XXXX v Kho Kok Hong (Disaman Dalam Kapasiti Sebagai Wasi & Pemegang Amanah Estet Kho Ah Soon, Si Mati) (PA-24NCVC-1163-12/2016)

The plaintiff sued the original defendant. The plaintiff recorded a default judgment against the original defendant. The plaintiff obtained an Order to charge the original defendant’s shares in a company. The plaintiff also obtained an Order appointing a Receiver to sell the shares, to utilise the sale proceeds to satisfy the judgment sum.

The original defendant then passed away.

The plaintiff then obtained an Order to substitute the executor of the original defendant’s estate as the defendant in the suit.

The substitute defendant (in his capacity as the executor of the estate) applies to set aside the Order appointing the Receiver.

Should the Order appointing the Receiver be set aside? CHRONOLOGY OF THE PERTINENT FACTS AND PROCEEDINGS Suit 139 [7] The Plaintiff here: Ng Kim Lim Holdings Sdn Bhd (P) sued Kho Ah Soon (now deceased) by filing Penang High Court suit PA-22NCVC-139- 02/2012 (Suit 139).

By a Judgment In Default dated 6.6.2012 (JID), P entered judgment against Kho Ah Soon (note: while he was alive) for the sum of approximately RM12 million. S/N gcnDRYsEZkaJnxgdcTdAg **Note : Serial number will be used to verify the originality of this document via eFILING portal

Kho Ah Soon held 166,667 ordinary shares in the company: Shoonshyan Properties Sdn. Bhd. (Shares).

By an Amended Order Absolute Imposing Charge On Securities dated 7.10.2015 (originally dated 5.8.2014), the Shares were charged to satisfy the judgment sum under the JID. I will refer to this Order as the “Charging Order”.

The Charging Order was made while Kho Ah Soon was alive.

By an Order dated 26.11.2015, the presiding High Court appointed Lim Tian Huat (Receiver), a licensed liquidator, as the Receiver for the Shares. The Order also sets out the Receiver’s authority and obligations. I will refer to this Order as the “Order appointing the Receiver”.

The Order appointing the Receiver was also made while Kho Ah Soon was alive. This OS 1163 [14] In December 2016, P filed against Kho Ah Soon this Originating Summons No. PA-24NCVC-1163-12/2016 (OS 1163). The purpose of OS 1163 was to obtain an Order to direct and enable the Receiver to sell the Shares, to satisfy the judgment sum under the JID.

By an Order dated 16.3.2017, the presiding High Court granted the Receiver the liberty to sell the Shares, subject to a minimum price of RM18,666,666.67. S/N gcnDRYsEZkaJnxgdcTdAg **Note : Serial number will be used to verify the originality of this document via eFILING portal

By an Order dated 21.11.2018, the High Court allowed the Receiver to reduce the minimum price for the Shares to RM16.8m.

The Orders above were made while Kho Ah Soon was alive.

On 3.10.2019, Kho Ah Soon passed away.

On 4.12.2019, the eventual substitute defendant here: Kho Kok Hong (D) obtained the Grant Of Probate to administer the estate of Kho Ah Soon (deceased).

By an Order dated 18.5.2021, the High Court substituted D, as the executor of Kho Ah Soon’s estate, as the named defendant in OS 1163, in place of Kho Ah Soon (deceased). I will refer to this Order as the “Substitution Order”.

The terms of the Substitution Order include these terms—

that D, as the executor of the estate of Kho Ah Soon (deceased), appointed under the Grant Of Probate dated 4.12.2019, be made a party to this action and to substitute the original defendant (Kho Ah Soon);

that this proceeding (OS 1163) be continued between P and D, as the executor of the estate;

