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DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
DALAM WILAYAH PERSEKUTUAN, MALAYSIA
(BAHAGIAN DAGANG)
[GUAMAN NO: 22NCC-203-07/2015]
ANTARA
BUKIT BARU VILLAS SDN BHD
(No. Syarikat: 800308-D)
… PLAINTIFF
DAN
MALAYSIA BUILDING SOCIETY BERHAD … DEFENDAN
(No. Syarikat: 9417-K)
DI HADAPAN
YANG ARIF TUAN MOHD NAZLAN BIN MOHD GHAZALI
PESURUHJAYA KEHAKIMAN
JUDGMENT
Introduction
[1] This was an application filed by the defendant in Enclosure 8
to strike out the writ of summons and the statement of claim of the
plaintiff in pursuance of Order 18 r 19 (1) (b) and (1) (d) of the Rules of
Court 2012 (“the RC 2012”). I allowed the striking out of the statement
of claim at the end of the hearing on 1 April 2016, and highlighted the
broad grounds for my decision. This judgment contains the full reasons
for my decision.
Brief Background Facts
[2] The plaintiff had on 6 August 2008 obtained term loan and
bridging loan facilities totalling RM5,500,000 (‘the Facility”) from the
defendant to finance a housing project in Bandar Bukit Baru in Melaka,
to be developed on two pieces of land, both of which were created as
first party legal charge under the National Land Code 1965 (“NLC”) in
favour of the defendant as security for the repayment of the Facility in
accordance with a Facility Agreement executed by the parties on 27
February 2009.
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[3] Following a default of the Facility Agreement by the plaintiff,
the defendant commenced a civil suit at Kuala Lumpur High Court Suit
No.: 22NCC-169-05/2014 to recover all amount outstanding under the
Facility Agreement. Both the plaintiff and the defendant however then
recorded a consent judgment on 23 October 2014 (“the Consent
Judgment”) (which followed the terms of a settlement offer letter dated 2
September 2014 accepted by the plaintiff on 17 October 2014), whereby
based on the plaintiff’s admission of its indebtedness to the amount of
RM2,301,708.96 under the Facility Agreement calculated as at 4 March
2014, the plaintiff was however only obliged to pay a lesser amount of
RM2,140,000.00 by 10 March 2015 as the agreed settlement sum,
failing which the plaintiff must pay all amount outstanding under the
Facility Agreement less whatever amount received before 10 March
2015, and the defendant would be entitled to proceed with foreclosing
the lands under the charges. It is of note that the reduction in the sum to
be paid by the plaintiff as against its original indebtedness was attributed
to the waiver of penalty interest of RM299,000.00 by the defendant.
[4] In accordance with the Consent Judgment, the plaintiff paid the
initial sum of RM50,000.00 to the defendant, and was supposed to
have paid RM2,090,000.00 by 10 March 2015, but for the former’s
request for an extension of time to pay the balance RM2,090,000.00 by
one month, until 10 April 2015, which the defendant agreed, subject to
the following payment arrangement:
(i)
RM300,000.00 to be paid by 27 March 2015; and
(ii)
RM1,790,000.00 to be paid by 10 April 2015,
failing which the plaintiff would have to pay the entire
amount due and owing under the Facility Agreement as
stipulated in the Consent Judgment.
[5] The plaintiff did not pay the agreed RM1,790,000.00 by 10
April 2015 and further failed to comply with the defendant’s demand for a
comprehensive written proposal to pay the entire amount outstanding.
The plaintiff instead requested for further financing of the housing
development, and made subsequent proposals unacceptable to the
defendant, resulting in the defendant’s solicitors issuing a statutory
notice pursuant to Section 218 of the Companies Act 1965 (“the Section
218 Notice”) on 10 June 2015 demanding the payment of
RM2,081,702.00 within 21 days from receipt of the same. A statutory
notice under Form 16D of the NLC in respect of each of the said lands
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was also issued to the plaintiff on 10 June 2015 demanding payment of
the said sum.
[6] The plaintiff then responded by instituting a writ action and
filed its statement of claim on 7 July 2015 against the defendant and the
pleadings in its statement of claim significantly include, for present
purposes, the following main prayers for relief:(i)
A declaration that the said Section 218 Notice dated 10
June 2015 is unlawful and its issuance by the
defendant constitutes an abuse of court process;
(ii)
An injunction restraining the defendant from presenting
a creditors petition on the Section 218 Notice;
(iii) A declaration that the Consent Judgment dated 23
October 2014 is not valid; and
(iv)
A declaration that the Form 16D dated 8 May 2015 is
not valid.
