Between1. Maybank Investment Bank Berhad(Company No.: 15938-H)2. Malayan Banking Berhad(Company No.: 3813-K)3. Alliance Investment Bank Berhad(Company No.: 21605-D)4. Dbs Bank Limited(Company No.: 940031-C)5. Affin Bank Berhad(Company No.: 25046-T) … PlaintiffsAnd1. Million Westlink Sdn Bhd(Company No.: 1089796-U)2. Tan Sri Dato’ Lim Cheng Pow(I/C No.: 420401-71-5375) … Defendants(By Original Action)An

  

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

 

SUIT NO: 22NCC-163-06/2015

 

BETWEEN

 

1. MAYBANK INVESTMENT BANK BERHAD (COMPANY NO.: 15938-H)

 

2. MALAYAN BANKING BERHAD (COMPANY NO.: 3813-K)

 

3. ALLIANCE INVESTMENT BANK BERHAD (COMPANY NO.: 21605-D)

 

4. DBS BANK LIMITED (COMPANY NO.: 940031-C)

 

5. AFFIN BANK BERHAD

 

(COMPANY NO.: 25046-T) … PLAINTIFFS

 

AND

 

1. MILLION WESTLINK SDN BHD (COMPANY NO.: 1089796-U)

 

2. TAN SRI DATO’ LIM CHENG POW

 

(I/C NO.: 420401 -71 -5375) … DEFENDANTS

 

(By Original Action)

 

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AND BETWEEN

 

1. MILLION WESTLINK SDN BHD (COMPANY NO.: 1089796-U)

 

2. TAN SRI DATO’ LIM CHENG POW

 

(I/C NO.: 420401-71-5375) … PLAINTIFFS

 

AND

 

1. MAYBANK INVESTMENT BANK BERHAD (COMPANY NO.: 15938-H)

 

2. MALAYAN BANKING BERHAD (COMPANY NO.: 3813-K)

 

3. ALLIANCE INVESTMENT BANK BERHAD (COMPANY NO.: 21605-D)

 

4. DBS BANK LIMITED (COMPANY NO.: 940031-C)

 

5. AFFIN BANK BERHAD (COMPANY NO.: 25046-T)

 

6. UNIVERSAL TRUSTEE (MALAYSIA) BERHAD

 

(COMPANY NO.: 17540-T) … DEFENDANTS

 

(By Counterclaim)

 

JUDGMENT

 

(Court Enclosure Nos. 9, 11, 12 and 22)

 

A. Introduction

 

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1. This is a case concerning the aftermath of Gula Perak Bhd’s (GPB) insolvency and subsequent winding up. Two novel questions, among others, arise in this matter:

 

(a) whether a purchaser (Purchaser) of “Redeemable Convertible Secured Notes 2002/2007” issued by GPB (RCSN) and a guarantor (Guarantor) for this purchase of RCSN (Purchase) can apply for an interlocutory injunction to restrain –

 

(i) public auctions of lands (Charged Lands) charged under the National Land Code (NLC) when the High Court (HC) has ordered the sale of the Charged Lands; and

 

(ii) the enforcement of a HC judgment obtained against the Guarantor by way of execution and bankruptcy proceedings

 

– pending the disposal of a counterclaim by the Purchaser and Guarantor against the owners of RCSN (Vendors) and a trustee appointed under a trust deed to enforce the RCSN; and

 

(b) how should the court decide an application for summary judgment by the Vendors for, among others –

 

(i) a specific performance order (SP Order) of the unperformed part of the sale and purchase agreement of the RCSN (SPA)

 

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against the Purchaser (when the Purchaser has performed part of the SPA); or

 

(ii) alternatively, an order for the Purchaser to pay damages to the Vendors for breach of the SPA.

 

B. Background

 

B(1). RCSN

 

2. GPB is a company which has been previously listed on Bursa Malaysia (Bursa).

 

3. At the material time, the second defendant (2nd Defendant) was GPB’s managing director (MD). The 2nd Defendant only resigned as GPB’s MD on 6.5.2011.

 

4. Around July 2002, GPB issued RCSN with an aggregate nominal value of RM288,820,655.00 as part of GPB’s debt restructuring scheme with GPB’s secured creditors. The RCSN were then listed on Bursa.

 

5. The 5 plaintiff banks in this case (Plaintiffs) hold about 48.54% of the RCSN (Plaintiffs’ RCSN). The Plaintiffs are –

 

(a) Maybank Investment Bank Bhd. (formerly known as Aseambankers Malaysia Bhd.) (1st Plaintiff);

 

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(b) Malayan Banking Bhd. (2nd Plaintiff);

 

(c) Alliance Investment Bank Bhd. (3rd Plaintiff);

 

(d) DBS Bank Ltd. (4th Plaintiff); and

 

(e) Affin Bank Bhd. (5th Plaintiff).

 

6. On 11.12.2002, GPB entered into a trust deed (T rust Deed) with –

 

(a) Universal Trustee (M) Bhd (UTB), the sixth defendant in the counterclaim in this case (Counterclaim); and

 

(b) Signet Share Registration Services Sdn. Bhd. (SSRSSB).

 

7. The Trust Deed provided for, among others –

 

(a) paragraph (D) of the recital – UTB had agreed to act as trustee for the benefit of RCSN’s holders upon the terms and subject to the conditions in the Trust Deed;

 

(b) paragraph (E) of the recital – RCSN were constituted by the Trust Deed;

 

(c) clause 2.2(a) – GPB’s obligations, among others, under the RCSN to pay the principal sum or nominal value of RCSN together with any

 

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unpaid coupon (interest) on the “Maturity Date” (defined in clause 1.1 Trust Deed) shall be secured by the “Secured Assets” (defined in clause 1.1 Trust Deed to include “Charged Properties”); and

 

(d) clause 1.1 Trust Deed defines “Charged Properties” as the Charged Lands (all the lands described in Table A in Schedule 5 to the Trust Deed). The Charged Lands are –

 

(i) 2 lots of land in Kuala Lumpur (KL Lands) owned by GPB and charged under NLC;

 

(ii) 2 lots of land in Setapak, Kuala Lumpur (Setapak Lands) owned by GPB and charged under NLC;

 

(iii) lands in Batang Berjuntai, Selangor (Batang Berjuntai Lands) and Cheras, Hulu Selangor (Cheras Lands), all owned by GPB and charged under NLC;

 

(iv) 4 lots of land in Kuala Lumpur (Dynasty Hotel Land) owned by Dynawell Corporation (M) Sdn. Bhd. (DCSB) and charged under NLC; and

 

(v) 1 lot of land in Bandar Baru Salak Tinggi (Empress Hotel Land) owned by KSB Requirements & Rest Sdn. Bhd. (KSB) and charged under NLC.

 

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8. Two supplemental trust deeds were subsequently agreed as follows:

 

(a) the first supplemental trust deed dated 8.4.2005 (1st Supplemental Trust Deed) was agreed by GPB, UTB and SSRSSB. Clause 2.1 of the 1st Supplemental Trust Deed expressly provides that the Trust Deed still subsists; and

 

(b) the second supplemental trust deed dated 25.4.2007 (2nd Supplemental Trust Deed) was agreed by GPB, UTB and Tenaga Koperat Sdn. Bhd. (TKSB). By virtue of clause 2.1 of the 2nd Supplemental Trust Deed, the Trust Deed still applies. The 2nd Supplemental Trust Deed replaced SSRSSB with TKSB.

 

For the purpose of this case, nothing turns on the 1st and 2nd Supplemental Trust Deeds.

 

B(2). GBP’s default under RCSN

 

9. On 22.4.2007, GPB defaulted under the RCSN by reason of its failure to pay the coupon (interest) amounting to RM17,240,000.00. GPB also failed to redeem the RCSN on the “Maturity Date” on 22.4.2008.

 

10. As at 22.4.2008, GPB owed a total of RM327,472,217.14 to the RCSN holders.

 

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11. By reason of the aforesaid GPB’s default, RCSN had been delisted from Bursa on 29.4.2008.

 

12. The holders of RCSN gave notice to convene a meeting with UTB on 29.6.2010. On 29.6.2010, the RCSN holders passed the following 2 “ordinary resolutions” :

 

(a) GPB had committed an event of default under clause 14.1(a) Trust Deed and UTB was directed to give written notice to GPB declaring that the aggregate nominal value of RCSN then outstanding together with interest thereon, up to date of payment, was immediately payable by GPB; and

 

(b) UTB was directed to “take all actions against GPB to enforce the performance of GPB of its obligations” under the “Issue Documents” as defined under the Trust Deed, including “all necessary actions to obtain judgment and/or proceed with simultaneous enforcement of any of the Issue Documents”; and the RCSN holders would indemnify UTB (2nd Ordinary Resolution dated 29.6.2010).

 

B(3). New group of RCSN holders

 

13. The 2nd Defendant acquired 6,341,626 units of RCSN from Affin Bank Bhd. (Affin Bank) by way of, among others, a settlement agreement dated 20.4.2011 between the 2nd Defendant and Affin Bank.

 

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14. Pavilion Yields Sdn. Bhd. (PYSB) acquired the following units of RCSN:

 

(a) 85,720,189 units of RCSN from RHB Bank Bhd. (RHB Bank) by way of a sale and purchase agreement dated 24.9.2012 between PYSB and RHB Bank; and

 

(b) 31,685,263 units of RCSN from Ambank (M) Bhd. by way of a letter of offer dated 30.1.2013.

 

15. Greenpower Value Sdn. Bhd. (GVSB) acquired the following units of RCSN:

 

(a) 6,361,455 units of RCSN from CIMB Bank Bhd. (CIMB Bank) by way of a sale and purchase agreement dated 13.3.2013 between GVSB and CIMB Bank; and

 

(b) 14,269,893 units of RCSN from Malaysia Industrial Development Finance Bhd. (MIDF) by way of a sale and purchase agreement dated 9.10.2013 between GVSB and MIDF.

 

16. The 2nd Defendant, PYSB and GVSB hold a total of about 50.25% of RCSN while the Plaintiffs own about 48.54% RCSN. The remaining 1.2% RCSN are held by individuals and/or entities who have not taken any part or expressed any position in respect of the on-going matters in this case.

 

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B(4). Proceedings regarding Charged Lands (Charge Proceedings)

 

17. In respect of the Empress Hotel Land –

 

(a) the Shah Alam HC granted an order for sale on 18.1.2013 (Sale Order of Empress Hotel Land);

 

(b) on 23.9.2013, the Shah Alam HC dismissed an application by PYSB to intervene in the Charge Proceedings regarding Empress Hotel Land; and

 

(c) on 3.2.2014, the Shah Alam HC dismissed an application by PYSB, GVSB and the 2nd Defendant to intervene in the Charge Proceedings regarding Empress Hotel Land (Shah Alam HC’s Order dated 3.2.2014).

 

18. Regarding Dynasty Hotel Land –

 

(a) an order for sale of the Dynasty Hotel Land was given by the Kuala Lumpur HC on 11.9.2013 (Sale Order of Dynasty Hotel Land);

 

(b) on 6.2.2014, the Kuala Lumpur HC dismissed an application by PYSB, GVSB and the 2nd Defendant to intervene in the Charge Proceedings regarding Dynasty Hotel Land (Kuala Lumpur HC’s Order dated 6.2.2014);

 

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(c) on 20.2.2014, the Court of Appeal dismissed an application by PYSB to intervene in the appeal against the Sale Order of Dynasty Hotel Land; and

 

(d) the Kuala Lumpur High Court dismissed on 6.7.2015 an application by PYSB to intervene in the Charge Proceedings regarding Dynasty Hotel Land.

 

19. Concerning the KL Lands –

 

(a) on 4.3.2014, the Kuala Lumpur HC dismissed 3 applications to intervene in the Charge Proceedings regarding the KL Lands by –

 

(i) PYSB, GVSB and the 2nd Defendant;

 

(ii) Tan Sri Elyas bin Omar (TSEO); and

 

(iii) Plaintiffs

 

(3 Kuala Lumpur HC’s Orders dated 4.3.2014); and

 

(b) the sale of the KL Lands had been ordered by the Kuala Lumpur HC on 4.3.2014 (Sale Order of KL Lands).

 

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20. The Shah Alam HC has made an order for sale of the Batang Berjuntai and Cheras Lands on 17.3.2014 (Sale Order of Batang Berjuntai and Cheras Lands).

 

21. As regards Setapak Lands, the Land Administrator (LA) has fixed 18.8.2015 to hold a land enquiry under s 261(1) NLC on whether the LA should order a sale of the Setapak Lands or otherwise.

 

B(5). Winding up of GPB

 

22. On 1.3.2013, the Shah Alam HC wound up GPB.

 

B(6). Kuala Lumpur HC Civil Suit No. D5-22-1128-2008 (Suit No. 1128)

 

23. In Suit No. 1128, the 1st and 2nd Plaintiffs had obtained a judgment on 7.10.2013 against the 2nd Defendant (Put Option Judgment) as follows, among others –

 

(a) the 2nd Defendant had breached his obligations under the “Put and Call Option Agreement dated 11.12.2002;

 

(b) the 2nd Defendant to pay RM9,633,942.00 to the 1st Plaintiff within 14 days from the date of the Put Option Judgment with interest at the rate of 5% per annum calculated on this sum starting from 16.5.2008 until the date of full and final settlement;

 

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(c) the 2nd Defendant to pay RM2,264,483.00 to the 2nd Plaintiff within 14 days from the date of the Put Option Judgment with interest at the rate of 5% per annum calculated on this sum starting from 16.5.2008 until the date of full and final settlement; and

 

(d) the 1st and 2nd Plaintiffs within 14 days from the date of receipt of the above 2 sums, respectively carry out private transfer of RCSN belonging to the 1st and 2nd Plaintiffs, to the 2nd Defendant.

 

B(7). Kuala Lumpur HC Civil Suit No. 24NCC-134-04-2014 (Suit No-134)

 

24. In Suit No. 134, GVSB filed a suit against UTB, 5 Plaintiffs and PYSB.

 

25. On 11.4.2014, all the parties in Suit No. 134 entered into a consent order

 

[Consent Order] which provided, among others, as follows:

 

(a) UTB would vacate the auction of the Dynasty Hotel Land fixed on 4.4.2014 and UTB agreed not to file any fresh summons for directions in respect of auctions of Charged Lands belonging to GPB and GPB’s subsidiaries, until after 14.5.2014, and would not fix an auction date before 1.7.2014 (Paragraph 1 of Consent Order);

 

(b) the 2nd Defendant, GVSB, PYSB, DCSB, KSB, the Joint Management Body of Golden City Condominiums [JMB (GCC)], Mirage Point Sdn. Bhd. (MPSB), Kesenta Development Sdn. Bhd.

 

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(KDSB), TSEO, Leisure Group Hotels & Resorts Sdn. Bhd.

 

(LGHRSB) and/or parties related to the 2nd Defendant would –

 

(i) withdraw all stay and/or injunction applications without liberty to file afresh and with no order as to costs, filed to prevent any of the auctions in respect of the Charged Lands belonging to GPB and its subsidiaries, from proceeding;

 

(ii) undertake not to file any further stay and/or injunction applications to prevent any auctions from proceeding;

 

(iii) pursuant to Paragraph (b) of Consent Order, PYSB, GVSB and the 2nd Defendant shall withdraw appeal to the Court of Appeal against Shah Alam HC’s Order dated 3.2.2014 with no order as to costs and PYSB, GVSB and the 2nd Defendant shall withdraw the requisition for meeting of RCSN holders pursuant to the letters dated 8.4.2014; and

 

(iv) not file any fresh suits/actions in relation to the RCSN or the security, including the Charged Lands, to secure the RCSN so long as the parties are still negotiations on the buy-out of the RCSN. The provisions of this sub-paragraph shall also apply to UTB and the 5 Plaintiffs

 

(Paragraph 2 of Consent Order);

 

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(c) the 2nd Defendant, GVSB, PYSB, DCSB, KSB, JMB (GCC), MPSB, KDSB, TSEO and LGHRSB and/or parties related to the 2nd Defendant may continue with all existing appeals already filed at the Court of Appeal regarding any order for sale of the Charged Lands obtained by UTB and/or validity of such charges. However, any hearing dates for the existing appeals are only to be fixed after 2.6.2014 and no earlier. KDSB and TSEO may also continue with their actions as set out in paragraphs 9.1 and 9.2 of the Consent Order (Suit No. 134);

 

(d) 3 suits, including Suit No. 134, will be withdrawn with liberty to file afresh and without prejudice to any objections to such suits and with no order as to costs;

 

(e) the 2nd Defendant and/or parties related to the 2nd Defendant would negotiate a buy-out of RCSN held by the 5 Plaintiffs under a single agreement. Any concluded agreement is to be signed by 2.6.2014. Communications with the 5 Plaintiffs shall be through the Plaintiffs’ solicitors;

 

(f) the 2nd Defendant shall deposit RM1,000,000.00 with the Plaintiffs’ solicitors as stakeholders by 11.4.2014. In the event an agreement is signed for the purchase of RCSN from the Plaintiffs by 2.6.2014 or any extended date as may be agreed by the Plaintiffs, this sum of RM1,000,000.00 shall be applied and released towards the purchase consideration. In the event an agreement does not

 

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materialize by 2.6.2014 or any extended date as may be agreed by the Plaintiffs, this sum of RM1,000,000.00 shall be forfeited and released to the Plaintiffs on an ex gratia basis; and

 

(g) the 2nd Defendant, GVSB, PYSB, DCSB, KSB, JMB (GCC), MPSB, KDSB, TSEO and LGHRSB and/or parties related to the 2nd Defendant shall not interfere with the auction of land in Bandar Baru Salak Tinggi, Sepang, Selangor.

 

B(8). SPA dated 5.8.2014

 

26. The SPA had been entered by –

 

(a) the 5 Plaintiffs;

 

(b) the first defendant company (1st Defendant); and

 

(c) the 2nd Defendant.

 

The 1st and 2nd Defendants will be referred collectively in this judgment

 

as the Defendants.

 

27. The SPA provided, among others –

 

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(a) paragraph (D) of the recital – the Plaintiffs have agreed to sell the Plaintiffs’ RCSN to the 1st Defendant upon the terms and conditions contained in the SPA;

 

(b) clause 1.3 – no rule of construction applies to the disadvantage of a party because such a party is responsible for the preparation of the SPA. Accordingly, the Plaintiffs and Defendants have expressly agreed that the contra proferentem rule of construction does not apply to the SPA;

 

(c) clause 2.1 – the Plaintiffs have agreed to sell the Plaintiffs’ RCSN to the 1st Defendant at the total purchase price of RM146,458,246.20 (Purchase Price);

 

(d) paragraphs (a) to (e) of clause 2.2 provide for the payment of the Purchase Price in the following 5 instalments –

 

(i) the first payment of 10% of the Purchase Price amounting to RM14,645,824.62 (Deposit) shall be paid upon the execution of the SPA;

 

(ii) the second payment of 5% of the Purchase Price amounting to RM7,322,912.31 shall be paid on or before 29.8.2014 (2nd Payment);

 

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(iii) the third payment of 10% of the Purchase Price amounting to RM14,645,824.62 shall be paid on or before 31.10.2014 (3rd Payment);

 

(iv) the fourth payment of 25% of the Purchase Price amounting to RM36,614,561.55 shall be paid on or before 30.12.2014 (4th Payment); and

 

(v) the fifth payment of 50% of the Purchase Price amounting to RM73,229,123.10 (5th Payment) shall be paid on or before 31.3.2015 (Payment Completion Date);

 

(e) clause 2.3 – if the 1st Defendant is unable to pay the 5th Payment by the Payment Completion Date, the 1st Defendant shall be granted an extension of time up to 3 months from the Payment Completion Date (Extended Completion Period) subject to the fulfilment of 4 conditions specified in paragraphs (a) to (d) in clause 2.3;

 

(f) clause 2.4 – the ex gratia sum of RM1,000,000.00 paid by the 2nd Defendant under the Consent Order (Ex Gratia Sum) shall only be utilized towards payment of the 5th Payment by the Payment Completion Date or the Extended Completion Period and the Ex Gratia Sum (including interest earned thereon) shall be forfeited in the event the 1st Defendant defaults under any of the terms of the SPA;

 

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(g) clause 5.1 – the Charged Lands “may be redeemed subject to the following terms provided in paragraphs (a) to (g). I need to highlight the proviso to clause 5.1(a) SPA which states that the Charged Lands may be redeemed “provided that there is no default by the [1st Defendant]” under the SPA;

 

(h) clause 6.1 – the Put Option Judgment shall be settled on the terms provided in paragraphs (a) to (e) of clause 6.1 SPA. Paragraph (e) of clause 6.1 SPA has expressly provided that if there is a default under the SPA, the 1st and 2nd Plaintiffs “shall be entitled to enforce the Put Option Judgment against [the 2nd Defendant] for all sums due thereunder, in addition to any rights [the 1st and 2nd Plaintiffs] may have in connection with [the SPA]”;

 

(i) clause 7.1 – simultaneously with the execution of the SPA and in consideration of the premises in the SPA, the 2nd Defendant shall execute a guarantee in the format annexed as Schedule 5 to the SPA (Guarantee);

 

(j) clause 9.1 – in the event of default by the 1st Defendant and/or 2nd Defendant in respect of any single payment or any of the provisions of the SPA, a notice of default shall be issued to the 1st Defendant, giving the 1st Defendant 14 days to remedy such a default, failing which the Plaintiffs “shall forthwith and without any further reference to the [1st Defendant], be entitled to concurrently take the following actions provided always that the [Plaintiffs’] costs incurred in taking

 

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such actions are to be borne by the [1st Defendant] on a solicitor-client basis” –

 

(i) paragraph (a) of clause 9.1 SPA allows the Plaintiffs to “pursue [the 1st and 2nd Defendants] under [the SPA] and the Guarantee” for all sums due under the SPA and for the avoidance of doubt, payment of all sums due under the SPA shall become immediately due and payable upon default by the 2nd and/or 1st Defendant under the SPA; and

 

(ii) according to clause 9.1(b) SPA, the Plaintiffs may “continue with all recovery suits, including foreclosure proceedings in respect of the Charged Lands, to recover the original total amount outstanding under [RCSN] together with interest and all costs and expenses due and owing to the Plaintiffs”. Clause 9.4(a) SPA provides that the 2nd Defendant, GVSB and PYSB “shall upon the execution of [the SPA] furnish irrevocable written instructions addressed to [UTB] to proceed with foreclosure proceedings of the Charged Lands to recover the full outstanding sum under the RCSN, and [the 1st and 2nd Defendants, GVSB and PYSB] shall not file or take any action to restrain [UTB] from doing so in the event that there is any default of any single payment or any of the provisions of [the SPA]’;

 

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Clause 9.1 SPA also provides that for the avoidance of any doubt, the Plaintiffs shall remain the beneficial owners of the Plaintiffs’ RCSN until full settlement of the payments set out in the SPA;

 

(k) clause 9.2 – upon default of any single payment or any of the provisions of the SPA which is not remedied within the stipulated time, the Plaintiffs shall forfeit the Deposit and Ex Gratia Sum (and interest earned thereon);

 

(l) clause 9.5 – in the event of default by the Plaintiffs or any one of the Plaintiffs, a notice of default shall be issued to the Plaintiffs to remedy such a default, failing which the 1st Defendant shall forthwith be entitled to the remedy of specific performance. The proviso to clause 9.5 SPA states that “PROVIDED ALWAYS THAT there is no default by the [1st Defendant] under [the SPA] and the [1st Defendant] is ready, willing and able to comply with all its obligations under [the SPA]”;

 

(m) clause 10.1(b) – each party expressly warrants and represents to the other parties that the SPA “constitutes, or when executed will constitute, the legal, valid and binding obligations” of the party in accordance with its terms;

 

(n) clause 11.1 – any payment made to the Plaintiffs or UTB “shall be non-refundable”;

 

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(o) clause 11.3 – time “shall be deemed to be of the essence” of the SPA;

 

(p) clause 11.6 – knowledge or acquiescence of any party of any breach of the SPA “shall not operate as or be deemed to be a waivef’ of such a breach and “notwithstanding such knowledge or acquiescence”, each party “shall be entitled to exercise its respective rights” under the SPA and “to require strict performance” by the other parties of the terms, conditions and covenants in the SPA; and

 

(q) clause 11.9 – the SPA “constitutes the sole and entire agreement between the Parties in relation to its subject matter and supersedes all prior agreements and understandings, whether oral or written, with respect to such subject matter and it is hereby expressly declared that no variations shall be effective unless made by the Parties in writing”.

