[2018] 1 LNS 2016 Legal Network Series

MALAYSIA

IN THE HIGH COURT OF SABAH AND SARAWAK AT SIBU

[ORIGINATING SUMMONS NO. SBW 24NCvC-3/1-2018 (HC2)]

IN THE MATTER of Order 7,

Order 28 and Order 92 r. 4 of Rules
of Court 2012

AND

IN THE MATTER of Sections 4,

38 and 41 of Specific Relief Act
1950

AND

IN THE MATTER of Sections of

10, 38, 57, 66 and 68 of Contracts
Act 1950

AND

IN THE MATTER of Sale and

Purchase Agreement dated
22.1.2008 between Vila Mekar Sdn
Bhd (Company No.708122-H) and
Ting Tui Ping (WN.KP.670711-13-
5407)

AND

IN THE MATTER of a parcel of

land described as Sublot 29 (Survey
Lot 1168) of Parent title described

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as Lots 105, 106 and 107 all of

Block 1 Sungai Merah Town District
together with one (1) unit of double
storey Semi-Detached House

AND

IN THE MATTER of Public Tender

on 7.11.2017 pursuant to Deed of
Assignment and Facilities
Agreement both dated 11.2.2008

AND

IN THE MATTER of Memorandum

of Sale dated 7.11.2017,
Proclamation of Sale and Conditions
of Sale both dated 25.9.2017

AND

IN THE MATTER of Letter of

Offer dated 4.12.2017 from Public
Bank to Lim Ching Ching (WN
KP.771206-13-5636)

BETWEEN

LIM CHING CHING (F)

(WN.KP.771206-13-5636)
No.8-A, Lane 1,
Tebu Road
96000 Sibu Sarawak ... Plaintiff

AND
(1) VILA MEKAR SDN BHD

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(Company NO.708122-H)
No.8B (2 nd Floor), Lane 4
Jalan Tuanku Osman 96000
Sibu, Sarawak

AND/OR

No. 2, 2 nd Floor,
Lorong Pahlawan 6,
96000 Sibu, Sarawak ... 1 st Defendant

(2) RHB BANK BERHAD

(Company No.6171-M)
RHB Centre,
Jalan Tun Razak
50400 Kuala Lumpur ... 2 nd Defendant

GROUNDS OF DECISION

INTRODUCTION

[1] In the Originating Summons, the Plaintiff claims the following

reliefs:-

[1] that the 1 st Defendant shall not be entitled to claim

the sum of RM88,435.60 from the Plaintiff;

[2] that the 1 st Defendant shall not unreasonably

withhold the consent to sale and assignment of a parcel of
land described as Sublot 29 (Survey Lot 1168) of Parent
title described as Lots 105, 106 and 107 all of Block 1
Sungai Merah Town District together with one (1) unit of
double storey Semi-Detached House (“the Property”);

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[3] that the 1 st Defendant shall within forty-eight (48)

hours from the date of this Order issue Letter of Consent
and Undertaking to the Plaintiff or alternatively, this
Order shall serve as the Letter of Consent and
Undertaking duly approved by the 1 st Defendant;

[4] that the 1 st Defendant shall pay damages to the

Plaintiff for withholding consent unreasonably in the
reasonable sum to be assessed by this Honourable Court;

[5] that the 1 st Defendant shall at its own cost and

expense and as expeditious as possible, secure a separate
issue document of the Property and shall upon the
issuance of the individual document of title for the
Property, effect a direct transfer of the said individual
document of title to the Plaintiff or to the Plaintiff’s
purchaser/assignee or nominees together with registrable
memorandum of transfer; and

[6] that the 2 nd Defendant shall not forfeit the sum of

RM39,500.00 paid by the Plaintiff to the 2 nd Defendant and
shall not impose interests for any delay caused in making
full payment of balance purchase price to the 2 nd
Defendant or alternatively the interests shall be borne by
the 1 st Defendant to the 2 nd Defendant;

[7] that the 1 st and 2 nd Defendants do pay the Plaintiff the

costs of this action; and

[8] Such other order(s) or relief(s) as this Honourable

Court deems fit.

