SILVERON BUILDERS SDN BHD (No. Syarikat: 14469-K) 1. NEW CENTURY REALTY SDN BHD (In Liquidation) (No. Syarikat: 14253-P) 2. AD TRAVEL SDN BHD (No. Syarikat: 148525-X) 3. TCY JAYA SDN BHD (No. Syarikat: 446487-H) 4. YHL PROPERTY SDN BHD (No.

JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- IN THE HIGH COURT OF MALAYA AT JOHOR BAHRU IN THE STATE OF JOHOR DARUL TAKZIM, MALAYSIA CIVIL SUIT NO: JA-22NCvC-71-06/2020 BETWEEN SILVERON BUILDERS SDN BHD (No. Syarikat: 14469-K) …PLAINTIFF AND 1. NEW CENTURY REALTY SDN BHD (In Liquidation) (No. Syarikat: 14253-P) 2. AD TRAVEL SDN BHD (No. Syarikat: 148525-X) 3. TCY JAYA SDN BHD (No. Syarikat: 446487-H) 4. YHL PROPERTY SDN BHD (No. Syarikat: 1216244-A) …DEFENDANTS GROUNDS OF JUDGMENT ------------------------------------------------------------------------------------------------------------------------ --------------- 1 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- Introduction [1] These were the Third and Fourth Defendants’ applications (“these Applications”) in Enclosures 16 and 19 respectively, pursuant to Order 14A of the Rules of Court 2012 (“Rules of Court”) to dismiss the Plaintiff’s claim after the determination of the following question of law: Whether a purchaser (the Plaintiff in this civil suit) may seek a declaration of beneficial ownership of parts of a building, which building had been demolished without any strata title or subsidiary title being issued before it was demolished, that is, a building which does not exist as at the date of commencement of this civil suit. The background facts [2] The Plaintiff’s claim was based on nine Sale and Purchase Agreements, all dated 18 February 2004 (“the Agreements”) made between the First Defendant as vendor, and the Plaintiff as purchaser, which contained identical terms and conditions, for the purchase of nine units of shop lots (“the Units”) all located in a building called “Plaza Century” (“the Building”) which was erected on land held under Geran 75853 Lot 15309 Bandar Johor Bahru Daerah Johor Bahru (“the Land”). [3] The Plaintiff lodged a caveat on the Land on 22 April 2004, but which was removed via an order of the Court, pursuant to an application in 2009 by the First Defendant, and without resistance by the Plaintiff. Before its winding-up in 2010, the First Defendant sold and ----------------------------------------------------------------------------------------------------------------------------- ---------- 2 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- transferred the Land to the Second Defendant, which subsequently sold and transferred the Land to the Third Defendant. It is pertinent to note that all this time, since 2004, the Plaintiff had not commenced any proceedings against the First Defendant. [4] In November 2017, the Fourth Defendant became the registered proprietor of the Land after purchasing it from the Third Defendant. Subsequent to the sale to the Fourth Defendant, the Plaintiff lodged several caveats in July 2019, June 2020, and August 2020, all of which were either withdrawn or removed by an order of Court. [5] On 9 June 2020, the Plaintiff filed a claim (“this Suit”) against the Defendants for, inter alia, a declaration that the Units are beneficially owned by the Plaintiff. On 17 December 2020, the Third and Fourth Defendants filed these Applications, which were allowed for the following reasons. The applicable law [6] These Applications were made pursuant to Order 14A of the Rules of Court, which reads: Order 14A - Disposal of case on point of law Rule 1. Determination of questions of law or construction (1) The Court may, upon the application of a party or of its own motion, determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that- (a) such question is suitable for determination without the full trial of the action; and ----------------------------------------------------------------------------------------------------------------------------- ---------- 3 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- (b) such determination will finally determine the entire cause or matter or any claim or issue therein. (2) On such determination the Court may dismiss the cause or matter or make such order or judgment as it thinks just. … [7] The principles governing an application under Order 14A of the Rules of Court have been distilled by the Federal Court in the case of Thein Hong Teck & Ors v. Mohd Afrizan Husain & Another Appeal [2012] 1 CLJ 49, citing with approval the case of Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2007] 5 CLJ 741 which had reiterated that Order 14A of the Rules of Court may be utilised to dispose a case, only if the following requirements were met: a) There is no dispute between the parties as to the relevant facts; b) The court, from its scrutiny