1. Charles Koo Ho-Tung(Uk Passport No.: 761278793)2. Angela Koo Chi-Fong(Uk Passport No.: 094470670)3. Lydia Koo Chee Yung(Uk Passport No.: 510909424)(Representing Herself And The Beneficiaries Of TheEstate Of Koo Ling Ching, Deceased)4. Hsbc International Trustee Limited(Company No.: 1168)(Administrator Of The Estate Of Koo Ling Ching) …PlaintiffsAnd1. Koo Lin Shen(Nric No.: 210219-71-5269)2. Alexander Hao Nan Koo(Nric No.: 641222-71

  

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IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION)

 

ORIGINATING SUMMONS NO: 24NCC-296-08/2014

 

BETWEEN

 

1. CHARLES KOO HO-TUNG

 

(UK PASSPORT NO.: 761278793)

 

2. ANGELA KOO CHI-FONG

 

(UK PASSPORT NO.: 094470670)

 

3. LYDIA KOO CHEE YUNG

 

(UK PASSPORT NO.: 510909424) (representing herself and the beneficiaries of the Estate of Koo Ling Ching, deceased)

 

4. HSBC INTERNATIONAL TRUSTEE LIMITED (COMPANY NO.: 1168)

 

(Administrator of the estate of Koo Ling Ching)

 

AND

 

1. KOO LIN SHEN

 

(NRIC No.: 210219-71-5269)

 

2. ALEXANDER HAO NAN KOO (NRIC No.: 641222-71-5301)

 

3. EDWARD HAO MANG KOO (PASSPORT NO.: 453907724)

 

4. CATHERINE KOO (PASSPORT NO.: 761316906)

 

5. TEW YEW LEY

 

(NRIC No.: 590510-01-5505)

 

…PLAINTIFFS

 

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6. MALAYSIA UNITED CHEMICAL CORPORATION SDN BHD

 

(COMPANY NO.: 13891-V) …DEFENDANTS

 

JUDGMENT

 

(Court enclosure nos. 29 and 32)

 

A. Introduction

 

1. In this originating summons (OS), the plaintiffs (Plaintiffs) have, among

 

others –

 

(a) alleged “oppression” by the first defendant (1st Defendant) under s 181 of the Companies Act 1965 (CA) in respect of the sixth defendant company (6th Defendant); and

 

(b) applied to rectify the 6th Defendant’s register of members (6th Defendant’s Register) under s 162 CA.

 

2. The 3 novel questions that arise in this case are as follows:

 

(a) is the OS defective under the Rules of Court 2012 (RC) by claiming for both oppression and rectification of the 6th Defendant’s Register?;

 

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(b) the 4th Plaintiff company (4th Plaintiff) is the executor and trustee of the estate of the late Mr. Koo Ling Ching (KLC). The 4th Plaintiff is a registered shareholder of 265,000 shares in the 6th Defendant for the benefit of KLC’s estate. The 1st plaintiff (1st Plaintiff), second plaintiff (2nd Plaintiff) and third plaintiff (3rd Plaintiff) are the beneficiaries of KLC’s estate but the 1st to 3rd Plaintiffs are not the registered shareholders in the 6th Defendant. Although the 4th Plaintiff is a registered shareholder in the 6th Defendant, can the 4th Plaintiff file an oppression suit under s 181 CA?; and

 

(c) on 19.12.2014 the Plaintiffs have applied in court enclosure no. 29 (Court Enc. No. 29) to cross-examine the 1st Defendant. The 1st Defendant has affirmed 6 affidavits (court enclosure nos. 7, 16, 17, 22, 23 and 57), including one affidavit (court enclosure no. 7) containing 166 paragraphs running to 55 pages (affidavit in Malay) and 49 pages (affidavit in English). Can the 1st Defendant’s learned counsel now resist Court Enc. No. 29 by relying on, among others, a psychiatrist report dated 5.5.2015 which states that the 1st Defendant is “not likely to have the mental ability to understand the role and nature of court proceedings”?

 

B. Parties

 

3. KLC and the 1st Defendant are brothers.

 

4. The 1st to 3rd Plaintiffs are KLC’s children who are the beneficiaries of KLC’s estate.

 

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5. Besides the 1st and 6th Defendants, the other defendants in this case are as

 

follows:

 

(a) the 2nd defendant (2nd Defendant) is the 1st Defendant’s son and is a shareholder of 6th Defendant;

 

(b) the 3rd defendant (3rd Defendant) is the 1st Defendant’s son. The 3rd Defendant has been a director of the 6th Defendant from 11.7.2011 until 15.10.2012;

 

(c) the 4th defendant (4th Defendant) is the 1st Defendant’s daughter and is a director of 6th Defendant since 11.7.2011; and

 

(d) the 5th defendant (5th Defendant) has been a director of the 6th Defendant from 1.6.2011 until 16.11.2012. The Plaintiffs aver that the 5th Defendant is an employee of the 6th Defendant at the material time.

 

This judgment will refer to the 1st to 6th Defendants as the “Defendants”.

 

C. 2 applications

 

6. After Court Enc. No. 29 has been filed by the Plaintiffs, court enclosure no.

 

32 (Court Enc. No. 32) is filed on 13.1.2015 by the 1st to 4th and 6th

 

Defendants to strike out the OS.

 

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7. Despite the earlier filing of Court Enc. No. 29, I directed Court Enc. No. 32 to be heard before Court Enc. No. 29. This is because if Court Enc. No. 32 is allowed, the OS will be struck out and consequently, Court Enc. No. 29 will also be struck out. If Court Enc. No. 32 is dismissed, only then will Court Enc. No. 29 be heard.

 

D. Averments in OS and affidavit in support

 

8. To decide Court Enc. No. 32, I need to set out the contents of the OS and its supporting affidavit in court enclosure no. 2 (Plaintiffs’ 1st Affidavit). Needless to say, at this juncture, I express no view in respect of the truth or otherwise of the averments in the OS and the Plaintiffs’ 1st Affidavit.

 

9. The Plaintiffs’ 1st Affidavit avers as follows:

 

(1) the 6th Defendant was incorporated by KLC and the 1st Defendant.

 

The 1st Defendant and one Mr. Tong Hing Hua (Mr. Tong) were the 2 subscriber shareholders and first directors of the 6th Defendant;

 

(2) by 1996, the shareholders of the 6th Defendant were as follows –

 

(a) KLC held 265,000 or 44.167% shares in the 6th Defendant;

 

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(b) the 1st Defendant owned 265,000 or 44.167% shares in the

 

6th Defendant; and

 

(c) Mr. Tong held 70,000 or 11.666% shares in the 6th Defendant;

 

(3) Mr. Tong held shares in the 6th Defendant on trust for the benefit of both KLC and the 1st Defendant;

 

(4) on 4.1.2001 –

 

(a) Mr. Tong transferred his 70,000 shares in the 6th Defendant to the 1st Defendant without the knowledge and consent of KLC (Tong’s Shares Transfer). The Plaintiffs contend that Tong’s Shares Transfer has been done illegally; and

 

(b) Mr. Tong resigned as the 6th Defendant’s director and one Mr. Chang Kee Foh (Mr. Chang) was appointed a director of the 6th Defendant;

 

(5) on or about 23.1.2003 KLC had an accident and went into coma. KLC subsequently passed away on 28.3.2005;

 

(6) some time in late 2003, the 1st Defendant instructed Ms. Moy Sook Ching (Ms. Moy), the company secretary of the 6th Defendant, to transfer 1 share owned by the 1st Defendant in the

 

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6th Defendant, to the 2nd Defendant (Share Transfer To 2nd Defendant). The Plaintiffs claim that the Share Transfer To 2nd Defendant, has contravened the 6th Defendant’s Articles of Association (6th Defendant’s AA);

 

(7) the 1st Defendant has taken steps to increase unlawfully the 6th Defendant’s paid up share capital without notice to KLC and/or the beneficiaries of KLC’s estate. Consequently, the Plaintiffs contend that the 1st Defendant has unlawfully diluted KLC’s shareholding in the 6th Defendant and the present shareholding in the 6th Defendant is as follows –

 

(a) the 4th Plaintiff as administrator for KLC’s estate, holds 265,000 or 13.25% shares in the 6th Defendant;

 

(b) the 1st Defendant owned 1,734,999 or 86.75% shares in the 6th Defendant; and

 

(c) the 2nd Defendant owns 1 share in the 6th Defendant;

 

(8) upon taking control of the 6th Defendant, the 1st Defendant has appointed his immediate family members and nominee to be directors of the 6th Defendant as follows –

 

(a) Madam Marcia Koo Shou Chen, the 1st Defendant’s wife (Madam Koo), was appointed to be a director of the 6th Defendant on 16.8.2004 until she passed away on 11.3.2013;

 

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(b) the 5th Defendant was appointed as a director of the 6th Defendant on 11.6.2011 until the 5th Defendant’s resignation with effect from 16.11.2012;

 

(c) the 3rd Defendant was appointed a director of the 6th Defendant on 11.7.2011. The 3rd Defendant resigned as the 6th Defendant’s director with effect from 15.10.2012; and

 

(d) the 4th Defendant, has been appointed as the 6th Defendant’s director on 11.7.2011 and is presently still holding this position;

 

(9) at all material times, the 1st Defendant with his wife and children control the 6th Defendant. On the date of filing of the OS, the 1st and 4th Defendants are the only directors of the 6th Defendant;

 

(10) the Plaintiffs contend that the appointments of Mr. Chang, Madam Koo and 3rd to 5th Defendants have breached the 6th Defendant’s AA;

 

(11) the Plaintiffs allege that the 1st Defendant has –

 

(a) breached of the 6th Defendant’s Memorandum of Association (6th Defendant’s MA);

 

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(b) contravened the 6th Defendant’s AA;

 

(c) acted in breach of the “mutual agreement and understanding” between KLC and the 1st Defendant in respect of the 6th Defendant; and

 

(d) acted contrary to the “legitimate expectation” of KLC as an equal shareholder of the 6th Defendant together with the 1st Defendant;

 

(12) the 1st Defendant has oppressed the Plaintiffs in the following manner, among others –

 

(a) the 1st Defendant’s refusal to allow KLC’s estate to subscribe for a number of shares in the 6th Defendant which is similar to that held in the 6th Defendant by the 1st Defendant; and

 

(b) the Plaintiffs have been entirely excluded from the opportunity to take part in the management and decisionmaking process of the 6th Defendant; and

 

(13) on 25.10.2013, the 1st to 3rd Plaintiffs have filed an earlier suit, Originating Summons No. 24NCC-347-10/2013 (1st OS). In the 1st OS –

 

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(a) the 1st to 4th and 6th Defendants have applied to strike out the 1st OS; and

 

(b) Nallini Pathmanathan J (as Her Ladyship then was) in the High Court allowed the application by the 1st to 4th and 6th Defendants to strike out the 1st OS with liberty to file afresh (High Court’s Decision in 1st OS). In striking out the 1st OS, the High Court stated, among others –

 

(i) only the registered shareholders of the 6th Defendant can apply under s 181 CA;

 

(ii) for the Plaintiffs to rely on the equitable estoppel exception laid down by the Federal Court in Owen Sim Liang Hui v Piasau Jaya Sdn Bhd & Anor [1996] 4 CLJ 716, the 1st to 3rd Plaintiffs should have applied to the 6th Defendant for the shares held by the 4th Plaintiff in the 6th Defendant, be transferred to the 1st to 3rd Plaintiffs; and

 

(iii) the High Court had made it clear that the court had not determined the merits of the 1st OS at all.

 

10. The OS have prayed for the following relief, among others:

 

(a) declarations that –

 

(i) Tong’s Shares Transfer is invalid;

 

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(ii) the 6th Defendant’s Extraordinary General Meeting held on 30.3.2004 is null and void;

 

(iii) the Directors’ Circular Resolution dated 30.3.2004 of the 6th Defendant is invalid;

 

(iv) the shareholding of the 6th Defendant be amended to reflect the equal shareholding of KLC and the 1st Defendant as per the position on or before 4.1.2001, namely on or before Tong’s Shares Transfer; and

 

(v) the appointments of the 3rd to 5th Defendants as directors of the 6th Defendant are invalid

 

(Plaintiffs’ Prayer for Declarations);

 

(b) mandatory orders that –

 

(i) the 6th Defendant forthwith cancel 1,400,000 shares in the 6th Defendant which have been issued and registered in the name of the 1st Defendant;

 

(ii) shares held by the 4th Plaintiff in the 6th Defendant be transferred and duly registered in the names of the 1st to 3rd

 

ii

 

Plaintiffs and Mr. Koo Ho Liang Henry (Henry). Henry is also KLC’s son;

 

(iii) pursuant to s 162 CA, the 6th Defendant’s Register be rectified by –

 

(1) striking out the name of the 4th Plaintiff as the holder of 265,000 shares in the 6th Defendant and by inserting the names of the 1st to 3rd Plaintiffs and Henry as the holder of those shares; and

 

(2) striking out the name of the 1st Defendant as the holder of 1,400,000 shares in the 6th Defendant;

 

(iv) the Plaintiffs and Henry be authorised to effect the necessary alterations in the 6th Defendant’s Register for the purpose of carrying into effect this court’s order;

 

(v) the 6th Defendant within 7 days after the service of this court’s order, issue new share certificates and transfer forms to the 1st to 3rd Plaintiffs and Henry;

 

(vi) that notice of rectification in the 6th Defendant’s Register be given to the Registrar of Companies within 14 days after the service of this court’s order;

 

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(vii) if the 6th Defendant fails to carry out the above mandatory orders, the court’s Senior Assistant Registrar and/or Deputy Registrar shall be authorised to carry out the above mandatory orders; and

 

(viii) the 4th Plaintiff, or the 1st to 3rd Plaintiffs and Henry, be permitted to subscribe for shares in the 6th Defendant so as to maintain a shareholding in the 6th Defendant which is equal to that held in the 6th Defendant by the 1st Defendant;

 

(c) an order to appoint Receiver and Manager (R&M) over the entire assets and undertaking of the 6th Defendant and the R&M be given liberty to apply to court for directions;

 

(d) an order to appoint an independent auditor (Independent Auditor) to investigate and audit the accounts of the 6th Defendant and the 1st to 5th Defendants within 7 days from the date of this order, shall deliver copies of all books, accounts, records and other documents of the 6th Defendant to the Independent Auditor;

 

(e) an order for the 1st to 5th Defendants to account to the 6th Defendant for –

 

(i) all profits, secret profits, and/or all benefits made by the 1st to 5th Defendants;

 

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(ii) all funds unlawfully taken out from the 6th Defendant; and

 

(iii) wrongful dilution of the 6th Defendant’s assets; and

 

(f) such further order be made under ss 103, 162, 165 and/or 182 CA with a view to bring to an end or to remedy the matters complained of by the Plaintiffs.

 

E. Court’s approach in deciding Court Enc. No. 32

 

11. The 1st to 4th and 6th Defendants rely on the following grounds in Court Enc. No. 32 to strike out the OS:

 

(a) Order 18 rule 19(1)(b), (c) and/or (d) RC; and/or

 

(b) the court’s inherent jurisdiction.