FURTHER AND/OR ALTERNATIVELY TO THE

PRAYERS 1 TO 8:

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[9] that the 2 nd Defendant shall within fifteen (15) days

from the date of this Order, cause the 1 st Defendant to
issue Letter of Consent and Undertaking to effect the
completion of the sale and assignment to the Plaintiff,
failing which the 2 nd Defendant shall upon the lapse of
fifteen (15) days refund the full deposit in the sum of
RM39,5000.00 to the Plaintiff;

[10] the 2 nd Defendant shall not impose interests against

the Plaintiff for any delay caused in making full payment
of the balance purchase price or alternatively the interests
shall be borne by the 1 st Defendant to the 2 nd Defendant;

[11] that the 1 st and 2 nd Defendants do pay the Plaintiff the

costs of this action; and

[12] Such other order(s) or reliefs) as this Honourable

Court deems fit.

FURTHER AND/OR ALTERNATIVE TO THE PRAYERS

1 TO 12:

[13] that the Memorandum of Sale dated 7.11.2017,

Proclamation of Sale and Conditions of Sale both dated
25.9.2017 shall be null and void and the 2 nd Defendant
shall refund the sum of RM39,500.00 or any sum thereof to
the Plaintiff and the 2 nd Defendant shall pay damages
suffered and to be suffered by the Plaintiff to the Plaintiff;

[14] that the 1 st and 2 nd Defendants do pay the Plaintiff the

costs of this action;

[15] Such other order(s) or relief(s) as this Honourable

Court deems fit.

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BACKGROUND

[2] The subject matter of the dispute herein is in respect of a parcel

of land known as Sublot 29 (Survey lot 1168) of Parent title
described as Lots 105, 106 and 107, all of Block 1 Sungai Merah
Town District together with one (1) unit of double storey Semi-
Detached House (“the Property”).The pertinent chronology of
events are as follows:-
22.1.2008 The 1 st Defendant sold the Property to one Ting Tui
Ping (WN.KP.670711-13-5407) (“Ting”) vide a Sale
and Purchase Agreement dated 22.1.2008 (“the said
Sale and Purchase Agreement”). The 1 st Defendant
was the Developer/Beneficial Owner by virtue of the
Construction Agreement dated 10.6.2016 and was
allocated with the Property by virtue of the
Supplementary Agreement dated 6.12.2005.
11.2.2008 Ting obtained loan facility from the 2 nd Defendant and
therefore signed agreements with the 2 nd Defendant.
The Property was assigned to the 2 nd Defendant as
security for the loan facility.
Before Ting defaulted in repayment of loan facility.
5.5.2016
5.5.2016 The 2 nd Defendant wrote to the 1 st Defendant to
enquire on the outstanding payment of purchase price
of the Property.
12.5.2016 The 1 st Defendant replied to the 2 nd Defendant, stating
that there was an outstanding sum of RM88,435.60
(“the said Outstanding Sum”) which is due and owing
by Ting.

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7.11.2017 The 2 nd Defendant held public tender to auction the

Property on 7.11.2017 to recover the outstanding sum
under the loan facility. The Plaintiff, through her
husband, successfully bid the Property with the tender
price of RM395,000.00. The sum of RM39,500.00 was
paid by the Plaintiff as the deposit. There were
Proclamation of Sale, Conditions and Sale and
Memorandum of Sale stating the terms and conditions
of the auction.
4.12.2017 The Plaintiff successfully obtained loan facility from
Public Bank Berhad. However, the financier requested
for letter of consent and undertaking by the Developer
before the loan could be released. Up to this date, the
monies have not been released by the financier to the
2 nd Defendant for the balance of purchase price due to
the issue of consent.
28.12.201 The Plaintiff was informed by the M/S David Allan
7 Sagah & Teng Advocates that the firm was in conflict,
hence could not act for her for the required
documentations for the Property and facility.
4.1.2018 The Plaintiff appointed M/S Stephen Robert & Wong
Advocates to write in to the 1 st Defendant to obtain
letter of consent and undertaking.
M/S Stephen Robert & Wong Advocates requested for
8.1.2018
extension time from the 2 nd Defendant.
9.1.2018 The 1 st Defendant refused to sign or issue the letter of
consent and undertaking to the Plaintiff and demanded
for payment of RM88,435.60 before the same could be
released.

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11.1.2018 The 2 nd Defendant approved extension of time of 3

months with the condition that payment of interests in
the sum of RM8,853.41 to be paid within 14 days
from 11.1.2018, i.e. by 25.1.2018, even though the
last day for the Plaintiff to pay the balance of the
purchase price is on 04.02.2018. Further, the 2 nd
Defendant also stated that the interest would not be
refunded even if the Plaintiff is able to settle the
purchase price earlier than the 3 months period.
15.1.2018 The Plaintiff requested for waiver of interests but
rejected by the 2 nd Defendant on 17.1.2018.
22.1.2018 Demand letter was issued to the 1 st Defendant to issue
letter of consent and undertaking.

