Malaysian Trustees Berhad v Tan Hock Keng (WA-22NCC-314-09/2016)

MALAYSIAN TRUSTEES BERHAD (No. Syarikat : 21666-V)

MALAYAN BANKING BERHAD (No. Syarikat : 3813-K)

AFFIN BANK BERHAD (No. Syarikat : 25046-T)

AFFIN HWANG INVESTMENT BANK BERHAD (dahulunya dikenali sebagai Affin Investment Bank Berhad) (No. Syarikat : 14389-U)

ALLIANCE BANK MALAYSIA BERHAD (No. Syarikat : 88103-W)

ALLIANCE INVESTMENT BANK BERHAD (No. Syarikat : 21605-D)

AMBANK (M) BERHAD 5 (No. Syarikat : 8515-D)

HONG LEONG BANK BERHAD (No. Syarikat : 97141-X)

HSBC BANK MALAYSIA BERHAD (No. Syarikat : 127776-V)

PUBLIC BANK BERHAD (No. Syarikat : 6463-H)

RHB BANK BERHAD (No. Syarikat : 6171-M)

OCBC BANK (MALAYSIA) BERHAD 15 (No. Syarikat : 295400-W)

CIMB BANK BERHAD … DEFENDAN- (No. Syarikat : 13491-P) DEFENDAN (Melalui Tuntutan Balas) 20 GROUNDS OF DECISION [1] The present appeals have been brought by Tan Hock Keng, (Defendant in Original Action and Plaintiff in Counterclaim) in the 25 light of my decision in allowing on 10/3/2017 -

the summary application of Malaysian Trustees Berhad (Plaintiff in Original Action) under O.14 of the Rules of Court 2012 (‘ROC 2012’) (encl.7); and

(ii) the application of Malaysian Trustees Berhad (D1 in 30 Counterclaim) and Financial Institution Holders (D2 to D13 in Counterclaim) (‘FI Holders’) to strike out Tan Hock Keng’s (Plaintiff in Counterclaim) Defence and Counterclaim dated 31/10/2016 under O.18 r.19 (encl. 17) ROC 2012. 35 3 5 Brief Factual Matrix [2] The Plaintiff is the Trustee for various holders of RM120million in nominal value of Redeemable Convertible Secured Loan Stocks (‘the RCSLS’) issued by one Pilecon Engineering Berhad (‘Pilecon’). The Plaintiff holds all the security 10 to secure the RCSLS, as trustee for all the holders of the RCSLS. [2.1] Pilecon had originally incurred debts to various creditors. These creditors included the 12 FI Holders, who had initially granted facilities to Pilecon. [2.2] Due to Pilecon’s inability to settle its debts to its creditors 15 including the FI Holders, Pilecon had pursuant to a scheme of arrangement under s.176 of the Companies Act 1965 (‘CA 1965’) and a Court Order of 12/1/2006 sanctioning such scheme, issued the RCSLS to its secured creditors, including the FI Holders, to settle the initial debts. 20 [2.3] Pilecon had also issued Irredeemable Convertible Unsecured Loan Stocks (‘ICULS’) to its unsecured creditors. [2.4] The FI Holders presently hold 74.8% of the RCSLS issued by Pilecon. [2.5] The only other holder of the RCSLS presently is a company 25 called Allure Gold (S) Pte Limited (‘Allure Gold’), which had bought over its present holding of RCSLS from other initial RCSLS holders. It is undisputed that Allure Gold is aligned with Pilecon and connected to the Defendant herein. [2.6] Pilecon defaulted in payments on due dates under the 30 RCSLS since 28/3/2008. A series of litigation ensued between 4 Pilecon, the Plaintiff and the FI Holders as Pilecon sought to 5 restrain recovery action by the Plaintiff as summarised - 30/4/2010 Plaintiff convened an Extraordinary General Meeting (‘EGM’) of the FI holders to pass a resolution, among others, that the Trustee be authorised to take all steps and actions against 10 Pilecon to enforce payments of all amounts due under the Trust Deed. All the FI Holders, as RCSLS holders holding 74.2% of the RCSLS, voted in favour of the said resolution. The said resolution was not carried as 15 a special resolution which required at least 75% votes. 14/10/2010 FI Holders filed an Originating Summons vide Kuala Lumpur High Court No:D-24NCC-337- 2010 (‘the KL Action’) against Plaintiff, to 20 compel Plaintiff to exercise its discretion and take all necessary steps to recover the amounts owing under the RCSLS. In this connection, the Defendant argued that the FI Holders had breached the terms of the Trust Deed of 6/11/2016 by filing the KL 25 Action against the Plaintiff as their Trustee to compel the Plaintiff to exercise its discretion and take all necessary steps to recover the amounts owing under the RCSLS. I find this argument is misplaced because (i) the Defendant is not a party to the Trust Deed and the KL Action and (ii) this argument is unrelated to the 30 Defendant’s liability under the Guarantee; hence it does not 5 constitute a triable issue. 5 Further, I adopt what I have stated in para 2.6 above as to the convening of the EGM on 30/4/2010 by the Plaintiff - 27/10/2010 The Court granted the Order as sought by the FI Holders, in the KL Action. 6/12/2010 Pilecon and Allure Gold who holds the balance 10 25.8% of the RCSLS, applied to intervene in the KL Action and to set aside the Court Order of 27/10/2010. 27/1/2011 The Court dismissed the said applications with costs. 15 27/4/2011 Pilecon’s and Allure Gold’s appeals to the Court of Appeal were dismissed. Allure Gold did not take the matter further to the Federal Court. 29/6/2011 Pilecon’s application for leave to appeal to the Federal Court was dismissed. 20 31/1/2011 Pilecon filed a suit under Shah Alam High Court Suit No.22NCvC-131-2011 (‘Pilecon’s 1st Suit’) to, inter alia, remove the Plaintiff as the RCSLS Holders’ Trustee as well as to perpetually restrain Maybank from taking action to recover 25 the outstanding RCSLS monies. 15/4/2011 Pilecon’s injunction application was dismissed by the Court. 4/10/2011 Pilecon’s appeal therefrom was also dismissed by the Court of Appeal. 30 29/9/2011 Pilecon filed another action vide Kuala Lumpur 6 High Court Suit No:22NCC-1577-09/2011 5 (‘Pilecon’s 2nd Suit’) to prevent Plaintiff and the FI Holders from pursuing recovery action. 14/12/2011 Pilecon’s application for an injunction was dismissed by the Court. 21/12/2011 On the application of the FI Holders, Pilecon’s 2nd 10 Suit was struck out. 25/7/2013 Pilecon’s appeals against the dismissal of its injunction on 14/12/2011 and the striking out of its actions on 21/12/2011 respectively were all withdrawn without liberty to file afresh. 15 [2.7] On 17/5/2012, the Plaintiff filed for recovery of the outstanding sums due under the RCSLS on behalf of all the RCSLS Holders (FI Holders and Allure Gold) under Kuala Lumpur High Court Suit No.22NCC-778-05/2012 against Pilecon (‘Plaintiff’s Recovery Action’). Pilecon then embarked on 20 negotiations with the FI Holders to try to resolve the debt under the RCSLS held by them. [2.8] On 11/7/2013, by consent the Court allowed all RCSLS Holders to be parties in the Plaintiff’s Recovery Action. On 11/7/2013, Pilecon entered into a Consent Judgment in 25 the Plaintiff’s Recovery Action with the FI Holders whereby, among others, Pilecon was to pay an aggregate sum of RM66,485,766.21 in respect of the outstanding RCSLS sums due to the FI Holders, with interest thereon at the rate of 5% per annum from 27/3/2010 to the date of full payment (‘Consent Judgment’). Allure Gold 30 consented to the Consent Judgment. 7 [2.9] Pilecon failed to make payments on the agreed payment 5 dates thereby breaching the terms of the Consent Judgment. [2.10] Pilecon filed Kuala Lumpur High Court Suit No.22NCC-207- 06/2014 (‘Suit 207/Pilecon’s 3rd Suit’) to set aside the Consent judgment and obtained an injunction order on an ex-parte basis to restrain Maybank from, among others, instituting winding up 10 proceedings against it. On 3/7/2014, the FI Holders and the Plaintiff applied to strike out Pilecon’s 3rd Suit. On 12/3/ 2015, Pilecon withdrew Pilecon’s 3rd Suit without liberty to file afresh. 15 [2.11] Pilecon filed Shah Alam High Court Originating Summons No.24NCC-74-08/2014 (‘Pilecon’s 4th Suit’) and obtained a restraining order dated 18/8/2014 on an ex-parte basis to restrain, among others, the FI Holders and the Plaintiff from taking or continuing any action whatsoever against Pilecon for recovery of 20 the sums due to the FI Holders. On 30/12/2014, Pilecon’s 4th Suit was withdrawn by Pilecon without liberty to file afresh. [2.12] On 5/3/2015, a Settlement Agreement was entered into between Pilecon, Dual Vest and Awal Kelana (termed the 25 ‘Obligors’ in the Settlement Agreement) with the Plaintiff and the FI Holders where, among others, cl.2 provides - “2.

