3.2022 and 23.9.2022. The Plaintiff's conduct in pursuing this matter internally and providing the Majority Directors every chance to justify the payments before taking out this Originating Summons is compelling evidence of his bona fides and militates strongly against any suggestion of delay or collateral purpose. S/N n88MmwzgEkiBdoJGpgrKFQ [69] On a holistic consideration of the evidence, I find that the Plaintiff had at all times acted with alacrity and probity in seeking to bring the Majority Directors to account. The meticulously documented chronology of the Plaintiff's endeavours to obtain answers from the Majority Directors both at formal Board meetings and through informal correspondence leaves no room for doubt as to the Plaintiff's good faith in commencing this action. The 6-year period between the Plaintiff's first complaint and the institution of this Originating Summons was a consequence of the Majority Directors' obduracy, not the Plaintiff's indolence. [70] The Plaintiff had, with an abundance of caution and care, provided the Majority Directors every opportunity to vindicate the legitimacy of the substantial increase in Management Fees before taking the significant step of instituting a derivative action. This approach was rightly endorsed by the Court of Appeal in the Shareholders' Advance Suit as being consonant with the duty of good faith. The delay, if any, was not inordinate or unreasonable but a necessary result of the Plaintiff's painstaking efforts to procure accountability from the Majority Directors. [71] The entire factual substratum of the present case is therefore a far cry from that in Fazal Ellahi and LeDrew where the element of delay was either inexplicable or the product of a protracted period of inaction. Those authorities, which turn on their peculiar facts, are hence readily S/N n88MmwzgEkiBdoJGpgrKFQ distinguishable and do not advance the Majority Directors’ case. [72] For the foregoing reasons, I find that there has been no inordinate or unreasonable delay on the Plaintiff's part in commencing the present action which would constitute an abuse of process. The Majority Directors’ submission on this score is unpersuasive and is hereby dismissed. Abuse of process: Plaintiff seeking to access privileged information [73] The Majority Directors contend that the Plaintiff's intended derivative action is an abuse of process as he is purportedly seeking to access privileged information pertaining to the Company's conduct in the Plaintiff's lawsuits and/or effectively stifle the Company from defending against his lawsuits. The Majority Directors argue that the information ultimately sought by the Plaintiff vide the intended derivative action includes matters relating to the Company's conduct in the Plaintiff's lawsuits, such as the details of staff, consultants or advisors engaged by AMSB as well as the exact work done by them. It is submitted that such information is protected by legal professional privilege and the Plaintiff is well aware of this since he had voluntarily excused himself from Board discussions on issues pertaining to his lawsuits. S/N n88MmwzgEkiBdoJGpgrKFQ [74] The Plaintiff vehemently denies the Majority Directors’ allegations and contends that this argument is nothing more than a red herring designed to distract from the real issues at hand. The Plaintiff highlights that over the years, the Majority Directors have never once claimed, whether in Board meetings, correspondence or affidavits filed, that his requests for the Management Fees to be substantiated amounted to a backdoor attempt to access privileged information. This contention is only now raised for the first time in the Majority Directors’ submissions and is plainly an untenable attempt to conjure up a new defence. It is a well-established principle of law that parties cannot be permitted to make submissions on factual matters that were never pleaded or deposed to contemporaneously, as such submissions are tantamount to evidence from the Bar. Support for this can be found in a long line of authorities including Lie Kok Keong v Tang Container & Services Sdn Bhd [2003] 4 CLJ 288, Sematan Shrimp Hatchery Company v Aqua Fresh Company [2005] 7 CLJ 505 and Malayan Banking Bhd v Boo Hock Soon [2012] 1 LNS 971. [75] In any event, even if this argument is considered on its merits, I do not find it to be particularly convincing or substantive. A thorough perusal of the contemporaneous documents exchanged between the parties reveals that what the Plaintiff is seeking in the intended derivative action are routine business and commercial documents to prove that AMSB had indeed provided management services commensurate with the exorbitant quantum of Management S/N n88MmwzgEkiBdoJGpgrKFQ Fees charged. The Plaintiff had, in the 27 separate requests made to the Majority Directors over a period of 6 years from 2.11.2016 to 19.9.2023, asked for information and documents such as the number of staff employed by AMSB, their employment contracts and scope of work, the costs expended by AMSB on salaries and professional fees as well as timesheets showing the exact work done by AMSB's staff in relation to the legal proceedings. These documents are indubitably necessary for the Plaintiff to ascertain whether the astronomical increase in Management Fees from USD8,000 to USD40,000 or USD60,000 per month was justified. [76] A careful