Malaysia Building Society Berhad v 1. ) Kamuja Bullion Resources Sdn Bhd (BA-22NCC-116-09/2019)

KAMUJA BULLION RESOURCES SDN BHD (NO. SYARIKAT : 812337 – X)

KAMUJA CORPORATION SDN BHD (NO. SYARIKAT : 555649 – K)

SUBHI BIN HAJI BAI

NABILAH BINTI SANUSI (NO. K/P : 740110-71-5044) ...DEFENDAN-DEFENDAN SHANMUGHANATHAN A/L VELLANTHURAI (NO. K/P : 660204-71-5037) …PIHAK TERKILAN DIDENGAR BERSAMA DENGAN KES DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN (GUAMAN SIVIL NO : BA-22NCC-141-10/2019) S/N q3fnfKiRJk6ntbm7LWxpIw ANTARA KAMUJA BULLION RESOURCES SDN BHD (NO. SYARIKAT : 812337 – X) ...PLAINTIF MALAYSIA BUILDING SOCIETY BERHAD (NO. SYARIKAT : 9417 – K) ...DEFENDAN GROUNDS OF JUDGMENT 1) There are two (2) applications before the Court :

Encl 10 filed by the Plaintiff for summary judgment pursuant to order 14 rule 1(1) Rules of Court 2012 (ROC 2012) against the 1st to 4th Defendants;

(ii) Encl 91 filed by the 1st Defendant (D1) seeking for an interim injunction to restrain the Plaintiff and its Receiver and Manager (R & M) from taking any steps whatsoever to sell by tender 9 out of 27 lots of property situated at Bandar Baru Bangi, Selangor Darul Ehsan. 2) On 24.3.2023 after having heard the parties and having considered the facts of the case as well as the written submissions I dismissed both applications with costs. S/N q3fnfKiRJk6ntbm7LWxpIw 3) As the matters were related and heard together, it is convenient to deal with both applications in one judgment. This judgement as such contains the full reasons for my decision to dismiss Encl 10 and Encl 91. Background 4) The background facts giving rise to the dispute are as follows : ▪

D1 shall continue to make payment of the redemption sums under the Sale and Purchase Agreement to the

(ii) D1 shall continue and take over the obligations of Aras Dimensi Sdn Bhd in the project development of the 27 units of office shop lots as provided for pursuant to the Sale and Purchase Agreement. 5) The Plaintiff, MBSB is a financial institution. 6) To finance the said purchase D1 applied for and was granted financing facilities from MBSB pursuant to terms and conditions as stated S/N q3fnfKiRJk6ntbm7LWxpIw in the Letter of Offer dated 19.12.2013. The facilities approved by MBSB totaled up to the sum of RM21.0 million as follows :

A Term Loan amounting to RM14,000,000.00;

Revolving Credit of RM1,000,000; and

Bridging Loan of RM6,000,000.00. 7) As security for the facilities D1 and the other Defendants being its guarantors signed inter alia the following documents :

Settlement Agreement dated 13.10.2014;

(ii) Facilities Agreement dated 16.6.2015;

(iii) Power of Attorney dated 16.6.2015;

(iv) Deed of Assignment of Sale Proceeds dated 16.6.2015;

Assignment of Special Project Current Account dated 16.6.2015;

(vi) First Party Debenture dated 16.6.2015;

(vii) Corporate Guarantee and Indemnity Agreement dated 16.6.2015; and

(viii) Guarantee and Indemnity Agreement dated 16.6.2015. 8) In consideration of the Plaintiff agreeing to provide the loan facilities to D1, the 2nd, 3rd and 4th Defendants each executed a Corporate/Guarantee and Indemnity Agreement dated 16.6.2015 in favour of the Plaintiff wherein they jointly and/or severally guaranteed the repayment of all debts owed by D1 to the Plaintiff as principal debtors and not merely as sureties together with interest and legal charges and expenses which the Plaintiff may incur in enforcing the outstanding sum owed by D1. 9) The Term Loan and Bridging Loan amounting to RM20,000,000.00 have been issued and utilized by D1. S/N q3fnfKiRJk6ntbm7LWxpIw 10) Meanwhile D1 failed to comply with the repayment obligations pursuant to the loan facilities and therefore the Plaintiff had through its solicitors issued a Notice of Demand and Notice of Termination both dated 3.4.2018 which was duly served on all the Defendants. At the same time the Plaintiff appointed Dato Dr Shanmuganathan a/l Vellanthurai as the Receiver & Manager (R & M) for D1 vide a Notice of Appointment of R & M on 22.5.2018 pursuant to the terms of the Debenture dated 16.6.2015. 11) There were a number of attempts by the parties to resolve and settle the matter but none came to fruition. Upon written request dated 22.3.2018 from D1 the Plaintiff forwarded a Redemption Statement to them on 26.3.2018. 12) On 31.5.2018 the Plaintiff received RM3,000,000.00 from D1 being part payment of the sums outstanding with the balance payable on or before 31.7.2018. 13) Meanwhile on 9.8.2018 a company known as NCT Venture Corporation Sdn Bhd wrote to the Plaintiff indicating its intention to take over the development of the project. This joint venture arrangement was subsequently aborted. This was followed by an offer made by Ismail Holdings Sdn Bhd to restructure the existing amount and transfer ownership of the charged land to them. After conducting an assessment of the financial standing documents provided to it by Ismail Holdings Sdn Bhd the Plaintiff rejected the application on the ground that there appeared to be an absence of positive cash flow that would merit sustainability of monthly repayment. 14) Hence this action was filed by the Plaintiff on 18.9.2019 to recover the sums due and outstanding as set out in Paragraph 41 of the SOC i.e. S/N q3fnfKiRJk6ntbm7LWxpIw

RM15,236,069.16 – Term Loan

RM1,555,006.40 – Bridging Loan The claim also includes interest and costs. The R & M 15) One year later on 15.9.2020 D1 filed an ex parte interim injunction to prevent the Plaintiff and the R & M from enforcing their rights under the Facilities Agreement dated 16.6.2015 and/or the Debenture dated 16.6.2015. Encl 91 - The Interim Injunction Application 16) This Court will focus its attention first on the application by D1 for the interim injunction as parties themselves had made their submissions in that order. 17) For Encl 91 the following cause papers were filed by the parties :-