[3] The cause papers filed by parties are as follows:-

[1] Originating Summons dated 25.1.2018 [Encl.1];

[2] Affidavit in Support [Enclosure 2];

[3] Affidavit in Support (2) [Enclosure 3];

[4] The 2 nd Defendant’s Affidavit in Opposition (1)

[Enclosure 5];

[5] The 2 nd Defendant’s Affidavit in Opposition (2)

[Enclosure 7];

[6] The 1 st Defendant’s Affidavit in Opposition

[Enclosure 8];

[7] The Plaintiff’s Affidavit in Reply [Enclosure 9];

[8] The 2 nd Defendant’s Affidavit in Opposition (2)

[Enclosure 11];

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[9] The 2 nd Defendant’s Affidavit in Opposition

[Enclosure 12];

[10] The 1 st Defendant’s Affidavit in Opposition (II)

[Enclosure 13]; and

[11] The Plaintiff’s Affidavit in Reply (2) [Enclosure 14].

THE 1 st DEFENDANT’S APPEAL AGAINST THE DECISION OF

THE COURT

[4] This Court delivered its judgment in respect of the Originating

Summons herein on 29.6.2018 and the 1 st Defendant, being
aggrieved by the decision of this Court, appealed to the Court of
Appeal against the whole of the decision of this Court

THE 1 st DEFENDANTS CONTENTIONS

[5] The 1 st Defendant contended that It could be seen from the

Exhibit - YNC-2 that the 1 st Defendant had on 12 th May, 2016,
written a letter to Messrs. Tang & Partners Advocates, Sibu
informing and putting a notice that Ting still owed the 1 st
Defendant, the said Outstanding Sum of RM88,435-60.

[6] The 1 st Defendant also contended that pursuant to the

Proclamation of Sale of the public tender of the Property arising
from the Ting’s default in repaying the loan owing to the 2 nd
Defendant, it is stated that “the prospective tenderers are
advised to seek legal advice on all matters in connection with
the tender sale, including Conditions of Sale herein” and under
Clause 20 of Conditions of Sale. It is clearly stated that “The
Purchaser shall within ninety (90) days from the date of the
tender sale herein apply to and obtain from the

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Developer/Vendor and/or other relevant authorities (if

applicable) for consent to transfer or for assignment of the
property and the Purchaser has to comply with all the terms and
conditions as imposed by the Developer/Vendor or other
relevant authorities (if applicable) in granting the said consent
to transfer or assigning to the Purchaser within the said period
of ninety (90) days or within such period as may be specified by
the Developer/Vendor and/or the relevant authorities (if
applicable) whichever is earlier and to keep the Assignee or the
Assignee’s Solicitors informed at all times of the development
and to forward a copy of the consent to Assignee’s Solicitors
upon receipt of the same. All fees, charge and expenses in
connection with or incidental to the application shall be borne
by the Purchaser”.

[7] The said Proclamation of Sale and the Conditions of Sale had
been put up for public viewing and also notified that prospective
tenderers are to seeking legal advice on the same and also at the
same time to check with the relevant authorities and/or the
developer on the status of the property.

[8] The 1 st Defendant further contended that had the Plaintiff

conducted the requisite due diligence before making her bid
and/or making inquiries with the 1 st Defendant, which she was
obliged to under the terms of the said Proclamation of Sale and
Conditions of Sale, she would have discovered the existence of
the said Outstanding Sum of RM88,435.60 owing by Ting, to the
1 st Defendant. Since the Plaintiff did not check properly, she
cannot now turn round and complained that the 1 st Defendant is
withholding the consent unreasonably and that the 1 st Defendant
ought to grant the requisite consent.

CONSIDERATION OF THE ORIGINATING SUMMONS

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WHETHER THE 1 st DEFENDANT IS ENTITLED TO WITHHOLD

THE CONSENT TO THE PLAINTIFF BY REASON OF THE NON-
PAYMENT OF M88,435.60 ALLEGEDLY BEING THE SUM
OWING BY TING. THE PREVIOUS PURCHASER TO THE 1 st
DEFENDANT?

[9] The Plaintiff contended that the 1 st Defendant has no right to

withhold the requisite consent and refuse the issuance of such
consent to the Plaintiff and that the said Outstanding Sum of
RM88.435. 60, demanded by the 1 st Defendant contravened the
law and is not legally claimable against the Plaintiff.

