Low Kian Hoew v 1. Lu Zhijun (WA-22NCC-335-07/2020)

LU ZHIJUN [Passport No.: G48187452]

TANG RUIPING [Passport No.: EA1729995]

GOLDEN MILE PLASTIC RESOURCES SDN BHD [Company No.: 1220674-W] … DEFENDANTS GROUNDS OF JUDGMENT INTRODUCTION [1] There were 4 applications before the Court for hearing:

Enclosure (“Enc.”) 12 is the Plaintiff’s application for an injunction to restrain the Defendants, their agents and/or servants from disposing of any shares and/or all assets from Ruizhi Plastics Sdn Bhd (“Ruizhi”) and from the 3rd Defendant Company pending the disposal of the present Suit; 2

(ii) Enc. 29 is the Plaintiff’s application to join Ruizhi as a Defendant and to amend his Writ of Summons (“Writ”) and Statement of Claim (“SOC”) pursuant to Order 15 rule 6 and Order 20 rule 5 of the Rules of Court (“ROC”), 2012 respectively;

(iii) Enc. 26 is the Plaintiff’s application to amend Enc. 12 to reflect the proposed amendments sought for in Enc. 29; and

(iv) Enc. 14 is the 3rd Defendant’s application to strike out the Writ and SOC both redated 14.9.20 pursuant to Order 18 Rule 19(1)

ROC, 2012. [2] On 18 November 2020, after considering the written submissions filed by the parties and the online arguments conducted via e-review, I dismissed Enc. 29, Enc. 26, Enc. 12 and Enc. 14. [3] As the matters were related, it is convenient to deal with all the 4 enclosures in one judgment. This judgment as such contains the full reasons for dismissal of all 4 enclosures. BACKGROUND [4] The Plaintiff was at all material times a director and shareholder of Ruizhi, holding 1,400,000 shares representing 70% of the total shares of 2,000,000 in Ruizhi as Trustee, for and on behalf of the 1st and 2nd Defendants. The arrangements between the parties were set out in a Shareholders’ Agreement and Trust Deeds all dated 11.12.2018. 3 [5] The Plaintiff also used to be a director and shareholder of the 3rd Defendant since incorporation on 6.3.2017 until 23.9.2019 holding shares registered in his name for the 1st and 2nd Defendants. [6] Sometime in January 2019, the 1st and 2nd Defendants were desirous to sell their shares in Ruizhi. [7] The Plaintiff informed the 1st and 2nd Defendants of his intention and desire to purchase all the Ruizhi shares totalling 2,000,000 at a purchase price of RM1,800,000.00. [8] The 1st and 2nd Defendants agreed to sell their entire 2,000,000 shares in Ruizhi to the Plaintiff at RM1,800,000.00. [9] The terms of the sale and purchase of the Ruizhi shares were reflected in an agreement dated 11.7.2019 executed under the letterhead of the 3rd Defendant (“the SSA”). [10] According to the terms of sale, the balance purchase price was to be paid at end October 2019. [11] The Plaintiff had paid and/or set-off a sum of RM1,292,600.00 of the purchase price leaving a balance sum of RM680,130.80 to be paid. [12] It is common ground that the balance payment date was extended to 1.6.20 (“extended payment date”). Time was to be the essence. [13] On 1.6.2020, the 1st Defendant (and also on behalf of the 2nd Defendant) terminated the Share Sale Agreement and this was 4 communicated to the Plaintiff by the 1st Defendant. Hence the present suit was filed by the Plaintiff. Meanwhile, the Plaintiff remained in control and management of Ruizhi. [14] Pending the inter partes hearing of Enc. 12, the Plaintiff was removed as a director of Ruizhi on 14.9.2020 allegedly pursuant to Clause 4.1.4 of the Shareholders’ Agreement and a new director named Balamurugan A/L Mariappan was appointed in his stead. [15] For ease of reference, the chronology of events that had transpired up to filing of Enc. 29 and 26 prepared by the Defendants and which is indisputable is produced: Date Event 11.12.2018 The Plaintiff entered into a shareholders’ agreement (the “Shareholders’ Agreement”) and 2 separate trust deeds (the “Trust Deeds”) with the 1st and 2nd Defendants in relation to Ruizhi Plastics Sdn Bhd (“Ruizhi”). The material terms of these documents include:

The Plaintiff is to hold the 70% of shares in Ruizhi (registered in his name) on trust for the 1st and 2nd Defendants in equal shares;

The Plaintiff is appointed as a director of Ruizhi and is responsible to administer and manage the business of Ruizhi; and 5

So long as the Plaintiff remains a trustee of the said shares, the Plaintiff shall act in accordance the directions and instructions of the 1st and 2nd Defendants.

11.07.2019 The Plaintiff and the 1st and 2nd Defendants entered into a share sale agreement (the “SSA”) wherein the 1st and 2nd Defendants are to sell, and the Plaintiff to purchase, the entire shareholding of Ruizhi for the sum of RM1,800,000 (the “purchase price”). The purchase price is to be paid on the following schedule:

RM200,000 on 15.07.2019;

RM200,000 on 20.08.2019; and

The balance of RM1,400,000 at the end of October 2019.

12.02.2020 The Plaintiff sought an extension of time to pay the remainder of the purchase price. An extension of time to pay the reminder of the purchase price was given till 01.06.2020. This deadline was communicated to, and acknowledged by the Plaintiff. There was a remaining sum of RM680,130.80 (the “remaining sum”) to be paid pursuant to the SSA. 6

20.05.2020 (on or around) 1st Defendant informed Plaintiff that he and the 2nd Defendant would not be accepting payment by cheque due to a previous occasion when the cheque provided by the Plaintiff was rejected.

01.06.2020 The extended deadline for payment of the remaining sum. The Plaintiff contends that the 1st and 2nd Defendants refused to accept payment whilst the 1st and 2nd Defendants contend otherwise (namely, that the Plaintiff had failed to make payment of the remaining sum by the deadline).

29.07.2020 The Plaintiff filed the original Writ of Summons (the “Original Writ”) and Statement of Claim (the “Original SOC”).

28.8.2020 The Defendants filed the Defence & Counterclaim. The Counterclaim is filed by the 1st and 2nd Defendants against the Plaintiff and is premised on the Plaintiff’s breaches of the Shareholders Agreement and/or Trust Deeds; it sought for inter alia, reliefs involving the transfer of the shares of Ruizhi registered in the name the Plaintiff (amounting to 70% of the 7 shareholding) but held on trust for the 1st and 2nd Defendants, from the Plaintiff to the 1st and 2nd Defendants.

02.09.2020 The Plaintiff affirmed his affidavit in support of Enclosure 12.

04.09.2020 The Plaintiff filed his amended Original Writ and Original SOC. The only amendment was to the name of the Plaintiff (removing ‘Jeffrey’ from his name). The remainder of the Original SOC remains the same (and will be referred to as such, hereinafter).

11.09.2020 The Plaintiff filed his Reply to Defence & Defence to Counterclaim.

14.09.2020 The Plaintiff filed Enclosure 12, which is the Plaintiff’s application for interim injunctive reliefs.

15.09.2020 The 3rd Defendant filed Enclosure 14, which is the 3rd Defendant’s application to strike out the Plaintiff’s claim.

23.09.2020 The Defendants filed their respective affidavits in reply to oppose Enclosure 12. The Plaintiff filed his supplementary affidavit in respect of Enclosure 12. 8

25.09.2020 The Defendants filed their Reply to Defence to Counterclaim. The Plaintiff affirmed his affidavit in support of Enclosure 29 and his affidavit in support of

28.09.2020 The Plaintiff filed Enclosure 26 and 29. The Defendants filed their affidavit in reply to the Plaintiff’s supplementary affidavit in respect of Enclosure 12. Enc. 29 [16] At the hearing on 18.11.20, it was agreed by the parties that Enc. will be heard first, and the fate of Enc. 26 will follow Enc. 29. The Court acceded to the arrangement. [17] In summary, the Plaintiff’s grounds for Enc. 29 are:

it was necessary to join Ruizhi as a defendant;

(ii) the amendments are bonafide and are justified by all contemporaneous documents exchanged as-between the parties. Additionally, full particulars of the proposed amendments have been disclosed;

(iii) the proposed Re-Amended Statement of Claim will not have the effect of changing the character of the suit. It was alleged that 9 that at its core, the Amended Statement of Claim pleads the same basic facts;

(iv) the amendments will not cause any prejudice to the Defendants. In the unlikely event any prejudice should be caused to the Defendants (which is denied), the same will be adequately compensated for with a suitable order as to costs;

the application has been made at an early stage in the proceedings, at the earliest opportunity, upon the engagement of new solicitors as the Plaintiff’s previous solicitors did not fully appreciate the approach to the matter that the Plaintiff intended to adopt and that at all material times, the Plaintiff had always instructed the solicitors that he was desirous of obtaining the shareholding in Ruizhi Plastics, given that he had put a considerable amount of work into the same;

(vi) that the Plaintiff was advised by his current solicitors and verily believe that if the 1st and/or 2nd Defendant were to take-over control of Ruizhi Plastics, they would be unjustly enriched and derived an unfair benefit;

(vii) that he had lodged a police report dated 12.06.2020 which clearly stated that he “intended for the acquisition of the shares in Ruizhi Plastics” – exhibit A-14; it is alleged that the police report shows his bona fide intention to recover the shares in Ruizhi Plastics; and 10

(viii) the amendment application ought to be allowed to ensure that the full dispute between the parties is adjudicated correctly and thoroughly; and [18] In supporting his submissions, Learned Counsel for the Plaintiff relied on:

Yamaha Motor Co Ltd v Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213,

Hong Leong Finance Bhd v Low Thiam Hoe and another appeal [2016] 1 MLJ 301,

ESP Synergy Sdn Bhd v KB Enviro Sdn Bhd [2018] 8 MLJ 516,

Bumiputra-Commerce Bank Bhd & Ors v Bumi Warna Indah Sdn

Limatic Holdings v PKNS [2019] MLJU 980;

Lee Ah Lan v Lee Kim Lan Constructions [2003] 1 MLJ 409;

Kewangan Bersatu v Yap Ah Yit [1998] 7 MLJ 442;

Palaniappan v Universiti Pertanian Malaysia [1995] 1 MLJ 353;

TNB v Kamarstone [2014] 2 MLJ 749; 11

Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 at 405;

Hee Awa v Syed Muhammad Sazalay [1988] 1 MLJ 300;

Kuala Lumpur Finance v Azmi & Co [1996] 4 MLJ 650; and

Chan Yee v Chan Yoke Fong [1990] 3 MLJ 297 (SC); [19] To appreciate the sting of the Defendants’ objections to the amendment application, I have reproduced them in summary:

(A) the amendments sought in the Proposed SOC would in effect turn the suit from one character into a suit of another and inconsistent character:

The Defendant’s learned counsel argued that a claim seeking for specific performance based on a breach of contract is very different from a claim seeking for rescission of the contract based on fraud and misrepresentation: i. It is trite that a claim for specific performance has to be supported with the position that plaintiff was ready, willing and able to continue with or complete the contract in question. See: Lembaga Pembangunan Langkawi v Smart Unity Sdn Bhd [2017] MLJU 348: 12 “[68] It is well established that specific performance is an equitable relief and awarded according to the particular circumstances of the case. Thus a party cannot obtain an order for specific performance if he himself has breached obligations and is not ready and able to perform his obligations. We have earlier stated grounds for our finding that the plaintiff has not shown himself to be ready, able and willing to undertake the Project…” ii. It is also trite that the remedy of specific performance is inconsistent with the remedy of rescission. See: Camp and another v Day Smith & Hunter (a firm); Same v Grimwood [1991] Lexis Citation 1996, AC (per Lloyd LJ): “The doctrine of approbation and reprobation was considered by the House of Lords in Lissenden v Bosch [1940] AC 412 by the Court of Appeal in Banque des Marchands de Moscou v Kindersley [1951] 1 Ch 112. The doctrine may apply where the plaintiff is seeking two mutually inconsistent remedies, as, for example, where a plaintiff seeking an order for specific performance of a contract is at the same time taking steps to enforce a claim for rescission. Horsler & Anor v Zorro [1975] Ch 302 (per Meggary J at pages 309-310) (this decision was referred with approval by the Court of Appeal in Loke Yuen Cheng & Anor v Vimtex Sdn Bhd [1998] 4 MLJ 169 – per NH Chan JCA at page 175): “But I should mention briefly the decision of the Court of Appeal in Public Trustee v Pearlberg [1940] 2 K.B. 1. This shows that a 13 party to a contract cannot rescind it while an action of his claiming specific performance of it and damages is in existence for the two remedies are inconsistent with each other. If the claim for specific performance and damages is abandoned, there may then be rescission (see per Luxmoore L.J., at p. 18); but I do not think the reverse process is possible, for once a contract has been rescinded it is at an end, and there cannot very well be a decree for the specific performance of a contract which no longer exists. Second, the process of rescission is essentially the act of the party rescinding, and not of the court. Of course, if matters are disputed, the dispute may have to be determined by the court, and until the decision is given it will not be known whether or not there has been a proper and effectual rescission: but that does not mean that there is no rescission until the court speaks.”

