IN THE COURT OF APPEAL OF MALAYSIA AT PUTRAJAYA
CIVIL APPEAL NO. N-02(NCVC)(W)-2249-10/2013
UDIYA CHANDRAN A/L SUBRAMANIAM … APPELLANT
LOO TAK LAM … RESPONDENT
[In the Matter of High Court of Malaya at Seremban, in the State of Negeri Sembilan, Malaysia Suit No. 22 NCVC-150-08/2012
Udiya Chandran A/l Subramaniam . Plaintiff
Loo Tak Lam
Abdul Wahab Patail, JCA Mah Weng Kwai, JCA Hamid Sultan Abu Backer, JCA
Date of Judgment: 21st April 2014
GROUNDS OF JUDGMENT
 The Plaintiff Udiya Chandran A/L Subramaniam (“the Appellant”) appealed against the dismissal with costs of his claim against the Defendant Loo Tak Lam (“the Respondent”).
 It was submitted for the Respondent that since: (a) there was no appeal against the dismissal of the prayer for damages for loss of the said land and special damages of RM202,000.00 for loss of income and loss of rental; and (b) the market value of the land is RM37,000.00, Rule 18(1) of the Rules of the Court of Appeal 1994 requires that the Appellant must obtain leave to appeal. Thus, because no leave had been obtained, this appeal is incompetent and ought to be struck out with costs.
 We dismissed the preliminary objection with agreed costs fixed at RM2,500.00 on the grounds that:
a. counsel for the Respondent clearly submitted that the appeal was against the whole of the decision where the whole of the claim was dismissed.
b. The Rules of the Court of Appeal 1994 provide as follows:
”1A Court or Judge shall have regard to justice -In administering any of the Rules herein, the Court or a Judge shall have regard to the justice of the particular case and not only to the technical noncompliance of any of the rules herein.”
”102. Non-compliance with Rules not to render proceedings void –
Non-compliance with any of these Rules, or with any rule of practice for the time being in force, shall not render any proceedings void unless the Court or a Judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner
and upon such terms as the Court or Judge shall think fit.”
c. The objection is, in the particular circumstances of this case, an objection based upon a technical noncompliance, a term meaning a non-compliance that does not affect the justice of the case. It is a technical non-compliance in this case because the records of appeal was complete. The Court and parties, but for the preliminary objection, were ready to proceed with the appeal. It was not shown how the non-compliance adversely affected the fair and just disposal of the appeal.
 The Appellant commenced the civil suit for, inter alia, the annulment of the transfer of the property known as PM 7, Lot 3225, Mukim Jimah, Daerah Port Dickson, Negeri Sembilan (“the property”) to the Respondent.
 The case for the Appellant was that he deposited the title deed with the Respondent for a loan of RM25,000.00 and
that the repayment of the said loan was for a period of 36 months, but discovered that the document he signed was to transfer the said property to the Respondent.
 In resisting the civil suit, the Respondent maintained that he had purchased the said property and that he had already paid the full purchase price. In resisting the Appellant’s averment that the Appellant had been paying RM1,250.00 until March 2012 when he defaulted, the Respondent maintained that the payments were a monthly rental for the property.
The High Court Decision
 The High Court summed up the Appellant’s claim as, inter alia, for the following orders:
a. That the transfer of the property from the Appellant to the Respondent be cancelled on the ground that the said transfer was obtained by deceit (penipuan);
b. That the name of the Respondent be expunged from the register and the status of the Appellant as the registered proprietor of the property be restored;
c. Damages for loss of the land; and
d. Special damages of RM202,000.00 for loss of income and loss of rental.
 The High Court arrived at its decision to dismiss the
claim as follows:
i. It is trite law that one who alleges must prove Section 101 and 103 of the Evidence Act 1950;
ii. Even if “”penipuan” is accepted as meaning “fraud”, the averment in para 19 is a general allegation which is insufficient to amount to an averment of fraud;
iii. The Appellant failed to plead fraud with sufficient clarity and particulars which is fatal to the allegation;
b. Fraud and misrepresentation:
i. From the pleadings, the misrepresentation was committed by a lady lawyer. It was never pleaded that the misrepresentation was by the Defendant. Thus, it cannot be said that the representation, when made, was by the Respondent;
ii. The lawyer’s firm was not made a party to the case;
iii. Appellant did not call the lawyer as a witness, and invoked the adverse presumption under section 114 (g) of the Evidence Act 1950;
iv. The Appellant failed to prove the allegation of fraud upon the standard of beyond reasonable doubt.