[10] The Plaintiff also contended that the 1 st Defendant has failed to
explain Ting’s liability to pay the said Outstanding Sum of
RM88,435.60. Further the 1 st Defendant, is a mere bare trustee
and as such, has no right to demand for the payment of the said
Outstanding Sum of RM88,435.60 and refuse to grant consent.

[11] On the issue of whether the demand of the 1 st Defendant for

payment of the said Outstanding Sum of RM88,435.60 to the
Plaintiff contravened the law, this Court finds that such a
demand, if for administrative fee or for whatever fee, is in
breach of Regulation 10 of The Housing Development (Control
and Licensing) Regulations 2014 (“HDR 2014”) which states as
follows:-

“10(1) Subject to sub-regulation (2), where in the sale of a

housing accommodation to which no separate or strata
title has been issued, no housing developer shall impose
any administrative fee or any fee by whatever name
called’ exceeding one hundred and fifty ringgit upon any
purchaser or subsequent purchaser for giving his consent,

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if required, for such purchaser to resell the housing

accommodation.

(2) No housing developer shall collect any fee by

whatever name called for giving his consent to any
purchaser or subsequent purchaser of a housing
accommodation to assign his rights and benefits to and in
the contract of sale to any financial institution providing a
loan for such purchaser to finance or part finance the
purpose of the housing accommodation.”
(Emphasis is mine)

[12] The said Regulation 10 of HDR 2014 states that, for consent to
assignment by way of transfer, the maximum fee that can be
charged by the 1 st Defendant is RM150.00 whereas for consent
to assignment by way of security (to Financier), it shall be free
of charge.

[13] Regulation 31(1) of HDR 2014 states that whoever is in breach,

shall on conviction, be liable to, not more than five thousand
ringgit or to imprisonment for a term of not exceeding three
years or to both. Further Sub-regulation 2 provides that the
licence of a licensed housing developer may be revoked and
suspended by reason of the offence committed under the HDR
2014.

[14] Thus, it is illegal for the 1 st Defendant to demand for payment of

the said Outstanding Sum of RM88.435.60 and the Plaintiff is
only statutorily required to pay maximum RM 150.00 under
Regulation 10 of HDR 2014 and the 1 st Defendant is not at
liberty to charge anything else on the Plaintiff unless the 1 st
Defendant can prove that the said Outstanding Sum of
RM88,435.60 was the unpaid balance of the purchase price of

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the Property, otherwise It would be in breach of the said

Regulation 10.

[15] As regards the said Outstanding Sum of RM88,435.60, the 1 st

Defendant has deposed in Enclosure 8 in paragraphs 7 and 8
affirming that Ting owed the 1 st Defendant for the said
Outstanding Sum of RM88,435.60 and the same has been
conveyed to the 2 nd Defendant. Based on Exhibit “YNC-2”
exhibited in Enclosure 8, the 1 st Defendant indicated that the
said Outstanding Sum of RM88,435.60 was due under the said
Sale and Purchase Agreement which was signed back on
22.1.2008, indicating that the said Outstanding Sum of
RM88,435.60, was somehow related to the Sale and Purchase
Agreement.

[16] This Court however finds that the 1 st Defendant had on,
18.2.2008, confirmed to the 2 nd Defendant that all differential
sum in the respect of the said Sale and Purchase Agreement has
been paid in full (See Exhibit “STHC-1”). Thus it is most
inherently improbable that the 1 st Defendant is entitled to the
said Outstanding Sum of RM88,435.60 for the following
reasons:-

(a) No demand was issued by the 1 st Defendant against

Ting for any sums due and payable under the said
Sale and Purchase Agreement;

(b) No supporting evidence showing the indebtedness of

Ting or that Ting was owing the said Outstanding
Sum of RM88,435.60 to the 1 st Defendant.; and

(c) All differential sums relating to the said Sale and

Purchase Agreement has been paid in full by Ting
before loan was released by the 2 nd Defendant to the

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1 st Defendant and this was in fact confirmed by the

1 st Defendant themselves.

[17] Further the said Outstanding Sum of RM88,435.60, even if it

exists at all, would have been barred by limitation period as the
said Sale and Purchase Agreement was signed on 22.1.2008.
There is no explanation on how the said Outstanding Sum of
RM88,435.60 was computed and how it came about, by the 1 st
Defendant. Pursuant to the said Sale and Purchase Agreement
dated 22.1.2008, there was no provision for payment of any
monies save for the purchase price which according to the 1 st
Defendant was paid in full.

