PIUS LEE FU MIN vs RHB BANK BERHAD (MJLR2009a30) Clement Skinner,SS
[BPK.29-522-2006-II]
-1-
5 MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK
AT KOTA KINABALU
BANKRUPTCY PETITION NO.: K29-522 OF 2006-II
10 Re: PIUS LEE FU MIN
(NRIC No.: 560312-12-5263/h0016635)
Now or late of Labuan House
Lot No. 27, Jalan Kolam, Luyang
88300, Kota Kinabalu Appellant /
15 SABAH Judgment Debtor
Ex-Parte: RHB BANK BERHAD (6171-M)
Loan Recovery East
2nd Floor, 256, Jalan Padungan
20 93100, Kuching Respondent /
SARAWAK Judgment Creditor
BEFORE THE HONOURABLE JUSTICE
25 DATUK CLEMENT SKINNER IN CHAMBERS
GROUNDS OF DECISION
I had earlier dismissed the Judgment Debtor’s appeal against
30 the decision of the learned Senior Assistant Registrar, dismissing the
Judgment Debtor’s application to set aside a Bankruptcy Petition
against him. These are my grounds for doing so.
[BPK.29-522-2006-II]
-2-
RHB Bank Berhad (‘the Bank’) had granted banking 5 facilities to
a company called Suniwang Holdings Sdn. Bhd. (‘the principal
borrower’) who is now in liquidation.
The Judgment Debtor was one of two persons who stood as
10 guarantor to the banking facilities granted to the principal borrower.
The banking facilities were further secured by landed properties
that were charged by their registered owners in favour of the Bank.
Thus, Balmoral Holdings Sdn. Bhd. (‘Balmoral’) charged 247 parcels
15 of land at Kg. Batu Manikar, Labuan (the ‘Batu Manikar lands’) and
Syarikat Tanah Lawas Sdn. Bhd. charged P.L.20629173 (the ‘Tanah
Lawas land’).
The Creditor’s Petition which is dated 2007 estimated the value
20 of the Batu Manikar lands as RM8.73 million while the Tanah Lawas
land is estimated at RM23 million.
The Bank had earlier on obtained a “Consent Judgment” on
15.03.2004 against the Judgment Debtor which is the basis upon
25 which this Creditor’s Petition is founded. The judgment was for
RM59,373,412.37 together with interest thereon at the rate of 3.50%
per annum above the Bank’s base lending rate with monthly rests
commencing from 01.04.2000 to date of full settlement. It was also a
term of the Consent Judgment that the Bank shall not enforce the
30 judgment against the Judgment Debtor:
[BPK.29-522-2006-II]
-3-
(1) Until after the disposal of the lands charged 5 by Balmoral
and Tanah Lawas Sdn. Bhd. pursuant to the provisions of
the Sabah Land Ordinance;
OR
(2) Until after expiry of the period of two (2) years
10 commencing from the date of the judgment (which was on
15.03.20004).
It is the Judgment Debtor’s case that the Bank has conducted
itself unconscionably and in an oppressive manner towards him.
15 According to the Judgment Debtor, this Creditor’s Petition is
presented in bad faith as the Bank has not fulfilled its part of the
agreement under the Consent Judgment. In support of what he says,
the Judgment Debtor relies on the fact that in the letter of guarantee,
Clause 7 thereof states, inter alia, that the Bank “………. may enforce
20 this Guarantee for the payment of the ultimate balance after resorting
to other means of payment ……….”.
Accordingly, the Judgment Debtor contends that it was a
contractual term between the Bank and him that the Bank must
25 auction off the charged lands before it is able to proceed with the
Creditor’s Petition against him. I do not agree. In the first place, in
determining the contractual obligations between the parties, it would
be wrong to read a part only of a whole clause and ignore what is
stated in the rest of the clause. Further, other clauses in the
30 guarantee must also be read to determine the obligations of the
parties.
