THE OFFICIAL REPOSITORY OF
MALAYSIAN JUDGMENTS & RULINGS

[2018] MYCA 232 ENGLISH

Supreme Tribute Sdn Bhd v Dato’ Haji Mohd Amin Bin Ahmad Yahya and 3 Others
Suit Number: Civil Appeal No. W-01(NCVC)(W)-112-04/2017 

JUDGMENT

[1] This appeal was against the decision of the Kuala Lumpur High Court dismissing the appellant’s counterclaim against the respondents with costs. The respondents were the 6th, 7th, 8th and 9th defendants respectively in the main suit filed by Ee Chong Wah, Ee Soon Kee and Goodland Realty Sdn Bhd (“Goodland Realty”), and were the 5th, 6th, 7th and 8th defendants respectively in the counterclaim filed by the appellant (the 1st defendant in the main suit).

[2] The appellant was the only plaintiff in the counterclaim against the respondents. For convenience, we shall refer to the respondents as the 5th, 6th, 7th and 8th defendants respectively.

[3] Having heard arguments by both sides, we reserved judgment to a date to be fixed. We have now reached a unanimous decision and this is our judgment.

[4] To provide context, it is necessary to set out the salient facts of the main suit from which the appellant’s counterclaim against the 5th, 6th, 7th and 8th defendants arose. They are as follows. Ee Chong Wah and Ee Soon Kee (the 1st and 2nd plaintiffs in the main suit) were the two shareholders and directors of Goodland Realty (the 3rd plaintiff in the main suit), who is the registered proprietor of a piece of land held under EMR 2824, Lot 1101, Mukim Cheras, Selangor (“the land”).

[5] At all material times, Goodland Realty was in possession of the EMR handwritten issue document of title (“the EMR title”) to the land. Unbeknownst to the 1st, 2nd and 3rd plaintiffs, on 14.5.2002, the 5th defendant who is the Land Administrator of Hulu Langat Selangor, converted the EMR title to a GM computer printed IDT (“the GM title”), namely Hakmilik Geran Mukim No. 872, Lot 1101, Mukim Cheras, Daerah Hulu Langat, Selangor under paragraph 8(1) of the Fourteenth Schedule to the National Land Code 1965 (“the NLC”).

[6] The truth is, Goodland Realty never made any application to the 5th, 6th or 7th defendants to convert the EMR title to the GM title. Nor was Goodland Realty ever asked by the 5th defendant to surrender the EMR title to the 5th or 7th defendant for cancellation and destruction and to collect the GM title as replacement for the EMR title.

[7] On 1.3.2012, i.e. ten years after the conversion of the EMR title to the GM title by the 5th defendant, Goodland Realty was informed orally by one Dato’ Lee Siew Neng through the 1st plaintiff, at a meeting, that based on a search conducted at the Suruhanjaya Syarikat Malaysia (“the SSM”), the 1st and 2nd plaintiffs had been replaced as directors of Goodland Realty by Chong Wing Fat, Lim Yoke Sim and Low Beng Hong (the 2nd, 3rd and 4th defendants in the main suit).

[8] The 1st and 2nd plaintiffs then made a search at the Hulu Langat Land Office and discovered the following:

(a) That the land had purportedly been sold by Goodland Realty to the appellant for a sum of RM2 million;

(b) That on 1.2.2012, the land had purportedly been transferred by Goodland Realty to the appellant upon registration of a Memorandum of Transfer (“the MOT”) which was presented by Messrs Peter Pui & Partners, the solicitors for the appellant; and

(c) That the appellant had become the new registered proprietor of the land on 1.2.2012; and

(d) That the photocopies of the NRIC purportedly belonging to the 1st and 2nd plaintiffs that were used in the purported transfer of the land by Goodland Realty to the appellant were false as they had been forged by using photographs of unknown persons.

