Polyflo Sdn Bhd v Koh Kok Quiee @ Koh Yok Chow (BA-22NCC-33-03/2023)

And Polyflo Sdn. Bhd.

Tan Cheng Liam …Defendants GROUNDS OF JUDGMENT Introduction [1] Koh Kok Quiee @ Koh Yok Chow (Koh) is the Defendant in the main suit and Plaintiff in his Counterclaim against PolyFlow Sdn. Bhd. (Polyflo) and one Tan Chen Liam (Tan). [2] Polyflo Sdn. Bhd. is the Plaintiff in the main suit and one of the Defendants in the Counterclaim. Enclosure 17 is Polyflow's application to strike out Koh's Amended Counterclaim pursuant to Order 18 Rule 19 of the Rules of Court 2012 (ROC). [3] After hearing both parties, I allowed enclosure 17, and Koh's Counterclaim against Polyflo was struck out with a cost of RM3000, subject to the allocator fee. Koh has now appealed to the Court of Appeal and below are my reasons. Background Facts [4] Polyflo brought a suit against Koh, claiming a sum of RM18,549,717.28 allegedly loaned to Koh. Koh filed his Statement of Defence, and a Counterclaim (later, an Amended Counterclaim was filed) against Polyflo as the 1st Defendant, naming one (1) other party as the 2nd Defendant, Tan Cheng Liam. Koh filed no reply to Polyflo's Defence to Counterclaim. [5] Polyflo was established in 1989 as a trading and service organisation by four (4) directors (shareholders - Koh holding a percentage of 35%, Mark Kin Kung 35%, Ahmad Nazari bin Haji Yusop 20% and Tan Cheng Liam 10%). In 2000, the shareholding was altered to only three (3) shareholders, Koh (38%), Ahmad Nazari bin Haji Yusop (31%) and Tan Cheng Liam (31%). [6] Before 2014, Koh held 38% of the shares. He then transferred 10% each to his wife and two (2) daughters, leaving the balance of 8%, which he currently holds. [7] It was submitted that throughout Koh's tenure as a director, he had in his capacity requested, approved and/or received a sum of RM18,549,717.28 as advance through his accounts and/or account of individuals receiving on his behalf, and the entire transaction for the sum advanced is as recorded in Polyflo general ledger. This became Polyflo's cause of action against Koh in the main suit. [8] It was further alleged that Koh had established a new company, Zapfventile Fuelling Solutions Sdn. Bhd. on 7.3.2022 with his daughters, who had a business nature similar to Polyflo's (oil and gas industry). [9] In defending against the suit taken by Polyflo, Koh filed his Defence and Counterclaim on 12.5.2023 (the original Counterclaim). Relying on this Counterclaim, Polyflo filed this application to strike out via enclosure 17. [10] On 6.6.2023, Koh applied to amend his Defence and Counterclaim, which was granted, adding a new set of facts to justify/explain Polyflo's involvement in the Counterclaim. To address the newly added facts and/or issues, Polyflo affirmed and filed an additional affidavit at enclosure 41. [11] In brief, Koh's Amended Counterclaim states the following: -

Koh was not re-elected as a director according to the agenda of the

Koh had been a director since the establishment of Polyflo and had been the key officer of the company until 28.2.2022;

Koh's service as an employee of Polyflo was wrongfully terminated in accordance with the Industrial Relations Act 1967;

Koh's service as a full-time employee of Polyflo had been terminated without just cause and excuse and without compensation;

Therefore, Koh alleged that his non-re-election as a director had caused him humiliation, distress, and mental anguish. [12] Notably, the facts above were not initially pleaded in Koh's original Counterclaim. [13] In giving its reasons for filing the application to strike out, Polyflo stated that Koh's Counterclaim failed to disclose reasonable cause of action, scandalous, frivolous or vexatious, and an abuse process of the Court. [14] In objecting to this application, Koh submitted as follows:

During the 2022 AGM held on 28.2.2022, Koh was not re-elected as a director and thus contended that he was wrongfully terminated as an employee without compensation.

