1. ) Good Quantum Sdn. Bhd. v Alliance Investment Bank Berhad (WA-28PW-277-10/2021)

GOOD QUANTUM SDN BHD (Company No.: 730556-H)

DATO’ HAMZAH BIN GHAZALI (NRIC No.: 490422-05-5269)

DATUK CHANG KOK CHUANG (NRIC No.: 580101-01-5847)

WONG HON KEONG (NRIC No.: 640322-10-7253) …DEFENDANTS (BY MAIN ACTION)

DATUK CHANG KOK CHUANG (NRIC No.: 580101-01-5847)

RIGHT DEVELOPMENT ACTIVITIES SDN BHD (Company No.: 441009-A) …PLAINTIFFS AND ALLIANCE BANK MALAYSIA BERHAD (Company No.: 198201008390 [881093-W]) …DEFENDANT (BY COUNTERCLAIM)

This judgment arises from an order of the Court of Appeal directing damages to be assessed following its declaration that a novation agreement, a repayment agreement and a guarantee were void, invalid and unenforceable, having entered into in breach of a collateral contract. The Court of Appeal found that the assessing party’s obligations under the repayment agreement were subject to the successful implementation of a restructuring scheme which ultimately failed to obtain the approval of the Securities Commission. Notably, the Court of Appeal made no finding that the rejection of the scheme was caused by the assessed party.

Consequently, this Court ruled that any claims for loss or damages arising from the failure of the restructuring scheme must be excluded as there was no sufficient causal link between that failure and the alleged loss and damages. In line with this ruling, all evidence and submissions directed at such losses have been disregarded.

The judgment considers claims arising from the breach of collateral contract including claims for reliance loss, reputational damage and emotional distress and the legal principles governing their recoverability in a commercial context. A threshold issue addressed in this judgment is the apparent inconsistency between the Court of Appeal’s declaration of invalidity and the consequential orders that followed. The question is whether the High Court should disregard those consequential orders as incompatible or adopt a harmonious interpretation that preserves the coherence of the appellate judgment. This issue is addressed as a necessary prelude to the proper assessment of damages.

On 24.3.2004, Kuala Lumpur City Securities Sdn Bhd (“KLCS”) granted to Dunia Dimensi Sdn Bhd (“Dunia Dimensi”) a share margin facility of RM 6,000,000.00 (“the Facility”) to finance the purchase of 13,849,500 Putra Capital Berhad Shares (“the PCB Shares”) by Dunia Dimensi. As security for the Facility, Dunia Dimensi charged the PCB Shares to KLCS.

In about 2005, Dunia Dimensi failed to repay the Facility and on 7.6.2005, Alliance Merchant Bank Berhad (“Alliance Merchant”) was appointed as the Corporate Adviser to Putra Capital Bhd (“PCB”) in respect of a scheme to restructure the company (“the PCB Restructuring Scheme”).

Right Development Activities Sdn Bhd (“RDA”) was identified as the White Knight for the PCB Restructuring Scheme with Good Quantum Sdn Bhd (“GQSB”) as the special purpose vehicle to take over the PCB Shares held by Dunia Dimensi. Datuk Chang Kok Chuang (“Dato’ Chang”) is a director of RDA. As part of the PCB Restructuring Scheme, RDA was to inject Construction Projects into PCB.

In line with the PCB Restructuring Scheme, a Novation Agreement dated 23.8.2006 was entered between KLCS and GQSB (“Novation Agreement”) wherein GQSB agreed to take over the liabilities of Dunia Dimensi under the Facility arising from Dunia Dimensi’s failure to repay the amount borrowed under the Facility.

At the same time, GQSB also entered into a Repayment Agreement dated 23.8.2006 (“Repayment Agreement”) with

Further, by way of a Guarantee and Indemnity dated 23.8.2006 (“Guarantee”) entered into with KLCS, Datuk Chang together with one Dato’ Hamzah bin Ghazali (“Dato’ Hamzah”) and one Wong Hon Keong (“Wong”) agreed to guarantee the obligation of GQSB under the Repayment Agreement.

By the aforesaid arrangement, upon GQSB’s assumption and discharge of Dunia Dimensi’s liabilities to KLCS under the Facility, the PCB Shares shall be transferred to GQSB.

By a Vesting Order dated 28.12.2006, the business of KLCS including all assets and liabilities was transferred and assumed by Alliance Merchant, later known as Alliance Investment Bank Berhad (“AIBB”). The business of AIBB was subsequently transferred to Alliance Bank Malaysia Berhad (“ABMB”) under the Vesting Order dated 22.3.2023.

Meanwhile, on 5.1.2009, AIBB initiated a civil suit against GQSB, Datuk Chang, Dato’ Hamzah and Wong for the non-payment of the Facility under the Repayment Agreement in the sum of RM4,174,976.15 as at 3.10.2008 including interest and costs (“the Original Suit”).

GQSB, Datuk Chang and RDA in turn brought a counterclaim against AIBB claiming, inter alia, the following reliefs:

A declaration that the Novation Agreement and the Repayment Agreement is ineffective, invalid and/or unenforceable;

A declaration that GQSB is discharged of all liabilities;

Damages for breach of the collateral contract;

In the alternative, a declaration that the sale of the PCB Shares by the Bank is void;

Damages for the unlawful sale of the PCB shares;

Damages for conversion;

Damages for the negligent sale of the PCB shares;

In the alternative, damages for deprivation of the right to redeem the PCB Shares;

Interest at the rate of 8% per annum.

Additionally, Datuk Chang and RDA also counterclaimed against AIBB the following:

General damages to be assessed;

Interest on the damages.

On 5.4.2012, the High Court ruled in favour of AIBB and entered judgment against GQSB and Datuk Chang in the sum of RM 4,174,976.15 with contractual interest thereon and dismissed the Counterclaims.

However, on 24.9.2014, the Court of Appeal dismissed AIBB’s claim and allowed the Counterclaims. In paragraphs 32 to 35 of the Grounds of Judgment, read with the pleadings filed, the Court of Appeal’s decision rests on the following critical findings:

The Repayment Agreement, Novation Agreement and Guarantees were dependent on the success of the PCB

There existed a collateral contract that GQSB would not be required to repay the Facility under the Repayment Agreement until the success of the PCB Restructuring Scheme and in the meantime, GQSB was only required to service interest. In other words, the obligation of GQSB to pay the PCB Shares was deferred until the success of the

Since the PCB Restructuring Scheme has been rejected by the Security Commission (“SC”) in the exercise of its independent function as the regulator, the Repayment Agreement, Novation Agreement and the Guarantee were ineffective, invalid and unenforceable. Consequently, GQSB and Dato’ Chang could not have been held liable under these transactional agreements; and

The Bank’s action in demanding for repayment under the Repayment Agreement and the Guarantee, was thus in breach of the Collateral Contract.

The Court of Appeal then ordered the Bank to pay damages as follows: In respect of GQSB:

Damages for breach of Collateral Contract;

Damages for wrongful sale of the PCB Shares; and

Damages for the negligent sale of PCB Shares. In respect of Datuk Chang & RDA:

General damages to be assessed. (“the Liability Judgment”)

It is pertinent to note in the Grounds of Judgment, the Court of Appeal referred to the fact that the PCB Restructuring Scheme was rejected by the SC. However, the Court of Appeal did not attribute the SC’s rejection of the PCB Restructuring Scheme or the failure of the PCB Restructuring Scheme to AIBB at all.

