BANK PEMBANGUNAN MALAYSIA BERHAD v Sidqi Ahmad Said Bin Ahmad (WA-22NCC-264-06/2022)

SIDQI AHMAD SAID BIN AHMAD

SHAILEN A/L POPATLAL

WAN ALIAS BIN WAN NGAH

ROSLINA BINTI IBRAHIM (NRIC NO.: 640723-05-5896)

ABDUL WAHID BIN ABDUL GHANI

MOHD RADZI BIN MOHAMED

MUHAMMAD SHAZHAKIM BIN SHAZARUL HISHAM

SHAZA ARINA BINTI SHAZARUL HISHAM

MUSTAFA ALI ZAMINALI SAYED

WONG CHEE KEONG (NRIC NO.: 530409-08-5395) S/N wjqIyk/Km0WXchfQx8/Jmg

ABD. HADI BIN ABD. MAJID

TUNKU MAZLINA BINTI TUNKU ABD AZIZ

RANJEET SINGH SIDHU

NOORUSA’ADAH BINTI OTHMAN

PANEAGLE HOLDINGS BERHAD (COMPANY NO.: 199601028840

PANEAGLE SDN. BHD. (COMPANY NO.: 199401021754

VCB INVESTMENT BERHAD (COMPANY NO.: 201001024441

OPEN FIBRE SDN. BHD. (COMPANY NO.: 200701025088

PRIMAWIN LIMITED (COMPANY NO.: 1017308)

CHINA FINANCE LIMITED

HADRON EQUITIES LIMITED (FORMERLY KNOWN AS ARAB EMIRATES CAPITAL LIMITED)

ORIENT TELECOMS SDN. BHD. (COMPANY NO.: 201801000440

SILVER RIDGE HOLDINGS BHD. (COMPANY NO.: 200401029277

BVS TRINITY SDN. BHD. (COMPANY NO.: 199901017411 S/N wjqIyk/Km0WXchfQx8/Jmg

VCB MALAYSIA BHD. (COMPANY NO.: 199901018565

ZAVARCO PLC

NO.: 07687158) SILVER RIDGE SDN BHD (COMPANY NO.: 199201020641

IZLIN BINTI ISMAIL (NRIC NO.: 720526-02-5030) (as joint administrators of the estate of MOHD ZAFER MOHD HASHIM

MUHAMMAD RADZI BIN MOHD ZAFER (NRIC NO.: 970814-87-5015) (as joint administrators of the estate of MOHD ZAFER MOHD HASHIM

