BANK UTAMA (MALAYSIA) BHD & ANOR. V. KABULI SDN BHD (COMPANY
HIGH COURT [KUCHING]
17 MARCH 2000
IN THE HIGH COURT IN SABAH AND SARAWAK,KUCHING
ORIGINATING SUMMONS NO. 24-233-98-II
BANK UTAMA (MALAYSIA) BHD
ARAB-MALAYSIAN MERCHANT BANK BHD 2ND PLAINTIFF
KABULI SDN BHD (COMPANY NO. 147038-U)
BEFORE THE HONOURABLE JUSTICE DATUK
HJ. MUHAMMAD KAMIL BIN AWANG
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.
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
"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