Learned counsel pointed out that in the Original SOC, the Plaintiff had pleaded that he was induced by fraud and misrepresentation to enter into the SSA. There was no mention, whatsoever, that he was ‘ready, willing, and able’ to continue with the performance of the SSA; in fact, he had sought for its rescission. In the Reply to Defence and Defence to Counterclaim, the Plaintiff at paragraph 20, maintained that ‘he had suffered loss and damage as a result of the fundamental breaches by the Defendants and seeks compensation as claimed in paragraphs 30 and 31’ of the Original SOC when replying to the Defendants pleading that they ‘are at, at all material times, ready and willing to refund to the Plaintiff of any payment (if any, which is denied by the Defendants) made by the 14 Plaintiff towards purchase of the sale shares’ at paragraph 30 of the Defence & Counterclaim.

However, in the Proposed SOC, the Plaintiff took a radically different turn and had instead pleaded that he was ‘ready, willing and able’ to continue with the SSA, and sought for specific performance of the SSA. All previous pleadings involving fraud, misrepresentation and/or breach of collateral warrant have been completely abandoned. See: Syarikat Ying Mui Sdn Bhd v Muthusamy A/L Sellapan And Other Appeals [1999] 6 MLJ 622, HC (per Clement Skinner JC (as he then was) at pages 634-635): “Whilst I agree that the relief sought remaining unchanged is a factor that should be taken into account, in my judgment, the court will concern itself more with the facts relied upon by the appellant in claiming that relief because it is principally upon those facts that the court will arrive at a finding on whether or not the character of the suit has changed. On the facts as presently pleaded, the appellant’s claim to possession of the said land is founded on a cause of action pleaded in tenancy, an oral tenancy to be exact, and one which had been duly terminated by a proper notice to quit. However, what the amendments seek to do is to assert a right to possession founded on a cause of action pleaded essentially in trespass, even though the word trespass is not actually used, which relies upon the following new facts which were not pleaded before:

the appellant only became owners of the land in 1976;

the respondents occupy the said land without the consent and/or permission of the appellant. 15

upon discovering the name of the respondents the appellant served on the respondents a notice to vacate the land. It is evident that the appellant in fact seeks to substitute one cause of action with another of inconsistent character based on facts which are not the same or substantially the same as already pleaded; a tenancy and rights associated with tenancy essentially arise out of contract whereas, trespass is founded in tort. I therefore find counsel’s submission on this issue cannot be supported.”

Counsel further said that the mere amendment to the reliefs alone could be sufficient to show that the Suit has changed from one character to another that is inconsistent. The Defendants would clearly be prejudiced as they are ‘now compelled to meet a case radically different from the one it was first called upon to meet’. By substituting its main relief of rescission of the SSA to a relief of specific performance of the SSA, it is obvious that the Plaintiff, by way of the Proposed Amendments, seeks to ‘pursue remedies which stand on a very different footing’ from that which was previously pleaded. This simply cannot be allowed. See: E & O Trading Sdn Bhd v Americk Singh Sidhu & Ors And Another Appeal [2018] 6 MLJ 783, CA (per Idrus Harun JCA) at pages 792-793): “[19] We refer to the Court of Appeal’s decision in Kerajaan Negeri Selangor v Syarikat Bekalan Air Selangor Sdn Bhd; Kerajaan 16 Malaysia (third party) [2012] 1 LNS 979 where this court reversed the High Court’s decision in allowing an amendment application on the basis that the amendment widened the claim. Ramly Ali JCA (as His Lordship then was) in delivering the judgment of the court said: [10] ….. The amendment would change the character and scope of the first respondent’s claim. In the proposed amendment the first respondent is seeking for declaration that the agreed tariff was RM1.89/m3. This ran counter to the position taken that it was entitled under cl 11.3(4) of the concession agreement for the sum originally claimed by reason of the application of the prescribed formula. Without an agreed tariff, the compensation could not be said to be due. The agreed tariff (as the name suggests) must be determined by agreement of the parties to the concession [2018] 6 MLJ 783 at 793 agreement, and to ask for a declaration of the court to that effect (without an agreement of the parties) is actually changing the scope and character of the claim in the statement of claim. [11] …. [12] …. [13] The proposed amendment was only to para 29 of the statement of claim, i.e. the paragraph setting out the prayers in the statement of claim. No amendment was sought to the main body of the pleading. The appellant is clearly prejudiced. The appellant is now compelled to meet a case radically different from the one it was first called upon to meet. As such the pleaded case of the first respondent went in one direction (based on the specific provision of cl 11.3) whereas the prayers invited the court for a determination of facts in a different direction. This will pose difficulties in the preparation for trial by the appellant – particularly in preparing for its defence if the amendment is 17 allowed by the court. This is a case where the respondent has been granted leave to pursue remedies which stand on a very different footing. The claim was originally one confined to a narrow premise; its scope has now been extensively widened by the amendment. The nature of the proposed amendments and the impact it has on the issues at trial cannot be ignored. (Emphasis added) [20] Applying the above decision to the facts of the present case, it could reasonably be said that had the learned judge appreciated the expansion of the respondent’s claim from an easement to ownership which is clearly a complete departure from the main relief earlier sought. His Lordship would have appreciated the issue that arose from the expansion and the prejudice that would be caused to the appellants.”

Counsel postulated that defending a claim for rescission of the SSA premised on fraud and misrepresentation would be very different from defending a claim for specific performance of the SSA. ‘The nature of the proposed amendments and the impact it has on the issue at trial cannot be ignored’. ‘This will pose difficulties in the preparation for trial by the [Defendants] – particularly in preparing for [their] defence if the amendment is allowed by the court. See: E & O Trading Sdn Bhd (supra)

Counsel elaborated that, the facts pleaded in the Original SOC cannot support a claim for specific performance of the SSA. It also cannot be said that the new cause of action and/or relief sought in the Proposed SOC arise ‘out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action’, particularly, 18 where the relief of specific performance was never claimed in the Original SOC. See: Asia Pacific Land Bhd & Ors v Datuk Bandar Kuala Lumpur [2006] 2 MLJ 137 (per Abdul Malik Ishak J (as he then was) at pages 152-153 and 168): “[30] As regards the meaning to be attached to the phrase ‘cause of action’, Abdul Hamid Omar, Acting Lord President, in Hock Hua Bank Bhd v Leong [2006] 2 MLJ 137 at 153 Yew Chin referred to the case of Letang v Cooper [1965] 1 QB 232, at pp 242-243 where Lord Justice Diplock defined it to mean ‘a factual situation the existence of which entitled one person to obtain from the court a remedy against another.” ….. [74] Approaching the defendant’s appeal in encl 35 (now encl 27) with care and circumspection, I must categorically say that a mere reference to the ‘breach of statutory duty’ did not mean that the cause of action had been pleaded. A careful perusal of the facts in the original statement of claim would clearly indicate that the facts in as stated therein were in respect of the cause of action for negligence and nuisance. In my judgment, in order to amount to a cause of action for breach of a statutory duty, the relevant statute must be pleaded and the breach must be stated in order to prove the liability. And in regard to the issue of damages, the plaintiffs must show that the damages suffered fall within the ambit of the statute. How could there be a breach of the statutory duty if the statute was not pleaded by the plaintiffs?” 19

Counsel submitted that it is important to note that ‘the process of rescission is essentially the act of the party rescinding, and not of the court’. When the Plaintiff pleads facts in support of his remedy of rescission (premised primarily on fraud and misrepresentation), and seeks rescission as his primary remedy, it is inconsistent for him to change from that position to one where he is pleading facts in support of his remedy of specific performance, a remedy which is inconsistent with rescission (as is established by the authorities cited above). See Horsler v Zorro [1975] Ch 302 (per Megarry J at pages 309-310) (supra): “But I should mention briefly the decision of the Court of Appeal in Public Trustee v Pearlberg [1940] 2 K.B. 1. This shows that a party to a contract cannot rescind it while an action of his claiming specific performance of it and damages is in existence, for the two remedies are inconsistent with each other. If the claim for specific performance and damages is abandoned, there may then be rescission (see per Luxmoore L.J., at p. 18); but I do not think the reverse process is possible, for once a contract has been rescinded it is at an end, and there cannot very well be a decree for the specific performance of a contract which no longer exists. Second, the process of rescission is essentially the act of the party rescinding, and not of the court. Of course, if matters are disputed, the dispute may have to be determined by the court, and until the decision is given it will not be known whether or not there has been a proper and effectual rescission: but that does not mean that there is no rescission until the court speaks.”

Counsel added that it is also important to note that the matters raised in the Proposed SOC were already available when the 20 Original SOC was filed. Particularly, the fact of whether the Plaintiff was ‘ready, willing and able’ to continue with the SSA could have been pleaded at the outset; however, it was never alluded to in the Original SOC and was never pleaded in the Reply to Defence and Defence to Counterclaim (which maintained the Plaintiff’s position of seeking compensation for the fraud, misrepresentation and/or breach of collateral warranty that was originally pleaded). i. The reason given such a departure by way of the filling of Enclosure 29 was due to the change of solicitors and that the Plaintiff’s ‘previous solicitors did not, with respect, fully appreciate the approach to the matter that [the Plaintiff] intend to adopt’. With respect, such reasoning is devoid of merit and will be dealt with below when the bona fides of Enclosure 29 is examined.

In support of the above submissions, Learned Counsel for the Defendants further referred to the following authorities:

K Rajashekar a/l Kanapathy & Ors v Palm Court Condominium & Ors [2014] 9 MLJ 297 (per SM Komathy JC (as she then was) at pages 309-310: “[35] I agree with the 15th defendant that the proposed amendment if allowed, would turn the suit from one character into a suit of another and inconsistent character. The original claim is for damages for the actions of the JMB in moving the main entrance. By the proposed amendments the plaintiffs seek to have the tenancy agreements declared null and void. 21 Applying the dictum of Mohd Azmi FCJ in Yamaha Motors, this is not permissible. The plaintiffs’ claim for damages would be converted into a claim for rescission of the agreements based on a completely different factual structure. The court should be assiduous to prevent an abuse of the process of court by those who are tardy and indolent.”