ZAKARIA BIN SAAD (NRIC NO.: 570818-07-5565) ...DEFENDANTS JUDGMENT [1] This judgment concerns an application under Order 33 of the Rules of Court 2012 to determine several questions as preliminary issues before trial. The underlying suit involves claims arising from an RM400 million loan facility granted by a bank to a borrower for the development of a fiber optic network project. The loan was disbursed in two tranches in 2012 and 2013, but default occurred leading to a summary judgment being obtained against the borrower in separate S/N wjqIyk/Km0WXchfQx8/Jmg proceedings. Following investigations by a receiver and manager appointed over the borrower’s assets, allegations of fraud, conspiracy, bribery and breach of duties emerged against various parties involved in the loan transaction. The bank commenced this action seeking proprietary and other remedies against multiple defendants, including claims based on Quistclose Trust, dishonest assistance and knowing receipt. The application seeks to determine as preliminary issues questions concerning civil courts’ jurisdiction over bribery claims, the effect of a regulatory body’s ‘no further action’ decision, the doctrine of election between remedies, the requirements of Quistclose Trust, and issues of tracing commingled funds. These questions touch upon significant points of civil procedure and substantive law, particularly the intersection between criminal and civil jurisdiction, and the requirements for maintaining trust-based and proprietary claims. The determination of this application requires consideration of whether the proposed preliminary questions would achieve substantial saving of time and costs, and whether there remain disputed facts requiring ventilation at trial. The resolution of these issues will have important implications for the conduct of the main action and the scope of matters to be determined at trial. Background facts [2] The present application involves Bank Pembangunan Malaysia Berhad as Plaintiff and several Defendants S/N wjqIyk/Km0WXchfQx8/Jmg including Wan Alias Bin Wan Ngah (3rd Defendant), Abdul Wahid Bin Abdul Ghani (5th Defendant), Tunku Mazlina Binti Tunku Abd Aziz (12th Defendant), Paneagle Holdings Berhad (15th Defendant), Paneagle Sdn. Bhd. (16th Defendant), Open Fibre Sdn. Bhd. (18th Defendant), and Zavarco PLC (26th Defendant) (“the Applicants”). The 3rd Defendant is also a director of the 18th Defendant. [3] The case concerns a term loan facility granted by the Plaintiff to Aries Telecoms (M) Berhad (“Aries”) pursuant to a Facility Agreement dated 28.6.2012 (“Loan Agreement”). Under the Loan Agreement, the Plaintiff provided a loan sum of RM400,000,000.00 (“Loan Sum”) to Aries. [4] The Loan Sum was disbursed in two tranches: the first tranche of RM200,000,000.00 was disbursed on 2.7.2012, and the second tranche of RM200,000,000.00 was disbursed on 15.11.2013. According to the Plaintiff’s Repayment Schedule as at 13.1.2016, Aries made several installment payments towards repayment of the Loan Agreement up to Installment No. 7, totaling approximately RM95.7 million. [5] Aries’ audited financial statements, audited by Messrs. UHY, showed total revenue from 2010 to 2016 of RM644,580,829. The annual revenue figures were: RM30,412,924 (FY2010), RM48,512,832 (FY2011), RM56,488,093 (FY2012), RM62,796,308 (FY2013), RM103,183,645 (FY2014), RM148,240,323 (FY2015), and S/N wjqIyk/Km0WXchfQx8/Jmg RM194,946,704 (FY2016). A Certificate of Acceptance was issued to Paneagle Holdings Berhad, the 16th Defendant, on 8.10.2013. [6] In March 2021, the Malaysian Anti-Corruption Commission (“MACC”) commenced an investigation regarding certain matters related to the loan facility. On 20.7.2022, Mohd Zafer Mohd Hashim (“Dato’ Zafer”), the Plaintiff’s President and Group Managing Director from 05.08.2009 until his resignation on 25.07.2014, who was previously the first defendant in this action, passed away. [7] Prior to the current proceedings, the Plaintiff had brought a suit against Aries in Kuala Lumpur High Court Suit No. WA- 22NCC-313-07/2018 (“Suit 313”) for recovery of amounts due under the Loan Agreement. In Suit 313, the Plaintiff claimed RM451,266,763.13, comprising principal (RM386,870,939.07), interest (RM50,493,919.50), and late payment charges (RM13,901,904.56). [8] On 9.5.2019, the High Court entered summary judgment against Aries in Suit 313 for RM451,266,763.13. Aries appealed to the Court of Appeal, but the appeal was dismissed on 25.11.2021. Aries then applied for leave to appeal to the Federal Court, but this application was dismissed on 25.4.2022. S/N wjqIyk/Km0WXchfQx8/Jmg [9] The Plaintiff subsequently took steps to execute the Suit 313 judgment through garnishee proceedings (Kuala Lumpur High Court Execution No. WA-37G-110-06/2022) and by issuing a statutory notice of demand pursuant to Section 466(1)(a) of the Companies Act 2016. [10] The Plaintiff filed this suit (Suit WA-22NCC-264-06/2022) in June 2022 against 30 defendants, including the Applicants (the 3rd, 5th, 12th, 15th, 16th, 18th and 26th Defendants), for fraud, conspiracy, breach of duties, and misappropriation of loan funds. The total claim amount is RM564,991,617.25, which represents the Plaintiff’s losses from the term loan facility originally granted to Aries. Of this amount, RM386,870,939.07 represents the principal sum and RM50,493,919.50 represents interest - both of which were previously claimed in an earlier suit (Suit 313) against Aries alone. In addition to these amounts, the Plaintiff is now claiming late payment charges of RM124,007,418.86 and additional charges of RM1,003,037.56. Unlike Suit 313 which was focused on loan recovery from the borrower, the current action targets multiple parties allegedly involved in a complex scheme to defraud the bank through misrepresentation, conspiracy, and misappropriation of the loan funds. [11] Following Dato’ Zafer’s passing, on 13.12.2022, the High Court allowed the administrators of his estate - Izlin Binti Ismail and Muhammad Radzi Bin Mohd Zafer - to be added S/N wjqIyk/Km0WXchfQx8/Jmg as parties to the present suit as the 28th and 29th Defendants respectively. [12] The 26th Defendant, Zavarco PLC, was incorporated on 29.6.2011. Prior to the first tranche disbursement, Zavarco PLC had entered into a Memorandum of Understanding dated 18.4.2012 with Huawei China, which was supposed to translate into a Design, Build and Managed Service Agreement between both parties. The requirement for this Design, Build and Managed Service Agreement was temporarily waived five days before the first tranche of the Loan Sum was disbursed to Aries. Enclosure 444 [13] The application in Enclosure 444 is made by the Applicants pursuant to Order 33 rules 2, 3(2) and 5 of the Rules of Court 2012 and/or the inherent jurisdiction of the High Court. The Defendants are seeking leave for certain questions to be tried in advance of the full trial of the action, along with necessary directions for the trial of these questions and liberty to apply for specific directions upon conclusion of the preliminary trial. [14] The Questions to be Tried in Advance as they appear in Enclosure 444 are: “1. Whether the civil courts have jurisdiction to determine or declare that a criminal wrong, in this case the offence of bribery, has been committed? S/N wjqIyk/Km0WXchfQx8/Jmg a. If the answer is in the negative, whether the pleaded causes of action and/or allegations by the Plaintiff against the 3rd, 5th, 12th, 15th, 16th, 18th and 26th Defendants are unsustainable and/or ought to be struck out?

