Seow Hoon Hin v Hartalega Holdings Berhad & 4 Lagi (W-02(NCC)-102-01/2015)

1 IN THE COURT OF APPEAL, MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: W-02(NCC)-102-01/2015 BETWEEN SEOW HOON HIN … APPELLANT AND

1. HARTALEGA HOLDINGS BERHAD

2. HARTALEGA SDN BHD

3. KUAN KAM HON @ KUAN KAM ONN

4. KUAN KAM PENG

5. CHING HEAN CHONG … RESPONDENTS [In the Matter of the High Court of Malaya at Kuala Lumpur (Commercial Division) Civil Suit No.: 22NCC-368-2011 Between Seow Hoon Hin … Plaintiff

1. And

2. Hartalega Holdings Berhad

3. Hartalega Sdn Bhd

4. Kuan Kam Hon @ Kuan Kam Onn

5. Kuan Kam Peng Ching Hean Chong … Defendants] CORAM: TENGKU MAIMUN TUAN MAT, (then JCA) ZALEHA YUSOF, JCA MARY LIM THIAM SUAN, JCA 2 JUDGMENT OF THE COURT [1] The appellant’s claim against all five respondents at the High Court was dismissed after a full trial. If he is successful before us, his claim will have to be remitted to the High Court for assessment of damages. [2] The parties will be referred to as they were before the High Court. The plaintiff claimed that the five defendants are in breach of trust, breach of fiduciary duty, breach of contract, and had conspired to injure him and has sought various declaratory orders and damages against them, individually and separately, and jointly and severally. The parties [3] The 1st defendant, Hartalega Holdings Berhad, is a company that has been listed on the Main Board of the Kuala Lumpur Stock Exchange since 17.4.2008. It was incorporated on 24.7.2006. [4] The 2nd defendant, Hartalega Sdn Bhd was incorporated on 12.9.1981. Its main activity is the production of rubber gloves. It has been producing rubber gloves since 1989. On 7.5.2007, it became a wholly owned subsidiary of the 1st defendant. [5] The 3rd and 4th defendants, who are brothers, together with one Wong Kin Seng @ Wong Kim Seng [Wong] and the 5th defendant are 3 majority shareholders and directors of the 2nd defendant. The 5th defendant however retired as director in 2009. The 3rd defendant has been a director of the 2nd defendant since 31.10.1987. When the 2nd defendant was incorporated, the 3rd defendant held 3,577,306 [22.8%] shares of its issued capital. The 4th defendant on the other hand, holds 2,811,919 [17.9%] shares in the 2nd defendant. The 3rd defendant is also a shareholder of the 1st defendant, and has been its director and Managing Director since 7.5.2007. [6] The plaintiff is a shareholder of the 1st defendant. But, that was not how it started. The plaintiff’s case [7] The facts relating to the plaintiff’s claims go back to 1990. They are fairly detailed and require setting out. [8] According to the plaintiff, sometime that year, the 3rd defendant together with Wong, the 2nd defendant’s employee visited him at his factory in Petaling Jaya. At that time, the plaintiff was a director and shareholder of MLB Sdn Bhd [MLB], a company that manufactured latex examination gloves [rubber gloves]. MLB had two manufacturing lines that used the hot oil boiler heating system in the drying process to manufacture the rubber gloves. [9] The plaintiff claimed that the 3rd defendant showed keen interest in the plaintiff’s boiler system leading to both the plaintiff and the 3rd 4 defendant agreeing to a joint venture whereby the plaintiff would, as his capital contribution, transfer his two manufacturing lines with the boiler system to a proposed joint venture entity. The 3rd defendant’s contribution was the transfer of one existing manufacturing line installed at the 2nd defendant’s factory, to the new entity. The plaintiff claimed that the 3rd defendant further agreed that the plaintiff was to have 49% shareholding in the new entity. [10] The plaintiff claimed that in July 1990 and on the suggestion of the 3rd defendant, he gave up his business premises in Petaling Jaya and he relocated his two manufacturing lines to the 2nd defendant’s premises in Kepong. The plaintiff claimed that at the same time as relocating his two manufacturing lines, he had also handed over spare parts for two incomplete production lines that MLB had purchased from Nanyang Chemical Company [Nanyang equipment] for temporary storage. The plaintiff claimed that because this equipment was incomplete, he intended to return them to Nanyang and seek a reimbursement of RM250,000.00 since his production line had closed. [11] The plaintiff claimed that relying on the 3rd defendant’s representation that he will keep the equipment in the custody and control of the 2nd defendant, he had, through the 3rd defendant, handed over the Nanyang equipment to the 2nd defendant. The Nanyang equipment were placed in containers and delivered to the 3rd defendant’s custody at the 2nd defendant’s factory in Kepong. In support of such delivery, the plaintiff tendered invoices which carried the acknowledgement of receipt signed by the 3rd defendant’s sister who was the 2nd defendant’s company secretary. It is the plaintiff’s case that the 2nd and 3rd 5 defendants were trustees or constructive trustees of the Nanyang equipment for which he was the beneficial owner. [12] In 1992, the plaintiff went to the 2nd defendant’s new factory at Batang Berjuntai to take back the Nanyang equipment. There, he discovered that there were five production lines at the 2nd defendant’s factory. He surmised that one of the production lines was the 2nd defendant’s; two were his; and the remaining two were his Nanyang equipment which he now goes on to describe as the “Nanyang lines”. [13] The plaintiff claimed that the 2nd defendant, acting by the 3rd defendant, had in “flagrant breach of trust” utilized, inter alia, the Nanyang lines to assemble another two manufacturing lines for the manufacture of the rubber gloves utilizing the same hot oil boiler system as the plaintiff. The plaintiff claimed that the Nanyang lines were handed over to the 3rd defendant for safe keeping but were instead installed by the 3rd defendant in the 2nd defendant’s factory without his permission. [14] The plaintiff claimed that the 3rd defendant is in breach of his promise to him by not setting up the separate entity, that the 3rd defendant instead caused the 2nd defendant to issue to the plaintiff in 1991, 174,000 new shares as his capital contribution having regard to the relocation of his two manufacturing lines to the 2nd defendant. This allotment represented 20% of the 2nd defendant’s paid up capital while the 3rd defendant, his nominees and the 4th defendant held 70.4% of the issued shares in the 2nd defendant. 6 [15] It is the plaintiff’s case that the 2nd defendant, as trustee of the Nanyang lines had in breach of the trust, converted the same for their use and had acquired proceeds and/or profits from the assembly of the Nanyang lines for an additional two lines of production. Consequently, the 2nd defendant had acted dishonestly, had been unjustly enriched and continued to be unjustly enriched; and must now be accountable to the plaintiff for all the proceeds and/or profits which the 2nd defendant, as his trustee, had made from the conversion. [16] It is the further allegation of the plaintiff that the 3rd defendant has knowingly assisted in the breach of trust as he: i. knew that the Nanyang equipment were subject to a fiduciary duty by the 2nd defendant; ii. assisted in the 2nd defendant’s breach of fiduciary duty; and iii. was dishonest in knowingly assisting the said breach of fiduciary duty. [17] The next principal allegation of the plaintiff concerns a dilution of his shareholding in the 2nd defendant. [18] On 19.8.1994, at an EGM of the 2nd defendant, it was resolved and passed to increase the paid up capital of the 2nd defendant by way of a rights issue of new ordinary shares to members on the basis of 4 new ordinary shares for every 5 existing shares held at an issue price of RM1.10 per share at a date to be determined by the directors. It was also resolved that for the rights entitlement of Wong, director, to apply for 155,904 new ordinary shares, approval be given to him to subscribe 7 for his rights entitlement, either partially or wholly at any time over a period of 24 months. [19] The plaintiff’s claim is that this rights issue was carried out for the dominant purpose of diluting his shareholding in the 2nd defendant as the 2nd defendant had sufficient funds for its business operations and expansion. He also did not profit from the exercise. At the material time, the plaintiff’s shares were said to be valued at RM1.30 per share but the offer price of the rights issue was at RM1.10 per share, a value which the plaintiff alleged was an undervalue. [20] The plaintiff nevertheless subscribed for 389,760 shares amounting to RM428,736.00. Three cheques were forwarded in payment for the subscription. One of the three cheques was however, not cleared; the plaintiff claimed it was due to a clerical error. [21] That cheque was returned vide letter dated 13.10.1994 by the 2nd defendant’s company secretary. No replacement cheque was requested. Regardless, the plaintiff claimed that he had informed the company secretary that he would resolve the problem. [22] The plaintiff alleged that at the behest of the 3rd defendant, the company secretary informed the plaintiff vide a “backdated letter dated 13.10.1994”, that since rights issue must be paid on time, as a result of his default, his rights entitlement was accordingly reduced. Consequently, the plaintiff claimed that he was deprived from acquiring 181,578 shares in the 2nd defendant. 8 [23] With this exercise, the plaintiff’s shareholding in the 2nd defendant was reduced from 20% to 16.27%. The plaintiff claimed that the rights issue was, “discriminatory” as the time frame given for the subscription varied from shareholder to shareholder. [24] The 181,578 shares were subsequently taken up by the 3rd defendant. The plaintiff claimed that this was wrongful, that the 3rd defendant held these shares as a constructive trustee for him and that the 3rd defendant was therefore liable to account to him for the gain made together with all dividends paid on these shares. [25] The next issue concerned the proposed listing of the 2nd defendant on the Second Board of the KL Stock Exchange in 1996. [26] In September 1995, the 3rd defendant, as Managing Director of the 2nd defendant informed all shareholders, including the plaintiff, of the proposal to list the 2nd defendant on the KLSE. The plaintiff and other relevant shareholders were also informed by the 3rd defendant that certain portions of their shares, 333,037 shares in the case of the plaintiff, had to be transferred to two Bumiputera investors, but the plaintiff will remain as beneficial owners of those transferred shares. In the event the listing failed, the shares would be retransferred to the original shareholders. [27] The plaintiff, qua shareholder decided to participate in the exercise on the condition that the issue of his beneficial rights and “his loss due to the dilution of his shareholding in 1994” was settled by the 2nd and/or 3rd defendants, prior to such listing. Towards this end, the plaintiff gave the 9 3rd defendant a Power of Attorney and handed over the original share certificates of his shares. On 28.9.1995, the 3rd defendant, as attorney, transferred the plaintiff’s 333,037 shares in the 2nd defendant and on 20.10.1995, the shares were registered as follows: i. 184,300 shares to one Ashaari bin Ramli; and ii. 148,737 shares to one Azman bin Dahlan. [28] The plaintiff’s complaint here is that when the listing was aborted, his shares were not retransferred back to him until 20.3.2000. Since he remained the beneficial owner of the shares, he was entitled to dividends from 31.3.1997 to 31.3.2000. [29] The plaintiff relied on the draft working paper dated 20.3.1996 prepared in anticipation of the listing exercise which purportedly showed the plaintiff had 695,382 shares representing 16.27% of the issued share capital in the 2nd defendant. Thus, he was supposed to receive 2,224,662 shares in the new public listed company upon listing. [30] The plaintiff gave his version as to why the listing exercise was aborted. At paragraph 15.9 of the Amended Claim, he claimed that he had requested the 3rd defendant to settle the issue of his beneficial rights and loss due to the dilution of shares in 1994. Until that was resolved, he would not sign the statutory declaration required of the shareholders for the listing exercise. The plaintiff claimed that the 3rd defendant had represented and/or promised the plaintiff that he would be compensated accordingly. 10 [31] Despite this representation, by letter dated 29.10.1996, the 3rd defendant demanded the plaintiff to execute the statutory declaration by 5 p.m. of 1.11.1996 failing which the plaintiff would be deemed no longer interested in the listing exercise and that his shareholding would not be included in any restructuring exercise carried out to facilitate the completion of the listing. The plaintiff did not sign the declaration and at an EGM of the 2nd defendant held on 5.12.1996, it was decided that the plaintiff’s refusal left the members no alternative but to abandon the listing exercise. The plaintiff claimed that that was an irrational conclusion, that it was the 3rd defendant’s willful refusal to resolve the issues mentioned by the plaintiff that was the cause of the abandonment of the listing exercise. [32] In May 1997, the share certificates were returned to the plaintiff. On 15.10.1999, the plaintiff took steps to retransfer his 333,037 shares into his name. That was effected on 20.3.2000. Be that as it may, the plaintiff claimed to be the legal and beneficial owner of 695,382 shares in the 2nd defendant, as shown in the draft working paper. [33] The next complaint relates to claims of unpaid dividends totaling RM488,765.25. It is the plaintiff’s claim that due to the discrepancies in the payments of dividends to him, there is now this outstanding sum which remains unpaid. The plaintiff claimed that the 2nd defendant now holds the aggregate of these unpaid dividends on trust for him. The plaintiff has also turned to the 3rd defendant to recover this payment, claiming that the 3rd defendant is equally liable as constructive trustee and because he knowingly assisted the 2nd defendant, the trustee of the unpaid dividends in withholding such payments, breaching its fiduciary 11 duty to the plaintiff and was dishonest in knowingly assisting that breach of fiduciary duty. [34] Moving on to the next complaint, that there was a further dilution of his shareholding, this time in 2005. [35] At paragraph 17.4 of the Amended Statement of Claim, the plaintiff alleged that at the behest of the 3rd defendant, an EGM was held on 9.5.1997 where it was resolved that the authorized share capital of the 2nd defendant be increased from RM10 million to RM25 million. It was further resolved that approval be given to the directors of the 2nd defendant to issue 6,557,198 ordinary shares of RM1.00 each by way of provisional allotment to registered shareholders on the basis of 3 new ordinary shares for every 2 existing ordinary shares held. [36] At this point in time, the plaintiff’s 333,037 shares had yet to be reregistered in his name. The plaintiff claimed that the issuance of the new shares was an attempt and a collusion by the 3rd to the 5th defendants to further dilute his shareholding in the 2nd defendant as such issue was unnecessary given that the 2nd defendant had sufficient funds for its operational and expansion needs; that the 3rd defendant’s failure to retransfer his shares was in order to deny him, the plaintiff, the right to take up the new shares based on his shareholding. [37] Because the plaintiff dissented to the resolutions at the EGM, the plaintiff did not take up the rights issue. This resulted in a dilution of his shareholding from 16.27% to 6.28%. The plaintiff is claiming compensation for this loss. 12 [38] The plaintiff further claimed that he was wrongfully deprived the right to take up new shares which were issued pursuant to a resolution passed at an EGM held on 6.8.2004. At this EGM, it was resolved that approval be given to the directors of the 2nd defendant to allot and issue 4,720,000 new shares at the price of RM3.80 per share by way of a special issue to such investors identified by the directors of the 2nd defendant from time to time and upon such terms and conditions as the directors of the 2nd defendant may deem fit. These 4,720,000 new ordinary shares in the 2nd defendant shall upon allotment and issue rank parri passu in all respects with the existing ordinary shares in the 2nd defendant. [39] Despite the plaintiff’s proxy questions and objection on the proposed resolution at the EGM, the resolution was carried. The plaintiff claims that the resolution is null and void and of no legal effect as it contravenes the provisions of the Companies Act 1965; alternatively, the offer given orally to the proxy did not constitute a valid offer. [40] Once again, the plaintiff alleged that this allotment was not for the benefit of the 2nd defendant. Rather, it was part of the conspiracy and for the collateral and predominant purpose of the 3rd to the 5th defendants to injure the plaintiff by shifting voting control and further diluting the plaintiff’s shareholding in the 2nd defendant from 6.28% to 4.43%. [41] The final allegation concerns the listing of the 1st defendant on Bursa Malaysia Securities Berhad. 