated 29-9-2015 (“2015 Judgment”) after full trial held that the Plaintiff is the legal and/or rightful beneficial owner of Lot T3L6, Block T, Selesa Hillhomes, Bukit Tinggi, Pahang (“Property”). [see affidavit of Ellina binti Abdul Majid dated 14-10-2021 paragraph 10 and exh P-1].

The Defendant in this suit is the developer of Selesa Hillhomes which includes the Property.

The Defendant in the 2015 Judgment is Aljafri Bin Abdul Majid. (“Aljafri”). At various times Aljafri was a director of both the Plaintiff and/or the Defendant. The Sessions Court also ordered Aljafri do forthwith deliver and/or cause to deliver vacant possession of the Property to the Plaintiff within 14 days from the date of the judgment. Aljafri’s appeal to the High Court was dismissed on 22-04-2016. [see affidavit of Ellina binti Abdul Majid dated 14-10-2021 paragraph 10 and exh P-2]

In 2020 the Plaintiff sold the Property. The purchaser’s solicitors wrote to the Defendant to request for confirmation that the Plaintiff is the owner of the Property and other requisite particulars of the Property pursuant to Section 22D(4) of the Housing Developers (Control and Licensing) Act 1966 (“HDA”). This was refused by the Defendant.

The Plaintiff filed this suit.

The Defendant on 29-09-2021 applied pursuant to O 18 r19(1)(a) or (b) and/or (c) and/or (d) of the Rules of Court 2012 [“ROC 2012”] and/or Section 69 of the Subordinate Courts Act 1948 and/or the inherent jurisdiction of the court to strike out the Plaintiffs’ Writ and Statement of Claim.

The Sessions Court had dismissed the application. The Defendant appealed. I had dismissed the appeal on 04-04-2022. The Defendant has now appealed to the Court of Appeal. These are my grounds of judgment.

The Plaintiff’s pleaded case is as follows.

The Plaintiff is a shareholder of the Defendant and holds 34% of the shares of the Defendant. The Defendant is a housing developer within the meaning of Section 2 of the HDA. The Defendant is the developer of Selesa Hillhomes Apartments, Bukit Tinggi, 28750 Bentong, Pahang Darul Makmur.

The Plaintiff and the Defendant entered into a Sale and Purchase Agreement dated 28-12-1992 whereby the Plaintiff agreed to purchase the Property as a shareholder’s unit for RM143,100.000. Vacant possession of the Property was delivered to the Plaintiff way back in 1995.

Sometime in 2014, a dispute arose between the Plaintiff and Aljafri in respect of the ownership of the Property. In the 2015 Judgment the Sessions Court and High Court ruled in favour of the Plaintiff and gave the orders as set out in my Introduction above.

In 2020 the Plaintiff sold the Property. The Purchaser’s Solicitors wrote to the Defendant to request for confirmation that the Plaintiff is the owner of the Property and other requisite particulars of the Property pursuant to Section 22D(4) of the HDA. This was refused by the Defendant. Due to this refusal the purchaser aborted the purchase.

The Plaintiff filed this suit against the Defendant for breach of contract and statutory duty. The Plaintiff prayed for – 5 a. A declaration that the Plaintiff is the legal and beneficial owner of the Property and is entitled absolutely to the Property; b. An order that the Defendant provides all requisite confirmation and/or documents and/or information requested by the Plaintiff and/or any potential purchaser of the Property pursuant to the provisions of the HDA, if and when the Plaintiff decides to sell the Property in the future; c. An order that the Defendant whether by itself or through its employees and/or agents refrain in any form whatsoever, whether by act and/or omission from impeding any future sale of the Property; d. General damages under paragraphs 38 and 46 of the Statement of Claim; e. Exemplary Damages; f. Interest at the rate of 5% per annum from the date of judgment; g. Costs;

The Defendant on 29-09-2021 applied to strike out the suit. In its supporting affidavit, its sole ground is that the Sessions Court has no jurisdiction to hear the disputes between the parties under Section 69(a) of the Subordinate Courts Act 1948. The application was dismissed by the Sessions Court.

In a succinct judgment the Sessions Court Judge Tuan Shamsudin bin Abdullah held that he has jurisdiction to hear this suit although involving immoveable property by virtue of the exceptions to Section 69 set out in Sections 70 and 71 of the Subordinate Courts Act 1948. [GOJ paragraphs 33-37].