Tan had not filed any affidavit either in support or in opposition to this application; therefore, Tan's position should not be discussed, and Polyflo is presumed to accept that the suit is reasonable.

Tan has been holding 62,480 (15.62%) shares on trust on behalf of Koh, which he has failed to pay or return to date.

Polyflo has no locus standi to make averments or contentions on behalf of Tan.

Most of the relief pleaded in Koh's Counterclaim is against Tan; thus, Polyflo's application is flawed. [15] In reply to the above contentions, referring to Polyflo's Amended Defence to the Amended Counterclaim, they state as follows (see paragraph 13 of enclosure 65):

13.1. The Defendant was fully aware of the AGM and did not attend the AGM;

13.2. The decision not to re-elect was made in accordance with the Memorandum and Article of Association ["M&A"], according to the composition of shareholders attending the AGM and in accordance with the laws;

13.3. The claims made by the Defendant in its Amended Counterclaim is merely an afterthought made to create and justify his Counterclaim against the Plaintiff, and to delay the Plaintiff's claims in the main suit.

13.4. That insofar as the allegation that he was dismissed from his position as a director according to the Industrial Relations Act 1967, no complaints were lodged by him to the Department of Industrial Relations ["JPP"] within the stipulated time as required by the Act. Therefore, the Defendant's claims are baseless, unsubstantiated, and with respect, an abuse process of the Court. Order 18 Rule 19 of the ROC [16] There is no necessity to reiterate or reprise the trite principle of law on striking out of an action under O18 R19 as it was well established by clear decisions of the Supreme Court in Bandar Builders Sdn Bhd v United Malayan Banking Corporation Bhd (1993) 4 CLJ 7 on the test for striking out applications. As a reminder, the tests are as follows: "(a) it is only in plain and obvious cases that recourse should be had to the summary process under the rule;

this summary procedure can only be adopted when it can be clearly seen that a claim or answer is, on the face of it obviously unsustainable;

it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence;

if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under Order 33 r. 3 of the ROC; and

the Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable." (see the Federal Court case of Tan Wei Hong (A Minor Suing Through Guardian Ad Litem And Next Friend Chuang Yin E) & Ors v. Malaysia Airlines Bhd And Other Appeals [2018] 9 CLJ 425). [17] It is also to be noted when a striking out order is not suitable, as pointed out by the Court of Appeal in Sivarasa Rasiah & Ors v. Che Hamzah Che Ismail & Ors [2012] 1 CLJ 75, in the following passage: "A striking out order should not be made summarily by the Court if there is issue of law that requires lengthy argument and mature consideration. It should also not be made if there is issue of fact that is capable of resolution only after taking viva voce evidence during trial (see: Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor [1997] 3 CLJ 305; [1997] 2 MLJ 565 (FC))." [18] The primary task of this Court now is to determine whether the issues arising from the facts canvased fall within the limbs of Rule 19 (1) of the ROC. Analysis and Findings [19] In Koh's original Counterclaim (enclosure 12), his defence mainly mentioned Tan's involvement in holding a percentage of the share and failure to pay for the said allotment. Therefore, Koh's Counterclaim was on Tan's failure to make payment for the shares he was holding (15.62%), which allegedly belonged to Koh, and he claimed that Tan was holding the shares on trust. Koh requested that the shares be returned along with interest and dividends received from the shares held since 2000. [20] Upon perusing Koh's original Counterclaim, Polyflo's involvement was not mentioned or pleaded, and no specific relief was sought against Polyflo in his Counterclaim. [21] This was the main grounds for Polyflo filing enclosure 17 to strike out the original Counterclaim, contending no reasonable cause of action against them. [22] However, upon realising the absence of any factual narrative on Polyflo's roles, Koh filed his Amended Defence and Counterclaim, stating, besides the transfer of shares by Tan, adding averments on the AGM held on 28.2.2022 and pleaded wrongful termination of his position as employee of Polyflo and further states that the termination was without just cause and excuse nor compensation. [23] Koh further asserts that his non-re-election had humiliated him, caused distress and mental anguish, and had an adverse impact on his ability to obtain other jobs/contracts in the oil and gas industry. Koh prayed for compensation/damages due to Polyflo wrongfully terminated him. [24] Having appraised the cause papers and both parties' written and oral submissions, I find that Koh's narrative in his Amended Counterclaim changed almost entirely regarding Polyflo's involvement from his original Counterclaim. Koh now seeks compensation or damages for the alleged unfair and unjust dismissal following his non-re-election. I am of the view that this is clearly an afterthought. [25] Be that as it may, following Koh's adjusted assertions, a question then arises as to whether Koh's failure to resort to the statutory remedy/provision of the Industrial Relations Act 1967 (IRA) is an abuse of the judicial process. [26] Upon perusing the amended Counterclaim, I find that it is clearly a challenge to the termination of Koh's employment by his alleged employer (Polyflo). He claims that he was dismissed without just cause or excuse, that the dismissal was unfair, and that he is entitled to be compensated under his alleged employment contract. This was narrated in his Counterclaim, and he seeks a consequential relief due to the alleged wrongful termination of his employment; therefore, Koh's Counterclaim against Polyflo is premised essentially on unfair dismissal. [27] An employee who claims to have been unfairly dismissed would pursue the statutory claim under s.20 (1) of the IRA. [28] Section 20(1) of the IRA reads as follows: "20. Representations on dismissals.

