Dato' Ler Cheng Chye v Sharifah Hanum Binti Kassim (WA-24NCC-6-01/2026)

The Plaintiffs filed this amended originating summons dated 1.7.2025 under Enclosure 34 OS ) to seek the following reliefs : 1) A declaration that the Defendants and / or the End Financiers failed / refused to pay the First Tranche of the Scheme Support, thereby being deemed as Non - Participating Scheme Creditors as provided in the Explanatory Statement; 2) into with Kabra Development Sdn Bhd (In Liquidation), and being deemed as Non - Participating Scheme Creditors as provided in the Explanatory Statement as well as the Court Order dated 21.11.2019, are terminated / cancelled; 3) That upon such termination / cancellation Purchase Agreements entered into with Kabra Development Sdn Bhd (In Liquidation), and being deemed as Non - Participating Scheme Creditors as provided in the Explanatory Statement, the Liquidators be given leave to Master Plan PN 7389, Lot No 32732, Mukim Ampang, District of Ulu Langat, Federal Territory .

By an order of court dated 5.12.2025, this matter was transferred from the Civil Division of the Kuala Lumpur High Court to the Commercial Division of the Kuala Lumpur High Court.

The condominium units involved in this proceeding are described below said properties . Unit No. Purchaser End - Financier C - 22 - 05 C Lim Lee Wan (2nd Defendant) Ambank Bhd (1st Intervener) C - 05 - 02 A Khozainiyah bt Noor (3rd Defendant) CIMB Bank Bhd (5th Defendant / Intervener) C - 01 - 04 B Sharifah Hanum bt Kassim (1st Defendant) Bank Muamalat Malaysia Bhd (2nd Intervener) C - 04 - 04 B Austin Felix Pereira (4th Defendant) [unrepresented]

The 1st to 4th Defendants were the purchasers of the said properties. They purchased the same either via a public auction (under the conditions of sale accompanying the proclamation of sale) or entered into a sale and purchase agreement with the company to purchase the said properties (collectively sale and purchase agreements .

The end - financiers of the 1st, 2nd and 3rd Defendants end - financiers , as described above, intervened in this proceeding to oppose the OS. The end - financiers had granted loan facilities to the 1st, 2nd and 3rd Defendants respectively in relation to their purchase of the said properties. As security for the financing, the 1st, 2nd and 3rd Defendants assigned their rights and interests in the said properties to their respective end - financiers by way of deeds of assignment deeds of assignment .

On 13.4.2026, I allowed the OS. Here are my reasons. Background facts

Kabra Development Sdn Bhd (in l company up by an order of court dated 3.3.2000 in Kuala Lumpur High Court Companies (Winding - Up) No. : D7 - 28 - 1070 - 1999. The Plaintiffs are the joint liquidators of the company. They were appointed by the court on 23.3.2007.

The company was the developer of a project known as Taman Sri Angsana Hilir situated at Ampang, Selangor. The project comprised of 600 units of low cost flats, 237 units of double storey terrace houses, 125 units of shop apartments and 700 units of condominiums situated in Blocks A, B, C and D.

Since their appointment as the liquidators, the Plaintiffs have sought to recover records and information in relation to the affairs of the company. Apart from the statement of affairs dated 3.3.2000, they said that no records were surrendered to them by the former directors and officers of the company.

After taking over as the liquidators of the company, the Plaintiffs visited the project site. They found that :

Blocks A and B were completed and occupied. Certificate of fitness for occupation was issued on 13.2.2001. No strata titles have been issued by the authorities.

Block C was completed but vacant. Certificate of fitness for occupation was issued by the authorities on 13.2.2001. Vacant possession of the units in Block C was delivered by the company to the purchasers.

Block C became the subject - matter of litigation by 94 purchasers in Kuala Lumpur High Court Suit No. : S1 (S5) - 22 - 1301 - 2001. The said suit was dismissed by the Court of Appeal on 14.8.2012. By that time, the purchasers had abandoned Block C, which became dilapidated.

Block D was partially completed, when it was abandoned in the year 1998.