examination of the specific information and documents requested by the Plaintiff, as chronicled in paragraph 78 of the Plaintiff's Reply Submissions, shows that none of the items are in the nature of legal advice rendered by the Company's solicitors or any other materials that could possibly be protected by litigation privilege. In summary, the requests for information and documents are described as follows: a) On 2.11.2016, the Plaintiff made the 1st Oral Request during a Board of Directors’ meeting, asking for justification of the increase in Management Fees from USD8,000 to USD40,000 a month. b) On 14.11.2017, the Plaintiff made the 2nd Oral Request during another Board of Directors’ meeting, S/N n88MmwzgEkiBdoJGpgrKFQ asking for a breakdown of the USD40,000 monthly Management Fees budgeted for the following year. c) On 10.4.2018, the Plaintiff made the 3rd Oral Request during a Board of Directors’ meeting, requesting proof of expenditure for the USD40,000 a month and an explanation for the proposed increase from USD40,000 to USD60,000 a month. d) On 5.6.2018, the Plaintiff made the 1st Written Request via letter, seeking details of the additional staff and specialists engaged by AMSB to deal with litigation matters. e) On 8.8.2018, the Plaintiff made the 2nd Written Request via email, requesting explanations for the Management Fees paid in April, May, and June 2018. f) On 16.8.2018, the Plaintiff made the 3rd and 4th Written Requests via email, reiterating the previous requests and questioning how the company paid USD40,000 instead of the board-approved USD60,000. g) On 27.8.2018, the Plaintiff made the 5th Written Request via email to follow up on his previous emails. S/N n88MmwzgEkiBdoJGpgrKFQ h) On 12.9.2018, the Plaintiff made the 6th Written Request via email, following up again on unanswered questions regarding Management Fees. i) On 5.10.2018, the Plaintiff made the 7th Written Request, continuing to request clarification on the Management Fees for October 2018. j) On 15.7.2020, the Plaintiff made the 8th Written Request via email, questioning the basis of Management Fees charged during the MCO period when the company's offices were possibly closed. k) On 8.12.2020, the Plaintiff made the 9th Written Request, asking for supporting documents and justification for AMSB’s Management Fees and their comparison with actual legal fees paid to the Company’s solicitors. l) On 13.12.2020, the Plaintiff made the 10th Written Request, demanding the same information and supporting documents requested previously. m) On 11.1.2021, the Plaintiff made the 11th Written Request, repeating his demand for a response to his prior emails from December 2020. S/N n88MmwzgEkiBdoJGpgrKFQ n) On 22.2.2021, the Plaintiff made the 4th Oral Request during a Board of Directors’ meeting, proposing to reduce the Management Fees to USD8,000 a month and reiterating his questions from earlier emails. o) On 23.2.2022, the Plaintiff made the 12th Written Request, calling for the immediate reduction of the Management Fees to USD8,000 per month. p) On 18.3.2022, the Plaintiff made the 5th Oral Request during a Board of Directors’ meeting, once again motioning to reduce the Management Fees to USD8,000 per month. q) On 29.3.2022, the Plaintiff made the 13th Written Request, asking AMSB for detailed documents to show how the monthly Management Fees are justified. r) On 20.4.2022, the Plaintiff made the 14th Written Request via email, following up on his previous requests and questioning why AMSB’s Management Fees exceeded the Company’s legal fees. s) On 23.9.2022, the Plaintiff made the 6th Oral Request during a Board of Directors’ meeting, again proposing to reduce the Management Fees to USD8,000, citing unnecessary staff for legal cases. S/N n88MmwzgEkiBdoJGpgrKFQ t) On 17.10.2022, the Plaintiff made the 15th Written Request, asking for explanations for the basis of AMSB charging USD40,000 monthly and questioning if board papers are required to deliberate the matter. u) On 16.11.2022, the Plaintiff made the 16th Written Request, repeating his previous questions about Management Fees and board procedures. v) On 6.12.2022, the Plaintiff made the 17th Written Request, again asking for a breakdown of AMSB’s Management Fees over the last five years. w) On 26.2.2023, the Plaintiff made the 18th Written Request, following up on earlier emails and raising issues discussed at previous board meetings, including his proposal to reduce Management Fees. x) On 25.8.2023, the Plaintiff, through his solicitors, issued a Letter of Demand to the Board of Directors, formally requesting justification for the Management Fees and supporting documents. y) On 6.9.2023, the Plaintiff made a Letter via solicitors to follow up on the letter of demand dated 25.8.2023, as there had been no response from the Board. S/N n88MmwzgEkiBdoJGpgrKFQ z) On 19.9.2023, the Plaintiff issued a Statutory Notice via solicitors to the Board, giving notice of his intention to apply for leave to initiate derivative proceedings under section 347 of the Companies Act 2016. [77] The documents sought are all in the nature of commercial records relating to AMSB's expenditure and services provided in exchange for the Management Fees paid. There is absolutely no request for any privileged communications between the Company and its lawyers. The mere fact that some of the documents may pertain to litigation