of the pleadings, concludes that the material facts are not in dispute; and c) The issues of fact are not interwoven with the issues of law. [8] The Federal Court in the case of Director of Forests, Sarawak & Anor v Racha Ak Urud @ Peter Racha Urud & Ors And Other Appeals [2017] 4 MLJ 42, through Balia Yusof FCJ, laid down the test in determining whether the question of law or construction was suitable to be determined and disposed of under Order 14A of the Rules of Court, in the following passage: [35] On the applicability and the approach to be taken by the court in exercising its powers and discretion under O14A, we refer to the commentary on O 14A appearing in the Malaysian Court Practice ----------------------------------------------------------------------------------------------------------------------------- ---------- 4 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- (Practitioner Edition), a publication of the Malayan Law Journal at pp 125-127 which reads as follows: [14A.1.3.] Suitable question of law or construction. The question of law or construction must be suitable to be determined without the full trial of the action. The test of whether the question of law or construction is ‘suitable’ to be determined under this order is whether all the necessary and material facts relating to the subject matter of the question have been duly proved or admitted, and this postulates that there is no dispute or no further dispute as to the relevant facts at the time when the court proceeds to determine the question. The suitability of disposing of an action under this order depends entirely on whether the court can determine the question of law raised without a full trial of the action. For example see Manganmal Jhamatmal Lalwani v NE Vickerama [2001] 1 SLR 90 (where the plaintiff made an application for a ruling on the preliminary issue as to whether there was an issue estoppel)… [Emphasis added.] Contentions, evaluation, and findings [9] The gist of these Applications revolved around the interpretation of specific clauses in the Agreements. The nub of the contention of the Third and Fourth Defendants was that the Agreements had conferred only contractual rights to the Plaintiff, which included the mere right to occupy the Units in the Building erected upon the Land. The Plaintiff, on the other hand, claimed to be the beneficial owner of the Units by virtue of the full purchase price deemed to have been paid. Whether the Plaintiff was bound by the terms of the Agreements [10] The starting point to these Applications would be the provisions in the Agreements themselves. At this juncture, a reminder of the general principles of contract law was opportune, as found in The Royal Selangor Golf Club v. Anglo-Oriental (Malaya) Sdn Bhd ----------------------------------------------------------------------------------------------------------------------------- ---------- 5 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- [1990] 1 CLJ 995; [1990] 3 CLJ (Rep) 37, where Lim Beng Choon J, in referring to National Coal Board v. Wm Neill & Son (St Helen) [1984] 1 All ER 555, summarised the general principles as follows: In considering the disputes of the parties I must first of all bear in mind the general principles of construction of contract as enunciated in the National Coal Board v. Wm Neill & Son (St Helen) [1984] 1 All ER 555 where it is said at p 560: The first two issues involve the construction of the contract. I bear in mind the principles of construing a contract. The relevant ones for the purpose of this case are: (1) construction of a contract is a question of law; (2) where the contract is in writing the intention of the parties must be found within the four walls of the contractual documents; it is not legitimate to have regard to extrinsic evidence (there is, of course, no such evidence in this case); (3) a contract must be construed as at the date it was made: it is not legitimate to construe it in the light of what happened years or even days later; (4) the contract must be construed as a whole, and also, so far as practicable, to give effect to every part of it. In Central Bank of India v. Hartford Fire Insurance Co. Ltd. [1965] AIR SC 1288, the Supreme Court of India lays stress on the second principle advocated in the Wm. Neill & Son (St Helens) Ltd. case when it says at p. 1290: Now it is commonplace that it is the Court's duty to give effect to the bargain of the parties according to their intention and when that bargain is in writing the intention is to be looked for in the words used unless they are such that one may suspect that they do not convey the intention correctly. If those words are clear, there is very little that the Court has to do. The Court must give effect to the plain meaning of the words however