 

B(9). Guarantee executed by 2nd Defendant on 5.8.2014

 

28. The 2nd Defendant executed the Guarantee in the format annexed as Schedule 5 to the SPA (as provided in clause 7.1 SPA). The Guarantee provided, among others –

 

(a) clause 1.2 defines “Guaranteed Sum” as, among others, the sums payable under the SPA (Guaranteed Sum);

 

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(b) clause 1.4 – no rule of construction applies to the disadvantage of a party because such a party is responsible for the preparation of the Guarantee. As such, the non-application of the contra proferentem rule of interpretation had been agreed by the Plaintiffs and 2nd Defendant;

 

(c) clause 2.1 – the 2nd Defendant “irrevocably and unconditionally agrees, undertakes with and guarantees” to the Plaintiffs as a “continuing obligation” –

 

(i) the due, punctual and full performance by the 1st Defendant of its obligations and liability to pay the Guaranteed Sum under the SPA [clause 2.1(a) Guarantee]; and

 

(ii) that in the event of any default by the 1st and/or 2nd Defendant under the SPA which is not remedied pursuant to a notice of default issued by the Plaintiffs pursuant to the SPA, the 2nd Defendant will pay “on demand” by the Plaintiffs llall sums due and unpaid’ to the Plaintiffs under the SPA within 14 days of the Plaintiffs’ demand [clause 2.1(b) Guarantee];

 

(d) clause 2.2 – as between the 2nd Defendant and the Plaintiffs, the 2nd Defendant “shall be liable” as if the 2nd Defendant is the “sole principal obligor’ and not merely as a surety. Clause 26 Guarantee further states that as a separate and independent stipulation, the 2nd

 

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Defendant shall be liable under the Guarantee as a “principal debtor’ and not merely as a guarantor;

 

(e) clause 2.3 – the 2nd Defendant “acknowledges and confirms” that upon any default under the SPA, the 1st and 2nd Plaintiffs “shall be entitled to enforce the Put Option Judgment against the 2nd Defendant for all sums remaining due thereunder;

 

(f) clauses 3(a), (c) and 6.1 – the Guarantee shall be in addition to and without prejudice to any other security to which the Plaintiffs are entitled in respect of the Guaranteed Sum;

 

(g) clause 3(b) – the Guarantee “shall be a continuing security’ notwithstanding any partial or intermediate settlement of any part of the Guaranteed Sum;

 

(h) clause 4.1(a) – the Plaintiffs shall have full power at any time without discharging the 2nd Defendant’s liability under the Guarantee or in any way affecting or prejudicing the Guarantee or the Plaintiffs’ rights under the Guarantee to give time for payment or grant any other indulgence, waiver or consent from time to time to the 1st Defendant and/or the 2nd Defendant;

 

(i) clause 5.1 – the 2nd Defendant expressly agrees and declares that unless the Plaintiffs otherwise agree in writing, the 2nd Defendant shall not be discharged or released from the 2nd Defendant’s

 

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obligations under the Guarantee until all sums payable by the 1st Defendant under the SPA have been received by the Plaintiffs;

 

(j) clause 8.2 – nothing in the Guarantee shall be taken as negating or prejudicing any right of set-off, debiting, combination, consolidation or merger of accounts and/or lien or other right to which the Plaintiffs are at any time entitled against the 2nd Defendant;

 

(k) clause 10 – the 2nd Defendant shall indemnify and keep the Plaintiffs fully indemnified against all claims, demands, actions, proceedings, losses, damages, costs and expenses including legal costs (on a solicitor and client and full indemnity basis) and all other liabilities of whatsoever nature or description which may be made, taken, incurred or suffered by the Plaintiffs consequent upon the entering into or the acceptance of the Guarantee and/or in connection with the Guarantee and/or as a result of default or delay in payment by the 2nd Defendant of the Guaranteed Sum;

 

(l) clause 14 – a certificate by an authorized officer of each of the Plaintiffs as to the indebtedness for the time being due by the 1st Defendant and/or the 2nd Defendant to the Plaintiffs shall, in the absence of manifest error, be binding on and conclusive against the 1st Defendant and/or the 2nd Defendant for all purposes and shall be conclusive evidence against the 1st Defendant and/or the 2nd Defendant in all courts of law;

 

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(m) clause 23 – time wherever mentioned shall be deemed to be and treated as of the essence of the Guarantee; and

 

(n) clause 27 – the 2nd Defendant confirms, represents and warrants to the Plaintiffs that in the execution of the Guarantee, the 2nd Defendant –

 

(i) has sought, obtained and relied upon the 2nd Defendant’s own advice (including legal advice) and has not relied upon any representation, statement or advice from the solicitors, agents or officers of the Plaintiffs and 1st Defendant; and

 

(ii) is fully aware of, consents to, understands and approves the contents, effect, legal implications and consequences of the Guarantee.

 

B(10). 2nd Defendant’s instruction dated 5.8.2014 to UTB (2nd Defendant’s Instruction dated 5.8.2014)

 

29. The 2nd Defendant’s Instruction dated 5.8.2014 stated, among others –

 

(a) sub-paragraph 2(a) – pursuant to the SPA, the 2nd Defendant irrevocably instructed and authorized UTB to, among others, to withhold foreclosure proceedings in respect of the Charged Lands until –

 

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(i) 31.3.2015 (Payment Completion Date under the SPA) or 30.6.2015 (Extended Completion Period under the SPA), as the case may be; or

 

(ii) UTB’s receipt of written notice from the Plaintiffs that there is a subsisting default under the SPA which has not been remedied by the 1st Defendant pursuant to a notice of default issued by the Plaintiffs to the 1st Defendant pursuant to the SPA;

 

(b) sub-paragraph 3(a) – pursuant to the SPA, the 2nd Defendant irrevocably instructed and authorized UTB, upon UTB’s receipt of written notice from the Plaintiffs that there is a subsisting default under the SPA which has not been remedied by the 1st Defendant pursuant to a notice of default issued by the Plaintiffs to the 1st Defendant pursuant to the SPA, to continue with all recovery actions, including foreclosure proceedings in respect of the Charged Lands, to recover the original total amount outstanding under the Plaintiffs’ RCSN and the 2nd Defendant “shall not file or take any action to restrain [UTB] from doing so”;

 

(c) sub-paragraphs 4(a) and (b) – in consideration of UTB complying with the 2nd Defendant’s Instruction dated 5.8.2014, the 2nd Defendant irrevocably agree and undertake to fully and completely indemnify UTB against all actions, proceedings, claims, demands and all other liabilities of whatsoever nature or description which may be made or taken or incurred or suffered by UTB; and

 

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(d) paragraph 5 – the 2nd Defendant recognizes that nothing in the 2nd Defendant’s Instruction dated 5.8.2014 shall detract from the powers of UTB under the Trust Deed.

 

B(11). 1st Defendant’s default under SPA

 

30. The 1st Defendant had paid the Deposit and made the 2nd as well as the 3rd Payments.

 

31. On 30.12.2014, the 1st Defendant forwarded a cheque for the 4th Payment to the Plaintiffs’ solicitors, Messrs Shook Lin & Bok (Messrs SLB), but this cheque was dishonoured ( Dishonoured Cheque).

 

32. Messrs SLB wrote a letter dated 5.1.2015 (Messrs SLB’s Letter dated

 

5.1.2015) to the then solicitors for the 1st Defendant, Messrs Ranjit Ooi & Robert Low (Messrs RORL) which stated, among others –

 

(a) in view of the Dishonoured Cheque, the 1st Defendant had defaulted in respect of the 4th Payment (1st Defendant’s Default); and

 

(b) Messrs SLB gave notice to the 1st Defendant to remedy the 1st Defendant’s Default within 14 days from the date of delivery of Messrs SLB’s Letter dated 5.1.2015, failing which the Plaintiffs “shall forthwith and without any further reference to the [1st Defendant] be

 

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entitled to concurrently take all actions and exercise all remedies available to the [Plaintiffs] under the terms of the SPA and the law”.

 

33. By way of Messrs RORL’s letter dated 19.1.2015 (Messrs RORL’s Letter dated 19.1.2015), the 1st Defendant requested for an extension of time to remedy the 1st Defendant’s Default.

 

34. In Messrs SLB’s letter dated 28.1.2015 (Messrs SLB’s Letter dated

 

28.1.2015), the Plaintiffs agreed to extend time until 6.2.2015 for the 1st Defendant to remedy the 1st Defendant’s Default provided certain conditions are met.

 

35. The 1st Defendant failed to rectify the 1st Defendant’s Default on 6.2.2015.

 

36. The 1st Defendant requested for a second extension of time up to 3.4.2015 to remedy the 1st Defendant’s Default by way of Messrs RORL’s letter dated 6.2.2015 (Messrs RORL’s Letter dated 6.2.2015).

 

37. By way of Messrs SLB’s letter dated 17.2.2015 (Messrs SLB’s Letter dated 17.2.2015), the Plaintiffs agreed to grant another extension of time for the 1st Defendant to remedy the 1st Defendant’s Default provided additional conditions were fulfilled by the 1st Defendant.

 

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38. Messrs RORL’s letter dated 23.2.2015 (Messrs RORL’s Letter dated

 

23.2.2015) sought a third extension of time to remedy the 1st Defendant’s Default but the Plaintiffs refused such a request by way of Messrs SLB’s letter dated 24.2.2015 (Messrs SLB’s Letter dated 24.2.2015).

 

C. Legal proceedings

 

C(1). Plaintiffs’ suit (This Suit)

 

39. Messrs SLB sent a demand dated 24.2.2015 to the 2nd Defendant

 

(Messrs SLB’s Demand dated 24.2.2015) which stated, among others,

 

as follows:

 

(a) the 1st Defendant’s Default had occurred and the Plaintiffs had given notice to the 1st Defendant to remedy the 1st Defendant’s Default;

 

(b) the 1st Defendant had failed to remedy the 1st Defendant’s Default;

 

(c) the Plaintiffs had forfeited the Deposit and the Ex Gratia Sum (together with interest earned) and such forfeited sums did not form part of the payments towards the Purchase Price; and

 

(d) based on the Guarantee, the Plaintiffs demanded the 2nd Defendant to pay a total outstanding sum of RM124,489,509.27 payable under the SPA to the Plaintiffs.

 

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40. Messrs SLB sent 2 demands dated 25.3.2015 to Messrs RORL and the 1st Defendant (Messrs SLB’s 2 Demands dated 25.3.2015) which demanded, among others, the 1st and 2nd Defendants to pay a total outstanding sum of RM124,489,509.27 payable under the SPA to the Plaintiffs within 14 days from the date of Messrs SLB’s Demand dated 25.3.2015, failing which the Plaintiffs would proceed with legal action against the 1st and 2nd Defendants, including specific performance of the SPA.

 

41. The Plaintiffs filed This Suit against the 1st and 2nd Defendants and the statement of claim (SOC) prayed for the following relief:

 

(a) as against the 1st Defendant –

 

(i) a SP Order, in whole or in part, of the SPA whereby the 1st Defendant shall pay the balance of the Purchase Price of RM124,489,509.27 (Balance Purchase Price) to the Plaintiffs in a certain manner; or

 

(ii) in the alternative, the 1st Defendant to pay damages for breach of the SPA in the sum of the Balance Purchase Price to the Plaintiffs;

 

(b) as against the 2nd Defendant, the 2nd Defendant to pay the Balance Purchase Price to the Plaintiffs in a certain manner;

 

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(c) the 1st and 2nd Defendants do jointly and severally pay to each of the 5 Plaintiffs interest on the Balance Purchase Price from the date of the summary judgment until the date of full payment; and

 

(d) costs on a solicitor-client basis.

 

C(2). Defendants’ Defence and Counterclaim

 

42. The Defendants denied This Suit and filed the Counterclaim against the 5 Plaintiffs and UTB.

 

43. In the Defence and Counterclaim, the Defendants alleged, among others, as follows:

 

(a) the Consent Order, SPA and Guarantee formed a settlement agreement among the Plaintiffs (Alleged Settlement Agreement). The intention of the Alleged Settlement Agreement was to settle the sum outstanding to the Plaintiffs under the RCSN and to allow the Defendants to preserve the core assets of GPB, in particular GPB’s hotel assets;

 

(b) clause 5.1 SPA provided for an “alternative mechanism” for the Defendants to redeem the Charged Lands by way of sale of the Charged Lands by private treaty (Alleged Redemption Mechanism). The Alleged Redemption Mechanism was to enable

 

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the sale of the Charged Lands so as assist the Defendants in “mobilizing the funds towards meeting the deadlines imposed for the instalment payments” under the SPA;

 

(c) around 20.10.2014, UTB received an inquiry from Bank Islam Malaysia Bhd. (BIMB) as a prospective financier for a third party who was interested to purchase the Empress Hotel Land (BIMB’s Inquiry). UTB informed the holders of RCSN of BIMB’s Inquiry. The 2nd Defendant had on or about 24.10.2014 given instructions to UTB to release the relevant information to BIMB so as to facilitate the proposed sale of Empress Hotel Land. UTB however took the position that a majority of 75% of the units of RCSN was needed to release the relevant information to BIMB (75% Majority Requirement).

 

The 75% Majority Requirement is not provided in the Trust Deed and SPA. According to clause 10.1 SPA, both the Plaintiffs and UTB have an obligation to co-operate with the Defendants and/or take necessary steps to ensure any potential sale by way of the Alleged Redemption Mechanism. On or about 28.10.2014, GVSB, PYSB and the 2nd Defendant had collectively given instructions to UTB to release the relevant information to BIMB. Nonetheless, UTB still insisted on the 75% Majority Requirement.

 

Between 28.10.2014 and 3.11.2014, the 3rd and 5th Plaintiffs imposed an additional “arbitrary condition” by requiring the request

 

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to be made by the chargor of the Empress Hotel Land (KSB) and not by BIMB. In the circumstances, the Defendants procured a letter dated 5.11.2014 from KSB to request UTB to release the relevant information to BIMB. However, UTB was adamant on the fulfilment of the 75% Majority Requirement. Accordingly, as early as October 2014 and latest by November 2014, UTB had breached the express and/or implied terms of the SPA by not releasing relevant information to BIMB. Consequently, the third party purchaser could not obtain financing from BIMB to purchase the Empress Hotel Land and the third party purchaser was no longer interested in such a purchase;

 

(d) UTB acted as a trustee and agent for the Plaintiffs. Had UTB observed its role in an unbiased and independent manner, the sale of the Empress Hotel Land would have been completed and the Defendants would be able to comply with the stipulated timeline for the 4th Payment;

 

(e) the Plaintiffs and UTB had breached the Alleged Settlement Agreement by UTB’s failure to release relevant information to BIMB;

 

(f) the Plaintiffs’ forfeiture of the Deposit and Ex Gratia Sum was unlawful;

 

(g) as the Plaintiffs had breached the SPA in respect of BIMB’s Inquiry, the Plaintiffs’ notice of default was invalid and time was no longer of

 

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the essence of the SPA. As such, the time to perform the SPA, is now at large;

 

(h) the concurrent action by –

 

(i) UTB in proceeding with the Charge Proceedings; and

 

(ii) the 2 bankruptcy proceedings in Kuala Lumpur HC Nos. 29NCC-1816-03/2015 and 29NCC-1816-03/2015 commenced by the 1st and 2nd Plaintiffs respectively against the 2nd Defendant based on the Put Option Judgment (2 Bankruptcy Cases)

 

– is mala fide, an abuse of court process and/or unconscionable;

 

(i) the Plaintiffs and UTB are estopped from proceeding with the above concurrent action as the Plaintiffs have affirmed the SPA by seeking for a SP Order of the SPA and in the circumstances, the Defendants’ right to sell the Charged Lands by way of the Alleged Redemption Mechanism can be similarly enforced;

 

(j) UTB had breached its duty of care and/or fiduciary duties and/or statutory duties and/or trust obligations owed to the 1st and/or 2nd Defendants and/or holders of RCSN (Alleged Breaches by UTB);

 

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(k) the Plaintiffs had dishonestly and/or knowingly assisted, aided, abetted and/or was an accessory to the Alleged Breaches by UTB;

 

(l) the Plaintiffs and UTB had conspired with the sole or pre-dominant intention of injuring the Defendants and/or of causing the Defendants to breach the Alleged Settlement Agreement and/or the SPA;

 

(m) the Plaintiffs and UTB, whether jointly and/or severally, with intent of interfering with the Defendant’s contractual rights, had induced the Defendants to breach the SPA; and

 

(n) the Defendants prayed for the following relief in the Counterclaim, among others –

 

(i) a declaration that –

 

(1) the Plaintiffs and/or UTB have breached the Consent Order and/or SPA and/or Guarantee;

 

(2) the Defendants are entitled to stop the 4th Payment;

 

(3) the Plaintiffs’ notices of default issued to the Defendants are null and void;

 

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(4) timeline for the performance of the Consent Order and/or SPA and/or Guarantee is now at large;

 

(5) the Plaintiffs have unlawfully and unilaterally forfeited the Deposit and Ex Gratia Sum and the Defendants are entitled to be restored such sums or such sums are to be taken into account towards the Purchase Price;

 

(6) UTB has unlawfully proceeded with the Charge Proceedings;

 

(7) the Plaintiffs and UTB are required to facilitate and/or assist the Defendants in the exercise of the Alleged Redemption Mechanism;

 

(8) the 1st and 2nd Plaintiffs have unlawfully proceeded with the enforcement of the Put Option Judgment;

 

(9) UTB has breached its duty of care and/or fiduciary duties and/or statutory duties and/or trust obligations owed to the 1st and/or 2nd Defendants and/or holders of RCSN; and

 

(10) the Plaintiffs had dishonestly and/or knowingly assisted, aided, abetted and/or was an accessory to the Alleged Breaches by UTB;

 

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(ii) an order that the Defendants be allowed to perform their obligations under the Consent Order and/or SPA and/or Guarantee within 8 months from the date of this judgment or such other timeline as directed by this court;

 

(iii) an order that time for the performance of the Consent Order and/or SPA and/or Guarantee is to commence from the date of this judgment or such other commencement date as directed by this court;

 

(iv) an order that the Plaintiffs and/or UTB do perform their obligations under the Consent Order and/or SPA and/or Guarantee and/or do cause to be done all acts necessary to be done and/or otherwise facilitate the Defendants in the completion of the Consent Order and/or SPA and/or Guarantee;

 

(v) an injunction to restrain UTB, its servants, agents or representatives, from proceeding with the Charge Proceedings pending the Completion Date or until such time as this court deems fit;

 

(vi) an injunction to restrain or prohibit the 1st and 2nd Plaintiffs, their servants, agents or representatives, from proceeding with or continuing with the enforcement of the Put Option Judgment pending the Completion Date or until such time as this court deems fit;

 

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(vii) damages, general and/or aggravated and/or equitable, to be assessed and paid by the Plaintiffs and/or UTB to the Defendants;

 

(viii) interest on the assessed damages; and

 

(ix) costs.

 

C(3). 4 applications

 

44. The following applications have been filed in this case:

 

(a) in court enclosure no. 9, UTB applied to strike out the Counterclaim with costs on an indemnity basis (Court Enc. No. 9);

 

(b) the Plaintiffs filed application in court enclosure no. 11 to strike out the Counterclaim with costs (Court Enc. No. 11);

 

(c) in court enclosure no. 12 (Court Enc. No. 12), the Plaintiffs applied for –

 

(i) pursuant to Order 81 of the Rules of Court 2012 (RC), a final judgment to be entered against the 1st Defendant for –

 

(1) a SP Order, in whole or in part of the SPA whereby the 1st Defendant shall pay the Balance Purchase Price of

 

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RM124,489,509.27 within 14 days from the date of this order in the following manner –

 

(IA) RM51,061,357.47 to the 1st Plaintiff;

 

(IB) RM12,002,103.48 to the 2nd Plaintiff;

 

(IC) RM14,809,103.46 to the 3rd Plaintiff;

 

(ID) RM18,252,141.75 to the 4th Plaintiff; and

 

(IE) RM28,364,803.11 to the 5th Plaintiff;

 

(2) alternatively, the 1st Defendant shall pay damages for breach of the SPA to the Plaintiffs within 14 days from the date of this order in the manner prayed for in the above sub-paragraphs (i)(1)(1A) to (1E); and

 

(3) the Defendants do jointly and severally pay to each of the 5 Plaintiffs interest on each of the sums set out in the above sub-paragraphs (i)(1)(1A) to (1E) at the rate of 5% per annum from the date of this judgment to date of full payment;

 

(ii) pursuant to Order 14 RC, a final judgment to be entered against the 2nd Defendant for –

 

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(1) the Balance Purchase Price to be paid to the Plaintiffs within 14 days from the date of this order in the manner prayed for in the above sub-paragraphs (i)(1)(1A) to (1E); and

 

(2) the Defendants do jointly and severally pay to each of the 5 Plaintiffs interest on each of the sums set out in the above sub-paragraphs (i)(1)(1A) to (1E) at the rate of 5% per annum from the date of this judgment to date of full payment; and

 

(iii) the Defendants to pay costs on a solicitor-client basis; and

 

(d) the Defendants applied in court enclosure no. 22 (Court Enc. No.

 

22) for, among others –

 

(i) pending the disposal of This Suit, an injunction to restrain UTB from proceeding or continuing with any and/or the Charge Proceedings, including but not limited to proceeding with the public auctions fixed on –

 

(1) 7.9.2015 for the KL Lands;

 

(2) 10.9.2015 for the Empress Hotel Land;

 

(3) 6.10.2015 for the Dynasty Hotel Land; and

 

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(4) 29.9.2015 for the Batang Berjuntai and Cheras Lands

 

(Public Auctions);

 

(ii) pending the disposal of This Suit, an injunction to restrain the 1st and 2nd Plaintiffs from proceeding or continuing with any enforcement of the Put Option Judgment, whether by bankruptcy proceedings or otherwise; and

 

(iii) costs in the cause.

