Back
2011 MarsdenLR 1044
HIGH COURT MALAYA KUALA LUMPUR
PILECON ENGINEERING BERHAD – Appellant
Versus
MALAYAN BANKING BERHAD & ORS – Respondent
[Civil Suit No: 22NCC-1577-09/2011]
The principle of res judicata bars relitigation of claims previously adjudicated, particularly when the same issues are raised in subsequent actions against parties deemed to have adequately represented interests in prior proceedings.
Headnote:(A) Companies Act 1965 - Section 176 - Trust Companies Act 1949 - Trust Deed Obligations - Breach of Trust and Natural Justice - Plaintiff, a public company, issued Redeemable Convertible Secured Loan Stocks leading to financial issues and not redeeming stocks as per the trust deed. Court ruled claims against trustee and defendant banks were advocated in prior cases; claims struck out due to res judicata. (Paras 1-92)
(B) Natural Justice - Rights of Hearing - Claimants alleged lack of notice and chance to be heard in actions leading to an order deemed detrimental to their rights and assets. Court found no merit as previous courts dismissed similar grievances. (Paras 24, 56, 72)
(C) Res Judicata - Same Issues Previous Adjudicated - Present claims overlapped with past rulings that resolved the same core disputes; thus, courts declined to reconsider previously determined matters. (Paras 70-91)
Findings of Court:
The court thoroughly examined claims of breach of rules of natural justice, and res judicata established by previous proceedings leads to the dismissal of the claim. The situation indicates potential abuse of process by the plaintiff, necessitating action from the court to prevent further litigation.
Issues: Whether the actions of the defendants amounted to breach of natural justice and if the plaintiff’s claims were barred by res judicata based on previous decisions.
Ratio Decidendi: The prior resolutions of the same issues in the originating summons and associated litigation prohibit relitigation of these matters, ensuring legal consistency.
Result: Claims struck out against all defendants with costs awarded.
| Table of Content |
|---|
| 1. financial details and trust relationships (Para 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. trustee's duties and plaintiff's objections (Para 9 , 10 , 11) |
| 3. allegations against the trustee and actions taken (Para 12 , 13 , 14 , 15 , 16 , 17) |
| 4. claim for relief and grounds for action (Para 21 , 22) |
| 5. application for interim injunction (Para 24 , 25 , 26 , 27) |
| 6. judicial standards for injunctions (Para 30 , 31 , 32) |
| 7. conditions for issuing an injunction (Para 33 , 34 , 35) |
| 8. res judicata in earlier proceedings (Para 36 , 37 , 38 , 39) |
| 9. finality of judicial decisions (Para 40 , 41 , 42 , 43 , 44 , 45) |
| 10. court's authority on valid judgments (Para 46 , 47 , 48 , 49) |
| 11. consequences of filing baseless claims (Para 50 , 51 , 52 , 53 , 54 , 55) |
| 12. conclusion on the adequacy of remedies (Para 56 , 57 , 58) |
| 13. final grounds for dismissal of claims (Para 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88) |
| 14. costs and their justification (Para 89 , 90 , 91 , 92) |
[1] There are two sets of defendants. For convenience, I shall refer to the set represented by Miss Yoong Sin Min as the "defendant banks" and the single 12th defendant represented by Mr BH Yap as, the "trustee".
[2] The facts in this case have been recounted no less than twice in two related cases. In one of those two cases, arguments had even been taken to the Federal Court in an application for leave to appeal under s 96 of the Courts of Judicature Act 1974 (Act 91). Nevertheless, those facts need retelling together with what actually transpired in those two cases as those facts form the substratum of the present suit and are absolutely vital for the proper understanding and appreciation of the present case.
Salient Facts
The RCSLS
[3] The plaintiff is a public company of limited liability. The defendant banks had separately extended various credit facilities to the plaintiff. The trustee is a trust corporation established under the Trust Companies Act 1949 . It provides professional trust services.
[4] The plaintiff ran into financial difficulties and was unable to settle its debts. On 12 January 2006, pursuant to a Scheme of Arrangement sanctioned by the Court under s 176 of the Companies Act 1965 , the plaintiff issued and caused to be constituted Redeemable Convertible Secured Loan Stocks [RCSLS] in the aggregate nominal value of RM120 million with interest at 5% per annum payable semi-annually. The defendant banks are RCSLS holders. At the same time, the plaintiff issued and caused to be constituted Irredeemable Convertible Unsecured Loan Stocks [PEB-ICULS] in the aggregate nominal value of RM58,483,707 to the plaintiffs general unsecured creditors with coupon at a fixed rate of interest at 5% per annum payable semi-annually. These ICULS were said to be held by over 500 different holders comprising mainly individuals.
[5] The 12th defendant was appointed as trustee for the defendant banks/ holders of the RCSLS; and as Security Trustee holding the plaintiff's moveable and immovable assets said to be worth RM194,082,977.00 as security for the defendant banks/holders of the RCSLS. This is reflected in the trust deed and security trust deed both dated 6 November 2006 entered into between the plaintiff and the 12th defendant. The plaintiff further executed a Power of Attorney in favour of the trustee.
[6] Under the terms of the trust deed, the plaintiff covenanted, inter alia:
(i) to redeem the RCSLS on maturity dates as follows:
RCSLS
MATURITY DATE
RM10 million
RM25 million
RM40 million
RM45 million
(ii) to pay interest on the outstanding RCSLS at the rate of 5% per annum semi-annually.
[7] The plaintiff made the first tranche but failed to pay the remaining tranches on the maturity dates as set out above. The RCSLS were not redeemed on the last maturity date of 26 March 2010.
[8] As trustee, the 12th defendant convened an Extraordinary General Meeting of the RCSL
