Cash Bank (M) Berhad v 1. Azizul Rahman Bin Abdul Wahab (24-640-05/2015)

AZIZUL RAHMAN BIN ABDUL WAHAB

ZAMANI BIN ABU BAKAR

MOHD LILANSAH BIN IDRIS

MOHD HASNULHISHAM BIN YAAKOB

MD NASIR BIN IBRAHIM (NO. K/P: 630805-05-5153) ..RESPONDENTS GROUNDS OF JUDGMENT (Originating Summons-Enclosure 1) Removal of Caveats [1] This is an Originating Summons filed by the Applicant {Cash Band

(M) Berhad}, pursuant to sections 327 and 329 of the National Land Code 1965 (the NLC) for removal of all the twelve (12) private caveats entered by the Respondents against the lands belonging to the Applicant under:- 4

PN17396, Lot 11, Mukim Pekan Templer, District of Gombak,

(ii) PN16838, Lot 614, Mukim Pekan Templer, District of Gombak, State of Selangor; and

(iii) HS(M) 6815, PT11444, Mukim Rawang, District of Gombak, State of Selangor. (“the Properties”) [2] For ease of reference, all the twelve (12) Private Caveats which have been entered by the Respondents against the Properties, are set out as follows:-

against PN17396, Lot 11, Mukim Pekan Templer, District of Gombak, State of Selangor:-

Private caveat Presentation No. 5815/2015;

Private caveat Presentation No. 5816/2015; and

Private caveat Presentation No. 5817/2015. 5

(ii) against PN16838, Lot 614, Mukim Pekan Templer, District of Gombak, State of Selangor:-

Private caveat Presentation No. 5811/2015;

Private caveat Presentation No. 5812/2015;

Private caveat Presentation No. 5813/2015; and

Private caveat Presentation No. 16534/2015.

(iii) against HS(M) 6815, PT11444, Mukim Rawang, District of Gombak, State of Selangor:-

Private caveat Presentation No. 397/2015;

Private caveat Presentation No. 398/2015;

Private caveat Presentation No. 399/2015;

Private caveat Presentation No. 457/2015; and

Private caveat Presentation No. 1046/2015. (“the Caveats”) 6 [3] It is pertinent to note that upon closer inspection of the Caveats entered by the Respondents against the Properties, it has been made clear by the Respondents that the Caveats were entered based on the following reason:- “Sementara menunggu proses pembayaran balik bayaran pendahuluan sepertimana dijanjikan Pemaju di dalam Surat Pemaju, saya ingin memasukkan Kaveat ini bagi melindungi kepentingan saya sebagai Ahli Berdaftar yang berhak mendapat bayaran balik bayaran pendahuluan serta gantirugi sepertimana dinyatakan dalam Surat Pemaju.” [4] This Court will make reference to this later. [5] The facts surrounding the Applicant’s claim are:-

5.1 the Properties initially belonged to Perangsang Templer Golf Club Berhad (formerly known as Templer Park Resort Sdn Bhd), upon which Perangsang Templer Gold Club (“PTGC”) was constructed and developed. 7

5.2 all the Respondents are individuals who are registered members of the PTGC wherein licences were issued by the Applicant to the Respondents upon payments made by the Respondents.

5.3 PTGC was operated as a proprietary club, and offered to the public memberships in the PTGC which entitle persons who had purchased the membership to use and enjoy designated facilities and amenities provided by Perangsang Templer Golf Club Berhad at PTGC.

5.4 the terms and conditions of membership of PTGC is specified under the Deed of Trust dated 3/7/1993 (“the Deed of Trust”) and the First Supplemental Deed to the Deed of Trust dated 7/4/1994 (“the First Supplemental Deed of Trust”).

