Peng Wei v Ambang International Sdn Bhd (WA-22NCvC-631-11/2023)

PENG WEI (No. Pasport: EG6218108)

WANG YAZHOU (No. Pasport: EE0032591) … PLAINTIF-PLAINTIF

AMBANG INTERNATIONAL SDN BHD (No. Pendaftaran: 201901024595

MOH HIONG HUA (No. K/P: 890906-13-6471)

ZHANG GENLIN (No. Pasport: E21844877) …DEFENDAN-DEFENDAN 14/05/2024 12:26:08 WA-22NCvC-631-11/2023 Kand. 41 S/N 01okOa4O1U5u7slzlrxqw GROUNDS OF JUDGEMENT (ENCLOSURE 4) INTRODUCTION [1] This is an application by the Plaintiffs for-

Prohibition of the Second Defendant (D2) and the Third Defendant (D3) from exiting Malaysia; and

Directing the Defendants to remit RM3,000,000.00 to the Court as security funds pursuant to Rule 29 Rule 2(3) of the Rules of Court 2012. Cause Papers [2] The cause papers are-

Writ of Summons dated 10th November 2023 (Enclosure 1);

Statement of Claim dated 10th November 2023 (Enclosure 2); S/N 01okOa4O1U5u7slzlrxqw

Notice of Application made by the Plaintiffs to restrain the Second Defendant and Third Defendant from leaving

Affidavit in Support affirmed by the First Plaintiff on 23rd November 2023 to support the Notice of Application (Enclosure 5);

Defence dated 22nd January 2024 (Enclosure 10);

Affidavit in Reply affirmed by D2 on 22nd January 2024 to answer the Affidavit in Support (Enclosure 11);

Notice to Produce Documents Referred to in Pleadings or Affidavit dated 2nd February 2024 (Enclosure 12);

Reply to Defence dated 8th February 2024 (Enclosure 13);

Affidavit in Reply affirmed by the First Plaintiff on 7th February 2024 to answer the Defendants’ Affidavit in Reply (Enclosure 14); and

Affidavit in Reply affirmed by D2 on 16th February 2024 to answer the Plaintiffs’ Affidavit in Reply (Enclosure 15). S/N 01okOa4O1U5u7slzlrxqw Case Background The Plaintiffs’ Version [3] In 2020, the Plaintiffs became acquainted with D3 through a friend in China. D3 told the Plaintiffs that he could assist in purchasing properties in Malaysia. [4] Based on trust, the Plaintiffs transferred money to D3, expecting that D3 would utilize the money to pay for the purchase price of the properties in Malaysia. [5] Thereafter, the First Defendant (D1) and Ambang Wawasan Properties Development Sdn Bhd (Ambang Wawasan) will issue official receipts to the Plaintiffs. All these official receipts will be signed by D2. [6] Subsequently, four (4) sale and purchase agreements were signed by the Plaintiffs with the following parties-No.

Desaria Property Sdn Bhd (Developer) Peng Wei (First Plaintiff) D-23-2, The Manor RM1,821,200.00 S/N 01okOa4O1U5u7slzlrxqw

Desaria Property Sdn Bhd (Developer) Peng Wei (First Plaintiff) F-26-2, The Manor RM2,990,200.00

Ambang International Sdn Bhd (First Defendant) Peng Wei (First Plaintiff) Titian Sama Sdn Bhd (Developer) Parcel No. 9-13A, Parc 3 RM1,000,110.00

Ambang International Sdn Bhd (First Defendant) Wang YaZhou (Second Plaintiff) Titian Sama Sdn Bhd (Developer) Parcel No. 26-09, Parc 3 RM1,000,130.00 [7] The Plaintiffs paid a sum of RM6,459,975.20 to D1 and/or Ambang Wawasan. Through a letter of acknowledgement and rebate letter, the Defendants have agreed that the amount of RM6,459,975.20 is sufficient to pay for all the four properties. [8] In 2023, the 1st Plaintiff came to Malaysia, and was informed that D1 and/or Ambang Wawasan had not made full payment of the purchase price to Desaria Property Sdn. Bhd. and Titian Sama Sdn. Bhd. (Developers). S/N 01okOa4O1U5u7slzlrxqw [9] Further, D2 and D3 have not make the full payment of the purchase price to the Developers, despite several efforts made by the 1st Plaintiff for them to do so. Instead, they acknowledged that they do not have sufficient money to pay the Developers. [10] On 3 November 2023, the Plaintiffs’ solicitors conducted a CCM search over the names of D1 and Ambang Wawasan and issued a letter of demand to D1 requesting for full payments to be paid to the Developers. [11] Subsequently, the Plaintiffs found out that-

Ambang Wawasan had been dissolved;