 

12. Order 18 rule 19 and Order 92 rule 4 RC provide as follows:

 

“Order 18

 

rule 19(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that –

 

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(a) it discloses no reasonable cause of action or defence, as the case may be;

 

(b) it is scandalous, frivolous or vexatious;

 

(c) it may prejudice, embarrass or delay the fair trial of the action; or

 

(d) it is otherwise an abuse of the process of the Court,

 

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

 

19(2) No evidence shall be admissible on an application under subparagraph (1)(a).

 

19(3) This rule shall, as far as applicable, apply to an originating summons as if it were a pleading.

 

Order 92

 

rule 4 For the removal of doubt it is hereby declared that nothing in these Rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court .”

 

(emphasis added).

 

13. Order 18 rule 19(1) and (2) apply to the OS by virtue of Order 18 rule 19(3) RC. Since Court Enc. No. 32 is not relying on Order 18 rule 19(1)(a) RC, Order 18 rule 19(2) RC does not bar parties and the court from referring to affidavit evidence – please see the Federal Court’s judgment given by Gopal Sri Ram JCA (as His Lordship then was) in Owen Sim Liang Khui v Piasau Jaya Sdn Bhd & Anor [1996] 4 CLJ 716, at 729-730.

 

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14. In deciding Court Enc. No. 32, I adopt the following approach:

 

(a) the OS can only be struck out in a plain and obvious case, namely where the OS is obviously unsustainable – the Supreme Court’s judgment in Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, at 43;

 

(b) the mere fact that the OS is weak and is not likely to succeed, is not a ground to strike out the OS – Bandar Builder Sdn Bhd, at p. 44;

 

(c) the court will assume the contents of the OS to be true – the Court of Appeal’s decision in Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd & other appeals [1996] 1 MLJ 661, at 679;

 

(d) unless the OS is obviously unsustainable, I will be reluctant to deprive any party from having access to justice. Unless it is plain and obvious that the OS is unsustainable, a litigant should be given his right and day in court;

 

(e) under Order 18 rule 19(1) RC, in the interest of justice the court has a discretion to direct the OS to be amended – the Court of Appeal’s judgment in Muniandy s/o Subrayan & Ors v Chairman & Board Members of Koperasi Menara Maju Bhd [1991] 1 MLJ 557, at 560

 

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and 561. If need be, the court should allow the Plaintiffs to amend the OS instead of striking out the OS; and

 

(f) this court shall not –

 

(i) express any view in respect of the strength or weakness of the parties’ case in the OS; and

 

(ii) make any finding of fact as the court cannot embark on a trial on affidavits, especially when there are conflicting affidavits.

 

This is to preserve the integrity of the OS if Court Enc. No. 32 is subsequently dismissed and the hearing of the OS is proceeded with.

 

F. Submission of 1st to 4th and 6th Defendants in support of Court Enc. No. 32

 

15. In support of Court Enc. No. 32, the 1st to 4th and 6th Defendants contend as follows:

 

(a) the 1st to 3rd Plaintiffs are barred by the res judicata doctrine from filing the OS in view of the High Court’s Decision in 1st OS;

 

(b) by applying to rectify the 6th Defendant’s Register under s 162 CA and by alleging oppression under s 181 CA in the same OS, the

 

17

 

OS is a “hybrid of 2 separate and distinct procedures” under CA. Accordingly, based on the Supreme Court’s judgment in Lai Kim Loi v Datuk Lai Fook Kim & Co [1989] 1 CLJ (Rep) 61, the OS is defective and should be struck out;

 

(c) the 1st to 3rd Plaintiffs are mere beneficiaries of KLC’s estate who are not “members” of the 6th Defendant within the meaning of s 16(6) CA. As such, 1st to 3rd Plaintiffs have no locus standi to commence the OS under s 181 CA;

 

(d) the 4th Plaintiff is not the “complainant’ of the alleged oppression and cannot “clothe” the 1st to 3rd Plaintiffs with the necessary locus standi to bring an oppression action under s 181 CA; and

 

(e) there are factual and legal disputes regarding the ownership of shares in the 6th Defendant in this case. Hence, the summary procedure under s 162 CA by way of OS is not appropriate and the Plaintiffs should have commenced a writ action in this case to rectify the 6th Defendant’s Register.

 

16. Although Court Enc. No. 32 has been filed by the 1st to 4th and 6th Defendants, the 5th Defendant has filed 2 written submissions and 2 bundles of authorities in support of Court Enc. No. 32! It is to be noted that the 5th Defendant’s contentions are similar to those advanced by

 

the 1st to 4th and 6th Defendants.

 

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G. Are Plaintiffs barred by res judicata doctrine in respect of High Court’s Decision in 1st OS?

 

17. According to the 1st to 4th and 6th Defendants, the High Court’s Decision in 1st OS has decided that the 1st to 3rd Plaintiffs have no locus standi to commence a suit under s 181 CA despite the fact that the 1st to 3rd Plaintiffs are the equitable owners of shares in the 6th Defendant which have been registered in the name of the 4th Plaintiff. As such, the 1st to 4th and 6th Defendants submit that the 1st to 3rd Plaintiffs are barred by the res judicata doctrine from filing the OS.

 

18. As explained by the Supreme Court in a judgment given by Peh Swee Chin FCJ in Asia Commercial Finance (M) Bhd lwn Kawal Teliti

 

Sdn Bhd [1995] 3 MLJ 189, at 198, the doctrine of res judicata consists of cause of action estoppel and issue estoppel.

 

19. With respect, I am not able to accept the contention of the 1st to 4th and 6th Defendants that the Plaintiffs are barred by the res judicata doctrine from filing the OS due to the High Court’s Decision in 1st OS. This decision is premised on the following reasons:

 

(a) the merits of this case have not been decided in the 1st OS as expressly recognized in the High Court’s Decision in 1st OS. The following appellate cases have held that the res judicata doctrine is not triggered when there has been no adjudication of the dispute on its merits –

 

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(i) in Tan Chiw Thoo v Tee Kim Kuay [1997] 2 MLJ 221, at 230, the Federal Court, in a judgment given by Peh Swee Chin FCJ, decided as follows –

 

“Now, one of the conditions for the defence of res judicata or estoppel per rem judicatam is that the question of title as disputed between the parties must have been decided earlier in a court of competent jurisdiction.”

 

(emphasis added); and

 

(ii) the judgment of James Foong JCA (as His Lordship then was) in Ramli bin Samad v Pacific & Orient Insurance Co Sdn Bhd [2010] 3 MLJ 23, at 34

 

[concurred by Heliliah Mohd. Yusof (as Her Ladyship then was) and Abdul Malik Ishak JJCA] –

 

“As this defence was never litigated or abandoned res judicata is not applicable

 

(emphasis added).

 

Based on Tan Chiw Thoo and Ramli bin Samad, the Plaintiffs are not barred by the High Court’s Decision in 1st OS from

 

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commencing the OS as the merits of this dispute have not been decided in the 1st OS.

 

If this court applies the res judicata doctrine to bar the Plaintiffs from filing the OS without hearing the merits of the OS, this will cause an injustice to the Plaintiffs. In Chee Pok Choy & Ors v Scotch Leasing Sdn Bhd [2001] 4 MLJ 346, at 356, 357 and 358, the Court of Appeal held as follows in judgment given by Gopal Sri Ram JCA (as His Lordship then was) –

 

“Now, res judicata is not merely a technical rule of pleading. It is a doctrine of substantial justice. It is a process whereby justice is achieved procedurally by precluding a party from reagitating in subsequent proceedings a complaint or an issue that has, or could fairly have been disposed in earlier proceedings between the same parties or their privies. It is merely equity in action in the procedural arena.

 

The doctrine may thus be seen to encompass several categories. In its narrowest sense, res judicata, I think, refers to estoppel by record. It refers to the actual decision of the earlier action or proceeding. In its wider sense, it encompasses issues and causes of action that could justly and fairly have been equally adjudicated in the earlier suit or proceeding. This wider operation of the doctrine is sometimes referred to ‘constructive res judicata’. It houses the twin concepts of issue estoppel and cause of action estoppel. Like the tree of which they form the branches, they are designed to ensure that there is finality in litigation.

 

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Now, there is a dimension to the doctrine of res judicata that is not always appreciated. It is this. Since the doctrine (whether in its narrow or broader sense) is designed to achieve justice, a court may decline to apply it where to do so would lead to an unjust result. And there is respectable authority in support of the view I have just expressed.

 

On the authorities discussed thus far, the principle comes to this. Whether res judicata in the wider sense should be permitted to bar a claim is a matter that is to be determined on the facts of each case, always having regard to where the justice of the individual and particular case lies.”

 

(emphasis added).

 

In accordance with Chee Pok Choy, I decline to apply the doctrine of res judicata in this case as this will lead to an injustice for the Plaintiffs; and

 

(b) the High Court’s Decision in 1st OS has expressly given liberty to the Plaintiffs to file a fresh action. The effect of “liberty to file afresh” is significant as explained in the following cases –

 

(i) in Tara Rajaratnam v Datuk Jaginder Singh & Ors [1981] 1 MLJ 232, at 234, Wan Suleiman FJ in the Federal Court decided as follows –

 

“ We are of the view that the two orders in granting the appellant liberty to file a fresh action can only mean

 

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that no final decision has been pronounced so as to estop the appellant “in any subsequent litigation from disputing or questioning such decision on the merits”, so that the plea of res judicata must fail.”

 

(emphasis added); and

 

(ii) the Court of Appeal in a judgment delivered by Gopal Sri Ram JCA (as His Lordship then was) in Borneo Samudera Sdn Bhd v Siti Rahfizah bt Mihaldin & Ors [2008] 6 MLJ 817, at 821, decided as follows –

 

“[6] Before us, counsel for the respondents, Marina Tiu, in supporting the learned judge’s decision has argued that the appeal should be dismissed because the appellant had taken a step in the proceedings, thereby depriving it of its right to seek a stay. She has drawn our attention to a previous application made by the appellant dated 26 May 2006. In that application, the appellant sought an order for stay and in the alternative to transfer the suit to the High Court in Tawau, Sabah. We have perused the order made on that application and find that the learned judge did transfer the suit to Tawau and disallowed the other prayers but granted the appellant liberty to file afresh. We accordingly find no merit in the argument of the respondents’ counsel that this is a case where the doctrine of issue estoppel would apply. In our judgment no issue was determined by the High Court hearing at 28 March 2007. All that happened was that the suit was transferred to Tawau and the appellant’s right to make a fresh application for stay preserved.”

 

(emphasis added).

 

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H. Is there a bar to a “hybrid” OS?

 

20. In Lai Kim Loi –

 

(a) on 14.8.1985, the appellant presented a winding up petition which prayed for, among others, remedies under ss 181 or 218 CA (at p. 62-63). Section 218 CA provides for the power of the court to wind up a company;

 

(b) on 15.8.1985, the appellant filed a writ action against the first respondent seeking substantially similar remedies as the winding up petition (except for the winding up of the company in question) – p. 63;

 

(c) the civil suit proceeded first and the winding up petition was only served 1 year later – p. 67; and

 

(d) the Supreme Court in a judgment given by Gunn Chit Tuan SCJ (as His Lordship then was) upheld the High Court’s decision to strike out the winding up petition on the following grounds, at p. 69 and 70 –

 

“As for the procedure, it is provided in O. 88 r. 5 of our Rules of the High Court 1980, that certain applications under the Companies Act 1965, including an application under s. 181 of the said Act for relief in cases of

 

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oppression, must be by petition. After presentation of the petition, the petitioner must take out a summons for directions under r. 7 of O. 88. On the hearing of the summons the Court may by order give such directions as to the proceedings to be taken before the hearing of the petition as it thinks fit including, in particular, directions for the publication of notices. In other words, a petition under s. 181 of the said Act cannot be published without the prior order of the Court, as was done in this case.

 

On the other hand, an order for a company to be wound up on a petition under s. 217 of the Companies Act 1965, may only be made by a Court if one of the circumstances specified in the following s. 218(1) of the Companies Act has been proved: …

 

In the present case it is to be observed that the petition was in fact assigned a distinctive number by the Registrar of the Court i.e. Companies Winding-Up no. 6 of 1985 and the petitioner has proceeded to advertise the petition in accordance with r. 24 of the Companies (Winding Up) Rules 1972, which does not require the prior order of the Court.

 

After consideration of the relevant provisions of our law, it could not be said that this was a case of mere noncompliance with the rules of the Court which requires only amendment of the pleadings. In this case the petition presented was not in accordance with the provisions of the Companies Act 1965 itself, resulting in a petition which was, we would agree with Counsel for the respondents, imprecise and which appears to us to be a hybrid petition purporting to have been presented under two different sections of the Companies Act 1965.

 

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On the question of multiplicity, Mr. Lim has conceded that the issues raised and the relief sought in Suit No. S 235 of 1985 have been largely duplicated in the said petition. Although the issues raised and the relief sought are not totally similar yet we consider that the substantial duplication of issues and relief sought in both actions amounted to multiplicity of actions and in all the circumstances of this case, the petition presented is vexatious and is an abuse of the process of the Court and ought to be struck out as the learned Judge has done and not stayed or the petition be allowed to be amended as suggested by Counsel for the petitioner. We were satisfied that the learned Judge had exercised his discretion correctly in striking out the petition and we therefore dismissed the appeal with costs ”

 

(emphasis added).

 

21. The 1st to 4th and 6th Defendants rely on Lai Kim Loi to submit that, among others, the “hybrid” OS is “improper’, “imprecise and embarrassing”.

 

22. Firstly, I am of the view that Lai Kim Loi can be distinguished from the OS on the 2 following grounds:

 

(a) in Lai Kim Loi, besides the winding up petition, the petitioner had also filed a writ action claiming for substantially the same relief as the winding up petition. The petitioner had first proceeded with the writ action and then subsequently advertised the winding up petition. As such, the petitioner had abused court process by

 

26

 

committing a duplicity, namely by filing the winding up petition and the writ action at about the same time in respect of the same issues and essentially for the same relief. It is therefore not surprising for the High Court to strike out of the winding up petition and this decision has been affirmed by the Supreme Court. There is however no duplicity or multiplicity in this case. As explained above, the 1st OS has been struck out without an adjudication of the merits and with liberty to the Plaintiffs to file a fresh suit. The 1st OS cannot then render the OS in this case to be a duplicity or an abuse of court process; and

 

(b) when a winding up petition is filed, specific provisions in the CA and the Companies (Winding Up) Rules 1972 (WUR) apply to the winding up petition. An oppression suit is now governed by the CA and Order 88 rule 2 RC. I will discuss the effect of Order 88 rule 2 RC subsequently in this judgment. At the time of the filing of the winding up petition in Lai Kim Loi, Order 88 rule 5(h) of then applicable Rules of the High Court 1980 (RHC) provided that an oppression suit had to be made by way of petition. However an oppression petition under Order 88 rule 5(h) RHC was not governed by WUR (which applies to winding up petitions). Accordingly, a petition at the time of the decision in Lai Kim Loi, could not “combine” prayers for relief under ss 181 and 218 CA as an oppression petition was then regulated by Order 88 rule 5(h) RHC while a winding up petition was (and still is) governed by WUR. In this case, the Plaintiffs have not filed a winding up

 

27

 

petition. There cannot be any doubt that WUR do not apply here to cause any confusion and prejudice to the Defendants in this case.

