Dato' Syed Hamzah Bin Syed Abu Bakar v Pendaftar Suruhanjaya Syarikat Malaysia (WA-24NCC-131-03/2019)

The Plaintiff had appealed against the decision of the Defendant, Pendaftar Suruhanjaya Syarikat Malaysia (“SSM”) pursuant to section 602(4) of the Companies Act 2016 in dismissing his application under section 602(1) of the Companies Act 2016.

The Plaintiff made an application to the Defendant to rectify the Register of Members for Sitrac Corporation Sdn Bhd (“Sitrac”) which was maintained by SSM (“the Application”). The said application concerned the transfer of 75,000 shares in Sitrac from the Proposed Intervener Puncak Nenangan (M) Sdn Bhd to Kelana Jati Sdn Bhd (“Kelana Jati”) by way of a Form 32A dated 30.4.1992. It is the Plaintiff’s position that the said form contains matters contrary to law and/or matters that are false or misleading. More particularly, the Plaintiff has contended that no consideration was made to the Proposed Intervener in respect of the transfer.

The Defendant dismissed the said application on 20.9.2018. The Defendant dismissed the application on the basis that it did not have the power to deal with the same as it does not concern an “error, mistake or 3 omission” which arises “in the ordinary course of the discharge of the duties of the Defendant” within the meaning of Section 602(3), CA.

In the course of submissions before this Honourable Court, the Defendant maintained its position that it did not have the power to deal with the Application. a) The Defendant also took the position that the subject matter of the Application had been made the subject of an earlier complaint by the Plaintiff to the SSM on 17.8.20016 (the “2006 Complaint”). b) The Deputy Public Prosecutor had decided that “No Further Action” was to be taken as there was insufficient evidence to show that any offence had been committed under the CA

c) The Court then directed that parties put the 2006 Complaint before the court by way of a supplementary affidavit. The Plaintiff did so and explained the following matters. i) The 2006 Complaint did not concern the subject matter of the Application. It concerned the impropriety of the 4 audited accounts of Sitrac for the year 1992 and the Proposed Intervener for the year 1993. ii) In any event, the SSM itself had agreed on 21.9.2018 that it would re-open the investigations in light of further evidence that was submitted to the SSM. d) Counsel for the Plaintiff made extensive submissions on the wide powers of the SSM to investigate the complaint raised in the Application. i) Counsel for the Plaintiff referred to various positions in the Companies Commission of Malaysia Act 2001 (“CCMA”) which provides the Defendant wide ranging investigative and enforcement powers. ii) Reference was also made to, amongst others, the decision of the Court in Aw Eng Sun v Lau Kooi Cheun [2013] 1 LNS 152, where Prasad Sandosham Abraham J (as he then was) said: 5 “I would go further to say the Registrar when exercising his powers under Section 11(8) & (9), of the Said Act, acts in a quasi judicial capacity and has a bearing on the rights of parties in the said company for information in the register of the said Company is notice to the public at large and is prima facie the position of the said company. So resort must be had to these provisions first and if the Registrar refuse and or declines to act then Section 11(10) of the said Act could be resorted to. Save for Section 162 and Section 181 of the Said Act, the Court has no power to order the amendment of records in the CCM. ... The Registrar, pursuant to Section 11(8) and (9) of the said Act, is empowered with the task of investigating, and is also empowered to take remedial action as provided for under these sections. CCM cannot in my view take the position that the CCM is purely a depository and affirmative action must be taken by way of obtaining a Court order for instance. The scheme of the said Act under these sections provide for the Registrar to act so as to ensure the records maintained at the Registry of CCM are genuine, accurate and do not infringe the law. As documents of this nature attract public notice of its contents, the Registrar on his own must act under the said sections to rectify or remedy the situation to ensure the authenticity and accuracy of documents filed in the CCM. The Nation's Commercial activities demands 6 searches at the Registry of CCM being accurate and if they are not, the Registrar must act expeditiously to correct the same as the fate of so many commercial transactions depends on the particulars of these searches and the information maintained therein which are deemed public documents. Bearing in mind it is a public documents the Registrar must ensure that these documents are accurate and must speedily dispose of complaints under Section 11(8) and (9), otherwise the public would be misled and irreparable damage may be caused.”

Upon being appraised of the material above, I made the following order on 21.5.2019: “The Defendant shall reconsider the Plaintiff’s application dated 26.4.2018 under section 602(1), Companies Act 2016, and for that purpose, the Plaintiff is to give notice to Sitrac Corporation Sdn Bhd, Puncak Kenangan Sdn Bhd and Kelana Jati Sdn Bhd of his application and serve his application on the said three companies pursuant to section 602(2)(b), Companies Act 2016”.