 

45. In view of the impending Public Auctions, I propose to all learned counsel to hear first Court Enc. No. 22 and then to decide the following applications in this order:

 

(a) Court Enc. No. 9;

 

(b) Court Enc. No. 11; and

 

(c) Court Enc. No. 12.

 

All the learned counsel agreed to the above proposal.

 

D. Court Enc. No. 22

 

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D(1). Principles applicable to Court Enc. No. 22

 

46. In deciding Court Enc. No. 22, I will consider the following questions –

 

(a) whether the Defendants have raised at least one bona fide and serious question to be tried in respect of the Counterclaim – please see the Supreme Court’s judgment delivered by Mohd. Jemuri Serjan CJ (Borneo) in Alor Janggus Soon Seng Trading Sdn Bhd & Ors v Sey Hoe Sdn Bhd & Ors [1995] 1 MLJ 241, at 252-253. In this regard, I shall refrain from making any finding of fact as I cannot embark on a trial on affidavits, especially when there are conflicting affidavits – Alor Janggus Soon Seng Trading Sdn Bhd, at p. 266. Nor should I express any view on the strength or weakness of each party’s case – Alor Janggus Soon Seng Trading Sdn Bhd, at p. 266;

 

(b) whether damages constitute an adequate remedy for the Defendants. If damages is a sufficient remedy for the Defendants, Court Enc. No. 22 should be dismissed on this ground alone -please see the Supreme Court’s judgment given by Hashim Yeop Sani CJ (Malaya) in Associated Tractors Sdn Bhd v Chan Boon Heng & Anor [1990] 1 CLJ (Rep) 30, at 32;

 

(c) whether the balance of convenience or balance of justice lies in favour of the grant or refusal of the interlocutory restraining

 

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injunction applied for in Court Enc. No. 22 – Alor Janggus Soon Seng Trading Sdn Bhd, at p. 266; and

 

(d) is there any policy or equitable consideration which militates against the grant of an interim restraining injunction in favour of the Defendants in this case? (Alor Janggus Soon Seng Trading Sdn Bhd, at p. 266).

 

D(2). Contentions by Defendants

 

47. In support of Court Enc. No. 22, the 1st Defendant’s learned counsel, Mr. Mark Ho, submitted that there was a prima facie abuse of court process by the Plaintiffs which should be restrained by the grant of an interlocutory injunction in favour of the 1st Defendant. Reliance has been placed on the following 3 Court of Appeal cases –

 

(a) Westform Far East Sdn Bhd v Connaught Heights Sdn Bhd & other appeals [2010] 3 MLJ 459;

 

(b) Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 CLJ 295; and

 

(c) BSNC Leasing Sdn Bhd v Sabah Shipyard Sdn Bhd & Ors

 

[2000] 2 MLJ 70.

 

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48. Dato’ K. Kirubakaran, the 2nd Defendant’s learned counsel advanced the following contentions to support Court Enc. No. 22:

 

(a) the Consent Order, SPA and Guarantee collectively formed the Alleged Settlement Agreement whereby the 1st Defendant would purchase the Plaintiffs’ RCSN and allow the Defendants to preserve the core assets of GPB. The 2nd Defendant cited the Court of Appeal’s judgment in Glamour Green Sdn Bhd v Ambank Bhd & Ors & Anor Appeal [2007] 3 CLJ 413;

 

(b) there are 11 serious issues to be tried as follows –

 

(i) whether the primary purpose for the Defendants to purchase the Plaintiffs’ RCSN and enter into the Alleged Settlement Agreement, was to settle the indebtedness to the Plaintiff and discharge the Charged Lands for the Defendants and/or their nominees (1st Alleged Issue);

 

(ii) whether the Defendants are at all material times, ready, willing and able to perform their obligations pursuant to the Alleged Settlement Agreement upon the reciprocal performance of the same by the Plaintiffs and/or UTB (2nd Alleged Issue);

 

(iii) whether the Plaintiffs and/or UTB had, whether jointly or severally, as early as October 2014, breached the express and/or implied terms of the Alleged Settlement Agreement, in

 

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particular the terms of the SPA, including but not limited to clause 10 SPA, by refusing to co-operate with the Defendants and/or by preventing the Defendants from exercising their right to sell the Charged Lands via the Alleged Redemption Mechanism (3rd Alleged Issue);

 

(iv) whether the Plaintiffs and/or UTB, jointly or severally, had breached the SPA and/or induced the Defendants to breach the SPA (4th Alleged Issue);

 

(v) whether due to the breach of the SPA by the Plaintiffs and/or UTB or the inducement of the Plaintiffs and/or UTB for the Defendants to breach SPA, time was no longer the essence of the SPA and had become at large (5th Alleged Issue);

 

(vi) whether the concurrent actions by the Plaintiffs and/or UTB, namely This Suit, Charge Proceedings and/or enforcement of the Put Option Judgment is mala fide and/or an abuse of court process and/or unconscionable conduct and/or the Plaintiffs and UTB are estopped from enforcing the same (6th Alleged Issue);

 

(vii) whether UTB had breached its duty of care and/or fiduciary duties and/or statutory duties and/or trust obligations owed to the 1st and/or 2nd Defendants and/or holders of RCSN (7th Alleged Issue);

 

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(viii) whether the Plaintiffs had dishonestly and/or knowingly assisted, aided, abetted and/or were accessories to the Alleged Breaches by UTB (8th Alleged Issue);

 

(ix) whether the Plaintiffs and UTB had on or before 31.12.2014 conspired and/or combined together wrongfully, with the sole or pre-dominant intention of injuring the Defendants and/or of causing the Defendants to breach the Alleged Settlement Agreement and in particular, to cause the Defendants to fail to make the 4th Payment pursuant to the SPA (9th Alleged Issue);

 

(x) whether the Plaintiffs and UTB, whether jointly and/or severally, with intent of interfering with the Defendant’s contractual rights, induced the Defendants to fail to make the 4th Payment (10th Alleged Issue); and

 

(xi) whether the Plaintiffs’ forfeiture of the Deposit and Ex Gratia Sum is unconscionable and invalid pursuant to ss 74 and/or 75 of the Contracts Act 1950 (CA) (11th Alleged Issue);

 

(c) whether the Plaintiffs by electing to apply for a SP Order of the SPA and UTB by proceeding with the Charge Proceedings, are exercising 2 inconsistent rights and/or remedies and are therefore in breach of the “business efficacy rule” as held by the Federal Court in

 

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Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pek Leong [1998] 3 MLJ 151;

 

(d) whether by reason of the Plaintiffs’ conduct in electing to pursue a SP Order, UTB is estopped from pursuing the Charge Proceedings. Reliance has been placed on the Federal Court’s decision in Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565;

 

(e) if the Defendants can prove that the Plaintiffs and/or UTB have breached the Alleged Settlement Agreement, the Plaintiffs and/or UTB should not be allowed to take advantage of their own breach. The Defendants rely on the Federal Court’s judgment in Poon Guan Sdn Bhd v Sem Siong Industries Sdn Bhd [1983] 2 MLJ 317;

 

(f) the balance of convenience lies in favour of the grant of an interlocutory injunction. The Defendants cited the English High Court case of Re a company [1985] BCLC 80;

 

(g) a court may grant an injunction even if the injunction may impact proceedings in a court of co-ordinate jurisdiction. Reliance has been placed on the following cases –

 

(i) the High Court case of Bina Satu Sdn Bhd v Tan Construction [1988] 1 MLJ 533;

 

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(ii) the Supreme Court’s judgment in Esso Petroleum Malaysia Inc v Kago Petroleum Sdn Bhd [1995] 1 MLJ 149;

 

(iii) the High Court’s decision in Noresah bte Lani v RHB Bank Bhd [2006] 7 MLJ 378 (Noresah); and

 

(iv) the High Court case of Cekal Berjasa Sdn Bhd v Malaysia Building Society Bhd [2005] 3 MLJ 646 (Cekal Berjasa Sdn Bhd); and

 

(h) the Defendants had paid RM36.6 million, a substantial sum towards the purchase of the Plaintiffs’ RCSN, amounting to approximately 25% of the Purchase Price. In the premises, the Defendants should be granted an interlocutory injunction as in the Supreme Court case of Lai Soon Cheong v Kien Loong Housing Development Sdn Bhd & Anor [1986] 2 MLJ 369 (Lai Soon Cheong).

 

D(3). Terminology

 

49. In Jambatan Merah Sdn Bhd (in liquidation) v Public Bank Bhd (No

 

1) [2015] AMEJ 212, [2014] 1 LNS 1657, at paragraphs 25-27, I express the view that since our NLC embodies the Torrens system of registration of titles and interest in land, I will use the NLC terms of “charge proceedings” and “discharge” in this judgment rather than the Common Law terms of “foreclosure proceedings” and “redemption”.

 

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D(4). No Alleged Settlement Agreement

 

50. I am unable to accept the existence, let alone the enforcement, of the Alleged Settlement Agreement. My reasons are as follows:

 

(a) clause 11.9 SPA has expressly provided that the SPA “constitutes the sole and entire agreement between the Parties in relation to its subject matter and supersedes all prior agreements and understandings, whether oral or written, with respect to such subject matter and it is hereby expressly declared that no variations shall be effective unless made by the Parties in writing” (Entire Agreement Clause). Clause 11.9 SPA clearly negates the existence of the Alleged Settlement Agreement. The following cases have given effect to Entire Agreement Clause –

 

(i) in the Court of Appeal case of Master Strike Sdn Bhd v Sterling Heights Sdn Bhd [2005] 2 CLJ 596, at 607-608, Nik Hashim JCA (as he then was) has held that an “entire agreement’ clause “constitutes a binding agreement between [the parties] with regard to all matters mentioned in the contract and … the contract does not permit any term to be implied or import any other consideration not in the contract’;

 

(ii) Abdul Aziz J’s (as he then was) decision in the High Court case of Macronet Sdn Bhd v RHB Bank Bhd [2002] 4 CLJ 729, at 735-736; and

 

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(iii) the judgment of Mohd. Ariff Md. Yusof J (as he then was) in the High Court case of Koh Tian Boo v Tengku Ibrahim Petra bin Tengku Indra Petra [2013] 2 AMCR 541, at 550-551;

 

(b) ss 91 and 92 of the Evidence Act 1950 (EA) provide that no evidence, oral and documentary, can be adduced by any party to contradict, vary, add to or subtract from the terms and conditions of a written contract – 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 227-228. As such, terms of the Consent Order and Guarantee cannot be adduced by the Defendants to contradict, vary, add to or subtract from the terms and conditions of SPA;

 

(c) the Consent Order has limited effect on UTB as is clear from Paragraph 1 of the Consent Order. According to Paragraph 1 of the Consent Order, UTB would not fix any Public Auction before 1.7.2014. The Consent Order did not restrain UTB from proceeding with the Public Auctions in any manner on or after 1.7.2014. Furthermore, the Consent Order was made on 11.4.2014, 3 months 23 days (115 days) before the SPA was concluded on 4.8.2014. The Consent Order could not therefore be read together with the SPA; and

 

(d) clauses 3(a), (c) and 6.1 Guarantee provide that the Guarantee shall not prejudice any security to which the Plaintiffs are entitled. Clearly,

 

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the Guarantee cannot restrict in any manner the Charge Proceedings.

 

51. As there is no Alleged Settlement Agreement, the 1st to 3rd and 9th Alleged Issues do not arise in this case. Hence, there is no need to try the 1st to 3rd and 9th Alleged Issues in respect of the Counterclaim.

 

52. The Alleged Settlement Agreement has not been raised in any of Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015. The Alleged Settlement Agreement was only raised for the very first time in the Counterclaim after This Suit has been filed by the Plaintiffs. Accordingly, the Alleged Settlement Agreement is an afterthought which is not made in good faith. There is therefore no bona fide issue to be tried in respect of the Alleged Settlement Agreement.

 

D(5). No Alleged Redemption Mechanism

 

53. The SPA did not provide for the Alleged Redemption Mechanism as claimed by the Defendants. This decision is premised on the following reasons:

 

(a) paragraph (d) of the recital and clause 2.1 SPA provided for the 1st Defendant to acquire the Plaintiffs’ RCSN at the Purchase Price which was to be paid by way of the Deposit and 5 instalments within specified dates as stated in clause 2.2(a) to (e) SPA. Clause 2.3(a) to (d) SPA provided for an Extended Completion Period if 4

 

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specified conditions are fulfilled cumulatively. One of the 4 conditions for an Extended Completion Period is that the 1st Defendant had not defaulted on any term of the SPA [clause 2.3(d) SPA]. The following contemporaneous documentary evidence (in chronological order) clearly proved the 1st Defendant’s Default:

 

(i) the Dishonoured Cheque;

 

(ii) Messrs SLB’s Letter dated 5.1.2015;

 

(iii) Messrs RORL’s Letter dated 19.1.2015;

 

(iv) Messrs SLB’s Letter dated 28.1.2015;

 

(v) Messrs RORL’s Letter dated 6.2.2015;

 

(vi) Messrs SLB’s Letter dated 17.2.2015;

 

(vii) Messrs RORL’s Letter dated 23.2.2015; and

 

(viii) Messrs SLB’s 2 Demands dated 25.3.2015.

 

In light of the 1st Defendant’s Default, the 1st Defendant was not entitled to an Extended Completion Period under clause 2.3(d) SPA;

 

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(b) the SPA did not provide for the Purchase Price or any part of the Purchase Price to be paid by way of the sale proceeds of the Charged Lands by private treaty. Clause 5.1 SPA only provides a directory and not a mandatory method to discharge the Charged Lands. This is clear from the parties’ use of the directory term “may’ instead of the imperative term “shall’. On a true construction of clause 5.1 SPA, the Defendants have no right to an Alleged Redemption Mechanism, let alone the right to use the proceeds from any sale of the Charged Lands by private treaty to pay the Purchase Price or any part of the Purchase Price. Any right of the Defendants to an Alleged Redemption Mechanism, would be contrary to –

 

(i) clause 2.2(a) to (e) SPA which provided for specified dates for the payment of the Deposit and the 1st to 5th Payments; and

 

(ii) clause 2.3 SPA which allowed an Extended Completion Period only if 4 specific conditions are met by the 1st Defendant; and

 

(c) in any event, the proviso to clause 5.1 SPA makes it clear that any discharge of the Charged Lands under clause 5.1 SPA is only possible if there is no default by the 1st Defendant under the SPA. As explained above, in view of the 1st Defendant’s Default, no reliance could be placed by the Defendants on clause 5.1 SPA.

 

54. Clauses 10.1(a) to (d) and 10.2 SPA did not provide for the Alleged Redemption Mechanism. Clauses 10.1(a) to (d) and 10.2 SPA merely

 

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concerned warranties and representations given by the parties to the SPA.

 

55. As the SPA did not provide for the Alleged Redemption Mechanism, the 3rd and 4th Alleged Issues do not arise in the Counterclaim and need not be tried in this case.

 

56. Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015 did not allude to the Alleged Redemption Mechanism. The Alleged Redemption Mechanism was first raised in the Counterclaim after the filing of This Suit by the Plaintiffs. The Alleged Redemption Mechanism is therefore an afterthought which is not made in good faith. Consequently, there is no bona fide issue to be tried in respect of the Alleged Redemption Mechanism.

 

D(6). No Alleged Breaches by UTB

 

57. I am of the view that according to paragraph (D) of the Trust Deed, UTB only owes –

 

(a) duties as trustees (which are fiduciary in nature); and

 

(b) case law duty of care

 

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– to all RCSN holders, including the Plaintiffs, 2nd Defendant, PYSB and GVSB. As UTB owes fiduciary and case law duty of care to, among others, the Plaintiffs, UTB cannot be the agent or nominee of the Plaintiffs. If UTB were the agent or nominee of the Plaintiffs, UTB would have breached the fiduciary duty by being in a position wherein UTB’s fiduciary duties to all RCSN holders are in conflict with UTB’s obligations as the Plaintiffs’ agent or nominee.

 

58. UTB does not owe any statutory duty to any party. The Defendants have not referred to any statutory provision which has imposed a statutory duty on UTB.

 

59. Contrary to the Defendants’ submission, UTB does not owe any –

 

(a) fiduciary duty; and

 

(b) case law duty of care

 

– to the 1st Defendant. This is due to the following reasons –

 

(i) the 1st Defendant is not a holder of RCNS and has not acquired the Plaintiffs’ RCSN due to the 1st Defendant’s Default. Clause 9.1 SPA has expressly provided that for the avoidance of any doubt, the Plaintiffs shall remain as the beneficial owners of the Plaintiffs’ RCNS until full payment of the Purchase Price as set out in the SPA has been made. The Defendants have not cited any provision in the

 

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Trust Deed which imposes any duty on UTB which is owed to the 1st Defendant. The Defendants’ contention that UTB owes fiduciary duty and case law duty of care to the 1st Defendant, is contrary to the express terms of the Trust Deed which only imposes trustee’s duties on UTB which are only owed to all the holders of RCSN; and

 

(ii) UTB is neither party nor privy to the SPA. Even if there is no 1st Defendant’s Default, both the Defendants cannot enforce the SPA against UTB by reason of the application of the doctrine of privity of contract. I rely on 3 decisions of our apex courts as follows which have enforced strictly the doctrine of privity of contract –

 

(1) the Privy Council’s decision delivered by Lord Wilberforce in an appeal from Malaysia, Kepong Prospecting Ltd & Ors v Schmidt [1968] 1 MLJ 170, at 174;

 

(2) the judgment of Gopal Sri Ram JCA (as he then was) in the Federal Court case of Badiaddin bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393, at 431; and

 

(3) the Federal Court’s judgment delivered by Ahmad Fairuz CJ in Suwiri Sdn Bhd v Government of the State of Sabah

 

[2008] 1 MLJ 743, at 751-752.

 

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In Pancaran Gayabina Sdn Bhd v Chew Yong See [2015] 3 AMR 480, at 494, I have expressed the view that Malaysia has no legislation equivalent to the Contracts (Privity) Act 1982 (New Zealand) and Contracts (Rights of Third Parties) Act 1999 (United Kingdom) which confer a right on a person who is not a party to a contract (Third Party) to enforce the contract if the contract expressly provides that the Third Party may do so or if the contract confers a benefit on the Third Party.

 

60. For the above reasons, the 1st Defendant has no cause of action based on the Trust Deed to file the Counterclaim against UTB.

 

D(7). 2nd Ordinary Resolution dated 29.6.2010 and UTB’s insistence

 

on 75% Majority Requirement

 

61. Paragraph 18 of Schedule 3 to the Trust Deed [Paragraph 18 (Schedule 3)] provides as follows:

 

“ 18. Binding Effect of Resolution

 

A resolution passed at a meeting of the Holders duly convened and held in accordance with these presents shall be binding upon all the Holders whether present or not present at the meeting and each of the Holders for which the meeting was held and the Trustee (subject to the provisions for its indemnity contained in the Trust Deed) shall be bound to give effect thereto accordingly. The passing of any such resolution shall be

 

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conclusive evidence that the circumstances of any such resolution justify the passing thereof,

 

(emphasis added).

 

Paragraph 18 (3rd Schedule) has mandatory effect because the imperative term “shall’ has been used in that provision. Paragraph 18 (3rd Schedule) has the following mandatory effect:

 

(a) the 2nd Ordinary Resolution dated 29.6.2010 is binding on all holders of RCSN, including the 2nd Defendant, PYSB and GVSB;

 

(b) UTB “shall be bound to give effect’ to the 2nd Ordinary Resolution dated 29.6.2010; and

 

(c) the passing of the 2nd Ordinary Resolution dated 29.6.2010 “shall be conclusive evidence” of the circumstances which justify the passing of the 2nd Ordinary Resolution dated 29.6.2010.

 

In the High Court case of Brett Andrew Macnamara v Kam Lee Kuan

 

[2008] 7 CLJ 625, at 631-632 and 632-633, Balia Yusof Wahi J (as he then was) has decided that when the terms of a trust deed are clear and unambiguous, “it is not the court’s business to go behind those written terms or read new terms to it’.

 

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62. In respect of whether UTB could insist on 75% Majority Requirement to reply to BIMB’s Inquiry, the following provisions in the Trust Deed are relevant:

 

“33.2 Trustee’s Rights to Pursue Remedies: Only the Trustee

 

may pursue the rights and remedies available under the general law or under these presents to enforce the rights of the Holders against [GPB]. No Holders will be entitled to pursue such remedies against [GPB] to enforce the performance of any of the provisions of these presents and the [RCSN], unless the Trustee having bound to do so in accordance with the terms of the special resolution of the Holders …

 

Schedule 1 (Part 2)

 

9.1 Modification: The Holders may by special resolution (as

 

defined in Schedule 3 to the Trust Deed) sanction (inter alia) any modification or compromise of their rights and consent to any modification of the Trust Deed….

 

[paragraph 9.1 (Schedule 1)]

 

Schedule 3

 

2 Notice

 

“Special Resolution” means a resolution passed at a meeting of Holders duly convened and held in accordance with the provisions contained in these presents and carried

 

by a majority consisting of not less than three-fourths

 

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(3/4th) of the persons voting thereat upon a show of hands of if a poll is duly demanded, by a majority consisting of not less than three-fourths (3/4th) of the votes given on such poll [paragraph 2 (Schedule 3)]

 

17 Special Resolution Items

 

A meeting of the Holders shall in addition to all other powers have the following powers exercisable by Special Resolution only, that is to say:-

 

(c) the power to sanction the release of [GPB] … from the payment of all or any part of the nominal value or face value owing upon [RCSN] other monies payable pursuant to these presents;

 

(d) the power to sanction any modification, abrogation or compromise of or arrangement in respect of the rights of the Holders against [GP] … whether such rights shall arise under the Trust Deed or otherwise;

 

[Sub-paragraphs 17(c) and (d) (Schedule 3)]”

 

(emphasis added).

 

63. I am of the view that UTB’s insistence on the need of a special resolution to be passed by 75% of RCSN’s holders, is justified on the following grounds:

 

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(a) according to clause 33.2 Trust Deed, only UTB may pursue the rights and remedies available under the law and the Trust Deed. To respond to BIMB’s Inquiry (regarding the possibility of selling the Empress Hotel Land by private treaty) is part of the exercise of UTB’s rights and remedies within the meaning of clause 33.2 Trust Deed. Under clause 33.2 Trust Deed, any RCSN holder may only request UTB to exercise its rights and remedies by a “special resolution” which requires a 75% majority of RCSN’s holders [please see Paragraph 2 (Schedule 3)];

 

(b) BIMB’s Inquiry concerns the possibility of selling the Empress Hotel Land by private treaty. If this sale by private treaty is successful, this will have the effect of –

 

(i) modifying or compromising the rights of the RCSN holders within the meaning of Paragraph 9.1 (Schedule 1) and Subparagraph 17(d) (Schedule 3) which requires a special resolution to be passed by 75% majority of RCSN’s holders; and/or

 

(ii) sanctioning the release of GPB from the payment of all or any part of the nominal value or face value owing under the RCSN whereby Sub-paragraph 17(c) (Schedule 3) requires a special resolution to be passed by 75% majority of RCSN’s holders;

 

and/or

 

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(c) if UTB does not obtain a special resolution before responding to BIMB’s Inquiry, UTB may be vulnerable to a claim that UTB has breached the above provisions in the Trust Deed.

