Metropolitan Commerce Sdn Bhd v SUN HUP HING CONSTRUCTION SDN BHD (BA-24NCC-167-11/2019)

Content

1 DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM 1 DALAM NEGERI SELANGOR DARUL EHSAN 2 (SAMAN PEMULA NO: BA-24NCC-167-11/2019) 3 4 ANTARA 5 6 METROPOLITAN COMMERCE SDN BHD 7 (NO. SYARIKAT : 780353 – A) ...PEMOHON 8 9 DAN 10 11 SUN HUP HING CONSTRUCTION SDN BHD 12 (NO. SYARIKAT : 410258 – D) 13 ...PENCELAH YANG DICADANGKAN 14 15 GROUNDS OF JUDGMENT 16 17 Introduction 18

Subsection

(1) Enclosure 6 is the application of Sun Hup Hing Sdn Bhd (SHHSB), 19 the Proposed Intervener’s Notice of Application dated 29.06.2020 seeking 20 leave to intervene in this OS. 21 22

Subsection

(2) After hearing both parties, this Court dismissed the application with 23 costs. The following are the grounds of judgment of this Court. 24 25 Background Facts 26

Subsection

(3) Metropolitan Commerce Sdn Bhd, the Applicant is known as a 27 property developer. 28

Subsection

(4) Sometime in the year 2009, the Applicant purchased a plot of land 1 from Hartanah Aspirasi Resources Sdn Bhd (HARSB) for the purpose of 2 a development project to be carried out by them. The Project is concerned 3 with the construction of inter alia warehouses and office lots in Bukit 4 Jelutong, Selangor. 5 6

Subsection

(5)

Preamble

Pursuant to a Letter of Award dated 21.10.2009 the Applicant 7 appointed the Proposed Intervener as its main contractor for the project. 8 Construction works for the project commenced in the same year and went 9 on for 4 years until it was completed sometime in 2013. There were 28 10 Certificates for Payment issued and certified for payment. 11 12

Subsection

(6) The Applicant defaulted in payment. 2 directors of the Applicant, 13 namely Dato Hj Sulaiman b Abu Bakar and Abu Bakar Fikri b Sulaiman 14 stepped in and issued and executed an Irrevocable Joint & Several 15 Personal Guarantees for Payments cum Indemnity dated 7.8.2013. 16 17

Subsection

(7) One of the terms of the Guarantee cum Indemnity dated 7.8.2013 18 states that the Applicant will pay the Proposed Intervener the sum of 19 RM1,378,244.29 for Certificate for Payment No. 24 and Certificate for 20 Payment No. 25. This is found in paragraph 1(a) of the Guarantee cum 21 Indemnity. In paragraph 1(b) the directors agree and undertake to jointly 22 and severally irrevocably guarantee as principal debtors and not merely 23 as surety, to pay the Proposed Intervener all sums due and owing by the 24 Applicant in any manner whatsoever including all certificates for payment 25 issued or to be issued together with inter alia interest and costs including 26 legal fees. 27 28

Subsection

(8) Paragraph 1 (b) of the Guarantee cum Indemnity is reproduced 1 below for easy reference. 2 3 “1. (b) … we, Dato Haji Sulaimin bin Abu Bakar (IC No, 530705-07-5001) 4 and En. Abu Bakar bin Sulaimin (IC No. 781105-10-5461) (hereinafter 5 referred to as “the Guarantors”) hereby, jointly and severally, irrevocably 6 guarantee as Principal Debtors and not merely as sureties, to pay you 7 all payments and to discharge all obligations and liabilities whether 8 actual or contingent now or at any time hereafter due or incurred to you 9 by the Employer in any manner whatsoever including the Overdue Sum 10 and all other outstanding sums in respect of all Certificates of Payments 11 issued or to be issued pursuant to the Construction Contract together 12 with all variation orders, interest, costs, loss, expense and other charges 13 (including legal charges on solicitors and client basis) which you may 14 incur in enforcing payment for such sum.” 15 16

