FADZILAN BIN MOHD DAUD v Tudong Emas Sdn. Bhd. (WA-28PW-397-09/2023)

And In the Matter of Sections 461, 472 dan 475 Companies Act 2016; And In the matter of Order 88(2) Rule 2 of the Rules of Court 2012; And In the matter of Order 28 and Order 92 Rule 4 of the Rules of Court 2012

FADZILAN BIN MOHD DAUD (NRIC No.: 620811-11-5141)

NOR AZIZAN BINTI AZMAN (NRIC No.: 610516-08-6262)

AZRIN BIN MOHAMAD ZAWAWI (NRIC No.: 761104-01-7453)

LATUN NORALYANI BINTI MEOR AMINUDIN (NRIC No.: 790502-08-5630)

SHAHARIN BIN JUSOH (NRIC No.: 710702-11-5299)

OMAR BIN ABDULLAH (NRIC No.: 701008-10-5221)

HAZLENA BINTI M RAZALI (NRIC No.: 681020-05-5348)

NOOR ROSNI BINTI SAIDIN (NRIC No.: 660326-08-5010)

SALEHUDDIN BIN SAIDIN (NRIC No.: 630508-08-5010)

KRISNANSAMY A/L TORAISAMY (NRIC No.: 660305-05-5613)

BABY LATHA A/P PARASURAMAN (NRIC No.: 690705-71-5032)

NOR LAILATUL SAIDAH BINTI MD RAZMI (NRIC No.: 650903-08-5012)

NORMAH BINTI YUNUS (NRIC No.: 590930-02-5494)

NORMAH BINTI YUNUS (NRIC No.: 590930-02-5494) (mengambil tindakan sebagai wakil diri yang sah kepada Nor Azmi bin Abdullah)

KRISANA MOORTHY A/L PERIASAMY (NRIC No.:620731-01-5597) …APPLICANTS AND TUDONG EMAS (M) SDN BHD (In liquidation) [Company No.: 387240-U] …RESPONDENT

These Grounds concern a Notice of Appeal (Encl 67) dated 12.2.2025 to the Court of Appeal against my decision on 16.1.2026.

By my decision on 16.1.2026, I allowed Encl 1 on the terms of the Draft marked A. I made no order as to costs.

The Contents of these Grounds are set out in the table below. Contents Para No THE CLAIM 4-6 Background Facts 7-13 The Consent Orders 14-19 The Winding Up 20-22 Enclosure 1/45 23-27 The Applicants’ Claim for the Properties 28-30 THE ‘COUNTERCLAIM’ & UNJUST ENRICHMENT 31-39 No Counter Claim 40-45 CONCLUSION 46-54

The Applicants filed the present Originating Summons (“OS”) in Encl 1 effectively seeking, inter alia, a declaratory order that the Respondent (“the Company”) execute the Memorandum of Transfer for the purpose of transferring the land purchased by the Applicants (“the Land”) from the Company, pursuant to a judgment in Civil Suit No.: BA-24NCVC-556-10/2017 (‘Suit 556’) dated 29.03.2018 in the Shah Alam High Court (“Suit 556 Judgment”), prior to the winding up of the Company. The Shah Alam Court in Suit 556 also ordered the Respondent to pay damages for late delivery of vacant possession to the Applicants (except for Applicants No. 12 and 15) of RM2,688,755.34 (“LAD”).

The Applicants’ case is that as the purchase price for the Land was paid in full, the Company holds the Land (“the Trust Property”) on Trust for the Applicants, the beneficiaries under the Trust.

Accordingly, it is submitted that the Land ought to be excluded from the assets of the Company currently under the control of the Liquidator.

By several sale and purchase agreements (“SPA”) dated between 10.12.2001 and 31.12.2004, the Applicants, purchased various Properties on the Land from the Company, see an example of the SPAs at Exhibit A-1 at pp. 35-236 of Encl 46.

The Company failed to transfer the titles to the Properties to the Applicants.

The Applicants commenced Suit 556 for an order to compel the Company to transfer the titles to the Properties and for LAD for delay in transferring the same.