In respect of Block C, the liquidators of the company proposed a settlement with the purchasers in order to refurbish the abandoned and dilapidated Block C. To ascertain the p they were notified to submit their proof of debt to the liquidators in order for the liquidators to come out with a proposed settlement. The said notice was published in various newspapers and in the Federal Gazette.

On 10.7.2018. the High Court granted leave to convene a scheme creditors meeting for Block C. Subsequently, the scheme creditors meeting was held on 28.9.2018. The scheme of arrangement was approved by the requisite statutory majority of creditors.

On 21.11.2019, the scheme Scheme was sanctioned by the High Court under section 176 of the Companies Act 1965. The Defendants and their respective end - financiers are bound by the scheme of arrangement

Section 176 (3) of the Companies Act 1965 reads : Section 176. Power to compromise with creditors and members.

If a majority in number representing three - fourths in value of the creditors or class of creditors or members or class of members present and voting either in person or by proxy at the meeting or the adjourned meeting agrees to any compromise or arrangement the compromise or arrangement shall, if approved by order of the Court, be binding on all the creditors or class of creditors or on the members or class of members, as the case may be, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.

It is my finding that the Defendants and their respective end - financiers, as the scheme creditors, are bound by the Scheme.

The relevant portion of the order of the High Court sanctioning the Scheme reads : that the Scheme of Arrangement with all its terms and conditions stipulated therein between the Respondent and the Scheme Creditors for the refurbishment of the 175 units in Block C of Sri Angsana Hilir Condominium which has received the statutory approval of the Scheme Creditors without modification or addition at the Court Convened Meeting of Scheme Creditors held on 28 September 2018 is hereby sanctioned by this Honourable Court so as to be binding upon the Respondent and the

below. End Purchasers and / or End Purchasers Financiers who have submitted and proved their debts and the proved debts have been duly admitted by the Liquidators according to the Act. Collectively,

End Purchasers with valid executed and stamped SPAs who have proved their claims according to Section 291 (1) of the Act whose rights, titles and interests therein in the Condominium Units have not been assigned to the End Financiers; and

(ii) End - Financiers to whom the End Purchasers have absolutely assigned their rights to the Condominium Units pursuant to Deeds of Assignment and who have proved their claims according to Section 291 (1) of the Act.

T scheme creditors under the Scheme includes the end - financiers, to whom the Defendants have assigned their rights and interest in the said properties. Accordingly, the Defendants and their respective end - financiers are bound by the Scheme. I refer to the following authorities.

In The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd [2008] 3 SLR (R) 121 at 148 - 151, the Singapore Court of Appeal set out the principles pertaining to schemes of arrangement as follows : 43 Firstly, it is clear that a scheme of arrangement will not bind a company, its members and its creditors until the court approves it The sanction of the court is not a mere formality The discretion of the court as to whether or not it should sanction a scheme is important since, once the scheme has been sanctioned, it binds all parties, even the dissentients ... 44 Secondly, once the court gives its approval to a scheme, the scheme is binding on all the parties to the scheme sanction is so wide reaching that if the court sanctions a scheme which is beyond the capacity of the company or in conflict with other statutory provisions, the scheme is nonetheless still binding on the parties, notwithstanding that it is ultra vires the objects of the company 46 Thirdly, in line with the first two principles stated above, a creditor or the rationale for this principle is that any late objections after a scheme of arrangement to the other parties to the scheme, and (more importantly) there is a need to ensure that there is certainty as to the validity of a court approved scheme :

The Singapore Court of Appeal stated (at page 155) : 52 Kempe is also cited by the learned authors of Buckley ([43] supra) for the following proposition (at vol 2, para 425.64) : A scheme does not operate as an agreement between the parties affected but it has binding force by virtue of statute once an application to the court has been made and the consent of the relevant parties and the sanction of the court [have] been obtained

