Malayan Banking Berhad v Dse Construction Sdn. Bhd. (AA-22NCC-10-09/2022)

DSE CONSTRUCTION SDN BHD (Company No.: 192203-X)

HO HUP CONSTRUCTION COMPANY BERHAD (Company No.: 14034-W) …DEFENDANTS 20 (based on the original suit) BETWEEN 25 DSE CONSTRUCTION SDN BHD (Company No.: 192203-X) …PLAINTIFF AND 30

MALAYAN BANKING BERHAD (Company No.: 3813-K)

KUMPULAN LIZIZ SDN BHD (Company No.: 198101006102/ 72218-M) …DEFENDANTS 35 (based on the counter claim) GROUNDS OF JUDGMENT Introduction 40 [1]. The 2nd Defendant (Ho Hup), has filed an application for disclosure pursuant to Order 24 Rule 3 of the Rules of Court 2012 (Encl. 131) in the ongoing legal proceedings (suit 10). In this application, Ho Hup seeks disclosure of specific documents from the Plaintiff (Maybank), to support their defence and ensure a fair and just trial of the case. The requested 45 documents are crucial for Ho Hup to adequately respond to Maybank's claims and present a complete defence. List of Documents Requested by the 2nd Defendant (Ho Hup): a) The "Banking Facilities" as defined in paragraph 10 of the Amended Statement of Claim, dated 20.10.2021, granted by 50 Maybank to Kumpulan Liziz Sdn Bhd ("Borrower"); b) The Securities of the Banking Facilities; c) Documents concerning the disbursement of funds related to the Banking Facilities; d) Records and documents detailing the repayment of the Banking 55 Facilities; e) Documents related to any defaults on the Banking Facilities; f) Ho Hup requests documents that provide insights into all financial transactions, including payments, deposits, withdrawals, and non-payments associated with the Banking 60 Facilities; g) Documents pertaining to any alleged diversion of proceeds by the First Defendant in the original suit (DSE); h) Records of the Maybank's demands made against the First Defendant (DSE); and 65 i) Ho Hup specifically seeks documents related to:  Alleged missing proceeds under the First Defendant's (DSE’s) payment claims no. 26 to 29 and Ho Hup’s payment certificates no. 20 to 23.  The First Defendant's (DSE’s) payment claims No. 15 to 70 23 and Ho Hup’s payment certificates No. 11 to 19 [2]. The application emphasizes that it is for general discovery and not specific discovery, where specific documents or classes of documents are requested. In general discovery, the onus is on Maybank to identify the relevant documents for disclosure. Order 24 rule 3 Rules of 75 Court 2012 provides: “3. Order for discovery. (O. 24 r. 3)

Subject to the provisions of this rule and of rules 4 and 8, the Court may at any time order any party to a cause or matter (whether begun by writ, originating summons or 80 otherwise) to give discovery by making and serving on any other party a list of the documents which are or have been in his possession, custody or power and may at the same time or subsequently also order him to make and file an affidavit verifying such a list and to serve a copy thereof on 85 the other party.

(There is no paragraph (2))

(There is no paragraph (3))

The documents which a party to a cause or matter may be ordered to discover under paragraph (1) are as follows:

the documents on which the party relies or will rely; and

the documents which could-

adversely affect his own case;