[7] On 22 October 2015, this Court dismissed the plaintiff’s
application for a Fortuna Injunction against the Section 218 Notice.
The Law on Striking Out
[8] The application by the defendant was premised on two of the
four limbs under Order 18 r 19(1) of the Rules of Court 2012 (the “RC
2012”), which read as follows:“19.
Striking out pleadings and endorsements (O 18 r 19)
(1)
The Court may at any stage of the proceedings order to be
struck out or amended any pleading or the endorsement, of any
writ in the action, or anything in any pleading or in the
endorsement, on the ground that(a)
it discloses no reasonable cause of action or defence, as
the case may be;
(b)
it is scandalous, frivolous or vexatious:
(c)
it may prejudice, embarrass or delay the fair trial of the
action; or
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(d)
it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment
to be entered accordingly, as the case may be.”
[9] The defendant in the instant case relied on limbs (b) and (d).
Thus it was claimed that the statement of claim was frivolous, vexatious
and otherwise tantamounts to an abuse of court process.
[10] The leading authority on Order 18 r 19(1) is the Supreme
Court decision in Bandar Builder Sdn Bhd v. United Malayan Banking
Corporation Bhd [1993] 3 MLJ 36, and in particular the following part of
the judgment of Mohamed Dzaiddin SCJ (as he then was):“The principles upon which the Court acts in exercising its power under
any of the four limbs of O. 18 r. 19(1) Rules of the High Court are well
settled. It is only in plain and obvious cases that recourse should be
had to the summary process under this rule (per Lindley M.R.
in Hubbuck v. Wilkinson [1899] 1 QB 86, p. 91), and this summary
procedure can only be adopted when it can be clearly seen that a claim
or answer is on the face of it “obviously unsustainable” (AttorneyGeneral of Duchy of Lancaster v. L. & N.W. Ry. Co. [1892] 3 Ch. 274,
CA). It cannot be exercised by a minute examination of the documents
and facts of the case, in order to see whether the party has a cause of
action or a defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2
All ER 871, CA.). The authorities further show that if there is a point of
law which requires serious discussion, an objection should be taken on
the pleadings and the point set down for argument under O. 33 r. 3
(which is in parimateria with our O. 33 r. 2 Rules of the High Court)
(Hubbuck v. Wilkinson) (supra). The Court must be satisfied that there
is no reasonable cause of action or that the claims are frivolous or
vexatious or that the defences raised are not arguable”.
[11] It is also well settled that as for limb (b), the test is the same
consideration on the claim being obviously unsustainable and that for
limb (d), it arises when the process of the Court is not used in a bona
fide manner and has been abused (see the Court of Appeal decision in
Harapan Permai Sdn Bhd v. Sabah Forest Industries Sdn Bhd [2011] 2
MLJ 192) and the said claim must also be proven to be obviously
unsustainable (see another Court of Appeal decision of Zainal Abidin bin
Hamid @ S. Maniam v. Kerajaan Malaysia [2009] 6 MLJ 863). It is
equally clear as it is practical that the situations that could fall within the
categories under items (b) and (d) are never closed given the variety of
circumstances arising from the facts of each particular case.
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Evaluation and Findings of this Court
Whether there is Bona Fide Dispute on Indebtedness
[12] The representative of the plaintiff who affirmed affidavits on
behalf of the plaintiff, Mr Jeffrey Yeoh, a director of the plaintiff averred
in his affidavit in reply dated 24 August 2015 resisting this striking out
application that the suit had been filed because the amount demanded
by the defendant in the Section 218 Notice was different from the sum
actually due from the plaintiff. In the plaintiff’s statement of claim, it was
specifically pleaded the issuance of the Section 218 Notice was wrong in
law since the outstanding sum was only RM1.79 million and not
RM2,081,702.27 as demanded in the latter.
[13] It is thus clear that the fact of indebtedness is not in dispute
but the amount is, as suggested by the plaintiff. It is to be observed that
in the first place, evidence of admission of the original indebtedness is
incontrovertible. It is both specifically and expressly stated in the
settlement offer letter as accepted by Mr Jeffrey Yeoh himself, on behalf
of the plaintiff, to the following effect:“A.