that an amendment be made to the intitulement of this OS 1163 to reflect the substitution, for the purpose of filing subsequent cause papers. S/N gcnDRYsEZkaJnxgdcTdAg Page 6 of 16 [22] In August 2021, the Substitution Order and other cause papers were served on D. [23] On 8.8.2021, D made this Application (Enclosure 24), in this OS 1163 proceeding, to set aside the Order appointing the Receiver. D’S SOLE GROUND [24] D’s sole ground to set aside the Order appointing the Receiver is that the Order is not in proper form. [25] In his Written Submissions, D puts his argument in this way—the JID, the Charging Order and the Order appointing the Receiver were “against the deceased (Kho Ah Soon) simpliciter and not in the form of [a] judgment de bonis testatoris”. And “after having obtained the Substitution Order”, the Order appointing the Receiver “can no longer be enforced against the assets of the estate”, because the “judgment” is not in proper form. [26] ”Simpliciter” means simply, or absolutely, or here: personally. A “judgment de bonis testatoris” means a judgment against the assets of the testator (here: Kho Ah Soon (deceased)). [27] I found D’s point unclear. So during the hearing, I asked D to elaborate. D made five further points—

the Order appointing the Receiver was made in 2015;

the Substitution Order was made in 2021; S/N gcnDRYsEZkaJnxgdcTdAg Page 7 of 16

after obtaining the Substitution Order, the Order appointing the Receiver (which D now seeks to set aside) “is in simpliciter”;

the JID, however, must be in one of the forms in Form 75 prescribed under Order 42 Rule 5 of the Rules Of Court 2012. The relevant prescribed form for the JID must follow paragraph

in Form 75; - the title of paragraph (o) reads: “Judgment for liquidated sum against personal representative (O. 42, r. 5)”; - the form starts: “It is adjudged that the defendant as executor (or administrator) of the abovenamed……….deceased do pay the plaintiff RM……….”.

if P wants to enforce an Order against D, P must amend the relevant Orders. [28] I still found D’s argument not any clearer. Nevertheless, I endeavoured to decipher D’s argument thus—The JID was entered against Kho Ah Soon. The Charging Order was made against Kho Ah Soon. The Order appointing the Receiver was made against Kho Ah Soon. But Kho Ah Soon passed away. His passing made it necessary for P to obtain the Substitution Order to enforce against Kho Ah Soon’s estate. However, P did not apply to amend the Order appointing the Receiver, making the Order appointing the Receiver not in proper form. And as it is not in proper form, the Order appointing the Receiver should be set aside. S/N gcnDRYsEZkaJnxgdcTdAg Page 8 of 16 D’s CASE LAW AUTHORITIES ARE NOT APPLICABLE [29] In his Written Submissions, D relies on the following case law authorities to support his argument that the Order appointing the Receiver “can no longer be enforced against the assets of the estate in [the] absence of [a] judgment in proper form”. (I must emphasise here that D’s argument is that it is the judgment (the JID) that is not in the proper form—

Savena Supramaniam Pillay v Tan Kah Chiat administrator of Tan Kong Liang deceased [1934] 3 MLJ 133 (Singapore Court Of Appeal);

Chinese Tin Mines Rehabilitation Loans Board v Chee Hoi Voon [1958] 1 MLJ 269 (HC); and

Shell Malaysia Trading Sdn Bhd v Leong Yuet Yeng & Ors [1990] 3 MLJ 254 (HC). [30] I find that these cases do not apply to the facts of this Application. These cases stand for the principle that a plaintiff cannot enter judgment against a defendant, who is an executor, to enforce the judgment against the estate of the deceased testator, if the judgment does not contain the words “as executor” to specify the capacity of the defendant. A judgment without the words “as executor” tagged to the name of the defendant, makes the judgment a personal judgment against the named defendant. Such a judgment cannot be enforced against the estate of the deceased testator. [31] Put in another way—when a plaintiff sues a defendant and has entered a default judgment against the defendant simpliciter (personally), S/N gcnDRYsEZkaJnxgdcTdAg Page 9 of 16 the judgment is not enforceable against the estate of the testator, of which the defendant is an executor. [32] These cases have little or no application to D’s Application to set aside the Order appointing the Receiver. THE REASONS FOR NOT SETTING ASIDE THE ORDER APPOINTING THE RECEIVER [33] I am of the view that the Order appointing the Receiver should not be set aside just because it is allegedly not in proper form. My reasons are as follows. [34] First, the very terms of the Substitution Order are clear and exact. The Substitution Order provides that—

