Secured creditors can pursue enforcement remedies beyond the value of their security, and full compliance with disclosure requirements in ex parte applications is essential for maintaining such orders.

Introduction

[1] This is an appeal by the Appellant (Sinohydro) against the decision of the High Court dated 10 March 2023 to set aside an ex parte Prohibitory Order (PO) granted. The PO is in respect of 13 parcels of land (subject land).

[2] The PO was obtained on 11 November 2022 and the sealed order extracted on 21 November 2022. It was presented for registration on 23 November 2022 at the relevant land office.

[3] On 30 November 2022, the PO was served on the Respondent (KAJ).

[4] On 6 December 2022, KAJ applied to set aside the PO, which was dismissed by the Deputy Registrar (DR) on 21 January 2023. On 10 March 2023, KAJ's appeal to the Judge in Chambers was allowed.

[5] The appeal by Sinohydro was allowed by this Court and we now give our reasons.

Parties

[6] Sinohydro is the contractor for works under the Melaka Gateway Project (Project). KAJ is the master planner and developer of the Project.

The Works

[7] By letter of award dated 6 June 2017 (LOA), KAJ awarded to Sinohydro the contract known as "Design and Build Contract for the Reclamation and Related Works for (Part of) 609 acres of land at the Melaka Gateway Project, Melaka" (the Works). The Works comprised reclamation and related works to construct three islands in relation to section PME1, PME2 and PP.

[8] By an amendment letter dated 8 February 2018 and Security Agreement also dated 8 February 2018, it was agreed that KAJ would create and perfect legal land charges over 9 parcels of land in PME1 in favour of Sinohydro as security for payment for Stage 1 (secured land). These were to be done by 8 October 2018, failing which Sinohydro had the option to suspend the Works or terminate the contract.

[9] The land charges were not created and perfected and coupled with what Sinohydro said was KAJ's failure to pay, it suspended the Works in October 2018.

[10] In March 2019, KAJ terminated the contract.

2019 Originating Summons (OS)

[11] In June 2019, KAJ filed its 2019 OS against Sinohydro and Companies Commission Malaysia for a declaration that the Statement of Particulars (Form 34) dated 8 February 2018 was misleading, incorrect and/or erroneous. Sinohydro filed a counterclaim that it had a valid equitable charge over the 9 parcels of land and for a rectification of the Statement. On 4 December 2020, KAJ's claim was dismissed and Sinohydro's counterclaim was allowed.

Proceedings Under Construction Industry Payment And Adjudication Act 2012 (CIPAA)

[12] On 16 August 2019, Sinohydro commenced adjudication proceedings under CIPAA against KAJ premised on certified and uncertified payments. By Adjudication Decision dated 21 October 2020 and amended 4 November 2020 (Adjudication Decision), it was determined that KAJ shall pay Sinohydro the amount of RM205,805,673.05, interest and costs (Adjudicated Sum).

[13] KAJ filed its applications to set aside and stay the Adjudication Decision while Sinohydro filed an application to enforce. On 16 April 2021, the setting aside and stay were dismissed and the enforcement allowed.

Winding Up Against KAJ

[14] On 24 February 2022, Sinohydro filed a winding up petition against KAJ on grounds o