SETTLEMENT SUM 1 At the request of the Company, the FI Holders hereby agree to accept the payment by the Company of the following as full and final 30 settlement of the outstanding sums due and payable to the FI Holders under the Consent Judgment upon the terms and subject to the conditions hereinafter contained:- 8

the sum of Ringgit Malaysia Sixty Three Million Two Hundred 5 Sixty Nine Thousand Seven Hundred Ninety Five and Sen Thirty Four (RM63,269,795.34) (the “RCSLS Settlement Sum”); and

a further sum of Ringgit Malaysia One Million Three Hundred Forty Seven Thousand Five Hundred Sixty Eight and Sen Twelve 10 (RM1,347,568.12) (the “Outstanding Fees and Expenses”) being the outstanding Trustee’s Fees of RM947,568.12 and the outstanding legal fees and expenses incurred by the FI Holders of RM400,000.00 in each case as at the date of the Consent Judgment; 15 (collectively, the “Settlement Sum”)

2.2 Subject to the terms and conditions herein contained and the provisions of Clause 2.5, the Settlement Sum shall be repaid and/or paid from the proceeds of the sale and/or redemption of the Sale Assets at 20 the times and in the manner set out in this Agreement”.

The definition of the following terms pursuant to cl.1.1 of the Settlement Agreement are as follows: ‘Sale Assets’ “means the Redemption Properties and the Tranche 25 Sale Properties, collectively” ‘Tranche Sale Properties’ comprise - “(i) the “First Tranche” comprises:

the No.1 Glenmarie Property;

the Casa Vista Properties, which consist of the AK Casa Vista Property and DV Casa Vista Properties; and

the Faber Tower Properties.

(ii) the “Second Tranche” comprises:

the No.3 Glenmarie Property; 40

the Raub Property. ‘Redemption Properties’ “means the Mentakab Lands and the Senai Land”

The Sale Assets shall be sold by an Independent Agent 45 9 KPMG, appointed by the Obligors who “shall provide the Trustee 5 [the Plaintiff] and the FI Holders a monthly report on the status and progress of the disposal of the Sale Assets and such information as may be required by the FI Holders from time to time” (cl.4.1 of the Settlement Agreement).

The Defendant, a director of Pilecon was to execute a 10 guarantee to make payment to the Plaintiff up to a limit of RM60,000,000.00. I shall discuss other relevant terms of the Settlement Agreement under ‘Findings’ later. [2.13] On 5/3/2015, the Defendant did execute a Guarantee in 15 favour of the Plaintiff. [2.14] By the Guarantee, the Defendant agreed that, among others, if by the Settlement Date, i.e. by 19/12/2015, the Net Proceeds from the sale of the Assets less the Outstanding Fees and Expenses (as defined in the Settlement Agreement) are 20 insufficient to settle the Settlement Sum, or if the settlement arrangement under the Settlement Agreement is terminated, the Defendant shall pay such shortfall sum to the Plaintiff in order to settle the Settlement Sum, up to RM60,000,000.00.

after taking into account the monies received by the Plaintiff as stated in para 2.14 above, the Net Proceeds received by the 10 Plaintiff (as defined in the Settlement Agreement) was in the sum of a total of RM4,398,843.54;

after taking into account and deducting the payment of the Outstanding Fees and Expenses in the sum of RM1,347,568.12 (as provided for in the Settlement Agreement and the Guarantee), 15 the eventual net amount received by the Plaintiff was RM3,051,275.42;

this was insufficient to settle the Settlement Sum, as the Settlement Sum was only reduced to RM60,218,519.92 (see Statement of Account as at 17/3/2016 and Statement of 20 Indebtedness dated 30/11/2016). [3]

Cl. 2.1 “2.1 Guarantee and Indemnity In consideration of the FI Holders agreeing at the request of the 10 Company [Pilecon] and the Guarantor [Defendant] to the proposed settlement of the outstanding sums due and payable to the FI Holders under the Consent Judgment upon and subject to the terms and conditions of the Settlement Agreement, the Guarantor HEREBY UNCONDITIONALLY AND IRREVOCABLY 15 GUARANTEES in his personal capacity that:

if by the Settlement Completion Date, the Net Proceeds after payment of the Outstanding Fees and Expenses is insufficient to settle the RCSLS Settlement Sum, the Guarantor shall on 20 demand pay such shortfall (the “Shortfall”) to the Trustee [Plaintiff] for the account of the FI Holders in order to settle the RCSLS Settlement Sum up to RM60,000,000.00 only in accordance with

if the settlement arrangement under the Settlement Agreement is terminated pursuant to the provisions thereof by reason of the occurrence of an Event of Default, the Guarantor shall pay to the Trustee on 31 December 2015 and whether formally demanded or 30 not, the RCSLS Settlement Sum up to RM60,000,000.00 less any Net Proceeds actually received by the Trustee”.

Cl. 1.2 - Definitions ““Net Proceeds” means the proceeds from the disposal and/or 35 redemption of the Sale Assets (excluding all expenses deducted and sums retained pursuant to Clause 11.2, 11.3 and 11.4 of the Settlement Agreement respectively and any sum in respect of which the Trustee is subject to an undertaking to 40 refund issued by it pursuant to Clause 10.6 of the Settlement Agreement which has not lapsed) which are actually paid to and received by the Trustee”. ““Settlement means 19 December 2015”. 45 Completion Date” 14 ““RCSLS means the sum of Ringgit Malaysia Sixty Three 5 Settlement Sum” Million Two Hundred Sixty Nine Thousand Seven Hundred Ninety Five and Sen Thirty Four (RM63,269,795.34) required to be paid by the Company to the FI Holders towards settlement of the outstanding sums due and payable under the 10 Consent Judgment in accordance with and subject to the provisions of the Settlement Agreement”.