[9] The 1st and 2nd plaintiffs also made a search at the SSM and discovered the following:

(a) The 2nd and/or the 3rd or 4th defendants in the main suit had appointed themselves as the new directors of Goodland Realty;

(b) The 2nd and/or the 3rd and 4th defendants acting individually or together had forged and fabricated documents, including two Forms 49 dated 4.9.2011 and 30.12.2011 respectively and one Form 44 dated 4.11.2011, all under the Companies Act 1965, which they forwarded to the SSM for registration;

(c) The registered address of Goodland Realty had been changed from the Pudu address to a fictitious address by the three new directors of Goodland Realty by forging the signature of one Law Ah Kuan; and

(d) The 1st and 2nd plaintiffs were removed as directors of Goodland Realty on 4.9.2011 and were replaced by the new directors.

[10] Having taken all necessary steps under the NLC to protect their interests in the land after discovering the fraud, on 25.5.2012, the 1st, 2nd and 3rd plaintiffs filed the main action in the Kuala Lumpur High Court against the 1st to 6th defendants without naming the 6th defendant to seek, inter alia, the following reliefs:

(i) a declaration that Goodland Realty is the legitimate and rightful owner of the land;

(ii) an order for recovery of the land from the appellant;

(iii) an order for rectification of the Register of the SSM with regard to the particulars of Goodland Realty, its directorship and registered business address;

(iv) damages together with interest; and

(v) costs.

[11] The 1st, 2nd and 3rd plaintiffs subsequently amended and re-amended their Writ and Statement of Claim by naming one Dato’ Haji Mohd Amin Bin Ahmad Yahya as the 6th defendant (5th defendant in the counterclaim). They also added 3 new defendants, namely the Selangor State Government as the 7th defendant (6th defendant in the counterclaim), one Mohd Azhar Bin Mohd Daud (the Assistant District Officer) as the 8th defendant (7th defendant in the counterclaim) and the Director of Lands and Mines Selangor as the 9th defendant (8th defendant in the counterclaim).

[12] On 25.6.2012, the appellant as the 1st defendant in the main suit filed its statement of defence and counterclaim. It subsequently amended its defence and counterclaim by deleting 3 causes of action, namely for conspiracy, deception and collateral abuse of process and the particulars thereof against the 1st, 2nd and 3rd plaintiffs and the 5th to 9th defendants in the main suit, together with the corresponding reliefs claimed, thereby reducing its original 7 causes of action to only 4 causes of action, namely: (i) indefeasibility of title under section 340 of the NLC, (ii) trespass and/or unlawful interference, (iii) negligence, (iv) and/or breach of statutory duty.

[13] On the first hearing date on 30.3.2015, learned counsel for the 1st, 2nd and 3rd plaintiffs in the main suit informed the Court that his clients had agreed to enter into a consent judgment to settle their claim against the appellant and the SSM and to settle the appellant’s counterclaim against the 1st, 2nd and 3rd plaintiffs. He also informed the Court that the 1st, 2nd and 3rd plaintiffs agreed to enter into another consent judgment to settle their claim against the 5th, 6th, 7th and 8th defendants.

[14] The two consent judgments were duly recorded the following day. The effect of the two consent judgments was to restore the 1st, 2nd and 3rd plaintiffs’ positions to the positions they were in prior to the fraudulent transfer of the land to the appellant.

[15] Having been compelled to return the land to Goodland Realty, the appellant then blamed the 5th, 6th, 7th and 8th defendants for the ‘loss’ of the land and counterclaimed against them for a sum of RM2 million, being the purchase price of the land that it had purportedly paid to Goodland Realty.

[16] The appellant’s case against the 5th, 6th, 7th and 8th defendants in the counterclaim was as follows:

(1) that the 5th, 6th, 7th and 8th defendants were negligent in permitting or causing the public documents of Goodland Realty and the title to the property to be falsified, fabricated and misused by the 2nd and 3rd defendants in the main suit, namely Chong Wing Fat and Lim Yoke Sim; and

(2) that the 5th, 6th, 7th and 8th defendants were guilty of breach of statutory duty under the NLC in permitting or causing the public documents of Goodland Realty and the title to the property to be falsified, fabricated and misused by the 2nd and 3rd defendants in the main suit.

