Lee Yen Hock v Avenue Golden Sdn Bhd & 3 Ors (26NCC-10-01/2012)

AVENUE GOLDEN SDN BHD

CHOO AH FOOK (NO. K/P: 570510-05-5103) Berniaga dalam nama dan gaya Kempas Samudera

TREBLE MEDIUM SDN BHD

CHOO SEIK YEN (NO. K/P: 790913-05-5284) …RESPONDENTS GROUNDS OF DECISION 2 Introduction [1] This judgment concerns the following two (2) appeals filed by the Petitioner against this Court’s decision with regards to his applications pursuant to O. 52 r. 4 of the Rules of Court 2012: i. Enclosure 238: An application filed by the Petitioner to commit the 2nd Respondent and the directors of the 3rd Respondents to prison; and ii. Enclosure 282: An application filed by the Petitioner to commit the 4th Respondent to prison. (The 2nd Respondent, the directors of the 3rd Respondent and the 4th Respondent hereinafter are collectively referred as “the Alleged Contemnors”) [2] On 8.9.2020, this Court dismissed both applications for want of procedural compliance under O. 52 r. 2B of the Rules of Court 2012 (“the Rules of Court”). The Petitioner being dissatisfied, appeals against this Court’s decision. The following are the reasons of this Court for so dismissing both applications. Background facts [3] The applications for committal against the Alleged Contemnors were premised on purported breach of two judgment/order namely, the Judgment after Full Trial dated 22.7.2014 which was amended on 12.1.2015 and 8.3.2016 (“the 2nd Amended Judgment”) entered 3 against the Alleged Contemnors and an Order imposing time dated 10.2.2017 to compel the Alleged Contemnors to comply with the 2nd Amended Judgment within ten (10) days from the date of the service of the order. [4] The 2nd Amended Judgment reads: "1. The 2nd, 3rd and 4th Respondents do pay to the 1st Respondent the sum of RM2,598,339-00 together with interest accruing thereon at the rate of 5% per annum from 27/2/2013 until full realisation.

The Joint Independent Auditors are to close all known Bank Accounts of the Respondents namely:-

2.1. Alliance Bank Berhad Account No. 510 3200 100 20925;

2.2. Hong Leong Bank Berhad Account No. 274 000 14369;

2.3. Affin Account No. 100 7300 74455;

2.4. Public Bank Berhad Account No. 403 5212 400;

2.5. Alliance Bank Berhad Account No. 103 700 2136 5955; and 2.6. Ambank Account No. 155 201 200 6188,

5.1 Hong Leong Bank Berhad Account No: 114 5006 9755;

5.2 Hong Leong Bank Berhad Account No: 312 0055 0668;

2.10 Hong Leong Bank Berhad Account No: 5791 1000 0526; and 2.11 Hong Leong Bank Berhad Account No: 311 0003 9140 and transfer all the funds (having first paid all bank charges) therein these accounts to the 1st Respondent's Public Bank Berhad Account No. 315 845 6700.

The cash in hand of RM206,325.72 now being held by the Joint Independent Auditors from the various accounts of the 2nd, 3rd and 4th Respondents shall be deposited into the 1st Respondent's Public Bank Berhad Account No. 315 845 6700 and the Joint Independent 4 Auditors shall transfer all monies now in the 1st Respondent's Ambank Account No. 155 201 200 6188 into the 1st Respondent's Public Bank Berhad Account No. 315 845 6700.

The Petitioner and the 2nd Respondent shall be the joint signatories of all the 1st Respondent's bank accounts (namely Public Bank Berhad Account No. 315 845 6700) in place of the Joint Independent Auditors (who shall cease to be joint signatories) AND if the 2nd Respondent shall fail and or refuse to comply to be a joint signatory within 3 weeks from the date of this Order, the Petitioner shall be the sole signatory of ALL the accounts of the 1st Respondent.

