Midf Amanah Investment Bank Berhad v Vahana Offshore (M) Sdn Bhd (WA-24FC-876-07/2023)

(1) The affidavit in support of the originating summons by which an action to which this rule applies is begun shall comply with the following provisions of this rule. This rule applies to a charge action begun by originating summons in which the plaintiff is the chargee and claims delivery of possession or payment of moneys secured by the charge or both.

The affidavit shall exhibit a copy of the charge. [Emphasis added] [3] The defendant contends the failure by the plaintiff to so exhibit the NLC Charge cannot be cured or ignored under Order 1A and Order 2 rule 1 ROC, renders the OS defective and I must dismiss the OS. S/N emhlUhDo0Uanlo8VwktgnQ [4] The plaintiff disagrees and contends the failure can be cured or waived under Order 1A and Order 2 rule 1 of the ROC because - i. The plaintiff has, in its affidavit in support, specifically referred to the NLC Charge, which was stated to be included as part of exhibit MIDF-1 but was inadvertently not attached due to an oversight as can be from paragraph 3 therein. [See Enclosure 2 paragraph 3 of plaintiff’s affidavit in support at pages 12 to 13 of Enclosure 2]. ii. The defendant has admitted to the execution of the NLC Charge and indeed included a copy of the NLC Charge in Enclosure 6 and therefore the NLC Charge was before this Court. [See Enclosure 4 defendant’s admission at paragraph 43 of defendant’s affidavit in reply at page 54 of Enclosure 4]. iii. The plaintiff has on 30-11-2023 filed a corrective affidavit to include the NLC Charge in its affidavit in support to address the inadvertent technical non-compliance. [5] In my view, if the defendant’s counsel’s submission is correct, the public is perfectly entitled to ask “Is the law an ass - an idiot?” to paraphrase an idiom which has its origin in Charles Dicken's novel Oliver Twist - "The law is an ass - an idiot." [6] Fortunately, the answer is No. I set down my reasons below. Relevant Background Facts S/N emhlUhDo0Uanlo8VwktgnQ [7] The plaintiff filed an Originating Summons [Enclosure 1] [“OS”] for an order for sale under Sections 256 and 257 of the National Land Code [“NLC”] read with Order 83 Rules of Court 2012. [8] The order sought for is to auction a piece of land held under Geran 29094, Lot 112, Seksyen 86, Bandar and District Kuala Lumpur, Negeri Wilayah Persekutuan ("Property"), which was charged to the plaintiff by the defendant under Charge Presentation No.: PDSC 33465/2022 [“NLC Charge”], to satisfy the sums secured under the Charge amounting to RM 53,147,052.77 as at 12-12-2023. [9] I heard the OS on 23-11-2023. At the oral hearing before me, the defendant’s counsel put up a new ground - not raised in written submissions filed - that the plaintiff has failed to comply with Order 83 rule 3(2) of the ROC. The non-compliance is that the NLC Charge is stated to be exhibited in exhibit MIDF-1 to Enclosure 2 (“exhibit MIDF- 1”) but it was in fact not exhibited. [10] The defendant’s counsel says the omission is fatal. As both counsel have not produced any authorities to guide the court, I allowed an adjournment to 12-12-2023 for counsel to do research. [11] At the resumed hearing on 12-12-2023, after hearing counsel I allowed the OS prayers 1 to 9 and 11 with costs of RM 10,000.00 subject to allocatur. I fixed the auction for 20-06-2024. [12] The defendant has filed an appeal to the Court of Appeal on 13-12-

These are my Grounds of Decision. I thank counsel for their helpful submissions. S/N emhlUhDo0Uanlo8VwktgnQ Defendant’s Contentions [13] The defendant contends the plaintiff’s application is fatally flawed due to non-compliance with the mandatory provisions of Order 83 rules 3(1) and (2) of the ROC. [14] Order 83 rules 3(1) and (2) of the ROC read as follows-Action for delivery of possession or payment of moneys (O. 83, r. 3)

(1) The affidavit in support of the originating summons by which an action to which this rule applies is begun shall comply with the following provisions of this rule. This rule applies to a charge action begun by originating summons in which the plaintiff is the chargee and claims delivery of possession or payment of moneys secured by the charge or both.

