Ng Pik Lian v 1. ) United Eastern Resources Sdn. Bhd. (24NCC-49-02/2013)

UNITED EASTERN RESOURCES SDN BHD

SAFETY CAPITAL SDN BHD

TAI MAY CHEAN

CHUAH KIM SENG

LOW WEE PENG (NRIC NO.: 701031-11-5065) …DEFENDANTS 15/08/2022 16:27:30 24NCC-49-02/2013 Kand. 602 GROUNDS OF JUDGMENT Introduction [1] Enclosure (“Enc.”) 399 was filed by the Plaintiff against the 2nd and 3rd Defendant, and also World Executive Search Sdn Bhd (“WES”) for amongst others:

1.1 the discovery of documents in relation to the payments made by the 2nd Defendant, in respect of staff cost, cost of accounts manager, administrative executive, and secretary to WES for the years of 2013 to 2021;

1.2 the Consent Order dated 21.2.2013 (amended on 22.3.2013) (“Consent Order”) be varied to include an obligation by the 1st, 2nd, 3rd Defendant as the case may be, to render ‘sufficient particulars’ of payments;

1.3 alternatively, the Consent Order be set aside and for an interim injunction to restrain the 1st to 3rd Defendants from using the funds of the 1st and 2nd Defendants without prior consent of the Plaintiff. [2] Prior to the hearing of Enc. 399, this Court on 8.4.2022 dismissed 4 applications in Enc. 418 and Enc. 420 made by the 3rd Defendant and Enc. 425 and 428 made by the 2nd Defendant to cross-examine the Plaintiff and Lau Yoke Leong on their affidavits filed in support of Enc.

[3] The reasons for dismissing the 4 applications to cross examine the deponents have been set out in my first grounds of judgment – see Ng Pik Lian v United Eastern Resources Sdn Bhd & Ors [2022] MLJU 1062; [2022] 1 LNS 1078. [4] At the outset of the hearing of Enc. 399, the Plaintiff’s counsel informed that the Plaintiff would only be proceeding with the discovery application in Enc. 399. On 25.5.2022, the application was dismissed with costs. This written judgment contains the full reasons as to why. Background [5] The Plaintiff, now 90 years old, is a director and shareholder of United Eastern Resources Sdn Bhd (“UER”), the 1st Defendant. She is the mother of the 3rd Defendant who is the other director and shareholder of UER. [6] In 2013, the Plaintiff filed this Originating Summons (“OS”) under s. 181 of the Companies Act 1965 (“CA 1965”) alleging oppressive conduct on the part of her daughter, the 3rd Defendant in relation to her management of the affairs of UER and Safety Capital Sdn Bhd, the 2nd Defendant. It is the Plaintiff’s case that the 3rd Defendant is holding the shares of UER as her nominee; the 3rd Defendant’s position as a director in UER and the 2nd Defendant respectively is also as a nominee. The Plaintiff is asking back for shares in UER and New Future Capital Sdn Bhd (“NFC”) registered in the daughter’s name, and the daughter had allegedly pre-signed resignation letters as director and share transfer forms. The authenticity of these documents is disputed by the 3rd Defendant and to be tried. [7] Pending disposal of the OS, the Plaintiff filed an application for an interim injunction to prevent the 3rd Defendant from dealing with the funds of the 1st and 2nd Defendants without the prior written consent of the Plaintiff. A Consent Order was entered into on 21.2.2013 during the hearing of the application. The Consent Order was then amended on 22.3.2013 requiring 7 days’ prior notice before making payment (“Consent Order”). It reads: “By consent, it is agreed that pending the hearing and decision of the High Court on Enclosure 1 [the Originating Summons main suit], the 3rd Defendant will not deal with the funds of the 1st and 2nd Defendants outside the ordinary course of business, provided that the 1st, 2nd and 3rd Defendants are at liberty to use the 1st and 2nd Defendants’ funds to pay taxes, tax liabilities and operating expenses. Seven (7) days before Within ten (10) working days of making the aforesaid permitted payments, the relevant Defendant who pays the monies shall give written monthly notice of the same to the Plaintiff’s solicitors.” [8] Apart from this OS, the acrimonious disputes between the Plaintiff, the 3rd Defendant and/or the Plaintiff’s son and 3rd Defendant’s brother, Tai Hean Leng (“THL”) and their related family companies spawned several other legal suits pertaining to the family assets and the capacity of the Plaintiff to litigate. Out of these various suits, many of which are ongoing, there are 2 suits that were transferred to this Court to be heard together with this present suit, namely:

8.1 Kuala Lumpur High Court Civil Suit WA-22NCC-124-04/2017 (“Suit 124”) initiated by the 3rd Defendant against inter alia her mother and brother, THL seeking a declaration that the pre-signed resignation letters as director and share transfer forms are invalid, null and void ab initio. Both the Plaintiff and THL filed a counterclaim against the 3rd Defendant that she held the UER and NFC shares in trust for the Plaintiff; and

8.2 Kuala Lumpur High Court Civil Suit WA-28NCC-466-07/2017 (“Suit 466”) initiated by the Plaintiff under s 465 (1) (h) against the 3rd Defendant to wind up UER (on just and equitable ground) premised on an irretrievable breakdown of relation between the Plaintiff and the 3rd Defendant and there is a deadlock in the Board of Directors and shareholders’ meetings. [9] Previous trial dates for these 3 suits were taken off for one reason or other and finally, at time of writing these grounds, trial had commenced. The Plaintiff’s case for Discovery [10] The Plaintiff claimed that it was recently discovered that there are various irregularities and discrepancies pertaining to the payment of “staff costs” by the 2nd Defendant to World Executive Search Sdn Bhd (“WES”). The discrepancies and irregularities suggest that the funds of the 2nd Defendant are being dissipated pending disposal of this suit. It was alleged that the 3rd Defendant is in control of WES. The 2 shareholders of WES are the 3rd Defendant and her husband, one Johny, with the 3rd Defendant holding 99,999 units of share in WES and Johny holding 1 unit of shares. The board of directors is also comprised of the 3rd Defendant and Johny. [11] As such, Enc. 399 was filed by the Plaintiff in the belief that the Consent Order has been abused/misused by the 2nd and/or 3rd Defendant as a vehicle to dissipate the funds of the 2nd Defendant pending disposal of this 49 and Suit 124:

11.1 to seek discovery of all documents relating to payments of staff costs and costs of accounts manager, admin executive and secretary to WES from 2013 to 2021. These include the breakdown of such payments for those years as well as all documents submitted to the Employees Provident Fund (“EPF”) showing the salary and EPF contributions of all employees in WES from 2013 to year 2021. She postulated that the documents sought are in the possession, custody and/or power of the 2nd and 3rd Defendants and are relevant:

11.1.1 the present suit is an oppression suit. The documents sought in Appendix A would show whether the 2nd and/or 3rd Defendants have further dissipated the funds of the 2nd Defendant which is an act of oppression (see Ting Teck Sie v Wong Sen Chiew & Ors [2005] 6 CLJ 495) and this would advance the Plaintiff’s case and damage the 3rd Defendant’s case;

11.1.2 the documents are required to show that the 2nd and/or 3rd Defendants have not complied with the Consent Order pending disposal of this suit and this would advance the Plaintiff’s case and damage the 2nd and 3rd Defendants’ case;

11.1.3 the documents sought would show whether the 2nd and/or 3rd Defendants have indeed overpaid WES which is the 3rd Defendant’s associated company which would lead to a train of inquiry;

11.1.4 as for the documents sought in Appendix B against WES, a non-party, these are in the possession, custody and/or power of WES and are relevant for the same reasons set out above; and

11.1.5 the Plaintiff has fulfilled all the 3 requirements distilled from the case of Yekambaran Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581: “The essential elements for an order for discovery are threefold, namely first, there must be a "document", secondly, the document must be "relevant" and thirdly, the document must be or have been in the "possession, custody or power" of the person against whom the order for discovery is sought. It is indisputable that the items sought were documents and were in the possession, custody or power of the defendant.” 2nd, 3rd Defendant and WES’s objections to Discovery [12] In opposing discovery, the 2nd, 3rd Defendant and WES appeared to raise similar grounds, in gist as follows:

12.1 the documents sought are not necessary for disposing fairly of the matter or for saving costs and irrelevant as the agreed issues for trial are confined to:

12.1.1 whether the 3rd Defendant is the beneficial owner of the shares held in NFC and UER respectively, or whether the shares are held on trust for the Plaintiff; and

12.1.2 whether the impugned pre-signed nominee documents were forged or signed by the 3rd Defendant.

