IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

(COMMERCIAL DIVISION)

[SUIT NO: D3-22-3155-1988 AND

D-3-22-3156-1988]

BETWEEN

MBf LEASING SDN BHD ... PLAINTIFF

AND

ENG POH HONG @ WONG CHOON MING ...DEFENDANT

THE JUDGMENT OF JUDICIAL COMMISSIONER

Y.A. TUAN LEE SWEE SENG

1
Prologue

No order or judgment of the Court can be disregarded with impunity. A

Court of law does not act in vain. There is the sanction of the law which

is reflected in the various modes of execution process that is often levied

on a judgment debtor for a monetary judgment. There is also the

sentence of the law when an order of Court has the effect of compelling

the Defendant to do something or to refrain from doing something; non-

compliance may result in a contempt action leading to a term of

imprisonment or a fine for a deliberate disregard of a Court order.

However when an order of the Court has a limb requiring the Defendant

to specifically perform a ‘put option’ agreement by purchasing some

designated shares from the Plaintiff and the payment of a monetary sum

from the Defendant to the Plaintiff, can the Plaintiff proceed with

contempt in a case where the Defendant is not able to pay the monetary

sum over to the Plaintiff and hence cannot take delivery of the

designated shares?

Parties

The Plaintiff had filed two suits against the Defendant at the Kuala

Lumpur High Court. The first suit is D3-22-3155-98 (1 st Suit) and the

2
second is D3-22-3156-98 (2 nd Suit). It was agreed by the parties that

the decision in the 1 st suit would bind the 2 nd Suit.

The claims of the Plaintiff in the two suits had to do with a ‘put option’

agreement wherein the Plaintiff had been given the option to sell (put)

within a period of time the designated shares in United Chemical

Industries Bhd (UCI shares) to the Defendant at a pre-determined price.

The Defendant failed to pay for the shares. The trial was concluded in

favour of the Plaintiff for both the suits.

In the 1 st Suit the Defendant was ordered to specifically perform the ‘put

option’ agreement by way of purchase of some designated UCI shares

for RM8,852,250.00. In the 2 nd Suit the Defendant was ordered to

specifically perform the ‘put option’ agreement by way of purchase of

some designated UCI shares for RM5,559,000.00.

The Defendant being dissatisfied with the order of the High Court,

appealed to the Court of Appeal but was unsuccessful. Leave to appeal

to the Federal Court was dismissed too.

Around 2005 the judgment of the Court was varied as UCI had

undergone a restructuring such that the UCI shares had been converted

to Majuperak Holdings Berhad’s (MHB) shares.

3
Further around May 2006 the Judgments of the Court was varied such
that payments of both sums in the 2 Judgments shall be within 7 days

from date of service of the Judgments on the Defendant/Respondent.

Problem

The Defendant having failed to comply with the judgment of the Court in

the 2 Suits after the Judgments and Orders had been duly served on the
Defendant and a proper show cause notice had been served on the
Defendant, the Plaintiff proceeded to apply for leave to commit the

Defendant to prison for contempt.

Prayer

Leave was granted by the learned Judicial Commissioner who had the

ex-parte Notice of Motion for Leave.

As the Applicant had difficulty in serving the Notice of Motion for Leave
and the supporting Affidavit as well as the Order of Court granting

Leave, it made an application for substituted service which this Court

granted pursuant to Order 52 r. 3(4) of the Rules of the High Court 1980
(RHC).

The Respondent/Alleged Contemnor applied through his solicitors to set

aside the ex-parte order for leave. The said setting aside applications

4
are Enclosure 132 for the 1 s t Suit and Enclosure 116 for the 2 nd Suit
respectively.

The substantive motions for leave are Enclosures 120 and 106 in the 1 st
and 2 nd Suits respectively.

Principle

The Plaintiff/Applicant contended that the Defendant/Respondent had

failed to comply with the Judgment of the Court ordering the making
payments over to the Plaintiff the sum of over RM14 million and taking

delivery of the purchase of the designated shares.

Learned counsel for the Plaintiff/Applicant, Mr. Kenneth St. James

submitted confidently that Order 45 Rule 5 and 7 of the Rules Of The

High Court, 1980 (RHC) allowed him to apply for contempt against the
Defendant/Respondent:-

“5. (1) Where:-

(a) a p erson r equir ed b y a judg men t or ord er to do

an act within a time specified in the judgment or order
refuses or neglects to do it within that time or, as the

case may be, within that time as extended or abridged

under Order 3, rule 5; or

5
 (b) a person disobeys a judgment or order requiring

him to abstain from doing an act,

then, subject to the provisions of these rules, the judgment or order

may be enforced by one or more of the following means, that is to

say:-

(i) with the leave of the Court, an order of committal;

(ii) where that person is a body corporate, with the

leave of the Court, an order of committal against

any director or other officer of the body;

(iii) s u b je c t t o t h e p r o v i s i o n s o f t h e D e b t o r s A c t ,

1 9 5 7 , a n o r d e r o f c o mmi t t a l a g a i n s t t h a t p e r s o n

o r , wh e r e t h a t p e r s o n i s a b o d y c o r p o r a t e ,

against any such officer.

