Lin Kai Lam v L & W Concrete Works Sdn Bhd (B-02(NCVC)(W)-59-01/2020)

LIN KAH HONG (NO. K/P: 820719-10-5385) ...RESPONDENTS [ In the matter of High Court of Malaya at Shah Alam Civil Appeal No. BA-22NCVC-310-05/2017 Between Lin Kai Lam (No K/P:570928-10-5219) ...Plaintiff

L & W Concrete Working Sdn Bhd (No. Syarikat: 222471-A)

Lin Kai Wing (No. K/P:540910-10-6267)

Lin Kah Hong (No. K/P:820719-10-5385) ...Defendants] CORAM YAACOB HJ. MD SAM, JCA RAVINTHRAN PARAMAGURU, JCA DARRYL GOON SIEW CHYE, JCA JUDGMENT [1] This was an appeal against the decision of the High Court in dismissing the Appellant's claim against the 1st Respondent for several payments namely, his arrears of salary, bonus, Employees' Provident Fund contributions ('EPF'), dividends declared by the 1st Respondent and the repayment of an alleged loan. [2] Having heard the appeal, this Court allowed the Appellant's appeal in part. The grounds for the Court's decision are herein set out. The parties [3] The disputants in this case are family members. [4] The action was first commenced by the Appellant, Lin Kai Lam against the 1st Respondent, L & W Concrete Works Sdn Bhd, as the Defendant. [5] The 2nd Respondent, Lin Kai Wing, and 3rd Respondent, Lin Kah Hong, subsequently applied and were allowed to intervene. They were added to the action as the 2nd and 3rd Defendants. [6] The 1st Respondent is a company in the construction industry manufacturing cement bricks and is also involved in the construction of retaining structures and foundations. [7] The Appellant and the 2nd Respondent are brothers while the 3rd Respondent is the son of the 2nd Respondent. [8] The Appellant, his daughter Lin Cze-Yi, the 2nd and 3rd Respondents are shareholders in what is essentially a 'family company' i.e. the 1st Respondent. [9] The parties' respective shareholding in the 1st Respondent are as follows: Appellant(Lin Kai Lam)-877,501 sharesLin Cze-Yi(Appellant's daughter)-97,500 shares2nd Respondent(Lin Kai Wing)-877,499 shares3rd Respondent(Lin Kah Hong)-97,500 shares [10] Together, the Appellant and his daughter have a small majority over the 2nd and 3rd Respondents in the shareholding of the 1st Respondent. [11] As for the 1st Respondent's Board of Directors, it is comprised of the Appellant, Lin Cze-Yi, one Wong Sou Fuan and the 2nd Respondent. Wong Sou Fuan is the wife of the Appellant. [12] The Appellant, in addition, was at all material times employed as the Managing Director of the 1st Respondent. The Appellant has since the commencement of the action, commenced proceedings in the Industrial Court for alleged constructive dismissal. Dispute among the parties [13] Unfortunately, disputes arose between the two family factions consisting of the Appellant and his family on the one side and the 2nd Respondent and his family on the other. [14] As a result, on 3rd November 2010, the Appellant and Lin Cze-Yi presented a petition, Petisyen Pemula D-26NCC-115-2010 ('Petition 115'), pursuant to section 181 of the then in force Companies Act 1965. [15] The respondents to Petition 115 were the 1st, 2nd and 3rd Respondents in this appeal and one other company by the name of Kong Ming Trading Sdn Bhd. [16] The parties to Petition 115 however compromised and this resulted in a consent judgment entered on 7th June 2011. [17] The terms of this consent judgment played a significant role in the decision of the High Court and they are therefore set out in full. Below is the translated version of the consent judgment which was reproduced in the grounds of judgment of the High Court:

That the 1st and 2nd Respondent to purchase the shareholding of 1st and 2nd Petitioner in the 3rd and 4th Respondent subject to a reasonable price pursuant to a valuation undertaken at the date of this court order by a Court appointed valuer and/or a valuer to be agreed by the parties;

That the cost of the appointment of the valuer to be shared proportionately to the shareholding held by the 1st Petitioner, 2nd Petitioner, the 1st and 2nd Respondent in the 3rd and the 4th Respondents;

That the 1st and 2nd Respondents take all necessary steps to secure the release and discharge of the 1st and 2nd Petitioners from all guarantees entered into by them for the benefit of the 3rd and 4th Respondents within 90 days from the date of this order and in the event the said guarantees cannot be discharged after all reasonable efforts, the 1st and 2nd Respondents do give the 1st and 2nd Petitioners the necessary indemnities with respect to the said guarantees.

That the parties herein do enter into a settlement agreement incorporating the aforesaid terms as well as all other necessary terms to facilitate and give effect to the terms of this settlement and that the said settlement agreement be forwarded to this Honourable Court forthwith;

That the parties be at liberty to apply;

That each party is to bear their own costs. Dated this 7th day of June, 2011' Although variously referred to as a consent order, the sealed document is in fact headed 'PENGHAKIMAN PERSETUJUAN'. Accordingly, the foregoing shall hereinafter be referred to as the 'Consent Judgment'. [18] Unfortunately, the family dispute did not end with the Consent Judgment. Instead, a multitude of applications including actions were filed. [19] Also, material to the Appellant's claim in this action was an application made by the 1st and 2nd respondents in Petition 115, namely the 2nd and 3rd Respondents in this appeal. The application made was in Enclosure 49 and the order made in respect of the application on 17th April 2014 was as follows: 'PERINTAH TERPINDA (Lampiran 49) ATAS PEMOHONAN Responden Pertama dan Kedua ... MAKA ADALAH DIPERINTAHKAN bahawa permohonan Kandungan 49 adalah ditolak DAN SETERUSNYA ADALAH DIPERINTAHKAN bahawa penandatangan kepada akaun bank Responden Ke-3 dan Ke-4 hendaklah dikekalkan setakat 7/6/2011 ADALAH SELANJUTNYA DIPERINTAHKAN bahawa status quo syarikat dikekalkan sepertimana Penghakiman Persetujuan

