Paramjit Singh A/L Mohindar Singh V Mohindar Sdn Bhd

  

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DALAM MAHKAMAH RAYUAN MALAYSIA

 

(BIDANG KUASA RAYUAN)

 

RAYUAN SIVIL NO: P-02(IM)-2278-09/2011 RAYUAN SIVIL NO: P-02(IM)-2279-09/2011

 

ANTARA

 

PARAMJIT SINGH A/L MOHINDAR SINGH … PERAYU

 

DAN

 

MOHINDAR SDN BHD (NO.SYARIKAT: 252912-A) …RESPONDEN

 

(Dalam Mahkamah Tinggi Malaya Di Pulau Pinang Saman Pemula No.24-1941-2008)

 

Di dalam Perkara Aturan 7 Kaedah-Kaedah Mahkamah Tinggi 1980

 

DAN

 

Di dalam perkara penyimpanan wang pampasan ke dalam Mahkamah di bawah Seksyen 29(2) Akta Pengambilan Tanah No. 34 Tahun 1960.

 

DAN

 

Di perkara pengambilan tanah berkenaan lot-lot 1562 (GM 746), 440 (GM 29), 1566 (GM 8), 1564 (GM 97), dan (GM 748) Mukim 12, Daerah Barat Daya, Pulau Pinang

 

DAN

 

Di dalam Perkara Kaedah-Kaedah Mahkamah Tinggi 1980

 

DAN

 

Notis Awad dan Tawaran Pampasan [Borang H] bertarikh 15.12.2008

 

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ANTARA

 

PENTADBIR TANAH DAERAH BARAT DAYA,

 

PULAU PINANG … Pemohon

 

DAN

 

PARAMJIT SINGH A/L MOHINDAR

 

SINGH (NO. K/P: 4888503) … Defendan

 

CORAM

 

MOHD HISHAMUDIN BIN MOHD YUNUS, JCA CLEMENT SKINNER, JCA ALIZATUL KHAIR BINTI OSMAN KHAIRUDDIN, JCA

 

GROUNDS OF DECISION

 

[1] These two appeals were heard together as the decision being appealed against, namely, that of the High Court Pulau Pinang, was given in the same Originating Summons proceedings.

 

[2] After hearing the parties we unanimously allowed the appeals and made the following orders:

 

(1) The decision of the High Court Pulau Pinang made on 17.4.2011 and 18.8.2011 are set aside;

 

(2) Paramjit Singh a/l Mohindar Singh is to file a writ action to claim the compensation monies paid into court, naming the Land Administrator and Mohindar Sdn Bhd as defendants; and the latter may file a counter-claim in the action claiming

 

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for payment to it of those monies. Alternatively, Mohindar Sdn Bhd, instead of filing a counter-claim, may file a writ action claiming for the compensation monies paid into Court and naming Paramjit Singh a/l Mohindar Singh and the Land Administrator as the defendants;

 

(3) If separate actions are filed, the suits are to be consolidated for hearing;

 

(4) Each party to bear its own costs in these appeals.

 

[3] We now give our reasons for making the above orders. First, the brief facts. In 2008 the authorities in Penang compulsorily acquired some 5 parcels of land, one of which was Lot 1566 (GMS) Mukim 12, Daerah Barat Daya Pulau Pinang (the said land). The said land was initially owned to the extent of 5/10 undivided shares by the late Mohindar Singh s/o Sunder Singh who had 5 sons and 3 daughters. Mohindar Singh subsequently transferred his 5/10 undivided share in the said land as follows:

 

(i) Dr. Harjan Singh @ Harcharan Singh 1/10 undivided share

 

(ii) Harpal Singh @ Harpal Singh Dillon 2/10 undivided share

 

(iii) Paramjit Singh 2/10 undivided share

 

[4] It is not disputed that in December 2008 when the Land Administrator Daerah Barat Daya, Pulau Pinang awarded the sum of RM 882,850.00 as compensation for the acquisition of the 2/10 undivided share of the said land, the 2/10 share was registered in the name of Paramjit Singh i.e. the Appellant in these appeals. By way of an ex-parte Originating Summons 24-1941-2808 the Land Administrator

 

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applied for and was granted an order to pay the RM 882,850.88 into Court (the said compensation money).

