GST Builder Sdn Bhd v Sabah Development Bank Berhad (JA-28PW-78-08/2024)

1 IN THE HIGH COURT OF MALAYA AT JOHOR BAHRU IN THE STATE OF JOHOR, MALAYSIA COMPANIES WINDING UP PETITION NO: JA-28NCC-31-02/2018 POST COMPANIES (WINDING-UP) NO: JA-28PW-78-08/2024 In the matter of Sections 375, 381, 387, 393, 471, 486 and 511 of the Companies Act, 2016 And Order 29 Rule 1, Order 29 Rule 7 and Order 92 Rule 4 of the Rules of Court, 2012 And In the matter of Goodwill Division Sdn. Bhd. (In Liquidation) (Company No.: 868062 – P) And In the matter of GST Builder Sdn. Bhd. (Company No.: 1049459 – V) and Kwang Fatt Heng Enterprises Sdn. Bhd. (Company No.: 496089 – P) (“the Applicants”) 14/04/2026 11:02:20 JA-28PW-78-08/2024 Kand. 68 **Note : Serial number will be used to verify the originality of this document via eFILING portal 2 And In the matter of Sabah Development Bank Berhad (Company No.: 197701003571 (34738 –W)) (“the 1st Respondent”) And In the matter of Sundarasan A/L Arumugam (NRIC No.: 710424-10- 5321) and Ling Sie Kong (NRIC No.: 750331-13-5245) as the erstwhile Receivers & Managers of Goodwill Division Sdn. Bhd. (In Liquidation) (Company No.: 868062 – P) (“the 2nd and 3rd Respondents”) And In the matter of Raveendra Kumar A/L Nathan (NRIC No.: 621117-14- 7357) as the present Receiver & Manager of Goodwill Division Sdn. Bhd. (In Liquidation) (Company No.: 868062 – P) (“the 4th Respondent”) And **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 In the matter of Goodwill Division Sdn. Bhd. (In Liquidation) (Company No.: 868062 – P) (“the 5th Respondent”) RE: GOODWILL DIVISION SDN. BHD. (IN LIQUIDATION) (COMPANY NO.: 868062 – P) GROUNDS OF JUDGMENT Introduction

1. This is an application by Sabah Bank Development as the 1st Respondent (“R1”) (Enclosure 29) to strike out the Notice of Motion dated 5.8.2024 (Enclosure 1) filed by GST Builder Sdn. Bhd. (Company No.: 1049459 – V) and Kwang Fatt Heng Enterprises Sdn. Bhd. (Company No.: 496089 – P) (“the Applicants”) under Order 18, rule 19(1)(a), (b), (c) and (d) or Order 92, rule 4 of the Rules of Court 2012.

2. The grounds as stated by R1 in Enclosure 29 are as follows:-

3.

29. At the conclusion of the hearing, this court dismissed Enclosure R1 has now filed an appeal against this Court’s decision with the Court of Appeal.

4. The following is this Court’s grounds for the said decision. The relevant cause papers

5. The cause papers and affidavits relevant to the hearing of this instant application are as follows: -

(ii) Affidavit in Support affirmed by Fong Soon Ming on 29.07.2024 [Enclosures 2 & 3];

(iii) R1’s Application for Striking Out via Notice of Motion dated 25.02.2025 [Enclosure 29]; **Note : Serial number will be used to verify the originality of this document via eFILING portal 5

(iv) Affidavit in Support affirmed by Abdul Razak bin Hamid on 25.02.2025 [Enclosure 30];

(vi) R1’s Affidavit in Reply to Enclosure 33 affirmed by Abdul Razak bin Hamid on 27.03.2025 [Enclosure 34].

6. Enclosure 1 in essence is an application by the Applicants for leave to commence the instant matter and if granted to proceed to hear all other reliefs prayed for against the Respondents under various provisions of the Companies Act 2016 as well as Order 29 Rules of Court 2012 together with the inherent jurisdiction of the Court as contained in Order 92 Rule 4 Rules of Court 2012.

