Runin Pangau[a]

- vs -

Gerada Bana

Judgment

Sulaiman Daud, JC

1. The defendant appealed under Order 56 of the RHC from the decision of the Senior Assistant Registrar given on Mac 10, 2000 dismissing the application of the defendant to strike out the statement of claim filed by the plaintiff by way of writ. The application is supported by the defendant's own affidavit affirmed on November 24, 1999 (Encl 6). The plaintiff opposed the application and filed an affidavit-in-opposition affirmed on December 6, 1999 (Encl 11). The rule under which the defendant's application to the court was made is Order 18 r 19(1)(b), (c) and (d) of the RHC or alternatively under the inherent jurisdiction of the court on the grounds it is scandalous, frivolous or vexatious, or it may prejudice, embarrass or delay the fair trial of the action, or it is otherwise an abuse of the process of the court.

2. The prayer made by the plaintiffs in the writ of summons and statement of claim are for a declaration that the estate of their late father was and is still entitled to two acres of that piece of land known as Lot 173 Block 26 Kemena Land District (hereinafter referred to as "the said land") for the time being registered in the name of the defendant and that the defendant be ordered to transfer the said two acres to the plaintiffs.

3. In their statement of claim the plaintiffs pleaded that by an agreement dated April 10, 1974 the late Bana Impin ("the late Bana") had agreed to sell two acres of the said land ("the said portion") to the late Pangau Nyelau ("the late Nyelau"). The said land is situated in a native area land. The late Nyelau had paid the full price of the said portion long before his death in 1998. As at the time of sale the said land has not been alienated to the late Bana, it was the term of the agreement that the said portion shall only be transferred to the late Nyelau upon its alienation. The plaintiffs are the daughters of the late Pangau and co-administratrixes and beneficiaries of his estate while the defendant is the daughter and beneficiary of the late Bana's estate.

4. The defendant filed her appearance on November 12, 1999. In the statement of defence the defendant admitted that the said portion was transferred to the defendant as beneficiary of the late Bana's estate but further pleaded that as the defendant is not the administratrix of the estate of the late Bana the plaintiff has no cause of action against the defendant. The defendant also pleaded that she has acquired an indefeasible title by virtue of s 132 of the Land Code (Cap 81) and that the plaintiffs' action is statue barred and the plaintiffs are guilty of laches.

5. In reply to the defence the plaintiffs contended that having the land transferred to her for no consideration, the defendant was and still is a volunteer and as such she was and still is the equitable trustee for the estate of the late Pangau in respect of the said portion. The plaintiffs further averred that the doctrine of indefeasibility of title is not applicable to the defendant who is in fact was and is still an equitable trustee to the late Pangau's estate. The plaintiffs also denied their action is statue barred.

6. On November 26, 1999 the defendant filed this application to strike out the plaintiffs' writ of summons and pleadings under Order 18 r 19 of the RHC or alternatively under the inherent jurisdiction of the court. The application was dismissed with costs by the learned Senior Assistant Registrar who heard the application, hence this appeal.

7. At the outset of the hearing both counsels for the defendant and the plaintiffs submitted their written submission. In his written submission, counsel for the defendant submitted that the defendant's application is based purely on the point of law. The main contentions of the defendant are that firstly her title to the said land is indefeasible, secondly even if she obtained such title through illegality it will not defeat her registered interest and thirdly no trust has been created in respect of the said land.

8. The powers of the court to strike out any pleadings under Order 18 r 19(1)(b), (c) and (d) of the RHC (as relied upon by the defendant) or under its inherent jurisdiction or both may be exercised at any stage of the proceedings. However the discretionary power conferred on the court to summarily strike out any pleading will only be applied to cases which are plain and obvious or where the process of the court is not used in good faith and for proper purpose. This approach was made abundantly clear in Bandar Builder Sdn Bhd v United Malayan Corporation Bhd [1993] 2 AMR 1969 where Mohamed Dzaiddin SCJ) (as his Lordship then was) said at p 1975:-

   The principle upon which the court acts in exercising its powers under any of the four limbs of Order 18r 19(1) of the Rules of the High Court 1980 are well settled. It is only in plain and obvious cases recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Son Ltd v Wilkinson, Heywood & Dark Ltd), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable (see AG of Duchy of Lancaster v L&NW Rly Co).