 

[5] On 21.1.2010 a company called Mohindar Sdn Bhd (the Respondent) filed a Summons in Chambers applying to intervene and for the compensation money to be paid to it. The affidavit in support was affirmed by Harpal Singh Dhillon. The Respondent’s application for payment out forms Encl 28.

 

[6] On 3.3.2010 the Appellant filed a Summons in Chambers (Encl 42) for payment out to him of the compensation money as registered proprietor of the 2/10 undivided share in the said land.

 

[7] The basis of the Respondent’s application for payment out of the compensation money to it is that the Appellant is allegedly holding the 2/10 undivided share in the said land as a “bare trustee” for the Respondent. This is strenuously denied by the Appellant.

 

[8] The Record of Appeal shows that there was a series of some 10 affidavits filed in these proceedings, with some 5 affidavits filed on behalf of each party. It is plain for us to see from a reading of these affidavits that the Respondent’s contention that the Appellant is a bare trustee holding the 2/10 undivided share in the said land for the benefit of the Respondent is founded on an allegation that the Appellant had sold his 2/10 undivided share in the said land to the Respondent. According to the Respondent this sale is allegedly evidenced by three agreements. They are an agreement dated 25.12.1992 (the 1st Agreement) made between the 5 male children of the family; another

 

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agreement dated 1.5.1994 (the 2nd Agreement) made between the Respondent and the 5 male children of the family and a Deed of Family Arrangement dated 5.6.1999 (the 3rd Agreement).

 

[9] However, through his affidavits the Appellant challenged the Respondent’s right to rely on the 1st Agreement as the Respondent was not even a party to the agreement although the agreement does make reference to a company to be formed. Further the Appellant alleges that the 1st Agreement has been terminated and not followed by the parties to the same. The Appellant alleged that under the 1st Agreement he and another brother, Ranjit Singh ought to be paid RM

 

100,000.00 and RM 90,000.00 respectively within 3 months of the date of the 1st Agreement i.e. 25.12.1992 but this was not done.

 

[10] As regards the 2nd Agreement the Appellant averred that initially there was a proposal to develop the lands co-owned by the male children of the family through the Respondent company but the Appellant did not want to be part of that proposal so the 2nd Agreement was entered into to settle the co-ownership issue. Under the 2nd Agreement dated 1.5.1994, the essential terms were that:

 

(a) Appellant would take a property identified as the Jalan Sungai Pinang Property and withdraw from the Respondent as a shareholder and Director;

 

(b) The Appellant was also to transfer in 1/5 share in the properties identified as the Bishop Street Land, the Perak Road Land and the Sungai Nibong Land as well as his 2/10 undivided share in the Airport Land (which is the said land in this case);

 

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(c) The Appellant would be paid RM 100,000/- which, after

 

deducting an initial payment of RM 5,000.00 the balance of RM 95,000.00 was to be paid to the Appellant within 4 months from the date of extraction of the Letters of Administration of the Estate of the late Mohindar Singh, deceased after setting-off amounts due from the Appellant to the family.

 

[11] The Appellant alleges that he has not been paid the balance of RM95,000.00 even though Letters of Administration has been granted to the Estate of his late father on 23.8.1994. Further, he has since May 1996 executed all transfer documents in respect of those properties which he was required to transfer but has yet to be paid the balance sum.

 

[12] The Appellant’s allegations are denied by the Respondent who through the affidavit of Harpal Singh aver that the Estate of Mohindar Singh has settled the liabilities of the Appellant in excess of RM

 

100.000. 00 and that the Appellant allegedly owes the Estate of Mohindar Singh a sum of RM 156,000.00. Mr Harpal Singh’s averments are based on 2 letters. The first is a letter dated 7.5.1997 written by the Respondent to the Appellant’s solicitors which says that based on a letter from the Estate of Mohindar Singh & Peritam Kaur, the Appellant owed the Estate a sum of RM 251,000.00 which after deducting the RM 95,000.00 due to the Appellant, a sum of RM

 

156.000. 00 is still due from the Appellant to the Estate of Mohindar Singh. The second letter is a letter dated 5.5.1997 written on a letterhead of “Estate of Mohindar Singh & Peritam Kaur”, setting out details

 

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of how the Appellant owes the Estate of Mohindar Singh RM

 

251,000.00. This letter was allegedly signed by Harpal Singh as “CoAdministrator”.