13 [42] At the EGM of 15.3.2006, a resolution was carried which in essence gave approval to the 2nd defendant to undertake and implement a proposed scheme for the proposed listing of the 2nd defendant on Bursa Malaysia Securities Berhad and that the directors and/or Managing Director be authorized to do all acts, deeds and things necessary to give effect to and complete the proposed scheme. The plaintiff participated in the exercise. [43] On 22.9.2006, the plaintiff was informed by the 2nd defendant’s company secretary that a meeting was scheduled for 28.9.2006 wherein merchant bankers and relevant advisors would attend and provide details to the shareholders of the 2nd defendant on the sale of their shares in the 2nd defendant to a purchaser on reconstruction. The 3rd defendant facilitated the incorporation of the 1st defendant on 24.7.2006 as a holding investment company or vehicle to acquire all the shares of the 2nd defendant from its shareholders with shares in the 1st defendant in exchange but leaving a portion of the shares of the 1st defendant offered to the public upon listing. [44] According to the plaintiff, there were 16 such shareholders inclusive of the plaintiff. The price of shares in the 2nd defendant was said to be at RM7.90 per share while the shares in the 1st defendant was at the value of RM0.50 per share. [45] The 3rd defendant is alleged to have informed all the shareholders that they were required to execute a sales and purchase agreement prepared by Messrs. Lee Pereira & Tan for this purpose on the same day. 14 [46] On 28.9.2006, with a strict reservation of his rights, the plaintiff executed such an agreement. On 2.4.2007, the plaintiff’s solicitors confirmed delivery of the plaintiff’s share certificates to Messrs. Lee Pereira & Tan with the plaintiff’s reservations. [47] According to the listing prospectus of the 1st defendant dated 28.3.2008, 10% of the issued capital of the 1st defendant would, prior to listing, be offered for sale commencing 28.3.2008 and closing on 7.4.2008 for listing scheduled on 17.4.2008. 5 % of the issued capital would be offered for sale whilst another 5% would be reserved for sale to two categories: 1.65% would be reserved for application by eligible directors, employees of the Group and persons who had contributed to the success of the Group; whilst 3.34% would be placed out to identified investors by way of private placement. For the persons in the earlier category, the decision to allocate shares to them would be deferred until after the closing date in the event that the applications for shares exceed the availability for all applications received before 5 p.m. on 7.4.2008 and thereafter adopting the reasonable criteria on who was to take precedence. [48] The plaintiff claimed that he is one of the persons identified as having contributed to the success of the Group. He further claimed that pursuant to the agreement and prior to the listing of the 1st defendant, he received 10,745,000 shares in the 1st defendant representing 4.43% of the share capital in the 1st defendant. 15 [49] Relying on the information contained in the listing prospectus and the collective and individual assumption of responsibility for the accuracy of that information by the directors of the 2nd defendant, by letter dated 1.4.2008, the plaintiff notified the Board of Directors of the 1st defendant that he wished to apply to purchase the ordinary shares of the 1st defendant at RM1.80 per share and that he was entitled to do so under the category of persons who had contributed to the success of the Group and as an identified investor for private placement. [50] Vide letter dated 3.4.2008 from the underwriters of the listing, the plaintiff was notified that the 1st defendant had offered to place the plaintiff as an identified investor and that he was offered 500,000 Offer Shares at RM1.80 per share for the total consideration of RM900,000. The plaintiff duly paid this consideration and was allotted these 500,000 shares. [51] By letter dated 7.4.2008 sent to the Board of Directors of the 1st defendant prior to closing cut off time, the plaintiff applied for an additional 2 million shares under the same category as stated in his earlier letter of 1.4.2008. A bankers’ cheque of RM3.6 million was sent to the underwriters by 12.20 p.m. on 7.4.2008. He was however, informed by the underwriters that places for private placement had already been identified and in the event these were taken up, his bankers’ cheque would be returned. [52] On 8.4.2008, the plaintiff was informed that all private placement shares had been taken up. On 9.4.2008, the plaintiff sent a bankers’ cheque for RM3.6 million registering his protest to being refused 16 additional shares as the underwriters’ letter of 8.4.2008 made no mention of those who had contributed to the success of the Group. [53] By letter dated 11.4.2008, the Board of Directors informed the plaintiff that all private placement shares had been taken up by 5.00 p.m. on 7.4.2008 and the plaintiff’s bankers’ cheque was returned. By letter dated 16.8.2010, the plaintiff reiterated to the Board of Directors his protest which he wanted read at the EGM of the 1st defendant scheduled for 18.8.2010. [54] The plaintiff specifically alleged that the 3rd defendant, as the directing mind and will of the 1st defendant had de facto control of the Board of Directors of the 1st defendant, and “…for the predominant purpose of keeping substantial portions of the private placement shares with nominees to the exclusion of bona fides investors like the plaintiff, did so for the collateral purpose of wresting voting control” in the 1st defendant and rights accruing on the said shares; consequence of which is loss and damage to the plaintiff. [55] The plaintiff claimed that the prospectus was misleading and contained negligent misstatements; that he, as an existing shareholder had relied on the representations in the listing prospectus to apply for the additional shares. The representations and statements are alleged to have turned out to be untrue. [56] The plaintiff is thus suing the defendants jointly and severally, that they should be accountable to him for his beneficial rights in respect of all proceeds and/or profits which the 2nd defendant and/or the 3rd 17 defendant as the plaintiff’s trustee had made from the conversion of the Nanyang equipment together with the dividends that have remained unpaid to date. He has also sought specific remedies against particular defendants aside from a claim of compensation from all the defendants for his loss of shares: a. Against the 1st and 3rd defendants i. damages for negligent misstatement; ii. alternatively, damages for breach of statutory duty pursuant to sections 177, 179 and 357 of the Capital Markets and Services Act 2007 read together with inter alia section 214 of the Capital Markets and Services Act 2007; iii. interest on the damages ordered. b. Against the 2nd defendant i. declaration that the 2nd defendant is a trustee for the proceeds and/or profits made from the benefit and use of the Nanyang equipment; ii. declaration that the 2nd defendant is a trustee for the unpaid dividends amounting to RM488,765.25 due and owing to the plaintiff; iii. an order that the 2nd defendant account to the plaintiff for the proceeds and/or profits made from benefit and use of the Nanyang equipment and make restitution of the same to the plaintiff; iv. an order that the 2nd defendant account to the plaintiff for the dividends as aforesaid and make restitution of the same to the plaintiff; v. accounts and enquiries; 18 vi. interest on the profits and dividends. c. Against the 3rd defendant i. declaration that the 3rd defendant is a constructive trustee for the proceeds and/or profits made from the benefit and use of the Nanyang equipment; ii. declaration that the 3rd defendant is a constructive trustee for the unpaid dividends amounting to RM488,765.25 due and owing to the plaintiff; iii. equitable compensation for the proceeds and/or profits made from benefit and use of the Nanyang equipment; iv. equitable compensation for unpaid dividends amounting to RM488,765.25 due and owing to the plaintiff; v. damages for the tort of conspiracy to injure the plaintiff by depriving him of his right to subscribe for the additional 2 million shares in the 1st defendant during the public listing exercise in April 2008; vi. compensation for the loss of the value of the 181,578 shares in the 2nd defendant; vii. an account of all dividends and other benefits that accrued to the 3rd defendant from the 181,578 shares in the 2nd defendant; viii. interest; ix. exemplary damages. d. Against the 3rd – 5th defendants i. damages for the tort of conspiracy to injure in respect of the allotment of 4,720,000 shares in the 2nd defendant on 4.4.2005; ii. interest on such damages; iii. compensation for loss due to the wrongful allotment of the 4,720,000 shares in the 2nd defendant on 4.4.2005; 19 iv. damages for the tort of conspiracy to injure in depriving the plaintiff of his right to subscribe the additional 2 million shares in the 1st defendant during the public listing in April 2008; v. exemplary damages. The defendants’ case [57] Other than the 1st to the 3rd defendants who filed a common Defence, separate defences were filed by the 4th and 5th defendants. The learned Judge has summarized the defences collectively at paragraph 16 of her grounds. In this appeal, we will incorporate that summary when dealing with the defences in slightly more detail given the nature of the plaintiff’s claims. [58] The defendants’ principal contentions are as follows. First, the allegations of conspiracy, conversion, claims of trust and/or trusteeship, non-payment of dividends, breach of statutory duties are all denied on the basis of the underlying factual arrangements or circumstances, estoppel, limitation, and that the decisions were all made on a majority/collective basis by the respective boards of the 1st and 2nd defendants. [59] On the position of the respective shareholding, the 3rd defendant contended that save for the period between 31.10.1987 to 14.3.1988 when he acquired two promoter shares of the 2nd defendant and after the listing of the 1st defendant on 17.4.2008, he denied being the majority shareholder of either the 1st or 2nd defendants. Prior to 7.5.2007, the 3rd 20 to the 5th defendants also collectively never held the majority shares in the 2nd defendant. [60] As for how the parties met, the 3rd defendant claimed that it was one Liew Ben Poh [Liew], an employee of the plaintiff who introduced them in 1989. Liew later approached the 3rd defendant for help because the plaintiff had encountered production problems. The 3rd defendant and Wong identified the plaintiff’s problem as one of design of the assembly line itself, after visiting the plaintiff’s factory premises at section 51 Petaling Jaya. Apparently, the dipping bridge had a welded joint which caused vibration which in turn affected the production of the gloves. According to the 3rd defendant, the assembly lines also should not have used glaze former or mould for producing gloves. [61] On the matter of the closure of the plaintiff’s factory, it is the 3rd defendant’s case that this had nothing to do with any joint venture agreement. Rather, it was precipitated by the plaintiff’s own financial difficulties and business failure. [62] The 3rd defendant claimed that the joint venture was proposed not as between the plaintiff and the 2nd defendant but it was between the plaintiff and a company known as Hartalega Industries Sdn Bhd. The intent was to set up a company known as Hartalega Rubber Products Sdn Bhd [HRPSB]. HRPSB was supposed to take over the two assembly or production lines of the plaintiff and revive the closed down factory with the technical assistance and support of the 3rd defendant and Hartalega Industries Sdn Bhd. 21 [63] The new entity did not come to pass. A second meeting followed on 12.4.1990 at the office of accountants, Raja Salleh, Lim & Co. The meeting discussed the possibility of a joint venture, this time with Hartalega Industries Sdn Bhd through a new entity, Hartalega Rubber Products [HRP]. HRP will take over the plaintiff’s production line. [64] That joint venture was abandoned due to labour problems. According to the 3rd defendant, it was thereafter and upon the plaintiff’s request to invest in the 2nd defendant that the plaintiff came to hold shares in the 2nd defendant. Since the 2nd defendant was an ongoing business, the request was taken up with the shareholders who agreed to the subscription in consideration of the plaintiff’s transfer of the two production lines to the 2nd defendant and the payment of cash. [65] The 2nd and 3rd defendants contended that the plaintiff had agreed at the material time that he would, at his sole cost and expense, be responsible for the dismantling and reassembling of the two assembly or production lines at the 2nd defendant’s factory. While the plaintiff dismantled the two lines, he only reassembled one before he “disappeared” and “was nowhere to be seen”. The reassembled line was also without the required formers or moulds. The second line had to be reassembled by the 2nd defendant and it too, was incomplete. The two lines turned out to be “problematic from the start and could only operate after technical modifications were made, dysfunctional heaters replaced and the formers or moulds installed.” [66] In relation to the Nanyang equipment or “spare parts”, the defendants denied any delivery of the equipment or that the plaintiff had 22 entrusted them to the 2nd defendant. The defendants added that even if the Nanyang equipment had been delivered to the 2nd defendant, the existence of a trust, in any term or description, was denied. The defendants alleged that the claim was time-barred, whether founded in trust or conversion. [67] On the allotment of shares, the defendants contended that the 174,000 shares allotted to the plaintiff was upon the plaintiff’s request, as mentioned earlier following the abandonment of the joint venture. These shares were valued at a premium predicated on the value of the 2nd defendant’s shares and the value of the two production lines at the time of issuance of those shares. The plaintiff has been fully paid for his two production lines through the issuance of the shares. Any profit generated by the lines belongs to the 2nd defendant and are not held on trust for the plaintiff. [68] In respect of the rights issue in 1994, the 2nd defendant claimed that it was precipitated by its need for funds to facilitate its further business expansion. The defendants denied that the plaintiff was discriminated against on the issuance of new ordinary shares. The only person accorded the privilege of an additional allotment of shares was Wong, due to his unique and vital contributions. [69] Specifically, on the allegation concerning the reduction of the plaintiff’s subscription by reason of the returned cheque, the defendants contended that it was not due to a clerical error as claimed by the plaintiff, but due to the plaintiff having insufficient funds. This may be 23 seen from the bank’s endorsement on the back of the cheque - “Exceeds Arrangement”. [70] On the matter of the non-listing of the 2nd defendant in 1996 that was due to the plaintiff’s refusal to sign the statutory declaration, the defendants contended that that decision was not an irrational conclusion since it was a direct consequence of what the defendants described as the plaintiff’s “unreasonable and illogical behavior”. The prevailing regulatory requirements mandated that all substantial shareholders which would include the plaintiff to sign that statutory declaration form without which the listing exercise could not have proceeded. [71] As for the plaintiff’s complaint on the retransfer of the shares back to his own name, the defendants contended that it was incumbent on the plaintiff to do so himself once he received the share certificates in May