Sek Ann Thong v Tamparuli Granite Quarry (Sabah Sdn Bhd) & Anor [1995] 4 CLJ 757 (per Tee Ah Sing JC (as he then was) at pages 765-766: “It is plain that the proposed amendment in paragraph 11 would introduce an entirely new cause of action in that it could not be said that it had arisen out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed by the plaintiff. I am not unmindful of the fact that these facts to support the new cause of action only came to light after the findings of the receiver appointed ex parte by the Court on 26 November 1985. In my opinion it cannot be inferred that the statement of claim includes this new cause of action. I am therefore of the view that the plaintiff has failed to bring the proposed amendments in paragraph 11 within the scope O. 20 r. 5 of the RHC. (See case of Hock Hua Bank Bhd v Leong Yew Chin [1987] 2 CLJ 98 at page 232 where His Lordship Abdul Hamid Ag. LP (as he then was) said: ‘It is also clear from the established principle that the Court has power to grant an amendment after the expiry of the limitation period notwithstanding that the effect of the amendment will be to add or substitute a new cause of 22 action subject to one very important condition, namely, that the new cause of action must arise out of the same or substantially the same facts as the cause of action in respect of which relief had already been claimed.’ ..... And for prayer (viii) the proposed amendments as underlined are as follows:

(viii) for an order for specific performance of the joint venture agreement that either, the shares purportedly allotted to the plaintiff and 2nd defendant on 15 May 1985 be ordered to be cancelled or that the 2nd defendant be ordered to transfer 100,000 of his shares in the 1st defendant to the plaintiff and they are to pay for the allotment. In respect of the proposed amendments the learned Counsel for the plaintiff submitted that these arise out of the matters pleaded in paragraph 5 of the statement of claim. On the other hand, the learned Counsel for the defendants submitted that this is a new cause of action. It converts the character of this suit into a different and inconsistent type within the Yamaha principle. The existing statement of claim is largely a claim for accounts and for an order to pay up funds not accounted for in the books of the company. The proposed claim for specific performance is in the nature of a company law relief under s. 162 of the Companies Act. It calls for a cancellation of the new allotment of shares and for a retransfer of shares. 23 I agree that the proposed amendments would in effect turn the suit from one character into a suit of another and inconsistent character. As such, the proposed amendments are disallowed.”

Mah Sing Properties Sdn Bhd v Sky Acres Sdn Bhd [2020] MLJU 1499, HC (per Evrol Mariette Peters JC at paragraphs 18-31): “[18] The application to amend was filed on 27 September 2019, which was 21 months after the original Defence was filed. From the records and minutes of the court proceedings, this was after 14 case managements held from 5 December 2017 until 11 September 2019. The reason given was that the Defendant had changed solicitors. [19] A perusal of the grounds of judgment indicated that the learned SCJ had taken this into consideration but found it unacceptable as the change of solicitors was done only after the decision of the Court of Appeal in the earlier suit which was unfavourable to the Defendant. I agreed with the learned SCJ, that a change of solicitors cannot be an excuse for delay in filing an application, lest it be a tactic for indolent litigants to justify delay on their part. .... [21] I am unable to agree with the contention of the Defendant, bearing in mind that first and foremost, delay must be looked at contextually and not in isolation. The Defendant argued that the issue of delay did not even arise since the trial dates were not scheduled. However, it must be borne in mind that the application to amend was made only after the Plaintiff had filed its application for summary judgment. 24 [22] It is also pertinent to note that in the cases that the Defendant had relied on, it was stated that delay alone is not a ground to refuse an application for leave to amend, provided no injustice or prejudice is suffered by the opposing party and that the proposed amendments should not change the nature and character of the defence. [23] In this case, the learned SCJ’s decision was not based upon the issue of delay alone. She had specifically stated that the reason for the delay was unacceptable, as change of solicitors could not be an excuse in light of the fact that the Plaintiff had already filed and application for summary judgment, and that a date had been scheduled for its decision. Furthermore, it would be grossly unjust to the Plaintiff if the application to amend was allowed – an injustice which in my view could not have been compensated by costs. [24] In this context, I found instructive and relevant, the case of Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor [1988] 3 MLJ 348, where an analogy can be drawn, as in that case, although trial dated had not been scheduled, the application to amend was disallowed as the same was found to be an attempt to circumvent the application to strike out the original writ and the statement of claim. [25] The Plaintiff’s submission was that the timing of this application to amend, raised the issue of bona fides or lack thereof and it was, therefore, a tactical manoeuvre to resist the application for summary judgment. [26] Where there a delay in making an application to amend, the applicant must ‘place some material and advance some cogent reasons to impel the court to lean on his side’, failing which, the inference is that the “application borders on lack of bona fides”; 25 per Haidar JCA in Taisho Co Sdn Bhd v Pan Global Equities Bhd & Anor [1999] 1 MLJ 359 adopting the Singapore case of Multi-Pak Singapore Pte Ltd (in receivership) v Intraco Ltd & Ors [1993] 2 SLR 113. [27] I found the Defendant’s reason for its delay unconvincing as it did not explain why the averments in the proposed amendments, were not mentioned in the original Defence, bearing in mind that these facts were readily available at the time the original Defence was filed. [28] On this note, reference is again made to Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor where it was held that the circumstances in which an amendment would not be permitted are: (a) where the facts giving rise to the amendment were known at the time of the original pleading; and

where the delay in making the amendment was in connection with some tactical manoeuvre. [29] The same concerns were expressed in Lim Nyang Tak Michael v ACE Technologies Sdn Bhd [1995] 4 MLJ 616, where in dismissing the defendant’s application to amend the defence, the Court held that if the defendant truly had a valid defence, it would not have waited, and the fact that it did, raised the inference that the application was a tactical manoeuvre and was done in bad faith to delay the rights of the plaintiff on his claim. [30] Both Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor and Lim Nyang Tak Michael v ACE Technologies Sdn Bhd [1995] 4 MLJ 616 were approved and adopted by the court in Jupiter Securities Sdn Bhd v Wan Yaakub Bin Abd Rahman [2002] 3 MLJ 264. 26 [31] Since the facts were already known to the Defendant at the time the original Defence was filed, coupled with the late filing of the application to amend, the irresistible inference is that filing of the application to amend was in relation to some tactical manoeuvre.

Jupiter Securities Sdn Bhd v Wan Yaakub Bin Abd Rahman [2002] 3 MLJ 264 (per Faiza Tamby Chik J at pages 270- 272): “In the instant case, the defendant’s application was not bona fide due to the following reasons:

although the defendant purportedly had knowledge of the purported fraud even if it was true, the facts were known by the defendant since 1997 but the defendant had failed to disclose the same in his original statement of defence;

(ii) the defendant’s application to amend was also very late and was made in the nature of a ‘tactical manoeuvre’ to delay proceedings of the summary judgment application against the defendant.... ......

(iv) after perusing the documents in the file, I have come to the conclusion that the defendant’s application was also not bona fide because it changed the basis of the defendant’s defence to a stand inconsistent with the original statement of defence. The original statement of defence of the defendant was generally a bare denial, and the defendant even denied that he had entered into a contract with the plaintiff to open the trading account of shares vide the individual account application form dated 18 December 27 1996 and denied the terms therein (see paras 2 and 3 of the original statement of defence at p 41 of the record of appeal), whereas now the defendant admitted in the amended statement of defence that the contract was entered into and all the terms therein (see para 1 of the amended statement of defence, p 46, of the record of appeal). The amendment application of the defendant which was inconsistent with the original pleading without due explanations was wrongful and ought not to be allowed. In Bank of Commerce (M) Bhd v Hj Mazlan Hj Khamis & Ors [1999] 1 CLJ 499, the court held that: ‘A court has to look at the substance of the amendments sought and not the label that the party applying to amend attaches to the amendments, even if the amendments are contended to raise claims or defences in the alternative. Looking at the amendments sought here, it was clear that the first defendant was pleading disputed facts. The first defendant sought to take a stance not only inconsistent with the but also contrary to what was pleaded in the original defence and counterclaim.’ The defendant’s application was filed on 28 June 1999 although he knew the alleged facts earlier and although the plaintiff’s application for summary judgment was filed and served upon the defendant’s solicitors since 11 January 199 (see p 57 of the record of appeal). ..... I am of the view that the allegation stated by the defendant was not logical; not reasonable and ought not to be accepted because: 28

if the defendant’s explanation was accepted, this would mean that the defendant will be at liberty to file a statement of defence that did not disclose all the facts so that the proceeding can be delayed with an intention to amend the same later for his own personal motives. The defendant ought not to be allowed to abuse the process of court for his own reasons.”

(B) the amendments were not bona fide and a tactical manoeuvre on 2 broad grounds: (Bi) (a) Firstly, save for paragraph 26A in the Proposed SOC (which is in respect of events happening after the filing of the Suit), the amendments in the Proposed SOC could have been pleaded in the Original SOC, or even in the Reply to Defence and Defence to Counterclaim. i. No explanation was given as to why the matters raised in the Proposed SOC, which are quite inconsistent from the original SOC, were not raised earlier, ‘bearing in mind that these facts were readily available at the time the [Original SOC] was filed’; ii. The fact that the Plaintiff was ready, willing and able to complete the SSA and sought for specific performance of the SSA (as opposed to radically different pleading that he was induced by the fraud and misrepresentation to enter into the SSA and as such, sought rescission of the SSA) could have been pleaded in the Original SOC if that was indeed his position from the beginning. 29 iii. The claim for specific performance of the SSA, ‘if genuine and bona fide, should have taken centre stage and would have been pleaded from the outset.’

Counsel pointed out that the purported reason given by the Plaintiff for seeking to introduce these amendments (which are so markedly different from the Original SOC) at this stage is, in verbatim, as follows: “90. I respectfully state that this application has also been filed at the earliest opportunity, upon the engagement of my new solicitors.

I further respectfully state that my previous solicitors did not, with respect, fully appreciate the approach to the matter that I intended to adopt...” (emphasis added)

Counsel respectfully submitted that such a frivolous reason cannot be entertained lest it give rise to the opening of floodgates, where litigants seeking to alter their positions solely by reason of change of solicitors because the previous solicitors ‘did not .... fully appreciate the approach to the matter that [they] intend to adopt’.

Counsel also submitted that the Plaintiff attempts to bolster this excuse by exhibiting a police report dated 12.06.2020 to show his purported bona fide intention of wanting to 30 recover shares in Ruizhi. This is an attempt to repaint the Original SOC as a mistake made by the Plaintiff’s former solicitors and not known to the Plaintiff until the filing of Enclosure 29. i. Counsel contended that such a position is frivolous, particularly in view of the Plaintiff having proceeded (on the causes of action and/or reliefs sought in the original SOC) in the present Suit through the filing of the Reply to Defence & Defence to CC, Enclosure 12 and/or the 2 affidavits filed in the proceedings of Enclosure 12, all of which are premised on the causes of action and/or reliefs in the original SOC. ii. Counsel added that in the affidavit affirmed on 02.09.2020 in support of Enclosure 12, the Plaintiff’s averments therein are in line with his claim for ‘fraudulent misrepresentation and breach of contract’ as was pleaded in the Original SOC. This is an affidavit affirmed personally by the Plaintiff before a Commissioner for Oaths and from the date of affirmation, it clearly supersedes the said police report lodged on 12.06.2020. Nowhere in the said affidavit was there a mention or indication of the Plaintiff being ready, willing and able to complete the SSA.

Counsel posited that it has been established that the change of solicitors, or the advice of the new solicitors, are not cogent reasons to justify the delay in the filing of 31 amendment applications; it is submitted that likewise, they are not cogent reasons to allow a party to change his position so radically in the proceedings.

