Warisan Medicq Group Sdn. Bhd. v Sri Janaki Devi A/P Palakastin (WA-22NCvC-550-08/2024)

WARISAN MEDICQ GROUP SDN. BHD.

NAVANEETH A/L PERPAKARAN ... DEFENDANTS (IN THE COUNTERCLAIM) 04/08/2025 17:13:09 WA-22NCvC-550-08/2024 Kand. 98 S/N KZok7gPMq0utiIb11lnABw GROUNDS OF JUDGMENT (encl. 18)

In these Grounds of Judgment, the parties shall be referred to as they are in the counterclaim.

On 31.12.2024, the Plaintiff filed an application for discovery of documents pursuant to O. 24, rr. 3, 7, 12 and 16 of the Rules of Court 2012 (‘RC 2012’) against the Defendants.

Initially there were eight categories of documents sought by the Plaintiff. However, the Plaintiff subsequently withdrew one category of document whilst in respect of four categories of documents, the parties agreed, with guidance from the Court, to take the necessary steps to obtain a report by a handwriting expert. This thus left the following categories of documents as per prayer (1) in encl. 18:

Accounting Records of the 1st Defendant (‘D1’), including, but not limited to those required by ss 47, 245, and 341 of the Companies Act 2016 (‘CA 2016’) (whether in physical or electronic form), including –

Trial Balance and supporting documents between

(ii) General Ledger and supporting documents between May 2022 to February 2024;

(iii) Profit and Loss Account and supporting documents between May 2022 to February 2024; and

(iv) Balance Sheet showing details of the assets, liabilities and owner’s equity of the business between May 2022 to February 2024 and the supporting documents;

D1’s bank account statements from OCBC Bank and any other banks in which D1 maintains its business accounts, between May 2022 to February 2024 and the supporting documents (hereinafter collectively referred to as the ‘Bank Statements’); and

copy of the data and records from the Clinic Management System known as System Admin between May 2022 to February 2024 containing patients’ personal information, diagnosis, treatment that was given, list of medication and payment record and the supporting documents (hereinafter collectively referred to as the ‘CMS Documents’).

The cause papers in relation to the application are as follows:

the Plaintiff’s Affidavit In Support (‘AIS’) affirmed on 31.12.2024 (encl. 19);

the Defendants’ Affidavit In Reply (‘AIR’) affirmed by the 2nd Defendant (‘D2’) on 9.1.2025 (encl. 20); and

the Plaintiff’s AIR affirmed on 4.2.2025 (encl. 22).

The Plaintiff is a medical doctor with an address in Kota Tinggi, Johor.

D1 is a company registered in Malaysia under the CA 2016 with a registered address at No. 12, Jalan Wangsa Jaya Utama, Taman Wangsa Jaya, Tanjong Malim, 35900 Perak.

D2 is the Managing Director and shareholder of D1.

Based on a letter dated October 2021, D1 appointed the Plaintiff as the Person in Charge (‘PIC’) at Klinik Medic Q, No. 31, Jalan Stesen, 35800, Slim River, Perak (‘Clinic’).

The Plaintiff accepted the appointment as PIC vide the letter of acceptance dated 1.11.2021.

On 1.6.2022, the Plaintiff and D1 entered into an employment contract with the Plaintiff as the PIC where one of the terms of S/N KZok7gPMq0utiIb11lnABw the contract was that termination by any party requires a minimum of three months written notice or payment of three times the basic monthly salary.

There was also a term on the transfer of ownership or application of the PIC to a newly designated individual whereby compensation in the sum of RM1 million has to be paid if the Plaintiff leaves the employment without transferring ownership and D1reserves the right to withhold the fees and cash collection for treatment which has not been completed and other fees.

By way of WhatsApp on 13.2.2023, the Plaintiff submitted her resignation as PIC and indicated her intention to removed herself as a Director of D1.

D1 accepted the Plaintiff’s resignation and reminded the Plaintiff of the above-mentioned provisions in the employment contract.

The dispute between the parties eventually led to the filing of the instant suit whereby D1 alleged that the Plaintiff has breached the employment contract by failing to provide written notice of at least three months and not paying the compensation fee of RM1 million, and by failing to transfer ownership in D1 and the PIC to the newly appointed PIC before the Plaintiff resigned.

In addition, D1 claimed that the Plaintiff has breached the statutory duties as provided under s 31 of the Private Healthcare Facilities and Services Act 1998 [Act 586].

D1 sought, among others, for declaratory orders and payment in the sum of RM1 million and general damages.