[17] The agreed issues to be tried in the counterclaim were the following:

1. Whether the GM title was issued by the 5th and/or 8th defendants in contravention of the provisions of the NLC, namely section 5A and the 14th Schedule thereto and the Standard Operating Procedure (“the SOP”) of the 6th and/or 8th defendants;

2. Whether the 5th and/or 7th and/or 8th defendants were negligent and/or in breach of their statutory duty under the NLC and the 14th Schedule thereto and the SOP of the 6th and/or 8th defendants in the conversion of the EMR title to the GM title;

3. Whether the GM title and plan of the land purportedly issued on 6.10.2011 existed in the computer land registration system of the 5th and/or 8th defendants;

4. Whether the GM title and plan of the land purportedly issued on 6.10.2011 were delivered by the 5th and/or 7th and/or 8th defendants to a party other than Goodland Realty;

5. Whether the 5th and/or 7th and/or 8th defendants were negligent and/or in breach of their statutory duty under the NLC and the 14th Schedule thereto and the SOP of the 6th and/or 8th defendants in the purported issuance of the GM title and plan of the land on 6.10.2011 and their alleged delivery to a party other than to Goodland Realty;

6. Whether as a result of the 5th and/or 7th and/or 8th defendants’ negligence and/or breach of statutory duty, the appellant had suffered loss and damage;

7. Whether the 6th defendant was vicariously liable for the acts or omissions of the 5th, 7th and/or 8th defendants in the conversion of the EMR title to the GM title;

8. Whether the 6th defendant was vicariously liable for the acts or omissions of the 5th, 7th and/or 8th defendants in the issuance of the GM title and plan of the land on 6.10.2011 and their alleged delivery to a party other than Goodland Realty;

9. Whether the 5th, 6th, 7th and 8th defendants had been wrongly named as parties to the counterclaim by the appellant;

10. Whether the appellant’s counterclaim against the 5th, 6th, 7th and 8th defendants had complied with the requirements of sections 5 and 6 of the Government Proceedings Act 1956;

11. Whether the conversion of the EMR title to the GM title was done in good faith and in compliance with the relevant procedures and rules under the NLC by the 5th, 7th and 8th defendants thereby entitling them to protection under section 22 of the NLC; and

12. Whether the appellant was a bona fide purchaser for value of the land from Goodland Realty.

[18] In a nutshell, the appellant’s cause of action against the 5th, 7th and 8th defendants in the counterclaim was that the fraudulent transfer of the land to it from Goodland Realty was due to their negligence and/or breach of statutory duty and that the 6th defendant (the State Government of Selangor) was vicariously liable for their acts.

[19] The 5th, 6th, 7th and 8th defendants’ defence to the counterclaim was that they had complied with all the procedures laid down by the NLC in effecting the transfer of the land from Goodland Realty to the appellant on 1.2.2012. Their case was that they had acted in good faith and had rightly relied on the documents presented by the appellant’s solicitors, namely Messrs Peter Pui & Partners before effecting the transfer. They were satisfied that all the transfer documents presented by Messrs Peter Pui & Partners were genuine and in order.

[20] It was pointed out that the criminal investigation carried out by the police into the fraudulent transfer of the land had concluded that none of the staff and officers of the Hulu Langat Land Office was complicit in the fraud. It was also pointed out that the investigation officer had in fact confirmed that the suspects were the 2nd, 3rd and 4th defendants in the main suit, i.e. Chong Wing Fat, Lim Yoke Sim and Low Beng Hong who had been arrested and remanded for 7 days but released on police bail after their statements were taken. It was, therefore, submitted that the fraud was beyond the knowledge of the 5th, 6th, 7th and 8th defendants.

[21] The learned Assistant State Legal Advisor (“ALA”) went on to submit that since the 5th, 6th, 7th and 8th defendants had no expertise in detecting any fraudulent act by any party in the transfer process, they should not be held liable for the fraudulent transfer of the land from Goodland Realty to the appellant. Reliance was placed on the following observations by Vernon Ong Lam Kiat J (as he then was) in Selvaraju Velasamy & Anor v Abdullah Ali Kutty [2009] 2 CLJ 753:

“[42] Thirdly, is it just and reasonable to impose a duty of care? The duty to ensure that the certificate of insurance is valid and not a forgery is an onerous responsibility and heavy burden on the 3rd defendant. The detection of forged certificates requires specialized skill and expertise. Certificates of insurance are issued by different insurance companies. On top of it the 3rd defendant receives a very substantial number of applications for motor vehicle licences daily. The counter clerks at the 3rd defendant offices throughout the country would have to either all trained in the science of detection of forgeries or otherwise replaced by a team of qualified experts. Clearly this additional responsibility is impractical and unreasonable. It would also be unjust as the duty to ensure the authenticity of certificates would entail delay thereby causing hardship to the public as a whole. Additionally, the intention of the Legislature in providing for the Motor Insurer’s Bureau to cater for the contingency where road accident victims are denied compensation by the absence of any insurance or effective insurance precludes any attempt to impose a common law duty of care on the 3rd defendant. It has always been the position that once a statute governs or regulates a specific area then the common law is excluded. (s.3(1) Civil Law Act: Steven Phoa, supra).”

[22] According to the learned ALA, the 5th, 6th, 7th and 8th defendants had no idea how Messrs Peter Pui & Partners obtained the forged GM title which they used to apply for the transfer of the land. Therefore, it was Messrs Peter Pui & Partners, if at all, whom the appellant should blame for the loss of the land, and not the 5th, 6th, 7th and 8th defendants.

[23] It was further submitted that the appellant and Messrs Peter Pui & Partners were themselves negligent in the transfer process and therefore the appellant could not claim that it was a bona fide purchaser for valuable consideration of the land. Reference was made to the decision of this Court in Au Meng Nam & Anor v Ung Yak Chew & Ors [2007] 4 CLJ 526 where Gopal Sri Ram JCA (as he then was) said:

“Had the learned trial judge taken the above facts and circumstances into consideration, he cannot possibly conclude that the 1st defendant was a bona fide purchaser for valuable consideration, so as to be protected under s.340(3) of the Code. To me, the 1st defendant had acted hastily. He concluded the sale without any proper investigation into the title or the persons claiming to be proprietors. No doubt he had every right to take advantage of the low price that was offered to him but he took the risk. When he embarked into such risk, it cannot be at the expense of the plaintiffs. This is because while he had a choice, the plaintiffs had none. In fact, the plaintiffs were helpless. The plaintiffs could not do anything to prevent the fraud. Even locking the title in a safe would not had help the plaintiffs. In such circumstances the court must not favour the 1st defendant, over the plaintiffs. To do so would be doing injustice to the plaintiffs.”

[24] Although the factual context of the above observations may be different from the factual context of the present case but all the same the appellant herein cannot blame the 5th, 6th, 7th and 8th defendants for the fraudulent transfer of the land as it was a result of its own solicitor’s act of using forged documents that led to the transfer, and it was the appellant who stood to gain from the whole fraudulent exercise.

[25] At the conclusion of the trial, the learned trial Judge found in favour of the 5th, 6th, 7th and 8th defendants-that the appellant failed to prove its counterclaim against any of them. Accordingly, she dismissed the appellant’s counterclaim against the 5th, 6th, 7th and 8th defendants with costs, hence the present appeal before us. We reproduce below the final paragraphs of the learned trial judge’s grounds of judgment in dismissing the appellant’s counterclaim against the 5th, 6th, 7th and 8th defendants:

“198. Based on the above reasons, the Court is satisfied that Supreme Tribute, the 1st defendant in the main action and the sole plaintiff in the counterclaim, has failed to prove its counterclaim against the Land Administrator of Hulu Langat, Selangor; the Selangor State Government; the A.D.O. of Hulu Langat, Selangor and the Director of Lands & Mines, Selangor; the 6th to 9th defendants in the main action, who are the 5th to the 8th defendants in the counterclaim, based on negligence and/or breach of statutory duty.

199. In the premises, the Court dismissed the 1st defendant’s counterclaim against the 6th to the 9th defendants in the main action with costs of RM10,000.00.”

[26] The question whether the appellant was a bona fide purchaser for valuable consideration of the land was central to the issue of liability. Failure by the appellant to prove that it was a bona fide purchaser for valuable consideration would mean that the whole substratum of its counterclaim against the 5th, 6th, 7th and 8th defendants would collapse to the ground.

[27] This has to be so because if the appellant had not acquired the land in good faith, then the question whether the 5th, 6th, 7th and 8th defendants were negligent or had acted in breach of their statutory duty in effecting the transfer of the land from Goodland Realty to the appellant did not arise for the learned judge’s consideration.

