AFFIN BANK BERHAD v 1. ) IHAA CAPITAL SDN. BHD. (Dahulunya dikenali sebagai IHAA Holding Sdn. Bhd.) 2. ) LIM PHECK JOO 3. ) GREGORY AMOS YOON PENG SUM 4. ) WAN NASIR BIN WAN MUSTAPHA PENCELAH EVERSHINE IMPEX SDN BHD

Case Significance

Confirms that a proposed intervener must demonstrate a genuine, unremediable interest before being allowed to join a lender's debt-recovery proceedings and stay execution under Order 15 rule 6 of the Rules of Court 2012; a bare assertion of prejudice will not suffice.

This High Court decision at Kuala Lumpur, sitting in its commercial division, concerns a proposed intervener's attempt to enter a bank's debt-recovery proceedings and to obtain a stay of execution. The plaintiff bank had granted term loan facilities of RM15,750,000 to the first defendant to help finance the purchase of a detached factory and warehouse with an annexed office building, with the second to fourth defendants as guarantors and a first-party charge created over the property as security. The bank pursued recovery of the debt, seeking summary judgment under Order 14 of the Rules of Court 2012 against the borrower and guarantors. Into that dispute a company applied, as a proposed intervener, for leave to intervene in the proceedings and for a stay of execution.

The court examined whether the proposed intervener had shown a sufficient basis to be joined and to obtain a stay, having regard to the principles governing intervention under Order 15 rule 6 of the Rules of Court 2012 and the requirement that a party seeking to disturb the position demonstrate prejudice that cannot otherwise be remedied. It was not satisfied that the proposed intervener had established that the proceedings, or their enforcement, had caused it prejudice which could not be remedied, drawing on authority including Upmarket Development Sdn Bhd v Sriera Development Sdn Bhd. In the court's assessment the application did not meet the threshold for allowing a stranger to the loan and charge to intervene in the bank's recovery action or to hold up execution.

The court dismissed the proposed intervener's application and awarded costs of RM5,000 to the plaintiff bank. The judgment illustrates that a proposed intervener must demonstrate a genuine, unremediable interest before it will be allowed to join a lender's debt-recovery proceedings and stay execution, and that a bare assertion of prejudice will not suffice.