i
(i) Originating Summons No.:24NCC-360-10/2015;
Loading…
/akn/my/judgment/court-of-appeal/2018/a1c07b51-298e-4b77-b851-13e9807765a5
Court of Appeal of Malaysia14 Sept 2018W-02(IM)(NCC)-2556-12/2017
The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.
Citations and treatment detected automatically from later judgments and the authorities this decision relies on.
Later cases and laws citing this decision
Not yet cited by a later decision.
Earlier cases and laws this decision relies on
“O: 581032-M) … RESPONDENTS Page 2 of 20 [IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR ORIGINATING SUMMONS NO: 24NCC-360-10/2015 In the matter of Section 181(1)(a) and/or 181(1)(b) and 181(2) of the Companies Act 1965 and In the matter of ADM Ventures (M) Sdn Bhd (Company No. 1115485-X) and In the matter of Thrinakarasi”
Auto-detected from judgment text; not a substitute for a citator check.
Text
Page 1 of 20 IN THE COURT OF APPEAL AT PUTRAJAYA CIVIL APPEAL NO: W-02(IM)(NCC)-2556-12/2017
section
1. (PASSPORT NO. OL 3641181)
section
2.
section
3.
section
4. … APPELLANTS
section
1.
section
2.
section
3.
section
4. GLOBAL CITY GRAND PRIX SDN BHD (COMPANY NO: 774536-A)
section
5. MUNISAMY @ ANNAMALAI A/L SALISAMY (NRIC NO: 320620-10-5093)
section
6. G. RAJESWARI (NRIC NO: 381004-71-5022)
section
7. AM ASSOCIATES SDN BHD (COMPANY NO: 581032-M) … RESPONDENTS Page 2 of 20 [IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR ORIGINATING SUMMONS NO: 24NCC-360-10/2015 In the matter of Section 181(1)(a) and/or 181(1)(b) and 181(2) of the Companies Act 1965 and In the matter of ADM Ventures (M) Sdn Bhd (Company No. 1115485-X) and In the matter of Thrinakarasi @ Arasu a/l Munisamy (NRIC No: 570919-10-5751) and In the matter of Thirumaren a/l Munisamy (NRIC No: 590908-10-5033) And In the matter of Order 88 Rule 2 of the Rules of Court 2012 DILANTHA RANJULA BANDARA MALAGAMUWA … PLAINTIFF
section
1.
section
2.
section
3. Page 3 of 20 COMPANIES WINDING-UP NO: 28NCC-886-10/2015 In the matter of Section 218 (1)(f) and/or 218(1)(i) of the Companies Act 1965 and In the matter of ADM Ventures (M) Sdn Bhd (Company No. 1115485-X) and In the matter of Order 88 Rule 2 of the Rules of Court 2012 DILANTHA RANJULA BANDARA MALAGAMUWA … PLAINTIFF … RESPONDENT SUIT NO: WA-22NCC-19-01/2016
section
1.
section
2. … PLAINTIFFS Page 4 of 20
section
1.
section
2. IN WILAYAH PERSEKUTUAN KUALA LUMPUR SUIT NO: WA-22NCC-28-01/2016 (SRI LANKAN PASSPORT NO. OL 3641181)
section
1.
section
2.
section
3. SUIT NO: WA-22NCC-34-01/2016 Page 5 of 20
section
1.
section
2.
section
3. SUIT NO: 22NCC-355-11/2015 DILANTHA RANJULA BANDARA MALAGAMUWA… PLAINTIFF
section
1.
section
2.
