Guindarajoo v Satguna

[2014] 1 LNS 866 Legal Network Series

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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA

[CIVIL SUIT NO: S5-22 - 755 - 2003]

BETWEEN

GUINDARAJOO VEGADASON ... PLAINTIFF

(I /C NO: 580601-10-7107)

AND

SATGUNASINGAM BALASINGAM ... DEFENDANT

(I /C NO: 7502155)

SUCCESSION: Administration - Inter vivos gift - Plaintiff applied to revoke letters

of administration (LA) granted to defendant and claimed ownership of house given to

him by deceased as a gift during her lifetime - Deceased was sole beneficiary to the

estate of her deceased daughter, Ariasakthi - Whether deceased entitled to sell or

give away as a gift, her entitlement of the estate before completion of the

administration of the estate of Ariasakthi - Defendant later obtained order to

transfer house to himself - Whether house was an inter vivos gift to plaintiff and not

part of estate of deceased - Whether plaintiff had an equitable interest in the house

based on proprietary estoppel

SUCCESSION: Administration - Revocation of grant - Non-compliance by plaintiff

with Rules of Court 2012, O. 72 r. 2(3) - Whether fatal - No objection by defendant

for last 10 years - Whether any prejudice or damage suffered by defendant by such

non-compliance - Whether defendant waived right to object - Plaintiff not a

beneficiary under both estates of Ariasakthi and deceased - Whether he had requisite

locus to apply for revocation of the letters of administration - Whether the two LA

granted to defendant should be revoked

[Plaintiffs claim allowed with costs of RM25,000.00.]


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Case(s) referred to:

Amravathy d/o v. Nadeson & Anor (both as administratixes of the estate of Ayaduray

Sugirtha Lingam, deceased) v. Sivaprasagam s/o Nagamany (as executor of the estate

of K Nagamany Nee Sugirtha Letchumy d/o Ayadurai) [2007] 4 MLJ 319 (refd)

Amirthanayaki Kumarasamy v. Lembaga Kelayakan Profesion Undang-undang

Malaysia [2010] 1 MLJ 656 (refd)

Badiaddin bin Mohd Mahidin & Anor v. Arab Malaysian Finance Berhad [1998] 1

MLJ 393 (refd)

Boustead Trading (1985) Sdn Bhd v. Arab Malaysian Merchant Bank Berhad [1995]

3 MLJ 331 (refd)

Chor Phaik Har v. Farlim Properties Sdn Bhd [1997] 3 MLJ 188 (refd)

Chong Keat Reality Sdn Bhd v. Ban Hin Lee Bank Bhd [2003] 3 MLJ 321 (refd)

Farlim Properties Sdn Bhd v. Goh Keat Poh & Ors [2003] 4 MLJ 654 (refd)

Gillett v. Holt [2001] Ch 210 (foll)

Goh Keat Poh & Ors v. Farlim Properties Sdn Bhd & Ors [2010] 10 CLJ 70 [2009] 5

MLJ 449 (refd)

Jennings v. Rice [2003] 1 P & CR 100 (foll)

Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 2 MLJ 565 (refd)

Lim Eng Kay v. Jaafar bin Mohamed Said [1982] 2 MLJ 156 (refd)

Kane v. Radley - Kane [1998] 3 All ER 753 (refd)

Khoo Cheng & Ors (As Administrators Of The Estate Of Gan Hong Kok, Deceased) v.

Gan Hong Yock & Ors And Another Appeal [2005] 3MLJ 614 (refd)

Ong Thye Peng v. Loo Choo Teng & Ors [2008] 4 MLJ 31 (refd)

Ramsden v. Dyson [1866] LR 1 HL 129 (foll)

Re Khoo Boo Gon (decd); Khoo Teng Seong v. Teoh Chooi Ghim & Ors [1981] 2 MLJ

68 (foll)

Re Swinburne; Sutton v. Featherley [1925] All ER Rep 313 (refd)

Re Wasserberg [1915] 1 Ch 195 (refd)

Ritz Garden Hotel (Cameron Highlands) Sdn Bhd v. Balakrishnan a/l Kaliannan

[2013] 6 MLJ 149 (refd)

Tan Chong Kiat v. Kwan Ah Soh [1998] 3 MLJ 884 (refd)


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Thorne v. Major [2009] 3 All ER 945 (foll)

Willmott v. Barber [1880] 15 Ch D 96, [1881-5] All ER Rep Ext 1779 (foll)

Yap Teck Ngian v. Yap Hong Long & Ors [2007] 5 CLJ 290 (refd)

Legislation referred to:

National Land Code 1965, s. 346

Distribution Ordinance 1958, s. 6(1) (ii)

Probate and Administration Act 1959, ss. 34, 60(4)

Rules of Court 2012, O.72 r. 2(3), O. 76 r. 3, O. 92 r. 4

Specific Relief Act 1950, s. 17(a)

Other source(s) referred to:

Cheshire, Fifoot and Furmstons Law of Contract, Second Singapore and Malaysian

Edition

Williams, Mortimer and Sunnecks, Executors, Administrators and Probate (17 th Ed,

1993)

Dato Sinnadurai, Law of Contract (3 rd Edition)

GROUNDS OF JUDGMENT

Introduction

1. The dispute in this case is over a house which one Maheswary Navaratnarajah

(the deceased) was entitled to as the sole beneficiary to the estate of her

deceased daughter. The plaintiff claims ownership of the house on the basis

that the deceased was his adoptive mother and that she had given the house

to him as a gift during her lifetime and /or in the alternative he had an equitable

interest in the house.

2. The plaintiff further seeks an order for the revocation of the probate granted to

the defendant to administer the deceaseds estate on the ground that the latter had

misappropriated the house in his own favour. The defendant is the first cousin of

the deceased. His father and the deceaseds mother were siblings.


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The parties and salient facts

3. In 1966 at the age of eight years of age, the plaintiff came to live with the

deceased and her two daughters Navasakthi Navaratnarajah (Navasakthi) and

Ariasakthi Navaratnarajah (Ariasakthi) in their house at No. 2, Lorong Halia,

Jalan Kelang Lama, Batu Tiga Kuala Lumpur (hereinafter referred to as the

house). In 1981, Ariasakthi became the sole registered proprietor of the house

when Navasakthi transferred her half-share to her.

4. Navasakthi and Ariasakthi predeceased their mother on 19 June 1993 and 11

March 1994, respectively. From then on, the plaintiff was the only person who

lived and looked after the deceased until her demise. On 29 November 1994,

the deceased and the defendant attended the legal firm of Messrs Shook Lin &

Bock to apply for Letters of Administration (LA) of Ariasakthis estate as the

deceased was the sole beneficiary to her late daughters estate. The lawyer who

filed the application for LA was informed by the defendant, that the plaintiff, being

only an adopted son of the deceased, was not a beneficiary of the deceaseds

estate.

5. The deceased, however, passed away on 26 January 1995, before the issuance

of the LA to her. The plaintiff was 37 years of age when the deceased passed

away at the age of 75. He continued to live in that house and got married

about six years later, on 4 October 2000. He continues to live in the house with

his wife and three children. He has lived there for about 47 years now.

6. By two petitions dated 16 November 1995, the defendant applied to be

appointed as the administrator of the estate of the deceased and for him to be


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appointed the administrator de bonis non to replace the deceased in respect of

the estate of Ariasakthi. In the affidavits sworn for the purposes of obtaining the

LA, the defendant described himself as the nephew of both the deceased and

Ariasakthi. The beneficiaries of the deceaseds estate ie, her siblings who

live in Sri Lanka, consented to the appointment of the deceased as the

administrator. Accordingly, on 24 September 1996, LA were granted to the

defendant as the administrator of the estate of the deceased and Ariasakthi.