The locus classicus on the test to be applied in an application to strike out under O18 r19 ROC 2012 was settled by the Supreme court, the then 6 apex court, way back in the year 1993 in Bandar Builder Sdn Bhd & 2 Ors v United Malayan Corporation Bhd [1993] 4 CLJ 7 SC at 11 e - h. [“Bandar Builder”] Mohamed Dzaiddin bin Hj Abdullah SCJ [delivering judgment of the court] said-The principles upon which the Court acts in exercising its power under any of the four limbs of O. 18 r. 19(1) Rules of the High Court are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck v. Wilkinson [1899] 1 QB 86, p. 91), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it “obviously unsustainable” (Attorney-General of Duchy of Lancaster v. L. & N.W. Ry. Co. [1892] 3 Ch. 274, CA). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2 All ER 871, CA.). The authorities further show that if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. 3 (which is in para materia with our O. 33 r. 2 Rules of the High Court) (Hubbuck v. Wilkinson) (supra). The Court must be satisfied that there is no reasonable cause of action or that the claims are 12 frivolous or vexatious or that the defences raised are not arguable. (emphasis mine) Jurisdiction of the Sessions Court to hear actions, suits or proceedings of a civil nature relating to immovable property

Section 69(a) of the Subordinate Courts Act 1948 states the Sessions Court has no jurisdiction to hear actions, suits or proceedings of a civil nature relating to immovable property except as provided in sections 70 and 71. Section 69[a] reads-

Exceptions to jurisdiction Sessions Courts shall have no jurisdiction in actions, suits or proceedings of a civil nature—

relating to immovable property except as provided in sections 70 and 71; [emphasis mine] [19] As stated in Section 69[a] itself, the Sessions Court will have jurisdiction to hear actions, suits or proceedings of a civil nature relating to immovable property if, in the opinion of the Court, there is no bona fide question of title involved [see Section 70[4], or if parties had consented. [see Section 71]. A case on point is All Best Resources Sdn Bhd V Wong Yoke Lu [2015] MLJU 991 Mohd Nazlan Bin Mohd Ghazali JC. [20] Section 70[4] of the Subordinate Courts Act 1948 states –

Recovery of immovable property

Subject to subsection (4), a Sessions Court shall have jurisdiction to hear and determine any action or suit for the recovery of immovable property, and thereupon to issue an order to the proper officer of the Court to put the plaintiff in possession of the property.

In any such action or suit, there may be added a claim for rent or mesne profits and for damages arising to the plaintiff from the defendant holding over or resisting his right of possession or re-entry, and for damages for breach of any covenant, condition or agreement in relation to the premises.

(Deleted by Act A887).

Except as provided in Section 71, the aforesaid jurisdiction shall not be exercised in any case where, in the opinion of the Court, there is a bona fide question of title involved and subject to that section, recovery of possession of any immovable property under this section shall be no bar to the institution of an action, suit or proceeding of a civil nature in the High Court for trying the title thereto. [emphasis mine] [21] Section 71 of the Subordinate Courts Act 1948 states-

Jurisdiction to adjudicate on title to immovable property with consent of parties If, in any action or suit before a Sessions Court, the title to any immovable property is disputed, or the question of the ownership thereof arises, the Court may adjudicate thereon if all parties interested consent; but, if they do not all consent, the Sessions Court Judge shall apply to the High Court to transfer the action or suit to itself. [emphasis mine] Section 70[4] of the Subordinate Courts Act 1948 - is there is a bona fide question of title involved? [22] In my view, there is no bona fide question of title involved. 30 years ago the Plaintiff and the Defendant had entered into a Sale and Purchase Agreement dated 28-12-1992 whereby the Plaintiff agreed to purchase the Property as a shareholder’s unit for RM143,100.000. Vacant possession of the Property was delivered to the Plaintiff way back in

This is more than 26 years ago. [23] The Kuala Lumpur Sessions Court in the 2015 Judgment dated 29-09- 2015 after full trial had held that the Plaintiff is the legal and/or rightful beneficial owner of the Property. This decision was affirmed by the High Court. Although the Defendant was not named as a party in this 2015 suit the Defendant was aware of this suit. In any event, I don’t see how the Defendant can now say there is a bona fide question of title involved when the Sale and Purchase Agreement is dated 28-12-1992 and vacant possession of the Property was delivered to the Plaintiff way back in