Subsequent to the Liability Judgment, AIBB was of the view that there were several shortcomings in the judgment. More specifically:

the Liability Judgment did not identify the head of damages to be assessed by Datuk Chang and RDA;

AIBB, Datuk Chang and RDA took contrasting interpretations on the meaning of “general damages to be assessed” as provided in the judgment. AIBB contended that the phrase refers to non-pecuniary damages not capable of precise calculation, whereas Datuk Chang and RDA considered that it includes all alleged financial losses suffered by them;

as against GQSB, AIBB contended that there are 2 inconsistent orders which clash with each other and cannot be given effect to at the same time. More specifically, with the order declaring the Novation Agreement, Repayment Agreement and the Guarantee as void and unenforceable which effectively rendering the parties’ respective positions to be reverted to the status quo prior to these agreements, the order for damages for wrongful sale of the PCB Shares and damages for negligent sale of the PCB Shares would be inconsistent as the ownership of the PCB Shares would continue to belong to Dunia Dimensi.

Accordingly, on 24.11.2016, AIBB filed Enclosure 90 for directions to address the above issues as well as for an economical and expeditious disposal of the hearing of assessment of damages. It was AIBB’s case that the scope of damages to be assessed turns on the interpretation of the Liability Judgment and the Grounds of Judgment.

On 08.09.2017, the learned Deputy Registrar dismissed Enclosure 90 and handed down the following consequential orders:

to give effect and read together both the Liability Judgment and the Grounds of Judgment;

in so far as GQSB is concerned, the assessment of damages proceedings would take place in accordance with the terms of the Liability Judgment in respect of the following: i. Collateral Contract; ii. Wrongful sale of the PCB Shares; and iii. Negligent sale of the PCB Shares.;

in so far as Datuk Chang and RDA are concerned, the assessment of damages proceedings would take place in accordance with the terms of the Liability Judgment read together with the Grounds of Judgment as pleaded and allowed in prayer 23.1 of the Counterclaim; and

the facts and issues pertaining to the sale of the PCB Shares are amongst the relevant issues in the assessment of damages proceedings and parties are entitled to adduce evidence and file submissions in support or in opposition to their respective cases.

On 30.10.2017, the learned Deputy Registrar clarified his order of 08.09.2017 and gave further directions, as follows:

that he would determine the issue of whether Datuk Chang and RDA suffered any losses;

if so, whether such losses are reasonable or too remote;

whether Datuk Chang and RDA had taken any reasonable mitigation action;

whether the SC rejection of the PCB Restructuring Scheme is related or attributable to the AIIB and if so, whether it is too remote; and

Datuk Chang and RDA be allowed to adduce evidence in assessing damages (documentary and mathematic) to prove their damages but merely as a guide and subject to the discretion of the Court to determine the reasonable quantum.

As can be appreciated, the learned Deputy Registrar had determined that he would himself decide whether AIBB was responsible for SC rejection of the PCB Restructuring Scheme even though the Court of Appeal in its Liability Judgment and Grounds of Appeal had made no such finding.

On 12.09.2017, AIBB appealed to the learned High Court Judge in Chambers against the entire decision of the learned Deputy Registrar of the High Court.

The learned High Court Judge however, dismissed the appeal on 24.09.2014 holding that AIBB was seeking to ‘mengecilkan sebarang skop kemungkiran’ (to reduce the scope of the breach).

Being dissatisfied, AIIB appealed to the Court of Appeal.

On 31.03.2021, the Court of Appeal dismissed AIBB’s appeal with costs of RM30,000.00. No written grounds were furnished by the Court of Appeal.

On 28.04.2021, AIBB filed the motion for leave to appeal (“the Leave Application”) against the Court of Appeal decision dated 31.03.2021 in dismissing AIBB’s appeal in respect of Enclosure

What transpired at the Federal Court has a significant bearing on the assessment of damage proceedings before this Court.

The Leave Application came up for hearing before Her Ladyship Nallini Pathmanathan FCJ sitting as a sole judge on 23.09.2021.

After AIBB’s counsel began his submission, Her Ladyship Nallini Pathmanathan FCJ made the following remarks:

Her Ladyship had some difficulty reconciling the Liability

Her Ladyship inquired whether parties could agree for the matter to be dealt with afresh by the High Court Judge; and

Her Ladyship further inquired whether AIBB would agree to withdraw the Leave Application and let the High Court Judge to decide on the issues afresh in the assessment proceeding and parties to appeal at the conclusion of the assessment.

Following a discussion before Her Ladyship Nallini Pathmanathan FCJ, the parties came to an understanding that to give effect to the overarching agreement that the High Court Judge would deal with the matter afresh, the decision and or directions of the learned Deputy Registrar in relation to Enclosure 90 would be disregarded. Otherwise, this would impede the High Court Judge from dealing with the matter afresh.

Her Ladyship Nallini Pathmanathan FCJ accordingly recorded a consent order that the Leave Application was withdrawn and that all matters in relation to the assessment would be dealt with afresh by the High Court Judge. The learned judge ordered cost of RM15,000.00 to be paid to GQSB, Datuk Chang and RDA.

The draft consent order was subsequently drawn up after a disagreement over the ambit of the orders of the Deputy Registrar in respect of Enclosure 90 was clarified before Her Ladyship Nallini Pathmanathan FCJ on 29.10.2021 (“the Consent Order”). It is of significance that the Consent Order expressly provides for the High Court Judge to hear the assessment of damages proceedings afresh.

Premised upon the Consent Order, the parties came before this Court on 12.10.2022. On that date, AIBB applied orally for the following 3 keys issues to be determined prior to the commencement of the assessment of damages: Key Issue 1: What are the heads of damages on liability that should be determined? Key Issue 2: Datuk Chang and RDA were award only general damages. What are general damages? Will these be non-pecuniary losses or losses which are not capable of precise calculation meaning it doesn’t include special damages. If ‘general damages’ means non-pecuniary losses, then the Court must not hear evidence on special damages, financial losses, etc Key Issue 3: There are inconsistencies between the main declaration of the Court of Appeal to declare the transaction documents invalid, mainly the Novation Agreement, the Repayment Agreement and the Guarantee and the Court of Appeal’s consequential order to ask the assessing Court to determine what are the losses suffered by the Defendants from the sale of the shares. This is because the ownership of the shares is derived from the Novation Agreement which the Court of Appeal has declared to be ineffective, invalid and unenforceable. The way to resolve this matter is by way of interpretation and the Court of Appeal’s decision in Sri Alam basically says that the primary order, which is the declaration prevails over the consequential order.