As stated above, the Applicants (except for Applicant No. 15, whose Property was not subject to a SPA as it was gifted to him) obtained the Suit 556 Judgment whereby the Court declared that the Applicants are the beneficial owners of the Properties on the Land, see Exhibit A–4, pp. 272 – 281 of Encl 46. The Court also ordered the Company to pay LAD of RM2,688,755.34 to the Applicants (except for Applicants No. 12 and 15. Applicant 15 was not entitled to LAD and was excluded, as he was gifted the property and did not have the benefit of a

The Company appealed to the Court of Appeal vide Appeal No.: B-02(IM)(NCVC)-615-04/2019 (‘Appeal 615’).

Almost concurrently, the Company filed Originating Summons No.: BA-24NCVC-845-07/2018 (‘Suit 845’) for a declaration that the new title deed is valid and enforceable. The Applicants intervened in Suit 845.

With Appeal 615 and Suit 845 proceeding in parallel, the parties agreed to resolve the disputes by entering into consent orders, whereby the Company agreed to repurchase the Land from the Applicants.

Accordingly, 2 Consent Orders were entered, see Encl 46: a. in the Court of Appeal in Appeal 615 in Exhibit A – 9 (pp. 327 – 337) and b. in the High Court in Suit 845 in Exhibit A – 10 (pp. 341 – 347).

Under the Consent Orders, the Company agreed to repurchase the Land from the Applicants at an agreed price, which included quit rent, assessment charges and legal fees. The parties further agreed that the ‘repurchase price’ would be paid in 3 instalments within 12 months.

The Applicants involved are as follows: APPEAL 615 SUIT 845 No. Applicants Name No. Applicants Name 6 & 7 Omar bin Abdullah & Hazlena binti M Razali 1 & 2 Fadzilan bin Mohd Daud & Nor Azizan binti Azman 10 8 & 9 Noor Rosni binti Saidin & Salehuddin bin Saidin 3 & 4 Azrin bin Mohamad Zawawi & Latun Noralyani binti Meor Aminudin 10 & 11 Krisnansamy a/l Toraisamy & Baby Latha A/P Parasuraman 5 Shahrin bin Jusoh 12 Nor Lailatul Saidah binti Md Razmi 13 & 14 Normah binti Yunus & Normah binti Yunus (Mengambil tindakan sebagai wakil diri yang sah kepada Nor Azmi bin Abdullah)

The Company made the first 10% payment under the Consent Orders but failed to make the subsequent 2 payments. This default persisted for a prolonged period.

The Applicants commenced this Action (“Suit 397”) against the Company.

Due to the intervening Winding Up, the Applicants thereafter obtained leave from the High Court on 30.9.2024 in WA-28PW- 326-04/24 (“Suit 326”) to proceed with this Suit 387 for the purpose of enforcing the Suit 556 Judgment as well as the Consent Orders, see Exhibit FD – 1, pp. 15 – 17 of Encl 56.

Prior to this, on 25.08.2020, the Company was wound up and the Liquidator was appointed. The Applicants filed their Proofs of Debt (“POD”), see Exhibit A – 22, pp. 455 – 470 of Encl 46.

Thereafter, the Liquidator proposed that he would sell the Land on behalf of the Applicants, with the proceeds of sale being applied towards the outstanding balance of the repurchase price due to the Applicants. The Applicants withdrew their PODs so as to facilitate the proposed sale by the Liquidator, see Exhibit A – 25, pp. 490 – 542 of Encl 46.

However, no sale and purchase agreement was executed, no deposit was paid, and there was no evidence of any genuine purchaser. The proposed sale by the Liquidator simply did not materialise.

By Encl 1 in this Suit 397, (with an English translation at Encl 45) the Applicants seek, inter alia, to enforce the Suit 556 Judgment to secure the transfer of the Land and any further relief available (referred to as Encl 1/45).

By Encl 1/45, the Applicants seek a declaration that the Company holds the Properties as trustee for the Applicants, as previously declared in the Suit 556 Judgment.

Specifically, the Applicants sought an order for the Land to be transferred to them, consistent with the Consent Orders which expressly reserve their right to recover the Land should the Consent Orders fail. This right was given under the Suit 556 Judgment.

Accordingly, the claim is that the Properties ought to be excluded from the general assets of the Company in liquidation and the Liquidator should execute the relevant Memoranda of Transfer to complete the transfer of the Properties into the name of the Applicants.