7. On 21 September 1998, defendant applied under section 60 of the Probate and

Administration Act 1959 (the 1959 Act) and section 6(1)(ii) Distribution

Ordinance 1958 (Distribution Ordinance) for an order to transfer the house

to himself. The application was made under the estate of Ariasakthi. The material

parts of the order read:

ATAS PERMOHONAN yang dinamakan diatas DAN

SETELAH MEMBACA Saman Dalam Kamar bertarikh 16hb

Jun, 1998 dan Afidavit Satgunasingam a/l Balasingam yang

diikrarkan pada 11hb Jun, 1998, kesemuanya difailkan

bersama DAN SETELAH MENDENGAR ENCIK REJINDER

SINGH peguamcara bagi sipempetisyen DENGAN INI

ADALAH DIPERINTAHKAN bahawa Harta Pusaka

Ariasakthi a/p Navatnarajah dibahagikan menurut Seksyen 6

(1) (i i) Distribution Ordinance, 1958, pada anak saudaranya

Satgunasingam a/l Balasingan DAN SELANJUTNYA

Bahagian dalam rumah beralamat No. 2 Lorong Halia, Kuala

Lumpur diatas tanah E.M.R. 5187, Lot No. 198 (Section 98)

Bandar Kuala Lumpur dan didaftar bawah nama Ariasakthi

a /p Navatnara jah , mendiang , d ip indah dan d idaf ta r p ada

anak saudara nya Sa tgunas ingam a / l Balas ingan DAN

ADALAH JUGA Kos Permohonan ini dikeluarkan dari Harta

Pusaka mendiang Ariasakthi a/p Navanatrajah.


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(emphasis added).

8. Upon procuring the above Court Order, the defendant repeatedly requested the

plaintiff to vacate the property but the plaintiff flatly refused. By letter dated 5

July 2002, the defendants solicitor wrote to the plaintiff as follows:

Pursuant to Court Order dated 21 s t September 1998 and

granted by the High Court of Malaya in Kuala Lumpur, our

client has been granted the entire rights, interest , title and

benefit to the Premises No. 2, Lorong Halia off Jalan Kelang

Lama, Batu 3, Kuala Lumpur

Our client informs us that in spite (sic) of repeated requests

and demands made to you, you have failed and neglected to

vacate the above premises.

Our client further informs us that he has secured a prospective

purchaser for the said premises and that your refusal to give

possession of the said Premises is hindering the completion of

the Sale and Purchase Agreement.

We have our clients instructions to give you notice which we

hereby do that you are to vacate the said premises on or

before the 31 s t day of August 2002

In the event that you do not vacate the said premises and give

possession of the same to our client on or before the 31 s t Day

of August 2002, we have instructions from our client to

proceed with eviction proceedings against you and you will be

held liable for all costs and expenses incurred by our client in

taking such action

9. When the plaintiff ignored the numerous requests made to him to vacate the

house, the defendant commenced two actions in the Kuala Lumpur Sessions

Court against the plaintiff for the recovery of the house, both of which were

dismissed.


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10. On 9 June 2003, the plaintiff commenced the present action against the

defendant claiming for, inter-alia , the following relief:

a) A declaration that the said house constitutes a gift inter vivos

to the plaintiff and does not comprise or form any part of the

estate of the deceased;

b) A declaration that, in any event, the plaintiff had acquired a

license coupled with an equity over the said property and

thereafter the said property does not comprise part of the

estate of the later Mother;

c) An order under section 34 of the Probate & Administration

Act 1959 that all grants of Letters of Administration to the

defendant be revoked;

d) An order that the defendant do make restitution to the estate

as follows:

i. Refund the sum of AUD100,000 (equivalent to

RM200,000) and all other bank monies withdrawn;

ii. Surrender the title of the said property to the plaintiff

and/or deposit the same into Court pending trial;

i i i . Res tore the t i t l e to motor vehic le reg is t ra t ion no.

WBD 9196 to the s ta te ;

iv . Res tore a l l j ewel lery to the esta te as wel l as the

contents of the sa fe depos i t box a t Bumiput ra

Commerce Bank, Main Branch; and

v . Res tore a l l wear ing appare l , sa r ies and wear ing

i tems to the es ta te .


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11. On 29 January 2010, the plaintiff obtained judgment in his favour when the

defendant failed to attend court for the hearing. The judgment was based on the

evidence adduced by the plaintiff and his witnesses. However, the said judgment

was set aside by the Court of Appeal and a retrial was ordered. The decision of

the Court of Appeal was subsequently affirmed by the Federal Court.

12. On 3 February 2013, the plaintiff sustained serious head injuries in a vehicular

accident which rendered him mentally unfit to continue with the present action. On

17 December 2013, his wife was appointed as his lit igation representative

pursuant to Order 76 r. 3 Rules of Court (ROC) to take over and proceed with

the trial of the action.

Contention of the parties

13. It was the plaintiffs case that the house was given to him as an inter-vivos gift by

the deceased during her lifetime. The house therefore did not form part of her

estate when she died intestate. In the alternative, the plaintiff claimed that he had

acquired an equitable interest in the house by satisfying a number of promises

extracted from him by the deceased in her lifetime.

14. The plaintiff further sought that the LA granted to the defendant to administer

the estate of the deceased and Ariasakthi be revoked on three grounds. Firstly,

he contended that the LA had been obtained by the defendant by deliberately

misleading the court that he was the nephew of the deceased and Ariasakthi.

Secondly, the defendant had deliberately misled the court by stating in the

pet i t ions that the value of the house was RM130,000 .00 when i t was over


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RM600,000.00. Thirdly, that the defendant had, by the Order of Court dated 21

September 1998 [set out above (at 7)], unlawfully obtained an Order to transfer

the house to himself.

15. The defendant, on the other hand, denied that the house had been given to the

plaintiff as an inter-vivos gift and/or that the plaintiff had acquired an equitable

interest in it. He maintained that the house was the property of the estate of

Ariasakthi. The defendant further denied that the two LA had been procured by

misrepresentation and explained that the reference to him as a cousin in the two

petit ions was a misstatement. He also disputed that by the Order of Court

dated 21 September 1998, he had transferred estate property to himself. He

alleged that the Order was sought only to transfer the house to himself in his

capacity as administrator so as to facilitate the sale of the house to complete the

administration of the estate of Ariasakthi.

Witnesses

16. Evidence on behalf of the plaintiff was given by his wife, his close friend David

Fernandez, his neighbour Dr Parameswary Vythialingam, and his doctor Dr Yong

De Jun. In view of the inability of the plaintiff to give evidence, the notes of

evidence taken at the earlier trial, at which he had given evidence, was tendered

as evidence without any objection from the defendant.

17. The defendant testified on his own behalf and also and called Aileen PL Chew, a

partner in the legal firm of Messrs Shearn Delamore.


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The Issues

18. The parties raised a litany of issues and these can be summarised as follows:

1. Whether the deceased had title or interest in the house at the

material time to give it away as a gift;

2. If yes, did the deceased give it away as a gift to the plaintiff;

3. Whether the plaintiff had acquired an equitable interest in the

property;

4. Whether the failure to comply with Order 72 r. 2(3) ROC is fatal;

5. If no, whether the two LA granted to the defendant should be

revoked; and

6. Whether the Order of Court dated 21 September 1998 can be

set aside in the absence of a prayer to this effect in the

statement of claim.

Issue 1: Whether deceased had interest or title in the house?

19. The defendant contended that at the time of the alleged gift, the deceased as the

sole beneficiary of Ariasakthis estate, had no interest or title in the house which

was capable of being given to the plaintiff as a gi ft. This contention was

premised on the fact that the estate of Ariasakthi remained unadministered at

the time of the alleged gift. It was argued that until all the lawful debts of the

estate of Ariasakthi had been paid and the residual estate ascertained and

distributed to the deceased in accordance with the Distribution Ordinance 1958,

the deceased acquired no interest or title to the house. It was further argued, that

in law, the next of kin of a deceased who died intestate have no interest in any


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particular item of property forming part of an unadministered estate, and their only

right, it was submitted, was to have the estate duly administered.

20. In support of this proposition, strong reliance was placed on the decisions of the

Federal Court in Chor Phaik Har v. Farlim Properties Sdn Bhd [1997] 3 MLJ

188 (Farlim 1) and the Court of Appeal in Amravathy d/o v. Nadeson & Anor

(both as administratixes of the estate of Ayaduray Sugirtha Lingam,

deceased) v. Sivaprasagam s/o Nagamany (as executor of the estate of K

Nagamany Nee Sugirtha Letchumy d/o Ayadurai) [2007] 4 MLJ 319, where the

decision of the Federal Court in Farlim 1 was referred to.

21. In response, the plaintiff disputed that the deceased had no interest in the house

that was capable of being given away as a gift prior to the completion of the

administration of the intestate of Ariasakthi. In this connection, the court was

referred to the decision of the Court of Appeal in Farlim Properties Sdn Bhd v.

