Daud Bin Arshad dan 3 Lagi v Felcra Berhad (J-02(NCVC)(W)-1304-07/2016)

DAUD BIN ARSHAD

MOHD YUSOF BIN MOHD NOOR

SAFIAI BIN MOHAMAD

AKASAH BIN MOHAMAD (NRIC NO: 550109-01-6097) (mewakili 61 peneroka-peneroka/ peserta-peserta Felcra Gugusan Sungai Ara, Mukim Ulu Sungai Sedeli, Daerah Kota Tinggi, Johor) … APPELLANTS AND FELCRA BERHAD (COMPANY NO: 432483-U) … RESPONDENT [In the matter of the High Court of Malaya at Johor Bahru Sivil Suit No: NCVC 23-90 / 2011 Between

Daud Bin Arshad (Nric No: 550104-01-5677)

Mohd Yusof Bin Mohd Noor (Nric No: 540810-01-5907)

Safiai Bin Mohamad (Nric No: 550109-01-6097)

Akasah Bin Mohamad (Nric No: 550109-01-6097) Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 2 (mewakili 61 peneroka-peneroka/ peserta-peserta Felcra Gugusan Sungai Ara, Mukim Ulu Sungai Sedeli, Daerah Kota Tinggi, Johor) … Plaintiffs And Felcra Berhad (Company No: 432483-U) … Defendant] CORAM TENGKU MAIMUN TUAN MAT, JCA NALLINI PATHMANATHAN, JCA SURAYA OTHMAN, JCA JUDGMENT OF THE COURT The Facts [1] The appellants (“the plaintiffs”) are former participants/settlers of a scheme known as Rancangan Felcra Sg. Ara, Johor Darul Takzim. They commenced a suit against Felcra Berhad (“the defendant”) on 24.5.2011, challenging in essence, the profit and loss accounts of the defendant and the distribution of dividends to the plaintiffs. The plaintiffs sought inter alia for the following reliefs:

(i) Accounts and inquiries;

(i) whether the plaintiffs’ claim was time barred; and

(a) 10 saksi Plaintif telah memberikan keterangan di dalam perbicaraan penuh dari 18.7.2012 sehingga 18.10.2013;

(b) 1 saksi Defendan telah memberikan keterangan di dalam perbicaraan penuh dari 16.1.2014 sehingga 19.5.2016;

(c) Plaintif-Plaintif telah mengesahkan wujudnya perkara-perkara berikut:

(i) Mesyuarat Agong Felcra Sg. Ara Kali ke-17 diadakan pada 6.5.2004;

(d) saksi Defendan yang pertama iaitu Encik Khalid Md. Lip yang juga merupakan Ketua Peserta Felcra Sg. Ara juga telah mengesahkan wujudnya perkara-perkara berikut:

(i) Mesyuarat Agong Felcra Sg. Ara Kali Ke-17 diadakan pada 6.5.2004;

(e) setelah pengesahan di atas dibuat oleh Plaintif dan Defendan, maka sewajarnya tindakan ini ditolak bagi mengelakkan penyalahgunaan proses Mahkamah secara berterusan oleh Plaintif-Plaintif; dan

(f) penolakan tindakan ini juga akan dapat menjimatkan kos pihak-pihak dan masa semua pihak terutamanya Mahkamah Yang Mulia ini memandangkan tindakan ini sudah berusia 6 tahun semenjak ia difailkan pada 24.5.2011. Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 5

