Barisan Tenaga Perancang (M)Sdn Bhd (Company No: 260082-K) … PlaintiffAnd1. Dr Mansur Bin Hussain(Nric No: 530603-02-5345)2. Siti Ruhani Binti Abdul Samad(Nric No: 520525-05-5346)3. Nor Hashim & Associates (Sued As A Firm)4. Shaik Mohamed & Co (Sued As A Firm) … Defendants(By First Counterclaim)BetweenShaik Mohamed & Co … PlaintiffAndBarisan Tenaga Perancang (M)Sdn Bhd (Company No: 260082-K) … Defendant(By Second Cou

  

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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION)

 

CIVIL SUIT NO: 22NCC-366-09/2014

 

(BY ORIGINAL ACTION) BETWEEN

 

BARISAN TENAGA PERANCANG (M)

 

SDN BHD (Company No: 260082-K)

 

AND

 

1. DR MANSUR BIN HUSSAIN

 

(NRIC No: 530603-02-5345)

 

2. SITI RUHANI BINTI ABDUL SAMAD (NRIC No: 520525-05-5346)

 

3. NOR HASHIM & ASSOCIATES (sued as a firm)

 

4. SHAIK MOHAMED & CO (sued as a firm)

 

(BY FIRST COUNTERCLAIM) BETWEEN

 

SHAIK MOHAMED & CO …

 

AND

 

BARISAN TENAGA PERANCANG (M)

 

SDN BHD (Company No: 260082-K) …

 

PLAINTIFF

 

DEFENDANTS

 

PLAINTIFF

 

DEFENDANT

 

i

 

(BY SECOND COUNTERCLAIM)

 

BETWEEN

 

1. DR MANSUR BIN HUSSAIN

 

(NRIC No: 530603-02-5345)

 

2. SITI RUHANI BINTI ABDUL SAMAD (NRIC No: 520525-05-5346)

 

3. MUHAMMAD HAZIM BIN MANSUR (NRIC No: 851021-14-7139)

 

4. MASA BUILDER SDN BHD

 

(Company No: 396479-T) …

 

AND

 

1. CHAI WOON CHET

 

(NRIC No: 781224-06-5263)

 

2. CHIAM AH CHING

 

(NRIC No: 581220-02-5647)

 

3. MOKHZANI BIN JALANI (NRIC No: 890705-14-5283)

 

4. KAMARUDIN BIN MOHAMED (NRIC No: 570129-03-5641)

 

5. BARISAN TENAGA PERANCANG (M) SDN BHD

 

(Company No: 260082-K) …

 

PLAINTIFFS

 

DEFENDANTS

 

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JUDGMENT

 

(after trial)

 

A. Introduction

 

1. This is a case regarding the Selayang Springs Development Project (Project), a mixed development project developed by Barisan Tenaga Perancang (M) Sdn. Bhd. (BTP). Dr. Mansur bin Hussain (Dr. Mansur) is the owner and controller of BTP. BTP faced financial problems in completing the Project and hence, the Project was abandoned. To revive the Project, Dr. Mansur alleged that he had borrowed RM6 million from an “Ah Long” (an unlicensed moneylender) named Datuk Chai Woon Chet (Datuk Chai). Datuk Chai however claimed to have purchased shares in BTP through Datuk Chai’s nominees. Therein lies the main factual issue in this case.

 

B. Legal proceedings

 

B(1). Original Action

 

2. In the Original Action –

 

(1) BTP is the plaintiff;

 

(2) Dr. Mansur is the first defendant while his wife, Puan Siti Ruhani bt. Abdul Samad (Puan Siti), is the second defendant; and

 

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(3) Messrs “Nor Hashim & Associates” (Messrs NH), a law firm, is the third defendant. Another law firm, Messrs Shaik Mohamed & Co (Messrs SM) is the fourth defendant.

 

3. On 5.5.2015, BTP and Messrs NH entered into a consent order wherein

 

(1) as Messrs NH was appointed by Dr. Mansur who was not a director of BTP at the material time, Messrs NH acknowledged that Messrs NH had no authority to act on behalf of BTP;

 

(2) all correspondence and all documents issued by Messrs NH on behalf of BTP had been issued without BTP’s authority; and

 

(3) Messrs NH undertakes that Messrs NH would not act for BTP without BTP’s authority

 

(Consent Order dated 5.5.2015). The Consent Order dated 5.5.2015 thus concluded the Original Action against Messrs NH.

 

4. In the Original Action, BTP prayed for the following relief, among others, against Dr. Mansur and Puan Siti:

 

(1) a declaration that Dr. Mansur and Puan Siti are not entitled to hold themselves out as directors of BTP;

 

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(2) an injunction to restrain Dr. Mansur and Puan Siti from holding themselves out as BTP’s directors;

 

(3) an injunction to restrain Dr. Mansur and Puan Siti from interfering in any way with BTP’s business;

 

(4) an injunction to restrain Dr. Mansur and Puan Siti from entering any part of the BTP’s land (BTP’s Land) upon which the Project was developed;

 

(5) an injunction to restrain Dr. Mansur and Puan Siti from hindering or preventing BTP or any person engaged or employed by BTP from entering BTP’s land;

 

(6) general damages for trespass to BTP’s Land to be assessed by this court and to be paid jointly and/or severally by Dr. Mansur and Puan Siti to BTP;

 

(7) general damages for misrepresentation to be assessed by this court and to be paid jointly and/or severally by Dr. Mansur and Puan Siti to BTP; and

 

(8) costs of the Original Action.

 

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5. On 2.3.2015, BTP, Dr. Mansur and Puan Siti entered into a consent interlocutory injunction (Consent Interlocutory Injunction dated 2.3.2015) whereby pending the disposal of the Original Suit and BTP’s undertaking to pay damages (if this court is of the view that the Consent Interlocutory Injunction dated 2.3.2015 ought not to have been granted), among others –

 

(1) an interlocutory injunction was granted to restrain Dr. Mansur and Puan Siti from holding themselves out as BTP’s directors;

 

(2) an interlocutory injunction was granted to restrain Dr. Mansur and Puan Siti from interfering in any way with BTP’s business;

 

(3) an interlocutory injunction was granted to restrain Dr. Mansur and Puan Siti from entering any part of the BTP’s Land; and

 

(4) an interlocutory injunction to restrain Dr. Mansur and Puan Siti from hindering BTP or any person engaged or employed by BTP from entering BTP’s land.

 

B(2). First Counterclaim

 

6. In the Original Action, the first counterclaim was brought by Messrs SM against BTP (1st Counterclaim).

 

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7. On 14.1.2016, BTP and Messrs SM entered into a consent order (Consent Order dated 14.1.2016) where BTP and Messrs SM had settled their dispute by way of a settlement agreement dated 14.1.2016 (attached to the Consent Order dated 14.1.2016). Accordingly, as between BTP and Messrs SM, both the Original Action and the 1st Counterclaim had been amicably settled by the Consent Order dated 14.1.2016.

 

B(3). Second Counterclaim

 

8. In the Original Action, the second counterclaim (2nd Counterclaim) involves the following parties:

 

(1) the plaintiffs are –

 

(a) Dr. Mansur;

 

(b) Puan Siti;

 

(c) Dr. Mansur’s son, Encik Muhammad Hazim bin Mansur (Encik Hazim); and

 

(d) MASA Builder Sdn. Bhd. (MBSB). The only directors and shareholders of MBSB are Dr. Mansur and Puan Siti; and

 

(2) the defendants are –

 

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(a) Datuk Chai;

 

(b) Mr. Chiam Ah Ching (Mr. Chiam);

 

(c) Encik Mokhzani bin Jalani (Encik Mokhzani);

 

(d) Encik Kamarudin bin Mohamed (Encik Kamarudin); and

 

(e) BTP.

 

9. The following relief, among others, had been prayed for in the 2nd Counterclaim:

 

(1) a declaration that the removal of Dr. Mansur and Puan Siti as BTP’s directors pursuant to the Share Sale Agreement dated 8.10.2012 between MBSB and Mr. Chiam (1st SSA), is null, void and unenforceable;

 

(2) a declaration that the appointment of Mr. Chiam, Encik Mokhzani and Encik Kamarudin as BTP’s directors to replace Dr. Mansur and Puan Siti, is null, void and unenforceable;

 

(3) a declaration that the Option Agreement dated 8.10.2012 between Mr. Chiam and Encik Hazim (OA), is null and void and any interest

 

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and/or fee received by Datuk Chai and Mr. Chiam be refunded in full to Encik Hazim;

 

(4) a declaration that the 1st SSA is null and void;

 

(5) a declaration that any share of BTP that was transferred pursuant to the 1st SSA and/or any subsequent transfer thereto, is null and void;

 

(6) damages for the “abuse and threats” caused by Datuk Chai and Mr. Chiam which had caused “undue pain and suffering” to Dr. Mansur and Puan Siti; and

 

(7) costs.

 

C. Issues

 

10. The following questions, among others, arise in this case:

 

(1) whether the 1st SSA and OA constituted an illegal moneylending transaction between Datuk Chai and Dr. Mansur which was contrary to ss 5(1) and 15 of the Moneylenders Act 1951 (MA);

 

(2) whether Dr. Mansur had caused BTP to breach s 7A(3) of the Housing Development (Control and Licensing) Act 1966 (HDCLA) when BTP failed to credit sums of money paid by purchasers of

 

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condominiums in the Project (Purchasers), into BTP’s “Housing Development Account’ (HDA);

 

(3) whether Dr. Mansur had caused BTP to contravene s 67(1) Companies Act 1965 (CA); and

 

(4) whether Dr. Mansur and Puan Siti had validly resigned as directors of BTP and could not therefore –

 

(a) hold themselves out as BTP’s directors;

 

(b) interfere in BTP’s business;

 

(c) enter any part of BTP’s Land; and

 

(d) hinder or prevent BTP any person engaged or employed by BTP from entering into BTP’s Land.

 

D. Dr. Mansur’s case

 

11. The following evidence, among others, had been adduced in support of Dr. Mansur’s case:

 

(1) Dr. Mansur has an impressive background. Dr. Mansur obtained his Bachelor of Science degree (BSc) from University

 

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College, London in 1976, majoring in Civil Engineering. Dr. Mansur then obtained his Masters of Science degree (MSc) in Concrete Structure in Imperial College, London in 1979. Dr. Mansur completed his doctorate (PhD) in Construction Planning in Carnegie Mellon University, Pittsburg, United States of America. In 1981, Dr. Mansur was accredited by the Institution of Engineers Malaysia with a MIEM (Member of Institution of Engineers Malaysia) and by the Board of Engineers Malaysia as a Professional Engineer;

 

(2) Dr. Mansur joined Jabatan Kerja Raya (JKR) after completing

 

his BSc in 1976. In 1978, Dr. Mansur pursued his MSc on a Public Service Department’s (JPA) scholarship. After

 

completing MSc, Dr. Mansur was transferred to JKR Kelantan. In 1982, Dr. Mansur was transferred back to JKR Headquarters to head the Computer Centre. In 1989, Dr. Mansur went to do his PhD, also on a JPA scholarship;

 

(3) Dr. Mansur was seconded to KLIA Bhd. as a General Manager (Planning). In 1995, Dr. Mansur left JKR and joined Puncak Niaga Bhd. (PNB) as a Project Controller. In PNB, Dr. Mansur was responsible for the construction of Sungai Selangor Water Treatment Plant. Dr. Mansur was then appointed as Managing Director (MD) of a subsidiary of PNB, Seni Kembara Construction Sdn. Bhd. (SKC). SKC is a Class A contractor. In 1999, Dr. Mansur left SKC to set up MBSB (a Class A

 

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contractor) and MASA PMC Sdn. Bhd. (a company to do project management consultancy);

 

(4) in 2006, Dr. Mansur acquired BTP to carry out the Project on BTP’s Land. MBSB owned all the shares in BTP. Dr. Mansur and Puan Siti were the directors of BTP and MBSB. Dr. Mansur and Puan Siti also owned all the shares in MBSB with Dr. Mansur owning the majority of shares in MBSB. Puan Siti Hadijah bt. Ismail (Puan Hadijah) was the company secretary of BTP and MBSB;

 

(5) under the Project, BTP would develop 4 twenty-storey blocks of condominium, 1 block of service apartment and commercial units. The total Gross Development Value of the Project was RM783,697,078.00;

 

(6) in 2008, BTP obtained approvals for the Project from the relevant authorities. BTP started with “Damar Block” of condominiums. Sales for Damar Block condominiums were launched in October 2008. The first sale and purchase agreement (SPA) of Damar Block condominium was executed in February 2009. Condominiums in Damar Block were sold out by 2011;

 

(7) the purchase of BTP’s Land was financed by Dr. Mansur’s own funds as well as funds from a bridging loan facility and term

 

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loan facility totaling RM60 million from Bank Rakyat (Bank Rakyat’s Facilities). The guarantors for Bank Rakyat Facilities were Dr. Mansur, Puan Siti and MBSB;

 

(8) the first main contractor for the Project was Kenobuild Sdn. Bhd. (KSB). KSB had financial difficulties and was wound up in 2011. KSB’s financial difficulties delayed the Project;

 

(9) in 2011, MBSB replaced KSB as the Project’s main contractor. MBSB continued with the construction of the Project up to June 2013 when –

 

(a) MBSB completed 75% of Damar Block; and

 

(b) MBSB commenced construction of another block of condominiums of the Project, “Cedar Block’;

 

(10) Bank Rakyat gave a bank guarantee facility of RM53 million to BTP (BG Facility) to finance the construction of Cedar Block. BTP appointed Econwin Sdn. Bhd. (ESB) as the main contractor for Cedar Block. ESB started with preliminary work but subsequently withdrew from the Project because ESB could not obtain full financing. At the time of ESB’s withdrawal, BTP has sold about 50% of Cedar Block. ESB’s withdrawal had –

 

(a) further delayed the Project; and

 

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(b) placed a financial strain on BTP because BTP could not receive progress payments from Purchasers of Cedar Block;

 

(11) by way of a letter dated 27.3.2013, BTP appointed a Korean contractor, Hangun Construction Co. Ltd. (HCCL) to complete Damar and Cedar Blocks;

 

(12) BTP had a total of 9 consultants and 30 contractors. Most of BTP’s consultants and contractors were chasing BTP for payment for work done. BTP owed, among others –

 

(a) RM760,177.21 to one Mr. Tan (Mr. Tan) from LCL M&E Engineering Sdn. Bhd.(LCLSB); and

 

(b) RM270,501.58 to one Mr. Yang from KKM Trading (Mr. Yang);

 

(13) Mr. Tan and Mr. Yang wanted payment of debts owed by BTP to them. Dr. Mansur shared BTP’s financial problems with Mr. Tan and Mr. Yang. In September 2012, both Mr. Tan and Mr. Yang introduced Dr. Mansur to an “Ah Long”, Datuk Chai;

 

(14) in September 2012, BTP owed a substantial sum of liquidated and ascertained damages (LAD) to Purchasers of Damar Block

 

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condominiums. This was because Damar Block condominiums were supposed to be completed in January 2012. Dr. Mansur had calculated that with the BG Facility and progress payments from Purchasers of condominiums in Damar and Cedar Blocks, BTP only needed RM6 million. As such, Dr. Mansur had decided to borrow RM6 million from Datuk Chai;

 

(15) on 26.9.2012, Dr. Mansur met Datuk Chai in Datuk Chai’s office. There were numerous discussions and negotiations between Dr. Mansur and Datuk Chai. Datuk Chai agreed to give a short term loan of RM6 million to Dr. Mansur on the following terms –

 

(a) 8% interest per month on the principal loan sum of RM6 million would be charged. Dr. Mansur had to pay RM489,000.00 on a monthly basis;

 

(b) the loan was for a duration of 6 months; and

 

(c) BTP should first pay the outstanding debt due to LCLSB and Mr. Yang;

 

(16) Datuk Chai wanted the loan transaction be “couched” as a sale of shares in BTP. Dr. Mansur however wanted a loan agreement. Datuk Chai “convinced’ Dr. Mansur that Datuk Chai would have a separate agreement to give Dr. Mansur an option

 

15

 

to re-purchase shares in BTP upon Dr. Mansur’s payment of the principal loan sum and interest in 6 months. Dr. Mansur had “no choice” but to accept Datuk Chai’s proposal. This was because BTP’s delivery of Damar Block condominiums had been delayed and there was a need to ensure that Damar Block be completed as soon as possible to retain customer confidence. Furthermore, there were 3 other phases of the Project to be launched and BTP needed market confidence in the Project to ensure sales. Lastly, BTP had an obligation to pay BTP’s contractors and consultants;

 

(17) Mr. Chiam is a “proxy’ of Datuk Chai. The loan transaction was in the form of the 1st SSA wherein MBSB sold all its shares in BTP to Mr. Chiam for RM6 million. Dr. Mansur signed the 1st SSA on behalf of MBSB and his signature was witnessed by a practising Advocate and Solicitor (A&S), Encik Shaik Mohamed bin Mohd. Sahed (Encik Shaik). Mr. Chiam’s signature was witnessed by another practising A&S, Mr. Wong Choong Wai (Mr. Wong);

 

(18) pursuant to the 1st SSA, Dr. Mansur forwarded the following documents –

 

(a) the original share certificates of BTP’s shares;

 

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(b) duly executed undated instruments of transfer of BTP’s shares;

 

(c) duly executed undated letters of resignation of BTP’s directors by Dr. Mansur and Puan Siti;

 

(d) duly executed undated letter of resignation of BTP’s company secretary, Puan Hadijah;

 

(e) duly executed undated resolutions of BTP’s board of directors (BOD) appointing additional directors of BTP; and

 

(f) certified resolutions of MBSB’s BOD and shareholders which gave approval to MBSB to sell MBSB’s shares in BTP to Mr. Chiam.

