Plusbury Development Sdn Bhd v Goldpage Assets Sdn Bhd (W-02(NCC)(A)-2208-10/2018)

ARBITRATION The parties herein agree that any dispute arising out of or in connection with this Agreement shall be referred to arbitration in Malaysia in accordance with the provisions of the Arbitration Act 1952 first and thereafter appeal to the Malaysian Court. Supplemental Venture Agreement (SVA) dated 6.7.2009 [8] The parties entered into a supplemental joint venture agreement dated 6.07.2009, among others, to replace clause 3 of the JVA with a new payment clause which modified the manner in which the consideration would be paid to Plusbury. Letter from Plusbury dated 7.11.2013 - Extension of JVA & SJVA [9] Vide a letter dated 7.11.2013, Plusbury confirmed and agreed with the request by Goldpage for an extension of the JVA and Supplemental JVA from the original expiry date of 5.7.2015 to 5.7.2018 i.e. 3 years extension was given. 5 [10] There was a dispute on the letter dated 7.11.2013, among them, Plusbury stated that the letter was in fact an offer to extend the completion date of the Project. However, since the letter was never accepted and/or acknowledged by Goldpage, Plusbury’s Board of Directors did not sanction any extension. [11] On the other hand, Goldpage believed that the Project had been duly extended in light of the said letter. Bank Rakyat Loan to Goldpage secured by 3rd party charge by Plusbury [12] Plusbury had executed a third-party charge over part of the land in favour of Bank Kerjasama Rakyat Malaysia Berhad (“Bank Rakyat”) to secure a loan facility to be granted to Goldpage as the borrower. [13] On 4.1.2016, Plusbury issued a letter informing Goldpage that they were terminating both the JVA and the Supplemental JVA with immediate effect in view of the following default:

(a) Goldpage had failed to make full payment of RM61.5 million by

5.7.2015. 6

(b) Goldpage was found to be insolvent as it was slapped with a number of court cases for non-payments and Bank Rakyat had issued a letter of demand for the loan it extended to the company.

(c) Goldpage had not completed all the projects in accordance with the proposed schedule as specified in the Agreements. [14] On 7.6.2016, Majlis Daerah Kuala Selangor declared the Project as an abandoned project. [15] On 30.11.2016, the Ministry of Housing and Local Government declared Goldpage to be a “sick developer” (Pemaju Sakit). [16] On 26.2.2018, Goldpage, through its solicitors, wrote to Plusbury informing it of Goldpage’s intention to comply with clause 3 of the JVA and to exercise its rights under the JVA. [17] On 12.3.2018, Plusbury, through its solicitors, issued a letter informing Goldpage that the JVA had been “deemed terminated”. They referred to Goldpage’s letter dated 26.2.2018 and Plusbury termination letter dated 4.1.2016. 7 [18] On 13.6.2018, Goldpage, through its solicitors, informed Plusbury that:

(a) it denied receiving the termination letter dated 4.1.2016.

(b) it denied Plusbury’s purported termination of the JVA and Supplemental JVA based on the reasons set out in the letter. [19] Goldpage also enquired if Plusbury was agreeable to waive clause 29 of the JVA with regards to the arbitration clause and have the dispute resolved in a court of law. On 22.6.2018, Plusbury, through its solicitors, informed Goldpage that it was not agreeable to waive clause 29 of the JVA. [20] On 28.6.2018, Goldpage issued a notice of arbitration to Plusbury. Application for Injunction Order [21] On 29.6.2018, Goldpage applied pursuant to section 11 of the Arbitration Act 2005 (Act 646) for an interim injunction (“Injunction Application”) restraining Plusbury from dealing with the said Land pending the final arbitral award. 8 [22] Goldpage contended that if the interim injunction is not granted, there will be a risk that Plusbury would deal in the said Land during the pendency of the arbitration in view of the fact that the said Land remains in the name of Plusbury. [23] On 8.10.2018, the learned Judge granted Goldpage an interim injunction. DECISION OF THE HIGH COURT [24] The findings of the learned Judge can be summarized as follows:

(a) there exists a bona fide issue to be tried.