ADMISSION OF BUKIT BARU VILLAS’ DEBT
Bukit Baru Villas admits and undertakes that the amount due and
owing by Bukit Baru Villas to MBSB in respect of the aforesaid Loan
Facilities is Ringgit Malaysia Two Million Three Hundred One
Thousand Seven Hundred Eight and Cents Ninety Six
(RM2,301,708.96) only calculated as at 4/3/2014 (“Indebtedness”)”.
[14] It is equally manifest, as it is unsurprising, that should the
plaintiff default in making the requisite payment by 10 March 2015, both
the settlement offer letter and the Consent Judgment provide for the
termination of the validity of the agreed settlement sum and the
reversion to the outstanding amount under the Facility Agreement, to be
calculated as at 10 March 2015 onwards, inclusive of penalty interest for
late payment charges which shall also include the penalty interest of
RM299,000.00 previously waived by the defendant. As such, as the
plaintiff failed to honour the terms of the Consent Judgment and make
payment by the stipulated deadline, the defendant was fully entitled, in
accordance with the terms of the Consent Judgment, to treat the
outstanding sum from the plaintiff to be reverted to that calculated under
the Facility Agreement, instead of continuing to demand for the agreed
settlement sum of RM2,140,000.00. It is to be observed that the plaintiff
is asserting that the amount outstanding was only RM1.79 million, and
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this figure is derived after deducting the RM50,000.00 and
RM300,000.00 already paid by the plaintiff to the defendant (RM2.14
million minus RM350,000.00 equals RM1.79 million). This position is
palpably misconceived for the plaintiff is no longer entitled to rely on the
agreed settlement sum as the basis of its indebtedness. Its assertion to
the contrary is entirely unsubstantiated and wholly bereft of merit.
[15] In any event, the plaintiff’s incontrovertible admission to the
debt of RM1,790,000.00 but not to RM2,081,702.27 does not do much to
fortify its case. This is because the Federal Court in the case of
Malaysia Air Charter Company Sdn Bhd v. Petronas Dagangan Sdn Bhd
[2000] 4 CLJ 437 has ruled that a notice of demand under Section
218(2)(a) of the Companies Act 1965 need not specify the exact sum
due as at the date of the demand since for so long as the sum due
exceeds RM500 and remains unpaid, after a demand has been made,
without a reasonable explanation to the satisfaction of the court, there is
“neglect” to pay such sum within the meaning of the said section. It
could thus be said the winding up notice demanding for the payment of a
sum which is in the amount which is substantially not disputed such as
the RM1.79 million is valid and not defective.
[16] The plaintiff raised two other arguments to the effect that
reliance on the Consent Judgment is no longer valid in view of alleged
variations to the same. The first contention is that the Consent
Judgment provided for the balance of RM2,090,000.00 to be paid within
6 months from the date of the Consent Judgment which should rightfully
be due by 22 April 2015, but the defendant demanded payment of the
same prior to the expiry of the six-month period. This contention is
similarly unmeritorious and entirely baseless for the Consent Judgment
clearly provides in paragraph (b)(ii) for the six-month period to run from
11 September 2014. It does not start from the date of the Consent
Judgment.
[17] Secondly, it was submitted that since the defendant had
agreed to depart from the terms of the Consent Judgment by extending
the payment period by one month, the defendant cannot then premise its
Section 218 Notice on the Consent Judgment. This contention too is
short on substance. There is no basis to say that the Consent Judgment
can be set aside even if it was true that there was a variation (see further
below on absence of basis for setting aside of the Consent Judgment).
In any event, notwithstanding the one-month extension, the plaintiff still
failed to abide by the same by not making the payment of
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RM1,790,000.00 by 10 April 2015, thus rendering the extension to be of
no further effect if not entirely not valid as a result. Furthermore, if
accepted, the plaintiff’s contention would for all intents and purposes
infringe the principle that a party cannot benefit from its own default.
[18] It is an established presumption in law that parties to a
contract do not intend that either party should be able rely on its own
breach of obligations to avoid a contract or obtain any benefit under it,
unless the contrary is clearly provided for by the contract (see the House
of Lords decision in New Zealand Shipping Co v. Société des Ateliers
etChantiers de France [1919] AC 1). The leading textbook authority of
Chitty on Contracts (30th edition, 2008) at para 12.082 states that:
“Party Cannot Rely on His Own Breach
It has been said that, as a matter of construction, unless the contract
clearly provides to the contrary it will be presumed that it was not the
intention of the parties that either should be entitled to rely on his own
breach of duty to avoid the contract or bring it to an end or to obtain a
benefit under it. This presumption applies only to acts or omissions
which constitute a breach by that party of an express or implied
contractual obligation, or (possibly) of a non-contractual duty, owed by
him to the other party….”.
