D-24NCC-337-2010
MALAYSIA
IN THE HIGH COURT AT KUALA LUMPUR
(COMMERCIAL DIVISION)
SUIT NO. D-24NCC-337-2010
Between
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1. MALAYAN BANKING BERHAD
2. AFFIN BANK BERHAD
3. AFFIN INVESTMENT BANK BERHAD
4. ALLIANCE BANK MALAYSIA BERHAD
5. ALLIANCE INVESTMENT BANK BERHAD
6. AMBANK (M) BERHAD
7. EON BANK BERHAD
8. HSBC BANK BERHAD
9. PUBLIC BANK BERHAD
10. RHB BANK BERHAD
11. OCBC BANK (MALAYSIA) BERHAD
… PLAINTIFFS
And
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MALAYSIAN TRUSTEES BERHAD
(Company No: 21666-V)
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… DEFENDANT
BEFORE THE HONOURABLE JUDGE
Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER
IN CHAMBERS
JUDGMENT
This is my judgment relating to two interveners’ application in essence
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seeking leave of court to intervene to set aside the order of the court, heard
inter partes between the plaintiffs and defendant and which has been
perfected.
The two applications are as follows:-
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(a)
D-24NCC-337-2010
Enclosure 13 by Pilecon Engineering Berhad whose name has been
intituled in the originating summons but not made a defendant in the
action, and is seeking leave to intervene to set aside the order.
(b)
Enclosure 10 by Allure Gold’s Overseas Ltd seeking a stay of the
order pending its application to set aside the order.
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It must be noted in the instant case the order was made after considering the
merits, and that order was sealed and perfected. In consequence I raised a
preliminary issue whether an intervener application under Order 15 rule 16
of RHC 1980 can succeed when the judgment and/or order is final between
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the plaintiff and the defendant.
Brief facts
1.
The plaintiffs are secured creditors of Pilecon Engineering Berhad
(“Pilecon”), who had initially granted credit facilities to Pilecon.
Pilecon’s debts were subsequently restructured under a scheme of
arrangement whereby Pilecon issued RM120 million worth of
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Redeemable Convertible Secured Loan Stocks (“RCSLS”) to Pilecon’s
secured creditors, including the plaintiffs, and Irredeemable Convertible
Unsecured Loan Stocks (“ICULS”) to Pilecon’s unsecured creditors.
The Defendant was appointed as trustee for the RCSLS holders. The
security for the RCSLS are held in the Defendant’s name.
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2.
Pilecon has defaulted in payments under the RCSLS. However, the
Defendant refused to take any action to commence recovery of monies
under the RCSLS as a special resolution by the RCSLS holders
directing the Defendant to do so could not be obtained. The special
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resolution required 75% of the holders to vote for the same but only
74.2% of the holders did so. The Defendant was the party who has to
institute proceedings against Pilecon and also holds the security for the
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holders. The Plaintiffs filed these proceedings to compel the Defendant,
as trustee for the RCSLS holders, to take action for recovery of monies
due under the RCSLS.
3.
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I have read both the applications, affidavits, submission of the parties in
detail. All the learned counsels have placed a comprehensive
submission on technicalities as well as merits. I do not wish to repeat
the same save to address the core issues. I take the view that enclosures
13 and 10 must be dismissed. My reasons inter alia are as follows:(a)
It is trite by reading the relevant provision of the Order in the
“White Book” there is no support for the proposition that an
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Order of court made inter partes, sealed and perfected can be a
subject matter of leave to intervene.
(b)
Order 15 r 6 of the Rules of the High Court 1980 provides that
an intervener application may be made “at any stage of the
proceeding”. In interpreting Order 15 r 6 RHC, the courts have
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held that the words “at any stage of the proceeding” clearly
mean that an intervener application can only be made before
judgment or order has been made, as otherwise the proceedings
would have concluded and there would no longer be a pending
proceeding which the proposed intervener may participate.
