Silveron Builders Sdn Bhd v 1. ) New Century Realty Sdn Bhd (JA-22NCvC-71-06/2020)

1.

NEW CENTURY REALTY SDN BHD (Dalam Pelikuidasian)

3.

TCY JAYA SDN BHD YHL PROPERTY SDN BHD …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT [Enclosures 79 & 81] Introduction [1] These are two applications filed separately by the 3rd and 4th Defendants in Enclosures 79 and 81, respectively under O. 18 r. 19(1)(b), 19/01/2023 10:34:56

and (d) of the Rules of Court 2012 (“ROC”) to strike out the Plaintiff’s claim against them. [2] As a background of facts, vide a settlement agreement (“Settlement Agreement”) entered into on 24.9.2003 between the Plaintiff, Anson Realty Sdn Bhd (“ARSB”), Anson Perdana Bhd (“APSB”) and Prodeal Sdn Bhd (“PSB”), the parties agreed, inter alia, that –

the Plaintiff, vide a letter of award dated 16.3.1999, had awarded ARSB a sub-contract to carry out works in Faber Tiara

in consideration thereof, APSB as the guarantor executed a guarantee and indemnity in favour of the Plaintiff wherein APSB agreed to ensure the due performance and discharge by ARSB of its obligations under the letter of award;

in turn, the Plaintiff was indebted to PSB in the sum of RM310,440.81;

ARSB was indebted to the Plaintiff a sum of RM600,000.00 (“Debt”); and

ARSB admitted that it was the beneficial owner of nine units of shop lots (“Units”) which all located in a building called “Plaza Century” (“Building”). This Building was erected on a land held under Geran 75853 Lot 15309 Bandar Johor Bahru, Johor Bahru (“Land”). Under the Settlement Agreement, ARSB agreed to surrender the Units to the Plaintiff as the full and final settlement of the Debt. [3] The 1st Defendant who was the registered proprietor of the Land, sold the Units to the Plaintiff vide nine Sale and Purchase Agreements, all dated 18.2.2004 (“Agreements”) which contained identical terms and conditions except the particulars and selling prices of the Units. However, the transfer of the Land from the 1st Defendant to the Plaintiff was never executed. [4] The Plaintiff lodged a private caveat (1st caveat) on the Land on 22.4.2004, but was later removed via an order of the Court pursuant to an application in 2009 by the 1st Defendant and without any resistance by the Plaintiff. [5] Before its winding-up in 2010, the 1st Defendant sold and transferred the Land to the 2nd Defendant vide a sale and purchase agreement dated 29.7.2008. [6] The 2nd Defendant later sold the Land to the 3rd Defendant at the purchase price of RM650,000.00 vide a sale and purchase agreement dated 2.10.2009. The transfer of the Land was registered on 9.11.2010. At the time of the purchase, there were an old hotel building known as “11 Century Hotel” and a dilapidated, unoccupied and unmaintained building known as “Wisma Abad” on the Land. The Land was later charged by the 3rd Defendant to Affin Bank Berhad on 9.11.2010 to finance the purchase. [7] In November 2017, the 4th Defendant became the registered proprietor of the Land after purchasing it from the 3rd Defendant with the purchase price of RM73 million. All buildings on the Land were subsequently demolished to make way for a development project which the 4th Defendant is developing with its joint-venture partner. [8] It is pertinent to note that all this time, since 2004, the Plaintiff had not commenced any proceedings against the 1st Defendant. [9] The Plaintiff lodged another private caveat (2nd caveat) on 18.7.2019. However, the caveat was removed by Justice See Mee Chun (now JCA) on 15.7.2020. The Plaintiff lodged another private caveat (3rd caveat) on 29.6.2020 but withdrawn it on 6.8.2020. [10] On 9.6.2020, the Plaintiff filed the Writ and Statement of Claim (“SOC”) against the Defendants for, inter alia, a declaration that the Units are beneficially owned by the Plaintiff and a claim of damages due to the conspiracy allegedly done by the Defendants making the Plaintiff to suffer losses as well as denying the Plaintiff from beneficially owning the Units. [11] The 1st Defendant did not file any defence as it was wound-up while the 2nd Defendant did not even enter an appearance. [12] The 3rd Defendant filed its Statement of Defence and Counter-claim on 3.8.2020 and the 4th Defendant filed its Statement of Defence on 23.7.2020. [13] The Plaintiff again lodged another private caveat (4th caveat) on 13.8.2020. Nonetheless, this caveat was removed by Justice Evrol Mariette Peters on 5.10.2020. [14] On 17.12.2020, the 3rd and 4th Defendants filed separate applications under O. 14A of the ROC for this Court to determine, inter alia, whether the Agreements conferred only contractual rights to the Plaintiff and the Plaintiff may not seek a declaration of ownership of parts of the Building as well as the Plaintiff’s claim against the 3rd and 4th Defendants be dismissed with costs. [15] On 11.3.2021, Justice Evrol Mariette Peters allowed these applications with costs. As a consequent, the Plaintiff’s claims against the 3rd and 4th Defendants were also dismissed. [16] Dissatisfied with that decision, the Plaintiff filed an appeal to the Court of Appeal on 7.4.2021 which the appeal was allowed on 17.12.2021. Learned counsel for the 4th Defendant averred that the Court of Appeal, after making the decision, confirmed that its decision would not prevent the parties from making any application at the High Court as O. 14A of the ROC was not suitable to determine a case based on an alleged tort of conspiracy. [17] Subsequently, the 3rd and 4th Defendants filed separately two applications on 16.6.2022 and 16.7.2022, respectively to strike out the Plaintiff’s claim against them based on the following grounds, inter alia –

