Lemon Sky Animation Sdn Bhd v 1. ) Wong Cheng Fei (BA-22NCvC-515-12/2024)

WONG CHENG FEI

FOONG KA KING

SPIKY THINGS SDN. BHD.

CHIN YOON SEAN (NRIC NO.: 820705-05-5057) …DEFENDAN-DEFENDAN 07/08/2025 10:07:30 BA-22NCvC-515-12/2024 Kand. 43 S/N H58jnN4Dn0qbmDajSvmm0A

The present Notice of Application, encapsulated in Enclosure 16 and filed by the First, Second and Third Defendants, does not seek to determine the substantive rights of the parties in respect of the claims made in the main action. Rather, it concerns a procedural question: whether this suit ought to be consolidated with an earlier suit commenced approximately one month prior in the High Court at Kuala Lumpur.

To the lay observer, the outcome of this application may seem of limited consequence, as the respective rights and liabilities of the parties will ultimately be adjudicated regardless of whether the suits proceed separately or together. However, the question raised in Enclosure 16 bears significant implications for the effective administration of civil justice. It engages core considerations of judicial economy, the avoidance of duplicative proceedings, and the minimisation of costs and delay for both the Court and the litigants.

The singular and central issue in the present application is whether this is an appropriate case for this Court to exercise its discretion to order the transfer of the present Suit No. BA- 22NCvC-515-12/2024 (“Suit 515”) to the High Court at Kuala S/N H58jnN4Dn0qbmDajSvmm0A Lumpur, and for it to be consolidated with Suit No. WA-22NCC- 768-11/2024 (“Suit 768”), pursuant to Order 4 of the Rules of Court 2012.

The nub of the First, Second and Third Defendants’ case is that both Suit 515 and Suit 768 are “two sides of the same coin”. The core argument advanced by the First, Second and Third Defendants is that there is sufficient commonality warranting a consolidation of these suits.

In support of their application to consolidate Suit 515 and Suit 768, the First, Second and Third Defendants highlighted the commonality point by way of the following Table of Comparison. No. Commonalities raised in

There are 2 common principal

Wong Cheng Fei (“Fei”); and

Foong Ka Ning (“Foong”) Fei is the 1st Defendant. Foong is the 2nd Defendant. Foong is the 3rd Defendant. Fei is the 4th Defendant.

Both suits include a company with a registered address in Kuala Lumpur, which address is the same The 3rd Defendant – with the address being 22-1, Jalan Momodica Sdn Bhd, being the 1st Defendant in Suit 768, w ith S/N H58jnN4Dn0qbmDajSvmm0A 1/128, Happy Garden, Off Jalan Kuchai Lama, 58200, Kuala Lumpur Paragraph 4 of Enclosure 6, being the Statement of Claim (“SOC”) the address being 22-1, Jalan 1/128, Happy Garden, Off Jalan Kuchai Lama, 58200, Kuala Lumpur. Paragraph 2, Page 49 of Enclosure 17

Fei and Foong had disposed of their shareholding in the Plaintiff to iCandy Interactive Ltd (“iCandy”). This was regulated by a Share Sale Agreement dated 17.11.2021. Fei and Foong had 47% and 53% shares each in the Plaintiff before selling the shares to iCandy. Enclosure 6 (SOC), Page 4, Paragraph 8. Fei and Foong disposed of their entire shareholdings to iCandy. The Plaintiff became a subsidiary or member of iCandy. Enclosure 17, SOC 768, Page 51, Paragraph 11

Notwithstanding the disposal, iCandy appointed Fei and Foong as managers and executives of the Plaintiff. This was regulated by a Management Agreement dated 30.1.2022. The clauses cited include:-

Clause 6.1.2 – Fei and Foong agree to conduct their duty according to the law and according to reasonable instructions of the Plaintiff. Fei & Foong continued working in the Plaintiff as directors and as CEO & CFO respectively. Enclosure 6 (SOC), Page 5, Paragraphs 9(a) to (e). The clauses in the Management Agreement cited by the Plaintiff Fei & Foong continued working in the Plaintiff as managers despite the sale to iCandy. Enclosure 17, SOC 768, Pages 51-52, Paragraph 12. The Management Agreement expressly S/N H58jnN4Dn0qbmDajSvmm0A

Clause 10.1 – Fei and Foong cannot encourage or attempt to encourage the employees of the Plaintiff to leave the Plaintiff. The sting of the tail is Clause 9.1 which provides that Fei and Foong cannot get involved directly or indirectly with a similar business without the consent or involvement of the Plaintiff or iCandy. This was clearly stated in both suits, namely Paragraph 9(h) of the SOC in Suit 515 and in Paragraph 13 of the SOC in Suit 768. include clauses 6.1.2, 9.1, and 10.1. Clause 9.1 explicitly forbids Fei & Foong to be directly or indirectly involved with a similar business without the consent or involvement of the Plaintiff or iCandy Enclosure 6 (SOC), Pages 5- 6, Paragraph 9(f), (h), and (i) respectively. provides Fei and Foong to not be directly or indirectly involved with a similar business without the consent or involvement of the Plaintiff or iCandy. Enclosure 17, SOC 768, Page 52, Paragraph 13.

