Jaya Sudhir A/L Jayaram v 1. Dato' Seri Timor Shah Rafiq (WA-22NCC-165-05/2017)

DATO’ SERI TIMOR SHAH RAFIQ (No. Pasport Amerika Syarikat: 483746192)

NAUTICAL SUPREME SDN BHD (No. Syarikat: 989385-H)

AZIMUTH MARINE SDN BHD (No. Syarikat: 961825-A)

NAUTILUS TUG & TOWAGE SDN BHD ..DEFENDAN- (No. Syarikat: 1016194-T) DEFENDAN (Disatukan dengan Guaman No. WA-22NCC-113-03/2018 [dahulunya Guaman Sivil No. WA-22NCvC-544-08/2016] berikutan dengan Perintah Mahkamah Rayuan bertarikh 23.3.2018) 2 DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR (BAHAGIAN DAGANGAN) GUAMAN NO. WA-22NCC-113-03/2018 [dahulunya Guaman Sivil No. WA-22NCvC-544-08/2016] ANTARA NAUTICAL SUPREME SDN BHD …PLAINTIF DAN JAYA SUDHIR A/L JAYARAM …DEFENDAN JUDGMENT [1] These two suits, Suit No. WA-22NCC-165-05/2017 (‘Suit 165’) and Suit No. WA-22NCC-113-03/2018 (‘Suit 113’) (formerly Civil Suit No. WA-22NCvC-544-08/2016), were ordered to be and were tried together at the same time. [2] Central to these two suits was the transfer of shares in a joint venture company. 3 [3] Out of this transfer was spawned, in one suit, allegations of a variety of actionable wrongs in having caused the transfer and in the other, an allegation that the transfer had been agreed upon. Background [4] Nautilus Tug & Towage Sdn Bhd (‘NTT’) is a joint venture company. Its primary objective was to engage in business with a company known as Vale Malaysia Minerals Sdn Bhd (‘Vale’) in inter alia providing harbour tugs services and port and maritime related services. [5] One of Vale’s major projects in Malaysia is the Maritime Terminal of Teluk Rubiah in Perak. [6] Vale is, in turn, a wholly owned subsidiary of a large multi-national mining company, Vale International S.A., which is incorporated in Switzerland, with roots in Brazil. [7] Nautical Supreme Sdn Bhd (‘NSSB’) and Azimuth Marine Sdn Bhd (‘AMSB’) were the two original shareholders in NTT. [8] Although there were prior dealings between the parties behind these two companies through their various corporate entities, much of this information were really surplusage and not of any particular relevance. They tended rather to obfuscate than to clarify, though of those that are relevant, they will be addressed in context. 4 [9] Suffice to say at this juncture that there was a prior joint venture company, Nautilus Perak Marine Services Sdn Bhd (‘NPMS’) formed to bid for contracts to provide services to Vale. However, due to the ‘external financiers and other constraints’ AMSB, NSSB and NTT entered into what was styled as ‘Shareholders Agreement’ and dated 15th March 2013 (‘Shareholders Agreement’). [10] This Shareholders Agreement, as disclosed in its recital ‘E.’, was to record a mutual agreement among the parties to participate in the equity of NTT and cooperate as joint venture partners in NTT to carry on its business and to regulate, ‘… their rights obligations liabilities and benefits as well as the affairs of the Company and their rights as shareholders of the Company…”. In the Shareholders Agreement, the ‘Company’ meant NTT [11] Based on the Shareholders Agreement, and following thereupon, NTT had two shareholders. AMSB held 80% of NTT’s equity while NSSB held the balance 20%. [12] NTT had an issued and paid up share capital of 1 million ordinary shares of RM1.00 per share. [13] In accordance with the Shareholders Agreement, this translated into AMSB holding 800,000 NTT shares while NSSB held 200,000 shares. [14] As for NTT’s Board of Directors, it was agreed in the Shareholders Agreement that there was to be a total of six directors, four to be 5 nominated by AMSB and two by NSSB. But this was subject to provisions which catered for this ratio to be altered. [15] AMSB’s nominated directors on NTT’s Board of Directors were Dato’ Ahmad Johari Bin Abdul Razak (‘Johari’), Suresh Emmanuel Abishegam (‘Suresh’), Ajaib Hari Dass (‘Hari Dass’) and Dato’ Dr Abd. Latiff Bin Ahmad (‘Latiff’). [16] As an alternate to Latiff, one Jaya Sudhir A/L Jayaram (‘Sudhir’) was appointed. Sudhir is the Plaintiff in Suit 165 and the Defendant in Suit 113. [17] NSSB’s nominated directors on NTT’s Board of Directors were Dato’ Wan Mohamed Yaacob Bin Dato’ Wan Salaidin (‘Wan’) (with Syed Feisal Alhady as his alternate) and Dato’ Seri Timor Shah Rafiq (‘Timor’). [18] Suresh is a director of AMSB and he was the key representative of AMSB. Suresh is a Master Mariner and has some thirty years of experience in the maritime industry. In the various emails that were led in evidence, Suresh was also referred to and addressed as Captain Suresh. Suresh has beneficial interest in East India Shipping Corporation Sdn Bhd, which is the ultimate holding company of the Azimuth group of companies, which included AMSB. [19] Timor is a director in some of the companies within the Dwitasik group of companies. Dwitasik Marine Sdn Bhd is a wholly owned 6 subsidiary of Dwitasik Sdn Bhd and NSSB is a wholly owned subsidiary of Dwitasik Marine Sdn Bhd. [20] Subsequent to the Shareholders Agreement, AMSB transferred 100,000 of its shares in NTT to Sudhir and which transfer was approved by the Board of Directors of NTT towards the end of 2015, on 16th December. The 100,000 NTT shares were subsequently registered in Sudhir’s name on or around the 1st of April 2016. [21] Sudhir was then appointed by the Board of Directors of NTT as a director of NTT. That was on 2nd November 2016. [22] The transfer of the 100,000 NTT shares to Sudhir and his appointment then became the source of dispute among the parties in both the actions. [23] Both suits are connected in that they relate to the pivotal issue of AMSB’s transfer of the 100,000 shares it held in NTT to Sudhir. [24] Due to the dispute among the parties, NSSB issued a notice of breach of the Shareholders Agreement to AMSB and NTT on 1st July 2016. [25] The Shareholders Agreement was subsequently terminated. NSSB issued a notice of termination to AMSB on 11th October 2016. A few days later on 17th October 2016, AMSB issued its notice of termination of the Shareholders Agreement. 7 [26] There exist inter alia disputes over who actually terminated the Shareholders Agreement and when and what terms continue to survive the termination. These were among the issues in dispute that have been brought to arbitration by the parties to the Shareholders Agreement. [27] While the background facts obviously remain the same, the material facts alleged and relied upon in respect of the causes of action in each of the suits differ. [28] It was probably in these circumstances that following an appeal in Suit 165, the Court of Appeal, on 23rd March 2018, ordered the two suits to be heard together. Suit 113 [29] Suit 113 was brought by NSSB against Sudhir. [30] Although it bears a more recent intitulement, Suit 113 was in fact filed first in time. Commenced as Kuala Lumpur High Court Suit No. WA- 22NCvC-544-08/2016, it was then given its new number after it was transferred to be heard with Suit 165. [31] In Suit 113 NSSB maintained that AMSB’s transfer of 100,000 of its shares in NTT to Sudhir was a breach of the Shareholders Agreement. 8 [32] NSSB contended that in requiring the transfer of AMSB’s 100,000 NTT shares to himself, Sudhir had procured and/or induced a breach of the Shareholders Agreement by AMSB. [33] NSSB further contended that pursuant to the Shareholders Agreement there existed fiduciary duties owed among the parties inter se i.e. NSSB, AMSB and NTT. By procuring and/or inducing the breach of the Shareholders Agreement by AMSB, Sudhir had also procured and/or induced a breach of fiduciary duty on the part of AMSB. [34] In addition, NSSB also contended that in relation to the transfer of the 100,000 NTT shares, Sudhir had dishonestly assisted a breach of trust and/or was in knowing receipt of trust property which had been occasioned by a breach of trust. [35] In consequence, a slew of reliefs were sought by NSSB including a declaration that Sudhir is not entitled to the 100,000 NTT shares and a mandatory injunction requiring Sudhir to retransfer the 100,000 NTT shares to AMSB. [36] NSSB’s allegations were denied by Sudhir. [37] In addition to denying the alleged wrongdoings, Sudhir in his defence maintained that it was agreed by both NSSB and AMSB that he would participate in the equity of NTT either in his personal capacity or through an entity or entities in which he had a controlling interest. 9 Suit 165 [38] Suit 165 was brought by Sudhir against Timor, NSSB, AMSB and NTT. It was commenced subsequent to Suit 113. [39] Sudhir was not a party to the Shareholders Agreement. However, in Suit 165, Sudhir claimed that there existed ‘principal terms’ to his participation as an investor in the joint venture and that there also existed what was pleaded as a ‘collateral understanding and/or an implied condition’ among Sudhir, NSSB and AMSB. [40] Sudhir pleaded in his Statement of Claim as follows: ‘E.

In sum, the principal terms for the Plaintiff’s participation as an investor were inter alia as follows:-

20.1 AMSB and the Plaintiff would hold 80% of the shares in NTT (“the 80% NTT Shares”); and

20.2 NSSB would be allocated 20% shares in NTT. NSSB would only be required to inject 10% equity investment wherein the balance 10% equity investment will be made by AMSB and the Plaintiff on NSSB’s behalf.

The principal terms were specifically agreed by DST for and on behalf of NSSB.

It was further agreed between the Plaintiff, NSSB (and/or DST) and AMSB that the 80% NTT Shares would initially be registered in the name of AMSB, wherein part of these shares would be held on trust for the Plaintiff.

The Plaintiff contends that his participation in NTT as the proverbial “white knight” was at all times predicated on a collateral understanding 10 and/or an implied condition between the Plaintiff, NSSB and AMSB that:-

23.1 the Plaintiff is the beneficial owner of part of the 80% NTT shares held in the name of AMSB’;

23.2 the Plaintiff would be entitled to participate in the equity of NTT, either directly as a shareholder in NTT or through the shareholding of AMSB at a later stage; and

23.3 NSSB agreed to the Plaintiff’s participation in the equity of NTT and no further consent was required for the divestment of any part of the 80% NTT Shares, either directly or indirectly, to the Plaintiff. (hereinafter collectively (sic) to as the “Collateral Understanding”) [41] Throughout the Statement of Claim the terms in paragraph 23 were then referred to as the collateral understanding (‘Collateral Understanding’). [42] By reason of the alleged Collateral Understanding, Sudhir maintained that NTT was in fact a joint venture among Sudhir, AMSB and NSSB. [43] Sudhir then contended that in issuing the notice of breach of the Shareholders Agreement, NSSB had breached the Collateral Understanding. [44] Sudhir also alleged that Timor and NSSB had conspired to defraud him. From the particulars disclosed in the Statement of Claim, the alleged conspiracy to defraud was fundamentally predicated on what were alleged to be steps or measures taken by Timor and/or NSSB to deny him the 11 100,000 NTT shares, which was in breach of the Collateral Understanding. [45] Inducement to breach and/or interference with the alleged Collateral Understanding was also pleaded by Sudhir against Timor. [46] Also pleaded in the Statement of Claim against Timor were allegations that he had ‘dishonestly assisted and/or aided and abetted and/or was an accessory to NSSB in facilitating the breach of the Collateral Understanding’ and a breach of trust. As for the claim in trust, although it was submitted that Sudhir’s case was also that AMSB holds 50% of the shares in NTT in trust for Sudhir, no relief in respect of this trust was sought against AMSB in the Statement of Claim. [47] In addition, it was pleaded that Timor owed Sudhir a duty of care and/or had assumed personal responsibility to Sudhir to ensure compliance with the alleged Collateral Understanding and to ensure that its terms were not breached. It was alleged that Timor had breached this duty and the responsibility that he had assumed. [48] Over and above the foregoing causes of action, the tort of abuse of process was also invoked in respect of various legal proceedings and arbitration commenced by NSSB. In paragraph 59 of the Statement of Claim, these proceedings were alleged to be an abuse of process and were, ‘…done with the sole intention of ensuring that the Plaintiff would be deprived of his beneficial ownership in part of the 80% NTT shares 12 and/or the Vale Project and his rights under the Collateral Understanding without a fair hearing.’ [49] A careful consideration of the Statement of Claim will disclose that Sudhir’s pleaded claims and allegations revolved around and stemmed from the existence of the alleged Collateral Understanding. Even the majority of the reliefs prayed for were dependent upon the alleged Collateral Understanding being established, save for the declaration as to the validity of Sudhir’s appointment as a director of NTT. [50] AMSB, as a party to this action, supported Sudhir’s contention. The key witness who testified on behalf of AMSB was Suresh. [51] NTT on the other hand, as a corporate entity, adopted a somewhat neutral role, although its Board of Directors consisted of a majority of directors nominated by AMSB. [52] It needs also to be mentioned that both AMSB and NSSB mounted counterclaims against each other in Suit 165. However, both counterclaims were stayed upon terms pending arbitration of the disputes raised and therefore they need not be considered. The Shareholders Agreement [53] Of important significance to both the suits was the Shareholders Agreement and its terms that dealt with the transfer of NTT shares. 13 [54] As mentioned, the purpose of the joint venture was encapsulated in the Shareholders Agreement. Although recital E expressed the objective of the NTT’s shareholders cooperating as ‘joint venture partners’, clause 25 of the Shareholders Agreement made it clear that the relationship between the parties to it ‘shall not constitute a partnership’. [55] Sub-clauses 4.1 and 4.2 under clause 4 of the Shareholders Agreement provided as follows: ‘4.

4.1 The parties hereto hereby agree that the following shall be their respective shareholding ratio in the Company;

AZIMUTH 80%

20%

4.2 The share capital of the Company shall, unless otherwise unanimously agreed upon, be held by the Parties hereto in the proportion stated in Clause 4.1 at all times.’ (Emphasis added) [56] There were also pre-emption rights conferred under clause 9 of the Shareholders Agreement. In essence, no shareholder of NTT could transfer or otherwise deal with its shares in NTT until and unless the provisions relating to the pre-emption rights were complied with. Such pre-emption rights are normally specifically required for the purpose of ensuring that shares are not transferred to third parties without giving the other shareholders a first option to acquire them. 14 [57] The provisions set out under clause 9 were that any shareholder desirous of transferring any of its shares in NTT shall first give notice of it to NTT. NTT shall then be constituted an agent of the intended transferor. NTT’s directors would then offer the shares to be transferred to NTT’s other shareholder at a ‘Prescribed Price’. There would then follow a process set out under clause 9. [58] The ‘Prescribed Price’ is a price to be determined by the NTT’s auditors or such other advisors as may be appointed, ‘on the basis of the net tangible asset value of each share taking into account the market value of the assets of the Company and tax liabilities where applicable less the total liabilities of the Company and other consideration as the auditors and/or such advisers deem relevant.’ [59] Clause 9.4 of the Shareholders Agreement makes it a condition precedent to the right to any transfer of shares in NTT that the purchaser or transferee be required to execute deed of ratification and accession pursuant to which the purchaser or transferee shall be bound by and be entitled to the benefit of the Shareholders Agreement. [60] NSSB’s contention in Suit 113 was that the transfer to Sudhir of the 100,000 shares in NTT was in breach of these provisions of the Shareholders Agreement. [61] In addition, Sudhir was appointed an additional director of NTT. He was nominated by Latiff. This too, it was maintained, was a breach of the 15 Shareholders Agreement in respect of the number of directors that AMSB and NSSB could each nominate to be on NTT’s Board of Directors. [62] Clause 10.1 of the Shareholders Agreement provided that:

10.1 Unless otherwise unanimously agreed to be varied by the Shareholders in writing, the Board of the Company shall consist of not more than six (6) Directors (including the Chairman) of which four (4) persons shall be nominated by AZIMUTH and two (2) persons shall be nominated by NSSB.

10.1.1 The right of AZIMUTH and NSSB to nominate 4:2 Directors to the Board is subject to the Parties holding the equity in the ratio as stated in Clause 4.1 above.

10.1.2 In the event the shareholding of any of the Parties hereto in the Company falls below 20%, the relevant Party shall only be entitled to nominate one (1) director to the Board of the Company and shall cause the resignation of its other director(s) from the Board, if more than one (1).’ (Emphasis added) Sudhir’s alleged “Collateral Understanding” [63] As Sudhir’s claim of a Collateral Understanding in Suit 165 may provide justification to the allegations made against him in Suit 113, and notwithstanding Suit 113 was first in time, it would be more appropriate to first consider Sudhir’s claim in Suit 165. 16 [64] Sudhir is a businessman with over 30 years of experience and claims to have investments in some thirty to forty companies across the world including Malaysia, Netherlands, Sri Lanka, India, Singapore, [65] Although AMSB and NTT were also cited as defendants, vis a vis Sudhir, they were obviously not his adversaries in the suit. The transfer of the 100,000 NTT shares was by AMSB and AMSB’s nominees have control of NTT’s Board of Directors. [66] Sudhir’s de facto adversaries in the suit were Timor and NSSB. In this regard, Timor and NSSB have unity of interests as not only was Timor personally involved in NSSB, he was also its principal representative. [67] Before delving into the farrago of facts and allegations presented by the parties, what first confronted Timor and NSSB was a statement of claim that sought to declare and enforce what was termed as a ‘Collateral Understanding’ as if it were a binding legal contract. [68] As pleaded, the Collateral Understanding would seem to be collateral to and/or implied in the agreement between NSSB and Sudhir that was pleaded in paragraphs 20 and 21 of the Statement of Claim. [69] It was the Collateral Understanding that Sudhir sought to establish which would also warrant and justify the transfer of the 100,000 NTT shares by AMSB to him. 17 [70] Timor and NSSB in their joint defence denied the existence of the alleged Collateral Understanding. In their defence they maintained that the ‘Actual Understanding’ was that Sudhir, as the third party investor, was only meant to take up equity in AMSB. This was set out in their defence as follows: ’33. The allegations regarding inter alia the Collateral Understanding in paragraphs 20, 21, 22, 23 and 24 of the Statement of Claim are categorically denied and Sudhir is put to strict proof thereof.

The understanding between DVSB, represented by Timor and ASC, represented by Suresh was that the third party investor and/or Sudhir would be offered majority equity, with the investor and/or Sudhir to take up equity in AMSB (“Actual Understanding”).

In other words, according to the Actual Understanding, the only shareholders of NTT would be AMSB as the majority shareholder and NSSB as the minority shareholder, with the investor not holding any shares in NTT but instead, holding shares in AMSB.

Timor was informed by Suresh that Sudhir agreed to be an investor based on the Actual Understanding.

With Sudhir having agreed to be an investor, the shareholding ratio in NTT was agreed between AMSB and NSSB to be 80:20.

The Actual Understanding between NSSB and AMSB was that:-

38.1 There would only be 2 shareholders of NTT i.e. AMSB with 80% shareholding and NSSB with 20% shareholding, with all these parties executing the Shareholders Agreement.