Encl 28 : Notice of Application dated 15.9.2020;

(ii) Encl 29 : The 1st Defendant’s Affidavit in Support affirmed by its director, Dato Sri Ismail b Abdur Rahman on 15.9.2020;

(iii) Encl 30, 31, 32, 33, 34, 35 : Jilid;

(iv) Encl 37 : The R & M’s Affidavit in Reply affirmed by Dato’ Dr Shanmughanathan a/l Vellanthurai on 29.9.2020;

Encl 38 : Plaintiff’s Affidavit in Reply affirmed by Nor Hishamuddin b Mohd Nizar, the Plaintiff’s Head of Corporate Recovery on 29.9.2020; S/N q3fnfKiRJk6ntbm7LWxpIw

(vi) Encl 44: The 1st Defendant’s Affidavit in Reply affirmed by Dato Sri Ismail b Abdur Rahman on 19.11.2020;

(vii) Encl 45 : The 1st Defendant’s Affidavit in Reply affirmed by Dato Sri Ismail b Abdur Rahman on 19.11.2020;

(viii) Encl 52 : Plaintiff’s Affidavit in Reply affirmed by Nor Hishamuddin b Mohd Nizar on 14.12.2020;

(ix) Encl 53 : The R & M’s Affidavit in Reply on14.12.2020

Enclosure 55 : The 1st Defendant’s Additional Affidavit affirmed by Dato Sri Ismail b Abdur Rahman on 14.12.2020

(xi) Encl 84 : The 1st Defendant’s Additional Affidavit affirmed by Dato Sri Ismail b Abdur Rahman on 10.2.2023;

(xii) Encl 91 : Amended Notice of Application;

(xiii) Encl 93 : Plaintiff’s Affidavit in Reply (2) affirmed by Nor Hishamuddin b Mohd Nizar on 6.3.2023;

(xiv) Encl 95 : 1st Defendant’s Affidavit in Reply affirmed by Dato Sri Ismail b Abdur Rahman on 20.3.2023 Submissions by D1 18) I have summarized the contentions of D1 to the following : S/N q3fnfKiRJk6ntbm7LWxpIw

The Loan Facilities granted to D1 was tainted with fraud/ illegality/conspiracy/misconduct of its previous management as shown in the facts, arrangement and conduct with MBSB;

(ii) The purpose of the Term Loan was to settle the debts of Aras Dimensi Sdn Bhd in the sum of RM14.6 million;

(iii) The Term Loan was released by way of contra instead of cash;

(iv) The building plan approval had expired on 15.7.2011 which is before the approval and disbursement of the loan facilities;

MBSB provided D1 with a Term Loan for the sum of RM14 million to redeem the acquisition of the 9 Lots when the said 9 Lots were only worth around RM9,090,000.00;

(vi) D1 was a dormant company when the loan facilities were approved and released;

(vii) Special treatment was accorded to the former directors of D1 by MBSB;

(viii) The refusal of D1’s application to restructure and novate the loan obligations to Ismail Holdings Sdn Bhd was unreasonable and mala fide. Preliminary Objections 19) I shall first deal with the preliminary objections raised by the Plaintiff before this court. There were in all 4 preliminary objections raised to S/N q3fnfKiRJk6ntbm7LWxpIw oppose the applications. The objections raised can conveniently be summarized as follows :-

The Additional Affidavit (Affidavit Tambahan) dated 10.2.2023 affirmed by Dato Sri Ismail b Abdur Rahman was filed late; out of time and in breach of the ROC 2012;

(ii) The Defendant had not obtained leave of Court to file the said Additional Affidavit;

(iii) The Additional Affidavit is flawed and defective and is not in compliance with the ROC 2012;

(iv) Dato Sri Ismail b Abdul Rahman does not have the necessary locus to affirm the affidavit on behalf of the R & M;

There are new issues raised in the Additional Affidavit which was never pleaded in the Statement of Defence filed by D1 and D3. Enclosure 84 : The impugned Additional Affidavit 20) The Plaintiff has argued that the Additional Affidavit in Enclosure 84 filed on 10.2.2023 was filed late, is highly irregular especially taking into consideration that it was done in breach of the provisions of the Rules of Court 2012). To compound matters further D1 did not file any application for leave of court to extend the time to file any further Affidavit. 21) It is to be noted that the Additional Affidavit was filed almost three

years after the Notice of Application for the Interim Injunction was filed and 2 years after all directions for filing of affidavits and written submissions had been given. Looking at the chronology of filing in the CMS e-filing system, it will be seen that the last affidavits were filed by parties sometime in December 2020 and they had filed their respective written submissions as directed for which hearing of the instant applications had already been fixed. S/N q3fnfKiRJk6ntbm7LWxpIw 22) However learned counsel for D1 has relied on and referred this court to the directions of the learned Timbalan Pendaftar on 27.1.2023 at 15:00:07 as follows : “Mahkamah 27/01/2023 15:00:07 Saya telah mendapatkan arahan ke atas perkara ini daripada Yang Arif sebentar tadi. Yang Arif arahkan saya untuk tetapan CM dihadapan Yang Arif secara zoom pada 17.02.2023, jam 9 pagi. Plaintif dikehendaki failkan notis permohonan (pindaan) sebelum tarikh tersebut. Bagi kand. 10 dan 56 : P dikehendaki failkan affidavit tambahan/pembetulan sebelum 10.2.2023. Jika D ingin failkan reply kepada affidavit tersebut, sila dapakan arahan Yang Arif pada 17.2.2023 nanti”. 23) In light of the above directions it was contended that the court had indeed given leave and allowed filing of further affidavits by both parties. 24) In order to put the record straight D1 did not seek directions nor did they obtain leave directly from the learned High Court Judge to file the impugned Additional Affidavit. However in view of the directions given by the Timbalan Pendaftar on 27.1.2023 this preliminary objection is difficult to sustain. In any event the Plaintiff filed its Affidavit in Reply on 8.3.2023 and addressed all the issues raised by D1. The Plaintiff had ample opportunity to reply to all the issues raised in the Additional Affidavit and hence I find that the Plaintiff was not misled nor was there any prejudice suffered by the Plaintiff on account of the delay in the filing of the additional affidavit. 25) In regard to the objection that the Additional Affidavit was flawed, defective and was not in compliance with the provisions of the ROC 2012, S/N q3fnfKiRJk6ntbm7LWxpIw I noted that the Additional Affidavit had been filed on 10.2.2023, which was within the time frame set and fixed during the case management proceedings before the Timbalan Pendaftar. 26) In any event it has been the consistent standing of the courts that preliminary objections raised solely based on non-compliance are strongly discouraged and disallowed as provided under O. 2 r. 3 of the ROC 2012 which states as follows : “Preliminary objection for non-compliance of rules not allowed (O. 2 r. 3)

