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2011 MarsdenLR 1597
COURT OF APPEAL, PUTRAJAYA
ONG AH TANG & ANOR – Appellant
Versus
SOH BEE YONG – Respondent
[Civil Appeal No: J-02-862-2007]
The court emphasized that the administrator's duty is to act in the best interests of all beneficiaries when dealing with the estate, and found the High Court's order for a private sale legally unsustainable.
Headnote:(A) Distribution Act 1958 - Probate and Administration Act 1959 - Dispute regarding administration of the estate of a deceased individual. The appellants, as joint administrators, sought to sell the lands through public auction, while the respondent desired to purchase them. The High Court dismissed the application for sale by auction and ordered the sale to the respondent instead. The court found that the judge exceeded his authority in ordering the sale to the respondent and acted contrary to the wishes of the majority of beneficiaries. The ruling affirmed that the courts must protect beneficiaries' interests and ensure that property sales are conducted in the best interest of the estate. (Paras 8, 10)
Facts of the case:
The appellants, administrators of the deceased estate and beneficiaries, sought an order for sale of two properties by public auction, while the respondent wished to purchase them directly. An application was filed after a verbal offer to purchase the lands was ignored. Consent was obtained from six other beneficiaries, but the respondent opposed the application.
Findings of Court:
The court found that the High Court overstepped its bounds in ordering a private sale to the respondent and failed to ensure the best price for the estate.
Issues: Whether the High Court acted beyond its authority in directing sale to the respondent rather than allowing a public auction.
Ratio Decidendi: The court ruled that the High Court's decision was legally unsustainable, emphasizing the need for transparency and protection of beneficiary interests when administering an estate.
Result: Appeal allowed; the order for sale to the respondent set aside, and the lands to be sold by public auction.
[1] This is a dispute between the administrators over the administration of the estate of Soo Wan Yau @ Soh Get Swee ('deceased') involving two pieces of land held under CT No 1655, Lot 3454 and Grant No 14271, Lot 2211, in the township of Bandar Maharani, Muar, Johor ('the lands').
[2] The appellants (plaintiffs in the court below) and the respondent are joint administrators of the deceased estate. The letters of administration were granted to them by the High court, Muar on 16 April 1979.
[3] They are also parties who have interests in the said lands. The first appellant is the deceased's lawful wife while the second appellant and the respondent are the deceased's children. The document of titles are with the respondent who had been in occupation of the said lands for years.
[4] The appellants preferred to sell the lands by way of a public auction and distribute the proceeds of sale of the lands among the beneficiaries in accordance with the Distribution Act 1958, after deducting the costs and related expenses. There was a verbal offer to the appellants to purchase the said lands for a sum of RM713,510.00. On 7 October 2004 the appellants, through their solicitors wrote to the respondent giving him the first option to purchase the lands at RM713,510.00, failing which they would apply to the High court to sell the lands by public auction. Based on valuation reports in May 2005, the market value of Lot 2211 and Lot 3453 in May 2005 was RM224,000. 00 and RM252,000.00 respectively. There was no response from the respondent to the letter from the appellants' solicitors.
[5] As the matter could not be resolved and had derailed the administration of the deceased's estate, the appellants filed an application by way of an Originating Summons at the Muar High court for an order,inter alia, that the lands be sold by public auction and that the proceeds of the sale of the lands be distributed among the beneficiaries in accordance with the Distribution Act 1958.
[6] Six other children of the deceased have given their written consent to the application and agreed that the lands be sold by public auction. Two adopted children of the deceased, who were also named as beneficiaries, did not give their written consent to the application but they did not file any affidavit in opposition to the application.
[7] The respondent however opposed the application on the ground that he had been in occupation of the lands for years and that he wanted to buy the lands himself. He is still in occupation of one of the said lands. He had made known his intention to the appellants. There was however no response from the appellants. The respondent had even made an offer, through his solicitors, to purchase the lands at a total price of RM480,000.00, which was above the market value of the said lands but this was rejected by the appellants, as they believed that the lands could fetch a higher price if sold by way of public auction.
[8] On 17 July 2007 the learned judge dismissed the appellants' application on the ground, among others, that there was no concrete proof that there was an offer to purchase the lands at RM713,510.00. That was not the end of the matter. The learned judge went a step further by ordering the appellants to sell the lands to the respondent at a total price of RM480,000.00 and to execute the memorandum of transfer in Form 14A within three months of the said order and that the sale proceeds be divided among the beneficiaries. Being dissatisfied, the appellants appealed to this court against the order directing them to sell the lands to the respondent rather than ordering the lands to be sold by public auction.
[9] The appellants contended that the learned judge went beyond the scope of their application by ordering the lands to be sold to the respondent rather than ordering the lands to be sold by public auction.
[10] We agree with the appellants that the learned judge, having dismissed their application for an order of sale of