The Management Agreement provides that Fei and Foong owe fiduciary duties to the Plaintiff. The Plaintiff proceeds to list the duties owed. This includes, among others, a duty to act in good faith, duty of fidelity, not put themselves in a position of conflict, and to not engage in similar businesses. The duties are in line with the abovementioned clauses in the Management Agreement. This common list of duties becomes more apparent when they have made reference to Suit 768 in the pleadings in Suit 515. In this light, the Plaintiff makes express reference to Suit 768 in this Suit 515. Fei and Foong have duties to the

act in the best interest of the company;

act in good faith;

act with fidelity;

be loyal to Lemon Sky;

not be involved in the establishment of a similar business as Lemon Sky unless consented; and

not encourage or influence Lemon Sky Fei and Foong had a fiduciary duty to the Plaintiff to:

act honestly;

act in good faith;

not be directly involved in the same or substantially similar business; and

not put themselves in a position of conflict of interests; and

act with fidelity. Enclosure 17, SOC 768, Pages 52-53, S/N H58jnN4Dn0qbmDajSvmm0A employees to leave them. They breached the said fiduciary duties. Enclosure 6 (SOC), Pages 13-16, Paragraphs 17 -

At paragraph 10(e) of the SOC in Suit 515, being Enclosure 6, the Plaintiff says: “Memandangkan prestasi kerja D1 dan D2 yang terus lemah bersama dengan pelbagai pemungkiran di tempat kerja, salah satunya contoh telah dinyatakan dalam Guaman No.: WA22NCC-768- 11/2024, D1, dan D2 akhirnya meninggalkan Plaintif pada atau sekitar 30.08.2024” Paragraphs 14- 15 In this context, Fei and Foong did plead beforehand in their Counterclaim the Plaintiff’s conduct in retaliation to the setting up of Spiky Things Sdn Bhd. Enclosure 17, Page 127 Paragraph 53, being the Defence and CC 768 The Plaintiff’s reference to Suit 768 in the Statement of Claim in Suit 515 as stated in the left column demonstrates this commonality of issue.

The Plaintiff then pleaded Fei and Foong had breached their fiduciary duty. The Plaintiff then pleads that Fei and Foong had allegedly breached their fiduciary duty. The Plaintiff then pleads that Fei and Foong had allegedly breached their fiduciary duty. S/N H58jnN4Dn0qbmDajSvmm0A This is by transplanting the Plaintiff’s businesses, clients, projects, and employees to the 3rd Defendant. Enclosure 6 (SOC), Page 14, Paragraph 18. This is by not disclosing their directorships and shareholdings in Momodica Sdn Bhd. Enclosure 17, SOC 768, Page 60, Paragraphs 36- 37.

Following this alleged breach of fiduciary duty, the Plaintiff sought a declaration for said breach. Nobody seeks relief just for a declaration. The relief sought here is for an account of profits. Despite the Plaintiff praying for an account of “secret” profits in Suit 768, this is just a matter of terminology and the Plaintiff is asking for the same as in Suit 515; an account of profits. The Plaintiff thus prays for a declaration that the Defendants had committed a breach of fiduciary duty and for an account of profits. Enclosure 6 (SOC), Page 22 (Paragraph 22(a)) for the declaration and Page 24 (Paragraph 22(e)) for the account of profits. The Plaintiff thus prays for a declaration that Fei and Foong had committed a breach of fiduciary duty and for an account of secret profits. Enclosure 17, Page 69 (Paragraph 58.1) for the declaration and Page 70 (Paragraph 58.9) for the account of profits; both in

The 4th Defendant Chin Yoon Sean will be a witness in both Suits 515 and 768 irrespective of the outcome of his application to be struck out as a party in Suit 515.

It was asserted by the First, Second and Third Defendants that the conditions in Order 4 rule 1(1)(a) and (b) of the Rules of Court 2012, that is, the existence of “some common questions of law or fact” and the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions” respectively have been met.

