CASE NO.4: Part II Bandar Baru Villa Sdn Bhd v Malaysia Building Society Berhad

[CIVIL PROCEDURE-SETTING ASIDE CONSENT JUDGMENT]

Civil Procedure : Striking out – Application for – Defendant applied to strike out plaintiff’s writ of summons and statement of claim – Plaintiff defaulted on facility agreement and failed to comply with consent judgment – Whether there was a bona fide dispute on indebtedness – Whether there was any basis for plaintiff to set aside consent judgment – Whether plaintiff’s challenge of s 218 Companies Act 1965 and Form 16D (National Land Code) declaration made by defendant res judicata – Whether plaintiff estopped from denying its liability – Whether consent judgment still valid – Whether plaintiff’s claim sustainable

Civil Procedure : Judgment - Consent judgment - Setting aside - Factors to be considered - Plaintiff sought to declare consent judgment with defendant invalid - Whether specific grounds in Badiaddin Mohd Mahidin & Anor v. Arab Malaysian Finance Bhd to set aside consent judgment established - Whether consent judgment still valid

 

Mohd Nazlan Mohd Ghazali J:

Introduction 

[1]     This was an application filed by the defendant in encl 8 to strike out the writ of summons and the statement of claim of the plaintiff in pursuance of O 18 r 19 (1)(b) and (1)(d) of the Rules of Court 2012 ("the ROC 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 RM5,500,000.00 ("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.

[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 s 218 of the Companies Act 1965 ("the s 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 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 s 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 s 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 s 218 Notice.

 

The Law On Striking Out

 

[8]   The application by the defendant was premised on two of the four limbs under O 18 r 19(1) of the Rules of Court 2012 (the "ROC 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:

  • it discloses no reasonable cause of action or defence, as the case may be;
  • it is scandalous, frivolous or vexatious;
  • it may prejudice, embarrass or delay the fair trial of the action; or
  • 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 O 18 r 19(1) is the Supreme Court's decision in Bandar Builder Sdn Bhd & Ors v. United Malayan Banking Corporation Bhd [1993] 1 MLRA 611; [1993] 3 MLJ 36; [1993] 4 CLJ 7; [1993] 2 AMR 1969, and in particular, the following part of the judgment of Mohamed Dzaiddin Hj Abdullah 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 MR 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" (Attorney-General of Duchy of Lancaster v. L & NW Ry Co [1892] 3 Ch 274). 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). 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 pari materia 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's decision in Harapan Permai Sdn Bhd v. Sabah Forest Industries Sdn Bhd [2010] 3 MLRA 37; [2011] 2 MLJ 192; [2011] 1 CLJ 285) and the said claim must also be proven to be obviously unsustainable (see another Court of Appeal's decision of Zaina Abidin Hamid & Ors v. Kerajaan Malaysia & Ors [2009] 2 MLRA 626; [2009] 6 MLJ 863; [2009] 6 CLJ 683). 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.

 

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 s 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 s 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 March 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 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] 1 MLRA 649; [2000] 4 MLJ 657; [2000] 4 CLJ 437; [2000] 1 AMR 757 has ruled that a notice of demand under s 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 RM500.00 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 six 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 para (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 s 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 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 Ltd v. Societe des Ateliers et Chantiers de France [1919] AC 1). The leading textbook authority of Chitty on Contracts (30th edn, 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 nonreliance 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 encl 8, the counsel for the plaintiff made the argument that there was a genuine dispute on the s 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 s 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 s 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 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 O 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 Bhd [1998] 1 MLRA 183; [1998] 1 MLJ 393; [1998] 2 CLJ 75; [1998] 1 AMR 909, 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 judgment by consent are grounds which basically relate to consensus ad idemor 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 judgment 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 judgment by consent is based, is vitiated by any ground recognised 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 such a perfected consent order or judgment 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 Chettiar v. Lum Kum Chum & Ors; Meenachi v. Lum Kum Chum & Ors [1981] 1 MLRA 525; [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 s 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 s 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.

[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 s 218 Notice now being pursued in the instant proceeding has manifestly already been adjudicated in the hearing for encl 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 encl 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 s 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 Fortunainjunction 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 in advertence, negligence or deliberately. The Supreme Court made it clear in Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd [1995] 1 MLRA 611; [1995] 3 MLJ 189; [1995] 3 CLJ 783; [1995] 3 AMR 2559 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 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."

There are a number of other cases which have since followed this principle (see, for example, the Court of Appeal's decisions in Huawei Tech Investment Co Limited v. Transition Systems (M) Sdn Bhd [2014] 1 MLRA 148; [2013] 5 MLJ 396 and OCBC Bank (Malaysia)  Bhd v. Kredin Sdn Bhd [1997] 1 MLRA 84; [1997] 2 MLJ 544; [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 s 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 encl 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, vol 1, (Lexis Nexis) states that the most common instance of matters which are struck out under O 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's decision in Wee Choo Keong v. MBf Holdings Bhd & Anor And Another Appeal[1993] 1 MLRA 260; [1993] 2 MLJ 217; [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 Court decision in Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian Merchant Bank Berhad [1995] 1 MLRA 738; [1995] 3 MLJ 331; [1995] 4 CLJ 283; [1995] 3 AMR 2871). 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] 1 MLRH 675; [2004] 6 MLJ 1; [2004] 6 CLJ 25; [2008] 3 AMR 43 and the Court of Appeal decision in Eastern Properties Sdn Bhd v. Hampstead Corporation Sdn Bhd [2007] 2 MLRA 406; [2007] 6 CLJ 538).

[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 recognised 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's decision in Abdul Rahim Abdul Hamid & Ors v. Perdana Merchant Bankers Bhd & Ors [2000] 1 MLRA 111; [2000] 2 MLJ 417; [2000] 2 CLJ 457; [2000] 2 AMR 1319 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 case of Low Lee Lian v. Ban Hin Lee Bank Bhd [1996] 2 MLRA 491; [1997] 1 MLJ 77; [1997] 2 CLJ 36; [1997] 1 AMR 1036). 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 vis-a-vis the s 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 O 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 O 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 O 92 r 4 of the ROC 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 O 18 r 19(1)(b) and (1)(d) and under O 92 r 4 of the ROC 2012. I therefore allow encl 8 for the defendant with costs.

 

COUNSEL:

For the plaintiff: B Devandra; M/s Kamil Hashim Raj & Lim

For the defendant: Helmi Hamzah; M/s Hisham Sobri & Kadir

 

NOTE:

  • For full report, please refer to Bandar Baru Villa Sdn Bhd v Malaysia Building Society Berhad [2017] 1 MLRH 1

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