7. (1) in this rule references to an order shall be

c o n s t r u e d a s i n c l u d i n g r e f e r e n c e s t o a ju d g me n t .

(2) Subject to Order 24, rule 16 (3), Order 26, rule 7

(3), and paragraphs (6) and (7) of this rule, an order

shall not be enforced under rule 5 unless:-

6
 (a) a copy of the order has been served

p e r s o n a l l y o n t h e p e r s o n r e q u ir e d t o d o o r

abstain from doing the act in question; and

(b) i n t h e c a s e o f a n o r d e r r e q u i r i n g a p e r s on

to do an act, the copy has been so served before

t h e e x p i r a t i o n o f t h e t i me w i t h i n w h i c h h e wa s

required to do the act.

(4) T h e r e mu s t b e i n d o r s e d o n t h e c o p y o f a n o r d e r

served under this rule a notice in Form 87 informing the

person on whom the copy is served:-

(a) in the cas e o f ser vic e und er pa rag raph (2 ) ,

i f he negl ects to ob e y th e o rde r within the ti me

sp eci fied the rein, o r , i f the order is to absta in

f ro m d oing an act , th at if he d isobe ys th e o rde r,

he is liable to process of execution to compel him

to obey it; and...”

The Applicant had satisfied the requirements for leave to be

granted for a contempt proceeding against the Respondent. The

Applicant had:-

7
 1. Filed Statements pursuant to O. 52 r. 2(2) RHC and the Affidavit

verifying the facts;

2. Shown that the Defendant had failed, refused or neglected to

obey the terms of the Judgment;

3. Endorsed a Penal Notice on the Judgment;

4. Shown that the Judgment and Orders had been served on the

Defendant and

5. Affidavit of Service of the Judgment and Orders had been

affirmed and filed.

The rationale for and the rigours of the Court to punish for contempt are

captured in the dicta from the cases referred to below. Brown, J, said In

Re H. E. Kingdon v. S.C. Goho, [1948] 14 MLJ 17 at page 18 as

follows:-

“‘Contempt of court’ covers a wide range of omissions and

commissions, from the failure to obey a judgment or order of the

Court to what Lord Hardwicke in In Re Read and Ruggonson

[1742] 2 ATK 291 at p. 469 described as ‘scandalizing the Court

itself’. The former is an example of what is known as ordinary

contempt. The latter is Special Contempt.....

8
 But the root principle on which this inherent power to punish for

contempt is founded, and the purpose for which it must be

exercised, is not to vindicate the dignity of the individual judge or

other judicial officer of a Court or even of the Court itself, but to

prevent an undue interference with the administration of justice in

the public interest.....”

His Lordship Abdul Hamid Omar, LP, in Wee Choo Keong v. MBF

Holdings Bhd & Anor and another appeal, [1993] 2 MLJ 217 at pages

220, 221 and 222 observed as follows:-

“Obedience to court order

It is established law that a person against whom an order of court

has been issued is duty bound to obey that order until it is set

aside. It is not open for him to decide for himself whether the

order was wrongly issued and therefore does not require

obedience. His duty is one of obedience until such time as the

order may be set aside or varied. Any person who fails to obey

an order of court runs the risk of being held in contempt with all

its attendant consequences.

It has not been seriously disputed and indeed we find that it is

also an established general rule of law that a party in contempt

cannot be heard further in the same proceedings for his own

9
benefit unless and until he has purged his contempt. The

question which we have to determine in these appeals is the

ambit of that general rule.....

Prim a facie case for contempt

In the appeals before us, leave to issue committal proceedings

has been granted. This means that the learned High Court judge

has accepted that there was a prima facie case for contempt

against the appellants. It may well be that on the hearing of the

motion proper, the appellants will be acquitted of any charge of

contempt. However, for purposes of the present appeals, the

allegations of contempt are supported by the order for leave. In

Instituo Bancario San Paolo Di Torina SPA (Civil Suit No: D5-22-

1410-92 unreported), there appears to have only been an

allegation of contempt without any more. Here, there is a finding

of prima facie contempt which cannot be ignored. In this context,

we are more inclined to accept the view expressed by Young J in

Young v. Jackman [1986] 7 NSWLR 97 where he said:

‘Accordingly, it would seem from 1820 onwards that the rule that

a person will not be heard when he is guilty of contempt

extended as well to the case where a party was considered to be

in contempt, that is, where his contempt had prima facie been

10
 demonstrated to the court or alternatively when he had
confessed the facts which were the subject of a charge of

contempt.’ (Emphasis added.)”

