110 Current Law Journal [2024] 1 CLJ

TENAGA NASIONAL BHD v. TRANSFORMER REPAIRS A

& SERVICES SDN BHD & ORS
COURT OF APPEAL, PUTRAJAYA
VAZEER ALAM MYDIN MEERA JCA
GUNALAN MUNIANDY JCA
B
WONG KIAN KHEONG JCA
[CIVIL APPEAL NO: B-02(A)-1872-10-2021]
7 NOVEMBER 2023

Abstract – An execution creditor who has been informed that a movable

C
property in the possession of an execution debtor may belong in equity to
a third party should first inquire from the third party before seizing and
selling the movable property pursuant to a writ of seizure and sale. If
otherwise, such execution creditor may face adverse legal consequences if
the third party is able to prove its equitable ownership of the movable
D
property on a balance of probabilities. Such execution creditor cannot
lawfully seize and sell a movable property in the possession of an
execution debtor pursuant to a writ of seizure and sale issued by the court
when the movable property does not belong in equity to the execution
debtor.
E

CIVIL PROCEDURE: Execution – Seizure – Writ of seizure and sale – Movable

property in possession of execution debtor – Movable property belongs in equity to
third party – Movable property seized and sold by execution creditor pursuant to writ
of seizure and sale – Whether third party able to prove equitable ownership of
F
movable property on balance of probabilities – Whether execution creditor could
lawfully seize and sell movable property in possession of execution debtor when
movable property does not belong in equity to execution debtor
Zanwa Sdn Bhd (‘Zanwa’) owned a piece of land which was used as a factory
for its manufacturing and business operations. In 2011, the appellant G
(‘plaintiff’) awarded a contract to Zanwa whereby Zanwa would supply,
erect and commission two power transformers for the plaintiff at a price of
RM9.32 million. The two power transformers were supposed to be built by
Zanwa on the land and the plaintiff had paid a total sum of RM8,106,491.34
to Zanwa. Notwithstanding this payment, Zanwa had breached the contract
H
by not delivering the two power transformers to the plaintiff. The two power
transformers had been kept on the land. In 2017, there was a public auction
of the land and the land was sold to the second respondent (‘second
defendant’). The second defendant did not take any action regarding the two
power transformers on the land. The first respondent (‘first defendant’) had
been incorporated pursuant to a shareholders agreement concluded between I
Zanwa and Magnitude Power Sdn Bhd. The first defendant entered into a
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 111

A tenancy agreement with the second defendant and the first defendant allowed
Zanwa to continue its business operations on the land, including the
completion of the two power transformers for the plaintiff. Zanwa was later
wound up. Zanwa then informed the plaintiff that it had sold its factory to
a third party and was unable to continue the contract. The plaintiff was also
B requested to collect the two power transformers. The second defendant filed
a suit at the Sessions Court of Klang (‘Klang SC’) against the first defendant
regarding the first defendant’s breach of the tenancy agreement. The Klang
SC granted summary judgment in favour of the second defendant (‘second
defendant’s summary judgment’). The first defendant appealed to the Klang
C
High Court (‘Klang HC’) against the second defendant’s summary judgment.
Premised on the second defendant’s summary judgment, the defendant
applied to the Klang SC and obtained a writ of seizure and sale (‘WSS’). The
plaintiff still had not collected the two power transformers from the land.
The Klang SC bailiff seized all movable properties on the land including the
two power transformers, pursuant to the WSS. The first defendant filed an
D
application at the Shah Alam High Court to stay the execution of the second
defendant’s summary judgment and the WSS, pending the disposal of the first
defendant’s High Court appeal against the second defendant’s summary
judgment. The seized movable properties, including the two power
transformers, were sold by the bailiff at the judicial auction to the third
E respondent (‘third defendant’). The first defendant filed two applications in
the Klang SC for the following orders: (i) setting aside of the WSS and the
judicial auction; (ii) the return of the sale proceeds for the auction to the third
defendant; and (iii) the return of the seized movable properties, except the
two power transformers, to the first defendant. The two applications were
F allowed. As the first defendant’s appeal to the High Court was allowed, the
second defendant appealed against the said decision to the Court of Appeal.
The appeal was allowed and consequently, the second defendant’s summary
judgment was restored (except for a minor variation). For the purpose of this
appeal, the second defendant’s summary judgment was final and binding. The
G main issue in this appeal was whether an execution creditor could lawfully
seize and sell a movable property in the possession of an execution debtor,
pursuant to a WSS issued by the court, when the movable property did not
belong in equity to the execution debtor.
Held (allowing appeal)
H Per Wong Kian Kheong JCA delivering the judgment of the court:
(1) At the time of the bailiff’s seizure, the two power transformers were in
the possession of the first defendant. The High Court Judge (‘HCJ’) had
committed a plain error of fact in failing to decide that the plaintiff’s
equitable ownership over the two power transformers had been proven
I by the plaintiff on a balance of probabilities. This was based on the
following evidence and reasons: (i) the contract between the plaintiff and
112 Current Law Journal [2024] 1 CLJ

Zanwa; (ii) purchase orders had been issued by the plaintiff to Zanwa A
with regard to the two power transformers; (iii) Zanwa’s invoices to the
plaintiff in respect of the two power transformers; (iv) the plaintiff’s
internal memorandum which evinced the plaintiff’s payment;
(v) correspondence between the plaintiff and Zanwa regarding the two
power transformers where in Zanwa’s letter, Zanwa admitted that it B
could not complete the contract with the plaintiff. It was clear from
Zanwa’s admission that Zanwa had breached the contract with the
plaintiff; and (vi) Zanwa’s liquidator did not dispute Zanwa’s breach.
Nor was there a claim on the two power transformers by Zanwa’s
liquidator. The HCJ should have decided that the bailiff’s seizure and C
judicial auction of the two power transformers were invalid. (paras 55
& 58)
(2) Zanwa had initially concealed the following relevant facts from the
plaintiff: (i) the sale of the land to the second defendant by way of public
auction; (ii) the tenancy agreement between the first and second D
defendants; (iii) Zanwa’s winding up; and (iv) the judicial auction of the
two power transformers (‘Zanwa’s concealment’). In addition to
Zanwa’s concealment, it had also deceived the plaintiff. The first
defendant had also concealed the following relevant facts from the
plaintiff: (i) the tenancy agreement between the first and second E
defendants; (ii) the second defendant’s suit at the Klang SC; and (iii) the
second defendant’s summary judgment (‘first defendant’s concealment’).
The HCJ made a plain error of fact when His Lordship did not consider
the following pertinent matters: (i) due to Zanwa’s concealment,
Zanwa’s deception and the first defendant’s concealment, the plaintiff
F
could not have actual knowledge of all the relevant facts of this case;
(ii) there was no evidence to prove that the plaintiff was wilfully blind
to the relevant facts which were obvious; and (iii) the plaintiff was
entitled to insist that Zanwa performed all obligations under the contract
between the plaintiff and Zanwa, especially when the plaintiff’s payment
had already been made to Zanwa. The HCJ erred in law and fact by G
deciding that the amended originating summons was barred by laches,
acquiescence, waiver, estoppel and/or abandonment. (paras 62, 63, 65
& 67)
(3) The second defendant had been expressly informed of the plaintiff’s
H
equitable ownership of the two power transformers before the judicial
auction of the same. The second defendant did not, however, inquire
from the plaintiff regarding the ownership of the two power transformers
and worse still, the second defendant proceeded with the judicial
auction. Due to such inequitable conduct on the part of the second
defendant, the HCJ should not have applied the equitable estoppel I
doctrine in this case. (para 68)
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 113

A (4) Upon proof of the plaintiff’s equitable ownership of the two power
transformers, the HCJ should have made a restitution order under s. 9
of the Specific Relief Act 1950 (‘SRA’) ie, an order for the return of the
two power transformers to the plaintiff. Section 9 provides for a
statutory remedy. Accordingly, the plaintiff was not required to prove
B the plaintiff’s three causes of action as a condition precedent for the High
Court to make a restitution order. As the bailiff’s seizure and the judicial
auction concerning the two power transformers were invalid, (i) the
third defendant could not have obtained any legal or equitable
ownership of the two power transformers; and (ii) the restitution order
C
should have been made in this case notwithstanding the fact that the
third defendant was a bona fide purchaser of the two power transformers
for valuable consideration without any actual notice of the plaintiff’s
equitable ownership of the two power transformers. (paras 72-74)
(5) Premised on the appealable errors, this appeal was allowed with the
D following orders: (i) the Klang HC’s decision was set aside; (ii) the
amended OS was allowed where the following declarations and orders
were granted: (a) the plaintiff was the lawful and beneficial owner of the
two power transformers; (b) the bailiff’s seizure and judicial auction of
the two power transformers were invalid and void; (c) any interest in the
E
two power transformers obtained by the third defendant in the judicial
auction was unlawful and was hereby set aside; (d) an order for the
defendants to return the two power transformers to the plaintiff within
seven days from the date of this court’s order and the cost of this return
shall be borne solely by the plaintiff; (e) the money in the client’s
account of the second defendant’s solicitors, as trustees for the third
F
defendant’s payment of the sale proceeds for the judicial auction of the
two power transformers, shall be returned forthwith to the third
defendant; and (f) all court fees and commission paid by the third
defendant with regard to the judicial auction of the two power
transformers shall be refunded to the third defendant. (para 99)
G
Case(s) referred to:
Dato’ Seri Anwar Ibrahim v. PP [2010] 4 CLJ 265 FC (refd)
Development & Commercial Bank Bhd v. Lam Chuan Co & Anor [1989] 1 CLJ 192;
[1989] 1 CLJ (Rep) 489 HC (refd)
Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453 FC (refd)
H KTL Sdn Bhd & Anor v. Leong Oow Lai & Another Case [2014] 1 LNS 427 HC (refd)
Lilies Suraya Abdul Latib & Ors v. Khairul Sabri & Others [2019] 1 LNS 2099 HC (refd)
Lim Ker v. Chew Seok Tee [1967] 1 LNS 88 FC (refd)
Ling Tiew Hoe v. Public Finance Bhd [1997] 1 LNS 316 HC (refd)
Lok Kok Beng & Ors v. Loh Chiak Eong & Anor [2015] 7 CLJ 1008 FC (refd)
Malaysia Building Society Bhd v. Tan Sri General Ungku Nazaruddin Ungku Mohamed
I [1998] 2 CLJ 340 CA (refd)
MCC Proceeds Inc v. Lehman Bros [1998] 4 All ER 675 (refd)
114 Current Law Journal [2024] 1 CLJ

Muniandy Thamba Kaundan & Anor v. Development & Commercial Bank Berhad & Anor A
[1996] 2 CLJ 586 FC (refd)
Ng Boo Bee v. Khaw Joo Choe [1921] 1 LNS 8 (refd)
Pembangunan Maha Murni Sdn Bhd v. Jururus Ladang Sdn Bhd [1985] 1 LNS
122 SC (refd)
Tan Kim Khuan v. Tan Kee Kiat (M) Sdn Bhd [1998] 1 CLJ Supp 147 HC (refd)
Tetuan Teh Kim Teh, Salina & Co v. Tan Kau Tiah & Anor [2013] 5 CLJ 161 FC (refd) B
Toh Seow Ngan & Ors v. Toh Seak Keng & Ors [1990] 2 CLJ 15; [1990] 1 CLJ (Rep)
286 SC (refd)
Whitworth v. Gaugain (1846) 41 ER 809 (refd)
Legislation referred to:
Companies Act 2016, ss. 486(1)(a), 516(1), (2) C
Evidence Act 1950, ss. 57(1)(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m),
(n), (o), 101(1), (2), 102, 106, 114(e)
Rules of Court 2012, O. 1 rr. 4(1), 7, O. 1A, O. 2 r. 1(2), O. 15 r. 6(1), (2)(b)(i),
(ii), O. 17 rr. 1(1)(b), 2, 5(1), O. 45 r. 12(1), Form 84
Specific Relief Act 1950, ss. 4, 9, 41
D
For the appellant - Steven Thiru, David Ng Yew Kiat & Leah Samuel; M/s Steven Thiru
& Sudhar Partnership
For the 1st respondent - Arifah Abdul Aziz; M/s Tengku Azlina, Rao, Low & Assocs
For the 2nd respondent - Mak Yin Wah & Nur Astry Amami Agus Pemana; M/s Mak
Haisha & Co
For the 3rd respondent - Phang Soon Mun, Chew Chun Wei & Tang Kian Khuang; E
M/s Han & Partners

[Editor’s note: For the High Court judgment, please see Tenaga Nasional Bhd v. Transformer
Repairs & Services Sdn Bhd & Ors [2021] 1 LNS 2337 (overruled).]
Reported by Lina E
F

JUDGMENT
Wong Kian Kheong JCA:
A. Introduction
G
[1] This appeal discusses the main issue of whether an execution creditor
can lawfully seize and sell movable property in the possession of an
execution debtor pursuant to a writ of seizure and sale issued by the court
(WSS) when the movable property does not belong in equity to the execution
debtor (main issue).
H
B. Background
[2] We shall refer to parties as they were in the High Court (HC).
[3] Zanwa Sdn Bhd (Zanwa) owned a piece of land held under “Pajakan
Negeri No. 24314, Lot No. 87991, Mukim Kelang, Daerah Kelang, I
Selangor” with a postal address at Lot No. 41, Jalan Perigi Nenas 8/7, Pulau
Indah Industrial Park (Phase 1), Westport, 42920 Port Klang, Selangor
Darul Ehsan (land).
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 115

A [4] Zanwa used the land as a factory for its manufacturing and business
operations.
[5] The managing director of Zanwa was Ir Zainal Abidin bin Haji
Abdullah (Ir Zainal).
B [6] By way of a “letter of acceptance” dated 18 April 2011, the plaintiff
company (plaintiff) awarded a contract to Zanwa (contract (plaintiff-Zanwa))
whereby Zanwa would supply, erect and commission two units of “90 MVA,
132/33 KV Power Transformers with associated ancillary equipment for
PMU 132/33 KV Setia Alam” (two power transformers) for the plaintiff at
C
a price of RM9,320,000 (price (two power transformers)). The contract
(plaintiff-Zanwa) was signed on 19 July 2011.
[7] With regard to the two power transformers:
(i) the two power transformers were supposed to be built by Zanwa on the
land;
D
(ii) the plaintiff had paid a total sum of RM8,106,491.34 to Zanwa
(plaintiff’s payment (Zanwa));
(iii) notwithstanding the plaintiff’s payment (Zanwa), Zanwa had breached
the contract (plaintiff-Zanwa) by not delivering the two power
E transformers to the plaintiff in accordance with the contract (plaintiff-
Zanwa); and
(iv) until the date of decision of this appeal, the two power transformers had
been kept on the land.