A Court or Judge shall not allow any preliminary objection by any party to any cause or matter or proceedings only on the ground of non-compliance of any provision of these Rules unless the Court or Judge is of the opinion that such non-compliance has occasioned a substantial miscarriage of justice or occasioned prejudice that cannot be cured either by amendment or an appropriate order for costs or both.” 27) The court must consider the overriding interest of justice and not just the technical compliance of the rules (see Kejora Aman Sdn Bhd v HMS Corporation Sdn Bhd [2016] 6 CLJ 1(COA). 28) It was evident from the Defendant’s contention that the purpose of filing the additional affidavit was to update the court as to the status of the case. In this regard it should not occasion any substantial miscarriage of justice. On this note and in any event, the Plaintiff in its affidavit in reply to the additional affidavit has more than ably responded to all the substantive issues raised by D1. In light of the above, I exercised my discretion to dismiss the preliminary objections in (i), (ii) and (iii). S/N q3fnfKiRJk6ntbm7LWxpIw The standing of Dato Sri Ismail b Abdur Rahman to file affidavits on behalf of D1 29) The R & M has objected to Dato Sri Ismail b Abdur Rahman deposing the Additional Affidavit as well as the Affidavits used in support and in reply on behalf of D1. 30) The Plaintiff exercised its rights under the Debenture and appointed Dato’ Dr Shanmughanathan a/l Vellanthurai as the R & M of D1 on 22.5.2018. This appointment was made on the grounds that D1 had defaulted in the repayments of the various sums due and owing under the credit facilities granted by the Plaintiff. It was thus contended that Dato Sri Ismail b Abdur Rahman was not authorized on behalf of D1 to file the injunction application and/or to prepare the affidavits on behalf of D1 as the R & M had never authorized him with such rights. It is also true that Dato Sri Ismail b Abdur Rahman had never obtained leave from the R & M to affirm the impugned affidavits on behalf of D1. 31) D1 has not and never disputed the appointment of the R & M but has filed the said injunction application inter alia to restrain the R & M from dealing with or disposing the properties. It is the Plaintiff’s case that the Debenture dated 16.6.2015 was created on the express conditions contained therein. 32) D1 was unconcerned with this issue and merely contended in reply that Dato Sri Ismail b Abdur Rahman had the necessary locus standi to file the impugned affidavits as it has been made clear that the Plaintiff had waived its rights and interest to the 18 lots of properties that is the subject of the dispute. It was contended that the Plaintiff merely had rights and control of only 9 lots out of the 27 lots as the other 18 lots were owned by other owners. S/N q3fnfKiRJk6ntbm7LWxpIw 33) I found that argument untenable. The law is clear on the subject. It is well established that once receivers and managers have been appointed, the director of a company no longer has authority over the company nor to act on its behalf. This was pointed out in the case of Score Option Sdn Bhd & Anor v Duar Tuan Kiat & Ors [2012] 4 1 CLJ 812 where the Court of Appeal stated as follows : “[5]......Once receivers and managers have been appointed, directors no longer have authority over the company or to act on behalf of the company. Since an action could interfere with the functions of the receivers and managers, as well as impact upon the assets of the company, the consent of the receiver and manager is necessary if the directors seek to conduct legal proceedings on behalf of the company against a third party. [6] The directors have residual authority to take action against the receiver and manager, the party appointing the receiver and manager for any misconduct or if the appointment of receiver and manager is contested." 34) D1 cannot on the one hand accept the Plaintiff’s right to appoint the R & M and on the other hand seek to restrain the exercise of the security document which provides for the appointment of the R & M. In the case of Cranbourne Enterprise Limited & Anor v Export-Import Bank of Malaysia Berhad & Ors [2019] 1 LNS 994 it was decided as follows : "[57] Hence, it is necessary to determine whether the Plaintiffs' claims in this action will either impinge or imperilled the property that is subject to the receivership and or whether the claims will interfere with the Receivers' functions in any way. The property in question is the Hotel. [59] The injunctions to restrain the Defendants from enforcing any security documents and or obstructing, disturbing or interfering with the Plaintiffs' operation of the Hotel, in my view, do interfere with the S/N q3fnfKiRJk6ntbm7LWxpIw Receivers' functions. It has the effect of restraining the Receivers from dealing with the sale of the Hotel. In fact, given that the Plaintiffs are not challenging the validity of the appointments of the Receivers, the injunction seeking to restrain the exercise of any security documents which necessarily include the 1st. legal charge is incongruous to the Plaintiffs' position. The Plaintiffs cannot on the one hand accept the 1st. Defendant's right to appoint the Receivers and on the other hand seek to restrain the exercise of the security document that provides for the said appointment." 35) In view of the authorities found in the cases cited above, I hold the considered view that Dato Sri Ismail b Abdur Rahman did not have the locus standi to initiate any action against the Plaintiff and the R & M. 36) It matters not whether the R & M had control of how many lots of the property which is the subject of this civil suit. The fact remained that the power and jurisdiction of the R & M emanates from the Debenture. The Debenture was lawfully and validly instituted and the appointment of the R & M has been duly registered with the SSM. D1 has not disputed the said appointment nor has there been any application filed to reject the appointment. D1 had been put to notice that it cannot carry on the company’s business in any way whatsoever nor enter into any commitment on behalf of the company without the explicit and prior approval of the R & M. I am in complete agreement with the Plaintiff’s contention that a director has no locus to file the injunction application on behalf of a company in receivership if the proceedings commenced with interfere with the functions of the R & M and which directly impinges on the properties subject to the R & M’s power as well as impact upon the assets of the company in question. It is necessary to seek first the consent of the R & M if the directors seek to conduct legal proceedings on behalf of the company. I would go so far as to consider this as an act of S/N q3fnfKiRJk6ntbm7LWxpIw interference with the functions of the R & M. For these reasons I find that the preliminary objection raised on this issue is in favour of the Plaintiff and must be accepted. 37) In case I am wrong on my findings on the preliminary objections, I shall go on now to consider the issues raised in the main applications. Encl 91 – D1’s application for an interim injunction 38) To recap, D1’s application by enclosure 91 is to seek for an interim injunction to restrain the Plaintiff whether on its own or through its R & M from enforcing their rights under the Facilities Agreement dated 16.6.2015, Charge Presentation No: 74072/2015 dated 16.7.2015, Power of Attorney dated 16.6.2015 and/or Debenture dated 16.6.2015. 39) The background facts of the case have been set out earlier in this judgment and I do not propose to rehash it here. 40) The function of a judge when hearing an application for an interlocutory injunction has been well set out in the holy grail case of American Cynamid Company v Ethicon Ltd [1975] 9 AC 396 (cited with approval in the Court of Appeal case of Keet Gerald Francis Noel John v Mohd Noor @ Johan b Abdullah & 2 Ors [1995] 1 CLJ 293). In summary the principles to be applied before the Court may grant an interlocutory injunction is found in the answers to following questions : i) whether there are serious issues to be tried; ii) whether the balance of convenience favours the granting of the injunction; and iii) whether damages are an adequate remedy. S/N q3fnfKiRJk6ntbm7LWxpIw 41) With the abovesaid legal principles firmly set in mind, I now turn back to consider the application in Enclosure 91. Whether there are serious issues to be tried 42) First, this Court has to decide whether there is a serious question to be tried in order to preserve the status quo. 43) In considering whether there are serious issues to be tried the Court must be satisfied that the reasons provided for the application is not frivolous or vexatious. It would be useful to be reminded that the Court ought not to embark into a factual finding of facts regarding the dispute and it should not try to determine the actual merits of the respective parties’ case. 44) The grounds for the application for an interim injunction are set out in D1’s Affidavit in support dated 15.9.2020 (Encl 29). The main grouse raised there was the complaint that the Plaintiff is entitled to sell through the tender process if at all only 9 units out of the 27 units since the other 18 units belong to other owners. It was contended that there was mala fide on the part of the Plaintiff to sell the whole of the property bearing in mind that the Plaintiff via its solicitors had admitted in their letter dated 24.1.2018 they held only 9 out of the 27 units as security pursuant to the Loan Facilities taken out. 45) In addition to that counsel for D1 referred the court to the “Information Memorandum” attached to the tender for sale dated 21.8.2020 advertised in the local newspapers wherein the offer to sell was for the entire asset and not restricted merely to the 9 units. S/N q3fnfKiRJk6ntbm7LWxpIw 46) D1 were themselves keen to purchase the remaining 9 units and have demanded that they be granted the first right of refusal to purchase the said property and “better” any offer received. 