Goh Keat Poh & Ors [2003] 4 MLJ 654 (Farlim 2) and Goh Keat Poh & Ors v.

Farlim Properties Sdn Bhd & Ors [2010] 10 CLJ 70 [2009] 5 MLJ 449 (Farlim

3).

22. In the alternative, it was contended that the decision in Farlim 1 did not apply to

the present instance as there was one important difference in the facts of both

cases. The crucial element which existed in that case, namely, the fact that there

were several beneficiaries in respect of the unadministered estate of the

deceased, was absent here. It was argued that as the sole beneficiary of

Ariasakthis estate, the deceased was the only person entitled to the residuary

estate of the intestate and this obviated the necessity to determine her share of

the net residue of the estate.


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Farlim 1

23. In view of the conflicting legal submissions of the parties, it is necessary to

examine the the Farlim cases cited by both sides. In Farlim 1, the facts were

these. By an agreement dated 4 January 1943 between Chor Bah Say (the

deceased) and a company, the deceased acquired undivided share in the

Ayer Itam Estate, which included two pieces of land. Upon his death, his interest

under the 1943 agreement devolved to and became vested in his estate. The

defendant was the remaining direct beneficiary of the deceaseds estate. By two

sale and purchase agreements dated 23 January 1992 between the company

and the executors of the beneficiaries of the estate of the deceased on the one

part and the plaintiff on the other part, the former agreed to sell the lands to the

latter for RM32,0006,000. The defendant refused to execute the sale

agreements and lodged a private caveat against the lands. This prompted the

plaintiff to apply for the removal of the private caveat on the ground that they

were persons aggrieved by virtue of the sale agreements. The application was

allowed by the High Court.

24. The defendants appeal to the Federal Court was allowed. All the 3 Judges, Edgar

Joseph Jr FCJ, Mohamed Dzaiddin FCJJ and Abu Mansor JCA, were in

agreement that a beneficiary of the estate of a person who dies intestate has no

interest or title to any property forming part of the estate until the administration

is completed. In allowing the appeal, Mohamed Dzaiddin FCJ stated (at 196):

Based on the above commentaries, founded no doubt on

the analogous principle of law concerning testate

succession, it is our conclusion that in law, a beneficiary

under an intestacy has no interest or property in the

personal estate of a deceased person until the


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administration of the latter's estate is complete and

distribution made according to the law of distribution of

the intestate estate.

25. In coming to this conclusion, the Federal Court referred to and relied on a

passage in Executors, Administrators and Probate (17 th Ed, 1993) by Williams,

Mortimer and Sunnecks which stated at p 1050:

A residuary legatee has no interest in a defined part of the

estate until the residue is ascertained, nor can income be

ascribed to unascertained residue. His right, which is of

course transmissible, is to have the estate properly

administered and applied for his benefit when the

administration is complete. The right of a beneficiary

claiming on a total intestacy is similar, except that he takes

under a statutory trust for sale and conversion.

Farlim 2

26. In Farlim 2, the same plaintiff as in Farlim 1, applied for specific performance of

the sale agreements against the beneficiaries to the 1992 Agreements after the

administration of the estate of the deceased had been completed. The

beneficiaries applied to strike out the claim on the ground that it disclosed no

cause of action as the validity of the sale agreements had been determined by the

Federal Court in Farlim 1, and the matter was res judicata. The High Court agreed

with the position taken by the beneficiaries and allowed the application. But on

appeal, the said decision was reversed by the Court of Appeal. It was held that

the doctrine of res judicata did not apply as the validity of the 1992 Agreements

had not been considered by the Federal Court. The Court of Appeal then


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proceeded to consider if the said agreements were enforceable by the plaintiff.

Mohd Noor Ahmad JCA delivering the judgment of the Court, said (at 666):

The circumstances had changed since the decision of the

Federal Court in the aforesaid case. The administration of

the deceased ' s e s ta t e was comple ted some t ime in 1995

after distribution order was obtained from the High Court

by CLHE on 19 May 1995. That was the position when the

appeal came before the learned Judge. In Nik Mohamed

Salleh v. Tengku Besar Zabidah [1971] 1 MLJ 73, the Federal

Court he ld that a l though the benef ic iar ies of the

deceaseds es tate had no t i t le to the land which they

agreed to se l l under an agreement they had a spes

successionis in the land. As such, the administrator of the

deceaseds estate was compelled to transfer the whole

land to the purchaser, by virtue of the provisions of s. 17(a)

of the Specific Relief (Malay States) Ordinance 1950 ('the

SR (MS) Ordinance') and s. 44(1) of the Contracts (Malay

States) Ordinance 1950 ('the C(MS) Ordinance').Section

17(a) of the SRA, which is in pari materia with the same

section of the SR(MS) Ordinance, states:

.........

In Kersah La'usin v. Sikin Menan [1966] 2 MLJ 20 where,

under an agreement, the sole beneficiary sold the land

registered under his deceased mothers name, in his

judgment Raja Azlan Shah J (as His Highness was then)

stated:

The first consideration is whether the plaintiff

could enter into a contract with the defendants

(deceased) father involving a subject matter

which was then not subsisting in the sense that

the said land was still in his mothers name. It is

not disputed that he was the sole beneficiary and

that he was in such a position that when the time

came he could perfect the title of the purchaser.

The fact that at the date of contract the vendor

had neither title nor power to call for title is not of

itself as answer to a suit of specific performance

by the purchaser; Brickies v. Snell [1916] 2 A.C.

599. Actual possession of both the legal estate

and any equitable rights are not pre-requisites so

long as the vendor is in such a position that when

the time for completion comes he will be in a


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position to pass on the title to the purchaser. In

those circumstances the contract is good but

only in equity.

And later, concluded (at 667 to 668):

What is discernible from the authorities is that a

benef i c i a ry to a decea sed ' s e s t a t e can en t e r in to a

contract of sale of land involving a subject matter which

is not subsisting in the sense that the land is sti l l in the

deceased's name. However, when the beneficiary comes

to be in a posit ion to pass on the t i t le to the purchaser

he can be compelled by the purchaser to make good the

contract out of that interest . Although in the present

appeal , c l 1 .1 . of the relevant 1992 Agreements states

that the sale is in respect al l the rights , t i t le and interest

and shares of al l the beneficiaries in the said lands, to

our mind, having regard to the fact that the

administration of the deceaseds estate had not been

completed at the t ime of i ts execution, the subject matter

involved in the transaction is none other than the sale of

spec successionis . As specif ic performance of the 1992

Agreements as prayed for by the plaintiff in the act ion i s

an equitable rel ief, the court wil l look at the substance

rather than the form. Anyway, i t i s st i l l open to the

plaintiff to amend its pleading to cover this point , i f i t so

wishes, before the trial of the act ion.

(emphasis added)

Farlim 3

27. Further to the decision of the Court of Appeal in Farlim 2 that the striking out

order was wrong, the trial proceeded. At the conclusion of the trial, the High

Court allowed the plaintiffs application for specific performance of the agreements.


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Farlim 3 is the defendants appeal to the Court of Appeal against that decision

of the High Court. The Court of Appeal allowed the appeal on the ground that

the term spec successionis was not mentioned in the sale agreements. Hasan

Lah JCA stated (at paras 35 to 37):

We have carefully considered the judgment of the Federal

Court in the Chor Phaik Har's case and we are satisfied that

the Federal Court, in deciding the issue whether Farlim was a

person aggrieved within the meaning of s. 327 of the National

Land Code, did consider the issue of the validity of the Farlim

agreements. The Federal Court clearly and unequivocally held

that in the agreements the beneficiaries had agreed to sell

their rights title and interest of their respective shares in the

said lands. The Federal Court also held that in law a

beneficiary under an intestacy has no interest or property in

the personal estate of a deceased person until the

administration of the deceased's estate is complete and

distribution made according to the law of distribution of the

intestate estate. As such the beneficiaries of the estate of

Chor Bah Say had no interest or property in the estate of Chor

Bah Say so as to give them any title to the land. The

beneficiaries could not therefore have covenanted to convey

any title to the plaintiff.

We are unable to agree with the contention that the subject

matter of the Farlim agreements was the spes successionis

the defendant had in the said lands for the simple reason that

the Federal Court has made a finding that in the Farlim

agreements the beneficiaries have agreed to sell their rights

title and interest of their respective shares in the said lands.