In SAAG Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) v Shaik Abu Bakar bin Abdul Sukol and another and another appeal [2012] 2 SLR 189 at 210, the Singapore Court of Appeal held : 61 A scheme of arrangement, however, is not an ordinary contract, but a statutory one. Parliament has, by s 210 (3) of the Companies Act, made an exception to the normal requirement of consideration, and has in effect mandated that as long as the requisite statutory majority of creditors agree to be bound by a scheme of arrangement (and receive the specified consideration in exchange), all creditors will be bound by the scheme, even those who did not so agree The Defendants and their respective end - financiers had failed to make payment of the Scheme Support Payment

To reiterate, scheme creditors encompasses the end - financiers to whom the Defendants have assigned their rights and interests in the said properties. This places the end - financiers inside the affected class and binds them to the Scheme Support Payment, and the consequences of non - payment of the same.

Under the Scheme, it was provided that the scheme creditors shall pay the Scheme Support Payment calculated at RM 130.00 per square S/N 0Hh2iHoacESsIdHhNvi9lw foot based on the area of the said properties, as stated in the sale and purchase agreements.

The Scheme Support Payment will be billed in three tranches. Namely:- (i) RM 52.00 per square foot being the 1st tranche; (ii) RM 52.00 per square foot being the 2nd tranche; and (iii) RM 26.00 per square foot being the 3rd tranche.

The scheme creditors are given 30 days from the date of notice of payment to pay the 1st tranche and the 2nd tranche billings, with an automatic extension of a further 30 days from the due date to pay. In respect of the 3rd tranche, the scheme creditors are given 14 days from the date of notice of payment to pay the 3rd tranche billing, with an automatic extension of a further 14 days from the due date to pay.

The notice of payment dated 13.5.2022 to make payment towards the 1st tranche of the Scheme Support Payment, which expires on 12.6.2022, had been served to the Defendants by A.R. registered post and to the end - financiers by personal service. Subsequently, the first reminder notice of payment dated 22.6.2022 to the Defendants and the end - financiers were also served.

Final notice of payment dated 11.11.2022 was served to the Defendants and the end - financiers due to their failure to make payment towards the 1st tranche of the Scheme Support Payment. The solicitors of the Plaintiffs had also, by way of letters dated 26.6.2024, informed the solicitors of the end - financiers regarding the amount of the 1st, 2nd and 3rd tranches of the Scheme support Payment as at 3.7.2024 to be paid.

Clause 2.3.3 of Schedule 1 of the Explanatory Statement of the Scheme reads : Default of Payment In the event that the Scheme Creditors or Participating Scheme Creditors default in payment of the Scheme Support Payments, then the SPAs of such Scheme Creditors entered into with the Company shall be disclaimed by the Liquidators with the leave of Court. Such affected parties shall become Non - participating Scheme Creditors under this Proposed Scheme of Arrangement and any claims by such Scheme Creditors shall then become provable as is provided in Section 296 (8) of the Act.

Since the Defendants and their respective end - financiers failed to make payment towards the 1st tranche of the Scheme Support Payment, they are regarded as Non - Participating Scheme Creditors (as defined in the Explanatory Statement of the Scheme). Accordingly, their sale and purchase agreements shall be disclaimed, as provided under clause 2.3.3 of Schedule 1 of the Explanatory Statement of the Scheme. Thereafter, the liquidators are permitted to sell the said properties.

This is based on the powers of liquidators under section 236 (2) of the Companies Act 1965, which reads :

The liquidator may -

bring or defend any action or other legal proceeding in the name and on behalf of the company;

sell the immovable and movable property and things in action of the company by public auction, public tender or private contract with power to transfer the whole thereof to any person or company or to sell the same in parcels;

do all such other things as are necessary for winding up the affairs of the company and distributing its assets.

It is the duty of the liquidators to maximise returns for the benefit of the company and in particular the participating scheme creditors, who have complied with their obligations under the Scheme. Res judicata does not apply

The Defendants and the end - financiers contend that the OS is caught by res judicata. The Plaintiffs had previously applied to the winding - up court by way of a summon in chambers under Post - Winding Up No. : WA - 28 PW - 45 - 01 / 2023 summons in chambers . Through the summons in chambers, the plaintiffs sought to terminate the sale and purchase agreements of the 36 units of Block C, and further seeking relief that they be given liberty to sell the said 36 units.