The Proposed Intervener is the transferor of the 75,000 Sitrac shares. It has applied to intervene in the proceedings and to set aside the order of Court made on 21.5.2019. 7

The Plaintiff raised the preliminary objection that the application to intervene is defective. It is submitted by counsel for the Plaintiff that the court cannot entertain an application to intervene under Order 15 Rule 6(2)(b) of the Rules of Court 2012 once a final judgment is rendered. If a non-party intends to set aside a final order, he must do so in a fresh action under limited circumstances. The words “at any stage of the proceedings” in Order 15 Rule 6(2)(b) refers to a stage before the final order is perfected. In Hong Leong Bank Bhd (formerly known as Hong Leong Finance Bhd) v Staghorn Sdn Bhd and other appeals [2008] 2 MLJ 622, Abdul Hamid Mohamad CJ said this: “[55] Secondly, an application for leave to intervene in order to set aside an order for sale by a party not already a party to the proceedings must be made under O 15 r 6 of the RHC. The application may be made 'at any stage of the proceedings' meaning before judgment, otherwise the proceedings have concluded and there is no longer a proceeding in existence for the party to intervene in. The judge has also become functus officio. Even then, the application must be made promptly. Order 15 r 6 of the RHC applies to all civil proceedings whether commenced by a writ, motion or summons etc. [56] Thirdly, an application for leave to intervene is supported by an affidavit. In other words, in such an application, the judge merely decides on affidavit 8 evidence, whether or not leave should be granted. At that stage, the judge should not make a definite finding of facts which, as envisaged by O15 r 6 of the RHC, will and can only be made after all evidence has been adduced in the trial which will follow subsequently. [57] Fourthly, any party, whether a party in the original proceeding or not, who wants to challenge the order for sale, or for that matter, any judgment, other than a default judgment or where it is specifically provided for in the rules, may only do so by filing a fresh action. [58] Fifthly, while the principles laid down in Pegang Mining as to exercise of discretion are applicable, all the requirements of O 15 r 6(2) must be satisfied. [59] What happened in the instant case? The application to intervene was made about one year and 10 months after the date of the issuance of the certificate of sale, about two years after the successful auction and about two years and three months after the order for sale was made. [60] What did the learned High Court judge decide? On 30 January 1995, ie three years and five months after the order for sale was made, he allowed Staghorn to intervene. The judgment runs into 55 pages, just on the application for leave to intervene. [61] From the judgment, it can be seen that, while the learned judge did refer to O 15 r 6 of the RHC, he failed to consider the opening words 'At any stage 9 of the proceedings'. He straight away relied on Pegang Mining and Arab Malaysianfor the principles applicable. As I have said, while the principle laid down in Pegang Mining as to exercise of discretion are applicable, the learned judge should have addressed the first point first ie whether there was a proceeding in existence for Staghorn to intervene in. Only if there was a proceeding still pending, would the principles in Pegang Miningbecome applicable. Had the learned judge referred to the judgments that I have mentioned earlier, he would have seen straight away that it was too late for Staghorn to apply to intervene. That would have put an end to the matter. [62] Of course, the learned judge did discuss the issue of functus officio. However, he held that the issue of functus officio 'which was correctly applied in Mui Bank' (to translate his words) was not applicable in this case. He said that in Mui Bank, the order for sale could not be challenged because it was made in compliance with all statutory provisions. On the other hand, in the instant case, the order for sale was not obtained in strict compliance with the statutory provisions, inter alia, s 281(2) and (3) of the NLC. The learned judge then devoted more than thirty pages of his judgment to this and came to the following conclusions:

(1)Hong Leong's lien holder's caveat was not valid;

(2)third party charge by Teck Lay Realty was not valid and wrong in law;

(3)the memorandum of transfer of Teck Lay Realty was not valid and wrong in law. 10 [63] The learned judge in para 32 of his judgment then said this: In this case the court is not functus officio and as such the court is competent to set aside the orders that were invalidly obtained; consequently all the orders and even the sale conducted thereunder must be set aside. [64] The following points should be made. First, the learned judge did not consider at all the opening words of O 15 r 6(2) ('At any stage of the proceedings …'). He did consider the issue of functus officio. However, in considering whether the court was functus officio, he did not ask himself the question whether the final order had been made and perfected. Instead, he went at great length to consider whether the order for sale was validly made as if he was sitting in this court or the Court of Appeal hearing an appeal on merit against the order for sale. Having held that the order for sale was wrong in law and should be set aside, he held that the judge that made the order for sale was not functus officio and allowed Staghorn to intervene. [65] With respect, the approach is clearly wrong. In an application to intervene by a non-party in a proceeding all that a judge has to do is, first, to determine whether there is a proceeding still pending. Where a final order, in this case the order for sale, has been made and perfected clearly the proceeding has concluded. It is then too late to intervene under O 15 r 6(2)(b)(ii) of the RHC”. 11

