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2020 MarsdenLR 21
COURT OF APPEAL PUTRAJAYA
VISALADCHUMY NARAYANAN & ORS – Appellant
Versus
WAKIL DIRI KEPADA HARIDAS NARAYANAN SI MATI & ORS – Respondent
[Civil Appeal No: N-02(NCVC)(WM573-08/2017]
The court established that an estate administrator must comply with statutory obligations to protect beneficiaries' interests, including ensuring proper valuations and obtaining approvals for sales.
Headnote:(A) Small Estates (Distribution) Act 1955 – Section 17 – Probate and Administration Act 1959 – Section 60 – Appeal against dismissal of amendment to statement of claim and denial of plaintiffs' claims – High Court orders challenged were set aside. Amendments were allowed as they pertained to statutory duties of administrator. Breach of fiduciary duty was established concerning the sale of estate property below market value, rendering the sale voidable. (Paras 1, 5, 15, 26, 30, 46, 65, 91)
Facts of the case: The case involved the estate of a deceased individual sold by the administrator at undervalued prices to third parties without proper consent. The plaintiffs contested the validity of these actions.
Findings of Court: The court allowed amendments to the claim, asserting the administrator's statutory and fiduciary breaches. The sale of land was determined to be below market value and voidable.
Issues: Whether the amendments to the statement of claim were admissible and whether the administration of the estate complied with relevant statutory obligations.
Ratio Decidendi: The court emphasized the administrator's duties to act in the interest of beneficiaries, ensuring sales reflect market values and obtain requisite approvals.
Result: Appeal allowed.
[1] This is an appeal by the Appellants vide Notice of Appeal dated 2 August 2017 against the decision of the learned Judicial Commissioner ('Judge') made on:-
(i) 26 October 2016 dismissing the Appellants' application to amend the Amended Statement of Claim (encl 143) with costs of RM3000.00 ('the High Court Order dated 26 October 2016'); and
(ii) 7 July 2017 dismissing the Appellants' claims and allowing the 2nd and 3rd Respondents' Counterclaim and damages of RM5,000.00 with costs of RM20,000.00 to be paid to the 1st Respondent and RM30,000.00 to be paid to the 2nd and 3rd Respondents subject to allocatur fees.
[2] The Appellants are the Plaintiffs whilst the 1st, 2nd and 3rd Respondents are the 1st, 2nd and 3rd Defendants in the Court below. We shall for purposes of this appeal refer to the parties as they were referred to in the High Court.
[3] At the hearing of the appeal on 11 April 2019 and subsequently at the continued hearing date on 9 May 2019, the 2nd and 3rd Respondents were represented by Messrs. Ahmad Sukeri & Associates. However we observed the 1st Respondent was not represented during the hearing of the appeal although the Affidavit of Service affirmed by the process server affirmed on 5 April 2019 for service of the Amended Notice of Appeal dated 14 December 2018 and the Appellants' solicitors' letters dated 21 December 2018 informing the 1st Respondent of the date of hearing of the appeal showed that the said documents were duly served. Likewise the Affidavit of Service of the same process server affirmed on 3 May 2019 for service of the Appellants'solicitors'letter 15 April 2019 informing the 1st Respondent of the continued hearing date showed that the said letter was duly served.
[4] Having carefully considered the submissions of the respective Counsel and having perused the Records of Appeal before us, we unanimously allowed the appeal. These are the reasons for our decision.
Background Facts
[5] There are 11 beneficiaries to the estate of one Narayanan a/l Krishnan ('the Deceased') who died intestate on 4 July 1989, including the 1st to 5th Plaintiffs and the 1st Defendant, who are brothers and sisters. On 10 November 2015, the 1st Plaintiff died intestate and by an Order of the Court dated 28 December 2015, the proceedings in the Suit was ordered to be carried between the 1st to 5th Plaintiffs and for the 6th Plaintiff to be made a party to the Suit as a Plaintiff in substitution of the deceased 1st Plaintiff. The 1st Defendant was appointed as the administrator of the Deceased's estate vide the Letter of Administration dated 28 September 1990.
[6] At all material times, the Deceased was the original owner of the 2 plots of land known as Geran Mukim 452 Lot 5368 measuring 6.101 acres ('1st plot') and Geran Mukim 895 Lot 5589 measuring 2.454 acres at Mukim Labu, Gadung Jaya, District of Seremban, Negeri Sembilan Darul Khusus ('2nd plot') (collectively referred to as 'the 2 plots of Land').
[7] On 24 July 1997, upon an application made by the 1st Defendant to the Land Office of Negeri Sembilan, the 1st Defendant had obtained an order pursuant to s 17 of the Small Estates (Distribution) Act 1955 (Act 98) (' SEDA 1955') to sell the 2 plots of Land to a company for an agreed price of RM4.00 per square foot (this price of "RM4.00" is as pleaded by the Plaintiffs) and the proceeds of sale to be equally divided amongst the 11 beneficiaries of the Deceased's estate ('Order dated 24 January 1997').
[8] However the Plaintiffs alleged that the sale and purchase transaction for the agreed price of RM4.00 per square foot did not is materialise. Instead, on 2 June 2014, the Plaintiffs discovered the 2 plots of Land were sold to the 2nd and 3rd Defendants with a purchase price of RM250,000.00 for the 1st plot which is equivalent to RM2.30 per square foot and RM700,000.00 for the 2nd plot which is equivalent to RM2.60 per square foot. At ail material times, the 1st Defendant did not dispute having received