 

23. Secondly, I am of the respectful view that Lai Kim Loi is decided before the introduction of RC. The OS complies with the following provisions in the RC:

 

(a) Order 88 RC specifically applies to CA. Order 88 rule 2 RC provides as follows –

 

“Except for the proceedings specified in Appendix C relating to the winding up of companies and capital reduction under the Act, proceedings under the Act shall be commenced by originating summons.”

 

(emphasis added).

 

Appendix C to RC does not apply in this case. I am of the view that Order 88 rule 2 RC is a mandatory provision from the use of the term “shall’ in that provision. In Public Prosecutor v Yap Min Woie [1996] 1 MLJ 169, at 172-173, the Federal Court in a judgment given by Mohd. Dzaiddin FCJ (as His Lordship then was), gave effect to the mandatory term “shall’ in the then s 28 of the Juvenile Courts Act 1947;

 

28

 

(b) Order 15 rule 1(1)(a) RC allows the Plaintiffs to join 2 or more causes of action in one OS. Order 15 rule 1 RC reads as follows –

 

“Order 15 rule 1 Joinder of causes of action

 

(1) Subject to rule 5(1), a plaintiff may in one action claim relief against the same defendant in respect of more than one cause of action –

 

(a) if the plaintiff claims, and the defendant is alleged to be liable, in the same capacity in respect of all causes of action;

 

(b) if the plaintiff claims or the defendant is alleged to be liable in the capacity of executor or administrator of an estate in respect of one or more of the causes of action and in his personal capacity but with reference to the same estate in respect of all the others; or

 

(c) with the leave of the Court.

 

(2) An application for leave under this rule shall be made by ex parte notice of application supported by affidavit before the issue of the writ or originating summons and the affidavit must state the grounds of the application.”

 

(emphasis added).

 

29

 

I am of the view that Order 15 rule 1(1) RC allows the Plaintiffs to claim for relief under ss 162 and 181 CA in the same OS. In Tan Chwee Geok & Anor v Khaw Yen-Yen & Anor [1975] 2 MLJ 188, at 189, Suffian LP in the Federal Court discussed a provision in the then applicable Rules of the Supreme Court 1957 (RSC) regarding joinder of causes of action as follows –

 

“ Third, it is argued on behalf of the defendants that there has been improper misjoinder of causes of action. With respect I do not think there has been. It will be most convenient to have the complaints against the deceased’s estate and against the company tried and disposed of together,.”

 

(emphasis added).

 

If the Defendants are of the view that the joinder of causes of action under ss 162 and 181 CA prejudices them, the Defendants may apply for separate hearing of the Plaintiffs’ claim under ss 162 and 181 CA pursuant to Order 15 rule 5(1) RC. Order 15 rule 1(1) is subject to Order 15 rule 5(1) which provides as follows –

 

“If claims in respect of two or more causes of action are included by a plaintiff in the same action or by a defendant in a counterclaim, or if two or more plaintiffs or defendants are parties to the same action, and it appears to the Court that the joinder of causes of action or of parties, as the case may be, may embarrass or delay the trial or is otherwise inconvenient, the Court may order separate trials or make such other order as may be expedient ”

 

30

 

(emphasis added).

 

In Kok Wee Kiat v KL Stock Exchange Bhd & Ors [1977] 1 MLJ 109, at 111, Ali FJ in the Federal Court considered Order 18 rule 1 of the then applicable RSC and held as follows:

 

“The Order, as it appears to me, was made under Order 18 rule 1 [RSC] which provides as follows:

 

“Subject to the following Rules of this Order, the plaintiff may unite in the same action several causes of action; but if it appear to the court or a judge that any causes of action cannot be conveniently tried or disposed of together, the court or judge may order separate trials of any of such causes of action to be had, or may make such other order as may be necessary or expedient for the separate disposal thereof.”

 

The learned judge has very wide powers under the [RSC] to make the Order which is nothing more than a direction that the trial of the action be conducted in a particular manner. As the learned judge will no doubt be hearing the action himself I do not think it is right or proper for this court to order that the trial be conducted in a manner different from what the learned judge has directed.”

 

(emphasis added).

 

Based on Kok Wee Kiat and Order 15 rule 5(1) RC, this court has a wide discretion to decide whether to order a joint or separate

 

31

 

hearing of the Plaintiffs’ claim under ss 162 and 181 CA. It is to be noted that the Defendants have not applied under Order 15 rule 5(1) RC for separate hearings of the Plaintiffs’ claim under ss 162 and 181 CA respectively;

 

(c) Order 1A RC provides that in administering the RC, including Order 15 rule 1(1) (joinder of causes of action) and Order 88 rule 2 RC, the court “shall have regard to the overriding interest of justice and not only to the technical non-compliance” with RC; and

 

(d) Order 2 rule 1(2) RC states that the RC are “subject to the overriding objective of enabling the Court to deal with cases justly” and all parties are required to assist the court to achieve this overriding objective.

 

In view of the above provisions in RC, I find that the OS is not defective. It is to be noted that Lai Kim Loi has been decided before the advent of Order 1A, Order 2 rule 1(2) and Order 88 rule 2 RC.

 

24. The above decision is supported by the following 3 practical reasons:

 

(a) if I have acceded to the submission of the 1st to 4th and 6th Defendants based on Lai Kim Loi, this means the Plaintiffs have to file 2 separate OS – one OS for s 162 CA and another OS pursuant to s 181 CA. This will result in multiplicity of actions which unnecessarily increases costs, time and effort for all parties. Precious judicial time may not have been utilized optimally. Such

 

32

 

a consequence arising from the above contention of the 1st to 4th and 6th Defendants, is clearly not in the public interest;

 

(b) when 2 or more OS are filed (so as to ensure that 1 OS is not a “hybrid’ as contended by the 1st to 4th and 6th Defendants), parties have to be vigilant and should apply under Order 4 rule 1(1) RC to consolidate or to have all these cases heard together in one court. This is to ensure that there is no conflicting finding of fact and/or law by different courts hearing the 2 or more OS in respect of the same issues which may arise or overlap in respect of these cases; and

 

(c) if a plaintiff is legally obliged to file the first OS to rectify the register of members (Rectification Suit) before filing an oppression action (Oppression Suit), this may allow a defendant with “deep pockets” to frustrate a plaintiff who has legitimate Rectification and Oppression Suits in such a manner –

 

(i) the defendant has the resources to resist the Rectification Suit from the High Court all the way to the Federal Court; and

 

(ii) until the Rectification Suit is finally concluded in our courts in the plaintiff’s favour, the plaintiff cannot file the Oppression Suit. By the time the Rectification Suit is finally resolved in the plaintiff’s favour –

 

33

 

(1) limitation period may have set in to bar permanently the Oppression Suit;

 

(2) the plaintiff may be financially exhausted and may not be able to launch the Oppression Suit; and

 

(3) relevant witnesses and documentary evidence may no longer be available. The memory of the plaintiff and material witnesses may fail with the passage of time. The legal burden to prove the Oppression Suit lies solely with the plaintiff and any delay in the institution and prosecution of the Oppression Suit can only be detrimental to the plaintiff.

 

25. I have not overlooked Nallini Pathmanathan J’s (as Her Ladyship then was) judgment in the High Court case of Julian Suresh Candiah v Axis IP Sdn Bhd & Ors [2013] 1 LNS 982, at paragraphs 84, 120, 123, 127, 130 and 131, as follows:

 

1184. It is evident from the foregoing that there is a clear

 

distinction between a claim brought by a shareholder against the company for oppression and a claim brought by a person who claims to be a shareholder and whose status as such has not been clearly established.

 

34

 

120. To my mind however, even in such an instance, given the clear and unequivocal words of the statute, the aggrieved person should first seek rectification under the Companies Act 1965 prior to presentation of a petition, simply because that recourse or remedy is readily available.

 

123. Again, if for example, there is a transmission of such an equitable or beneficial interest in shares at law, such that the interest in those shares has in fact devolved upon the plaintiff, and the majority are wrongfully refusing to recognise his entitlement as a shareholder, the plain and ready recourse available to the transferee is to seek rectification under the Companies Act 1965 or initiate a civil suit seeking a declaration as to his rights. Such a beneficial or equitable owner may, with greater basis than the present Plaintiff, seek to have his grievance resolved under a s. 181 petition. However it is not apparent even in such a clear instance that the proper recourse is under this section, rather than rectification or a civil suit, procuring a clear declaration as to the beneficial owner’s rights.

 

127. As such it would appear that as the law presently stands under section 181, even a person enjoying an undisputed equitable or beneficial interest in shares, whose ownership as a shareholder or member has not been made legal by registration and entry on the register of members, ought to seek rectification prior

 

35

 

to bringing an action for oppression under the provisions of s. 181.

 

130. To my mind, the doctrine of estoppel does not afford the present Plaintiff recourse to section 181 unlike the situation in Owen Sim’s case. This is because the Plaintiff has no interest, albeit legal or beneficial in the shares at present. …

 

131. Turning to the facts of the present case, it seems to this court that the doctrine of estoppel cannot be invoked to create or supplement an interest where there is none .”

 

(emphasis added).

 

26. I am of the respectful view that Julian Suresh Candiah may be distinguished from this case as follows:

 

(a) unlike Julian Suresh Candiah, the 4th Plaintiff as a registered member of the 6th Defendant, clearly has locus standi to file the OS in this case;

 

(b) the equitable estoppel exception (which will be elaborated below) did not apply in Julian Suresh Candiah (at paragraphs 131). For reasons expressed later in this judgment, the Plaintiffs in this case should not be shut out by Court Enc. No. 32 (if the OS is struck

 

36

 

out) from proving the application of the equitable estoppel exception; and

 

(c) the plaintiff in Julian Suresh Candiah had no legal or beneficial interest in the shares in that case (at paragraphs 130). Accordingly, the plaintiff in Julian Suresh Candiah could not apply successfully to rectify the register of members in question. I will explain subsequently in this judgment why it is not plain and obvious to strike out the Plaintiffs’ claim for rectification of the 6th Defendant’s Register.

 

27. In the event that I have erred and the OS is defective for being a “hybrid” OS which is contrary to Lai Kim Loi, I am of the view that such a defect is merely an irregularity which has not prejudiced the Defendants. Accordingly, I exercise my discretion to cure such an irregularity under Order 2 rule 1(1) and (3) RC. Order 2 rule 1(1) and

 

(3) RC state as follows:

 

“Order 2

 

rule 1(1) Where, in beginning or purporting to begin any

 

proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of any thing done or left undone, been non-compliance with the requirement of these Rules, the non-compliance shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.

 

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1(3) The Court or Judge may, on the ground that there

 

has been such non-compliance as referred to in paragraph (1), and on such terms as to costs or otherwise as it or he thinks just, bearing in mind the overriding objective of these Rules, exercise its or his discretion under these Rules to allow such amendments, if any, to be made and to make such order, if any, dealing with the proceedings generally as it or he thinks fit in order to cure the irregularity. ”

 

(emphasis added).

 

It is to be noted that Order 2 rule 1(3) RC is materially different from Order 2 rule 1(2) RHC as Order 2 rule 1(3) RC expressly requires the court to consider the “overriding objective” of RC (for the court to deal with cases justly) embodied in Order 2 rule 1(2) RC. Once again, Lai Kim Loi was decided before the introduction of Order 2 rule 1(3) RC. At this juncture, it is apt for me to refer to Suffian LP’s judgment in Tan Chwee Geok, at p. 189, as follows:

 

“The [RSC] are intended to facilitate, not impede, the administration of civil justice.

 

In the bad old days in England from where we took our Rules, if you put a comma wrong you were thrown out of court, so strict were they about technicalities.

 

But over the years this strictness gave way to common sense, and every time the Rules were amended it was with the object of

 

38

 

removing fussy technicalities, and making it easier for parties to get justice.

 

This changed attitude was reflected in the remarks of Lord Collins M.R. about 70 years ago in Re Coles and Ravenshear [1907] 1 KB

 

1, 4:

 

“Although a court cannot conduct its business without a code of procedure, the relation of the rules of practice to the work of justice is intended to be that of handmaid rather than mistress; and the court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case.”

 

Today O.70 r. 1 of our Rules [RSC] [now replaced by Order 2 rule 1(1) and (3) RC] explicitly states that non-compliance with our Rules-

 

“shall not render any proceedings void unless the court or a judge shall so direct…” ”

 

(emphasis added).

 

28. This court exercises its discretion under Order 2 rule 1(1) and (3) RC to cure any non-compliance in respect of the OS because there is no prejudice to the Defendants occasioned by the way the OS is drafted. The fact that the Defendants have not been prejudiced by the contents of the OS is borne by the numerous, detailed and lengthy affidavits filed by the Defendants to resist the OS.

 

39

 

I. Should OS be struck out because 1st to 3rd Plaintiffs have no locus standi to file oppression suit?

 

29. Sections 16(6) and 181 CA provide as follows:

 

“Members of company

 

16(6) The subscribers to the memorandum shall be deemed to have agreed to become members of the company and on the incorporation of the company shall be entered as members in its register of members, and every other person who agrees to become a member of a company and whose name is entered in its register of members shall be a member of the company.

 

Remedy in cases of an oppression

 

181(1) Any member or holder of a debenture of a company or, in the case of a declared company under Part IX, the Minister, may apply to the Court for an order under this section on the ground –

 

(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or holders of debentures including himself or in disregard of his or their interests as members, shareholders or holders of debentures of the company; or

 

(b) that some act of the company has been done or is threatened or that some resolution of the members, holders of debentures or any class of them

 

40

 

has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or holders of debentures (including himself).

 

(2) If on such application the Court is of the opinion that

 

either of those grounds is established the Court may, with the view to bringing to an end or remedying the matters complained of, make such order as it thinks fit and without prejudice to the generality of the foregoing the order may –

 

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

 

(b) regulate the conduct of the affairs of the company in future;

 

(c) provide for the purchase of the shares or debentures of the company by other members or holders of debentures of the company or by the company itself;

 

(d) in the case of a purchase of shares by the company provide for a reduction accordingly of the company’s capital; or

 

(e) provide that the company be wound up.

 

(3) Where an order that the company be wound up is made

 

pursuant to paragraph (2)(e) the provisions of this Act relating to winding up of a company shall, with such adaptations as are necessary, apply as if the order had been made upon a petition duly presented to the Court by the company.

 

(4) Where an order under this section makes any alteration in

 

or addition to any company’s memorandum or articles, then, notwithstanding anything in any other provision of this Act, but subject to the order, the company concerned

 

41

 

shall not have power without the leave of the Court to make any further alteration in or addition to the memorandum or articles inconsistent with the order; but subject to the foregoing provisions of this subsection the alterations or additions made by the order shall be of the same effect as if duly made by resolution of the company.

 

(5) An office copy of any order made under this section shall

 

be lodged by the applicant with the Registrar within fourteen days after the making of the order.

 

Penalty: One thousand ringgit. Default penalty.”

 

(emphasis added).

