Triumphal Enterprises Sdn Bhd

- vs -

H.S. Gan

Judgment

H.H. Lee CJ (Borneo)

(delivering the judgment of the Court)

1. We allowed this appeal and stated we would give our reasons later. We do so now.

2. The respondent, Gan Heah Siew was the son of deceased Gan Teng Seong who died on 5 May 1974. He was made an executor and as such he sued the appellant for the benefit of the estate.

3. On 22 July 1973 the deceased and the appellant entered into an agreement whereby the deceased agreed to transfer a piece of land described as EMR 341 Lot 755 in the Mukim of Mentakab in the District of Temerloh, Pahang to the appellant for development purposes. In consideration of the transfer the appellant promised to build for the deceased three double storey shophouses, eleven terrace houses and six semi-detached houses. The entire costs for the construction of the buildings would be borne by the appellant. The transfer was to be effected on the execution of the agreement.

4. Under cl 5 the appellant was obliged to submit the lay-out plan to the State Planning or other relevant authority for approval within one month from the date of agreement. Under cl 6(a) it is provided that in the event of planning approval being refused the appellant agreed to re-transfer the land to deceased and the agreement shall cease to have any effect. Upon approval of the plan, the appellant shall forthwith apply for conversion and sub-division of the land and for separate titles for each lot. Construction work shall commence three months after approval of the building plans. The agreement shall be binding on the personal representatives of the deceased and successors-in-title and assigns of the appellant.

5. The deceased duly executed a valid and registrable transfer of the land in favour of the appellant and registered it on 10 November 1973.

6. The respondent alleged that after a lapse of nearly four years no approval had been obtained. So, he claimed for specific performance by the re-transfer of land to him. He also claimed for

   1. an order for the appellant to bear the costs, fees and taxes in connection with the re-transfer of the land,

   2. damages for breach of contract,

   3. costs and

   4. other reliefs.

   He claimed to have written several letters to the appellant in 1974, 1975 and 1976 through his solicitors but received no answer. On 25 January 1977, his present solicitors wrote to the appellant invoking the said cl 6(a) and asked for re-transfer of the land. Again, there was no response from the appellant.

7. By a summons-in-chambers the respondent applied for summary judgment under Ord 14A r 1 of the Rules of the Supreme Court, 1957 on the terms of the minutes of proposed judgment annexed. He alleged that the plan produced was prepared in March 1974, about eight months after the execution of the agreement.

8. The appellant denied that no lay-out plan was submitted. The explanation was given by Yan Sin Min in his affidavit dated 29 November 1978 in the following paragraphs:—

   4.

   It is not true that no layout plan was submitted by the defendant pursuant to the agreement dated 22 July, 1973. (5) Before the said agreement was signed and before the land therein referred was transferred to the defendant the plaintiff’s father, since deceased, had agreed to the arrangement and the terms as contained in the said agreement. (6) In anticipation of the said agreement and in pursuance of the said arrangement the said deceased did on 17 April, 1973 at the expense of the defendant submit the layout plan to the Town Council of Temerloh and Mentakab for approval. The said layout plan was prepared by Messrs Lam & Yap, Pt II Architects who were in fact employed by the defendant. (7) On 26 June 1978 I was notified by Messrs Lam & Yap that the said layout plan had been approved by the said Town Council. I now produce the letter from the said Town Council addressed to Messrs Lam & Yap indicating approval of the said layout plan, the said letter is annexed hereto and marked as exh ‘YSM 1’. (8) Having been so notified that the said layout plan had been approved I whereupon engaged Messrs Syarikat Jurukur Malaysia a firm of surveyor to make an application on behalf of the defendant to the Pemungut Hasil Tanah, Temerloh for the conversion of land use and subdivision of the said land in terms of the approved layout plan. A copy of the said surveyor’s application is annexed hereto and marked as exh ‘YSM 2’. (9) I have been advised and verily believe that the Pemungut Hasil Tanah, Temerloh cannot now deal with the defendant’s said application in view of a caveat lodged by the said deceased and one lodged by the plaintiff. In spite of repeated requests the plaintiff has refused to consent to the said application or otherwise withdraw the said caveat.

9. It was wrong of the appellant to remain silent on receipt of the several letters from the respondent. This had clearly antagonised the respondent into taking action and entering a caveat. The plan seems to have been now approved by the Temerloh Town Council but not as yet been approved by the State Executive Council.