 

[13] The Appellant in his affidavit of 25.2.2010 challenged the authenticity of the first letter dated 7.5.1997, in that, it was not signed by any of the 4 Directors of the Respondent at the material time i.e. Harjan Singh, Harpal Singh, Sawarnjit Singh and Ranjit Singh. As regards the second letter of 5.5.1997, the Appellant averred that he denies the contents of the letter. The Appellant also averred that he was one of the Administrators of both the Estate of Mohindar Singh and Estate of Peritam Kaur but he denied the existence of such a letter-head for the Estates. He further alleges that the address of the above Estates have been at Penang but the letter-head referred to bears an address at “CPO 12755, 50788 Kuala Lumpur,” which according to the Appellant is that of Harpal Singh and not that of the Estates mentioned.

 

[14] With regard to the 3rd Agreement, the Appellant pointed out that it was an agreement between not only the 5 sons but also the daughters of Mohindar Singh, but the Respondent was not a party to this agreement. Further, the Appellant pointed out that this agreement was not in respect of the properties which were co-owned by the male children of Mohindar Singh. The Appellant also drew attention to the fact that whilst the last preamble of this agreement recites that the Appellant agrees that all monies due to him under the 1994 Agreement have been paid to him “in this Agreement”, clause 13.1 of “this Agreement” i.e. the 3rd Agreement states that a sum of RM 225,215.00 is payable to the Appellant (as the Fifth Party) by the Estate of

 

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Mohindar Singh (described as the “intestate” in the agreement), which sum was to be paid to the Appellant within 3 months from the date whom the monies due to the Estate are received. According to the Appellant the sum of RM 225,215.00 was not paid at all to him. Even further still the Appellant pointed out that in the Affidavit affirmed by Harpal Singh on behalf of the Respondent on 14.7.2009, he expressly admitted that there is still a sum of RM 20,000.00 due and owing to the Appellant, but the Appellant says the amount owed to him is in fact much more as the RM 225,215.00 was not paid to him in full.

 

The High Court decision

 

[15] When the competing applications came up for hearing before the learned High Court Judge, the Appellant raised as a preliminary point the inappropriateness of the Court proceeding to decide the contested issue of who had a better right to the compensation monies by way of affidavit evidence filed in support of a Summon-in-Chambers. The Appellant urged the learned Judge to follow the then recent decision of the Court of Appeal in Ung Goh Guan & Anor v Chan Eng Hooi (as the executor of the Chan Chin Kui, deceased) & Ors [2011] 4 MLJ 585 which was also a case concerning payment out of compensation monies that had been paid into Court by the Land Administrator on an ex-parte application. The Headnotes indicate that it was held:

 

“(1) When the land administrator made payment into Court, all proceedings under the ex-parte application under s 29 of the Land Acquisition Act 1960 came to an end and there were no live issues to be litigated with the land administrator. Any dispute as to the entitlement of the monies in Court between the parties, not involving the land administrator, must be determined by separate and distinct civil proceedings instituted by the rival claimants to establish their rights to the same. Thereafter, upon their legal or equitable rights being resolved or determined, the successful claimant should move the Court for payment out of the money.

 

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As such, the proceedings before the High Court in determining the rights of the parties to the money paid into Court as the compensation award by the land administrator were clearly flawed and inherently irregular as they could occasion a serious miscarriage of justice;

 

(2) They were serious disputes of fact and law that should be properly tried in a full trial.”

 

[16] After hearing the parties the learned High Court Judge declined to follow Ung Goh Guan (supra) on the ground that it was distinguishable on its facts, in that, whereas the Court of Appeal had found that the facts in the case there were seriously in dispute and therefore a full trial was warranted, the same was not so in this case where the Respondent had purchased the Appellant’s 2/10 undivided share in the said land. The learned Judge also relied on Ord 2 r 3 of the then Rules of the High Court in dismissing the preliminary point raised by the Appellant.

 

[17] With regard to the application proper, the learned High Court Judge, after setting out the basis of the Respondent’s claim to the compensation monies, held as follows:

 

“[11] Pun begitu, isu di hadapan mahkamah ini ialah samada responden telah menjualkan bahagian 2/10 tak dipecah milik beliau tersebut kepada responden kedua.

 

[12] Mahkamah berpendapat, setelah menembangkan semua kertas-kertas kausa terlibat dan dokumen-dokumen eksibit komtemporari yang dilampirkan, telah terdapat pelepasan milikan oleh responden pertama yang melibatkan bahagiannya kepada responden kedua dan responden pertama telah menerima balasan bernilai bagi pelupusan bahagiannya itu.”