D, as the executor of Kho Ah Soon’s estate, is made a party in OS 1163, substituting the original defendant: Kho Ah Soon (deceased);

this OS 1163 proceeding is continued between P and D, as the executor of Kho Ah Soon’s estate;

amendments were ordered to be made to the intitulement of OS 1163 to state the substitution of D, as the executor of Kho Ah Soon’s estate, as the named defendant in the proceeding. [35] Second, Order 15 of the Rules Of Court 2012 contains the answer to the issue. Order 15 Rule 7(1) provides that where a party dies but the S/N gcnDRYsEZkaJnxgdcTdAg Page 10 of 16 cause of action survives, “the action shall not abate by reason of the death”. [36] And Order 15 Rule 7(2) provides that where the liability of a party “devolves upon some other person”, to “ensure that all matters in dispute” may be “effectually and completely determined”, the Court may order that that other person be made a party and the proceedings be carried on “as if he had been substituted” for the deceased party. [37] Then Order 15 Rule 8(4) provides that where a person substitutes an existing party and the substitution order is served on the substituting party—“all things done in the course of the proceedings” before the making of such a substitution order “shall have effect in relation to the new party as they had in relation to the previous party”. [38] Although D raised an issue in his affidavits about not receiving letters and cause papers timeously, at the hearing of this Application, D dropped the issue about service as a ground to set aside the Order appointing the Receiver, by stating that his sole ground to set aside the Order appointing the Receiver is that it is not in proper form. [39] To my mind, where there is an Order such as the Substitution Order here, all the steps taken and all the Orders made before the Substitution Order will affect and bind D, in his capacity as the executor of Kho Ah Soon’s estate, just as they had affected and bound Kho Ah Soon while he was alive. S/N gcnDRYsEZkaJnxgdcTdAg Page 11 of 16 [40] Put differently, all proceedings, including Orders made, will be as if they were made against D, as the executor of Kho Ah Soon’s estate (which is effectively against the estate). [41] For the convenience of reference, the pertinent portions of Order 15 Rule 7 and Rule 8 are set out below—

Change of parties by reason of death (O. 15, r. 7)

Where a party to an action dies or becomes bankrupt but the cause of action survives, the action shall not abate by reason of the death or bankruptcy.

Where at any stage of the proceedings in any cause or matter the interest or liability of any party is assigned or transmitted to or devolves upon some other person, the Court may, if it thinks it is necessary in order to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, order that other person to be made a party to the cause or matter and the proceedings to be carried on as if he had been substituted for the first-mentioned party. An application for an order under this paragraph may be made ex parte. .

The person on whose application an order is made under this rule shall, unless the Court otherwise directs, serve the order on every other person who is a party to the cause or matter or who becomes or ceases to be a party in accordance with the order, and serve with the order on any person who becomes a defendant a copy of the writ or originating summons by which the cause or matter was begun Provisions consequential on making of order under rule 6 or 7 (O. 15, r. 8) S/N gcnDRYsEZkaJnxgdcTdAg Page 12 of 16

(4) Where by an order under rule 6 or 7 a person is to be added as a party or is to be made a party in substitution for some other party, that person shall not become a party until—

where the order is made under rule 6, the writ has been amended in relation to him under this rule and (if he is a defendant) has been served on him; or