[BPK.29-522-2006-II]
-4-
The whole 5 of Clause 7 reads:
“7. You are to be at liberty but not bound to resort
for your own benefit to any other means of
payment at any time and in what order as you
think fit without in consequence diminishing
10 my/our liability to you hereunder and you may
enforce this guarantee for the payment of the
ultimate balance after resorting to other means
of payment or for the balance due at anytime
notwithstanding that other means of payment
15 have not been resorted to and in the later case,
without entitling me/us to any benefit from such
other means of payment so long as any sum
liability or obligation remains due or owing or
payable or outstanding (whether actual
20 contingent) from the customer to you”.;
And Clause 18 further states:
“18. You are at liberty but not bound to resort for
your benefit to any other means of obtaining
25 payment or securing performance at any time
and in any manner or order as you may deem
fit without affecting the security evidenced by
this Guarantee. You may exercise and enforce
your rights under the Guarantee either before
30 resorting to other means of obtaining payment
or securing performance or after such means
have been resorted to in respect of any
balance due or outstanding liabilities or
obligations and in the later case without
35 entitling me/us to any benefit from such other
means so long as any sum liability or obligation
remains due or owing or payable or
outstanding (whether actual or contingent) from
the customer to you”.;
40
A reading of these two clauses shows that contractually, the Bank
was clearly not obliged to sell off the charged lands first before
enforcing its rights under the Guarantee as the Judgment Debtor
45 alleges. In particular, these two clauses expressly state that the Bank
[BPK.29-522-2006-II]
-5-
may enforce its rights under the guarantee even before 5 resorting to
other means of obtaining payment.
In the second place, the Bank is no longer enforcing its rights
under the guarantee when it brings this Creditor’s Petition. The Bank
10 had already relied on the guarantee when it sued the Judgment
Debtor and obtained the Consent Judgment against him. What the
Bank is now relying on is the Consent Judgment to bring bankruptcy
proceedings against the Judgment Debtor. Relying on the Consent
Judgment the Bank says it is a Judgment Creditor who is entitled to
15 present this petition against the Judgment Debtor. I can see no legal
impediment to the Bank doing so.
The Judgment Debtor next says that the Bank has acted
unconscionably as it has not made any genuine effort to sell off the
20 charged lands as it had agreed to do in the Consent Judgment. The
Judgment Debtor alleges that instead the Bank was content to try to
sell off the Batu Manikar lands only on two occasions but not the
Tanah Lawas land and let the 2 years go by before filing this
Creditor’s Petition to put undue pressure on him to pay which is
25 oppressive conduct on the part of the Bank. The Judgment Debtor
says the Bank should hold off bankruptcy proceedings until it has sold
off the charged lands since they are of substantial value and it is only
after they are sold that it can be ascertained whether the debt
remaining due exceeds RM30,000.00 so as to entitle the Bank to
30 bring bankruptcy proceedings against him under s. 5(1)(a) of the
Bankruptcy Act 1967. I do not agree with these arguments.
[BPK.29-522-2006-II]
-6-
The judgment which the Bank obtained against 5 the Judgment
Debtor was not an ordinary judgment. It was a “Consent Judgment”
and it was on terms which the Judgment Debtor had agreed to. In
the light of the fact that the Judgment Debtor had himself agreed that
the Bank only had to await the earlier of two events before enforcing
10 its judgment, namely, the sale of the charged lands or the expiry of
2 years from the date of judgment, it does not lie in the month of the
Judgment Debtor to complain that the Bank had only acted halfheartedly
in selling off the charged lands. The Judgment Debtor
clearly knew that under the terms of the Consent Judgment the Bank
15 only needed to wait 2 years before it could enforce its judgment.
Further, it cannot be said that the Bank had acted half-heartedly
only. Here, the Bank had twice tried to auction off the Batu Manikar
lands after the Consent Judgment was obtained.
20
The Bank cannot be accused of oppressive conduct or of
presenting this Creditor’s Petition in bad faith when it has abided by
the terms of the Consent Judgment.
