DALAM MAHKAMAH RAYUAN MALAYSIA
(BIDANG KUASA RAYUAN)
RAYUAN SIVIL NO. P-02-223-01 TAHUN 2012
KRISHNAN A/L DARUMAN …. Perayu
LECHIMUNISAMY A/L NATU … Responden (Dalam Mahkamah Tinggi Malaya di Pulau Pinang Guaman Sivil No. 22-312-2009 ANTARA
KRISHNAN A/L DARUMAN …. PLAINTIF
LECHIMUNISAMY A/L NATU …. DEFENDAN)
(yang diputuskan oleh Yang Arif Hakim Puan Nurmala Binti Salim di Mahkamah Tinggi Malaya di Pulau Pinang pada 7 hari bulan Disember, 2011)
Mohamed Apandi Ali, JCA Linton Albert, JCA Lim Yee Lan, JCA
GROUNDS OF DECISION
The facts relating to this appeal are brief and uncomplicated. The appellant entered into a sale and purchase agreement with the respondent dated 11-10-1997. Under the sale and purchase agreement the respondent who was the beneficial owner of the property held under Geran Mukim No. GM516 No. Lot 347 Mukim 7 Daerah Seberang Perai Selatan, Negeri Pulau Pinang (the said land) agreed to sell the said land to the appellant for a total sum of RM 378,972.00 payable as follows: the sum of RM37,897.20 was to be paid on or before the signing of the sale and purchase agreement as deposit and part payment of the purchase price and the balance of RM341,074.80 within three months of the extract of letters of Administration and the vesting order because the said land was held by one Khrisnasamy s/o Naggappen (the trustee) in trust for the respondent. The trustee had died before the execution of the sale and purchase agreement. The respondent refused to complete the sale of the said land to the appellant and the appellant then filed a suit asking for
an order of specific performance of the sale and purchase agreement but the High Court refused to grant the relief sought by the appellant and dismissed the appellant’s claim.
The appellant’s claim was dismissed on the basis that only RM18,948.60 was paid to and received by the respondent representing 5% of the purchase price. The learned Judicial Commissioner ruled that the other equivalent sum of RM18,948.60 as evidenced represented by a cheque butt (exhibit P48) and particulars of cheque (exhibit P8) were not sufficiently proved. With respect we find that this finding is perverse and plainly wrong because quite apart from the fact that exhibits P48 and P8 constituted evidence of payment, clause 1 of the sale and purchase agreement clearly and unequivocally stated that the sum of RM37,897.20 had been paid to and acknowledged by the respondent which said sum of RM37,897.20 represented ‘the deposit and payment towards account of the purchase price”. The learned Judicial Commissioner ought to have given effect to the plain meaning of clause 1 of the sale and purchase agreement which was not disputed. (see Mulpha Pacific Sdn Bhd v. Paramount Corp Bhd  4 MLJ 357). Above all, the learned Judicial Commissioner ruled that in the circumstances aforesaid, the respondent was only a beneficial owner and had no authority to enter into a valid contract to sell the said land and that only the registered proprietor who, in
this case, was the trustee, had the authority to sell the said land. It was further held that since the trustee Krishnasamy a/l Nagappan had since died, the respondent as beneficiary could only acquire his interest after the estate had been administered and until then, had no capacity to enter into the sale and purchase agreement for the said land. The learned Judicial Commissioner relied solely on Punca Klasik Sdn Bhd v. All Persons in Occupation of the Wooden House Erected on a Portion of Land held under Grand No.26977 of lot 4271 in the Township of Johor Bahru, Johor and Another Action (No. 2) 5 MLJ 92 and Chor Phaik Hor v. Farlim Properties Sdn. Bhd.  3 MLJ 188. With respect the learned Judicial Commissioner’s reliance on these two cases was misplaced because Punca Klasik is irrelevant and Chor Phaik Hor ought to have been distinguished. In any case Chor Phaik Hor stood in woeful isolation among a plethora of other authorities which held a contrary view. In Punca Klasik the plaintiffs bought the land from the estate of Syed Hassan in 1994 and became the registered proprietor of the land. Two separate portions of the land were occupied by one Lim Kim Leung (Lim) and Ng Eng Hing (Ng) who claimed to be owners of the two portions respectively, Lim’s claim to his portion was based on the fact that his father had purchased it from one Syed Ali in 1962 and Ng’s claim was similarly based on the fact that his farther also purchased his portion from one Syed Abdullah in 1951. Both Syed Ali and Syed Abdullah were beneficiaries of the estate of Syed Hassan. It was held that the interests of the defendants’ fathers were not
registered pursuant to section 65 of the Land Enactment No. 1 and since these portions were not dealt with in accordance with Pt V of the Land Enactment No. 1, the agreements that were entered into between the parties must be regarded as null and void and of no effect within the meaning of section 63 of the Land Enactment No. 1. Section 214 of the National Land Code 1965 (‘the NLC’) prohibits totally the transfer of a part of any alienated land or a part of an undivided share in that land.
