XXXX v Lim Chee Tat (WA-22NCC-77-02/2016)

SUNHOR BUILDERS SDN BHD DEFENDANTS GROUNDS OF DECISION (APPLICATION FOR LEAVE TO EXECUTE JUDGMENT AFTER 6 YEARS – ENCLOSURE 16) A.

The Plaintiff had obtained Summary Judgment against the Defendants dated 17-5-2016. The judgment obtained against the Defendants are as follows: -

Total sum of RM 4, 283, 777.98 to be paid by the Defendants to the Plaintiff.

(ii) Interest at 3.5% per annum above Base Lending Rate on the said judgment sum of RM 2, 283, 777.98 from 12-2-2016 to the date of full realization.

(iii) costs of RM 3,000.00.

The Plaintiff had also commenced Foreclosure Proceedings in the Originating Summons No: BA-24FC-514-04/2016 on the property held by the 2nd Defendant.

The Plaintiff obtained an order for sale for the said property on 23-8-2016 and this was only sold on 11-6-2024. There were in total 10 attempts to sell the property and the sale was only successful on the said date for the sum of RM 2, 808,000.00.

The First Defendant was wound up by an order of Court on 30-11- 2016 and proof of debt form was filed on 1-8-2016. The Third Defendant was also wound up on 20-09-2016 and a proof of debt form was filed on 1-8-2016.

It must be noted that the Plaintiff claims that the Second Defendant still owes it the sum of RM 7, 581, 359.40 that is allegedly due as of 28-1-

2025.has

The Plaintiff also suggests that it has since started bankruptcy proceedings against the 2nd Defendant. He was initially made a bankrupt twice by two third parties since been and annulled pursuant to section 105 of the Insolvency Act. B. Preliminary Issue Raised by 2nd Defendant

The 2nd Defendant has raised an issue concerning the alleged delay by the Plaintiff in filing the affidavits and submissions as directed by this Court.

I have taken the objection into consideration and find that there is no prejudice against the 2nd Defendant. This is after all an application for leave to enforce judgment and this Court will consider Order 1A of the Page | 4 Rules of Court. The 2nd Defendant has not suffered any prejudice and is entitled to put his case forward to object to the application and I find he is not prejudiced by the said affidavit and the submissions filed albeit late. What is important is the merits of the application especially in view that the Plaintiff did obtain a summary judgment against the Defendants. C. Applicable Law for Leave to Enforce Judgment after 6 years and Decision on Merits of Application 9. The application is premised on Order 46 rule 2 and rule 3 of the Rules of Court. “2. (When leave to issue any writ of execution is necessary (O. 46 r. 2)

A writ of execution to enforce a judgment or order may not be issued without the leave of the Court in the following cases:

where six years or more have lapsed since the date of the judgment or order;

where any change has taken place, whether by death or otherwise, in the parties entitled or liable to execution under the judgment or order;

where the judgment or order is against the assets of a deceased person coming to the hand of his executors or administrators after the date of the judgment or order, and it is sought to issue execution against such assets;

where under the judgment or order any person is entitled to relief subject to the fulfilment of any condition which it is alleged has been fulfilled; and

where any movable property sought to be seized under a writ of execution is in the hands of a receiver appointed by the Court.

Paragraph (1) is without prejudice to any written law or rule by which a person is required to obtain the leave of the Court for the issue of a writ of execution or to proceed to execution on or otherwise the enforcement of a judgment or order. Page | 6

Where the Court grants leave, whether under this rule or otherwise, for the issue of a writ of execution and the writ is not issued within one year after the date of the order granting such leave, the order shall cease to have effect, without prejudice, however, to the making of a fresh order.”

Application for leave to issue writ (O. 46 r. 3)

An application for leave to issue a writ of execution may be made ex parte by a notice of application in Form 88.

Such an application shall be supported by an affidavit-

identifying the judgment or order to which the application relates and, if the judgment or order is for the payment of money, stating the amount originally due thereunder and the amount due thereunder at the date of the application;

stating, where the case falls within rule 2(1)(a), the reasons for the delay in enforcing the judgment or order;

stating, where the case falls within rule 2(1)(b), the change which has taken place in the parties entitled or liable to execution since the date of the judgment or order;

stating, where the case falls within rule 2(1)(c) or (d), that a demand to satisfy the judgment or order was made on the person liable to satisfy it and that he has refused or failed to do so; and

giving such other information as is necessary to satisfy the Court that the applicant is entitled to proceed to execution on the judgment or order in question and that the person against whom it is sought to issue execution is liable to execution on it.

The Court hearing such application may grant leave in accordance with the application or may order that any issue or question, a decision on which is necessary to determine the rights of the parties, be tried in any manner in which any question of fact or law arising in an action may be tried and, in either case, may impose such terms as to costs or otherwise as it thinks just. Page | 8

It is trite law that before leave is granted to execute judgment beyond 6 years it must be shown that there is sufficient reason for the delay in enforcing the said judgment. The categories are not closed and this will depend on the facts of each case. I refer to the decision of the Court of Appeal in Affin Bank v Wan Abdul Rahman bin Wan Ibrahim [2003] 2 MLJ 509 and the Federal Court in Tio Chee Hing v Chung Khiaw Bank [1981] 1 MLJ 227.

