Malayan Banking Berhad v 1. ) Kumpulan Liziz Sdn. Bhd. (AA-22NCC-12-07/2020)

KUMPULAN LIZIZ SDN BHD [Company No.: 72218-M] 15

LIEW AH KAU [Identity Card No.: 520803-05-5179]

GHAZALI BIN ABDUL HALIM 20 [Identity Card No.: 550520-02-5137] … DEFENDANTS

DSE CONSTRUCTION SDN BHD 25 [Company No.: 192203-X] …

HO HUP CONSTRUCTION COMPANY BERHAD [Business Registration No.: 14034-W] … 2ND THIRD PARTY 30

PEMBINAAN AZAM JAYA SDN BHD [Company No.: 165309-W] … 3RD THIRD PARTY JUDGMENT 35 S/N t/cZ4/MwfUajztxw8xjUgw Query – Under the regime of pre-trial case management where the court no longer left it to the parties to move litigation at their own pace can the Court disallow an agreement to be recorded by way of a consent order for a part of third-party proceedings to be stayed, the effect of which, is likely to impede 40 the resolution of the action as a whole? Introduction [1] The Federal Court in Syed Omar Syed Mohamed v Perbadanan 45 Nasional Bhd [2012] 9 CLJ 557 held that under Order 34 of the Rules of High Court 1980 (and with effect from 1 August 2012, the Rules of Court 2012 or “ROC”) the court no longer left it to the parties to move the litigation at their own pace but assumed the role of setting the time-table for the progress of the case (see para [8] of Syed Omar ) and this provided a radical 50 change in approach to the prosecution of a case in court (see para [9] of Syed Omar). [2] Order 34 ROC contains a non-obstante clause to the effect that notwithstanding anything in the ROC, the Court may inter alia at any time 55 after the commencement of proceedings, of its own motion, make such order or give such directions as to the future course of the action as appear best adapted to secure the just, expeditious and economical disposal thereof. Decision Leading To An Appeal To The Court Of Appeal 60 [3] On 9 May 2022, this Court disallowed a draft consent order (Enclosure 125) to be recorded and dismissed the 3rd Third Party’s application S/N t/cZ4/MwfUajztxw8xjUgw (Enclosure 115) which, if allowed, would have the effect of staying the Defendants’ Third Party proceedings in this action against the 3rd Third Party 65 to await the disposal of the civil suit in High Court in Sabah and Sarawak Civil Suit No. BKI-23NCVC-3/8-2022 (“KK Suit”). [4] The main reason for the decision made by this Court was that if the Third Party proceedings against the 3rd Third Party were to be stayed 70 pending the resolution of the KK Suit, the progress of this action would most probably be impeded. In other words, in my considered opinion, allowing it would not secure the just, expeditious and economical disposal to the action before this Court. 75 [5] Dissatisfied with this decision, the 3rd Third Party appealed, and this is the grounds of judgment. Background Facts 80 [6] At the time when the 3rd Third Party’s application (Enclosure 115) dated 7 January 2022 was filed, the following inter alia events had taken place in this action: i) 1 April 2020 : Malayan Banking Berhad, the Plaintiff filed this 85 action against the three defendants (“D1, D2 & D3”) in the High Court in Malaya at Kuala Lumpur; ii) 4 June 2020 : All three Defendants entered appearance; iii) 24 June 2020 : The Defendants filed an application (Enclosure 8) to have the action transferred to the High Court in Malaya at 90 Ipoh; S/N t/cZ4/MwfUajztxw8xjUgw iv) 1 July 2020 : The Defendants took out a Third Party Notice (Enclosure 10) seeking contribution and indemnity from: a) DSE Construction Sdn Bhd (“1st Third Party”), b) Ho Hup Construction Company Bhd (“2nd Third Party”), and c) 95 Pembinaan Azam Jaya Sdn Bhd (“3rd Third Party”); v) 3 July 2020 : The Plaintiff filed an application (Enclosure 11) seeking to have summary judgment entered against the three Defendants; vi) 6 July 2020 : The Defendants filed their Defence and 100 Counterclaim (Enclosure 15); vii) 7 July 2020 : By consent, Ahmad Fairuz Bin Zainol Abidin J. ordered for this action to be transferred to the High Court at Ipoh; viii) 21 July 2020 : The 1st Third Party entered appearance (Enclosure 22); 105 ix) 22 July 2020 : The 2nd Third Party entered appearance (Enclosure 23); x) 13 August 2020 : The 3rd Party entered appearance (Enclosure 24); xi) 20 October 2020 : The Defendants took out a Notice for Third 110 Party Directions (Enclosure 27); xii) 11 November 2020 : This Court gave directions for the Third Party proceedings; xiii) 18 November 2020 : The Plaintiff filed an application (Enclosure 30) to strike out the Defendants’ Counterclaim; 115 xiv) 23 December 2020 : The 3rd Third Party filed its Defence to D2 and D3’s Claim (Enclosure 44); xv) 11 March 2021 : The 3rd Third Party filed its Defence to D1’s Claim (Enclosure 66); S/N t/cZ4/MwfUajztxw8xjUgw xvi) 3 August 2021 : The KK Suit was filed by the Defendants 120 against the 3rd Third Party and three others who were the ex-directors of D1; xvii) 6 December 2021 : after exhausting the exchange of affidavits and after hearing submissions, by order (Enclosure 113) this Court dismissed both the Plaintiff’s applications viz., the 125 Plaintiff’s application (Enclosure 11) for summary judgment to be entered against D2 and D3, as well as, the Plaintiff’s application (Enclosure 30) to strike out D2 and D3’s Counterclaim; xviii) 20 December 2021 : the Plaintiff filed a Notice of Appeal (Enclosure 108) to appeal against the Order dismissing its 130 application for summary judgment and striking out; and xix) 7 January 2022 : the 3rd Third Party filed an application (Enclosure 115) for the Statement of Claim of D2 & D3 dated 1 December 2020 as well as that of D1 dated 9 February 2021 against it be set aside or struck out, alternatively, all proceedings 135 between the Defendants and the 3rd Third Party be stayed pending the hearing and final disposal of the KK Suit. Events Since the 3rd Third Party’s Application (Enclosure 115) 140 [7] 15 February 2022 : Upon application by the Plaintiff (Enclosure 117 filed on 7 January 2022) and consented to by all the Defendants and the 1st and 2nd Third Parties, the main action was stayed pending the appeal by the Plaintiff against the dismissal of its application for summary judgment against D2 & D3 as well as its application to strike out D2 & D3’s counterclaim against 145 the Plaintiff. During a case management on 9 May 2022, this Court was informed that the hearing of the appeal has been fixed to be heard by the Court of Appeal on 28 September 2022. S/N t/cZ4/MwfUajztxw8xjUgw [8] 7 March 2022 : a draft order (Enclosure 125) was filed by the solicitors for the 3rd Third Party duly signed by the solicitors for D1, the solicitors for 150 D2 & D3 and the solicitors for the 3rd Third Party wherein these parties prayed for this Court to record a consent order as per the terms of the draft consent order (Enclosure 125) that all proceedings between the Defendants and the 3rd Third Party be stayed pending the hearing and final disposal of the KK Suit with no order as to costs; 155 [9] 9 May 2022 : after perusing the exchange of affidavits and submissions presented by D2 & D3 as well as the 3rd Third Party, this Court disallowed the terms of the draft proposed consent order (Enclosure 125) to be recorded and dismissed the 3rd Third Party’s application (Enclosure 115) which was 160 opposed by D2 & D3. Claims In Main Action And Third Party Proceeding [10] The underlying action by the Plaintiff against the Defendants are set 165 out in this Court’s grounds of judgment dismissing the applications by the Plaintiff for summary judgment (Enclosure 8) and to have the Counterclaim of D2 and D3 struck out (Enclosure 30) and the grounds have since been published, see Malayan Banking Berhad v. Kumpulan Liziz Sdn Bhd & Ors And DSE Construction Sdn Bhd & Ors (Third Party) [2022] MLJU 170 47; [2022] 1 LNS 70. [11] For purposes of this judgment, this Court will set out in brief the claims as between the parties: 175 S/N t/cZ4/MwfUajztxw8xjUgw i) the Plaintiff granted banking facilities to D1. D2 & D3 are non-social guarantors for the banking facilities. ii) the Plaintiff claimed that D1 defaulted on the banking facilities and that D2 & D3 defaulted in making good on their guarantees and sued the Defendants on a joint and several basis for a sum 180 of RM148, 924, 821.73 with interest thereon and costs on a solicitor-client basis; iii) the Defendants, on the other hand, claimed that the default in the banking facilities was brought about by the Plaintiff and all the three Third Parties and these three were brought in as the 185 1st, 2nd and 3rd Third Parties; iv) the Defendants raised a counterclaim against the Plaintiff for inter alia breaches of statutory and common law duty of care as well as breaches of fiduciary duties and professional obligations and counterclaimed for a sum of RM25,344,945.38 for losses 190 incurred as a result of mismanagement of the banking facilities for one project called the Sungei Besut Project plus a sum of RM196,662, 290.00 for the Pan Borneo [Highway] Project; v) As against the Third Parties, D2 & D3 claimed (Enclosure 33) that they are entitled to be indemnified by the 1st and 2nd Third 195 Parties up to 100% of the Plaintiff’s claims if they are found liable and as for the 3rd Third Party, D2 & D3 claimed contribution of up to 100% of damages and all costs that may be awarded by the Court against them in the main action as well as the Third Party proceedings. 200 S/N t/cZ4/MwfUajztxw8xjUgw Provisional List Of Issues To Be Tried 205 [12] In the course of case managing the action towards trial, upon the Court’s direction of 10 January 2022, all the parties worked together to put up a “Provisional List of Issues To Be Tried” (Enclosure 122). This list was filed on 8 February 2022 under cover of a letter of similar date by the 210 solicitors for the Plaintiff and is reproduced hereunder: Issue Forum 1. Whether Liziz defaulted in the financing facilities granted by the Bank Ipoh Suit (Bank vs