7. Enclosure 1 has yet to be heard on its merits. Salient facts

8. Goodwill Division Sdn. Bhd. (In Liquidation) (Company No.: 868062 – P) (“the 5th Respondent”) (“R5”) had been granted financial assistance by Sabah Development Bank (“the 1st Respondent”) (“R1”) on several occasions between 2011 until 2014. **Note : Serial number will be used to verify the originality of this document via eFILING portal 6

9. To that end, R5 had executed four (4) debentures in favour of R1 and had charged its assets as collaterals. The debenture and charge documents were all lodged with the Companies Commission of Malaysia.

10. At the instance of a third party, R5 was wound up on 02.04.2018.

11. Upon being wound up, the Malaysian Department of Insolvency

(MDI) was appointed as R5’s liquidator.

12. On 14.10.2019, MDI called for a creditor’s meeting where Augustine A/L T.K James was nominated to act as R5’s private liquidator.

13. Augustine A/L T.K James was then appointed on 17.12.2019 as R5’s liquidator replacing MDI.

14. On 07.09.2018, R1 through its solicitors Messrs Jayasuria Kah & Co informed R5 that its outstanding debt with R1 stood at RM 72,266,726.20 as of 31.08.2018.

15. On 15.03.2019, R1 appointed R2 and R3 as R5’s Receiver and Managers for the said debentures. **Note : Serial number will be used to verify the originality of this document via eFILING portal 7

16. R2 and R3 resigned on 09.12.2023 and R4 subsequently was appointed as R5’s receiver and managers.

17. The Applicants are both creditors of R5.

18. The Applicants filed Enclosure 1 seeking for reliefs in respect of properties managed and/ or sold and/ or transacted by R2, R3 and R4 belonging to R5.

19. The Applicants contend that R5 had a total of five (5) unsecured creditors and that the total claim made by the unsecured creditors that was accepted by the liquidator amounted to RM185,156,813.54.

20. Without dwelling much into the merits, the Applicants main grievance is that R5’s assets were sold undervalued by R2, R3 and R4 which had caused no surplus left with R5 to be distributed among R5’s unsecured creditors including the Applicants.

21. The Applicants in Enclosure 1 also sought for an interim injunction to restraint the liquidators from further disposing of R5’s assets, or in lieu thereof, damages for any or all losses suffered by the Applicants as a result of the said undervalued sales. **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 Analysis and decision

22. Order 18 Rule 19 ROC 2012 states as follows: - “(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-

(2) No evidence shall be admissible on an application under subparagraph (1)(a).

(3) This rule shall, as far as applicable, apply to an originating summons as if it were a pleading.”

23. On the legal principles applicable when dealing with a striking out application, reference may be made to Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 CLJ 1 where it was held by the Federal Court that: - [26] The tests for striking out application under O. 18 r. 19 of the ROC, as adopted by the Supreme Court in Bandar Builder (supra) **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 are, inter alia as follows: (a) it is only in plain and obvious cases that recourse should be had to the summary process under the rule; (b) this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it ‘obviously unsustainable’ (emphasis added); (c) it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence; and (d) If there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. 3 of the ROC; and (e) The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.

24. The Federal Court in Seruan Gemilang also decided that: - “[27] The Court of Appeal, in Sivarasa Rasiah & Ors v. Che Hamzah Che Ismail & Ors [2012] 1 CLJ 75; [2012] 1 MLJ 473, had adopted the well-settled principle of striking out in the following passage. A striking out order should not be made summarily by the court if there is issue of law that requires lengthy argument and mature consideration. It should also not be made if there is issue of fact that is capable of resolution only after taking viva voce evidence during trial, (see Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 2 MLJ 565 (Federal Court)). [28] The basic test for striking out as laid down by the Supreme Court in Bandar Builder (supra) is that the claim on the face of it must be ‘obviously unsustainable’. The stress is not only on the word ‘unsustainable’ but also on the word ‘obviously’ ie, the degree of unsustainability must appear on the face of the claim without having to go into lengthy and mature consideration in detail. If one has to go into lengthy and mature consideration in detail of the issues of law and/or fact, then the matter is not **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 appropriate to be struck out summarily. It must be determined at trial.”