(b) the mere fact that there exists a purported letter of termination dated 4.1.2016 which is disputed constitutes a serious issue for determination at the arbitral proceedings.

(c) the balance of justice lies in favour of the plaintiff in view of the fact that if the injunction was refused, the defendant would be at liberty to deal with the said Land in question which would deny the plaintiff’s rights under the JVA. 9

(d) the defendant is simply concerned about the sum of money it may potentially receive from the plaintiff under the JVA or from the sale of the said Land to a third party. ON APPEAL Affidavit on Further Evidence filed by Plusbury [25] On 16.1.2020, Plusbury filed an affidavit in Enclosure 20, to adduce further evidence of the matters related to Judicial Management application (“JM Application”) through an affidavit affirmed by Tang Fuie Koh on 15.1.2020. [26] In the JM Application, Plusbury asserted, that Goldpage was insolvent/unable to pay its debts as at the date of filing of the JM Application due to the following reasons:

(a) since 2015, various suits had been filed and claims were made against Goldpage by purchasers, suppliers and contractors for sums allegedly due and owing arising from the Project amounting to RM9,096,310.87. 10

(b) Goldpage was also vulnerable to claims of substantial amounts for liquidated damages for late vacant possession and costs for Certificates of Completion and Compliance as at 31.8.2019.

(c) as the Project had come to a halt due to the purported termination by Plusbury, coupled with the fact that Goldpage’s existing and potential claims outweigh its assets, it was evident that Goldpage was unable to pay its existing debts and would not be able to meet the potential claims. [27] Premised on the above, Plusbury took the position that there was no necessity for the injunction to be allowed. Goldpage’s Response [28] Goldpage filed 2 affidavits in Enclosures 24 and 26 in response to the further affidavit evidence filed by Plusbury. In their affidavits, Goldpage stated as follows:

(a) Plusbury did not obtain prior leave of the Court of Appeal to adduce the further evidence. 11

(b) Plusbury had delayed in filing the said affidavit which was filed on 16.1.2020 whereas Plusbury’s application to intervene in the JM Application was filed on or about 28.11.2019. Plusbury’s submission [29] Plusbury submitted that Goldpage has not satisfied the test as laid down in the case of Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193 for an injunction to be granted against Plusbury as there are no serious question to be tried. The learned counsel for Plusbury argued that there is no confusion or doubt on Plusbury’s termination of the JVA as the termination letter was served to the business address of Goldpage. Goldpage’s denial on having any knowledge of the termination letter should not carry any weight as it is a bare denial. Plusbury submitted that since June 2016, Goldpage has no capacity to fulfil any of its obligations under the JVA and the Supplemental JVA in the completion of the joint-venture project. Plusbury further submitted that the claim by Goldpage that it had settled the land premium of RM10,119.043.08 is highly disputed based on the fact that Goldpage has no financial means to make such payment on its own. Plusbury submitted that since the termination letter was issued against Goldpage, the JVA is no longer in existence and that 12 resulted in Plusbury being the sole proprietor of the said Land. Thus, Goldpage possess no standing and/or capacity to apply for an injunction against Plusbury in relation to the said Land. Plusbury further submitted that the injunction order against them is futile considering that Goldpage is currently insolvent and will not be able to complete the development project. This was based on the fact that Goldpage has filed for an application to be placed under judicial management (“JM Application”) but Goldpage has never disclosed this fact to the Court. Plusbury had stated that Goldpage had obtained the Injunction Order based on incomplete facts given to the Court and therefore the Injunction Order should not have been granted. Goldpage’s submission [30] Goldpage submitted that learned Judge had correctly applied the Keet Gerald Francis’s test and had exercised his discretion in granting the injunctive relief. Goldpage further submitted that the injunction is intended to hold Plusbury to its bargain and preserve the status quo. Goldpage argued that there is no challenge to the learned Judge’s finding that Plusbury’s purported termination of the JVA is a serious question to be tried. Goldpage stated that there is no delay since the parties had made new arrangement to waive the arbitration clause in the JVA and that Plusbury should not be 13 rewarded for approbating and reprobating. Goldpage submitted that the burden lies on Plusbury to show prejudice which it has failed to do so. Learned counsel for Goldpage further submitted that there was no prejudice for the following reasons:

(a) Plusbury is being held to its bargain;

(b) Plusbury’s interest is not in the said Land but in receiving the balance payment; and

(c) Plusbury has breached the JVA by selling 3 parcels of the said Land to the value of RM5.5 million. OUR DECISION [31] It was our considered view that the decision of the learned Judge was correct as it was premised on the correct principle of law. The requirements in Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193 provides that:

(a) the plaintiff's claim must disclose a bona fide serious issue to be tried. At this interlocutory stage, the court is not required to make a final determination on the merits of the claim or the rights of the parties; 14

(b) they must then consider where the justice of the case lies. In doing so, the court must consider the harm that the injunction would produce by its grant and the harm that would result from its refusal and come to the conclusion as to which party would suffer greater injustice. In determining this, the court must consider whether damages would constitute an adequate remedy in respect of the plaintiff's claim. If damages are adequate, the court should not grant the injunction sought for; and

(c) if the relevant factors are evenly balanced, the court should maintain the status quo. [32] We were of the view that the learned Judge had carefully considered the facts before him and correctly held that there was a bona fide serious question to be tried. The existence of the purported letter of termination dated 4.1.2016, which was disputed between the parties is sufficient, in our view, to constitute a serious issue for determination at the arbitral proceedings. [33] We were also of the view that the balance of justice lies with the grant of the injunction so as to preserve the status quo of the said Land which is 15 the subject matter of the dispute. Further, Goldpage has paid RM7 million towards the purchase of the said Land and is responsible for servicing a RM27.7 million loan from Bank Rakyat while Plusbury had sold 3 parcels of the said Land for a minimum purchase consideration of RM5.5 million, which in our view, if this is not restrained by the Court, would render the arbitration proceedings an exercise in futility. Further, Goldpage had also paid about RM10 million towards the premium of the said Land. [34] With regard to the new evidence adduced by Plusbury, we are of the view that section 69 of the Courts of Judicature Act 1969 (Act 91) does not impose a duty on the Court of Appeal to infer an implied term in a contractual dispute when the issue was neither raised nor pleaded by parties in the High Court. The appellate court has the discretion, in the interest of justice, to allow a new issue to be raised for the first time on appeal but it is to be noted that the discretion is to be exercised sparingly and under limited circumstances of the case. [35] After considering all the cause papers and the submissions of parties, both oral and written, and for the reasons stated above, we dismissed this appeal. The decision of the High Court dated 8.10.2018 is affirmed. Costs of 16 RM10,000.00 to the Respondent/Plaintiff subject to the payment of allocator fees. Order accordingly. -Signed-Dated: 16 November 2021 (SURAYA OTHMAN) Judge Court of Appeal Malaysia 17 CASE(S) REFERRED TO: 1) Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193. LEGISLATION REFERRED TO: 1) section 11 of the Arbitration Act 2005 (Act 646); and 2) section 69 of the Courts of Judicature Act 1969 (Act 91). COUNSEL (S): For the Appellant - Datuk Seri Gopal Sri Ram (with him S Ravenesan, Austen Fereira, Siti Nur Amirah Aqilah Binti Adzman and S Davenesan) Messrs S Ravenesan No. 54-1, Jalan Telawi Bangsar Baru 59100 Kuala Lumpur For the Respondent - S Ravindran Messrs Sreenevasan Young J-3A-13, Solaris Mont Kiara No. 2, Jalan Solaris 50480 Kuala Lumpur