12.2 the categories of documents sought spanning 9 years are too wide and vague and amount to a fishing expedition; allowing the Plaintiff access to the said documents would be unduly oppressive and amounts to an abuse of process;

12.3 the Plaintiff’s allegations of discrepancies in the monthly Tables of Payments extended to the Plaintiff’s solicitors are not substantiated and based on assumptions;

12.4 res judicata applies in view of the repeated applications filed by the Plaintiff in a separate matter i.e., Civil Suit No.:22NCC- 497-07/2013 (“Suit 497”) which were all previously dismissed by the High Court; and

12.5 the disclosure of EPF information is not allowed under the Personal Data Protection Act 2010 (“PDPA”). Court’s Analysis and Decision [14] The application against the 2nd and 3rd Defendants are made under Order 24 rule 3, 7, 9, 11 Rules of Court 2012 (“ROC 2012”) whilst for the application against WES, the application is made under Order 24 r 7A ROC 2012. [15] WES being a non-party to the proceedings, the position is slightly different. In this regard, I find myself in agreement with the deliberations of Wong Kian Kheong JC (as his Lordship then was) in Billion Prima Sdn Bhd & Anor v Nutech Co Ltd & Anor [2017] 10 MLJ 213 where his Lordship stated that relevancy is less stringent in a discovery against a third party than that which is required under a discovery application by parties against each other in a pending action. [16] Nevertheless, in deciding the application, this court has to consider the parties’ respective positions in the light of Order 24 rule 8 and Order 24 rule 13(1) ROC 2012 which are produced for convenience. [17] Order 24 rule 8 ROC 2012 states: “8. Discovery to be ordered only if necessary. (O. 24 r. 8) On the hearing of an application for an order under rule 3, 7 or 7A, the Court, if satisfied that discovery is not necessary, or not necessary at that stage of the cause or matter, may dismiss or adjourn the application and shall in any case refuse to make such an order if and so far as it is of the opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs.” [18] Order 24 rule 13(1) ROC 2012 states: “13. Production to be ordered only if necessary. (O. 24 r. 13)

An order for the production of any documents for inspection or to the Court shall not be made under any of the foregoing rules unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.” [19] The essential elements for an order for discovery as set out in Yekambaran Marimuthu v Malayawata Steel Bhd (supra) at p 585 are as follows:

There must be a document;