F [8] On 28 April 2017, there was a public auction of the land and the land
was sold to the second defendant (second defendant). The second defendant
did not however take possession of the land. Furthermore, the second
defendant did not take any action regarding the two power transformers on
the land.
G [9] The first defendant company (first defendant) had been incorporated
pursuant to a “shareholders agreement” which had been concluded by Zanwa
and Magnitude Power Sdn Bhd on 1 March 2018.
[10] On 29 July 2017, the first defendant entered into a tenancy agreement
with the second defendant for a period of two years from 1 September 2017
H to 31 August 2019 (tenancy agreement (first defendant-second defendant)).
[11] The first defendant allowed Zanwa to continue its manufacturing and
business operations on the land, including the completion of the two power
transformers for the plaintiff.
I [12] Zanwa was wound up on 5 April 2019 by an order of HC in Kuala
Lumpur (winding up court). The winding up court also appointed the official
receiver to be Zanwa’s liquidator.
116 Current Law Journal [2024] 1 CLJ

[13] On 11 July 2019: A

(i) Zanwa sent a letter to the plaintiff (Zanwa’s letter (11 July 2019)) which
stated as follows, among others:
(a) Zanwa was “in the process of closing down temporarily” as Zanwa’s
overheads were high and Zanwa was losing business; B
(b) Zanwa was facing financial problems and would like to meet with
the plaintiff to discuss about Zanwa’s proposal to close down
temporarily; and
(c) Zanwa proposed to assign the “balance” works under the contract
C
(plaintiff-Zanwa) to a third party; and
(ii) Ir Thevindra Raj a/l Selva Raj (Ir Thevindra), the plaintiff’s project
manager (Central-1) in the Grid Development Department, Grid
Division, visited the land.
[14] On 14 August 2019, Zanwa sent a letter to the plaintiff (Zanwa’s letter D
(14 August 2019)). According to Zanwa’s letter (14 August 2019), among
others:
(i) Zanwa had sold its factory to a third party and had to vacate the factory
by 15 September 2019;
E
(ii) Zanwa was unable to “continue” the contract (plaintiff-Zanwa); and
(iii) the plaintiff was requested to collect the two power transformers by
15 September 2019.
[15] The second defendant filed a suit in the Sessions Court (SC) of Klang F
against the first defendant on 26 August 2018 regarding the first defendant’s
breach of the tenancy agreement (first defendant-second defendant) (second
defendant’s suit (Klang SC)). The second defendant’s suit (Klang SC) claimed
for, among others, the following remedies:
(i) an order for the first defendant to deliver vacant possession of the land G
to the second defendant; and
(ii) double rental in a sum of RM72,000 per month shall be paid by the first
defendant to the second defendant from 1 September 2019 until the date
of delivery of vacant possession of the land by the first defendant to the
second defendant. H

[16] Zanwa sent a letter dated 26 September 2019 to the plaintiff which,
among others, requested the plaintiff to collect the two power transformers
“as soon as possible as the insurance coverage” for the two power
transformers had already expired (Zanwa’s letter (26 September 2019)).
I
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 117

A [17] On 3 October 2019, Encik Sayaidina Hamzah bin Che Harun (Encik
Sayaidina), a director of the first defendant, sent a “WhatsApp” message to
Ir Thevindra for the plaintiff to collect the two power transformers on an
urgent basis (pada kadar segera) before the end of October 2019 (first
defendant’s WhatsApp message (3 October 2019)). According to first
B defendant’s WhatsApp message (3 October 2019), among others:
(i) after October 2019, the two power transformers “akan discrapkan”; and
(ii) the first defendant needed to deliver vacant possession of the land on an
urgent basis.
C [18] A letter dated 10 October 2019 was sent by Zanwa to the plaintiff
(Zanwa’s letter (10 October 2019) which stated as follows, among others:
(i) there were two break-ins at the factory on the land; and
(ii) the plaintiff was requested to collect the two power transformers
D “soonest”; and
(iii) Zanwa would not be responsible for the loss of the two power
transformers.
[19] On 8 November 2019, Klang SC granted summary judgment in favour
of the second defendant against the first defendant (second defendant’s
E
summary judgment (Klang SC)). The first defendant had appealed to Shah
Alam HC against the second defendant’s summary judgment (Klang SC) (first
defendant’s HC appeal (second defendant’s summary judgment)).
[20] On 19 November 2019, Puan Nor Amirawati from Zanwa sent an
F email to Ir Thevindra which informed the plaintiff, among others, that
Zanwa had stopped operations (Zanwa’s email (19 November 2019)).
[21] Premised on the second defendant’s summary judgment (Klang SC),
the second defendant applied to Klang SC and obtained a WSS dated
26 November 2019. The WSS stated as follows, among others (in our
G National language):
…
Writ Penyitaan Dan Penjualan (Harta Alih)
Kepada: Bailif
H Mahkamah Rendah
Kelang
Kami memerintahkan kamu supaya kamu menyebabkan dilevikan dan dibuat
daripada harta yang kena disita di bawah suatu writ penyitaan dan penjualan
yang hendaklah dikenalpastikan oleh atau bagi pihak [second defendant] sebagai
I
kepunyaan [first defendant] …
(emphasis added)
118 Current Law Journal [2024] 1 CLJ

[22] Despite Zanwa’s letter (14 August 2019), Zanwa’s letter A

(26 September 2019), first defendant’s WhatsApp message (3 October 2019),
Zanwa’s letter (10 October 2019) and Zanwa’s email (19 November 2019),
the plaintiff did not collect the two power transformers from the land.
[23] On 27 November 2019, Klang SC’s bailiff (bailiff) seized all movable
B
properties on the land (including the two power transformers) pursuant to the
WSS (seized movable properties). A “Notis Penyitaan dan Inventori” (notice
of seizure and inventory) dated 27 November 2019 was prepared by the
bailiff (NSI). According to the NSI, among others:
(i) the bailiff had valued the seized movable propertied movable properties C
to be worth RM200,000;
(ii) the first defendant owed a sum of RM210,717.26 to the second
defendant (first defendant’s judgment debt (second defendant)); and
(iii) unless the first defendant paid the first defendant’s judgment debt
(second defendant) together with all costs of execution of WSS to the D
second defendant within seven days from the date of NSI, a public
auction of the seized movable properties would be conducted by the
bailiff on 13 December 2019.
[24] Encik Sayaidina sent a WhatsApp message to Ir Thevindra on
E
10 December 2019 which stated that, among others, the two power
transformers had been seized (first defendant’s WhatsApp message
(10 December 2019)).
[25] Pending the disposal of the first defendant’s HC appeal (second
defendant’s summary judgment), the first defendant applied to Klang SC for F
a stay of execution of the second defendant’s summary judgment (Klang SC).
On 24 December 2019, Klang SC granted a conditional stay of execution of
the second defendant’s summary judgment (Klang SC) (Klang SC’s
conditional stay order). namely, the execution of the second defendant’s
summary judgment (Klang SC) would be stayed pending the outcome of the
G
first defendant’s appeal (Klang HC) provided that the first defendant could
deposit an amount of RM410,400 with the second defendant’s solicitors,
Messrs Mak Haisha & Co (second defendant’s solicitors) as stakeholders
within 30 days from the date of Klang SC’s conditional stay order (condition
(Klang SC’s conditional stay order)).
H
[26] The first defendant did not comply with the condition (Klang SC’s
conditional stay order). Consequently, Klang SC’s conditional stay order had
lapsed.
[27] On 23 December 2019, Puan Wan Absah bt Wan Kadir (Puan Wan)
filed a notice of application in the second defendant’s suit (Klang SC) (Puan I
Wan’s application (Klang SC)). Puan Wan’s application (Klang SC) sought
for the following orders:
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 119

A (i) a declaration that the seized movable properties (except the two power
transformers) are owned by Puan Wan; and
(ii) an order for the bailiff to release the seized movable properties (other
than the two power transformers) forthwith to Puan Wan.
B In support of Puan Wan’s application, Puan Wan affirmed an affidavit on
23 December 2019 (Puan Wan’s affidavit) which stated in paras. 5 and 8 that
the plaintiff owns the two power transformers.
[28] Puan Wan’s application (Klang SC) was dismissed with costs on
21 February 2020 (Klang SC’s dismissal (Puan Wan’s application)). On
C 25 February 2020, Puan Wan appealed to Shah Alam HC against Klang SC’s
dismissal (Puan Wan’s application) (Puan Wan’s appeal (Shah Alam HC)).
[29] After the delivery of Klang SC’s dismissal (Puan Wan’s application),
the second defendant acted expeditiously and requested the bailiff to fix a
date for the public auction of the seized movable properties. The bailiff then
D fixed a public auction of the seized movable properties on 28 February 2020
(judicial auction).
[30] On 27 February 2020, the first defendant filed an application in Shah
Alam HC to stay the execution of:
E (i) the second defendant’s summary judgment (Klang SC); and
(ii) the WSS
pending the disposal of the first defendant’s HC Appeal (second defendant’s
summary judgment) (first defendant’s stay application (Shah Alam HC)).
F [31] On 28 February 2020:
(i) the seized movable properties, including the two power transformers,
were sold by the bailiff at the judicial auction to the third defendant
(third defendant) for a sum of RM216,000 (sale proceeds (auction));
G (ii) Khairil Azmi bin Hj Mohamad Hasbie JC granted an ex parte ad interim
stay of execution of the second defendant’s summary judgment (Klang
SC) and execution of the WSS pending the inter partes disposal of the first
defendant’s stay application (Shah Alam HC) (Shah Alam HC’s ex parte
ad interim stay order); and
H (iii) the first defendant’s solicitors, Messrs Tengku Azlina, Rao, Low &
Associates (first defendant’s solicitors), only emailed the Shah Alam
HC’s ex parte ad interim stay order to the second defendant’s solicitors
after the completion of the judicial auction. In other words, the Shah
Alam HC’s ex parte ad interim stay order could not prevent the judicial
I auction from being carried out.
120 Current Law Journal [2024] 1 CLJ

[32] In the second defendant’s suit (Klang SC), the first defendant filed two A
applications on 3 March 2020 and 22 June 2020 for the following orders
from Klang SC, among others:
(i) the setting aside of the WSS and judicial auction;
(ii) the return of the sale proceeds (auction) to the third defendant; and B
(iii) the return of the seized movable properties (except the two power
transformers) to the first defendant
(first defendant’s two setting aside applications (Klang SC)).
[33] Ir Thevindra sent an email dated 4 June 2020 to Ir Zainal and C
enquired about the status of the two power transformers.
[34] Zanwa sent a letter dated 9 June 2020 to Ir Thevindra (Zanwa’s letter
(9 June 2020)) which stated, among others, as follows:
(i) Zanwa had been wound up by Kuala Lumpur HC; D
(ii) Ir Thevindra had visited the land on 11 July 2019 and was given
Zanwa’s letter (11 July 2019). However, Ir Thevindra refused to
accept Zanwa’s letter (11 July 2019) and he asked for Zanwa’s letter
(11 July 2019) to be emailed or posted to the plaintiff;
E
(iii) Zanwa’s letter (26 September 2019), Zanwa’s letter (14 August 2019)
and Zanwa’s letter (10 October 2019) had been sent for the plaintiff
to collect the two power transformers from the land;
(iv) the land had been sold to the second defendant;
(v) the first defendant had rented the land from the second defendant; F

(vi) there was a “rental dispute” between the first and second defendants
which was brought to court;
(vii) all the assets on the land, including the two power transformers, had
been auctioned by the second defendant; and G
(viii) the first defendant had filed another suit in court and had informed the
court in that suit that the two power transformers belonged to the
plaintiff. This suit was still ongoing.
[35] On 9 June 2020, the first defendant’s HC Appeal (second defendant’s
H
summary judgment) was allowed with costs (Shah Alam HC’s decision
(first defendant’s appeal)). The second defendant appealed to the Court of
Appeal (CA) against Shah Alam HC’s decision (first defendant’s appeal)
(second defendant’s appeal (CA)).
[36] On 10 June 2020, on behalf of the plaintiff, Ir Thevindra lodged a I
police report against Ir Zainal as owner of Zanwa regarding the auction of
the two power transformers by the second defendant.
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 121

A [37] The plaintiff sent a letter dated 17 June 2020 to the first defendant’s
solicitors which required, among others, the first defendant to retrieve the
two power transformers from the second defendant and to return the same
to the plaintiff.
[38] A letter dated 17 June 2020 was sent by the plaintiff to the second
B
defendant’s solicitors (plaintiff’s letter (17 June 2020)). According to the
plaintiff’s letter (17 June 2020), among others:
(i) the two power transformers belonged to the plaintiff under the contract
(plaintiff-Zanwa);
C (ii) the second defendant had auctioned the two power transformers
pursuant to the WSS; and
(iii) the second defendant was required to return immediately the two power
transformers to the plaintiff because the second defendant had no right
to auction the two power transformers which belonged to the plaintiff.
D
[39] On 21 September 2020, Tee Geok Hock JC (as he then was) allowed
Puan Wan’s appeal (Shah Alam HC) with costs (HC’s decision (Puan Wan’s
application)). According to the HC’s decision (Puan Wan’s application):
(i) Klang SC’s dismissal (Puan Wan’s application) was set aside; and
E
(ii) the dispute regarding the ownership of the seized movable properties
should be tried, if necessary, in the second defendant’s suit (Klang SC)
or in another action (Klang SC’s trial (ownership of seized movable
properties)).