 

64. There is another reason why UTB’s insistence on 75% Majority Requirement cannot be challenged by the 2nd Defendant. This is because of clause 22.1(c) Trust Deed which provides as follows:

 

“Powers of Trustee

 

22.1 Powers of Trustee: The Trustee shall have all the powers conferred on trustees hereunder by the Trustee Act 1949, and by any general law and as the holder of [RCSN] and by way of supplement thereto it is expressly declared as follows:-

 

(c) Power of Determination: the Trustee shall as between itself and the Holders and all persons claiming under or through them have full power to determine all questions and doubts arising in relation to any of the provisions of these presents and every determination, whether made upon a question actually raised or implied in the acts or proceedings of the Trustees, shall be conclusive and binding on all such persons

 

(emphasis added).

 

By reason of clause 22.1(c) Trust Deed, UTB’s insistence on a special resolution in respect of BIMB’s Inquiry, “shall be conclusive and binding”

 

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on the 2nd Defendant and “all persons claiming under or through” the 2nd Defendant. As decided in Brett Andrew Macnamara, I should give effect to clause 22.1(c) Trust Deed.

 

65. On 12.12.2014, the holders of RCSN unanimously passed 2 amended special resolutions which, among others, authorized UTB to sell the Empress Hotel Land by private treaty (2 Special Resolutions). The 2nd Defendant had not claimed that the 2 Special Resolutions are invalid. Nor did the Counterclaim challenge the validity of the 2 Special Resolutions. In the circumstances, the 2nd Defendant as a holder of RCSN is estopped from challenging UTB’s insistence on the “special resolution” requirement – please see Gopal Sri Ram JCA’s (as he then was) judgment in the Federal Court case of Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 4 CLJ 283, at 294.

 

66. In view of the above reasons, by insisting on 75% Majority Requirement

 

(a) UTB has not breached any fiduciary duty (including duties as trustee) and case law duty of care which is owed to RCSN holders (including the 2nd Defendant). As such, the 7th Alleged Issue need not be tried in respect of the Counterclaim;

 

(b) as there were no Alleged Breaches by UTB, the Plaintiffs could not be said to have dishonestly and/or knowingly assisted, aided,

 

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abetted and/or were accessories to the Alleged Breaches by UTB. Hence, the 8th Alleged Issue does not arise in the Counterclaim;

 

(c) there was no act and/or omission on the part of UTB which could constitute a conspiracy with the Plaintiffs to injure the Defendants and/or to interfere with the Defendants’ contractual rights. This is because UTB’s action in this case is lawful and is based on the 2nd Ordinary Resolution dated 29.6.2010; and

 

(d) there is no evidence that UTB is involved in any manner with the 1st Defendant’s Default. As such, UTB had not induced the 1st Defendant’s Default and had not committed the tort of inducing the 1st Defendant to breach the SPA.

 

D(8). No issue to be tried in respect of Plaintiffs

 

67. The Defendants had submitted that the Plaintiffs were the cause why the Empress Hotel Land could not be sold by private treaty to Jewel View Sdn. Bhd. (JVSB). I am not able to accede to such a contention for the following reasons:

 

(a) the 1st Defendant has the contractual obligation to make the 2nd to 5th Payments on or before dates specified in clause 2.2(b) to (e) SPA. By reason of ss 91 and 92 EA, such a contractual obligation on the 1st Defendant’s part cannot be contradicted, varied, added or

 

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subtracted by any proposal to purchase the Charged Lands by way of private treaty; and

 

(b) by way of a letter dated 21.1.2015 from BIMB to JVSB (BIMB’s Letter dated 21.1.2015), BIMB informed JVSB that BIMB was unable to “accommodate” JVSB’s application for banking facility (JVSB’s Facility Application), presumably to purchase the Empress Hotel Land. BIMB’s Letter dated 21.1.2015 did not state the reason for rejecting JVSB’s Facility Application. As such, there was no evidence that the Plaintiffs were the cause for the rejection of JVSB’s Facility Application. BIMB as a financier has the absolute prerogative to allow JVSB’s Facility Application or not.

 

68. The Defendants have not adduced any evidence that the Plaintiffs have breached SPA. As such, the 5th Alleged Issue does not arise in this case.

 

69. As the Plaintiffs have not breached the SPA, time is still the essence of the SPA according to clause 11.3 SPA. Hence, contrary to the Defendants’ submission, time under the SPA has not become at large.

 

70. I am not able to find any act and/or omission on the Plaintiffs’ part which has induced the 1st Defendant to breach the SPA. This is simply because the 1st Defendant is solely responsible for the Dishonoured Cheque and its attendant consequences. Accordingly, the 10th Alleged Issue need not be tried in this case.

 

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71. There is no evidence of any interference by the Plaintiffs with the exercise of the 1st Defendant’s contractual rights under the SPA. This is because as explained above, the 1st Defendant is the sole author of its own misfortune by way of the 1st Defendant’s Default.

 

72. As elaborated above, UTB is a trustee which is independent of the Plaintiffs. I do not find any evidence of conspiracy between the Plaintiffs and UTB to injure the Plaintiffs, especially when the 1st Defendant’s Default has occurred much earlier in time and the 1st Defendant has asked for 3 extensions of time to make the 4th Payment by way of Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015.

 

73. The 11th Alleged Issue concerns the validity of the Plaintiffs’ forfeiture of the Deposit and Ex Gratia Sum under ss 74 and/or 75 CA. I am of the view that the 11th Alleged Issue does not arise in this case because –

 

(a) upon the 1st Defendant’s Default, clauses 2.4, 9.2(a) and (b) SPA allow the Plaintiffs to forfeit the Deposit and Ex Gratia Sum. Furthermore, clause 11.1 SPA provides that any payment made to the Plaintiffs “shall be non-refundable

 

(b) s 74 CA concerns recoverability and quantum of damages upon a breach of contract. Section 74 CA reads as follows –

 

“Compensation for loss or damage caused by breach of contract

 

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74(1) When a contract has been broken, the party who suffers by the breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from the breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.

 

(2) Such compensation is not to be given for any

 

remote and indirect loss or damage sustained by reason of the breach ”

 

(emphasis added).

 

In this case, the Defendants have not adduced any evidence that the Plaintiffs have breached the SPA. In any event, forfeiture of the Deposit and Ex Gratia Sum is not “compensation for loss or damage caused by breach of contract’ within the meaning of s 74 CA; and

 

(c) s 75 CA provides as follows –

 

“Compensation for breach of contract where penalty stipulated

 

for

 

75. When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled,

 

whether or not actual damage or loss is proved to have

 

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been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for .”

 

(emphasis added).

 

Section 75 CA applies in a situation when the contract in question has expressly provided for a sum of money to be payable in the event of a breach of the contract (Penalty Sum). In this case, the Plaintiffs had not breached the SPA. Furthermore, the SPA did not provide for a Penalty Sum in the event of a breach of the SPA. Lastly, forfeiture of the Deposit and Ex Gratia Sum does not constitute a Penalty Sum to attract the application of s 75 CA.

 

D(9). Concurrent action by Plaintiffs and UTB after 1st Defendant’s Default

 

74. The 6th Alleged Issue avers that the concurrent actions by the Plaintiffs (This Suit and 2 Bankruptcy Cases) and UTB (Charge Proceedings) (3 Concurrent Actions) is mala fide, an abuse of court process, unconscionable and/or the Plaintiffs and UTB are estopped from proceeding on 3 Concurrent Actions.

 

75. In this case, there is clear unrebutted evidence of the 1st Defendant’s Default in the form of the Dishonoured Cheque. The 1st Defendant’s

 

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Default is fortified by the failure of the 1st Defendant to deny Messrs SLB’s 2 Demands dated 25.3.2015. In a commercial setting where parties are legally represented, the failure of a party to reply to a solicitor’s demand is most telling. I rely on the 2 Court of Appeal cases as follows:

 

(a) in David Wong Hon Leong v Noorazman bin bin Adnan [1995] 4 CLJ 155, at 159, the Court of Appeal decided in a judgment by Gopal Sri Ram JCA (as he then was) as follows –

 

“During argument, we registered our surprise at the learned Judge’s reluctance to enter judgment for this sum of RM100,000. After all, the appellant had failed to respond to the letter of 17 December. If there had never been an agreement as alleged, it is reasonable to expect a prompt and vigorous denial. But, as we have pointed out, there was no response whatsoever from the appellant.

 

In this context, we recall to mind the following passage in the judgment of Edgar Joseph Jr. J. in Tan Cheng Hock v. Chan Thean Soo [1987] 2 MLJ 479-487:

 

In Wiedemann v. Walpole [1891] 2 Q.B. 534, 537 an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiff’s testimony in support of such promise. Lord Esher M.R., in his judgment, remarked,

 

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Here, we have only to see whether the mere fact of not answering the letters, with nothing else for us to consider is any evidence in corroboration of the promise. ’ (Emphasis added). Earlier, in his judgment, he said, ‘Now there are cases – business and mercantile cases in which the Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree.”

 

(emphasis added); and

 

(b) David Wong Hon Leong has been affirmed by the Court of Appeal in a judgment given by Hasan Lah JCA (as he then was) in Jetara Sdn Bhd v Maju Holdings Sdn Bhd [2007] 3 CLJ 41, at 55.

 

76. The Plaintiffs are clearly entitled to file This Suit and 2 Bankruptcy Cases for the following reasons:

 

(a) clause 9.1(a) SPA allows the Plaintiffs to file This Suit against the 1st Defendant (for breach of the SPA) and the 2nd Defendant (in respect of the Guarantee) after the 1st Defendant has failed to rectify the 1st Defendant’s Default despite being given notice by the Plaintiffs to remedy such a default. Clause 9.1 SPA confers on the Plaintiffs a right to take concurrent action (Concurrent Action Clause).

 

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Even if there is no Concurrent Action Clause, a creditor has the right under the law to pursue any or all remedies available to the creditor to recover the money lent by the creditor. I refer to the following 2 cases –

 

(i) in Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 2 CLJ 36, at

 

56, Gopal Sri Ram JCA (as he then was) decided as follows in the Federal Court –

 

“Now, it is trite that a chargee/creditor may pursue any or all remedies to recover monies lent by him. He may enforce his statutory charge against the chargor by way of proceedings in rem under s. 256 [NLC]. He may sue the principal debtor (who may or may not be the chargor) upon the personal covenant contained in any loan agreement that was entered into between the parties. He may proceed against the surety who has guaranteed the loan. And he may pursue all of these courses simultaneously, contemporaneously or successively. See, China and South Sea Bank Ltd. v. Tan [1989] 3 All ER 839, 842.

 

Thus, absent any special circumstances, a chargee who has obtained an order for sale is not barred by res judicata or any other form of estoppel from pursuing actions in personam against the chargor or the surety. The test of mutuality or reciprocity is, accordingly, not met. Consequently, no legitimate ground may be advanced to

 

bar the chargor from mounting an action in personam

 

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against the chargee eg., for breach of contract or for failure to furnish proper accounts ”

 

(emphasis added); and

 

(ii) Lord Templeman delivered the following opinion of the Privy Council in an appeal from Hong Kong, China and South Sea Bank Ltd v Tan [1989] 3 All ER 839, at 842 –

 

“ The creditor had three sources of repayment. The creditor could sue the debtor, sell the mortgage securities or sue the surety. All these remedies could be exercised at any time or times simultaneously or contemporaneously or successively or not at all. If the creditor chose to sue the surety and not pursue any other remedy, the creditor on being paid in full was bound to assign the mortgage securities to the surety. If the creditor chose to exercise his power of sale over the mortgage security he must sell for the current market value but the creditor must decide in his own interest if and when he should sell. The creditor does not become a trustee of the mortgaged securities and the power of sale for the surety unless and until the creditor is paid in full and the surety, having paid the whole of the debt is entitled to a transfer of the mortgaged securities to procure recovery of the whole or part of the sum he has paid to the creditor.”

 

(emphasis added).

 

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In this case, the Plaintiffs stand on a stronger footing with the presence of the Concurrent Action Clause;

 

(b) clause 6.1(e) SPA has expressly provided that upon the 1st Defendant’s Default, the 1st and 2nd Plaintiffs shall be entitled to enforce the Put Option Judgment. Similarly, clause 2.3 Guarantee entitles the 1st and 2nd Plaintiffs to enforce the Put Option Judgment upon the 1st Defendant’s Default;

 

(c) the Plaintiffs are not estopped from filing This Suit and 2 Bankruptcy Cases – Low Lee Lian, at p. 56. Furthermore, clause 11.6 SPA has expressly provided that knowledge or acquiescence of any party of any breach of the SPA “shall not operate as or be deemed to be a waiver’ of such a breach and “notwithstanding such knowledge or acquiescence”, each party “shall be entitled to exercise its respective rights” under the SPA and “to require strict performance” by the other parties of the terms, conditions and covenants in the SPA; and

 

(d) clauses 6.1(e), 9.1 [including paragraph (a)] and 11.6 SPA bind the 2nd Defendant who is a party to the SPA.

 

77. I am of the view that UTB can proceed with the Charge Proceedings.

 

This decision is based on the following reasons:

 

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(a) clause 9.1(b) SPA allows the Charge Proceedings to proceed in the event of the 1st Defendant’s Default;

 

(b) the 2nd Defendant is bound by paragraphs 2(a)(ii) and 3(a) of his irrevocable 2nd Defendant’s Instruction dated 5.8.2014 to UTB to continue with the Charge Proceedings in the event of the 1st Defendant’s Default; and

 

(c) UTB is bound by the 2nd Ordinary Resolution dated 29.6.2010 to proceed with the Charge Proceedings. If otherwise, UTB would have breached the 2nd Ordinary Resolution dated 29.6.2010 and would thus be liable to all holders of RCSN (including the 2nd Defendant!). As explained above, the 2nd Defendant is bound by the 2nd Ordinary Resolution dated 29.6.2010 by virtue of Paragraph 18 (3rd Schedule).

 

78. There is no principle of law which prohibits the 3 Concurrent Actions. Nor is there any policy consideration which militates against the 3 Concurrent Actions.

 

79. There is another reason why the Plaintiffs and UTB are at liberty to proceed with the 3 Concurrent Actions. If I have acceded to the Defendants’ submission to restrain the Plaintiffs and UTB from proceeding with the 3 Concurrent Actions, this means this court will have permitted the Defendants to take advantage of the 1st Defendant’s Default. I rely on the Court of Appeal’s judgment delivered by Gopal Sri

 

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Ram JCA (as he then was) in Pentadbir Tanah Daerah Petaling v Swee Lin Sdn Bhd [1999] 3 MLJ 489, at 492 as follows:

 

“Quite apart from the construction of para 1(3)(b) of the First Schedule, there is a principle of great antiquity that a litigant ought not to benefit from its own wrong. Although of universal application, it has been restated when applied to a particular context. For example, the principle when applied in the context of the law of contract may be formulated as follows: a party ought not to be permitted to take advantage if his own breach. See Alghussein Establishment v Eton College [1988] 1 WLR 587, New Zealand Shipping Co Ltd v Societe Des Ateliers Et Chantiers De France [1919] AC 1.

 

But as I have said, the principle is of universal application .”

 

(emphasis added).

 

80. There cannot be an abuse of court process when the Plaintiffs and UTB are relying on express provisions in the SPA, Trust Deed, 2nd Defendant’s Instruction dated 5.8.2014 and 2nd Ordinary Resolution dated 29.6.2010. Nor is there any mala fide on the part of the Plaintiffs and UTB in proceeding with the 3 Concurrent Actions.

 

81. By virtue of the above reasons, the Plaintiffs and UTB are not put to an election as submitted by the 2nd Defendant’s learned counsel. In the Federal Court case of Lai Yoke Ngan, at p. 583, Gopal Sri Ram JCA (as he then was) applied the doctrine of election as a form of estoppel in the context of setting aside default judgments. Lai Yoke Ngan did not concern express provisions in the SPA, Trust Deed, 2nd Defendant’s

 

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Instruction dated 5.8.2014 and 2nd Ordinary Resolution dated 29.6.2010 which allowed the 3 Concurrent Actions.

 

82. Peh Swee Chin FCJ’s judgment in the Federal Court case of Sababumi (Sandakan) Sdn Bhd, at p. 169-171, laid down 2 cumulative tests to imply a term into a contract, namely the subjective test of “officious bystander’ and the objective test of business efficacy. Sababumi (Sandakan) Sdn Bhd does not lay down the “business efficacy’ rule as contended by the 2nd Defendant. Nor is there anything in Sababumi (Sandakan) Sdn Bhd which restrains the Plaintiffs and UTB from proceeding with the 3 Concurrent Actions.

 

D(10). Damages are a sufficient remedy for Defendants

 

83. The Defendants bear the legal onus to satisfy this court that the remedy of damages in not an adequate remedy – please see the Court of Appeal’s judgment delivered by Ahmad Fairuz JCA (as he then was) in Gerak Indera Sdn Bhd v Farlim Properties Sdn Bhd [1997] 3 MLJ 90, at 99.

 

84. I am of the view that damages are an adequate remedy for the Defendants in the Counterclaim because –

 

(a) there is no evidence which has been adduced by the Defendants to show that the Charged Lands have any “sentimental value” to the Defendants. In fact, the Defendants have contended that there is the

 

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Alleged Redemption Mechanism to sell the Charged Lands by way of private treaty. In other words, the Defendants have acknowledged that the Charged Lands are purely commercial properties. In Univein Sdn Bhd v Malaysia Building Society Bhd [2003] 2 CLJ 514, at 518 (Univein Sdn Bhd), Abdul Aziz JCA (as he then was) held as follows in the Court of Appeal –

 

“The respondents had therefore been right in saying in para. 17 of their affidavit in reply that the lands were commercial property of no sentimental value to the appellants .”

 

(emphasis added);

 

(b) the Put Option Judgment is purely monetary in nature;

 

(c) the Purchase Price of the Plaintiffs’ RCSN have been agreed by all parties in the SPA as RM146,458,246.20. Even if it is assumed that the Plaintiffs have breached the SPA, the 1st Defendant can be adequately compensated in damages by the Plaintiffs for the Plaintiffs’ breach of the SPA; and

 

(d) the Defendants prayer for the return of the Deposit and Ex Gratia Sum is clearly monetary in nature.

 

85. Based on the above reasons, the Defendants have failed to discharge the legal burden to satisfy the court that the remedy of damages is not a sufficient remedy for the Defendants. On this ground alone, Court Enc.

 

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No. 22 should be dismissed with costs – please see the Supreme Court’s judgment delivered by Hashim Yeop Sani CJ (Malaya) in Associated Tractors Sdn Bhd v Chan Boon Heng & Anor [1990] 1 CLJ (Rep) 30, at 32.

 

D(11). Balance of convenience lies against Court Enc. No. 22

 

86. In Alor Janggus Soon Seng Trading Sdn Bhd, at p. 270-271, the Supreme Court explains the balance of convenience test as follows:

 

“Be that as it may, the grant or refusal of an interlocutory injunction must be decided on the fundamental principle that the court should take whichever course that appears to carry the lower risk of injustice. We are engaged in weighing the respective risks that injustice may result from deciding one way rather than the other at the stage when the evidence is incomplete. On the one hand, there is the risk that if the interlocutory injunction is refused but the plaintiffs succeed in establishing at the trial their legal rights to the protection for which the injunction has been sought they may in the meantime have suffered harm and inconvenience or monetary loss for which an award of money can provide no adequate recompense. On the other hand, there is the risk that if the interlocutory injunction is granted but the plaintiffs fail at the trial, the defendants may in the meantime have suffered harm and inconvenience which is similarly irrecompensable. ”

 

(emphasis added).

 

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87. I find that a dismissal of Court Enc. No. 22 carries a lower risk of injustice than to allow Court Enc. No. 22. My reasons are as follows:

 

(a) if Court Enc. No. 22 is allowed, the risk of injustice to the Plaintiffs will be much greater than the risk of injustice to the Defendants (if any). The following facts are pertinent –

 

(i) the RCSN had been acquired by the Plaintiffs in 2002. GPB had first defaulted in respect of the RCSN as early as 22.4.2007 when GPB failed to pay the coupon. GPB then failed to redeem the RCSN on 22.4.2008. As at 22.4.2008, GPB owed a total of RM327,472,217.14 to RCSN holders. The RCSN had been delisted from Bursa on 29.4.2008. The 2nd Ordinary Resolution dated 29.6.2010 had directed UTB to take all actions to recover the sum due under the RCSN. On 1.3.2013, GPB had been wound up. The 1st Defendant’s Default occurred in January 2015 in respect of the Dishonoured Cheque. The Plaintiffs had given 2 extensions of time for the 1st Defendant’s Default to be remedied by way of Messrs SLB’s Letters dated 28.1.2015 and 17.2.2015. Since the 2nd Ordinary Resolution dated 29.6.2010, the Plaintiffs have “waited’ to recover what is rightfully due to the Plaintiffs under the RCSN by way of, among others, the Charge Proceedings; and

 

(ii) in This Suit, the Plaintiffs are claiming for, among others, the Balance Purchase Price (RM124,489,509.27) and interest at

 

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the rate of 5% per annum on the Balance Purchase Price.

 

Despite agreeing to the SPA, the 1st Defendant could not even

 

pay the 4th Payment amounting to RM36,614,561.55 on

 

30.12.2014 [as stipulated in clause 2.2(d) SPA]. If –

 

(1) Court Enc. No. 22 is allowed (to restrain the Charge Proceedings);

 

(2) This Suit is subsequently allowed by this court; and

 

(3) the Counterclaim is subsequently dismissed

 

– the interest on the Balance Purchase Price will greatly increase the sum due from the Defendants to the Plaintiffs. In such an event, if the Defendants are not able to satisfy this monetary judgment, the Plaintiffs will suffer an injustice. On the other hand, if Court Enc. No. 22 is dismissed and the Charged Lands are sold by Public Auctions, this will reduce the indebtedness due by the Defendants to the Plaintiffs and the 2nd Defendant may also benefit as a holder of RCSN.

 

In Univein Sdn Bhd, at p. 518-519, the Court of Appeal held as follows in respect of where the balance of convenience lie –

 

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“ That left to be considered only the question of dollars and cents from the point of view of what the appellants’ counsel called balance of convenience and the respondents’ counsel called balance of justice. It was obvious to me that the balance tilted heavily in favour of allowing the sale to proceed. From RM25,800,000 in 1995, the debt had now mounted to RM71,440,223.50. If the lands were not sold now, but sold only after the disposal of the appeal should the appellants fail in the appeal, with interest accruing daily at more than RM20,000 per day, the total outstanding would keep increasing to an amount that would depend on when the appeal would be decided. At RM20,000 per day, interest per year would come to a region of RM7,000,000. The proceeds of sale of the lands would not pay even half of what the outstanding amount would be then. It would be worse if, depending on the economic situation then, the lands should fetch a lower value than their present market value. As to the balance, the respondents might not be able to recover it at all. The respondents should not be deprived of the fruit of their litigation. They should be allowed to recover now whatever amount they could from the lands. Apart from enabling them to enjoy some fruit from their litigation, that would reduce the amount of the interest that would otherwise keep accruing.