Furthermore the term 'spes successionis' was never

mentioned in the Farlim agreements. As such the question of

disposing a spes successionis did not arise. The plaintiff did

not raise the issue of spes successionis before the Federal

Court. The plaintiff must abide by the decision as res judicata

applies not only to issues the court was actually required to

decide but also to every issue which the parties exercising

reasonable diligence might have raised at that time (Asia

Commercial Finance (M) Bhd v. Kawal Teliti Sdn Bhd [1995] 3

MLJ 189).

Applying the principles of res judicata/issue estoppel the

plaintiff was therefore estopped from claiming that the

defendants had agreed to sell their 'alleged spes

successionis' . As such we are of the view that the learned


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High Court judge has erred in coming to the decision that

what the first to sixth defendants had intended to sell was

their spes successionis.

28. The decisions in the Farlim cases illustrate that a beneficiary or person interested

under an intestacy does not have a defined or specific legal or equitable interest to

which a claim may be laid before the estate has been administered but may enter

into a perfectly valid contract to sell that entitlement if any, whatever it may be,

even prior to the completion of the administration of the estate. The entitlement

that a beneficiary can sell is a right to an expectancy of inheritance, or 'spes

successionis'. This means the residue that is due to the beneficiary after the

estate is administered. Under the said contract, the purchaser purchases and

obtains a 'spes successionis' which only becomes enforceable once the

administration of the estate is completed, and if and when the beneficiary

obtains the asset that he has sold under the contract in the expectancy he will

receive it from the intestate. Upon the asset being vested in the beneficiary, the

court can order specific performance as provided in section 17(a) of the Specific

Relief Act 1950.

29. I pause here to observe that the dictum reproduced in para [26] above, in my

judgment, really disposes of the defendant's argument that the deceased was not

entitled to sell or give away as a gift whatever her entitlement of the estate

before the completion of the administration of the estate of Ariasakthi. This court

holds that, in law the deceased as the sole beneficiary to Ariasakthis estate,

was entitled to give away as a gift, the entitlement, 'share', 'interest' or by

whatever name it may be called that which was due to her upon the completion

of the administration of the estate of Ariasakthi. Thus, the plaintiff, if he is able

to show that the deceased had given the house to him as a gift, would be entitled


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to enforce the gift only upon the completion of the administration of the estate of

Ariasakthi.

Issue 2: Whether there was a gift?

30. I now turn to the all important question in this case, namely whether the deceased

had given her entitlement to the house as an inter vivos gift to the plaintiff.

31. Under common law, there are generally two categories of gifts; donatio mortis

causa and gifts inter vivos. A gift made donation mortis causa is also known as a

deathbed gift. This is a gift that the donor makes when he or she is contemplating

the prospect of his or her imminent, though not necessarily certain, death. On the

other hand, a gift inter vivos is the the voluntary and gratuitous transfer of property

while the donor is still alive and not in expectation of death. Unlike a will, which

merely regulates succession after death, a gift inter vivos, strips the donor of his

property during his lifetime. Following a gift inter vivos, the donor no longer has

any rights to the property, and cannot get it back without the permission of the

done it was gifted to.

32. The constituent elements of a gift inter vivos are well settled. They are accurately

stated in Halsbury's Laws of England, 4th ed., Volume 20 at pages 1-2, as

follows:

A gift inter vivos may be defined shortly as the transfer of

any property from one person to another gratuitously while

the donor is alive and not in expectation of death. It is an act

whereby something is voluntarily transferred from the true

possessor to another person with the full intention that the


19

thing shall not return to the donor. It has been said that

there must be an intention on the part of the recipient to

retain the thing entirely as his own without restoring it to the

giver. This, it seems, is incorrect. .... A gift appears to be

effective when the donor intends to make it a gift and the

recipient takes the thing given and keeps it, knowing that he

has done so. The mere fact that the recipient regards the

thing given as a loan and intends so to treat it does not by

itself prevent the transaction from being effective as a gift.

33. In Tan Chong Kiat v. Kwan Ah Soh [1998] 3 MLJ 884, the Court endorsed the

view expressed in Halsburys that a valid inter vivos gift comes into effect upon

the transfer of any property by a living donor to the donee without consideration

as a gift.

34. The authorities on the subject make it clear that words of gift or mere intention

to make a gift is insufficient, however clearly expressed. There must be some

overt act of physical transfer of subject matter of the gift to the donee. In Re

Swinburne; Sutton v. Featherley [1925] All ER Rep 313, the Court of Appeal

held that in order to make an effectual gift inter vivos there must be an actual

transfer of the subject of the gift or of the indicia of title to the gift. See also

Re Wasserberg [1915] 1 Ch 195. The meaning and requirement of transfer is

easy to understand in the context of chattels but, the question arises what is the

position vis a vis immovable property which cannot be physically delivered.

35. In my judgment, in order for a gift of immovable property to be valid, it is

incumbent on the donee to show that the donor has parted with ownership; this

can be done by showing that the donor has executed transfer forms in favour of


20

the done, or has surrendered the title deeds to the donee or given the donee

exclusive control of the immovable property or something to that effect.

36. In the instant case, I accept the evidence of the plaintiff that the deceased had

expressed the intention to give him the house as a gift. But, there is no further

evidence that the deceased had taken the necessary steps to transfer the house to

him, an essential element to render the gift complete and enforceable. She had not

even seen a lawyer for the transfer to be effected. In the circumstances, I am

constrained to decide, in the light of the authorities, that there was no transfer of

the house to the plaintiff. I therefore find that the plaintiff has failed to prove that

the house was given to him as a gift inter vivos by the deceased.

Issue 3: Whether the plaintiff had acquired an interest in the house based on

proprietary estoppels?

37. Alternatively, the plaintiff predicates his claim to the house on the doctrine of

equitable interest and/or proprietary estoppel. The plaintiff contended that he had

acquired an interest in the house as he had relied on the assurance or promise

given to him by the deceased that he would inherit the house if he looked after

her and complied with her 5 conditions. These were:

i. That the plaintiff would reside on the house with her (the deceased)

during the whole of her lifetime;

ii. That the plaintiff would not marry or live apar t from her during the

whole of her lifetime;

iii. That the plaintiff would look after the deceased and provide for her

medical needs and care during her lifetime;


21

iv. That the plaintiff would always maintain the said house and upkeep it

in a fit and habitable condition; and

v. That at all times the plaintiff would reside in the said house after the

deceaseds death in the memory of her and her late husband and

Ariasakthi and Navasakthi.

38. The principles of proprietary estoppel were formulated by Ramsden v. Dyson

[1866] LR 1 HL 129 and Willmott v. Barber [1880] 15 Ch D 96, [1881-5] All ER

Rep Ext 1779. In both these cases, the principle was used as a sword by the

plaintiffs to establish a proprietary interest in someone else's property on the basis

that they had incurred expenditure on the property in the mistaken belief that it

belonged to them, and that belief had been encouraged by the true owners

silence and inaction standing by without intervening. In the first case, Lord

Cranworth said, at pp 140-141:

If a stranger begins to build on my land supposing it to be

his own, and I, perceiving his mistake, abstain from setting

him right, and leave him to persevere in his error, a court of

equity will not allow me afterwards to assert my title to the

land on which he had expended money on the supposition

that the land was his own. It considers that, when I saw the

mistake into which he had fallen, it was my duty to be active

and to state my adverse title; and that it would be dishonest

in me to remain wilfully passive on such an occasion, in

order afterwards to profit by the mistake which I might have

prevented.


22

39. In Thorne v. Major [2009] 3 All ER 945, the House of Lords had occasion to

consider the meaning of the expression proprietary estoppel. Lord Walker said (at

para 29):

An academic authority (Gardner An Introduction to Land

Law (2007) p 101) has recently commented: 'There is no

definition of proprietary estoppel that is both comprehensive

and uncontroversial (and many attempts at one have been

neither).' Nevertheless most scholars agree that the doctrine

is based on three main elements, although they express them

in slightly different terms: a representation or assurance

made to the claimant; reliance on it by the claimant; and

detriment to the claimant in consequence of his (reasonable)

reliance (see Megarry and Wade Law of Real Property (7 th

edn, 2008) para 16-001; Gray and Gray Elements of Land Law

(5 th edn, 2009) para 9.2.8; Snell's Equity (31 s t edn, 2005)

paras 10-16 to 10-19; Gardner An Introduction to Land Law

(2007) para 7.1.