 

30. Learned counsel for the 1st to 4th and 6th Defendants is clearly correct in submitting that only “members” whose names are in the 6th Defendant’s Register within the meaning of s 16(6) CA, can apply for relief under s 181(1) CA and parties who are beneficially entitled to shares in the 6th Defendant, have no right to file an oppression action under s 181(1) CA. This submission is based on, among others, the following decisions:

 

(a) Abdoolcader J’s (as His Lordship then was) judgment in the Federal Court case of Yeng Hing Enterprise Sdn Bhd v Liow Su Fah [1979] 2 MLJ 240, at 243-244; and

 

42

 

(b) the Federal Court’s judgment given by Raus Sharif PCA in Jet-Tech Materials Sdn Bhd & Anor v Yushiro Chemical Industry Co Ltd & Ors & Another Appeal [2013] 2 CLJ 277, at 289.

 

31. Learned counsel for the 1st to 4th and 6th Defendants further contend that in view of the above appellate decisions which have held that a beneficial owner of shares in a company cannot file an oppression suit under s 181 CA, the High Court judgment in Dr Leela Ratos & Ors v Anthony Ratos Domingos Ratos & Ors [1996] 4 CLJ 33, at 39-40 (which allowed a beneficial owner of shares in a company to maintain an oppression action), may not be correct. With respect to the learned Judicial Commissioner (as His Lordship then was) in Dr Leela Ratos, I agree with this contention by the 1st to 4th and 6th Defendants.

 

32. There is an exception wherein a plaintiff who institutes an action under s 181 CA, is not a member of the company within the meaning of s 16(6) CA but the company and the defendants in question are estopped from denying that the plaintiff can commence the oppression action. This equitable estoppel exception is laid down in the following cases:

 

(a) the Federal Court’s judgment in Owen Sim, at p. 741-743, as follows –

 

“Section 181 opens with the words: “Any member”. There then follows a recital of the other persons who are declared to be entitled to move the Court under the section. The expression “member” is not defined in s. 4 [CA]. However, the meaning of that term is to be found in s. 16(6) [CA] …

 

43

 

A reading of s. 181 reveals that in the latter part of para. (a) of sub-s. (1) to that section the Legislature has used the expression “members, shareholders … of the company”. However, it does not require much intellectual exercise to realise that the sub-section, read as a whole, when using the terms “member” and “shareholder”, refers to the same category of persons within the company. The result, therefore, is that, as a general rule, only one who comes within the terms of s. 16(6) of the Act may present a petition under s. 181. Put another way, in general, a petitioner who applies under the section must be able to demonstrate that his name appears on a company’s register of members at the date of presentation of the petition: if he is unable to do so, then he has no standing to invoke the jurisdiction conferred upon the Court by the section. In this respect, the section differs materially from s. 459 of the Companies Act 1985 of the United Kingdom, for under the latter provision past members have been expressly given locus standi to apply for relief under it.

 

We have, in stating the applicable rule as to standing under s. 181 taken great care in emphasising that what has been expressed is the general rule and not a universal rule. We have done so to bring home the point that there may be cases where an application of the general rule would be unfair or unjust.

 

Take, for instance, the case of a person who has agreed to become a member, but whose name has been omitted from the register of members. If it transpires that prior to the dispute leading to the presentation of the petition, a company or its board had always treated the complainant as a member, it would not be open to them to assert that the petitioner lacked locus standi. Examples may be multiplied without any principle emerging from them. Take the facts of this very case. Here we have a fact pattern where the appellant’s

 

44

 

membership of the company had been terminated in circumstances which are being challenged by him on substantial grounds. The substantial ground he complains of is the deprivation of his membership in the Company. He says that the circumstances attending this deprivation of membership falls within the framework of s. 181(1)(a) and (b). It is the company, acting through its board, that had deprived the appellant of the status of a member. Can the company be now heard to say that the appellant is no longer a member and is therefore disentitled from moving the Court under s. 181 [CA] and from questioning that very deprivation in proceedings brought under the section? We think not. For it does not lie in the mouth of the alleged wrongdoers to say that the appellant has no ground to stand on after having cut the very ground from under his feet. The true principle which governs such cases as the present is housed in the doctrine of estoppel. The doctrine has reached a stage where it may be applied to prevent or preclude a litigant from raising the provisions of a statute in answer to a claim made against him in circumstances where it would be unjust or inequitable to permit him so to do.

 

The equitable jurisdiction by which a personal bar is placed upon a litigant from raising or relying upon the provisions of a statute is also contained in the maxim “equity will not permit statute to be used as an engine of fraud.”

 

It may therefore be quite safely stated that if facts emerge from which it may be determined that it is unjust or inequitable to permit a respondent to a petition under s. 181 to assert or to contend that a petitioner has no locus standi to move the Court, then, he will be estopped from so asserting. Stated in another fashion, a respondent who is guilty of unconscionable or inequitable conduct will not be permitted to raise or rely upon the requirement of membership in order to defeat a petitioner’s standing as

 

45

 

this would amount to his using statute as an engine of fraud. It does not matter how the proposition is formulated so long it has the effect adverted to.

 

We have earlier made our observations upon the conduct of the Company which by its own action had deprived the petitioner of membership and had then asserted his lack of standing to move a petition under s. 181. This conduct does not, in our judgment, entitle the company (for it was the one who raised the issue) from asserting that the appellant lacks standing to present the petition. It matters not that it is the petitioner who relies upon the estoppel. For the true nature of the doctrine is not that it may not be used to found a cause of action, but that it may be invoked to prevent the respondents from asserting the existence or non-existence of facts, the existence or non-existence of which would destroy a cause of action.”

 

(emphasis added); and

 

(b) Owen Sim has been followed by the Singapore Court of Appeal in Kitnasamy s/o Marudapan v Nagatheran s/o Manogar & Anor

 

[2000] 2 SLR 598. In Kitnasamy, at paragraphs 25-27, Chao Hick Tin JA decided as follows –

 

“ The question of “member”

 

25. Under s 216 of the [Companies Act of Singapore], only a member or a holder of a debenture of a company is entitled to seek relief. A registered shareholder is a member. Thus, it is essential for this purpose that a shareholder’s name should be on the

 

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register. As mentioned above, a Registry of Companies search done on 11 January 2000 did not show that the appellant was a registered shareholder of the company. But that is not conclusive. The appellant alleged that according to the company’s auditor, the appellant was a registered shareholder and the Registry of Companies’ records would be updated after the annual returns were filed. There was, therefore, some evidence that he was the registered shareholder.

 

26. In Owen Sim Liang Khui v Piasau Jaya Sdn Bhd & Anor (supra), the Malaysian Federal Court held that under certain circumstances, it would be possible for a person whose name was not on the register of members to petition under s 181 of the Companies Act 1965 (the Malaysian equivalent of our s 216). The basis of this was an estoppel precluding the respondents from raising an objection to the petitioner’s locus standi. In that case, the court held that the requirement that a petitioner under s 181 must be able to demonstrate that his name appears on a company’s register of members at the date of presentation of the petition was only a general, and not a universal, rule. There may be instances where an application of the general rule would be unfair. If it was unjust or inequitable to permit a respondent to a petition under s 181 to assert that a petitioner had no locus standi to move the court, then he would be estopped from so asserting. A respondent who was guilty of unconscionable or inequitable conduct would not be permitted to rely upon the requirement of membership in order to defeat a petitioner’s standing as this would amount to his using the statute as an instrument of fraud. Gopal Sri Ram JCA stated in his judgment at p 134: …

 

27. On the facts as pleaded by the appellant, even if he was not a registered shareholder, it seemed to us that

 

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this was an instance where the appellant had agreed to become a shareholder of the company and had rendered invaluable services to it and due to the default of those responsible for the administration of the company, including the respondents, the appellant’s name as a shareholder was not entered in the register of the company. The belief of the appellant that he was a member was reinforced by the fact that the notice of an EGM scheduled for 14 January 2000, together with a proxy form, were despatched to him. Such documents are only despatched to members. The respondents were thus estopped from asserting that the appellant was not a member”

 

(emphasis added).

 

33. With respect to the learned counsel for the 1st to 4th and 6th Defendants, I exercise my discretion not to strike out the OS on the ground that the 1st to 3rd Plaintiffs are not registered members of the 6th Defendant. This decision is due to the following reasons:

 

(a) in the many cases cited by all the Defendants (including the 5th Defendant), none of the plaintiffs in those cases were members of the companies in question. In this case however, it is not disputed that the 4th Plaintiff is a registered member of the 6th Defendant and has the necessary locus standi to file the OS under s 181 CA. This fact in itself justifies the OS on the part of the 4th Plaintiff. I will discuss later in this judgment the submission by the 1st to 4th and 6th Defendants that the 4th Plaintiff is not the “complainant’ of the alleged oppression in this case and cannot “clothe” the 1st to 3rd Plaintiffs with locus standi to file the OS;

 

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(b) the Plaintiffs have referred to a judgment of a Division Bench (two-member) of the New Delhi High Court (Leila Seth and PK Bahri JJ) in Worldwide Agencies (P) Ltd & Anor v Margaret T. Desor & Ors (1990) 67 Comp Cas 589 regarding the application of, among others, ss 397 and 398 of the Indian Companies 1956 (ICA 1956). Sections 397 and 398 ICA 1956 provide as follows –

 

“397. APPLICATION TO TRIBUNAL FOR RELIEF IN

 

CASES OF OPPRESSION

 

(1) Any members of a company who complain that

 

the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members (including any one or more of themselves) may apply to the Tribunal for an order under this section, provided such members have a right so to apply in virtue of section 399.

 

(2) If, on any application under sub-section (1), the

 

Tribunal is of opinion –

 

(a) that the company’s affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members; and

 

(b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a

 

49

 

winding up order on the ground that it was just and equitable that the company should be wound up; the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.

 

398. APPLICATION TO TRIBUNAL FOR RELIEF IN CASES OF MISMANAGEMENT

 

(1) Any members of a company who complain –

 

(a) that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company; or

 

(b) that a material change (not being a change brought about by, or in the interests of, any creditors including debenture holders, or any class of shareholders, of the company) has taken place in the management or control of the company, whether by an alteration in its Board of directors or manager or in the ownership of the company’s shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company;

 

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may apply to the Tribunal for an order under this section, provided such members have a right so to apply in virtue of section 399.

 

(2) If, on any application under sub-section (1), the

 

Tribunal is of opinion that the affairs of the company are being conducted as aforesaid or that by reason of any material change as aforesaid in the management or control of the company, it is likely that the affairs of the company will be conducted as aforesaid, the Tribunal may, with a view to bringing to an end or preventing the matters complained of or apprehended, make such order as it thinks fit ”

 

(emphasis added).

 

It is to be noted that ss 397(1) and 398(1) ICA 1956 have expressly provided that only a “member’ of a company may apply for relief for oppression. The ICA 1956 has now been replaced by the Companies Act 2013 (ICA 2013). Presently, ss 241-246 ICA 2013 provide for oppression in India.

 

In Worldwide Agencies (P) Ltd –

 

(i) the widow and son of a deceased shareholder of a company had petitioned for, among others, remedies for oppression under ss 397 and 398 ICA 1956. The deceased shareholder was the registered member of the company in question;

 

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(ii) the respondents had raised, among others, a preliminary objection that the widow and son were not members of the company and had no right to petition for oppression; and

 

(iii) Leila Seth J (as Her Ladyship then was) delivered the following judgment for the Division Bench of the New Delhi High Court, at p. 600-601 –

 

“In the present case, admittedly, the legal representatives have been more than anxious to get their names put on the register of members in place of the deceased member, who was the managing director and chairman of the company and had a controlling interest. It would be patently unfair to insist their names must be first put on the register, before they can move an application under sections 397 and 390 [ICA 1956], as admittedly, this is dependent on the board of directors. The board of directors can delay or even mala fide refuse to register the legal representatives of the deceased member and thus completely frustrate the filing of an application under sections 397 and 390 [ICA 1956]. Would it then be proper to insist the legal representatives who have applied for registration must wait until their names are first put on the register of members either under s 155 [ICA 1956] or otherwise before they can move an application and let the oppression continue in the meantime?

 

The contention of learned counsel for the appellant that if legal representatives who are only potential members or persons likely to come on the register of members are permitted to file an application under sections 397 and 390 [ICA 1956], it would create havoc, as, then, persons having blank transfer forms

 

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signed by members, and as such having a financial interest, could also claim to move an application under sections 397 and 390 [ICA 1956], contains a clear fallacy.

 

The fallacy in the argument is that, in the case of persons having blank transfer forms signed by members, it is the members themselves who are shown on the register of members and they are different from persons with the blank transfer forms; whereas, in the case of legal representatives, it is the deceased member who is shown on the register of members and the legal representatives are in effect exercising his right, a right which has devolved on them through the death of the member whose name is still on the register. Thus, in the case of persons holding blank transfer forms, the legal and beneficial title is different, whereas in the case of legal representatives, it is the same.

 

Consequently, we are of the view that legal representatives of the deceased member whose name is still on the register of members are entitled to present a petition under sections 397 and 390 [ICA 1956] as if they are in the shoes of the deceased member.

 

The discretion of the board of directors to refuse registration bona fide is not disputed. But, in the facts and circumstances of the case as above indicated, we are of the view that legal representatives have an immediate legal interest and as long as the deceased member’s name remains on the register, they act for and on his behalf as it were, even though their own membership may be in abeyance. It is in the context of pursuing the right of the deceased member that we

 

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have construed the word “member” to conclude that a petition under sections 397 and 390 [ICA 1956] can be moved by the legal representatives

 

(emphasis added).

 

In Worldwide Agencies (P) Ltd, the personal representatives of the deceased member, namely his widow and son, had not been registered as members of the company in question and yet, the Division Bench of the New Delhi High Court had decided that the personal representatives could file an oppression suit. In my view, Worldwide Agencies (P) Ltd applies a fortiori to this case as the 4th Plaintiff has already been registered in the 6th Defendant’s Register.

 

In Gulabrai Kalidas Naik & Ors v Laxmidas Lallubhai Patel &

 

Ors (1977) 44 Comp Cas 151, at 153, 157, 159 and 163, DA Desai J in the Gujarat High Court held that the court may hear a “composite petition” which applied for a rectification of a company’s register of members under s 155 ICA 1956 (similar to our s 162 CA) and remedies for oppression under ss 397 and 398 ICA 1956. It was decided in Gulabrai as follows –

 

“Now, if the petitioner’s title to the membership is in dispute, and he has to seek relief under s 155 for getting his name placed on the register of members to clothe himself with the rights of a member, it would be improper, till that dispute is decided, to permit such a person to maintain a petition under sections 397 and 398. If the petitioner’s petition under s 155 fails, obviously, they cannot maintain a petition under sections 397 and 398,

 

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because they are not members. Now, it may be that, in a given case, the petitioner invoking court’s jurisdiction under sections 397 and 398 are in a position to show that though their names are not to be found in the register of members of the company, yet they have such an indisputable and unchallengeable title to the membership of the company that court may entertain a petition at their instance.

 

Considering all the aspects of the matter, at this stage, the petition so far as it seeks reliefs under section 155 should be admitted and the consideration of the petition for the purpose of admission for reliefs under sections 397 and 398 should be deferred to a later date and the petition to that extent should not be dismissed. The allegations made are grave and serious and if the petitioners are qualified to maintain the petition, it would be necessary for the court to examine these allegations ”

 

(emphasis added).