1997. The plaintiff’s retransfer done only in October 1999 was due to his own neglect, omission or delay. [72] The defendants further pleaded that in any event, it would have been impossible for the 2nd defendant to effect the retransfer of the 333,037 shares to the plaintiff by May 1997 since the plaintiff only released the relevant documents to the 2nd defendant’s company secretary vide his letter dated 15.10.1999. [73] On the matter of the plaintiff’s claim of beneficial ownership, the defendants contended that the Articles of Association of the 2nd defendant provided that the 2nd defendant was not bound to recognize such ownership; that the onus was on the plaintiff to ensure that he 24 received his dividends in respect of the 333,037 shares. Since the records show that the dividends were payable to Ashaari bin Ramli and Azman bin Dahlan, the plaintiff’s cause of action, if any, would be to recover the dividends against them, and not the present defendants. [74] Moving next to the EGM in 2004 where the capitalization exercise was approved and authorized, the defendants explained that at the material time, the 2nd defendant was undertaking massive expansion under Phase 2 and needed a substantial amount of funding, some RM38 million to be precise. There was no prior or any agreement to injure the plaintiff. At that time, the Board of Directors of the 2nd defendant had decided that the funding would not be structured as a rights exercise as it could not be undertaken by all the existing shareholders. [75] Despite that position, the 3rd defendant inquired with the plaintiff’s proxy who attended the EGM if the plaintiff was prepared to subscribe for more shares. The proxy had refused and/or was unable to respond due to mandate issues. [76] The 3rd defendant further contended that the share allocation decided at that EGM was in accordance with the 2nd defendant’s Articles of Association. Article 57 therein empowered the directors to allot shares in the 2nd defendant to such persons as the directors “think beneficial to the Company”. [77] On the allegation that there were dilutions of the plaintiff’s shareholding, that there was a “shifting” in the voting control, the defendants not only denied such allegations but contended that there 25 could not be any dilution or shifting in the voting control since the plaintiff never “controlled” the 2nd defendant “from day one certainly not through his 6.34% shareholding” [or 4.43%] interest. [78] At paragraph 86 of its Re-Amended Defence, the defendants contended that the “main cause of the plaintiff’s shareholding dilution had been his refusal in the past to subscribe for shares offered to him from time to time and arising from his dishonoured cheque as set out above.” [79] Moving next to the defendants’ response on the listing of the 1st defendant, aside from the fact that the 16 shareholders were given till 4.10.2006 to respond on the sales and purchase agreement concerning the sale of their shares in the 2nd defendant to the 1st defendant in exchange for shares in the 1st defendant, the defendants contended that it was the plaintiff who, on his own free will, signed the agreement on the very same day that he was given a copy of the agreement. [80] It was also the contention of the defendants that in any case, the listing exercise eventually prospered all shareholders of the 2nd defendant, including the plaintiff. [81] On the matter of the plaintiff’s subscription for more shares in the 1st defendant, the defendants explained at paragraph 104 of the Defence that the 3rd defendant “actually had sympathy for the plaintiff and went out of his way to cause for the allocation of the 500,000 shares to the plaintiff”, that the 1st defendant offered the plaintiff the 500,000 shares as 26 a “gesture of goodwill”, and that the plaintiff was the only shareholder who was given the privilege of subscribing for more shares. [82] The defendants further relied on the following: i. estoppel, that the plaintiff’s conduct including his participation in the second listing exercise is completely incompatible, inconsistent and incongruous with his current claims and allegations; ii. that the plaintiff was never identified or informed that he was within the category of persons who had contributed to the success of the Group; iii. that the plaintiff never contributed in any meaningful sense to the 2nd defendant’s success or that of the Group; iv. that the plaintiff did not hold any office in the 2nd defendant in the 20 years that he was a shareholder; v. that the plaintiff did not make any contribution whatsoever to the growth and prosperity of the 2nd defendant; vi. that the claims are time-barred. [83] Insofar as the 4th and 5th defendants are concerned, over and above defences which are substantially similar to those pleaded by the 1st to the 3rd defendants as discussed above, there are specific defences that require mention. [84] The 4th defendant pleaded further that: 27 i. the claim is an abuse of process; ii. he is not aligned to the 3rd and/or 5th defendants; iii. he did not act in accordance with the directions and instructions of the 3rd defendant; iv. he does not sit on the Board of Directors of the 1st defendant; v. the 3rd defendant is not the controlling mind and person behind the 2nd defendant nor does he have de facto control over the Board of Directors of the 2nd defendant; vi. he is unaware of any trust arrangement in respect of the Nanyang equipment and that the records of the 2nd defendant do not allude to any relationship of trustee-beneficiary between the 2nd defendant and the plaintiff; vii. the growth of the 2nd defendant was due to the constant innovation and substantial capital investment undertaken over the last 20 years. [85] The 5th defendant specifically pleaded that: i. he did not keep track of the shareholdings of the 3rd and 4th defendants in the 2nd defendant; ii. acted and decided on his own based on his own interest at Board meetings and at the relevant EGM; iii. he was never directed or instructed by the 3rd defendant in any manner as alleged by the plaintiff; iv. the plaintiff’s claim is scandalous, frivolous and is otherwise and abuse of the process of Court; 28 v. the plaintiff never opposed to the passing of the resolution agreeing to Wong being granted an approval to subscribe for his rights entitlement, either partially or wholly, nor did the plaintiff complain that the resolution was discriminatory at the material time; vi. the allegations are untrue; vii. since the plaintiff was the only substantial shareholder who had unreasonably and illogically refused to sign the statutory declaration for the listing of the 2nd defendant, it was “an irresistible conclusion that the plaintiff was the sole cause that the listing could not proceed and that there was nothing ‘irrational’ about this conclusion”. [86] Like the first three defendants, the 4th and 5th defendants, inter alia pleaded that the success of the 2nd defendant was not in any way due to the efforts and/or contributions of the plaintiff as he held neither an executive position nor assumed any other role other than that of shareholder of the 2nd defendant; and that the plaintiff had willingly and without reservation participated in the share allotments and proposed listing of the 2nd defendant at the material time. At the High Court [87] The plaintiff called two other witnesses other than himself to testify. Those two witnesses were the lawyers who had played specific roles in 29 the plaintiff’s claims. The 3rd defendant, on the other hand, testified on behalf of himself and for the first and second defendants. [88] The 3rd defendant’s evidence was subsequently adopted by the 4th and 5th defendants. This adoption has been criticized and challenged by the plaintiff, who argued that these defendants should have made a submission of no case to answer. Their counsel had argued that there was no need to take such a stand. These defendants had also filed witness statements during case managements. After the 3rd defendant had testified, they decided to adopt his evidence without themselves testifying. That course of action and the reference or reliance to the 3rd defendant’s testimony was also in issue. [89] As for the issues for determination, the learned Judge categorized them into three broad issues before dealing with the claim against the 4th and 5th defendants, and finally the issue of limitation: i. Issue 1 - Nanyang lines ii. Issue 2 – dividends iii. Issue 3 – plot or conspiracy relating to share capital increase in 2nd defendant for 1994, 1997, 2004, 2008 listing, application for accounts iv. Claim against the 4th and 5th defendants v. Time bar [90] After a full hearing, the learned Judge did not find the arguments in the plaintiff’s favour, ruling ultimately in all the defendants’ favour and dismissing the plaintiff’s claim. Hence, the appeal. 30 Our findings and deliberations [91] We propose to deal with the learned Judge’s conclusions and reasoning on the matters appealed on as we discuss our findings and deliberations on the same in this appeal, following the issues as categorized by the learned Judge. [92] We note from the “Speaking Note” and subsequently from the Final Reply on Appeal of learned counsel for the plaintiff certain matters that need to be addressed first. In the Speaking Note and this was developed in the Final Reply, two main points were articulated as forming the basis of this appeal, that there was erroneous judicial appreciation and misdirection and errors of law of these two central matters that require appellate intervention. [93] First, concerns the relationship of the parties, how it was treated, that there was a mischaracterization. Second, concerns the appreciation of the events that form the substratum of the plaintiff’s claim, that given the relationship of the parties, the events ought to have been considered as a consecutive story with reference to the pleaded case and factual matrix instead of as separate and individual events seen in isolation or in vacuum. [94] On the first concern, it was submitted that the “substantive complaint of the plaintiff against the judgment under appeal is that the learned Judge erred in law in treating the parties as standing in an ordinary business relation when the relationship in point of law was 31 fiduciary in nature.” In other words, there was a mischaracterization of the relationship. It was said to be a joint venture and that in law renders the parties as fiduciaries. Such erroneous evaluation and appreciation of the case and the issues are said to be grounds for appellate intervention. [95] Various authorities were cited in support on these principles including Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229; Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1; Govinda Mudaliar Sons v Govindasamy [1967] 2 MLJ 5; Bolton v Graham [1957] 1 QB 159; Meinhard v Salmon et al 164 NE 545 (NY 1928); Solid Investments Ltd v Alcatel-Lucent (M) Sdn Bhd (previously known as Alcatel Network Systems (M) Sdn Bhd [2014] 3 MLJ 785; Clemens v Clemens Bros Ltd & Anor [1976] 2 All ER 268. [96] According to learned counsel, the learned Judge had erred in looking at the form and not at the substance of the underlying relationship. Whilst accepting the “1990 document” as a joint venture, the learned Judge erred in treating it as a failed joint venture when the proposed joint venture company was not formed and because it was not a term of the joint venture that the 2 manufacturing lines should be transferred to the 2nd defendant. Learned counsel added that the existence of this document does not prevent the Court from holding that the document is a joint venture giving rise to a fiduciary duty – see Newacres Sdn Bhd v Sri Alam Sdn Bhd [1991] 3 MLJ 474. 32 [97] The learned Judge was also said to have failed to apply the proper legal test and that her approach was contrary to settled law. Her failure to do so is said to be a serious error that has occasioned a miscarriage of justice. It was the plaintiff’s submission that the right question to ask was whether the defence version is consistent with the probabilities of the case. Had that correct question been asked, Her Ladyship would have rejected the defendants’ version as improbable and accepted the plaintiff’s version. [98] The plaintiff’s version that ought to have been accepted was that the joint venture did not cease but the vehicle to carry out that intent was altered. Together with the plaintiff’s transfer of his two production or manufacturing lines to the 2nd defendant and the fact that there was no further document evidencing a change of the prior existing relationship, the Court ought to have drawn the irresistible inference that the relationship of joint ventures continued. The transferred 2 lines were said to be valued at RM1 million in 1990 and it was “highly improbable that a person will give away his property worth RM1 million which in 1990 was worth a substantial sum, and pay an additional sum of RM200,000 in exchange for RM36,000 worth of shares.” Learned counsel submitted that “that relationship imposed upon the 1st to the 3rd defendants a constructive trust that enured for the plaintiff’s benefit. Accordingly, the conscience of the defendants was bound by an obligation to act in utmost good faith towards the plaintiff.” [99] It was also submitted that insofar as the 49% interest in the 2nd defendant is concerned, the plaintiff’s claim is that he is a beneficiary under a constructive trust. This trust exists because of his contribution 33 as a joint venturer. He had contributed his 2 manufacturing lines in expectation created by the 3rd defendant of receiving 49% in the 2nd defendant at the time the joint venture was created. The plaintiff only became shareholder of the 2nd defendant based on the joint venture between the plaintiff and the 3rd defendant who was directing mind and will if not the alter ego of the 1st and 2nd defendants. The allocation of 20% shares was alleged to be a breach of the terms of the joint venture. It was submitted that the defendants were thus not entitled to treat the plaintiff as a mere shareholder; the defendants were “fiduciaries and constructive trustees” who were obliged not to act against the plaintiff’s interests or cause wrongful gain to themselves. [100] The second concern was that “given the nature of this case”, judicial appreciation required the Court to consider the events over a period of time with reference particularly to the relationship just discussed; a holistic and not almost snap shot considerations of that relationship and the complaints raised. The case of Bounty Dynamics Sdn Bhd (formerly known as Media Development Sdn Bhd) v Chow Tat Ming & 175 Others [2016] 1 MLJ 507 was cited in support. [101] In oral reply submissions before us, the defendants impressed upon us their difficulty in responding to the submissions of the plaintiff because his case has “shifted and evolved”. The line of submissions has departed from the pleaded case, the evidence led at trial and the submissions made before the High Court as well as the written submissions made in this appeal. 34 [102] While the arguments in principle are valid concerns in any appeal and we would have no hesitation in wading in, if established; these submissions are unfounded and of no merit in this appeal. [103] We have examined the pleaded case very carefully, and we do not agree with the plaintiff’s contentions. We do not see any mischaracterization of the relationship by the learned Judge. In fact, the understanding and appreciation by the learned Judge is supported by the plaintiff’s own oral testimony at trial, the contents of the so-called 1990 document itself, the testimony of the 3rd defendant, and the plaintiff’s own subsequent conduct. [104] First, the plaintiff’s own pleaded case refutes that line of submission. There is no claim to this effect. Although parties are only required to plead material facts with the legal consequences of such facts to be matters for the Court to adjudicate upon as pronounced in Superintendent of Lands and Surveys (4th Division) v Hamit bin Matusin [1994] 3 MLJ 185 and that the parties cannot be taken by surprise as trials are not of ambush (see Ang Koon Kau v Lau Piang Ngong [1984] 2 MLJ 277 and Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamay s/o Pennusamy & Ors (on their behalf and for the 213 sub-purchasers of plots of land known as PN35553, Lot 9108, Mukim Hutan Melintang, Hilir Perak) & Other Appeals [2015] 1 MLJ 773], the underlying facts and allegations are nevertheless material to that adjudication. [105] In this appeal, the plaintiff’s pleaded case on the joint venture can be found at paragraph 13 of the Amended Statement of Claim. There 35 are no allegations that the parties, whether it be the 2nd or the 3rd defendant, had always intended to set up a joint venture in any form or degree. On the contrary, the allegation is specific – see paragraph 13.4 where the plaintiff alleged that the 3rd defendant agreed with the plaintiff to set up a joint venture whereby the plaintiff would transfer his two manufacturing lines with its boiler system “to a proposed joint venture entity as capital contribution on his part.” In turn, the 3rd defendant was to transfer the existing manufacturing line installed in the 2nd defendant to the said proposed joint venture entity as well. The 3rd defendant agreed that the plaintiff was to have 49% shareholding in the proposed joint venture entity. [106] At paragraph 13.11, the plaintiff claimed that the 3rd defendant in breach of his promise, “did not set up a separate entity to run the manufacturing lines”. Instead, the 3rd defendant caused the 2nd defendant to issue to the plaintiff 174,000 new shares in the 2nd defendant as the plaintiff’s capital contribution having regards to his relocation of his 2 manufacturing lines to the 2nd defendant. The 174,000 shares represented 20% of the paid-up capital of the 2nd defendant. [107] This allegation is specifically traversed and denied by the 1st to the 3rd defendants; that the agreement to set up a joint venture was never between the parties as claimed by the plaintiff, but between the plaintiff and Hartalega Industries Sdn Bhd, that the intention as alluded to in paragraph 62 was to set up a company to be known as HRPSB, and that the transfer of the plaintiff’s existing two lines was as a result of his investment in the 2nd defendant. 36 [108] At the trial, these two versions on the joint venture were proffered by the respective parties. And, even then, the version ran by the plaintiff was not accepted by the Court. The Court accepted the defendants’ version and it was not without basis. The two versions of the joint venture was never on the matter of form or labelling of the relationship or about the intention of the parties to always form a joint venture. [109] There is also the “1990 document” [exhibit D138] itself which we have examined and which we find bears up to the defendants’ version. This document is actually the minutes of the meeting held between the parties [see page 504 CBD2/3]: Minutes of the Meeting between Mr. Errol Seow of MLB Holdings Sdn. Bhd. of one part and Mr. Kuan Kam Hon Hartalega Industries Sdn. Bhd. (HI) of other part at the office of Raja Salleh, Lim & Co., No.6B, 2nd Floor, Bangunan G.G.I., Jalan Ampang, 50450 Kuala Lumpur on 12th day of April, 1990 at 3.00 p.m.

