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2014 MarsdenLR 877
COURT OF APPEAL PUTRAJAYA
RESOLUTION ALLIANCE SDN BHD – Appellant
Versus
BINABAIK SDN BHD & ANOR – Respondent
[Civil Appeal No: J-02-2654-11/2012]
The court held that an assignment of property rights does not transfer associated liabilities, which remain with the original purchaser, reinforcing that refusal to perform obligations constitutes a breach.
Headnote:(A) Banking and Financial Institutions Act 1989 - Strata Titles Act 1985 - Property Law - Assignment of rights does not include liability for maintenance charges as liabilities are not transferred without consent - Court found maintained charges remain with the second defendant, the original purchaser, despite the assignment. (Paras 31, 34, 44)
(B) Equity - The first defendant's refusal to issue the strata title constitutes a breach of undertaking given upon assignment, reinforcing the legal obligation to transfer the title free from encumbrance. (Paras 40, 46)
Facts of the case:
The dispute arose from a sale and purchase agreement for strata title property, where the first defendant demanded maintenance charges from the plaintiff post-assignment. The second defendant became bankrupt, prompting the plaintiff to seek a declaration of non-liability for the said charges.
Findings of Court:
The court ruled the first defendant could not withhold the title due to non-payment of charges, as these liabilities remained with the original purchaser.
Issues: The main issues included the obligations regarding maintenance charges after an assignment and the legal requirements for the transfer of property title.
Ratio Decidendi: The court held that only rights were assigned to the plaintiff, not liabilities, and the refusal to transfer the title was a breach of contractual undertakings.
Result: Appeal allowed with costs, ordering the first defendant to deliver the title to the plaintiff.
| Table of Content |
|---|
| 1. background of the case and parties involved. (Para 1 , 2 , 4 , 9 , 18) |
| 2. introduction of the case details and claims. (Para 3) |
| 3. details of property transaction and liabilities. (Para 10 , 12 , 15 , 22) |
| 4. background facts of property transaction. (Para 11 , 13 , 14) |
| 5. plaintiff's actions post-bankruptcy of the defendant. (Para 16 , 17 , 19 , 20 , 21) |
| 6. arguments on assignment of rights and liabilities. (Para 24 , 29 , 34 , 40) |
| 7. arguments presented regarding liability. (Para 25 , 26) |
| 8. legal obligations of the parties involved. (Para 27 , 28 , 39 , 44) |
| 9. court's perspective on assignment of liabilities. (Para 30 , 31 , 32 , 33 , 35 , 36) |
| 10. court's determination of trustee obligations. (Para 38) |
| 11. legal obligations under the strata titles act. (Para 41 , 42 , 43 , 45) |
| 12. conclusion of the court's ruling. (Para 46) |
[1] This appeal is against the decision of the High Court of Johor Bahru of 6 August 2012.
[2] On 6 August 2012, the High Court of Johor Bahru had dismissed the appellant's originating summons application against the respondents for a declaration of its right over a property, and had instead allowed the first respondent's counterclaim against the appellant for the payment of service and maintenance charges.
[3] At the High Court proceedings, the appellant (Resolution Alliance) was the plaintiff; whilst the first and second respondents were the first and second defendants, respectively. Thus in this judgment we will be referring to the appellant as the plaintiff, to the first respondent (Binabaik) as the first defendant, and to the second respondent (Suryati) as the second defendant.
[4] The plaintiff had filed the originating summons in the High Court for:-
(a) a declaration that the plaintiff, as the assignee under an assignment dated 13 December 1999, in respect of a sale and purchase agreement of a strata title property dated 17 July 1999, is not liable to the first defendant for the payment of a sum of RM27,835.25, being service and maintenance charges ('maintenance charges') in respect of the said property;
(b) an order that the first defendant (Binabaik) do deliver to the plaintiff (Resolution Alliance) the Issued Document of Title of a strata title in respect of a unit, namely, Unit No 10-05, Block M2, in an apartment known as Mewah View Luxurious Apartment at Taman Bukit Mewah in Johor Bahru ('the property'); and
(c) an order that the second defendant (Suryati) do execute the memorandum of transfer in favour of the plaintiff in respect of the property within 7 days of the service of the memorandum of transfer (in default, the transfer to be effected by the Registrar of the High Court).
[5] On 6 August 2014, after hearing submissions, we reserved judgment.
[6] We shall now deliver our unanimous decision.
[7] We are allowing the plaintiff's appeal with costs.
[8] Our reasons are as follows.
Brief Background Facts
[9] On 17 July 1999 the second defendant entered into a sale and purchase agreement with the first defendant, a developer, for the purchase of the property.
[10] In order to finance the purchase of the property, the second defendant took a loan from Malayan Banking Berhad (MBB) by entering into a loan agreement as well as executing a deed of assignment dated 13 December 1999 ('the assignment') in favour of MBB. Section 3.01 of the assignment states:-
SECTION 3.01 ASSIGNMENT
Pursuant to the Facility Agreement and for the consideration aforesaid, and as security for the payment and discharge of the Monies Hereby Secured, the Assignor as beneficial owner hereby assigns absolutely to the Bank all the present and future right title and interest and benefit of the Assignor in and to the Property, the Sale and Purchase Agreement and where appropriate the Related Agreements including where applicable, the equity of redemption therein together with the Assignor's right of enforcement thereof.
[11] The first defendant gave its consent to the assignment on 25 November 1999.
[12] The first defendant further gave