Counsel submitted that whilst the trial dates are not fixed, that does not automatically entail that there is no inordinate delay in the filing of the amendment application. The question of whether there is delay (which as a result, will rise to the inference of the amendment application being a tactical manoeuvre), has to be ‘looked at contextually and not in isolation’. From the chronological facts set out above, it cannot be disputed that this application to amend was made only after: i. The Defendants had filed the Defence & Counterclaim, and the Reply to Defence to Counterclaim, after the Plaintiff had filed and served the Original SOC and his Reply to Defence and Defence to Counterclaim on the Defendants; ii. The Plaintiff had filed Enclosure 12 (for interim injunctive reliefs) against the Defendants, and the Defendants have filed affidavits in reply to oppose the same; and iii. The 3rd Defendant had filed Enclosure 14, which is the 3rd Defendant’s application to strike out the Plaintiff’s claim against it pursuant to Order 18 rule 19(1)(a) of the 32

Learned counsel questioned that if the Plaintiff truly had intended to claim for specific performance of the SSA when the Original SOC was filed, he would not have waited to file the application to amend until after the filing of the subsequent respective pleadings of the parties or Enclosures 12 and 14, as well as the exchange of affidavits between the parties in respect of Enclosure 12. ‘[T]he fact that [he] did, raised the inference that the application was a tactical manoeuvre and was done in bad faith to [stifle] the rights of the [Defendants] on [their Defence and Counterclaim]’.

Learned counsel then respectfully submitted that the inference from the above is that Enclosure 29 is a tactical manoeuvre on the part of the Plaintiff to re-write his claim after realizing that his original causes of action, reliefs and/or claim may not succeed or may face difficulty during the trial of the present Suit, which may include the circumvention of Enclosure 14 and cited the following cases in support: • E & O Trading Sdn Bhd v Americk Singh Sidhu & Ors And Another Appeal [2018] 6 MLJ 783, CA (per Idrus Harun JCA) at page 797 (supra): • Sek Ann Thong v Tamparuli Granite Quarry (Sabah Sdn Bhd) & Anor [1995] 4 CLJ 757 (per Tee Ah Sing JC (as he then was) at pages 765-766 (supra) 33 • Mah Sing Properties Sdn Bhd v Sky Acres Sdn Bhd [2020] MLJU 1499, HC (per Evrol Mariette Peters JC at paragraphs 18-31) (supra) • Jupiter Securities Sdn Bhd v Wan Yaakub Bin Abd Rahman [2002] 3 MLJ 264 (per Faiza Tamby Chik J at pages 270-272) (supra) • Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor [1988] 3 MLJ 348, HC (per Mohamed Dzaiddin J (as he then was) at page 351) • Lim Nyang Tak Michael v Ace Technologies Sdn Bhd [1995] 4 MLJ 616, HC (per Abdul Kadir Sulaiman J at page 623): “Now, if the defendant had a truly valid defence against the claim of the plaintiff it should not have waited until 25 July 1994 or as stated in the proposed amended defence until the discovery and/or inspection of documents to plead forgery and to bring in, in the proposed amendment the issue of someone else other than the plaintiff who was the agent. There was in the statement of claim of the plaintiff an averment concerning his agreement with the defendant based on a letter dated 20 February 1992 and by a letter dated 19 February 1993 the defendant offered to pay the said commission by monthly instalments. In the light of such averments by the plaintiff, it would be prudent upon the defendant before it decided to file its defence to verify on 34 these facts instead of filing a general defence denying liability. In the face of assertion of the plaintiff in the statement of claim that he was the agent, the defendant merely makes a general denial without particularizing who the real agent was if it was not the plaintiff. It is only in the proposed amendment that a new person comes to light. It is my finding that all the issue of forgery and the new agent comes about on account of it being confronted with the evidence of the agreement in exh ‘LNT1’ and the evidence of proposal to pay the commission by monthly instalments in exh ‘LNT3’. It is not a question of negligence to plead all those matters in the original defence but a tactical manoeuvre and done in bad faith to delay the rights of the plaintiff on his claim.” • Angel Cake House Sdn Bhd & Ors v Bandaraya Development Berhad [2001] MLJU 24 (per Tee Ah Sing J (as he then was) at page 13): “According to the affidavit of Low Kim Seng affirmed on 17 June 1999 (enclosure 57) the Defendants had on 24 March 1999 appointed their new solicitors, that is Tetuan Nadzarin, Sena & Lim to take over the conduct of the case. It was also averred that the Defendants were advised by their new solicitors that it was necessary that the statement of defence be amended as the statement of defence was not complete and did not state the facts of the case fully. I find that the aforesaid reasons are not good reasons to explain for the long delay. I find that no explanation were given as to why the Defendants has not come sooner to 35 seek leave for the proposed amendments. Further the Defendants knew the facts all along. The delay has not been accounted for by affidavit evidence.” (Bii) In respect of the second ground (in amplification of the first ground) on this issue, Counsel submitted as follows:

The Plaintiff had purported to justify the filing of Enclosure 29 by making the averment in Plaintiff’s Affidavit in Reply (at paragraphs 34-36) that the proposed amendments are in consonance with the Defence & Counterclaim but such an approach is misconceived – instead, the Proposed SOC ought to be in consonance with the Original SOC, to avoid the failure to meet the requirement that the proposed amendments would in effect turn the Suit from one character into a suit of another and inconsistent character.

Counsel argued that be that as it may, the position taken by the Plaintiff is misleading, disingenuous and demonstrates the lack of bona fide of the application in Enclosure 29.

Counsel added that the Plaintiff cannot be allowed to cherry pick and to read paragraphs 26 and 30 of the Defence & Counterclaim in isolation – it is clear that those paragraphs, along paragraphs 22-25 and 27-28, were pleaded in response to the pleadings of the fraud, misrepresentation and breach of collateral warranty in the Original SOC: i. Paragraphs 22-26 of the Defence & Counterclaim were pleaded in response to paragraphs 23-26 of the 36 Original SOC, which contained the particulars of the purported fraud and misrepresentation committed by the Defendants onto the Plaintiff to induce him to enter into the SSA. ii. Paragraphs 28-30 of the Defence & Counterclaim were pleaded in response to paragraphs 27-29 of the Original SOC, which contained the particulars of the Defendants breach of the collateral warranty and agreement with the Plaintiff, as well as averments of estoppel against the Defendants from denying that the agreement does not exist and/or the Representation have not been made. iii. The response in paragraph 26 of the Defence & Counterclaim, that the 1st and 2nd Defendants, at all material times, are willing to give effect to the SSA, was to rebut the allegation that they were fraudulent and had fraudulently misrepresented the Plaintiff to induce him to enter into the SSA. iv. Similarly, the response in paragraph 30 of the Defence & Counterclaim was to meet the allegations of breach and/or estoppel that were raised by the Plaintiff. v. It must be observed that (1) paragraphs 23-26 of the Original SOC, which contained the pleadings of fraud, fraudulent misrepresentation and breach of collateral warranty, and (2) all references to the Representation 37 (as was pleaded in the Original SOC), were all removed in the proposed SOC.

Counsel submitted that essentially, the Plaintiff is attempting to cherry pick and use part of the Defendants’ pleadings in the Defence & Counterclaim (which were pleaded to meet his pleadings in the Original SOC) to tactically justify the proposed amendments in the Proposed SOC, after he takes the inconsistent route of abandoning those original pleadings and at the expense of the Defendants who had committed to certain positions in the Defence & Counterclaim. The Plaintiff cannot be allowed to ‘approbate and reprobate’ or to ‘blow hot and cold’ in such a manner. See: Ashworth (Oliver) (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12 (per Robert Walker LJ (later Lord Walker) at page 30): “For my part I am not wholly satisfied that there is no third route which the tenant could have taken. The principle that a party to litigation cannot “approbate and reprobate” (or “blow hot and cold”) does sometimes curtail that party’s theoretical freedom to plead wholly inconsistent cases as alternatives. The principle is an importation into English law from Scotland, and although if covers much the same ground as elective waiver and waiver by estoppel, it may be rather more flexible: there is a fairly recent example in the decision of Sir Nicolas Browne-Wilkinson V.-C. in Express Newspapers Plc. v News (UK) Ltd [1990] 1 W.L.R.

No authorities are cited in the relevant passage of the judgment, at p. 1329, but the principle and its limits were 38 considered by the House of Lords in Lissenden v C.A.V. Bosch Ltd [1940] A.C. 412, especially in the speech of Viscount Maugham, at pp 417-418. It seems to me at least arguable that by demanding and suing for rent the landlord was unequivocally treating the tenant as not being a trespasser: and that the subsequent amendment of the statement of claim to plead an alternative and inconsistent case should not be allowed to operate retrospectively so as to make the tenant’s occupation unlawful.”

Counsel submitted that the cherry picking clearly further demonstrates and bolsters the argument that the application in Enclosure 29 is not bona fide but a tactical manoeuvre to stifle the Defendants’ defence and counterclaim after the Defendants had committed to certain positions in the Defence & Counterclaim as submitted above. (Biii)Learned counsel stated that a further issue to deal with is the Plaintiff’s further attempt to justify that Enclosure 29 was bona fide by reason of the fact that it was filed before the close of pleadings and that he could have amended the Original SOC without leave but was prevented by an earlier amendment made to correct his name, thus depriving him of the option of amendment without leave pursuant to Order 20 rule 3(1) of the ROC, 2012. This Counsel contended is misconceived. In this regard it was contended that:

Even if the Plaintiff is accorded the right to amend without leave and had done so in respect of the Proposed SOC, the Defendants are nevertheless entitled to challenge the said 39 amendment on the same grounds which the applicant has to satisfy under an application pursuant to Order 20 rule 5 of the ROC, 2012 (such as in Enclosure 29). The basis for such a right to challenged is contained in Order 20 rule 4 of the ROC, 2012.

Further, the Plaintiff had again, blamed his former solicitors for amending the Original SOC (to remove the word ‘Jeffrey’ from the Plaintiff’s name). Again, this is without merit and highlights the Plaintiff’s cavalier conduct in the proceedings herein.

(C) The Defendants asserted that the prejudice they suffer cannot be compensated with costs as follows:

The authorities have established that where the application to amend would have the effect of turning the suit from one character into a suit of another and inconsistent character, it would ipso facto cause prejudice to the other side which cannot be compensated with costs. In this regard, the following has been held and/or observed by the Courts:

‘[F]or any relevant prejudice to be found it must constitute prejudice resulting from the amendment, .... in the sense that the defendants, in reliance on the claim originally made, altered their positions so as to make it more difficult to defend the new claim now made.’ ‘[It] would also be relevant prejudice if the new cause of action would deprive the opposing part of any remedy against a third party.’ 40 Asia Pacific Land Bhd & Ors v Datuk Bandar Kuala Lumpur [2006] 2 MLJ 137 (per Abdul Malik Ishak J (as he then was) at pages 150-152) (supra) – where his Lordship had referred, with approval, to the passages from the Singaporean Court of Appeal decision of Lim Yong Swan v Lim Jee Tee & Anor [1993] 1 SLR 50: “[24] Again, continuing at pp 508-509, Yong Pung How CJ (Singapore) said in the same case: ..... ‘When The ‘Casper Trader’ [1991] 2 Lloyd’s Rep 237 was before the judge-in-chambers, Webster J expressed the view that consideration of whether it would be just to grant leave to amend under para (5) required a balancing of the applying party’s need to amend and the prejudice to the opposing party’s interests. ‘Prejudice in this context, in the opinion of the learned judge, meant at p 243: For the purpose of answering this question I do not think it relevant simply to consider whether the defendants will or may have difficulty in defending the claim, specifically at the trial. In my view for any relevant prejudice to be found it must constitute prejudice resulting from the amendment, either in the sense that the defendants, in reliance on the claim originally made, altered their position so as to make it more difficult to defend the new claim now made or in the sense that it will be more difficult for them to defend that claim than it would have been had the claim been brought within the period of limitation. 41 We were in agreement with the view of the learned judge and would only add that it would also be relevant prejudice if the new cause of action would deprive the opposing party of any remedy against a third party. .... [26] It is interesting to note that the proposition of the law as stated in Lim Yong Swan v Lim Jee Tee & Anor was vigorously applied by our Court of Appeal in the case of Taisho Co Sdn Bhd v Pan Global Equities Bhd & Anor [1999] 1 MLJ 359.”

