| GEE BOON KEE & ORS V TAN POK SHYONG (AS LEGAL REPRESENTATIVE OF THE ESTATE OF TAN AH TONG) [2018] 1 MLJ 155
Federal Court (Putrajaya)
Specific Performance – Time Lapsed – S6(3) Limitation Act 1953 |
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| Facts |
1. In 1973, the Appellants entered into sale and purchase agreements (“SPA”) with Tan Ah Tong over two pieces of land, Lot 512 and Lot 513 (“the said lands”). The Appellants paid the full purchase price of the said lands.
2. In 1974, Tan Ah Tong charged the said lands to Chase Manhattan Bank.
3. In 1986, the Appellants sought two reliefs from the High Court (“HC”) i.e. that Tan Ah Tong was the trustee of the said lands and specific performance of their SPA.
4. In 2000, the HC granted the specific performance of their SPA (“the 2000 Order”). Subsequently, another charge was made on Lot 513 to RHB Bank by Tan Ah Tong.
5. Dissatisfied with the 2000 Order, Tan Ah Tong appealed to the Court of Appeal (“COA”), but the appeal was dismissed.
6. Following Tan Ah Tong’s death in 2001, his son Tan Pok Shyong was substituted as the Legal Representative of his estate (“the Respondent”).
7. In 2014, Lot 513 was auctioned by RHB Bank. This prompted the Appellants to lodge a caveat on Lot 513 to protect their interest, which the Respondent objected to.
8. In 2015, the Appellants filed an application (Encl. 292) seeking an order to compel the Respondent to transfer Lot 513. The Respondent objected, arguing the application was barred by limitation under subsection 6(3) of the Limitation Act 1953, which imposes a 12-year limit on the enforcement of judgments.
9. The HC held in favour of the Appellants, ruling that it had inherent jurisdiction under Order 92 Rule 4 to prevent injustice. Given the loss of Lot 512 through foreclosure, it was just to order the transfer of Lot 513. The 2000 specific performance order implied a trust, thus, subsection 22(1) of the Limitation Act 1953 applied, and the claim was not time-barred.
10. However, the Court of Appeal (“COA”) reversed the HC’s decision, holding the action barred by limitation under subsection 6(3) of the Limitation Act 1953.
11. The Appellants subsequently appealed to the Federal Court (“FC”).
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| Issue | 1. Whether the Appellants’ 2015 application to enforce the 2000 Order was barred by limitation under subsection 6(3) of the Limitation Act 1953.
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| Ratio | 1. Whether the Appellants’ 2015 application to enforce the 2000 Order was barred by limitation under subsection 6(3) of the Limitation Act 1953.
(a) The FC was of the opinion that the Appellants’ application (Enclosure 292) was not a fresh action, but rather a continuation of an earlier decree for specific performance granted in 2000. Therefore, the FC emphasised that once a decree of specific performance was granted, the underlying contract remains in effect and was not merged into the judgment.
(b) This principle was supported by the House of Lords in Johnson v Agnew [1979] 1 All ER 883, where it was held that a court of equity retains supervisory jurisdiction over its decree for specific performance, allowing it to make further orders to ensure compliance.
(c) The FC’s interpretation of the word “action” under subsections 2(1) and 6(3) of the Limitation Act 1953 were as follows- (i) The FC adopted a narrow reading, holding that “action” refers to a fresh proceeding initiated in court and does not include applications that merely seek to enforce or carry out an existing decree. (ii) This interpretation was consistent with English authority, particularly WT Land & Sons v Rider [1948] 2 AII ER 42 and Lowsley v Forbes [1998] 3 AII 897, which distinguish between actions brought to obtain a new judgment and procedural steps to enforce an existing one.
(d) The FC emphasised that the COA failed to consider the effect of the incidental or ancillary order granted by the COA in 2005 to the 2000 Order, which expressly permitted the Appellants to apply for additional orders in relation to the execution of the specific performance decree. Therefore, the FC held that Enclosure 292 fell squarely within the scope of the said incidental order.
(e) As such, the application was not barred by limitation as it was filed within 12 years from the date of the 2005 Order, thus satisfying the requirement under subsection 6(3) of the Limitation Act 1953.
(f) The FC also distinguished Daud v Ibrahim [1961] 1 MLJ 43, which had been relied upon by the COA, whereby the FC held that in that case, the Plaintiff attempted to enforce a judgment many years after it was granted, without any intervening order maintaining the court’s involvement. However, in contrast, the Appellants in the present case acted pursuant to an express liberty to apply granted in 2005, and the FC maintained continuous supervisory control under its equitable jurisdiction.
(g) In conclusion, the FC reiterated that equitable relief like specific performance was not rigidly subjected to limitation statutes where a court maintains control over the decree and enforcement was sought under express judicial authorisation.
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| Decision | The FC allowed the appeal and held that the limitation period did not bar the application. The FC also confirmed that the Appellants were entitled to continue execution of the 2000 Order under the Court’s equitable jurisdiction.
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| Key Takeaways | 1. Specific performance decrees are not merged into judgments and remain effective contracts until concluded or discharged by the Court.
2. Applications to complete such decrees are not fresh actions and are not time-barred by subsection 6(3) of the Limitation Act 1953.
3. Courts exercising equitable jurisdiction retain continuing supervisory powers to enforce or modify relief where necessary to prevent injustice. |