On 13.12.2022, this Court ruled on the 3 Key Issues put forward by AIBB (“the Rulings”) and determined the parameters for the assessment as follows:

The Court of Appeal made no finding regarding the party responsible for the SC’s rejection of the PCB Restructuring Scheme. As such, GQSB, Datuk Chang and RDA as the assessing parties (“the Assessing Party”) shall be precluded from adducing any evidence, oral or documentary, relating to losses and or damages due to and or arising from the rejection of the PCB Restructuring

The Court of Appeal expressly awarded liability for ‘general damages’ to Datuk Chang and RDA, nevertheless looking at Defence and Counterclaim of Datuk Chang and RDA and the Grounds of Judgment, ‘general damages’ in this instance would cover both pecuniary and non-pecuniary damages. Accordingly, evidence may be adduced to prove both category of losses, if any, in the assessment of damages;

As the Court of Appeal’s judgment vis-à-vis GQSB has not been set aside and has ordered assessment on (a) damages for breach of the Collateral Contract and (b) damages for the illegal sale of the PCB Shares and (c) damages for the negligent sale of the PCB Shares, whilst Assessing Party is entitled under the judgment to assess the damages under the 3 limbs of the judgment, the Assessed Party is not precluded from raising argument or objections regarding the Assessing Party’s locus standi or capacity to seek damages for (b) and (c) or issues relating to overlapping or double claims;

For the avoidance of any doubt, issues relating to remoteness, duty to mitigate, causation and general principles on proving damages are relevant issues for the assessment of damages; and

Parties to set out list of witnesses and the nature of the evidence proposed to be adduced by their respective witnesses for the Court to consider if the proposed evidence are relevant to the assessment bearing in mind the orders made in respect of the 3 Key Issues. If expert witnesses are proposed, the reasons for the same. (“Rulings dated 13.12.2022”)

The parties then filed their respective Proposed Heads of Damages and list of witnesses and appeared before this Court on 6.1.2023 for the purpose of obtaining further directions in respect of the assessment of damages.

Despite the Rulings dated 13.12.2022, the Assessing Parties have sought to include as their Proposed Heads of Damages, damages arising from the SC’s rejection of the PCB Restructuring Scheme.

Thus, on 6.1.2023, upon reading the Proposed Heads of Damages and hearing arguments from both parties, this Court made the further rulings to exclude the Assessing Parties’ Proposed Heads of Damages which relate to the SC’s rejection of the PCB Restructuring Scheme (“Rulings dated 6.1.2023”). In other words, there ought to be no evidence adduced pertaining to any losses or damages arising from the rejection of the PCB Restructuring Scheme at the assessment of damages proceedings. More specifically, this Court struck out the following Proposed Heads of Damages: 1) GQSB’s losses based on the breach of the Collateral Contract, the wrongful disposal of the PCB Shares and the negligent disposal of the PCB Shares as a result of the loss of GQSB’s ownership of the increased number of units of PCB Shares basing on: i) GQSB’s initial ownership 13,849,500 units of PCB Shares in the corporate restructuring exercise; ii) Plus after GQSB’s rights issue; and iii) Plus after GQSB’s conversion of warrants attached to the rights issue And how much GQSB’s ownership of the increased number of units in the PCB Shares would be worth (or promised by Patrick Soh Kim Ngiap) had AIBB performed the Collateral Contract (the representations, inducement, persuasion and assurance) namely, “PCB will be worth more than its market capitalisation and that PCB’s PN17 status will not be an issue, as AIBB was the corporate adviser. In regards to GQSB’s ownership of the substantial PCB Shares, namely, the increased number of units of PCB Shares as aforesaid, in combination with RDA’s ownership of the substantial PCB Shares after the conversion of the loan stocks (or their equivalent) into PCB Shares (the representations, inducement, persuasion and assurance) GQSB and RDA would be in control of PCB and thus, the premium value of the controlling stake in PCB, in addition to the above. (collectively referred as “the Consequential Losses Arising from Rejection of the PCB Restructuring Scheme”) Alternatively, GQSB’s reliance loss, including all payments, costs, charges and or expenses incurred. 2) RDA’s Proposed Head of Damage based on its loss and damages in the PCB Share price increase with the number of units of PCB Shares RDA would have obtained as per the corporate restructuring exercise planned by AIBB or promised by Patrick after the conversion of the loan stocks (or their equivalent) into PCB Shares, all of which are within AIBB’s knowledge, including: i) How much more than the PCB’s market capitalisation at the material times; and ii) Or at least it would surpass the PCB’s market capitalisation at the material times; and the increase in the share price/additional premium over the PCB Shares to be owned by RDA with a controlling stake over PCB as planned by AIBB or promised by Patrick. Alternatively, RDA claims for the loss of not being able to develop RDA’s projects and obtained the profit, which RDA would have otherwise have carried out, had RDA not injected the projects into the corporate exercise, by relying on the representations, inducements and assurance from AIBB. 3) Datuk Chang’s Proposed Head of Damage for the loss of the return on Datuk Chang would obtain as the managing director of RDA when RDA became the substantial or major stakeholder of PCB with the increase in the share value of PCB in the PCB Restructuring Exercise. (collectively referred as “the Disallowed Heads of Damages”)

The Assessing Parties appealed against both the Rulings dated 13.12.2022 and Rulings dated 6.1.2023 which were registered as Appeal No. 70 and Appeal No.208 respectively.

Both Appeal No. 70 and Appeal No. 208 were struck out by the Court of Appeal on 4.3.2024 but with the rights to the Assessing Parties to file an appeal on the same issues after the conclusion of the trial for the assessing of damages before this Court. Court’s Considerations based on Assessment of Damages

Before I deliberate on the quantum of damages based on the testimonies of the parties’ respective witnesses and the legal arguments, it must be stated that during the assessment of damages proceedings, I had expunged Q&A 62 to 75 from the witness statement of ASPW1 in Enclosure 128.

The expungement was premised on the ground that the impugned issue raised in the witness statement of ASPW1, namely, the alleged collusion and conspiracy among the AIBB, Batu Bara Resources Corporation Sdn Bhd and Yayasan Pok Dan Kassim on the disposal of the PCB Shares, which in my opinion is irrelevant and inadmissible for the purposes of the proceedings. The Court of Appeal had made no finding of fact that there was collusion between AIBB and the two entities in the sale of the shares at all and to my mind, the allegation of collusion simply has no relevance to the assessment of damages at all.

The Assessing Parties have also raised objection to the admissibility of the Q & A 9, 12, 18 and 21 of the Witness Statement of ASDW1 in Enclosure 92 and Q & A 2 and 3 of the Supplemental Witness Statement of ASDW1 in Enclosure 136 on the ground that the contents amount to the witness giving legal opinions.

With respect, I do not agree. Whilst it is correct that a witness cannot state his understanding of what the legal position is in relation to the obligations of parties under a contract if that statement amounts to expressing a legal conclusion about the rights of the parties since this is the exclusive function of the Courts, a witness is permitted to testify on his understanding of what he considered as the legal position which motivated or explained his conduct and actions. In other words, the testimony as to the witness’s opinion of the legal position is as a matter of fact and not as a statement of law.

Put it simply, the distinction lies in whether the statement purports to instruct the Court on legal principles which will be inadmissible unless the witness is testifying as an expert or merely articulates or asserts the party’s position in relation to the facts and law applicable to the case to shed light on the motivation and or reason for his actions.

In the present case, ASDW1 did not present herself as an expert offering legal opinion for the Court’s consideration. Rather her impugned testimony, merely reflects AIBB’s assertion of its legal position and case theory and to explain why AIBB’s conduct and approach to the proceedings for assessment of damages before this Court. Indeed, as submitted by counsel for AIBB, ASDW1’s impugned testimony is intended to:

enable the Assessing Parties and their counsel to know the case that they have to meet and the opportunity to cross examine; and

enable the Assessing Parties and their counsel to know in advance the case that would be put to them during cross examination.