The party would be ‘clearly prejudiced’ where he ‘is now compelled to meet a case radically different from the one it was first called upon to meet .... The nature of the proposed amendments and the impact it has on the issue at trial cannot be ignored.’ See: E & O Trading Sdn Bhd v Americk Singh Sidhu & Ors And Another Appeal [2018] 6 MLJ 783, CA (per Idrus Harun JCA) at pages 792-793) (supra).

(ii) It must also be observed that the 1st and 2nd Defendants, in their Counterclaim, had sought for inter alia reliefs involving (a) the transfer of shares of Ruizhi held by the Plaintiff on trust for the 1st and 2nd Defendants pursuant to the Trust Deeds and/or Shareholders’ Agreement, and/or (b) the transfer of the assets and books of Ruizhi by the Plaintiff to the 1st and 2nd Defendants:

The Original SOC sought for the rescission of the SSA, which was for the sale and purchase of the entire shareholding of Ruizhi. Even if the claim and/or reliefs in 42 the Original SOC are allowed, it would not likely impact the 1st and 2nd Defendants’ Counterclaim.

However, the Proposed SOC seeks for specific performance of the SSA; if allowed, it would likely impact the 1st and 2nd Defendants’ Counterclaim as stated above.

With reference to passage above that ‘it would also be relevant prejudice if the new cause of action would deprive the opposing party of any remedy against a third party’, it is submitted that similarly, the Proposed SOC would also be relevant prejudice where it impacts the 1st and 2nd Defendants Counterclaim.

(iii) Counsel to further demonstrate that Enclosure 29 is filed as a tactical manoeuvre and the prejudice which would be occasioned to the Defendants in the event Enclosure 29 is allowed, postulated:

If the application to amend in Enclosure 29 could have been so easily made without leave (if the earlier amendment to the name was not made, allegedly without his consent) and as a matter of right, the Plaintiff could have just withdrawn the Original Writ and the Original SOC, and file the Proposed SOC afresh.

However, this was not done and instead, Enclosure 29 was filed as it is apparent that the fresh Suit may face challenges, such as in the form of the doctrine of res 43 judicata, and the said withdrawal would not have extinguished the 1st and 2nd Defendant’s Counterclaim, which would proceed independently of the withdrawal.

(iv) Accordingly, Learned counsel submitted that Enclosure 29, if allowed, would cause prejudice to the Defendants which cannot be compensated with costs. Decision on Enc. [20] Having set out the background and the contentions of the parties, I now deal with the issues which arise. I propose, in dealing with these issues, to focus on the main points, and not necessarily to address every point and deal with every authority which was brought up, to avoid a lengthy judgment. It will also make sense so as to provide the parties with written grounds timeously. This does not mean that I have not considered or taken into account each of the parties’ points or authorities submitted to me . [21] Yamaha Motor Co Ltd v Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213 propounded that the decision whether or not to allow an amendment to a pleading under O. 20 of the ROC 2012 is eminently within the discretion of the trial judge considering the circumstances of the case, such discretion must be exercised judiciously. [22] It is also axiomatic that the function of pleadings is to define the issues between the parties, so that both the plaintiff and the defendant know what is the other side's case and is able to focus upon the real nature of the dispute. 44 [23] His Lordship, Mohamed Azmi, FJ (delivering the judgment of the Federal Court) in the Yamaha case sets out the principles whether an application for amendment of pleading should be allowed or not. At pages 214 to 215, His Lordship said: "Under Order 20 of the rules of the High Court 1980, which is equivalent to Order 28 Rules of Supreme Court, a Judge has a discretion to allow leave to amend pleading. Like any other discretion, it must of course be exercised judicially (see Kam Hoy Trading v Kam Fatt Tin Mine (1963) MLJ 248). The general principle is that the court will allow such amendments as will cause no injustice to the other parties. Three basic questions should be considered to determine whether injustice would or would not result, (1) whether the application is bone fide: (2) whether the prejudice caused to the other side can be compensated by costs and (3) whether the amendments would not in effect turn the suit from one character into a suit of another and inconsistent character. (See Mallal's Supreme Court Practice page 342). If the answers are in the affirmative, an application for amendment should be allowed at any stage of the proceedings particularly before trial, even if the effect of the amendment would be to add or substitute a new cause of action, provided the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the original statement of claim." [24] Lord Brandon in Ketteman & Ors v Hansel Properties Ltd & Ors [1987] AC 189 at p 212 said: “With regard to the principles on which his discretion to allow or refuse the applications to amend should be exercised, the judge referred to the notes to RSC O 20 r 5, in the Supreme Court Practice 1982 and to the authorities there cited. The effect of these authorities can, I think, be summarized in the following four propositions. First, all such amendments should be made as are necessary to enable the real questions in controversy between the parties to be decided. 45 Secondly, amendments should not be refused solely because they have been made necessary by the honest fault or mistake of the party applying for leave to make them: it is not the function of the court to punish parties for mistakes which they have made in the conduct of their cases by deciding otherwise than in accordance with their rights. Thirdly, however blameworthy (short of bad faith) may have been a party's failure to plead the subject matter of a proposed amendment earlier, and however late the application for leave to make such amendment may have been, the application should, in general, be allowed, provided that allowing it will not prejudice the other party. Fourthly, there is no injustice to the other party if he can be compensated by appropriate orders as to costs.” [25] In Taisho Co. Sdn. Bhd. v Pan Global Equities Bhd. & Anor [1999] 1 MLJ 359, His Lordship Haidar JCA (delivering the judgment of the Court of Appeal) said at pages 363 to 364 as follows: "GP Selvam JC, in Multi-Pak Singapore Pte Ltd (In receivership) v Intraco Ltd & Ors [1992] 2 SLR 793, in considering the true construction of O 20 r 5(2) and (5) stated at p 802, 'a plaintiff seeking an order under it must satisfy two requirements: (a) that the facts of the case remain the same or substantially the same; and (b) that the justice of the case is with him. If he fails in one, he fails altogether. As the power conferred on the court is discretionary, the court considering the application should adopt a broad common sense approach. The learned JC went on further to state at p 803: “Even if the plaintiffs had complied with the first requirement, they had not shown that it would be just to grant them the application. A party asking the court to exercise a discretionary power in his favour must place some material and advance some cogent reasons to impel the court to lean on his side: see Ratnam v Cumarasamy [1965] 1 WLR 8 46 The judgment of the learned JC was affirmed by the Court of Appeal (see Multi-Pak Singapore Pte Ltd (In receivership) v Intraco Ltd [1993] 2 SLR 113).” [26] For a better appreciation of the nature and extent of the proposed amendments, the Plaintiff’s proposed re-amended SOC is compared with the amended SOC. Amended SOC Proposed Re-amended SOC

What is pleaded

Fraud

Breach of contract (the SSA)

Fraudulent misrepresentation

Abandoned Breach of the collateral warranty (which comprised of the (mis representations) and the contract (the SSA)

Abandoned

Relief sought Rescission of the SSA.

1.Specific performance of the SSA

2.Consequential damages amounting to RM27,760,000 Consequential reliefs pursuant to the relief for specific performance.

Damages amounting RM860,058 (as costs of machineries invested by the Plaintiff of Ruizhi). Alternative relief for the return of RM1,292,600 and damages to be assessed.

Return of the RM1,292,600.

Facts pleaded in support of claim The 1st and 2nd Defendants made the Representation to induce the Plaintiff into entering the SSA (para 14). 1) The Plaintiff maintained part of the original para 14 (in respect of the items in the Representation) but removed the assertion that the 1st and 2nd Defendants made the Representation to induce the Plaintiff into entering the SSA. 47

The Representation amounted to a collateral warranty (para 15). 2) The Plaintiff removed the assertion that the Representation amounted to a collateral warranty (in the original para 15).

Induced by the Representation, the Plaintiff paid RM1,292,600 to the Defendants and invested RM860,058 into Ruizhi (para 17,18). 3) The Plaintiff removed the assertion that the Plaintiff was induced by the Representation to make the payment and investment in original para 17 and 18. The Plaintiff introduced a company by the name of Alpha Plastics Resources Sdn Bhd (wherein the Plaintiff is the sole director and one of the shareholders), who supplied goods to the 3rd Defendant and were owed sums by the 3rd Defendant. These sums were used to set off part of the purchase price for the SSA (proposed para 17A & 17B).

The 1st and 2nd Defendants made the Representation to the Plaintiff that he would be obtaining complete control of the shares of Ruizhi upon compliance of the Plaintiff of the payment consideration to the 1st and 2nd Defendants (para 23). 4) The original para 23 to 26 were completely removed by the Plaintiff. The Plaintiff pleaded, for the first time, that he was ‘ready, willing and able to satisfy the balance purchase price and to conclude the purchase of shares in Ruizhi (proposed para 20A).

Induced by the Representation, the Plaintiff offered both assets and monetary consideration in favour of the 3rd Defendant and contributed assets to Ruizhi. Plaintiff resigned as director of the 3rd Defendant and had relinquished his shares to the 1st and 2nd Defendants (para 24). Removed 48

The Representation was false (para 25). Removed The Plaintiff added particulars to the breach of contract (the SSA) (proposed para 25A). The Plaintiff assert that he is entitled to specific performance of the contract. (proposed para 25B)

The Defendants made the Representation fraudulently because they knew it was false and not bothered whether it was true of false (para 26.)

In view of the agreement and Representation which amounted to a collateral warranty, the Defendants are in breach of the agreement with the Plaintiff (para 27).

The Defendants failed to furnish the share sale agreement or documents pertaining to the removal of the Trust Deed, goes to the root of the contract and/or constituted o fundamental breach of agreement (para 28). Renumbered as para 24

The Defendants are estopped from denying any assertion that an agreement does not exist and/or that the Representation has not been made, and are precluded from making the decision to deny the share transfer in favour of the Plaintiff (para 29). Renumbered as para 25 with Representations removed

Damages are particularised and amounted to RM27,76,000 (para 30). The Plaintiff completely removed the particulars of damage amounting to 49 RM27,760,000 and replaced the particulars with (a) loss of enjoyment of the shares in Ruizhi, (b) loss of control of the board of directors in Ruizhi, (c) loss of legitimate expectiation to obtain 100% of the shares in Ruizhi (d) loss of RM1,292,600 and (e) loss of monies expended for development of business of Ruizhi (proposed para 26). The Plaintiff added assertions of events after Suit was filed (proposed para 26A) [27] I agree with and accept the submissions of the Defendants for reasons below. Amendments turns the character of the suit into a different and inconsistent type [28] At the new Para 20A of the proposed re-amendment, it is pleaded that the Plaintiff is ready, willing and able to satisfy the balance purchase price and to conclude the purchase of shares in Ruizhi. To my mind, this is unrelated to the first requirement, that is that the facts of the case remain the same or substantially the same unlike Yamaha Motor Co. Ltd v Yahama Malaysia Sdn. Bhd. & ors (supra) where the allegation of fraud, even assuming it is a new cause of action, arises from the same facts as the original action. This amendment no doubt was made by the Plaintiff as a crucial requirement to succeed on the intended new claim for specific performance. It is not merely a correction to make explicit what is implicit: see Lim Yong Swan v Lim Jee Tee & Anor [1993] 1 SLR 50 as applied by our courts. 50 [29] At the outset, it is to be observed that specific performance and rescission are inconsistent rights, as different as cheese is from chalk. [30] The substance and character of the Plaintiff’s existing claim is founded on rescission for fraud and misrepresentation, which was also made manifest in his claim for the return of his monies paid and damages. This, the Defendants accepted. In my respectful view, by seeking the earlier remedy of rescission, he had committed himself to an irrevocable election. [31] Plainly put, if you chose rescission, you can not claim for specific performance. [32] In my opinion, the Plaintiff being entitled to one of two inconsistent rights, with full knowledge, has chosen rescission, he cannot afterwards pursue the other (specific performance), which after the first choice, is by reason of the inconsistency, no longer his to choose. The authorities cited by the Defendants make this clear. Also the statement of Lord Blackburn in Scarf v Jardine (1882) 7 App Cas 345 at page 360 applies: “… where a man has an option to choose one or other of two inconsistent things, when once he has made his election it cannot be retracted”. [33] The remedy of rescission has the effect of restoring the parties to the same position as though the contract was never made. In other words, there is restitutio in integrum as made plain by s. 40, s. 56(1), s. 65 and s. 66 of the Contracts Act 1950 when read together. For convenience, these sections are produced: 51