On 16.11.2023, the winding up court dismissed the summons in chambers. No appeal was filed by the Plaintiffs against the dismissal of the summons in chambers.

When dismissing the summons in chambers, the winding - up court said : Here the Applicant is seeking an order. It may not be specific performance but an order of Court to terminate and to deprive parties, certain parties of their rights. That one to me is not matter for the Winding Up Court to decide on matters of parties. It orders to determine rights of parties basically I find that whatever order they are seeking ought to be at a Civil Court and not a Winding Up Court Therefore I find that the directions sought by the Applicant are outside the purview this application

It is my finding that res judicata does not apply in the present case. Here is my explanation.

I consider that the summons in chambers was dismissed not because the Plaintiffs had no rights under the Scheme to deal with the said properties, but due to jurisdictional limitations. The winding up court took the position that the orders prayed for by the Plaintiffs under the summons in chambers ought to be sought at the civil court, and not the winding - up court . The winding up court stated that the reliefs sought for under the summons in chambers are not matters for the winding up court to decide .

It is plain that the merits of the summons in chambers were not determined by the winding - up court. In these circumstances, res judicata does not bite. The OS is not barred by res judicata, as there was no final judgment based on merits made concerning the powers of the liquidators to deal with the said properties under the Scheme.

In Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 CLJ 783 at 791, the Supreme Court stated that the significance of res judicata lies in its effect of creating an estoppel. The cause of action estoppel arises when rights or liabilities involving a particular right to take a particular action in court for a particular remedy are determined in a final judgment, and such right of action merges into the said final judgment.

In Tong Lee Hwa & Anor v Lee Yoke San [1979] 1 MLJ 24, the Federal Court stated that for there to constitute res judicata, the earlier judgment must necessarily and with .

It is apparent that the winding - up court, in dismissing the summons in chambers, in issue at that time.

The summons in chambers was premised on the general powers of the liquidator. It was an application for directions made under section 237

of the Companies Act 1965. The summons in chambers did not seek specific declarations under the Scheme.

In contrast, the OS arises explicitly under the Scheme, and thus is distinct in nature. Even if the facts overlap, the cause of action and reliefs differ.

This is demonstrated below. Subject - matter Reliefs sought for in the summons in chambers Reliefs sought for in the OS Nature of application Procedural application under the companies (winding - up) jurisdiction. Declaratory application - seeking directions on the enforcement of a scheme of arrangement. Termination of the sale and purchase agreements The Plaintiffs sought liberty to terminate the sale and purchase agreements in respect of the 36 units of Block C. The Plaintiffs seek a declaration that the sale and purchase agreements of the Non - Participating Scheme Creditors are terminated / cancelled. Right to sell the units The Plaintiffs sought liberty to sell the 36 units of Block C. The Plaintiffs seek a declaration that the liquidators may deal with or sell the units in accordance with the Scheme due to non - compliance by the Non - Participating Scheme Creditors. Basis of the right invoked under liquidation law and general powers. Binding statutory effect of court - sanctioned scheme of arrangement under section 176 of the Companies Act 1965. S/N 0Hh2iHoacESsIdHhNvi9lw Relief re the Defendants status No explicit classification of the Defendants status under the scheme of arrangement. Express declaration sought that the Defendants are Non - Participating Scheme Creditors for failing to pay the Scheme Support Payment. Status of prior decision Dismissed by the winding - up court on 16.11.2023. New application premised on the legal effect of the Scheme of Arrangement following refusal of participation.

In Shanmugam v Artisan Fokus Sdn Bhd [2015] 2 CLJ 1062 at [29], the Court of Appeal affirmed that the wider doctrine of res judicata only bars subsequent proceedings, where the issue could and should the OS, arising from the Defendants and their respective end - non - compliance with the Scheme Support Payment, only became necessary after the summons in chambers was dismissed. As such, res judicata does not apply.