Whether the Guarantors are liable under the Guarantees to repay the financing facilities to the Bank Ipoh Suit (Bank vs

Guarantors) Whether Ho Hup had knowledge of and/or is a party to any alleged failure to pay the cheques of the proceeds of Progress Claim Certificates Nos. 20 to 23 from JPS into the MBB-KLSB Designated Collection Account or at all?

Claim against Ho Hup) Whether Ho Hup is liable to indemnify and/or contribute towards any liability that Liziz and/or the Guarantors may incur from the Bank’s claim Ipoh Suit (Liziz & Guarantors Third Party Claim against Ho Hup) S/N t/cZ4/MwfUajztxw8xjUgw against Liziz and/or the Guarantors to the sum of RM25,344,945.38 or at all 3. Whether DSE and Ho Hup are in breach of their obligations to the Bank in respect of the Sungai Besut contract proceeds KL Suit (Bank vs

Whether the Letter of Undertaking and Deed of Assignment of Contract Proceeds executed by DSE had been modified and/or varied, and whether all the security documents between the Bank and DSE are null and void Suit Counterclaim (DSE vs Bank)

Whether DSE had been made aware and/ or were made expressly known that the Banking Facilities for the Sungai Besut Project would be allowed to be used by the Bank and Liziz for any other purpose, beyond and outside the purpose(s) of Sungai Besut Project? *SKRINE: not an issue in the Ipoh Suit main claim (Bank vs Liziz & Guarantors) Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs Suit Counterclaim (DSE vs Bank +

Whether DSE proceeded to enter into certain security arrangement in respect of the banking facilities granted by the Bank to Liziz (which Ipoh Suit (Bank vs Liziz + Guarantors, Liziz S/N t/cZ4/MwfUajztxw8xjUgw involves Sungai Besut Project) upon reliance of the assurance, inducement and representation made by Liziz and the Bank? *SKRINE: not an issue in the Ipoh Suit main claim (Bank vs Liziz & Guarantors) + Guarantors vs Suit Counterclaim (DSE vs Bank +