7.6.2011 Respondent—Pertama kedua-dua Pihak adalah diwajibkan menandatangani semua cek-cek Responden Ke-3 dan Ke-4 berkenaan gaji, utiliti, cukai pendapatan dan KWSP DAN AKHIRNYA ADALAH DIPERINTAHKAN bahawa tiada perintah mengenai kos. The foregoing order of the Court dated 17th April 2014 is hereinafter referred to as the 'Status Quo Order'. [20] There was yet another application made in Petition 115, the order in respect of which was also relied on for the purposes of this appeal. The application was also made by 2nd and 3rd Respondent. The application in Enclosure 71 was made after the Consent Judgment and the Status Quo Order. The 2nd and 3rd Respondents were successful in their application in the High Court which resulted in the following order made in respect of Enclosure 71: PERINTAH (LAMPIRAN 71) ATAS PERMOHONAN pihak Responden Pertama dan Responden Kedua ... MAKA ADALAH DIPERINTAHKAN bahawa permohonan Responden Pertama dan Kedua melalui Notis Permohonan (Lampiran 71) bertarikh 25.8.2015 adalah dibenarkan bagi perintah-perintah beritkut:

(a) Bahawa Resolusi Lembaga Pengarah bertarikh 12.4.2012 yang melantik Wong Sou Fuan sebagai pengarah syarikat Responden Keempat, diketepikan dan dibatalkan.

(b) Bahawa Resolusi Lembaga Pengarah bertarikh 26.7.2012 yang memutuskan untuk menamatkan perkhidmatan setiausaha syarikat, Encik Ong Chin Giap dan Cik Tan Thiam Lee dari Tetuan Cheng & Co Sdn Bhd setiausaha dan melantik Cik Lin Lai Chu dari Factfinder Corporate Services Sdn Bhd sebagai setiausaha baru syarikat Responden Keempat, diketepikan dan dibatalkan.

(c) Bahawa Resolusi Lembaga Pengarah bertarikh 15.5.2013 yang memutuskan untuk menamatkan perkhidmatan juruaudit Tetuan Cheng & Co Sdn Bhd dan melantik Messrs Ling & Co sebagai jururaudit baru syarikat Responden Keempat, diketepikan dan dibatalkan.

(d) Bahawa Resolusi Lembaga Pengarah bertarikh 15.4.2013 yang memutuskan Responden Pertama tidak lagi terlibat dalam jualan dan kerja-kerja lain syarikat Responden Keempat sejak tahun 2012 dan tidak boleh dibayar apa-apa kenaikan gaji, apa-apa bonus dan insentif dari tahun 2012 dan tidak boleh dibayar gaji berkuatkuasa 15.4.2013, diketepikan dan dibatalkan.

(e) Bahawa Resolusi Lembaga Pengarah bertarikh 15.4.2013 yang memutuskan Responden Kedua dianggap telah meletakkan jawatan dan tidak boleh dibayar apa apa kenalkan gaji, apa-apa bonus dan insentif dari tahun 2012 dan tidak boleh dibayar gaji berkuatkuasa 15.4.2013, diketepikan dan dibatalkan.

(f) Bahawa Resolusi Lembaga Pengarah bertarikh 13.6.2013 yang memutuskan bahawa penandatangan kepada akaun semasa Syarikat Responden Keempat di Public Bank Berhad dan Malayan Banking Berhad ditukar dan ditambahkan dari 4 kepada 5 penandatangan diketepikan dan dibatalkan.

(g) Bahawa Resolusi Lembaga Pengarah bertarikh 22.1.2014 yang memutuskan kenaikan gaji, bonus dan incentive bagi Pempetisyen-Pempetisyen dan yang memutuskan bahawa fee guaman peguamcara bagi pihak Pempetisyen-Pempetisyen di bayar dari syarikat Responden Keempat, diketepikan dan dibatalkan.

(h) Bahawa Resolusi Lembaga Pengarah bertarikh 16.4.2014 yang memutuskan untuk melantik Messrs Ling & Co sebagai Juruaudit bagi tahun berikutnya, diketepikan dan dibatalkan.

(i) Bahawa Resolusi Lembaga Pengarah bertarikh 22.9.2014 yang memutuskan kenaikan gaji Pempetisyen Pertama sebanyak RM5,000.00 kepada RM29,000.00, diketepikan dan dibataikan.

(j) Bahawa Resolusi Lembaga Pengarah bertarikh 11.2.2015 yang memutuskan kenalkan gaji, bonus dan incentive bagi Pempetisyen-Pempetisyen, diketepikan dan dibagalkan.

(k) Bahawa pihak-pihak adalah bebas memohon.

