Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 MarsdenLR 866

COURT OF APPEAL PUTRAJAYA
RHB BANK BERHAD – Appellant
Versus
PLB LAND SDN BHD – Respondent
[Civil Appeal No: P-02(NCVC)(A)-2420-12-2021]

Petitioner Advocates:Lim Poh Leong,Lean Jie ,Respondent Advocate: Vaasudevan Puspagaran

A purchaser who has not fully paid the purchase price cannot claim beneficial ownership, and claims may be barred by limitation and laches due to long inaction.

Headnote:(A) Limitation Act 1953 - Sections 9(1) and 6(1) - Competing legal interests over property - Appellant's claim to beneficial ownership barred by limitation and laches due to 20 years of inaction - Court ruled that a purchaser who has not paid the full purchase price lacks beneficial interest - Dismissal of Originating Summon upheld. (Paras 10, 24, 52)

(B) Privity of contract - Court clarified that lack of privity does not negate equitable rights - Beneficial ownership is determined by payment of full purchase price, not contractual privity. (Paras 12, 16)

(C) Equity - Doctrine of laches applies to bar claims due to inordinate delay in prosecuting rights over property. (Paras 25, 37)

Facts of the case:
The appeal involved competing claims over a property between a financier who auctioned the property after 20 years of inaction and a company that rehabilitated the property. RHB, the financier, argued it retained rights despite not paying the full purchase price.

Findings of Court:
The court found that RHB's claims were barred by statutory limitation and by the doctrine of laches due to its prolonged inaction.

Issues: The main issues were whether the dismissal of RHB's claim was appropriate based on privity of contract, beneficial interest, and preference of legal rights over beneficial rights.

Ratio Decidendi: The court concluded that the absence of payment of the full purchase price precludes beneficial ownership and that RHB's claims were barred by limitation due to its long delay in asserting rights.

Result: Appeal dismissed with costs.

Table of Content
1. competing interests over abandoned property. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9)
2. dismissal of rhb's originating summon. (Para 10 , 11)
3. privity of contract and beneficial interest. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23)
4. doctrine of laches and inaction. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
5. accrual of cause of action and limitation. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48)
6. final decision on appeal. (Para 49)
7. error in judgment but correct outcome. (Para 50 , 51 , 52)

Azimah Omar JCA:

A. Background Facts

[1] The Appeal before us is a case of competing legal interest over a property between a white knight company, PLB Land Sdn Bhd ("PLB") who circa 2014 had purchased an entire abandoned property development project (subject property included) from a Developer in liquidation, Majestic Heights Sdn Bhd ("MHSB") and a financier cum Assignee, RHB Bank Berhad ("RHB/Appellant") who was assigned the rights over the subject property circa 1998 by the subject property's purchaser, one Tong Ah Ee ("TAE") and in 2018 the Appellant subsequently sold the subject property by way of auction to a successful bidder one Ham Hon Meng ("HHM").

[2] It was undisputed that the development project was long abandoned circa 1998. It was also undisputed and admitted that neither TAE nor RHB had ever paid the full purchase price for the subject property to MHSB at any given time. PLB as white knight had purchased, rehabilitated, and successfully completed the formerly abandoned project and now seeks to maintain proprietary interest over the subject property. After two (2) decades of inaction since 1998, RHB suddenly in 2018 (capitalizing on the white knight's completion of the project) proceeded to auction off the subject property to HHM on the pre-tense that RHB's rights as Assignee had never been extinguished despite the development project being abandoned for twenty (20) years before the impugned auction and sale to HHM. It was the Appellant's core contention that it was wrong for MHSB's liquidators to sell off the development (including the subject property) as though it was an unencumbered property.

[3] The facts began with the entry of the Sale and Purchase Agreement between TAE and MHSB on 23 September 1995 ("the SPA") in which TAE purchased one commercial unit ("subject property") from MHSB within a property development known as Phase 2A, Taman Terubong Indah ("the abandoned project"). Under the SPA, it was agreed that time was of the essence and that the subject property shall be delivered to TAE (or RHB as Assignee) by 23 September 1998 (36 Calendar Months from SPA date) (cl 22 of the SPA).

[4] To finance the purchase under the SPA, TAE had obtained a loan from RHB. The Loan was granted in consideration of TAE assigning his interest to RHB on 4 March 1998 ("Loan Agreement & Assignment"). Peculiarly, this Loan Agreement & Assignment came about just less than twenty (20) days before the contractual deadline for VP Delivery.

[5] In any case, MHSB abandoned the project and was unable to deliver VP as per the terms of the SPA. In other words, both TAE as Assignor, and RHB as Assignee were already deprived of its rights over the subject property since 23 September 1998.

[6] Three (3) years after the lapsing of the VP Delivery deadline, MHSB was compulsorily wound up by the Court on 16 October 2001. It ensued that the 2nd and 3rd Defendants were then appointed as liquidators for MHSB (in liquidation) ("the Liquidators").

[7] There was no movement at all regarding the abandoned project since then. Neither MHSB nor RHB (as Assignee) initiated any claim or action for either recovery of the subject property or for reparations in view of MHSB's breach of the SPA. About 16 years after MHSB's failure to deliver VP of the subject property to RHB or TAE, the Liquidators sold the entirety of the abandoned project to the white knight company, PLB cir

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2023 MarsdenLR 866

COURT OF APPEAL PUTRAJAYARHB BANK BERHAD – AppellantVersusPLB LAND SDN BHD – Respondent[Civil Appeal No: P-02(NCVC)(A)-2420-12-2021]

A purchaser who has not fully paid the purchase price cannot claim beneficial ownership, and claims may be barred by limitation and laches due to long inaction.

Cases Referred (7)

COURT OF APPEAL PUTRAJAYA
RHB BANK BERHAD – Appellant
Versus
PLB LAND SDN BHD – Respondent
[Civil Appeal No: P-02(NCVC)(A)-2420-12-2021]