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SUCCESSION: Administration - Sale of land - Appeal by administrators of deceased's estate against order decreeing specific performance of sale and purchace agreement

DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANGKUASA RAYUAN)

RAYUAN SIVIL NO. A - 02 - 798 - 1999

ANTARA

1. LAU YOKE YEE (P)

(Sebagai Pentadbir Harta Pusaka Low Sau Chuin @ Lau Chaik Tong @ Lau Sau Chuin, si mati)

2. LAU YOKE YEE (P) … PERAYU-PERAYU

DAN

1. TING LIANG TENG

2. SEW BING LAM @ SEOW BING LAM … RESPONDEN-RESPONDEN

(Dalam perkara mengenai Guaman Sivil No. 5 Tahun 1980

dalam Mahkamah Tinggi Malaya di Ipoh

Antara
  1. Ting Liang Teng
  2. Sew Bing Lam @ Seow Bing Lam … Plaintif-

Plaintif

Dan
  1. Lau Yoke Hee (P)
  2. Lau Yoke Yee (P)

    3. (Kedua-duanya adalah Pentadbir Harta Low Sau Chuin @ Lau Chaik Tong @ Lau Sau Chuin, si mati)

  3. Lau Yoke Hee (P)
  4. Lau Yoke Yee (P) … Defendan-Defendan

Dan Antara

  1. Ting Liang Teng
  2. Sew Bing Lam @ Seow Bing Lam … Plaintif-Plaintif

Dan

  1. Lau Yoke Hee (P)
  2. Lau Yoke Yee (P)

    3. (Kedua-duanya adalah Pentadbir Harta Low Sau Chuin @ Lau Chaik Tong @ Lau Sau Chuin, si mati)

  3. G.D. Balakrishnan

    4. (Eksekutor Harta Pusaka Lau Yoke Hee, simati)

  4. Lau Yoke Yee (F) … Defendan-Defendan)

Coram: Gopal Sri Ram, J.C.A.

Tengku Baharudin Shah bin Tengku Mahmud

Zulkefli bin Ahmad Makinudin

ORAL JUDGMENT

(Gopal Sri Ram, J.C.A. delivering judgment):

1. This is the judgment of the Court.

2. This is an appeal directed against the order of the learned judge decreeing specific performance of an agreement made in November 1976 between the respondents ("plaintiffs in the court below") and the appellants ("defendants in the court below) acting as administrators of the estate of Low Sau Chuin @ Lau Chaik Tong @ Lau Sau Chuin, (deceased).

3. The main issue that fell for determination by the learned judge was whether the sale and purchase agreement had been entered into voluntarily by the first appellant or whether it was tainted by coercion in the sense defined by Section 15 of the Contracts Act, 1950. After the trial at which oral testimonies were led by both sides and having heard the parties’ respective witnesses being tested on cross-examination, the learned judge came to the conclusion that the first appellant was not a truthful witness. The learned counsel who had argued this case for the appellants stated that the learned judge was wrong in his conclusion. It is the appellants’ case that the learned judge failed to have regard to critical parts of the evidence which demonstrate want of true consent on the part of the first appellant. Our attention was drawn to the fact that soon after the execution of the agreement the first appellant refused to accept the RM10,000.00 paid by the respondents as earnest money. This, it was submitted was a pointer towards want of consent. With respect we cannot agree. We have read the judgment of the learned judge very carefully and we find that he has undertaken with unusual acuteness a judicial appreciation of the oral evidence presented before him.

4. In a case such as the present, we would respectfully remind ourselves of what Lord Shaw of Dunfermline said in Clarke v Edinburgh Tranways Co. 1919 S.C. (H.L.) 35 at page 36 as follows:

"When a judge hears and sees witnesses and makes a conclusion or inference with regard to what on balance is the weight of their evidence, that judgment is entitled to great respect, and that quite irrespective of whether the judge makes any observations with regard to credibility or not. I can of course quite understand a Court of Appeal that says that it will not interfere in a case in which the judge has announced as part of his judgment that he believes one set of witnesses, having seen them and heard them, and does not believe another. But that is not the ordinary case of a cause in a court of justice. In courts of justice in the ordinary case things are much more evenly divided; witnesses without any conscious bias towards a conclusion may have in their demeanour, in their manner, in their hesitation, in the nuance of their expressions, in even the turns of the eyelids, left an impression upon the man who saw and heard them which can never be reproduced in the printed page. What in such circumstances, thus psychologically put, is the duty of the appellate court? In my opinion, the duty of the appellate court in those circumstances is for each judge of it to put himself, as I now do in this case, the question, Am I – who sit here without those advantages, sometimes broad and sometimes subtle, which are the privilege of the judge who heard and tried the case – in a position, not having those privileges, to come to a clear conclusion that the judge who had them was plainly wrong? If I cannot be satisfied in my own mind that the judge with those privileges was plainly wrong, then it appears to me to be my duty to defer to his judgment."

5. Having scrutinized the printed evidence we are inclined to agree with the learned judge that the first appellant is not a truthful witness. We are therefore disinclined to disturb the finding of fact on the issue of coercion made by the learned judge.

6. That brings us to the next point. The complaint here is that the learned judge should not have decreed the specific performance because the co-administrator, Lau Yoke Hee (deceased), the first defendant in the Court below who is not before us in this appeal, had not assented to the sale. There is absolutely no merit in this argument. As pointed out by my learned brother, Tengku Baharudin Shah JCA, the co-administrator had in fact written a letter that not only shows that she was aware of the sale but had assented to it.

