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1 DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TAKZIM, MALAYSIA GUAMAN SIVIL NO: JA-22NCC-57-08/2023
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JA-22NCC-57-08/2023
High Court of Malaysia19 May 2024
The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.
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1 DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TAKZIM, MALAYSIA GUAMAN SIVIL NO: JA-22NCC-57-08/2023
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LEE NYOK PENG ... PLAINTIF-PLAINTIF
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LIM TIAN HUAT (sebagai Penerima dan Pengurus Eco Homes
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CHIANG TENG GUAN (sebagai Penerima dan Pengurus Eco Homes
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ECO HOMES BUILDER SDN. BHD. (Dalam Penerimaan) [No. Syarikat: 933858-V]
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RHB BANK BERHAD (No. Syarikat: 196501000373 (6171-M)) ... DEFENDAN-DEFENDAN S/N o4hqm6FJb0myqV2a6DSaRw GROUNDS OF JUDGMENT Introduction [1] These are three interlocutory applications filed by the parties, before this Court, and they are as follows: -
a
Enclosure 4 – application by the Plaintiffs for an injunction to restrain the Defendants from dealing with 15 lots of land being the subject matter of sales and purchase between the Plaintiffs and the 3rd Defendant pending the disposal of the main suit herein (Note: the Plaintiffs obtained an ex-parte ad interim injunction on 28.08.2023);
b
Enclosure 37 – application by the 1st, 2nd and 3rd Defendants to strike out the Plaintiffs’ main suit herein under O.18, r.19(1)(b) and (d) of Rules of Court 2012; and
c
Enclosure 56 – application by the 4th Defendant to strike out the Plaintiffs’ main suit herein under O.18, r.19(1)(b) and (d) of Rules of Court 2012. [2] By consent of the parties, the ex-parte ad interim injunction granted earlier for Encl. 4 was extended until the disposal of Encl. 37 and Encl. 56 which were fixed to be heard together since both applications are of similar nature. [3] On 19.05.2024, this Court delivered its decision for Encl. 37 and Encl. 56 as follows: - S/N o4hqm6FJb0myqV2a6DSaRw
a
Encl. 37 was allowed only in respect of the 1st and 2nd Defendants’ application whereby the Plaintiffs’ action against the 1st and 2nd Defendant is struck out with costs of RM15,000.00; whereas the 3rd Defendant’s application to strike out the Plaintiffs’ action is dismissed with costs of RM7,500.00; and
b
Encl. 56 was allowed whereby the Plaintiffs’ action against the 4th Defendant is struck out with costs of RM15,000.00. [4]
Preamble
Pursuant to the above said decisions, this Court on the same date had called up Encl. 4 for the purpose of it being dismissed and the ex-parte ad interim injunction being terminated on the ground that it had then became academic. [5] The Plaintiffs have since filed their appeals against the abovesaid decisions, and the followings are Court’s grounds of judgment for the said decisions. The factual background [6] The main suit filed via Writ and Statement of Claim herein was originally between the Plaintiffs and the 1st, 2nd and 3rd Defendants. The 4th Defendant was only added after it had successfully intervened and there was no appeal filed by any party against the Court order for such. [7] The undisputed facts would show that the Plaintiffs are the purchasers of 15 units of double-storey shop offices (“the subject properties”) sold by the 3rd Defendant as the vendor. S/N o4hqm6FJb0myqV2a6DSaRw [8] To that end, the Plaintiffs and the 3rd Defendant had executed various Sales and Purchase Agreements, all in the month of July year 2020 (“the SPAs”) and had each paid 10% deposit to the 3rd Defendant during the signing of the SPAs. Since then however, there were no progress claim made by the 3rd Defendant for the purpose of completion of the SPAs. [9] The subject properties are part of the 107 units of double-storey shop offices also being constructed by the 3rd Defendant as the developer in a development project situated somewhere at Bandar Kulai Jaya, Kulai, Johor (“the Project”). [10] The 4th Defendant is a licensed bank who had earlier in the year 2017 granted term loans facilities to the 3rd Defendant in the tune of RM12,000,000.00. [11] As security for the said loans, a Debenture was issued whereby the 4th Defendant as the debenture holder was given a fixed and floating charges over the undertakings and assets of the 3rd Defendant, both present and future. The said Debenture and the