1. ) GAVIN JAYAPAL (Sebuah Milikan Tunggal Yang Dimiliki Oleh Gavin Jay Anand a/l Jayapal) v 1. ) SERI MUTIARA DEVELOPMENT SDN BHD (BA-28PW-101-05/2024)

High Court of Malaysia15 Jul 2025

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BA-28PW-101-05/2024 Kand. 20/08/2025 14:55:01 IN THE HIGH COURT OF MALAYAAT SHAH ALAM IN THE STATE OF SELANGOR DARUL EHSAN POST WINDING-UP APPLICATION NO.: BA-28PW-101-05/2024 COMPANIES (WINDING-UP) PETITION NO.: BA-28NCC-272-04/2022 In the matter of Seri Mutiara Development Sdn Bhd (In Liquidation) (Company No: 20091022786 [865885-D}) And In the matter of Proposed Scheme of Arrangement between Seri Mutiara Development Sdn Bhd (In Liquidation) and its scheme purchasers And In the matter of Section 366 of the Companies Act 2016 And In the matter of 0.88 of the Rules of Court 2012 And In the matter of professional services rendered to Seri Mutiara Development Sdn Bhd prior to its liquidation, the issuance of professional bills and the execution of a Settlement Agreement dated 30.11.2020 1 1. GAVIN JAYAPAL And In the matter of a Sale and Purchase Agreement dan Deed of Mutual Covenants dated 25.03.2021 executed for Unit 46-07 with accessory parcels at B1-65 and B1-66 in the Kuchai East Condominium And In the matter of a debenture dated 20.04.2022 executed between Seri Mutiara Development Sdn Bhd and Malaysian Trustees Berhad encompassing Unit 46-07 And In the matter of the inherent jurisdiction of this Honourable Court (A SOLE PROPRIETORSHIP OWNED BY GAVIN JAY ANAND A/L JAYAPAL) (BC NO.: BC/G/495) 2. NAOMI ANNE NIRMALA A/P DOMNIC SELVAM ... APPLICANTS AND 1. SERI MUTIARA DEVELOPMENT SDN BHD (IN LIQUIDATION) (COMPANY NO.: 20091022786 [865885-D]) [NOMINAL RESPONDENT] 2. MALAYSIAN TRUSTEES BHD (COMPANY NO.: 197501000080 [21666-V]) ... RESPONDENTS GROUNDS OF JUDGMENT (Enclosure 1) Introduction 1. This is the Applicants' application for declaratory reliefs relating to their alleged entitlement to Unit 46-07 and its accessory parcels in the Kuchai East development. 2. The 1st Applicant is a legal firm and the 2nd Applicant is his spouse. 3. The reliefs sought include declarations that the 2nd Applicant is the legal and/or beneficial owner of the said unit, that the debenture in favour of the 2nd Respondent is null and void as regards said unit, and that the Liquidators ought to treat the 2nd Applicant as a purchaser under the proposed scheme of arrangement under section 366 of the Companies Act 2016 (CA 2016). 4. The application is opposed by both the Receivers appointed over the charged assets and the 2nd Respondent, Malaysian Trustees Berhad ("MTB"). Background Facts 5. The material facts are not in dispute. The 1st Applicant, a legal practitioner, had acted for Seri Mutiara Development Sdn Bhd ("SMD") in several matters and claims that legal fees were due and owing. 6. A Settlement Agreement dated 30.11.2020 was entered into between SMD and the 1st Applicant, whereby SMD agreed to transfer Unit 46-07 to the 1st Applicant's nominee in settlement of legal fees. 7. Pursuant to this, a Sale and Purchase Agreement ("SPA") and Deed of Mutual Covenants were executed on 25.03.2021, naming the 2nd Applicant, wife of the 1st Applicant, as the purchaser. However, no monetary consideration was paid by the 2nd Applicant, and the unit was never transferred or registered in her name. No caveat was entered. 