The plaintiff in Suit No 22NCVC-575–11 of 2015 (‘Suit 575’) was a company under liquidation. The defendant in Suit 575 who was also the plaintiff in Suit No BA-22NCVC-129–03 of 2016 (‘Suit 129’) was a sole proprietor of a legal firm known as Messrs George Varughese. The subject matter that was in dispute in these two actions was in respect of two properties known as Lot E-37-03 (‘Unit E-37’) and Lot E-38-03 (‘Unit E-38’), Type E in one commercial centre known as 3 Two Square, situated on part of the land held under HS(D) 240117, PT 8, Seksyen 36, Bandar Petaling Jaya, Selangor (‘the subject property’). By two separate sales and purchase agreements (‘SPAs’) dated 30 November 2007 between 3 Two Square Sdn Bhd (‘3 Two Square’) as the vendor and developer and the plaintiff as the purchaser, the plaintiff had agreed to purchase both units E-37 and E-38 for RM845,770 and RM779,200 respectively. CIMB Bank Bhd (‘CIMB’) financed the purchase of the subject property by way of a third party charge through a financial package known as the Flexi Business Premises Facility (‘the facility’). The borrowers of the facility were A Thanushia (‘Thanushia’) and Suresh Supramaniam (‘Suresh’) who were both the directors of the plaintiff before the latter’s winding up. According to the letter of offer from CIMB dated 22 April 2008 in respect of the facility, part of the security was that pending the issuance of separate strata titles in respect of the subject property, Thanushia and Suresh would have to execute a deed of assignment of the same in favour of CIMB. The plaintiff’s case was that it was the rightful legal owner of the subject property. In the circumstances, in Suit 575, the plaintiff was seeking for an order for the eviction of the defendant and the delivery of vacant possession of the subject property. On the other hand, the defendant claimed that he was the beneficial owner of the subject property by virtue a trust deed (‘TD’) and an irrevocable power of attorney (‘IPA’) both dated 31 January 2008. Another document, which admissibility was in dispute, was the plaintiff’s members resolution dated a day prior to the execution of the SPA’s. The members resolution purportedly resolved that the subject property was to be held on trust by the plaintiff for the defendant as the beneficial owner of the same. The TD was entered into between the plaintiff as the trustee and the defendant as the beneficiary of the subject property. The IPA was also executed by the plaintiff in favour of the defendant, granting the defendant the absolute power to deal with the subject property. Therefore, the defendant, as the plaintiff in Suit 129, had sought reliefs in the form of declaratory orders that the defendant was the beneficial owner of the subject property and that the plaintiff was holding the same in trust for the benefit of the defendant.
Held:
(1) The plaintiff must show to the court that it was indeed the legal and beneficial owner of the subject property. Going by the tendency of the plaintiff to argue on the technicality of things on the admissibility and relevance of the three instruments, at the very least the plaintiff would be able to adduce some documentary evidence on its directors’ resolution to even enter into the SPAs as well. Unfortunately, there was nothing before the court (see paras 45 & 47).
(2) It was unarguable at law that a document marked as ID was not an exhibit and could not be relied upon. Therefore the members resolution marked as ID was disregarded and the evidence was inadmissible (see paras 48–49).
(3) The SPAs could not possibly make reference to the TD and IPA when the former were executed two months earlier. However, on the IPA, the argument that it only took effect on the date it was deposited at the registrar’s office merited consideration. The IPA was only valid on the day it was deposited at the High Court’s registry which was on 23 January 2015 (‘the effective date’). The legal impediment was that, by the time it was deposited, the plaintiff had already been wound up. Therefore, the IPA was not valid since the plaintiff company would had no capacity to give the power of attorney by the effective date (see paras 51–54).
(4) The reason advanced by the defendant for not being able to produce the original TD was plausible and accepted. The evidence of Johan Mohan Abdullah (‘DW2’) that the reprinted version of the TD was and one and the same with the misplaced one was also accepted. The oral evidence which was given by DW2 and the defendant came within s 65(1)(e) of the Evidence Act 1950 (‘the EA’). Since the reprinted version of the TD was a copy made from the original by mechanical process, s 65(1)(b) was equally applicable. Even if the second TD was not re-signed by the parties, it was still admissible under s 65(1)(b) and (e) of the EA since DW2 categorically testified in no uncertain terms that the second TD was one and the same with the original TD. Hence, the TD was a valid document. The failure of the plaintiff to lodge the same with the Companies Commission of Malaysia (‘SSM’) did not in any way affect its validity as against the defendant (see paras 64–66 & 68).
(5) Section 6.07(1) of the SPA was to protect the interest of the developer. The deed of assignment would only affect the validity of the SPA, TD and the facility agreement if and only if it would adversely affect the interest of the developer. Since the interest of the developer was not prejudiced, section 6.07(1) of the SPAs did not operate so as to affect the validity of the TD and the facility (see paras 71 & 73).