The powers of the Courts to punish for contempt is further buttressed

constitutionally under Article 126 of the Federal Constitution which

states that ‘The Federal Court, the Court of Appeal and the High Court
shall have power to punish any contempt of itself’. Section 13 of the
Courts of Judicature Act 1964 further empowers the Courts to deal

with contempt and the enabling rules are found in O. 52 RHC.

Learned counsel for the Respondent Miss Haryaty Ibrahim, submitted

both vigorously and vehemently, that the Respondent should not be

found guilty of contempt and certainly not to be committed to prison for

what she said is her client’s impecuniosity and inability to come up with
the means and resources to pay some RM14 million to the Applicant

and then to have the designated shares registered in his name.

Miss Haryaty submitted strenuously that the judgment of the Court,

though consisting of 2 limbs of the purchase of the designated shares

and the payment of the purchase price for those shares, is essentially,
in substance and strictly speaking, a payment of a monetary sum and
not so much a judgment requiring the Defendant to solely and simply

do a specific act which here is the purchase of the designated shares.

11
She could find no better authority to support her contention than to

refer to the Court of Appeal case of Hong Leong Bank Berhad v.

Pung Tze Thiam [2008] 4 CLJ 742. In that case the Respondent had

won in the High Court an order of reinstatement to his previous

employment and that the Appellant was to pay back wages amounting

to RM618,322.97 to him. Later the Court of Appeal allowed the

Appellant’s appeal against the order of reinstatement and ordered the

Respondent to refund the sum paid to him, less the sum of

RM130,000.00 paid to the Emplyees Provident Fund, within 30 days of

the Court’s order. The Respondent did not comply with the order of

Court for the refund and so the Appellant moved the Court of Appeal

for leave to proceed with a contempt action against the Respondent.

Having disposed of the first point which is that the proper forum for

leave is the High Court and not the Court of Appeal, his Lordship

Gopal Sri Ram JCA (as he was then) said at page 746 - 747 the

following:-

“Th e se cond point we mak e has to do with th e choi ce o f

th e enfo rce me nt r e med y. C an the app ell ant enfo rce the

order of this court directing the refund by way of committal

p roce edings? In an swer ing th is que stion , we must be ar in

mind that it is only an order that requires a party to do or

12
r e f r a i n f r o m d o i n g a n a c t t h a t ma y b e e n f o r c e d b y

committal for contempt. That much is clear from the terms

of RHC O. 45 r. 5 which provides as follows:-

Now, in Re Oddy, Major v. Harness [1906] 1 CH 3 it was

held by the English Court of Appeal that “an order to

recover money is not an order on the defendants to do

a n yt h i n g , a n d t h e r e f o r e t h a t s u c h o r d e r c o u l d n o t b e

e n f o r c e d e i t h e r b y a s u p p l e me n t a r y o r d e r f o r t h e p a yme n t

o f t h e mo n e y w i t h i n a f i x e d t i me o r b y a t t a c h me n t ” , p e r

L u x mo o r e J i n I b e r i a n T r u s t , L t d v . Fo u n d e r s T r u s t a n d

I n v e s t m e n t C o , L t d [ 1 9 3 2 ] 2 KB 8 7 . Th e o r d e r o f 2 5 Ap r i l

2007 in essence required the respondent to re-pay a part

of the sum that had been paid to him by the appellant. In

p o i n t o f f o r m, i t ma y a p p e a r t o b e a n o r d e r r e q ui r i n g t h e

r e s p o n d e n t t o d o a n a c t , n a me l y t o r e f u n d t h e mo n e y. B u t

a c o u r t i s c o n c e r n e d wi t h s u b s t an c e o f t h e o r d e r u n d e r

c o n s i d e r a t i o n h e r e i s t h a t i t i s a mo n e y j u d g me n t a n d n o t

a ju d g me n t r e q u i r i n g t h e p e r f o r m a n c e o f a n a c t . We mu st

t h e r e f o r e a n s we r t h e q u e s t i o n w e p o s e d i n p a r a 4 o f t h i s

j u d g me n t i n t h e n e g a t i v e . Th a t i s t o s a y, t h e o r d e r o f t h i s

c o u r t d a t e d 2 5 Ap r i l 2 0 0 7 c a n n o t b e e n f o r c e d b y me a n s o f

13
 c o m mi t t a l p r o c e e d i n g s . B u t t h a t i s n o t t o s a y t h a t t h e

a p p e l l a n t b a n k i s n o t wi t h o u t r e me d y. I t ma y e n f o r c e t he

s a i d o r d e r i n t h e u s u a l wa y i n wh i c h mo n e y ju d g me n t s a r e

enforced.”