Whether a determination by the civil courts of an allegation of bribery may be made, particularly concerning Mohd Zafer Mohd Hashim (previously, the 1st Defendant), the 2nd and the 4th Defendants, given the conclusion by the Malaysian Anti-Corruption Commission ("MACC") of "No Further Action" (NFA) with regard to the same allegations of bribery and the unavailability of Mohd Zafer Mohd Hashim to give evidence on such allegations? a. If the answer is in the negative, whether the pleaded causes of action and/or allegations by the Plaintiff against the 3rd, 5th, 12th, 15th, 16th, 18th and 26th Defendants are unsustainable and/or ought to be struck out?

Whether the Plaintiff, having elected to affirm and/or insist that the Facilities Agreement dated 28.06.2012 ("Loan Agreement") shall be performed by Aries Telecoms (M) Berhad ("Aries"), and that the Plaintiff shall be put in the position in which it would have been if the representations made had been true by suing upon and taking the judgment dated 9.05.2019 in Kuala Lumpur High Court Suit No. WA-22NCC-313-07/2018 ("Judgment") for repayment based on the terms of the Loan Agreement, and having opposed an appeal to the Court of Appeal against the Judgment and having opposed an application to the Federal Court for leave to appeal against that Judgment all of which were decided in favour of the Plaintiff, the Plaintiff can now in law pursue a cause of action of misrepresentation as pleaded at Part D.1 of the Amended Statement of Claim.

Whether a trustee under a Quistclose Trust must be the intended recipient of the subject monies for a specific purpose? a. Whether any other party in receipt of the alleged trust monies under a Quistclose Trust can, in law, be the trustee? S/N wjqIyk/Km0WXchfQx8/Jmg b. If not, whether such other recipient may, in law, be found to be in breach of trust?

Whether a Quistclose Trust can arise in law over monies disbursed by the Plaintiff into the banking account of Aries pursuant to the Loan Agreement when such loan monies have not been separated from the other funds of Aries in the banking account?

Whether the Plaintiff is entitled and able to trace as well as to establish the ownership of the monies paid to the Defendants in question when:- a. the loan sum was paid into Aries' operation account which was comingled with Aries' own funds at the material time? b. the loan sum was disbursed by the Plaintiff on 2.07.2012 and 15.11.2013 respectively as set out in paragraph 6 of the Amended Statement of Claim and the Plaintiff is seeking to trace monies paid out to the respective Defendants from 2012 to 2018? c. the monies sought to be traced by the Plaintiff is larger than the loan sum disbursed by the Plaintiff?