The affidavit shall exhibit a copy of the charge. [15] The defendant submits that the plaintiff had failed to exhibit the NLC Charge in its affidavit in support of the OS as required by Order 83 rule 3(2) of the ROC and that this omission is fatal. The defendant relies on the following cases: i. Diamond Peak Sdn Bhd v United Merchant Finance Bhd [2003] 2 MLJ 346 CA; S/N emhlUhDo0Uanlo8VwktgnQ ii. Perwira Habib Bank Malaysia Bhd v Lum Choon Realty Sdn Bhd [2006] 5 MLJ 21 FC; iii. Bank Pertanian Malaysia v Blue Valley Plantations Bhd & 5 Ors [2002] MLJU 212 HC; iv. Asia Commercial Finance (M) Bhd v Kimden Housing Development Sdn Bhd [1993] 1 MLJ 283. Plaintiff’s contentions [16] In contrast, the plaintiff submits that in the affidavit in support of the OS, there was a specific reference to the NLC Charge which was intended to be included as part of the exhibit MIDF-1 but inadvertently omitted due to an oversight. The defendant also had admitted to the NLC Charge and included a copy of the same in Enclosure 6. [17] Furthermore, the non-compliance with Order 83 rule 3 of the ROC did not cause any substantial miscarriage of justice to the defendant, making it fatal. The word “shall” in Order 83 rule 3 of the Rules of Court does not impose a mandatory obligation and such non-compliance is merely of a technical nature and thus curable by virtue of Order 1A and Order 2 of the Rules of Court 2012. Analysis of the Court Cases cited by defendant [18] I have carefully scrutinised the cases cited by the defendant. They do not support the defendant’s proposition. S/N emhlUhDo0Uanlo8VwktgnQ [19] In Diamond Peak Sdn Bhd v United Merchant Finance Bhd [2003] 2 MLJ 346, the plaintiff / respondent has failed to ask for an auction date. The Court of Appeal allowed the defendant’s / appellant’s appeal and set aside the Order for Sale on the basis of the respondent’s non-compliance with Section 25 (1)b NLC to state an auction date. This is different from the facts of the present case. [20] In Perwira Habib Bank Malaysia Bhd v Lum Choon Realty Sdn Bhd [2006] 5 MLJ 21, the Federal Court held the following: “The procedural requirements of O 83 r 3(1), (3), (6) and (7) of the RHC must be complied with strictly for the purpose of seeking an enforcement of a charge registered under the NLC by way of an order for sale, regardless of the relief sought.” [Emphasis added] [21] I note that the Federal Court did not refer to Order 83 rule 3(2) . [22] In Bank Pertanian Malaysia v Blue Valley Plantations Bhd & 5 Ors [2002] MLJU 212, Ramly Ali J dismissed an application for an order for sale as the plaintiff failed to comply with Order 83 rule 3(3) and (4) ROC. I note again that Ramly Ali J was not referring to Order 83 rule 3(2) ROC. [23] In Asia Commercial Finance (M) Bhd v Kimden Housing Development Sdn Bhd [1993] 1 MLJ 283, the court set aside an order for sale because of the chargee’s failure to notify the defendant chargor S/N emhlUhDo0Uanlo8VwktgnQ of the hearing date and thereby depriving the defendant of a right to oppose the application. This is a far cry from our case where the defendant was aware of which NLC Charge the plaintiff was enforcing on. Pertinent facts [24] I am of the view no prejudice was caused to the defendant by the non-inclusion of the NLC Charge by the plaintiff. While the plaintiff has indeed failed to attach the NLC Charge, it is mentioned in the affidavit in support. It was intended to be included as part of exhibit MIDF-1 but the same was inadvertently omitted due to an oversight. This is not a deliberate non-compliance. [25] Further, the defendant indeed had admitted to the execution of the NLC Charge and included a copy of the NLC Charge in Enclosure 6. It is therefore clear that the defendant was aware and has full knowledge of what charge the plaintiff was enforcing. The non-compliance in this matter is definitely not fatal as I see no serious and/or material prejudice occasioned to the defendant. [26] In my view, the law is clear that a non-compliance with the rules of court can be waived and indeed curable under Order 1A and Order 2 rule 1 ROC if it was due to an oversight, not deliberate and no material prejudice was caused to the opposing party. [See Duli Yang Amat Mulia Tunku Ibrahim Ismail lbni Sultan lskandar Al-Haj v Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 FC and Malayan Banking Berhad v Marilyn Ho Siok Lin [2006] 7 MLJ 249 HC]. S/N emhlUhDo0Uanlo8VwktgnQ [27] Order 1A and Order 2 rule 1 ROC read as follows-ORDER 1A COURT OR JUDGE SHALL HAVE REGARD TO JUSTICE Regard shall be to justice (O. 1A) In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with these Rules. ORDER 2 EFFECT OF NON-COMPLIANCE Non-compliance with Rules (O. 2, r. 1) 1. [1] Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been non-compliance with the requirement of these Rules, the non-compliance shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.

