Anita binti Gelam Nabib v Medic Dot Com Sdn. Bhd. (BA-24NCC-15-02/2024)

MEDIC DOT COM SDN. BHD. [NO. SYARIKAT: 201001029518 (913439-T)]

MOHD ZULKIFLI BIN MOHD YASSIN S/N uBsa38xom0aZjJvi/W5fgg (NO. K/P: 811020-08-5427) … DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] The Plaintiff is a minority shareholder in the 1st Defendant, holding 30% of the issued shares. The remaining 70% of the issued shares are held by 2nd Defendant. The Plaintiff and 2nd Defendant were married until 18-12-2023 when they divorced. The Plaintiff filed this Originating Summons on 7-2-2024 to claim remedies for minority oppression. The 2nd Defendant contends that the Plaintiff was only holding her 30% shares on trust for him. [2] On 17-10-2024, I heard and dismissed the Defendants’ application to convert the Originating Summons to a writ action (“Enclosure 7”), having ascertained that the only issue calling for oral evidence is the existence of the trust. I directed either party wishing to cross-examine the other on their affidavits on that limited issue to file an application under Order 38 Rule 2(2) Rules of Court 2012 within 2 weeks. [3] These are the grounds for the decision on Enclosure 7. Status of Originating Summons [4] In line with direction given by the Court on 17-10-2024, the Defendants applied to cross-examine the Plaintiff on her affidavit. The Plaintiff did not file a similar application. Counsel for the Plaintiff also notified the Court during case management on 6-11-2024 that the Plaintiff S/N uBsa38xom0aZjJvi/W5fgg intends to oppose the Defendants application as the Plaintiff refuses to be cross-examined. [5] By the time Enclosure 7 was filed on 10-5-2024, the parties had exhausted their exchange of affidavits in the Originating Summons proper. The issues raised in the affidavits were contentious but were neither numerous nor complex. I set out the relevant arguments below. Competing Contentions [6] The Plaintiff was appointed a director of the 1st Defendant on 23-7- 2012 while she was married to the 2nd Defendant. She became a director in place of her brother and was involved in management of the 1st Defendant, including in decision-making. She contended that she became a shareholder when she purchased 3,000 shares from her brother and the 2nd Defendant. [7] The Plaintiff further contends that she was already employed as the Manager for Finance and Human Resources for the 1st Defendant since 1-11-2010. She claims that she drew a salary of RM7,200.00 a month but has never drawn any commission, fees and/or allowances as a director. [8] The 2nd Defendant contends that the Plaintiff has no beneficial interest in the 30% shares that she holds in the 1st Defendant and played no part in any decision-making for the 1st Defendant as she alleged. According to the 2nd Defendant, Plaintiff agreed to hold those shares on trust and to transfer or return it to him when requested. [9] The 2nd Defendant further contends that the Plaintiff received the monthly RM7,200.00 payment from the 1st Defendant that she referred to, S/N uBsa38xom0aZjJvi/W5fgg not as a salary but as emolument, and Plaintiff also received a director’s allowance to pay the bank loan for the marital property purchased in the Plaintiff’s name, her credit card, cars and other expenses. [10] The 2nd Defendant denies that the Plaintiff was ever appointed as Manager for Finance and Human Resources for the 1st Defendant as alleged, and claims that the Plaintiff had forged the offer letter and pay slips that she exhibited. Grounds for Conversion [11] The Plaintiff identified the following as constituting the alleged acts of oppression by the 2nd Defendant in her Affidavit:

The Plaintiff’s removal from management of the 1st Defendant when she was removed as a director on 22-12-2023 and summarily terminated as Manager for Finance and Human

Restriction of the Plaintiff’s access to corporate secretarial records, the 1st Defendant’s bank account and to the office and staff of the 1st Defendant;

Failure of the Defendants to declare and distribute any dividends to the Plaintiff as a shareholder of the 1st Defendant;

The 2nd Defendant’s threat to dilute the Plaintiff’s shareholding; and

The 2nd Defendant’s drawing of sales commissions without any company resolution. S/N uBsa38xom0aZjJvi/W5fgg [12] The grounds cited by the 2nd Defendant as justification to convert the Originating Summons to a writ are the following key issues in response to the alleged acts of oppression, namely:

the existence of an oral trust of the shares held by the Plaintiff;

the falsification of documents relating to the Plaintiff’s alleged employment; and

the intended counterclaim against the Plaintiff. The 2nd Defendant argues that the above issues cannot be determined by way of affidavit evidence alone. Analysis of Grounds [13] The usual mode for proceeding with an action for minority oppression is the Originating Summons procedure. It is only in the unlikely event that proceedings cannot be fairly disposed of through cross-examination of deponents on affidavits can the parties then resort to converting it to a writ action. [14] This Court agreed that proof of the alleged creation of an oral express trust of the Plaintiff’s shares in the 1st Defendant can only be fairly addressed by hearing oral evidence on the issue. It is for this reason that the Court allowed the parties liberty to file their respective applications for leave to cross-examine each other on their affidavits on this limited issue. [15] As for the intended counterclaim, no notice was given in the Defendants’ affidavit in response to the Originating Summons of the intended counterclaim pursuant to Order 28 Rule 7(2) of the Rules of Court 2012. In the affidavit in support of Enclosure 7, the Defendants S/N uBsa38xom0aZjJvi/W5fgg simply referred to a solicitor’s letter dated 25-1-2024 for details of said counterclaim. [16] The content of the solicitors’ letter dated 25-1-2024 has been substantially reproduced in the Defendants’ affidavits. As far as can be discerned, the intended counterclaim relates to the return of the trust shares and possibly the Plaintiff’s alleged unlawful conduct in falsifying documents to misuse company funds for her personal use. The Defendants say this was why the Plaintiff was removed as a director, but relied on provisions in the Articles of Association that allowed for her removal by a majority vote. [17] In considering whether the issues raised as triable warrant a conversion, this Court also had in mind the trite principles that Section 346 of the Companies Act 2016 may not outflank the rule in Foss v Harbottle and further, the remedies under that provision are only available if the complaints relate to the Plaintiff’s status as a shareholder, not as a director or employee. [18] The Plaintiff’s complaint about her employment termination is not an issue that can be addressed under Section 346 of the Companies Act 2016 and the Defendants’ counterclaim for the return of the trust shares relates to the existence of the trust for which cross-examination on affidavits has been allowed. As for any complaint against the Plaintiff for breach of fiduciary duties, the 1st Defendant has already filed a suit in BA- 22NCC-105-05/2024 against the Plaintiff. S/N uBsa38xom0aZjJvi/W5fgg Conclusion [19] For the above reasons, this Court found no good reason to convert this Originating Summons to a significantly more protracted writ action and dismissed Enclosure 7 with costs. Bertarikh : 11 November 2024 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Plaintif : Liyana Ain Nasyihin Binti Ahmad, The Chambers Of Liyana Ain Nasyihin Untuk Defendan-Defendan : Fatin Izyan Mazlan, Messrs Akberdin & Co S/N uBsa38xom0aZjJvi/W5fgg