25. Refer also to Tan Wai Hong & Ors v Malaysian Airlines System Berhad & Ors [2017] 4 MLJ 540 where the Court of Appeal had this to say: - “[7] The Court will adopt the following as principles applicable to the consideration of an application to strike out pleadings and endorsements: a) In considering the defendants’ application under Order 18 rule 19(1)(a), no affidavit evidence is admissible; b) All the averments in the statement of claim must be assumed to be true; c) The Court should only exercise its powers sparingly and only in clear cases; d) The test to be applied is whether on the face of pleadings, the claim is obviously unsustainable. The matter must be unarguable or almost incontestably bad; e) The burden is on the defendants to show to the Court that the plaintiffs’ claim is so plain and obviously unsustainable or in other words, the plaintiffs’ claim is bound to fail at trial; f) Where there is a dispute as to the factual matrix of the case, the Court would not strike out the pleadings and endorsements; g) The power to strike out pleadings and endorsements should be exercised after the Court has considered all facts, but the Court must not embark a minute examination of the documents and the facts of the case as this is solely reserved for the trial judge; **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 h) A pleading is “frivolous” or “vexation” when its discloses no reasonable cause of action on its face. The Oxford English Dictionary defines “frivolous” as follows: b Law. In pleading: Manifestly insufficient or futile. Black Law Dictionary, 9th ed. (Thomson Reuters, St. Paul, Minnesota, 2009), defines “frivolous” as “lacking a legal basis or legal merit; not serious; not reasonably purposeful…”; and “frivolous suit” as “A lawsuit having no legal basis, often filed to harass or extort money from the defendant”. Among the definitions of “vexatious” and “vexation” in the Oxford English Dictionary are the following: Vexatious

1. Causing, tending or disposed to cause, vexation. c spec Of legal actions: Instituted without sufficient grounds for the purpose of causing trouble or annoyance to the defendant. And, “Vexation, the action of troubling or harassing by aggression or interference (sometimes spec by unjustifiable claims or legal action).” Black Law Dictionary defines “vexatious suit” as “a lawsuit instituted maliciously and without good grounds, meant to create trouble and expense for the party being sued”. i) The Oxford English Dictionary defines “abuse (of process) as

(ii) wrong or improper use, misuse, misapplication, perversion; turning the wrong way, diversion to an improper use, corruption, distortion”. A pleading is an abuse of process if the litigation process is used for improper purpose; e.g., where the proceedings constitute a sham; where the process of the Court is not being fairly or honestly used, or is employed for some ulterior or improper purpose; j) In exercising the power under Order 18 rule 19(1)(d), the Court is not limited to considering the pleadings of the parties, but is entitled to consider affidavit relating to the issues in the case; and **Note : Serial number will be used to verify the originality of this document via eFILING portal 12 k) Where the Court is to exercise its inherent jurisdiction to dismiss a claim, it is important that there is no dispute between the parties on issues of facts.”

26. The locus classicus Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 4 CLJ 1 ought also be referred to where the Supreme Court had held that: - “The principles upon which the Court acts in exercising its power under any of the four limbs of O. 18 r. 19 (1) Rules of the High Court are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck v. Wilkinson [1899] 1 QB 86, p. 91) and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it "obviously unsustainable" (Attorney-General of Duchy of Lancaster v. L. & N. W. Ry. Co [1892] 3 Ch. 274, CA). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2 All ER 871, CA). The authorities further show that if there is a point of law which requires serious discussion, and objection should be taken on the pleadings and the point set down for argument under O. r. 3 (which is in pari materia with our O. 33 r. 2 Rules of High Court) (Hubbuck v. Wilkinson) (supra). The Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.”

27. For completion, reference from the apex court is made to Serac Asia Sdn Bhd v Sepakat Insurance Brokers Sdn Bhd [2013] 6 **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 CLJ 673 (Federal Court) where the Federal Court made observation that the summary procedure underlined under Order 18 Rule 19 ROC 2012 is only appropriate when a claim is ‘obviously unsustainable’; in the following way: - “... We also make this observation on the application of the court's summary power to strike out a pleading under O. 18 r. 19 of the Rules of Court 2012 (successor to RHC 1980). Although the power to strike out is a wide discretion, it should be exercised with care and only when the threshold requirement of 'an obvious and unsustainable case', can a pleading be struck out.” Whether Enclosure 1 discloses a reasonable cause of action.