Whether the Bank owes duty of care towards: i. DSE as the security party and whether it had acted negligently or in breach of its duty in exercising reasonable skill and care in the management of the terms of the banking facility in relation to Sg Besut Project? *SKRINE: not an issue in the Ipoh Suit main claim (Bank vs Liziz & Guarantors) ii. Liziz and Guarantors as the Borrower and whether it had acted negligently and/or breach of its statutory duty in exercising reasonable skill and care and/or fiduciary duty and professional obligations in the management of the terms of the banking facility in relation to Sg Besut Project and the Pan Borneo Project? Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs Suit Counterclaim (DSE vs Bank + Liziz) Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs S/N t/cZ4/MwfUajztxw8xjUgw DSE as TP 1, YP2 and TP3)

Whether Bank + Liziz can and/or have scheme (sic) funds off the Banking Facilities for Sungai Besut Project, for collateral purpose(s), beyond and outside the purpose(s) of Sungai Besut Project? *SKRINE: not an issue in the Ipoh Suit main claim (Bank vs Liziz & Guarantors) Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs Suit Counterclaim (DSE vs Bank +

Whether there is a total failure of consideration on the part of the Bank + Liziz, which will result in Bank + Liziz + Liziz’s directors (Liew + Ghazali) respective claims against DSE being flawed, baseless and misconceived? *SKRINE: not an issue in the Ipoh Suit main claim (Bank vs Liziz & Guarantors) Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs

Whether DSE and/or HHC jointly and severally liable or should contribute and/or indemnify Liziz and Guarantors for the sum of Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs S/N t/cZ4/MwfUajztxw8xjUgw RM25,344,945.38 which was claimed by the Bank against Liziz + Guarantors? *SKRINE: not an issue in the Ipoh Suit main claim (Bank vs Liziz & Guarantors) DSE & HHC as TP 1 + TP2)

Whether the default in the banking facilities were caused by the Plaintiff, DSE, HHC and PAJ and of the sum of RM130,842,697.85 claimed by the Plaintiff against Liziz + Guarantors, a sum of RM26,356,794.37 was diverted by DSE and/or HHC resulting in the default of the banking facilities? Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs DSE, HHC & PAJ as TP 1, YP2 and

TP3) Whether there was an arrangement between the Plaintiff, the First Defendant and PAJ wherein PAJ was to take over the banking facilities (“PAJ Arrangement”) with the full knowledge of the Plaintiff and in particular one of its officers named Jason (Head of Commercial Lending), representations were made by PAJ to take over the banking facilities with the Plaintiff encouraging and facilitating the First Defendant, D2 and D3 to agree with the PAJ’s proposal? Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors v S/N t/cZ4/MwfUajztxw8xjUgw

Whether the Plaintiff is a mere lender playing no role in the underlying contracts for which the banking facilities were obtained or is its role more than that, given the security documents ie deeds of assignment, power of attorney, letters of irrevocable instructions from DSE, HHC and PAJ with it thereby owing a duty of care to Liziz and Guarantors? Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs DSE, HHC and

Whether representations made by the Plaintiff was that it assured the First Defendant that if PAJ do not take up the banking facilities, the Plaintiff will apply for an injunction against PAJ to seek legal redress? Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs

Whether representations (fraudulent, negligent or innocent) were made by PAJ and their agent to Liziz and Guarantors in taking over the banking facilities and relying upon those representations, the Liziz and guarantors were induced to terminate the contract for the Pan Borneo Project. Ipoh Suit (Bank vs Liziz + Guarantors, Liziz + Guarantors vs

In failing to take up the banking facility by PAJ from the Plaintiff, whether there was fraudulent Ipoh Suit (Bank vs Liziz + S/N t/cZ4/MwfUajztxw8xjUgw conduct or deceit on the part of PAJ in not taking this offer of banking facilities thereby causing default in banking facilities amounting to RM RM130,842,697.85 Guarantors, Liziz + Guarantors vs

i. Whether there was breach of section 15 and 16 of the Contracts Act 1950? ii. Whether the Joint Venture Agreement dated 14.12.2017, are valid and binding between the 1st Plf (Liziz) and 1st Def (PAJ)? iii. Whether 1st Def (PAJ) as joint venture partner had acted in breach of fiduciary and contractual duties and trust to 1st Plf (Liziz)? iv. Whether 1st Def (PAJ) is liable to account to 1st Plf (Liziz) for their breaches of their fiduciary and contractual duties and trust? v. Whether the 1st Def (PAJ) should compensates the 1st Plf (Liziz) in equity for breaches of fiduciary and contractual duties and trust? vi. Whether 2nd ,3rd and 4 Def had acted in breach of their fiduciary, statutory, common law KK Suit S/N t/cZ4/MwfUajztxw8xjUgw and contractual duties, and trust to the 1st Plf (Liziz), 2nd Plf (LAK) and 3rd Plf (Ghazali)? vii. Whether 2nd, 3rd and 4 Def should compensate the Plfs on full indemnity basis for breaches of their fiduciary, statutory, common law and contractual duties, and trust? viii. Whether 1st Def (PAJ) is liable to account to the Plf as constructive trustee on the ground of their dishonest and fraudulent takeover of the said Project in breach of their fiduciary and contractual duties, and trust and all sums found due on the taking of such account to be paid to the 1st Plf (Liziz)? ix. Whether the 1st Def (PAJ) holds on constructive trust for the 1st Plf (Liziz) or is liable to account for all assets now or previously in their possession at the site of the said Project acquired directly or indirectly arising from or attributable to the misuse of the 1st Plf’s properties, resources or assets? S/N t/cZ4/MwfUajztxw8xjUgw [13] The 3rd Third Party filed a separate Provisional List of Issues To Be 215 Tried (Enclosure 121). This list in reproduced hereunder:

COMMON ISSUES IN BOTH SUITS

Whether the directors of PAJ made representations to Liziz during a meeting at PAJ’s office on 25-7-2019 (“the Meeting”) that PAJ would :-

take over all the debts of Liziz in

(ii) bear RM 35 million of Liziz’s debts in the banking facilities for Simgood Pte Ltd; Whether PAJ represented to Liziz during the Meeting that PAJ would :-

take over the Project;

(ii) take over Liziz’s MBB Banking Facilities;

(iii) take over Liziz’s obligations in banking facilities for Simgood Pte Ltd for up to RM 35 million; and S/N t/cZ4/MwfUajztxw8xjUgw Ipoh High Court Suit Kota Kinabalu High Court Suit

(iii) give Liziz subcontract works in the sum of RM 50 million for the Project; and

(iv) guarantee profit in the sum of RM 5 million from the said sub-contract works. [Paragraph 31 of DSOC; Paragraph 8(j) of the 2nd and 3rd Defendants’ Reply to the 3rd Third Party Defence dated 13-1- 2021]

(iv) subcontract to Liziz part of the Project for RM 50 million Paragraph 25 of the Statement of Claim dated 6-8- 2021 (“SOC”)] 2 Whether PAJ produced MBB’s Letter of Offer Term Sheet on a proposal for PAJ to take over Liziz’s MBB Banking Facilities at the Meeting? [Paragraph 31(c) of the DSOC] Whether PAJ produced a “term sheet” from MBB setting out an agreement and terms and conditions between the PAJ and MBB at the Meeting? [Paragraph 25.4 of the SOC] S/N t/cZ4/MwfUajztxw8xjUgw Ipoh High Court Suit Kota Kinabalu High Court Suit

Whether Liew and Ghazali were forced to sign Liziz’s letter dated 25- 7-2019 during the Meeting, and were not allowed to leave PAJ’s office throughout the Meeting? [Paragraph 32 of DSOC] Whether Liew and Ghazali were forced to sign Liziz’s letter dated 25-7-2019 during the Meeting, and were not allowed to leave the meeting room at PAJ’s office? [Paragraphs 25.5 & 25.6 of SOC] 4 Whether PAJ in allegedly failing and/or refusing to honour its representations to take over the MBB Banking Facilities for the Project, caused Liziz, Liew and Ghazali to bear the losses now claimed by MBB? [Paragraph 31, 33, 36 & 37 of DSOC] Whether PAJ’s conduct was deliberately and intentionally meant to cause the Plaintiffs to be in breach of their obligations under the MBB Banking Facilities? [Paragraph 27.2 of the SOC] 220 S/N t/cZ4/MwfUajztxw8xjUgw

(ii) ISSUES ARISING IN THE KOTA KINABALU SUIT ONLY

Whether a sum of RM74,139,110.63 which Liziz alleged under paragraph 12 of the SOC were diverted from their account were payments which were authorized by Liziz, Liew Ah Kaw and Ghazali Bin Halim for payment of approved creditors. [Paragraph 18 of the DCC,

Whether PAJ or its solicitors had refused to give a copy of a duly executed Supplementary Agreement to the Plaintiff. [Paragraph 10.1 of the SOC] The terms of the Supplementary Agreement included: i) PAJ’s entitlement was increased to 19.5% and Liziz decreased to 80.5% of the contract sum. [Paragraph 10.1 of the SOC] S/N t/cZ4/MwfUajztxw8xjUgw Ipoh High Court Suit Kota Kinabalu High Court Suit ii) the rights of PAJ to take over the performance of the works without prejudice to PAJ’s right to claim for damages against Liziz; [Paragraph 13.1 of the SOC] iii) That Liew Ah Kaw and Ghazali Bin Halim (2nd and 3rd Plaintiff) personally guaranteed the performance of the said Supplementary Agreement. [Paragraph 13.4 of the SOC]

Whether Liziz, Liew Ah Kaw and Ghazali bin Halim are liable to PAJ in the sum of RM12,830,651.14 being the outstanding sum due under the Supplementary Agreement? [Paragraph 52 & 53 of Defence and Counterclaim (“DCC”)]

Whether the alleged refusal to deliver a copy of the said Supplementary Agreement was deliberate, unreasonable and tainted with bad faith. [Paragraph 12 of the SOC] S/N t/cZ4/MwfUajztxw8xjUgw

Whether a Further Supplementary Agreement was duly executed which increased PAJ’s entitlement to 29.5% [Paragraph 14.1 of the SOC]

Whether the Further Supplementary Agreement was prepared at the request of the 2nd Plaintiff for his own personal benefit. [Paragraph 13 of the DCC]

Whether Liziz is liable to PAJ in the sum of RM97,202,000.00 in the event that the Further Supplementary Agreement is found to be valid and binding. [Paragraph 56 of the DCC]

Whether Liziz have failed to carry out the works properly and diligently and whether this failure was due to their inability to finance the performance of the work. [Paragraph 19 of the DCC] Whether Liziz had failed to remedy defective works which PAJ had requested them to remedy. [Paragraph 25(viii)(e) of the DCC] 225 S/N t/cZ4/MwfUajztxw8xjUgw Ipoh High Court Suit Kota Kinabalu High Court Suit Whether Liziz is liable to PAJ for the cost of remedying defective works in the sum of RM11,757,505.62. [Prayer (iii) of the DCC]

Whether Liziz had sought to assign the JVA to a third party at the end of 2018 due to their inability to continue financing the works. [Paragraph 20 of the DCC]

Whether the Directors resigned from the board of directors of Liziz without the knowledge of Liziz, Liew or Ghazali? [Paragraph 25.12 of the SOC]

Whether Liziz’s letter dated 25- 7-2019 is “unlawful” as no proper board of directors’ meeting was convened in accordance with terms of the Supplementary Agreement? [Paragraph 26 of the SOC]

Whether PAJ dishonestly and fraudulently caused Borneo Highway PDP Sdn Bhd to terminate the Main Contract for the Project? [Paragraph 26.4 of the SOC] S/N t/cZ4/MwfUajztxw8xjUgw