c. Blank Forms:
i. The conduct of the Appellant shows that he was negligent and failed to exercise reasonable care in executing the blank forms.
ii. Not only did the Appellant execute the SPA and Borang 14A, he also signed Form CKHT 1A and CKHT 3, informing the Income Tax Department that he was disposing the land in question.
d. Loan Agreement:
i. As far as the loan agreement/documents is/are concerned, there is none produced before this court. Therefore, the Appellant cannot deny his liability under the documents which he had executed, according to what was stated.
e. Indefeasibility of Title:
i. Since the Appellant failed to prove fraud, the indefeasibility of title of the Respondent has not been defeated.
f. Non eviction by the Respondent:
i. The Respondent had answered by saying that he had been advised by his solicitor not to commence any action to evict the Plaintiff from the land. That action of eviction can be filed after the action herein is disposed.
ii. As far as the Application for caveat is concerned, that can be done at any time to the Land Administrator pursuant to section 326 of the National Land Code 1965.
 We allowed the appeal with costs, set aside the order of the High Court, entered judgement in terms of prayers A, B, C and D, and fixed costs in the sum of RM30,000.00 here and below.
 Our reasons are as follows:
a. The grounds of judgment are fundamentally to explain to the party who lost his case. It may be the Plaintiff whose claim is dismissed or the Defendant against whom judgment was entered. That being the case, the reason that “As far as the application for caveat is concerned, that can be done at any time to the Land Administrator pursuant to section 326 of the National Land Code 1965.” has no place in the grounds for judgment dismissing the Appellant’s claim and where the Respondent has already entered upon the register of titles as the registered proprietor of the property;
b. That the transfer was disputed and eviction could be applied for at any time does not explain why no application to evict, as would be consistent with the Respondent’s stand that he had purchased the property and had paid in full, was taken;
c. The reasoning that “As far as the loan agreement/documents is/are concerned, there is none
produced before this court. Therefore, the Appellant cannot deny his liability under the documents which he had executed, according to what was stated.” overlooks the core of the Appellant’s case that he deposited his title as security and signed the documents in blank for the purpose of a loan, and not sale and purchase and not documents associated with a sale and purchase. The Appellant could not be expected to produce any loan agreement therefore.
d. The reasoning as to the use of blank forms relied upon authority that the party who signed the blank forms is bound by the terms contained therein, and failed to consider that in this case the issue is that the Appellant understood the blank forms he signed to be used for a loan agreement.
e. As to evidence of fraud and misrepresentation, the High Court “invoked” the adverse presumption for the failure to call the “lady lawyer” that he could not identify. Section 114(g) of the Evidence Act gives the
High Court the discretion as to whether or not to draw an adverse inference. Nothing in the grounds explain why it is fair and just to exercise the discretion in favour of drawing an adverse inference. In our view if the witness is available and he could have called but did not, then it is fair and just to draw an adverse inference. But if he did not know, or could not find the witness, these explain why he did not call and that it is unfair and unjust in the circumstances to draw an adverse inference;
f. In holding that the representations were by the lady lawyer and not the Respondent, the High Court failed to appreciate that the alleged misrepresentation was by a lawyer to obtain signatures on documents that were for the benefit of the Respondent as a sale and purchase and to transfer the property to the respondent. It was pleaded:
”6. Pada hari tersebut.seorang perempuan
… sebagai peguamcara memaklumkan
kepada Plaintiff… untuk menandatangan beberapa dokumen kosong tanpa menasihati
”7. …. Pada masa berkenaan peguamcara tersebut memaklumkan kepada Plaintiff bahawa tujuan mendepositkan Geran Asal tersebut kepada defendan adalah sebagai sekuriti untuk memastikan pembayaran semula wang pinjaman tersebut oleh Plaintif kepada defendan, justeru itu, atas pemahaman tersebut Plaintiff telah mendepositkan Geran Asal tersebut kepada Defendan di Pejabat peguamcara tersebut. ”
g. The High Court failed to consider the germane question whether the misrepresentation was in fact made. Instead, it relied wrongly upon an adverse presumption, and took the adverse presumption further to hold there was no necessity to call Mr. Philip Yeow, the lawyer who attested the Borang 14A:
“There is no necessity for the Defendant to call Mr. Philip Yeow as the Plaintiff had signed the SPA, Borang UA, CKHT 1A and GKHT 3. The Defendant did not allege anything against the Plaintiff. It was the Plaintiff that alleged that there was misrepresentation by a “lady lawyer”, who was not called as a witness which is detrimental to the case of the Plaintiff.”