I also reproduce the judgment of the Court of Appeal in Moez Ali bin Akbarally & Anor v Public Bank Berhad [2021] 5 MLJ 169: - “[31] We found merit in the respondent’s submission that the respondent only need to show the court sufficient reasons in support of the application to explain the delay in proceedings with the execution and/or bankruptcy proceedings against the appellants. Here we must emphasise that so long as the applicant for leave provide some plausible reasons in support for leave to execute after a lapse of six years then leave ought to be given, after all a judgment could not be defeated unless it is time barred. We must also state that laches must not apply in the process of execution of Page | 9 a judgment. What we have stated here is plain from a reading of O 46 r 2(3) of the ROC 2012 which provides that the court has the power to give fresh leave if no execution is taken after a lapse of a year after the leave is given. Here we can see that the court’s task is to ensure that there must be some reason for the delay.”

I find that the Plaintiff has shown sufficient reason for the delay in enforcing the judgment. I also find that the Plaintiff is entitled to enforce the outstanding amount claimed against the 2nd Defendant. The Plaintiff has attempted to recover the sums claimed against the Defendants but was unable to recover the full sums against the Defendants as whole even after the foreclosure proceedings and the insolvency proceedings against the Defendants.

However, I find that the Plaintiff is only entitled to continue with their claims against the 2nd Defendant, not to include the interest claimed against the Defendant. This is in accordance with section 6(3) of the Limitation Act 1953 and in accordance with the decision of the Federal Court in Perwira Affin Bank Bhd v Lim Ah Hee @ Sim Ah Hee [2004] 3

Therefore, I find that the Plaintiff is entitled to be granted leave to enforce only for the following sums:

Judgment Sum as at 11-2-2016 = RM 4, 283, 777.98

(ii) Costs of = RM 3000.00

(iii) Minus receipt of the Foreclosure sum = RM 2, 808,000.00

(iv) Total leave for execution granted = RM 1, 478, 777.98

I agree with the 2nd Defendant that the interest claimed is beyond the time frame provided by law. However, the sum above is claimable against the 2nd Defendant as it is still within the time frame provided.

As to whether the Plaintiff is entitled to Petition for the bankruptcy of the 2nd Defendant, I opine that this issue is best left before the Bankruptcy Courts.

It is up to the Plaintiff to now enforce the judgment of the Court for the amounts stated above. The 2nd Defendant has not yet paid the sums Page | 11 in full to the Plaintiff and the said sums are still due to the Plaintiff. I opine that Section 5(4) of the Insolvency Act 1967 is an issue that should be addressed before the Bankruptcy Court.

I also opine that the Plaintiff has taken all reasonable steps and provided sufficient explanation as to why leave to proceed beyond the 6- year period should be allowed. The 1st and 3rd Defendants have since been wound up, and the 2nd Defendant was initially declared to be bankrupt by two court orders. These 2 orders have since been annulled under section 105 of the Insolvency Act. There is no evidence produced by the 2nd Defendant to show that the debts owed by him to the Plaintiff have been settled in accordance with section 105(4) of the Insolvency Act and as such the Plaintiff is entitled to enforce the judgment against the 2nd Defendant.

There is also no evidence produced by the 2nd Defendant that the Court in the Bankruptcy proceedings accepted that the debt owed by the 2nd Defendant to the Plaintiff was paid in full. Instead, the annulment of the orders was made in relation to the debt owed to Maybank Islamic Berhad and to OTM Group Sdn Bhd.

It is trite law that an annulment under section 105 of the Insolvency Act acts as if there was never a bankruptcy order entered against the 2nd Defendant. This is unlike a discharge under section 35 of the Insolvency Act which releases the 2nd Defendant from all of its debts that have been dealt with as part of the bankruptcy proceedings. Therefore, the Plaintiff is entitled to enforce the Judgment in the circumstances of this case. After all, the said order was recently annulled in 2021.

The 2nd Defendant also claims that the claim here for leave to institute enforcement proceedings exceed the amount that was securitized by the guarantee provided by him. As shown earlier, this Court finds that the Plaintiff is only entitled to enforce the judgment debt to the sum of RM 1, 478, 777.98 and this is within the amount guaranteed by him. Therefore, this issue does not prevent the Plaintiff from obtaining leave to enforce the judgment debt against the 2nd Defendant.

I also do not find that the 2nd Defendant will be unfairly prejudiced by the decision of this Court to grant leave to allow the Plaintiff to continue to enforce the judgment. This is not a case of a successful but inactive Page | 13 litigant as laid down by Suriyadi J in MBT (M) Sdn Bhd v Syarikat Perniagaan Mesra Sdn Bhd [2004] CLJU 25. The Plaintiff has shown that it has reasons why it did not enforce the judgment within the 6-year period as provided by law and has shown that there remains the sum of RM 1, 478, 777.98 due and payable by the 2nd Defendant to the Plaintiff.

The 2nd Defendant also complaints that no action was taken by the Plaintiff against the First and 3rd Defendants. However, as these entities have been wound up by third parties, I see no reason why the Plaintiff could not pursue the remaining judgment sum of RM 1, 478, 777.98 to be enforced against the 2nd Defendant.

For the above reasons, I grant leave to the Plaintiff in accordance with the orders sought in Enclosure 16. No order as to costs. Dated 3rd June 2025 Dato’ Indera Mohd Arief Emran bin Arifin Judge High Court of Malaya at Kuala Lumpur NCC5 Page | 14 Counsel: Hapizi bin Hashim for the Plainttiff Sidek Teoh Wong & Dennis Advocates & Solicitors Lai Chee Meng for the 2nd Defendant