38.2 Sudhir would be an investor by taking up majority or controlling equity in AMSB (which is to be negotiated between Suresh and Sudhir, and does not involve NSSB), but not equity in NTT.’ [71] It was not pleaded when, specifically, the Collateral Understanding came into being. Suffice to say that upon the evidence led, it was before 18 the signing of the Shareholders Agreement, at the latest, by 16th October 2012, based on an email of that date from Suresh. It was therefore in the ‘run-up’ to the signing of the Shareholders Agreement that Sudhir got involved with AMSB and NSSB and the Collateral Understanding allegedly arrived at. [72] The contemplated contract that the parties were pursuing with Vale was originally for the provision of inter alia port and maritime services i.e. operation of tug boats. Negotiations had begun in mid-2011 and, at that time, instead of NTT, the vehicle that was intended for the joint venture was NPMS. [73] However, subsequently and due to a policy change, the Vale Group of companies and accordingly Vale, decided that it did not want to own any tug boats but instead wanted to charter them and to have them operated by a third party. [74] This change of policy presented the parties with a problem. It meant they would have to build and own the tug boats if they wanted to provide the services to Vale. The finances required to construct several tug boats would be quite substantial. [75] In NPMS, NSSB was the majority shareholder with 70% of NPMS’s issued share capital. With Vale’s new requirements, NSSB would have had to shoulder the major part of the financial burden and risk involved. This was not something that NSSB wanted to shoulder. 19 [76] It was in this context that NTT, incorporated on 7th September 2012, came to be the joint venture vehicle to bid for the Vale project and, if successful, to build, own and operate the tug boats for Vale. In NTT, NSSB was instead to be the minority shareholder with only 20% of NTT’s equity. [77] It was also in these circumstances that Sudhir became involved. [78] Suresh and Timor were having difficulty securing the requisite financing. This can be seen from the contemporaneous emails exchanged between the parties. [79] Although Suresh maintained that Timor appealed to him to urgently procure a third party investor who could assist in the financing, Timor maintained that it was Suresh who proposed to look for a third party investor. In my view, this was not particularly important either way. [80] Sudhir was Suresh’s contact. According to Suresh he had known Sudhir for some five to six years and have had other business dealings with Sudhir. That it was Suresh who brought Sudhir in as an investor was not in dispute. [81] Sudhir’s principal role was to assist in securing the required financing. In this regard, he assisted and was said to be instrumental in securing financing from Export-Import Bank of Malaysia Berhad (‘EXIM Bank’) of a sum in excess of USD 50 million. 20 [82] With the financing in place, this then led to NTT entering into a Harbour Tugs Services Agreement (‘HTSA’) with Vale. [83] That Sudhir played a role and was involved with the joint venture partners, NSSB and AMSB, was not really in dispute. [84] It was the transfer of the 100,000 NTT shares to Sudhir by AMSB that triggered the dispute as to whether Sudhir, as an investor, was intended or entitled to hold equity in NTT or was he to merely have interests in NTT through AMSB. [85] According to Suresh the transfer of the 100,000 NTT shares was pursuant to Sudhir’s request sometime in November of 2015. In his supplementary witness statement Suresh stated: ‘The Plaintiff (Jaya Sudhir) had in November 2015 requested that I transfer the first tranche of 10% of AMSB’s shares in NTT to him to regularise his holdings and to make it formally clear that he was a shareholder. I had no issue with that, and after clearance from EXIM Bank, executed the same.’ [86] Sudhir, in his testimony, maintained that he was an investor and had played a major role in helping to secure financing for NTT from EXIM Bank. In his witness statement Sudhir stated that as a result: ‘In return, amongst others, it was agreed between Timor, Suresh and I that I would have a beneficial interest and ownership of shares in NTT. These beneficial interest and ownership of shares in NTT were to be held in the name of AMSB for me.’ 21 [87] In his witness statement Sudhir further testified that: ‘Discussions and negotiations were had between Suresh and I. As an investor, my primary role was to ensure financing for NTT. For this part, I had earmarked and suggested EXIM Bank as the principal financier. In return, I was agreeable to the offer of and wanted direct equity participation in NTT. As to how I came to be in the majority in relation to NSSB and AMSB was due to discussions and negotiations had and position taken by NSSB as to their equity participation.’ [88] Sudhir goes on to maintain that: ‘My equity participation in NTT would be at least 50% of the shareholdings.’ [89] Indeed, in relation to the financing by EXIM Bank, Sudhir himself maintained that he did not wish to have to provide any personal guarantee and ‘Hence, my participation in the equity of NTT was to be held in the name of AMSB initially.’ [90] Suresh in his witness statement denied Timor and NSSB’s assertion that Sudhir was never meant to be a shareholder in NTT. According to Suresh: ‘This is simply untrue. It was within the knowledge and contemplation of Timor, NSSB and AMSB from an early stage that Sudhir would be a participant in the joint venture, and that the joint venture would not have materialised without Sudhir’s involvement. Sudhir was involved in all negotiations with the Dwitasik Group through Timor after the Dwitasik Group had confirmed Sudhir’s participation. NSSB and Timor therefore always knew of Sudhir’s role and participation in the joint venture, and the Vale project could not have taken off without his involvement.’ 22 [91] Suresh’s explanation in his witness statement was not unequivocal. His explanation to my mind, was premised on knowledge that Sudhir ‘… would be a participant in the joint venture…’. That, in itself, did not disclose in what form Sudhir’s participation would take. [92] This was not something that Timor or NSSB had denied. Their case was that Sudhir was only meant to be a participant in NTT through AMSB and hence the parties to and the terms of the Shareholders Agreement are who and what they are, to the knowledge of both Suresh and Sudhir. [93] With disputed testimonies such as were presented in this case, it is often the admitted contemporaneous documentary evidence that aids in providing clarity and assistance to the Court. As was pointed out in Guan Teik Sdn Bhd v Haji Mohd Noor Bin Haji Yakob & Ors [2000] 4 MLJ 433 at p 439, in the often quoted passage of Siti Norma Yaakob JCA (as her Ladyship then was): ‘In cases where conflicting evidence are presented before a court, it is the duty of the court not only to weigh such evidence on a balance of probabilities but it is also incumbent upon the court to look at all the surrounding factors and to weigh and evaluate contemporaneous documents that may tend to establish the truth or otherwise of a given fact.’ See also Choon Shin Cheong v Suruhanjaya Syarikat Malaysia & Anor [2020] 5 MLJ 523 and Leisure Dotcom Sdn Bhd v Globesource Sdn Bhd [2015] MLJU 319. [94] On 27th September 2012, Timor emailed Suresh. This email was copied to several other individuals. In this email, Timor stated among other things that: 23 ‘One thought that has come to my mind is that this whole “Put Option” stalemate with the bank and Vale comes into play if Azimuth Ship management fails to perform. Could Azimuth bring another party to back it up by becoming an equity investor in NTT? We need to start thinking about contingency plans.’ (Emphasis added) [95] Suresh’s reply the following day, 28th September 2012, was long and displayed a degree of indignance at the suggestion that AMSB might fail to perform. However, in relation to the suggestion of an investor, Suresh stated: ‘I certainly can try get another 3rd party with a strong balance sheet or who can arrange the whole loan for the project to be involved but they will certainly dilute both our interests especially if they organized the loan back it and guarantee the lion’s share of the loan and rest assured you will receive no indemnity whatsoever from them.’ [96] That same day, 28th September 2012, Timor replied seeking to explain himself and stating, ‘Given that is the case, my question is: Can Azimuth find another party to support and back up ASM by taking equity position even though it means Dwitasik and potentially Azimuth would have a proportionately smaller equity share?’ This was as a result of difficulties encountered with the requirement of a financier, Commerce International Merchant Bankers (‘CIMB’). [97] Suresh replied, also on the same day 28th September 2012, stating inter alia: 24 ‘I now understand your e-mail more clearly and thank you for your positive e-mail. With your permission we can certainly start talking to another shareholder to come in and to provide the financial backing or to bring to the table the entire financing whichever way they want. The main point is how much is DWT wanting to dilute its shareholding to? Whoever who brings the Finance will want in my mind to at least have a barest minimum of 51% of the shares. Of course then this also progressively reduces both DWT and Azimuth’s capital outlay as well as proportionate guarantee and risk as well as the resultant gains & dividend. I also doubt they will give an indemnity in any form to DWT and treat the equity participation of all parties equally risk wise’ (Emphasis added) [98] In a further email from Suresh to Timor on 29th September 2012, Suresh stated among other things: ‘c) In order for us to start discussion with some other 3rd parties to come in and arrange the financing and take the lion’s share of risks etc. as discussed in our previous e-mail we must ourselves have some idea what we want to retain and under what terms and conditions. The bottom line the first question any 3rd party will ask is how much we want to dilute our shareholding to and what equity we want to put in and what sort of guarantees and terms we want. I think we as both DWT and Azimuth need to decide what we want or rather what is our risk appetite and also what is in terms of money the equity we want to put in. Then it is clear to the 3rd party what is expected of them EG – they arrange bank financing – they have to invest $X of money – they have to put up guarantee – they have to accept Vales & Shipyard terms etc. as we have so far agreed. I am certain they will look at all this.’ (Emphasis added) 25 [99] To this email, Timor replied on the same day 29th September 2012, stating: ‘Captain, let me give this some thought and confer with my team.’ [100] There then ensued emails between them, exploring the extent of interest a potential investor would want and what the parties would be willing to give up. [101] On 1st October 2012, Suresh sent an email to Timor stating among other things: ‘I would think the 3rd party investor who arranges the finance and also takes the lion’s share of guarantees will want a majority stake. Just a thought. a) DWT took 20% and Azimuth took 10% (total 30%) and we put in the necessary equity and also proportionate guarantee. 3rd party arranged finance and gave the 70% equity and guarantees.’ (Emphasis added) [102] In another email from Suresh to Timor dated 2nd October 2012, Suresh stated among other things: ‘As for NPMS that discussion should not even come up because we will invite 3rd party to take equity in NTT and not NPMS. That continues at 70/30% as per our original plan… I am also with you on that and we should not put that on the table at all with 3rd party. That remains our core business and what we started out to do.’ (Emphasis added) 26 [103] There was also an email from Timor to Suresh on 3rd October 2012 where, among other things, Timor stated: ‘I suggest you look for a third party to come in and take equity, I will find out at what level our shareholders feel comfortable.” [104] Thus, as at 3rd October 2012, it would seem that the parties were contemplating that the 3rd party investor would be investing directly in the equity of the joint venture, i.e. NTT. Those were the thoughts of Suresh and Timor, at that time, as to how an investor might participate. [105] However, on 8th October 2012, Suresh sent Timor an email. This email contained an attachment. Some 13 bullet points were set out in this attachment. Of relevance to the case were the following points which were set out in the attachment: ‘POINTS AS DISCUSSED FOR INVESTOR …  Investor will take up equity through Azimuth Marine Sdn Bhd. The rationale being then there will be no change in the contracting company with Vale – NTT Sdn Bhd and the shareholders remain the same – Dwitasik Marine Sdn Bhd and Azimuth Marine Sdn Bhd.  Captain Suresh to agree with the investor on their stake in Azimuth Marine Sdn Bhd and also their involvement and control of Azimuth Marine Sdn Bhd and obtain his own shareholders approval. …  All the above are for discussion only and the potential investor has not agreed to any of these terms etc.’ (Emphasis added) 27 [106] It therefore appears that at this point, there was a suggested change of approach upon the rationale given. The investor was to have interests in NTT through AMSB. This would mean that the investor would not be directly holding shares in NTT. [107] That Sudhir came into the negotiations thereafter was not an issue that was disputed. Timor and NSSB’s defence and reliance on what they called the ‘Actual Understanding’ was by itself an acknowledgement that Sudhir was the investor. Only issue is, at which level? In which entity? [108] Sudhir in his witness statement stated that, ‘The principal terms are set out in email correspondences as between Suresh and I, with the acknowledgement and agreement of Timor’. These principal terms were those pleaded in the Statement of Claim. [109] In so maintaining, Sudhir relied upon, among other things, an email from Suresh to Sudhir dated 16th October 2012. This email was sent to Sudhir after prior emails on its contents had been exchanged between Suresh and Timor. This email stated thus: ‘Dear Sudhir, Thank you for meeting me this morning. As discussed I have gone back to Dato Timur and for us to go forward and basis we get financing the following is as agreed by all 3 parties involved. a) Investors to agree to allocate 20% shares in NTT for a10% cash equity investment by Nautical Supreme (Dato Timur/DWITASIK Company). The balance 10% of the cash equity will be borne by investors. b) The 20% corporate guarantee for the 20% equity will be given by Nautical Supreme Sdn Bhd 28 c) No personal guarantees will be given from any party d) The projected cash follow for the entire project is to be agreed and we have a meeting with Dwitasik side tomorrow morning meeting at DWT office at 9.30 am. e) NTT and the Investors will not get involved in the projects to be pursued by NPMS and NPMS has no obligation to invite NTT or the other investors to participate in this. This is in respect of NPMS will pursue other business with Vale in the Port Services etc. f) USD100/day will be paid to NPMS by NTT if the NTT project gets off the ground. g) A shareholders agreement reflecting all the above is to be drafted and signed between Nautical Supreme & Azimuth Marine. The above is agreed and confirmed by Dato Timur and we want to use this as the agreed criteria to go forward with no more changes. Please confirm your agreement. Thanks/Suresh’ (Emphasis added) [110] Sudhir testified that he met with Suresh that morning on 16th October 2012 and that was when the principal terms were agreed and referred to in Suresh’s email. [111] Sudhir in his witness statement stated that, ‘This reference to 3 parties actually refers to NSSB, AMSB and I in terms of equity participation in NTT.’ [112] To my mind, it is significant that paragraph g) of Suresh’s email makes reference to a shareholders’ agreement that was to be signed, only between NSSB and AMSB, and it would reflect what was agreed to among the ‘3 parties’. This, to my mind, meant that the shareholders in NTT would only be NSSB and AMSB indicating that the investor’s interest would be 29 otherwise than as a shareholder of NTT but reflected or provided for in a shareholders’ agreement. [113] From the point of view of Timor, who was not present at the morning meeting between Suresh and Sudhir, he would have found that nothing was actually mentioned in Suresh’s email of equity participation in NTT by the investor. [114] In fact, prior to Suresh’s email of 16th October 2012, around noon, Suresh and Timor had emailed each other as to the email to be sent recording the terms of agreement with Sudhir. Thus, Timor was aware of and had agreed to the email that was subsequently sent by Suresh to Sudhir. [115] Timor subsequently emailed Suresh on the same day, 16th October 2012, stating: ‘Captain, please clarify that the shareholders agreement has to be signed before we proceed forth with NTT. It is better that the clarification come from you instead of me bringing it up. Thanks. Timor (please note spelling of my name)’ [116] On 28th October 2012, Timor emails Johari stating: ‘Dear Joe, I am pleased to hear that you have accepted to join the team and serve as the chairman of NTT. The email below [the email of 16th October 2012 from Suresh to Sudhir and Timor] provides a summary of the agreement between Dwitasik and Azimuth. Please let me know if you have any questions or if you want to meet sometime this week. I am off to the States on Friday Nov 2 and will return to Malaysia on Nov 28. Best, Timor’ (Emphasis added) 30 [117] This email to Johari was also consistent with the fact that the terms recorded in Suresh’s email to Sudhir and Timor of 16th October 2012 was with the agreement of Timor. [118] The terms in Suresh’s email of 16th October 2012 was however not the Collateral Understanding that was pleaded. It also contained no suggestion of it. [119] What seems clear from that email was that the joint venture parties would be NSSB and AMSB and a shareholders’ agreement would be entered into between them. This shareholders’ agreement would in turn reflect what had been agreed to among Sudhir, NSSB and AMSB. [120] In his witness statement Sudhir reiterated the Collateral Understanding pleaded and gave six reasons why he maintained that it existed. [121] First was that Suresh had approached him with representation that Suresh had the blessings of Timor. Second were the contents of Suresh’s email of 16th October 2012 which had been agreed to by Timor. Third was what he said he discovered subsequently from AMSB’s solicitors. It was something that arose from what was discussed as terms of the intended shareholders’ agreement at a meeting on 14th January 2013 which Timor had attended. Fourth was his meeting with Timor ‘subsequent to 16.10.2012 or thereabouts’. Fifth, the fact that he had performed his obligations as the investor. Sixth, Timor and NSSB’s conduct in repeatedly recognising and acknowledging his rights in terms 31 of his beneficial interests and ownership in part of 80% of the shares in NTT. [122] The first and fifth reasons given were not, in my view, evidence of the existence of the alleged Collateral Understanding. So too the second reason, as there was no mention in Suresh’s email of any direct participation by Sudhir as a shareholder in NTT. [123] As for the sixth reason, it was never really disputed that Sudhir was an investor or that he had assisted to enable the joint venture and its objective of participating in Vale’s project to materialise. Sudhir’s role in securing financing from EXIM Bank was a significant contribution at the time when it was pressingly needed. [124] Sudhir was often consulted and he participated in major operational decisions involving NTT and the Vale project, even when he was not a director or an alternate director. He was invited to attend the first Board meeting of NTT on 18th December 2012 and was also consulted on various draft agreements. In Sudhir’s own words, ‘I was circulated the drafts of the HTSA, Tripartite Agreement, Shipyard Agreement and Shareholders Agreement.’ [125] These however, do not bear on whether there was in fact in existence the alleged Collateral Understanding although they are consistent with the fact that Sudhir was the important investor and had helped the parties with the joint venture. 32 [126] Despite his close participation in the affairs of NTT, one might ask why was Sudhir not appointed a director earlier? NTT’s inaugural Board of Directors meeting was held on 18th December 2012. Sudhir, although appointed an alternate director to Latiff earlier, was only appointed a director on 2nd November 2016. This was some four years after the first Board of Directors meeting and after the Shareholders Agreement had been terminated. The answer might be that he was not intended to be a direct shareholder in NTT. However, one need not be a shareholder to be appointed a director unless, of course, it was because of the terms of the Shareholders Agreement. [127] The third reason given was what Sudhir said he had subsequently discovered from AMSB’s solicitors. On 14th January 2013, Suresh and Timor met with others to discuss matters left outstanding in the yet to be signed shareholders’ agreement. Sudhir stated in his witness statement that, ‘…NSSB also knew of my interest in NTT and had confirmed at a meeting on 14.1.2013 that any transfer of the 80% NTT Shares from AMSB to me would not require any consent from NSSB’. [128] Timor was said to have been present at that meeting and reference was made to an email from NSSB’s solicitors to AMSB’s solicitors dated 14th January 2013. [129] Attached to this email was a draft shareholders’ agreement. There were various amendments on the draft. Sudhir in his witness statement referred specifically to this draft. The only relevant provision in this draft would be clause 20.5, under clause 20 with the heading ‘SPECIAL COVENANT’. 33 [130] Clause 20.5 of this draft shareholders’ agreement appeared as follows: ’20.5 The Parties hereby undertake and covenant to each other that so long as the Parties hold any shares or interest in the equity of the Company and provided any intended divestment of their equity is to an unknown person/investor, it shall not without the prior consent of the other Party register or permit any change in its existing Shareholders and/or composition of the board of directors or officers, members and board members and/or management or officers, members and board members.’ (Emphasis added in bold) In the draft and to the right of this clause was a ‘box’. In it were these words: ‘Comment [R1]: As a compromise and as discussed at the meeting on 14/1/13, parties are agreeing that so long as the divestment of equity is not to anyone other than Jaya Sudhir there is no need for consent.’ [131] However, in the Shareholders Agreement that was executed by the parties, clause 20.5 had been further amended to read as follows: ‘20.5 The Parties hereby undertake and covenant to each other that so long as the Parties hold any shares or interest in the equity of the Company, it shall not without the prior written consent of the other Party (which consent shall not be unreasonably withheld) change any of its existing shareholders. For the avoidance of doubt, this clause shall not apply for the first change of shareholders of AZIMUTH to the parties made known (including their nominees and/or parties controlled by such parties) to NSSB in their letter dated 5 February 2013 which NSSB hereto expressly acknowledges AZIMUTH shall inform NSSB when the first change of shareholders is made. The Parties hereto covenant and undertake to each other that in exercising their rights to grant consent herein, the Parties shall at all times act bona fide and expeditiously and not withhold consent wherein the proposed 34 transfer is synergistic to the Business and/or in the best interest of the Company.’ (Emphasis added) Under the Shareholders Agreement, the term ‘Parties’ was defined to mean ‘AZIMUTH and NSSB’. NTT itself was not within the definition of ‘Parties’. ‘AZIMUTH’ was of course AMSB. [132] AMSB’s letter dated 5th February 2013 referred to in clause 20.5 of the Shareholders Agreement read as follows: ‘Dear Dato Seri, RE: DIVESTMENT OF SHAREHOLDING IIN AZIMUTH MARINE SDN BHD (Company No 961825-A) With reference to the Joint Venture Agreement to be signed between Nautical Supreme Sdn Bhd (Company No 989385-H) (NSSB) and Azimuth Marine Sdn Bhd (Company No 961825-A) (AMSB) this is to inform NSSB that the current shareholding in AMSB held by Kingfisher Shipping Sdn Bhd (Company No 723070-A) may be divested to: a) Dato Ahmad Johari bin Abdul Razak and/or his nominees or nominated company b) Mr Jaya Sudhir and/or his nominees or nominated company AMSB will inform NSSB if and when this is completed. Thanking you, 35 Yours sincerely, Azimuth Marine Sdn Bhd ----------sgd---------- Captain Suresh E Abshegam Managing Director’ (Emphasis added) [133] In so far as clause 20.5 is concerned, either in the form as per the draft referred to by Sudhir or in its final form appearing in the Shareholders Agreement, they pertained to a change of shareholders in either AMSB or NSSB, not NTT. [134] In addition, in its final form, clause 20.5 made specific reference to AMSB’s letter of 5th February 2013 and this disclosed the possibility of shares in AMSB being divested to Johari and Sudhir. [135] In respect of all these negotiations, discussions and drafts, Suresh was involved and it was also Suresh who put pen to paper in signing the Shareholders Agreement on behalf of AMSB. [136] The fourth reason given was based on a meeting between Sudhir and Timor, subsequent to 16th October 2012 or thereabouts. What Sudhir stated in his witness statement was this: 36 ‘Four, I had met and discussed with Timor subsequent to 16.10.2012 or thereabouts. At all times, Timor was acting on behalf of NSSB and knew of the terms of my participation as investor/white knight in NTT including the Collateral Understanding. I also state that Timor subsequent to my entry was happy and relieved in my participation. Representations and assurances were made by Timor, which I relied upon, that NSSB would comply with the terms of the Collateral Understanding and that NSSB would not breach the terms, spirit or object of the Collateral Understanding.’ (Emphasis added) [137] Timor denied the allegation that he knew about the alleged Collateral Understanding or that representations and assurances were made by him that NSSB would comply with the terms of any alleged Collateral Understanding. This fourth issue then fell into the category of a direct conflict of oral testimonies, which would require that they be tested against the totality of the evidence led. [138] Sudhir referred to two letters. One of them was dated 7th December 2012 which he signed and said he passed to ‘… Suresh for him to do the necessary.’ This letter was addressed to NSSB stating as follows: ‘Dear Sirs, RE: CONFIRMATION OF EQUITY PARTICIPATION IN NAUTILUS TUG & TOWAGE SDN BHD (Company No. 1016194-T) (the Company) This serves to confirm that I am desirous of participating in the equity of the Company either in my personal capacity or through any entities in which I have controlling interest or nominate. In this regard, I shall be negotiating directly with AZIMUTH MARINE SDN BHD on the exact scope, terms and conditions of my participation. 37 Yours faithfully, ……………….. Jaya Sudhir 7/12/12’ (Emphasis added) [139] The other was the letter dated 5th February 2013 from AMSB to Timor, at NSSB, referred to above. As mentioned above, that letter in fact records the possibility of Sudhir holding shares in AMSB, not NTT. That letter therefore does not assist in establishing any understanding that Sudhir is to, or may, hold shares in NTT, regardless of what may be provided in the Shareholders Agreement. [140] Sudhir’s letter dated 7th December 2012, upon examination, was merely an expression of what he was desirous of i.e. what he wanted. There was nothing to indicate that there was any agreement concluded. It also seems to be something that was being negotiated with AMSB. This letter does not disclose any concluded agreement. [141] In fact, this letter signed by Sudhir was found not to be in accordance with what had been agreed and a new draft letter was prepared for Sudhir. There was in evidence an email from NSSB’s solicitors to AMSB’s solicitors dated 12th December 2012 stating in paragraph 3 as follows: 38 ‘Dear Chithra,