legal charges created thereunder were duly registered with Land Registry and Companies Commission Malaysia (“CCM”) respectively. [12] It is not in dispute that the 15 units of shop houses purchased by the Plaintiffs are part of the 3rd Defendant’s lands in the legal charges created under the said Debenture. [13] Due to 3rd Defendant’s default in repayment, the 4th Defendant on 10.1.2023 recalled the term loan facilities and subsequently S/N o4hqm6FJb0myqV2a6DSaRw exercised their powers under the Debenture to appoint the 1st and 2nd Defendants as the joint and several Receivers and Managers (“R&M”) of all the properties, assets, and undertakings of the 3rd Defendant. [14] On or around 26.6.2023, acting on their authority and powers as receivers and managers, the R&M advertised the charged lands for sale via open tender on an “as-is-where-is” and “en-bloc” basis in various local newspapers. [15] On 10.7.2023, the R&M advertised the Notice of Appointment of R&M in various local newspapers (The Sun, Sinar Harian and Nanyang Siang Pau) and invited anyone who has a claim over the properties of the 3rd Defendant to submit their claim before 28.7.2023. The R&M did not receive any claim from anyone. [16] Instead, the Plaintiffs filed this main claiming for the following reliefs:-
a
a declaration that the SPAs are valid and enforceable;
b
a declaration that the Plaintiffs are the beneficial owners of the subject properties;
c
an order that the subject properties be exempted from the lists of assets to be auctioned by the Defendants;
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an injunction to restrain the Defendants from taking further steps to auction the subject properties;
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or in the alternative, special and general damages to be awarded to the Plaintiffs; and
f
interests and costs. S/N o4hqm6FJb0myqV2a6DSaRw [17] As indicated earlier, the Court had granted an ex-parte ad-interim injunction for Encl.4 pending the disposal of same by way of inter-parte. Striking Out Applications – Encl. 37 and Encl. [18] In essence, both Encl. 37 and Encl. 56 are couched on the same contention, i.e. that the Plaintiffs did not acquire any legal or beneficial interest in the subject properties due to failure of the 3rd Defendant to obtain consent from the 4th Defendant prior to or after the sales of the subject properties to the Plaintiffs which is contrary to the terms in the Debenture and the legal charges created thereunder. Decisions for Encl. 37 and Encl. [19] Firstly, it needs to be mentioned that the law governing a striking out application under O. 18 r. 19, Rules of Court 2012 is well-settled. The Court will only strike out a claim if it is plainly and obviously unsustainable [see: Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 37] [20] Upon perusals of the Debenture and the legal charges (see exhibits “A-4” for the Debenture and “A-3” for the land charges in the Affidavit in Support affirmed on 29.9.2023 by Lai Chwen Huey for the 4th Defendant – Enclosure 57), this Court finds that it is indeed an express term that during the continuance of the Debenture and the legal charges, the 3rd Defendant shall not sell, transfer, charge, or otherwise howsoever deal with the charged properties (which S/N o4hqm6FJb0myqV2a6DSaRw include the subject properties) or any part thereof or any interest therein without prior written consent of the 4th Defendant. [21] From the evidence, there seems to be no evidence to the contrary proffered by the Plaintiffs to this Court on the said no consent from the 4th Defendant. [22] Further, the Plaintiffs only each paid 10% deposit of the purchase price which do not make them in law to be the beneficial owners of the subject properties or the Defendants as bare trustees of the subject properties [see: Lim Geok Boon v Loo Teck Huat & Ors
2021
9 MLJ 75]. [23] On the Plaintiffs contentions that they were ever ready to pay for the balance of the purchase price and it is not of their faults when the 3rd Defendant did not make any progress claim for the same, this Court is of the view that such situation does not change or negate the rights of the 4th Defendant under the Debenture and as chargee of the subject properties since the SPAs were executed without the consent of the 4th Defendant in the first place. [24] What more, the Plaintiffs have full knowledge at the time of signing of the SPAs that the subject properties are charged to the 4th Defendant as evident from the one of the Preambles in the SPAs which states as follows: - "AND WHEREAS the said Land