1. Forming of new Company: It has been agreed that a new Company by the name of Hartalega Rubber Products Sdn. Bhd. (HRP) is to be incorporated. The issued share capital will be 1,125,000 shares of $1 each.

2. Equity: 51% - HI 49% - Mr. Errol Seow and his nominees. HRP will take over the plant and machinery of MLB Holdings Sdn. Bhd. valued at $1 million out of which $875,000 will be satisfied by the issue of shares in HRP and the balance of $125,000 to be settled in the manner set out below and HRP will also take over the plant and machinery valued at $250,000 from HI.

3. Transfer of Shares: Mr. Seow agreed to transfer subsequently his shareholdings of 323,750 to HI for a token value of $1. 37

4. Ultimate share structure of HRP: Hartalega Industries S/B – 573,750 shares of $1 Mr. Errol Seow and his nominees – 551,250 shares of $1 1, 125,000 ========

5. Directorate: Messrs. Kuan Kam Peng, Kuan Kam Hon, Errol Seow and Mrs. Seow will be appointed as directors of HRP.

6. Managing Director: Mr. Kuan Kam Hon is to be appointed as Managing Director of HRP and his appointment will not be subject to removal.

7. Advance: Mr. Seow will advance $100,000 to HRP as soon as HRP is incorporated. HI will also advance $100,000 to HRP in the form of receivables or stocks which ever Mr. KKH deems fit.

