BAST INVESTMENT PTE. LTD. 1. ) MUSANG DURIANS FROZEN FOOD (M) SDN. BHD. 2. ) JOHN LEE SIEW NENG PENCELAH 1. ) Pemborong A & L Sdn. Bhd. 2. ) M Durians Fruits (China) Sdn. Bhd. 3. ) Maxvogue Sdn. Bhd.

WA-22NCC-38-01/2022 Kand. 221 26/04/2023 10:39:51 DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM NEGERI WILAYAH PERSEKUTUAN KUALA LUMPUR (BAHAGIAN DAGANG) GUAMAN NO. WA-22NCC-38-01/2022 ANTARA BAST INVESTMENT PTE LTD (No. Syarikat: 201722420-C) DAN 1. MUSANG DURIANS FROZEN FOOD (M) SDN BHD (No. Syarikat: 1180825-K) 2. JOHN LEE SIEW NENG (No. K/P: 651119-135623) DEFENDAN-DEFENDAN DAN 1. PEMBORONG A & L SDN BHD (No. Syarikat: 631775-U) 2. M DURIANS FRUITS (CHINA) SDN BHD (No. Syarikat: 1277471-T) 3. MAXVOGUE SDN BHD (No. Syarikat: 1144650-W) PENCELAH-PENCELAH 1 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal JUDGMENT A. Introduction [1] This judgment concerns four applications: a. In enclosure 37, an application by the plaintiff for a Mareva injunction Injunction and b. In enclosures 61, 63 and 65, applications by the 1st, 2nd and 3rd interveners respectively to intervene in these proceedings for the purpose of objecting to the Mareva Injunction Application (collectively, the [2] After hearing submissions of counsel, I allowed the Intervention Applications and dismissed the Mareva Injunction Application. These are the full grounds of my decision. B. Background Facts [3] The 1st defendant was incorporated in 2016, and carried on the business of trading in durian fruits and other related products. At the time of incorporation, the directors and shareholders of the 1st defendant were the 2nd defendant and Lim Kim Tai [4] By a subscription agreement dated 20 August 2017, the plaintiff subscribed to 50% of shares in the 1st defendant. The 2nd defendant held 40% of the shares in the 1st defendant, while LKT held 10% of the shares. 2 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal [5] The plaintiff, the defendants and LKT also entered into a relationship as shareholders of the 1st defendant. [6] Clause 10.1 of the SHA provides that in the event the 1st defendant requires additional funds for working capital, the plaintiff agreed to provide a loan up to a maximum of RM30,000,000 to the 1st defendant, which shall be available for three years from 1 November 2017. The clause further states that the loan is subject to inter alia the following conditions: a. The 2nd defendant is required to provide a personal guarantee for repayment of 50% of the outstanding loan amount; and b. The plaintiff is entitled to charge interest on the outstanding loan amount. [7] Between November 2017 to January 2019, the plaintiff provided additional funding of RM26,040,000 to the 1st defendant Between June to April 2020, the 1st defendant repaid RM11,950,000, leaving a principal balance of RM14,090,000. [8] The plaintiff is seeking the following: a. The outstanding principal loan and interest, totalling RM15,452,109.63 against the 1st defendant and 3 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal b. The guaranteed amount of 50% of the Outstanding Amount, totalling RM7,726,054.82 against the 2nd st [9] defendant who are nominees of the plaintiff have frustrated, hampered and constrained the 1st business. [10] The defendants filed a counterclaim seeking, amongst others, a declaration that the plaintiff had induced or caused a breach of the SHA, a declaration that the plaintiff is estopped from claiming the Outstanding Amount and the Guaranteed Amount, losses and damages. [11] In the course of proceedings, the plaintiff filed the Mareva Injunction Application, and sought to restrain the 1st defendant and the 2nd defendant respectively, from inter alia: a. withdrawing, causing or allowing to be withdrawn any money or credit balances from any account in the 1st or 2nd Malaysia; and b. removing, causing or allowing to be removed, or dissipating, disposing, charging or dealing with, or diminishing the value of the 1st or 2nd in Malaysia, up to the value of RM17,000,000 for each defendant. 4 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal [12] On 17 October 2022, the court granted an ad interim Mareva injunction which applied to accounts held by the 1st defendant, pending Ad Interim Mareva [13] Before the Mareva Injunction Application was heard on an inter- parte basis, the interveners filed the Intervention Applications, and sought to intervene in these proceedings, for the purpose of opposing the Mareva Injunction Application. C. Considerations and Findings The Intervention Applications [14] I proceeded to hear the Intervention Applications first. [15] The main ground for the Intervention Applications is the existence of garnishee orders that the interveners had obtained in September 2022 respect of the 1st with the [16] The background facts leading up to the interveners obtaining the Garnishee Orders are as follows: a. The interveners had provided services to the 1st defendant. 