Master Pyrodor Sdn. Bhd. v Tai Thong Flower Nursery Sdn. Bhd., 21-12-2015

• Judge: Y.A. TUAN LEE SWEE SENG
• Judgment Date: 21 December 2015
• Court: High Court (Malaysia)
• Record Number: 22NCVC-2-2011

IN THE HIGH COURT OF MALAYA AT IPOH

IN THE STATE OF PERAK DARUL RIDZUAN

SUIT NO: 22NCVC-2-2011

BETWEEN

MASTER PYRODOR SDN BHD ... PLAINTIFF

AND

TAI THONG FLOWER NURSERY SDN BHD ... DEFENDANT

JUDGMENT OF

Y.A TUAN LEE SWEE SENG

1. The plaintiff bought a piece of subdivided land from its registered owner Cameron Fresh Farm Sdn Bhd. It is about 20 acres of agricultural land in Cameron Highlands. This subject land was part of an earlier bigger piece of land held under a single title of 502 acres. Cameron Fresh Farm Sdn Bhd had applied for subdivision of the bigger piece of land into 2 pieces; one of 20 acres and another of 482 acres. Approval of the Estate Land Board ("ELB") under the National Land Code 1965 ("NLC") was obtained for the subdivision on 23 December 2008.

2. The sale and purchase agreement for the sale of the subject land was entered into between Cameron Fresh Farm Sdn Bhd and the plaintiff on 26 February 2007. That was before the approval of the ELB for the subdivision. The plaintiff became the registered owner of the subject land. It brought an action for damages for trespass against the defendant who had been occupying and continues to occupy part of the subject land, planting its crops and vegetables. It also prayed for vacant possession. The only defence raised was that a certain individual had given them permission to occupy the land.

3. At the trial in the first instance the defendant raised for the first time that no approval of the ELB for the transfer had been obtained for the transfer of the land to the plaintiff. It is common ground that the subject land is an estate land and that approval of the ELB would be required under s 214A NLC.

4. That took the plaintiff by surprise and all that the plaintiff could say was that it had left everything to its solicitors handling the transaction and verily believed that all regulatory requirements had been complied with. The defendant submitted no case to answer and the High Court granted judgment for the plaintiff. See the case of Master Pyrodor Sdn Bhd v Tai Thong Flower Nursery Sdn Bhd [2013] 10 CLJ 467.

5. On appeal to the Court of Appeal by the defendant, the Court of Appeal allowed the appeal and set aside the judgment of the High Court. It also remitted the matter back to the High Court to hear further evidence from the plaintiff as to whether approval of the ELB had been obtained for the transfer of the subject land to the plaintiff The stand taken by the Court of Appeal is that if there was no approval from the ELB for the transfer of the subject land to the plaintiff, then the plaintiff would be in no position to bring this action and that the plaintiff's claim would stand dismissed.

Dispute

6. At the rehearing, the plaintiff, now represented by a different set of solicitors, admitted that no approval of the ELB had been obtained for the transfer of the subject land! The plaintiff adduced no further evidence and the defendant, as expected, submitted no case to answer. The defendant took the stand that as what was an issue then, is no longer an issue now, they would not be calling any witnesses in as much as the plaintiff cannot be reopening their case.

7. Learned counsel for the plaintiff, nevertheless, argued that the plaintiff was still entitled to judgment as the Court of Appeal had not considered the full import and implication of registered ownership under s 89 NLC in its judgment and that the defendant being a trespasser, has no locus to challenge the plaintiff's registered ownership of the subject land. It was further submitted that the opinion expressed by the Court of Appeal was at best only tentative and that res judicata does not apply. In short, it was submitted that the High Court was at liberty to come to its own decision in spite of the directions given by the Court of Appeal.

8. Learned counsel for the defendant vigorously objected to this. It was not unlike waving the flag of victory, when with confident poise and considerable persuasion, he voiced vehemently that there being an admission of no approval from the ELB for the transfer of the subject land to the plaintiff, the matter ended there as the direction of the Court of Appeal was clear and unambiguous; it was to give a chance to the plaintiff to adduce evidence of the ELB's approval and that being not forthcoming, the plaintiff's claim must stand dismissed.