5.5 Subsequently, the Applicant vide a Sale and Purchase Agreement dated 26/9/2006 purchased PTGC together with the Properties from Templer Park Gold & Resort Berhad (formerly known as Perangsang Templer Golf Club berhad) (“TPGR”). 8 Additionally, a Novation Agreement dated 9/7/2008 (“the Novation Agreement”) was entered between TPGR, the Applicant, Pacific Trustees Berhad and the members of PTGC, wherein the Applicant acquired all rights and interests of TPGR and became a party bound by the terms and conditions of the Deed of Trust and the First Supplemental Deed of Trust.

5.6 A Second Supplemental Trust Deed dated 22/7/2008 was entered between TPGR, the Applicant, Pacific Trustees Berhad and the members of PTGC, wherein the Applicant assumed all the functions, duties and obligations of TPGR contained in the Deed of Trust and the First Supplemental Deed of Trust.

5.7 In 2013, the Applicant and Setia Eco Templer Sdn Bhd entered into a Development Agreement dated 6/2/2013 for the purpose of developing the PTGC, including the Properties, with residential and commercial properties on a joint venture basis. A condition precedent under the Development Agreement is for the Applicant to terminate all memberships of PTGC held by Members, including the Respondents. 9

5.8 In compliance to the Development Agreement, the Applicant pursuant to Regulation 16.1(b) of the Second Schedule of the Deed of Trust unilaterally terminated the licenses granted to the members of PTGC, including those of the Respondents, following which the Applicant is required to pay compensations to the Members (Respondents included) in respect of the termination as per Regulation 16.2 and Regulation 17 of the Second Schedule of the Deed of Trust. [6] For ease of reference, this Court reproduces the relevant portions of the Deed of Trust:-

“16.1(b) The Licensed granted by the Club to the Members shall automatically cease upon the occurrence of any of the following events:-

in the event that a winding-up order is made against the Club;

in the event the Club unilaterally decides to terminate or withdraw the License granted to the Member other than pursuant to Regulations 8.8; 13; 14 and 15; 10

in the event that administrator or executor or benificiary of a deceased Member elects to surrender the License pursuant to Regulation 12.3 herein;”