Counsel for the Proposed Intervener submitted that the Court is not functus officio. He submitted that the proper test as to whether an order is a final order or an interlocutory order is Lord Alverstsone’s test in the Court of Appeal case of Bozson v Altrincham UDC [1903] 1 KB 547 which test is adopted by the Privy Council in the case of Haron bin Mohd Zaid v Central Securities (Holdings) Berhad [1982] 2 MLJ 94 and the test is this: “Does the judgment or order, as made, finally dispose of the rights of the parties? If it does,then I think it ought to be treated as a final order; but if it does not, it is then, in my opinion, an interlocutory order.”

Applying that test, counsel for the Proposed Intervener submitted that the Court’s order dated 21.5.2019 was not a final order as it did not deal with the merits of the Plaintiff’s appeal.

However, I do not agree. I am of the view that the Order in question is a final order as it finally dealt with the rights of the parties in respect of the appeal before the Court. It was made on the hearing of the appeal and no further order is contemplated. It cannot by any stretch of the imagination be called an interlocutory order as that contemplates further proceedings on the matter. 12

In Tuan Mat bin Tuan Ismail v Tan Ah Hin & Ors [2019] 3 MLJ 337, Abdul Rahman Sebli JCA (now FCJ) said : “[35] In Halsbury’s Laws of England (4th Ed) the learned authors at para 506 defined the word to mean: An order which does not deal with the final rights of the parties but either (1) is made before judgment, and gives no final decision on the matters in dispute, but is merely on a matter of procedure, or (2) is made after judgment, and merely directs how the declaration of rights already given in the final judgment are to be worked out, is termed ‘interlocutory’.”

The Order dated 21.5.2019 was not made before or after judgment. It is a judgment disposing of the rights of the parties in so far as the statutory appeal was concerned.

However, that does not dispose of the issue. Whist Staghorn stands for the proposition that once the order is made and perfected, then the Court is functus officio and intervention is not possible, in Lee Chai Seng v Magnum Corporation Consortium Sdn Bhd [2015] MLJU 1871; [2015] 1 LNS 243, Aziah Ali JCA (as she then was) speaking for the Court of Appeal, overruled the Staghorn objection in 13 circumstances where the proposed intervener’s (respondent’s) complaint was that: “[17] …For the respondent, learned counsel Dato’ Cyrus Das, submitted that the principle of functus officio does not apply where the applicant has no knowledge of the proceedings and of the order of court that was obtained. It is submitted that the Consent Order is null and void as it was obtained in breach of the respondent’s right to be heard and the Consent Order has caused injustice to the respondent. In the circumstances, it is submitted that the respondent has a right to apply to intervene and to set aside the Consent