40. Lord Walker further explained (at para 61):

In my opinion it is a necessary element of proprietary

estoppel that the assurances given to the claimant (expressly

or impliedly, or, in standing - by cases, tacitly) should relate

to identified property owned (or, perhaps, about to be owned)

by the defendant. That is one of the main distinguishing

features between the two varieties of equitable estoppel, that

is promissory estoppel and proprietary estoppel. The former

must be based on an existing legal relationship (usually a

contract, but not necessarily a contract relating to land). The

latter need not be based on an existing legal relationship, but

it must relate to identified property (usually land) owned (or,

perhaps, about to be owned) by the defendant. It is the

relation to identified land of the defendant that has enabled

proprietary estoppel to develop as a sword, and not merely a

shield: see Lord Denning MR in Crabb v. Arun DC [1975] 3 All

ER 865 at 871, [1976] Ch 179 at 187


23

41. The cases illustrate that proprietary estoppel arises most commonly when an

owner of land (or one about to become owner) encourages another to act to his

detriment in the belief that he will obtain a right or interest in that property. The

underlying rationale is that it would be unjust and unconscionable for the maker of

the assurance not to give effect to his promise. In Gillett v. Holt [2001] Ch 210

Robert Walker LJ said:

It is important to note at the outset that the doctrine of

proprietary estoppel cannot be treated as subdivided

into three or four watert ight compartments . Both s ides

are agreed on that , and in the course of the oral

argument in th is court i t repeatedly became apparent

that the quality of the relevant assurances may influence

the issue of rel iance, that rel iance and detriment are

often intertwined, and that whether there is a dist inct

need for a mutual understanding may depend on how

the other elements are formulated and understood.

Moreover, the fundamental principle that equity is

concerned t o preven t unconsc i onabl e conduc t

permea t es a l l the e l ements o f the doc t r ine . In the end

the cour t mus t look a t the mat t er in the round .

42. The requirements of estoppel were considered by the Federal Court in

Boustead Trading (1985) Sdn Bhd v. Arab Malaysian Merchant Bank Berhad

[1995] 3 MLJ 331. The Court stated, by way of obiter dicta, that the principle

that estoppel can only be invoked if there was assurance, reliance and detriment

was no longer correct. The rationale for this view was based on dicta

expressed by some English Judges that detriment was not an ingredient in the

equation. It was observed (at 347);


24

Taking now the requirement of detriment, it is quite

apparent that in the early development of the doctrine,

there are to be found in the judgments of eminent judges

s tatements indicat ing that one who re l ies upon an

es toppel must prove that he re l ied upon his opponent 's

conduct and in consequence acted to h is detr iment . And

this view had found its way into the equity jurisprudence

of Malaysia. (See, for example, Wong Juat Eng v. Then

Thaw En & Anor [1965] 2 MLJ 213. ) As has been seen,

the former requirement, namely, that there ought to have

been reliance was exploded by the decisions in

Amalgamated Investment, in Taylor Fashions, in Societe

Italo-Belge (sub nom 'The Post Chaser' and Lim Teng

Huan.

We take this opportunity to declare that the detriment

e lement does not form part of the doctr ine of estoppel .

In other words, it is not an essential ingredient requiring

proof before the doctrine may be invoked. All that need

be shown is that in the particular circumstances of a

case, i t would be unjust to permit the representor or

encourager to insist upon his strict legal r ights . In the

resolution of this issue, a judicial arbiter would, when

making his assessment of where the just ice of the case

l ies , be entit led to have regard to the conduct of the

litigant raising the estoppel . This may, but need not in all

cases, include the determination of the question as to

whether the particular l itigant had altered his position,

although such alteration need not be to his detriment.

43. Two authors on Contract law in Malaysia and Singapore disagree with the

dictum of the Federal Court that the detriment is not an essential element of the

doctrine of estoppel. Dato Sinnadurai in his book Law of Contract (3 rd Edition)

stated (at 147):

Whilst it is now acknowledged that unconscionability [is]

the touchstone for all relevant forms of estoppel, the basic


25

principles governing the doctrine have not altered much,

particularly the relationship between the requirement for

consideration in a contract, and the enforceability of a

promise unsupported by consideration in the sphere of

promissory estoppel. The requirement to establish detriment

appears to be firmly rooted and, despite some views to the

contrary, continues to be a vital ingredient.

44. The editors of Cheshire, Fifoot and Furmstons Law of Contract, Second

Singapore and Malaysian Edition have expressed a similar view at p 211;

It is submitted with respect, that it was unfortunate that the

court in Boustead Trading (1985) Sdn Bhd v. Arab Malaysian

Merchant Bank Bhd [1995] 3 MLJ 331 FC did not canvass the

arguments centring around the concept of detriment more

fully. It is further submitted that the arguments made earlier

[by the authors] to the effect that detriment is the most

concrete manifestation of inequitability, still hold, particularly

in the light of the courts emphasis, in the passage quoted

[above], on fairness and justice. And there is also some

recent case law that also endorses the requirement of

detriment itself.

45. As for the element of detriment and its correlation with reliance, the reasoning of

Walker LJ in Gillett v. Holt ([at 43] supra) is instructive:

The overwhelming weight of authority shows that detriment

is required. But the authorities also show that it is not a

narrow or technical concept. The detriment need not consist

of the expenditure of money or other quantifiable financial

detriment, so long as it is something substantial. The


26

requirement must be approached as part of a broad inquiry as

to whether repudiation of an assurance is or is not

unconscionable in all the circumstances.

There must be sufficient causal link between the assurance

relied on and the detriment asserted. The issue of detriment

must be judged at the moment when the person who has

given the assurance seeks to go back on it. Whether the

detriment is sufficiently substantial is to be tested by whether

it would be unjust or inequitable to allow the assurance to be

disregarded - that is again, the essential test of

unconscionability. The detriment alleged must be pleaded

and proved.

46. The view expressed by the Federal Court in Boustead that detriment is not an

essential ingredient of estoppel is not binding on this Court as it was merely an

obiter dicta. The majority of the English cases on this subject, favour the view that

detriment is a sine qua non of estoppel. This Court is therefore at liberty to follow

the English authorities on this point. The three main elements requisite for a

claim based on proprietary estoppel are: an assurance given to the plaintiff,

reliance by the plaintiff on the assurance and detriment incurred by the plaintiff as

a consequence of that reliance. In my judgment, to dilute the requirements of

proprietary estoppel would result in frivolous claims being pursued against land

owners.

47. Once the three elements that constitute proprietary estoppel are proved on a

balance of probabilities, the court must consider what is necessary in order to

satisfy the equity which has arisen. When considering that exercise, the English

Court of Appeal in Jennings v. Rice [2003] 1 P & CR 100 held that the question


27

as to how the equity should be satisfied was a matter for the court's discretion in

the light of all the circumstances including the claimant's expectation and the

detriment he suffered. In this regard, Walker LJ observed at para 48 that .. .

reference to the minimum [in such a context] does not require the court to be

constitutionally parsimonious, but it does implicitly recognise that the court

must also do justice to the Defendant.

48. Walker LJ provided guidance at paras 50 and 51 of his judgment as to the

manner in which the court should seek to satisfy such an equity:

.. . if the Claimant's expectations are uncertain, or

extravagant, or out of all proportion to the detriment

which the Claimant has suffered, the court can and

should at the c l ient ' s equi ty should be sat i sf ied in

another (and general ly more l imited) way.

But that does not mean that the court should in such a

case abandon expectat ions complete ly , and look to the

detr iment suffered by the Claimant as def in ing the

appropriate measure of re l ie f . Indeed in many cases ,

the detr iment may be even more di f f icul t to quant ify , in

f inancia l terms than the Claimant 's expectat ions . . . .

Moreover the Claimant may not be mot ivated so le ly by

re l iance on the benefactor 's assurances , and may

rece ive some countervai l ing benef i t s ( such as free bed

and board) . In such c ircumstances the court has to

exerc ise a wide judgmental d iscret ion.