The document must be relevant; and

The document must be or have been in the possession, custody or power of the party against whom the order for discovery is sought. [20] In Sitrac Corp Sdn Bhd & Anor v Dato’ Syed Hamzah bin Syed Abu Bakar (deceased) (representative appointed, Syed Sazlee bin Syed Hamzah) & Ors [2022] 8 MLJ 43, I held: “[25] With the deletion of the old O 24 r 2 in the ROC 2012, there is no longer automatic discovery. Since then, the trite test therefore is whether the documents in question are necessary either for disposing fairly of the matter or for saving costs. In Ho King Min & Anor v Lee Meng Leng & Ors [2020] MLJU 1925, I stated that the plaintiffs (who were seeking discovery in that case) do not have a free-standing right to discovery and ought to have first clearly demonstrated the necessity for the documents sought.” [21] The test whether the documents in question are necessary either for disposing fairly of the matter or for saving costs was most recently reiterated by the Federal Court in Protasco Bhd v Tey Por Yee & Anor and other appeals [2021] 6 MLJ 1: “[33] Order of discovery will only be granted if the court is satisfied that discovery is necessary for disposing fairly of the cause or matter or for saving costs. O 24 r 8 of the ROC 2012 provides that if the court is satisfied that discovery is not necessary, or not necessary at that stage of the cause or matter, it may dismiss or adjourn the application and refuse to make such an order if in its opinion that discovery is not necessary.” [22] Whether the documents are necessary should not be conflated with the test of relevance. In this regard, I can do no better than to refer to the illuminating Court of Appeal decision in Malaysia Debt Ventures Berhad v. Platinum Techsolve Sdn. Bhd. & Ors [2020] MLJU 1421 where S. Nantha Balan JCA, delivering judgment of the Court examined numerous cases on the subject and elucidated: “[198] Further, it is also imperative for the respondents to establish that the DSA is necessary. Relevance cannot be conflated with necessary, as what is relevant may not be necessary. [199] In our view, the question as to whether the document for which disclosure is sought is necessary is an important and we might, add pivotal component for the order of discovery under Order 24 Rule 7 ROC. Indeed, Order 24 Rule 8 ROC also makes it imperative that the Court to refuse discovery if it is satisfied that discovery was not necessary.” [23] Later on in the judgment, His Lordship explained the approach to what is “necessary”: “[202] In our view, the proper approach to the question of whether discovery is "necessary" may be gleaned from the case of Bayerische Hypo-und Vereinsbank AG v. Asia Pacific Breweries (Singapore) Pte Ltd and other applications [2004] SGHC 155; [2004] 4 SLR (R) 39 ("Bayerische") where the High Court of Singapore at paragraph [37] stated as follows: "The ultimate test is whether discovery is necessary for disposing fairly of the proceedings or for saving costs. An assertion that the documents are relevant will not be good enough. Equally, an assertion that the documents are necessary because they are relevant will not be enough." [24] The burden is on the Plaintiff applicant to satisfy the Court that the production of the document is necessary to dispose fairly of the cause or matter fairly or to save costs under O 24 r 13(1) ROC 2012- see Nguang Chan aka Nugang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40, where the Court of Appeal held: “Under O 24 r 13 (1) of the RHC, an order for the production of documents for inspection is not to be made unless the court is of the opinion that such order is necessary either for disposing fairly of the case or matter or for saving costs. It is for the party seeking production to satisfy the court that such production is necessary for the purpose specified in r 13(1). The court would dismiss a plaintiff’s application for discovery if the plaintiff is merely fishing for evidence to prop up his case and to allow him discovery would be unduly oppressive to the party giving discovery.” [25] In Kerajaan Negeri Kelantan v Petroliam Nasional Berhad & Other Appeals [2014] 7 CLJ 597, the Federal Court determined that discovery must relate to the core issues. It held: “[8] As for the discovery issue in the first appeal, the documents sought were not only very extensive, but irrelevant to the core issue. The documents sought only relate to the issue of quantum of damages and went nowhere towards establishing the issue of liability in the case. In the circumstances, in view of the O. 14A applications herein, the learned judge was correct in holding that discovery was not necessary at that stage of the proceedings. The learned judge's decision in dismissing discovery at that stage of proceedings was in line with the underlying principle under O. 24 r. 4 which underscored that the discovery process was predicated on the issues involved in a particular case. It followed that, in this case, the determination of the core issue in the O. 14A applications had rightly been decided to