[19] It is therefore not competent for the plaintiff to now argue for
non-reliance on the Consent Judgment when the issue arose as a result
of its own breach of the same, and not just on a single occasion, and
more so when the very existence of the Consent Judgment too first
came about following the plaintiff’s infringement of the terms of the
Facility Agreement.
[20] During the hearing of Enclosure 8, the counsel for the
plaintiff made the argument that there was a genuine dispute on the
Section 218 Notice since the defendant had been demanding different
figures at various stages. The plaintiff asserted that the correct amount
due was RM1.79 million but the defendant’s Form 16D notices claimed
for RM2.484 million whilst the Section 218 Notice contains the figure of
RM2,081,702.00. There is in my evaluation, plainly no confusion as to
the actual amount due and owing to the defendant. The RM1.79 million
is no longer relevant given the default by the plaintiff of the terms of
payment as stipulated in the Consent Judgment. The demanded
amount of RM2,081,702.00 stated in the Section 218 Notice is within the
contemplation of the terms of the Consent Judgement and is the same
as the sum so claimed by the defendant in the two Form 16D notices in
respect of the two charges. It is clear that the letters from the solicitors
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for the defendant dated 10 June 2015 enclosing the Form 16D notices
for the two charges respectively stated that the notices supersede any
Forms 16D issued prior in time. As such, the sum of RM2.484 million as
demanded in the earlier Forms 16D dated 8 May 2015 is no longer valid
and has been revised to a lower amount in the subsequent Form 16D
notices. Thus, parties are again back to the original question on the true
amount of indebtedness, either RM1.79 million or RM2,081,702.00 but
which essence and substance of purported dispute as advanced by the
plaintiff is in my view premised on assertions which are at best doubly
tenuous and spurious in the face of the clear terms of the Consent
Judgment which militate against the position taken by the plaintiff.
Absence of Basis to Set Aside Consent Judgment
[21] The plaintiff sought to invalidate the Consent Judgment in its
statement of claim. Its contention that that specific prayer to be
irrelevant to the application now brought by the defendant because
parties in this striking out application are not challenging whether or not
the Consent Judgment ought to be set aside is in my view
unsustainable. The matter was plainly pleaded in its statement of claim,
and it is precisely because it was so included in the claim of the plaintiff
against the defendant that entitles the latter to institute this striking out
application on the basis of the pleadings which the defendant asserts fall
within the ambit of items (b) and (d) of Order 18 r 19(1).
[22] However, the law is so well settled that a consent judgment
can only be set aside on specific grounds, as established by the Federal
Court in the leading case of Badiaddin Mohd Mahidin & Anor v. Arab
Malaysian Finance Berhad [1998] 2 CLJ 75 where Peh Swee Chin FCJ,
in one of the judgments delivered by the Federal Court, stated
instructively as follows:“The grounds referred to for setting aside a consent order of a
judgement by consent are grounds which basically relate to consensus
ad idem or the free consent of parties to a binding agreement or
contract. It is elementary that if it is proved that there are grounds
which vitiate such free consent, the agreement is not binding. Now a
consent order or a judgement by consent is undoubtedly based on an
agreement of both parties where consent to the agreement must or
should have been free in the first place. If the agreement upon which a
consent order or judgement by consent is based, is vitiated by any
ground recognized in equity as vitiating such free consent, such as
fraud, mistake, total failure of consideration, (see Huddesfield Banking
Co. v. Henry Lister [1895] 2 Ch. 273 and the cases cited therein), then
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such a perfected consent order or judgement by consent could be set
aside in a fresh action filed for the purpose. Grounds which would
vitiate such free consent should also include misrepresentation,
coercion, and undue influence and other grounds in equity”.
[emphasis added]
[23] It is of relevance to note that the plaintiff did not in its
statement of claim or in any of its affidavits in reply make mention of, let
alone specifically plead any of the aforesaid grounds established by
Badiaddin Mohd Mahidin that could legitimately justify the plaintiff setting
aside the Consent Judgment. There was no allegation of mistake or
fraud or misrepresentation, and indeed it would have resolutely been
disingenuous if the plaintiff had alleged coercion on the part of the
defendant who accommodated the plaintiff’s own request for extension
of time.