Subsection

(9) The Applicant’s financial difficulties mounted and therefore to 17 resolve it the Applicant proposed a scheme of arrangement to 18 compromise the debts arising out of the Project. On 19.6.2019 the 19 Applicant filed an application in the Shah Alam High Court OS No. BA- 20 24NCC-91-06/2019 to convene a court convened meeting (CCM) with its 21 creditors to consider a proposed scheme of arrangement and compromise 22

Preamble

pursuant to Section 366 of the Companies Act 1968 and the same was 23 granted on 6.8.2019. 24 25

Subsection

(10) The Proof of Debt exercise commenced on 19.9.2019 and on 26 8.10.2019 the Applicant circulated, inter alia, a Notice of Meeting, the 27 Explanatory Statement of the Proposed Scheme and proxy form to all the 28 Scheme Creditors. An advertisement of the Notice of Meeting was duly 29 placed in the newspapers on 20.8.2019. 30

Subsection

(11) Meanwhile the Proposed Intervener found that their progress claims 1

Preamble

pursuant to a number of Certificate of Payments were unpaid by the 2 Applicant. Hence on 20.8.2018 the Proposed Intervener’s solicitors issued 3 a letter of demand to demand payment of the sum of RM1,404,495.20 on 4 the basis of the Guarantee cum Indemnity. 5 6

Subsection

(12) A second letter of demand dated 18.2.2019 was issued and sent to 7 the directors to demand payment of the sum of RM113,295.82 over and 8 above the outstanding sum mentioned in Paragraph 11 above. 9 10

Subsection

(13) The directors failed to pay both the said sums and premised on the 11 indemnity provided under the Guarantee cum Indemnity by the directors, 12 the Proposed Intervener had on 20.3.2019 filed a Writ and Statement of 13 Claim for the sum of RM1,516,991.02 against the directors by way of Civil 14 Suit No: BA-22NCVC-136-03/2019 (Suit 136) in the Shah Alam High 15 Court. 16 17

Subsection

(14) The Proposed Intervener was aware of the scheme of arrangement 18 as well as the court convened meeting (CCM) that was held on 19 31.10.2019. 20 21

Subsection

(15) However, on 14.10.2019 the Proposed Intervener via their solicitors 22 wrote to the Scheme Manager (Ferrier Hodgson MH Sdn Bhd) to inform 23 that they i.e. the Proposed Intervener will not be participating in the Proof 24 of Debt exercise. 25 26

Subsection

(16) The CCM convened as scheduled on 31.10.2019 and all the 27 Scheme Creditors except the Proposed Intervener attended the meeting. 28

Subsection

(17) At the meeting and prior to the casting of votes, there were 1 amendments proposed to the Explanatory Statement (ES) and to the 2 Proposed Scheme. A majority in number and more than 75% in value of 3 the Scheme Creditors who were present, voted in approval of the 4 Proposed Scheme and the Proposed Amendments. 5 6

Subsection

(18) On 25.11.2019 the Applicant thereafter applied and obtained a court 7 Sanction Order for the Proposed Scheme and the Proposed 8 Amendments. 9 10

Subsection

(19) On 29.11.2019 the Sanction Order was served on all the Scheme 11 Creditors. 12 13

Subsection

(20) It will be helpful to set out the details of the Sanction Order which is 14 inter alia as follows : 15 20.1 There shall be a 60% rebate on the principal debt owed by the 16 Applicant to P & M and the Proposed Intervener (“Settlement 17 Sum”); 18 20.2 HARSB being a related company of the Applicant waives its debt 19 owing by the Applicant completely; 20 20.3 All accrued interest on the principal debt is waived. This includes 21 the Interest Sum; 22 20.4 Payment to the Scheme Creditors is effected by way of post-dated 23 cheques over a period of 6 months; and 24 20.5 Upon completion of the Sanction Order, all claims by the Scheme 25 Creditors shall be deemed fully and irrevocably satisfied which 26 includes all guarantees and securities provided by the Applicant’s 27 directors. 28

Subsection

(21) In accordance with the terms of the Sanction Order the Applicant 1 delivered to the Proposed Intervener payment of the entire settlement sum 2 by way of post dated cheques but the Proposed Intervener has refused to 3 accept the cheques. 4 5

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(22) On 24.12.2019 the Applicant filed an application to strike out the Suit 6 136 on the ground that the Sanction Order has extinguished the liabilities 7 under the Guarantee cum Indemnity. 8 9