8. Subsequently, on 20.04.2022, SMD executed a debenture in favour of MTB to secure obligations under a RM50 million MTN programme. This debenture created a fixed charge over 125 unsold units in Kuchai East, including Unit 46-07. The charge was registered pursuant to section 352 CA 2016. 9. SMD was wound up on 12.04.2023. The Liquidators, in implementing the scheme of arrangement, listed Unit 46-07 as a disputed unit due to the Applicants’ claim. Applicants’ Arguments 10. The Applicants argue that the Settlement Agreement and SPA form a valid and binding contract between SMD and the Applicants. They submit that consideration was provided in the form of legal services and that the 2nd Applicant is entitled to enforce the SPA. 11. It is further submitted that the 2nd Applicant is the legal and/or beneficial owner of Unit 46-07 by virtue of the SPA. The Applicants maintain that the Debenture executed in favour of MTB is subordinate to their prior contractual rights and should not override the SPA. 12. The Applicants argue that equity supports their position, and that failing to recognise the 2nd Applicant's rights would result in unjust enrichment of MTB and/or the Receivers. 13. They rely on authorities supporting the principle that equity looks to substance over form and will enforce contracts where consideration is provided, even if the formalities of registration are not observed. Arguments of the 2nd Respondent (MTB) 14. MTB contends that the 2nd Applicant is a mere nominee and not a purchaser in the true sense. She did not provide any consideration for the unit. The SPA, they submit, is part of an internal arrangement between the 1st Applicant and his spouse. 15. They further submit that the SPA, even if genuine, is not registrable under the National Land Code and does not give rise to any equitable interest enforceable against third parties. 16. Most significantly, the debenture was executed and registered under section 352 CA 2016, and thereby takes priority over any unregistered or equitable claims. MTB relies on the statutory priority conferred upon registered charges. 17. MTB also argues that the Applicants had ample opportunity to protect their interests, including by entering a private caveat, but failed to do so. The Applicants’ rights, if any, are subordinate to those of a secured creditor acting in good faith. Receivers’ Arguments 18. The Receivers oppose the application on the following grounds: (i) Invalidity of the Contra Arrangement: The SPA and related documents are not supported by substantiated professional bills. The invoices are inconsistent, include third-party work, and appear contrived to fit the Settlement Agreement. (ii) Non-compliance with Sections 64 and 66 of the CA 2016: The Contra Arrangement Documents were not executed in compliance with the statutory requirements. They were neither properly signed by authorised officers nor affixed with a common seal as required. (iii) Failure of Consideration: The purchase price for the property was never paid. As such, the SPA is void for total failure of consideration. This defeats any equitable claim. (iv) Priority of MTB’s Rights: The debenture in favour of MTB was executed and registered before any interest of the Applicants was perfected. MTB’s rights as chargee prevail. (v) No Beneficial Ownership: |n equity, beneficial ownership does not arise unless the purchaser pays the price. Here, the 2nd Applicant paid nothing and cannot assert any equitable interest. (vi) Legal Authority: The Receivers rely on binding authorities such as Modular Tropical Ventures v George Varughese