Whether there exists a valid cause of action against the 26th Defendant (Zavarco Plc) with regard to the matters alleged at paragraphs 168.1, 188 and 192 of the Amended Statement of Claim on misrepresentations and dishonest assistance alleged to have been made in Aries' financial statement for financial year ended 31.12.2010 when the 26th Defendant was only incorporated on 29.06.2011?” [15] The grounds for the application are that the Questions to be Tried in Advance would enable the just, expeditious and economical disposal of the proceedings as they could substantially narrow down and determine the real issues in the action. The Defendants argue these questions mainly involve objective facts rather than disputed documents, and their determination would significantly reduce the evidence S/N wjqIyk/Km0WXchfQx8/Jmg required at trial. However, the Plaintiff opposes the application, arguing it is an abuse of process as some issues overlap with earlier striking out applications, and contends these questions require full trial with evidence rather than preliminary determination. Submissions of the Applicants [16] The Applicants submit that Order 33 applications involve a two-stage process. At the first stage, the court must determine whether the questions posed should be tried before the trial proper. If so determined, the court then makes appropriate directions for the trial of those questions. The second stage involves the actual trial of the preliminary questions in accordance with those directions. [17] In advancing their position, the Applicants contend that the key consideration for allowing an Order 33 application is whether it will result in substantial saving of time and expenditure which would otherwise be expended if the action proceeds to full trial. They argue that this threshold requirement is met in the present case. [18] Central to the Applicants’ argument is that the Plaintiff’s entire case is fundamentally premised on the alleged bribery of RM8,000,000.00 received by the late Dato’ Zafer. It is their position that all other causes of action against the Defendants flow from and are intertwined with this S/N wjqIyk/Km0WXchfQx8/Jmg allegation of bribery. Therefore, if the bribery allegation falls, all other causes of action must necessarily fall as well. [19] The Applicants further maintain that civil courts lack jurisdiction to determine or declare that criminal wrongs have been committed. They emphasise that bribery is a criminal offence under the Malaysian Anti-Corruption Commission Act 2009, and that the MACC has already issued a “No Further Action” decision regarding the alleged bribery. Additionally, they point out that Dato’ Zafer’s death means he cannot give evidence at trial. [20] On the doctrine of election, the Applicants assert that having obtained and enforced judgment in Suit 313 based on the Loan Agreement, the Plaintiff cannot now take a contradictory position by claiming misrepresentation in the present proceedings. They argue this amounts to the Plaintiff attempting to approbate and reprobate at the same time. [21] Regarding the Quistclose Trust claim, the Applicants’ position is that only the intended recipient of monies for a specific purpose can be a trustee under such a trust. They contend that since the Defendants were not parties to the Loan Agreement, they cannot be trustees under any Quistclose Trust. [22] The Applicants also raise the issue of commingling of funds, arguing that once the Loan Sum was mixed with Aries’ other funds in its bank account, any trust that might have existed S/N wjqIyk/Km0WXchfQx8/Jmg was destroyed. They highlight that Aries’ total revenue between 2010 and 2016 was RM644,580,829, demonstrating substantial commingling with the Loan Sum of RM400,000,000. [23] Finally, with respect to the 26th Defendant (Zavarco PLC), the Applicants argue there can be no valid cause of action against it regarding misrepresentations allegedly made in Aries’ financial statements for the year ended 31.12.2010, as Zavarco PLC was only incorporated on 29.6.2011. Submissions of the Plaintiff [24] The Plaintiff submits that the Order 33 applications in Enclosure 444 must fail as they would not result in any substantial saving of time and expenditure. It maintains that the litigation involves multiple interrelated issues which would be more efficiently ventilated together at trial. [25] In opposing the applications, the Plaintiff emphasises that there are numerous disputed facts between the parties that require determination through a full trial. The Plaintiff particularly highlights that no agreed facts have been presented before the court, which is a fundamental prerequisite for an Order 33 application to proceed. [26] Taking issue with the Defendants’ characterisation of the case, the Plaintiff contends that the alleged bribery is not the central premise of its claims. Rather, it argues that the S/N wjqIyk/Km0WXchfQx8/Jmg case involves an overarching conspiracy to defraud, with bribery being just one component among many other substantial causes of action including fraud, breach of duties, dishonest assistance, and knowing receipt. [27] The Plaintiff strongly disputes the assertion that civil courts lack jurisdiction over bribery claims. It maintains that while bribery may be a criminal offence, it can also form the basis of civil causes of action with civil remedies. The Plaintiff argues that its claim is a proprietary one, seeking to recover bribes held on trust, and therefore falls squarely within the civil court’s jurisdiction. [28] Addressing the election doctrine argument, the Plaintiff maintains that Suit 313 and the current proceedings are founded on separate and distinct causes of action. It points out that at the time of filing Suit 313, it had no knowledge of the fraud and conspiracy now being alleged, as these facts only came to light through subsequent investigations. [29] On