(I) Kos sebanyak RM5,000.00 kepada Responden Pertama dan kedua. Bertarikh pada 21 Mac 2016 $ ^{r} $ [21] The petitioners in Petition 115, i.e. the Appellant and Lin Cze-Yi appealed against the order dated 21st March 2016 in respect of Enclosure 71 and they succeeded. [22] The appeal by the petitioners in Petition 115 against the order of the High Court dated 21st March 2016 in respect Enclosure 71 was brought before the Court of Appeal in Rayuan Civil No. W-02(IM)(NCC) 805-04/2016 ('Appeal 805'). [23] After hearing the appeal, the Court of Appeal in Appeal 805 allowed the petitioners' appeal on 26th September 2016, and the material part of the Court of Appeal's order read as follows: 'PERINTAH ... DAN SETELAH MENDENGAR hujahan pihak-pihak tersebut MAKA ADALAH DIPERINTAHKAN bahawa Rayuan dibenarkan (berkenaan Lampiran 71) atas isu bidang kuasa, keputusan ini tidak menghalang Responden-responden daripada meneruskan dengan remedi lain. Selanjutnya, tiada perintah terhadap kos. DIBERI di bawah tandatangan saya dan Meterai Mahkamah pada 26 September 2016' [24] Accordingly, with this order of the Court of Appeal, the order of the High Court in respect of Enclosure 71 referred to above, in Petition 115, was no longer of any effect. [25] On 11th November 2016, Public Bank Berhad issued an Originating Summons against the Appellant, Lin Cze-Yi and the Respondents in this appeal including the company Kong Ming Trading Sdn Bhd. [26] In this Originating Summons, Saman Permula No. WA-24NCC-464 11/2016 ('OS 464'), Public Bank Bhd, as the Plaintiff, sought inter alia, the following orders:

(i) Suatu Perintah samada Plaintif boleh melepaskan bayaran dividen kepada Pemegang-Pemegang Syer di Syarikat L & W Concrete Works Sdn Bhd dan samada Puan Wong Sou Fuan adalah penandatangan sah ("valid signatory") bagi cek-cek Syarikat L & W Concrete Works Sdn Bhd;

The wording of the status quo order is clear and does not require and allow for any elucidation by way of, inter alia, introduction of extrinsic evidence. It states that the status quo of the first defendant must be maintained as per the consent order dated 7 June 2011 and identifies the payments that could be made. The status quo order is silent on the doing of any other act other than payment of salary, utilities and income tax and Employees Provident Fund. The status quo order and consent order say nothing about payment of bonuses and dividends in respect of profit post the consent order. In my judgment, the interpretation attached to the order by the plaintiff would strain the words of the court and amount to putting words in the status quo order.

In the premises, I find that the wording of the status quo order is not elastic enough to permit and accommodate the interpretation accorded to it by the plaintiff. The plaintiff's claim must therefore fail.' (Emphasis added) [33] Notwithstanding this finding, the learned Judge nevertheless went on to consider the merits of each of the specific claims made by the Appellant. In the words of the learned trial Judge: '29. It follows from my finding that it is not necessary to consider the second issue. However, in deference to the detailed submissions made by both sides, I will briefly consider the points raised by the parties.' [34] In respect of the Appellant's claim for his increased salary, bonus and EPF contributions the learned Judge held that the Appellant had acknowledged that he had collected and used cash sales from the 1st Respondent's customers to pay his salaries, EPF contributions and bonuses. It was held that in the absence of evidence of how much was so collected and utilised, the Appellant's claim must fail. [35] As for the Appellant's claim for his share of the dividends declared by the 1st Respondent, the learned Judge held that there were three reasons why the claim failed. The first was said to be an admission that the dividends were derived from profits of the Group of Companies in which the 1st Respondent was part of and this was a violation of section 131 of the Companies Act 2016. The second, the release of dividends would result in the retained earnings of the 1st Respondent for the year 2016 to be less than the retained earnings used in the preparation of the valuation report for the purposes of the Consent Judgment. The third was because of the order of Court in OS 464. [36] Lastly, as for the amount of loan claimed, the learned Judge found that there was no evidence of any such loan given to the 1st Respondent by the Appellant. [37] Thus, the decision of the High Court was based on a relatively narrow compass. The Consent Judgment [38] Although the Consent Judgment was entered on 7th June 2011, to date its terms have still not been fully complied with. [39] The Consent Judgment may be distilled into four key elements. First, the 2nd and 3rd Respondents were to purchase the Appellant's and Lin Cze-Yi's shares in the 1st Respondent. Second, there was to be a valuation of the shares by an agreed valuer. Third, the 2nd and 3rd Respondents were to endeavour to release the Appellant and Lin Cze-Yi from guarantees and failing which indemnities were to be given. Fourth, the parties were to enter into a settlement agreement to facilitate and give effect to the terms of the settlement. [40] In fact, the parties could not even agree on the valuer to be appointed. In consequence, an application had to be made to Court. On 2nd April 2013 it was ordered by the Court that the firm KPMG be appointed to value the shares of the 1st Respondent and should KPMG refuse, the valuation was to be carried out by another firm by the name of Deloitte. [41] From the evidence tendered in Court, only a Preliminary Draft Report was prepared by KPMG and this was dated 18th September 2018. [42] It needs to be noted that there was in fact no term in the Consent Judgment that restricted payments by the 1st Respondent in the nature of the claims made by the Appellant. It must be stressed that this was a Consent Judgment agreed to by the parties and not a judgment entered after the Court's consideration of the merits of Petition 115. What the parties had agreed to is manifest in the express terms of the Consent Judgment. [43] Indeed, from a plain reading of the Consent Judgment, it also does not seek to cater for the 'status' of the 1st Respondent in any particular sense that might suggest that the 1st Respondent may do nothing other than what is provided in the Consent Judgment or expressly permitted by the Court. [44] Despite the fact that the Consent Judgment was entered into over nine years prior, to date its terms have yet to be completely fulfilled. The ultimate objective of the Consent Judgment was the purchase of the Appellant's shares in the 1st Respondent and Kong Ming Trading Sdn Bhd. That was the solution to the problems between the two rival factions; i.e. that they disengage from each other. However, to date, the buy-out of the Appellant and his daughter, Lin Cze-Yi, has yet to be effected by the 2nd and 3rd Respondents. The Status Quo Order [45] It was also plain from the wording of the Status Quo Order that it was concerned primarily with the signatories to the 1st Respondent's bank accounts. [46] The operative part of the Status Quo Order addressed three issues:

(i) that the signatories of the bank accounts of the 3rd respondent (Kong Ming Trading Sdn Bhd) and 4th respondent (L & W Concrete Works Sdn Bhd, the 1st Respondent in this appeal) in Petition 115 are maintained as at 7th June 2011;

(i) it may release dividend payments to the shareholders of the 1st Respondent and whether Wong Sou Fuan (Appellant's wife) is a valid signatory for cheques of the 1st Respondent and

(b) If the answer is in the negative, whether [the] plaintiff is entitled to the payments claimed. [67] The learned trial Judge concluded on these two issues as follows:

It is clear from the foregoing passage that until such time the Status Quo Order is set aside or varied, it is binding on the parties and cannot be ignored. The Status Quo Order therefore renders this action unmaintainable. Whether the sums are due and payable

It follows from my finding that it is not necessary to consider the second issue. However, in deference to the detailed submissions made by both sides, I will briefly consider the points raised by the parties. [68] With respect, we do not agree with the learned trial Judge's view of the effect of the Status Quo Order. As can be seen, none of the orders made and referred to actually prohibits the payments claimed by the Appellant. In this regard we find that, as a matter of construction, the learned trial Judge had fallen into error on this issue. The Appellant's claims for salary, Bonus and EPF contributions [69] Having held that the Appellant's claim was not maintainable by reason of the Status Quo Order, the learned trial Judge nevertheless went on to consider the Appellant's claims. Having so considered the Appellant's claims, the learned trial Judge concluded that the Appellant's claims for his salary, bonus and EPF contributions, must fail. [70] The Appellant's claim for RM125,600.00 was for arrears of his salary for the months of January to April 2017. This claim was based on his salary that had been increased to RM31,400.00. [71] The EPF contributions claimed totalling RM20,832.00 was in respect of the arrears of salary not paid. [72] This increase in the Appellant's salary to RM31,400.00 was authorised by the 1st Respondent's Board of Directors at its meeting of 11th February 2015. [73] This Board meeting resolved and approved a revision of the salaries, bonuses and incentives for the staff of the 1st Respondent including the Appellant. [74] There is then the Appellant's claim for bonus of RM48,000.00. There was in evidence in Exhibit P1, approval dated 4th February 2017 for bonuses to be paid for the staff of the 1st Respondent and this included a bonus of RM48,000.00 for the Appellant. [75] The non-payment of the Appellant's salary was solely because the 2nd Respondent had refused to sign the cheques made out for the Appellant's salary. [76] In paragraph 9 of the Respondents' Defence it was pleaded that the resolutions to increase the salary of the staff including the Appellant's salary was in breach of various court orders, fraud on the minority shareholders and/or breach of fiduciary duties. No particulars were however provided. It was also pleaded in paragraph 10 that the Status Quo Order did not allow for payment of the claims made. [77] In his witness statement, the 2nd Respondent justified his refusal to allow payment of the Appellant's salary and bonus by reference to the Status Quo Order which he maintained precluded the Board of Directors of the 1st Respondent from increasing the salary of the Appellant and approving the payment of the bonus claimed. [78] The 2nd Respondent also testified that the Appellant had filed a claim against the 1st Respondent in the Industrial Court on 16th April 2018. This was a claim based on an allegation of constructive dismissal and the Appellant was seeking to be reinstated and paid his salary. [79] In the 2nd Respondent's witness statement, the question posed in paragraph 28 and his answer given was as follows:

In paragraph 11 of the Statement of Claim, the Plaintiff claims that the Company had refused to sign the cheques for the payment of his salaries, bonus, EPF and dividends. What is your answer to that? A: I could not sign as one of the signatories on those cheques for the payments as demanded by the Plaintiff because Petition 115 Court Order dated 17-4-2014 and OS 464 Court Order dated 22-6-2017 clearly prohibit the Company to make such payments. The Company is directed by the High Court to remain status quo as per Petition 115 Court Order dated 7-6-2011. I would be in breach of these Court Orders if I had signed the cheques.