The Plaintiff counterclaimed for, among others, declaratory orders of her own, outstanding salary in the sum of RM90,000.00 and other monetary claims, exemplary damages and aggravated damages. Among the accusations made by the Plaintiff against the Defendants were that –

she was removed from D1 and/ or the Clinic subsequent to the utilisation of her financial contributions and professional qualifications to secure the requisite licenses for the establishment of D1 and/ or the Clinic;

the termination of her services at the Clinic, in her capacity as a medical doctor, was without due compensation;

she was removed from D1 without the restitution of her total invested capital;

the appropriation of her shares was without due consideration; and

the Defendants had created a hostile work environment through the non-payment of her remuneration and the misappropriation of her funds, thereby causing her undue mental distress due to investment losses and exploitation by the Defendants.

As stated earlier, the Plaintiff’s application was made pursuant to O. 24, rr. 3, 7, 12 and 16 of the RC 2012 which stipulate on orders for discovery, discovery of particular documents and for production of documents to court, and the consequences for failure to comply with the requirement for discovery.

The legal principles for an order for discovery were laid down in the oft-cited case of Yekambaram Marimuthu v Malayawata Steel Bhd [1994] CLJ 581, namely –

there must be a document;

the document must be relevant; and

the document must be or have been in the possession, custody or power of the party against whom the order of discovery is sought.

The Plaintiff contended that it is indisputable, that the items of which discovery is sought are documents and that they are in the possession, custody or power of the Defendants or D1’s S/N KZok7gPMq0utiIb11lnABw agent such the company’s accountant, auditor or corporate secretary.

On the 1st hearing date of the application, the learned counsel for the Defendants conceded that the requirements in subparagraphs 19(a) and (c) above are satisfied in this case, albeit with the caveat that some of the documents are in the possession of the Company Secretary. Nevertheless, these documents would be within D2’s power as D2 can easily instruct the Company Secretary to produce the same. I had expressed this view and nothing to the contrary was raised by the Defendants’ counsel.

In the circumstances, the only element left to be fulfilled by the Plaintiff is that the documents sought must be relevant. As such, the counsels were directed to re-file the Joint Scott Schedule (‘JSS’) by focussing only on the element of relevance in respect of the Accounting Records, Bank Statements and CMS Documents. In deciding the application in encl. 18, I had considered the submissions of the parties in the JSS (encl. 57).

The Defendants took the position that the Plaintiff was not entitled to request the Accounting Records as it was a mere fishing expedition and to delay the fair trial. Specifically, the S/N KZok7gPMq0utiIb11lnABw Defendants reasons for resisting the Plaintiff’s application are as follows:

the Plaintiff was not entitled to request the Accounting Records for any period after February 2024 as the Plaintiff has resigned from her position in February 2023;

on 28.8.2023, LT Account Services (‘Accountant’) had forwarded the account details to the Plaintiff. It was the Plaintiff’s responsibility to either agree with, or dispute, the figures as stated in the confirmation certificate. However, the Plaintiff failed to respond or sign the confirmation certificate and did not reply to the e-mail sent. In her e-mail dated 1.9.2023, the Plaintiff instructed the Accountant to finalise the management account and financial report without her confirmation of the certificate. Consequently, the Accountant followed her instructions and finalised the accounts as of 31.10.2022 (see exhibit “NP-5”, encl. 20);

to date, the Defendant has wilfully refused to cooperate with the Accountant regarding the accounts. All details of daily collections or income have been provided to the Plaintiff. All copies of documents requested by the Plaintiff have been sent to her by the Company Secretary and the Accountant, to whom the Plaintiff has access at all material times. Nevertheless, the Plaintiff has chosen not to respond to these accounts;

contrary to the Plaintiff’s allegation that D1’s Accountant was appointed by D2 and therefore she had no access to the documents and that D2 was controlling the Accountant, the Plaintiff and D2 had appointed the Accountant (see exhibit “NP-6”, encl. 20); and

(e)

In my considered view, the Accounting Records and Bank Statements are relevant for the following reasons:

the Accounting Records and Bank Statements are relevant to the factual issues in dispute whereby, among the allegations made by the Plaintiff against the Defendants are undue advantage taken by D2 against D1, and D2’s misconduct and misuse of D1’s funds (see, inter alia, paragraphs 4A(a)(i) and (ii); 7.1(w) and (x); and 17(ii),