the Quistclose Trust issue, the Plaintiff argues that third parties can indeed be trustees under such a trust. It contends that the lack of segregation of funds is not fatal to a Quistclose Trust claim, as segregation is merely one indicator among many to consider in determining whether such a trust exists. S/N wjqIyk/Km0WXchfQx8/Jmg [30] Regarding the claim against Zavarco PLC, the Plaintiff maintains that its causes of action are not limited to events prior to that company’s incorporation but include matters occurring after its incorporation. It argues that these issues require proper ventilation at trial and cannot be summarily determined through an Order 33 application. [31] Finally, the Plaintiff characterises these Order 33 applications as an abuse of process, noting that many of the same issues have already been raised in various striking out applications. It argues that the Defendants are improperly attempting to have multiple bites at the cherry through different procedural mechanisms. The law on Order 33 applications [32] Order 33 rule 2 of the Rules of Court 2012 provides: “The Court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or otherwise, to be tried before, at or after the trial of the cause or matter, and may give directions as to the manner in which the question or issue shall be stated.” [33] Order 33 rule 3(2) further provides: “In any such action, different questions or issues may be ordered to be tried by different modes of trial and one or more questions or issues may be ordered to be tried before the others.” S/N wjqIyk/Km0WXchfQx8/Jmg [34] Rule 5 sets out the court's power following determination of a preliminary issue: “If it appears to the Court that the decision of any question or issue arising in a cause or matter and tried separately from the cause or matter substantially disposes of the cause or matter or renders the trial of the cause or matter unnecessary, it may dismiss the cause or matter or make such other order or give such judgment therein as may be just.” [35] The application of these provisions involves a two-stage process, as explained by the High Court in AIA Berhad v Dr Tan Siew Hui [2020] MLJU 351: “[28] Even if the Sessions Court was of the opinion that the issue of liability could be decided as a preliminarily issue, it should have made an order to that effect and give directions for the hearing for the determination of the preliminary issue. That would be the first stage. Then only would the Sessions Court hear the issue proper in the manner directed and make a decision thereon. That would be the second stage.” [36] The key consideration in determining whether to allow an Order 33 application was set out by the Court of Appeal in Petroleum Nasional Bhd v Kerajaan Negeri Terengganu [2004] 1 MLJ 8: “As a general rule, the court will exercise its power under Order 33 rule 2 if and only if the trial of the question will result in a substantial saving of time and expenditure which otherwise would have to be expended should the action go to trial as a whole.” S/N wjqIyk/Km0WXchfQx8/Jmg [37] Additionally, the Court of Appeal in Hiap Soon Hong Sdn Bhd v Leopad Assets Sdn Bhd [2018] 1 LNS 664 emphasised that Order 33 applications require undisputed facts: “[26] ….in order for Order 33 to have any efficacy, it is necessary for the judge to ensure, at the outset, that the relevant facts are not disputed. This can be done by ordering the parties either to agree to the facts stated in the pleadings or to file an agreed statement of facts.” [38] These authorities establish that for an Order 33 application to succeed, the preliminary questions must be capable of substantially disposing of the action or achieving significant time and cost savings, and the relevant facts must not be in dispute between the parties. Analysis and findings of the court Civil courts’ jurisdiction to determine bribery claims [39] The first preliminary question posed by the Applicants in Enclosure 444 asks whether civil courts have jurisdiction to determine or declare that a criminal wrong, specifically bribery, has been committed, and if not, whether the pleaded causes of action against Applicants (the 3rd, 5th, 12th, 15th, 16th, 18th and 26th Defendants) are unsustainable and ought to be struck out. S/N wjqIyk/Km0WXchfQx8/Jmg [40] The Applicants contend that bribery, being a criminal offence under the Malaysian Anti-Corruption Commission Act 2009, falls exclusively within criminal court jurisdiction. They argue that civil courts cannot make determinations about criminal wrongdoing, and that allowing such determinations would amount to an improper encroachment into criminal jurisdiction. [41] The Plaintiff counters that while bribery may constitute a criminal offence, it can simultaneously ground civil causes of action with corresponding civil remedies. The Plaintiff’s case, as pleaded, seeks proprietary remedies based on alleged breaches of fiduciary duties, with the bribe monies being held on trust. The Plaintiff emphasises that the civil standard of proof - balance of probabilities - applies to such claims, distinguishing them from criminal prosecutions. [42] Having considered the submissions, I find that this preliminary question is not suitable for determination under Order 33. First, determining this jurisdictional question would not substantially dispose of the matter or result in significant time and cost savings. The Plaintiff’s pleaded case encompasses multiple causes of action beyond bribery, including fraud, conspiracy, breach of duties, dishonest assistance and knowing receipt. These claims would still require full ventilation at trial regardless of how the bribery jurisdiction issue is resolved. S/N wjqIyk/Km0WXchfQx8/Jmg [43] Furthermore, the Applicants’ jurisdictional challenge appears misconceived. The English High Court in Petrotrade Inc and others v Smith and others [2000] All ER