where the order is made under rule 7, the order has been served on him under rule 7(4) or, if the order is not required to be served on him, the order has been sealed with the seal of the Court, and where in accordance with the foregoing provision a person becomes a party in substitution for some other party, all things done in the course of the proceedings before the making of the order shall have effect in relation to the new party as they had in relation to the previous party, except that an entry of appearance by the previous party is not dispense with an entry of appearance by the new party in Form 16. [emphasis mine] [42] Further, the Malaysian Civil Procedure, 2021, Volume 1, Sweet & Maxwell (White Book) at page 192, paragraph 15/8/6 states— Where the order is for substitution, the substituted party takes the exact position of the person being substituted: Chorlton v Dickie (1879) 13 Ch D 160. All preceding matters will therefore be in effect against the new party as against the old... [emphasis mine] S/N gcnDRYsEZkaJnxgdcTdAg Page 13 of 16 [43] Third, in this Application, D applies to set aside the Order appointing the Receiver, which was made in Suit 139, not in this OS 1163. [44] Suit 139 was the writ action by P against Kho Ah Soon for the RM12 million. The JID for the RM12 million was entered against Kho Ah Soon in Suit 139. The Charging Order over the Shares was made in Suit 139. And the Order appointing the Receiver was made in Suit 139. [45] OS 1163 was filed to obtain an Order to empower the Receiver to sell the Shares, at a minimum reserve price, to realise the proceeds to satisfy the judgment sum under the JID. [46] Since D is challenging the Order appointing the Receiver, D should have made this Application to set aside the Order appointing the Receiver in Suit 139, and not in this OS 1163. [47] Fourth, when D filed this Application to set aside the Order appointing the Receiver, D himself cited the amended intitulement. On D’s Notice Of Application (Enclosure 24), D cited the defendant as “Kho Kok Hong (NRIC No. 760413-07-5361) (sued in the capacity of Executor & Trustee of the Estate of Kho Ah Soon, deceased)”. [48] This to me demonstrates and discloses that D has accepted the full effect of the Substitution Order, in that he, as the executor of Kho Ah Soon’s estate, has taken on the obligations of the estate. [49] Fifth, I considered and applied the balance of justice to this Application. If the Order appointing the Receiver is not set aside, D may still have recourse to apply to challenge the JID or the Charging Order or S/N gcnDRYsEZkaJnxgdcTdAg Page 14 of 16 the Substitution Order, and have those challenges canvassed and determined. [50] But if the Order appointing the Receiver is set aside on the ground that the JID is not in proper form, or on the ground that the JID, or the Charging Order, or the Substitution Order, or the Order appointing the Receiver are not in proper form, then the reliefs and remedies of P’s successful litigation through Suit 139 are extinguished on a procedural technicality. That will not be a just outcome. [51] In this regard, I am mindful of the words of Order 1A of the Rules Of Court 2012. Order 1A requires me to have regard to “the overriding interest of justice and not only to the technical non-compliance with the Rules”. [52] I am also mindful of the instruction in Order 92 Rule 4 of the Rules Of Court 2012 “to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the court”. S/N gcnDRYsEZkaJnxgdcTdAg Page 15 of 16 CONCLUSION [53] For these reasons, I dismiss D’s Application to set aside the Order appointing the Receiver, with costs of RM10,000.00 to be paid by D to P, and costs of RM7,500.00 to be paid by D to the Receiver. All costs are to be paid by 22.6.2023. Costs are subject to the allocatur. Dated: 24 July 2023 signed KENNETH ST JAMES Judicial Commissioner High Court of Penang Counsel/Solicitors For the Plaintiff: Henry Tung Mun Yeong [Messrs. Tung, Chan & Partners (Pulau Pinang)] For the Defendant: Khairul Anwar Hairudin [Messrs. Siew, Khairul & Co. (Selangor)] For the Receiver: Keith Kwan with Sarah Arina [Messrs. Tuan, Mohd Zain & Co. (Kuala Lumpur)] S/N gcnDRYsEZkaJnxgdcTdAg Page 16 of 16 Legislation referred to:

Order 15 Rule 7 (1), Order 15 Rule 7(2), Order 15 Rule 8(4), Order 42 Rule 5 of the Rules Of Court 2012. Cases referred to:

Savena Supramaniam Pillay v Tan Kah Chiat administrator of Tan Kong Liang deceased [1934] 3 MLJ 133

Chinese Tin Mines Rehabilitation Loans Board v Chee Hoi

Shell Malaysia Trading Sdn Bhd v Leong Yuet Yeng & Ors [1990] 3 MLJ 254 S/N gcnDRYsEZkaJnxgdcTdAg