(6) Since the maker of the TD had given evidence, there was no necessity for the defendant to call either Thanushia or Suresh to give evidence. Both of them were not material witnesses and therefore s 114(g) of the EA did not apply (see para 74).
(7) Nothing, on the balance of probabilities, that suggested that the plaintiff had made any payment towards the purchase of the subject property. Yogananthan a/l Kanapathipillay’s (‘SP2’) testimony was not corroborated by any contemporary document and was therefore disregarded. Further, the court accepted the defendant’s evidence that he had paid the initial deposit, further part payment of RM200,000 each, maintenance, other relevance charges including quit rent, assessments and the monthly loan instalments to CIMB pursuant to the facility in respect of the subject property. Therefore, the TD was found to be valid and enforceable as against the plaintiff and that the plaintiff held the subject property on trust for the benefit of the defendant. Thus, the plaintiff’s claim in Suit 575 was dismissed with costs of RM50,000 subject to allocatur. As a consequential order, the defendant’s claim was allowed in terms of the prayers in para 37(a), (b), (c), (d), (e), (g), (h), and (i) of the statement of claim. Since the plaintiff was under liquidation, only a nominal damages of RM5,000 was allowed (see paras 75 & 79–81).
THE IRREVOCABLE POWER OF ATTORNEY
[51] Learned counsel for the plaintiff in his usual forceful self, submitted that the TD and IPA were not even referred to in the SPAs for them to be clothed with some form of legitimacy. However, with respect, there is a flaw in this line of argument. The SPAs were both dated on 30 November 2007 whilst the TD and IPA were dated on 31 January 2008. The SPAs could not possibly make reference to the TD and IPA when the former were executed two months earlier.
[52] However, on the IPA, I think the argument that it only took effect on the date it was deposited at the registrar’s office merits consideration. As can be seen from exh D11, the IPA was only deposited on 23 January 2015 at the deputy registrar’s office. The defendant, in answer to Q53 of his witness statement, attempted to explain the delay as follows: A53: As I understand the law, these documents are perfectly legal and valid documents and are binding on the parties. The documents only need to be stamped if they are to be used in a Court of Law. The arrangement I had with A Thanushia and Suresh AIL Supramaniam and MTVSB is of a personal and friendly nature. The arrangement was of an informal nature and that is the reason why I decided not to stamp the documents at the time. But, when I received the Notice of demand dated 13th January 2015 from Messrs Hakem Arabi & Associates in respect of the two (2) Properties and demanding vacant possession of the same, I realized that there was a problem and I then stamped both the Trust Deed and the Irrevocable Power of Attorney and registered the Power of Attorney in the High Court. This is because I knew that these documents are important for use in the Court since there were Solicitors acting for the Liquidator and it appeared that the matter would be litigated in Court. I can appreciate that the issue of the legality of a document does not depend on whether it is stamped or not. That goes to the admissibility. And once a document is stamped, no matter how late, provided the proper penalty is paid, it is admissible in the court of law. If any authority is needed on the aforesaid proposition, it can be seen in the Federal Court case of Malayan Banking Bhd v Agencies Service Bureau Sdn Bhd & Ors [1982] 1 MLJ 198 (FC), where it was held that an unstamped document could be received in evidence on payment of the penalty provided under s 51(1)(d) of the Stamp Act 1949.
[53] Having said that, I must however underline that a power of attorney is no ordinary document. Its validity goes beyond the stamping. It is governed by the 1949 Act where specific procedures must be adhered to before it becomes valid. The issue here is not that of admissibility. It concerns the date of validity of the IPA itself. On the authority of Wan Salimah bteWan Jaffar v Mahmood bin Omar (Anim bte Abdul Aziz, intervener) [1998] 5 MLJ 162, I agree with the argument by learned counsel for the plaintiff that the IPA is only valid on the day it was deposited at the High Court’s registry which is on 23 January 2015 (‘the effective date’).
[54] There is therefore this legal impediment in that, by the time it was deposited, the plaintiff had already been wound up. Despite my research on this point of law, I cannot find any authority that would allow me to conclude that the validity of a power of attorney could be of retrospective effect from the date it was executed. For the aforesaid reason, it is my finding that the IPA is not valid since the plaintiff company would have no capacity to give the power of attorney by the effective date.
[55] Even if we assume for one moment that the IPA was deposited on the date of its execution, which was on 31 January 2008, the status of the same stands revoked on the winding up of the plaintiff company on 18 October 2011. I find support in the aforesaid proposition by making reference to s 5 of the 1949 Act which provides that a power of attorney continues to be valid and in force, until a receiving order has been made against the donor in bankruptcy. Applying the law mutatis mutandis, the IPA would have been revoked by operation of law on 18 October 2011. [56] To conclude at this stage, it is my finding that the IPA is therefore invalid.
Source: Modular Tropical Ventures (M) Sdn Bhd (in liquidation) v George Varughese (practising as advocate and solicitors under the name of Messrs George Varughese & Co) and another appeal [2019] 7 MLJ 506. Shah Alam HC. Wan Ahmad Farid JC
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