[24] The plaintiff appeared to argue that the agreement on the
part of the defendant to provide indulgence and extend the time for the
plaintiff to pay the balance settlement amount by one month had the
effect of vitiating the Consent Judgment altogether. But it is plain that
this is not a basis that the law permits the Consent Judgment to be set
aside or declared not valid. As such, the attempt by the plaintiff to have
the Consent Judgment vitiated is entirely without substance and must
fail, and the rule as established in the decision of the former Federal
Court in Ganapathy Chettier v. Lum Kum Chum & Ors; Meenachi v. Lum
Kum Chum [1981] 2 MLJ 145 that an order by consent is evidence of the
contract between parties which is binding on them must thus in the
instant case be firmly upheld.
The Section 218 Notice already ruled to be Valid - Res Judicata
[25] Furthermore, in any event, it is worthy of emphasis that in
dismissing the Fortuna Injunction application, this Court, in the reported
judgment of Harmindar Singh Dhaliwal J (now JCA) has already ruled
that the Section 218 Notice was valid as it was based on the terms of the
Consent Judgment, and that even if it was issued in excess of the actual
amount due, it is still valid for the purpose of Section 218. The plaintiff’s
admission that the amount due and owing being RM1,790,000.00 was
held to be more than sufficient justification for a winding up order to be
made against the plaintiff. This therefore further fortifies the argument of
the defendant that there are no issues to be tried in this action.
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[26] The principal prayer in the statement of claim of the plaintiff
for the defendant be restrained by an injunction from presenting a
creditors petition on the Section 218 Notice now being pursued in the
instant proceeding has manifestly already been adjudicated in the
hearing for Enclosure 4 for the Fortuna Injunction application. They are
exactly the same reliefs prayed for, and nothing can be construed to be
more clearly res judicata than the matter in the claim now being pursued
by the plaintiff. As the issue has already been judicially determined
previously in Enclosure 4 and thus res judicata, any further litigation on
the same matter ought thus to be prohibited.
[27] The common law doctrine of res judicata has been
incorporated into the statute law in Malaysia as can be found in Section
25(2) of the Courts of Judicature Act 1964 (“CJA”) which confers
additional powers to the High Court as set out in item 11 of the schedule
to the CJA as follows:“11. Power to dismiss or stay proceedings where the matter in question
is res judicata between the parties, or by reason of multiplicity of
proceedings in any Court or Courts the proceedings ought not to be
continued.”
[28] There cannot therefore be any argument about the
applicability of res judicata in the instant case as the relief for the
Fortuna Injunction has been adjudicated by this Court, between the
same parties in dispute.
[29] In addition, it is well settled in local jurisprudence that the
principle of res judicata is of wider remit, and extends to matters which
are part of the subject matter of a litigation which ought to have been
raised even if not actually raised to be determined, due either
to inadvertence, negligence or deliberately. The Supreme Court made it
clear in Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd
[1995] 3 MLJ 189 that there are two kinds of estoppel per rem judicatum,
namely cause of action estoppel and issue estoppel. The relevant
passages from the judgment of Peh Swee Chin SCJ read as follow:“[1] The significance of res judicata lies in its effect of creating
an estoppel per rem judicatum, which may take the form of either
cause of action estoppel or issue estoppel. 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, that is the cause of action,
merges into the said final judgment. The issue estoppel, on the other
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hand, means simply an issue which a party is estopped from raising in
a subsequent proceeding.
[2]
The doctrine of res judicata is not confined to causes of action or
issues which the Court is actually asked to decide or has already
decided. It covers also causes of action or issues or facts which,
though not already decided as a result of the same not being brought
forward due to negligence, inadvertence or deliberately, are so clearly
part of the subject matter of the litigation and so clearly could have
been raised, that it would be an abuse of the process of the Court to
allow a new proceeding to be started in respect of them”. [emphasis
added]
There are a number of other cases which have since followed this
principle (see, for example, the Court of Appeal decisions in Huawei
Tech Investment Co. Ltd. v. Transition Systems (M) Sdn Bhd [2013] 5
MLJ 396 and OCBC Bank (Malaysia) Bhd v. Kredin Sdn Bhd [1997] 2
CLJ 534).