I would say that there is a case more on point across the causeway in

the Singapore case of P J Holdings Inc v. Ariel Singapore Pte Ltd

[2009] 3 SLR 582 where the plaintiff company had obtained an order

for specific performance against the defendant company, requiring the

defendant to complete the sale and purchase of shares owned by the

plaintiff in PJ Services Pte Ltd and to pay the plaintiff the sum of S$3m

within one month (the Order). Completion did not take place. The

plaintiff then applied to the High Court for liberty to commence

committal proceedings against Mr. Low Shiong Jin, a director of the

defendant, in respect of the Defendant’s failure to comply with the

Order. Leave was granted and an application was filed by the plaintiff

to commit Mr. Low for contempt. Parties reached an amicable

settlement and when the plaintiff wanted to withdraw the committal

proceedings with liberty to file afresh the Court refused to and only

allowed a withdrawal with no liberty to file afresh.

His Lordship Choo Han Teck J. reasoned as follows:-

14
 “6…..On completion (of the purchase of the shares) part (b)

of the Order (requiring the defendant to pay the plaintiff the

sum of S$3m) effectively creates a judgment debt and a

direction that the debt be paid within one month from 15

August 2008. Are there any reasonable alternatives

av ail able to the pl aintif f that could ass ist in re cover ing the

deb t ap art fro m th e pr esent applic ation? In my v ie w, the

plaintiff ought to have first applied for an examination of the

judgment debtor in order to establish the latter’s assets and

taking matters from there, if an execution could be issued

to collect the debt, then that must first be employed. The

plaintiff did not seek the alternative remedies to enforce a

judgment debt before applying to commit the defendant.

This omission alone was sufficient ground to dismiss its

application.”

The learned counsel for the Respondent further argued that the

Respondent did not ‘refuse or neglect ’ to do the act required of

him to purchase the shares within the meaning of O. 45 r. 5(1)(a) RHC. The

issue was not that the Respondent refused to purchase the shares. If

the Applicant wanted him to sign the relevant forms for the transfer of

the shares he would gladly do it. However, would the Applicant part

15
with the shares and sign as the transferor in the shares transfer form.

Surely not without the payment of the sum of some RM14 million!

Learned counsel for the Applicant argued that this Court must not lose

sight of the fact that the Respondent was required to do an act which

was to purchase the designated shares and have it registered in his

name. Once again at the risk of being repetitious, the issue is not that

he refuses or neglects to do that-the issue is that as stated in his

affidavit, he has neither the means nor the money with which to pay

the Applicant. In short he has no resources or reserves to effect the

transfer of the designated shares to his name.

The meaning of the words “refuse or neglect” also received elucidation

in the PJ Holdings Inc (supra). His Lordship explained:-

“7. What happens then to an impecunious judgment debtor,

a s the de fend ant in th e pr esent ca se dep icts its elf? In my

vi ew, und er su ch c ir cu mst ance s, co mmi t tal p roce edings

should still not issu e. M y r e asons a r e as fo llo ws. Ord er 45

r . 5(1 ) (a) applie s onl y when “a p erson r equired b y a

judgment or order to do an act within a time specified in the

judgment or order refuses or neglects to do it.” [emphasis

add ed ] Th e ke y word s h er e a re “r efu se” and “n egl ect ”. In

Re Quintin Dick [1926] CH 992, Romero J held that the

16
term “refuse or neglect” was not equivalent to “fail or omit”,

and that the former implied a conscious act of volition

whe re as th e latte r did not . In Ng Tai Tuan v . Chng Gi m

Huat Pt e Ltd [1990 ] S LR 903 , Ch ao Hi ck Tin JC ( as he

th en was) exp ress ed th e vi e w tha t th e wo rd “neg lec t ”

ne ces sar il y i mpli es so me ele me nt of faul t. He cit ed the

case of In re London and Paris Banking Corporation [1874]

LR 19 Eq 444 where Sir G Jessel MR said, at 446:-

the word ‘neglected’ is not necessarily equivalent to

the word ‘omitted’. Negligence is a term which is well

k n o wn i n l a w . N e g l i g e n c e i n p a yi n g a d e b t o n

d e ma n d , a s I u n d e r s t a n d , i s o mi t t i n g t o p a y wi t h o u t

r e a s o n a b l e e x c u s e . M e r e o mi s s i o n b y i t s e l f d o e s n o t

a mo u n t t o n e g l i g e n c e .