2019

9 CLJ 812, Lee Pek Luan v Kintown Development

2023

MLJU 1582, and Cheu Kuok King v Jurudaya Construction [2007] 4 MLJ 720, among others. Decision and Analysis 19. The threshold question is whether the 2nd Applicant has any proprietary or beneficial interest in Unit 46-07. The answer is no. The SPA was executed in her name, but she was not a party to the Settlement Agreement and provided no consideration. 20. 21. 22. 23. 24. 25. The legal services relied upon as consideration were allegedly rendered by the 1st Applicant. The claim is not supported by clear, consistent or contemporaneous documentation. The bills are questionable. The SPA and Settlement Agreement do not satisfy the requirements of Sections 64 and 66 of the Companies Act 2016. Execution was irregular, and authority not proven. On this ground alone, the documents are of no legal effect. The SPA also fails for total lack of consideration. Under Mistaria Sdn Bhd v Evergreen Furniture Industries [1999] 4 MLJ 99, and Green Crescent v Ching Miew Yoke [2016] 2 MLJ 579, a sale agreement unsupported by payment is void. The 2nd Applicant cannot rely on equity to create an interest where none exists. In Modular Tropical Ventures, the Court of Appeal held that a purchaser who paid nothing acquires no beneficial interest. This principle is fatal to the Applicants’ case. As to priority, MTB’s registered debenture clearly prevails. The registration under Section 352 CA 2016 establishes statutory priority. The Applicants’ unregistered and imperfect claim ranks subordinate. Equity aids the vigilant, not the indolent. No caveat was lodged. No steps were taken to perfect title. The 2nd Applicant remained a mere nominee with no demonstrable standing. 26. Accordingly, the Liquidators and Receivers acted correctly in treating Unit 46-07 as part of the charged assets and excluding the Applicants from the scheme’s list of purchasers. Conclusion 27. Forall the foregoing reasons, the Applicants’ claim is devoid of legal or equitable merit. The debenture in favour of MTB is valid and takes priority. 28. The application is dismissed | vith costs to the Respondents. Dated: 1 RAJA Ri COUNSEL Solicitor for the Appellant : Gavin Jayapal Peguamcara 25-5, Blok H, Jalan PUU 1/37 Dataran Prima 47301 Petaling Jaya Selangor Solicitor for the Respondent : Messrs Shearn Delamore Peguamcara 7" Floor, Wisma Hamzah Kwong Hing No 1, Lebuh Ampang City Centre 50100 Kuala Lumpur Messrs Wong Lu Peen & Tunku Alina Peguamcara 21-6, Block B, The Boulevard Mid Vailey City Lingkaran Syed Putra 59200 Kuala Lumpur 10

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Case metadata

Court: High Court of Malaysia
Decision date: 15 Jul 2025
Case number: BA-28PW-101-05/2024
Coram: YA Dato' Raja Rozela binti Raja Toran
Practice area: Declaratory reliefs-debenture is void-liquidator ought to treat the applicant as a purchase under the scheme of arrangement under section 366 of the Companies Act 2016-settlement agreement and SPA form a valid and binding contract-consideration was provided in the form of legal service-2nd applicant is entitled to enforce the SPA-2nd applicant is the legal/beneficial owner of the unit by virtue of the SPA-debenture executed in favour of MTB is subordinate to their prior contractual right and should not override the SPA-equity supports their position-failing to recognise the 2nd applicant’s rights would result in unjust enrichment of the MTB and/or the Receivers-equity looks to substance over form and will enforce contracts where consideration is provided even if the formalities of registration are not observed-MTB argues that the 2nd applicant is a mere nominee and not a purchaser-no consideration-even if its is genuine, it is not registrable under the National Land Code-does not give rise to any equitable interest against third parties-debenture was executed and registered under section 352 CA 2016-thereby takes priority over any unregistered or equitable claims-applicant did not file any caveat over the land-Applicant’s rights are subordinate to those of a secured creditor acting in good faith-SPA is not supported by substantiated professional bills-the Contra Agreement is not properly executed, not signed and sealed-SPA is void for failure of consideration-Applicant has no beneficial interest over the property as there in no consideration-the claim is not supported by clear, contemporaneous and consistent documentation-the bills are questionable-the SPA and Settlement Agreement do not satisfy Section 64 and 66 of the CA 2016-documents are of no legal effect-2nd applicant cannot rely on equity to create and interest-the applicants’ unregistered and imperfect claim ranks subordinate-MTB’s registered debenture clearly prevails-no caveat was lodged-no steps to perfect the title-the 2nd applicant remained a mere nominee-the Liquidator and Receivers acted correctly in treating Unit 46-07 as part of the charged asset and excluding the Applicants from the scheme’s list of purchasers. Applicants ‘claim is devoid of legal or equitable merit-the debenture in favour of MTB is valid and takes priority
Version: Alasan Penghakiman 1
Published: 20 Aug 2025
Source ID: 170f5d67-d426-4cf4-8d91-558ad3d256aa

