AntaraDato’ Dr Pang Chow Huat(No. Kp: 731218-01-5205) … PerayuDanRhb Islamic Bank Berhad(No. Syarikat: 680329 – M) … DefendantDalam Mahkamah Sesyen Di Kuala LumpurGuaman No: B52m – 439 – 05/2014AntaraRhb Islamic Bank Berhad(No. Syarikat: 680329 – M ) … PlaintifDanDato’ Dr Pang Chow Huat(No. Kp: 731218-01-5205) … Defendan

  

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DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR GUAMAN NO: 12AM – 3 – 01/2015

 

ANTARA

 

DATO’ DR PANG CHOW HUAT

 

(No. KP: 731218-01-5205) … PERAYU

 

DAN

 

RHB ISLAMIC BANK BERHAD

 

(No. Syarikat: 680329 – M) … DEFENDANT

 

DALAM MAHKAMAH SESYEN DI KUALA LUMPUR GUAMAN NO: B52M – 439 – 05/2014

 

ANTARA

 

RHB ISLAMIC BANK BERHAD

 

(No. Syarikat: 680329 – M ) … PLAINTIF

 

DAN

 

DATO’ DR PANG CHOW HUAT

 

(No. KP: 731218-01 -5205) … DEFENDAN

 

Grounds of Decision

 

Azizah Nawawi, J:

 

Introduction

 

[1] Enclosure (1) is a Notice of Appeal dated 14 May 2015 filed by the Defendant/Appellant (“the Defendant”) against the decision of the Learned Sessions Court Judge in allowing the

 

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Plaintiff/Respondent’s (“the Plaintiff”) application for Summary Judgment pursuant to Order 14 of the Rules of Court 2012.

 

[2] After hearing the Defendant’s appeal, the same is dismissed with costs.

 

The Salient Facts

 

[3] The Plaintiff’s claim against the Defendant is for the sum of RM879,766.75 as at 20 February 2014 with interest of 1% per annum from 21 February 2014 which was due and owing by the Defendant due to failure of the Defendant in performing his obligations under the Settlement Agreement and the Options Agreement (hereinafter referred to as “the Settlement Agreements”) executed between the Plaintiff and the Defendant.

 

[4] By letter of offer dated 07.27.2009, the Plaintiff has offered a Commodity Murabahah Facility Agreement dated 07.09.2016 and Multi Trade Lines Facility, dated 07.09.2009, whereby the Plaintiff has agreed to provide two (2) loan facilities known as theMulti-Trade Lines Facility of RM2,250,000.00 and a Commodity Murabahah Overdraft-I Facility of RM250,000.00 (‘the Facility Agreements’) to the Asia Pinnacle Sdn Bhd (‘the Customer’). The customer had agreed to accept the said facilities subject to the terms and conditions contained in the said letter of offer and the said facility agreements. The customer had utilised the said facilities.

 

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[5] However, the customer had defaulted in its payment obligations under the facility agreements. As at 31.12. 2011, the total sum due and owing under the Facility Agreements is RM2,691,580.30.

 

[6] In order to “write off” part of the Customer’s debt to the Plaintiff, the Defendant, in his own personal capacity has entered into the Settlement Agreement dated 2.7.2012 and the Options Agreement 2.7.2012, with the view of settling the outstanding amount due by the Customer.

 

[7] By way of the Settlement Agreement, parties had agreed to:

 

(i) enter into the Options Agreement at such terms and conditions that may be determined by the Plaintiff;

 

(ii) place a sum of RM1,291,433.04 with the Plaintiff as fixed deposit in the form of Mudharabah General Investment Account (“the MGIA”) which will be pledged to the Plaintiff within forty five (45) days after securing all the approvals in the Proposed Schemes of Arrangement; and

 

(iii) pay a further sum of RM200,000.00 to the Plaintiff over a period of 20 months.

 

[8] Under the terms of the Option Agreement, the parties have agreed to a proposed debt restructuring scheme in respect of the indebtedness of the Customer, which is due and payable to

 

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the Plaintiff. The terms of the Options Agreement as agreed by the parties are as follows:

 

(i) that 8,609,554 shares (“the Sanichi Shares”) in Sanichi Technology Berhad will be issued to the Plaintiff;

 

(ii) that the Defendant is to purchase the Sanichi shares at the option price at RM0.15 per share from the Plaintiff upon the request of the Plaintiff after the issuance of the Put Option notice;

 

(iii) upon the settlement of the purchase price of the Sanichi shares, the Plaintiff will transfer the ownership of the said shares to the Defendant.

 

[9] However, the Defendant has failed to deposit the fixed deposit in the form of MGIA and had subsequently failed to pay the monthly instalment in accordance to the terms of the Agreements. Despite numerous reminders and extension of time given, the Defendant has failed to deposit the required MGIA with the Plaintiff. The Plaintiff has also issued its Put Option notice dated 20.3.2013 to the Defendant to purchase the said shares from the Plaintiff at the price of RM1,291,433.04. However, the Defendant has failed to complete the purchase by making the necessary payment, despite the extension of time given.

