INTRODUCTION
The Court of Appeal in Tan Nyok Chin (as administrator and beneficiary of the estate of Yong An Yee @ Yong Soo Teck, deceased) v Pemungut Duti Setem [2026] 4 MLJ 583; [2026] 5 CLJ 418 unanimously allowed the appeal and set aside the decision of the High Court reported in [2024] 11 MLJ 355; [2024] 7 CLJ 486.
The Court of Appeal held that a beneficiary’s entitlement to an estate must not be confused with a beneficial and legal right or interest in the estate. Until the administration of the estate is complete and the estate has been distributed in accordance with law, the beneficiary does not possess a beneficial and legal interest capable of being given absolutely as a gift.
Lum Man Chan and Chew Jin Heng of Messrs Halim Hong & Quek, together with Desmond Liew successfully represented the Appellant in the Court of Appeal.
BACKGROUND FACTS
The late Yong An Yee @ Yong Soo Teck (“the Deceased”) was the husband of Tan Nyok Chin (“the Appellant”) and owned a piece of land held under Geran Mukim 3644, Lot 577, Mukim Serendah, Daerah Hulu Selangor, Selangor (“the Land”).
The Deceased died testate on 7 November 2019. The Deceased’s will provided that the Land would be distributed as follows: a 20% undivided share to the Appellant and the remaining 80% undivided share to the Deceased’s five children. The executor named in his will declined to administer the estate.
On 16 June 2020, the High Court granted letters of administration to the Appellant and appointed her as the sole administrator of the estate.
By a Deed of Settlement and Renunciation of Inheritance dated 27 March 2023 (“Renunciation Deed”), the Deceased’s five children renounced all their rights and entitlements to the 80% undivided share in the Land in favour of the Appellant only. By virtue of the will and the Renunciation Deed, the Appellant became the sole beneficiary of the Land.
On 30 May 2023, the High Court granted an order giving the Appellant, in her capacity as administrator, the right to transfer the Land to herself. To effect the transfer, the Appellant was given the right to execute the memorandum of transfer in Form 14A and all other necessary documents relating to the Land (“Vesting Order”).
Pursuant to the Vesting Order, the Appellant executed Form 14A to transfer the Land to herself. Form 14A was presented to the Collector of Stamp Duties (“the Collector”) on 23 June 2023 for adjudication of stamp duty under Section 36(1) of the Stamp Act 1949 (“Stamp Act”).
On 13 July 2023, the Collector imposed nominal stamp duty of RM10 on the transfer of the 20% undivided share in the Land to the Appellant (“Nominal Assessment”). The Collector separately imposed ad valorem stamp duty of RM20,800 on the transfer of the children’s 80% undivided share in favour of the Appellant (“Ad Valorem Assessment”).
The Appellant paid both assessments, but the Ad Valorem Assessment was paid under protest. She subsequently filed a notice of objection pursuant to Section 38A(1) of the Stamp Act.
On 2 August 2023, the Collector rejected the Appellant’s objection. The Appellant then appealed to the High Court against the Collector’s decision under Section 39(1) of the Stamp Act.
On 31 January 2024, during the case management for this matter, the Judicial Commissioner dismissed the High Court appeal with costs of RM6,000. In the grounds of judgment, the Judicial Commissioner held that the Ad Valorem Assessment had been correctly imposed.
Aggrieved by the decision, the Appellant applied to the Court of Appeal for leave to appeal pursuant to Section 68(1)(a) of the Courts of Judicature Act 1964. On 31 May 2024, the Court of Appeal granted leave for the Appellant to appeal against the High Court’s decision and ordered the costs of the leave application to follow the event of the appeal.
FINDINGS OF THE COURT OF APPEAL
High Court Should Not Have Decided the Appeal During Case Management
The Court of Appeal held that the purpose of case management is to ensure a “just, expeditious and economical disposal” of a suit or application by giving directions to the parties. Therefore, the High Court should not have decided the substantive appeal during case management.
The Court of Appeal observed that counsel handling a matter may send junior counsel to attend case management because senior counsel may be attending a trial or appeal. If the Court determines a substantive matter during case management, junior counsel may be caught off guard and may not be prepared to apply orally for a stay of execution or an Erinford injunction.
The Judicial Commissioner therefore committed an error of law in deciding the High Court appeal during case management. Nevertheless, both parties had filed written submissions and no injustice was occasioned to either party. The Court of Appeal accordingly invoked Section 72 of the Courts of Judicature Act 1964 to “cure” this error.
Renunciation Cannot Be Construed as a Gift
In Pemungut Duti Setem v Lee Koy Eng (as administrator for the estate of Tan Kok Lee @ Tan Chin Chai, deceased) [2022] 2 MLJ 453, the Court of Appeal accepted that the true nature of Forms 14A was solely to give effect to the renunciation by the deceased’s children of their entitlements under the Distribution Act 1958.