The First, Second and Third Defendants substantiated their contentions with cases such as Central Securities (Holdings) Bhd v Haron bin Mohamed Zaid [1978] CLJU 20; [1979] 2 MLJ 244; [1978] 1 MLRA 307, Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd [2018] 8 AMR 209; [2019] 6 CLJ 292; [2019] 2 MLJ 816; [2018] 6 MLRA 451, Del E Webb. International Hotel Co v Hotel Merlin (Penang) Sdn Bhd [1972] CLJU 28; [1973] 1 MLJ 31; [1972] 1 MLRH 397 and Kumpulan Emas Bhd v Dato’ Lim Teng Lew [2004] 3 AMR 422; [2004] 2 MLJ 614; [2004] 5

The First, Second and Third Defendants further contended that both suits are relatively at the same stage and denied the allegation by the Plaintiff that the present application in Enclosure 16 is done in bad faith and for an ulterior motive.

The Plaintiff’s contentions were premised on the following arguments, that is: S/N H58jnN4Dn0qbmDajSvmm0A • That the facts, issues, and causes of action in both Suits are different and/or irrelevant; • That the reliefs sought by the Plaintiff arose out of a series of different and/or unrelated transactions; • That this consolidation application will prejudice the Plaintiff; • That this consolidation application is made in bad faith and for an ulterior purpose.

The Plaintiff highlighted what it considered as the distinct material facts in the form of the following Table.

Wong Cheng Fei

Foong Ka King

Spiky Things Sdn. Bhd

Chin Yoon Sean

Momodica Sdn Bhd

Soo Jun Ning

Foong Ka King

Wong Cheng Fei Key Factors that Led to

The mass resignation of senior artists from the Plaintiff within

Failure to disclose the 3rd and 4th Defendants shareholdings and/or directorship S/N H58jnN4Dn0qbmDajSvmm0A a short period of time.

2. The incorporation of 3rd Defendant by other Defendants, i.e. a business that is engaged in the same industry as the Plaintiff with the purpose of transferring the Plaintiff's business, clients, projects and/or senior artists to the 3rd Defendant and/or its related entities and/or related persons. Refer: Statement of Claim, Enclosure 6, pages 7-8 and/or projects in the 1st Defendant to the Plaintiff.

There were impugned invoices and transactions regarding the projects to the 1st Defendant even though the Plaintiff did not receive any work and/or deliverables from the 1st Defendant Refer: Statement of Claim, Enclosure 17, pages 54-59

Unlawful interference with the Plaintiff's trade.

Conspiracy to injure the Plaintiff by unlawful means in respect of, among others, the mass resignation.

Breach of fiduciary duties to the Plaintiff.

Breach of fiduciary duty and/or breach of trust.

Dishonest assistance and/or knowing receipt.

Conspiracy to injure Plaintiff by unlawful means by, among others, the incorporation of the 1st Defendant for the purpose of

Breach of good faith and fidelity

Breach of Management Agreement dated 30.01.2022. Refer: Statement of Claim, Enclosure 6, pages 7, 12, 13, 16 and 18 acting as a conduit to misappropriate assets, benefits and/or profits belonging to the Plaintiff by way of the impugned transactions. Refer: Statement of Claim, Enclosure 17, pages 60-68

A declaration that the Defendants committed tort of unlawful interference with the Plaintiff's trade; that the Defendants have committed tort of conspiracy; that the Defendants have breached their fiduciary duties towards the Plaintiff; that the Defendants have breached their good faith and fidelity towards the Plaintiffs; that the 1st and 2nd Defendants had breached the

A declaration that the 3rd and 4" Defendants have breached their fiduciary duties during their tenure as directors and shareholders of the Plaintiff.

A declaration that the 1st and 2nd Defendants have dishonestly assisted the 3rd and 4th Defendants in obtaining secret profits to the detriment of the Plaintiff.

A declaration that the Defendants, whether jointly and/or severally, had conspired to obtain secret profits

A perpetual injunction to be granted to restrain the Defendants from unlawfully interfering with, among others, the Plaintiffs' business. Refer: Statement of Claim, Enclosure 6, pages 22-25 to the detriment of the Plaintiff.

A declaration that the Master Service Agreement dated 07.09.2022 is unlawful, null, void and/or of no effect. Refer: Statement of Claim, Enclosure 17, pages 69-71

The case of Maybank Trustees Bhd v Amalan Tepat Sdn Bhd [2006] 5 CLJ 43; [2006] 3 MLJ 82; [2005] 4 MLRH 55 was cited by the Plaintiff for the proposition that when an applicant fails to state the common question of fact or law that has arisen in the two suits, the court will be unable to accept the contention that Order 4 rule 1(1)(a) of the Rules of Court 2012 has been fulfilled.

