Green Nature Grandeur Sdn Bhd & 2 Lg v Companies Commission of Malaysia & 12 Lg (WA-24NCC-415-09/2017)

GREEN NATURE GRANDEUR SDN BHD (Company No: 661977-P)

CHEE HOW ONN (NRIC No.: 471202-08-5059)

LIM VOON KHEN (NRIC No.: 600906-08-5899) … PLAINTIFFS

1.

BLUE VALLEY PLANTATION BHD (Company No.: 191526-V)

PYLON RANGE SDN BHD (Company No.: 385436-W)

PANNIRSELVAM A/L SUBRAMANIAM (NRIC No.: 540715-08-6221) 2

SUMMUGAM A/L S RAMASAMY (NRIC No.: 541116-08-6099)

CHANDRSEKARAN A/L RAMASAMY (NRIC No.: 601113-10-6527)

MALA A/P K.N.K NAIR (NRIC No.: 590602-10-6156)

BABU A/L K.N.K NAIR (NRIC No.: 620322-10-6295)

NIK SAIFUL NIZAM BIN NIK AZIZ (NRIC No.: 680426-06-5437)

MOHD EZALLBISMI BIN MOHD MUSTAPHA (NRIC No.: 770801-03-6195)

JESSUDARAN A/L SERIDARAN (NRIC No.: 790722-03-5651)

YEOH NAM KOOI @ YEOH LAM KOOI (NRIC No.: 490814-08-5707)

APPLASAMY A/L SUPPAROO (NRIC No.: 580628-02-5021) … DEFENDANTS

This is an application by the Plaintiffs pursuant to Order 28 rule 8 of the Rules of Court 2012 to convert the Originating Summons dated 26/9/2017 to a writ. I had allowed the Plaintiffs’ application. These are the full reasons for my decision. 3

The Plaintiffs contend that on 19/1/2005, the 1st Plaintiff entered into a Shares Sale Agreement with the 3rd Defendant to purchase 3,984,970 units of ordinary shares in the 2nd Defendant’s company Blue Valley Plantation Bhd (“the Company”) at the purchase price of

3.

4.

On 27/12/2013, since the 4th Defendant was adjudged a bankrupt, pursuant to section 125 of the Companies Act 1965, he was disqualified from acting as a director of the 2nd Plaintiff hence effectively making the 2nd Plaintiff and the 3rd Plaintiff to be the only lawful and rightful directors of the Company with effect from 27/12/2013.

However, upon conducting searches with the 1st Defendant, the 1st Plaintiff discovered, amongst others, that:

the 2nd Defendant failed to lodge Forms 48A and 49 with the 1st Defendant for the appointment of the 2nd and 3rd Plaintiffs as additional directors of the 2nd Defendant;

the 2nd Defendant failed to lodge Form 49 with the 1st Defendant for the resignations of the 6th and 8th Defendants as directors of the 2nd Defendant with effect from 22.1.2005; and 5

several Forms 49 for the purported appointments of various persons as directors and company secretaries of the 2nd Defendant were unlawfully lodged.

The 2nd Plaintiff, being the director of the 2nd Defendant wrote to the 1st Defendant Companies Commission Malaysia informing the 1st Defendant about all the invalid and unlawful appointments of directors and company secretaries of the 2nd Defendant and the unlawful lodgements of Forms 49 above. The 2nd Plaintiff also enclosed the amended Forms 49 to be lodged with the 1st Defendant (“Amended Forms 49”) to give effect to the valid appointments of the 2nd and 3rd Plaintiffs.

The 1st Plaintiff also wrote to the 1st Defendant explaining its rightful shareholding in the 2nd Defendant by making reference to the Shares Sale Agreement, the lawful appointment of the 2nd and 3rd Plaintiffs as directors of the 2nd Defendant and the unlawful appointments of directors and secretaries in the 2nd Defendant. The 1st Plaintiff also urged the 1st Defendant to accept the lodgement of the Amended Forms 49 which was submitted by the 2nd Defendant. 6

The 1st Defendant verbally declined to accept the lodgement of the Amended Forms 49 and required that a Court order be sought to rectify the Register of the 2nd Defendant. As such, the Plaintiffs filed the Originating Summons against the Defendants.

The 1st Plaintiff requested for the stamped original Forms of Transfer of Securities (Form 32A) which should still be in the custody of the 3rd Defendant’s Previous Solicitors by way of a letter dated 30/6/2016 from the Plaintiffs’ present solicitors, Mah Weng Kwai & Associates (“Plaintiff’s Present Solicitors”) to the 3rd Defendant’s Previous Solicitors. However, by way of a letter dated 4/8/2016, the 3rd Defendant’s Previous Solicitors denied having in its custody the stamped original Forms of Transfer of Securities (Form 32A).