precede the discovery. It followed further that the exercise of discretion by the learned judge in the matter was in accordance with principles which did not justify this court's interference.” [26] Having considered the submissions of the parties and the law on the matter, in the exercise of the discretion vested in this Court whether or not to make an order for discovery, I have no hesitation to dismiss Enc. with costs. [27] Firstly, it is trite law that in a hearing based on affidavits, if an assertion of fact is credibly disputed, the court must then proceed to hear the matter without considering the disputed facts and decide the matter by consideration of the undisputed facts - Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433. [28] Ignoring the disputed facts whether there were in fact ‘jarring discrepancies’ and that the 3rd Defendant had been ‘squirrelling away monies’ relating to payments of staff costs and costs of accounts manager, admin executive and secretary to WES from 2013 to 2021 and therefore, has acted in breach of the Consent Order, the basis for discovery falls. Having contended that the documents sought are relevant and necessary, the onus of establishing whether there is a basis for the Plaintiff’s suspicions of irregularities and discrepancies pertaining to the payment of “staff costs” clearly lie on the Plaintiff. It is not for the 2nd, 3rd Defendants and WES to provide the documents for the Plaintiff to prove her hunch that wrongful acts was committed by the 3rd Defendant against her. Ordering the documents sought, in my judgment, would wrongly shift the burden of proof to the 2nd and 3rd Defendants. A discovery application cannot be a backdoor way of reversing the burden of proof. [29] I have also borne in mind that discovery is never intended to justify demands for disclosure of documents which are required for purely speculative investigation (in this case, whether there was a breach of the Consent Order by the 2nd and 3rd Defendants). Such requests should be dismissed – see the case of O Company v M Company [1996] 2 Lloyds Rep 347, where the English Court of Appeal held as follows (at page 350): “The principle was never intended to justify demands for disclosure of documents at the far end of the spectrum of materiality which on the face of it were unrelated to the pleaded case of the Plaintiff or Defendant and which were required for purely speculative investigation. The excessively wide application of Brett LJ’s formulation of relevance has probably contributed more to the increase of the costs of English civil and commercial litigation in recent years than any other factor other than the development of the photocopying machine. That formulation must not, in my judgment, be understood as justifying discovery demands which would involve parties to civil litigation being required to turn out the contents of their filing systems as if under criminal investigation purely on the off-chance that something might show up from which some relatively weak inference prejudicial to the case of the disclosing party might be drawn. On the contrary, the document or class of documents must be shown by the Applicant to offer a real probability of evidential materiality in the sense that it must be a document or a class of which in the ordinary way can be expected to yield information of substantial evidential materiality to the pleaded claim or the defence to it in the broad sense which I have explained. If the document or class cannot be demonstrated to be clearly connected to issues which have been raised in the course of the proceedings or which in the ordinary way would be expected to be raised in the course of the proceedings if sufficient information were available, the application should be dismissed.” (emphasis added) [30] Second, crucially, it is to be borne in mind that as far back as 13.1.2020 during case management, it was agreed by the parties that for Suit 124 and the instant suit heard together, the agreed issue to be determined is confined to whether the 3rd Defendant is the beneficial owner of the shares held in NFC and UER respectively, or whether such shares are held on trust for the Plaintiff, and in this regard, whether the impugned pre-signed nominee documents were in fact signed by the 3rd Defendant or whether such documents were forged. [31] In my judgment, the Plaintiff has failed to prove clearly that the documents sought in her Application are necessary and pivotal to advance her case, that the said documents are relevant and necessary to the core issue as to whether the signature of the 3rd Defendant on the nominee documents are genuine or forged, the determination of which will lead to a finding whether she holds the shares in UER and NFC on trust for the Plaintiff or conversely for herself as beneficial owner - Kerajaan Neqeri Kelantan v. Petroliam Nasional Berhad & Other Appeals (supra). [32] The core issue in my respectful view, can be decided by existing documents produced by the parties before the Court. The documents sought in my utmost respectful view are completely