T h e wo r d “r e f u s e ” h a s a l s o b e e n s i mi l a r l y d e f i n e d . I n DP

V i j a n d r a n v . Ma j l i s Pe g u a m [ 1 9 9 5 ] 2 M LJ 3 9 1 , t h e c o u r t

noted that “[t]he ordinary meaning of the word refuse is to

decline to give”, and that “failure is not synonymous with

refusal”. Similar sentiments were also expressed by the

tribunal in Lowson v. Percy Main & District Social Club &

Institute Ltd [1979] ICR 568. I agree with the foregoing

17
cases. In the premises, this means that an impecunious

debtor would be outside of the scope of O. 45 r. 5 as such a

person cannot be said to have “refused or neglected” to

o b e y a n o r d e r d i r e c t i n g t h e m t o ma k e p a y m e n t . T h e

c o mb i n e d e f f e c t o f t h e f a c t t h a t a n i mp e c u n i o u s d e b t o r i s

outside the scope of committal proceedings and the

principle that such proceedings are remedies of the last

r e s o r t w o u l d m e a n t h a t i n t h e v a s t ma j o r i t y o f c a s e s ,

committal proceedings would not apply to an order or

j u d g me n t f o r t h e p a y m e n t o f mo n i e s . I n m o s t i n s t a n c e s , a

p e r s o n w o u l d o r d i n a r i l y b e r e g a r d e d a s i mp e c u n i o u s i f h e

is un able to s atisf y t he judg me nt deb t upon the conc lusion

o f th e v arious exe cution pro ceedings . Th e logic al ending

point in su ch ca ses should be a winding -up orde r o r a

bank rupt c y o rde r, a s th e cas e ma y b e . I n th e p resen t c ase ,

th e bu rden wa s on the plai ntif f to prov e b eyo nd a

r eas onabl e doubt th at Ariel Singapo re had negl ec ted to

ma k e pa yme nt . Having ex a min ed th e do cume n ta r y

evidence, it was clear that Ariel Singapore, which is now in

liquidation, was in no position to make payment during the

material period.”

18
It is settled law that only a willful disobedience of court order constitutes

contempt and the Plaintiff must prove this beyond reasonable doubt.

See T.O. Thomas v. Asia Fishing Industry Pte Ltd [1977] MLJ 151 at

page 155 where the Federal Court referred to Debabrata

Bandopadhyay & Ors v. The State of West Bengal AIR [1969] SC 189

where Hidayatullah CJ at page 193 observed that:-

“A question whether there is contempt of court or not is

a serious one. The court is both the accuser as well as

the judge of the accusation. It behoves the court to act

with as great circumspection as possible making all

allowances for errors of judgment and difficulties

arising from inveterate practices in courts and tribunals.

It is only when a clear case of contumacious conduct

not explainable otherwise, arises that the conte mner

must be punished…..”

And further:-

“Wilfully, disobeying an order of the court constituted

contempt. This commonly consists in a party’s doing

otherwise than he is enjoined to do, or not doing what

he is commanded or required to do by the process,

o rde r o r de cr ee of th e cou rt: Miller v . Knox [1838 ] 4

19
 B ing NC 574 . The cont e mpt mu st be willful . An orde r

o f cou rt mu st have be en contu ma c iousl y dis reg arded .

It is no good if it is casual, accidental and unintentional.

Fair clough & S ons v . Man chest er Ship Can e Co . (No

2 ) [1897 ] WN7 .”

The above case was recently followed the High Court in the case of

Mediacorp News Pte Ltd & Ors v. Mediabanc (Johor Bahru) Sdn Bhd

& Ors [2011] 5 CLJ 454, at page 456 where his Lordship Azahar

Mohamed J (as he then was) held that:-

“I should note at once that it is settled law that in order to

sustain a conviction in contempt proceedings, the standard

of proof required is one beyond a reasonable doubt.

Therefore, it is incumbent upon the applicants to prove

beyond a reasonable doubt that the person asked to be

committed, namely the proposed contempt parties had

willfully, deliberately disobeying, or disregarding the order of

the court. The authority to support this proposition is to be

found in the judgment of Lee Hun Hoe CJ (Borneo) in TO

Thomas v. Asia Fishing Industry Pte Ltd [1977] 1 LNS 126;

[1977] 1 MLJ 151.”

His Lordship continued further:-

20
 “Most important of all, in Re Bramblevale Ltd [1970] Ch 128

Lord Denning MR said at p. 137:-

A contempt of court is an offence of a criminal

character. A man may be sent to prison for it. It

must be satisfactorily proved. To use the time -

honoured phrase, it must be proved beyond

reasonable doubt.

Further authority for this proposition is found in the Federal Court case of

Tay Seng Keng v. Tay Ek Seng [1978] 1 MLJ 126 which clearly held

that when a person is charged with contempt of court, which is an

offence of criminal nature, his guilt must be proved beyond reasonable

doubt.

The crucial question must be confronted: Was the non-payment of the

judgment sum by the Defendant/Respondent willful? Learned counsel

for the Defendant admitted that the Defendant did not comply with the

Judgment. She submitted with all the emphasis she could command

that her client did not comply not because he does not want to but

because he could not. She reasoned as follows:-

“He did not comply because he does not have the means to

d o s o . T h e D e f e n d a n t h a d t i me a n d a g a i n a s s e r t e d t h a t t h e

21
 reason why he had failed to pay the judgment sum is
b e c a u s e h e d i d n o t h a v e t h e me a n s n o r t h e mo n e y . H e d i d

n o t h a v e t h e me a n s t h e n ( w h e n t h e P l a i n t i f f e x e r c i s e d t h e
put option ag re eme n t & c alled for th e Def endant to bu y the
sh ar es in 1998 ) and h e still does not h ave the me a ns no w.