D1’s registered address had been closed; and

D1’s business address is a residential address. [12] The 1st Plaintiff then lodged a police report for potential misuse of funds and/or involvement in criminal breach of trust and/or fraud by the Defendants. [13] The Plaintiffs are concerned that the D2 and D3 may flee Malaysia and relocate to a foreign country. S/N 01okOa4O1U5u7slzlrxqw The Defendants’ Version [14] D1 is in the business of marketing and sales of properties undertaken by Malaysian developers to foreigners, in particular buyers from China. D1 was incorporated in July 2019 who succeeded the business operations of Ambang Wawasan Properties Development Sdn Bhd which was incorporated in March 2013. [15] D2 is the director of the D1. D2’s wife, one Ren YuLing is a Chinese national. Both are ordinarily residing in Malaysia. [16] D3 and his wife, Ouyang Ping are both Chinese nationals who are Malaysia My Second Home visa holders. Both are ordinarily residing in Malaysia. [17] D1 promotes Malaysian properties in China through its network of contacts. Once there is a confirmed China national buyer for a particular property, D1 will arrange to execute the sale and purchase agreement directly with the developer concerned. [18] The 1st Plaintiff signed the sale and purchase agreements for the two

Units in the development known as “The Manor” directly with the developer, Desaria Property Sdn Bhd. S/N 01okOa4O1U5u7slzlrxqw [19] Desaria has expressly authorised D1 to sell and collect the purchase price on their behalf which, Desaria will pay D1 a commission. Desaria currently owes D1 an accumulated commission exceeding RM1.8 Million. [20] Meanwhile, if the sale price for the Unit is below the minimum threshold of RM1million and there is an interested Purchaser, D1 will first sign the sale and purchase agreement for the Unit with the developer. Then sign a back-to-back sale and purchase agreement with the Purchaser to sell the Unit with add-ons, on a fully furnished basis, to the Purchaser at a price above RM1million. [21] Hence, in the present case, D1 initially entered into sale and purchase agreements for the 2 Units in the development known as “Residensi Parc 3” with the developer, Titian Sama Sdn Bhd (Titian Sama). Then, signed back-to-back sale and purchase agreements for the two (2) Units with add-ons, on a fully furnished basis, with the Plaintiffs. [22] Due to the China monetary control policy where it is difficult for individuals to remit monies of out China, the Purchasers would pay and deposit the purchase price for their respective units into Ren YuLing, D3 and/or Ouyang Ping’s bank accounts in China. D3 will then arrange through S/N 01okOa4O1U5u7slzlrxqw an intermediary to remit the purchase price received to D1’s account in Malaysia. To be paid to the respective developers as and when the progress payments for the Units are due. Receipts are issued by D1 to the Purchasers. [23] D1 contended that it has fulfilled its obligations to the 1st Plaintiff as follows-

The full purchase price for unit D-23-2 has been paid to Desaria by the D1. The 1st Plaintiff has in fact taken vacant possession of the same and together with the Plaintiffs’ children are residing in the same; and

65% of the purchase price for unit F-26-2 has been paid to Desaria by the 1st Defendant. Desaria is authorised to deduct from the commission owing to the 1st Defendant to off-set and account for the balance 35% of the purchase price. Hence, the 1st Plaintiff is entitled to take vacant possession of unit F-26-2 from Desaria. S/N 01okOa4O1U5u7slzlrxqw [24] China’s financial regulatory authority discovered the large sums of monies deposited into Ren YuLing, D3’s and/or Ouyang Ping’s accounts and proceeded to freeze these accounts. [25] D1 has paid about 70% of the purchase prices for the 2 Units to Titian Sama. This is despite a substantial part of the Plaintiffs’ payments for the 2 Units in “Residensi Parc 3” were caught and frozen in China. As a result, D1 was unable to pay the balance progress payments for the 2 Units, and consequently, Titian Sama has forfeited the same. [26] Due to the unforeseen circumstances, the 1st Plaintiff had agreed to give D1, one (1) year to make the refund. FINDINGS AND ANALYSIS Interlocutory Injunction [27] Enclosure 4 was premised on Order 29 of the Rules of Court 2012 (ROC 2012) which is a provision on interlocutory injunctions. It provides-ORDER 29 INTERLOCUTORY INJUNCTIONS, INTERIM PRESERVATION OF PROPERTY Application for injunction (O. 29, r. 1) S/N 01okOa4O1U5u7slzlrxqw

