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2024 MarsdenLR 1195
HIGH COURT MALAYA KUALA LUMPUR
WORK @ H SDN BHD & ANOR – Appellant
Versus
MALAYAN BANKING BERHAD & ANOR – Respondent
[Suit No: WA-22NCC-216-04/2023]
The court upheld the right of the Bank to sell the assigned property due to default, ruling the Plaintiffs' claims as frivolous and an abuse of process.
Headnote:(A) Rules of Court 2012 - Order 18 Rule 19(1)(a), (b), (d) - Application to strike out claims - Plaintiffs failed to establish a reasonable cause of action against Defendants - Court allowed applications to strike out claims as unsustainable. (Paras 1, 2, 35)
(B) Assignments - Rights of assignee - Bank entitled to sell property upon default as per assignment clauses - Plaintiffs' claims to disrupt auction found to be without merit. (Paras 5, 6, 7, 10)
(C) Allegations against 2nd Defendant - Plaintiffs’ claims lacked evidence and were dismissed as unsubstantiated. (Paras 25, 26, 32)
Facts of the case:
The Plaintiffs filed a suit to prevent the auction of a property assigned to the Bank due to a default in payment, following a judgment against the Borrower. (Paras 3, 4)
Findings of Court:
The Plaintiffs had no reasonable cause of action and their claims were struck out. (Paras 34, 35)
Issues: Whether the Defendants could strike out the claims based on the rules of court; whether the claims were sustainable. (Paras 2, 12)
Ratio Decidendi: The court affirmed that the Bank had the right to execute the judgment and sell the property per the assignment, and the Plaintiffs’ claims were frivolous and an abuse of process. (Paras 7, 14, 34)
Result: Applications by both Defendants allowed.
JUDGMENT
Introduction
[1] Each Defendant in this suit file applications to strike out the Plaintiffs' claim. The 1st Defendant ("the Bank") applied under encl 26, while the 2nd Defendant applied under encl 21. I allowed the application of both Defendants. It is my view that the Plaintiffs have failed to demonstrate that there is a reasonable cause of action against the respective Defendants.
Issue
[2] The issue to be considered is whether the Defendants are entitled to strike out the claim based on O 18 r 19(1)(a), (b) and (d) of the Rules of 2012 in accordance with the principles laid down in Bandar Builder Sdn Bhd & Ors v. United Malayan Banking Corporation Bhd; ; [1993] 2 AMR 1969. In short whether the case mounted by the Plaintiffs was obviously unsustainable.
Background Facts
[3] It is important that the context of this suit is put into perspective. This can be found in the submissions of the 1st Defendant which I find to be instructive. The salient facts being:
(a) The Bank granted Banking Facilities to the Borrower, Cenmal Commercial Sdn Bhd secured by, inter alia, a Deed of Assignment cum Agreement (Sale and Purchase Agreement) ("1st Assignment") dated 20 January 2016 between the Bank and the 1st Plaintiff, Work@H Sdn Bhd, and Deed of Assignment cum Agreement (Joint Venture Agreement) ("2nd Assignment") dated 20 January 2016 between the Bank and the 2nd Plaintiff, Mines Resort Sdn Bhd ("Assignment"). Pursuant thereto, the entire building known as the The Heritage Tower has been absolutely assigned to the Bank ("Property"). There is also a Letter of Undertaking and a Letter of Guarantee executed by LKY to secure the Banking Facilities;
(b) There was a default in the payment of the Banking Facilities. As a result, the Bank commenced civil action and on 15 May 2019, obtained a Judgment against the Borrower, LKY and the 1st Plaintiff in the sum of RM97,745,966.54 as at 25 February 2019 together with interest and cost ("Judgment"). The Bank did not include the 2nd Plaintiff in the civil action as the 2nd Plaintiff has been in liquidation since 28 February 2017;
(c) The Borrower, LKY and the 1st Plaintiff appealed against the Judgment to the Court of Appeal. The Court of Appeal dismissed the said appeal and affirmed the Judgment on 19 February 2020 ("Order"). There is no stay of execution and the Judgment remains final, valid and binding to-date;
(d) In exercise of its rights under the Assignments, the Bank also appointed the 2nd Defendant, Ng Chan Mau & Co to conduct the auction sale of the Property to recover the Judgment debt owing to the Bank;
(e) The Property was then first put up for auction on 20 August 2021 with a reserve price of RM60,000,000.00 based on a valuation report prepared by IPC Island Property Consultants Sdn Bhd. The Property had undergone multiple auctions whereby CH Sea had become a successful bidder on two (2) occasions (3rd and 8th auctions) but failed to pay the balance purchase price by the deadlines. As a result, the Property had been put up for a 9th auction (the last auction) which had been fixed on 20 April 2023;
(f) However, the 9th auction was cancelled as the Plaintiffs had obtained an Ex-parte injunction Order on 17 April 2023 from this Court .
Finding
[4] It is my finding that the suit was filed by the Plaintiffs to scuttle the Defendants from auctioning the Property as part of the execution options open to the Bank to realize the Judgment it obtained. As such, the claim ought to be struck out for the following reasons.
Enclosure 26 - The Bank's Application
(i) No Reasonable Cause Of Action - Order 18 Rule 19(1)(a)
The Bank's Right To Sell The Property
[5] I find that there is no reasonable cause of action against the Bank. It is not disputed that the Property was assigned to the Bank by virtue of the Assignments. In short, it is open for the Bank to take all actions necessary to execute the Judgment.
[6] It is trite where the right of an assignee in the context of a loan ag