(D) 264 has recognised that for civil law purposes, bribery constitutes the payment of a secret commission and represents a special form of fraud. The Federal Court in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 5 MLJ 1 has confirmed that in civil proceedings, even where fraud is alleged, the applicable standard remains the balance of probabilities. The criminal nature of the alleged conduct does not preclude civil courts from adjudicating civil causes of action arising from the same facts. [44] The Applicants’ reliance on Dr Vijaendreh Subramaniam v Kerajaan Malaysia [2022] 9 CLJ 553 (High Court) and Tan Kok Pin v Loh Chun Hoo [2022] 1 LNS 27 (High Court) is distinguishable. Those cases involved attempts to obtain declarations about criminal liability or to recover damages based purely on criminal offences. Here, the Plaintiff’s claim seeks civil remedies for breaches of civil obligations, with bribery forming part of the factual matrix rather than the sole basis of the claim. [45] For these reasons, I find that this preliminary question fails to meet the threshold requirements for determination under Order 33. The jurisdictional challenge does not raise a discrete issue capable of substantially disposing of the action, and the authorities suggest the civil courts clearly S/N wjqIyk/Km0WXchfQx8/Jmg have jurisdiction to hear civil claims involving allegations of bribery as part of their broader civil jurisdiction. MACC’s “No Further Action” decision and the death of Dato’ Zafer [46] The second preliminary question asks whether a determination of bribery can be made by civil courts given the MACC’s “No Further Action” decision regarding the allegations of bribery against Dato’ Zafer, and his unavailability to give evidence due to his death on 20.7.2022. If answered in the negative, the question further asks whether the pleaded causes of action against the Applicants are unsustainable and ought to be struck out. [47] The Applicants contend that the MACC’s “No Further Action” decision means that no criminal offence was revealed upon investigation of the matter. They rely on Tunku Naquiyuddin Ibni Tuanku Ja’afar lwn ADM Ventures