47) The above were the grounds listed out in support of the application for the interim injunction in September 2020. When the year 2023 rolled around, D1 through its newly appointed solicitors had on 10.2.2023 filed Enclosure 84 the abovesaid affidavit giving further additional grounds to support the application. Needless to say, the Plaintiff vigorously objected to the new issues raised in the additional affidavit. 48) Counsel for the Plaintiff drew my attention to the inordinate delay in the filing of the additional affidavit and to make matters worse it contained fresh issues that were never pleaded in their defence. I must say I find merit in the arguments of counsel for the Plaintiff. The law is trite that parties are confined to their pleadings and the court before whom the case is brought is constrained to decide only on the issues raised in them. This doctrine is based on sound principles for it helps the court to identify and adjudicate the matter that is before it in an orderly manner. It prevents surprise as parties are informed in advance of the case which they have to meet. This reminder was expressed by the Federal Court in the case of Iftikar Ahmed Khan v Perwira Affin Bank Bhd [2018] 1 CLJ 415 as follows : [29] It is settled law that parties are bound by their pleadings and are not allowed to adduce facts and issues which they have not pleaded: Samuel Naik Siang Ting v Public Bank Bhd [2015] 8 CLJ 944, State Government of Perak v Muniandy [1985] 1 LNS 117, Veronica Lee Ha Ling & ORs v Maxisegar Sdn Bhd [2009] 6 CLJ 232. In Lee Ah Chor v Southern Bank Bhd [1991] 1 CLJ (Rep) 239 it was held that where a vital issue which was not raised by the parties in their pleadings, it S/N q3fnfKiRJk6ntbm7LWxpIw could not be allowed to be granted and to succeed on appeal. A decision based on an issue which was not raised by the parties in their pleadings is liable to be set aside: Yew Wan Leong v Lai Kok Chye [1990] 1 CLJ Rep 330. In The Chartered bank v Yong Chan [1974] the Federal Court set aside the judgment of the trial judge as it was decided on an issue not raised on the pleadings. In that case the trial judge erred in concluding that the pleadings included a claim for breach of contract as well as a claim for libel.” 49) The role played by pleadings cannot be overstated. It is a cardinal rule that parties are bound by their pleadings. In this instant case D1 is bound by their pleadings and must not be allowed to adduce facts and submissions on matters which are not pleaded. On this note and following the decision of the Federal Court in Iftikar Ahmed Khan (supra) I rule that it is not open to the Defendants to raise issues not pleaded before hand. If there is any new defence or any material particulars in support of the application which the Defendants want to add in the pleadings, they must apply for and obtain leave to amend the pleadings and give the Plaintiff the opportunity to amend their own pleadings. 50) Coming back now to the narrative, it is significant to note that D1 had never challenged the Debenture upon which the powers of the R & M is based on. Under the Debenture it is clearly provided that the moneys secured through the loan facilities shall become immediately payable to the Plaintiff upon the happening of certain specified events including default in payment of the principle sums. Likewise here the Plaintiff may at any time after the principle sums secured shall have become payable by D1 appoint a R & M over the properties and assets charged under the Debenture. It cannot be emphasized enough that there is no challenge to the Debenture nor is there a challenge to the appointment of the R & M. D1 had in my view more than ample time and opportunity to repay the S/N q3fnfKiRJk6ntbm7LWxpIw loan and/or to challenge the appointment of the R & M. Since they did not do any of the above, that appointment must therefore remain valid accordingly. I hold that the grievances levelled against the R & M are misconceived. 51) It would be remiss of me not to refer to the case of Kawood Sdn Bhd v HSBC Bank Malaysia Bhd & Ors [2001] 1 LNS 355 where the Court in dealing with a similar issue had this to say : “Under Clause 10 of the Debenture, the 1st Defendant may at any time after the principle monies hereby secured shall have become payable by the plaintiff appoint a Receiver and Manager. Therefore the 2nd and 3rd defendants were rightly appointed as Receiver and Manager when the plaintiff failed to comply with the letter dated 5.1.2000.” 52) From the evidence gathered through the facilities agreement including the Debenture and the Power of Attorney, it will become clear that at the outset the whole of the land was charged to the Plaintiff, not just those 9 units. This can be seen in the Charge Form (Exh 199 of the Affidavit in Support by D1). 53) It is relevant at this juncture to note that while the 9 units are under imminent foreclosure proceedings, the Plaintiff has undertaken in its letter dated 24.1.2018 to exclude and exempt the 18 units from any foreclosure proceedings and legal action that may be taken against D1. The 18 units are secure and cannot be ‘touched’. I take the view based on the letter of undertaking the Plaintiff is aware and will abide with the proviso that foreclosure has to be strictly subjected to any restriction in interest on the properties and this will be made known to the intended purchasers. I regret that I do not share the Defendants’ apprehension that there was S/N q3fnfKiRJk6ntbm7LWxpIw mala fide intention on the part of the Plaintiff to sell off the whole of the property. Under the circumstances D1 has no reason to believe that the sale will affect the rights of any of the units not assigned or charged to the Plaintiff. 54) In relation to this issue I was also minded to determine whether the injunction if allowed would impinge or imperil the functions of the R & M in any way. At this juncture I find that the injunction if allowed will certainly effect and restrain the R & M from dealing with the sale of the property. I find that since D1 is not challenging the validity of the appointment of the R & M, the injunction seeking to restrain the exercise of the powers given to the R & M is somewhat incongruous to the Defendants’ position. On the one hand D1 accepts the Plaintiff’s right to appoint the R & M and on the other hand they seek to restrain the exercise of the Debenture that provides for the powers and functions of the R & M. 55) In the upshot I am satisfied and I make the finding that there are no serious issues or questions to be tried leading me to the conclusion that damages is an adequate remedy. 56) I now turn to the Plaintiff’s complaint that there was inordinate delay on the part of D1 to apply for this interim injunction. It should be stated here that D1 filed this notice of application on 15.9.2020, one year after the Writ and SOC was filed and almost 2 years after the R & M had been appointed. D1 offered no convincing explanation as to why the application was filed late. In fact there was no explanation offered at all. As such the inordinate delay reflected a lack of bona fides on the part of D1. I am compelled to find that D1 is guilty of inordinate delay. The inordinate delay on the part of D1 also militates against the granting of the injunction application. S/N q3fnfKiRJk6ntbm7LWxpIw Where the balance of convenience lies 57) On this issue I am of the view that the balance of convenience lies in refusing the injunction mainly for the reason that D1 has clearly breached the terms of the facility agreement by its failure to pay the outstanding sums due and owing. The Plaintiff and the R & M are merely performing their obligations in pursuance to the Debenture on account of the failure of D1 to service the loan facilities. I am unable to agree with the Defendants that there was mala fide on the part of the Plaintiff in bringing this action against them. In my view those allegations are quite unfounded. 58) In this context, the R & M who is appointed by the Plaintiff is duty bound under the Debenture to bring in the assets, realise it and distribute it to the debenture holder in satisfaction of its claim. To allow the injunctive relief sought by D1 would in my judgment obviously bar the R & M from commencing all the necessary actions to perform his duties under the Debenture. This view is neatly summed in the following passage from the decision in the case of Casa Bangsar Sdn Bhd & Ors v Amanah International Finance Sdn Bhd & Anor [2019] MLJU 1908 where it was held : “[33] Having considered the affidavit evidence, it is obvious to this court that this instant Suit and the Application for Interim Injunction would interfere with the functions of the 2nd Defendant as the R & M appointed under the Debenture. This finding is based on the following reasons –