The Company, in its Affidavit (in Encl 6), has not objected to the transfer of the Land to the Applicants, save that at para 8, the Company (and the Liquidator) take the position that the 1st Instalment paid should be refunded, otherwise the Applicants would unjustly enriched.

In Tan Ong Ban v Teoh Kim Heng [2016] 3 MLJ 23 (FC) it was said: “[37] Under this principle of beneficial ownership, the vendor becomes a bare trustee for the purchaser in respect of the transacted property, while the purchaser assumes the position of beneficial owner having right in rem over the property. The purchaser is commonly accepted as having a beneficial interest in the Land on the execution of the contract and upon which specific performance may be granted by the court. This beneficial interest is also sufficient to entitle the purchaser to enter a caveat under the NLC.”

The Judgment in Suit 556 unequivocally upheld the Applicants’ status as beneficial owners of the Land. Accordingly, in accordance with the Federal Court in Tan Ong Ban (supra), the Properties ought to be excluded from the Company’s assets to be distributed in the liquidation and consequently, must be transferred to their beneficial owners, the Applicants.

As such, I was prepared to make the necessary orders to that effect. THE ‘COUNTERCLAIM’ & UNJUST ENRICHMENT

In opposing this Suit 397, the Company contends that obtaining the Properties without refunding the 1st Instalment would result in the Applicants unjustly enriching themselves at the expense of the Company within Dream Property Sdn Bhd v Atlas Housing Sdn Bhd (2015) 2 MLJ 441 (FC).

And further, as a matter of law, the 1st Instalment cannot be forfeited by the Applicants.

First, the Consent Orders do not contain any term providing for forfeiture of monies already paid by the Company. In the absence of such a term, part payments must be returned, see Au Yong Kum Min v Tractors Malaysia Bhd (1997) 5 MLJ, 168 at 182. “…It is settled law that instalments already paid may be recovered by a defaulting purchaser when the vendor elects to discharge the contract. The circumstances in which this remedy is available are neatly summarised by Denning LJ in Stockloser v Johnson [1954] 1 QB 476 at pp 489-490: ‘It seems to me that the cases show the law to be this: (1) When there is no forfeiture clause. If money is handed over in part payment of the purchase price, and then the buyer makes default as to the balance, then, so long as the seller keeps the contract open and available for performance, the buyer cannot recover the money; but once the seller rescinds the contract or treats it as at an end owing to the buyer’s default, then the buyer is entitled to recover his money by action at law, subject to cross claim by seller for damages.’ ”

In this respect, the Consent Orders provide that the Settlement Sum shall be paid in 3 instalments. There is no provision for forfeiture or that the 1st instalment was a ‘deposit’ or guarantee of the performance of the Consent Orders.

It is settled, that the 1st instalment without being so characterised, must be refunded if the underlying contract is terminated and that the subject matter of the contract returned, see Cubic Electronics Sdn Bhd (In Liquidation) v Mars Telecommunications Sdn Bhd (2019) 2 CLJ, 723 at para 32. “[32] In considering the scope of s. 75 vis-à-vis forfeiture of deposits it should first be understood that there is a distinction between part-payments of the contract price and deposits. The general principle is that if there is a breach of contract any money paid in advance of performance and as part-payment of the contract price is generally recoverable by the payer. (See: Dies v. British and International Mining and Finance Co [1939] 1 KB 715 and illustration (r) of s. of the Act). [33] But deposit paid which is not merely part-payment but also as a guarantee of performance is generally not recoverable.”