He re , we a re looking at a ve r y b ig su m o f mo re than RM14

mi l lion . Th ese fac ts ar e not disputed no r ch alleng ed . ”

She recounted to this Court that at the trial that when the Defendant was

called upon to buy the shares he had made various attempts to fulfill his
obligation to buy by arranging for loan, corporate restructure of his
business and so on and so forth but all those attempts did not

materialise because time was bad and hence this suit was initiated
against him.

I agree that the Plaintiff/Applicant must prove beyond reasonable doubt

that the Defendant/Respondent is willfully disobeying the judgment. Miss

Haryaty submitted that that could only be done if the Plaintiff could show
that the Defendant had the means to pay but refused to do so. I agree

with her submission that the argument of the Plaintiff that non-
compliance equals to willful disobedience is grossly erroneous.

There are sufficient authorities for the proposition that an order to pay

money creates a debt. Therefore a person ordered to pay money to

22
another will not be committed to prison for disobedience to such order

without proof of ability to pay. Miss Haryaty’s rigorous research led her

to the case of Buckley v. Crawford [1893] 1 QB 105 where the

headnotes succintly distilled the key facts and ratio of the case as

follows:-

An ord er was mad e in inte rple ade r pro ce edings th at th e

sheriff should sell the goods seized and pay the claimant, the

execution creditor undertaking to make good any deficiency

on sale. There was a deficiency, and the master ordered that

the execution creditor should pay the amount to the claimant.

Default being made in payment, an order was made

committing the execution creditor for contempt of court.

There was no proof that he had means to pay: -

Held: that the case was one of default in payment of a sum

of money, within the meaning of s. 4 of the Debtors Act 1869

(32 & 33 Viet. C. 62), and that an order of commitment could

not be made.

Learned counsel for the Respondent in imploring the Court that her

client should not be committed to prison for contempt rested her case on

the settled principle that contempt proceeding should be taken as a ‘last

resort’. All remedies must be exhausted before invoking the aid of Court

23
to commit a contemnor to prison. She drew the Court’s attention to the

Court of Appeal case of Danchevsky v. Danchevskey [1974] All ER 934

at page 937 where a county court registrar had made an order for the

sale of the former matrimonial home of the divorced parties. The

husband refused to leave the house and neither would he let the house

be sold. The judge made a further order that the husband should vacate

the property by a certain date and that the property was to be sold and

that the husband should do all things necessary towards the sale. The

husband again refused to give any undertaking to do so. The judge then

made an order committing him to prison for not less than 3 months upon

the wife’s application to so commit the husband to prison. On appeal by

the husband the Court of Appeal, Lord Denning MR wrote with

characteristic fluidity and flow at page 937:-

“What then should have been done? The object was to see

that the order of the court was obeyed -that the house was

sold for the benefit of both parties. To achieve this, it was not

necessary to send the man to prison. Whenever there is a

reasonable alternative available instead of committal to

prison, that alternative must be taken. In this case there

was a reasonable alternative available. It was this: to enforce

the order for possession by a warrant for possession, to sell

24
 the house, and to make the conveyance of the property by
means of an instrument to be signed and executed by a third

party on the direction of the court …..

Counsel for the wife submitted that the committal for three
months was done to punish the husband - to punish him for

his disobedience in the past in not giving up possession. I do

not think this is an appropriate case for punishment, certainly
not for imprisonment. The husband was obstinate and

misguided. But he was sincere. The right way of dealing with

the matter was to take steps to enforce the order of the court,
but not to imprison him. That would do no good to him or to

anyone. It would put him out of work and make him unable to
pay maintenance for the children or do anything.” (emphasis
added)

I have set out the wife’s argument in Danchevsky’s case (supra) as Mr.
Kenneth St James seemed to be echoing it in his insistence right to the
end of his submission on the Applicant’s behalf that the Respondent

should be committed to prison for his default in making the payment for
the shares and taking transfer of the shares.

Clearly in the present case the Plaintiff obviously has other options

available to enforce the judgment of the Court. Since the judgment is in

25
substance monetary in nature the Plaintiff can proceed to enforce the

judgment either by Bankruptcy proceeding, Writ of Seizure & Sale or

Judgment Debtor Summons. I agree with the Respondent’s submission

that apart from bankruptcy proceeding that has been withdrawn with

liberty to file afresh, none of the other modes of execution were taken by

the Plaintiff and this is obviously against the established principle.