… …

Letter from investor – whilst we appreciate that the said letter has been signed we are of the view that the said letter does not capture the essence of what is provided in the shareholders agreement and what was agreed during the meeting at our office. In view thereof we have taken the liberty of preparing a draft for your consideration and comment/approval.’ (Emphasis added) [142] The draft that was prepared for the investor read as follows: ‘RESAA 11/12/12: Draft of letter to be issued by investor and Azimuth Marine Letter to be on Azimuth Marine Sdn Bhd’s letterhead and to be jointly issued with Jaya Sudhir. Address to NSSB Further to the Shareholders Agreement dated ………… entered into between you and us, we hereby declare and confirm that Jaya Sudhir (IC No./Passport No. …….) (hereinafter called the “Investor”) of ……………. is the investor who is desirous of participating in the equity of the Company as provided in Clause …….of the aforesaid Shareholders Agreement vide the divestment of our ……..% equity interest in the JVC (“Azimuth’s Share Portion”). In consideration of NSSB agreeing to Azimuth Marine’s divestment of Azimuth’s Share Portion to Jaya Sudhir, Jaya Sudhir hereby covenants and undertakes that, subject to the transfer of Azimuth’s Share Portion to him, he shall enter into and execute with the existing shareholders of the JVC a deed of ratification and adherence to the terms of the aforesaid Shareholders Agreement. 39 Executed by Azimuth Marine and Jaya Sudhir __________________________________________________ Confirmation by NSSB I, Dato Seri Timor Shah Rafiq (Passport No. 483746192) being duly authorised by NSSB, hereby confirm our irrevocable and unconditional consent to Jaya Sudhir’s participation in the Company as herein provided subject to the terms of the Shareholders Agreement. Signed by DST’ (Emphasis added) [143] This draft letter, not signed, clearly contemplates the investor, Sudhir, holding shares in NTT to be derived from the shares held in NTT by AMSB. It also refers to a clause in an intended shareholders’ agreement to this effect. Together with this draft letter and also attached to NSSB’s solicitor’s email of 12th December 2012, was a draft of the intended shareholders’ agreement. This draft shareholders’ agreement contained 2 clauses which are pertinent. [144] The first was a clause 4.5 which catered for the investor to participate in the equity of the NTT. This clause provided as follows: ‘4.5 The Parties hereto acknowledge that AZIMUTH has prior to the execution of this Agreement intimated in writing to NSSB the identity of the investor who is to participate in the equity of the JVC and the Purpose (“the Investor”). NSSB hereto confirms its irrevocable and unconditional consent that NSSB has no objection to the participation of the Investor in the JVC and the Purpose as intimated to them in writing provided that any participation of the Investor shall be vide the divestment of AZIMUTH’s equity held in the JVC and not by the issuance of any new share in the equity of the JVC and further provided that such Investor agrees to and 40 executes a deed of ratification and accession to adhere to all the terms of this Agreement in accordance with Clause 9.2 hereof. The provisions of Clause 9.1 shall not be applicable for the transfer of AZIMUTH’s share to the Investor aforesaid. NSSB hereto undertakes and covenants to AZIMUTH to exercise its voting powers and/or cause its nominee Directors to exercise their voting powers to give effect to the transfer aforesaid.’ (Emphasis added) [145] The second was a clause 10.1.3 which catered for the investor’s participation on the Board of NTT. Clause 10.1 provided as follows: ’10.

10.1 Unless otherwise unanimously agreed to be varied by the Shareholders in writing the Board of the JVC shall consist of six (6) Directors (including the Chairman) of which four (4) person shall be nominated by AZIMUTH and two (2) persons shall be nominated by NSSB.

10.1.1 The right of AZIMUTH and NSSB to nominate 4:2 Directors to the Board is afforded to the Parties holding the equity in the ratio as stated in Clause 4.1 above.

10.1.2 In the event the shareholding of any of the Parties hereto in the JVC falls below 20% the relevant Party shall only be entitled to nominate one (1) director on the Board of the JVC and shall cause the resignation of its other Director(s) from the Board if more than one (1).

10.1.3 In the event that AZIMUTH shall divest part of its equity held in the JVC to the Investor pursuant to Clause 4.5 herein AZIMUTH and the Investor shall collectively be entitled to nominate up to the maximum of four (4) directors only as provided in Clause 10.1.’ (Emphasis added) 41 [146] Thus, at this point in time, it was contemplated that the investor would hold shares in NTT and NSSB’s consent to that effect is given in clause 4.5 of the draft shareholders’ agreement. The investor’s participation on the Board of NTT was also specifically catered for. [147] However, three days thereafter, on 15th December 2012, AMSB’s solicitors wrote to NSSB’s solicitors informing of new developments and a change of position. This email was also copied to one ‘Clarissa NPMS’ and Timor. The material part of this email, which was copied to Suresh and Timor, stated as follows: ‘Dear Ms Ang/Jeyanthi, Further to the comments that were sent across yesterday, we have spotted a few more typos and have amended further the agreement in line with new developments such as Clause 4.5 on the new investor who will take-up shares at Azimuth Marine Level and not at NTT. We have highlighted the main revisions in gray. …

…

Clause on investor deleted. Correspondingly, Clause 10.1.3 deleted. … NPMS

… … We are of the view that the agreements are close to being finalized save for Clause 12.2 and 17.2 that have to be agreed upon. If we could just sort these 2 clauses asap, the agreements should be ready to sign on Monday. 42 Further, we would appreciate your comments on the AMSB draft letter. The draft investor letter would no longer be required.’ (Emphasis added) [148] It is of course also significant that this letter was from AMSB’s solicitors and not from NSSB’s solicitors. [149] As it turns out, it would seem that the ‘draft investor letter’ would be the draft attached to NSSB’s solicitor’s email to AMSB’s solicitors dated 12th December 2012, referred to above. There does not appear to be any other draft letter involving the investor save for the earlier letter signed by Sudhir dated 7th December 2012, which was superseded by the draft sent on 12th December 2012. [150] Dato’ Ang Saik Hoon, a partner in the legal firm of Messrs Raja Eleena Siew Ang & Associates who acted for NSSB, was called as a witness by NSSB. She testified to the email sent by AMSB’s solicitor of 15th December 2012. She also testified that following that email, clause 4.5 in the draft shareholders’ agreement was deleted and no longer appeared in the Shareholders Agreement. [151] In addition, in response to some comments by Timor on the draft shareholders’ agreement, Suresh sent an email to Timor dated 18th December 2012 (which the Court was advised should bear the date 19th December 2012 based on time difference between the US and Malaysia), where Suresh made the following comment: 43 ‘NEVER DISCUSSED and again I can’t understand how this has come in when from the very beginning I have said Azimuth Marine will change shareholders directors etc as we go along. Only NTT no change. So very confused and I don’t want a clause which requires NSSB consent. I have declared this from day one and the shareholder also met you yesterday at BOD.’ [152] On 31st January 2013, Suresh sent Timor an email. This email dealt with clause 20.5 in the draft shareholders’ agreement and Suresh’s objection to AMSB having to obtain consent to change its shareholding. In voicing his objections, Suresh stated in this email: ‘Dear Dato, I have discussed this on our end and we cannot accept this clause as there will be changes in Azimuth Marine and we do not want this to be encumbered. If you recollect earlier we agreed that we will not make any changes of Azimuth Marine stake in NTT, it will remain 80%. However now to also restrict us and obtain the other parties permission in Azimuth marine will severely restrict us. I think you will understand our position and as you are well aware we have revealed who the shareholders may be in Azimuth Marine and currently Kingfisher Shipping Corporation Sdn Bhd holds the entire 80% and to then obtain written position (sic) to divest that is something the investors cannot give me permission to agree to.’ (Emphasis added) [153] Of relevance in these emails, was Suresh’s position that change of shareholding would be at AMSB level, but there would be no change of AMSB’s shareholding in NTT. These statements by Suresh seem consistent with the assertion that the investor, Sudhir, was not intended to hold shares in NTT but was to do so only through AMSB. 44 [154] In relation to the emails exchanged and the various statements made by Suresh referred to, it has to be borne in mind that Suresh was the person through whom Sudhir had communicated with Timor. Whatever Suresh had stated in his emails relating to the investor or Sudhir holding shares in NTT, it would follow that such would probably have been communicated to and understood by Sudhir. [155] Ultimately, nothing in the Shareholders Agreement catered for any anticipated or contemplated transfer of shares in NTT to Sudhir or any investor or third party, as of right, without requiring compliance with the pre-emption rights provisions in the Shareholders Agreement. [156] It is also to be noted that there was no claim by AMSB to rectify the Shareholders Agreement to reflect any agreement or provision that was erroneously omitted, or erroneously included, in the Shareholders Agreement. [157] In addition, the parties to the Shareholders Agreement had agreed to an entire agreement clause found in clause 29, which provided as follows: ’29. ENTIRE AGREEMENT

29.1 This Agreement embodies all the terms and conditions agreed upon between the parties hereto as to the subject matter of this Agreement and supersedes and cancels in all respects all previous agreements and undertakings, if any, between the parties hereto with respect to the subject matter hereof, whether such be written or oral.’ This clause would of course bind AMSB, NSSB and NTT but not Sudhir who was not a party to the Shareholders Agreement. 45 [158] It was on 15th November 2015 that Suresh emailed the directors of NTT to inform them of Sudhir’s request for NTT shares. In this email Suresh stated: ‘Dear BOD, Please note that as has been agreed previously agreed Mr Jaya Sudhir has requested a first tranche of 10% of NTT shares held by Azimuth Marine Sdn Bhd to his personal name. He reserves all his rights in this matter. We will do the necessary to effect this. This is for information of the Board. Thanking you Warmest Regards Captain Suresh E Abishegam’ (Emphasis added) [159] The following day on 16th November 2015, Timor emailed Suresh asking, ‘… does your email mean that Sudhir wants to have 10% of the shares that Azimuth Marine has be transferred to his personal name? Would appreciate your elaboration.’ [160] Suresh however, did not reply this email from Timor but, instead, forwarded Timor’s email to Sudhir and one Azian Aziz stating of Timor’s query, rather unflatteringly, ‘Is there a DUMBER question?’ [161] Timor’s query as to what may seem obvious, was to my mind, consistent with the reaction of a person who wanted to be certain of what was being sought. This was probably because such an intended transfer would give rise to consequences under the Shareholders Agreement including the triggering of the pre-emption rights provisions. 46 [162] Suresh testified, taking the literal position that there were no objections from any of the Board members of NTT, including Timor and Wan. That there were no objections from the other members of NTT’s Board of Directors was perhaps not of great import as they were, after all, nominee directors of AMSB. [163] On 30th November 2015, in a letter from AMSB to the financier EXIM Bank, signed by Suresh, he wrote: ‘Dear Sir/Ms, RE: CHANGE IN SHAREHOLDERS OF NAUTILUS TUG & TOWAGE SDN BHD (“CUSTOMER”) We kindly refer to the above.

Change in Shareholders of the Borrower As you are aware, the current equity of the Customer is held in the proportion of 80:20 Azimuth Marine Sdn Bhd (“AMSB”): Nautical Supreme Sdn Bhd (“NSSB”). AMSB is desirous of divesting 10% of the 80% held by AMSB to a synergistic partner, Mr Jaya Sudhir (“New Shareholder”). This divestment has been in the shareholders contemplation since incorporation of the Customer and has been expressly provided for in the shareholders agreement executed by the parties dated 15th March 2013 where in NSSB has consented to the said divestment by AMSB.

….’ (Emphasis added) [164] The statement about the divestment having been in the shareholders contemplation since the incorporation of NTT was clearly inconsistent with the contents of Suresh’s earlier emails to Timor. In 47 addition, contrary to what was asserted, no provision exists in the Shareholders Agreement whereby consent had been given by NSSB to a divestment of shares in NTT to Sudhir. [165] In another letter from AMSB to EXIM Bank signed by Suresh and dated 18th April 2016, it was stated inter alia that: ‘(2) By way of the Bank’s letter dated 4 December 2015 … the Bank granted consent to AMSB for the transfer of one hundred thousand (100,000) ordinary shares of AMSB to JAYA SUDHIR A/L JAYARAM … (hereinafter referred to as “JS”).

The remaining shareholder of the Customer, Nautical Supreme Sdn Bhd (Company No. 989385-H) had waived its pre-emption rights and granted its consent for the transfer of AMSB’s shares to JS by virtue of Clause 20.5 of the shareholders agreement dated 15th March 2013. (Emphasis added) [166] A Deed of Ratification and Accession was executed by Sudhir, AMSB and NTT. However, NSSB did not execute this document. In the recital to this document, and in paragraph (B), it was stated as follows: ‘(B)

It stated, among other things, as follows: ‘Dear Timor, … More importantly perhaps is to lay out the clear roadmap we discussed.

JS to finalise the transfer of the 10% of NTT directly in to his name. 51

JS and JR to secure the 28.6% each shareholding in Azimuth Marine Sdn Bhd (giving equivalent of 20% each in NTT shares).

Once share transfers have been completed and change of directors have been approved then Captain Suresh and Azian can be removed from their respective roles at NTT (subject to unanimous approval of the shareholders with regards to their replacement). Further staff appointments will be needed and this is to be discussed in addition to new offices and service contracts. This will eliminate the perceived “conflict of interest”.

Concurrent with 1-3 above a legal analysis of the various contract needs to be done to evaluate whether the ship management contract currently in place can be terminated and a suitable replacement found acceptable to all parties including Vale and NTT. … Many thanks and kind regards Paul.’ (Emphasis added) [178] Timor received this email but made no comment. There was then another meeting between Sudhir and Timor and their advisers at the premises of NSSB’s solicitors on 28th January 2016. Following this meeting Timor sent an email to Sudhir the following day, 29th January

In this email Timor thanked Sudhir for a ‘very productive meeting yesterday’ stating that he was, ‘very happy to hear of your personal commitment to improve on the corporate governance of NTT’. Of significance was the following passage in this email: ‘So far, as you know, I have been frustrated by the lack of cooperation from management in terms of getting information, without which I am not able to properly discharge my duties as a director of the company. 52 I fully appreciate the time period you need to secure control of Azimuth Marine Sdn Bhd (“Azimuth”). In anticipation of you securing control of Azimuth by Chinese New Year, I have taken the initiative to convene a Board Meeting of NTT next week with the view to secure all the resolutions that you had proposed to me and Dato’ Wan yesterday. Once you have secured control of Azimuth, we can then take steps to replace the company auditor. This I believe will require shareholders’ approval and can’t be undertaken via a Board Resolution alone. I look forward to implementing all your proposals. I want to assure you that you have our fullest support.’ (Emphasis added) [179] This prompted a reply by Sudhir seeking to set on record his version of what took place at the meeting of 28th January 2016. While there were differences in emphasis as to what took place, what was significant in this email of Sudhir, dated 1st February 2016 to Timor, were the following passages: ‘Dear Dato Sri Timor, With reference to your email dated 29th January, I would like to clarify the following that took place in the meeting.