Cl. 2.2.1 - “The Defendant shall pay the Shortfall within 30 days from the date of 15 completion of the last SPA entered into prior to the Settlement Completion Date”.

Cl. 2.3 - “As between the Guarantor [the Defendant] and the Trustee [the Plaintiff] 20 but without affecting the Company’s [Pilecon’s] obligations, the Guarantor shall be liable as if he were the sole principal debtor and not merely the surety and accordingly the Guarantor shall not be discharged, nor shall any of his liabilities be affected by anything …”. 25

Cl. 2.4 - “The Defendant’s obligations under the Guarantee are and will remain in full force and effect by way of continuing security for the RCSLS Settlement Sum up to RM60,000,000 until no sum remains payable under the RCSLS Settlement Sum and the Settlement Agreement”.

Cl. 2.5.2 - “Without prejudice to the generality of the foregoing, nothing herein or in the Settlement Agreement shall be construed as imposing any obligation (whether at law or in equity) on the Trustee or any of the FI Holders to 35 exhaust its remedy to sell the Sale Assets before enforcing this Agreement or any other remedies or exercising any other rights against the Guarantor nor shall it be a defence to the Guarantor that the Sale Assets or any of them were not sold for the highest or any price or that any SPA has not been completed or is terminated whether by reason of 40 the Obligors’ or the Sale Agent’s fault or the fault of the purchaser”.

Cl. 6.1 - “The Defendant shall bear all expenses which was incurred by the Plaintiff as a consequence of the occurrence of any event of default 45 15 under the Settlement Agreement, on a full indemnity basis”.

Cl. 6.3 - “A statement by a duly authorized officer of the Plaintiff as to any amount due and payable to the Plaintiff under or arising from the Settlement Agreement and/or the Guarantee (save and except for any manifest 10 error) is binding and conclusive against the Defendant that such amount is in fact due and payable for all purposes”.

Cl. 6.7 - “The Defendant’s obligation to pay under the Guarantee constitute 15 separate and independent obligations, shall apply irrespective whether the Plaintiff has commenced any other action or whether the Plaintiff has first exhausted any remedy or having first sold or disposed of any assets or properties” (Emphasis added) 20 Findings [7] Vide encl.7, the Plaintiff sought for summary judgment to be entered against the 1st Defendant for -

RM60,000,000.00;

interest at the rate of 5% per annum on the sum of RM60,000,000.00 from the filing date of the Writ of Summons, 7/9/2016 to date of full payment. [8] For the purpose of this application, I am satisfied the 30 preliminary requirements have been complied with ie, (i) the defendant has entered 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 r. 2 of O.14 of the ROC 2012. Upon these considerations being satisfied, the 35 plaintiff will have established a prima facie case and it comes 16 entitled to judgment and the burden shifts to the defendant to satisfy 5 the Court why judgment should not be given against him (per George Seah FJ in National Company For Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ (Rep) 283 at p.285 e-f). [9] It is also trite law that in a claim for summary judgment the 10 burden is on the defendant to raise triable issues though a complete defence need not be shown; the determination of whether an issue is triable or not must necessarily depend on the facts or the law arising in each case as disclosed in the affidavit evidence before the Court (per Mohamed Azmi SCJ in Bank Negara Malaysia v Mohd 15 Ismail & Ors [1992] 2 CLJ Rep 186; [1992] 1 MLJ 400 at p.408 A-B and further on the same page E-F, the Supreme Court held - "Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in 20 itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable". [10] Bearing the legal principles in mind the triable issues 25 which the Defendant attempted to raise in opposing encl.7 as gleaned from the Defendant’s Affidavit in Reply affirmed by the Defendant on 31/12/2016 and the Defendant’s Defence and Counterclaim of even date have been summarised by the Plaintiff as follows: 30 “(a) the Defendant was “induced” to sign the Guarantee as the Settlement Sum was to be repaid from the sale of the Sale Assets and such arrangement was the sole consideration for the Defendant to sign the Guarantee (paragraph 26 of the

there was an “implied term” in the Settlement Agreement and the 17 Guarantee that the Defendant is obliged to pay the Shortfall only if 5 Trustee and the FI Holders had taken all reasonable steps to dispose of and/or sell the Sale Assets (paragraphs 24, 24(c), 29, 29(a), 29(c), 60, 66, 67 of the Counterclaim);

The FI Holders had “exclusive control” over the sale of the Sale 10 Assets and the appointment of the Independent Agent to facilitate the sale of the Sale Assets was the agent and acted on behalf of the FI Holders (paragraphs 24(d)(i) and (ii), 25(a) and (b) of the Counterclaim); 15

the issuance of the Notices of Default were wrongfully issued (paragraphs 50, 58 and 59 of the Counterclaim);

there was no event of default and the Plaintiff was not entitled to call on the Guarantee (paragraph 60(e) of the Counterclaim);

there was a total failure of consideration for the Guarantee (paragraph 62 of the Counterclaim);

there was a “collateral contract” between the FI Holders and the 25 Defendant to the effect that the FI Holders would not revert back to the Consent Judgment and that the Settlement Sum would only be paid from the proceeds of sale and/or redemption of the Sale Assets (paragraph 26 of the Counterclaim); 30

there was a “conspiracy” between the Plaintiff and the FI Holders, arising from a breach of their obligations under the Settlement Agreement (paragraphs 69, 70 and 71 of the Counterclaim)”. 35 [11] The Defendant sought for the following reliefs in the

a declaration that the Plaintiff and the FI Holders have breached the collateral contract to the Guarantee and are therefore not entitled to demand payment from the Defendant on 40 the Guarantee;

a declaration that the Plaintiff and the FI Holders have breached the implied term in the Guarantee and are therefore not entitled to demand payment from the Defendant on the Guarantee; 18

further or alternatively, a declaration that the Plaintiff and the 5 FI Holders have wrongfully and with intent to injure and/or to cause loss to the Defendant by unlawful means, conspired and combined together to procure that they would breach their obligations in the Settlement Agreement and/or the Guarantee;

a declaration that no amounts are due from the Defendant 10 to the Plaintiff and the FI Holders under the Guarantee. [12] Vide encl.17, the Plaintiff and FI Holders applied to strike out the Defendant’s Defence and Counterclaim on among others, the following grounds as summarised by the Plaintiff: 15 “(a) most of the issues raised in the Amended Statement of Claim herein were dealt with by the Court in Pilecon’s Suit No.180, where the High Court had decided they were of no merit. The principle of res judicata would be applicable; 20

with the termination of the settlement arrangement under the Settlement Agreement, it is expressly provided in the Settlement Agreement that the FI Holders would be entitled to recover the judgment sum owing to them, under the Consent Judgment and the Plaintiff is entitled to enforce the Security. This includes the 25

the Notices of Default are valid and binding on Pilecon and the Other Chargors; 30

the Trustee is entitled to enforce the Guarantee to recover the sums owing by the Defendant under the Guarantee for the FI Holders”. No event of default and the Plaintiff was not entitled to call on 35 the Guarantee [13] Under this head of argument the Defendant basically submitted that the Plaintiff was not entitled to call on the Guarantee because - 19

the Plaintiff and the FI Holders had purportedly failed to take 5 reasonable steps to dispose of and/or sell the Sale Assets which he said were intended to be the primary means of satisfying the Settlement Sum under the Settlement Agreement; and

there was no event of default under the Settlement Agreement. 10 [14] I find there is no merit in the Defendant’s argument as the Defendant is not the owner of the Security and neither has he made payment to the Plaintiff and has no locus standi to maintain any complaint against the Plaintiff and the FI Holders in relation to their 15 attempts to realise the Security. This is because of the express provisions of the Guarantee in particular cl.2.3 read with cl.2.5.2 and cl.6.7 (see para 6 above). [14.1] Further I draw support from the following authorities:

American Express Sdn Bhd v Dato Wong Kee Tat & Ors 20 [1990] 1 MLJ 91 where among others, the defendants/respondents (directors and shareholders of Singapore company) appealed against the order of summary judgment granted to the plaintiff/appellant (Bank having business address in Singapore) contending they should be given unconditional leave to defend. The 25 Singapore company defaulted in payment of the money loaned. The appellants brought a writ against the respondent claiming the sums due under their personal guarantees. Under the guarantees, the resondents undertook to be responsible until repayment of the ultimate balance whatever the position of the principal borrower. In 30 allowing the appellants to sign final judgment on the sums claimed 20 against all the respondents, the Supreme Court at p.98 G-I right to 5 p.99 A-B left, adopted the approach in Continental Illinois National Bank and Trust Company of Chicago v Papanicolaou; The Fedora [1986] 2 Lloyd’s Rep 441 where the Court of Appeal held - “(2) The purpose of the guarantee was to ensure immediate payment 10 if the principal debtor did not pay; the court ought not to interfere since the parties had specifically provided both in the loan agreements and the guarantees that payment should be made free of any set-off or counterclaim; it would defeat the whole purpose of the transaction, would be out of touch with business realities and would keep the bank waiting 15 for a payment which both the borrowers and the guarantors intended it should have while protracted proceedings in the alleged counterclaims were litigated; …”. (Emphasis added) 20

Bank Bumiputra Malaysia Bhd. v. Esah Binti Abdul Ghani [1986] 1 MLJ 16 where the Supreme Court at p.18 A-B left held that the lender has the right to proceed against the guarantor without first resorting to realise the security as follows: “… the right to sue the guarantor without resorting to the securities is 25 clearly recognised by Lord Selborne, and by Lord Blackburn, in the Scottish case of Ewart v. Latta. Lord Westbury, C, says: ‘Until the debtor has discharged himself of his liability, until he has fulfilled his own contract, he has no right to dictate any terms, to 30 prescribe any duty, or to make any demand on his creditor. The creditor must be left in possession of the whole of the remedies which the original contract gave him, and he must be left unfettered and at liberty to exhaust those remedies, and he cannot be required to put any limitation upon the course of legal action given by him by 35 his contract by any person who is still his debtor, except upon the terms of that debt being completely satisfied”. (Emphasis added) Defendant’s liability as a principal debtor 40 [15] In my considered view the Defendant has agreed to be a 21 principal debtor and not merely surety or guarantor of the debt as is 5 evident from cl.2.3 referred to in para 6 above. [15.1] As to what effect the principal debtor clause has, I agreed with the view succinctly expressed by Mary Lim J (now JCA) in EON Bank Bhd (previously known as Oriental Bank Bhd) v Mohd Yunus bin Alias & Ors [2010] 9 MLJ 587 at 595 as follows: 10 “In the context of guarantors, this clause is intended to allow the creditor the right to sue the guarantors in the event of a default without requiring the creditor to first seek recourse against the principal borrower. The creditor may sue both principal borrower and guarantors as principal debtors at the same time”. 15 (Emphasis added) [15.2] Further I find the Defendant who has executed the Guarantee in favour of the Plaintiff is estopped from alleging that he was only obliged to pay the Plaintiff if the Plaintiff and the FI Holders had taken all reasonable steps to dispose off and/or sell the Sale 20 Assets. The Defendant who undertook the obligation of Pilecon as a principal debtor under the Guarantee is bound to repay the Plaintiff for the amount owing under the Guarantee. I draw support from the case of Chong Yoong Choy v UOL Factoring Sdn Bhd [1996] 1 MLJ 421 at 424, wherein the Court of Appeal held - 25 “The appellant had expressly undertook the obligations of a principal debtor under the guarantee that he executed. It did not matter what happened between the assignor (Prebore) and the debtor (Gunung Mewah). As far as the respondent was concerned, it entered into the factoring arrangement encouraged by the 30 appellant's promise to play the role of surety as well as principal debtor … Under the doctrine of estoppels, it would be entirely inequitable and unconscionable to permit the appellant to now assert that the promise he gave, and upon the strength of which the respondent acted, was unenforceable”. 35 (Emphasis added) 22 5 Consideration for the Guarantee? [16] Under this head of argument, the Defendant contended there was a total failure of consideration when the Plaintiff terminated the settlement arrangement under the Settlement 10 Agreement and reverted to the Plaintiff’s original liability under the Consent Judgment among others for the following reasons: “5.1 All the terms in the Settlement Agreement comprise the “settlement arrangement” between the parties thereto; 15 5.2 The Plaintiff cannot and/or must not be allowed to cherry pick which terms in the Settlement Agreement comprise the “settlement arrangement” that they are entitled to terminate and those that they choose to rely on as still subsisting; 20 5.3 The Defendant signed the Guarantee as part of the global settlement arrangement such that whether it is the “settlement arrangement” that is terminated as now alleged by the Plaintiff or the “Settlement Agreement” that is terminated does not matter one whit as there would be no consideration for the Guarantee; 25 and

5.4 There is no clause in the Settlement Agreement that says that Guarantee survives the termination of the “settlement arrangement””. 30 [17] Regretfully I could not agree with the Defendant’s contentions. Cl.2.1 of the Guarantee among others states - “In consideration of the FI Holders agreeing at the request of the 35 Company [Pilecon] and the Guarantor [Defendant] to the proposed settlement of the outstanding sums due and payable to the FI Holders under the Consent Judgment upon and subject to the terms and conditions of the Settlement Agreement, the Guarantor HEREBY UNCONDITIONALLY AND IRREVOCABLY GUARANTEES in 40 his personal capacity that …”. (Emphasis added) 23 [17.1] Based on cl.2.1 of the Guarantee, in my view there was 5 good consideration given that there was the Settlement Agreement entered into between Pliecon, Other Chargors (Dual Vest and Awal Kelana) (all 3 called ‘Obligors in the Settlement Agreement’), the Plaintiff and the FI Holders. In this regard I agreed with the view expressed by the High 10 Court in Arab Malaysia Finance Berhad v. Kilang Papan Dasatu Sdn Bhd & Ors [2010] 1 LNS 1614 when it rejected the 3rd guarantor’s argument that there was no consideration for the guarantee. In Arab Malaysia Finance Berhad v. Kilang Papan Dasatu Sdn Bhd & Ors (supra), the Plaintiff‘s claimed against the 15 1st to the 5th Defendants jointly and severally for RM256,410.94; the claim against the 1st defendant was pursuant to several hire purchase agreements; the claim against the 2nd, 3rd and 4th defendants was pursuant to several guarantees and the claim against the 5th defendant was pursuant to a corporate guarantee 20 after the hire purchase agreements were restructured with the consent of the 2nd, 3rd and 4th defendants. At para 22, the Court held - “The 3rd Defendant in his affidavit in reply averred that the hire-purchase agreements were executed prior to the guarantees and there was no 25 consideration for the guarantees. … Looking at clause 1 of the Guarantees it was stated that "in consideration of your agreeing to enter into at my/our request the said Hire-Purchase Agreement with the Hirer, I/we, the undersigned hereby jointly and severally undertake and guarantee". It was clearly stated that it was at the request of the 30 guarantors. That was also the consideration given. At the material times the 2nd, 3rd and 4th Defendants agreed to become the guarantors and signed the guarantees. If they did not agree, the Plaintiff would not have entered the hire-purchase agreements with the 1st Defendant. They understood the nature and consequences of signing the several 35 guarantees. There was no allegation that the Defendants were forced or induced to sign the guarantees or that it was involuntary”. 24 5 [17.2] Apart from entering into the Settlement Agreement, the Plaintiff and the FI Holders gave good consideration when it gave time indulgence to Pilecon and the Other Chargors to repay the sums owing under the Consent Judgment. The Defendant as Director of Pilecon who stood to benefit from the time indulgence 10 given cannot now allege that there was no consideration for the Guarantee. In Guthrie Waugh Bhd. v. Malaiappan Muthuchumaru [1972] 2 MLJ 62 on appeal the issue before the Federal Court was the same issue before the trial judge, namely, a question of fact 15 whether there was any consideration for the deed of arrangement to support the respondent/defendant’s promise. The appeal was against the dismissal by the High Court of the appellants/plaintiffs’ action against the respondent in the sum of RM123,050.61. The plaintiffs supplied goods to 22 different estates to the said value of 20 RM123,050.61. The defendant assumed responsibility for the payment of the said sum to the plaintiffs. The defendant entered into a deed of arrangement with the plaintiffs to pay the said sum not later than a certain date and by monthly instalments till the whole sum was paid and if any instalment amount was not paid within 15 25 days from the date it was due and payable, then the whole sum of RM123,050.61 or the balance amount was to become due and payable to the plaintiffs. The defendant failed to make any payment up to the date of the filing of the action. The Federal Court agreed with the finding of the trial judge 30 on the issue of consideration where at p.65, Gill FJ (as he then was) opined - 25 “It would seem clear that the learned judge directed the pleadings to be 5 amended to bring out the real issue between the parties, because he held that the defendant's preliminary objection as regards absence of consideration for the deed was not a real one if one read it along with the other correspondence. As regards consideration he held, in my opinion quite rightly, that – 10 …