section
3. SUIT NO: WA-22NCC-272-08/2016 Page 6 of 20 1.
section
2. (CIVIL DIVISION) SUIT NO: WA-22NCC-284-08/2016
section
1. GLOBAL CITY GRAND PRIX SDN BHD (COMPANY NO: 774536-A)
section
2. MUNISAMY @ ANNAMALAI A/L SALISAMY (NRIC NO: 320620-10-5093)
section
3. G. RAJESWARI (NRIC NO: 381004-71-5022)
section
4. AM ASSOCIATES SDN BHD (COMPANY NO: 581032-M) … DEFENDANTS] (HEARD TOGETHER) IN THE COURT OF APPEAL AT PUTRAJAYA CIVIL APPEAL NO: W-02(IM)(NCC)2557-12/2017
section
1.
section
2. Page 7 of 20
section
3. TUNKU KHAIRUL ZAIM TUNKU NAQUIYUDDIN (NRIC NO: 851112-14-5403)
section
4. MARCUS A/L FRANCIS (NRIC NO: 710722-04-5443)
section
5. DR. RANAWEERA NEIL PRASAD (NO. PASSPORT: LH 229765)
section
6. (PASSPORT NO: OL 3641181)
section
7. … APPELLANTS … RESPONDENT [IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR ORIGINATING SUMMONS NO: WA-24NCC-47-02/2016 In the matter of GT Global Race (M) Sdn Bhd (Company No. 1027181-X) And In the matter of Section 181 of the Companies Act 1965 (Act 125) And In the matter of Order 28 of the Rules of Court 2012 Page 8 of 20 1.
section
2.
section
3. TUNKU KHAIRUL ZAIM TUNKU NAQUIYUDDIN (NRIC NO: 851112-14-5403)
section
4. MARCUS A/L FRANCIS (NRIC NO: 710722-04-5443)
section
5. DR. RANAWEERA NEIL PRASAD (NO. PASSPORT: LH 229765)
section
6. (PASSPORT NO: OL 3641181)
section
7. FAIZAL MAULANA BIN HASSAN KUTTI (NRIC NO: 791102-12-5001)
section
8. CITY MOTORSPORTS SDN BHD (COMPANY NO: 1166831-U)
section
9. CORAM UMI KALTHUM ABDUL MAJID, JCA SURAYA OTHMAN, JCA STEPHEN CHUNG HIAN GUAN, JCA Page 9 of 20 JUDGMENT OF THE COURT [1] These two appeals were heard together, namely Civil Appeal No. W-02(IM)(NCC)-2556-12/2017 which was an appeal against the decision of the High Court Judge given in respect of Enclosure 63
preamble
whereas Civil Appeal No. W-02(IM)(NCC)-2557-12/2017 was an appeal against the decision given in respect of Enclosure 77. We shall refer to the Appellants and Respondents as they are referred to in the High Court suits. [2] The background of the appeals. There are fourteen (14) suits filed between the parties. By a Court Order dated 13.07.2017, it was ordered that the 14 suits be conducted in 3 tranches. Tranche 1 Actions comprised 8 suits as follows:
i
(i) Originating Summons No.:24NCC-360-10/2015;
subparagraph
(ii) Winding-up Petition No.:28NCC-886-10/2015;
subparagraph
(iii) Suit No.:WA-22NCC-19-01/2016;
subparagraph
(iv) Suit No.:WA-22NCC-28-01/2016;
v
(v) WA-22NCC-34-01/2016;
subparagraph
(vi) Suit No.:WA-22NCC-355-11/2015;
subparagraph
(vii) Suit No.:WA-22NCC-272-08/2016; and
subparagraph
(viii) Suit No.:WA-22NCC-284-08/2016. [3] The Plaintiffs in Tranche 1 Actions are Renew Capital Sdn Bhd (Renew Capital), Tunku Naquiyuddin Ibni Tuanku Ja’afar (Tunku Naquiyuddin), Marcus a/l Francis (Marcus), Dr. Ranaweera Neil Prasad (Dr. Ranaweera Neil), Dilantha Ranjula Bandara Malagamuwa (Dilantha) and GT Global Race (M) Sdn Bhd (GT Global). Page 10 of 20 [4] Tranche 2 Actions comprised 4 suits -
i
(i) Suit No: WA-22NCC-245-06/2016;
subparagraph
(ii) Winding-up Petition No: 28NCC-857-10/2015;
subparagraph
(iii) Originating Summons No: WA-24NCC-47-02/2016; and
subparagraph
(iv) Suit No: WA-22NCC-425-12-2016. [5] The Plaintiffs in Tranche 2 Actions are ADM Ventures (M) Sdn Bhd (ADM), Thrinakarasi @ Arasu a/l Munisamy (Arasu) and Thirumaren a/l Munisamy (Thirumaren). [6] Tranche 3 Actions comprised 2 suits, namely Suit No: WA- 22NCC-410-12/2016 and Suit No: WA-22NCC-350-10/2016. Both are defamation suits brought by Tunku Naquiyuddin and Marcus respectively against ADM. Enclosure 63 [7] The Tranche 1 Actions were scheduled for trial from 4th to 10th October 2017. On 4.10.2017 the lead counsel for the Plaintiffs informed the Court that he had instructions to withdraw the Tranche 1 Actions with no liberty to file afresh and what was left was the issue of costs. [8] Subsequently, on 10.10.2017, counsel for the Plaintiffs informed the Court that his clients’ instruction was to discontinue the Tranche 1 Actions but with liberty to file afresh. The Defendants’ counsel objected and submitted that a formal application ought to be filed pursuant to O.21 r.3 of the Rules of Court 2012. The Court directed the Plaintiffs to file the application, namely Enclosure 63, which was fixed for hearing on 7.11.2017. Page 11 of 20 [9] In Encl. 63, in respect of the Tranche 1 actions, the Plaintiffs applied for the following prayers -