 

On the other hand, if the lands were sold now and the appellants should succeed in the appeal, any loss that

 

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they might sustain from the sale of their lands could be compensated for by the respondents with damages based on the commercial value of the lands. There was no question that the respondents would not be able to pay the damages.”

 

(emphasis added); and

 

(b) on the other hand, if –

 

(i) Court Enc. No. 22 is dismissed;

 

(ii) this court subsequently dismisses This Suit; and

 

(iii) the Counterclaim is subsequently allowed and the court orders damages to be paid by the Plaintiffs to the Defendants (Defendants’ Award of Damages)

 

– there is no injustice to the Defendants because the Plaintiffs are financial institutions which are licensed under the Financial Services Act 2013 and are financially able to pay the Defendants’ Award of Damages.

 

88. Based on the above reasons, even if I have erred in holding that –

 

(a) there is no serious and bona fide issue in respect of the

 

Counterclaim to be tried in this case; and

 

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(b) damages are an adequate remedy in this matter

 

– the balance of convenience clearly lies in favour of a dismissal of Court Enc. No. 22. As such, on this ground alone, Court Enc. No. 22 should be dismissed with costs.

 

D(12). Application of s 54 Specific Relief Act 1950 (SRA) to interlocutory injunctions

 

89. Section 54(a), (b), (i), (j) and (k) SRA provides as follows:

 

“Injunction when refused

 

54. An injunction cannot be granted –

 

(a) to stay a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such a restraint is necessary to prevent a multiplicity of proceedings;

 

(b) to stay proceedings in a court not subordinate to that from which the injunction is sought;

 

(i) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding, except in case of breach of trust;

 

(j) when the conduct of the applicant or his agents has been such as to disentitle him to the assistance of the court; or

 

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(k) where the applicant has no personal interest in the matter.

 

(emphasis added).

 

90. The question that arises is whether s 54 SRA applies to interlocutory injunction applications. Sections 50, 51(1) and (2) SRA use the terms “perpetual injunctions” and “temporary injunctions”. In legal practice, a “perpetual injunction” refers to a permanent injunction which is granted after the final disposal of a matter while a “temporary injunction” means an interim or interlocutory injunction pending the final disposal of a matter.

 

91. The 2 following Supreme Court decisions have applied s 54 SRA to interlocutory injunction applications:

 

(a) in Penang Han Chiang Associated Chinese School Association v National Union of Teachers in Independent Schools, West Malaysia [1988] 1 MLJ 302, at 303, Seah SCJ held as follows:

 

“When the learned judge granted the interlocutory injunction, he appeared to rely on the principle expounded by the late Lord Diplock in the American Cyanamid [1975] AC 396 case that the applicant needs, amongst other things, to show that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried. The learned judge did not appear to consider the balance of convenience. If he had done so, he seemed to have disregarded the well-established rule that a contract for service or service contract would not be specifically enforced by the High Court (see section 20(1)(b) of the Specific

 

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Relief Act 1950) and that an injunction cannot be granted to prevent the breach of a contract the performance of which would not be specifically enforced (see section 54(f) of [SRA] and Hill v CA Parson & Co Ltd [1971] 3 All ER 1345).

 

In Poh Swee Siang v Trustees of Tong Khoo Kongsi & Ors [1986] 1 MLJ 53 the Federal Court held that when hearing an appeal from the judge’s grant or refusal to grant an interlocutory injunction the function of an appellate court is initially one of review only. It must defer to the judge’s exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. We would respectfully adopt this principle in deciding this appeal.

 

It was clear from a review of the facts and the ruling of the learned judge that he did not appear to give any consideration to the balance of convenience. And if he did, he failed to have due regard to the provisions of section 20(1)(b) and section 54(f) of the Specific Relief Act 1950. On this ground alone, it was plain that the granting of the interlocutory injunction was not an exercise of judicial discretion. This means that the appellate court is at liberty to rehear the whole application on its merits .”

 

(emphasis added); and

 

(b) in Government of Malaysia v Lim Kit Siang [1988] 2 MLJ 12 (Lim Kit Siang), the following judgments have been delivered concerning s 54 SRA –

 

(i) Salleh Abas LP (part of the 3-2 majority decision) held, at p.

 

20 –

 

“In my view, the interim injunction should have been refused.

 

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Refusal to grant the injunction in this case is also consistent with paragraphs (d) and (k) of section 54 of the Specific Relief Act in that no injunction can be granted “to interfere with the public duties of any department of any Government” nor can it be granted “where the applicant has no personal interest in the matter”. Personal interest here must surely mean legal interest and not merely political interest

 

(emphasis added); and

 

(ii) Eusoffe Abdoolcader SCJ dissented in Lim Kit Siang and stated at p.50 as follows –

 

“Anent the matter of the interlocutory injunction granted against UEM, the Attorney-General also seeks to rely on the provisions of section 54(d) and (k) of the Specific Relief Act which provide respectively that an injunction cannot be granted to interfere with the public duties of any department of any Government in Malaysia, or with the sovereign acts of a foreign government (paragraph (d)), and where the applicant has no personal interest in the matter (paragraph (k)). I cannot see how they apply to affect the position in the matter before us. There is no question of any interference with the public duties of the Government as what is sought is to question the propriety of the transaction between the Government and UEM involving the expenditure of public moneys on the basis of certain allegations raised in respect thereto; the respondent does not seek to question the substance of the spending decision or the propriety of the North-South Highway project itself. In any event, whether or not there can conceivably be any question of interference with the public duties of the Government is a matter for determination after consideration of the merits at the hearing, and these proceedings have not as yet reached that stage. As for paragraph (k), the question of whether the respondent has any personal interest or not in the matter must depend on the postulate of standing and I need not belabour this point as I

 

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have dealt with it at some length, and if the respondent can have standing to institute these proceedings as a public-spirited citizen, Leader of the Opposition, Member of Parliament and taxpayer, then he must necessarily and certainly have a personal interest in the matter in consequence on that basis.

 

And quite apart from all this, I would point out that section 54 of the Specific Relief Act comes under Chapter X of the Act dealing only with perpetual injunctions, and section 51 of the Act which comes under Chapter IX and refers to injunctions generally draws a distinction between temporary injunctions and perpetual injunctions, specifically enacting that a perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit. The injunction sought and granted in this case was interlocutory pending the final determination of the suit.’’

 

(emphasis added).

 

92. After the above 2 Supreme Court judgments, Gopal Sri Ram JCA (as he then was) decided in the Court of Appeal case of Keet Gerald Francis Noel John v Mohd. Noor bin Abdullah & Ors [1995] 1 MLJ 193, at 205-206 (Keet Gerald Francis), that s 54 SRA only applies to perpetual injunctions and not to interlocutory injunctions. Keet Gerald Francis has been affirmed by Gopal Sri Ram JCA in the Court of Appeal case of Jasa Keramat Sdn Bhd & Anor v Monatech (M) Sdn Bhd [1999] 4 MLJ 637, at 648.

 

93. In the Federal Court case of Subashini a/p Rajasingam v Saravanan a/l Thangathoray & Other Appeals [2008] 2 MLJ 147, at 189-197, Abdul Aziz FCJ in a dissenting judgment, favoured Keet Gerald Francis.

 

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94. In Dato’ Mohd Zaini Mohd Ariff v Alliance Bank Malaysia Bhd [2015] 1 MLRH 87, at paragraphs 44 and 49-52 (Dato’ Mohd Zaini), I decided as follows:

 

(a) as a matter of stare decisis, I am bound by our apex court’s judgments in Penang Han Chiang Associated Chinese School Association and Lim Kit Siang; and

 

(b) our s 54 SRA is based on a similar (not identical) provision in the Indian Specific Relief Act 1877 [SRA 1877 (India)] which has now been replaced by s 41 of the Indian Specific Relief Act 1963 [SRA 1963 (India)]. In Cotton Corporation of India Ltd v United Industrial Bank Ltd & Ors AIR 1983 SC 1272, at 1275 and 12791280, Desai J in the Indian Supreme Court applied s 41 of the Indian SRA to temporary injunctions.

 

95. I am of the view that until our Federal Court overrules Penang Han Chiang Associated Chinese School Association and Lim Kit Siang

 

and affirms Keet Gerald Francis, s 54 SRA applies to temporary injunction applications such as Court Enc. No. 22.

 

D(13). Application of s 54(k) SRA – Defendants have no “personal interest” in Charged Lands

 

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96. In Lim Kit Siang, at p. 20, Salleh Abas LP (in the majority decision of the Supreme Court) has decided that “personal interest in s 54(k) SRA must mean legal interest. I am of the view that s 54(k) SRA itself will bar Court Enc. No. 22 in respect of the Defendants’ application to restrain the Charge Proceedings. This is because the Defendants have no “personal interest in the Charged Lands. This decision is based on the following reasons:

 

(a) both the Defendants are not the registered proprietors of the Charged Lands. Nor do the Defendants have any registered interest in the Charged Lands such as registered leases or sub-leases (please see ss 221 and 222 NLC), registered charges (as understood in s 242 NLC) and registered easements (within the meaning of ss 282 and 286 NLC);

 

(b) Malaysian case law has recognized equitable or beneficial title and interest in land. There is no evidence that the Defendants have any equitable or beneficial title or interest in the Charged Lands. The SPA merely confers a contractual right, namely an action in personam, on the 1st Defendant as against the Plaintiffs. The SPA cannot give any right in rem or proprietary right in the Charged Lands to the Defendants. Under the Guarantee, the 2nd Defendant is, among others, a principal debtor of the Plaintiffs (which will be explained later in respect of Court Enc. No. 12). The Guarantee cannot confer any right in rem or proprietary right in the Charged Lands on the 2nd Defendant; and

 

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(c) the HC had ordered the sale of Empress Hotel Land, Dynasty Hotel Land, KL Lands, Batang Berjuntai Lands and Cheras Lands (HC’s Sale Orders). The HC’s Sale Orders have not been reversed by the Court of Appeal. Nor is there any application by the Defendants to set aside the HC’s Sale Orders. Accordingly, the HC’s Sale Orders are final and res judicata. In Sovereign General Insurance Sdn Bhd v Koh Tian Bee [1988] 1 MLJ 304, at 305, Lee Hun Hoe CJ (Borneo) delivered the following judgment of the Supreme Court –

 

“In the exercise of his jurisdiction in bankruptcy proceedings, the learned judge cannot go behind the judgment.

 

Further, we do not think it is open to the learned judge in the exercise of his jurisdiction in bankruptcy proceedings to strike out the creditors’ petition by disputing the validity of the orders made in earlier execution proceedings when the orders had not been set aside. This is particularly so when there has been no application by the respondent to set aside the execution orders.

 

The two orders were made on January 25, 1980 and June 20,

 

1980. By an order dated January 25, 1980, the shares in the respondent’s name were taken in execution and issued in the sheriff’s name. Unless and until this order has been set aside, it is binding and effective. The respondent has not at any time taken any step to have it set aside.’

 

(emphasis added).

 

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It is to be noted that under s 114(e) EA, there is a rebuttable presumption that judicial acts are regularly performed. It is presumed under s 114(e) EA that the HC’s Sale Orders have been obtained regularly.

 

There are very limited grounds to set aside a perfected judgment or order, such as –

 

(i) when the court has no jurisdiction to make the sealed judgment or order – please see s 44 EA;

 

(ii) fraud or collusion – please see s 44 EA;

 

(iii) breach of the first rule of natural justice (the rule against biasness);

 

(iv) breach of the second rule of natural justice (the right to be heard); and

 

(v) breach of mandatory statutory prohibition

 

– (5 Vitiating Circumstances), please see Adon bin Mohd.

 

Pendik & Anor v Danaharta Urus Sdn Bhd [2015] AMEJ 1783, at paragraphs 62-70.

 

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In this case, the Defendants did not apply to set aside the HC’s Sale Orders. In any event, there is no evidence of any of the 5 Vitiating Circumstances to invalidate the HC’s Sale Orders. Accordingly, it is difficult, if not impossible, to foresee what “personal interest the Defendants possess in the Charged Lands within the meaning of s 54(k) SRA. By reason solely of s 54(k) SRA, Court Enc. No. 22 should be refused with costs.

 

97. At this juncture, I should discuss the Supreme Court’s decision delivered by Hashim Yeop Sani SCJ (as he the was) in Lai Soon Cheong. The 2nd Defendant has relied on Lai Soon Cheong in support of Court Enc. No. 22. In Lai Soon Cheong, the Supreme Court reversed the High Court’s decision and allowed the appellant’s application for an interlocutory injunction to restrain a public auction of land pursuant to an order for sale obtained by the second respondent finance company. Lai Soon Cheong, in my view, can be easily distinguished from this case on the following grounds:

 

(a) on 24.5.1980, the land had been charged by the first respondent housing developer to Magnum Finance Bhd (MFB). On 4.5.1981, the appellant had purchased a house to be built by the first respondent on the land. The appellant had also made part payment of the purchase price of the house. The appellant had filed a suit seeking a SP Order of the sale and purchase agreement of the house. As such, the appellant clearly had “personal interest in the land within the meaning of s 54(k) SRA; and

 

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(b) clause 16 of the sale and purchase agreement provided that without the prior approval of the appellant, the first respondent could not subject the land to any further encumbrance other than those already subsisting on the land on the date of the agreement (Clause 16). Contrary to Clause 16, the second respondent paid MFB the redemption sum and the first respondent then registered a charge over the land in favour of the second respondent on 11.2.1982. The appellant had alleged fraud on the part of the first and second respondents by way of, among others, a breach of Clause 16. In this case, as explained above, neither the Plaintiffs nor UTB had breached any agreement, trust deed or duty imposed by case law.

 

D(14). Application of s 54(a) and (b) SRA – this court cannot restrain Charge Proceedings ordered by another court of co-ordinate jurisdiction

 

98. The purpose of Court Enc. No. 22 is not to prevent a multiplicity of proceedings. This is clear from the Defence and Counterclaim in this case as well as from the affidavits in support of Court Enc. No. 22. The HC Sale Orders have been granted by other courts of co-ordinate jurisdiction with this court. To grant interlocutory injunctive relief to stay the Public Auctions ordered in the HC Sale Orders, in my view, will be contrary to s 54(a) and (b) SRA. In the following cases (in chronological order), the High Courts have refused to grant interlocutory injunctions

 

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which have the effect of staying proceedings pending in other High Courts:

 

(a) Abu Mansor J (as he then was) held as follows in the High Court case of Overseas-Chinese Banking Corporation Ltd v Sindoma Realty Sdn Bhd & other applications [1989] 1 MLJ 377, at 381 –

 

“ The injunction to my mind cannot also be granted for another very good reason. I agree with the submission of counsel for the chargee that there is no jurisdiction of this court to restrain the order of another High Court of co-ordinate jurisdiction (see Bina Satu Sdn Bhd v Tan Construction [1988] 1 MLJ 533).’

 

(emphasis added);

 

(b) according to Kamalanathan Ratnam J in the High Court case of Perwira Affin Bank Bhd v Tan Ah Tong [2001] 1 MLJ 9, at 10 –

 

“As the first preliminary objection, Mr Leong for the respondent argued that this court ought not to grant an injunction to restrain its own order for sale. It was pointed out that the initial order for sale was made on 5 September 1998 and that since there were no bidders, there were numerous attempts at sale culminating in the last order of this court made on 26 May 2000 fixing the auction date to 3 July 2000. In Oversea-Chinese Banking Corp Ltd v Realty Sdn Bhd & other applications [1989] 1 MLJ 377, Abu Mansor J (as his Lordship then was) when considering a case on almost similar issues held at p 381 as follows:

 

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To nail the case against the defendant, the plaintiff referred me to an order of this court dated 21 December 1999 where, inter alia, the said order reads as follows:

 

… ADALAH DIPERINTAHKAN bahawa penjualan keseluruhan tanah melalui lelongan awam yang dipegang di bawah HS(D) 16193-16225 untuk Lot 4235-4267 dan HS(D) 16226 untuk PT 2324 Lot 4268 (dahulunya dikenali sebagai Geran No 7188 untuk Lot No 94, Mukim Ulu Kelang, Negeri Selangor (‘tanah tersebut) ditetapkan pada 23 Februari 2000 jam 9.30 pagi di bilik lelong Mahkamah Tinggi Kuala Lumpur …

 

To my question as to whether the plaintiff had appealed against that decision, Mr Ngeow confirmed that his client had not done so. In the circumstances, I am constrained to hold that both the preliminary objections raised by the plaintiff are founded on solid principles .”

 

(emphasis added);

 

(c) Low Hop Bing J (as he then was) decided in the High Court case of Natseven TV Sdn Bhd v Television New Zealand Ltd [2001] 4 AMR 4648, at 4658 (Natseven TV Sdn Bhd) –

 

“Further it is undesirable, and indeed incongruous for one High Court to grant an interim injunction to restrain a winding-up petition already pending before another High Court of concurrent jurisdiction. Indeed, it is axiomatic that one High Court cannot set aside a final order regularly obtained from

 

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another High Court of concurrent jurisdiction: Perwira Affin

 

Bank Bhd v Tan Ah Tong [2001] 1 MLJ 9 ”

 

(emphasis added); and

 

(d) in Edwina Lau v EON Bank Bhd [2007] 1 LNS 143, at paragraphs 1 and 6-8, Hamid Sultan Abu Backer JC (as he then was) held as follows in the High Court –

 

“1. This is my judgment in respect of the plaintiff’s application to seek an injunction to interfere and/or usurp with an order of sale by public 2 auction granted by another judge. …

 

6. I have read the application affidavits and submissions in this action. I do not think it is appropriate on the facts of this case to grant an interim injunction. My reasons are as follows:

 

(i) Interim injunctions are discretionary relief and the court is not obliged to grant when the plaintiff cannot demonstrate the need and urgency for the application. In this case, what ever grievance the plaintiffs have, it ought to be ventilated in the charge action. Filing an action to usurp the order of a court of competent jurisdiction may amount to an abuse of the process of the court. Section 54 (j) of the Specific Relief Act 1950 (SRA 1950) particularly says that an injunction cannot be granted when the conduct of the application or his

 

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agent has been such as to disentitle him to the assistance of the court.

 

(ii) Further sections 54 (a) and (b) of the SRA 1950 says an injunction cannot be granted: …

 

7. The effect of the above provision is that the courts cannot make orders directly or indirectly to usurp the functions or orders of courts of coordinate or concurrent jurisdiction.

 

8. For reasons stated above I dismiss the plaintiff’s application, enclosure 6 with costs. …”

 

(emphasis added).

 

99. In Court Enc. No. 22, the Defendants have applied for an interlocutory injunction to restrain the 1st and 2nd Plaintiffs from proceeding with the enforcement of the Put Option Judgment, among others –

 

(a) in the 2 Bankruptcy Cases; and

 

(b) execution of the Put Option Judgment.

 

Section 88 of the Bankruptcy Act 1967 (BA) provides that the High Court “shall be the court having jurisdiction in bankruptcy’ under BA (Bankruptcy Court). Sections 6(4), 10(2) and 97 BA provide as follows:

 

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Proceedings and order on creditor’s petition

 

6(4) When the act of bankruptcy relied on is non-compliance with a bankruptcy notice to pay, secure or compound for a judgment debt, the court may if it thinks fit stay or dismiss the petition on the ground that an appeal is pending from the judgment.

 

Discretionary powers as to appointment of interim receiver and stay of proceedings

 

10(2) The court may at any time after the presentation of a bankruptcy petition stay any action, execution or other legal process against the property or person of the debtor.

 

Power to stay proceedings

 

97. The court may at any time, for sufficient reason, make an order staying the proceedings under a bankruptcy petition, either altogether or for a limited time, on such terms and subject to conditions as the court thinks just.”

 

(emphasis added).

 

100. Section 6(4) BA does not apply to the Put Option Judgment as there is no pending appeal to the Court of Appeal against the Put Option Judgment by the 2nd Defendant. However, under s 97 BA, the Bankruptcy Court has the discretion to stay the 2 Bankruptcy Cases. As such, Court Enc. No. 22 should be dismissed on the ground that any stay of the 2 Bankruptcy Cases will be tantamount to an usurpation or

 

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interference with the Bankruptcy Court’s discretionary power under s 97 BA which is prohibited by s 54(a) and (b) SRA.

 

101. Section 10(2) BA confers discretionary power on the Bankruptcy Court to stay execution of any judgment against a debtor after the presentation of a bankruptcy petition. To allow Court Enc. No. 22 by staying the execution of the Put Option Judgment, will be contrary to s 54(a) and (b) SRA – please see Dato’ Mohd Zaini, at paragraph 53.

 

102. Based on the above reasons, s 54(a) and (b) SRA may justify a dismissal of Court Enc. No. 22 with costs.

 

103. The 2nd Defendant has cited the judgments of Abdul Wahab Said Ahmad J and Abdul Malik Ishak J (as he then was) in Noresah and Cekal Berjasa Sdn Bhd respectively. I am of the view that both Noresah and Cekal Berjasa Sdn Bhd do not support Court Enc. No. 22 for the following reasons:

 

(a) in Noresah, there was no court order for the sale of an apartment which had been purchased by the plaintiff. Furthermore, the plaintiff claimed that she had not defaulted in respect of the loan agreement in question. In fact, the plaintiff had demanded for the defendant bank to supply the plaintiff with a statement of accounts and the defendant had failed to do so. Accordingly, an interlocutory injunction was granted by the High Court to restrain the defendant from selling

 

100

 

the apartment by way of a public auction pursuant to a loan agreement cum assignment (not a court order for sale); and

 

(b) in Cekal Berjasa Sdn Bhd, the court granted an interlocutory injunction to the plaintiff company to restrain the defendant chargee of 2 pieces of land from proceeding with a public auction of those 2 pieces of land pursuant to orders for sale by the High Court and LA. The facts in Cekal Berjasa Sdn Bhd are distinctive as –

 

(i) the plaintiff company was the registered proprietor/chargor of the 2 pieces of land and had entered into a settlement agreement, debenture and power of attorney with the defendant chargee. In the light of the settlement agreement, debenture and power of attorney, the defendant could not proceed, both in law and Equity, to auction the 2 pieces of land; and

 

(ii) there were 907 purchasers of condominiums to be erected on the 2 pieces of land. In Abdul Malik Ishak J’s (as he then was) words, at p. 654, “the existence of 907 purchasers of the condominium units in Taman Cemerlang [housing project on the 2 pieces of land] must be put in the forefront’ in considering the interlocutory injunction application.

 

D(15). Application of s 54(j) SRA – Defendants’ conduct would disentitle them from injunctive relief

 

101

 

104. The 1st Defendant’s Default and the 1st Defendant’s 3 consecutive applications for extension of time to make the 4th Payment (Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015), would attract the application of s 54(j) SRA and would disentitle the 1st Defendant from any interlocutory injunctive relief in this case.