Where a workman, irrespective of whether he is a member of a trade union of workmen or otherwise, considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Director-General to be reinstated in his former employment; the representations may be filed at the office of the Director-General nearest to the place of employment from which the workman was dismissed." [29] In a recent Court of Appeal case of 7-Eleven Malaysia Sdn Bhd v Ashvine Hari Krisnan (2023) 3 MLJ 469, it was held: [44] The Industrial Court is a creature of the Act, which is in turn, a piece of social legislation, enacted as a speedy form of statutory remedy to resolve industrial disputes between employers and employees and trade unions. [45] In our view, having regard to the purpose for which the Act was enacted, it was wholly incumbent upon the Plaintiff, who complains that she had been constructively dismissed, to invoke the statutory remedy under the Act, instead of filing a civil action and claiming substantial damages of the type as stated in the Statement of Claim. .. [48] .. We would add that it does not follow that just because the Plaintiff chose not to go the Industrial Court, that she is ipso facto entitled to pursue her claim as pleaded in the Statement of Claim. .. [51] In our view, Fung Keong Rubber extols the benefits of pursuing the statutory remedy under the Act. Thus, the remedy for a dismissed employee like the Plaintiff, lies in the statutory dispute resolution process as envisaged by s.20(1) of the Act and thereafter to allow the statutory mechanism to take its course. [30] It is trite law that where a statute provides for a particular or specific remedy, it thereby deprives a person who insists upon a remedy of any other form of relief than that given by the statute. In the case of Manggai v Government of Sarawak & Anor (1970) 2 MLJ 41, the Federal Court had quoted several common law authorities, which stated on the relevant issue as follows: "It is well settled law that the Court will not make a declaratory judgment where an adequate alternative remedy is available (see Halsbury's Laws of England, 3rd ed. vol 22, page 749, para 1611). To quote but a few authorities in support of that proposition, Lord Herschell said in Barraclough v. Brown: [1897] AC 615,