is currently charged to RHB BANK BERHAD (CO. NO. 6171-M), a company incorporated under the Laws of Malaysia with its business office at 2nd Floor, No. 35 & 3 7, Jalan Permas 1012, Bandar Baru Permas Jaya, S/N o4hqm6FJb0myqV2a6DSaRw 81750 Masai, Johar as security for the loan granted to the Vendor;”. [25] Based on the above, this Court is in agreement with the submissions by counsel for the Defendants that the SPAs do not confer any rights or interests over the subject properties to the Plaintiffs to act against the Defendants in the instant action. The authority in support of that position can be found in the case of Buxton & Anor v Supreme Finance (M) Bhd [1992] 2 MLJ 481 where it was held by the Supreme Court (as it then was) that: - “We are unable to accept this contention. As no written consent was obtained by the chargor before the sale of Apartments 2A and 2B to the appellants, it cannot confer any rights or interests in the appellants against the respondent …”. [26] The above issue, in the Court’s view, is purely a question of law which can be decided based on the undisputed facts and contemporaneous documents as exhibited in the affidavits used for the purpose of hearing of Encl.37 and Encl. 56. [27] In the circumstances, there is plainly no need for this matter to proceed to a trial as oral evidence of witnesses is no longer wanting or required otherwise than what has already been obtained on the issue (see: Pengiran Othman Shah bin Pengiran Mohd Yusoff & Anor v Karambunai Resorts Sdn Bhd (formerly known as Lipkland (Sabah) Sdn Bhd) & Ors (1996) 1 MLJ 309]. [28] Having said that however, this Court recognized that in so far as the 1st, 2nd and 4th Defendants are concerned, matters relating to the charges of the subject properties are per rem in its nature. On the S/N o4hqm6FJb0myqV2a6DSaRw said basis, the same treatment cannot be given to the 3rd Defendant being vendor of the subject properties vis-a vis the SPAs, thus contractually the sale and purchase transactions are matters that can still be dealt with on an in personam basis. [29] In view of such, this Court allowed the 4th Defendant’s application in Encl. 56 leading to Plaintiffs’ main suit against the 4th Defendant being struck out with costs of RM15,000.00 subject to payment of the usual allocator fees. [30] Whereas, in respect of Encl. 37, this Court only allowed Encl. 37 as applied by the 1st and 2nd Defendant with costs of RM15,000.00 but dismissed the application by the 3rd Defendant with costs of RM7,500.00. Thus, the main suit against the 1st and 2nd Defendant was also struck out. Both costs are subject to payment of the usual allocator fees. [31] Finally, the main suit against by the Plaintiffs against the 3rd Defendant is to proceed wherein the Plaintiffs are given liberty to make the necessary amendments to their plaints to reflect the nature of their monetary claim in personam against the 3rd Defendant. Decisions for Encl. [32] In view of the abovesaid decisions on Encl. 37 and Encl. 56, this Court is of the opinion that the Plaintiff’s application in Encl. 4 is no longer relevant or necessary to be heard inter-parte since it has already becoming academic. As such, Encl. 4 is dismissed and the S/N o4hqm6FJb0myqV2a6DSaRw ex-parte ad interim order granted earlier is terminated with no order as to costs. Dated: 4th JUNE 2025 …………………………………………. (NOOR HISHAM BIN ISMAIL) Judge High Court, Johor Bahru Solicitor for the Plaintiffs: Mohammad Syahmi bin Nawawi Messrs Azwad Ihsan & Co. No. 05-01, Jalan Padi Emas 1/5, UDA Business Centre, Bandar Baru Uda, 81200 Johor Bahru, Johor. Solicitor for the Defendants (No. 1, 2 & 3): Lau Kee Sern together with Vynny Wong Yee and Nur Ashira Messrs Kee Sern, Siu & Huey No. 468-11E (2), 2ND Floor, Block C, Rivercity, Jalan Sultan Azlan Shah, 51200 Kuala Lumpur., Solicitors for the Defendant (No. 4): Lim Jun Xian together with Chia Oh Sheng Messrs Kee Sern, Siu & Huey 31A, Jalan 10/1A, USJ Taipan, 47620 Subang Jaya. Selangor. Solicitor for Intervener Messrs Lee Hishammuddin Allen & Gledhill Level 6, Menara 1 Dutamas, Solaris Dutamas, No. 1, Jalan Dutamas 1, 50480 Kuala Lumpur. S/N o4hqm6FJb0myqV2a6DSaRw Cases referred to:
1
Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 37 2. Lim Geok Boon v Loo Teck Huat & Ors (2021) 9 MLJ 75;
3
Buxton & Anor v Supreme Finance (M) Bhd [1992] 2 MLJ 481;
4
Pengiran Othman Shah bin Pengiran Mohd Yusoff & Anor v Karambunai Resorts Sdn Bhd (formerly known as Lipkland (Sabah) Sdn Bhd) & Ors
1996
1 MLJ 309. S/N o4hqm6FJb0myqV2a6DSaRw
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