49. In the same case, Aldous LJ writing the leading judgment, observed at para 36:

The value of [such an] equity will depend upon all the

circumstances including the expectation and the detriment.

The task of the court is to do justice. The most essential

requirement is that there must be proportionality between the

expectation and the detriment.


28

50. Applying these principles to the factual matrix in this case. On the evidence, the

deceased was about to become the owner of the house at the material time. I

accept the evidence of the plaintiff that the deceased had assured him that he

would inherit the house, if he satisfied her 5 conditions. The evidence given by

the witnesses called by the plaintiff demonstrated that the plaintiff had a close

relationship with the deceased and she treated him as if he were her son. He was

permitted by the deceased to perform the funeral rites for Ariasakthi and

Navasakthi. In my judgment, this is crucial evidence which affords strong

corroboration to the plaintiffs assertion that he was the adopted son (by custom)

of the deceased. The deceased had relied on his love and kindness to look after

her after the demise of her daughters. There is no evidence that any of her

other relatives had offered or taken care of her after the death of Ariasakthi and

Navasakthi. In the circumstances, it is inherently probable that she would have

made that promise to him.

51. Did the plaintiff therefore rely on the promises or assurances? In my judgment,

he did. On the evidence, I find that the plaintiff had kept these promises in the

expectations that he would acquire ownership of the house upon the death of the

deceased. He was under no obligation to look after the elderly woman, but he did.

He did not get married. He ran errands for her. He was not paid for doing so and

am satisfied that he did all these things principally because of the promise made

to him that he would inherit the house.

52. I am satisfied that the fact that he remained single and looked after an elderly and

sickly woman during the material time, is sufficient evidence that he had suffered


29

detriment in consequence of his reliance of the promise made to him by the

deceased.

53. What therefore, is the minimum equity necessary to do justice in the present case

to avoid an unconscionable and disproportionate result? The Courts have a wide

discretion in this regard. On balance, in my judgment, the equity is satisfied by a

declaration that the house be transferred to him by the estate of the deceased.

The estate is bound by that assurance given by the deceased to the plaintiff. In

my judgement, it would be unjust and unconscionable to deny the plaintiffs

equitable interest in the house.

Issue 4 : Whether Non Compliance with Order 72 r.2(3) ROC is fatal?

54. That brings me to the point made pursuant to Order 72 r. 2(3) ROC. The

defendant contended that it was not open to the pla intiff to apply for the

revocation of the two Las that were granted to him in view of his failure to comply

with Order 72 r. 2(3) Rules of Court 2012 (ROC). It was said that this was a

mandatory provision and non compliance with it is fatal. This provision provides:

A writ beginning an action for the revocation for the grant of

probate of the will, or letters of administration of the estate, of

a deceased person shall not be issued unless a citation under

rule 7 has been issued or the probate or letter of

administration, as the case may be, has or have been lodged

in the Registry.


30

55. The Federal Court in Yap Teck Ngian v. Yap Hong Long & Ors [2007] 5 CLJ 290

considered the legal effect of this provision. Nik Hashim FCJ observed at

paragraph (6) that:

Thus, it is clear from the above provisions that before

any person can file a writ for the revocation of the grant of a

letter of administration, a citation against the person to

whom the letter was granted must be issued to him

requiring him to bring into and leave at the Court Registry

the letter of administration (O. 72 r. 7). The citation must

be settled by the court before it is issued (O. 72 r. 8(1)).

Before a citation is issued pursuant to O. 72 r. 7 an

affidavit verifying the statements of fact to be made in the

citation must be sworn by the person applying for the

citation to be issued (O. 72 r. 8(2)) and that the citation

must be served personally on the citee which the ci tors

did in the present case. In the Administration of Estates

Handbook, Kanesh Sundrum states at p. 187 para 192:

Every probate action must be begun by writ issued

out of the Registry of the High Court. The writ must

be endorsed with a statement of the nature of the

interest of the plaintiff and of the defendant in the

estate of the deceased. A writ beginning an action

for the revocation of probate or administration can

only be issued after a citation to bring in grant has

been issued or the probate or letters of

administration has been lodged in the said registry.

(emphasis added)

56. It is admitted and common ground that the plaintiff did not comply with Order 72

r. 2(3) ROC prior to the institution of this action. But, the plaintiff took the

position that Order 72 r. 2(3) has no application here as the present action is a

mixed claim as opposed to a pure probate action as statutorily defined under this

Order . In the al terna t ive, i t was pointed out that the defendant had f i led a


31

conditional appearance and had taken numerous steps in these proceedings from

the time the action was instituted. This objection could have been raised sooner,

but was not. I t was said that by his conduct, the defendant has waived his

right to raise this objection. In the further alternative, it was argued that this was

not a mandatory provision and that the plaintiff would be prejudiced if the

objection is allowed to be taken at this very late stage.

57. In Chong Keat Reality Sdn Bhd v. Ban Hin Lee Bank Bhd [2003] 3 MLJ 321

Gopal Sri Ram JCA explained with his accustomed lucidity and authority, the

modern approach that is to be adopted when there is a failure to observe

procedural provisions in these words (at 328):

Lastly, there is the question of the modern approach to

the breach of procedural provisions by a litigant. It is to be

emphasized that the courts are concerned with the

dispensation of both procedural and substantive justice

according to the merits of a given case. So, when a party to

litigation complains of breach of a procedural provision by

his opponent, the primary question is not whether the

particular provision is to be regarded as mandatory or

directory according to the terms of the language in which it

is couched. The correct question that the judicial arbiter

should ask himself is this: What injustice has the party

complaining suffered by reason of the procedural breach?

It is the answer to this question that will ultimately

determine whether the court should uphold or reject a

procedural complaint.

58. In a similar vein, a another panel of the Court of Appeal in Amirthanayaki

Kumarasamy v. Lembaga Kelayakan Profesion Undang-undang Malaysia

[2010] 1 MLJ 656 stated (at para 13 and 14):


32

Such procedural technical objection (as in the present case)

should not be allowed to obstruct the process of justice to

the deserving. As we move towards the era of facilitating the

process of litigation, the raising of objection on technical

grounds would certainly and clearly be a thing of the past. It

is clearly the intention and wisdom of the rules committee to

provide for the smooth administration of the due process and

administration of justice by way of substantial merits of the

case and not merely on procedural technical defaults (see

Beauford Baru Sdn Bhd v. Gopala Krishnan a/l VK Gopalan

[2002] 6 MLJ 134).

A judge should not be so besotted by the rules that his sense

of justice and fairness becomes impaired because of his

blithered fixation on technicalities of the rules and the cold

letter of the law (see Megat Najmuddin bin Dato' Seri (Dr)

Megat Khas v. Bank Bumiputra (M) Bhd [2002] 1 MLJ 385 per

Mohtar Abdullah FCJ).

59. The authorities illustrate that the question I need to consider is whether the

defendant has suffered any prejudice or damage by reason of the plaintiffs non-

compliance with Order 72 r. 2(3) ROC. There is no evidence to show that the

defendant has been prejudiced by the non-compliance, and I therefore reject the

complaint made by the defendant. In any event, having raised no objection for

the last 10 years the defendant has waived his right to raise this objection.

Issue 5 : Whether the two LA granted to the defendant should be revoked?

60. I now turn to the petitions filed by the defendant to apply for LA for the estates of

Ariasakthi and the deceased. As earlier noted at para [5], the defendant had

described himself as the nephew of both Ariasakthi and the deceased in the

affidavits filed in support of these petitions. This was incorrect and I am prepared


33

to accept that this may be attributed to an unintentional mistake. The petition was

in the Malay language, and there is no evidence that the defendant was well

versed in that language.

61. However, the complaint that requires a close scrutiny is the allegation made by

the plaintiff that the defendant had obtained the Order of Court dated 21

September 1998 in breach of his duties as an administrator. It was a fraud on the

beneficiaries. The defendants explanation to the aforesaid complaint was that

the Order was obtained to vest the house in his name as the administrator of the

estate to enable him to sell it to liquidate the assets of the estate for distribution.

It was said that he did not acquire ownership of the house by virtue of the Order.

62. As noted earlier in para [6], the defendant had made this application pursuant

to section 60(4) of the 1959 Act and section 6(1)(ii) Distribution Ordinance under

the estate of Ariasakthi. The affidavit in support of the application was dated 24

July 1998, and was laconic and merely stated that he was the nephew of

Ariasakthi. There was no mention that the house had devolved to the deceased

nor that the beneficiaries had consented for him to become the new registered

owner of the house.