(1) An application for the grant of an injunction may be made by any party to a cause or matter before or after the trial of the cause or matter, whether or not a claim for the injunction was included in that party’s originating process, counterclaim or third party notice, as the case may be. [28] Hence, O29 ROC 2012 provides that an interim injunction or an interlocutory (temporary) injunction is an order against a legal entity directing them to do or not to do a specified act or acts until the determination of the plaintiff’s claim at full trial. It may be granted at any stage of a suit (Bank Islam Malaysia Berhad v Tinta Press [1986] 1 MLJ 256, Karuppannan s/o Chellapan v Balakrishnan s/o Subban [1994] 3 MLJ 584; [1994] 4 CLJ 479; [1994] 3 AMR 2279). [29] In addition, section 51 of the Specific Relief Act 1950 (SRA) provides for two (2) types of injunctions, namely temporary injunction and perpetual injunction. [30] Accordingly, section 52(1) of SRA provides that a perpetual injunction may be granted to prevent the breach of an obligation existing in favour of the applicant. [31] Generally, a prohibitory injunction order is an order restraining the defendant from doing something (Section 52 of the Specific Relief Act 1950; S/N 01okOa4O1U5u7slzlrxqw Gibb & Co. v Malaysia Building Society Bhd [1982] 1 MLJ 271; Victoria Enterprise v Chin Wei Yoon [2005] 2 MLJ 743). [32] In granting an interim injunction, the following matters must be considered (Bench Book, Civil Procedure (3rd edition)-

the plaintiff’s claim against the defendant must disclose a bona fide serious issue to be tried. Plaintiff is to show locus. At this interlocutory stage, the court is not required to make a final determination on the merits of the claim or the rights of the parties;

the court must then consider where the justice of the case lies. In determining where the justice of the case lies, the court must consider (1) the harm that the injunction would produce by its grant; and (2) the harm that would result from its refusal, and to a conclusion as to which party would suffer greater injustice. In determining this, the court must consider whether damages would constitute an adequate remedy in respect of the plaintiff’s claim. If damages are adequate, the court should not grant an injunction order;

If the relevant factors are evenly balanced, the court should maintain the status quo.