F At the time of our decision in this appeal, Klang SC’s trial (ownership of
seized movable properties) is still pending.
[40] The first defendant’s two setting aside applications (WSS and judicial
auction) were allowed by Klang SC (with no order as to costs) on
25 November 2020 (Klang SC’s decision (setting aside of WSS and judicial
G auction)). The third defendant has filed an appeal to Klang HC against Klang
SC’s decision (setting aside of WSS and judicial auction) (third defendant’s
Appeal (Klang HC)).
[41] The second defendant’s appeal (CA) was allowed with costs on
27 January 2021 (CA’s decision (second defendant’s appeal)). By virtue of
H CA’s decision (second defendant’s appeal), the second defendant’s summary
judgment (Klang SC) is restored (except for a minor variation of para. (c) of
the second defendant’s summary judgment (Klang SC)). For the purpose of
this appeal, the second defendant’s summary judgment (Klang SC) is final and
binding.
I
122 Current Law Journal [2024] 1 CLJ

[42] On 28 May 2021, the third defendant’s appeal (Klang HC) was A
allowed (Klang HC’s decision (third defendant’s appeal)). The first defendant
has obtained leave of CA to appeal to CA against Klang HC’s decision
(third defendant’s appeal) (first defendant’s appeal (CA)). The first
defendant’s appeal (CA) has not been heard at the time of the decision of this
appeal. B

C. This Amended Originating Summons (Amended OS)

[43] In this amended OS (first filed in Klang HC on 6 August 2020), the
plaintiff applied for the following relief against the first to third defendants
(collectively referred to in this judgment as the “defendants”), among others: C
(i) a declaration that:
(a) the plaintiff is the lawful and beneficial owner of the two power
transformers;
(b) the seizure and sale of the two power transformers pursuant to the D
WSS and judicial auction respectively are invalid and void; and
(c) any interest in the two power transformers obtained by the third
defendant is unlawful and is hereby set aside;
(ii) an order for the defendants to return and/or ensure the return of the two
E
power transformers to the plaintiff within seven days from the date of
the order to be made by Klang HC;
(iii) an order for general damages to be assessed regarding all the loss suffered
by the plaintiff; and
(iv) in the alternative, if the defendants do not have possession or custody F
of the two power transformers, an order for the defendants to pay to the
plaintiff a sum of money which is equivalent to the plaintiff’s payment
(Zanwa).
[44] In the amended OS, on behalf of the first defendant, Encik Sayaidina
G
had affirmed an affidavit on 11 September 2020 which admitted in sub-para. 7.1
that TNB owns the two power transformers (first defendant’s affidavit).
[45] Klang HC dismissed the amended OS with costs of RM20,000 to be
paid by the plaintiff to each of the three defendants (subject to allocatur fee)
(Klang HC’s decision). The plaintiff has filed this appeal to CA against Klang H
HC’s decision (this appeal).
D. Reasons For Klang HC’s Decision
[46] The following reasons for Klang HC’s decision were given in the
learned HC judge’s grounds of judgment (GOJ):
I
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A (i) in paras. 22 and 25 of the GOJ, the learned HC judge relied on the
Federal Court’s (FC) judgment in Lim Ker v. Chew Seok Tee [1967] 1
LNS 88; [1967] 2 MLJ 253 to decide that the bailiff could lawfully
seize the two power transformers in the possession of the first
defendant (bailiff’s seizure (two power transformers));
B
(ii) prior to the judicial auction, the plaintiff had knowledge of the second
defendant’s suit (Klang SC) and bailiff’s seizure (two power
transformers) but the plaintiff failed to send any letter to the second
defendant to oppose the bailiff’s seizure (two power transformers) –
please refer to para. 24 of the GOJ;
C
(iii) according to paras. 25 to 27 of the GOJ, the burden was on the
plaintiff (not the second defendant) to prove that the two power
transformers belong to the plaintiff;
(iv) in paras. 28 to 32 and 69 of the GOJ, the learned HC judge decided
D as follows:
(a) the plaintiff had no ownership of the two power transformers
because:
(1) the construction of the two power transformers had not been
completed; and
E
(2) the plaintiff had not paid in full the price (two power
transformers) to Zanwa;
(b) with regard to the two power transformers, Zanwa was the
interested party and “it begs the question” as to why the plaintiff
F did not make Zanwa a party in this amended OS;
(c) as the plaintiff had no possession of the two power transformers
and had no immediate right to possess the same, the plaintiff had
“no locus standi and/or cause of action” against the first and
second defendants for the tort of conversion; and
G
(d) the second defendant’s dealing of the two power transformers in
this case did not amount to a commission of tort of conversion.
This was because Klang HC’s decision (third defendant’s appeal)
had decided that the execution of the WSS and judicial auction
H was done pursuant to legal process;
(v) according to the learned HC judge in paras. 33 to 39, 54 to 64 and 73
of the GOJ, due to the plaintiff’s inaction and delay in claiming for
the two power transformers (alleged plaintiff’s inaction), the plaintiff
was barred by laches, acquiescence, waiver, estoppel and/or
I abandonment from succeeding in the amended OS;
124 Current Law Journal [2024] 1 CLJ

(vi) in view of the alleged plaintiff’s inaction, the learned HC judge refused A
to exercise his discretion under s. 41 of the Specific Relief Act 1950
(SRA) to grant declarations in favour of the plaintiff in the amended
OS – please refer to paras. 40 to 46 of the GOJ, In para. 46 of the
GOJ, the HC held as follows:
[46] Since the auction took place on 28-02-2020, the plaintiff could have B
filed a claim to the bailiff for interpleader be applied or any necessary
application to the court when it received information from the first
defendant on 10-12-2019 that 2 units of Transformers were seized by
the second defendant but the plaintiff failed to take any action.
(emphasis added)
C
(vii) in paras. 47 to 52 and 70 to 72 of the GOJ, the learned HC judge
determined that as the third defendant was a bona fide purchaser of the
two power transformers who had paid the sale proceeds (auction)
without any notice of the plaintiff’s claim on the two power
transformers, the third defendant should be entitled to the two power D
transformers; and
(viii) the learned HC judge decided that the amended OS had been filed for
a collateral purpose, namely to overcome the alleged plaintiff’s
inaction – please see para. 75 of the GOJ.
E
E. Submission By parties
[47] The plaintiff’s learned counsel has advanced, among others, the
following contentions in support of this appeal:
(i) as the plaintiff is the equitable owner of the two power transformers
(plaintiff’s equitable ownership (two power transformers)): F

(a) the bailiff’s seizure (two power transformers); and

(b) the judicial auction of the two power transformers (judicial auction
(two power transformers))
are unlawful and void; G

(ii) before the judicial auction (two power transformers), the second
defendant had actual knowledge of plaintiff’s equitable ownership (two
power transformers) from Puan Wan’s affidavit (filed in support of Puan
Wan’s application in the second defendant’s suit (Klang SC));
H
(iii) the plaintiff was not barred by laches, acquiescence, waiver, estoppel
and/or abandonment in this case because of the following reasons,
among others:
(a) the plaintiff was only informed of the bailiff’s seizure (two power
transformers) and judicial auction (two power transformers) in I
Zanwa’s letter (9 June 2020);
 Tenaga Nasional Bhd v. Transformer Repairs
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A (b) the plaintiff did not have “full knowledge” regarding the two power
transformers; and
(c) after the plaintiff had been informed of the bailiff’s seizure (two
power transformers) and judicial auction (two power transformers)
in Zanwa’s letter (9 June 2020), the plaintiff had taken the following
B
steps, among others, to recover the two power transformers:
(1) the plaintiff had sent letters to the first defendant’s solicitors and
second defendant’s solicitors on 17 June 2020 (which, among
others, demanded for the return of the two power transformers);
C (2) the plaintiff had attempted to visit the land on 20 June 2020;
(3) the plaintiff had to ascertain all the relevant facts and compile
evidence regarding the two power transformers before filing this
present suit on 6 August 2020;

D (4) the plaintiff had to appoint its present solicitors (plaintiff’s

solicitors) to file this amended OS; and
(5) the plaintiff’s solicitors had to expend time to draft the cause
papers for this amended OS;
(iv) the plaintiff was not required to cite Zanwa as a co-defendant in this case
E
because:
(a) the plaintiff’s cause of action against Zanwa was for a breach of
the contract (plaintiff-Zanwa) (plaintiff’s cause of action
(Zanwa));
F (b) the plaintiff’s cause of action (Zanwa) had no bearing on this
amended OS; and
(c) Zanwa did not play any part in the bailiff’s seizure (two power
transformers); and
G (v) the plaintiff has the following three causes of action to support the
amended OS:
(a) the first and second defendants had committed the tort of conversion
and/or tort of negligence with regard to the bailiff’s seizure (two
power transformers) and judicial auction (two power transformers);
H and
(b) the third defendant has been unjustly enriched in respect of the two
power transformers and should return the same to the plaintiff.
[48] According to the first defendant’s learned counsel, the plaintiff cannot
I succeed to claim damages from the first defendant based on the tort of
conversion and/or tort of negligence because:
126 Current Law Journal [2024] 1 CLJ

(i) Zanwa had requested from the first defendant for the two power A
transformers to remain on the land until collected by the plaintiff;
(ii) the first defendant had given notice to the plaintiff to collect the two
power transformers on the land;
(iii) both the first defendant and first defendant’s solicitors had informed the B
second defendant as well as the second defendant’s solicitors regarding
the plaintiff’s equitable ownership (two power transformers); and
(iv) notwithstanding the fact that the second defendant had actual notice of
the plaintiff’s equitable ownership (two power transformers), the second
defendant proceeded with the judicial auction (two power transformers). C
Hence, the second defendant (not the first defendant) was liable to the
plaintiff in this case for the tort of conversion and/or tort of negligence.
[49] The second defendant has opposed this appeal on the following
grounds, among others:
D
(i) premised on the documentary evidence adduced in this case, the learned
HC judge has correctly decided the existence of the alleged plaintiff’s
inaction;
(ii) the alleged plaintiff’s inaction supports the learned HC judge’s decision
that this amended OS is barred by laches, acquiescence, waiver, estoppel E
and/or abandonment;
(iii) as the first defendant’s WhatsApp message (10 December 2019) had
informed the plaintiff regarding the bailiff’s seizure (two power
transformers), the plaintiff should have commenced interpleader
proceedings in the second defendant’s suit (Klang SC) under O. 17 r. 2 F
of the Rules of Court 2012 (RC) to claim for the return of the two power
transformers (interpleader proceedings);
(iv) the plaintiff had no right to sue the second defendant for the tort of
conversion because:
G
(a) the construction of the two power transformers had not been
completed by Zanwa;
(b) Zanwa had not issued “taking over certificate” to the plaintiff
regarding the two power transformers; and
H
(c) the plaintiff has not paid Zanwa in full the price (two power
transformers); and
(d) due to the above reasons, the plaintiff had no immediate right to
possess the two power transformers;
(v) the plaintiff should have joined Zanwa as a co-defendant in this amended I
OS;
 Tenaga Nasional Bhd v. Transformer Repairs
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A (vi) by virtue of the proviso to s. 41 of the SRA, the learned HC judge had
correctly declined to grant declarations in favour of the plaintiff. This
was because the plaintiff was able to seek further relief by filing
interpleader proceedings and should not have merely applied for a
declaration of title with regard to the two power transformers (in this
B amended OS); and
(vii) this court should take judicial notice of a scheme to defraud the second
defendant by depriving the second defendant of its right to enjoy the
fruits of the second defendant’s summary judgment (Klang SC) (alleged
fraudulent scheme). The alleged fraudulent scheme, according to the
C second defendant’s learned counsel, is as follows:
(a) Zanwa and first defendant are the “same entity” which is controlled
by Ir Zainal; and
(b) Puan Wan is Ir Zainal’s wife.
D [50] The third defendant resisted this appeal on the following grounds,
among others:
(i) the third defendant was a bona fide purchaser of the two power
transformers who had paid the sale proceeds (auction) without any
notice of the plaintiff’s claim on the two power transformers; and
E
(ii) if this appeal is allowed, the third defendant would suffer the following
loss:
(a) the cost of employing security guards on the land at a rate of RM96
per day; and
F
(b) despite the fact that the third defendant had paid in full the sale
proceeds (auction), the third defendant could not use the two power
transformers
(third defendant’s loss).
G
F. Issues
[51] The following questions arise in this appeal:
(i) did the plaintiff discharge the legal burden to prove on a balance of
probabilities the plaintiff’s equitable ownership (two power
H transformers)?
(ii) if the plaintiff’s equitable ownership (two power transformers) is
proven:
(a) with regard to the main issue referred to in the above para. 1, could
I the second defendant lawfully seize and sell the two power
transformers to the third defendant in the judicial auction (two
128 Current Law Journal [2024] 1 CLJ

