Land Custody and Development Authority & Anor v Pang Chee Hun & Ors

Appellant(s): Bayu Sempurna Sdn. Bhd.

Respondent(s):

• Pang Chee Hun @ Phang Chee Hun
• Liew Shin Lian
• Chai Nyuk Jin
• Merces Builders (S) Sdn. Bhd. (In Liquidation)
• Land Custody And Development Authority

• YA Dato' Paduka Azman Bin Abdullah
• YA Dato' Azmi Bin Ariffin
• YA Datuk Dr Lim Hock Leng

• The plaintiffs purchased two shophouses from the 1st defendant (developer) in 2002, paid a substantial portion of the purchase price (RM472,000), and took vacant possession in 2005, subsequently paying assessment rates and collecting rental.
• The balance purchase price (RM314,800) was not disbursed due to the 1st defendant's failure to return loan documentation and pay a shortfall to the chargee bank; the 1st defendant was later wound up in 2007.
• In 2017, the 2nd defendant (landowner) and 3rd defendant (subsequent purchaser) entered an agreement where the 2nd defendant purported to sell "Remaining Lots," including the shophouses, to the 3rd defendant, who paid the redemption sum to the chargee bank.

• Whether a constructive trust could be imposed on the defendants when the purchasers had not paid the full purchase price and thus were allegedly not beneficial owners.
• Whether the purchasers' claim for specific performance and declarations of ownership was barred by delay (laches) or the Limitation Ordinance.
• Whether the High Court erred in admitting old payment receipts without the maker and in granting specific performance without ordering payment of overdue interest on the balance sum.

• The Court of Appeal dismissed both appeals and the cross-appeals, affirming the High Court's decision that the purchasers were rightful owners and a constructive trust arose.
• The Court held that a constructive trust can arise upon the execution of a valid contract, even before full payment, especially when the non-payment of the balance is not due to the purchaser's fault, thereby preventing unjust enrichment.
• The claims were not barred by laches or limitation, as the purchasers were in possession under a subsisting contract, and the 1st defendant (against whom specific performance was sought) did not plead limitation.
• The Court found the old payment receipts admissible under the Evidence Act 1950 and upheld the specific performance order without overdue interest, as it was not pleaded and the purchasers were not at fault for the delay in full payment.