much it may dislike the result. [11] I found instructive also the case of Asiapools (M) Sdn Bhd v. IJM Construction Sdn Bhd [2010] 2 CLJ 28, where it was stated by Abdul Malik Ishak J (as he then was): In construing a written contract the professed object of the court was to discover the mutual intention of the parties. The intention of the parties must be ascertained from the document itself. Thus, the parties themselves cannot give direct evidence to show that their intentions were at variance with the provisions of the contract document. The task of the court is quite simple namely, to construe the contractual term ----------------------------------------------------------------------------------------------------------------------------- ---------- 6 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- without any pre-conception as to what the parties intended. When the minds of the parties are expressed in an unambiguous manner, the principle of construction which are at best only a guide in the search for the intention of the parties cannot be relied upon to override the declared intention of the parties unequivocally expressed in the contract document.” [Emphasis added.] [12] It is important, therefore, that where the contract is in writing, the intention of the parties should be confined within its four walls. Although the Third and Fourth Defendants were strangers to the Agreements, it was imperative for the Plaintiff, being a party to the Agreements, to observe strict adherence to the terms of the same. [13] The attention of the Court was first brought to clause 9 of the Agreements which reads: 9. Possession only after full payment Possession of the said Unit shall not be given until after the execution of this Agreement, and upon the purchaser having duly paid to the Vendor all monies payable in accordance with the terms of this Agreement and the Purchaser having duly complied with the terms and covenants in this part to be observed in this Agreement. Upon possession of the said Unit being granted to the Purchaser as aforesaid and until the subsidiary title to the said Unit is transferred to the Purchaser pursuant to clause 10 hereof, the Purchaser shall occupy the said Unit as a licensee of the Vendor and by no other right. [Emphasis added.] [14] It was undisputed that no strata titles had been issued for the Units. As such, the position of the Plaintiff as purchaser, pursuant to clause 9 was clearly that of a mere licensee. This was supported by the ----------------------------------------------------------------------------------------------------------------------------- ---------- 7 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- case of Wan Noor Kamariah binti Wan Jaafar v. Aritah Realty Sdn Bhd & Ors and other appeals [2018] MLJU 1533, where it was held that the rights of purchasers awaiting the issuance of strata titles are merely rights ex contractu. In the following passage, Darryl Goon J (as he then was) elucidated: [89] ...Without the issuance of strata titles, what the Plaintiffs have are rights ex contractu and they are in the form of choses in action. The Plaintiffs’ rights are in respect of what they had contracted for and embodied in their respective sales and purchase agreements. Until the strata titles to the Units they had contracted to buy are issued, the Plaintiffs’ rights remain in personam as against Aritah Realty and the Developer, who had undertaken to apply for and secure strata titles for the Units in Wisma Aritah. These Plaintiffs/purchasers cannot even claim to have any right in rem because what they had contracted for, i.e. property with strata title, had not come into existence. They also cannot claim to have any rights ad rem (see Tan Ong Ban and Bachan Singh v. Mahinder Kaur & Ors [1956] MLJ 97) because without any strata titles issued, there cannot exist any rights to any existing property. All that exists, without strata titles being issued, are rights in contract. [90] Does the fact that the physical space that was contracted for exists make any difference? I do not think so. Individuals may have occupational rights or rights of possession in respect of physical spaces without title. However, this is not the same as having any beneficial or legal interest in the space qua “property”. Like rooms in a house, the Units that exist physically are not capable of separate ownership in law. They too have no separate title of their own. The physical space that exists, again like a room in a house, is capable of being rented or leased. Right of occupation in the form of a licence may also be granted. However these rights are again rights in personam. They exist by virtue of the contract or instrument that created them. There is only one legal title that exists and that is the title in