The Court of Appeal in that case took the view that notwithstanding the Staghorn principle, intervention may be allowed where an order is a nullity in the sense that it is an order made in breach of the rules of natural justice. This is what the Court of Appeal said: “[21] In his judgment Abdul Hamid Mohamad CJ, referred to the case of Mui Bank Bhd v Cheam Kim Yu (Beh Sai Ming, Intervener) [1992] 4 CLJ 2229; [1992] 1 CLJ (Rep) 222. In that case, an order for sale was obtained. After several unsuccessful attempts to auction the land, the land was eventually sold to one Ng Choon Meng. The full purchase price was paid and the certificate of sale was issued. In the meantime, the respondent (the debtor) had approached a buyer (the intervener) 14 for the land and offered to sell the land to him. The offer was accepted by the buyer/intervener. MUI Bank consented to the sale on terms. Subsequently, the intervener applied to court to intervene in the proceedings and the High Court allowed the application. The Supreme Court, in reversing the judgment of the High Court, held inter alia that, the learned judge is functus officio after he had made the order for sale, which is a final order unless appealed against. Once the order for sale is made, drawn up and perfected the learned judge has no power to set aside the order for sale. [22] Reverting to Staghorn's case, the Federal Court found that Staghorn had divested its rights and interest and had no beneficial interest in the subject land. The Federal Court held, inter alia, that a would-be intervener who has no proprietary rights in the land is not qualified to intervene. Hence, Staghorn could not be said to have satisfied the test under O. 15 r. 6 of the RHC of having an interest to intervene. The Federal Court affirmed the judgment in Mui Bank Bhd v. Cheam Kim Yu (supra) that where an order for sale has been made and perfected, the proceeding has concluded and it is too late to intervene under the said provision. In foreclosure proceedings, a judge is functus officio after he had made the order for sale and when the order had been drawn up and perfected. [23] In the present appeal, it is an undisputed fact that the Consent Order which the respondent had sought to set aside is an order made 15 without notice to the respondent. Learned counsel for the respondent submits that this is a breach of the respondent's right to be heard which renders the Consent Order null and void. We agree with the learned counsel. [24] In the case of Badiaddin Mohd Mahidin & Anor v. Arab Malaysian Finance Bhd [1998] 2 CLJ 75, the Federal Court referred to the Privy Council case of Isaacs v Robertson [1985] AC 97. In that case, Lord Diplock upheld the existence of a category of orders of the court "... which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court, without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity, and give to the judge a discretion as to the order he will make.. According to Lord Diplock, the type of defects in the final judgment of the court that can be brought into the category that attracts ex debito justitiae the right to have it set aside without going into the appeal procedure "specifically includes orders that have been obtained in breach of rules of natural justice.". [25] In Pemunya Kapal Dan Orang-Orang Lain Yang Mempunyai Kepentingan Dalam Kapal M.V. "Brihope" v. Emanuele Okwuosa & Ors. (No. 2) [1996] 4 CLJ 476, Mahadev Shankar JCA (as he then was) said, inter alia, as follows: 16 The general rule of law is that no person is to be adversely affected by a judgment in an action to which he was not a party. But this general rule admits of two exceptions. One is that a person who is in privity with parties is bound equally with the parties, in which case he is estopped by res judicata. The other is that a person may have so acted as to preclude himself from challenging the judgment, in which case he is estopped by his conduct. [26] Gopal Sri Ram, JCA (as he then was) said in the case of Annie Quah Lay Nah v. Syed Jafer Properties Sdn Bhd & Ors [2007] 1 CLJ 1; [2007] 1 MLJ 225, as follows: There must be a breach of the rules of natural justice or a contravention of a statute which is a sine qua non to invoke the very limited jurisdiction of a court to have its orders declared as void. [27] It is thus settled that, on the authorities of Annie Quah Lay Nah v. Syed Jafer Properties Sdn Bhd & Ors and on Badiaddin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd (supra), wherein the Federal Court affirmed the rule laid down in the judgment of Lord Diplock in Isaacs v. Robertson, one exception where a final judgment of the High Court may be set aside ex debito justitiae is where the final 17 judgment can be proved to be null and void because it has been obtained in breach of the rules of natural justice. In such circumstances the person affected by such judgment is entitled ex debito justitiae to have it set aside and the court may exercise its inherent power to strike out the order without the need to file an appeal or a fresh suit.”

It is submitted by counsel for the Proposed Intervener that the Proposed Intervener clearly had an interest to be heard in the Plaintiff’s appeal as the Plaintiff’s section 602 application concerned the transfer of 75,000 Sitrac shares by the Proposed Intervener to Kelana Jati. Accordingly, the Proposed Intervener should have been made a party to the appeal and the failure of the Plaintiff to make the Proposed Intervener amounted to a breach of natural justice which in turn would render the Order made by the Court a nullity.

In the case of Selvam Holdings (M) Sdn Bhd v Grant Kenyon & Eckhardt Sdn Bhd; ( BSN Commercial Bank (M) Bhd & Ors, interveners) [2000] 3 MLJ 201, the facts are as follows: “On 19.11.1979, a winding up order was issued whereby Selvam Holdings (M) Sdn Bhd was ordered to be wound up. At that point in time the only entity 18 registered with the Registrar of Companies was the appellant, Selvam Holdings (Malaysia) Sdn Bhd. The appellant filed an originating motion seeking an order that the winding up order was not binding on them. On 24.10.1994, the High Court judge held that both companies were one and the same company and that the winding up order was properly made. There was no appeal against this order. Whilst the originating motion was part heard and pending decision, the appellant filed the originating summons seeking for an answer whether the winding up order was a nullity. On 15.4.1993, another High Court judge allowed the appellant’s application by declaring that the winding up order was a nullity, it did not affect the appellant and the appellant had not been wound up (‘the 1993 order’). The 1993 order was drawn up and perfected in late April 1993. Subsequently, three interveners applied separately for leave to intervene in the originating summons, be added as defendant to the action and that the 1993 order been set aside. On 7.11.1997, the High Court allowed the interveners’ applications, gave them leave to intervene and set aside the 1993. The appellant appealed. The issue was whether the High Court was functus officio when it granted the interveners’ applications. The interveners were creditors of the appellant or parties in litigation with the appellant. It was held that: “1)The interveners had established their interests in the outcome of the originating summons and such interests had not been disputed.The fact that they had not been cited as parties in the proceedings and that the 1993 order 19 was obtained without their knowledge had deprived them of their right to be heard on their interests. This was a breach of the rules of natural justice and the 1993 order was a nullity and could be successfully attacked in collateral proceedings ex debito justitiae (see p 209D–E); Eu Finance Bhd v Lim Yoke Foo [1982] 2 MLJ 37 (folld) followed.