[30] Accordingly, given the prayer for a Fortuna Injunction
pleaded by the plaintiff in the instant case in its statement of claim, and
by challenging the validity of the Section 218 Notice, in turn revolving
around the issue of the actual amount due to the defendant from the
plaintiff or even on other matters, if any, that could have been raised in
the Enclosure 4 hearing but had actually not been, the same would
doubtless still fall within the scope of res judicata in the nature of both
cause of action and issue estoppel, and thus cannot be further
adjudicated upon. It would otherwise tantamount to an abuse of the
process of the Court should it be allowed to be pursued. The Malaysian
Rules of Court 2012 - An Annotation Volume 1 (Lexis Nexis) states that
the most common instance of matters which are struck out under Order
18 r 19 for being frivolous and vexatious are those which are res
judicata.
Concluding Analysis
[31] Furthermore, I also agree with the submission of the
defendant that as parties are duty bound to obey an order of the Court
such as the Consent Judgment until and unless it is varied or set aside,
and disobedience may subject the defaulting party to committal
proceedings (see the Supreme Court decision in Wee Choo Keong v.
MBF Holdings Bhd & Anor, and Another Appeal [1993] 3 CLJ 210, the
plaintiff is certainly estopped from denying its liability to pay the entire
amount outstanding under the Facility Agreement (see also the Federal
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Court decision in Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian
Merchant Bank Berhad [1995] 4 CLJ 283). In addition, the fact that it
was the plaintiff itself who breached the terms of the Consent Judgment
could also be construed to mean that its attempt to apply for protection
from a winding up petition, in the form of the Fortuna Injunction was
certainly less than justified, for it is trite law that one who seeks equity
must come to Court with clean hands (see Tahan Steel Corporation Sdn
Bhd v. Bank Islam Malaysia Bhd [2004] 6 CLJ Supp 25 and the Court of
Appeal decision in Eastern Properties Sdn Bhd v. Hampstead
Corporation Sdn Bhd [2007] 2 MLRA 406).
[32] The essence of the indebtedness of the plaintiff to the
defendant is encapsulated in the Consent Judgment, which by definition
evidences the former’s admission to the same, and records, under the
sanction of the Court, the agreement by parties on the repayment
arrangement. In the absence of any legally recognized basis to impugn
the continued validity of the Consent Judgment which remains resolutely
unchallenged and unimpaired, its terms must continue to be binding and
govern the relationship between the plaintiff and the defendant in
respect of the indebtedness. Any attempt by the plaintiff to depart or
move away from strictly adhering to the same would thus tantamount to
a form of non-compliance, if not an outright transgression. As it
transpired, the plaintiff had indeed failed to abide by the terms of the
Consent Judgment, despite having earlier made payment in the
aggregate amount of RM350,000.00 in pursuance of the terms of the
same, thus clearly then demonstrating it having acceded to the Consent
Judgment, albeit only until prior to its failure to fulfil its obligation to pay
RM2,090,000.00 by the stipulated deadline of 10 March 2015, and,
subsequently again defaulting on honouring the balance payment by the
extended deadline of 10 April 2015, which had been accommodated by
the defendant entirely because of the specific request by the plaintiff
itself. Having infringed the terms of the Consent Judgment, the plaintiff
cannot now turn around and attempt to argue on the imaginary strength
of what in truth are some spurious grounds that the terms cannot
presently be relied on by the defendant. I must also make it clear that I
find no basis which supports the plaintiff’s argument, referring to the
Court of Appeal decision in Abdul Rahim bin Abdul Hamid & Ors v.
Perdana Merchant Bankers Bhd & Ors [2000] 2 MLJ 417 that there was
a serious conflict of material evidence which could only be resolved by
the calling and hearing of witnesses at trial. For completeness, it is also
trite law that a creditor is not prevented from enforcing all its legal rights
simultaneously to recover against the debtor (see the Supreme Court
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case of Low Lee Lian v. Ban Hin Lee Bank Bhd [1997] 1 MLJ 77). There
is thus no impediment to the defendant pursuing both a winding up
action as well as a foreclosure proceeding under the NLC. As identified
above, the disputes in the instant case are far from being material, and
the arguments by the plaintiff on the purported disputes are either bereft
of merit or merely a convenient and an unsubstantiated afterthought at
the same time.