28. R1’s main contention in Enclosure 29 is that the Applicants do not have a reasonable cause of action against R1 being a secured creditor to R5.

29. As to what amounts to a cause of action, reference is made to Government of Malaysia v Lim Kit Siang [1988] 1 CLJ (Rep) 63 where the Supreme Court had this to say: - “What then is the meaning of "a cause of action"? "A cause of action" is a statement of facts alleging that a plaintiff's right, either at law or by statute, has, in some way or another, been adversely affected or prejudiced by the act of a defendant in an action.” **Note : Serial number will be used to verify the originality of this document via eFILING portal 14

30. Further reference is also made to Letang v Cooper [1965] 1 QB 222 where it was held by the English Court that a cause of action is where:- “a factual situation the existence of which entitled one person to obtain from the Court a remedy against another".

31. In Tuan Haji Ishak Bin Ismail & Ors v Leong Hup Holdings Bhd & Others Appeals [1996] 1 CLJ 393 the Court of Appeal on the same subject had this to say: - "With respect, I think we should first ask ourselves what a "cause of action" is. Stroud's Judicial Dictionary 5th edition Vol. 1 page 378 gives twenty separate interpretations of this expression. I think the first is appropriate: A "cause of action" is the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact which, if traversed, the plaintiff must prove in order to obtain judgment (per Esher M.R., Read v. Brown, 22 QBD 128; this case was applied in Bennett v. White[1910] 2 KB 643)".

32. Thus, for an application under limb (a) Order 18 Rule 19 ROC 2012 to succeed, the cause of action must be said to be obviously unsustainable only by looking on the face of the pleadings and not the evidence.

33. However, since R1 is also relying on other limbs pursuant to Order 18 Rule 19 ROC 2012 in their striking out application, affidavit **Note : Serial number will be used to verify the originality of this document via eFILING portal 15 evidence adduced could be considered in determining whether the Enclosure 1 ought to be struck off based on any of other limbs under Order 18 Rule 19 ROC 2012. In this regard, reference is made to See Thong & Anor v Saw Beng Chong [2013 3 MLJ 235] where it was held by the Court of Appeal as follows: - “[9] An applicant for striking out under Order 18 rule 19 can rely on any one or more than one sub-paragraphs (a) to (d). So far, there is no authority to say otherwise. Halsbury's Laws of Malaysia clearly confirms that an applicant under this rule is entitled to rely on any or all of the grounds specified in the rule. An application under this rule is not void and ineffective merely because sub-paragraph (a) had been pleaded together with sub-paragraphs (b) (c) and (d). The only limitation imposed under sub-rule (2) is that for an application under sub-paragraph (a), no evidence is admissible. However, where the court proceeds to decide an application under any other sub-paragraph, affidavit evidence should be admissible. Even though sub-paragraphs (b) to (d) are to be read disjunctively, it does not mean that an applicant cannot rely on more one sub-paragraph in his application, (see: Malayan United Finance Bhd v. Cheung Kang Plantation Sdn Bhd & Anor [2000] 2 CLJ 601; Pegasus Engineers Sdn Bhd v. Sambu (M) Sdn Bhd [1998] 4 MLJ 129 and Malaysian Court Practice 2007 Desk Edition (High Court) page 239).”

34. In Amanah Raya Bhd v Ong Chin Hoo [2019] 6 CLJ 41 the Court of Appeal had this to say: - “The case of See Thong (above) makes it crystal clear that the combination of various limbs of O. 18 r. 19(1) in one single application should not be deemed to render that application irregular and defective. The Court of Appeal has laid down the guidelines for the order of the various limbs to be considered - **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 first, limb (a) should be considered without having regard to the affidavits, then only the court should proceed to consider the other limbs in light of the affidavit evidence.”

