Federal Court (Putrajaya)

Lack of jurisdiction


1.   Tan Yew Lim (TYL) was the first owner of a plot of property at No. GM 175, Lot Number 752, Mukim Ijuk, Daerah Kuala Selangor, Selangor (“the Land”).

2.   The First Defendant’s father was TYL and on October 23, 1995, TYL passed away.

3.  Tan Tuan Kam (TTK) and TYL were brothers, TTK’s spouse was the Second Defendant where TTK and the Second Defendant’s kid was the Third Defendant.

4.  The Plaintiff had a sale and purchase agreement (S&P) dated 27.1.2005 with the First Defendant for a payment of RM300,000.00, which was completely paid.

5.  On June 27, 2005, the ownership of the land was transferred to and registered in the Plaintiff’s name.

6.  However, the First Defendant claimed that he had inherited the Land from his deceased father (“TYL”). The distribution order of 22.12.1997 made this clear.

7.  The Land, according to the Second Defendant and the Third Defendant, was purchased by TTK but registered in TYL’s name because TTK wished to help TYL, who at the time was jobless and had no income to support his family.

8.  TYL assured TTK that the land’s title would be transferred to him later. The area then was developed by TTK’s family, where the proceeds from the fruit, palm oil, and rubber trees that were shared planted there before the First Defendant was born in 1972. According to the Second and Third Defendants, TYL signed Form 14A on September 30, 1995, in the presence of the First Defendant so to transfer the Land to the Second Defendant.

9. Nevertheless, the Second Defendant sued the First and Fourth Defendants in civil suit number 21-211-2004 (“2004 Case”) on April 24, 2004, so for the Court to declare as follows:

(a) The Land was at all material times belongs to the Second Defendant;

(b) The First Defendant to transfer the Land to the Second Defendant as it belongs to her; and

(c)  Any caveat made by the First Defendant to be revoked.

10. Being the Plaintiff in the 2004 Case, the Second Defendant secured a judgement in default against the First Defendant on December 16, 2010 as the First Defendant’s failure to appear in Court.  The High Court issued the subsequent ruling:

“Mahkamah mengistiharkan bahawa tanah EMR 15, Geran 752 di daerah Ijok, Kuala Selangor adalah pada semua masa yang material kepunyaan Plaintif kerana Plaintif memiliki, memajukan dan mengerjakan tanah tersebut tanpa gangguan daripada pemilik berdaftar dahulu Tan Yew Lim sehingga kematian beliau.”

11. Following that the Second Defendant (the Plaintiff in the 2004 case) and the Fourth Defendant (Pentadbir Tanah Kuala Selangor, the Second Defendant in the 2004 Case) entered a consent order on 5 April 2011 based on the said judgement in default, directing the Fourth Defendant to register the Second Defendant as the Land’s proprietor.

12.  Additionally, it was decreed that Tan Ping Nah, the First Defendant, was ineligible to engage in any transactions involving the Land.  The consent order did not include the First Defendant as a party.  The Plaintiff was also not included as a party to that same order.

13. The Land was eventually transferred from the Plaintiff to the Second Defendant via presentation no. 1767/2012 in accordance with the court order in the 2004 Case.

14. On 12 July 2012, such move was officially recorded. Later, the Second Defendant transferred ownership of the Land to the Third Defendant pursuant to Presentation No. 2330/2012, which was recorded on 21 September 2012.

15.  In other words, the Plaintiff “lost” the said Land when it was transferred to and registered in the Second Defendant’s name before it was subsequently transferred to and registered in the Third Defendant’s name, seven (7) years after the said Land was transferred and registered in his name after he bought it from the First Defendant.

16.  Following that, the Plaintiff filed a lawsuit on 18 March 2013 in which the Second and Third Defendants were ordered to pay the Plaintiff’s claim’s expenses by the High Court.

17.  The learned High Court Judge believed that the default judgement dated 16 December 2010 and the consent judgement might be overturned since the Defendants were aware of the Plaintiff’s interest in the land but proceeded with the abovementioned transactions without giving it the proper consideration.

18.  The Second Defendant and the Third Defendants subsequently appealed to the Court of Appeal after being upset by that result. The Court of Appeal dismissed their appeal with costs on May 18, 2012.