power transformers)? The resolution of the main issue depends on A

an interpretation of O. 45 r. 12(1) and Form 84 in Appendix A to
the RC (Form 84) read with O. 1 r. 7 of the RC;
(b) can the learned HC judge rely on Klang HC’s decision (third
defendant’s appeal) which decided that the execution of the WSS
B
and judicial auction was lawful when:
(1) the plaintiff was not a party in the first defendant’s two setting
aside applications (Klang SC) and Klang HC’s decision (third
defendant’s appeal); and
(2) the plaintiff was not given a right to be heard regarding the C
plaintiff’s equitable ownership (two power transformers)?
(c) whether the learned HC judge had made a plain error of fact in
deciding that:
(1) the alleged plaintiff’s inaction existed; and D
(2) this amended OS was barred by laches, acquiescence, waiver,
estoppel and/or abandonment; and
(d) if the second defendant could not lawfully seize and sell the two
power transformers to the third defendant:
E
(1) could the plaintiff have commenced interpleader proceedings in
the second defendant’s suit (Klang SC) (instead of filing a fresh
action, ie., this amended OS)?
(2) can the court order a return of the two power transformers to the
plaintiff pursuant to s. 9 of the SRA (restitution order) without F
the need for the plaintiff to prove:
(2)(a) tort of conversion and/or tort of negligence have been
committed by the first and second defendants; and
(2)(b) the unjust enrichment of the third defendant in respect G
of the two power transformers?
(iii) whether the court can refuse to make a restitution order on the
ground that the third defendant was a bona fide purchaser of the two
power transformers for valuable consideration without any actual
notice of the plaintiff’s equitable ownership (two power H
transformers);
(iv) was the plaintiff required to cite Zanwa as a co-defendant in this
amended OS? This entails a discussion of O. 1A, O. 2 r. 1(2),
O. 15 r. 6(1), (2)(b)(i) and (ii) of the RC; and
I
 Tenaga Nasional Bhd v. Transformer Repairs
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A (v) whether the learned HC judge had erred in the exercise of

His Lordship’s discretion under s. 41 of the SRA in refusing to grant
declarations sought by the plaintiff in this case. This issue also
concerns the application of the proviso to s. 41 of the SRA;
(iii) can the plaintiff claim that the first and second defendants had
B
committed a tort of negligence in respect of the two power transformers?
In this regard:
(a) whether the first and second defendants owed a duty of care to the
plaintiffs in respect of the two power transformers (duty of care (two
C
power transformers));
(b) if the first and second defendants owed a duty of care (two power
transformers), did the first and second defendants breach the duty of
care (two power transformers) (breach (duty of care))? and
(c) on the assumption that there was a breach (duty of care), had the
D plaintiff suffered any loss or damage due to the breach (duty of care)?
(iv) with regard to the plaintiff’s claim against the first and second defendants
for the tort of conversion:
(a) in respect of the plaintiff’s right to sue for the tort of conversion
E (right to sue (conversion)):
(1) whether proof of the plaintiff’s equitable ownership (two power
transformers) can confer a right to sue (conversion) on the
plaintiff without the need for the plaintiff to prove a right to
immediate possession of the two power transformers under the
F contract (plaintiff-Zanwa) (right to immediate possession (two
power transformers)); and
(2) if the plaintiff was required to prove right to immediate
possession (two power transformers), did the plaintiff possess
such a right at the time of the judicial auction (two power
G
transformers)?; and
(b) if the plaintiff had a right to sue (conversion):
(1) did the first and second defendants commit a tort of conversion
regarding the two power transformers (conversion (two power
H transformers))?; and
(2) if the first and second defendants had committed conversion
(two power transformers), whether the plaintiff had suffered any
loss due to the conversion (two power transformers);
I (v) is the third defendant liable to the plaintiff for unjust enrichment in
respect of the two power transformers?
130 Current Law Journal [2024] 1 CLJ

(vi) can the court take judicial notice of the alleged fraudulent scheme under A
s. 57 of the Evidence Act 1950 (EA)? If the court can take judicial notice
of the alleged fraudulent scheme, whether the Klang HC’s decision can
be justified on the alleged fraudulent scheme; and
(vii) if the judicial auction (two power transformers) is set aside by court, can
B
the third defendant’s loss be claimed by way of a fresh action by the
third defendant against the second defendant for tort of abuse of court
process regarding the judicial auction (two power transformers)?
Our Decision
G. Had Plaintiff’s equitable ownership (Two Power Transformers) Been C
Proven?
G(1) Legal And Evidential Burden
[52] Section 101(1) and (2) EA provide for legal burden of proof while
s. 102 of the EA concerns evidential burden of proof. The distinction D
between legal and evidential burden is explained in Lilies Suraya Abdul Latib
& Ors v. Khairul Sabri & Others [2019] 1 LNS 2099; [2020] 4 AMR 365, at
[17], as follows (in the context of a claim based on the tort of negligence):
[17] I am of the following view:
(1) the plaintiffs have the legal burden under s. 101(1) and (2) EA to prove on E
a balance of probabilities that the defendants are negligent regarding the
Incident (Legal Burden). This Legal Burden rests on the plaintiffs throughout
the trial and does not shift to the defendants at any time - please refer to
Letchumanan Chettiar Alagappan;
(2) the evidential burden pursuant to s. 102 EA (Evidential Burden) lies on the F
plaintiffs to adduce evidence to prove a prima facie case of the defendants’
negligence with regard to the Incident (prima facie case). Regarding this
Evidential Burden:
(a) in the Singapore Court of Appeal case of Britestone Pte Ltd v Smith
& Associates Far East Ltd [2007] 4 SLR 855, at [60], VK Rajah JCA G
held that a prima facie case may be established by a plaintiff adducing
evidence which is not “inherently incredible”; and
(b) once the plaintiffs have proven a prima facie case, the Evidential Burden
shifts to the defendants to adduce rebuttal evidence that the defendants
have not been negligent in respect of the Incident; and
H
(3) after a trial:
(a) the court has to decide whether there is evidence on a balance of
probabilities to prove the defendants’ negligence in the Incident. I refer to
the definitions of “proved” and “disproved” in s 3 EA as follows:
“proved”: a fact is said to be “proved” when, after considering the I
matters before it, the court either believes it to exist or considers its
 Tenaga Nasional Bhd v. Transformer Repairs
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A existence so probable that a prudent man ought, under the

circumstances of the particular case, to act upon the supposition that
it exists;
“disproved”: a fact is said to be “disproved” when, after considering
the matters before it, the court either believes that it does not exist or
B considers its non-existence so probable that a prudent man ought, under
the circumstances of the particular case, to act upon the supposition
that it does not exist;”
(b) if the plaintiffs have adduced sufficient evidence on a balance of
probabilities to prove that the defendants have been negligent regarding the
Incident, the plaintiffs have successfully discharged the Legal Burden and
C
Evidential Burden under s 101 and 102 EA respectively to prove their
claim against the defendants; and
(c) if there is no adequate evidence to prove on a balance of probabilities that
the defendants have been negligent in the Incident, the plaintiffs have failed
to discharge the Legal Burden and Evidential Burden. Consequently, the
D Original Action has to be dismissed on this ground alone.
(emphasis added)
[53] When an execution creditor (ECr) seizes movable property under a
WSS and there is a party who claims equitable ownership of the movable
property (claimant), we are of the following view regarding who has the legal
E and evidential burden with regard to the proof of beneficial ownership of the
movable property:
(i) there are two scenarios (two scenarios), namely:
(a) in the first scenario (first scenario), at the time of ECr’s seizure of
F the movable property, the movable property is in the possession,
care or custody of the execution debtor (EDr); and
(b) when movable property is seized by ECr, the movable property is
in the possession, care or custody of the claimant or any other party
(second scenario);
G
(ii) the two scenarios have been elucidated by Abdul Malek Ahmad J (as he
then was) in the HC case of Development & Commercial Bank Bhd v. Lam
Chuan Co & Anor [1989] 1 CLJ 192; [1989] 1 CLJ (Rep) 489; [1989]
1 MLJ 318, at 493 to 494 (CLJ); 320 to 321 (MLJ) (D&C Bank’s case),
as follows:
H
In Mallal’s Supreme Court Practice by Tan Sri Chang Ming Tat at p 173
it is stated that in a sheriff’s interpleader the claimant is as a general rule
made the plaintiff and the burden of proof rests upon him where the goods
seized were at the time of seizure in possession of the judgment debtor,
possession being prima facie evidence of title. If, however, the claimant was
I
132 Current Law Journal [2024] 1 CLJ

in possession at the seizure the burden of proof may be upon the execution A
creditor thus reversing the ordinary rule and the execution creditor may be
made plaintiff. I was of the opinion that it is actually for the execution
creditor here to prove that the judgment debtor was the actual lawful owners
of the goods attached but which they had failed to do. In any case, it was
my view that based on the evidence taken before the senior assistant registrar,
the affidavits averred and authorities cited, the claimant had in fact and in B
law succeeded in establishing that they were the actual lawful owners of the
attached property seized on the premises.
(emphasis added)
The above judgment in D&C Bank’s case has been adopted by Augustine C
Paul JC (as he then was) in the HC in Tan Kim Khuan v. Tan Kee Kiat
(M) Sdn Bhd [1998] 1 CLJ Supp 147; [1998] 1 MLJ 697, at 703 to 704;
(iii) premised on D&C Bank’s case and Tan Kim Khuan:
(a) in the first scenario, the claimant bears the legal burden to satisfy the
court that the claimant (not EDr) is the equitable owner of the D
movable property. Furthermore, according to s. 106 of the EA, the
claimant should bear the onus to prove the claimant’s beneficial
ownership of the movable property which is “especially within the
knowledge” of the claimant. Section 106 of the EA provides as
follows: E

When any fact is especially within the knowledge of any person, the
burden of proving that fact is upon him.
(emphasis added); and
(b) with regard to the second scenario, ECr has the legal burden to F
prove that EDr (not the claimant) has equitable ownership of the
movable property;
(iv) Section 114(e) of the EA provides as follows:
Court may presume existence of certain fact
G
114. The court may presume the existence of any fact which it thinks likely to
have happened, regard being had to the common course of natural events,
human conduct, and public and private business, in their relation to the facts of
the particular case.
ILLUSTRATIONS H
…
(e) that judicial and official acts have been regularly performed;
(emphasis added)
I
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A seizures of movable properties under WSS and their subsequent sales by

way of judicial auctions are conducted by court officers. It is thus clear
that execution of WSS and conduct of judicial auctions are “judicial”
acts within the meaning of s. 114(e) of the EA.
In the first scenario, s. 114(e) of the EA fortifies our view that the
B
claimant (not ECr) has the legal burden to prove that the claimant is the
beneficial owner of movable property in the possession, care or custody
of the EDr. However, in the second scenario, s. 114(e) of the EA does
not raise any rebuttable presumption in favour of ECr - ECr (not the
claimant) has the legal burden to prove that the EDr is the equitable
C owner of movable property in the possession, care or custody of the
claimant or any other party. Our reasons are as follows:
(a) the court has a discretion to invoke s. 114(e) of the EA. Such a
discretion is clear from the employment of the directory term
“may” in s. 114(e) of the EA; and
D
(b) the court should not exercise its discretion to apply s. 114(e) of the
EA in the second scenario because:
(1) if ECr has actual knowledge that EDr is the beneficial owner of
a movable property in the possession, care or custody of the
E claimant or any other party, in accordance with s. 106 of the
EA, ECr has the legal burden to prove such knowledge; and
(2) if the court allows the application of s. 114(e) of the EA in the
second scenario, this will confer a carte blanche on ECrs to seize
and sell movable properties in the possession, care or custody
F of the claimant or any other party. Such an outcome is neither
just nor desirable as ECrs may abuse court process regarding
WSS and judicial auctions;
(v) the legal burden can only be discharged with the production of evidence
which satisfies the court on a balance of probabilities; and
G
(vi) in the two scenarios:
(a) if the party who has legal burden (X), has not adduced any evidence
to discharge X’s legal burden, the court should then decide in favour
of the opposing party (Y) – please refer to Tan Kim Khuan, at
H p. 707. Such a decision should be reached by the court even if Y has
not produced any evidence in support of Y’s case. This is because
X has failed to discharge the legal burden and there is no legal
burden on Y to present any evidence to support Y’s case and to rebut
X’s case; and
I
134 Current Law Journal [2024] 1 CLJ