 

As explained above, Gulabrai applies a fortiori to the OS because the 4th Plaintiff is already a registered member of the 6th Defendant and there is no dispute that the 1st to 3rd Plaintiffs are the beneficiaries of KLC’s estate;

 

(c) the Plaintiffs in this case have relied on the equitable estoppel exception. The following documentary evidence support the application of the equitable estoppel exception –

 

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(i) letter dated 11.3.2014 from the 4th Plaintiff to the 6th Defendant’s company secretary (4th Plaintiff’s Letter dated 11.3.2014) for the 6th Defendant to transfer the 4th Plaintiff’s shares in the 6th Defendant to the beneficiaries of KLC’s estate (including the 1st to 3rd Plaintiffs) (Shares Transfer Request);

 

(ii) letter dated 11.3.2014 from Messrs Shearn Delamore & Co, the 4th Plaintiff’s solicitors (Messrs SDC), to the 6th Defendant’s company secretary (Messrs SDC’s Letter dated 11.3.2014) which enclosed a copy of the 4th Plaintiff’s Letter dated 11.3.2014 regarding the Shares Transfer Request;

 

(iii) letter dated 14.3.2014 from SMI Corporate Services Sdn. Bhd., the 6th Defendant’s company secretary (SMI), to Messrs SDC (SMI’s Letter dated 14.3.2014) which stated that SMI had referred both the 4th Plaintiff’s Letter dated 11.3.2014 and Messrs SDC’s Letter dated 11.3.2014, to the 6th Defendant’s BOD;

 

(iv) letter dated 20.3.2014 from Messrs SDC to SMI which requested a response from SMI or the 6th Defendant’s BOD on the Shares Transfer Request;

 

(v) letter dated 24.3.2014 to Messrs SDC from the 6th Defendant which was signed by the 4th Defendant as the 6th Defendant’s director (6th Defendant’s Letter dated 24.3.2014) which stated, among others –

 

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(1) the Shares Request Transfer was “not in accordance” with KLC’s will;

 

(2) based on SMI’s records, the 6th Defendant did not have a certified copy of KLC’s will; and

 

(3) in view of the above 2 reasons and to enable the 6th Defendant’s BOD to consider the Shares Request Transfer, the 6th Defendant requested for –

 

(3A) a certified true copy of KLC’s will;

 

(3B) a certified true copy of the agreement dated 25.9.2008 between Ms. Nancy Koo Chee Fung (one of the beneficiaries of KLC’s estate) and the 3rd Plaintiff (Agreement dated 25.9.2008); and

 

(3C) a certified true copy of the “purported agreement/consenf of the other beneficiaries of KLC’s estate to the Agreement dated 25.9.2008; and

 

(vi) Messrs SDC replied to the 6th Defendant’s Letter dated

 

24.3.2014 by way of a letter dated 26.3.2014 (Messrs SDC’s Letter dated 26.3.2014). Messrs SDC’s Letter dated

 

26.3.2014 stated, among others –

 

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(1) the 6th Defendant’s BOD did not require the documents requested in the 6th Defendant’s Letter dated 24.3.2014 because such documents were not disputed by the 6th Defendant. Nor did the 6th Defendant raise these matters in the 1st OS; and

 

(2) Messrs SDC sought the “urgent confirmation” from the 6th Defendant’s BOD to the Shares Transfer Request.

 

The above documentary evidence shows reasonable efforts for the 1st to 3rd Plaintiffs to be registered as the 6th Defendant’s members. It is trite law that for the purpose of deciding a striking out application, the court must consider the contents of the OS to be true. On this ground alone, Court Enc. No. 32 should be dismissed as the 1st to 3rd Plaintiffs are relying on the equitable estoppel exception to maintain the OS. Furthermore, no matter how weak the equitable estoppel exception contention may be, the OS should not be struck out;

 

(d) the High Court has very wide discretionary powers to grant declarations under s 41 of the Specific Relief Act 1950 (SRA) and Order 15 rule 16 RC, despite the fact that a plaintiff has no –

 

(i) locus standi to sue; and

 

(ii) cause of action.

 

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I rely on the following cases –

 

(1) in Al Rashidy Kassim & Ors v Rosman Roslan [2007] 3 CLJ 361, at 375, Arifin Zakaria FCJ (as His Lordship then was) decided as follows in the Federal Court –

 

“ We are of the view that all the circumstances of the case ought to be considered by the court in arriving at a just result. Secondly, following Re Atkinson and Omar Ali bin Mohd., we think the beneficiary has at least an equity in the estate of the deceased to entitle the beneficiary to seek on behalf of the estate the remedy of a declaratory judgment.”

 

(emphasis added);

 

(2) the Court of Appeal’s judgment in Dato’ Raja Ideris bin Raja Ahmad & Ors v Teng Chang Khim (Chairman of the select Committee on Competence, Accountability and Transparency and the Chairman of the Committee of Rights and Privileges State Legislative Assembly of Selangor) & Ors [2012] 5 MLJ 490, at 498 and 499-500, delivered by Low Hop Bing JCA as follows –

 

“[25] The question raised in the aforesaid submissions may be formulated as follows:

 

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Upon a true construction of s 41 [SRA] and O 15 r 16, where the OS prays for a declaratory judgment in the form of declarations, is it proper to strike out the OS on the ground that it discloses no reasonable cause of action?

 

[28] A declaratory judgment merely states the rights or legal position of the parties as they stand without altering them in any way: see Gan Hwa Kian & Anor v Shencourt Sdn Bhd [2007] 4 MLJ 554. ‘A declaration can be used to ascertain and determine the legal rights of parties or to determine a point of law’: Brett Andrew Macnamara v Kam Lee Kuan [2008] 2 MLJ 450 at p 459 per Balia Yusof J (now JCA). By virtue of s 41 and O 15 r 16, the court’s jurisdiction to make a declaratory order is unlimited, subject only to its own discretion. The court has power to grant a declaration irrespective of whether an application has a cause of action or not and even if a cause of action does not exist at the time of the filing of an application: see eg Tan Beng Sooi v Penolong Kanan Pendaftar (United Merchant Finance Bhd, intervener) [1995] 2 MLJ 421; BSN Commercial Bank (M) Bhd v Pentadbir Tanah Daerah, Mersing [1997] 5 MLJ 288; and Cekal Berjasa Sdn Bhd v Tenaga Nasional Bhd [2006] 4 MLJ 284 at p 294, per Abdul Malik Ishak J (now JCA).

 

[29] The jurisdiction to make a declaration under the rule is not confined to cases in which the plaintiff has a complete and subsisting cause of action: Guaranty Trust Co of New York v Hannay [1915] 2 KB 536 (CA) (Eng); Dewan Singh v M Thynappa Ltd & Yeo Teck Chiang [1939] MLJ 278; Haji Hussin bin Haji Ali & Ors v Datuk Haji

 

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Mohamed bin Yaacob & Ors and connected cases [1983] 2 MLJ 227 (FC); Karpal Singh v Sultan of Selangor [1988] 1 MLJ 64; and Tengku Mariam binte Tengku Sri Wa Raja & Anor v Commissioner for Religious Affairs, Terengganu & Ors [1969] 1 MLJ 110. Our answer to the question set out in para [25] is in the negative.

 

CONCLUSION

 

[30] Based on the foregoing grounds, we allow this appeal, set aside the striking out order of the High Court and substitute it with an order that the OS be reinstated and remitted to the High Court and, with the utmost respect, to be heard and disposed of on merits before another judge.”

 

(emphasis added); and

 

(3) in Dr. Mahesan & Ors v Ponnusamy & Ors [1994] 3 MLJ 312, at 323, 324 and 326, Zakaria Yatim J (as His Lordship then was) held as follows –

 

“Mr Thangaraj [plaintiff’s learned counsel] asked the court to declare that the allotment of shares is null and void. However the originating summons does not contain any prayer to that effect.

 

Mr Thangaraj, then asked for leave to amend the originating summons to include a prayer for declaration that the allotment of shares at the board meeting held on 14 May 1994 is null and void. Mr Ong [defendant’s learned counsel] objected to the application for amendment.

 

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The question to be considered here is whether the court has the power to make an order declaring that the allotment of shares at the board of directors meeting held on 14 May 1994 is null and void.

 

From the three cases cited above, it is clear that the court’s jurisdiction to make a declaratory order is unlimited subject only to its own discretion.

 

The court has the power to grant a declaration irrespective of whether the applicant has a cause of action or not. The court has the discretion to grant a declaration even if the cause of action does not exist at the time of the filing of the application.

 

The decision on the allotment of shares would deprive Dr Mahesan and Dr Ampikai of a substantial amount of their shares in the company. I think it is necessary for the court to exercise its discretion to grant the declaration. The question of amending the originating summons does not arise here.’

 

(emphasis added)

 

Based on Al Rashidy Kassim, Dato’ Raja Ideris and Dr. Mahesan, even if the 1st to 3rd Plaintiffs do not have the necessary locus standi under s 181 CA, the 1st to 3rd Plaintiffs as beneficiaries of KLC’s estate, are entitled to apply for declarations in this case and as such, the OS should not be struck out.

 

At this juncture, I should deal with the submission by the 1st to 4th and 6th Defendants based on Prasad Abraham J’s (as His Lordship then was) decision in the High Court case of Aw Eng

 

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Sun & Anor v Lau Kooi Cheun & Ors [2013] 10 MLJ 553. The 1st to 4th and 6th Defendants submitted that according to Aw Eng Sun, the court does not have any power under s 162 CA to grant any declaratory relief. It was decided, among others, in Aw Eng Sun, at p. 565-566, as follows –

 

“[33] The defendants in their counterclaim attempt to

 

seek a rectification of the share register to confirm their position as majority shareholders in the said company ie bundle A, ie paras (79.11) for the aforesaid reasons I would dismiss prayer and the declarations sought in paras (79.10) and (79.12) for the aforestated reasons.

 

[34] The defendants in paras (79.11) of their counterclaim seek a declaration that the shareholding position is as stated by the defendants. Section 162(1) only empowers the court to act in the context of s 162(1), (a)-(b) only. The defendants do not fall within that category as the position of the shareholding is as set out in the Ccm records as at 6 March 2012 (see p 6 of bundle B). The court is not empowered to grant a declaration sought, as it is only empowered to rectify under the said Act and there is no specific application under s 162 of the said Act. I would therefore dismiss prayer (79.11). For the aforesaid reasons I dismiss also paras (79.9) and (79.10).”

 

(emphasis added).

 

I am of the respectful view that Aw Eng Sun may be distinguished from this case as follows:

 

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(i) there is no application under s 162 CA in Aw Eng Sun. Accordingly, any dictum expressed in Aw Eng Sun regarding s 162 CA is merely obiter; and

 

(ii) Aw Eng Sun, at paragraphs 1 and 28, concerned a dispute between 2 groups of shareholders in a company regarding the actual shareholding of each group. The company was not even cited as a party either by the plaintiffs in their claim or by the defendants in the counterclaim.

 

In my respectful opinion, there is nothing in s 162(2)(a) and (b) CA (s 162 CA is reproduced below) which excludes the court’s power to grant declarations under s 41 SRA and Order 15 rule 16 RC. It is trite law that the court’s jurisdiction and powers can only be excluded by clear and express statutory provisions – please see the Federal Court’s judgment delivered by Augustine Paul FCJ in Metramac Corp Sdn Bhd (formerly known as Syarikat Teratai KG Sdn Bhd) v Fawziah Holdings Sdn Bhd [2006] 4 MLJ 113, at 128-129;

 

(e) this judgment will discuss later that the Plaintiffs are entitled to apply to court under s 162(1) CA to rectify the 6th Defendant’s Register. This constitutes another ground why the OS should not be struck out; and

 

(f) the 1st to 3rd and 6th Defendants contend that article 3(a) of the 6th Defendant’s AA [Art. 3(a)] provides that no share in the 6th Defendant may be transferred without the prior approval of the 6th Defendant’s BOD and without in the first instance be offered to the other shareholders of the 6th Defendant at a price considered to

 

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be fair and reasonable by the 6th Defendant’s BOD. At this juncture, I shall not consider whether Art. 3(a) applies or not in this case.

 

I rely on Gopal Sri Ram JCA’s (as His Lordship then was) judgment (concurred by Mohd. Azmi FCJ) in the Federal Court case of Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565, at 576 and 588, as follows –

 

“There is no dearth of authority dealing with the approach that a court should take when exercising its summary jurisdiction under O 18 r 19. The unanimous view is that the summary power ought not to be invoked save in a plain and obvious case: see Bandar Builder Sdn Bhd & Ors v United Malayan Banking Bhd [1993] 3 MLJ 36, per Mohd Dzaiddin SCJ (now FCJ).

 

An examination of the record provided demonstrates that this is not such a case. There are several issues of law that require mature consideration. And there are several issues of fact that are capable of resolution only after taking viva voce evidence.

 

Having given this matter careful consideration, I am convinced that the learned judge was quite wrong in striking out the writ in this case. There was simply no justification for doing so.”

 

(emphasis added).

 

Based on Lai Yoke Ngan, there are at least 3 questions in this case which “require mature consideration” and these 3 questions,

 

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singularly or cumulatively, will defeat a striking out application. The 3 issues are as follows –

 

(i) whether the 4th Plaintiff as a registered member of the 6th Defendant may commence and maintain the OS;

 

(ii) whether the Defendants are estopped from objecting to the locus standi of the 1st to 3rd Plaintiffs in this case; and/or

 

(iii) whether Art. 3(a) applies in this case.

 

J. Can 4th Plaintiff file an oppression suit?

 

34. The 1st to 4th and 6th Defendants contended that the 4th Plaintiff is not the “complainant of the alleged oppression in this case and cannot “clothe” the 1st to 3rd Plaintiffs with the necessary locus standi to file the OS. With respect, I am unable to accede to this submission for the following reasons:

 

(a) if this court accepts such a contention by the 1st to 4th and 6th Defendants, this will be contrary to the clear and express wording of s 181(1) CA conferring locus standi on the 4th Plaintiff to file the

 

OS. Section 181 CA does not mandatorily require a registered member of the company, including an administrator of an estate (Administrator), to have personal knowledge of the matters in respect of an oppression action, before filing the oppression suit;

 

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(b) in Atlasview Ltd & Ors v Brightview Ltd & Ors [2004] 2 BCLC 191, at 202-203, Jonathan Crow (sitting as a Deputy Judge of the English High Court) decided as follows –

 

“[35] The next point taken by the applicants was that,

 

although JGR [first petitioner company] is registered as a member, it cannot complain of any prejudice to its —interests” under s 459 because it is a bare nominee and as such it has no economic interest in the value of the shares in Brightview [first respondent company] registered under its name….

