BetweenOmega Securities Sdn Bhd(Company No. : 97791 – U) … PlaintiffAndTan Tek Sin(Nric No: 501104-10-5321) … Defendant

  

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

 

SUIT NO: D2 – 22 – 2834 – 1999

 

BETWEEN

 

OMEGA SECURITIES SDN BHD

 

(Company No. : 97791 – U) … PLAINTIFF

 

AND

 

TAN TEK SIN

 

(NRIC No: 501104-10-5321) … DEFENDANT

 

Grounds of Decision

 

Azizah Nawawi, J:

 

Application

 

[1] Enclosure (35) is the Plaintiff’s application for leave pursuant to Order 46 rule 2 of the Rules of Court 2012 (ROC 2012) to enforce the Judgment dated 15 May 2007 by way of bankruptcy proceedings against the Defendant after 6 years.

 

[2] The application was dismissed by this Court.

 

The Salient Facts

 

[3] By an undated “Individual Account Application” form and Letter of Offer dated 4 August 1997, the Plaintiff has granted the

 

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Defendant a Margin Trading Facility of up to a limit of RM50,000,000.00 for the purpose of executing transactions in respect of shares and securities listed on the Kuala Lumpur Stock Exchange (“KLSE”). The Plaintiff had opened a Margin Account for the Defendant, Account No. TK600/CDT.

 

[4] On the Defendant’s instructions, the Plaintiff had purchased certain securities on his behalf. However, the Defendant had acted in breach of the Margin Facility Agreement and has failed, refused and/or neglected to effect payment on the due dates of the respective purchases.

 

[5] Due to the Defendant’s failure to settle the outstanding balances in the account, the receivers and managers of the Plaintiff had terminated the Facility and the Margin Facility Agreement and subsequently demanded payment of the outstanding balance of RM10,426,704.27. Despite various reminders sent by the Plaintiff, the Defendant failed, refused and/or neglected to settle the said outstanding balance.

 

[6] In 1999, the Plaintiff had commenced proceedings against the Defendant and claim for a sum of RM10,426,704.27 being the amount outstanding under the trading account.

 

[7] On 15 May 2007, the Plaintiff obtained Judgment against the Defendant in the amount of RM10,426,704.27 as at 31 May 1998 with interest on the sum of RM8,611,996.02 calculated at the rate of 13.35% a year on daily rates from 1 June 1998 until final settlement.

 

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[8] The Defendant has appealed to the Court of Appeal and the appeal was heard and was dismissed on 27 July 2010.

 

[9] Thereafter, the Defendant has filed a motion for leave to appeal to the Federal Court against the decision of the Court of Appeal. The said motion for leave was dismissed by the Federal Court on 30 November 2010.

 

[10] Vide an ex parte application dated 26.1.2016, the Plaintiff has filed for leave to commence enforcement proceedings against the Defendant under Order 46 rule 2 of the ROC 2012 premised on the Judgment dated 15.5.2007. The grounds of the application are that the Defendant has appealed against the judgment to the Court of Appeal, and thereafter to the Federal Court.

 

The Findings of the Court

 

[11] Pursuant to the decision of the Federal Court in Dr. Shamsul Bahar Bin Abdul Kadir v. RHB Bank Bhd and another appeal

 

[2015] 4 MLJ 1, leave is required to commence bankruptcy proceedings pursuant to Order 46 rule 2, ROC 2012. In the present case, the Plaintiff is seeking leave to enforce the Judgment dated 15.5.2007 by way of bankruptcy proceedings.

 

[12] Leave application under Order 46 rule 2(1), Rules of Court 1980 (which is in pari materia with Order 46 r 2 of the ROC 2012) was considered by the Court of Appeal in Affin Bank Bhd v. Wan Abdul Rahman Wan Ibrahim [2003] 1 CLJ 826 where Justice Ariffin Zakaria JCA (as His Lordship then was) held as follows:

 

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“It is trite that the grant of leave under O. 46 r. 2 is in the court’s discretion. Order 46 r. 3 states that an application under O. 46 r. 2(1) must be supported by an affidavit stating, when the case falls within r. 2(1)(a), the reasons for the delay in enforcing the judgment or order. Therefore, it is incumbent upon the applicant to furnish the court with sufficient reason in support of such an application. What is sufficient reason? This naturally will vary from case to case. It is not possible for this court to provide an exhaustive list of what is considered to be sufficient reasons…

