EZZEN HEIGHTS SDN BHD v. IKHLAS ABADI SDN BHD; SOO YUH MIAN (INTERVENER)
COURT OF APPEAL, PUTRAJAYA
LOW HOP BING JCA, SYED AHMAD HELMY JCA, ZAHARAH IBRAHIM JCA
[CIVIL APPEAL NO: J-02-2454-2009]
30 DECEMBER 2010
[1] This appeal was brought by the appellant-company ("the plaintiff") against the decision of the High Court in dismissing with costs the plaintiff's amended originating summons ("the OS") which sought, inter alia, a declaration that the Joint Venture Agreement entered into between the plaintiff as the landowner and the respondent-company ("the defendant") as the developer ("the JVA"), and the Irrevocable Power of Attorney ("the IPA"), both dated 4 January 2007, are null and void, or alternatively a declaration that the IPA is invalid and annulled.
Brief Facts:
The plaintiff and the defendant entered into the JVA to jointly develop the plaintiff's land. However, plaintiff's former solicitors unilaterally declared that the JVA has been terminated which the defendant challenged. The plaintiff then filed the OS seeking, inter alia, to declare the JVA and IPA null and void. Before the High Court could deliver judgment on 3 September 2009, the plaintiff had purportedly sold the defendant's lots to the intervener.
The plaintiff's OS was dismissed by the High Court and the Court of Appeal heard and dismissed the plaintiff's appeal.
The Plaintiff's case :
The plaintiff relied solely on the failure of the plaintiff (as the landowner) to obtain the approval for the amended building plans within the prescribed period of six months under cl. 2(a) and (b) to persuade the High Court, and now the court of Appeal, to declare the JVA and the IPA null and void, in order to repudiate the plaintiff's liabilities under these two documents.
The Defence :
The Defendant asserted that the JVA and the IPA are valid as the defendant is the beneficial owner of the defendant's lots which the plaintiff had no right to sell, and that no title whatsoever could pass to the intervener. In the circumstances, the defendant prayed for consequential orders to remove the intervener's private caveat, to restrain the plaintiff and the intervener from dealing in any manner whatsoever with the defendant's lots, to direct the plaintiff to honour the undertaking to deliver the issue document of title to the defendant, and to deliver the defendant's lots to the defendant, in the interest of justice based on the inherent jurisdiction of the court
The Intervener :
The intervener maintained that the intervener was a bona fide purchaser, and so no consequential orders should be made. The plaintiff's learned counsel associated himself with the intervener's submission.
After considering the Legal Effect Of the JVA And IPA, the Court of Appeal found that eventhough the Plaintiff has clearly breached its fiduciary duties and obligation to obtain approval, the plaintiff is not permitted to rely on its on breach to repudiate its liabilities under the JVA and the IPA.
As the defendant, being the beneficial owner, is entitled to the defendant's lots, the plaintiff had no title to sell the defendant's lots to the intervener. The plaintiff could not pass any title to the intervener. Nemo dat quod non habet (No one can give what he does not have). Hence, the intervener could not have acquired the interest of the defendant's lots and could not legally defeat the defendant'' entitlement under the terms of the valid JVA.
The sale and purchase of the defendant's lots cannot be construed as a bona fide transaction.
Consequential Orders :
Order 92 r. 4 confers on the High Court and, by virtue of r. 4 of the Rules of the Court of Appeal 1994, on this court, inherent powers eg, to make consequential orders to prevent injustice. Order 92 r. 4 merits reproduction as follows:
4. For the removal of doubts it is hereby declared that nothing in these rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court.
Pursuant to O. 92 r. 4, the Court of Appeal made the following consequential orders:
(1) an order that the caveat entered by the intervener vide on the land be removed;
(2) an order restraining the plaintiff and the intervener whether by themselves or their agents or otherwise from dealing in any manner whatsoever with the defendant's lots;
(3) an order directing the plaintiff and/or its solicitors including in possession of the issue document of title of the land, to forthwith deliver and deposit the original issue document of title with the Defendant's soclitors; and
(4) an order directing the plaintiff and the intervener to deliver vacant possession of the defendant's lots to the defendant on or before 27 October 2010 ie, within three months from the date the Court of Appeal made its order on 27 July 2010.