Catchwords

Declaratory reliefs-debenture is void-liquidator ought to treat the applicant as a purchase under the scheme of arrangement under section 366 of the Companies Act 2016-settlement agreement and SPA form a valid and binding contract-consideration was provided in the form of legal service-2nd applicant is entitled to enforce the SPA-2nd applicant is the legal/beneficial owner of the unit by virtue of the SPA-debenture executed in favour of MTB is subordinate to their prior contractual right and should not override the SPA-equity supports their position-failing to recognise the 2nd applicant’s rights would result in unjust enrichment of the MTB and/or the Receivers-equity looks to substance over form and will enforce contracts where consideration is provided even if the formalities of registration are not observed-MTB argues that the 2nd applicant is a mere nominee and not a purchaser-no consideration-even if its is genuine, it is not registrable under the National Land Code-does not give rise to any equitable interest against third parties-debenture was executed and registered under section 352 CA 2016-thereby takes priority over any unregistered or equitable claims-applicant did not file any caveat over the land-Applicant’s rights are subordinate to those of a secured creditor acting in good faith-SPA is not supported by substantiated professional bills-the Contra Agreement is not properly executed, not signed and sealed-SPA is void for failure of consideration-Applicant has no beneficial interest over the property as there in no consideration-the claim is not supported by clear, contemporaneous and consistent documentation-the bills are questionable-the SPA and Settlement Agreement do not satisfy Section 64 and 66 of the CA 2016-documents are of no legal effect-2nd applicant cannot rely on equity to create and interest-the applicants’ unregistered and imperfect claim ranks subordinate-MTB’s registered debenture clearly prevails-no caveat was lodged-no steps to perfect the title-the 2nd applicant remained a mere nominee-the Liquidator and Receivers acted correctly in treating Unit 46-07 as part of the charged asset and excluding the Applicants from the scheme’s list of purchasers. Applicants ‘claim is devoid of legal or equitable merit-the debenture in favour of MTB is valid and takes priority

Parties

1. ) GAVIN JAYAPAL (Sebuah Milikan Tunggal Yang Dimiliki Oleh Gavin Jay Anand a/l Jayapal) - applicant - ejudgment_parties
2. ) NAOMI ANNE NIRMALA A/P DOMNIC SELVAM - applicant - ejudgment_parties
1. ) SERI MUTIARA DEVELOPMENT SDN BHD - respondent - ejudgment_parties
2. ) MALAYSIAN TRUSTEES BHD - respondent - ejudgment_parties

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1. ) GAVIN JAYAPAL (Sebuah Milikan Tunggal Yang Dimiliki Oleh Gavin Jay Anand a/l Jayapal) - applicant - ejudgment_parties

2. ) NAOMI ANNE NIRMALA A/P DOMNIC SELVAM - applicant - ejudgment_parties

1. ) SERI MUTIARA DEVELOPMENT SDN BHD - respondent - ejudgment_parties

2. ) MALAYSIAN TRUSTEES BHD - respondent - ejudgment_parties

1. ) GAVIN JAYAPAL (Sebuah Milikan Tunggal Yang Dimiliki Oleh Gavin Jay Anand a/l Jayapal) v 1. ) SERI MUTIARA DEVELOPMENT SDN BHD (BA-28PW-101-05/2024)

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1. ) GAVIN JAYAPAL (Sebuah Milikan Tunggal Yang Dimiliki Oleh Gavin Jay Anand a/l Jayapal) v 1. ) SERI MUTIARA DEVELOPMENT SDN BHD (BA-28PW-101-05/2024)

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