An interlocutory mandatory injunction should only be granted in an “unusually strong and clear” or “unusually sharp and clear”.” [33] In most circumstances, the Plaintiff is usually expected to provide an undertaking as to damages. It may be stated in the application itself or in the affidavit in support but an undertaking is not a mandatory requirement S/N 01okOa4O1U5u7slzlrxqw for an injunction (Dato’ Tan Toh Hua v Tan Toh Hong & Ors [2001] 1 MLJ 369; [2001] 1 CLJ 732, Cheng Hang Guan & Ors v Perumahan Farlim (Penang) Sdn Bhd & Ors [1988] 1 MLRH 132; [1988] 3 MLJ 90; [1998] 1 CLJ (Rep) 435, Pengkalen Securities Sdn Bhd v Leow Li Lain [1996] 3 MLRH 463; [1997] 5 CLJ 440). [34] In Dato’ Tan Toh Hua (supra), the Court of Appeal held- “[10] As to the issue of the petitioners' failure to provide an undertaking as to damages, we agree with Edgar Joseph Jr J (as he then was) when in the case of Cheng Hang Guan & Ors v. Perumahan Farlim (Penang) Sdn Bhd & Ors [1988] 1 MLRH 132; [1988] 3 MLJ 90; [1998] 1 CLJ (Rep) 435 he said: In any event, the court will not generally deny a plaintiff an interlocutory injunction to which he would otherwise be entitled simply on the ground that his cross undertaking in damages would be of limited or of no value. So, for example, in Allen v. Jambo Holdings Ltd. the Court of Appeal held, when granting a Mareva injunction, that a cross undertaking was acceptable from the plaintiffs although he was legally aided. The rationale behind this was that questions of financial ability ought not to affect the position in regard to what is the essential justice of the case. [11] In fact the case of Pengkalen Securities Sdn Bhd v. Leow Li Lain [1996] 3 MLRH 463; [1997] 5 CLJ 440 held that it was not necessary for the plaintiff to give an undertaking as to damages since the injustice that could be caused to the plaintiff was very great if the injunction was not allowed. We would hold the same view in the light of the facts and circumstances existing in this appeal.”. S/N 01okOa4O1U5u7slzlrxqw [35] In ESPL (M) Sdn Bhd v Radio & General Engineering Sdn Bhd [2005] 2 MLJ 422; [2004] 4 CLJ 674; [2004] 6 AMR 119, the Court of Appeal held that the requirements for an application for a mandatory injunction are the same as those for an application for a prohibitory injunction. There are Issues to Be Tried [36] This Court finds that it was not disputed that the Defendants have not paid the Developers in full. In fact, the Defendants admit their inability to pay due to insufficient funds. [37] The Defendants contended that the outstanding sum should be deducted from the full purchase price for unit D-23-2 in the Manor, for which the Plaintiffs have taken vacant possession, and that 65% of the purchase price for unit F-26-2 has been paid. [38] It was also not disputed that the 1st Plaintiff has taken vacant possession from Desaria Property Sdn Bhd but the Plaintiffs contended that the property has yet to be registered under the 1st Plaintiff’s name as the balance of the purchase price has not been paid. On the other hand, the S/N 01okOa4O1U5u7slzlrxqw Defendants contended that there is no outstanding amount due to be paid to Desaria Property Sdn. Bhd based on the letter dated 31-01-2024. [39] The Plaintiffs further contended that they have no knowledge that D1 initially entered into the sale and purchase agreements with Titian Sama Sdn Bhd. [40] The defence raised by the Defendant is that, one of the Developers, Desaria Property Sdn. Bhd. owes D1 an accumulated commission exceeding RM1.8000,000.00. This has been denied by Desaria Property Sdn. Bhd in a letter dated 31-01-2024 to the Plaintiffs’ solicitors which expressly stated that “there is no outstanding entitlements payable to AWPD”. AWPD refers to Ambang Wawasan. [41] The Defendants also raised in their defence that the Defendants’ bank account was frozen by China’s financial regulatory authority, prompting the Plaintiffs to allow them a year to make the refund. [42] Obviously, these issues are still unanswered. These issues remain to be heard, during the trial of this case. S/N 01okOa4O1U5u7slzlrxqw Balance of Convenience [43] As a matter of consideration, the Court will look at the facts when assessing an injunction application, as established in the case of Pertama Cabaret Nite Club Sdn Bhd v Roman Tam [1981] 1 MLJ 149. [44] Therefore, based on the facts, it was evident that one the Defendants is a foreign national and that the spouses of D2 and D3 are too. This is a matter of concern for the Plaintiffs of the possibilities for them to leave Malaysia to avoid the proceedings in court. Notably, in Pertama Cabaret Nite Club (supra), the Respondent was not a resident of this country and it was held to be unrealistic to suppose that the Appellants would be sufficiently compensated by monetary damages. Furthermore, the amount involved is RM6,459,975.20, which is a substantial amount that is at stake, and so, there is a possibility that D2 and D3 might leave the country. [45] The Defendants acknowledged receiving the full purchase price from the Plaintiffs. Additionally, they admitted their inability to pay the Developers due to insufficient funds as their accounts were frozen in China. [46] This Court upon considering and taking into account all the relevant matters, including the practical realities of this case by weighing the harm S/N 01okOa4O1U5u7slzlrxqw that this interlocutory injunction would produce if granted, against the harm that would result from its refusal, comes to the conclusion that the Plaintiffs would suffer greater injustice if relief is withheld, thus, the Plaintiffs would be entitled for the injunction. [47] Having regard to the above observations, it can be seen of the possibilities if the Plaintiffs fail at the trial, all that the Defendants would suffer because of the injunction is that they would not be able to leave Malaysia (and as submitted by the learned counsel for the Defendants that they are residing in Malaysia and Malaysia as their second home, thus benefit the stay) and costs of the litigation and at the other end, if the injunction is refused and the Plaintiffs should succeed in their claim, they would suffer loss and inconvenience if the Defendants fled, which in such case, more injustice would be done to the Plaintiffs. [48] As such, this Court finds that it would be just and equitable that the Plaintiff's interest be protected by immediate issue of an injunction, otherwise irreparable injury and inconvenience would result (Gibb & Co v Malaysia Building Society Bhd [1982] 1 MLRA 283; [1982] 1 MLJ 271; [1982] CLJ 99, and Shepherd Homes Ltd v Sandham [1970] 3 All ER 402; [1971] 1 Ch 340). S/N 01okOa4O1U5u7slzlrxqw [49] This Court also finds that the amount of RM100,000.00 is a reasonable amount considering the amount in dispute is substantial. O29 R2(3) provides that “Where the right of any party to a specific fund is in dispute in a cause or matter, the Court may, on the application of a party to the cause or matter, order the fund to be paid into Court or otherwise secured.”. CONCLUSION [50] Order in terms of prayer (a) of Enclosure 4 and RM100,000.00 to be deposited in court as security funds under O29 R2(3) ROC 2012. (DR. SUZANA BINTI MUHAMAD SAID) JUDICIAL COMMISSIONER OF THE HIGH COURT NCVC 1 Kuala Lumpur Court. Dated: 13 May 2024 S/N 01okOa4O1U5u7slzlrxqw COUNSELS For the Plaintiff TETUAN KASSIM TADIN, WAI & CO Unit No. 8-3A, 3rd Mile Square No. 151, Jalan Klang Lama Batu 3 ½, 58000, Kuala Lumpur. For the Defendant TETUAN S B CHEAH & ASSOCIATES Unit 8-16-2, Menara Mutiara Bangsar Jalan Liku, Off Jalan Riong Bangsar, 59100 Kuala Lumpur. S/N 01okOa4O1U5u7slzlrxqw