 

All the above documents had been forwarded by Puan Hadijah to Messrs SM;

 

(19) the OA was signed by Mr. Chiam as witnessed by Mr. Wong. The OA was actually an agreement for Dr. Mansur to pay interest to Datuk Chai. Dr. Mansur was informed by Mr. Wong that if Dr. Mansur could repay in full the principal loan sum of RM6 million and interest of RM2.934 million, BTP’s shares would be re-transferred to the person named in the OA. Dr. Mansur wanted his name to be inserted in the OA but Mr. Wong

 

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told Dr. Mansur that to maintain a semblance of legality in the transaction, it was best to name a third party in the OA. As such, Dr. Mansur named his son, Encik Hazim, in the OA;

 

(20) Dr. Mansur claimed that MBSB only received RM5,457,560.00 when one Mr. How Choon Hock (Mr. How) banked in such a sum of money into MBSB’s bank account. MBSB did not get RM6 million because Datuk Chai said the sum of RM489,000.00 was deducted as the first payment for interest and RM53,440.00 was to pay the legal fees (Legal Fees) of Datuk Chai’s solicitors, Messrs Azri, Lee Swee Seng & Co. (Messrs ALSS). Dr. Mansur did not agree to these 2 deductions of more than RM1^ million. In fact, clause 12.8(b) of the 1st SSA [Clause 12.8(b)] provided that each party should bear its own legal costs in respect of the preparation and execution of the 1st SSA;

 

(21) BTP used the sum of RM5,457,560.00 as follows –

 

(a) BTP paid its debts due to contractors, including LCLSB and Mr. Yang. Dr. Mansur subsequently found out that Datuk Chai is the chairman of LCLSB; and

 

(b) to start piling works for Cedar Block;

 

(22) Dr. Mansur made the following payments to Mr. Chiam –

 

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(a) RM489,000 by way of a MBSB’s cheque dated 3.12.2012. This MBSB’s cheque was passed to Messrs SM;

 

(b) RM111,000.00 was paid in cash on 11.1.2013 to Datuk Eddy’s agent, Mr. Simon Ho (Mr. Ho), through Messrs ALSS. Mr. Ho is Datuk Chai’s debt collector according to Mr. Chiam’s short messaging service (SMS) dated 8.2.2013 to Dr. Mansur;

 

(c) RM489,000 by way of a cheque dated 11.1.2013 from Arsira Sdn. Bhd. (ASB). ASB’s cheque was passed to Messrs SM;

 

(d) RM489,000 by way of a cheque dated 8.2.2013 from Fetran Technology Sdn. Bhd. (FTSB). FTSB’s cheque was passed to Messrs SM;

 

(e) RM400,000.00 was paid in cash to Mr. Ho on 8.3.2013; and

 

(f) RM89,000.00 was paid in cash to Mr. Ho on 11.3.2013 (Dr. Mansur’s 6 Payments);

 

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(23) Dr. Mansur could not make further payments to Datuk Chai. As such, Dr. Mansur called Datuk Chai. Dr. Mansur referred to SMS’s from Datuk Chai and Mr. Chiam which, among others, demanded for payment of the principal loan sum and interest;

 

(24) on 12.4.2013, Dr. Mansur received a telephone call which threatened to harm Dr. Mansur and his family. Consequently, Dr. Mansur made Taman Tun Dr. Ismail police report no. 1244/13 dated 18.4.2013 (Dr. Mansur’s 1st Police Report);

 

(25) Dr. Mansur also received hand written notes demanding for payment of the principal loan sum and interest. Dr. Mansur had reason to suspect that Datuk Chai’s “people” sent those notes because in April 2013, Datuk Eddy was the only person “harassing” him to pay the principal loan sum and interest. Dr. Mansur lodged Kelana Jaya police report no. 4469/13 dated 19.4.2013 (Dr. Mansur’s 2nd Police Report) to protect himself, his family, his company and assets;

 

(26) at about 3.30 pm, 24.4.2013, Datuk Chai with 2 persons “barged” into Dr. Mansur’s office. Puan Hadijah informed Dr. Mansur that Datuk Chai wanted Puan Hadijah to give Datuk Chai a “professional clearance letter’ immediately. According to Puan Hadijah, Datuk Chai with 2 persons appeared “threatening and forceful”. Fearing for her safety, Puan Hadijah had no choice but gave the letter. In respect of this incident –

 

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(a) Dr. Mansur lodged Damansara police report no. 6390/13 dated 19.4.2013 (Dr. Mansur’s 3rd Police Report); and

 

(b) Puan Hadijah made Damansara police report no. 6391/13 dated 19.4.2013 (Puan Hadijah’s Police Report);

 

(27) during the night on 24.4.2013, Dr. Mansur met Datuk Chai at Datuk Chai’s office to discuss the settlement of the principal sum and interest (Meeting on 24.4.2013). At this meeting, Datuk Chai came up with the following terms, among others –

 

(a) late payment interest of RM50,000.00 would be imposed on 30.4.2013;

 

(b) if Dr. Mansur could settle the principal loan sum and interest by 30.5.2013, the settlement sum would be RM7.3 million. If otherwise, late payment interest of RM150,000.00 would be imposed;

 

(c) if Dr. Mansur could settle by 30.7.2013, the settlement sum would be RM7.3 million. If otherwise, late payment interest of RM300,000.00 would be imposed;

 

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(d) if Dr. Mansur could settle by 30.8.2013, the settlement sum would be RM7.7 million. This would be the final extension; and

 

(e) Dr. Mansur to withdraw Dr. Mansur’s 3rd Police Report (Datuk Chai’s Proposal dated 24.4.2013);

 

(28) Dr. Mansur withdrew Dr. Mansur’s 3rd Police Report by way of Damansara police report no. 6419/2013 dated 25.4.2013 (Dr. Mansur’s 4th Police Report). Dr. Mansur claimed that he was forced to withdraw Dr. Mansur’s 3rd Police Report because it was a condition for Datuk Chai’s Proposal dated 24.4.2013;

 

(29) on 29.4.2013, Dr. Mansur was given by Datuk Chai a draft agreement in respect of Datuk Chai’s Proposal dated 24.4.2013. Dr. Mansur was advised by Encik Shaik not to sign this agreement;

 

(30) Datuk Chai had been appointed as BTP’s director on 8.10.2012. When Dr. Mansur refused to sign the agreement proposed by Datuk Chai, Datuk Chai had used the undated resolution of BTP’s BOD to appoint one Mr. Chong Chung Soon (Mr. Chong) as a director of BTP on 24.4.2013. Then Datuk Chai and Mr. Chong used the undated letters of resignation of BTP’s directors by Dr. Mansur and Puan Siti, to cause the

 

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resignation of Dr. Mansur and Puan Siti as BTP’s directors on 25.4.2013. The appointment of Mr. Chong as BTP’s director and the resignation of Dr. Mansur and Puan Siti as BTP’s directors, were done without the knowledge and consent of Dr. Mansur and Puan Siti. Dr. Mansur claimed that the appointment of Mr. Chong as BTP’s director and the resignation of Dr. Mansur and Puan Siti as BTP’s directors, were illegal;

 

(31) Dr. Mansur claimed that he instructed solicitors and affirmed an affidavit on behalf of BTP for the following reasons –

 

(a) the RM6 million loan from Datuk Chai was to enable MBSB to carry out the Project. Datuk Chai did not participate in BTP’s affairs. In fact, Datuk Chai and/or his “agents” had never come to BTP’s office to manage BTP’s affairs. All decisions by BTP were made by Dr. Mansur. Datuk Chai did not at any time inform Dr. Mansur that Dr. Mansur would no longer manage BTP’s affairs;

 

(b) on 31.10.2013, BTP had appointed Dr. Mansur to deal with Bank Rakyat in respect of Bank Rakyat’s Facilities. Dr. Mansur is one of the guarantors in respect of Bank Rakyat’s Facilities;

 

(c) when civil suits were filed against BTP, Dr. Mansur knew all the issues regarding the Project. Furthermore, Dr.

 

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Mansur had to protect both BTP’s interest as well as his own personal interest;

 

(d) there were discussions between Mr. KC Chai (Datuk Chai’s uncle), Mr. Lee Chan Kuen [Datuk Chai’s agent (Mr. Lee)] and Dr. Mansur for Dr. Mansur to “take back” BTP. Dr. Mansur even met Tan Sri Chai Kin Kong (Datuk Chai’s father); and

 

(e) the correspondence address of BTP at B-16-03, Menara Bata, PJ Trade Centre, No. 8, Jalan PJU 8/8A, Bandar Damasara Perdana, Petaling Jaya (Menara Bata Address) was Dr. Mansur’s office until 15.10.2014;

 

(32) Dr. Mansur stopped taking part in the management of BTP’s affairs around September 2014 when he was served with an injunction order;

 

(33) BTP stopped all work on the site of the Project on 2.6.2013 when Datuk Chai locked up the Project site. The progress of the Project up to 2.6.2013 was reflected in the architect’s certificate no. 8 dated 2.5.2013 which showed a total value of work of RM20.6 million. The progress payment for the month of April 2013 was RM2.5 million. This showed that BTP had progressively carried out work at the site until Dr. Mansur was restrained by an injunction order from entering the Project site;

 

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(34) on 2.6.2013, Dr. Mansur was informed by BTP’s project site administrator that several people claiming to be BTP’s new management, came to the Project site (Site) and –

 

(a) ordered all the project site staff, contractors (including the main contractor, HCCL) and workers to leave the Site immediately and they were not allowed to remove anything from the Site; and

 

(b) locked up the Site and placed their own security guard at the Site. At that time, BTP had its own security guards at the “show unit’ and marketing office at the Site. BTP maintained the “show unit’ until August 2014. Dr. Mansur was locked out from the Site because of non-payment of the principal loan sum of RM6 million and interest to Datuk Chai;

 

(35) since Datuk Chai and his people took over the Site in June 2013 –

 

(a) they only repaired the hoarding and set up a guard house;

 

(b) BTP’s housing developer’s license (BTP’s HD License) expired on 7.9.2013 and was only renewed on 12.2.2015. Dr. Mansur alleged that the renewal of BTP’s HD’s License

 

25

 

was an afterthought which was made after the 2nd Counterclaim had been filed against, among others, Datuk Chai; and

 

(c) the project architect had not issued any progress certificate. This showed that there was no progress in the Project for the past 20 months;

 

(36) Dr. Mansur had made several offers to settle this dispute as follows –

 

(a) by way of a letter dated 26.8.2013 from Dr. Mansur’s previous solicitors, Messrs Shafee & Co (Messrs SC) to Datuk Chai’s then solicitors, Messrs AJ Ariffin, Yeo & Harpal (Messrs AYH); and

 

(b) Dr. Mansur’s SMS to Mr. Lee.

 

Dr. Mansur’s aforesaid offers were rejected because Mr. Lee said that Dr. Mansur had to repay RM10 million;

 

(37) Datuk Chai resigned as BTP’s director on 3.5.2013. Encik Mokhzani and Encik Asriman Shah bin Othman (Encik Asriman) were appointed as BTP’s directors. BTP’s present directors are Encik Mokhzani and Encik Kamarudin. Encik

 

26

 

Mokhzani, Encik Asriman and Encik Kamarudin are Datuk Chai’s proxies; and

 

(38) Datuk Chai is a director and shareholder of KL Northgate Sdn. Bhd. (KLNSB).

 

12. Dr. Mansur gave the following evidence, among others, during his crossexamination:

 

(1) Dr. Mansur knew Encik Shaik for a long time. Messrs SM acted for Dr. Mansur, BTP and MBSB. Dr. Mansur would instruct Messrs SM for himself, BTP and MBSB. Dr. Mansur agreed with Datuk Chai’s learned counsel, Mr. David Mathew (Mr. Mathews), that at all material times, Dr. Mansur was advised by Encik Shaik. Dr. Mansur however testified that Encik Shaik was not aware of the loan arrangement between Dr. Mansur and Datuk Chai;

 

(2) MBSB is owned and controlled by Dr. Mansur and Puan Siti. MBSB bought all the shares of BTP from Tan Sri Dato’ Elyas bin Omar (Tan Sri Elyas) by way of a sale and purchase agreement dated 5.4.2006 [SPA (BTP Shares)]. Messrs SM acted for MSBS by drafting the SPA (BTP Shares). The SPA (BTP Shares) was later revised by way of a supplemental agreement dated 8.3.2007 [Supplemental SPA (BTP Shares)]. According to the Supplemental SPA (BTP Shares), the

 

27

 

purchase price of all the shares of BTP by MBSB was revised to

 

RM23,772,076.49 [Price (BTP Shares)]. During questioning by

 

BTP’s learned counsel, Ms. Fiona Bodipalar (Ms. Fiona), Dr.

 

Mansur admitted the following –

 

(a) BTP’s income tax computation (which had been prepared by BTP’s auditors) showed that BTP paid RM13,451,128.00 on behalf of MBSB in MBSB’s purchase of BTP shares from Tan Sri Elyas;

 

(b) BTP’s income tax computation stated that BTP paid RM1,500,000.00 on MBSB’s behalf as late payment interest in respect of the SPA (BTP Shares);

 

(c) BTP’s income tax computation showed that BTP paid an additional sum of RM16,748,230.00 on behalf of MBSB in respect of MBSB’s acquisition of BTP shares;

 

(d) BTP’s income tax computation stated that BTP paid a further sum of RM5,120,700.00 on MBSB’s behalf in respect of MBSB’s purchase of BTP shares; and

 

(e) Dr. Mansur was aware that under s 67(1) CA, a company shall not give financial assistance for the purpose or in connection with the purchase of the company’s own shares.

 

28

 

Dr. Mansur testified during cross-examination by Mr. Mathews that MBSB had not paid for BTP’s shares in full;

 

(3) after MBSB had purchased all the shares in BTP, Dr. Mansur agreed that he was in “complete control’ of BTP. Dr. Mansur caused the change of BTP’s registered address at 1st Floor, Wisma Mepro, No. 29 & 31, Jalan Ipoh, 51200 Kuala Lumpur to no. 1201, Block B, Pusat Dagangan Phileo Damansara 1, No. 9, Jalan 16/11, off Jalan Damansara, 46350 Kuala Lumpur (Phileo Damansara Address). BTP’s business address was also at Phileo Damansara Address. Dr. Mansur then caused BTP’s business address to be changed to Menara Bata Address;

 

(4) Dr. Mansur admitted that he had signed a letter as BTP’s MD to be issued to Dato’ Azman Ibrahim (Dato’ Azman) and backdated this letter to 9.6.2008 (BTP’s Backdated Letter To Dato’ Azman). Dr. Mansur signed BTP’s Backdated Letter To Dato’ Azman in 2012 or 2013. BTP’s Backdated Letter To Dato’ Azman stated as follows –

 

(a) as consideration for Dato’ Azman’s efforts in procuring BTP’s Land for the Project and for obtaining the necessary approvals and permits from the relevant authorities for BTP

 

29

 

to develop the Project, BTP agreed to pay RM20 million to Dato’ Azman (Alleged RM20 Million Debt); and

 

(b) the Alleged RM20 Million Debt “shall’ be paid by “equal monthly instalments” commencing 1.7.2008.

 

During questioning by Mr. Mathews, Dr. Mansur stated the

 

following –

 

(i) BTP’s Backdated Letter To Dato’ Azman seemed highly suspicious and dubious to people outside BTP;

 

(ii) Dato’ Azman had not formally demanded BTP to pay the Alleged RM20 Million Debt;

 

(iii) the Alleged RM20 Million Debt was not reflected in BTP’s records and statutory accounts. Any third party dealing with BTP, would not know of the Alleged RM20 Million Debt; and

 

(iv) BTP did not disclose the Alleged RM20 Million Debt to Bank Rakyat;

 

(5) BTP’s Backdated Letter To Dato’ Azman had been used by

 

Dato’ Azman to enter a private caveat over BTP’s Land on

 

16.4.2013 (Dato’ Azman’s Caveat). Dato’ Azman sent a letter

 

30

 

dated 1.7.2013 to BTP (Dato’ Azman’s Letter dated 1.7.2013).

 

Dato’ Azman’s Letter dated 1.7.2013 stated, among others –

 

(a) Dato’ Azman’s Caveat had been lodged because Dato’ Azman’s professional bills had not been paid by BTP; and

 

(b) Dato’ Azman’s Caveat “shall’ be removed once Dato’ Azman had received a letter from BTP to state that “the money is ready to settle the amount owed to Mr. Chiam’’.

 

Dr. Mansur gave evidence that Dr. Mansur had informed Dato’ Azman that Dr. Mansur owed money to Mr. Chiam. Dato’ Azman informed Dr. Mansur that once Dr. Mansur had a “funder’ to pay Mr. Chiam, Dato’ Azman’s Caveat would be removed;

 

(6) Dr. Mansur admitted that BTP was liable for LAD to 436 Purchasers because BTP had failed to deliver vacant possession of the condominiums within 36 months from the date of the signing of the SPA’s;

 

(7) Dr. Mansur disagreed with Ms. Fiona that Dr. Mansur had fraudulently signed a letter dated 30.9.2009 on BTP’s behalf for Bank Rakyat to disburse RM878,434.07 (part of Bank Rakyat’s Facilities) to MBSB in respect of the Project when MBSB had not been appointed as the main contractor for the Project;

 

31

 

(8) Dr. Mansur agreed with Ms. Fiona that the entire RM60 million sum in respect of Bank Rakyat’s Facilities, had been disbursed by Bank Rakyat to BTP;

 

(9) regarding HAD, Dr. Mansur was aware of BTP’s obligation under the law to open HDA and for BTP to pay into HDA all the money received by BTP under the SPA’s;

 

(10) Dr. Mansur –

 

(a) confirmed his signature as well as that of Puan Siti on a shareholders’ circular resolution of BTP dated 8.10.2012 which appointed Datuk Chai as BTP’s director;

 

(b) admitted that he had signed a letter dated 25.4.2013 to BTP’s BOD regarding his resignation as BTP’s director;

 

(c) confirmed Puan Siti’s signature on a letter dated 25.4.2013 to BTP’s BOD regarding Puan Siti’s resignation as BTP’s director; and

 

(d) confirmed Puan Hadijah’s signature on letter dated 25.4.2013 to BTP’s BOD regarding Puan Hadijah’s resignation as the company secretary of BTP;

 

32

 

(11) Dr. Mansur was aware that BTP had lodged Form 49 with

 

“Suruhanjaya Syarikat Malaysia” (SSM) regarding –

 

(a) the appointment of Datuk Chai as BTP’s director on 8.10.2012

 

(b) the resignation of Dr. Mansur and Puan Siti as BTP’s directors with effect from 25.4.2013;

 

(c) Puan Hadijah’s resignation as BTP’s company secretary with effect from 25.4.2013; and

 

(d) the appointment of a new company secretary for BTP;

 

(12) Dr. Mansur confirmed that both Puan Siti and Dr. Mansur had

 

signed a letter dated 9.5.2013 on MBSB’s behalf to BTP

 

(MBSB’s Letter dated 9.5.2013). MBSB’s Letter dated

 

9.5.2013 stated, among others –

 

(a) MBSB would instruct Puan Hadijah, BTP’s previous company secretary, to hand over all of BTP’s statutory records before 20.5.2013;

 

(b) as MBSB was BTP’s shareholder and BTP’s place of business was at Menara Bata Address, MBSB was “uncertain of the motive of removal” of BTP’s files from

 

33

 

Menara Bata Address by Mr. Lee. This was because there had not been a previous request for BTP’s files; and

 

(c) MBSB requested for BTP to provide a list of BTP’s files by 14.5.2013;

 

(13) BTP passed a directors’ circular resolution dated 31.10.2013 (BTP’s Directors Resolution dated 31.10.2013) which, among others, appointed Dr. Mansur to deal with Bank Rakyat on behalf of BTP with immediate effect in respect of Bank Rakyat’s Facilities. BTP’s Directors Resolution dated 31.10.2013 was signed by Encik Mokhzani and Encik Asriman. Despite BTP’s Directors Resolution dated 31.10.2013, Dr. Mansur was not able to settle BTP’s outstanding sum due to Bank Rakyat and Bank Rakyat filed a suit against BTP and BTP’s guarantors, including Dr. Mansur (Bank Rakyat’s Suit). Dr. Mansur admitted that Bank Rakyat’s Suit was only withdrawn after BTP’s present directors reached a conditional settlement with Bank Rakyat;

 

(14) Lifomax Woodbuild Sdn. Bhd. (LWSB) filed a suit against, among others, BTP (LWSB’s Suit). Dr. Mansur affirmed an affidavit on 28.2.2014 in LWSB’s Suit (Dr. Mansur’s Affidavit dated 28.2.2014). The first paragraph of Dr. Mansur’s Affidavit dated 28.2.2014 stated that Dr. Mansur was BTP’s MD who had been authorized by BTP to affirm Dr. Mansur’s Affidavit on

 

34

 

behalf of BTP. When questioned by Ms. Fiona, Dr. Mansur admitted that he had made a mistake and he had affirmed Dr. Mansur’s Affidavit as BTP’s shareholder. Dr. Mansur further admitted that he had appointed Messrs Lainah Yaacob (Messrs LY) to act for BTP without any authorization from BTP. Dr. Mansur agreed with Ms. Fiona that Dr. Mansur was not authorized by BTP to appoint Messrs LY and to affirm Dr. Mansur’s Affidavit dated 28.2.2014. Dr. Mansur further agreed that BTP had suffered loss as judgment had been entered against BTP in LWSB’s Suit (LWSB’s Judgment);

 

(15) Dr. Mansur admitted that he had no authority from BTP to appoint Messrs NH to act for BTP and in particular, to instruct Messrs NH to settle the claims of BTP’s creditors as follows –