involving the Company does not cloak them with privilege, as they do not entail the disclosure of any legal advice or litigation strategy. [78] The suggestion that allowing the Plaintiff access to standard documents like employment contracts, salary details, and timesheets of AMSB's staff could somehow impair the Company's defence in the lawsuits brought by the Plaintiff does not seem like a well-supported or tenable position. The Plaintiff is not asking for the Company's privileged documents but merely seeking evidence that the services rendered by AMSB were proportionate to the Management Fees paid. It strains credulity to argue that the disclosure of such documents would stiffle or prejudice the Company's position in the legal proceedings commenced by the Plaintiff. S/N n88MmwzgEkiBdoJGpgrKFQ [79] That the Majority Directors are raising the spectre of privilege as an afterthought is evident from the fact that in the various replies by the Majority Directors to the Plaintiff's requests for supporting documents, not once was the issue of privilege asserted. [80] They show that the Majority Directors had ample opportunities to claim privilege if it was indeed applicable but conspicuously never did so. The ineluctable conclusion to be drawn from this omission is that the Majority Directors themselves did not genuinely believe that the documents sought by the Plaintiff were privileged in nature. [81] With respect, I find the Majority Directors’ reliance on the case of Ng Pak Mui v Tay Mary [2022] 11 MLJ 115 to be somewhat misplaced in this instance. In that case, the documents sought by the plaintiff in the intended derivative action included information passed between the company and its solicitors in respect of suits wherein the plaintiff was the opposing party. It was in those circumstances that Ong Chee Kwan JC (as he then was) found that part of the information sought may be protected by legal professional privilege. The factual matrix of Ng Pak Mui is thus fundamentally different from that in the present action, as the Plaintiff here is not seeking any of the Company's correspondence with its lawyers but only the disclosure of objective evidence to show that the quantum of Management Fees paid to AMSB was justified. S/N n88MmwzgEkiBdoJGpgrKFQ [82] On a holistic consideration of the evidence and the applicable legal principles, I find that the Majority Directors’ argument on abuse of process to be convincing and ought to be rejected. The Majority Directors have not shown any credible evidence that the Plaintiff is attempting to procure privileged information to stifle its defence in the legal proceedings. The documents sought by the Plaintiff are all in the nature of commercial records, not legal advice. The mere fact that some of these documents may relate to the litigation between the parties does not mean that they automatically attract legal professional privilege. If that were the case, a company can conveniently assert privilege over any document even tangentially connected to a legal dispute as a means of avoiding accountability. [83] The Majority Directors’ position that the Plaintiff's intended derivative action is an abuse of process, serving as a means to access privileged information, does not seem well-supported. This contention appears to have emerged relatively late, and may reflect an attempt to hinder the Plaintiff's claim. Nonetheless, I do not find this argument persuasive based on the available evidence. It is in fact the Majority Directors' obdurate refusal to provide any supporting documents to show that AMSB had rendered services commensurate with the Management Fees paid that smacks of bad faith and improper purpose. The inference that emerges from the Majority Directors’ conduct is that it has no credible evidence to justify the exponential S/N n88MmwzgEkiBdoJGpgrKFQ increase in Management Fees and is hence seeking to hide behind the cloak of privilege to avoid scrutiny. [84] In the circumstances, I do not find the Majority Directors' contention that the Plaintiff's intended derivative action amounts to an abuse of process aimed at obtaining privileged information to be well-supported. This appears to be a diversion from the core matters under dispute before the court. The argument on legal professional privilege, which was never once raised contemporaneously but advanced for the first time in these proceedings, is an afterthought that is factually and legally unsustainable. The Plaintiff has amply demonstrated that the documents sought in the intended derivative action are all in the nature of routine commercial records that do not attract privilege. I do not find the Majority Directors’ assertion of privilege as grounds to avoid providing justification for the substantial increase in Management Fees to be a convincing position. Transparency on this issue seems warranted. Accordingly, this argument is dismissed. Abuse of process: to multiplicity of proceedings [85] The Majority Directors submit that the Plaintiff's intended derivative action is an abuse of process as it would give rise to multiplicity of proceedings, since the issue of the legitimacy of the Management Fees paid by the Company to AMSB is already a live issue before the Court of Appeal in the Company's pending appeal against the dismissal of S/N n88MmwzgEkiBdoJGpgrKFQ Suit 163. The Majority Directors argue that in Suit 