19.  The Plaintiff was required to follow the instructions under section 417 of the National Land Code in order for his name to be re-registered on the title to the subject property after the Court of Appeal upheld the High Court’s ruling in the Plaintiff’s favour.

20.  On July 7, 2017, this Court granted the Second and Third Defendants’ request for leave to appeal.

Issue Whether the High Court has the power to set aside the order of another High Court of concurrent jurisdiction?

1.    It is established law that one High Court cannot reversed a final judgement that has been legitimately acquired from a different High Court with concurrent jurisdiction.

2.  In explaining paragraph 1, the verdict in Badiaddin Mohd Mahidin v Arab Malaysian Finance Berhad [1998] 1 MLJ 393 (“Badiaddin”) makes it clear which reads-

“the Court’s inherent jurisdiction has no extended scope to correct an earlier regular judgment or order in exceptional circumstances, other than where the judgment had been granted in contravention of a statute.”

3.    The High Court’s final judgement, however, may be shown to be invalid due to illegality or lack of jurisdiction, constituting a particular exception to this rule.

4.   In this situation, the person who is impacted by the order has the right to ask for its ex debito justitiae reversal in the exercise of the Court’s inherent jurisdiction.

5.   In his landmark decision in Badiaddin, Azmi FCJ provides an explanation of this as follows:

“It is of course settled law as laid down by the Federal Court in Hock Hua Bank’s case that one High Court cannot set aside a final order regularly obtained from another High Court of concurrent jurisdiction. But one special exception to this rule (which was not in issue and therefore not discussed in Hock Hua Bank) is where the final judgment of the High Court could be proved to be null and void on ground of illegality or lack of jurisdiction so as to bring the aggrieved party within the principle laid down by a number of authorities culminating in the Privy Council case of Isaacs v Robertson [1985] AC 97 where Lord Diplock while rejecting the legal aspect of voidness and voidability in the orders made by a court of unlimited jurisdiction, upheld the existence of a category of orders of the court ‘… which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court, without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity, and give to the judge a discretion as to the order he will make’.”

[Emphasis is added]

6.    Based on the above, in other words, where the High Court’s final decision is unlawful due to illegality or lack of authority, another High Court with concurrent jurisdiction may overturn it.  Clearly, such an order is one that violates natural justice. In this situation, the party who was impacted by the order may seek its annulment in collateral procedures.

7.    The Court held that orders that violated natural justice include the default judgement and the consent judgement rendered in the 2004 Case.

8.    The learned High Court Judge did not find any evidence to support the claims made by the Second and Third Defendants that the First Defendant had seen TYL signed Form 14A or that the land was purchased by TTK and merely registered in TYL’s name with the intention of aiding TYL, notwithstanding what they had claimed.

9.    Additionally, there was no proof of any transfer from TYL to TTK.  Therefore, the Federal Court have no grounds to dispute to the parties’ conclusions.

10. The learned trial judge also reached the factual conclusion that the Plaintiff did not commit fraud when he entered into the sale and purchase agreement with the First Defendant to purchase the aforementioned land.

11.  The Second, Third, and Fourth Defendants were all aware of the Plaintiff’s interest in the land when the default judgement and the consent judgement were entered.

12.  However, Plaintiff was neither served with those judgments nor made a party to the 2004 Case.

13.  Indeed, the learned judge of the High Court found that the Plaintiff only became aware of the Second Defendant’s interest after the Land Office denied his request to enter a caveat on September 13, 2012, which prompted him to file the Plaintiff’s action.

14.  Turning to the appeal at hand, the Federal Court held that the judgement in default and the consent order that stripped the Plaintiff of his registered interest in the Land were improper, invalid, and should be set aside because they had no bearing on the Plaintiff.

15.  Therefore, it was appropriate for the High Court to grant the Plaintiff’s claim, which had the effect of vacating the earlier rulings the High Court had issued in the 2004 Case.

Decision 1.    The Federal Court has dismissed the appeal with costs. The orders of the Courts below are avowed.
Key Take Away

1.     The ex debito justitiae principle is based on the understanding that the justice delivery system owes a litigant a debt to rectify an error in a judgement.

2.     Technically, the application for rights under ex debito justitiae is made pursuant to set aside a Judgement in Default (“JID”) which was entered against the defendant by the plaintiff on the basis that the JID is irregular.


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