Zen Courts Sdn. Bhd. v Bukit Jalil Development Sdn. Bhd. dan 2 Lagi (W-02(IM)(NCC)-842-04/2017)

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1 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANGKUASA RAYUAN) RAYUAN SIVIL NO. W-02(IM)(NCC)-842-04/2017 ANTARA ZEN COURTS SDN. BHD. (NO. SYARIKAT: 855077-U) … PERAYU

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(ii) that the Petitioner be restored to the Register of the 1st Respondent as the registered owner of 30% of the share in the 1st Respondent;

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(iii) that two (2) persons nominated by the Petitioner be appointed as directors of the Board of Directors of the 1st Respondent. Background [4] The Petitioner filed a petition pursuant to section 181 Companies Act,1965 (“the 181 Petition”) on the grounds that the 1st and 2nd Respondent breached a Joint Venture Agreement dated 12.9.1995 (“the JVA”) entered between United Engineers Berhad (“UEM”) and the 2nd Respondent. The 1st Respondent was incorporated pursuant to the said JVA. Under the terms of the JVA, UEM held 30% shareholding and the 2nd Respondent held 70% in the 1st Respondent. [5] On 27.3.2012 after a full hearing, the High Court concluded that the 2nd Respondent had acted in an oppressive manner in the affairs of the 1st Respondent company. The High Court allowed the 181 Petition and granted the following reliefs –

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(ii) The appointment of an independent valuer to be mutually agreed by the Petitioner and the 2nd Respondent. In the event the parties could not agree to the independent valuer, the parties at liberty to apply to the court to appoint a valuer.

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(iii) The valuation to be done within three (3) months from the date of the Order. The parties may make representations to the valuer as to the valuation.

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(iv) The valuer appointed shall file the valuation report into Court and the parties may apply.

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(vi) The costs of the valuation to be borne by the 1st Respondent.

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(vii) The 2nd Respondent and Petitioner shall be at liberty to apply. [6] Ferrier Hodgson MH Sdn. Bhd. (“Ferrier”) was mutually appointed by the parties to the 181 Petition as the valuer to conduct the valuation of the shares for the Buy-Out exercise. Ferrier completed the valuation and submitted the final valuation report dated 31.12. 2012. The Petitioner, however was not satisfied with the value of its 30% shareholding valued 6 at RM35.97 million assessed by Ferrier. The Petitioner claimed that the fair market value of the shares was RM262 million. [7] Dissatisfied with the valuation the Petitioner filed a Notice of Application dated 26.2.2013 (Enclosure 80) to make representation on the valuation report and to call expert evidence in Court. The grounds of the application, inter alia, were as follows:

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(ii) Ferrier prepared a draft valuation report which invited parties to comment on it. The Petitioner had responded by counter offering a valuation done by Hartanah Consultants (Valuation) Sdn Bhd (“Hartanah”).

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(iii) Ferrier applied the wrong considerations when it relied on the valuation report of Henry Butcher in respect of the value of the land and disregarded the higher valuation conducted by Hartanah on the gross development value of the most priced asset of the 1st Respondent company.

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(iv) The Petitioner averred that it would be just and reasonable that sufficient material be provided for an adequate valuation. 7 [8] The 2nd Respondent subsequently filed a Notice of Application dated 15.3.2013 (Enclosure 84) for the Court to determine the final value of the Buy-Out of the Petitioner’s shares and for consequential orders to give effect to the purchase of the shares. The learned High Court Judge heard both the applications in Enclosures 80 and 84. After having considered the submissions of the parties the learned High Court Judge dismissed Enclosure 80 and allowed Enclosure 84. The Court ordered the final Buy-Out value of the Petitioner’s shares as follows:

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(ii) the Buy-Out must be completed no later than 4 months after the date of the Order;

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(iii) Petitioner to procure the resignation of Mr. Yeoh Keng Tat as director of the 1st Respondent, such resignation to be effective on or before the date of completion of the purchase of the 30% shares. [9] Dissatisfied with the decision of the High Court, the Petitioner filed an appeal against the decision of the learned High Court Judge with respect to Enclosures 80 and 84. The Court of Appeal heard the appeal and 8 affirmed the decision of the High Court Judge. The Petitioner subsequently appealed to the Federal Court and on appeal to the Federal Court the Petitioner‘s appeal was allowed. The decisions of the courts below were reversed. The Federal Court ordered, inter alia, as follows;

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(ii) Order in terms of Enclosure 80;

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(iii) cross examination of expert witnesses in respect of the valuation reports to be conducted before another High Court Judge. [10] The 2nd Respondent filed for an order to execute the Buy-Out Order. On 25.2.2014 the Senior Assistant Registrar allowed the 2nd Respondent’s application and made the following orders:

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(ii) That the 2nd Respondent be directed to deliver to its solicitors as stakeholder, cashier’s orders or banker’s cheques made payable to “Chellam Wong” for the following amounts: a) The total amount of RM35,970,000.00 being the purchase price for the shares; and b) RM576, 505.48 being the amount of interest computed at 5% per annum from 18.7.2013.