[28] Under the NLC, if the land had been acquired by fraud, the appellant would not have acquired indefeasibility of title to the land in the first place. Thus, its title to the land was liable to be impeached in any event. The Court must not be seen to be assisting a litigant who comes to court with unclean hands.

[29] Whether or not the appellant was a bona fide purchaser for valuable consideration is essentially a question of fact. The burden was on the appellant to prove this fact. In this regard, the learned judge’s finding was that she could find no cogent and credible evidence from which she could conclude that the appellant was a bona fide purchaser for valuable consideration.

[30] We have no reason to disagree with the learned trial judge as the appellant’s claim that it was a bona fide purchaser for valuable consideration was not supported by any evidence. We are satisfied that there had been sufficient judicial appreciation of the evidence and the learned trial judge had neither mishandled the facts nor had misapprehended the law. The principle is trite that an appellate court does not interfere willy-nilly with findings of fact made by the trial judge who had seen and heard the witnesses giving evidence first hand.

[31] An appellate court will only interfere if the findings are so plainly wrong that a miscarriage of justice had thereby been occasioned. To justify interference, it must be shown that the findings are perverse and cannot be supported having regard to the evidence. We do not find that to be the case in the present appeal before us.

[32] Learned counsel for the appellant however attacked the finding on the ground that it flies in the face of the consent judgment dated 31.3.2015 entered into between the appellant and the three plaintiffs in the main suit, namely Eee Chong Wah, Ee Soon Kee and Goodland Realty where one of the terms was as follows:

“Pada 1.2.2012, Tanah tersebut telah secara penipuan dipindahmilik daripada Plaintif Ketiga kepada Defendan Pertama melainkan bahawa Defendan Pertama bukanlah pihak kepada penipuan dan/atau pemalsuan atau deception berkenaan dengan dan mengakibatkan penjualan dan pemindahan milik Tanah tersebut daripada Plaintif Ketiga kepada Defendan Pertama.”

(emphasis added)

[33] The ‘Defendan Pertama’ referred to in the above term is the appellant. According to learned counsel, this agreed term provides irrefutable proof that the appellant was a purchaser in good faith of the land and the 5th, 6th, 7th and 8th defendants were bound by the terms, citing Tan Geok Lan (P) v La Kuan @ Lian Kuan [2004] 3 AMR 177 F.C. The learned judge rejected the argument on the ground that the 5th, 6th, 7th and 8th defendants were not bound by the term as they were not parties to the consent judgment. We agree with the learned judge.

[34] The learned trial judge also accepted the 5th, 6th, 7th and 8th defendants’ contention that the appellant could not rely on the contents of the other consent judgment (which settled the three plaintiffs’ claim against the 5th, 6th, 7th and 8th defendants in the main suit) to absolve itself of the duty to prove that it was a bona fide purchaser for value of the land for the reason that it (the appellant) was not a party to the consent judgment. Likewise, we agree with the learned judge.

[35] The appellant relied heavily on the testimonies of Manoharan a/l Muthiah (PW1) and Pui Yin Chong (PW3), the solicitor from Messrs Peter Pui & Partners to prove that it was a bona fide purchaser for valuable consideration of the land. However, the learned trial judge found their evidence on this point to be hearsay and therefore inadmissible. PW1 and PW3 had admitted that they had no personal knowledge of the land transaction between the appellant as the purported purchaser and Goodland Realty as the purported seller.

[36] The learned trial judge noted that none of the persons in the appellant, i.e. Supreme Tribute, who had personal knowledge of the sale and purchase of the land was called to testify on behalf of the appellant as to the truth or otherwise of it’s counterclaim against the 5th, 6th, 7th and 8th defendants. Her Ladyship also noted that Chua Boon Kooi’s and Tee Choon Siong’s names were not even mentioned in the appellant’s pleaded defence and counterclaim.

[37] PW1 was the appellant’s consultant on tax matters at the time of the purchase of the land in 2012 and later as director of the appellant in 2015 whilst PW3 was the solicitor who handled the land transaction on behalf of the appellant.