This testimony would also avoid any contention by the Assessing Parties at the conclusion of the assessment trial that:

they do not know AIBB’s case that they have to meet and were therefore deprived of the right to cross-examine

AIBB should not be permitted to advance a particular legal position that ASDW1 did not assert in her evidence in chief.

This approach is consistent with the Court of Appeal’s observation in Aik Ming (M) Sdn Bhd v. Chang Ching Chuen [1995] 3 CLJ 639 6, where it referred to the rule in Brown v. Dunne on the need to put one’s case to the opponent’s witness. Failure to do so may amount to an abandonment of one’s pleaded case. The Court of Appeal cited with approval the pronouncement of Mukharji J in Carapiet v. Derderian where the learned Judge expressed the principle in the following words: “It is a rule of essential justice. It serves to prevent surprise at trial and miscarriage of justice, because it gives notice to the other side of the actual case that is going to be made when the turn of the party on whose behalf the cross-examination is being made comes to give and lead by producing witnesses.”

The need to assert one’s case at the evidential stage is also supported by the following passage in Patel v. Canada (Minister of Citizenship and Immigration) [2016] I.A.D.D. No. 1895 “If the appellant’s counsel sees fit to rest on his laurels and to not ask questions that go to the central issues, if he sees fit not to question witnesses, if he simply dumps documents before the panel without any attempt to contextualize them or tie them to the appellant’s theory of the appeal then the panel is not about to make up for his deficient litigation strategy by presuming answers or alternatively assuming his role as counsel.”

Accordingly, it is my judgment that the objections raised by the Assessing Parties on the Q & A 9, 12, 18 and 21 of the Witness Statement of ASDW1 in Enclosure 92 and Q & A 2 and 3 of the Supplemental Witness Statement of ASDW1 in Enclosure 136 are without merits and rejected by this Court.

This Court also notes that notwithstanding the Rulings dated 13.12.2022 and Rulings dated 6.1.2023, the Assessing Parties are seeking again to advance submissions on the Disallowed Heads of Damages pertaining to the losses arising from the failure of the PCB Restructuring Scheme.

As I have already ruled that because the Court of Appeal did not attribute the SC’s rejection of the PCB Restructuring Scheme or the failure of the PCB Restructuring Scheme to AIBB at all and for that reason had rejected any claims for the losses resulting from the failure or rejection of the PCB Restructuring Scheme, the submissions by the Assessing Parties seeking to pursue this head of damages shall not be considered by this Court.

With the aforesaid preliminary and procedural issues sorted out, I shall now turn to the quantum of damages, if any, due to be Assessing Parties under the permitted Heads of Damages.

In order to determine what would be the consequential loss arising from the breach of the Collateral Contract, it is necessary to first understand what was the Collateral Contract.

In this regard, it must be noted that it was never the Assessing Party’s case that AIBB had warranted that the PCB Restructuring Scheme would be approved by the SC and or that the same would be successfully completed. Indeed, this was not the Assessing Parties’ pleaded case at all. In fact, such claim by the Assessing Party was never made as an issue to be tried by the High Court and no evidence relating to the same was adduced at the trial.

The Grounds of Judgment made no mention at all of any such term as the Collateral Contract. The breach of the Collateral Contract as contended by the Assessing Party before the Court of Appeal as evidenced from paragraphs [16] and [17] of the Grounds of Judgment pertained specifically to their claim that Good Quantum’s liability was subject to the condition precedent that ‘… approval is obtained from Bursa Malaysia Berhad for the transfer of the PCB Shares to the 1st defendant (GQSB)’.

Put it simply, there existed a collateral contract that GQSB would not be required to repay the Facility under the Repayment Agreement until the approval from Bursa Malaysia Berhad for the PCB Restructuring Scheme was obtained and in the meantime, GQSB was only required to service the interest payable under the Facility. This means that GQSB’s obligations to pay for the PCB Shares was to be deferred until the approval of the PCB Restructuring Scheme had been obtained. To me, this was the Collateral Contract found by the Court of Appeal.

In this regard, GQSB has claimed for the sum of RM1,059,671.84 as damages as the same was made under the Repayment Agreement which the Court of Appeal has declared to be invalid. In other words, GQSB was never obliged to make the payment of RM 1,059,671.84 to AIBB at all as the approval for the PCB Restructuring Scheme was a condition precedent to the obligations. Accordingly, it must follow that the said sum must be repaid back by AIBB to GQSB as a consequence from the breach of the Collateral Contract.

Quite rightly, AIBB is not disputing GQSB’s claim for the payment of RM1,059,671.84 at all.

GQSB has claimed a sum of RM2,922,542.31 being the value of the PCB Shares forced sold by AIBB under the claim for wrongful sale of the PCB Shares and the sum of RM2,063,277.69 being the difference between the forced sold value of the PCB Shares and the alleged market value of the PCB Shares at RM0.36 per share under the claim for negligent sale of the PCB Shares.

GQSB’s claims for the aforesaid damages is premised upon GQSB having ownership of the PCB Shares. This prompted AIBB to raise fundamental objections to GQSB’s claims for damages arising from the alleged wrongful and negligent sale of the PCB Shares. It is AIBB’s contention that the Declaration that was sought and obtained by AIBB that rendered the Novation Agreement, Repayment Agreement and the Guarantee ineffective, invalid and unenforceable, had effectively put an end to GQSB’s ownership of the PCB Shares and any alleged associated fiduciary obligation on the part of AIBB to hold or deal with the PCB Shares in trust. Consequently, GQSB is precluded from asserting any entitlement to damages arising from the disposal of the PCB Shares, as the legal basis for such claim has been negated by the primary relief obtained.

Further, AIBB contended that there is an inherent incompatibility between the primary order, i.e., the Declaration that the Novation Agreement, the Repayment Agreement and the Guarantee were ineffective, invalid and unenforceable and the consequential orders which direct damages to be assessed for the alleged wrongful and negligent sale of the PCB Shares.

The aforesaid is because the quid pro quo or consideration for the transfer of the PCB Shares from Dunia Dimensi to GQSB was the discharge by GQSB of Dunia Dimensi’s liabilities to AIBB. This means that GQSB would only become the owner of the PCB Shares once it has satisfied its payment obligations under the Repayment Agreement.

With the Declaration that the Repayment Agreement was ineffective, invalid and unenforceable, GQSB was released of its obligations to discharge Dunia Dimensi’s liabilities AIBB. The result is that the RM1,059,671.84 paid by GQSB under the Repayment Agreement must be repaid back. This in turn means that there could not have been any transfer of the PCB Shares to GQSB at all. In short, the status quo of the parties has reverted to what existed prior to the execution of the Novation Agreement, the Repayment Agreement and the Guarantee.

Accordingly, the consequence of the Declaration was that GQSB would not become the owner of the PCB Shares since the repayment under the Repayment Agreement was conditional upon the approval of the PCB Restructuring Scheme and the success of the same. Until then, the ownership of the PCB Shares would continue to remain with Dunia Dimensi.

Thus, if there was any wrongful and or negligent sale of the PCB Shares, GQSB would have no locus standi to maintain the claim as GQSB was never the owner of the PCB Shares at all. It follows that GQSB has no rights, interests or title over the PCB Shares and it is trite that a person who has no rights or title to a property cannot claim for wrongful or negligent sale of that property.

