Tai See Yoon & 217 Yang Lain Lain v NCT TROPIKA SDN BHD (CA-24NCC-13-11/2021)

The Plaintiffs vide an Originating Summons dated 12 November 2022 claiming for : i. A declaration that the Respondent has breached, failed to comply and abide by the terms and conditions of the Scheme Agreement as contained in the Respondent’s Explanatory Statement dated 3 September 2021 (“the Scheme”) and approved by the High Court Pursuant to order dated 15 October 2020 vide Kuantan High Court Originating Summons No: CA-24NCC-6-10/2020; ii. A declaration that the Scheme is terminated or is null and void; iii. The Orders dated 4 March 2021 and 19 August 2021 under Kuantan High court Originating Summons No.:CA-

This honorable court has dismissed the Plaintiff’s claim on 27 June 2022 with no order as to cost.

The Plaintiffs at all material time are the purchasers of units of service apartments in the project known as “Ion Delemen” which was developed by Galeri Tropika Sdn Bhd (“The Developer”). The Plaintiffs have executed Tenancy Agreements with the Respondent which includes terms related to a Guaranteed Rental Return Scheme (“GRR”).

The Tenancy Agreements also states that upon the expiry of the GRR, the Respondent retains sole right to extend the tenancy based on a Profit-Sharing Scheme (“PSS”).

On 23 June 2020, the Respondent filed a suit CA-24NCC-2- 6/2020 at Kuantan High Court for, inter alia an order to convene a creditor meeting pursuant to Section 366 of the Companies Act 2016 to consider, and if deemed fit, approve with or without modification a scheme of arrangement and compromise.

The Scheme of Agreement was approved at the Creditors meeting by the landlords/owners surpassing the majority required under Section 366(3) and (4) of Companies Act 2016.

Thus, the Respondent has subsequently obtained a sanction vide Kuantan Court Originating Summons No:CA-24NCC-6-10/2020 (“Sanction Order”) dated 8 October 2020 approving the Scheme of Arrangement pursuant to the terms and conditions agreed upon.

On 22 February 2021, the Respondent has filed a Notice of Application for a variation in the Scheme of Agreement i.e: an extension of time of the payment schedule. This honorable court has granted order in terms for the application on 4 March 2021 (“Extension order”).

9.

It is considered view that, the orders obtained by the Respondent are all lawfully and regularly obtained and there are no clear grounds for it to be set aside by this court.

It is pertinent in law that, for an order which is regularly obtained to be set aside, the Plaintiff must be able to proof the presence of illegality or lack of jurisdiction by the court when the order was granted.

This honorable court is guided by several leading cases which clearly mentioned regarding the principles of setting aside a perfected order.

With reference to the case of BADIADDIN BIN MOHD MAHIDIN & ANOR v ARAB MALAYSIAN FINANCE BHD [1998] 1 MLJ 393; “It is settled law that one High Court cannot set aside a final order regularly obtained from another High Court of concurrent jurisdiction. But one special exception to this rule is where the final judgment of the High Court could be proved to be null and void on ground of illegality or lack of jurisdiction.”

The abovementioned case clearly mentions that only in the instance of illegality or lack of jurisdiction, the court has the power to set aside a regularly obtained order.

This court is of the view that, the discretion to invoke inherent jurisdiction must be exercised judicially only in exceptional cases where there is really a need to set aside the order to uphold justice.

If this honorable court proceeds to set aside the orders obtained by the Respondent, it would be an act against the principle of law. This is because there is no element of illegality or lack of jurisdiction proven by the Plaintiffs.

In support this court rely in the decision by the Federal Court in CIMB INVESTMENT BANK BHD v METROPLEX HOLDINGS SDN BHD [2014] 6 MLJ 779 has adopted the principle in Badiaddin and held that; “Federal Court cautioned that in any attempt to widen the door of the inherent and discretionary jurisdiction of the superior courts to set aside an order of court ex debito justitiae to a category of cases involving orders which contravened 'any written law', the contravention should be one which defies a substantive statutory prohibition so as to render the defective order null and void on ground of illegality or lack of jurisdiction.”