163, the Company had claimed the Management Fees from the Plaintiff and others as part of the general damages allegedly suffered by the Company as a result of a purported conspiracy to injure the Company. As such, the intended derivative action would result in two different courts trying the same issue and potentially arriving at inconsistent decisions on the legitimacy of the Management Fees, thereby creating a multiplicity of proceedings. The Majority Directors rely on the cases of Lai Kim Loi v Dato' Lai Fook Kim [1989] 2 MLJ 290 and Ho Num Chon & Anor v Tech-Lab Manufacturing Sdn Bhd [2017] 9 MLJ 32 in support of their contention. [86] The Plaintiff vehemently denies that the intended derivative action would give rise to any multiplicity of proceedings. It is submitted that despite sharing the common thread of the legitimacy of the Management Fees paid to AMSB, the substance, character and effect of Suit 163 and the intended derivative action are fundamentally different. The Plaintiff highlights that in Suit 163, the Company had sued the Plaintiff, NSSB and Dato’ Wan for conspiracy to injure and breach of duties, whereas in the intended derivative action the Plaintiff is suing the Majority Directors and AMSB for breaches of duties and unjust enrichment on behalf of the Company. Further, while one of the heads of general damages claimed by the Company in Suit 163 was the increase in Management Fees paid as a result of the alleged conspiracy, in the intended derivative action the S/N n88MmwzgEkiBdoJGpgrKFQ unsubstantiated increase in Management Fees itself forms the very basis of the action and is claimed as special damages. There are also material differences in the reliefs sought in the two actions. [87] The Plaintiff places reliance on the Court of Appeal's decision in Tai May Chean v New Way Capital Sdn Bhd & Anor and Another Appeal [supra] where it was held that the fact that multiple proceedings may arise from the same factual matrix does not ipso facto give rise to multiplicity if the substance, character and effect of the actions are different. Support is also drawn from the High Court's decision in Golden Plus Holdings Berhad and Ors v China Idea Development Limited and Ors [2021] 1 LNS 2083 which applied Tai May Chean and held that there is no duplicity of proceedings if the causes of action and reliefs sought in the two actions are distinct, even though they may share some overlap in the underlying facts. It is submitted that the Majority Directors’ reliance on Lai Kim Loi and Ho Num Chon is misplaced as the plaintiffs in those cases had commenced multiple actions based on the same facts and seeking substantially similar reliefs, unlike the present case. [88] I have given careful consideration to the forceful arguments advanced by the parties. In my judgment, the Plaintiff's contentions on this issue are well-founded and ought to be upheld. A close examination of the pleadings in Suit 163 and the intended derivative action shows that while both suits concern the legitimacy of the Management Fees as a S/N n88MmwzgEkiBdoJGpgrKFQ common factual substratum, they are materially different in substance, character and effect. [89] In Suit 163, the Company had sued the Plaintiff, NSSB and Dato’ Wan for alleged conspiracy to injure the Company and breach of duties as directors. The Defendant Company's pleaded case was that the defendants in that suit had by their various acts conspired to disrupt and destabilise the Company's operations. The purported increase in Management Fees paid to AMSB was pleaded as part of the special damages flowing from the alleged conspiracy. The learned Judge had dismissed the Company's claim for conspiracy in its entirety, including the general damages. The finding on the lack of causation between the alleged conspiracy and the heads of general damages claimed was not appealed. The live issue in the Company's pending appeal therefore does not concern the legitimacy of the Management Fees per se but whether the alleged conspiracy and breach of duties by the defendants had been made out. [90] In diametric contrast, the intended derivative action concerns a direct challenge by the Plaintiff on behalf of the Company against the Majority Directors and AMSB on the propriety of the Management Fees. The thrust of the Plaintiff's case is that the Majority Directors had breached their fiduciary duties to the Company by approving a colossal increase in the Management Fees from USD8,000 to USD40,000 and subsequently to USD60,000 per month S/N n88MmwzgEkiBdoJGpgrKFQ without any proper justification or supporting evidence that AMSB had provided services commensurate with the fees paid. The Plaintiff contends that in acting as such, the Majority Directors had failed to act bona fide in the best interest of the Company and had placed the interests of AMSB, their nominator, above those of the Company. It is also alleged that AMSB had been unjustly enriched by receiving Management Fees exceeding USD2 million without valid basis. [91] The disparity in the substance and character of the two actions is evident from the reliefs sought therein. In Suit 163, the Company had claimed for a declaration that the defendants had conspired to injure the Company and general damages arising therefrom, which included the increase in Management Fees paid from October 2017 to January 2019 as a result of the alleged