an express agreement to give time is good consideration as forbearance to sue, 15 …

where a creditor entitled to sue, gives time to pay on defendant's request, that is enough forbearance to constitute consideration”. 20 Following what has been propounded in Guthrie Waugh Bhd. (supra), it has been expressly provided in cl.2.1 of the Guarantee that - “(a) if by the Settlement Completion Date of 19/12/2015, the RCSLS Settlement Sum is not paid; or 25

if the settlement arrangement under the Settlement Agreement is terminated, the Defendant shall pay the Shortfall Sum of up to RM60 million”. (see para 6(a) above) 30 [17.3] Hence I agreed with the Plaintiff’s submission that - “(a) the rights and liabilities of the Defendant are to be ascertained from the four corners of the Guarantee. 35

the Guarantee was entered between the Plaintiff and the Defendant to reflect the binding agreement that if a further default were to arise under the Settlement Agreement, the FI Holders would have an additional security to resort to, i.e. the Guarantee, in recovering the amounts owing by Pilecon.

all the terms of the Guarantee were already agreed between the parties and the Defendant had the benefit of legal advice (his lawyer were Messrs Edwin Lin & Suren, and his personal legal advisor was Mr Ong Kok Keng) prior to signing the Guarantee. 45 Hence, the Defendant is estopped from alleging that he was “induced” to execute the guarantee. The Defendant was fully aware of the terms therein. 26 5

the Defendant cannot deny the express terms in the Guarantee”. Whether there was a collateral contract? [18] The crux of Defendant’s argument is the Defendant‘s contention that there was a collateral contract between the FI 10 Holders and the Defendant to the effect that the FI Holders would not revert back to the Consent Judgment and that the Settlement Sum would be paid from the proceeds of sale and/or redemption of the Sale Assets. In this connection the Defendant among others contended - 15

“that as part of the settlement arrangement to induce him to sign the Guarantee, the Lenders agreed to reduce the amount owing by Pilecon under the Consent Judgment to the Settlement Sum. The reduction of Pilecon’s liability to the Settlement Sum by the Lenders and further that such sum would be paid from the 20 proceeds of sale and/or redemption of the Sale Assets was the sole consideration for him to sign the guarantee”;

(ii) “Clause 2.2 of the SA expressly provides for the settlement sum to be paid from the proceeds of sale and/or redemption of the 25 Sale Assets”;

(iii) “It was an implied term of the Guarantee that the Defendant was obliged to pay the Shortfall only if the Plaintiff and the Lenders had taken all reasonable steps to sell and/or dispose of the Sale 30 Assets and/or had properly discharged their obligations as set out in the Settlement Agreement (the “Implied Term in the Guarantee”)”. [19] With respect I am unable to agree with the Defendant’s 35 submission for the following reasons. Firstly, the governing provision is s.92 of the Evidence Act 1950 (‘the Evidence Act’) (the relevant part) states - 27 “When the terms of any such contract, grant or other disposition of 5 property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting, varying, adding to, or subtracting from its terms: 10 …”. There are provisos to this but the Defendant has not satisfied any of them. [19.1] At the outset I wish to state I agreed with the submission of 15 the Plaintiff that the cases relied on by the Defendant for the proposition that a collateral/warranty can exist side by side the main agreement can be distinguished in the following manner:

Tan Swee Hoe Co. Ltd. v. Ali Hussain Bros. [1980] 2 MLJ 16 at p.18D & G left column. 20 “The appellants had orally agreed to allow the respondents to occupy their premises for so long as they wished upon payment of $14,000 as tea-money. The written tenancy agreements were later executed by the parties but neither referred to the appellants' promise. A dispute arose between the parties and the appellants eventually sued for vacant 25 possession. In their defence, the respondents claimed that under the oral agreement, they were entitled to stay as long as they wished and so long as they paid the rent regularly. The trial judge dismissed the appellants’ claim and ordered them to register a lease in favour of the respondents for a term of 28 years. On appeal the court dismissed the appellants’ 30 appeal. In our case, the Defendant does not condescend to any particulars to support the Defendant’s allegation that there was a “collateral contract” between the FI Holders and the Defendant”. 35 (Emphasis added)

(ii) Kandasami v. Mohamed Mustafa [1983] 2 MLJ 85 (Privy Council) at p.88B-C right column. “In the case, the court found that there was collateral contract if parties were to put their names to a document and one party represents and the 40 other party agrees that the document shall not as between themselves, have any legal effect so that it exists only to answer some other purpose. 28 5 In the present case, there is not an iota of evidence to suggest that there was any such representation and/or agreement made between the Defendant and the Plaintiff. The Defendant’s allegation that there was purportedly a collateral contract, is completely inconsistent with the express terms contained in the Settlement 10 Agreement”. (Emphasis added)

(iii) Industrial & Agricultural Distribution Sdn Bhd v Golden Sands Construction Sdn Bhd [1993] 3 MLJ 433 at p.442 B-C. “In this case, the defendant alleged that the plaintiff made the oral 15 statement amounting to a collateral contract. The court held that there is no sufficient evidence to show that the plaintiff and the defendant agreed to the making of a collateral contract and such allegation was merely a bare allegation. In fact, the Court held that a cautious approach is adopted by the courts in recognizing the existence of a collateral 20 contract, especially in cases where it contradicts the terms of a written contract. The Defendant’s allegation of the existence of a collateral contract is clearly inconsistent with the express terms of the Settlement 25 Agreement and the Guarantee”. (Emphasis added)