It is in this sense that AIBB contended that the Declaration in paragraph 3(i) of Liability Judgment by the Court of Appeal is incompatible and cannot stand together with the consequential orders in paragraph 4(i) & (iii) of the Liability Judgment to award damages for wrongful and negligent sale.

In fact, GQSB’s prayers for wrongful sale of the PCB Shares were put forward as an alternative in the event that it is unsuccessful in obtaining the Declaration. The basis for the wrongful sale has pleaded by GQSB in paragraph 18 of their Defence and Counterclaim, is the alleged failure of the Bank to give 30-day notice prior to the sale. Further or in the alternative, the Plaintiff acted in breach of the Repayment Agreement in failing to give the 1st Defendant the requisite thirty (30) days notice to remedy the breach (which is denied) before selling the PCB Shares. Consequently, the notice dated 05.03.2008, the purported sale of 14,000 PCB Shares on 17.03.2008 and all subsequent sales are void.

The requirement to give a 30 days’ notice prior to the sale of the PCB Shares is stated in paragraph 5 of the Repayment Agreement. The wrongful sale claims in paragraph 18 of GQSB’s Defence and Counterclaim is premised on the Repayment Agreement being valid and effective.

The question is whether in the light of the obvious incompatibility of the Declaration and the consequential orders, this Court can treat the consequential orders as being repugnant to the Declaration and ignore the same.

The situation that this Court is now confronted has in fact been resolved by the principle in Sri Alam Sdn Bhd v Newacres Sdn Bhd [1997] 1 MLJ 297 (Court of Appeal) which laid down the approach that where there is an inconsistency in the orders within the judgment, the primary order will prevail over the consequential order.

The Court of Appeal took the approach that where there is an inconsistency between two parts in the same order, the order that reflects the manifest object and intention of the court prevails over those parts of the order which are inconsistent with the former. Siti Norma Yaakob JCA (as she then was) reviewed a number of high authorities and concluded at page 309 paragraph H: “We are mindful of the fact that all the three authorities concerned the interpretations of three different documents but a close perusal of the same authorities disclose one common factor and it is this. When trying to reconcile a document that contains words or clauses that are inconsistent or repugnant to each other, the primary consideration is to ascertain the manifest objection and intention why such a document came into existence in the first place. Once such a purpose or intention has been ascertained, words or clauses which are inconsistent with such a purpose or intention are excluded.” Also, page 311 paragraph H: “As the appellant's claim stands or fails on the issue of liability, it is our considered opinion that the main purpose of the Supreme Court order was to establish the issue of liability if any, and having found so, made the other consequential orders and directions as listed at paras (3)—(6) above. However, in so doing, it has also included the direction that the High Court 'determine the extent of the fiduciary duties and any breach thereof'. In adopting a purposive approach to the order, the trial judge had however preferred the later part of the order than the earlier one. This we consider is where he had erred, for had he identified what was the main purpose of the Supreme Court order, he would have ignored the later direction and proceed to identify the extent of the appellant's entitlements under the agreement, if any, and to assess the same. This was not done but instead the trial judge had tried the case all over again by proceedings to consider the nature of the relationship between the parties and determining whether such a relationship imposed on the respondent duties of a fiduciary character. This, we consider, was quite unnecessary as we had already pointed out those matters have already become non-issues by virtue of the Supreme Court order. As such, we consider that the trial judge's conclusions that 'the agreement is a straight forward commercial transaction between a housing or property developer and the proprietor of land' and that the relationship of the parties 'does not exhibit the normal attributes of a partnership' or that 'the respondent is not a fiduciary as a partner in a partnership is a fiduciary towards his co-partners' to be unnecessary and redundant.”

The decision of the Court of Appeal in Sri Alam went on appeal to Federal Court in Newacres Sdn Bhd v. Sri Alam Sdn Bhd [2000] 2 MLJ 353. The Federal Court did not disapprove the approach and the principle of construction of a court order as enunciated by the Court of Appeal. However, the Federal Court was of the view that on the facts of that case, it was possible to give a harmonious interpretation to the two parts of the order made earlier by the Supreme Court.

In this regard, I agree with learned counsel for AIBB that the relevant passage from the Grounds of Judgment that manifests the main object and intent of the judgment by the Court of Appeal can be gleaned from the following passage: “[35] …………………… The important question that the learned judge should have asked herself is the arrangement under the restructuring exercise is not in place, would the 1st defendant have signed the Novation Agreement, the Repayment Agreement and the guarantees. In our view the evidence points to the fact that they signed these agreements which in effect means a taking over of Dunia Dimensi liability with the Plaintiff because of the assurances given by the plaintiff to the defendants under the restructuring exercise. It would be incredulous for the defendants to agree take over these liabilities if not for assurances under the restructuring exercise. In fact PW1 made it clear in her evidence that the Repayment Agreement is related and dependent on the successful restructuring of PCB. Since that restructuring has been rejected by the SC, the appellants could not have liable by the learned judge.” [emphasis added]

By the aforesaid passage, I have understood the Court of Appeal to mean that GQSB’s agreement to assume the liability of Dunia Dimensi was induced by AIBB’s assurance regarding the PCB Restructuring Scheme and more importantly, GQSB’s obligations under the Repayment Agreement were subject to the success of the PCB Restructuring Scheme. In other words, until the PCB Restructuring Scheme was approved by SC and successfully carried out, GQSB had no obligations to assume Dunia Dimensi’s liability for the Facility at all.

The effect of the aforesaid is that the PCB Shares that were to be transferred to GQSB under the Repayment Agreement and the Novation Agreement, a fact agreed by GQSB during the trial (see below), ought not to be transferred until the successful completion of the PCB Restructuring Scheme and the full payments made by GQSB under the Repayment Agreement. RC ...Juta itu. Syer-syer 13,849,500 itu yang dipegang oleh Dunia Dimensi. Adakah syer-syer tersebut telah diambil alih oleh Good Quantum? Hamzah Ya. RC Adakah syer-syer tersebut diambil alih melalui Repayment Agreement dan juga Novation Agreement? Hamzah Ya, betul.

AIBB does not dispute that the transfer of PCB Shares from Dunia Dimensi to GQSB was effected on 05.10.2006. However, the said transfer was done pursuant to the terms of the Novation Agreement, in particular Clause 2 thereof, and as shown in Form 29A, subject always to GQSB’s payment of the full redemption sum for the PCB Shares.

In this case, there is no disputed that GQSB did not fully pay the redemption sum for the PCB Shares. Pursuant to the terms of the Repayment Agreement, the redemption sum or purchase consideration for the 13,849,500 units of PCB Shares was RM7.5 million and GQSB had only paid RM1,059,671.84, which GQSB is entitled to a refund, a claim rightly conceded by AIBB.

Accordingly, I agree with learned counsel for AIBB that the Declaration entirely accords and is consistent with the main purpose and actual intention of the Court of Appeal as set out in its Grounds of Judgment, in particular, in para [35] cited above.

Following from the Declaration, with the Novation Agreement, Repayment Agreement and Guarantee being rendered void, invalid and unenforceable, GQSB has acquired no rights, interests or title over the PCB Shares at all. Indeed, by the Declaration, GQSB would not need to pay for the PCB Shares at all and instead is entitled to the refund of the partial payment made under the Repayment Agreement, thereby negating any of its entitlement to claim ownership over the PCB Shares.