Subsection

(23) The striking out application was heard on 20.1.2020. On 17.2.2020 10 the High Court allowed prayer 1 of the application i.e. for the Applicant to 11 intervene in Suit 136. Prayer 2 which is the striking out prayer was fixed 12 for continued hearing on 15.4.2020. 13 14

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(24) Due to the MCO in place the hearing was subsequently fixed on 15 3.7.2020. 16 17

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(25) The Proposed Intervener meanwhile filed this instant application in 18 Encl. 6 and an application to stay the striking out application in Suit 136. 19 20

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(26) The striking out application in Suit 136 has been stayed by consent 21 pending the decision of this Court in regard to Encl 6. 22 23 The Proposed Intervener’s Contentions 24

Subsection

(27) The Proposed Intervener questions the Sanction Order and states 25 that pursuant to various searches conducted it has discovered a number 26 of irregularities. It was alleged that the Applicant had failed to provide full 27 and frank disclosure when applying for the Sanction Order - 28

Subsection

(1) when it failed to exhibit a copy of the Guarantee cum 1 Indemnity for the Court’s perusal and did not draw the 2 attention of the court to the clauses therein. The court was 3 thus not appraised of the significance of the terms especially 4 to the effect that the liabilities of the Directors under the 5 Guarantee cum Indemnity is extinguished.

Subsection

(2) when it failed to inform the Court that it and Hartanah Aspirasi 7 were wholly owned by the same company which is Premier 8 Ayer Sdn Bhd.

Subsection

(3) when it failed to inform the court that the directors whose 10 liabilities were going to be extinguished under the Sanction 11 Order were listed as directors of Hartanah Aspirasi and 12 Premier Ayer as well.

Subsection

(4) when it failed to inform the Court that Hartanah Aspirasi was 14 dissolved at the material time when the SOA was being 15 carried out and they should never have been allowed to vote 16 at the SOA or even listed as a creditor.

Subsection

(5) that the land which is the subject of the Sale and Purchase 18 Agreement dated 15.12.2009 was still owned by Hartanah 19 Aspirasi although the Sale and Purchase Agreement states 20 that the Applicant has agreed to purchase the said land in 21 2009.

Subsection

(6) the Applicant has admitted the said land was never transferred 23 to it and therefore there was no basis for Hartanah Aspirasi to 24 be listed as a creditor to the Applicant for the alleged debt of 25 RM28,000,000.00 26 27

Subsection

(28) Premised on those grounds above it is the contention of the 28 Proposed Intervener that the Sanction Order was obtained through 29 fraudulent conduct and without the benefit of a full and frank disclosure on 1 the part of the Applicant. In principle it was the contention of the Proposed 2 Intervener that the Sanction Order cannot be allowed to stand for the 3 aforesaid reasons. 4 5 The Applicant’s Contention 6

Subsection

(29) The Applicant brought to the attention of the Court that the Proposed 7 Intervener is not entitled to intervene in the proceedings either in fact 8 and/or in law for the following reasons :

Subparagraph

(ii) the Sanction Order has been perfected and the High Court is 14 functus officio;

Subparagraph

(iii) the Proposed Intervener has waived its rights either to 16 intervene and/or to object to the Sanction Order; and 17

Subparagraph

(iv) the Proposed Intervener cannot blow hot and cold-having 18 consistently maintained that the Sanction Order does not in 19 any way affect its rights in Suit 136, it cannot now complain 20 that its legal interest is affected by the Sanction Order. 21 22

Subsection

(30) The arguments by both parties will be examined below. 23 24 Decision of this Court 25

Subsection

(31) The primary issue to be determined by this Court is whether this 26 Court ought to exercise its discretion to grant leave to the Proposed 27 Intervener to intervene and be made a party. 28

Subsection

(32) Order 15 rule 6(2) ROC 2012 gives the court the powers to grant 1 leave to intervene where : 2 3 “(2) Subject to this rule, at any stage of the proceedings in any cause or 4 matter, the Court may on such terms as it thinks just and either of its 5 own motion or on application— 6