irrelevant and unnecessary for the determination of the agreed core issue. [33] The documents sought to be discovered will not in my respectful view, throw light on whether the nominee documents signed by the 3rd Defendant were genuine or forged. As stated by Justice Mary Lim JCA (later FCJ) in Infoline Sdn Bhd (sued as trustee of Tee Keong Family Trust) v Benjamin Lim Keong Hoe [2017] 6 MLJ 363: “If the documents can shed some light as to the question which vexes the applicant, in this case the respondent, as to whether he has a viable claim for being terminated as a beneficiary, then the application is properly initiated.” [34] There is as such, no imminent need for the documents to be disclosed, particularly with trial well-nigh upon us. It is also impracticable, and will not lead to the saving of costs and time if the court accedes to discovery at this stage. I have not overlooked that this file has been in the court’s docket for close to a decade. Ordering discovery at the cusp of the trial will not lead to an efficient disposal of the trial, particularly when the request for documents span 9 years, and the purpose declared by the Plaintiff in her submission for discovery is “to give effect to the Consent Order” – paragraph 10 enc. 437. [35] Added to that, I tend to agree with the 2nd Defendant’s counsel that if at the end of the day, the Plaintiff succeeds in getting her shares back and control of UER, it was open to the Plaintiff to take if need be a double derivative action as explained in the case Ranjeet Singh Sidhu v Zavarco PLC [2016] 2 CLJ 975; [2015] MLJU 638 since UER holds the majority shares in the 2nd Defendant. On balance, I hold the systematic and efficient administration of justice is better served by refusing discovery. [36] Thirdly, quite apart from what was discussed, I am inclined to agree with the 2nd, 3rd Defendants and WES’s submissions that acceding to the request for the documents sought, will be unduly oppressive to them particularly when it lacks specificity. The request is extremely general in nature, covers a broad range of documents over an extensive span of 9 years from 2013 to 2021, and are to be produced within 7 days of order by this court. WES’s counsel’s argument that s 42 of the EPF Act 1991 only obliges and employer to keep statutory records for only 6 years is not unattractive. Bearing in mind the agreed issue for trial and the broader picture of the dispute as to whether the 3rd Defendant in fact holds the UER and NFC shares on trust for the Plaintiff, in my judgment, the Plaintiff’s application smacks of a fishing expedition and “trawling of an unlimited sea” for evidence, and an abuse of process. To allow such an application will be extremely prejudicial, unjust and oppressive to the 2nd and 3rd Defendants – see Leslie S Holmes v Engineering Service Inc [1993] 1 AMR 27 at p 36. [37] For the reasons given, as the Plaintiff has not demonstrated clearly on a balance of probabilities that the documents sought by her are not only relevant but are necessary to the core issue to be adjudicated herein and for a fair disposal of this proceeding, I have found it unnecessary to deal with each and every authority cited by the respective parties and the other issues raised, such as res judicata and whether disclosure will infringe the PDPA. [38] Accordingly, I exercised my discretion to dismiss Enc. 399 with costs subject to allocator. Dated this: 7th day of August 2022 -sgd- …….………………… Liza Chan Sow Keng Judicial Commissioner High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiff Michael Chow (with him, Wong Zhi Khung) For the 2nd Defendant Datuk Wong Rhen Yen (with him, Emily Wong) For the 3rd Defendant Barry Goh Meng Yew (with him, David Ng, Muhammad Zarqali Mohd Noor). Aggrieved Party Datuk Joy Appukuttan (with him, Lim Jie Sheng for World Executive Search Sdn Bhd) CASES REFERED: Yekambaran Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581 Billion Prima Sdn Bhd & Anor v Nutech Co Ltd & Anor [2017] 10 MLJ 213 Infoline Sdn Bhd (sued as trustee of Tee Keong Family Trust) v Benjamin Lim Keong Hoe [2017] 6 MLJ 363 Kerajaan Negeri Kelantan v Petroliam Nasional Berhad & Other Appeals [2014] 7 CLJ 597 Leslie S Holmes v Engineering Service Inc [1993] 1 AMR 27 Malaysia Debt Ventures Berhad v Platinum Techsolve Sdn. Bhd. & Ors [2020] MLJU 1421 Ng Pik Lian v United Eastern Resources Sdn Bhd & Ors [2022] MLJU 1062; [2022] 1 LNS 1078 Nguang Chan aka Nugang Chan Liquor Trader &Ors v Hai-O Enterprise Bhd & Ors [2009] 5 MLJ 40 O Company v M Company [1996] 2 Lloyds Rep 347 Protasco Bhd v Tey Por Yee & Anor and other appeals [2021] 6 MLJ 1 Sitrac Corp Sdn Bhd & Anor v Dato’ Syed Hamzah bin Syed Abu Bakar (deceased) (representative appointed, Syed Sazlee bin Syed Hamzah) & Ors [2022] 8 MLJ 43 Ranjeet Singh Sidhu v Zavarco PLC [2016] 2 CLJ 975; [2015] MLJU 638 Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 MLJ 433 Ting Teck Sie v Wong Sen Chiew & Ors [2005] 6 CLJ 495 STATUTES/LEGISLATION REFERED: Order 24 rule 3, 7, 7A, 8, 9, 11 and 13 Rules of Court 2012 Section 181 of the Companies Act, 1965