BANK UTAMA (MALAYSIA) BHD & ANOR. V. KABULI SDN BHD (COMPANY NO. 147038-U)

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:

6. Section 43 of the Special Relief Act 1950 provides that:-

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