Land Custody and Development Authority v Pang Chee Hun & Ors

Appellant(s): Land Custody And Development Authority

Respondent(s):

• Pang Chee Hun @ Phang Chee Hun
• Liew Shin Lian
• Chai Nyuk Jin
• Merces Builders (S) Sdn. Bhd. (In Liquidation)
• Bayu Sempurna Sdn. Bhd.

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

• The purchasers entered into Sale and Purchase Agreements (SPAs) with a developer for two shophouses, paid a substantial portion of the price, and took vacant possession, although the balance remained unpaid due to the developer's failure to provide necessary documentation.
• The developer was subsequently wound up, and years later, the registered landowner purported to sell the "remaining lots" of the development (including the subject properties) to a third-party company.
• The third-party company sought vacant possession of the properties, leading the purchasers to seek declarations of their interest and specific performance of the SPAs against the developer, the landowner, and the third-party company.

• Whether a constructive trust can be imposed in favour of a purchaser who has not yet paid the full purchase price of a property, and whether such a purchaser can be considered a beneficial owner.
• Whether the registered landowner, having previously divested its beneficial interest to the original developer, could validly transfer title to a subsequent purchaser under the principle of *nemo dat quod non habet*.
• Whether the purchasers' claim was barred by the doctrine of laches or statutory limitation given the significant time elapsed since the execution of the SPAs and the winding up of the developer.

• The Court held that while a bare trust arises only upon full payment, a constructive trust is a remedial device imposed by equity to satisfy justice; therefore, the non-payment of the balance purchase price is not a bar to a claim for relief under a constructive trust.
• The Court affirmed that the landowner could not transfer beneficial interests it no longer possessed, and the subsequent purchaser could not claim to be a *bona fide* purchaser without notice because the purchasers' registered caveat and physical possession constituted notice to the world.
• The Court ruled that laches and limitation did not apply because the purchasers remained in possession under subsisting SPAs that were never terminated, and the cause of action only accrued when the third-party company first demanded vacant possession.