35. Upon careful perusal of Enclosure 1, it is apparent to the Court that the Applicants premised their application on Section 393(3) of the Companies Act 2016 (CA 2016). The said section reads:- “(3) If it appears that any receiver or receiver and manager of the property of a company has misapplied or retained or become liable or accountable for any money or property of the company or being guilty of any misfeasance or breach of trust or breach of duty in relation to the company, the Court may, on the application of any creditor or contributory or the liquidator, examine into the conduct of the receiver or receiver and manager and compel the receiver or receiver and manager-

36. Under the said section, conducts of receivers or receivers and managers are open for examination by the Court if any element of misappropriation is suspected by the creditors or contributories or liquidators and upon them applying to the Court. In the given circumstances, the legal standing or locus standi of the Applicants **Note : Serial number will be used to verify the originality of this document via eFILING portal 17 who are R5’s unsecured creditors therefore are well conferred by the law. In this regard, this Court agrees with the Applicants contention that R2, R3 and R4 were appointed as receivers and managers by R1 to safeguard R1’s interest, thus they are agents for R1. As such, the issue whether there was any misappropriation committed by R2, R3 and R4 is certainly a live issue in Enclosure 1 which has to be properly ventilated before the Court.

37. Since the core of the Applicants’ Enclosure 1 relate to the conducts of R2, R3 and R4, I am of the view that R1 being their principal ought to be bought as a party in the present action. Accordingly, I hold that the Applicants have the necessary locus standi to include R1 as a party here. It cannot be denied that R1 as a secured creditor is also the ultimate beneficiary of the sale proceeds of the transactions concerning R5’s properties conducted by either one or all R2, R3 and R4.

38. The nexus between R2, R3 and R4 as receivers and managers for R and their respective positions as agents in law has been explained in Re B Johnson & Co, Ltd [1955] 2 ALL ER 775 where the English Court of Appeal had this to say at page 790: - “...whereas a receiver and manager for debenture-holders is a person appointed by the debenture-holders to whom the company has given powers of management pursuant to the contract of loan constituted by the debenture and as a condition of obtaining the loan, to enable him to preserve and realize the assets comprised in the security for the benefit of the debenture-holders. The **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 company gets the loan on terms that the lenders shall be entitled, for the purpose of making their security effective, to appoint a receiver with powers of sale and management pending sale, and with full discretion as to the exercise and mode of exercising those powers. The primary duty of the receiver is to the debenture-holders and not to the company. He is receiver and manager of the property of the company for the debenture-holders, not manager of the company. The company is entitled to any surplus of assets remaining after the debenture debt has been discharged, and is entitled to proper accounts. The whole purpose of the receiver and manager's appointment would obviously be stultified if the company could claim that a receiver and manager owes it any duty comparable to the duty owed to a company by its own directors or managers.”

39. In another case, the English Court of Appeal in Gomba Holdings UK Ltd and others v Minories Finance Ltd and others [1989] 1 ALL ER 261 had said this at page 263: - “The agency of receiver is not an ordinary agency. It is primarily a device to protect the mortgagee or debenture holder. Thus, the receiver acts as agent for the mortgagor in that he has power to affect the mortgagor's position by acts which, though done for the benefit of the debenture holder, are treated as if they were the acts of the mortgagor. The relationship set up by the debenture, and the appointment of the receiver, however, is not simply between the mortgagor and the receiver. It is tripartite and involves the mortgagor, the receiver and the debenture holder. The receiver is appointed by the debenture holder on the happening of specified events, and becomes the mortgagor's agent whether the mortgagor likes it or not. And, as a matter of contract between the mortgagor and the debenture holder, the mortgagor will have to **Note : Serial number will be used to verify the originality of this document via eFILING portal 19 pay the receiver's fees. Further, the mortgagor cannot dismiss the receiver since that power is reserved to the debenture holder as another of the contractual terms of the loan. It is to be noted also that the mortgagor cannot instruct the receiver how to act in the conduct of the receivership. All this is far removed from the ordinary principal and agent situation so far as the mortgagor and the receiver are concerned. Whilst the receiver is the agent of the mortgagor he is the appointee of the debenture holder and, in practical terms, has a close association with him. Moreover, he owes fiduciary duties to the debenture holder who has a right, as against the receiver, to be put in possession of all information concerning the receivership available to the receiver:”