…

I started the meeting by saying that we shared some concern on the Corporate governance of NTT.

I also gave the history to miss Ang as to how we got involved and that Most of the discussions were had between Dato Sri Timor and Capt. Suresh.

I than explained to Miss Ang the ownership structure of Azimuth Marine Sdn Bhd as the 80percent shareholder of NTT. She 53 understood it but Said that the matter didn’t concern them as they have no interest of azimuth Marine. I told all of you all that I needed to physically get the shares in our Name as it was in trust with Capt. Suresh or his nominated companies. I also said that I was in the process of doing it, and when asked how long It would take I replied by saying am pushing before CNY but depends on Legal issues n procedures. I clearly mentioned that I needed to get this Change done in order to make changes in NTT. …

There was some concern about how Capt. Suresh would behave I assured all of you that I will do my best as we have other matters with him and he is like an employee of ours. … Having said the above why Dato Sri Timor did you send a message to the cosec requesting for a board meeting and to make fundamental changes thru board resolutions without consulting us. To even add, you even put my name as an alternate director. That was something I told you all in confidence. If Capt suresh knows what we are doing it endangers my issue in azimuth marine level. After my telecon with you on Saturday you informed me that your shareholders have a different approach towards this and would still go on persuing (sic) what you were doing. In view of this I suggest we have another meeting to clear the direction and to the approach. As what you are doing now is indirectly harming our interest in NTT. If it was a genuine mistake by you that let us see how to handle it. We will not be attending the board meeting as you know. I would like to reiterate that whatever we are doing or undertaking it is in the interest of all the shareholders of NTT and also to protect the name of NTT. Am sure we will be able to overcome this impasse and move forward positively.’ (Emphasis added) 54 [180] This email from Sudhir himself, indicated that his interest in NTT was through AMSB. By stating in paragraph 4 that he needed to ‘physically get the shares in our Name’, Sudhir was obviously referring to shares in AMSB rather than shares in NTT. This is because by then, in February 2016, the Shareholders Agreement had been executed and Sudhir would have been well aware that the only shareholders were AMSB and NSSB. Neither Suresh or any other nominee companies of his, other than AMSB, had shares in NTT. Sudhir was, in my view, referring to shares in AMSB. It would seem the idea, at that time, was for Sudhir to take control of AMSB and through it, have control of NTT and its board, in order to ‘make changes in NTT.’ [181] In reply to Sudhir’s email of 1st February 2016, Timor stated among other things: ‘When you mentioned that you would be seeking legal and accounting advice concerning NTT, I can only assume that you are undertaking that process for your personal benefit as part and parcel of your ongoing efforts to regularize your shareholding in Azimuth Marine with Captain.’ (Emphasis added) [182] From this email, as far as Timor was concerned, it was quite clear to him that Sudhir’s beneficial interest was in the shares in AMSB. [183] In reply to Timor’s email, also on 3rd February 2016, Sudhir stated in one paragraph: ‘With regards to your disappointment as to my comment on we are not attending and further reiterating that I am not a member of the board, I take offense as 55 you already know I am the beneficial owner and that the board members were appointed after I was consulted. As you also know that whatever we are doing is in the best interest of NTT. Thus let’s keep things simple and don’t complicate statements or positions for we know who are the real shareholders on both sides.’ (Emphasis added) [184] Sudhir, in this reply, did not correct Timor’s comment about Sudhir wanting to regularise his shareholdings in AMSB, which suggests that Sudhir’s beneficial interest was indeed in AMSB. In addition, in his reply to Timor quoted above, Sudhir referred to the ‘real shareholders on both sides’. To my mind ‘both sides’ was a reference to the two shareholders in NTT, i.e. AMSB and NSSB and Sudhir was referring to the real shareholders in these two companies. [185] Significantly, there was no mention of any agreement among the parties that Sudhir would be entitled as of right to hold shares directly in NTT without the need to comply with the pre-emption rights provisions under the Shareholders Agreement. [186] Finally, according to Suresh’s testimony the transfer form for the 100,000 NTT shares was executed on or about the 15th of December 2015 and Sudhir was registered as a shareholder of NTT on 1st April

Thus, the transfer of the 100,000 NTT shares to Sudhir was perfected. 56 Was there a Collateral Understanding as alleged? [187] As mentioned at the outset, counsel for the parties had led much in evidence, both oral and documentary. Even points with very little relevance if at all, were explored in much detail. The evidence even went into what appears to be some serious disagreements between Suresh and Timor. [188] However, as is sometimes the case, one must be reminded not to miss the wood for the trees. Sudhir’s case was predicated on the existence of what was pleaded as the Collateral Understanding. It was upon this alleged Collateral Understanding that was mounted Sudhir’s various causes of action. [189] I am conscious of the fact that there are pending proceedings between the disputing parties. In particular there is now pending, in an arbitration between NSSB and AMSB and NTT, disputes relating to the Shareholders Agreement. Hence, I am mindful that I do not unnecessarily tread on or decide any issue that is uncalled for in this suit. [190] To start with, what was pleaded was termed a Collateral Understanding. However, as a pleading point, nowhere in the statement of claim was it pleaded that the Collateral Understanding was an enforceable contract; that it was intended to create legal relations between the parties or the consideration provided for it. Although an intention to create legal relations is often presumed in respect of agreements in a commercial setting (see Deutsche Bank (M) Bhd v MBf Holdings Bhd & 57 Anor [2015] 6 MLJ 310 at paragraph 47), however the very terminology pleaded in this case was merely that of an ‘understanding’. [191] In National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300, the Federal Court held that consideration for an agreement or contract need not be specifically pleaded. In so doing, the Federal Court did not agree with the learned authors in paragraph 18/12/7 of the then edition of the Supreme Court Practice, the ‘White Book’, which stated: ‘Consideration for any agreement not under seal is a material fact and must be pleaded, except in the case of negotiable instruments where it is presumed.’ [192] Seah FJ delivering the judgment of the Federal Court held that: ‘A "consideration" is defined by section 2(d) of the Contracts Act 1950 as "when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise." And "every promise and every set of promises, forming the consideration for each other, is an agreement" [see section 2(e)]. An agreement enforceable by law is a contract [section 2(h)]. In our opinion, since "consideration", "agreement" or "contract" have been statutory [sic] defined they cannot be regarded as material facts and therefore need not be specifically pleaded in the statement of claim under Order 18 Rule 7(1). For the above reasons, we are unable to agree with the observation of the learned Judge.’ (Emphasis added) [193] While it was pleaded in paragraphs 20 and 21 of the Statement of Claim that the principal terms for Sudhir’s participation as an investor was 58 ‘…agreed by DST [Timor] for and on behalf of NSSB’, no ‘agreement’ as such was pleaded in respect of the Collateral Understanding. What was pleaded in paragraph 23 of the Statement of claim was that Sudhir’s participation in NTT ‘…was at all times predicated on a collateral understanding and/or an implied condition between the Plaintiff, NSSB and AMSB…”. [194] Within the alleged Collateral Understanding however, it was pleaded in paragraph 23.3 that, ‘NSSB agreed to the Plaintiff’s participation in the equity of NTT and no further consent was required for the divestment of any part of the 80% NTT Shares, either directly or indirectly, to the Plaintiff.’ Yet it is quite plainly the case that not all ‘agreements’ are enforceable contracts. [195] Learned counsel for Sudhir in his closing submissions maintained that, ‘… the legal effect of the Collateral Understanding will depend on this Honourable Court’s findings of fact and not on nomenclature.’ [196] This, with respect, is somewhat missing the point. The Court will have to make findings based on the pleadings. As is quite trite, parties are bound by their pleadings. If what is pleaded is merely an ‘understanding’ and not a binding contract, even if there is a finding that there exists the alleged understanding, the claim would still come to naught. Unless, the so-called understanding is legally binding, the claim must fail. [197] In JH Milner & Soons v Percy Bilton Ltd [1996] 2 All ER 894 at pp 88-89, Fenton-Atkinson J stated: 59 ‘Mr Lyon deliberately uses the word “understanding”, which, whatever it may mean, means something quite different from a binding legal contract and I think that, at the most, these letters achieved something in the nature of a gentleman's agreement, or extracted from Mr Bilton confirmation of a present intention on his part to instruct Mr Lyon to do this legal work as and when it arose. To seek to hold the defendants to more than that is, in my view, not legally sound, and it is quite unnecessary to consider whether it would be ethically laudable or desirable to do so.’ (Emphasis added) [198] In fact, as learned counsel for Timor and NSSB pointed out, Suresh himself in his testimony had used the term ‘gentleman’s agreement’ to describe the compromise arrived at among the parties, upon which the pleaded Collateral Understanding was based. [199] In Bank of Baroda Ltd v Punjab National Bank Ltd & Ors [1944] 2 All ER 83 at p 91, Lord Wright observed: ‘From the point of view of a court of law, a gentlemen's agreement or honourable obligation, however important in business, has no validity.’ See a similar observation by Wong Kian Kheong JC (as his Lordship then was), in De Tebrau Makmur Sdn Bhd & Anor v Bank Kerjasama Rakyat Malaysia Bhd [2017] MLJU 201 at p 33 para 56. [200] Notwithstanding the foregoing considerations, and without derogating from its importance as a matter of settled adjectival law in relation to pleadings, did the Collateral Understanding exist as alleged? 60 [201] To start with, Suresh’s pleading of the alleged Collateral Understanding was somewhat vague and lacked particulars of precisely when, where or the particular event or events at which the alleged Collateral Understanding came about or was concluded. [202] In addition, there was no written record of this Collateral Understanding. While there was written evidence of what was termed as the principal agreement, but their content did not disclose any agreement of Sudhir holding shares, directly, in NTT. [203] That Sudhir would be entitled to participate in the equity of NTT would seem to me to be important enough to be recorded in some form. Afterall, it would represent his entitlement as an investor. But that was not the case, despite the fact that Sudhir was an experienced businessman with business interests in various countries. Although there is no requirement to do so in law, nevertheless, one would have expected someone of Sudhir’s experience to require some form of record of what was understood or agreed upon if there was in fact such an understanding or agreement. [204] Sudhir maintained that he did not want to be directly involved in the Shareholders Agreement as he did not want to have to execute any guarantee. Even so, this did not preclude him from documenting the Collateral Understanding or ensuring that the terms of the Shareholders Agreement would not pose an impediment to him ultimately participating in the equity of NTT. 61 [205] If the Collateral Understanding existed, one would also expect that it would have been referred to in some correspondence or document, particularly since at one point in time Sudhir’s participation in NTT’s equity was, in fact, considered. This was apparent in some of the earlier emails referred to. [206] In mid-December 2012, there were clauses 4.5 and 10.1.3 found in a draft shareholders’ agreement which would have catered to what Sudhir alleged was part of the Collateral Understanding. However, those clauses were expressly removed and were no longer to be found in the Shareholders Agreement. Their removal was a matter made known by AMSB’s solicitors. [207] The fact that Sudhir might hold shares in NTT was discussed. However, the clauses that would have facilitated it were specifically removed. This, coupled with the existing clause 20.5 in the Shareholders Agreement read with AMSB’s letter of 5th February 2013 that Sudhir may hold shares in AMSB, speaks volumes. Sudhir holding shares in NTT might have been considered, but it was subsequently and deliberately excluded. [208] AMSB’s letter of 5th February 2013 referred to in clause 20.5 of the Shareholders Agreement makes it quite clear that Sudhir may be transferred shares in AMSB. Nothing was mentioned of shares to be held by Sudhir in NTT. What was embodied in clause 20.5 was also consistent with what Timor and NSSB had maintained was the actual understanding. 62 [209] The fact that Sudhir was invited to its first Board of Director’s meeting and was actively involved in the affairs of NTT did not, without more, mean that he was given any right to hold shares in NTT or that the terms of the Shareholders Agreement would be ignored, vis a vis Sudhir [210] That Sudhir played a significant role in assisting the parties to secure financing appears to be quite evident. That Sudhir would participate in the joint venture was also quite understandable. However, as Timor and NSSB maintained, his participation was to be through AMSB and not as per the alleged Collateral Understanding. In my view the contemporaneous documentary evidence corroborated the position taken by Timor and NSSB i.e. the Actual Understanding. [211] Even from Suresh’s subsequent emails in 2013, there were clear indications that the shareholding in NTT would not change. It was not intended to and such is not inconsistent with the terms of the Shareholders Agreement. [212] The terms of the Shareholders Agreement, especially those relating to the pre-emption rights, were in themselves consistent with the fact that there was no understanding or right accorded to Sudhir to participate in NTT’s equity. [213] Sudhir was kept posted of the terms of the intended shareholders’ agreement. Drafts were copied to him. There was also evidence that he had the benefit of legal advice. 63 [214] At any rate Suresh was definitely fully aware of the terms of the Shareholders Agreement before he signed in on behalf of AMSB. If AMSB was trustee of some of the shares it held in NTT for the benefit of Sudhir, and that it had in fact been agreed that Sudhir would have the right to participate in the equity of NTT, one would expect that Suresh would have insisted on retaining clauses 4.5 and 10.1.3 found in the earlier draft. [215] It was Suresh who knew Sudhir, brought him in as an investor and acted as intermediary between Sudhir and Timor. He was directly involved in the negotiations and knew what was agreed or not agreed. When he signed the Shareholders Agreement he would have known that there was no provision in it for Sudhir’s participation in NTT’s equity, as of right. Yet he signed it. [216] Clearly, the Shareholders Agreement does not bind Sudhir. It also does not mean that the mere existence of the Shareholders Agreement, and the terms therein, equals the absence of the alleged Collateral Understanding. [217] However, because of the factual matrix of the case and the fact that Suresh was an integral part of the relationship that Sudhir had with Timor and the parties to the Shareholders Agreement, on a balance of probabilities, one would expect that Sudhir’s interests, if it existed as alleged, would have been catered for in the Shareholders Agreement. Suresh’s email to Sudhir of 16th October 2012 had contemplated that what was agreed among ‘all 3 parties involved’ would be reflected in a shareholders’ agreement. That there was nothing in it to accommodate 64 Sudhir holding shares in NTT was not inconsistent with what Timor and NSSB had asserted as the Actual Understanding. [218] It would have been in the interest of AMSB, and thus Suresh, to ensure that if AMSB were to transfer any of its shares in NTT to Sudhir, such would not trigger the pre-emption rights provisions in the Shareholders Agreement that might defeat such a transfer. [219] I find Suresh’s testimony inconsistent with what he had set out in his emails. Even what was asserted in his letters to EXIM Bank regarding the transfer of the 100,000 NTT shares to Sudhir was unfounded. [220] The reliance placed on clause 20.5 of the Shareholders Agreement, both in Suresh’s letter to EXIM Bank and in the Deed of Ratification and Accession, and the absence of any reference to the alleged Collateral Understanding until much later, does suggest that the Collateral Understanding was an afterthought, crafted after Suit 113 was commenced. [221] It was asserted that Timor did not object when Suresh wrote to the Board of NTT about Sudhir’s request for the 100,000 NTT shares. That may be so but that omission per se cannot lead to any conclusion that therefore NSSB had consented to waive relevant requirements under the Shareholders Agreement or somehow proves the existence of the alleged Collateral Understanding. 65 [222] Timor had, immediately the day following Suresh’s email to NTT’s Board, enquired if Sudhir wanted to have 10% of the shares in NTT that AMSB had, to be transferred to him. There was no reply to this enquiry. [223] Suresh conceded that Timor had asked that a waiver of clause 9, the provision in the Shareholders Agreement relating to pre-emptive rights, be obtained. This request indicates the absence of any prior waiver or consent to the intended transfer. [224] In his email of 5th February 2016 to Sudhir, which was copied to members of NTT’s Board of Directors including Suresh and others, Timor stated as follows: ‘Dear Sudhir, I am in receipt of the circular resolution proposing the transfer of shares from Azimuth Marine to yourself. In my view, the proposed share transfer will contravene Clause 9.1 of the Shareholders’ Agreement between Azimuth Marine and NSSB and NTT, which is dated 15th March 2013. Hence, this matter should be resolved at the shareholders’ level first before it comes to the Board for a resolution. I think it is imperative that we do not take any actions that would trigger a breach of the Shareholders’ Agreement. That would not be in the interest of NTT. As such, I suggest that the transferor secures a waiver from having to comply with its contractual obligations under Clause 9 of the Shareholders’ Agreement. Best Timor’ (Emphasis added) 66 [225] There was no contemporaneous response from either Sudhir or Suresh, justifying the proposed transfer upon the alleged Collateral Understanding or some prior agreement. [226] Timor’s enquiry and his suggestion that waiver of clause 9 be sought, cannot be interpreted as consent given for the intended transfer without AMSB having to comply with the pre-emption rights provisions in the Shareholders Agreement. It was very much to the contrary. [227] At the relevant point in time, there was no clear indication that the provisions in the Shareholders Agreement would be bypassed by AMSB. After all, the existence of the pre-emptive rights, and within it the provision for a purchaser and the remaining shareholder/s to execute a deed of ratification and accession, meant that there was no absolute bar to a third party holding shares in NTT – so long as the terms of the Shareholders Agreement were complied with. [228] As a witness, Timor came across as being detailed and particular to the point of being irredeemably punctilious. On the whole, he was cautious with his words and sought precision, which could often appear as an attempt to prevaricate or of him trying to be difficult. [229] Such inconsistencies as may be found in Timor’s oral testimony, to my mind, do not detract from the fact that it was Sudhir who bore the legal burden of proving his claim that there existed the alleged Collateral Understanding and that it amounted to a binding contract. 