The validity of a Joint Venture Agreement does not require formal approval from all beneficiaries in a deceased estate, allowing trustees to execute agreements provided they act in accordance with their roles.

Abang Iskandar Abang Hashim JCA:

Brief Facts Of The Case

[1] It is the plaintiff's pleaded case that on 3 January 2006, Anuar Abu Bakar ("the plaintiff") and Samsuri Booyman ("the defendant") entered into a "Joint Venture Agreement" to develop a piece of land known as Lot 1971, AM 193, Mukim Labu, Sepang District, Selangor ("the land").

[2] Among the terms agreed upon by both parties have been that:

a. the plaintiff to apply for the change of the conditions of land use from "Agricultural" to "Building and Business" in addition to do the infrastructure works;

b. since the land belonged to the defendant's mother, Rokiah binti Karia ("the deceased"), the plaintiff agreed to take care all matters involving the obtaining of the letter of administration and for the faraid process involving the land at the plaintiff's expenses;

c. Upon obtaining a separate title, the plaintiff and the defendant will have equal 50% share over the land (consisting of 10 lots in the land);

d. The plaintiff's share to be transferred to him within one month from the date the separate title is obtained;

e. As consideration, the plaintiff will pay to the defendant the sum of RM1,000.00.

[3] The plaintiff contended that he had successfully complied with all the terms stipulated in the Joint Venture Agreement, including obtaining a court order dated 22 August 2007 which, inter alia, ordered that the land be transferred to the defendant. However, the defendant had refused or failed to transfer the plaintiff's share in the land into the plaintiff's name. He had also refused to give to the plaintiff the original title of the land for the purpose of the said transfer.

[4] The plaintiff therefore claimed that the defendant had breached the Joint Venture Agreement. He had also claimed that the defendant had breached the trust as the Joint Venture Agreement which he had entered 'on trust' that the defendant would fulfil his obligations under the Joint Venture Agreement.

[5] Therefore in this suit, the plaintiff sought for a declaration that the defendant was a trustee of the ten lots in the land held on behalf of the plaintiff and for the defendant to transfer the ten lots to the plaintiff within three month from the date of the court order. Alternatively, the plaintiff sought for compensation of RM562,197.50 or RM926,215.00 whichever applicable with interest.

[6] The defendant in the statement of defence stated, inter alia, that the Joint Venture Agreement was signed before the letter of administration was obtained. It was also his defence that the defendant's family members and other beneficiaries had never authorised the defendant to enter into the Joint Venture Agreement. The defendant contended that there was no consideration in the Joint Venture Agreement. The reason for payment of RM1,000.00 was also vague. The defendant also contended that the Joint Venture Agreement was not valid because it was contrary to the law of faraid, and syariah law in the distribution of estate.

[7] On 16 October 2014, the learned High court Judge ("HCJ") ordered the defendant to pay the plaintiff the followings:

(i) the sum of RM48,118.52 for the cost and expenses spent by the plaintiff;

(ii) the sum of RM100,000.00 as a compensation,

(iii) 5% interest upon (i) and (ii); and

(iv) costs of RM20,000.00.

[8] Dissatisfied with the decision, the plaintiff had since appealed to the court of Appeal. We had heard both parties during oral submissions and we had unanimously allowed the appeal. We now proffer the reasons for our decision.

The Appeal

[9] The plaintiff, in his memorandum of appeal complained as follows:

"Hakim Mahkamah Tin