(iv), (vii), (viii) and (ix) of the Amended Defence and Counterclaim); S/N KZok7gPMq0utiIb11lnABw

the General Ledger will enable the Plaintiff to trace the flow of funds, identify irregular transactions and pinpoint the occurrence of any discrepancies;

the Profit and Loss Account would allow the Plaintiff to analyze the D1’s income, expenses and profit/ loss over time; identify unusual changes that could signal fund misappropriation; and verify the legitimacy of reported expenses;

the Balance Sheet assesses D1’s assets, liabilities and equity at a specific time, hence this would enable the Plaintiff to identify discrepancies in the values of assets or unexplained liability changes that could indicate fund misappropriation;

during the hearing, the learned counsel for the Defendants conceded that the Plaintiff is still a Director of D1. Therefore, in her capacity as a Director and shareholder of D1, the Plaintiff has to conduct a comprehensive assessment of the legitimacy of all expenditures incurred by D1 and the full extent of D1’s financial liabilities. In this regard, the Plaintiff must review D1’s financial documents, including the Trial Balance, to verify the General Ledger’s mathematical accuracy (debit/ credit equivalence) and identify accounting errors. The financial documents will permit the verification and justification of reasonable and duly authorised S/N KZok7gPMq0utiIb11lnABw expenditure of D1’s funds. This entails confirming the proper appointment of D1’s staff and the justifiability of their appointments and remuneration, and verifying that all expenses incurred by, and claimed from, D1 received appropriate approval and were permissible. The financial records will further assist in the ascertainment of the legitimacy of the justifications provided by the Defendants for the non-payment of the Plaintiff’s Director fees, dividends and salary. The Plaintiff has filed a counterclaim alleging non-receipt of salary, misuse of D1’s funds and bad faith on D2’s part in managing, operating and controlling D1. Hence, it is reasonable for the Plaintiff, in her capacity as a Director of D1, to be given the accounting Records; and

the Bank Statements would indicate the total amount of funds which the Plaintiff had transferred to D1 and any payments made by D1 to the Plaintiff, and, where applicable, will set out the specific purpose of each disbursement. The Bank Statements would also show D1’s incoming and outgoing financial transactions and whether these amounts tally with the prepared accounts. Taken together with other relevant financial documents, the Bank Statements will facilitate the verification of any consideration exchanged for the transfer of shares and the return of the Plaintiff’s invested capital.

As regards the Defendants contention that the Plaintiff had been given the draft account from the Accountant but the Plaintiff did not return the confirmation certificate, the Plaintiff’s e-mail to the Accountant vide e-mail dated 11.9.2023 must be read in its entirety. If this is done, it would show that the Plaintiff said the following: “… I have received the draft account from the accountant. This is the first time since company incorporated on the 31st May 2021, that I am citing any financial statements. I hope you have cited the draft accounts too. Eventhough, I am the only other legitimate director, the primary responsible director namely Navin has included himself and his mother as the two required signatory of the accounts. I was not privy at all, not consulted and not made aware any details of this account which also specifically did not also state how much owned by the company to me as a loan. Hence, I should not be made responsible for this account. I also absolutely have no control whatsoever nor being informed of the financial affairs of the company since incorporated. S/N KZok7gPMq0utiIb11lnABw I also note your resolution seeking to approve and indemnify already been signed by Navin and his mother (whom appointed improperly). Hence, given the above situation and circumstances, it is inappropriate for me to sign an indemnify. Suggest you proceed without my signature on a without prejudice basis as provide under Clause 11 Third Schedule of Section 2120 of the CA 2016 and proceed to circulate as required under Section 257/258 of CA 2016 and lodge with the Registrar of Companies asap as required under Section 259(1) of the CA 2016 in order to avoid any penalty under Section 259(3) of the CA 2016 for the failure by the primary director to lodge on time.”.

It is the Plaintiff’s pleaded case that she was never given access to all the accounts and unless all financial documents, accounting records and bank statements are given to her, she will not attend any meeting of the Board of Directors and nor will she give any comments on matters which are related to D1’s financial status (see paragraph 19I, Balasan Kepada Jawapan Kepada Pembelaan Terpinda, encl. 55).

The grounds relied upon by the Defendants in submitting that the Plaintiff was not entitled to the CMS Documents are as follows:

the CMS Documents contain private and confidential information regarding D1’s patients which is protected under the Personal Data Protection Act 2010 [Act 709];

prescribed medications, rendered services and associated supporting documentation contain confidential information of patients which cannot be disclosed to any parties;

the purpose of the CMS Documents is solely to review the fee charges. It is irrelevant for the Plaintiff to request details concerning patients and their diagnoses, and the supporting documents;

the Plaintiff is currently employed at a different clinic. Hence, disclosing the patients’ details in the CMS Documents could result in misuse of information to the Plaintiff’s personal advantage, for example, by transferring patients to her own clinic;

the Plaintiff is fully aware that she must get consent and approval for her current employment from the Board of Directors of D, which she failed to do;

the Plaintiff is still able to obtain the details of fees for services through the company’s accounts without the need for the CMS Documents;

the Plaintiff voluntarily resigned from her position as the PIC at the Clinic. She was never excluded from financial management but she has wilfully refused to attend the Directors’ meetings or to respond to the auditors’ inquiries; and

the burden is on the Plaintiff to prove her claims against D2.