67 [230] The email of 15th January 2016 by Ramesh Kudva should also be mentioned. This email, to my mind, does not assist to establish the alleged Collateral Understanding. In fact, if anything, it does the contrary. It appears to acknowledge that NSSB may not even know the ‘true stakeholder interest’ in NTT. It further makes reference to NSSB and AMSB having consented to the transfer of 10% of the shares in NTT to Sudhir. There was however no evidence of any such consent by NSSB. In addition, that consent was required of NSSB suggests that there was indeed no prior agreement or ‘understanding’ that Sudhir would hold shares directly in NTT, as of right. [231] As for the meetings between Sudhir and Timor and their advisers at the Swissotel Hotel in Singapore on 16th January 2016 and on 28th January 2016 at NSSB’s solicitors’ premises and the emails exchanged thereafter, I do not see how they prove the existence of the alleged Collateral Understanding. [232] What the emails that followed the meeting in fact disclosed, was an attempt at forming an alliance to remove Suresh from the helm of NTT. Sudhir seemed at that stage to be a willing party. His email suggests that he had intended to move with a degree of stealth. Why Sudhir and Johari did not eventually take over control of AMSB was unclear. Perhaps it was a recognition that it was Suresh who had the expertise to perform the Vale contracts. [233] Whatever may have been their machinations at that time, there was however nothing to suggest that there existed the Collateral Understanding alleged by Sudhir. In fact, there was simply no mention of 68 Sudhir having any right to hold shares in NTT or that any transfer by AMSB of any of its shares in NTT to Sudhir would be exempt from the pre-emption rights provisions under the Shareholders Agreement. [234] Taken in context, the reference in Kelly’s email about the finalisation of the transfer of 10% of the shares in NTT directly to Sudhir’s name was in my view part of what Sudhir and Timor may have contrived at that time. Subsequently, as can be seen in Sudhir’s email of 1st February 2016, it seems that Timor’s shareholders, presumably the shareholders of NSSB, had a different approach towards this. Sudhir then suggested another meeting to, ‘clear the direction and to the approach.’ Again, there was no suggestion that Sudhir holding shares in NTT in his own name, as per the alleged Collateral Understanding, had been agreed upon. [235] That Sudhir had asserted that he had beneficial interest in AMSB was in my view, neither here nor there. It was never disputed that Sudhir was the investor and had interests in the joint venture. There was also evidence led that Sudhir had paid and caused to be paid large sums of money towards the joint venture. [236] However, it warrants repeating here that it was always Timor and NSSB’s case that Sudhir’s interests in the joint venture would remain through AMSB. This is further corroborated by clause 20.5 of the Shareholders Agreement. [237] Having considered the evidence, both oral and documentary and in particular the contemporaneous correspondences among the parties 69 and their legal representatives I find, on a balance of probabilities, that Sudhir’s claim that there existed the Collateral Understanding was not proven. [238] It follows from this finding that Sudhir’s causes of action predicated, directly or indirectly, on the alleged Collateral Understanding and all the declarations sought relating to it must therefore fail. This would include the allegations of inducement to breach the Collateral Understanding, that Timor dishonestly assisted and/or aided and abetted and/or was an accessory to NSSB in facilitating a breach of the Collateral Understanding, abuse of process, that Timor and/or NSSB had wrongfully conspired, combined with each other and acted in concert to defraud Sudhir. From the particulars set out in the Amended Statement of Claim, this alleged conspiracy was also premised on the alleged Collateral Understanding. [239] In addition to the pleaded cause of action, in his submissions, learned counsel for Sudhir sought to invoke an estoppel against NSSB and Timor. It is said to be a kind of estoppel that would operate to ‘create binding legal obligations, be it in contract or trust.’ Reliance was made on the decision of the Federal Court in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Berhad [1995] 3 MLJ 331. Although not pleaded, it was contended that estoppel may still be invoked in light of the evidence adduced and the circumstances of the case. [240] The bases given for this estoppel were those relating to the existence of and the circumstances in which the alleged Collateral Understanding was alleged to have come about. Leaving aside the pleading point, upon my finding in respect of the Collateral Understanding, 70 the alleged estoppel was bereft of its foundation. In addition, this estoppel point seems like an afterthought. It adds nothing more to Sudhir’s case, unless perhaps if it was found that the Collateral Understanding existed but was not a legally binding contract. In any event, the proper course for the Plaintiff would have been to seek leave to amend the Statement of Claim and not merely to add additional arrows to his quiver, as and when desired. [241] Having regard to the terms of the Shareholders Agreement and in particular the pre-emption rights, and as the Collateral Understanding was not proven, Sudhir is not entitled to the declarations sought, namely that the transfer of the 100,000 NTT shares to him did not require the consent of NSSB, that Sudhir is ‘entitled’ to purchase and/or receive the transfer of any part of the 700,000 ordinary shares in NTT registered in the name of AMSB, that the transfer of any part of the 700,000 ordinary shares in NTT from AMSB to Sudhir does not require the consent of NSSB and that clauses 4 and 9.1 of the Shareholders Agreement are unenforceable and/or inapplicable in respect of any transfer of the shares in NTT in the name of AMSB to Sudhir. [242] In Suit 165, Sudhir had also sought a declaration to the effect that his appointment to the Board of NTT as a director was valid. This declaration is considered below following consideration of the circumstances relating to his appointment. 71 Alleged inducement/procurement of breach of contract by Sudhir [243] Sudhir’s alleged Collateral Understanding in Suit 165 was in a sense the converse of NSSB’s prior action in Suit 113 against Sudhir for procuring a breach of the Shareholders Agreement. [244] The fact that AMSB transferred 100,000 of its NTT shares to Sudhir was neither disputed nor disputable. [245] According to Suresh who testified at the trial, the transfer was at the behest of Sudhir. This was also borne out by Suresh’s letter to the Board of Directors of NTT of 15th November 2015. [246] Sudhir’s case was effectively that he had required the transfer of the 100,000 NTT shares from AMSB, based on the alleged Collateral Understanding. [247] There was no direct evidence that Sudhir had actually procured or induced AMSB to breach the Shareholders Agreement. Not surprisingly, such evidence would often be difficult to come by. One would not expect AMSB to provide evidence of this, if indeed it was the case. [248] NSSB contended that in requesting the transfer of the 100,000 NTT shares and as alleged, being aware of the terms of the Shareholders Agreement, it must be inferred that Sudhir had intended to and had induced or procured its breach. 72 [249] That the pre-emptive rights conferred under the Shareholders Agreement and the provisions relating thereto were not complied with were not disputed. [250] As far as Sudhir was concerned he was not a party to the Shareholders Agreement. He claimed that he did not have knowledge of the actual terms of the Shareholders Agreement but admitted that he was provided with some of the drafts. Under cross examination, he admitted that he was aware that there was to be a shareholders’ agreement. [251] There was no direct evidence that Sudhir was aware of the actual terms of the Shareholders Agreement. However, among the drafts that were circulated was one circulated by Suresh to Johari, Timor, Wan Hari Dass and several others, including Sudhir. This draft shareholders’ agreement was attached to an email dated 15th December 2012. The parties to this draft shareholders’ agreement were AMSB, NSSB and NTT. [252] What is of significance was that this draft shareholders’ agreement already had within it, clause 9 on pre-emption rights. This draft also already had within it the clause relating to the ratio of equity participation of AMSB and NSSB in NTT. [253] Many of the terms in the draft were retained in the Shareholders Agreement – particularly the pre-emption rights and equity participation provisions. 73 [254] Following from Suresh’s letter to the Board of Directors of NTT dated 15th November 2015 of Sudhir’s request for the transfer of the 100,000 NTT shares to him, a circular resolution by the Board of Directors of NTT dated 16th December 2015 was obtained to approve and effect the transfer of the 100,000 shares. [255] This circular resolution was signed by Suresh, Johari, Latiff and Hari Dass as directors of NTT. Timor and Wan did not sign the resolution. It was no surprise that those directors on NTT’s Board of Directors who signed this circular resolution were all nominees of AMSB. [256] This event was followed by another event, which was triggered by a letter from Latiff to the Board of Directors of NTT dated 28th October 2016, nominating Sudhir to be appointed an additional director on the Board of Directors of NTT. [257] This request was made after the notices of termination of the Shareholders Agreement issued by NSSB on 11th October 2016 and by AMSB on 17th October 2016. [258] Latiff’s letter to the Board of Directors of NTT dated 28th October 2016 stated as follows: 74 ‘Dear Sirs NAUTILUS TUG & TOWAGE SDN BHD (1016194 T)(“NTT”) -MOTION TO APPOINT MR JAYA SUDHIR JAYARAM AS DIRECTOR The above matter referred. Subject to the approval of the Board of Directors of this notice, I hereby propose that, this motion to appoint Mr. Jaya Sudhir Jayaram (I/C No.: 670204-71-5781) as additional Director to fill the vacancy in the Board, pursuant to the Articles of the company and upon his compliance to section 123(4) of the Companies Act, 1965, be tabled, deliberated and resolved at the coming NTT’s Board of Directors meeting on the 2nd November, 2016. Thank you.’ [259] Under clause 10.1 of the Shareholders Agreement, there was only to be not more than six directors on NTT’s Board; four to be nominated by AMSB and two by NSSB. [260] This request prompted NSSB to issue a letter to AMSB dated 1st November 2016, objecting to the proposed motion on grounds, inter alia, that the Shareholders Agreement had been terminated and that it had exercised its rights under clause 23.3 to purchase all the shares in NTT owned by AMSB and that the motion, if carried, would alter the ratio of representation on the Board agreed to under clause 10. [261] Notwithstanding this objection, the Board of Directors of NTT, at its meeting on 2nd November 2016, resolved in favour of Sudhir’s appointment. The directors nominated by AMSB, who were in the majority, voted in favour of Sudhir’s appointment. 75 Did Sudhir procure or induce a breach of the Shareholders Agreement? [262] The tort of procuring or inducing the breach of a contract is, of course, traceable to the well-known decision of Lumley v Gye (1853) 118 ER 749. In that case, the plaintiff, who was the lessee and manager of the Queen’s Theatre, had contracted with or hired and engaged one Johanna Wagner to perform in that theatre for a period of time, with the condition that during that period, she was not to sing or use her talent elsewhere, without the plaintiff’s consent in writing. Three counts were levelled against the defendant. They were based on an allegation that the defendant, knowing of Wagner’s contract or employment with the plaintiff, had ‘maliciously intending to injure the plaintiff … enticed and procured Wagner to refuse to perform’ for the plaintiff and ‘by means of which enticement and procurement of the defendant, Wagner wrongfully refused to perform, and did not perform during the term’. [263] Erle J in his judgment stated that: ‘It is clear that the procurement of the violation of a right is a cause of action in all instances where the violation is an actionable wrong, as in violations of right to property, whether real or personal, or to personal security: he who procures the wrong is a joint wrong-doer, and may be sued, either alone or jointly with the agent, in the appropriate action for the wrong complained of. Where a right to the performance of a contract has been violated by a breach thereof, the remedy is upon the contract against the contracting party; and, if he is made to indemnify such breach, no further recourse is allowed; and, as in case of the procurement of a breach of contract the action is for a wrong and cannot be joined with the action on the contract, and as the act itself is not likely to be of frequent occurrence nor easy of proof, therefore the action for this wrong, in respect of other 76 contracts than those of hiring are not numerous; but still they seem to me sufficient to shew that the principle has been recognised.’ (Emphasis added) The latter part of the passage of Erle J’s judgment quoted above testifies to the old common law forms of action which governed the day. [264] As regards the tort, the element of procurement or inducement is essential. As the learned editors of the 21st edition of Clerk & Lindsell on Torts, in their opening sentence under the topic ‘PROCURING A BREACH OF CONTRACT’, stated plainly and succinctly: ‘ Knowingly to procure or, as it is often put, to induce a third party to break his contract to the damage of the other contracting party without reasonable justification or excuse is a tort.’ (Emphasis added) [265] In OBG v Allan [2008] 1 AC 1 the House of Lords had occasion to consider this tort and to distinguish it from unlawful interference or causing loss by unlawful means. [266] In OBG v Allan, Lord Hoffmann stated as follows: ‘39. To be liable for inducing breach of contract, you must know that you are inducing a breach of contract. It is not enough that you know that you are procuring an act which, as a matter of law or construction of the contract, is a breach. You must actually realize that it will have this effect. Nor does it matter that you ought reasonably to have done so. This proposition is most strikingly illustrated by the decision of this House in British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479, in which the plaintiff's former employee offered the defendant information about one 77 of the plaintiff's secret processes which he, as an employee, had invented. The defendant knew that the employee had a contractual obligation not to reveal trade secrets but held the eccentric opinion that if the process was patentable, it would be the exclusive property of the employee. He took the information in the honest belief that the employee would not be in breach of contract. In the Court of Appeal [1938] 4 All ER 504, 513, MacKinnon LJ observed tartly that in accepting this evidence the judge had "vindicated his honesty … at the expense of his intelligence" but he and the House of Lords agreed that he could not be held liable for inducing a breach of contract.’ (Emphasis added) [267] As regards the required knowledge, the statement of Lord Denning MR in Emerald Construction Co Ltd v Lowthian [1966] 1 WLR 691, reproduced below was quoted with approval by Lord Hoffmann in OBG v Allan: ‘Even if they did not know the actual terms of the contract, but had the means of knowledge–which they deliberately disregarded–that would be enough. Like the man who turns a blind eye. So here, if the officers deliberately sought to get this contract terminated, heedless of its terms, regardless whether it was terminated by breach or not, they would do wrong. For it is unlawful for a third person to procure a breach of contract knowingly, or recklessly, indifferent whether it is a breach or not.’ (Emphasis added) [268] Therefore, turning the proverbial Nelsonian eye would be no defence. [269] As for what counts as intention to procure a breach of contract, Lord Hoffmann in OBG v Allan stated thus: 78 ‘42 The next question is what counts as an intention to procure a breach of contract. It is necessary for this purpose to distinguish between ends, means and consequences. If someone knowingly causes a breach of contract, it does not normally matter that it is the means by which he intends to achieve some further end or even that he would rather have been able to achieve that end without causing a breach. … 43 On the other hand, if the breach of contract is neither an end in itself nor a means to an end, but merely a foreseeable consequence, then in my opinion it cannot for this purpose be said to have been intended. That, I think, is what judges and writers mean when they say that the claimant must have been "targeted" or "aimed at".’ (Emphasis added) [270] The decision of the Federal Court in Loh Holdings Sdn Bhd v Peglin Development Sdn Bhd & Anor [1984] 2 MLJ 105 was also referred to in submissions. That was a case pertaining to an application to strike out the action under Order 18 Rule 19 of the Rules of the High Court. [271] In Loh Holdings v Peglin Development several authorities were cited by counsel. Notable among the cases cited were Thompson & Co Ltd v Deakin [1952] Ch 646 and Greig v Insole [1978] 1 WLR 302. In respect of Thomson v Deakin, merely the headnotes of the report were reproduced and the relevant part of which read as follows: ‘… The tort of procuring a breach of contract however is not confined to direct intervention. The intervener knowing of the existence of a contract between A and B and acting with the object of procuring its breach by A to the damage of B will be liable not only (1) if he intervenes by persuading A to break it, but also (2) if he intervenes by the commission of some act wrongful in itself so as to prevent A from in fact performing his contract and also (3) if he persuades a third party to do an act in itself wrongful or not legitimate (as committing a breach of a contract of service with A) so as to 79 render, as was intended, impossible A's performance of his contract with B.’ (Emphasis added) [272] As mentioned, Loh Holdings v Peglin Development was concerned with an application to strike out the plaintiff’s claim. The application was allowed by the High Court but the decision was reversed by the Federal Court. [273] The authorities cited however ought now to be read in light of the decision of the House of Lords in OBG v Allan. [274] Based on the decision in OBG v Allan, it may be concluded as follows.

