1. Interplex Holdings Sdn Bhd v 1. Toshiba Elevator and Building Systems Corporation (22NCC-694-12/2019)

INTERPLEX HOLDINGS SDN BHD (Company No.: 323452-T)

INTERPLEX SDN BHD (Company No.: 81026-V)

ITN RESOURCES SDN BHD (Company No.: 495767-M)

NIAGAWA JAYA SDN BHD (Company No.: 489153-U) … PLAINTIFFS

TOSHIBA ELEVATOR AND BUILDING SYSTEMS CORPORATION (Incorporated in Japan, Company No.: 5010701006785)

MS ELEVATOR SDN BHD (Company No.: 104187-U)

MS ELEVATOR ENGINEERING SDN BHD (Company No.: 84871-M) … DEFENDANTS 2 BEFORE YA ADLIN BINTI ABDUL MAJID JUDICIAL COMMISSIONER JUDGMENT (Enclosure 43) A. Introduction [1] The Plaintiffs filed an application to expunge certain documents from the records of this court, and to exclude these documents from being part of the evidence in this action. [2] The application was originally filed in Enclosure 25. However, in the course of the hearing, the Plaintiffs made an oral application to amend Enclosure 25 to correct referencing errors. The oral application was allowed, and a new Enclosure 43 was subsequently filed to replace Enclosure 25. [3] I allowed the Plaintiffs’ application in Enclosure 43. These are the reasons for my decision. B. Background Facts [4] The Plaintiffs are at all material times the majority shareholders of the 2nd and 3rd Defendants (collectively, the “Companies”), holding 51% of the shares in the Companies. The 1st Defendant is the minority shareholder of the Companies, with 49% of the shares in the Companies. 3 [5] The Plaintiffs and the 1st Defendant entered into shareholders’ agreements dated 30 May 2012 (“SHA”). The articles of association of the Companies (“Articles”) mirror the provisions of the SHA. The provisions of the SHA that are relevant to this action are as follows: a. Clause 6.2: Board (Composition, Appointment and Resignation) “(a) On and after the Commencement Date, unless otherwise agreed by the Shareholders, the Board shall comprise of seven (7) Directors at all times. Toshiba Elevator shall be entitled to nominate four (4) Directors for so long as it remains a shareholder of the Company and the Other Relevant Shareholders shall be entitled to nominate three (3) Directors for so long as it remains a shareholder of the Company onto the Board.” b. Clause 6.9: Corporate Management “(b) The Parties hereby agree that:

The President / CEO shall be appointed by Toshiba Elevator based on consultation with the Other Relevant Shareholders from amongst members of the Board and such position of President / CEO shall be for a tenure of five (5) 4 years subject to any-reappointment and/or earlier resignation by the appointed President / CEO from his position. Notwithstanding the foregoing, Toshiba Elevator agrees to nominate Dato’ Poh as the first President / CEO.” [6] After the execution of the SA, the 1st Defendant issued a letter dated 1 June 2012 to the Plaintiffs (“Side Letter”). The relevant terms of the Side Letter are as follows: a. The 2nd President and Chief Executive Officer (“CEO”) of the Companies after Dato’ Poh Kim Seng (“Dato’ Poh”) (who was appointed as the 1st President and CEO of the Companies pursuant to the SHA) shall be appointed by the 1st Defendant based on a nomination by the Plaintiffs. b. The 3rd and subsequent Presidents and CEOs shall be nominated and appointed by the 1st Defendant. The 1st Defendant will respect the recommendations of local candidates from the Companies by the Plaintiffs. The 1st Defendant shall not unreasonably reject or delay the appointment of candidates recommended by the Plaintiffs. c. In the event the Plaintiffs appoint one local employee of the Companies as a director in appreciation of his performance in the Companies and if the Plaintiffs request, the 1st Defendant shall appoint one local 5 employee of the Companies as one the 1st Defendant’s four directors. The 1st Defendant shall not unreasonably reject or delay the appointment of candidates recommended by the Plaintiffs. [7] The Plaintiffs’ claim in this suit is premised on their contention that the terms of the SHA and the Articles do not fully reflect the parties’ actual intention. They claim that the SHA and the Articles ought to be read together with the Side Letter. [8] Hence, the Plaintiffs contend that the 1st Defendant had failed to abide by the terms of the Side Letter and the intention of the parties. In this regard, the 1st Defendant is in breach of the Side Letter by failing to: a. appoint the President and CEO of the Companies based on the Plaintiffs’ recommendation; and b. appoint the 4th director of the Companies as nominated by the 1st Defendant, based on the Plaintiffs’ recommendation. [9] The 1st Defendant’s defence is that the Side Letter is null and void and has no effect on the appointment of the President and CEO of the Companies and the 4th director of the Companies as nominated by the 1st Defendant. [10] In preparing for the trial of this action, parties exchanged documents, as directed by this court. The 1st Defendant had included as part of the documents exchanged, a series of documents that had been 6 marked ‘without prejudice’ (“Documents”). The Documents concern the 1st Defendant’s request for the Plaintiffs to buy back the 1st Defendant’s shares in the Companies. This arose as the 1st Defendant had alleged that inappropriate fund transfers were taking place between related companies in the group, and as such, the 1st Defendant demanded the Plaintiffs to buy back 19% of the shares of the Companies that it had purchased in 2012 (“Share Buy-Back Dispute”). [11] The Plaintiffs therefore filed this application, for an order to expunge the Documents from the records of this court, and to exclude the Documents from being part of the evidence in this action. C. Considerations [12] The main issue for consideration is the status of the Documents, which have been marked ‘without prejudice’. The parties do not dispute that the Documents are marked ‘without prejudice’. The issue in contention is whether the Documents would be inadmissible due to the fact that they are marked as such. [13] The issue of admissibility of ‘without prejudice’ documents was addressed in Malayan Banking Bhd v. Foo See Moi [1981] 2 MLJ 17, where the Federal Court held that: “It is settled law that letters written without prejudice are inadmissible in evidence of the negotiations attempted. This is in order not to fetter but to enlarge the scope of the negotiations, so that a solution acceptable to both sides can be more easily reached …” 7 [14] This principle has been adopted in various cases, including in Oh Kuang Liang v Associated Wood Ind Sdn Bhd [1995] 4 MLJ 390; Dusun Desaru Sdn Bhd & Anor v Wang Ah Yu & Ors [1999] 5 MLJ 449; and East Coast Economic Region v Inai Kiara Sdn Bhd & Anor and another appeal [2019] MLJU 1251. [15] The 1st Defendant relied on East Coast Economic Region (supra) and argued that the heading ‘without prejudice’ would not conclusively or automatically render a document so marked, privileged and inadmissible. A court may look at the document in order to determine its nature. [16] I do not disagree with the 1st Defendant’s argument. However, I note that in East Coast Economic Region (supra), the court dismissed the application to expunge the documents which were in issue because the documents were not related to any discussion on the settlement of the dispute. Hence the Court of Appeal found that the privileged status of the ‘without prejudice’ letters simply did not arise. [17] In the instant case, there is no issue of conclusively or automatically rendering the Documents as privileged documents. The Documents have been considered and their content was the subject of arguments by the parties. Having considered the Documents and their content, I find them to have been made on a ‘without prejudice’ basis and are thus inadmissible as evidence in the proceedings before this court. I make this finding not only because they have been marked ‘without prejudice’, but more importantly, because they contain proposals to settle the Share Buy-Back Dispute. 