there was no element of tort of conspiracy in the Plaintiff’s SOC against the 3rd and 4th Defendants as the Agreements were only between the Plaintiff and the 1st Defendant; and

the Plaintiff’s right in the Building is only as a licensee of the 1st Defendant. The Plaintiff’s preliminary objections [18] During the hearing of these applications, the Plaintiff raised the following preliminary objections:

the 3rd and 4th Defendants failed to specify which parts or paragraphs of the Plaintiff’s SOC sought to be struck out; and

the 3rd and 4th Defendants failed to file these applications at the earliest possible opportunity and the present applications are merely an afterthought. The Plaintiff averred that the applications must be made promptly and before the close of pleadings. [19] For the 1st ground of the Plaintiff’s preliminary objections, I find that there is nowhere in O. 18 r. 19(1) of the ROC requiring any applicant for the striking out of a pleading to specify which part of the pleading to be struck out. In fact, the statutory provision gives the court a wide discretion to strike out any claim which the court is satisfied that is frivolous, vexatious or is an abuse of process of the court. [20] Notwithstanding to the Plaintiff’s objection on this issue, O. 1A of the ROC requires the court to focus on the justice rather than any irregularity unless the irregularity has caused any miscarriage of justice. In Amirthanayaki Kumarasamy v. Lembaga Kelayakan Profession Undang-Undang, Malaysia [2010] 6 CLJ 593, the Court of Appeal held: "[12]... To this court, justice of the case should prevail. A person or litigant should not be deprived of his/her day in a court of law just on technical procedural grounds like in the present case. Even if the appellant had commenced the application by way of originating summons (not by way of Form 111A as required under O. 53 ), all the relevant facts and evidence for consideration had been forwarded to the court. No prejudice was ever occasioned to any party in the proceedings, including the court. To strike out the appellant's application at this stage of the proceedings (without hearing the merits) is obviously unfair to the appellant who came to court to seek justice and a fair hearing. [13] The above finding is in line with the provision of O. 1A of the Rules of the High Court 1980 which stresses that the court or judge shall have regard to justice of a case. The said O. 1A provides: In administering any of the rules herein the Court or a judge shall have regard to the justice of the particular case and not only to the technical non-compliance of any of the rules herein. [14] Such procedural technical objections (as in the present case) should not be allowed to obstruct the process of justice to the deserving. As we move towards the era of facilitating the process of litigation, the raising of objection on technical grounds would certainly and clearly be a thing of the past. It is clearly the intention and wisdom of the Rules Committee to provide for the smooth administration of the due process and administration of justice by way of substantial merits of the case and not merely on procedural technical defaults. (see: Beauford Baru Sdn Bhd v. Gopala Krishnan a/l VK Gopalan [2002] 3 CLJ 686). [15] A judge should not be so besotted by the rules that his sense of justice and fairness becomes impaired because of his blithered fixation on technicalities of the rules and the cold letter of the law (see:Megat Najmuddin bin Dato' Seri (Dr) Megat Khas v. Bank Bumiputra Malaysia Bhd [2002] 1 CLJ 645 - per: Mohtar Abdullah FCJ)." [21] On the 2nd preliminary objection, both the 3rd and 4th Defendants averred that there was no inordinate delay in