What do you understand from the Plaintiff's claims in this action? A. Firstly, the Plaintiff was and/or is prohibited from increasing his monthly salary from RM8,800.00 to RM31,400.00 by virtue of Petition 115 Court Order dated 17-4-2014. As such, the Plaintiff's claim for bonus, KWSP and SOCSO, which are based on his purported increased salary of RM31,400.00 are prohibited. Secondly, Petition Court Order dated 17-4-2014 does not permit for any payment of bonus from the 1st Defendant. Again, the Plaintiff's claim for bonus is prohibited. Thirdly, OS 464 Court Order dated 22-6-2017 expressly prohibits any payment of dividends to any of the shareholders of the Company including the Plaintiff.' [80] Under cross-examination however, the 2nd Respondent agreed that payments of bonuses and salary were made to all staff of the 1st Respondent except for the Appellant and Lin Cze Yi. The relevant portion of the cross-examination of the 2nd Respondent is set out below: 'S: Refer to Part C, page 648 [Exhibit P1], do you agree that all this bonuses was paid to the respective workers except Lin Kai Lam and Lin Cze Yi? J: Yes. S: You signed all the cheque for others except for these 2 people? J: I can't remember but most probably I signed the cheques for the workers except for these 2 directors. S: It was approved by the plaintiff, isn't it? J: Yes, he approved himself. S: But the company paid isn't it? J: You mean other workers? S: Yes, other workers? S: You also signed the cheques? S: There's an approval for Lin Kai Lam, can you see the column director? [81] Having agreed to payments of the increased salary of all staff of the 1st Respondent, it was somewhat disingenuous of the 2nd Respondent to then invoke the Status Quo Order to resist payment of the Appellant's salary. After all, apart from being a member of the Board of Directors, the Appellant was also an employee, employed as the Managing Director of the 1st Respondent with a salary. [82] In addition, although the 2nd and 3rd Respondents via Enclosure 71 in Petition 115 did succeed to set aside the 1st Respondent's Board's resolution of 11th February 2015 in the High Court, the appeal against the High Court's order was allowed by the Court of Appeal. [83] Thus, the resolution of the 1st Respondent's Board of Directors of 11th February 2015 which approved and increased the salaries of the staff of the 1st Respondent, including the Appellant's salary, remained valid. [84] In the circumstances, in refusing to sign the cheques for payment of the Appellant's salary, the 2nd Respondent himself was in fact in breach of the Status Quo Order in which the parties were specifically required to sign all cheques of Kong Ming Trading Sdn Bhd and the 1st Respondent relating inter alia to salary. [85] The 2nd and 3rd Respondents had in several of the applications made, trotted out the Status Quo Order as a bar to the Appellant's claims. Yet in relation to the Appellant, they had done the very opposite to what was required by the Status Quo Order by refusing to sign cheques for payment of the Appellant's salary. [86] The learned trial Judge's ground for refusing the Appellant's claim for his arrears of salary, bonus and EPF contribution was the following: '30. In relation to the plaintiff's claim for increased salary and bonus, the plaintiff acknowledged in his evidence that he had collected and used cash sales from the D1's customers to pay his salaries, EPF and or bonuses. In the absence of evidence to show how much was collected, and what portion was used by the plaintiff to pay his outstanding salaries, EPF and bonuses and, this head of claim must fail.' [87] Firstly however, this was not a defence pleaded by the Respondent and it is trite as a matter of adjectival law, parties are bound by their pleadings. [88] Secondly, this issue arose only in the cross-examination of the Appellant. Excerpts of the relevant part of the cross-examination of the Appellant are set out below: 'S: Refer to Bundle C2 page 588, you agree that this resolution was passed while this suit was ongoing? S: Read what the resolution said, do you agree with was written there? S: At the bottom of the page, is that your signature? S: So, essentially, you took money directly from the cash sale of the company to satisfy your own salary, correct? J: Not only my salary. S: Not only your salary, but your salary included? S: I put it to you, the reason why you went through all these procedures is precisely because you are fully aware and in fact you are not entitled to your monthly salary of RM32,400, you are not entitled to your EPF payment and bonuses and you are not entitled to your dividend, agree? J: I disagree." [89] As for the testimony of the 2nd Respondent, and in relation to his refusal to sign cheques for payment of the Appellant's salary his answer under cross-examination was as follows: 'S: If you not signed, it cannot be paid, correct? J: They can get from cash sale. [90] In his re-examination, the 2nd Respondent was asked what he meant. The following is an excerpt of that part of the 2nd Respondent's re-examination: 'S: Can you explain to his Honourable Court what is that means "they can get from cash sale"? J: The plaintiff go to our customer and ask for cash from the customer and then inform our supervisor to pay him whatever cash sale money to him. This is why he got the cash from other source. S: When the plaintiff collected all this cash from the cash sales, from the customers, and things like that, are you able to ascertain how he used this money, did he used it for whatever purpose? J: They pay their salary. S: Who is "they" you are taking about? J: The plaintiff. And then pay the EPF, pay the Socso, bonus and they also pay for some of the expenses that he like. [91] As can be seen, it was neither put to the Appellant nor did he state that the four months' arrears of salary that was his claim, i.e. from January to April 2017, had been collected by him. [92] Furthermore, it was not the testimony of the 2nd Respondent that payment for the four months of salary in arrears claimed by the Appellant had been collected by the Appellant. [93] The resolution referred to by learned counsel for the Respondents was the 1st Respondent's Board of Directors' resolution dated 11th January 2018. This resolution authorised the payment of salaries from collections from cash sales because cheques made out for their payment were not signed by the authorised signatories of the 1st Respondent. As was admitted by the 2nd Respondent under cross-examination, he had refused to sign cheques for payment of the salaries of the Appellant and Lin Cze-Yi. [94] This resolution was only passed after this action for the Appellant's arrears of salary, bonus and EPF contributions had been filed. [95] There was some nine months after April 2017, the last of the Appellant's arrears of salary claimed, before that resolution was passed. Based on the testimony of the 2nd Respondent, there would have been no cheques signed for the payment of the Appellant's salary from May 2017 onward to the date of the resolution on 11th January 2018. [96] Thus, with due respect to the learned trial Judge, there was in fact no evidence that the Appellant had collected payment of his salary, bonus or EPF claimed in the action and in any event, such was not a contention among the Respondents' pleaded defences. If at all, the Appellant's collections from cash sales for his salary would probably have been in respect of his salary well after April 2017, after he was authorised to do so in January 2018. The dividends claimed [97] As for the dividends claimed by the Appellant, the learned trial Judge gave three reasons why the claim should also fail. The relevant paragraphs of the learned trial Judge's grounds of judgment are reproduced below: Dividend