 

We agree with the learned Judge that in an application under O 46 r 2 it is incumbent for the applicant to furnish sufficient reasons to explain for their inaction. From the supporting affidavit the only reason put forth by the appellant in support of this application is the neglect of its former solicitors to initiate the necessary action. But again the appellant is also not free from blame. From the affidavit in support it would appear that the appellant took more than two years to appoint the new solicitors after the appellant failed to hear from its former solicitor. Having considered the matter, we fully agree with the learned Judge that the appellant failed to furnish sufficient reason to persuade the court to exercise the discretion in its favour. ”

 

[13] Therefore, the onus is on the Plaintiff to furnish this Court with sufficient reasons in order for this Court to exercise its discretion and allow the application.

 

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[14] In the supporting affidavit affirmed by Ooi Woon Chee, the Liquidator of the Plaintiff Company, the Plaintiff states that since the amount owing has not been settled, the Plaintiff now wants to commence bankruptcy proceedings against the Defendant. In an affidavit affirmed by the solicitor for the Plaintiff, Tey Mei Zhern, there were proposals for settlement in December 2005 and Nov 2010, before the decision of the Federal Court on 30.11.2010.

 

[15] Having considered the affidavits affirmed on behalf of the Plaintiff, I find that the Plaintiff has failed to furnish any sufficient reason to explain their inaction after the decision by the Federal Court on 30.11.2010. There is absolutely no reason given in the affidavits of any action taken after the decision of the Federal Court on 30.11.2010, for a period of five (5) years, until the filing of this application in 2016.

 

[16] The Plaintiff has submitted that the Defendant had appealed against the decision of the High Court and subsequently against the decision of the Court of Appeal to the Federal Court. Added to that, there were also some negotiation in 2005 and 2010. I am of the considered opinion that the negotiations took place before the decision of the Federal Court in 2010. But there are no more negotiations after that. So after 2010, there was simply no action taken until this application in 2016.

 

[17] It is also the submission of the Plaintiff that in view of the appeals, the timeline for the 6 years should be taken to run from the date of the dismissal of the Defendant’s leave application to the Federal Court and not the date of the High Court judgment.

 

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However, I find no merit in this argument, as the Plaintiff is seeking to proceed with bankruptcy proceedings premised on the High Court judgment. This Court will have to look at the time from the date of judgment to the date of this application; in order to appreciate what actions has been taken to enforce the judgment.

 

[18] The Plaintiff further submits that the application does not prejudice the Defendant as Plaintiff’s debtor is obliged to repay the outstanding amount anyway. However the Defendant’s case is not before this Court in order to assess the issue of prejudice. But on the factual matrix of this case and based on the supplementary affidavit affirmed by Ooi Woon Chee on 19.2.2016, the amount outstanding has ballooned from RM10,426,704.27 to RM27,618,678.27(inclusive of interest until 2013). The staggering increase is bound to be prejudicial to any Defendant.

 

[19] Lastly, the Plaintiff has submitted that it would be injustice to the Plaintiff if leave was not granted to the Plaintiff on the basis of delay alone. However, I find that the Plaintiff cannot be complaining when they were the ones sitting on their rights. They could have filed bankruptcy proceedings after the judgment of the High Court in 2007, or after the dismissal of the appeal by the Court of Appeal on 27.7.2010, or after the dismissal of the leave application by the Federal Court on 30.11.2010, as there was no stay granted in respect of the judgment sum. Yet, they did not do anything until the filing of this application five (5) years later, in 2016.

 

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[20] Premised on the reasons enumerated above, I find that the Plaintiff has failed to furnish sufficient reasons and am constrained to dismiss the application with no order as to costs.

 

(AZIZAH BTE HAJI NAWAWI) JUDGE

 

HIGH COURT MALAYA (Commercial Division) KUALA LUMPUR

 

Dated: 16 June 2016

 

For the Plaintiff

 

Kimberly Tey Messrs Skrine Kuala Lumpur.

 

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