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2025 MarsdenLR 2287
HIGH COURT MALAYA PENANG
LEONG QUEE MENG – Appellant
Versus
CIMB BANK BERHAD; GENTING PERKASA SDN BHD (THIRD PARTY) – Respondent
[Civil Suit No: PA-22NCvC-97-06/2022]
The court held that a bank does not owe a duty of care to a purchaser who has not fully paid for property, and negligence cannot be attributed for discharging obligations when no beneficial ownership exists.
Headnote:(A) Civil Law Act 1956 - Sections 12 - Duty of care regarding property ownership and completion of sale agreements - Plaintiff's claim against Defendant bank was dismissed as the court found no duty of care owed to the Plaintiff, who failed to pay the full purchase price and did not exercise rights. The court noted that relevant security documents do not impose obligations on the bank to protect the Plaintiff’s interests. (Paras 28-30, 32-35, 38-40, 61-75)
(B) Delay and Acquiescence - The Plaintiff's inaction for 23 years constituted laches, leading to dismissal of claims against the bank due to unjust relief arising from his own failure. (Paras 51-56)
(C) Damages - The Plaintiff’s failure to plead special damages and apply for consequential losses rendered his claims inadequate. (Paras 63-66)
Facts of the case:
The Plaintiff entered into a sale agreement for property not fulfilled by D1, leading to an incomplete sale, and alleged negligence by the bank for failing to protect his interests. (Paras 2-6, 23)
Findings of Court:
CIMB Bank does not owe a duty to the Plaintiff to protect his purported rights since the full purchase price was not paid, and the lack of applicable records negated any responsibility by the bank. The claim was dismissed. (Paras 74-75)
Issues: Whether CIMB Bank owed a duty of care to protect the Plaintiff's rights regarding the property and if negligence was present in discharging obligations. (Paras 25-26)
Ratio Decidendi: The court ruled that without fulfilling payment obligations under the sale agreement, the Plaintiff’s rights were only contractual, not beneficial, and thus, the bank had no legal duty to protect those rights. Delay in pursuing action further nullified claims. (Paras 27, 32, 51)
Result: Plaintiff's claim against CIMB Bank dismissed with costs awarded to the bank.
| Table of Content |
|---|
| 1. dismissal of plaintiff's claim due to facts. (Para 1 , 2 , 3 , 5) |
| 2. no duty of care owed by cimb bank. (Para 16 , 27 , 28 , 29 , 30) |
| 3. plaintiff's claims against cimb bank outlined. (Para 23 , 24) |
| 4. contribution to loss by plaintiff. (Para 36 , 50) |
Introduction
[1] The Plaintiffs ("P") action against the 2' Defendant ("CIMB Bank") is over a piece of landed property. After a full trial, I dismiss P's claim against CIMB Bank. Here are the grounds of my judgment.
Background facts
1st Defendant
[2] The 1st Defendant ("D1") was the original owner of the subject property known as Plot 14 ("property"). The property is situated on part of Lot 1257, Mukim 12, Daerah Seberang Perai Selatan, Negeri Pulau Pinang ("land").
[3] On 7 August 1995, P entered into a sale and purchase agreement with D1 for the purchase of the property ("SPA"). Under the SPA, D1 was contracted to build a one and half storey semi - detached light industrial building on the property ("factory"). The purchase price was RM 300,000.00 for both the property and the factory to be built.
[4] Under clause 20 of the SPA, D1 must deliver vacant possession of the property together with the factory within 36 months from the date of the agreement. That is to say, on or before 7 August 1998. Time was of the essence of the contract pursuant to clause 7 of the SPA.
[5] The factory was never completed and the property was never transferred to P. P did not lodge a caveat on the property.
[6] There was still a balance purchase price which was not paid by P to D1. In paragraph 12 of the statement of claim, P himself avers that he had paid only 95 % of the purchase price for the property.
2nd Defendant (CIMB Bank)
[7] At the material time, P's purchase of the property was financed by Bank Bumiputra Malaysia Bhd ("Bank Bumiputra"). Under a loan agreement dated 26 Februaru 1996 ("loan agreement"), P was accorded with banking facilities of RM 240,000.00 ("banking facilities"). This financing is equivalent to 80% of the purchase price for the property.
[8] As security for the aforesaid financing, P assigned all his rights and interest in the property to Bank Bumiputra via a deed of assignment dated 26 February 1996 ("deed of assignment"). P also granted a power of attorney dated 26 February 1996 in favour of Bank Bumiputra ("power of attorney").
[9] Bank Bumiputra's rights and interest in the property was subsequently taken over by CIMB Bank. The power of attorney was revoked by way of a deed of receipt and reassignment dated 1 December 2021 entered into between P and CIMB Bank.
3rd Defendant
[10] In the year 2017, the 3rd Defendant ("D3") purchased the property from D1 by way of a sale and purchase agreement dated 20 June 2017. By that time, the property had been issued with an individual title known as Lot 1645, Geran Mukim 465, Tempat Ladang Valdor, Mukim 12, Daerah Seberang Perai Selatan, Negeri Pulau Pinang.
[11] This sale and purchase was duly completed. The transfer of the property to D3 was registered on 2 November 2017. D3 asserts that it had no notice of the SPA or P's purchase of the property.
4th Defendant
[12] In the year 2020, D3 sold the property to the 4th Defendant ("D4") by way of a sale and purchase agreement dated 8 October 2020. This sale and purchase was also duly completed. The transfer of the property to D4 was registered on 5 February 2021. Presently, D4 is theregistered proprietor of the property.
Striking out applications
[13] D1 filed an application dated 14 September 2022 in Enclosure 30 to strike out P's action. D3 similarly filed an application dated 28 September 2022 in Enclosure 36 to strike out P's suit. D4 likewise filed an application dated 10 December 2022 in Enclosure 62 to strike out P's claim.
[14] I allowed Enclosures 30, 36 and 62, and struck out P's suit against D1, D3 and D4. The action against CIMB Bank was stayed pending P's appeal to the Court of Appeal against my striking out orders. On 30 October 2023, the Court of Appeal di