a
(a) the Plaintiffs be given leave to discontinue the Tranche 1 Actions;
b
(b) the Plaintiffs be given leave to discontinue the Tranche 1 Actions with liberty to file afresh; and
c
(c) the costs of the application be costs in the cause. [10] In respect of Encl. 63, the High Court Judge allowed the Plaintiffs to discontinue the Tranche 1 Actions but will no liberty to file afresh. The High Court Judge ruled that the Plaintiffs ought not to be granted with liberty to file afresh on the grounds including -
i
(i) the Plaintiffs should not be allowed to resile from its original position to discontinue without liberty to file afresh. The Defendants did not oppose the discontinuance based on the representation;
subparagraph
(ii) the Plaintiffs in their affidavit in support failed to provide any explanation for the discontinuance of the Tranche 1 Actions with liberty to file afresh which suggested that the application was not bona fide;
subparagraph
(iii) to allow the Plaintiffs to discontinue with the Tranche 1 Actions with liberty to file afresh would defeat the Order of the Court ordering that the Tranche 1 Actions initiated by the Plaintiffs be heard first followed by the Tranche 2 Actions. The said Court Order was made pursuant to an application filed by the Defendants;
subparagraph
(iv) the Tranche 1 Actions were in an advanced stage of the proceedings when the Plaintiffs sought to discontinue the Tranche 1 Actions. It was the first day of trial after all the pre-trial management directions had been complied with and the parties had filed and exchanged witness Page 12 of 20 statements simultaneously. The Plaintiffs would have gained the strategic advantage having viewed the Defendants’ defence, witness statements, evidence vide the exchange of documents and affidavits. If allowed, the Plaintiffs would be able to re-litigate all the interlocutory applications again giving them a second bite of the proverbial cherry; and
v
(v) the Plaintiffs assertion that any prejudice suffered by the Defendants could be compensated by costs was untenable. [11] The Plaintiffs submitted that from the authorities cited that it is clear that the High Court Judge has wide powers to grant leave to the Plaintiffs to discontinue the Tranche 1 Actions with liberty to file afresh. [12] The Plaintiffs referred to the case of Newlake Development Sdn Bhd v Zenith Delight Sdn Bhd & Ors [2017] 1 LNS 527 and submitted that before granting the order for discontinuance of an action, the court must be satisfied that -
i
(i) if a defendant is dominus litis, the general rule is to refuse leave to discontinue (see Overseas Union Finace Ltd v Lim Joo Chong [1971] 1 LNS 101);
subparagraph
(ii) the case is not at an advanced stage; if so, care must be taken not to permit discontinuance. What constitutes an advanced stage depends on the facts and circumstances of the case (see Fox v Star Newspaper Company [1898] 1 QB 636);
subparagraph
(iii) the plaintiff may have gained an interim interlocutory advantage between the date of issue of the writ and the point of time he seeks to discontinue (O’Neal v Mann [2000 FCA 1680); Page 13 of 20
subparagraph
(iv) there is no miscarriage of justice occasioned by its refusal to permit the discontinuances; and
subparagraph