In Invescor Sdn Bhd v Sobena Maju Sdn Bhd [2008] 2 MLJ 359, the Court of Appeal considered the distinction between a forfeitable ‘deposit’ and a refundable part payment. At para 109, the Court held: “[109] A succinct definition of ‘deposit’ was also stated by Lord MacNaghten in Soper v Arnold [1889] 14 App Cas 429 where he said: A deposit is defined as serving two purposes, that is, if the purchase is carried out, it goes against the purchase money. But the primary purpose for the deposit is to act as a guarantee that the purchaser means business. … [137] Following the principle as found in Morello decision, money paid as a deposit cannot be paid on some terms implied or expressed. And monies to be paid as the event of the contract being performed shall be so paid. The monies to be paid in the instant appeal is not merely a part payment, it is also an earnest to bind the bargain so entered into. [140] Much was said by the appellant about there being no right of forfeiture in the agreement. However, I find that an express provision for forfeiture is not an essential component. This is a contract of sale, where a deposit being an earnest for performance of a contract, confers a consequential right of forfeiture (subject to its constructions and terms and conditions). [141] Again, at the risk of being repetitive, the critical factor is the character of the payment which is largely dependent on the parties’ intention, ascertained by construing the agreement …”.

I agree that the true issue is whether the Applicants are entitled to enforce the Consent Orders without reimbursing the 1st part payment instalments paid by the Company.

The Applicants cited several cases contending that they are entitled to forfeit the 1st Payment. The cases relied on concern forfeiture of deposits and are of little help.

I therefore hold that the 1st Instalments are not in the nature of deposits and are refundable if the underlying agreements are terminated.

The Company’s claim for refund of the 1st Instalment, it is said, ought to be raised by way of a counterclaim. Conversely, the Applicants also claim the right to enforce and demand the quantified losses of RM2,688,755.34 arising from the LAD granted by the Court, along with any other incidental losses that will be specified in the new lawsuit.

There are therefore legitimate claims and cross claims between the parties that could be resolved in this OS. I would prefer not to prolong these disputes by accepting and dealing with procedural and technical objections which would otherwise obstruct such resolution.

This raised a nice point of procedure.

I am persuaded by Counsel that such orders should be made. In any event, I am reminded that the Court has by its inherent jurisdiction the power to make any orders to prevent injustice and abuse of process, which may be exercised in any given case, see Kosma Palm Oil Mill Sdn Bhd v Koperasi Serbausaha Makmur Berhad (2004) 1 MLJ 271 at 277-279. The power to order restitution can be made by this Honourable Court under its inherent jurisdiction, see Malacca Malay Guru-Guru Co-Operative Thrift & Loan Society Ltd v Tan Mei Hua & Ors (1971) 1 MLJ 107 at 109, Sharma held: “The jurisdiction to make restitution is inherent in every court and is exercised whenever the justice of the case demands it. (See Jai Berhm v Kedar Nath Marwari 49 IA 351; AIR 1922 PC 269, Prayag Narain v Kamekhea 36 IA 97.) In Lala Bhagwan Das v Lala Kishen Das [1953] SCR 559 the Supreme Court of India put the matter thus: “On the reversal of a judgment, the law raises an obligation on the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the court to enforce that obligation unless it is shown that restitution would be purely contrary to the real justice of the case.” The underlying principle is that when the main judgment or order is varied or reversed, all orders consequential or depending upon it are affected and wrongs done under them have to be righted by granting restitution. In order to do this the court may make any order including an order for the refund of costs or the payment of interest, damages, compensation or mesne profits as may properly be consequential on such variation or reversal of the order.”

In Chia Chia Yan Tek & Anor v Ng Swee Kiat (1997) 3 MLJ, 717 at 723, Gopal Sri Ram JCA (as he then was) said, following the decision of Sharma J in Guru-Gura (supra): “We now turn to consider the orders made by the learned judge. When we first countenanced them, we thought they had been made without jurisdiction because what the learned judge had done, or attempted to do, was to restore the status quo ante, before the offending ex parte order had been obtained by the appellants. We formed the initial opinion that such orders could only be made in the face of a counterclaim which was absent in the present case. However, in response to questions from us, Mr Muker has drawn our attention to the following passage in the judgment of Sharma J in Malacca Malay Guru-Guru Co-operative Thrift & Loan Society Ltd v Tan Mei Hua & Ors [1971] 1 MLJ 107 at p 109: … Having read what Sharma J had to say upon that occasion, we are satisfied that the learned judge was entirely correct in making the orders that he did and had ample jurisdiction to grant them. Raja Aziz, with usual candour, supports the view expressed in the passage quoted above.”

Similarly, and notwithstanding the absence of a Counterclaim, as a matter of justice I will made the orders in respect of the refund and set-off of the 1st Instalment.