It would be different altogether if the Respondent had the means to pay

but deliberately refused to do it coupled with the act of repurchase of the

designated shares from the Applicant. In such a case the Applicant may

well proceed for contempt against the Respondent. Such was the case

in Eric Lau Man Hing v. Eramara Jaya Sdn Bhd & Ors [2007] 2 MLJ

578 where the Court at the end of the hearing of a section 181 Petition

under the Companies Act 1965 had ordered in clear, unambiguous,

absolute and unqualified language that the second and third

respondents were to purchase the petitioner’s 30% shareholding in the

company for the sum of RM13,515,527.15 within four days of the service

of the order on them.

His Lordship T. Selventhiranathan J (as he then was) observed at page

586 as follows:-

“The respondents claimed that they had no money or assets

t o p u r c h a s e t h e p e t i t i o n e r ’ s s h a r e s i n t h e c o mp a n y t o g i v e

26
e f f e c t t o t h e o r d e r a n d s wo r e v a r i o u s a f f i d a v i t s s a yi n g s o .

H o w e v e r , t h e p e ti t i o n e r wa s a b l e t o s h o w i n t h e a f f i d a v i t s

filed that the respondents had bank accounts with monies in

them, had monies placed on fixed deposits and were

possessed of properties, thereby putting paid to the

respondents’ contentions claiming otherwise. The

respondents claimed that they had no financial ability to pay

for the shares, yet they were directors and shareholders in a

number of companies.

It was also the finding of this court during the hearing of the

oppression petition (see Eric Lau Man Hing v. Eramara

Jaya Sdn Bhd & Ors [1998] 7 MLJ 528) that large amounts

of monies were easily transferred by the respondents

between themselves, their family members and other related

c o mp a n i e s . Th e y c o u l d n o t t h e r e f o r e s u b s e q u e n t ly a r g u e

t h a t t h e mo n i e s b e l o n g e d t o o t h e r c o mp a n i e s . Ev e n i f t h e

r e s p o n d e n t s we r e u n a b l e t o o r h a d n o me a n s t o p a y f o r t h e

s h a r e s i n t h e c o mp a n y, w h i c h t he y w e r e o r d e r e d t o , t h e

proper course for them to have adopted should have been to

h a v e i n s t r u c t e d t h e i r s o l i c i t o r s o r c o u n s e l t o c o me b a c k t o

27
 t h i s c o u r t t o s e e k a v a r i a t i o n o f t h e o r d e r . Th a t wa s n e v er

done.”

The seriousness with which the Court would view a deliberate and willful

refusal to comply with a Court order which involves the doing of an act

and the payment of a sum of monies when it can be shown that the

Contemnor has the means to make the payments is captured in the

words of his Lordship T. Selventhiranathan J (as he was then) Eric

Lau’s case at page 592-593:-

“The gravity of the offence of the respondents was in failing

to see that the order of the court was obeyed. There are

people who flout orders of the courts as if the orders are of

no consequence. The respondents, to my mind, are withi n

such category of people. It cannot be gainsaid that the

orders of the courts should be obeyed or else there will be a

breakdown in the due administration of justice and there will

be no respect for the law.

It was also clear that the third respondent was the brains

behind the plotting and scheming to diddle the minority

shareholders out of their legitimate rights in the company and

th at th e se cond re spondent lent hims e l f to b ring to f ruition

the third respondent’s machinations in this regard. Although

28
 he could be considered to be the puppet of the third

respondent, nevertheless he also had to bear responsibility

for the breach of the order, albeit to a lesser extent than the

third respondent.

I accordingly sentenced the second and third respondents to

two years’ imprisonment and three years ’ imprisonment

respectively unless they sooner purged their contempt as I

was of the view that such custodial sentences were certainly

merited having regard to the history and circumstances of

this case.”

Kenneth St James was undaunted in his dogged determination on behalf

of his client that the Respondent should be committed to prison for

contempt. He asked for more time to do further research and upon

further submission he referred the Court’s attention to a decision of the

Supreme Court of Victoria in McKinnon v. Adams (No 2) 8603 of

[2001, 2003] VSC 502 where there was an order of Court against Miss

Adams to pay the administrator of a Body Corporate Strata Plan a sum

of $6,000.00 for the 3 units owned by her for the purpose of providing

the administrator with funds to commence his work. All unit owners were

also ordered to deliver to Mr Dunlea the administrator any documents

which any of them may have had in their possession which were the

29
property of the Body Corporate. The appointment of the administrator

was made because of the total breakdown of the administration of the

Body Corporate over a very long time caused largely if not solely by the

activities of Miss Adams who owned 3 units in a small block of older

style flats. The finding of facts and the contumelious conduct of Miss

Adams justified the Court imposing a fine of $10,000.00. Bonglorno J.

held as follows:-

“[32] Order No 3 required Ms Adams to pay to the

administrator the sum of $6,000 on or before 10 May 2003.