This Federal Court case has laid down the principle that the defiance of any written law must not be a mere defiance but a defiance of substantive statutory prohibition which is absent in this case.

The Plaintiffs in this suit have failed to prove to this court that the orders obtained by the Respondent was through illegality or lack of jurisdiction. There is nothing to suggest to the same effect for this court to set aside the said orders which was regularly obtained.

Thus, this honorable is of the view that all three orders obtained by the Respondent were regular and shall not be set aside. 2ND ISSUE: THE PLAINTIFF HAVE NOT FILED ANY APPLICATION TO OPPOSE/ INTERVENE THE ORIGINATING SUMMONS AND/OR NOTICE OF APPLICATION FILED BY THE RESPONDENT UP UNTIL

The Plaintiffs’ at all material times have opted not to intervene the Originating Summon and also the Notice of Application filed by the Respondent to obtain the Sanction Order, Extension Order and also the Variation Order.

The Plaintiffs had time and knowledge regarding these applications yet has failed to intervene or oppose these applications at the time of proceedings. This honorable court accorded the Respondent contention whereby the Plaintiff has slept on their right throughout the proceedings.

Adopting a passage cited by the Respondent NITE BEAUTY INDUSTRIES SDN BHD & ANOR v BAYER (M) SDN [2000] 3 MLJ 314; “Thus, the would-be intervener who will be directly affected, either legally or financially, by any order which may be made in the action, must intervene before that order is perfected and whilst the court is still not functus officio. All proceedings came to an end upon the approval of the scheme of arrangement and compromise on 14 May 1999, thus the court no longer has any jurisdiction to make any order under Order 15

Applying the principle in the present case, it was clearly stated that the proceeding would have come to an end once the scheme of arrangement is approved by the court.

The Plaintiffs have failed to exercise their right during the proceedings and it would be unfair to the Respondent if this court opts to reopen and relitigate the matters that has already been decided upon. The principle of res judicate applies in this case.

The Plaintiff in their written submission has stated that the Respondent’s had mala fide intentions for filing an ex-parte application for the Variation Order and the Extension Order.

The Plaintiffs in fact at all material times had the opportunity to oppose to these applications because the Plaintiffs had knowledge about the Variation Order. The Variation Order was only obtained after joint discussion with the Scheme Creditors. The Respondent has also exercised their duty in informing the Suit Owners regarding the variation via Suite Owners’ Committee on 12 June 2021, 16 June 2021 and 18 June 2021.

Subsequent to the meetings, the Respondent has also invited all of the Suite Owners to a Suite Owner Briefing on 19 June 2021 where the terms of the proposed variations were presented.

This court is of the view that the Respondent has given full and frank disclosure with regards to the originating summons and also the notice of applications. It is unfair to the Respondent when the Plaintiff is only seeking to set aside those orders once it has been perfected by this court.

There was no evidence or circumstances to show that the Respondent’s had mala fide intentions against the Plaintiffs.

The Plaintiffs have failed to prove that the orders were obtained on bad faith and they have failed to intervene/set aside/raise any issues with regards to the Variation order and the Extension order during. Thus, the Plaintiffs are estopped from seeking these orders to be set aside once it has been perfected by this court.

From the reasons adumbrated, it is an inescapable conclusion that the orders obtained by the Respondent is still a valid enforceable order. In the upshot, this court dismissed the Plaintiffs application with no order as to cost. ZAINAL AZMAN BIN AB AZIZ JUDGE HIGH COURT MALAYA OF KUANTAN PAHANG DARUL MAKMUR DATED : 22 DECEMBER 2022 Plaintiff Solicitors : Mr Mark Ho together with Mr Eldarius Yong Tetuan Chellam Wong Unit L-06-08, No. 2 Jalan Solaris Solaris Mont Kiara, 50480 Kuala Lumpur Ref. No. : CW/L/MH/EY/4646.21 Respondent Solicitors : Dato' Wong Rhen Yen together with Mr Gary Ng and Mr Tan Wei Ji (Pupil in Chambers) Tetuan Dennis Nik & Wong No. 68-1, Jalan Telawi 1 Bangsar Baru, 59100 Kuala Lumpur Email : general@dnw.com.my