The Court of Appeal dismissed the appeal and held that the interveners had established their interests in the outcome of the originating summons and such interests had not been disputed. The fact that they had not been cited as parties in the proceedings and that the 1993 order was obtained without their knowledge had deprived them of their right to be heard on their interests. This was a breach of the rules of natural justice and the 1993 order was a nullity and could be successfully attacked in collateral proceedings ex debito justitiae.

In the case of Lee Gee Pheng v RHB Bank Bhd [2004] 1 MLJ 618, breach of the principle of natural justice was one of the exceptions which would allow the Court to set aside its own order. This is what the Court said: “(14) It is worthy of note that once an order of court has been drawn up and perfected, as in this case, it cannot be altered, varied or set aside as the court is functus office. The propose recourse for a party dissatisfied with the order 20 is to appeal against it. However, this general principle is subject to certain established exceptions which allow the court to set aside or amend a final order. A final order may be set aside or amended without the need to appeal in the following cases: To correct errors in expressions of the intention of the court (the slip rule)

I am of the view that the Proposed Intervener in this case has established that it has an interest in the outcome of the Plaintiff’s appeal 21 and a right to be heard in the appeal. The denial of the Proposed Intervener’s right of hearing amounted to a breach of the rules of natural justice which would render the Order made on 21.5.2019 a nullity. As such, the Staghorn objection should not preclude the Proposed Intervener from applying to intervene and to set aside the Order of Court dated 21.5.2019.

The Proposed Intervener also contended that the Plaintiff has been guilty of misleading the Court. In his submission before the Court, the Plaintiff has submitted that, as far as he was concerned, no resolutions were passed by the Proposed Intervener’s board or directors or its members to authorise the transfer. However, in other legal proceedings, the Plaintiff, under cross examination by the defendant’s counsel admitted that he had signed and approved the Circular Resolutions in respect of the transfer of the shares. The Proposed Intervener contends that the action of the Plaintiff was tantamount to fraud on the court, although the Proposed Intervener is not really relying on fraud as a ground to set aside the Order. The Proposed Intervener contends that there has been abuse of the process of the Court. I agree with the Proposed Intervener that the Plaintiff has misrepresented material facts to the Court and was guilty of abuse of court process. In the case of Lua & Mansor v Tan Ah Kim [2017] 2 CLJ 175, the Court of 22 Appeal said that “ Any order by the court that is made ultra vires or beyond the permitted limit under the statutes, obtained by fraud or abuse of court process, is a nullity ab initio.”

On this basis also, the Order dated 21.5.2019 should be set aside.

The Proposed Intervener has raised various other grounds as to why the Order of Court should be set aside. However, as I have decided that the Order was obtained in breach of the rules of natural justice and was an abuse of the process of the Court and is for that reason a nullity which can and should be set aside, it is not necessary for me to decide on those grounds. In the premises, I allow the application of the Proposed Intervener to intervene and to set aside the Order dated 21.5.2019. The Plaintiff’s appeal will be fixed for re-hearing. Wong Chee Lin Judge Kuala Lumpur High Court Dated: 18th December 2019 23 Solicitors for the Plaintiff Surendra Ananth Messrs Thomas Philip Advocates & Solicitors 5-1, Wisma CKL, Jalan 22A/70A Desa Sri Hartamas 50480 Kuala Lumpur Tel : 03-6201 5678 Fax: 03-6203 5678 Solicitors for the Defendant Nor Syairah Sulaiman Bahagian Pendakwaan & Litigasi, Seksyen Litigasi Suruhanjaya Syarikat Malaysia, Tingkat 28 Menara SSM @ Sentral, No. 7 Jalan Stesen Sentral 5, Kuala Lumpur Sentral 50623 Kuala Lumpur Tel : 03-2299 5437 Fax: 03-2299 5461 24 Solicitors for the Proposed Intervener P Jeyakumar & Normadiah Binti Mohammad Messrs Zahir Jeya & Zainal Advocates & Solicitors L26-3A, PJX HM-Shah Tower 16A, Persiaran Barat 46050 Petaling Jaya