Subparagraph

(ii) any person between whom and any party to the cause or matter 13 there may exist a question or issue arising out of or relating to or 14 connected with any relief or remedy claimed in the cause or matter 15 which, in the opinion of the Court, would be just and convenient to 16 determine as between him and that party as well as between the 17 parties to the cause or matter.” 18 19

Subsection

(33) The law in respect of whether to grant leave to intervene by any 20 party has been well explained in the Privy Council case of Pegang Mining 21 Co. Ltd v Choong Sam & Ors [1968] 1 LNS 96 as follows : 22 23 “It has been sometimes said as in Moser v Marsden [1892] 1 Ch 487 24 and in the Re IG Farbenindustrie AG [1944] Ch 41 that a party may be 25 added if his legal interests will be affected by the judgment in the 26 action but not if his commercial interests only would be affected. 27 While their Lordships agree that the mere fact that a person is likely to 28 be better off financially if a case is decided one way rather than another 29 is not a sufficient ground to entitle him to be added as a party, they do 30 not find the dichotomy between “legal” and “commercial” interests 31 helpful. A better way of expressing the test is : will his rights against 32 or liabilities to any party to the action in respect of the subject 1 matter of the action be directly affected by any order which may be 2 made in the action? 3 4

Subsection

(34) It is therefore patently clear that a party may be allowed to intervene 5 if his ‘legal interest’ will be affected but not if his commercial interests 6 alone would be affected. 7 8

Subsection

(35) The burden is placed on the Proposed Intervener to show that it has 9 an interest directly related to the subject matter. 10 11

Subsection

(36) It is instructive to note that Order 15 rule 6 of the ROC is only 12 applicable at “any stage of the proceedings”. “At any stage of the 13 proceedings” means there is a proceeding pending, not when it has 14 ended. It cannot be relied on when the proceedings has ended. 15 16

Subsection

(37) This issue was clearly stated in the case of United Asian Bank 17 Berhad v A. Subramanian (as the personal representative of 18 Roshammah a/p Samual (deceased) & 4 Ors [1994] 3 CLJ 681. There 19 the High Court refused to allow the application to intervene as it was 20 already functus officio and had no power to set aside a perfected order. 21 22

Subsection

(38) In the later case of Hong Leong Bank Bhd v Staghorn Sdn Bhd 23 & Other Appeals [2008] 2 CLJ 121 the Federal Court again emphasized 24 that once judgement has been entered, the proceeding has come to an 25 end and there is no longer any basis for intervention. 26 27

Subsection

(39) It is the contention of the Proposed Intervener that this Court is not 28 functus officio pointing out that the Sanction Order is an order made ex- 29 parte and hence being a provisional order can be set aside by the court 1 at any time on the party who is affected by the Order. The Proposed 2 Intervener relied on authorities such as WEA Records Ltd v Visions 3 Channel 4 Ltd & Others [1983] 2 All ER 589 and Tan Guek Tian v Tan 4 Kim Kiat @ Chua Kim Kiat (Part 2) [2007] 9 CLJ 215 which established 5 that an ex-parte order is an exception to the doctrine of functus officio. 6 7

Subsection

(40) In this regard it is crucial to take note of the fact that the Sanction 8 Order that was granted on 25.11.2019 had been taken and acted upon. 9 There is no longer any pending proceedings. The proceedings have 10 concluded and the order has been perfected. It is therefore a final order 11 which has been perfected. The proceedings have long come to an end. It 12 is not at any stage of the proceedings. On this issue, this court is in 13 agreement with the Applicant’s contention that there is no longer any live 14 proceedings for the Proposed Intervener to intervene in. 15 16

Subsection

(41) Furthermore, I respectfully take the view that the fact that the 17 Sanction Order was granted ex parte makes no difference in this particular 18 matter because the Proposed Intervener was at all times well aware of the 19 existence of the Sanction Order but chose not to take part in the same. I 20 am of the view that in these circumstances the Proposed Intervener has 21 waived its rights to intervene. 22 23

Subsection

(42) The Proposed Intervener has argued that it has conducted searches 24 and discovered that there was no full and frank disclosure to the Court 25 when applying for the Sanction Order and outrightly alleged that the 26 Sanction Order had been obtained through fraudulent conduct on the part 27 of the Applicant. It urged this Court not to condone the Applicant’s actions 28 and not to allow the Sanction Order to stand. 29