She did not do so. Subsequent demands by Mr Dunlea were

met with a stubborn refusal by her to comply with the Court ’s

order.

[33] ...the Court is satisfied that Ms Adams ’ failure to pay to

Mr Dunlea the $6,000 was not only a deliberate act but was

also one done in circumstances where at the relevant time,

sh e had a mpl e me a ns and ability t o ma k e su ch pa yme nt .

The bizarre method by which she finally paid the $6,000 (on

the assumption that the cheques handed to Mr Dunlea on 21

November have been honoured) simply reinforces this

conclusion.

30
 [34] Whilst it is not necessary to ascribe a motive to Ms

Adams to support the Court’s finding, it is probable that it

was no more complex than a desire to frustrate the

administrator to the detriment of her co -unit owners. Her

contumacy in refusing to comply with the Court ’s order was

of a high order. It merits condign punishment.”

There is nothing to suggest that the conduct of the Respondent has

been intransigent other than the impecuniosity of the Respondent

himself. He would face the full brunt of the law in a bankruptcy action

and perhaps would be adjudicated a bankrupt one day. Miss Haryaty left

no stones unturned in submitting even if this Court were to be minded to

find the Respondent guilty of contempt, imprisonment is not an

appropriate punishment bearing in mind the age and health of the

alleged Contemnor. The Court of Appeal in the case of Zainuddin

Muhamad v. Atsco Ltd & Anor [2011] 4 CLJ 141 had made reference to

these factors that should be taken into account.

To quote the passionate plea of learned counsel Ms Haryaty:-

“The Defendant is already 68 years old and is evidently not

in the best of health. Apart from being a serious diabetic he

is also currently suffering from serious eyes ailment that

could lead to blindness. Would putting him in prison ensure

31
 compliance to the judgment? No. Not because
imprisonment would not deter him but because he could not

possibly comply with the judgment anyway.

My Lord, the Defendant had attempted to fulfill his obligation

to bu y th e sh ar es ev en be fo re this suit h ad b een initi ated.

His lif e was nev er th e s a me ev er sin ce his busin ess

co llaps ed an d he h ad sp ent th e re ma ini ng pa rt o f h is li fe
t r ying to settl e his debt s. ”

Pro no un ce me nt

Having considered the submissions and further submissions both written

and oral of both parties, I am of the view that the ex-parte leave was

rightly given, there being a prima facie case for contempt.

However after hearing the Defendant who was present throughout the
hearing and after reading his affidavit, I find that this is not a case of

deliberate disobedience or willful non-compliance of a court order for

what is essentially and effectively the payment of a combined sum of
over RM14 million to the Applicant and to so purchase the designated

shares from it.

The inability in taking the transfer of the shares is not the brunt of the
Applicant’s complaint. The Respondent had stated that he had no means

32
to pay and the Applicant had not denied or refuted this other than to say
that his impecuniosity is irrelevant.

However a contempt proceeding is never meant to punish a Debtor for

his poverty. The Applicant has failed to prove beyond a reasonable
doubt that the Respondent had been guilty of a willful refusal or neglect

to comply with the judgment of the Court.

The 2 applications to set aside the ex-parte leave in Enclosure 116 in

Suit 3156 and Enclosure 132 in Suit 3155 are hereby dismissed with

costs.

The 2 substantive motions in Enclosure 120 in Suit 3155 and Enclosure

106 in Suit 3156 are also hereby dismissed with costs.

Postscript

Whilst zealous to defend the dignity and sanctity of the Courts, we must
not set the law back a few thousand years when creditors are known to

have put debtors in prisons and nay to torture them until they have fully
paid their debts. We might have heard that loansharks or more
notoriously called alongs have no compunction is even keeping their

debtors in chains and depriving them of food as a punishment for not

paying their debts. In some places we read of children being sold into
slavery or forced labour to pay the debts of their family.

33
Parties can always arrange their affairs such that a party with doubtful

means to pay might have to furnish the necessary banker’s guarantee or

security. Otherwise there is risk involved in all transactions and one is

left to pursue only a bankruptcy action against one’s debtor. Long gone

are the days when a man is imprisoned for his impecuniosity or put in

prison because of his poverty. That would be a punishment too great for

him to bear. The law has the power to humanise man in all his dealings

with his fellow man. Used wrongly it has the effect of dehumanising us;

eroding away our very dignity of being human.

Dated: 7 OCTOBER 2011

(LEE SWEE SENG)

Judicial Commissioner
High Court (Commercial Division)
Kuala Lumpur

For the plaintiff/applicant - SY Wang & Kenneth St James; M/s

Michael Chai & Co

For the defendant/respondent - Haryati Ibrahim; M/s PM Tan Yaty

Chin

Date of decision: 26 JULY 2011

34