Enviro Healthcare Pte Ltd v Law Siau Woei (AA-22NCC-17-10/2025)

ENVIRO HEALTHCARE PTE LTD

PASTEL GLOVE SDN. BHD. (NO. PENDAFTARAN SYARIKAT: 202001030181 [1386501-X]) 15 ..PLAINTIF-PLAINTIF DAN LAW SIAU WOEI (NO. K/P: 780216-08-7273) (mengikut tindakan asal) 20 DAN ANTARA LAW SIAU WOEI (NO. K/P: 780216-08-7273) ...PLAINTIF YANG TERSEBUT 25

DAN ENVIRO HEALTHCARE PTE LTD

PASTEL GLOVE SDN. BHD. 30 (NO. PENDAFTARAN SYARIKAT: 202001030181 [1386501-X])

YEOW CHING SHOONG

LEE CHING KANG (NO. K/P SINGAPURA: S7889476H) 35 ...DEFENDAN-DEFENDAN YANG TERSEBUT (mengikut tuntutan balas) GROUNDS OF JUDGMENT 40 INTRODUCTION [1] There are two applications for disclosure filed by the defendant, namely Enclosures 19 and 28. Both applications concern the discovery of documents which the defendant contends are necessary for the preparation of his defence and the fair disposal of 45 this action. Enclosure 19 seeks discovery and inspection of documents from the plaintiffs pursuant to Order 24 Rules 10 and 11 of the Rules of Court 2012, whilst Enclosure 28 seeks discovery against a non-party, namely Chin Tien Tien, the company secretary of the 2nd plaintiff, under Order 24 Rule 7A. I shall consider and 50 determine each application separately, beginning with Enclosure 19. BACKGROUND FACTS 55 [2] This action arises from a commercial dispute following a corporate share acquisition and the alleged breach of a profit guarantee arrangement. The 1st plaintiff is a Singapore-incorporated company, and the 2nd plaintiff is a Malaysian company engaged in the glove manufacturing business. The defendant was formerly 60 involved in the management of the 2nd plaintiff and was one of the parties connected with the transaction relating to the acquisition of shares in the 2nd plaintiff. [3] The plaintiffs commenced this suit by way of a writ and statement of claim dated 19 August 2025. In essence, the plaintiffs contend that 65

relevant to the matters in issue;