In Chor Phaik Har, % undivided share of the property known as Ayer Hitam Estate which consisted of two parcels of land were acquired by one Chor Bah Say (the deceased) who died intestate in 1949 and his % undivided share devolved to his estate. The other % undivided share was acquired by a company. In 1992 the company and the executiors and trustees of the beneficiaries of the deceased’s estate sold the two parcels of land to the respondent. The appellant who was a direct beneficiary of the estate lodged a caveat on the two parcels of land. The High Court allowed the respondent’s application for removal of the appellant’s caveat pursuant to section 327 of the NLC. On appeal the Federal Court held that in law a beneficiary under an intestacy has no interest or property in the personal estate of a deceased person until the administration of the latter’s estate is complete and distribution made according to the law of distribution of the intestate estate. Hence, the beneficiaries could not have covenanted
to convey any title to the respondent under the sale agreements and the respondent, therefore, cannot rely on those agreements to justify their status as “persons aggrieved’ under section 327 of the NLC.
Clearly, Punca Klasik has no application in the present appeal because here section 65 of the Land Enactment No. 1 did not apply nor section 214 of the NLC 1965 because it did not relate to the transfer of a part of any alienated land or part of an undivided share in that land. We shall now revert to some of the authorities which hold a contrary view to that expressed in Chor Phaik Har. It is perhaps appropriate to begin by setting out the statement of the law relating to the sale of land by a beneficial owner where the land is part of the estate of a deceased person where the estate has not been administered. In Kersah La’usin v. Sikin Menan  2 MLJ20 at page 22 Raja Azlan Shah, J (as His Majesty then was) stated as follows:
“The first consideration is whether the plaintiff could enter into a contract with the defendant’s (deceased) father involving a subject matter which was then not subsisting in the sense that the said land was still in his mother’s name, it is not disputed that he was the sole beneficiary and that he was in such a position that when the time
came he could perfect the title of the purchaser. The fact that at the date of contract the vendor had neither title nor power to call for title is not of itself an answer to a suit of specific performance by the purchaser. ”
In Silimuthu v. Amalu & Anor  1MLJ 190 the defendants who were the beneficiaries of the estate of one Krishnan entered into a sale agreement with the plaintiff in relation to a piece of land which formed part of the estate. Kersah La’usin was followed and this is what Yusof Abdul Rashid, J said at page 191:
“i have no doubt at all that the defendants were legally competent to enter into the agreement in the terms as stated above, i do not agree that the agreement was void ab initio. There is no proposition of law, to my knowledge, which prohibits beneficiaries of an estate of a deceased person from entering into an agreement of this nature, instead there are authorities which point to the fact that beneficiaries are competent to enter into such agreement even before Letter of Administration has been granted to them.”
In Tan Swere Lan v. Engku Nik Binti Engku Muda & Ors  2 MLJ 187 the facts of the case are set out in the judgment of Ali, FJ at page 187 as follows:
“By a written agreement dated April 12, 1958, the respondents agreed to sell and the appellant agreed to buy a piece of land held under Grant 2483, Lot 2451 in the township of Kuala Terengganu./ The agreed price was $3,6000 of which $750 was paid by the appellant as down payment. The balance was to be paid when the land was transferred to the appellant. On the date of the agreement the land was part of the estate the late Engku Muda bin Engku Besar and all the respondents were said to be beneficiaries of the estate. ”
The respondents failed to take steps to have the land transferred to the appellant. The appellant claimed specific performance of the agreement. The High Court dismissed the claim on the ground that the claim was statute barred but on appeal, the Federal Court held that it was not statute barred. Hence the claim for specific performance was allowed.
