Kian Ho Bearings (M) Sdn. Bhd. v Wong Fock Mang (WA-22NCC-84-02/2023)

WONG FOCK MANG [NRIC No.: 561224-01-6467]

CHI YI AUTOMATION SDN BHD [Company Reg. No.: 200401033455 (671963-T)]

CHIN YOKE KOON [NRIC No.: 590116-05-5082]

WONG WAN YU [NRIC No.: 000917-10-0514]

CHIN GEOK MOOI [NRIC No.: 520122-05-5082]

KAI CHEE INDUSTRIAL SDN BHD [Company Reg. No.: 201801044533 (1306565-X)]

LAI MOON CHIEN [NRIC No.: 760617-14-6096]

TEO CHEE BOON [NRIC No.: 800115-01-5823]

CHENG HANG WEI [NRIC No.: 811013-07-5175]

KOH HAI YANG [Singapore NRIC No.: S6932017A] …DEFENDANTS (In the Main Action) BETWEEN KOH HAI YANG [Singapore NRIC No.: S6932017A] … PLAINTIFF

KIAN HO BEARINGS (M) SDN BHD [Company Reg. No.: 197501001547 (23188-V)]

TEO TENG BENG [Singapore NRIC No.: S1096728G] … DEFENDANTS (In the Counterclaim Action) JUDGMENT Introduction [1] Enclosure 122 was an application filed by Teo Teng Beng, who is the 2nd Defendant in the Counterclaim filed by the 10th Defendant in this action. The Plaintiff is the 1st Defendant in the Counterclaim. [2] Enclosure 122 was filed based on Order 12 Rule 10, Order 18 Rule 19 and Order 92 Rule 4 of the Rules of Court 2012 (“ROC 2012”) and pursuant to the inherent jurisdiction of the Court. The primary ground for the application was that this Court has no jurisdiction to entertain the 10th Defendant’s Counterclaim against Teo Teng Beng. To appreciate the application, it is necessary to refer to a previous application filed by Teo Teng Beng in Enclosure 28 where he had applied to set aside an ex parte order allowing a Third Parties Notice to be served out of jurisdiction on him and one Ho Hui Min, both of whom reside in Singapore. Background Facts [3] Sometime on 19.4.2023, the 1st to 9th Defendants issued a Third Parties’ Notice against Teo Teng Beng (“Gilbert Teo”) and Ho Hui Min (“Joyce Ho”), both residing in Singapore. Leave to serve the Third Parties’ Notice out of jurisdiction was granted ex parte on 24.5.2023 (“Ex Parte Order”). [4] By Enclosure 28, the Third Parties applied to set aside the Third Parties Notice on the ground that the Court had no jurisdiction to make the Ex Parte Order. [5] Enclosure 28 was allowed by this Court having been persuaded by learned counsel for the Third Parties that Order 11 Rule 1(F), (H) and (J) of the ROC 2012 which were relied upon as the applicable gateways for service out of jurisdiction of the Third Parties Notice were not engaged at all. [6] More specifically, the Third Parties Notice which was based on a claim for indemnity and contribution did not come within any of the gateways stated in Order 11 Rule 1 of the ROC 2012. For context, the Plaintiff’s claims against the 1st to 9th Defendants are for breach of fiduciary duties, breach of duties of loyalties as well as a claim to recover secret profits allegedly resulting from a competing business by the 3rd Defendant. It was the Defendants’ case that the 3rd Defendant’s alleged ‘competing business’ was discussed and consented to by the Plaintiff, together with Gilbert Teo and one Koh Hai Yang (“KHY”), a director of the Plaintiff. On this basis, the Defendants issued the Third Parties Notice to seek indemnity and contribution from Gilbert Teo, whom the Defendants claimed is a de facto director of the Plaintiff. At the hearing for Enclosure 28, KHY had affirmed an affidavit in support of the 1st to 9th Defendants’ contention. [7] Premised on the finding that the gateways in Order 11 Rule 1 were not applicable to the claims made in the Third Parties Notice, this Court made the order on 31.10.2023 to set aside the Ex Parte Order and also granted a declaration as prayed that ‘this Court and or any High Court of Malaya does not have jurisdiction over the Third Parties in respect of the subject matter of the Third Parties Notice and or any reliefs or remedy sought in the Third Parties Notice’ (“the Declaration”). [8] Subsequent to the aforesaid, the Plaintiff amended its Writ and Statement of Claim to add KHY as the 10th Defendant to the action. [9] In response, KHY filed a Counterclaim against the Plaintiff and Gilbert Teo. In essence, KHY claimed that both the Plaintiff and Gilbert Teo are conspiring to injure him by adding him as a defendant to the present action in response to KHY filing his affidavit in support of the Defendants in respect the Third Parties’ application under Enclosure 28. By his Counterclaim, KHY mounted a cause of action against the Plaintiff and Gilbert Teo based on the tort of abuse of process and for indemnity and contribution for any losses that he may suffer by reason of the wrongful action filed against him. [10] By Enclosure 122, Gilbert Teo sought to strike out and or dismiss KHY’s Counterclaim against him on the ground that this Court has already made the Declaration that it does not have any