40. See also Silven Properties Ltd and Another v Royal Bank of Scotland Plc and Others [2004] 4 ALL ER 484 (Court of Appeal) at page 495:- “The core duty of the receiver to account to the mortgagor subsists, but (for example) the mortgagor has no unrestricted right of access to receivership documents. The mortgage confers upon the mortgagee a direct and indirect means of securing a sale in order to achieve repayment of his secured debt. The mortgagee can sell as mortgagee and the mortgagee can appoint a receiver who likewise can sell in the name of the mortgagor. Having regard to the fact that the receiver's primary duty is to bring about a situation where the secured debt is repaid, as a matter of principle the receiver must be entitled (like the mortgagee) to sell the property in the condition in which it is in the same way as the mortgagee can and in particular without awaiting or effecting any increase in value or improvement in the property.” **Note : Serial number will be used to verify the originality of this document via eFILING portal 20

41. Next, zooming a bit further into Enclosure 1, the Applicants also allege breach of duty, misconduct and lack of transparency committed by the Receivers and Managers concerning the conducting of the sale of the assets of R5 charged to R1. Again, this to my mind, would warrant further inquiry by the Court.

42. The accountability of R2, R3 and R4 for the alleged wrongful acts have to be examined since it may affect the value of R5’s assets residues available to the general body of creditors including the Applicants.

43. In Simpang Empat Plantation Sdn Bhd v Ali Tan Sri Abdul Kadir and Others [2006] 1 CLJ 41, the Court of Appeal in discussing s.192 (2) of the Companies Act 1965 (which is in pari material with Section 393 (3) CA 2016) had held that:- “The section is remedial. It was introduced into the 1965 Act to remedy the grave injustice that exists at common law (which term I use to include the doctrines and principles of equity). At common law, a receiver and manager appointed under a power conferred by a debenture does not stand in a fiduciary position to the borrower company over whose property and affairs he exercises control. Nor does he or she owe any general duty to the borrower company. See, Re B Johnson & Co (Builders) Ltd [1955] 1 Ch D

634. His or her primary duty is to the debenture holder. See,Roberto Building Material Pte Ltd v. Oversea-Chinese Banking Corp (No. 2) [2003] 3 SLR 217. (It is to be noted, however, that s. 192(2) of the Singapore Companies Act was not referred to the Court of Appeal by counsel on either side in that **Note : Serial number will be used to verify the originality of this document via eFILING portal 21 case.) Such a receiver and manager is also not an officer of the borrower company as defined by s. 4(1)(b) of the 1965 Act. See, K Balasubramaniam, Liquidator for Kosmopolitan Credit & Leasing Sdn Bhd (in liquidation) v. Mbf Finance Bhd [2005] 1 CLJ 793. That means that he or she does not come within s. 305(1) of the 1965 Act to which I will refer shortly. So, at common law, a receiver and manager appointed under a debenture could destroy the borrower company in all sorts of ways and there is nothing that the shareholders or creditors or the liquidator of that company could do. They are helpless. Section 192(2) remedies that by introducing a cause of action that did not previously exist. Being a remedial provision, it is to be interpreted liberally in favour of those in whose favour it operates. See, Willis v. Willis [1941] 1 LNS 117; [1941] MLJ 169. … The words in the above quoted passage upon which I have placed emphasis are what set s.305(1) apart from s.192(2). Whereas the former merely provides a summary method of enforcing pre-existing rights, the latter is remedial in that it creates a new right - a new cause of action - that never existed before. It is therefore my judgment that great caution should be taken when referring to cases decided under s. 305(1) or its equipollent provision in other Commonwealth statutes because those cases are not dealing with a remedial provision. Returning to the present case, it cannot by any stretch of the imagination be said that penalising the receivers and managers for doing an act, namely selling and transferring the subject land, they were not entitled in law to do is hardly an interference with their function. If that were so every wrongdoer will have a carte blanche. So there is really no interference at all. It is only a question of making the wrongdoers accountable. And that is quite in order. **Note : Serial number will be used to verify the originality of this document via eFILING portal 22 Secondly, no question of imperilling the appellant's assets arises here. Quite the opposite. If the appellant's summons proceeds to trial and terminates in the appellant's favour, then the subject land returns to the appellant. There is a benefit to the appellant and no peril to the asset.”