 

(a) Super Sunrise Sdn. Bhd.;

 

(b) DPI Konsult Sdn. Bhd.;

 

(c) MLA Landscape Architect Sdn. Bhd.;

 

(d) TD Aziz Sdn. Bhd.; and

 

(e) Messrs SM (BTP’s 5 Creditors);

 

35

 

(16) when cross-examined by Ms. Fiona, Dr. Mansur admitted that Dr. Mansur and Puan Siti had appointed Messrs NH to prepare a SPA dated 6.9.2014 for Dr. Mansur and Puan Siti to sell their shares in MBSB to one “Datuk Kumar’ [SPA (MBSB Shares)]. Dr. Mansur and Puan Siti however did not proceed with the SPA (MBSB Shares);

 

(17) Dr. Mansur agreed with Ms. Fiona that Dr. Mansur and Dato’ Kumar had gone to the Project site on 12.9.2014. Dr. Mansur was aware that there were other persons who went with Dr. Mansur and Dato’ Kumar to the Project site on 12.9.2014 but Dr. Mansur was not aware who these persons were;

 

(18) during questioning by Ms. Fiona, Dr. Mansur admitted that he was aware that there were some payments by Purchasers which had not been credited into BTP’s HDA but had instead being banked into other BTP’s bank accounts. Dr. Mansur was however not aware of the exact sum of money paid by Purchasers which had not been credited into BTP’s HDA;

 

(19) Dr. Mansur agreed with Mr. Mathews that Dr. Mansur was the alter ego of BTP and MBSB. Dr. Mansur admitted that he made all the decisions for BTP and MBSB. Puan Siti would follow Dr. Mansur’s decisions;

 

36

 

(20) Dr. Mansur had proposed to enter into a joint venture agreement with Setia Awan Group (SAG) in respect of the Project but the details of such an agreement had not been finalized;

 

(21) Dr. Mansur disagreed with Mr. Mathews that BTP was unable to complete the Project prior to entering the 1st SSA;

 

(22) several months before 26.9.2012, Dr. Mansur had met Datuk Chai at the Site at the request of Mr. Tan. Dr. Mansur could not remember what was the conversation between Dr. Mansur and Datuk Chai. Dr. Mansur alleged that Mr. Tan and Mr. Yang brokered and “arranged” the terms of the moneylending transaction between Dr. Mansur and Datuk Chai. According to Mr. Tan and Mr. Yang, the terms of the loan were “nonnegotiable”;

 

(23) on 29.9.2015, Dr. Mansur had a meeting with the “Protem” committee of Purchasers (Protem Committee) with SAG (Dr. Mansur’s Meeting With Purchasers). Mr. Christopher Raymond Rozario (Mr. Christopher) is one of the Protem Committee members. Dr. Mansur testified that SAG was Dr. Mansur’s “partner’. Dr. Mansur however maintained that he had no “finalized” agreement with SAG. At Dr. Mansur’s Meeting With Purchasers –

 

37

 

(a) SAG presented proposals to the Protem Committee to develop the Project; and

 

(b) this case was discussed “in passing”.

 

Dr. Mansur disagreed with Mr. Mathews that Dr. Mansur had breached sub-paragraphs 1(i) and (ii) of the Consent Interlocutory Injunction;

 

(24) Dr. Mansur claimed that at the time of the loan by Datuk Chai, Dr. Mansur did not know the transaction was illegal. Dr. Mansur then changed his evidence and testified that he knew the loan was illegal at the material time;

 

(25) Dr. Mansur agreed with Mr. Mathews that –

 

(a) the option fee of RM489,000.00 as stated in clause 1 OA (1st Option Fee), had been paid by way of deduction from the RM6 million loan;

 

(b) MBSB did not issue a demand under clause 11.2(a) of the 1st SSA [Clause 11.2(a)] regarding the alleged unlawful deductions of RM489,000.00 and Legal Fees. Dr. Mansur however alleged that Puan Hadijah had called up Mr. Wong to complain about such unlawful deductions. Dr. Mansur did

 

38

 

ask Datuk Chai about the 2 deductions but Datuk Chai replied that such deductions were not negotiable; and

 

(c) Mr. Chong was appointed as an “additional director’ of BTP under clause 5.2 of the 1st SSA (Clause 5.2). Furthermore, Mr. Chong had been appointed as BTP’s director on 24.4.2013, after the time period to pay the option fees had expired on 8.4.2013;

 

(26) regarding Mr. Ho –

 

(a) Dr. Mansur had been informed by Mr. Chiam that Mr. Ho was a debt collector;

 

(b) Mr. Ho had not threatened Dr. Mansur; and

 

(c) there was nothing sinister in Mr. Ho’s collection of payments from Dr. Mansur. Dr. Mansur however alleged that Mr. Chiam requested for interest due to Dr. Mansur’s late payment;

 

(27) Dr. Mansur admitted that Dr. Mansur’s 6 Payments had been made through Dr. Mansur’s solicitors, Messrs SM, and some payments were made directly to Messrs ALSS;

 

(28) regarding the Meeting on 24.4.2013 –

 

39

 

(a) Mr. Yang went with Dr. Mansur to meet Datuk Chai at Datuk Chai’s office because Mr. Yang promised Dr. Mansur’s safety; and

 

(b) Dr. Mansur had known Mr. Yang for more than 20 years and Mr. Yang is Dr. Mansur’s good friend;

 

(29) Dr. Mansur agreed with Mr. Mathews that if Dr. Mansur could meet the conditions imposed by Datuk Chai, Dr. Mansur would not have complained about illegality;

 

(30) Dr. Mansur gave evidence that after his witness statement had been filed in this court, he had lodged another police report in July or August 2015 regarding an offence committed by Datuk Chai under MA; and

 

(31) Dr. Mansur did complain to SSM regarding, among others, Dr. Mansur’s allegation that Datuk Chai had amended BTP’s resolutions without knowledge and consent of Dr. Mansur and Puan Siti. Dr. Mansur agreed that SSM had investigated into Dr. Mansur’s complaint but no action had been taken by SSM in this case.

 

13. Dr. Mansur explained as follows, among others, in his re-examination by Dr. Mansur’s learned counsel, Mr. Ravi Nekoo (Mr. Ravi):

 

40

 

(1) on 12.9.2014, Dr. Mansur was requested by Datuk Kumar to go to the Project site to show the boundaries of BTP’s Land to Datuk Kumar. Dr. Mansur was at the Project site for not more than half an hour;

 

(2) Dr. Mansur had acquired BTP’s shares through MBSB by using MBSB’s internal funds of about RM15 million and the balance by way of ‘‘BTP’s financing”;

 

(3) Dr. Mansur testified that about RM9.9 million received from the Purchasers had not been credited into HAD;

 

(4) part of the RM6 million from Datuk Chai had been used by BTP to set-off BTP’s debts due to MBSB by paying MBSB’s creditors;

 

(5) Dr. Mansur did not file a suit against Datuk Chai in respect of the illegal moneylending transaction because there were negotiations, among others, between Dr. Mansur’s then solicitors, Messrs SC, to resolve this dispute with Datuk Chai’s then lawyers, Messrs AYH. When BTP filed the Original Action and applied for an interlocutory injunction against Dr. Mansur and Puan Siti, the 2nd Counterclaim was then instituted; and

 

(6) if the 2nd Counterclaim is allowed, Dr. Mansur is prepared to offer restitution to Datuk Chai.

 

41

 

14. Dr. Mansur subpoenaed Mr. Christopher to give evidence in this case.

 

Mr. Christopher gave the following evidence in his examination-in-chief:

 

(1) Mr. Christopher had purchased a condominium unit in the Damar Block. The SPA was signed by Mr. Christopher in 2009;

 

(2) when BTP failed to deliver vacant possession of condominiums to the Purchasers of Damar Block, they formed a society registered under the Societies Act 1966 and called “Persatuan Pemilik-pemilik Selayang Springs Damar Selangor’ (Purchasers’ Society). Mr. Christopher is the President of the Purchasers’ Society;

 

(3) Mr. Christopher heard that KLNSB was trying to revive the Project. KLNSB’s representative met Mr. Christopher and gave a proposal to revive the Project; and

 

(4) Mr. Christopher saw some drainage work being done at the Project site.

 

15. During cross-examination, Mr. Christopher testified, among others, as

 

follows:

 

(1) the Purchasers of Cedar Block formed the Protem Committee;

 

42

 

(2) Mr. Christopher agreed that he had no personal knowledge of the various applications for approval and negotiations conducted by BTP and KLNSB with the relevant authorities, banks and creditors. Furthermore, Mr. Christopher had been out of Malaysia for 1 month;

 

(3) Mr. Christopher agreed that the office bearers of the Purchasers’ Society, including Mr. Christopher, had attended Dr. Mansur’s Meeting With Purchasers. Dr. Mansur’s Meeting With Purchasers had been initiated by Dr. Mansur. Mr. Christopher also met SAG at Dr. Mansur’s Meeting With Purchasers. At Dr. Mansur’s Meeting With Purchasers, SAG proposed to develop the Project;

 

(4) Mr. Christopher was aware that Dr. Mansur and Puan Siti were no longer directors and shareholders of BTP. Dr. Mansur informed Mr. Christopher that Dr. Mansur attended Dr. Mansur’s Meeting With Purchasers as the owner of the land on which the Project was developed; and

 

(5) from time to time, Dr. Mansur would brief Mr. Christopher on the proposed rehabilitation of the Project and the progress of this case.

 

16. When re-examined by Mr. Ravi, Mr. Christopher stated, among others, as follows:

 

(1) Mr. Christopher was concerned about Datuk Chai’s capability to complete the Project;

 

43

 

(2) Mr. Christopher confirmed that Dr. Mansur had informed Mr. Christopher that Dr. Mansur was the owner of the land on which the Project was developed; and

 

(3) besides Dr. Mansur’s Meeting With Purchasers, there was no other up-date on the Project given by Dr. Mansur to Mr. Christopher.

 

E. Datuk Chai’s case

 

17. The following witnesses testified for Datuk Chai:

 

(1) Datuk Kenny Ng Bee Ken (Datuk Kenny);

 

(2) Datuk Chai.

 

18. According to Datuk Kenny’s witness statement –

 

(1) Datuk Kenny had been called to the Malaysia Bar in 1987. Since then, Datuk Kenny had been practising as an A&S. Datuk Kenny is currently a partner in Messrs ALSS;

 

(2) Datuk Kenny prepared the 1st SSA and OA on the instruction of Datuk Chai. For these 2 agreements –

 

44

 

(a) MBSB was represented by Dr. Mansur and MBSB’s solicitor, Encik Shaik from Messrs SM;

 

(b) Dr. Mansur and Encik Shaik were present at the negotiations in respect of the 1st SSA and OA. Dr. Mansur consulted Encik Shaik during these negotiations;

 

(c) Dr. Mansur signed the 1st SSA on behalf of MBSB and his signature was witnessed by Encik Shaik. Mr. Chiam’s signatures on the 1st SSA and OA were witnessed by Mr. Wong, a partner in Messrs ALSS;

 

(d) Encik Hazim is Dr. Mansur’s son. The completion of the 1st SSA was deferred to give Dr. Mansur or MBSB an opportunity to purchase BTP’s shares through Encik Hazim; and

 

(e) the Option Fees were imposed purely to cover any risk which Datuk Chai might be exposed during the deferment of the completion of the 1st SSA. It was agreed by parties that the 1st Option Fee would be deducted from the purchase price in the 1st SSA;

 

(3) Datuk Kenny denied that the 1st SSA and OA were sham agreements to disguise an illegal moneylending transaction. Datuk Kenny claimed –

 

45

 

(a) the 1st SSA and OA were “exactly’ what these agreements purported to be. These 2 agreements were above board and had been prepared based on terms which had been agreed by parties based on advice of their solicitors; and

 

(b) that Datuk Kenny would never advise any client to be involved in any form of illegal activity; and

 

(4) Encik Hazim did not exercise the option to purchase BTP’s shares under the OA.

 

19. Datuk Kenny gave the following evidence, among others, during crossexamination:

 

(1) in response to questions by Encik Shaik’s learned counsel, Dato’

 

Muhammad Adam Abdullah (Dato’ Adam) –

 

(a) Datuk Kenny was not aware that Encik Shaik was only instructed by Dr. Mansur to attest Dr. Mansur’s signature on the 1st SSA on MBSB’s behalf because the terms of the 1st SSA and OA had already been agreed upon;

 

(b) the meetings with Dr. Mansur and Encik Shaik regarding the 1st SSA and OA took place in Dr. Mansur’s office. Datuk Kenny had a handwritten note and transportation claim regarding a meeting with Dr. Mansur on 4.10.2012;

 

46

 

(c) Datuk Kenny maintained that both Datuk Kenny and Mr. Wong met Encik Shaik more than once in respect of the 1st SSA and OA;

 

(d) Datuk Kenny would set the structure of the 1st SSA and OA. Mr. Wong would do the “footwork’ and Datuk Kenny would look through the final draft of the 1st SSA and OA;

 

(e) Mr. Wong is still a partner in Messrs ALSS and is available to give evidence in this case; and

 

(f) Datuk Kenny agreed with Dato’ Adam that the letters and emails adduced by Datuk Kenny in this case, did not show any amendment to the draft 1st SSA and OA; and

 

(2) during Mr. Ravi’s cross-examination –

 

(a) Datuk Kenny testified that for corporate matters, Datuk Kenny worked together with Mr. Wong as a team;

 

(b) Mr. Wong was present with Datuk Kenny in all meetings with Dr. Mansur and Encik Shaik. According to Datuk Kenny, under the Legal Profession (Practice and Etiquette) Rules 1978, Datuk Kenny and Mr. Wong could not meet Dr. Mansur without the presence of Dr. Mansur’s solicitor, Encik Shaik;

 

47

 

(c) Datuk Kenny disagreed with Mr. Ravi’s contention that Dr.

 

Mansur had never met Datuk Kenny; and

 

(d) Datuk Chai paid the Legal Fee to Messrs ALSS.

 

20. Datuk Chai testified as follows in his witness statement, among others:

 

(1) regarding Datuk Chai’s background –

 

(a) Datuk Chai is an investor and entrepreneur who has a wide variety of business interests. Datuk Chai is the Group MD of 2 public listed companies; and

 

(b) Datuk Chai has extensive experience in construction and property development. Datuk Chai is the chairman of Freestyle Development Sdn. Bhd. which is currently developing 86 acres of land for University Putra Malaysia and has an annual turnover of over RM500 million;

 

(2) Mr. Chiam is Datuk Chai’s nominee;

 

(3) Datuk Chai has never been involved in moneylending business.

 

Datuk Chai denied that he had represented to Dr. Mansur that

 

he was a moneylender;

 

48

 

(4) Datuk Chai is the chairman of LCLSB which had provided

 

mechanical and electrical engineering services to the Project.

 

Datuk Chai was introduced to Dr. Mansur by Mr. Tan, LCLSB’s

 

director. Mr. Tan informed Datuk Chai that –

 

(a) MBSB, BTP’s holding company and contractor for the Project, was unable to pay MBSB’s various suppliers and sub-contractors. As such, the Project was in danger of being abandoned; and

 

(b) Dr. Mansur and Puan Siti who owned and controlled MBSB, were keen to rescue the Project by entering into a joint venture with a new investor who was financially sound and experienced in development and construction. Mr. Tan suggested for Datuk Chai to meet Dr. Mansur to explore possible options to save the Project. Hence, Datuk Chai agreed to meet Dr. Mansur;

 

(5) Datuk Chai met Dr. Mansur where –

 

(a) Dr. Mansur confirmed what Mr. Tan had informed Datuk Chai about the Project’s cash flow problems; and

 

(b) Dr. Mansur invited Datuk Chai to be a joint venture partner with Dr. Mansur;

 

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(6) Datuk Chai went to the Site to assess the development of the Project. Datuk Chai’s basic assessment and instinct led him to form a preliminary view that the Project was viable if managed properly. Datuk Chai was however not keen to team up with Dr. Mansur because Datuk Chai did not really know or trust Dr. Mansur. Accordingly, Datuk Chai informed Dr. Mansur that Datuk Chai would only be prepared to buy all the shares in BTP and Datuk Chai was not interested in any joint venture with Dr. Mansur. Dr. Mansur disagreed to this proposal;

 

(7) some 8 months later, around September 2013, Dr. Mansur approached Datuk Chai again through Mr. Tan and Mr. Yang. Dr. Mansur was prepared to sell MBSB’s entire shareholding in BTP on a “fire sale” basis as Dr. Mansur was in urgent need of funds. Dr. Mansur was however hopeful in raising funds for the Project in the near future and suggested that Dr. Mansur be given a maximum 6 months (Option Period) to raise such funds and Dr. Mansur would then re-purchase BTP’s shares from Datuk Chai. In consideration of this option, Dr. Mansur offered to pay monthly Option Fees to Datuk Chai;

 

(8) there was no time for Datuk Chai to do a full due diligence and study on BTP, in particular BTP’s liabilities. As such, it was agreed between Datuk Chai and Dr. Mansur that based on a “rough assessment’ of the risks involved in the Project, the purchase price of BTP’s shares be fixed at RM6 million and the

 

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Option Fee be fixed at RM489,000.00 per month. The 1st SSA and OA reflected the agreement between Datuk Chai and Dr. Mansur;

 

(9) Datuk Chai sought Datuk Kenny’s advice. Datuk Kenny raised the concern that there was no full due diligence but Datuk Chai explained to Datuk Kenny that there was no time to do a full due diligence as Dr. Mansur wanted the deal to be done quickly as Dr. Mansur was in dire need of funds. Option Fees were the means by which Datuk Chai sought to mitigate and cover potential losses arising from money which Datuk Chai had to fork out to keep BTP afloat;

 

(10) Encik Shaik from Messrs SM represented Dr. Mansur and MBSB in respect of the 1st SSA and OA;

 

(11) Datuk Chai was appointed a director of BTP on 8.10.2012 pursuant to Clause 5.2. This was to enable Datuk Chai to have access to BTP’s documents and accounts so as to protect Datuk Chai’s beneficial interests in BTP during the Option Period;

 

(12) Datuk Chai had caused his employee, Mr. How, to deposit RM5,457,560.00 into MBSB’s bank account. This sum constituted the full payment of BTP’s shares after Dr. Mansur had agreed to the set-off of the first Option Fee and Legal Fees

 

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from the RM6 million price for BTP’s shares. Dr. Mansur did not protest or complain against such a set-off;

 

(13) the 1st Option Fee was set off at source from the disbursement of RM5,457,560.00. The second Option Fee (2nd Option Fee) was received by Datuk Chai. Dr. Mansur defaulted in the payment of the third Option Fee (3rd Option Fee) and Datuk Chai was entitled to treat the Option as having lapsed. Dr. Mansur however persuaded Datuk Chai not to enforce Datuk Chai’s right to have BTP’s shares transferred absolutely to Datuk Chai by paying RM111,000.00 to Datuk Chai;

 

(14) the fourth Option Fee (4th Option Fee) was paid by Dr. Mansur to Datuk Chai. In respect of the fifth Option Fee (5th Option Fee), Dr. Mansur only paid RM400,000.00 on 8.3.2013 and the balance of RM89,000.00 was only paid on 11.3.2013;

 

(15) Datuk Chai denied making any demand for Dr. Mansur to pay interest for late payment of the Option Fees. Datuk Chai denied knowing a debt collector known as Steven. Datuk Chai also denied that Datuk Chai had engaged any bill collector to make demands to Dr. Mansur on Datuk Chai’s behalf. There was no need for Datuk Chai to make any demand on Dr. Mansur because Datuk Chai had bought and paid for BTP’s shares. Upon the lapse of the Option Period, Datuk Chai exercised his

