1. ) Lokman Bin Dato' Mohd Kamal Teh v 1. ) Wong Chee Yep (BA-12ANCvC-42-03/2021)

1.

LOKMAN BIN DATO’ MOHD KAMAL TEH MUSTAKIM BIN DATO’ MOHD KAMAL TEH

1.

2.

LOKE HSIAO LI KAM MA AUTO CHANNEL SDN BHD 10/12/2022 16:21:41 BA-12ANCvC-42-03/2021 Kand. 33 JUDGMENT [1] An appeal is lodged by plaintiffs against decision of the sessions court judge (SCJ), who had struck out the plaintiff’s writ and statement of claim (SOC) against defendants, pursuant to an application by the defendants under Order 18 rule 19 of the Rules of Court 2012 (ROC). [2] Basic premise for the order by SCJ is because the plaintiffs have no right to sue the defendants, as they lack locus standi. Ensuing from that, plaintiffs is stated to have no reasonable cause of action against defendants. [3] Claim by plaintiffs is for an injunction and declaration against defendants. They have claimed there were shares worth 250,000 units in the third defendant (D3) company held by the first and second defendant (D1 & D2) as trustees for the benefit of plaintiffs. Together with the shares there were also monies held in trust for the plaintiffs. Thus, plaintiffs are claiming for return of it and pending the return, they sought an injunction to prevent the defendants from dealing with the said shares and monies as well as for a declaration for the defendants to disclose all bank statements, statement of accounts, and audit report for the year 2017 to 2019. It also turns out in the SOC, they are in fact claiming on behalf of their father, who is adjudged bankrupt since the year 1999. Therefore, he has no locus standi to sue unless and until he obtains permission from the Director General of Insolvency Department to pursue a claim against the defendants pursuant to section 38 (1) (a) of the Insolvency Act 1967 (Act 360). In the absence of that permission or sanction, the plaintiffs being children are pursuing the claim. Can they do so? [4] Plaintiffs as the children have now commenced this claim for and behalf of their father and for his benefit, by alleging that he contributed RM500,000 as capital to the formation of D3 company wherein in reality, plaintiffs’ father who was adjudged bankrupt since the year 1999, did not sue. For such a claim, cause of action only rests with the father of plaintiffs and not the plaintiffs, who are his children. The plaintiffs are not party to the purported transaction between the defendants and their parents. A further flaw noted in the case is, although the SOC speaks of the father of plaintiffs who is supposed to be the owner of the shares and monies worth RM500,000 held on trust by D1 and D2 for him but the affidavit in reply filed by plaintiffs in opposition to the application by defendants to strike out the plaintiffs’ claim, essays under oath that the monies belong to the mother instead. So where is the consistency. Moreover, the affidavits filed by plaintiffs could not supplement the SOC filed in the case against defendants. In any event, it is trite to say that the plaintiffs could not sue the defendants on behalf of their father, as they are not party to the purported contractual transaction with the defendants. [5] Appeal to this court is a rehearing pursuant to section 29 of the Courts of Judicature Act 1964 (Act 91). Thus, the cause papers in the case, including the writ and SOC, affidavits filed for and against the application to strike out under O18 r 19 ROC as well as the grounds of judgment by the SCJ comes under curial scrutiny. On perusal of those cause papers, the following are apparent: • A myriad of facts, averments and allegations were pleaded, and made against defendants. • Facts pleaded in the statement of claim (SOC), are not made under oath, and it would pertain a trial which will take place in future. • It pertains alleged breaches by the defendants vis parents of plaintiffs and not the plaintiffs themselves. It has to be emphasized, the parents are not party to the writ. • The alleged transaction pleaded is between defendants and parents to the plaintiffs, and not the plaintiffs themselves. • Prayer in the SOC for declaration that D1 and D2 transfer the entire shares in D3 company to the plaintiffs on the assumption that there exists a written trust given by the plaintiffs’ father to the defendants to surrender D3’s business to the plaintiffs upon reaching adulthood, is insufficient to constitute a cause of action against the defendants by the children who are not parties to the purported transaction. • During the trial, the plaintiffs who are parties to the proceeding would be unable to offer testimonial evidence on the alleged transaction, as they are not parties to it with the defendants. • On that score, even if trial were to proceed, the plaintiffs could not offer direct evidence pursuant to section 60(1) of the Evidence Act 1950 (Act 56), but they have to rely on their parents, whom seems to be aggrieved parties to the alleged transaction but not party to the suit. • It would be only the parents of the plaintiffs who would be able to adduce evidence, if any, in respect of the payment of RM500,000 as capital to form and operate company D3’s business. • Surveying the SOC, it is apparent the plaintiffs have failed to show or provide detailed particulars pursuant to O18 rule 12(1) ROC, on the contractual agreement, and/or trust and/or any proof to connect them with the defendants. Thus, on perusing the SOC, there is no nexus or link revealed between the plaintiffs and defendants, for a cause of action to be constituted. (See: Lim Kean v Choo Koon (1970) 1 MLJ 158). The SOC contains mere allegations and averments of the father of the plaintiffs against defendants. To reiterate, the plaintiffs are not privy to the contractual or trust agreement as alleged in the SOC. [6] Consequently, left is claim by plaintiffs which is not grounded on a reasonable cause of action against the defendants. (See: Bandar Builder Sdn Bhd v UMBC Bhd (1993) 3 MLJ 36). On that score, the SCJ has directed herself correctly both on the facts and law to allow the writ and SOC by plaintiffs to be struck out. If need be, and if the allegations and averments in the SOC is true with material particulars involving the father and mother of the plaintiffs, against the defendants, they could institute the action against defendants, but of course subject to the limitation period to sue. To conclude, there is no appealable error committed by the SCJ and the SOC filed by plaintiffs does not disclose a cause of action against the defendants. Claim made by plaintiffs is seriously and conspicuously unsustainable pursuant to O18 r 19(1) ROC, and also plain and obvious to be struck out. [7] In the upshot, appellate intervention is unjustified and appeal by plaintiffs is thus dismissed with costs of RM3000. In view of that, application by the respondent/defendants for security of costs, in enclosure 4, is rendered otiose. Rightly, it is also withdrawn by counsel for defendants, thus the application is struck out, with no order as to costs. Dated 10 December 2022 SGD Muniandy Kannyappan Judge High Court NCVC 11 Shah Alam. For appellant/plaintiffs – Shahrul Nizam Azmir of Tetuan Amin, Nizam & Rohani. For respondent/defendants – Madavy Krishnan of Messrs. Pani, Normala & Co.