44. Upon careful perusal of Enclosure 1, this Court also finds that the Applicants have clearly pleaded material facts capable of supporting a reasonable cause of action that cannot be summarily dismissed via R1’s striking out application in Enclosure 29.

45. Now, even if there was indeed a failure on the part of the Applicants to cite the relevant provision of law in the intitulement to Enclosure 1, R1 had failed to explain in what way are they being prejudiced by the said omission. Apart from such omission is capable of being rectified by way of amendment, it appears to this Court that R1 is fully aware of the nature and substance of the Applicants complaints in Enclosure 1.

46. In this procedural regard, element of surprise to the other side is of paramount consideration. Reference is made to Cheow Chew Khoon (t/a Cathay Hotel) v Abdul Johari Abdul Rahman [1995] 1 MLJ 457 where the Court of Appeal at page 477 held that:- "In my judgment, this matter, which is a point of practice and procedure, is to be resolved by reference to the fundamental principle that a party must not take his opponent or the court **Note : Serial number will be used to verify the originality of this document via eFILING portal 23 by surprise It is my opinion that an originating process requiring an intitulement must state, with sufficient particularity, either in its heading or in its body, the statute or rule of court under which the court is being moved; otherwise it would be an embarrassing pleading and may be liable to be struck out, unless sooner amended. "

47. In sum, the contention by R1 that the Applicants have no locus standi against is misconceived, and so I hold. Forum

48. Another basis for the striking out is a forum issue raised by R1. It is alleged that Enclosure 1 is wrongly initiated by the Applicants at the Civil Division of the High Court here whereas the proper forum should be the Winding Up Court.

49. On this point, this Court is of the view that this issue ought to be canvassed during the hearing of Enclosure 1 itself. As what was said earlier during the introduction, the Applicants in Enclosure 1 had firstly sought leave to initiate this proceeding against the Respondents.

50. During the hearing of the leave, the Respondents surely have every right to oppose such leave on whatever grounds the Respondents think available to them. The Applicants then would **Note : Serial number will be used to verify the originality of this document via eFILING portal 24 have the opportunity to reply and pray for the necessary order or directions from the Court in the event objections on wrong forum is indeed sustain by the Court.

51. It must be borne in mind that the High Court has the necessary powers to deal with matters in relation to the liquidation of R5’s assets and to examine the conduct of receivers and managers of R5. Reference is hereby made to Section 511 CA 2016 (which is in pari materia with Section 277 (5) Companies Act 1965) which states that:- “The Court may require any contributory, trustee, receiver, banker, agent or officer of the company to pay, deliver, convey, surrender or transfer to the liquidator or interim liquidator forthwith or within such time as the Court directs any money, property, books and papers in his hands to which the company is prima facie entitled.”

52. In N Chanthiran Nagappan v Kao Che Jen [2023] 7 CLJ 677 the Federal Court had held as follows:- “[45] This subsection therefore statutorily recognises that it is the winding up court that retains control over liquidators and that any complaint by any creditor or contributory warrants an inquiry into the matter. It is clear from all these provisions that any application to remove a liquidator can only be undertaken by a court, that too the winding up court that appointed him as the liquidator in the first place. The single issue is therefore whether the court is to undertake a prima facie assessment of the significance of the complaint and then proceed to hear the matter in full, namely by the grant of leave, or whether the court is bound to undertake a full **Note : Serial number will be used to verify the originality of this document via eFILING portal 25 investigation into each and every complaint of contributories and creditors when a complaint is levelled against a liquidator. In both instances, the matter is before the winding up court. It is simply whether the requirement for leave as a first step or as an initial requirement is envisaged under these statutory provisions or not.”

