1. Twt Hardware Sdn Bhd v Rhb Bank (24-65-01/2013)

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ELITPROP SDN BHD …PLAINTIFFS 2 AND RHB BANK …DEFENDANT GROUNDS OF JUDGMENT (Enclosures 20 & 23) A. INTRODUCTION [1] Enclosures 20 and 23 are appeals to the Judge in Chambers against the decisions made by the learned Deputy Registrar (DR) on 23.12.2015. [2] Both appeals had arose from two separate Originating Summons namely; Originating Summons No. 24-62-01/2013 and Originating Summons No. 24-65-01/2013. The two originating summons filed by all the Plaintiffs concern a private caveat lodged on a piece of land held under HS(D) 222965, PT No. 8659 Pekan Baru Sungai Buloh, Daerah Petaling, Negeri Selangor together with a two and a half storey bungalow erected thereon (“the said caveat”) by RHB Bank, the Defendant in both cases. 3 [3] The parties in Originating Summons No. 24-62-01/2013 are namely; the 1st Plaintiff (Ng Tim Foo), the 2nd Plaintiff (Tan Hoi Wah) and the 3rd Plaintiff (Elitprop Sdn Bhd). This action was initiated against RHB Bank (the Defendant). [4] While in Originating Summons No. 24-65-01/2013, the Plaintiffs are TWT Hardware Sdn Bhd (1st Plaintiff) and Elitprop Sdn Bhd (2nd Plaintiff). RHB Bank was also the Defendant in this action. [5] In both originating summonses, the Plaintiffs sought for the removal of the said caveat. [6] The DR had earlier allowed Elitprop Sdn Bhd (the 3rd Plaintif in OS 62 & also the 2nd Plaintiff in OS 65)’s applications in Enclosure 13 and Enclosure 14 respectively for an extension of time to file its notice for directions pursuant to Order 37 r 1 of the Rules of Court 2012 pursuant to the assessment of damages as ordered by the Court of Appeal on 21.5.2014. 4 [7] At the outset, parties had agreed that this Court’s decision in Enclosure 20 (OS 65) would bind Enclosure 23 in OS 62. B. BACKGROUND FACTS [8] The background facts which gave rise to both of the appeals are as follows:

8.1 On 5.9.2009 Elitprop Sdn Bhd (Elitprop) had purchased the said property from a company known as Janavista Sdn Bhd at a purchase price of RM 300,313.30. Thereafter Elitprop was then registered as the registered owner of the property. The said property was part of the 6 abandoned bungalow units that Elitprop had purchased with the view to undertake the construction, completion and sale of the six

units.

8.2 Elitprop successfully completed the construction of the six

units and thereafter on 26.07.2012, the relevant 5 authorities had issued Certificate of Fitness to each of the six bungalow units.

8.3 On 28.6.2010, Elitprop had entered into a Sale & Purchase Agreement (“the 1st SPA) with Tan Hoi Wah (Tan) and Ng Tim Foo (Ng). By this 1st SPA, Tan and Ng agreed to purchase the said property at a purchase price of

8.4 To partially finance the purchase of the said Property, Tan and Ng had obtained a loan from Standard Chartered Bank Malaysia (“the Bank”).

8.5 Tan and Ng were then registered as the proprietor of the Property on 29.7.2011 and a charge was duly registered in favour of the Bank’s over the said Property on the same date.

8.6 The Bank had however failed / refused to disburse the loan sum of RM1,523,659.20 (being the balance purchase 6 price) to the Tan and Ng due the said caveat lodged by the Defendant on 25.8.2011.

8.7 The Defendant’s refusal to remove its caveat on the said property has led the Plaintiffs to commence an action against the Defendant vide OS 62 and OS 65 for removal of the said caveat.

8.8 The Plaintiffs’ Originating Summons was dismissed on 27.6.2013 by the High Court. The Plaintiffs had then appealed against the said decision to the Court of Appeal. On 21.5.2014, the Court of Appeal allowed the Plaintiffs’ appeal and ordered, inter alia, that the said caveat be removed and RHB Bank is to pay damages to the Plaintiffs for all loss and damage suffered by the Plaintiffs caused by the wrongful entry of the said caveat upon assessment.