[18] The said Regulation 10 of HDR 2014 prohibits any further

payment other than RM150.00 maximum fee, thus the said
Outstanding Sum of RM88,435.60 due by Ting to the 1 st
Defendant is not contractually binding on the Plaintiff, as the
Plaintiff has no contractual relationship with the 1 st Defendant
which requires the Plaintiff to make any such payment.

[19] In the premises, the 1 st Defendant has no right to make any

claim against the Plaintiff by reason of Ting’s debt (if any)
unless the 1 st Defendant is able to prove that the said
Outstanding Sum of RM88,435.60 falls under “the outstanding
charges” claimable from the balance of purchase price of the
said Sale and Purchase Agreement, as stated at Clause 13 of the
said Conditions of Sale (Exhibit “LCC-2”).

[20] As regards the 1 st Defendant’s contention that the Plaintiff only

has herself to blame and reliance on the case of Hock Hua Bank
Berhad v. Siaw Khoi Joo [2004] 1 LNS 375, is concerned, this
Court finds that the aforesaid case is distinguishable from the
present case the subject matter of the above cited case, was on
the. application of proceeds of sales pursuant to Section 151 of

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the Sarawak Land Code which governed the foreclosure

proceedings of sale of charged property. In other words, the sale
in that case was a sale of a property with individual title and
therefore there was no issue of getting a consent from the
Developer at all. In the present case, there was no individual
title issued yet in respect of the Property which was why consent
from the developer was required and the sale was pursuant to
assignment by way of security and not by memorandum of
charge.

[21] Further, the charges in question in Hock Hua Bank’s case supra
are outstanding amounts of service charges payable to Wisma
Saberkas Management Corporation and the court ruled that it did
not fall under Section 151 of the Sarawak Land Code thus could
not be paid from the proceeds of sale. The court then ruled that
Wisma Seberkas Management Corporation can however take a
separate action to claim the outstanding charges under the
Sarawak Strata Titles Ordinance, but not to claim it from the
proceeds of sales.

[22] In the present case herein, the 1 st Defendant is claiming for

some unknown amount which suddenly came about, after
confirmation by the 1 st Defendant to the 2 nd Defendant that there
was no amount owing by Ting in respect of any sums payable
under the said Sale and Purchase Agreement. Hence the claimed
amount by the 1 st Defendant herein, without any explanation or
basis is unjustifiable and illegal under the Housing Development
(Control and Licensing) Ordinance 2013. Furthermore, until to
date, the 1 st Defendant was not able to tell the Court as to how
the said Outstanding Sum of RM88,435.60, were derived and for
what purpose. Without showing the basis of the claim of the said
Outstanding Sum of RM88,435.60, this Court finds that the 1 st
Defendant’s claim of the said Outstanding Sum of RM88,435.60

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is clearly not justifiable and lawful. Thus, the refusal of the 1 st

Defendant, to grant consent is without basis.

[23] Based on the above, the Hock Hua Bank’s case supra is
distinguishable from the present case and could not be used to
support the 1 st Defendant’s contention.

[24] The 1 st Defendant also relied on Clause 20 of the said

Conditions of Sale of the Public Tender of the Property which
states that the Plaintiff has to apply to and obtain from the
Developer for consent to transfer or for assignment and the
Purchaser has to comply with all the terms and conditions as
imposed by the Developer. This Court is in agreement with the
Plaintiff’s contention that the “terms and conditions” referred to
therein must be referring to lawful terms and conditions as to
interpret it otherwise will render the said Clause 20, null and
void for contravening the law. The said Clause 20 of the
Conditions of Sale does not have the effect of empowering the
1 st Defendant to impose unreasonable conditions. Neither is the
Plaintiff bound to obey or comply whatsoever conditions
imposed by the 1 st Defendant.

[25] This Court finds that that the Plaintiff is not bound to make
enquiries with the 1 st Defendant as to whether there are any
charges owing by the previous purchaser which are not stated in
the said Sale and Purchase Agreement as an amount which is not
stated in the said Sale and Purchase Agreement would not be
relevant to the subsequent sale or auction.

[26] While the Plaintiff has to accept the Property as it is, the
acceptance thereto does not extend to any arbitrary,
unreasonable and illegal charges or fees imposed by the 1 st
Defendant. The 1 st Defendant sought to equate and accord the
said Outstanding Sum of RM88,435.60 which is a substantial

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sum, as the same standing as the outstanding charges as in the

case of Hock Hua Bank’s case supra. In the present case, this
Court finds that the said Outstanding Sum of RM88,435.60 is
not legally due and payable to the 1 st Defendant as the same is
not proven by the 1 st Defendant.

