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BANK UTAMA (MALAYSIA) BHD & ANOR. V.
KABULI SDN BHD (COMPANY NO. 147038-U)
HIGH COURT [KUCHING]
MUHAMMAD KAMIL AWANG, J
[ORIGINATING SUMMONS NO. 24-233-98-II]
17 MARCH 2000
MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK,KUCHING
ORIGINATING SUMMONS NO. 24-233-98-II
BETWEEN
BANK UTAMA (MALAYSIA) BHD 1ST PLAINTIFF ARAB-MALAYSIAN MERCHANT BANK BHD 2ND PLAINTIFF AND
KABULI SDN BHD (COMPANY NO. 147038-U) DEFENDANT BEFORE THE HONOURABLE JUSTICE DATUK HJ. MUHAMMAD
KAMIL BIN AWANG
IN CHAMBERS
JUDGMENT
1. The plaintiffs apply by Originating Summons (enclosure
6) under O. 30 r. 1 of the Rules of the High Court 1980, section 25(2) and
paragraph 6 of Schedule to Courts of Judicature Act 1964, and section 43 of
the Special Relief Act 1950, for the appointment of Receivers and Managers
to supervise the affairs and properties of the defendant on Lot 3218 Block
31 Kemena Land District, Bintulu (the said land). The application is
supported by the affidavit of Simon Hollis affirmed on 10th September, 1998.
The defendant has not filed an affidavit in reply or in opposition to the
application.
Facts
2. By a Bridging Loan Agreement dated 11th April, 1995
(Exhibit SH1) between the plaintiffs and the defendant a sum of RM30 million
was granted to the defendant, to finance the construction and completion of
Bintulu Beach Resort - condominium Phase I Project. For this purpose, the
defendant charged the said land to the plaintiffs, vide two Memorandum of
Charge - by way of collateral security, Instrument Nos. L1248/50 and
L1250/50 dated 13th April, 1995 (Exhibits SH1 and SH2) for a sum of RM20
million each, in favour of the defendant, by the 1st and 2nd plaintiff
respectively. It is not disputed that the defendant had defaulted, and the
plaintiffs as chargors had brought against the defendant an action under
section 148(2) of the Sarawak Land Code (Cap 81) for sale of the said land.
Pending the action, the plaintiffs brought this application.
3. The plaintiffs submitted that the court has a
discretion to grant this application as there is a pending action against
the defendant, and he cited in support the case of BANK OF COMMERCE v
TANJUNG PETRI ENTERPRISE (1992) 2 MLJ 322. According to the
supporting affidavit of Simon Hollis, the project has been started and
partially completed. About 135 units of condominiums have been sold to
various purchasers. Since 1996 the work on the project was halted due to
financial difficulties. The plaintiffs are keen to preserve the project and
would want to complete it for the benefit of all concerned, the plaintiffs
and the defendant as well as the purchasers. More importantly the
condominiums could be completed for the various purchasers. The said land
will be amalgamated with the adjoining lands, i.e. Lots 3629, 3630 and 2631.
4. The defendant submitted that the pending action is
brought under section 148(2) of the Sarawak Land Code (Cap 81), which
clearly states that in the event of a default, it is open to the plaintiffs
to purchase and sell the said land. Appointment of receivers/managers is
beyond the scope of the charge.
5. Section 25(2) read with paragraph 6 of the Schedule to
the Courts of Judicature Act 1964, empowers the court to:
"provide for the interim preservation of property the
subject-matter of any cause or matter by sale or by injunction or the
appointment of a receiver or the registration of a caveat or a lis pendens
or in any other manner whatsoever."
6. Section 43 of the Special Relief Act 1950 provides
that:-
"The appointment of a Receiver pending a suit is a
matter resting in the discretion of the court. The mode and effect of his
appointment, and his rights, powers, duties, and liabilities regulated by
the [law relating to civil procedure.]
7. The court may, on an application by the plaintiffs,
grant the appointment of receivers/managers. One of the powers sought for
the appointment of the receivers/managers is, inter alia, to carry out any
work in the condominium land and all the property of the defendant relating
to the condominium Project and to do all other things as may be necessary
for the realization of the condominium land.
8. The defendant has entered into agreements to sell 135
units of the condominium Project to purchasers. To this end the completion
thereof will therefore be beneficial to and of interest to all, the
defendant and the end purchasers.
9. The appointed receivers/managers, Chew Hoy Ping and
Kenneth Teh Ah Kiam are from Pricewaterhouse Coopers, who are certified
Public Accountants and who are willing and experienced to manage and revive
the abandoned projects or development projects.
10. The condominium Project if left unattended and
abandoned until after the determination of the action herein will suffer
further deterioration, and by this, means a saving in terms of costs for
security to prevent vandalism and destruction of the partially constructed
condominium towers on the said land.
11. On the above grounds, the court feels that in the
interest of the parties concerned, it ought to grant this application.
12. Costs of this application be on a solicitor and
client basis to be paid to the plaintiffs by the receivers/managers from the
assets of the defendant.
(DATUK HJ. MUHAMMAD KAMIL BIN AWANG) JUDGE
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