(M) Sdn Bhd [2017] 1 LNS 216 (High Court) to argue that where investigating authorities have classified a matter as requiring no further action, related civil claims become unsustainable. They further argue that Dato’ Zafer’s death creates an evidential gap that can never be bridged, as he was integral to the alleged bribery scheme and his oral evidence would have been of great significance. S/N wjqIyk/Km0WXchfQx8/Jmg [48] The Plaintiff maintains that the MACC’s decision and Dato’ Zafer’s death do not preclude civil proceedings. It argues that it would still be able to establish its claims through documentary evidence and other witnesses. The Plaintiff emphasises that it has sufficient evidence to prove its case on a balance of probabilities, which is the applicable standard in civil proceedings. [49] Having considered the submissions, I find this preliminary question unsuitable for determination under Order 33. The effect of the MACC’s “No Further Action” decision on civil proceedings, and the impact of Dato’ Zafer’s unavailability as a witness, are matters that go to the weight of evidence rather than jurisdiction or maintainability of the action. The Federal Court in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd has made clear that civil proceedings operate independently of criminal matters, with different standards of proof applying. [50] The Applicants’ reliance on Tunku Naquiyuddin is distinguishable. That case turned on the absence of any other evidence to support the impugned statements, whereas here the Plaintiff indicates it has both documentary evidence and other witnesses to support its claims. The death of a key witness, while potentially affecting the strength of the case, does not automatically render civil proceedings unsustainable. This is evidenced by cases such as RHB Bank Bhd v Seni Maju Sdn Bhd & Ors [2012] 10 MLJ 1 (High Court) where civil trials proceeded despite S/N wjqIyk/Km0WXchfQx8/Jmg the death of defendants who were substituted by their estate’s representatives. [51] Furthermore, determining this question at the preliminary stage would not result in substantial time and cost savings. The Plaintiff’s claims encompass various causes of action beyond bribery, and these would still need to proceed to trial regardless of how this particular question is resolved. The MACC’s decision and Dato’ Zafer’s death are factors that may be relevant to the ultimate determination of the case, but they do not provide a basis for summarily disposing of the action under Order 33. Doctrine of election and double recovery [52] The third preliminary question asks whether the Plaintiff, having elected to affirm and insist that the Loan Agreement dated 28.6.2012 shall be performed by Aries by obtaining judgment in Suit 313 and opposing related appeals, can now pursue a cause of action in misrepresentation as pleaded in Part D.1 of the Amended Statement of Claim. [53] The Applicants submit that by commencing Suit 313, obtaining judgment on 9.5.2019 for RM451,266,763.13, defending appeals against that judgment, and taking steps to enforce it, the Plaintiff had elected to affirm the Loan Agreement. They rely on Syarikat Rodziah v Malayan Banking Bhd [2021] 5 CLJ 170 (Court of Appeal) to argue that the Plaintiff cannot now take a diametrically opposite S/N wjqIyk/Km0WXchfQx8/Jmg position by claiming misrepresentation in the present proceedings. The Applicants further contend that the Plaintiff’s current claim of RM564,991,617.25 seeks to recover substantially the same amounts awarded in Suit 313. [54] The Plaintiff counters that Suit 313 and the present proceedings are founded on separate and distinct causes of action. It emphasises that Suit 313 was a straightforward recovery action against Aries for default under the Loan Agreement, whereas the present suit involves various tortious claims against different defendants who were not party to Suit 313. The Plaintiff relies on OCBC Bank (Malaysia) Berhad v Yong Hong Development Sdn Bhd & 36 Others [2020] MLJU 847 (High Court) to argue that where causes of action are distinct and separate, the doctrine of merger does not operate as an estoppel. [55] Having considered the submissions, I find this preliminary question unsuitable for determination under Order 33. First, the causes of action in Suit 313 and the present proceedings are fundamentally different. Suit 313 was premised on Aries’ default under the Loan Agreement, resulting in a judgment for RM451,266,763.13 comprising the principal sum of RM386,870,939.07, interest of RM50,493,919.50, and late payment charges of RM13,901,904.56. In contrast, the present suit alleges fraud, conspiracy, breach of duties, dishonest assistance S/N wjqIyk/Km0WXchfQx8/Jmg and knowing receipt against defendants who were not party to Suit 313. [56] The Applicants’ reliance on Syarikat Rodziah is distinguishable. That case involved a bank suing its lawyers for wrongfully advising the release of facilities after having successfully sued the borrower based on those same facility documents. Here, the Plaintiff’s claims against the Applicants are not premised on challenging the validity of the Loan Agreement itself, but rather on independent tortious causes of action arising from the Applicants’ alleged conduct in relation to the Loan. [57] Furthermore, determining this question at the preliminary stage would not achieve any substantial saving of time and costs. The various causes of action pleaded would still need to be ventilated at trial, particularly given that they involve allegations of fraud and conspiracy which typically require full factual inquiry. The question of election, if it arises at all, would be better considered in the context of all the evidence at trial. Quistclose Trust and the effect of commingling of funds [58] The fourth, fifth and sixth preliminary questions concern the Quistclose Trust cause of action. The Applicants ask whether a trustee under a Quistclose Trust must be the intended recipient of the subject monies, whether other recipients can be trustees, and whether such a trust can S/N wjqIyk/Km0WXchfQx8/Jmg arise over loan monies that have not been separated from other funds. They further question whether the Plaintiff can trace and establish ownership of the monies when they were commingled with Aries’ own funds and when the amount sought to be traced exceeds the loan sum. [59] The Applicants contend that only Aries, as the intended recipient of the Loan Sum, can be a trustee under a Quistclose Trust. They argue that third parties who were not party to the Loan Agreement cannot be trustees due to the absence of mutual intention to create a trust. The Applicants further submit that commingling of the Loan Sum with Aries’ other funds is fatal to any Quistclose Trust claim. They point to Aries’ audited financial statements showing total revenue of RM644,580,829 between 2010 and 2016, demonstrating substantial commingling with the Loan Sum of RM400,000,000. They rely on DNA Bentera Sdn Bhd v Maju Struktur Sdn Bhd [2021] 1 LNS 1236 (High Court) and Royal Bank of Canada v Atlas Block Co [2014] O.J. No. 2936 (Ontario Superior Court of Justice) to argue that once funds are commingled, they cannot be traced. [60] The Plaintiff maintains that third parties can be trustees under a Quistclose Trust, citing Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 (House of Lords) itself as authority. On the issue of commingling, the Plaintiff argues that segregation of funds is merely one indicator among many in determining whether a Quistclose Trust exists, relying on Twinsectra Ltd v Yardley [2002] 2 WLR S/N