63. The validity of the defendants submission that the Order of 21 September 1998

was merely a vesting order requires an examination of relevant statutory

provisions that govern the subject matter. They are section 346 of the National

Land Code 1965 which deals specifically with the transmission of property on

the death of the registered proprietor, and section 60 of the Probate and

Administration Act which deals with the sale of estate property by the


34

administrator. First, I refer to the provisions in section 346 of the NLC which

states;

(1) The personal representative or representatives of any

deceased person may apply to the Registrar under this

section to be registered as such in respect of any land,

forming part of that persons estate and the Registrar, if

satisfied that any estate duty due in respect of the estate

has been paid, or a postponement of payment allowed in

respect of the land, share or interest in quest ion, shal l

g ive ef fect to the applicat ion in accordance with the

provis ions of sub-sect ions (3) and (4) .

(2) Any such application shall be accompanied by-

(a) the grant of probate or letters of administration;

(b) if available, the issue document of title to the land or,

where the application relates to a lease or a charge,

the duplicate thereof; and

(c) such other documents or evidence as the Registrar

may require, or as may be prescribed.

(3) The Registrar shall give effect to any such application by

endorsing on the register document of title to the land to

which, or a share or interest in which, it relates a note of the

date of death of the deceased person and a memorial to the

effect that the said land, share or interest is vested in the

applicant or applicants as representative or, as the case may

be, as representatives.

(4) Every such memorial shall be signed and sealed by the

Registrar, and a copy thereof shall be made on the issue

document of title or, as the case may be, duplicate lease or

charge, if sent with the application or subsequently obtained

by him.

(5) No personal representative or representatives shall be

capable of executing any instrument of dealing in respect

of any land, share or interest until it has become

registered in his or their name or names pursuant to this

section.

(emphasis added)


35

64. And, section 60 of the 1995 Act provides:

(1) In dealing with the property of the deceased his personal

representative shall comply with this section.

(2) 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 powers

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.

(3) A personal representative may charge, mortgage or otherwise

dispose of all or any property vested in him, as he may think

proper, subject to any restriction which may be imposed in

this behalf by the will of the deceased, and subject to this

section:

Provided that an executor may dispose of any property

notwithstanding any restriction so imposed, if he does so in

accordance with an order of the Court.

(4) An administrator may not, without the previous

permission of the Court-

(a) mortgage, charge or transfer by sale, gift, exchange

or otherwise any immovable property situate in any

State and for the time being vested in him; or

(b) lease any such property for a term exceeding five

years.

(5) Nothing in this section shall affect subsection 15(2) of the

Trustee Act 1949 [Act 208].

(6) The disposal of property by a personal representative in

contravention of this section shall be voidable at the instance

of any other person interested in the property.

(emphasis added)

65. It is clear from the above two statutory provisions that there is no requirement in

law for an administrator or personal representative to apply to the court for a


36

vesting order for estate property to be vested in his name as an administrator.

The application is not made to the court but to the Registrar of the relevant

Land Office enclosing the LA and other supporting documents. This is the

first step that an administrator needs to take in the sale of immovable property of

the estate of a deceased. Until the transmission of the property to the

administrator under section 346 of the NLC, an administrator cannot execute the

transfer documents on behalf of the estate. Next, an administrator must file an

application for the sale of the estate property pursuant to section 60(4) of the

1995 Act with the consent and the knowledge of the beneficiaries. The sale of

immovable property can only be effected with the sanction of the court.

66. In the present case, there is no explanation from the defendant why the

application for the vesting order was made pursuant to section 60(4) of the 1959

Act instead of section 346 NLC. As noted earlier, section 60(4) of the 1959 Act

is only applicable when an administrator wants to sell estate property and to apply

for the property to be registered in his name. The conduct of the defendant in

invoking this provision to transfer property to himself is not permitted. As an

administrator he holds estate property on trust for the beneficiaries. It is clear

from the terms of the Order of 21 September 1998, made pursuant to section

60(4) of the 1959 Act that the ownership of the house has been absolutely

transferred to the defendant. The Order as drawn up does not indicate in any

way, as contended by the defendant, that the house has been transferred to him

in his capacity as an administrator. Indeed, the legal effect of the Order is made

clear by the defendants solicitors letter to the plaintiff, reproduced above at [7].

By acquiring proprietorship of the house, the defendant would no longer need

the leave of the court to sell it as mandated by section 60(4) of the 1995 Act.

Thus, when the house is sold, the sale proceeds would come to the defendant

instead of the estate.


37

67. In Khoo Cheng & Ors (As Administrators Of The Estate Of Gan Hong Kok,

Deceased) v. Gan Hong Yock & Ors And Another Appeal [2005] 3MLJ 614,

Arifin Jaka JCA said (at 621):

Section 60(4) of the Probate and Administration Act 1959

expressly provides that an administrator may not without the

previous permission of the High Court: '(a) mortgage, charge

or transfer by sale, gift, exchange or otherwise any

immovable property situate in any State and for the time

being vested in him.' These provisions are intended to

prevent any improper sale of or dealing in the immovable

property of the estate of a deceased by an administrator, who

is required by law to apply to the High Court for an order of

sale, supported by affidavit exhibiting a reliable valuation

report on the property concerned for the consideration of the

judge.

68. In Ong Thye Peng v. Loo Choo Teng & Ors [2008] 4 MLJ 31, Augustine Paul FCJ

said ( at para 28):

In our opinion the language employed in s. 60 of the 1959 Act

is clear. It is concerned with the manner of disposal of the

property of a deceased person by his personal

representative. Section 60(3) of the 1959 Act deals with the

disposal of the property of a person who dies testate while s.

60(4) of the 1959 Act deals with the property of a person who

dies intestate. Under s. 60(4)(a) of the 1959 Act the immovable

property of a person who dies intestate may not be disposed

of without the previous permission of the court.

69. The prohibition in law on an administrator and/or trustee dealing with and acquiring or

appropriating trust/estate property for himself is well settled. It is called the rule


38

against self dealing. The case on point is Kane v. Radley - Kane [1998] 3 All ER

753. The Court held:

The self-dealing rule applied to personal representatives as

it applied to trustees, and was not excluded by s. 41a of the

Administration of Estates Act 1925. Thus, it was not

permissible for a personal representative to make an

appropriation in his own favour in satisfaction of a

pecuniary l egacy t o h imse l f , un l e s s the as s e t s

appropriated were cash or equivalent to cash. In the instant

case, shares in s. Ltd, being unquoted investments, were

not the equivalent of cash, and accordingly the

appropriation by the widow without either the sanction of

the court or the consent of the beneficiaries whereby she

purported to become the beneficial owner of, and not

merely the personal representative holding, those shares

was invalid. The declaration sought would therefore be

granted (see p 763 g to j and p 764 e to j , post).

And later (at 759):

There is no case in which an appropriation by a personal

representative in his or her own favour of assets of the

estate in satisfaction of a pecuniary legacy has been

upheld. Indeed there seems to have been no case dealing

with such an appropriation at all. Such an appropriation is,

it seems to me, in clear contravention of the self-dealing

rule. It is equivalent to a purchase by the personal

representative of the appropriated assets. That being so, it

may not be surprising that there is no case to be found

where such an appropriation has been taken to court in an

attempt for it to be upheld. Be that as it may, there is

simply no such case that counsel have been able to find.

70. The authorities discussed above illustrate that an administrator or personal

representative is not at liberty to transfer estate assets to himself without the sanction

of the court or the consent of the beneficiaries. The defendant has in breach of


39

section 60(4) of the 1959 Act transferred and appropriated the house to himself. This

constitutes a breach of trust.

71. There is one further matter. The application by the defendant also made reference to

section 6(1)(ii) Distribution Ordinance. This provision reads:

(1) After the commencement of this Ordinance, if any person

shall die intestate as to any property to which he is beneficially

entitled for an interest which does not cease on his death, such

property or the proceeds thereof after payment thereout of the

expenses of due administration shall, subject to the provisions

of section 4, be distributed in the manner or be held on the

trusts mentioned in this section, namely-

(i) If a woman die intestate leaving a husband, the whole of

her estate shall go to him

(ii) If a husband dies intestate leaving a wife and issue, the

surviving wife shall be entitled to one-third of the estate : but if

he leave a wife and no issue, the surviving wife shall be entitled

to one-half of the estate

72. Section 6(1)(ii) is concerned with the distribution of the estate of a husband

who dies intestate leaving a wife and children. It has no application to the

transfer of estate property to the name of administrator. The defendant was

not the wife of the deceased and I fail to understand the relevance of this

provision in seeking an order for the house to be vested in him in his capacity

as the administrator.

