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2012 MarsdenLR 1739

FEDERAL COURT, PUTRAJAYA
GURBACHAN SINGH BAGAWAN SINGH & ANOR – Appellant
Versus
VELLASAMY PENNUSAMY & ORS & OTHER APPLICATIONS – Respondent
[Applications No: 08-245-2010(A), 08-325-2010(A), 08-463-2010(A) & 08-104-2011(A)]



A court's decision is invalid if the hearing is not duly constituted, emphasizing the importance of procedural integrity under the Court's inherent power to review.

Headnote:(A) National Land Code, 1965 - Section 214A - Applications for review of leave to appeal - Court held that the hearing was not duly constituted in accordance with s 74 of the CJA due to a coram failure as the Chairman of the panel left the bench during submissions, creating a nullity in the proceedings. (Paras 19-41)

(B) Reviews - Inherent power of the Court - Court affirmed that r 137 allows for review under limited exceptional circumstances including coram failure. (Para 22)

(C) Equitable interests - Majority held that the sale in question did not override the respondents' equitable interests as the charge was invalid. (Para 16)

Facts of the case:
The applicants sought to review a decision that dismissed leave applications regarding ownership rights of disputed land transferred in a questionable manner, highlighting an alleged fiduciary relationship between parties.

Findings of Court:
Court found that there was a procedural breach affecting the validity of the previous ruling and thus ordered a rehearing of the Leave Applications.

Issues: Whether a court can lift the veil of corporate personality and the validity of the sales made under the debenture in the context of fiduciary duties.

Ratio Decidendi: Court ruled that procedural integrity is paramount and any breach—such as a coram failure—invalidates proceedings, necessitating a review of the prior decision.

Result: Review Applications allowed; earlier decision set aside for rehearing.

Table of Content
1. introduction to the review applications (Para 1 , 2 , 3)
2. factual background of land ownership and litigation (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13)
3. findings and judgments of the high court and court of appeal (Para 14 , 15)
4. arguments presented in leave applications (Para 17 , 19 , 29 , 30)
5. court's decision on the review applications (Para 18 , 22 , 41)
Raus Sharif PCA:

Introduction

[1] There are four applications before us: Application No 8-245-2010(A) ("1st Application"), Application No 8-325-2010(A) ("2nd Application"), Application No 8-463-2010(A) ("3rd Application") and Application No 8-104-2011(A) ("4th Application"). In this judgment, we will refer to the four applications as 'the Review Applications', where the context requires.

[2] The applicants in the Review Applications were the defendants, while the respondents were plaintiffs before the High Court. For clarity and convenience, where the context requires, we will refer to the applicants in the 1st application as "Gurbachan" and "Tetuan Bachan & Kartar", 2nd application as "Regal", 3rd application as "Receiver and Manager of SEP" and 4th application as "MBF". Otherwise, the term "applicants" in this judgment refers to the applicants in these four applications.

[3] The applicants in the Review Applications moved this Court to review its decision dated 21 April 2010 in deciding not to grant leave to appeal to the applicants against the decision of the Court of Appeal.

[4] We heard the Review Applications together on 18 October 2011 and 24 October 2011. At the end of the proceedings, we indicated to the 4 parties that we need some time to consider the submissions and to make our decision. We now give our decision together with the reasons.

Background Facts

[5] Briefly the facts are these. Nam Bee Rubber Estate Sdn Bhd ("Nam Bee") owned a piece of land measuring 3,681 acres in Mukim Hutan Melintang, Hilir Perak District ("the said land"). It was a rubber estate land and was therefore governed by inter alia s 214A of the National Land Code, 1965 ("NLC").

[6] On or about 5 December 1977, Nam Bee purportedly agreed to sell the said land to a company called Syarikat Pembinaan Perusahaan Kemajuan Berhad ("SPPKB") at the purchase price of RM3.2 million. However, the transfer of the said land could not be effected. Nam Bee and SPPKB then set up a new company called Simpang Empat Plantation Sdn Bhd ("SEP"), and subsequently transferred the said land to SEP.

[7] In December 1990, SEP obtained from MBF Finance Bhd ("MBF") a credit facility in the amount of RM2.5 million. For that purpose the said land was charged as security to MBF with a debenture, which contained a power of attorney.

[8] SEP failed to repay the loan. MBF demanded payment from SEP for the sum of RM2,809,629.87 as of 30 April 1992. MBF also gave notice to terminate the loan.

[9] On 12 May 1992, based on the debenture, MBF appointed a Receiver and Manager over SEP's assets and to manage its assets. Thereafter a decision was taken by the Receiver and Manager of SEP to sell the said land by auction. Notice to that effect was published.

[10] Gurbachan, who is an advocate and solicitor and a partner in a legal firm known as Tetuan Bachan & Kartar, made a successful bid at the auction. Gurbachan executed a Sale and Purchase Agreement, and registered the said land under a company called Regal Establishment Sdn Bhd ("Regal").

[11] The Receiver and Manager of SEP used the proceed of the sale to redeem the title of the said land from MBF.

[12] The respondents claimed to be the purchasers or sub-purchasers of some plots of the said land from SPPKB. They also purported to represent 213 other sub-purchasers of plots of the said land. In this judgment, we will refer to all of them as respondents, where the context requires.

[13] In the High Court the respondents inter alia asked the Court to declare that:

(i) Gurbachan and Tetuan Bachan & Kartar were at all material times the solicitors representing the respo

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