conspiracy. In contrast, in the intended derivative action, the Plaintiff is seeking declaratory relief that the Majority Directors had acted in breach of their fiduciary duties and an order that they are jointly and severally liable to the Company to repay the substantial increase in Management Fees paid from April 2017 to date, which were allegedly unsubstantiated by any documentary proof. The Plaintiff is also seeking a permanent injunction to reduce the Management Fees to its original quantum of USD8,000 or any other sum that can be justified by evidence. S/N n88MmwzgEkiBdoJGpgrKFQ [92] Viewed in its proper perspective, it is abundantly apparent that notwithstanding the common thread of the legitimacy of the Management Fees, the substratum of Suit 163 and the intended derivative action are worlds apart. The former is premised on establishing a conspiracy to injure the Company and a breach of directors' duties arising from certain pleaded acts, of which the increase in Management Fees is but one of the alleged consequences. The latter on the other hand is a direct challenge by the Plaintiff on behalf of the Company against the Majority Directors for breaching their fiduciary duties in approving the exponential increase in Management Fees without any commercial justification. The intended derivative action also seeks to recover the unsubstantiated increase in Management Fees in its entirety from April 2017 to date as opposed to only a limited period from October 2017 to January 2019 as claimed in Suit 163. The dichotomy in the substance, character and effect of the two proceedings is therefore plain and obvious. [93] I am fortified in this conclusion by two appellate authorities that are on all fours with the present factual matrix. The first is the Court of Appeal's decision in Tai May Chean v New Way Capital Sdn Bhd & Anor and Another Appeal [supra] where it was unequivocally held that the fact that two actions arise from the same factual background does not necessarily mean that there is a multiplicity of proceedings. In deciding whether a duplicity of proceedings arises, the focus ought to be on the substance, character and effect of the actions, not the underlying facts. Where the causes of S/N n88MmwzgEkiBdoJGpgrKFQ action pleaded and reliefs sought in the two actions are distinct, there can be no multiplicity even though they may share a common narrative. The appellate court expressly cautioned against taking an inflexible approach to the doctrine of multiplicity by placing form over substance. [94] This principle was subsequently applied by the High Court in Golden Plus Holdings Berhad and Ors v China Idea Development Limited and Ors [supra] to find that there was no abuse of process where multiple actions arose from the same share allotment agreement. Despite the actions sharing the same factual foundation, there was no duplicity as the pleaded causes of action and reliefs prayed for were separate and distinct. The fact that there may be some overlap in the facts relied upon was not a sufficient basis to stay or strike out the later action on the ground of multiplicity. [95] Drawing an analogy to the present case, I find that the intended derivative action is not duplicitous of Suit 163 as they are grounded on different causes of action and seek disparate reliefs. The fact that both actions share the common narrative of the legitimacy of the Management Fees does not, without more, constitute an abuse of process. The fundamental differences in the substance and character of the two actions necessarily means that they can and ought to be allowed to proceed separately, as the findings in one will not determine the outcome of the other. The concerns of inconsistent judicial decisions and vexation S/N n88MmwzgEkiBdoJGpgrKFQ to the Company do not therefore arise on the facts of this case. [96] The upshot of the foregoing analysis is that the Majority Directors’ contention that the intended derivative action would give rise to a multiplicity of proceedings is plainly unsustainable and must be rejected. The Majority Directors’ reliance on the cases of Lai Kim Loi v Dato' Lai Fook Kim [supra] and Ho Num Chon & Anor v Tech-Lab Manufacturing Sdn Bhd [supra] is, with respect, misplaced as those cases concerned plaintiffs filing multiple actions premised on the same facts and seeking like reliefs against the same defendants. In contrast, the intended derivative action in the present case is against a different set of defendants and is premised on distinct causes of action and prayers when compared to Suit 163. There is therefore no question of any duplicity or multiplicity of proceedings. [97] On a consideration of the evidence in its totality, I find that the Majority Directors have failed to demonstrate any abuse of process or risk of multiplicity arising from the intended derivative action. The Majority Directors’ arguments on this issue are without merit and are accordingly dismissed. Causing the Company to take a position contradictory to that taken by it in Suit 163 [98] The Majority Directors submit that the Plaintiff's intended derivative action would cause the Company to adopt a S/N n88MmwzgEkiBdoJGpgrKFQ position on the legitimacy of the Management Fees that is contradictory to the stand it had taken in Suit 163. This, it is contended, would severely prejudice the Company's appeal against the dismissal of Suit 