That brings me to the plaintiff's claim for dividends. There are three reasons why this head of claim cannot succeed. First, the plaintiff admitted in cross examination that his claim against the first defendant for dividend payment was derived from the profit made by the Group of Companies for Financial Year 2012, 2013 and 2014. This is a clear violation of section 131 of the Companies Act 2016, which provides that a company may declared dividends out of its own profit. It is unclear from the plaintiff's evidence as to why first defendant must pay dividend in respect of profits earned by the other companies in the Group. The resolution passed by the Board for the payment of dividend is consequently invalid as it is not calculated based solely on profits of the first defendant. The plaintiff cannot pass a resolution to include profits of third-party companies.

Secondly, the plaintiff also admitted in his evidence under cross examination that the release of dividends would result in the retained earnings of the first defendant for year 2016 to be less than the retained earnings taken by KPMG to prepare the valuation report.

The third reason is because of the order made by Justice Noreen (sic). In her judgment she held that any issuance of dividends to the shareholders of the first defendant would affect the status quo of the first defendant by prejudicing the financial status and assets of the first defendant.' [98] Among the proceedings filed by the parties against each other was a civil suit filed in the High Court in Kuala Lumpur Guaman Civil No.: 22NCC-235-08/2015 ('Suit 235'). Suit 235 was brought by the Appellant and Lin Cze-Yi as plaintiffs against the Respondents and Kong Ming Trading Sdn Bhd. [99] On 11th January 2016, an application under Order 14A of the Rules of Court 2012 was taken out by the 2nd and 3rd Respondents as the 1st and 2nd Defendants in Suit 235 for the Court's determination of the following: 'a) That from the facts set out in paragraph 31 of the Statement of Claim, whether the 1st and the 2nd Plaintiffs are entitled to such profits and or dividends in proportion to their shareholding in the 3rd Defendant [Kong Ming Trading Sdn Bhd] in the absence of declaration to that effect by the 3rd Defendant; b) That from the facts set out in paragraph 31 of the Statement of Claim whether the 1st and the 2nd Plaintiffs are entitled to such profits and or dividends in proportion to their shareholding in the 4th Defendant [the 1st Respondent in this appeal] in the absence of a declaration to that effect by the 4th Defendant; c) That payment of the dividends by the 3rd and 4th Defendants respectively is a matter of internal management and the Court is not the proper forum to determine the same; [100] On 9th March 2016, the High Court in Suit 235 made the following order in respect of the said application under Order 14A: 'a) Bahawa berdasarkan dari fakta-fakta yang dinyatakan dalam perenggan 31 Penyataan Tuntutan, Plaintiff Pertama dan Plainiff Kedua tidak berhak mendapat keuntungan dan atau dividen mengikut kadar pegangan saham mereka dalam Defendan Ketiga jika tiada perisytiharan yang bermaksud sedemikian dibuat oleh Lembaga Pengarah Defendan Ketiga dengan sanksi pengarah-pengarah bagi Defendan Ketiga dalam Mesyuarat Agung; b) Bahawa berdasarkan dari fakta-fakta yang dinyatakan dalam perenggan 31 Penyataan Tuntutan, Plaintiff Pertama dan Plainitf Kedua tidak berhak mendapat keuntungan dan atau dividen mengikut kadar pegangan saham mereka dalam Defendan Keempat jika tiada perisytiharan yang bermaksud sedemikian dibuat oleh Defendan Keempat dalam Mesyuarat Agung;' [101] Following the foregoing decision of the Court in Suit 235, interim dividends amounting to RM2,459,096.18 were declared by the Board of Directors of the 1st Respondent at its meeting on 25th July 2016. The amount of dividends that each shareholder was entitled to, which included the 2nd and the 3rd Respondents, was also set out in the minutes. The Appellant was stated to be entitled to a net dividend of RM1,106,594.54; i.e. the amount claimed. [102] Following this Board resolution of 25th July 2016, an Extraordinary General Meeting ('EGM') of the 1st Respondent was convened the following month on 25th August 2016. [103] At the EGM of the 1st Respondent on 25th August 2016 the shareholders, by a majority, voted in favour of the interim dividends declared by the Board on 25th July 2016. Based on the minutes of this EGM, all the four shareholders of the 1st Respondent were present, though the 2nd and 3rd Respondents voted against this resolution. [104] Thus, the interim dividends declared had both the approval of the Board of Directors of the 1st Respondent and its shareholders in general meeting. [105] Neither the Board of Directors' resolution of the 1st Respondent of 25th July 2016 nor its shareholders' resolution at its EGM of 25th August 2016 has been set aside or declared invalid. As mentioned, there is also no counterclaim filed in this action and thus no attempt by any of the Respondents to invalidate these resolutions. [106] As for the learned trial Judge's finding that the Appellant had admitted in cross-examination that his claim for payment of dividends against the 1st Respondent were derived from the profits made by the Group of Companies for Financial Year 2012, 2013 and 2014, this was based on the Appellant's testimony under cross-examination. The testimony relied on by learned counsel for the Respondents was the following: 'S: Refer to page 343, there is a table there and