[38] PW1’s evidence was that he never visited the land before the appellant purchased it. He left it to PW3 to do all the necessary checks and verification with the SSM and the Hulu Langat Land Office. PW1 also testified that he never dealt with Ee Chong Wah and Ee Soon Kee (the 1st and 2nd plaintiffs in the main action) who purportedly represented Goodland Realty in the land transaction.

[39] Under cross-examination, PW1 admitted that the sources of his information were the records and documents of the appellant which he had access to in his capacity as consultant and director of the appellant.

[40] The persons who had personal knowledge of the transaction were the two directors of the appellant, namely Chua Boon Kooi and Tee Choon Siong. But they were not called to give evidence. PW1’s explanation for not calling Chua Boon Kooi as a witness although his name was in the original list of witnesses filed by the appellant was that he was unwell and undergoing treatment for heart problems and could not come to court testify.

[41] Whilst this may be a valid reason for not calling Chua Boon Kooi to give evidence, the failure to call him and Tee Choon Siong had left a gaping hole in the appellant’s case against the 5th, 6th, 7th and 8th defendants. Without their testimonies, the Court was left without a first hand account and best evidence of what actually transpired between the appellant and Goodland Realty which culminated in the fraudulent transfer of the land from Goodland Realty to the appellant. Their evidence was absolutely crucial in determining whether the appellant had acted in good faith in the fraudulent purchase of the land from Goodland Realty. This gap could not be abridged by the testimony of PW1.

[42] Before us, learned counsel for the appellant argued that the learned judge was wrong in holding that the evidence of PW1 was hearsay as the purpose of his evidence was not to establish the truth of what Chua Boon Kooi and Tee Choon Siong told him, but merely to establish the fact that they did make the statements to PW1.

[43] According to learned counsel, this is an exception to the rule against hearsay and is therefore admissible, citing the Privy Council case of Subramaniam v Public Prosecutor [1956] MLJ 220 as applied by the Federal Court in Leong Hong Kie v Public Prosecutor and Tan Gong Wai v Public Prosecutor [1986] 2 MLJ 206.

[44] The principle laid down in Subramaniam was that evidence of a statement made to a witness by a person who himself is not called as a witness may or may not be hearsay. This was how the Privy Council articulated the position:

“It is hearsay and inadmissible when the object of the evidence is to establish the truth of what is contained in the statement. It is not hearsay and is admissible when it is proposed to establish by the evidence, not the truth of the statement, but the fact that it was made. The fact that it was made, quite apart from its truth, is frequently relevant in considering the mental state and conduct thereafter of the witness or some other person in whose presence the statement was made. In the case before their Lordships statements could have been made to the appellant by the terrorists, which, whether true or not, if they had been believed by the appellant, might reasonably have induced in him an apprehension of instant death if he failed to conform to their wishes.”

[45] It is obvious that the above pronouncement was made in the context of a criminal trial where the state of mind of the accused person became an issue, which was not the case in the present appeal. We agree, however, that what Chua Boon Kooi and Tee Choon Siong told PW1 was not hearsay as the object of the evidence, as confirmed by counsel, was not to prove the truth of what they told PW1, but merely to prove that they did in fact made the statements to PW1.

[46] But if that was the object, then the evidence, although admissible, was not capable of proving anything favourable to the appellant, let alone proving that the appellant was a bona fide purchaser for value of the land, because all that the evidence established was that the statements were made to PW1 by Chua Boon Kooi and Tee Choon Siong, nothing more and nothing less. It is not proof that the appellant had acted in good faith when buying the land from Goodland Realty. So the question is not the admissibility of the evidence but its evidential value.

[47] As for PW3, his evidence was that he was instructed by Chua Boon Kooi and Tee Choon Siong to prepare the sale and purchase agreement for the purchase of the land from Goodland Realty. He said he merely dealt with Tee Choon Siong when it came to taking instructions from the appellant. He said he was told by Tee Choon Siong that the two parties in the sale and purchase transaction had agreed on the purchase price of RM2 million.

[48] PW3 further testified that he dealt with Lim Yoke Sim (the 3rd defendant in the main suit) who purportedly represented Goodland Realty in the sale and purchase of the land. He said he was given the original copy of the GM title by Lim Yoke Sim after he had made the payment of RM2 million to Lim Yoke Sim. He then prepared the MOT for the transfer of the land to the appellant’s name.