The decision of the winding - up court on 16.11.2023 did not determine the enforceability of the S implement its terms vis - à - vis the Non - Participating Scheme Creditors. The reliefs now sought in the OS are grounded o obligations under the Scheme. It arises from the Defendants and their respective end - failure to comply with the Scheme.

In the circumstances, the doctrine of res judicata does not apply. The OS is a new action, arising from a different legal basis. To wit, the - supervised duty to implement the Scheme.

The dismissal of the summons in chamber by the winding - up court ts under the Scheme. The S/N 0Hh2iHoacESsIdHhNvi9lw Plaintiffs are not estopped by the decision of the winding - up court on 16.11.2023. That decision did not adjudicate the enforceability of the Scheme against the Defendants and their respective end - financiers. Nor did it determi the said properties, in light of the Defendants and their respective end - refusal to comply with the Scheme.

I conclude that :

The present reliefs sought for in the OS could not have been raised in the earlier summons in chambers. The summons in chambers was brought under general liquidation powers. The OS arises from the Defendants and their respective end - obligations under the Scheme, and their refusal to comply with the same. These are distinct legal and factual issues that did not arise for determination in the summons in chambers, and are not caught by res judicata.

The OS summons in chambers. The OS seeks declarations relating to the enforceability and implementation of the Scheme, including the s and their respective end - financiers as Non - Participating Scheme Creditors. These issues are unique to the Sch , and have not previously been adjudicated. The Plaintiffs are not avoiding the prior decision of the winding - up court. They are invoking a different legal framework.

The Plaintiffs are not attempting to relitigate without appealing. The dismissal of the summons in chambers by the winding - up court on 16.11.2023 did not adjudicate whether the Plaintiffs may proceed under the Scheme vis - à - vis the Defendants and their respective - end financiers. Nor did it decide on the consequences of non - participation or non - payment under the Scheme. An appeal against the dismissal of the summons in chambers by the winding - up court on 16.11.2023 was therefore unnecessary. The OS arises from post - judgment conduct and is properly brought.

The Plaintiffs do not deny the existence or terms of the sale and purchase agreements and the deeds of assignment. Nevertheless, the Defendants and their respective end - continued refusal to comply with the Scheme raises questions as to the enforceability of those contractual rights in light of the s binding terms. That is the subject matter of the OS. No unjust enrichment

I reject the allegation of unjust enrichment raised by the Defendants and the end - financiers. The Scheme did not deprive the Defendants and their respective end - financiers of their rights and interests in the said properties. But preserved their opportunity to obtain the said properties, subject to payment of the Scheme Support Payment. The Scheme Support Payment was a condition imposed under the Scheme, which the Defendants and their respective end - financiers were invited to comply with, but refused.

The Plaintiffs are not enriching themselves. They continue to hold legal title to the said properties, only because the Defendants and their respective end - financiers failed to fulfil their obligations under the Scheme. The end - financiers, by virtue of the deeds of assignment, hold at most a beneficial interest, which remains subject to compliance with the Scheme. The OS does not seek to deny the Defendants and their respective end - of their rights and interests in the said properties. But merely to obtain the c Plaintiffs may proceed to deal with the said properties under the Scheme framework. It is the end - own non - compliance that has given rise to this issue.

The end - financiers claim that as the assignee of the said properties, they must be compensated for the loss of their security by the repayment of the loan sum or the redemption of the outstanding sum owed to them by the Defendants, if the Plaintiffs are given leave to sell the said properties. I disagree.

It is not unreasonable or unjust for the Plaintiffs to deal with the said properties under the Scheme, without refunding the loan sum advanced by the end - financiers on behalf of the Defendants. The Scheme does not provide for repayment or restitution of the loan monies. Instead, it preserved the Defendants and their respective end - opportunity to obtain delivery of the said properties, subject to compliance with the Scheme Support Payment, which the Defendants and their respective end - financiers refused to fulfil.

I reject the contention by the Defendants and the end financiers that the Plaintiffs are required to redeem their financing or obtain their consent before exercising the ight to disclaim the sale and purchase agreements clause 2.3.3 of