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(c)
In Hong Leong Bank Berhad v. Staghorn Sdn Bhd & other
appeals [2008] 2 MLJ 622, the plaintiff obtained an order for
sale of piece of land under Order 83 of the RHC based on a lien
holder’s caveat. The land was sold to a successful bidder and a
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certificate of sale was issued. Staghorn then filed an application
to intervene and to set aside the order for sale. The plaintiff
appealed against the intervention order granted by the High
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D-24NCC-337-2010
Court. The Court of Appeal held that Staghorn had a right to
intervene. On appeal to the Federal Court, the Federal Court
allowed the appeal and Abdul Hamid Mohamed CJ held as
follows:“With respect, the approach is clearly wrong. In an application to
intervene by a non-party in a proceeding all that a judge has to do is,
first, to determine whether there is a proceeding still pending. Where a
final order, in this case the order for sale, has been made and
perfected clearly the proceeding has concluded. It is then too late to
intervene under O. 15 r. 6(2)(b)(ii) of the RHC 1980…..
Thirdly, in an application to intervene under O. 15 r. 6 of the RHC
1980, the issue of functus officio merges with the issue whether there is
any proceeding still in existence. It is another way of looking at the
same thing. The issue is whether the final order has been made and
perfected, not whether the judge is of the opinion that the order made
by the earlier judge is, in his view, right or wrong in law.”
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(d)
The Court of Appeal in Punchak Permata Sdn Bhd v. Tham
Weng Hong [2010] 9 CLJ 19 followed the above case and
stated as follows:-
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“In the instant case the judgment given by the High Court on 26
September 2006 against the first respondent was based on merits as it
was given after the court heard submissions from the appellant's
counsel and read the cause papers filed. In any event, the final order
had been drawn up and perfected. As such the proceeding in the
instant case had clearly concluded. It was therefore too late for the
second respondent to intervene under O. 15 r. 6(2)(b)(ii) of the Rules
of the High Court 1980.”
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(e)
In the instant case the learned counsel for the intervener in
essence argued that the order made was an ex-parte order and in
consequence is a subject matter which can be set-aside ab initio
if the necessary criteria are satisfied. I do not think it is correct
to refer the said order was made ex-parte. The order was made
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inter partes in the presence of the plaintiff and defendant. It
will only become an ex-parte order in the event the defendant
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D-24NCC-337-2010
was not present. It does not become ex-parte because some
interested and necessary party was not present. The proposed
interveners argument and authorities on this issue is
misconceived.
(f)
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The learned counsel for the proposed intervener placed an
expressive submission by asserting that the failure of the
plaintiff to name the applicant and obtain the order is a nullity
ab initio. In my view the court is functus officio. If the
applicants have any grievance against the order then the proper
procedure is to bring a separate action and need be to seek
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appropriate relief from the court inclusive of damages if they
are aggrieved, and have been wronged by the plaintiff and/or
defendant. In Goldsmith v. Sperrings Ltd [1977] 2 All ER 566
Lord Denning had this to say:“In a civilized society, legal process is the machinery for keeping
order and doing justice. It can be used properly or it can be abused. It
is used properly when it is invoked for the vindication of men’s rights
or the enforcement of just claims. It is abused when it is diverted from
its true course so as to serve extortion or oppression; or to exert
pressure so as to achieve an improper end. When it is so abused, it is a
tort, a wrong known to the law”
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(g)
Even on merit relating to the application I agree with the
submission of the learned counsel for the plaintiffs and
defendant that enclosures 13 and 10 must be dismissed.
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4.
For reasons stated above I dismiss enclosures 13 and 10 with costs.
I hereby order so.
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-sgd(Y.A. DR.HAJI HAMID SULTAN BIN ABU BACKER)
Judge
High Court (Commercial Division)
KUALA LUMPUR
th
Date: 27 January 2011
For Plaintiff:
Yoong Sin Min (C.Y.Kong with her),
Messrs. Shook Lin & Bok
For Defendant:
Vanessa Wong,
Messrs. Mah-Kamariyah & Philip Koh
For Intended Intervenor (Pilecon Engineering Berhad):
Sri Dev Nair; (Ranjan N.Chandran with him),
Messrs. Ranjan Chitravathy & Nik
For Intended Intervenor (Allure Gold Overseas Ltd):
N.Surendran (Edwin Lim with him),
Messrs. E.S. Yap & Partners
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