9. The power of the court to dismiss an action summarily is a drastic one. In Pengiran Othman Shah Pengiran Mohd Yusoff v Karabunai Resort Sdn Bhd [1996] 1 AMR 162 Siti Norma Yaakob SCJ) said at p 177:

   The discretionary power to dismiss a action summarily under Order 18 r 19 and under the inherent jurisdiction of the court is a drastic power which ...only be exercised in plain and obvious cases, as the effect of the exercise of such power is to shut altogether the plaintiff from pursuing his claim. (See Tractors (M) Bhd v Tio Chee Hing [1975] 2 MLJ 1). Whether a case is plain or obvious does not depend on the length of time it takes to argue the case, but when the case is argued on the affidavit evidence available, it becomes plain and obvious that the case has no chance of success. See Mckay v Essex Area Health Authority [1982] 2 QB 1166; [1982] AII ER 771; [1982] 2 WLR 890.) When a question of law becomes an issue, this in itself will not prevent the court from granting the application, for as long as the court is satisfied that the issue of law is unarguable and unsustainable, it may proceed to determine that question.

10. Having considered the law and procedure governing applications for striking out pleadings under Order 18 r 19 and under the inherent jurisdiction of the court, I shall now apply the law to the facts of the instant case by scrutinizing the pleadings and the affidavit evidence before me.

    INDEFEASIBLE TITLE

11. The first objection taken by the defendant is that this court has no power under ss 132 and 134 of the Land Code (Cap 81) to make the declaration or to transfer the said portion in favour of the plaintiff as prayed. Counsel for the defendant submitted that as the registered owner of the said land, the defendant is conferred with indefeasibilty of title which can only be made defeasible in case of fraud and since there is no allegation of fraud on the part of the plaintiffs the defendant's title to the said land cannot be made defensible. Council relied on a string of cases which relate to indefeasibility including Beh Lee Liang v Chew Sah Suak [1995] 4 MLJ 397, Fels v Knowles 26 NZLR 604, Kho Kwang Choon v Phuman Singh [1968] 1 MLJ 183, Buang Mohamad v Awang Jimit Awang Nook [1999] 3 MLJ 239 and Teh Bee v Maruthamu [1977] 2 MLJ 7.

12. The principle laid down in those cases can be summed up in Teh Bee v Marathamu [1977] 2 MLJ 7 where Ali Ag CJ (Malaya) (as his Lordship then was) stated at p 12:-

    Under the Torren System the register is everything. So said SK Das on p 102 of his book on the Torrens System in Malaya. I need only refer to two Privy Council cases. Creelman v Hudson Bay Insurance Co and Alan Frederic Frazer v Douglas Hamilton Walker which decided to the same effect. In Creelman v Hudson Day Insurance Co which was an appeal from British Columbia, Lord Buckmaster delivering the judgment of the Judicial Committee said on p 197:- Their Lordships are unable to accede to either of these proposition. In their opinion the certificate of title referred to in s 22 of the Land Registry Act is a certificate which, while it remains unaltered or unchallenged upon the register, is one which every purchaser is bound to accept. And to enable an investigation to take place as to the right of the person to appear upon the register when he holds the certificate which is evidence of his title, would be to defeat the very purpose and object of the statue of registration. In Alan Frederic Frazer v Douglas Hamilton Walker which was an appeal from New Zealand Lord Wilberforce said on p 580:- It is in fact the registration and not the antecedents which vests and divests title.

13. In reply the plaintiffs' counsel submitted that the said land was transmitted to the defendant by the representative of her father's estate, Eyo Bani who, as such representative, hold the said land subject to all equities effecting the same and when the said land was transmitted to the defendant it carries with it all equities affecting the land, including the equitable interest of their fathers estate's on the said portion derived by virtue of the 1974 agreement. In actual fact what is sought by the plaintiffs in the said action is for the court to declare their fathers' estate equitable interest in the said land and in consequence thereto to order the defendant to transfer the same to their fathers' estate.

14. The question is whether I have the power to make the order as prayed by the plaintiffs in the said action. The defendant's counsel answered in the negative and contended that the defendant is protected by indefeasibility of title under s 132 of the Land Code whereas the plaintiffs' counsel holds otherwise as has been said by him the defendant holds the said land subject to the equities of their late fathers' estate. Counsel for the defendant also contended that the so-called indefeasibility of title is in actual fact not absolute as evidenced by the clause.

15. "Subject to this code" as the opening expression of s 132 of the Land Code. From the provisions of s 132 of the Land Code even though it might seem at first sight that the court could maintain no claim against a registered proprietor except on the only ground mentioned therein, that is fraud, but I hold the same view as the plaintiffs' counsel that such title may be made defeasible on other grounds. Judith Sihombing in her book National Land Code, A Commentary, 2nd Edn, in discussing indefeasibility of title under the National Land Code 1965 stated at p 797 that 'the indefeasible title given on registration is subject to the statutory exceptions set out in s 340, and also to other general exception'. Among the general exceptions specified therein include binding interest and equities. In so referring to the said exception I am not unmindful of the fact that the general exception on the indefeasibility of title is much narrower in the Land Code as compared to the National Land Code.