Since it is trite that a person who has no rights or title to a property cannot claim for wrongful or negligent sale of that property, it must follow that the consequential orders directing damages to be assessed for the wrongful and negligent sale of the PCB Shares are incongruous and inconsistent with the manifest object and main purpose in the Grounds of Judgment, namely that the Novation Agreement and the Repayment Agreement is ineffective, invalid and unenforceable. For this reason, and based on the authority of the Court of Appeal in Sri Alam Sdn Bhd v Newacres Sdn Bhd [1997] 1 MLJ 297, this Court must treat the Declaration as prevailing over the consequential orders.

In any case, it may be possible to also give a harmonious interpretation to the Liability Judgment of the Court of Appeal. Notwithstanding the legal consequences flowing from the Declaration, the consequential orders for damages for wrongful and or negligent sale of the PCB Shares can still stand if GQSB can establish that it has suffered damages not as a person who has rights and or titles as owner of the PCB Shares but in some other capacity or under some equitable duty or duty arising from tort that AIBB owed to GQSB.

However, at the assessing of damages proceedings before this Court, none of the Assessing Parties had established the existence of any such duties at all. On the contrary, what the Assessing Parties had intended to do was to adduce testimonies and evidence in respect of their claims for losses arising from the rejection of the PCB Restructuring Scheme by the SC. As stated above, I have not allowed these to be admitted as the Grounds of Judgment of the Court of Appeal did not at all made a finding that the said rejection was caused by AIBB.

In the premises, it is the judgment of this Court that AIBB’s claims for damages arising from the wrongful and or negligent sale of the PCB Shares by AIBB is simply not established and must be dismissed.

RDA’s claim for RM 50 million as damages is based on reliance loss, namely for wasted expenditures and expenses incurred in reliance on the Collateral Contract. In this regard, notwithstanding that only ‘general damages’ was pleaded, in my Rulings dated 13.12.2022, I have held that the ‘general damages’ in this instance would cover both pecuniary and non-pecuniary damages.

This means that if RDA is able testify to the particulars of such losses and the produce documentary evidence e.g., invoices, payment vouchers, or other proof of payment as the same to show that it had incurred expenditures or expenses in reliance of the Collateral Contract, then it would be able to claim for the same [See: China Comservice (Hong Kong) Ltd v. Sediabena Sdn Bhd and another appeal [2024] 4 MLJ 684]

Under cross examination, Datuk Chang conceded that RDA’s claims for RM 50 million in Q&A 49 to 52 of Enclosure 130, is a claim for loss of profit. The relevant excerpt is found below: And then at your last paragraph, the last page starts with "RDA and myself", yes? Ok, so, over to page 27 at the top, and I read. "RDA and myself could just have focused on RDA and my own field of business that is property development and construction business to make a profit of RM10 million to RM12 million a year", right? And then you conclude by saying therefore you claim for, or RDA claims for RM50 million, correct? And would you not agree with me that you used the word "profit", in your second paragraph of your answer to Question 52 and in your second last paragraph in your answer to Question 52? You used the word "profit" twice, right? CHANG What do you mean? No, in Question and Answer 52, second paragraph. You used the word "profit", right? CHANG 52, second paragraph? Markup? "To have an agreed of 20% profit", right? CHANG Markup And then in your second last paragraph at page 27, you also used the word "profit". "Could make a profit", right? CHANG Second? The last, second sentence of the top paragraph. The top paragraph of page 27. CHANG Top paragraph? At the second sentence. CHANG Can you read? Yes. "RDA and myself could have just focused on RDA and my own field of business, that is property development and construction and to make a profit," right? So, essentially, this is a loss of opportunity for you to make profit, correct? For RDA to make profit, correct? CHANG Yes "Alternatively, RDA's claim for its loss not being able to develop RDA'S project and obtain the profits which RDA would otherwise have carried out had RDA not injected the project into the corporate restructuring exercise by relying on representation, inducement, persuasion and assurance made by Alliance Bank." Right? CHANG Yes. Can you look back at page 75? I put it to you, Datuk Wira, that the claim for loss of profit was not allowed by this Court order dated 06/01/2023. Agree or you don't agree? CHANG Yes, agree.

The claim for loss of profit is really for the profit that RDA had expected that it would have made if the PCB Restructuring Scheme had been successfully performed and completed. However, this specific Head of Damages was expressly excluded and disallowed in the Rulings dated 6.1.2023, again on the basis that the Court of Appeal did not find that the SC’s rejection of the PCB Restructuring Scheme was due to AIBB at all.

Alternatively, RDASB claims for its loss of not being able to develop RDASB's projects and obtained the profits, which RDASB would otherwise have carried out, had RDASB not injected the projects into the corporate restructuring exercise, by relying on the representation, inducement, persuasion and assurance made by AIBB.

Without the necessary causal link found by the Court of Appeal, there is no room at the proceeding for assessment of damages for RDA to pursue any claims for losses, if any, arising from the SC’s rejection of the PCB Restructuring Scheme, let alone for the expected profit that RDA had expected to derived from the successfully completion of the same. At the assessment of damages proceedings before this Court, RDA is only entitled to recover any pecuniary losses said to be caused by the breach of the Collateral Contract was made under the Repayment Agreement.

Causation was stressed by Edgar Joseph Jr J (as he then was) in Popular Industries Limited v. Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360 24 at page 366: “A word now about general principles. When a plaintiff claims damages from a defendant, he has to show that the loss in respect of which he claims damages was caused by the defendant’s wrong, and also that the damages are not too remote to be recoverable.”

In this regard, the Singapore’s Court of Appeal decision in Robertson Quay Investment Pte Lt v. Steen Consultants Pte Ltd and Another [2008] SGCA 8 is also instructive as to the need for establishing ‘factual link’ and ‘necessary link’: “[39] Secondly, the main difficulty with RQI’s case both in the court below and before this court, in so far as proof of actual damage was concerned, is this: RQI’s case was based on an automatic shift from the premise that the respondents were responsible for the delay in the completion of the project to the necessary conclusion that the respondents were therefore also responsible for the additional interest incurred as a result of the delay. However, this shift is not a necessary or an automatic one. In particular, such a conclusion could only be arrived at if it is proved, to the satisfaction of this court, that there is a factual link between the delay in the project’s completion on the one hand and the additional interest in question on the other. As noted briefly at [33], above, the mere fact of payment by RQI of the amount of additional interest without more is insufficient, in and of itself, to fix liability on the respondents. There are, in fact, other scenarios in which RQI might have had to pay additional interest even in the absence of any contractual breach on the part of the respondents in the first instance.” [emphasis added]

In this case, RDA has failed to establish any causation or factual link between its alleged loss of RM50 million and AIBB’s breach of the Collateral Contract.