Subsection

(43) On this issue, I find that the Proposed Intervener’s argument is 1 untenable in light of the fact that the Proposed Intervener did not make 2 any attempt to impeach the alleged improper Sanction Order by way of a 3 fresh action. This Court is in complete agreement with the Applicant’s 4 contention that the only way the Proposed Intervener may impeach an 5 original judgment regularly obtained is when it takes a fresh action and 6 not by any application in the same action. A case on point relied on by the 7 Applicant to support this contention is the case of Serac Asia Sdn Bhd v 8 Sepakat Insurance Brokers Sdn Bhd [2013] 5 MLJ 1 where the Federal 9 Court held : 10 11 “[36] As regards the appellant’s submission on the court being functus 12 officio and that a fresh suit needs to be filed to strike out a previous 13 regularly obtained order on the ground of fraud, we adopt the 14 finding of this court in Hock Hua Bank Bhd v Sahari bin Murid 15 [1981] 1 MLJ 143 which we think has settled these issues… 16 … 17 [37]…In fact, Chang Min Tat FJ speaking for the Federal Court in the 18 latter case, clearly stated that a “fresh action will lie to impeach the 19 original judgment”, and that the court had ‘no power under any 20 application in the same action to alter, vary or set aside a judgment 21 regularly obtained… 22 … 23 [39]…Thus, in our view, the factual disputes are obvious and can only 24 be resolved in a trial, with examination of witnesses for the court to make 25 definite findings of facts rather than from merely relying on the affidavits 26 supporting enc 29 alone and come to a determination that the appellant 27 was guilty of committing fraud on the court by concealing a material fact. 28 It is for this reason that the law requires for a party seeking to 29 impeach a judgement based on fraud to file a fresh action. Only 30 then can there be a proper finding on whether the appellant had 31 committed a deliberate fraud on the court.” 32

Subsection

(44) Serac Asia (supra) has put to rest any doubt that a perfected order 1 cannot be revisited or questioned in any subsequent proceeding except 2 to attack it in a fresh action under very limited circumstances. The 3 rationale for that is to protect and give certainty and finality to any order 4 that has been perfected. 5 6

Subsection

(45) So too here is the situation faced by the Proposed Intervener. The 7 law does not allow the Proposed Intervener to attack the Sanction Order 8 no matter even if fraud is alleged. All in all, I am of the considered opinion 9 that the Proposed Intervener is somehow attempting to bring this Court to 10 revisit the granting of the Sanction Order and that cannot be the case. 11 Since the Proposed Intervener did not think it fit to file a fresh suit to 12 impeach the Sanction Order, I do not think it can now avail itself of the 13 principle entrenched in Badiaddin bin Mohd Mahidin & Anor v Arab 14 Malaysian Finance Bhd [1998] 1 MLJ 393. 15 16

Subsection

(46) It is quite pertinent to note too that there was no concealment or any 17 surreptitious conduct in the manner of applying for the Sanction Order. 18 The Proposed Intervener had knowledge of the terms of the Proposed 19 Scheme from as early as 8.10.2019 but it was content to let the matter 20 proceed to its natural end. The Proposed Intervener was not kept in the 21 dark but was duly informed and given notice of the Proposed Scheme. 22 The Proposed Intervener chose not to take any steps to object or oppose 23 the scheme. 24 25

Subsection

(47) I had noted earlier that the Proof of Debt exercise commenced on 26 19.9.2019 for the Scheme of Creditors to file their claims. On 8.10.2019 27 the Notice of Meeting, the Explanatory Statement of the Proposed 28 Scheme and the proxy form were circulated to all Scheme Creditors. Apart 1 from that the Notice of Meeting was advertised in 2 local newspapers. 2 3

Subsection

(48) In spite of all that, the Proposed Intervener via its solicitors wrote to 4 the Scheme Manager on 14.10.2019 informing them that it will not be 5 participating in the Proof of Debt exercise on 31.10.2019. The Proposed 6 Interveners voluntarily chose not to participate in the Proof of Debt 7 exercise or the CCM even though it was a secured creditor. 8 9

