Desa Tiasa Sdn Bhd v Bellajade Sdn Bhd (B-02(IM)-626-04/2023)

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Grounds of Judgment DALAM MAHKAMAH RAYUAN MALAYSIA DI PUTRAJAYA (BIDANGKUASA RAYUAN) 1 RAYUAN SIVIL NO: B-02(IM)-626-04/2023 ANTARA DESA TIASA SDN BHD …PERAYU-PERAYU

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Jadual A] CME GROUP BERHAD …RESPONDEN BELLAJADE SDN BHD ...PENCELAH YANG DICADANGKAN CORAM HAJJAH AZIZAH HAJI NAWAWI JCA AZIZUL AZMI ADNAN JCA DR CHOO KAH SING JCA 5 JUDGMENT OF THE COURT Introduction [1] The crisp issue for determination in this appeal was whether an unsecured creditor may intervene in judicial management proceedings convened under the 10 Companies Act 2016. We ruled that it may not. Material Background Facts [2] In 2014, the proposed intervener, Bellajade Sdn Bhd, commenced a writ action against the respondent CME Group Berhad to recover arrears under a S/N cnfpgCLF60eaB9B3jJqeg Desa Tiasa v CME Group 3 tenancy agreement. After protracted litigation, Bellajade’s claim was eventually allowed in part in September 2021, with the Federal Court directing CME Group Berhad to pay RM6,364,256.85 rental arrears to Bellajade, as well as rental for the period January 2014 to the middle of December 2015. [3] In April 2022, Bellajade and another creditor of CME Group Berhad 5 presented a petition for the winding-up of CME Group Berhad. [4] On 8 August 2022 the first respondent, Desa Tiasa Sdn Bhd, made an application for CME Group Berhad to be placed under judicial management. According to the affidavit affirmed in support of the application for judicial management, Desa Tiasa has invested some RM2 million in CME Group Berhad. 10 As a result of the application for judicial management, the hearing of Bellajade’s petition for winding up, which was scheduled on 16 August 2022, could not proceed. The Intervention Application [5] On 12 September 2022 Bellajade applied in Enclosure 5 to intervene in the 15 judicial management proceedings. The principal basis of the intervention was the judgment debt that was owed to it by CME Group Berhad. Bellajade was concerned that decisions made in the judicial management proceedings would seriously prejudice its rights to the judgment debt, which so far remained unsatisfied. 20 [6] Bellajade’s application was allowed. The material portion of the grounds of judgment of the High Court recorded its reasoning as follows: S/N cnfpgCLF60eaB9B3jJqeg Desa Tiasa v CME Group 4 FINDINGS OF THIS COURT [4] In answer to the above issue, I am of the considered view that the Proposed Intervener being an unsecured creditor is entitled in law to be given leave to intervene and be heard in the present Judicial Management proceedings. [5] The Court of Appeal decision delivered on 21/7/2020 in the case of Maybank 5 Investment Bank Berhad & Others v. Million Westlink Sdn Bhd [Civil Appeal No: B-02 (IM)-1590-08/2019] held that unsecured creditors is allowed to intervene in an application for a Judicial Management Order. I am certainly bound by that decision. [6] Hence, based on the above decision, the Proposed Intervener must be given leave to intervene and be added as a party in the present Judicial Management 10 Application. It is pertinent to preserve their interest and right, which will very likely be affected or prejudiced by any decision made in the Judicial Management proceedings. [7] Enclosure 5 was thus allowed with costs in the cause. This Appeal 15 [8] It is common ground that Bellajade is an unsecured creditor. [9] Under the Companies Act 2016, a secured creditor has a right to veto the grant of a judicial management order. Section 409 of the Act provides as follows: 409 Dismissal of application for judicial management order Subject to subsection 405(5), the Court shall dismiss an application for a judicial 20 management order if it is satisfied that— (a) a receiver or receiver and manager referred to in subparagraph 408(1)(b)(ii) has been or will be appointed; or (b) the making of the order is opposed by a secured creditor. [10] Pursuant to section 616 of the Companies Act 2016, the rules committee 25 constituted under the Courts of Judicature Act 2016 has promulgated the Companies (Corporate Rescue Mechanism) Rules 2018 (the “CRM Rules”), which among others specify the applicable procedures for an application for a judicial management order. Rule 2 of the CRM Rules provide that the procedures in the S/N cnfpgCLF60eaB9B3jJqeg Desa Tiasa v CME Group 5 Rules of Court 2012 apply where there are no specific procedures prescribed under the CRM Rules: 2 Application of Rules of Court 2012 Where there is no specific procedure provided in these Rules in respect of a voluntary arrangement or judicial management, the procedure provided in the Rules of Courts 5 2012 [P.U. (A) 205/2012] shall apply. [11] In our considered view, the provisions of the CRM Rules make it clear as to the identity of persons who may appear at a hearing of an application for a judicial management order. Hence rule 2 of the CRM Rules ousts the application of the general principles for intervention found in the Rules of Court 2012. 