(ii) “16.2 In the event that the termination of the License set out in Regulation 16.1 herein occurs during the Term of the License and the License terminated is an Individual License; Non-Golfing License and/or a Corporate License then, such portion of the Advance Payment which is paid in respect of the unexpired period of the Term of the License as at the date of such termination, shall become payable by the Club to the Member, free of interest, within ninety (90) days from the date of termination.” [7] It was submitted by the Applicant that Members of PTGC including the Respondents have been informed of the termination vide the 11 Applicant’s letter dated 29/10/2014, and it was specified that the termination is to take effect from 1/12/2014. [8] It was later that the Respondents lodged the Caveats upon the Properties, on the premise that the Caveats were lodged to protect the Respondents interests for payment of compensation pursuant to the termination of their respective memberships in PTGC. THE COURT’S MINUTES [9] This Court will now refer to the cause papers and minutes. The Originating Summons was filed by the Applicant on 25/5/2015 which was supported by an Affidavit affirmed by Dato’ Kamarul Baharin Bin Abbas, who was a director of the Applicant. It is to be noted that the Applicant had also filed a Certificate of Urgency. [10] The Applicant submitted vide its Affidavit of Service affirmed by Nava Ananda Jeeva A/L Sinnathamby on 27/8/2015, that the sealed copy of the Originating Summons and Affidavit in Support was served upon 12 the Respondents’ solicitors, Messrs Harmy Yussof & Azli on 29/5/2015. [11] When the case was first called for case management before the Senior Assistant Registrar (SAR) on 9/6/2015, the Respondents’ solicitors had requested, and the SAR had allowed the Respondents to file its Affidavit in Reply on 2/7/2015. This Court, however took notice that the Applicant had objected to the Respondents’ request for extension of time to file their Affidavit in Reply, nevertherless the Respondents were given time until 2.7.2016. [12] The Respondents had failed to file the Affidavit in Reply as previously directed, and had again requested for an extension of time when the matter was fixed for case management on 8/7/2015. Although the Applicant had again objected to the Respondents’ solicitors request, the learned Senior Assistant Registrar acquiesced to the request and directed for the Respondents to file and serve their Affidavit in Reply by 13/7/2015. 13 [13] The case was again called for case management on 13/8/2015, where the Respondents' solicitors had informed the Court that they have yet to file the Affidavit in Reply, and cited the solicitors health concerns behind the prolonged delay. The Applicant’s solicitors maintained its position in objecting to further extension of time. Subsequently, the SAR fixed the matter for hearing on 1/9/2015. [14] The Respondents eventually filed and served its Affidavit in Reply on 28/8/2015, nearly three months after the Originating Summons and Affidavit in Support was served to the Respondents’ solicitors. [15] The Applicant’s solicitors raised a preliminary objection against the Affidavit in Reply filed by the Respondents. [16] When the matter was heard before this Court on 1/9/2015, only the Applicant’s solicitors attended the hearing and provided its submission. 14 ISSUES TO BE DETERMINED BY THIS COURT [17] Having set out the relevant facts and chronology of events with regards to the filing of affidavit in reply by the Respondents in opposing the Applicant’s application, primarily there are two issues to be determined by this Court, namely:- i. the Applicant’s preliminary objection against the Respondents Affidavit in Reply; ii. the Applicant’s application to remove the Caveats lodged by the Respondents on the Properties. i. Applicant’s preliminary objection against the Respondents’ Affidavit in Reply [18] This Court took notice that the Respondents had been given a period of almost 3 months to file its Affidavit in Reply, and had failed not once, but twice, to adhere to the directions given by the Court during the case management fixed on 9/6/2015 and 8/7/2015. 15 [19] The Respondents only filed and served the Affidavit in Reply on 28/8/2015, which is now objected to by the Applicant vide its notice of preliminary objection dated 28/7/2015. [20] The Applicant’s solicitor in its submission made reference to Order 32 Rule 13(2)(b) of the Rules of Court 2012, and supported the preliminary objection with the following authorities:-

Sagujuta (Sabah) Sdn Bhd v Trane Malaysia Sales & Services Sdn Bhd [2014] 5 MLJ 535

Perbadanan Nasional Insurans Sdn Bhd v Pua Lai Ong [1996] 3 MLJ 85

Ratnam v Cumarasamy & Anor [1965] 1 MLJ 228 [21] For ease of reference, the relevant judgment of the three cases referred by the counsel for the Applicant are reproduced below: 16

Sagujuta (Sabah) Sdn Bhd v Trane Malaysia Sales & Services Sdn Bhd [2014] 5 MLJ 535. The Court of Appeal held inter alia: “(4) The appellant had not applied for leave or abridgment of time to file the said affidavit . Furthermore the said affidavit was served after the respondent had served on the appellant’s solicitors their submissions and bundle of authorities in respect of the summary judgment application. The judge had correctly exercised his discretion in allowing the preliminary objection and consequently rejecting the said affidavit (see paras 33-34).”

Perbadanan Nasional Insurans Sdn Bhd v Pua Lai Ong [1996] 3 MLJ 85. Siti Norma Yaakob, JCA (as she then was) delivering the judgment of the Court of Appeal at page 93 had said this: “Having stated that, we now ask ourselves whether the court has the discretion to allow an affidavit in reply to be used in proceedings under 17 O14 despite the fact that such affidavit had not complied with the provisions of O 32 r 13(2)(b). We answer in the negative for the following reasons. Order 32 r 13(2)(b) makes it mandatory for such an affidavit that it seeks to reply is received. The word ‘must’ as opposed to ‘may’ is used in the rule, and we interpret that to mean as implying a peremptory mandate as opposed to a mere direction or discretion as the word ‘may’ implies. We equate the meaning of the word ‘must’ as that given to the word ‘shall’, and for that reason the choice of the word ‘must’in the rule does not create the existence of any discretion or empowers the court to exercise such a discretion. To state otherwise would defeat the very purpose O 32 r 13(2) was intended ie to prevent any last minute affidavit being filed so as to protract the hearing of any proceeding in chambers. For that reason, we cannot support the finding reached by Malayan Banking Bhd v Lim Tee Yong & Ors, on the existence of a discretion. We hasten to add that under such circumstances, the defendant may apply for an abridgement of the period required to file the affidavit in reply pursuant to O 3 r 5(1) of the RHC.”