(ii) adversely affect another party's case; or

(iii) support another party's case.” 95 [3]. The guiding principle for granting an order for discovery is outlined in Order 24 Rule 8 of the Rules of Court 2012. This rule suggests that discovery should be ordered if it is “necessary” for disposing 100 fairly of the case or matter or for saving costs. In Goo Saw Jin v Hwang Sze Yunn & Anor [2018] MLJU 367, the court referring to well established case on point states this: “ [21] In so far as the law on discovery is concerned, counsel for the plaintiff said that the principles of discovery are trite and well 105 settled in the case of Yekambaran s/o Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581. [22] The essential elements for an order of discovery are threefold: (i) there must be a “document” (ii) the document must be “relevant” and (iii), the document must be or have been in the 110 “possession, custody or power” of the party against whom the order for discovery is sought. Thus far, the defendants have not denied that they have the documents for discovery but had instead elected to submit on the relevancy of those documents. It was submitted that the documents are relevant as they relate to the 115 plaintiff’s claim that the defendants as joint administrators are in breach of the investment contract. The documents are therefore necessary for disposing of the case fairly and to save costs. It was emphasized that the primary consideration remains that the defendants have physical possession, control and custody of the 120 documents.” [4]. In general discovery, the application is typically granted as a matter of course because it is assumed to be necessary. However, the court still retains the discretion to limit or dispense with discovery if 125 it is not deemed necessary. Ho Hup’s argument [5]. In this application, the applicant (Ho Hup) argues for the grant of an order for general discovery against Maybank. They make the following key points, which I am in agreement with: 130 a) that an order for general discovery should be granted as a matter of course because there are no grounds to find it unnecessary; b) that general discovery is necessary to fairly dispose of the 135 case and save costs because Ho Hup was merely a conduit in the financial facility and does not have access to documents related to the issues Maybank has raised in its Amended Statement of Claim; 140 c) that the documents sought by Ho Hup, include various agreements, contracts, and deeds related to the financial facilities granted by Maybank for the project; d) that these documents are relevant to Ho Hup's defence 145 because they provide insights into the complex interrelations between different banking facilities and projects, the use of contract proceeds to repay various facilities, and the defaults and termination of these facilities; 150 e) that Ho Hup has no access to the banking facilities, but being held liable jointly and severally with another party (DSE) for sums of money, making it important for them to obtain the relevant documents; 155 f) that Maybank has not disclosed documents that may be adverse to them, therefore Ho Hup is entitled to discover documents that support their defence; and g) that the application does not amount to a fishing expedition by 160 Ho Hup, as the documents were all referred to in the amended Statement of Claim and Maybank has acknowledged the various banking facilities and defaults by the Borrower. [6]. This court is satisfied that the three-fold test for an order for discovery (existence of documents, relevance, and possession by 165 the party) is satisfied by Ho Hup. Maybank’s response and Ho Hup’s reply [7]. Maybank vehemently opposes the discovery application. Their primary argument revolves around the assertion that Ho Hup's application seeks documents in a vague and wide manner, 170 resembling a fishing expedition that is entirely unnecessary and untimely, given that it was filed more than a year after the close of pleadings. Maybank also emphasizes the irrelevance of the documents Ho Hup is seeking, deeming them unnecessary for the fair disposal of the case. To bolster their position, they cited numerous 175 cases where courts dismissed discovery applications when the documents sought were deemed too wide, vague, or unrelated to the case. Maybank meticulously addresses each category of documents requested by Ho Hup, presenting reasons why they believe these documents should not be disclosed. The following 180 are Maybank’s reasons: a) In respect of documents requested at prayers (a), (b), (e), and