To support its contention that Suit 515 and Suit 768 do not fall within the ambit of Order 4 rule 1(1)(a) and (b), the Plaintiff relied on the case of Federal Land Development Authority & Anor v Tan Sri Hj Mohd Isa bin Dato’ Hj Abdul Samad & Ors [2021] 10 CLJ 562 Refd (5); [2022] 7 MLJ 883; [2021] MLRHU 1472.

The Plaintiff emphasized that Suit 515 concerns the Defendants’ concerted efforts to transplant the Plaintiff’s S/N H58jnN4Dn0qbmDajSvmm0A business to the Third Defendant; whereas Suit 768 concerns Wong Cheng Fei and Foong Ka King’s non-disclosure of interest in a related company. Given the different parties, causes of action and legal issues, the Plaintiff contended that there is no risk of inconsistent judgments arising from separate proceedings.

On the issue of prejudice, the Plaintiff argued that Suit 515 and 768 have progressed independently in that Suit 768 is at a more advanced stage, wherein the PTCM directions and trial dates have been fixed. In contrast, no PTCM directions have been given, nor have any trial dates been set in this Suit 515. Hence it was contended by the Plaintiff that allowing the present application at this stage would prejudice the Plaintiff in both actions and undermine the very objective of transfer and/or consolidation, namely, the efficient use of time and resources. The Decision of this Court

This Court wishes to commend learned counsel on both sides for their diligent preparation and insightful submissions, which have been of considerable assistance in arriving at this decision.

It is evident that the First, Second, and Third Defendants have contended that Suit 515 and Suit 768 are, for all intents and purposes, “same same” or “woven from the same factual cloth” and should therefore be consolidated. The Plaintiff, on the other S/N H58jnN4Dn0qbmDajSvmm0A hand, argued that while the two suits may arise from similar origins, they are “same same but different”; in analogy, they may come from the same cloth, but are “cut to different patterns,” thereby justifying separate proceedings.

In determining this application, the Court refers to Order 4 rule 1(1) of the Rules of Court 2012, which provides: Consolidation of causes or matters (O. 4, r. 1)

1.

Where two or more causes or matters are pending, and if it appears to the Court that –

some common question of law or fact arises in both or all of them;

the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions; or

for some other reason it is desirable to make an order under this rule, the Court may order the causes or matters to be consolidated on such terms as it thinks just or may order the causes or matters to be tried at the same time or one immediately after another or may order any of the causes S/N H58jnN4Dn0qbmDajSvmm0A or matters to be stayed until after the determination of any other of the causes or matters.

is well established that subparagraphs (a) to (c) operate disjunctively: see Ng Joo Soon @ Nga Ju Soon v Devechem Holdings (M) Sdn Bhd & Ors [2010] AMEJ 0740; [2010] 1 LNS 1677; [2010] MLJU 1854; [2010] 19 MLRH 145 and Lim Yang Hoon v Ong Keh Keong [2024] MLJU 3820.

In this application, subparagraphs (a) and (b) are the subject of contention between the parties.

Whether the conditions under Order 4 rule 1(1)(a) and/or (b) are satisfied is a question to be determined based on the specific facts and circumstances of the case. The authorities cited by the parties, while informative, are not determinative of the outcome in this instance.

This Court has carefully examined the pleadings in both Suit 515 and Suit 768.

Having done so, this Court is of the considered view that the threshold for consolidation has been met. It is satisfied that there exists a common question of law or fact in both suits, thereby fulfilling the requirement under subparagraph (a). On this finding alone, the application in Enclosure 16 may be allowed.

This Court acknowledges that differences exist between Suit 515 and Suit 768. However, it is well settled that no two suits are ever identical. The key issue is whether the differences are so fundamental that no common question of law or fact arises. This Court finds that they are not.

The Plaintiff’s allegation of bad faith on the part of the First, Second, and Third Defendants is a serious one. Upon close scrutiny, this Court finds that this allegation is without sufficient basis.

Similarly, the Plaintiff’s claim that it will suffer prejudice if the present application is allowed has been duly considered. However, the Court is not persuaded and finds no compelling basis for such a claim.

In light of the foregoing, the Notice of Application in Enclosure 16 is allowed with costs in the cause. Dated: 1 August, 2025 sgd (CHOONG YEOW CHOY) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR S/N H58jnN4Dn0qbmDajSvmm0A Counsel: For the Plaintiff : Rachel Ng Li Hui Eunice Wong Kai Xin (Messrs Thomas Philip) For the 1st, 2nd & 3rd Defendants : Irene Wong Sook Lin (Messrs Irene Wong Chambers) For the 4th Defendant : Woon Ling Li (Messrs S L Goon & Partners)