7. The third ground advanced before us is that the decree of specific performance is bad in law because the consent of the beneficiaries of the deceased’s estate was not obtained before it was made. Learned counsel for the appellants relies on section 60 (2) of the Probate and Administration Act 1959 which reads as follows:

"Unless the Court otherwise directs, no sale, transfer, conveyance or assent in respect of immovable property shall be made without the concurrence of all the personal representatives of the deceased; and subject as aforesaid, where there are several personal representatives the power of all may, in the absence of any direction to the contrary in the will or grant of administration, be exercised by any one of them."

8. With respect, we are unable to agree with learned counsel’s interpretation of this section. It is not, and it has never been the law that the sale of the property belonging to the deceased cannot be transacted without the consent of the beneficiaries of that estate. There are a number of authorities on that point but we only need to refer to two of them. The first is Itam bte Saad v Chin bte Abdullah [1974] 2 MLJ 53. In that case, Syed Agil Barakbah J (later SCJ) whose learning on this area of the law is to be regarded with deep respect had this to say:

"As a general principle it was held by the Court of Appeal in Haji Saud v Haji Ahmad & Anor [1957] MLJ 50 that an administrator can enter into an agreement for the sale of immovable property but the agreement is unenforceable unless the permission of the court is obtained. The High Court is empowered in cases of this kind to give permission of the court required under the section and if permission is not given, the Court of Appeal is empowered to do so. That was a similar case in which specific performance was prayed for and allowed. The appellant as administrator of the estate made an agreement in the presence of beneficiaries for sale of land comprised in the estate. The purchase price was paid and distributed amongst the beneficiaries. The title deed was handed to the first respondent and the two other respondents were put in possession of the land and still in possession. The administrator took no steps to register the respondents (the purchasers) as owners of the land and in consequence the proceedings were commenced.

Similarly in a much earlier case in the Court of Appeal, Haji Osman bin Abu Bakar v Saiyed Noor bin Saiyed Mohamed [1952] MLJ 37, which was applied in Haji Saud’s case, supra, the transfer of land was executed by the proprietor of land who died before it was presented for registration. Both the documents of title and the transfer were handed to the purchaser who subsequently sued the administrator for specific performance. It was held that the death of the proprietor-transferor of land did not avoid the contract; the legal personal representative of such deceased person was trustee for the purchaser who, subject to the terms of the contract and in the absence of fraud, misrepresentation or mistake, was entitled to the land and to the possession."

9. The next authority is Chee Hock Lai v Tan Swee Thai & Ors [1990] 3 MLJ 477 where Abdul Malek J (now President of this Court) said:

"Based on the said authorities, I had referred to ss 60 and 71 of the Probate and Administration Act 1959 where the provisions clearly state that where an administrator of an estate takes action without getting the approval of the court, the said action or any agreement made does not become null and void on the application of any party who has an interest in the matter. In this case, no one has taken any steps to vitiate the said agreement and moreover following the case of Itam bte Saad v Chik bte Abdullah [1974] 2 MLJ 53 which was upheld by the Federal Court in Chik bte Abdullah v Itam bte Saad [1974] 1 MLJ 221, the consent of the beneficiaries is not necessary to make the said agreement."

10. By reason of the authorities already cited there is no merit in the complaint now made before us. This ground of appeal also fails.

11. In the course of his argument, learned counsel for the appellants said that there was no consideration for the agreement in question because the RM10,000.00 earnest money had never been received by the appellants. With respect we cannot agree. The consideration in the present case is encompassed in the reciprocal promises exchanged by the parties and evidenced by the written agreement made in November 1976. Neither can we agree with learned counsel’s submission that it was wrong for the respondents to go on the subject land and cultivate it. In our judgment, the acts of entry into possession by the respondents constitute acts of part performance of the respondents. In this context we would refer to the judgment of the Federal Court in Lin Nyut Chan v Wong Sz Tsin [1964] MLJ 200. It is also pertinent to bear in mind that having entered into a specifically enforceable contract, the respondents are to be treated as beneficiaries under a constructive trust of which the second appellant and her co-administrator are trustees. If authority is necessary to support this proposition it is to be found in the judgment of Jessel M.R. in Lysaght v Edwards 2 Ch. D. 499. This is what the learned Master of Rolls said in that case:

"It appears to me that the effect of a contract for sale has been settled for more than two centuries; certainly it was completely settled before the time of Lord Hardwicke, who speaks of the settled doctrine of the court as to it. What is that doctrine? It is that the moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase-money, a charge or lien on the estate for the security of that purchase-money, and a right to retain possession of the estate until the purchase-money is paid, in the absence of express contract as to the time of delivering possession. In other words, the position of the vendor is something between what has been called a naked or bare trustee, or a mere trustee (that is, a person without beneficial interest), and a mortgagee who is not, in equity (any more than a vendor), the owner of the estate, but is, in certain events, entitled to what the unpaid vendor is, viz., possession of the estate and a charge upon the estate for his purchase-money .… Now, what is the meaning of the term ‘valid contract?’ ‘Valid contract’ means in every case a contract sufficient in form and in substance, so that there is no ground whatever for setting it aside as between the vendor and purchaser — a contract binding on both parties."

12. For the reasons already given, we are satisfied that no appealable error on the part of the learned judge has been demonstrated. The appeal is accordingly dismissed. The appellants will pay costs of the appeal to the respondents. All orders made by the learned judge of the High Court are hereby affirmed.

Delivered in Open Court at the conclusion of the arguments on June 27, 2005.

Counsel for the appellants: Chan Sing Khuen

Solicitors for the appellants: Messrs. Vincent Hooi & Chan

Counsel for the respondents: P. Gananathan (Olivia Loh with him)

Solicitors for the respondents: Messrs. Bodipalar Ponnudurai Nathan

Approved by Tengku Baharudin Shah bin Tengku Mahmud and Zulkefli bin Ahmad Makinudin, J.J.C.A. and verified with Gopal Sri Ram, J.C.A. and certified by me to be correct.