The 3rd Defendant denies being a party to any Shares Sale Agreement with the 1st Plaintiff. The 3rd Defendant said that it never sold any shares to the 1st Plaintiff and never received any purchase price from the 1st Plaintiff. Obviously, it will be the 3rd Defendant’s contention that it never signed any Form 32 A or forwarded any Share Certificates to the 3rd 7 Defendant’s Previous Solicitors. In fact, the 3rd Defendant denies ever engaging the firm of Dennis Nik & Wong who are referred to in the Shares Sale Agreement as “stakeholder or the 3rd Defendant’s solicitors”.

The Plaintiffs submit that the exchange of affidavits reveal that there are numerous conflicts of evidence and disputes of fact which revolve around the following five main issues which are :

the existence of the Shares Sale Agreement dated 19.1.2005;

whether the 1st Plaintiff, by its previous solicitors, had duly forwarded the documents necessary for the Sale and Purchase Transaction to the 3rd Defendant’s previous solicitors pursuant to Clause 5 of the Shares Sale Agreement;

whether the 3rd Defendant’s previous solicitors were acting for the 3rd Defendant at the time of the Sale and Purchase Transaction and had in their possession the documents which were duly forwarded by the 1st Plaintiff’s previous solicitors; 8

the existence, validity and enforceability of the Director’s Circular Resolutions which were passed by the former directors of the 3rd Defendant to effect the transfer of shares of the 3rd Defendant to the 1st Plaintiff in the Company; and

whether, and if so, limitation has set in and the Plaintiffs’ action in this originating summons is time-barred. Analysis and Findings The law

Order 28 rule 8(1) of the Rules of Court 2012 (“ROC”) is reproduced as follows: “(1) Where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it may order the proceedings to continue as if the cause or matter had been so begun and may, in particular, order that pleadings shall be delivered or that any affidavits shall stand as pleadings, with or without liberty to any of the parties to add thereto or to apply for particulars thereof.” 9

The Plaintiffs submit that Order 28 rule 8 envisage circumstances where it appears that there are serious disputes of facts which have arisen after the commencement of the action by way of originating summons. With Order 28 rule 8, by converting the originating summons to a writ action, the disputed facts can be determined after a proper exchange of pleadings and after hearing oral testimony of witnesses.

In the case of Husli @ Husly bin Mok v Jundar Realty Development Sdn Bhd & Anor [2014] 3 MLJ 496, the Court of Appeal held that on the reading of Order 4 rule 4 (2(b) of the Rules the High Court 1980 (similar provision under Order 5 rule 4(1)(b) of the Rules of Court 2012 now), it implies that it is inappropriate to commence an action by way of originating summons if there is likely to be a substantial disputes as to fact. The action must be begun by a writ action instead.

In view of the serious allegations and disputes as to facts, as revealed by the affidavits exchanged between parties, the Court of Appeal held that it would be inappropriate that the proceedings be disposed of solely on affidavit evidence and further held that the High Court had erred 10 in not acceding to the plaintiff’s oral application to convert the originating summons action to a writ action. The Court of Appeal held that the High Court should have allowed the plaintiff to proceed with the matter in the manner as prescribed by Order 28 rule 8(1) of the Rules of the High Court 1980 (similar provision in the Rules of Court 2012 now). “[14] In our judgment, it should have been obvious to all parties (including the learned High Court judge) at the proceedings of the originating summons that, in view of the serious allegations and disputes as to facts, as revealed by the affidavits of both sides, that it was inappropriate that the proceedings be disposed of solely on affidavit evidence. Order 5 r 4(2)(b) of the Rules of the High Court 1980 provides: 4 Proceedings which may be begun by writ or originating summons (O 5 r 4)

Proceedings

...

in which there is unlikely to be any substantial dispute of fact, are appropriate to be begun by originating summons... [15] Thus O 5 r 4(2) implies that if there is likely to be a substantial dispute as to fact, then it is inappropriate to commence an action by originating summons; instead, it must be begun by a writ action. 11 ... [20] In our judgment, it is here that the learned High Court judge, with respect, erred. In the light of the conflicts in the evidence, he should have acceded to the appellant’s/plaintiff’s oral application and converted the originating summons action to a writ action and proceeded with the matter in the manner as prescribed by O 28 r 8(1) of the Rules of the High Court 1980: to order that the affidavits be deemed to be pleadings, with liberty to any party to apply for particular; or, alternatively, to issue directions to the parties to file their respective pleadings (statement of claim, statement of defence, etc). Order 28 r 8(1) provides: 8 Continuation of proceedings as if cause or matter begun by writ (O 28 r 8)

Where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it may order the proceedings to continue as if the cause or matter had been so begun and may, in particular, order that any affidavits shall stand as pleadings, with or without liberty, to any of the parties to add thereto or to apply for particulars thereof.”