[49] PW3 claimed that he did not know that the MOT was a fraudulent MOT due to the fraudulent acts of Chong Wing Fat (2nd defendant in the main suit) and Lim Yoke Sim, who unknown to him were not the lawful directors of Goodland Realty. He admitted though that the purchase price of RM2 million for the land was well below the market price of RM7.164 million based on the valuation made by the Inland Revenue Board. PW3 agreed that this was “very very unusual”.

[50] PW3 also testified that all of the public documents of Goodland Realty such as the Memorandum and Articles of Association, the Form 24, Form 44, Form 49 and Form 55 under the Companies Act 1965 and also the GM title were given to him by Lim Yoke Sim, who held herself out to be a director of Goodland Realty.

[51] As was the case with Chua Boon Kooi and Tee Choon Siong, Lim Yoke Sim was not present in court to testify. The appellant had obtained an order for substituted service dated 27.3.2015 and the learned counsel who handled the case in the High Court informed the learned trial judge that all reasonable measures had been taken to secure her attendance but to no avail.

[52] Learned counsel further submitted that the learned judge ought in the circumstances to have issued a warrant of arrest against this witness instead of ruling that it was fatal for the appellant not to call her as a witness. It was submitted that the listed documents that the appellant wanted to refer to the witness should have been but were not marked as exhibits.

[53] Reference was made to section 73A(1)(b) of the Evidence Act 1950 (“the Evidence Act”), specifically the proviso which states that if all reasonable effort to find the witness had been made without success, then on production of the original document, it shall be admissible in evidence. In the circumstances, it was submitted, in counsel’s own words, “there is no failure to call Lim Yoke Sim as a witness by the Appellant”.

[54] It was argued that the evidence of PW3 was admissible to prove the fact that Lim Yoke Sim did communicate with him with regard to the purchase of the land. It was submitted that the documents provided to PW3 by Lim Yoke Sim fall under the exception to the hearsay rule in that they were public records kept in Malaysia of private documents of Goodland Realty (Section 74(b) of the Evidence Act). It was submitted that what Lim Yoke Sim communicated to PW3 was not hearsay because PW3 had personal knowledge of what was communicated to him by Lim Yoke Sim.

[55] With due respect to the learned counsel, what Lim Yoke Sim communicated to PW3 was clearly hearsay as the object was not merely to prove that the communication was to made to PW3 but to prove the truth of what Lim Yoke Sim communicated to him. The fact that PW3 had personal knowledge of what Lim Yoke Sim communicated to him does not change the status of the evidence from being hearsay.

[56] Thus, the only evidential value of PW3’s evidence in this respect is that there was communication between him and Lim Yoke Sim over the purported sale of the land by Goodland Realty, nothing more and nothing less. For that reason, none of what Lim Yoke Sim communicated to PW3 could constitute proof that the appellant had purchased the land in good faith from Goodland Realty.

[57] As for learned counsel’s contention that the learned trial judge ought to have issued a warrant of arrest to secure Lim Yoke Sim’s attendance in court, we find no substance to the argument as no evidence was adduced to show that all reasonable effort had been made to secure her attendance.

[58] In our view, it was not enough for counsel who handled the case in the court below to merely inform the trial judge that the appellant had obtained an order for substituted service and that reasonable measures had been taken to secure her attendance but to no avail. In any case, it is unclear what learned counsel meant by saying that the appellant had obtained substituted service to secure the attendance of Lim Yoke Sim. The attendance of a witness is secured by the issuance of a subpoena and not by way of substituted service.

[59] Whatever may be the reason for the failure to call Lim Yoke Sim, the fact remains that without her evidence, PW3’s evidence on what she allegedly communicated to him cannot provide proof that the appellant had acted in good faith in the fraudulent purchase of the land from Goodland Realty to itself. The failure to call Lim Yoke Sim also means that there was no confirmation of PW3’s evidence that he had paid the RM2 million purchase price to Lim Yoke Sim. No receipt was tendered to prove that the alleged payment was made.