(iv) Tan Chong & Sons Motor Company (Sdn.) Berhad v. Alan McKnight [1983] 1 MLJ 220, no collateral agreement but one agreement, partly oral, partly written and partly by conduct;

Yong Joo Chuan & Anor v. Tan Teck Chiang [1981] 1 MLJ 210 at 211 E-F right column on oral promise;

(vi) Hartela Contractors Ltd v. Hartecon JV Sdn Bhd & Anor [1999] 2 CLJ 788 at p.798 f-i to p.799 a-i, merely repeating the legal principle in Tan Swee Hoe (supra) and Kandasami (supra). Cases 35

(iv), (v) & (vi) are not applicable. [19.2] I find the cases cited by the Plaintiff are of assistance. In Seven Seas Industries Sdn Bhd v Philips Electronic Supplies

(M) Sdn Bhd & Anor [2008] 5 MLJ 157 at 164[11] to 165, the Court 29 of Appeal held - 5 “The doctrine of collateral contract or agreement is recognised in this country by virtue of proviso (b) to s 92 of the Evidence Act 1950 which allowed to be admitted in evidence any separate oral agreement as to any matter on which a document is silent and which is not inconsistent with its terms. Unless the additional 10 evidence sought to be introduced falls within the scope of any of the provisos, it should not be allowed to be introduced as it would be to contradict, vary, add or subtract from the terms of the agreement (per Chang Min Tat FJ in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 at p 233). Such collateral contract must be 15 viewed strictly (see Heilbut, Symons & Co v Buckleton [1913] AC 30). No agreement would be safe from being re-written by one party in court of law if parole evidence which do not fall within the proviso of s 92 of the Evidence Act is admitted in evidence (see Tindok Besar Estate Sdn Bhd)”. 20 (Emphasis added) [19.3] In the factual matrix of this present case, I agreed with the Plaintiff’s submission that -

The Defendant did not condescend to any particulars to support the Defendant’s allegation that there was a “collateral 25 contract” between the FI Holders and the Defendant.

The allegation that there was a collateral contract to the effect that the FI Holders would not revert back to the Consent Judgment and that the Settlement Sum would be paid from the proceeds of sale and/or redemption of the Sale Assets, is completely 30 inconsistent with the express terms contained in the Settlement Agreement.

It is expressly set out in clause 15.1 of the Settlement Agreement that in the event Pilecon and the Other Chargors fail to remedy such default as described in the Notice of Default, the 35 Plaintiff shall forthwith terminate the settlement arrangement by notice in writing whereupon the Plaintiff and the FI Holders are entitled to continue with all recovery action, to recover the original 30 total full Judgment sum. This is clear and unambiguous.

The Defendant has voluntarily executed the Guarantee with the benefit of legal advice and had read and fully understood the contents of the Guarantee and the Settlement Agreement. Further Clause 5.1(h) of the Guarantee provides - “The Guarantor hereby represents and warrants to the Trustee that: - 10 …

in the execution and delivery of this Agreement, the Guarantor has sought, obtained and relied upon his own independent legal 15 advice and has not relied upon any representation, statement or advice from the solicitors or agents or officers of the Trustee or the FI Holders. The guarantor hereby further confirms that he has read and fully understood the contents of this Agreement and the Settlement Agreement and agrees to the terms hereof and the 20 thereof”. In Bank Bumiputra Bhd v Malek & Joseph Au (a firm) [1995] 4 MLJ 251, pursuant to a tenancy agreement entered between the plaintiff/bank and the defendant, the plaintiff applied for summary 25 judgment for (i) arrears of rental and (ii) vacant possession. Arifin Zakaria J (as he then was) found that the principal ground of the defendant in opposing the summary application was his reliance on a collateral contract between him and the plaintiff which existed side by side with the main contract; the collateral contract consisted of 30 the oral undertaking given by the plaintiff’s agent to the defendant to the effect that the defendant was free at any time to reduce the floor space as and when the need arose (option). In allowing the summary judgment, His Lordship among others at p.258 E held - “Furthermore, if the option is so important to the defendant as the 35 defendant now claims, I could not see any plausible reason why it could not be incorporated into the agreement. The defendant being a firm of solicitors ought to be presumed to have acted on legal 31 advice in entering into the agreement with the plaintiff. In the 5 circumstances of this case, I am of the view that the defendant should not be allowed to add to the express terms and conditions of the agreement base merely on the flimsy evidence that was put before the court”. (Emphasis added)

The Defendant is clearly estopped from maintaining such allegation against the Plaintiff and the FI Holders (Boustead Trading (1985) Sdn. Bhd. v. Arab-Malaysian Merchant Bank Berhad [1995] 3 MLJ 331 (FC) at 345 and 348). 15 Implied term can be read into the Settlement Agreement and the Guarantee? [20] The Defendant contended that it was necessary to “imply” a term into the Settlement Agreement and the Guarantee that the FI Holders are required to take all reasonable steps to dispose off 20 and/or sell the Sale Assets “in order to give business and/or commercial efficacy to the Settlement Agreement”. [20.1] The Defendant further contended that the “express terms of the Settlement Agreement would be rendered otiose in the absence of the Implied Term” based on these arguments - 25 “Clause 4.1 of the Settlement Agreement provides that KPMG was required to provide the Plaintiff and the Lenders a monthly report on the status and progress of the disposal of the Sale Assets and such information as required by the Lenders from time to time. The Lenders were therefore made aware of the status and progress of the disposal of 30 the Sale Assets; Clauses 6.4, 6.5, 6.8, 7.3 and 8.7 of the Settlement Agreement confer the Lenders exclusive control over the sale of the Sale Assets, in the form of the final say as to whether an offer to purchase a Sale Asset was 35 to be accepted by KPMG; KPMG was ostensibly appointed by Pilecon, Awal Kelana and Dual Vest as their Agent but in reality was in fact the agent for the Plaintiff and the 32 Lenders to sell the Sale Assets”. 5 [21] With respect in my considered view the Defendant’s arguments are without merit for the following reasons. [21.1] The argument on “Implied Term” is closely knitted to the contention of the Defendant regarding the existence of a collateral 10 contract which I have addressed in paras 18 & 19 and the sub paras thereunder which I shall not repeat. [21.2] It must not be forgotten that Pilecon and the Other Chargors were at all material times legally represented by Messrs. Edwin Lim & Suren and advised by its in house counsel Mr. Ong Kok Peng and 15 are bound by the terms of the Settlement Agreement. The Defendant had read and fully understood the contents of the Guarantee and the Settlement Agreement and agreed to the express terms therein. Given these circumstances and there being no protest and complaints, the Defendant cannot now be heard to 20 say otherwise that there were other terms to be implied into the Settlement Agreement and the Guarantee. In Arab-Malaysian Merchant Bank Bhd & Ors v Court Square Pelita Sdn Bhd & Ors [2000] 5 MLJ 273 which concerned an appeal from the decision of the Deputy Registrar who allowed 25 summary judgment. In rejecting the defendant’s argument to invoke the implied terms of the agreement, Ian Chin J (as he then was) at pp.288-289 stated - “The court may infer from the evidence that the parties to a contract must have intended to include the terms in the contract. To successfully 30 invoke the implied terms, two tests must be satisfied, namely: (i) the term is something so obvious that it goes without saying; and (ii) the term should be of a kind as to give business efficacy to the transaction of the contract. 33 5 … In the instant case, the court could not foresee the plaintiffs or any financial institutions agreeing to the terms as submitted by the first defendant. They would obviously be rejected rather than agreed to 10 outright. Those terms also could hardly be efficacious for the parties to be left in such a limbo as to suspend the obligations until the first defendant could sell the buildings which would result in loss to both the plaintiffs and the first defendant. 15 Time for repayment is a matter already covered by the loan agreement. It is a canon of construction that an express term in a contract excludes the possibility of implying any term dealing with the same subject-matter as the express term … The court is not permitted to imply a term for repayment after a reasonable time as the time for 20 repayment has already been spelt out”. (Emphasis added) [21.3] Further it is imperative to bear in mind a very important express term in the Guarantee i.e. cl.2.5.2 to be read together with 2 25 equally important express terms, cl.2.3 and cl.6.7 (see para 6 above). With these obligations expressly carved out, how then can one imply terms as contended by the Defendant. [21.4] In relation to the Defendant’s arguments of FI Holders having the exclusive control over the sale of the Sale Assets and 30 for KPMG to provide the Plaintiff and FI Holders a monthly report:

The Plaintiff submitted the aforesaid allegation has been raised by Pilecon and the Other Chargors as parties to the Settlement Agreement and has been adjudicated by Noorin binti Badaruddin JC (now High Court Judge) in Pilecon’s Suit No.180 and 35 relied on certain findings of the learned JC stated in her Grounds of Judgment dated 29/9/2016 as follows: “(a) the Independent Agent is not an agent of the Plaintiff [Pilecon] and/or the FI Holders [see paragraph 116, p.48]; 40

it cannot be disputed that KPMG is Pilecon’s agent [see 34 paragraph 119, p.49];

monthly requirement of report to be given to the FI Holders is to allow the FI Holders to monitor Pilecon and its’ agent in that they are doing what they are supposed to do, which is to sell the properties [see paragraph 120, p.50];

there is nothing unusual or wrong for the Plaintiff and the FI Holders to have a final say in respect of all the offers received in respect of the Sale Assets. An offer made has a certain price and the Plaintiff as the chargee has the right to decide whether the 15 purchase price can be accepted to enable the redemption of the properties and that is also the reason why the bankers have the right to say whether the offer is acceptable as they are going to discharge the charge properties [see paragraph 120, p.50]; 20

the Plaintiff, as Trustee cannot tell the Independent Agent to sell because the properties are in the name of the owners, i.e. Pilecon and its subsidiaries [see paragraph 120, p.50]”.

(ii) The Plaintiff, based on several authorities, submitted that the 25 Defendant, being a director of Pilecon is fully aware of Pilecon’s Suit No.180 and is precluded by the principles of res judicata and issue estoppel from re-litigating the same issues.

(iii) The Defendant submitted that since the arguments on whether there is a collateral contract to the Guarantee and whether 30 the Implied Term can be read into the Settlement Agreement and the Guarantee raised in the present case have not been ventilated in Pilecon’s Suit No.180, res judicata or issue estoppel do not apply. [21.5] Having examined the grounds relied on by the Defendant in 35 support of the purported issues on “collateral contract” and “implied term” in this present case, I observed these are the very grounds relied by the Defendant in Pilecon’s Suit No.180 based on the judgment of the learned JC, save that there is no reference or usage of the terms “collateral contract” and “implied term” or in other words 40 35 camouflaged by these terms. Therefore I am inclined to accept the 5 Plaintiff’s submission that the Defendant being the director of Pilecon is fully aware of Pilecon’s Suit No.180 and is thus estopped by res judicata or issue estoppel from re-litigating the same issues. In this regard I drew support, among others, from the following cases aptly cited by the Plaintiff:

Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 where the Supreme Court at p.197 H - I to p.198 A, I to p.199 A-B, among others held - “What is res judicata? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. 15 When a matter between two parties has been adjudicated by a court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties, or in other words, the parties should accept it as the truth … It is only just that no one ought to be vexed twice for the 20 same cause of action. … On the other hand, the issue estoppel literally means simply an issue which a party is estopped from raising in a subsequent proceeding. 25 However, the issue estoppel, in a nutshell, from a consideration of case law, means in law a lot more, ie that neither of the same parties or their privies in a subsequent proceeding is entitled to challenge the correctness of the decision of a previous final judgment in which they, or their privies, were parties”;

Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1996] 2 MLJ 57 (CA) at p.65 I to p.66 A-E; and

Dato’ Sivananthan Shanmugam v. Artisan Fokus Sdn Bhd [2015] 2 CLJ 1062 where Idrus Harun JCA (delivering the judgment of the Court of Appeal at 1073 [20] made this observation - 35 “Issue estoppel would involve going over precisely the same issue or point already decided in the first action or refer to an issue that has been previously litigated and determined between the same parties and the 36 same issue is raised in a subsequent proceedings between the same 5 parties involving a different cause of action to which the same issue is relevant and one of the parties seeks to reopen the issue”. (Emphasis added) Following the same at 1074 [23] His Lordship posed a poser for the Court’s determination - 10 “[W]hether it is an inflexible rule that the parties to the judicial decision must be the same persons as the parties to the proceedings in which the estoppel is raised”. At 1075 [25], His Lordship among others opined - 15 “[25] In the present appeal, since the present action would undoubtedly involve going over precisely the same facts as in the previous HTF suit, and accepting the broader approach and the wider sense of res judicata as the preferred and correct legal position, the fact that the parties to this suit are different from the HTF suit does not disentitle the 20 appellant to invoke the doctrine of issue estoppel to bar the respondent from relitigating a specific issue that had been decided in the prior separate action. The doctrine also applies to a non-party. It is therefore not necessary for parties to be the same in both actions”. 25 (Emphasis added) [22] In relation to the contention that the Plaintiff and the other Lenders (FI Holders) have failed to take all reasonable steps to sell the Sales Assets in breach of the Implied Term, the Defendant 30 alleged that an offer made to KPMG, the Independent Agent was purportedly rejected by the Independent Agent based on the Plaintiff’s and FI Holders’ instructions. This concerned an offer received by the independent Agent from one Exclusive Hub Sdn. Bhd. (‘Exclusive Hub’) for the Aquarius Apartments owned by 35 Pilecon. [22.1] At the outset it has to be borne in mind that the Defendant is not the owner of any of the Sale Assets and this issue would not 37 detract and absolve the Defendant’s liability under the terms of the 5 Guarantee which I have alluded to above. The facts pertaining to the offer from Exclusive Hub have been briefly stated at para 12 and 12.1 to 12.20 of the Plaintiff’s Reply Submission dated 10/2/2017 and which I adopt. Based on the events that occurred, in my view it is misconceived for the Defendant to allege that there was no sale of 10 the Aquarius Apartments because of the FI Holders’ refusal to allow Pilecon the Right of First Refusal. Rather I find the sale of the Aquarius Apartments was unsuccessful due to -

Pilecon’s changing requests and conditions as follows: “12.11 On 9/10/2015, Pilecon informed the Independent Agent that 15 Pilecon was agreeable to waive the Right of First Refusal for Aquarius Apartments and that the said property can be sold to Exclusive Hub even though the purchase price was below the Forced Sale Value. Pilecon also stated that the letter of consent and confirmation from the Defendant, its guarantor shall be 20 forwarded to the Independent Agent [see: exhibit THK-14 to the Defendant’s Affidavit of 28/12/2016].