 

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rights as owner of BTP’s shares and assumed control of BTP as follows –

 

(a) on or about 22.4.2013, Datuk Chai telephoned Puan Hadijah, BTP’s company secretary at that time, and informed her that –

 

(i) Datuk Chai would transfer BTP’s shares to his nominees;

 

(ii) Datuk Chai would appoint his nominees as directors of BTP;

 

(iii) Datuk Chai would appoint his own company secretaries for BTP;

 

(iv) Datuk Chai would change BTP’s registered address; and

 

(v) Datuk Chai would come to BTP’s office on 24.4.2013 to collect BTP’s documents and records; and

 

(b) Puan Hadijah informed Datuk Chai that she would need to speak to Dr. Mansur and Datuk Chai asked her to do so;

 

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(16) Datuk Chai went to BTP’s office on 24.4.2013 and was informed by BTP’s receptionist that Puan Hadijah was not around. Datuk Chai waited at BTP’s reception and called Puan Hadijah’s mobile telephone numerous times but she did not answer. Datuk Chai was also unsuccessful in contacting Dr. Mansur. Datuk Chai started to suspect something was amiss and became agitated as time went by. BTP’s then general manager, one Encik Roslee, attended to Datuk Chai and informed Datuk Chai that Puan Hadijah was present in BTP’s office;

 

(17) Datuk Chai sought the assistance of 2 of Datuk Chai’s employees to locate Puan Hadijah. After a short search, Puan Hadijah appeared. Datuk Chai expressed his annoyance at having been treated in such a manner. Datuk Chai then asked Puan Hadijah to hand over BTP’s documents and to prepare Puan Hadijah’s resignation letter as BTP’s company secretary (Puan Hadijah’s Resignation Letter);

 

(18) Puan Hadijah delayed the preparation of Puan Hadijah’s Resignation Letter and police then arrived at BTP’s office. The police informed Datuk Chai that a police report had been made which alleged that Datuk Chai had damaged BTP’s premises. The police was however surprised that Datuk Chai had not caused any damage to BTP’s premises;

 

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(19) Datuk Chai collected BTP’s documents and Puan Hadijah’s Resignation Letter. Datuk Chai then lodged Damansara Police Station Report No. 6393/2013 on 24.4.2013 (Datuk Chai’s Police Report) in respect of the incident on 24.4.2013. Datuk Chai denied threatening or bringing undue pressure on Puan Hadijah to submit Puan Hadijah’s Resignation Letter;

 

(20) after lodging Datuk Chai’s Police Report, Mr. Yang informed Datuk Chai that Dr. Mansur wanted to discuss with Datuk Chai. This led to the Meeting on 24.4.2013. In the Meeting on

 

24.4.2013 –

 

(a) Datuk Chai informed Dr. Mansur that a false police report had been made against Datuk Chai which alleged that Datuk Chai had damaged BTP’s premises. Datuk Chai also informed Dr. Mansur that Datuk Chai’s Police Report had been made; and

 

(c) Datuk Chai and Dr. Mansur discussed the possibility of Dr. Mansur re-purchasing BTP’s shares. Datuk Chai denied that Datuk Chai had imposed a condition for Dr. Mansur to re-purchase BTP’s shares, namely the withdrawal of Dr. Mansur’s 3rd Police Report. According to Datuk Chai, he did not even know that Dr. Mansur’s 3rd Police Report had been lodged;

 

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(21) after receiving BTP’s documents from Puan Hadijah –

 

(a) Datuk Chai’s nominee, Mr. Chong, was appointed a director of BTP on 24.4.2013;

 

(b) the resignation of Dr. Mansur and Puan Siti as BTP’s directors were effected on 25.4.2013;

 

(c) Puan Hadijah’s resignation as BTP’s company secretary took effect on 25.4.2013. On 25.4.2013, Datuk Chai appointed his own company secretaries for BTP, namely Ms. Au Yong Geak Yan and Ms. Yip Siew Yoong;

 

(d) on 25.4.2013, BTP’s registered address was changed to the 2nd Floor, No. 17 & 19, Jalan Brunei Barat, 55100 Kuala Lumpur; and

 

(e) on 9.5.2013, BTP’s shares were transferred from MBSB to Mr. Chiam.

 

Datuk Chai alleged that all the above were carried out

 

legitimately pursuant to Datuk Chai’s rights under the 1st SSA;

 

(22) Encik Mokhzani and Encik Asriman are Datuk Chai’s nominees.

 

Datuk Chai appointed Encik Mokhzani and Encik Asriman as

 

BTP’s directors on 2.5.2013. Datuk Chai caused Mr. Chiam to

 

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transfer 1 share in BTP to Encik Mokhzani. Datuk Chai and Mr. Chong then resigned as BTP’s directors on 3.5.2013. Datuk Chai did not wish for his name to be reflected on BTP’s records so that he could project himself as BTP’s “White Knight’. In such a manner, Datuk Chai would have better leverage to negotiate with BTP’s creditors, sub-contractors and suppliers, so as to achieve a favourable restructuring of BTP’s debts;

 

(23) Messrs SC’s letter dated 22.5.2013 alleged that, among others, the 1st SSA and OA were sham agreements to disguise an illegal moneylending transaction (Messrs SC’s Letter dated 22.5.2013). This allegation in Messrs SC’s Letter dated

 

22.5.2013 had been denied in Messrs AYH’s letter dated

 

6.6.2013 (Messrs AYH’s Letter dated 6.6.2013). Despite the allegation of an illegal moneylending transaction in Messrs SC’s Letter dated 22.5.2013, Messrs SM negotiated with Messrs AYH until an agreement for Dr. Mansur to repurchase BTP’s shares at a price of RM7,500,000.00, was reached (Agreement To Repurchase BTP’s Shares). The Agreement To Repurchase BTP’s Shares was stated in Messrs SC’s letter dated 23.12.2013. However, Dr. Mansur did not execute the Agreement To Repurchase BTP’s Shares. This is clear from the letter dated 7.3.2014 of Datuk Chai’s then solicitors, Messrs Thangaraj & Associates (Messrs TA), to Messrs NH;

 

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(24) as Dr. Mansur was unable to repurchase BTP’s shares, Datuk Chai decided to rehabilitate the Project. Datuk Chai managed to source for Bumiputera’s equity participation in the Project by selling 50% of BTP’s shares to Encik Kamarudin for RM2,500,000.00. Encik Kamarudin is not Datuk Chai’s nominee. Datuk Chai also caused Mr. Chiam to transfer the balance of BTP’s shares held by Mr. Chiam to Encik Mokhzani;

 

(25) Datuk Chai discussed with Mr. Ng Yin Meng (Mr. Ng) who has vast experience in development through Mr. Ng’s company, Tinta Anggun Engineering Sdn. Bhd. (TAESB). TAESB and Datuk Chai set up KLNSB as a special purpose vehicle to enter into a joint-venture agreement dated 19.8.2014 with BTP to revive the Project [JVA (KLNSB)]. BTP also granted a power of attorney to KLNSB to deal with all matters relating to the Project; and

 

(26) Dr. Mansur was a guarantor for Bank Rakyat’s Facilities and was concerned about the repayment of Bank Rakyat’s Facilities. Dr. Mansur requested from Datuk Chai an authorization from BTP to liaise with Bank Rakyat as Dr. Mansur claimed to have a “relationship” with Bank Rakyat’s officers. Datuk Chai was also concerned about Bank Rakyat’s Facilities. As such, BTP’s Directors Resolution dated

 

31.10.2013 was passed so as to enable Dr. Mansur to deal with Bank Rakyat in respect of Bank Rakyat’s Facilities.

 

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21. During cross-examination, Datuk Chai gave the following evidence, among others:

 

(1) when questioned by Dato’ Adam –

 

(a) Datuk Chai testified that he became BTP’s director to have access to BTP’s documents and accounts. However, Datuk Chai did not actually look through all of BTP’s documents and accounts. Nor did Datuk Chai exercise any supervisory role in BTP;

 

(b) Datuk Chai disagreed with Dato’ Adam that all the terms of the 1st SSA and OA had been agreed and were non-negotiable;

 

(c) Datuk Chai did not know that Encik Shaik was only to attest Dr. Mansur’s signature on MBSB’s behalf in the 1st SSA and nothing else; and

 

(d) since Datuk Chai took over BTP, he was in full control of BTP; and

 

(2) in response to Mr. Ravi’s cross-examination –

 

(a) Datuk Chai’s rough assessment of RM6 million as the purchase price for BTP’s shares was based on the locality of the Project,

 

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market price of BTP’s Land and BTP’s total debts of around RM90 million to Bank Rakyat and contractors. At the time of Datuk Chai’s rough assessment –

 

(i) the market price of BTP’s Land was from RM80 to RM90 million;

 

(ii) if the Project was completed under Dr. Mansur’s management, a profit of RM20 to RM30 million from the Project was estimated. Datuk Chai however testified that that upon Datuk Chai’s purchase of BTP’s shares, Datuk Chai did not expect Dr. Mansur to manage BTP and the Project; and

 

(iii) Datuk Chai did not have time to do a full diligence on BTP because Dr. Mansur wanted to sell BTP’s shares in a rush;

 

(b) Datuk Chai did not know why the sum of RM5,457,560.00 was not paid by Datuk Chai to Dr. Mansur through Messrs ALSS or Messrs SM;

 

(c) Datuk Chai agreed with Mr. Ravi despite Clause 12.8(b), Datuk Chai had deducted the Legal Fees from the sum of RM6 million;

 

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(d) Datuk Chai agreed with Mr. Ravi that Datuk Chai could have instructed Messrs ALSS to inform Dr. Mansur’s solicitor, Messrs SM, to pay the 3rd Option Fee;

 

(e) Mr. Ho is a manager of one of Datuk Chai’s companies. Mr. Chiam is a manager and director of several of Datuk Chai’s companies;

 

(f) Datuk Chai agreed with Mr. Ravi that if the 1st SSA and OA were genuine, Datuk Chai would not have called Dr. Mansur more than 20 times on 9.4.2013;

 

(g) Datuk Chai was aware that Dr. Mansur would withdraw Dr. Mansur’s 3rd Police Report;

 

(h) when Datuk Chai negotiated with BTP’s contractors, creditors and suppliers, Datuk Chai did not want them to know that Datuk Chai was actually managing BTP;

 

(i) Encik Mokhzani is Datuk Chai’s driver who also runs errands for Datuk Chai; and

 

(j) Datuk Chai agreed with Mr. Ravi that Messrs AYH’s Letter dated 6.6.2013 (which stated that Dr. Mansur did not pay RM111,000.00) contradicted Datuk Chai’s evidence in court.

 

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22. Datuk Chai clarified as follows in his re-examination:

 

(1) the Option Period was to enable Datuk Chai to understand better the structure of BTP because Datuk Chai did not carry out a due diligence on BTP when Datuk Chai purchased BTP’s shares;

 

(2) Datuk Chai deducted the Legal Fees from the RM6 million sum because the transaction was done in a “very rushed manner’ and there were many complicated documents to be prepared. As such, before the signing of the agreements, Datuk Chai asked Dr. Mansur whether Dr. Mansur was willing to bear the Legal Fees. Dr. Mansur agreed to bear the Legal Fees because the transaction was for Dr. Mansur’s benefit;

 

(3) Datuk Chai called Dr. Mansur more than 20 times because although Datuk Chai had taken over BTP, Datuk Chai had yet to receive many documents of BTP; and

 

(4) Messrs AYH had been engaged by Datuk Chai at a very short notice. Consequently, there was no “clear communication”. Hence, Messrs AYH’s Letter dated 6.6.2013 (which stated that Dr. Mansur did not pay RM111,000.00) contradicted Datuk Chai’s evidence in this case.

 

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F. BTP’s case

 

23. Ms. Fiona called the following 3 witnesses to support the Original Action:

 

(1) Mr. Ng;

 

(2) Encik Muhammad bin Din (Encik Muhammad); and

 

(3) Encik Kamarudin.

 

24. Mr. Ng’s evidence is as follows:

 

(1) according to Mr. Ng’s witness statement, among others –

 

(a) Mr. Ng is the majority shareholder of TAESB;

 

(b) Datuk Chai and TAESB are the shareholders of KLNSB;

 

(c) KLNSB and BTP had entered into JVA (KLNSB) to revive the Project. When KLNSB was brought into the project, BTP’s HD’s License had expired on 7.9.2013. KLNSB took immediate steps to –

 

(i) meet the Ministry of Housing and Local Government (KPKT);

 

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(ii) present KLNSB’s proposal to revive the Project to KPKT; and

 

(iii) renew BTP’s HD’s License. On 13.2.2015, KPKT had renewed BTP’s HD’s License. Thereafter, BPT is required to submit monthly progress report to KPKT on the progress of the Project;

 

(d) KLNSB had done the following work in respect of the Project –

 

(i) KLNSB cleared the Project site;

 

(ii) water and electricity supply to Damar Block had been connected so as to enable repair work to be done to the condominium units therein; and

 

(iii) KLNSB had applied for various approvals to re-commence the Project from Majlis Perbandaran Selayang (MPS).

 

KLNSB is committed to complete the Project within 18 months from the date of MPS’s conditional development approval of the amended building plans for the Project on 16.4.2015 (Project’s Amended Building Plans);

 

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(e) KLNSB’s shareholders had injected RM15,338,145.00 into KLNSB specifically for the expenditure of the joint venture with BTP in respect of the Project;

 

(f) KLNSB had provided a written undertaking dated 28.1.2015 to BTP to pay any sum due to any Purchaser which is found by the court to be due and owing from BTP to such a Purchaser;

 

(g) KLNSB had settled with Bank Rakyat in respect of BTP’s debt due under Bank Rakyat Facilities. Consequently, Bank Rakyat’s Suit was withdrawn on 22.4.2015; and

 

(h) KLNSB and BTP are “fully committed” to complete the Project;

 

(2) during cross-examination, Mr. Ng testified, among others, as follows

 

(a) Datuk Eddie is “basically an equity partner’ with TIESB in KLNSB. Datuk Eddie participates in all decisions of KLNSB’s BOD and management. Datuk Eddie also attended all meetings as KLNSB’s director with BTP;

 

(b) Mr. Ng disagreed with Mr. Ravi that the JVA (KLNSB) was not genuine. Mr. Ng further disagreed that KLNSB was not financially able to rehabilitate the Project;

 

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(c) KLNSB’s former name was Jurukur Terra Consult Sdn. Bhd. When KLNSB was incorporated, KLNSB’s principal activity was land surveys;

 

(d) Mr. Ng agreed with Mr. Ravi that no document evidencing the consent to the Project’s Amended Building Plans by the Purchasers, had been adduced in this case; and

 

(e) Mr. Ng agreed with Mr. Ravi that KLNSB had not informed the Purchasers of KLNSB’s proposal to obtain Purchasers’ consent to terminate SPA’s of condominiums and refund the Purchasers of their payment to BTP with 8% interest per annum; and

 

(3) during re-examination by Ms. Fiona, Mr. Ng explained as follows –

 

(a) KLNSB had at least 5 meetings with KPKT with regard to the Project;

 

(b) KLNSB had carried out a “multitude” of activities in the Project, such as –

 

(i) flood irrigation on the Project site;

 

(ii) strengthening of all structural parts of the buildings in the Project;

 

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(iii) re-engagement of consultants for Damar Block;

 

(iv) appointment of new consultants to revive the Project; and

 

(v) meetings with the Purchasers and the Protem Committee;

 

(c) BTP had entered into some agreements to re-purchase condominiums from certain Purchasers and payments for these re-purchases would be paid by KLNSB; and

 

(d) KLNSB is a special purpose vehicle which is substantially owned by TAESB and KLNSB has the financial resources to undertake the Project.

 

25. Encik Muhammad is a manager of Asas Security Services Sdn. Bhd. (ASSSB). Encik Muhammad’s testimony is as follows:

 

(1) Encik Muhammad’s witness statement averred, among others –

 

(a) on 11.9.2014 –

 

(i) Encik Muhammad and 2 other employees of ASSSB, had been assigned to be security guards at the Site;

 

(ii) when Encik Muhammad arrived at the Site at about 8.00 am, he found that the main entrance to the Site had been

 

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locked. The contractor of the Project who was supposed to clear the Site, could not enter the Site;

 

(iii) Encik Muhammad dismantled the lock;

 

(iv) Encik Muhammad lodged Selayang Police Station police report no. 21042/2014 in respect of the above incident (Encik Muhammad’s 1st Police Report);

 

(v) at about 3.00 or 4.00 pm, Encik Muhammad noticed a group of about 10 men at the Site. Encik Muhammad rode his motorcycle towards this group. In this group –

 

(va) there was a gentlemen who introduced himself as Alvin;

 

(vb) 2 uniformed security guards;

 

(vc) an Indian gentlemen;

 

(vd) a Malay gentleman; and

 

(ve) some rough looking men;

 

(vi) Alvin stated that he had been appointed by Datuk Kumar to clear the Project Site. According to Alvin, Datuk Kumar and

 

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Dr. Mansur wished to “chase out’ Encik Muhammad and his colleagues from the Site. Alvin informed Encik Muhammad that the Indian gentleman was Datuk Kumar and the Malay gentleman was Dr. Mansur;

 

(vii) Alvin introduced Encik Muhammad to Datuk Kumar and informed Datuk Kumar that Encik Muhammad had been appointed by KLNSB to guard the Site;

 

(viii) Datuk Kumar in a loud and fierce manner told Encik Muhammad that the Site belonged to Datuk Kumar and Datuk Kumar had all the documents to prove that fact;

 

(ix) Datuk Kumar pointed to the Malay gentleman and introduced the Malay gentleman as Dr. Mansur. Datuk Kumar claimed that he had bought the land from Dr. Mansur;

 

(x) Datuk Kumar asked Encik Muhammad and all other persons to leave the Site;

 

(xi) Datuk Kumar said that if Encik Muhammad and other persons remained at the Site, Datuk Kumar was entitled to shoot any person who had trespassed on the Site; and

 

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(xii) fearing for their safety due to Datuk Kumar’s threat and intimidation, Encik Muhammad and 2 other security guards of ASSSB left the Site. When Encik Muhammad left the Site, he noticed the 2 uniformed security guards with Datuk Kumar, began guarding the Site;

 

(b) Encik Muhammad informed his employer, Datuk Sundram, about the above threat and Datuk Sundram advised Encik Muhammad to make a police report. Hence, Encik Muhammad lodged Selayang Police Station police report no. 21168/2014 on 12.9.2014 (Encik Muhammad’s 2nd Police Report);

 

(c) when Encik Muhammad passed the Site on the way to make Encik Muhammad’s 2nd Police Report, he noticed that the main entrance to the Site had been padlocked; and

 

(d) 3 or 4 days later, Encik Muhammad had been directed by his employer to resume duties as a security guard at the Site because Datuk Kumar and Datuk Kumar’s people had left the Site; and

 

(2) when cross-examined by Mr. Ravi, Encik Muhammad did not agree

 

with Mr. Ravi that Dr. Mansur was not at the Site on 11.9.2014.

 

There was no re-examination of Encik Muhammad by Ms. Fiona.