8. Transaction Period: The position of HI and MLB will remain status quo, and that the current operating expenses of MLB should not be borne by HRP.

9. Try-out period: During the initial period, when HRP operates on one line, the rental of factory premises will be borne by Mr. Seow, and as soon as HRP operates the second line, rental will be fully borne by HRP.

10. Repayment of Loan: The outstanding balance for the machinery taken over of $125,000 will be paid to Mr. Seow out of the profit by HRP in the proportion of 2/3. [110] These minutes form the contemporaneous record of the underlying intention and agreement of the parties. The minutes reveal that the parties, the plaintiff of MLB and the 3rd defendant of Hartalega Industries Sdn Bhd had agreed to form a new company on very specific terms and conditions. It is undisputed that the new company was never formed. The plaintiff submits that it was always the intention of the parties to form a joint venture, the vehicle may change but that intention remained. 38 [111] We should not over-read that agreement, it would be highly improper to do so as seen from the line of authorities from the Federal Court including Berjaya Times Square Sdn Bhd [formerly known as Berrjaya Ditan Sdn Bhd v M Concept Sdn Bhd [2010] 1 MLJ 597; SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464. [112] There is also the fact that the 2nd defendant was already incorporated at the time of the discussions between the parties. An exercise or arrangement wherein the plaintiff was to become the joint venture partner in the 2nd defendant would surely be reflected in the corporate records and annual accounts and statements of the 2nd defendant. There are none. [113] This evidence together with the issue of shares in the 2nd defendant to the plaintiff without any complaint for over almost 20 years prior to the filing of the claim are silent but overwhelming evidence against the plaintiff’s claim on the joint venture. The evidence irrefutably show that the plaintiff stood, at the material time, as shareholder and not in joint venture with the defendants. [114] As for the manner in which the learned Judge appreciated the claim, that it was taken in isolation and not seen as a whole and proving the plaintiff’s claim, that complaint is similarly without merit. The very nature of the plaintiff’s claim required the learned Judge to examine each of those signposted events in the manner that she did. At no time did Her Ladyship lose sight on what the plaintiff’s claim was all about. 39 As urged by the plaintiff in this appeal, we will similarly examine those complaints. Issue 1 - Nanyang Nanyang lines / Nanyang Equipment [115] The plaintiff appellant has referred to this as the “stored parts” or the “Nanyang lines”. The main remedies sought against the 2nd defendant in this respect are as follows: i. declaration that the 2nd defendant is a trustee for the proceeds and/or profits made from the benefit and use of the Nanyang equipment; ii. an order that the 2nd defendant account to the plaintiff for the proceeds and/or profits made from benefit and use of the Nanyang equipment and make restitution of the same to the plaintiff. [116] Similar orders are sought against the 3rd defendant save that it is made on the basis of a constructive trust. [117] The specific defence to this claim is a denial of receipt and holding in trust of these spare parts, that there is no trust arrangement between the parties; hence there is no breach of trust. The defendants further related how the parties came to be involved with one another and how the plaintiff’s two production lines were dismantled and reassembled at the 2nd defendant’s premises; that the reusable parts of the two lines 40 became spare parts; that the plaintiff’s lines were paid for through the issuance of 174,000 shares by the 2nd defendant; and that the claim was time-barred. [118] The learned Judge treated this issue by asking three questions: i. whether the Nanyang lines had been transferred to the 2nd defendant; ii. if the lines had been transferred whether the 2nd and 3rd defendants held the lines as constructive trustees for all the benefits and revenue received from the use of these lines; iii. whether the claim in relation to the revenue or benefits resulting from such use is time-barred. [119] Having looked at the original text of the grounds of decision, we find that the learned Judge posed the second question as thus – if the lines had been transferred, whether the 2nd and 3rd defendants hold the benefit and revenue from the use of the Nanyang lines as constructive trustees. [120] The learned Judge found that the plaintiff had not proved his claim under sections 101 and 102 of the Evidence Act 1950 for the following reasons: i. it was the responsibility of the plaintiff to prepare a comprehensive list of the Nanyang equipment or inventory and to request the 2nd or 3rd defendant or their 41 representatives to acknowledge receipt by signing on the inventory or list; ii. the plaintiff did not prepare such an inventory or list; iii. the plaintiff did not manage the dismantling, delivery and reinstallation at the premises of the 2nd defendant as agreed; iv. the plaintiff left it to the transport company to confirm that the containers allegedly containing the Nanyang equipment were brought to the 2nd defendant’s factory and handed over to the 2nd defendant through the 2nd or 3rd defendant’s representative; v. the remark on the invoice number 9115 IP3A [exhibit P3A] which reads “Consignee Name – Hartalega S/B (Nanyang Lines) was inadequate because there was no verification by way of an inventory of the contents of the container; vi. the discrepancies between exhibits 3A and 3B were not explained; vii. the original document [exhibits 3A and 3B] were not produced for verification; viii. no witnesses from the transport company were called to confirm that the containers allegedly containing the Nanyang equipment were delivered to the 2nd defendant’s factory and handed over to its representative. [121] The learned Judge took the position that the burden was on the plaintiff to prove that the Nanyang lines were put into the containers and delivered to the 2nd and 3rd defendants. The plaintiff must produce strict evidence to prove his case. Since delivery was not proved, the issue of trust, constructive trust and conversion does not arise. 42 [122] In the appeal before us, learned counsel argued that these findings were incorrect because there was ample evidence within the case of the 1st to the 3rd defendants to support an irresistible inference that the Nanyang equipment had been delivered to the 2nd defendant. That evidence being exhibits 3A and 3B, and the testimony of the 3rd defendant. [123] It was submitted that the learned Judge also seriously misdirected herself in law when Her Ladyship dealt with the issue of the Nanyang lines as a matter relating to the burden of proof when all she was required to do was to draw the proper inferences from the totality of the evidence before the Court. In any case, the Court’s evaluation of the evidence was flawed because there was inter alia no reference to the 3rd defendant’s sister or to the 2nd and 3rd defendants’ failure to call that sister to testify. The documents before the Court were also not examined with the care required of a judicial tribunal. Further, there was no critical analysis of the discrepancies in the evidence given by the 3rd defendant. [124] According to learned counsel, there were contradictions in the case for the 1st to the 3rd defendants. In the Defence filed, these defendants had pleaded that the transfer of the assembly lines was supervised by Wong. Yet, in a witness statement prepared for Liew, Liew said that he supervised the transfer. Both Wong and Liew were not called to testify. The plaintiff submitted that Liew’s witness evidence was admissible and available for use as another version of an event as the statement was filed and served and the learned Judge erred in ruling 43 otherwise. The application of the burden of proof by the learned Judge was thus said to be misconceived. [125] Learned counsel further submitted that the learned Judge was wrong in holding that the plaintiff had failed to prove the trust property. The learned Judge had treated the plaintiff’s case separately from that of the defendants and asking whether the plaintiff had discharged his burden. The correct question the learned Judge should have asked herself is whether on the totality of the evidence, it was a fair inference that the Nanyang lines had been delivered to the 2nd defendant. Based on the material before the Court, that question would have received an answer adverse to the 1st to the 3rd defendants. The Nanyang lines admittedly received by the 3rd defendant’s sister was the trust property. [126] With respect, we disagree. Discussing and reminding herself on the burden of proof and who bears that burden is not erroneous on the part of the learned Judge. Having carefully examined the reasoning of the learned Judge, we further conclude that Her Ladyship did not reach her findings on this question by simply looking at what the plaintiff had adduced. Her Ladyship did evaluate the totality of the evidence before the Court in reaching her conclusions and this is evident from the grounds at paragraphs 28 to 30. [127] In the first place, to succeed in a claim in trust, express, implied or even a constructive trust of certain property, amongst others, the existence of that property must first be established and there must be certainty of existence of the trust in respect of its words, subject and object; frequently referred to as the “Three Certainties” – see Lewin on 44 Trusts 19th ed. (Sweet & Maxwell 2015) at page 102; Yeong Ah Chee v Lee Chong Hai & Anor & Other Appeals [1994] 2 MLJ 614. If the three certainties are not present, there cannot be a trust established. [128] In the case of Kamla Lal Hiranand v Harilela Padma Hari & Others [2000] SGCA 40, the Court of Appeal of Singapore found that a document known as “the 1988 document” purportedly evincing the intention of the deceased to distribute his properties in the manner stated therein, though unequivocally testamentary in nature, was incapable in law of creating a trust whether under the Singapore Wills Act, or under the relevant laws of Hong Kong and the State of California as it was not validly executed as a will. Consequently, the declaration was refused. The alternative declaration that the respondent’s knowledge of the testator’s declared intention and wishes to distribute the estate amongst the appellant and the respondents and their children amounted to a trust was similarly refused for want of particulars, terms and details of the trust. The Court of Appeal opined that that would amount to inviting the Court “to determine or lay down the terms of the trusts without furnishing any basis upon which the Court is asked to embark on this exercise. There is absolutely no certainty as to the terms or the subject matter of the trust claimed by the appellant. On this ground alone, the claim must fail.” [129] Similar views may be found in Perman Sdn Bhd & Ors v European Commodities Sdn Bhd & Anor [2006] 1 MLJ 97, where the Court of Appeal, citing its earlier decision in ESPL (M) Sdn Bhd v Radio & General Engineering Sdn Bhd [2005] 2 MLJ 422 in support, opined that clear and unequivocal language must be used to establish a trust. 45 The standard of proof “in given circumstances is a high one…” It is in this respect that the learned Judge found it difficult to agree with the plaintiff that there was any trust since the existence of the property, the very subject matter of the trust, could not be satisfactorily established, let alone the establishment of intention to create a trust and the acceptance of such obligation. See also Metramac Corporation Sdn Bhd v Fawziah Holdings [2007] 4 CLJ 725. [130] We note that what exactly were these spare parts or Nanyang equipment or Nanyang lines was actually not properly proved by the plaintiff. At paragraph 13.8 of his Statement of Claim, the plaintiff pleaded that:

13.8 At the material time the plaintiff relocated the said two manufacturing lines to the factory premises of Hartalega, he also relocated substantial parts of another two lines which he had purchased, packed in containers (hereinafter referred to as “the said parts”), to Hartalega’s factory premises for temporary storage. The third defendant was told by the plaintiff that the said parts were to be returned by the plaintiff in due course for a reimbursement of RM250,000. [131] These allegations were denied by the defendants – see paragraph 24 of the Re-Amended Defence of the 1st – 3rd defendants. [132] In support of this claim, the plaintiff led oral and documentary evidence. Oral testimony came in the form of evidence from the plaintiff himself where at Q&A 68, and Q&A 94 to 103 of his witness statement, the plaintiff testified as follows: 46 Q68: In addition to the 2 lines, was anything else delivered to the 2nd defendant’s premises? A68: I had also sent part of another 2 lines which were packed in containers at the factory premises in Kepong and entrusted the 3rd defendant with them. He told me that we would take care of them and assured me that the parts would be safe. … Q94 Earlier you were asked and you have answered that you had transferred parts of 2 lines to the 2nd defendant’s factory. How did this transfer take place? A.94: They were transported. Q95: How were they transported? A95: They were transported by containers. Q96: Where did these parts come from? A96: From my supplier Nanyang. Q97: What did you actually order from Nanyang? A97: I ordered 2 complete latex glove manufacturing lines. Q98: Did Nanyang deliver the 2 complete lines you ordered? A98: No. Their delivery was incomplete. Q99: What could one do with the parts delivered by Nanyang? A99: Add on to it, and complete 2 lines. Q100: When Nanyang did not deliver the 2 complete lines, what did you intend to do with the parts delivered? A100: I intended to return these parts and get my money back. Q101: What was your purpose in sending these parts to the 2nd defendant’s factory? A101: To store them there. Q102: Did the 3rd defendant agree to you storing these substantial parts at the 2nd defendant’s premises? A102: Yes, he did. Q103: After the parts had been stored in the 2nd defendant’s premises, what did you do? A103: I went abroad to attend to my other businesses. 47 [133] The documentary evidence was in the form of transport documents purportedly evidencing the transport of the containers containing the spare parts or Nanyang equipment or Nanyang lines to the 2nd defendant’s premises. No other documents were adduced in support. [134] We have examined the relevant oral evidence together with all these documents very carefully and having done so, we not only appreciate and understand but share the same concerns as expressed by the learned Judge. We agree with the learned Judge that in relation to these documents, clarification, verification and explanation from the relevant witnesses is very much required, and the plaintiff is not such a person to meet that need. [135] We cannot agree with the submission of the plaintiff that because there was proof of receipt by the 2nd defendant of the Nanyang equipment, there was delivery of these equipment. Receipt cannot ipso facto be evidence of the delivery of the spare parts, especially where the delivery and the contents of the containers is disputed. [136] As far as these documentary evidence was concerned, we understand that they are to be found in 6IDP pages 2007, 2008, 2009, 2012, 2013, 2015, 2016 and 2017, identified by the plaintiff as being the relevant documents. These documents were variously described as invoices and delivery notes. They were issued by transport companies for transporting the containers, supposedly containing the two manufacturing lines and the spare parts or Nanyang equipment to the 2nd defendant’s premises and, by the crane companies for loading and unloading the same. Pages 2007, 2008 and 2009 were the delivery 48 notes that were respectively marked as ID2A, ID2B and ID2C; whilst pages 2012 and 2013 were marked as P3A and P3B. Page 2015 was marked as P3C while pages 2016 and 2017 were marked as P4A and P4B. [137] All these documents were issued by different companies. ID2A, ID2B and ID2C were issued by Pengangkutan LF Sdn Bhd bearing dates 30.5.1990, 31.5.1990 and 24.6.1990 and they were originally made out to Span Industries Sdn Bhd as the consignor before that name was deleted and replaced with the plaintiff’s company MLB Sdn Bhd, referred to in his Statement of Claim. [138] P3A and P3B, on the other hand, issued by Yew Lee Transport Agency are the particular documents relied on by the plaintiff as they bear the consignee’s acknowledgment and the plaintiff’s testimony is that the signature is that of the 3rd defendant’s sister. However, P3A and P3B warrant clarifications and explanations from the maker, as the plaintiff was in no position to explain away the inconsistencies. The documents both of which are dated 29.6.1990 do not describe two containers as being hauled in the 2 trips, even if “Nanyang lines” is mentioned against the name of the consignee, Hartalega S/B. The documents only describe “2 trips” as having been performed. This is quite unlike ID2A to ID2C where the number of loads of equipment (including Nanyang - 2 incomplete lines) are mentioned, but those trips were made earlier in May 1990, by a different haulage company and the documents remained marked for identification only. 49 [139] In his evidence in chief, the plaintiff had explained at Q&A 77 about 6IDP 2015 marked as P3C, that this invoice made out to Span System PJ was from the transportation company and it was for the delivery of the boiler and 2 containers from his factory to the 2nd defendant’s factory. According to the plaintiff, Span System was the company that purchased the parts for the 2 lines from Nanyang. [140] Having examined this piece of evidence, once again, we find that it raised more questions than it provides answers. The invoice refers to “hydraulic truck crane of 40 tons” operating between hours of 10.00 a.m. to 12 noon and 1.00 p.m. to 6.30 p.m. wherein the total charges for such services was RM700.00. The remarks appearing on the invoice states: “Loading boiler + containers (2x20’) in PJ and deliver unload at 9 Jln Kanan.” This invoice is dated 6.7.1990 while the earlier two documents relied on by the plaintiff also to show delivery, exhibits 3A and 3B, are dated 29.6.1990. [141] The payment for the crane services can be found in exhibit P4B. It is dated 19.7.1990 and it is in respect of two invoices nos. 13622 and

13536. The receipt is issued out to MLB Holding Sdn Bhd. Invoice No. 13622 dated 6.7.1990 is exhibit P3C made out to Span System whereas invoice No. 13536 is exhibit P4A made out to Span Engineering Co. and it is dated 11.7.1990. [142] As can be seen, none of these documents, including those relied on by the plaintiff, are made out to the plaintiff himself. Span System, Span Industries Sdn Bhd, Span Engineering Co or even MLB, names appearing in the documents relied on to prove the plaintiff’s claims on 50 the spare parts, are not claimants in the claim filed by the plaintiff. No explanation was forthcoming as to how the plaintiff came to be making these claims. [143] Even assuming for one moment that the plaintiff is entitled to make this claim, there are no purchase orders or other similar documents detailing the purchase of the two lines or spare parts from Nanyang, and what could possibly be the spare parts, substantial in any sense, that was referred to and claimed by the plaintiff. Identification of the spare parts was seriously in issue and the plaintiff failed to address that challenge. [144] More importantly and as pointed out by the learned Judge, the plaintiff did not attend to the dismantling, delivery, reinstalling or reassembling of the lines, including the spare parts. He did not even pack the parts into the containers, whether by supervising that packing or in any other way. He left it to the transport companies. He was, therefore, in no position to assert in any manner whatsoever that the spare parts or the Nanyang lines went into or was packed into any of the 2 containers since he had no personal knowledge. [145] As pointed out by the learned Judge, the plaintiff ought to have prepared a comprehensive list of the inventory at the material time and ensure that the defendants acknowledge any receipt against that same list. None was done in which case, the requirement of strict proof of the existence of the spare parts was not met. 51 [146] We agree wholly with the learned Judge. In asserting the existence of trust or even conversion, there must be clear and firm evidence to prove the existence and identification of the subject matter of the trust, which in this appeal would be the spare parts, and all the elements of a trust. The claim is premised on the existence of a trust, an express trust for which there must be shown either some document evidencing the creation of a trust, the subject matter of the trust, its terms dealing with matters such as purpose of the trust, the duties and obligations of the donor and trustee, as the case may be. Since the plaintiff failed to establish these necessary elements, we find that the learned Judge had quite rightly, in law and on the facts, dismissed this claim. [147] The learned Judge has, in our opinion, rightly accepted the challenge of the defendants that aside from not providing the necessary details or documents to establish the trust, the plaintiff also did not provide evidence as to when, where and how such a trust came to pass. In particular, he gave no details or information on where he claims to have communicated with the 3rd defendant on these spare parts, what his instructions were in relation to their use, assuming he left the spare parts with the 2nd defendant. The plaintiff further did not list the items that make up the “spare parts” or lead evidence of ownership of such parts. [148] It is therefore not surprising then that when the 3rd defendant denied the claim which is alleged by the plaintiff for the first time in 20 years by way of a claim in a civil suit; the learned Judge believed him. 52 We agree with the learned Judge that the plaintiff had failed to prove and identify the spare parts and the existence of any trust. [149] We find this conclusion founded given the evidence. If indeed the plaintiff wanted to return the spare parts to Nanyang on the basis that Nanyang had delivered incomplete parts, it would have been reasonable to expect the plaintiff to return the parts promptly and within reasonable time, and returning them directly to Nanyang instead of leaving them with the defendants. Instead, the plaintiff left the dismantling of the lines to third parties with no proper records kept. [150] Thus, the plaintiff is in no position to assert that the spare parts were also sent to the 2nd defendant’s factory at the time his two undisputed manufacturing lines were sent. We agree entirely with the learned Judge that the remark on the invoice number 9115 IP3A [exhibit P3A] which reads “Consignee Name – Hartalega S/B (Nanyang Lines) was inadequate because there was no verification by way of an inventory of the contents of the container. [151] The conduct of the plaintiff in not asking for the return of these parts, or to raise the issue, contemporaneously, especially by way of a written or formal demand, confirms the defendants’ contention that this claim is really a non-starter. Since the plaintiff wanted to return the spare parts to Nanyang, it would have been reasonable to see him asking or taking appropriate steps to require their return after he had returned from abroad, some two years later. Instead, his claim made some 18 years later does not ring true. 53 [152] We agree with the learned Judge that “it is not reasonable and contrary to logic” that the plaintiff left the spare parts with the 2nd/3rd defendants and that he was going to return them to Nanyang after he returned to Malaysia in 1993, after having bought the parts in 1989. The learned Judge rightly concluded in the circumstances that it was “mere suspicion on the part of the plaintiff without concrete evidence that the second and third defendants had five (5) production lines and had reaped profits by using the Nanyang equipment.” [153] The 3rd defendant’s explanation on the spare parts was also plausible and credible – that when extra equipment parts were found after the lines were installed, “as far as he was concerned they were part of the two (2) production lines installed”. In consideration of that contribution from the plaintiff, the plaintiff had been offered 174,000 shares in the 2nd defendant which offer was accepted by the plaintiff without reservation. [154] The plaintiff complained that the learned Judge had failed to evaluate the totality of evidence when dealing with this issue that the learned Judge ought to have taken into consideration evidence from the defendants’ case to determine whether his claim in this respect was made out. According to the plaintiff, there were inconsistencies in the defendants’ case here, on the role of one Liew, which if properly regarded, would have proved the plaintiff’s case. [155] With respect, we also disagree with this aspect of the plaintiff’s submissions. 54 [156] The learned Judge had refused to admit the evidence as found in Liew’s witness statement as Liew was not called to testify. Liew had been listed as a witness to testify for the 1st to the 3rd defendants. A witness statement was prepared, filed and served. It was, however, unsigned. [157] Although he did not testify, the plaintiff’s counsel argued that the statements in Liew’s witness statement may nevertheless be used with limitations to challenge the 3rd defendant and to show up paragraph 24 of the 2nd and 3rd defendant’s defence as being false. At Q&A 4 and 20 in Liew’s witness statement, Liew had said that he witnessed the moving of the production line. At paragraph 24 of the Defence, it was pleaded that it was Wong who supervised the moving. [158] The plaintiff argued that the admission of these particular statements in Liew’s witness statement was crucial to establishing the truth as to who actually supervised the moving of the plaintiff’s lines, and to show that the 3rd defendant lacked credibility as his and the 2nd defendant’s case were inconsistent. [159] With respect, we disagree with the plaintiff. [160] In the first place, the witness statement, though filed and served, is unsigned. Until Liew takes an oath at the trial of the claim, and he confirms that the contents of the witness statement represent his testimony and he finally affixes his signature to the statement, that witness statement cannot amount to or be admitted as evidence. It certainly cannot be ascribed to Liew or be suggested that it is Liew’s 55 evidence given that he is not even present in Court to deal with that concern. It would be the height of breach of natural justice were this otherwise. See the Court of Appeal decision in Harry Isaac & Ors v Berita Harian Sdn Bhd & Ors [2011] 3 CLJ 861 which was also considered and followed by the learned Judge in this appeal. [161] The facts here are entirely different from those in National Chemsearch Corpn (SEA) Pte Ltd & Anor v Hotel Ambassador Malaysia Sdn Bhd [1975] 2 MLJ 193. In that case, the respondent had obtained judgment against the appellants for negligence in their supply of Brex, a chemical for use in air-conditioning plants and which was found not fit for the purpose for which it was required as the plant failed after Brex was added to it. The complaint before the Federal Court was inter alia on the misdirection of the learned trial judge in erroneously drawing an adverse inference from what one Mr. Kirby, an agent of the appellant was alleged to have said at a meeting to Kellaway, a representative of the manufacturers and who had prepared a report on the reaction of the chemical. Both Mr. Kirby and Kellaway were not called and the report by Kellaway not produced. [162] It was in that context that the Federal Court remarked that the contents of Kirby’s statement, though not called, was admissible. This is entirely different from the facts in the instant appeal where Liew’s statement cannot even be ascribed to him as he had not even signed the witness statement. We therefore agree with the learned Judge’s reasoning in disallowing the plaintiff any reliance on Liew’s statement. 56 [163] In any case, regardless whether it was Wong or Liew who supervised or assisted in the supervising of the dismantling of the lines, the position remains that it was not the plaintiff who had the reasonability of doing so. [164] We therefore agree with the learned Judge that the plaintiff has failed to establish the existence of any trust. Until and unless a trust is established, the plaintiff cannot claim reliance under section 22 of the Limitation Act 1953 and decisions such as Dato Wira A Nordin Mohd Amin v Rajoo Selvappan & Ors [2007] 1 MLRA 594 are of no assistance. Section 22 reads as follows:

22. Limitation of actions in respect of trust property

(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action-

(2) Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued: Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property, until the interest fell into possession.