To be liable for the tort of inducing or procuring a breach of contract, the tortfeasor must know that he is inducing a breach of contract. The tortfeasor must know that he is procuring an act (or omission as the case may be) that would have the effect of breaching a contract.

(ii) As for the requisite knowledge, even if the tortfeasor did not know of the actual terms of the contract, but had the means of acquiring the requisite knowledge but deliberately disregarded it, that would suffice for the purposes of the tort.

(iii) There must also be an intention to procure a breach of contract. Such intention would be satisfied if the tortfeasor 80 knowingly causes a breach of contract and it matters not if the breach of contract was merely a means to achieve a further or other end.

(iv) The requisite intention is however not established if the breach of contract was neither the end objective of the tortfeasor nor a means to an end, but merely a foreseeable consequence. [275] For the purposes of the tort and as Lord Hoffmann put it in OBG v Allan, ‘... I think that one cannot be liable for inducing a breach unless there has been a breach. There can be no secondary liability without primary liability.’ [276] Based on this facet of the tort, learned counsel for Sudhir raised a preliminary point. It was maintained that the issue of whether there was a breach of the Shareholders Agreement is currently the subject matter in an arbitration involving all three parties, AMSB, NTT and NSSB. [277] Learned counsel maintained that any finding of breach of the Shareholders Agreement against AMSB and/or NTT would also be a breach of the rules of natural justice. This is because AMSB and NTT are not parties in Suit 113. [278] The effect of this objection, if sustained, would be a dismissal of Suit 113 in limine. It would leave NSSB without any recourse against Sudhir in respect of the 100,000 NTT shares. NSSB would also not have any recourse against Sudhir in any of the pending arbitrations as Sudhir 81 is not a party to the Shareholders Agreement and not privy to the pending arbitrations. [279] In my view, the answer to this conundrum may be found in a principle articulated by Lord Penzance in Wytcherley v Andrews (1871) L.R. 2 P. & D. 327 at p 329, in a case involving a contested will, where he stated: ‘ … there is a practice in this court, by which any person having an interest may make himself a party to the suit by intervening; and it was because of the existence of that practice that the judges of the Prerogative Court held, that if a person, knowing what was passing, was content to stand by and see his battle fought by somebody else in the same interest, he should be bound by the result, and not be allowed to re-open the case. That principle is founded on justice and common sense, and is acted upon in courts of equity, where, if the persons interested are too numerous to be all made parties to the suit, one or two of the class are allowed to represent them; and if it appears to the Court that everything has been done bonâ fide in the interests of the parties seeking to disturb the arrangement, it will not allow the matter to be re-opened.’ (Emphasis added) [280] In Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95, Lord Denning, sitting in the Judicial Committee of the Privy Council, observed that: ‘… their Lordships would point out that there is nothing in the principle itself which compels it to be limited to wills and representative actions. The principle, as Lord Penzance said, is founded on justice and common sense.’ [281] The principle enunciated by Lord Penzence has since been applied by our Courts, see for example Malaysian International Trading Corp Sdn Bhd v RHB bank Bhd [2016] 2 MLJ 457; Tradium Sdn Bhd v 82 Zain Azahari bin Zainal Abidin & Anor [1995] 1 MLJ 668 and Re Thien Kon Tai [2008] 6 MLJ 278). [282] While these cases were concerned with a subsequent attempt by a party to challenge a decision in proceedings to which that party could have intervened as a party, conversely, in my view, it also means that the prior proceedings were not invalid, and could not be invalidated, by virtue of the absence of that party. [283] In the circumstances pertaining, as both Suit 165 and Suit 113 are tried together, the preliminary point if allowed would be manifestly unjust. Both AMSB and NTT are parties to Suit 165, and they both participated in the trial. They were therefore clearly aware of the nature of Suit 113. If they were concerned that the outcome of Suit 113 might bind them, or that an adverse finding might be made against them without their having a say, they could have applied formally to intervene and be added as a party. The procedural facility for such an application clearly exists in our Rules of Court 2012. It is to be found in Order 15. [284] In addition, the objection to be taken was not one for Sudhir to take. If any party was not heard, it would be either AMSB and/or NTT. However, neither can mount any subsequent complaint if they, having the requisite knowledge and opportunity, chose to sit idly by and not seek to intervene. [285] In addition, and as stated in Lumley v Gye, the tortfeasor, ‘…who procures the wrong is a joint wrong-doer, and may be sued, either alone 83 or jointly with the agent, in the appropriate action for the wrong complained of’ (emphasis added). [286] Thus, AMSB and/or NTT need not be cited as a party in Suit 113. There was also good reason that they were not cited. NSSB’s allegation of breach of the Shareholders Agreement would be a dispute among the parties and clause 33.1 therein would require the dispute to be referred to arbitration. Citing AMSB and/or NTT as a party in an action, without proceeding to arbitration, would probably have resulted in allegations of a breach of clause 33.1. [287] I therefore find that the preliminary issue, and the contention raised, not valid and did not warrant the dismissal of Suit 113 on that premise alone. [288] As regards the tort, Sudhir was clearly in a position to require a copy of the Shareholders Agreement from AMSB, knowing as he did, that there was in existence such an agreement. [289] From the evidence, Sudhir had also been provided a draft of the shareholders’ agreement and in it were already set out the pre-emption rights and the equity participation provisions. [290] What, however, needs also to be established in this case was whether Sudhir had procured or induced AMSB to breach the Shareholders Agreement. 84 [291] As AMSB is a corporate entity, the issue would then be whether Sudhir had prevailed upon Suresh, or procured or induced him, or some other person or persons in authority in AMSB, to cause AMSB to breach the Shareholders Agreement. [292] In this context the following observations of Evershed MR in Thomson v Deakin is pertinent: ‘In the case of a company, the approach to or the persuasion of a managing director, or of some person having like authority, may be regarded as being in all respects equivalent to the direct approach of the individual contractor, as found in Lumley v. Gye and in the Glamorgan case7; …’ [293] The evidence in this regard was unequivocal. Suresh’s letter to the Board of Directors of NTT of 15th November 2015 about Sudhir’s request for the transfer of the 100,000 NTT shares speaks for itself. So too was Suresh’s testimony on this issue. [294] As for Sudhir, he never denied he so requested. His response was that it was always in the contemplation of the parties that he would eventually be taking up shares in NTT. This contention matured into the alleged Collateral Understanding. [295] Sudhir would have known of the pre-emption rights. He was provided some drafts as mentioned. He was also actively involved in the affairs of the joint venture, as he himself maintained. He himself was an investor, albeit through AMSB. He had shares, he claimed, that were held for him by AMSB. 85 [296] In the circumstances, being clearly aware that there was to be a Shareholders Agreement and being in the position to obtain a copy of it, Sudhir cannot be heard to claim ignorance of such a significant term as that pertaining to pre-emption rights, particularly if it can negate his alleged right to participate directly in NTT’s equity. [297] As Lord Denning put it in Emerald Construction Co Ltd v Lowthian, ‘…it is unlawful for a third person to procure a breach of contract knowingly, or recklessly, indifferent whether it is a breach or not’ (supra). [298] Sudhir’s request for the 100,000 shares to be transferred to him, without more, was irreconcilable with the pre-emption rights in the Shareholders Agreement. The transfer of the 100,000 shares to him was a direct consequence of this request, premised upon the alleged Collateral Understanding which, I have held, was not proven. [299] In my view, it was probable that Sudhir procured and intended that AMSB breach the Shareholders Agreement. Otherwise, if the pre-emption rights provisions were complied with, it could well have resulted in NSSB opting for the 100,000 NTT shares, thereby increasing its stake in NTT’s equity and Sudhir denied of his direct participation in NTT. It was only by procuring a breach of the Shareholders Agreement that Sudhir could be certain of holding shares in NTT, registered in his name and derived from AMSB. [300] Having regard to the evidence and having heard the testimonies, I do not accept that there was any honest belief that the alleged Collateral 86 Understanding or any agreement to similar effect ever existed. There was no room in this case for MacKinnon LJ’s observation in British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479, that the judge had ‘vindicated his honesty … at the expense of his intelligence’. [301] If there was to be such an understanding or agreement, it would have to be such that Sudhir had the right to participate in NTT’s equity and that the terms of the Shareholders Agreement, particularly the pre-emption rights provided therein could be ignored or waived by the parties to the Shareholders Agreement. [302] On balance, such an understanding or agreement would be unlikely and improbable, particularly in light of the contemporaneous documents that existed in the run up to the Shareholders Agreement. [303] While there was evidence of attempted resolutions and negotiations to resolve the matter, nothing materialised to neutralise the fact that the Shareholders Agreement was breached when the 100,000 NTT shares were transferred to Sudhir, without complying with the pre-emption rights provisions under the Shareholders Agreement. [304] The causal link from Sudhir’s request to the transfer and the breach of the Shareholders Agreement was plain and incontrovertible. [305] As for Sudhir’s appointment as a director of NTT, I do not find that the case for procuring a breach of the Shareholders Agreement was made out by NSSB. 87 [306] Firstly, Latiff’s proposal for Sudhir to be appointed on the Board of Directors for NTT was made after the Shareholders Agreement was terminated. Termination of the Shareholders Agreement would have occurred, at the latest, by the 17th of October 2016, the latter of the two terminations of the Shareholders Agreement. [307] Sudhir’s appointment was pursuant to Latiff’s nomination. It was not clear if Latiff’s nomination of Sudhir was based on his 100,000 shareholding in NTT or that Sudhir had sought his appointment through Lafiff, although I do not think it is of any significance either way. [308] Latiff was a mere director on NTT’s Board of Directors. As a single director on the Board, Latiff was in no position to ensure or cause Sudhir’s appointment by the Board. The decision would have to be made by the Board of Directors as an organ of the company. This harks back to the observations of Lord Hoffmann in OBG v Allan referred to above. [309] That the Board’s resolution to appoint Sudhir as director may have been a foreseeable breach of the Shareholders Agreement does not necessarily mean that Sudhir had procured the breach or had caused it. Validity of Sudhir’s appointment as director of NTT [310] Apart from pleading that Sudhir’s appointment was the subject matter of dispute in arbitration proceedings, nothing else was pleaded as to the validity of his appointment in Timor and NSSB’s defence in Suit 165. 88 There was also nothing pleaded in the defence of either AMSB or NTT, as to the validity of Sudhir’s appointment. [311] While the issue of Sudhir’s appointment as a director may be the subject matter of dispute in a pending arbitration Sudhir, not being a party to the arbitration proceedings, was nevertheless entitled to seek a declaration as to the validity of his appointment. [312] Latiff’s proposal for Sudhir’s appointment as director was based upon filling a vacancy that was available, in accordance with the articles of NTT. The signed minutes of NTT’s Board of Directors meeting of 2nd November 2016 stated, among other things, as follows: ‘1.2 APPOINTMENT OF MR JAYA SUDHIR JAYARAM AS DIRECTOR The chairman proceeded to table the motion of Dato Abd Latiff (DAL) dated 28 October 2016 which was circulated to the Board by email on 31 October 2016 in which DAL proposed to appoint JAYA SUDHIR A/L JAYARAM (NRIC: 670204-71-5781) as Director to fill the maximum seven (7) number of directors permissible pursuant to the Company’s Articles of Association. HA seconded this motion.’ (Emphasis added) [313] The proposed resolution appointing Sudhir as director was carried by a majority. Timor and Wan objected. Their objection was based on NSSB having exercised the right to purchase all the shares in NTT, set out in its letter of 1st November 2016. 89 [314] In my view, there is no apparent reason why Sudhir’s appointment was not valid in law and none was provided by any of the defendants. [315] To my mind, the obviously available argument against it would appear to be found in the terms of the Shareholders Agreement. However, that was an agreement among the shareholders, including NTT. The proposal and the votes in favour of Sudhir’s appointment were by individuals as directors of NTT. The directors were not party to the Shareholders Agreement and its terms would not bind them. [316] Directors have a fiduciary duty to act in the interest of the company. Should they fail to do so, that is a matter which the company may pursue against them. [317] On top of these considerations, it also appears that the appointment was in accordance with the articles of association of NTT. It was not suggested otherwise by the NSSB, NTT or AMSB. I would not think that the Shareholders Agreement would supersede the provisions of the articles of association or may dictate how individual directors are to discharge their fiduciary duty. [318] More importantly, Sudhir’s appointment as director was, in any event, after the termination of the Shareholders Agreement. [319] If indeed Sudhir’s appointment was a breach of the Shareholders Agreement, notwithstanding its termination before his appointment, that is 90 a matter that NSSB is entitled to pursue as against the other parties of the Shareholders Agreement. [320] I therefore see no reason why Sudhir is not entitled to the declaration that his appointment as director of NTT was valid. Tort of inducing a breach of fiduciary duties [321] NSSB’s other pleaded cause of action against Sudhir was the tort of inducing a breach of fiduciary duties. [322] This contention was premised upon an assertion that by virtue of the joint venture, the parties to the Shareholders Agreement owed one another fiduciary duties. [323] By inducing a breach of the Shareholders Agreement, it was contended that such would also amount to an actionable wrong i.e. the tort of inducing a breach of fiduciary duty. [324] Leaving aside for the moment as to whether there were fiduciary duties owed among the parties to the Shareholders Agreement, the consistent position of counsel for both parties was that there exists, as yet, no decided case law as to the existence of a tort of inducing a breach of fiduciary duties. 91 [325] It would seem logical that if the law recognises as an actionable wrong for a person to procure the breach of a contract, it would also recognise as a wrong for someone to procure the breach of an existing fiduciary duty. The substance of the wrong in both instances would be to procure an actionable wrong or the breach of enforceable obligations. That which might separate the two would be their parentage; i.e. one from the common law and the other, from equity. [326] In OBG v Allan, Lord Nicholls of Birkenhead observed that Lumley v Gye is to be confined to the tort of inducing a breach of contract, that the different tort of unlawful interference required intentional harm by unlawful means, that there was no ‘hybrid’ tort of ‘interfering with contractual relations’ and he left the question of whether the principle in Lumley v Gye should be extended. The following was what Lord Nicholls stated: ‘189 I feel bound to say therefore that the ambit of the Lumley v Gye tort should properly be confined to inducing a breach of contract. The unlawful interference tort requires intentional harm effected by unlawful means, and there is no in-between hybrid tort of “interfering with contractual relations”. In so far as authorities suggest or decide otherwise they should not now be followed. I leave open the question of how far the Lumley v Gye principle applies equally to inducing a breach of other actionable obligations such as statutory duties or fiduciary duties.” (Emphasis added) [327] Whether there exists such a tort was also a question left open by the Courts in Singapore (see Zim Integrated Shipping Services Ltd & Ors v Dafni Igal & Ors [2010] 2 SLR 426 and Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd [1999] 1 SLR(R) 628). 92 [328] In an article entitled ‘A Perspective On The Economic Torts’ by Lee Eng Beng in the Singapore Journal of Legal Studies [1996], cited by learned counsel for NSSB, a parallel with certain principles of liability in equity such as the equitable wrong of being knowingly implicated in a breach of trust or fiduciary duty was drawn. The learned author maintained that the principle of liability in such equitable wrongs is fundamentally the same as in the tort of interference with rights. Keeping the two principles apart it was argued, is artificial. [329] The learned author suggests that, ‘The concept of interference in the tort is, by now, probably wide enough to encompass all forms knowing implication in a breach of trust or fiduciary duty.’ It was then contended that: ‘The proposition that there is no tort known as inducing a breach of trust or, presumably, also a breach of fiduciary duty, may have to be re-considered in the not-too-distant future’ [330] The learned editors of the 21st edition of Clerk & Lindsell on Torts, in paragraph 24-31, have cautiously observed: ‘But, even if there are equitable remedies against those who knowingly receive the proceeds, or wrong fully assist in the breaches, of a trust, yet there appears still to be no general tort of “procuring a breach of trust”, nor (it seems) a breach of “fiduciary duty”.’ (Emphasis added) [331] The learned editors were equally cautious in welcoming its creation stating, in the same paragraph: 93 ‘The creation of a tort of procuring breaches of fiduciary duty, which at present appears not to fit well with the precedents, might be welcome; its creation would need, however, adjustments to fit with other areas such as company law, as well.’ (Emphasis added) [332] Learned counsel for NSSB maintained that procuring a breach of fiduciary duties should be recognised as a tort and if so, its ingredients should be the same as those in respect of the tort of procuring or inducing a breach of contract. [333] The situation at hand brings to mind the observations of Lord Devlin in a publication known as The Listener, which was a weekly publication by the British Broadcasting Corporation. It was in the December 12th 1968 issue of that magazine that Lord Devlin wrote stating that: ‘The creation of a new tort is now very rare and takes a long time. It is rather like the process of canonisation. The cause is first of all fostered by academic well-wishers and then promoted in the lower courts. Eventually, if things prosper, the tort will be beatified by the Court of Appeal and then, probably after a long interval, it will achieve full sainthood in the House of Lords.’ [334] Suffice to say that for the purposes of the case at hand, and at this point in time, the tort of procuring a breach of fiduciary duties is not, as yet, known to exist. Furthermore, the case at hand does not, in my view, require that a new tort be recognised in order to remedy the wrong disclosed. 94 Dishonest Assistance and Knowing Receipt [335] Also invoked by NSSB were the principles in equity of dishonest assistance and knowing receipt. [336] In Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 A.C. 378, a decision of the Privy Council, Lord Nicholls quoting Lord Selborne LC in Barnes v Addy (1874) L.R. 9 Ch App 244, stated as follows: ‘The airline seeks a remedy against the travel agent's principal director and shareholder. Its claim is based on the much-quoted dictum of Lord Selborne L.C., sitting in the Court of Appeal in Chancery, in Barnes v. Addy (1874) L.R. 9 Ch.App. 244, 251-252: "[The responsibility of a trustee] may no doubt be extended in equity to others who are not properly trustees, if they are found … actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But … strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a court of equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees." In the conventional shorthand, the first of these two circumstances in which third parties (non-trustees) may become liable to account in equity is "knowing receipt," as distinct from the second, where liability arises from "knowing assistance." Stated even more shortly, the first limb of Lord Selborne L.C.'s formulation is concerned with the liability of a person as a recipient of trust property or its traceable proceeds. The second limb is concerned with what, for want of a better compendious description, can be called the liability of an accessory to a trustee's breach of trust. Liability as an accessory is not dependent upon receipt of trust property. It arises even though no trust property has reached the hands of the accessory. It is a form of secondary liability in 95 the sense that it only arises where there has been a breach of trust. In the present case the plaintiff airline relies on the accessory limb. The particular point in issue arises from the expression "a dishonest and fraudulent design on the part of the trustees." (Emphasis added) [337] In respect of dishonest assistance, reliance was placed by learned counsel for NSSB on a summary of its elements in a decision of the Court of Appeal of Singapore in Caltong (Australia) Pty Ltd (formerly known as Tong Tien See Holding (Australia) Pty Ltd) and another v Tiong Tien See Construction Pte Ltd (in liquidation) and another appeal [2002] 3 SLR 241. In Calthong (Australia) Pty Ltd v Tiong Tien See Construction Pte Ltd, Chao Hick Tin JA stated as follows: ‘[33] The elements which must be proved to establish dishonest assistance are (see Royal Brunei Airlines v Tan Kok Ming Philip [1995] 2 AC 378; [1995] 3 All ER 97):

that there has been a disposal of his assets in breach of trust or fiduciary duty;

in which the defendant has assisted or which she/he has procured;

the defendant has acted dishonestly;

resulting loss to the claimant.’ However, with respect, there are now authorities to the effect that disposal of assets in breach of trust or fiduciary duty is not a necessary element in knowing assistance, unlike in knowing receipt. [338] In Kuan Pek Seng &Alan Kuan v Robert Doran & Ors and other appeals [2013] 2 MLJ 174, Jeffrey Tan FCJ, delivering the judgment of the Court of Appeal stated, quoting from Barnes v Addy: 96 ‘Knowing assistance’ is one of two types of third party liabilities under trust law, established in Barnes v Addy (1874) LR 9 Ch App 244, and based on the following dictum of Lord Selbourne LC: … [56] As a general rule, there must be a breach of trust or fiduciary duty by someone other than the defendant, the defendant must have helped that person in the breach, and the defendant must have a dishonest state of mind. (Emphasis added) [339] The learned editors of the 19th Edition of Underhill and Hayton, Law of Trusts and Trustees, pp 1293-1294, state as follows: ‘Elements of liability as a dishonest assistant 98.47 To make a defendant personally liable for dishonest assistance in a breach of trust or other fiduciary duty it is necessary to establish:

a breach of trust or fiduciary duty;

assistance by the defendant in the breach;

a causal link between and a gain to the defendant, depending on the remedy which is sought; and

a dishonest state of mind on the part of the assistant.’ [340] In Sudhir’s defence, it was not admitted that there existed fiduciary duties among the parties to the Shareholders Agreement. There were also no submissions as to the existence or otherwise of any such duty. 97 [341] In Gurbachan Singh Bagawan Singh & Ors v. Vellasamy Pennusamy & Other Appeals [2015] 1 CLJ 719, Richard Malanjum CJ (Sabah & Sarawak), as his Lordship then was, stated that: ‘[54] For a person to be a fiduciary he must first and foremost have bound himself in some way to protect and/or to advance the interests of another. This is perhaps the most obvious of the characteristics of the fiduciary office for equity will only oblige a person to act in what he believes to be another's interests if he himself has assumed a position which requires him to act for or on behalf of that other in some particular matter' 22. Thus, the essential element is that there must be some undertaking on the part of the fiduciary to act with loyalty in the interest of the other party. 'A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.'23" (Emphasis added) [342] In Bristol and West Building Society v Mothew [1998] Ch 1 at p19, Millett LJ observed that: ‘A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary. As Dr. Finn pointed out in his classic work Fiduciary Obligations (1977), p. 2, he is not subject to fiduciary obligations because he is a fiduciary; it is because he is subject to them that he is a fiduciary. (Emphasis added) 98 [343] In Chirnside and Another v Fay [2007] 2 LR 407 at pp 436-437, a decision of the Supreme Court of New Zealand, Tipping J (which whom Blanchard J concurred) in a majority judgment stated: [73] Many cases, textbooks and articles in learned journals have considered when and against what criteria the courts will find that a relationship gives rise to fiduciary duties. In essence, there are two situations in which that will be so. In the first, the relationship is of a kind which, by its very nature, is recognised as being inherently fiduciary. Most cases involving a breach of fiduciary duty are of this kind. They fall into one of the recognised categories of relationships which are inherently fiduciary. These include the relationships of solicitor and client, trustee and beneficiary, principal and agent, and doctor and patient. (Such relationships will almost always give rise to fiduciary duties on the part of the relevant party, albeit, as noted at para [72], above, a breach of duty by a fiduciary is not necessarily to be regarded as a breach of fiduciary duty (Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 at 680, 688, Bristol v West Building Society v Mothew [1998] Ch 1 at 16 per Millett LJ and Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567 at [29], approving Millett LJ's approach in Mothew).) [74] There is a strong case for saying that most joint venture relationships can properly be regarded as being inherently fiduciary because of the analogy with partnership. (See the discussion in Equity and Trusts, para 14.3.6, commencing p 418 ) The relationship between partners is one which has traditionally been regarded as a classic example of a fiduciary relationship in that the parties owe to each other duties of loyalty and good faith; and they must, in all matters relevant to the activities of the partnership, put the interests of the partnership ahead of their own personal interests. (See Equity and Trusts para 14.3.6, fn 444.) [75] The second situation in which a relationship will be classed as fiduciary depends not on the inherent nature of the relationship but upon an examination of whether its particular aspects justify it being so classified. No single formula or test has received universal acceptance in deciding whether a relationship outside the recognised categories is such that the parties owe each other obligations of a fiduciary kind. … … [80] It is clear from the authorities that relationships which are inherently fiduciary all possess the feature which justifies the imposition of fiduciary duties in a case which falls outside the traditional categories; all 99 fiduciary relationships, whether inherent or particular, are marked by the entitlement (rendered in Arklow as a legitimate expectation) of one party to place trust and confidence in the other. That party is entitled to rely on the other party not to act in a way which is contrary to the first party's interests.’ (Emphasis added) [344] Even Elias CJ, who dissented stated, at p 419 that: ‘[14] Where parties join together in a venture with a view to sharing the profit obtained, their relationship is inherently fiduciary within the scope of the venture and while it continues. (See Meinhard v Salmon (1928) 164 NE 545 at 546.)’ [345] In Newacres Sdn Bhd v Sri Alam Sdn Bhd [2000] 2 MLJ 353 at p 378, Chong Siew Fai CJ (Sabah & Sarawak) observed that: ‘… it was argued that the JVA was strictly a commercial contract and did not import fiduciary relationship. It seems to me that the judicial trend in modern times, particularly in Canada, New Zealand and Australia leans towards greater readiness of accepting the presence of fiduciary relationship in commercial transactions or arrangements even where the parties were at arm's length and stood on a relatively equal footing. … In United Dominions Corp Ltd v Brian Pty Ltd, Dawson J made the following observation which is of interest at p 16: Although the relationship between participants in a joint venture which is not a partnership will be governed by the particular contract rather than extrinsic principles of law, the relationship may nevertheless be a fiduciary one if the necessary confidence is reposed by the participants in one another.’ (Emphasis added) 100 [346] The mere fact that parties have described themselves as having entered into a joint venture is not sufficient, by itself, to conclude that their relationship is necessarily a fiduciary one (see United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1). The term ‘joint venture’ is in common use among those in the business community but the nature of the relationship that is created or intended may differ by express agreement or necessary implication. The starting point must therefore be to examine the Shareholders Agreement itself to determine the intended nature of the parties’ relationship and whether it is such that fiduciary duties among the parties inter se may be held to exist. [347] Recital E to the Shareholders Agreement stated as follows: ‘E. In furtherance thereto, the Parties have mutually agreed to participate in the equity of the Company and cooperate as joint venture partners in the Company to carry on the Business of the Company, and the Parties now agree to enter into this Shareholders Agreement to regulate their respective rights obligations liabilities and benefits as well as the affairs of the Company and their rights as shareholders of the Company on the terms and conditions of this Shareholders Agreement.’ (Emphasis added) [348] Clause 25 of the Shareholders Agreement states as follows: ’25. NO PARTNERSHIP

25.1 The relationship between the parties to this Agreement shall not constitute a partnership. Neither of the parties to this Agreement has the power or the right to bind, commit or pledge the credit of the other party to this Agreement or the Company.’ 101 [349] Although clause 25.1 seeks to negate the creation of a partnership among the parties, such in my view was directed at a partnership recognised as such by law under the Partnerships Act 1961. The concern expressed in clause 25.1 was to negate any power that might be interpreted to exist that might enable the parties to bind each other, qua partners. [350] This, to my mind, was not incompatible with the expression in recital E. Having regard to the joint venture and the equity structure of the joint venture company, NTT, it is quite clear that the relationship was one that required trust and confidence to be reposed in the parties to the Shareholders Agreement. [351] The requirement of good faith was specifically embedded in the Shareholders Agreement under clause 34 which provided as follows: ’34.