(vi) it will not prejudice the opponent to the application or take away from him any advantage to which he is fairly and reasonably entitled. [13] The Plaintiffs submitted that the Plaintiffs have satisfied the requirements referred to by the Court of Appeal in the case of Newlake Development and thus the leave to discontinue with liberty to file afresh ought to be granted to the Plaintiff. [14] In reply, the Defendants submitted that it should be noted that the issue in contention at the High Court was whether the Plaintiffs ought to be given liberty to file afresh. The leave to discontinue per se was not opposed by the Defendants. It was submitted that the High Court Judge had exercised her discretion judicially when she ordered the Tranche 1 Actions be struck out without liberty to file afresh. [15] It was submitted that the Plaintiffs' counsel had on the first day of trial informed the Defendants' counsel and the Court that the Plaintiffs were withdrawing the Tranche 1 Actions without liberty to file afresh. It was on this representation that the Defendants' counsel did not oppose the discontinuance. Therefore, the Plaintiffs should not be allowed to resile from its original position to discontinue without liberty to file afresh. [16] The Defendants submitted that the Plaintiffs had failed to provide any explanation for the discontinuance of the Tranche 1 Actions with liberty to file afresh which suggested that the application was not made bona fide. In the absence of any explanation in the supporting Page 14 of 20 affidavit, the filing of the notice of discontinuance especially when the Defendants had filed copious affidavits and had made serious allegations against the Plaintiffs, suggested that the discontinuance was not made bona fide especially when the Defendants were also in dominus litis. [17] The Defendants submitted that the Plaintiffs' actions in seeking to discontinue with liberty was for the ulterior motive of defeating the Court Order dated 13.7.2017 by which the Court had ordered that the 8 suits initiated by the Plaintiffs, that is, the Tranche 1 Actions were to be heard first followed by the Defendants' suits, that is, the Tranche 2 Suits. The said Court Order was made pursuant to an application filed by the Defendants. [18] It was submitted that the Plaintiffs sought to discontinue the Tranche 1 Actions on the first day of the trial after all pre-trial case management instructions had been complied with and parties had filed their witness statements. This ought to be considered as an advanced stage of the proceedings as the matter is pendente lite, the Plaintiffs have gained the advantage of having seen the Defendants' Defence, Witness Statements, evidence, affidavits and etc. This would give the Plaintiffs a strategic advantage since they can now tailor any future suits in a manner so as to defeat the Defendants' Defence and obtain the desired outcome of any interlocutory applications filed. [19] We had read the grounds of judgment, the submissions made and the authorities cited. It is trite that a Judge has discretionary power when hearing an application but it must be exercised judicially on the facts and circumstances of the case. In the application for Page 15 of 20 discontinuance of the Tranche 1 Actions with liberty to file afresh, under O.21 r.3(1), the court hearing the application for the grant of such leave may either allow or dismiss the application. The court ought not to substitute the Plaintiffs’ application with another order which the Plaintiffs never prayed for, namely, to allow the discontinuance of the Tranche 1 Actions without liberty to file afresh: see the case of Newlake Development (supra). [20] We bore in mind that at the material time of the application, the trial of the Tranche 1 Actions had yet to commence. If the application as prayed for was allowed in terms, the Plaintiffs would have an option as to the next course of action to take. However, if the application to discontinue the actions was allowed, but with no liberty to file afresh, which was not what they prayed for, the Plaintiffs would have been left with no remedy which would have caused prejudice to the Plaintiffs. In exercising her discretion, the learned High Court Judge had failed