the land upon which Wisma Aritah sits. [Emphasis added.] ----------------------------------------------------------------------------------------------------------------------------- ---------- 8 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- [15] Clause 2 was also underscored, as the vendor’s rights were preserved under the Agreements to enforce any or all terms and conditions contained therein, despite the fact that the purchase sum was deemed to have been fully paid. Clause 2 of the Agreements reads: 2. Purchase price and payment thereof In consideration of Silveron Builders Sdn Bhd refraining from taking proceeding for the recovery of monies owed by the Vendor’s Group of Companies, the total purchase price of the said Unit shall be the amount specified in Section 5 of the First Schedule hereto which sum shall be deemed to have been fully paid and settled upon the execution of this Sale and Purchase Agreement by the parties hereto. This shall in no way affect all other rights of the Vendor in law or under the Agreement to enforce any or all terms and conditions contained hereinafter. [Emphasis added.] [16] The position of the Plaintiff as licensee was further fortified by clause 17 of the Agreements, which prohibited the Plaintiff from re-selling, transferring or assigning the rights, duties and obligations under the Agreements. Clause 17 reads: 17. Restriction against re-sale/ sub-sale The Purchaser shall not re-sell, transfer or assign the rights, duties and obligations under this Agreement without the prior written consent of the Vendor first had and obtained such consent not be unreasonably withheld and provided that any transfer fee of one (1%) per centum of the selling price imposed by the Vendor and the legal costs and expenses of such transfer or assignment (including the Vendor’s solicitor’s costs) shall be borne absolutely by the Purchaser. ----------------------------------------------------------------------------------------------------------------------------- ---------- 9 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- [Emphasis added.] Whether the First Defendant had divested itself of all interests [17] The Plaintiff in contending that it was the beneficial owner, relied on several authorities including the landmark case of Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd [1996] 2 MLJ 12. However, I am unable to agree with the Plaintiff, since even in Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd, it was clear that payment by the purchaser of the full purchase price alone was insufficient, as the vendor had to also divest himself of his interest in the land. This was made very clear by Edgar Joseph Jr FCJ in concurring with the judgment of Gill FCJ in Ong Chat Pang v Valliappa Chettiar [1971]1 MLJ 224, in the following passage: In our view, the contractual events, which result in the vendor becoming a bare trustee of the land the subject matter of the agreement of sale and purchase for the purchaser, is on completion, that is to say, upon receipt by the vendor of the full purchase price, timeously paid and when the vendor has given the purchaser a duly executed, valid and registrable transfer of the land in due form, in favour of the purchaser, for it is then that the vendor divests himself of his interest in the land [Emphasis added.] [18] The provisions in the Agreements were indicative that the First Defendant in the present case had not divested itself of the interests in the Units. This is clear from Clause 11 of the Agreements, which reads: 11. Purchaser’s default in payment or breach of terms and remedies thereto ----------------------------------------------------------------------------------------------------------------------------- ---------- 10 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- If the Purchaser shall:- (i) fail to pay any sums payable under this Agreement within time stipulated for that payment; or (ii) commit any breach of any terms and conditions contained in this Agreement; or (iii) if any execution is levied upon the Purchaser or his goods; then and in any of the said cases, it shall be lawful for the Vendor at any time thereafter to terminate the Purchaser’s licence to occupy the said Unit and to annul the sale of the said Unit and to forthwith terminate this Agreement. [Emphasis added.] [19] Not only does clause 11 refer to the Plaintiff’s position as a mere licensee to occupy the Units, it also refers to the First Defendant’s right to terminate the licence, annul the sale of the Units, and even terminate the Agreements. It was manifestly clear, therefore, that the Plaintiff had not acquired any beneficial ownership of the Units, pursuant to the Agreements. [20] Furthermore, the authorities that the Plaintiff had relied on were based on different