[27] Furthermore, even if there are any outstanding charges for the
Property as in the case of Hock Hua Bank supra, it has been
agreed under Clause 13 of the said Conditions of Sale that
outstanding charges which are lawfully due to the 1 st Defendant
shall be paid by the 2 nd Defendant out of the balance of purchase
money. If the claimed sum is lawful, the 1 st Defendant could
always get its entitlement from the proceeds of sale arising from
the public tender of the Property and it is not for the 1 st
Defendant to refuse to grant consent as ransom to prematurely
claim for the charges now, assuming that the claim falls under
“the outstanding charges”.

[28] Thus, the 1 st Defendant has no basis at all to refuse to grant

consent to the Plaintiff, by insisting on the payment of the said
Outstanding Sum of RM88,435.60 especially since the 1 st
Defendant is a mere bare trustee and the said Outstanding Sum
of RM88,435.60. is not justifiable and lawful.

WHETHER THE 1 st DEFENDANT IS A MERE BARE TRUSTEE

OF THE PROPERTY

[29] In the present case, pursuant to Clause 2 of the said Sale and
Purchase Agreement dated 22.1.2008, the purchase price for the
Property was RM428,000.00, and the same was paid in full by
way of direct of payment of differential sum to the 1 st Defendant
in the sum of RM78,000.00 (See Exhibit “STHC-1” of Enclosure
12) and the loan facility in the sum of RM350,000.00, totaling

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RM428,000.00(See Facility Agreement Exhibit “LCC-14” of

Enclosure 9).

[30] Further, by virtue of the Deed of Assignment dated 11.2.2008

(by way of security) (Exhibit “A” of Enclosure 6), all rights and
interests of Ting under the said Sale and Purchase Agreement,
have been assigned to the 2 nd Defendant, as security for the loan.
This assignment was consented to, by the 1 st Defendant whereby
the 1 st Defendant undertook, at the last page of the said Deed of
Assignment, to consent to the assignment and to deliver the title
free from encumbrances to the 2 nd Defendant together with the
instrument of transfer in favour of Ting, the Assignor.

[31] Arising from the said Deed of Assignment, all rights and
interests over the Property are vested with the Assignee, the 2 nd
Defendant, and this is acknowledged by the 1 st Defendant itself.
Thus the 1 st Defendant had no right whatsoever over the
Property and is a mere bare trustee.

[32] Support can found in the Federal Court case of Tan Ong Ban v.
Teoh Kim Heng [2016] 3 ML J 23 where the Federal Court held
inter alia as follows:-

“[34] According to this principle, when a purchaser of a

property has performed his or her contractual obligation
upon the full settlement of the purchase price besides
executing all the formal documents to effect the
registration of ownership, equity accords him or her with
all the rights and privileges of a legal owner over the
property. The purchaser thus enjoys the benefit of being
the owner of the acquired property even though he or she
has yet to become its registered owner.

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[35] This is clearly demonstrated by the case of J Raju v.

Kwong Yik Bank Bhd & Anor [1994] 2 MLJ 408; [1994] 2
AMR 1220, where the Supreme Court held that:... the
vendor of the land is only regarded as having divested
himself of the beneficial interest in his land and vested it
on the purchaser at the time when the purchase money
had been paid in full....

[37] Under this principle of beneficial ownership, the

vendor becomes a bare trustee for the purchaser in
respect of the transacted property, while the purchaser
assumes the position of beneficial owner having right in
rem over the property. The purchaser is commonly
accepted as having a beneficial interest in the land on the
execution of the contract and upon which specific
performance may be granted by the court. This beneficial
interest is also sufficient to entitle the purchaser to enter a
caveat under the NLC

....

[39] In short, a beneficial or equitable owner of a

property stands in the same position as the legal owner in
terms of enforcing proprietorship rights against the world
at large. The only difference is that a beneficial owner is
yet to be vested with the legal title.”
(Emphasis is mine)

[33] Further support is also found in Hong Leong Bank Bhd (which
has taken over all assets and liabilities of Hong Leong Finance
Bhd) v. Sum-Projects (Bros) Sdn Bhd [2010] 7 MLJ 39 where the
court dealt with the meaning of “assignment”. In this case, the
court held that assignment is said to be a process where the
Sbenefit of a contract has been transferred to a third party. This

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is a transaction between the person entitled to the benefit of the

contract (the assignor) and the third party (the assignee) as a
result of which the assignee becomes entitled to sue the person
liable under the contract (the debtor).