8.9 Pursuant to the Court of Appeal’s order, the caveat was removed sometime on 25.9.2014 (four months after the Court of Appeal’s order. 7

8.10 The Plaintiffs claimed that although the said caveat had been removed, the bank loan could not be disbursed as the availability of the facility had lapsed (after 3 months). This left the SPA in a limbo.

8.11 The 1st Plaintiff and the 2nd Plaintiff agreed to terminate the 1st SPA and proceeded to enter into the Deed of Mutual Termination dated 11.3.2015 agreeing to transfer the Property to a new purchaser nominated by the 2nd Plaintiff and part purchase price previously paid by the 1st Plaintiff to be refunded.

8.12 The 2nd Plaintiff (Elitprop) claimed that it had to spend a sum of RM280,000.00 to restore the said property as it had dilapidated. After the restoration works completed, a new purchaser was found and thereafter a sale and purchase agreement was entered on 4.9.2015 (“the 2nd SPA”) with the new purchaser. 8

8.13 The 2nd Plaintiff also claimed that due to the economic downturn it was forced to sell the said property at a lower price i.e at RM2,100,000.00. The new purchaser was registered as the proprietor of the said property on 27.11.2015.

8.14 After more than one and the half year (19 months) from the date of the decision of the Court of Appeal, on 23.12.2015

8.15The learned DR had allowed the Plaintiff’s applications, hence these appeals were filed by RHB Bank. [9] Order 37 rule 1 of the ROC 2012 reads: 9 “(1) Where judgement is given for damages to be assessed and no provision is made by the judgment as to how they are to be assessed, the damages shall, subject to the provisions of this Order, be assessed by the Registrar, and the party entitled to the benefit of the judgment shall, within one month from the date of the judgment, apply to the Registrar for directions and the provisions of Order 34 shall, with the necessary modifications, apply.” [10] Order 37 rule 1 of the ROC 2012 clearly stipulates that a party entitled for damages to be assessed by the Registrar is required to file their notice for directions within 1 month from the date of the judgment. [11] In the present case, the Plaintiff had obtained the judgment for damages to be assessed from the Court of Appeal on 21.5.2014. However, they had only filed its applications for extension of time to file the necessary Notice of Directions nineteen (19) months after the Court of Appeal’s order. [12] On the delay of 19 months in filing the application for extension of time, the RHB Bank took a strong objection and raised a prelimary objection that the Plaintiff’s application was clearly 10 filed outside the one month’s period stipulated under Order 37 rule

It was also contended on behalf of the RHB Bank that the word “shall” used in Order 37 rule 1 ROC prescribed mandatoriness and must strictly be complied with. The second preliminary objection raised by RHB Bank is that this application should be filed in the Court of Appeal and not in High Court Shah Alam. [13] To support the contention on the Plaintiff’s delay, the counsel for the Defendant drew this Court’s attention to the following cases: i. Koay Hean Khoon v. Abdul Jamil Abdul Mutalib & Anor [2015] 8 CLJ 410 it was held inter alia that:- “(4) There had been an inordinate delay on the part of the Plaintiff and it would be unjust and oppressive to extend time to enable the Plaintiff to assess damages after a lapse of 18 months and 18 days since the ROC came into force and 26 months since the date of the HC Order was made. Regardless of how blatant or contumelious or reprehensible the conduct of the Defendants was, there was no valid grounds for exercising the discretion to extend time in favour of the Plaintiff.” 11 ii. Perbadanan Nasional Insurans Sdn Bhd v. Pua Lai Ong [1996] 3 CLJ 321, the Court of Appeal has held the word “shall” connotes mandatoriness. “The word ‘must’ is equated in meaning to the word ‘shall’ and implies a peremptory mandate as opposed to a mere direction or discretion as the word ‘may’ implies.” iii. Khor Cheng Wah v. Sungai Way Leasing Sdn Bhd [1997] 1 CLJ 396, the Court of Appeal had emphasised the need of to act timeously in seeking judicial intervention. “It is a cardinal principle of law, that when a litigant seeks the intervention of the Court in a matter that affects his rights he must do so timeously. The maxim vigilantibus, non dormientibus, jura subveniunt, though having its origins in the Court of Chancery, is of universal application. Even in cases where a right is exercisable ex debito justitiae, a Court may refuse relief to an indolent litigant.” iv. Tetuan Sri Ling & Associates v. Lian Meng Wah [2015] 3 CLJ 63, the Court of Appeal held inter alia: “In the case of Duli Yang Amat Mulia Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj v Datuk Captain Hamzah Mohd Noor & Anor appeal [2009] 4 CLJ 329; [2009] 4 MLJ 149 the Federal Court held that there is a mandatory prerequisite, that should be complied with and non-compliance rendered the service defective. The Court in Aminah Abas v Pentadbir Tanah Daerah Kuantan [2004] 5 CLJ 1; [2003] 4 MLJ 669 and Low Cheng Soon v TA Securities Sdn Bhd 12 [2003] 1 CLJ 309; [2003] 1 MLJ 389 also gave similar interpretation to the word “shall” which means mandatory and not directory and that the word reflects a measure of mandatoriness in it.” [14] Although this Court is mindful that Order 37 rule 1 does prescribe that an application for notice of directions must be filed within one month from the date of the judgment and in prescribing time the word used is “shall” which connotes mandatoriness and the compliance with time frame is significantly important as emphasized by some of the authorities, however at the same time, this Court must also be minded that in our own ROC 2012, namely Order 3 rule 5 has vested upon all Courts a wide discretionary power with regard to extension or abridgement of time. [15] Order 3 rule 5 clearly provides: Extension of time (O.3, r. 5)

