JUDGMENT

(Appeal Against Garnishee Order)

Kenneth St James J:

Prelusion

[1] JNH Bina Sdn Bhd (JD) performs construction works for the Perbadanan Pembangunan Pulau Pinang/Penang Development Corporation (PDC). The PDC makes progressive payments to the JD for the works.

[2] The judgment creditor: Suhaimi Sabudin (JC) obtained a judgment against the JD. The JC wants to enforce the judgment by garnishee proceedings. The JC obtained a Garnishee Order to attach the progressive payments that the PDC owes to the JD. The Registrar granted that order. The JD appeals to the Judge in chambers. Should that Garnishee Order be extinguished, or should it be affirmed?

The Pertinent Facts

[3] The PDC awarded two construction contracts to the JD. The PDC periodically paid the JD against certificates of progressive payment issued under the construction contracts. The PDC is the JD's debtor.

[4] The JD entered into two facility agreements with the Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank) to finance the performance of the JD's obligations under the construction contracts. These two facility agreements were called Letters Of Assignment.

[5] In the Letters Of Assignment, the JD agreed to