1. ) TAN SRI DATO PHENG YIN HUAH 2. ) DATO PHENG CHIN KIAT v 1. ) LOK PENG CHUAN (Disaman dalam kapasiti sebagai Penerima dan Pengurus Mentakab Star Mall Sdn Bhd (Dalam Penerimaan)) 2. ) JASMIN BEGUM BINTI JAFFAR KHAN (Disaman dalam kapasiti sebagai Penerima dan Pengurus Mentakab Star Mall Sdn Bhd (Dalam Penerimaan)) 3. ) UNITED OVERSEAS BANK (MALAYSIA) BHD 4. ) MENTAKAB MALL SDN BHD (Dahulunya dikenali sebagai TYS Land & Development Sdn Bhd)
Catchwords
The Plaintiffs were directors and shareholders of Mentakab Star Mall Sdn Bhd (“MSMSB”) and personal guarantors of banking facilities granted by United Overseas Bank (Malaysia) Bhd (“UOB”). MSMSB defaulted, and receivers and managers were appointed pursuant to a debenture securing a commercial property known as Mentakab Star Mall (“the Mall”). After several failed attempts to dispose of the Mall, the receivers entered into a Sale and Purchase Agreement with the 4th Defendant for RM33 million. Contending that the sale price was grossly undervalued compared with earlier valuations, the Plaintiffs commenced proceedings seeking, inter alia, to restrain completion of the sale pending trial. An ex-parte ad-interim injunction was initially granted. The receivers and the purchaser applied to set aside the injunction. The Plaintiffs argued that there were serious issues to be tried regarding breach of duty by the receivers, that damages were inadequate, that the balance of convenience favoured maintaining the status quo, and that they could provide an undertaking as to damages. The Defendants contended that the receivers acted within their contractual powers, that the Plaintiffs lacked locus standi, that any loss was purely monetary, that the transaction was substantially completed, and that the Plaintiffs had failed to make full and frank disclosure of material facts, including prior proceedings involving the same subject matter. Held, dismissing the application for interim injunction and setting aside the ex-parte and ad-interim orders, with costs: (1) The Plaintiffs failed to establish any bona fide serious issue to be tried. Clause 11.4.4 of the debenture conferred absolute discretion on the receivers to deal with and dispose of the charged asset. The evidence showed multiple prior unsuccessful sale attempts and that the RM33 million price reflected the highest offer available and aligned with a contemporaneous valuation. (2) The Plaintiffs’ alleged loss was purely financial and quantifiable. The Statement of Claim itself pleaded damages based on the alleged difference between market value and sale price, amounting to an admission that damages were an adequate remedy. Accordingly, the second limb of the American Cyanamid test was not satisfied. (3) The balance of convenience favoured the Defendants. The SPA had been completed, substantial consideration paid, possession delivered, and commercial and financing arrangements put in place. Granting an injunction would disrupt a concluded commercial transaction and cause significant prejudice to an innocent purchaser, whereas the Plaintiffs’ prejudice was limited to a monetary claim. (4) The Plaintiffs’ undertaking as to damages was insufficient and unenforceable. Given their substantial indebtedness and the encumbered value of the assets offered as security, the Plaintiffs failed to demonstrate the means to honour their undertaking, especially in light of the potentially extensive losses to the Defendants if restrained. (5) The Plaintiffs breached their duty of full and frank disclosure under Order 29 r 1(2A) of the Rules of Court 2012 by failing to disclose prior litigation concerning the same property and allegations against the receiver. Such material non-disclosure was of itself fatal and justified setting aside the ex-parte and ad-interim injunctions.
Practice Areas
The Plaintiffs were directors and shareholders of Mentakab Star Mall Sdn Bhd (“MSMSB”) and personal guarantors of banking facilities granted by United Overseas Bank (Malaysia) Bhd (“UOB”). MSMSB defaulted, and receivers and managers were appointed pursuant to a debenture securing a commercial property known as Mentakab Star Mall (“the Mall”). After several failed attempts to dispose of the Mall, the receivers entered into a Sale and Purchase Agreement with the 4th Defendant for RM33 million. Contending that the sale price was grossly undervalued compared with earlier valuations, the Plaintiffs commenced proceedings seeking, inter alia, to restrain completion of the sale pending trial. An ex-parte ad-interim injunction was initially granted. The receivers and the purchaser applied to set aside the injunction. The Plaintiffs argued that there were serious issues to be tried regarding breach of duty by the receivers, that damages were inadequate, that the balance of convenience favoured maintaining the status quo, and that they could provide an undertaking as to damages. The Defendants contended that the receivers acted within their contractual powers, that the Plaintiffs lacked locus standi, that any loss was purely monetary, that the transaction was substantially completed, and that the Plaintiffs had failed to make full and frank disclosure of material facts, including prior proceedings involving the same subject matter. Held, dismissing the application for interim injunction and setting aside the ex-parte and ad-interim orders, with costs: (1) The Plaintiffs failed to establish any bona fide serious issue to be tried. Clause 11.4.4 of the debenture conferred absolute discretion on the receivers to deal with and dispose of the charged asset. The evidence showed multiple prior unsuccessful sale attempts and that the RM33 million price reflected the highest offer available and aligned with a contemporaneous valuation. (2) The Plaintiffs’ alleged loss was purely financial and quantifiable. The Statement of Claim itself pleaded damages based on the alleged difference between market value and sale price, amounting to an admission that damages were an adequate remedy. Accordingly, the second limb of the American Cyanamid test was not satisfied. (3) The balance of convenience favoured the Defendants. The SPA had been completed, substantial consideration paid, possession delivered, and commercial and financing arrangements put in place. Granting an injunction would disrupt a concluded commercial transaction and cause significant prejudice to an innocent purchaser, whereas the Plaintiffs’ prejudice was limited to a monetary claim. (4) The Plaintiffs’ undertaking as to damages was insufficient and unenforceable. Given their substantial indebtedness and the encumbered value of the assets offered as security, the Plaintiffs failed to demonstrate the means to honour their undertaking, especially in light of the potentially extensive losses to the Defendants if restrained. (5) The Plaintiffs breached their duty of full and frank disclosure under Order 29 r 1(2A) of the Rules of Court 2012 by failing to disclose prior litigation concerning the same property and allegations against the receiver. Such material non-disclosure was of itself fatal and justified setting aside the ex-parte and ad-interim injunctions.
Judges (1)
Case Significance
1. ) TAN SRI DATO PHENG YIN HUAH 2. ) DATO PHENG CHIN KIAT v 1. ) LOK PENG CH... is a High Court (Mahkamah Tinggi) decision dated November 30, 2025 (citation: cb-22ncc-8-09-2025). The case was decided by Kuldeep Kumar a/l Jamna Dass.
Key issues: Held, dismissing the application for interim injunction and setting aside the ex-parte and ad-interim orders, with costs:.
What was the outcome of 1. ) TAN SRI DATO PHENG YIN HUAH 2. ) DATO PHENG CHIN KIAT v 1. ) LOK PENG CH...?
1. ) TAN SRI DATO PHENG YIN HUAH 2. ) DATO PHENG CHIN KIAT v 1. ) LOK PENG CH... is a High Court decision dated November 30, 2025. The case was heard by Kuldeep Kumar a/l Jamna Dass. See the full judgment for details.