25
DATUK CLEMENT SKINNER
30 Judge
Date : 2009
[BPK.29-522-2006-II]
-7-
5 Counsel
For Judgment Debtor : Ms. Catherine Chau Siew Ping
Messrs. J. Ambrose & Partners
10 Advocates & Solicitors
KOTA KINABALU
For Judgment Creditor : Ms. Marina Yong Fui Len
Messrs. Yong & Chia
15 Advocates & Solicitors
KOTA KINABALU
-1-
5 MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK
AT KOTA KINABALU
BANKRUPTCY PETITION NO.: K29-522 OF 2006-II
10 Re: PIUS LEE FU MIN
(NRIC No.: 560312-12-5263/h0016635)
Now or late of Labuan House
Lot No. 27, Jalan Kolam, Luyang
88300, Kota Kinabalu Appellant /
15 SABAH Judgment Debtor
Ex-Parte: RHB BANK BERHAD (6171-M)
Loan Recovery East
2nd Floor, 256, Jalan Padungan
20 93100, Kuching Respondent /
SARAWAK Judgment Creditor
BEFORE THE HONOURABLE JUSTICE
25 DATUK CLEMENT SKINNER IN CHAMBERS
GROUNDS OF DECISION
I had earlier dismissed the Judgment Debtor’s appeal against
30 the decision of the learned Senior Assistant Registrar, dismissing the
Judgment Debtor’s application to set aside a Bankruptcy Petition
against him. These are my grounds for doing so.
[BPK.29-522-2006-II]
-2-
RHB Bank Berhad (‘the Bank’) had granted banking 5 facilities to
a company called Suniwang Holdings Sdn. Bhd. (‘the principal
borrower’) who is now in liquidation.
The Judgment Debtor was one of two persons who stood as
10 guarantor to the banking facilities granted to the principal borrower.
The banking facilities were further secured by landed properties
that were charged by their registered owners in favour of the Bank.
Thus, Balmoral Holdings Sdn. Bhd. (‘Balmoral’) charged 247 parcels
15 of land at Kg. Batu Manikar, Labuan (the ‘Batu Manikar lands’) and
Syarikat Tanah Lawas Sdn. Bhd. charged P.L.20629173 (the ‘Tanah
Lawas land’).
The Creditor’s Petition which is dated 2007 estimated the value
20 of the Batu Manikar lands as RM8.73 million while the Tanah Lawas
land is estimated at RM23 million.
The Bank had earlier on obtained a “Consent Judgment” on
15.03.2004 against the Judgment Debtor which is the basis upon
25 which this Creditor’s Petition is founded. The judgment was for
RM59,373,412.37 together with interest thereon at the rate of 3.50%
per annum above the Bank’s base lending rate with monthly rests
commencing from 01.04.2000 to date of full settlement. It was also a
term of the Consent Judgment that the Bank shall not enforce the
30 judgment against the Judgment Debtor:
[BPK.29-522-2006-II]
-3-
(1) Until after the disposal of the lands charged 5 by Balmoral
and Tanah Lawas Sdn. Bhd. pursuant to the provisions of
the Sabah Land Ordinance;
OR
(2) Until after expiry of the period of two (2) years
10 commencing from the date of the judgment (which was on
15.03.20004).
It is the Judgment Debtor’s case that the Bank has conducted
itself unconscionably and in an oppressive manner towards him.
15 According to the Judgment Debtor, this Creditor’s Petition is
presented in bad faith as the Bank has not fulfilled its part of the
agreement under the Consent Judgment. In support of what he says,
the Judgment Debtor relies on the fact that in the letter of guarantee,
Clause 7 thereof states, inter alia, that the Bank “………. may enforce
20 this Guarantee for the payment of the ultimate balance after resorting
to other means of payment ……….”.
Accordingly, the Judgment Debtor contends that it was a
contractual term between the Bank and him that the Bank must
25 auction off the charged lands before it is able to proceed with the
Creditor’s Petition against him. I do not agree. In the first place, in
determining the contractual obligations between the parties, it would
be wrong to read a part only of a whole clause and ignore what is
stated in the rest of the clause. Further, other clauses in the
30 guarantee must also be read to determine the obligations of the
parties.