[60] With regard to the appellant’s cause of action in breach of statutory duty, we are in agreement with the learned judge that the duty would only be owed by the 5th, 7th and 8th defendants if the appellant had been a bona fide purchaser for valuable consideration of the land. Since the learned trial judge had found otherwise, the question whether the 5th, 7th and 8th defendants had been in breach of such statutory duty did not arise for the court’s consideration. The basis for her reasoning can be found at paragraph 193 to paragraph 197 of her grounds of judgment.

[61] The 5th, 7th and 8th defendants also relied on section 22 of the NLC to avoid liability. The section reads:

“No officer appointed under this Part shall be sued in any civil court for any act or matter done, or ordered to be done or omitted to be done, by him in good faith and in the intended exercise of any power, or performance of any duty, conferred or imposed on him by or under this Act.”

[62] We were referred to the decision of this Court in JW Properties Sdn Bhd v Perbadanan Kemajuan Pertanian Selangor & Anor [2016] 1 CLJ 13 where the following observations were made:

“[55] We do not think the provision provides blanket immunity to a land administrator from civil action. He is only protected if he acts in good faith and in the intended exercise or performance of his duty conferred or imposed on him by or under the Land Code. That much is clear from the provision. This brings us to the question whether the second respondent in this case had acted in bad faith in conducting the land inquiry.

[56] On the facts we can only say that there is no evidence to show that the second respondent had acted otherwise than in good faith in conducting the enquiry. He was merely performing his public duty under the Land Code. We are therefore inclined to agree with counsel that the second respondent is protected by s.22 of the Land Code.”

[63] It is pertinent to note that mala fide on the part of the 5th, 7th and 8th defendants was not pleaded by the appellant in its defence and counterclaim. In the absence of such cause of action being pleaded, we are inclined to agree with the learned ALA that the 5th, 7th and 8th defendants could seek protection under section 22 of the NLC.

[64] More importantly, on the totality of the evidence before the Court, including the fact that the 5th, 7th and 8th defendants were themselves misled into effecting the transfer, no reasonable tribunal properly appraised of the law could come to a finding that the 5th, 7th and 8th defendants had acted in bad faith in registering the land into the appellant’s name.

[65] Since the personal liabilities of the 5th, 7th and 8th defendants had not been established, it must follow that the 6th defendant (the State Government of Selangor) could not be held vicariously liable in any event: See section 6(1) of the Government Proceedings Act 1956; Kerajaan Malaysia & Ors v Lay Kee Tee & Ors [2009] 1 CLJ 633; Government of the State of Sabah v Syarikat Raspand [2010] 7 CLJ 945.

[66] For all the reasons aforesaid, we are constrained to hold that there is no merit in the appellant’s appeal. The appeal is therefore dismissed with costs to the respondents.

Signed

ABDUL RAHMAN SEBLI
Judge
Court of Appeal Malaysia

Dated: 25 July 2018

COUNSEL

For the Appellant: Ragumaren Gopal and Thanashri a/p K. Suppaya of Messrs G. Ragumaren & Co

For the Respondents: Ismail bin Baharom, Senior Federal Counsel and Mohd Syahrizal bin Zakaria, Senior Federal Counsel of the State Legal Adviser’s Office

Legislation referred to:

Companies Act 1965, Forms 24, 44, 49, 55

Evidence Act 1950, Sections 73A(1)(b), 74(b)

Government Proceedings Act 1956, Sections 5, 6, 6(1)

National Land Code 1965, Fourteenth Schedule; Sections 5A, 22, 340

Judgments referred to:

Au Meng Nam & Anor v Ung Yak Chew & Ors [2007] 4 CLJ 526

Government of the State of Sabah v Syarikat Raspand [2010] 7 CLJ 945

JW Properties Sdn Bhd v Perbadanan Kemajuan Pertanian Selangor & Anor [2016] 1 CLJ 13

Kerajaan Malaysia & Ors v Lay Kee Tee & Ors [2009] 1 CLJ 633

Leong Hong Kie v Public Prosecutor and Tan Gong Wai v Public Prosecutor [1986] 2 MLJ 206

Selvaraju Velasamy & Anor v Abdullah Ali Kutty [2009] 2 CLJ 753

Subramaniam v Public Prosecutor [1956] MLJ 220

Tan Geok Lan (P) v La Kuan @ Lian Kuan [2004] 3 AMR 177 F.C.

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