the 2nd Defendant who is appointed by the 1st Defendant as the R & M is duty bound under the Debenture to bring in the assets of the 1st Plaintiff, realise it and distribute the proceeds to the 1st Defendant (debenture holder) in satisfaction of its S/N q3fnfKiRJk6ntbm7LWxpIw claims. Any surplus from the proceed would be returned to the 1st Plaintiff company;

the injunctive relief sought by the Plaintiffs in the Statement of Claim and the Application for Interim Injunction if granted would obviously bar the 2nd Defendant from commencing all or any necessary actions to perform his duties under the Debenture which essentially concerned the realization of the 1st Plaintiff’s assets for purpose of satisfying the 1st Defendant’s claim under the Debenture;

the Plaintiffs failed to justify the instant Suit is for the benefit of the 1st Plaintiff. On the contrary, the 1st Plaintiff would be engaged in a protracted “battle” with the R & M who is tasked to manage the assets of the 1st Plaintiff for purpose of paying off the indebtedness incurred by the 1st Plaintiff under the Murabahah Facility;

any order restraining the 2nd Defendant from realizing the 1st Plaintiff’s assets will undoubtedly be detrimental to the 1st Defendant as the recovery process of the financing facilities granted to the 1st Plaintiff would come to a halt or be delayed. It is obvious such a situation would not be in the interest of the 1st Defendant. On the contrary, the 1st Defendant’s interest would obviously be threatened by this instant Suit and the

there is no allegation whatsoever of impropriety on the part of the 2nd Defendant as the R & M of the 1st Plaintiff. [34] Based on the authorities cited, the right of directors of a company which is under receivership to exercise their residual power to commence action is not without limitation. Such power may only be S/N q3fnfKiRJk6ntbm7LWxpIw exercised if by doing so would not interfere with the functions of the receivers and managers or that it would not impinge on the assets of the debenture holder or the challenge relate to the impropriety of the receivers and managers. As it is this court’s findings that this instant Suit and the Application for Interim Injunction would completely hamper the 2nd Defendant from performing its functions under the Debenture and that the 1st Defendant’s assets would be imperilled by the same, the Plaintiff’s contentions that they need not obtain consent from the 2nd Defendant to initiate this instant Suit is untenable.” 59) It is clear to me that the R & M has been validly appointed and his appointment was never disputed. I am inclined to accept the Plaintiff’s contention that this application is an attempt to interfere with the performance and discharge of the duties of the R & M and to prevent the R & M from realising the properties. 60) As had been observed earlier D1 had been accorded several extensions of time to repay the outstanding sums. D1 had in no uncertain terms peremptorily informed the Plaintiff that they should be give the right to ‘better’ the offer made by any potential purchaser. That would however only be possible if the tender is allowed to proceed. If the tender does not proceed, there is no way to know how much any potential purchaser would be willing to offer. 61) On this matter, guidance can be obtained from the decision in Sigur Ros Sdn Bhd & Anor v Maybank Islamic Berhad & Anor [20180 1 LNS 220 where the Court dismissed a similar line of argument raised by the party seeking the injunction relief. It was held : “[49] As to the appointment of receiver, it is the Plaintiffs’ contention that the balance of convenience is in favour of restraining the appointment S/N q3fnfKiRJk6ntbm7LWxpIw of a receiver is premised on the misconceived notion that the First Plaintiff will be able to pay if more time is given. To my mind, it was the same excuse which has been given by the First Plaintiff to the First Defendant for the past many months in order to buy time for the First Plaintiff, including the assertion that the First Plaintiff will be receiving monies in the future to repay the First Defendant. On the other hand, the First Defendant has already granted the First Plaintiff at least 4 extensions of the bullet repayment deadline. Despite that, to date the First Plaintiff has failed, refused and/or neglected to repay its indebtedness under the financings. The First Defendant thus has good reason to believe that the First Plaintiff is insolvent and unable to pay its debt and granting more time for repayment would be futile. In view of the First Plaintiffs obvious financial difficulty, depriving the First Defendant of its security and allowing the First Plaintiff to continue to control and manage its assets would severely prejudice the First Defendant’s interest.” 62) In determining the question as to where the balance of convenience lies, this court must apply the principle that it must take the course that appears to carry the lower risk of injustice (see Alor Janggus Soon Seng Trading Sdn Bhd v Sey Hoe Sdn Bhd & 2 Ors [1995] 1 CLJ 461). Here the balance of convenience lies with the Plaintiff as they have been severely prejudiced due to the default by D1. D1 has failed to pay the amount due and owing having already enjoyed the sums drawn from the facilities. Under the Debenture, it is clearly provided that the loan facilities shall become immediately payable upon default of payment. D1 had been given ample time and opportunity to repay the loan and it has not been able to honour the promises made. To restrain the Plaintiff from enforcing the Debenture would be an injustice and therefore there is no doubt in my mind that the balance of convenience tilts heavily in favour of the Plaintiff. S/N q3fnfKiRJk6ntbm7LWxpIw Whether damages would be an adequate remedy 63) The next question for me to consider is whether damages would be an adequate remedy if the application for an interim injunction is refused. It is the duty of D1 to satisfy this Court that damages would not be an adequate remedy. I regret to say that D1 has failed to convince me that it has discharged the said legal burden satisfactorily. 64) The properties in question are purely commercial in nature and were intended to be sold to third party purchasers. They are of no sentimental value to D1 nor to the other purchasers. Thus any recourse can be compensated in damages which can be quantified. 65) On this ground alone the application for injunctive reliefs is dismissed with costs. Enclosure 10 – the Summary Judgement Application 66) For the purpose of hearing Encl 10, other than the Writ of Summons and the Statement of Claim dated 18.9.2019 the following affidavits were considered by this Court :

Encl 11 : Plaintiff’s Affidavit in Support of Encl 10 affirmed by Nor Hishamuddin b Mohd Nizar, the Plaintiff’s Head of

(ii) Encl 12 : the 4th Defendant’s Affidavit in Reply affirmed by Nabilah bt Sanusi on 12.2.2020 on behalf of D2 and herself;

(iii) Encl 15 : Plaintiff’s Affidavit in Reply affirmed by Nor Hishamuddin b Mohd Nizar on 29.2.2120; S/N q3fnfKiRJk6ntbm7LWxpIw

(iv) Encl 16 : the 1st and 3rd Defendants’ Affidavit in Reply affirmed by Dato Sri Ismail b Abdur Rahman on 2.3.2020;

Encl 23 : the Plaintiff’s Affidavit in Reply affirmed by Nor Hishamuddin b Mohd Nizar on 10.7.2020; and