10. The agreement was clearly badly drafted in the light of facts which could not be disputed by parties. For example, the transfer was effected in November 1973 i.e. four months after the execution of the agreement and not at the date of the execution of the agreement. Also, the plan was submitted under the deceased’s name before the agreement was made. One of the recitals in the agreement reads:—

    AND WHEREAS the lay-out plan has yet to be approved by the State Planning or other relevant authority.

11. The implication is clear — that a plan has already been submitted and approval is awaiting. The learned judge had not referred to the said recital. The respondent would not know what the deceased had agreed with the appellant before the deceased died. Because of the caveat the appellant could not comply with cl 7 of the agreement in applying for conversion and subdivision of the land and for separate titles.

12. It is the submission of the appellant that even if there is no defence, specific performance is not the proper remedy. The agreement is not a normal sale and purchase of land but rather an exchange. Also, there are triable issues which could not be settled by affidavits but by a proper trial. Nevertheless, the learned judge in his judgment stated that:—

    But clearly looking at the arguments and facts adduced there had been no compliance by the respondents of the contract in essential matters. Firstly, and the most essential and glaring one, is that the respondents had failed to submit the layout plan to the planning authority for approval within one month of the execution of the agreement. They however said they had done so through the deceased. Indeed such application was made by the deceased himself in his letter....

13. Even if the authority has given approval to the plan with less houses, that would not affect the agreement so long as requisite number of buildings would be given to the respondent by the appellant. On the evidence it is not possible to speculate whether the deceased might have changed his mind regarding the lay-out plan he submitted earlier before he executed the agreement. This will necessitate explaining away the recital mentioned earlier. The learned judge was right to point out that:—

    The fact that the agreement was made three months after the said letter (exh WHW 1) must give rise inevitably to the assumption that at the time when the agreement was made the parties were aware of the existence of the said letter.

14. The use of the deceased’s name was clearly a matter of convenience and in no way should he be made to suffer financially as feared by the learned judge.

15. Generally, Ord 14A applies to specific performance, either by a vendor or purchaser. It is the submission of the appellant that where there is no sale or purchase of land specific performance is not appropriate.

16. In Robshaw Brothers Ltd v Mayer [1957] Ch 125 the vendor purported to sell certain leasehold property to a purchaser. The purchase price was expressed as “nil”. This was done because the property was held at a substantial rent. The consideration for the transfer was the assumption that the tenant would undertake the obligations contained in the lease. Consequently, no money passed. The vendor commenced an action for specific performance and applied for summary judgment under Ord 14A of the English Rules of the Supreme Court substantively the same as our corresponding Ord 14A. Held, as the sale was not one where money was to pass it was not within the ambit of the order.

17. In that case Upjohn J, as he then was, had to construe the meaning of “sale or purchase” in relation to Ord 14A. He stated at page 132:—

    But I come back to the question of construction. I am really being asked in this case to give to the phrase ‘sale or purchase’ not its plain prima facie meaning of sale or purchase for money, but to cover a transaction for valuable consideration. The Order does not use that phrase. I can find no context which would entitle me to extend the prima facie meaning of ‘sale or purchase’ in this Order. I cannot see how I can enlarge it, for instance, to include an exchange which plainly is not a sale or purchase. Nor, for instance, could I extend it to the case of a transfer in consideration of what is not normally described as a sale or purchase, e.g. marriage. I think that I must give to these words their strict primary meaning, and that is ‘sale or purchase in consideration of money.’ Accordingly, the preliminary point succeeds, and I must dismiss this application under Ord 14A.

18. If there is no monetary consideration for a transaction it is not a “sale or purchase” within the meaning of Ord 14A, and summary judgment for specific performance cannot be given under that order.

19. The decision in Robshaw Brothers Ltd v Mayer, supra, has led to an amendment of the Ord 14A and Ord 86 of the Supreme Court Practice, which has now been adopted in our Ord 81 of the Rules of the High Court, 1980. “An exchange of any property” can now be dealt with in an application for summary judgment. The respondent may now, if he can advise himself of any prospects of success, bring a similar application for summary judgment under Ord 81 of the Rules of the High Court, 1980 where he had failed under Ord 14A of the Rules of the Supreme Court, 1957.

20. Accordingly, we allowed the appeal and set aside the judgment. Injunction to continue. Costs in the cause. Deposit to be refunded to the appellant.

Cases

Robshaw Brothers Ltd v Mayer [1957] Ch 125

Legislations

Rules of the High Court 1980: Ord 81

Representations

Joseph Loo for the appellant.

OC Lim for the respondent.