1. ) Seacera Group Berhad v 1. ) Ismail Bin Othman (BA-22NCvC-420-10/2020)

This is an application by the 2nd, 4th and 5th Defendants for summary 28 judgment of their Amended Counterclaim against the Plaintiff for the 29 following sums : 30 23/08/2022 13:08:45 BA-22NCvC-420-10/2020 Kand. 90 S/N zJHTgIra3EGEgkhdcoUjqw

RM663,356.15 (2nd Defendant)

RM4 million (4th Defendant)

RM3.5 million (5th Defendant) 3 4

I have dismissed the application. These are the full reasons for my 5 decision. 6 7 Salient Background Facts 8

On 16.11.2016, a Share Sales Agreement (SSA) was entered into 9 between the Plaintiffs, the 1st Defendant, Ismail b Othman (Ismail) and 10 Zainab bt Mansor (Zainab). Pursuant to the SSA Ismail and Zainab agreed 11 to sell their shares in a company named Duta Nilai Holdings Sdn Bhd to 12 the 2nd Plaintiff for the total purchase price of RM165,100,000.00. 13 14

Payment was to be effected by way of transfer of 90,000,000 new 15 ordinary shares in the 1st Plaintiff to be issued to Ismail and Zainab at an 16 issue price of RM1.00 per share and the balance of the purchase price in 17 the sum of RM75,100,000.00 shall be payable by the 2nd Plaintiff in 18 instalments in the manner as set out in Schedule 4 of the SSA. 19 20

Thereafter Ismail assigned and transferred the following sums being 21 debt due from the 1st Plaintiff pursuant to the SSA :

RM6,500,000.00 to the 2nd Defendant;

(ii) RM6,000,000 to the 3rd Defendant;

(iii) RM4,000,000 to the 4th Defendant; and 25

(iv) RM3,500,000 to the 5th Defendant. 26 27

On 16.1.2019 the Plaintiffs entered into 4 Debt Settlement 28 Agreements with the 2nd to 5th Defendants respectively to settle the above 29 debts assigned by Ismail to these Defendants. In each of the Debt 30 S/N zJHTgIra3EGEgkhdcoUjqw Settlement Agreements it was agreed that the amount owing to each of 1 the individual Defendants concerned would be settled by way of shares 2 within a specified period. In the event of default, it was agreed that the 3 debts would become due and immediately repayable to the 2nd to 5th 4 Defendants. 5 6

The Plaintiffs failed to obtain the requisite shareholders’ approvals 7 to confirm the 4 Debt Settlement Agreement. On that score it was asserted 8 that the default was triggered and the amounts pursuant to the 4 Debt 9 Settlement Agreement became immediately due and repayable by the 10 Plaintiffs. 11 12

On 16.10.2020 the Plaintiffs filed this civil suit against the 13 Defendants alleging that the Debt Settlement Agreements are null and 14 void primarily for the reason that there was no consideration to support 15 the contracts. Alternatively, the Plaintiffs have contended that the Debt 16 Settlement Agreements are void as parties were under a mistake of fact 17 honestly believing that the assignments were valid and the balance 18 purchase price instalments had fallen due when they were not. 19 20

The 2nd to 5th Defendants thereupon reciprocated with a 21 counterclaim to claim for the debts owed and outstanding. 22 23

Prior to this action by the Plaintiffs and the Counterclaim by the 24 Defendants, the 2nd and 3rd Defendants had commenced and filed a 25 winding up petition and a civil suit respectively in the Kuala Lumpur High 26 Court as a result of the failure by the Plaintiffs to settle the respective sums 27 due to them. The proceedings that were filed are as follows :

Winding Up Petition No. : WA-28NCC-800-08/2019 by the 2nd 29 Defendant against the 2nd Plaintiff; 30 S/N zJHTgIra3EGEgkhdcoUjqw

Civil Suit No. : WA22 NCC-433-08/2019 by the 3rd Defendant 1 against the 2nd Plaintiff. 2 3

On 30.7.2021 the 2nd Plaintiff paid the principal sum of RM6.5 million 4 to the 2nd Defendant. There now only remain the interest sum accruing 5 (RM663,356.15) and which is now the subject of the 2nd Defendant’s 6 Amended counterclaim against the Plaintiffs. The Winding Up Petition in 7 the Kuala Lumpur High Court has since been withdrawn. 8 9