[34] Pursuant to Clause 2.1 of the said Deed of Assignment executed

in favour of the 2 nd Defendant, the full and entire rights titles
and interests of Ting, in and to the Property and under the said
Sale and Purchase Agreement were absolutely assigned to the
2 nd Defendant, with the express consent of the 1 st Defendant.

[35] Pursuant to Clause 25 of the said Sale and Purchase Agreement

(See Exhibit “LCC-1” of Enclosure 2), the 1 st Defendant agreed
that consent to subsequent assignment shall not be unreasonably
withheld.

[36] In the light of this Court’s above findings, this Court finds that
the 1 st Defendant’s demand for payment of the said Outstanding
Sum of RM88,435.60 before granting the requisite consent, is
arbitrary, unreasonable, unlawful and without basis.

[37] Guidance can be found in the case of Kemayan Engineering

(SEA) Pte Ltd v. Sunyap Development Sdn Bhd [2002] 1 CLJ 22
where the court rejected the unjust condition imposed by the
Developer. In this case, the issue was whether the requirement
of that the plaintiff is required to pay RM10,000.00 as
“administrative charges” to the Defendant for the Defendant’s
consent and endorsement on the transfer and assignment of the
properties amounts to unconscionable conduct or abuse of power
by the Defendant.

[38] In Kemayan Engineering (SEA) Pte Ltd’s case supra, the court
took into account the fact that the Plaintiff has been holding the
property in question for more than 10 years and the sale and

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purchase agreement do not set out any time frame for the strata
titles to be issued or obtained by the Defendant. The Defendant
on the other hand did not explain the steps taken in procuring
the strata title and therefore has failed to exculpate itself from
any blame for long delay in obtaining the strata titles. The Court
then ruled as follows:-

“In the circumstances it would not be just for the

Court to allow the Defendant to collect the so-called
“administrative charges” for an indefinite long
period as in this case the whole idea of cl. 6(9) I
think, is to discourage short term speculation by
certain purchasers. In the circumstances of this case,
the Plaintiff should not be penalized for wanting to
transfer the properties which he would have able to
do so without having to pay the RM10,000.00 had it
not been for the Defendant’s own indolence. All that
the Plaintiff needs to pay to the Defendant is the
actual costs and expenses that are incidental to the
transfer and endorsement of the Deed of
Assignment.”
(Emphasis is mine)

[39] In the present case, the 1 st Defendant has failed to procure the
issuance of individual titles for the last 10 years and the 1 st
Defendant is now attempting to enjoy benefit from its own
failure. This Court finds that the 1 st Defendant, being a
developer of the Property, shall not be allowed to charge or take
the opportunity to charge the subsequent purchaser, further
unlawful, arbitrary, unreasonable and oppressive charges other
than the statutory prescribed fee or lawful charges when consent
is requested or asked for.

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[40] In the case of Lee Ming Chong Sdn Bhd v. Prudential Properties
Sdn Bhd [2012] 8 MLJ, the plaintiff was desirous of disposing of
the property and so on 15.2.2001 the plaintiff entered into a sale
and purchase agreement (SPA) to sell the office lotto one Abdul
Haiyum bin Abdul Hamid (sub-purchaser) for RM700.000 who
paid a deposit of RM70,000.00 to the plaintiff. As the strata title
has not been issued, any sub sale would be by way of a deed of
assignment between the plaintiff and its subpurchaser and to be
duly endorsed by the Defendant developer as hitherto has been
the practice.

[41] The Defendant had imposed seven conditions on the plaintiff in

the subsale instead of the three conditions stipulated in section
4.09 of the SPA. The said sub-purchaser decided to terminate
the SPA between him and the plaintiff by letter dated 29.6.2001
because the defendant’s/developer’s consent was not obtained
within the requisite period stated in the SPA.

[42] The plaintiff took the view that the defendant in breach of the
SPA had unreasonably withheld its consent to the subsale and
the Deed of Assignment and that had caused the subsale to be
terminated. The plaintiff claimed for its loss of profit of
RM265.280 which is the difference between the original
purchase price of RM437.720 and the subsale price of
RM700.000 together with interest and costs.

[43] The court then held inter alia as follows:-

“[22] Had the developer applied for strata titles

timeously to the whole Imbi Plaza, purchasers would
not have this problem seeing that the principal SPA
was signed as long ago as 17 October 1992. Why
should a purchaser be subject to more conditions to
fulfill when a similar purchaser of an office lot with

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a strata title issued would not ever need to seek the

developer’s consent for anything when the
purchaser should want to dispose of his property?