 

105. The 2nd Defendant is barred by s 54(j) SRA from seeking interlocutory injunctive relief because –

 

(a) in Paragraph 2(b) of Consent Order, the 2nd Defendant had undertaken “not to file any further stay and/or injunction applications to prevent any auctions from proceeding”. By filing Court Enc. No. 22, the 2nd Defendant has breached Paragraph 2(b) of Consent Order and this may be punished by way of committal proceedings in Suit No. 134;

 

(b) in paragraph 3(a) of the 2nd Defendant’s Instruction dated 5.8.2014, in the event of the 1st Defendant’s Default, the 2nd Defendant had “irrevocably” instructed and authorized UTB to continue with the Charge Proceedings; and/or

 

(c) the 2nd Defendant had failed to pay the Guaranteed Sum to the Plaintiffs despite Messrs SLB’s Demand dated 24.2.2015.

 

106. The application of s 54(j) SRA, in itself, is sufficient to dismiss Court Enc. No. 22 with costs.

 

102

 

D(16). Application of s 54(i) SRA – availability of other equally efficacious relief

 

107. As elaborated in the above Part D(14), the 2nd Defendant may apply to the Bankruptcy Court to stay the 2 Bankruptcy Cases (under s 97 BA) and/or stay the execution of the Put Option Judgment [pursuant to s 10(2) BA]. The availability of such equally efficacious relief in the Bankruptcy Court attracts the application of s 54(i) SRA to bar Court Enc. No. 22 – please see Dato’ Mohd Zaini, at paragraphs 54-57. Accordingly, solely on s 54(i) SRA, the 2nd Defendant’s prayer to stay the

 

2 Bankruptcy Cases and/or stay the execution of the Put Option Judgment, should be refused with costs.

 

D(17). 2nd Defendant is barred by issue estoppel principle

 

108. In Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995]

 

3 MLJ 189, Peh Swee Chin FCJ explained in the Supreme Court that the doctrine of res judicata consists of 2 limbs, namely cause of action estoppel and issue estoppel. As regards the issue estoppel principle, the Supreme Court has decided as follows in Asia Commercial Finance (M) Bhd, at p. 197-198, 198-199 and 199-200 –

 

“What is res judicata? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. When a matter between two parties has been adjudicated by a court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties, or in other words,

 

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the parties should accept it as the truth; res judicata pro veritate accipitur. The public policy of the law is that, it is in the public interest that there should be finality in litigation – interest rei publicae ut sit finis litium. It is only just that no one ought to be vexed twice for the same cause of action – nemo debet bis vexari proeadem causa. Both maxims are the rationales for the doctrine of res judicata, but the earlier maxim has the further elevated status of a question of public policy.

 

Thus, there are in fact two kinds of estoppel per rem judicatum. The first type relates to cause of action estoppel and the second, to issue estoppel, which is a development from the first type.

 

The cause of action estoppel arises when rights or liabilities involving a particular right to take a particular action in court for a particular remedy are determined in a final judgment and such right of action, ie the cause of action, merges into the said final judgment; in layman’s language, the cause of action has turned into the said final judgment. The said cause of action may not be relitigated between the same parties because it is res judicata.

 

In order to prevent multiplicity of action and also in order to protect the underlying rationales of estoppel per rem judicatum and not to act against them, such estoppel of cause of action has been extended to all other causes of action (based on the same facts or issues) which should have been litigated or asserted in the original earlier action resulting in the final judgment, and which were not, either deliberately or due to inadvertence.

 

On the other hand, the issue estoppel literally means simply an issue which a party is estopped from raising in a subsequent proceeding. However, the issue estoppel, in a nutshell, from a consideration of case law, means in law a lot more, ie that neither of the same parties or their privies in a subsequent proceeding is entitled to challenge the correctness of the decision of a previous final judgment in which they, or their privies, were parties. This sounds like explaining a

 

104

 

truism, but it is the corollary from that statement that is all important and that could have given birth to the controversies alluded to above; the corollary being that neither of such parties will be allowed to adduce evidence or advance any argument to contradict such decision.

 

There is one school of thought that issue estoppel applies only to issues actually decided by the court in the previous proceedings and not to issues which might have been and which were not brought forward, either deliberately or due to negligence or inadvertence, while another school of thought holds the contrary view that such issues which might have been and which were not brought forward as described, though not actually decided by the court, are still covered by the doctrine of res judicata, ie doctrine of estoppel per rem judicatum.

 

We are of the opinion that the aforesaid contrary view is to be preferred; it represents for one thing, a correct even though broader approach to the scope of issue estoppel. It is warranted by the weight of authorities to be illustrated later. It is completely in accord or resonant with the rationales behind the doctrine of res judicata, in other words, with the doctrine of estoppel per rem judicatum. It is particularly important to bear in mind the question of the public policy that there should be finality in litigation in conjunction with the exploding population; the increasing sophistication of the populace with the law and with the expanding resources of the courts being found always one step behind the resulting increase in litigation.”

 

(emphasis added).

 

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The 2nd Defendant had applied to intervene in the Charge Proceedings regarding the Empress Hotel Land, Dynasty Hotel Land and KL Lands but the following HC had dismissed such applications in the –

 

(a) Shah Alam HC’s Order dated 3.2.2014 (in respect of the Empress Hotel Land);

 

(b) Kuala Lumpur HC’s Order dated 6.2.2014 (in respect of the Dynasty Hotel Land); and

 

(c) Kuala Lumpur HC’s Order dated 4.3.2014 (in respect of the KL Lands).

 

In view of the above HC’s orders which have dismissed the 2nd Defendant’s applications to intervene in the Charge Proceedings regarding the Empress Hotel Land, Dynasty Hotel Land and KL Lands, the 2nd Defendant is therefore barred by the issue estoppel principle, the second limb of the res judicata doctrine, as enunciated in Asia Commercial Finance (M) Bhd, from challenging the legality of the HC’s Sale Orders in respect of the Empress Hotel Land, Dynasty Hotel Land and KL Lands. If the 2nd Defendant cannot impugn the HC’s Sale Orders, the 2nd Defendant is not entitled to apply for an interlocutory injunction to restrain the holding of the Public Auctions of the Empress Hotel Land, Dynasty Hotel Land and KL Lands.

 

106

 

D(18). Defendants are barred by equitable considerations from applying for equitable injunctive relief

 

109. I am of the view that the Defendants are barred by the following 2 equitable maxims from succeeding in Court Enc. No. 22:

 

(a) the maxim that one who comes to Equity must come with clean hands – please see Natseven TV Sdn Bhd, at p. 4666; and

 

(b) the maxim that one who seeks Equity must do Equity –

 

(i) Seah FJ’s (as he then was) judgment in the Federal Court case of Ganam d/o Rajamany v Somoo s/o Sinnah [1984]

 

2 MLJ 290, at 299; and

 

(ii) Natseven TV Sdn Bhd v Television New Zealand Ltd, at p.

 

4666.

 

110. The 2 above equitable maxims apply to the 1st Defendant for these reasons:

 

(a) the 1st Defendant’s Default has been committed by way of the Dishonoured Cheque; and

 

(b) after the 1st Defendant’s Default, the 1st Defendant applied for and obtained 2 extensions of time from the Plaintiffs to remedy the 1st

 

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Defendant’s Default (please see Messrs SLB’s Letters dated 28.1.2015 and 17.2.2015) and yet, the 1st Defendant had failed to rectify the 1st Defendant’s Default.

 

111. The above 2 equitable maxims equally apply to the 2nd Defendant. I say so for the reasons stated in the above paragraph 105.

 

112. Premised on the above reasons, I exercise my discretion to decline Court Enc. No. 22 with costs due to the application of the 2 above equitable maxims.

 

D(19). Unexplained and unreasonable delay in filing Court Enc. No. 22

 

113. As early as 26.2.2015, the Plaintiffs had informed UTB of the 1st Defendant’s Default by way of letters which had been copied to the 2nd Defendant. The 1st Defendant would have known of the 1st Defendant’s Default and the 2 extensions of time obtained by the 1st Defendant to remedy the 1st Defendant’s Default. Despite the Defendants knowing as early as 26.2.2015 about the 1st Defendant’s Default and UTB’s fiduciary duty to carry out the 2nd Ordinary Resolution dated 29.6.2010 by proceeding with the Public Auctions, Court Enc. No. 22 was only filed on 17.8.2015.

 

114. I am of the view that there had been an unreasonable delay of more than 5^ months in the filing Court Enc. No. 22. Worse still, there was no reasonable explanation on affidavit evidence for such an inordinate delay

 

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by the Defendants. In view of the undisputed facts in this case, namely the Plaintiffs have “waited” since the 2nd Ordinary Resolution dated 29.6.2010 for the Public Auctions to be conducted so as to recover what is lawfully due to the Plaintiffs under the RCSN, there is therefore an injustice suffered by the Plaintiffs due to the unexplained and unreasonable delay on the Defendants’ part in the filing of Court Enc. No. 22. On this ground alone, this court’s discretion is exercised to dismiss Court Enc. No. 22 with costs.

 

115. In the following appellate cases, unexplained and unreasonable delay in filing an interlocutory injunction application, was a sufficient reason in itself for the court’s refusal to exercise discretion to grant an interlocutory injunction:

 

(a) in Haji Wan Habib Syed Mahmud v Datuk Patinggi Haji Abdul Taib Mahmud & Anor [1986] 2 MLJ 198, at 200-201, Abu Mansor J (as he then was) in the High Court dismissed an interlocutory injunction application on the ground that the applicant was guilty of a delay of almost 2 months. The High Court’s decision has been affirmed by Abdul Hamid Ag LP (as he then was), at p. 202, in the Supreme Court;

 

(b) the Supreme Court decided as follows in Alor Janggus Soon Seng Trading Sdn Bhd, at p. 262-263 and 264 –

 

11 Delay

 

109

 

Having disposed of the troublesome issue, we would now proceed to consider the real issue in this appeal, ie whether the interlocutory injunction issued on 2 April 1993 and dissolved on 27 August 1993 should be restored. We would first deal with the question of delay. As with all equitable reliefs, delay is a relevant factor in interlocutory proceedings for injunctive relief. An important maxim in regard to delay is that equity aids the vigilant, and not those who sleep on their rights; ‘vigilantibus, non dormientibus, jura subeniunt’. The essence of an application for interlocutory injunction is that it should be made with promptitude. It is said that the court will not grant an interlocutory injunction if the plaintiff having sufficient notice of the defendant’s intention to commit the act sought to be restrained is guilty of unreasonable delay in applying to the court. The illustration of this principle is to be found in the case of Salisbury v Metropolitan Railway Co (1870) 22 LT 839. The cases of Hj Wan Habib Syed Mahmud [1986] 2 MLJ 198 and Chung Khiaw Bank Ltd [1968] 1 MLJ 299 cited above are Malaysian authorities on the same point. It must be pointed out, however, that not all delay is bad delay or, to be precise, inexcusable, as it may be explained or inevitable.

 

Salmon LJ in Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229; [1968] 1 All ER 543; [1968] 2 WLR 366 set out three factors which are relevant in considering whether delay should be allowed as a ground to refuse an interlocutory injunction. These factors are at [1968] 2 QB 229 at p 268; [1968] 1 All ER 543 at p 561; [1968] 2 WLR 366 at p 390. Salmon LJ said:

 

… In order for such an application to succeed, the defendant must show:

 

(1) that there has been inordinate delay. It would be highly undesirable and indeed impossible to attempt to lay down a tariff – so many years or more on one side of the line and a lesser period on the other. What is or is not inordinate delay must depend upon the facts of each particular case. These vary infinitely from case to case, but inordinate delay should not be too difficult to recognize when it occurs.

 

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(2) that this inordinate delay is inexcusable. As a rule, until a credible excuse is made out, the natural inference would be that it is inexcusable.

 

(3) that the defendants are likely to be seriously prejudiced by the delay. This may be prejudice at the trial of the issue between themselves and the plaintiff, or between each other, or between themselves and the third parties. In addition to any inference that may properly be drawn from the delay itself, prejudice can sometimes be directly proved. As a rule, the longer the delay, the greater the likelihood of serious prejudice at the trial.

 

It must also be emphasized here what is important to consider is not so much the length of the delay but whether the delay has in some ways made it unjust to grant the injunction claimed. Megarry J’s observation in the case of Legg v Inner London Education Authority [1972] 3 All ER 177 at p. 191; [1972] 1 WLR 1245 at pp 1259-1260 is apposite:

 

I have hesitated somewhat on this point. What seems to be important is not so much the length of the delay per se, but whether the delay has in some ways made it unjust to grant the injunctions claimed. An injunction granted now would be more burdensome to the ILEA and to the parents and boys affected by it than an injunction granted two months ago. Nevertheless I am not persuaded that the added burden is of sufficient weight to bar the remedy…

 

Having said all that, we must first determine at what point of time should delay run in the instant case. …

 

We agree with Encik Khoo’s argument on the relevant date for the determination of delay. In considering the lapse of time, delay commences to run from the discovery of the circumstances giving title to the relief. See Carter v Trevelyan 11 C L & F 714 and Salisbury v Metropolitan Railway Co (1870) 22 LT 839. Another authority on this point is the case of Erlanger v New

 

ill

 

Sombrero Phosphate Co (1878) 3 App Cas 1218. Lord Blackburn on the question of delay had this to say at p 1279:

 

… And a court of equity requires that those who come to it to ask its active interposition to give them relief, should use due diligence, after there has been such notice or knowledge as to make it inequitable to lie by. And any change which occurs in the position of the parties or the state of the property after such notice or knowledge should tell much more against the party in mora, than a similar change before he was in mora should do.”

 

(emphasis added); and

 

(c) in See Teow Guan & Ors v Liqudators of Kian Joo Holdings Sdn Bhd (in liquidation) & Ors [2008] 1 AMR 811, at 818-819, Suriyadi Halim Omar JCA (as he then was) delivered the Court of Appeal’s judgment in dismissing an interlocutory injunction application on the ground of unexplained delay of 4 years.

 

D(20). Summary of grounds to dismiss Court Enc. No. 22

 

116. In brief, Court Enc. No. 22 is dismissed with costs on the following grounds:

 

(a) the Counterclaim has not raised any serious and bona fide issue to be tried in this case;

 

(b) damages constitute an adequate remedy for the Defendants in this case;

 

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(c) the balance of convenience does not lie in favour of allowing Court Enc. No. 22;

 

(d) paragraphs (a), (b), (i), (j) and/or (k) of s 54 SRA, individually and/or collectively, apply to bar interlocutory injunctive relief in respect of the Counterclaim;

 

(e) the 2nd Defendant is barred by the issue estoppel principle from applying for an interlocutory injunction to restrain the Public Auctions;

 

(f) 2 equitable maxims apply in this case to bar the Defendants from equitable injunctive relief; and

 

(g) there was unexplained and unreasonable delay in filing Court Enc. No. 22 which made it unjust to the Plaintiffs to allow Court Enc. No. 22.

 

E. Principles applicable in deciding striking out applications

 

117. I will now decide consecutively Court Enc. Nos. 9 and 11 which have been filed by UTB and Plaintiffs respectively to strike out the Counterclaim.

 

113

 

118. Firstly, in deciding Court Enc. Nos. 9 and 11, I am not bound in any manner by my decision and reasons in dismissing Court Enc. No. 22. I am duty bound to consider afresh Court Enc. Nos. 9 and 11. In Universal Trustee (Malaysia) Berhad v Lambang Pertama Sdn Bhd & Anor [2014] 5 AMR 57, at 70-72 (Lambang Pertama Sdn Bhd), I have held that in deciding a subsequent application by a plaintiff to strike out a counterclaim, I was not bound by the decision and reasons for an earlier summary judgment application by the plaintiff.

 

119. In Court Enc. No. 9, UTB has applied to strike out the Counterclaim on the following grounds:

 

(a) the Counterclaim is scandalous, frivolous and/or vexatious under Order 18 rule 19(1)(b) RC;

 

(b) the Counterclaim prejudices, embarrasses or delays the fair trial of this case under Order 18 rule 19(1)(c) RC; and/or

 

(c) the Counterclaim constitutes an abuse of court process under Order 18 rule 19(1)(d) RC.

 

120. The Plaintiffs sought in Court Enc. No. 11 to strike out the Counterclaim pursuant to Order 18 rule 19(1)(a), (b) and/or (d) RC as well as the court’s inherent jurisdiction.

 

114

 

121. In determining Court Enc. Nos. 9 and 11, I am guided by the following

 

trite principles of law:

 

(a) a pleading can only be struck out in a plain and obvious case, namely where that pleading is obviously unsustainable – please see the Supreme Court’s judgment delivered by Mohd. Dzaiddin SCJ (as he then was) in Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, at 43;

 

(b) the mere fact that a pleaded case is weak and is not likely to succeed, is not a ground to strike out that pleading – Bandar Builder Sdn Bhd, at p. 44;

 

(c) the court will assume that the contents of the pleading in question are true – please see Mahadev Shankar JCA’s decision in the Court of Appeal case of Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd & other appeals [1996] 1 MLJ 661, at 679;

 

(d) every Malaysian citizen has a constitutional right of access to justice under article 5(1) of our Federal Constitution – please see Gopal Sri Ram FCJ’s judgment in the Federal Court case of Sivarasa Rasiah v Badan Peguam Malaysia [2010] 3 CLJ 507, at 514-515. Unless a suit or counterclam is obviously unsustainable, I will be reluctant to deprive a Malaysian citizen of his or her fundamental right of access to justice;

 

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(e) under Order 18 rule 19(1) RC, in the interest of justice the court has a discretion to direct a pleading to be amended -the Court of Appeal’s judgment given by Mahadev Shankar JCA in Muniandy s/o Subrayan & Ors v Chairman & Board Members of Koperasi Menara Maju Bhd [1997] 1 MLJ 557, at 560 and 561; and

 

(f) in considering Court Enc. No. 11 under Order 18 rule 19(1)(a) RC, the court cannot consider affidavit evidence according to Order 18 rule 19(2) RC – please see the Court of Appeal’s judgment delivered by Ramly Ali JCA (as he then was) in See Thong v Saw Beng Chong [2013] 3 MLJ 235, at 241. To decide Court Enc. Nos. 9 and 11 under Order 18 rule 19(1)(b), (c) and/or (d) RC as well as the court’s inherent jurisdiction, I can consider affidavits filed by all parties.

 

F. Court Enc. No. 9

 

F(1). Defendants’ submission

 

122. The 1st Defendant’s learned counsel advanced the following submission to oppose Court Enc. No. 9:

 

(a) UTB had first breached the Alleged Settlement Agreement and in particular, the terms of the SPA;

 

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(b) UTB had breached its duty of care, fiduciary duties, statutory duties and/or trust obligations which had resulted in loss and damage to the Defendants. The Alleged Breaches by UTB concerned BIMB’s Inquiry which had resulted in the aborted purchase of the Empress Hotel Land by JVSB and the Alleged Redemption Mechanism could not therefore “be put in place”;

 

(c) the Plaintiffs and UTB had conspired to injure the Defendants and/or interfere with the Defendants’ contractual rights which had resulted in loss and damage to the Defendants; and

 

(d) the simultaneous Charge Proceedings by UTB and enforcement of the Put Option Judgment by the 1st and 2nd Plaintiffs –

 

(i) constitute an abuse of court process;

 

(ii) are unconscionable; and/or

 

(iii) will destroy the “integrity” of the Alleged Settlement Agreement.

 

Based on the above reasons, UTB, the 1st and 2nd Plaintiffs are estopped from proceeding simultaneously with the Charge Proceedings and enforcement of the Put Option Judgment.

 

123. The following cases, among others, have been relied on by the 1st Defendant in opposing Court Enc. No. 9:

 

117

 

(a) the Court of Appeal case of Meeriam Rosaline a/p Edward Paul & Ors v William Singam a/l Raja Singam (suing as Public Officer of Pertubuhan Persaudaraan Kristian Thaveethin Kudaram, Ipoh, Perak) [2010] 4 MLJ 541;

 

(b) the judgment of the Court of Appeal in The Golf Cheque Book Sdn Bhd & Anor v Nilai Springs Bhd [2006] 1 MLJ 554;

 

(c) the High Court case of Kuala Lumpur Finance Bhd v KGV Associate Sdn Bhd [1995] 1 MLJ 504;

 

(d) the High Court’s judgment in Saripah bte Manap & Ors v Emar Sdn Bhd (In dissolution) & Ors [1998] 1 MLJ 323; and

 

(e) the High Court case of RS Krishnan a/l RS Naidu v Eric Soon Boo Teck (Rawang Hills Resort Sdn Bhd, third party) [2004] 1 MLJ lll252.

 

124. In resisting Court Enc. No. 22, the 2nd Defendant’s learned counsel forwarded essentially the same contentions advanced by the 1st Defendant. The 2nd Defendant relied on the following additional cases (in the order they were presented in the 2nd Defendant’s written submission):

 

(a) the High Court case of Uraco Manufacturing (M) Sdn Bhd v Ban Lian Hardware Sdn Bhd & Anor [2003] MLJU 452;

 

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(b) the judgment of the High Court in Harris Mohd Salleh v Ismail bin Majin, Returning Officer & Ors and another application [2000] 3 MLJ 434;

 

(c) the High Court’s decision in Unibrite Electrical Engineering Sdn Bhd v Central Cables Bhd [2008] MLJU 257;

 

(d) the Court of Appeal case of Shahidan Shafie v Atlan Holdings Bhd & Anor & other appeals [2005] 3 CLJ 793;

 

(e) the judgment of the Court of Appeal in AIC DotCom Sdn Bhd (suing in capacity of representative for MTEX Corp Sdn Bhd) v MTEX Corp Sdn Bhd & Ors [2011] 3 MLJ 476;

 

(f) the High Court case of MJC City Development Sdn Bhd v Everise Departmental Store Sdn Bhd [1999] 5 MLJ 42;

 

(g) the Court of Appeal’s decision in Sykt Telekom Malaysia v Business Chinese Directory Sdn Bhd [1996] 3 MLJ 692 (Business Chinese Directory Sdn Bhd);

 

(h) the High Court’s judgment in Oh Thevesa v Sia Hock Chai [1992] 1 MLJ 215;

 

119

 

(i) the Court of Appeal’s decision in Abdul Rahim bin Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2000] 2 MLJ 417;

 

(j) the Court of Appeal case of Sivakumar a/l Varatharaju Naidu v Ganesan a/l Retnam [2011] 6 MLJ 70;

 

(k) the High Court’s judgment in Omega Holdings Bhd v Dato’ Tiah Thee Kian & Ors [2002] 6 MLJ 20;

 

(l) the Court of Appeal’s decision in Glamour Green Sdn Bhd; and

 

(m) the High Court case of Chan Teik Huat v Public Bank Bhd [2007] MLJU 80.