73. The question that arises is whether the plaintiff entitled to rely on these facts as

a basis to apply to the court for a revocation of the two LAs granted to the

defendant to administer the estate of Ariasakthi and the deceased. He is not a

beneficiary under both estates. Does he have the requisite locus to apply for


40

revocation of the letters of administration. The defendant took the position that he

had no standing.

74. Section 34 of the 1995 Act provides:

Any probate or letters of administration may be revoked or

amended for any sufficient cause.

75. The scope of section 34 was considered by the Federal Court in Re Khoo Boo

Gon (decd) ; Khoo Teng Seong v. Teoh Chooi Ghim & Ors [1981] 2 MLJ 68.

Chang Min Tat FJ said (at 69):

The power to revoke a grant of probate or letters of

administration is vested in the High Court by section 34 of the

Probate& Administration Act, 1959 (Rev. 1972) and can be

exercised for any sufficient cause. However, there is no

definition of what is sufficient cause. But, if in the words of

Jeune, President, in In the Goods of William Loveday [1900] P

154, the real object which the court must always keep in

view is the due and proper administration of the estate and

the interests of the parties beneficially entitled thereto, then

the test of what is a sufficient cause is the due and proper

administration of the estate and the interests of the

beneficiaries. In our view, that is a strictly objective test.

(emphasis added)

76. The onus is on the plaintiff to establish that there is sufficient cause for the

revocation. He has an interest in the house that has been transferred to the

defendant. He claims the house was a gift to him by the deceased upon the

house devolving to her upon the dea th of her daught er , Ar iasakth i . In my


41

judgment, the plaintiff is clothed with the requisi te locus because he has an

interest in the estates of both the deceased and Ariasakthi and is therefore entitled

to apply for the LA to be revoked pursuant to section 34.

77. For the foregoing reasons, I therefore revoke the two LAs granted to the

defendant.

Issue 6 : Whether Order dated 21 September 1998 can be set aside sue motu by

the Court?

78. The final point has to do with the Order of Court dated 21 September 1998. It was

undisputable that it had been obtained in breach of section 60(4) of the 1959 Act.

The legal effect of an order obtained in breach of a statutory provision was

considered by the Federal Court in Badiaddin bin Mohd Mahidin & Anor v.

Arab Malaysian Finance Berhad [1998] 1 MLJ 393. His Lordship Mohd Azmi

FCJ explained (at 409):

For my part, I must hasten to add that apart from breach of

rules of natural justice, in any attempt to widen the door of

the inherent and discretionary jurisdiction of the superior

courts to set aside an order of court ex debito justitiae to a

category of cases involving orders which contravened any

written law, the contravention should be one which defies a

substantive statutory prohibition so as to render the defective

order null and void on ground of illegality or lack of

jurisdiction. It should not for instance be applied to a defect

in a final order which has contravened a procedural

requirement of any written law. The discretion to invoke the

inherent jurisdiction should also be exercised judicially in

excep t i ona l cas es where the de f e c t i s o f such a s e r i ous


42

nature that there is a real need to set aside the defective order

to enable the court to do justice. In all cases, the normal

appeal procedure should be adopted to set aside a defective

order, unless the aggrieved party could bring himself within

the special exception.

79. Gopal Sri Ram JCA addressed the same issue (at 426):

It is one thing to say that an order of a court of unlimited

jurisdiction must be obeyed until it is set aside. It is quite a

different thing to say that a court of unlimited jurisdiction may

make orders in breach of written law. Isaacs v. Robertson is

certainly not authority for the latter proposition. I take it to be

well settled that even courts of unlimited jurisdiction have no

authority to act in contravention of written law. Of course, so

long as an order of a court of unlimited jurisdiction stands,

irregular though it may be, it must be respected. But where an

order of such a court is made in breach of statute, it is made

without jurisdiction and may therefore be declared void and

set aside in proceedings brought for that purpose. It is then

entirely open to the court, upon the illegality being clearly

shown, to grant a declaration to the effect that the order is

invalid and to have it set aside. It is wrong to assume that

such an order may only be corrected on appeal.

(emphasis added)

80. The oft - quoted dictum of Gopal Sri Ram JCA makes it clear that an order which

is null and void can only be set aside in proceedings brought for that purpose. In

relying on that dictum, the defendant pointed out that there was no prayer in the

statement of claim for the order dated 21 September 1998 to be set aside. In the


43

absence of such a prayer, the Court had no power to set it aside. The plaintiff

conceded that there was no express prayer but pointed out that there was a prayer

seeking for such other or further as is deemed fit and proper by this honourable

Court. The plaintiff contended this prayer must not be treated as a mere ornament

to pleadings devoid of any meaning based on the decision in Lim Eng Kay v.

Jaafar bin Mohamed Said [1982] 2 MLJ 156 and Ritz Garden Hotel (Cameron

Highlands) Sdn Bhd v. Balakrishnan a/l Kaliannan [2013] 6 MLJ 149.

81. In Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 2 MLJ 565, a

similar objection was taken when the Court made an order that was not sought in

the application. The appellant there contended that the High Court had erred in

setting aside the whole judgment when the application by the respondent was

merely to set aside a portion of the judgment. In rejecting the argument, the

Gopal Sri Ram JCA explained (at 382 and 383):

The next question that arises is whether the learned judge

was right in reversing the order he made in chambers and in

setting aside the whole of the judgment, when the summons

before him sought to set aside only so much of the judgment

that directed the assessment of damages. I think that he was.

This is a case in which the plaintiffs had absolutely no right

whatsoever to obtain an order for the assessment of

damages. There was, as earlier observed, no judgment for

damages against the defendants on 28 November 1991. It is

elementary law that there can be no assessment of damages

in the absence of a judgment granting damages. Such a

judgment did not come until 2 December 1991. So, here is a

case where the cart had been squarely placed before the

horse. The judgment for the assessment of damages was

found in a judgment which was flawed in other respects.


44

The learned judge was therefore perfectly entitled, in the

interests of justice, to take cognizance of the breach of O. 13 r

6(1) and to set aside the whole of the offending judgment. The

authority of a court to act suo motu to set aside a judgment

entered pursuant to its coercive power must, no doubt, be

exercised with caution. But it is there to be exercised in

appropriate cases; and I am satisfied that the case at hand

was indeed a proper case.

(emphasis added).

82. An administrator is appointed by the court to be the guardian of the estate. He is in

a fiduciary position with regard to the assets that come into his possession by

virtue of his office. His duty is to preserve them and deal with them in

accordance with the law; to apply them in the due course of administration for

the benefit of the creditors, legatees of various sorts, and the residuary

beneficiaries. In breach of his fiduciary duties, the defendant has obtained a court

order to transfer an asset of the estate to himself without the knowledge and

consent of the beneficiaries. This court cannot simply fold its arms and look

askance without acting positively in the interest of justice and setting matters right

where there has been a serious breach of the law. In such a case as this where

the defendant has been guilty of self dealing, it is not only permissible but

incumbent on the court to act suo muto to intervene to do what is just and to

protect the estate of the deceased by setting aside the Court Order dated 21

September 1998. This Court has the inherent power to make any order as may be

necessary to prevent injustice or to prevent an abuse of the process of the Court

pursuant to Order 92 rule 4 ROC.


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Conclusion

83. For the reasons given, I allow the plaintiffs claim with costs of RM25,000.00.

84. I would end by thanking counsel for the invaluable assistance to the court.

Dated: 30 JUNE 2014

(S M KOMATHY SUPPIAH)

Judicial Commissioner

High Court of Malaya

Kuala Lumpur

COUNSEL:

For the Plaintiff - Steven Thiru (Aaron Matthews, Darmain Segaran & Gregory Das with

him); M/s Isaacs & Isaacs

For the defendant - M Manoharan; M/s M Manoharan & Co

Guindarajoo v Satguna

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