(b) if X has adduced evidence which is not inherently incredible A

regarding X’s legal burden (X’s prima facie case), the evidential
burden will then shift from X to Y. In such a situation, the court has
to decide as follows:
(1) if Y has produced sufficient evidence to rebut X’s prima facie
B
case on a balance of probabilities, the court should decide in Y’s
favour and determine that X has failed to discharge the legal
burden to prove X’s case on a balance of probabilities; or
(2) if Y does not present any evidence to rebut X’s prima facie case
or if the evidence adduced by Y cannot rebut X’s prima facie case C
on a balance of probabilities, the court should deliver a decision
in X’s favour and determine that X has succeeded to discharge
the legal burden on a balance of probabilities.
G(2) Whether Plaintiff Had Discharged Legal Burden To Prove Plaintiff’s Equitable
Ownership (Two Power Transformers) D
[54] It is not disputed that at the time of the bailiff’s seizure (two power
transformers), the two power transformers were in the possession of the first
defendant (EDr). In other words, this case concerns the first scenario and
consequently, the plaintiff bears the legal burden to prove the plaintiff’s
equitable ownership (two power transformers) on a balance of probabilities. E

[55] We are of the view that the learned HC judge has committed a plain
error of fact in failing to decide that the plaintiff’s equitable ownership (two
power transformers) has been proven by the plaintiff on a balance of
probabilities (first appealable error). The first appealable error is borne out
by the following evidence and reasons: F

(i) the contract (plaintiff-Zanwa);

(ii) “purchase orders” had been issued by the plaintiff to Zanwa with
regard to the two power transformers (plaintiff’s POs);
G
(iii) Zanwa’s invoices to the plaintiff in respect of the two power
transformers (Zanwa’s invoices); and
(iv) plaintiff’s internal “memorandum” (plaintiff’s memorandum) which
evidenced the plaintiff’s payment (Zanwa);
(v) correspondence between the plaintiff and Zanwa regarding the two H
power transformers (correspondence (plaintiff-Zanwa));
(vi) in Zanwa’s letter (14 August 2019), Zanwa had admitted that Zanwa
could not complete the contract (plaintiff-Zanwa) (Zanwa’s
admission). It is clear from Zanwa’s admission that Zanwa had
I
breached the contract (plaintiff-Zanwa) (Zanwa’s breach);
 Tenaga Nasional Bhd v. Transformer Repairs
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A (vii) Zanwa’s liquidator did not dispute Zanwa’s breach. Nor was there a
claim on the two power transformers by Zanwa’s liquidator; and
(viii) the contents of the contract (plaintiff-Zanwa), plaintiff’s POs, Zanwa’s
invoices, plaintiff’s memorandum, plaintiff’s correspondence
(plaintiff-Zanwa) and Zanwa’s letter (14 August 2019) are not disputed
B
by the defendants. Nor did the defendants adduce any evidence to
rebut the contents of the contract (plaintiff-Zanwa), plaintiff’s POs,
Zanwa’s Invoices, plaintiff’s memorandum, correspondence (plaintiff-
Zanwa) and Zanwa’s letter (14 August 2019). In fact, the plaintiff’s
equitable ownership (two power transformers) was admitted in the
C first defendant’s affidavit.
H. Whether Bailiff’s Seizure (Two Power Transformers) And Judicial
Auction (Two Power Transformers) Are Valid
[56] We reproduce below O. 1 r. 7, O. 45 r. 12(1) of the RC and Form 84:
D O 1 r 7 Forms
The Forms in Appendix A shall be used where applicable with such variations as
the circumstances of the particular case require.
O 45 r 12 Forms of writs
E (1) A writ of seizure and sale shall be in Form 84 (for movable property) for the
High Court and in Form 84A (for movable property) for the Subordinate
Courts or Form 85 (for immovable property).
No. 84
Writ Of Seizure And Sale (Movable Property)
F
(O. 45 r. 12)
(Title as in action)
The Honourable
Chief Judge Of Malaya/Sabah & Sarawak,
G In The Name Of The Yang
Dl-Pertuan Agong
To the Sheriff,
We command you that you cause to be levied and made out of the property liable
to be seized under a writ of seizure and sale which shall be identified by or on behalf
H
of (name of execution creditor) as belonging to (name of execution debtor) now or late
of (address of execution debtor) by seizure and if it be necessary by sale thereof
RM ... which the said (name of execution creditor) lately in Our Court
recovered against the said (name of execution debtor) by a judgment (or
order or as may be) bearing the ... day of ..., 20 ... And in what manner
I you shall have executed this
136 Current Law Journal [2024] 1 CLJ

Our writ make appear to us in our said court immediately after the A
execution thereof. And have there then this writ. …
(emphasis added)
[57] We are of the following view:
(i) O. 1 r. 7 of the RC provides that Forms in Appendix A to the RC “shall B
be used where applicable with such variations as the circumstances of
the particular case require”.
O. 45 r. 12(1) of the RC has expressly provided that a WSS for movable
property “shall” be in Form 84.
C
Form 84 is addressed to the “sheriff” (defined in O. 1 r. 4(1) RC to mean
the “Registrar” of the High Court and Subordinate Court). Order 1
r. 4(1) of the RC also provides a wide meaning of “Registrar”.
According to O. 1 r. 4(1) of the RC, “bailiff” includes the “Registrar,
any clerk or other officer of the court charged with performing the duties
D
of a bailiff”.
The words in Form 84 require the sheriff and bailiff to “cause to be
levied and made out of the property liable to be seized under a writ of
seizure and sale which shall be identified by or on behalf of (name of
execution creditor) as belonging to (name of execution debtor)”. It is E
clear from Form 84 that the sheriff and bailiff can only lawfully seize
and sell movable property pursuant to a WSS when the movable
property belongs in equity to the EDr. Accordingly, the main issue
(stated in the above para. 1) has to be resolved as follows: if movable
property belongs in equity to a third party, the sheriff and bailiff cannot
F
lawfully seize and sell the movable property under the WSS;
(ii) if the sheriff and bailiff can lawfully seize and sell movable asset in the
possession of EDr which belongs in equity to a third party under the
WSS, such a legal position is contrary to the wording of Form 84 read
with O. 1 r. 7 and O. 45 r. 12(1) of the RC. It is decided in KTL Sdn G
Bhd & Anor v. Leong Oow Lai & Another Case [2014] 1 LNS 427; [2014]
MLJU 1405, at [95(b)(iv)), as follows:
[95] …
(b) …
H
(iv) Order 1 rule 7 RC allows variation to a form in Appendix A to RC
(Appendix A) as the circumstances of the particular case require but Order 1 rule
7 RC does not allow a party to use a form contrary to its purpose - Brandon
J’s (as his Lordship then was) judgment in the English High Court case of The
Cap Bon [1967] 1 Lloyd’s Rep 543. I hold that a party cannot use a form in
Appendix A contrary to the express wording in that form. I
(emphasis added)
 Tenaga Nasional Bhd v. Transformer Repairs
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A (iii) the above answer to the main issue is supported by the following cases:
(a) Ong Hock Thye FJ (as he then was) has decided as follows in
Lim Ker, at p. 255:
The simple reason is that a judgment creditor can levy execution only
B on property belonging to the debtor or appearing to belong to him by
reason of being in his apparent possession, not, certainly, on property
belonging to any third party at the creditor’s mere whim and fancy.
(emphasis added)
(ii) in Ng Boo Bee v. Khaw Joo Choe [1921] 1 LNS 8, Sproule J decided as
follows in the Supreme Court (SC) of the straits settlements (SS):
C
I think it is very clear that only such beneficial interest as a judgment debtor
possesses can be seized, and that the order of attachment is an assurance affecting
only such beneficial interest in the land. As counsel on both sides agreed tersely
to express it, a judgment creditor may seize only what the debtor can lawfully
sell.
D
...
In the result, there must be a declaration that the land was wrongly seized and
must be released and that the registration of the order of 29th January ought to
be cancelled. The claimants must recover from the plaintiff their costs of the issue.
(emphasis added)
E
The SC of SS was a court of first instance. The judgment creditor in
Ng Boo Bee had appealed against the above judgment of Sproule J to the
CA of SS (CA (SS)). Sproule J’s judgment was affirmed by a 2-1 majority
decision of the CA (SS) (Bucknill CJ and Ebden J were in the majority
F while Earnshaw J dissented). We reproduce below the majority
judgments of Bucknill CJ and Ebden J:
(i) according to Bucknill CJ:
I take it that if it is satisfactorily proved that the property seized did not
belong to the judgment debtor at the time when the writ of seizure was
G registered against the property, that such property must be released, the
order of release automatically setting aside the writ of seizure.
…
No question of priority as between the two assurances could in my
opinion therefore arise until it had been decided that the property seized
H
did at the date of seizure belong to the judgment debtor and that the writ
of seizure was consequently intrinsically good. I am, therefore, satisfied
that on what are admitted facts (and I may here say that there was no
fraud of any kind alleged) the property seized did not at the date of the
registration of the writ of seizure belong to the judgment debtor; the
property must therefore be released and the writ of seizure automatically
I
disappears. The appeal therefore must be dismissed.
(emphasis added)
138 Current Law Journal [2024] 1 CLJ

(ii) Ebden J decided as follows: A

According to Eyre v. Macdowell the writ (of seizure and sale) operates
only on the beneficial interest of the debtor, and if the debtor has divested
himself entirely of that interest there is nothing left on which the writ can
operate.
B
(emphasis added)
(iii) D&C Bank’s case, at p. 321; and
(iv) in Whitworth v. Gaugain (1846) 41 ER 809, at 810 and 811 to 812,
Lord Cottenham LC gave the following judgment of the English
High Court of Chancery: C

The only question is whether the equitable mortgagee in this case is entitled
to priority over the elegits (writ of execution of judgment) and judgments.
…
A judgment has relation to the time when it is entered up. It will not affect D
any bona fide conveyance made for value before that time, for it only attaches
upon that which is then, or afterwards becomes, the property of the debtor.
But the rule is not confined to that which was his property at law. If it is
charged in equity before the entry of the judgment, the judgment will not affect
such charge. It can only attach upon the interest which remains in the debtor,
viz., the legal estate subject to the equitable charge. Upon a judgment obtained E
against a mere trustee a Court of Equity would never permit the trust property
to be applied in satisfaction of the judgment; and for the same reason, if the
property is subject to a trust short of its full value, the judgment can only in
equity affect that which remains after the trust is satisfied, for this alone is
the property of the debtor.
F
... Many other similar cases might be stated shewing that, as well
in the instance not merely of express trusts, but of trusts in the view
of a Court of Equity, the judgment creditor can take only what remains in
the trustee after satisfying the trusts with which the property is charged.
…
G
The same rule holds in the case of an extent against the goods of a debtor
to the Crown; and equitable interests in those goods are respected.
…
In the argument on the part of the defendant, the case was put upon the footing
of a purchaser for value without notice, who would be preferred to a prior H
equitable mortgagee. But a distinction in this respect has always been made
between a judgment obtained without notice of a previous charge and a
purchase or mortgage. In the case already mentioned, of Burgh v. Francis,
judgments had been obtained, but they were not allowed to prevail against
the plaintiff’s equity.” A purchaser without notice of the trust,“ Lord
Nottingham observed, “may be free, but an incumbrance” (speaking of the I
 Tenaga Nasional Bhd v. Transformer Repairs
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A judgments) “is not like a sale.” The learned author of the Forum Romanum
expresses himself to the same effect. “In the case of a judgment creditor,” he
says, “the original security was only personal, and a Court of Equity will
not suffer the person that originally lent upon the security of land to have the
security destroyed by one who did not lend upon that security.

B (emphasis added).
[58] In view of the plaintiff’s equitable ownership (two power
transformers) and the resolution of the main issue (please refer to the above
paras. 55 and 57), the learned HC judge should have decided that the bailiff’s
seizure (two power transformers) and judicial auction (two power
C transformers) are invalid (second appealable error).
[59] In support of Klang HC’s decision, the learned HC judge has relied on
Klang HC’s decision (third defendant’s appeal) (which has decided that the
execution of the WSS and judicial auction was lawful). However, the plaintiff
was not a party in the first defendant’s two setting aside applications (Klang
D SC) and Klang HC’s decision (third defendant’s appeal). Accordingly, the
plaintiff was not given a right to be heard regarding the plaintiff’s equitable
ownership (two power transformers) in the first defendant’s two setting aside
applications (Klang SC) and Klang HC’s decision (third defendant’s appeal).
Our highest courts have decided that a decision, judgment and order
E
(decision/judgment/order) does not bind a party if the party has been
deprived of his or her right to be heard before the decision/judgment/order
is made:
(i) the judgment of Mohd Azmi SCJ in the SC case of Toh Seow Ngan
F & Ors v. Toh Seak Keng & Ors [1990] 2 CLJ 15; [1990] 1 CLJ (Rep) 286
[1990] 2 MLJ 303, at 306; and
(ii) Edgar Joseph Jr FCJ’s decision in the FC in Muniandy Thamba Kaundan
& Anor v. Development & Commercial Bank Berhad & Anor [1996] 2 CLJ
586; [1996] 1 MLJ 374, at 381 to 382 and 383.
G
Based on the above reason, we have no hesitation to decide that the learned
HC judge’s reliance on Klang HC’s decision (third defendant’s appeal) to
support the Klang HC’s decision, constitutes an error of law (third appealable
error).