Meanwhile the civil suit filed by the 3rd Defendant in the KL High 10 Court went to full trial and on 4.1.2022 judgment in favour of the 3rd 11 Defendant was allowed in the sum of RM6 million with interest and costs. 12 13

It is not disputed that no appeal has been filed in the civil suit won 14 by the 3rd Defendant. 15 16 The Law and Contentions of Parties 17

The principles on summary judgement is well settled. It can only be 18 granted when the Defendants have no defence to a claim. Order 14 rule 19 1 of the Rules of Court 2012 states :- 20 21 “(1) when in an action to which this rule applies a statement of claim has 22 been served on a defendant and that defendant has entered an 23 appearance in the action, the Plaintiff may, on the ground that the 24 defendant has no defence to a claim included in the writ, or to a particular 25 part of such a claim, or has no defence to such a claim or part thereof 26 except as to the amount of any damages claimed, apply to the Court for 27 judgement against that defendant.” 28 29 S/N zJHTgIra3EGEgkhdcoUjqw

Further, according to Order 14 rule 3(1) ROC 2012, it stipulates that 1 a summary judgement should not be granted if there are triable issues or 2 questions in dispute which ought to be tried. 3 4

The rule applicable in a summary judgement application has been 5 explained and discussed in the oft-quoted case of National Company For 6 Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 CLJ 220 where the 7 Federal Court gave the following reminder : 8 9 “We think it appropriate to remind ourselves once again that in every 10 application under Order 14, the first consideration are (1) whether the 11 case comes within the Order and (2) whether the Plaintiff has satisfied 12 the preliminary requirements for proceeding under Order 14. For the 13 purposes of an application under Order 14, the preliminary requirements 14 are :

the defendant must have entered an appearance;

(ii) the statement of claim must have been served on the 17 Defendant; and 18

(iii) the Affidavit in support of the application must comply with 19 the requirements of Rule 2 of the Order 14. 20 …if the Plaintiff fails to satisfy either of these considerations, the 21 summons may be dismissed. If however, these considerations are 22 satisfied, the Plaintiff will have established a prima facie case and he 23 becomes entitled to judgment. The burden then shifts to the Defendant 24 to satisfy the Court why judgement should not be given against him [see 25 Order 14 Rules 3 and 4(1).” 26 27

Having given my consideration to the cause papers and the 28 submissions of learned counsel, I was satisfied that in the present case, 29 all the preliminary requirements referred to by the Federal Court in the 30 above mentioned case have been satisfied and there were no disputes 31 S/N zJHTgIra3EGEgkhdcoUjqw raised as such. Therefore, the burden shifts to the Plaintiffs to prove the 1 existence of a triable issue warranting a full trial to proceed. 2 3

It is trite that in order to determine whether an issue is triable or not, 4 evidence by way of affidavits will have to be examined. This was explained 5 in the case of Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 CLJ 6 14 (Rep) where the Supreme Court held : 7 8 “In our view, basic to the application of all those legal propositions, is the 9 requirement under O.14 for the court to be satisfied on affidavit evidence 10 that the defence has not only raised an issue but also that the said issue 11 is triable. The determination of whether an issue is or is not triable must 12 necessarily depend on the facts or the law arising from each case as 13 disclosed in the affidavit evidence before the court.” 14 15

What amounts to a triable defence simply means that it is for the 16 defendant to show on merits, he has a good defence to the claim or that 17 a difficult point of law is involved, or the dispute is as to the fact which is 18 to be tried or any other circumstances showing reasonable grounds of a 19 bona fide defence. 20 21

The 2nd, 4th and 5th Defendants claim that they are entitled to 22 summary judgement to be entered in their favour on the following grounds: 23 24

the 2nd Plaintiff paid the 2nd Defendant the principal amount of 25 RM6.5 million and therefore there has been accord and 26 satisfaction of the principal claim save for the interest accruing 27 thereon; 28 29

(ii) there is a final judgment after full trial in the civil suit in favour 30 of the 3rd Defendant in the KL High Court (i.e. the MDI Suit) for 31 S/N zJHTgIra3EGEgkhdcoUjqw the sum of RM6 million with interest and costs and therefore 1 res judicata/issue estoppel against the 2nd Defendant with 2 regards to the claim for interest and against the 4th and 5th 3 Defendants with regards to the amounts claimed against 4 them; 5 6