Saya menyatakan bahawa faktor-faktor di atas menjusitifikasikan Permohonan Defendan ini.”. Findings of the High Court [4] The learned judge allowed the defendant’s application and in so deciding, his Lordship relied on Dayapi Holdings Sdn Bhd & Anor v Arab Malaysian Finance Berhad & Anor [2008] 3 MLRH 328. The learned judge had also referred to the Malaysian Civil Procedure 2015 Vol. 1 which states the following on the application of O. 33 r 2 and r 5: “Advanced stage of trial proceedings: When the proceeding has reached such an advanced stage of the proceeding or had practically reached the trial stage, the appropriate course to adopt, should any party be of view that the cause could be disposed of without the need of a normal trial, is not to invoke Order 14A, but to invoke Order 33 r 2, r 3(2) and r 5 (see Dayapi Holdings Sdn Bhd & Anor v Arab-Malaysian Finance Bhd & Anor [2009] 1 AMR 336; [2009] 7 MLJ 627 at 642). In Karen Isabel Wilfred v Dhyana Shila Vasanthan [2014] AMEJ 0185; [2014] 4 CLJ 737, the court held that the issue of delay is not a crucial matter to consider in an application under Order 33 r 2 as the provision allows the court to consider the question or issue to be tried before, at or after trial of the cause of matter. The court further held that the pertinent and crucial factor to consider is whether the trial of the preliminary issue will result in a substantial saving of time and expenditure.”. [5] Guided by the above authorities, the learned judge held that there were basis in the defendant’s application under O. 33 r 2 and r 5. His Lordship then proceeded to deal with the issues of limitation and estoppel as follows. Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 6 [6] On limitation, the learned judge noted that the plaintiffs had challenged inter alia the agreement that they had entered into with the State Government of Johor; the payment of dividends and the defendant’s profit and loss accounts. His Lordship found that these complaints were raised by the plaintiffs at the 17th Annual General Meeting of Felcra Sg. Ara (“the 17th AGM”) on 6.5.2004. [7] The learned judge held that the cause of action accrued on 6.5.2004 and that the plaintiffs were barred by limitation under section 6(1)(a) of the Limitation Act 1953 which provides inter alia that an action founded on a contract shall not be brought after the expiration of six years from the date on which the cause of action accrued. The plaintiffs filed the instant suit on 24.5.2011 i.e. more than 7 years after the cause of action had accrued. [8] The learned judge further found that the plaintiffs’ claim was also premised on the profit and loss accounts of Felcra Berhad Sg. Ara and as such, section 6(2) of the Limitation Act 1953 applies which similarly provides for a six year limitation period. [9] On the issue of estoppel, the learned judge found that after the Profit and Loss account for the years 2000, 2001 and 2002 were unanimously rejected by the plaintiffs, it was resolved at the 17th AGM that a Profit and Loss Review Committee be established to review the correctness of the profit and loss accounts. [10] His Lordship made a finding that the Profit and Loss Review Committee was in fact established and that at the 18th Annual General Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 7 Meeting of Felcra Sg. Ara (“the 18th AGM”), the Profit and Loss account for the years 2000 until June 2006 were unanimously accepted by the plaintiffs. Applying the principles in Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Berhad [1995] 1 MLRA 738, the learned judge held that the plaintiffs were estopped from challenging the accounts of Felcra Berhad Sg. Ara. [11] Having resolved the two issues against the plaintiffs, the learned judge dismissed the plaintiffs’ claim with costs. Aggrieved, the plaintiffs appealed to this Court. We heard the appeal and had unanimously dismissed the same. We now provide our reasons. The Appeal [12] In summary, learned counsel for the plaintiffs submitted that:

(i) the application by the defendant was made in bad faith as there was inordinate delay and that the defendant wanted to avoid cross examination of its witnesses;