34.1 The provisions of this Agreement are subject to the principles of good faith in the widest sense. All obligations and rights expressed herein are to be honoured and exercised in conformity with such principles and with the mutual regard of the parties hereto.’ (Emphasis added) [352] Thus, while the parties might not have wanted to create a partnership recognised in law as such, they nevertheless wanted to be ‘joint venture partners’ in fact, meaning that they had intended the 102 existence of a relationship of trust and confidence, similar or synonymous to that of a partnership in law. [353] A breach of the Shareholders Agreement, in particular the pre-emption rights and the equity structure agreed upon by the parties in the Shareholders Agreement can have drastic consequences. Needless to say, among them would be a party finding that the joint venture has, without prior agreement, transformed into a joint venture of four or more parties, instead of three. This would be quite a fundamental change and would go to the very foundation of the joint venture. [354] The parties to the Shareholders Agreement would clearly be entitled to place trust and confidence in one another and to rely on each other not to act contrary to the interest of any of the parties to the Shareholders Agreement and thus the joint venture. [355] I therefore find that there exist fiduciary duties owed, inter se, among the parties to the Shareholders Agreement. [356] Although dishonest assistance suggests that the role played was a subsidiary one, that is not necessarily the case. Reference is here again made to Underhill and Hayton, Law of Trusts and Trustees, where in paragraph 95.52, the learned editors state: ‘Assistance

98.52 The word ‘assistance’ might seem to suggest that a defendant must have played some subsidiary part in a design orchestrated by the trustee or fiduciary whose breach of duty the defendant facilitates. … 103 However, there are also cases where the liability has been incurred by defendants who have instigated the primary breach of duty. An example is Royal Brunei Airlines Sdn Bhd v Tan, where the defendant caused the company of which he was a majority shareholder and director to misdirect funds that it held on trust for the claimant. Liability has also been incurred in cases where the defendant has bribed a fiduciary to act against the interest of his principal.’ (Emphasis added) [357] Having procured AMSB through Suresh to bypass the pre-emption rights provisions and to transfer the 100,000 shares to him, and thus a breach of the Shareholders Agreement, Sudhir had in fact procured and instigated a primary breach of fiduciary duty on the part of AMSB. [358] As pleaded in the Amended Statement of Claim, and I agree, the fiduciary duty would include not to knowingly or intentionally breach the Shareholders Agreement, particularly the provisions relating to pre-emption rights. [359] This was a breach that directly undermined NSSB’s interest in the joint venture. It was tantamount to a denial of an option to acquire the shares to be transferred. [360] By AMSB’s breach of the Shareholders Agreement, there was also precipitated a joint venture that was not within the original contemplation of the parties i.e. a joint venture with Sudhir as a member in the joint venture vehicle, NTT, without the agreement of NSSB. 104 [361] While Sudhir may have been recognised as an investor, as I have found, he was not given any right to hold any shares in NTT. As I have also intimated, Sudhir was well aware of this. He did not have any honest belief in the right he claimed he had by virtue of some agreement or the alleged Collateral Understanding. [362] And of the breach of fiduciary duty, though I have held that he knew of the pre-emption rights provisions in the Shareholding Agreement, I am of the view that even if he did not, he could have found out. [363] After concluding that dishonesty was a necessary element, Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming went on to discuss what honesty meant and the applicable test: ‘Thus, for the most part dishonesty is to be equated with conscious impropriety. However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances. The standard of what constitutes honest conduct is not subjective. Honesty is not an optional scale, with higher or lower values according to the moral standards of each individual. If a person knowingly appropriates another's property, he will not escape a finding of dishonesty simply because he sees nothing wrong in such behaviour. In most situations there is little difficulty in identifying how an honest person would behave. Honest people do not intentionally deceive others to their detriment. Honest people do not knowingly take others' property. Unless there is a very good and compelling reason, an honest person does not participate in a transaction if he knows it involves a misapplication of trust assets to the detriment of the beneficiaries. Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless. However, in the situations now under consideration the position is not always so straightforward. This can best be illustrated by considering one particular area: the taking of risks. (Emphasis added) 105 [364] Thus, even if Sudhir did not know of the actual terms in the Shareholders Agreement that might have been breached, being so acquainted and involved with the joint venture as an investor, he could have asked. In the circumstances, not asking or not attempting to find out, was still dishonest of him. [365] Accordingly, I find that Sudhir had dishonestly assisted and had instigated and caused AMSB to breach its fiduciary duty owed to NSSB. [366] In respect of knowing receipt, reliance was placed on the decision of the Court of Appeal in Ooi Meng Khin v Amanah Scotts Properties (KL) Sdn Bhd [2014] 6 MLJ 488 at p 499, where his Lordship Abang Iskandar JCA (as his Lordship then was) stated: ‘[25] It would be useful to now look at the essential ingredients that would need to be proven by a claimant desirous of benefitting from utilising this concept of knowing receipt to found his cause of action against the third party recipient. Again, assistance may be obtained from the case of Zage III's case where three elements needed to be fulfilled, namely: (a) a disposal of the plaintiff's assets in a breach of fiduciary duty (b) the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff, and (c) knowledge on the part of the defendant that the assets received are traceable to the breach of the fiduciary duty.’ (Emphasis added) [367] The learned editors of Underhill and Hayton, Law of Trusts and Trustees, at paragraph 98.11, set out the elements of knowing receipt to be as follows: 106 ‘Elements of liability for knowing receipt

98.11 To make a defendant personally liable to account to the beneficiaries for misdirected trust property on the ground that he has misbehaved unconscionably by receiving the property with knowledge of the breach of trust, the following things must all be established:

misapplication of property held on trust or subject to some other fiduciary duty;

receipt of the property or its traceable proceeds by the defendant

beneficial receipt by the defendant;

a casual link between the defendant’s beneficial receipt and the breach of duty; and

knowledge by the defendant that the property has been transferred in a breach of trust or fiduciary duty, either at the time of receipt or at some later time prior to his dealing with the property for his own benefit.’ [368] Thus, one of the essential elements that is required for this equitable principle to apply is the misapplication of ‘trust property’ by a trustee or fiduciary. [369] As Longmore LJ put it succinctly in Novoship (UK) Ltd and others v Nikitin and others [2014] EWCA Civ 908 in paragraph 89 of the judgment of the Court of Appeal: ’89. We agree that in order to found liability for knowing receipt there must be trust property. After all, receipt of trust property is the gist of the action.’ [370] In paragraph 98.14, the learned editors of Underhill and Hayton, Law of Trusts and Trustees also pointed out that, ‘For the purposes of a knowing receipt claim, ‘property’ includes rights to real property and choses in action (eg the benefit of a contract with a third party or a debt).’ 107 [371] In maintaining its claim of knowing receipt against Sudhir, learned counsel for NSSB contended that the 100,000 NTT shares transferred to Sudhir were NSSB’s ‘assets’. This, it was contended, was by virtue of the pre-emption rights provisions in the Shareholders Agreement. Support for this conclusion, reliance was placed on the decision in Cottrell v King and Another [2004] 2 BCLC 413. [372] In Cottrell v King the articles of a company contained pre-emption provisions governing the transfer of shares. Article 12 required that notice be given to the company where there is a proposed transfer of shares or of beneficial interests therein. The articles were subject to a regulation, regulation 30, under the Companies Regulations. This regulation provided that a person entitled to a share in consequence of the death of a member could elect either to become the holder of the shares by giving notice to the company or to nominate some else to be the transferee of the shares by executing an instrument of transfer. [373] However, in either event, the articles relating to the transfer of shares, including article 12, applied to the notice or instrument of transfer. The claimant’s husband who was a shareholder died. In consequence, the claimant gave notice of her election to have her late husband’s shares registered in her name. Consequently, the shares were transferred to her whereupon she became the registered owner of the shares. Disagreements arose and the first defendant sought to invoke the pre-emption provisions. The claimant commenced action and sought a declaration that the first defendant, as a director of the company, knew or ought to have known of the pre-emption provisions but had opted not to exercise his rights and had thereby waived them. The first defendant 108 counterclaimed seeking to set aside the transfer of the shares to the Claimant. [374] Kevin Garnett QC, sitting as a deputy Judge of the High Court in Cottrell v King, held that the pre-emption provisions applied to the transfer of the shares to the claimant. It was also held that notice of the claimant’s election was given by the claimant and the effect was to convert the first defendant’s right of pre-emption into an option to purchase the shares at a price certified by the auditors as a fair price. In consequence, it was held that an equitable right was created in the shares. It was stated in Kevin Garnett QC’s judgment that: ‘[25] The effect of Mrs Cottrell giving notice to the company and her notice being treated as a transfer notice was to convert Mr King’s right of pre-emption into an option to purchase the shares at a price certified by the auditors as a fair price. Unlike the position in Tett v Phoenix Property, the legal title to the shares became vested in Mrs Cottrell [the claimant] once her name was entered in the register of shareholders, but she was not a purchaser for value and thus took the shares subject to Mr King’s [first defendant] equitable interest arising out of the option.’ (Emphasis added) [375] In Cottrell v King, reliance was placed on the legal analysis of

Vinelott J in Tett v Phoenix Property and Investments Co Ltd [1984] BCLC Vinelott J’s statement quoted in Cottrell v King at p 420, was as follows: ‘[23] Vinelott J analysed the legal effect of what had happened in the case before as follows (at p619): ‘… the other members and they had declined the offer or until a reasonable period for acceptance had expired without any members accepting the offer. He submitted, rightly I think, that the other members' rights to require Marjorie's executors to offer the shares to them before transferring them to the plaintiff matured 109 into an option to purchase the shares at the fair value to be determined by the auditors when the transfers were executed and that … option created an equitable interest prior in time to the interest taken by the plaintiff under the transfer. Until registration the equitable interest of the other members in the shares would prevail over the subsequent interest of the plaintiff whether the members had notice of his interest or not (see Roots v Williamson (1888) 38 ChD 485). After the registration of the plaintiff as the holder of the shares in question the priority of the option would depend on whether the plaintiff had notice actual or constructive that the pre-emption provisions had not been complied with at the time when the transfer was executed (see Dodds v Hills (1865) 2 Hem & M 424). In that case, of course, the plaintiff was purchaser for value. The decision was reversed (see [1986] BCLC 149), but not on this point. (Emphasis added) [376] Thus, NSSB maintained that its ‘assets’ in this case was its equitable interest in the 100,000 NTT shares which arose and vested when notice of the transfer to Sudhir was given, coupled with the pre-emption provisions in the Shareholders Agreement. [377] In reversing the decision of Vinelott J, Slade LJ in the Court of Appeal, in Tett v Phoenix Property and Investments Co Ltd [1986] BCLC 151 at p 159, stated of Vinelott J’s reasoning as follows: ‘The judge's solution to this problem, if I have understood it correctly, was as follows. … He considered that the words 'shall be so offered' in subcl (F) are used in the sense 'shall be deemed to be so offered', and that the offer by the intending transferor must be one which is capable of acceptance by the persons to whom it is to be addressed, so as to give rise to a binding contract. Following this reasoning, he considered that the other members' rights to require the executors to offer the shares to them, before transferring them to the plaintiff, 'matured into an option to purchase the shares at the fair value to be determined by the auditors' when the transfer 110 in favour of the plaintiff was executed and that that option created an equitable interest in them ([1984] BCLC 599 at 619). He considered that any such offer by a member wishing to transfer his shares may be accepted 'either by a member to whom it is made or with his or her consent by a spouse, parent or adult child of his or hers' ([1984] BCLC 599 at 614). I find myself, with respect, unable to adopt this particular solution to the problem. It would involve the possibility that an intending transferor who made an offer in this sense (or was deemed to make such an offer) to sell his shareholding could find himself subsequently confronted with acceptances from numerous persons and thus with numerous contracts obliging him to sell the same holding – and exposing him to numerous claims for damages in the event of breach. This cannot, in my view, have been the parties' intention.’ [378] The idea that a notice of transfer would convert a pre-emption right into an option to purchase and that option created an equitable interest in the shares in question, on the facts of that case, was not actually accepted by the Court of Appeal for the reasons pointed out by Slade LJ. [379] The problem was that in Tett v Phoenix Property and Investments Co Ltd, no mechanism was provided for how the shares would be sold if more than one shareholder opted to buy. As Slade LJ pointed out: ‘The difficulty (submitted by counsel for the plaintiff to be insuperable) lies in formulating, by a process of implication, the machinery by which the other members and their specified relatives were to be given the opportunity to put in an offer for the shares of a person proposing to transfer his shares to an outsider.’ [380] Vinelott J’s solution was to suggest a term to be implied such that either the shares fell to be apportioned between them pro rata 111 according to their respective shareholdings or the offeror had a right of selection. This was a solution which Slade LJ did not find acceptable stating, ‘For my part, however, I think that neither implication would be justified. I would find it impossible to attribute with any confidence an intention of either such nature to the parties to the contract embodied in this company’s articles of association.’ [381] Such was not a problem in the case at hand. The Shareholders Agreement anticipated the possibility of there being more than two shareholders and under clause 9.1(e), provided the directors of NTT to allocate the shares to be purchased on a pro rata basis, should it be necessary. [382] However, and significantly for the purposes of knowing receipt, Vinelott’s view that the pre-emption rights could convert into an option to purchase which thereby created an equitable interest in the shares in question was not considered to be wrong in principle by the Court of Appeal. As Kevin Garnett QC pointed out in Cottrell v King: ‘The decision [Vinelott J’s decision in Tett v Phoenix Property and Investments Co Ltd] was reversed on appeal (see [1986] BCLC 149), but not on this point.’ [383] In Re Coroin Ltd (2) [2013] 2 BCLC 583, Moore-Bick LJ in distinguishing Cottrell v King explained as follows: ‘Cottrell v King differs from the present case in that the transferee became the legal owner of the shares by virtue of being registered as the holder, although she took them subject to the equity in the form of the option to purchase which had been created under the articles in favour of the other 112 member as a result of her giving notice to the company of her wish to be registered as holder.’ (Emphasis added) [384] Although not directly in issue, that an equity could arise in the form of an option to purchase was also not questioned. [385] In light of the foregoing, the notice given by Suresh to the Board of Directors of NTT by way of his email of 15th November 2015 can be treated, certainly in substance, as AMSB’s ‘Transfer Notice’ required under clause 9.1(c) of the Shareholders Agreement. [386] That email by Suresh was sufficiently clear that Sudhir had requested the transfer of NTT shares held by AMSB and Suresh, in so informing the Board of NTT, stated that, ‘We will do the necessary to effect this.’ [387] Suresh’s email, constituting the ‘Transfer Notice’, triggered the pre-emption rights provisions under the Shareholders Agreement. This, on the authority of Cottrell v King, converted NTT’s right of pre-emption into an option to purchase the NTT shares to be transferred at the ‘Prescribed Price’, to be determined in accordance with the Shareholders Agreement. [388] That option, based on Tett v Phoenix Property and Investments Co Ltd [1984] BCLC and Cottrell v King, created an equitable interest in the shares which are the subject of the option, in favour of NSSB. 113 [389] I am, however, more inclined to the view that rather than having created an equitable interest in the shares as such, the option created by Suresh’s notice created an equity in favour of NSSB to the 100,000 NTT shares. [390] It was an equity, as opposed to an equitable right or beneficial interest that was acquired by NSSB. As an equity, it is enforceable by means of equitable remedies such as injunctions and specific performance, bearing in mind that NTT shares are not available in the market. This is particularly so since NTT is a joint venture company especially established for specific purposes coupled with an agreed equity ratio to be maintained by the joint venture parties in NTT. [391] The difficulty with the idea of an equitable interest having been created in the shares lies in the fact that NSSB had neither opted to purchase the 100,000 NTT shares nor paid any money to AMSB for it. [392] A distinction is here made between having beneficial or equitable interest in the 100,000 NTT shares as opposed to merely having a mere equity in respect of them. This distinction is explained in the 34th Edition of Snell’s Equity in paragraph 2-006. It states as follows: ‘1.

