SITI ASIAH BINTI SALLEH v ABU BAKAR BIN CHU

Case Significance

Confirms that section 145 of the National Land Code 1965 gives the court a discretion to order the sale of jointly owned land to terminate a co-proprietorship, and that equal shares under section 343 will stand absent a proven trust, whatever the parties' unequal historical contributions.

This High Court decision at Kuala Lumpur concerns an application under section 145 of the National Land Code 1965 to terminate a co-proprietorship of a shophouse by ordering its sale, and it rejects an asserted trust in favour of one co-owner's estate. The plaintiff and her younger sister had bought the shophouse in 2003 for RM540,000, financed by a bank loan of RM405,000, with the plaintiff paying RM150,000 upfront because her sister could not then contribute; the two were registered as co-proprietors of a half share each. Over the years the sister used the ground floor for her own business without paying rent and let the upper floors, using those rentals to service the loan, so that the plaintiff received nothing from her half share. After the sister's death, her husband — the defendant, sued as administrator of the sister's estate — continued to collect the rents without accounting to the plaintiff and ignored her requests for information. The defendant pleaded that a resulting or, alternatively, a constructive trust arose in favour of his late wife. The court examined the facts and found no basis for any trust, rejecting the defendant's assertion that his late wife had borne about 87% of the acquisition costs as unconscionable. Applying section 343 of the National Land Code, it held that the co-proprietors' shares were equal half shares each as recorded on the title. Guided by the Court of Appeal in Ong Chin Hai v Ong Hoo See on the discretion under section 145, and noting the additional power under section 25 and the Schedule to the Courts of Judicature Act 1964, the court observed that the plaintiff, having received nothing from her half share for more than two decades while her sister and then the defendant enjoyed the ground floor and the upper-floor rents, was not even pressing for an account of those rents but simply invoking the statutory termination power. The court exercised its power under section 145(2)(c) of the National Land Code 1965 to order the shophouse to be sold so that the co-proprietorship could be terminated, the proceeds to reflect the parties' equal half shares.