16. After perusal of the pleadings and affidavit evidence I am of the opinion that the challenge by the plaintiffs in the instant case is not on the title of the defendant as appearing on the register document of title within the meaning of the Crellman case but it relates to a claim of their father's equitable interest in the said land by virtue of an agreement entered into by the parties' respective late fathers.

17. In such circumstances can it be said that the pleadings and the writ in the action to which this application relates is frivolous or vexatious, or may prejudice, embarrass or delay the fair trial of the action, or that it is an abuse of the process of the court.

18. On this issue I am of the view that the pleadings in question gave rise to some serious question of law and equity to be tried, that is whether the registered title of the defendant can be made defeasible on the grounds as pleaded in the statement of claim. In the circumstances I therefore hold that the plaintiffs' case cannot be regarded as manifestly bad such that the claim should be struck out.

    ILLEGALITY

19. The issue on illegality was not pleaded by the plaintiffs but was only raised in the plaintiffs' affidavit (Encl 11) where in paragraph 6 thereof the plaintiffs contended that information gathered from Exhibit "GAB-2" (the issue document at title of the said land) of the defendant's affidavit showed illegality in the transaction / dealing of the said land because it involved Eyo Bt Eni who was and still is not a native of Sarawak and is prohibited by virtue of s 8 of the Land Code to acquire any right or privilege over the said land. Paragraph (a) of s 8 of the Land Code provides that a person who is not a native of Sarawak may not acquire any rights or privileges over native area land, native customary land or interior area land. The said prohibition is however subject to certain exception as specified in s 9 of the Land Code which provide for the circumstances where non-native can acquire right or interest over such land all of which are not applicable to the said Eyo Bt Eni.

20. In answer to the allegation made by the plaintiffs' counsel, the defendant's counsel submitted that s 8 of the Land Code has no application to this case. The said Eyo Bte Bani was registered only as representative and not as a registered owner and as such she did not have any interest in or acquire any benefit from the estate. Counsel for the defendant also objected to the issue of illegality put forward by the plaintiffs in his affidavit as it was not pleaded and such omission cannot be made good by affidavit evidence. In support of this contention he referred to the judgment of HRH Raja Azlan Shah (Ag LP as HRH then was) in UMBC Bhd v Palm & Vegetable Oil (M) Sdn Bhd [1983] 1 MLJ 206, where HRH said at p 207:-

    The omission is surprising, to say at least, and we cannot but observe that any defect or omission in the Statement of Claim cannot be made good by affidavit evidence. Gold Ores Reduction C v Parr where Mathew J said that "it is most important that a defendant should know from the writ what the exact claim against him is.

21. On this point counsel for the defendant contended that illegality need not be pleaded. In support he relied on the judgment of Gopal Sri Ram (JCA) in the case of Mustafa Osman v Lee Chua where his Lordship said at Pg 145:-

    We accept as beyond argument that illegality need not be specifically pleaded, and once illegality is brought to the attention of the court before whom the action is being tried, the court upon being satisfied that the transaction is indeed illegal, is obliged to act upon it.

22. Counsel for the defendant further submitted that it is trite law that interest on the land can pass under illegal contracts. For this purpose he referred to Mustafa Osman v Lee Chua [1996] 2 MLJ 141 where at p 154 his Lordship Gopal Sri Ram (JCA) said:

    It is settled law that property in chattels and land can pass under an illegality, and therefore unenforceable contract see Tinseley v Milligan [1993] 3 All ER 65 at pg 86. Consequently the property in the house having passed to the defendant, and having put in occupation of the land, the loss should lie were it has fallen.

23. Lastly counsel for the defendant, relying on the case of Buang Mohamad submitted that the illegality will not defeat the defendant's interest.

24. From the submission of both counsels I am of the view the question of illegality can only be decided after facts evidence has been given as it is dangerous to decide questions on legal principles without knowing the fall facts. I am also of the view that the effect of illegality, arising from statutory prohibition, on indefeasibility of title also raises serious legal issues which is best heard at a trial proper rather than to be summarily decided at this application. Be that as it may, my finding in this issue shall not have much bearing on this application as I have decided earlier that the registered interest of a proprietor may be made defeasible on ground other than fraud.