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The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorized by these Rules or by any judgment, order or direction, to 13 The law relating to an application for an extension of time [16] It is trite law that the granting of extension of time is always within the discretionary power of court. It is also trite law even though the Court's discretionary power to extend and/or abridge time is very wide but nevertherless it must be exercised judiciously based on established principles. (See i. Ratnam v. Cumarasamy & Anor [1964] 3 All ER 933. ii. Ong Guan Teck & Ors v. Hijjas [1982] 1 MLJ 105. iii. Punca Klasik Sdn Bhd v. Seok Kim Leow [1996] 5 MLJ 241. iv. Gan Hay Chong v Siow Kian Yuh & Anor [1975] 1 MLJ 41. v. Cheah Teong Tat v Ho Gee Seng & Ors [1974] 1 MLJ

31.) [17] Alauddin J (as his Lordship then was) in the case of Abdul Rahim Ponniah bin Abdullah v. Kulim Intensive Driving Centre Sdn. Bhd. [2000] 6 MLJ 584, held inter alia that : “…In exercising the discretion, the following factors will be considered (1) whether the delay caused by the defendant company unjustified or unreasonable (2) what are the reasons for the delay (3) whether the defence raised by the defendant company had any 14 merits; and (4) will the plaintiff prejudiced in any way should the application be granted.” [18] In the case of Abdul Hamid Mohd Amin v. Ramacon Corporation Sdn Bhd [2016] 3 CLJ 111, it was held inter alia: “An application for extension of time may be made even after the expiration of the relevant period stated in the Rules. In Thiruchelvasegaram Manickavasegar v. Mahadevi Nadchatiram [1998] 4 MLJ 297 the Court of Appeal held: Under O.3 r 5(1) and (2) of the Rules of the High Court 1980 (‘the RHC’), the court has jurisdiction to extend time even if the application is made after expiry of the period. The primary consideration in exercising discretion to extend time is whether the party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances.” [19] Mah Siew Seng & Anor v. Seema Development Sdn Bhd & Another case [2013] 8 CLJ 1058:- 15 “The Defendant was way past the deadline. There was no doubt that the court would have discretion to extend the time for such an application but cogent reasons must be given. The Defendant’s late application smacks of a lack of bona fide and an afterthought and was stained with scarlet from sitting and sleeping on its right. Such a long delay was deleterious and damaging to the Defendant. Clearly, if the Defendant itself had bothered to hound its solicitors on the progress of the case, it would not be haunted now by the lamentable lapses on the part of its solicitors. [20] Koay Hean Khoon v. Abdul Jamil Abdul Mutalib & Anor [2015] 8 CLJ 410 - “The plaintiff was only entitled to damages suffered or incurred up to the date of the HC order. The events complained by the plaintiff, which occurred after the date of the HC Order, gave rise to separate causes of action and for which the plaintiff was entitled to pursue separate legal action.” “There had been an inordinate delay on the part of the plaintiff and it would be unjust and oppressive to extend time to enable the plaintif to assess damages after a lapse of 18 months and 18 days since the ROC came into force and 26 months since the date of the HC Order was made. Regardless of how blatant or contumelious or reprehensible the conduct of the defendant was, there were no valid grounds for exercising the discretion to extend time in favour of the Plaintiff.” 16 [21] In Saeed U Khan v Lee Kok Hooi [2001] 5 MLJ 416, it was held that, the court should consider certain factors, when exercising its discretion to extend time, namely: (1) the delay in making an application; (2) whether or not there are cogent reasons for the litigant not to have made the application within the prescribed time; and, (3) the likelihood and degree of prejudice, as well as injustice to the opposite party should the court exercise its discretion. [22] In the present case, it was not disputed that the Plaintiff was clearly out of time. The Plaintiff sought from this Court an order for extension of time to file their notice of directions to seek the Registrar’s direction for the assessment of damages be carried out. [23] Guided by the well-settled and established principles, this Court shall now proceed to consider whether the Plaintiff’s application here warranted the exercise of discretionary power by this Court and whether the Plaintiff has successfuly afforded their reasons for delay to this Court’s satisfaction. 17 REASONS FOR DELAY [24] The 2nd Plaintiff (Elitprop)’s application for extension of time is supported by an affidavit in support affirmed by Woon Jing Yu, the Elitprop’s director (“Woon’s affidavit”) on 23 .12.2015. [25] At paragraph 19 of Woon’s affidavit, the reasons for the delay were set out as follows:

In the premises, the Plaintiffs wish to humbly seek for an extension of time for the purpose of filing the summons for directions on the following reasons:-

19.1 Had the Plaintiffs proceeded with assessment proceedings within a month from the Appeal Order, the Plaintiffs would not be able to confirm or show any loss or damage resulting from the caveat, which was at the most speculative at that point in time.

19.2 Had the 1st SPA been completed, there would not have been any loss due to the lower price obtained by the 2nd Plaintiff from the 2nd SPA. Alternatively, had the 2nd Plaintiff been able to dispose the Property at a higher price compared to the 1st SPA, there would also be no 18 loss and in fact, a profit to the Plaintiffs. As such, there was simply no way the Plaintiffs could predict the extent of the actual loss and damage caused by the Defendant’s wrongful entry of caveat at the point in time.

19.3 It is only with the confirmed sale and disposal of the Property to the new buyer that the actual loss suffered by the 2nd Plaintiff has crystallized. Once crystallized, the Plaintiffs are seeking for the assessment promptly in less than 1 month.

19.4 The Plaintiffs had no intention to flout or disobey any Order or Rules. However, they could not bring an application to the court at that point in time due to the extraneous reasons as stated above. Furthermore, the Plaintiffs had acted reasonably in attempting to mitigate the loss and damage suffered in the best possible way before seeking to commence the assessment proceeding and should not be penalized for it. [26] It was submitted for the Elitprop (Plaintiff) that the reason for filing of the application for extension of time 19 months from the 19 order of the Court of Appeal was because if Elitprop were to file the notice for directions under Order 37 rule 1 within the one month period from the order of the Court of Appeal, at that point in time the full extent of the loss and damage caused by the wrongful caveat had not been crystallized and any claim that they would put forward would have been speculative. And had the assessment of damages be carried out then, the Defendant would have argued that there were no losses suffered by the Plaintiff as the same cannot be proven by the Plaintiff. [27] It was also contended on behalf of the Plaintiff that had the 1st SPA been completed after the wrongful caveat was removed, there would not have been any loss due to the lower price obtained by the Plaintiff from the 2nd SPA, and the Plaintiff need not have to even proceeded to seek any damages from the Defendant. Alternatively, had the Plaintiff been able to dispose the Property at a higher price compared to the 1st SPA, there would also be no loss and in fact, garners profit to the Plaintiff. As such, there was simply no way the Plaintiff could predict the 20 extent of the actual loss and damage caused by the Defendant’s wrongful entry of caveat at the point in time. [28] The counsel for the Plaintiff also submitted that when the 2nd SPA was entered with the new purchaser on 4.9.2015 and the property was finally registered under the name of the new purchaser on 27.11.2015, the Plaintiff had filed this application on 23.12.2015 which was less than 1 month from the date of the conclusion of the 2nd SPA. The Plaintiff claimed that the Plaintiffs had therefore acted with reasonable promptitude. It was also further contended by the Plaintiff that they had to hold off their assessment of damages proceeding until the said property was sold off as to mitigate their losses. According to the Plaintiff, far from being prejudiced, the Defendant has in fact benefited from the Plaintiff’s act of mitigation. [29] To succeed in their application the Plaintiff must provide this Court with cogent reasons and satisfactory explanation on the reason their applications were not filed within the prescribed 21 time and why was there a delay of 19 months after the Court of Appeal’s order. [30] The procedural requirement of filing a notice of directions under Order 37 rule 1 is basically in place so that the conduct or the manner on how the assessment of damages should be carried out is clear to the parties and the manner of producing evidence whether by way of affidavit evidence or oral evidence is determined. It must be noted that hearing of an assessment of