Whether PAJ and the Directors dishonestly and fraudulently caused the Government to award the Project to PAJ? [Paragraph 26.5 of the SOC] 3rd Third Party’s Application – “Enclosure 115” [14] The 3rd Third Party grounded its application on principally the following: i) there is multiplicity of proceedings in the KK Suit and the Third 230 Party proceedings brought against it by the Defendants which will result in two High Courts trying and determining two suits (this action and the KK Suit) arising from the same facts and involving the same parties, documents and witnesses, and where similar reliefs are sought, which ought to be prevented so 235 as to avoid inconsistent findings of fact being made; ii) the Third Party Notice ought not to have been issued by the Defendants against the 3rd Third Party herein as the High Court in Malaya, which does not have local jurisdiction to hear and determine the dispute between the Defendants and the 3rd Third 240 Party, on inter alia the following grounds:

the Defendants’ alleged cause of action against the 3rd Third Party as stated in the 3rd Third Party Notice and pleaded in the Third Party Statement of Claim, 245 arose in Sabah; S/N t/cZ4/MwfUajztxw8xjUgw

the 3rd Third Party’s registered and business address is in Sabah;

the facts on which the Defendants’ claim against the 3rd Third Party as stated in the Third Party Notice 250 and pleaded in the Third Party Statement of Claim are based, existed or allegedly occurred in Sabah;

