Merino-O.D.D. Sdn Bhd V Pecd Construction Sdn Bhd

  

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MALAYSIA

 

IN THE HIGH COURT IN KUALA LUMPUR

 

(APPELLATE AND SPECIAL POWERS DIVISION)

 

ORIGINATING SUMMONS NO. R2-24-54-2008

 

In the matter of 2 Letters of Award and Sub-Contracts dated 2.5.2003 between MERINO-O.D.D. SDN BHD and PECD CONSTRUCTION SDN BHD (formerly known as Peremba Construction Sdn Bhd)

 

And

 

In the matter of a notice of arbitration dated 14.8.2008

 

And

 

In the matter of sections 11 and 50 of the Arbitration Act 2005

 

And

 

In the matter of Orders 28, 29 and 92 of the Rules of the High Court 1980 Between

 

MERINO-O.D.D. SDN BHD

 

(Company No: 85086-W) … PLAINTIFF

 

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And

 

PECD CONSTRUCTION SDN BHD (previously known as “Peremba Construction Sdn Bhd)

 

(Company No: 151505-T) …DEFENDANT

 

BEFORE THE HONOURABLE JUDGE Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER

 

IN OPEN COURT

 

JUDGMENT

 

1. This is my judgment in respect of the plaintiff’s applicant Notice of Motion dated 8.2.2009 for an order of committal against Shakir Jamil bin Fisal and Dato’ Dr. Sheikh Awab bin Sheikh Abod (Contemnors) the directors of the defendant.

 

2. The plaintiffs Notice of Motion is based on the premise the order of the court dated 23.7.2009 was not complied. The order requires the defendant to set-aside a sum of RM 5,284,800.00 in a joint interest bearing account under the name of the plaintiffs and defendant’s solicitors respectively within 7 days from the date of order. It must be noted to obtain the relief it was represented to the court that the defendant had withheld retention monies. And the specific relief was made based on the premise the defendant was

 

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holding the said money. And now the contemnors say that they could not comply with the order as the defendant was insolvent and has no money and has been subject to a section 176 Companies Act proceeding and there was also a scheme of arrangement. And the contemnors say that they are no more directors of the defendant.

 

3. And in addition says (i) the order was served after the 7 days in which the act was required to be done and no extension was obtained pursuant to rules of court (ii) Order 45 rule 7 (3) requires the order must be served before the expiration of time. And that part of the rule reads as follows:

 

“(i) A copy of that order has been personally served on the officer whom against whom an order for committal is sought; and

 

(ii) In a case of an order requiring a body corporate to do an act, that order has been so served before the expiration of the time within which the body corporate was required to do the act. ”

 

(iii) the order which must be served on or before 31st July 2009 was only served on 6.09.2009 on both the contemnors. (iv) the defendant was insolvent on the date of the order and the plaintiff was not a secured creditor, and there cannot be preferential payment pursuant to the C.A. 1965.

 

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4. I have read the Notice of Motion, affidavits and submissions of the parties in detail. I take the view that the Notice of Motion must be dismissed. My reasons inter alia are as follows:

 

(a) It is trite that contempt proceedings are quasi-criminal in nature. As a general rule strict compliance of the rules of procedure are mandatory failing which the court is not obliged to allow the application on the grounds that it will breach the dominant provision of the Federal Constitution Article 5 (1) which reads as follows:

 

No person shall be deprived of his life or personal liberty save in accordance with law.

 

On this issue Zaleha Zahari JCA in Folin & Brothers Sdn Bhd v. Wong Boon Sun & Ors and Another Appeal [2010] 4 CLJ 64, relied on the case of Messrs Hisham, Sobri & Kadir; Advocates & Solicitors v. Kedah Utara Development Sdn Bhd & Anor [1988] 1 CLJ 627; [1988] 2 CLJ (Rep) 5(refd) where Edgar Joseph Jr J (as he then was) had this to say:

 

“Now, it is well-settled law that contempt of court is an offence of a criminal character since the liberty of the alleged contemnor is at stake. That being so, it is fundamental that a man ought not to be penalized unless he has both a fair opportunity to comply with the law and the capacity to do so. Any other approach would not only be morally objectionable but also should have no place in a legal system based on ideas offair play and justice. ”

 

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(b) Courts have in certain cases ruled that procedural irregularities in contempt cases may not be fatal. [see Arthur Lee Meng Kwang v. Faber Merlin Malaysia Bhd. & Ors. [1986] CLJ 58 (Rep); Murray Hiebert v. Chandra Sri Ram [1999] 4 CLJ 65]. It all depends on the nature of the breach and the prejudice to the contemnor taking into consideration that the dignity of the court’s order which need to be complied with. In my view if there is a procedural breach there is a duty for the applicant to regularize the proceeding by complying with rules of court or applying to the court to condone the irregularity. In the instant case the applicant has failed to regularize the committal proceeding once the objection has been raised. Upon objection the applicant could have withdrawn the application and filed afresh complying with the relevant rules of procedure. And such remedial conduct is necessary and essential in the light of Article 5(1) of the Federal Constitution.

 

(c) There is much merit in the contemnor’s argument that an order requiring payment of money cannot be enforced by committal proceedings. In Hong Leong Bank Bhd v Phung Tze Thiam [2008] 4 CLJ 742; Gopal Sri Ram JCA (as he then was) held:

 

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The order of 25 April 2007 in essence required the respondent to repay a part of the sum that had been paid to him by the appellant. In point of form, it may appear to be an order requiring the respondent to do an act, namely to refund the money. A court, however, is concerned with substance and not form, and the substance of the order under consideration here was that it was a money judgment and not a judgment requiring the performance of an act. Therefore, the order of this court dated 25 April 2007 could not be enforced by means of committal proceedings. But that was not to say that the appellant was without remedy. It may enforce the said order in the usual way in which money judgments are enforced.

 

As a rider I will say if the payment is in respect of monies which the defendant is holding or holding in trust etc; then non-payment may be a subject matter of committal proceedings.

 

(d) There is also much merit in the contemnor’s argument that if the order was served after the time limited for the act has expired it cannot be enforced. In Iberian Trust Ltd v Founders Trust And Investment Co Ltd [1932] 2 KB 87 it was hold that:

 

“That the order was unenforceable also, because it was not served on the defendant company or its directors until after the

 

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expiration of the time limited by the order for the ”return ” of the shares. ”

 

To this I will add a rider to say that if the time limited for the act has expired, the applicant can regularize by seeking extension of time according to the rules if such is permissible.

 

(e) After having given much consideration to the plaintiffs submission and the contemnor’s objection and defence I am of the view that the plaintiff has moved this contempt proceedings in a cavalier manner and each contemnor ought to be indemnified personally for costs.

 

5. For reasons stated above, the plaintiffs Notice of Motion is

 

dismissed with costs. And the plaintiff:

 

(i) to pay En. Shakir Jamil bin Fisal a sum of RM 20,000.00 as costs;

 

(ii) to pay Dato’ Dr. Sheikh Awab bin Sheikh Abod a sum of RM 20,000.00 as costs.

 

I hereby order so.

 

(Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER)

 

Judge

 

High Court (Commercial Division) KUALA LUMPUR

 

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Date: 23rd April 2010

 

For the Plaintiff: James Kong (Kee Meng Fai with him); M/s

 

Beiden

 

For the Defendant: Azahar Harun, Ashvin Kulasingam and

 

Joachim Maria; M/s Ashvin Kulasingam

 

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