(ii) necessary for the fair disposal of the action; and

(iii) not amounting to a fishing expedition. [9] These requirements are cumulative. It is not sufficient that documents may be relevant in a broad sense; they must also be 140 necessary and proportionate to the issues arising from the pleadings. COURT’S FINDINGS IN ENCL 19 [10] The court accepts the plaintiffs’ submission that the present action is fundamentally a contractual dispute arising from the SPA, in 145 particular the profit guarantee provisions agreed between the parties. The plaintiffs’ case is straightforward. They contend that the audited financial statements for the relevant financial years disclose an NLAT, and that pursuant to the contractual terms, the occurrence of such losses triggers the defendant’s obligation under the profit 150 guarantee clause. Accordingly, the plaintiffs seek to enforce what they say is a contractual payment obligation arising from the audited financial results. [11] I find that this is not a case where the plaintiffs allege fraud, misrepresentation, manipulation of accounts, accounting 155 irregularities, or negligence in the preparation of the financial statements. Neither is the plaintiffs’ cause of action founded upon the correctness of individual accounting entries, asset valuations, inventory records, or internal financial management decisions. Rather, the plaintiffs rely on the audited accounts as the contractual 160 obligation agreed upon by the parties in clauses 5.2 and 6 of the SPA, where the defendant gave an undertaking that if the audited accounts prepared pursuant to clause 5.2 showed that the company incurred an NLAT during any year within the Profit Guarantee Period, the defendant must pay the company an amount equal to 165 that NLAT. [12] In the circumstances, the court is not presently concerned with carrying out a detailed examination of the underlying accounting records of the company’s financial affairs. The issue for determination is whether the contractual obligations under the SPA 170 have arisen and, if so, whether the defendant is liable under the profit guarantee provisions. [13] The court also notes that the defendant was not a stranger to the 2nd plaintiff’s financial affairs. As a director actively involved in the management of the company, he had approved and signed the 175 audited financial statements for the relevant years. He had the opportunity at the material time to raise any concerns regarding the accounts. Having accepted and acted upon those accounts, the defendant cannot now seek extensive discovery of the underlying accounting records merely to revisit or re-examine the figures upon 180 which the audited accounts were based. Although the defendant contends that he no longer has access to those records and seeks them only to verify the NLAT computation, such a contention does not justify converting this contractual dispute into a retrospective audit exercise. The court has also considered the defendant’s 185 argument that he did not sign certain accounts, particularly the financial statements for FY2024. However, that fact does not materially advance the present application. The plaintiffs’ claim is founded on the audited accounts prepared pursuant to Clauses 5.2 and 6 of the SPA, and the defendant’s counsel has expressly 190 maintained during the Zoom hearing that the defendant is not challenging the auditor’s report itself. If the defendant’s position is that the audited accounts are unreliable or improperly prepared, such a challenge must be specifically pleaded and proved at trial. It cannot be indirectly pursued through a broad discovery application 195 seeking to scrutinise the entirety of the company’s accounting records. DOCUMENT ALLOWED [14] The court finds that discovery should be confined to documents expressly pleaded and that form the foundation of the transaction in 200 dispute. They are: a) the Deed of Novation dated 7 July 2021; and b) the Share Sale and Purchase Agreement dated 3 August 2021 (“SPA”) [15] Both documents satisfy the requirement and are specifically referred 205 to in the statement of claim, constituting the contractual framework governing the parties’ relationship. The SPA, in particular, contains the profit guarantee provisions forming the basis of the plaintiffs’ claim. As these documents define the parties’ rights and obligations, they are directly relevant and necessary for the fair determination of 210 the action. AUDITOR’S ROLE [16] The court accepts KPMG’s submission on the limited role of auditors in the preparation of financial statements. The responsibility for preparing the company’s financial statements lies with the directors, 215 who bear the statutory duty to ensure their accuracy and completeness. Auditors do not prepare the accounts, nor do they verify every transaction undertaken by the company. Rather, their function is to conduct an independent audit through a sample-based review, selecting documents and transactions for examination 220 based on materiality and risk. Upon completion of that process, the auditors express an opinion as to whether the financial statements present a true and fair view of the company’s financial position. In these circumstances, the mere existence of underlying accounting records does not automatically entitle the defendant to discovery of 225 all such documents, particularly where the auditor’s opinion itself is not being challenged. ENCLOSURE 19 CONCLUSION 230 [17] For the foregoing reasons, Enclosure 19 is allowed in part. Discovery is granted only in respect of the deed of novation and the share sale and purchase agreement, both of which are expressly pleaded and form the contractual foundation of the plaintiffs’ claim. The application is dismissed in respect of all other categories of 235 documents sought. This order ensures that discovery remains confined to documents that are relevant and necessary to the issues in dispute, while preventing oppressive or unnecessary disclosure. The court further orders that a penal notice shall be endorsed on the order. Costs in the cause are fixed at RM5,000.00. 240 ENCLOSURE 28 APPLICATION [18] The application in enclosure 28 concerns the defendant’s application under Order 24 Rule 7A of the Rules of Court 2012 for discovery against a non-party, namely Chin Tien Tien, the company secretary of the 2nd plaintiff. The defendant seeks the production of 245 various corporate documents relating to his alleged removal as a director of the 2nd plaintiff. The categories of documents sought include the company constitution, board and members’ resolutions, meeting minutes, notices, proof of service, and filings with the Companies Commission of Malaysia (“SSM”). The defendant 250 contends that these documents are necessary to enable him to challenge the legality and propriety of his removal as director to prepare and advance his defence in the present proceedings properly. THE GOVERNING LAW 255 [19] The principles governing discovery against a non-party are well established. Such relief is exceptional in nature and is not granted as a matter of course. The burden rests on the applicant to satisfy the requirements under Order 24 Rule 7A of the Rules of Court 2012, and the principles articulated in Yekambaran v Malayawata 260 Steel Bhd Malayawata Steel Berhad (supra). [20] The court must be satisfied that the documents sought are relevant to a live issue in the proceedings, that they are in the possession, custody, or power of the non-party against whom the order is sought, and that the disclosure sought is necessary for the fair 265 disposal of the action. In exercising this jurisdiction, the court must also guard against applications which amount to fishing expeditions or which impose an unnecessary and disproportionate burden on persons who are not parties to the litigation. [21] The relevant provisions in Order 24 Rule 7A(3)(b) and Rule 7A(5). 