Newaction Marketing Sdn Bhd v Lee Lun Teong (WA-22NCC-88-02/2025)

NEWACTION MARKETING SDN BHD …FIRST PLAINTIFF (Company No.: 200401018860

TAN HENG TA …SECOND PLAINTIFF (IC No.: 681225-01-5809) AND LEE LUN TEONG …DEFENDANT (IC No.: 820310-06-5111) S/N odYdMJmAw0OqlntuygjYWw

[Application for discovery of document against plaintiffs]

This is an application via a Notice of Application dated 06-06-2025 [Enclosure 13] by the defendant against the plaintiffs for discovery of an alleged Friendly Loan Agreement.

The application is made pursuant to Order 24 and/or Order 92 Rule 4 of the Rules of the Court 2012 [“ROC 2012”].

The plaintiffs oppose the application.

On 11-11-2025 I heard counsel. I dismissed the application with costs of RM 5,000 to subject to allocatur.

The defendant has appealed to the Court of Appeal on 09-12-

These are my Grounds of Decision. Pleaded case of the plaintiffs S/N odYdMJmAw0OqlntuygjYWw

The plaintiffs contend the following as set out below.

In early 2023, the defendant, through Bina Harga Group Sdn Bhd (“BHGSB”), offered the 2nd plaintiff the opportunity to participate in and revive a development project with Dewan Bandaraya Kuala Lumpur (DBKL) involving Coneff Corporation Sdn Bhd (Coneff), by subscribing to Redeemable Convertible Preference Shares (RCPS) in BHGSB worth RM 10,000,000.00.

Relying on the defendant’s representations about the profitability and success of the project, the plaintiffs agreed to invest. On 27- 02-2023, the plaintiffs and defendant entered into a Subscription Agreement, whereby the 1st plaintiff agreed to subscribe for RM 10,000,000.00 RCPS in BHGSB at RM 1.00 per share.

To secure this investment, the defendant personally executed several related documents namely a Letter of Guarantee dated 27-02-2023, a Put Option Agreement dated 27-02-2023, a Deed of Trust dated 27-02-2023 and a Power of Attorney.

The defendant breached the trust by transferring all BHGSB’s shares in Coneff to his own name without the plaintiffs’ consent, S/N odYdMJmAw0OqlntuygjYWw failed to appoint the 2nd plaintiff as an authorised bank signatory for Coneff’s Housing Development Account (HDA), and refused to transfer the trust shares to the 1st plaintiff as required.

As a result of the defendant’s conduct, the plaintiffs have suffered losses, including inter alia, the loss of ownership and control over the trust shares in BHGSB, the indirect ownership of Coneff, and the benefits tied to the development project.

Hence, the present civil action (Enclosure 1) was filed by the plaintiffs against the defendant. Notice to Produce Documents Referred to in Pleadings

On 02-05-2025, the defendant served a Notice to Produce Documents Referred to in Pleadings (Enclosure 7), seeking production of the Letter of Guarantee, Put Option Agreement, Deed of Trust, and the Power of Attorney. The plaintiffs allowed inspection of the requested documents. Further discovery of the purported Friendly Loan Agreement S/N odYdMJmAw0OqlntuygjYWw

The defendant filed the present discovery application on 06-06- 2025 seeking further discovery, namely the production of the purported Friendly Loan Agreement. Law

Order 24 Rule 3 of the Rules of Court 2012 allows the Court to order any party to give discovery by serving a list of all documents which are or have been in that party’s possession, custody, or power, including those the party relies on, and those which could adversely affect or support any party’s case.

Order 24 Rule 8 of the Rules of Court 2012 provides that the Court will only order discovery if it is satisfied that the discovery sought is necessary for the fair disposal of the case or for saving costs, and may dismiss it if it is not necessary.

The applicable judicial test for discovery is well settled. To obtain an order for discovery, the applicant must satisfy four principles. These are-i. the document must be identified; S/N odYdMJmAw0OqlntuygjYWw ii. the document must not only be relevant but also necessary to the disposal of the matter fairly; iii. the document must be or have been in the possession, custody, or power of the party against whom the order is sought; and iv. the discovery of any documents for inspection shall not be made unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs. The test is not whether the discovery would fairly dispose of the case, save time of trial and cost of calling witnesses. The emphasis is on necessity not fairness and it is for the applicant to satisfy the court. The burden is on the applicant and he must provide materials to satisfy the court of such necessity. [See Nguang Chan aka Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40, CA].