[23] Even if there is room for the developer to

reserve a residue of discretion to withhold consent,
such a clause is totally inconsistent with the whole
scheme and structure of the sale of the property
where a strata title is to be issued seeing that the
purchaser having paid the full purchase price to the
developer owes the developer no further obligation
consistent with the purchaser’s right as the absolute
beneficial owner of the property with the developer
being a bare trustee.

[24] Judging the conduct of the giving or

withholding consent to the assignment in the
conveyancing context of a purchaser who had paid
the full purchase price to the property, I would say
any imposition of any conditions should be viewed
with much circumspection as the only reason for
coming back to the developer is more for
administrative expediency than having to fulfill any
continuing obligations on the part of the purchaser.
The developer will have the continuing obligation to
ensure that the strata title once issued is duly
registered in the name of the purchaser and for so
long as the developer delays in applying for the
strata title it will be saddled with this continuing
obligation.”

[44] This Court finds that since the 1 st Defendant is a mere bare
trustee pending the issuance of individual document of title of

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the Property, the 1 st Defendant has no right whatsoever over the

property. Therefore, it has no right to refuse consent which
would have the consequential effect of asserting proprietary
rights over the Property by preventing the sale.

ORDER

[45] In the light of this Court’s above findings, this Court thus grants
an order in terms of the Originating Summons with costs subject
to payment of allocator fees and to the following terms:-

(1) that the 1 st Defendant shall not be entitled to

claim the sum of RM88,435.60 from the Plaintiff;

(2) that the 1 st Defendant shall not unreasonably

withhold the consent to sale and assignment of a
parcel of land described as Sublot 29 (Survey Lot
1168) of Parent title described as Lots 105, 106 and
107 all of Block 1 Sungai Merah Town District
together with one (1) unit of double storey Semi-
Detached House;

(3) this Order shall serve as the Letter of Consent

and Undertaking duly approved by the 1 st Defendant;

(4) that the 1 st Defendant shall pay damages to the

Plaintiff for withholding consent unreasonably in the
reasonable sum to be assessed by this Court;

(5) that the 1 st Defendant shall at its own cost and

expense and as expeditious by as possible, secure a
separate issue document of the Property and shall
upon the issuance of the individual document of title
for the Property, effect a direct transfer of the said

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individual document of title to the Plaintiff or to the

Plaintiff’s purchaser/assignee or nominees together
with a registrable memorandum of transfer;

(6) that the 2 nd Defendant shall not forfeit the sum

of RM39,500.00 paid by the Plaintiff to the 2 nd
Defendant and the interests payable to the 2 nd
Defendant, shall be paid by the 1 st Defendant to the
2 nd Defendant; and the 2 nd Defendant shall continue
with tender shale to the Plaintiff and Plaintiff shall
pay the balance of the purchase price to the 2 nd
Defendant within 3 months from today and all
interests shall be paid Defendant to the 2 nd
Defendant.

(7) that the 1 st Defendant do pay the Plaintiff, the

costs of this Application, in the sum of RM2,000.00
subject to payment of allocatur, shall be paid by the
1 st and 2 nd Defendants to the Plaintiff. No order as to
costs to be made against the 2 nd Defendant.

Dated: 18 DECEMBER 2018

(LEE HENG CHEONG)

High Court Judge
Sibu, Sarawak

COUNSEL:

For the plaintiff - Clement Wong & Then Siaw Lian

For the 1 st defendant - Daren Ling

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For the 2 nd defendant - William Ting Siew Chon

Case(s) referred to:

Hock Hua Bank Berhad v. Siaw Khoi Joo [2004] 1 LNS 375

Tan Ong Ban v. Teoh Kim Heng [2016] 3 MLJ 23

Hong Leong Bank Bhd (which has taken over all assets and liabilities
of Hong Leong Finance Bhd) v. Sum-Projects (Bros) Sdn Bhd [2010]
7 MLJ 39

Kemayan Engineering (SEA) Pte Ltd v. Sunyap Development Sdn Bhd

[2002] 1 CLJ 22

Lee Ming Chong Sdn Bhd v. Prudential Properties Sdn Bhd [2012] 8
MLJ

Legislation referred to:

Sarawak Land Code, s. 151

Housing Development (Control and Licensing) Regulations 2014,

regs. 10, 31(1)

Notice; This copy of the Court’s Grounds of Decision is subject to

formal revision.

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