5 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal b. When the 1st defendant failed to pay for the services, the interveners commenced civil actions against the 1st defendant to recover the amounts outstanding. c. The 1st defendant did not enter appearance, and judgments in default of appearance were entered against the 1st defendant d. The interveners initiated garnishee proceedings against the Garnishee in respect of the Accounts, and obtained the Garnishee Orders. [17] In the midst of enforcing the Garnishee Orders, the interveners were served with the Ad Interim Mareva Order, which prevented outgoing transactions from the Accounts. [18] Thus, the interveners filed the Intervention Applications to intervene in these proceedings, only to the extent of opposing the Mareva Injunction Application. [19] The Intervention Applications are made pursuant to order 16 rule 6(2) of the Rules of Court which provides that: Subject to this rule, at any stage of the proceedings in any cause or matter, the Court may on such terms as it thinks just and either of its own motion or on application (a) 6 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) order any of the following persons to be added as a party, namely (i) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon; or (ii) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which, in the opinion of the Court, would be just and convenient to determine as between him and that party as well as between the parties to the cause or (emphasis added) [20] The Garnishee Orders were obtained in September 2022, prior to the filing of the Mareva Injunction Application in October 2022. The interveners had not been able to enforce the Garnishee Orders, as the Ad Interim from the Garnishee Orders are directly affected by the Ad Interim Mareva 7 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal Order, and ultimately by any orders that may be made pursuant to the Mareva Injunction Application. [21] These facts point me to the conclusion that the conditions set forth in order 15 rule 6(2)(b)(i) and (ii) of the ROC, for the interveners to be added as a party for the purpose of opposing the Mareva Injunction Application, have been met. I find it necessary for the interveners to be present at the hearing of the Mareva Injunction Application, so that all matters in dispute can be effectually and completely determined (order 16 rule 5(b)(i)). The status of the Garnishee Orders is also an issue that relates directly to the remedy sought by the plaintiff in the Mareva Injunction Application (order 16 rule 5(b)(ii)). [22] The plaintiff argued that the Intervention Applications are based purely on commercial and financial interests, arising from debts owed by the 1st defendant to the proposed interveners. [23] In Tohtonku Sdn Bhd v Superace (M) Sdn Bhd [1992] 2 MLJ 63, the Supreme Court held as follows: It is settled law, on the authorities, that a party may be added if his 'legal interests' will be affected by the judgment in the action but not if his commercial interests alone would be affected: per Lord Diplock in Pegang Mining Co Ltd v Choong Sam & Ors 1 at pp 55-56. In that case, the Privy Council had formulated the test to determine whether a party's interests in the matter are 'legal' or merely 'commercial' in the following words (at p 56): 8 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in this action? The answer to that question, as far as the interveners in this case are concerned, is definitely in the affirmative. We therefore hold that the learned trial judge was correct in his decision on this (emphasis added) [24] Thus, a party may be added to a suit if his legal interests will be affected by an order or judgment in the suit but not if his commercial interests alone would be affected. [25] commercial interests alone that would be affected by any orders given pursuant to the Mareva Injunction Application. The interests do not arise only as a result of the amounts due from the 1st defendant to the interveners, as argued by the plaintiff. The argument ignores the Garnishee Orders, which were granted pursuant to the Judgments. In my considered view, the Garnishee Orders give rise to a legal interest to intervene. [26] these proceedings is only limited to the right to object to the Mareva Injunction Application. The interveners are not concerned with these 9 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal proceedings as a whole, but only to the extent that their rights under the Garnishee Orders may be affected by any order made in the Mareva Injunction Application. The courts have in this regard allowed parties to intervene in proceedings, for specific limited purposes (see Metramac Corporation Sdn Bhd (formerly known as Syarikat Teratai KG Sdn Bhd) v Fawziah Holdings Sdn Bhd; Tan Sri Halim Saad & Che Abdul Daim Hj Zainuddin (interveners) [2007] 5 MLJ 501 and