 

[36] Even accepting the truth of all these various factors, the legal submission which they are said to support is in my judgment plainly wrong. The —interests” which s 459 is able to protect include matters going beyond the economic interest of the legal owner in the shares registered in his name. This is clear from one of the Reedbest parties’ [various respondents] own authorities, O’Neill v Phillips[1999] 2 BCLC 1 at 10-11, [1999] 1 WLR 1092 at 1110-1101. The phrase —legitimate expectations” has long been used in this context. For example, they may embrace matters such as an understanding as to the governance of the company, including an understanding that someone other than the registered shareholder should be involved in management: Hoffmann J said as much in Re a company (No 003160 of 1986) [1986] BCLC 391 at 396, and the fact that his remark was obiter does not detract from its force as a matter of logic. To suggest otherwise, as the applicants do, would involve imposing an arbitrary restriction on the scope of the word —interests” in s 459. As a matter of statutory interpretation, there is no

 

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justification for doing so. Indeed, it would in my judgment be a thoroughly retrograde step to do

 

so: …

 

[38] For the purpose of this strike-out application, all I have to decide is whether it is properly arguable that the —interests” of a nominee shareholder under s 459 are capable of including the economic and contractual interests of the beneficial owners of the shares. In my judgment, based on both the language of s 459 and the authorities mentioned above, I consider it to be well arguable: indeed, if I had to decide the point, I would find that it was correct.

 

[39] For these reasons, the claim by JGR cannot be struck out simply on the basis that it was a nominee shareholder

 

(emphasis added).

 

Atlasview Ltd concerned s 459 of the English Companies Act 1985 (ECA 1985) which is similar but not identical to our s 181 CA. Section 459 ECA 1985 has now been replaced by s 994 of the English Companies Act 2006. In Atlasview Ltd, the English High Court refused to strike out an oppression suit by a petitioner who is merely a nominee shareholder of the company in question. Atlasview Ltd applies a fortiori to the 4th Plaintiff who is the executor and trustee of KLC’s estate who owes onerous fiduciary duties to the beneficiaries of KLC’s estate;

 

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(c) even though the Administrator may not have personal knowledge of matters concerning the Oppression Suit, the Administrator may rely on, among others, the following in support of the Oppression Suit –

 

(i) the process of discovery of documents under Order 24 rule 3(1) RC which applies to the OS; and/or

 

(ii) undisputed documentary evidence.

 

If the Administrator has no personal knowledge of the cause of action regarding the oppression suit and has no evidence to support the oppression suit, the Administrator takes the risk of not being able to discharge the legal burden to prove the oppression action. The Administrator may even run the risk of being personally liable for the costs of the oppression suit. There is therefore sufficient recourse for a defendant against an Administrator who has filed a baseless oppression suit. The lack of the Administrator’s personal knowledge of the matters concerning the oppression action, however, does not justify a striking out of the oppression suit;

 

(d) there is nothing objectionable in law and policy for an Administrator to file a suit for the benefit of the estate when the Administrator has no personal knowledge of the matters related to the suit provided that the Administrator acts in good faith to protect the estate’s interest by filing the suit. To deprive the Administrator of the right to file a suit for the benefit of the estate solely because the Administrator does not have personal knowledge of the matters regarding the suit, may cause an

 

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injustice to the beneficiaries of the estate, especially when the delay in filing the suit may attract the application of a limitation defence; and

 

(e) as explained above, the question of whether the 4th Plaintiff is entitled to file the OS or not, in itself, merits a hearing of the OS as laid down in Lai Yoke Ngan.

 

K. Plaintiffs have locus standi to apply under s 162(1) CA

 

35. Section 162 CA reads as follows:

 

“Power of Court to rectify register

 

162(1) If –

 

(a) the name of any person is without sufficient cause entered in or omitted from the register; or

 

(b) default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be a member,

 

the person aggrieved or any member or the company may apply to the Court for rectification of the register, and the Court may refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party to the application.

 

(2) On any application under subsection (1) the Court

 

may decide –

 

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(a) any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members or between members or alleged members on the one hand and the company on the other hand; and

 

(b) generally, any question necessary or expedient to be decided for the rectification of the register.

 

(3) The Court when making an order for rectification of

 

the register shall by its order direct a notice of the rectification to be so lodged.

 

(4) No application for the rectification of a register in respect

 

of an entry which was made in the register more than thirty years before the date of the application shall be entertained by the Court.”

 

(emphasis added).

 

36. As explained above, the OS which applies for both relief under ss 162 and 181 CA, be it described as a “hybrid’ or “composite” OS –

 

(a) is not barred by Lai Kim Loi; and

 

(b) has been upheld in Gulabrai.

 

37. A literal interpretation of s 162(1) CA shows 2 categories of persons who may apply to court to rectify a company’s register of members:

 

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(a) any non-member of a company who is “aggrieved” by any of the matters stated in s 162(1)(a) or (b) CA; and

 

(b) any registered member of the company in question.

 

38. I am of the view that the Plaintiffs have locus standi to apply for the rectification of the 6th Defendant’s Register under s 162(1) CA. This decision is due to the following reasons:

 

(a) when the 6th Defendant did not allow the Shares Transfer Request made by Messrs SDC, the names of the 1st to 3rd Plaintiffs have been omitted from the 6th Defendant’s Register without sufficient cause within the meaning of s 162(1)(a) CA;

 

(b) the 1st to 3rd Plaintiffs are “aggrieved’ by the 6th Defendant’s refusal to allow the Shares Transfer Request under s 162(1) CA and may make the rectification application to court; and/or

 

(c) the 4th Plaintiff as a “member’ of the 6th Defendant may also apply to court under s 162(1) CA to rectify the 6th Defendant’s Register.

 

39. Section 194 of the Singapore Companies Act (SCA) is in pari materia with our s 162 CA. Singapore cases on the interpretation of s 194 SCA are therefore persuasive in the construction of s 162 CA. In Sing Eng (Pte) Ltd v PIC Property Ltd [1990] 1 SLR 81 –

 

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(a) 2 shareholders of the appellant company had, among others, executed blank share transfer forms in respect of shares owned by them in the appellant company. The 2 shareholders then deposited the executed blank share transfer forms and the share certificates with Xiamen International Bank (XIB);

 

(b) XIB intended to register the shares in the name of XIB’s nominee, XIB (Nominees) Ltd. (XIB Nominees);

 

(c) XIB sold the shares in the appellant company to the respondent company;

 

(d) the respondent company applied to the court under s 194(1) SCA to strike out the names of the 2 shareholders and substitute their names with XIB Nominees. Surprisingly, XIB Nominees was not made a party in this suit; and

 

(e) the Singapore High Court allowed the rectification application but this was reversed by the Court of Appeal on, among others, the following ground, at paragraphs 10, 11 and 13-19 –

 

“10. The case which PIC [respondent company] seeks to make out is one under para (a) of s 194(1). In this connection, it is necessary to examine the contents of the two transfers submitted to the company for registration. Each was expressed to be a transfer by XIB of 514,930 shares of the company to XIB Nominees as nominee of PIC, the owner

 

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of the shares, and for consideration paid by PIC; each was executed by XIB as the transferor and XIB Nominees as the transferee. Hence, it is XIB Nominees whose name the company has refused to enter in the share register. XIB Nominees, therefore, falls squarely within the words, ‘the person aggrieved’, in s 194(1) [SCA]. However, XIB Nominees is not the party who brought the application; it is not a party to these proceedings at all. The application was brought by PIC and the question is whether PIC is also the person aggrieved within the meaning of s 194(1) [SCA].

 

11. Counsel for PIC submits that s 194 provides a

 

summary procedure for a person aggrieved or a member or the company to apply to court to rectify the share register, and that such a person aggrieved could be one who has sold his shares in the company or one who has bought shares in the company. A person who has bought shares is entitled to have the shares registered either in his own name or in the name of a nominee as nominee for him, and if he chooses the latter and that is denied to him, then he is the person aggrieved within the meaning of s 194(1) and is entitled to apply under that section for rectification of the share register of the company. The person aggrieved in s 194(1), in so far as para (a) thereof is concerned (as para (b) is not relevant in this appeal), does not mean only the person whose name has been entered in or omitted from the share register; if this were so, the appropriate words used in s 194(1) would be ‘such person’ and not ‘the person aggrieved’, as in such a case the word ‘aggrieved’ would be superfluous. The meaning of the words, ‘the person aggrieved’, therefore, extends to include any other person aggrieved by the decision of the company as regards an entry in or omission from its share register. We are unable to accept this submission. First, a person who has bought shares in a company is not entitled, save as provided in [SCA] and the articles of association of the company, to have the shares registered in the name of his nominee as nominee for him. Where a person’s shares are registered in the name of his nominee, his nominee vis-a-vis the company holds the shares as the

 

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absolute owner in his own right and not in a representative capacity, such as a nominee or trustee. [SCA] by s 195 provides for registration of shares of the estate of a deceased person in the name of any trustee, executor or administrator of such estate, and subject to this, the same section by sub-s (4) thereof expressly provides that no notice of a ny trust expressed, implied or constructive shall be entered on the share register of a company. …

 

13. Therefore, PIC was clearly in error in seeking to have

 

the name of XIB Nominees as its nominee entered in the register of the company in respect of the shares comprised in the two transfers. It seems to us that on this ground alone, the company would be justified in rejecting the transfers for registration.

 

14. Secondly, the provision in s 194(1) does not admit of

 

such a wide construction as contended on behalf of PIC. The words, ‘the person aggrieved’, are preceded by the words in paras (a) and (b); the words in para (a) refer to a person whose name is without sufficient cause entered in or omitted from the register and those in para (b) refer to a person who has ceased to be a member but default is made or unnecessary delay takes place in entering in the register the fact of his cessation as a member. Therefore, the words, ‘the person aggrieved’, must necessarily mean and refer to a person falling within para (a) or (b) of s 194(1). Such a person is ‘the person aggrieved’ and we do not see how the word ‘aggrieved’ in the context of this section can be considered to be superfluous.

 

15. Counsel for PIC next relies on the decision of the High

 

Court in Malaysia in Allied Properties Sdn Bhd v Semua Holdings Sdn Bhd & Ors [1988] 3 MLJ 185. In that case, the plaintiff, who was the ultimate beneficial owner of the shares in question of a company, took out an application under s 162 of the Malaysian Companies Act 1965 (which is in pari materia with s 194 of our Companies Act) complaining that the company, one of the defendants, had

 

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omitted without sufficient cause to register the shares in the name of the plaintiff’s nominees. The High Court held that the plaintiff was the aggrieved party and was entitled to bring the application. The relevant part of the transcript of the judgment relied on by counsel for PIC reads as follows:

 

From the undisputed facts, it is very clear that D & C Bank Nominees Sdn Bhd are the agents of the applicant, who is the ultimate beneficial owner of the shares to be registered. As the ultimate beneficial owner, there can be no doubt whatsoever that the applicant is the person aggrieved by the refusal of the first respondent to register the shares in either its name or of its nominees. The fact that the nominees are not made party to this action is quite immaterial to the real issue at hand which is whether the respondents have a right to refuse registration, and if so, whether that right has been properly and legally exercised.

 

16. We respectfully agree with the propositions of law as stated in this passage of the judgment but not in the context of a statutory provision such as that found in s 194(1) of our Act. A person in the position of the plaintiff in that case is undoubtedly a person aggrieved – aggrieved by the refusal of the company to register the shares in the name of his nominee — but he is not, in our opinion, on the true construction of s 194(1) ‘the person aggrieved’ within the meaning of that section. With respect, we are unable to follow that decision.

 

17. Reverting to the facts of the instant case, aggrieved no doubt PIC was by the refusal of the company to enter in its register the name of XIB Nominees as nominee of PIC; in that sense PIC is the person aggrieved. But PIC is not, in our opinion, the person aggrieved within the meaning of s 194(1) of the Act.

 

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18. We are fortified in our view by the Australian case, The New Lambton Land & Coal Co Ltd v The London Bank of Australia Ltd & Ors(1904) 1 CLR 524. In that case, The London Bank of Australia Ltd made an application under s 232 of the Companies Act of New South Wales (which section is in pari materia with s 194 of our Act) for rectification of the share register of the company, The New Lambton & Coal Co Ltd, by removing the name of one Alexander Brown as holder of 7,000 shares and by entering in the register the names of the bank’s nominees, JL Ballantyne and EW Bancroft as holders thereof. Initially, the application was taken out only by the bank, but at the hearing of the application, Walker J, on application by the bank, ordered that an amendment be made to the application by joining both Ballantyne and Bancroft with the bank as applicants. That amendment having been made, the learned judge then granted the application. Clearly, these two persons, though nominees for the bank, ought to be joined as parties to the application as they were the only persons aggrieved within the meaning of s 232 of the NSW Act. Against the decision of the learned judge the company appealed. In dismissing the appeal, Griffith CJ dealt very briefly with this point at p 539, as follows:

 

First of all it is urged that the motion by the bank could not be heard by the court, because it did not come within the meaning of s 232, which provides that application may be made by ‘the person or member aggrieved’. In this case, it is said, the bank is not a member, and the only persons aggrieved were Bancroft and Ballantyne. Technically, perhaps, the transferees are the only persons aggrieved. But as the case is now presented to us, it is not necessary to decide this point, though it might have been if there had been no amendment. In favour of the contention it is urged that this is a section which gives a summary remedy and procedure, and can only be taken advantage of by the persons for whose relief it is expressly intended. But the court of equity could give the same relief in a suit, and if the application had been made to the Supreme Court in its equitable jurisdiction that court would have

 

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entertained it, and the principles of equity would have been applied. One of those principles is that the person who is in substance interested in a matter may move the court in his own name, and may join the trustee as a party in the suit, either as a plaintiff or a defendant. But the power of the court to entertain the suit and add necessary parties is never restricted merely on account of a original absence of formal parties.

 

19. In our judgment, PIC, not being the person aggrieved

 

within the meaning of s 194(1), is not entitled to take out and maintain this application under that section .”

 

(emphasis added).

 

Based on Sing Eng (Pte) Ltd, the 1st to 3rd Plaintiffs are clearly “aggrieved’ by the 6th Defendant’s refusal to allow the Shares Transfer Request within the meaning of s 162(1)(a) CA.

 

40. As discussed above, based on Lai Yoke Ngan, whether the Defendants may rely on Art. 3(a) to resist a rectification application by the Plaintiffs, should be resolved at the hearing of the OS and not by resorting to an unjust and drastic remedy of striking out the OS.

 

L. Can OS be struck out if there are factual disputes?

 

41. All the Defendants have cited a host of cases which have decided that if there are factual disputes in a matter, OS is not the appropriate procedure and a writ action should be filed. According to the

 

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Defendants, as there are factual disputes in this case, the OS should be struck out on this ground alone.

 

42. The following provisions in Order 28 RC are pertinent:

 

“ Order 28 rule 4 Directions by Court

 

4(1) The Court hearing an originating summons may, if the liability of the defendant to the plaintiff in respect of any claim made by the plaintiff is established, make such order in favour of the plaintiff as the nature of the case may require, but where the Court makes an order under this paragraph against a defendant who does not appear at the hearing, the Court, if satisfied that it is just to do so, may rehear the originating summons.

 

(2) Unless on the first hearing of an originating summons

 

the Court disposes of the originating summons altogether or orders the cause or matter begun by it to be transferred to a Subordinate Court or makes an order under rule 8, the Court shall give such directions as to the further conduct of the proceedings as it thinks best adapted to secure the just, expeditious and economical disposal thereof.

