The court affirmed the applicability of res judicata, barring the plaintiff from re-litigating issues already adjudicated in earlier cases.

[1] This is a writ action for declaratory and injunctive reliefs in respect of a judgment of the Court which performance the plaintiff construed would tantamount to a breach of a statutory provision.

[2] Following completion of trial, I dismissed the claim, on account primarily of res judicata. This judgment contains the full reasons for my decision.

Key Background Facts

The Parties

[3] The plaintiff, Malpac Holdings Berhad ("MHB") is a locally incorporated public company listed on the Main Board of Bursa Malaysia. It is an investment holding company. The first defendant, Malpac Capital Sdn Bhd ("MCSB") is a private company which is wholly owned by MHB.

[4] MCSB was previously primarily involved in the securities broking and later, lending business. One of its principal borrowers was Techno Asia Holdings Berhad ("TAHB"). That lending transaction involved security provided by TAHB to MCSB in the form of landed properties owned by the subsidiaries of TAHB, namely Ganda Plantations (Perak) Sdn Bhd ("GPPSB") and Chempaka Sepakat Sdn Bhd ("CSSB") ("the Plantation Lands").

[5] The borrower, TAHB had then encountered financial difficulties. This resulted, on 2 January 2001, in MCSB agreeing to a workout proposal structured by Pengurusan Danaharta Nasional Berhad, the special administrators of GPPSB and CSSB, to accept the transfer the Plantation Lands as partial settlement of the loans owing to MCSB by TAHB.

[6] In February 2001, MCSB purchased the entire paid-up capital of Radiant Response Sdn Bhd ("RRSB"), the fourth defendant, which were 2 ordinary shares of RM1.00 each. Thus RRSB became a wholly owned subsidiary of MCSB. The purpose was for the latter to nominate the former to be the transferee of the Plantation Lands by way of a novation to RRSB for RM30.6 million, being the indicative swap value under the workout proposal, to be satisfied by way of a shareholders' loan of an equivalent amount.

[7] Enter the second and third defendants, which are the plaintiff's true adversaries in this suit. The objective was the sale by MCSB of the Plantation Lands to them. The structure of the deal is not complex. The second and third defendants were to acquire the Plantation Lands by buying RRSB which would be the owner of the Plantation Lands upon the said novation by MCSB to RRSB.

The Agreements

[8] Thus, on 5 April 2002, the second defendant, Yong Toi Mee ("YTM") and the third defendant Cheang Kim Leong ("CKL") (also collectively referred to as "the Purchasers") executed a conditional Sale and Purchase Agreement with MCSB, for the purchase the 2 shares in RRSB owned by MCSB, then being the entire share capital of RRSB for a consideration sum of RM2.00 ("the First SPA").

[9] Importantly, it was the key condition of the First SPA, in order to effectuate the payment of the Plantation Lands to MCSB, that the Purchasers paid, on behalf of RRSB, the sum of RM30.6 million, being the shareholders' loan having been granted by MCSB to RRSB to enable RRSB to accept the transfer of the Plantation Lands from the special administrator to RRSB in the first place, as referred to earlier.

[10] The Purchasers, later on 5 April 2002, executed another Sale and Purchase Agreement, this time with one Fairyoung Enterprises Sdn Bhd ("FESB"), for the purchase by the former of the oil palm mill as well as plant and machines (collectively, "the Mill") situated on one of the Plantation Lands for RM22.4 million ("the Second SPA").

[11] On the same date, MCSB, the Purchasers and FESB entered into a Supplementary Agreement to consolidate the First SPA and the Second SPA as one transactio