This is what the Court of Appeal via Tengku Baharudin Shah JCA said in Nguang Chan aka Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40, CA - [11] Under r 13(1) an order for the production of documents for inspection is not to be made unless the court is of opinion that such order is necessary either for disposing fairly of the case or matter or S/N odYdMJmAw0OqlntuygjYWw for saving costs. It is for the party seeking production to satisfy the court that such production is necessary for the purpose specified in r 13(1) per Parker LJ in Dolling-Baker v Marrett & Ors [1991] 2 All ER 890 and Ventouris v Mountain [1991] 1 WLR 607. [12] And in considering the application the court should bear in mind the words of Sir Thomas Bingham MR in Taylor v Anderton [1995] 1 WLR 447 at p 462 that ‘the purpose of the rule is to ensure that one party does not enjoy an advantage or suffer an unfair disadvantage in the litigation as the result of a document not being produced for inspection.’ … [24] There is one other matter which we cannot ignore and leave unsaid because it is fatal to the decision of the learned judge and vitiated the exercise of his discretion. It is this. He apparently misdirected himself in law when he misappreciated the issue before him. In his grounds of decision, the learned judge states that the issue for his determination was whether the discovery and production of the documents would fairly dispose of the case, save time of trial and cost of calling witnesses which be answered in the affirmative. [25] As stated earlier the real issue is compliance with r 13(1) which stipulates that discovery may only be ordered if the court is of opinion that such order is necessary either for disposing fairly of the cause or matter or for saving costs. The test is necessity not fairness and it is for the applicant to satisfy the court, see Dolling-Baker’s case and Ventouris v Mountain. Because of that erroneous premise the learned judge appears to be more concerned with relevance and fairness and omitted to consider whether and why it was necessary for the order S/N odYdMJmAw0OqlntuygjYWw to be made. The respondents also failed to provide any materials to satisfy the court of such necessity. [Emphasis added] Application to facts

The plaintiffs contend the defendant has failed to satisfy the third limb of the test, namely, to show that the document sought i.e. an alleged Friendly Loan Agreement must be or have been in the possession, custody, or power of the party i.e. the plaintiffs against whom the order is sought.

The burden is on the defendant to provide materials to satisfy the court the document sought i.e. an alleged Friendly Loan Agreement must be or have been in the possession, custody, or power of the plaintiffs. [See Nguang Chan aka Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40, CA].

The plaintiffs in Enclosure 20 have categorically denied the existence of any Friendly Loan Agreement that was allegedly entered into between the plaintiffs and the defendant. The plaintiffs cannot produce what they do not possess. S/N odYdMJmAw0OqlntuygjYWw

It is undisputed that the plaintiffs are not suing on a Friendly Loan Agreement entered into between the plaintiffs and the defendant.

The High Court in M Wealth Corridor Sdn Bhd v BJ Properties Sdn Bhd & Ors [2021] MLJU 2157, HC dismissed the discovery of telephone records where the applicant failed to substantiate the existence of the records or to prove that they were within the defendants’ possession.

The principle was also applied in Natasha Beverly Dental Sdn Bhd v Arlena Philip Lee [2025] CLJU 857, HC, where the High Court held as follows: “[22] Respectfully, the Sessions Court failed to adequately address whether the documents belonging to Beverly Wilshire and Beverly Dentistree were within the “possession, custody or power” of the defendant. The determination of this element was crucial as discovery cannot be ordered against a party in respect of documents that are beyond its legal control.”

A mere and/or bare assertion by the defendant without any evidence cannot be a sufficient basis for an order for discovery. S/N odYdMJmAw0OqlntuygjYWw The Discovery Application Amounts to a Fishing Expedition

It is apparent that the defendant’s allegation of a separate loan agreement is a bare assertion, introduced belatedly to recharacterize a bona fide investment as an illegal moneylending arrangement.

The Court of Appeal in Nguang Chan aka Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40 held at page 47 as follows: “[13] Finally the court would dismiss a plaintiff’s application for discovery if it is of the view that the plaintiff was ‘merely fishing for evidence to prop up his case’ and to allow him discovery would be unduly oppressive to the party giving discovery.” S/N odYdMJmAw0OqlntuygjYWw

For the reasons above, I dismiss the defendant’s application for discovery with costs of RM 5,000 to subject to allocatur. Dated: 26th January 2026 ………(signed)………… Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) Counsel for plaintiffs: Ahmad Ezmeel bin Ahmad Tarmizi and Athari bin Bahardin. Athari (Shah Alam). Counsel for defendant: Ong Swee Long and Teo Chung Loong. S/N odYdMJmAw0OqlntuygjYWw Armiy Rais (Petaling Jaya). CASES REFERRED TO: 1) Dolling-Baker v Marrett & Ors [1991] 2 All ER 890 and Ventouris v Mountain [1991] 1 WLR 607. 2) M Wealth Corridor Sdn Bhd v BJ Properties Sdn Bhd & Ors [2021] MLJU 2157, HC. 3) Natasha Beverly Dental Sdn Bhd v Arlena Philip Lee [2025] CLJU 857, HC. 4) Nguang Chan aka Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40, CA. 5) Taylor v Anderton [1995] 1 WLR 447. LEGISLATION REFERRED TO: 1) Rules of the Court 2012, Order 24, Order 24 Rule 3, Order 24 Rule 8, Order 92 Rule 4. S/N odYdMJmAw0OqlntuygjYWw