    NO TRUST

25. On the issue of trust the plaintiffs' counsel submitted that the defendant is not entitled to submit thereon as it is not pleaded. I cannot accept this argument. Paragraph (3) of the plaintiffs' "reply to defence" clearly provides as follows:-

    In reply to paragraph 4.1 of the defence the plaintiff contended that the doctrine of indefeasibility of title is not applicable here because the defendant was and still a volunteer and not a purchaser for value. That being the case and being an equitable trustee to Panggau's estate the defendant is liable to transfer the said (2) acres of the land to Panggau's estate.

26. The defendant's counsel also denied that any trust has been created between the plaintiffs or the plaintiffs' late father and the defendant. He drew the court's attention to the case of Lee Phek Choo v Ang Guan You [1975] 2 MLJ 146 where the Federal Court held that the Statue of Fraud applied to Sarawak, and where there was nothing to manifest the declaration of trust, it could not be that a trust was created in respect of the properties. With respect I am of the view that principle laid down in Lee Phek Choo had no application to the instant case as the factual basis on which the decision was made is different from the instant case. In Lee Phek Choo the respondent alleged that when the property was transferred from A to B, A had intended that the properties were to be held on trust but in the instant case the defendant is alleged to be an equitable trustee by virtue of a sale and purchase agreement between the plaintiffs' late father and the first registered owner of the land who is also the defendant's father.

27. It is alleged that when the late Nyelau, the plaintiffs' late father, paid for the full purchase price of the land to the late Bana, the later became an equitable trustee to the former in respect of the said portion so purchased. When the said land was transmitted from the representative of the late Nyelau, that is Eyo bt Eni, to the defendant for no consideration, the said land as contended by the plaintiff, was transmitted together with their fathers' equitable interest.

28. In the circumstances I am of the view the plaintiffs' claim on the defendant as an equitable trustee to their late fathers' estate in respect of the said portion of the said land has raised some issues which require serious discussion which cannot be summarily dismissed.

29. The final issue raised by the defendant's counsel is that the defendant cannot be sued for the recovery of the said portion as she is not the administrator for the estate of the late Bana. He submitted that it is trite law that once a person passed away his estate is vested in the probate officer until the letter of administration is issued to the administrator. In reply the plaintiffs' counsel contended that the plaintiffs are not suing the estate of the late Bana but is taking this action against the defendant in her personal capacity as the said land is for the time being registered in her name. He argued that since the defendant is a mere volunteer and not a bona fide purchaser for value her title to the said land is not indefeasible and as such the court can make the order as prayed in the suit in question. I can see some merit in the argument and could see no reason why this action cannot be taken against the defendant in her personal capacity as such.

30. Having considered all the above matters I am of the view that the pleadings and the writ taken out by the plaintiff is not frivolous, vexatious or may prejudice, embarrass or delay the fair trial of the action or that it is otherwise an abuse of the process of the court. Accordingly, I dismissed the appeal with costs to be taxed unless agreed upon.

Cases

Bandar Builder Sdn Bhd v UMBC Bhd [1993] 2 AMR 1969; Pengiran Othman Shah Pengiran Mohd Yusoff v Karabunai Resort Sdn Bhd [1996] 1 AMR 162; Beh Lee Liang v Chew Sah Suak [1995] 4 MLJ 397; Buang Mohamad v Awang Jimit Awang Nook [1999] 3 MLJ 239; Fels v Knowles 26 NZLR 604; Teh Bee v Maruthamu [1977] 2 MLJ 7; Kho Kwang Choon v Phuman Singh [1968] 1 MLJ 183; Lee Phek Choo v Ang Guan You [1975] 2 MLJ 146; Mustafa Osman v Lee Chua [1996] 2 MLJ 141; UMBC Bhd v Palm & Vegetable Oil (M) Sdn Bhd [1983] 1 MLJ 206.

Legislations

National Land Code 1965: s.340

Rules of the High Court 1980: Ord.18 r 19(1)(b), (c), (d), Ord.56

Sarawak Land Code (Cap 81): s.8, s.9, s.132, s.134

Authors and other references

Judith Sihombing, National Land Code, A Commentary, 2nd Edn

Representation

Musa Dinggat (Musa Dinggat Advocates) for Plaintiffs

KY Lin (Kadir, Wong, Lin & Co) for Defendant.

Notes:-

[a] suing as co-administratix and beneficiaries of the estate of Pangau Nyelau @ Panggau Nyadau also spelt as Panggau Nyanday (deceased), both Rh Ghanggan, Selabit, Sebauh.

This decision is also reported at [2000] 4 AMR 4415