(3) No beneficiary as against whom there would be a good defence under this Act shall derive any greater or other benefit from a judgment or order obtained by any other beneficiary than he could have obtained if he had brought the action and this Act had been pleaded in defence. 57 [165] Section 22(1)(b) deals specifically with the recovery of trust property or the proceeds of the trust property from a trustee. In this case, the whole existence of a trust in the terms described by the plaintiff is under challenge and has not been proved. As said, unless the three certainties are met, there is no trust, and that was what the learned Judge found and we agree. [166] This, in turn means that there cannot be any basis for any constructive trust too [see Koh Siew Keng & Anor v Koh Heng Jin [2008] 3 CLJ 450 for the discussions on such trusts]; again due to the absence of subject matter and the establishment of any terms relating to the trust. [167] Consequently, any claim in relation to the return of the spare parts, if any existed in the first place, is time-barred as the claim is only made in 2011, long after limitation under section 6 of the Limitation Act 1953 has already set in; and the remedies sought in paragraphs 26(a), (c), (e) and (f); and 27(a), (b), (h) and (k) were rightly dismissed. [168] We have taken into account the plaintiff’s submission about the existence of 5 lines, that there were 5 lines in the 2nd defendant’s factory when he returned from abroad, that this could only have been made possible by the addition and use of the plaintiff’s spare parts. The 3rd defendant has offered, in our view, a plausible explanation which was found credible and accepted by the learned Judge and we have no reason to disturb such findings. 58 [169] Even if the existence of these 5 lines suggests the use of the spare parts, we are of the view that this may only amount to the commission of the tort of conversion. But, even in this respect, the plaintiff’s claim based on the tort on conversion fails also for the same reason, the plaintiff’s inability to establish the certainty of subject matter. [170] The tort of conversion is a tort of strict liability, where the specific property must be identified – see OSK Trustees Berhad & Another v Metroplex Holdings Sdn Bhd [2019] 1 LNS 3: [42] Yet another glaring factor that seems to have been overlooked, understandably because it is hardly ever an issue, is this – conversion can only exists in relation to specific property – see Abington v Lipscombe

(1841) 1 QB 766. We would understand this to mean clear and identifiable property, that is, chattels of moveable property. Thus, where a demand is made for the return of the goods, the demand must be clear and unequivocal, and it cannot be for an unspecified part of a larger collection. [171] The claim founded in the tort of conversion also fails by reason of limitation. [172] The claim relates to parts taken under the 1990 agreement and which the plaintiff discovered in 1992. Yet, he took no action till his filing of the present suit in 2011. By this time, limitation under the Limitation Act 1953 had long set in. The learned Judge was clearly correct in law and on the facts in finding such a claim time-barred. 59 Issue 2 - dividends [173] The plaintiff’s claim has been aptly summarized by the learned Judge as follows: i. 10% dividend on 333,037 shares for the year ending 31.3.1997; ii. 110% dividend on 333,037 shares for the year ending 31.3.1998; iii. 15% of the 4th dividend on 362,345 shares for the year ending 31.3.1998; iv. 5% of the 2nd dividend on 695,382 (333,037 + 362,345) shares for the year ending 31.3.2003. v. Whether the claim for dividends is time-barred. [174] The details relating to these claims are set out above. The total sum involved is RM488,765.25. All these claims were dismissed. [175] In coming to her decision, the learned Judge took pains to examine what and how exactly the claims arose, the evidence led by all sides, and how should such evidence be treated under the law. The learned Judge found that the plaintiff formed the view that he had not been paid these dividends after examining exhibit P49 which is information of dividend payment since incorporation of the 2nd defendant, that is, from 1993 to 2006. This document was supplied to the plaintiff upon his request. 60 [176] In respect of the dividends in (i) and (ii) above, the learned Judge accepted the defendants’ contention that they were not liable for what is described as “the plaintiff’s nonchalance” [Saya berpendapat defendan kedua dan ketiga tidak bertanggungan atas sikap tidak peduli plaintif sendiri]. The learned Judge agreed with the defendants that the plaintiff had only himself to blame for reregistering his shares only in October 1999 when the shares were already returned to him earlier in May 1997. [177] We agree with this finding. In any case, since companies only recognize and pay dividends to registered shareholders, and the plaintiff was not the registered shareholder for the relevant period claimed, the claim was rightly dismissed by the learned Judge. [178] This is evident from section 163(4) of the Companies act 1965 which reads:

(4) Except as provided in this section no notice of any trust expressed, implied or constructive shall be entered on a register or branch register or be receivable by the Registrar and no liabilities shall be affected by anything done in pursuance of subsection (1), (2) or (3) or pursuant to the law of any other place which corresponds to this section and the corporation concerned shall not be affected with notice of any trust by anything so done. [179] Support for this view may also be found in the decisions of Yeng Hui Enterprise Sdn Bhd v Liow Su Fah [1979] 2 MLJ 240; Cheong Yuk Wai v Low Sai Wee [2007] 2 MLJ 634. 61 [180] As for the dividends in (iii) and (iv), the learned Judge noticed that the plaintiff himself was unsure whether he had in fact received the dividends paid. The defendants had tendered evidence that the plaintiff had been paid the relevant sum. The learned Judge further found that these claims were time-barred. [181] We agree. Dividends are, at the end of the day, contractual debts owed by the company. Such claims must be filed within 6 years from the date of accrual of the cause of action, as provided under section 6 of the Limitation Act 1953. As the plaintiff’s claims concern unpaid dividends for the years ended 1997, 1998 and 2003, the claim filed in 2011 is clearly time-barred. Support for this position of the law may be seen in the decisions of BSN Commercial Bank (Malaysia) Berhad v River View Properties Sdn Bhd [1996] 1 AMR 1144, and Re Compania de Electricidad [1978] 3 All ER 668. [182] Having examined the records and the reasons of the learned Judge and having considered the submissions of both parties, we are of the firm view that all the claims in (i) to (iv) against the defendants are clearly time-barred and were rightly dismissed by the learned Judge. The appeal in this regard is therefore of no merit. Issues 3, 4 & 5 - Plot or conspiracy relating to share capital increase in 2nd defendant [183] The allegations here pertain to concerted efforts in the form of a plot or conspiracy by the 3rd to the 5th defendants to dilute or decrease 62 the plaintiff’s shareholding in the 2nd defendant through the rights issue in 1994 and 1997, the special issue in 2004, and the 2008 listing of the 2nd defendant. The details of the claim and defence were set out earlier. [184] Upon consideration of the evidence, the learned Judge found that the plaintiff’s claim in each respect was not sustainable. [185] For the rights issue in 1994, Her Ladyship found that although the plaintiff did not support the rights issue of 1994, he was not left out. The evidence showed that the plaintiff was nevertheless offered 389,760 shares in the rights issue. Furthermore, while the plaintiff may have paid the total purchase price of RM428,736 using three cheques, unfortunately, one of his three cheques was returned with remarks “Exceed Arrangement”. The learned Judge surmised this as meaning that the plaintiff’s account did not have the necessary funds. [186] The plaintiff’s attempt to replace that dishonoured cheque and for an extension of time to pay the balance were unsuccessful. This culminated in the plaintiff subscribing to 208,182 shares out of 389,760 shares with the balance of 181,578 subsequently subscribed by the 3rd defendant. It was in these circumstances that the plaintiff’s aggregate and percentage shareholding was reduced from 20% to 16.27%. And, it was this reduction that was perceived as a deliberate dilution by the 3rd to 5th defendants. [187] The plaintiff felt he was unfairly treated, that there was a conspiracy to dilute his shares here because another shareholder, Wong was given 2 years to pay for his shares while he was not allowed the 63 short extension that he sought. The plaintiff saw himself as one of the shareholders who had contributed to the success of the 2nd defendant and that he ought to have been treated similarly like Wong. The plaintiff claimed that the 3rd defendant’s subscription of the 181,578 shares rendered him a constructive trustee of the plaintiff and that the 3rd defendant should account to him for the profits from the 181,578 shares. [188] The learned Judge did not agree with the plaintiff, especially after evaluating the documentary evidence before the Court. The evidence showed that the plaintiff’s inability to subscribe to the full amount of shares offered by the 2nd defendant was entirely due to his own oversight or his own lack of funds. Rejection under such circumstances was proper in law. [189] The High Court also found that the plaintiff could not equate himself with Wong since Wong’s position was already a matter resolved by the Board of Directors of the 2nd defendant and the resolution had been carried at its EGM. The plaintiff also did not object to this resolution. He merely abstained from voting through his proxy. Under such conditions, the learned Judge found the plaintiff’s claim against the 1st to the 3rd defendants, including on the basis of the 3rd defendant as constructive trustee, unsustainable in law. The Court further found the claim time-barred. [190] As for the rights issue in 1997, the Court found that the plaintiff was returned his share certificates on 9.5.1997 [exhibit P30], that the offer to subscribe for the rights issue was extended and still available to the plaintiff on 2.7.1997 at 5.00 p.m. and later to 10.7.1997 [exhibit 64 D156], and that it was due to the plaintiff’s own indifference that he did not take up this rights issue. Consequently, the defendants could not be blamed for the plaintiff’s dilution from 16.27% to 6.28%. The Court found the claim without merit and in any event time-barred. [191] Next, the special issue in 2004 concerned a resolution passed at the EGM of 6.8.2004 to offer to investors identified by the Board of Directors a special allotment of 4,720,000 shares in the 2nd defendant for RM3.80 per share to be paid in cash in order to increase the 2nd defendant’s capital. The plaintiff’s proxy had attended but were unable to respond to the 3rd defendant’s offer of the same. After hearing the witnesses, the learned Judge found no evidence of any plot or any conspiracy. The learned Judge also found the claim here time-barred. [192] The next circumstance relied on by the plaintiff was the 2008 listing of the 1st defendant. An EGM of the 2nd defendant on 15.3.2006 resolved that the 2nd defendant would be listed by first incorporating the 1st defendant and thereafter all 16 shareholders of the 2nd defendant would sell their shares in the 2nd defendant to the 1st defendant and be issued shares in the 1st defendant in exchange. The plaintiff took part in the exercise. He received 10,745,000 shares amounting to 4.43% of the share capital of the 1st defendant. During the 2008 listing process, the plaintiff applied to purchase an additional 500,000 shares in the 1st defendant under the category of identified investor. He was allocated the shares. [193] Subsequently, he applied to purchase another 2 million additional shares under the category of contributors to the success of the 65 company, as per paragraph 2.3(ii) and (iii) of the listing prospectus [exhibit P125]. He was unsuccessful because all the allotted shares had been fully subscribed and the plaintiff was duly notified – see exhibit P135. [194] The learned Judge found the rejection of the additional 2 million shares “not unreasonable” since the plaintiff’s name did not appear in the list of 33 individuals as identified by the Board of Directors and mentioned in the listing prospectus. According to the learned Judge, the Board was entitled to make its selection. Consequently, the plaintiff’s claim in this respect was dismissed. [195] We have carefully examined the evidence, submissions of learned counsel and reasoning of the learned Judge and have found that we have no cause to intervene in the conclusions and decision reached by the learned Judge. The claims here require findings of fact to be made. Such findings have been properly drawn from the oral and documentary testimonies before Her Ladyship, after having evaluated them against the pleaded case of each party and after having applied the relevant legal principles. [196] Much of the plaintiff’s complaints are indeed of the plaintiff’s own doing, especially in relation to both the 1994 and 1997 rights issues. The rights issue, special issue and the listing exercise were all regularly and properly within the mandate and authority of the 2nd defendant and its Board of Directors to make under Article 57 of the Articles of Association and section 132D of the Companies Act 1965. More importantly, these exercises were actions taken after valid resolutions 66 authorizing such issues had been passed at the relevant EGMs and were decisions of business judgment made by properly convened meetings of the Board of Directors and the EGMs. Such resolutions, until dissolved, cancelled or annulled are valid and binding – see Chang Thiam Teng v Ban Swee Heng Sdn Bhd [1992] 2 MLJ 583; Ezzen Heights Sdn Bhd v Ikhlas Abadi Sdn Bhd (Soh Yuh Mian, Intervener) [2011] 4 MLJ 173. [197] Even on the matter of the 2008 listing, the plaintiff is evidently not listed in the prospectus as amongst the 33 names of “Eligible Directors and Employees of the Group and persons who have contributed to the success of the Group”. Similarly, he is not named as an identified investor by way of private placement. The fact that he was offered and that he did subscribe to the 500,000 shares under this category was satisfactorily explained by the 3rd defendant and accepted by the Court. [198] Given such facts, the plaintiff’s allegation of negligent misrepresentation in the prospectus is also unsustainable. The plaintiff had plainly not established the necessary elements for such a claim as discussed in Khutbul Zaman @ Khutubul Jaman bin SNS Bukhari & Anor v TJB Development Sdn Bhd & Anor [2009] 7 MLJ 314 and which had applied the principles laid down in Hedley Byrne & Co v Heller & Partners Ltd [1983] All ER 575, namely, that there must be a special relationship between the plaintiff and the maker of the representation; that the plaintiff relied on such representation; and the reliance caused damage to the plaintiff. 67 [199] It was the plaintiff’s own assumptions that caused him to think that he was eligible to subscribe for this special issue. That assumption, as we have seen, is based on his erroneous claim over the Nanyang equipment or spare parts. The evidence also shows that the plaintiff had already been paid for his two manufacturing lines by way of shares in the 2nd defendant. It was within the prerogative and business of the Board of Directors of the 2nd defendant to decide who would qualify or who are eligible under paragraph 2(ii) of the listing prospectus. The plaintiff was not identified as such a person in either category in the prospectus. [200] The plaintiff’s belated complaints over all these exercises long after their completion also raise questions as to their truth, sincerity and whether such claims were at all genuine. In fact, the evidence reveal that when the plaintiff did complain on the special issue, it was two years after the exercise had been conducted. [201] The defendants’ response was readily communicated through their solicitors’ letter of 26.9.2006 [exhibit P66], explaining their position and the reasons not unlike that pleaded in their Defence to the plaintiff’s claim. There was no response from the plaintiff, whether in the form of a denial or a correction; until the claim was filed. This is despite the plaintiff having legal access at all material time. [202] It is quite evident that the trial judge had found compelling reasons not to believe the plaintiff’s claim, that the proportion and reduction of his shares had absolutely nothing to do with the defendants’ actions, but 68 were entirely the result of his own acts, defaults, omissions and conscious decisions. [203] We have no reason to disagree with Her Ladyship. The findings are supported by the evidence before the Court and in accordance with sound legal principles. This is equally true in relation to the claim that there were breaches of the law under the Capital Markets and Services Act 2007 in particular, and further in respect of allegations of conspiracy against the 3rd to the 5th defendants. [204] It is settled law that in order to succeed in such a claim, what the plaintiff must prove depends on the precise nature of the tort of conspiracy alleged. The oft-cited decision of the House of Lords in this area of law that is, the decision in Lonrho Plc v Fayed [1992] 1 AC 448 is well-discussed in the Singapore decision of Nagase Singapore Pte Ltd v Ching Kai Huat [2008] 1 SLR 80; and by the Court of Appeal Renault SA v Inokom Corp Sdn Bhd & Anor and other appeals [2010] 5 MLJ 394. See also SCK Group Bhd & Anor v Sunny Liew Siew Peng & Anor [2010] 9 CLJ 389. [205] Although Renault SA was an appeal that arose out of an application to strike out, the views expressed by the Court of Appeal are equally relevant: … The gist of the tort of conspiracy is not the conspirational agreement alone but that agreement plus the overt acts causing damage (Marrinam v Vibart [1963] 1 QB 234, affirmed [1963] 1 QB 528)…The statement of claim should describe who the several parties and their relationship with each other. It should allege the 69 agreement between the defendants to conspire, and state precisely what was the purpose or what were the objects of the alleged conspiracy and it must then proceed to set forth, with clarity and precision the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy, and lastly, it must allege the injury and damages occasioned to the plaintiff thereby (The Common Law Library – No. 5 – Precedents of Pleadings – s 26 – Conspiracy) … [206] Further, the Court of Appeal held that the plaintiff must prove the following elements, that there is:

19.10 and 22. In such claims, the plaintiff is required to establish that 71 there is an agreement between two or more persons to do certain acts; the predominant purpose of that agreement is to injure or cause damage to the plaintiff, that the certain or identified acts are performed in furtherance of that agreement, and that damage from such acts were suffered by the plaintiff. [210] The charge of conspiracy is the only allegation levied against the 4th and 5th defendants and they are alleged to have plotted with the 3rd defendant to dilute the plaintiff’s shareholding. We agree with the submissions of the 4th and 5th defendants that such pleas are, however, defective. [211] When the particular allegations are examined, it is noted that the allegations are made in very general and broad terms about resolutions passed at EGMs of 1994, 1996, 1997, 2004 and 2006, where these defendants were in attendance and so was the plaintiff. Since the validity of these resolutions is not challenged, we cannot see how they may be used as evidence of any degree, value or probity, particularly to prove conspiracy amongst these three defendants. Further, such events span over a very substantial unaccounted period of 12 years. [212] Other than these resolutions and the plaintiff’s own say so, there is no other evidence led and certainly none that met even the balance of probabilities. The two witnesses called by the plaintiff were of no assistance in this respect, especially in the face of contemporaneous documentary evidence in the form of the resolutions and minutes carried at the EGM. In fact, during the cross-examination of the plaintiff by the respective counsel for the 4th and 5th defendants, the plaintiff had 72 testified that he was not pursuing the allegations against these defendants on the 2008 events; that his allegations were not made directly against them; and, he had admitted that he had not produced any evidence against the 4th and 5th defendants on the claim of conspiracy. [213] The learned Judge’s findings and reasoning on this issue may be found at paragraphs 66 to 75 of the judgment. [214] Her Ladyship had found that the plaintiff had failed to produce any evidence showing that the 4th and 5th defendants played individual roles in allotting or fixing specific number of shares for the plaintiff; that these defendants had played any role in reducing the plaintiff’s shares in the 2nd defendant. On the contrary, the shares were offered for subscription based on the resolutions of the 2nd defendant’s Board of Directors. [215] The learned Judge held, and we agree with Her Ladyship, that voting in the impugned EGMs of the 2nd defendant, whether for or against any resolution tabled, is the absolute right of the shareholders in law. Each and every shareholder is entitled to attend the EGMs and vote to protect or further their respective interests as well as that of the company. The decisions taken for the various rights issue, for the reasons, purpose and objects explained at the EGMs, done in the manner and description as proposed and executed, are properly within the power and mandates of the EGMs, as advised by the 2nd defendant’s Board of Directors. 73 [216] The fact that the 3rd defendant may play a prominent role driving the 2nd defendant and later the 1st defendant to corporate success, is not an unusual feature of how successful businesses come to pass. That advantage or presence is no reason to obscure the settled principles of separate corporate identity and the rule in Salomon v Salomon & Co Ltd [1897] AC 22. There is certainly no basis to lift the corporate veil and pin individual liability on the 3rd defendant as sought by the plaintiff. [217] Returning to the allegations of conspiracy and the claims against the 4th and 5th defendants, we agree with the submissions of their counsel that these defendants are entitled to rely on the evidence before the Court; that they do not necessarily have to testify personally. This is different from the case where the party makes a submission of no case to answer and elects not to lead any evidence at all. All parties before the Court are entitled to rely on or challenge evidence already before the Court – see Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 3 MLJ 609; Guthrie Landscaping Sdn Bhd v Hasrat Usaha Sdn Bhd [2011] 4 MLJ 121; Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697. The challenge of and reliance on such evidence may be established through the cross-examination of witnesses, other than the parties themselves. Furthermore, their counsel had cross-examined the witnesses called. [218] We are therefore not persuaded that the learned Judge had fallen into error in this respect. The learned Judge had found, based on credible evidence that the plaintiff had consequently failed to discharge the requisite burden of proof that these defendants had conspired to cause loss to the plaintiff or, to injure him. We find no reason to 74 intervene in these findings and conclusions of the learned Judge which we have found to be sound, cogent and in accord with the evidence presented and the law. [219] We also agree with the learned Judge that all these claims including the claim for accounts under paragraph 26(d) of the Amended Statement of Claim are obviously time-barred. The factual matrix for the claim on conspiracy relate back to the events from 1994 to 2004. We agree with Her Ladyship that such a claim is time-barred under section 6 of the Limitation Act 1953. [220] On the ground of limitation alone, the appeals ought and must be dismissed as the respective causes of action arose more than six years before the claim was filed. Conclusion [221] We have found no basis or reason for the exercise of our appellate powers of intervention in this appeal. The numerous findings of fact and drawing of inferences and legal conclusions accord with the evidence presented in Court and the applicable principles. It would be erroneous for this Court to intervene even if we may have a different view, which we do not. 75 [222] For all the reasons adumbrated, the appeal is dismissed with costs of RM50,000 to each respondent subject to the payment of the allocator fee. Deposit is refunded. Dated: 21st June 2019 (MARY LIM THIAM SUAN) Judge Court of Appeal Malaysia Counsel/Solicitors For the appellant: Gopal Sri Ram (Lim Choon Khim, Chuah Yih Chuan & David Yii with him) Messrs. Chooi, Saw & Lim Suite 8, 11th Floor Menara Zurich No. 170, Argyll Road 10050 Penang 76 For the 1st, 2nd & 3rd respondents: S. Sivaneindiren (Peter Skelchy and Jeff Ong Sze Ren with him) Messrs. Cheah, Teh & Su L-3-1, No. 2, Jalan Solaris Solaris Mont Kiara 50480 Kuala Lumpur For the 4th respondent: John Skelchy (Vishal Kumar with him) Messrs. James Monteiro Unit D4-6-1, Solaris Dutamas No. 1, Jalan Dutamas 1 50480 Kuala Lumpur For the 5th respondent: Lim Bee Leong Messrs. K.Y. Lim & Churme A-9-5, Blok A, Jaya One No. 72A, Jalan Universiti 46200 Petaling Jaya