(iii) through the conduct of the Plaintiffs when they recognised the 7 2nd to 5th Defendants as creditors for the amounts claimed 8 under the 4 Debt Settlement Agreements and they consented 9 to these Defendants intervening in the debt restructure 10 exercise proceedings in SAHC OS No. BA-24NCC-143- 11 10/2019; and 12 13

(iv) the 2nd to 5th Defendants were allowed to intervene in a 14 subsequent debt restructuring exercise proceedings filed by 15 the Plaintiffs in SAHC OS No. BA-24NCC-141-12/2020. 16 17

The Plaintiffs disagree to the Defendants’ contentions and have 18 argued that they have an arguable defence to the 2nd, 4th and 5th 19 Defendants’ counterclaim namely : 20 21

the question whether the doctrine of res Judicata/Issue 22 estoppel applies is in itself a question that must be determined 23 in a full trial; 24 25

(ii) whether res judicata or issue estoppel should be permitted to 26 bar the Plaintiffs’ claim is a question of fact requiring viva voce 27 evidence at trial; and 28 29 30 S/N zJHTgIra3EGEgkhdcoUjqw

(iii) whether the Debt Settlement Agreements are valid and 1 enforceable. 2 3 Findings of the Court 4

I will now consider the first issue raised by the Defendants and that 5 is whether Res Judicata/Issue Estoppel applies in this instant case. 6 7

Res Judicata has been explained in the Supreme Court case of Asia 8 Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd as follows : 9 10 “…it simply means a matter adjudged, and tis significance lies in its 11 effect of creating an estoppel per rem judicatem. When a matter 12 between two parties has been adjudicated by a court of competent 13 jurisdiction, the parties and their privies are not permitted to litigate once 14 more the res judicata, because the judgement becomes the truth 15 between such parties, or in other words, the parties should accept it as 16 the truth; res judicata pro veritate accipitur. The public policy of the law 17 is that, it is in the public interest that there should be finality in 18 litigation…it is just that no one ought to be vexed twice for the same 19 cause of action….. 20 … 21 On the other hand, the issue estoppel literally means simply an issue 22 which a party is estopped from raising in a subsequent proceeding. 23 However, the issue estoppel, in a nutshell, from a consideration of case 24 law, means in law a lot more, i.e. that neither of the same parties or their 25 privies in a subsequent proceeding is entitled to challenge the 26 correctness of the decision of a precious final judgment in which they, or 27 their privies, were parties. This sounds like explaining a truism, but it is 28 the corollary from that statement that is all important and that could have 29 given birth to the controversies alluded to above; the corollary being that 30 either of such parties will be allowed of adduce evidence or advance any 31 argument to contradict such decision…” 32 33 S/N zJHTgIra3EGEgkhdcoUjqw

What the above decision translates to is that there are three basic 1 requirements to be fulfilled and if these 3 basic requirements are not 2 fulfilled that the doctrine of res judicate or issue estoppel cannot be 3 applied to the facts and issues at hand. The said 3 basic requirements are 4 whether the same question has been raised and decided, whether the 5 judicial decision said to create the estoppel was final and whether the 6 parties to the judicial decision or their privies were the same persons as 7 the parties to the proceedings in the instant suit before this court. 8 9

With regard to the winding up Petition filed by the 2nd Defendant, I 10 agree that with the 2nd Plaintiff having settled the full sum of RM6,500,000 11 there is accord and satisfaction and that res judicata or issue estoppel 12 applies for the said sum. However, it has been brought to the attention of 13 this Court that the terms of the Order recorded before the KL High Court 14 on 2.8.2021 makes provision that it shall not prejudice the rights of the 15 Plaintiffs in this instant suit. The pertinent part of the Order of Court dated 16 2.8.2021 is reproduced below : 17 18 “(2) the Winding-up Petition under Enclosure 1 be withdrawn by the 19 petitioner without liberty to file any further petition for the sum of 20 RM6,500,000.00 and without prejudice to the Respondent’s rights in 21 the Shah Alam High Court Civil Suit No: BA22NCVC-420-10/2020”. 22 23

Based on the specific terms of the Order of Court as stated above, 24 I accept the Plaintiff’s contention that the application of res judicata and 25 issue estoppel for the spill over on the claim for interest is misplaced and 26 does not arise. 27 28