damages / assessment of damages procceedings may resemble that of a trial and thus the conduct or manner on which the proceedings to be carried out must first be determined to ensure the proceedings is conducted systematically within the confines of the directions given by the Registrar. This will also ensure that the parties will not be caught by surprise and the rules of natural justice are adhered to in the assessment of damages proceedings. [31] In the present case the Plaintiff did not comply with the requirement under Order 37 rule1 but instead 19 months later 22 filed the application and stated that they cannot file the Notice of Direction as required by the Order 37 on the grounds that if they were to file their notice within the one month, they would not be able to prove their losses yet as their losses had not yet crystallised. According to the Plaintiff, their losses were only cystallised when the property being the subject matter in the case on which the private caveat had been lodged by the RHB Bank was sold off and all the losses suffered or incurred by the Plaintiff can be accounted for. The Plaintifff claimed that due to the lodging of the caveat (even though the caveat had been removed four (4) months after the Court of Appeal’s order) the losses that they had suffered are amongst others; expenses on restoring the said property to its former condition as it had dilapidated, the caveat lodged had resulted in the 1st SPA could not be completed and thereafter mutually terminated as the financier had withdrawn the facility, the selling the said property with the new purchase (2nd SPA) was at a very much lower price because of the economic downturn the prices of properties had depreciated. 23 [32] As such the question this Court must now determine is whether the reasons afforded by the Plaintiff are cogent reasons and are satisfactory explanation of their delay. [33] With utmost respect to the counsel for the Plaintiff, the reasons given by the Plaintiff are simply unacceptable. This Court finds so because, if all parties are allowed to have their assessment of damages be carried out only upon the crystallization of their losses or upon the maximum losses being calculated this would give rise to absurdity and obvious contradiction against the trite principles of damages. [34] The principle underlying awarding of damages is well settled. (See: i. Halbutt’s Plasticine Ltd v Wayne Tank and Pump Co. Ltd. [1970] 1 All E.R. 225, Wildgerry LJ held as follows: “Each and every case depends on its own facts. It being remembered, first that the purpose of the award of damages is to restore the plaintiff to his position before the loss occurred or damage caused and secondly, that the plaintiff must act reasonably to mitigate the loss. If the article damaged is a motor car of popular make, the plaintiff cannot charge the defendant with the cost of repair when it is cheaper to buy a similar car in the market. On 24 the other hand, if no substitute for the damaged articles is available and no reasonable alternative can be provided, the plaintiff should be entitled to the cost of repair in the eye of law.”, ii. Lord Blackburn in Livingstone v Raywards Coal Co [1880] 5 App. Cas. 25 as per the following text: “I do not think there is any difference of opinion as to its being a general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation. See also: Datuk Mohd Ali bin Hj Abdul Majid & Anor (both practicing as Messrs Mohd Ali & Co) v Public Bank Bhd [2014] 4 MLJ 465,Tan Sri Khoo Teck Puat & Anor v Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777.) [35] This Court is of the view that when the ROC 2012 came into force on 1 August 2012, Order 37 rule 1 was amended and prescribed that the party entitled to the benefit of an order for damages to be assessed must apply to the Registrar within one month of the grant of the order for damages for directions for an 25 assessment of damages to be carried out. It was therefore the intention of the law namely; the Rules (ROC 2012) that in instances of infringement of rights against any parties, and that the innocent party suffers injuries, the damages suffered must be assessed as soon as possible. Thus, Order 37 rule 1 requires that the party entitled to benefit of the judgment (entitled to their damages being assessed) must file their notice of