[33] Given that the Consent Judgment continues to be valid and
is not varied or set aside, and the issue of Fortuna Injunction already res
judicata, the basis of the plaintiff pursuing the suit becomes doubtful and
in my view may thus justifiably be construed as being frivolous and
vexatious instead, as well as an abuse of the process of the Court, for
there is little consequence in allowing the same be proceeded with when
the essence of the plaintiff’s complaint on the extent of indebtedness visa-vis the Section 218 Notice has been shown to be plainly very short on
substance and decidedly unmeritorious. In other words, the claim is
obviously unsustainable. At the same time, in addition, coupled with the
other arguments raised by the plaintiff as discussed in the earlier part of
this judgment, the plaintiff has unmistakably not demonstrated any
triable or arguable issues that could provide the basis for the claim of the
plaintiff not to be struck out and to be pursued and heard in a full trial
instead.
Conclusion
[34] Although the power of the Court to dismiss an action
summarily under Order 18 r 19 is drastic and ought to be resorted to
sparingly, the evaluation of the facts and circumstances of the instant
case as disclosed in affidavit evidence as discussed above, cannot lead
this Court to any other finding apart from one which concludes that it is
conspicuously clear that the claim as filed by the plaintiff is obviously
unsustainable within the test established in the Bandar Builder case.
The evidence more than justifies the finding that it is plain and obvious
that the claim ought to be struck out under order 18 r 19 (1) (b) for being
frivolous and vexatious and under (1) (d) for being an abuse of the
process of the Court, as well as under the inherent jurisdiction of the
Court to prevent abuse under Order 92 r 4 of the RC 2012.
[35] In conclusion, in view of the foregoing reasons, it is my
judgment that the defendant has successfully established its case on a
balance of probabilities to have the claim of the plaintiff struck out under
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Order 18 r 19 (1) (b) and (1) (d) and under Order 92 r 4 of the RC 2012.
I therefore allow Enclosure 8 for the defendant with costs.
Dated: 9 JUNE 2016
(MOHD NAZLAN MOHD GHAZALI)
Judicial Commissioner
High Court NCC1
Kuala Lumpur
Counsel:
For the plaintiff - B Devandra; M/s Kamil Hashim Raj & Lim
Petaling Jaya, Selangor
For the defendants - Helmi Hamzah; M/s Hisham Sobri & Kadir
Kuala Lumpur
Cases referred to:Bandar Builder Sdn Bhd v. United Malayan Banking Corporation
Bhd [1993] 3 MLJ 36
Harapan Permai Sdn Bhd v. Sabah Forest Industries Sdn Bhd [2011] 2
MLJ 192
Zainal Abidin bin Hamid @ S. Maniam v. Kerajaan Malaysia [2009] 6
MLJ 863
Malaysia Air Charter Company Sdn Bhd v. Petronas Dagangan Sdn
Bhd [2000] 4 CLJ 437
New Zealand Shipping Co v. Société des Ateliers etChantiers de
France [1919] AC 1
Badiaddin Mohd Mahidin & Anor v. Arab Malaysian Finance Berhad
[1998] 2 CLJ 75
Ganapathy Chettier v. Lum Kum Chum & Ors; Meenachi v. Lum Kum
Chum [1981] 2 MLJ 145
Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd [1995]
3 MLJ 189
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Huawei Tech Investment Co. Ltd. v. Transition Systems (M) Sdn Bhd
[2013] 5 MLJ 396
OCBC Bank (Malaysia) Bhd v. Kredin Sdn Bhd [1997] 2 CLJ 534
Wee Choo Keong v. MBF Holdings Bhd & Anor, and Another Appeal
[1993] 3 CLJ 210
Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian Merchant Bank
Berhad [1995] 4 CLJ 283
Tahan Steel Corporation Sdn Bhd v. Bank Islam Malaysia Bhd [2004]
6 CLJ Supp 25
Eastern Properties Sdn Bhd v. Hampstead Corporation Sdn Bhd
[2007] 2 MLRA 406
Abdul Rahim bin Abdul Hamid & Ors v. Perdana Merchant Bankers
Bhd & Ors [2000] 2 MLJ 417
Low Lee Lian v. Ban Hin Lee Bank Bhd [1997] 1 MLJ 77
Legislation referred to:Rules of Court 2012, O. 18 r. 19 (1) (b) and (1) (d), O. 92 r 4
Companies Act 1965, S. 218(2)(a)
National Land Code, Form 16D
Courts of Judicature Act 1964, S. 25(2)
Other referred to:The Malaysian Rules of Court 2012 - An Annotation Volume 1 (Lexis
Nexis)
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