 

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26. Encik Kamarudin testified as follows in his witness statement, among others:

 

(1) Encik Kamarudin had previously provided consultancy services to

 

TAESB;

 

(2) Encik Kamarudin became a shareholder of BTP in the following

 

manner –

 

(a) Encik Kamarudin purchased 500,005 shares in BTP from Mr. Chiam for a consideration of RM2,500,000.00. Mr. Chiam held BTP’s shares as a nominee for Datuk Chai;

 

(b) Encik Kamarudin had paid the sum of RM2,500,000.00 for shares in BTP. As such, Encik Kamarudin claimed to be a bona fide purchaser of BTP’s shares;

 

(c) the transfer of BTP’s shares from Mr. Chiam to Encik Kamarudin was effected on 6.6.2014; and

 

(d) the SPA between Encik Kamarudin and Mr. Chiam for Encik Kamarudin’s purchase of BTP’s shares (2nd SSA), was executed on 5.8.2014. The 2nd SSA was formalised after the transfer of BTP’s shares to Encik Kamarudin because BTP’s auditor had requested that an agreement be entered into by Encik Kamarudin and Mr. Chiam;

 

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(3) Encik Kamarudin was appointed BTP’s director on 5.8.2014. Since Encik Kamarudin had been appointed as a director of BTP, Encik Kamarudin had worked with KLNSB to liaise with BTP’s creditors so as to revive the Project;

 

(4) the present directors and shareholders of BTP are Encik Kamarudin and Encik Mokhzani. Encik Mokhzani holds BTP’s shares in trust for Datuk Chai;

 

(5) Dr. Mansur and Puan Siti had resigned as BTP’s directors on 25.4.2013;

 

(6) sometime in early 2014, BTP was served with LWSB’s Judgment amounting to RM155,515.87. Upon BTP’s inquiry, BTP discovered –

 

(a) Dr. Mansur had instructed solicitors to act for BTP in LWSB’s Suit; and

 

(b) Dr. Mansur’s Affidavit dated 28.2.2014 had been affirmed by Dr. Mansur in LWSB’s Suit

 

– without any authority from BTP because Dr. Mansur had already resigned as BTP’s director;

 

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(7) Dr. Mansur had acted in the following manner without BTP’s authorization –

 

(a) Dr. Mansur had instructed Messrs NH to settle the claims of BTP’s 5 Creditors against BTP; and

 

(b) Dr. Mansur had instructed Messrs NH to act on behalf of BTP in a proposed joint venture with KPS Consortium Bhd. (KPSCB) to revive the Project; and

 

(8) Encik Kamarudin conducted an internet search on Datuk Kumar which stated that –

 

(a) Datuk Kumar is one of Malaysia’s biggest conmen; and

 

(b) Datuk Kumar had been charged several times for cheating in criminal courts.

 

27. Encik Kamarudin gave the following evidence, among others, during his cross-examination:

 

(1) when questioned by Dato’ Adam –

 

(a) before Encik Kamarudin became a shareholder in BTP on 6.6.2014 –

 

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(i) Encik Kamarudin was a businessman and a financial consultant. Encik Kamarudin “arranged” for bank loans for big companies as he was a “Personal Assistant’ (PA) to a chairman of a bank;

 

(ii) Encik Kamarudin had experience in the construction industry by doing small jobs with the relevant authorities, such as Dewan Bandaraya Kuala Lumpur;

 

(iii) Encik Kamarudin did not know Encik Mokhzani; and

 

(iv) Encik Kamarudin was not involved with BTP in any capacity and had no dealing with any of the witnesses involved in this case; and

 

(b) Mr. Ng invited Encik Kamarudin to be BTP’s shareholder. Before Encik Kamarudin became a shareholder of BTP, he had conducted a due diligence on BTP;

 

(2) when cross-examined by Mr. Mathews, Encik Kamarudin testified that he was never Datuk Chai’s nominee; and

 

(3) in reply to Mr. Ravi’s questions –

 

(a) Encik Kamarudin did not know Mr. Chiam and yet, Encik Kamarudin paid the entire consideration of RM2.5 million to Mr.

 

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Chiam before the 2nd SSA was signed on 5.8.2014. Encik Kamarudin agreed with Mr. Ravi that as a financial consultant, Encik Kamarudin would not have advised his clients to pay in cash to an unknown person without any agreement. Encik Kamarudin also agreed that as a financial consultant, he would not pay RM2.5 million to an unknown person without any agreement;

 

(b) Encik Kamarudin could not remember when the consideration of RM2.5 million was paid to Mr. Chiam. Part of the RM2.5 million sum, approximately RM1.5 million, was Encik Kamarudin’s money and the balance of RM1 million was borrowed by Encik Kamarudin from his friends. Encik Kamarudin claimed that he had earnings from his company, Micro-Online Sdn. Bhd. (MOSB). According to Encik Kamarudin, MOSB however had closed down in 2014. Mr. Ravi then showed a copy of the search of SSM’s records regarding MOSB (Exhibit D1) to Encik Kamarudin. Exhibit D1 did not show Encik Kamarudin to be a director or shareholder of MOSB. Exhibit D1 showed that MOSB had been wound up. Encik Kamarudin explained that he was a “funder’ of MOSB when MOSB was set up. MOSB supplied provision to the army. Encik Kamarudin could not be MOSB’s director or shareholder because he had been adjudicated a bankrupt in the early 90’s;

 

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(c) Encik Kamarudin was made a bankrupt because he owed approximately RM50,000.00 to Citibank. Encik Kamarudin’s bankruptcy had been annulled in about 2012. When Encik Kamarudin was a PA to a bank’s chairman, Encik Kamarudin was still a bankrupt. Encik Kamarudin was paid RM4,000.00 a month as a PA to a chairman of the bank but he did not disclose such a sum to the Director General of Insolvency (DGI). Encik Kamarudin did not also obtain DGI’s permission to work as a PA to a bank’s chairman;

 

(d) Encik Kamarudin had never met Mr. Chiam. The amount of RM800,000.00 was paid by TAESB to Mr. Chiam because TAESB owed money to Encik Kamarudin for consultancy services provided by Encik Kamarudin to TAESB (Encik Kamarudin’s Consultancy Service). Encik Kamarudin’s Consultancy Service was provided after Encik Kamarudin gave up his job as a PA to a chairman of a bank. Encik Kamarudin however did not send any invoice or receipt to TAESB for Encik Kamarudin’s Consultancy Service;

 

(e) Encik Kamarudin was not sure who was the lawyer who prepared the 2nd SSA. According to Encik Kamarudin, TAESB appointed the solicitor for the 2nd SSA, Messrs Steven Tai Wong & Partners (Messrs STWP). Encik Kamarudin could not remember how much legal fees he had paid Messrs STWP;

 

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(f) Encik Kamarudin was also unsure who were the stakeholder appointed under the 2nd SSA;

 

(g) Mr. Ravi had shown documents to Encik Kamarudin which evidenced payment of only RM2 million (not RM2.5 million) for BTP’s shares on 6.6.2014 (the date of the instrument of transfer of BTP’s shares from Mr. Chiam to Encik Kamarudin). When Mr. Ravi asked Encik Kamarudin for an explanation, Encik Kamarudin said he could not remember;

 

(h) Mr. Ravi referred Encik Kamarudin to BTP’s Directors Circular Resolution dated 26.9.2014 which resolved that 500,005 shares in BTP be transferred from Mr. Chiam to Encik Kamarudin (BTP’s Directors Resolution dated 26.9.2014). Encik Kamarudin could not remember seeing BTP’s Directors Resolution dated 26.9.2014;

 

(i) the last time Encik Kamarudin filed his income tax returns was in 1998 when he worked with Malaysian Rubber Development Corporation (MARDEC) as a Human Resources Manager. Encik Kamarudin however could not remember his last drawn salary in MARDEC;

 

(j) Encik Kamarudin did not know Datuk Chai before Encik Kamarudin became BTP’s director;

 

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(k) Encik Kamarudin was not sure of the following –

 

(i) what was the amount of debts due from BTP to its suppliers, consultants, unsecured creditors and lawyers; and

 

(ii) how much LAD was claimed by the Purchasers from BTP; and

 

(l) regarding JVA (KLNSB) –

 

(i) Encik Kamarudin signed JVA (KLNSB) on behalf of BTP;

 

(ii) Encik Kamarudin was unsure why clause 3.9 JVA (KLNSB) did not provide for a completion period of JV (KLNSB);

 

(iii) under clause 2.1 JVA (KLNSB), KLNSB had paid RM3.5 million to BTP. Encik Kamarudin could not remember when BTP received RM3.5 million and what did BTP do with such a sum of money;

 

(iv) clause 6.1 JVA (KLNSB) provided for BTP to be paid a guaranteed sum of RM70 million in the following manner -RM5.5 million in cash and RM64.5 million by way of “contra of properties” to be developed by KLNSB. Encik Kamarudin however was not sure whether this RM70 million was

 

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sufficient to pay all the debts of BTP. BTP’s financial statements for the financial year ending 31.12.2013 showed BTP’s total liabilities to be RM77,082,312.00. Mr. Ravi suggested to Encik Kamarudin that BTP could not pay its total liabilities of more than RM77 million with only RM5.5 million in cash. Encik Kamarudin replied that he could not remember;

 

(v) Encik Kamarudin disagreed with Mr. Ravi that the JVA (KLNSB) did not actually benefit BTP. Encik Kamarudin also denied that the JVA (KLNSB) was planned by Datuk Chai;

 

(vi) Encik Kamarudin was appointed BTP’s director on 5.8.2014 and JVA (KLNSB) was signed on 19.8.2014. For the fourteen-day period between 5.8.2014 and 19.8.2014, Mr. Ravi asked Encik Kamarudin whether Encik Kamarudin had taken any step to find any joint venture partner other than KLNSB. To this question, Encik Kamarudin replied that he could not remember;

 

(vii) Encik Kamarudin testified that he did a due diligence on KLNSB before BTP entered into JVA (KLNSB). Encik Kamarudin however could not remember when he conducted such a due diligence; and

 

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(viii) KLNSB had the necessary approvals and the HD License to carry out the Project.

 

28. Ms. Fiona did not re-examine Encik Kamarudin.

 

G. Encik Shaik’s evidence

 

29. Encik Shaik gave evidence in favour of the 1st Counterclaim before BTP and Messrs SM entered into the Consent Order dated 14.1.2016.

 

30. In examination-in-chief, Encik Shaik testified as follows, among others:

 

(1) Encik Shaik as an A&S, handles –

 

(a) corporate and banking agreements; and

 

(b) conveyancing matters, namely SPA’s;

 

(2) Encik Shaik knew Dr. Mansur since school. Encik Shaik had acted for Dr. Mansur in conveyancing and corporate matters before this case;

 

(3) sometime in 2006, Dr. Mansur met Encik Shaik and requested Encik Shaik to act for Dr. Mansur in respect of the SPA (BTP Shares). Dr. Mansur informed Encik Shaik that upon Dr. Mansur’s taking control

 

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of BTP, Dr. Mansur required Encik Shaik to act for BTP in respect of the preparation and execution of SPA’s of condominiums in the Project;

 

(4) Dr. Mansur was the sole person running BTP and informed Encik Shaik that Encik Shaik would act for the Purchasers but the fees for the SPA’s would be borne by BTP. Encik Shaik prepared a total of 487 SPA’s. Encik Shaik also assisted BTP by rendering advice on matters related to the Project concerning bankers and government agencies. Encik Shaik had issued bills for work carried out from 2011 to 2014 amounting to RM1,482,055.50. BTP had paid a total of RM225,000.00 which left a balance of RM1,257,055.50 outstanding from BTP to Messrs SM (Messrs SM’s Debt). Encik Shaik had asked Dr. Mansur on a regular basis regarding Messrs SM’s Debt and Dr. Mansur had pleaded for time to pay Messrs SM’s Debt as BTP was facing a cash flow problem;

 

(5) Messrs SM issued a demand dated 26.5.2014 to BTP for Messrs SM’s Debt. Subsequently, Messrs NH sent a letter dated 17.7.2014 to Messrs SM which proposed that BTP would pay Messrs SM’s Debt in 6 instalments over 8 months, starting from August 2014 (Messrs NH’s Letter dated 17.7.2014). Messrs SM accepted the proposal in Messrs NH’s Letter dated 17.7.2014. BTP however did not make any payment as proposed in Messrs NH’s Letter dated 17.7.2014;

 

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(6) in respect of the 1st SSA and OA –

 

(a) Encik Shaik did not prepare the 1st SSA and OA in respect of the drafting of the 1st SSA and OA;

 

(b) Dr. Mansur had informed Encik Shaik that –

 

(i) the terms of the 1st SSA and OA had been agreed between Dr. Mansur and Datuk Chai. Encik Shaik was instructed by Dr. Mansur to have a look at the contracts and witness Dr. Mansur’s execution of the 1st SSA and OA; and

 

(ii) Dr. Mansur would remain as BTP’s director but additional directors of BTP would be appointed by the purchaser of BTP’s shares; and

 

(c) Encik Shaik dealt with Mr. Wong from Messrs ALSS. Encik Shaik did not deal with Datuk Kenny. Encik Shaik attended a meeting with Dr. Mansur and Mr. Wong at Encik Shaik’s office to decide the documents for execution; and

 

(7) Encik Shaik acted for Dato’ Azman in respect of Dato’ Azman’s Caveat. At the time of the entry of Dato’ Azman’s Caveat on 15.4.2013, Encik Shaik was no longer acting for BTP. Nor was Encik Shaik taking any instruction from Dr. Mansur. As such, Encik Shaik

 

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was “convinced” that there was no conflict of interest for Encik Shaik to act for Dato’ Azman regarding Dato’ Azman’s Caveat.

 

31. The following evidence, among others, emerged in Encik Shaik’s crossexamination:

 

(1) in reply to Mr. Mathews’ questions –

 

(a) Encik Shaik could not recall why the 1st Counterclaim pleaded there was illegality in respect of the 1st SSA and the change of BTP’s directors regarding Dr. Mansur and Puan Siti. Encik Shaik nevertheless maintained such a plea of illegality;

 

(b) regarding the 1st SSA –

 

(i) the draft 1st SSA was sent to Encik Shaik on 2.10.2012. Before witnessing the execution of the contracts, Encik Shaik looked at the 1st SSA and told Dr. Mansur that everything was in order before Dr. Mansur signed the 1st SSA. Subsequently, Encik Shaik changed his evidence and testified that something in the 1st SSA was amiss and Encik Shaik then asked Dr. Mansur why there were different parties. Encik Shaik then said that the nature of the transaction as reflected in the draft 1st SSA was entirely consistent with Dr. Mansur’s instruction;

 

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(ii) Encik Shaik agreed with Mr. Mathews that the 1st SSA did not provide for a loan to BTP. Encik Shaik also agreed that the 1st SSA stated that Messrs SM were MBSB’s solicitors and various documents were to be delivered by MBSB through Messrs SM to Messrs ALSS. Encik Shaik agreed that Messrs SM’s letter dated 8.10.2012 to Messrs ALSS (Messrs SM’s letter dated 8.10.2012) which sent documents stated in the 1st SSA (including resignation letters of Dr. Mansur and Puan Siti as BTP’s directors), contained a note written by Encik Shaik to Messrs ALSS that those documents were given by Messrs SM to Messrs ALSS on the undertaking by Messrs ALSS not to hand over those documents to the purchaser of BTP’s shares until the money had been transferred to the vendor’s account;

 

(iii) Encik Shaik agreed with Mr. Mathews that by issuing Messrs SM’s Letter dated 8.10.2012, Messrs SM did not act as a mere conduit but was acting as the vendor’s solicitors. According to Encik Shaik, he was merely carrying out what was “instructed” in the 1st SSA;

 

(iv) Mr. Wong sent an email dated 2.10.2012 to Encik Shaik (Mr. Wong’s Email dated 2.10.2012) which sent a draft 1st SSA to Encik Shaik as MBSB’s solicitors for Encik Shaik’s perusal and comments. Encik Shaik agreed that there was no evidence that Encik Shaik had informed Mr. Wong that

 

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he did not act for MBSB. Encik Shaik met Mr. Wong twice; and

 

(v) Encik Shaik’s role was to ensure that Dr. Mansur complied with the terms of the 1st SSA. Encik Shaik agreed with Mr. Mathews that Encik Shaik did advise Dr. Mansur on the draft 1st SSA;

 

(c) concerning the OA –

 

(i) Mr. Wong sent an email dated 3.10.2012 to Encik Shaik (Mr. Wong’s Email dated 3.10.2012) which sent a draft OA to Encik Shaik as solicitor for Encik Hazim;

 

(ii) Encik Shaik confirmed that it was his duty to look at the draft OA and advise Dr. Mansur whether it was in order for Dr. Mansur’s son, Encik Hazim, to sign the OA; and

 

(iii) Encik Shaik was aware that at the end of the six-month Option Period, Dr. Mansur would have to pay almost RM9 million to exercise the Option and re-purchase BTP’s shares. Encik Shaik was indeed concerned that if Dr. Mansur did not have the RM9 million, BTP “would be lost;

 

(d) Dr. Mansur did not inform Encik Shaik that Datuk Chai was a

 

moneylender;

 

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(e) Encik Shaik’s position was that both the 1st SSA and OA were legal;

 

(f) Encik Shaik was aware that Dr. Mansur failed to exercise the Option. Encik Shaik asked Dr. Mansur and Dr. Mansur said that Dr. Mansur was taking steps to rectify the matter. Encik Shaik was however not aware of the steps taken by Dr. Mansur;

 

(g) regarding Dato’ Azman’s Caveat –

 

(i) Encik Shaik knew Dato’ Azman for 4 or 5 years. Dr. Mansur, Dato’ Azman and Encik Shaik are friends;

 

(ii) Encik Shaik received instruction from Dato’ Azman regarding Dato’ Azman’s Caveat on 15.4.2013, the same day of the entry of Dato’ Azman’s Caveat;

 

(iii) Encik Shaik had no prior knowledge of the Alleged RM20 Million Debt. Dato’ Azman did not inform Encik Shaik of the Alleged RM20 Million Debt. Encik Shaik admitted that he was shocked regarding the Alleged RM20 Million Debt;

 

(iv) Dato’ Azman did not want to file a suit or wind up BTP;

 

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(v) Encik Shaik agreed with Mr. Mathews that Dato’ Azman had no caveatable interest in BTP’s Land; and

 

(vi) it did not occur to Encik Shaik that Dato’ Azman’s Caveat was lodged 1 week after Dr. Mansur failed to exercise the Option so as to prevent Datuk Chai from dealing with BTP’s Land;

 

(h) Messrs SM sent a demand dated 26.5.2014 (for Messrs SM’s Debt to BTP) to BTP’s office at Menara Bata Address (Messrs SM’s Demand dated 26.5.2014). According to Encik Shaik, Messrs SM’s Demand dated 26.5.2014 was sent to Menara Bata Address because Dr. Mansur informed Encik Shaik that Dr. Mansur was still running BTP. Menara Bata Address was given by Dr. Mansur to Encik Shaik. Encik Shaik was not aware of the change in the management and shareholding of BTP; and

 

(i) after 8.4.2014, Dr. Mansur did not inform Encik Shaik of any threat to the life of Dr. Mansur or his family; and

 

(2) Ms. Fiona had cross-examined Encik Shaik in respect of the 1st Counterclaim. In view of the fact that the 1st Counterclaim had been amicably resolved by way of the Consent Order dated 14.1.2016, I shall not reproduce Encik Shaik’s evidence during crossexamination by Ms. Fiona.

 

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32. After Encik Shaik had been cross-examined by Ms. Fiona, in the interest of justice, I exercised my power under s 165 of the Evidence Act 1950 (EA) to elicit the following evidence from Encik Shaik:

 

(1) Encik Shaik had been called to the Malaysian Bar in 1978; and

 

(2) Encik Shaik started practising as an A&S in 1982 until now.

 

33. After Encik Shaik had given the above evidence in response to the court’s questions, Mr. Ravi, Mr. Mathews and Ms. Fiona had no further cross-examination.