In essence, the Consent Orders take an effect as an agreement, whereby the Applicants agreed to re-sell their Properties to the Company.

The Applicants have effectively ended their agreement to sell their Properties to the Company and in the absence of a forfeiture clause, it is only just that they are required to refund the monies received towards part payment of the Properties, namely the 1st instalment made by the Company. I agree that the grant the relief sought in Encl 1/45 without ordering the Applicants to refund the 1st Instalment, would unjustly enrich the Applicants.

As such I find that a just result would be that the Properties be transferred on condition that the Applicants refund the 1st Payments to the Company, which are to be set off against the LAD awarded by the Shah Alam High Court in the Suit 566 Judgment on 29.03.2018.

These proposed orders, in my judgment are within the leave granted on 30.9.2024 in Suit 326 and the inherent jurisdiction of the Court to make consequential orders. Setegap Bhd (in creditors’ voluntary winding up) v Ranhill Engineers and Constructors Sdn Bhd [2011] 6 MLJ 684 was different in that there was a specific order in the Leave granted that the way in which the judgment sum was to be dealt with by directions from the winding up court. There is no limiting order in the leave granted in this case this case.

However, the claim for damages for breach for the Consent Orders should not be dealt with in these proceedings.

However, the scope of the leave granted in Suit 326 is limited to proceeding with the execution of the Consent Orders and Judgment obtained by the Applicants in Suit 556; Appeal Suit 614 and Suit 845. Although by no means an easy question to answer, such leave should not be stretched to a claim for damages for a breach of the Consent Orders by the Company.

Any claim for damages arising from the breach of the Consent Orders should be dealt with separately, and

I agree. Specific leave should be obtained before the damages claim could be pursued by the Applicants for losses suffered due to the Company’s alleged breach of the Consent Orders. The Company and the Liquidator should be given a chance to meet this claim for damages, in limine to prevent an unnecessary expenditure of costs, if that be the case. That is, of course, the purpose of a s. 471(1) application, see Tan Aik Ling v CT World Construction Sdn Bhd and another suit [2024] MLJU 2479 at para 44.

In the circumstances, I granted Encl 1, in short, allowing the Properties to be transferred to the Applicants provided that there be refunds of the 1st Instalment, which shall be set off against the LAD awarded in the Suit 556 Judgment. My orders are as per the Draft marked A (as amended). Dated the 27th day of March 2026 ..........................tt............................ YA TUAN SAHERAN SUHENDRAN JUDICIAL COMMISSIONER OF THE HIGH COURT (COMMERCIAL 11) (INSOLVENCY 2) OF KUALA LUMPUR IN THE TERRITORY, MALAYSIA Case References: • Au Yong Kum Min v Tractors Malaysia Bhd (1997) 5 MLJ, 168 • Chia Chia Yan Tek & Anor v Ng Swee Kiat (1997) 3 MLJ, 717 • Cubic Electronics Sdn Bhd (In Liquidation) v Mars Telecommunications Sdn Bhd (2019) 2 CLJ, 723 • Dream Property Sdn Bhd v Atlas Housing Sdn Bhd (2015) 2 MLJ 441 (FC) • Invescor Sdn Bhd v Sobena Maju Sdn Bhd [2008] 2 MLJ 359 Counsel for the Applicants: Solicitors: Ahmad Fakhri & Nurul Nadzirah Messrs. Fakhri & Co. (Shah Alam) Counsel for the Respondent: Solicitors: Prakash Lachimanan Messrs. Prakash Lachimanan (Petaling Jaya) • Kosma Palm Oil Mill Sdn Bhd v Koperasi Serbausaha Makmur Berhad (2004) 1 MLJ 271 • Malacca Malay Guru-Guru Co-Operative Thrift & Loan Society Ltd v Tan Mei Hua & Ors (1971) 1 MLJ, 107 • Setegap Bhd (in creditors’ voluntary winding up) v Ranhill Engineers and Constructors Sdn Bhd [2011] 6 MLJ 684 • Tan Aik Ling v CT World Construction Sdn Bhd and another suit [2024] MLJU 2479 • Tan Ong Ban v Teoh Kim Heng [2016] 3 MLJ 23 (FC) Decision Date: 16th January 2026