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2021 MarsdenLR 1049
COURT OF APPEAL (PUTRAJAYA)
LAU BEE LAN, JJCA, HANIPAH FARIKULLAH, J
Malayan Banking Bhd – Plaintiff
Versus
Sparrows & Arrows Sdn Bhd (dalam likuidasi) & Ors – Defendant
RAYUAN SIVIL NO W-02(NCVC)(W)-413-03/2017
Ng Sai Yeang (Wong Chee Chien and Yenne Chow with him) (Raja, Darryl & Loh) for the appellant.
Cheang Lek Choy (Lek Choy & Co) for the first respondent.
Rajashree a/p Suppiah (Kuan Kai Tat with her) (Mei Fun & Rajashree) for the second respondent.
Yeoh Cho Kheong (Lee Mei Xian with him) (Ranjit Singh & Yeoh) for the third respondent.
Lim Kian Leong (Tobias Lim with him) (Lim Kian Leong & Co) for the fourth respondent.
The judgment confirms that registered interests are generally indefeasible under the National Land Code 1965 unless sufficient evidence of fraud or abuse of process is established, which the appellant failed to do.
Headnote:(A) Civil Procedure - Fresh Evidence - Abuse of Process - Fraud - Ownership Rights - The Court held that an appellant must meet the legal requirements for fresh evidence and that mere non-disclosure does not constitute fraud. Additionally, registered interests are protected under section 340 of the National Land Code 1965. (Paras 36, 76-84)
(B) Fraud and Abuse of Process - Essential elements must be clearly established, and mere silence does not amount to misconduct. The Plaintiff failed to sufficiently plead or prove claims of fraud against the defendants. (Paras 92-99)
(C) Indefeasibility of Title under National Land Code 1965 - The appellant's unregistered interest was defeated by the registered title of the second respondent. Rights under a loan agreement need to be protected effectively through registration. (Paras 40, 84)
Facts of the case:
The Plaintiff's appeal arises from a judgment dismissing its claims against multiple defendants over a property transaction involving a loan and alleged fraud, abuse of process, and ownership rights. While the plaintiff claimed that the defendants acted improperly, the Court found insufficient evidence to support these allegations. (Paras 4-10)
Findings of Court:
The learned Judge accurately determined that the Plaintiff had failed to provide sufficient evidence of fraud or abuse of process and dismissed the case. The findings included the principles of indefeasibility of title, where the claimant did not take necessary steps to protect interest. (Para 85)
Issues: Whether the appellant could challenge the registered title despite knowledge of the property transaction; whether there was sufficient pleading and evidence for fraud and abuse of process claims. (Paras 94-99)
Ratio Decidendi: The Court reaffirmed that a registered title is generally indefeasible unless certain conditions are met, including fraud; the appellant had not established sufficient grounds to challenge the registered interests or prove fraud. (Paras 76-84)
Result: Appeal dismissed with costs in favor of the respondents.
| Table of Content |
|---|
| 1. property purchase and loan agreement details. (Para 4 , 5 , 6 , 12 , 18) |
| 2. failure to prove claims against defendants. (Para 33 , 34 , 35) |
| 3. consent to sale and implications of the interim consent order. (Para 49 , 50 , 51 , 52 , 58) |
| 4. indefeasibility of registered title under the nlc. (Para 76 , 84 , 102) |
| 5. dismissal of appeal with costs. (Para 117 , 125) |
Lau Bee Lan JCA:
JUDGMENT
Introduction
[1]This appeal was brought by the Appellant/Plaintiff against the decision of the learned High Court Judge made on 23/2/2017 dismissing the Appellant/Plaintiff’s claim against the 1st, 2nd, 3rd and 4th Respondents/1st, 2nd, 3rd and 4th Defendants with costs of RM400,000.00 on an indemnity basis i.e., RM100,000.00 per Respondent/Defendant.
[2]We shall refer to the parties as follows: Appellant/Plaintiff as MBB, 1st to 4th Respondents/1st to 4th Defendants as Sparrows & Arrows, Kopetro, Nga and Liang, respectively.
[3]This Court had directed that the 2nd Respondent/2nd Defendant’s Notice of Motion (Encl. 16a) to adduce fresh evidence be heard and disposed of together with the appeal proper. Having heard and considered the respective parties’ oral and written submissions and the relevant Records of Appeal, we had adjourned the appeal for decision after requesting the parties to parties to submit further on issues which arose at the hearing on 19/6/2020, namely: (i) can a lawyer carrying out his legal duty be found liable for abuse of process?; (ii) can fraud be established if there is no benefit/advantage gained by the perpetrator?; and other issues which arose during the hearing. This is our judgment in respect of the appeal proper and Kopetro’s Notice of Motion (Encl. 16a) to adduce further evidence.
Brief Facts
[4]The brief facts relevant to this appeal are these. On 13/9/1995, vide a Sale and Purchase Agreement of even date, Sparrows & Arrows purchased Unit No. B-05-G, Ground Floor, Block B, Phileo Avenue Parcel 64, Tingkat 1, Bangunan M1-B, Lot 144, Seksyen 44 Bandar Kuala Lumpur (‘the Megan Avenue Property’) from AAB Avenue 11 Sdn Bhd (‘the Developer’).
[5]On 23/4/1997, Sparrows & Arrows took a loan from MBB (‘the Sparrows & Arrows Loan’) to part-finance the purchase of the Megan Avenue Property and assigned the same absolutely to MBB as security under the Loan Agreement Cum Assignment (‘LACA’) dated 23/4/1997.
[6]Sparrows & Arrows defaulted under the loan. On 2/4/2008, MBB entered summary judgment vide Shah Alam High Court Suit No. MT1-22- 421-2006 (‘SAHC Suit’) for the sum of RM1,724.928.16 as at 31/1/2006 with interest and costs against Sparrows & Arrows and the guarantors, Chew Nee Hee (‘Chew’) and Ling Yun Yoke (‘Ling’) (‘the Sparrows & Arrows Judgment’).
[7]Ling had 2 term loans with MBB bearing 2 different account numbers: 414329200112 and 414329200105 (‘Ling’s Accounts’). Ling’s Accounts was secured by a charge over a property bearing residential address of No. 4, Jalan Setiabakti, Bukit Damansara, Kuala Lumpur (‘the Bukit Damansara Property’).
[8]Ling defaulted and an order for sale in respect of the Bukit Damansara Property was obtained against Ling on 22/11/2010 (‘the OFS’) via the Kuala Lumpur High Court Originating Summons No. S-24- 223-2010 (‘the 223 OS’). The proceeds went to settle Ling’s 2 term loans with MBB.
[9]Messrs. Nga Hock Cheh & Co. (‘Messrs NHCC’), of which Nga and Liang are partners, was only appointed as Ling’s solicitors midway through the 223 OS via a Notice of Change of Solicitors dated 20/5/2011.
[10]Ling and Chew had another account with MBB via a company called the Rock. This debt was sold by MBB to Gale Force. On 22/12/2009, vide Kuala Lumpur High Court Civil Suit No. D5-22-1615-225 (‘the Gale Force Suit’), Gale Force obtained a judgment against the Rock (who had secured loan from MBB), Ling and Chew (as guarantors), for the sum of RM2,669,550.90 as at 26/11/2009 together with interest and costs (‘Gale Force Judgment’).
[11]On 29/10/2010, MBB entered into a consent judgment with HS Dunamis (who