 

34. During re-examination, Encik Shaik clarified as follows, among others:

 

(1) when Encik Shaik asked Dr. Mansur why the draft 1st SSA was “completely incongruous” with Dr. Mansur’s instruction, Dr. Mansur did not answer Encik Shaik’s query;

 

(2) Mr. Wong initiated both meetings with Encik Shaik in respect of the 1st SSA and OA; and

 

(3) if there was any change in the management and shareholding of BTP, Dr. Mansur would have informed Encik Shaik.

 

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H. Submission of parties

 

35. Mr. Ravi had submitted the following, among others, in support of the 2nd

 

Counterclaim:

 

(1) the non-crediting into BTP’s HDA of sums of money paid by the Purchasers, had not been pleaded by BTP and should not be relied on by BTP against Dr. Mansur. Furthermore, Dr. Mansur had shown from BTP’s accounts that every sen received from the Purchasers had been used for the Project;

 

(2) the issue regarding s 67(1) CA had not been pleaded by BTP. In any event, there was no conclusive evidence that BTP had given financial assistance to MBSB to purchase BTP’s shares;

 

(3) Datuk Chai had lent RM6 million with interest to Dr. Mansur without a moneylender’s license. This contention is premised on the following reasons –

 

(a) contrary to the 1st SSA –

 

(i) Datuk Chai had first deducted interest amounting to RM489.000.00 and the Legal Fees from the RM6 million sum to be given to Dr. Mansur. Clause 12.8(b) provided that each party should bear its own legal costs; and

 

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(ii) Mr. How credited RM5,457,560.00 into MBSB’s bank account. If the 1st SSA was genuine, RM6 million should be paid to Messrs SM by Messrs ALSS with an undertaking by Messrs SM that Messrs SM would hold that sum until Messrs SM had possession of the documents stated in the 1st SSA. The RM6 million sum should have been paid by way of an accompanying letter from Messrs ALSS to Messrs SM;

 

(b) the OA was a sham agreement to cloak the payments of interest for the RM6 million loan because –

 

(i) the OA did not provide for any extension of the Option;

 

(ii) the OA did not provide what would happen if the monthly Option Fee was not paid;

 

(iii) the OA did not allow Datuk Chai to collect an additional sum of RM111,000.00 for late payment of the 3rd Option Fee. Messrs AYH’s Letter dated 6.6.2013 stated that Dr. Mansur did not pay the additional sum of RM111,000.00. Datuk Chai did not instruct Messrs AYH to correct this error in Messrs AYH’s Letter dated 6.6.2013. Furthermore, Messrs AYH’s Letter dated 6.6.2013 was a detailed letter which had comprehensively replied to each averment raised in Messrs SC’s Letter dated 22.5.2013. As such,

 

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Messrs AYH’s Letter dated 6.6.2013 could only have been sent with Datuk Chai’s clear instruction;

 

(iv) if the OA was genuine, upon Dr. Mansur’s default in paying the Option Fee, Datuk Chai would have instructed his solicitor, Messrs ALSS, to inform Dr. Mansur’s solicitor, Messrs SM, to remedy such a breach; and

 

(v) generally, a call option agreement will not have a monthly option fee but a fixed price for the option to be exercised;

 

(c) Datuk Chai would not have purchased BTP’s shares without doing a due diligence on BTP’s shares. Datuk Chai’s oral evidence that he had no time to conduct a due diligence, was inconsistent with the contents of a letter from his own solicitors, Messrs AYH’s Letter dated 6.6.2013 (stating that Datuk Chai had conducted a due diligence);

 

(d) Datuk Chai’s SMS to Dr. Mansur stated that “All ppl looking for me” showed that Datuk Chai was an unlicensed moneylender who had borrowed money from other unlicensed moneylenders (to lend the RM6 million to Dr. Mansur); and

 

(e) if the 1st SSA and OA were genuine –

 

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(i) there would not be any necessity for Datuk Chai to call Dr. Mansur more than 20 times on 23.8.2013; and

 

(ii) why would Dr. Mansur use RM5,457,560.00 given by Datuk Chai to pay contractors of BTP and MBSB in respect of the Project; and

 

(4) Mr. Chiam is the second defendant in the 2nd Counterclaim and should have been called by Datuk Chai to testify in this case for the following reasons –

 

(a) there were SMS’s from Mr. Chiam to Dr. Mansur wherein Mr. Chiam –

 

(i) demanded payment of the principal loan sum and interest;

 

(ii) stated that Mr. Chiam would come to Dr. Mansur’s office to collect the principal loan sum and interest;

 

(b) Messrs AYH’s Letter dated 6.6.2013 stated that Mr. Chiam was Datuk Chai’s business partner. As such, Mr. Chiam was not a mere nominee of Datuk Chai; and

 

(c) by way of the 2nd SSA, Mr. Chiam had sold BTP’s shares to Encik Kamarudin for RM2.5 million. The 2nd SSA was a sham agreement because –

 

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(i) there was documentary evidence that Encik Kamarudin had only paid RM2 million to Mr. Chiam. Furthermore, all these payments by Encik Kamarudin were made before the execution of the 2nd SSA; and

 

(ii) Encik Kamarudin did not have the financial capacity to pay RM2.5 million to Mr. Chiam as Encik Kamarudin had been adjudicated a bankrupt.

 

Datuk Chai’s failure to call Mr. Chiam to testify in this case, had deprived Dr. Mansur his right to cross-examine Mr. Chiam. Mr. Ravi relied on Harmindar Singh JC’s (as he then was) judgment in the High Court case of Guindarajoo a/l Vegadason v Satgunasingam Balasingam [2010] 6 CLJ 954 to submit that this court should accept Dr. Mansur’s evidence in this case because such evidence was not inherently implausible; and

 

(5) Mr. Ravi relied on the following provisions in the MA to submit that Datuk Chai was an unlicensed moneylender who had lent money to Dr. Mansur with interest –

 

(a) the definitions of “moneylender’, “moneylending” and “interest’ in s 2 MA, applied in this case;

 

(b) s 5 MA; and

 

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(c) s 10OA MA provides that proof of a single loan at interest made by a person shall raise a presumption that such a person is carrying on the business of moneylending, until the contrary is proved.

 

36. In resisting the Original Action, Mr. Ravi contended, among others, as follows:

 

(1) Dr. Mansur did not breach the Consent Interlocutory Injunction dated 2.3.3015 by attending Dr. Mansur’s Meeting With Purchasers because –

 

(a) Dr. Mansur attended Dr. Mansur’s Meeting With Purchasers as a former director of BTP; and

 

(b) Mr. Christopher knew that Dr. Mansur was no longer a director of BTP; and

 

(2) Dr. Mansur’s Affidavit dated 28.2.2014 was consistent with Dr. Mansur’s evidence that the 1st SSA and OA were sham agreements.

 

37. Mr. Mathews advanced the following contentions, among others, to resist the 2nd Counterclaim:

 

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(1) Datuk Chai is not and has never been a moneylender. Datuk Chai is a reputable and successful businessman and entrepreneur;

 

(2) Datuk Chai purchased BTP’s shares and did not lend money to Dr. Mansur;

 

(3) the 1st SSA and OA had been negotiated and freely agreed upon at arm’s length by Datuk Chai and Dr. Mansur. Both Datuk Chai and Dr. Mansur had been represented by solicitors in respect of the 1st SSA and OA;

 

(4) Dr. Mansur’s payments to Datuk Chai were Option Fees and not interest;

 

(5) when Dr. Mansur failed to pay the monthly Option Fee on 8.4.2013, Datuk Chai took over the ownership and control of BTP. Datuk Chai however continued to negotiate with Dr. Mansur for Dr. Mansur’s repurchase of BTP’s shares but Dr. Mansur was not financially able to re-purchase BTP’s shares;

 

(6) Datuk Chai caused some shares in BTP to be sold to Encik Kamarudin by way of the 2nd SSA; and

 

(7) since Datuk Chai took over the ownership and control of BTP, BTP had taken various steps to revive the Project.

 

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38. In support of the Original Action, Ms. Fiona submitted, among others, as

 

follows:

 

(1) Dr. Mansur and Puan Siti had resigned as directors of BTP. Their resignations as BTP’s directors had been lodged with SSM. Dr. Mansur and Puan Siti had not rectified SSM’s records;

 

(2) Dr. Mansur had admitted in the trial that despite the resignation of Dr. Mansur and Puan Siti as BTP’s directors, Dr. Mansur and Puan Siti had continued to act and hold themselves out as BTP’s directors;

 

(3) Dr. Mansur and Puan Siti, in acting and holding themselves out as BTP’s directors, had caused loss and damage to BTP;

 

(4) Dr. Mansur had trespassed on BTP’s Land; and

 

(5) Dr. Mansur had breached the Consent Interlocutory Injunction dated 2.3.3015.

 

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I. Approach in deciding allegation of illegality

 

39. This court will adopt the following approach in deciding whether the 1st SSA and OA were a cloak for a transaction which is illegal and unenforceable under MA:

 

(1) illegality need not be pleaded – please see the Supreme Court’s judgment delivered by Peh Swee Chin SCJ in Lim Kar Bee v Duofortis Properties (M) Sdn Bhd [1992] 2 MLJ 281, at 288. Accordingly, I reject Dr. Mansur’s contention that s 67 CA and BTP’s failure to credit the Purchaser’s money into HDA, should not be considered because such matters had not been pleaded in this case;

 

(2) a party may raise an issue on illegality at any stage of the proceedings, even at the appellate level. In Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd [1989] 1 MLJ 457, at 460462, the breach of s 5(1) HDCLA was only raised for the first time during the hearing of the appeal before the Privy Council. Despite the fact that the illegality issue had not been pleaded and raised in the High Court and the then Federal Court, the Privy Council in a judgment delivered by Lord Oliver, allowed such a question to be raised. The Privy Council then remitted the illegality issue to be considered by our Supreme Court (at the time of the decision of the Privy Council, appeals to the Privy Council for civil matters had been abolished and our Supreme Court had already been inaugurated as

 

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the apex court). I should state that learned counsel are duty bound as officers of the court to administer justice and to raise any issue of illegality at the earliest opportunity;

 

(3) proviso (a) to s 92 EA allows oral and documentary evidence to be admitted to contradict a contract on the ground of illegality – please refer to the Supreme Court’s judgment delivered by Peh Swee Chin SCJ in Lim Kar Bee v Duofortis Properties (M) Sdn Bhd [1992] 2 MLJ 281, at 289;

 

(4) there is no privilege attached to a communication between a client and his or her practising A&S (Legal Communication) in the following circumstances –

 

(a) when the Legal Communication was made in furtherance of any illegal purpose – please see proviso (a) to s 126(1) EA; and/or

 

(b) when the A&S observed any fact in the course of the A&S’s employment which showed any crime or fraud had been committed since the commencement of the A&S’s employment – please see proviso (b) to s 126(1) EA;

 

(5) in deciding whether there is an illegality in a case, the court has the discretion to lift and/or pierce a corporate veil – please refer to Lim Kar Bee, at 291;

 

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(6) the court is not bound by the label or description of the agreement in question – please see Gopal Sri Ram JCA’s (as he then was) judgment in the Court of Appeal case Sia Siew Hong & Anor v Lim Gim Chian & Ors [1996] 3 CLJ 26, at 32;

 

(7) the court can and should go should behind the agreement or transaction to ascertain –

 

(a) the true nature of the agreement or transaction – Gopal Sri Ram JCA’s judgment in the Court of Appeal case of Sri Kelangkota-Rakan Engineering JV Sdn. Bhd. v Arab-Malaysian Prima Realty Sdn. Bhd. [2001] 1 MLJ 324, at 333-334. The Court of Appeal’s judgment in Sri Kelangkota has been affirmed by the Federal Court in a judgment given by Abdul Malek Ahmad FCJ (as he then was) – please refer to [2003] 3 MLJ 257; and

 

(b) the true nature of the relationship between the parties – please see the judgment of Gopal Sri Ram JCA in the Court of Appeal in Pan Global Equities Sdn Bhd & Anor v Taisho Co Sdn Bhd

 

[2006] 1 MLJ 158, at 161; and

 

(8) in Lori Malaysia Bhd v. Arab-Malaysian Finance Bhd [1999] 2 CLJ 997, at 1010 and 1015-1016, the Federal Court recognised the trend in other Common Law countries that courts should be slow to strike down commercial transactions on illegality. The Federal Court has

 

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incorporated such a trend as part of Malaysian Common Law in Lori Malaysia Bhd.

 

J. Credibility of witnesses

 

40. I find as a fact that Datuk Kenny is a credible witness for the following reasons:

 

(1) Datuk Kenny’s oral evidence is corroborated by –

 

(a) the exchange of letters between Messrs ALSS and Messrs SM regarding the preparation and drafting of the draft 1st SSA and draft OA;

 

(b) emails regarding the draft 1st SSA and draft OA had been sent by Messrs ALSS to Messrs SM; and

 

(c) Messrs SM’s Letter dated 8.10.2012 which sent documents to Messrs ALSS as provided in the 1st SSA.

 

In the Court of Appeal case of Guan Teik Sdn Bhd v Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ 324, at 330, Siti Norma Yaakob JCA (as she then was) explained the importance of contemporaneous documentary evidence. If the 1st SSA and OA were sham documents, there would not have been

 

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contemporaneous letters and emails between practising A&Ss’ in this case;

 

(2) there was no complaint and/or allegation by Dr. Mansur and Encik Shaik that Datuk Kenny had abetted or taken part in any illegal moneylending transaction in this case;

 

(3) Datuk Kenny is a senior A&S who has been practising since he has been called to the Malaysian Bar in 1987. It is unlikely for such an experienced A&S to be deceived by Datuk Chai to act for Datuk Chai in an illegal moneylending transaction so as to give the transaction a veneer of legality; and

 

(4) there is neither motive nor reason for Datuk Kenny, a senior and practising A&S, to give false evidence in this case to favour Datuk Chai.

 

41. I make a finding of fact that Dr. Mansur is not a credible witness. This

 

finding is premised on the following evidence and reasons:

 

(1) Dr. Mansur is a highly intelligent and highly qualified person by reason of having obtained a PhD, MSc and BSc. Prior to owning and running MBSB and BTP, Dr. Mansur had served with JKR and had been appointed to senior positions in the private sector. In fact, Dr. Mansur had been a MD of SKC, a Class A contractor. Dr. Mansur is therefore not a gullible

 

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simpleton and should know the importance of not back-dating a document, especially a document which has legal consequences. Yet, in 2012 or 2013 Dr. Mansur signed BTP’s Backdated Letter To Dato’ Azman but backdated this letter to 9.6.2008, about 4 to 5 years earlier. Such an act of backdating showed Dr. Mansur’s lack of probity and this had cast a severe doubt on Dr. Mansur’s credibility;

 

(2) BTP’s Backdated Letter To Dato’ Azman referred to the Alleged RM20 Million Debt which was to be paid by BTP to Dato’ Azman in equal monthly instalments commencing on 1.7.2008. The Alleged RM20 Million Debt was not reflected in BTP’s records and statutory accounts. More importantly, if the Alleged RM20 Million Debt was genuine, Dato’ Azman would have filed a suit against BTP before the expiry of the six-year limitation period as provided in s 6(1)(a) of the Limitation Act 1953 (LA). As the six-year limitation period for the Alleged RM20 Million Debt had lapsed on 2.7.2014, this meant that the Alleged RM20 Million Debt had been contrived by Dr. Mansur. Such a fact clearly undermines Dr. Mansur’s credibility;

 

(3) Encik Shaik is an experienced A&S who has been called to the Malaysian Bar in 1978. In fact, Encik Shaik is a more senior member of the Malaysian Bar than Datuk Kenny. As a practicing A&S, Encik Shaik handles, among others, corporate and conveyancing matters. Even before the Project, Encik

 

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Shaik had acted as Dr. Mansur’s solicitor. More importantly, Encik Shaik has known Dr. Mansur since school. Dr. Mansur admitted during cross-examination that Dr. Mansur had known Encik Shaik for a long time but Dr. Mansur had not informed Encik Shaik about the alleged RM6 million loan. If Dr. Mansur had borrowed money with interest from Datuk Chai, it would be inconceivable for Dr. Mansur not to have informed Encik Shaik about the illegal moneylending transaction in this case. Furthermore, Dr. Mansur had sought Encik Shaik’s advice on Datuk Chai’s Proposal dated 24.4.2013 and Encik Shaik had advised Dr. Mansur not to accept Datuk Chai’s Proposal dated 24.4.2013. It is also implausible for Dr. Mansur to deceive his own experienced solicitor and longtime friend, Encik Shaik, by –

 

(a) appointing Encik Shaik to act for MBSB (in the 1st SSA) and for Dr. Mansur’s own son, Encik Hazim (in the OA); and

 

(b) concealing from Encik Shaik the true nature of the transaction between Dr. Mansur and Datuk Chai;

 

(4) Mr. Christopher is a witness subpoenaed by Dr. Mansur. I find that Mr. Christopher is an independent witness of truth. According to Mr. Christopher, Dr. Mansur attended Dr. Mansur’s Meeting With Purchasers. I am of the view that Dr. Mansur’s Meeting With Purchasers had breached sub-paragraph 1(ii) of

 

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the Consent Interlocutory Injunction dated 2.3.2015 (Dr. Mansur’s Breach of Interlocutory Injunction). Dr. Mansur’s Breach of Interlocutory Injunction showed that Dr. Mansur was willing to defy a court order (to which he had consented) so as to “regain” the Project. Accordingly, Dr. Mansur’s credibility is undermined by Dr. Mansur’s Breach of Interlocutory Injunction;

 

(5) a party’s conduct is highly relevant under s 8(2) EA – please see Chang Min Tat FJ’s judgment in the Federal Court case of Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229, at 234. The following conduct of Dr. Mansur is inconsistent with his averment of illegality in this case –

 

(a) Dr. Mansur and Puan Siti had signed MSBS’s Letter dated

 

9.5.2013 which, among others, instructed Puan Hadijah to hand over all of BTP’s statutory records before 20.5.2013. MSBS’s Letter dated 9.5.2013 clearly contradicted Dr. Mansur’s allegation of illegality in this case;

 

(b) Dr. Mansur acted upon BTP’s Directors Resolution dated

 

31.10.2013 which, among others, appointed Dr. Mansur to deal with Bank Rakyat on behalf of BTP in respect of Bank Rakyat’s Facilities. If Dr. Mansur’s claim of illegality was true, Dr. Mansur should not have accepted BTP’s Directors Resolution dated 31.10.2013, let alone act on such a resolution; and

 

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(c) after making Dr. Mansur’s 3rd Police Report, on the very same night, Dr. Mansur went to meet with Datuk Chai in Datuk Chai’s office. Such a conduct on Dr. Mansur’s part contradicted Dr. Mansur’s 3rd Police Report that Dr. Mansur was in fear for the safety of Dr. Mansur and his family;

 

(6) Dr. Mansur’s Affidavit dated 28.2.2014 stated that Dr. Mansur was BTP’s MD who had been authorized by BTP to affirm Dr. Mansur’s Affidavit dated 28.2.2014. Dr. Mansur admitted during cross-examination that Dr. Mansur’s Affidavit dated 28.2.2014 contained a mistake and Dr. Mansur affirmed that affidavit as BTP’s shareholder. Such an explanation could not be accepted as Dr. Mansur was not BTP’s MD at the time of the affirmation of Dr. Mansur’s Affidavit dated 28.2.2014. Section 193 of the Penal Code (PC) provides that any person who intentionally gives false evidence in any judicial proceeding, may be punished with imprisonment up to 7 years and/or fine. The fact that Dr. Mansur’s Affidavit dated 28.2.2014 had been “mistakenly” affirmed (in Dr. Mansur’s own explanation), seriously eroded Dr. Mansur’s credibility in this case;

 

(7) Dr. Mansur’s 1 st Police Report stated that Dr. Mansur was indebted to a company. More significantly, Dr. Mansur’s 1 st Police Report did not mention anything about an illegal loan by a loan shark named Datuk Chai to Dr. Mansur. Section 182 PC

 

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provides for the offence of giving a false police report which is punishable with imprisonment up to 6 months and/or fine up to RM2,000.00;

 

(8) Dr. Mansur’s 4th Police Report stated that –

 

(a) Dr. Mansur withdrew Dr. Mansur’s 3rd Police Report because there had been a misunderstanding;

 

(b) Dr. Mansur had resolved the matter amicably;

 

(c) Dr. Mansur would not blame any party subsequently in respect of Dr. Mansur’s withdrawal of Dr. Mansur’s 3rd Police Report; and

 

(d) Dr. Mansur’s 4th Police Report had been made voluntarily by Dr. Mansur without any coercion by any party.