“Effect of refusal of party to perform promise wholly When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance. Effect of failure to perform at fixed time, in contract in which time is essential

(1) When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

Consequences of rescission of voidable contract When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he has received any benefit thereunder from another party to such contract, restore the benefit, so far as may be, to the person from whom it was received. Obligation of person who has received advantage under void agreement, or contract that becomes void

When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.” [34] It is imperative to note that the Plaintiff in para 20 of his Reply to Defence & Defence to Counterclaim dated 11.9.2020 also maintained that ‘he had suffered loss and damage as a result of the fundamental breaches 52 by the Defendants and seeks compensation as claimed in paragraphs 30 and 31’. [35] In my view, the Plaintiff having accepted repudiation of the SSA and claimed rescission, such acceptance in effect, constituted an unequivocal act of election which puts an end to the contract - see Scarf v Jardine (supra)at page 360. When the SSA is repudiated, the Plaintiff then had an indisputable right to sue the 1st and 2nd Defendants for specific performance but he did not. The Plaintiff had an equally indisputable right to sue for rescission; he could sue for either remedy, but not both. [36] When the Plaintiff filed his SOC and amended SOC, he had full knowledge of the facts and of his rights, having prior the suit, made a police report in June 2020 where in his Counsel submitted that the Plaintiff had allegedly intended to sue for his shares but the stark reality here is, he had elected to seek the right of rescission and had manifested this election to the 1st and 2nd Defendants clearly through his SOC and his Reply to Defence and Defence to Counterclaim. [37] On the footing of the Plaintiff’s claim for rescission, the 1st and 2nd Defendants have acted pursuant to the amended SOC in a manner irreparably prejudicial to themselves after taking a position: (i) on the Defence and Counterclaim, (ii) in the affidavits to defend the injunction in Enc. 12 and, (iii) in the striking out application in Enc. 14, thus making it unjust in my view for the Plaintiff to ‘resile’ from the position taken in issuing the writ or making the claim. Having asked for return of his monies paid and damages, in my respectful view, he was bound by his election, and after approbating his right to bring a claim for rescission to treat the SSA as at an end and both parties being discharged from 53 further performance of the contract, he could not now inconsistent with the election, when it suited his convenience, retract it, reprobate, and take an opposite direction of the earlier position taken. [38] Although the monies are not returned yet, in my view, he cannot revive the SSA and seek specific performance. The Plaintiff cannot be allowed to change the whole nature of his claim from rescission and turn it into an action for specific performance. [39] Besides the authorities submitted by the Defendants, the Privy Council decision in the case of Ardeshir H. Mama v Flora Sassoon (1928) AIR 208 also fortifies my view. The principles that can be distilled from that case, can, inter alia, be stated as follows (see page 209 of the report): "A suit for specific performance or damages in the alternative can be amended so as to convert it into one for damages only. That the court should have the power of granting such an amendment in a proper case is salutary and indeed necessary. But it is one to be most carefully and jealously exercised in all the circumstances of each individual case and with due regard to its effect upon the position of both the plaintiff and the defendant. If the defendant is to be prevented by the possible exercise of the power from starving a plaintiff out of his right, the plaintiff must not by its ill-considered exercise be permitted to turn his suit into a gamble for himself at the defendant's expense. It would appear to be a wise precaution for a Judge before allowing any such amendment in a contested case to require the plaint to be actually remodelled in a form appropriate in action seeking compensation for breach of contract and nothing else." [40] Ardeshir H. Mama v Flora Sassoon (supra), a case commenced in the High Court of Judicature at Bombay, was at its inception a simple action by a purchaser for the specific performance of a contract for the 54 sale of certain valuable hereditaments on Malabar Hill in Bombay with claims for damages additional or alternative and all in terms of section 19 of the Specific Relief Act, 1877. The defences to the suit were that there never had been any concluded contract for the sale of the property and if there had been such a contract it had been entered into on behalf of the defendant by an agent with no authority to bind her to its terms. Some nine months before the trial, the plaintiff's solicitors formally notified the defendant to the effect that the plaintiff had decided to abandon his claim for specific performance and that he would instead at the trial claim damages against the defendant for her breach of contract. Lord Blanesburgh speaking for the Privy Council had this to say at page 216 of the report: "All this is, historically, the explanation of the fact, that in relation to a contract to which the equitable form of relief was applicable, a party thereto had two remedies open to him in the event of the other party refusing or omitting to perform his part of the bargain. He might either institute a suit in equity for specific performance, or he might bring an action at law for the breach. But - and this the basic fact to be remembered throughout the present discussion - his attitude towards the contract and towards the defendant differed fundamentally according to his choice. Where the injured party sued at law for a breach, going, as in the present case, to the root of the contract, he thereby elected to treat the contract as at an end and himself as discharged from its obligations. No further performance by him was either contemplated or had to be tendered. In a suit for specific performance on the other hand, he treated and was required by the Court to treat the contract as still subsisting. He had in that suit to allege, and if the fact was traversed, he was required to prove a continuous readiness and willingness, from the date of the contract to the time of the hearing, to 55 perform the contract on his part. Failure to make good that averment brought with it the inevitable dismissal of his suit. Thus it was that the commencement of an action for damages being, on the principle of such cases as Clough v L. & N.W.R. [1872] 7 Ex. 26=41; L.J.Ex.17=25; L.T. 708=20; W.R. 189 and Law v Law [1905] 1Ch.140=74; L.J. Ch.169=53; W.R.227=92; L.T. 1=21; T.L.R.102, a definite election to treat the contract as at an end, no suit for specific performance, whatever happened to the action, could thereafter be maintained by the aggrieved plaintiff. He had by his election precluded himself even from making the averment just referred to, proof of which was essential to the success of his suit." (emphasis added) [41] The case of Goh Hooi Yin v Lim Teong Ghee & Ors [1990] 3 MLJ 23 also commends itself to me. Edgar Joseph Jr J (as his Lordship then was) held at pg 30: “… a person who has open to him two alternative courses or remedies must elect between them and exercise such election in such a way that the other party may know which attitude he is adopting. Once he has exercised his option either way, he is bound by it (Haynes v Hirst (1927) 27 SR (NSW) 480).” [42] This court is acutely aware that it has the power of granting an amendment in a proper case but this discretion is one to be most carefully and jealously exercised in all the circumstances of each individual case and with due regard to its effect upon the position of both the plaintiff and the defendants. The proposed amendments sought in this case are not about clarifying the issues in disputes and cannot be at the Defendants’ expense. [43] I therefore am inclined to agree with the learned Counsel for the Defendants that the proposed amendments to fit into a claim for specific performance turns the character of this suit into a different and 56 inconsistent type within the Yamaha principle. I have to consider the resulting prejudice to the Defendants who are now confronted with a new case to answer if the amendments are allowed, apart from the surprise element, less than fair and inequitable. Just as in the E & O Trading case, the remedy pursued here ‘stand on a different footing’. In the particular circumstances of this case, I agree with the Defendants’ Counsel that costs will not adequately compensate the Defendants as they have already taken a position in their Defence and Counterclaim and in opposing the injunction application as well as having filed a striking out application for the 3rd Defendant. In my respectful view, the wind in the sail of the Counterclaim may well be taken by the Plaintiff. As such in balancing the overall justice of the case, the proposed amendments are disallowed. [44] To elaborate on whether the prejudice in this case can be compensated by costs, this court has also taken guidance from the observation of Lord Griffiths in Ketteman & Ors v Hansel Properties Ltd & Ors (supra) at p 220 of the report: “Whether an amendment should be granted is a matter for the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so. But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes and the legitimate expectation that the trial will determine the issues one way or the other.” 57 Amendment application was not bona fide and a tactical manoeuvre [45] In respect of this issue, I am satisfied and accept learned Counsel for the Defendants’ submissions that the claim for specific performance of the SSA, ‘if genuine and bona fide, should have taken centre stage and would have been pleaded from the outset’ and the reason advanced that his former solicitors did not appreciate the approach is not good enough as:

the Plaintiff had maintained his action for ‘fraudulent misrepresentation and breach of contract’ and the right to rescission and compensation through:

his Reply to Defence & Defence to CC; and

assertions in Enclosure 12 and affidavit affirmed on 02.09.2020 in support of Enclosure 12 which plainly supersedes the police report lodged on 12.06.2020.

(ii) the application to amend was made only after the filing of:

the Defence & Counterclaim where the Defendants had committed to certain positions;

the Reply to Defence to Counterclaim;

the Plaintiff’s Enclosure 12 (for interim injunctive reliefs) against the Defendants, and the Defendants have filed affidavits in reply to oppose the same; and 58

the 3rd Defendant’s Enclosure 14 to strike out the Plaintiff’s claim against it pursuant to Order 18 rule 19(1)(a) of the [46] I further agree with the Defendants’ counsel’s assertion that the amendment application in the nature in which the amendments were sought, filed only after the respective pleadings of the parties had been delivered, or after Enclosures 12 and 14, as well as the exchange of affidavits between the parties in respect of Enclosure 12 must necessarily draw the inference that the application was a tactical manoeuvre and was done in bad faith to stifle the Defendants rights on their Defence and Counterclaim and prejudice the hearing of Enc. 14. [47] I accept the Defendants’ submission that the Plaintiff’s reasons advanced in paragraphs 34 - 36 of its affidavit in support stating that the proposed amendments are in consonance with the Defence & Counterclaim is misconceived, misleading, disingenuous and demonstrates a lack of bona fides and to tactically justify the proposed amendments in the Proposed SOC by cherry picking to read paragraphs 26 and 30 of the Defence & Counterclaim in isolation when it is clear that those paragraphs, along with paragraphs 22-25 and 27-28, were pleaded in response to the Plaintiff’s assertions of fraud, misrepresentation and breach of collateral warranty in the Original SOC. [48] In the case of Lim Nyang Tak Michael v ACE Technologies Sdn Bhd [1995] 4 MLJ 616, Abdul Kadir Suleiman J (later FCJ) held that: "lt was not a question of negligence to plead all those matters in the original defence but a tactical manoeuvre and done in bad faith to delay the rights of the 59 plaintiff on his claim. The application to amend the defence after exposure by the plaintiff in his affidavit in support was a tactic to confuse the issues by creating imaginary 'triable issues' and to stall the plaintiff of his rights. If this was allowed, it would unnecessarily cause prejudice to the plaintiff which could not be compensated by costs." [49] At risk of repetition, the facts giving rise to specific performance were known before the Writ and SOC were filed. The Plaintiff even lodged a police report in June 2020. In the case of Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor [1988] 3 MLJ 348, Mohamed Dzaiddin J (later Chief Justice of Malaysia) said: "The rule governing the amendment of pleadings is that the court will allow such amendments as will cause no injustice to the other parties. However, there are two circumstances in which an amendment to add an allegation of fraud would not be permitted: (a) where the facts giving rise to the plea of fraud were known at the time of the original pleading and (b) where the delay in pleading fraud was in connection with some tactical manoeuvre."(emphasis added) Mistake of lawyer [50] Learned Counsel for the Plaintiff has urged upon this Court that the Plaintiff should not be punished for the bungling of his former solicitors. [51] This court is not unaware of the principle of not visiting the sins of the Counsel on his client as established in the following high authorities:

Masjaya Trading Sdn Bhd v. Kedah Cement Sdn Bhd [2004] 4 CLJ18 at pg 26,27 where the Court of Appeal said: 60 “In the third place, this Court will not, as far as possible, permit a litigant to suffer because of the ineptitude of his advocate. In a case as the present, it is apposite that we call to mind what Ong CJ said in Wong Lai Fatt v. Public Prosecutor [1973] 2 MLJ 31 (FC): The paramount function and duty of the courts is to see that justice is done in all cases. As stated by Lord Denning MR in Doyle v. Olby Ltd [1969] 2 QB 159, 166: We never allow a client to suffer for the mistake of his counsel if we can possibly help it. We will always seek to rectify it as far as we can. We will correct it whenever we are able to do so without injustice to the other side.”