It was argued for the appellant that, even if not entitled to recover the expenses by action in the High Court, he was, at all events, entitled to come to that Court for declaration that on the true interpretation of the statute he had a right to recover them. It might be enough to say that no such case was made by the appellant's claim. But, apart from this, I think it would be very mischievous to hold that when a party is compelled by statute to resort to an inferior Court he can come first to the High Court to have his right to recover - the very matter relegated to the inferior court-determined. Such a proposition was not supported by authority, and is, I think, unsound in principle. In Pasmore v. The Oswaldtwistle Urban District Council [1898] AC 387, 394 Earl of Halsbury LC said: .... The principle that where a specific remedy is given by a statute, it thereby deprives the person who insists upon a remedy of any other form of remedy than that given by the statute, is one which is very familiar and which runs through the law." In the more recent case of Wilkinson v. Barking Corp [1948] 1 KB 721, 724 Asquith LJ said: ... It is undoubtedly good law that where a statute creates a right and, in plain language, gives a specific remedy or appoints a specific tribunal for its enforcement, a party seeking to enforce the right must resort to that remedy or that tribunal, and not to others." [31] Accordingly, on this issue alone, I find that Koh's Counterclaim is an abuse of the Court process. He had commenced this action in the wrong forum to circumvent relevant laws relating to the alleged termination of employment, which provide for the Industrial Court to have exclusive jurisdiction and the proper avenue as in section 20 of the IRA. [32] Koh should not be allowed to bypass statutory remedies as per the IRA easily. The relief sought by Koh for compensation or damages was relief that was within the jurisdiction of the Industrial Court. If allowed, it would usurp the statutory role, function and jurisdiction of the Industrial Court and would be tantamount to an abuse of process. [33] In addition, I refer to the case of Sim Siew Guat v Champsurf Sdn Bhd (2022) MLJU 1560, which took guidance from the decision of the Federal Court in the case of Manggai and quoted as follows: "[17] This court finds that parties seeking to enforce rights regarding employment must resort to the relevant tribunal, which in this case, Act 177 defines "court" as Industrial Court and not to this Court. By ignoring or disregarding this principle, it would defeat the intention of the Parliament to enact the IRA, whose prime purpose is to ensure speedy disposal of cases." [34] Therefore, I agree with Polyflo's submission that when IRA is pleaded, the matter instantly becomes unsustainable and shall not be litigated before this Court. [35] For completeness, with regard to other issues raised, whether facts raised by Koh require evidence to be taken from witnesses and, therefore, his claim should not be struck out summarily, I find that allegation of an issue does not make it triable or need to be proven at trial. Koh's averment regarding Tan's shareholding has nothing to do with Polyflo. [36] It is pertinent to note that Tan's holding of shares is still a live issue and was allowed to be litigated at the trial because Tan's application to strike out (enclosure 71) was heard and dismissed. Eventually, Koh is allowed to proceed against Tan as initially pleaded in his original Counterclaim and later maintained in his Amended Counterclaim. I see no prejudices against Koh on his alleged rights, but he should not be allowed to drag Polyflo unnecessarily just to claim something from the company. [37] The fact that Polyflo had not objected to Koh's application to amend his Counterclaim earlier, I am of the view that it cannot be used to indicate or amount to a waiver or estoppel from raising it up again in support of Polyflo's application to strike out. Conclusion [38] After hearing both parties, I agree with Polyflo that Koh's original Counterclaim does not disclose reasonable cause of action against Polyflo. Even after considering the Amended Defence and Counterclaim, I find that the wrongful termination is now pleaded on the wrong forum. The appropriate jurisdiction would be a complaint to the Director General of Industrial Relations for adjudication of the matter at the Industrial Court. Failure to do this is an abuse of the court process. [39] Therefore, Polyflo's application to strike out the Amended Counterclaim against them is hereby allowed at a cost of RM3,000, subject to the allocator fee. Dated this: 22nd November 2024 ~ signed ~ (NOOR HAYATI BINTI HAJI MAT) Judge Shah Alam High Court NVCV 9 Counsels: For the Plaintiff (in the Counterclaim): Zulaikha Aini Messrs Zulaikha Aini For the 1st Defendant (in the Counterclaim):