H I. Is Plaintiff Barred By Alleged Plaintiff’s Inaction, Laches, Acquiescence,

Waiver, Estoppel And/Or Abandonment?
I(1) Did Plaintiff Have Knowledge Of All Relevant Facts?
[60] We are of the view that before the court decides that a party (Z) is
barred from filing a suit or advancing a certain legal position in a dispute due
I
to Z’s omission, inordinate delay, laches, acquiescence, waiver, estoppel and/
or abandonment, the court should consider the following three matters:
140 Current Law Journal [2024] 1 CLJ

(i) whether Z has actual knowledge of all the relevant facts of the case in A
question (relevant facts);
(ii) has Z wilfully shut Z’s eyes to relevant facts which are obvious (wilful
blindness)? cases have referred to wilful blindness as “Nelsonian
knowledge”, “Wilful ignorance” and “contrived ignorance”; and
B
(iii) if Z has actual knowledge of the relevant facts or is wilfully blind to the
same on a certain date (relevant date), Z’s conduct from the relevant date
should then be considered by the court.
[61] The relevant facts in this case are as follows (in chronological order):
C
(i) sale of the land to the second defendant by a public auction;
(ii) tenancy agreement (first defendant-second defendant);
(iii) Zanwa’s winding-up;
(iv) second defendant’s suit (Klang SC); D
(v) second defendant’s summary judgment (Klang SC);
(vi) second defendant had obtained WSS from Klang SC;
(vii) bailiff’s seizure (two power transformers); and
E
(viii) judicial auction (two power transformers).
[62] Until Zanwa’s letter (9 June 2020), Zanwa had concealed the
following relevant facts from the plaintiff:
(i) sale of the land to the second defendant by way of public auction;
F
(ii) tenancy agreement (first defendant-second defendant);
(iii) Zanwa’s winding-up; and
(iv) judicial auction (two power transformers)
(Zanwa’s concealment). G
[63] In addition to Zanwa’s concealment, Zanwa had also deceived the
plaintiff (Zanwa’s deception). The following documentary evidence proves
Zanwa’s deception:
(i) the land had been sold to the second defendant by public auction and
H
yet, Zanwa’s letter (14 August 2019) and Zanwa’s letter (9 June 2020)
did not state such a material fact. There is a vast difference between a
sale of immovable property by its owner in “open market” and a sale
of the immovable property by way of a public auction (forced sale).
When a person’s land is sold by way of public auction, this means the
owner of the auctioned land is facing financial difficulties wherefore his I
land has to be auctioned;
 Tenaga Nasional Bhd v. Transformer Repairs
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A (ii) Zanwa’s letter (11 July 2019) informed the plaintiff that Zanwa’s
operations stopped “temporarily” due to Zanwa’s financial problems.
Such a statement was less than honest because Zanwa had been wound
up by the winding up court and its liquidator had also been appointed
by the winding up court.
B
Upon Zanwa’s winding up, only Zanwa’s liquidator (not Zanwa’s
directors, employees, agents and any other person) has the power under
s. 486(1)(a) of the Companies Act 2016 (CA) read with para. (d) in
Part I of the 12th Schedule to the CA (para. (d) (Part I, 12th Schedule))
to send any letter on behalf of Zanwa. We reproduce below s. 486(1)(a)
C of the CA and para. (d) (Part I, 12th Schedule):
486(1) Where a company is being wound up by the Court, the liquidator
may:
(a) without the authority under paragraph (b), exercise any of the general
powers specified in Part I of the Twelfth Schedule; …
D
Paragraph (d) (Part I, 12th Schedule)
The liquidator may:
...

E (d) do all acts and execute in the name and on behalf of the company all
deeds, receipts and other documents and for that purpose use when
necessary, the company’s seal; (emphasis added).
According to s. 516(1) of the CA, when a company is wound up, the
words “in liquidation” shall be added after the name of the company in
F “every” “business letter issued by or on behalf of the company”. If the
liquidator or officer of a wound-up company contravenes s. 516(1) of the
CA, the liquidator or officer would have committed an offence under
s. 516(2) of the CA which is punishable with a maximum fine of
RM10,000. It is to be noted none of Zanwa’s letter (11 July 2019),
Zanwa’s letter (14 August 2019), Zanwa’s letter (26 September 2019),
G
Zanwa’s letter (10 October 2019) and Zanwa’s letter (9 June 2020) (sent
after Zanwa’s winding up on 5 April 2019) complied with s. 516(1) of
the CA by stating that Zanwa was in liquidation;
(iii) Zanwa’s letter (11 July 2019) even proposed to “assign” (should be
H novate) the “balance works” under the contract (plaintiff-Zanwa) to a
third party;
(iv) Zanwa’s email (19 November 2019) merely informed the plaintiff that
Zanwa had stopped operations. Zanwa’s email (19 November 2019) did
not have the candour to inform the plaintiff that Zanwa had been wound
I up by the Kuala Lumpur HC; and
142 Current Law Journal [2024] 1 CLJ

(v) Zanwa’s letter (9 June 2020) stated that there was a “rental dispute” A
between the first and second defendants. Such a statement was
economical with the truth as the second defendant’s summary judgment
(Klang SC) had already been granted!
[64] The first defendant had concealed the following relevant facts from the
B
plaintiff:
(i) tenancy agreement (first defendant-second defendant);
(ii) second defendant’s suit (Klang SC); and
(iii) second defendant’s summary judgment (Klang SC)
C
(first defendant’s concealment).
[65] We are of the view that the learned HC judge has made a plain error
of fact when His Lordship did not consider the following pertinent matters:
(i) due to Zanwa’s concealment, Zanwa’s deception and first defendant’s D
concealment, the plaintiff could not have actual knowledge of all the
relevant facts of this case;
(ii) there was no evidence in this case to prove that the plaintiff was wilfully
blind to the relevant facts which were obvious; and
E
(iii) the plaintiff was entitled to insist that Zanwa performed all obligations
under the contract (plaintiff-Zanwa), especially when the plaintiff’s
payment (Zanwa) had already been made;
(fourth appealable error).
[66] We have not overlooked the first defendant’s WhatsApp message F
(10 December 2019) (relied on by the learned HC judge in the GOJ). The
first defendant’s WhatsApp message (10 December 2019) only informed the
plaintiff that the two power transformers had been seized and did not disclose
all the relevant facts to the plaintiff which would disabuse the plaintiff from
the plaintiff’s erroneous impression of the then situation regarding the two G
power transformers (caused by Zanwa’s concealment, Zanwa’s deception
and first defendant’s concealment).
[67] In view of Zanwa’s concealment, Zanwa’s deception and first
defendant’s concealment, the learned HC judge should not have relied on the
alleged plaintiff’s inaction. Consequently, the learned HC judge erred in law H
and fact by deciding that this amended OS was barred by laches,
acquiescence, waiver, estoppel and/or abandonment (fifth appealable error).
I(2) Whether Second Defendant Could Rely On Equitable Estoppel Doctrine
[68] With regard to the application of the equitable estoppel doctrine, by I
way of Puan Wan’s affidavit the second defendant had been expressly
informed of the plaintiff’s equitable ownership (two power transformers)
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 143

A before the judicial auction (two power transformers). The second defendant
did not however inquire from the plaintiff regarding the ownership of the two
power transformers. Worse still, the second defendant proceeded with the
judicial auction (two power transformers). Due to such an inequitable
conduct on the part of the second defendant (second defendant’s inequitable
B conduct), the learned HC judge should not have applied the equitable
estoppel doctrine in this case (sixth appealable error).
I(3) Plaintiff’s Efforts To Recover Two Power Transformers
[69] After the plaintiff had been informed of the judicial auction (two
C
power transformers) by way of Zanwa’s letter (9 June 2020), the plaintiff had
taken the following action over a period of less than two months (before filing
this OS on 6 August 2020):
(i) the plaintiff had sent letters dated 17 June 2020 to the first defendant’s
solicitors and second defendant’s solicitors which, among others,
D demanded for the return of two power transformers;
(ii) time had to be taken to consider and appoint the plaintiff’s solicitors to
act in this case; and
(iii) the plaintiff’s solicitors had to:
E (a) conduct file searches to ascertain the latest status of legal
proceedings in second defendant’s suit (Klang SC);
(b) gather evidence in support of this amended OS; and
(c) draft the cause papers in this amended OS
F (plaintiff’s efforts).
The learned HC judge should have taken into account the plaintiff’s efforts
in deciding whether the plaintiff was barred by laches, acquiescence, waiver,
estoppel and/or abandonment (seventh appealable error). In the HC case of
Ling Tiew Hoe v. Public Finance Bhd [1997] 1 LNS 316; [1997] MLJU 256,
G
Tee Ah Sing J (as he then was) held that a period of five months for a
registered co-proprietor of one-fifth undivided share in land (interest (land))
to apply to court to set aside the sale of the interest (land) by public auction
to a purchaser (on the ground that the co-proprietor had not been given notice
of the public auction), was not a bar for the court to set aside the sale and
H subsequent registration of the interest (land) in favour of the purchaser.
J. Could Plaintiff Have Filed Interpleader Proceedings In This Case?
[70] According to the HC’s judgment, the plaintiff should have filed
interpleader proceedings. With respect, this constitutes an error of law on the
I part of the learned HC judge (eighth appealable error). Our reasons are as
follows:
144 Current Law Journal [2024] 1 CLJ

(i) O. 17 rr. 1(1) and 5(1) of the RC state as follows: A

O. 17 r. 1 Entitlement to relief by way of interpleader

(1) Where:
(a) a person is under a liability in respect of a debt or in respect of
any money, goods or chattels and he is, or expects to be, sued B
for or in respect of that debt or money or those goods or
chattels by two or more persons making adverse claims thereto;
or
(b) a claim is made to any money, goods or chattels taken or intended to be
taken by the Sheriff in execution under any process, or to the proceeds or C
value of any such goods or chattels, by a person other than the person
against whom the process is issued,
the person under liability or, subject to rule 2, the Sheriff may apply to the Court
for relief by way of interpleader.
… D
O. 17 r. 5 Powers of Court hearing originating summons or notice of application
(1) Where on the hearing of the originating summons or a notice of application
under this Order all persons making the adverse claims to the subject matter
in dispute (“claimants”) appear, the Court may order:
E
(a) that any claimant be made a defendant in any action pending
with respect to the subject matter in dispute in substitution for
or in addition to the applicant for relief under this Order; or
(b) that an issue between the claimants be stated and tried and may direct
which of the claimants is to be plaintiff and which is to be
defendant. F
(emphasis added).
The nature and scope of interpleader proceedings have been explained by the
FC in the following judgment delivered by Ahmad Maarop FCJ (as he then
was) in Tetuan Teh Kim Teh, Salina & Co v. Tan Kau Tiah & Anor [2013]
G
5 CLJ 161, at [32], [34], [36] and [49]:
[32] In our view, the search for the answer to the leave question inevitably involves
the consideration of the nature and object of the interpleader proceedings. Appreciation
of the nature, object and purpose of the interpleader provisions would certainly assist
in the determination of the court’s jurisdiction in interpleader proceedings. The
provisions relating to interpleader proceedings are housed in O. 17 of the RHC. It H
is based on English practice. Order 17 r. 1 of the RHC which embodies the essence
of interpleader application was taken from O. 17 r. 1 of the Rules of the Supreme
Court 1965. …
…
I
 Tenaga Nasional Bhd v. Transformer Repairs
[2024] 1 CLJ & Services Sdn Bhd & Ors 145