That the 2nd, 3rd and 4th Respondents do pay cost in the sum of RM15,000-00 to the Petitioner and RM8,000-00 to the Joint Independent Auditors within 1 month from the date of this Order". [5] The 2nd Amended Judgment was ordered after a full trial pursuant to the Petitioner's Amended Petition dated 19.1.2012 initiated against the 2nd to the 4th Respondents for oppressive acts and misconduct against the 1st Respondent (“the Company”) and the Petitioner. The learned Judge found the 2nd to the 4th Respondents liable for oppressive acts and misappropriation of funds. She also held that the Respondents benefited and profited from their misconduct and oppression and that they have used the Company's resources for their own interests. [6] The 2nd Amended Judgment was served on the solicitors of the Alleged Contemnors. Upon request by the 4th Respondent, the 2nd Amended Judgment was also personally served on her. 5 [7] The Order imposing time dated 10.2.2017 was served on the Alleged Contemnors by way of substituted service. [8] The 2nd Respondent had only complied with Paragraph (4) of the 2nd Amended Judgment. The Alleged Contemnors were said to deliberately failed to comply and/or obey and/or give effect to the remaining prayers of the 2nd Amended Judgment in particular Paragraph (1). [9] On 23.1.2018 and 13.2.2019, the Petitioner filed ex-parte applications for leave to commence committal proceedings against the Alleged Contemnors pursuant to O. 52 r. 3 of the Rules of Court documented in enclosures 228 and 270. On 23.4.2018 and 26.2.2019, the leave was granted (“the Leave Orders”). [10] Subsequently, after the Leave Orders were granted, the Petitioner filed enclosures 238 and 282 for committal proper against the Alleged Contemnors. Analysis [11] The law on committal is provided for in the Rules of Court at O. 52. For ease of reference, the salient provisions that are relevant for consideration in the current matter is reproduced as follows: Order 52. Committal 1 ...

Committal for contempt of Court (O. 52 r. 2) 6 The Court may, on the application of any party to any cause or matter or on its own motion, make an order of committal in Form 107.

Contempt committed in the face of the Court (O. 52 r. 2A)

If a contempt is committed in the face of the Court, it shall not be necessary to serve a formal notice to show cause, but the Court shall ensure that the person alleged to be in contempt understands the nature of the offence alleged against him and has the opportunity to be heard in his own defence, and the Court shall make a proper record of the proceedings.

Where a Judge is satisfied that a contempt has been committed in the face of the Court, the Judge may order the contemnor to appear before him on the same day at the time fixed by the Court for the purpose of purging his contempt.

Where such person has purged his contempt by tendering his unreserved apology to the Court and the Judge considers the contempt to be not of a serious nature, the Judge may excuse such person and no further action shall be taken against him.

Where such person declines or refuses to purge his contempt, then the Judge shall sentence him.

Other cases of contempt (O. 52 r. 2B) In all other cases of contempt of Court, a formal notice to show cause why he should not be committed to the prison or fined shall be served personally.

Application to Court (O. 52 r. 3) 7

No application to a Court for an order of committal against any person may be made unless leave to make such an application has been granted in accordance with this rule.