A beneficiary of a deceased’s estate has no right or interest in the estate until the administration of the estate is complete and the estate has been distributed in accordance with law. Consequently, the beneficiary does not possess a beneficial and legal interest in the estate capable of being given absolutely as a gift.
An entitlement to an estate is not equivalent to a beneficial and legal right or interest in the estate which can be given absolutely as a gift. When a beneficiary renounces or disclaims that entitlement before the estate has vested, the renunciation cannot be equated to an inter vivos gift to the person who ultimately receives the property.
The Vesting Order and Form 14A were merely the means by which the children’s renunciation was given effect. Form 14A could not be construed as a gift of the children’s interest in the estate because the estate had never vested in them.
High Court Was Bound by Lee Koy Eng
The Federal Court dismissed the Collector’s appeal against the Court of Appeal’s judgment in Lee Koy Eng. No written judgment was issued by the Federal Court.
The material facts and sole issue in Lee Koy Eng were similar to the present case. As a matter of stare decisis, the Judicial Commissioner was bound by the ratio decidendi of the Court of Appeal’s judgment in Lee Koy Eng. The Court of Appeal is likewise bound by its own precedent.
Form 14A Was Subject Only to a Fixed Amount of Stamp Duty of RM10
The Collector had wrongfully imposed the Ad Valorem Assessment on Form 14A. The Court declared the Ad Valorem Assessment invalid and held that Form 14A was subject only to a fixed amount of stamp duty of RM10 pursuant to item 32(i) of the First Schedule to the Stamp Act.
The true nature of Form 14A was to give effect to the children’s renunciation of their entitlements before the administration and distribution of the estate were complete. The instrument could not be construed as a transfer by way of gift because the estate had never vested in the children.
Refund, Interest and Costs
The Court exercised its powers under Section 69(1) of the Courts of Judicature Act 1964 and ordered the Collector to refund the RM20,800 previously paid by the Appellant; to pay interest at 5% per annum on that sum from the date of the Court of Appeal’s order until full payment; and to pay costs of RM10,000 for the High Court appeal, the application for leave to appeal to the Court of Appeal and the appeal itself.
No Further Right of Appeal to the Federal Court
The Court of Appeal held that there were only two rights of appeal in the matter. The first was the appeal from the Collector’s decision to the High Court under Section 39(1) of the Stamp Act. The second was the appeal from the High Court to the Court of Appeal under Section 67(1) of the Courts of Judicature Act 1964.
The Court of Appeal applied the case of Merck KGaA v Leno Marketing (M) Sdn Bhd (Registrar of Trade Marks, interested party) [2018] 5 MLJ 1, and held that upon the Court of Appeal’s adjudication of the second right of appeal, there could be no further resort to the Federal Court.
SUBSEQUENT FEDERAL COURT PROCEEDINGS
The Collector (LHDN) filed an application in the Federal Court for leave to appeal against the Court of Appeal’s decision [Civil Application No. 08(f)-296-08/2025(B)]. The application was subsequently withdrawn in March 2026.
IMPACT AND KEY TAKEAWAYS
The decision confirms that a beneficiary’s entitlement under a will or intestacy is not equivalent to a beneficial and legal right or interest in the deceased’s estate. Until the administration of the estate is complete, in the sense that the estate has been distributed in accordance with law, no such interest has vested in the beneficiary.
Accordingly, where a beneficiary renounces or disclaims an entitlement before the estate has vested, the renunciation cannot be construed as a gift merely because another beneficiary ultimately receives the property.
Although Lee Koy Eng concerned an intestate estate whereas the present case concerned a testate estate, the Court held that the material facts and sole issue in both cases were similar. The principle therefore applies whether the beneficiary’s entitlement arises under a will or by intestacy, provided that the renunciation occurs before the administration and distribution of the estate are complete.
In determining the stamp duty payable, the true nature of Form 14A and the underlying transaction must be considered. Where Form 14A merely gives effect to the renunciation of an unvested entitlement, it is subject to a fixed amount of stamp duty under item 32(i), rather than ad valorem stamp duty as a gift.
The decision also reaffirms the doctrine of stare decisis. A lower court is bound by the ratio decidendi of a materially similar decision of the Court of Appeal and should not disregard that binding authority in favour of a decision involving materially different facts and issues.
Disclaimer: This article is for general information only and does not constitute legal advice or legal opinion. It should not be relied upon as a substitute for specific legal advice. No person should act (or refrain from acting) based on this article without obtaining advice on the specific facts and circumstances. Halim Hong & Quek does not accept responsibility or liability for any loss or damage arising from reliance on this article. Halim Hong & Quek reserves the right to update, amend or withdraw this article at any time. All rights reserved.
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About the authors
Chew Jin Heng
Principal Associate
Dispute Resolution
Halim Hong & Quek
jhchew@hhq.com.my