270 Order 24 Rule 7A(3)(b) provides that the applicant must: “specify or describe the documents in respect of which the order is sought and show, if practicable by reference to any pleading served or intended to be served in the proceedings, that the documents are relevant to an issue 275 arising or likely to arise out of the claim made or likely to be made in the proceedings ... and that the person against whom the order is sought is likely to have or have had them in his possession, custody or power.” 280 Order 24 Rule 7A(5) further provides: “An order for the discovery of documents ... by a person who is not a party to the proceedings may be made by the court ... in such circumstances where the court thinks it just to make such an order, and on such terms as it thinks 285 just.” [22] These provisions require the applicant to establish three essential matters, namely that the documents sought are relevant to an issue arising in the proceedings, that they are likely to be within the 290 possession, custody, or power of the non-party, and that it is just in all the circumstances for the court to order such discovery. These principles guide the court in determining the present application. COURT’S FINDINGS [23] The court finds that the documents sought are directly relevant to a 295 live issue in these proceedings, namely the defendant’s alleged removal as a director of the 2nd plaintiff. The plaintiffs rely upon that removal as an established fact. In those circumstances, the defendant is entitled to examine the underlying company records to ascertain whether the removal was carried out in accordance with 300 the company’s constitution, the Companies Act 2016, and the applicable corporate procedures. [24] In the court’s view, fairness requires that the defendant be allowed to inspect the documents forming the basis of the decision to remove him. Without access to such records, the defendant would 305 effectively be required to accept the validity of the removal without being able to verify whether the proper procedures were followed. Such a result would be inconsistent with the principles of procedural fairness. [25] The court is further satisfied that the non-party, namely Chin Tien 310 Tien, in her capacity as company secretary of the 2nd plaintiff, is the proper custodian of the documents sought. Records such as minutes of meetings, resolutions, notices, proof of service, and statutory filings are ordinarily maintained by the company secretary in the course of carrying out her professional duties. Accordingly, 315 the requirement that the documents be within the possession, custody, or power of the non-party has been established. [26] The court has also considered whether the application amounts to a fishing expedition. Having examined the categories of documents sought, the court is satisfied that the request is sufficiently 320 particularised and confined to documents relating to the defendant’s removal as director. The application is therefore targeted at a specific issue in dispute and cannot properly be characterised as speculative or exploratory. CONCLUSION AND ORDER 325 [27] Having considered the evidence and submissions of the parties, the court is satisfied that the defendant has met the threshold requirements under Order 24 Rule 7A of the Rules of Court 2012. The documents sought are relevant, identifiable, and necessary for the fair disposal of the action. 330 [28] Accordingly, Enclosure 28 is allowed, subject to appropriate safeguards. The scope of discovery shall be confined strictly to documents relating to the defendant’s removal as director and which are within the possession, custody, or power of the non-party. Any documents protected by legal professional privilege are excluded 335 from disclosure. [29] As such, the non-party, Chin Tien Tien, shall, within thirty (30) days from the date of this order, produce the documents specified in “Lampiran A”, limited strictly to those documents relating to the defendant’s removal as director. The defendant shall bear the costs 340 of photocopying, preparation, and production of the documents. [30] The defendant is granted leave to amend his Defence and/or Counterclaim, if necessary, after receipt and examination of the disclosed documents under this application. [31] Parties are at liberty to apply in respect of any dispute concerning 345 the scope of production, privilege, or compliance with this order. [32] Costs of this application are awarded as costs in the cause, fixed at RM5,000. A penal notice shall be endorsed on the order arising from Enclosure 28 350 Dated : 10th Jun 2026 [MOSES SUSAYAN] JUDGE 355 HIGH COURT IN MALAYA AT IPOH, PERAK Counsel : For the Plaintiffs : Sankara Narayanan a/l Sankaran Nair 360 (together with Wong Guo Jin) Advocates and Solicitors [Messrs S N Nair & Partners] Kuala Lumpur 365 For the Defendants : Tan Yong Koon (together with Sim Kok Yew) Advocates and Solicitors [Messrs Chambers Of Koon] Petaling Jaya, Selangor 370 (Notice: This Grounds of Decision is subject to official editorial revision) 375 Headnotes: CIVIL PROCEDURE: Discovery – Applications for discovery and inspection of documents – Discovery against party and non-party under Order 24 rr 7A, 10 and 11 Rules of Court 2012 – Whether documents 380 sought were relevant, necessary and proportionate – Whether application constituted a fishing expedition – Whether claim was fundamentally a contractual dispute arising from Share Sale and Purchase Agreement and profit guarantee provisions – Whether audited Net Loss After Tax (“NLAT”) figures triggered contractual obligation – Whether detailed 385 accounting records, management accounts, inventory records, tax documents and operational reports were necessary – Whether auditors merely conducted sample-based review and expressed opinion on true and fair view – Discovery limited to Deed of Novation and Share Sale and Purchase Agreement – Non-party discovery allowed against company 390 secretary for documents relating to defendant’s removal as director – Whether documents were relevant to a live issue and necessary for fair disposal of action.