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2021 MarsdenLR 4171
HIGH COURT MALAYA JOHOR BAHRU
AMANAH INTERNATIONAL FINANCE SDN BHD – Appellant
Versus
MEDINI SQUARE SDN BHD; ISKANDAR INVESTMENT BHD (INTERVENER) – Respondent
[Originating Summon No: JA-24FC-1640-12/2017]
The Plaintiff qualifies as a 'scheduled institution' under BAFIA, exempting it from the Moneylenders Act, thus validating the Facility Agreement and related Charge.
Headnote:(A) Moneylenders Act 1951 – Section 2A & 24 – Contracts Act 1950 – The parties are involved in a dispute concerning the validity of a loan agreement and associated security documents. The Defendant challenged the legality of the Facility Agreement, claiming that the Plaintiff was an unlicensed moneylender. The Court considered the applicability of the Moneylenders Act and determined the Plaintiff was a 'scheduled institution' under the Banking and Financial Institutions Act 1989, thus exempt from the Moneylenders Act restrictions. The Court ruled the Charge and Order for Sale related to the Lease is valid and enforceable. (Paras 17, 25, 33, 42)
Findings of Court: The Charge upon which the Order for Sale was founded is neither void nor defeasible; the Plaintiff's Facility Agreement and security documents are enforceable.
Issues: The primary issue addressed was the legality of the loan agreement in light of the Defendant's claim that the Plaintiff was unlicensed under the Moneylenders Act.
Ratio Decidendi: The Court concluded that the Plaintiff's status as a 'scheduled institution' exempts it from the Moneylenders Act, making the Facility Agreement valid.
Result: Applications dismissed with costs.
JUDGMENT
Introduction
[1] This is an Application dated 22 October 2019 (Encl 14) filed by the Defendant to obtain an order to set aside an Order for Sale dated 1 February 2018 ('the Order for Sale'); alternatively, to stay the execution and proceedings in relation to the Order for Sale, pending the disposal of the Defendant's civil action against the Plaintiff in the High Court of Malaya at Kuala Lumpur (in case no. WA-22NCC-592-10/2019).
[2] Related to the above said Application is another Application dated 13 November 2019 (Encl 72) also filed by the Defendant to stay the execution and proceedings in relation to the Order for Sale dated 1 February 2018, pending the disposal of the Defendant's civil action against the Plaintiff in the High Court of Malaya at Kuala Lumpur; where this second Application included an Intervener, above named. Hence the disposal of Encl 14 will have the salutary effect of the disposal of Encl 72, as well.
The Matrix
[3] The Plaintiff is a financial institution whilst the Defendant is a company, both incorporated under the Companies Act 2016.
[4] The Defendant was granted a 99 year lease ('the Lease') over a piece of freehold land held under Hak Milik No. H.S. (D) 478916, No. PTD 170708, Mukim Pulai, Daerah Johor Bahru, Negeri Johor Darul Takzim ('Land') by Iskandar Investment Bhd. (the Intervener herein) ~ who are the registered proprietors of the said Land.
[5] The Defendant was to develop the Land into a mixed-development project known as "Medini Square", comprising retail, shop offices, small offices/home offices ("SOHO") units and office towers ('the Project').
[6] Vide a Letter of Offer dated 21 February 2014, upon the Defendant's request, the Plaintiff offered to the Defendant, financing facilities of up to RM100,000,000.00 for the purpose of the development of the Project.
[7] Subsequently, the Plaintiff (as Lender, Security Agent and the Facility Agent) executed a Facility Agreement dated 28 April 2014 with the Defendant as the Borrower ('the Facility Agreement), wherein the Plaintiff granted to the Defendant a term loan facility of up to the maximum aggregate principal sum of RM80,000,000.00 ('the Loan Facility').
[8] To secure the repayment of the Loan Facility, the interest thereon and all other sums due and owing under the Facility Agreement, the Defendant executed certain security documents, which included joint and several guarantees; a debenture creating a first fixed and floating charge over all the assets and undertakings of the Defendant; and a charge over the Lease ('the Charge') in accordance with the provisions under the National Land Code ('NLC').
[9] The Charge was registered on 30 April 2015 vide Presentation No. 34013/2015, wherein the Plaintiff acquired its interest as the Chargee to the Lease.
[10] It is not in dispute that upon the Defendant's request, a total sum of RM23,325,803.04 was disbursed under the Loan Facility.
[11] The Defendant then defaulted in the repayment of the outstanding amount under the Facility Agreement; whereat the Plaintiff terminated the Facility Agreement and activated the security documents related thereto, after the Defendant neglected to respond to the Plaintiff's demands for payment.
[12] Following the above said termination; and as the outstanding amount owed to the Plaintiff remained unsettled, the Plaintiff commenced a civil action at the High Court at Johor Bahru vide Civil Suit No. JA- 22NCC-34-11/2017 ('Suit 34') against the Defendant and 5 others to recover the same.
[13] Judgement in Default was entered against the Defendant in Suit 34 on 19 December 2017; and an application to set aside the said Default Judgement was dismissed by the High Court at Johor on 15 August 2020.
[14] The Plaintiff also caused to be issued against the Defendant a statutory notice in Form 16D of the NLC dated 11 October 2017 (a Notice of Default with respect to a Charge); demanding the Defendant to remedy its breach within 30 days from the ser