These Rules are a procedural code and subject to the overriding objective of enabling the Court to deal with cases justly. The parties are required to assist the Court to achieve this overriding objective. S/N emhlUhDo0Uanlo8VwktgnQ

The Court or Judge may, on the ground that there has been such noncompliance as referred to in paragraph (1), and on such terms as to costs or otherwise as it or he thinks just, bearing in mind the overriding objective of these Rules, exercise its or his discretion under these Rules to allow such amendments, if any, to be made and to make such order, if any, dealing with the proceedings generally as it or he thinks fit in order to cure the irregularity. [28] On Order 1A and Order 2 ROC, David Wong J in Malayan Banking Bhd v Marilyn Ho Siok Lin [2006] 7 MLJ 249 granted an order for sale notwithstanding non-compliance with Order 83 rule 3 Rules of the High Court 1980 by the plaintiff. Justice David Wong said: “[11] … we have O 1A and O 2 r 3 where they provide that the court shall have regard to the justice of the case rather than noncompliance of the rules. Here, it cannot be argued that the defendant was prejudiced by the non-compliance (which I say there is not) as if one looks at encl 3 objectively one would know what the application is all about.” [Emphasis added] [29] The Federal Court in Duli Yang Amat Mulia Tunku Ibrahim Ismail lbni Sultan lskandar Al-Haj v Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 gave the following instructive rationale on when the Court can invoke Order 1A of the Rules of the High Court 1980 which is applicable to Order 1A ROC: - S/N emhlUhDo0Uanlo8VwktgnQ “[46] The technical non-compliance of any rule may be remedied where there is an accidental omission or oversight by a party. A general provision such as O. 1A RHC is for the court or judge to give heed to justice over technical non-compliance. It must not supersede a mandatory requirement of the Rules. O. 1A RHC cannot be invoked when a party intentionally disregards in complying with the Rules. Otherwise, parties would be encouraged to ignore the Rules. Thus, in this case, O. 1A RHC does not apply as the respondents had intentionally disregarded O. 6 r. 7(2A) RHC for their own reasons. [Emphasis added] Other points raised by the respondent in its written submissions in Enclosure 43 [30] I have reviewed the grounds raised by the respondent in its written submissions in Enclosure 43. They do not raise any ‘cause to the contrary’ as explained in the seminal case of Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 2 CLJ 36 & [1996] 2 MLRA 491 where Gopal Sri Ram JCA sitting at the Supreme Court reviewed the jurisprudence on Section 256(3) of the NLC 1965 and held that the Courts should only refuse an order for sale if a chargor can establish the existence of cause to the contrary. [31] Gopal Sri Ram JCA explained that “cause to the contrary” is established only in three categories of cases, namely: - S/N emhlUhDo0Uanlo8VwktgnQ i. When a chargor is able to bring his case within any of the exceptions to the indefeasibility doctrine in s 340 of the NLC; ii. When a chargor can demonstrate that the charge had failed