 

F(2). Unsustainable Counterclaim against UTB

 

125. I am of the view that it is plain and obvious that the 1st Defendant’s

 

Counterclaim is unsustainable against UTB for the following reasons:

 

(a) UTB can rely on the HC’s Sale Orders which are final and res judicata, to continue with the Charge Proceedings. The 1st Defendant has no “personal interest’ in the Charged Lands to file the Counterclaim against UTB – please see the above Part D(13);

 

(b) there is no Alleged Settlement Agreement for reasons explained in the above Part D(4), especially in view of the Entire Agreement

 

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Clause as well as ss 91 and 92 EA. Accordingly, UTB did not breach any Alleged Settlement Agreement;

 

(c) the Alleged Redemption Mechanism is not available as elaborated in the above Part D(5), especially in the light of the 1st Defendant’s Default;

 

(d) as explained in the above Part D(6), in relation to the 1st Defendant, UTB does not owe any –

 

(i) fiduciary duty (including duties as a trustee). It is not disputed that the 1st Defendant is not a holder of RCSN. As such, the 1st Defendant cannot rely on the Trust Deed to claim that UTB owes duties as a trustee to the 1st Defendant;

 

(ii) statutory duty;

 

(iii) contractual obligations. UTB is not a party to the SPA. Hence, the 1st Defendant cannot allege that UTB has breached the SPA as against the 1st Defendant; and

 

(iv) case law duty of care;

 

(e) UTB owes duties as a trustee to all RCSN holders (including the 2nd Defendant) to implement the 2nd Ordinary Resolution dated 29.6.2010. As explained in the above Part D(7) –

 

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(i) UTB was right to insist that the 2nd Ordinary Resolution dated 29.6.2010 could only be lawfully revoked by a special resolution passed in accordance with 75% Majority Requirement;

 

(ii) there were no Alleged Breaches by UTB;

 

(iii) there was no act and/or omission on the part of UTB which could constitute a conspiracy with the Plaintiffs to injure the 1st Defendant and/or to interfere with the 1st Defendant’s contractual rights because UTB’s conduct in this case was legitimately based on the 2nd Ordinary Resolution dated 29.6.2010; and

 

(iv) there was no evidence that UTB was involved in any manner with the 1st Defendant’s Default. Consequently, UTB could not have induced the 1st Defendant’s Default. Nor was there any evidence of UTB and the Plaintiffs, jointly and/or severally, inducing the 1st Defendant’s Default;

 

(f) the 1st Defendant’s claim that the Alleged Breaches by UTB had resulted in the aborted purchase of the Empress Hotel Land by JVSB, is plainly not sustainable because –

 

(i) as explained in the above Part D(6), there were no Alleged Breaches by UTB; and

 

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(ii) BIMB has the absolute prerogative to allow JVSB’s Facility Application or not. It is clear from BIMB’s Letter dated 21.1.2015 that UTB was not the cause for BIMB’s rejection of JVSB’s Facility Application; and

 

(g) for reasons elaborated in the above Part D(9), the 3 Concurrent Actions are lawful and UTB is not guilty of any abuse of court process.

 

126. The 2nd Defendant’s Counterclaim is obviously not sustainable against

 

UTB due to the following reasons:

 

(a) the 2nd Defendant has no “personal interest’ in the Charged Lands to file the Counterclaim against UTB – please see the above Part D(13);

 

(b) there is no Alleged Settlement Agreement – please see the above Part D(4);

 

(c) there is no Alleged Redemption Mechanism – please see the above Part D(5);

 

(d) according to Paragraph 18 (3rd Schedule), the 2nd Defendant is bound by the 2nd Ordinary Resolution dated 29.6.2010. As such, there was no act and/or omission on the part of UTB which could constitute a conspiracy with the Plaintiffs to injure the 2nd Defendant

 

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and/or to interfere with the 2nd Defendant’s contractual rights. This was because UTB’s acts in this case were lawfully based on the 2nd Ordinary Resolution dated 29.6.2010. Nor is there any evidence of UTB inducing the 1st Defendant’s Default;

 

(e) UTB could lawfully insist on the 75% Majority Requirement – please see the above Part D(7);

 

(f) the 2nd Defendant is bound by paragraphs 2(a)(ii) and 3(a) of his irrevocable 2nd Defendant’s Instruction dated 5.8.2014 (to UTB) from questioning UTB’s conduct in continuing with the Charge Proceedings;

 

(g) there were no Alleged Breaches by UTB (including the 2nd Defendant’s allegation regarding the aborted purchase of the Empress Hotel Land by JVSB) – please see the above Part D(6); and

 

(h) the 3 Concurrent Actions are lawful – please see the above Part D(9).

 

127. In addition to the above reasons, Court Enc. No. 9 should be allowed

 

with costs against both the Defendants because –

 

(a) UTB may rely on the following undisputed documentary evidence in this case –

 

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(i) the Trust Deed;

 

(ii) the 2nd Ordinary Resolution dated 29.6.2010;

 

(iii) the 2nd Defendant’s Instruction dated 5.8.2014;

 

(iv) the 1st Defendant’s Default in the form of the Dishonoured Cheque; and

 

(v) the 1st Defendant’s 3 consecutive applications for extension of time to make the 4th Payment (Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015);

 

(b) the Counterclaim against UTB does not raise any –

 

(i) question of fact which should go for trial;

 

(ii) question of mixed law and fact which should be tried in this case; and

 

(iii) intricate question of law which needs mature consideration as explained by Gopal JCA (as he then was) in the Federal Court case of Lai Yoke Ngan, at p. 588 (which was concurred by Mohd. Azmi FCJ, at p. 576);

 

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(c) the Counterclaim against UTB is bound to fail and cannot be saved by any amendment. Indeed, the Defendants have not applied to amend the Counterclaim after the filing of Court Enc. No. 9; and

 

(d) there is no deprivation of the Defendants’ constitutional right of access to justice, especially in view of the 1st Defendant’s Default and UTB’s trustee’s duties to carry out the 2nd Ordinary Resolution dated 29.6.2010.

 

128. Premised on the above reasons, the Defendants have no cause of action in this case against UTB. The Federal Court in a judgment given by Abdoolcader J (as he then was) in Yeng Hing Enterprise Sdn Bhd v Liow Su Fah [1979] 2 MLJ 240, at 244, has held that when a plaintiff has no cause of action against a defendant, the plaintiff’s suit is therefore vexatious, frivolous and an abuse of court process. Accordingly, I am constrained to allow Court Enc. No. 9 with costs on the following grounds:

 

(a) the Counterclaim is frivolous and/or vexatious within the meaning of Order 18 rule 19(1)(b) RC; and/or

 

(b) the Counterclaim constitutes an abuse of court process which should be struck out under Order 18 rule 19(1)(d) and Order 92 rule 4 RC as well as pursuant to the court’s inherent jurisdiction.

 

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129. For the sake of completeness, Court Enc. No. 9 is not allowed on these grounds:

 

(a) the Counterclaim is not scandalous as understood in Order 18 rule 19(1)(b) RC; and

 

(b) the Counterclaim does not prejudice, embarrass and/or delay the fair trial of this case as provided in Order 18 rule 19(1)(c) RC.

 

G. Court Enc. No. 11

 

130. At the hearing of Court Enc. No. 11, the Plaintiffs’ learned counsel, Ms. SM Yoong orally applied to amend Court Enc. No. 11 by deleting the reference in Court Enc. No. 11 to Order 18 rules 3 and 9 RC (Plaintiffs’ Oral Application). Learned counsel for both Defendants did not object to the Plaintiffs’ Oral Application. Such a concession is rightly made in the finest tradition of the Bar as there is absolutely no prejudice to the Defendants due to the above error in Court Enc. No. 11. Hence, I allowed the Plaintiffs’ Oral Application under Order 20 rule 8(1) RC. Order 20 rule 8 RC reads as follows:

 

“Amendment of certain other documents

 

Order 20 rule 8(1) For the purpose of determining the real question

 

in controversy between the parties to any proceedings, or of correcting any defect or error in any proceedings, the Court may at any stage of the proceedings and either of its own motion or on the application of any party to the proceedings order any document in the proceedings to be amended on such terms as to 127

 

costs or otherwise as may be just and in such manner, if any, as it may direct.

 

(2) This rule does not have effect in relation to a

 

judgment or order.”

 

(emphasis added).

 

G(1). Defendants’ submission

 

131. In resisting Court Enc. No. 11, both learned counsel for the 1st and 2nd Defendants contended as follows:

 

(a) the Plaintiffs had first breached the Alleged Settlement Agreement and in particular, the terms of the SPA, in respect of the Plaintiffs’ stand and conduct regarding BIMB’s Inquiry. Such a breach had resulted in loss and damage to the Defendants when JVSB aborted its purchase of the Empress Hotel Land. In view of the Plaintiffs’ breach of the Alleged Settlement Agreement –

 

(i) the Plaintiffs’ notice to the 1st Defendant to remedy the 1st Defendant’s Default, was null and void; and

 

(ii) the Defendants are only required to perform their obligations under the Alleged Settlement Agreement upon reciprocal

 

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performance of the same by the Plaintiffs and the time for performance of the SPA is now at large;

 

(b) the Plaintiffs had dishonestly and/or knowingly assisted, aided, abetted and/or was an accessory to the Alleged Breaches by UTB;

 

(c) the Plaintiffs and UTB had conspired to injure the Defendants and/or interfere with the Defendants’ contractual rights which had resulted in loss and damage to the Defendants;

 

(d) as the Plaintiffs are seeking a SP Order of the SPA in This Suit, the Plaintiffs have affirmed the continuance of the SPA. As such, the Defendants’ right to sell the Charged Lands under the Alleged Redemption Mechanism can be similarly enforced by the Defendants;

 

(e) the simultaneous Charge Proceedings by UTB and enforcement of the Put Option Judgment by the 1st and 2nd Plaintiffs –

 

(i) are contrary to the relief sought by the Plaintiffs in This Suit;

 

(ii) constitute an abuse of court process;

 

(iii) are unconscionable; and/or

 

(iv) will destroy the “integrity” of the Alleged Settlement Agreement.

 

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Premised on the above reasons, UTB, the 1st and 2nd Plaintiffs are estopped from proceeding concurrently with the Charge Proceedings and enforcement of the Put Option Judgment; and

 

(f) the Plaintiffs’ forfeiture of the Deposit and Ex Gratia Sum amounting to RM15.6 million is invalid.

 

132. In opposing Court Enc. No. 11, both the Defendants had relied on the same cases cited in resisting Court Enc. No. 9.

 

G(2). Application of Order 18 rule 19(1)(a) RC

 

133. As required by Order 18 rule 19(2) RC and the Court of Appeal’s judgment in See Thong, in considering whether the Counterclaim should be struck out under Order 18 rule 19(1)(a) RC (whether Counterclaim discloses reasonable cause of action), the court cannot consider any affidavit evidence. Furthermore, the court will assume that the contents of the Counterclaim are true – please see Tuan Haji Ishak bin Ismail, at p. 679.

 

134. A perusal of the Counterclaim discloses the following causes of action pleaded by the Defendants against the Plaintiffs:

 

(a) the Plaintiffs had breached the Alleged Settlement Agreement;

 

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(b) the Plaintiffs had breached the SPA;

 

(c) tort of abuse of court process had been committed by the Plaintiffs;

 

(d) the Plaintiffs had dishonestly and/or knowingly assisted, aided, abetted and/or was an accessory to the Alleged Breaches by UTB;

 

(e) the Plaintiffs and UTB had conspired to injure the Defendants and/or interfere with the Defendants’ contractual rights which had resulted in loss and damage to the Defendants; and

 

(f) the Plaintiffs and UTB, jointly and/or severally, have committed the tort of inducing the 1st Defendant to breach the SPA.

 

135. As the Counterclaim has disclosed the above causes of action against the Plaintiffs, Court Enc. No. 11 cannot be allowed under Order 18 rule 19(1)(a) RC.

 

G(3). Application of Order 18 rule 19(1)(b) and/or (d) RC as well as court’s inherent jurisdiction

 

136. I will now decide Court Enc. No. 11 based on Order 18 rule 19(1)(b), (d) and/or Order 92 rule 4 RC as well as pursuant to the court’s inherent jurisdiction. For this purpose, affidavit evidence may be considered by the court – See Thong.

 

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137. It is plain and obvious that the Counterclaim by both the Defendants is

 

not sustainable against the Plaintiffs:

 

(a) there is no Alleged Settlement Agreement – please see the above Part D(4). As such, the Plaintiffs have not breached Alleged Settlement Agreement;

 

(b) there is no Alleged Redemption Mechanism – please see the above Part D(5);

 

(c) the Plaintiffs have not breached the SPA – please see the above Part D(8). As previously explained, in the light of BIMB’s Letter dated 21.1.2015, the Plaintiffs could not be the cause for BIMB’s rejection of JVSB’s Facility Application;

 

(d) the 1st Defendant’s Default is clear from the following uncontroverted contemporaneous documentary evidence –

 

(i) the 1st Defendant presented the Dishonoured Cheque to the Plaintiffs. Such a conduct by the 1st Defendant is clearly inconsistent with the Alleged Settlement Agreement and Alleged Redemption Mechanism;

 

(ii) the 1st Defendant then made 3 consecutive applications to the Plaintiffs for extension of time to rectify the 1st Defendant’s Default (Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and

 

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23.2.2015) . The Plaintiffs were magnanimous in granting 2 extensions of time for the 1st Defendant to remedy the 1st Defendant’s Default (Messrs SLB’s Letters dated 28.1.2015 and

 

17.2.2015) ; and

 

(iii) the 1st Defendant did not reply to Messrs SLB’s 2 Demands dated 25.3.2015;

 

(e) upon the 1st Defendant’s Default, the Plaintiffs could lawfully forfeit the Deposit and Ex Gratia Sum pursuant to clauses 2.4, 9.2(a) and

 

(b) SPA. Moreover, clause 11.1 SPA provides that any payment made to the Plaintiffs “shall be non-refundable” (please see the above paragraph 73);

 

(f) there was no evidence of the Alleged Breaches by UTB – please see the above Part D(6). As such, the Plaintiffs could not have dishonestly and/or knowingly assisted, aided, abetted and/or was an accessory to the Alleged Breaches by UTB;

 

(g) in view of the 1st Defendant’s Default, the Plaintiffs’ legitimate enforcement of their rights under the SPA could not constitute –

 

(i) a tort of abuse of court process;

 

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(ii) a conspiracy to injure the Defendants and/or interfere with the Defendants’ contractual rights which had resulted in loss and damage to the Defendants; and

 

(iii) a tort of inducing the 1st Defendant’s Default or any breach of the SPA by the Defendants;

 

(h) the Plaintiffs’ alternative prayer for a SP Order in This Suit does not confer on the Defendants a cause of action for breach of the SPA when the Plaintiffs have not breached the SPA; and

 

(i) This Suit by the Plaintiffs and the concurrent enforcement of the Put Option Judgment by the 1st and 2nd Plaintiffs are lawful – please see the above Part D(9).

 

138. Court Enc. No. 11 is on a stronger footing as against the 2nd Defendant. This is due to the following reasons:

 

(a) pursuant to the Guarantee –

 

(i) the 2nd Defendant “irrevocably and unconditionally agrees, undertakes with and guarantees” to the Plaintiffs the due, punctual and full performance by the 1st Defendant of the 1st Defendant’s obligations and liability to pay the Guaranteed Sum under the SPA – clause 2.1 (a) Guarantee; and

 

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(ii) according to clause 14 Guarantee, 5 certificates, one each by the 5 Plaintiffs’ authorized officers (Plaintiffs’ 5 Certificates) [which stated that both the Defendants were indebted to the Plaintiffs in respect of the Balance Purchase Price (RM124,489,509.27)], shall, in the absence of manifest error, be binding and conclusive as against the 2nd Defendant for all purposes and shall be conclusive evidence against the 2nd Defendant in all courts of law. The following 3 Federal Court cases have held that in the absence of fraud or manifest error, the 2nd Defendant is bound by the Plaintiffs’ 5 Certificates:

 

(1) the judgment delivered by Raja Azlan Shah CJ (Malaya) (as His Royal Highness then was) in Citibank NA v Ooi Boon Leong & Ors [1981] 1 MLJ 282, at 284;

 

(2) the judgment of Steve Shim CJ (Sabah & Sarawak) Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 3 CLJ 544 at 691-692; and

 

(3) the decision of Arifin Zakaria CJ in Hong Leong Bank Bhd v M Muthiah @ Nagappan & Anor and another appeal

 

[2014] 1 MLJ 1, at 11 (Muthiah).

 

The 2nd Defendant is therefore barred by clause 14 Guarantee and the Plaintiffs’ 5 Certificates from filing the Counterclaim to challenge the Plaintiffs’ right to claim the Balance Purchase Price from the 2nd Defendant;

 

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(b) the 2nd Defendant did not reply to Messrs SLB’s Demand dated 24.2.2015; and

 

(c) the 2nd Defendant is barred by the second limb of the res judicata doctrine, the issue estoppel principle, from challenging the validity of the HC’s Sale Orders – please see the above Part D(17).

 

139. The following reasons fortify Court Enc. No. 11:

 

(a) the Counterclaim against the Plaintiffs is inconsistent with the

 

following undisputed documentary evidence in this case –

 

(i) the SPA;

 

(ii) the Guarantee;

 

(iii) the 1st Defendant’s Default by way of the Dishonoured Cheque;

 

(iv) the 1st Defendant 3 consecutive applications to the Plaintiffs for extension of time to remedy the 1st Defendant’s Default (Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015);

 

(v) the Plaintiffs’ 2 extensions of time for the 1st Defendant to remedy the 1st Defendant’s Default (Messrs SLB’s Letters dated 28.1.2015 and 17.2.2015);

 

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(vi) the 1st Defendant’s failure to reply to Messrs SLB’s Demand dated 24.2.2015; and

 

(vii) the 1st Defendant’s failure to reply to Messrs SLB’s 2 Demands dated 25.3.2015;

 

(b) the Counterclaim against the Plaintiffs does not raise any –

 

(i) issue of fact to be tried;

 

(ii) question of mixed law and fact which ought to be tried in this case; and

 

(iii) complicated question of law which require a trial (as explained in Lai Yoke Ngan);

 

(c) the Counterclaim against the Plaintiffs is bound to fail and cannot be saved by any amendment; and

 

(d) the Defendants have not been deprived of their constitutional right of access to justice, especially in view of the 1st Defendant’s Default and the Plaintiffs have been lawfully deprived of what is rightfully due to the Plaintiffs under the RCSN since the 2nd Ordinary Resolution dated 29.6.2010.

 

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140. Based on the above reasons and the Federal Court case of Yeng Hing Enterprise Sdn Bhd, at p. 244, I have no hesitation to allow Court Enc. No. 11 as it is plain and obvious that both the Defendants have no cause of action against the Plaintiffs. Accordingly, the Counterclaim is struck out with costs on the following grounds:

 

(a) the Counterclaim is frivolous and/or vexatious within the meaning of Order 18 rule 19(1)(b) RC. For avoidance of doubt, the Counterclaim is not struck out on the ground that the Counterclaim is scandalous under Order 18 rule 19(1)(b) RC; and/or

 

(b) the Counterclaim constitutes an abuse of court process which should be struck out under Order 18 rule 19(1)(d) and Order 92 rule 4 RC as well as under the court’s inherent jurisdiction.

 

H. Court Enc. No. 12

 

141. In determining Court Enc. No. 12, I am not bound in any manner by my decision and reasons in respect of Court Enc. Nos. 9, 11 and 22. I am duty bound to consider afresh Court Enc. No. 12 – Lambang Pertama Sdn Bhd.

 

H(1). Should court exercise discretion to grant SP Order against 1st Defendant?

 

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142. In Court Enc. No. 12, as against the 1st Defendant, the Plaintiffs have applied for firstly, a SP Order or alternatively, the 1st Defendant to pay damages to the Plaintiffs for breach of the SPA.

 

143. The question that arises is whether the Court should exercise its discretion to grant a SP Order against the 1st Defendant under Order 81 rule 1(1)(a) RC or proceed to decide only on whether the Plaintiffs may apply for summary judgment against the 1st Defendant for damages for breach of the SPA under Order 14 rule 1(1) RC.

 

144. Sections 11, 13 to 16, 20 and 21 SRA provide as follows:

 

“Cases in which specific performance enforceable 11(1) Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the court, be enforced –

 

(a) when the act agreed to be done is in the performance, wholly or partly, of a trust;

 

(b) when there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done;

 

(c) when the act agreed to be done is such that pecuniary compensation for its non-performance would not afford adequate relief; or

 

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(d) when it is probable that pecuniary compensation cannot be got for the non-performance of the act agreed to be done.

 

11(2) Unless and until the contrary is proved, the court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer movable property can be thus relieved.

 

Specific performance of part of contract where part unperformed is

 

small

 

13. Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value, and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.

 

Specific performance of part of contract where part unperformed is large

 

14. Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed forms a considerable portion of the whole, or does not admit of compensation in money, he is not entitled to obtain a decree for specific performance. But the court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the

 

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contract as he can perform, provided that the plaintiff relinquishes all claim to further performance, and all right to compensation either for the deficiency, or for the loss or damage sustained by him through the default of the defendant.

 

Specific performance of independent part of contract

 

15. When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part.

 

Bar in other cases of specific performance of part of contract

 

16. The court shall not direct the specific performance of a part of a contract except in cases coming under one or other of the three last preceding sections.

 

Contracts not specifically enforceable

 

20(1) The following contracts cannot be specifically enforced:

 

(a) a contract for the non-performance of which compensation in money is an adequate relief;

 

(b) a contract which runs into such minute or numerous details, or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;

 

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(c) a contract the terms of which the court cannot find with reasonable certainty;

 

(d) a contract which is in its nature revocable;

 

(e) a contract made by trustees either in excess of their powers or in breach of their trust;

 

(f) a contract made by or on behalf of a corporation or public company created for special purposes, or by the promoters of the company, which is in excess of its powers;

 

(g) a contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date; and

 

(h) a contract of which a material part of the subject matter supposed by both parties to exist, has, before it has been made, ceased to exist.

 

(2) Save as provided by the law relating to civil procedure, no

 

contract to refer a controversy to arbitration shall be specifically enforced.

 

Discretion as to decreeing specific performance

 

21(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant any such relief merely because it is lawful to do so; but the

 

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discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

 

(2) The following are cases in which the court may properly exercise a discretion not to decree specific performance:

 

(a) where the circumstances under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiff’s part; and

 

(b) Where the performance of a contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff.

 

(3) A case in which the court may properly exercise a discretion to decree specific performance is where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance ”

 

(emphasis added).

 

145. Order 81 rules 1(1) and 3 RC state as follows:

 

“Application by plaintiff for summary judgment

 

Order 81 rule 1(1) In an action begun by writ endorsed with a claim

 

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(a) for specific performance of an agreement (whether in writing or not) for the sale, purchase or exchange of any property, or for

 

the grant or assignment of a lease of any property, with or without an alternative claim for damages;

 

(b) for rescission of such an agreement; or

 

(c) for the forfeiture or return of any deposit made under such an agreement,

 

the plaintiff may, on the ground that the defendant has no defence to the action, apply to the Court for judgment.

 

Judgment for plaintiff

 

Order 81 rule 3 Unless on the hearing of an application under

 

rule 1 either the Court dismisses the application or the defendant satisfies the Court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of the action, the Court may give judgment for the plaintiff in the action ”

 

(emphasis added).