8 [18] It was highlighted by the 1st Defendant that the Share Buy-Back Dispute, which is the subject matter of the Documents, is not directly related to the proceedings before this court. The 1st Defendant argued that as the Documents do not contain issues to be determined by this court, the Documents should not be accorded privileged status that protects ‘without prejudice’ communications. [19] Having argued that the content of the Documents is not directly related to the proceedings before this court, the 1st Defendant then pointed out that the Documents are not adduced in these proceedings to enforce the Share Buy-Back Dispute. Rather, the 1st Defendant had intended to adduce them to prove that HK Tan was appointed pursuant to the agreement between the Plaintiffs and the 1st Defendant. In this regard, although the subject matter of the Documents may not be related to these proceedings, as pointed out by the 1st Defendant itself, details of the appointment of HK Tan are contained in the Documents. So are the positions of the parties on the status of the Side Letters. These issues are in fact related to proceedings before this court, so I find myself being unable to agree with the 1st Defendant’s argument. [20] On this point, I am guided by the decision of Abdul Malik Ishak J (as His Lordship then was) in Oh Kuang Liang (supra). The following passages at page 394 are of relevance: “It appears therefore that the 'without prejudice rule' is a rule governing the conduct of the trial in particular controlling the admissibility of evidence and is founded on the time honoured public policy of encouraging litigants to settle their 9 differences rather than litigate them in a court of law. Court battles are to be avoided if the parties could settle their differences amicably.” (emphasis added) [21] As explained by His Lordship, the privilege accorded to documents marked ‘without prejudice’ is intended to encourage litigants to settle. For this to happen, parties must be able to lay their cards out on the table during negotiations, without fear that whatever was discussed in the course of settlement would be used against them, if settlement is not reached. In this instant case, to use the Documents for the purpose of these proceedings would be inconsistent with the policy intention behind why ‘without prejudice’ documents are protected, which is to encourage settlement. [22] Rush & Tompkins Ltd v Greater London Council And Another [1989] AC 1280 provided further guidance on this issue. In this case, the House of Lords accorded protection to documents marked ‘without prejudice’, even though the documents relate to a settlement between different parties in the same litigation. The House of Lord held at page 1299 that: “I have come to the conclusion that the wiser course is to protect "without prejudice" communications between parties to litigation from production to other parties in the same litigation. In multi-party litigation it is not an infrequent experience that one party takes up an unreasonably intransigent attitude that makes it extremely difficult to settle with him. In such circumstances it would, I think, place a serious fetter on negotiations between other parties if they knew that everything that passed 10 between them would ultimately have to be revealed to the one obdurate litigant. What would in fact happen would be that nothing would be put on paper but this is in itself a recipe for disaster in difficult negotiations which are far better spelt out with precision in writing. If the party who obtains discovery of the "without prejudice" correspondence can make no use of it at trial it can be of only very limited value to him. It may give some insight into his opponent's general approach to the issues in the case but in most cases this is likely to be of marginal significance and will probably be revealed to him in direct negotiations in any event. In my view this advantage does not outweigh the damage that would be done to the conduct of settlement negotiations if solicitors thought that what was said and written between them would become common currency available to all other parties to the litigation. In my view the general public policy that applies to protect genuine negotiations from being admissible in evidence should also be extended to protect those negotiations from being discoverable to third parties….” (emphasis added) [23] In the case before this court, even though the Documents that have been marked ‘without prejudice’ are not directly related to the proceedings before this court, there are issues in the Documents that are connected to these proceedings. Thus, guided by the finding of the House of Lords in Rush v Tompkins (supra), I am of the view that the admission of these Documents in these proceedings would be inconsistent with the 11 public policy of protecting the course of genuine negotiations, to encourage parties to settle disputes. [24] As such, it is my finding that the Documents must be expunged from the records of this court, and excluded from being part of the evidence in these proceedings. [25] I will now touch upon the next few arguments put forward by the 1st Defendant. The 1st Defendant explained that the Documents were produced by Intech PMSM Sdn Bhd (“Intech)” in Pulau Pinang High Court Suit No PA-22NCvC-141-07/2017, which is a claim involving the 2nd Defendant in this suit and Intech (“Intech Suit”). The 1st Defendant argued that because the Documents have been disclosed in the Intech Suit: a. the Plaintiffs have waived privilege attached to the Documents; and b. the Documents are now public documents. [26] The 1st Defendant pointed out the connection between the Plaintiffs and Intech, namely that Dato’ Poh is a director and shareholder of Intech, and Dato’ Poh’s brother, Poh Liong Ban had deposed affidavits and appeared as a witness on behalf of Intech in the Intech Suit. [27] I disagree with the 1st Defendant’s argument on the waiver of privilege, for the simple reason that the Plaintiffs are not a party to the Intech Suit. As such, they cannot be said to have waived any privilege related to the Documents just because the Documents had been disclosed in the Intech Suit. The mere connection between the Plaintiffs 12 and Intech as explained by the 1st Defendant would not be enough to show a waiver of privilege by the Plaintiffs. [28] Thus, the circumstances arising in Dusun Desaru (supra), which was relied on by the 1st Defendant to support its argument, would not arise in this case. In Dusun Desaru, the plaintiffs had introduced a letter marked ‘without prejudice’ in the proceedings, then objected to the introduction of letters marked ‘without prejudice’ by the 6th defendant. It was in these circumstances that the court held that the plaintiff had waived the privilege attached to the documents. [29] On the issue of public documents, reference is made to section 74 of the Evidence Act 1950: “The following documents are public documents:

documents forming the acts or records of the acts of –

the sovereign authority;

(ii) official bodies and tribunals; and

(iii) public officers, legislative, judicial and executive, whether Federal or State or of any other part of the Commonwealth or of a foreign country; and

public records kept in Malaysia of private documents.” 13 [30] The Documents clearly do not fall within the definition of ‘public documents’ as set out above. [31] In Malaysian Newsprint Industries Sdn Bhd v Bechtel International Inc & Anor [2016] MLJevi 152, parties sought to introduce documents marked ‘without prejudice’ during trial. These documents had been earlier included in documents for the stay application in the action. The plaintiff applied for those documents to be expunged. The court firstly held that the documents in question do not qualify as public documents pursuant to section 74 of the Evidence Act 1950. Further, the court held that: “[80] Even if those documents are public documents, the fact that a document is a public document does not necessarily mean that it is either relevant or admissible. That question has to be decided with reference to the other provisions of the Act (per Mokhtar Siddin J as he then was) in Dato’ Yap Peng v Public Prosecutor [1993] 1 MLJ 337, at p 349 (HC)).” [32] In Dato’ Yap Peng v Public Prosecutor [1993] 1 MLJ 337, the court held that the evidence could not be admitted because of non-compliance with section 33 of the Evidence Act 1950, even though the evidence qualified as public documents under section 74 of the Evidence Act 1950. In this instant case, the qualifications under section 33 of the Evidence Act 1950 would not have been met, and as such, even if the Documents came within the definition of ‘public documents’ under section 74 of the Evidence Act 1950, the Documents would still not be admissible. 14 D.

[33] Taking the above considerations into account, I allowed the Plaintiffs’ application in Enclosure 43. I ordered the Documents to be expunged from the records of this court, and to be excluded from being part of the evidence in this action. Dated 31 August 2021 -sgd-Adlin binti Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiffs : Yap Boon Hau (together with Ong Kai Rou) of Messrs. Mah Kamariyah & Philip Koh 1st Defendant : Mohamed Izzul Faris Mohd Ghani (together with Tan Xue Qi and Sandra Tan) of Messrs. Syed Ibrahim & Co 2nd and 3rd Defendants : Simrenjeet Singh of Messrs. Simrenjeet, Tay & Co 15 Legislation referred to: Evidence Act 1950, section 33, section 74 Cases referred to: Dato’ Yap Peng v Public Prosecutor [1993] 1 MLJ 337 Dusun Desaru Sdn Bhd & Anor v Wang Ah Yu & Ors [1999] 5 MLJ 449 East Coast Economic Region v Inai Kiara Sdn Bhd & Anor and another appeal [2019] MLJU 1251 Malayan Banking Bhd v. Foo See Moi [1981] 2 MLJ 17 Malaysian Newsprint Industries Sdn Bhd v Bechtel International Inc & Anor [2016] MLJevi 152 Oh Kuang Liang v Associated Wood Ind Sdn Bhd [1995] 4 MLJ 390 Rush & Tompkins Ltd v Greater London Council And Another [1989] AC 1280