Tan Shoi Chew v 1. ) East West One Consortium Berhad (WA-22NCC-200-03/2024)

EAST WEST ONE CONSORTIUM BERHAD [NO. SYARIKAT: 200401022710(661215-V)]

EAST WEST HORIZON PLANTATION BERHAD [NO. SYARIKAT:201101012533 (940673-T)]

EAST WEST ONE PLANTATIONS BERHAD [NO. SYARIKAT:200601035765(755524-T)]

DATO’ DR JESSIE TANG

SAMSUL BIN WASNI

PACIFIC TRUSTEES BERHAD [NO. SYARIKAT: 199401031319 (317001-A)]

DR. TAN ENG HEONG (NO. K/P.: 700214-10-6159) …DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] Vide Enclosure 4, the Plaintiffs obtained an ex parte order from this Court seeking to stop the 1st to the 7th Defendants from holding two

meetings to be held on 5.4.2024 at 9.30 am and 2.30 pm respectively. Enclosure 4 was subsequently amended to include the additional meeting and is reflected in Enclosure 118. [2] At the conclusion of the inter partes hearing, I dismissed Enclosure 4/118 which in effect, rendered the ex parte order being set aside. There were therefore no injunctive reliefs granted to the Plaintiffs based on Enclosure 4/118. The Plaintiffs appealed. [3] It must be pointed out the Plaintiffs initially sought a Mareva Injunction for all the sums invested by the Plaintiffs to be preserved. However, it was pointed out that the 6th Defendant, Pacific Trustees Berhad as Trustee, statutorily held in trust a sum of RM39,488,370.22. The sum kept under the trust exceeded the sums that were sought by the Plaintiffs to be frozen. The Plaintiffs withdrew the action against the 6th Defendant given the need for a Mareva Injunction became academic as the sums deposited are statutorily being held by the 6th Defendant as trustee. Issue to determined [4] Enclosure 4/118 was therefore to determine whether: The 1st to 7th Defendants, whether by themselves and/or through their representatives and/or servants and/or employees and/or agents and/or otherwise by whomsoever and/or are prohibited from holding, conducting and proceeding with any meeting of the Planters in respect of the 1st to 3rd Defendants pending the full and final disposal of this suit and/or such further Order of this Court. Background Facts [5] The Plaintiffs are the investors (“Planters) and participants of an oil palm share farming scheme called East West One Planter’s Scheme (“EWOPS”), East West Horizon Planter’s Scheme (“EWHPS”) and East West Planter’s Scheme 1 (“EWPS1”) on several pieces of land measuring 29,4388 acres situated in the district of Keningau, Ranau and Tambunan in Sabah (“the said Lands”) and operated by the Defendants. [6] The features of the entire scheme can be seen at Paragraph 24 of the Statement of Claim. In essence, the Plaintiffs, upon subscribing the Scheme, would be entitled to returns such as Monthly Net Returns (MNR) over a certain period of time as stipulated by each Scheme. The rights held by the Planter in respect of the Planter’s Block subscribed are in the nature of a “profit a prendre” and rest in contract only, specifically in relation to the Planter’s entitlement to the MNR in proportion to their interest in the Planter’s Block subscribed. [7] Upon the expiry of the agreements between the Planters with the 1st, 2nd and 3rd Defendant Company, the Planter’s Block(s) shall be returned by the Planter(s) to the Management Company. After the Maturity Date the Planter(s) shall no longer be entitled to any MNR derived from the Planter’s Block(s). Upon such expiry, the Management Company shall refund to the respective Planter the Subscription Fee. Thereafter, the Planter shall have no further rights or claims whatsoever against the Management Company under the agreements. Issues arose between the Plaintiffs and the Defendants. Analysis [8] Upon considering the arguments, I refused to grant any reliefs to the Plaintiffs for the following reasons:

Meeting is the appropriate forum [9] It is to be noted that at the material time before Enclosure 4 was filed and the eventual orders given: -

The “Notice of Planters’ Meeting” for EWOPS (dated 7.3.2024) were sent to the registered Planters under EWOPS, with the required fourteen (14) days’ accordingly satisfied;

The “Notice of Planters’ Meeting” for EWHPS (dated 7.3.2024) were sent to the registered Planters under EWOPS, with the required fourteen (14) days’ accordingly satisfied; and

The “Notice of Planters’ Meeting” for EWPS 1 (dated 7.3.2024) were sent to the registered Planters under EWOPS, with the required twenty-one (21) days’ accordingly satisfied. [10] Therefore, if the Plaintiffs (and/or any Planter) have any views on the resolutions proposed by the Management Companies, the Plaintiffs ought to have been present during the organised “Planters’ Meetings”, voice their concerns, deliberate further on the same, and cast their respective votes, accordingly. [11] The Planters who invested in the Scheme must be allowed to attend the meetings. It is in their own interest that all discussion and proposals are allowed to be tabled and considered. It is for this reason that I disallowed any restriction on any meetings to be conducted in future.