there is a clause in the agreement in the joint-venture agreement involving a portion of works to be done for the Pan Borneo Highway contract between 255 D1 and the 3rd Third Party that the High Court in Sabah and Sarawak is to have exclusive jurisdiction. [15] The 3rd Third Party presented written submissions (Enclosure 131) filed on 29 April 2022 fleshing out the grounds adverted to above. 260 [16] D1 did not take any position on Enclosure 115 and I understood that D1 would abide by the decision of this Court on it. [17] In summary, the 3rd Third Party asserted that: 265 i) the facts and allegations pleaded in the Third Party proceedings and the KK Suit are almost identical and therefore there is multiplicity of proceedings; and ii) the High Court in Sabah and Sarawak at Kota Kinabalu, Sabah, 270 is the appropriate and convenient forum to determine the KK Suit because the facts giving rise to the disputes occurred in Kota Kinabalu, the causes of action in both the Third Party proceedings and the KK Suit arose in Kota Kinabalu, at the material time registered and business addresses of D1 and the 275 S/N t/cZ4/MwfUajztxw8xjUgw 3rd Third Party were in Kota Kinabalu and there is an exclusive jurisdiction clause in their Joint Venture Agreement where both D1 and the 3rd Third Party agreed to submit to the exclusive jurisdiction of the Courts of Sabah. 280 [18] Reliance was placed by the 3rd Third Party on the authority of Lai Kim Loi v Dato Lai Fook Kim & Anor [1989] 2 MLJ 290 where the Supreme Court struck out a winding-up petition when there was also on foot a civil suit and where the issues raised and relief sought in the two suits although not totally similar amounted to multiplicity of actions. This Court observed that 285 both the winding-up petition and the civil suit were filed in the High Court in Malaya. [19] Reliance was also placed by the 3rd Third Party on inter alia the following authorities: 290 i) Konsortium Abass Sdn Bhd v Syarikat Bekalan Air Selangor Sdn Bhd (Kerajaan Negeri Selangor, third party) [2013] 7 MLJ 1 which was affirmed by the Court of Appeal in Syarikat Bekalan Air Selangor Sdn Bhd v Kerajaan Negeri Selangor 295 [2013] MLJU 1462 where the High Court struck out the Third Party Statement of Claim on grounds of multiplicity of proceedings; and ii) Jaya Sudhir v Nautical Supreme Sdn Bhd & Ors [2019] 7 CLJ 395 (FC) wherein arbitration proceedings which were 300 commenced earlier were stayed so as to allow the civil suit to proceed first so as to avoid multiplicity or duplication of litigation as it was undesirable and inappropriate for proceedings or disputes arising from the same facts to run concurrently or in S/N t/cZ4/MwfUajztxw8xjUgw parallel as it would result in proceedings being fought on two 305 fronts before two different courts/tribunals and risk inconsistent findings. D2 & D3’s Position 310 [20] D2 & D3 filed their written submissions (Enclosure 129) on 28 April 2022. [21] Their position can be summarised as follows: 315 i) they oppose the application to have the Third Party Notice and Statement of Claim filed against the 3rd Third Party either struck out or alternatively, stayed pending the resolution of the KK Suit; ii) on the striking application, they relied upon the oft-quoted authority of Bandar Builder Sdn Bhd & Ors v United Malayan 320 Banking Corporation Bhd [1993] 4 CLJ 7 (SC) for the principle that the summary procedure to strike out a claim can only be adopted if is “obviously unsustainable” and cannot be exercised by a minute examination of the documents and facts of the case. Reliance was also placed upon the case of Owen Sim Liang 325 Khui v Piasau Jaya Sdn Bhd & Anor [1996] 4 CLJ 716 (FC); iii) Whilst Bandar Builder (supra) was decided in the context of an application for the striking out of a statement of claim and a counterclaim, the same principle has been adopted for Third Party proceedings, see Md Amin Mohd Yusof & Anor v Tetuan 330 Zain & Co; Cityvilla Sdn Bhd & 1 Lagi (Third Party) [2010] 1 LNS 1863 (HC), a decision of Tengku Maimun Tuan Mat J (now CJ) and Bank Kerjasama Rakyat Malaysia Bhd v Lee Kam S/N t/cZ4/MwfUajztxw8xjUgw Yoong & Anor; Aseambankers (M) Bhd & Ors (Third Parties) [2012] 8 CLJ 823 where it has been held that the third party 335 notice can be set aside upon an application pursuant to the then Order 16 rule 6 of the Rules of High Court 1980 with similar provisions in Order 16 rule 6 Rules of Court 2012, but the test for doing so would be similar to that laid down for striking out as was decided in Bandar Builder (supra); 340 iv) that there is delay in filing Enclosure 115 because it was filed after pleadings have closed; v) the 3rd Third Party had submitted to the jurisdiction of the High Court in Malaya with it having filed its Statement of Defence to D1’s Claim (Enclosure 44) and D2 & D3’s Claim (Enclosures 66); 345 vi) the claim by the Plaintiff against the Defendants and the latter’s claim against the 3rd Third Party is inextricably linked and this is borne out by the Provisional List of Issues To Be Tried (Enclosure 122); vii) emphasis was laid upon the assertion by D2 & D3 that there was 350 an arrangement wherein the 3rd Third Party was to take over the banking facilities and hence the claim for indemnity by D2 & D3 against the 3rd Third Party and this has been held by this Court in the summary judgment and striking out applications to be a triable issue, see Malayan Banking Berhad v. Kumpulan Liziz 355 Sdn Bhd & Ors And DSE Construction Sdn Bhd & Ors (Third Party) [2022] MLJU 47; [2022] 1 LNS 70 at paras [55] to [60] and [64]; viii) that it was this alleged proposed take-over of the banking facilities by the 3rd Third Party which caused D2 and D3 as 360 directors to make the decision for D1 to terminate contracts of great value said to be running into more than RM1 billion (see Malayan Banking Berhad v. Kumpulan Liziz Sdn Bhd & Ors S/N t/cZ4/MwfUajztxw8xjUgw And DSE Construction Sdn Bhd & Ors (Third Party) (supra at para [94]) and which termination cascaded into disputes 365 resulting in multiple suits now before the High Courts in Malaya and in Sabah and Sarawak. D2 & D3 emphasised that this issue is peculiar to this action and the Third Party proceedings (Enclosure 129 para 26) and, therefore, this makes the main action and the Third Party proceedings to be inextricably linked 370 and by reason thereto, the Third Party action is an “integral and inseparable part of the main action”, with reliance placed upon the authority of CIMB Bank Bhd v Dresdner Klienwort Ltd [2008] 4 SLR 543 (CA). 375 Foreseeable Difficulties [22] As mentioned earlier, after the 3rd Third Party’s application (Enclosure 115) was filed, and in the course of exchanges of affidavits and attendances before this Court by way of case managements, the 3rd Third Party on the 380 one hand and D2 & D3 on the other came to an agreement for all proceedings between the Defendants and the 3rd Third Party to be stayed pending the [final] disposal of the KK Suit and presented a draft Consent Order (Enclosure 125) to this Court and sought for it to be approved and recorded by this Court. 385 [23] I had, however, expressed reservations in approving the proposed agreement. This is because, if this action were to proceed to trial, issues that are relevant as between D2 & D3 and the 3rd Third Party, in particular, as to whether the 3rd Third Party was to take over the banking facilities under 390 circumstances which D2 & D3 assert are questionable, and which form the S/N t/cZ4/MwfUajztxw8xjUgw subject matter of the main action, cannot be raised and the progress of this action will be hobbled. It would defeat the underlying rationale for having a joint trial for all issues to be canvassed and a decision given to address all the issues raised in their respective pleadings. 