Subsection

(49) The Proposed Intervener was thereafter served with the Sanction 10 Order on 29.11.2019. The Proposed Intervener did not appeal against the 11 Sanction Order or challenge it. 12 13

Subsection

(50) The Applicant then filed the striking out application on 24.12.2019 14 and served it on the Proposed Intervener. Of significance is the fact that 15 the grounds for the striking out was based solely on the contents and 16 effect of the Sanction Order. Again, nothing was done on the part of the 17 Proposed Intervener to take proactive steps to challenge the Sanction 18 Order. Even when the striking out application came up for hearing on 19 20.1.2020 the Proposed Intervener even then did not take any action. It 20 was only 5 months later on 29.6.2019 did the Proposed Intervener file this 21 application in Encl 6. 22 23

Subsection

(51) In this regard I am in full agreement with the contention of the 24 Applicant that the Proposed Intervener had waived their rights to 25 challenge or oppose the Sanction Order. The Proposed Intervener had 26 more than ample time and opportunity to be represented and heard before 27 and at the hearing of the Sanction Order. There was nothing preventing 28 them from exercising their rights. They voluntarily and consciously chose 29 not to participate or avail themselves of the opportunity to be heard. They 1 were content to stand by and deliberately chose not to actively participate. 2 They are thereby estopped by their conduct from subsequently changing 3 their minds to raise any objection to the same. They have to stand by their 4 conduct in choosing not to avail themselves of the opportunity to be 5 challenge the final order that was recorded. 6 7

Subsection

(52) On this issue I am guided by the principles enunciated in the case 8 of Pemunya Kapal dan Orang-orang Lain Yang Mempunyai 9 Kepentingan Dalam Kapal M.V. “Brihope’ v Emanuel E. Okwuosa & 10 Ors (No. 2) [1996] 4 CLJ 476 where the Court stated : 11 12 “We now wish to refer to some passages from the judgment of Lord 13 Denning in Nana Oforu Atta (etc) v Nana Abu Bonsra (etc) [1958] AC 95 14 p. 101: 15 The general rule of law undoubtedly is that no person is to be 16 adversely affected by a judgement in an action to which he was not a 17 party, because of the injustice of deciding an issue against him in his 18 absence. But this general rule admits of two exceptions: one is 19 that a person who is in privity with parties, a “privy” as he is 20 called, is bound equally with the parties, in which case he is 21 estopped by res judicata; the other is that a person may have so 22 acted as to preclude himself form challenging the judgement, in 23 which case he is estopped by his conduct. Their Lordships propose 24 in this case to consider first estoppel by conduct. 25 At p. 102 26 Those instances do not however cover this case, which is not one of 27 active participation in the previous proceedings or actual benefits form 28 them but of standing by and watching them fought out or at most giving 29 evidence in support of one side or the other. In order to determine this 30 question, the West African Court of Appeal quoted form a principle 31 stated by Lord Penzance in Wytcherley v Andrews [1871] LR 2 P & M 1 327, 328. The full passage is in these words: 2 “There is a practice in this Court, by which any person having an 3 interest may make himself a party to the suit by intervening; and it was 4 because of the existence of that practice that the Judges of the 5 Prerogative court held, that if a person, knowing what was passing, 6 was content to stand by and see his battle fought by somebody else in 7 the same interest, he should be bound by the result, and not be 8 allowed to re-open the case… 9 … 10 On our facts Hong Leong were as good as privys because under the 11 default clause in the mortgages their equity had crystallized and 12 Finego were owned in name only as soon as the ship was arrested. 13 They could have intervened before 7 June 1994 but elected not to 14 do so. Therefore they were estopped form applying to set the 15 judgement aside after it was passed.” 16 17

Subsection

(53) I find merits in the submission that when a party which has 18 knowledge and opportunity to intervene but did not do so at the earliest 19 opportunity then no more allowance shall be given for that party to reopen 20 the case. Reference is made to the case of Tradium Sdn Bhd v Zain 21 Azahari b Zainal Abidin & Anor [1995] 1 MLJ 668 where the Court of 22 Appeal liken the position of the Proposed Intervener to be “no better than 23 a sniper who whilst concealed and protected by the foliage in which he 24 hides, proceeds to take pot-shots at his unsuspecting opponent.” 25 26