In fact, counsel for RDA conceded that any claim for loss of bargain arising from the PCB Restructuring Scheme corporate exercise would not be pursued at this assessment proceeding: My Lord, if I may - JUDGE That means during the assessment it has to be proceeded on the basis of my ruling being still valid. Yes. Yes, My Lord. We accept Your Lordship's - JUDGE Yes. So, just to make our, whatever submission here clear in simple terms is that the loss of bargain claim with regard to the corporate exercise loss will not be canvassed here. JUDGE Yes, alright. That's all. But the loss of bargain, because he's a layman. Loss of bargain with regard to other loss, because Your Lordship also allowed reliant loss to be assessed. So, therefore in that regard, yes. That is to clear the, what you call, the top of my - JUDGE Alright. Just that (..00:42:41). That's all they need. Yes, that's all. Any loss of bargain with regard to the corporate exercise loss will not be canvassed here. JUDGE Alright. Yes.

Accordingly, for the reason above, RDA’s claims for RM 50 million as its loss is not established and must also be dismissed.

This Court has allowed the following Proposed Heads of Claims by Datuk Chang’s to be assessed:

General damages for mental stress and injury to his business goodwill and reputation by virtue of the bankruptcy proceedings instituted by AIBB.

In this proceedings, Datuk Chang is claiming a sum of RM30 million as damages for mental distress, damage to business reputation and humiliation and loss of income arising from the bankruptcy action taken by AIBB against him.

It is trite that damages such as mental distress, damage to the business reputation and humiliation, is typically not claimable in a claim predicated on a cause of action for breach of contract, whether collateral or otherwise. This is because contract law primarily compensates financial losses rather than emotional injury.

Damages for emotional distress may however be awarded in contract for peace of mind such as vacation packages or medical care agreements and tort of abuse of process or malicious prosecution, which is not Datuk Chang’s pleaded case here.

In Ang Beng Choo v. RHB Insurance Berhad [2013] 1 LNS 382, Lee Swee Seng JC (now FCJ) adopted the principle laid down by the House of Lords in Johnson v. Gore Wood & Co [2002] 2 AC 1 and Farley v. Skinner [2002] 2 A.C. 732 and held as follows: “The basis for assessment of damages in a breach of contract is to put the Plaintiff, the non-defaulting party, in the position as if the contract has not been wrongfully terminated. It is compensatory in nature. As such aggravated damages is generally not awarded for a breach of contract simpliciter. In this respect the House of Lords decision in Farley v. Skinner [2002] 2 A.C. 732 summarised succinctly the general principle in a breach of contract against an award for anxiety, distress, disappointment and loss of credibility, reputation and the like as follows in the speech of Lord Hitton at page 757-758: ‘47 It is clearly established as a general rule that where there has been a breach of contract damages cannot be awarded for the vexation or anxiety or aggravation or similar states of mind resulting from the breach. The principle was stated by Bingham LJ in Watts v. Morrow [1991] WLR 1421, 1445: A contract-breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which his breach of contract may cause to the innocent party. This rule is not, I think, founded on the assumption that such reactions are not foreseeable, which they surely are or may be, but on considerations of policy.’ This general principle has recently been approved by this House in Johnson v. Gore Wood & Co [2002] 2 AC 1. The principle has particular application to commercial cases and in Johnson v. Gore Wood & Co Lord Cooke of Thorndon observed, at p 49, that: ‘Contract-breaking is treated as an incident of commercial life which players in the game are expected to meet with mental fortitude.” But the principle is not applicable in every case and in Watts v. Morrow [1991] 1 WLR 1421, Bingham LJ went on to state that there was an exceptional category of cases which he described as follows: “Where the very object of a contract is to provide pleasure, relaxation, peace of mind or freedom from mole station, damages will be awarded if the fruit of the contract is not provided or if the contrary result is procured instead. If the law did not cater for this exceptional category of case it would be defective. A contract to survey the condition of a house for a prospective purchaser does not, however, fall within this exceptional category.” Bingham LJ then stated: In cases not falling within this exceptional category, damages are in my view recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort.’ (emphasis added)”

The Singapore Court of Appeal similarly adopted the same principle in ACB v. Thomson Medical Pte Ltd and others [2017] SGCA 20: “[46] The question whether a particular head of damage is actionable will depend greatly on the cause of action raised (see, for example, the English Court of Appeal decision of E (a minor) v Dorset CC [1994] 4 All ER 640 at 658 per Evans LJ). For instance, the law of contract does not generally award recovery for reputational damage and mental distress arising from a breach of contract (see the House of Lords decision of Addis v Gramophone Co Ltd [1909] AC 488 (‘Addis’); though cf below at [53]), while the recovery of damage to reputation is a sine qua non of an action in defamation. Differences also exist between torts. For example, the causing of substantial inconvenience and discomfort resulting in the loss of the amenity value of land constitutes damage in the tort of private nuisance, but not in the tort of negligence; and, conversely, personal injury is actionable in negligence but not in nuisance (see, for example, the House of Lords decision of Hunter v Canary Wharf Ltd [1997] 3 LRC 424 at 442–443 per Lord Hope of Craighead). Different causes of action will also treat the question of actionability at different stages of the analysis, even if the factors that are taken into account are the same. Given that the appellant has brought an action in both negligence and contract, we will discuss the concept of actionability in each separately. [53] …….. In general, the law of contract concerns itself with the remediation of pecuniary damage, and the scope for recovering damages for non-pecuniary loss in contract is greatly limited. This is the reason for the well-established rule that the law of contract does not generally award recovery for reputational damage and mental distress arising from a breach of contract (see, generally, Addis). In the English Court of Appeal decision of Watts v Morrow [1991] 4 All ER 937 at 959 Bingham LJ (as he then was) explained that these restrictions were not ‘founded on the assumption that such reactions are not foreseeable, which they surely are or may be, but on considerations of policy’ (our emphasis). One of the policy reasons for this rule is that the law of contract has long concerned itself with commercial affairs, in which contract-breaking is, as explained by Lord Cooke of Thorndon in the House of Lords decision of Johnson v Gore Wood & Co [2001] 1 All ER 481 at 516, ‘an incident of commercial life which players in the game are expected to meet with mental fortitude’ (although cf The Law of Contract, especially at para 21.112, as well as Andrew B L Phang and Goh Yihan Contract Law in Singapore (2012) at paras 1539-1540).”

Thus, based on the aforesaid accepted principles, the claims by Datuk Chang for reputational loss and or emotional distress arising from the bankruptcy proceedings filed against him is to be rejected.

In any case, the bankruptcy proceedings that was filed against Datuk Chang was based on a valid judgment entered against him. In this regard, in Affin Bank Berhad (formerly known as Commercial Finance Bhd) v. Sharifah Zohra Jabeen binti Syed Shah Miskin [2016] 4 CLJ 481, the Court of Appeal speaking through Mary Lim Thiam Suan JCA (as she then was) held that: “[17] The Court agrees that it is both implicit and not in the public interest if litigants such as the appellant are prohibited from bringing honest enforcement proceedings and claims before the Court on the strength of a proper and valid judgment of the Court. There can be no malice in such conditions. The rationale for this approach is succinctly expressed by Lord Pearce in Rondel v Worsley [1967] 3 AER 993 at page 1024 and we agree with it entirely: “The legal process inevitably creates hardships and it is not always easy to see what is the right balance. In attempting to do so one must regard the interrelation of the various parts. It is a hardship that a man who has done no wrong should be subjected by a plaintiff to a baseless charge, in meeting which he will incur large expense. The charge may be reported largely in the newspapers and injure his reputation. ...But the basic hardship is inevitable and will always remain, namely, that any plaintiff can use the legal machine as a sounding board for untruthful allegations and cause harm, trouble and expense to an innocent defendant, and yet the law holds him (and the press who report the case) immune from paying damages for their untruth. Yet, to remove this immunity would create a great injury to justice. Without it, the honest litigant might not dare to bring an honest claim for fear that if he fails he might be sued for damages”. [18] This view was applied by Scott J in Business Computers International Ltd. v Registrar of Companies and Others [1987] 3 WLR 1134 at page 1138: “It is implicit in the decision that the commencement of bankruptcy proceedings or the presentation of a winding up petition cannot found an action in damages unless associated with malice”. [19] The only exception to this protection from litigation is if there was no reasonable cause or probability and the initiation of the litigation was actuated by malice or lack of good faith. We fail to see how malice or lack of good faith can even arise where, as is the case here, the bankruptcy proceedings not only stems but flows from that valid judgment of the Court which has never been set aside. Although in the nature of a default judgment which has lapsed as it has been more than 12 years since it was pronounced, the judgment is nevertheless valid and regular…..”