declaration for the dividend was RM2,459,096.18, correct? S: How did you come out with the statement? J: This figure comes from the net profit for the year 2012, 2013 and 2014. S: Is it in the document? S: Where about? J: Page 243, the net profit for year 2012, RM976,919.18 S: But this one is for the group? J: Yes, for the group, then followed by the audited account for 2013, page 280, the net profit was RM873,166 and then for net profit for the financial year end 2014,RM610,011,so all these 3 figures add up it comes to RM2,495,096.18. S: This resolution was passed for which company? J: L & W Concrete Works Sdn Bhd S: The first defendant? S: Each of the figures that I referred to in the financial statement refers to the group of companies, I put it to you that you cannot declare dividend from a group of companies pursuant a group of company only, agree? J: I couldn't answer this question because I do not know. [107] In light of the foregoing, it was extrapolated and maintained that there were no profits made by the 1st Respondent to warrant any declaration of dividends. [108] The documents referred to were in fact the 1st Respondent's Reports and Financial Statements for the years ended 31st August 2012, 31st August 2013 and 31st August 2014 prepared by the 1st Respondent's auditors. [109] These accounts contained the consolidated balance sheet and information on the performance of the 'Group' because the 1st Respondent has a subsidiary by the name of Dinasti Teliti (M) Sdn Bhd. [110] However, these are accounts of the 1st Respondent and they also show that the 1st Respondent itself made profits for the years ended 31st August 2012, 31st August 2013 and 31st August 2014. [111] From the evidence led, the 1st Respondent had remained an ongoing concern even after the Consent Judgment. [112] While it is true that the amount of RM976,919.18 referred to by the Appellant in the document at page 243 under cross-examination was the net profit after tax of the Group (i.e. both the 1st Respondent and its subsidiary), in the very column next to the amount mentioned of RM976,919.18 was set out the 1st Respondent's net profit after tax for the year ended 31st August 2012 which was stated as RM1,069,715.41. [113] Thus, there was evidence in the very document referred to that the 1st Respondent had a net profit after tax. It was also stated in the accounts that for 2012, the 1st Respondent had accumulated profits carried forward of RM10,907,087.98. [114] What appears to have occurred was that the error made by the Appellant in pointing to the wrong figure in the accounts during cross examination, when the correct figure was actually set out in the same document next to the figure pointed out by the Appellant, was exploited and expanded into a contention that the 1st Respondent did not make any profit to warrant a declaration of dividends. [115] For the year ended 31st August 2013, the accounts in evidence show that the 1st Respondent had a comprehensive profit of RM831,943 and unappropriated profit of RM11,739,031. [116] For the year ended 31st August 2014, the accounts in evidence show that the 1st Respondent had a total comprehensive profit of RM584,758 and unappropriated profit of RM12,323,789.00. [117] The financial accounts and the profits made by the 1st Respondent for 2012,2013 and 2014 were also confirmed by its directors in the Directors' Report for those years and which reports were led in evidence together with the accounts. [118] The Interim Dividend for the financial year ended 31st August 2016, that was declared by the Board of Directors of the 1st Respondent and approved by its shareholders was for a sum of RM2,459,096.18 out of profits from 2012,2013 and 2014. The profit declared was within the total profits of the 1st Respondent for those years. [119] The learned trial Judge's conclusion was therefore quite at variance with and to the opposite of the evidence that was before the Court. Granted, the Appellant under cross-examination pointed to the performance of the Group. However, this was clearly an erroneous slip made under cross-examination. The profit made by the 1st Respondent was in fact set out in the very column next to where the Appellant had erroneously pointed to. [120] It also needs to be stated that it was not even pleaded as a defence that the dividend payment claimed by the Appellant was not viable or warranted because no profits were made by the 1st Respondent. [121] The payment of dividends declared was also never prohibited by either the Status Quo Order or the Consent Judgment. That it might affect the valuation of the 1st Respondent's shares merely means that the parties would have to apply to Court in Petition 115 for the probable need to adjust the valuation. The Consent Judgment itself facilitates such an application as it is provided therein that the parties have liberty to apply. [122] Apart from the many proceedings brought by the parties, what continues to facilitate controversy between the parties is the tardiness in fully complying with the terms of the Consent Judgment. Had the valuation been completed earlier with the cooperation of both parties and the shares bought by the 2nd and 3rd Respondents, the disengagement of the parties would have been completed, leaving less room for controversy and unnecessary confrontation between the two factions. The alleged RM100,000.00 loan [123] As for the Appellant's claim for the sum of RM100,000.00 allegedly being a loan given to the 1st Respondent, the learned trial Judge held as follows:

No evidence was led by the plaintiff to prove his claim that he had given a loan of RM100,000.00 to the first defendant. The plaintiff's claim under this head would therefore also fail. [124] Indeed, the Appellant did not even mention this claim in his witness statement or in his testimony. [125] The learned trial Judge's finding that this claim by the Appellant fails cannot be faulted. Summary [126] By way of summary based on the foregoing grounds, it was the view of this Court that the various orders referred to do not warrant the restrictions read into them to preclude the Appellant's claims. [127] Nothing in the Consent Judgment precluded payment of salary, bonuses or EPF contributions to employees of the 1st Respondent. [128] The Status Quo Order did require the parties to sign all cheques for inter alia salary and EPF, and these were among the claims made by the Appellant. [129] The Appellant's salary increment, including those of other staff, authorised by the Board of Directors of the 1st Respondent on 11th February 2015 remains valid by reason of the decision of the Court of Appeal in Appeal 805. [130] The 2nd Respondent was inconsistent and somewhat disingenuous when he admitted having signed cheques for payment of salary to the other staff of the 1st Respondent but chose not to do so similarly for payment of the Appellant's salary, bearing in mind the salaries of the other staff had also been increased by the very same resolution of the Board of Directors of 11th February 2015. [131] In addition, there was simply no evidence that the Appellant had collected his salary for the months of January to April 2017. The authorisation given for the Appellant to pay his own salary from cash sales was only given in January 2018, well after the arrears of salary claimed. [132] As for the payment of dividends, again none of the orders made precluded the payment of dividends. Specifically, neither the Consent Judgment nor the Status Quo Order precluded the payment of dividends by the 1st Respondent. [133] In addition, the resolutions of the Board of Directors of the 1st Respondent and its shareholders in general meeting approving the dividends declared, have never been set aside. [134] Lastly, as to whether the 1st Respondent made profits for the year ended 31st August 2012, 31st August 2013 and 31st August 2014, there was clear and uncontroverted evidence that it did so in the accounts referred to during the trial, which also included the confirmation by the directors in the Directors' Report. [135] Based on the learned trial Judge's grounds of judgment, there were two issues that lead to the dismissal of the Appellant's claims. The first was a matter of construction of the Status Quo Order and the other orders referred to, which is a matter of law. Contrary to the learned trial Judge's conclusion, we have found that none of the orders referred to precluded the claims made by the Appellant. [136] The second relates to findings of fact. They related to whether the Appellant had collected his salary claimed from cash sales of the 1st Respondent and whether the 1st Respondent had made profits to be able to declare dividends. [137] The legal principles applicable in respect of appellate intervention was recently revisited by the Federal Court in Ng Hoo Kui & Anor v Wendy Tan Lee Peng, Administrator of the Estates of Tan Ewe Kwang, Deceased & Ors [2020] 10 CLJ 1. In an erudite and clear analysis of the relevant cases and principles applicable including the 'plainly wrong' test, Zabariah Mohd Yusof FCJ concluded as follows: [76] What is pertinent is that, the "plainly wrong" test is not intended to be used by an appellate court as a means to substitute its own decision for that of the trial court on the facts. [77] It is to be observed that this court in Tengku Dato' Ibrahim Petra Tengku Indra Petra (supra) had referred to McGraddie (supra) and Henderson (supra) and has adopted the Henderson (supra) approach of the "plainly wrong" test in determining whether the trial court's findings of fact is reversible upon appeal: Recently in Henderson v. Foxworth Investments Ltd and Another [2014] 1 WLR 2600, the United Kingdom Supreme Court held that in the absence of some other identifiable error, such as a material error of law or the making of a critical factual finding which had not interfered with the factual finding which had no basis in the evidence, an appellate court should not interfere with the factual findings of a trial judge unless it was satisfied that the decision of the trial judge was "plainly wrong" in the sense that it could not reasonably be explained or justified and so was one which no reasonable judge could have reached, and that if the appellate court was not satisfied that the decision came within that category it was irrelevant that, with whatever degree of certainty, it considered that it would have reached a different conclusion from the trial judge. (emphasis added) [78] Hence following this court's ruling in Tengku Dato' Ibrahim Petra Tengku Indra Petra (supra) an appellate court should not interfere with the factual findings of a trial judge unless it was satisfied that the decision of the trial judge was "plainly wrong" where in arriving at the decision it could not reasonably be explained or justified and so was one which no reasonable judge could have reached. If the decision did not fall within any of the aforesaid category, it is irrelevant, even if the appellate court thinks that with whatever degree of certainty, it considered that it would have reached a different conclusion from the trial judge.' [138] On the facts, for the reasons given, we are satisfied that the learned trial Judge was, with respect, plainly wrong in concluding that there was uncertainty as to whether the Appellant had collected his salary, bonus or EPF claimed as there was simply no evidence that the Appellant had collected payment for these sums claimed. [139] As for the finding that the 1st Respondent made no profits for the years 2012,2013 and 2014, this was with respect also plainly wrong as the very accounts referred to stated otherwise. [140] My learned brothers Yaacob bin Hj. Md Sam and Ravinthran Paramaguru have had the opportunity to consider the draft of this judgment and have indicated their concurrence with it. Conclusion [141] In conclusion, the Appellant's appeal was allowed in part. The Appellant's claim for payment of his salary in arrears, his bonus and EPF contribution and the dividends that he was entitled to as declared were allowed. The order of the High Court to the contrary in this regard was set aside. Dated this 31st day of May 2021 (DARRYL GOON SIEW CHYE) JUDGE COURT OF APPEAL MALAYSIA PUTRAJAYA CASES CITED Ng Hoo Kui & Anor v Wendy Tan Lee Peng, Administrator of the Estates of Tan Ewe Kwang, Deceased & Ors [2020] 10 CLJ 1 LEGISLATION AND LEGAL TEXT CITED Acts - Order 14A of the Rules of Court 2012 - Section 131 of the Companies Act 2016 - Section 181 of the Companies Act 1965. Counsel/Solicitor For the Appellant: Florencia a/p A Sandanasamy Messrs Florencia & Partners No 73-3, Plaza Damansara Jalan Medan Setia 1 Bukit Damansara 50490 Kuala Lumpur Tel. No. 013-3954123 Fax No. 03-2095 3008 For the Respondents: Choo Chew Hynn (Lee Kar Chee with him) Messrs C.C. Choo, Hazila & Teong Suites A-20-9, A-20-10 & A-20-11 Tower A, Level 20. Menara UOA Bangsar No. 5, Jalan Bangsar Utara 1 Bangsar 58000 Kuala Lumpur Tel. No. 0327115530 Fax No. 0327115529