jurisdiction over him in respect of the subject matter under the Third Parties Notice. It was contended by learned counsel for Gilbert Teo that the Counterclaim filed by KHY falls squarely within the subject matter of the Third Parties Notice and by reason thereof, the Counterclaim should be dismissed or struck out for want of jurisdiction. Court’s Considerations [11] At the outset, it must be noted that the Declaration was made as a consequence of this Court’s finding that the Order 11 Rule 1(F), (H) and (J) of the ROC 2012 which were relied upon as the applicable gateways for service out of jurisdiction of the Third Parties Notice by the 1st to 9th Defendant were not engaged at all. [12] By reason of the aforesaid, the Court made the Declaration in terms of Order 12 Rule 10(1)(g) of the ROC 2012 which states: “(g) a declaration that in the circumstances of the case the Court has no jurisdiction over the defendant in respect of the subject matter of the claim or the relief or remedy sought in the action; …” [13] Because the gateways for which the 1st to 9th Defendants had relied upon to obtain the Ex Parte Order were determined at the hearing of Enclosure 28 to be inapplicable, it meant that this Court had no jurisdiction to make the order for the service of the Third Parties Notice out of jurisdiction at all. Accordingly, to my mind, the ‘subject matter of the claim or the relief or remedy sought in the action’ in the Declaration were intended to reference the gateways under Order 11 Rule 1 of the ROC 2012 which were relied on by the 1st to 9th Defendants. In other words, in respect of the claim for indemnity and contribution, the Court has no jurisdiction over the Third Parties who are residing outside of this Court’s jurisdiction since the subject matter or the relief or remedy sought did not come within any of the gateways provided under Order 11 Rule 1 of the ROC 2012. [14] However, in the current application under Enclosure 122, this Court was not dealing with Order 11 Rule 1 of the ROC 2012 at all. Instead, this Court in considering KHY’s Counterclaim needed to be satisfied that it has the jurisdiction under section 23(1) of the Court of Judicature Act 1964 (“CJA 1964”). [15] In this case, the Plaintiff who is the 1st defendant in the Counterclaim is without dispute within the jurisdiction of this Court. This means that this Court undeniably has the jurisdiction to try the Counterclaim under limb (b) of section 23(1)(b) of the CJA 1964, namely that ‘one or several of the defendants reside in Malaysia’. [16] In any case, to my mind, the subject matter of KHY’s Counterclaim is not the same as the subject matter in the Third Parties Notice. The Counterclaim is premised on a cause of action in tort for abuse of process and conspiracy whilst the Third Parties Notice was grounded on a claim for indemnity and contribution as joint tortfeasors. The cause of action for abuse of process is recognized by our Court of Appeal in Malaysia Building Society Berhad v. Tan Sri General Ungku Nazaruddin Ungku Mohamed (1998) 1 MLRA 67. [17] Whilst it is true that the Counterclaim also prays for indemnity and contribution, the same are sought as reliefs arising from the abuse of process and not in the similar vein as the indemnity and contribution under the Third Parties Notice by the 1st to 9th Defendants. [18] The parties are also different. When the Declaration was made, it was to deal with the claims by the 1st to 9th Defendants against Gilbert Teo and Joyce Ho as Third Parties for indemnity and contribution purportedly for already agreed to the 3rd Defendant’s allegedly ‘competing business’. However, in the present Counterclaim, the disputes are between KHY as the claimant and the Plaintiff and Gilbert Teo as the defendants for the tort of abuse of process and conspiracy. KHY was never a party to the action at the time the Declaration was made by this Court. The Declaration, quite obviously, could not have been intended to cover KHY’s Counterclaim at all. Conclusion [19] In the premises and based on the reasons above, this Court dismissed with costs the application under Enclosure 122 by Gilbert Teo. Dated the 2nd day of January 2024 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 & Admiralty Counsel:

Mr. Aravind Kumarr a/l Muniandy for Plaintiff & 1st Defendant in

Mr. Steven Wong Chin Fung together with Mr. James Ng Kean Yip and YM Tengku Mohd. Hazwanhisyam bin T. Zulkarnaini for 1st to 9th Defendants

Mr. Ong Siew Wan for 10th Defendant & Plaintiff in Counterclaim

Mr. Zack Lim for 2nd Defendants in Counterclaim

Malaysia Building Society Berhad v. Tan Sri General Ungku

Section 23(1) of the Court of Judicature Act 1964 2. Order 11 Rule 1(F), (H) and (J), Order 12 Rule 10, Order 18 Rule 19 and under Order 92 Rule 4 of the Rules of Court 2012