The same court said in Tenaga Nasional Bhd. v. Prorak Sdn. Bhd. [2000] 1 MLJ 479 at 483: “This case demonstrates the terrible harm that may be visited upon the litigant’s head because of his solicitor’s mistake. We hasten to add that the solicitor concerned is no longer on record in the proceedings before us. Whenever possible, where there is no risk of sacrifice of principle in the name of justice or at the altar of convenience, we do our best to ensure that a lay client does not suffer because of the mistake of his legal advisers. We do so in the interests of justice. When we act, we always bear in mind what Lord Denning said in Doyle v Olby (Ironmongers) Ltd [1969] 2 All ER 119 at p 121: We never allow a client to suffer for the mistake of his counsel if we can possibly help it. We will always seek to rectify it as far as we can. We will correct it whenever we are able to do so without injustice 61 to the other side. Sometimes the error has seriously affected the course of the evidence, in which case we can at best order a new trial.”

In Government of the State of Sabah v. Syarikat Raspand (suing as a firm) [2010] 5 MLJ 717 at 733, the Court held that: “[32] In Masjaya Trading Sdn Bhd v Kedah Cement Sdn Bhd [2004] 4 CLJ 18 (CA), two alternative grounds (viz termination of contract upon reasonable notice; and the application of the doctrine of estoppel) were not properly presented or sufficiently argued for the plaintiff. The High Court found for the defendant. The plaintiff's memorandum of appeal also did not take these points. However, the Court of Appeal allowed these grounds to be argued at the appellate stage. Gopal Sri Ram JCA (later FCJ) explained at pp 26f–27d as follows: ……..…