 

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[10] Due to default under the Settlement Agreement, the Plaintiff’s solicitor had sent a notice dated 22 July 2013 to notify the Defendant of his default and consequently demanded the Defendant to pay to the Plaintiff the sum of RM200,000.00 with compensation at the rate of 1% per annum. The Plaintiff has also notified the Defendant that since the Defendant had failed to purchase the said shares from the Plaintiff pursuant to the Put Option Notice dated 20.3.2013 issued by the Plaintiff, the Plaintiff shall within 3 days from the date thereof, proceed to dispose and sell the said shares in open market at whatever price and at any given time and date which the Plaintiff deems reasonable and acceptable without any prior notice to the Defendant.

 

[11] Consequently, the Plaintiff issued a letter to the Defendant, demanding for the shortfall between the actual disposal price and Put Price to be recovered from the Defendant, in the sum of RM879,766.75. When the Defendant failed to make payment, this action was instituted against the Defendant.

 

Findings of the Court

 

[12] Before the Session Court, the Defendant did not file any affidavit to oppose the Plaintiff’s application for summary judgment. Therefore, pursuant to the case of Ng Hee Thoong & Anor v Public Bank Behad [1995] 1 CLJ 609, the failure of the Defendant to contradict the facts as deposed in the Plaintiff’s Affidavit in Support is usually treated as an admission by the Defendant of the facts so asserted. As such, there is no dispute with regards to the facts as presented by the Plaintiff.

 

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[13] However, the Defendant has relied on his pleaded case in his Statement of Defence dated 25.6.2014 to raise triable issues. The only ground relied by the Defendant in this appeal is in respect of the disposal of the Sanichi shares.

 

[14] The first issue raised by the Defendant is that under the Settlement Agreement and the Option Agreement, the Plaintiff cannot sell the 8,609,554 Sanichi Shares.

 

[15] However, having considered the Defendant’s pleaded case, in paragraphs 5, 10 and 11 of the Statement of Defence, the Defendant has pleaded that the Plaintiff has failed to sell the shares at RM0.15 cents, which the Defendant claimed to be the agreed value, reserve price or the accepted price. This is consistent with the written submission filed before the Session Court and in this Court. There is nothing in the Statement of Defence to plead that under the Settlement Agreement and the Option Agreement, the Plaintiff cannot sell the 8,609,554 Sanichi Shares.

 

[16] The Defendant submitted further and relied on paragraph (12) of the Statement of Defence that the Plaintiff cannot sell the 8,609,554 Sanichi Shares. Clause 12 reads:

 

“Defendan menyatakan bahawa jelas dengan wujudnya Perjanjian Penyelesaian tersebut, kesemua hak jamainan terhadap Defendan telah dilupuskan mengikut Seksyen 86 Akta Kontrak 1950 dan secara alternative, peluang Defendant telah dirampas sekiranya Perjanjian

 

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Penyelesaian mengikatnya di mana ianya dinafikan di atas sebab-sebab di atas. Defendan juga bergantung kepada “the laws on set – off ke atas kesemua jumlah tersebut.”

 

[17] However, there is nothing in paragraph (12) above that pleads the Defendant’s case that the Plaintiff cannot sell the 8,609,554 Sanichi Shares. Therefore, I am of the considered opinion that the Defendant’s contention now that the Plaintiff cannot sell the share under both the Settlement Agreement and the Option Agreement, is an afterthought and not a pleaded issue for this Court to consider.

 

[18] The only pleaded issue then is whether the Settlement Agreements mandated that the shares can only be sold at RM0.15 cents as contended by the Defendant. This can be implied collectively from paragraphs (5), (10) and (11) of the Statement of Defence.

 

[19] On this issue, I agree with the Plaintiff that the price at RM0.15 cents is the price the Defendant has to pay if the Defendant is to exercise his option to buy the shares. This can be seen from the Options Agreement itself:

 

“1. Definition and Interpretation

 

‘Option Price’ means Sen Fifteen (RM0.15) per ordinary share payable by the Grantor (‘Defendant’) to the

 

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Grantee (‘Plaintiff/Bank’) for the Shares under the Put Option or Call Option, as the case may be;

 

‘Call Option’ the irrevocable and unconditional option agreed to be granted by the Grantee to the Grantor whereby the Grantor may call upon the Grantee to sell the shares or such part thereof to the Grantor subject to the terms and conditions;

 

‘Put Option’ the irrevocable and unconditional option agreed to be granted by the Grantor to the Grantee to require the Grantor to purchase from the Grantee the Shares subject to the terms and conditions;”

 

[20] Therefore the Option Price of RM0.15 cents per ordinary share is only applicable when there is a ‘Call Option’ or ‘Put Option’. In the present case, the Defendant did not invoke the Call Option, but the Plaintiff Bank has exercised the Put Option and gave notice to the Defendant vide the Put Option Notice dated 20.3.2013.

 

[21] I am therefore of the considered opinion that the Option Price does not bind the Plaintiff if it has to upload the shares into the open market. It is not a disputed fact that the Plaintiff can only secure the best price for the share, at about RM0.078 cent per share in the open market.

 

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[22] In the premise, I find that the learned Session Court Judge did not make any error in her decision, and the Defendant’s appeal is dismissed with costs.

 

(AZIZAH BTE HAJI NAWAWI) JUDGE

 

HIGH COURT MALAYA (Commercial Division) KUALA LUMPUR

 

Dated: 21 June 2016

 

For the Appellant : Ravi G and Sana bt Tufil Ahmad

 

Messrs Ravi G Johor Bahru.

 

For the Plaintiff : Navamalar a/p Ganesan

 

Messrs Anad & Noraini Kuala Lumpur.

 

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