163 as it would effectively be an admission by the Company that it had previously advanced a case on the Management Fees that was palpably unsustainable. In support of this argument, the Majority Directors rely on the High Court's decision in Ng Pak Mui v Tay Mary [supra] where a similar contention was accepted in refusing leave to commence a derivative action. [99] The Plaintiff does not agree. Whilst accepting that the Company had in Suit 163 took the position that the increase in Management Fees paid to AMSB was legitimate, the Plaintiff argues that this cannot be a bar to the Company now taking a correct stand in the intended derivative action that the increase is in fact wholly unsubstantiated. The Plaintiff contends that there can only be one truth - either the increase in Management Fees is justified or it is not. The fact that the Majority Directors have till date failed to produce a single shred of evidence to support the exponential increase in Suit 163 despite repeated requests leads to the irresistible conclusion that the payments to AMSB are indefensible. In such circumstances, the question of the Company taking an inconsistent position does not arise as the stand in Suit 163 is demonstrably erroneous and ought to be abandoned. To hold otherwise would be to compel the Company to persist in prosecuting an appeal in Suit 163 that is doomed to fail, which cannot be S/N n88MmwzgEkiBdoJGpgrKFQ countenanced. It is also highlighted that in any event, the Company's claim for Management Fees as general damages in Suit 163 had already been dismissed by the High Court and does not form the subject matter of the pending appeal. [100] On a careful consideration of the evidence, I find that the Majority Directors’ argument on the Company taking a contradictory position in the intended derivative action is a mere red herring that is both factually and legally unsustainable. [101] Firstly, it is evident from the chronology of events that the Plaintiff had given the Majority Directors every opportunity to vindicate the substantial increase in Management Fees paid to AMSB before commencing the present action. The Plaintiff had, over a span of 6 years from 2017 to 2023, issued no less than 27 separate requests to the Majority Directors to furnish supporting documents to justify the increase from USD8,000 to USD40,000 and subsequently to USD60,000 per month. These requests, the full particulars of which are set out in paragraph 78 of the Plaintiff's Reply Submissions, were met with deafening silence. Despite promising to provide evidence that the increase in Management Fees was commensurate with the services rendered by AMSB, the Majority Directors failed to produce any credible or tangible proof. All that was proffered were bare assertions unaccompanied by any documentary evidence. S/N n88MmwzgEkiBdoJGpgrKFQ [102] In the face of this persistent failure to substantiate the substantial increase in Management Fees, the inference is irresistible that the payments to AMSB are wholly unjustified. Elementary logic dictates that if the Majority Directors had in their possession documents to show that the increase in Management Fees was above board, they would have disclosed the same to put an end to the Plaintiff's complaints. Their failure to provide the requested evidence despite being given ample time and opportunity strongly suggests that such evidence may not exist. I therefore find that the Plaintiff has made out a strong prima facie case that the Management Fees paid to AMSB, over and above the original sum of USD8,000 per month, are indefensible. [103] Given these circumstances, it would not be appropriate to uphold the Company's earlier stance in Suit 163 that the increase in Management Fees paid to AMSB was justified. It is trite that there can only be one truth. If the increase is shown to be unsustainable, as the evidence presently demonstrates, the Company cannot be precluded from abandoning its earlier erroneous stance and taking the correct position in the intended derivative action that the Management Fees paid are ultra vires. To hold otherwise would be to compel the Company to continue defending a baseless claim in the appeal in Suit 163, which would be inimical to its interest and an abuse of process. S/N n88MmwzgEkiBdoJGpgrKFQ [104] Secondly, it must be noted that in any event, the Company's claim for the additional Management Fees paid to AMSB as part of the general damages in Suit 163 had already been expressly disallowed by the learned High Court Judge. The general damages claim was dismissed on the basis that the Company had failed to prove that the alleged losses were caused by the conspiracy and breaches of duty complained of. This finding was not appealed against by the Company. The issue of the legitimacy of the Management Fees therefore no longer arises for consideration in the Company's appeal in Suit 163. It is questionable whether the intended derivative action would actually undermine the Company's position in the pending appeal. [105] Thirdly, I find that the Majority Directors’ reliance on Ng Pak Mui v Tay Mary is misplaced as that case is clearly distinguishable. In Ng Pak Mui, the plaintiff sought to assert in the intended derivative action that the company was insolvent when dividends were declared, which was a complete volte-face from the company's stand in other suits that it was solvent. It