(v) the learned judge erred in failing to consider that the plaintiffs’ cause of action was not based purely on the veracity of the defendant’s financial accounts but also on fraud and on doctrine of legitimate expectation. [13] In support of his submission, learned counsel for the plaintiffs cited Dominic J Puthucheary v Jet Age Construction Sdn Bhd & Anor and Module Construction Sdn Bhd & Ors v Jet Age Construction Sdn Bhd & Anor [1997] 2 MLJ 252; Savant-Asia Sdn Bhd v Sunway PMI-Pile Construction Sdn Bhd [2007] 7 MLJ 706; Krishnan Rajan a/l N Krishnan v Bank Negara Malaysia & Ors [2003] 1 MLJ 149 and Newacres Sdn Bhd v Sri Alam Sdn Bhd [1991] 3 MLJ 474. [14] In reply, it was submitted for the defendant that encl. 68 was correctly filed under O. 33 r 2 and r 5 and/or under O. 92 r 4 of the ROC; that based on the authorities, the plaintiffs are time barred from challenging any accounts prior to 2005; and that based on the plaintiffs’ own admission and agreement to accept the financial accounts of Felda Berhad Sg. Ara as correct, the plaintiffs are now estopped from commencing the instant suit. Our Decision [15] The principles on appellate intervention are trite, namely that an appellate court has a duty to intervene only where the trial court was plainly wrong or has so fundamentally misdirected itself that one may safely say that no reasonable court which had properly directed itself and asked the correct Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 9 questions would have arrived at the same conclusion (see Watt or Thomas v Thomas [1947] AC 484; Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1; Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395; Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453). [16] We had examined the decision of the learned judge with the above principles in mind, and we were not satisfied that his Lordship was plainly wrong in allowing the defendant’s application pursuant to O. 33 r 2 and r 5 of the ROC. [17] O 33 r 2 of the ROC reads: “Time of trial of questions or issues (O. 33, r.2)

The Court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or otherwise, to be tried before, at or after the trial of the cause or matter, and may give directions as to the manner in which the question or issue shall be stated.”. [18] Whereas O. 33 r 5 provides: “Dismissal of action after decision of preliminary issue (O. 33 r. 5)

If it appears to the Court that the decision of any question or issue arising in a cause or matter and tried separately from the cause or matter substantially disposes of the cause or matter or renders the trial of the cause or matter unnecessary, it may dismiss the cause or matter or make such order or give such judgment therein as may be just.”. Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 10 [19] In the instant appeal, the plaintiffs argued that the learned judge ought not to have allowed the defendant’s application by reason of the inordinate delay. Having considered the provisions of O. 33 rules 2 and 5 and the relevant authorities, his Lordship disagreed with the plaintiffs. [20] The decision of the learned judge was in accord with the provisions of O. 33 r 2 which expressly state that the application may be made either before, at or after the trial. Despite the fact that in the instant case trial had proceeded at such an advanced stage, with the plaintiffs’ witnesses having completed their testimony and the defendant’s first witness had also been examined, it did not preclude the defendant from filing the said application. In this regard, the issue of bad faith as contended by the plaintiffs did not arise, given that the law allows such an application to be made. [21] The plaintiffs contended that the procedure adopted by the defendant was wrong in the sense that the defendant must apply for an order under rule 2 first before seeking the court’s direction as to the manner in which the question or issue is to be stated. We found no merits in the plaintiffs’ contention. It was clearly indicated in the learned judge’s grounds of judgment that he had allowed the defendant to file the application in encl. 68, where his Lordship stated that: “[8] Pada 24.5.2016 Defendan telah membuat permohonan kepada Mahkamah ini untuk memfailkan Permohonan Defendan. Mahkamah telah membenarkan Defendan untuk memfailkan Permohonan Defendan dan seterusnya menetapkan 16.6.2016 sebagai tarikh pendengaran Permohonan Defendan tersebut.”. Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 11 [22] As to the appropriateness of the application, we echo the words of Mohd Hishamudin Yunus J (as he then was) in Dayapi Holdings (supra), where his Lordship said at pg. 341: “In my judgment, when the proceeding has reached such an advanced stage of the proceeding or had practically reached the trial stage, as has happened in the present case, the appropriate course to adopt, should any party be of view that the cause could be disposed of without the need of a normal trial, is not to invoke O. 14A, but to invoke O. 33 r. 2 and r. 5 of the RHC.”. [23] Learned counsel for the plaintiffs had submitted that the defendant failed to show that the application has resulted in substantial saving of time and expenditure. We were unable to accept the submission. As evident from the records, the trial of this matter took place from July 2012 until May 2016 with 10 witnesses testifying for the plaintiffs and one for the defendant. The examination of the defendant’s witness took more than 2 years i.e. from January 2014 until May 2016. In the circumstances, we found no reason to depart from his Lordship’s conclusion that: “(ix) Lagipun Mahkamah amati penolakan tindakan ini dapat menjimatkan kos pihak-pihak dan masa semua pihak memandangkan ia sudah terlampau lama sejak difailkan pada 24.5.2011.” [24] Obviously when the learned judge decided on encl. 68, the entire matter was disposed of and parties were spared from the rigmarole of the trial process for the defendant’s other witnesses to testify. Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 12 [25] On the issue of limitation, the learned judge found that the plaintiffs’ cause of action accrued in May 2005 when the plaintiffs through one Hamzah bin Abu Bakar raised the complaints on inter alia the financial statements or the profit and loss account at the 17th AGM held on 24.5.2004. We found no error of law or fact on the part of the learned judge. His finding was supported by the contemporaneous documents in the form of minutes of the 17th AGM, which recorded the following: “AGENDA 2 UCAPAN KETUA PESERTA En. Hamzah bin Abu Bakar …