(vi) Encl 82 : the 1st Defendant’s Additional Affidavit affirmed by Dato Sri Ismail b Abdur Rahman on 10.2.2023. 67) The grounds for the summary judgement application were as stated in the notice of application as well as in the Plaintiff’s Affidavit in Support in Encl 11. 68) It bears reiteration that D1, the borrower had defaulted in servicing the loan facilities. In consequence the Plaintiff filed the Writ and SOC to claim for judgement against D1 being the principal debtor and against D2, D3 and D4 as the guarantors, the sums due and outstanding under the loan facilities. 69) The Plaintiff had also produced the Certificate of Indebtedness to prove the actual amount due to the borrower, which D1 had not disputed nor challenged. 70) In view of the above, the Plaintiff contended that there was evidence before this Court of the conclusiveness of the indebtedness of D1 to the Plaintiff and the Plaintiff prayed for Enclosure 10 to be allowed with costs. 71) In resisting the summary judgment application, the Defendants’ contentions are in essence identical to those raised in the application to S/N q3fnfKiRJk6ntbm7LWxpIw support the interim injunction reliefs. Hence there is no necessity to repeat them here. 72) In addition, D2 and D4 have raised the contention that the Plaintiff’s claim was brought in bad faith as it ought to avail itself of its legal remedies against the principal debtor first before coming after the guarantors. It was contended that the Plaintiff had failed to exercise due diligence in preserving and enforcing the securities. 73) In view of the issues raised, the Defendants pleaded that the case ought not to be disposed off in a summary manner but to proceed with trial in order for the Defendants to defend their case. Decision on Encl 10 (Summary Judgment) 74) The law on summary judgement is trite. In National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, the Federal Court clearly laid down the preliminary requirements in an application for summary judgement under Order 14 Rules of Court 2012 to be the following : “(i) The defendant must have entered an appearance;