Subsection

(54) Reference is also made to the case of Peninsular Park Sdn Bhd v 27 AI-AF Holdings Sdn Bhd [2015] MLJU 745 where the High Court 28 refused to allow the application to intervene on the ground that the 29 proposed Interveners were deemed to have waived their rights when they 30 did not attend the CCM. The learned High Court Judge was of the view 31 that even though the proposed interveners had valid and subsisting SPAs, 1 yet when they failed to attend the CCM it was taken to mean that they are 2 deemed to have waived their rights and cannot say that their legal rights 3 were affected. 4 5

Subsection

(55) Similarly, here the Proposed Intervener did not bother to attend and 6 participate in the CCM or take any action prior to, during and soon after 7 the Sanction Order was recorded. I agree and I hold that they are deemed 8 to have waived any right they had to intervene and they cannot 9 legitimately now say that their legal rights are affected by the Sanction 10 Order. They simply have lost their right to raise any objection now. 11 12

Subsection

(56) I do not think the Proposed Intervener in this instant case is entitled 13 to sit on their rights and stay silent and then when the situation was not 14 looking well in their favour only then stir themselves from slumber to attack 15 the Sanction Order. 16 17

Subsection

(57) I am therefore in agreement with the Applicant’s contention that the 18 Proposed Intervener has waived their rights and is estopped from raising 19 any objection in regard to the Sanction Order. 20 21

Subsection

(58) In any event the Proposed Intervener held the view that their rights 22 were guaranteed pursuant to the Letter of Guarantee and Indemnity. They 23 took the position that their claim was sustainable by reason that the 24 Scheme of Arrangement and compromise was not binding on the liabilities 25 of the directors to make full payment. 26 27

Subsection

(59) In the affidavits in support of this application the Proposed 28 Intervener have taken the position that their claim in Suit 136 based on 29 the Guarantee and Indemnity is not bound by the SOA and the Sanction 1 Order. Why then has the Proposed Intervener only now raised an issue of 2 their legal rights being affected. 3 4

Subsection

(60) A litigant is not permitted to approbate and reprobate. The Proposed 5 Intervener had earlier in opposing the striking out proceedings vehemently 6 taken the position that the Sanction Order did not bind them. The 7 Proposed Intervener shifted three hundred and sixty degrees around to 8 now say that they have a legal interest in the Sanction Order. I apply the 9 words of the learned Justices in the English case of Verschures 10 Creameries Limited v Hull and Netherlands Steamship Company 11 Limited [1921] 2 KB 608 : 12 13 “A Plaintiff is not permitted to “approbate and reprobate”…The doctrine 14 of election is not however confined to instruments. A person cannot 15 say at one time that a transaction is valid and thereby obtain some 16 advantage, to which he could be entitled on the footing that it is 17 valid, and then turn around and say that it is void for the purpose 18 of securing some other advantage. That is to approbate and 19 reprobate the same transaction.” 20 21

Subsection

(61) I agree with the Applicant’s observation that the inordinate delay in 22 filing this application in Encl 6 is a factor to be construed as a waiver and 23 is fatal to the application (see Badruzamani b Azmi v Kurnia Insurance 24

Subsection

(62) After carefully reviewing the affidavit evidence and the submissions 11 of both parties and applying the established principles with regard to the 12 law to the facts of this case, I am of the considered view that the Proposed 13 Intervener has failed to meet the relevant legal requirements thereof. 14 15

Subsection

(63) For the reasons stated herein, I dismissed the application in Encl 6 16 with costs. 17 18 Dated 28 November 2022. 19 20 21 22 23 (JULIE LACK) 24 Judge 25 High Court of Malaya 26 Shah Alam, Selangor Darul Ehsan 27 28 29 Counsel 1 For the Applicant : 2 Alvin Tan with Eric Tan, Michelle Siah and Ponnie Govindasamy 3 (MESSRS. ONG KOK BIN) 4 5 For the Proposed Intervener : 6 Ashok Kumar Mahadev Ranai with Tatvaruban Subramaniam 7 (MESSRS. SKRINE) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29