the filing of these applications. According to them, these applications were made after the Court of Appeal decided that the 3rd and 4th Defendants’ striking out applications under O. 14A of the ROC were not suitable for a claim of this nature. [22] Although these applications were filed more than six months after the Court of Appeal decision, I agree that there was no inordinate delay in filing them. It is a cardinal principle that a delay per se is not an ample ground to deny any application unless there is a conclusive evidence that the application has prejudiced, embarrassed and delayed the fair trial of the action. Nonetheless, there was no such evidence mounted by the Plaintiff to show those elements. Further, there is nowhere in the O. 18 of the ROC to suggest any specific time frame that a striking out application to be made. [23] In light of the above, I find that the Plaintiff’s preliminary objections are without merits. Law on striking out of claim [24] It is trite that an application under O. 18 r. 19(1)(b) and or (c) of the ROC can be succeeded only when the claim (or counter-claim) is on the face of it “obviously unsustainable”. O. 18 r. 19(1) of the ROC states – “Striking out pleadings and endorsements (O. 18, r. 19)

19.

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that —

it discloses no reasonable cause of action or defence, as the case may be;

it is scandalous, frivolous or vexatious;

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”. [25] In Abdul Rahim Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2000] 1 MLRA 111, the Court of Appeal held that on an application under O. 18 r. 19(1) the court has only to consider whether the claim discloses a reasonable cause of action. The well-established principle is that the court will not summarily strike out pleadings, except only in plain and obvious cases where the claim or counterclaim is plainly and obviously not sustainable. [26] In Bandar Builders Sdn Bhd & 2 Ors v United Malayan Banking Corporation Bhd [1993] 1 MLRA 611; [1993] 4 CLJ 7, Mohamed Dzaiddin bin Hj Abdullah, SCJ (as he then was) held that – "The principles upon which the Court acts in exercising its power under any of the four limbs of O. 18 r. 19(1) Rules of the High Court are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck v. Wilkinson [1899] 1 QB 86, p. 91), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it "obviously unsustainable" (Attorney-General of Duchy of Lancaster v. L. & N.W. Ry. Co. [1892] 3 Ch. 274, CA). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2 All ER 871, CA.). The authorities further show that if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. 3 (which is in para materia with our O. 33 r. 2 Rules of the High Court) (Hubbuck v. Wilkinson) (supra). The Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable.”. [27] The Lordship further explained that – “It has been said that so long as the pleadings disclose some cause of action or raise some question fit to be decided by the Judge, the mere fact that the case is weak and not likely to succeed at the trial is no ground for the pleadings to be struck out (Moore v. Lawson [1915] 31 TLR 418 CA); (Wenlock v. Moloney (supra)).”. [28] The issue before the court now is whether or not the Plaintiff’s claim against the 3rd and 4th Defendants is plainly and obviously unsustainable. Tort of conspiracy [29] In Renault SA v. Inokom Corp Sdn Bhd & Anor [2010] 5 CLJ 32; [2010] 5 MLJ 394, the Court of Appeal laid down the key principles for an allegation of conspiracy to succeed. KN Segara JCA when delivering the judgment of the court said – [32] In regard to the tort of conspiracy, the following need to be satisfied at this interlocutory stage:

an agreement between two or more persons (that is an agreement between Tan Chong and others);

an agreement for the purpose of injuring Inokom and Quasar;

that acts done in execution of that agreement resulted in damage to

damage is an essential element and where damage is not pleaded the Statement of Claim may be struck out. [see Yap JH v. Tan Sri Loh Boon Siew & Ors [1991] 3 CLJ 2960; [1991] 4 CLJ (Rep) 243 HC] [30] The Plaintiff averred that the Defendants since 2009 had conspired to renegade on the spirit of the Settlement Agreement which entered into by the Plaintiff and three others. However, I find that the Plaintiff failed to provide a complete narrative of facts to establish the elements of conspiracy against the 3rd and 4th Defendants when they were not even the parties to the Settlement Agreement. [31] Not only that, the Plaintiff also failed to prove any evidence that there was any agreement between the Defendants for the purpose of injuring the Plaintiff as required by Renault SA (supra). It is no doubt that all the Defendants are totally strangers and no nexus to each other except all the sale and purchase agreements relating to the Land between the 1st, 2nd and 3rd Defendants were prepared by a legal firm namely Messrs. Tea, Kelvin Kang & Co. (“TKKC”). TKCC also represented the 4th Defendant in requesting the Plaintiff to remove the 2nd Caveat. [32] Nonetheless, TKCC was not named as a party to this Suit neither any legal action was taken against TKCC by the Plaintiff on the alleged conspiracy to injure the Plaintiff. [33] In short, the Plaintiff failed to explain in detail about the conspiracy theory between the 3rd and 4th Defendants and other Defendants especially on –

the participation of all Defendants by way of agreement and their respective roles;

how the agreement between the Defendants had injured the

how the execution of agreement between the Defendants had resulted the Plaintiffs suffering losses as well as depriving it from beneficially owning the Units. [34] In the final analysis, after perusing the Plaintiffs’ SOC, I am satisfied that the elements of the alleged act of conspiracy between the 3rd and 4th Defendants and other Defendants had not been cogently and reasonably disclosed and established by the Plaintiff. On the face of it, the Plaintiffs had failed to show any combination of efforts on the part of all Defendants including the 3rd and 4th Defendants to injure the Plaintiffs. [35] In light of the above, I find that the SOC is on the face of it obviously unsustainable and clearly discloses no valid or reasonable cause of actions against the 3rd and 4th Defendants. Therefore, I allow the 3rd and 4th Defendants’ applications in Enclosures 79 and 81 with costs. Dated: 17.1.2023 -signed- (SHAMSULBAHRI BIN HAJI IBRAHIM) Judicial Commissioner, Johor Bahru High Court Counsels: For the Plaintiff - Mohammad Danial Bin Hazizan; Messrs. S. Ravenesan For the 3rd Defendant - Mathews George; Messrs. Mathews George & Co. For the 4th Defendant - Gan Techiong; Messrs. Gan & Lim Cases referred to:  Abdul Rahim Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2000] 1 MLRA 111  Amirthanayaki Kumarasamy v. Lembaga Kelayakan Profession Undang-Undang, Malaysia [2010] 6 CLJ 593  Bandar Builders Sdn Bhd & 2 Ors v United Malayan Banking Corporation Bhd [1993] 1 MLRA 611; [1993] 4 CLJ 7  Renault SA v. Inokom Corp Sdn Bhd & Anor [2010] 5 CLJ 32; [2010] 5 MLJ 394 Legislations referred to:  Rules of Court - O. 18 r. 19(1)