2.4 Setelah di koperatkan beliau mempertikaikan perjanjian Felcra Berhad dengan Kerajaan Negeri, Potongan Felcra Holding, Penyata Hutang (P&L) yang mengelirukan dan perbelanjaan baja yang tinggi. …

2.6 Beliau juga mempertikaikan kaedah bayaran dividen bulanan walaupun harga sawit meningkat, peserta masih mendapat dividen kurang dari apa yang dikehendaki.”. [26] We agreed with the learned judge that the dispute between the plaintiffs and the defendant arose in 2004 i.e. at the 17th AGM when the Profit and Loss account for the years 2000, 2001 and 2002 were not accepted by the plaintiffs. At the said AGM, the plaintiffs had also raised the issue of payment of dividends. When the plaintiffs raised the complaints in respect of the profit and loss accounts and the dividends in the 17th AGM held on 24.5.2006 that was the earliest time at which an action could be brought Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 13 against the defendant. As such, the plaintiffs’ cause of action which was founded on a breach of agreement accrued on 24.5.2004 and it follows that the suit filed in 2011 was barred by limitation. [27] In Nasri v Mesah [1971] 1 MLJ 32, Gill F.J. said at pg. 34: “A “cause of action” is the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact which, if traversed, the plaintiff must prove in order to obtain judgment (per Lord Esher M.R. in Read v. Brown. In Reeves v. Butcher Lindley L.J. said: “This expression, ‘cause of action’, has been repeatedly the subject of decision, and it has been held, particularly in Hemp v Garland, decided in 1843, that the cause of action arises at the time when the debt could first have been recovered by action. The right to bring an action may arise on various events; but it has always been held that the statute runs from the earliest time at which an action could be brought.”. [28] Support can also be found in the case of Credit Corporation (M) Sdn Bhd v Fong Tak Sin [1991] 1 CLJ (Rep) 69 where the Supreme Court said at pg. 76: “… a cause of action is said to have accrued when there is in existence a person who can sue and another who can be sued, and when all the facts have happened which are material to be proved to entitle the plaintiff to succeed.”. [29] In submitting that the learned judge erred in his finding on limitation, the plaintiffs sought to rely on the defendant’s letter dated 18.4.2006 to the plaintiffs/participants of Felcra Sg. Ara. The caption of the letter reads: Pengesahan Selesai Hutang Projek Felcra Berhad Sg. Ara I, II & III Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 14 Pemakluman Kedudukan Kewangan Peserta. The plaintiffs contended that in light of this letter, the plaintiffs’ claim was not time barred. We found that the plaintiffs’ reliance on the letter dated 18.4.2006 was misconceived and an afterthought as the plaintiffs had not pleaded this letter in their original statement of claim, nor in their amended statement of claim. [30] The plaintiffs had also submitted that the learned judge erred in failing to consider that the plaintiffs’ cause of action was not based purely on the veracity of the defendant’s financial accounts but also on fraud and on doctrine of legitimate expectation. [31] Insofar as fraud was concerned, it is trite that the plaintiffs must plead the particulars of fraud. However, apart from the too general averments made in paragraph 11 of the amended statement of claim, the plaintiffs failed to particularize the facts or allegations of fraud purportedly committed by the defendant. No dates or other specific conduct(s) of the defendant were pleaded to support an action based on fraud. As for legitimate expectation, the doctrine was only applicable to public law matters and not to private law matters (see GPQ Sdn Bhd v Constant View Sdn Bhd [2017] 4 MLRA 483. See also Darahman Ibrahim & Ors v Majlis Mesyuarat Kerajaan Negeri Perlis & Ors [2008] 1 MLRA 411). As such, the plaintiffs could not rely on the purported claim premised on fraud and legitimate expectation. The plaintiffs were therefore left with only the cause of action for breach of contract and/or accounts and in this regard, the plaintiffs were clearly out of time in commencing the instant suit. Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 15 [32] On estoppel, we likewise found no appealable error on the part of the learned judge. Consequent to the issues raised by Hamzah bin Abu Bakar at the 17th AGM, all the participants of Felcra Sg. Ara voted against the passing of the Profit and Loss account for the years 2000, 2001 and 2002. The unanimous rejection was evident by the following minutes of the 17th AGM: “AGENDA 8 MEMBENTANGKAN DAN MENERIMA PENYATA P&L 2000, 2001 & 2002 (Pindaan)

