Chai Kim Fah v Universal Trustee (Malaysia) Berhad (b-02(a)-1425-08/2016)

MIRAGE POINT (M) SDN BHD ...PERAYU

GULA PERAK BERHAD (DALAM LIKUIDASI)...RESPONDEN Dalam Perkara Mahkamah Tinggi Malaya di Shah Alam Dalam Negeri Selangor Darul Ehsan (Bahagian Civil) Saman Pemula No: 24-1129-09/2015 Di dalam perkara Gadaian melalui Perserahan No. 18153/2003 didaftarkan pada 2.4.2003 Dan Di dalam perkara Aturan 15 Kaedah 15 dan Aturan 28 Kaedah-kaedah Mahkamah 2012 Dan Di dalam perkara Seksyen 340 Kanun Tanah Negara 1965

MIRAGE POINT (M) SDN BHD ...PLAINTIF-PLAINTIF

GULA PERAK BERHAD (DALAM LIKUIDASI) ...DEFENDAN-DEFENDAN CORAM: DAVID WONG DAK WAH, HBSS HAMID SULTAN BIN ABU BACKER, HMR UMI KALTHUM BINTI ABDUL MAJID, HMR JUDGMENT OF THE COURT Introduction:

This is an appeal by the Appellants against the decision of the High Court whereby the learned Judge dismissed their application to set aside a certain charge executed by the $ 2^{n d} $ Respondent to the $ 1^{s t} $ Respondent in respect of a loan facility. Background facts:

The $ 2^{\mathrm{nd}} $ Respondent is the registered owner of six pieces of lands (Lands) and had charged the same to the $ 1^{\mathrm{st}} $ Respondent (Charge) as one of the securities under the Redeemable Convertible Secured Notes 2002/2007("RSCN").

The $ 2^{\mathrm{nd}} $ Respondent had defaulted on the RSCN and the $ 1^{\mathrm{st}} $ Respondent had on 17.3.2014 obtained an Order for Sale in respect of the Lands. The Lands were held under separate master titles and they are as follows: a) Geran 29953, Lot 24, at Mukim Batang Berjuntai, Daerah Kuala Selangor, Negeri Selangor Darul Ehsan ("Lot 24"); b) Geran 32993, Lot 458, at Mukim Batang Berjuntai, Daerah Kuala Selangor, Negeri Selangor Darul Ehsan ("Lot 458"); c) Geran 285439, Lot 3402, Seksyen 4, Pekan Bestari Jaya, Daerah Kuala Selangor, Negeri Selangor Darul Ehsan (previously Geran 130478, Lot 3402, Mukim Batang Berjuntai which was previously HS(D) 1166, PT No 2997, Mukim Batang Berjuntai) ("Lot 3402"); d) Geran 49937 (previously CT 20936), Lot 2837 at Mukim Cheras, Daerah Ulu Langat, Negeri Selangor Darul Ehsan ("Lot 2837"); e) Geran 49938 (previously CT 20937) Lot 2838 at Mukim Cheras, Daerah Ulu Langat, Negeri Selangor Darul Ehsan ("Lot 2838"); and f) Geran 49939 (previously CT 20838), Lot 2839 at Mukim Cheras, Daerah Ulu Langat, Negeri Selangor Darul Ehsan ("Lot 2839").

The lots are collectively referred to as "the said Properties". None of the said properties has been foreclosed because multiple challenges have been filed by parties connected to or related to the former directors of the $ 2^{\mathrm{nd}} $ Respondent.

The Appellants had filed an Originating Summons on 17.9.2015 seeking a declaratory order to set aside the Charge. The application was dismissed by the High Court on 28.6.2016 and hence this appeal at the Court of Appeal.

The grounds of the Appellants to set aside the Charge was that the Appellants had allegedly purchased some factory units from the $ 2^{n d} $ Respondent and Kemajuan Amoy Berhad. The factory units are situated on BB Techno-Industrial Park, which is a part of Lot 458 only ("Factory Units").

In respect of Lot 458, the $ 1^{\mathrm{st}} $ Respondent had applied to the foreclosure Court to exclude all the factory lots built on Lot 458 (that includes the Factory Units claimed to be owned by the Appellants) from the public auction.