[BPK.29-522-2006-II]
-4-
The whole 5 of Clause 7 reads:
“7. You are to be at liberty but not bound to resort
for your own benefit to any other means of
payment at any time and in what order as you
think fit without in consequence diminishing
10 my/our liability to you hereunder and you may
enforce this guarantee for the payment of the
ultimate balance after resorting to other means
of payment or for the balance due at anytime
notwithstanding that other means of payment
15 have not been resorted to and in the later case,
without entitling me/us to any benefit from such
other means of payment so long as any sum
liability or obligation remains due or owing or
payable or outstanding (whether actual
20 contingent) from the customer to you”.;
And Clause 18 further states:
“18. You are at liberty but not bound to resort for
your benefit to any other means of obtaining
25 payment or securing performance at any time
and in any manner or order as you may deem
fit without affecting the security evidenced by
this Guarantee. You may exercise and enforce
your rights under the Guarantee either before
30 resorting to other means of obtaining payment
or securing performance or after such means
have been resorted to in respect of any
balance due or outstanding liabilities or
obligations and in the later case without
35 entitling me/us to any benefit from such other
means so long as any sum liability or obligation
remains due or owing or payable or
outstanding (whether actual or contingent) from
the customer to you”.;
40
A reading of these two clauses shows that contractually, the Bank
was clearly not obliged to sell off the charged lands first before
enforcing its rights under the Guarantee as the Judgment Debtor
45 alleges. In particular, these two clauses expressly state that the Bank
[BPK.29-522-2006-II]
-5-
may enforce its rights under the guarantee even before 5 resorting to
other means of obtaining payment.
In the second place, the Bank is no longer enforcing its rights
under the guarantee when it brings this Creditor’s Petition. The Bank
10 had already relied on the guarantee when it sued the Judgment
Debtor and obtained the Consent Judgment against him. What the
Bank is now relying on is the Consent Judgment to bring bankruptcy
proceedings against the Judgment Debtor. Relying on the Consent
Judgment the Bank says it is a Judgment Creditor who is entitled to
15 present this petition against the Judgment Debtor. I can see no legal
impediment to the Bank doing so.
The Judgment Debtor next says that the Bank has acted
unconscionably as it has not made any genuine effort to sell off the
20 charged lands as it had agreed to do in the Consent Judgment. The
Judgment Debtor alleges that instead the Bank was content to try to
sell off the Batu Manikar lands only on two occasions but not the
Tanah Lawas land and let the 2 years go by before filing this
Creditor’s Petition to put undue pressure on him to pay which is
25 oppressive conduct on the part of the Bank. The Judgment Debtor
says the Bank should hold off bankruptcy proceedings until it has sold
off the charged lands since they are of substantial value and it is only
after they are sold that it can be ascertained whether the debt
remaining due exceeds RM30,000.00 so as to entitle the Bank to
30 bring bankruptcy proceedings against him under s. 5(1)(a) of the
Bankruptcy Act 1967. I do not agree with these arguments.
[BPK.29-522-2006-II]
-6-
The judgment which the Bank obtained against 5 the Judgment
Debtor was not an ordinary judgment. It was a “Consent Judgment”
and it was on terms which the Judgment Debtor had agreed to. In
the light of the fact that the Judgment Debtor had himself agreed that
the Bank only had to await the earlier of two events before enforcing
10 its judgment, namely, the sale of the charged lands or the expiry of
2 years from the date of judgment, it does not lie in the month of the
Judgment Debtor to complain that the Bank had only acted halfheartedly
in selling off the charged lands. The Judgment Debtor
clearly knew that under the terms of the Consent Judgment the Bank
15 only needed to wait 2 years before it could enforce its judgment.
Further, it cannot be said that the Bank had acted half-heartedly
only. Here, the Bank had twice tried to auction off the Batu Manikar
lands after the Consent Judgment was obtained.
20
The Bank cannot be accused of oppressive conduct or of
presenting this Creditor’s Petition in bad faith when it has abided by
the terms of the Consent Judgment.
25
DATUK CLEMENT SKINNER
30 Judge
Date : 2009
[BPK.29-522-2006-II]
-7-
5 Counsel
For Judgment Debtor : Ms. Catherine Chau Siew Ping
Messrs. J. Ambrose & Partners
10 Advocates & Solicitors
KOTA KINABALU
For Judgment Creditor : Ms. Marina Yong Fui Len
Messrs. Yong & Chia
15 Advocates & Solicitors
KOTA KINABALU