395 [24] To have the Third Party proceedings as between D2 & D3 and the 3rd Third Party and by extension including D1 as well stayed, will most probably result in a situation where evidence-taking both before trial such as discovery, interrogatories and during trial in the main action as between the 400 Plaintiff and the Defendants, as well as between the Defendants and the 1st and 2nd Third Parties, riddled with objections on what can and cannot be elicited on the premise that they touch on issues to be tried between D2 & D3 and the 3rd Third Party in the KK Suit (“foreseeable difficulties”). 405 Inextricably Intertwined Issues [25] D2 and D3 asserted in their submissions that these issues are inextricably intertwined and referred this Court to the helpful authority of Bank Kerjasama Rakyat Malaysia Bhd v Lee Kam Yoong & Anor; 410 Aseambankers (M) Bhd & Ors (Third Parties) [2012] 8 CLJ 823 (HC) where Mohd Zawawi Salleh J (now FCJ) cited with approval the decision of Chao Hick Tin JA in CIMB Bank Bhd v. Dresdner Kleinwort Ltd [2008] 4 SLR 543 which held that: 415 “[t]he real test to determine whether a third-party action should be heard together with the main action is not that of connection alone but whether they are inextricably linked and the third-party action is an integral and inseparable part of the main action.” S/N t/cZ4/MwfUajztxw8xjUgw [26] From the narrative above, in my considered view, who is to be 420 responsible for the banking facilities is an issue that satisfies the test laid down in CIMB Bank Bhd v. Dresdner Kleinwort Ltd (supra) and by reason thereto the main action and the Third Party proceeding should be heard together, more so, as pointed out by learned counsel for D2 & D3, Malayan Banking Berhad, the Plaintiff in the main action is not a party in the KK Suit. 425 The 1st and 2nd Third Parties are also not parties to the KK Suit. 1st and 2nd Third Parties’ Position [27] Added to the above, learned counsel for the 2nd Third Party had on 430 10 January 2022 similarly asserted that there is an inter-twining of issues to be tried, and the Third Party proceedings should be proceeded with simultaneously with the main action. Learned counsel for the 1st Third Party concurred with this assertion. 435 Court’s Analysis And Findings [28] From the actions taken by the Plaintiff, it is plain as a pike staff, that it is intent on pursuing its banking facilities’ claim and to its mind, the Third Party proceeding is of no concern to it, more so, when it (the Plaintiff) is not 440 even a party to the KK Suit. [29] To allow the main action and the Third Party proceeding to be truncated and given the foreseeable difficulties (supra), it would most probably be heard in fits and starts, and to quote Mary Lim Thiam Suan J. 445 S/N t/cZ4/MwfUajztxw8xjUgw (now FCJ) in Crest Worldwide Sdn Bhd v Mudajaya Corporation Berhad [2016] 1 LNS 425 at para [45], will be to allow litigation by instalments: “… which can do nothing but run havoc to the administration of civil justice.” 450 [30] With the Proposed Issues To Be Tried (Enclosures 121 and 122) it is indisputable that applying the test in Bandar Builder (supra) as well as that in Md Amin Mohd Yusof (supra), the 3rd Third Party’s application to strike out the Third Party proceeding brought by D2 & D3 against it should fail 455 because I find that D2 & D3’s Claim is not obviously unsustainable. [31] I accept that there are commonalities in this action which includes the Third Party proceeding with that of the KK Suit but the issues are not common for all parties to the disputes. 460 [32] Ideally, there should be only one forum to hear the disputes and both this action and the KK Suit be consolidated. However, it has been settled by the Federal Court in Hap Seng Plantations (River Estates) Sdn Bhd v Excess Interpoint Sdn Bhd & Anor [2016] 3 MLJ 553; 4 CLJ 641, that the 465 High Court in Malaya and the High Court in Sabah and Sarawak each has no jurisdiction to transfer proceedings from one to the other and vice versa. [33] Therefore, to cut the Gordian knot, I decided to disallow the proposed Consent Order (Enclosure 125) where D2 & D3 had agreed with the 3rd Third 470 Party to stay their Third Party Proceedings until the final disposal of the KK Suit. At the same time I had also dismissed the 3rd Third Party’s application to stay D2 & D3’s Third Party claim against it with the view to managing this S/N t/cZ4/MwfUajztxw8xjUgw action towards trial and leaving it to the parties in the KK Suit which was commenced later than this action to take whatever action in the High Court 475 in Sabah and Sarawak as they may deem necessary to manage their respective positions. [34] In disallowing the proposed Consent Order (Enclosure 125), I had exercised this Court’s discretion not to approve the same. Needless to say, 480 the jurisdiction and power to make any [Court] order is vested upon the Court. Just because the parties have agreed to an order to be made, it does not mean, that the Court should act as a rubber stamp to endorse the same without first scrutinising the same. 485 [35] Further, Order 34 rule 2 (5) ROC 2012 provides that at any time during the pre-trial case management where the parties are agreeable to a settlement of some or all of the matters in dispute in the action or proceedings, the Court may enter judgment in the action or proceedings or make such order to give effect to the settlement. That the word “may” as 490 opposed to “shall” or “must” is used, makes it clear that a discretion is conferred upon the Court as to whether to give effect to the settlement, see the recent helpful and comprehensive construction of the use of the word “may” in Taza bin Tarji v PP and another Appeal [2020] MLJU 1822 (CA) at para [10]. In the exercise of this Court’s discretion, I had disallowed the 495 proposed settlement made by D2 & D3 with the 3rd Third Party in the form of the proposed Consent Order (Enclosure 125) because to allow the same would not serve the overriding interest of justice to have the action disposed of justly, expeditiously and economically. 500 [36] I set out hereunder the other reasons for my decision: S/N t/cZ4/MwfUajztxw8xjUgw i) reliance by 3rd Third Party upon the Federal Court authority of Jaya Sudhir v Nautical Supreme Sdn Bhd & Ors [2019] 7 CLJ 395 (FC) is misplaced because this case in fact supports the position taken by D2 & D3 to oppose the Enclosure 115. In Jaya 505 Sudhir, the Federal Court held that the issues pertaining to a claim to a 10% shareholding in the arbitration proceedings are similar to curial proceedings brought by the appellant and should not be held in the absence of the appellant who was not a party to the arbitration proceedings and as this issue is inextricably 510 linked (see held [7] of Jaya Sudhir) to the civil suit brought by the appellant, the arbitration proceedings ought to be restrained in favour of the curial proceedings which were already at the trial stage (see held [5] of Jaya Sudhir). In any event, given the foreseeable difficulties (supra) that would arise during the trial of 515 this action when the issue of whether the 3rd Third Party was to take over the banking facilities is canvassed, it would not do for this Court to then consider whether to adjourn the proceedings part way into the trial on a sine die basis to await the outcome of the KK Suit; 520 ii) the ratio decidendi of Jaya Sudhir, is with respect, on what is the test to be applied in an application for an injunction to restrain an ongoing arbitration by a party who is a stranger to the arbitration agreement and who is a non-party to the ongoing arbitration. The Federal Court in overturning the decision of the 525 