8.1 Pengurus Kawasan telah membentangkan penyata P&L Sg. Ara I, II dan III bagi tahun 2000, 2001 & 2002 (Pindaan). En. Azis bin Abdul Rahman mencadangkan agar penyata tidak diterima dan disokong oleh Hj. Md. Zin bin Sani dengan sebulat suara.”. [33] After the unanimous rejection of the Profit and Loss account for the years 2000, 2001 and 2002, it was resolved at the 17th AGM that a Profit and Loss Review Committee be established to review the accounts. The learned judge’s finding as reproduced below was consistent with the minutes of the 17th AGM: “(i) … Perkara ini diputuskan secara sebulat suara pada 6.5.2004 dan ia direkodkan di dalam Bil. 3 Keputusan Mesyuarat Agong Peserta Felcra Sg. Ara Kali Ke-17 pada 6.5.2004 seperti berikut: “Mesyuarat Agong dengan sebulat suara dipersetujui oleh peserta yang hadir, sebuah Jawatankuasa Semakan P & L ditubuhkan dengan melibatkan NGO. Jawatankuasa ini mempunyai ahli yang Civil Appeal No. J-02(NCVC)(W)-1304-07/2016 16 tetap bagi tujuan pemahaman masa [masalah] yang berbangkit dalam P & L.”.

8.1 Pen. Eksekutif Kanan telah membentangkan P & L Sg. Ara I, II dan III bagi tahun 2000, 2001, 2002, 2003, 2004, 2005 dan Jun 2006. En. Bakahruddin bin Abd. Rahman mencadangkan agar penyata P & L tersebut diterima dan disokong oleh En. Hudzen bin Deni dengan sebulat suara.”.

(v) Jadi berasaskan fakta-fakta yang dinyatakan sebelum ini, maka wajarlah Plaintif ini dihalang (‘estopped’) daripada mempertikaikan kesahihan mana-mana akaun kewangan Felcra Berhad Sg. Ara tersebut selaras atau sejajar dengan keputusan Mahkamah Persekutuan di dalam kes Boustead Trading (1985) Sdn. Bhd. v Arab Malaysian Merchant Bank Berhad