 

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146. It is clear from s 21(1) SRA that the court has discretion to grant a SP Order or otherwise. I rely on the following appellate cases (in chronological order:

 

(a) the Privy Council’s opinion delivered by Lord Russell in an appeal from Malaysia, Zaibun Sa Binti Syed Ahmad v Loh Koon Moy & Anor [1982] 2 MLJ 92, at 94;

 

(b) the Federal Court case of Ganam, at 297;

 

(c) the Supreme Court’s judgment delivered by Lee Hun Hoe CJ (Borneo) in Sekemas Sdn Bhd v Lian Seng Co Sdn Bhd [1989] 2 MLJ 155, at 156

 

(d) Gopal Sri Ram JCA’s (as he then was) judgment in the Court of Appeal case of Loo Choo Teng & Anor v Cheok Swee Lee & Ors and another appeal [2000] 2 MLJ 257, at 264; and

 

(e) the Court of Appeal’s judgment delivered by Gopal Sri RAM JCA in See Teow Chuan & Anor v YAM Tunku Nadzaruddin Ibni Tuanku Jaafar & Ors [2007] 2 CLJ 82, at 92-93.

 

147. Whether a SP Order is granted or not in a case, depend on the exercise of the court’s discretion based on the particular evidence adduced in that case. According to Mahadev Shankar JCA’s judgment in the Court of Appeal case of Structural Concrete Sdn Bhd v Wing Tiek Holdings

 

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Bhd [1997] 1 CLJ 300, at 306, the exercise of judicial discretion in a certain case is not a binding precedent from the view point of the stare decisis doctrine. As such, cases wherein SP Orders have been made or otherwise, should be read in light of the particular facts of those cases.

 

148. I am of the view that I should not exercise my discretion to grant the SP Order in Court Enc. No. 12 against the 1st Defendant. My first reason is because damages for breach of the SPA are an adequate remedy for the Plaintiffs as against the 1st Defendant. Sections 11(1)(c), (d) and 20(1)(a) SRA clearly provide that a SP Order should not be granted when damages is an adequate relief. In fact, the Plaintiffs resisted Court Enc. No. 22 on, among others, the ground that damages was an sufficient remedy for the Defendants [please see the above Part D(10)]. What is sauce for the goose is also sauce for the gander.

 

149. The second reason why this court declines to exercise its discretion to grant the SP Order against the 1st Defendant is that the 1st Defendant has partially performed the SPA by paying the Deposit, the 2nd and 3rd Payments. The Plaintiffs are only seeking a SP Order of part of the SPA against the 1st Defendant. The legal burden is on the Plaintiffs to satisfy this court to exercise its discretion to grant a SP Order of part of the SPA against the 1st Defendant under s 16 SRA read with one of the following provisions –

 

(a) s 13 SRA;

 

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(b) s 14 SRA; or

 

(c) s 15 SRA.

 

Our ss 13 to 16 SRA are based on ss 14 to 17 SRA 1877 (India). Sections 14 to 17 SRA 1877 (India) have now been “amalgamated” in s 12 SRA 1963 (India). In William Graham v Krishna Chandra Dey AIR 1925 PC 45, an appeal to the Privy Council from India, Lord Sumner held as follows –

 

“Ss. 14 to 17 inclusive of the [SRA 1877 (India)], are both positive and negative in their form. Taken together they constitute a complete code, within the terms of which relief of the character in question must be brought, if it is to be granted at all. Although assistance may be derived from a consideration of cases upon this branch of English jurisprudence, the language of the sections must ultimately prevail.

 

S. 17 prescribes that there shall be no grant of specific performance except in cases coming within one or other of the three previous sections.”

 

(emphasis added).

 

I am of the opinion that the Plaintiffs cannot rely on ss 13 to 15 SRA to seek a SP Order for part of the SPA against the 1st Defendant. My reasons are as follows –

 

(i) s 13 SRA does not apply to the 1st Defendant because the unperformed part of the SPA required of the 1st Defendant, did not

 

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bear “a small proportion” in value to the “whole” part of the SPA (required to be performed by the 1st Defendant). To the contrary, the unperformed part of the SPA required of the 1st Defendant, consists of, among others, the 4th and 5th Payments which are substantial in value;

 

(ii) s 14 SRA only applies –

 

(1) to direct the 1st Defendant to perform “specifically so much” of the 1st Defendant’s part of the SPA as the 1st Defendant can perform; and

 

(2) the Plaintiffs relinquish “all claim” to further performance of the SPA by the 1st Defendant.

 

In This Suit, the Plaintiffs apply for a SP Order of the entire unperformed part of the SPA. Furthermore, the Plaintiffs are not relinquishing any claim to further performance of the SPA by the 1st Defendant; and

 

(iii) the Plaintiffs cannot rely on s 15 SRA which allows a SP Order to be given to enforce part of a contract which is independent from the other parts of the SPA. This is because the SPA is a “sole and entire agreement’ according to clause 11.9 SPA.

 

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150. If I have granted a SP Order for the Plaintiffs against the 1st Defendant and if the 1st Defendant subsequently fails to comply with the SP Order, the Plaintiffs are at liberty to cite the directors of the 1st Defendant for contempt of the SP Order. I am most reluctant to go down this path as the Plaintiffs have a sufficient remedy in damages against the 1st Defendant. This is the third reason why I cannot accede to the Plaintiffs’ application for a SP Order against the 1st Defendant.

 

151. Based on the above 3 reasons, I refuse the Plaintiffs’ application for a SP Order of the SPA against the 1st Defendant in Court Enc. No. 12.

 

H(2). Relevant principles in deciding summary judgment applications

 

152. Before deciding the Plaintiffs’ summary judgment application against the Defendants under Order 14 RC, I am guided by the following trite principles in deciding Court Enc. No. 12:

 

(a) once the Plaintiffs have fulfilled the following 3 matters required by Order 14 rules 1(1) and 2(1) RC, namely –

 

(i) the SOC has been served on the Defendants;

 

(ii) the Defendants have entered appearance; and

 

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(iii) the Plaintiffs’ deponent (Plaintiffs’ Deponent) has affirmed an affidavit verifying the facts on which the SOC is based and the belief of the Plaintiffs’ Deponent that there is no defence by the Defendants to the SOC

 

– the burden then shifts to the Defendants to resist Court Enc. No. 12 by satisfying the court under Order 14 rules 3(1) and 4(1) RC that there is “an issue or question in dispute which ought to be tried”. This is clear from the following 2 Federal Court cases –

 

(1) please see George Seah FJ’s (as he then was) judgment in National Company for Foreign Trade v Kayu Raya Sdn

 

Bhd [1984] 1 CLJ (Rep) 283, at 285; and

 

(2) Cempaka Finance Bhd, at p. 551-552; and

 

(b) even if the Defendants cannot raise any triable issue, Court Enc. No. 12 may still be dismissed under Order 14 rule 3(1) RC if “there ought for some other reason to be a trial”, namely there are circumstances that ought to be investigated by the court – please see the Federal Court’s judgment delivered by Mohd. Dzaiddin FCJ (as he then was)

 

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in United Merchant Finance Bhd v Majlis Agama Islam Negeri Johor [1999] 1 MLJ 657, at 666-668.

 

153. Based on the above principles, I will first decide whether the Defendants have raised any issue to be tried in This Suit and assuming the Defendants are not able to raise any triable issue, is there “some other reason for trial”?

 

H(3). Defendants’ contentions

 

154. The 1st Defendant’s learned counsel advanced the following submission in resisting Court Enc. No. 12:

 

(a) the 1st Defendant is entitled to rely on the Counterclaim which is “clearly connected” with the subject matter of This Suit. As such, the 1st Defendant can rely on the triable issues raised in the Counterclaim to oppose Court Enc. No. 12;

 

(b) there are issues to be tried in This Suit such as whether the Plaintiffs have breached the Alleged Settlement Agreement in respect of –

 

(i) the Plaintiffs’ insistence on the 75% Majority Requirement;

 

(ii) BIMB’s Inquiry; and

 

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(iii) the Alleged Redemption Mechanism.

 

The above issues can only be resolved by way of oral evidence adduced by witnesses at a trial of This Suit;

 

(c) the Plaintiffs cannot be allowed to take advantage of their own wrong in breaching the Alleged Settlement Agreement;

 

(d) the Plaintiffs are not entitled to file This Suit concurrent with the 2 Bankruptcy Cases commenced by the 1st and 2nd Plaintiffs; and

 

(e) the Plaintiffs’ ‘‘ill intention” is shown when the Plaintiffs applied for a SP Order of the SPA against the 1st Defendant;

 

155. The 1st Defendant cites the following cases (in the order of presentation in the 1st Defendant’s written submission) to support a dismissal of Court Enc. No. 12 with costs:

 

(a) the High Court case of RHB Bank Bhd v Tan Swee Long Holdings Sdn Bhd & Ors [2008] 3 MLJ 130;

 

(b) the Federal Court’s decision in Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd [1985] 1 MLJ 157;

 

(c) the Supreme Court case of Bank Negara Malaysia v Mohd Ismail

 

& Ors [1992] 1 MLJ 400;

 

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(d) the High Court’s judgment in Tetuan Kumar Jaspal Quah & Aishah v Far Legion Sdn Bhd & anor [2003] 6 MLJ 95;

 

(e) the Court of Appeal case of Su Wee Lip @ Philip Su v Hj Lassim Abdul Rahman [2009] 1 MLJ 580;

 

(f) Sababumi (Sandakan) Sdn Bhd;

 

(g) Lai Yoke Ngan; and

 

(h) the Court of Appeal’s judgment in UNP Plywood Sdn Bhd v HSBC Bank Malaysia Bhd [2010] 5 MLJ 323.

 

156. In opposing Court Enc. No. 12, the 2nd Defendant’s learned counsel raised essentially the same submission as the 1st Defendant. The 2nd Defendant relied on the following cases (in addition to the cases cited by the 1st Defendant’s learned counsel):

 

(a) Meeriam Rosaline;

 

(b) MJC City Development Sdn Bhd;

 

(c) Business Chinese Directory Sdn Bhd;

 

(d) Oh Thevesa;

 

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(e) Abdul Rahim bin Abdul Hamid;

 

(f) Sivakumar;

 

(g) Omega Holdings Bhd;

 

(h) Glamour Green Sdn Bhd;

 

(i) the Court of Appeal case of Noh Hyoung Seok v Perwira Affin

 

Bank Bhd [2004] 2 MLJ 203;

 

(j) Lai Yoke Ngan;

 

(k) Sababumi (Sandakan) Sdn Bhd;

 

(l) the High Court’s decision in Eng Say Kuang v Hong Leong Bank

 

Bhd [2008] MLJU 38; and

 

(m) Poon Guan Sdn Bhd.

 

H(4). No triable issue regarding 1st Defendant’s Default

 

157. Firstly, the 1st Defendant cannot rely on the Counterclaim as it is plain and obvious that the Counterclaim is not sustainable against the Plaintiffs – please see the above Part G(3). Furthermore, the

 

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Counterclaim is an afterthought which is only filed after the Plaintiffs have commenced This Suit with the intention of stifling the Plaintiffs’ lawful claim in this case.

 

158. I have dismissed the Plaintiffs’ application for a SP Order of the SPA against the 1st Defendant. In any event, an alternative prayer for relief by the Plaintiffs cannot constitute a triable issue in itself to refuse Court Enc. No. 12.

 

159. I am of the view that the 1st Defendant has failed to discharge the burden to raise a triable issue in This Suit. This decision is made for the following reasons:

 

(a) there is no Alleged Settlement Agreement – please see the above Part D(4). As such, the Plaintiffs have not breached Alleged Settlement Agreement;

 

(b) there is no Alleged Redemption Mechanism – please see the above Part D(5);

 

(c) the Plaintiffs have not breached the SPA – please see the above Part D(8). As previously explained, in the light of BIMB’s Letter dated 21.1.2015, the Plaintiffs could not be the cause for BIMB’s rejection of JVSB’s Facility Application;

 

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(d) the 1st Defendant’s Default is clear from the following undisputed

 

contemporaneous documentary evidence –

 

(i) the 1st Defendant had presented the Dishonoured Cheque to the Plaintiffs. This conduct by the 1st Defendant was clearly inconsistent with the Alleged Settlement Agreement, Alleged Redemption Mechanism and all the alleged triable issues now raised in this case by the 1st Defendant;

 

(ii) the 1st Defendant made 3 consecutive applications to the Plaintiffs for extension of time to rectify the 1st Defendant’s Default (Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015) (3 Applications for Extension of Time). None of Messrs RORL’s Letters dated 19.1.2015, 6.2.2015 and 23.2.2015 refer to any of the alleged triable issues now used by the 1st Defendant to resist Court Enc. No. 12;

 

(iii) the Plaintiffs had granted 2 extensions of time for the 1st Defendant to remedy the 1st Defendant’s Default (Messrs SLB’s Letters dated 28.1.2015 and 17.2.2015). Such a conduct by the Plaintiffs support Court Enc. No. 12. If the Defendants had issued a demand against the Plaintiffs in respect of any or all of the alleged triable issues raised in the Defence and Counterclaim, the Plaintiffs would not have granted even one extension of time to the 1st Defendant to rectify the 1st Defendant’s Default; and

 

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(iv) the 1st Defendant did not reply to Messrs SLB’s 2 Demands dated 25.3.2015. Such a failure is fatal to the 1st Defendant according to the Court of Appeal cases of David Wong Hon Leong and Jetara Sdn Bhd;

 

(e) the 1st Defendant is estopped from raising all the alleged triable issues in this case by reason of the 1st Defendant’s conduct in respect of the Dishonoured Cheque and 3 Applications for Extension of Time – please see Gopal Sri Ram JCA’s (as he then was) judgment in the Federal Court case of Boustead Trading (1985) Sdn Bhd, at p. 294;

 

(f) upon the 1st Defendant’s Default, the Plaintiffs could lawfully forfeit the Deposit and Ex Gratia Sum pursuant to clauses 2.4, 9.2(a) and (b) SPA – please see the above paragraph 73. Moreover, clause 11.1 SPA provides that any payment made to the Plaintiffs “shall be non-refundable

 

(g) there was no evidence of the Alleged Breaches by UTB – please see the above Part D(6). As such, the Plaintiffs could not have dishonestly and/or knowingly assisted, aided, abetted and/or was an accessory to the Alleged Breaches by UTB;

 

(h) in view of the 1st Defendant’s Default, the Plaintiffs’ legitimate enforcement of their rights under the SPA could not constitute –

 

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(i) a tort of abuse of court process;

 

(ii) a conspiracy to injure the Defendants and/or interfere with the Defendants’ contractual rights which had resulted in loss and damage to the Defendants; and

 

(iii) a tort of inducing the 1st Defendant’s Default or any breach of the SPA by the Defendants; and

 

(i) the 3 Concurrent Actions are lawful – please see the above Part D(9).

 

H(5). 2nd Defendant is liable under Guarantee

 

160. As explained in the above Part G(3), the Counterclaim has been struck out with costs. Hence, the 2nd Defendant cannot rely on the Counterclaim to oppose Court Enc. No. 12.

 

161. It is clear that the 2nd Defendant is not able to discharge the onus to raise a triable matter in this case. This is due to the following reasons:

 

(a) as the 2nd Defendant is a party to the SPA, the 2nd Defendant is bound by the SPA. Accordingly, all the reasons supporting the 1st

 

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Defendant’s Default [as explained in the above Part H(4)] apply to support Court Enc. No. 12 against the 2nd Defendant; and

 

(b) the 2nd Defendant is liable to the Plaintiffs under the following provisions of the Guarantee –

 

(i) according to clause 2.1(b), the 2nd Defendant is liable to the Plaintiffs upon service of Messrs SLB’s Demand dated 24.2.2015. This is because the Guarantee is an “on demand” guarantee. I rely on the following 3 decisions of our apex courts which have decided that on the construction of the guarantees in those cases, a demand against the guarantors in question, constituted a condition precedent for establishing liability against those guarantors –

 

(1) Salleh Abas LP’s judgment in the Supreme Court case of Mok Hin Wah & Ors v United Malayan Banking Corp Bhd

 

[1987] 2 MLJ 610, at 610-611;

 

(2) the Supreme Court’s judgment given by Lee Hun Hoe CJ (Borneo) in Orang Kaya Menteri Paduka Wan Ahmad Isa Shukri bin Wan Rashid v Kwong Yik Bank Berhad [1989] 3 MLJ 155, at 156-157; and

 

(3) Muthiah, at p. 9; and

 

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(ii) the 2nd Defendant’s failure to reply to Messrs SLB’s Demand dated 24.2.2015, supports Court Enc. No. 12 against the 2nd Defendant – David Wong Hon Leong and Jetara Sdn Bhd. Furthermore, clause 23 has deemed time to be the essence of the Guarantee;

 

(iii) clauses 2.2 and 26 provide that the 2nd Defendant is liable to the Plaintiffs as a “sole principal obligor’ and a principal debtor respectively. The effect of clause 26 is far-reaching according to Zulkefli Makinuddin CJ (Malaya)’s judgment in the Federal Court case of Andrew Lee Siew Ling v United Overseas Bank (M) Bhd [2013] 1 MLJ 449, at 459-460;

 

(iv) the 2nd Defendant is bound under clause 10 to indemnify the Plaintiffs. I rely on the following appellate cases –

 

(1) Andrew Lee Siew Ling, at p. 459-460; and

 

(2) Gopal Sri Ram JCA’s (as he then was) judgment in the Court of Appeal case of Sia Siew Hong [1995] 3 MLJ 141, at 147-148;

 

(v) the Plaintiffs’ 5 Certificates are binding and conclusive as against the 2nd Defendant under clause 14. Please see Citibank NA, Cempaka Finance Bhd and Muthiah;

 

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(vi) according to clause 3(b), the Guarantee is a “continuing security’. The effect of a continuing Guarantee means that the 2nd Defendant is not only liable for the Balance Purchase Price but all accrued interest – Muthiah, at p. 12; and

 

(vii) clause 5.1 provides that until all sums payable by the 1st Defendant under the SPA have been received by the Plaintiffs, the 2nd Defendant’s liability under the Guarantee “shall not be discharged or released” (No Release Clause).

 

H(6). No other reason for trial in this case

 

162. I find that there is no circumstance in This Suit which ought to be investigated as explained in United Merchant Finance Bhd. Hence, there is no other reason for trial of this case under Order 14 rule 3(1) RC.

 

H(7). Summary judgment under Order 14 RC

 

163. Based on the above reasons, I allow Court Enc. No. 12 and grant summary judgment with costs against the Defendants (Summary Judgment) as follows:

 

(a) the 1st Defendant shall pay RM124,489,509.27 as damages for the breach of the SPA in the following manner –

 

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(i) RM51,061,357.47 to the 1st Plaintiff;

 

(ii) RM12,002,103.48 to the 2nd Plaintiff;

 

(iii) RM14,809,103.46 to the 3rd Plaintiff;

 

(iv) RM18,252,141.75 to the 4th Plaintiff; and

 

(v) RM28,364,803.11 to the 5th Plaintiff

 

(5 Sums);

 

(b) the 1st Defendant shall pay to the Plaintiffs interest on each of the 5 Sums at the rate of 5% per annum from the date of the Summary Judgment until the date of full settlement of the 5 Sums;

 

(c) the 2nd Defendant shall pay RM124,489,509.27 to the Plaintiffs in the manner as per the 5 Sums; and

 

(d) the 2nd Defendant shall pay to the Plaintiffs interest on each of the 5 Sums at the rate of 5% per annum from the date of the Summary Judgment until the date of full settlement of the 5 Sums.

 

I. Defendants’ cases can be distinguished

 

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164. Both the Defendants’ learned counsel have cited an impressive array of cases for the above 4 applications. To avoid lengthening this judgment, without any disrespect to learned counsel, I will not discuss all the cases relied on by the parties in this case.

 

165. All the cases relied on by the Defendants can be distinguished on one or more of the following grounds:

 

(a) the existence of the Trust Deed with Paragraph 18 (Schedule 3), clauses 22.1(c), 33.2, paragraph 9.1 of Schedule 1 (Part 2), paragraphs 2 and 17 of Schedule 3;

 

(b) the 2nd Ordinary Resolution dated 29.6.2010 has been passed by the holders of RCSN;

 

(c) the Put Option Judgment has been obtained by the 1st and 2nd Plaintiffs against the 2nd Defendant;

 

(d) the HC’s Sale Orders of the Charged Lands have been made;

 

(e) the SPA has an Entire Agreement Clause and Concurrent Action Clause which bind both the Defendants;

 

(f) the Guarantee has provisions for “on demand liability”, liability of “sole principal obligor’, principal debtor’s liability, indemnity,

 

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conclusiveness of the Plaintiffs’ 5 Certificates, “continuing security and No Release Clause;

 

(g) 2nd Defendant’s Instruction dated 5.8.2014 has been issued by the 2nd Defendant to UTB;

 

(h) the 1st Defendant’s Default in the form of the Dishonoured Cheque;

 

(i) 3 Applications for Extension of Time by the 1st Defendant;

 

(j) the Plaintiffs granted 2 extensions of time for the 1st Defendant to remedy the 1st Defendant’s Default; and/or

 

(k) the failure of the 1st and 2nd Defendants to reply to Messrs SLB’s 2 Demands dated 25.3.2015 and Messrs SLB’s Demand dated 24.2.2015 respectively.

 

J. Court’s decision on 4 applications

 

166. Premised on the above reasons:

 

(a) Court Enc. No. 22 is dismissed with costs;

 

(b) Court Enc. No. 9 and 11 are allowed with costs on the following grounds only –

 

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(i) the Counterclaim is frivolous and/or vexatious under Order 18 rule 19(1)(b) RC; and/or

 

(ii) the Counterclaim constitutes an abuse of court process under Order 18 rule 19(1)(d) and Order 92 rule 4 RC as well as under the court’s inherent jurisdiction; and

 

(c) Court Enc. No. 12 is allowed with costs only in respect of the Summary Judgment for damages (against the 1st Defendant) and monetary compensation (against the 2nd Defendant). No SP Order of part of the SPA is granted against the 1st Defendant.

 

167. I must end by expressing my gratitude to all learned counsel for their clear and detailed written submission without which this judgment is not possible.

 

WONG KIAN KHEONG

 

Judicial Commissioner High Court (Commercial Division) Kuala Lumpur

 

DATE: 29 DECEMBER 2015

 

Counsel for Plaintiffs:

 

Ms. Yoong Sin Min, Ms. Kong Chia Yee & Ms. Joanne Chong (Messrs Shook Lin & Bok)

 

Counsel for 1s Defendant:

 

st

 

Mr. Mark Ho & Ms. Jamie Wong (Messrs Jamie Wong)

 

Counsel for 2nd Defendant:

Dato’ Kirubakaran a/ Karthigesu, Ms. Kelly Khoo Seo Ju & Mr. Teo Wee Shiuan (Messrs Malis & Khoo)

 

Counsel for 6 Defendant (in Counterclaim):

 

,th

 

Mr. S. Ramesh & Ms. Melissa Tai (Messrs Adnan Sundra & Low)

 

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