This court will not, as far as possible, permit a litigant to suffer because of the ineptitude of his advocate, and it is apposite to call to mind what Ong CJ said in Wong Lai Fatt v Public Prosecutor [1973] 2 MLJ 31 : ‘The paramount function and duty of the courts is to see that justice is done in all cases. As stated by Lord Denning MR in Doyle v Olby Ltd [1969] 2 QB 159 at p 166: We never allow a client to suffer for the mistake of his counsel if we can possibly help it. We will always seek to rectify it as far as we can. We will correct it whenever we are able to do so without injustice to the other side. 62 Those words were said in a civil case where counsel had made an erroneous submission on the proper measure of damages. d) This was a case in which the proved and admitted facts all favour the plaintiff as a matter of law if they are slotted in the appropriate legal pigeon-hole, but that did not happen through error of counsel. That is no reason for judges of the appellate court to sit in silence, with arms folded in abject submission and permit an obvious miscarriage of justice to live on. Based on the authorities cited, this is an appropriate case by reason of its peculiar facts to intervene.” [52] In this case, I must hasten to state that leave to amend was not refused because of the Plaintiff’s or his lawyer’s mistake however blameworthy in failing to plead the proposed amendment. This Court had instead, balanced the Plaintiff’s need to amend and the resulting prejudice to the Defendants and concluded that it would be unjust to grant leave to amend on the particular facts of this case. I am of the respectful view that justice cannot be done by just compensating the Defendants with costs thrown away. It will be convenient to do that but Lord Atkin in General Council of Medical Education And Registration Of The United Kingdom v. Spackman [1943] 2 All ER 337, aptly commented at p. 341 that: “Convenience and justice are often not on speaking terms.” [53] In this connection, I agree with and subscribe to the speech of Lord Griffiths in Ketteman v Hansel Properties Ltd [1988] 1 All ER 38 where at p 62, he said: “Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted 63 efficiently. We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age. There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall on their own heads rather than by allowing an amendment at a very late stage of the proceedings.” Useless and ineffective amendments not allowed [54] There is yet another reason in my view not to allow the amendments. In my respectful view, the proposed amendments will be useless and ineffective to the Plaintiff and the matter “ought to be nipped in the bud” as the law is trite that once having elected, the Plaintiff is bound by his election of rescission. I have borne in mind that at this juncture, it is not the duty of the Court to decide on the substantial merits of the Plaintiff’s proposed amendments which ought to be decided at the conclusion of a trial, but the doctrine of election and its attendant consequences is simply too big an elephant in the room to ignore. [55] In this context, this Court is guided by the case of Eshah Binti Sa at v Meriam Binti Sa at & Ors (1975) 2 MLJ 97 where the Court held as follows: “It has been held that in dealing with the application for amendment, the court has to consider the materiality and effectiveness of the amendment and that it was a well established practice not to allow an amendment where it appeared such an amendment would be useless. The Court should look at the probable consequences of the amendment and if the amendment would be ineffectual then it ought not to be allowed to be made. One such amendment was sought to be made in Ponnusamy v Nathu Ram (1959) MLJ 228 and was refused.” 64 [56] In the case of Ponnusamy & Anor v Nathu Ram [1959] MLJ 228, Good J enunciated at p 229: “… But there is an abundance of authority for the proposition that in dealing with an application to amend the pleadings the court should consider the materiality and effectiveness of the amendment, and it is a well establish practice not to allow an amendment where it appears that such an amendment would be useless. The court should look at the probable consequences of the amendment, and if the amendment will be ineffectual then it ought not be allowed to be made.” He continued a little later: “If a party is precluded from setting up a certain plea by reason of the fact that he is not permitted by the law of evidence to give evidence in support of it, he should not be permitted to include that plea in his pleadings.” [57] The Court of Appeal in HSB Bank Malaysia Bhd v Macquarie Technologies (M) Sdn Bhd [2004] 4 MLJ 398 and other cases have cited and approved the above statement of law expressed in Ponnusamy & Anor v Nathu Ram (supra). [58] Having regard to the factual matrix and the legal principles that are attendant upon an application of this nature, and for all the above reasons, I am inclined to the view and I hold that the balance of justice lies in refusing the application for amendment. Accordingly, I dismissed the amendment application in Enc. 29 with costs of RM6,000-00 subject to allocator and direct that Enc. 26 proceed to hearing. 65 Enc. 26 [59] The amendments sought by the Plaintiff in Enc. 26 pertains to Enc. 12 and were made essentially to reflect the amendments to the Plaintiff’s pleadings sought in Enc. 29. [60] As stated at para 16 above, it was agreed by the parties that enc. will be heard first, and the fate of Enc. 26 will follow Enc. 29, so the fate of enc. 26 was sealed with the dismissal of Enc. 29. [61] Enc. 26 was as such, dismissed with no order as to costs. Enc. 12 [62] As mentioned earlier, Enc. 12 is the Plaintiff’s application for an injunction to restrain the Defendants, their agents and/or servants from disposing of any shares and/or all assets from Ruizhi and from the 3rd Defendant Company pending the disposal of the present Suit. [63] In the case of Lian Keow Sdn Bhd v Overseas Credit Finance Bhd [1982] 2 MLJ, the Federal Court explained that an ‘interlocutory injunction is a temporary and discretionary remedy. The court is not concerned with the chances of success or failure of the appellants in proving their suit at trial. The court is concerned with what it has to do to protect the right of the parties so that no irreparable injury would caused to either of them’. [64] It is trite that the general purpose of an interlocutory injunction is to maintain/preserve the status quo by preserving a fair balance between the 66 parties and to give them protection while awaiting the finality of trial or any proceedings. [65] A right to obtain an interlocutory injunction is not a cause of action…the right to obtain an interlocutory injunction is merely ancillary to the pre-existing cause of action - see: 1. Dial Singh a/p Tara Singh v Mann Foong Realty Sdn Bhd [2000] 3 MLJ 153 at 160 CA and 2. The Siskina (Owners of Cargo Lately Laden On Board) And Others v Distos Compania Naviera S.A. [1979] AC 210 where Lord Diplock at page 256 said: "A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action. It is granted to preserve the status quo pending the ascertainment by the court of the rights of the parties and the grant to the plaintiff of the relief to which his cause of action entitles him, which may or may not include a final injunction." [66] In deciding whether an interlocutory injunction is to be granted, the guidelines set out in American Cyanamid Co v Ethicon Ltd [1975] A.C. 396 and by Gopal Sri Ram JCA in the case of Keet Gerald Francis Noel John v Mohd Noor @ Harun Abdullah & 2 Ors [1995] 1 MLJ 193 [1995] 1 CLJ 29, [1995] 1 AMR 373 are to be followed: a) There must be a serious question to be tried; 67 b) Applicant must show that damages would not be an adequate final remedy; and c) The interim relief is justified on the balance of convenience. [67] In my respectful view, the only serious issue, if at all, to be tried is whether the Plaintiff as the alleged innocent party is entitled to rescind the SSA and if so, have the parties restored to a position where they will stand as if the SSA had never been made. In a rescission, applying s. 65 of the Contracts Act, the Plaintiff as the party rescinding a voidable contract (in this case the SSA) shall, if he has received any benefit thereunder from another party to such contract, restore the benefit, so far as may be, to the person from whom it was received whilst under s. 66 of the Contracts Act 1950, the 1st and 2nd Defendants as persons who have received any advantage under the SSA is bound to restore it, or to make compensation for it, to the Plaintiff. [68] In the present case, of crucial importance to note is that: i. the Plaintiff, at all material times, was holding the shares in Ruizhi as a Trustee for the 1st and 2nd Defendants pursuant to the Shareholders’ Agreement and Trust Deeds all dated 11.12.2018; (see Exhibit L-2 Enclosure 17); ii. the Plaintiff’s amended SOC redated 4.9.2020 claims for the relief of rescission, refund of monies paid, special and other damages. 68 These facts weigh heavily and are most important and relevant for present purposes to consider. [69] It is apposite to state that in Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597, the Federal Court speaking through Gopal Sri Ram, FCJ at para 36 of the Judgment decided that “what a plaintiff cannot do is to have both rescission and damages. For, that results in the plaintiff being unjustly enriched.” [70] This court having considered the parties arguments and the pleadings and affidavits is of the opinion that the balance of justice and convenience is not in favour of granting the interlocutory injunction sought in Enc.12. In my respectful view, the basis and justification for granting the interlocutory injunction against the 1st and 2nd Defendants from disposing of any shares and/or all assets from Ruizhi and from the 3rd Defendant Company is not established at all on the law, the evidence and the facts. In bearing at the forefront of my mind that an interlocutory injunction is merely ancillary to the pre-existing cause of action, here, the Plaintiff essentially seeks rescission of the SSA, a refund of monies paid and various other damages (which he is not entitled in law to claim), ergo, he has no business to seek to injunct disposal of any shares and/or all assets from Ruizhi. [71] I am not swayed by the Supreme Court case of Alor Janggus Soon Seng Trading Sdn Bhd & Ors v Sey Hoe Sdn Bhd & Ors [1995] 1 MLJ 241 cited by the Plaintiff as the elucidations there in considering whether damages is an adequate remedy is not applicable here for in that case, the Supreme Court in restoring the injunctive orders found on the 69 facts of that case, that “The majority of these damages clearly do not admit of easy quantification and it would not be right for us to venture into the realm of speculation as to what the exact quantum would be at this stage of the proceedings. Besides, the value of the shares fluctuate from time to time. “ [72] In the circumstances and the factual matrix as obtained here, I am of the considered view that the risk of doing an injustice is greater if the injunction is granted. It is my judgment that, to avail the Plaintiff the interlocutory injunction sought will be wholly wrong. The status quo is, the Plaintiff held the shares in Ruizhi and in the 3rd Defendant as a mere trustee for the 1st and 2nd Defendants. [73] Even if I am wrong in that regard, in weighing the harm that may be occasioned by the grant of such an injunction, I have taken into account that disposal of assets includes money in the bank accounts of Ruizhi. [74] With due respect, the Plaintiff cannot bring court proceedings to stop or challenge any disposal of assets of a company as Courts will not interfere with the internal management of a company and it is for the shareholders to decide unless the decision is lacking in good faith or for a collateral purpose - Extreme System Sdn Bhd v Ho Hup Construction Company Bhd & Ors [2010] MLJU 487. [75] In Burland v Earle [1902] AC 83 at p 93, Lord Davey, when delivering the advice of the Privy Council expressed the proposition in the following words: 70 “It is an elementary principle of the law relating to joint stock companies that the court will not interfere with the internal management of companies acting within their powers, and in fact has no jurisdiction to do so.” [76] So too the complaints of removal of director and change of bank signatory, these are internal management matters which did not even arise when Enc. 12 was filed. [77] To conclude on this inter partes injunction application, in the round, I am of the respectful view that if the Plaintiff succeeds at the trial based on his existing statement of claim, at the highest, an award of damages would be adequate compensation. As such, I have no difficulty in refusing the interlocutory injunction. See: a) Parkway Properties Pte Ltd v Page One-The Book Shor Pte Ltd [1986] 1 MLJ 291 b) Puncak Niaga Holdings Bhd v NS Water Sdn Bhd [2004] 5 MLJ 430 [78] Accordingly, I dismissed Enc. 12 with costs of RM5,000-00 subject to allocator. Enc. 14 [79] To recapitulate, Enc. 14 is the 3rd Defendant’s application to strike out the Writ and SOC both redated 14.9.20 pursuant to O.18 Rule 19(1) (a) 71 [80] Order 18 rule 19(2) 2012 Rules provides that in considering a striking out application under Order 18 rule 19(1)(a), the court cannot consider affidavit evidence. The test to be applied is whether on the face of the statement of claim, the court is prepared to conclude that the cause of action is obviously unsustainable - see: the Federal Court‘s decision in New Straits Times (Malaysia) Bhd v Kumpulan Kertas Niaga Sdn Bhd & Anor [1985] 1 MLJ 226. [81] In deciding the application, this court further assumes that what is stated in the SOC is true – Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd & other appeals [1996] 1 MLJ 661, at 679. [82] A reasonable cause of action means simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person: per Diplock LJ in Letang v Cooper [1965] 1 QB 222 at 242. This definition was followed in Lim Kean v Choo Koon [1970] 1 MLJ 158; Nasri v Mesah [1971] 1 MLJ 32; Saw Gaik Beow v Cheong Yew Weng & Ors [1989] 3 MLJ 301; Newacres Sdn. Bhd v Sri Alam Sdn Bhd [1991] 3 MLJ 474; Credit Corp (M) Bhd v Fong Tak Sin [1991] 1 MLJ 409 and Indah Desa Saujana Corp Sdn Bhd & Ors v James Foong Cheng Yuen, Judge, High Court Malaya & Anor [2008] 2 MLJ 11. [83] It is common ground in this case that monies paid by the Plaintiff for the purchase of Ruizhi shares were made to the 3rd Defendant. The Plaintiff is also claiming a refund of these monies. As such, it is my judgment that the 3rd Defendant is a necessary party notwithstanding that the 3rd Defendant was not involved nor a contracting party in the Share Sale transaction between the Plaintiff and the 1st and 2nd Defendants. 72 [84] Consequently, I find that the 3rd Defendant’s application predicated on Order 18 rule 19(1)(a) 2012 Rules cannot succeed. The SOC is not so hopeless, baseless or without any foundation in law. [85] I have borne in mind as held by the Supreme Court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, at 44, the mere fact that a pleaded case is weak and is not likely to succeed, is not a ground to strike out the case. [86] The Federal Court in the case of CC Ng & Brothers Sdn Bhd v Government of State of Pahang [1985] 1 CLJ 235; [1985] CLJ (Rep) 45; [1985] 1 MLJ 347 per Seah FJ exhorted: "The inherent power to dismiss an action summarily without permitting the plaintiff to proceed to trial is a drastic power. It should be exercised with the utmost caution [per Lord Diplock in Tractors Malaysia Bhd v Tio Chee Hing [1975] 2 MLJ 1.It is a jurisdiction which ought to be very sparingly exercised and only in very exceptional cases. I do not think its exercise would be justified merely because the story told in the pleadings was highly improbable, and one which it was difficult to believe could be proved." [87] For the reasons given above, I exercised my discretion to dismiss Enc. 14 with costs of RM2,000 subject to allocator. Dated 8th day of December 2020 - Sgd - Liza Chan Sow Keng Judicial Commissioner High Court of Malaya at Kuala Lumpur 73 Counsel: For the Plaintiff : Gavin Jayapal (Messrs. Gavin Jayapal) For the Defendants : Tan Jee Tjun with Lew Cha Yee and Joanne Hee Pik Yee (Messrs. Lee Lam & Tan) Cases referred to: Yamaha Motor Co Ltd v Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213 Hong Leong Finance Bhd v Low Thiam Hoe and another appeal [2016] 1 MLJ 301 ESP Synergy Sdn Bhd v KB Enviro Sdn Bhd [2018] 8 MLJ 516, Bumiputra-Commerce Bank Bhd & Ors v Bumi Warna Indah Sdn Bhd [2004] 4 CLJ 825 Limatic Holdings v PKNS [2019] MLJU 980 Lee Ah Lan v Lee Kim Lan Constructions [2003] 1 MLJ 409 Kewangan Bersatu v Yap Ah Yit [1998] 7 MLJ 442 Palaniappan v Universiti Pertanian Malaysia [1995] 1 MLJ 353 Tenaga National Berhad v Kamarstone [2014] 2 MLJ 749 Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 at 405 Hee Awa v Syed Muhammad Sazalay [1988] 1 MLJ 300 74 Kuala Lumpur Finance v Azmi & Co [1996] 4 MLJ 650 Chan Yee v Chan Yoke Fong [1990] 3 MLJ 297 (SC) Lembaga Pembangunan Langkawi v Smart Unity Sdn Bhd [2017] MLJU 348 Camp and another v Day Smith & Hunter (a firm); Same v Grimwood [1991] Lexis Citation 1996 Horsler & Anor v Zorro [1975] Ch 302 Loke Yuen Cheng & Anor v Vimtex Sdn Bhd [1998] 4 MLJ 169 Syarikat Ying Mui Sdn Bhd v Muthusamy A/L Sellapan And Other Appeals [1999] 6 MLJ 622 E & O Trading Sdn Bhd v Americk Singh Sidhu & Ors And Another Appeal [2018] 6 MLJ 783 Asia Pacific Land Bhd & Ors v Datuk Bandar Kuala Lumpur [2006] 2 MLJ 137 K Rajashekar a/l Kanapathy & Ors v Palm Court Condominium & Ors [2014] 9 MLJ 297 Sek Ann Thong v Tamparuli Granite Quarry (Sabah Sdn Bhd) & Anor [1995] 4 CLJ 757 Mah Sing Properties Sdn Bhd v Sky Acres Sdn Bhd [2020] MLJU 1499 Jupiter Securities Sdn Bhd v Wan Yaakub Bin Abd Rahman [2002] 3 MLJ 264 Ismail bin Ibrahim & Ors v Sum Poh Development Sdn Bhd & Anor [1988] 3 MLJ 348 Lim Nyang Tak Michael v Ace Technologies Sdn Bhd [1995] 4 MLJ 616, HC 75 Angel Cake House Sdn Bhd & Ors v Bandaraya Development Berhad [2001] MLJU 24 Ashworth (Oliver) (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12 Ketteman & Ors v Hansel Properties Ltd & Ors [1987] AC 189 Taisho Co. Sdn. Bhd. v Pan Global Equities Bhd. & Anor [1999] 1 MLJ 359 Lim Yong Swan v Lim Jee Tee & Anor [1993] 1 SLR 50 Scarf v Jardine (1882) 7 App Cas 345 Ardeshir H. Mama v Flora Sassoon (1928) AIR 208 Goh Hooi Yin v Lim Teong Ghee & Ors [1990] 3 MLJ 23 Masjaya Trading Sdn Bhd v. Kedah Cement Sdn Bhd [2004] 4 CLJ18 Tenaga Nasional Bhd. v. Prorak Sdn. Bhd. [2000] 1 MLJ 479 Government of the State of Sabah v. Syarikat Raspand (suing as a firm) [2010] 5 MLJ 717 General Council of Medical Education And Registration Of The United Kingdom v. Spackman [1943] 2 All ER 337 Eshah Binti Sa at v Meriam Binti Sa at & Ors (1975) 2 MLJ 97 Ponnusamy & Anor v Nathu Ram [1959] MLJ 228 HSBC Bank Malaysia Bhd v Macquarie Technologies (M) Sdn Bhd [2004] 4 MLJ 398, [2004] 4 AMR 580, [2004] 3 CLJ 121 American Cyanamid Co v Ethicon Ltd [1975] A.C. Keet Gerald Francis Noel John v Mohd Noor @ Harun Abdullah & 2 Ors [1995] 1 MLJ 193, [1995] 1 CLJ 29, [1995] 1 AMR 373 Lian Keow Sdn Bhd v Overseas Credit Finance Bhd [1982] 2 MLJ 76 Dial Singh a/p Tara Singh v Mann Foong Realty Sdn Bhd [2000] 3 MLJ 153 at 160 The Siskina (Owners of Cargo Lately Laden On Board) And Others v Distos Compania Naviera S.A. [1979] AC 210 Berjaya Times Squares Sdn Bhd (formerly known Alor Janggus Soon Seng Trading Sdn Bhd & Ors v Sey Hoe Sdn Bhd & Ors [1995] 1 MLJ 241 Extreme System Sdn Bhd v Ho Hup Construction Company Bhd & Ors [2010] MLJU 487. Burland v Earle [1902] AC 83 Parkway Properties Pte Ltd v Page One-The Book Shor Pte Ltd [1986] 1 MLJ 291 Puncak Niaga Holdings Bhd v NS Water Sdn Bhd [2004] 5 MLJ 430 New Straits Times (Malaysia) Bhd v Kumpulan Kertas Niaga Sdn Bhd & Anor [1985] 1 MLJ 226 Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd & other appeals [1996] 1 MLJ 661 Letang v Cooper [1965] 1 QB 222 Lim Kean v Choo Koon [1970] 1 MLJ 158 Nasri v Mesah [1971] 1 MLJ 32 Saw Gaik Beow v Cheong Yew Weng & Ors [1989] 3 MLJ 301 Newacres Sdn. Bhd v Sri Alam Sdn Bhd [1991] 3 MLJ 474 Credit Corp (M) Bhd v Fong Tak Sin [1991] 1 MLJ 409 Indah Desa Saujana Corp Sdn Bhd & Ors v James Foong Cheng Yuen, Judge, High Court Malaya & Anor [2008] 2 MLJ 11 Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, at 44 77 Legislation referred to: Section 40, Section 56(1), Section 65 and Section 66 of the Contracts Act 1950 Order 15 rule 6, Order 18 Rule 19(1) (a) , Order 18 rule 19(2) , Order 20 rule 5 of the Rules of Court 2012