12.12 Subsequently, the Trustee and the FI Holders were notified by the Independent Agent vide email that, despite the Pilecon’s 25 confirmation on 9/10/2015, Pilecon has changed its stance. Pilecon unilaterally imposed the following terms on the FI

if the sale to Exclusive Hub does not materialize for any 30 reason whatsoever, Pilecon wishes to reserve its right to exercise the Right of First Refusal if the said property is re-sold/re-tendered;

(ii) the FI Holders to agree that the proceeds received from the 35 Exclusive Hub’s Offer would be utilized to settle any maintenance charges due for Aquarius Apartments (which was then approximately RM180,000.00);

12.13 The new position taken by Pilecon departed from its 40 confirmation that was provided on 9/10/2015”;

(ii) the belated request for the proceeds to be utilised to pay the 38 maintenance charges which Pilecon ought to have paid in the first 5 place as quoted above; and

(iii) the delayed delivery of the consent letters by Pilecon and the Defendant well after the deadline for completion of the whole settlement as follows: “12.16 Subsequently, the FI Holders were agreeable to Pilecon’s 10 request for the proceeds received from the Exclusive Hub’s Offer to be utilized to settle any maintenance charges due. However, the consent of the Defendant was needed, due to the terms of the Guarantee. 15

12.17 The draft consent letter to be executed by the Defendant was forwarded to the Defendant. However, the Trustee and the FI Holders were informed that the Defendant was unable to agree to some of the terms in the consent letter and requested for the consent letter to be revised. This further delayed matters.

12.18 On 16/12/2015, after revising the terms of the consent letter which had to be agreed to by all the parties, the Trustee’s solicitors issued a letter to Pilecon’s solicitors, Messrs Edwin Lim & Suren requesting, inter alia, for the following:

a letter of consent in the format attached duly signed by the

(ii) a letter in the form attached from Pilecon and 30 countersigned by the Other Chargors.

12.19 Knowing full well that the Settlement Completion Date of the Settlement Agreement was on 19/12/2015, the letters of consent were signed by the Defendant and Pilecon and only delivered to 35 the Trustee’s solicitors on 22/12/2015 after the Settlement Completion Date; See: The Plaintiff’s solicitors letter dated 16/12/2015 and Messrs Edwin Lim & Suren’s letter dated 22/12/2015, Exhibit MTB-3, 40 Affidavit affirmed by the Plaintiff on 17/1/2017”. [23] In any event, the Settlement Agreement has Pilecon and the other Chargors as the Parties and the Defendant is not a signatory to the same. On this note I agreed with the Plaintiff’s submission 45 39 that the Defendant ought not to be permitted to revive the same 5 arguments on the Settlement Agreement when the actual party in Pilecon’s Suit No.180 have failed in such arguments. Whether there was a conspiracy between the Plaintiff and the FI Holders? 10 [24] The Defendant alleged there was a “conspiracy” between the Plaintiff and the FI Holders by breaching their obligations under the Settlement Agreement and the Guarantee because the Plaintiff and the FI Holders failed to take steps to dispose of and/or sell the Sale Assets and cited several authorities like - 15

SV Beverages Holdings Sdn Bhd & Ors v. Kickapoo (Malaysia) Sdn Bhd [2008] 4 CLJ 20 at 37[18] as follows: “In the tort of conspiracy, there must be an agreement or ‘combination’ of two or more with the common intention to effect an unlawful purpose or to do a lawful act by unlawful means resulting in damages to the 20 plaintiff”; and

Belmont Finance Corporation v Williams Furniture Ltd and others (No 2) [1980] 1 All ER 393 at p.404 a-c; and

Greig and others v Insole and others; World Series 25 Cricket Pty Ltd v Insole and others [1978] 3 All ER 449 at pp.484-485. [25] With respect in my considered view the Defendant’s submission is untenable for the following reasons. 30 [25.1] The passages at pp.484-485 of Greig’s case (supra) deal with the ingredients required to prove the tort of the inducement of breach of contract and are therefore not relevant. 40 [25.2] SV Beverages Holdings Sdn Bhd (supra) and Belmont 5 Finance Corporation (supra) deal with the elements required for proof of the tort of conspiracy. Here I relied on the case of Renault SA v. Inokom Corporation Sdn Bhd & Anor and Other Applications [2010] 5 CLJ 32 where at 52[43] and [44], the Court of Appeal held - 10 “[43] It is to be noted that besides the absence of allegations of overt acts on the part of TC Euro the statement of claim has also failed to plead the agreement between the defendants to conspire and state precisely what was the purpose or what were the objects of the alleged conspiracy. The statement of claim has also failed to set forth with clarity 15 and precision the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy. [44] According to the Oxford Advanced Learner’s Dictionary, 7th edn, 20 “conspiracy” means “a secret plan by a group of people to do something harmful or illegal””. According to the Defendant, the details of conspiracy are expressly stated in paras 69 to 71 of the Counterclaim. Having 25 examined the aforesaid pleadings, I find that the Defendant’s Counterclaim has failed to condescend to any particulars of the alleged conspiracy in the manner alluded to by the Court of Appeal in Renault SA’s case or in the case of Ng Ah Ba & Ors v Ramanda Sdn Bhd [1996] 1 MLJ 62 at pp.69-70, where the Court of Appeal 30 affirmed the decision of the High Court in allowing summary judgment under O.81 of the Rules of High Court 1980 and held the position in law of the need to plead particulars of conspiracy. [25.3] The allegation of conspiracy is but an afterthought to forestall the Plaintiff’s recovery action against the Defendant under the 35 Guarantee as the terms of the Guarantee are clear and the Defendant’s allegation of conspiracy would not detract the 41 Defendant’s liability under the Guarantee. 5 Statement of Accounts and Statement of Indebtedness [26] The Defendant submitted that he has raised triable issues and therefore the reliance by the Plaintiff on the Statement of Account as to the conclusiveness is misplaced. 10 [27] With respect I disagreed with the Defendant’s submission. For all the reasons which I have adumbrated above, I find there are no triable issues raised by the Defendant and the Defendant’s Counterclaim based on the same allegations is plain and obviously 15 unsustainable and is frivolous, vexatious and an abuse of the Court process. The Court relied on the Statement of Account as at 17/3/2016 showing the amount due and owing by the Defendant under the Guarantee of RM60,218,519.92 and the Statement of Indebtedness dated 30/11/2016 certifying that the Defendant is 20 indebted to the Plaintiff in the sum of RM60,000,000.00 (the maximum amount guaranteed by the Defendant). Following the Federal Court case of Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685 at 691[11] the Certificate of Indebtedness by the officer of the Bank is binding and 25 conclusive of the debt due to the Plaintiff unless the Defendant can prove manifest error. Conclusion [28] In the premise, I allowed the Plaintiff’s application for summary 30 judgment in encl.7 and dismissed the Defendants’ striking out 42 application in encl.17 with costs of RM15,000.00 for both 5 applications. Dated: 31/12/2017 10 SGD. (LAU BEE LAN) 15 Judge Counsel for the Plaintiff in Original Action And 1st to 13th Defendants in Counterclaim 20 Encik G.C. Tan together with Cik Marianne Loh Messrs Shook Lin & Bok Advocates & Solicitors 25 20th Floor, Ambank Group Building 55, Jalan Raja Chulan 50200 Kuala Lumpur Counsel for the Defendant in Original Action 30 And Plaintiff in Counterclaim: Cik Liza Chan together with Cik Mable Leong Messrs Liza Chan & Co. Advocates & Solicitors 35 No.15, Jalan Timur, Seksyen 9 46000 petaling Jaya