Liang Kee Development Sdn Bhd v Zenn Hrb Sdn Bhd (AA-22NCvC-37-04/2021)

This Court heard Enclosure 89 and Enclosure 91 filed respectively by the Plaintiff against the Defendant and against the non-party, namely Tract Evo Sdn Bhd ("TESB") for discovery of documents pursuant to Order 24 of the Rules of Court 2012 (ROC 2012).

After considering the Notices of Application, the affidavits filed by the parties, the written submissions and authorities relied upon, this Court dismissed both Enclosure 89 and Enclosure 91 with costs. The reasons for this Court's decision are as follows.

The present action arises from disputes between the Plaintiff and the Defendant in relation to a Manufacturing Agreement dated 8 May 2016. The Defendant had pleaded in its amended Defence and Counterclaim that the Plaintiff had failed to ensure that the machinery at the Defendant's factory was maintained in good working condition pursuant to clause 3.1.1(g) of the Manufacturing Agreement.

The Defendant further pleaded that after the Plaintiff allegedly left the Defendant's factory, the Defendant discovered that several machines were not in good working condition and that repair and refurbishment works had subsequently been undertaken by TESB.

The Defendant contended that it incurred repair costs amounting to RM2,948,980.00 and sought to recover the same from the Plaintiff in its counterclaim.

Arising from the said pleading, the Plaintiff filed Enclosure 89 seeking discovery against the Defendant for, inter alia, proof of payments relating to the alleged repair costs and the Sale and Purchase Agreement pertaining to the sale of the Defendant's factory to TESB.

The Plaintiff also filed Enclosure 91 seeking substantially similar discovery directly against TESB as a non-party, including documents relating to payments allegedly made by the Defendant to TESB and the complete Sale and Purchase Agreement concerning the Defendant's factory.

The Plaintiff contended that the documents sought were necessary to establish the truthfulness and genuineness of the Defendant's counterclaim and argued that the Defendant's narrative relating to the machinery repairs and subsequent payments to TESB was suspicious and contradictory.

On the other hand, the Defendant and TESB opposed the applications on the basis that the documents sought were either already disclosed, irrelevant to the real issues in dispute, confidential in nature, and that the applications constituted a fishing expedition intended merely to prop up the Plaintiff's case. C) PARTIES' SUBMISSIONS

The Plaintiff submitted that the documents sought were relevant and necessary under Order 24 of the ROC 2012 as the Defendant's counterclaim was premised upon alleged repair costs amounting to RM2,948,980.00. The Plaintiff argued that the Sale and Purchase Agreement between the Defendant and TESB would reveal the true circumstances surrounding the sale of the factory and would assist the Court in determining whether the Defendant's claim regarding the repairs was genuine.

The Plaintiff further argued that the discovery sought was specific in nature and therefore could not be categorized as a fishing expedition. In support of its position, the Plaintiff relied on, among others, the cases of Yekambaran s/o Marimuthu v. Malayawata Steel Berhad [1994] 2 CLJ 581, Compagnie Financiere du Pacifique v. Peruvian Guano Co [1882] 11 QBD 55, N2N Connect Bhd & Ors v. Chua Tiong Hoong & Ors [2025] MLJU 847 and Ewe Khay Guan v. Chin Oi Khiun [2023] 12 MLJ 893.

The Defendant, however, submitted that the Sale and Purchase Agreement executed in 2018 between the Defendant and TESB was entirely irrelevant to the Plaintiff's cause of action and the Defendant's counterclaim, both of which arose solely from the Manufacturing Agreement dated 8 May 2016.

The Defendant argued that the material issue in dispute was whether repair costs had been incurred and whether the Plaintiff was liable under the Manufacturing Agreement to bear those costs. The Defendant further submitted that the relevant quotations, invoices, vouchers and proof of payments had already been exhibited in the Defendant's bundles of documents and therefore there was no necessity for further discovery.

The Defendant also argued that the Plaintiff was in reality attempting to challenge the genuineness of the Defendant's counterclaim through collateral discovery and was merely "fishing for evidence to prop up its case". The Defendant relied on the Court of Appeal decision in Nguang Chan @ Nguang Chan Liquor Trader & Ors v. Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40 where the Court emphasized that discovery ought not to be allowed merely to enable a party to fish for evidence.