The Supreme Court in the leading case of Ting Ling Kiew v Tang Eng Iron Works Co Ltd [1992] 2 MLJ 217 held that conflicts of evidence in 12 an action can only be properly and satisfactorily resolved if oral evidence is adduced and witnesses cross-examined on their evidence which is not possible in proceedings begun by originating summons. “Unquestionably, these conflicts in the evidence can only properly and satisfactorily resolved if oral evidence is adduced and witnesses cross-examined on their evidence which, however, is not possible in proceedings begun by originating summons.”

The 3rd Defendant denied the existence of the Shares Sale Agreement and averred in its affidavit, amongst others as follows:

the 3rd Defendant and the current directors of the 3rd Defendant had no knowledge and/or documents or records related to the

the 3rd Defendant and the current directors of the 3rd Defendant do not have any transaction records and/or knowledge of the Shares Sale Agreement and the terms which are allegedly binding against the 3rd Defendant; 13

the 3rd Defendant and the current directors of the 3rd Defendant do not have any transaction records and/or knowledge of the shares sale transaction claimed by the Plaintiffs; and

the 3rd Defendant has never received any payment of the alleged purchase price of the shares in the Company from the Plaintiffs.

The 4th to 13th Defendants submit that the Plaintiffs’ claim is time barred but they have not filed any application to strike out the claim. Some of them admit that the Shares Sale Agreement was executed but alleged that the 1st Plaintiff was in breach of it.

It is obvious that there are serious disputes of fact and there are also witnesses such as the Plaintiffs’ Previous Solicitors and the 3rd Defendant’s Previous Solicitors who might have to be called as witnesses in view of the roles they have played. 14

The claim insofar as it relates to the 3rd Defendant is for rectification of the Share Register of the Company to reflect the transfer of the 3rd Defendant’s shares in the Company to the 1st Plaintiff. To succeed on the facts before me, the Plaintiffs will have to show that the 3rd Defendant has already divested itself of its beneficial interest in the shares by signing the Transfer Forms and forwarding the same together with the Share Certificates to the 3rd Defendant’s Previous Solicitors as stakeholder. The 3rd Defendant will obviously deny that it has signed the Transfer Forms or forwarded the share certificates to anyone, as it contended that it never entered into the Shares Sale Agreement with the 1st Plaintiff. That is yet another disputed fact which has to be tried.

It is pertinent to note that the other Defendants save for the 3rd Defendant had not objected to the Plaintiffs’ application to convert the Originating Summons to a writ action. Initially the Plaintiffs’ solicitors had made an oral application to convert the Originating Summons and only the 3rd Defendant objected through its solicitors. The other Defendants have not filed any affidavits to oppose the application herein and have not filed any submission. 15

I find that there are serious disputes of fact and it would be in the interest of justice to convert the Originating Summons herein into a writ. There is no prejudice to the Defendants. Accordingly, I allow the Plaintiffs’ application with costs in the cause. Wong Chee Lin Judicial Commissioner Kuala Lumpur High Court Commercial Division Dated: 9th April 2018 16 Solicitors for the Plaintiff Raymond Mah, Diana Cheak & Vivien Fan Messrs Mah Weng Kwai & Associates Advocates & Solicitors Level 10-1, Tower B Menara Prima, Jalan PJU 1/39 Dataran Prima 47301 Petaling Jaya Selangor Tel : 03-7887 2702 Fax: 03-7887 2703 Solicitors for the 3rd Defendant Dato’ Jasbeer Singh with Muhammad Nazrin bin Mohd Seth Messrs Jasbeer, Nur & Lee Advocates & Solicitors No. 6, 2nd Floor, Block C Wisma RKT, Jalan Raja Abdullah Off Jalan Sultan Ismail 50300 Kuala Lumpur Tel : 03-2694 8908 Fax: 03-2694 8909 17 Solicitors for the 1st Defendant Puan Nurul Nabila Suruhanjaya Syarikat Malaysia Seksyen Litigasi Bahagian Pendakwaan dan Litigasi Tingkat 28, Menara SSM @ Sentral No. 7, Jalan Stesen Sentral 5, KL Sentral 50623 Kuala Lumpur Tel : 03-7721 4000 Fax: 03-7721 4001 Solicitors for the 2nd, 4th to 13th Defendants N Yohendra Messrs Netto & Yohendra Advocates & Solicitors A-19-02, Atria Damansara Jalan SS22/23, Damansara Jaya 47400 Petaling Jaya