 

The contents of Dr. Mansur’s 4th Police Report are clearly at variance with Dr. Mansur’s testimony in this case;

 

(9) the relevant parts of ss 7A and 22(1) HDCLA provide as follows

 

“7A. Licensed housing developer to open and

 

maintain [HDA]

 

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(1) Subject to subsection (9), every licensed housing developer shall open and maintain a [HDA] with a bank or finance company for each housing development undertaken by the licensed housing developer.

 

(2) Where a housing development is to be developed in phases, the licensed housing developer shall open and keep a [HDA] under subsection (1) for each phase of such housing development.

 

(3) The licensed housing developer shall pay into the [HDA] of a housing development the purchase monies received by the licensed housing developer from the sale of housing accommodation in the housing development and any other sum or sums of money which are required by regulations made under this Act to be paid into the [HDA].

 

(4) The licensed housing developer shall not withdraw any money from the [HDA] except as authorised by regulations made under this Act.

 

(9) This section shall not apply to any housing

 

development carried on by a licensed housing developer where all the housing accommodation in the housing development and the issuance of certificate of completion and compliance will not be

 

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offered for sale and purchase before the completion of the housing development.

 

(10) Any housing developer who contravenes or fails to comply with this section shall be guilty of an offence and shall, on conviction, be liable to a fine which shall not be less than two hundred and fifty thousand ringgit but which shall not exceed five hundred thousand ringgit and shall also be liable to imprisonment for a term not exceeding three years or to both.

 

22. Liability of director, manager and other officials for

 

offences

 

(1) Where any offence against any provision of this Act

 

has been committed by a housing developer, any person who at the time of the commission of the offence was a director, manager or secretary or holds any similar office or position or was an agent, clerk or servant of the housing developer shall be deemed to be guilty of that offence, unless he proves that the offence was committed without his consent or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances, and shall, on conviction, be liable to imprisonment for a term which shall not be less than twelve months but which shall not exceed three years and shall also be liable to a fine which

 

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shall not be less than fifty thousand ringgit but shall not exceed two hundred and fifty thousand ringgit.

 

(emphasis added).

 

During cross-examination, Dr. Mansur had admitted that he was aware of BTP’s legal obligation to pay all money received from the Purchasers, into BTP’s HDA. Dr. Mansur had admitted during re-examination that about RM9.9 million paid by the Purchasers, had not been credited into BTP’s HDA. I cannot accept Dr. Mansur’s contention that the approximate sum of RM9.9 million had been used for the Project. This is because once BTP failed to credit any sum of money paid by the Purchasers into HDA, BTP would have already committed an offence under s 7A(3) HDCLA. Such an offence is punishable under s 7A(10) HDCLA with a maximum imprisonment of 3 years and/or a fine of not less than RM250,000.00 and not more than RM500,000.00.

 

Section 22(1) HDCLA is constitutional according to the Court of Appeal’s judgment delivered by Tengku Maimun JCA in Public Prosecutor v Gan Boon Aun [2015] 9 CLJ 328. Gan Boon Aun concerned s 122(1) of the Securities Industry Act 1983 which is similar to s 22(1) HDCLA.

 

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As Dr. Mansur was a director of BTP at the time of BTP’s failure to credit a sum of about RM9.9 million into BTP’s HDA, Dr. Mansur would be deemed by s 22(1) HDCLA to have committed an offence under s 7A(3) HDCLA unless Dr. Mansur proved the following 2 circumstances on a balance of probabilities –

 

(a) BTP’s failure to comply with s 7A(3) HDCLA had been committed without Dr. Mansur’s consent or connivance; and

 

(b) Dr. Mansur had exercised all diligence so as to prevent BTP’s commission of the above offence, having regard to the nature of Dr. Mansur’s functions and all the circumstances.

 

In this case, Dr. Mansur was the owner and controller of BTP at the material time. It would be difficult for Dr. Mansur to rebut the statutory presumption under s 22(1) HDCLA [Dr. Mansur had committed an offence under s 7A(3) HDCLA]. In any event, the fact that BTP failed to comply with s 7A(3) HDCLA when BTP was owned and controlled by Dr. Mansur, clearly undermined Dr. Mansur’s creditworthiness in this case; and

 

(10) the relevant part of s 67 CA provides as follows:

 

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“67(1) Except as is otherwise expressly provided by [CA] no company shall give, whether directly or indirectly and whether by means of a loan, guarantee or the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company or, where the company is a subsidiary, in its holding company or in any way purchase, deal in or lend money on its own shares.

 

(3) If there is any contravention of this section, the

 

company is, notwithstanding section 369, not guilty of an offence but each officer who is in default shall be guilty of an offence against [CA].

 

Penalty: Imprisonment for five years or one hundred thousand ringgit or both.

 

(emphasis added).

 

Dr. Mansur had admitted during cross-examination and reexamination that BTP had given financial assistance amounting to RM16,748,230.00 to MBSB to acquire BTP’s shares from

 

iii

 

Tan Sri Elyas. Dr. Mansur further testified during crossexamination that he was aware of s 67(1) CA. Clearly BTP had breached s 67(1) CA. Any “officer’ of BTP [defined in s 4(1)(a) CA to include BTP’s director] at the time of BTP’s breach of s 67(1) CA would have committed an offence which is punishable with a maximum imprisonment of 5 years and/or fine of RM100,000.00.

 

The fact that Dr. Mansur knew about s 67(1) CA and had caused BTP’s contravention of s 67(1) CA, showed that Dr. Mansur’s credibility was suspect.

 

42. I am of the view that Datuk Chai is a credible witness. This finding of fact is based on the following evidence and reasons:

 

(1) the following conduct by Datuk Chai corroborates his testimony that the 1st SSA and OA are genuine –

 

(a) Datuk Chai had been appointed as BTP’s director on 8.10.2012 and he held that office until 3.5.2013. It is inconceivable for any Ah Long to emerge openly to be a director of a company whose owner and controller has previously borrowed money from the Ah Long;

 

(b) Datuk Chai and TAESB set up KLNSB to revive the Project. If Datuk Chai was an unlicensed moneylender, Datuk Chai would

 

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have sold BTP’s shares at a profit, instead of putting in efforts to rehabilitate the Project; and

 

(c) the fact that Datuk Chai’s Police Report had been made, showed that Datuk Chai had nothing to hide. It is highly improbable for a loan shark to make a police report in respect of an illegal moneylending loan given by himself;

 

(2) Datuk Chai is an investor and has his own construction and property development companies. In fact, Datuk Chai is the Group MD of 2 public listed companies. There was no reason why Datuk Chai would lend RM6 million with interest to Dr. Mansur when he could have purchased BTP’s shares from Dr. Mansur and take over the task of reviving the Project; and

 

(3) Datuk Chai’s evidence has been corroborated in material particulars by Datuk Kenny’s testimony.

 

43. I have not overlooked the SMS’s tendered by Dr. Mansur. I will discuss later in this judgment why the SMS’s do not undermine Datuk Chai’s credibility.

 

44. I find that Encik Kamarudin is not a credible witness for the reasons submitted by Mr. Ravi. Such a finding of fact however does not support the 2nd Counterclaim for reasons which I will explain subsequently in this judgment.

 

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K. What is regulated and prohibited by MA?

 

45. It is essential to appreciate the purpose and scope of MA so as to ascertain what is regulated and prohibited by MA.

 

46. The title to MA states as follows:

 

“An Act for the regulation and control of the business of moneylending, the protection of borrowers of the monies lent in the course of such business, and matters connected therewith ”

 

(emphasis added).

 

The present title to MA has been inserted by the Moneylenders (Amendment) Act 2003 (Act A1193).

 

47. The following provisions in MA are relevant:

 

(1) the definition of “moneylender’ in s 2 MA –

 

“ “moneylender” means any person who carries on or advertises

 

or announces himself or holds himself out in any way as carrying

 

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on the business of moneylending, whether or not he carries on any other business; ”

 

(emphasis added).

 

The present definition of “moneylender’ in s 2 MA has been inserted by the Moneylenders (Amendment) Act 2011 (Act A1390);

 

(2) s 5 MA –

 

“5. Licences to be taken out by moneylender

 

(1) No person shall carry on or advertise or announce himself or hold himself out in any way as carrying on the business of moneylending unless he is licensed under this Act.

 

(2) Any person who carry on or advertise or announce himself or hold himself out in any way as carrying on the business of moneylending without a valid licence, or who continues to carry on such business after his licence has expired or been suspended or revoked shall be guilty of an offence under this Act and shall be liable to a fine of not less than two hundred and fifty thousand ringgit but not more than one million ringgit or to imprisonment for a term not exceeding five years or to both, and in the case of a second or subsequent offence shall also be liable to whipping in addition to such punishment. ’

 

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(emphasis added).

 

Section 5(1) and (2) MA are inserted by Act A1193 and have been amended subsequently by Act A1390;

 

(3) s 10OA MA –

 

“ 10OA Presumption as to the business of moneylending

 

Where in any proceedings against any person, it is alleged that such person is a moneylender, the proof of a single loan at interest made by such person shall raise a presumption that such person is carrying on the business of moneylending, until the contrary is proved ”

 

(emphasis added).

 

Section 10OA MA has been introduced by Act A1390;

 

(4) s 15 MA –

 

“No moneylending agreement in respect of money lent after the coming into force of [MA] by an unlicensed moneylender shall be enforceable.”

 

(emphasis added); and

 

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(5) s 29AA MA provides as follows –

 

“29AA Prohibition of assisting unlicensed moneylending

 

(1) Any person who assists a moneylender in contravention of subsection 5(1) shall be guilty of an offence under this Act and shall be liable to imprisonment for a term not exceeding two years or to a fine not exceeding twenty thousand ringgit or to both.

 

(2) For the purpose of subsection (1), where the bank account, passbook, automated teller machine card, credit card or charge card of any person, or the postdated cheque issued by any person, is proved to the satisfaction of the court to have been used to facilitate the carrying on of the business of a moneylender in contravention of subsection 5(1), that person shall be presumed, until the contrary is proved, to have assisted the moneylender in the contravention of subsection 5(1):

 

(emphasis added).

 

Section 29AA MA has been introduced by Act A1390.

 

48. I am of the following view regarding MA:

 

(1) the title to MA and the above provisions in MA show Parliament’s intention for MA to regulate the business of moneylending and not

 

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to regulate all kinds of moneylending transactions. Section 5(1) and

 

(2) MA prohibit unlicensed moneylending business and certain acts related thereto. MA does not prohibit any moneylending transaction with interest unless the lender has carried on an unlicensed moneylending business;

 

(2) s 10OA MA provides that in any proceedings against any person where it is alleged that such person is a moneylender, proof of a single loan at interest made by such person shall raise a rebuttable presumption that such person is carrying on the business of moneylending. Even if a presumption arises under s 10OA MA against a certain party, that party may adduce evidence to rebut this presumption by proving that the party is not carrying on moneylending business. A party is only required to adduce evidence on a balance of probabilities to rebut a statutory presumption -please see the Supreme Court’s judgment delivered by Wan Suleiman SCJ in Akin Khan bin Abdul Rahman v Public Prosecutor [1987] 2 MLJ 217, at 218-219; and

 

(3) s 15 MA applies only to a moneylending agreement by an unlicensed moneylender who is carrying on business of moneylending. This is because of the definition of “moneylender’ in s 2 MA.

 

49. The above construction of MA is supported by the following cases:

 

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(1) Salleh Abas FJ (as he then was) delivered the following judgment of the Federal Court in Ngui Mui Khin & Anor v Gillespie Bros & Co Ltd [1980] 2 MLJ 9, at p. 12 –

 

“At the outset we wish to observe that the [MA] does not apply to moneylending but only to moneylenders. It does not make every moneylending transaction illegal and unenforceable. It is only a moneylending transaction of a moneylender which is the subject-matter of [MA] and must comply with its provisions on pain of being declared illegal and unenforceable by the court. We make this simple and obvious observation because it was canvassed very strongly before us by counsel for the appellants that since the transactions between the respondents and the client are moneylending transactions, the respondents must be a moneylender and the guarantee which the appellants signed is therefore unenforceable. This submission overlooks the fact that the party to a transaction who thereby becomes the creditor may or may not be a moneylender ”

 

(emphasis added).

 

It is to be noted that Ngui Mui Khin was decided before the amendment of MA by way of Act A1193 and Act A1390 and yet, the Federal Court did not give a wide interpretation of MA to apply to all forms of moneylending transactions;

 

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(2) in Yeep Mooi v Chu Chin Chua & Ors [1981] 1 MLJ 14, at 15-16, Salleh Abas FJ held as follows in the Federal Court –

 

“We have on another occasion observed that the [MA] does not strike at moneylending but at moneylenders and at the loans lent by them. [MA] is never intended to apply to an individual, or any member of the public who lends money even at interest, unless he does so as a business. (Ngui Mui Khin & Anor v Gillespie Bros & Company Ltd [1980] 2 MLJ 9).”

 

(emphasis added);

 

(3) in Larut Matang Supermarket Sdn Bhd v Liew Fook Yung [1995] 1 MLJ 375, at 382 and 383, Abdul Malik Ishak J (as he then was) held as follows in the High Court –

 

“The defendant, on the other hand, failed to elicit an ounce of evidence to show that the plaintiff was in fact involved in the business of moneylending nor was there evidence adduced to show some degree of system and continuity in moneylending transactions. All that the defendant succeeded was to ask perfunctory questions like the amount of interest collected and whether the plaintiff had a moneylending licence, etc, etc. These would certainly be of little help to the defendant. The plaintiff here never advertised nor announced to the whole world or held itself

 

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out in any way whatsoever as carrying on a moneylending business. Thus, the plaintiff clearly falls under the category as described by Rigby J in Teng Ah Seah v Teh Choo Pheng 2 MC 253

 

in the following terms:

 

I am fully satisfied on the facts of this case that the transactions referred to in evidence were entirely without system or continuity, that the plaintiff never advertised or announced himself or held himself out in any way as carrying on a moneylending business. I am satisfied, therefore that he was not a moneylender within the meaning of the Ordinance and that he is accordingly entitled to judgment against the defendant.

 

… I venture to say that even if (and there is no evidence to support it) there is evidence that the plaintiff had occasionally lent money at a remunerative rate of interest, that would not be enough to establish that the plaintiff is engaged in the moneylending business. The defendant must prove further that there was some degree of system and continuity on the part of the plaintiff in the moneylending transactions (Edgelow v MacElwee [1918] 1 KB 205; Litchfield v Dreyfus [1906] 1 KB 584; and Newton v Pyke 25 TIR 127).

 

It is now an established law that [MA] does not strike at moneylending per se but at moneylenders and especially at the loans lent by it. It is also an established law that [MA] is not

 

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intended to apply to an individual or a company or any member of the public who lends money at an interest unless they do so as a business (Yeep Mooi v Chu Chin Chua & Ors [1981] 1 MLJ 14, FC and Ngui Mui Khin & Anor v Gillespie Bros & Co Ltd [1980] 2 MLJ 9, FC)”

 

(emphasis added);

 

(4) Vincent Ng J (as he then was) held as follows in the High Court case of Muhibbah Teguh Sdn Bhd v Yaacob Mat Yim [2005] 4 CLJ 853, at 861 –

 

“Thus, in my view, considering the express provisions in s. 2A(1)(h) read in conjunction with the definition of ‘moneylender’ in s. 2, the ratio affirmed by the Privy Council and our apex courts, namely, Ngui Mui Khin and Yeep Mui – which require proof that the lender was ‘carrying on the business of moneylending’, that entails ‘some degree of system and continuity in his moneylending transactions’ – accords with [MA] and should be adopted. Thus, if the lender adduces prima facie evidence that, at the material time of the transaction he was not a moneylender, the borrower clearly has two essential factual requirements to hurdle in his cause, namely:

 

(a) the loan was a moneylending transaction (the first hurdle); and

 

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(b) the lender was carrying the business of moneylender (the

 

second hurdle).”

 

(emphasis added); and

 

(5) my decision in MBF Factors Sdn Bhd v Hong Kim Confectioner

 

Sdn Bhd & Ors [2014] 1 LNS 1067, at paragraphs 45-47.

 

L. Did Datuk Chai carry on unlicensed moneylending business?

 

L(1). Presumption under s 10OA MA does not arise in this case

 

50. The question that now arises is whether Dr. Mansur has proven a single loan of RM6 million with interest by Datuk Chai so as to raise the rebuttable presumption under s 10OA MA that Datuk Chai is carrying on moneylending business.

 

51. I make a finding of fact that Datuk Chai had not lent RM6 million with interest to Dr. Mansur. This finding is based on the following evidence and reasons:

 

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(1) as testified by Datuk Kenny, the Legal Fees had been received by Messrs ALSS and could not constitute “interest’ as defined in s 2 MA as follows –

 

“ “interest” does not include any sum lawfully charged in accordance with this Act by a moneylender for or on account of stamp duties, fees payable by law and legal costs but, save as aforesaid, includes any amount by whatsoever name called in excess of the principal paid or payable to a moneylender in consideration of or otherwise in respect of a loan; ”

 

(emphasis added);

 

(2) as elaborated in the above paragraph 41, this court does not find Dr. Mansur to be a witness of truth. As such, Dr. Mansur’s oral testimony that Datuk Chai had lent RM6 million with interest to Dr. Mansur, could not be accepted; and

 

(3) I find that Datuk Chai is a credible witness (for reasons expressed in the above paragraph 42) and I thereby accept Datuk Chai’s evidence that the RM6 million was the price for the sale of BTP’s shares by Dr. Mansur to Datuk Chai and the deduction of the 1st Option Fee and Dr. Mansur’s 6 Payments constituted payments of the monthly Option Fees under the OA.

 

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52. The SMS’s tendered by Dr. Mansur did not show any demand by Datuk Chai or Datuk Chai’s nominees for interest to be paid by Dr. Mansur. The SMS’s only showed that Datuk Chai requested for payments of money. Such requests are understandable in view of the monthly Option Fees which were supposed to be paid by Dr. Mansur under the OA.

 

53. As Dr. Mansur could not prove that Datuk Chai had lent RM6 million with interest to Dr. Mansur, Dr. Mansur cannot rely on s 10OA MA (rebuttable presumption that Datuk Chai is carrying on moneylending business) in this case. Consequently, Dr. Mansur has to adduce evidence to prove that Datuk Chai had indeed carried on, advertised, announced himself or held himself out as carrying on moneylending business within the meaning of s 5(1) and (2) MA.

 

L(2). Datuk Chai did not carry out unlicensed monevlendinq business

 

54. Dr. Mansur had not adduced any evidence to prove that Datuk Chai had

 

(1) carried on;

 

(2) advertised;

 

(3) announced himself as carrying on; or

 

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(4) held himself out as carrying on

 

– moneylending business within the meaning of s 5(1) and (2) MA. Accordingly, I find as a fact that Dr. Mansur has failed to discharge the legal burden under ss 101(1), (2) and 102 EA to prove on a balance of probabilities that Datuk Chai had carried on a moneylending business. This means that ss 5(1) and 15 MA cannot apply to the 1st SSA and OA.