Court of Appeal held that the general test for an injunction as laid down in Keet Gerald Francis Noel John v Mohd Noor & Ors [1995] 1 CLJ 293 CA applies instead of the test laid down in J Jarvis & Sons Limited v Blue Circle Dartford Estates Limited [2007] EWHC 1262 which was favoured by the Court of Appeal 530 (for the CA judgment see Nautical Supreme Sdn Bhd v Jaya S/N t/cZ4/MwfUajztxw8xjUgw Sudhir Jayaram & Ors [2019] 3 CLJ 628). As a matter of academic interest, whether the Federal Court’s decision in Jaya Sudhir has watered down the non-interventionist policy of maximum support but minimum interference with the arbitration 535 regime, so as to make it consistent with the amendments to the Arbitration Act 1956, leading to the Arbitration Act 2005 which made it in line with the UNCITRAL Model Law and endorsed by the Federal Court in Press Metal Sarawak v Etiqa Takaful [2016] 9 CLJ 1 FC, see the article which I had, with respect, 540 written and entitled “A case of intervention” dated 25 February 2020 and published in the Asia Business Law Journal (http://law.asia/case-intervention-federal-court/); iii) in Jaya Sudhir the Federal Court had allowed a stranger to an arbitration agreement to restrain ongoing arbitration 545 proceedings involving parties to an arbitration agreement in favour of curial proceedings, and therefore by extension, the exclusive jurisdiction clause in the Joint Venture Agreement made between D1 and the 3rd Third Party that the Courts in Sabah are to have exclusive jurisdiction in disputes between 550 them, would not prevent this Court from proceeding ahead with this action which includes strangers to the Joint Venture Agreement; iv) there is no dispute that the banking facilities were given by the Plaintiff with a registered address in Peninsular Malaysia, and 555 save for the 3rd Third Party all the other parties in the main action and the Third Party proceeding have their places of businesses in Peninsular Malaysia and pursuant to section 23 (1)(b) of the Courts of Judicature Act 1964 (“CJA”) the High Court in Malaya has jurisdiction once the action is filed therein. In Siti 560 Nur Aishah bt Ishak v Golden Plus Holdings Bhd [2017] 3 S/N t/cZ4/MwfUajztxw8xjUgw MLJ 701 the Court of Appeal held that once any of the conditions in section 23 (1) (a), (b), (c) or (d) CJA were met, the High Court that was first seised with jurisdiction did not become incompetent just because some other condition in section 23 (1) 565 conferring jurisdiction on the other High Court was met; v) as most of the parties are in Peninsular Malaysia, the forum conveniens would be the High Court in Malaya, see Siti Juliana Suen Bte Abdullah & Ors v Sungei Wang Properties Sdn Bhd & Ors [2005] 6 MLJ 693 (CA). Any inconvenience to the 570 3rd Third Party can be met or mitigated with the use of remote communication technology, see section 15A CJA, Order 33A ROC 2012 where the Court may direct any cause or matter to be conducted through remote communication technology and Liziz Plantation v. Liew Ah Yong [2020] 10 CLJ 94 where at 575 para [43] I had occasion to say: “[43] ……with the experience gained in using remote communication technology in dealing with the movement control order, conditional movement control order and the 580 recovery movement control order that is extant and which were necessitated by the COVID-19 pandemic, the physical location of any one litigant or witness and the issue of having to physically travel to any court has become very much less important.[1] 585 [44] The need for counsel, litigants and witnesses to physically travel to the court for the hearing of their matters is getting less and less. Hearings and meetings can now be done and are, by reason of the COVID-19 pandemic, encouraged to be done 590 electronically via a variety of internet platforms[2] such as "Zoom" or "Skype" not to mention that there are other platforms S/N t/cZ4/MwfUajztxw8xjUgw as well such as "Google Duo", "Google Hangouts", "MS Teams" and "Adobe Connect".[3] [45] In fact, with the aid of video conferencing and given the 595 restrictions in air travel caused by the COVID-19 pandemic, you can, for example, have a court sitting in the British Virgin Islands ("BVI") conducting a trial with participation by counsel from the United Kingdom, solicitors from Singapore and Hong Kong and witnesses from Hong Kong, Australia and Malaysia 600 all from the comfort of their respective offices or homes without having to fly out to the court in the BVI.[4] If this can be done across countries, what more is to be said about the importance and necessity, if any, of litigants and witnesses residing in Malaysia having to be physically present in a particular branch 605 of the High Court in Malaya.” vi) in my considered view, with respect, the reliance by the 3rd Third Party on the authorities of Syarikat Bekalan Air Selangor Sdn Bhd v Kerajaan Negeri Selangor [2013] MLJU 1462, Pamol 610 (Sabah) Ltd & Anor v Joseph Bin Paulus Bin Lantip & Ors [2012] 5 MLJ 616 (CA) and Konsortium Abass Sdn Bhd v Syarikat Bekalan Air Selangor Sdn Bhd (Kerajaan Negeri Selangor, third party) [2013] 7 MLJ 1, do not assist to address the foreseeable difficulties that would be faced in the main 615 action, if the 3rd Third Party is not made a party in dealing with the issue that the 3rd Third Party was to have taken over the banking facilities. In this regard, it cannot be denied that any order made in the absence of the 3rd Third Party on this issue would be non-binding upon it, see Dr Lourdes Dava Raj Curuz 620 Durai Raj v Dr Milton Lum Siew Wah & Anor [2020] 9 CLJ (FC) and this is precisely the raison d’etre for third party S/N t/cZ4/MwfUajztxw8xjUgw proceedings to be brought against it so as to avoid multiplicity of proceedings as well as litigation by instalments. 625 [37] In summary, in my considered view, by continuing to have the 3rd Third Party in this composite proceedings would serve to have the disputes amongst the parties herein including the 3rd Third Party decided more justly, expeditiously and economically. 630 Conclusion [38] In the upshot, I disallowed the proposed consent order (Enclosure 125) and dismissed Enclosure 115 but with no order as to costs. I made no order as to costs for the reason that D2 & D3 had at one stage agreed for their 635 Third Party proceedings against the 3rd Third Party to be stayed to await the outcome of the KK Suit. 640 Dated: 18 July 2022 ( SU TIANG JOO ) 645 Judicial Commissioner High Court in Malaya Ipoh, Perak S/N t/cZ4/MwfUajztxw8xjUgw For Plaintiff : Ng Kar Man 650 [Messrs Skrine] For Defendant 1 : R Santhi [Messrs Hakem Arabi & Associates] For Defendants 2 & 3 : Tenh Cheng Tiap [Messrs CK Lim, Tenh & Chong 655 For 1st Third Party : Lee See Loon (together with Linda Lau) [Messrs Lee Oliver & Gan) For 2nd Third Party : Conrad Young Wye King [Messrs Sreenevasan Young] 660 For 3rd Third Party : Ganesan Nethi (together with Siah Ching Joe) [Messrs Tommy Thomas] 665 [Notice: This Grounds of Judgment is subject to official editorial revision] 670 S/N t/cZ4/MwfUajztxw8xjUgw Headnotes 675 Administration of justice - case management - under the regime of pre-trial case management where the courts no longer left it to the parties to move litigation at their own pace, the Court ought not to allow an application to stay any part of proceedings, the effect of which, would most probably impede 680 the just, economical and expeditious resolution of the action including any Third Party proceedings Case management – Under Order 34 rule 2 (5) ROC 2012, the Courts have a discretion to refuse to approve any draft Consent Order proposed by any of the parties which would impede the just, economical and expeditious 685 resolution of the action S/N t/cZ4/MwfUajztxw8xjUgw