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2020 MarsdenLR 396
HIGH COURT SABAH & SARAWAK SANDAKAN
WONG KIEN CHING & ORS – Appellant
Versus
RIA REALITI SDN BHD & ORS – Respondent
[Originating Summons No: SDK-24NCVC-3-2-2019]
Ownership claims resulting from illegal transactions under the Sabah Land Ordinance are unenforceable, reaffirming statutory intent against illegal dealings.
Headnote:(A) Sabah Land Ordinance – Section 17 – Native titled land – Originating summonses addressing legality and transfer of native titled lands – Court dismissed both applications due to contravention of statutory provisions – The 1st Plaintiff's ownership was deemed illegitimate based on a previous ruling of illegality – The question of rightful ownership left unresolved due to the complexity of involved parties. (Paras 1-2, 41-50, 60-70)
Facts of the case: The case involved two originating summons regarding native titled lands, with the plaintiffs claiming ownership after an illegal sale. The court previously found these transactions illegal under section 17 of the Sabah Land Ordinance. (Paras 1-6)
Findings of Court: The court determined that the unlawful dealings could not lead to property retention by the 1st Plaintiff and subsequently dismissed claims for declarations of ownership. (Paras 50-71)
Issues: Whether the 1st Plaintiff could retain ownership of the lands despite a finding of illegality in transactions leading to that ownership. (Paras 1-2)
Ratio Decidendi: The court held that to recognize ownership claimed through illegal transactions would undermine legislative intent and public policy, aligning with previous case law rejecting illegal ownership claims. (Paras 60-70)
Result: Both originating summonses dismissed with costs.
JUDGMENT
Introduction
[1] These 2 Originating Summonses posed a novel issue, namely the following-
"Consequent to a finding by the court that the sale and or transfer of a native titled land to a native nominee was illegal for being in contravention of s 17 of the Sabah Land Ordinance ("the Ordinance"), whether the native nominee is entitled to retain "ownership" of the said native titled land and if not, to whom shall the ownership of the said land belong to?"
[2] Both Originating Summonses were heard together and on 30 October 2020, this court dismissed the applications with costs. The Plaintiffs have respectively filed a notice of appeal in each of the Originating Summonses.
[3] I now provide my grounds for the said dismissals.
[4] Unless specified otherwise, the following references shall be used in these grounds:
(i) Originating Summons No SDK-24NCVC-3-2-2019 ("O/S 3/2");
(ii) Originating Summons No SDK-24NCVC-5-2-2019 ("O/S 5/2");
(iii) Both Originating Summons No(s). SDK-24NCVC-3-2-2019 and SDK-24NCVC-5-2-2019 (collectively as "the OSs");
(iv) Rasamutu Sdn Bhd (in liquidation) ("Rasamutu");
(v) Ria Realiti Sdn Bhd (in liquidation) ("Ria Realiti");
(vi) Both Rasamutu and Ria Realiti (collectively as "the companies");
(vii) The 3rd, 4th and 5th Defendants in OS 3/2 and the 2nd and 3rd Defendants in OS 5/2 ("the minority shareholders");
(viii) Public Bank Berhad ("the Bank"); and
(ix) The 6th, 7th and 8th Defendants in OS 3/2 and the 4th and 5th Defendants in OS 5/2 ("the nominal defendants").
Background Facts
The Subject-Matter Of The OSs
[5] The OSs concerned the following lands:
(i) In OS 3/2 - 224 Native Titles situated at Sungai Sugut, in District of Beluran, Sabah ("the 224 NT lands"); and
(ii) In OS 5/2 - 208 Native Titles situated at Lingkabau, in District of Labuk/Sugut, Sabah ("the 208 NT lands").
[6] Unless specified otherwise, the 224 NT lands and 208 NT lands shall hereinafter be collectively referred to as "the NT lands".
[7] The 1st Plaintiff became the registered owner of the NT lands between 22 July 205 to 10 November 2008, having been nominated by the companies as such.
The Parties
[8] The 1st Plaintiff in both the OSs was the managing director of the companies until Ria Realiti was wound up on 15 April 2016 and Rasamutu on 4 May 2016. The 1st Plaintiff was also a shareholder in the companies.
[9] The rest of the plaintiffs in the OSs were shareholders in the companies.
[10] The liquidators appointed for the companies are the same 2 individuals, Shanmughanathan a/l Vellanthurai and Wan Idris Bin Wan Ibrahim.
[11] The Bank is a holder of a third party charge over the 224 NT lands.
[12] The 3rd, 4th and 5th Defendants in OS 3/2 and the 2nd and 3rd Defendants in OS 5/2 were also shareholders in the respective companies.
[13] The 6th, 7th and 8th Defendants in OS 3/2 and the 4th and 5th Defendants in OS 5/2 were sued as nominal defendants.
Relevant court Proceedings
Winding-Up Petitions No(s). 28-1-1-2012 and 28-2-1-2012
[14] The companies were wound up on 15 April 2016 and 4 May 2016 respectively upon two separate winding-up petitions filed by the respective minority shareholders.
[15] Justice Datuk Douglas Cristo Primus Sikayun who presided over the winding-up petitions, inter alia, held that the dealings which led to the 1st Plaintiff being registered as the owner of the NT lands had contravened s 17 of the Ordinance were illegal. His Lordship further held that the said finding of illegality destroyed the substratum of the companies and therefore, it was just and equitable that the companies be wound up. However, his Lordship expressly refrained from making any consequential orders thereto.
[16] The Bank filed an appeal against the decision by the winding-up court but was out of time and its application for an extension of time was also dismissed. The Bank also filed an application to expunge the written ruling by Justice Datuk Douglas Cristo Primus Sikayun but the application was dismissed on 9 February 2018.