 

(3) Without prejudice to the generality of paragraph (2),

 

the Court shall, at as early a stage of the proceedings on the originating summons as appears to it to be practicable, consider whether there is or may be a dispute as to fact and whether the just, expeditious and economical disposal of the proceedings can accordingly best be secured by hearing the originating summons on oral evidence or mainly on oral evidence and, if it thinks fit, may order that no further evidence shall be filed and that the originating summons shall be heard on oral evidence or partly on

 

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oral evidence and partly on affidavit evidence, with or without cross-examination of any of the deponents, as it may direct.

 

(4) Without prejudice to the generality of paragraph (2),

 

and subject to paragraph (3), the Court may give directions as to the filing of evidence and as to the attendance of deponents for cross-examination and any other directions.

 

Order 28 rule 8 Continuation of proceedings as if cause or

 

matter begun by writ

 

8(1) Where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it may order the proceedings to continue as if the cause or matter had been so begun and may, in particular, order that pleadings shall be delivered or that any affidavits shall stand as pleadings, with or without liberty to any of the parties to add thereto or to apply for particulars thereof.

 

(2) Where the Court decides to make such an order referred to in rule (1), Order 34 shall apply with the necessary modifications.

 

(3) This rule applies notwithstanding that the cause or matter in question could not have been begun by writ.

 

(4) Any reference in these Rules to an action begun by writ shall, unless the context otherwise requires, be construed as including a reference to a cause or matter proceedings in which are ordered under this rule to continue as if the cause or matter had been so begun.

 

Order 28 rule 9 Order for hearing or trial

 

9 Except where the Court disposes of a cause or matter

 

begun by originating summons or orders it to be transferred to a Subordinate Court or makes an order in relation to it under rule 8 or other provisions of these Rules, the Court shall, on being satisfied that the cause or matter is ready for determination, make

 

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an order for the hearing or trial thereof in accordance with this rule ”

 

(emphasis added).

 

43. As explained above, Order 88 rule 2 RC mandatorily requires the Plaintiffs to file the OS for relief under ss 162 and 181 CA. Order 28 RC specifically provides for the procedure for the hearing of originating summonses. Once the OS is filed, the following provisions in Order 28 RC apply:

 

(a) if the OS is not disposed of at the first hearing of the OS, Order 28 rule 4(2) RC provides that the court “shall give such directions as to the further conduct of the proceedings as it thinks best adapted to secure the just, expeditious and economical disposal’ of the OS. I am of the view that Order 28 rule 4(2) RC is a mandatory provision by reason of the use of the word “shall’ in that provision – please see the Federal Court case of Yap Min Woie, at p. 172173;

 

(b) if there is no factual dispute, the court may proceed to hear the OS based on affidavit evidence; and

 

(c) if there is a factual dispute, Order 28 rule 4(3) RC provides that without prejudice to Order 28 rule 4(2) RC, the court “shall’ consider the following 3 options (3 Options) so as to secure a “just, expeditious and economical disposal” of the OS –

 

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(i) the court may hear the OS on “oral evidence” as provided in Order 28 rule 4(3) RC (1st Option). In accordance with the 1st Option, the court may direct a trial pursuant to Order 28 rule 9 RC;

 

(ii) the court may hear the OS “partly on oral evidence and partly on affidavit evidence, with or without cross-examination of any of the deponents” (2nd Option) under Order 28 rule 4(3) and (4) RC; or

 

(iii) pursuant to Order 28 rule 8(1) RC, the court may order the OS to continue as if the OS has been begun by writ (3rd Option).

 

44. The above interpretation of Order 28 rules 4(2), (3), (4), 8(1) and 9 RC is consistent with Order 1A and Order 2 rule 1(2) RC so as to achieve the overriding interest of justice.

 

45. This court is not minded to strike out the OS solely on the existence of factual disputes in this case. Such a decision is made for the following reasons:

 

(a) all factual disputes in the OS may be resolved by resort to any of the 3 Options. The Defendants are at liberty to invoke any of the 3 Options in this case. After this court has delivered its oral decision to dismiss Court Enc. No. 32 on 15.5.2015 and before this written judgment is completed, the 2nd to 4th and 6th Defendants have filed court enc. no. 91 (Court Enc. No. 91) on 19.6.2015 to cross-

 

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examine the 1st and 3rd Plaintiffs as well as Ms. Moy and Henry. This court has yet to hear Court Enc. No. 91 but any factual issue alleged by the 1st to 4th and 6th Defendants may be resolved by way of Court Enc. No. 91;

 

(b) the Plaintiffs have already exercised the 2nd Option by applying in Court Enc. No. 29 for leave to cross-examine the 1st Defendant. This court will discuss Court Enc. No. 20 subsequently in this judgment; and

 

(c) if an originating summons is struck out solely on the ground that there is a factual dispute without any resort to the 3 Options, unless limitation period has set in, the plaintiff in question, will file another suit, presumably a writ action. Such a consequence is not in the public interest to ensure a final, expeditious and economical disposal of cases. On the other hand, the exercise of any one the 3 Options ensures that an originating summons is finally, expeditiously and economically disposed of in the interest of the –

 

(i) parties in particular; and

 

(ii) public in general.

 

46. All the cases relied on by the Defendants (except for Aw Eng Sun) have been decided before the enforcement of Order 1A and Order 2 rule 1(2) RC. In Aw Eng Sun –

 

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(a) a writ action was filed (at paragraph 18, p. 561); and

 

(b) the claim and counterclaim had been decided on their merits. There was no application to strike out the claim and counterclaim.

 

I am of the view that Aw Eng Sun does not support Court Enc. No. 32.

 

M. Is there any ground to strike out OS?

 

47. In view of the above reasons –

 

(a) the OS is not scandalous, frivolous or vexatious within the meaning of Order 18 rule 19(1)(b) RC;

 

(b) there is no prejudice, embarrassment or delay of the hearing of the OS to the detriment of the 1st to 4th and 6th Defendants as understood in Order 18 rule 19(1)(c) RC; and

 

(c) this suit does not constitute an abuse of court process so as to invoke the court’s inherent jurisdiction or power under Order 18 rule 19(1)(d) and Order 92 rule 4 RC.

 

48. In dismissing Court Enc. No. 32, costs should be paid to the Plaintiffs by the 1st to 4th and 6th Defendants. This court however declines to exercise its discretion to order costs of Court Enc. No. 32 to be paid by

 

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the 5th Defendant despite the fact that the 5th Defendant has filed 2 detailed written submissions and 2 bundles of authorities in support of Court Enc. No. 32. This is because even if Court Enc. No. 32 is allowed, the OS still subsists as against the 5th Defendant

 

N. Court Enc. No. 29

 

49. In Court Enc. No. 29, the Plaintiffs apply for, among others –

 

(a) leave to cross-examine the 1st Defendant on the truth of certain statements made by the 1st Defendant in the 1st Defendant’s 3 affidavits (court enclosure nos. 7, 16 and 22) (1st Defendant’s 3 Affidavits) which have been specified in Court Enc. No. 29 (Specified Statements of 1st Defendant);

 

(b) all the Specified Statements of 1st Defendant shall not be read and used as evidence in the OS if the 1st Defendant fails, refuses and/or neglects to attend cross-examination on the day and time set by the court (Prayer 2 of Court Enc. No. 29); and

 

(c) costs.

 

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N1. Statutory bases for cross-examination of deponent of affidavit

 

50. The Plaintiffs have relied on Order 28 rule 4, Order 38 rule 2, Order 41 and/or Order 92 rule 4 RC as well as the court’s inherent jurisdiction to support Court Enc. No. 29.

 

51. I am of the view that Order 28 rule 4(3) and (4) [reproduced above] and Order 38 rule 2(2) RC provide discretionary power for the court to order a deponent of an affidavit to be cross-examined. Order 38 rule 2(2) RC reads as follows:

 

“rule 2(2) In any cause or matter begun by originating summons and on any application made by notice of application, evidence shall be given by affidavit unless in the case of any such cause, matter or application any provision of these Rules otherwise provides or the Court otherwise directs, but the Court may, on the application of any party, order the attendance for cross-examination of the person making any such affidavit, and where, after such an order has been made, the person in question does not attend, his affidavit shall not be used as evidence without the leave of the Court .”

 

(emphasis added).

 

52. As cross-examination of a deponent of an affidavit has been expressly provided by Order 28 rule 4(3) and (4) and Order 38 rule 2(2) RC, there need not be any resort to the court’s inherent jurisdiction or

 

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Order 92 rule 4 RC. The following 2 judgments of our apex court have decided that there should not be any reliance on the court’s inherent jurisdiction when there is an express statutory provision:

 

(a) the Supreme Court’s judgment delivered by Syed Agil Barakbah SCJ in Permodalan MBF Sdn Bhd v Tan Sri Datuk Seri Hamzah bin Abu Samah & Ors [1988] 1 MLJ 178, at 181; and

 

(b) the judgment of Zulkefli FCJ (as His Lordship then was) in the Federal Court case of Majlis Agama Islam Selangor v Bong Boon Chuen [2009] 6 MLJ 307, at 320.

 

N2. Submission of 1st to 4th and 6th Defendants

 

53. Learned counsel for the 1st to 4th and 6th Defendants have advanced the following contentions to resist Court Enc. No. 29:

 

(a) Court Enc. No. 29 has not been made “at the earliest stage possible as is practicable”;

 

(b) the Plaintiffs have filed Court Enc. No. 29 based on mala fide;

 

(c) the court should only exercise its power to order the crossexamination of a deponent of an affidavit if the following “3 prime considerations” are cumulatively fulfilled –

 

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(i) the truth of the Specified Statements of 1st Defendant have been challenged or the issue of fact has been identified;

 

(ii) cross-examination should only be allowed if the disputed fact is relevant to the issue to be decided in the OS; and

 

(iii) cross-examination will advance the cause of justice and cross-examination will be refused if there is sufficient affidavit evidence or contemporaneous documents.

 

The “3 prime considerations” have been laid down by the Tengku Baharudin Shah JCA’s majority judgment of the Court of Appeal in Tetuan Kumar Jaspal Quah & Aishah (suing as a firm) v The Co-Operative Central Bank Ltd [2007] 4 MLJ 638, at 651. The 1st to 4th and 6th Defendants have submitted that the Plaintiffs have failed to satisfy all the “3 prime considerations”; and

 

(d) the 1st Defendant is now 94 years old and there is medical evidence that the 1st Defendant is “prevented from understanding the questions put to [the 1st Defendant] or from giving rational answers to those questions” by “extreme old age” under s 118 of the Evidence Act 1950 (EA).

 

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N3. How should court exercise discretion under Order 28 rule 4(3), (4) and Order 38 rule 2(2) RC?

 

54. Before I discuss the merits of Court Enc. No. 29, I will state my own understanding of Malaysian cases in respect of the exercise of the court’s discretionary power to order or refuse cross-examination of a deponent of an affidavit.

 

55. Firstly, whether the court exercises its discretion to allow or not the cross-examination of a deponent in a particular case, is dependent on the particular facts of that case. As such, judgments on the issue of cross-examination of deponents, in my view, are purely illustrative and are not binding legal precedents from the view point of the stare decisis doctrine. I cite Mahadev Shankar JCA’s judgment in the Court of Appeal case of Structural Concrete Sdn Bhd v Wing Tiek Holdings Bhd [1997] 1 CLJ 300, at 306, as follows:

 

“Exercises of judicial discretion are not judicial precedent because they are only authority for the facts of the particular case.’

 

56. Secondly, Order 28 rule 4(3) and (4) and Order 38 rule 2(2) RC do not lay down any consideration, let alone a “prime consideration”, to be taken into account by the court in the exercise of its discretion regarding Court Enc. No. 29. This is understandable as the court’s discretion under Order 28 rule 4(3) and (4) and Order 38 rule 2(2) RC,

 

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in my opinion, should not be fettered. I rely on the High Court judgment by Raja Azlan Shah J (as His Royal Highness then was) in Gomez v Gomez [1969] 1 MLJ 228, at 228 and 230, as follows

 

“ This case raises the singularly important question as to whether a person other than the deponent to an affidavit can be cross-examined. Order 38 rule 1 [RSC] provides that”a judge may, on the application of either party, order the attendance for crossexamination of the person making any such affidavit.”

 

These cases [on cross-examination of deponents] are not to be read as laying down rules of universal application. If once it were taken as settled, then there is no room for the exercise of discretion but a rule of law is substituted for it. The power given by Order 38 rule 1 is obviously a matter of discretion to be exercised in accordance with well-known judicial principles.”

 

(emphasis added).

 

I am mindful of Tengku Baharudin Shah JCA’s majority judgment of the Court of Appeal in Tetuan Kumar Jaspal Quah & Aishah (which laid down the “3 prime considerations”). It must be pointed out that in Tetuan Kumar Jaspal Quah & Aishah –

 

(a) Tengku Baharudin Shah JCA held as follows, at p. 653-654 –

 

“[32] In the second place, an application to the registrar for a review of taxation does not require

 

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affidavit evidence unless the court permits. Since no direction to admit any evidence had been made by the court, any application for crossexamination on affidavit is irrelevant and in any case premature. The distinction between O 38 r 2(3) RHC and its predecessor O 31 r 1 RSC seems to have escaped the attention of the parties. The significant difference is the addition of the underlined words in the present rule as follows:

 

The addition of the last batch of words above must necessarily mean that in the situation now prescribed i.e. where ‘these rules otherwise provides’ and where ‘the court otherwise directs’, evidence may not be given by affidavit. An application for review of taxation is made under O 59 r 34 RHC which is a rule that provides otherwise in that r 34(3) does not require any affidavit to be filed nor evidence to be adduced. It merely provides for the applicant for a review to ‘deliver to the registrar objections in writing specifying by a list the items or parts of items the allowance or disallowance of which or the amount allowed in respect of which is objected to and stating concisely the nature and grounds of the objection in each case.’ It is only on reviewing the decision on any item that r 35 empowers the registrar, if he should think fit or desirable, to receive further evidence or exercise all other powers which he might exercise on an original taxation. Accordingly, until the court deems it fit to require further evidence for the purpose of review any affidavit filed would be irrelevant to the proceedings. ”

 

(emphasis added).

 

It is clear that Tetuan Kumar Jaspal Quah & Aishah concerns the High Court’s revision of the Senior Assistant Registrar’s taxation of costs under the then applicable RHC and this does not

 

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require affidavit evidence. Hence, the application to crossexamine the deponent in Tetuan Kumar Jaspal Quah & Aishah is not necessary and the dicta regarding the “3 prime considerations” in Tetuan Kumar Jaspal Quah & Aishah, in my

 

respectful opinion, is merely obiter; and

 

(b) Zaleha Zahari JCA (as Her Ladyship then was) was the other majority judge in Tetuan Kumar Jaspal Quah & Aishah. Her Ladyship did not refer to the “3 prime considerations” and decided in Tetuan Kumar Jaspal Quah & Aishah, at p. 655-656, as follows –

 

“[42] I am in agreement with the decision of the learned judge that the issue can be decided without reference to any cross-examination and that a decision can be made from the contemporaneous documents in the court file in order to arrive at a decision on the matters in issue. The proposed cross-examination as to whether the appellant’s firm or Vijay Kumar Natarajan himself was appointed to represent the respondent is at the best, of little relevance and the cross-examination was rightly refused as the contemporaneous records from the court file would clearly show the names of counsel from the appellant’s firm who conducted the hearing of the applications in issue. ”

 

(emphasis added).