An application for such leave must be made ex parte to the Court by a notice of application supported by a statement setting out the name and description of the applicant, the name, description and address of the person sought to be committed and the grounds on which his committal is sought, and by an affidavit, to be filed before the application is made, verifying the facts relied on. (Emphasis added) [12] The development of law with regards to the issue of committal proceedings have been rapid of late. [13] It behooves this Court to consider all aspects of the application including compliance with the Rules of Court before arriving at a decision. It is trite law that a committal proceedings is akin to a criminal proceedings as the implication of the court’s finding may result in the incarceration of the proposed contemnors. In Tan Sri Dato’ (Dr) Rozali Ismail & Ors v Lim Pang Cheong @ George Lim & Ors [2012] 3 MLJ 458, it was held that: “[29] It is settled law that committal proceeding is criminal in nature since it involves the liberty of the alleged contemnor. Premised upon that, the law has provided procedural safeguards in committal proceeding which requires strict compliance. In this regard, Cross J in Re B (JA) (An Infant)[1965] 1 Ch 1112 had this to say: Committal is a very serious matter. The courts must proceed very carefully before they make an order to commit to prison; and rules 8 have been laid down to secure that the alleged contemnor knows clearly what is being alleged against him and has every opportunity to meet the allegations. ... When, however, one passes away from safeguards which are laid down in the interests of the contemnor and comes to consider mere verbal deficiencies in the documents in question - cases where the documents do not comply strictly with the rules, but it is impossible that in any conceivable case the contemnor could be in any way prejudiced by the defects - then it seems to me that there is no reason why the courts should be any slower to waive such technical irregularities in a committal proceeding than they would be in any other proceeding. [30] In similar tone, Lord Denning MR in Mcllraith v. Grady [1968] 1 QB 468 said at p 477: The second appeal is as to the committal order. Here we must remember the fundamental principle that no man's liberty is to be taken away unless every requirement of the law has been strictly complied with.” (Emphasis added) [14] The High Court in Dato’ Sri Andrew Kam Tai Yeow v. Tan Sri Dato’ Kam Woon Wah & Ors [2020] 9 CLJ 693 succinctly analysed when a contempt is a contempt committed in the face of the court (O. 52 r. 2A) and when it is any other form of contempt (Order 52 r 2 B). [15] The distinction is significant as the former category of contempt requires no formal show cause notice to be issued to the alleged contemnor while the latter requires a formal notice to show cause to 9 be personally served on the alleged contemnor. The High Court in Dato’ Sri Andrew Kam held as follows: “Enclosures 297 and 300 emanated from a breach of court order i.e. interim injunction order. It thus fell under a contempt committed in other cases of contempt of court as provided under O. 52 r. 2B of the ROC. The allegations of contempt of court in the present proceedings did not constitute contempt in the face of the court as the allegations did not involve any form of misconduct in the course of the proceedings, either within the court itself or directly connected with what happened in court. Hence, O. 52 r. 2A(1) of the ROC under which rule the requirement of a formal show cause notice was dispensed with, did not apply to the present proceedings. The ex parte applications for leave to issue contempt proceedings against the proposed contemnors in encls. 297 and 300 were therefore not made in a proper manner.” [16] This Court adopts the analysis in Dato’ Seri Andrew Kam. It is patently clear that the current application falls under O. 52 r. 2B of the Rules of Court. It falls under the category of “Other cases of Contempt” as it is a breach of a court order and therefore, the service of notice to show cause under O. 52 r. 2B on the Alleged Contemnors is mandatory before the filing of the ex-parte application for leave. [17] The latest pronouncement by the Court of Appeal in the decision of Tan Boon Thien & Anor v. Tan Poh Lee & Ors [2020] 3 CLJ 28 CA has been pivotal in deciding this matter. The Court of Appeal categorically outlined the need to adhere to O. 52 r. 2B. The court held as follows: 10 “[34] Based on the foregoing reasons, we are of the considered view that r. 2B requires mandatory compliance and its failure will render the subsequent proceedings invalid. We are of the view that the Rules Committee in its wisdom enacted r. 2B with the purpose that the proposed contemnor be given the first opportunity of answering to the notice to show cause before any application for leave is made. The leave application should be made only after the expiry of the period that the answer should be given and it is only when and where there is no reply or no satisfactory explanation given that any ensuing action is taken….” [35] Based on the above reasons, we also opine that failure to comply with r. 2B is not curable under O. 1A and O. 2 of the ROC 2012.” (Emphasis added) [18] Similarly, in another Court of Appeal decision of Uthayakumar Ponnusamy v. Abdul Wahab Abdul Kassim (Pengarah Penjara Kajang) & Ors [2020] 1 CLJ 82, the need to issue a formal notice to show cause was also discussed. The court in reminding parties of the need to do so ordered as follows: “Having regard to the above, since the present motion for contempt by the appellant was party initiated, whether it be categorised as civil or criminal contempt, it was entirely correct for the learned High Court Judge to have held that the procedural requirements under O. 52 of the Rules of Court 2012 must be strictly adhered to. This was also the finding of the Court of Appeal in CA No. 1, which was subsequently affirmed by the Federal Court. The appellant argued that O. 52 of the Rules of Court 2012 has no application to his application for reasons discussed earlier. However, the fact that the appellant had applied for ex parte leave to commence committal proceedings is in itself an acknowledgment by the appellant that the applicable procedure is that which is stipulated in O. 52 of the Rules of Court 2012. Further, when queried as to what other procedures were 11 available in law to handle an application for contempt, other than that provided in O. 52 of the Rules of Court 2012, learned counsel for the appellant was unable to show us any. Hence, the applicable procedure when the court is moved for contempt by the Attorney General or an interested party is that which is found in O. 52 of the Rules of Court