factual matrices as the present case. In this case, the nature of the Agreements were such that they were not the standard sale and purchase agreements, but that they were entered into between the Plaintiff and First Defendant pursuant to a settlement agreement between the Plaintiff and some third parties, which were companies in the same group of companies as the First Defendant. As such, the Plaintiff had not made any payment towards the purchase price. These facts were indicated by the Preamble to ----------------------------------------------------------------------------------------------------------------------------- ---------- 11 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- the Agreements, which reads: … AND WHEREAS the Vendor enters into this Agreement with the Purchaser having full knowledge of the Settlement Agreement dated 24th September 2003 (hereinafter referred to as “the said Settlement Agreement”) entered into by Anson Perdana Realty Sdn Bhd, Anson Perdana Berhad and Prodeal Sdn Bhd (hereafter referred to as “the Vendor’s Group of Companies”), all being part of the Vendor’s Group of Companies with the Purchaser, to settle inter-company debt of RM600,000-00 due to Purchaser. AND WHEREAS in consideration of the Purchaser refraining from proceeding with legal proceedings against the Vendor’s Group of Companies, the Vendor shall transfer the said unit to the Purchase as settlement for the debt owed by the Vendor’s Group of Companies to the Purchaser and/or its (s) and the purchase price shall be deemed to have been fully settled. [Emphasis added.] [21] It must also be borne in mind that the Building had been demolished without any strata title being issued, rendering it non-existent at the date of commencement of this Suit. Whether there was basis for allegations of conspiracy and collusion [22] The Plaintiff had also submitted that the issues they raised in their pleadings involved allegations of conspiracy and collusion on the part of the Third and Fourth Defendants and as such, these Applications should be dismissed as a full trial would be required to ventilate those issues. ----------------------------------------------------------------------------------------------------------------------------- ---------- 12 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- [23] In my view, whatever allegations or issues the Plaintiff had with the Third and Fourth Defendants had to be based on the Agreements, but in view of my finding that the Plaintiff had only contractual rights in-personam against the First Defendant, pursuant to the Agreements, which the Second, Third and Fourth Defendants were strangers to, the allegations made by the Plaintiff against the Third and Fourth Defendants were non-starters. Conclusion [24] In the upshot, based on the aforesaid reasons, and after judicious consideration of all the evidence before this Court, including submissions of all parties, these Applications were allowed, and the Plaintiff’s claim dismissed, with costs. Dated: 27 May 2021 ………SIGNED……… (EVROL MARIETTE PETERS) Judicial Commissioner High Court, Johor Bahru Counsel For the Plaintiff – Ravenesan Sivanesan and Mohammad Danial bin Hazizan; Messrs S Ravenesan For the Third Defendant – Mathews George; Messrs Mathews George & Co ----------------------------------------------------------------------------------------------------------------------------- ---------- 13 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- For the Fourth Defendant – Gan Techiong and Wong Wan Ting; Messrs Gan & Lim Cases referred to:  Asiapools (M) Sdn Bhd v. IJM Construction Sdn Bhd [2010] 2 CLJ 28  Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd [1996] 2 MLJ 12.  Director of Forests, Sarawak & Anor v Racha Ak Urud @ Peter Racha Urud & Ors And Other Appeals [2017] 4 MLJ 42  Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2007] 5 CLJ 741  National Coal Board v. Wm Neill & Son (St Helen) [1984] 1 All ER 555  Ong Chat Pang v Valliappa Chettiar [1971]1 MLJ 224  The Royal Selangor Golf Club v. Anglo-Oriental (Malaya) Sdn Bhd [1990] 1 CLJ 995; [1990] 3 CLJ (Rep) 37  Thein Hong Teck & Ors v. Mohd Afrizan Husain & Another Appeal [2012] 1 CLJ 49  Wan Noor Kamariah binti Wan Jaafar v. Aritah Realty Sdn Bhd & Ors and other appeals [2018] MLJU 1533 ----------------------------------------------------------------------------------------------------------------------------- ---------- 14 JA-22NCvC-71-06/2020 27 May 2021 ----------------------------------------------------------------------------------------------------------------------------- ---------- Legislation referred to:  Rules of Court 2012, Order 14A ----------------------------------------------------------------------------------------------------------------------------- ---------- 15