Apart from that, the question that requires judicial appreciation and 29 scrutiny would certainly be whether the 2nd Defendant is entitled to 30 S/N zJHTgIra3EGEgkhdcoUjqw interest. This is indeed a triable issue because at first blush there seems 1 to be no provision in the Debt Settlement Agreement which provides for 2 the conferment of interest on the sum to which consent judgement was 3 recorded. 4 5

Moving on to the contention that the same issues raised here for 6 determination had already been raised and put before the KL High court 7 and a decision in favour of the 3rd Defendant had been obtained. The 8 Defendants’ contentions are not tenable. A close scrutiny of the cause 9 papers would reveal that the 2nd, 4th and 5th Defendants are not parties to 10 the MDI suit at the KL High Court and neither is the 1st Plaintiff a party to 11 that suit. There is no denying the fact that there were objections raised to 12 the application for the transfer of the MDI suit to this court and since it was 13 not transferred that excuse cannot be used to state that there are no 14 triable issues in this instant case. 15 16

There is no uncontroverted evidence before this court that there is 17 a connection between the 3rd Defendant on one part with that of the 2nd, 18 4th and 5th Defendants on the other part. Is there privity of contract 19 between all the named Defendants? These are triable issues that would 20 require a full trial to be conducted in order to come to a fair and just 21 conclusion. Support for this stand can be found in the case quoted by 22 counsel for the Plaintiffs i.e. in Gleeson v J Wippell & Co Ltd [1977] 1 23 WLR 510 where the Privy Council held that for the doctrine of estoppel to 24 be available to a non-party to an earlier suit it must be established that 25 there exists privity between the non-party to the earlier suit and a party to 26 the instant suit. 27 28

I believe that the issue here would have been quite easily resolved 29 had there been a reference by deponents to the affidavits filed herein 30 S/N zJHTgIra3EGEgkhdcoUjqw affirming to the fact that there is indeed privity of interest between the 3rd 1 Defendant on one hand and the other Defendants on the other. I would 2 respectfully say that this in itself is a pertinent point and it boils down to a 3 question of fact that ought to and can only be determined through a full 4 trial with vive voce evidence adduced. In the circumstances I am doubtful 5 that the doctrine of res judicata or issue estoppel in the true sense of its 6 meaning as spelt out in those laid down in Asia Commercial Finance 7 (supra) would apply to this case. 8 9

The next question for me to consider is whether the inclusion by 10 consent of the 2nd, 4th and 5th Defendants to intervene in OS 143 would 11 bring on the inference that the Plaintiff had by their conduct recognised 12 that the 2nd, 4th and 5th Defendants are creditors for the amounts claimed 13 under the Debt Settlement Agreements. Similarly, for OS 141 where the 14 2nd, 4th and 5th Defendants were allowed to intervene and be recognised 15 as valid creditors of the Plaintiffs. I held the view then and still do that 16 those were merely interlocutory events. By no means did it deal with or 17 determine the rights of the parties to the scheme of arrangement. More 18 pertinently it goes without saying that interlocutory decisions do not give 19 rise to res judicata as they do not decide the rights of the parties with 20 finality. 21 22 Conclusion 23

In the circumstances I am of the considered view that the Plaintiffs 24 have succeeded in raising triable issues in regard to the counterclaim filed 25 by the 2nd, 4th and 5th Defendants. I am aware that at this stage the 26 Plaintiffs are not required to show a complete defence. All the Plaintiffs 27 have to do is to show that that there is an arguable defence for the 28 summary judgement to be disallowed. I am of the view that they have 29 succeeded in doing so. 30 S/N zJHTgIra3EGEgkhdcoUjqw

In conclusion based on all the reasons set out above, I am of the 1 considered view that this is not a suitable case for the granting of summary 2 judgment. Therefore, the application in Encl. 50 is dismissed with costs. 3 4 Dated 10 August 2022. 5 6 7 8 (JULIE LACK) 9 Judge 10 High Court of Malaya 11 Shah Alam, Selangor Darul Ehsan 12 13 14 15 16 17 18 19 20 21 22 Counsel 23 For the Plaintiff : 24 Alex Tan Chie Sian with Law Yen Yue 25 (MESSRS. WONG KIAN KHEONG) 26 27 For the Defendant : 28 Renu Zechariah with Cheryl Kwan Chui Yi 29 (MESSRS. ROSLEY ZECHARIAH) 30 S/N zJHTgIra3EGEgkhdcoUjqw