53. Thus, on the strength of the dicta by the Federal Court in N Chanthiran above, and pursuant to established legal principles that striking out is only for plain and obviously unsustainable cases, I hold that it is not fit and suitable for Enclosure 1 to be struck out solely on the wrong forum issue at this juncture.

54. In addition, should the Court upon hearing the leave applied for by the Applicants think that this matter should be heard and determined by the winding up court, it is open for the Applicants or even the Respondents to apply for the matter to be transferred to the appropriate court. Such power to transfer is provided for under O.57, r.1(2) ROC which provides as follows:- “57(1) Where the Judge of the High Court or a Judge of the Sessions Court or a Magistrate is satisfied that any proceedings in that Court can be more conveniently or fairly tried in some other Court of co-ordinate jurisdiction, he may on application by any party, order the proceedings to be transferred to the other Court.”

55. Since the jurisdictions conferred to all High Courts are similar, the divisions of the High Courts be it Family, Commercial, Civil, Criminal, Constructions, or others including winding up courts are **Note : Serial number will be used to verify the originality of this document via eFILING portal 26 all set up for convenience of administration and must be regarded at most as procedural. In this regard, I am in agreement with the decision by another High Court in Sivasubramaniam Sivayogarajasingam & Anor v Saumian Sivayogarajasingam & Ors [2023] 7 CLJ 929 where it was held as follows:- “[35] There is no statutory provision to limit the judge-to-judge transfer of cases to only situations of branch-to-branch transfer, or division-to-division transfer, or locality-to-locality transfer. The statutory provisions in O. 57 r. 1(2) provides for judge-to-judge transfer in the High Court, and one cannot add word thereto to limit its scope, nor to introduce extraneous criterion of branch-to-branch transfer or division-to-division transfer or locality-to-locality transfer. This is particularly the legal position as the word "branch", "locality" or "division" does not appear anywhere in the CJA 1964 or the ROC

2012. In other words, the sum total of case transfer powers of a Judge of the High Court is that a Judge of the High Court has the statutory power to transfer a case before him/her to another Judge of the High Court within the territorial jurisdiction of the High Court, irrespective of whether the other judge of the High Court is located at the same or different branch, division or locality as long as the other branch, division or locality where the transferee-judge sits is within the same territorial jurisdiction as that of the transferor-judge. [36] By reason of the above, this court respectfully disagrees with the High Court's decision in Koh Heng Jin Holdings Sdn Bhd & Anor v. Lee Quan Yoong & Anor. It is the decision of this court that a Judge of the High Court of Malaya has the statutory power to transfer a case before him/her to another judge of the High Court of Malaya, irrespective of whether the other Judge of the High Court of Malaya is located at the same or different branch, division or locality as long as the other branch, division or locality where the transferee-judge sits is within Malaya (ie, West Malaysia). This court agrees with the observation of the learned judge in para. [32] of the judgment in MTD **Note : Serial number will be used to verify the originality of this document via eFILING portal 27 Captial Bhd v. Tan Sri Dr Azmil Khalili Dato' Khalid [2020] 2 CLJ 677; [2020] 8 MLJ 252 that the High Court has power to make such an order to transfer proceedings to another court that is located within the very same branch, though this court's reasons are different. This court's reasons are by virtue of the interpretation of the statutory provisions, and are not related to the question of whether the results are congruous or incongruous.” Conclusion

56. Based on the reasons as stated above, Enclosure 29 is thus dismissed with costs of RM5,000.00 to be paid by R1 to the Applicants subject to allocator fee. Dated: 14.04.2026 …………………………………………. (NOOR HISHAM BIN ISMAIL) JUDGE HIGH COURT, JOHOR BAHRU Solicitors for the Applicants: Messrs Chuah Qian & Partners Petaling Jaya Selangor Darul Ehsan Solicitors for the 1st Respondent: Messrs Jal & Lim Petaling Jaya, Selangor Darul Ehsan **Note : Serial number will be used to verify the originality of this document via eFILING portal 28 **Note : Serial number will be used to verify the originality of this document via eFILING portal