After deliberating on the parties’ submissions, in my opinion, the CMS Documents are relevant on the following grounds:

the Clinic Management System is capable of generating detailed records pertaining to prescribed medications, rendered services and associated supporting documentation. These records will outline the fees charged to each patient seeking treatment at the Clinic. With this information, the Plaintiff would be able to conduct a thorough verification and cross-referencing analysis against the financial documents. This process S/N KZok7gPMq0utiIb11lnABw will further facilitate the confirmation of the Clinic’s income, enabling a comparative analysis of daily, weekly, monthly and annual collections against the reported income to ascertain accuracy and completeness;

the Plaintiff alleged that, despite the agreed equal profit-sharing arrangement, she has not received her share of the profits nor her stipulated monthly salary for medical services performed at the Clinic. The Defendants have asserted that salary payments are contingent upon D1 generating a profit or the settlement of all outstanding liabilities. To date, the Plaintiff does not possess any information regarding the precise nature of D1’s liabilities or the manner in which these liabilities were accrued;

the Plaintiff additionally alleged that cash payments made by patients at the Clinic were not deposited into D1’s bank account, but was directly transferred to D2. It is thus relevant for the Plaintiff to be given access to the Bank

it is a statutory requirement that, as the PIC of a medical clinic, the Plaintiff is obligated to maintain attendance, referral and death registers for all patients. Consequently, to ensure compliance with this obligation, she must be granted access to the relevant data.

There were other arguments raised by the Defendants in the JSS, but in my opinion, the hearing of the Plaintiff’s application in encl. 18 is not the appropriate juncture to submit on these matters as they involve heavily contested averments of facts. 30 To sum up, the three principal requirements for an order of discovery have been satisfied by the Plaintiff. Therefore, her application for the Accounting Records, Bank Statements and CMS Documents was allowed.

However, in respect of the CMS Documents, I was of the view that it must be subject to conditions. The learned counsels were directed to discuss the proposed conditions after the pronouncement was made that the Plaintiff’s application was allowed. Ultimately, the Terms of Undertaking (‘ToU’) for the CMS Documents which were agreed are as follows: “1. Dokumen-dokumen yang diberikan hanya digunakan untuk tujuan prosiding ini.

Defendan tidak boleh mengedarkan dan/atau menerbitkan dokumen-dokumen ini kepada mana-mana pihak yang lain kecuali bagi maksud penyediaan perbicaraan kes ini iaitu untuk pengesahan oleh –

pesakit-pesakit yang dinyatakan dalam Sistem Pengurusan Klinik ('SPK') atau ibu bapa pesakit-pesakit tersebut bagi pesakit-pesakit yang di bawah umur;

akauntan;

juruaudit; dan/atau

kakitangan Klinik Warisan Medicq yang terdahulu atau yang kini bekerja di Klinik tersebut.

Defendan tidak boleh menghubungi pesakit-pesakit yang dinyatakan dalam SPK kecuali untuk tujuan prosiding ini.”.

In respect of the period for which the Accounting Records, Bank Statements and CMS Documents were sought, namely from May 2022 to February 2024, the Defendants did not specifically address this issue in the written submissions. It was not until the learned counsels were questioned by the Court that the Defendants’ counsel said the Clinic had started in May 2022 and the Plaintiff resigned in February 2023.

Meanwhile, the Plaintiff’s counsel explained that she just took over the file and she ventured a guess that “February 2024” is S/N KZok7gPMq0utiIb11lnABw mentioned in the prayers in encl. 18 because the last correspondence between the solicitors was in January 2024, when the documents were sought.

As the Defendants did not raise any issue with the period from May 2022 to February 2024 in their AIR and written submissions, I did not see any valid reason to order for a different period than that as prayed by the Plaintiff.

Costs of RM2,000.00 was ordered to be paid by D1 to the Plaintiff within three weeks from the date of decision, subject to allocatur. Dated: 30 July 2025 (ALIZA SULAIMAN) JUDGE HIGH COURT IN MALAYA (NCvC2) KUALA LUMPUR Solicitors for the Plaintiff : Natasha Parvena Loh Velu Messrs. Loh Velu & Partners Solicitors for the Defendants: Rajesweri a/p Paramasevam