PCP Construction Sdn Bhd v Leap Modulation Sdn Bhd (Asian International Arbitration Centre, intervener) [2019] 4 MLJ 747). [27] With my finding that the legal rights would be affected by any order made pursuant to the Mareva Injunction Application, I allowed the Intervention Applications, with costs. The Mareva Injunction Application [28] The principles on the grant of a Mareva injunction are set out in S&F International Limited v Trans-Con Engineering Sdn Bhd [1985] 1 MLJ 62 and Creative Furnishing Sdn Bhd v Wong Koi [1989] 2 MLJ 153. The following conditions must be met for a Mareva injunction to be granted: a. the applicant must have a good arguable case against the respondent; b. the respondent must have assets within the jurisdiction; and 10 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal c. there is a real risk of the assets being dissipated or removed. [29] In assessing the first condition, namely whether the plaintiff has a good arguable case against the defendants, I found the decision in S&F International Limited (supra) to be instructive. The Federal Court referred to Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG KG [1984] 1 All ER 398, where it was held at page 404d that: adopt the test of a good arguable case, in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one which the judge believes to have a better than 50% chance of [30] The present case is a claim to recover amounts allegedly owed by the defendants to the plaintiff. The provision of the Loan is not in dispute. Neither is the fact that the 1st defendant had repaid part of the Loan. The defence is premised on the conduct of directors of the 1st defendant who are nominees of the plaintiff. The defendants claimed that these directors had frustrated, hampered and constrained the 1st business, thus inducing a breach of the SHA. [31] In my view, these facts give rise to a good arguable case that is more than barely capable of serious argument. Thus, the first condition for the grant of a Mareva injunction has been met by the plaintiff. 11 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal [32] The second condition, the existe within the jurisdiction, is not in dispute. The plaintiff has shown that the defendants have bank accounts and other assets within Malaysia, including furniture, equipment, vehicle and land. [33] However, I find the plaintiff failed to meet the final condition for the grant of a Mareva injunction, namely to show that there is a real risk of the assets being dissipated or removed. [34] which the 1st defendant allegedly owes to several companies, including Companies are companies in which the 2nd defendant is a director and/or majority shareholder. [35] The amount outstanding arose pursuant to services provided by the Related Companies to the 1st defendant. Suits were filed against the 1st defendant for the outstanding debts, and in the case of the interveners, the Judgments were obtained against the 1st defendant. The Garnishee Orders were subsequently granted pursuant to the Judgments. [36] The plaintiff referred to these suits filed for debts outstanding to the interveners and the commencement of the garnishee proceedings as a asset-stripping by the defendants. In other words, the plaintiff is alleging that the interveners are not bona fide creditors of the 1st defendant. 12 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal [37] the 1st defendant of its assets, to be improbable. [38] The plaintiff and its nominated directors in the 1st defendant had at all material times full knowledge of the interveners and the 2nd the SHA, where it is acknowledged that the 2nd defendant is a shareholder of the 3rd intervener, Maxvogue Sdn Bhd. Further, in an information deck presented to the board of directors of the 1st defendant on 20 November 2017, the services provided by the 1st intervener, Pemborong A & L Sdn Bhd and the 3rd intervener to the 1st defendant were discussed. The 2nd intervener, M Durian Fruits (China) Sdn Bhd, was incorporated in the course of the 1st business with the knowledge of the plaintiff. [39] I have also taken note that the plaintiff was duly notified by the defendants of demands received from the interveners for amounts outstanding by the 1st defendant. [40] The plaintiff did not raise any objections to the 2nd interests in the interveners. Neither did the plaintiff respond to the notification sent by the defendants of the demands received from the interveners. The conduct of the plaintiff points to the probability that the allegation of a scheme by the defendants to strip the 1st defendant of its assets is merely an afterthought, designed for the purpose of the Mareva Injunction Application. [41] Another argument put forward by the plaintiff is that the 2nd defendant had acted in bad faith and lacked probity in his actions, particularly in his relationships with the interveners, and this pointed to the 13 