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2025 MarsdenLR 282
HIGH COURT MALAYA KUALA LUMPUR
DAIRYAR KHATAN MUTHU & ORS – Appellant
Versus
STANDARD CHARTERED SAADIQ BERHAD – Respondent
[Civil Suit No: WA-22NCvC-171-04/2023]
Claims are barred by limitation when not filed within statutory period; concealment of prior judgments renders claims unsustainable.
Headnote:(A) Limitation Act 1953 - Plaintiffs' claims barred by limitation and unsustainable due to undisclosed prior legal orders - Court grants Defendant's application to strike out claims under O 18 r 19 Rules of Court 2012 - Plaintiffs failed to disclose the Horst Order, leading to financial losses and default. (Paras 1, 22, 37)
(B) Striking Out Applications - The court's power to strike out claims exercised only when pleadings are 'obviously unsustainable' - Plaintiffs' concealment of critical information regarding prior judgments undermines their claims. (Paras 23, 35)
Facts of the case:
Plaintiffs, family members, alleged losses from Defendant bank's actions related to a property financing agreement, which was complicated by a lien established in favor of a third party, Horst, from earlier litigation. (Paras 3-5, 19)
Findings of Court:
Plaintiffs' claims are barred by limitation as they failed to act within the statutory period after the Consent Order was recorded, and their action is based on unsustainable grounds. (Paras 46-47)
Issues: Whether the Plaintiffs' claims against the Defendant bank are time-barred and whether they are sustainable given the undisclosed Horst Order. (Paras 37-40)
Ratio Decidendi: The court held that the concealment of the Horst Order and the failure to file within the limitation period rendered the Plaintiffs' claims unsustainable, justifying the striking out of their claims. (Paras 35, 46)
Result: Defendant's application to strike out the Plaintiffs' claim is allowed.
| Table of Content |
|---|
| 1. court's duty to assess sustainability of claims. (Para 1 , 2) |
| 2. factual background regarding the plaintiffs and defendant. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18) |
| 3. plaintiffs' allegations against defendant bank. (Para 19 , 20 , 21 , 22) |
| 4. analysis of the horst order and its implications. (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36) |
| 5. limitation period and its impact on plaintiffs' claims. (Para 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46) |
Introduction
[1] In this case there is a rather lengthy chronology of events, and at first blush appeared to be complicated. However, the undisputed contemporaneous documents — including court orders issued in earlier proceedings involving the same parties — show that the Plaintiffs' claims are obviously unsustainable and, in any event, obviously barred by the Limitation Act 1953 . Thus, this court is duty-bound to allow the Defendant's striking-out application under O 18 r 19 Rules of court 2012.
[2] The reasons for my concluding that the Plaintiffs' action is obviously unsustainable are set out below.
Background Facts
[3] The Plaintiffs are members of the same family. The 3rd Plaintiff is the son of the 1st Plaintiff and 2nd Plaintiff.
[4] The Defendant is a commercial bank licensed to offer, inter alia, Islamic banking services.
[5] The Plaintiffs had purchased a property in Penang which was held under GRN 84255 Lot 838, s 2, Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang, bearing a postal address No 19, Lilitan Sungai Emas 11000 Batu Ferringhi, Pulau Pinang ("the Property"). The Property was charged to CIMB Bank.
[6] In early 2012, the Plaintiffs approached the Defendant to refinance their purchase of the Property. It culminated in an Islamic financing agreement between the Plaintiffs and the Defendant Bank. The Defendant issued its first letter of offer to the Plaintiffs on 28 May 2012, followed by other letters. A Facility Agreement dated 26 September 2012 was the final document which concluded the Islamic financing agreement between them (collectively referred to as "the said financing agreement"). I have stated those dates because they are relevant to support my findings — which shall be explained in detail hereinbelow.
[7] As the said financing agreement was by way of Islamic banking, it was structured as the Defendant bank holding 80% share of the Property while 20% share was held by the Plaintiffs. Valuing the Property at RM1,000,000.00, the Defendant bank was to pay out RM800,000.00 for the 80% share.
[8] The essence of the said financing agreement was that the Plaintiffs shall gradually acquire the Defendant bank's initial ownership interest, rights and benefits in the Property by making monthly instalment payments to the Defendant bank for a period of 420 months, and with the Defendant bank leasing its share in the Property to the Plaintiffs on the basis of "Ijarah" (an Islamic banking term). It was clearly provided that a breach of the obligation to make monthly instalment payments to the Defendant bank shall constitutes an "Event of Default" rendering any sum payable under the said financing agreement to become immediately due and payable, and all the security in relation to the said financing Agreement shall become immediately enforceable.
[9] As at October 2012, the Plaintiffs owed CIMB Bank about RM430,000.00. In performing its part of the said financing agreement, on 16 October 2012 the Defendant bank paid RM432,754.30 (out of RM800,000.00) to CIMB Bank as the redemption sum to redeem the Property from CIMB Bank. It was undisputed that the Defendant bank had disbursed the balance from the RM800,000.00 to the Plaintiffs.
[10] CIMB Bank duly discharged the title of the Property and handed the original title of the Property to the Defendant bank's solicitors, so that it could be charged to the Defendant bank.
[11] It transpired that the charge from the Plaintiffs to the Def
