V.S. Industry Berhad v 1. ) Lim Chang Huat (WA-24NCC-400-07/2023)

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1 IN THE HIGH COURT IN MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) ORIGINATING SUMMONS NO.: WA-24NCC-400-07/2023 In the matter of NEP (Malaysia) Berhad [Company No.: 199501004648 (333843-v)] And In the matter of Section 346 of the Companies Act 2016 And In the matter of the 25/07/2016 between Lim Chang Huat, Lim Chee Kon, V.S. Industry Berhad and NEP (Malaysia) Berhad And In the matter of Order 88 Rule 2 of the Rules of Court 2012 BETWEEN V.S. INDUSTRY BERHAD [COMPANY NO.: 198201008437 (88160-P)]

Preamble

Pursuant to the above provision, the court must consider whether there are any reasons why these proceedings should be continued as if it had been begun by writ. [10] In The Summit Subang USJ Management Corp v Ho Phoy Kwang & Anor [2024] 1 MLJ 912, the Court of Appeal held that the burden is on the applicant to show circumstances and documentary evidence to justify the conversion of the originating summons into a writ. The reasons must be deposed in the affidavit in support of the application. [11] In the present case, I find the affidavit in support fails to condescend to the particulars of the alleged conflict of material facts which the 1st, 2nd and 4th defendants claim would justify the conversion of the originating summons into a writ. The 1st, 2nd and 4th defendants merely averred that the representative of the plaintiff, Datuk Beh Kim Ling, failed to reveal information which led to the breakdown of the relationship between the parties. The affidavit in support then sets out facts and issues raised in Kuala Lumpur High Court Suit No. WA-22NCC- 371-08/2022. It must be highlighted that the suit involves the allegation of inter alia the alleged breach of duties of Datuk Beh Kim Ling as a director of the 4th defendant in failing to disclose his interest in companies connected to him. These facts and issues are in my view irrelevant to the claim for oppression before this court. [12] Thus, I find the 1st, 2nd and 4th defendants have failed to prove that there are conflicting material facts relevant to the issues before this court, which would necessitate the conversion of the originating summons into a writ. [13] I must highlight that the issue before the court is whether the 1st to 3rd defendants had conducted themselves in an oppressive manner in their alleged failure to: a. C th defendant since 6 May 2021; b. Call for an annual general meeting of the 4th defendant for the financial years ended 30 June 2021 and 30 June 2022; c. Make the audited financial statements of the 4th defendants available to its shareholders; d. Declare and pay dividends of the 4th defendant for the financial year ended 20 June 2020; e. Manage iPartner, which resulted in the filing of Suit 355; and f. Keep the plaintiff updated on information on the financial affairs of the 4th defendant. [14] These allegations arise primarily from undisputed documentary evidence, and can be determined from statutory documents, court documents, notices and correspondences exchanged between the parties. I find there to be sufficient contemporaneous documents and undisputed facts for this court to consider, to arrive at a fair determination of the issues in dispute. [15] The 1st, 2nd and 4th defendants relied on Ting Ling Kiew v Tang Eng Iron Works Co Ltd [1992] 2 MLJ 217, to support their argument that the originating summons should be converted to a writ. However, Ting Ling Kiew (supra) can be distinguished from the facts of the present case. Ting Ling Kiew (supra) involved the allegation that the appellants had carried on business with the intent to defraud creditors. The court also found there to be conflicting affidavit evidence arising from statements of accounts which the respondents claimed were doctored. [16] There is no allegation of fraud or conflicting affidavit evidence in the case before this court, and the court should not exercise its discretion to convert an originating summons into a writ if there are sufficient documents and undisputed facts that can be relied on to enable it to arrive at a fair determination of a matter (see Ng Chee Choy v Better Symbol Sdn Bhd & Ors [2013] MLJU 350, WTWT Sdn Bhd v Chew Meu Jong & Ors and another appeal [2018] MLJU 1360, Mohamed Zahid Yon bin Mohamed Fuad v Yakub bin Hussaini & Anor [2019] MLJU 1286 and Ho Yaw Ming v Ho Yau Hong & Ors [2021] MLJU 2271). [17] It is also important to highlight that order 88 rule 2 of the ROC provides that: the winding up of companies and capital reduction under the Act, proceedings under the Act shall be commenced by originating [18] This provision mandates that any action commenced under the Companies Act 1965 (which has been superseded by the CA 2016) must be commenced by originating summons. [19] In Ng Chee Choy (supra), after considering the reason for the requirements in order 88 rule 2 of the ROC which is that matters under the Companies Act are to be disposed of quickly the court held that only in the unlikely event that proceedings cannot be disposed of through affidavit evidence should the conversion of an originating summons into a writ action be allowed. The same approach was taken in Mohamed Zahid Yon (supra), where the court held that as order 88 is a specific provision catering to proceedings under the Companies Act, the conversion of an originating summons into a writ should only be allowed where it is necessary to ensure a just disposal of the action. [20] Guided by Ng Chee Choy (supra) and Mohamed Zahid Yon (supra), I am of the view that only in exceptional cases where affidavit evidence will not result in the fair disposal of an action, for example, where there exist allegations of fraud or where there is a material conflict of affidavit evidence, should the court depart from the norm, and convert an action under the CA 2016 that has been commenced by way of originating summons into a writ action. [21] In this case, the issues in dispute which relate to the failure to hold meetings, to make available audited financial statements, to declare dividends and to make information available, are issues that can be determined from statutory documents, court documents, notices, minutes of meetings and correspondences between the parties. D. Decision [22] Based on the considerations above, the court finds that the issues in disputes would be able to be determined by way of affidavit evidence. As such, the conversion of the originating summons to a writ cannot be justified. [23] The court therefore dismissed enclosure 50, with costs. Dated 15 July 2024 ADLIN ABDUL MAJID Judge High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiff : S Sivaneindiren (together with Jayne Koe) of Messr. Cheah Teh & Su 1st, 2nd and 4th : Sng Eu Kim of Messrs. Sulaiman & Taye defendants 3rd defendant : Kenneth Gomez of Messrs. Sabarudin Othman & Ho