(ii) The Plaintiffs do not form the majority of the Planters [12] It was shown to the Court that the Plaintiffs are a group of minority Planters. As of the date of filing of Enclosure 4 (which was on 16.4.2024)-

a total of 202 “Planters” appointed proxies to attend the EWOP’s “Planters’ Meeting” which was originally scheduled to take place on 5.4.2024;

a total of 308 “Planters” appointed proxies to attend the EWHPS’ “Planters’ Meeting” which was originally scheduled to take place on 5.4.2024; and

a total of 132 Planters appointed proxies to attend the EWPS 1’s “Planters’ Meeting” which was originally scheduled to take place on 5.4.2024. [13] The number of Planters who would want to abide by the express terms of the Trust Deed, “Planter’s Agreement”, and/or Interest Scheme Act 2016 way outnumber the Plaintiffs in this action. [14] What this effectively means is that a majority of the Planters want to continue with the Scheme and are willing to listen to the forward plans being proposed by the Defendants. As such, the will of the majority must be prioritised instead of the Plaintiffs who form the minority investors.

(iii) Trust Deed mandates a meeting [15] The respective Trust Deeds which govern the respective Schemes managed by the 1st, 2nd and/or 3rd Defendants, are as follows:

Trust Deed dated 25.8.2011 which governs the EWOPS, as managed by the 1st Defendant;

Trust Deed dated 24.12.2012 which governs the EWHPS, as managed by the 2nd Defendant; and

Trust Deed dated 13.6.2019 which governs the EWPS 1, as managed by the 3rd Defendant. [16] It is pertinent to note that the Trust Deeds stipulates an obligation and/or right on the 1st, 2nd and/or 3rd Defendants to organise the “Planters’ Meetings”, for purposes of “… voluntarily terminating the … Scheme in favour of any alternative proposals made by the Management Company that is reasonable and acceptable to the Planters”. [17] In executing their respective “Planter’s Agreement”, the Plaintiffs agreed to be bound by the clear and express terms of the same, thereby agreeing with and acknowledging the terms of the respective Trust Deeds. As such, the meetings are contractually provided under the Trust Deed. Any attempts to frustrate a meeting cannot be condoned or allowed by the Court.

(iv) Meeting was directed by the Regulators-CCM [18] Under the Interest Scheme Act 2016, the Companies Commission of Malaysia (“CCM”) is the regulator of all Interest Schemes. As such, the supervisory role that CCM plays in overseeing all Interest Schemes cannot be disregarded. [19] In the current case, it is not disputed that-

CCM issued a letter dated 4.4.2024 to the 6th Defendant (the nominated Trustee for all the Interest Schemes managed by 1st, 2nd and/or 3rd Defendants), listing out the directions of CCM to the 6th Defendant;

the total sum of RM39,115,129.32 (consisting of funds from the “Trust Account”, “Reserve Fund Trust Account”, and “Sinking Fund Trust Account”) must be maintained in their respective accounts and cannot be released;

subject to the “Rehabilitation and Restructuring Plan” receiving approval from a majority of the investors (Planters), a total sum of RM9,396,298.38 can be used for the purposes of rehabilitating and restructuring the Schemes; and

the balance sum of RM29,718,830.94 can only be used for distribution purposes, which are approved by the investors (Planters) in an investors’ (Planters’) meeting which will be organised at the expiry of a two (2) years’ period which is set for the sale of the plantations. [20] I therefore accept the submission of the Defendants that given the directions given by CCM, the respective “Planters’ Meetings” must be organised, to seek the relevant approvals from the Planters on the “Rehabilitation and Restructuring Plan” and eventually, the use of the balance sum of monies held by the 6th Defendant. [21] This Court would effectively usurp the authority and purview of CCM who are the regulators of the Interest Schemes as provided for under the Interest Scheme Act 2016, if it were to prevent the organisation of the respective “Planters’ Meetings”. No serious issue to be tried [22] Irrespective of the allegations and assertions which the Plaintiffs raised, such allegations and assertions cannot curtail the “Planters’ Meetings” which are organised pursuant to provision of the Trust Deed, “Planter’s Agreement(s)”, Interest Scheme Act 2016, and directions of CCM. [23] This is because the allegations and assertions raised by the Plaintiffs fail to appreciate and consider the following salient points:

the information shared by the Defendants were on the basis that the same are for further consideration and reference;

the information shared by the Defendants are subject to relevant disclaimers which appear, when the same are shared;

the Plaintiffs are individuals of sound mind and had sufficient time and resources to review, study, and consider the information provided, before deciding to participate in the respective Schemes managed by the 1st, 2nd and 3rd

the Plaintiffs were aware of the risks attributed to the respective Schemes managed by the 1st, 2nd and 3rd Defendants. [24] I therefore find that the Plaintiffs have failed to raise a serious issue to be tried to warrant the injunction sought in Enclosure 4/118. Balance of convenience lies with the Defendants [25] I am firm in my view that the balance of convenience lies in favour of the Defendants in setting aside the Ad-Interim Injunction granted on 2.4.2024. Based on all considerations, it follows that Enclosure 4/118 is dismissed with costs. Conclusion [26] I do not find the prerequisites stipulated in Keet Gerald Francis Noel John v. Mohd Noor Bin Abdullah & Ors. [1995] 1 MLJ 193 have been fulfilled. I therefore dismiss Enclosure 4/118 with costs. Sgd. (AHMAD FAIRUZ BIN ZAINOL ABIDIN) Judge High Court of Malaya Kuala Lumpur Dated: 23rd September 2024 Counsel May Soh May En for the Plaintiffs Messrs. Manian K. Marappan & Co. Calvin Khoo & Awen Wong for the 1st to 5th and 7th Defendants Messrs. Tan Norizan & Assoc.