Maybank Islamic Berhad v Mega Sasa Sdn Bhd (KA-28NCC-20-04/2024)

This Grounds of Judgment relates to the decision delivered by this Court on 24 October 2024 in respect of the Respondent’s Summons in Chambers dated 25 July 2024 under Enclosure 21, whereby the application to strike out and/or expunge certain paragraphs and exhibits in the Petitioner’s Affidavit-in-Reply affirmed on 28 May 2024 under Enclosure 13 was allowed with costs in the cause, together with consequential directions for the filing of fresh affidavits and written submissions to reflect the expunged material.

The Court notes that a Notice of Appeal was filed on 7 November

However, due to a combination of administrative and technical issues, including the fact that I had since been transferred out to Kuala Lumpur High Court, the said Notice of Appeal, as well as subsequent correspondence from solicitors, did not reach my attention at the material time. As a result, I was unaware that written Grounds of Judgment were required, and the appeal proceedings were adjourned on several occasions pending the issuance of the Grounds of Judgment.

The matter was only brought to the Court’s attention after direct correspondence was channelled to my current office in Kuala Lumpur by the Appellant’s Counsel, following which immediate steps were taken to prepare and issue this Grounds of Judgment. S/N mAsGOu9c6USlmktjnpB5tQ

For the avoidance of doubt, this Grounds of Judgment are issued solely to set out the reasons for the decision already delivered on 24 October 2024, and do not in any way alter, revisit, or vary the substance of that decision. B.

The main proceedings concern a winding-up petition presented by the Petitioner against the Respondent under s 465(1)(e) of the Companies Act 2016.

In the course of the petition, the Petitioner filed an Affidavit-in-Reply, affirmed on 28 May 2024 under Enclosure 13. In that affidavit, the Petitioner relied on certain correspondence exchanged between the parties, which was said to relate to discussions on repayment and settlement.

The Respondent subsequently filed Enclosure 21, seeking orders that:

paragraphs 4, 5, 6, 7 and 8 of Enclosure 13; and

the exhibits marked as “Exhibit A-2” (pdf pages 7–17 of Enclosure 13) be struck out and/or expunged on the ground that they constituted privileged “without prejudice” communications within the meaning of section 23 of the Evidence Act 1950. S/N mAsGOu9c6USlmktjnpB5tQ

Affidavits were exchanged between parties as follows:

Respondent’s Affidavit-in-Support (Enclosure 20);

Petitioner’s Affidavit-in-Reply (Enclosure 22); and

Respondent’s further Affidavit-in-Reply (Enclosure 23).

Both parties filed written submissions under Enclosures 24 and 25. After hearing submissions, this Court allowed Enclosure 21 and made consequential directions for the filing of fresh affidavits and submissions to reflect the expungement.

The narrow issue before the Court was whether the impugned paragraphs and exhibits in Enclosure 13 constituted privileged “without prejudice” communications, such that they ought to be struck out and/or expunged from the record.

This application did not require the Court to determine the merits of the winding-up petition itself.

Section 23 Evidence Act 1950

Section 23 of the Evidence Act 1950 provides that in civil cases, no admission is relevant if it is made: S/N mAsGOu9c6USlmktjnpB5tQ

upon an express condition that evidence of it is not to be given; or

(ii) under circumstances from which the Court can infer that the parties agreed that evidence of it should not be given.

The provision embodies a long-established public policy of encouraging parties to attempt settlement freely, without fear that such communications will later be used against them in court.

“Without Prejudice” Privilege

The law on “without prejudice” communications is well settled. Communications genuinely aimed at settlement are privileged and inadmissible, whether or not they are expressly labelled “without prejudice”, provided there is:

a dispute between the parties; and

(ii) a genuine attempt to resolve that dispute by negotiation.

The authorities relied upon by the parties, including Dusun Desaru Sdn Bhd v Wang Ah Yu & Ors [1999] 5 MLJ 449, affirm that the Court must look at the substance and context of the communication, rather than the mere form. S/N mAsGOu9c6USlmktjnpB5tQ

Power to Strike Out or Expunge Affidavit Material

It is trite that affidavits must be confined to relevant and admissible material. Where affidavit evidence contains privileged, irrelevant, or otherwise inadmissible matter, the Court has the discretion to strike out or expunge only the offending portions, without striking out the affidavit in its entirety. E.

Having examined the impugned paragraphs and exhibits in Enclosure 13, together with the surrounding correspondence exhibited in Enclosure 20, the Court was satisfied that the communications relied upon by the Petitioner were part of ongoing settlement discussions between the parties.

The correspondence clearly reflected discussions on repayment arrangements and possible settlement, exchanged in circumstances where the parties were attempting to resolve their dispute without recourse to further litigation.

In the Court’s view, there existed at least a tacit understanding between the parties that such communications were not to be deployed as evidence in the proceedings should settlement fail.

The fact that the Petitioner sought to rely on those communications in Enclosure 13 did not, of itself, deprive them of their privileged S/N mAsGOu9c6USlmktjnpB5tQ character. Privilege is determined objectively by reference to the nature and purpose of the communication at the time it was made.

The Court was therefore satisfied that:

paragraphs 4 to 8 of Enclosure 13; and

the exhibits marked as “Exhibit A-2” constituted privileged “without prejudice” communications and were inadmissible.

In the interest of fairness and to preserve the integrity of the proceedings, those portions ought not to remain on the record. At the same time, justice did not require the striking out of the entire affidavit.

Given that the expunged material had been relied upon in the existing affidavits and submissions, it was necessary and appropriate to give consequential directions to ensure that the proceedings could continue on a proper footing.

Accordingly, the Court directed the filing of:

a fresh Affidavit-in-Reply by the Petitioner, purged of the expunged material; and

revised submissions by both parties, confined to admissible evidence. S/N mAsGOu9c6USlmktjnpB5tQ G. CONCLUSION AND ORDERS

For the reasons set out above, the Court on 24 October 2024, ordered as follows :

The Respondent’s application in Enclosure 21 is allowed;

Paragraphs 4, 5, 6, 7 and 8 of the Petitioner’s Affidavit-in-Reply under Enclosure 13, together with Exhibit “A-2”, are struck out and expunged from the record;

Consequential directions were given for the filing of fresh affidavits and submissions to reflect the expungement; and

Costs are ordered to be costs in the cause. Dated : 15th January 2026 ……………………………………………… (YA PUAN MAHAZAN BINTI MAT TAIB) JUDGE HIGH COURT OF MALAYA ALOR SETAR, KEDAH For The Petitioner : Wong Weng Yew Messrs. Sucha Singh & Partners For The Respondent : Ian Hannibal Liang bin Danial Liang Messrs. Damien Chan, Hannibal & Ng Chambers S/N mAsGOu9c6USlmktjnpB5tQ S/N mAsGOu9c6USlmktjnpB5tQ