 

[18] The learned High Court Judge then allowed the Respondent’s application for payment out (Encl 28) and dismissed the Appellant’s application for the same (Encl 42). Hence these two appeals.

 

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Our decision

 

[19] In our view it was inappropriate for the High Court to decide on the critical issue before it by way of interlocutory proceedings (summons in chambers). We say so because the critical issue of whether the Appellant was or was not a bare trustee is a mixed question of law and fact, but the facts and the documents which the Respondent relies upon to constitute the Appellant as a bare trustee in law is seriously disputed by the Appellant for the reasons indicated earlier.

 

[20] The law relating to when a vendor becomes a bare trustee for the purchaser of land was discussed by the Federal Court in Borneo Housing Mortgage Finance Bhd v Time Engineering Bhd [1996] 2 MLJ 12. In that case the Federal Court held that it is not a correct description of the relationship between the parties to a contract of sale and purchase of land to say that from the time the contract was concluded, the vendor is a trustee for the purchaser because, at that stage, they are only parties to a contract of sale and purchase which a Court may, in certain circumstances, decree specific performance. The Federal Court held at page 29:

 

“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.”

 

[21] Reverting to the facts of this case, the Respondent claims to have purchased the Appellant’s 2/10 undivided share in the said land and

 

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relied on 3 agreements to establish its case that the Appellant had become a bare trustee of that share for the Respondent, but the affidavit evidence shows that the Appellant denies having been paid the full purchase price timeously and it seems the Respondent admits that some RM 20,000.00 still remains unpaid even though the Appellant says the amount remaining unpaid is much more than that. Even further still the Appellant denies that the Respondent was a party to the 1st and 3rd Agreement or that the 1st Agreement is still valid. In his grounds of judgment, the learned Judge did not seem to address the issue of whether the Appellant had indeed become a bare trustee of the undivided share in the land and at what point in time this occurred. See the Federal Court decision in Borneo Housing Mortgage Finance Bhd (supra). Without having made such a finding we do not see how it was possible for the High Court could arrive at the decision which it did. And it is our view that it was only possible to arrive at such a finding after a full investigation of the facts at a trial.

 

[22] We therefore agree with the decision in Ung Goh Guan (supra) that the dispute as to the entitlement to the compensation monies paid into Court should be determined by separate and distinct civil proceedings instituted by the rival claimants to establish their rights to the same.

 

[23] It was for the above reasons that we allowed the appeal and made the orders earlier mentioned in this judgment.

 

[24] The Respondent submitted that we should not follow Ung Goh Guan as there is nothing in section 43, 44 and 45 of the Land

 

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Acquisition Act 1960 requiring fresh proceedings to be instituted to obtain a payment out of the compensation monies. We find no merit in this contention. As we indicated earlier it is inappropriate to decide the rival claims of the parties by affidavit evidence on a Summon-in-Chamber application. Separate and distinct proceedings brought for the purpose is more appropriate.

 

[25] The Respondent also referred us to such authorities as the Privy Council decision in Pegang Mining Co. Ltd v Choong San & Ors [1969] 2 MLJ which was a case involving the right to intervene in proceedings; and Menteri Besar Negeri Sembilan {Pemerbadanan) v Pentadbir Tanah Daerah Seremban & Anor [1995] 3 MLJ 710 (CA) which concerned the issue whether the appellant there was a person interested in the land under acquisition and therefore entitled to intervene to object to the amount of compensation awarded; and system Penyurian Trafik KL Barat Sdn Bhd v Kenny Heights Development Sdn Bhd & Anor [2009] 4 CLJ 57 which concerned whether the appellant there could intervene in a land reference in which the Respondent there objected to the quantum of compensation awarded. We did not find these authorities of any assistance to the Respondent here as the critical issue in this case is not one of intervention but of who had a better right to the compensation monies paid into Court.

 

DATUK CLEMENT SKINNER Judge

 

Court of Appeal, Malaysia

 

Dated: 1st October 2013

 

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PARTIES:

 

For Appellant : Mr M. Kanesan Messrs M. Kanesan & Associates Advocates & Solicitors, Pulau Pinang

 

For Respondent : Dato’ V. Muthusamy Messrs V. Muthusamy & Associates Advocates & Solicitors Butterworth.

 

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