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2021 MarsdenLR 4009
COURT OF APPEAL PUTRAJAYA
WAN NOOR KAMARIAH WAN JAAFAR – Appellant
Versus
ARITAH REALTY SDN BHD & ORS AND OTHER APPEALS – Respondent
[Civil Appeal Nos: W-01(NCVC)(W)-654-11/2018 W-02(NCVC)(W)-2322-11-2018 W-02(NCVC)(W)-2325-11-2018 W-02(NCVC)(W)-2347-11-2018 & W-02(NCVC)(W)-2348-11-2018]
Ezzan Ali
Beneficial ownership arises from full payment for property despite lack of formal title, with conflicting transfers deemed void due to fraud.
Headnote:(A) National Land Code 1965 – Section 340 – Competing claims over property – Allegations of fraud and illegality in the transfer of property from Aritah Realty to Munir & Sons – Court concluded that appellants, having fully paid for the unit lots, maintained beneficial ownership rights despite lack of strata title – The court found the sale transaction void ab initio due to lack of lawful authority and fraud. (Paras 21, 25, 30, 40)
(B) Beneficial Ownership – Court ruled that beneficial ownership arises upon full payment for the property even without formal registration, aligning with principles set in case law. (Paras 25, 28)
Facts of the case: The appellants purchased unit lots in Wisma Aritah from Aritah Realty over 20 years ago. Aritah Realty fraudulently sold the entire property to Munir & Sons, prompting legal action from the appellants to assert their ownership rights. (Paras 1-10)
Findings of Court: Court found in favor of the appellants, declaring the transfer to Munir & Sons void and affirming the appellants’ position as beneficial owners. (Paras 34, 43)
Issues: The main issues centered on whether the appellants could claim beneficial ownership despite the absence of a strata title and the implications of the alleged fraudulent conduct by Aritah Realty. (Paras 20, 34)
Ratio Decidendi: Court affirmed principles of beneficial ownership, stipulating that despite not holding a strata title, the appellants maintained ownership rights through full payment, deeming Aritah Realty a bare trustee. (Paras 25, 36)
Result: Appeals allowed, decision of the learned Judicial Commissioner set aside, judgment entered for appellants. (Paras 43)
JUDGMENT
Introduction
[1] These five appeals is concerned with competing ownership claims over a few units of residential and shop lots (unit lots) erected on 4 ½ storey building known as Wisma Aritah held under the master title GRN No 76881, Lot 144 Seksyen 41 (previously held under QTR 753, Lot 1404), Bandar Kampung Bharu, Kuala Lumpur (Wisma Aritah). Aritah Realty Sdn Bhd is the registered proprietor of Wisma Aritah. In the early 1980s to 1990s, Aritah Realty sold the unit lots to the appellants (plaintiffs). Sometimes in 2016, the appellants discovered that Aritah Realty had sold and transferred the entire Wisma Aritah including the unit lots purchased by the appellants to Munir & Sons (M) Sdn Bhd The master title of the land on which Wisma Aritah stood was currently registered in the name of Munir & Sons (M) Sdn Bhd and charged to Small Medium Enterprise Development Bank Malaysia Berhad as security for the loan granted to Munir & Sons (M) Sdn Bhd.
[2] Aritah Realty contended the sale of Wisma Aritah to Munir & Sons was without any lawful authority and the result of fraud committed by one of the director of Aritah Realty named Zahar Ariffin (deceased); company secretary of Aritah Realty named Nurul Farahin Md Ambia; and an individual who has no connection whatsoever with Aritah Realty named Norazam Tazli.
[3] Aritah Realty then commenced Suit No.WA-21 NCVC-55- 05/2017 (Suit 55) at the Kuala Lumpur High Court. The plaintiffs in Suit 55 are Abdul Munir Ariffin and Aritah Realty. The defendants are: the representative of Zahar Ariffin (deceased) as the first defendant; Nurul Farahin Md Ambia as the second defendant; Munir & Sons as the third defendant; Pengarah Tanah dan Galian Kuala Lumpur as the fourth defendant; and Mass Rapid Transit Corporation Sdn Bhd as the fifth defendant. The fourth and fifth defendants were removed as parties before the trial. In Suit 55, Aritah Realty maintained its position that the sale and transfer of Wisma Aritah was a fraudulent transaction, illegal and void.
[4] However, in mid trial, Aritah Realty withdrew Suit 55. On 6 July 2018, the Court struck out Suit 55 without liberty to file afresh.
[5] To protect their interest in the unit lots, the individual appellants filed Suit 44, Suit 56 and Suit 82 against Aritah Realty and Munir & Sons. CIMB intervened in Suit 44 as the fourth defendant. CIMB filed a counter-claims against its three assignors (Azmillah Rosman, Azmin Kass Rosman and Melati Perspektif Sdn Bhd) for similar reliefs in Suit 456. The appellants' pleaded case in Suit 44, Suit 56 and Suit 82 was the sale and transfer of Wisma Aritah to Munir & Sons is tainted with fraud and illegality as Aritah Realty knew the unit lots had already been sold to the appellants. Vide these suits, the appellants sought for inter alia a declaratory relief that they are the beneficial owners of the unit lots and that the sale and transfer of Wisma Aritah to Munir & Sons be declared null, void ab intio and illegal.
[6] Likewise, to enforce its right as an absolute assignee in the sale and purchase agreement involving appellants named Azmillah Rosman, Azmin Kass Rosman and Melati Perspektif Sdn Bhd (the assignors), CIMB brought Suit 456 against these three appellants, Aritah Realty, Munir & Sons and Small Medium Enterprise Development Bank Berhad. CIMB's pleaded case was the transaction between Aritah Realty and Munir & Sons and the charge in favour of SME Bank shall not be indefeasible where the registration was obtained by means of an insufficient or void instruments. CIMB claims for various declaratory orders. Among the reliefs sought is a declaratory order that CIMB is the absolute assignee for the three assignors; that the three assignors are the beneficial owners of the unit lots and a declaration that the sale and transfer of Wisma Aritah is illegal and void.
[7] On 18 October 2018, the learned Judicial Commissioner (now JCA) dismissed all the appellants claims against Aritah Realt