The process has to start with a formal show cause notice under O. 52 r. 2B of the Rules of Court 2012 and continue therefrom.” (Emphasis added) [19] This Court is aware of the decision of the Federal Court in Peguam Negara Malaysia v. MKini Dotcom Sdn Bhd & Anor [2020] 7 CLJ 173 wherein the need of a formal notice to show cause was dispensed with. With respect, it is the view of this Court that the facts and circumstances in Mkini can be distinguished. It was in relation to the publishing of comments that brought disrepute to the image of the Judiciary. If no swift action was taken, it would result in greater damage to the image and integrity of the Judiciary as a whole. In the current case before this Court, the type of contempt complained off is entirely different. [20] It is the view of this Court that a formal notice to show cause is an opportunity offered under the rules to enable the alleged contemnor to redeem its position. For example, if there is any non-compliance or inadvertence in obeying with an order, the said show cause notice will afford the alleged contemnor to comply or desist from a certain position rendering the proposed committal proceedings nugatory if proceeded upon. [21] In MKini, there was nothing that the alleged contemnors could undo or reverse as the publication had resulted in third parties making the 12 disparaging and unfounded remarks. Damage had therefore been done. Therefore, it would only be perfunctory and of no value if a show cause notice was issued. [22] It is the finding of this Court that the Petitioner failed to issue notice to show cause on the Alleged Contemnors prior to the filing of the ex-parte leave applications. Had a notice to show cause been issued by the Petitioner before the ex-parte leave applications in enclosures 228 and 270 were made, there was a possibility of the Alleged Contemnors redeeming themselves as the threat of incarceration was looming. The failure of the Alleged Contemnors to be given such an opportunity had deprived them of the right afforded under the rules. Conclusion [23] In the foregoing, this Court finds that there is non-compliance with the Rules of Court in particular O. 52 r. 2B. Given the non-compliance is incurable under O. 1A of the Rules of Court 2012, the entire committal proceedings is defective. As the consequence of this application has penal consequences, any non-compliance with procedure must be made to benefit the Alleged Contemnors. The Court of Appeal in Tan Boon Thien was unequivocal on this point. It held as follows: “Further, we say that as the result of contempt proceedings being criminal in nature involving the liberty of the proposed contemnor (see the Federal Court decision in Tan Sri Dato’ (Dr) Rozali Ismail & Ors v. Lim Pang Cheong & Ors [2012] 2 CLJ 849; [2012] 2 AMR 429), any ambiguity and uncertainty 13 must be resolved in favour of the alleged contemnor (see the Supreme Court decision in Wee Chao Keong; Houng Hai Hong & Anor v. MBf Holdings Bhd & Anor & Other Appeals [1995] 4 CLJ 427). Thus, r. 2B should be read in favour of the proposed contemnor.” [24] The applications in enclosure 238 and enclosure 282 are therefore dismissed with no order as to costs. (AHMAD FAIRUZ BIN ZAINOL ABIDIN) Judge High Court of Malaya Kuala Lumpur Dated: 8th January 2021 14 Counsels Datuk Joy Appukuttan together with Kelvynn Foo for Plaintiff Messrs KH Lim & Co. Unit T3-22-01, 22nd Floor Tower 3 Pusat Perdagangan Icon City No. 1B Jalan SS 8/39 47300 Petaling Jaya Selangor Choo Meilin for 2nd Respondent Messrs Christopher Yeo & KP Chang Unit 9-08, Menara MBMR, No. 1 Jalan Syed Putra 58000 Kuala Lumpur Norayumasrina binti Husain for 3rd Respondent Messrs Arnold Andrew & Co Level 6 (Right Wing), Menara Liberty 1008, Jalan Sultan Ismail 50250 Kuala Lumpur Adam Lee for 4th Respondent Messrs Sanjay Mohan Unit 5.01, Level 5