Distinction. In analysing equitable rights in relation to property, it is common to distinguish equitable interests from mere equities. The nature of a mere equity is best understood by comparing certain examples with equitable interests. The claim of a beneficiary against the trust asset and the rights of an equitable charge to enforce his security against charged property are equitable interests. But the right of a claimant to rescind a transfer of property for fraud, misrepresentation, or undue influence, or 114 possible to claim an equitable interest in a substituted asset into which he can trace his original property, would all be analysed as mere equities. In this context, a mere equity is an inchoate right binding on specific property. In functional terms, to say that person has a “mere equity” in relation to property means that the property is susceptible to an equitable proprietary claim if and when the claimant elects to enforce it. The claimant must perform some further legal act to cause his claim to crystallise as an equitable interest. Of itself a mere equity does not give the claimant a beneficial interest or an extant security in the property. These only arise, for example, once the claimant has successfully rescinded the transfer of property or elected to assert an interest in the traceable proceeds of his original asset. Mere equities arising from vitiated transfers of property are sometimes called proprietary “powers” to emphasise their inchoate status, and to distinguish them from the fully vested interests that arise once the claimant elects to enforce them.’ (Emphasis added) [393] In the circumstances of the current case, in my view, to acquire an equitable interest in the 100,000 NTT shares, or sometimes referred to as a ‘beneficial interest’ (as opposed to ‘legal interest’), NSSB had to have done more. The fact is that NSSB had technically neither opted to purchase the shares nor paid any consideration for them, in accordance with the terms of the Shareholders Agreement. [394] That it did not have the opportunity to do so matters not, as the fact remains that it had done nothing to acquire any interest in the 100,000 NTT shares. NSSB had not done all that it could to acquire the 100,000 NTT shares to put it, for example, within that category of cases such as Re Rose [1952] Ch 499 and Re Fry [1946] Ch 312 or for that matter those cases where, prior to registration, beneficial interest in land was held to have been acquired by a purchaser if full payment had been made (see Borneo Housing Mortgage Finance Bhd v. Time Engineering Bhd [1996] 115 2 CLJ 561; [1996] 2 MLJ 12; Temenggong Securities Ltd & Anor v. Registrar of Titles, Johore & Ors [1974] 1 LNS 175; [1974] 2 MLJ 45 and Karrupiah Chettiar v. Subramaniam [1971] 1 LNS 43; [1971] 2 MLJ 116). [395] The pre-emption rights and the option created by Suresh’s notice to the Board of Directors of NTT may also be viewed merely as a form of ‘executory contract’ described by Lord Scott of Foscote in Criterion Properties Ltd v Stratford UK Properties Ltd [2004] UKHL 28, where he stated: ‘[27] … The word “receipt” in the expression “knowing receipt” refers to the receipt by one person from another of assets. A person who enters into a binding contract acquires contractual rights that are created by the contract. There may be a “receipt” of assets when the contract is completed and the question whether there is “knowing receipt” may become a relevant question at that stage. But until then there is simply an executory contract which may or may not be enforceable. The creation by the contract of contractual rights does not constitute a “receipt” of assets in the sense that a “knowing receipt” involves a receipt of assets. The question whether an executory contract is enforceable is quite different from the question whether assets of which there has been a “knowing receipt” are recoverable from the recipient. To confuse these two questions is likely to lead, and in the present case has, in my opinion, led, to further confusion.’ [396] In Ultraframe (UK) Ltd v Fielding and others and Conjoined Cases [2005] EWHC 1638 (Ch), Lewison J concluded of Lord Scott’s explanation in these words: ‘[1493] Thus Lord Scott distinguishes between rights held under an executory contract with the company which do not count as trust property (or assets); and benefits received under a completed contract, which can. At the stage when the contract is merely executory the only question is whether the contract can be enforced by the fiduciary against the company. That does not depend on "knowing receipt" at all.’ 116 [397] In light of the foregoing, I am of the view that no ‘property’ or ‘asset’ of NSSB was received by Sudhir and NSSB’s case of knowing receipt was not made out. [398] NSSB would have acquired equities in respect of the 100, 000 NTT shares on the authority of Cottrell v King. There were also undeniably contractual rights that NSSB had under the Shareholders Agreement including the pre-emption rights provided, which was converted to an option by AMSB’s notice. However, the 100,000 NTT shares were not ‘property’ or ‘assets’ held in trust for NSSB for the purposes of knowing receipt. Remedies [399] In Suit 113, the wrong was in the transfer to and registration of the 100,000 NTT shares in the name of Sudhir in breach of the Shareholders Agreement. [400] There was no vitiating element, such as fraud, that might affect the validity of the transfer itself ab initio. [401] While NSSB may have acquired equities in respect of the shares it never became the legal and registered owner of the 100,000 NTT Shares. As the pre-emption rights provisions in the Shareholders Agreement were not complied with by AMSB, NSSB was not offered those shares, did not exercise any option to purchase them or make any payment for them. 117 [402] Indeed, NSSB was not technically obliged to acquire the 100,000 NTT shares, even if they were offered to NSSB. Accordingly, I am of the view that it cannot be said that NSSB had any right to any of the dividends that were paid to Sudhir in respect of those shares. Putting it the other way around, the dividends paid to Sudhir in respect of those shares were not losses suffered by NSSB. [403] Whatever remedy NSSB may have, including whether it be the loss of a chance to receive the dividends that the 100,000 NTT shares attracted, would be a matter it would have to take up with AMSB and/or NTT, in contract. It must be borne in mind that Sudhir was never a party to the Shareholders Agreement. [404] As far as NTT was concerned, if any dividends were to be paid out to shareholders, they had to be paid to the registered shareholders in whom legal interest vests. While registered as the shareholder in respect of the 100,000 NTT shares Sudhir is in law the legal owner and when declared, he would be entitled to payment of dividends. [405] Any dividends wrongly paid by NTT to Sudhir would be a loss to NTT. NTT being a party to the Shareholders Agreement may have issues arising from the breach of the pre-emption rights provisions and the consequential payment of dividends to Sudhir, but those are issues not relevant for this Court to determine in the current suits. I merely wish to emphasise that the dividends paid to Sudhir were not losses suffered by NSSB. 118 [406] The object of a tortious claim is primarily to put the party wronged in the position that it would have been in, had the tort not been committed. In most cases in respect of tortious claims, that would sound in damages. In the case at hand however, that position would be one where the 100,000 NTT shares remained with AMSB. If AMSB still wishes to transfer those or any more NTT shares to Sudhir, the pre-emption provisions would have to be complied with. The remedy to enforce that would again lie in contract against the parties to the Shareholders Agreement. [407] While the remedy in tort is often to be found in the form of damages, in this case however, damages would clearly not be an adequate remedy. [408] As a private limited company, NTT shares are not freely available. Furthermore, damages would not place the parties in the position when the joint venture at NTT level would consist of only NSSB, AMSB and NTT, as contemplated by the Shareholders Agreement, unless all agreed otherwise or if AMSB or NSSB declines an option to purchase shares in NTT that were to be offered to a third party. [409] Among the remedies sought by NSSB in Suit 113 was a mandatory injunction against Sudhir to retransfer the 100,000 NTT shares in issue, to AMSB. [410] This would remedy the wrong that was caused by Sudhir’s tortious conduct and put the parties in the position that they would have been in, if the tort was not committed. May the Court make such an order? 119 [411] In Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd and Others [1974] QB 142, an action was founded on inter alia the procurement of a breach of what was termed a ‘solus tie agreement’ for the supply and resale of motor fuels at a designated garage sited on a piece of land. The agreement was between Esso and Kingswood. Kingswood, a company, was subsequently taken over by another company, Impact Holdings. Impact Holdings then procured Kingswood to transfer the land upon which the garage stood to its subsidiary, Impact Motor. Esso commenced an action for injunctions against Kingswood from acting in breach of the solus tie agreement. Esso’s action included a claim against Impact Holdings and Impact Motor for inducing the transfer of the land in breach of the solus tie agreement. Among the reliefs sought was a mandatory injunction for the transfer of the land from Impact Motor back to Kingswood. One of the arguments against this relief sought was that the Court had no power to order the retransfer, since the legal title to the land had been transferred from Kingswood to Impact Motor. [412] Relying on the observations of Lord Denning MR in Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106 and later in Acrow (Automation) Ltd v Rex Chain Belt Inc [1971] 1 WLR 1676, where the tort of unlawful interference was considered, and where Lord Denning observed, ‘He is liable in damages: and, in a proper case an injunction can be granted against him’, Bridge J stated: ‘I am asked to enforce the personal liability incurred by a tortfeasor to undo the consequences of his tort which could have been restrained before it was committed. In a proper case I ask myself: what reason can there be in principle why the tortfeasor should not be ordered to undo that which he has done?’ 120 Bridge J found no reason why the mandatory injunction sought for the retransfer of the land to Kingswood could not issue and went on to hold that it was a proper case to do so, even though the remedy sought was by way of an interlocutory application. [413] In Trust Corp plc v Ural Caspian Oil Corp Ltd and others [1995] 1 All ER 157, the mandatory injunction granted by Bridge J in Esso Petroleum Co Ltd v Kingswood Motors was described by Sir Thomas Bingham MR as a ‘salutary remedy devised by Bridge J’ and was similar to the ‘…measures the court adopts to protect the efficacy of its orders’. [414] In respect of dishonest assistance, if a dishonest assistant had made any profit out of his wrongdoing he may be made to disgorge the profit made. As Longmore LJ stated in Novoship (UK) Ltd v Nikitin; ‘75. … But if the limit of a dishonest assistant's liability is a liability to make good losses suffered by the beneficiary it is an odd phrase to use. We agree with Snell's Equity (32nd ed §30-079) that, subject to one qualification to which we will come, both a liability to make good loss and a liability to account for profits “follow from the premise that the defendant is held liable to account as if he were truly a trustee to the claimant.”

In our judgment this position is supported both by policy and authority. The policy was articulated by Gibbs J in Consul Development Pty Ltd v. DPC Estates Pty Ltd (1975) 132 CLR 373, 397. He said: “If the maintenance of a very high standard of conduct on the part of fiduciaries is the purpose of the rule it would seem equally necessary to deter other persons from knowingly assisting those in a fiduciary position to violate their duties. If, on the other hand, the rule is to be explained simply because it would be contrary to equitable principles to allow a person to retain a benefit that he had gained from a breach of his fiduciary duty, it would appear equally inequitable that one who knowingly took part in the breach should retain a benefit that resulted therefrom. I therefore conclude, on 121 principle, that a person who knowingly participates in a breach of fiduciary duty is liable to account to the person to whom the duty was owed for any benefit he has received as a result of such participation.” …

As we have seen, the decision in Royal Brunei Airlines v Tan altered the conditions that must be satisfied before liability arises, but did not, in our judgment, alter the nature of the liability. The nature of the liability, as it seems to us, is that the knowing recipient or dishonest assistant has, in principle, the responsibility of an express trustee. That responsibility would include, in an appropriate case, a liability to account for profits. … …

There is one further point to be made. As Lord Nicholls explained in Attorney-General v Blake [2001] 1 AC 268, 279-80, in proceedings for equitable wrongs in the Court of Chancery the court had a discretion to order an account of profits, even in cases which did not involve fiduciaries. Similarly, Arden LJ pointed out in Murad v Al-Saraj [2005] EWCA Civ 959, [2005] WTLR 1573 at paras 46 and 56 that it has long been the law that equitable remedies for the wrongful conduct of a fiduciary differ from those available at common law: “Equity recognises that there are legal wrongs for which damages are not the appropriate remedy”. Where, as here, the equitable wrong is itself linked with a breach of fiduciary duty we see no reason why a court of equity should not be able to order the wrongdoer to disgorge his profits in so far as they are derived from the wrongdoing. (Emphasis added) [415] The benefit that Sudhir had acquired by the breach of fiduciary duty that he had instigated and caused was the 100,000 NTT shares registered in his name. He can therefore be made to account for those shares. However, to have the shares transferred to NSSB would not be equitable, as NSSB had not opted for or paid anything for them. 122 [416] In the circumstance, requiring Sudhir to account for the shares, as a constructive trustee, by retransferring them to AMSB would be the most equitable outcome. [417] A retransfer of the 100,000 NTT shares to AMSB, a permissible remedy in respect of both the tortious claim as well as in respect of knowing assistance, would address any loss or damage that NSSB might suffer by reason of the transfer. Apart from the transfer of the 100,000 NTT shares to Sudhir, no other damage was proven to have been suffered by NSSB. [418] There was also a prayer for exemplary damages. I do not think it is warranted in this case. We must be reminded that exemplary damages are only awarded as an exception. As Lord Justice Flaux reminded in the decision of the English Court of Appeal in AXA Insurance UK plc v. Financial Claims Solutions Ltd and others [2018] EWCA Civ 1330 referring to the judgment of Lord Devlin in Rookes v Barnard [1964] AC 1129: ‘25. It is important to keep in mind that exemplary damages remain anomalous and the exception to the general rule. It would therefore be inappropriate to extend the circumstances in which they can be awarded beyond the three categories of case identified by Lord Devlin.’ [419] In light of the foregoing, NSSB’s claim is allowed and accordingly, the mandatory injunction sought for the retransfer of the 100,000 NTT shares to AMSB in paragraph 39.3 of the Amended Statement of Claim is allowed. However, instead of the eight days sought in paragraph 39.3, Sudhir is granted fourteen days after service of the order upon him to effect the retransfer. 123 [420] Also granted is the order sought in paragraph 39.4 of the Amended Statement of Claim that should Sudhir default in effecting the retransfer, Deputy or Senior Assistant Registrar is empowered to execute the necessary transfer instruments to effect the retransfer of the 100,000 NTT shares to AMSB. [421] I find that the declarations sought are not necessary and neither is the prohibitory injunction. The declaration relating to the appointment of Sudhir in particular, is no longer warranted in light of the declaration made in Suit 165. Summary [422] In summary,

Sudhir’s claim in Suit 165 is allowed to the extent that it is declared that his appointment onto the Board of Directors of NTT was valid;

(ii) NSSB’s claim against Sudhir in Suit 113 is allowed and a mandatory injunction against Sudhir is issued for the retransfer of the 100,000 NTT shares to AMSB within fourteen days from service of the order and in default the Deputy or Senior Assistant Registrar is empowered to execute the necessary transfer instruments to effect the retransfer as per prayers 39.3 and 39.4 of the Amended Statement of Claim. 124 Costs [423] Submissions from learned counsel for the parties were heard on the issue of costs after the Court’s decision was handed down. [424] In respect of Suit 165, half costs amounting to RM100,000.00 was awarded in favour of the 1st and 2nd Defendants as Sudhir had succeeded in part of his claim. Costs of RM20,000.00 was awarded in favour of the 4th Defendant. The 3rd Defendant in Suit 163 did not seek any costs and thus no order for costs was made in respect of the 3rd Defendant. [425] In respect of Suit 113, costs were awarded to the Plaintiff in the sum of RM100,000.00. [426] All costs awarded are subject to the issue of the allocatur certificate. Dated this 17th day of December 2020 -sgd- (DARRYL GOON SIEW CHYE) Judge High Court of Malaya Kuala Lumpur (Commercial NCC 3) 125 CASES: CITED Acrow (Automation) Ltd v Rex Chain Belt Inc [1971] 1 WLR 1676 AXA Insurance UK plc v. Financial Claims Solutions Ltd and others [2018] EWCA Civ 1330 Bank of Baroda Ltd v Punjab National Bank Ltd & Ors [1944] 2 All ER 83 Barnes v Addy (1874) L.R. 9 Ch App 244 Borneo Housing Mortgage Finance Bhd v. Time Engineering Bhd [1996] 2 CLJ 561; [1996] 2 MLJ 12 Bristol and West Building Society v Mothew [1998] Ch 1 British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479 Caltong (Australia) Pty Ltd (formerly known as Tong Tien See Holding (Australia) Pty Ltd) and another v Tiong Tien See Construction Pte Ltd (in liquidation) and another appeal [2002] 3 SLR 241 Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd [1999] 1 SLR(R) 628 Chirnside and Another v Fay [2007] 2 LR 407 Choon Shin Cheong v Suruhanjaya Syarikat Malaysia & Anor [2020] 5 MLJ 523 Cottrell v King and Another [2004] 2 BCLC 413 Criterion Properties Ltd v Stratford UK Properties Ltd [2004] UKHL 28 De Tebrau Makmur Sdn Bhd & Anor v Bank Kerjasama Rakyat Malaysia Bhd [2017] MLJU 201 Deutsche Bank (M) Bhd v MBf Holdings Bhd & Anor [2015] 6 MLJ 310 126 Emerald Construction Co Ltd v Lowthian [1966] 1 WLR 691 Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd and Others [1974] QB 142 Federal Court in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Berhad [1995] 3 MLJ 331 Greig v Insole [1978] 1 WLR 302 Guan Teik Sdn Bhd v Haji Mohd Noor Bin Haji Yakob & Ors [2000] 4 MLJ 433 Gurbachan Singh Bagawan Singh & Ors v. Vellasamy Pennusamy & Other Appeals [2015] 1 CLJ 719 JH Milner & Soons v Percy Bilton Ltd [1996] 2 All ER 894 Karrupiah Chettiar v. Subramaniam [1971] 1 LNS 43; [1971] 2 MLJ 116 Kuan Pek Seng & Alan Kuan v Robert Doran & Ors and other appeals [2013] 2 MLJ 174 Leisure Dotcom Sdn Bhd v Globesource Sdn Bhd [2015] MLJU 319 Loh Holdings Sdn Bhd v Peglin Development Sdn Bhd & Anor [1984] 2 MLJ 105 Lumley v Gye (1853) 118 ER 749 Malaysian International Trading Corp Sdn Bhd v RHB Bank Bhd [2016] 2 MLJ 457 Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95 National Company for Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300 127 Newacres Sdn Bhd v Sri Alam Sdn Bhd [2000] 2 MLJ 353 Novoship (UK) Ltd and others v Nikitin and others [2014] EWCA Civ 908 OBG v Allan [2008] 1 AC 1 Ooi Meng Khin v Amanah Scotts Properties (KL) Sdn Bhd [2014] 6 MLJ 488 Re Coroin Ltd (2) [2013] 2 BCLC 583 Re Fry [1946] Ch 312 Re Rose [1952] Ch 499 Re Thien Kon Tai [2008] 6 MLJ 278 Rookes v Barnard [1964] AC 1129 Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 A.C. Temenggong Securities Ltd & Anor v. Registrar of Titles, Johore & Ors [1974] 1 LNS 175; [1974] 2 MLJ 45 Tett v Phoenix Property and Investments Co Ltd [1984] BCLC 599 Tett v Phoenix Property and Investments Co Ltd [1986] BCLC 151 Tett v Re Coroin Ltd (2) [2013] 2 BCLC 583 Thompson & Co Ltd v Deakin [1952] Ch 646 Torquay Hotel Co Ltd v Cousins [1969] 2 Ch 106 Tradium Sdn Bhd v Zain Azahari bin Zainal Abidin & Anor [1995] 1 MLJ 668 Trust Corp plc v Ural Caspian Oil Corp Ltd and others [1995] 1 All ER 157 Ultraframe (UK) Ltd v Fielding and others and Conjoined Cases [2005] EWHC 1638 (Ch) 128 United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1 Wytcherley v Andrews (1871) L.R. 2 P. & D. Zim Integrated Shipping Services Ltd & Ors v Dafni Igal & Ors [2010] 2 SLR 426 LEGISLATION AND LEGAL TEXT CITED Text Books/Articles  ‘A Perspective On The Economic Torts’ by Lee Eng Beng in the Singapore Journal of Legal Studies [1996]  Clerk & Lindsell on Torts  Underhill and Hayton, Law of Trusts and Trustees Acts  Partnerships Act 1961 Counsel/Solicitors For the Plaintiff : Robert Low Choon Chong (Karen Yong Hwei Woon, Chong Lip Yi & Khong Mei-Yan with him) Tetuan Ranjit Ooi & Robert Low No. 53, Jalan Maarof Bangsar 590000 Kuala Lumpur Tel. No. 03-2282 0820 Fax. No. 03-2282 7026 129 For the 1st and 2nd Pang Kong Leng (Chok Zhin Theng & Defendants Jonathan Lim with him) Tetuan Cheah Teh & Su L-3-1, No. 2, Jalan Solaris Solaris Mon’t Kiara 50480 Kuala Lumpur Tel. No. 03-6203 6918 Fax. No. 03-6203 6928 For the 3rd Defendant Lim Tuck Sun (Najwa Hanee Hazza with him) Tetuan Chooi & Company and Cheang + Ariff Level 5, Menara BRDB 285, Jalan Maarof Bukit Bandaraya 59000 Kuala Lumpur Tel. No. 03-2055 3888 Fax. No. 03-2055 3880 For the 4th Defendant David Mathews (Olivia Loh & Chow Xing Hui with him) Tetuan Gananathan Loh B-06-12, Company Kiaramas No. 1, Jalan Desa Kiara Mont’Kiara 50480 Kuala Lumpur Tel. No. 03-6201 9989 Fax. No. 03-6201 9089