(h), Maybank argues that the relevant security documents governing the Banking Facilities granted by the Maybank to the Borrower and the letters in respect of the default and 185 termination of the Banking Facilities have already been exhibited in their affidavits filed in previous proceedings (Ipoh High Court Suit No. AA-22NCC-12-07/2020) (Suit 12). They contend that there is no necessity for further discovery. Ho Hup’s reply to Maybank is that the exhibits enclosed by 190 Maybank in previous proceedings does not relieve them of the duty to disclose the same documents in the current case. b) In respect of documents requested at prayers (c), (d), and (f), Maybank asserts that Ho Hup has failed to establish the relevance of these documents to their pleaded case in the 195 Statement of Defence. They argue that these documents are either irrelevant to Ho Hup's position or unnecessary for the fair disposal of the case. Moreover, they highlight that these requests are overly intrusive and wide in scope. Ho Hup’s reply to Maybank is that these documents are 200 essential to their defence, and their relevance may become evident during the course of the proceedings. It is premature for Maybank to claim irrelevance. c) In respect of documents requested at prayer (h), Maybank contends that the documents requested at prayer (h) are 205 within Ho Hup's knowledge, as they have been exhibited in Maybank's affidavit in Ho Hup's Striking Out Application against Maybank. Therefore, there is no need for further discovery as these documents are already in Ho Hup's possession. 210 Ho Hup’s reply to Maybank is that their request for these documents is valid, as they need to access the documents that have been previously exhibited. d) In respect of documents requested at prayers (g) and (i) and sub-para (i) and (ii), Maybank characterizes the documents 215 requested at prayers (g) and (i) and sub-para (i) and (ii) as a fishing expedition. Maybank contends that these documents are not within their knowledge and possession but should be obtained through interrogatories, which have already been filed against another party. They assert that granting such a 220 wide order for discovery without specific identification of documents would be detrimental and unnecessary. Ho Hup’s reply is basically denying Maybank’s characterization of Ho Hup’s request as a fishing expedition. The need for these documents is to support Ho Hup’s defence. 225 Court’s finding [8]. This court is persuaded that the application for discovery was not an afterthought, as the timing of the filing is entirely appropriate. There is no mandatory stipulation within the Rules of Court 2012 necessitating the filing of such applications at an earlier stage in the 230 proceedings. Moreover, as at present, no specific directions for pre-trial compliance have been issued, and allowing the application at this juncture would not result in any significant prejudice to Maybank. In Rotta Research Laboratorium SPA & Anor v. Ho Tack Sien & Ors [2010] 8 MLJ 733, His Lordship Mah Weng Kwai JC said: 235 “The court may order the production of any document at any stage of the proceedings and this would include the trial stage. In this case the plaintiffs, although having called their witnesses, have not closed their case. While it would have been salutary for the plaintiffs to have filed their application before the commencement 240 of trial, the filing and disposal of the application during the trial does not prejudice the defendants’ position. The plaintiffs had during the trial and before the filing of the application requested the defendants on several occasions to produce the defendants’ annex B, but the defendants did not accede to the requests.” 245 [9]. The application by Ho Hup should be granted as they are not the borrower in this case and are not even a party directly involved, yet they have been implicated jointly and severally in the proceedings. Given these circumstances, it is only equitable that they are 250 provided with access to all relevant documents, whether favourable or unfavourable to their position. How and in which way these documents may be useful to Ho Hup, is best known only to them. It is Ho Hup who decides on how to use or interpret these documents. Failing to provide them access now would be unjust, 255 as they could be later disadvantaged by not having the opportunity to review these materials, and the court might not look favourably upon any claim of ignorance at a later stage. Therefore, for the sake of ensuring a fair trial, it is imperative that the application for disclosure is approved. 260 [10]. Maybank's opposition to the disclosure of documents at prayers

(c), (d), and (f), on the grounds of being overly intrusive and wide in scope, is not justified. On one hand, Maybank specifically makes references to issues related to the repayment of Banking Facilities and non-payment of Banking Facilities in the amended statement 265 of claim. Therefore, for a fair disposal of the matter in due course, Ho Hup certainly requires access to the documents related to them. This consideration is not forgetting the fact that Ho Hup is not the borrower in this case and is not even a direct party involved in the transaction. However, since they have been implicated jointly and 270 severally in the proceedings, it is only equitable that they are provided with access to all relevant documents. [11]. For the reasons stated above, Enclosure 131 is allowed with a qualification that where the disclosure of a document which is not within the knowledge and possession of Maybank, the same must 275 be remarked in the affidavit verifying such a list. This qualification in the Order is given to ensure that Maybank is not unduly pressured to provide something they have no knowledge of or possession over. [12]. Costs of the application are awarded in favour of Ho Hup, with 280 costs in the cause. Date: 17 January 2024 Moses Susayan 285 MOSES SUSAYAN Judicial Commissioner High Court in Malaya at Ipoh, Perak 290 Parties: For Plaintiff : Aufa binti Radzi 295 Advocates and Solicitor [Messrs Skrine, Kuala Lumpur] For Defendant 1 : Lee See Loon Advocates and Solicitor 300 [Messrs Lee Oliver & Gan, Kuala Lumpur] For Defendant 2 : Elison Wong (together with Wong Hok Chong) 305 Advocates and Solicitors [Messrs Elison Wong, Kuala Lumpur] (Notice: This Grounds of Decision is subject to official editorial revision) 310 Headnotes Civil Procedure —discovery of documents — Post-trial discovery order — Whether court had power under O 24 r 3(1) of the Rules of Court 2012 (‘the RC’) to order Discovery of documents in favour of a party who is not the borrower the case and is not even a party directly involved, yet they 315 have been implicated jointly and severally in the proceedings – the filing of application for discovery is not an afterthought or too late because no specific direction for pre-trial was issued and no significant prejudice 320