In Nik Mohamed Salleh v. Tengku Besar Zabidah  1 MLJ 73
one Nik Abdul Majid who had since died held the title to a parcel of land which was sold by his heirs to the respondent. His heirs were his mother, one Nik Ti, his wife, the second defendant and his son the third defendant who entered into an agreement dated 18-11-1948 with the respondent to sell the land to the respondent. The said land was subsequently transferred to the appellant as administrator of the estate of Nik Ti. The respondent claimed specific performance of the agreement. The learned trial Judge gave judgment in favour of the respondent. On appeal before the Federal Court it fell to be determined whether the agreement was illegal because the three signatories were not the registered owners of the land. In dismissing the appeal, Azmi L.P. delivering the judgment of the Court had this to say at page 75:
“in my view, however, the said agreement may be enforced against the second defendant, third defendant and the estate of Nik Ti on the
authority of Horrocks v Rigby referred to with approval by their
Lordships of the Privy Council in Abdul Karim Basma v Weekes & Ors.
In Abdul Karim Basma v. Weekes & Ors. the plaintiff alleged that by an agreement dated 29h November 1946, the first, second and third defendants agreed to sell two houses of which they were tenants in common for Pound1,900 and that thereupon the sum of Pound 633.6s.8d was paid to each of the three defendants in full satisfaction of the purchase price. Subsequently these three
defendants purported to convey the property to the fourth defendant. The piaintiffthen claimed for specific performance of his agreement with the first three defendants. The defence was denial of this
agreement, it transpired later that the first defendant had no power to convey her interest in the land.
Their Lordships of the Privy Council in restoring the judgment of the
trial judge (Wright J) held that although the first defendant had no power to convey her interest, there were no special circumstances which would make it wrong to grant specific performance of the
contract in regard to the interests which belonged to the second and third defendants and, therefore, the plaintiff was entitled to enforce the contract against the second and third defendants so as to require conveyance to him of their two one-third shares, with
abatement of the purchase price inrespect of the interest of the first defendant.
and at p.76 concluded thus:
In my judgment the High Court was quite right in ordering specific
performance of the sale agreement. This is dear from the following passage in the judgment of the Lord Chancellor (Lord Westbury) in Hoiroyd v. Marshall:
“…….if a vendor… agrees to sell … property …of which he is not
possessed at the time, and he receives the consideration for the contract,
and afterwards becomes possessed of property answering the description
in the contract, there is no doubt that a Court of Equity would compel him
to perform the contract… For it a contract he in other respects good
and fit to be performed, and the consideration has been received, incapacity to perform it at the time of its execution will be no answer when the means of doing so are afterwards obtained.”
In Besharapan Sdn Bhd & Ors. v. Agroco Plantation Sdn Bhd & Anor  4 CLJ 878 the 2nd and 3rd appellants who were not registered proprietors entered into a sale and purchase agreement with the 2nd respondent in respect of a piece of land on 1-2-1989. The 2nd respondent subsequently sold the land to the 1st respondent in 1993. The Court of Appeal had to determine the validity of the 1989 and 1993 agreements because not being registered proprietors at the material time, the 2nd and 3rd appellants had no right or interest in the land. Ariffin Zakaria JCA (as he then was) delivering the judgment of the Court of Appeal said:
“On the above authority it is our view that even though on the date of execution of the 1989 Agreement the 2ld and 3rd appellants did not have any registered right or interest in the subject land that does not
render the agreement which is otherwise valid and enforceable to be
void or invalid. We hold that 2nd and 3rd appellants at the material time have sufficient interest in the subject land to enter into a binding agreement by which they agreed to transfer the subject land when the title or interest in the subject has been registered in their names. In other words the parties agreed that the agreement will only
become enforceable the moment the 2nd and 3rd appellants’ right or interest in the subject land is registered under the Ordinance. We find no difficulty with such an arrangement. ”
The learned judicial Commissioner was clearly wrong in holding that the respondent did not have the capacity to enter into the sale and purchase agreement and was as such null and void.
In the circumstances and for the reasons aforesaid the appeal is allowed with costs of RM30,000.00 here and below. The decision of the
High Court is set aside and judgment entered for the appellant in terms
as prayed for in the statement of claim
Dated: 31st December 2013 Signed
Linton Albert Judge, Court of Appeal Putrajaya
For the Appellant: Vincent Tey Wei Seng Messrs Jublin Tan & Tey (Advocates & Solicitors) Peguacara bagi pihak Perayu 18-1, 1st Floor, Jalan Kampung Attap 50460 Kuala Lumpur (Ruj: VT/KD/CV1027/2012)
For the Respondent : Harbhajan Kaur together with Gowri Gubbaiyah Messrs Sudesh Narinder & Partners (Advocates & Solicitors) Peguamcara bagi pihak Responden No. 73A, Jalan Maharaja Pusat Bandar Parit Buntar 34200 Parit Buntar Perak Darul Ridzuan (Ruj: L/14/SS/2013-TB(APPEAL)