 

57. Thirdly, the court should be slow to grant leave for cross-examination of a deponent in an interlocutory matter. This is understandable as cross-examination of a deponent in an interlocutory application, will inevitably delay the disposal of the interlocutory application and this in

 

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turn, will ultimately delay the final disposal of the case. I cite the following High Court cases (in chronological order):

 

(a) Lim Beng Choon J decided as follows in Balwant Singh Purba v R Rajasingam [1987] CLJ (Rep) 468, at 469 –

 

“This is an application made by the plaintiff for leave pursuant to O. 38 r. 2(3) [RHC] to cross-examine the defendant in respect of the affidavit made by him in support of his application to set aside the interim injunction granted by this Court on 18 December 1986. I dismissed this application after hearing the submissions of Counsel of the respective parties.

 

For purpose of this judgment I need only mention two of the principles. The first one is mentioned in the following passage appearing at p. 592 of the English Supreme Court Practice [1979] Vol. 1:

 

There is a discretion as to ordering crossexamination on affidavits filed on interlocutory applications. Cross-examination upon affidavits sworn in applications for interlocutory injunctions is very rare.

 

The second principle is that the power as conferred by the said O. 38 r. 2(3) can be invoked only in respect of an issue which the Court is asked to determine in the interlocutory proceeding and not in respect of any other issue which should be determined at the trial of the action proper ”

 

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(emphasis added);

 

(b) Syarikat Tungaring Kilang Papan Sdn Bhd v Sabah Forest Industries Sdn Bhd & Ors [1990] 2 MLJ 38, at 39, concerned an application to cross-examine 2 deponents of affidavits filed in respect of an interlocutory injunction application. In Syarikat Tungaring Kilang Papan Sdn Bhd, at p. 42, Haidar J (as His Lordship then was) followed Lim Beng Choon’s judgment in Balwant Singh Purba; and

 

(c) in SAP (M) Sdn Bhd & Anor v I World HRM Net Sdn Bhd & Anor [2006] 2 MLJ 678, at 683-684, Vincent Ng J (as His Lordship then was) held as follows –

 

“[14] In an application for interim injunction the court is only required to determine whether there are serious issues to be tried. The court is not required to make a decision on the merits of the case at this stage. Leave to cross-examine a deponent of affidavit in interim injunction should be sparingly granted as it would allow the parties to have a rehearsal before the trial and such rehearsals could have an oppressive effect.

 

[15] I would hold that the granting of leave to crossexamine a deponent of affidavit in interim injunction would in effect be allowing a fine tooth comb examination of affidavit evidence even at the interlocutory proceeding stage. This would result in the opening of flood gates which would allow the defendants to adopt delay tactics in future interim injunction applications and should be avoided.

 

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[16] At the interim injunction stage the court is not required to go into minute details. The test is simply whether there are serious issues to be tried based on the affidavit evidence.

 

[17] In both Balwant Singh Purba v R. Rajasingam [1996] 2 MLJ 549 and Syarikat Tunggaring Kilanig Papan Sdn Bhd v Sabah Forest Industries Sdn Bhd [1990] 2 MLJ 38 on applications for interim injunction the court refused leave to crossexamine. It was stated that cross-examination upon affidavit sworn in application for interlocutory injunction is very rare. Also crossexamination can only be evoked in respect of an issue which the court is asked to determine in the interlocutory proceeding and not in respect of any other issue which should be determined at the trial of the action proper.

 

[18] I am of the view that the defendants at this stage of the proceedings should not be allowed to crossexamine the deponent to test the veracity of the witness because this will actually go to the merits of the case. To allow the defendants, at this early stage of the proceedings, to cross-examine when an urgent injunction is sought, would only have the effect of delaying the prompt determination of the merits of the application for injunction – perhaps this was the intention of the defendants, who in any event is not precluded from, filing further affidavits to counter assertions in the plaintiffs affidavits that were sought to be impugned.”

 

(emphasis added).

 

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58. Fourthly, an applicant for leave to cross-examine a deponent bears the legal burden to persuade the court to exercise its discretion to grant leave. This is clear from the Tengku Baharudin Shah JCA’s majority judgment of the Court of Appeal in Tetuan Kumar Jaspal Quah & Aishah, at p. 649, as follows:

 

“[18] It was the appellant’s contention, relying on an extract from the High Court judgment in Gomez v Gomez [1969] 1 MLJ 228, that the onus is on the respondent to show why cross-examination should not be allowed which in this case the respondent has failed to do. It was also contended that only in exceptional cases should the judge refuse an application to crossexamine a deponent on his affidavit — see Collin LJ in Comet Products UK Ltd v Hawkex Plastics Ltd & Anor [1971] 2 QB 67 at p 77.

 

[19] With respect, I do not think these are correct statements of the law in this country.”

 

(emphasis added).

 

59. Fifthly, in respect of an originating summons for final relief, the following factors should be considered by the court in the exercise of its discretion to allow or not the cross-examination of a deponent:

 

(a) the application to cross-examine a deponent should be made in good faith. Any such application should not be made –

 

(i) based on mala fide; or

 

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(ii) for an improper or collateral purpose to –

 

(1) delay proceedings; or

 

(2) harass, intimidate and/or oppress the deponent and/or opposing party.

 

The following High Court cases demonstrate the need for a bona fide application for leave to cross-examine a deponent –

 

(i) Salleh Abas FJ (as His Lordship then was and sitting as a High Court judge) held as follows in Leisure & Allied Industries Pty Ltd v Udaria Sdn Bhd [1980] 1 MLJ 189, at 190 –

 

“To allow or not to allow the respondent’s application to cross-examine the appellant’s witnesses upon their affidavits, I take it, is a matter of court’s discretion. In appropriate circumstances, there is no reason why such application should be refused merely because the deponent is a foreigner living outside the jurisdiction (Re Lucas [1952] 1 All ER 102); “otherwise foreigners would have an advantage” (Strauss v Goldschmidt 8 SLR 239). It is really a matter of common sense and an elementary legal principle that a party who swears an affidavit much be prepared to stand up to it by crossexamination unless the application to cross-examine him is without just cause vexatious or motivated by desire to delay the proceedings (Allen v Allen [1894] P

 

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239). In view of the appellant’s application for judgment under Order 32 Rule 6, I am not, however, prepared to hold the respondent’s application to cross-examine the appellant’s witnesses as being without just cause or motivated by desire to delay the proceedings or without bona fide or sham or vexatious.”

 

(emphasis added); and

 

(ii) in Emporium Jaya (Bentong) Sdn Bhd v Emporium Jaya (Jerantut) Sdn Bhd (No 2) [2002] 5 MLJ 675, at 685, Ramly Ali J (as His Lordship then was) decided as follows –

 

“In order to enable me to exercise my judicial discretion as regards the present applications made by the applicants in the present case, it is necessary for me to see how the proposed cross examination would be relevant to the issue in the petition. An examination of this issue is therefore essential in order to enable me to determine whether the applications are made ‘without just cause, or motivated by desire to delay proceedings or without bona fide or sham or vexatious.’ ”

 

(emphasis added);

 

(b) relevant issue(s) for cross-examination should be sufficiently identified by the applicant [Identified Issue(s)]. This is to ensure that the proposed cross-examination does not constitute a

 

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harassment, intimidation and/or oppression of the deponent and/or opposing party. This consideration is stated in the following cases –

 

(i) Siti Norma Yaakob FCJ’s (as Her Ladyship then was) judgment in the Court of Appeal case of Indrani a/p Rajaratnam & Ors v Fairview Schools Bhd [2001] 4 MLJ 56, at 61 (concurred by KC Vohrah JCA, at p. 62 and 64-65); and

 

(ii) Tengku Baharudin Shah JCA’s majority judgment of the Court of Appeal in Tetuan Kumar Jaspal Quah & Aishah, at p.

 

651;

 

(c) there must be a conflict in affidavit evidence in respect of the Identified Issue(s) so as to necessitate a cross-examination of the deponent in question. The truth of the averment in an affidavit must be challenged. Once again, I rely on Tengku Baharudin Shah JCA’s majority judgment of the Court of Appeal in Tetuan Kumar Jaspal Quah & Aishah, at p. 651;

 

(d) the cross-examination should advance the cause of justice. The cause of justice is not advanced when a conflict in affidavit evidence may be resolved by undisputed contemporaneous documents. I cite the following cases –

 

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(i) Tengku Baharudin Shah JCA’s majority judgment of the Court of Appeal in Tetuan Kumar Jaspal Quah & Aishah, at p.

 

651; and

 

(ii) Anuar J’s (as His Lordship then was) judgment in the High Court case of Kumagai Gumi Co Ltd v Zenecon-Kumagai Sdn Bhd & Ors and another application [1994] 2 MLJ 789, at 799; and

 

(e) I am of the respectful view that there is no “condition” that an application to cross-examine a deponent should be made “at the earliest stage possible as is practicable” (as submitted by the 1st to 4th and 6th Defendants). Having said that, there should not be any unreasonable delay in applying to cross-examine a deponent. If there is any delay in such an application, there must be an adequate and reasonable explanation on affidavit evidence for such a delay. In Indrani a/p Rajaratnam, at p. 62, an application to cross-examine a deponent had been dismissed on the ground of, among others, delay.

 

N4. Should court grant leave for Plaintiffs to cross-examine 1st Defendant?

 

60. After considering all the affidavits, written and oral submission in respect of Court Enc. No. 29, this court decides that the Plaintiffs have discharged their legal onus to persuade this court to exercise its discretion to grant leave for the Plaintiffs to cross-examine the 1st

 

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Deponent regarding the truth of the Specified Statements of 1st Defendant. This decision is premised on the following grounds:

 

(a) Court Enc. No. 29 does not seek court’s leave to cross-examine the 1st Defendant in respect of an interlocutory matter. Court Enc. No. 29 applies for leave to cross-examine the 1st Defendant so as to assist this court to decide the OS on its merits;

 

(b) there is no evidence to show that Court Enc. No. 29 has been filed

 

(i) based on mala fide; or

 

(ii) for an improper or collateral purpose to –

 

(1) delay the hearing of the OS; or

 

(2) harass, intimidate and/or oppress the 1st Defendant.

 

If there is a conflict in affidavit evidence and there is no crossexamination of the 1st Defendant, the Plaintiffs run the risk of not discharging the legal burden to prove the OS under ss 101(1) and 102 EA. In Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433, at 436, Lord Templeman delivered the Privy Council’s opinion on an appeal from Malaysia as follows –

 

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“In civil proceedings the trial judge has no power to dictate to a litigant what evidence he should tender. In winding up proceedings the trial judge cannot refuse to read affidavits which have been properly sworn, filed and produced to him unless some opposing party has applied for the attendance for cross-examination of the deponent and that application has been granted and the deponent does not attend. The Court cannot give a direction about evidence unless one of the litigants desires such direction to be made. Of course a judge may indicate to a petitioner that unless he calls oral evidence or applies to cross-examine the deponents of the opposition so as to prove a disputed fact, his petition is likely to fail. The judge may equally indicate to a respondent that unless he calls oral evidence or applies to cross-examine the petitioner’s deponents for the purposes of disproving an allegation made by the petitioner, then the petitioner is likely to succeed. At the end of the day the judge must decide the petition on the evidence before him. If allegations are made in affidavits by the petitioner and those allegations are credibly denied by the respondent’s affidavits, then in the absence of oral evidence or crossexamination, the judge must ignore the disputed allegations.”

 

(emphasis added).

 

(c) the Identified Issues have been set out in detail in the affidavit in support of Court Enc. No. 29. The Identified Issues are clearly relevant to the OS;

 

(d) there is an acute conflict in affidavit evidence regarding the Identified Issues and the Specified Statements of 1st Defendant. It is clear that the truth of the averments in the 1st Defendant’s 3

 

Affidavits have been challenged by the Plaintiffs;

 

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(e) the 1st Defendant’s cross-examination will advance the cause of justice as –

 

(i) there is no contemporaneous documents in this case which will resolve the conflict in affidavit evidence regarding the Identified Issues and the Specified Statements of 1st Defendant; and

 

(ii) the 1st Defendant’s 3 Affidavits which are lengthy and detailed, clearly showed that the oral evidence of the 1st Defendant will assist this court to decide justly the OS; and

 

(f) the Plaintiffs have not been guilty of inordinate delay in filing Court Enc. No. 29 on 19.12.2014.

 

61. In respect of the contention that the 1st Defendant is not mentally competent to be cross-examined under s 118 EA, I am of the view that such an averment does not defeat Court Enc. No. 29. This is because firstly, the Plaintiffs cannot ascertain the truth regarding the 1st Defendant’s alleged mental incapacity. More importantly, if the Plaintiffs are denied leave to cross-examine the 1st Defendant, as decided in Tay Bok Choon, this court has to ignore the disputed averments in affidavits and consequently, the Plaintiffs will run the risk of not being able to discharge the legal burden to prove the OS under ss 101(1) and 102 EA.

 

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N5. Should Prayer 2 of Court Enc. No. 29 be granted at this stage?

 

62. Order 38 rule 2(2) RC provides that after the court has ordered the cross-examination of a deponent and the deponent does not attend the said cross-examination, the court may order that the deponent’s affidavit “shall not be used as evidence without leave” of the court. Based on the wording of Order 38 rule 2(2) RC, I am of the view that Prayer 2 of Court Enc. No. 29 should only be decided after the crossexamination of the 1st Defendant on the date set by this court. In other words, Prayer 2 of Court Enc. No. 29 is presently pre-mature.

 

O. Court’s decision

 

63. Premised on the above reasons –

 

(a) Court Enc. No. 32 is dismissed with costs to be paid to the Plaintiffs by the 1st to 4th and 6th Defendants; and

 

(b) in respect of Court Enc. 29 –

 

(i) the Plaintiffs are granted leave to cross-examine the 1st Defendant in respect of the Specified Statements of 1st Defendant;

 

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(ii) Prayer 2 of Court Enc. 29 shall be decided after the 1st Defendant’s cross-examination on the date set by this court; and

 

(iii) costs for Court Enc. 29 shall be paid to the Plaintiffs by the 1st to 4th and 6th Defendants.

 

WONG KIAN KHEONG

 

DATE: 15 JULY 2015 Judicial Commissioner High Court (Commercial Division) Kuala Lumpur

 

Counsel for Plaintiffs: Mr. Kumar Kanagasingam, Mr. Yee Mei Ken, En. Bahari Yeow, Ms. Ho Ai Ting & Ms. Teh Soo Jin (Messrs Lee Hishammuddin Allen & Gledhill)

 

Counsel for 1st to 4th & 6th Defendants: Mr. K.L Pang, Cik Puteri Shehnaz Majid & Ms. Shasha Ravindran (Messrs Cheah Teh & Su)

 

Counsel for 5th Defendant: Mr. H.R Dipendra & Cik Nor Emellia bt. Mohd. Shariff (Messrs Arianti Dipendra Jeremiah)

 

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