h. Clearly, the High Court overlooked that it is the Respondent who maintains that the transaction was a sale and purchase and the monthly payments by the Appellant was rental of the property.
i. “Penipuan” is a word that encompasses
misrepresentation, cheating and fraud, but the use of the term, in conjunction with the assertions providing particulars at paragraphs 4, 6, 7, 8, 9, 10, 14, 15, 16 of the Statement of Claim, read in conjunction with the orders sought and the fact the Respondent has become
the registered proprietor, means that the term “penipuan” was used in its meaning as “fraud”.
 With respect, the reasoning in the grounds of judgment of the High Court missed the forest for the trees. The Appellant’s claim was based on the assertion of facts that he had sought a loan of RM25,000.00, had obtained it from the Respondent and to whom he was making repayments of RM1,250.00 per month from until March 2012 when he faced difficulties to make payment.
 The Appellant had asserted that he –
a. had found a buyer in May 2012, but when approached the Respondent to return the Certificate of Title to enable the sale, the latter refused and demanded RM55,000.00;
b. had found on or about 14 May 2012 from the Pejabat Tanah Daerah Port Dickson, Negeri Sembilan, that the
property had been transferred on 24.2.2011 to the Respondent.
 The defence by the Respondent was:
a. the Respondent bought the property from the Appellant for the sum of RM25,000.00;
b. the Appellant had deposited the title with Tetuan Yeow Toh & Associates;
c. the Appellant signed the Borang 14A;
d. at the same time, the Appellant rented the property from the Respondent at RM1,250.00;
e. the Appellant defaulted in rental payment since March 2012; and
f. the Respondent had no knowledge of the Appellant going to New Zealand to work.
 At first sight we were inclined to agree with the High Court. On closer examination, we realised that the defence assertion of having no knowledge that the Appellant went to work in New Zealand is no answer to the Appellant’s assertion that he went to work in New Zealand. The evidence produced before the High Court supported the Appellant’s assertion he went to work in New Zealand. This, the High Court failed to take into consideration. Had the High Court taken this into consideration, it would be led to question the Respondent’s version that there was a sale and purchase and the Appellant rented back the property from the Respondent. If one were to believe it, the Respondent’s version is that it was unimportant if the Appellant was on the property. If the Appellant had to sell the property and went to New Zealand, there was no reason to rent it back at a substantial rent of RM1,250.00 considering the sale and purchase at RM25,000.00.
 Furthermore, accepting that monthly payments were RM1,250.00, then over 36 months it would amount to RM45,000.00. If RM1,250.00 is taken for rental of the RM25,000.00 property, it amounts to 5% of the property value
per month or 60% per year. Another way of looking at it is that payment at RM1,250.00 per month means the RM25,000.00 purchase price is recovered in 20 months of such rental. On such lucrative terms, it defeats reason why no rental agreement was signed. In our view, the transaction was by no means a sale and purchase and a rental back. The terms were consistent with a loan for a specific term. This supports the Appellant’s version that it was a loan agreement for 36 months. That being so, the registration of a transfer through forms signed in blank, while the Appellant was led to believe the documents were for a loan, was clearly a fraud.
 Accordingly, we allowed the appeal, and made the orders set out at paragraph 9 above.
(DATUK ABDUL WAHAB BIN PATAIL) Judge
Court of Appeal of Malaysia Putrajaya
Dated: 26th January 2015
For the Appellant:
For the Respondent:
Ms. Ellen Cheran
Messrs Veera & Co.
No. 57-2, 2nd Floor, Jalan Haruan 5/2 Oakland Commercial Centre 70200 Seremban Negeri Sembilan
Mr. V. Ganesalingam
Messrs Ganesalingam Vijayaratnam
& Aisha Jothilingam
No. 36, 1st Floor, Jalan Pasar Baru
71000 Port Dickson