to meet the conditions precedent for the making of an application for an order for sale; and iii. When a chargor can demonstrate that the grant of an order for sale would be contrary to some rule of law or equity. [32] As an aside, it would not be remiss of me to say that Justice Gopal Sri Ram who passed away recently in 2023 was an eminent jurist of the highest order. Leaving a lucrative practice, he was appointed directly to the Court of Appeal in 1994. His contributions to the legal jurisprudence of Malaysia are immense. Besides his decision in Low Lee Lian which simplified and radically changed the law on Order for Sale, another landmark decision of his is the Federal Court decision in Boustead Trading (1985) Sdn Bhd V. Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 FC. This case is the locus classicus on the doctrine of estoppel in Malaysia. Decision [33] I allow the OS with the following orders: - i) Order in terms for Enclosure 1 prayer 1 with the additional words “to satisfy the sums secured under the Charge amounting to RM 53,147,052.77 as at 12-12-2023 which is the date of the hearing S/N emhlUhDo0Uanlo8VwktgnQ of this Originating Summons. I do not allow this part of the prayer “together with all profits … client basis”. ii) Auction fixed on 20-06-2024. iii) Order in terms for prayers 3 to 9 and 11. iv) Prayer 10 is not allowed as premature. v) Prayer 12 is not allowed as premature. vi) Costs of RM 10,000 to be paid by the Defendant to the Plaintiff subject to allocatur. ………(signed).....………. Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 08th January 2024 COUNSEL: 1) Sathya Kumardas (with her, Koo Yin Soon and Koo Jia You) for applicant. (Shearn Delamore & Co (Kuala Lumpur)) S/N emhlUhDo0Uanlo8VwktgnQ 2) Alex De Silva (with him, Sundaradevan and Joshua Cowie) for respondent. (Bodipalar Ponnudurai De Silva (Kuala Lumpur)) LEGISLATION REFERRED TO: 1) Order 1A Rules of Court 2012. 2) Order 2 rule 1 Rules of Court 2012. 3) Order 83 Rules of Court 2012. 4) Order 83 rule 3(1) of the Rules of Court 2012. 5) Order 83 rule 3(2) of the Rules of Court 2012. 6) Order 83 rule 3(3) of the Rules of Court 2012. 7) Order 83 rule 3(6) of the Rules of Court 2012. 8) Order 83 rule 3(7) of the Rules of Court 2012. 9) Section 25 (1)b National Land Code 1965. 10) Section 256 of the National Land Code 1965. 11) Section 257 of the National Land Code 1965. CASES REFERRED TO: 1) Asia Commercial Finance (M) Bhd v Kimden Housing Development Sdn Bhd [1993] 1 MLJ 283. 2) Bank Pertanian Malaysia v Blue Valley Plantations Bhd & 5 Ors [2002] MLJU 212 HC. 3) Boustead Trading (1985) Sdn Bhd V. Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 FC. 4) Diamond Peak Sdn Bhd v United Merchant Finance Bhd [2003] 2 MLJ 346 CA. S/N emhlUhDo0Uanlo8VwktgnQ 5) Duli Yang Amat Mulia Tunku Ibrahim Ismail lbni Sultan lskandar Al-Haj v Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 FC. 6) Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 2 CLJ 36 SC & [1996] 2 MLRA 491 SC. 7) Malayan Banking Berhad v Marilyn Ho Siok Lin [2006] 7 MLJ 249 HC. 8) Perwira Habib Bank Malaysia Bhd v Lum Choon Realty Sdn Bhd [2006] 5 MLJ 21 FC. S/N emhlUhDo0Uanlo8VwktgnQ