wjqIyk/Km0WXchfQx8/Jmg 802 (House of Lords). The Plaintiff contends that these questions involve disputed facts requiring full ventilation at trial. [61] Having considered the submissions, I find these preliminary questions unsuitable for determination under Order 33. [62] A Quistclose Trust, which got its name from the case of Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 decided by the House of Lords, is a form of trust that arises when money is lent for a specific purpose, creating a relationship where the borrower must use the funds only for that stated purpose. If the specified purpose fails or cannot be carried out, the money must be returned to the lender, and in the event of the borrower's insolvency, the funds are protected from other creditors as they are held on trust. This arrangement effectively creates a hybrid between a loan and a trust, providing security for lenders by ensuring their money either gets used for its intended purpose or is returned to them, rather than becoming part of the borrower's general assets available to creditors. [63] The authorities cited by the Applicants regarding commingling of funds deal with different contexts and are not directly applicable to Quistclose Trusts. In Twinsectra, the House of Lords recognised that while segregation of funds may be indicative of intention to create a trust, it is not determinative. The existence of a Quistclose Trust S/N wjqIyk/Km0WXchfQx8/Jmg ultimately turns on the mutual intention of the parties, which requires examination of all surrounding circumstances. [64] Furthermore, the question of whether third parties can be trustees involves consideration of their roles and conduct in relation to the Loan Sum. This necessitates detailed factual inquiry into matters such as their knowledge, intentions and dealings with the funds. Similarly, the tracing exercise would require careful analysis of the flow of funds and documentation evidencing the same. These are precisely the type of fact-sensitive determinations that should be made at trial with the benefit of full evidence. [65] The determination of these questions would not achieve any substantial saving of time or costs. Even if answered in the Applicants’ favour, the Plaintiff’s other causes of action would still proceed to trial. In these circumstances, it would be inappropriate to determine these questions as preliminary issues under Order 33. Tracing of funds and the claim against Zavarco PLC [66] The final set of preliminary questions concerns two distinct but related issues. First, whether the Plaintiff can trace and establish ownership of monies paid to the Applicants when the Loan Sum was commingled with Aries’ funds, was disbursed over different periods (02.7.2012 and 15.11.2013), and where the amount sought to be traced (RM564,991,617.25) exceeds the original Loan Sum S/N wjqIyk/Km0WXchfQx8/Jmg (RM400,000,000.00). Second, whether there exists a valid cause of action against Zavarco PLC regarding alleged misrepresentations in Aries’ financial statements for the year ended 31.12.2010, given that Zavarco PLC was only incorporated on 29.6.2011. [67] The Applicants argue that the Plaintiff’s tracing claim is fundamentally flawed due to the significant commingling of funds in Aries’ accounts. They point to Aries’ audited financial statements showing total revenue of RM644,580,829 between 2010 and 2016, demonstrating extensive mixing of funds beyond the Loan Sum. As for Zavarco PLC, they contend that it cannot be liable for misrepresentations made before its incorporation. [68] The Plaintiff maintains that issues of tracing and establishing ownership of funds require detailed examination of evidence at trial. On the claim against Zavarco PLC, the Plaintiff argues that its causes of action extend beyond the pre-incorporation misrepresentations to include subsequent conduct, particularly regarding the Memorandum of Understanding dated 18.4.2012 between Zavarco PLC and Huawei China. [69] Having considered the submissions, I find these questions unsuitable for determination under Order 33. The tracing exercise would necessarily involve complex factual inquiries into the flow of funds through various accounts and entities over an extended period. Such an exercise requires careful S/N wjqIyk/Km0WXchfQx8/Jmg examination of banking records, transaction documents and witness testimony to establish the path of the funds. These matters cannot be properly determined without a full trial. [70] Similarly, the validity of the causes of action against Zavarco PLC requires examination of both pre and post-incorporation conduct. While Zavarco PLC could not have made representations before its incorporation, the Plaintiff’s claims appear to encompass broader allegations about its role in the alleged scheme. These allegations are intertwined with the overall factual matrix of the case and should be evaluated comprehensively at trial. [71] Furthermore, determining these questions at the preliminary stage would not achieve any substantial saving of time or costs. Even if answered in the Applicants’ favour, the remaining causes of action would still proceed to trial. In these circumstances, it would be inappropriate to determine these questions as preliminary issues under Order 33. The complex factual nature of these issues makes them more suitable for determination at a full trial where all evidence can be properly tested and evaluated. Conclusion [72] Having carefully considered each preliminary question proposed in Enclosure 444, I find that none of them satisfies the threshold requirements for determination under Order 33 of the Rules of Court 2012. The overriding consideration S/N wjqIyk/Km0WXchfQx8/Jmg for allowing an Order 33 application is whether it will result in substantial saving of time and expenditure that would otherwise be expended if the action proceeds to full trial. This threshold has not been met in the present case. [73] The questions raised by the Applicants - ranging from the civil courts’ jurisdiction over bribery claims, to the effect of MACC’s “No Further Action” decision, the doctrine of election, the elements of Quistclose Trust, and issues of tracing - are deeply intertwined with the factual matrix of the case. These matters cannot be properly determined in isolation from each other or from the broader context of the alleged fraudulent scheme. There remain significant factual disputes between the parties that require full ventilation through oral and documentary evidence at trial. [74] Furthermore, even if any of these questions were to be answered in the Applicants’ favour, it would not substantially dispose of the action. The Plaintiff’s various causes of action, including fraud, conspiracy, breach of duties, dishonest assistance and knowing receipt, would still need to proceed to trial. In these circumstances, attempting to resolve these issues as preliminary questions would likely result in additional time and costs rather than achieving any meaningful savings. [75] For these reasons, I dismiss the Applicants’ application under Order 33 in Enclosure 444 with costs. The action S/N wjqIyk/Km0WXchfQx8/Jmg shall proceed for full trial where all issues can be properly ventilated and determined in their complete context. 10 December 2024 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Dato’ Lim Chee Wee, Nathalie Ker Si Min, Pang Huey Lynn, Charmaine Choong and Saradha Lakshmi (Messrs Lim Chee Wee Partnership) For the 3rd, 5th, 12th, 15th, 16th, 18th and 26th Defendants: Foo Joon Liang with Tan Min Lee and Kho Jia Yuan (Messrs Gan Partnership) S/N wjqIyk/Km0WXchfQx8/Jmg