Ratnam v Cumarasamy & Anor [1965] 1 MLJ 228. The Privy Council held inter alia: 18 “(2) to justify an extention of time for the filing of the record there must be material upon which the court could exercise its discretion, for otherwise a party in breach would have an unqualified right to an extension of time which would defeat the purpose of the rules which was to provide a time table for the conduct of litigation.” [22] This Court is in agreement with the Applicant counsel’s submission that the Respondents had indeed failed to adhere to any of the Court’s direction, even when the Court had explicitly directed the Respondents to file and serve its Affidavit in Reply by 13/7/2015. [23] The Affidavit in Reply filed by the Respondents was indeed filed out of time, and the Respondents had not filed any application for abridgement of time for the purpose of filing the Affidavit in Reply. [24] This is further compounded by the fact that the Respondents had failed to provide any form of explanation to the Court for the lengthy delay in filing the Affidavit in Reply. 19 [25] Based on the aforesaid reasons, this Court allows the Applicant’s preliminary objection and hence, the Respondent’s Affidavit in Reply is expunged from the proceedings. ii. Applicant’s application to remove the Caveats lodged by the Respondents on the Properties [26] The Applicant’s solicitors drew this Court’s attention to the case of Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281, where it was held:- “Now, it is a well settled principle governing the evaluation of affidavit evidence that where one party makes a positive assertion upon a material issue, the failure of his opponent to contradict it is usually treated as an admission by him of the fact so asserted...” [27] It is not challenged that at all material time, the Applicant is indeed the registered and beneficial proprietor of the Properties. It is a trite principle of law that when dealing with an application for removal of a 20 private caveat, the questions to be determined by the Court are as follows:-

whether the caveator has a caveatable interest over the said property;

whether the contended caveatable interest so referred discloses any serious questions to be tried;

whether the balance of convenience is in favour of allowing the caveat to remain;

whether there are any special circumstances on the part of the Plaintiff that would warrant the status quo to be disturbed. [28] The trite principle of law is clearly demonstrated by the Privy Council in the case of Eng Mee Yong & Ors v Letchumanan [1979] 2 MLJ 212, where it was laid by the Privy Council that:- 21 “This is the nature of the onus that lies upon the caveator in an application by the caveatee under section 327 for removal of a caveat; he must first satisfy the court that on the evidence presented to it his claim to an interest in the property does raise a serious question to be tried; and having done so he must go on to show that on the balance of convenience it would be better to maintain the status quo until the trial of the action, by preventing the caveatee from disposing of his land to some third party.” [29] The Applicant further supported its submission with the authority of