directions within one month from the judgment so that the assessment proceeding could be carried out immediately. This Court opines that the one month period stipulated by the ROC must be read to mean that the assessment of damages must be carried out expeditiously and without unnecessary delay. The time limitation was set to one month so that the damages suffered by the parties can be minimized and any other extenuating factors/circumtances which can aggravate the amount of losses suffered which would then be prejudicial to the Defendant can be avoided. [36] It has never been the law’s intent to punish the Defendant or coerce the Defendant to pay a compensation which was 26 maximized as much as possible for the Defendant’s infringement of rights or wrongdoings. [37] This Court also opines that the delay in having the assessment of damages proceeding being carried out earlier is highly prejudicial to the Defendant. [38] This Court simply cannot allow such contention by the Plaintiff to become a precedent. There are great and imminent reasons behind the necessity of an expedient assessment of damages. [39] This Court is not going to sit idly by while the Plaintiff go about their way to crystallize whatever damages which were dependent on external factors or occurrence of events years after the Court of Appeal’s order. The economic downturn was not at all at the fault of the Defendant and the Defendant cannot simply be made responsible for the Plaintiff’s inability to sell the properties at a higher price during a worldwide spiraling down of the economy. 27 [40] The consequence if this Court were to allow the Plaintiff’s contention is absurd and unconscionable. Such precedent would leave immeasurable room for abuse and manipulation. Any litigant then, would pursue a paper judgment for breach of contract, and then wait for months until they can simply sell the property at any low price. Subsequently, the litigant then would use the same contention to claim whatever ‘loss’ from the lower price against the Defendant who had for months had been prejudiced and had been put in a constant state of agitation of the litigation. [41] This Court shall not be any conduit to allow the Plaintiff to unduly profit from the litigation by having a shortcut to sell the property at a low price. If that shall be the case, then the Plaintiff are unduly allowed to not endeavor to diligently sell the properties at a high price at the expense of the Defendant who would be prejudiced by the Plaintiff’s ‘shortcut’. [42] Furthermore, even assuming that the assessment of damages was made in compliance with the rules, this Court does not 28 agree with the Plaintiffs that the Plaintiff would be left with no avenues at all to prove their losses. If indeed there is any economic downturn, and the Plaintiff stood to have their properties depreciated, having the 2nd Agreement is not the only gauge to measure such depreciation. The Plaintiff could have simply have the properties evaluated and ascertain the depreciation (if any). [43] There is no necessity at all for the Plaintiff to have this Court wait for 19 months for the Plaintiff to find a buyer to sell the properties at a lower price. Furthermore, the damages from the recovery of the properties from dilapidation could have been ascertained earlier. Any delays would only aggravate the dilapidation and depreciation of the Property. If indeed the Plaintiffs were sincere in their efforts of mitigation, the Plaintiff should and would have applied for directions for assessment of damages as soon as possible. [44] Considering the reasons afforded by the Plaintiff as to the delay in filing the application, the Court is therefore of the view that 29 the DR had erred in law in granting the Plaintiff an extension of time to file the requisite notice of diection under Order 37 rule 1. Hence the appeal is allowed with costs of RM 5000.00. [45] Since the parties had earlier agreed that the decision of this appeal is binding on the other appeal, thus Elitprop’s appeal in Enclosure 23 (OS 62) is also dismissed with costs of RM5000.00. ...................................................... (DATUK AZIMAH BINTI OMAR) High Court Judge High Court Shah Alam Selangor Darul Ehsan Dated the 09th January of 2017 For the Plaintiff - Messrs S Mathews & Associates Ms Ashwin Kumar For the Defendants -