was in those circumstances that Ong Chee Kwan JC (as he then was) found that allowing the intended derivative action to proceed would result in the company taking a wholly inconsistent position. Crucially, there was no evidence in Ng Pak Mui that the company's original stance in the other suits was erroneous. That is in stark contrast to the present case where there is overwhelming evidence that the Company's position in Suit 163 that the increase in Management Fees was justified is S/N n88MmwzgEkiBdoJGpgrKFQ palpably incorrect and ought to be abandoned. The other material difference is that in Ng Pak Mui, the issue of the company's solvency was a live issue in the other pending actions, whereas in the instant case the claim for additional Management Fees in Suit 163 has been dismissed by the High Court and is not the subject of the pending appeal. [106] Fourthly, it bears reiterating that the Majority Directors who are responsible for committing the Company to the unsustainable position on the Management Fees in Suit 163 should not be allowed to now assert prejudice to the Company as a means to stultify the intended derivative action. It is unconscionable for the wrongdoers to rely on their own improper conduct to effectively deprive the Company of the opportunity to recover monies that have been wrongfully paid out by taking a correct position in the intended derivative action. This would be tantamount to allowing the Majority Directors to profit from their own wrong and would bring the administration of justice into disrepute. [107] Viewed in totality, I find that there is no reasonable basis for concluding that the Company would be prejudiced in defending the appeal in Suit 163 by taking the correct position in the intended derivative action that the increase in Management Fees paid to AMSB is indefensible. The claim for additional Management Fees has already been dismissed by the High Court in Suit 163 and does not arise in the pending appeal. In any event, there is clear evidence that the payments are wholly unjustified and the Company S/N n88MmwzgEkiBdoJGpgrKFQ cannot be prevented from abandoning its previous erroneous stance and adopting the right position. The Majority Directors who are responsible for committing the Company to an untenable position in Suit 163 cannot be heard to complain of prejudice. [108] In the final analysis, taking a holistic view of the facts, I find that the Majority Directors have failed to demonstrate any prejudice to the Company in the appeal in Suit 163 arising from the intended derivative action. The argument that leave should be refused because the Company would be compelled to take an inconsistent position is factually and legally unsustainable and must be rejected. Prayer 2(c) of Enclosure 1 [109] The court finds that prayer 2(c) of Enclosure 1 ought to be allowed pursuant to the wide powers conferred by Section 350 of the Companies Act 2016. [110] Section 350 provides that in granting leave to commence a derivative action under Sections 347 and 348 of the Companies Act 2016, the court may make such orders as it thinks appropriate, including giving directions for the conduct of the proceedings and any order as to costs. The language used in the provision is couched in the broadest possible terms and makes it abundantly clear that the court is empowered to grant all necessary ancillary relief to S/N n88MmwzgEkiBdoJGpgrKFQ ensure that the interests of the company are protected in a derivative action. [111] Prayer 2(c) seeks an order that the Management Fees payable by the Company to AMSB be reduced to USD8,000 per month pending the final resolution of the derivative action to be initiated against the Majority Directors and AMSB. Such an order falls squarely within the purview of Section 350(b) as an interim direction for the conduct of the proceedings. It is necessary to preserve the status quo and prevent the Company from suffering further losses by continuing to pay exorbitant and unsubstantiated Management Fees to AMSB until the derivative action is disposed of. [112] The evidence adduced by the Plaintiff shows that despite repeated requests, the Majority Directors have persistently failed to produce any credible documentary proof that the drastic increase in Management Fees from USD8,000 to USD40,000 and later to USD60,000 per month is commensurate with the services rendered by AMSB. On the contrary, the contemporaneous records demonstrate that the Plaintiff had on 27 separate occasions over a span of 6 years sought a breakdown of the work done by AMSB to justify the astronomical increase in fees. These requests for information, which include a demand for AMSB's employee details, their employment contracts and scope of work as well as timesheets, were met with deafening silence or unilluminating responses bereft of documentary evidence. S/N n88MmwzgEkiBdoJGpgrKFQ [113] In the face of this obdurate refusal to substantiate the substantial increase in Management Fees, the irresistible inference is that the payments to AMSB are wholly unjustified and amount to a wrongful dissipation of the Company's assets. The Plaintiff has established a strong prima facie case that the Majority Directors had breached their fiduciary duties to the Company by causing these payments to be made without any commercial justification. In such circumstances, it would be wholly inequitable to allow