Luggage Distributors (M) Sdn Bhd v Tan Hor Teng [1995] 1 MLJ The burden does indeed lie on the caveator, in this instance, the Respondents, to prove to the Court that they indeed have a caveatable interest on the Properties to warrant the Court to maintain the Caveats in the Respondents’ favour. [30] This Court would like to take this opportunity to revisit the reason stated in the Form 19B submitted by the Respondents. Upon reading all the Form 19B exhibited in Exhibit-G of the Applicant’s Affidavit in 22 Support, the Court is of the view that the justification provided by the Respondents behind the lodgement of the Caveats are based solely for the protection of the Respondents’ personal claim against the Applicant for payment of compensation in lieu of the Applicant’s decision to terminate the Respondents membership to PTGC. [31] This mirrors accurately the Applicant’s supporting authority of Score Options Sdn Bhd v Mexaland Developments Sdn Bhd [2012] 6 MLJ 475, where Arifin Zakaria CJ in delivering the Federal Court’s judgment held:- “Based on the provisions of the NLC and the authorities cited by the parties, this court was of the considered view that the only parties who were authorised to lodge a private caveat were those who could effect dealings in the particular interests in the land. The caveator had to have a ‘registerable interest’ under s 323(1)(a) of the NLC. In order to be a caveatable interest, the interest should represent a transaction that could ultimately lead to its registration on the register. In the instant appeal, the appellant had conferred numerous rights on the respondent 23 under the JVPM agreement and the powers of attorney, but all these rights were merely rights to develop the land that would give rise to a monetary interest or a right in personam against the appellant and did not create any interest in the land.” [32] The Applicant further supports its contention with the following authorities:-

Kundang Lakes Country Club Bhd v Garden Masters (M)

Trans-Summit Sdn Bhd v Chun Nyook Lin [1995] 2 MLJ 247; and

E.M. Buxton & Anor v Packaging Specialists Sdn Bhd [1987] 1 MLJ 342. [33] This Court is of the view that the Respondents grounds in respect of the lodging the Caveats is purely monetary in nature, and ultimately no transaction whatsoever would occur to ultimately lead to the registration of the Respondents’ name on the register of the Properties. This Court is in agreement to the Applicant’s submission 24 that the rights of the Respondents at all material times were licensees of the Applicant to enter into PTGC to use and enjoy the facilities of PTGC. [34] Therefore, it is this Court’s judgment that the Respondents have no caveatable interest in the Properties. Following this line of judgment, it is therefore academic for this Court to decide upon the following:-

whether the contended caveatable interest so referred discloses any serious questions to be tried;

whether the balance of convenience is in favour of allowing the caveat to remain;

whether there are any special circumstances on the part of the Plaintiff that would warrant the status quo to be disturbed. [35] This Court is further drawn to the authority of BCB Bank Bhd v Salim bin Abdullah [2013] 8 MLJ 704, where the High Court 25 referred to the judgment of Plimmer Bros v St Maur (1906) 26 NZLR 294:- “…In Plimmer Bros’ case, nothing was done for nearly 16 months and then a caveat was lodged. More than a month had lapsed since then, and still no action has been commenced. On this, the learned Stout CJ then said: ‘In my opinion an action for specific performance under such circumstances would be hopeless, and a caveat under such circumstances must be deemed vexatious’. The learned Chief Justice was also of the opinion that it is inequitable to prevent a man dealing with his property after such a long delay and the court will not lend its assistance to such a proceeding…” [36] As at the date of this hearing, none of the Respondents have filed an action against the Applicant for payment of the compensation. A period of nearly 7 months had lapsed from the date the Respondents first lodged the Caveats against the Properties, and this Court is of the view that the delay by the Respondents is vexatious, and it is a sufficient ground to remove the Caveats. 26

[37] Perusing the available cause papers, and upon reading the submission of the Applicant’s solicitor, this Court is satisfied that:-

the Applicant is the registered and beneficial proprietor of the Properties; and

the Respondents’ justification in lodging the caveat was a claim in personam of monetary in nature, and therefore the Respondents have no caveatable interests on the Properties [38] Hence, based on the abovementioned reasons, this Court hereby allows the Applicant’s application and grants order in terms of Enclosure 1. The Respondents are to pay costs of RM2,000.00 to the Applicant. 27 ...................................................... (DATUK AZIMAH BINTI OMAR) Judicial Commissioner High Court Shah Alam Selangor Darul Ehsan Dated the 1st September 2015 For the Applicant - Tetuan Shahrizat Rashid & Lee Puan Harjinder Kaur Encik Farhan Ghani For the Respondents - Tetuan Harmy Yusoff & Azli Cik Tengku Nadiatul Hanim