(ii) The statement of claim must have been served on the defendant; and

(iii) The affidavit in support of the application must comply with the requirements of rule 2 Order 14. ... if the plaintiff fails to satisfy either these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him [see Order 14 Rules 3 and 4(1)]" S/N q3fnfKiRJk6ntbm7LWxpIw 75) Where all the issues are clear and the matter in substance can be decided without having to go through a full trial, the matter ought to be resolved and decided in an Order 14 application. That exercise of power by the Court can only be undertaken in very clear cases. The Court must look at the matter as a whole and ask itself whether the Defendants have satisfied the Court that there is an issue or question in dispute which ought to be tried or there ought for some other reason to be a trial of that claim or part of that claim. The issue raised must be an arguable issue that requires a trial in order to determine it. 76) The approach to be taken in establishing whether the Defendants have raised an arguable case was summarized in Bank Negara Malaysia v Mohd Ismail Ali Johar & Ors [1992] 2 CLJ Rep. 186 as follows : “Under O. 14 when a fact is asserted by one party and denied by another, and such denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or other statement by the same deponent or is inherently improbable in itself, the judge has a duty to reject such assertion or denial, thereby rendering the issue as not triable. In our opinion, unless this principle is adhered to, a Judge is in no position to exercise his discretion judicially under an O. 14 application. Thus, apart from identifying the issues of fact or law, the Court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue." 77) Bearing in mind the foregoing principles, I find no merit in the issues raised by the Defendants in resisting this summary application. I find that the Defendants had failed to raise any triable issue that would warrant or justify a trial to be held. S/N q3fnfKiRJk6ntbm7LWxpIw 78) In my considered view the Plaintiff is merely discharging its contractual functions and thus the Defendants’ contention that the loan facilities granted to D1 was tainted with fraud, illegality and/or misconduct of its previous management cannot be sustained. As a party to the loan facilities agreement D1 is bound by the terms and conditions in the Term Loan which they willingly and voluntarily entered into. It is settled law that the terms and conditions of an agreement that has been agreed to and entered into by the parties cannot be ignored or brushed aside (see Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 3 CLJ 159). The Defendants are under a contractual obligation to repay the amount outstanding as stipulated in the loan agreement. 79) On the averment of fraud, illegality and misconduct of D1’s previous management, it has to be noted that a financial institution such as the Plaintiff is not obliged to go behind and investigate into the management and set up of D1. A mere allegation of fraud should not, ipso facto mean that a trial must take place. In my respectful view there is no duty imposed on the Plaintiff to make inquiries and it would be too onerous to require the Plaintiff as a bank to verify and investigate into the matter. 80) It is observed that there is no cogent evidence documentary or otherwise for these serious allegations. There was nothing to even suggest the presence of fraud, illegality and misconduct. To my mind the allegations were general, vague and were not comprehensively particularised. I could find no specific details of such allegations, hence the only conclusion to be drawn would be that those allegations are bare averments, insufficient and must be rejected. On this note, I find strong support in the Supreme Court case of Ting Ling Kiew & Anor v Tang Eng Iron Works Co Ltd [1992] 2 MLJ 217 which held as follows : S/N q3fnfKiRJk6ntbm7LWxpIw “With regard to fraud, if there be any principle which is perfectly well settled, it is that general allegations, however strong may be the words in which they are stated, are insufficient even to amount on an averment of fraud of which any court ought to take notice. And here I find nothing but perfectly general and vague allegations of fraud. No single material fact is condescended upon, in a manner which would enable any court to understand what it was that was alleged to be fraudulent…” 81) With regard to the allegation of mismanagement and special treatment accorded to the former directors of D1, I am in complete agree with the Plaintiff that D1, is in law a separate legal entity from its directors. What goes on between its directors is none of the business of the Plaintiff. The Plaintiff cannot be made liable for any alleged unauthorised actions of D1’s former management. What concerns the Plaintiff is its business with D1, the company, the legal entity. At this juncture it would be opportune to refer to the case of ARL Associates Sdn Bhd & Ors v Bank Kerjasama Rakyat Malaysia Bhd [2012] MLJU 1450 where the Court of Appeal decided as follows : “[20] A company must be treated as a separate person to that of its participants. Therefore the company’s obligations and liabilities are entirely its own and not those of its participants. Thus, when a company incurs a contractual obligation or a liability in tort, that obligation or liability is that of the company and not of its members or officers. [21] A company can sue and be sued in its own name, being a separate legal entity, the company may enforce its rights by suing. It can definitely incur liabilities and be sued by other parties (see Foss v Harbottle [1843] 2 Hare 461) where the court held that as a separate person in law, a company must enforce its rights by itself in its own name.” 82) Premised on the above authority and in the context of the present case I am of the view that there are no merits in the assertion that special S/N q3fnfKiRJk6ntbm7LWxpIw treatment were accorded to the former directors of D1 due to the personal relationship of one of its directors to the Plaintiff’s Chairman. Merely by being related without more does not necessarily mean that they were given special treatment. These are bare averments without any cogent evidence to support it. There is a paucity of evidence to support those allegations. In my judgment the Defendants’ complains are obviously unsustainable and they have no realistic prospect of succeeding in this issue. 