 

55. Even if this court assumes that a rebuttable presumption has arisen under s 10OA MA (whereby Datuk Chai is presumed to have carried on moneylending business), I find as a fact that Datuk Chai had adduced sufficient evidence to rebut such a presumption on a balance of probabilities. This is due to the undisputed evidence that Datuk Chai has his own construction and property development companies. In other words, there is irrefutable evidence that Datuk Chai carries on a legitimate business other than moneylending.

 

56. Once this court is satisfied that Datuk Chai did not carry on a moneylending business, the following ensues –

 

(1) there is no room for ss 5(1) and 15 MA to invalidate the 1st SSA and OA;

 

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(2) the fact that this court finds Encik Kamarudin lacks credibility (for reasons stated in the above paragraph 44), cannot invalidate the 1st SSA and OA under ss 5(1) and 15 MA; and

 

(3) Datuk Chai’s failure to call Mr. Chiam, Encik Mokhzani, Mr. Wong and Mr. Ho in this case, cannot impugn the 1st SSA and OA under ss 5(1) and 15 MA.

 

57. Guindarajoo (cited by Mr. Ravi) can be easily distinguished from this case because in Guindarajoo, the defendant/administrator of a deceased person’s estate did not give evidence or call any witness to rebut the plaintiff’s evidence that the plaintiff was entitled to the deceased person’s estate. In this case, Datuk Chai had given evidence himself and had also called Datuk Kenny to corroborate his testimony that the 1st SSA and OA were genuine transactions.

 

M. Adverse inference should be drawn against Dr. Mansur

 

58. In Munusamy v Public Prosecutor [1987] 1 MLJ 492, at 494, Mohd. Azmi SCJ has decided in the Supreme Court that the court may exercise its discretion to draw an adverse inference under s 114(g) EA against a party who has suppressed material evidence.

 

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59. I exercise my discretion under s 114(g) EA to make an adverse inference against Dr. Mansur for not calling Puan Hadijah to give evidence in this trial because –

 

(1) Puan Hadijah is a material witness in this case due to the following

 

evidence and reasons –

 

(a) Puan Hadijah’s Police Report had been made specifically against Datuk Chai. In fact, when Datuk Chai went to BTP’s office on 24.4.2013, Puan Hadijah had initially refused to meet Datuk Chai. Furthermore, the police was called to BTP’s office on that day and Datuk Chai had to explain to the police that he had not damaged BTP’s premises;

 

(b) Puan Hadijah was the company secretary for BTP at the material time. If Puan Hadijah was called by Dr. Mansur to testify in this case, more light could be shed on BTP’s breaches of s 7A(3) HDCLA and s 67(1) CA, to the detriment of Dr. Mansur; and

 

(c) throughout the trial, this court allowed Puan Hadijah to sit next to Mr. Ravi at the counsel’s table so as to assist Mr. Ravi’s conduct of this case for Dr. Mansur. If Puan Hadijah was not a material witness, Dr. Mansur would not have requested for the court’s leave for Puan Hadijah to sit next to Mr. Ravi at the counsel’s table; and

 

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(2) no evidence or explanation had been given as to why Puan Hadijah could not be called by Dr. Mansur to testify in this case. As such, this court is constrained to find as a fact that Dr. Mansur had suppressed the material evidence of Puan Hadijah.

 

N. Court cannot aid illegal transaction

 

60. Even if it is assumed that the 1st SSA and OA are illegal and unenforceable due to ss 5(1) and 15 MA, it is trite law that due to public policy considerations, the court will not come to the aid of a person whose cause of action is based on an illegal act – please see, eg., the Privy Council’s judgment delivered by Lord Denning In Palaniappa Chettiar v Arunasalam Chettiar [1962] MLJ 143, at 146, an appeal from Malaysia. In such a case, the court will allow the loss to lie where it falls. On this ground alone, the 2nd Counterclaim fails.

 

61. I have not overlooked s 66 of the Contracts Act 1950 [CA (1950)] which reads as follows:

 

“Obligation of person who has received advantage under void agreement, or contract that becomes void

 

66. When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under

 

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the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it ”

 

(emphasis added).

 

62. In Tan Chee Hoe & Sons Sdn Bhd v Code Focus Sdn Bhd [2014] 3 CLJ 141, at 165 and 170-172, Ramly Ali FCJ has decided in the Federal Court that the court has a discretion under s 66 CA (1950) to order restitution or compensation of any “advantage” received under a void contract.

 

63. In this case, I am not able to exercise my discretion to order any restitution or compensation for Dr. Mansur under s 66 CA (1950). My reasons are as follows:

 

(1) Datuk Chai had not received any advantage from Dr. Mansur in this case. On the contrary, Datuk Chai had taken over the onerous task of reviving the Project through KLNSB. There is therefore no room to apply s 66 CA (1950) in this case; and

 

(2) in the Federal Court case of Singma Sawmill Co Sdn Bhd v Asian Holdings (Industrialised Buildings) Sdn Bhd [1980] 1 MLJ 21, at

 

25, Raja Azlan Shah Ag CJ (Malaya) (as His Majesty then was) decided as follows –

 

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… Now, in the cases to which we have referred, there was an intention to use the subject-matter of the agreement for an unlawful purpose, and also an intention to make use of the lease or agreement for an unlawful purpose. The principles applicable to both cases are the same. In such cases any party to the agreement who has the unlawful intention is precluded from suing upon it. Ex turpis causa non oritur actio. The action does not lie; not for the sake of the defendant but because the court will not lend its assistance to such a plaintiff.

 

(emphasis added).

 

Based on Singma Sawmill Co Sdn Bhd, Dr. Mansur was clearly in pari delicto and was therefore barred by the doctrine of ex turpi causa non oritur actio from seeking any relief from this court under s 66 CA (1950).

 

O. Court’s discretion not to grant declarations prayed for in 2nd Counterclaim

 

64. The 2nd Counterclaim had prayed for various declaratory relief. It is clear that the court has a wide discretion to grant a declaration under s 41 of the Specific Relief Act 1950 (SRA) and Order 15 rule 16 of the Rules of Court 2012 (RC) – please see the judgment of Raja Azlan Shah Ag LP (as his Majesty then was) in the Federal Court case of Dato Menteri Othman bin Baginda & Anor v Dato Ombi Syed Alwi bin Syed Idrus [1981] 1 MLJ 29, at 31-32.

 

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65. Even if the 1st SSA and OA are invalidated by ss 5(1) and 15 MA, I have decided not to exercise my discretion under s 41 SRA and Order 15 rule 16 RC to grant the declarations sought by Dr. Mansur. This is due to the following reasons:

 

(1) BTP and KLNSB should be allowed to proceed to rehabilitate the Project in the interest of 463 Purchasers. The Purchasers are wholly innocent and their interest should be paramount in this case; and

 

(2) Dr. Mansur is not entitled to any relief because Dr. Mansur was privy to the following breaches in this case –

 

(a) breach of s 7A(3) HDCLA;

 

(b) contravention of s 67(1) CA; and

 

(c) Dr. Mansur’s Breach of Interlocutory Injunction.

 

P. Original Action should be allowed

 

66. In view of the above finding of fact that the 1st SSA and OA are genuine and enforceable agreements, upon the lapse of the Option Period –

 

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(1) Datuk Chai was absolutely entitled to BTP’s shares and could transfer BTP’s shares to Mr. Chiam (Datuk Chai’s nominee), Encik Mokhzani (Datuk Chai’s nominee) and Encik Kamarudin;

 

(2) Datuk Chai could appoint himself, Mr. Chong, Encik Mokhzani, Encik Asriman and Encik Kamarudin (in chronological order) as BTP’s directors;

 

(3) the resignations of Dr. Mansur and Puan Siti as BTP’s directors were valid; and

 

(4) Puan Hadijah’s resignation as BTP’s company secretary was valid.

 

P(1). Dr. Mansur had trespassed on BPT’s Land

 

67. I am satisfied that BTP had proven on a balance of probabilities that Dr.

 

Mansur had trespassed on BPT’s Land (Dr. Mansur’s Trespass). Such

 

a finding of fact is premised on the following evidence and reasons:

 

(1) Dr. Mansur had admitted during cross-examination and reexamination that Dr. Mansur was at the Site (BTP’s Land) on 12.9.2014 to show the boundaries of BTP’s Land to Datuk Kumar. On 12.9.2014, Dr. Mansur was no longer a director of BTP. Hence, Dr. Mansur had no authority or justification to enter BTP’s Land on 12.9.2014; and

 

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(2) Encik Muhammad had testified that Dr. Mansur had entered BTP’s Land with, among others, Datuk Kumar.

 

68. In view of Dr. Mansur’s Trespass, I grant the following relief to BTP:

 

(1) compensatory damages for any loss or damage suffered by BTP as a result of Dr. Mansur’s Trespass to be assessed by the learned Registrar pursuant to Order 37 rule 4(a) RC; and

 

(2) a perpetual injunction under s 51(2) SRA to restrain Dr. Mansur and Puan Siti from entering BTP’s Land.

 

I have ordered both the above relief against Puan Siti because she is Dr. Mansur’s nominee.

 

P(2). Dr. Mansur could not hold himself out as BTP’s director

 

69. Dr. Mansur could not hold himself out as a director of BTP because –

 

(1) as explained above, Dr. Mansur had already resigned as BTP’s director;

 

(2) Dr. Mansur can only act for BTP if there is express authorization by BTP, such as BTP’s Directors Resolution dated 31.10.2013 (which authorized Dr. Mansur to deal with Bank Rakyat in respect of Bank Rakyat’s Facilities); and

 

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(3) during cross-examination, Dr. Mansur admitted that he was aware that BTP had lodged Form 49 (regarding his resignation as BTP’s director), with SSM. As such, SSM’s records do not show that Dr. Mansur is a director of BTP. The following cases have decided that SSM’s records of a company’s directors, constitute constructive notice to the public regarding whether a person is a director of a company or otherwise –

 

(a) in KL Engineering Sdn Bhd & Anor v Arab Malaysian Finance Bhd [1994] 2 MLJ 201, at 207, 208 and 209, Mohamed Dzaiddin SCJ (as he then was) delivered the following judgment of the Supreme Court –

 

“In dealing with the first ground of appeal, the question is whether the common law doctrine of constructive notice extends to Form 49. In company law, constructive notice means that anyone dealing with a registered company is deemed to have notice of the contents of its public documents. According to Gower’s Principles of Modern Company Law (5th Ed, 1992) at p 170, ‘Precisely what that included was never wholly clear but it certainly included the memorandum and articles of association.’

 

However, the next important question is whether Form 49 comes within the category of public documents upon which

 

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persons dealing with the company is deemed to have notice of its contents.

 

The conclusion that follows from the above opinion, with which we respectfully agree, is that the common law doctrine of constructive notice should apply to Form 49. To reiterate, Form 49 is a public document which contains particulars of directors who are the mind and will of a company, as well as managers and secretaries who are responsible for the day-today running of the company. It is a document which affects the powers of the company and its agents. Certainly, its purpose must be more than just to provide information about the company’s directors, managers and secretaries. Therefore, persons dealing with the company should check with the Registrar of Companies who its directors, managers and secretaries are at any given time.

 

We hasten to add that as Form 49 (D14) is a public document to which the common law doctrine of constructive notice applies, the respondent, having been put upon inquiry of its content, but failed to check, must be presumed to have known that at the material time, James Kow Yuen Wah was not a director of the first appellant and was, therefore, not authorized to sign P7 on the company’s behalf.”

 

(emphasis added);

 

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(b) the judgment of Anantham Kasinather JCA in the Court of Appeal case of Tan See King & Anor v Anata Knitting Industry (M) Sdn Bhd [2013] 2 MLJ 284, at 288;

 

(c) Abdul Malik Ishak J’s (as he then was) decision in Malaysian International Merchant Bankers Bhd v Highland Chocolate and Confectionary Sdn Bhd & Anor (No 2)

 

[1998] 4 CLJ Supp 32, at p. 46;

 

(d) the judgment of Nallini Pathmanathan J (as she then was) in the High Court in CIMB Bank Bhd v ZAQ Construction Sdn Bhd [2013] 1 LNS 230, at paragraph 44; and

 

(e) my previous decision in NGV Tech Sdn Bhd & Anor v Ramsstech Ltd & Ors [2015] MLJU 165, at paragraph 165.

 

70. Section 11(2)(a) CA allows any person, including Dr. Mansur, on payment of prescribed fee, to inspect any document lodged with SSM. Under s 11(2)(c) CA, any person may request for a copy or extract of any document which he or she is entitled to inspect under s 11(2)(a) CA, to be given and certified by the ROC.

 

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71. Dr. Mansur and Puan Siti can apply to the Registrar of Companies (ROC) to rectify SSM’s records regarding BTP’s directors and if the ROC refuses to do so (ROC’s Refusal), Dr. Mansur and Puan Siti may appeal to the High Court against the ROC’s Refusal under s 11(10) CA. However, Dr. Mansur and Puan Siti did not avail themselves of this avenue.

 

72. Dr. Mansur had wrongfully held himself out as BTP’s director in Dr. Mansur’s Affidavit dated 28.2.2014. As such, I make the following orders:

 

(1) a declaration that Dr. Mansur and Puan Siti are not entitled to hold themselves out as directors of BTP; and

 

(2) a perpetual injunction is granted to restrain Dr. Mansur and Puan Siti from holding themselves out as BTP’s directors.

 

The above 2 orders are made against Puan Siti as Dr. Mansur’s nominee.

 

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P(3). Dr. Mansur had unlawfully interfered with BTP’s business

 

73. I find as a fact BTP has proven on a balance of probabilities that Dr. Mansur had unlawfully interfered with BTP’s business. Such a finding is based on the following evidence and reasons:

 

(1) Dr. Mansur had no authority to appoint Messrs NH. This is because Dr. Mansur had already resigned as BTP’s director. Furthermore, Messrs NH had entered into the Consent Order dated 5.5.2015 wherein Messrs NH had admitted that Messrs NH had no authority to act for BTP;

 

(2) Dr. Mansur had no authority to instruct Messrs NH to –

 

(a) settle the claims of BTP’s 5 Creditors; and

 

(b) act on behalf of BTP in a proposed joint venture with KPSCSB to revive the Project;

 

(3) Dr. Mansur had no authority to instruct Messrs LY to act for BTP in LWSB’s Suit. Dr. Mansur did not have the authority to instruct Messrs LY to file Dr. Mansur’s Affidavit dated 28.2.2014 in LWSB’s Suit;

 

(4) Dr. Mansur’s Breach of Interlocutory Injunction constituted an unlawful interference with BTP’s SPA’s with the Purchasers; and

 

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(5) Dr. Mansur’s Trespass had unlawfully interfered with BTP’s business when BTP’s security guards were “chased away” from the Site and BTP’s contractors and employees had been locked out when the main entrance to the Site had been locked by Datuk Kumar’s men (Locked Out Incident).

 

74. BTP had suffered loss and damage due to Dr. Mansur’s unlawful

 

interference in –

 

(1) instructing Messrs NH to settle the claims of BTP’s 5 Creditors;

 

(2) instructing Messrs LY in LWSB’s Suit wherein LWSB’s Judgment in the sum of RM155,515.87 had been obtained against BTP; and

 

(3) respect of the Locked Out Incident.

 

75. In view of Dr. Mansur’s unlawful interference with BTP’s business, the

 

following perpetual injunctions are ordered:

 

(1) a perpetual injunction is granted to restrain Dr. Mansur and Puan Siti from interfering in any manner with BTP’s business; and

 

(2) a perpetual injunction is ordered to restrain Dr. Mansur and Puan Siti from hindering or preventing BTP or any person engaged or employed by BTP from entering BTP’s Land.

 

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The above 2 injunctions are ordered against Puan Siti as Dr. Mansur’s nominee.

 

P(4). Dr. Mansur’s misrepresentation

 

76. Messrs SM’s Demand dated 26.5.2014 had been sent to Menara Bata Address because Encik Shaik had testified that Dr. Mansur had informed Encik Shaik that Dr. Mansur was still running BTP and BTP’s address was at Menara Bata Address. I find as a fact that Dr. Mansur had misrepresented matters concerning BTP which had caused loss and damage to BTP (Dr. Mansur’s Misrepresentation). Accordingly, I order compensatory damages for any loss or damage suffered by BTP as a result of Dr. Mansur’s Misrepresentation to be assessed by the learned Registrar. Such an order is also made against Puan Siti as she is Dr. Mansur’s nominee.

 

Q. Court’s decision

 

77. Premised on the above evidence and reasons, the following orders are made:

 

(1) in the Original Action –

 

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(a) a declaration that Dr. Mansur and Puan Siti are not entitled to hold themselves out as directors of BTP;

 

(b) a perpetual injunction to restrain Dr. Mansur and Puan Siti from holding themselves out as BTP’s directors;

 

(c) a perpetual injunction to restrain Dr. Mansur and Puan Siti from interfering in any way with BTP’s business;

 

(d) a perpetual injunction to restrain Dr. Mansur and Puan Siti from entering any part of the BTP’s Land;

 

(e) a perpetual injunction to restrain Dr. Mansur and Puan Siti from hindering or preventing BTP or any person engaged or employed by BTP from entering BTP’s Land;

 

(f) general damages for trespass to BTP’s Land to be assessed by the Registrar and shall be paid jointly and/or severally by Dr. Mansur and Puan Siti to BTP;

 

(g) general damages for misrepresentation to be assessed by this court and shall be paid jointly and/or severally by Dr. Mansur and Puan Siti to BTP;

 

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(h) interest at the rate of 5% per annum on assessed damages from the date of assessment until the date of full payment of assessed damages; and

 

(i) costs of the Original Action; and

 

(2) the 2nd Counterclaim is dismissed with costs.

 

78. I must commend all the learned counsel in this case for their high level of advocacy and their persuasive written submissions, without which this written judgment is not possible.

 

79. I end this judgment with the observation that Dr. Mansur had tried his level best, at great cost to himself and his wife, to complete the Project but to no avail.

 

WONG KIAN KHEONG

 

Judicial Commissioner High Court (Commercial Division) Kuala Lumpur

 

DATE: 20 JUNE 2016

 

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Counsel for Plaintiff: (Original Action)

 

Ms. Fiona Bodipalar & Ms. Thivina Kumaran (Messrs Bodipalar Ponnudurai De Silva)

 

Counsel for 1st & 2nd Defendants: (Original Action) Mr. Ravi Nekoo & Mr. Ganesh Magenthiran (Messrs Hakem Arabi & Associates)

 

Counsel for 4th Defendant: (Original Action) Dato’ Muhammad Adam bin Abdullah & Cik Aieshah Nadia bt. Masdar (Messrs Adam, Abdullah & Mani)

 

Counsel for Plaintiff: (1st Counterclaim) Dato’ Muhammad Adam bin Abdullah & Cik Aieshah Nadia bt. Masdar (Messrs Adam, Abdullah & Mani)

 

Counsel for Defendant: (1st Counterclaim) Ms. Fiona Bodipalar & Ms. Thivina Kumaran (Messrs Bodipalar Ponnudurai De Silva)

 

Counsel for Plaintiffs: (2nd Counterclaim) Mr. Ravi Nekoo & Mr. Ganesh Magenthiran (Messrs Hakem Arabi & Associates)

 

Counsel for 1st and 2nd Defendants: (2nd Counterclaim) Mr. David Mathews & Ms. Malarvilly Perumal (Messrs Mathews Hun Lachimanan)

 

Counsel for 3rd to 5th Defendants: (2nd Counterclaim) Ms. Fiona Bodipalar & Ms. Thivina Kumaran (Messrs Bodipalar Ponnudurai De Silva)

 

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