The Defendant’s claim if any is surely barred by limitation. [24] In All Best Resources Sdn Bhd v Wong Yoke Lu [2015] MLJU 991 the High Court also held that the Sessions Court can have jurisdiction if there is no bona fide question of title involved. Mohd Nazlan Bin Mohd Ghazali JC said- [54] In the foregoing analysis, I have evaluated the facts and circumstances of the case in some detail. This should not be taken to suggest that there is a bona fide question on title to or a substantial dispute between the parties on the ownership of the said Premises. On the contrary, my approach, consistent with the one adopted in Hiew Kim Swee has been to review and evaluate the pleadings and evidence in the proceedings to ascertain if there was bona fide question of title or substantial dispute on the ownership of the same by examining if the registration of title could be defeated by Section 340 (2). As I have demonstrated in the analysis, the evidence fell considerably short of establishing the appellant’s case on a balance of probabilities. Therefore although the pleadings may appear to suggest that a question of ownership of title was involved, I find that the evidence in the proceedings of the case on the whole did not support the contention that there was any real bona fide dispute as to title. Accordingly, given my finding that there is no bona fide question of title involved in the instant case within the meaning of Section 70 (4) of the SCA, the proceedings of the trial at the Sessions Court at first instance was not in any way impaired by or tainted with any jurisdictional defect. [emphasis mine] Section 71 of the Subordinate Courts Act 1948 -is there an agreement by the Defendant for the Sessions Court to adjudicate on title to immovable property? [25] In my view, the requirement of consent under Section 71 of the Subordinate Courts Act 1948 can be satisfied by showing a Defendant has expressly in writing or impliedly by conduct consent to the Sessions Court to adjudicate on title to immovable property. [26] This is also the view of the High Court in All Best Resources Sdn Bhd V Wong Yoke Lu [2015] MLJU 991. Mohd Nazlan Bin Mohd Ghazali JC said- [56] The second exception giving jurisdiction on immovable property to the Sessions Court is contained in Section 71. This statutory provision allows the Sessions Court to adjudicate even when there is dispute on the title to any immovable property if consented to by the parties. If there is no such consent, the Sessions Court judge shall apply to transfer the suit to the High Court. In the instant case, there is no such transfer by the Sessions Court to the High Court and this a principal complaint made by the appellant as stated earlier in this judgment, that the matter should have been transferred to the High Court. However, I am inclined to agree with the contention of the respondents that there was implied consent. In my view, ideally, express consent of the parties ought to be recorded by the Sessions Court judge. However, in situations where the parties had filed their pleadings and participated in the subsequent steps in the proceedings until its conclusion without any objection on jurisdiction of the Sessions Court hearing the suit, implied consent by the parties could be safely deemed. [emphasis added] [27] The facts show that the Defendant had impliedly consented for the Sessions Court to adjudicate on title to immovable property. In its reply affidavit by Ellina binti Abdul Majid dated 14-10-2021 at paragraph 5 the Plaintiff asserted that the Defendant has, prior to filing this striking out application on 29-09-2021, taken various steps in the proceedings including:

On 03-12-2020 filing its Defence and Counterclaim;

Enclosure 32 – Application under Order 33 of the Rules of Court 2012;

Enclosure 46 – Application to amend the Defence and

Serving of the Defendant’s documents and witness statement for trial; and

Accepted trial dates fixed on 09-09-2021. [28] The Sessions Court was of the view the steps taken above by the Defendant constitute implied consent to jurisdiction. I have no reason to disagree based on the same reasoning as Mohd Nazlan Bin Mohd

[29] In particular, I note that the Defendant had even prayed in its Counterclaim at prayer 20.4 that the Plaintiff has no interest and no right to possession in the Property since 01-12-1995.

[30] I dismiss the appeal with costs. .........(signed)............ Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 27th May 2022 COUNSEL: 1) Wallace Wong for Appellant. (Wallace Wong Partnership (Selangor)) 2) HK Niak for Respondent. (Selvi Mo Yin (Kuala Lumpur)) CASES REFERRED TO:

All Best Resources Sdn Bhd V Wong Yoke Lu [2015] MLJU 991.

Bandar Builder Sdn Bhd & 2 Ors v United Malayan Corporation Bhd [1993] 4 CLJ 7 SC. LEGISLATION REFERRED TO:

Order 18 rule 19(1)(a),(b),(c) and (d) of the Rules of Court 2012.

Section 22D(4) of the Housing Developers (Control and Licensing) Act 1966.

Section 69 of the Subordinate Courts Act 1948.

Section 70 of the Subordinate Courts Act 1948.

Section 71 of the Subordinate Courts Act 1948.