10 [12] The operative provision in this respect is rule 13 of the CRM Rules, which bears reproduction in full: 13 Notice of intention to appear (1) Only the following person may appear at the hearing of an application for a judicial management order to oppose the application: 15 (a) any person who has appointed or is or may be entitled to appoint a receiver or receiver and manager under subparagraph 408(1)(b)(ii) of the Act; or (b) any secured creditor referred to in paragraph 409(b) of the Act. (2) The person referred to in subrule (1) who intends to appear at the hearing of an application for a judicial management order shall serve the notice of intention to 20 appear on the applicant or his solicitor. (3) The notice of intention to appear referred to in subrule (2) shall— (a) be made in Form 10 of the First Schedule; and (b) be served, either personally or by post, not later than twelve noon of the day preceding the hearing date of the application for a judicial management order. 25 (4) Any person referred to in subrule (1) who fails to comply with this rule shall not, without leave of the Court, be allowed to appear at the hearing of the application for a judicial management order. S/N cnfpgCLF60eaB9B3jJqeg Desa Tiasa v CME Group 6 [13] In our considered view, rule 13 of the CRM Rules clearly provides that only two categories of person may appear at the hearing of an application for a judicial management order to oppose the application: first, a person who has appointed or is or may be entitled to appoint a receiver or receiver and manager (i.e. a debentureholder), and second, a secured creditor. Rule 13 does not permit 5 unsecured creditors from participating in the proceedings. [14] Since Bellajade is an unsecured creditor, it is precluded by the proper operation of rule 13 from intervening the application for a judicial management order. [15] Learned counsel for Bellajade placed reliance on the decision of the Court 10 of Appeal in Maybank Investment Bank v Million Westlink [Civil Appeal No: B-02 (IM)-1590-08/2019] where the proposed interveners’ appeal was allowed. However, no grounds of judgment were issued in that case, and hence we cannot ascertain its ratio decidendi. Consequently, we do not consider it to be an authority binding on this court. 15 [16] Reference was also made to the High Court case of Goldpage Assets v Unique Mix [2020] MLJU 723, in which unsecured creditors were permitted to intervene in judicial management proceedings. In that case, the High Court in not so many words held that rule 13 of the CRM Rules was ultra vires the Companies Act 2016. That this was so is evident from the following passage of 20 the High Court judgment: [38] I am of the view that Rule 13, and in fact the entire Companies (Corporate Rescue Mechanism) Rules 2018 ) has to be read in conjunction with the parent act ie, the Companies Act 2016, and that as the Companies Act does not prohibit any creditor from being heard at the JM and/or to oppose the JM, and based on my 25 reasonings above on the right of any creditor to be heard, I hold that the Companies (Corporate Rescue Mechanism) Rules 2018 being a Subsidiary Legislation cannot contravene the parent Act ie, the CA 2016 and thus the interveners may be heard in S/N cnfpgCLF60eaB9B3jJqeg Desa Tiasa v CME Group 7 the JM application including to oppose the said JM. Authority for this can be found in sec. 23 of the interpretation Act 1948 & 1967 which reads "(1) Any subsidiary legislation that is inconsistent with an Act (including the Act under which the subsidiary legislation was made) shall be void to the extent of the inconsistency'. See also the Federal Court case of United Malayan Banking Corporation Bhd v. Ernest 5 Cheong Yong Yin [2002] 2 CLJ 413. [17] We are of the respectful view that the High Court was wrong to so hold. It is an established principle of statutory construction that provisions of written law must be read harmoniously in order to resolve any apparent conflict between different provisions of statute. In this case, the parent Act contains no 10 provision that prohibits an unsecured creditor from attending a hearing for a judicial management order. That provision is contained in rule 13, in the CRM Rules. There is thus no conflict at all—for the very reason that the Companies Act 2016 does not expressly provide to the contrary. [18] It is trite that the role of the court is to interpret the law. Where the plain 15 words of written law are clear, effect must be given to them. If rule 13 is thought not to provide for the desired result, then it would be for the legislature and the rules committee to promulgate laws and rules that would give effect to that intent. [19] For the reasons explained here, we allowed the appeal and set aside the 20 order of the High Court. We directed Bellajade to pay costs of RM10,000 to the appellant and another RM10,000 to CME Group Berhad, with such costs to be subject to an allocatur. S/N cnfpgCLF60eaB9B3jJqeg Desa Tiasa v CME Group 8 15 December 2025 Azizul A Adnan Judge of the Court of Appeal 5 Malaysia For the appellant: Dato’ Malik Imtiaz Sarwar, Ms Jamie Wong, Mr Kelvesh Deshenraj & Ms Wong Ming Yen—Messrs Jamie Wong For the first respondent: Mr S Raven & Ms Janice Tay—Messrs S Ravenesan For the second respondent: Ms Michele Kaur & Mr Tee Yee Man—Messrs Sun & Michele S/N cnfpgCLF60eaB9B3jJqeg