the Company to continue paying the impugned Management Fees to AMSB until the derivative action is finally determined. To do so would be to put the Plaintiff on an uneven keel and render nugatory any judgment that may eventually be entered in the Company's favour. [114] I am fortified in this conclusion by case law which makes it clear that the court has wide discretionary powers under Section 350 to grant any appropriate ancillary relief in an application for leave to commence derivative proceedings. In Por Lin Chiang v Tanjung Aircond Engineering Sdn Bhd & Another [2019] 1 LNS 700, the High Court held that upon granting leave under Section 348, it was empowered by Section 350 to grant such ancillary reliefs as prayed for by the plaintiff as it was fair, expeditious and appropriate. [115] Applying the principles to the present case, I find that a direction for the Management Fees payable to AMSB to be reduced to USD8,000 per month pending the disposal of the derivative action is an appropriate interim measure that S/N n88MmwzgEkiBdoJGpgrKFQ is necessary to safeguard the Company's financial interests. Given the Plaintiff's unrelenting but futile efforts to procure documentary proof that the quantum of fees paid is justified, there is a real risk of the Company's assets being improperly depleted in the event the derivative action succeeds. An order in terms of prayer 2(c) would prevent this risk from materialising and ensure that the Company is protected from further loss until the dispute is finally adjudicated upon. It would also ensure that the directors do not benefit from their own breaches pending a resolution of the matter. [116] The Majority Directors’ argument that the Plaintiff is estopped from seeking such an order as he had previously agreed to the increase in Management Fees ignores the vital qualification that the Plaintiff's consent was expressly subject to the condition that the increase would be reviewed annually to determine if it was justified. The Board resolution increasing the fees also stipulated that the budget for the fees in the subsequent financial years would be reviewed afresh. In the circumstances, the Plaintiff is clearly entitled to demand that the Majority Directors prove that the fees paid in the years after 2017 were warranted by the services provided. The failure to adduce any such proof means that the Company should not be required to continue paying the inflated fees in the interim. S/N n88MmwzgEkiBdoJGpgrKFQ [117] For the foregoing reasons, I am satisfied that it is fair, appropriate and in the best interest of the Company to allow prayer 2(c) of Enclosure 1. Such an order falls within the wide powers conferred on the court by Section 350 and is consonant with the objectives of the statutory derivative action. Accordingly, an order is granted that pending the final disposal of the intended derivative proceedings, the Management Fees payable by the Company to AMSB shall be reduced to USD8,000 per month. Conclusion [118] In the premise, having carefully considered the evidence and submissions of both parties, I am satisfied that the Plaintiff has met the threshold requirements under Section 348(4) of the Companies Act 2016 for leave to commence a derivative action. The Plaintiff has demonstrated that he is acting in good faith and that it appears prima facie to be in the best interest of the Company for the intended derivative proceedings to be pursued. The Majority Directors' objections on the grounds of estoppel, delay, abuse of process, multiplicity of proceedings, and contradictory positions have been found to be without merit. The Plaintiff has established a strong prima facie case of breaches of directors' duties and unjust enrichment that warrants further investigation through a full trial. Accordingly, I allow Enclosure 1 and make the following orders: S/N n88MmwzgEkiBdoJGpgrKFQ a) The Plaintiff is given leave to commence derivative proceedings in the name of the Defendant against Dato' Sri Suresh Emmanuel Abishegam, Dato' Ahmad Johari Bin Abdul Razak, Ajaib Hari Dass, Dato' Abd Latiff Bin Ahmad, Jaya Sudhir A/L Jayaram, Mak Lin Kum, Ahmad Lutfi Bin Abd Latiff, Dato' Sri Abd Rahim Bin Jaafar and Azimuth Marine Sdn. Bhd.; b) The Plaintiff is authorised to control the conduct of the derivative proceedings; c) The management fee payable by the Defendant to Azimuth Marine Sdn. Bhd. is reduced to USD8,000 per month pending final resolution of the derivative proceedings; d) The Defendant shall pay all reasonable legal fees and disbursements incurred by the Plaintiff in connection with this application or pending the grant of leave or any other interim relief on a full indemnity basis; e) The Defendant shall pay the costs incurred by the Plaintiff for the derivative proceedings to be initiated on behalf of the Defendant against the named parties on a full indemnity basis; S/N n88MmwzgEkiBdoJGpgrKFQ f) Costs of and incidental to this application shall be borne by the Defendant; and g) Costs of RM 30,000.00 shall be paid by the Defendant to the Plaintiff subject to allocator fee. 4 October 2024 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Dato’ Lim Chee Wee with Jasper Tan, Wee Hee, Emily Ho and Kuljeet Kau (Messrs Jasper Hee Partnership) For the Defendant: Daniel Albert with Ashok K Raman, Shermaljit Singh and Natalie Lim (Messrs A K Raman Nair) S/N n88MmwzgEkiBdoJGpgrKFQ