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2025 MarsdenLR 3641
HIGH COURT MALAYA KUALA LUMPUR
GRAND DYNAMIC BUILDERS SDN BHD – Appellant
Versus
PARADISE CITY SDN BHD – Respondent
[Suit No: WA-22NCVC-573-08/2024]
The court ruled that an interim injunction for property preservation requires a valid cause of action and that failure to obtain necessary consents invalidates contractual agreements, affecting enforceability.
Headnote:(A) Rules of Court 2012 - Order 29 r 2(1), Order 92 r 4 - Court of Judicature Act 1964 - Section 25 - Specific Reliefs Act 1950 - National Land Code 1965 - Sections 256, 268, 268A - Application for interim preservation of property; Plaintiff seeks to prevent the Defendant from dealing with the Land pending final disposal. (Paras 1-3)
(B) Interlocutory Injunction; Tests for interim preservation include: (a) serious questions to be tried; (b) inadequacy of damages as a remedy; (c) balance of convenience (Paras 28-30).
Facts of the case:
The Plaintiff, main contractor, sought an interim order preventing the Defendant from dealing with the land charged for payment defaults by DCSB. MBB obtained an order for sale of the land, spurring the Plaintiff’s claim for preservation of surplus sales proceeds. (Paras 4-11)
Findings of Court:
No triable issues identified; the agreement between Plaintiff and Defendant was rendered unenforceable due to lack of consent from the first chargee. (Paras 38-48)
Issues: The court addressed the validity of the charge agreement and whether the Plaintiff had rights against the Defendant regarding preservation of land proceeds. (Paras 16-20)
Ratio Decidendi: The court found non-fulfillment of preconditions for the charge agreement invalidated the Plaintiff's claims and affirmed the necessity for consent from MBB as the first chargee. (Paras 39-45)
Result: Application dismissed with costs.
| Table of Content |
|---|
| 1. application for interim preservation of property. (Para 1 , 2 , 3) |
| 2. background facts of property dispute. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11) |
| 3. plaintiff's arguments for preservation. (Para 12 , 13 , 14 , 15 , 16) |
| 4. defendant's opposition to plaintiff's claims. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 5. legal standards for granting interim injunctions. (Para 28 , 29 , 30 , 31 , 32) |
| 6. analysis of adequacy of monetary compensation. (Para 33 , 34 , 35 , 36 , 37) |
| 7. consent requirement for charge validity. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45) |
| 8. court's reliance on prior case law. (Para 46 , 47 , 48 , 49 , 50 , 51) |
(Enclosure 8)
Introduction
[1] This is an application by the Plaintiff for an interim preservation of property (encl 8) pursuant to O 29 r 2(1) and/or O 92 r 4 of the Rules of Court 2012 ( ROC 2012) and/or s 25 read together Schedule 6 of the Court of Judicature Act 1964 and/or s 51(1) of the Specific Reliefs Act 1950 .
[2] The Plaintiff seeks the interim order to prevent the Defendant from dealing with the Defendant's land held under Grant 25711, Lot 240, s 63, Bandar Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur (Land) and any proceeds from its sale under ss 256, 268, and 268A of the National Land Code 1965 , as may be obtained by Malayan Banking Bhd (MBB), pending the final disposal of this action.
[3] The Plaintiff also seeks an order to deposit any proceeds from the sale into a joint interest-bearing account with the Defendant.
Brief Facts
[4] The Defendant is the registered proprietor of the Land while Damai City Sdn Bhd (DCSB) is a developer of a mixed commercial and residential property development known as 8 Conlay (Project) located at Jalan Conlay, Kuala Lumpur.
[5] The Plaintiff is the main contractor for the Project to carry out the building works for a contract sum of RM1,249,000,000.00 (Building Contract).
[6] The Plaintiff had carried out works on the Project in accordance with the Building Contract. However, by 26 July 2022, DCSB was behind on its payments to the Plaintiff which was payable after the issuance of the interim certificates for work already done.
[7] DCSB then, requested for additional time to pay the Plaintiff and by an agreement dated 5 August 2022 (05.08.2022 Agreement), the Plaintiff agreed to:
(a) extend the time for payment of the sums then due, totalling RM87,207,853.55, according to the schedule of payment stated in the 5 August 2022 Agreement; and
(b) continue to carry out the works for the Project subject to the terms of the 5 August 2022 Agreement.
[8] In consideration of this, DCSB, among others, agreed to the Plaintiff in the 5 August 2022 Agreement to procure the Defendant to grant a charge under the National Land Code 1965 in favour of the Plaintiff over the Land, second in priority after the registered charge in favour of MBB, as security for payment of all sums due and owing by DCSB to the Plaintiff.
[9] Thereafter, there was an annexure to the 5 August 2022 Agreement executed by the Defendant (Charge Annexure), where the Defendant agreed among others to charge the Land in favour of the Plaintiff by way of a second fixed charge under the National Land Code 1965 and to register the said charge in accordance with the terms of the 5 August 2022 Agreement, on or before 26 August 2022 and that the said charge would stand as security to the Plaintiff for all sums due by DCSB to the Plaintiff.
[10] Since the Land was charged to MBB, there is a requirement that MBB consent is to be obtained first, in order to register the second charge in favour of the Plaintiff. However, this does not happen.
[11] On 12 August 2024, MBB, as a registered chargee of the Land, obtained an order for sale of the Land pursuant to s 256 of the National Land Code 1965 in Kuala Lumpur Originating Summons No.: WA-24FC-859-06/2024 (Order for Sale).
Contention Of Parties
[12] The Plaintiff contended that they have the right to the surplus of the proc
