Azimah binti Omar JC:

(SUPPLEMENTARY GROUNDS OF JUDGMENT ON COSTS)

[1]This Court has been urged by the counsel for the Defendants to award costs on the following basis:-

(i)Party and party costs as between the 1^st Plaintiff and the Defendants;

(ii)Costs on an indemnity basis as between the 2^nd Plaintiff and the 1^st Defendant; and

(iii)Party and party costs as between the 2^nd Plaintiff and 2^nd Defendant.

[2]However, it was submitted by the Defendants that if this Court is minded to award the costs between the 2^nd Plaintiff and the 1^st Defendant as per basis (ii) namely by awarding costs to the 1^st Defendant on an indemnity basis then it would negate an extensive consideration of the party and party costs as between the Plaintiffs and the 2^nd Defendant and also the 1^st Plaintiff and the Defendants.

[3]It was also submitted on behalf of the Defendants that the nature of the Plaintiffs’ claim and their conduct in respect of the trial of the action warranted the granting of costs on an indemnity basis as between the Plaintiff and the Defendants.

2^nd Plaintiff is contractually obligated to pay the 1^st Defendant’s legal costs and expense on an indemnity basis

[4]It was contended by the Defendants that the 2^nd Plaintiff is contractually obligated to pay the costs of the 1^st Defendant on an indemnity basis by virtue of the Charge Annexure. The Defendants contended that the execution of Charge instrument in favour of the 1^st Defendant vide Form 16A Charge dated 21 November 2005 (Presentation No. 92377/05) (“Charge”) and the Annexure to Form 16A Charge dated 28 November 2005 (Presentation No. 92377/05) (“Annexure”) creates and governs the legal and contractual relationship between the 2^nd Plaintiff and the 1^st Defendant. Thus, it is the submission of the Defendants that 2^nd Plaintiff’s legal and contractual obligation are spelt out within perimeter and boundary of the Charge Annexure. On this contention, the Defendants sought reliance on two cases, namely;

i.V Letchumanan v. Central Malaysian Finance Bhd.

The Federal Court held that the contents of the Charge consisting of the statutory form and the annexure, read as a whole, set out the actual agreement between the parties.

ii.Standard Chartered Bank Malaysia Bhd. v. Tunku Mudzaffar bin Tunku Mustapha

Mohd Hishamudin J explicitly stated that, “a Charge Annexure is part of the charge instrument” and held that as long as the clauses in the annexure are in line with the National Land Code, it would be enforceable between both parties.

[5]In support of its entitlement for costs on an indemnity basis from the 2^nd Plaintiff, the Defendants have placed reliance on section 12.28 of the Annexure. Section 12.28 of the Annexure reads as follows:

“SECTION 12.28 INDEMNITY

(a)The Chargor shall nor do or omit or suffer to be done any act, matter or thing in or respecting the Said Land which contravenes the provisions of this Charge or any Act, Ordinance, Enactment, Order, rule, regulation or by-law now or hereafter affecting the same and the Chargor shall at all times (hereafter indemnify and keep indemnified the Lender against all losses, actions, proceedings, costs, expenses, claims and demands in respect of any such act, matter or thing done or omitted to be done in contravention of the said provisions.

(b)In addition and without prejudice to the power, rights and remedies conferred on the Lender herein, the Chargor shall indemnify the Lender against any loss or expense (including but not limited to legal expense on a solicitor and own client basis) which the Lender may sustain or incur as a consequence of any default in payment by the Chargor of any sum due hereunder including (but not limited to) any interest or fees paid or payable on account of or in respect of any borrowed or deposit from third parties in order to maintain the amount in default or in liquidating or re-employing such funds or deposits.”

[6]It was argued by the Defendants that section 12.28 of the Annexure has explicitly and unequivocally provi