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal risk of dissipation of assets, on his part and also on the part of the 1st defendant. The relationship between the 2nd defendant and the interveners was within the knowledge of the plaintiff, as I had highlighted above. This vitiates the allegation of bad faith raised by the plaintiff. [42] Further and in any event, I am of the view that an allegation of bad faith in the conduct of the 2nd defendant does not in itself lead to the inevitable conclusion that there is a risk of dissipation of assets. There must be a link between the conduct of the 2nd defendant and the probability of assets being dissipated. This link has not been shown by the plaintiff. [43] Another important consideration is that the risk of dissipation of assets as alleged by the plaintiff arises as a result of the Judgments and the Garnishee Orders. There has been no challenge made on the status of the Judgments and the Garnishee Orders. They were regularly obtained, and are therefore binding and subsisting. [44] In Badiaddin bin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd [1998] 1 MLJ 393, Peh Swee Chin FCJ held at page 417G that: a judgment in the High Court has been perfected in the manner described in the above passage, a party to the judgment generally and subject to the same passage, or any other written law, and apart from any appeal, cannot reopen the matter finalized in the judgment by seeking to alter it or amend it for the court would be functus officio by virtue of the ratio of Hock Hua Bank v Sahari bin Murid. Once perfected, a judgment of the 14 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal High Court is also entitled to the obedience and respect from the parties to it on the basis of a command from a superior court of unlimited civil jurisdiction in the course of contentious litigation (see Issac v Robertson [1985] AC 97; Pembenaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd [1991] l MLJ 100; Puah Bee Hong & Anor v Pentadbir Tanah Daerah Wilayah Persekutuan Kuala Lumpur & Anor (Teo Keng Tuan Robert, Intervener) and another appeal [1994] 2 MLJ 601 long established that one can apply to set aside an order of a superior court only in direct proceedings filed for the very purpose of having it set aside on valid grounds, without doing so, one cannot attack its invalidity laterally by raising an objection to its invalidity in any other proceedings, without filing proceedings for applying to have it set aside first. When one wishes to file such proceedings to so set it aside, must do so within the same proceedings or action in which the same order was obtained and not in a separate fresh proceeding or new action on any ground other than those mentioned in the quoted passage from Hock Hua Bank v Sahari bin Murid, as mentioned later in this judgment in connection with a consent (emphasis added) [45] Applying Badiaddin (supra), I am of the view that as the Judgments and the Garnishee Orders have been perfected and finalised and are binding and subsisting, the issue of their validity cannot be re- opened in this court. The Mareva Injunction Application, if allowed, would 15 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal have the effect of invalidating the Judgment and the Garnishee Orders, as they would not be able to be executed. [46] Further, the courts have been clear on the stand that injunctions to restrain the execution of orders by another court of concurrent jurisdiction should not be allowed (see Jasa Keramat Sdn Bhd & anor v Monatech (M) Sdn Bhd [1999] 4 MLJ 637 and J & C New Poly Catering Sdn Bhd v TTMP Bakun Consortium Sdn Bhd (Malayan Banking Bhd, Garnishee & Anor) [2006] 1 MLJ 587). [47] Taking into account the totality of my findings as set out above, I find the balance of convenience lies against the grant of the Mareva injunction. D. Decision [48] In relation to the Intervention Applications, I found the proposed interveners have the legal right to intervene in these proceedings for the purpose of objecting to the Mareva Injunction Application. As such, I allowed the Intervention Applications, with costs. [49] With respect to the Mareva Injunction Application, I found the plaintiff had failed to prove a risk of dissipation of assets by the defendants. As such, I dismissed the Mareva Injunction Application, with costs. 16 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal Dated 27 March 2023 - sgd - Adlin Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiff : CK Lim (together with Damien Chan, Jeff Ng and Ian Hannibal) of Messrs. Damien Chan, Hannibal & Ng Chambers Defendants : Ragumaren Gopal (together with David Ragumaren) of Messrs. G. Ragumaren & Co Interveners : Kenneth Koh (together with Afiq Iskandar Aziz) of Messrs. Xavier & Koh Partnership 17 S/N kNsokOkdzEyccCD0rQuOQ **Note : Serial number will be used to verify the originality of this document via eFILING portal