TESB similarly opposed Enclosure 91 and submitted that the documents sought could either be obtained from public records or were unnecessary for the disposal of the action. TESB further contended that the Sale and Purchase Agreement constituted confidential information between TESB and the Defendant as third-party commercial contracting parties and ought not to be disclosed in the absence of any real necessity. D) THE COURT'S FINDINGS

Having carefully considered the affidavits and submissions filed by all parties, this Court was not persuaded that the Plaintiff had satisfied the threshold requirements for discovery under Order 24 of the ROC 2012.

It is trite law that discovery is not granted as of right. The Plaintiff bears the burden of establishing that the documents sought are relevant, necessary, and relate to the issues genuinely arising in the proceedings. In Yekambaran s/o Marimuthu v. Malayawata Steel Berhad [1994] 2 CLJ 581, the Court held that the essential elements for an order for discovery are that the documents must exist, must be relevant, and must be within the possession, custody or power of the party against whom discovery is sought. The Court further emphasized that the documents sought must relate to the factual issues in dispute.

Similarly, in Nguang Chan @ Nguang Chan Liquor Trader & Ors v. Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40, the Court of Appeal reiterated that the test is one of necessity and not mere fairness, and that discovery ought not to be permitted where the application is merely intended to fish for evidence to support or strengthen a party's case.

Applying the above principles to the present case, this Court found that the Plaintiff had failed to establish how the Sale and Purchase Agreement executed between the Defendant and TESB on 14 August 2018 was material or relevant to the actual issues in dispute in the present action.

The core dispute before this Court concerns the parties' respective rights and obligations under the Manufacturing Agreement dated 8 May 2016, including whether the Plaintiff had breached its obligations in relation to the condition of the machinery and whether the Defendant had in fact incurred repair costs. The subsequent sale of the Defendant's factory to TESB in 2018 does not, in the judgment of this Court, directly determine whether the Plaintiff is liable for the alleged repair costs under the Manufacturing Agreement.

This Court accepted the Defendant's submission that the Sale and Purchase Agreement was a separate commercial transaction between the Defendant and TESB and constituted confidential information belonging to those parties. The Plaintiff had not demonstrated any sufficient nexus between the contents of the Sale and Purchase Agreement and the issues requiring determination at trial.

Further, this Court found merit in the submission that the Plaintiff was effectively attempting to use discovery to test the credibility and truthfulness of the Defendant's counterclaim prior to trial. Such an exercise properly falls within the province of crossexamination and evaluation of evidence during the trial proper, and not through interlocutory discovery proceedings.

In this regard, this Court also accepted the Defendant's reliance on Thorpe v. Chief Constable of Greater Manchester Police

2 All ER 827 where it was held that discovery should not be ordered for documents intended merely for the purpose of cross-examination to establish credibility of witnesses.

This Court further noted that the Defendant had already disclosed substantial documentation relating to the alleged repair costs, including quotations, invoices, vouchers and payment documents in the relevant bundles of documents. The Plaintiff would have ample opportunity during trial to challenge the authenticity, credibility and evidential weight of those documents through cross-examination and submissions.

In the circumstances, this Court was not satisfied that the further discovery sought was necessary for the fair disposal of the action. Rather, this Court was of the considered view that the applications were attempts to obtain additional evidence in the hope of uncovering inconsistencies to strengthen the Plaintiff's defence against the Defendant's counterclaim.

Accordingly, this Court found that both Enclosure 89 and Enclosure 91 amounted to impermissible fishing expeditions intended to prop up the Plaintiff's case.

For the reasons stated above, this Court found that the Plaintiff had failed to satisfy the legal threshold for discovery under Order 24 of the ROC 2012.

The Sale and Purchase Agreement between the Defendant and TESB dated 14 August 2018 was not relevant to the factual issues arising in the present action and constituted confidential information between the Defendant and TESB.

This Court was also satisfied that the applications constituted fishing expeditions aimed at obtaining evidence to strengthen the Plaintiff's case rather than genuinely necessary discovery for the fair disposal of the proceedings.

Accordingly, Enclosure 89 and Enclosure 91 were dismissed with costs of RM5,000.00 for each application respectively. Dated: 22 May 2026 Parties: For the Plaintiff: Chin Hein Choong; Messrs. K H Wong, Chin & Cheah For the Defendant: Sheanna Shanta a/p Kenneth; Messrs. Lalchand & Nawawi