In the present case, the bankruptcy notice and creditor’s petition were presented by the Bank against Datuk Chang on 12.7.2012 and 8.11.2012 respectively, based on a valid and conclusive judgment granted by the learned High Court trial judge, Justice Dato’ Hasnah Binti Dato’ Mohammed Hashim (as she then was) on 5.4.2012 (‘the Judgment’).

The Judgement was only set aside by the Court of Appeal on 24.9.2014.

In fact, there is no evidence that the bankruptcy proceeding was initiated for some other purpose than to obtain a genuine redress. Datuk Chang himself did not testify that the bankruptcy proceeding was commenced with malice.

Accordingly, for the reasons above, Datuk Chang’s claims for damages under this Head of Damages is also rejected.

In any event, there is no direct evidence to support Datuk Chang’s bare claim for damages relating to any alleged mental stress, damage to his purported business reputation, humiliation, and loss of income arising from the bankruptcy proceedings commenced by AIBB at all.

Datuk Chang’s complaint on the bankruptcy proceeding primarily revolves on the manner in which the creditors’ petition was served on him. Datuk Chang’s oral evidence alleging that AIBB’s former solicitors had intentionally threw the creditors’ petition outside the fence of his house to embarrass him is nothing but a bare assertion without any collaborative evidence.

I agree that Datuk Chang produced no evidence whatsoever to show that he had lodged a complaint to AIBB or its former solicitors regarding the alleged service of the creditors’ petition by throwing it outside the fence of his house. Nor did he challenge the substituted service of the creditors’ petition by filing an application to set it aside. Thus, the insinuation by Datuk Chang that AIBB should not have proceeded with substituted service of the creditors’ petition ought to be rejected.

Significantly, Datuk Chang’s counsel conceded that there is no documentary evidence produced before the Court to show that either Datuk Chang or his companies had been blacklisted by any financial institution due to the bankruptcy proceeding initiated by AIBB. JUDGE The question is, because now I can only deal with documents that's before the Court, yes. So, the question asked is, today, do you have any evidence that either your company or you yourself have been blacklisted? CHANG Yes, I have. JUDGE In the bundle filed before the Court. Any documents and I will allow your counsel to assist if there are any such documents to highlight it. Because the witness may not be familiar with the documents. If there is, you just tell the pages and that's it, we can move on. My Lord, as far as I can remember, there is no such document in the bundle before the Court.

Datuk Chang himself admitted that no documentary evidence was presented to the Court to prove that his business or his various development projects suffered any negative impact due to the bankruptcy proceeding nor did he produce any medical report to substantiate his alleged mental stress. I put it to you, Datuk Wira, that there is also no evidence that, any documentary evidence, that before the Court, before the Court that any of your businesses or your various development project suffered any negative impact by the bankruptcy proceeding. Correct? Do you agree? There's no, I repeat, there's no documentary evidence before this Court; in the bundle that any of your businesses or your development project suffered any negative impact. CHANG Agree. And there is no medical report produced by you to support your allegation. CHANG Yes.

Accordingly, it is also the judgment of this Court that Datuk Chang’s claim for general damages for his mental distress, damage to business reputation and humiliation and loss of income arising from the bankruptcy action taken by AIBB against him is to be rejected.

In the premises, it is hereby ordered that AIBB is to pay GQSB the sum of RM1,059,671.84 as damages with interest thereon at 8% per annum from 26.2.2007 until 25.9.2014 and thereafter at 5% per annum to full realisation.

For the record, notwithstanding that the Liability Judgment had provided for interest payable post judgment to be fixed at 8% per annum, this rate of interest is clearly wrong as the statutory rate of interest as at 25.9.2014 had at the date of the Liability Judgment been changed to 5% per annum.

This Court has the necessary power to order and regularise the interest be computed at the rate of 5% per annum under order 2 Rule 1.

AIBB is to pay costs fixed at RM 20,000.00 subject to allocator.

Both RDA and Datuk Chang, jointly and severally, are hereby ordered to pay AIBB costs fixed at RM 35,000.00 subject to allocator. Dated the 12th day of August 2025 ONG CHEE KWAN JUDGE OF THE HIGH COURT HIGH COURT (COMMERCIAL DIVISION NCC2 & ADMIRALTY) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Counsel for Assessing Party: Datuk Jagjit Singh together with Mr. Yap Bell Pung; Mr. Yap Bell Herng; Mr. Joshua Vijayan Dharmaraj; Mr. Tan Cheng Kiat; and Ms. Gan Jie Ying - (Messrs. Bell & Lee) Counsel for Assessed Party: Tan Sri Cecil Abraham together with Mr. Benjamin Dawson; Ms. Koh San Tee; Ms. Niisha Lakshme A/P Muthuvelu Mahathavan; Ms. Muzalifah binti Shabudin; Ms. Nip Qian Rou and Ms. Nur Syahmina binti Zainul Abidin (Messrs. Benjamin Dawson)

Aik Ming (M) Sdn Bhd v. Chang Ching Chuen [1995] 3 CLJ 639 2. Brown v. Dunne [1893] 6 R.

Carapiet v. Derderian AIR [1961] Cal.

Patel v. Canada (Minister of Citizenship and Immigration) [2016] I.A.D.D. No. 1895 5. Sri Alam Sdn Bhd v Newacres Sdn Bhd [1997] 1 MLJ 297 (Court of Appeal)

Newacres Sdn Bhd v. Sri Alam Sdn Bhd [2000] 2 MLJ 353 7.

Sri Alam Sdn Bhd v Newacres Sdn Bhd [1997] 1 MLJ 297 China Comservice (Hong Kong) Ltd v. Sediabena Sdn Bhd and another appeal [2024] 4 MLJ 684]

Popular Industries Limited v. Eastern Garment Manufacturing

Robertson Quay Investment Pte Lt v. Steen Consultants Pte Ltd and Another [2008] SGCA 8 11. Ang Beng Choo v. RHB Insurance Berhad [2013] 1 LNS 382 12. Johnson v. Gore Wood & Co [2002] 2 AC 1 13. Farley v. Skinner [2002] 2 A.C.

ACB v. Thomson Medical Pte Ltd and others [2017] SGCA 20 15. Affin Bank Berhad (formerly known as Commercial Finance Bhd) v. Sharifah Zohra Jabeen binti Syed Shah Miskin [2016] 4 CLJ 481