IB CAPITAL SDN. BHD. (No. Syarikat: 13543-H) 1. IVORY INDAH SDN, BHD. (No. Syarikat: 593357-M) 2. CIMB ISLAMIC BANK BERHAD (No. Syarikat: 671380-H)

IB CAPITAL SDN. BHD. (No. Syarikat: 13543-H) 1. IVORY INDAH SDN, BHD. (No. Syarikat: 593357-M) 2. CIMB ISLAMIC BANK BERHAD (No. Syarikat: 671380-H)

The Court held that IB Capital had an equitable interest as an equitable chargee/beneficiary under a constructive trust; D1 and D2 had actual or constructive knowledge and therefore were not bona fide purchasers without notice and hold remedial constructive trustee liability; specific restitution of title was impractical so equitable compensation was awarded: D1 liable for 70% (RM6,300,000) and D2 for 10% (RM900,000) of agreed redemption sum RM9,000,000, with interest and costs; the High Court decision dismissing IB Capital was set aside.

Citation
P-02(NCVC)(W)-951-05/2019 (Mahkamah Rayuan)
Parties
Appellant/plaintiff: IB Capital Sdn. Bhd.; First Respondent/defendant: Ivory Indah Sdn. Bhd.; Second Respondent/defendant: CIMB Islamic Bank Berhad
Court
NCVC
Jurisdiction
Malaysia
Judgment Date
3 August 2021
Case Number
P-02(NCVC)(W)-951-05/2019 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (court of Appeal) / Judgment on Appeal From High Court (decision Setting Aside High Court Judgment)
Outcome
Appeal allowed; High Court judgment set aside; equitable compensation awarded to plaintiff against respondents
Legal Topics
Constructive Trust, Remedial Constructive Trust, Bare Trust, Equitable Charge, Caveat, Indefeasibility (s.340 Nlc), Notice (actual and Constructive), Equitable Compensation, Laches, Specific Performance
Source Language
Malay/English
Equity Property / Land Law Trusts Contract Law Banking / Finance Law Limitation Law Constructive Trust Remedial Constructive Trust +8 more

Case Brief

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Parties

IB Capital Sdn. Bhd.

Appellant/plaintiff

Ivory Indah Sdn. Bhd.

First Respondent/defendant

CIMB Islamic Bank Berhad

Second Respondent/defendant

Procedural Posture

Civil Appeal (court of Appeal) / Judgment on Appeal From High Court (decision Setting Aside High Court Judgment)

Legal Issues

  1. 1 Whether plaintiff acquired beneficial ownership or equitable charge over land by agreements and part payment
  2. 2 Whether defendants (D1 and D2) had actual or constructive knowledge of plaintiff’s prior interest
  3. 3 Whether defendants are constructive trustees or bona fide purchasers for value without notice

Ratio Decidendi

The Court held that IB Capital had an equitable interest as an equitable chargee/beneficiary under a constructive trust; D1 and D2 had actual or constructive knowledge and therefore were not bona fide purchasers without notice and hold remedial constructive trustee liability; specific restitution of title was impractical so equitable compensation was awarded: D1 liable for 70% (RM6,300,000) and D2 for 10% (RM900,000) of agreed redemption sum RM9,000,000, with interest and costs; the High Court decision dismissing IB Capital was set aside.

Court Disposition

Appeal allowed; High Court judgment set aside; equitable compensation awarded to plaintiff against respondents

Orders

  • Second respondent CIMB Islamic Bank Berhad ordered to pay equitable compensation RM900,000.00 with interest at 5% per annum from 19 April 2019 until full payment; second respondent to pay costs RM100,000 (here and below) subject to allocator