A [34] Order 17 r. 1(a) of the RHC is the provision for what is known as stakeholder’s
interpleader. Under this provision a person who holds any money, goods or chattels
which he does not claim, or is under liability for a debt and he expects to be sued
in respect of that money, goods or chattels by two or more persons, that person can
protect himself from an action and the costs of such an action by calling on these
claimants to interplead, in other words, to claim against one another, so that the court
B can decide to whom the money, goods or chattels belong. (Mallal’s Supreme Court
Practice, second edn, vol. 1, 1983). The nature of an interpleader is lucidly
explained in De La Rue v. Hernu, Peron & Stockwell, Ltd. De La Rue, claimant
[1936] 2 All ER 411 ...
…
C
[36] Apply the interpleader principles enunciated in De La Rue to the present appeal.
In applying for the interpleader relief, the plaintiff was not bringing an action or
making a claim against the first or the second defendants. In the face of what it took
to be countervailing claims by the first and the second defendants, the plaintiff filed
the interpleader summons seeking assistance from the court – to get relief from the
D court and get it decided to whom it should account for the 18 document of titles.
…
[49] … However, as we have explained elsewhere in this judgment, in applying for
interpleader summons, the plaintiff was not bringing an action or making a claim
against the second or the first defendants. If there was no claim how could there be
E a counterclaim? More importantly, as we have said, an interpleader summons is a
type of originating summons excepted under O. 28 r. 1 of the RHC from the
originating summons procedure under O. 28 of the RHC. The plaintiff came to the
High Court seeking for interpleader relief, seeking decision of the court as to whom
he should account for the 18 documents of title. All that the court had to determine
was whether or not it was necessary, for the purpose of assisting by means of
F interpleader, to make an order which would enable the plaintiff to know to whom
he had to account for the documents of titles (applying De La Rue). For this purpose
the interpleader summons called upon the first and the second defendants to come
out and state their claims so that the court could decide to whom the plaintiff should
account for the documents of titles. …”
(emphasis added)
G
(ii) in this amended OS, the plaintiff is not merely applying for the return
of the two power transformers but the plaintiff has also claimed damages
from the defendants based on the following three causes of action:
(a) tort of conversion and tort of negligence against the first and second
H defendants; and
(b) the third defendant had been unjustly enriched with regard to the
two power transformers
(plaintiff’s three causes of action).
I
146 Current Law Journal [2024] 1 CLJ

Premised on Tetuan Teh Kim Teh, Salina & Co, the plaintiff could not have A
filed interpleader proceedings in the second defendant’s suit (Klang SC)
because the plaintiff’s three causes of action have to be decided in a fresh
action (as in this amended OS).
K. Whether Court Can Order Return Of Two Power Transformers To
B
Plaintiff
[71] Section 9 of the SRA provides as follows:
s 9 Recovery of specific movable property.
A person entitled to the possession of specific movable property may recover the same
in the manner prescribed by the law relating to civil procedure. C
(emphasis added)
[72] Upon proof of the plaintiff’s equitable ownership (two power
transformers), we are of the view that the learned HC judge should have made
a restitution order under s. 9 of the SRA, ie, an order for the return of the
D
two power transformers to the plaintiff (nineth appealable error). In D&C
Bank’s case, at pp. 318 and 321, the HC had ordered the return of movable
properties to their rightful owner when these movable properties in the
possession of EDr had been wrongfully seized by the ECr.
[73] Section 9 of the SRA provides for a statutory remedy. Accordingly, E
the plaintiff is not required to prove the plaintiff’s three causes of action as
a condition precedent for the HC to make a restitution order.
[74] As explained in the above paras. 55, 57 and 58, the bailiff’s seizure
(two power transformers) and judicial auction (two power transformers) are
invalid. Consequently: F
(i) the third defendant could not have obtained any legal or equitable
ownership of the two power transformers; and
(ii) the restitution order should have been made in this case notwithstanding
the fact that the third defendant was a bona fide purchaser of the two
G
power transformers for valuable consideration without any actual notice
of the plaintiff’s equitable ownership (two power transformers).
L. Should Plaintiff Have Joined Zanwa As A Co-defendant In Amended
OS?
[75] We reproduce below O. 1A, O. 2 r. 1(2), O. 15 r. 6(1), (2)(b)(i) and H
(ii) of the RC:
O. 1A In administering these Rules, the Court or a Judge shall have regard to the
overriding interest of justice and not only to the technical non-compliance with these
Rules.
I
O. 2 r. 1(2) These Rules are a procedural code and subject to the overriding objective
of enabling the Court to deal with cases justly. The parties are required to assist the
Court to achieve this overriding objective.
 Tenaga Nasional Bhd v. Transformer Repairs
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A O. 15 r. 6(1) A cause or matter shall not be defeated by reason of the misjoinder

or non-joinder of any party, and the Court may in any cause or matter determine
the issues or questions in dispute so far as they affect the rights and interests of the
persons who are parties to the cause or matter.
r. 6(2) Subject to this rule, at any stage of the proceedings in any cause or matter,
B the Court may on such terms as it thinks just and either of its own motion or on
application:
...
(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
C
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
D 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 matter.
(emphasis added)
[76] According to the learned HC judge, the plaintiff should have cited
E Zanwa as a co-defendant in this amended OS. With respect, we are of the
view that the Klang HC has erred in this respect (tenth appealable error). Our
decision is premised on the following evidence and reasons:
(i) as explained in the above para. 55, the plaintiff is the beneficial owner
of the two power transformers. There is therefore no reason for the
F plaintiff to cite Zanwa as a co-defendant in this amended OS;
(ii) even if Zanwa had applied to the Klang HC to be joined as a
co-defendant in this amended OS, such an application should not be
allowed by the learned HC judge because in view of proof of the
plaintiff’s equitable ownership (two power transformers):
G
(a) it was not necessary to join Zanwa under O. 15 r. 6(2)(b)(i) of the
RC as a party so as to ensure that all matters in dispute in the
amended OS could be completely determined; and
(b) with regard to the relief claimed by the plaintiff in this amended OS,
H Zanwa could not rely on O. 15 r. 6(2)(b)(ii) of the RC as there did
not exist any question between Zanwa and any party in this
amended OS for which it would be just and convenient for the Klang
HC to determine that question:
(i) between Zanwa and all the parties in this case; and
I
(ii) between the parties in the amended OS; and
148 Current Law Journal [2024] 1 CLJ

(iii) O. 1A and O. 2 r. 1(2) of the RC require the court to apply RC with A

regard to the “overriding interest of justice and not only to the technical
non-compliance with” RC. According to O. 15 r. 6(1) of the RC, this
amended OS “shall not be defeated by reason of the … non-joinder” of
Zanwa and the Klang HC may determine the issues in dispute so far as
they affect the rights and interests of all the parties in this case. B

M. Should Klang HC Grant Declarations Under Section 41 Of The SRA?

[77] Section 41 of the SRA states as follows:
s 41 SRA Discretion of court as to declaration of status or right
C
Any person entitled to any legal character, or to any right as to any property, may
institute a suit against any person denying, or interested to deny, his title to the
character or right, and the court may in its discretion make therein a declaration that
he is so entitled, and the plaintiff need not in that suit ask for any further relief:
Provided that no court shall make any such declaration where the plaintiff,
being able to seek further relief than a mere declaration or title, omits to do D
so. (emphasis added)
[78] The learned HC judge had refused to exercise His Lordship’s
discretion under s. 41 of the SRA to make declarations in the plaintiff’s
favour due to the following reasons:
E
(i) the existence of the alleged plaintiff’s inaction which led to the HC’s
application of laches, acquiescence, waiver, estoppel and/or
abandonment in this case; and
(ii) the proviso to s. 41 of the SRA barred the plaintiff’s application for
declarations. This was because the plaintiff could have filed interpleader F
proceedings in the second defendant’s suit (Klang SC) (and claimed for
the return of the two power transformers) but the plaintiff had failed to
do so.
[79] We are mindful that as a general rule, an appellate court should not
intervene regarding the exercise of a judicial discretion by the court of first G
instance. Having said that, an appellate panel may set aside the lower court’s
exercise of discretion if, among others:
(i) the exercise of discretion is based on an error of law or if the court of
first instance has taken into account an irrelevant consideration; and
H
(ii) the error of law or the court’s consideration of an irrelevant matter has
led to an injustice which warrants appellate intervention
- please refer to the judgment of Abdull Hamid Embong FCJ in the FC
in Dato’ Seri Anwar Ibrahim v. PP [2010] 4 CLJ 265; [2010] 2 MLJ 312,
at [48]. I
 Tenaga Nasional Bhd v. Transformer Repairs
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A We are of the view that the learned HC judge has erroneously exercised
His Lordship’s discretion pursuant to s. 41 of the SRA (11th appealable
error) because:
(a) as explained in the above parts I(1) to I(3), the alleged plaintiff’s inaction
did not exist. Accordingly, there is no room for the Klang HC to rely
B
on laches, acquiescence, waiver, estoppel and/or abandonment in this
case;
(b) the learned HC judge has committed an error of law in deciding that the
plaintiff should have filed interpleader proceedings in the second
C
defendant’s suit (Klang SC) – please refer to the above Part J; and
(c) proviso to s. 41 of the SRA only applies when a party merely applies
for a declaratory order and nothing else. In addition to an application
for declarations, this amended OS had also sought for the return of the
two power transformers and damages for the plaintiff’s three causes of
D action. In other words, the proviso to s. 41 of the SRA cannot bar the
court’s grant of declarations in this amended OS.
N. Should Court Allow Plaintiff’s Three Causes Of Action?
N(1) Whether First And Second Defendants Are Liable For Tort Of Negligence To
Plaintiff
E
[80] We have no hesitation to decide that the first defendant is not liable
to the plaintiff for the tort of negligence. This decision is supported by the
following evidence and reasons:
(i) premised on the FC’s judgment delivered by Zainun Ali FCJ in Lok Kok
F Beng & Ors v. Loh Chiak Eong & Anor [2015] 7 CLJ 1008, the first
defendant owed a duty of care to the plaintiff with regard to the two
power transformers (first defendant’s duty of care (two power
transformers)). The first defendant’s duty of care (two power
transformers) arose because the first defendant had voluntarily assumed
G responsibility for the two power transformers on the land;
(ii) there was no breach of the first defendant’s duty of care (two power
transformers) because the first defendant had requested the plaintiff to
collect the two power transformers on the land in:

H (a) first defendant’s WhatsApp message (3 October 2019); and

(b) first defendant’s WhatsApp message (10 December 2019); and
(iii) even if it was assumed that the first defendant’s duty of care (two power
transformers) had been breached, the plaintiff did not suffer any loss
because Zanwa had failed to complete the contract (plaintiff-Zanwa) and
I
the plaintiff could not have used the two power transformers in any
event. Furthermore, in accordance with the general principle of restitutio
150 Current Law Journal [2024] 1 CLJ

in integrum, the restitution order made by this court (please refer to the A
above paras. 72 to 74) would have placed the plaintiff in the same
position as the plaintiff would have been in if the tort of negligence had
not been committed by the first defendant.
[81] It is our decision that the second defendant could not be liable to the
B
plaintiff for the tort of negligence as the second defendant owed no duty of
care to the plaintiff in respect of the two power transformers. This was
because there was no “sufficient legal proximity” between the plaintiff and
the second defendant with regard to the two power transformers, namely, it
was not reasonably foreseeable that the plaintiff would have suffered the loss
of the two power transformers which would arise from the second C
defendant’s conduct. Nor was there:
(i) physical proximity;
(ii) circumstantial proximity; and
(iii) causal proximity D

between the plaintiff and the second defendant regarding the two power
transformers.
N(1) Were First And Second Defendants Liable To Plaintiff For Tort Of
Conversion? E

[82] The first question to be determined is whether proof of the plaintiff’s

equitable ownership (two power transformers) can confer a right to sue
(conversion) on the plaintiff without the need for the plaintiff to prove a right
to immediate possession (two power transformers). This is a case of first
impression in Malaysia. F

[83] To answer the above issue, we adopt the following judgment of

Mummery LJ in United Kingdom’s CA case of MCC Proceeds Inc v. Lehman
Bros [1998] 4 All ER 675, at 601:
In brief, the position is that an equitable owner had no title at common law to sue G
in conversion, unless he could also show that he had actual possession or an
immediate right to possession of the goods claimed; this substantive rule of law was
not altered by the Supreme Court of Judicature Acts, which were intended to achieve
procedural improvements in the administration of law and equity in all courts, not
to transform equitable interests into legal titles or to sweep away altogether the rules
of the common law, such as the rule that a plaintiff in an action for conversion must H
have possession or a right to immediate possession of the goods.
(emphasis added)
Premised on MCC proceeds, to sustain a claim for the tort of conversion:
(i) the plaintiff cannot rely on the plaintiff’s equitable ownership (two
I
power transformers); and
 Tenaga Nasional Bhd v. Transformer Repairs
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A (ii) the plaintiff is required to prove a right to immediate possession (two

power transformers) when the judicial auction (two power transformers)
was carried out.
[84] We will now consider whether the plaintiff has proven a right to
immediate possession (two power transformers) on the date of the judicial
B
auction (two power transformers).
[85] The learned HC judge had decided that as the plaintiff had no
possession of the two power transformers at the material time, the plaintiff
had no right to immediate possession (two power transformers). With
C
respect, we are unable to agree because at the time of the judicial auction (two
power transformers), the plaintiff had a right to immediate possession (two
power transformers). Such a right is clear from Zanwa’s letter (14 August
2019), Zanwa’s letter (26 September 2019), first defendant’s WhatsApp
message (3 October 2019), Zanwa’s letter (10 October 2019), Zanwa’s email
(19 November 2019) and first defendant’s WhatsApp message (10 December
D
2019) which requested the plaintiff to collect the two power transformers
from the land. Consequently, the plaintiff had the right to sue the first and
second defendants for the tort of conversion regarding the two power
transformers.