83) On the issue of the expiry of the Building Plan even before the loan facilities were granted, I agree with the Plaintiff that conditions such as this were clearly the responsibility of D1 to comply with and not the Plaintiff. Furthermore the Defendants have not been able to show to the Court that it was a condition precedent for the Loan facilities to be offered or approved. The Letter of Offer was not subject to the existence of a valid Building Plan. It merely stipulated that the borrower shall not effect any change in the layout plan or building plan in respect of the property without the Plaintiff’s prior written consent. I am of the considered view that the Plaintiff as a bank had no duty of care nor any contractual obligation to investigate into the existence of the Building Plan. To impose such a duty on the Plaintiff would be too onerous. In any event none of these arguments would relieve D1 from their contractual obligation to repay the monies that is due and owing. 84) Finally, and the last nail in the coffin would be the conclusiveness of the Certificate of Indebtedness issued by the Plaintiff and received by D1. Clause 21.1 of the Loan Facilities Agreement dated 16.6.2015 states as follows : S/N q3fnfKiRJk6ntbm7LWxpIw “21.1 Evidence of Indebtedness In any proceedings relating to this Facilities Agreement, a statement as to any amount due and payable to the Lender under this Facilities Agreement which is certified as being correct by an officer of the Lender shall, save for manifest error, be conclusive and binding on the Borrower.” 85) It is trite that the Certificate of Indebtedness is conclusive evidence of the Defendants’ indebtedness as decided in Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685 where the Federal Court held that a certificate of indebtedness operates in the field of adjectival law, and it excuses the bank from adducing the proof of debt. It is for the borrower to disprove the amount claimed. I find there was nothing raised by the Defendants to indicate or suggest any manifest error on the face of the Certificate of Indebtedness nor is there any fraud shown. The Defendants have not denied the certificate of Indebtedness. It is therefore conclusive proof of D1’s indebtedness to the Plaintiff. 86) It is worth noting that D1 had made several requests to the Plaintiff for time to settle the amount owing. To compound that, there is evidence to show that D1 had written a letter on 30.6.2018 proposing to pay the sum of RM3,000,000.00 first and such payment was indeed paid and credited to the Plaintiff’s account on 31.5.2018. D1 is therefore estopped from disputing the sums owing. At no time did D1 bring up any dissatisfaction against the Plaintiff’s actions which are the issues now canvassed before this Court. It would have been reasonable to expect a prompt and vigorous denial had D1 genuinely disputed the Plaintiff’s claim. What makes it even more evident is D1’s part payment without any protest. It is plain to see that the issues raised while not pleaded were also not raised contemporaneously or immediately upon the occurrence of the default. It thus does not lie in the mouth of D1 to come out guns blazing S/N q3fnfKiRJk6ntbm7LWxpIw aimed straight against the Plaintiff after the civil suit has been filed. In this respect I feel compelled to agree with the Plaintiff that the issues raised here are afterthoughts and in bitter retaliation for the rejection of D1’s proposed terms of settlement. 87) In my judgment D1 has failed to honour their respective payment obligations under the financial facilities given to them. On the whole, I am satisfied that they have no defence to the Plaintiff’s claim. Liability of D2, D3 and D4 as guarantors 88) Clause 1 of the Corporate Guarantee and Indemnity Agreement dated 16.6.2015 and Clause 2.1(a) of the Guarantee and Indemnity Agreement dated 16.6.2015 provides that the liability of the guarantors under the Guarantee were not merely as sureties but also as principal debtors for the consideration set out therein, for the repayment of all outstanding sum due and owing from D1 to the Plaintiff including all interest. 89) As guarantors D2, D3 and D4 had also agreed that they would keep the Plaintiff fully indemnified for all expenses and costs including legal costs incurred by the Plaintiff. As guarantors they are bound by the terms of the guarantee and cannot now choose to deny it. 90) I accept the Plaintiff’s contention that the bank has the right to sue the guarantors without resorting to the securities. D2, D3 and D4 have no right to dictate to the Plaintiff or make any demand that the bank avail itself of its legal remedies against the principal debtor first. The Plaintiff must be left unfettered and at liberty to exhaust those remedies given to it under the terms of the contract signed between the parties. In this matter the requirement for demand has been satisfied. S/N q3fnfKiRJk6ntbm7LWxpIw 91) Looking back at the pertinent clauses of the guarantee, it gives rise to no doubt that the said Guarantees shall be a continuing guarantee and security for all moneys owing from time to time by D1 to the Plaintiff. I am satisfied that no bona fide triable issues have been raised by D2, D3 and D4. Conclusion 92) This Court is mindful of the principles laid down by case authorities when considering summary judgment applications and was anxious that the Defendants ought not to be shut out from defending unless it is clear that there are no bona fide triable issues to merit the claim to go for trial. In the circumstances I find that the Defendants had failed to discharge their obligation in proving the presence of any triable issues which would warrant a trial. 93) To my mind this is a most suitable case for summary judgment to be entered against all the Defendants. The application is therefore allowed with costs. Dated 30 July 2023. (JULIE LACK) Judge High Court of Malaya Shah Alam, Selangor Darul Ehsan S/N q3fnfKiRJk6ntbm7LWxpIw Counsel For the Plaintiff : Daniel Chuah Chen Yean (MESSRS. SIDEK TEOH WONG & DENNIS) For the 1st Defendant : Caroline Lee with Bell Wong (MESSRS. JASON NG & PARTNERS) For the 3rd Defendant : - (MESSRS. HAZIQ A SUBHI & CO.) For the 2nd and 4th Defendant : Haris Mohd Noor (MESSRS. ADNAN SHARIDA & ASSOIATES) For the Aggrieved Party : Nur Hidayah (MESSRS. ROHAMAT & LING) S/N q3fnfKiRJk6ntbm7LWxpIw