Deliberation

The Binding Precedent Point

9. Learned counsel for the plaintiff, Mr Porres Ryan, submitted that this Court is at liberty to come to its own decision as the opinion of the Court of Appeal in allowing the defendant's appeal and setting aside the whole of the judgment of the High Court and remitting the matter to the High Court for the plaintiff to adduce evidence of the ELB was a tentative opinion awaiting full argument at the High Court after evidence of the approval of the ELB had been adduced. In effect, the point posited by learned counsel is that upon admission that there was no approval of the ELB, the plaintiff could still argue afresh a matter said not to have been canvassed in the Court of Appeal, i.e. the effect of s 89 NLC vis-a-vis s 214A and s 340 NLC.

10. Whilst an appellate court may not dictate to a trial court the decision it should make when taking further evidence upon a matter being remitted to it for further evidence to be adduced, the directions of the Court of Appeal here, must nevertheless be followed, as part of the doctrine of binding precedent and as required of judicial discipline and deference. The Court of Appeal does not speak in vain. The tenor and thrust from the text of the Court of Appeal's judgment is that if there had been no approval obtained for the transfer of the subject land to the plaintiff, then the plaintiff's title had been obtained illegally in contravention of the expressed prohibition under s 214A NLC and the transfer instrument is void by virtue of s 24 Contracts Act 1950 and the transfer liable to be set aside. The plaintiff, having founded its claim for trespass on its title as registered owner having possession, would fail; that title having been obtained in breach of s 214A NLC is defeasible. The reasoning of the Court of Appeal in Tai Thong Flower Nursery Sdn Bhd v Master Pyrodor Sdn Bhd [2014] 6 MLJ 341 is reproduced below:

"[53] The requirement that the approval of the estate land board must be obtained before the execution of any agreement for the transfer conveyance or disposal of estate land or any portion of it was reinforced by the provisions contained in para 214A(10A)(b). The moment an agreement is executed without the approval of the estate land board for the transfer, conveyance or disposal of estate land, such execution became conclusive proof that the transfer, conveyance or disposal was being done in contravention of the clear prohibition in sub-s 214A(1).

[54] While s 214A of the NLC did not itself provide that an agreement to transfer, convey or dispose of estate land without the approval of the estate land board was void, the fact that such transfer, conveyance or disposal was prohibited by sub-s 214A(1), and the act of transferring, conveying or disposing constituted an offence under sub-s 214A(10A)(a), meant that any contract for such transfer, conveyance or disposal, and consequently any memorandum of transfer pursuant to such contract, was liable to be struck down as being void for illegality under s 24 of the Contracts Act 1950 .

[55] The registration of any title under a void instrument excludes such registration from the indefeasibility protection of s 340 of the NLC.

[56] As the plaintiff ’s claim to the right of possession of the subject land was based on its claim to be the registered owner of the subject land, we were of the considered view that the evidence before us and the High Court did not support that claim of that right.

[57] We therefore allowed the appeal and set aside the orders of the High Court.

[58] However, the documents in the appendices attached to the plaintiff’s submissions showed that there was approval of the estate land board for the subdivision of the original land, and alluded to there being in existence approval of the estate land board for the transfer of the subject land.

[59] In those circumstances, we ordered that the matter be remitted to the High Court for the plaintiff to adduce the evidence of such approvals. The defendant in turn was granted liberty to elect afresh whether to adduce evidence. We ordered costs to follow the event in the High Court." (emphasis added)

11. In the light of the clear language of the Court of Appeal above, this Court upon being appraised with the admission of no approval from the ELB for the agreement to transfer the subject land and consequently with no further evidence to be adduced by the plaintiff, has only one decision to make and that is to dismiss the plaintiff's claim. The remitting of the case back to the High Court was for a very specific and restrictive purpose: to adduce evidence of the approval of the ELB. Had the evidence of no prior approval of the ELB being clearly before the Court of Appeal, there is no doubt that the Court of Appeal would not only have allowed the defendant's appeal but that the plaintiff's case would not have been remitted back to the High Court for further evidence to be adduced by the plaintiff on the said approval. There is no other way to escape the natural consequence of the plaintiff's claim being dismissed in the light of the opinion expressed by the Court...