GEE BOON KEE & ORS V TAN POK SHYONG [2018] 1 CLJ 565
FEDERAL COURT, PUTRAJAYA
Coram:
ZULKEFLI AHMAD MAKINUDIN PCA
SURIYADI HALIM OMAR FCJ
HASAN LAH FCJ
ZAINUN ALI FCJ
AZIAH ALI FCJ
DATE OF DECISION: 6 NOVEMBER 2017
Decree of specific performance – Transfer of land – Incidental order allowing Appellants to apply for additional orders – application to have carriage of decree pursuant to incidental order – whether a ‘fresh action’ or to have carriage of decree of specific performance to completion – whether barred by Limitation Act 1953, ss. 2, 6(3) – whether Court can exercise inherent power to order transfer
BACKGROUND FACTS
The Appellants were the purchasers of two pieces of lands, namely Lots 512 and 513. However, for some reasons, they were not registered as the owners of the lands. In 1986, the Appellants sought for a declaration that the seller (“TAT”) was the trustee of the said lands, and for specific performance of the sale and purchase agreements in respect of the lands. In 2000, the High Court only granted specific performance of the sale and purchase agreements between the Appellants and TAT (“2000 Order”). Thereafter, TAT’s appeal to the Court of Appeal was dismissed. The COA had made an incidental order allowing the Appellants to apply to the High Court for orders to execute the specific performance of the sale and purchase agreements (“2005 Incidental Order”).
On demise of TAT in 2011, the Respondent became the legal representative of TAT’s estate.
Thereafter, lot 512 was charged by TAT to RHB Bank and auctioned off by RHB Bank. Following that, the Appellants entered a caveat against lot 513.
Subsequently, there was another action filed in respect of lot 513. The Appellants filed an action in court, seeking an order [Encl. 292] for the Respondent to transfer lot 513 to the Appellants.
In 2015, the High Court allowed the Appellants’ application. Due to the fact that the sale and purchase agreements were no longer capable of being specifically enforced in accordance with the terms as a result of the foreclosure proceedings in respect of lot 512, it was open to the High Court to order that the Respondent to transfer lot 513 to the Appellants. In allowing the application to transfer the land, the learned Judge granted the orders sought and opined that he had inherent power to order a relief differed from the 2000 order. The fact that specific performance was granted in the 2000 order meant that the Respondent was the trustee of the land (“2015 Order”).
Dissatisfied with the 2015 Order, the Respondent appealed. The Court of Appeal allowed the Respondent’s appeal and ruled that the 2000 order only granted specific performance but did not declare TAT as a trustee. It was wrong for the High Court to invoke court’s inherent power to grant a relief which differed from the 2000 order. Further, relying on Daud v Ibrahim and Seema Development Sdn Bhd v Mah Kim Chye, Encl. 292 was an ‘action’ and a ‘proceeding in a court of law’ and therefore was barred by Section 6(3) of the Limitation Act 1953.
The Appellants sought leave to appeal to the Federal Court. In granting leave to appeal, the Federal Court allowed the three questions of law to be ventilated before it, namely:
ISSUES
- Whether having regard to Johnson v Agnew, limitation applied to bar an application to have carriage of a decree of specific performance;
- Whether bearing in mind Lowsley v Forbes and United Malaysian Banking Corp Bhd v Ernest Cheong Yong Yin, an application to have carriage of a decree of specific performance to completion was an action upon a judgment within Section 6(3) Limitation Act 1953; and
- Whether the decision in Daud v Ibrahim applied to an application to have carriage of a decree of specific performance to completion.
DECISION
- Following the proposition of law in Johnson v Agnew, once an order for specific performance is made, the contract remains in effect and it does not merge in the judgment for specific performance, and a court of equity or one exercising equity jurisdiction, maintains full control of the matter.
- The word ‘action’ in Sections 2(1) and 6(3) Limitation Act 1953 means a fresh action and does not include an application to have carriage of a decree of specific performance to completion, following Lowsley v Forbes and UMBC v Ernest Cheong Yong Yin.
- Therefore, Enclosure 292 is not a fresh action but it is merely to carry the decree of specific performance to completion. The 2005 incidental order gave the Appellants liberty to pursue the carriage of the order.
- Section 6(3) Limitation Act 1953 was not applicable on the facts. In any event, the application was brought within the 12 years’ limitation period, ie. It was filed on 7.10.2015 pursuant to that incidental order given on 25.10.2005.
- Although it was argued that the facts in Daud v Ibrahim are very similar to the present case and to hold that the Appellants’ application under encl. 292 was barred by limitation of 12 years under Section 6(3) Limitation Act 1953, the Federal Court was of the view that they are distinguishable. In this case, the COA had made incidental order in 2005 in respect of the carriage of the specific performance decree. As such, the issue in the instant case concerned with the Court’s continued supervisory control over the specific performance decree in its equitable jurisdiction.
- The Federal Court was of the view that the Court of Appeal failed to take into account the 2005 incidental order made by the Court of Appeal which gave the Appellants the liberty to make application for additional orders in respect of the order for specific performance. By virtue of that incidental order, the Court was given wide powers to order any form of relief in accordance with the equitable principles as the Court controls the execution, variation or cancellation of the order for specific performance. See: Yarwinder Gill v Siu-May Tsang, Pamigold Limited [2003] WL 21554631. As such, this is an appropriate case for the Court to exercise its inherent power to order for lot 513 to be transferred to the Appellants.
Written by TEOH YEN YEE
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