to consider these and had wrongly exercised her discretion. An appellate court can review questions of discretion if it is satisfied that the discretion had been exercised on a wrong principle and should have been exercised in a contrary way: Vasudevan v T Damodaran & Anor [1981] 2 MLJ 150. [21] On the facts and circumstances of the case, there was no strategic or procedural advantage gained by either side and the learned High Court Judge should not have made the order as she did. [22] It was our unanimous decision to allow the appeal with no costs. We set aside the Order of the High Court dated 16.11.2017 and ordered that Encl. 63 be dismissed with no costs. Parties were directed Page 16 of 20 to appear before the High Court Judge on 26.7.2018 for further direction for the hearing of the Tranche 1 Actions. Deposit was refunded. Enclosure 77 [23] In Encl.77, the 1st to 6th and 9th Defendants filed an application dated 30.08.2017 to strike out the Plaintiffs’ Re-Amended Originating Summons dated 12.04.2016 in Suit WA-24NCC-47-02/2016 (Suit 47). In that OS the Plaintiffs prayed as follows -
a
(a) a declaration that there was a breach of the terms of the 24.06.2015 Agreement on the part of the 1st, 2nd and 4th Defendants;
b
(b) an order that the banking signatories be restored to their original groups as at 4.10.2015 and that one signatory of each shareholder approve all monetary transactions of GT Global;
c
(c) save for statutory payments, an injunction to restrain the Defendants, whether by themselves or through their servants, agents, employees and/or otherwise howsoever from:
i
(i) effecting any payments out of any GT Global banking account, based and acting on the resolutions passed and carried at the Directors Meeting on 5.10.2015 and at any subsequent meetings; or
subparagraph
(ii) from transferring, charging, pledging or dealing with the assets of GT Global, in particular, the rights benefits and interests of GT Global in the Memorandum of Agreement dated 10.03.2014 between DBKL and GT Global until the further Order of the Court. Page 17 of 20
d
(d) that the Defendants or entities beneficially owned by one or more of them do reinstate any secret profits derived from the 9th Defendant;
e
(e) further and /or in the alternative, an order that the 1st, 2nd, 3rd, 4th, 5th and/or 6th Defendants be required to purchase the shares in GT Global belonging to the Plaintiff, at RM64 million, being 40% of the projected profits for GT Global under the Concession granted by the DBKL or such value as determined by the Court with the assistance of Court appointed experts;
f
(f) that the cost of and occasioned by this application be borne by the Defendants; and
g
(g) such further or other orders as the Court deems fit and just to grant. [24] In this application, the Defendants submitted that the Plaintiff has no locus against the 7th and 8th Defendants and that the OS is frivolous and vexatious and is an abuse of the court process. [25] It was submitted that it is trite that if a wrong has been done to a company, then it is the company which is the proper party to an action brought to redress the injury. An individual shareholder or even a group of shareholders forming a minority have no locus to remedy the wrong done to the company, citing Prudential Assurance Co Ltd v Newman Industries Ltd (No.2) [1982] 1 AII ER 354; Abdul Rahim bin Aki v Krubong Industrial Park (Melaka) Sdn Bhd & Ors [1995] 3 MLJ 417. [26] It was submitted that the Plaintiff is not the proper party to sue for derivative action as it is merely an individual shareholder who has no locus to remedy the wrong done to the company because the Plaintiff is a 50% shareholder and not a minority shareholder seeking Page 18 of 20 protection under section 181 of the Companies Act 1965 (CA 1965). It was submitted that the Plaintiff filed the OS for its own interest and not in regard to the interest of the company. Further, it was submitted that the Plaintiff did not obtain leave