E
[86] We unhesitatingly decide that by way of the bailiff’s seizure and
judicial auction (two power transformers), the second defendant had
committed a tort of conversion of the two power transformers against the
plaintiff (the second defendant’s conversion (two power transformers)). As
the first defendant was not involved in the bailiff’s seizure and judicial
auction (two power transformers), the first defendant was not liable to the
F
plaintiff for the tort of conversion in this case.
[87] As explained in the above sub-para. 80(3), notwithstanding the second
defendant’s conversion (two power transformers), this court will not award
any damages to the plaintiff. This is because the plaintiff has not suffered any
loss due to the second defendant’s conversion (two power transformers) as:
G
(i) the plaintiff cannot use the two power transformers; and
(ii) this court grants the restitution order which is an adequate remedy for
the plaintiff in this case.

H N(3) Whether Third Defendant Was Unjustly Enriched With Regard To Two
Power Transformers
[88] According to Azahar Mohamed FCJ (as he then was) in the FC in
Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453; [2015]
2 MLJ 441, at [110], [117] and [118], a plaintiff can rely on the equitable
I doctrine of unjust enrichment against a defendant if the following four
conditions are proven by the plaintiff against the defendant:
(i) the defendant has been enriched;
152 Current Law Journal [2024] 1 CLJ

(ii) the defendant’s enrichment has been gained at the plaintiff’s expense; A

(iii) the defendant’s retention of the benefit is unjust; and

(iv) the defendant has no defence to extinguish or reduce the defendant’s
liability to make restitution to the plaintiff.
[89] In this case, the plaintiff’s unjust enrichment claim against the third B
defendant cannot succeed because the third defendant had not been enriched
in respect of two power transformers. On the contrary, the third defendant
had purchased the two power transformers at the judicial auction (two power
transformers) and paid the sale proceeds (auction) for, among others, the two
power transformers. Furthermore, the third defendant’s loss has been C
incurred and is still being incurred!
N(4) Should Court Allow Plaintiff’s 3 Causes Of A
[90] As explained in the above Parts N(1) to N(3), there is no basis for the
plaintiff’s three causes of action. D
O. Can Second Defendant Rely On Alleged Fraudulent Scheme?
[91] In Pembangunan Maha Murni Sdn Bhd v. Jururus Ladang Sdn Bhd [1985]
1 LNS 122; [1986] 2 MLJ 30, at 31 to 32, Syed Agil Barakbah SCJ has
delivered the following judgment of the SC:
E
Now, the general rule is that all facts in issue and relevant facts must be proved
by evidence. There are, however, two classes of facts which need not be proved, viz.
(a) facts judicially noticed and (b) facts admitted. The exceptions are dealt
with by sections 56, 57 and 58 [EA] under the title “Facts which need not
be proved.” In so far as judicial notice is concerned, the provisions of section 57
subsection (1) makes it mandatory for the Court to take judicial notice of all laws F
and regulations having the force of law, public Acts passed by Parliament, the course
of parliamentary proceedings and other matters that are enumerated in subsection (1)
(a) to (o) of the section. The list however is not exhaustive since it is impossible to
make a really complete list although a long list of facts which the English courts take
judicial notice has been prepared. The important point to note is that section 57 does
not prohibit the courts from taking judicial notice of other facts not mentioned therein. G
The matter which the Court will take judicial notice must be the subject of common
and general knowledge and its existence or operation is accepted by the public without
qualification or contention. The test is that the facts involved must be so sufficiently
notorious that it becomes proper to assume its existence without proof.
(emphasis added)
H
As decided in Pembangunan Maha Murni, the court can only take judicial
notice of the following two categories of matters:
(i) a matter which falls under any one of the paras. in s. 57(1)(a) to (o) of
the EA; and
I
 Tenaga Nasional Bhd v. Transformer Repairs
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A (ii) if a matter is not one which is stated in s. 57(1)(a) to (o) of the EA, the
court may still take judicial notice of the matter if the matter fulfils the
following two conditions cumulatively:
(a) the matter is “subject of common and general knowledge and its
existence or operation is accepted by the public without
B
qualification or contention”; and
(b) the matter “must be so sufficiently notorious” for which the
court may assume the existence of the matter without proof
[two conditions (judicial notice)).
C
[92] Firstly, the court cannot take judicial notice of the alleged fraudulent
scheme because the two conditions (judicial notice) have not been fulfilled
by the second defendant with regard to the alleged fraudulent scheme.
[93] Secondly, there is no evidence adduced by the second defendant in this
D case to prove the alleged fraudulent scheme.
[94] Lastly, even if it is assumed that there was evidence to prove the
alleged fraudulent scheme, the plaintiff was neither party nor privy to the
alleged fraudulent scheme. As such, the alleged fraudulent scheme could not
defeat the plaintiff’s equitable ownership (two power transformers) and this
E appeal. In other words, the Klang HC’s decision cannot be justified on the
alleged fraudulent scheme.
P. How To Compensate Third Defendant’s Loss?
[95] We acknowledge that the third defendant’s loss has occurred due to
F our decision in this appeal. As the second defendant has committed an abuse
of court process regarding the judicial auction (two power transformers), the
third defendant has a right to claim from the second defendant for the third
defendant’s loss based on the tort of abuse of court process – please refer to
the judgment of Gopal Sri Ram JCA (as he then was) in the CA case of
Malaysia Building Society Bhd v. Tan Sri General Ungku Nazaruddin Ungku
G
Mohamed [1998] 2 CLJ 340, at pp. 352-356.
Q. Sui Generis Nature Of This Case
[96] The following facts in this appeal distinguish all the cases relied on by
the HC and learned counsel for the defendants:
H
(i) plaintiff’s equitable ownership (two power transformers);
(ii) Zanwa’s concealment;
(iii) Zanwa’s deception;

I (iv) first defendant’s concealment;

154 Current Law Journal [2024] 1 CLJ

(v) second defendant’s inequitable conduct; and A

(vi) plaintiff’s efforts.

R. Guidelines
[97] We take this opportunity to propose the following guidelines in the
event that there is a claim for a movable property seized by an ECr pursuant B
to a WSS and its subsequent sale by way of a judicial auction (guidelines):
(i) before ECr seizes movable property pursuant to a WSS:
(a) if ECr has actual knowledge that a third party (third party) is the
equitable owner of the movable property, the ECr should not seize C
the movable property under the WSS; and
(b) if ECr has been given notice by EDr, third party or any other party
that a third party is the beneficial owner of the movable property,
the ECr should then inquire in writing from the third party regarding
the equitable ownership of the movable property (ECr’s written D
inquiry (third party)).
If the third party responds to ECr’s written inquiry (third party)
with a claim for the return of the movable property (third party’s
claim (return of movable property)):
E
(1) if ECR accepts the third party’s claim (return of movable
property), the movable property should not be seized pursuant
to the WSS;
(2) if the third party’s claim (return of movable property) is not
accepted by ECr, it may not be prudent for the ECr to seize the F
movable property under the WSS. Instead, the ECr should
notify the sheriff of the third party’s claim (return of movable
property) so as to enable the sheriff to institute interpleader
proceedings in the court which has issued the WSS (execution
court) pursuant to O. 17 r. 1(1)(b) of the RC (a claim is made to G
any money, goods or chattels … or intended to be taken by the Sheriff
in execution under any process) (emphasis added).
The execution court will conduct the interpleader proceedings
and decide on the third party’s claim (return of movable
property) (execution court’s decision). In this respect, the H
execution court should apply the legal and evidential burden as
explained in the above para. 53. Upon the making of the
execution court’s decision, ECr, EDr and/or the third party
may thereafter appeal to a higher court against the execution
court’s decision; and I
 Tenaga Nasional Bhd v. Transformer Repairs
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A (3) if the third party intends to file a claim for damages based
on the tort of conversion of the movable property (third party’s
claim (damages)), in accordance with the FC’s decision in
Tetuan Teh Kim Teh, Salina & Co, the third party has to file a
fresh suit in respect of the third party’s claim (damages) (third
B party’s new suit). When there is a third party’s claim (damages)
and a subsequent third party’s new suit, the interpleader
proceedings is an exercise in futility. If interpleader proceedings
are instituted and completed when there is a third party’s claim
(damages):
C (3)(i) limited judicial resources are not optimally utilised; and
(3)(ii) there will be a waste of costs, time and effort on the
part of all parties
with regard to the interpleader proceedings;
D (ii) after seizure of movable property under a WSS but before the
completion of a judicial auction:
(a) if ECr has actual knowledge that a third party is the equitable owner
of the movable property, the ECr should exclude the movable
property from the judicial auction and return the movable property
E
to the third party; and
(b) if ECr has been given notice by EDr, third party or any other party
that the third party is the beneficial owner of the movable property,
as a matter of prudence, ECr’s written inquiry (third party) should
F have been made;
(c) if a third party’s claim (return of movable property) is made:
(1) if the third party’s claim (return of movable property) is
accepted by ECR, despite the seizure of the movable property
pursuant to WSS, it is advisable for the ECr to return the
G
movable property to the third party; or
(2) if ECr disputes the third party’s claim (return of movable
property), the ECr should not proceed with the judicial auction.
Instead, the ECR should notify the sheriff of the third party’s
H claim (return of movable property) and this will then enable the
sheriff to institute interpleader proceedings in the execution
court. In such a situation, the execution court can decide on the
third party’s claim (return of movable property) and all parties
may thereafter appeal to a higher court against the execution
court’s decision; and
I
156 Current Law Journal [2024] 1 CLJ

(d) when there is a third party’s claim (damages), in anticipation of the A

third party’s new suit, interpleader proceedings should not be
instituted – please refer to the above sub-para. (1)(b)(iii); and
(iii) if movable property has been sold by way of a judicial auction to a
purchaser (purchaser):
B
(a) a third party’s claim (return of movable property) and/or third
party’s claim (damages) can only be resolved by way of a third
party’s new suit (as in this case). Needless to say, ECr, EDr and
purchaser should be cited as co-defendants in the third party’s new
suit; and C
(b) as explained in the above sub-para. (1)(b)(iii), interpleader
proceedings should not have been filed.
[98] An adoption of the guidelines has the following advantages:
(i) if: D
(a) ECr’s written inquiry (third party) is made;
(b) there is a third party’s claim (return of movable property) in reply
to ECr’s written inquiry (third party); and
(c) ECr accepts the third party’s claim (return of movable property) E

that will be the end of the third party’s claim (return of movable
property). In this manner, there will be a saving of:
(a) valuable judicial resources; and
(b) time, effort and expense of all parties; F

(ii) if:
(a) ECr’s written inquiry (third party) has been made;
(b) there is a third party’s claim (return of movable property) in
response to ECr’s written inquiry (third party); and G

(c) ECr does not accept the third party’s claim (return of movable
property)
interpleader proceedings can be expeditiously commenced and the
execution court may then decide on the third party’s claim (return of H
movable property) without any undue delay;
(iii) if there is a third party’s claim (damages) and/or third party’s new suit,
interpleader proceedings should not have been filed and:
(a) this will ensure an optimum use of precious judicial resources; and I
(b) ECrs, EDrs and claimants will not have to waste time, effort and
cost to conduct interpleader proceedings; and
 Tenaga Nasional Bhd v. Transformer Repairs
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A (iv) if ECr’s written inquiry (third party) is made and if the third party is
indeed the equitable owner of movable property, ECr may avoid
liability:
(a) to third party for costs of third party’s successful recovery of
movable property from ECr (as in this case);
B
(b) to third party for damages with regard to ECr’s commission of tort
of conversion by way of ECr’s wrongful seizure and sale of movable
property to the purchaser at the judicial auction; and
(c) to purchaser for damages for ECr’s tort of abuse of court process in
C respect of ECr’s wrongful sale of movable property to the purchaser
at the judicial auction.
S. Outcome Of This Appeal
[99] Premised on the first to 11th appealable errors, this appeal is allowed
D with the following orders:
(i) Klang HC’s decision is set aside;
(ii) the amended OS is allowed as follows:
(a) the following declarations are granted:
E
(1) the plaintiff is the lawful and beneficial owner of the two power
transformers;
(2) the bailiff’s seizure (two power transformers) and judicial
auction (two power transformers) are invalid and void; and
F (3) any interest in the two power transformers obtained by the third
defendant in the judicial auction (two power transformers) is
unlawful and is hereby set aside;
(b) an order for the defendants to return the two power transformers to
the plaintiff within seven days from the date of this court’s order and
G
the cost of this return shall be borne solely by the plaintiff;
(c) the money in the client’s account of the second defendant’s solicitors
(this bank account was held by the second defendant’s solicitors as
trustees for the third defendant’s payment of the sale proceeds
(auction) with regard to the two power transformers) shall be
H
returned forthwith to the third defendant; and
(d) all court fees and commission paid by the third defendant with
regard to the judicial auction (two power transformers) shall be
refunded to the third defendant;
I (iii) subject to allocatur fee, costs of RM30,000 for this appeal and amended
OS shall be paid by the second defendant to the plaintiff; and
158 Current Law Journal [2024] 1 CLJ

(iv) no order as to costs is made against the first and third defendants because A
the first and third defendants were not involved in the bailiff’s seizure
(two power transformers) and judicial auction (two power transformers).
[100] This judgment sends a clear message that any execution creditor who
has been informed that movable property in the possession of an execution
B
debtor may belong in equity to a third party, should inquire from the third
party before seizing and selling the movable property pursuant to a WSS. If
otherwise, such an execution creditor may face adverse legal consequences
if the third party is able to prove the third party’s equitable ownership of the
movable property on a balance of probabilities (as has happened in this case).
C