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(iii) Mr. Yeoh Keng Tat be deemed to have ceased to be a director of the 1st Respondent.

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(iv) The Petitioner pay costs of RM10, 000.00 each to the 1st Respondent and the 2nd Respondent. The High Court [11] The learned High Court Judge having considered the submissions of the parties, dismissed the application of the Petitioner to restore the status ante of the Petitioner in the 1st Respondent prevailing immediately prior to the Court’s Order dated 18.7.2013. His Lordship was of the considered view that the Buy-Out Order pursuant to the High Court Order dated 27.3.2012 remained intact and unchallenged as there was no appeal by the Petitioner against that Order of the High Court. What the 10 Petitioner had attempted to do was to challenge the Order by filing the notice of application in enclosure 167. The mode taken to challenge the said Buy-Out Order by filing Enclosure 167 was wrong and an abuse of process of the court. The learned High Court Judge found that the Petitioner was barred by the doctrine of res judicata from filing Enclosure 167 in its attempt to challenge the Buy-Out Order. [12] The questions posed to the Federal Court in the Petitioner’s Notice of Motion for leave to appeal to the Federal Court were restricted to matters in relation to the valuation of the Petitioner’s shares in the 1st Respondent and not the Buy-Out Order. Our Decision [13] Learned Counsel for the Petitioner submitted that it is trite law that a successful appellant has a restituitionary right to any property transferred under any judgement of the court which is reversed. When an order is set aside on appeal, the Court has the inherent jurisdiction to make restitution and to restore the parties’ position prior to the impugned order granted. Therefore, with the Federal Court Order setting aside the High Court dated 18.7.2013, it would mean that the Petitioner was entitled to the restoration of the status ante of the parties. 11 [14] It was further argued that since the Order dated 18.7.2013 and the consequential orders have been set aside by the Federal Court, the Petitioner must be restored to its original position as the Buy-Out has not been completed. The restoration will preserve the integrity of the Order made on 27.3.2012. [15] Having heard parties and having perused the appeal records, we were not persuaded that we should restore the status ante of the Petitioner in the 1st Respondent. In short, we concurred with the learned High Court Judge that the Buy-Out Order remains unchallenged by the Petitioner. The Buy-Out Order dated 27.3.2012 is still good, valid and intact. The Federal Court in its grounds of judgment in the appeal (Re: Zen Courts Sdn. Bhd. V. Bukit Jalil Development Sdn. Bhd. & Ors [2017] 2CLJ 32) had given clear orders: “Effectively, the new judge is to hear encl. 84 and determine the final value of the shares, in accordance with Abdul Aziz J's direction. This setting aside order, by no stretch of the imagination had set aside the buy-out order of 27 March 2012 or taken away the essence of the agreement. In short, this buy-out order is still good, valid and intact.” 12 [16] The sum of RM35.97 million has been paid to the Petitioner. The proceedings in the High Court will determine the final value of the shares in accordance to the Buy-Out Order i.e. whether the value of the share is RM35.97 million or RM 262 million as claimed by the Petitioner. Conclusion [17] For the above reasons we unanimously dismissed the appeal. We ordered costs of RM5000 to each set of Respondents’ solicitors subject to payment of allocator. We also ordered that the deposit be refunded to the Petitioner. Sgd (HASNAH BINTI DATO’ MOHAMMED HASHIM) Judge Court of Appeal, Malaysia Putrajaya Date: 21st February 2018 13 Counsels for the Appellant: Datuk Seri Gopal Sri Ram Miss Emily Wong Mr. David Yii Tetuan Dennis Nik & Wong 68-1, Jalan Telawi, Bangsar Baru, 59100 KUALA LUMPUR Counsel for the 1st Respondent: Mr. John Skelchy Tetuan James Monteiro Unit D4-6-1, Solaris Dutamas, No.1, Jalan Dutamas 1, 50480 KUALA LUMPUR Counsels for the 2nd and 3rd Respondents: Mr. Gopal Sreenevasan Mr. PL Leong Tetuan Sreenevasan Young J-3A-13, Solaris Mont Kiara, No.2 Jalan Solaris, 50480 KUALA LUMPUR