before commencing and filing the OS and therefore the OS for the derivative action pursuant to section 181 of the CA 1965 ought to fail and must be dismissed. [27] The Plaintiff submitted that the High Court Judge did not err when she dismissed Encl. 77 and that she had given her decision which can be summarized as follows: (i) the preliminary objection of the Plaintiff regarding the admissibility of the Defendants’ affidavit was allowed because they failed to comply with the deadline and no extension of time was sought pursuant to O.3 r.2; (ii) the Plaintiff has locus to bring an action under section 181 against the 7th and 8th Defendants; (iii) there has been substantial delay in filing Encl.77 and the delay remained unexplained; and (iv) that the Defendants’ reliance on Ho Num Chon & Anor v Tech-Lab Manufacturing Sdn Bhd [2017] 5 CLJ 187 in support of the proposition on simultaneous proceedings under section 181 and 218 of the CA 1965 cannot be maintained in law. [28] It was submitted that the Defendants’ contention that this OS ought to be struck out on the basis that Suit WA-22NCC-425-12/2016 (Suit 425) had been struck out was without any basis by referring to the case of Teh Chin Chuan & Anor v Chuan Hong Co & Ors [1995] 5 MLJ 459. [29] In Encl. 18 and 19, the 7th and 8th Defendants had filed separate striking out applications on the basis that the Plaintiff has no locus. Both applications were heard before another Judge which were Page 19 of 20 dismissed on the grounds that their conduct was prejudicial and without regard to the interest of the Plaintiff as a shareholder of the 9th Defendant and that the Plaintiff’s claims against the 7th and 8th Defendants were not unfounded or baseless as to render it frivolous or vexatious. [30] It was held that a petition under section 181 can be directed against any person involved in the affairs of the company in a manner oppressive or which unfairly discriminates or prejudicial to the members, shareholders and debenture holders, not necessary against the directors or shareholders only: see Kondapuram Raghurum v Soo Peng @ Yew Soo Peng [2006] 7 MLJ 510. [31] It is settled law that a court should not strike out a claim unless it is obviously unsustainable on the face of it. In such an application the court should not undertake a minute examination of the documents and facts. So long as the pleadings disclose some cause of action or raise some question fit to be decided in a trial, the mere fact that the case is weak or not likely to succeed is not a ground for the pleadings to be struck out: see Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36; Owen Sim Liang Khui v Piasau Jaya Sdn Bhd & Anor [1996] 1 MLJ 113. [32] We have read the grounds of judgment of the learned High Court Judge, the submissions and the authorities referred to. In her judgment she found that the Defendants’ assertion that the Plaintiff does not have a reasonable cause of action against them was without basis and that the Defendants also did not assert that the petition of the Plaintiff is scandalous, frivolous and vexatious or that it may prejudice, Page 20 of 20 embarrass or delay the fair trial. Based on the appeal record, the trial judge was not plainly wrong in dismissing the Defendants’ application to strike out the Plaintiff’s petition. The disputes between the parties should be determined on the merits. [33] We were unanimous in our decision that there were no merits in the appeal in respect of Encl. 77. The appeal was dismissed with no order as to costs. The deposit was refunded. Dated: 14th September 2018 sgd STEPHEN CHUNG HIAN GUAN (delivering judgment of the court) Court of Appeal Judge Putrajaya For Appellants : Dhanaraj Vasudevan, James Ee and Kalai Selvi Messrs. K.F. Ee & Co For Respondents : Prem Ramachandran and Puvvana Muthuvelu Messrs. Kumar Partnership
Wrong text, a broken link, out-of-date content, or a removal request — tell us and we'll check it against the official source.