On 8 $ ^{th} $ February 2017 the Shah Alam High Court had granted inter alia, that: alia, that: “Bahawa Geran 32993, Lot 458, Mukim Batang Berjuntai, Daerah Kuala Selangor, Negeri Selangor Darul Ehsan [kecuali kilang-kilang berteres selesai dibina yang terdiri di atas Hakmilik Induk Lot 458, Lot Terukur No. 3417 yang sudah disubbahagi iaitu bernombor dari Lot No. 3621 sehingga Lot No. 3855 sebagai bahagian tanah yang sudah dimajukan diatasnya (“Bahagian yang Dikecualikan”)] (“Lot 458” ataupun “Hartanah” tersebut) yang antara lainnya digadaikan oleh Defendan kepada Plaintif melalui Gadaian Perserahan No. 18153/2003 yang didaftarkan pada 2.4.2003 (“Gadaian tersebut”) dijual melalui lelongan awam di bawah peruntukan-peruntukan Seksyen 256 dan Seksyen 257(1) dan (2) Kanun Tanah Negara 1965 (“KTN 1965”) untuk menjelaskan jumlah yang terhutang dan tertunggak kepada Plaintif sebanyak RM327,472,217.14...” Motion Enclosure 8a and 12a (striking out):

The main appeal together with the two motions in Enclosure 8a and Enclosure 12a came before us on $ 1 6^{th} $ August 2017. We did not hear the main appeal and dealt with the two motions first.

Enclosure 8a was essentially the Appellants' application to regularize the documents relating to the appeal for the Appellants to file a Supplementary Record of Appeal. We gave order in terms for the application and Appellants had undertaken to regularize the appeal records.

Enclosure 12a was the Respondent's application to strike out the appeal. The grounds for the application, as set out in the supporting affidavit to Enclosure 12a, was based on the grounds that the Lot 458 in question was not included in the public auction. This is pursuant to a High Court Order dated 8th February 2017 that clearly excluded that part of Lot 458 described as "Bahagian yang Dikecualikan" from the public auction. Our decision:

From the outset of the appeal, the Respondent contended that the appeal could no longer be sustained simply because the foundation or the subject matter of the appeal by the Appellant no longer existed. Hence it was submitted that the appeal no longer disclosed any reasonable cause of action and was an abuse of court process.

There was little doubt that the Appellants' main objective was to ensure that their properties are not affected by the Order for Sale obtained by the $ 1^{\mathrm{st}} $ Respondent. To appease the Appellants, the $ 1^{\mathrm{st}} $ Respondent, as alluded to earlier, had by way of a Court order dated 8th February 2017 excluded the Factory Units claimed by the Appellants from the Order for Sale. That Order in effect meant that any sale of the charged properties by the Court would not include the Factory Units claimed by the Appellants. With that, we were at a loss as to how the Appellants' interests are affected by the whole scheme of things.

The $ 1^{\mathrm{st}} $ Respondent as Chargee was fully entitled to exclude the Appellants' Factory Units and once excluded no successful purchaser will be able to obtain any interest in the same units. We agreed with the 1 $ ^{st} $ Respondent that the Court was fully entitled to make the ancillary order as was done on 8 $ ^{th} $ February 2017 so as to save judicial time and costs.

In view of the above, there was nothing for us to adjudicate as the Appellants' main complaint in this appeal had been taken over by the aforesaid ancillary order dated 8th February 2017. Premised on that, we were left with no option but to grant the relief prayed for in Enclosure 12a and struck out the appeal with no order as to costs and the deposit be refunded. Dated: 96 Februari 2019. (DAVID WONG DAK WAH) Chief Judge of Sabah and Sarawak Appellants bellants : S. Ravenesan, Wong Rhen Yen, Siti Nur Amirah and Aqilah binti Adzman Messrs. S. Ravenesan 1 $ ^{st} $ Respondent S. Ramesh, Melisa Tai and Adeline Lee Messrs. SKRINE $ 2^{\mathrm{n d}} $ Respondent : R. Vinayaga Messrs. Adnan Sundra & Low Notice: This copy of the Court's Reasons for Judgment is subject to formal revision.