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2022 MarsdenLR 66
HIGH COURT MALAYA SHAH ALAM
YAP CHEE KEONG HOLDINGS SDN BHD – Appellant
Versus
COSMOPOLITAN AVENUE SDN BHD – Respondent
[Civil Appeal No: BA-12AC-14-10-2020]
The plaintiff retained standing to sue without the Bank's consent as the assignments were by way of charge, not absolute assignments.
Headnote:(A) Civil Law Act 1956 – Section 4(3) – Specific Relief Act 1950 – Section 41 – The appeal pertains to an order by the Sessions Court striking out the plaintiff's suit regarding a real estate transaction due to alleged lack of locus standi and considerations of settlement agreements – The Court determined that an absolute assignment was not created, and thus, the plaintiff had standing to file the suit independently. (Paras 40, 46, 60)
(B) Locus Standi – A party may file action without the assignee's consent when regarding assignments by way of charge, maintaining equitable interest in the property, the plaintiff's standing was upheld. (Para 49)
Facts of the case: The plaintiff purchased two parcels from the defendant as part of a development project but faced delays in possession and alleged misrepresentations from the defendant. The Sessions Court dismissed the plaintiff's claim for lack of locus standi related to consent from the financing Bank. (Paras 4, 22)
Findings of Court: The Court concluded that the plaintiff retained the beneficial interest in the parcels and did not need the Bank's consent to initiate the action. (Paras 40, 49)
Issues: The main issues included whether the plaintiff had the standing to sue without the Bank's consent, whether the alleged settlement agreements were enforceable, and if the action could be simultaneously dismissed and struck out by the Sessions Court. (Paras 26, 66)
Ratio Decidendi: The Court emphasized the importance of assessing all contextual factors and found that even if the plaintiff lacked a statutory claim, the merit of the case warranted a trial. (Paras 58, 64)
Result: The appeal was allowed; the previous ruling was set aside, and costs were awarded to the plaintiff.
[Appeal To High Court Against Sessions Court's Order To Strike Out Of Suit]
Background
[1] I shall refer to parties in this judgment as they were in the Sessions Court (SC).
[2] The defendant company (defendant) developed an integrated commercial and residential development project known as "Empire City @ Damansara" (Project).
[3] On 23 February 2011, by way of two Sale and Purchase Agreements (Two SPAs) entered into by the plaintiff company (plaintiff) and defendant, the plaintiff purchased two parcels in the Project, namely parcels M-26-07 and M26-08 (Two Parcels).
[4] The Two SPAs have the same substantive provisions. I reproduce below the relevant terms of the Two SPAs:
(1) clause 24.1 has provided that the defendant shall deliver vacant possession of the Two Parcels in the manner stipulated in cl 25 within 42 calendar months (42 Months' Period) from the date the "Building Plan Approval" is obtained or the date of the SPAs, whichever is later [cl 24.1 (SPAs)]. According to cl 3.1 SPAs, Building Plan Approval means approval of the "Building Plan" [as understood in cl 1.1(d) SPAs] by the "Appropriate Authority" [defined in cl 1.1(b) SPAs];
(2) clause 24.2 has stated that, among others, if the defendant fails to deliver vacant possession of the Two Parcels in the manner stipulated in cl 25 within the time stated in cl 24.1 (SPAs), the defendant shall be liable to pay liquidated damages (LD) to the plaintiff from day to day at the rate of 10% per annum on the portion of the "Purchase Price" [defined in cl 4.1 read with Part III of the Sixth Schedule to the SPAs] from the expiry date of delivery of vacant possession of the Two Parcels in cl 24.1 (SPAs) until the date of notice from the defendant to the plaintiff requesting the plaintiff to take vacant possession of the Two Parcels [cl 24.2 (SPAs)];
(3) according to cl 25.1, the defendant shall let the plaintiff into possession of the Two Parcels upon the issuance of a certificate by the defendant's architect (Architect) certifying that the construction of the Two Parcels has been practically completed in accordance with the SPAs and provided that the plaintiff has paid all monies due to the defendant and the plaintiff has performed all the terms and covenants on the plaintiff's part under the SPAs [cl 25.1 (SPAs)];
(4) by reason of cl 25.2, the plaintiff "shall not occupy" the Two Parcels until the issuance of the Certificate of Completion and Compliance (CCC) in respect of the Two Parcels [cl 25.2 (SPAs)];
(5) clause 26 has provided that the defendant, shall at its own cost, duly comply with all the requirements of the Appropriate Authority which are necessary for the issuance of CCC [cl 26 (SPAs)]; and
(6) by reason of cl 30, time shall be the essence of the Two SPAs.
[5] The plaintiff had obtained loans from United Overseas Bank (M) Bhd (Bank) to finance the purchase of the Two Parcels (Bank Loans). For this purpose, the plaintiff had entered into two "Loan Agreements cum Assignments" with the Bank (Two LACAs). The defendant had consented in writing to the Two LACAs. The substantive provisions of the Two LACAs are the same. The following provisions in the Two LACAs are pertinent:
(1) paragraph 5 of the Recital has stated that, among others, the Bank Loans are "secured" by two assignments of the plaintiff's "benefits, rights, title and interest" in the Two SPAs to the Bank [para 5, Recital (LACAs)];
(2) clause 1 provides, among others, that the plaintiff "covenants and undertakes" to pay "ON DEMAND" by the Bank all sums due to the Bank from the plaintiff in respect of the Bank Loans [cl 1 (LACAs)];
(3) according to cl 8, among others, as consideration for the Bank Loans, the plaintiff "absolutely assigns" to the Bank the "full and entire" of the plaintiff's "benefits, rights, title and interest" in the Two SPAs to the Bank [cl 8 (LACAs)];
(4) clause 9 has provided that, among others, the "security" created by the Two LACAs are "expressly intended to be and shall be
